Ceglia told lawyer to ignore Facebook court order

Mon Oct 17, 2011 6:21pm EDT

The Facebook logo is shown at Facebook headquarters in Palo Alto, California May 26, 2010. REUTERS/Robert Galbraith

The Facebook logo is shown at Facebook headquarters in Palo Alto, California May 26, 2010.

Credit: Reuters/Robert Galbraith

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(Reuters) - The New York man claiming half of Facebook Inc founder Mark Zuckerberg's stake in the social networking company told his lawyer not to comply with a court order to turn over email data, a court filing shows.

Facebook asked U.S. Magistrate Judge Leslie Foschio in Buffalo, New York to punish the plaintiff, Paul Ceglia, and his lawyers for their failure to turn over email accounts and passwords, as the judge had directed in an August 18 order.

Foschio late Monday scheduled a November 2 hearing to consider whether to force Ceglia to comply with the order, which also gave Facebook access to computers and files and required Ceglia to describe the content of missing materials. The hearing will also consider sanctions for Ceglia and his lawyers.

The filings mark the latest twist in a year-old case over the authenticity of a 2003 contract under which Ceglia said he hired Zuckerberg, then a Harvard University freshman, for multiple projects, one of which eventually became Facebook.

The company calls that contract a forgery, and said an "authentic" contract found on Ceglia's computer does not concern Facebook.

Facebook had requested sanctions on Friday, one week after Jeffrey Lake, one of Ceglia's lawyers, said in a court filing that his client told him not to follow the judge's order.

"I informed Mr. Ceglia that the court had ordered him to produce, among other things, accounts and passwords for all email accounts he had used since 2003," Lake wrote. "Mr. Ceglia instructed me not to comply with this provision and to bring the issue before (U.S.) District Judge (Richard) Arcara."

In its October 14 filing, Facebook said Ceglia's lawyers had a duty to resist their client's alleged effort to break the law, and might have violated state ethics rules by revealing what he said in an effort to protect themselves.

"If they fail to persuade their client to change direction, their proper course is to withdraw," Facebook lawyers wrote.

Lake's colleague Nathan Shaman, in an accompanying filing, also said Ceglia refused to comply with Foschio's order.

Calls to Lake, Shaman and Paul Argentieri, another lawyer for Ceglia, were not immediately returned.

Facebook is based in Palo Alto, California, and may be worth $68.2 billion, according to SharesPost Inc, which tracks valuations of private companies.

Many analysts expect Facebook to conduct an initial public offering as soon as next year. Zuckerberg is worth $17.5 billion, Forbes magazine said last month.

Ceglia is a wood pellet salesman from Wellsville, New York, and now reported to be living in Ireland.

The case is Ceglia v. Zuckerberg et al, U.S. District Court, Western District of New York, No. 10-00569.

(Reporting by Jonathan Stempel in New York, editing by Bernard Orr)

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