Court Opinion

ID: 7803669
Source: CourtListenerOpinion
Date Created: 2022-08-25 20:02:12.370201+00
Date Added: 2024-06-11T16:29:42.041555
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

                                           August 25, 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 August 15, 2022 letter from Defendants Elon

      R. Musk, X Holdings I, Inc., and X Holdings II, Inc. (“Defendants”), which this decision

      refers to as Defendants’ “Second Discovery Motion.” The motion seeks to compel Twitter,

      Inc. (“Plaintiff”) to produce various documents, including information to verify Plaintiff’s

      SEC disclosures regarding its estimates that less than 5% of mDAU are false or spam

      accounts (the “5% Disclosure”). 1

      1
       C.A. No. 2022-0613-KSJM, Docket (“Dkt.”) 163 (“Defs.’ Second Disc. Mot.”); see also
      Dkt. 169 (“Pl.’s Response to Defs.’ Second Disc. Mot.”); Dkt. 201 (“Defs.’ Reply to Defs.’
      Second Disc. Mot.”); Dkt. 231 (“Pl.’s Sur-Reply to Defs.’ Second Disc. Mot.”).
C.A. No. 2022-0613-KSJM
August 25, 2022
Page 2 of 4

         To deliver a prompt ruling, I will forego recapping each of the arguments raised by

Defendants; I assume that readers of this letter are familiar with the parties’ dispute. My

overall impression is that Plaintiff has agreed to produce a tremendous amount of

information to Defendants, and that the information Plaintiff has agreed to produce is

sufficiently broad to satisfy most of Plaintiff’s obligations.       This letter orders the

production of three additional categories of information.

         First, as the primary target of their Second Discovery Motion, Defendants seek large

troves of Plaintiff’s data. 2 In their Second Discovery Motion, Defendants argued that this

data was necessary to test the 5% Disclosure. 3 In their reply in further support of their

Second Discovery Motion, Defendants argued that such documents were also relevant to

their counterclaim for fraud—i.e., the theory that Plaintiff misleadingly touted mDAU

without disclosing companion engagement data to present a complete picture. 4

         Defendants’ data requests are absurdly broad.         Read literally, Defendants’

documents request would require Plaintiff to produce trillions upon trillions of data points

reflecting all of the data Twitter might possibly store for each of the approximately 200

million accounts included in its mDAU count every day for nearly three years. 5 Plaintiff

has difficulty quantifying the burden of responding to that request because no one in their

2
    See Defs.’ Second Disc. Mot. Ex. 6 (“RFPs”) 2, 3, 4, 18, 19.
3
    Defs.’ Second Disc. Mot. at 19–21.
4
    Defs.’ Reply to Defs.’ Second Disc. Mot. at 7–8.
5
 See Pl.’s Response to Defs.’ Second Disc. Mot. Ex. 9 at 1–4; Defs.’ Second Disc. Mot.
Ex. 3 at 1–3.
C.A. No. 2022-0613-KSJM
August 25, 2022
Page 3 of 4

right mind has ever tried to undertake such an effort. It suffices to say, Plaintiff has

demonstrated that such a request is overly burdensome. 6

         That said, some additional data from Plaintiff seems warranted. Plaintiff is ordered

to produce a subset of what Defendants have requested: the 9,000 accounts reviewed in

connection with Plaintiff’s Q4 2021 audit, which the parties refer to as the “historical

snapshot.” I recognize that producing the historical snapshot is no small feat. Plaintiff

represented that, with considerable effort, these documents could be produced in under two

weeks, and Plaintiff shall strive to meet that timeline. In addition, Plaintiff must produce

documents sufficient to show how those 9,000 accounts were selected for review.

         The historical-snapshot data that I have ordered produced is highly sensitive. To

their credit, Defendants have agreed to treat this data as highly confidential. The parties

should confer on a list of Defendants’ attorneys and data scientists who will be permitted

to access this data.

         Second, as to Defendants’ mDAU fraud theory, Plaintiff has already agreed to

produce ten broad categories of documents addressing mDAU, including documents

reflecting Plaintiff’s reliance on mDAU relative to other metrics. 7 Plaintiff is ordered

produce a small additional set of data from its review database—documents reflecting

discussion of any other key metric identified by Defendants, regardless of whether those

6
 See Dkt. 169 (Edgett Aff.) ¶ 5 (averring that a less extensive collection effort would be
extraordinarily burdensome).
7
    See Pl.’s Response to Defs.’ Second Disc. Mot. at 10; see generally id. Ex. 6.
C.A. No. 2022-0613-KSJM
August 25, 2022
Page 4 of 4

documents expressly address mDAU. Although Plaintiff may not withhold documents in

its existing review database concerning these other key metrics, Plaintiff need not engage

in further collection to satisfy this obligation.

       Third and finally, Plaintiff is ordered to produce documents responsive to

Defendants’ RFP 49 at the board and management level from January 1, 2021 to the

present.

       Defendants’ other requests in their Second Discovery Motion are denied.

       IT IS SO ORDERED.

                                             Sincerely,

                                             /s/ Kathaleen St. Jude McCormick

                                             Kathaleen St. Jude McCormick
                                             Chancellor

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