Court Opinion

ID: 8207331
Source: CourtListenerOpinion
Date Created: 2022-09-19 20:02:33.767808+00
Date Added: 2024-06-11T16:41:24.510580
License: Public Domain

COURT OF CHANCERY
                                         OF THE
                                   STATE OF DELAWARE
KATHALEEN ST. JUDE MCCORMICK                                           LEONARD L. WILLIAMS JUSTICE CENTER
        CHANCELLOR                                                        500 N. KING STREET, SUITE 11400
                                                                         WILMINGTON, DELAWARE 19801-3734

                                        September 19, 2022

     Peter J. Walsh, Jr., Esquire                         Edward B. Micheletti, Esquire
     Kevin R. Shannon, Esquire                            Lauren N. Rosenello, Esquire
     Christopher N. Kelly, Esquire                        Skadden, Arps, Slate, Meagher & Flom LLP
     Mathew A. Golden, Esquire                            920 N. King Street, 7th Floor
     Callan R. Jackson, Esquire                           P.O. Box 636
     Potter Anderson & Corroon LLP                        Wilmington, DE 19899-0636
     1313 N. Market Street
     Hercules Plaza, 6th Floor
     Wilmington, DE 19801

     Brad D. Sorrels, Esquire
     Wilson Sonsini Goodrich & Rosati, P.C.
     222 Delaware Avenue, Suite 800
     Wilmington, DE 19801

                   Re:    Twitter, Inc. v. Elon R. Musk et al.,
                          C.A. No. 2022-0613-KSJM

      Dear Counsel:

            Defendants Elon R. Musk, X Holdings I, Inc., and X Holdings II, Inc.

      (“Defendants”) have moved pursuant to Court of Chancery Rule 59(f) for reargument of

      my September 7, 2022 letter decision (the “Letter Decision”).1

            The Letter Decision resolved Defendants’ Fourth Discovery Motion, which sought

      an order compelling Plaintiff Twitter, Inc. (“Plaintiff”) to collect and review Slack

      messages for forty-two document custodians.        In the Letter Decision, I noted “the

      1
        See C.A. No. 2022-0613-KSJM, Docket (“Dkt.”) 494 (“Second Mot. for Reargument”);
      see also Dkt. 428 (“Letter Decision”).
C.A. No. 2022-0613-KSJM
September 19, 2022
Page 2 of 6

substantial disparity in the discovery burden placed upon the warring factions” and that

“Plaintiff’s had it far worse,” such that I was “hesitant to impose a large additional

discovery burden on Plaintiff at this stage in litigation.”2       When evaluating the

burdensomeness and proportionality of Defendants’ ask, I examined the parties’ exchanges

concerning the scope of discovery as to non-email custodians. In those exchanges,

Defendants sent two separate proposals in which it limited its request for Slack messages

to eight custodians. Noting that Plaintiff had already produced messages from six of those

custodians, I ordered Plaintiff to produce Slack messages from the other two custodians. I

believed—and continue to believe—that this outcome was within the discretion that a court

has to assess burdensomeness and proportionality.

         “The Court will deny a motion for reargument ‘unless the Court has overlooked a

decision or principle of law that would have a controlling effect or the Court has

misapprehended the law or the facts so that the outcome of the decision would be

affected.’”3 If a motion for reargument “merely rehashes arguments already made by the

parties and considered by the Court” in rendering the decision for which reargument is

2
    Letter Decision at 2.
3
 Nguyen v. View, Inc., 2017 WL 3169051, at *2 (Del. Ch. July 26, 2017) (quoting Stein v.
Orloff, 1985 WL 21136, at *2 (Del. Ch. Sept. 26, 1985)).
C.A. No. 2022-0613-KSJM
September 19, 2022
Page 3 of 6

sought, the motion must be denied.4 On a motion for reargument, the movant bears a

“heavy burden.”5

          To meet this heavy burden, Defendants first argue that the Letter Decision rested on

a “clearly misapprehended factual premise”—namely, that they ever demanded eight Slack

custodians.6 Defendants admit that they sent a proposal not once, but twice, that listed only

eight Messaging Platform Custodians, where “Messaging Platform” was defined to include

Slack. Defendants argue, however, that the references were an obvious “scrivener’s

error.”7 I did not misapprehend this argument. I simply rejected it as relevant. Defendants’

displeasure with that decision is not a basis for reargument.

