Ninth Circuit Upholds Facebook Settlement


The U.S. Court of Appeals for the Ninth Circuit upheld a lower court's approval of a settlement agreement entered into by The Facebook, Inc. and individual litigants, Cameron and Tyler Winklevoss and Divya Narendra (the Winklevosses), who claimed that the idea for the popular social networking site had been stolen from them. The Winklevosses and their own social networking site sued Facebook and its founder Mark Zuckerberg in Massachusetts and Facebook countersued in California. The California court eventually dismissed the Winklevosses for lack of personal jurisdiction and the parties were ordered to mediate.

During the course of the mediation, the parties signed a handwritten, one-and-a-third page term sheet and settlement agreement. However, after the agreement was signed, a dispute arose during negotiations over the final details, and Facebook moved for an order enforcing the handwritten settlement agreement. The lower court found the agreement enforceable and the Winklevosses appealed. Facebook also sought an order from the lower court requiring the Winklevosses to sign more than 130 pages of documents to effect the settlement, including a stock purchase agreement and other papers, which the court refused to grant.

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