It seems from the time Facebook Inc. was founded, Mark Zuckerberg, has been under the lens of legal scrutiny. As a result Zuckerberg and Facebook are no strangers to breach of contract claims. Paul Ceglia, a man from New York, claims that a contact allegedly created in 2003 entitles him to half ownership of the social media company. Recently, Ceglia lost his third legal team after he allegedly told the legal team to violate a court order.
Ceglia originally filed the breach of contract suit in June 2010 and since that time has burned through three teams of lead counsel. In addition, two other law firms have declined to represent Ceglia after review of his case. Ceglia lost his most recent legal team when he directed them to violate a court order.
Ceglia’s alleged order to violate a court order stems from a request to produce e-mail accounts and passwords. Facebook requested that a U.S. Magistrate Judge punish Ceglia and his legal team for failing to produce email accounts and passwords used by Ceglia since 2003. According to court documents, Ceglia instructed his legal team “not to comply” with the request.
According to Paul Ceglia, he and Zuckerberg communicated over internet-based email in 2003 and 2004. Ceglia and Zuckerberg both agree that Zuckerberg signed a contract with Ceglia to perform coding for Ceglia’s upstart company called StreetFax.com.
Ceglia claims the contract included a clause that gave him an ownership interest in Facebook in exchange for start-up money.
Facebook claims the e-mails are phony, and the social media company says its computer experts have identified the actual contract between Zuckerberg and Ceglia which does not mention the company Facebook.
Source: Bloomberg, “Facebook ownership claimant Ceglia loses his third legal team in dispute,” Bob Van Voris, Oct. 18, 2011