Three founders of ConnectU say Facebook creator Mark Zuckerberg stole their idea for the site while at Harvard.
Facebook has become a global phenomenon with about 31 million users, compared with ConnectU's 70,000.
A Federal case accuses Mr Zuckerberg of fraud and misappropriation of trade secrets, and asks for ConnectU to be given ownership of Facebook.
Last year, Facebook turned down a $1bn offer from Yahoo.
Facebook has asked a judge at a Boston district court to dismiss the case.
The ConnectU founders claim that while at college Mr Zuckerberg agreed to finish writing computer code for them, but that he stalled and eventually created Facebook using their ideas.
In court documents, Facebook's lawyers say that ConnectU's "broad brush allegations" had no evidence to support them.
"Each of them had different interests and activities," they said.
"Only one of them had an idea significant enough to build a great company. That one person was Mark Zuckerberg."
Like Facebook, ConnectU is designed to connect people online. Users create profiles and can post pictures and messages.
The legal action alleges that ConnectU founders Cameron and Tyler Winklevoss and Divya Narenda began developing a networking site in 2002.
They asked Mr Zuckerberg to help finish the code, which he agreed to, they claim.
"Such statements were false," the court documents allege.
"Zuckerberg never intended to provide the code and instead intended to breach his promise... and intended to steal the idea."