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Speaker 1: This is Bloombird Law with June Brusso from Bloombird Radio,

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Speaker 1: Who knows what evil lecks in the hearts of men?

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Speaker 1: From the old time radio show to TV and movies,

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Speaker 1: the shadow always sounded mysterious and ominous. Fast forward to

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Speaker 1: the aptly named shadow docket. Emergency orders of the Supreme Court,

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Speaker 1: short and unsigned, issued without a full briefing or arguments,

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Speaker 1: often late at night and without explanation. While the shadow

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Speaker 1: docket certainly isn't new, it's gaining ground on the regular docket.

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Speaker 1: Since August, the Court has issued more orders on the

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Speaker 1: shadow docket than opinions on the merits docket. Me Cony

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Speaker 1: Barrett is probably the first justice to be asked about

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Speaker 1: it at her confirmation hearings. You know, the shadow docket

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Speaker 1: has become a hot topic in the last couple of years.

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Speaker 1: This past term, the Court has used the shadow docket

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Speaker 1: to decide issues affecting millions of Americans, from abortion to

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Speaker 1: voting rights to COVID policy, and the three most conservative

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Speaker 1: justices have signaled they want to use it even more aggressively.

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Speaker 1: My guest is constitutional law experts Stephen Vladdock, a professor

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Speaker 1: at the University of Texas Law School. He's testified before

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Speaker 1: Congress about the shadow docket. Steve, why are we hearing

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Speaker 1: so much about the shadow docket lately? Well, I mean,

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Speaker 1: I think part of it is that the Court is

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Speaker 1: doing more and more significant stuff on the shadow docted.

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Speaker 1: I think more of it is that, you know, folks

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Speaker 1: are paying attention to it to a better degree than

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Speaker 1: ever before, and the Court, for all the headlines and

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Speaker 1: dramas around him, the most recent term, is actually deciding

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Speaker 1: a fewer cases on the merits doctor it at any

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Speaker 1: point since the Civil War. So you know, when you

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Speaker 1: have a flurry of significant rulings coming down through these unsigned,

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Speaker 1: often unexplained orders, it's no surprise that folks are paying

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Speaker 1: a lot more attention to that part of the Supreme

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Speaker 1: Court's work. Since August of one, the justices have issued

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Speaker 1: sixty six emergency orders compared to sixty merits opinions. So

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Speaker 1: does something seem off there or are these really emergencies?

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Speaker 1: Twenty nine were related to COVID rules fifteen to executions. Well,

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Speaker 1: and I think it's worth stressing that the denominator there

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Speaker 1: is not necessarily telling us how often the Court's intervening

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Speaker 1: I mean, so far this term, I might kind of

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Speaker 1: think the Court has granted sixteen emergency applications. That's on

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Speaker 1: rough paste for where we've been the last couple of years,

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Speaker 1: which is twenty to twenty four per term. But even

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Speaker 1: that's up dramatically over you know, prior years June. I

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Speaker 1: think part of what's going on is there have been

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Speaker 1: obviously a whole bunch of external causes for increased emergency delegation.

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Speaker 1: You know, part of it is that because the Court

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Speaker 1: is actually granted more of these applications, because more and

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Speaker 1: more of these efforts are succeeding. You know, lawyers are

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Speaker 1: acting as lawyers act. Lawyers are going to try to

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Speaker 1: remember the application in context in which they previously would

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Speaker 1: not have. And so I think we're just generally seeing

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Speaker 1: an increasingly active shadow docket, be getting an increasingly active

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Speaker 1: shadow docket where the more the justices seem willing to

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Speaker 1: intervene early in cases to disrupt the status quo through

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Speaker 1: these unsigned and usually i'll explained orders, the more the

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Speaker 1: parties are going to ask them to. I think that's

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Speaker 1: why we're seeing the shadow docket really start to compete

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Speaker 1: with the merits docket in overall volumes. This term, the

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Speaker 1: Court used the shadow docket to decide several hot button issues.

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Speaker 1: Have you identified any issues you think they shouldn't be

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Speaker 1: deciding on the shadow docket. It's hard to sort of

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Speaker 1: say that there's an issue that should or shouldn't be

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Speaker 1: for the shadow doc. And I think the question is

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Speaker 1: is the case really an emergency and it's just really

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Speaker 1: a context where the Court doesn't have time to hustle

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Speaker 1: the matter onto the marriage docket, to give the parties

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Speaker 1: time for plenary briefing, to hold oral argument, to write

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Speaker 1: you know, the more conventional, lengthy opinions, and you know, frankly,

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Speaker 1: I mean, one of the things about this term that's

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Speaker 1: really interesting is that I think the Court has started

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Speaker 1: to react to some of the criticisms of the shadow dockets.

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Speaker 1: You know, two of the most significant shadow docket rulings

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Speaker 1: all term where the OSHA and CMS vaccine mandate cases.

