Ceglia v. Zuckerberg et al

Filing 654

OBJECTIONS to REPORT AND RECOMMENDATIONS re (318) MOTION to Dismiss filed by Facebook, Inc., Mark Elliot Zuckerberg, (320) MOTION for Judgment on the Pleadings filed by Facebook, Inc., Mark Elliot Zuckerberg Objections due fourteen days from receipt.(651 in 1:10-cv-00569-RJA-LGF) filed by Plaintiff Paul D. Ceglia.. (Attachments: # 1 Affidavit Declaration of Paul D. Ceglia, # 2 Certificate of Service Certificate of Service)Associated Cases: 1:10-cv-00569-RJA-LGF, 1:13-cv-00256-RJA(Argentieri, Paul)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK
PAUL D. CEGLIA,
Plaintiff,

Civil Action No. : 1:10-cv00569-RJA

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

PLAINTIFF’S OBJECTION TO THE REPORT AND RECOMMENDATION OF THE
MAGISTRATE JUDGE, DOC. NO. 651

TABLE OF CONTENTS
TABLE OF AUTHORITIES ...................................................................................................... iii
PRELIMINARY STATEMENT ................................................................................................. 1
INTRODUCTION......................................................................................................................... 1
STATEMENT OF FACTS........................................................................................................... 8
STANDARD OF REVIEW ........................................................................................................ 16
ARGUMENT............................................................................................................................... 26
I. CONTRARY TO THE ASSERTION OF THE MAGISTRATE, FEDERAL RULE
OF EVIDENCE §§ 901 AND 1008 ESTABLISH THE AUTHENTICITY OF THE
CONTRACT AND REQUIRE THAT THE CONTENTS IS A FACTUAL MATTER TO
BE DETERMINED BY THE JURY ..................................................................................... 26
III.

THE MAGISTRATE ERRED IN FAILING TO APPLY ...................................... 27

THE CORRECT STANDARD OF REVIEW FOR SPOLIATION .................................. 27
A. The Evidence Shows that “Multiple Versions” of the Work for Hire Contract Did
Not Exist. .............................................................................................................................. 30
B. Damage to the Work for Hire Document ................................................................... 33
C. The Missing USB Drives ............................................................................................... 35
D. The Reinstallation of the Windows Program............................................................. 35
E. The Supposed Deletion of Electronic Copies of the Work for Hire Document and
other Electronic Evidence. .................................................................................................. 36
IV.
A.

SPECIFIC OBJECTIONS ......................................................................................... 37
Objection to Magistrate’s Finding that the StreetFax Document is Authentic ..... 37

B. Objection to Magistrate’s Finding that the Work for Hire Documents and
Supporting Emails are Fraudulent. ................................................................................... 38
CONCLUSION ........................................................................................................................... 48

ii

TABLE OF AUTHORITIES
Cases
Alliance for Environmental Renewal, Inc. v. Pyramid Crossgates Co.,....................... 19, 20
436 F.3d 82 (2d Cir. 2006)
Anderson v. Liberty Lobby, Inc., ......................................................................................... 21
477 U.S. 242, 254 (1986)
Arbaugh v. Y & H Corp., ............................................................................................ 6,19,20
546 U.S. 500 (2006)
Arista Records LLC v. Usenet.com, Inc., ............................................................................ 25
633 F. Supp. 2d 124 (S.D.N.Y. 2009).
Barr Rubber Products Co. v. Sun Rubber Co.
425 F.2d 1114, 1120 (2d Cir.)........................................................................................ 23
Bell Atl. Corp. v. Twombly, ................................................................................................... 7
550 U.S. 544, 563 (2007)
Chambers v. Nasco, Inc., ............................................................................................... 27,28
501 U.S. 32, 50 (1991)
Chin v. Port Auth. of New York & New Jersey, ...........................................................passim
685 F.3d 135 (2d Cir. 2012)
Courtenay Communs. Corp. v. Hall, ..................................................................................... 7
334 F.3d 210 (2d Cir. 2003)
Filetech S.A. v. France Telecom, S.A.,................................................................................. 18
157 F.3d 922 (2d Cir. 1998)
First Nat’l Bank of Arizona v. Cities Service Co., .............................................................. 24
391 U.S. 253 (1968))
Fortunato v. Ford Motor Company, ................................................................................... 24
464 F. 2d 962 (2nd Cir. 1972)
Global Network Communs., Inc. v. City of New York, .......................................................... 7
458 F.3d 150 (2d Cir. 2006)

iii

Henderson ex rel. Henderson v. Shinseki ............................................................................. 6
131 S. Ct. 1197 (2011)
In re: Coordinated Pretrial Proceedings in Antibiotic Antitrust Actions, .......................... 23
538 F.2d 180 (8th Cir. 1976)
In re Pfizer, ......................................................................................................................... 37
2013 U.S. Dist. LEXIS 2850, *49 (S.D.N.Y. January 8, 2013)
Kopec v. Coughlin, ................................................................................................................ 8
922 F.2d 152 (2d Cir. 1991)
Parker v. Sullivan, ............................................................................................................... 22
891 F. 2d 185 (7th Cir. 1989)
Reed Elsevier, Inc. v. Muchnick, ........................................................................................... 6
130 S.Ct. 1237 (2010).
Reeves v. Sanderson Plumbing Products, Inc., .............................................................. 19,20
530 U.S 133 (2000)
Residential Funding Cor. v. DeGeorge Financial Corp., ................................................... 29
306 F.3d 99 (2d Cir. 2002)
Schiel v. Stop & Shop Co., Inc., ..................................................................................... 21,32
2006 U.S. Dist. LEXIS 73508, *21 (D. Conn. Sept. 7, 2006)
Universal Oil Products Co. v. Root Refining Co., .............................................................. 29
328 U.S. 575 (1946)
United States v. Chimurenga, ............................................................................................. 22
760 F.2d 400 (2d Cir. 1985)
United States v. Goba, ........................................................................................................ 22
220 F. Supp.2d 182, 188 (W.D.N.Y. 2002)
United States v. International Telephone & Telegraph Corp., ........................................... 23
349 F. Supp. 22, 29 (D.Conn. 1972)
West v. Goodyear Tire & Rubber Company, ...................................................................... 27
167 F.3d 776 (2d Cir. 1999)

iv

Statutes
28 U.S.C. § 1332.................................................................................................................... 6
Fed. R. Civ. P. 12(b)(1).................................................................................................... 4,5,7
Fed. R. Civ. P. 12(b)(6)............................................................................................. 4,5,17,24
Fed. R. Civ. P. 12(d) .............................................................................................................. 5
Fed. R. Civ. P. 38............................................................................................................ 15,17
Fed. R. Civ. P. 56..........................................................................................................passim
Fed. R. Civ. P. 72(b)(2).......................................................................................................... 1
Fed. R. Civ. P. 72(b)(3)............................................................................................. 3,4,16,25
Fed. R. Evid. 901(a)....................................................................................................... 1,3,24
Fed. R. Evid. 901(b)(1) .................................................................................................. 1,3,26
Fed. R. Evid. 901(b)(3) .................................................................................................. 1,3,26
Fed. R. Evid. 1008 .................................................................................................. 1,16,24,26
U.S. Const., Amend. VII................................................................................................... 1,17

v

PRELIMINARY STATEMENT
Pursuant to Rule 72 (b)(2), the plaintiff Paul Ceglia respectfully objects to the March
26, 2013, Report and Recommendation (hereinafter referred to as "R & R") of the Magistrate, the
Honorable Leslie G. Foschio, which recommends that this Court, the Honorable Richard J.
Arcara, should grant the defendants' Motion to Dismiss on the basis that the contract in dispute
"is a recently created fabrication"; or, in the alternative, on the basis of the “spoliation of the
evidence." (R & R, p. 151).
The plaintiff objects on the grounds that the recommendations not only deprive the plaintiff
of his constitutional right to trial by jury under the Seventh Amendment and Rule 38 Fed. R. Civ.
P., but also they are in complete disregard and contrary to the far greater weight of the evidence
(i.e. the testimony of the plaintiff and the forensic experts); the Federal Rules of Evidence (i.e.
Rules 901 and 1008); the Federal Rules of Civil Procedure (i.e. Rules 12 and 56); the correct
burden of proof; and fundamental principles of analysis which must be applied in the
determination of dispositive motions.
INTRODUCTION
This is a private civil suit brought by the plaintiff, Paul Ceglia, a businessman and
entrepreneur, against the defendants, Mark Zuckerberg and Facebook, Inc., alleging Breach of
Fiduciary Duty, Constructive Fraud, Actual Fraud, Breach of Contract, Breach of the Implied
Covenant of Good Faith and Fair Dealing, and for Declaratory Relief. Trial by jury is demanded.
The central issue and ultimate question of fact in the case is the authenticity of the April
28, 2003 contract, signed and initialed by Ceglia and Zuckerberg, which provides that Ceglia

1

would pay $1000 to fund Zuckerberg's "The Face Book" project in exchange for "a half interest
(50%)" in the project. Ceglia performed. Zuckerberg did not.
The overwhelming evidence that the contract (Work for Hire) is in fact authentic is the
specific affidavit of Paul Ceglia, the lie detector test of Paul Ceglia, the expert testimony of
experienced forensic experts whose credentials are impeccable and whose findings are
unequivocal that the contract is authentic, and the multiple contemporaneous emails between
Ceglia and Zuckerberg, which specifically and often refer to and confirm the very terms of the
contract.
In addition to the explicit and specific affidavit of Ceglia, who categorically attests that
he and Zuckerberg signed and initialed the contract (see Rule 901(a)(b)(1)), the experts testified
that the signature and the initial purporting to be Zuckerberg's are in fact Zuckerberg's; that the
paper, the staples, the indentations and other indicia all indisputably demonstrate that the
contract is indeed authentic and not a forgery. See Fed. R. Evid. 901(a)(b)(3) Furthermore, the
experts also witnessed and opined that there was evidence that the defendants' experts (whose
qualifications were seriously questioned and who had not been subjected to any Daubert
standards) had tampered with the document in such a way as to despoil the evidence.
There is substantial conflict in the evidence by the witnesses and the documents. Ceglia
avers under oath that the contract is genuine. Zuckerberg swears under oath that it is a forgery.
Ceglia avers under oath that the emails in paragraphs 32-55 of the First Amended Complaint are
genuine. Zuckerberg swears that the emails are forgeries. Ceglia has taken a lie detector test,
which confirms he is telling the truth. Zuckerberg has not. Ceglia’s highly qualified and

