Ceglia v. Zuckerberg et al

Filing 45

MEMORANDUM in Support re 44 MOTION to Expedite - Notice of Motion for Expedited Discovery filed by Facebook, Inc., Mark Elliot Zuckerberg. (Snyder, Orin)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK
-----------------------------------PAUL D. CEGLIA,
Plaintiff,
v.
MARK ELLIOT ZUCKERBERG and
FACEBOOK, INC.,
Defendants.
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Civil Action No. 1:10-cv-00569RJA

DEFENDANTS’ MEMORANDUM OF LAW
IN SUPPORT OF THEIR MOTION FOR EXPEDITED DISCOVERY

Thomas H. Dupree, Jr.
GIBSON, DUNN & CRUTCHER LLP
1050 Connecticut Avenue, NW
Washington, DC 20036
[phone]
Terrance P. Flynn
HARRIS BEACH PLLC
726 Exchange Street
Suite 1000
Buffalo, NY 14210
[phone]
June 2, 2011

Orin Snyder
Alexander H. Southwell
GIBSON, DUNN & CRUTCHER LLP
200 Park Avenue, 47th Floor
New York, NY 10166-0193
[phone]

TABLE OF CONTENTS
Page
INTRODUCTION .......................................................................................................................... 1
FACTUAL AND PROCEDURAL BACKGROUND.................................................................... 4
1.

Zuckerberg’s Work For StreetFax In 2003............................................................. 4

2.

In 2010, Ceglia Reappears And Claims To Own 84 Percent
Of Facebook, Inc..................................................................................................... 5

3.

Ceglia Abandons His Original Claims And Changes His Story............................. 6

CEGLIA’S DOCUMENTS ARE FORGERIES............................................................................. 7
1.

The Purported Contract Is A Forgery. .................................................................... 7

2.

The Purported Emails Are Forgeries. ................................................................... 10

3.

Ceglia’s Long History Of Scams And Criminal Misconduct. .............................. 13

ARGUMENT................................................................................................................................ 15
I.

Federal Courts Have Broad Discretion To Order Expedited, Staged
Discovery. ............................................................................................................. 16

II.

Defendants Have Demonstrated Good Cause....................................................... 19
A.

Expedited Discovery Is Warranted To Prevent Fraud On The Court
And Further Tampering With Electronic Records.................................... 19

B.

Expedited Discovery Will Not Prejudice Ceglia. ..................................... 21

C.

Defendants Seek Narrowly Tailored Relief.............................................. 22

CONCLUSION............................................................................................................................. 23

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TABLE OF AUTHORITIES
Page(s)
Cases 
Affymetrix, Inc. v. PE Corp.,
219 F. Supp. 2d 390 (S.D.N.Y. 2002)..................................................................................... 19
Amari v. Spillan,
2008 WL 5378339 (S.D. Ohio Dec. 19, 2008) ....................................................................... 17
Ayyash v. Bank al-Madina,
233 F.R.D. 325 (S.D.N.Y. 2005) ................................................................................ 16, 17, 20
Ceglia v. Zuckerberg,
2011 WL 1108607 (W.D.N.Y. Mar. 28, 2011)......................................................................... 6
Crawford-el v. Britton,
523 U.S. 574 (1998)................................................................................................................ 18
Damiano v. Sony Music Entertainment, Inc.,
168 F.R.D. 485 (D.N.J. 1996)................................................................................................. 19
Mann v. Levy,
776 F. Supp. 808 (S.D.N.Y. 1991).......................................................................................... 19
Occidental Chem. Corp. v. OHM Remediation Servs.,
168 F.R.D. 13 (W.D.N.Y. 1996)............................................................................................. 18
OMG Fidelity, Inc. v. Sirius Technologies, Inc.,
239 F.R.D. 300 (N.D.N.Y. 2006)...................................................................................... 16, 21
Physicians Interactive v. Lathian Systems Inc.,
2003 WL 23018270 (E.D. Va. Dec. 5, 2003) ............................................................... 4, 17, 20
Semitool, Inc. v. Tokyo Electron Am., Inc.,
208 F.R.D. 273 (N.D. Cal. 2002)...................................................................................... 18, 21
Stern v. Cosby,
246 F.R.D. 453 (S.D.N.Y. 2007) .................................................................................. 4, 16, 19
U.S. Commodity Futures Trading Commission v. Atwood & James, Ltd.,
2009 WL 666970 (W.D.N.Y. Jan. 23, 2009).......................................................................... 17
UnitedHealthCare Services v. Miller,
No. 1:09-cv-00276-RJA-LGF (W.D.N.Y. Apr. 20, 2009) ..................................................... 17

ii

TABLE OF AUTHORITIES
(Continued)
Page(s)
Statutes & Rules 
Fed. R. Civ. P. 26................................................................................................................ 3, 16, 18

Other Authorities 
John Anderson, Ceglia saved e-mails to Facebook CEO Zuckerberg from Fassett House,
WELLSVILLE DAILY, Apr. 13, 2011......................................................................................... 20
John Cassidy, Me Media: How Hanging out on the Internet became big business, THE
NEW YORKER, May 15, 2006 .................................................................................................... 7
Geoffrey A. Fowler and Scott Morrison, Fight over Facebook Origins Escalates, WALL
ST. J. B1 (Apr. 13, 2011) .......................................................................................................... 3
Kashmir Hill, Facebook Calls Paul Ceglia A “Scam Artist” In The Other Facebook
Ownership Lawsuit, www.forbes.com (May 26, 2011).......................................................... 21
Claire Hoffman, The Battle For Facebook, ROLLING STONE, Jun. 26, 2008.................................. 7
David Kirkpatrick, THE FACEBOOK EFFECT (2010) ........................................................................ 7
Lesley Stahl, The Face Behind Facebook, 60 MINUTES – CBS NEWS, Jan. 13, 2008,
www.cbsnews.com/stories/2008/01/10/60-minutes/main3697442.shtml ................................ 7
Alan J. Tabak, Hundreds Register for New Facebook Web site – Facemash creator seeks
new reputation with latest online project, THE HARVARD CRIMSON, Feb. 9, 2004 .................. 8
Bob Van Voris, Facebook Would-Be Owner Says He Owes His Claim to Arrest,
Bloomberg, Aug. 2, 2010.......................................................................................................... 5
Jose Antonio Vargas, The Face of Facebook, THE NEW YORKER, Sept. 20, 2010......................... 7