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Speaker 1: And in those cases, even though those were emergency applications,

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Speaker 1: the Court actually held oral argus and the first time

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Speaker 1: the full Court has heard oral argument on an application

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Speaker 1: since the nineties. That you know, we've seen the Court

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Speaker 1: move a couple of cases from the shadow doctor to

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Speaker 1: the merriage docket. That dispute in Texas over whether a

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Speaker 1: death row inmates could have a religious official in the

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Speaker 1: execution chamber with him who could touch him and pray

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Speaker 1: over him. You know, while the execution protocol was being administered,

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Speaker 1: that started on the shadow docket. The court kicked it

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Speaker 1: to the merrit's docket. So two nights. I don't think

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Speaker 1: we can sort of stay as an abstract matter. Issue

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Speaker 1: X shouldn't be on the shadow docket. I think the

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Speaker 1: real of problems is that the court is treated as

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Speaker 1: emergencies saving pretrist aren't. I mean, there was a really

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Speaker 1: significant April shadow docket ruling in a case about the

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Speaker 1: Clean Water Act, where by a five to four votes,

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Speaker 1: the Conservative justices other than Chief Justice Roberts stayed a

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Speaker 1: district court order stayed an injunction that a district court

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Speaker 1: in California had issued against a Trump era rule, even

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Speaker 1: though the district court had ruled five months earlier, and

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Speaker 1: even though the parties that were asking sport for a

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Speaker 1: day hadn't shown any harm that had resulted by dint

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Speaker 1: of that district court, and so, as Justice Cadian pointed

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Speaker 1: out in her dissent in that case, a case called

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Speaker 1: Louisiana versus American rivers. If the court's going to use

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Speaker 1: the shadow docket in cases that just aren't emergencies like

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Speaker 1: that case, then the shadow doctors not for emergencies at all.

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Speaker 1: And all that's really happening is that these are simply

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Speaker 1: disguised and even more simply reasons merit's decisions. And that's

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Speaker 1: I think why there are folks like me who have

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Speaker 1: become so much more publicly critical of what the court

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Speaker 1: is doing in this context. Yeah, that cut my eye.

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Speaker 1: Undoing an e p A rule on water quality standards,

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Speaker 1: how did they even justify or they don't have to justify,

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Speaker 1: guess taking that on an emergency basis, it seems outlandish.

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Speaker 1: And this is exactly where we are. I mean, I

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Speaker 1: think in that case of such a crystallization, where hard

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Speaker 1: to see what the emergency was, given that there has

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Speaker 1: been five months the district Court had ruled. Even if

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Speaker 1: right the court was sympathetic to Louisian his claims on

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Speaker 1: the merits, the district Court had misread the clean water

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Speaker 1: after and misapplied relevant precedents about administrative law. You know,

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Speaker 1: why not just put that on the marriage docket and

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Speaker 1: deal with it in due court. And what's so I

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Speaker 1: think strike came about that decision June is you know,

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Speaker 1: you ask, you know, why did they do it right? Well,

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Speaker 1: we don't know because there was no majority opinion, there

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Speaker 1: was no concurrent opinion. We know it was five or

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Speaker 1: only because four justices publicly joined in the dissent, and

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Speaker 1: not just the three democratical points. These chief us to

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Speaker 1: John Roberts, joined Justice Kiggin's The Scent, an opinion which

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Speaker 1: called out the majority for in Justice Kiggan's words abusing

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Speaker 1: the shadow docket. So I think what we're seeing is

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Speaker 1: more and more public awareness of a trend that really

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Speaker 1: started in and the Clean Water Ract case is especially

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Speaker 1: I think Goland because the decision came just two days

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Speaker 1: after Justice Barrett gave this speech at the Ronald Reagan's

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Speaker 1: Presidential Library where she says, you know, if you really

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Speaker 1: think we're politicians in robes and not judges, read our opinion.

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Speaker 1: Read the opinion and see for yourself if there are

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Speaker 1: legal principles driving our decision making. Well, two days later,

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Speaker 1: she is the decisive vote in the Clean Water Ract case,

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Speaker 1: in which there was no opinion to read and in

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Speaker 1: some of these cases, you have lower courts having trials

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Speaker 1: on these issues, and then the Supreme Court comes along

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Speaker 1: and says, no, we're reversing that, without oral argument, without

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Speaker 1: any explanation. It's I don't know what else to say

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Speaker 1: that it's sort of jaw dropping. The key is that

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Speaker 1: I think there are a lot of folks out there

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Speaker 1: who think that all that matters is the bottom line.

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Speaker 1: And so if I say that the bottom line is okay,

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Speaker 1: then I don't care about how the court cut there,

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Speaker 1: but the process matters here. There's a more recent Louisiana

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Speaker 1: case about redistrict in that I think is really instructive here.

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Speaker 1: So Louisiana, you know, like a number of states, is

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Speaker 1: redrawing its congressional districts after and in life of a

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Speaker 1: district court, after an extensive hearing, writes this one hundred

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Speaker 1: and fifty two page decision that carefully sets out why

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Speaker 1: he believed Louisiana's maps violated the voting rights. That why

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Speaker 1: he believed Louisiana was required to draw at least one

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Speaker 1: more so called majority minority district to avoid violating steps

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Speaker 1: in two of the voting right back. And it is

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Speaker 1: a full bore full sorted analysis. Louisiana asked the Fifth Circuit,

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Speaker 1: the most conservative pelic court in the country, to stay

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Speaker 1: that district court decisions so we can use those maps

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Speaker 1: in the two elections. And the Fifth Circuit refuses to

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Speaker 1: issue a stay and writes thirty three pages of its

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Speaker 1: own about why, in its view, the district Court decision

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Speaker 1: was at the very least not set it to a

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Speaker 1: stay and maybe even correct. And then Louisiana goes to

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Speaker 1: the Supreme Court and says, hey, Supreme Court, will you

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Speaker 1: stay the district court decision? And the Supreme Court stays

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Speaker 1: the distric Court decision with narrow a sentence of explanation.