2

experienced experts assert that the contract is genuine. Zuckerberg’s experts whose Daubert
qualifications and experience are in doubt, claim the contract and the emails are forgeries.
Rule 901(b)(1) Fed. R. Evid. provides that the testimony of a witness with knowledge
that an item is what it is claimed to be satisfies the requirements of authentication and
identification. Ceglia is a witness with knowledge since he is a signatory to the contract and a
witness to the signing and initialing of the contract by Zuckerberg. He has so testified.
Rules 901(a) and (b)(3) Fed. R. Evid. provide that the testimony of an expert witness who
compares the item with an authenticated specimen satisfies the requirement of authentication or
identification. Ceglia’s qualified experts are witnesses who have compared authenticated
specimens of the handwriting and initials of Zuckerberg and other indicia satisfying the
requirement of authentication or identification.
Notwithstanding the very substantial evidence showing that the contract and the emails
are genuine, the Magistrate, after denying the plaintiff the right to general discovery, including
the deposition of Zuckerberg, filed a Report and Recommendation which stated that the contract
was not authentic and that the plaintiff and his experts had despoiled the evidence! The premise
which served as the foundation and basis for the Magistrate's outré conclusions, and
which permeated the entire 155 page Report of the Magistrate, is the following admission which,
the Plaintiff submits, by itself, requires a rejection of the Magistrate's Report pursuant to this
Court's de novo review under Rule 72(b)(3):
Because copious evidence has been submitted by both Defendants in support of
their challenge to the Work for Hire Document's authenticity ans (sic) by Plaintiff
in opposition, including expert witness reports, affidavits, exhibits and deposition
transcripts, a thorough discussion of all the evidence [Footnote: "In total, the

3

parties have submitted almost 4,500 pages supporting and opposing Defendants'
Motion to Dismiss."] would be overwhelming to the reader and unnecessary. As
such, the court discusses only the evidence most favorable to Defendants'
Motion to Dismiss and any rebuttal evidence submitted by Plaintiff.
(R&R, p. 32, ll. 15-21; Emphasis added.)
In addition to viewing the evidence in the light most favorable to the moving defendants,
in complete derogation of all law and standards of analysis regarding dispositive motions, the
Magistrate also repeatedly usurped the function and the right of the jury and substituted himself
as the trier of all facts, including the ultimate fact in this case. In order to avoid the rigors of
analysis required by Rule 12(b)(6) and Rule 56, dealing with dispositive motions, the Magistrate
asserts that his recommendations are based upon the Rule 12(b)(1) requirement of subject matter
jurisdiction in order to have a case or controversy. Consequently, the Magistrate decided the
credibility of witnesses. He decided conflicting evidence to the extent he considered the
plaintiff's evidence at all. He viewed all inferences in the light most favorable to the defendants.
He attempted to answer irrefutable scientific evidence of the Plaintiff's experts with rampant
speculation and conjecture, even to the point of inventing the possibility of mysterious and
unknown accomplices1!

1

For example, in response to the expert's opinion that the lack of any similarity between
the signatures of Ceglia and Zuckerberg made it impossible for Ceglia to forge Zuckerberg's
signature, the Magistrate calls the opinion "sophomoric," "blink[ing] at the essence of the
Defendant's Motion to Dismiss," and "ignoring the distinct possibility that someone other than
the Plaintiff may have perpetrated the asserted forgeries which, again, would explain a lack of
similarities between Plaintiff's signature and the purported Zuckerberg signature. The argument
also ignores the reality that anyone attempting to forge another's handwriting would be unlikely
to use his own handwriting." (R&R pp. 84, 85).

4

The erroneous syllogism recommended by the Magistrate is that this Court should
determine that the contract forgery, notwithstanding the plethora of evidence to the contrary.
Then, according to the Magistrate, the Court should find that there is no case or controversy.
And then again, according to the Magistrate, this Court should dismiss the case for lack of
subject matter jurisdiction pursuant to 12(b)(1). In order to accept this syllogism, the Court
would be required to decide the credibility of the percipient witnesses and the expert witnesses;
and to view all the evidence and all reasonable inferences from the evidence in the light most
favorable to the defendants, ignoring all the evidence of the plaintiff to the contrary. This would
manifestly be in contravention to the Seventh Amendment, Rule 38, and the required analysis of
Rules 12(b)(6) and12(d), and Rule 56.
The Magistrate’s dismissal of this action for lack of subject matter jurisdiction
confuses the concepts of proof of an essential element of a claim and the Court’s power to hear a

Nor is this an isolated incident. In order to refute the damning scientific evidence against
Zuckerberg that showed a "latent impression" (the indentation created on a piece of paper placed
underneath another piece of paper on which something is handwritten) on the "signature" page
which was identical to an interlineation from the "initial" page, the Magistrate simply concocted
a fable: "As such, Plaintiff could have created an 'original' by printing the scanned copy of the
authentically executed document, in which case the handwritten interlineation, signatures, and
initials would have appeared printed using ink jet toner, rather than handwritten with ballpoint
ink, and then printed an unsigned copy of the same document that Plaintiff allegedly printed on
April 25, 2003, to be signed by Plaintiff and Zuckerberg, and then traced from the print-out of
the scanned, executed copy both Plaintiff's and Zuckerberg's signatures onto the newly printed
unsigned copy." (R&R p. 85.)
There is no such evidence for this speculation, indeed, there is no such evidence that
would even support a hypothetical of what the Magistrate is surmising.

5

claim. It improperly turns a motion for summary judgment under Rule 56 into a motion to
dismiss for lack of subject matter jurisdiction under Rule 12(b)(1), and thus constitutes an
impermissible “drive-by jurisdictional ruling,” which the Supreme Court has expressly
prohibited. Arbaugh v. Y & H Corp., 546 U.S. 500, 511 (2006); Reed Elsevier, Inc. v.
Muchnick, 130 S.Ct. 1237, 1243-44 (2010); Henderson ex rel. Henderson v. Shinseki, 131 S. Ct.
1197, 1202 (2011). Under the cited cases, the Supreme Court has made clear that a federal court
cannot dismiss a case for lack of subject matter jurisdiction unless there has been an express
articulation by Congress that failure to establish an element is indeed jurisdictional. As the Court
made clear in Arbaugh, "If the Legislature clearly states that a threshold limitation on a statute's
scope shall count as jurisdictional, then courts and litigants will be duly instructed and will not
be left to wrestle with the issue. But when Congress does not rank a statutory limitation on
coverage as jurisdictional, courts should treat the restriction as nonjurisdictional in
character." 546 U.S., at 515-516.
There is no question of the jurisdiction of the federal court to hear this case, where there
is complete diversity of citizenship between the parties and the amount in controversy far
exceeds the $75,000 amount in controversy required by 28 U.S.C. § 1332. The Magistrate did
not dismiss the case on either of these jurisdictional grounds, the only ones properly available
under § 1332. Although couched in terms of a motion to dismiss for fraud on the Court, the
defendants’ motion in essence challenged the ability of the plaintiff to prove the existence of the
contract at issue, obviously an essential element of the plaintiff’s claim, notwithstanding the
testimony of the plaintiff and expert witnesses that the contract existed and was genuine. Rather
than treat the motion as one for summary judgment, which clearly required denial because of

6

genuine issues of material fact, the Magistrate erroneously converted the motion into a 12(b)(1)
jurisdictional motion, and thereby improperly arrogated to himself the role of fact-finder
empowered to resolve issues of credibility and decide disputed questions of fact. This was a
clear error of law under any applicable standard of review.
Where the plaintiff and his experts, whose qualifications are not in question, all testify
that the contract between the parties exists and is genuine, and the defendants and their experts
testify otherwise, the only proper way to resolve the dispute is through a trial, not by a
unsanctioned motion under Rule 12(b)(1).
Thus, the Magistrate’s recommendation is governed by Rule 12(b) which requires that
the matter “be treated as one for summary judgment under Rule 56. All parties must be given a
reasonable opportunity to present all the material that is pertinent to the motion.” As described
by the Second Circuit, the Rule 12(d) conversion requirement “deters trial courts from engaging
in factfinding when ruling on a motion to dismiss and ensures that when a trial judge considers
evidence dehors the complaint, a plaintiff will have an opportunity to contest defendant’s reliedupon evidence by submitting material that controverts it.” Global Network Communs., Inc. v.
City of New York, 458 F.3d 150, 155 (2d Cir. 2006) (reversing because “district court
consider[ed] external material in its ruling” and “relied on those materials to make a finding of
fact that controverted the plaintiff’s . . . factual assertions . . . in its complaint”); see also Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 563 (2007) (“[W]hen a complaint adequately states a claim, it
may not be dismissed based on a district court’s assessment that the plaintiff will fail to find
evidentiary support for his allegations or prove his claim to the satisfaction of the factfinder.”);
Courtenay Communs. Corp. v. Hall, 334 F.3d 210, 213-14 (2d Cir. 2003) (reversing dismissal

7

where “the court . . . . failed to view the allegations in [the] complaint in a light most favorable to
[the plaintiff], and engaged in premature fact-finding - thereby depriving [plaintiff] of an
opportunity to present evidence to support its claims”). Courts may not bypass the Rule 12(d)
conversion procedure in the interest of expediency. Kopec v. Coughlin, 922 F.2d 152, 155 (2d
Cir. 1991) (“We decline to uphold bypassing that procedure for the sake of expedience.”).
STATEMENT OF FACTS
In 2002 and 2003, a 29-year old businessman and entrepreneur, Paul Ceglia, was
developing an on-line database that would be, and was, deployed through a website known as
StreetFax.com. StreetFax.com compiled into a database photographs and other information
related to traffic intersections that were intended to allow insurance adjusters to easily obtain
such information to assist them in handling claims. (FAC ¶ 13.)
From time-to-time, Ceglia hired programmers, web developers and other
individuals to assist him with developing StreetFax.com. He frequently located such individuals
through on-line, help wanted advertisements on craigslist.com. (FAC ¶ 14.)
In 2003, Ceglia posted advertisements seeking programmers who would be able
to develop the search engine feature for StreetFax.com that would provide non-specific name
searching, synonymous term linking and the ability to comment on specific photographs. Those
features, along with others, would allow someone with an account to search for and find the
name and location of a specific intersection, and offering the top closest results if an exact match
could not be found. This allowed a user to find the right name even if the user misspelled that
name or used an abbreviation that did not match what was entered into the database. (FAC ¶ 15.)