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DEFENDANTS’ MEMORANDUM OF LAW
IN SUPPORT OF THEIR MOTION FOR EXPEDITED DISCOVERY
Defendants Mark Zuckerberg and Facebook, Inc. respectfully move this Court to grant
expedited, phased discovery and to issue an order: (a) compelling immediate production of the
original signed version of the purported contract attached to the Amended Complaint, the native
electronic version of that document, and all copies of the purported contract in electronic or hardcopy form; (b) compelling immediate production of the purported emails described in the
Amended Complaint in their original, native electronic form, as well as all copies of the
purported emails in electronic or hard-copy form; and (c) immediately seizing, and permitting
Defendants to inspect, every computer in Plaintiff Paul Ceglia’s possession, custody, or control,
including the computers at his parents’ house. Because this discovery will bring this case to an
immediate end by establishing that the purported contract and emails are forgeries, this Court
should order that all other discovery be stayed until Defendants’ requested discovery is
completed.
INTRODUCTION
Paul Ceglia alleges that he owns a substantial share of Facebook, Inc., and bases his
claims on what he says is a contract signed by Mark Zuckerberg and emails memorializing their
purported partnership. The contract is a cut-and-paste job, the emails are complete fabrications,
and this entire lawsuit is a fraud.
Zuckerberg has now declared under oath that he did not sign the contract attached to
Ceglia’s complaint, and that he did not write or receive any of the purported emails quoted in the
Amended Complaint. See Zuckerberg Decl., ¶¶ 5, 14. Moreover, Defendants retained digital
forensic examiners to review Zuckerberg’s Harvard email account and found none of the
purported emails in it. See Rose Decl., ¶ 7. What they did find were the genuine emails between

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Ceglia and Zuckerberg from the same time period — and those emails directly contradict
Ceglia’s made-up story. Id., ¶ 8. Ceglia and Zuckerberg did exchange emails, and did sign an
agreement, but their discussions and agreement concerned only some coding work that
Zuckerberg performed for StreetFax.com — a web site that posted photographs of traffic
intersections for use by insurance adjustors. Zuckerberg and Ceglia never discussed Facebook
and they never signed a contract concerning Facebook — a fact that is not surprising given that
Zuckerberg did not even conceive of Facebook until long after the purported contract was signed
in April 2003. Zuckerberg Decl., ¶ 11. Ceglia appears to have doctored the genuine contract —
which concerns StreetFax and StreetFax alone — and then fabricated emails to make it appear
that he and Zuckerberg were actually discussing and reaching agreements about Facebook.
One of the nation’s top experts in document authentication has examined the purported
contract and concluded that it is an “amateurish forgery.” Romano Decl., ¶ 16. The document is
riddled with numerous tell-tale signs of fraud, such as the fact that page 1 (which purports to
convey an interest in “The Face Book”) has different margins and formatting from page 2 (which
contains the signatures, yet does not mention “The Face Book”). Moreover, although the
purported contract is dated April 2003, page 1 refers to “StreetFax LLC” — an entity that was
not created until August 2003.
Ceglia’s claim that he signed a contract with Zuckerberg entitling him to a significant
ownership share of Facebook, Inc. — and then forgot about it for seven years — is incredible on
its face, and the many indicators of fraud that permeate this case would call into serious question
the allegations of any plaintiff. But Paul Ceglia is not just any plaintiff. He is a convicted felon
and well-known scam artist who has spent the last decade of his life ripping people off. Any
possible doubt that this lawsuit is a fraud evaporates when one considers Ceglia’s long criminal

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history, which includes a first-degree felony conviction in Texas in 1997; an arrest, followed by
a no-contest plea, in Florida in 2005; a land scam that Ceglia orchestrated in the mid-2000s that
included fraudulent sales of property in New York and Florida facilitated by falsified
government documents; and criminal and civil charges in 2009 brought by the Allegany County
District Attorney’s Office and the New York Attorney General’s Office for defrauding citizens
in upstate New York through a scam involving the sale of wood pellets used to heat homes. See
Henne Decl. ¶¶ 5-24. As then-Attorney General Andrew Cuomo publicly stated: Paul Ceglia
has “repeatedly lied” in his efforts to cheat and defraud. Id., Ex. B.
The fact that Ceglia has spent the past seven years as a hustler engaged in various land
swindles and wood-pellet scams further highlights the fraudulent nature of his claims in this
case. If Ceglia were in fact the owner of a substantial stake in Facebook, why would he have
resorted to a life of crime?
Ceglia has refused to produce the original version of the purported contract; he has failed
even to produce copies of the alleged emails; and his own lawyer admitted to the Wall Street
Journal that he was initially “skeptical of Mr. Ceglia’s claims.” Geoffrey A. Fowler and Scott
Morrison, Fight over Facebook Origins Escalates, WALL ST. J. B1 (Apr. 13, 2011). Ceglia’s
lawyer nonetheless asserted that the contract was “authentic” because he “brought in an outside
expert to examine the computer file used to create the contract and to verify when it was first
created.” Id. Defendants are entitled to test that assertion before they are unfairly subjected to
months of full-blown discovery in a case that rests on what will quickly be shown to be forged
documents.
Federal Rule of Civil Procedure 26(d)(1) empowers this Court to order expedited
discovery based on a showing of reasonableness and good cause — a standard that courts have

