Trials & Litigation

Facebook sues DLA Piper, other firms, 9 attorneys, says they conspired on fraudulent case

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Sued in 2010 by Paul Ceglia, who claimed a majority ownership interest in Facebook Inc. based on documentation since determined by a federal court to have been faked, the social media goliath and its creator, Mark Zuckerberg, have now turned the tables.

A new lawsuit (PDF) filed Monday by Facebook and Zuckerberg against DLA Piper, three other law firms and nine attorneys who formerly represented Ceglia contends that the defendants “conspired to file and prosecute a fraudulent lawsuit … based on fabricated evidence, for the purpose of extorting a lucrative and unwarranted settlement.”

CNET, Fortune and the Wall Street Journal (sub. req.) also have stories.

In a written statement provided to the Bits blog of the New York Times (reg. req.), DLA Piper says the new suit’s claims are without merit and points out that the law firm represented Ceglia in the earlier suit for only a few months. “This is an entirely baseless lawsuit that has been filed as a tactic to intimidate lawyers from bringing litigation against Facebook,” writes Peter S. Pantaleo, who serves as general counsel for DLA Piper.

However, it is significant, according to Facebook and Zuckerberg, that DLA Piper stayed in the litigation after Kasowitz, Benson, Torres & Friedman discovered that the document on which Ceglia’s suit was based was a fraud and withdrew. The new suit doesn’t name Kasowitz as a defendant, only those who continued to represent Ceglia after allegedly being warned of the fraud.

Facebook and Zuckerberg are seeking reimbursement of their legal fees expended to defend the Ceglia litigation, as well as unspecified punitive damages.

A criminal case against Ceglia is ongoing and scheduled for trial in May.

Related articles: “Man Claims 84% Stake in Facebook, Gets TRO; FB Calls Suit Frivolous” “DLA Piper Withdraws from Paul Ceglia’s Suit Against Facebook” “Plaintiff Suing Facebook Hires New Lawyers Yet Again; This Time They Are from Milberg”

Reuters: “Federal judge dismisses Ceglia case against Facebook”

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