Ceglia lawyer withdraws from Facebook lawsuit

Tue Oct 18, 2011 9:09am IST

The Facebook logo is displayed on a computer screen in Brussels April 21, 2010. REUTERS/Thierry Roge/Files

The Facebook logo is displayed on a computer screen in Brussels April 21, 2010.

Credit: Reuters/Thierry Roge/Files

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REUTERS - The New York man claiming half of Facebook Inc founder Mark Zuckerberg's lucrative stake in the world's largest social networking company is replacing his main lawyer for a third time, a court filing showed.

Paul Ceglia, the plaintiff, asked U.S. Magistrate Judge Leslie Foschio in Buffalo, New York to delay his case for three weeks after allowing his lead lawyer, Jeffrey Lake, to withdraw from the case.

According to the Monday evening filing, Lake said Ceglia is in the "final stages" of obtaining a new lawyer, and is in talks with "several" lawyers who are "diligently coming up to speed with the facts and proceedings" to represent him.

Paul Argentieri, another lawyer for Ceglia, will remain on the case, Monday's filing showed. Lake did not give a reason for his withdrawal.

A call to Lake's office in San Diego was not answered, and Lake did not immediately respond to an email request for comment. Argentieri did not immediately return a call seeking comment. Facebook declined to comment.

The filing marks 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.

Lake withdrew after Facebook asked Foschio to punish Ceglia and his lawyers for their failure to turn over email accounts and passwords, as the judge had directed in an Aug. 18 order.

In an Oct. 7 court filing, Lake had written that he had told Ceglia about the order, but that "Mr. Ceglia instructed me not to comply with this provision" and to raise the issue before a different judge.

A week later, 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 had in June replaced the law firm DLA Piper as Ceglia's counsel. That firm previously replaced a different lawyer.

Earlier on Monday, Foschio had scheduled a Nov. 2 hearing to consider whether to force Ceglia to comply with his Aug. 18 order, which also gave Facebook access to computers and files and required Ceglia to describe the content of missing materials. That timetable is now in doubt.

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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