Most Ridiculours Lawsuits: Botched Facebook IPO Spawns Botched Lawsuit With Wrong Plaintiff

The lawyers at Johnson & Weaver were lightning-quick to accuse Facebook and its underwriters of a multitude of errors after the social-networking giant’s botched initial public offering on May 18. Only there was a problem, a big one: The law firm apparently never had a client.

San Diego-based Johnson & Weaver supposedly found a plaintiff named Matthew Pilgram, fully investigated his claims and filed a lawsuit in San Mateo County Court in California on May 23, just three business days after Facebook went public.

In the 17-page complaint, attorney Frank Johnson accused Facebook, Mark Zuckerberg, Morgan Stanley and some 50 other defendants of making “materially false and/or misleading” filings in connection with the IPO. A collection of prominent class-action firms including Barrack Rodos & Bacine, Glancy Binkow and Wolf Haldenstein soon joined in the effort to represent the disgruntled investor.

After the case was removed to federal court Pilgram learned about it, and on Monday he sent an e-mail to the court saying “apparently a lawsuit has been filed on my behalf that I did not authorize.”

Attorneys contacted me regarding litigation after learning I had bought IPO shares. I discussed the potential case with them but never authorized them to file a lawsuit and cut off communications with them. Today, through a Google search I find they have filed a lawsuit.

What’s the penalty for filing a lawsuit based on the false premise that you have a client? Nothing, apparently. On Tuesday, Johnson quietly filed a dismissal of the Pilgram case, saying that “based upon a miscommunication with Plaintiff” (who in fact was not a plaintiff), “counsel hereby dismisses this action without prejudice.” He filed it “without prejudice,” meaning he reserved the right to revive the lawsuit with a different, and presumably real, plaintiff ...

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