3

deemed satisfied where there has been a showing of possible fraud on the court or a need to
preserve electronic evidence before it can be tampered with or destroyed. See, e.g., Stern v.
Cosby, 246 F.R.D. 453, 457 (S.D.N.Y. 2007) (granting expedited discovery to prevent possible
fraud on the court); Physicians Interactive v. Lathian Systems Inc., 2003 WL 23018270 (E.D.
Va. Dec. 5, 2003) (granting expedited discovery to preserve electronic evidence).
The facts that Defendants have already gathered overwhelmingly establish that good
cause exists to permit Defendants to take expedited, surgically-targeted discovery that will
readily establish that the contract and emails are fabricated, and that this lawsuit is nothing more
than Paul Ceglia’s latest scam. The discovery will include forensic examination of Ceglia’s
computers, as well as the original version of the purported contract. When this testing confirms
that all of these documents are forgeries, this lawsuit will end immediately.
FACTUAL AND PROCEDURAL BACKGROUND
1.

Zuckerberg’s Work For StreetFax In 2003.

In early 2003, Mark Zuckerberg was a freshman at Harvard University. Zuckerberg
Decl., ¶ 6. He saw an online job listing regarding development of a web site. Id. He responded
to the listing and learned that the project was for a company called StreetFax, which used the
web site StreetFax.com. Id. StreetFax.com was a web site that provided a database of
photographs of traffic intersections for use by insurance adjustors.
In or about April 2003, Zuckerberg agreed to provide limited web site development
services for StreetFax and signed a contract memorializing this agreement. Zuckerberg Decl.,
¶ 7. The contract was provided to Zuckerberg by Paul Ceglia. Id.
The document attached as Exhibit A to the Amended Complaint is not the contract that
Zuckerberg signed. Zuckerberg Decl., ¶ 8. The contract that Zuckerberg signed only concerned

4

web site development for StreetFax. Id., ¶ 9. It did not mention or concern Thefacebook.com, or
any related social networking service or web site. Id. Zuckerberg did not enter into, and has
never entered into, any contract or agreement with Ceglia or StreetFax, concerning
Thefacebook.com, or any related social networking web site. Id., ¶ 10.
Zuckerberg performed his web development work for StreetFax and it is undisputed that
Ceglia had no contact or communications with Zuckerberg during the years that followed.
2.

In 2010, Ceglia Reappears And Claims To Own 84 Percent Of Facebook, Inc.

Zuckerberg launched Thefacebook.com on February 4, 2004, more than nine months
after he purportedly signed the contract attached to Ceglia’s complaint. In the years that
followed, Facebook underwent astronomical growth and is now widely celebrated as one of the
great recent success stories in American business. What started as a small company managed by
Zuckerberg and a handful of friends from a room in a summer sublet has now transformed into a
business with thousands of employees and more than 500 million users worldwide. It is a
company that spans the globe and has revolutionized the ways in which people connect and share
with one another.
In 2010 — more than six years after Zuckerberg’s dealings with StreetFax — Ceglia
emerged from out of the blue with a lawsuit. Ceglia attached to his complaint a document
purporting to be a contract he signed with Zuckerberg in April 2003. That document addresses
not just the StreetFax project but makes references to a project described variously as “The Face
Book” and “The Page Book.” Ceglia claimed that the purported contract entitled him to 84
percent of Facebook, Inc. As to why he had remained silent for the past seven years, Ceglia
explained that he had recently discovered the purported contract when he was looking through
his papers in the wake of one of his recent arrests. See Bob Van Voris, Facebook Would-Be

5

Owner Says He Owes His Claim to Arrest, Bloomberg, Aug. 2, 2010. Ceglia stated that his
lawsuit against Zuckerberg “wouldn’t have been possible if state troopers hadn’t come to his
house in October to arrest him for fraud.” Id.
Ceglia filed his lawsuit in state court, alleging a breach of contract claim. Defendants
removed the case to this Court on diversity grounds. Ceglia sought remand on the theory that
Zuckerberg — who has lived and worked year-round in California for years, as would be
expected of the CEO of a major California-based company — is actually a domiciliary of New
York. This Court rejected Ceglia’s argument and denied remand. Ceglia v. Zuckerberg, 2011
WL 1108607 (W.D.N.Y. Mar. 28, 2011).
3.

Ceglia Abandons His Original Claims And Changes His Story.

During the remand proceedings, Defendants pointed out the incredible nature of Ceglia’s
claims and declared that his lawsuit was a fraud based on a fabricated contract. In response,
Ceglia did an about-face. He pulled back his original complaint, retained new lawyers, and filed
a new complaint filled with new facts and new legal theories. The Amended Complaint is
fundamentally inconsistent with the original complaint. Among other things, Ceglia dropped his
claim that he owns 84 percent of Facebook, Inc., replacing it with a demand for 50 percent of
Zuckerberg’s stake. Ceglia also alleged, for the first time, that he formed a general partnership
with Zuckerberg. Whereas Ceglia had originally claimed that he signed the contract in 2003 and
apparently forgot about it until 2010 when he discovered it amidst his papers, he now claimed
that after signing the contract he and Zuckerberg engaged in an intense period of creative
collaboration during which Ceglia contributed sweat equity, along with many innovative
business and marketing ideas. See Amended Compl., ¶¶ 31-52. These new allegations are based

6

on what Ceglia alleges are emails to and from Zuckerberg — emails that are not mentioned in
the original complaint and are not attached to the Amended Complaint.
CEGLIA’S DOCUMENTS ARE FORGERIES
Mark Zuckerberg has sworn under oath that he did not sign the contract attached to
Ceglia’s Amended Complaint, that he did not write the emails Ceglia attributes to him, and that
he did not receive any of the emails Ceglia claims to have sent him. Zuckerberg Decl. ¶¶ 5, 14.
As set forth below, the evidence Defendants have gathered to date corroborates Zuckerberg’s
sworn statements and confirms that Ceglia’s documents are forgeries.
1.

