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 23, 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 decision resolves Twitter, Inc.’s August 15, 2022 request for relief in
connection with the responses and objections to document requests and interrogatories of
Defendants Elon R. Musk, X Holdings I, Inc. and X Holdings II, Inc. (“Defendants”),
which this decision refers to as Twitter’s “First Discovery Motion.”
Through its First Discovery Motion, Twitter seeks five forms of relief. First, Twitter
asks the court to deem Defendants’ objections waived due to Defendants’ obfuscatory
discovery conduct. Second, Twitter seeks to compel Defendants to identify all sources of
relevant information. Third, Twitter moves to compel Defendants to provide discovery
C.A. No. 2022-0613-KSJM
August 23, 2022
Page 2 of 10
related to Musk’s potential co-investors. Fourth, Twitter moves to compel Defendants to
produce their communications with any governmental authorities. Last, Twitter asks the
court to order Defendants to produce documents on a rolling basis. This letter decision
addresses Twitter’s requests in that order.
As its first and most general request, Twitter urges the court to hold that Defendants
waived their objections to multiple discovery requests by engaging in obfuscatory
discovery tactics. This request is denied.
Court of Chancery Rule 26(b)(1) provides that “[p]arties may obtain discovery
regarding any matter, not privileged, which is relevant to the subject matter involved in the
pending action.” 1 “[P]retrial discovery rules are to be afforded broad and liberal
treatment.” 2 “Discovery is called that for a reason. It is not called ‘hide the ball.’” 3 If a
party objects to providing discovery, “[t]he burden [] is on the objecting party to show why
and in what way the information requested is privileged or otherwise improperly
requested.” 4 “Generic and formulaic objections are insufficient.” 5 A generic objection
“makes it impossible to determine what information a party has agreed to provide and
1
Ct. Ch. R. 26(b)(1).
2
Levy v. Stern, 687 A.2d 573, 1996 WL 742818, at *2 (Del. Dec. 20, 1996) (TABLE).
3
Klig v. Deloitte LLP, 2010 WL 3489735, at *7 (Del. Ch. Sept. 7, 2010).
4
Van de Walle v. Unimation, Inc., 1984 WL 8270, at *2 (Del. Ch. Oct. 15, 1984).
5
In re Oxbow Carbon LLC Unitholder Litig., 2017 WL 959396, at *1 (Del. Ch. March 13,
2017) (internal quotation marks omitted).
C.A. No. 2022-0613-KSJM
August 23, 2022
Page 3 of 10
whether the response is complete.” 6 Generally, therefore, a general objection “amounts to
a waiver of the objections that purportedly were preserved.” 7
Invoking these principles here, Twitter argues that Defendants’ efforts to respond
to discovery fell woefully short. This letter does not recount each deficiency identified in
Twitter’s First Discovery Motion. It suffices to say that Defendants’ discovery conduct
has been suboptimal. For example, Defendants refused to produce documents in response
to eight of Twitter’s document requests on the grounds that the materials sought are “not
relevant to the parties’ claims and/or defenses.” 8 Generally, Defendants cannot refuse to
respond to a discovery request because they have unilaterally deemed the request
irrelevant. 9 The requests sought obviously relevant information in any event. 10
Tacitly conceding the overly aggressive nature of their original responses,
Defendants appear to have walked back most of their initial objections. 11 At this stage, the
court is willing to credit Defendants for arriving at more reasonable fallback positions and
not issue the generalized punishment Twitter seeks for Defendants’ unreasonable opening
6
Id. at *2.
7
Id.
8
C.A. No. 2022-0613-KSJM, Docket (“Dkt.”) 159 (“Pl.’s First Disc. Mot.”) Ex. D at 11,
15–16, 19–20, 23, 26.
9
See Zachman v. Real Time Cloud Servs., LLC, C.A. No. 9729-VCG, at 25 (Del. Ch. Mar.
5, 2019) (TRANSCRIPT) (observing that a party “can’t just make up [their] mind that
[they] don’t think something’s relevant” or make their own “ruling about relevance and
discoverability”).
10
See Pl.’s First Disc. Mot. at 10 n.1 (restating the text of the requests at issue).
11
E.g., id. at 8.
C.A. No. 2022-0613-KSJM
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stances. Twitter may renew its generalized request in the event Defendants’ behavior
persists.
As its second request for relief, Twitter seeks to compel Defendants to identify
sources of relevant information. 12 This request is granted.
