Ceglia v. Zuckerberg et al

Filing 430

MEMORANDUM in Opposition re 429 MOTION for Extension of Time to File Response/Reply as to 427 Memorandum in Support, 426 MOTION to Vacate 348 Order on Motion to Stay, Scheduling Conference, Oral Argument,,,,,,,,,,,, NOTICE OF MOTION, 428 Text Order, Set Dea MOTION for Extension of Time to File Response/Reply as to 427 Memorandum in Support, 426 MOTION to Vacate 348 Order on Motion to Stay, Scheduling Conference, Oral Argument,,,,,,,,,,,, NOTICE OF MOTION, 428 Text Order, Set Dea filed by Paul D. Ceglia. (Attachments: # 1 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

Plaintiff,
v.

RESPONSE TO DEFENDANTS’
MOTION FOR EXTENSION OF
TIME

MARK ELLIOT ZUCKERBERG, Individually, and
FACEBOOK, INC.
Defendants.

MEMORANDUM
Defendants’ motion for a one week adjournment, Doc. No. 429, is without
merit. Plaintiff notes that the Defendants’ instinct toward urging the court to treat
Plaintiff differently than Defendant appears in their first paragraph.
Their proposed reset of the due date of their response extends their time to
respond by seven days.

Doc. No. 429 at 1.

However, their proposed time for

Plaintiff to reply to their response, as they suggest, remains the same as in the
court’s order of June 8th - two days.
The bulk of their motion is a re-hashing of virtually verbatim filler that has
welcomed many of their recent motions and responses onto the docket. The court
will note that as to all the motions and responses they list, those were all submitted
to this court before June 8, 2012. Therefore, as of June 8, 2012, Defendants had no
responses pending to the court.

In short, the law firm of Gibson, Dunn and

1

Terrence Flynn and The Orrick Law Firm whom are focused on this matter were all
without tasks on their to-do list regarding this court’s docket.
Defendant’s mis-characterize Plaintiff’s motion, Doc. No. 427, as a request to
“conduct wide-ranging fact discovery.” Id. at 2. The motion sought vacation of this
court’s order, Doc. No. 348, and the scheduling of a 16(b) conference.

This court

remains in control of how wide or narrow the “range of discovery” ultimately is.
Defendants’ fearfulness of “wide ranging discovery” is something that should arouse
the court’s interest. This is especially the case in light of Defendants’ key witness
violating court rules (i.e. LaPorte and FRCP 26(a)), Doc. No. 425 at 1-12, the
deletion of relevant emails by their client Zuckerberg, Id. at 12-14, their computer
experts’ (Stroz Friedberg) failure (or inability) to provide all emails contemplated by
this court’s orders and their acknowledgement that their document and ink experts
were provided scans, images and photographs from Plaintiff’s experts for which
they feel no equity in reciprocity, Id. at 14-16.
By the lower portion of page 2 of their 2 page motion, Defendants finally get
to the meat, or more precisely the gristle, of their argument:
In his latest motion, Ceglia seeks, yet again, to make an end-run
around this Court’s scheduling order by raising, for the first time,
entirely new legal arguments based on New York State law related to
challenging judgments and the propriety of seeking relief on the
basis of fraud. Doc. No. 429 at 2.
It is Defendants who have the audacity to not even hint at an apology for the
more than nine months of expedited one-sided discovery based upon a legal
argument that is obviously, indisputably without legal foundation.
2

They have

succeeded, to this point, in making an end-run around the entire discovery
process of ordered litigation to which parties across the country must adhere.
Hundreds of thousands of dollars expended, hundreds if not more in people hours by
the court, court staff and Plaintiff’s counsel and experts all reliant on what is now
clearly an argument that is not warranted by existing law.
No declaration was provided by Defendants of what effort was made on
Friday, June 8, 2012, Saturday, Jun 9, 2012, Sunday, June 10, 2012 nor what effort
could be made on Monday, June 11, 2012 and all of Tuesday, June 12, 2012 up to
midnight Tuesday evening. No declaration was provided by Defendants regarding
the unavailability of lawyers. Therefore, all of Gibson, Dunn’s lawyers are and have
been available to research all facets of this issue since Friday at 11:30 am.
Likewise, Terry Flynn and his firm have also been available to perform that
research. The Orrick Law Firm, still active counsel in this case, were not argued to
be unavailable to assist with legal research on this matter either. Defendants make
no representation regarding how much legal research has been done thus far
highlighting their diligence to adhere to the court’s generous allotment of time given
the paucity of legal issues in Plaintiff’s motion that could even be weakly argued by
Defendants. See argument below.
The court read Plaintiff’s memorandum, Doc. No. 427 on Friday, June 8, 2012
and set a schedule for Defendants’ response based upon its review of the
memorandum.

