Mother of all lawsuits quietly filed last month vs. Facebook in Delaware | Hacker News Reader

Mother of all lawsuits quietly filed last month vs. Facebook in Delaware

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379 pointsjd115113 comments

Aside from my personal experiences in this area, you can ask the Winkelvoss twins what happened when the judge in their case found out that Zuckerberg/Facebook’s lawyers lied and withheld evidence that would have gotten them a bigger payout. As the person who represented them told me: “Those guys can lie to the government and get away with it. I’ve seen them do it.”

So, no, this is not the “mother of all lawsuits.” Nothing will happen to Mark Zuckerberg or Facebook. And, yes, there seems to be something rotten in the American political system — on both sides of the aisle — that’s keeping these scumbags protected.

They play ball with intelligence and law enforcement agencies providing something to them the government could never practically or legally procure otherwise.

Between NSLs and Patriot Act, pretty sure the government gets anything it wants at any time with zero consequence.

Maybe. But there's something to be said for getting a hard drive full of juicy info from 'just some guy' who has zero oversight now and forever.

And even if the only thing you're accomplishing is giving the secret judge a break from rubber stamping all of your requests, I can see that having some inter-department social currency benefits.

But fundamentally, it needs to be out there in order to be obtained by a TLA. Facebook and Friends help by giving us a reason AND a platform for us to put information out there that can then be tapped.

Paypal got similar inexplicable treatment from the government. Other places trying to do online banking got regulated out of existence, often involving legal trouble for the individuals involved. Paypal, tho, apparently those regulations and laws behind them just don't apply.

Remember E-gold?

As I remember it, PayPal worked to enforce many of the same laws the government requires of banks, as well as helps track transfers for taxation reasons.

I don’t think it’s a conspiracy, PayPal just made sure they were on the side of the law that allowed them to operate without government interference.

The rottenness is that our government wants to wield social media as a propaganda tool.

They never discuss breaking these companies up, they only do things like bring Zuckerberg in and try to prod him into regulating his platform in their direction.

That and lobbyist padding their wallets.

there seems to be something rotten in the American political system — on both sides of the aisle

There only being two sides on the aisle is one of the main problems. It's an oligarchy, not a representative democracy.

two ^official^ sides

> representative democracy

And given the degree to which lies have gotten better at mutating and spreading, while critical thinking is barely taught in schools, even if this "democracy" was representative it might not work too well.

At this point, I think the only way to save the user base of this dying old system is a slow migration towards competing co-op social services... but once again -- without critical thinking -- most people would likely choose by lowest price and end up with much of the same.

I am skeptical of the notion that teaching critical thinking will do people any good in fighting lies.

People believe in the narrative they want, and they'll employ tools to do that.

Very likely not a one-stop solve-all. But also very likely part of the tool set.

Actually, I think that the system with "first-past-the-post" voting, tied with small voting districts is much better for representative democracy.

Yes, the one visible result is that you get only two political parties (because being third, with no prospects of winning makes smaller parties to give up). However, the two parties tend to be internally much more diverse than you get in other systems.

The system where there's a proportional representation means that the elections now become nationwide - first you count votes for each party, to determine how many seats they get, and only then you assign seats to individual candidates.

The way it is implemented in Europe gives two terrible results:

1. The leader of the party now have much more power over individual candidates, since none of them can get into the parliament on their own, they need support of the nationally-recognized party. In American system individual congressperson is free to say "fuck you" to their party leader and will still be able to win their seat in the next elections.

2. After some small party gets into the parliament they are basically powerless, they have no way of delivering on their promises to their voters, so instead they focus on "just being there" and receiving Member of Parliament salaries. Basically, small parties are just there for comic relief.

Re point 1: Depends on the country, but you can just found your own party in at least some EU countries.

Re point 2: Usually small parties in Europe do have a say in government, if they form a coalition with one of the big parties without an absolute majority (>50%). Yes, the big party will push through more of their own ideas, but the smaller party will get to make their own laws too - the big partner needs them to vote on their own laws too, so they can’t just ignore the smaller partner.