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Speaker 1: And so you have district courts, you know, doing their job,

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Speaker 1: working really really hard, writing really really thorough opinions. You

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Speaker 1: have the appeals courts doing their job writing thorough opinions.

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Speaker 1: And there's the Supreme Court, which in one sentence just says, nahum,

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Speaker 1: you know, I don't see how that is a legal

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Speaker 1: system that is going to increase public confidence in the

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Speaker 1: Supreme Court as an institution versus the notion that was

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Speaker 1: a sort of the synecolon non of the Supreme courts

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Speaker 1: legitimacy is its ability to explain itself. Did Justice Kavanaugh

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Speaker 1: try to make a distinction between, you know, how fast

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Speaker 1: the election was coming up? In one of those cases,

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Speaker 1: there's an Alabama case from earlier this term where Justice

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Speaker 1: Kavanaugh wrote a concurrence in the unsigned on its lay

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Speaker 1: in Supreme Court order staying a similar ruling in Alabama.

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Speaker 1: I mean, you had so the Albama cases in some

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Speaker 1: respects even more egregious, where you know, Alabama, a bunch

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Speaker 1: of Alabama voters the day after Governor Ivy signs the

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Speaker 1: congressional maps into law, they filed suit, like they filed

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Speaker 1: to literally as soon as they could. The case goes

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Speaker 1: to a three judge district court, which is comprised, I

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Speaker 1: think entirely of Trump appointees. The district court says these

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Speaker 1: maps violate the voting right that and you know, it's

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Speaker 1: just a lengthy opinions that you know, you've got to

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Speaker 1: draw him again. And the Supreme Court stays that order.

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Speaker 1: But what's crazy, as Kavanaugh's concurrence relies on this thing

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Speaker 1: called the personel principle and the for self principle is this,

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Speaker 1: you know, based on the two thousand and six shadow

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Speaker 1: docket ruling UM that federal court should not change the

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Speaker 1: rules for elections as the elections approach. Well, in the

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Speaker 1: Alabi on the case, the elections were nine months away, um,

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Speaker 1: And even the primaries, which could have been moved if

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Speaker 1: they had to be, were four months away. And so

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Speaker 1: you know, yeah, Justice Kavanaugh, I think I remember, joined

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Speaker 1: by Justice Alito. You know, it writes the short concurrence

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Speaker 1: trying to justify at least why the two of them

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Speaker 1: voted for a day. But if anything like they're concurring,

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Speaker 1: opinion raises more questions than it answers, because you know,

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Speaker 1: if Purcell applies that far in a dance of an election,

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Speaker 1: then how can you ever have an injunction in a

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Speaker 1: dance of an election that's going to be effect is

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Speaker 1: And you know, I think that part of the problem

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Speaker 1: here is that when you have either no explanation as

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Speaker 1: in Louisiana case, or explanations that just don't hold up

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Speaker 1: to scrutiny, as in the Kavanaugh concurrence in the Alabama case,

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Speaker 1: you know, June, for those who want to see partisanship

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Speaker 1: and rank politics, there's nothing to disabuse them of that conclusion.

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Speaker 1: There's no analysis to point in other direction. No one

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Speaker 1: can say, well, you know, that's just because you disagree

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Speaker 1: with how the Court is explaining itself. Well, if the

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Speaker 1: courts not explaining itself, what is there to disagree? Looking

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Speaker 1: at the numbers and the partisan splits the courts. Liberal

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Speaker 1: justices Stephen Bryer, Sonya Soto Mayor, and Atlanta Kagan dissented

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Speaker 1: the most in emergency orders that were granted, but conservative

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Speaker 1: justices Clarence Thomas, Samuel Alito, and Neil Gorsich did so

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Speaker 1: the most when the Court refused to act on appeal.

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Speaker 1: So what does that tell you? One of the many

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Speaker 1: interesting things about the shadow doctors, I think there's in

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Speaker 1: some respects more interesting data about the justices voting patterns

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Speaker 1: than there is on the merits docket. So there was

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Speaker 1: this remarkable moment last October. There was a case out

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Speaker 1: of made called Does versus Mills. It was a challenge

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Speaker 1: by US, the main healthcare workers, to the state's mandate

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Speaker 1: that healthcare represent the states be vaccinated. And there was

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Speaker 1: like a one paragraph concurring opinion by Justice Barrett, joined

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Speaker 1: by Justice Kavanaugh that basically said, just because we're sympathetic

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Speaker 1: to your claims on the merits. Doesn't mean we're automatically

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Speaker 1: going to vote to grant emergency relief. You know, we're

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Speaker 1: going to exercise some modicum of this suppression and deciding

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Speaker 1: when emergency release isn't as imporanted. Basically, Barrett and Kavanaugh

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Speaker 1: laying down a marker that they were going to not

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Speaker 1: vote to grant emergency release as often as they had

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Speaker 1: today as recently as the previous term and June we've

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Speaker 1: seen that play out. I mean, we've seen a number

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Speaker 1: of cases since October where the only public dissenters from

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Speaker 1: a denial of relief were Thomas A Leader and Gorsage,

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Speaker 1: And so the assumption is that Barrett and Kavanaugh did

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Speaker 1: not join them. Some of these have been vaccine mandate cases,

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Speaker 1: you know, the Navy Seals cases a good example of that.