Defendants make no argument that the court misconstrued the

memorandum or motion it supported, was somehow unaware of the anticipated
3

research (or lack of research necessary, see argument below) that a response would
require.

Nothing has changed about the legal arguments in the memorandum

which triggered the court’s schedule in its order of June 8, 2012 to Sunday, June 10,
2012 and the Defendants’ request for an extension within which to respond.
No declaration was provided arguing that the legal issues in the
memorandum, that the court reviewed, involve a complexity that their team of
lawyers is unable to manage within the time allotted by the court.
Plaintiff’s due date for their recently filed expert reports expansively and
decisively rebutting all of Defendants’ intrinsic fraud claims was June 3, 2012, a
Sunday.

By rule, Plaintiff was entitled to file those reports on the following

Monday. There is no basis for Defendants’ to doubt that Plaintiff was working, and
working long hours, as was Plaintiff’s counsel and Plaintiff’s experts on the Friday,
June 1, 2012, Saturday, June 2, 2012 and Sunday, June 3, 2012.

Plaintiff was

finally able to complete the work necessary to file those reports at approximately
10:00pm on Monday, June 4, 2012. It is not unreasonable for this court to expect
Defendants to engage in the same level of effort over a weekend, recognizing that
nothing like that effort is needed to respond to the black letter law underlying
Plaintiff’s motion.
The law presented in Plaintiff’s memorandum to his motion to vacate, Doc.
No. 427, is not complicated nor in dispute. Below is a list of the legal issues that
Defendants do not have to research as they are firmly established legal concepts
throughout the federal circuits.
4

The Defendants’ have no good faith basis to argue against the following
contained in Plaintiff’s motion to vacate Doc. No. 348 and, therefore, need no time to
perform legal research in any of these areas. Doc. No. 427:
1. This court is sitting in diversity; and
2. This court is required to apply substantive New York state law; and
3. Substantive New York state law recognizes a distinction between allegations of
intrinsic and extrinsic fraud; and
4. Substantive New York state law prohibits a remedy relating to a motion to
dismiss for intrinsic fraud at any point in litigation; and
5. Defendants’ persistent and repetitive allegations meet the definition of intrinsic
fraud claims and do not meet any definition of extrinsic fraud claims; and
6. 2nd Circuit authority is in accord with Plaintiff’s argument on all points above.
(see, e.g. Alleghany Corp. v. Kirby, 218 F. Supp. 164, 183-84 (S.D.N.Y. 1963)
aff'd, 333 F.2d 327 (2d Cir. 1964) on reh'g, 340 F.2d 311 (2d Cir. 1965)). Rowe v.
Wal-Mart Stores, Inc., 11 F. Supp. 2d 265, 266 (W.D.N.Y. 1998).

(“It is, of

course, incumbent upon Federal District Court sitting on a diversity action to
apply substantive State law.”); and
7. No federal case has held that when a litigant argues fraud on the court reliant
on intrinsic fraud, to a federal court sitting in diversity, that court can ignore
substantive state law; and
Defendants undoubtedly completed legal research on the issues in Plaintiff’s
memorandum over the weekend. They did not find such a case. There is a reason
5

for that. Such a case does not exist because that is not the law of the 2nd Circuit,
nor any other Federal Circuit. And no existing case can be transformed into one
that contains that holding. As the Supreme Court has held, court decisions are not
reliable authority for something a party claims is implicit in their holding.
“Questions which merely lurk in the record, neither brought to the attention of the
court nor ruled upon, are not to be considered as having so decided as to constitute
precedents.”