In some cases the parties even have received a roughly equal number of votes, so they get an almost equal say.

> The way it is implemented in Europe gives two terrible results:

You mean EU parliament or european countries in general? Because there are some(e.g. germany) where you have two votes, one for a direct candidate im your district which can get elected independently, and one for a party, to also give smaller parties a chance, which is a neat compromise. On the other hand, if you have e.g. 2 big parties and several small ones, the small ones can still make a difference when creating a coalition with one of the larger ones. Of course, there will be small parties only "receiving salaries", but tbh there will be people like that in the bigger parties, too.

The "right wing" doesn't really care about free speech, they are only talking about it because they "feel" that they are being "suppressed".

What is modern journalism’s obsession with putting “quietly“ in the headline of everything they weren’t explicitly informed of in advance? They seem to use it to imply some kind of deceitfulness, when usually it means they actually just had to do their job and investigate a little bit.

I would not expect more from someone who uses "mother of all lawsuits" as well.

It's mentioned in the thread specifically as to why it was 'quietly' :

> As to how this suit wasn't noticed, Delaware Chancery charges a fortune per document limiting public awareness

This isn't to say it was intentionally quietly added, just that it wasn't noticed as easily as some others given the quantity of documents required to pay 200+ iirc

"quietly" implies the suit wasn't accompanied by a PR campaign or media outreach effort

Eh... I've never seen quiet as implying deceitfulness. If anything, to me it implies sincerity. It means someone is using the court system to address a real grievance they have; not just virtue-signal and grandstand for the public, like other recent filings against FB (e.g. the FTC filing an anti-monopoly suit that got summarily dismissed for being unworkably low-quality).

And I have no idea how much effort it would take to find such a lawsuit amidst the huge shuffle of papers that must be the Delaware Chancery.

Agreed. I read "quietly" as "without any money or effort put into advertising, PR, or messaging the fact."

If someone sues Facebook and does the media circuit, advertises the fact, and gets their face out there, and the case just isn't likely to succeed on the merits, that's one thing. If someone sues Facebook, gets to discovery, survives motions to dismiss and "doesn't tell a soul" (though public will find out from court records) that meets my definition of doing it "quietly."

You are perhaps right about what is implied here. But I have noticed the same trend outside of the media in general. There's currently an uproar in my town and I've seen 3 or 4 very outspoken people, including hearing it on a radio interview, say that the school board "quietly" reinstated mask mandates in school, and there's a lot of implication of secret, ulterior motives.

But I also don't understand it. You can't "quietly" enforce a policy against every kid in the school, especially if you expect them to come to school with masks in hand ahead of time. And the uproar started after a widely advertised meeting that was broadcast online and that had solicited public comment. There was nothing quiet about it.

I think it's just a cheap tactic used to convey a lack of trust.

I get what you're saying. I think in general, everything salient and attention-grabbing gets abused, so it all starts leaving us a little cold and cynical towards salient things in general. Like how we've been desensitized by overexposure to violence and sex, but now creeping into more abstract and intellectual things.

On the face of it, it's bizarre that an innocent word like "quietly" has come to have irritating connotations of clickbait for so many. But thousands of people are having meetings every day to discuss how best to grab our attention by any means necessary, and this is the result.

You are correct, it's a trendy word that is often overused for hype. I see it most often used in what we quaintly used to call the "blogosphere" in the ancient times of ten years ago.

But this isn't a journalist. Or a news publication. The closest the author ever came was working for a sports outlet a long time ago.

I interpreted quietly as meaning there was no previous media attention. So it means they are among the first to uncover it. Not necessarily that it is deceitful

It's something substantive and clearly newsworthy that happened as a matter of public record over a month ago without any media attention. That's pretty much the definition of "quiet" in the context of a notable news event.

For comparison's sake, it's extremely common for those who file lawsuits of this type and magnitude to announce that they are doing it. These plaintiffs did not and that's a relevant detail in the narrative.

The issue is DE chancery courts which charge a lot for filings. No one saw this until yesterday. Links to the complaints here:

https://rfob.medium.com/exclusive-facebook-executives-sued-o...

