BDO USA, LLP v. EverGlade Global, Inc. ( 2022 )

COURT OF CHANCERY
OF THE
STATE OF DELAWARE
KATHALEEN ST. JUDE MCCORMICK LEONARD L. WILLIAMS JUSTICE CENTER
CHANCELLOR 500 N. KING STREET, SUITE 11400
WILMINGTON, DELAWARE 19801-3734
January 5, 2022
Ashley R. Altshuler, Esquire Julia B. Klein, Esquire
Ethan H. Townsend, Esquire Klein LLC
Kevin M. Regan, Esquire 225 W. 14th Street, Suite 100
McDermott Will & Emery LLP Wilmington, DE 19801
1007 N. Orange Street, 10th Floor
Wilmington, DE 19801 Matthew F. Davis, Esquire
Potter Anderson & Corroon LLP
Jason C. Jowers, Esquire 1313 N. Market Street, 6th Floor
Sarah T. Andrade, Esquire Wilmington, DE 19801
Bayard, P.A.
600 N. King Street, Suite 400
Wilmington, DE 19801
Re: BDO USA, LLP v. EverGlade Global, Inc.,
C.A. No. 2021-0244-KSJM
Dear Counsel:
On November 4, 2021, I heard oral argument on Plaintiff’s Motion for Court
Authorization for Twitter, Inc. to Comply with Subpoenas (the “Motion”).1 I granted the
motion in a bench ruling during the hearing but indicated that I intended to elaborate upon
my ruling at a later time.2 Hence this letter.
As background, Plaintiff BDO USA, LLP (“Plaintiff” or “BDO”) served two
subpoenas on Twitter, Inc. (“Twitter”) seeking identifying information associated with four
1
See generally C.A. No. 2021-0244-KSJM, Docket (“Dkt.”) 210 (“Oral Arg. Tr.”).
2
See id. at 36:7–14.
C.A. No. 2021-0244-KSJM
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anonymous Twitter accounts relevant to this case.3 Those accounts were @boycottbdo,
@boycottbdo1, @boycottbdo2, and @bdoboycott (collectively, the “Twitter Accounts”). 4
Plaintiff alleges that those accounts are or were operated by Defendant EverGlade Global,
Inc. (“Defendant” or “EverGlade”) and EverGlade’s CEO Eric Jia-Sobota, a former BDO
partner.5 Plaintiff further alleges that the accounts were used to launch a “smear campaign”
against BDO.6 EverGlade and Jia-Sobota deny association with the accounts.7 Twitter
objected to providing the requested information absent a court order,8 so Plaintiff filed the
Motion.9
While the scope of permissible discovery is broad under Delaware law,10 subpoenas
intended to reveal anonymous internet speakers implicate countervailing First Amendment
issues.11 Taking these constitutional issues into account, the Delaware Supreme Court
3
See Dkt. 157, Transmittal Decl. of Sarah T. Andrade, Esq. in Supp. of Pl.’s Mot. for Ct.
Authorization for Twitter, Inc. to Comply with Subpoenas (“Andrade Decl.”) Ex. 8, 9.
4
Id.
5
Dkt. 156, Pl.’s Mot. for Ct. Authorization for Twitter, Inc. to Comply with Subpoenas
(“Mot.”) at 2–3.
6
Id. at 3–4.
7
See Dkt. 48, Answer to Am. Verified Compl. ¶¶ 33, 159, 160, 163; Andrade Decl. Ex. 6
at 14:20–25, 163:7–10.
8
See Andrade Decl. Ex. 10, Ex. 11; Mot. at 7 n.3.
9
See generally Mot.
10
See, e.g., Prod. Res. Grp., L.L.C. v. NCT Grp., Inc., 863 A.2d 772, 802 (Del. Ch. 2004).
11
See generally Reno v. Am. Civ. Liberties Union, 521 U.S. 844, 870 (1997) (holding that
there is “no basis for qualifying the level of First Amendment scrutiny that should be
applied to [the internet].”); Doe v. 2TheMart.com Inc., 140 F.Supp.2d. 1088, 1097 (W.D.