Webster v. Fall, 266 U.S. 507, 511, 45 S.Ct. 148, 149, 69 L.Ed. 411

(1925); see also United States v. L.A. Tucker Truck Lines, Inc., 344 U.S. 33, 37-38,
73 S.Ct. 67, 69, 97 L.Ed. 54 (1952). They must have done that research as they
cannot roll the dice that this court will somehow regard the motion differently on
June 11, 2012 than it did on June 8, 2012.

Therefore, Defendants’ need for

additional time is merely a delay perhaps for other issues they are confronting
related to the exposure of their lead expert witness as hawking a pseudo-scientific
test in this case as reliable knowing that it is not, the deletion of emails and the
inexorable slide toward providing equivalent discovery to Plaintiff.
The Defendants have had more than nine months to compose their motion to
dismiss for fraud on the court.

They have advertised this motion and its basis,

fraud on the court reliant on intrinsic fraud, throughout that time. This court has
indicated some question about the viability of the remedy they have been seeking at
several points in the past:
In response to Defendants’ assertion that other cases supported the remedy
they sought, the court had the following colloquy with Mr. Snyder:
6

“THE COURT: No. What I'm asking is either in that case or Judge
Larimer's case were there dueling experts?
MR. SNYDER: I don't believe so, but I don't regard there to be
dueling experts in this case -THE COURT: Yet.” Hearing Transcript, June 30, 2011 at 38.
In another exchange, the court directly addresses whether inherent power
can be used to wade in between dueling experts and declare one expert the more
reliable:
“[COURT] So what I'm getting at is, if it turns out that the plaintiff's
experts, after concomitant testing, using the same protocols, come to a
completely different conclusion, even under inherent power, which is the
first time I've heard that that's your strategy here procedurally, how does
the case terminate? The case seems to me to go forward to jury trial.” Id. at
31.
In the above exchange, the court was clearly struggling with the notion that
something other than a jury trial is the appropriate remedy to Defendants’ claims
claims of Plaintiff’s fabricated evidence and fraud. This instinct turns out to be the
law of New York state as pointed out in Plaintiff’s motion to strike Doc. No. 348.
Later in that same hearing, the court continued probing the issue of how
Defendants’ argument for dismissal based upon intrinsic fraud would proceed.
“THE COURT: How does the court do that then? If there are
conflicting expert opinions, does the court conduct a bench trial, or
is it a jury trial, an advisory jury trial? I've never heard of such a
thing. This is a totally new concept. Inherent power I understand.
But in this context, your papers don't elaborate, and that's why I'm
asking these questions.” Id. at 35. Emphasis added.
Plaintiff’s motion to vacate, now, does elaborate.

That elaboration is

comprised of black letter law from start to finish. Unfortunately for the court, court
staff and the parties, we have all now spent significant time and financial resources,
7

the “proverbial marching up the mountain only to have to march down again....” Id.
The court posed its concern to Defendants’ counsel directly:
“THE COURT: Let's put it this way. I want to make sure that once we
launch this in the way that you're requesting, that we know exactly
where we're going procedurally.” Id. Emphasis added.
In response, Defense Counsel Snyder cited to the Campos case authored by
Judge Larimer.

“Plaintiff, Vladimir Campos, appearing pro se, commenced this

action under 42 U.S.C. § 1983.” Campos v. Correction Officer Smith, 418 F. Supp.
2d 277, 277 (W.D.N.Y. 2006). Obviously, this case is a federal question and not a
diversity case making it irrelevant to the framework involved in Defendants’ motion
to dismiss for intrinsic fraud in this diversity case.
The court then appeared persuaded by this reference.
“THE COURT: Thank you. That's enough. So there's authority for the
court on its own motion or on motion of the opposing party to make
a factual finding of fraud, dismiss the complaint, and if you don't like
it, take an appeal.
MR. SNYDER: Correct.” Id. at 37.
Plaintiff’s motion to vacate makes plain that Mr. Snyder’s representation was
false, perhaps not knowingly false, but false nonetheless.