8

In early 2003, Zuckerberg, a 19-year old freshman college student, responded to Ceglia’s
craigslist.com advertisement. (FAC ¶ 16.)
Upon learning Ceglia’s requirements, and after several lengthy conversations
about the possibility and strategy of creating a search engine that could find a specific name as
long as the spelling was “close,” in a telephone conversation in April 2003, Zuckerberg told
Ceglia that he was working on a great project. Zuckerberg told Ceglia if Ceglia hired him to
work on the StreetFax.com project and helped fund the development of his other project,
Zuckerberg would give Ceglia a one-half interest in Zuckerberg’s other project. (FAC ¶ 17.)
Zuckerberg explained to Ceglia that the other project would involve an on-line,
interactive yearbook, which initially would be targeted at students attending Harvard University,
where Zuckerberg was also a student. Zuckerberg told Ceglia that this project was inspired by
the on-line year book used at the boarding school that he attended. Zuckerberg further explained
to Ceglia that the project could be expanded beyond Harvard University. Zuckerberg told Ceglia
that the project’s working title was “The Face Book.” (FAC ¶ 18.)
Ceglia accepted Zuckerberg’s offer and agreed to pay Zuckerberg $1,000 for his
work on StreetFax.com and $1,000 for work to be performed to continue to develop “The Face
Book.” (FAC ¶ 19.)
Ceglia and Zuckerberg agreed to meet at the Radisson Hotel in Boston,
Massachusetts, on April 28, 2003 to sign a written contract. (FAC ¶ 20.)
From his home office in Wellsville, New York, Ceglia prepared the agreement on his
computer, combining two different forms of agreements that were given to him in the past and
modifying them to capture the terms that Zuckerberg and Ceglia agreed to over the telephone.

9

The agreement covered both the work Zuckerberg agreed to do for StreetFax.com and their
agreement concerning The Face Book. Ceglia printed and saved the agreement. (FAC ¶ 21.)
On April 28, 2003, Ceglia, accompanied by Karin Petersen, met Zuckerberg in the
lobby of the Radisson Hotel in Boston. Ceglia provided the agreement to Zuckerberg, who spent
a significant amount of time reviewing the agreement. Zuckerberg asked for one change on the
first page of the agreement, which was handwritten on to the first page of the document and
initialed by Zuckerberg and Ceglia. Zuckerberg and Ceglia then signed the Agreement, which is
attached hereto as Exhibit A. Except for the handwritten interlineations made on April 28, 2003,
Ceglia made no changes to the agreement after printing it. (FAC ¶ 22.)
The Agreement provides in pertinent part that:
[I]t is for the continued development of the software, program and
for the purchase and design of a suitable website for the project
Seller has already initiated that is designed to offer the students of
Harvard university (sic) access to a wesite (sic) similar to a live
functioning yearbook with the working title of “The Face Book”
It is agreed that Purchaser will own a half interest (50%) in the
software, programming language and business interests derived
from the expansion of that service to a larger audience.
(FAC ¶ 23.)
The Agreement defines “Seller” as “Mark Zuckerberg, his agents, employees,
suppliers, or sub-contractors, furnishing materials equipment, or services.” The Agreement
defines “Purchaser” as “Paul Ceglia.” (FAC ¶ 24.)
The Agreement further provides that:
The Agreed upon Cost that the Seller and the Buyer (sic) have
agreed upon are as follows: Buyer (sic) agrees to pay the seller

10

(sic) the Sum of $1000 a piece for the work to be performed for
Streetfax and $1,000 for the work to be performed for ”The Page
Book” (sic).
(FAC ¶ 25.)
During their conversations before the execution of the Agreement and thereafter,
Ceglia and Zuckerberg discussed using the name “The Face Book” and “The Page Book” for
their venture and, thus, the terms were synonymous. Indeed, when viewed in the context of the
Agreement (along with the other typographical errors, misspellings and failures to consistently
use defined terms found in the Agreement), in this provision, the Agreement’s reference to “The
Page Book” clearly is to the same “The Face Book” venture, which is referenced in other parts of
the Agreement. (FAC ¶ 26.)
The Agreement provides immediately below the interlineations on the first page
of the agreement and adjacent to Zuckerberg’s initials:
The agreed upon completion for the expanded project with
working title ”The Face Book” shall be Janruary (sic) 1 (sic) 2004
and an additional 1% interest in the business will be due the buyer
for each day the website is delayed from that date. (FAC ¶ 27.)
The Agreement provides continued performance as follows: For “The Face Book” Seller
agrees to maintain and act as the sites (sic) webmaster and to pay for all domain and hosting
expenses from the funds received under this contract, and Seller agrees that he will maintain
control of these services at all times. (FAC ¶ 28.)
Ceglia paid Zuckerberg the $1000 called for in the Agreement for the continued
development of The Face Book. Ceglia also paid Zuckerberg for the work on StreetFax.com,
some of which was used for The Face Book. (FAC ¶ 29.)
11

As a matter of law, the Agreement created a general partnership (defined above as
the “General Partnership”) between Zuckerberg and Ceglia. Zuckerberg’s and Ceglia’s
contributions to the General Partnership became, and would become, property of the General
Partnership. The fruits of those contributions — such as the creation of the software, program,
the purchase and design of a suitable website and business interests derived from the expansion
of that service or website to a larger audience — also became property of the General
Partnership. Further, as a result of the formation of the General Partnership, Zuckerberg and
Ceglia owed each other fiduciary duties of, among other things, candor, loyalty and good faith.
(FAC ¶ 30.)
After Zuckerberg and Ceglia signed the Agreement, they began to communicate
with each other concerning both the StreetFax.com project and The Face Book project. Those
communications occurred over the telephone and through the use of emails. In particular,
Zuckerberg and Ceglia communicated with each other concerning the design and functionality of
The Face Book website, various ways that they could generate income from The Face Book
website, various ways they could expand The Face Book to a larger audience beyond Harvard
University, and technical and other challenges in developing The Face Book website. FAC ¶ 31.
On July 30, 2003, Zuckerberg sent an email to Ceglia informing Ceglia that he wanted to
use the source code of StreetFax for The FaceBook. (FAC ¶ 32.)
On September 2, 2003, Zuckerberg sent an email to Ceglia informing him that he
anticipated having 300 people on the system. (FAC ¶ 33.)
On the same date, Ceglia responded and suggested the possibility of using Facebook as a
site to sell college merchandise. (FAC ¶ 34.)

12

Ceglia provided Zuckerberg an additional $1000 in November 2003. (FAC ¶ 35.)
On November 22, 2003, Zuckerberg sent Ceglia an email that read in the subject
line, “Urgent! Let’s Talk.” The email informed Ceglia that Zuckerberg was conducting
conversations with other students who were considering the same business as The Face Book.
(FAC ¶ 36.)
Communications between Zuckerberg and Ceglia concerning their development
of The Face Book and the website planned by the Harvard upperclassmen described in
Zuckerberg’s November 22, 2003 email continued through the balance of 2003. (FAC ¶ 37.)
On January 1, 2004, the date on which the The Face Book website was due to be
launched, Zuckerberg sent an email to Ceglia informing him that he was not able to launch it at
that time and requested not to be penalized for it. (FAC ¶ 38.)
Ceglia responded on the same day with an email explaining to Zuckerberg that he
could not remember the relevant terms of the Agreement and did not have access to it.
Consequently, he could not respond to Zuckerberg’s request for a waiver. Zuckerberg replied by
email to Ceglia, informing him that he would scan the Agreement and send it to him. (FAC ¶
39.)
On the same day, Ceglia then responded by email questioning the request. (FAC ¶ 40.)
Zuckerberg replied: “I’ll just get this site online as quickly as I can ...” (FAC ¶ 41.)
On January 5, 2004, Ceglia sent an email to Zuckerberg, asking him when The
Face Book website would be launched. (FAC ¶ 42.)

13

Zuckerberg responded on January 6, 2004, advising Ceglia that he would have
“something live for you to view soon.” (FAC ¶ 43.)
On January 13, 2004 and January 16, 2004, Ceglia and Zuckerberg exchanged
emails concerning the functionality of The Face Book’s website and whether they should adapt
the search engine built for StreetFax.com to it. (FAC ¶ 44.)
Recognizing that the delay in launching The Face Book website had the potential
to seriously dilute his interest in the venture, Zuckerberg sent an email to Ceglia on February 2,
2004, that claimed at the delay penalties were not fair and that he wanted to “return to 50-50
ownership.” (FAC ¶ 45.)
On February 3, 2004, Ceglia agreed to return to the “50/50 just as long as we start
making some money from this thing.” (FAC ¶ 46.)
After finally learning that Ceglia would waive the provision in the Agreement for
delivering The Face Book website late, Zuckerberg then informed Ceglia on February 4, 2004
that the website was live: “Paul, [¶] ‘thefacebook.com’ opened for students today, when you get
a chance take a look at it. I’ll let you know how it goes.” (FAC ¶ 47.)
Ceglia responded on February 4, 2004, congratulating Zuckerberg on the launch of the
site. (FAC ¶ 48.)
On February 6, 2004, Zuckerberg then writes to Ceglia and advises him that “the site is
cool as it is an I don’t care about making any money on it right now.” (FAC ¶ 49.)
Taken aback by Zuckerberg’s February 6 email, Ceglia responded that making money was an
important part of the program and that he thought that the site would be useful for the members

14

of the college to get important information but that the site needed to “get some advertising.”
(FAC ¶ 50.)
On April 6, 2004, Zuckerberg wrote Ceglia an email, representing to him that he
is considering abandoning The Face Book website, claiming he was too busy to work on it and
there was a lack of interest in it among students. (FAC ¶ 51.)
Ceglia responded almost immediately, claiming that the site should not be shut down.
(FAC ¶ 52.)
Contrary to Zuckerberg’s representations to Ceglia, and unknown to Ceglia,
thefacebook.com website was an immediate success and well received by the students at
Harvard. In fact, the website was so well received that other Harvard students and other
individuals expressed an interest in investing in the website and participating in its development.
Beginning with Zuckerberg’s February 6, 2004 email to Ceglia, Zuckerberg was intentionally
attempting to sour their business relationship in order to convince Ceglia to abandon it. (FAC ¶
54.)
On July 22, 2004, Zuckerberg wrote to Ceglia an email in which he claimed that he was
too busy with other businesses and that he offered to return to Ceglia the $2000 that Ceglia had
invested in the enterprise. (FAC ¶ 55.)
At the time Zuckerberg wrote his July 22, 2004 email, he had received or was
about to receive funding from angel investors and was in the process of meeting with venture
capital funds to provide additional capital. At no time did Zuckerberg inform Ceglia of these
facts. (FAC ¶ 56.)
On July 29, 2004, Zuckerberg either incorporated or participated in the

15

incorporation of an entity under the laws of the State of Delaware now known as Facebook, Inc.
Zuckerberg misappropriated the General Partnership’s (1) opportunity to expand the website and
the Face Book project beyond Harvard University students and (2) assets, and contributed themto
Facebook, Inc., but never informed Ceglia or accounted for them to the General Partnership or
Ceglia. To the contrary, Zuckerberg misrepresented to Ceglia that he was not continuing to work
on further development of The Face Book, further expanding of The Face Book to a larger
audience or commercializing The Face Book for profit. In exchange for contributing the General
Partnership’s assets to Facebook, Inc. and in taking the General Partnership’s opportunity for
himself, Zuckerberg received and/or was promised to later receive cash, stock, stock options,
restricted stock units and/or other consideration. (FAC ¶ 57.)
Ceglia never accepted a repayment of investment in The Face Book project and
never relinquished his 50% interest in the General Partnership. (FAC ¶ 58.)
STANDARD OF REVIEW
The standard of review under Rule 72(b)(3) to objections to the recommendations by a
Magistrate regarding a dispositive motion is de novo.
The standard of analysis by the Magistrate with regard to a dispositive motion is clear
and convincing.
Rule 1008 of the Federal Rules of Evidence provides that the existence of an asserted
writing and whether evidence of the content accurately reflects the content is a matter that “the
jury determines.”

