Court Unimpressed with Pissy Response

Another day, another three letter opinions of the Delaware Court of Chancery posted in Twitter v. Musk.

One deals with a motion to quash a third party subpoena

I will keep this brief. I again assume that the readers are familiar with the background of this action. David Sacks is one of four individuals identified by Elon Musk as persons with whom he privately communicated about the Twitter transaction. Sacks’s fund, Craft Ventures GP I, LLC (“Craft”), entered into a non-disclosure agreement with Musk to evaluate a potential investment in connection with Musk’s acquisition of Twitter.

On August 1, 2022, Twitter served a California subpoena on Sacks. What happened next was unusual. To quote from Twitter’s Opposition:

Sacks’ response was swift and obscene. That evening, he Tweeted a virtual middle-finger at “Twitter’s lawyers,” then a video of a man urinating on a subpoena while yelling expletives to a cheering crowd.

Sacks next complained about the subpoena on Bloomberg TV, stating that he has “never been in possession of non-public information related to [Twitter’s] contract dispute with Elon.” A few days later, Sacks stated on a publicly aired podcast that Twitter’s subpoena was inappropriate because Sacks was “not even involved” with the transaction and was “not in possession of non-public information about this.” He further stated that he would respond to the subpoena by “hir[ing] a lawyer to go quash this thing.”

Craft hired California counsel, who informed Twitter on August 10 that Sacks expected to respond to the subpoena on August 17 and would “endeavor to produce documents by the August 22, 2022 response date.” Meanwhile, Twitter learned of the Craft non-disclosure agreement and served a second California subpoena on Craft on August 15. Sacks’ California counsel agreed to accept service.

Motion to quash

The movants have not met their burden here. The Delaware subpoenas were not “unreasonably” duplicative. Twitter had valid concerns based on Sacks’s behavior that neither he nor Craft would comply with the California subpoenas. Rather than burden a judge in another state with a request to enforce a subpoena, or risk not getting relief in time for use in this highly expedited matter, Twitter served the Delaware subpoenas as an insurance policy. In other circumstances, I might view entirely duplicative subpoenas served for such tactical purposes as problematic. Where, as here, the subpoena recipient Tweets the subpoenaing attorneys the middle finger and a video of someone urinating on subpoenas, I am less bothered by it.

The Delaware subpoenas impose no undue burden. Twitter made clear that it would treat compliance with the California subpoenas as full compliance with the Delaware subpoenas and that the return dates were negotiable. The only burden identified by the movants is the expense associated with hiring Delaware counsel. The movants did not need to hire Delaware counsel to comply with the Delaware subpoenas. They only needed Delaware counsel to move to quash the Delaware subpoenas. In an apparent effort to keep Sacks’s promise to his podcast listeners, the movants created the very burden of which they now complain.

The Motion to Quash is denied.

Hearing on motions will be held today at 1:30 pm.  (Mike Frisch)