Only slightly better than adding "slams" to every headline.

I don't know why you say "modern journalism" when the guy who tweeted this isn't a journalist. Just need a chance to dunk on someone?

I would not use the phrase "modern journalism" to refer to sites like theverge.com. Instead, I would call them "modern media" which is a stream of opinion pieces that might be better described as commentary on some public event combined with a much larger group of stories that are really press releases or advertisements. Take a look at the "stories" on their main page:

* "Kids who grew up with search engines could change STEM education forever" - Now ask yourself -- is this a "news" peice? Is it journalism, or is it opinion?

* "Apple won’t let Fortnite back on iOS until the Epic v. Apple verdict is final" -- What the hell is this? Isn't it normal that verdicts take effect when they are final? What exactly is the story here? There is no story, there is outrage commentary.

Then we have intermixed with the above opinion pieces various P.R. stories and product reviews, none of them labelled as advertisements, all mixing PR with what was traditionally the role of a reviewer:

* "Microsoft’s fall Surface event: the 7 biggest announcements"

* "MICROSOFT SURFACE LAPTOP STUDIO HANDS-ON: ONE WEIRD, POWERFUL COMPUTER"

* "How to preorder all of the new Surface hardware"

* "The Surface Go 3 gets new Intel processors"

* "Microsoft announces Surface Pro 8 with bigger 13-inch 120Hz display and Thunderbolt"

* "Microsoft’s new mouse has a shell that’s 20 percent recycled ocean plastic"

* "How to watch Microsoft’s Surface event today"

* "Gitamini is a cute, compact, cargo-carrying robot that will follow you around like a dog"

* "HP’s new 11-inch tablet has a flipping webcam"

Whatever this is, it's not journalism.

I think "quietly" usually just implies that the company did not issue a press release.

I don't think it ever has anything to do with the media being informed "in advance".

> What is modern journalism’s obsession with putting “quietly“ in the headline of everything they weren’t explicitly informed of in advance?

Could you give other examples?

Quietly makes sense to me - the parties sought no publicity (if I understand correctly).

Search for “quietly” on HackerNews and you’ll get quite literally hundreds of examples

Can someone please sum up the wider context? What is happening to FB and what lawsuits are in play? Is this a civil case or a criminal case? Can Zuckerberg and co face jail time? Or is this just routine cost-of-business some-state-shaking-down pay-fine-and-carry-on for FB?

From a layman picking up occasional news, it feels like states and countries and even investors often shake down the big tech companies, using court cases to extract money from tech companies for arbitrary perceived transgressions but really the money just goes to some unaffected government to fund other purposes and that these states and investors and things just take it in turns to demand money.

Not from the US and IANAL, but my guess this is a civil case, so no jail time.

Using the tech company label as if it was a random startup is not really relevant given the place Facebook has in our societies. Also it's not 00's "don't be evil" anymore, governments should absolutely shake down ad tech IMHO.

Shake down is sort of a silly phrase but I mean I run an adtech startup and the space could use more regulation to be sure. Right now its not really serving anyone except the adtech companies themselves. Neither consumers (privacy violations) nor advertisers (dealing with fraud both explicit and implicit through friendly fraud with bunk data) are getting what they want out of it unless you're an F500 bullying your way into solutions with cash (but even then not always)

> Right now its not really serving anyone except the adtech companies themselves.

There's also that pesky detail where dictatorships abuse adtech to subvert democracies, stir unrest, and force authoritarian trojan horses.

> dictatorships abuse adtech to subvert democracies

How? By buying ads?

Modern day ad tech is all about tracking and targeting groups based on their interests, something any government trying to deal with dissidents will be interested in.

Abuse? Ad tech doesn’t give a shit. Ad tech is complicit. And it isn’t just dictatorships - it’s the powerful in general (eg how they censor pro-Palestinian content [1]).

What do you do in a situation like this? Simple. Let Facebook open source it’s policies and algorithms which regulate its platforms. Let us see what the watchers have deemed worthy of censorship and intervention. Let Facebook publish how much the Egyptian and Saudi governments spend on their platforms to undermine their citizens. They won’t though because Facebook, in this area (foreign power related) has carefully ensured that it remains aligned with US foreign policy positions.