16

The Seventh Amendment to the Constitution of the United States and Rule 38 of the
Federal Rules of Civil Procedure provide for the right to trial by jury and that that right,
according to Rule 38, “is preserved to the parties inviolate.”
Notwithstanding the conflicting testimony, expert opinions, and evidence, the Magistrate
suggests that this Court adopt his recommendations based upon his analysis in which he admits
that he “discusses only the evidence most favorable to defendants motions to dismiss and any
rebuttal evidence submitted by plaintiff.”
Plaintiff submits that when the Magistrate ruled on the authenticity of the contract at the
center of the litigation in order to determine whether a “case or controversy” actually exists, his
decision was necessarily dispositive of the merits of the dispute and he was therefore required to
treat the motion to dismiss as the Court would a Rule 56 motion or a Rule 12(b)(6) motion where
extrinsic evidence is considered by the Court. Consequently, the Magistrate should have treated
all the averments in the complaint as true (including the documents attached to it) and given
plaintiff the benefit of all reasonable inferences. This the Magistrate categorically failed to do.
He ignored the abundance of competent evidence which vitiated the defendants’ assertions of
fraud and proceeded, instead, to rule on the essential merits of the litigation under the guise of
deciding whether the Court has subject matter jurisdiction.
The Magistrate assessed his task as follows:
Defendants, by challenging the Work for Hire Document’s authenticity, have
injected a factual issue which, if decided in Defendants’ favor, would establish

17

there is no actionable case or controversy, such that the court is without
jurisdiction over the matter2.
R&R p.25 (emphases added).
He considered deciding the authenticity of the Work for Hire Document to be part and
parcel of his “obligat[ion] to establish jurisdiction exists.” Id. The document’s authenticity was
considered by him to be a “‘disputed jurisdictional fact’” to be decided “‘by reference to
evidence outside the pleadings, such as affidavits.’” Id. (quoting Filetech S.A. v. France
Telecom, S.A., 157 F.3d 922, 932 (2d Cir. 1998) (other internal quotation and citation omitted).
To establish jurisdiction, he reasoned, “‘the district court should resolve the disputed factual
matters by means of findings of fact.’” Id. Finally, the Magistrate cited authority for the
proposition that the Court may “consult evidence” to decide a Rule 12(b)(1) motion. R&R p.26.
The fundamental error in the Magistrate’s decision is summed up in the following
passage from his Report and Recommendation:
Accordingly, it is unquestionable that this court has the inherent authority to
resolve the disputed issue of the Work for Hire Document’s authenticity, an issue
of fact that is critical to establishing whether Plaintiff has presented an actionable
case or controversy over which the court may exercise its jurisdiction, that in
making such determination the court may rely on matters outside the pleadings ,
including ‘all submissions by the parties,’ and may, but is not required to, hold an
evidentiary hearing as necessary. Filetech S.A., 157 F.3d at 932. Neither
Plaintiff’s Seventh Amendment right to a jury trial, nor Rules 901 or 1008 of the
Federal Rules of Evidence pose any impediment to the court’s authority to resolve
the issue of the Work for Hire Document’s authenticity on Defendant’s Motion to
Dismiss. Moreover, such determination may be based on matters outside the
pleadings, including expert evidence submitted by the parties, aided by an
2

Were this type of analysis to spread, every case would be subject to a pretrial factual finding of
the ultimate facts by the court, resulting in a wholesale abolition of the Seventh Amendment.
18

evidentiary hearing only if necessary. Here, the court finds no such hearing is
necessary.
R&R pp.26-27.
The Magistrate’s understanding that he had the inherent authority to decide, as a matter
of fact, the central, underlying, factual dispute in the case – the authenticity of the Work for Hire
Document – in order to establish whether a case or controversy is both erroneous on its face, a
substantial and immediate to the jury system, and contrary to all controlling law. It is facially
erroneous because to hold that the District Court must find disputed facts that go to the heart of
the case or controversy to determine whether the case or controversy actually exists allows the
Court to act as a factual clearing house to decide which cases will be permitted to go to a jury.
The Court has the pretrial power to do this only under principles that are applicable to Rule 56
motions or, in appropriate circumstances, a Rule 12(b)(6) motion that is treated like the former.
In such cases, the Court decides whether, based upon the evidence, there exists a genuine issue
of material fact for the jury. As discussed below, the case law is clear that where a critical issue
of fact is bound up with the Court’s determination of its jurisdiction, that issue must be left for
the jury. At the very least, plaintiff submits, it must be decided in accordance with the
protections afforded by Rule 56.3/
While it is true that in proper cases the Court may look to extrinsic evidence under Rule
12(b)(1) and make findings to determine that subject matter jurisdiction exists, “[i]f satisfaction

3

Plaintiff has been unable to find any case in which the trial Court, when deciding
subject matter jurisdiction, determined that a case or controversy did not exist based upon the
judge’s view of the contested, ultimate facts of the case.

19

of an essential element of a claim for relief is at issue, however, the jury is the proper trier of
contested facts.” Arbaugh v. Y&H Corp. 546 U.S. 500, 514 (2006) (citing Reeves v. Sanderson
Plumbing Products, Inc., 530 U.S 133, 150-51 (2000). See also, Alliance for Environmental
Renewal, Inc. v. Pyramid Crossgates Co., 436 F.3d 82 (2d Cir. 2006):
If ... the overlap in the evidence is such that the fact-finding on the jurisdictional
issue will adjudicate factual issues required by the Seventh Amendment to be
resolved by a jury, then the Court must leave the jurisdictional issue for the trial.
Id. at 88.
The Supreme Court was particularly critical of the very approach taken by the Magistrate
here in Arbaugh, which the Court described as “drive-by jurisdictional rulings.”
On the subject-matter jurisdiction/ingredient-of-claim-for-relief
dichotomy, this Court and others have been less than meticulous. ... . Judicial
opinions, the Second Circuit incisively observed, “often obscure the issue by
stating that the court is dismissing ‘for lack of jurisdiction’ when some threshold
fact has not been established, without explicitly considering whether the dismissal
should be for lack of subject matter jurisdiction or for failure to state a claim.”
Da Silva [v. Kinsho International Corp.], 229 F.3d [358,] 361 [2d Cir. 2000)].
We have described such unrefined dispositions as “drive-by jurisdictional rulings”
that should be accorded “no precedential effect” on the question whether the
federal court had authority to adjudicate the claim in suit. Steel Co. [v. Citizens for
Better Environment], 523 U.S. [93,] 91 [(1998]).
Arbaugh, supra, 546 U.S. at 511
The Magistrate did not explain the rules that would circumscribe his decision other than
to acknowledge that defendants bore the burden to prove by clear and convincing evidence that
the Work for Hire Document was a forgery. He did not apply the standards which govern Rule
56 motions although he had the obligation to do at least that much.

20

Our holding that the clear-and-convincing standard of proof should be taken into
account in ruling on summary judgment motions does not denigrate the role of the
jury. It by no means authorizes trial on affidavits. Credibility determinations, the
weighing of the evidence, and the drawing of legitimate inferences from the facts
are jury functions, not those of a judge, whether he is ruling on a motion for
summary judgment or for a directed verdict. The evidence of the nonmovant is to
be believed, and all justifiable inferences are to be drawn in his favor.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 254 (1986). [Emphasis added.]
The Magistrate made a finding, which is utterly inexplicable in view of the quality and
quantity of evidence presented by plaintiff, when he found there was an “absence of any
evidence” by plaintiff to refute defendants’ claim that the Work for Hire Document is not
authentic. R&R pp.23-24. This can only be explained if the Magistrate either overlooked
plaintiff’s evidence or ignored it. The objections to the Magistrate’s findings which are set out
below are supported by the record evidence which he failed to accept as true and from which he
failed to draw justifiable inferences favorable to plaintiff, as he was required to do. Anderson v.
Liberty Lobby, supra.
The defendants rely entirely upon “expert” evidence, much of which is Daubertproscribed and contradictory, and the entirety of which was countered by Plaintiff’s experts. The
Magistrate chose to credit Defendants’ expert evidence and to discredit or ignore Plaintiff’s.
As the Magistrate recognized, the defendants had the burden to establish plaintiff’s
supposed fraud upon the Court by clear and convincing evidence. It has been held that expert
testimony alone is insufficient to meet that “high burden” under Rule 60(b)(3). Schiel v. Stop &
Shop Co., Inc., 2006 U.S. Dist. LEXIS 73508, *21 (D. Conn. Sept. 7, 2006). If affirmative
expert evidence is per se not clear and convincing, then, a fortiori, the evidence that was

21

submitted in opposition by Plaintiff’s experts, which is Daubert-qualified, required the
conclusion that defendants failed to meet their “high burden” of clear and convincing evidence.
Yet, the Magistrate concluded otherwise.
Further, the Magistrate clearly erred in his understanding of the clear and convincing
evidence standard and when conducting its de novo review, the Court should apply the correct
standard.
The Magistrate defined “clear and convincing” to mean “highly probable” (R&R p.29),
as requested by Defendants, rather than the more rigorous “no reasonable jury could find in favor
of the non-moving party” standard advocated by Plaintiff. The Magistrate erred in relying on
United States v. Chimurenga, 760 F.2d 400, 405 (2d Cir. 1985) because there, the moving party
failed to meet the high standard of clear and convincing, regardless of whether it was interpreted
to mean highly probable or that no reasonable jury could find in favor of the non-moving party.
The Magistrate ignored the cases cited by Plaintiff which define clear and convincing
consistent with Plaintiff’s definition (Doc. 610 par. 14-19). “Clear and convincing evidence” has
been defined in different settings involving civil litigation as well as in criminal cases and the
generally accepted definition is “‘evidence which produces in the mind of the trier of fact a firm
belief or conviction as to the truth of the allegations sought to be established, evidence so clear,
direct and weighty and convincing as to enable [the fact finder] to come to a clear conviction,
without hesitancy, of the truth of the precise facts in issue.’” United States v. Goba, 220 F.
Supp.2d 182, 188 (W.D.N.Y. 2002) (quoting Cruzan v. Missouri Dep't of Health, 497 U.S. 261,
285 n.11 (1990). See also, Parker v. Sullivan, 891 F. 2d 185 (7th Cir. 1989) (clear and
convincing evidence defined as “the quantum of proof which leaves no reasonable doubt in the

