Ceglia v. Zuckerberg et al

Filing 578

REPLY to Response to Motion re 553 MOTION for Discovery filed by Facebook, Inc., Mark Elliot Zuckerberg. (Attachments: # 1 Certificate of Service)(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’ REPLY MEMORANDUM IN SUPPORT
OF THEIR MOTION FOR PRODUCTION

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]
October 26, 2012

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

REPLY MEMORANDUM
In their Motion for Production, Defendants set forth in meticulous detail the evidence
demonstrating that Paul Ceglia’s expert Larry Stewart lied under oath during his deposition and
in his sworn statements to this Court. As Defendants explained, all of the evidence available—
including documents, notes, testimony, and video—demonstrates (1) that Stewart lied about
having personally extracted ink samples from the Work for Hire and Specifications Documents
(together, the “Hard-Copy Documents”) and (2) that Stewart lied about having mistakenly sent
the wrong paper samples—samples taken not from the fraudulent Work for Hire document but
from the undisputed Specifications Document—for testing.
Ceglia’s opposition papers1 confirm both mistruths. First, Stewart has now confirmed
that, contrary to his sworn deposition testimony, he never actually took ink samples from the
Hard-Copy Documents. Stewart Decl. (Doc. No. 575) ¶ 6. Second, rather than clearly stating
(and documenting) that he sent paper samples taken from the Work for Hire document, Stewart
offers only his “recollection” that he did so. Id. ¶ 7. But of course, Stewart’s “recollection” is
contradicted by overwhelming objective evidence that Stewart himself acknowledges. Because
that overwhelming evidence conclusively establishes that Stewart sent paper samples from the
wrong document to Plaintiff’s expert Walter Rantanen, Rantanen’s findings—which are
inconclusive at best, in any event—become completely irrelevant.

1

Without explanation or permission, Ceglia filed a purported “Corrected/Amended”
opposition on October 24, 2012 that includes revisions to the original brief and exhibits, five
days after the deadline for his response to Defendants’ motion. See Doc. No. 577. Defendants
do not refer to this belated and unauthorized filing, but to Ceglia’s timely opposition, filed
October 18, 2012 (Doc. No. 573).

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None of Ceglia’s attempts to explain away Stewart’s falsehoods have any merit, and most
of them are completely irrelevant. Accordingly, and in light of the fact that Ceglia does not
dispute his obligation to produce documents reflecting Stewart’s sampling of the Hard-Copy
Documents, this Court should enter an order directing Stewart personally to produce all such
documents directly to Defendants and to provide a sworn certification that he has done so.
1.

During his deposition, Stewart repeatedly testified that he took ink samples from

the Hard-Copy Documents and that they are still in his possession. See Doc. No. 554 at 10-11.
In their moving papers, Defendants set forth the overwhelming evidence demonstrating that
Stewart’s testimony was false, and that Plaintiff’s expert Erich Speckin was the only one of
Ceglia’s experts to have taken ink samples from the Hard-Copy Documents. That evidence
included Stewart’s Inventory Worksheet; counsel’s first-hand observations during the July 25,
2011 inspection; and videotape confirmation.
Stewart now admits that Defendants are correct: he did not take any ink samples. He
attempts to explain away his obvious falsehoods by claiming that his “testimony at deposition, in
context, was clearly referring to the Plaintiff’s expert’s team effort, Mr. Speckin and I, taking
samples per the Court’s order.” Doc. No. 575 ¶ 6.
But Stewart’s deposition testimony—particularly his use of the first-person pronoun—is
to the contrary. See, e.g., Stewart Tr. at 202:23-25 (“Q. You explain in the report that you took
ink samples from the document, do you not? A. Yes, I do. I still have them.”); 201:24-202:5 (“Q.
In fact, you conducted no ink testing in this case; correct? A. No. I did physical analysis on the
ink and decided at that point to hold off doing any chemical analysis and I still have the ink
samples today, I have not tested them.”). Moreover, in the meet-and-confer communications that
preceded this motion, Boland and Stewart repeatedly represented that Stewart personally took

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ink samples and still had them in his lab.2 This is not the first time that Stewart has tried to take
credit under oath for ink analysis actually performed by a colleague. This is precisely the same
type of misconduct for which Stewart was indicted. See Doc. No. 554 at 2 n.1.
2.