C.A. No. 2021-0244-KSJM
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articulated the standard that Delaware courts apply when faced with a discovery request
seeking to expose the identity of an anonymous figure who has posted allegedly defamatory
material on the internet in the 2005 decision Doe v. Cahill.12
In Cahill, someone anonymously posted statements on an internet blog that accused
a Smyrna city councilman of character flaws, mental deterioration, and paranoia.13
Councilman Cahill and his wife sued the anonymous poster and others for defamation. The
plaintiffs served a subpoena on Comcast seeking the identity of the poster through the
poster’s IP address.14 The trial court denied a motion for a protective order, applying a
“good faith” standard to determine whether the plaintiffs could compel Comcast to disclose
the poster’s identity.15
The Delaware Supreme Court reversed on appeal, announcing the standard that
governs the instant analysis.16 A party seeking to uncover an anonymous speaker’s identity
through the discovery process must (i) make reasonable efforts to notify the speaker and
allow the speaker an opportunity to respond, and (ii) introduce facts sufficient to create a
Wash. 2001) (concluding that “the constitutional rights of Internet users, including the First
Amendment right to speak anonymously, must be carefully safeguarded.”).
12
See Doe v. Cahill, 884 A.2d 451, 461 (Del. 2005).
13
Id. at 454.
14
Id. at 455.
15
See Cahill v. John Doe-Number One, 879 A.2d 943, 954–56 (Del. Super. Ct. 2005).
16
Cahill, 884 A.2d at 466–68.
C.A. No. 2021-0244-KSJM
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genuine issue of material fact that would defeat a motion for summary judgment. 17 As I
previously ruled, Plaintiff has met both of those burdens.
First, Cahill requires that “to the extent reasonably practicable under the
circumstances, the plaintiff must undertake efforts to notify the anonymous poster that he
is the subject of a subpoena or application for order of disclosure.” 18 Twitter notified the
two accounts identified in the first subpoena, @boycottbdo and @boycottbdo1, by sending
notice and a copy of the first subpoena to the email addresses associated with those
accounts.19 Initially, Twitter could not locate email addresses for the two accounts
identified in the second subpoena, @boycottbdo2 and @bdoboycott, but sent notice and a
copy of the second subpoena to the email addresses for the first two accounts. 20 Later,
Twitter found an email address for @boycottbdo2 and sent it the same documents.21
17
Id. at 460–61.
18
Id. at 460.
19
See Andrade Decl. Ex. 8 (first subpoena); Ex. 10 (“Twitter has sent notice and a copy of
your subpoena to any email address(es) associated with any account(s) properly identified
in your subpoena.”).
20
See Andrade Decl. Ex. 9 (second subpoena); Ex. 18 (Twitter’s counsel informing
Plaintiff’s counsel in an email that “the accounts covered by the second subpoena
(@boycottbdo2 & @bdoboycott) have not been notified because they were deleted
sufficiently far in advance of Twitter’s receipt of the second subpoena that identifying
information for those 2 accounts was no longer available in Twitter’s regular production
tools. . . . notice of the second subpoena was actually sent to the email addresses for the
accounts covered by the first subpoena (@boycottbdo & @boycottbdo1).”).
21
See Andrade Decl. Ex. 18 (Twitter’s counsel informing Plaintiff’s counsel in an email
that Twitter had “been able to locate some IP addresses for @boycottbdo2 & @bdoboycott,
as well as an email address for @boycottbdo2, but not for @bdoboycott. Notice went out
to the email address associated with @boycottbdo2”).
C.A. No. 2021-0244-KSJM
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Defendant argued that notice had not been properly provided because Cahill states
that “when a case arises in the internet context, the plaintiff must post a message notifying
the anonymous defendant of the plaintiff's discovery request on the same message board
where the allegedly defamatory statement was originally posted.”22 Thus, Defendant
argued that “BDO was required to inform the anonymous Twitter poster(s) on the Twitter
platform of the pending subpoenas.”23 Satisfying notice in this manner, however, would
have proven difficult if not pointless for Plaintiff; with the exception of @boycottbdo, the
Twitter Accounts had been deleted.24
Even if the accounts had not been deleted, Defendant’s argument is unpersuasive.
