It all depends on what has been copied. If privileged info from the YC application was used they should be sued into the ground for that but I can't imagine that YC would ever let that happen. If they copied code, text or images from the product or webpages they should be slammed for that too. But if they just decided to clone the concept and did all the legwork themselves that would be a different matter.

The fact that they infiltrated the OPs comms channels certainly doesn't make them look good.