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Paul D. Ceglia v. Mark Elliot Zuckerberg

November 20, 2012

PAUL D. CEGLIA, PLAINTIFF,
v.
MARK ELLIOT ZUCKERBERG, AND FACEBOOK, INC., DEFENDANTS.



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

DECISION and ORDER

JURISDICTION

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 on Defendants' Motion for Production (Doc. No. 553), filed September 27, 2012.

BACKGROUND*fn1

Plaintiff Paul D. Ceglia ("Plaintiff" or "Ceglia"), filed the original complaint in this action on June 30, 2010, in New York Supreme Court, Allegany County. On July 9, 2010, Defendants Mark Elliot Zuckerberg ("Zuckerberg") and Facebook, Inc. ("Facebook") (together, "Defendants") removed the action to this court asserting subject matter jurisdiction based on diversity. In an Amended Complaint filed April 11, 2011 (Doc. No. 39), Plaintiff asserts seven claims for relief based on alleged breaches of a purported contract and the partnership established thereunder. Defendants deny the purported contract's authenticity, asserting it is a forgery.

On September 27, 2012, Defendants filed the instant Motion for Production (Doc. No. 553) ("Defendants' motion"), seeking all documents created by one of Plaintiff's experts, Larry Stewart ("Stewart"), in connection with the taking of samples from the purported contract at issue in this action, and a sworn declaration from Plaintiff and Stewart stating that all such documentation has been produced. Defendants' motion is supported by Defendants' Memorandum in Support of Their Motion for Production (Doc. No. 554) ("Defendants' Memorandum"), the Declaration of Alexander H. Southwell, Esq. (Doc. No. 555) ("Southwell Declaration"), with attached exhibits A through NN ("Southwell Declaration Exh(s). __"), and the Declaration of Amanda M. Aycock, Esq. (Doc. No. 556) ("Aycock Declaration"), with attached exhibits A through I ("Aycock Declaration Exh(s). __").

On October 18, 2012, Plaintiff filed his Response to Defendants' Motion for Discovery (Doc. No. 573) ("Plaintiff's Response"), with attached exhibits 1 through 13 ("Plaintiff's Exh(s). __"), and the Declaration of Larry Stewart Regarding Defendants' Motion for Discovery (Doc. No. 574) ("Stewart Declaration").*fn2 In further support of Defendants' Motion, Defendants filed on October 26, 2012, Defendants' Reply Memorandum in Support of Their Motion for Production (Doc. No. 578) ("Defendants' Reply"). Oral argument was deemed unnecessary.

Based on the following, Defendants' motion is DENIED.

FACTS*fn3

At the center of this action is the authenticity of a "Work for Hire" contract ("the Work for Hire Document")*fn4 allegedly executed between Plaintiff Paul D. Ceglia ("Plaintiff") and Defendant Mark Elliot Zuckerberg ("Zuckerberg"), on April 28, 2003, pursuant to which Plaintiff and Zuckerberg, then a student at Harvard University ("Harvard"), established a partnership for the development and commercialization of two separate internet business ventures, including the social-networking website now known as Defendant Facebook, Inc. ("Facebook"), and StreetFax ("StreetFax"), an on-line database project which Plaintiff was developing and hoped to market for profit. The Work for Hire Document provides that Plaintiff would hire Zuckerberg to perform web programming for StreetFax, and Plaintiff would help fund the development of Facebook in exchange for a one-half interest in Facebook. The details governing the web programming work Plaintiff was to perform for StreetFax are set forth in a separate document signed by Plaintiff and Zuckerberg on April 28, 2003, titled "StreetFax Back-End Technical Specification" ("the Specifications Document").*fn5 Defendants contend the Work for Hire Document is a forgery, and that the true contract containing the agreement reached by Plaintiff and Zuckerberg on April 28, 2003, is a two-page document titled "StreetFax" ("the StreetFax Document"), executed on April 28, 2003, and providing that Zuckerberg, in exchange for monetary payment from Plaintiff, would perform programming work for Plaintiff's StreetFax project, without mentioning Facebook.*fn6

In June 2011, both Plaintiff and Defendants filed motions to stay general discovery, but to permit expedited discovery limited to that necessary to determine the issue of the Work for Hire Document's authenticity (Docs. Nos. 44 and 56). As relevant to the instant motion, by order filed July 1, 2011 (Doc. No. 83) ("July 1, 2011 Expedited Discovery Order"), the undersigned directed Plaintiff to produce on or before July 15, 2011, "all original signed versions of the Work for Hire Document attached to the Amended Complaint" the examination of which was to proceed pursuant to the Hard- Copy Document Inspection Protocol filed July 1, 2011 (Doc. No. 84) ("Hard-Copy Protocol"). July 1, 2011 Expedited Discovery Order at 1.

As relevant to the instant motion, the Hard-Copy Protocol provides (1) the time and date for physical inspection of the Work for Hire Document and Specifications Document ("the Hard-Copy Documents"); (2) Plaintiff's counsel and three additional representatives designated by Plaintiff may observe Defendants' examination of the Hard-Copy Documents; (3) Defendants must notify Plaintiff of their experts' specific testing of the Hard-Copy Documents; (4) any testing requiring the extraction of a physical sample from the Hard-Copy Documents was to be performed in the presence of representatives from both parties; and (5) an audiovisual recording of Defendants' examination of the purported contract may be made by the parties. Hard-Copy Protocol ¶¶ 1-5. Neither the July 1, 2011 Expedited Discovery Order nor the Hard-Copy Protocol limited the examination, testing, or sampling Defendants' experts were permitted to perform on the Hard-Copy Documents; rather, the Hard-Copy Protocol required Defendants provide notice of such testing, and any physical sampling, including the extraction of tiny samples of ink, toner, and paper from the Hard-Copy Documents, be taken in the presence of representatives from both parties. Hard-Copy Protocol ¶¶ 3-4.

The parties met on July 16, 2011, to commence, through the use of a tiny hole-punch type tool, taking samples of paper and ink or "sample plugs" from the Hard-Copy Documents, agreeing on the specific number and general locations from which each party initially would be permitted to extract ink, paper and toner sample plugs from the Hard-Copy Documents ("Hard-Copy Inspection"). In particular, it was agreed that each party initially was authorized to take the following sample plugs:

(1) 20 paper sample plugs from each page of the Hard-Copy Documents;

(2) 20 toner sample plugs from each page of the ...


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