Social Network Prequel Dismissed

The Massachusetts Supreme Judicial Court affirmed the dismissal of claims brought against the Winklevoss brothers and others

In this case we examine the dismissal of contract and tort-based claims brought by software developer Wayne Chang against brothers Cameron and Tyler Winklevoss, the creators of ConnectU, Inc. (ConnectU), a social networking website that was a competitor to The Facebook, Inc. (Facebook). This action was filed following the settlement of protracted multistate litigation between Mark Zuckerberg, the founder of Facebook, and the Winklevoss brothers, Zuckerberg’s pre-Facebook collaborators. Chang’s complaint alleged that he was entitled to a share of the proceeds of the settlement between the Winklevoss brothers and Zuckerberg — $65 million in cash and stock tendered by Facebook in exchange for ConnectU.

Chang’s suit arises from the failed business relationship between Chang and his company, The i2hub Organization, Inc. (i2hub), the Winklevoss brothers, Divya Narendra, and Howard Winklevoss (collectively, the Winklevoss defendants), and ConnectU. Chang’s complaint also included malpractice claims against Scott R. Mosko (Mosko), an attorney who previously represented Chang, and Mosko’s law firm  (collectively, the Mosko defendants).

Chang asserted contract and tort claims against the Winklevoss defendants, claiming that they had breached at least one of two agreements entitling him to a portion of the Facebook settlement proceeds. Alternatively, Chang claimed that, in the absence of an enforceable agreement, he was entitled to recover damages through equitable claims, including quantum meruit and unjust enrichment. Chang’s equitable claims were dismissed for failure to state a claim, and his remaining contract and tort claims were subsequently dismissed on summary judgment. The professional negligence claims against the Mosko defendants were also dismissed on a motion pursuant to Mass. R. Civ. P. 12 (b), 365 Mass. 754 (1974), and final judgment entered for all defendants. On appeal, Chang claims error in the orders of dismissal and the decision on the defendants’ motion for summary judgment. We affirm, principally because we agree that the business relationship between Chang and the Winklevoss defendants ended long before the commencement of the settlement negotiations between the Winklevoss brothers and Facebook.

(Mike Frisch)