In a new letter filed with Delaware’s Court of Chancery, Judge Kathaleen McCormick says it’s still game on — for now at least.
In the letter, sent a day after news broke that Elon Musk would seek to seal the deal with Twitter under the original terms, Judge McCormick is weighing in with an important observation: the trial will still move forward unless either party does something to formally change that.
“The parties have not filed a stipulation to stay this action, nor has any party moved for a stay,” Judge McCormick wrote. “I, therefore, continue to press on toward our trial set to begin on October 17, 2022.”
The bulk of the letter explores Twitter’s concern about “allegedly deficient production of text messages and other instant messages to and from Elon Musk.” In other words, Twitter thinks that some key conversations were not turned over in last week’s trove of Musk’s texts with a laundry list of Silicon Valley hotshots. So, Twitter wants to compel the billionaire to cough up all relevant messages from January 1 to July 8. Twitter went so far as to accuse Musk of intentionally deleting or withholding “damaging messages.” Judge McCormick heard arguments about this specific subset of the broader drama on September 27.
Apparently, this includes messages that may have been sent over encrypted messaging apps.
“With respect to Signal, Plaintiff argues that Musk sent or received Signal messages during the relevant period and that their deletion or non-production amounts to sanctionable spoliation,” McCormick writes. She goes on to order Musk’s team to provide a complete copy of his phone records in a format that’s easier to search and sort.
Judge McCormick also orders the Musk camp to produce a set of 19 texts between Musk and his lawyer Alex Spiro — the same lawyer who received an anonymous tip from a Twitter insider through ProtonMail. She also mentions some texts between Musk and Oracle founder Larry Ellison coordinating to set up a call, and the timing lines up with Musk’s announcement that the deal was “temporarily on hold.”
There are still even more holes in the communications that Musk’s team handed over, Judge McCormick wrote.
“Defendants have produced no Musk text messages between May 24 and May 30, nor between June 1 and June 7. These periods were important to the parties’ dispute, and I share Plaintiff’s concern that Musk produced no responsive text messages from these periods,” she writes, noting that Musk uses other chat services including Signal, particularly for “personal financial matters.”
“With respect to Signal, Plaintiff argues that Defendants’ failure to produce Signal messages (other than one screen shot discussed below) raises an inference that Musk deleted relevant messages that he was obligated to preserve,” McCormick writes.
Third-party discovery found that Elon Musk had corresponded with investor Marc Andreessen via Signal as well — the venture capitalist had contacted Musk on April 25 with interest in becoming an equity partner in Twitter. When Twitter’s team found out that Musk was talking about major elements of the deal via Signal, they pointed out that this makes it seem more likely that other key conversations were happening on the encrypted app too.
Musk said in an affidavit that he didn’t recall using the Signal app to talk about the deal in any instance other than his conversation with Andreessen. But discovery revealed yet another instance of Musk using Signal to talk to his advisor, Jared Birchall. It isn’t clear when these relatively routine Signal messages were sent, but it’s suspicious enough that Judge McCormick said it “seems unlikely” that these two exchanges were the only times Musk used the app.
“At this stage, it is unclear to me whether deletions occurred when Defendants were under a duty to preserve documents,” McCormick wrote. “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.”
Since the evidence is not yet clear, McCormick will not rule on this matter until a pending post-trial briefing.
This story is developing…