Facebook and its founder Mark Zuckerberg are suing trans-Atlantic firm DLA Piper for its role in bringing a case which they allege was ‘based on fabricated evidence, for the purpose of extorting a lucrative and unwarranted settlement’.
DLA Piper acted for Paul Ceglia, who had worked with Zuckerberg (pictured) on a website prior to the launch of Facebook, in a claim against the social media company and its founder saying that he was entitled to at least 50% ownership of the company.
The social media giant named DLA Piper’s US chairman of intellectual property and technology, John Allcock, San Diego managing partner Robert Brownlie and San Diego-based attorney Gerard Tippitelli as defendants in the lawsuit.
The company said in the lawsuit that the defendant lawyers conspired to prosecute a ‘fraudulent lawsuit’ when they ‘knew or should have known that the lawsuit was a fraud as it was brought by a convicted felon with a history of fraudulent scams, and it was based on an implausible story and obviously forged documents’.
The claim against DLA Piper, as well as co-counsel firms Paul Argentieri & Associates, Lippes Mathias Wexler Friedman and Milberg, was filed in New York state courts yesterday (20 October 2014). The firms’ 2010 claim against Facebook failed and a federal grand jury dismissed the case as a fraud, with Ceglia indicted for the fraud.
The social media giant is claiming damages for the temporary restraining order preventing Facebook from selling or transferring any assets or stock in the company that Ceglia and his lawyers obtained during the case.
The company alleges that New York attorney Paul Argentieri helped to forge the documents and then enlisted other law firms to support the case through a contingency fee arrangement. Facebook and Zuckerberg’s lawyers said in the filing: ‘DLA Piper and its lawyers prepared, signed, and filed an Amended Complaint, which not only reiterated Ceglia’s reliance on the forged contract but also added quotes from obviously fabricated “emails”.’
The filing also notes that US litigation firm Kasowitz, Benson, Torres Friedman, who were also acting for Ceglia, ‘discovered on Ceglia’s own computer the authentic Street Fax contract between Ceglia and Zuckerberg’. This information was shared with co-counsel and Facebook asserts that ‘this discovery confirmed beyond any doubt that the lawsuit was based on forgery’.
Peter Pantaleo, DLA Piper’s general counsel, said in a statement: ‘This is an entirely baseless lawsuit that has been filed as a tactic to intimidate lawyers from bringing litigation against Facebook. DLA Piper, which was not part of this case at its outset or its conclusion, was involved for 78 days.’
He added: ‘Facebook and Mr. Zuckerberg claim that they were damaged in those 78 days, yet a mere 10 months after DLA Piper withdrew from the case and while the litigation was still pending, Facebook went to market with an initial public offering that valued the company at $100 billion. Today, Facebook is worth $200 billion and Mr. Zuckerberg is among the richest people in the world. We will defend this meritless litigation aggressively and we will prevail.’