Ceglia v. Zuckerberg et al
REPLY to Response to Motion re 231 MOTION for Temporary Restraining Order Notice of Motion MOTION for Sanctions Notice of Motion filed by Paul D. Ceglia. (Attachments: # 1 Exhibit A, # 2 Exhibit B, # 3 Exhibit C, # 4 Certificate of Service)(Boland, Dean)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK
PAUL D. CEGLIA,
Civil Action No. : 1:10-cv-00569-RJA
REPLY TO DEFENDANTS’
RESPONSE IN OPPOSITION TO
PLAINTIFF’S MOTION FOR
SANCTIONS FOR FRAUD
MARK ELLIOT ZUCKERBERG, Individually, and
Plaintiff made a good faith offer to resolve this motion which Defendants
rejected. Details about that offer and rejection are below.
FRAUD ON THE COURT
This is a fraud on the court motion. Defendants obtained an order from the
court based upon their fraud.
Ceglia’s opposition and response to that order
significant expenditure of time and resources and affected his rights. Declaration of
Paul Argentieri at ¶12, ¶15 and ¶20.
FAILURE TO DISCLOSE
Once Defendants argued reliant on material discoverable on those
undisclosed Electronic Assets, their duty to disclose was triggered. That duty arose
each time their arguments related to their omission.
The fraud in this instance is the false comparison regarding the emails and
the continuing argument of “fake contract.” The email comparison was the CegliaZuckerberg email exchanges attached to the Amended Complaint with the Harvard
emails. Defendants and their counsel repeated this comparison as proof that the
Ceglia emails were frauds because of their absence in the Harvard email record.
This argument is nonsense if Defendants had mentioned to the court the existence
of the unexamined Electronic Assets.
By at least June 30, 2011, if not earlier, Defendants, Snyder, Southwell and
the Orrick Law Firm had a duty to disclose the existence of the Parmet Electronic
Assets and the “originals” of the Electronic Assets at issue.
That duty to speak
arose when Defendants made arguments like this one:
SNYDER: [T]he emails which we’ve told your Honor about which
exist today on the Harvard University server...relate only entirely
exclusively to StreetFax.
“THE COURT: And they in no way corroborate or are consistent
with those emails that are purportedly genuine emails between the
plaintiff and Mr. Zuckerberg that are attached to the complaint?
“SNYDER: Correct, your Honor.” Doc. No. 94 at 10-11.
This Court would not have granted mutual discovery reliant on the email
fraud argument or the fake contract argument knowing of the unexamined
Electronic Assets. At the very least, the court would have delayed its ruling until
Defendants conducted a search of those Electronic Assets and reported back on that
search. Plaintiff would have provided case law and argument related to that issue
as well. Defendants made these arguments aware that this court was concerned
about the security of the Harvard email evidence.
“THE COURT: Now on these emails with Mr. Zuckerberg’s access to them at
Harvard, how do we secure those going --” Doc. No. 94 at 105.
“MR. SNYDER: Those [Harvard emails] are safe and secure with belt and
First Harvard University has preserved and is preserving those;
second...Stroz Friedberg imaged...the contents of the Harvard server as it relates to
Mr. Zuckerberg….” Doc. No. 94 at 128. See also Id. at 107.
The defendants and their counsel employed experts to enhance the fraud.
Those experts provided declarations about their methods assuring the court of the
completeness of their examination of Zuckerberg’s Harvard email record.
deployment of experts in furtherance of their fraud magnifies its seriousness and
the damage done to the court process.
FALSE FAKE CONTRACT ARGUMENT
The Electronic Assets are relevant to Defendants fraudulent “fake contract”
An email, instant message, unpublished blog post or merely
contemporaneous notes of Defendant Zuckerberg or another person involved in the
early stages of Facebook could easily defeat the “fake contract” claim.
It now comes full circle. This court has repeatedly inquired of Defendants
about what harm could come from placing this case on a regular discovery track.
Defendants have responded that such a decision by the court would “reward”
Ceglia. Now, it seems obvious, that not immediately placing this case on a regular
discovery track provided Defendants time to seek destruction of discoverable
And leaving this case off the regular discovery track will reward
Defendants and their counsel for this fraud.
