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Ceglia has bad day in Facebook lawsuit; Lawyers fail to win numerous motions

Wednesday was not a good day in Buffalo's federal court for Paul Ceglia, the Wellsville businessman who claims to be the co-inventor of the Facebook social networking website.

During a rancorous four-hour hearing, Ceglia's attorneys lost one pretrial motion after another in his lawsuit seeking half ownership of Facebook.

U.S. Magistrate Judge Leslie G. Foschio ordered Ceglia to provide detailed explanations to Facebook attorneys on how Ceglia lost five computer thumb drives that allegedly contain important information about his claim that he is the co-founder of the website.

Then, as the hearing drew to a close, Ceglia's lead attorney, Jeffrey Lake, asked the judge to refer the lawsuit to a mediator, who would oversee discussions that could lead to an out-of-court settlement.

To the Facebook legal team, Lake's request was seen as an act of desperation from a lawyer who knows his case is going nowhere.

"They're desperate to mediate, now that their case has exploded," said Orin S. Snyder, the lead attorney for Facebook and its billionaire owner, Mark Zuckerberg. "The noose is tightening around [Ceglia's] neck."

Ceglia, who lives in Allegany County, did not appear at Wednesday's hearing. Lake said Ceglia is in Ireland but said he does not know why his client went there or how long he plans to stay.

Lake discounted Snyder's assertion that Ceglia wants to settle the case because he knows it is doomed.

"I disagree with that. I'm being reasonable, and I invite open discussion," Lake said.

Lake said he wonders if Zuckerberg wants to continue to spend money on legal fees and continue a case that could bring out information that would be embarrassing to Zuckerberg.

There will be no settlement of any kind, said Snyder, whose legal team includes Buffalo's former U.S. attorney, Terrance P. Flynn.

Ceglia filed a lawsuit last year claiming that he and Zuckerberg entered into a partnership in 2003 that now makes Ceglia a 50 percent owner of Facebook, a business that is now reportedly worth $50 billion.

Zuckerberg, through his attorneys, denies the existence of any Facebook partnership with Ceglia.

Because of the backlog of cases in Buffalo's federal court, the lawsuit is unlikely to go to trial for months, possibly years. And Facebook attorneys hope to get the case dismissed before any trial.

Snyder said computer technicians who have examined computers owned by Ceglia and his family now have "smoking gun" evidence that a purported 2003 contract that Ceglia has presented to the court is a fraud.

During Wednesday's hearing, Snyder and Foschio repeatedly asked why Ceglia cannot find five computer information storage devices, including thumb drives, that Snyder believes may contain information proving that Ceglia's contract is a phony.

Lake told the judge he has asked Ceglia several times what happened to the devices.

"[Ceglia] said, 'Jeff, I gave you everything I have,' " Lake said. "I have no other means to search for it."

Facebook has an ink expert who is examining the alleged contract submitted by Ceglia in an attempt to determine whether it was really printed in 2003, Snyder said. That examination is continuing, and Ceglia also has an ink expert examining the document.

Ceglia has rarely spoken publicly about his lawsuit, but he sent a rambling email earlier this week to a technology website known as ZDNet.com. In the email, Ceglia accused Facebook of manufacturing evidence against him.

"It's laughable," Ceglia said in the email. "They make this stuff up as they go along."

Facebook attorneys do not deny that Ceglia knew Zuckerberg, but they call Ceglia a liar and con artist, pointing out a Texas drug conviction and a charge filed against him in 2009 for allegedly running a fraudulent business that sold wood pellets for fuel.

The business was shut down by the State Attorney General's Office after customers complained that Ceglia cheated them.

email: dherbeck@buffnews.com