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Facebook Sues Paul Ceglia's Lawyers, Alleging Malicious Prosecution

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By William Peacock, Esq. on October 21, 2014 9:55 AM

It's one thing to represent someone who has a questionable case. It's quite another to continue to press forward with a lawsuit when you have evidence that the case is not only questionable, but fraudulent.

If Facebook is to be believed, that's exactly what the multi-firm team that represented Paul Ceglia did. Ceglia claimed that Facebook founder Mark Zuckerberg sold him an ownership stake (now worth billions) in his startup social network. Ceglia's lawsuit was dismissed after evidence emerged that the contract he presented as proof of a deal was a forgery.

Fresh off that victory, Facebook isn't pursuing Ceglia for the false claims; the company is suing his lawyers.

You Knew He Was Trouble When He Walked In

In a suit filed yesterday, Facebook claimed that Ceglia's multi-firm team knew of the forgeries, yet agreed to remain silent and press forward in hopes of reaching a settlement:

"The lawyers representing Ceglia knew or should have known that the lawsuit was a fraud -- 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. In fact, Defendants' own co-counsel discovered the fraud, informed the other lawyers, and withdrew. Despite all this, Defendants vigorously pursued the case in state and federal courts and in the media."

According to Facebook, one of the firms, Kasowitz, Benson, Torres & Friedman, discovered the fraud and planned to tell the court. But one of the other firms allegedly convinced it to remain silent, reports The New York Times.

The multi-firm team, which included BigLaw firm DLA Piper, eventually dropped out of the case, but didn't alert the court to the fraud. Facebook then had to expend time and legal fees fighting Ceglia until the allegedly doctored documents were brought to light.

DLA Piper told the Times that they were only involved in the case for 78 days, and called Facebook's lawsuit "an entirely baseless lawsuit that has been filed as a tactic to intimidate lawyers from bringing litigation against Facebook."

Those lawyers include Ceglia's original counsel Paul Argentieri, as well as former New York attorney general Dennis C. Vacco, notes the Times. Both are named as defendants in the lawsuit, along with multiple law firms.

What Happened to Ceglia?

According to the Times, Ceglia is appealing the dismissal of his civil suit. He's also facing criminal charges over the forgeries and is expected to go to trial next year.

Ars Technica did an in-depth report on Ceglia's initial claims, including images of the allegedly doctored contracts, earlier this year.

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