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Speaker 1: Some of them have been cases about like for example,

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Speaker 1: Texas is social media law, and in that respect, again,

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Speaker 1: I think one of the stories of the October one

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Speaker 1: term is that the Court has at least to some

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Speaker 1: de moderated its shadow doctor behavior. But I actually think

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Speaker 1: in some respects even the moderated version of it is

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Speaker 1: just as problematic as you know, what we saw, for example,

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Speaker 1: during the October term, and the fact that Thomas the

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Speaker 1: Leader and Gorges would go further and would grant emergency

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Speaker 1: release even more often. I think, because you know, a

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Speaker 1: sign of how close we are to this being even

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Speaker 1: more of a problem already is so, then do the

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Speaker 1: lineups on the shadow docket differ from the lineups in

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Speaker 1: merits cases. There's a tendency when folks think about the

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Speaker 1: court to think about the stick three chord or the

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Speaker 1: three three three court, and I think that's not quite

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Speaker 1: fair on the shadow doctor. I mean, one of the

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Speaker 1: things that we saw again this term was Chief Justice

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Speaker 1: Roberts joining with the Liberals a number of times in

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Speaker 1: dissenting from shadow doctet orders. And so I think the

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Speaker 1: shadow docket, as much as anywhere else, is basically as

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Speaker 1: goes Kavanaugh and Barrett, so goes the Court. And you know,

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Speaker 1: one of the things the striking numbers of the whole

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Speaker 1: term is every justice dissented at least once June in

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Speaker 1: a merit's case. I think the fewest was three by

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Speaker 1: Kavanaugh in the Chief. But on the shadow docket there

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Speaker 1: wasn't a single shadow docket order all term from which

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Speaker 1: Justice Kavanaugh publicly dissented, and I think that's a sign

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Speaker 1: of the times. I think that's a sign of who's

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Speaker 1: basically the critical vote in shadow doctet context. And I

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Speaker 1: think it's all the more reason to be wary about

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Speaker 1: a fourth that's not explaining itself, given that. You know,

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Speaker 1: when Justice Kavanaught is right in on the shadow docket,

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Speaker 1: as in the Alabama redistrictive case, his opinions are often,

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Speaker 1: shall we say, not exactly satisfied in providing a coherent,

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Speaker 1: sort of defensible forward looking that explanation, Thanks so much, Steve.

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Speaker 1: That's Professor Stephen Vladdock of the University of Texas Law School.

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Speaker 1: Remember back in May when Elon Musk tried some legally

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Speaker 1: to describe his claim that Twitter breach there forty four

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Speaker 1: billion dollar buyout deal. You know, it's a material abvers

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Speaker 1: uh misstatement. You know, if if if they in fact

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Speaker 1: have been um for surferously claiming less than five of

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Speaker 1: VEGERSPAM accounts, but in fact it is four or five

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Speaker 1: times that number, or perhaps ten times that number. This

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Speaker 1: is a big deal. It is a big deal. But

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Speaker 1: the Delaware Chance to Record is treating it just like

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Speaker 1: any other big deal. It handles, and the indication is

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Speaker 1: that the judge doesn't think that counting bots is the

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Speaker 1: main issue. Joining me is Eric Tallely, a professor at

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Speaker 1: Columbia Law School. So Eric Musk lost the first round

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Speaker 1: in court, the Chief Judge, Kathleen McCormick put the case

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Speaker 1: on the fast track, with trial scheduled for October. What

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Speaker 1: do you think is the real reason Musk wanted to

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Speaker 1: delay until February or was it delayed just for delays sake? Yeah,

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Speaker 1: I think there was definitely a part of the strategy

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Speaker 1: that really just wanted to create additional uncertainty. I think

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Speaker 1: a lot of people who have tried to size up

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Speaker 1: this case suggest that Mr Musk is sort of fighting

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Speaker 1: an uphill battle right now. I think the idea, you know,

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Speaker 1: was probably first and foremost just to elongate the clock

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Speaker 1: so that, you know, possibly more information could come out,

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Speaker 1: so that there would be greater possibilities to mine into

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Speaker 1: the spam account and body count data and possibly you know,

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Speaker 1: pull a rabbit out of the hat where a rabbit

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Speaker 1: really hasn't been there. Thus part now there's a second

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Speaker 1: possible reason to try to elongate the proceedings, which is

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Speaker 1: that Mr Musk's own financing, by its very terms, expires

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Speaker 1: in the spring of two thousand twenty three, and if

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Speaker 1: the financing expires of its own terms, that could potentially

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Speaker 1: change a lot of the potential remedies that are available.

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Speaker 1: It could make it harder, for example, to have a

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Speaker 1: specific performance decree when there's no longer any financing in

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Speaker 1: the picture. Briefly, what were each side's argument for Twitter

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Speaker 1: for why it wanted an expedited trial and must for

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Speaker 1: why he wanted to know until February. Yeah, I think

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Speaker 1: that that the Twitter account was was relatively unsurprising in

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Speaker 1: terms of of of where uh Twitter's lawyer Bill Sabbatt

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Speaker 1: was going to. The expediting of a trial in a

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Speaker 1: large commercial litigation cases actually pretty frequent in Delaware, particularly

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Speaker 1: when it comes to UH, to these so called busted

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Speaker 1: deal cases. You basically have to say, look, we've got, um,

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Speaker 1: what's known as a colorable claim, which is a pretty

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Speaker 1: low standard, because we've we've alleged some things that um,

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Speaker 1: you know, if we improve them, they're gonna they're gonna

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Speaker 1: hold water. Uh. And the second is that that they

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Speaker 1: are ongoing uh suffering some type of an irreparable harm

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Speaker 1: if they don't get resolution of the case. And uh,

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Speaker 1: you know, in in many respects, both of those things were, uh,

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Speaker 1: we're already out there kind of in the public domain.