Defendants’ motion to

dismiss for fraud is reliant upon an allegation of intrinsic fraud.
Further, recently, Plaintiff filed a motion for an extension of time, Doc. No.
392, which Defendants successfully opposed.

Doc. No. 407.

Additionally, in

granting former Plaintiff’s counsel’s motion to withdraw as counsel, the court
advised Plaintiff that any request for delay related to the departure of that counsel
would be viewed with “disfavor” based upon Defendants’ authority in their motion
8

opposing that withdrawal.

The court clearly advanced its position that needless

requests for delay would not be tolerated. Defendants zeal to move things along
quickly has now abruptly reversed course when confronted with a motion that
requires the case be scheduled for regular discovery.
The court can take judicial notice of the fact that Plaintiff has strenuously
disagreed with the claims of intrinsic fraud throughout this matter.

Plaintiff’s

rebuttal to Defendants’ claims have now included confirmation of the authenticity of
the Facebook Contract by nationally recognized forensic experts in all fields in
which Defendants have raised defenses, and then some.

Defendants, now more

than week after the filing of those reports, have failed to rebut one of the key claims
of just one of those experts: That is, that Mr. Zuckerberg wrote his own initials on
page one of the Facebook Contract and that he himself signed his name to page two
of the Facebook Contract. Doc. No. 415 at 45-50.
One has to assume Defendants’ counsel performed some legal research
starting on Friday, June 8, 2012 given the Tuesday, June 12, 2012 deadline set by
the court. There is no justification for them being unable to complete the minimal
research appropriate to respond to Plaintiff’s motion although that research will
result in no authority in support of the remedy they seek in their motion to dismiss
for intrinsic fraud.

Most importantly, Defendants offer no declaration or other

argument that the amount of legal research required by the motion demands
additional time. They simply claim that the arguments within the motion are new
to them.

However, “new” is not the standard for additional time.
9

Defendants

should have performed this research before urging the court to base nine months of
decisions on a motion to dismiss for intrinsic fraud that is unsupported in the law.
The amount of work actually involved in responding to Plaintiff’s arguments
in his memorandum is minimal given that the case law and principles embodied in
the legal arguments within Plaintiff’s motion are not new, novel or in dispute.
Further, the central legal principle within Plaintiff’s motion to vacate Doc. No. 348
is something that Defendants should have confronted more than a year ago before
they filed papers setting in motion the one-sided expedited discovery that has
brought all of us to this point.
Defendants have until Tuesday, June 12, 2012 to respond to, at most, one
legal issue in Plaintiff’s motion that they may be able to muster an easily
dispatched argument against. The motion to vacate Doc. No. 348 was filed more
than nine months after Defendants’ began rambling on about preparing and filing a
motion to dismiss for fraud on the court. Their response is limited to a narrow issue
as noted above. These arguments have been known to the Defendants, or should
have been known to them, for nearly a year. They have already examined the cases,
as they put them in their motion to dismiss proper.
gamesmanship.

This is pure eleventh-hour

They have no response and a week will not generate anything

additional. Plaintiff’s right to mutual discovery has been withheld for nearly a year
now by the court solely because of Defendants insistence that the law permits an
abridgement of Plaintiff’s rights. As the court knows, unnecessary delays are not
only unfair, they are unwarranted now in light of Defendants withered support for
10

the odyssey of one-sided discovery that has, at this point, resulted in prejudice to
Plaintiff in at least one critical area of evidence.
In a response to the misunderstanding that the court was asking about the
integrity of the Defendants’ Harvard emails, Snyder told the court nearly one year
ago, the following:
THE COURT: Is there any possibility of spoliation as to these emails?
MR. SNYDER: None.
THE COURT: They've already been stored, haven't they?
MR. SNYDER: Belt and suspenders. Harvard University is -- Hearing
Transcript of June 30, 2011 at 113.
A year long delay in mutual discovery is a significant prejudice. It has now
resulted in the deletion of emails by Defendant Zuckerberg or his cohorts.
Defendants have had continuous access to online legal libraries and platoons
of lawyers able to parse every word of every motion, research every case, etc. They
are not caught flat footed with this motion, they are just caught.