[1] https://www.buzzfeednews.com/article/ryanmac/facebook-employ...

If a company is raking it in and not paying taxes then I don't see a problem with holding them to any applicable fines.

Lawsuit by definition means a case brought by a common person and not legal authority. So it will be a civil case.

Lawsuit refers to civil cases, but legal authorities can and do file lawsuits. For example, the DOJ just recently filed a lawsuit to block the American Airlines-JetBlue merger.

That is not the definition of a lawsuit. A lawsuit can be brought by a person or entity against a person or entity.

It might be a shakedown or maybe a creative way to collect taxes :P

Taxes are the original bronze age shakedown.

I appreciate the sentiment, but I'm pretty sure there were protection rackets and shakedowns long before someone got the idea to rebrand them as "governments" and "taxes".

I’m curious whether things like this ever lead to the state declaring: “we’ve had enough of you, your company and product must be dissolved (not sold) and be no more”. Or whether they’ve ever used genuinely massive fines to deliberately achieve almost this effect. I imagine the number of employees that would be displaced would make this a hard sell politically quite apart from the matter of whether they can actually do it.

If its proven that Facebook intentionally allowed the data to flow out to third parties as opposed to a 'hack' as they put it, of which the data wasn't consented to be given, then I think there is a duty of the regulators / authorities to protect the interests of the public who are effected.

But that is probably wishful thinking.

There are certainly cases where from a legal perspective the company is no longer permitted to operate. Arthur Anderson following the Enron fraud is a good example.

Not in the realm of possibility here, for many reasons. Even if it were, the number of employees issue- 50,000- would be quite minor in the list of considerations. Amazon would just hire them all outright.

Right now lots of parties are pulling on threads, seeing what unwinds. The most significant possible outcome I see is Zuck being forced to divest- the only change which could impact governance- and relatedly several senior execs and Board members being faced with criminal charges.

Another potential significant outcome is a mandated break up, similar to AT&T, though exactly on what lines and terms is extremely challenging to conceive.

I put the chances on either as pretty low.

> “we’ve had enough of you, your company and product must be dissolved (not sold) and be no more”.

I think US govt last did this with Arthur Anderson in early 2000's and lot of people lost their jobs, after that US Govt and private companies just pay fines and call it a day.

Originally corporations were given permission by the government to exist individually based on them serving some public good. That's why the owners were given limited liability.

"In summary, all corporations are state-chartered; given special privileges by the state, which used to be conditional on them serving some public good. Public corporations are directly owned by the public via equity shares. And large corporations are the beneficiaries of both state and federal sponsorship, which includes subsidies funded by the tax paying public." [0]

[0] https://ptolemy3.medium.com/but-corporations-are-private-com...

Shake down is a completely unfair characterization of what's happening here. Facebook is being sued because they're alleged to be damaging their shareholders in three ways.

1. They're using corporate funds to protect Zuckerberg personally.

2. They're in violation of an FTC Consent Decree relating to Cambridge Analytica which poses a material risk to shareholders as there are financial penalties for violating the agreement.

3. They're misleading Government and Customers about what data they're collecting and how they're protecting it, which opens them up to more lawsuits and further puts shareholders at risk.

Running a public company is a two-way street. If you want access to public financing and the ability to shield individuals from personal financial/legal risk, you need to abide by certain rules relating to reporting and transparency.

If you don't want to be transparent, you don't have to IPO.

Yes. There are many other threads being pulled here as well. Another is the indication of evidence of criminal acts by executives and the Board- insider trading.

From a long term perspective, the only potential significant outcome of this activity is Zuck being forced to divest.

Pretty sure their shareholders are doing just fine :D

It's a shake down if the plaintiffs (who in this case are pension funds with big amounts of shares? When I first read the article, where it talked about Rhode Island etc, I assumed it was a state and not their pension fund) are just going to settle for some money in return for shutting up and letting everything continue as normal afterwards?

