Ceglia v. Zuckerberg et al
Filing
512
MEMORANDUM in Support re 511 Eighth MOTION to Compel and For Other Relief 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’ REDACTED MEMORANDUM OF LAW IN SUPPORT OF THEIR
EIGHTH MOTION TO COMPEL AND FOR OTHER RELIEF
Thomas H. Dupree, Jr.
GIBSON, DUNN & CRUTCHER LLP
1050 Connecticut Avenue, NW
Washington, DC 20036
(202) 955-8500
Terrance P. Flynn
HARRIS BEACH PLLC
726 Exchange Street
Suite 1000
Buffalo, NY 14210
(716) 200-5120
September 5, 2012
Orin Snyder
Alexander H. Southwell
GIBSON, DUNN & CRUTCHER LLP
200 Park Avenue, 47th Floor
New York, NY 10166-0193
(212) 351-4000
PRELIMINARY STATEMENT
Defendants and the Court now know that the April 13 Kasowitz Letter—concealed by
Plaintiff Paul Ceglia for months—provides damning further confirmation of Ceglia’s fraud.
Indeed, that letter reveals that the Kasowitz firm
REDACTED
Defendants are unaware whether the Kasowitz firm or any other of Ceglia’s nine
former law firms ultimately
REDACTED
The April 13 Kasowitz Letter also shows that Ceglia continues to conceal critical
documents. Specifically, that Letter reveals the existence of at least three other communications,
all of which are “relevant to the genuineness of the dispute[d] contract,” responsive to the
Court’s expedited discovery orders, and should have been produced to Defendants months ago.
REDACTED
Doc. No. 478 at 4.
Ceglia has refused to produce all three communications, in violation of this
Court’s expedited discovery orders.
1
Furthermore, Ceglia continues to abuse the Protective Order entered by this Court. In an
attempt to ensure that the corroborative evidence of his fraud contained in the April 13 Kasowitz
Letter would not be publicly disclosed, Ceglia designated the letter “Confidential” pursuant to
the parties’ Joint Stipulated Protective Order. That designation is improper and Ceglia has made
no attempt to justify it.
Accordingly, Defendants respectfully request an order (1) compelling Ceglia to produce
REDACTED
to Defendants, along with all attachments and/or embedded images, and any
other related non-privileged materials that are also responsive to the Court’s orders, and (2)
overruling Ceglia’s improper designation of the April 13 Kasowitz Letter as confidential.
Alternatively, the Court should inspect in camera those communications and attachments and/or
embedded images over which Ceglia claims privilege, and require Ceglia to bear his burden of
justifying his privilege claims by competent evidence. Finally, this Court should award
Defendants their attorneys’ fees and costs, and all other relief to which they may be entitled.
STATEMENT OF FACTS
This is the eighth motion to compel necessitated by Ceglia’s refusal to comply with this
Court’s discovery orders. See Doc. Nos. 95, 129, 155, 245, 295, 382, 461. This Court granted
each of Defendants’ seven previous motions to compel. See Doc. Nos. 107, 117, 152, 208, 272,
317, 357, 457, 478.
Defendants uncovered the existence of the April 13 Kasowitz Letter—REDACTED
—only after this Court rejected Ceglia’s attempt to conceal it. Decision and
2
Order (“D&O”) (Doc. No. 478) at 2. First, the Court granted Defendants’ Fifth Motion to
Compel, ordering Ceglia to produce a lengthy compilation of emails referred to as Item 379 that
he had sought to withhold by asserting baseless privilege claims. See Doc. Nos. 294, 317. Item
379 contains an April 13, 2011 e-mail, which referred to and attached the April 13 Kasowitz
Letter. See Doc. Nos. 317, 357, 361, 383-1 at 14. When Ceglia ultimately produced Item 379, it
became clear to Defendants that he had failed to produce the April 13 Kasowitz Letter, which is
responsive to this Court’s expedited discovery orders and demonstrated Ceglia’s own attorneys’
awareness of his fraud.
Thus, Defendants were forced to file their Sixth Motion to Compel, seeking an order
directing Ceglia to produce the April 13 Kasowitz Letter specifically. See Doc. No. 382. The
Court granted that motion as well, ordering Ceglia to produce the non-privileged April 13
Kasowitz Letter by July 9, 2012. Doc. No. 457 at 43. Rather than comply with this Court’s clear
directives and produce the April 13 Kasowitz Letter, Ceglia continued to refuse to do so.
