Court Opinion

ID: 7806892
Source: CourtListenerOpinion
Date Created: 2022-09-07 14:01:56.248617+00
Date Added: 2024-06-11T16:30:19.454372
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:

             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

      the court’s August 25, 2022 Order (the “Order”). 1 The Order resolved issues raised in

      Defendants’ August 19, 2022 letter (referred to in the Order and here as Defendants’ “Third

      1
       See C.A. No. 2022-0613-KSJM, Docket (“Dkt.”) 320 (“Mot. for Reargument”); see also
      Dkt. 391 (Pl.’s Opposition to Defs.’ Mot. for Reargument).
C.A. No. 2022-0613-KSJM
September 7, 2022
Page 2 of 4

Discovery Motion”) 2 by denying Defendants’ request that the court compel Plaintiff

Twitter, Inc. (“Plaintiff”) to collect documents using a more extensive date range. 3 For the

reasons that follow, the motion for reargument is denied.

         “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.’” 4 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

sought, the motion must be denied. 5 On a motion for reargument, the movant bears a

“heavy burden.” 6

         Defendants first argue that the Order fails to explain the basis for the court’s

decision, 7 but that is not true. The Order identifies four specific grounds for denying

Defendants’ request. It provides:

                I have carefully reviewed Defendants’ Third Discovery Motion
                and Plaintiff’s response. Given the timing of Defendants’

2
 Dkt. 189 (Defs.’ Third Disc. Mot.); see also Dkt. 232 (Pl.’s Opposition to Defs.’ Third
Disc. Mot.).
3
    Dkt. 249 (Order) at 2.
4
 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)).
5
    Wong v. USES Hldg. Corp., 2016 WL 1436594, at *1 (Del. Ch. Apr. 5, 2016).
6
  In re ML/EQ Real Est. P’ship Litig., 2000 WL 364188, at *1 (Del. Ch. Mar. 22, 2000)
(quoting Arnold v. Soc’y for Savs. Bancorp, 1995 WL 408769, at *1 (Del. Ch. June 30,
1995)).
7
    Mot. for Reargument ¶ 8.
C.A. No. 2022-0613-KSJM
September 7, 2022
Page 3 of 4

                  demand that Plaintiff expand its date range, the large volume
                  of documents produced by Plaintiff to date, the burden on
                  Plaintiff resulting from my ruling on Defendants’ Second
                  Discovery Motion, and the additional burden granting
                  Defendants’ Third Discovery Motion would place on Plaintiff,
                  the Third Discovery Motion is denied. 8

Though brief, the Order set out my bases: timing and burden.

         Defendants next argue that I misapprehended or overlooked facts concerning the

timing issue. Not so. Twitter devoted a whole section of its Opposition to Defendants’

“tactical delay.” 9 I credited those arguments. Defendants disagrees with that decision, but

disagreement is not a basis for reargument.

         Defendants last argue that I overlooked factors mitigating Twitter’s burden. Again,

not so. Twitter’s present discovery obligations in this case are substantial and were

significantly expanded by this court’s order requiring Twitter to reconstruct a “historical

snapshot” of its Q4 2021 audit. 10 In an expedited matter such as this one, the court’s

already significant discretion to assess the proportionality of discovery requests is

necessarily enhanced. 11

         In a version of this last argument, during the September 6, 2022 oral argument on

this motion, Defendants took the position that I could mitigate Twitter’s burden by ordering

8
    Order at 2.
9
    Pl.’s Opposition to Defs.’ Third Disc. Mot. at 17–21.
10
     See Dkt. 247 (Order Resolving Defs.’ Second Disc. Mot.).
11
  See Tang Capital P’rs, LP v. Norton, C.A. No. 7476-VCG, at 20 (Del. Ch. July 11, 2012)
(TRANSCRIPT) (“In an expedited case, [the court’s] discretion to control discovery is
necessarily enhanced [ . . . ] some rocks are going to remain right-side up.”).
C.A. No. 2022-0613-KSJM
September 7, 2022
Page 4 of 4

Twitter to produce narrow categories of “low hanging fruit” from the expanded date range.

But Defendants did not ask for the low-hanging fruit when they argued their Third

Discovery Motion. Instead, Defendants overshot and asked for too much. That was a

mistake, and I denied their Third Discovery Motion for that reason. Further reflection on

the matter is not a reason for reargument; Defendants’ more reasonable requests come too

late.

        IT IS SO ORDERED.

                                         Sincerely,

                                         /s/ Kathaleen St. Jude McCormick

                                         Kathaleen St. Jude McCormick
                                         Chancellor

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