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Speaker 1: The colorable claim was relatively straightforward. And Uh, and the

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Speaker 1: fact that you know, Twitter was kind of in this

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Speaker 1: state of limbo for a long period of time and

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Speaker 1: continues to be in the state of limbos. We don't

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Speaker 1: know exactly what's happening with this deal means that employees

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Speaker 1: may be leaving, that commercial clients may be leaving, that

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Speaker 1: the user base may be growing uncertain about what uh

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Speaker 1: to expect in terms of Twitter, and and and those

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Speaker 1: are the types of arguments that Twitter's lawyers said, you know,

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Speaker 1: really do justify expediting the process. Moreover, they said, you know,

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Speaker 1: we we even in the merger agreement said you know,

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Speaker 1: we're going to have a termination date in October. And

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Speaker 1: that also is a signal that we wanted this resolved quickly.

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Speaker 1: Must's attorneys, um, you know, somewhat unsurprisingly, said well, you know,

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Speaker 1: we really want to make this case about how do

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Speaker 1: you measure bought accounts? Now, Uh, there's a big issue

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Speaker 1: about whether that's even going to be a central aspect

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Speaker 1: of this case because you know, the contract itself doesn't

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Speaker 1: really even talk about bought accounts, but certainly, UH, team

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Speaker 1: Must has been trying to inject that into the picture,

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Speaker 1: and to the extent they can. UH, Must's attorneys argued,

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Speaker 1: you know, it's going to take a long time to

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Speaker 1: try to vet all the data, to try to bring

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Speaker 1: in experts to try to understand what's going on with

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Speaker 1: the data. And so, you know, somewhat unavoidably, I think

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Speaker 1: Must's lawyers, you know, kind of had to make the

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Speaker 1: issue of you know, measuring bought accounts something that that uh,

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Speaker 1: you know, um they could convince the judge was sort

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Speaker 1: of a fore ordained challenge in this case. And uh

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Speaker 1: and then the second thing that they that they argued

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Speaker 1: is that you know, don't take don't read too much

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Speaker 1: into this October termination date that we got into, uh,

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Speaker 1: into the contract, because if you look into the terms,

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Speaker 1: that that date just continues to get moved forward and

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Speaker 1: pushed forward if there's litigation around UH this deal, which

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Speaker 1: there now is. So really the the real deadline is

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Speaker 1: the deadline for the financing in the spring of two

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Speaker 1: thousand twenty three, and and none of those is a

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Speaker 1: terrible argument. You know, I I think there is a

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Speaker 1: sense in which, you know, the allegations about bought accounts,

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Speaker 1: you know, even though they are in many ways peripheral

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Speaker 1: to the contract, Musk's attorneys are definitely going to be

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Speaker 1: trying to concentrate on that. So there are going to

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Speaker 1: be additional arguments about that, and uh and the attorneys

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Speaker 1: for for Mr Musk were actually pretty good, I think,

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Speaker 1: in in in in you know, taking a little bit

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Speaker 1: of the attention off of the idea that you know,

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Speaker 1: we had to settle everything by this October termination day,

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Speaker 1: just you know, the terms of the contract were a

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Speaker 1: little bit more flexible to that. Did the judge give

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Speaker 1: Twitter everything they were looking for? She largely gave the

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Speaker 1: Twitter attorneys what they were looking for, but not quite.

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Speaker 1: She said, Look, the proposed schedule that the Twitter attorneys

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Speaker 1: have put forward is somewhat aggressive relative to what we've

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Speaker 1: seen in past practice. She sort of surveyed other cases

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Speaker 1: that you know, had been filed in similar situations and said,

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Speaker 1: look at these other ones. You know, they're big, they're expensive,

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Speaker 1: they're complicated, but we still are able to get them

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Speaker 1: done between you know, sixty and ninety days and that's

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Speaker 1: what I'm going to apply here as well. I don't

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Speaker 1: see any reason why we have to use a different

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Speaker 1: set of rules than has applied to these other cases.

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Speaker 1: We now know how to adapt to COVID. If there's

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Speaker 1: a spike and infections and we have to do things

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Speaker 1: over zoom, we know how to do that as well.

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Speaker 1: So I have great faith chance for McCormick set in

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Speaker 1: the attorneys and the experts and my staff to pull

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Speaker 1: this off just the way that we pull off any

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Speaker 1: other type of busted deal case in the usual course

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Speaker 1: of conducting our business. And that was significant, I think

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Speaker 1: for a couple of reasons. One is that it does

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Speaker 1: sort of suggest that Delaware wants to get back to

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Speaker 1: its usual routines, because it's views those as being important

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Speaker 1: for everyone who has an interest in Delaware law, in

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Speaker 1: in large transactions and and applying Delaware law to it.

