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Court: Mark Zuckerberg lives in California

Ceglia v. Zuckerberg, — F.Supp.2d —, 2011 WL 1108607 (W.D.N.Y. March 28, 2011)

Well, maybe that title is a bit of an oversimplification. Technically the court said that Facebook’s founder is domiciled in California. The issue came up in a breach of contract case against Zuckerberg and Facebook in federal court in New York.

Last year, one Paul Ceglia sued in New York state court, claiming he owns 84 percent of Facebook. Zuckerberg and Facebook removed the case to federal court. Defendants can do that if the court would have subject matter jurisdiction over the case. Since a breach of contract case arises under state law, there needed to be diversity jurisdiction in the case — that is, the parties must be domiciled in different states. (The amount in controversy must also be above $75,000. An 84 percent cut of a multibillion dollar company would seem to meet that criterion.)

Zuckerberg claimed that California had become his domicile since 2004. Ceglia challenged that assertion. In the ConnectU v. Facebook litigation, Zuckerberg had claimed New York as his domicile. And Zuckerberg had the burden of proving his change in domicile by clear and convincing evidence. The court found that such evidence existed, including the following biographical tidbits:

• He currently resides in California and has done so continuously since the summer of 2004.
• He has no other residences.
• He does not own real property in New York, California or elsewhere.
• In 2007, he purchased and registered a vehicle in California.
• He does not own or lease any other vehicles.
• Zuckerberg has paid California resident income taxes since 2004.
• He lists his California residence on his federal income tax returns.
• He has not filed taxes in any state other than California since 2004.
• Since at least 2007, he has been registered to vote in California and has voted in California.
• He possess a valid California driver’s license issued in 2006.
• His bank and brokerage accounts list his California residence and his investment advisors are located in California.
• Zuckerberg receives his mail at a California post office box and at his Facebook office.
• Most significantly, however, he is the owner, founder and CEO of a multi-billion dollar corporation with over 1,600 employees and a principal place of business within walking distance to his current residence in Palo Alto, California.

The court found that these facts overwhelmingly showed that as of June 2010 (when Ceglia filed the lawsuit), Zuckerberg had changed his domicile to California and intended to remain there indefinitely. Since diversity jurisdiction existed, the court ordered the case to remain in federal court.

Full post as published by InternetCases.com on March 30, 2011 (boomark / email).