Elon Musk And Twitter Clash In Court Over How Many Months We Have To Listen To This Before Musk Loses

Spoiler: Not many!

TIME Person of the Year Elon Musk

(Photo by Theo Wargo/Getty Images for TIME)

Today marked the first hearing in Twitter’s lawsuit against Elon Musk (which will soon also be Musk’s countersuit against Twitter). If you’ve missed this case so far, Musk asked to buy Twitter, offering a “seller friendly” agreement designed to close the deal on an expedited basis before the speculative bubble inflating his personal wealth took a hit from a combination of market forces and investors deciding that buying Twitter for a massively inflated price just to make a weed joke ($54.20 a share… GET IT!) might be a red flag about Musk’s business acumen.

The agreement waived his right to due diligence, agreed to a $1B breakup fee if he walked away, and included an explicit agreement that he’d consent to being ordered by the court to close the deal in the alternative. It’s… pretty brutal for Musk unless you’re getting really disingenuous CREATIVE!

This opening hearing dealt with Musk’s opposition to Twitter’s request for an expedited trial. Apparently, now he wants everything to slow down. But the crux of Musk’s argument rested on his claim that Twitter’s spam bot calculations required intensive factual and expert discovery which… is total nonsense. But you go to Delaware with the army you’ve got not the army you want, so off to the hearing they went!

For a complete breakdown, enjoy this full real-time reaction from business school professor @Kolyin. But here are some highlights from the thread along with some additional commentary:

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I agree completely about the appropriateness of “ain’t” here. This is the crux of Musk’s whole defense and it makes no sense. Twitter’s methodology to test for bots — at least as described by Twitter — is statistically sound and there’s very little chance it would be off by more than a percent or so, which is nowhere near enough to be material. It’s so laughable that it deserves the casual blow off that “ain’t” would convey.

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The “45 seconds” line is critical, because Musk wants some sort of “turn over every rock” approach to bots, but given that he had access to all the public filings and still didn’t negotiate this into the contract, the relevant question isn’t “how many bots are there?” but “did Twitter perform the test it claimed it performed and did that test turn out the numbers it claims?” That makes a huge difference in the scope of discovery.

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Do we go ahead and include an orgy image? Why not?

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Will it be grueling for the litigation teams at these firms? Sure. But it’s eminently doable.

This also raises a philosophical question: would you rather work around the clock for three months or 75 percent of around eight months? I feel like it’s a lot easier to get up for a three-month crucible. Maybe that’s just me. But while this motion is mostly about Twitter and Musk, it’s also about the exact contours of hell awaiting the associates on both sides.

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Freudian projection became a recurring theme for the Musk team. And it didn’t augur well that they’re kicking off the argument reminding the court to stick to the agreement because, you know, that’s the document that’s extraordinarily damning for Musk.

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See what I mean?

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It’s worth taking a second to focus on the restatement, which does indicate that Twitter thought it was material — at least in the context of the filing, but maybe not in the context of an acquisition — but, as Twitter would point out later in the hearing… that happened days after the agreement but Musk didn’t seem perturbed about it until much later.

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Yup. You CAN call out the other party for breaching the agreement, but you don’t HAVE to. Twitter was content to watch Musk breach the agreement all over the place. They literally had between one and roughly 44 billion reasons to just watch it all burn like an unfortunate Tesla.

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This is excellent analysis. It is kind of an implied threat, which is never good, but it’s also a terrible one. If there’s enough in this case to ruin the next 60 days, why in the world would the court agree to make this the story of the next eight months?

And, as it happens, Judge Kathaleen McCormick was having none of that:

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In other words…

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Honestly, I wasn’t necessarily reading the statement as a swipe at the court, but the judge certainly seems to have had that takeaway. If I didn’t already think his legal team was about to lean hard on Musk to settle, this should give them the firepower to lean hard on Musk to settle. Because she can’t be too pleased with counsel that questions the court’s ability to do its job and that’s a bad omen for every future delay tactic that the defense may be eyeing.

And for the finale:

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There you have it. I’d say this will be a fun Halloween, but worse than the expedited trial date is the tentative five-day trial. That’s a much clearer signal that the court is not buying that the complexity argument because Biglaw firms can jam thorny discovery into a short, intensive window, but no one is hearing both sides of an impenetrably complicated M&A deal in five days.

This is a klaxon for Musk that the court isn’t planning to indulge a bunch of wild twists and turns.

Will he hear it?

EarlierTwitter Complaint Demonstrates That Every Lawyer, Everywhere, Always Is Smarter Than Elon Musk
Elon Musk Asks Court To Push Trial To 2023 Based On His Inability To Understand Statistics
Elon Musk Will Beat Twitter! WSJ Says It’s Obvious… Assuming You Change Every Single Fact And Law.
No Stranger To Paying Support After Screwing Around, Elon Musk Faces Twitter Lawsuit Over Failed Deal


HeadshotJoe Patrice is a senior editor at Above the Law and co-host of Thinking Like A Lawyer. Feel free to email any tips, questions, or comments. Follow him on Twitter if you’re interested in law, politics, and a healthy dose of college sports news. Joe also serves as a Managing Director at RPN Executive Search.