Instead, he simply produced—yet again—Item No. 379, without the April 13 Kasowitz Letter
attached. See Doc. No. 461 at 3. Thus, Defendants were forced—yet again—to move to compel
production of the April 13 Kasowitz Letter, even though this Court had already ordered it be
produced. See Doc. No. 461.
On August 15, 2012, the Court granted Defendants’ Seventh Motion to Compel, ordering
that Ceglia produce, within three days of the order, the April 13 Kasowitz Letter and its
attachments.1 Doc. No. 478 at 8. Having reviewed the contents of the April 13 Kasowitz
1
Ceglia has filed Rule 72 Objections to this Court’s Decision and Order granting Defendants’ Motion to Compel
(Doc. No. 478). See Doc. No. 506. In those Objections, Ceglia nowhere mentions his independent obligation to
produce documents in response to the Court’s August 18, 2011 Order (Doc. No. 117). Nor does he mention his
preparation of numerous privilege logs in connection with that production and others, none of which logs
contained the April 13 Kasowitz Letter. See Doc. No. 156-2. Rather, Ceglia chooses to focus his bizarre and
baseless attack on this Court’s purported “misunderstanding of the facts,” “the obvious confusion in the
3
Letter—as a result of Ceglia’s unsolicited submission of that document in camera, in explicit
contravention of the Court’s order, see Doc. No. 464—the Court concluded that “the Kasowitz
letter is relevant to the genuineness of the dispute[d] contract, the issue before the court on
Defendants’ pending motions to dismiss,” and therefore should have been produced to
Defendants or claimed as privileged. Id. at 4. Additionally, the Court granted Defendants’
request for sanctions, imposing a $1,000 civil contempt fine each on Ceglia and on Boland, and
awarding Defendants attorneys’ fees incurred in connection with compelling Ceglia’s
compliance.2 Doc. No. 478 at 8.
On August 17, 2012, Ceglia finally produced the April 13 Kasowitz Letter—more than
seven weeks after this Court specifically ordered him to do so, and more than one year after the
Court’s initial expedited discovery orders to which the April 13 Kasowitz Letter is responsive.
See Doc. Nos. 83, 117. Ceglia designated the letter “Confidential” pursuant to the parties’ Joint
Stipulated Protective Order—an improper designation that Defendants ask this Court to overrule.
REDACTED
language” of its orders, and Defendants’ purported “blatantly, intentionally false description of the Kasowitz
letter.” Doc. No. 506 at 3, 25, 27.
2
Defendants’ Fee Application is currently pending before the Court. See Doc. No. 503.
4
Upon reviewing the April 13 Kasowitz Letter, Defendants learned that Ceglia remained
non-compliant with the Court’s expedited discovery orders in at least two ways. First, Ceglia
had not produced any of the attachments to the April 13 Kasowitz Letter. Those attachments are
themselves responsive to the Court’s expedited discovery orders, see Doc. No. 117 ¶ 2, and were
explicitly sought by Defendants in their Sixth Motion to Compel, which this Court granted in its
entirety. See Doc. Nos. 382 at 11, 457 at 11. The Court had also ordered Ceglia to file, as an
exhibit to his opposition to Defendants’ Seventh Motion to Compel, “a copy of Privilege Log
Item 379 and all attachments . . . including [the Kasowitz letter] . . . and all attachment[s] to such
letter, i.e., the ‘certain documents that are referenced in the letter.’” But Ceglia had neither filed
the attachments nor produced them to Defendants.
On August 22, 2012, Defendants brought this violation of the Court’s orders to Ceglia’s
attention. See Southwell Decl., Ex. A. Ceglia belatedly produced the attachments to the April
13 Kasowitz Letter the next day. See Southwell Decl., Ex. B. Those attachments corroborate
the evidence of Ceglia’s fraud that Defendants presented to this Court in their Motion to Dismiss.
See Doc. No. 319.