The Purported Contract Is A Forgery.

Ceglia’s claim that Zuckerberg entered into a contract concerning Thefacebook.com in
April 2003 is impossible as a matter of historical fact. Zuckerberg did not conceive of the idea
for Facebook until in or about December 2003. See Zuckerberg Decl., ¶ 11.
This timing is confirmed by numerous public sources. The creation of Facebook has
been widely documented and there is no evidence that Zuckerberg had even thought of
Thefacebook.com in April 2003, let alone that his thinking was sufficiently advanced that he
would enter into contracts to secure capital and grant ownership rights in the business. 1

1

See, e.g., David Kirkpatrick, THE FACEBOOK EFFECT 19-30 (2010) (“At the [fall
2003] semester’s end everyone in [Zuckerberg’s mathematics course] went out to dinner
and ended up talking about the need for a ‘universal facebook.’ So Zuckerberg went
home and built one. . . . Zuckerberg later said that it was the Crimson’s editorials
[published towards the end of the 2003 fall semester] about Facemash that gave him the
initial idea for how to build Thefacebook.”); Jose Antonio Vargas, The Face of
Facebook, THE NEW YORKER, Sept. 20, 2010 (discussing winter of early 2004,
Zuckerberg is quoted as describing how he and his friends “would hang out and go
together to Pinocchio’s, the local pizza place, and talk about trends in technology. We’d
say, ‘Isn’t it obvious that everyone was going to be on the Internet? Isn’t it, like,
inevitable that there would be a huge social network of people?’”); Claire Hoffman, The
[Footnote continued on next page]
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In addition to being impossible as a matter of historical fact, the purported contract is an
obvious cut-and-paste job. This is apparent from the face of the document. Among other things,
the column widths and margins are inconsistent, which indicates that the document has been
altered and reproduced. Many words and sentences simply make no sense, and the document is
riddled with internal inconsistencies and contradictions strongly indicative of fraud. Tellingly,
there are many discrepancies between page 1 (which purports to convey an interest in “The Face
Book”) and page 2 (the page with Ceglia’s and Zuckerberg’s signatures, and which makes no
mention of “The Face Book” or anything similar). Ceglia appears to have taken page 2 of the
signed StreetFax contract and appended it to a doctored version of page 1, which Ceglia has
edited by adding references to “The Face Book.”
One notable difference is that page 1 and page 2 refer to StreetFax by different names:
page 1 refers to “StreetFax LLC,” whereas page 2 refers to “StreetFax Inc.” This is a critical
distinction. StreetFax LLC did not exist in April 2003 when the contract was purportedly signed
[Footnote continued from previous page]
Battle For Facebook, ROLLING STONE, Jun. 26, 2008 (“Zuckerberg has said under oath
that he began writing the code for TheFacebook.com, his site’s first incarnation, in
January . . . . It took him maybe a week or two, he claims, in between homework and
finals. He was inspired, he said, by an editorial in The Harvard Crimson about his
Facemash debacle [in November 2003].”); Lesley Stahl, The Face Behind Facebook, 60
MINUTES – CBS NEWS, Jan. 13, 2008, www.cbsnews.com/stories/2008/01/10/60minutes/main3697442.shtml (describing the creation of thefacebook.com as occurring
after the fall 2003 release of Facemash.com); John Cassidy, Me Media: How Hanging out
on the Internet became big business, THE NEW YORKER, May 15, 2006 (describing the
initial conception of Thefacebook.com as occurring in November/December 2003 and its
launch in February 2004); Alan J. Tabak, Hundreds Register for New Facebook Web site
– Facemash creator seeks new reputation with latest online project, THE HARVARD
CRIMSON, Feb. 9, 2004 (“When Mark E. Zuckerberg ’06 grew impatient with the creation
of an official universal Harvard facebook, he decided to take matters into his own hands.
After about a week of coding, Zuckerberg launched thefacebook.com last Wednesday
afternoon.”).

8

— it was formed in August 2003. See Henne Decl., Ex. I (StreetFax LLC Articles of
Organization). This is strong evidence that page 1 is a recent forgery: Ceglia apparently forgot
that the LLC did not exist in April 2003 when he set to work doctoring the purported contract.
Frank Romano is Professor Emeritus at the Rochester Institute of Technology and one of
the leading experts in the field of document authentication; his career in the printing industry has
spanned more than 50 years. Professor Romano examined the copy of the purported contract
attached to the Amended Complaint and identified many “significant inconsistencies” between
page 1 and page 2. These include:


All references to the “The Face Book” and “The Page Book” appear only on page 1.
Romano Decl., ¶ 16.



There are significant differences between the widths of the columns, margins, and
“gutter” (the space between the columns) on pages 1 and 2. Specifically, the column
widths are wider on page 1 than page 2, while the widths of the margins and “gutter”
are narrower on page 1 than page 2. Id., ¶ 14(d).



The type size on page 1 is larger than the type size on page 2. Similarly, the type
density on page 1 is darker than the type density on page 2. Id., ¶ 14(c).