Why would shareholders sue the company they own shares in if their goal was to get a payout? Surely when the company reports such a payout the share value will reflect that. It seems like this case should be taken at face value, the shareholders want the company to change its behavior so that their shares can be worth more in the future.

If all the shareholders were to sue and divide the payout according to the number of shares they hold then yes, that would be a losing proposition. If only some of the shareholders sue, however, the payout from the suit might exceed the drop in the value of their own shares, at the expense of other shareholders who are not parties to the suit.

Too true. They shook down the banks and now they're broke, next target is tech!

> As to how this suit wasn't noticed, Delaware Chancery charges a fortune per document limiting public awareness.

Isn't this the document here:

https://fingfx.thomsonreuters.com/gfx/legaldocs/byvrjogbzve/...

Yes. Someone paid a fortune for that document.

Thanks! So this is about retirement funds going after some board and execs for breach of fiduciary duties given the earlier FTC findings.

seeking to remedy the Individual Defendants’ breaches of fiduciary duties and/or Brophy insider trading violations from June 26, 2013 through July 23, 2019, the date before the FTC announced the $5 billion fines on Facebook the following morning (the “Relevant Period”).

Delaware is infamous for protecting their corporations.

What Deleware lets it's 501c3 get away with should be illegial.

There's a reason so many businesss use Deleware as their address.

I'm suprised Biden didn't get more flack over Delaware's history of protecting some raunchy companies.

> What Deleware lets it's 501c3 get away with should be illegial.

Like what?

Facebook is the in plain sight backdoor for the 3 letter agencies, no fine that will shut them down will ever be issued by any US court so long they collaborate.

This is like wrestling on tv, but with legal entities.

Unrolled: https://threadreaderapp.com/thread/1440304941428473857.html

I'm no lawyer but this looks damning - It says he lied to Congress.

I'm not in the US, but isn't that pretty serious (if proven!)?

Technology executes lie in front of Congress all the time. It's only serious when someone calls them out and decides to pursue it.

You could do any kind of crime and potentially get away with it. That’s not a good measure of how serious it is.

But the statistic of how often doing X gets somebody in jail is very important measure. (there is a fine for littering, but people constantly drop cigarette butts or gum on the ground, because there is no enforcement. And since there is no enforcement it is perceived as not a serious thing / acceptable behaviour)

Edit: to add to that, there are two dimensions: potential punishment and probability of enforcment. Both are equaly important.

> It's only serious when someone calls them out and decides to pursue it.

How many technology executives who have clearly lied before Congress have been charged with a crime?

https://www.rollcall.com/2018/11/30/cohen-among-select-few-c...

> Pursuing criminal charges against those who are untruthful to Congress would be a huge shift from tradition. “Almost no one is prosecuted for lying to Congress,” attorney PJ Meitl wrote in a 2006 law review article on the topic, “in fact, only six people have been convicted of perjury or related charges in relation to Congress in the last sixty years.”

It’s only illegal if you get caught.

> Technology executes lie in front of Congress all the time.

Do you mean the technology is programmed to present incorrect data or that tech company executives lie?

Didn't Bill Clinton lie to congress too?

He was accused of lying to Congress, which resulted in an article of impeachment that could have removed him from office had he not been acquitted. Lying to Congress is pretty serious indeed.

Technically no. But I guess you could describe what he did was to lie with the truth. He manipulated his accusers to define sex precisely so that he could honestly answer that he had not had sex.

Now if only if this whole sordid affair had been rock bottom rather than the beginning of the decline but that's another story...

Depends on the definition of the word "is".

> There's no "there" there!

Sorry, wrong Clinton.

Everyone lies to Congress and all the people in Congress are well established liars.

It is pretty serious if a majority in both houses of Congress want to make trouble for you, otherwise not a problem.

Hm, Zuckerberg isn't exactly well liked by anyone group in politics, at least not publicly.

No, they love his Facebook thing but they want his bumblefuck ass gone so the company can be professionally managed.

IIRC the CEO of Twitter did lie to congress recently and nothing happened to him. It seem like its not a lie if you cant proof that what someone said was known to be wrong at that time by the person who said it.