The attachments to the April 13 Kasowitz Letter include the authentic StreetFax Contract
between Ceglia and Mr. Zuckerberg, which concerns only StreetFax and says absolutely nothing
about Facebook. As the Court is well aware, Ceglia sent the StreetFax Contract to his lawyer
Jim Kole at Sidley Austin, in two March 3, 2004 emails that Ceglia described to the Court as
attorney-client privileged communications. See Doc. No. 319 at 28-32, 34-35; Doc. No. 241, Ex.
B, at 1 (describing the emails as communications “from Paul Ceglia to his attorney Jim Kole,
Esq.”); see also Southwell Decl. (Doc. No. 241) ¶ 13.
5
The attachments to the April 13 Kasowitz Letter also include annotated printouts of the
authentic emails that Mr. Zuckerberg exchanged with Ceglia and other representatives of
StreetFax. As Defendants explained in their Motion to Dismiss for Fraud, see Doc. No. 319 at
36-38, those authentic emails further confirm that the StreetFax Contract is genuine and Ceglia’s
Work for Hire Document is a forgery. Indeed, as the Kasowitz attorneys realized before they
terminated their representation of Ceglia, the authentic emails between Zuckerberg and StreetFax
reflect an agreement to pay the amount specified by the StreetFax Contract ($18,000) and not the
Work for Hire Document ($2,000). See Southwell Decl., Ex. B (annotated emails attached to
April 13 Kasowitz Letter); Doc. No. 319 at 37 (quoting August 15, 2003 and August 16, 2003
emails between Ceglia and Zuckerberg). The handwritten notations on the printouts are asterisks
that highlight these specific emails.
Defendants’ review of the April 13 Kasowitz Letter exposed a second deficiency in
Ceglia’s production that remains unremediated. The April 13 Kasowitz Letter reveals the
existence of three non-privileged communications involving the Kasowitz firm that are
responsive to the Court’s expedited discovery orders and should have been produced months
ago:
REDACTED
6
Defendants brought this violation of the Court’s expedited discovery orders to Ceglia’s
attention in their same August 22nd email. See Southwell Decl., Ex. A. Ceglia has refused to
produce any of the three withheld communications. See Southwell Decl., Ex. B.
ARGUMENT
I.
This Court Should Order Ceglia To Produce The Three Withheld Communications.
A.
The Three Withheld Communications Are Responsive To This Court’s
Expedited Discovery Orders.
Like the April 13 Kasowitz Letter, which Ceglia concealed for months, all three withheld
communications are “relevant to the genuineness of the dispute[d] contract,” see Doc. No. 478 at
4, and responsive to the Court’s expedited discovery orders.
The Court’s August 18, 2011 Order directed Ceglia to identify and produce “all
electronic copies or images of the purported contract,” “all electronic versions or purported
versions of any contract,” and “all electronic versions of any emails or purported emails” among
the relevant parties. See Doc. No. 117 ¶¶ 2-3. It is evident from the context surrounding the
April 13 Kasowitz Letter, as well as the content of the Letter itself, that the three withheld
communications
REDACTED
and are otherwise “relevant to the genuineness of the dispute[d] contract.” Doc. No. 478 at 4.
As Defendants explained in their Sixth Motion to Compel, Item 379 contains numerous
emails that
REDACTED
On March 8, 2011,
REDACTED
Jason Holmberg, a third-party non-lawyer.
REDACTED
See Southwell Decl. Ex. A (Doc. No. 383-1) at 4-5.
See id. at 22.
7
REDACTED
REDACTED
on March 30, at 4:16 p.m., Marks received an email from Brian
REDACTED
Halpin of Capsicum Group with the subject
The body of
REDACTED
the email message says
Id. at 12-13. This is the REDACTED
, which Ceglia still has not produced in its native-form with all
attachments included.
REDACTED
Later that same day, March 30,
writing in an email to co-counsel Terrence Connors at Connors & Vilardo, LLP: REDACTED
Id. at 19-20 (emphasis
added).
REDACTED
On April 11, DLA Piper and Lippes Mathias replaced Terry Connors, noticed their
appearances in this case, and filed the First Amended Complaint.
REDACTED
REDACTED
on April 12,
8
REDACTED
REDACTED
The next day, on April 13,
REDACTED
—the April 13 Kasowitz Letter—
Furthermore, the emails in Item 379 establish
REDACTED
And of course, all of these
communications are, in the Court’s words, “relevant to the genuineness of the dispute[d]
contract,” and thus should have be produced to Defendants or logged on the grounds of privilege.
