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The Law Blogger is a law-related blog that informs and discusses current matters of legal interest to readers of The Oakland Press and to consumers of legal services in the community. We hope readers will  find it entertaining but also informative. The Law Blogger does not, however, impart legal advice, as only attorneys are licensed to provide legal counsel.
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Tuesday, March 17, 2015

Lawsuit vs Zuckerberg Seeks to Rip Open Privacy

In Sunday's NYT business section, buried on page four, there was an interesting article about how Silicon Valley executives seek to keep all of the details of their life private, even while some of their tech industry billions are earned from culling once-private information from the rest of us.  The article featured domestic nondisclosure agreements, now popular among the Northern California technorati.

These nondisclosure agreements are executed by all of the contractors and agents that work on the private residences of these professionals.  Some of them are famous, others just newly wealthy employees of tech giants such as Twitter and Google.

Once such agreements are executed, sometimes they get breached.  This occurred most recently in a lawsuit filed against Facebook's Mark Zuckerberg, by his Palo Alto neighbor, a real estate investor, for an alleged fraud and breach of their written agreement.

According to papers filed in the lawsuit last week, representatives of the Facebook founder actively seek out such nondisclosure agreements.  The complaint outlines an agreement between Zuckerberg and his neighbor where the former agreed to purchase a parcel of the neighbor's investment property, adjacent to Zuckerberg's residence, below market value in exchange for the tech titan's liaison to power players in Silicon Valley.

As alleged in the lawsuit, the neighbor sold the parcel to Zuck, thus enhancing the privacy of his residence, but ignored his now-more-distant neighbor's pleas for entree to the powerful technorati per their agreement. So far, the suit has made it past the tech titan's dispositive motion for summary judgment.

So the jilted neighbor has not only filed suit and survived an early dismissal of the proceedings, but his lawyer now seeks punitive damages and is attempting to establish Zuckerberg's net worth through basic discovery requests.  It's one of those issues small-time lawyers can sink their teeth into.  Even if the Santa Clara County Circuit Court judge rebuffs the discovery request, appealing such a ruling can make a legal career.

A typical nondisclosure agreement will contain a clause setting out the purpose and scope of the confidentiality sought and the signatory's duty of nondisclosure. The scope of such duty will include the duty to immediately disclose a litigation discovery request propounded by a third party.

Such agreements also typically include agreed upon liquidated damages in the event of a breach. Some nondisclosure agreements even include an indemnification provision whereby the signatory agrees to pay for any and all damages to the protected entity for any losses or damages "arising out of" breach of the agreement.

As technology advances and Big Data becomes ever bigger and more valuable to companies such as Facebook, Google, and Twitter, privacy rights hang in the balance.  We here at this blog wonder if anyone logging onto a computer in the early 21st Century even has a right to privacy anymore.

This is something that legal scholars are currently debating.  Case in point: will you click the consent button embedded in the above hyperlink?

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