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Speaker 1: I think the other reason that it was significant is

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Speaker 1: that it suggested, you know, in a somewhat a preliminary way,

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Speaker 1: but it still suggested that Chancellor McCormick was not going

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Speaker 1: to be inclined to treat elon musk and specials or

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Speaker 1: exceptional or you know, floating above the rules that pertain

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Speaker 1: to everyone else. He's going to get exactly the same

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Speaker 1: type of justice that anyone else would so with Twitter,

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Speaker 1: and we're gonna, you know, see how this plays out

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Speaker 1: over the next couple of months. So in many ways,

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Speaker 1: the day was a good one for Twitter, not so

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Speaker 1: good for Musk, but it was a very good day,

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Speaker 1: I think for the Delaware court system as a whole.

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Speaker 1: Did Chancellor McCormick give any hints about how she views

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Speaker 1: this deal or what's important in the case. She was

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Speaker 1: appropriately pretty guarded about expressing opinions about the underlying merits

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Speaker 1: of the case. There are potentially a few things that

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Speaker 1: do seem to leak out a little bit. She did

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Speaker 1: specifically say that, you know, this looks like it's the

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Speaker 1: type of case where specific performance would be appropriate. That

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Speaker 1: money damages, you know, wouldn't compensate Twitter for all of

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Speaker 1: the pain and harm and lack of closing deal. And so,

431
00:24:14,960 --> 00:24:16,959
Speaker 1: you know, to the extent that there was, there is

432
00:24:17,080 --> 00:24:20,960
Speaker 1: and has been a debate about whether Chancellor McCormick would

433
00:24:21,000 --> 00:24:26,120
Speaker 1: be friendly to Twitter's requested relief of an injunction forcing

434
00:24:26,160 --> 00:24:28,640
Speaker 1: the closing of this deal. I think she did sort

435
00:24:28,640 --> 00:24:31,040
Speaker 1: of tip her hand a little bit to say, yeah,

436
00:24:31,080 --> 00:24:34,640
Speaker 1: that looks like it would be an appropriate remedy in

437
00:24:34,720 --> 00:24:37,320
Speaker 1: this case. And so you know, there was a little

438
00:24:37,359 --> 00:24:39,479
Speaker 1: bit of a a sort of sort of movement at

439
00:24:39,560 --> 00:24:42,800
Speaker 1: least in terms of people's predictions about whether she would

440
00:24:42,920 --> 00:24:46,240
Speaker 1: embrace that or not. I think the second thing that

441
00:24:46,320 --> 00:24:49,640
Speaker 1: it is much more implicit that comes out is that

442
00:24:49,760 --> 00:24:52,720
Speaker 1: now that she has put these parties on you know,

443
00:24:52,880 --> 00:24:55,600
Speaker 1: a leash that's only a couple of months long, to

444
00:24:55,720 --> 00:24:58,439
Speaker 1: do all of their expert discovery, to do all of

445
00:24:58,480 --> 00:25:01,800
Speaker 1: their depositions of fact witnesses, to do all of their

446
00:25:01,880 --> 00:25:05,360
Speaker 1: document review, and all of their data review, it suggests

447
00:25:05,400 --> 00:25:08,359
Speaker 1: that the bot counting exercise is going to have to

448
00:25:08,440 --> 00:25:12,400
Speaker 1: be somewhat more limited than what team must wanted. You're

449
00:25:12,400 --> 00:25:14,600
Speaker 1: not going to be able to, you know, pull out

450
00:25:14,680 --> 00:25:18,159
Speaker 1: just mountains and mountains and mountains of data and be

451
00:25:18,440 --> 00:25:23,040
Speaker 1: able to go over it and reach definitive conclusions about

452
00:25:23,119 --> 00:25:25,800
Speaker 1: it in a couple of months time. These things you

453
00:25:26,119 --> 00:25:30,040
Speaker 1: do take time for a full blown review of the data.

454
00:25:30,160 --> 00:25:33,159
Speaker 1: So it is at least a little bit suggestive that

455
00:25:33,320 --> 00:25:37,760
Speaker 1: Chancellor McCormick is probably going to cabin the fishing expeditions

456
00:25:37,760 --> 00:25:41,240
Speaker 1: for bots a little bit and quite possibly concentrate a

457
00:25:41,240 --> 00:25:45,000
Speaker 1: little bit more on exactly what was Twitter putting in

458
00:25:45,040 --> 00:25:49,679
Speaker 1: their securities disclosures. They weren't writing about specific numbers of bots.

459
00:25:49,760 --> 00:25:52,520
Speaker 1: They had a rough estimate, but but much of it

460
00:25:52,560 --> 00:25:56,000
Speaker 1: was just sort of describing how they went about auditing

461
00:25:56,040 --> 00:25:59,520
Speaker 1: their own system and that's the thing that is most

462
00:25:59,560 --> 00:26:03,639
Speaker 1: testam in terms of whether those disclosures had fraudulent statements,

463
00:26:03,640 --> 00:26:06,600
Speaker 1: And then did they actually audit their bot systems? Did

464
00:26:06,680 --> 00:26:10,040
Speaker 1: the process that they have cohere with how they described

465
00:26:10,040 --> 00:26:13,880
Speaker 1: it in their violing Twitter said that Musk willfully breached

466
00:26:13,920 --> 00:26:16,920
Speaker 1: his obligation to make his best efforts to close the deal.

