Web Developer Claims He Owns 84% of Facebook

Purportedly Facebook CEO Mark Zuckerberg gave the original web designer 84% of the company and a New York Judge issued the designer's TRO (Temporary Restraining Order) which has been challenged by Zuckerberg and Facebook. Paul Ceglia's lawsuit alleges that he was paid $1,000 by Zuckerberg for 50% of the company, plus 1% per business day from January 1, 2004 until till the website was completed. Although New York Judge Thomas Brown issued the TRO, Facebook requested that the case be moved to federal court. Why Ceglia waited this long is unclear since he and his lawyer are not responding to the media, but now that Facebook has an estimated 500 million users and is worth more than $11.5 billion I guess claims of ownership are not a big surprise. However, in New York the statute of limitations on contract breaches are 6 years so Ceglia probably will lose on that issue alone.

What's The Standard for Issuing Injunctive Relief?

It does seem strange that a TRO was issued because in order to prove to a Judge that a TRO should be issued there needs to be evidence of imminent and irreparable harm to the moving party, and it seems strange that Ceglia could have carried that burden. Also to get an injunction one must prove that money damages won't suffice and there is no other remedy available, and in this instance it seems that money damages would suffice and there are other remedies. Of course an interesting wrinkle to this case is that the Wall Street Journal reported that about Ceglia:

In 2009, New York's Attorney General Andrew M. Cuomo accused Mr. Ceglia of defrauding customers of his wood-pellet fuel company, according to a news release from the Attorney General's office. The state claimed that he took more than $200,000 from consumers and then failed to deliver any products or refunds. The wood-pellet case is ongoing.

This will be interesting litigation to follow. Stay tuned

Posted Thu, Jul 15 2010 11:26 AM by Peter S. Vogel

Filed under: eCommerce