Silicon Valley lawyers up for Musk-Twitter trial

They were all summoned to share what they know about the rancorous, knock-down, drag-out tech spectacle of the year: the fight between Twitter and Elon Musk, the world’s richest man.

Musk enthusiastically agreed to buy Twitter in April for $44 billion but has since tried to back out of the blockbuster deal, leading to lawsuits and recriminations. Both sides are set for a showdown in Delaware Chancery Court in October over whether Musk needs to stick with the acquisition. The torrent of legal demands in the case has forced a who’s who of Silicon Valley to lawyer up, creating a heyday for top-tier law firms.

So far, lawyers for Twitter and Musk have issued more than 100 subpoenas, targeting big-name banks (Goldman Sachs, Morgan Stanley), high-profile investors (Andreessen Horowitz, Sequoia), well-known advisers, prominent companies that employ Twitter’s board members (Salesforce, Mastercard) and members of Musk’s entourage.

In the scorched-earth campaign, the lawyers have even subpoenaed each other.

“Every firm in the Valley is salivating like dogs trying to get in on that action,” said Carol Langford, a professor of legal ethics at the University of San Francisco.

Even for a high-stakes corporate lawsuit, the deluge of paperwork is remarkable, legal experts said. The October trial puts the case on a breakneck timeline, compressing legal work that might normally stretch on for years into just three months. With so much money on the line, both sides have demonstrated a willingness to spend on Hail Mary subpoenas, rather than targeting their requests to just a few insiders.

Also read: Musk subpoenas Twitter's former head of security-turned-whistleblower in buyout battle

“This trial may just be a parade of tech celebrities,” said Raffi Melkonian, a partner at Wright Close & Barger, which is not working on the case. He said similar lawsuits over deals didn’t usually draw in so many people, but Musk does not operate as most tech executives do.

“It’s all relevant,” Melkonian said. “He’s telling people stuff, and he’s not quite as guarded as a normal corporation.”

Twitter declined to comment. “It’s the old throw-the-subpoena-smoke-bomb and hope they don’t get to the truth,” said Alex Spiro, an attorney for Musk. “Not what companies do when they have nothing to hide.”

Twitter has so far been the more aggressive side in the discovery process. The company has issued more than 84 subpoenas to uncover discussions that might prove that Musk soured on the acquisition because the economic downturn decreased his personal wealth.

(Musk’s net worth still stands at $259 billion, according to Bloomberg.)

Twitter has sent subpoenas to Musk’s friends and associates, such as former SpaceX board member Antonio Gracias and entertainment executive Kristina Salen, to get insight into their group chats. The company has also summoned investors like Andreessen and Ellison, who agreed to pony up money so Musk could do the deal.

Also read: Elon Musk subpoenas former Twitter chief Jack Dorsey

Musk himself has agreed to sift through every text he sent or received between Jan. 1 and July 8 for messages relevant to Twitter. His side’s subpoena total stands at more than 36 — including one to Dorsey — as Musk tries to show that Twitter lied about the number of inauthentic accounts on its platform, which he has cited as a reason to pull out of the deal.

On Monday, his lawyers subpoenaed Pieter Zatko, a former Twitter executive, known as Mudge, who has accused the company of making false statements about its security practices.

Musk has demanded voluminous data from Twitter, including correspondence among its board members and years of account information. Thursday, the court granted Musk a limited set of 9,000 accounts that Twitter audited to determine how many bots were on the platform during a particular quarter. He has also subpoenaed the company’s bankers, Goldman Sachs and J.P. Morgan.

But Musk has also shown his unhappiness over Twitter’s attempts to obtain his group chats. This month, his lawyers tried limiting the company’s inquiries, saying they did not plan to turn over messages from “friends and acquaintances with whom Musk may have had passing exchanges regarding Twitter.”

Musk’s circle of friends appear annoyed by Twitter’s probing. Upon receiving a 62-page subpoena from the company this month, Lonsdale, an investor who worked with Musk at digital payments company PayPal, called it “a giant harassing fishing expedition.”

“I have nothing to do with this aside from a few snarky comments, but got a ‘YOU ARE HEREBY COMMANDED’ document notice,” Lonsdale tweeted.

In a court filing Friday, Sacks’ lawyers, who filed a motion to quash the subpoenas, said he had produced 90 documents for Twitter so far. They accused the company of “harassing” Sacks and creating “significant” legal bills for him by subpoenaing him in California and Delaware.

Also read: What Twitter's subpoenas say about its plan to fight Elon Musk in court

Kathaleen McCormick, the judge overseeing the case, has largely waved off Musk’s objections about the subpoenas to his friends. Musk’s conduct in discovery “has been suboptimal,” and his requests for years of data were “absurdly broad” she wrote in rulings last week.

“Defendants cannot refuse to respond to a discovery request because they have unilaterally deemed the request irrelevant,” McCormick wrote. “Even assuming that Musk has many friends and family members, Defendants’ breadth, burden, and proportionality arguments ring hollow.”

“Venture for so long has been very accustomed to being an outsider thing,” he said. “We didn’t have to focus on following all the rules, and there wasn’t that much litigation.”

For law firms, Musk’s battle with Twitter has become a bonanza — especially financially.

“I’m sure they’re all hiring fancy high-end law firms,” Melkonian said. “Those guys are going to charge thousands of dollars per hour for preparation.”

Twitter has hired five law firms with expertise in corporate disputes and Delaware law: Wachtell, Lipton, Rosen & Katz; Potter Anderson & Corroon; Ballard Spahr; Kobre & Kim; and Wilson Sonsini Goodrich & Rosati. Musk has retained a team of three firms: Skadden, Arps, Slate, Meagher & Flom; Quinn Emanuel Urquhart & Sullivan; and Chipman Brown Cicero & Cole.

Other leading tech law firms — including Freshfields Bruckhaus Deringer, Perkins Coie, Baker McKenzie, and Fenwick & West — declined to comment, citing conflicts in the case.

Lawyers sitting on the sidelines probably feel left out, Zimmerman said. “If I were a trial lawyer in San Francisco, with a specialty of dealing with venture funds and the growth companies they invest in, there ought to be that FOMO,” he said, using the shorthand for the “fear of missing out.”

For those who have been tapped, the next several months are likely to be chaotic.

“For people who do this work, this is what we live for,” said Karen Dunn, a litigator for tech companies who has represented Apple and Uber, and who is not involved in the Twitter case. “It moves incredibly fast; it is all consuming.”