Winklevoss twins ordered to accept Facebook settlement, but will challenge ruling

Summary:A court has ruled that the Winklevoss twins must accept a $65 million cash and stock settlement with Facebook. They plan to fight the ruling.

Facebook CEO Mark Zuckerberg has won a legal battle against former Harvard classmates Cameron and Tyler Winklevoss who accuse him of stealing their idea for the social network. A three-judge appeals court panel ruled that the Winklevoss twins must accept a cash and stock settlement with Facebook that has been valued at $65 million.

The Winklevoss twins, along with Divya Narendra, started a company called ConnectU while at Harvard. They say Zuckerberg stole their idea and created Facebook, which the company now denies. The trio originally agreed to the aforementioned settlement but now argue that, based on an internal valuation that Facebook did not reveal, they should have received more Facebook shares as part of the deal.

A lower court previously granted Facebook's request to enforce the settlement with the Winklevoss twins and Narendra. The 9th Circuit has now agreed. "At some point, litigation must come to an end," 9th US Circuit Court of Appeals Chief Judge Alex Kozinski wrote according to Reuters. "That point has now been reached. The Winklevosses are not the first parties bested by a competitor who then seek to gain through litigation what they were unable to achieve in the marketplace."

Jerome Falk Jr., the twin's attorney said his clients would seek a rehearing:

The Ninth Circuit has affirmed the District Court's enforcement of the settlement over my clients' objection on the ground that the settlement was obtained in violation of the federal securities laws. I appreciate the Ninth Circuit's thorough discussion of the issues. However, I respectfully disagree with the Ninth Circuit's conclusions. In my judgment, the opinion raises extremely significant questions of federal law that merit review by the entire Ninth Circuit Court of Appeals. For that reason, my colleagues and I will file a Petition For Rehearing En Banc within the next fifteen days.

A rehearing would occur before a larger group of 9th Circuit judges, which can overrule the three-judge panel, although only a fraction of cases undergo such a review. If the 9th Circuit refuses to rehear the case, the last option would be an appeal to the US Supreme Court.

Topics: Legal

About

Emil is a freelance journalist writing for CNET and ZDNet. Over the years, he has covered the tech industry for multiple publications, including Ars Technica, Neowin, and TechSpot.

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