On page 1, the spacing between the paragraphs varies between single, double, and
triple spacing. On page 2, the spacing between paragraphs is uniformly single. Id.,
¶ 14(b).



The indents on page 1 are wider than the indents on page 2. It is highly unusual for
such inconsistencies to appear within a document because formatting is usually set up
in advance and consistent throughout the document. Id., ¶ 14(a).

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Professor Romano concluded:
Based on my professional experience and judgment, my opinion is
that Page 1 and Page 2 of [the document] were printed at different
times on different printers. This strongly indicates that, at least in
part, [the document] is forged. Furthermore, all the references to
“The Face Book” or “The Page Book” appear on Page 1. Thus, it
is my conclusion that Page 1 of [the document] is an amateurish
forgery.
Romano Decl., ¶ 16 (emphasis added).
2.

The Purported Emails Are Forgeries.

Defendants engaged digital forensic examiners to review all of Zuckerberg’s emails
contained in the email account he used while a student at Harvard. That account contains emails
from the 2003-2004 time period. The emails Ceglia quotes in his Amended Complaint do not
exist in the account. They are complete fabrications.
The process through which Zuckerberg’s Harvard emails were obtained and reviewed is
set forth in the attached declaration of Bryan Rose, a former Assistant United States Attorney.
As Mr. Rose explains, the highly-regarded digital forensics firm Stroz Friedberg obtained a
complete and accurate copy of the entire contents of Zuckerberg’s Harvard University email
account, including both sent and received mail, as the account existed in October 2010. Rose
Decl., ¶ 5. It also obtained a copy of Zuckerberg’s account as it existed in April 2011. Id., ¶ 4.
Stroz Friedberg ran searches on all emails in the account using search terms containing the words
and phrases taken from the purported emails excerpted in Ceglia’s Amended Complaint. Id., ¶ 7.
Based on these searches, Mr. Rose determined that the purported emails were not in
Zuckerberg’s email account. Id.
However, the account did contain more than 175 emails between Zuckerberg and Ceglia
(or other persons affiliated with StreetFax) from 2003 and 2004. These verifiably genuine

10

emails establish that Ceglia’s entire case is fiction and the story he tells in his Amended
Complaint is a lie.
The real facts, as reflected in the emails captured from Zuckerberg’s account, are as
follows:


Zuckerberg exchanged more than 175 emails with Ceglia or other persons
affiliated with StreetFax. None of these emails — not a single one — mentions
“The Face Book,” “The Page Book,” Thefacebook.com, or any web site created
by Zuckerberg. Rose Decl., ¶ 8.



The only topic of discussion between Zuckerberg and Ceglia (or his associates)
was the StreetFax project. Id.



The emails show Ceglia profusely apologizing to Zuckerberg for failing to pay
Zuckerberg for his work on the StreetFax web site and asking for more time to
scrape the money together. For example, in a February 16, 2004 email to
Zuckerberg, Ceglia wrote: “I can fully understand your frustration and hope that
you have felt and feel from me sincere regret for such huge delays. . . . If there is
any way I can assure you that I have absolutely every intention of paying you
what is owed plus some when we finally catch up to our sales goals it would be
appreciated to a level I cant express in words. After all this time please allow us a
little more time to make things right with you. . . . I will nervously await your
reply and hope you can grant us more time.” Rose Decl., Ex. D.



The emails show an increasingly desperate Ceglia offering excuse after excuse for
his delay in paying, and claiming that he was seeking to sell his property to raise
the money he owed Zuckerberg. For example, in a March 20, 2004 email to

11

Zuckerberg, Ceglia wrote: “I unfortunately dont have any cash to give you right
now” but “I have even listed my only rental property for sale in the hopes of
clearing up my past debts.” Rose Decl., Ex. E.


The emails also show Ceglia attempting to persuade Zuckerberg to accept
StreetFax equity (which was worthless) in lieu of payment. For example, in a
March 31, 2004 email to Zuckerberg, Ceglia wrote: “As I try to come up with
solutions one that I havent before thought of comes to mind. Stock. . . . . [I]
realize that with our inability to pay you so far that this might not sound like an
attractive offer . . . . It would be a tremendous load of my mind to reach an
agreement with you Mark on this, I really hope you find this agreeable.” Rose
Decl., Ex. F.

These indisputably genuine emails — as they appear on the account maintained by
Harvard University — directly contradict the invented narrative set forth in Ceglia’s Amended
Complaint and establish beyond any possible doubt that the purported emails Ceglia discusses in
his Amended Complaint are fabrications. Out of the more than 175 emails, there is not a single
one in which Zuckerberg and Ceglia discuss Facebook or any social networking web site.
It is utterly implausible that Ceglia would have been begging a Harvard sophomore for
extra time to raise money to pay a small debt, “nervously await[ing] [his] reply” (Rose Decl., Ex.
D), without once mentioning Ceglia’s purported 50 percent stake in the Facebook business. Nor
do the authentic emails contain any evidence — as his Amended Complaint alleges, see ¶¶ 45-46
— that, just a few weeks before, he had relinquished an additional 34 percent stake (the
purported late penalty) voluntarily and without compensation. The authentic Ceglia emails —
which show Ceglia apologizing, begging Zuckerberg’s forgiveness, offering excuse after excuse,

