Twitter, Musk spar over legal preparations as trial date looms



  • The Delaware judge presiding over the takeover dispute has begun to set the contours of the October trial

Twitter Inc. and Elon Musk continue to jockey for preliminary legal advantage ahead of a trial on their soured $44 billion marriage, as the presiding judge has signaled she wants to keep the case focused on the contractual agreement between the two sides.

With an Oct. 17 trial date in Delaware court approaching, both sides’ legal teams are building their cases through expert reports and sworn testimony. Twitter’s co-founder and former Chief Executive Jack Dorsey and Jared Birchall, head of Mr. Musk’s family office, were scheduled to be interviewed by lawyers last week. Mr. Musk is scheduled to sit for a deposition beginning Monday.

Twitter and Mr. Musk also continue to battle over how much information they must provide one another in the discovery process. The Musk team has been aggressive in pushing for broad information from Twitter, including a range of employee communications and data related to spam and fake accounts.

Mr. Musk’s requests at times have prompted frustration from the judge overseeing the case, Delaware Chancery Court Chancellor Kathaleen McCormick. She has declined to delay the trial on multiple occasions, limited the amount of data Mr. Musk’s team could access from Twitter about spam and fake accounts, and once called Mr. Musk’s data requests “absurdly broad."

In an order Friday, the judge rejected a request from Mr. Musk’s team for access to thousands of Twitter documents that the company says are protected by attorney-client privilege, calling that request an “extreme remedy." She is considering whether Twitter should have to produce a subset of those documents.

In another recent order, Chancellor McCormick declined to reconsider her denial of Mr. Musk’s request for access to certain Slack messages from dozens of Twitter employees, and said his attempt to request the information a second time “wastes judicial and litigant resources."

Other times, the judge has been more sympathetic to Mr. Musk’s legal motions. In an order Thursday, she suggested Mr. Musk may be entitled to access other batches of material he is seeking, including internal technical documents.

Chancellor McCormick on Thursday also granted Mr. Musk’s request to add allegations from former Twitter security executivePeiter Zatko relating to a $7.75 million severance agreement. Mr. Musk’s lawyers say Twitter withheld information about the payment to Mr. Zatko, which they allege would have been required under Mr. Musk’s agreement to buy the company.

Mr. Zatko, in a whistleblower complaint to federal regulators, alleged Twitter failed to protect user data and misled regulators and investors about security problems. Twitter has said Mr. Zatko’s claims are inaccurate and that he was fired in January for poor performance.

Chancellor McCormick is considering an information request from Twitter that seeks to learn whether Mr. Musk and his advisers had any knowledge about Mr. Zatko’s allegations before they became public in August. Whistleblower Aid, an organization that helped file the whistleblower claims, has said Mr. Zatko had never met or spoken with Mr. Musk before making his complaint.

A hearing on several outstanding pretrial issues is scheduled for Tuesday.

Twitter and Mr. Musk have been trying to lay the groundwork for the divergent narratives they aim to present when they face off at trial.

Twitter wants to keep the case closely centered on the contract Mr. Musk signed to buy the company, and his apparent buyer’s remorse weeks later. Mr. Musk wants a much broader set of facts to be at play, including Mr. Zatko’s allegations and questions about how Twitter treats spam accounts, as he seeks to make the case a broad referendum on the soundness of the social-media company’s business.

“Most of what you’ve seen so far is the parties pulling the judge one way or another" on big themes, said Boston College law professor Brian Quinn.

Tulane University law professor Ann Lipton said the stream of pretrial orders has shown a judge intent on keeping the case from becoming a sprawling, drawn-out affair, which is to Twitter’s benefit. “Every external indicator in the case so far is that Twitter is in a stronger position than Musk," she said.

Stanford University law professor Joe Grundfest cautioned against reading too much into the preliminary proceedings, saying the court’s pretrial rulings have been down the middle.

“Each side will ask for everything, each side has tens of millions to spend on the litigation, and each side will want to boil the ocean," Mr. Grundfest said. “This is traditional trench warfare."

This story has been published from a wire agency feed without modifications to the text

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