The Facebook, Inc. v. Connectu, Inc et al

Filing 771

RESPONSE (re 769 Administrative Motion to File Under Seal ) Opposition to Administrative Request to File 15 Page Oversized Brief filed byThe Facebook, Inc., Mark Zuckerberg. (Attachments: # 1 Declaration, # 2 Exhibit 1, # 3 Exhibit 2, # 4 Exhibit 3, # 5 Exhibit 4, # 6 Exhibit 5)(Chatterjee, Indra) (Filed on 10/27/2011)

EXHIBIT 3

Rose, Chinitz & Rose
COUNSELLORS AT LAW

ONE BEACON STREET, 4T" FLOOR
BOSTON • MASSACHUSETTS • 02108
ALAN D. ROSE

WWW.rose-law.net

TEL: [phone]
FAX: [phone]

MICHAEL L. CHINITZ
ALAN D. ROSE, JR.
RICHARD E. BOWMAN
LISA A. TENEROWICZ
MEREDITH A. WILSON
NICHOLAS J. ROSENBERG
AMY R. SILVERMAN

October 25, 2011

BY EMAIL AND FACSIMILE
Sean F. O'Shea
Michael E. Petrella
O'Shea Partners LLP
521 Fifth Avenue, 25th Floor
New York, NY 10175
Re:

Chang v. Cameron Winklevoss et al.,
Civil Action No. 09-5397-BLS1 (Suffolk Sup. Ct.)

Dear Sean and Michael:
We are writing concerning the Administrative Request of Cameron Winklevoss, Tyler
Winklevoss and Divya Narendra for Permission to: (1) File a Partially-Sealed Administrative
Request to Pay Lienholders and Complete the Exchange of Consideration Pursuant to Civil L.R.
79-5(c); (2) File an Oversized Brief in Support of Said Request; and (3) File the Supporting
Declaration of Tyler Meade and the Exhibits Thereto Under Seal Pursuant to Civil L.R. 79-5(b),
filed yesterday in The Facebook, Inc. v. ConnectU LLC et al., Civil Action No. 07-01389JW(N.D.Cal.)(the "Administrative Request").
The Administrative Request appears to seek leave to file, under seal, a request that the
District Court for the Northern District of California permit the Defendants to take possession of
the settlement proceeds of the Facebook litigation being held by Boise, Schiller & Flexner LLP.
As you know, those funds are the subject of the above-referenced litigation and the claims
asserted by Wayne Chang. At the January 24, 2011 hearing before Judge Lauriat, you expressly
represented to the Court that those funds would not be distributed until Chang's claims are
resolved:
THE COURT: I take it they [the settlement proceeds] wouldn't be distributed
until this claim was then resolved?
MR. O'SHEA: Well, that's correct, your Honor.

Rose, Chinitz & Rose
COUNSELLORS AT LAW

Sean F. O'Shea and Michael E. Petrella
October 25, 2011
Page 2
Hearing Before Hon. Peter J. Lauriat, Suffolk Superior Court, January 24, 2011 ("Hearing
Transcript"), 11:15 — 11:24 (Exhibit Ahereto).
Later in the hearing, Chang's counsel confirmed the Defendants' position that the funds
would be held until this case is resolved:
MR. ROSE: I'm very glad to hear Mr. O'Shea say today that they will not do
anything with those assets until this case is resolved.
Hearing Transcript at 24:13 — 24:16.
The Defendants' request to the California Court, and any action by the Defendants to
obtain the settlement proceeds prior to the resolution of this case, directly contradict the
Winklevosses' representations to the Court and the Court's statement that the funds "wouldn't be
distributed until this claim was then resolved."
Accordingly, we request that the Defendants abide by their representations to the Suffolk
Superior Court and withdraw the Administrative Request and/or not file their Partially-Sealed
Administrative Request to Pay Lienholders and Complete the Exchange of Consideration
Pursuant to Civil L.R. 79-5(c).
Please confirm by noon tomorrow, October 26, 2011 that the Defendants will not move
forward with their administrative request. If we do not receive Defendants' confirmation, Chang
will seek appropriate relief.
Very truly yours,

s J. Rosenberg

Rose, Chinitz & Rose
COUNSELLORS AT LAW

Sean F. O'Shea and Michael E. Petrella
October 25, 2011
Page 2
Cc: D. Michael Underhill
Boies, Schiller, &Flexner, LLP
5301 Wisconsin Avenue, N.W.
Washington, DC 20015
Tyler R. Meade
Meade & Shrag LLP
1816 Fifth Street
Berkeley, CA 94710
Charles P. Kindregan
Looney & Grossman LLP
101 Arch Street
Boston, MA 02110

EXHIBIT A

Copy
COMMONWEALTH OF MASSACHUSETTS

SUPERIOR COURT
DEPARTMENT OF THE
TRIAL COURT

SUFFOLK ss.

