Facebook 2013 Annual Report Download - page 33

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Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
As of December 31, 2013, we leased office and data center facilities around the world totaling approximately 2 million square feet,
including one million square feet for our corporate headquarters in Menlo Park, California. We have data centers in the United States,
including data center facilities that we own in North Carolina and Oregon and leased data center facilities in California and Virginia. We
also own a data center facility in Lulea, Sweden. We believe that our facilities are adequate for our current needs. To support planned
future growth, we are currently making significant investments to expand our corporate headquarters in Menlo Park, California and
constructing a new data center in Altoona, Iowa.
Item 3. Legal Proceedings
Paul D. Ceglia filed suit against us and Mark Zuckerberg on or about June 30, 2010, in the Supreme Court of the State of New
York for the County of Allegheny, claiming substantial ownership of our company based on a purported contract between Mr. Ceglia and
Mr. Zuckerberg allegedly entered into in April 2003. We removed the case to the U.S. District Court for the Western District of New
York, where the case is now pending. In his first amended complaint, filed on April 11, 2011, Mr. Ceglia revised his claims to include an
alleged partnership with Mr. Zuckerberg, he revised his claims for relief to seek a substantial share of Mr. Zuckerberg's ownership in us,
and he included quotations from supposed emails that he claims to have exchanged with Mr. Zuckerberg in 2003 and 2004. On March 26,
2012, we filed a motion to dismiss Mr. Ceglia's complaint and a motion for judgment on the pleadings. On November 27, 2012, Mr.
Ceglia was indicted on mail and wire fraud charges based on his prosecution of this lawsuit. On March 26, 2013, the magistrate judge
overseeing the matter issued a report recommending that the court grant our motion to dismiss and that it deny as moot our motion for
judgment on the pleadings. We continue to believe that Mr. Ceglia is attempting to perpetrate a fraud on the court and we intend to continue
to defend the case vigorously.
Beginning on May 22, 2012, multiple putative class actions, derivative actions, and individual actions were filed in state and federal
courts in the United States and in other jurisdictions against us, our directors, and/or certain of our officers alleging violation of securities
laws or breach of fiduciary duties in connection with our initial public offering (IPO) and seeking unspecified damages. We believe these
lawsuits are without merit, and we intend to continue to vigorously defend them. On October 4, 2012, on our motion, the vast majority
of the cases in the United States, along with multiple cases filed against The NASDAQ OMX Group, Inc. and The Nasdaq Stock Market
LLC (collectively referred to herein as NASDAQ) alleging technical and other trading-related errors by NASDAQ in connection with
our IPO, were ordered centralized for coordinated or consolidated pre-trial proceedings in the United States District Court for the Southern
District of New York. On February 13, 2013, the court granted our motion to dismiss four derivative actions against our directors and
certain of our officers with leave to amend. On October 8, 2013, the court heard argument on our motion to dismiss the consolidated
securities class action, as well as our motion to dismiss, and the plaintiffs' motion to remand to state court, certain other derivative actions.
On December 18, 2013, the court denied our motion to dismiss the consolidated securities class action. On December 23, 2013, the court
granted our motion to dismiss, and denied the plaintiffs’ motion to remand to state court, certain other derivative actions. In addition, the
events surrounding our IPO have become the subject of various government inquiries, and we are cooperating with those inquiries. Any
such inquiries could subject us to substantial costs, divert resources and the attention of management from our business, and adversely
affect our business.
We are also party to various legal proceedings and claims that arise in the ordinary course of business. Among these pending legal
matters, one case, Rembrandt Social Media, LP v. Facebook, Inc., et al., was scheduled to begin trial in December 2013 in the U.S.
District Court for the Eastern District of Virginia. In this case, the plaintiff alleges that we infringe certain patents held by the plaintiff.
The plaintiff is seeking significant monetary damages and equitable relief. The trial date was vacated in December 2013 and the case is
currently on appeal. We believe the claims made by the plaintiff in the Rembrandt case are without merit, and we intend to continue to
defend ourselves vigorously.
In addition, we are also currently parties to multiple other lawsuits related to our products, including other patent infringement
lawsuits as well as class action lawsuits brought by users and marketers, and we may in the future be subject to additional lawsuits and
disputes. We are also involved in other claims, government investigations, and proceedings arising from the ordinary course of our
business.
Item 4. Mine Safety Disclosures
Not applicable.