Ceglia and Stewart claim that the paper samples sent to Ceglia’s expert Walter

Rantanen are from the Work for Hire document, and that Rantanen’s findings support that
document’s authenticity. At deposition, when confronted with substantial evidence to the
contrary, Stewart baldly insisted that the paper samples were from the Work for Hire document.
See, e.g., Stewart Tr. 362:17-20.
Now, faced with the overwhelming objective evidence—exhaustively catalogued in
Defendants’ motion papers and supporting declarations, see Doc. Nos. 554 at 14-20—that he
sent Rantanen paper samples from the wrong document, Stewart is willing to state only that it is
his “recollection” that he submitted paper samples from the Work for Hire document. Id. ¶ 7.
Conspicuously, Stewart does not affirmatively state that he did submit the correct paper samples
to Rantanen, as he testified in his deposition. See Stewart Tr. 362:17-20. Nor does he identify
any documentary evidence suggesting that he did so. And in fact, the evidence conclusively
establishes that Stewart sent Rantanen paper samples from the six-page Specifications
Document, not the Work for Hire document. That evidence includes: a glaring “conflict in the
notations” on Stewart’s paperwork that Stewart himself acknowledges, id., ¶ 8; Stewart’s
Inventory Worksheet; Stewart’s contemporaneous handwritten examination notes; the very

2

See, e.g., Southwell Decl. (Doc. No. 555) Ex. EE (“Stewart took samples of ink that
remain untested in vials in his lab”). When pressed, Boland and Stewart confirmed that Stewart
took ink samples and still had them. Id. at ¶¶ 39-41, Exs. EE-GG.

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definitions in Stewart’s expert report; the videotape of the July 25, 2011 inspection; and the
results that Rantanen reported. See Doc. No. 554 at 14-17.
Tellingly, neither Ceglia nor Stewart address the fanciful tale that Stewart concocted
from whole cloth during his deposition to explain away this evidence. Stewart stated under oath:
that the samples provided to Rantanen came from the Work for Hire document; that Stewart took
those samples when he was given “authority” to conduct “additional” sampling from the Work
for Hire document; that he erroneously “renamed” the source of the “additional” samples as
“Q2”—the name he consistently used elsewhere for the Specifications Document; and that he
took “doubled [] sampling” that resulted in taking a total of 36 samples from each page of the
Work for Hire document. See id. at 10. Stewart now appears to have abandoned this absurd
explanation, which, as Defendants explained, was either obviously false or an admitted violation
of the Court’s orders, which never authorized “additional” paper sampling. See id. at 18-20.
Despite Stewart’s effective admission that he sent the wrong paper samples to Rantanen,
and Stewart’s abandonment of the false cover-up he testified to under oath, Ceglia blithely
asserts that “Mr. Stewart has confirmed that he sent samples from the two page FB contract.”
Doc. No. 573 at 2. Obviously, Stewart has “confirmed” no such thing. Ceglia cites to paragraph
7 of Stewart’s declaration, which merely offers Stewart’s “recollection” that he sent paper
samples from the Work for Hire document to Rantanen. For Ceglia to distort Stewart’s hedged
statement about his “recollection” as confirmation of anything is disingenuous—it is another of
Ceglia’s serial “gross misrepresentation[s] which would be detected by even the marginally
literate.” Doc. No. 457 at 15.
Finally, Ceglia bizarrely rehashes his reliance on Rantanen’s substantive findings to
support his claim of the Work for Hire document’s authenticity, and asserts that because

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Defendants have not submitted the same type of paper test, Defendants have made some
“admission of fact.” Doc. No. 573 at 3, 6. This is absurd. Ceglia has consistently
misrepresented Rantanen’s finding that the paper samples he tested were “consistent with”
having come from the “same mill and production run.” As Rantanen explained during his
deposition, that finding means only that it is not “factually impossible” for the samples to have
come from the same mill and production run, and is perfectly consistent with the paper having
come from different runs or mills. Rantanen Tr. 149:4-16. And Stewart acknowledged in his
deposition that Rantanen’s finding is completely consistent with Ceglia having created a
fraudulent contract and printed each page on paper from the same production run. See Stewart
Tr. 350:24-351:5.
But more importantly, Rantanen’s findings are now completely irrelevant, given the
overwhelming proof that he actually tested paper samples extracted from the undisputed
Specifications Document, not the fraudulent Work for Hire document presented for inspection.
Indeed, as Defendants explained, Rantanen’s reported findings further support that conclusion.
Specifically, the characteristics of the paper samples that Rantanen examined are consistent with
the coloration and ultraviolet fluorescence of the Specifications Document, not the Work for Hire
document. See Doc. No. 554 at 19.
3.

