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Paul D. Ceglia v. Mark Elliot Zuckerberg

January 10, 2012


The opinion of the court was delivered by: Leslie G. Foschio United States Magistrate Judge



This case was referred to the undersigned by Honorable Richard J. Arcara on May 27, 2011 for pretrial matters. The action is presently before the court in response to ¶ 3 of the undersigned's Order filed September 28, 2011 (Doc. No. 152) directing Plaintiff to show cause why Defendants' request for sanctions pursuant to Fed.R.Civ.P. 37(a)(5), including costs and attorneys' fees, based on Plaintiff's failure to fully and promptly comply with court-ordered discovery (Doc. No. 128), should not be granted.


In this action, Plaintiff Paul D. Ceglia ("Plaintiff"), seeks a declaratory judgment enforcing a contract allegedly executed between Plaintiff and Defendant Mark Elliot Zuckerberg ("Zuckerberg"), on April 28, 2003, pursuant to which Zuckerberg, according to Plaintiff, agreed to give Plaintiff a one-half ownership interest in Defendant Facebook, Inc. ("Facebook"), the social-networking website created and maintained by Zuckerberg. Because the parties dispute the authenticity of the document Plaintiff has proffered as the contract on which Plaintiff sues, and emails allegedly exchanged between Plaintiff and Zuckerberg regarding the contract, the parties agreed to expedited discovery designed to establish whether the contract and emails are forgeries. Accordingly, by Order filed July 1, 2011 (Doc. No. 83) ("July 1, 2011 Order"), the undersigned directed that Plaintiff produce, on or before July 15, 2011, certain emails and to make all computers and electronic media within Plaintiff's possession available for inspection by Stroz Friedberg LLC ("Stroz Friedberg"), a digital forensic consulting firm whose services Defendants have retained in connection with this action, including, as relevant, "the original, native electronic files consisting of or containing the purported emails described in the Amended Complaint and all electronic copies of the purported emails . . . ." July 1, 2011 Order at 1.

Also filed on July 1, 2011 was the Electronic Asset Inspection Protocol (Doc. No.85) ("Electronic Asset Protocol"), developed by the parties and so ordered by the undersigned, directing Plaintiff to produce by July 15, 2011, several categories of electronic assets for inspection by Defendants' forensic consultants. A Joint Stipulated Protective Order (Doc. No. 86) ("Protective Order"), approved and so ordered by the undersigned on July 13, 2011, provides, inter alia, that "[t]he designating party may designate documents, materials, or information as 'CONFIDENTIAL -- SUBJECT TO PROTECTIVE ORDER' if the party believes in good faith that the documents, materials, or information contain confidential information that is not publicly available . . . ." Protective Order ¶ 3.

On July 14, 2011, Plaintiff's then counsel, Jeffrey A. Lake, Esq. ("Lake"),*fn2 filed a declaration (Doc. No. 87) ("First Lake Declaration"), advising that all computers and electronic media within Plaintiff's control had been identified and were being produced for Defendants' inspection in accordance with the July 1, 2011 Order. First Lake Declaration ¶¶ 1-2. Lake further "certif[ied] . . . that such computers and electronic media contain all communications Plaintiff claims to have had with Defendants." Id. ¶ 3.

On July 25, 2011, Plaintiff moved to compel compliance with the July 1, 2011 Order's direction that Zuckerberg provide a sworn declaration certifying Zuckerberg's good faith efforts to locate handwriting samples (Doc. No. 91) ("Plaintiff's Motion to Compel"), maintaining that on July 21, 2011, Zuckerberg's counsel represented to Plaintiff's counsel that Defendant would not be complying with the order. On August 4, 2011, Defendants cross-moved (Doc. No. 95) ("Defendants' Crossmotion"), to compel Plaintiff's compliance with the July 1, 2011 Order's direction that, inter alia, Plaintiff consent to have his webmail accounts inspected by Stroz Friedberg pursuant to the Electronic Assets Protocol. In papers filed in support of Defendants' Crossmotion, Defendants advised that despite providing some items in response to the July 1, 2011 Order, Plaintiff maintained he was not in possession of any relevant emails, although forensic examination of Plaintiff's computers uncovered email correspondence between Plaintiff and Zuckerberg, and Defendants had not been permitted an opportunity to inspect any email accounts. Defendants assert that attached to one such email was a document which Defendants maintain is the authentic contract between Plaintiff and Zuckerberg, devoid of any mention of Facebook and which Plaintiff maintains Defendants 'planted' in Plaintiff's computer during the forensic examination. Defendants' Redacted Memorandum of Law in Support of Their Cross-Motion to Compel (Doc. No. 99) at 1-7. Defendants further asserted that on July 19, 2011, Plaintiff's attorney, Lake, had informed Defendants' attorney Alexander H. Southwell ("Southwell"), that Plaintiff's computer forensics consultant, Edelson McGuire LLC ("Edelson McGuire"), and an attorney for Edelson McGuire, were working to identify the electronic documents that were responsive to the July 1, 2011 Order. Affidavit of Southwell (Doc. No. 97) ¶ 24. When Southwell inquired why Lake did not simply request Plaintiff identify the locations of the electronic documents to be produced, Lake responded that Plaintiff was not involved with producing the electronic assets because Plaintiff was currently living in Ireland. Id.

