Judge kills zombie Winklevoss lawsuit against Facebook

winklevossThe Winklevoss twins, a.k.a. the Winklevii, have been locked in a years-long legal battle over the creation of Facebook. By Julianne Pepitone, staff reporter


NEW YORK (CNNMoney) -- The long, sordid legal saga between Facebook and the much-maligned Winklevoss twins may finally be over.

A federal appeals judge on Monday affirmed a lower court ruling which said that the twins cannot unwind a settlement they signed in 2008 over the creation of Facebook.

Cameron and Tyler Winklevoss (a.k.a. "the Winklevii") and a third Harvard classmate, Divya Narendra, filed suit in 2004 against Facebook and CEO Mark Zuckerberg. The trio alleged that Zuckerberg had stolen the idea for Facebook from them -- an idea dramatized last year in the Oscar-nominated movie The Social Network.

Facebook promptly countersued the trio and their own social networking site, ConnectU, alleging they had hacked into Facebook to steal data and spam users.

The back-and-forth drama played out publicly for years until, in 2008, the Winklevosses and Narendra signed a settlement valued at $65 million, part in cash and part in Facebook stock.

But the trio later tried to pull out of the deal, alleging that Facebook had misrepresented the value of its stock. A judge ruled against them and forced the settlement to go through, but the Winklevosses and Narendra took the case to court.

The Monday ruling from Judge Alex Kozinski, chief judge of the U.S. Court of Appeals for the Ninth Circuit in San Francisco, appears to put the kibosh on the case at last. The judge clearly intends his verdict to be the headshot that kills off this zombie litigation.

"At some point, litigation must come to an end," Kozinski concluded. "That point has now been reached." (Click here to read Kozinski's ruling.)

Kozinski acknowledged the Winklevosses' claim that Facebook led them to believe their shares were worth $35.90 at a time when the company actually believed them to be worth less. But with the help of a "team of lawyers and a financial advisor," the Winklevosses made a legally binding deal, and now they have to stick to it, Kozinski said.

"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," he wrote.

Besides, Facebook's recent stratospheric valuations have made the whole fight somewhat moot.

As Kozinski dryly put it: "They made a deal that appears quite favorable in light of recent market activity." To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 16,408.54 -16.31 -0.10%
Nasdaq 4,095.52 9.29 0.23%
S&P 500 1,864.85 2.54 0.14%
Treasuries 2.72 0.08 3.19%
Data as of 7:57pm ET
Company Price Change % Change
Bank of America Corp... 16.15 0.00 0.00%
Facebook Inc 58.94 0.00 0.00%
General Electric Co 26.56 0.00 0.00%
Cisco Systems Inc 23.21 0.00 0.00%
Micron Technology In... 23.91 0.00 0.00%
Data as of Apr 17
Sponsors

Sections

General Mills has scrapped a controversial change to its fine print that some read as eliminating customers' right to sue the company. More

Obamacare sign ups hit 8 million, though final enrollment remains to be seen. More

Office for iPad move is a symbolic victory for Nadella's Microsoft, but the company is still weighed down by many of the same old issues. More

Schwinn, Trek and Cannondale are all iconic American bicycle brands. But none of them are made in the United States. More

As Detroit moves closer to reaching a bankruptcy deal, retired civilian workers are poised to be left worse off than firemen and police officers. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.