In their attempt to cover up Stewart’s lies and mistakes, Ceglia and Stewart

continue to falsely assert that they have “previously provided, on multiple occasions, all
documents in [Stewart’s] possession, custody, or control responsive to Defendants’ discovery
requests.” Stewart Decl. (Doc. No. 575) ¶ 2; see also Doc. No. 573 at 1. This is part of Ceglia’s
ongoing campaign of obfuscation: as detailed in the supporting Southwell Declaration (Doc. No.
555), Ceglia and Stewart have made this misrepresentation numerous times, both during

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Stewart’s deposition and after. Each time, Ceglia has subsequently produced additional
documents that had not been previously produced, despite his continual representations that
everything had been previously produced. See Doc. No. 555 ¶¶ 16-19, 22, 27, 36-40, 44-45.
Any such statement by Ceglia or Stewart should be scrutinized by this Court.
Moreover, Stewart and Ceglia persist in making this representation in the face of clear
evidence—and Stewart’s own statements—to the contrary. Stewart testified in his deposition
that he possessed an inventory worksheet that documented his ink samples. See Stewart Tr. at
372:11-373:6. He has produced no such document. Additionally, Defendants have presented
clear and uncontested evidence that Stewart used two inventory worksheets on July 25, 2011 in
order to record the source of the paper and toner samples in his sampling vials: a first worksheet
to record the contents of vials 1-10, and a second worksheet to record the contents of vials 11-18.
See Aycock Decl. (Doc. No. 556) ¶¶ 26-28. Stewart does not deny that he used a second
worksheet at the inspection—instead he cryptically states that he has “no additional documents
to provide to the Defendants.” Stewart Decl. (Doc. No 575) ¶ 3. If that is true, then Stewart has
destroyed or otherwise disposed of the second inventory worksheet used on July 25, 2011, in
addition to any inventory worksheet that purportedly documented his ink samples.
4.

Ceglia mischaracterizes Defendants’ Motion for Production as a “Daubert

challenge of Larry Stewart.” Doc. No. 573 at 2. This is incorrect. Defendants are not—at this
time, in this motion—making a Daubert challenge to Stewart’s qualifications or methodology.
In this motion, Defendants are challenging the truthfulness of Stewart’s testimony, and
requesting documents—which he stated that he possesses, see, e.g., Stewart Tr. at 372:11373:6—that would further confirm his false statements to this Court.

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Ceglia proceeds to attack “Gibson Dunn’s junior associate,” Amanda Aycock, as a “nonexpert lawyer” unqualified to “contradict a qualified expert” based on what she personally
observed during the Court-authorized inspections and on videotape. Doc. No. 573 at 2. This is
gratuitous and incorrect. It does not take an expert to recognize or to tell the truth. Aycock’s
declaration includes her first-hand observations from the inspections, as well as her review of all
of the relevant documents and videotape.3 And of course, Stewart has himself confirmed that
Aycock’s first-hand observations are completely accurate: Stewart never took any ink samples
from the Hard-Copy Documents.
Moreover, Ceglia’s criticism of Defendants’ use of the video of the July 2011 Hard-Copy
Inspections is hypocritical in the extreme. Ceglia has filed numerous motions relying on the
videos of the inspection, including a motion requesting default judgment as relief. Doc. No. 189;
see also Doc. Nos. 202, 214. Ceglia cannot be heard to argue that the video is persuasive and
reliable evidence when he is requesting the most severe sanction against Defendants, but then
assert that the video is not “authenticated” and “not evidence in this case” when it demonstrates
his expert’s lies. See Doc. No. 573 at 16. Moreover, Stewart himself analyzed and relied on the
same video of the same July 25, 2011 inspection in rendering expert opinions to the Court—
opinions on which Ceglia relied in opposing Defendants’ Motion to Dismiss for Fraud. See, e.g.,
Report of Larry F. Stewart (Doc. No. 416) ¶¶ 46-53.
5.

As part of his effort to divert the Court’s attention from his expert’s lies, Ceglia

makes a series of false representations. His most serious is one he has made before (see Doc.
3

Aycock was present at every single day of the Hard-Copy Inspections that took place in
July 2011. Stewart—who draws conclusions from the video on a day he was not present, July
14, 2011, see Doc. No. 416 at ¶¶ 41-53—attended only one day. Ceglia’s counsel Dean Boland
was not present at all.

