Court Denies and Defers

Court Denies and Defers Plaintiff’s Sanctions Request in Still Going Twitter v Musk Case: eDiscovery Case Law

In Twitter, Inc. v. Musk, No. 2022-0613-KSJM (Del. Ch. Oct. 5, 2022), Delaware Chancellor Kathaleen S. McCormick discussed several defendant deficiencies identified by plaintiff regarding the production of text messages and messages from the Signal app, but found that the text deficiencies “do not warrant sanctions against Defendants for failure to produce responsive text messages” and reserved her ruling regarding potential sanctions for automatic deletion of Signal messages “pending post-trial briefing”.

Case Discussion

In this case that arose over Elon Musk’s decision to terminate his bid to acquire Twitter, Chancellor McCormick, in light of reports that Musk had revived the bid, stated: “The parties have not filed a stipulation to stay this action, nor has any party moved for a stay. I, therefore, continue to press on toward our trial set to begin on October 17, 2022.”

The latest dispute concerned defendants’ allegedly deficient production of text messages and Signal instant messages to and from Elon Musk, where plaintiff sought to compel production of all of Musk’s messages from January 1, 2022 to July 8, 2022, and requested an adverse inference that defendants recklessly or intentionally deleted or withheld damaging messages.

Plaintiff’s text message arguments were threefold: 1) Defendants unreasonably frustrated Plaintiff’s attempt to verify the adequacy of Defendants’ production, 2) There were messages missing from Defendants’ production that were produced by third parties or appear in Musk’s phone logs, and 3) There were gaps in Defendants’ production at critical times when it seemed likely that Musk was communicating by text (between May 24 and May 30 and between June 1 and June 7). Plaintiff also argued that Musk sent or received Signal messages during the relevant period and that their deletion or non-production amounted to sanctionable spoliation.

Chancellor’s Ruling

Regarding the first text message argument, Chancellor McCormick stated: “Plaintiff’s first argument raises issues that have mostly been mooted”, noting that “Defendants’ explanation is believable” regarding delays in producing complete text message logs and said: “Defendants ultimately produced a complete copy of Musk’s phone records to an online portal, which Plaintiff states it cannot ‘print, sort, notate, or otherwise integrate … into its broader discovery records.’ The issue is largely moot, but to the extent that Defendants have not yet produced a phone log that Plaintiff is able to print, sort, annotate, and integrate into its broader discovery efforts, Defendants are ordered to do so.”

Regarding the second text message argument where plaintiff identified several text exchanges that were not produced comprising less than 100 messages total, Chancellor McCormick stated: “Taken together, these deficiencies do not warrant sanctions against Defendants for failure to produce responsive text messages.”

Regarding the third text message argument, Chancellor McCormick stated: “The absence of communications from these periods raises the possibility that Musk communicated through other informal channels not captured by text records, such as iMessage or Signal…Defendants say that the gaps in the log are partly due to Musk’s overseas travel in late May,…but it is also entirely possible that Musk used internet-based messaging services during that period because those services do not involve many of the international roaming difficulties of traditional text messages… Because it seems possible (even likely) that Musk used informal channels of communications other that text message during the relevant gaps, to the extent that Defendants have not done so already, Defendants are ordered to collect and produce responsive iMessages and non-SMS instant messages in Musk’s files from May 24 through May 30 and June 1 through June 7. Defendants shall also produce any messages pre- or post-dating this period necessary to place the messages within this period in context.”

Regarding discovery of Signal messages where third-party discovery revealed one Signal exchange involving Musk, he provided an affidavit which stated: “Aside from the April 25, 2022 message from Andreesen [sic], I do not recall having any other communications regarding my planned purchase of Twitter through the Signal app before that point, and I did not communicate regarding the Twitter transaction using Signal (or any other messaging service that deletes messages after a period of time) from that point onward.”

However, a second Signal exchange involving Musk and Jared Birchall was produced by the defendants. Chancellor McCormick stated: “It seems unlikely…that the Birchall Signal Exchange and the Andreessen Signal Exchange were the only times Musk chose to use Signal to communicate regarding the Twitter transaction… The Birchall Signal Exchange demonstrates that Musk’s recollection concerning his use of Signal to discuss the Twitter transaction is inaccurate. The exchange, however, does not reveal the extent of that inaccuracy. It is reasonable to infer from Defendants’ representations and the apparent lack of any Signal messages in their production thus far that Musk used Signal’s automatic deletion feature. Defendants state that they have ‘investigated the ability to restore Signal messages sent or received during the requested discovery period and determined that it was not possible to do so.’”

Continuing, she stated: “I am forced to conclude that it is likely that Defendants’ custodians permitted the automatic deletion of responsive Signal communications between them and possibly others, and that those communications are irretrievably lost. At this stage, it is unclear to me whether deletions occurred when Defendants were under a duty to preserve documents… If Defendants deleted documents after they were under a duty to preserve, some remedy is appropriate, but the appropriate remedy is unclear to me at this stage. I will reserve my ruling regarding Plaintiff’s request for sanctions, including adverse inferences, pending post-trial briefing, when I have a fuller understanding of the record.”

So, what do you think? Should the court have sanctioned the defendant for either discovery issue? Please share any comments you might have or if you’d like to know more about a particular topic.

Case opinion link courtesy of eDiscovery Assistant, an Affinity partner of eDiscovery Today.

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