Winklevii Go for Gold, Say They'll Take Facebook Case to the Supreme Court

Following the Ninth Circuit Court of Appeals’ decision to deny Cameron and Tyler Winklevoss’s request to rehear their case versus Facebook and Mark Zuckerberg, the twins’ lawyer said they intended to petition to be heard by the U.S. Supreme Court.

The Winklevii want the high court to invalidate their previous multi-million dollar settlement over the founding of Facebook because Facebook didn’t tell them its true valuation at the time. They have tried and failed to get the settlement appealed three times.

Here’s the press release:

Howard Rice Clients Cameron and Tyler Winklevoss and Divya Narendra To Seek U.S. Supreme Court Review

SAN FRANCISCO, CA – May 16, 2011 – After the Ninth Circuit today denied rehearing en banc in the ongoing dispute, the law firm of Howard Rice announced that its clients, Cameron and Tyler Winklevoss and Divya Narendra, intend to file a Petition for Certiorari with the United States Supreme Court in the ongoing dispute with Facebook and Mark Zuckerberg.

Lead appellate attorney Jerome B. Falk, Jr., said, “The Ninth Circuit’s opinion creates a conflict between Ninth Circuit precedent and the decisions of other federal courts on two issues.

The first is the Court’s holding that a party who is defrauded into entering into a settlement agreement cannot challenge the contract on the ground of fraud. Federal and state courts have long held that a settlement founded on fraud must be set aside. The Court’s decision conflicts with that body of precedent.

The second issue is the Court’s holding that a routine agreement to hold statements made in a mediation confidential bars proof that Facebook committed securities fraud in the mediation. Numerous federal precedents, and the text of the 1934 Securities Exchange Act, hold that an agreement to directly or indirectly waive rights under federal antifraud provisions of the securities laws is void. The Panel’s decision conflicts with that body of precedent.”

Settlements should be based on honest dealing, and courts have wisely refused to enforce a settlement obtained by fraudulent means. The Court’s decision shut the courthouse door to a solid claim that Facebook obtained this settlement by committing securities fraud. Our Petition to the Supreme Court will ask the high court to decide whether that door should be reopened.”

The Howard Rice team includes Jerome B. Falk, Jr., Sean M. SeLegue, Shaudy Danaye-Elmi and Noah S. Rosenthal.

Please see the disclosure about Facebook in my ethics statement.