July 1, 2022

Facebook sues DLA, Milberg, former NY AG over Ceglia case

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Mark-Zuckerberg-Article-201410201724By David Bario, From The Litigation Daily

The waiting game is over for the law firms that represented Facebook owner-wannabe Paul Ceglia.

The question of whether Facebook Inc. would sue Ceglia’s former attorneys has been hanging over the firms for at least two years, ever since it began to look like Ceglia’s case against the social media giant was an elaborate con. Facebook’s defense lawyers at Gibson, Dunn & Crutcher eventually demolished Ceglia’s contract claims, amassing enough evidence of fraud to persuade federal prosecutors to indict Ceglia in 2012. And Gibson Dunn has shown time and again that it relishes turning the tables on its adversaries’ counsel.

Sure enough, on Monday Facebook unveiled a malicious prosecution complaint against Ceglia’s onetime lawyers at DLA Piper, Milberg, Lippes Mathias Wexler Friedman and Paul Argentieri & Associates. The lawsuit, filed in state court in Manhattan, alleges that partners at the firms knew or should have known that Ceglia forged the contract at the heart of his highly publicized case—especially after another of Ceglia’s law firms sounded the alarm and bailed out. The defendants include two top IP and securities litigators at DLA, as well as a former attorney general for the state of New York who’s now a partner at Lippes Mathias.

Gibson Dunn, meanwhile, was forced to take a pass on the new suit. Partner Orin Snyder wasn’t available to discuss the case, but it appears that conflicts barred the firm from suing lead defendant DLA Piper. Gibson Dunn represents DLA in a major malpractice case now pending in New York.

Instead, the suit was filed by a team from Kellogg, Huber, Hansen, Todd, Evans & Figel led by Mark Hansen. Hansen didn’t respond to a request for comment on Monday.

Ceglia first sued Facebook and its founder Mark Zuckerberg in Buffalo federal court in 2010, alleging that he signed a contract with Zuckerberg during the young billionaire’s Harvard days that entitled him to an 84 percent ownership stake in the company. At least 10 different laws firms signed on to represent Ceglia along the way, including DLA Piper and Milberg.

Facebook and Gibson Dunn took an aggressive approach to the defense early on, and they quickly seized upon evidence that Ceglia had fabricated his purported contract with Zuckerberg. In March 2013 Snyder persuaded a magistrate judge that Ceglia’s contract was a cut-and-paste job. A year later U.S. District Judge Richard Arcara in Buffalo agreed with the assessment and tossed the case. Manhattan federal prosecutors, meanwhile, are continuing to press criminal claims against Ceglia for his alleged fraud on the courts.

In Monday’s lawsuit, Facebook describes a web of alleged deceit, collusion and, at minimum, intentional blindness on the part of Ceglia’s erstwhile counsel. The company claims that the lawyers ignored glaring red flags that Ceglia’s contract was phony, and that several of them shut their ears to warning bells sounded by another firm that briefly represented Ceglia: Kasowitz, Benson, Torres & Friedman. As we’ve reported, Kasowitz partner Aaron Marks wrote a letter to Ceglia’s counsel in April 2011, alerting them that the firm had dropped the case after forensics determined that the first page of the contract was fabricated.

In addition to the law firms, the complaint names as defendants leading DLA partners John Allcock and Robert Brownlie, as well as partner Gerard Trippitelli and of counsel Christopher Hall. (Allcock and Brownlie are cochairs of DLA’s IP and securities litigation practices, respectively.) The suit also names Milberg’s Sanford Dumain as a defendant. And it names Lippes Mathias partner Dennis Vacco, who served as New York attorney general from 1995 to 1998.

The complaint alleges that DLA Piper played “a central role in the fraudulent scheme” by actively lending the weight of its prestige to Ceglia’s contract case. And it says all the defendants “conspired to prosecute the action even though they knew or reasonably should have known the claims they were advancing were meritless and based on fabricated evidence.”

In a statement, DLA Piper general counsel Peter Pantaleo vowed to fight the suit and emphasized that his firm represented Ceglia for less than three months. “This is an entirely baseless lawsuit that has been filed as a tactic to intimidate lawyers from bringing litigation against Facebook,” Pantaleo said. Milberg’s Dumain didn’t immediately respond to a request for comment.

IMAGE: Mark Zuckerberg Brian Solis

For more on this story go to: http://www.litigationdaily.com/id=1202674027748/Facebook-Sues-DLA-Milberg-Former-NY-AG-Over-Ceglia-Case#ixzz3GmP5F1BJ


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