Remember Paul Ceglia, the upstate New York wood pellet salesman who claimed he owned half of Facebook by virtue of a 2003 contract Mark Zuckerberg signed when he did some coding work for Ceglia? Ceglia's suit ran off the rails when Facebook's lawyers at Gibson, Dunn & Crutcher came up with evidence suggesting he had doctored the purported contract and dozens of e-mails from Zuckerberg that supposedly backed his story. A succession of Ceglia lawyers (including a team from DLA Piper) quit the case and Ceglia himself moved to Ireland.
The litigation struggles on, with Ceglia's current counsel-solos Paul Argentieri and Jeffrey Lake-continuing to assert that Facebook violated Ceglia's privacy by publicly disclosing his e-mail accounts and passwords in public filings and its lawyers have committed other misdeeds in bullying Ceglia into submission.
But now Ceglia's lawyers may have to put their money where their mouth is. At the beginning of September, Gibson Dunn filed yet another motion for expedited discovery, asserting that Ceglia was stalling on a judge's order that he turn over all information on his various e-mail accounts. At the end of the motion, Gibson said it should be awarded its costs and fees for litigating the discovery dispute. "Defendants have made repeatedly good faith efforts over the past two months to resolve this issue," they wrote. Ceglia's conduct is "contumacious, obstructionist, bad faith misconduct carried out for the purpose of concealing additional evidence of Ceglia's fraud and criminal wrongdoing."
Buffalo federal magistrate Leslie Foschio took the motion very seriously. In a two-page Sept. 28 order, the magistrate ordered Ceglia to show why he shouldn't impose the sanction Facebook had requested.
Lake and Argentieri responded last Friday (although the brief just hit the electronic docket today; Reuters alum Jeff John Roberts of Paid Content first spotted it). In their four-page plea for mercy, Argentieri and Lake said they've only filed stay motions because Ceglia was so concerned about his privacy, and once the motions were denied, they moved as quickly as possible to turn over his information.
This is all prelude, of course, to the bigger question I've previously raised: If it turns out, as now seems all but inevitable, that Ceglia's purported contract is a fake and he manufactured the supposedly supporting e-mails, will Gibson Dunn seek Rule 11 sanctions against the firms that represented Ceglia along the way? I e-mailed lead Facebook counsel Orin Snyder, who's not shy about asking for sanctions against opposing counsel, but didn't hear back. Argentieri and Lake didn't return my calls.
(Reporting by Alison Frankel)
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