In Cahill, the court observed that a federal statute required Comcast to notify the
anonymous speaker of the plaintiffs’ discovery request but expressed concern that such a
statute may not apply to future cases.25 Thus, the court held that “regardless of the medium
in which the allegedly defamatory statement is published, the plaintiff must undertake
reasonable efforts to notify the anonymous defendant of the discovery request and must
withhold action to allow the defendant an opportunity to respond.”26
22
Cahill, 884 A.2d at 461.
23
Dkt. 182, Def.’s Opp’n to Pl.’s Mot. for Ct. Authorization for Twitter, Inc. to Comply
with Subpoenas (“Answering Br.”) at 10–11.
24
See Dkt. 196, Pl.’s Reply in Further Supp. of Its Mot. for Ct. Authorization for Twitter,
Inc. to Comply with Subpoenas at 12.
25
Cahill, 884 A.2d at 461.
26
Id. (emphasis added).
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Twitter’s notice to the email addresses associated with the Twitter Accounts
satisfied Plaintiff’s reasonable-efforts obligation established in Cahill. To hold otherwise
would be nonsensical; the entire point of Plaintiff’s subpoena is to identify the person
responsible for the Twitter Accounts’ activity. Twitter has better access to that information
than Plaintiff, and @boycottbdo2 is a good example. The @boycottbdo2 account owner
deleted the account, and Plaintiff would have therefore wasted its time by attempting to
notify @boycottbdo2 of the subpoena by sending a Tweet on the Twitter platform.27
Twitter was eventually able to locate an email address for @boycottbdo2 and send notice
to that address, which is a more reliable method of contacting the anonymous user than
posting a Tweet about a subpoena would have been regardless. Plaintiff was not required
to duplicate Twitter’s efforts on that front; what matters is that the anonymous speaker was
notified.
Next, Plaintiff satisfied the summary judgment standard. Summary judgment is
granted where there is no genuine issue as to any material fact. A plaintiff who wishes to
satisfy the Cahill standard must set forth “facts to defeat a summary judgment motion” and
“must submit evidence sufficient to establish a prima facie case for each essential element
27
See also Ciabattoni v. Teamsters Local 326, 2018 WL 2418388, at *3 (Del. Super. Ct.
May 29, 2018) (rejecting the plaintiff’s claim “that he is unable to provide notice until he
knows the identity of the speaker. Yet the Supreme Court anticipated this conundrum and
articulated that ‘when a case arises in the internet context, the plaintiff must post a message
notifying the anonymous defendant of the plaintiff's discovery request on the same message
board where the allegedly defamatory statement was originally posted.’ If for some reason
Plaintiff would be unable to do so, he must still have made a reasonable effort to notify the
speaker. He has not done so here.”).
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of the claim in question.”28 In other words, here, BDO had the burden of showing that it
would overcome a summary judgment motion on its claims. BDO asserted that it met the
Cahill standard for its defamation claim, and I agree.29
Under Delaware law, the elements of defamation are “1) the defendant made a
defamatory statement; 2) concerning the plaintiff; 3) the statement was published; and 4) a
third party would understand the character of the communication as defamatory.”30 Public
figures must establish two additional elements to prevail on a defamation claim: “that 5) the
statement is false and 6) that the defendant made the statement with actual malice,” though
the sixth factor is irrelevant to the anonymous speaker revelation standard.31
Cahill instructs that the first element is the most important because the remaining
factors are relatively easy to meet.32 Thus, a court must determine “first, whether alleged
28
Cahill, 884 A.2d at 460.
29
See Mot. at 9. This letter, much like Defendant’s answering brief and oral argument,
does not address Plaintiff’s arguments that it has also satisfied the Cahill standard for its
claim under the Deceptive Trade Practices Act. See generally Answering Br.; Oral Arg.
Tr.
30
Cahill, 884 A.2d at 463.