Twitter’s Interrogatory Nos. 1, 2, 12, and 17 asked Defendants to identify persons
with knowledge of or involvement in key issues and events. 13
In response, Defendants objected to these interrogatories as “overbroad and as
seeking information not relevant to the parties’ claims and defenses,” 14 self-limited their
response to persons with “unique knowledge,” 15 and listed 41 persons or entities they
considered to possess such unique knowledge in response. By the unique-knowledge
qualifier, Defendants appear to intend to exclude at a minimum “friends and acquaintances
with whom Mr. Musk may have had passing exchanges regarding Twitter or the Merger in
general terms” from their list. 16 Twitter suggests that Defendants’ unique-knowledge
qualifier is also intended to exclude from discovery the identify of “advisors to” certain
listed individuals and entities and “representatives of Musk who participated in diligence
sessions, other advisors or consultants to Musk, and other individuals and entities with
12
Pl.’s First Disc. Mot. at 14.
13
Pl.’s First Disc. Mot. Ex. B at 10–11; Pl.’s First Disc. Mot. Ex. C at 14–16.
14
Pl.’s First Disc. Mot. Ex. E at 6–13; 15.
15
Id. at 7.
16
Dkt. 176 (“Opp’n to Pl.’s First Disc. Mot.”) at 16–17.
C.A. No. 2022-0613-KSJM
August 23, 2022
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whom Mr. Musk communicated about the deal.” 17 Defendants argue that any further
information “would not be remotely proportionate to the needs of the case,” 18 particularly
since Defendants did not object to producing texts (and presumably other communications)
with friends and acquaintances that are responsive to Twitter’s discovery requests.
Even assuming that Musk has many friends and family members, Defendants’
breadth, burden, and proportionality arguments ring hollow. It is difficult to conclude, for
example, that requiring Defendants to respond to an ordinary-course interrogatory listing
persons with knowledge, even if those persons have duplicative knowledge, is
disproportionate to the needs of any case, particularly a case that concerns a $44 billion
merger.
Defendants shall supplement their interrogatory responses to identify all persons
with knowledge of or involvement in key issues and events, regardless of whether that
knowledge is “unique” or duplicative. 19
As its third request for relief, Twitter seeks to compel Defendants to respond to
discovery requests related to Musk’s co-investors. This request is granted.
17
Pl.’s First Disc. Mot. at 15.
18
Id. at 18.
19
Defendants suggest that Musk should not be expected to know the identities of advisors
to third parties. If he does not know their identities, then he need not provide them. If he
does, then he must.
C.A. No. 2022-0613-KSJM
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Twitter requested documents relating to Defendants’ communications with actual
and potential co-investors. 20
In response, Defendants objected to the definition of “co-investors” as overly broad.
Defendants initially limited the definition to “include only those investors who executed
commitment letters.” 21 Defendants later expanded their definition to include “persons who
[executed] an NDA with Defendants with respect to a potential investment in Twitter.” 22
Defendants argue that “the parties who executed NDAs would be the only parties having
significant, substantive discussions with Defendants regarding a potential investment,” 23
and that a further expanded definition would impose undue burden on Defendants.
As Twitter observes, Defendants’ logic is faulty, given that Musk himself
committed to a $44 billion transaction without first executing an NDA. And Defendants’
burden arguments seem implausible, given that Defendants have agreed to search the files
of only two custodians. Even if Defendants were to search every document of their two
custodians from January 1 to present, it seems unlikely that their burden would exceed that
associated with Twitter’s 42 custodians. In any event, Delaware law requires the party
20
Pl.’s First Disc. Mot. Ex. A at 15, 17–20, 21, 25; Pl.’s First Disc. Mot. Ex. B. at 10–11.
21
Pl.’s First Disc. Mot. Ex. D at 4; Pl.’s First Disc. Mot. Ex. E at 4.
22
Pl.’s First Disc. Mot. Ex. K at 12.
23
Id.
C.A. No. 2022-0613-KSJM
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objecting on burden grounds to explain the burden with some level of specificity; 24
Defendants have not done so here.
As its fourth request for relief, Twitter seeks to compel Defendants to produce their
communications, if any, regarding the merger, the merger agreement, the proxy statement,
or Twitter, concerning government investigations. This request is denied as premature.
Twitter’s Document Request No. 18 seeks production of all communications with
any governmental authority concerning the merger, the merger agreement, the proxy
statement, or Twitter, and all documents and communications relating to such
communications.
In response, Defendants agreed to produce “communications with government
entities regarding the topics list in [Request] No. 18,” but objected to providing “documents
concerning government investigations . . . on the basis that investigations by the U.S.