22

mind of the trier of fact as to the truth of the proposition in question” (citations and internal
quotation marks omitted)).
Fraud on the court, though not easily defined, can be characterized as a
scheme to interfere with the judicial machinery performing the task of impartial
adjudication, as by preventing the opposing party from fairly presenting his case
or defense. Kupferman v. Consolidated Research & Manufacturing Corp., 459
F.2d 1072, 1078 (2d Cir. 1972); England v. Doyle, 281 F.2d 304, 309 (9th Cir.
1960); see Annot., 19 A.L.R. Fed. 761 (1974). A finding of fraud on the court is
justified only by the most egregious misconduct directed to the court itself, such
as bribery of a judge or jury or fabrication of evidence by counsel, United States
v. International Telephone & Telegraph Corp., 349 F. Supp. 22, 29 (D.Conn.
1972), aff'd sub nom. Nader v. United States, 410 U.S. 919 [] (1973); 7 J. Moore,
FEDERAL PRACTICE P60.33, at 515 (2d ed. 1976), and must be supported by clear,
unequivocal and convincing evidence. Barr Rubber Products Co. v. Sun Rubber
Co., 425 F.2d 1114, 1120 (2d Cir.), cert. denied, 400 U.S. 878, 27 L. Ed. 2d 115,
91 S. Ct. 118 (1970).
In re: Coordinated Pretrial Proceedings in Antibiotic Antitrust Actions, 538 F.2d 180, 195 (8th
Cir. 1976) (emphasis added). It is significant that the Eighth Circuit relied upon the Second
Circuit’s decision in Barr Rubber Products Co. v. Sun Rubber Co., supra, stating that fraud on
the court “must be supported by clear, unequivocal and convincing evidence.” Further, “[l]ess
egregious misconduct, such as nondisclosure to the court of facts allegedly pertinent to the
matter before it, will not ordinarily rise to the level of fraud on the court.” International
Telephone & Telegraph Corp, supra at 29 (citing Kupferman v. Consolidated Research & Mfg.
Co., supra and England v. Doyle, supra, 281 F.2d at 310).
Defendants presented no uncontested, incontrovertible, undisputed, evidence which could
be said will leave no reasonable doubt in the mind of the trier of fact. Further, it is reasonable to

23

believe that a jury will believe Plaintiff’s experts, one of whom, the former chief forensic
scientist for the U.S. Secret Service, has attested to the Work for Hire contract’s authenticity.
The Magistrate’s error of law resulted in his recommendation that the complaint be
dismissed without finding that Defendants’ evidence would allow of no reasonable doubt in the
minds of a jury or that the evidence presented was so clear, direct and weighty and convincing
that a jury could come to a clear conviction, without hesitancy, of the truth of the facts asserted
by Defendants. Goba and Sullivan, supra. This fundamental error by the Magistrate brings his
Report and Recommendation in conflict with (a) Plaintiff’s 7th amendment rights; (b) the
“Physical Facts Rule” (Fortunato v. Ford Motor Company, 464 F. 2d 962 (2nd Cir. 1972); (c)
Fed. R. Civ. P. 12(b)(6) (requiring inferences to be drawn in favor of the non-moving party); (d)
Fed. R. Civ. P. 56 (“[i]t is true that the issue of material fact required by Rule 56(c) to be present
to entitle a party to proceed to trial is not required to be resolved conclusively in favor of the
party asserting its existence; rather, all that is required is that sufficient evidence supporting the
claimed factual dispute be shown to require a jury or judge to resolve the parties’ differing
versions of the truth at trial.” First Nat’l Bank of Arizona v. Cities Service Co., 391 U.S. 253,
288-89 (1968)); (e) Fed. R. Evid. 1008 (it is for jury to determine existence, originality and
evidence of content of an asserted writing); and (f) Fed. R. Evid. 901 (whether the proponent has
produced sufficient evidence to authenticate evidence), to name a few.
Application of the proper standard for “clear and convincing” evidence would have
prevented the Magistrate from considering inadmissible evidence. In considering what a jury
would reasonably do, the Magistrate could only consider evidence that would have been
presented to such jury. This should have precluded the Magistrate’s reliance on numerous,

24

inadmissible, non-Daubert-qualified, expert opinions offered by Defendants (Doc. 50, 326, 327,
328, 329 & 330). “Under Daubert and its progeny, the district court must perform this
gate-keeping function to ensure that ‘any and all scientific testimony or evidence admitted is not
only relevant, but reliable.’ Daubert [v. Merrell Dow Pharms.], 509 U.S. [579,] 589 [(1993)].”
Arista Records LLC v. Usenet.com, Inc., 633 F. Supp. 2d 124 (S.D.N.Y. 2009).
Plaintiff was not obligated to request a Daubert hearing, as the Magistrate suggested
(R&R p.50 n.30), because the Court had previously assured the parties that “[The experts] will
either agree or disagree, and the methodology they will use is, for want of a better term, and
scientific, if you will, Daubert qualified, scientific, reliable, accepted within the field,
methodology for making such tests.” (6-30-11 Hearing T.91:24-92:6). The Magistrate erred by
accepting non-Daubert-qualified expert opinions, contrary to the rule he had established. This
could – and should – have been remedied by an evidentiary hearing given the Magistrate’s
intention to give such preclusive weight to Defendants’ experts, especially Lesnevich, who
stands alone in his opinion that multiple Work for Hire contracts exist. Plaintiff chose not to
perform certain tests that would not pass Daubert scrutiny, based on the Magistrate’s assurance
that the experts’ methodologies would be Daubert-qualified and he was, therefore, prejudiced by
the Magistrate’s error.
When reviewing plaintiff’s objections, “[t]he district judge must determine de novo any
part of the Magistrate judge’s disposition that has been properly objected to. The district judge
may accept, reject, or modify the recommended disposition; receive further evidence; or return
the matter to the Magistrate judge with instructions.” Fed. R. Civ. P. 72(b)(3).

25

Plaintiff respectfully submits that defendants did not meet their burden to show the Work
for Hire Document was not authentic by clear and convincing evidence and the Magistrate
clearly erred when he found they had done so. In so doing, he violated plaintiff’s Seventh
Amendment right to a trial by jury of the central fact issue in this case.
ARGUMENT
I.
CONTRARY TO THE ASSERTION OF THE MAGISTRATE, FEDERAL
RULE OF EVIDENCE §§ 901 AND 1008 ESTABLISH THE AUTHENTICITY OF
THE CONTRACT AND REQUIRE THAT THE CONTENTS IS A FACTUAL
MATTER TO BE DETERMINED BY THE JURY
The Magistrate has plainly misconstrued the applicability of rule 901 and 1008 to the
facts in this particular case. Rule 901(b) specifically states that the illustrations that the examples
of evidence that “satisfies the requirement” of authentication and identification are the testimony
of a witness with knowledge that the items is what it is claimed to be and 901(b)(3) a comparison
by an expert witness with an authenticated specimen. In this case, the plaintiff has averred that
the contract is genuine, satisfying 901(b)(1). In addition, the expert witnesses have averred that
the contract is genuine. The Magistrate ignored both 901(b)(1) and 901(b)(3).
The Magistrate misconstrued Rule 1008. According to the Magistrate, the requirement
that the existence of an asserted writing and evidence of the contents are jury questions applies
only during the course of a trial, but not before. This is directly contrary to the Note explaining
that 1008 to be an addition in order to prevent the situation where the judge would decide a
“central issue” “without ever going to a jury.” “The latter portion of the instant rule is designed
to insure treatment of these situations as raising jury questions.” Fed. R. Evid. 1008, advisory
comm. nn. The misinterpretation by the Magistrate would completely subvert 1008 by the

26

simple expedience of withdrawing these issues from the trier of fact before the trial starts, the
very same danger warned of by the Advisory Committee Notes.
III.

THE MAGISTRATE ERRED IN FAILING TO APPLY
THE CORRECT STANDARD OF REVIEW FOR SPOLIATION

As stated, the standard of review by the District Judge to review the Magistrate’s finding
that plaintiff engaged in the spoliation of evidence is de novo. Although the Court has the
inherent power to impose sanctions, that power is to be exercised with caution and restraint and
must comply with the mandates of due process, particularly where the most severe sanction of
dismissal is imposed. Chambers v. Nasco, Inc., 501 U.S. 32, 50 (1991). Dismissal is appropriate
if there is a showing of willfulness, bad faith, or fault on the part of the sanctioned party. West v.
Goodyear Tire & Rubber Company, 167 F.3d 776, 779 (2d Cir. 1999). “However, because
dismissal is a drastic remedy, it should be imposed only in extreme circumstances, usually after
consideration of alternative, less drastic sanctions.” Id. (citation and internal quotation omitted).
In this case, the Magistrate failed to discharge that responsibility by crediting
incompetent and controverted expert evidence and ignoring the competent, admissible evidence
that (1) plaintiff had not spoliated relevant evidence; (2) evidence which was supposedly “lost”
had actually been previously produced to Defendants and they were not, therefore, prejudiced;
and (3) the loss of any evidence is not attributable to Plaintiff. Given the absence of evidence to
support these criteria, there was no basis to find willfulness, bad faith or fault on Plaintiff’s part
sufficient to warrant dismissal.

27

A party seeking sanctions based on the destruction of evidence must establish that (1) the
party having control over the evidence had an obligation to preserve it at the time it was
destroyed; (2) the evidence was destroyed with a culpable state of mind; and (3) the destroyed
evidence was relevant to the party’s claim or defense such that a reasonable finder of fact could
find that it would support the claim or defense. Chin v. Port Auth. of New York & New Jersey,
685 F.3d 135, 162 (2d Cir. 2012). When deciding these issues, the Court’s discretion is subject
to reversal for “errors of law and clearly erroneous assessments of evidence.” Id. (citation
omitted). Plaintiff submits that the Magistrate’s recommendation is erroneous as a matter of law
and resulted from a manifestly erroneous assessment of the evidence before him. In short, the
Magistrate was not constrained by caution and restraint (Chambers, supra, 501 U.S. at 50) and
he imposed the most severe sanction of dismissal without the due process protections to which
plaintiff was entitled.4/ This is best exemplified by the Magistrate’s acknowledgment in the
Report and Recommendation that he discusses only the evidence “most favorable” to the
Defendants and “any relevant rebuttal evidence submitted by Plaintiff.” R&R p.32 (emphasis
added). This turned the burden of proof on its head and lead him to an erroneous assessment of
evidence which, in turn, lead him to the errors of law that resulted in his recommendation to
dismiss the complaint.