See Doc. No. 478 at 4.
Because all three withheld communications are “relevant to the genuineness of the
dispute[d] contract” and responsive to this Court’s orders, Defendants respectfully request that
the Court order Ceglia to produce them immediately, with all attachments and/or embedded
images.
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B.
The Three Withheld Communications Are Not Privileged.
In response to Defendants’ August 22nd email notifying Ceglia of his continuing
violation of the Court’s orders, his attorney Dean Boland asserted that all three communications
are privileged. See Southwell Decl., Ex. B. But this Court has already determined that Ceglia
waived the protection of the attorney-client privilege and work product doctrine over the subject
matter of Kasowitz’s withdrawal and the matters discussed in Item 379 in two ways: by failing to
include these attachments to emails contained in Item 379 in a proper privilege log and by
disclosing that information to Holmberg, a third-party non-lawyer. See Doc. No. 357 at 10-11;
Doc. No. 361 at 4-5.
Ceglia failed to include the April 13 Kasowitz Letter, or any of the discoverable
communications that it references, on any privilege log submitted in this case. As this Court
held, his failure to do so vitiates any privilege that may have attached to those communications.
See Doc. No. 457 at 10-11 (holding that “[h]ere, Plaintiff does not dispute that the Kasowitz
Letter contains relevant information or that, but for the asserted privilege, would be discoverable.
Nor does Plaintiff deny failing to list the Kasowitz Letter in his privilege log" in response to
Defendants’ discovery requests”). This is because a party is obligated to promptly provide the
adverse party with notice of a claimed privilege by providing a privilege log describing the
withheld information. See Fed. R. Civ. P. 26(b)(5)(A). Failure to do so results in a waiver of the
privilege in the withheld information. Robbins & Myers, Inc. v. J.M. Huber Corp., 2010 WL
2595332, at *5 (W.D.N.Y. June 24, 2010).
10
Even if Ceglia had properly included in his privilege log the communications to which he
is now, belatedly, claiming privilege, because he disclosed the information contained in Item 379
to Holmberg, a third-party, Ceglia has waived privilege over all information to which Holmberg
was “privy,” even when he was not a “direct []or indirect recipient of any specific email.” Doc.
No. 361 at 4; see also Robbins & Myers, Inc. v. J.M. Huber Corp., 274 F.R.D. 63, 95-96
(W.D.N.Y. 2011) (citing cases for proposition that subject-matter waiver occurs where holder of
the privilege discloses a significant part of the matter of the communication).
Ceglia challenged this finding of subject-matter waiver by filing Rule 72 Objections to
this Court’s April 19 Decision and Order granting Defendants’ Fifth Motion to Compel (Doc.
No. 357). See Doc. No. 367. District Judge Arcara affirmed this Court’s April 19 Decision and
Order “in its entirety.” Doc. No. 480 at 5.
Ceglia has now produced several emails on the topic of the Kasowitz firm’s withdrawal,
as well as the April 13 Kasowitz Letter itself. As this Court has repeatedly found, there has been
a general subject-matter waiver on the subject of the Kasowitz firm’s withdrawal. See Doc. Nos.
361 at 4-5, 480 at 4-5.
Thus, all three withheld communications are non-privileged and must be produced to
Defendants immediately.
II.
This Court Should Overrule Ceglia’s Improper Designation Of The April 13
Kasowitz Letter As Confidential.
This Court has on several occasions overruled Ceglia’s abusive confidentiality
designations. See, e.g., Doc. Nos. 107, 117, 208. Ceglia’s latest attempt to hide behind the
parties’ Protective Order is similarly inappropriate. This Court should overrule his improper
designation of the April 13 Kasowitz Letter as confidential.
11
Consistent with the procedures set forth in the Protective Order, see Doc. No. 86, ¶ 5,
Defendants objected to Ceglia’s confidentiality designation and asked that Ceglia withdraw it.
See Southwell Decl., Ex. A. Ceglia responded by asserting that that his designation is “proper.”
See Southwell Decl., Ex. B. He made absolutely no attempt to explain or justify the designation,
as is his obligation under federal law.
