Snapchat Has Tried Twice To Settle Its Lawsuit With Ousted Co-Founder Reggie Brown

Snapchat Evan Spiegel
Snapchat CEO Evan Spiegel Flickr via Rorycellan

Snapchat and its ousted co-founder Reggie Brown have tried and failed to settle their lawsuit twice, according to legal documents.

The first settlement talk occurred on May 18, about five weeks after CEO Evan Spiegel, CTO Bobby Murphy and their Stanford classmate Brown gave depositions. This was right before Snapchat’s round of financing at an $US800 million valuation was reported. The second settlement attempt occurred a few weeks later.

“On May 18, 2013, the parties agreed to a voluntary ‘stay’ of the case to pursue settlement,” the court document states.

It’s unclear who walked away first or why talks broke up, but presumably it’s because the two sides couldn’t agree on a price. Snapchat is currently worth $US2 billion.

Brown is after one-third of Snapchat, which he says he rightfully owns due to the fact that he had an implied partnership with Spiegel and Murphy after working with them for a summer on the app. He also came up with the idea for disappearing photos, which Spiegel admitted during his April 2013 deposition. Currently, Brown owns no equity in Snapchat.

Prior to a falling out over Snapchat in 2011, Brown and Spiegel were good friends. A few months before the final blow-up fight that ended their alleged business partnership, Spiegel texted Brown a message which stated in part, “I love and miss you dude.” Brown and Murphy weren’t as close, although they were Kappa Sigma fraternity brothers.

Right now, the lawsuit is in a lull. Snapchat’s lawyers are trying to move the case out of California’s state court and into federal court. Defence teams often try to do this for strategic reasons. In California state court, if the lawsuit goes to trial, only nine of twelve jurors need to side with Brown for him to win. In federal court, Brown would need all twelve jurors to side with him to defeat Spiegel and Murphy.