31
Id. at 463–64 (clarifying that “we do NOT hold that the public figure defamation plaintiff
is required to produce evidence on this element of the claim. We hold only that a public
figure plaintiff must plead the first five elements and offer prima facie proof on each of the
five elements to create a genuine issue of material fact requiring trial. In other words, a
public figure defamation plaintiff must only plead and prove facts with regard to elements
of the claim that are within his control.”).
32
Id. at 463.
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defamatory statements are expressions of fact or protected expressions of opinion; and
[second], whether the challenged statements are capable of a defamatory meaning.”33
To decide whether a statement is one of fact or opinion, the question is whether “the
ordinary reader could infer the existence of facts which are capable of being proved true or
false.”34 This inquiry is critical because “courts cannot, and should not, evaluate the
objective validity of an opinion. To do so violates First Amendment standards.” 35 Thus,
“political, cultural, and ideological critiques that accuse institutions or individuals of being
racist or bigoted are not actionable but are [protected] expressions of name calling and
rhetorical hyperbole.”36
Defendant argues that online media outlets such as chat rooms, Twitter, and
Facebook are informal outlets of personal opinion and not reliable sources of information.37
Defendant relies on Cahill, where the high court reversed the trial court in part based
on the platform for the speech—an internet blog expressly dedicated to “opinions” about
Smyrna—and concluding that “no reasonable person could have interpreted these
statements as being anything other than opinion.”38
33
Id. (citing Riley v. Moyed, 529 A.2d 248, 251 (Del. 1987)) (emphasis and brackets in
original).
34
Sunstar Ventures, LLC v. Tigani, 2009 WL 1231246, at *7 (Del. Super. Ct. Apr. 30,
2009).
35
Cousins v. Goodier, 2021 WL 3355471, at *2 (Del. Super. Ct. July 30, 2021).
36
Id. at *4.
37
Oral Arg. Tr. at 28:15–30:24.
38
Cahill, 884 A.2d at 467.
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Defendant also relies on SunEnergy1, LLC v. Brown, where the Delaware Superior
Court concluded that anonymous reviews on Glassdoor.com are informal outlets of
personal opinions and not reliable sources of information. The court in SunEnergy1
observed that Glassdoor “is a website for employment and company evaluation—it is not
a news website (e.g. WSJ.com or NYT.com) where there is an expectation of objective
reporting and journalistic standards.”39 Further, Glassdoor was not “a website where a
person would go to find detailed factual information about a company such as earnings
reports and SEC filings.”40
Although the court in SunEnergy1 held that reviews on Glassdoor fell in the opinion
column, it noted that “[s]ince the Cahill opinion in 2005, the internet has evolved
considerably.”41
That’s a dramatic understatement. Social media in the 2020s is a far cry from the
blogs, forums, and chatrooms of the mid-2000s. For better or worse, social media
platforms like Twitter, which did not even exist in 2005, are being used increasingly as a
news source and people expect that at least some of what they encounter on the site is
factual. For this proposition, Plaintiff cited a 2019 Pew Research Center study that found
55 percent of U.S. adults often or sometimes rely on social media for their news. 42 That
39
SunEnergy1, LLC v. Brown, 2015 WL 7776625, at *4 (Del. Super. Ct. Nov. 30, 2015).
40
Id.41
Id.42
Dkt. 196, Pl.’s Reply in Further Support of its Mot. for Ct. Authorization for Twitter,
Inc. to Comply with Subpoenas at 5–6 (citing Elizabeth Grieco and Elisa Shearer,
C.A. No. 2021-0244-KSJM
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statistic has remained consistent for Twitter in more recent studies conducted by Pew
Research Center in 2021.43 Other studies similarly show what is likely unsurprising to any
person walking down the street—that adults often obtain their news from a smartphone,
computer, or tablet.44
Even in the absence of such academic research, it is patently obvious that Twitter is
not remotely akin to the small-town blog at issue in Cahill or the comparatively limited-
purpose platform of Glassdoor. When billionaires like Elon Musk Tweet, the stock market
moves.45 The last three White House administrations have distributed official
communications through the President’s Twitter account.46 Because readers rely on social
media platforms for real-time news, those platforms have become battlegrounds for
Americans Are Wary of the Role Social Media Sites Play in Delivering News, PEW RES.
