Facebook Awarded $75,777 in Legal Fees

Facebook Inc. was awarded $75,777 in legal fees after a judge ruled that Paul Ceglia ignored a pretrial discovery order to turn over e-mail accounts in his ownership claim against the social network.

U.S. Magistrate Judge Leslie Foschio in Buffalo, New York, today gave Facebook most of the $84,196 it claimed as reimbursement for the 177 hours spent by its lawyers in filing motions to force Ceglia to comply with the order. Ceglia has already paid a $5,000 fine imposed by Foschio.

Ceglia claims he has a 2003 contract signed by Facebook co- founder Mark Zuckerberg that gave him half-ownership of the company, now worth an estimated $82.3 billion, according to Sharespost.com, which tracks nonpublic companies. Facebook, based in Menlo Park, California, operates the most popular social-networking site in the world.

Foschio rejected arguments by Ceglia that the fees claimed by Facebook were “stratospheric” and not justified by the “garden-variety” issues presented by the case. He said he cut the amount claimed by Facebook by 10 percent to trim any excess time that may have been included.

Foschio denied Facebook’s request for an order barring Ceglia from going forward with the case before he pays the attorneys fees.

Ceglia’s lawyer, Dean Boland of Lakewood, Ohio, said the court can expect Ceglia to comply with all its orders in the future. Boland took over as Ceglia’s lead counsel in the case in October, after Facebook claimed Ceglia had violated the discovery order.

“Once the court orders you to do something, you do it,” Boland said.

Facebook filed papers with the U.S. Securities and Exchange Commission Feb. 1. to raise $5 billion in an initial public offering.

The case is Ceglia v. Zuckerberg, 1:10-cv-00569, U.S. District Court, Western District of New York (Buffalo).

To contact the reporter on this story: Bob Van Voris in New York at rvanvoris@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.

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