James Clapper's lies while under oath suggest it needn't be.

Not wittingly, at least.

But that's bulls*t on roller-skates. He had notice of the question, he knew the truthful answer. He chose his answer he gave and not even on the spur of the moment.

Cold, calculated, pre-meditated lie whilst under oath. That, sadly, as much as I hate to acknowledge it, is just a /fact/. It's every bit as nuts as it sounds if not worse.

yup

I mean, they lie to us all the time, so turnabout is fair play?

I think the problem is more related to the lack of technical knowledge in congress, and so the ability to even know what is a lie in this technical field.

Also Facebook would have some good lawyers to get him out of it.

Unfortunately people lying under oath is typically not punished as severely as you would imagine. And a lot of times the risk/reward of the lie weighs heavily in favor of being deceitful.

It is a serious crime, but perjury is hard to prove because you need to show that Zuckerberg not only lied, but did so intentionally.

Facebook is fairly unpopular amongst both political parties so it wouldn't surprise me if at some point in the future, they were smacked down by an antitrust lawsuit or beaten up by Congress.

And they’re usually prepped to sprinkle in lots of weasel words when they testify.

“If I’m not mistaken...”

“If I’m understanding the question correctly...”

“I believe the answer is...”

So if and when they’re caught they weren’t lying they were simply misinformed or innocently misunderstood.

Who are the plaintiffs?

Mark Zuckerberg, Sheryl Sandberg, Peggy Alford, Marc Andreessen, Kenneth Chenault, Peter Thiel, Jeffrey Zients, Erskine Bowles, Susan Desmond-Hellmann, Reed Hastings, Jan Koum, Konstantinos Papamiltiadis, David Fischer, Michael Schroepfer, David Wehner.

Those are the defendants not plaintiffs.

Plaintiffs appear to be the Rhode Island employees' retirement fund, and the City of Warwick retirement system, as investors in the business.

Also a California teachers retirement fund.

CalSTRS is the 800lb gorilla here.[0]

[0]https://www.calstrs.com/calstrs-glance

From: https://fingfx.thomsonreuters.com/gfx/legaldocs/byvrjogbzve/...

KAREN SBRIGLIO, FIREMEN’S RETIREMENT SYSTEM OF ST. LOUIS, CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM, CONSTRUCTION AND GENERAL BUILDING LABORERS’ LOCAL NO. 79 GENERAL FUND, CITY OF BIRMINGHAM RETIREMENT AND RELIEF SYSTEM, and LIDIA LEVY, derivatively on behalf of Nominal Defendant FACEBOOK, INC.

This lawsuit isn’t as big of a deal as the tweet thread makes it out to be. This Jason dude is just being bombastic to get more Twitter reach.

Basically some investors (pension funds) are suing Facebook over the whole Cambridge analytica scandal again.

Companies get sued all the time by shareholders whenever there’s a scandal because it usually involves a risk to the business that wasn’t disclosed to shareholders. As Matt Levine likes to say “everything is securities fraud.”

This is not a government anti-trust suit.

You realize that by litigating this stuff, it all goes out into the open, right

CEO of Clickbait trade association says this is important

> mother of all lawsuits

> Twitter thread

I can't with this trend..

So should I buy PUTS??

I can't help but feel they might have avoided some of the antitrust scrutiny if not for lying about Whatsapp (repeatedly), or launching attack ads against Apple, or... there's a few different things but I always feel like they don't really care about whether they draw attention to themselves do they?

Is this an antitrust suit?

Yes

> and again, this lawsuit isn't about politics but instead antitrust, governance and SEC-related failures. A reminder to the antitrust matters: one core allegation is Facebook accelerated its shift to mobile leveraging data reciprocity deals. It's very much in here, too. /13

No, it isn’t. This is not the US government suing Facebook for anti-trust.

It’s a group of investors suing Facebook.

No, it's not. Look at the actual complaint.

This is just a waste of time, money, and resources. The problem lies fundamentally at the lowest level of our system. "incentive"

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