SUCV2009-05397-BLS1

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* * * * * *

* * ** * * * * * * * * *

WAYNE CHANG and THE I2HUB
ORGANIZATION, INC.,
Plaintiffs
v.
CAMERON WINKLEVOSS,
TYLER WINKLEVOSS, DIVYA NARENDRA
HOWARD WINKLEVOSS, CONNECTU, INC.
(f/k/a CONNECTU LLC), SCOTT R. MOSKO,
and FINNEGAN, HENDERSON, FARABOW,
GARRETT & DUNNER, LLP,
Defendants
* * * * * *

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* * * * * * * * * * * ** * * *

TRANSCRIPT OF PROCEEDINGS

BEFORE: Honorable Peter J. Lauriat
Suffolk Superior Court
Boston, Massachusetts
January 24, 2011

CAROLYN SPROUL, COURT REPORTER
SUFFOLK SUPERIOR COURT
BOSTON, MASSACHUSETTS

10
1

MR. O'SHEA:

But, actually, in the

2

briefs we point that out, and I think it's

3

educational for the Court to know that Mr.

4

Chang, in his own words, said soon after the

5

November 24 e-mail that I'm not going to go

6

through with this integration, the contract

7

claim is based upon an integration.

8

going to go through with it because there's

9

nothing set in stone.

10

no written agreement.

11

I'm not

In other words, there's

And the November 24 e-mail, your

12

Honor, upon which he bases his contract claims,

13

explicitly sets forth that we will go on to

14

enter a written agreement, something that was

15

never done.

16

naked grab for proceeds of the settlement of a

17

separate lawsuit, a lawsuit between my clients

18

and Facebook, that resulted in a settlement

19

which has not yet been received by my clients,

20

and that's another reason to grant the motion

21

and that is to stay because the case is not yet

22

ripe for adjudication.

23
24

This, your Honor, is in fact a

THE COURT:
for adjudication?

When does it become ripe

11

1

MR. O'SHEA: When my client has the

2

proceeds of that settlement, which I may note

3

for the Court, Mr. Chang had nothing whatever

4

to do with in terms of his unjust enrichment in

5

other claims. He had nothing whatever to do

6

with -- and he acknowledges that in his

7

complaint, that that --

8
9
10
11
12

THE COURT: I only asked you when it
became ripe. Let's stick with my question.
MR. O'SHEA: When it would become ripe
would be -THE COURT: Divide up the proceeds and

13

put them aside so they can be the subject of

14

this litigation.

15

MR. O'SHEA: When the proceeds are, in

16

fact, received and are available for

17

distribution. In other words, when the Ninth

18

Circuit appeal is ultimately decided, your

19

Honor, would be the answer to that.

20

As to the contract claim --

21

THE COURT: I take it they wouldn't be

22

distributed until this claim was then resolved?

23
24

MR. O'SHEA: Well, that's correct,
your Honor. But in terms of whether there are

24
1

I would submit that that is just not what we're

2

dealing with here. Those cases are

3

inapplicable. I'm not going to list them all.

4

The Lawson v Affirmative Equities case deals

5

with anticipatory breach. They rely on that

6

case. This is not anticipatory breach. The

7

Winklevosses sold ConnectU, in which Mr. Chang

8

had a stake. They transferred a hundred

9

percent of the stock; they took the proceeds.

10

The fact that their lawyers are

11

holding the proceeds as a result of the

12

Winklevosses' decision does not mean that Mr.

13

Chang's claims aren't ripe. I'm very glad to

14

hear Mr. O'Shea say today that they will not do

15

anything with those assets until this case is

16

resolved. But, nevertheless, the claims in

17

this case need to go forward. They're ripe for

18

adjudication now.

19

The stay, I'd submit, is just an

20

attempt to try to block Mr. Chang from

21

ultimately recovering. There is no basis to

22

stay the claims. These issues should go

23

forward now. So that deals with the argument

24

that Mr. Chang's claims are too early, then