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No. 563), and one that Defendants have already corrected on the record. Ceglia asserts, “Orin
Snyder declared there was no dispute about the signatures on page two” of the Work for Hire
document. Doc. No. 573 at 5 (citing June 30, 2011 Tr. at 56). As Defendants explained in their
October 8, 2012 letter to the Court, Snyder made no such declaration. See Doc. No. 567.
Rather, Snyder made clear that the purported “Mark Zuckerberg” signature on page two either
“appears to be his signature or a very good copy of his signature,” and did not agree that page
two of the purported contract was authentic. June 30, 2011 Tr. 57:9-15 (emphasis added). At no
point have Defendants ever conceded that the second page of Ceglia’s forged Work for Hire
document is authentic.4
6.

Ceglia dedicates most of his opposition to a bizarre attack on the Gibson Dunn

law firm. Ceglia’s intention is obvious: to distract this Court from the basic, incontrovertible fact
that Ceglia and Stewart have been caught red-handed in numerous lies. Ceglia’s unhinged
allegations are false and irrelevant. With regard to the Chevron litigation, Gibson Dunn obtained
discovery revealing that certain of the lawyers and consultants purporting to represent the
Ecuadorian plaintiffs were attempting to perpetrate a massive fraud that included intimidation of
judges, bribery, fabrication of evidence, and the secret and unlawful ghostwriting of judicial
4

In another misrepresentation, Ceglia characterizes as false Snyder’s statement to a
reporter that in the Facebook case Plaintiff’s counsel sought to have Snyder excluded from
participation in the case because he was “too aggressive” and the judge “denied their request.”
Doc. No. 573 at 10. Ceglia claims, “Of course, this event never occurred.” Id. However, as this
Court knows, during the November 2, 2011 hearing, as reflected in the transcript, Argentieri
made the astounding request that “Mr. Southwell be the point man here” instead of Snyder, and
complained that “when any of the attorneys tries to deal with [Snyder] directly, he is hostile,
uncooperative and --,” and Boland agreed, “Very well, that is correct.” Nov. 2, 2012 Tr. 141:921. The Court rightly denied this request, noting, “Mr. Snyder has been in first chair here and
has been the primary weapon of choice here for the defendants in terms of his obviously
excellent presentation . . . He is a senior partner, he is entitled to interject himself.” Nov. 2, 2012
Tr. 141:23-142:8.

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documents in pursuing a corrupt, multibillion-dollar judgment against Chevron. Indeed, the
scope of the fraud, and the evidence of the plaintiffs’ lawyers engaging in “inappropriate,
unethical and perhaps illegal conduct” has sent “shockwaves through the nation’s legal
communities.” In re Chevron Corp., No. 1:10-mc-00021-22, Dkt. 77, at 3-4 (D.N.M. Sept. 2,
2010). As one federal court declared, “the concept of fraud is universal, and . . . what has
blatantly occurred in this matter would in fact be considered fraud by any court.” Chevron Corp.
v. Camp, 2010 WL 3418394, at *6 (W.D.N.C. Aug. 30, 2010). See generally Chevron Corp. v.
Donziger, 2012 WL 3538749 (S.D.N.Y. July 31, 2012). In falsely accusing Gibson Dunn of
misconduct, Ceglia relies on press releases written on behalf of the individuals caught
perpetrating the fraud.
CONCLUSION
It is now beyond dispute that Larry Stewart repeatedly lied under oath during his
deposition and in his sworn statements to this Court. Indeed, Stewart went so far as to testify
that he had been given “authority” to conduct “additional” sampling—a bizarre attempted coverup that Stewart has now abandoned. Stewart is simply willing to say anything to avoid
responsibility for his blatant, undeniable error—he had the wrong paper samples tested.
Because Ceglia still has not produced all of the documents reflecting Stewart’s sampling
of the Hard-Copy Documents, this Court should enter an order directing Stewart personally to
produce all such documents directly to Defendants. This Court should also order Stewart to
certify under oath that he has produced all such documents. Finally, Defendants request that the
Court award Defendants their attorneys’ fees and costs, and all other relief to which they may be
entitled.

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Dated:

New York, New York
October 26, 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
[phone]

Thomas H. Dupree, Jr.
Erik R. Zimmerman
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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