“You better lawyer up …” (Litigation & ADR)

We’re almost done this semester! For Lessons 18 & 19, we will review the main stages of litigation, including the pleadings stage, discovery, and the decision whether to settle or go to trial. In other words, we will study how our legal system really works in practice when one party sues another. We will also consider several “alternative dispute resolution” or ADR methods (i.e. streamlined alternatives to costly and cumbersome litigation), such as mediation and arbitration.

To illustrate these dispute resolution lessons, we will focus in particular on Mark Zuckerberg’s alleged betrayal of his best friend and business partner — Facebook co-founder Eduardo Saverin — and we will revisit their resulting legal battle. Specifically, in the movie version of the bestselling book The Accidental Billionaires: The Founding of Facebook: A Tale of Sex, Money, Genius, and Betrayal, Eduardo threatens to sue Mark when he finally realizes that his original 30% stake in Facebook has been diluted all the way down to “point zero three percent.” In the most dramatic scene of the movie (pictured below), Eduardo confronts Mark: “You better lawyer-up, asshole, ’cause I’m not coming back for my 30 percent, I’m coming back for everything!” In other words, Eduardo threatens to sue Mark and Facebook for significant monetary damages … But what evidence will Eduardo need to prove his case, and how will he be able to obtain this evidence? To delve into these key questions, we will divide the class up into two opposing camps, Team Saverin and Team Zuckerberg:

  1. Team Saverin (go Brazil!): If you think that Mark breached his fiduciary duty to Eduardo by cheating him out of his original 30% equity stake in Facebook, what evidence will you need to prove Eduardo’s case?
  2. Team Zuckerberg (go nerds!): If you’re are on Mark’s side (if you think Mark did not breach any fiduciary duties and was right to force Eduardo out of Facebook), what evidence will you need to defend Mark against Eduardo’s lawsuit?

About F. E. Guerra-Pujol

When I’m not blogging, I am a business law professor at the University of Central Florida.
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