Yesterday the Ninth Circuit Court of Appeals issued its decision in Tyler and Cameron Winklevoss’s lawsuit, dismissing their attempt to void their settlement agreement with Facebook. The twins claim Mark Zuckerberg stole their ideas for the website that became Facebook, and sued. The history of the litigation is somewhat tangled (the 9th Circuit briefly summarizes it in the first few paragraphs of its opinion) but it comes down to the parties’ agreement to settle the suit by Facebook paying the twins $20 million in cash and giving them shares of Facebook stock–now worth about $200 million. Some time later the twins sued again to overturn the settlement agreement, claiming Facebook concealed material information about the stock’s value. The trial court rejected their claim and they appealed to the 9th Circuit, which was not swayed by their arguments. After rejecting each in turn the court offered this summary:
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. And the courts might have obliged, had the Winklevosses not settled their dispute and signed a release of all claims against Facebook. With the help of a team of lawyers and a financial advisor, they made a deal that appears quite favorable in light of recent market activity. See Geoffrey A. Fowler & Liz Rappaport, Facebook Deal Raises $1 Billion, Wall St. J., Jan. 22, 2011,at B4 (reporting that investors valued Facebook at $50 billion—.33 times the value the Winklevosses claim they thought Facebook’s shares were worth at the mediation). For whatever reason, they now want to back out. Like the district court, we see no basis for allowing them to do so. At some point, litigation must come to an end. That point has now been reached.
The New York Times reports that the Twins will seek en banc review of the decision.