12

asking for more time, even promising to sell his property to raise the money he owed Zuckerberg
— demonstrate that the narrative in Ceglia’s complaint is utter fiction.
That conclusion is further confirmed by linguistic analysis of the alleged emails Ceglia
purports to quote in the Amended Complaint. Gerald McMenamin is Professor Emeritus of
Linguistics at California State University in Fresno and a forensic linguist who has rendered
expert opinions in more than 600 cases. Professor McMenamin studied the text of the purported
Zuckerberg emails that appear in Ceglia’s Amended Complaint and determined that it is
probable that Zuckerberg was not the author. See McMenamin Decl. ¶ 4. Professor
McMenamin performed a stylistic analysis — examining the language and tone used in a sample
of emails genuinely authored by Zuckerberg to Ceglia and other persons affiliated with StreetFax
during the relevant time period — and compared them to the language and tone of the purported
emails. Id., ¶¶ 8-10. He determined, among other things, that the Amended Complaint purports
to quote Zuckerberg spelling certain words differently than Zuckerberg repeatedly spells them in
authentic Zuckerberg emails. Id., ¶ 11. Likewise, the sentence structure of the purported emails
differs from the sentence structure in authentic Zuckerberg emails. Id. Based on these and many
other discrepancies, Professor McMenamin concluded that “it is probable that Mr. Zuckerberg is
not the author” of the purported emails in the Amended Complaint. Id., ¶ 4 (emphasis added).
3.

Ceglia’s Long History Of Scams And Criminal Misconduct.

Ceglia is a professional con artist. A comprehensive background investigation conducted
by the nationally renowned investigative firm Kroll Associates, Inc. established that Ceglia is a
career criminal who has engaged in fraud, subterfuge and falsification of documents. From his
1997 felony conviction through his 2009 arrest for scamming New Yorkers, Ceglia has a long
record of criminal and fraudulent behavior that spans decades. The following is a summary of

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Ceglia’s known criminal history, as investigated and attested to by Don Henne, a former
Lieutenant Commander and officer in the New York City Police Department with 20 years of
law enforcement experience.


In March 1997, Ceglia was convicted in Texas of aggravated possession of a
controlled substance, a first-degree felony. Court filings indicate he was in
possession of more than 400 grams of psilocybin, including diluents. Psilocybin is a
hallucinogenic compound found in certain mushrooms. Ceglia was sentenced to 10
years of probation and paid $15,000 of a $25,000 fine; the remaining $10,000 was
suspended. Henne Decl., ¶ 10.



In May 2005, Ceglia was arrested in Florida for trespass while trying to sell property
in a private orange grove to an elderly couple. Ceglia falsely told the arresting officer
that he had an easement along the grove. The rightful property owner confirmed that
no such easement existed and insisted on pressing charges. In October 2005, Ceglia
pleaded no contest to first-degree misdemeanor trespass, and was ordered to pay a
fine. Id., ¶ 12.



That trespass incident appears to be part of a wide-ranging criminal land scam
involving the fraudulent sale of land in New York and Florida. Working from his
base in Wellsville, Ceglia defrauded numerous victims by, among other things,
(1) fraudulently misrepresenting tracts of land as buildable or useable as residential
tracts when, in fact, they were not; (2) engaging in “shill bidding” on eBay, thus
artificially inflating the price of the land being auctioned; and (3) in some cases,
simply accepting down payments and financing payments for land that he did not
own and was in no position to sell. Id., ¶¶ 16-24.

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

Ceglia’s falsification of documents did not begin with this case. Ceglia furthered his
land scam by forging official government documents. Kroll investigators shared with
Florida authorities the purported government document that Ceglia had provided to at
least two of his victims to facilitate his sales of non-buildable land. After examining
the document, the Director of the Polk County (Florida) Land Development Division
stated that it had likely been doctored by removing the conditions necessary for a
building permit to be obtained and having “whited out” the identifying parcel
number. Id., ¶¶ 20-22.



In 2009, Ceglia was arrested and charged with consumer fraud by the Allegany
County District Attorney’s Office and sued by then-Attorney General Andrew
Cuomo. Ceglia was charged with running a scam in which local residents bought
wood pellets for heating purposes that he never actually delivered. Id., ¶¶ 5-8.
Resolution of the civil case was contingent on Ceglia paying $25,000 in penalties,
and more than $100,000 in restitution to the dozens of customers that he victimized.
Id., ¶ 6.
ARGUMENT

District courts within the Second Circuit have broad discretion to expedite and sequence
discovery. As shown below, Defendants have established good cause warranting expedited
discovery into the authenticity (or lack thereof) of the purported contract and emails on which
Ceglia bases his claims. All other discovery should be stayed until this initial inquiry is
complete.

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I.

Federal Courts Have Broad Discretion To Order Expedited, Staged Discovery.
District courts may grant expedited discovery under Federal Rule of Civil Procedure

26(d)(1) based on “the flexible standard of reasonableness and good cause.” Ayyash v. Bank alMadina, 233 F.R.D. 325, 327 (S.D.N.Y. 2005). Determining whether good cause exists typically
requires weighing the prejudice the moving party will suffer from delay against the prejudice, if
any, that the responding party will suffer from expedited discovery. See OMG Fidelity, Inc. v.
Sirius Technologies, Inc., 239 F.R.D. 300, 305 (N.D.N.Y. 2006) (granting expedited discovery
based on “a comparison of the potential prejudice which will be suffered by the defendant if
discovery is permitted, and that which will be experienced by the plaintiff if denied the
opportunity for discovery at this stage”).
Courts have found the “good cause” standard satisfied in cases where there are
indications that an ongoing fraud is threatening the integrity of the judicial process. For
example, in Stern v. Cosby, 246 F.R.D. 453, 457-58 (S.D.N.Y. 2007) (Chin, J.), the court granted
expedited discovery into whether the defendant was “attempting to obstruct justice by offering to
pay money” to witnesses for their testimony, because if the defendant “was actually attempting
to obstruct justice, her efforts could very well have endangered the integrity of the judicial
process.” The court explained that the victimized party’s “desire to explore this question
expeditiously — before full and normal discovery — is reasonable and understandable.” Id.
The court granted expedited discovery based on the plaintiff’s prima facie evidentiary showing
that a fraud on the court was occurring. See id. (explaining that the defendant’s lawyer “may
have to do things in a different sequence from what she would otherwise have preferred, but I am
sufficiently concerned about what I have heard . . . that I believe these matters should be
explored expeditiously”).