The Protective Order provides that “[t]he designating party may designate documents,
materials, or information as ‘CONFIDENTIAL — SUBJECT TO PROTECTIVE ORDER’ if the
party believes in good faith that the documents, materials, or information contain confidential
information that is not publicly available (such as proprietary or confidential business, technical,
sales, marketing, financial, commercial, private, or sensitive information, or information that is
otherwise reasonably designable as confidential).” Doc. No. 86, ¶ 3. The parties’ intent,
reflected in the plain text of the Protective Order, was to protect information as to which there is
a legitimate, good-faith basis for confidential treatment, such as sensitive financial information,
corporate trade secrets, or sensitive personal information like bank account records or social
security data. The Protective Order was obviously not intended to shield from disclosure
documentary evidence of Ceglia’s fraud, however devastating that evidence might be to him.
Indeed, the Protective Order was entered solely to guide the parties’ exchange of information
during the Court-authorized expedited discovery, which Defendants had sought on the explicit
basis that Ceglia was committing a massive fraud. See Doc. Nos. 45, 86.
Furthermore, Ceglia has made no attempt to justify his designation of the April 13
Kasowitz Letter as confidential. Ceglia, as the designating party, bears the burden of justifying
his designation. See Koch v. Greenberg, 2012 U.S. Dist. LEXIS 58608, at *5 (S.D.N.Y. Apr. 13,
2012) (citations omitted). As this Court explained in its August 12, 2011 Order overruling most
12
of Ceglia’s initial confidentiality designations: “Good cause for including a document within the
scope of a protective order entered pursuant to Rule 26(c) exists when a party shows that
disclosure will result in a clearly defined specific and serious injury.” Doc. No. 107 at 4 (citing
In re September 11 Litigation, 262 F.R.D. 274, 277 (S.D.N.Y. 2009) (internal quotation marks
and citation omitted)). Needless to say, the desire to avoid “adverse publicity” or to conceal
evidence of one’s criminal misconduct is not “sufficient to justify judicial protection from
disclosure.” Koch, 2012 U.S. Dist. LEXIS 58608, at *6 (citation omitted); see also In re
Pasquale J. Vatsala Vescio, 220 B.R. 195, 201 (Bankr. D. Vt. 1998) (providing access to
documents that allegedly demonstrated fraud committed on sister federal court, and refusing “to
permit any order of ours to shield a party from accountability to the Court of which we are a
unit”).
Ceglia has not made any attempt to meet his burden. He has not identified any injury that
will result from disclosure of the April 13 Kasowitz Letter, let alone a “clearly defined specific
and serious injury.” Again, Ceglia’s desire to avoid public accountability for his misconduct
does not justify his misuse of this Court’s authority.
This Court should overrule Ceglia’s designation of the April 13 Kasowitz Letter as
improper and unwarranted.
CONCLUSION
For the foregoing reasons, Defendants respectfully request an order compelling Ceglia to
produce
REDACTED
to Defendants, along with all attachments and/or embedded images, and any
other related non-privileged materials that are also responsive to the Court’s orders.
Alternatively, the Court should inspect in camera those communications and attachments and/or
13
embedded images over which Ceglia claims privilege, and require Ceglia to bear his burden of
justifying his privilege claims by competent evidence. The Court should also overrule Ceglia’s
improper designation of the April 13 Kasowitz Letter as confidential. Finally, this Court should
award Defendants their attorneys’ fees and costs, and all other relief to which they may be
entitled.
Dated:
New York, New York
September 5, 2012
Respectfully submitted,
/s/ Orin Snyder
Orin Snyder
Alexander H. Southwell
Matthew J. Benjamin
Amanda M. Aycock
GIBSON, DUNN & CRUTCHER LLP
200 Park Avenue, 47th Floor
New York, NY 10166-0193
(212) 351-4000
Thomas H. Dupree, Jr.
GIBSON, DUNN & CRUTCHER LLP
1050 Connecticut Avenue, NW
Washington, DC 20036
(202) 955-8500
Terrance P. Flynn
HARRIS BEACH PLLC
726 Exchange Street
Suite 1000
Buffalo, NY 14210
(716) 200-5120
Attorneys for Defendants Mark Zuckerberg and Facebook, Inc.
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