New Yorker Paul Ceglia filed a complaint against Facebook and CEO Mark Zuckerberg on June 30th claiming he is entitled to ownership of about 84% of the company. Ceglia points to a contract allegedly signed by himself and the Zuck back in April of 2003. The problem with that is that Facebook’s lawyer, Lisa Simpson, isn’t sure whether a contract was ever signed. “Whether he signed this piece of paper, we’re unsure at this moment,” she told U.S. District Judge Richard Arcara. The document in question was produced in court this afternoon by Ceglia’s attorney, Terrence Connors.
Connors informed the judge that Ceglia was a web designer in those days, trying to develop a project he called “StreetFax.” His plan for the site was to throw millions of pictures of streets into a database and then charge insurers money to access it. He had the idea and the photos, but not a code monkey. Zuckerberg was the lowest bidder at $1000.00. He was a Freshman at Harvard at the time, and told Ceglia at the time that: “I’ve got a project of my own. I’m developing an online yearbook for Harvard kids now, but I’m thinking of expanding it.”
According to the Plaintiff, the contract was intended to cover the coding work Mark would do on StreetFax and Ceglia’s investment in the “fledgling project.” No one knew at the time, of course, that Facebook would grow to be the giant leader that it is today. Perhaps this is why Ceglia waited six years to even come forward?
If one is to believe the Plaintiff, the original contract found Zuck agreeing to complete the coding work in exchange for the thousand bucks plus 50% of the resulting entity – PLUS an additional 1% every day until the work was completed. This is where Ceglia comes up with his 84% ownership figure.
An interesting side note to this case is the one in which Ceglia and his wife find themselves as defendents in another NY courtroom. In an ongoing case against them brought by New York State Attorney General Andrew Cuomo, the couple has been accused of taking $200,000-worth of pre-orders for wood pellets and then failing to deliver the goods – or refunding the monies.
Many people speculate that the statute of limitations will apply in this case, and that Ceglia’s case will be thrown out of court. For now, though, a state judge has issued an order barring the transfer of ownership interests in the Palo Alto, California-based company. Ceglia’s attorney has asked Judge Arcara for an extension of that order.
What are your thoughts on this entire drama? Even if Zuck did sign the contract, does it mean that it should be honored six years later – now that Facebook is worth billions of bucks? Why did Ceglia wait all this time to file his complaint? I think I just answered my own question.