There is a

difference.
BLACK LETTER LAW
FOR WHICH LITTLE OR NO RESEARCH TIME IS NEEDED
In Erie Railroad Co. v. Tompkins, 304 U.S. 64, 78 (1938), the Court held that
the Constitution required federal district courts, when sitting in diversity, to apply
substantive state law unless the matter concerned a federal question. Id. (“Except
in matters governed by the Federal Constitution or by acts of Congress, the law to
be applied in any case is the law of the state. And whether the law of the state shall
be declared by its Legislature in a statute or by its highest court in a decision is not

11

a matter of federal concern. There is no federal general common law. Congress has
no power to declare substantive rules of common law applicable in a state whether
they be local in their nature or ‘general,’ be they commercial law or a part of the law
of torts.”). 39 Pepp. L. Rev. 645, 700.
The rationale behind Erie-Tompkins case is well trod ground.

The Erie

doctrine serves two distinct purposes. It discourages forum-shopping by litigants by
requiring federal courts ruling on state law claims to apply the same statutes and
case law as would a state court. This ensures that “the outcome of the litigation in
the federal court should be substantially the same, so far as legal rules determine
the outcome of a litigation, as it would be if tried in a State court.” Guaranty Trust
Co. of New York v. York, supra, 326 US at 109, 65 S.Ct. at 1470.
rationale is that it avoids unfairness.

The second

Litigants able to select a federal forum

(nonresidents of the forum state) obtain no advantage over litigants unable to do so
(forum residents), thus avoiding inequitable administration of the laws. “The Erie
rule is rooted in part in a realization that it would be unfair for the character or
result of a litigation materially to differ because the suit had been brought in a
federal court.” Hanna v. Plumer (1965) 380 US 460, 467, 85 S.Ct. 1136, 1141. Cal.
Prac. Guide Fed. Civ. Pro. Before Trial Ch. 1-B.
“A federal court adjudicating a state-created right solely because of the
diversity of citizenship of the parties is for that purpose, in effect, only another court
of the State.” Guaranty Trust Co. of New York v. York (1945) 326 US 99, 108, 65
S.Ct. 1464, 1469; Shady Grove Orthopedic Assocs., P.A. v. Allstate Ins. Co. (2010)
12

559 US, 130 S.Ct. 1431, 1442. Cal. Prac. Guide Fed. Civ. Pro. Before Trial Ch. 1-B.
Thus, “[a]s opposed to a fraud against an adverse party, a fraud upon the
court will only be found where the misconduct at issue ‘seriously affects the
integrity of the normal process of adjudication.’”

Sanchez v. Litzenberger, No. 09

Civ. 7207(THK), 2011 U.S. Dist. LEXIS 18528, at *9 (S.D.N.Y. Feb. 24, 2011)
(quoting Gleason v. Jandrucko, 860 F.2d 556, 559 (2d Cir.1988)). “Perjury alone
does not constitute fraud upon the court.” Id.
Plaintiff has researched all of Defendants cases supporting their motion to
dismiss for fraud on the court. None of them provide precedent for the remedy they
are seeking from the court, i.e. a dismissal for fraud on the court citing intrinsic
fraud in a diversity case.
CONCLUSION
Plaintiff respectfully requests this court deny Defendants’ request for more
time to research a legal issue that is minimal, at best, given the black letter law
supporting Plaintiff’s motion to strike Doc. No. 348.

Defendants have delayed

Plaintiff an entire year now, cost him hundreds of thousands of dollars in expert
fees, and other legal expenses, much to his prejudice as noted above. Defendants’
year long odyssey has also cost the court considerable resources.

Therefore, any

further delay is unwarranted. The team of lawyers arrayed on behalf of Defendants
provided no declaration that they would be unable to divide up whatever legal
research they think they need to do and complete it in the time this court allotted.

13

Respectfully submitted,
/s/Dean Boland
Paul A. Argentieri
188 Main Street
Hornell, NY 14843
607-324-3232 phone
607-324-6188
[e-mail]

Dean Boland
1475 Warren Road
Unit 770724
Lakewood, Ohio 44107
216-236-8080 phone
866-455-1267 fax
[e-mail]

14