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Indeed, this Court has granted expedited discovery based on the movant’s argument that
immediate and targeted discovery was necessary to determine whether the opposing party was
perpetrating a fraud. See UnitedHealthCare Services v. Miller, No. 1:09-cv-00276-RJA-LGF
(W.D.N.Y. Apr. 20, 2009). In that case, the plaintiff UnitedHealthCare Services suspected that
the defendant had engaged in a fraudulent scheme by fabricating insured employee accounts and
seeking reimbursement for fictional insurance claims. This Court determined that the company
had demonstrated good cause and ordered expedited discovery to obtain documents and
depositions concerning the potential fraud. Id. (ECF #7). Similarly, the Court granted expedited
discovery in U.S. Commodity Futures Trading Commission v. Atwood & James, Ltd., 2009 WL
666970, at *5 (W.D.N.Y. Jan. 23, 2009), explaining that good cause existed to permit expedited
discovery “for the purpose of discovering the nature, location, status and extent of [the opposing
party’s] alleged wrongdoing (including but not limited to the possible involvement of others)
. . . .” Other courts have reached similar conclusions. See, e.g., Ayyash, 233 F.R.D. at 326-27
(Lynch, J.) (granting expedited discovery into the location of defendants’ assets based on
plaintiff’s “strong evidentiary showing” that defendants had engaged in fraud); Amari v. Spillan,
2008 WL 5378339, at *1, 3 (S.D. Ohio Dec. 19, 2008) (plaintiff’s “need for” expedited
discovery “outweigh[ed] the prejudice to Defendants” where a three-year “scam” involving
fraudulent financial transactions had deprived plaintiff of stock).
The “good cause” standard is also satisfied when delaying discovery could result in the
alteration or destruction of evidence. In Physicians Interactive v. Lathian Systems Inc., 2003 WL
23018270 (E.D. Va. Dec. 5, 2003), which involved claims of computer-server hacking and theft
of software code, the court found “unusual circumstances or conditions that would likely
prejudice” the plaintiff absent expedited discovery — “electronic evidence [was] at issue,” and

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“[e]lectronic evidence can easily be erased and manipulated.” Id. at *10. The court allowed the
plaintiff “to enter the sites where the computers used in the alleged attacks [were] located and to
obtain a ‘mirror image’ of the computer equipment containing electronic data relating to
Defendants’ alleged attacks on” the plaintiff’s server. Id.
Finally, the “good cause” standard is satisfied where “expedited discovery would
ultimately conserve party and court resources and expedite the litigation.” Semitool, Inc. v.
Tokyo Electron Am., Inc., 208 F.R.D. 273, 276 (N.D. Cal. 2002). In Semitool, the court granted
“narrowly tailored” expedited discovery, emphasizing that the plaintiff sought nothing more than
“existing documents and a physical inspection.” Id. at 277. The court reasoned that “this is a
case where the parties are both represented by sophisticated counsel and have engaged in prelitigation discussion for over a year.” Id. For those reasons, “the Court is unable to discern any
real prejudice to Defendants in advancing discovery by a modest amount of time.” Id.
District courts also enjoy broad authority to sequence discovery. This power is expressly
conferred by Federal Rule of Civil Procedure 26(d), which provides that a district court may
order that discovery proceed in stages based on the convenience of parties or witnesses, or when
“the interests of justice” so warrant. The Supreme Court has explained that this Rule “vests the
trial judge with broad discretion . . . to dictate the sequence of discovery.” Crawford-el v.
Britton, 523 U.S. 574, 598 (1998) (emphasis added). The broad discretion conferred by the
Federal Rules “create[s] many options for the district judge,” who may, for example, permit
“only a focused deposition . . . before allowing any additional discovery” or who “may postpone
all inquiry regarding [a party’s] subjective motive until discovery has been had on objective
factual questions.” Id. at 599. See also Occidental Chem. Corp. v. OHM Remediation Servs.,
168 F.R.D. 13, 14 (W.D.N.Y. 1996) (Foschio, J.) (“Rule 26(d) authorizes the court to order the

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sequence of discovery upon motion” and “[a]n order regarding the sequence of discovery is at
the discretion of the trial judge”); Affymetrix, Inc. v. PE Corp., 219 F. Supp. 2d 390, 398-99
(S.D.N.Y. 2002) (sequencing discovery); Damiano v. Sony Music Entertainment, Inc., 168
F.R.D. 485, 493 (D.N.J. 1996) (same); Mann v. Levy, 776 F. Supp. 808, 813 (S.D.N.Y. 1991)
(same).
II.

Defendants Have Demonstrated Good Cause.
This Court should grant Defendants targeted, expedited discovery into the authenticity —

or lack thereof — of the documents on which Ceglia has based his lawsuit.
A.

Expedited Discovery Is Warranted To Prevent Fraud On The Court And
Further Tampering With Electronic Records.

There is considerable evidence that Ceglia is perpetrating a fraud on the Court. As
demonstrated above, Defendants have already gathered substantial proof that Ceglia fabricated
the emails quoted in his Amended Complaint, just as he doctored the contract on which he bases
this entire lawsuit. Here, as in Stern, 246 F.R.D. at 457, expedited discovery is warranted to halt
an ongoing scheme to frustrate the administration of justice. Forcing Defendants to endure
months of burdensome discovery based on Ceglia’s fraudulent claims would be a manifest
injustice. There is absolutely no reason to subject Defendants to depositions, written discovery
and document production when this entire lawsuit will be terminated once Ceglia produces for
inspection his computers and the originals of the documents on which he bases his claims. Nor
should the Court be forced to devote judicial resources to supervising a concocted lawsuit that
rests on a lie. The integrity of the judicial process is best served by terminating a fraudulent
lawsuit at its inception rather than by permitting the fraud to move forward and draining more
resources from the innocent parties and the Court.