Oral argument regarding the two motions to compel was conducted before the undersigned on August 17, 2011, during which Plaintiff made an oral request to stay the discovery ordered by the July 1, 2011 Order to permit the parties to pursue mediation ("First Motion to Stay"). The request was denied by the undersigned. By Order filed August 18, 2011 Order (Doc. No. 117) ("August 18, 2011 Order), Plaintiff was directed to identify all email accounts accessible through web-based interfaces that Plaintiff has used since 2003, including but not limited to his,,, and accounts. Plaintiff shall consent to the acquisition and inspection by Stroz Friedberg of the contents of all such accounts. On or before August 29, 2011, Plaintiff shall provide such consent on a form or forms to be provided by Stroz Friedberg. Plaintiff shall at the same time provide to Stroz Friedberg a password for, and facilitate access by Stroz Friedberg to, each identified account. The production and inspection of the contents of all such accounts shall be conducted pursuant to the Electronic Asset Inspection Protocol.

August 18, 2011 Order, ¶ 5.

Later that day, Lake advised Plaintiff that the August 18, 2011 Order directed Plaintiff to produce addresses and passwords for all of the email accounts Plaintiff had used since 2003 ("Plaintiff's email account information"), and that Plaintiff had instructed Lake not to comply with the August 18, 2011, but to seek further review from Judge Arcara. Declaration of Jeffrey A. Lake, Esq. (Doc. No. 153-1) ("Second Lake Declaration"), ¶ 2. Nathan A. Shaman, Esq. ("Shaman"), informed Plaintiff that objections to the August 18, 2011 Order would be filed. Declaration of Nathan A. Shaman, Esq. (Doc. No. 153-2) ("Shaman Declaration"), ¶ 2.

On August 19, 2011, Plaintiff moved (Doc. No. 118) to stay the August 18, 2011 Order ("Second Motion to Stay"), asserting that because the August 18, 2011 Order directed Plaintiff's compliance by August 29, 2011, less than the 14 days in which Plaintiff had to file objections to such Order, Plaintiff was "left with a 'Catch 22' where he must either violate the Order to be heard on his objections or comply with the Order thus rendering his objections moot." Second Motion to Stay at 1. Plaintiff further argued that the issues pertaining to the court-ordered expedited discovery were complicated, requiring "significant time" to adequately brief. Id. In a Text Order entered August 22, 2011 (Doc. 119) ("August 22, 2011 Text Order"), Judge Arcara stated that "[t]he desire to file objections to a magistrate judge's order does not, by itself, warrant a stay of that order. . . . ," and directed Plaintiff "to file supplemental briefing setting forth the basis for a stay." Judge Arcara further advised that the August 18, 2011 Order "remains in full force at this time." August 22, 2011 Text Order. By Decision and Order filed August 26, 2011 (Doc. No. 125) ("August 26, 2011 D&O"), Judge Arcara denied Plaintiff's Second Motion to Stay, observing that the August 29, 2011 deadline established by the August 18, 2011 Order was in accordance with the production schedule Plaintiff had requested just two days before filing the Second Motion to Stay, and that "the August 18, 2011 Order is merely a reiteration or an enforcement of the July 1, 2011 Order, an order to which plaintiff never objected." August 26, 2011 D&O at 4.

That same day, August 26, 2011, Lake advised Plaintiff of his continuing obligation to comply with the August 18, 2011 Order by producing the email account information by August 29, 2011. Second Lake Declaration ¶ 3. Lake repeated the advice on August 27, 2011, at which time Plaintiff authorized his attorneys to provide his email account information on versions of the consent forms supplied by Stroz Friedberg, modified to condition his consent on resolution of the objections Plaintiff intended to file to the August 18, 2011 Order ("the modified consent forms"). Id. ¶ 4. On August 28, 2011, Plaintiff provided his attorney, Shaman, with the completed modified consent forms containing email addresses and passwords for Plaintiff's Gmail and MSN email accounts. Shaman Declaration ¶ 4.

On August 29, 2011, Plaintiff filed a third motion to stay production of Plaintiff's email account information as directed by ¶ 5 of the August 18, 2011 Order (Doc. No. 26) ("Third Motion to Stay"), pending resolution of objections Plaintiff intended to file within a few days. In support of the Third Motion to Stay, Plaintiff asserted the court-ordered production of his email account information exceeded the scope of the original July 1, 2011 Order, with no showing by Defendants that such discovery was reasonably calculated to lead to the discovery of admissible evidence. Plaintiff further argued that the August 18, 2011 Order required Plaintiff "to give Defendants' expert unfettered access to every email [Plaintiff] has written since 2003" thereby providing Defendants with information "far outside the scope of this litigation and far inside [Plaintiff's] private life, a view to which no one is entitled and that is protected from government prying by the most sacred components of the Constitution." Plaintiff's Memorandum of Points and Authorities in Support of Motion to Stay Discovery (Doc. No. 126-1), at 4-5.

