Watching “The Social Network” lose out to “The King’s Speech” for Best Picture, I couldn’t help but wonder how Cameron and Tyler Winklevoss, would-be twin inventors of Facebook, reacted to the news.  Were the Olympic rowers disappointed that the movie that made them famous didn’t walk away with the big prize?  Or, was the announcement some cause for relief, a signal that their nearly decade long pursuit of justice against Facebook wonderkin, Mark Zuckerberg, might be moving out of the public eye and eventually wind down.  Either way, my guess is that emotions remain high in the boathouse as the Twins await yet another court ruling in the epic battle over Facebook, one that has the potential to reignite the fight.

For those who have yet to see the movie, the Winklevoss twins (the “Twins”), together with their Harvard classmate, Divya Narendra, allege that they had the idea for Facebook, and that Mark Zuckerberg stole their idea.  Zuckerberg and Facebook deny the claims, and for their part, allege that the Twins and Narendra infiltrated their system, took thousands of e-mail addresses, and then spammed them.  After years of vigorous fighting worthy of all the Hollywood attention, the parties entered into a mediation driven settlement in which Facebook agreed to purchase ConnectU, the Twins’ failing competitor site, with shares of Facebook stock — a deal worth in excess of $160 million because of Facebook’s soaring value.

In a remarkable demonstration of — well — “True Grit”, the Twins have now asked the Ninth Circuit to undo the settlement.  They claim that, despite a bevy of lawyers at their side during the mediation, they were duped about the actual value of Facebook stock they were to receive as part of the settlement.  If the Court agrees, the Twins will be $160 poorer, the scorched earth litigation will resume in earnest, and if not already underway, a team of Southern California screenwriters will begin blocking out drafts of “The Social Network II.”

Overturning a settlement is no easy business.  Most who try argue, as the Twins have, that either the settlement was too indefinite to have resulted in a meeting of the minds or that the agreement was the product of fraud.  With regard to the agreement itself, there is typically a “presumption of enforceability” followed by a review of whether the terms are “sufficiently certain.”  As to fraud, Ninth Circuit courts require a showing of a duty plus a level of misconduct that “substantially impeded” the movant’s ability to act.  No easy feat.

One issue specific to the Facebook litigation is the Twins’ novel claim that the settlement should be unwound because Facebook committed securities fraud during the mediation.  The argument is that Facebook was guilty of insider trading in the mediation process because it failed to volunteer all the information it had regarding the valuation of the company.  Ultimately, the Twins relied upon their own research, namely a Microsoft press release, in coming up with a $36 per share value.  They claim that Facebook withheld information that would have disclosed a value closer to $9 per share.  The Twins claim that had they know that information, they would never have settled for so few shares.   

The securities claim will hinge on whether the Twins properly pled a securities claim and on whether Facebook had a duty to volunteer any information bearing on the value of the stock.  One wonders, for example, why such a duty would arise in the course of mediating such contentious litigation.  Oh, and there is the matter of the release signed by the Twins absolving Facebook for “any future fraud claim.”

For those interested in researching cases regarding settlement agreements, I ran a WestSearch on WestlawNext in the Ninth Circuit across all content sets for the following: enforce settlement agreement.  The result yielded the most relevant Ninth Circuit opinions on the topic including:

Callie v. Near , 829 F.2d 888 and William Keeton Enterprises, Inc. v. A All American Strip-O-Rama, Inc., 74 F.3d 178.

A click on secondary sources revealed several articles directly on point including:

 “Reviewing Agreements Reached During Mediation,” a chapter in Cole’s Mediation Law treatise. (MEDIATION § 4:13); and

“Disputing Irony: A Systematic Look at Litigation About Mediation,” a detailed Harvard Negotiation Law Review Article.  (11 Harv. Negot. L. Rev. 43)

A more directed boolean terms and connectors search might look something like:

((settlement mediation /4 agreement) /20 enforc!) and fraud! (sufficiently /4 certain definite) and (fail! +3 disclose) (withhold withheld +3 information)

For those interested in the outcome of the Ninth circuit decision in Facebook, set up a Docket Track in the DOCK-CTA9 for docket number 09-15021.  When the decision is filed, you will be e-mailed an alert. 

Other briefing of interest in this case:

Brief of Appellant/Cross-Appellee Facebook – 2010 WL 5625003

Brief of Appellee ConnectU (the Twins) – 2010 WL 5625005

Appellant’s Reply Brief – 2010 WL 562004

The Wall Street Journal’s Law Blog yesterday had a story regarding a federal inmate and frequent frivolous litigant Jonathan Lee Riches.  It seems that the United States District Attorney for the Eastern District of Kentucky has attempted to obtain an injunction preventing Mr. Riches from filing documents in any court unless a  federal judge determines that they have a basis in law and fact.

