Court Opinion

ID: 7827944
Source: CourtListenerOpinion
Date Created: 2022-09-07 22:01:30.708913+00
Date Added: 2024-06-11T16:30:55.744153
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 7, 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:

            This letter resolves issues raised in the September 2, 2022 letter to the court from

      Plaintiff Twitter, Inc. (“Plaintiff”) seeking sanctions against Defendants Elon R. Musk, X

      Holdings I, Inc., and X Holdings II, Inc. (“Defendants”) for Defendants’ discovery
C.A. No. 2022-0613-KSJM
September 7, 2022
Page 2 of 5

misconduct. 1 I refer to the September 2 letter as Plaintiff’s Fourth Discovery Motion. 2

Once again, I assume that the reader is familiar with the background of this action.

          Plaintiff’s Fourth Discovery Motion identifies clear deficiencies in Defendants’

document production. Third parties produced text messages with Musk that Musk himself

did not produce, and Musk’s own production of text messages revealed glaring

deficiencies. As just one example, Defendants produced two texts sent to Musk from

Robert Steel of Parella Weinberg Partners on June 17 at 9:57 a.m. and 10:15 a.m. 3 The

9:57 a.m. text asks a question. The 10:15 a.m. text—stating “Ok. Got it. . . .”—implies

that Musk responded. 4 Assuming that Musk’s response was not telepathic, one would

expect some evidence of it in Defendants’ document production. But Defendants provided

none by the deadline for substantially completing document discovery.

          Defendants’ approach to answering interrogatories also left much to be desired. As

one example, on August 23, I ordered Defendants to respond to interrogatories that required

Defendants to identify persons with knowledge of relevant facts. 5              Defendants

supplemented their responses on August 26, but they did a bad job of it, identifying only a

1
 C.A. No. 2022-0613-KSJM, Docket (“Dkt.”) 376 (Pl.’s Fourth Disc. Mot.); see also Dkt.
393 (Def.s’ Opposition).
2
  For those counting, I skipped over Plaintiff’s Third Discovery Motion seeking Musk’s
privileged communications stored on the SpaceX and Tesla servers. Dkt. 375. That motion
remains under advisement.
3
    Pl.’s Fourth Disc. Mot. at 9.
4
    Id.
5
    Dkt. 221 at 5.
C.A. No. 2022-0613-KSJM
September 7, 2022
Page 3 of 5

handful of people about whom Twitter was already aware. 6 Defendants supplemented their

responses again on August 31, this time identifying 491 people with knowledge. 7 Because

the August 31 response was based on a review of Musk’s texts collected on August 1, 8 it

could have been provided much earlier.

         Defendants have now cured many of the deficiencies about which Plaintiff

complained in its Fourth Discovery Motion. They accuse Plaintiff of jumping the gun and

seeking sanctions prematurely, but I do not see it that way. I can understand why Plaintiff

requires relief. Plaintiff has born the bulk of the burden of discovery. In addition to the

onerous “historical snapshot” that was the subject of Defendants’ Second Discovery

Motion, 9 Plaintiffs collected, reviewed, and produced documents from 42 custodians.

Defendants agreed to produce from just two custodians. Defendants had less to do but still

fell short in their obligations. Defendants’ prior deficiencies have left Plaintiff wondering

whether there are other deficiencies and scrambling in third-party discovery.

         Despite the imbalance in burden and Defendants’ suboptimal conduct, the relief that

Plaintiff seeks through it Fourth Discovery Motion taken as a whole is too extreme.

Granting the relief as requested would be an overreaction. Plaintiff asks for all text

messages from Defendants’ two custodians for the negotiated period regardless of whether

6
    Pl.’s Fourth Disc. Mot. at 5.
7
    Id. at 12–13.
8
    Dkt. 412.
9
    See Dkt. 247.
C.A. No. 2022-0613-KSJM
September 7, 2022
Page 4 of 5

such text messages are relevant, but that is an intrusive request. Plaintiff asks for sworn

statements regarding Defendants’ collection efforts and other issues, but the

representations made by Defendants’ counsel to date are extensive, and I am not convinced

that further lawyer-crafted explanations will shed greater light on the issues in any event.

Plaintiff asks for an immediate custodial deposition of Musk, but Plaintiff will be deposing

Musk quite soon given the case schedule. For the avoidance of doubt, Plaintiff may ask

Musk whatever custodial questions it would like to ask during his deposition, but there is

no need to conduct a separate custodial deposition. These requests are denied.

       Two of Plaintiff’s requests are granted. Plaintiff asks the court to suspend third-

party discovery deadlines as to Plaintiff. This request is reasonable, and it is granted, but

trial is still on, and so third-party discovery must happen promptly. Plaintiff may not use

this relief to gain any tactical advantage and must act in good faith to move forward with

third-party discovery as quickly as possible. Plaintiff also asks Defendants to obtain and

produce phone company records concerning the text messages that Musk and Birchall sent

or received during the relevant period. This too is reasonable, and it is granted, as it will

allow Plaintiff to confirm whether Defendants’ representations that Musk did not text about

Twitter during key periods are accurate.
C.A. No. 2022-0613-KSJM
September 7, 2022
Page 5 of 5

      IT IS SO ORDERED.

                                       Sincerely,

                                       /s/ Kathaleen St. Jude McCormick

                                       Kathaleen St. Jude McCormick
                                       Chancellor

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