Also on August 29, 2011, Shaman provided the modified consent forms to Bryan Rose ("Rose") of Stroz Friedberg. Shaman Declaration ¶ 4. The modified consent forms specifically provide "that such authorization and consent shall not be effective until such time as the Motion to Stay Discovery, filed August 29, 2011, and subsequent Objections to the August 18, 2011 Order, which will be filed on or before September 1, 2011, are resolved." Declaration of Alexander H. Southwell, Esq. (Doc. No. 130) ("Southwell Declaration"), Exh. A The modified consent forms were not marked as confidential in accordance with the Protective Order. On August 30, 2011, Judge Arcara entered a Text Order (Doc. No. 127) ("August 30, 2011 Text Order"), denying Plaintiff's Third Motion to Stay.

On September 1, 2011, Defendants filed an Accelerated Motion to Compel (Doc. No. 128) ("Defendants' Accelerated Motion to Compel"), advising that Plaintiff had yet to comply with ¶ 5 of the August 18, 2011 Order, requiring Plaintiff provide addresses and passwords for all email accounts used by Plaintiff since 2003, and seeking a court order directing such compliance, including directing Plaintiff to provide his unqualified consent on the consent forms provided by Stroz Friedberg, thereby consenting to Defendants' immediate search of Plaintiff's email accounts. Defendants argued that by conditioning his consent to Defendants' search of Plaintiff's email accounts on resolution of Plaintiff's objections to Judge Foschio's orders, including the August 18, 2011 Order, Plaintiff was attempting to grant himself the stay of discovery of the email account information, initially ordered by the court on July 1, 2011, and which stay this court had already denied three times, amd Plaintiff's continued noncompliance had caused Defendants to repeatedly incur costs in filing motions to compel such discovery. Defendants' Memorandum of Law in Support of Their Accelerated Motion to Compel Compliance with Paragraph 5 of the August 18, 2011 Order (Doc. No. 129), at 6-7. Also filed on September 1, 2011, were Plaintiff's objections (Doc. No. 131), to ¶ 5 of the August 18, 2011 Order, asserting the email account information Plaintiff was ordered to produce was beyond the scope of the July 1, 2011 Order.

On September 2, 2011, Plaintiff filed a Motion to Set a Delayed Briefing Schedule (Doc. No. 134) ("Plaintiff's Motion to Delay"), seeking to delay the filing of papers in response to Defendants' Accelerated Motion to Compel on the basis that should Judge Arcara rule in Plaintiff's favor on Plaintiff's then-pending objections to ¶ 5 of the August 18, 2011 Order, Defendant's Accelerated Motion to Compel would be rendered moot. In the attached memorandum of law supporting the motion (Doc. No. 134-1) ("Memorandum in Support of Delayed Briefing Schedule"), Plaintiff also accused Defendants of engaging in an "egregious and massive violation of [Plaintiff's] privacy" by attaching the modified consent forms Plaintiff had executed as exhibits to an attorney affidavit that was electronically filed, without taking any steps to ensure Plaintiff's email account information contained on the consent forms, including addresses and passwords for the various email accounts of Plaintiff, would not be made public. Memorandum in Support of Delayed Briefing Schedule at 2. According to Plaintiff, upon realizing his email account information had been disclosed by filing it with the court's electronic filing system, Plaintiff changed his email passwords, although Defendants, and anyone with access to this court's electronic filing system would have had access to Plaintiff's email accounts until the passwords were changed. Id. at 2-3. In papers filed September 6, 2011, in opposition to Plaintiff's motion seeking a delayed briefing scheduled, Defendants maintain that Plaintiff should have designated as "confidential" the consent forms containing Plaintiff's email information, and that Plaintiff's own attorneys provided the email account modified consent forms directly to Defendants' attorneys, but that Defendants' attorneys had not shared the information with Defendants. Defendants' Opposition to Ceglia's Motion to Set Delayed Briefing Schedule (Doc. No. 137), at 6. Defendants further explain that Defendants immediately alerted Plaintiff's attorneys that the modified consent forms had been filed on the public docket, and that Defendants had advised this court's Clerk's Office of the issue, leaving the Clerk's Office to determine how best to remedy the situation. Id. at 6-7.

By Order filed September 16, 2011 (Doc. No. 145), Judge Arcara affirmed the August 18, 2011 Order. Accordingly, in a Text Order entered September 20, 2011 (Doc. No. 146), the ...

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