          Defendants next argue that the Letter Decision improperly treated the two rejected

proposals as binding contracts. Not so. Instead, I limited the scope of relief, taking into

account the burden on Plaintiff and the needs of the case consistent with proportionality

principles that guide discovery in this court. I drew guidance from how Defendants had

previously proposed to limit their demands in negotiations. Plaintiff’s reasonable reliance

on Defendants’ proposals increased the burden that would be imposed by a subsequent

broader production. Considering the burden created by the parties’ negotiating positions

4
    Wong v. USES Hldg. Corp., 2016 WL 1436594, at *1 (Del. Ch. Apr. 5, 2016).
5
    In re ML/EQ Real Est. P’ship Litig., 2000 WL 364188, at *1 (Del. Ch. Mar. 22, 2000).
6
    Second Mot. for Reargument at 7.
7
    Id. at 5.
C.A. No. 2022-0613-KSJM
September 19, 2022
Page 4 of 6

is particularly fair and justified in view of the need for parties to “be able to rely upon one

another’s good faith proposals for the discovery process to function.”8

         Defendants last argue that they face overwhelming prejudice from the Letter

Decision that “[p]lainly [o]utweighs” any burden on Plaintiff.9 Defendants criticize the

Letter Decision’s discussion of burden as cursory while ignoring that this discussion

expressly acknowledges my ongoing, repeated observation of the “substantial disparity in

the discovery burden placed upon the warring factions.”10 I have discussed this burden in

at least two other decisions resolving discovery disputes in this matter already.11 A court

need not keep repeating itself. For the Fourth Discovery Motion, Twitter described the

substantial burden imposed by the “manual review of more than 240,000 pages of

additional Slack communications” and estimated that a full-time, full-team project

focusing exclusively on this production would require “well more than a week.”12 I took

that showing into account.

         In short, none of Defendants’ bases for reargument are persuasive.

8
    Letter Decision at 5.
9
    Second Mot. for Reargument at 11.
10
     Letter Decision at 2.
11
   Dkt. 427 at 3 (“Plaintiff has born the bulk of the burden of discovery.”); Dkt. 379 at 2
(“Although I made clear early on that discovery would be bilateral, Plaintiff’s discovery
efforts and the corresponding burdens have been far greater than those of Defendants.”).
12
     Dkt. 421 at 18.
C.A. No. 2022-0613-KSJM
September 19, 2022
Page 5 of 6

         There is more. Defendants state in their second motion for reargument that, “at a

bare minimum,” the court should order that Twitter produce Slack messages from seven

additional custodians, two of whom were designated as witnesses for nine of Defendants’

Rule 30(b)(6) deposition topics. Defendants took a similar approach in the last motion for

reargument, criticizing me for failing to unilaterally limit Defendants’ sprawling orchard

of discovery requests to order Plaintiff to produce the “low hanging fruit.”13

         Defendants appear to be under the impression that they can take unreasonable

positions in their discovery requests, when conferring with their opponents, and in motion

practice, and then, through reargument, propose a more reasonable approach. A motion

for reargument is not a vehicle for renegotiation. A court makes rulings, not proposals for

the parties to counter. Defendants’ approach wastes judicial and litigant resources.

         Defendants should be forewarned that I will give future motions for reargument the

attention they deserve. If a motion appears to have merit, then I will address it promptly.

Otherwise, I will take the motion under advisement for the full 90-day period and address

the motion, to the extent a ruling remains warranted, in connection with post-trial briefing.

13
     Dkt. 413 at 3–4.
C.A. No. 2022-0613-KSJM
September 19, 2022
Page 6 of 6

      IT IS SO ORDERED.

                                       Sincerely,

                                       /s/ Kathaleen St. Jude McCormick

                                       Kathaleen St. Jude McCormick
                                       Chancellor

cc:   All counsel of record (by File & ServeXpress)