4

Plaintiff was denied effective discovery when the magistrate entered an order restricting
discovery so that he could render a decision on the limited, but ultimate, question of the
authenticity of Plaintiff’s Work for Hire contract He repeatedly refused Plaintiff the opportunity
to depose Defendant Zuckerberg, refused Plaintiff’s experts access to Defendants’ computers,
refused to require Defendants’ experts to produce their underlying notes and data upon which
they based their opinions, and refused to consider the spoliation of important evidence by
Defendants that Plaintiff’s experts had found and documented.

28

Just as importantly, although the Magistrate viewed and skewed the evidence favorably
to Defendants, his finding still did not satisfy the three elements needed to support a finding of
spoliation which warrants dismissal.
The Magistrate’s preferential consideration of Defendants’ experts’ opinions and the
disregard of the opinions of Plaintiff’s highly qualified experts on the critical issue of the
authenticity of the Work for Hire Document which are based on objective, scientific facts,
requires the conclusion that the Magistrate’s assessment of the evidence was one-sided and
clearly erroneous. The truncated discovery which was designed for the benefit of Defendants,
followed by the Magistrate’s recommendation to dismiss the complaint for fraud, fell far short of
the “opportunity to be heard in a proper contest” to which Plaintiff was entitled. Universal Oil
Products Co. v. Root Refining Co., 328 U.S. 575, 580 (1946).
Although there is a substantial body of unassailable evidence, including some from
Defendants’ own experts, that relevant evidence had not been lost because it was previously
produced, the Magistrate chose instead to speculate that relevant evidence may have been lost
and that the loss was attributable to Plaintiff’s acts. Apart from the clear error in the Magistrate’s
analysis, defendants failed to show that the unavailable evidence “would have been of the nature
alleged by the party affected by its destruction.” Residential Funding Cor. v. DeGeorge
Financial Corp., 306 F.3d 99, 108-09 (2d Cir. 2002) (internal quotation and citation omitted).
“‘[R]elevant’ in this context means something more than sufficiently probative to satisfy Rule
401 of the Federal Rules of Evidence.” Id.
The Magistrate erroneously found five incidents of spoliation for which he held Plaintiff
responsible. The first was the failure to produce a second Work for Hire contract which the
Magistrate erroneously found to exist (R&R pp.121-22); second, was damage to (“baking”) the

29

original Work for Hire contract (R&R 122-33) which, the evidence shows, was attributable to the
actions of Defendants’ experts; third, was missing USB drives (R&R 133-137), although some
were never owned or used by Plaintiff and the others likely contained evidence that was already
produced; fourth, was the reinstallation of a Windows operating system (R&R 137-140) onto a
computer to which Plaintiff did not have access, by someone other than Plaintiff, and whose hard
drive had already been examined and copied by Defendants; and fifth, was the supposed deletion
of electronic copies of the Work for Hire contract and “other electronic evidence” (R&R 14043).
A. The Evidence Shows that “Multiple Versions” of the Work for Hire
Contract Did Not Exist.
At R&R, p.121, the Magistrate found that two versions of the Work for Hire Document
existed but that Plaintiff had produced only one. The Magistrate’s error in considering the
evidence “most favorable” to the Defendants is readily apparent here. Not only did he accept all
the material opinions by Defendants’ expert Lesnevich (at R&R pp.75-86), but his R&R is
replete with his own purely speculative notions about what the evidence could mean in order to
reach the conclusions sought by Defendants and their expert.5/ At the same time, he essentially
dismissed the well-founded opinions of Plaintiff’s expert, James Blanco.6/

5

At footnote 52 in R&R p.77, the magistrate “conceives” an elaborate series of possible
explanations for what he and Defendants speculate Plaintiff might have done: “one plausible
explanation”; “could have been created”; “would then have presented”; “would have
appreciated”; “could have printed”; “would have perceived.”
6

Not only did the magistrate discuss only Defendants’ most favorable evidence, he went
further and allowed Defendants to submit Supplemental Expert Reports, over Plaintiff’s
objections, in violation of his April 6, 2012 Order, which were intended to rebut the relevant
rebuttal evidence from Plaintiff the magistrate says he considered. This compounded the
unfairness inherent in considering Defendants’ most favorable evidence and then permitting
30

·

James Blanco’s Declaration (Doc. 459 at pp. 27-37) factually refutes the multiple
versions theory proposed by Defendants’ expert Lesnevich and accepted by the
Magistrate 7/.

·

Plaintiff’s First Motion to Compel (Doc. 390) was denied even though it
requested (a) all reports documenting Defendants’ experts’ findings, as required
by the magistrate’s Order (Doc. 83), and (b) access to the data underlying
Defendants’ expert reports. Plaintiff has been denied access to this evidence even
though it is essential to expert discovery. Fed. R. Civ. P. 26(a)(2)(B). Yet, the
unsupported test results by Defendants’ experts are the bases for the magistrate’s
recommendation to dismiss the complaint.

In his R&R, the Magistrate states that Defendants’ expert Lesnevich’s findings were
“unsuccessfully rebutted by Plaintiff, see Discussion, supra, at 76-86, establish that multiple
copies of the Work for Hire Document were created,” and “the evidence persuasively establishes
that other versions of the Work for Hire Document did exist, but have not been produced. At
page 86, the Magistrate made the following finding:
Accordingly, the handwriting analysis performed by Blanco, as reported in
the Blanco Report, fails to establish the authenticity of the Work for Hire
Document. In contrast, the findings in the Supplemental Lesnevich Report
support Defendants’ argument that Zuckerberg’s initials and signatures on the
Work for Hire Document were forged.
Id. (emphasis added).

them to sur-rebut Plaintiff’s rebuttal with supplemental reports. This did not meet the due
process requirement of allowing Plaintiff to be “heard in a proper contest.” Universal Oil
Products Co. v. Root Refining Co., supra, 328 U.S. at 580.
7

Mr. Blanco’s impeccable credentials are described at pp.1-2 of his declaration (Doc. No.
459). He has rendered expert opinions regarding questioned documents on over 7,000 occasions,
has qualified and testified as an expert witness concerning questioned documents in excess of
two hundred times in both federal and superior courts in numerous States and also abroad in
Mexico, Singapore, and the High Court of South Africa. He has never been prevented from
testifying in any jurisdiction.

31

This finding by the Magistrate is clearly erroneous for several reasons. First, it is the
finding of forgery upon which the fraud on the Court argument is based and it must, therefore, be
based on clear and convincing evidence. The best the Magistrate could find was that the
Lesnevich Report “supports” Defendants’ argument. One would expect a party’s expert’s report
to do at least that much, but it does not come close to finding the disputed fact by clear and
convincing evidence. Second, it illustrates the harm caused by the erroneous burden with which
the Magistrate saddled the Plaintiff by “discuss[ing] only the evidence most favorable to
Defendants’ Motion to Dismiss and any relevant rebuttal evidence submitted by Plaintiff.”
Defendants were not entitled to a booster seat from which to present their evidence and the
Magistrate should not have considered “rebuttal evidence” without regard to the affirmative
evidence Plaintiff presented which independently shows the authenticity of the Work for Hire
contract, as well as the affirmative evidence of Defendant Zuckerberg’s fraud.8/ While
Plaintiff’s evidence was sufficient to defeat the fraud on the court claim as a matter of law, it was
also sufficient to defeat the notion that there were “two different physical versions of the Work
for Hire Document” and that for some unexplained reason, that “fact” is somehow evidence of an
act of spoliation or destruction.
There was nothing presented from which the Magistrate could conclude – and indeed he
did not conclude – that the existence of two Work for Hire contracts (1) constituted the
destruction of evidence with (2) a culpable state of mind and (3) that any destroyed evidence was

8

Plaintiff submits that the mere consideration of Plaintiff’s “rebuttal evidence” against
the Defendants “most favorable” evidence could not have allowed the magistrate to conclude
that the Work for Hire Contract was a forgery. Schiel v. Stop & Shop Co., Inc., supra, 2006 U.S.
Dist. LEXIS 73508, *21 (D. Conn. Sept. 7, 2006) (expert testimony alone is insufficient to meet
“high burden” of clear and convincing evidence under Rule 60(b)(3)).

32

relevant to Defendants’ defense such that a reasonable finder of fact could find that it would
support the claim or defense. Chin v. Port Auth. of New York & New Jersey, supra, 685 F.3d at
162.
The evidence presented by Plaintiff effectively rebutted even the “evidence most
favorable to Defendants” that the Magistrate considered exclusively.
B. Damage to the Work for Hire Document
The Magistrate erroneously found that the Work for Hire Document was damaged by
Plaintiff (R&R p.122), whereas the overwhelming, documented evidence supports the conclusion
that the discoloration of the Work for Hire Document was caused by Defendants’ experts’
malfeasance or gross negligence in handling that critical piece of evidence during their testing in
Buffalo, New York. Plaintiff filed a Motion for Spoliation by Defendants (Doc. 214), seeking
sanctions against Defendants for spoliation of the Work for Hire contract. At the hearing on that
motion the Magistrate concluded that the discoloration did not mean the document was spoliated.
(12/13/11 Hearing Transcript at T.184:14-25). Nonetheless, in his R&R, the Magistrate, in a
dramatic reversal, decided that the Work for Hire contract was spoliated because of the
discoloration. The Magistrate failed to address evidence presented in Plaintiff’s spoliation
motion (Doc. 189, 214) and that Defendants’ experts were responsible for the spoliation and,
instead, he erroneously concluded it had been spoliated and Plaintiff was responsible for it. In so
doing, he ignored the substantial contrary evidence presented by Plaintiff referred to in James
Blanco’s Declaration in opposition to Defendants’ motion to dismiss (Doc. 459, ¶¶ 169, 172,
173, 174, 175, 176.)
Plaintiff’s expert, Larry Stewart, the former Chief, Questioned Document Branch and
Laboratory Director/Chief Forensic Scientist for the United States Secret Service, also submitted
33

a declaration (Doc. 416 ¶¶ 26-30, 39-39, 41-43.) in which set out the facts showing that the
defendants were responsible for the spoliation of the document.
After reciting and documenting facts in further support of his opinion, Mr. Stewart states:
“This leads to the logical conclusion that the discoloration and deterioration of the Facebook
Contract occurred as a result of the work conducted in Buffalo by the Defendants’ experts.” Id. ¶
53.
The Magistrate simply chose to ignore or disregard this evidence. He criticizes Blanco
for not performing a test to replicate the damage caused by Defendants’ experts’ overexposure of
the Work for Hire document to intense light. R&R p.129 n.70. In fact, Blanco did perform such
a test and it confirmed his opinion. (Doc. 459 ¶¶ 182, 183.)
Blanco’s declaration (Doc. 459), Stewart’s declaration (Doc. 416), and Paul Argentieri,
Esq.’s declaration (Doc.193), all establish that Defendants’ experts damaged the Work for Hire
Document by Tytell’s and Lesnevich’s overuse of two VSC machines for approximately 18
hours on July 14 and July 15, 2011. In spite of this evidence, the Magistrate relied upon the
report and declaration of Tytell (R&R 125), even though Tytell is not qualified as either an ink or
videograph expert (Doc. 330, p.3) and Tytell had every reason to misrepresent the facts given
that the evidence documents his responsibility for the damage caused the document and Tytell
and Lesnevich never produced a report of the results of their 18 hours of excessive UV exposure
that damaged the Work for Hire contract.
Even if the Magistrate had not clearly erred by refusing to credit Plaintiff’s substantial
evidence that Defendants’ experts were responsible for “baking” the Work for Hire contract,
there is nothing to support the conclusion that the yellowed contract somehow amounted to
spoliation of evidence where the document was nonetheless able to be examined by Defendants’