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Expedited discovery is also warranted to prevent further tampering with emails and other
electronic records that “can easily be erased and manipulated.” Physicians Interactive, 2003 WL
23018270, at *10 (authorizing expedited imaging of computer equipment). An order seizing
Ceglia’s computers and permitting Defendants to examine them will ensure that electronic
evidence — at least as it currently exists — will be preserved and not subject to further
tampering. The order should encompass the computers at Ceglia’s parents’ house, which Ceglia
has publicly stated contain the purported emails with Zuckerberg. See John Anderson, Ceglia
saved e-mails to Facebook CEO Zuckerberg from Fassett House, WELLSVILLE DAILY, Apr. 13,
2011. Because Ceglia has ample “incentive . . . to hide” or delete evidence of his criminal acts,
Ayyash, 233 F.R.D. at 327, time is of the essence.
The examination of Ceglia’s computers will be performed using fast and widely-accepted
forensic testing procedures. Michael McGowan has extensive experience in e-forgery
investigations and has testified many times as a digital forensics expert, including on behalf of
the United States Department of Justice in connection with an Enron task force prosecution. As
he explains in the attached declaration, it is critical that Ceglia’s computers — and the native
electronic versions of the purported contract and emails — be examined. See McGowan Decl.,
¶¶ 9-16. Under Mr. McGowan’s direction, the Stroz Friedberg firm will examine the metadata
and other electronically stored information on Ceglia’s computers to assess the authenticity of
the purported contract and emails.
Immediate production of the original ink-written version of the purported contract is
equally necessary, for the reasons set forth in the attached declarations of Gus Lesnevich, a
former forensic document examiner for the United States Secret Service, Lesnevich Decl. ¶¶ 1518, and Albert Lyter, an expert in ink analysis who has served as an instructor at the FBI

20

Academy and has testified in numerous high-profile cases, Lyter Decl., ¶¶ 6-7. As Mr.
Lesnevich explains, “the poor reproduction quality and distortion” of the scanned copy make it
“unsuitable” for analyzing the signatures and handwriting on the document. Lesnevich Decl.,
¶ 15. And as Dr. Lyter makes clear, because the changes associated with aging to writing ink,
printing ink and toner typically occur for only approximately two years, “delay in the
examination of the document may limit the ability to precisely determine the age of its
materials.” Lyter Decl., ¶ 6(a).
B.

Expedited Discovery Will Not Prejudice Ceglia.

In contrast to the substantial harm to Defendants and the judicial system if this lawsuit is
permitted to proceed to full discovery, Ceglia will suffer no prejudice from being required to
produce the documents and emails on which he bases his lawsuit. These are “core documents
central to [his] underlying case” that he would have to produce “in the normal course of
discovery” in any event. Semitool, 208 F.R.D. at 276. Indeed, Ceglia’s lawyer has publicly
stated that he is already “prepared to move the case forward into discovery.” See Kashmir Hill,
Facebook Calls Paul Ceglia A “Scam Artist” In The Other Facebook Ownership Lawsuit,
www.forbes.com (May 26, 2011). In OMG Fidelity, the court explained that because “the
discovery now sought will take place at some juncture,” and because postponing discovery
would frustrate the defendant’s hope of bringing a prompt motion for relief, there was “no reason
to delay.” 239 F.R.D. 300, 305.
So too here. Particularly in light of the public assertions by Ceglia’s lawyer that he
possesses forensic proof that these documents are genuine, this Court should order that his claim
be promptly verified through well-recognized testing procedures. Defendants anticipate that they
will be able to complete a forensic examination of the purported contract and emails promptly.

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Having waited seven years to bring this lawsuit, Ceglia cannot complain that he will be
prejudiced by a short delay.
C.

Defendants Seek Narrowly Tailored Relief.

The expedited, phased relief that Defendants seek is narrowly tailored and supported by
good cause. Defendants respectfully request an order:
Compelling immediate production of the original signed version of the purported

1.

contract attached to the Amended Complaint, the native electronic version of that
document, and all copies of the purported contract in electronic or hard-copy form;
2.

Compelling immediate production of the purported emails described in the Amended
Complaint in their original, native electronic form, as well as all copies of the
purported emails in electronic or hard-copy form; and

3.

Immediately seizing, and permitting Defendants to inspect and image, every
computer in Ceglia’s possession, custody, or control, including the computers at his
parents’ house, which Ceglia has publicly identified as containing the purported
emails.
The Court should stay all other discovery until this initial phase of discovery has been

completed.

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CONCLUSION
For the foregoing reasons, this Court should grant Defendants’ Motion for Expedited
Discovery.
Dated:

New York, New York
June 2, 2011
Respectfully submitted,
/s/ Orin Snyder
Orin Snyder
Alexander H. Southwell
GIBSON, DUNN & CRUTCHER LLP
200 Park Avenue, 47th Floor
New York, NY 10166-0193
[phone]

Thomas H. Dupree, Jr.
GIBSON, DUNN & CRUTCHER LLP
1050 Connecticut Avenue, NW
Washington, DC 20036
[phone]
Terrance P. Flynn
HARRIS BEACH PLLC
726 Exchange Street
Suite 1000
Buffalo, NY 14210
[phone]

Attorneys for Defendants Mark Zuckerberg and Facebook, Inc.

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