Both of Defendants’ key arguments (“fake contract” and “fake emails”) are
undercut by their failure to disclose the Electronic Assets.
They are further
questionable given that Defendants refuse to trust this court with a copy of those
Assets as a means to have this fraud motion withdrawn. Their bargain seems to be,
risk a fraud sanction, but do not allow anyone to see what is on the Electronic
There is a reason Defendants and their counsel are fighting so hard to
prevent an examination or allow protection of those Electronic Assets. Plaintiff and
this court do not know what that reason is and it can only be discovered once those
Assets are examined as well as the so-called “originals” Defendants argue they
JUST FOLLOWING ORDERS
Defendants falsely argue claim that their actions in furtherance of the
destruction of the Electronic Assets at issue was merely following the court’s order
in the ConnectU case. The Defendants and their counsel had the power all along to
prevent destruction of that evidence and an email or phone call was all that was
needed. Instead, they sought its destruction. Why?
The order at issue in the ConnectU case did not prohibit the Defendants from
moving the court to amend the order upon Ceglia’s filing of this case. The ConnectU
parties bypassed the order entirely, securing the Assets, without even filing a
motion or obtaining a modified order in that case. Exhibits A and B.
COPIES VERSUS “ORIGINALS”
Defendants claim the Parmet Electronic Assets are copies of “original”
computers which they possess.
supporting this claim.
Defendants’ failed to produce any declaration
Declaration of Dean Boland at ¶18.
conspicuously failed to sign a declaration supporting anything in Defendants’
response. That omission is something deserving of note by this court. Therefore,
there is no evidence before this court that the Electronic Assets are anything but
originals of evidence. Even if the Electronic Assets were copies, Defendants claims
of no foul here because they possess the originals are meritless.
expedited discovery, Defendants have pursued copies and “originals” of evidence
with equal vigor. They have made no distinction between the evidentiary value of
either. Their attempt to do so now is self-serving.
The undersigned participated in that phone conference along with this court
on November 23, 2011. Declaration of Dean Boland at ¶3. The undersigned has
contemporaneous notes that differ with Mr. Snyder’s argument which, as this court
may note, is unsupported by his declaration. Id. at ¶4.
Mr. Snyder was told during that phone conference precisely what Assets were
at issue. Id. at ¶5, ¶6. He repeated throughout the phone conference that he had
no idea what those were. Id. at ¶8. Then, magically, two days later and now, he
claims in argument that he was aware of those assets all along.
WASTED TIME, MONEY AND CEGLIA’S RIGHTS AFFECTED
This court held multiple hearings on issues involving expedited discovery.
Ceglia, his counsel and experts expended significant time, energy and financial
resources dealing with Defendants pursuit of an conducting of expedited discovery.
Declaration of Paul Argentieri at ¶12, ¶15 and ¶20.
Defendants’ and their counsels’ committed fraud each time they advanced
their arguments regarding “fake emails” and the “fake contract.” This represents
a history and pattern of discovery abuse, not merely one incident.
“Mr. SNYDER: “We’re willing to...provide plaintiff discovery into the critical
emails on the Harvard server….” Doc. No. 94 at 47. Emphasis added. Defendants
had a duty to speak at this moment that they were withholding the existence of
other electronic communications when describing the Harvard emails as the
“critical emails.” How about mentioning then that the Harvard emails were not the
only Electronic Assets with electronic communications?
This court was clearly led to believe that the “Harvard emails” as they were
described were all of Zuckerberg’s relevant electronic communications.
“THE COURT: [Y]ou think [Ceglia] can lay his hands on software that will
enable him to fabricate yet new emails...to...rebut, contradict, undermine the
MR SNYDER: Yes.” Id. at 47-48.
Is that the only reason to not grant mutual discovery,
expedited discovery, is the potential for him to engage in a further fraud to rebut
the Harvard emails?” Id. at 50.
They made incomplete representations to the court in support of the court
acting. They had a duty to inform the court when seeking the court’s authority to
make decisions affecting Ceglia’s claims. This court issued orders affecting Ceglia’s
rights based on Defendants’ fraudulent arguments omitting critical evidence.
