Court won't let ConnectU out of Facebook settlement

A federal judge just issued a ruling that may finally end the legal dispute between social networking companies Facebook and ConnectU. They reached a confidential settlement earlier this year, but ConnectU’s founders have been trying to back out and reopen the lawsuit, saying they’ve found new evidence to support their case.

Judge James Ware’s response to ConnectU’s claims came earlier tonight, and he sided with Facebook, meaning that ConnectU’s founders are stuck with the settlement. Apparently, their legal argument was that the deal was fraudulent, because Facebook misrepresented itself during the talks. But Ware writes that ConnectU “failed to tender sufficient evidence of fraud … as to create a genuine dispute about whether the Agreement was fraudulently induced.”

According to the ruling, both companies must appear in court on July 2 “to show cause why a judgement should not be entered ordering the parties to take the actions required of them in the Settlement Agreement.”

This ruling looks like the end of the lawsuit’s last gasp; I had thought it was over when the settlement was announced earlier this year. The background here is that Facebook founder Mark Zuckerberg worked for ConnectU’s founders — brothers Cameron and Tyler Winklevoss, along with Divya Narendra — to help set up a dating site called Harvard Connection back when they were all students at the university in 2003. Narendra and the Winklevoss brothers alleged that Zuckerberg delayed their site while stealing code and ideas for Facebook.

Regardless of whether the accusations had any merit, it was certainly in Facebook’s interest to bring the case to an end as soon as possible. The dispute brought up some unflattering details to light about Zuckerberg, and also cast a shadow on rumors of a possible IPO.

A Facebook spokesperson sent us a copy of the ruling, as well as a statement from the company, which concludes: “We were disappointed that we had to litigate the settlement, as we believed we were caught in the middle of a fee dispute between ConnectU’s founders and its former counsel. Nevertheless, we can now consider this chapter closed and wish the Winklevoss brothers the best of luck in their future endeavors.”

I’ll try to contact the Winklevoss’ attorneys or see if they’ve released a statement; if so, I’ll update this post.


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