Securities and Exchange Commission [the “SEC”] are non-public and confidential.” 25
Twitter argues that documents in the possession of private parties are not subject to
the investigative privilege and, in the alternative, that Defendants lack standing to invoke
24
See Wood v. U.S. Bank Nat’l Ass’n, 246 A.3d 141, 150 (Del. Ch. 2021) (“In this court,
requests for documents ‘relating to’ a particular topic are customary. The term itself is not
objectionable. A request might use this formulation in an overly broad or unduly
burdensome manner, but the objecting party must then respond by explaining its objection
with specificity and proposing a reasonable narrowing of the request.”); In re Aerojet
Rocketdyne Hldgs., Inc., 2022 WL 145228, at *2 (Del. Ch. May 9, 2022) (finding that
“some credible showing of burden must be advanced” by the party objecting to a discovery
request as overly burdensome).
25
Pl.’s First Disc. Mot. Ex. D at 20.
C.A. No. 2022-0613-KSJM
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the investigative privilege. There is little Delaware authority addressing the investigative
privilege. Federal cases have held that the investigative privilege “exists to encourage and
shield the efforts of law enforcement and regulatory agencies to obtain information without
fear of premature disclosure to those under investigation.” 26 Courts have applied this
privilege to protect from discovery “analyses or opinions” of investigative bodies but not
“factual or statistical data” collected in the investigation. 27 In this way, the investigative
privilege invokes a distinction similar to that drawn in this state between so-called “factual
work product” and “opinion work product.” 28 Given its doctrinal purpose, it would seem
unusual that documents in the possession of a private party could be subject to the
investigative privilege or that a private litigant would have standing to assert that
privilege. 29
Although the court is skeptical of Defendants’ ability to assert the investigative
privilege, the court need not reach the issue on the present posture. In their August 18
26
SEC v. McGinn, 2011 WL 13136028, at *6 (N.D.N.Y. Jan. 5, 2011).
27
Ross v. Bolton, 106 F.R.D. 22, 24 (S.D.N.Y. 1985).
28
See, e.g., Saito v. McKesson HBOC, Inc., 2002 WL 31657622, at *11 (Del. Ch. Nov. 13,
2002) (“[T]here are two types of work product: non-opinion (factual/historical) work
product and opinion work product. Each type of work product has its own standard of
protection under Delaware law.”).
29
See Legent Gp. v. Axos Fin. Inc., 2021 WL 4514930, at *1–2 (Del. Ch. Oct. 2, 2021)
(expressing skepticism that a private litigant would possess information subject to an
investigative privilege but declining to reach the question of whether a private litigant
would have standing to assert the privilege); LaMorte v. Mansfield, 438 F.2d 448, 451 (2d
Cir. 1971) (affirming an order compelling a party in a civil action to produce a transcript
of that party’s SEC testimony, finding that no privilege could attach to the information in
the possession of a private party).
C.A. No. 2022-0613-KSJM
August 23, 2022
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response to Twitter’s First Discovery Motion, Defendants stated that they “do not yet know
whether they possess materials that might be the subject of an investigative privilege
asserted by a governmental authority.” 30 If Defendants assert the investigative privilege to
withhold any documents, then Twitter may renew this request.
As its last request for relief, Twitter asks the court to order Defendants to produce
documents promptly and on a rolling basis. This request is denied.
Twitter had produced just over 3,000 documents by the time they filed their First
Discovery Motion. Defendants had produced only 619 documents. Based on this
comparison, Twitter argues that Defendants are intentionally slow rolling their production.
Defendants respond that they are working diligently to review and produce
responsive documents from their two custodians, will continue to do so, and will meet the
August 29 deadline for substantial completion. The court accepts this representation at
face value and denies the motion for relief.
In conclusion, Twitter’s request that the court hold that Defendants waived their
objections to multiple discovery requests by engaging in obfuscatory discovery tactics is
denied. Twitter’s request to compel Defendants to identify persons with knowledge of or
involvement in key issues and events is granted. Twitter’s request to compel Defendants
to respond to discovery requests related to Musk’s co-investors is granted. Twitter’s
request to compel Defendants to produce their communications, if any, regarding the
30
Opp’n to Pl.’s First Disc. Mot. at 23.
C.A. No. 2022-0613-KSJM
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merger, the merger agreement, the proxy statement, or Twitter, with government
authorities is denied as premature. Twitter’s request that the court order Defendants to
produce documents promptly and on a rolling basis is denied.
IT IS SO ORDERED.
Sincerely,
/s/ Kathaleen St. Jude McCormick
Kathaleen St. Jude McCormick
Chancellor
cc: All counsel of record (by File & ServeXpress)