34

experts and they were able to render opinions as to its authenticity, flawed as those opinions may
be. In other words, without a finding of destruction of evidence relevant to Defendants’ defense,
there cannot be a finding of sanctionable spoliation. Chin v. Port Auth. of New York & New
Jersey, supra, 685 F.3d at 162.
C. The Missing USB Drives
The Magistrate erroneously found that Plaintiff willfully destroyed six USB devices.
Defendants failed to present proof that the six USB drives were all either owned by, accessed by,
or within the custody or control of Plaintiff. Thus, Defendants failed to show that Plaintiff had
control over the USB drives. Chin v. Port Auth. of New York & New Jersey, supra, 685 F.3d at
162.
USB devices are computer-removable devices. Anyone can easily insert one into a
computer and remove it after downloading data, leaving an electronic record of having done so.
The fact that USB devices were inserted into Plaintiff’s or his father’s computer is indicative of
nothing but that fact. Given the fact that the Magistrate found that the only ostensibly relevant
data were two files which were likely produced to defendants vitiates any claim of prejudice or
that relevant evidence was destroyed. Again, there is nothing to support a sanctionable act of
spoliation by the Plaintiff under Chin v. Port Auth. of New York & New Jersey, supra.
D. The Reinstallation of the Windows Program
The Magistrate erroneously found that the reinstallation of a Windows operating program
on Plaintiff’s parents’ computer was an act of spoliation by Plaintiff warranting dismissal of the
complaint.
Although the evidence utterly fails to disclose destruction of evidence by Plaintiff, there
is, again, no evidence that evidence relevant to Defendants’ defenses was destroyed (because

35

they have it) and the spoliation finding by the Magistrate was erroneous. (Broom Decl. Doc 417
at 33.)
E. The Supposed Deletion of Electronic Copies of the Work for Hire
Document and other Electronic Evidence.
The Magistrate erroneously concluded that “Plaintiff’s failure to produce such copy [of
the Work for Hire Document], and Stroz Friedberg’s inability to locate one, can only be
explained by Plaintiff’s destruction or concealment of the electronic copy,” (R&R 140), even
though the Magistrate’s knowledge of “such copy” derives directly from Plaintiff’s production of
an identical electronic copy. The Defendants presented no proof that additional electronic copies
existed other than from the source from which they were actually obtained. The Magistrate,
relying upon Defendants’ rank speculation, concluded that spoliation which requires dismissal of
the complaint had occurred.
The Magistrate erred in relying on Defendants’ expert Stroz Friedberg’s claim that
additional relevant electronic files were deleted while this action was pending, based on the
alleged “last accessed” dates.
·

Plaintiff’s computer forensic expert, Jerry Grant, explained that, “Microsoft
generally discredits the reliability of the ‘last accessed’ timestamp, since it is
easily altered by system operations that are not directly user-initiated.” Doc. 418
¶ 8.

·

Defendants’ experts Stroz Friedberg have published the same opinion, that
“metadata are generally only as accurate as the underlying computer clock time”
(Id.), which, incredibly, was unknown to Stroz Friedberg’s expert Rose. (Doc.
498 T.251:7-13).

Contrary to the Magistrate’s findings, the evidence shows that Defendants were not
denied production of any email account or potentially relevant emails.
·

As soon as Plaintiff was made aware of additional, potentially relevant, email
accounts, he gave Defendants full access, as explained in Plaintiff’s declaration.
36

(Doc. 310-6). Defendants’ expert Stroz Friedberg acknowledged they “received
data from this [[e-mail]] account from Yahoo!” (Doc. 325
p.48). No data was lost.
The Magistrate further erred by concluding that the absence of emails proves emails were
deleted, without any evidence that emails were actually sent from Plaintiff’s account, much less
that he sent emails that are relevant to this case.
The Magistrate’s Report and Recommendation is bereft of evidence sufficient to support
the drastic remedy of dismissal. Yet, “a court should never impose spoliation sanctions of any
sort unless there has been a showing – inferential or otherwise – that the movant has suffered
prejudice.” In re Pfizer, 2013 U.S. Dist. LEXIS 2850, *49 (S.D.N.Y. January 8, 2013) (citation
and internal quotation omitted). The absence of prejudice can be shown by demonstrating that
the other party was able to obtain the same evidence from another source. Id. at *50 (quoting
R.F.M.A.S., Inc. v. So, 271 F.R.D. 13, 24-25 (S.D.N.Y. 2010). Here, the facts clearly establish
an absence of prejudice. That essential ingredient cannot be satisfied by resort to speculation and
wishful thinking. There was insufficient evidence to support the Magistrate’s recommendation
to dismiss the complaint because the essential standards enunciated in Chin v. Port Auth. of New
York & New Jersey, supra, 685 F.3d at 162, are absent.
IV.

SPECIFIC OBJECTIONS
A. Objection to Magistrate’s Finding that the StreetFax Document is
Authentic

Plaintiff objects to the Magistrate’s finding that the StreetFax Document is the authentic
agreement between Plaintiff and Zuckerberg. R&R p.48. This is plainly refuted by the
Declaration of James Blanco, Doc. 459, pp. 90-91; Doc. 417, pp. 21-24.

37

B. Objection to Magistrate’s Finding that the Work for Hire Documents
and Supporting Emails are Fraudulent.
Plaintiff objects to the Magistrate’s finding that Defendants have established that the
Work for Hire contract and supporting emails are fraudulent. R&R p.49.
The Magistrate found that the Work for Hire contract and supporting emails are
fraudulent because he first found – erroneously – that the StreetFax document is authentic and
that finding “requires finding fraudulent both the Work for Hire Document and the supporting emails ... .” In addition, he found his first finding to be essentially superfluous because, he
concluded, the evidence “clearly and convincingly establishes the fraudulent nature of the Work
for Hire Document and supporting e-mails.” Id. The evidence does not support the findings and
the Magistrate erred by using an incorrect standard of review and proof.
1.
·

The Work for Hire Contract is not Fraudulent

The Magistrate erroneously found that Plaintiff “failed to rebut LaPorte’s inkdating of the ballpoint ink used for the handwritten notations on the Work for Hire
Document, such that LaPorte’s conclusion that it is highly probable the ink is less
than two-years old and, this, could not have been placed on the Work for Hire
Document on April 28, 2003 is unchallenged.” R&R p.61. Plaintiff presented
compelling evidence that Defendants did not and could not prove the fact found
by the Magistrate.
·

Defendants’ expert Lyter concluded the “TLC results were not useable and
[he] could not perform ink identification, TLC Densitometry or Relative
Aging,” (Doc. 328 p.9) and LaPorte concluded the ink formulation could
not be determined. Doc. 326 p.25.

38

·

Plaintiff’s expert Stewart found that “it is not possible to perform ‘ink age’
determination on the Facebook Contract.” Doc. 416-3 at 23.

·

The Magistrate erroneously concluded that “inconsistencies with the fonts,
typesetting, and formatting observed between pages 1 and 2 of the Work for Hire
Document, absent satisfactory explanation by Plaintiff, call the document’s
authenticity into question.” R&R p.64 (emphasis added). The Magistrate applied
the wrong standard and made factual findings that are exclusively within the
province of the jury. Plaintiff’s expert Blanco concluded that “the difference in
font between page 1 and page 2 is readily explained by the common occurrence
that when documents are pieced together by means of ‘cutting and pasting’
sections from other source documents, the fonts of those other sections that were
cropped from other documents come along in the transposition and when inserted
into sections of the new document being created, may or may not match the other
fonts of the document being typed.” Doc. 459 pp.91-92 (citing relevant technical
authorities in addition).
·

Blanco concluded that the font (or typestyle) of page 1 is obviously
different than the font of page 2 and this is merely indicative of a
layperson creating a contract on his own and “does not provide indicia of a
forged document.” Doc. 459 p.89.

·

The Magistrate erroneously concluded that, with respect to the disputed facts
relating to the use of the same printer, paper and toner for both pages of the Work
for Hire contract, “Plaintiff’s argument on this issue does not require Defendants’
motion be denied.” R&R p.69. This implies use of a standard not remotely akin

39

to clear and convincing evidence and further, it placed the burden of proof on
Plaintiff. The evidence did not permit the Magistrate to find as he did.
·

Plaintiff’s expert Walter Rantanen concluded “[t]he fiber content of the
two vials is consistent with coming from the same mill and production
run.” Doc. 421 p.2.Plaintiff’s expert Larry Stewart found “[t]est results
indicate the toner found on page 1 matches that found on page 2,” and
“[e]xhaustive chemical and physical testing failed to detect differences
between the toner samples.” Doc. No. 416 p.24.

·

Stewart also found from physical analysis that “both pages 1 and 2 ... were
printed with an office machine that utilized toner, e.g. a laserjet printer”
Doc. 416 p.23.

·

Blanco concluded that “[c]ontrary to [Defendants’ expert] Romano’s
claim, my Figure 8 and Figure 9 photographic enlargements are produced
here to demonstrate that there is no perceivable difference in ‘edge
definition’ as alleged by Romano.” Doc. 459 p.23.

·

The Magistrate erroneously found that nothing in the record establishes that
Defendants’ fraud argument is predicated on the “page 1 substitution theory
articulated by Defendants’ experts” (R&R pp.72-73) and that “Blanco’s staplehole theory is not probative of anything relevant to the authenticity of the Work
for Hire Document.” R&R p.75.
·

Plaintiff was not required to prove the authenticity of the Work for Hire
contract in this proceeding.

·

Defendants were required to prove that the Work for Hire was a fake by

40

clear and convincing evidence. The history in this case is clear that
Defendants pursued a “page 1 substitution theory” in this case until the
evidence accumulated to belie that fact. The Defendants’ substitution
theory was advanced by their experts in the manner set out – and refuted –
in Larry Stewart’s declaration. Doc. 416 ¶¶ 158-181. The Magistrate
erred in finding that “nothing in the record establishes that Defendants’
fraud argument is predicated on the page 1 substitution theory ... .” R&R
pp.72-73.
·

The Magistrate’s decision makes clear that he disregarded Plaintiff’s
evidence because it did not prove to his satisfaction the Work for Hire
contract was authentic when he should have assumed the truth of
Plaintiff’s evidence and given Plaintiff the benefit of all reasonable
inferences to be drawn therefrom.

