Court Opinion

ID: 8209084
Source: CourtListenerOpinion
Date Created: 2022-09-26 16:02:22.16262+00
Date Added: 2024-06-11T16:41:37.785075
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 26, 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                             Wilmington, DE 19899
     Potter Anderson & Corroon LLP
     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 further addresses the Second Motion for Leave to Amend Defendants’

      Verified Counterclaims, Answer, and Affirmative Defenses filed by Defendants Elon R.

      Musk, X Holdings I, Inc. and X Holdings II, Inc. (collectively, “Defendants”) on

      September 9, 2022. 1 Plaintiff Twitter, Inc. filed its opposition on September 21, 2022. 2 I

      granted Defendants leave to amend on September 22, 2022, but left open Plaintiff’s request

      for discovery relating to the subject matter of the amendment, concerning former Twitter

      1
          C.A. No. 2022-0613-KSJM, Docket (“Dkt.”) 440.
      2
          Dkt. 566 (“Opposition”).
C.A. No. 2022-0613-KSJM
September 26, 2022
Page 2 of 4

employee and whistleblower Peiter Zatko. 3 Defendants filed a reply in further support of

their Second Motion to Amend on September 23. 4 I assume that the reader is familiar with

the background of this dispute, so I will skip to the facts germane to the motion at issue.

          I have reviewed Defendants’ reply in further support of their Second Motion to

Amend, which moots most of the discovery issues that I had identified in my prior letter. 5

As I understand it, Defendants maintain their objections to Plaintiff’s Zatko-targeted

discovery to the extent it requires Defendants to produce or log documents related to Zatko

but not related to Zatko’s whistleblower complaint. 6 Defendants requested Zatko as a

document custodian in initial lists to Plaintiff, and Plaintiff’s request would sweep in

communications on that issue. 7 These communications do not seem to be what Plaintiff is

seeking. At the same time, Plaintiff is concerned that excluding this category of documents

might result in the exclusion of the types of documents concerning Zatko that Plaintiff is,

in fact, seeking. 8 As a compromise, Plaintiff has suggested mitigating the burden on

Defendants by accepting a metadata-only privilege log for communications solely among

counsel; Defendants have rejected this suggestion. 9

3
    Dkt. 580.
4
    Dkt. 596 (“Reply”).
5
    Reply at 2.
6
    Id. at 2–3.
7
    Id. at 3.
8
    Opposition at 12–13.
9
    Opposition at 11; id. Ex. A at 1, 4.
C.A. No. 2022-0613-KSJM
September 26, 2022
Page 3 of 4

          Another possibility is that Defendants prepare a category log for the group of Zatko

documents it objects to producing. As the Guidelines explain:

                 It may be possible for parties to agree to log certain types of
                 documents by category instead of on a document-by-document
                 basis. Categories of documents that might warrant such
                 treatment include internal communications between lawyer
                 and client regarding drafts of an agreement, or internal
                 communications solely among in-house counsel about a
                 transaction at issue. 10

It bears noting that, as a general matter, where the parties have not agreed in advance to

prepare category logs as an alternative to traditional logs, a party relying on a category log

risks waiver of privilege. 11 But where the court has ordered it, that risk is eliminated. The

benefit of category logs is that it reduces the burden to the producing party while assuring

the requesting party that an attorney has reviewed each document and attested, as an officer

of the court, to its privilege and that it falls within the excepted category subject to the

minimized logging protocol. This sort of arrangement would allay my concerns. As is

typical, I would ask a senior Delaware attorney on the team to spearhead and certify the

effort.

10
     Guidelines § II.7.c.iv.B at 18.
11
    See, e.g., Klig v. Deloitte LLP, C.A. No. 4993-VCL, at 3–4 (Aug. 6, 2010)
(TRANSCRIPT) (“The listing of categories is not sufficient. There may be situations
where a specified category of documents makes sense to list on a log, particularly if you
talk to the other side and explain that, and it is particularized and is of a type that somebody
can look at and address it.”).
C.A. No. 2022-0613-KSJM
September 26, 2022
Page 4 of 4

      The parties shall present argument on the scope of additional discovery and their

positions on the two proposed privilege log alternatives during the September 27, 2022

hearing.

      IT IS SO ORDERED.

                                       Sincerely,

                                       /s/ Kathaleen St. Jude McCormick

                                       Kathaleen St. Jude McCormick
                                       Chancellor

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