Lawsuit Seeking Ownership Stake in Facebook Going Nowhere Fast

A fifth attorney for Paul Ceglia, the New York man suing for an 84 percent ownership stake in the social media juggernaut Facebook, has withdrawn from the case, raising further doubts about the legitimacy of Ceglia's claim. Jeffrey Lake, a San Diego attorney, filed papers on Oct. 17 seeking a delay in the case to give Ceglia time to obtain what will be his sixth lead attorney on the case.  Ceglia's long-time attorney, Paul Argienteri, who is serving as co-counsel, will remain on the case. Lake's withdrawal follows those of Connors & Vilardo in April of this year, Lippes Mathias Wexler Friedman and DLA Piper in June, and Edelson McGuire in July.

Although Lake did not provide a reason for his withdrawal, recent filings by Lake argued that he should not be sanctioned for obstructing discovery because Ceglia instructed him not to comply with the court's order to produce email accounts and passwords he had used since 2003. Facebook attorneys from Gibson Crutcher argued that the attorney's should be sanctioned not only for disobeying the court's discovery order but also for violating attorney-client confidentiality owed to Ceglia. Facebook's attorneys contend that Lake was required to impress upon his client the necessity to comply with the discovery order and, failing that, to withdraw from representation.

When DLA Piper withdrew from Ceglia's case earlier this year, Facebook attorneys suggested they might seek sanctions under Rule 11, which requires an attorney to certify that the contents of a filing are true "after a reasonable inquiry."  Facebook contended that the law firm's failure to provide discovery materials and its ultimate withdrawal indicated that there had never been a good-faith basis for filing the Ceglia's complaint. Citing the attorney-client confidentiality, DLA Piper did not provide a reason for its withdrawal from the case, or even indicate whether it voluntarily withdrew or had been fired by Ceglia.

The basis of Ceglia's claim is a contract he claims to possess in which Mark Zuckerberg gave Ceglia a 50 percent ownership interest in Facebook plus an additional percentage conditioned upon any delay in the launch of the social media site. Facebook contends that the purported contract is a forgery. In addition to the revolving door legal representation and apparent failure to comply with discovery orders, the legitimacy of Ceglia's claim has been clouded by accounts of previous run-ins with the law, generally involving what could be described as cons or scams. He has been accused of selling real estate he did not own both in New York and Florida and defrauding customers of his now defunct wood-pellet business by taking prepayments on orders that were not delivered. Ceglia also received a 10-year suspended sentence for possession of more than 400 grams of psilocybin, the active ingredient in hallucinogenic mushrooms and a Schedule 1 federally controlled substance.       

Sources:

Ceglia lawyer withdraws from Facebook law

Paul Ceglia: The Man Who Owns 84% of Facebook?

Facebook friend or foe?