CTR. (Oct. 2, 2019), https://www.pewresearch.org/journalism/2019/10/02/americans-are-
wary-of-the-role-social-media-sites-play-in-delivering-the-news/.
43
See Mason Walker & Katerina Eva Matsa, News Consumption Across Social Media in
2021, PEW RES. CTR. (Sept. 20, 2021), https://www.pewresearch.org/journalism/2021/09/
20/news-consumption-across-social-media-in-2021/.
44
See Elisa Shearer, More than eight-in-ten Americans get news from digital devices, PEW
RES. CTR. (Jan. 12, 2021), https://www.pewresearch.org/fact-tank/2021/01/12/more-than-
eight-in-ten-americans-get-news-from-digital-devices/.
45
See Will Davies, Tesla Shares Slide as Musk Tweets on Lack of Hertz Contract,
BLOOMBERG (Nov. 1, 2021, 11:06 PM, updated Nov. 2, 2021, 4:20 PM), https://www.
bloomberg.com/news/articles/2021-11-02/musk-emphasizes-hertz-deal-not-signed-in-
tweet-on-tesla-chart.
46
See generally Barbara Ortutay, @POTUS Resets as Twitter Juggles Presidential
Accounts, U.S. NEWS & WORLD REPORT (Jan. 19, 2021, 7:42 PM), https://www.usnews
.com/news/business/articles/2021-01-19/potus-resets-as-twitter-juggles-presidential-
accounts.
C.A. No. 2021-0244-KSJM
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nefarious actors’ information wars.47 These information wars have, in turn, resulted in
Congress introducing bills to compel platforms to expand their account verification
practices.48 In today’s world, Tweets cannot be categorically pushed into the “opinion”
column for Cahill purposes.
With the understanding that statements on Twitter can constitute actionable
expressions of fact, I turn to the Tweets at issue. Some fall under the category of opinion,
such as those that generally accuse Plaintiff and its CEO of racism.49 Others, however, are
more concrete, such as those that accuse the CEO of having an affair, sending inappropriate
sexual pictures to staffers, and refusing to offer transgendered employees healthcare
benefits.50 These statements are susceptible of proof; either they occurred, or they did not.
Thus, they are actionable statements of fact, and Plaintiff satisfied the summary judgment
47
See Gabby Deutch, Social Media Has Become a Global Battlefield, THE ATLANTIC (Oct.
2, 2018), https://www.theatlantic.com/international/archive/2018/10/social-media-battle
field-internet/571960/. See also Craig Timberg & Cristiano Lima, Today’s Taliban uses
sophisticated social media practices that rarely violate the rules, THE WASHINGTON POST
(Aug. 18, 2021, 9:00 AM), https://www.washingtonpost.com/technology/2021/08/18
/taliban-social-media-success/.
48
See Anita Joseph & Michele Paselli, Verifying the Identity of People Behind High-Reach
Profiles, META (May 28, 2020), https://about.fb.com/news/2020/05/id-verification-high-
reach-profiles/; Social Media Accountability and Account Verification Act, H.R. 6586,
116th Cong. (2020); Social Media Accountability and Account Verification Act, H.R.
4653, 117th Cong. (2021).
49
See Andrade Decl. Ex. 3.
50
See Andrade Decl. Exs. 3, 4, 5.
C.A. No. 2021-0244-KSJM
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standard as to the first element of its defamation claim in addition to the remaining
elements.51
For the above reasons, I granted the Plaintiff’s Motion for Court Authorization for
Twitter, Inc. to Comply with Subpoenas.
Sincerely,
/s/ Kathaleen St. Jude McCormick
Kathaleen St. Jude McCormick
Chancellor
cc: All counsel of record (by File & ServeXpress)
51
It does not matter whether Plaintiff is a public figure on this procedural posture, which
would add the fifth element, falsity, as it has denied the truth of the statements time and
again.