Mr. Riche’s history of filing lawsuits that are later dismissed as frivolous is quite long.  His filings are often hard to understand, and his list of parties are also sometimes confusing.  A search of:

AT(LEE-RICHES) & PRO-SE INMATE-MAIL CORRECTIONAL-INSTITUTION

Returns over 2,000 results in DOCK-ALL, although in fairness they may not all be Mr. Lees cases, they are simply anything with Lee Riches in the attorney field with pro se, inmate mail, or correctional institution elsewhere in the document.  One docket in particular stands out (and has a new motion filed as of July 30th 2010) as having a very strange mix of parties, some of the extremely numerous names:

We start out with the usual individuals:

GEORGE W. BUSH INDIVIDUALLY AND IN HIS OFFICIAL CAPACITY AS PRESIDENT OF THE UNITED STATES OF AMERICA

RICHARD B. CHENEY VICE PRESIDENT

CONDOLEEZA RICE SECRETARY OF STATE

No real surprises there for a case filed in 2006.  However the list of parties also contains foreign governments and celebrities:

KINGDOM OF SAUDI ARABIA

JEWISH STATE OF ISRAEL

THE VATICAN

JERRY WEST VICE PRESIDENT OF THE LOS ANGELES LAKERS

TONY DANZA

ANNA NICHOLE SMITH

BRAD PITT AND HIS ADOPTED SON MADDOX PITT/JOLIE

SADDAM HUSSEIN

But more strangely included are a large list of inanimate objects, geographical places, long dead historical figures, wholly fictional product spokespeople and sometimes ephemeral concepts that have no physical existence.  Some examples:

VIENNA CONVENTION

MAGNA CARTA

TSUNAMI VICTIMS

FRUIT OF A-LOOM [sic.]

PLATO

MEIN KAMPF

NORDIC GODS

THE DA VINCI CODE

MT. RUSHMORE

GREEN BAY’S LAMBEAU FIELD

MING DYNASTY

GANGS IN HONG KONG

THE APPALACHIAN TRAIL

THE COLOSSUS OF RHODES

BETTY CROCKER

LIBERTY BELL

This is a very small sampling of the parties.  You can find the entire list by clicking the link above.

From the “old news” file comes word that the corruption trial of former Illinois governor Rod Blagojevich ended in a hung jury on all but one count.  The docket for the case, which includes the verdict form, is available here (1:08-CR-00888). 

Blagojevich was convicted only of making false statements to the Federal Bureau of Investigation, a violation of 18 USCA § 1001.  That charge is outlined in the Second Superseding Indictment, which is available on Westlaw at 2010 WL 1777511.

Blagojevich has been less than elusive since the verdict, appearing at such gatherings as the Wizard World Chicago Comic Con and making several television appearances.  Among those appearances was an interview on Fox News Sunday, where he discussed his case and indicated that he may not be finished with politics:

“My adult life was serving the people as a congressman, as a governor.  It’s what I know. I’m not very good on BlackBerries or computers or anything like that.  It’s why Donald Trump fired me on Celebrity Apprentice.  But no, I — I’m not ruling myself out as coming back, because I will be vindicated in this case. ”

You can read a complete transcript of the interview (broken up into two parts) by running the following search in the ALLNEWS database:  BLAGOJEVICH & PR(FOX).  The results are ranked in reverse-chronological order, so the interview should be at or near the top of the list.

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Credit: Reuters/Pichi Chuang

During the Proposition 8 decision on August 4, 2010, Judge Vaughn Walker issued a temporary stay for briefing.  The motions and briefs can be found below.  Yesterday, Judge Walker ruled  that gay marriages could resume next week (Wednesday at 5 p.m. PST) in California while his landmark ruling last week that overturned a ban on same-sex matrimony is appealed.   The purpose of the delay is to give the  appeals court time to consider “in an orderly manner” whether the voter-approved ban, known as Proposition 8, should be left intact while appellate judges weigh the merits of the overall case.

Late on Thursday, the defenders of Proposition 8 filed papers asking the appellate court to block same-sex marriages for the duration of the appeal.  When we have the appeals materials available we will update this post.  You can subscribe to the RSS feed on our toolbar on the right-hand side to get an update notice.

Decision: 2010 WL 3170286

Motions:

• 2010 WL 3065298 Attorney General’s Opposition to Defendant-Intervenors’ Motion for Stay Pending Appeal (Aug. 6, 2010)
• 2010 WL 3065300 The Administration’s Opposition to Defendant-Intervenors’ Motion for Stay Pending Appeal (Aug. 6, 2010)
• 2010 WL 3065309 Plaintiffs’ and Plaintiff-Intervenor’s Joint Opposition to Defendant-Intervenors’ Motion for a Stay Pending Appeal (Aug. 6, 2010)
• 2010 WL 3054190  Defendant-Intervenors Dennis Hollingsworth, Gail J. Knight, Martin F. Gutierrez, Mark A. Jansson, and Protectmarriage.com’s Motion for Stay Pending Appeal (Aug. 3, 2010)
• 2010 WL 2629020  Plaintiffs’ and Plaintiff-Intervenor’s Opposition to Defendant Intervenors’ Motion for Administrative Relief (Jun. 29, 2010)

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Fracking.  I didn’t think it was a real word either.

It’s real and it’s worth a lot of money.

Fracking, or hydraulic fracturing, “injects a mixture of water, sand and chemicals into rock formations at high pressure to force out oil and natural gas.”  That gas is where the money comes in.  Some studies have estimated that within the U.S. there are over 16,200 trillion cubic feet of gas.  16,200 trillion cubic feet of gas is more than 150 times the amount of natural gas the world uses in one full year.  Fracking helps to recover that gas.

Some people think fracking is great.

Some people are less sure.

The reason I mention it:  fracking litigation.

I have taken a few calls in the last few months dealing with the issue of researching fracking. 

You can access complaints and answers dealing with fracking by simply searching for the fracking or fracing in Filing-all.  The media uses fracking while the industry uses fracing (or even frac’ing).  Either way, you will find over 100 filings from around the country this issue.

According to its critics, fracking can lead to contaminated waters.  Those contaminated waters may be harmful if consumed by humans.  The more people drink potentially contaminated water, one can reason, the more lawsuits will be filed.

As those lawsuits continue to be filed, you can continue to find them in Filing-All.  Keep your eye out for an increase in litigation related to fracking.

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