467
00:26:17,680 --> 00:26:21,160
Speaker 1: Is that the standard is it best efforts? Well, they

468
00:26:21,320 --> 00:26:26,320
Speaker 1: they put a standard into the contract itself, which which

469
00:26:26,800 --> 00:26:31,280
Speaker 1: puts a duty of best efforts on Mr Musk. There

470
00:26:31,400 --> 00:26:34,600
Speaker 1: is a parlor game in Delaware law, and there has

471
00:26:34,640 --> 00:26:39,359
Speaker 1: been for many years about how courts should interpret various

472
00:26:39,480 --> 00:26:42,320
Speaker 1: terms that use the word efforts. And there's a whole

473
00:26:42,560 --> 00:26:47,120
Speaker 1: different set of lists of them best efforts, reasonable efforts,

474
00:26:47,320 --> 00:26:51,400
Speaker 1: commercially reasonable efforts, commercially reasonable best efforts. The list goes

475
00:26:51,440 --> 00:26:54,400
Speaker 1: on and on, and in some recent cases, the Delaware

476
00:26:54,440 --> 00:26:58,400
Speaker 1: courts you know, haven't been willing to pick knits between

477
00:26:58,400 --> 00:27:02,400
Speaker 1: those various types of of provisions. They basically said, look,

478
00:27:02,400 --> 00:27:06,199
Speaker 1: you've got to demonstrate that you have tried and if

479
00:27:06,240 --> 00:27:08,840
Speaker 1: there's evidence that you were either not trying or trying

480
00:27:08,880 --> 00:27:12,520
Speaker 1: to sabotage the deal, that's going to violate your efforts

481
00:27:12,640 --> 00:27:16,359
Speaker 1: obligation and and and and Twitter here, I think is

482
00:27:16,400 --> 00:27:19,159
Speaker 1: on relatively solid cliff ground at least given the facts

483
00:27:19,160 --> 00:27:21,919
Speaker 1: that are out there publicly that that that you know,

484
00:27:22,000 --> 00:27:25,280
Speaker 1: that that that must not only was you know, very

485
00:27:25,400 --> 00:27:28,840
Speaker 1: quickly trying to backtrack on the deal, but was even

486
00:27:28,960 --> 00:27:31,920
Speaker 1: sort of engaged in uh you know, trying to get

487
00:27:32,040 --> 00:27:35,160
Speaker 1: you know, the saf you to investigate Twitter and uh

488
00:27:35,200 --> 00:27:40,199
Speaker 1: and was you know disparaging various uh, various employees and

489
00:27:40,240 --> 00:27:43,920
Speaker 1: managerial actors within within Twitter. A lot of those are

490
00:27:43,920 --> 00:27:47,439
Speaker 1: public um events that are are going to be you know,

491
00:27:47,880 --> 00:27:51,439
Speaker 1: going to make for pretty good uh you know, documents

492
00:27:51,480 --> 00:27:55,040
Speaker 1: and demonstratives in a in a judicial proceeding. Uh. And

493
00:27:55,080 --> 00:27:58,119
Speaker 1: so so you know, the the key thing that that

494
00:27:58,119 --> 00:28:02,080
Speaker 1: that Twitter needs to demonstrate is that, uh, that it

495
00:28:02,160 --> 00:28:05,880
Speaker 1: was Musk who breached this contract, uh, not just by

496
00:28:05,920 --> 00:28:08,359
Speaker 1: pulling the plug, by claiming he was going to terminate it,

497
00:28:08,720 --> 00:28:11,000
Speaker 1: but by doing a bunch of this stuff. You know,

498
00:28:11,040 --> 00:28:14,800
Speaker 1: all through this process, Musk's team is going to try

499
00:28:14,840 --> 00:28:18,159
Speaker 1: to demonstrate that that no, it was Twitter that breached

500
00:28:18,160 --> 00:28:21,960
Speaker 1: the contract because Twitter wasn't giving him all the information

501
00:28:22,320 --> 00:28:26,400
Speaker 1: that he kept requesting and requesting and requesting. Uh. And

502
00:28:26,440 --> 00:28:29,000
Speaker 1: you know, Twitter argues that, you know, we were complying

503
00:28:29,040 --> 00:28:32,320
Speaker 1: with our obligations, that our obligations gave us some judgment

504
00:28:32,440 --> 00:28:35,800
Speaker 1: about you know how granular we were going to have

505
00:28:35,960 --> 00:28:39,520
Speaker 1: to be in providing him with information. And so what

506
00:28:39,640 --> 00:28:43,560
Speaker 1: does this expedited schedule mean for the legal teams here?

507
00:28:44,080 --> 00:28:46,440
Speaker 1: For both sides, this is now kind of an all

508
00:28:46,760 --> 00:28:50,960
Speaker 1: hands on deck moment. So I would not be surprising

509
00:28:51,120 --> 00:28:54,240
Speaker 1: to see delivery trucks with Diet Coke and Red Bulls

510
00:28:54,280 --> 00:28:56,920
Speaker 1: backing up to the law firms that are having to

511
00:28:56,960 --> 00:29:00,440
Speaker 1: push forward with all kinds of depositions, document to review,

512
00:29:00,600 --> 00:29:04,600
Speaker 1: expert reports, and so forth. But this is not unusual

513
00:29:04,880 --> 00:29:08,400
Speaker 1: in Delaware, even for large high profile cases. There are

514
00:29:08,400 --> 00:29:11,240
Speaker 1: a lot of these large, high profile cases that end

515
00:29:11,320 --> 00:29:15,440
Speaker 1: up taking this fast track to final adjudication. In fact,

516
00:29:15,600 --> 00:29:20,040
Speaker 1: that's part of what Delaware advertises itself as providing for

517
00:29:20,440 --> 00:29:25,000
Speaker 1: big transactions in which you know, delay um might mean