·

Blanco concluded that “[t]he staple holes and secondary staple hole
impressions/detent marks of page 1 of the Facebook Contract match the
staple holes and secondary staple hole impressions/detent marks of page 2
of the Facebook Contract,” demonstrating that the two pages were stapled
only once, at the time they were stapled together. Doc. 459 p.88.

·

Blanco concluded the evidence does not support any theory that page 1
was attached to page 2 with a staple by hand. Id.

·

Stewart concluded “after a thorough and exhaustive forensic testing” there
is no indication the Work for Hire contract is “anything other than
genuine. Doc. 416-3 p.21.

41

·

The Magistrate used an erroneous standard by finding that Plaintiff’s expert failed
to establish the authenticity of the Work for Hire contract – which was not his
duty to so – and that Defendants’ expert’s findings “support Defendants’
argument that Zuckerberg’s initials and signatures on the Work for Hire
Document were forged.
·

Plaintiff’s expert Blanco performed detailed analyses of the documents
and concluded they were four different copies of the same document.
Doc. 459 p.27.

·

Blanco concluded that Zuckerberg’s signature “was written rapidly
revealing free flowing and spontaneous rhythm” and there was “no
evidence of a trace forgery.” Doc. 459 p.38.

·

Blanco concluded the handwriting in the questioned “MZ” initials
“represent the natural, normal and genuine handwriting characteristics of
Mark Zuckerberg as demonstrated by his EXHIBIT 19 known specimen
initials.” Doc. 459 p.46.

·

Blanco concluded the Work for Hire contract “is an authentic, unaltered
document.” There is no justification or support for Defendants’ theory of
a page 1 substitution, forgery or fraud. Doc. 459 p. 232.

·

The Magistrate’s finding that Plaintiff referred to his company as “StreetFax
LLC” before the company filed to become an LLC “does point toward
determining the document is fraudulent.” R&R pp. 86-87.
·

Although the Magistrate acknowledged that this fact alone was not
sufficient to find the Work for Hire document a forgery, its weight is so

42

slight that it does not nudge the evidence into the realm of clear and
convincing as required, especially in light of the substantial evidence
presented by Plaintiff that the Work for Hire contract is authentic. The
Magistrate contemplated that the LLC reference could have signified
Plaintiff’s intention to incorporate the business. R&R p. 87 n. 55.
Although the Magistrate elsewhere surmises about how Defendants’
evidence could support the Defendants’ arguments (R&R p. 77 n. 52), he
does not give Plaintiff the same benefit.
·

The Magistrate’s finding that other versions of the Work for Hire contract were
backdated by Plaintiff is not supported by clear and convincing evidence for the
reasons stated below, where back-dating and formatting anomalies are shown to
have been addressed by Plaintiff’s experts.

·

The Magistrate’s findings with respect to the use of a “hex editor” (R&R p.94) are
inconclusive precisely because Defendants’ evidence is vague and inconclusive
regarding the subject. Whether or not a hex editor was used by Plaintiff for some
undetermined reason or reasons is not evidence, much less clear and convincing
evidence, that the Work for Hire contract is not authentic, especially given the
countervailing evidence presented by Plaintiff.
2.

·

Plaintiff’s “Supporting E-mails are not Fraudulent

Plaintiff objects to the Magistrate’s finding (R&R p.108) that Defendants have
established it is “highly probable or reasonably certain that the supporting e-mails
were created on a computer with a back-dated system clock.”
·

The Magistrate acknowledges that the UTC time zone stamps are
43

indicative of an incorrectly set system clock and do not necessarily
indicate fraud. R&R 107 n.65.
·

Despite the finding that the computer on which the Seagate Hard Drive
was not produced by Plaintiff, the evidence shows that the computer was
an HP Pavilion computer that belonged to Vera and Carmine Ceglia and
Plaintiff did not own, use or control it. Doc. 417 p.5 (Broom
Decl.).Anomalies in computer forensics is a neutral term denoting an
unexpected finding and is not, of itself, indicative of fraud. Id. p.26

·

Defendants cite anomalies in Sidley Austin’s servers which they simply
explain away as a server with the time correctly set but the time zone
incorrectly entered, but where similar anomalies appear to work in
Defendants’ favor, they are not similarly dismissed, but instead are
considered to indicate fraud.

·

The Magistrate’s practice of considering only Defendants’ most favorable
evidence, not taking Plaintiff’s evidence as true and not affording Plaintiff
favorable inferences, lead him to erroneously conclude that emails with
incorrect dates or times signified deliberate “back-dating” by Plaintiff,
which is not supported by the evidence. Id. pp.25-30.

·

Plaintiff objects to the Magistrate’s finding that “numerous formatting
inconsistencies ... are best explained as indicative of fraud.” R&R p.111.
·

Plaintiff’s experts Jerry Grant and Neil Broom explained that the
formatting inconsistencies are not indicative of fraud (Doc. 418 ¶¶ 21 and
Doc. 417 p.31, respectively) and that Defendants’ experts had insufficient

44

information from which to draw their conclusions.
·

Grant’s examination of the floppy disks confirmed that copies of the
emails were were placed within MS Word files in 2003-2004, consistent
with Plaintiff’s sworn declarations. Doc. 418 ¶10.

·

The Magistrate could not conclude that Defendants met the burden of
clear and convincing evidence based on Defendants’ experts whose
opinions were directly refuted by Plaintiff’s experts, unless the Magistrate
did, as he said he would do, consider Defendants’ most favorable evidence
and then fail to credit Plaintiff with the facts established by his experts and
the inferences to which he was entitled.

·

Plaintiff objects to the Magistrate’s finding that “unexplained factual inaccuracies
are more evidence that the Work for Hire Document and the associated supporting
e-mails alleged by Plaintiff are recently created fabrications.” R&R p.112.
·

The Magistrate again erroneously placed the burden of proof on Plaintiff
and concluded that Plaintiff had not offered an explanation for the
Defendants’ contention that Plaintiff viewed TheFacebook website on the
morning of February 4, 2004, when the site did not go “live” until that
afternoon.

·

The Magistrate refers to Defendant Zuckerberg’s declaration (Doc. 29-2 ¶
25) in support of Defendants’ argument. Notably, Zuckerberg never stated
that TheFacebook went live on the afternoon of February 4, 2004. He
stated only that it was “launched” on that date.

·

The evidence one would have expected was a simple declaration by

45

Zuckerberg, under oath, that TheFacebook website was not launched until
the afternoon of February 4, 2004 and that it could not be viewed by
Plaintiff – whether it was “launched” or not and whether or not one was a
Harvard student – on the morning of February 4, 2004. Such a simple
assertion by Zuckerberg is conspicuously absent and, in addition, the
hearsay evidence by Defendants from third parties that the site went “live”
that afternoon is neither admissible nor relevant.
·

Plaintiff objects to the Magistrate’s finding that “the absence of such e-mails
[from the Harvard server and upon which Plaintiff relies] corroborates
Defendants’ assertions that the supporting e-mails purportedly from that period of
time were fake.” R&R p.115.
·

It both defies logic and serves to exemplify the Magistrate’s failure to give
Plaintiff the benefit of reasonable inferences for him to conclude that the
unexplained absence of all emails on Harvard’s server between Plaintiff
and Zuckerberg during the period from March 2003 until June 2003 – the
period during which Zuckerberg admits signing a contract with Plaintiff
and the inception of their relationship – “corroborates Defendants’
assertions” that Plaintiff’s emails are fakes.

·

Defendants’ experts Rose and McGowan are not certified fraud experts
(Rose Dep.Tr. 208 and McGowan Dep. Tr. 7). Plaintiff’s computer
forensics expert, Neil Broom, is a certified fraud expert. Doc. 417 at 2.

·

Rose’s testimony discloses the unexplained absence of emails from the
Harvard server during the critical time period and concludes that it does

46

not signify that Defendants have concealed evidence. R&R 115. That is
entirely beside the point. First, because Plaintiff did not have a burden to
prove the Defendants concealed evidence, but second, the suspicious
absence of all such emails cannot logically support the conclusion that
Plaintiff’s emails are fake. This is not clear and convincing evidence to
support the Magistrate’s finding regardless of how the burden of proof is
defined.
·

Plaintiff objects to the Magistrate’s finding that “stylistic differences [between
known and questioned emails] point to a highly probable conclusion that the
Questioned writings were not authored by Zuckerberg.” R&R p.118.
·

The methodology of Defendants’ expert Gerald McMenamin in the
specific report upon which Defendants rely was described by the president
of the International Association of Forensic Linguists, Ronald R. Butters,
as lacking “standards for reliability and methodology.” Doc. 481 pp.4950.

·

Whereas the Magistrate credited hearsay media reports to find that
Plaintiff could not have accessed TheFacebook website before the
afternoon of February 4, 2004, he is dismissive of Butters’ criticism that
McMenamin’s report is unreliable.

·

Although expert reports – especially questioned reports – are inadequate to
meet the clear and convincing evidence standard, the Magistrate decided
that McMenamin’s was not merely reliable, but supported his “highly
probable conclusion.” This was, by any standard a usurpation of the jury’s

47

function.
CONCLUSION
The Magistrate is recommending that this Court decide whether Ceglia is telling the truth
or Zuckerberg is telling the truth; whether Ceglia’s experts are telling the truth or Zuckerberg’s
experts are telling the truth; whether the contract is genuine or whether the contract is a forgery;
whether the emails are genuine or whether the emails are a forgery. These questions are classic
jury issues. The Court should not usurp the function of the jury nor substitute itself for that of
the jury.
For the reasons and authorities stated and based upon the complete record in this case, the
plaintiff respectfully submits that the Court should and must reject the recommendations of the
Magistrate, remand the case to another Magistrate for the scheduling of discovery, including the
deposition of Zuckerberg and then set the case for trial on the merits.
Respectfully submitted,
Dated: April 15, 2013
/s/ Paul A. Argentieri
Paul A. Argentieri
188 Main Street
Hornell, NY 14843
607-324-3232 phone
607-324-6188
Attorney for Plaintiff Paul D. Ceglia

48

CERTIFICATION PURSUANT TO LOCAL RULE 72(c)

I hereby certify that this Objection does not raise any new legal/factual arguments.

Dated: April 15, 2013
/s/ Paul A. Argentieri
Paul A. Argentieri
188 Main Street
Hornell, NY 14843
607-324-3232 phone
607-324-6188
Attorney for Plaintiff Paul D. Ceglia

49