A POTENTIAL RESOLUTION REJECTED
Defendants were contacted before the filing of this reply to resolve this
They have rejected the opportunity to resolve the
matter and refused to provide this court with a forensically sound copy of the
Electronic Assets held by Parmet. Id. There is no more obvious indication that
these Electronic Assets hold evidence valuable to Ceglia’s case. Defendants seem to
know this as they knew it when they failed to disclose their existence and sought
This refusal now makes Defendants’ assurance they will hold the so-called
“originals” of these Electronic Assets and the copies, securely, during this litigation
an empty promise. Plaintiff has no reason to rely on Defendants’ claim that they
possess the “originals” or that those “originals” have not already been altered in a
way that can be mirrored on the Parmet Electronic Assets once Defendants get their
computer hacker hands on them.
For the integrity of our justice system to work, the violation of the duties of
lawyers before this court must be punished. Without such sanctions, Defendants
will be emboldened to push further into this territory, now familiar to them, of
evidence suppression and destruction.
An evidentiary hearing is necessary.
counsel for the Defendants (i.e. Mr. Snyder, Southwell, Benjamin, Flynn, Ms.
Aycock, Ms. Simpson) and Monte Cooper from the Orrick Law Firm must be held to
account for what they knew of these Electronic Assets, when and whether they told
A jury verdict in this case will only have the public’s confidence if the best
measure of fairness can be seen applied to both parties.
That measure is that
billion dollar companies and billionaire defendants are not entitled to ignore the
rules of our federal court system nor direct their lawyers to do the same. Likewise,
parties and their counsel are not entitled to waste this court’s time with arguments
and assurances that are based on frauds and obtaining court orders, expedited
discovery in this case, reliant on incomplete disclosures.
AUTHORITY OF THE COURT TO SANCTION FOR FRAUD
Rule 37 authorizes a broad range of sanctions when a party fails to permit
discovery or to comply with the court's discovery orders. The sanctions range from
an order to reimburse the opposing party for expenses to orders striking out
portions of the pleadings, prohibiting the introduction of evidence, deeming
disputed issues determined adversely to the position of the disobedient party, or
rendering a default judgment against the disobedient party. Fed.R.Civ.P. 37; see
Cine Forty-Second St. Theatre v. Allied Artists, 602 F.2d 1062, 1066 (2d Cir.
When deciding on proper discovery sanction, a court considers:
(1) willfulness or bad faith on the part of the noncompliant party, (2) the
history, if any, of noncompliance, (3) the effectiveness of lesser sanctions, (4)
whether the noncompliant party has been warned about the possibility of sanctions
(5) the client's complicity, and (6) prejudice to the moving party. FRCP 37.
The court possesses broad inherent power to protect the administration of
justice by levying sanctions in response to abusive litigation practices.
Hockey League v. Metropolitan Hockey Club, Inc., 427 U.S. 639 (1976).
In National Hockey League at 642-43, the Court expressed itself clearly:
“[H]ere, as in other areas of the law, the most severe in the spectrum of
sanctions provided by statute or rule must be available to the district court in
appropriate cases, not merely to penalize those whose conduct may be deemed to
warrant such a sanction, but to deter those who might be tempted to such conduct
in the absence of such a deterrent.”
The 2nd Circuit has adhered to that view, holding in Cine Forty-Second St.
Theatre v. Allied Artists, 602 F.2d 1062 (2d Cir. 1979), that even grossly negligent
failure to obey a discovery order may justify severe disciplinary measures:
The principal objective of the general deterrent policy of National Hockey is
strict adherence to the “responsibilities counsel owe to the Court and to their
opponents,” National Hockey League at 640. See also Chira v. Lockheed Aircraft
Corp., 634 F.2d 664 (2d Cir. 1980).
“Severe sanctions are justified, however, when the failure to comply with a
court order is due to willfulness or bad faith, or is otherwise culpable.” Daval Steel
Prods. v. M/V Fakredine, 951 F.2d 1357 at 1367 (2d Cir. 1991).
As additional requested sanctions, Plaintiff seeks an order from this court
that Defendants cause to be deposited with this court’s technical assistant a
forensically sound copy of all Electronic Assets held by Parmet and Associates.
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