518
00:29:25,120 --> 00:29:28,959
Speaker 1: death for the transaction or or uncertainty is you know,

519
00:29:29,000 --> 00:29:30,880
Speaker 1: one of the worst things that you can have, and

520
00:29:31,000 --> 00:29:34,360
Speaker 1: for longing that uncertainty is even worse. So there's a

521
00:29:34,400 --> 00:29:37,800
Speaker 1: sense in which, yeah, there's a big transaction, but it's

522
00:29:37,840 --> 00:29:42,200
Speaker 1: not an overly complicated transaction. Um. In fact, you know,

523
00:29:42,480 --> 00:29:45,280
Speaker 1: a lot of the aspects of this transaction, uh, you

524
00:29:45,280 --> 00:29:49,320
Speaker 1: know pretty much didn't leave very much to chance. And

525
00:29:49,400 --> 00:29:52,040
Speaker 1: so yeah, that both sides are going to be spending

526
00:29:52,080 --> 00:29:53,560
Speaker 1: a lot of effort to try to make out the

527
00:29:53,560 --> 00:29:57,080
Speaker 1: best case that they can. But this case to the

528
00:29:57,440 --> 00:29:59,680
Speaker 1: facts of this case, but the way that this contract

529
00:29:59,720 --> 00:30:03,760
Speaker 1: were uh, doesn't suggest that it's going to be you know,

530
00:30:03,960 --> 00:30:07,240
Speaker 1: rocket science to be able to pull this off. It's

531
00:30:07,280 --> 00:30:09,480
Speaker 1: definitely the case that the party is gonna be working very,

532
00:30:09,600 --> 00:30:13,080
Speaker 1: very hard. But these lawyers have gotten to the finish

533
00:30:13,160 --> 00:30:16,840
Speaker 1: line countless times before is cases that had similar sets

534
00:30:16,880 --> 00:30:21,400
Speaker 1: of facts, though not necessarily the huge size and big

535
00:30:21,400 --> 00:30:25,400
Speaker 1: personalities that are involved here. Finally, you've been thinking that

536
00:30:25,440 --> 00:30:27,920
Speaker 1: Twitter had the advantage here. Do you still think Twitter

537
00:30:28,000 --> 00:30:31,040
Speaker 1: has the advantage? Yeah, I think that you know, Twitter

538
00:30:31,800 --> 00:30:35,120
Speaker 1: seems to have been um in the driver's seat, even

539
00:30:35,160 --> 00:30:37,680
Speaker 1: going into this proceeding the fact that they got pretty

540
00:30:37,760 --> 00:30:41,240
Speaker 1: much what they wanted in terms of a shorter timeline.

541
00:30:42,000 --> 00:30:46,440
Speaker 1: Playing the delay game, uh was was going to feed

542
00:30:46,480 --> 00:30:50,240
Speaker 1: into the Musk team's uh sort of best case, and

543
00:30:50,360 --> 00:30:53,360
Speaker 1: they they didn't get that. So, if anything, the decision

544
00:30:53,520 --> 00:31:00,280
Speaker 1: by Chancellor McCormick, uh, you know, strengthened Twitter's position in

545
00:31:00,360 --> 00:31:03,320
Speaker 1: this deal. Uh. And you know, we're gonna learn more

546
00:31:03,320 --> 00:31:06,040
Speaker 1: and the parties themselves are gonna learn more, um as

547
00:31:06,080 --> 00:31:10,719
Speaker 1: they go into this very very fast pace of discovery,

548
00:31:10,760 --> 00:31:13,320
Speaker 1: and it may be that their own views about the

549
00:31:13,360 --> 00:31:16,360
Speaker 1: case start to converge with one another and we may

550
00:31:16,440 --> 00:31:20,920
Speaker 1: see a settlement here. You know. The personalities are big enough, however,

551
00:31:21,120 --> 00:31:23,920
Speaker 1: that you know that this case could end up going

552
00:31:24,480 --> 00:31:28,240
Speaker 1: all the way to litigation, which would uh you know,

553
00:31:28,120 --> 00:31:31,080
Speaker 1: you know, happen in the last half of October. But

554
00:31:31,120 --> 00:31:34,280
Speaker 1: that also is going to be a fairly quick trial

555
00:31:34,480 --> 00:31:37,520
Speaker 1: five days um that are being calendared right now in

556
00:31:37,560 --> 00:31:39,360
Speaker 1: the last couple of weeks of October. It looks like

557
00:31:39,840 --> 00:31:43,040
Speaker 1: thanks so much, Eric, that's Professor Eric Talley of Columbia

558
00:31:43,120 --> 00:31:45,240
Speaker 1: Law School. And that's it for this edition of the

559
00:31:45,280 --> 00:31:48,240
Speaker 1: Bloomberg Law Show. Remember you can always get the latest

560
00:31:48,320 --> 00:31:51,440
Speaker 1: legal news on our Bloomberg Law Podcast. You can find

561
00:31:51,440 --> 00:31:56,040
Speaker 1: them on Apple Podcasts, Spotify, and at www dot bloomberg

562
00:31:56,080 --> 00:31:59,880
Speaker 1: dot com, slash podcast slash Law, and remember to tune

563
00:31:59,920 --> 00:32:02,680
Speaker 1: to the Bloomberg Laws Show every week night at ten

564
00:32:02,760 --> 00:32:06,040
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565
00:32:06,120 --> 00:32:07,320
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