Lawyers in NY Facebook suit spar over fee amount

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BUFFALO, N.Y. (AP) - Lawyers for Facebook are looking for $84,000 in legal fees from a New York man after a judge ruled he caused delays in his lawsuit seeking part ownership in the social networking site.

They also want a judge to freeze Paul Ceglia’s legal case until the fees are paid.

Ceglia’s attorney called the lawyers’ rates “stratospheric” and asked the judge this week to reject them in favor of an amount more in line with what lawyers are paid in Buffalo, where the case is being heard.

The judge didn’t immediately rule on the issue.

U.S. Magistrate Judge Leslie Foschio last month ordered Ceglia to pay Facebook’s court costs for efforts to force the Wellsville man to comply with an order to provide access to his email accounts. He also fined Ceglia $5,000 for contempt.

New York City attorney Orin Snyder said he and four other attorneys for Menlo Park, Calif.-based Facebook and founder Mark Zuckerberg spent 177 hours preparing court filings seeking the email access. The attorneys normally bill at rates ranging from $450 to $995 an hour, Snyder said, but cut them by 25 percent “to avoid any dispute as to the reasonableness” of the request. That brought the amount sought from Ceglia to $84,196.33.

In a response filed Monday, Ceglia attorney Dean Boland said that the Facebook lawyers hadn’t properly kept track of their time and that the three court filings they submitted during the email dispute required them to draft a total of 22 pages. He argued that New York City rates should not apply in Buffalo, a more affordable, upstate city.

“Defendants’ discounted rates are still nearly three times the highest rate that this court has awarded to out-of-district attorneys,” Boland wrote. He did not specify an amount Ceglia would be willing to pay.

He said his client has already paid the $5,000 sanction and should not be prohibited from moving forward with his case until the lawyer fees are paid, as Facebook requested.

Ceglia’s lawsuit claims that when he hired Zuckerberg to help him develop a street-mapping database in 2003, he gave the then-Harvard University freshman $1,000 in start-up money for his fledgling Facebook idea in exchange for half ownership of the company if it grew.

Facebook was expected to file as early as Wednesday to sell stock on the open market. The initial public offering was expected to raise as much as $10 billion, which would value the company at $75 billion to $100 billion. The current value has been estimated at more than $50 billion.

The Buffalo court case so far has focused exclusively on the authenticity of a two-page work-for-hire contract that Ceglia says proves his claims, along with a series of follow-up emails he says he and Zuckerberg exchanged.

Facebook’s attorneys have said they will soon move to have the case dismissed based on their experts’ findings that the documents are fake. Ceglia, who is believed to be living in Ireland, has stood by the contract’s origin.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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