Willilam J. Brown v. Matterport, Inc.

CourtCourt of Chancery of Delaware
DecidedJune 5, 2023
Docket2021-0595
StatusPublished

This text of Willilam J. Brown v. Matterport, Inc. (Willilam J. Brown v. Matterport, Inc.) is published on Counsel Stack Legal Research, covering Court of Chancery of Delaware primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Willilam J. Brown v. Matterport, Inc., (Del. Ct. App. 2023).

Opinion

COURT OF CHANCERY OF THE STATE OF DELAWARE LORI W. WILL LEONARD L. WILLIAMS JUSTICE CENTER VICE CHANCELLOR 500 N. KING STREET, SUITE 11400 WILMINGTON, DELAWARE 19801-3734

June 5, 2023

Joseph L. Christensen, Esquire Robert L. Burns, Esquire Christensen & Dougherty LLP Daniel E. Kaprow, Esquire 1000 N. West Street, Suite 1200 Kyle H. Lachmund, Esquire Wilmington, DE 19801 Richards, Layton & Finger P.A. 920 North King Street Wilmington, DE 19801

RE: William J. Brown v. Matterport, Inc., et al. C.A. No. 2021-0595-LWW

Dear Counsel,

I write regarding the three discovery motions pending before me. The plaintiff

filed two motions to compel,1 and the defendants filed a motion for a protective order

and relief from the court’s scheduling order.2

Oral argument is unnecessary. I am familiar with the state of discovery in this

action, having ruled on several previously filed motions. After reviewing the present

motions and the dozens of accompanying exhibits, I conclude that the defendants’

1 Pl.’s Mot. to Compel Interrog. Resps. (Dkt. 217) (“Pl.’s MTC Interrogs.”); William J. Brown’s Mot. to Compel (Dkt. 218) (“Pl.’s MTC Docs.”). Brown has also filed a motion seeking sanctions for alleged spoliation, which will be addressed separately. See William J. Brown’s Mot. to Compel, Mot. for Spoliation Sanctions, and Mot. for Adverse Inferences (Dkt. 227). 2 Defs.’ Mot. for Protective Order and Relief from Scheduling Order (Dkt. 212) (“Defs.’ Mot. Protective Order”). C.A. No. 2021-0595-LWW June 5, 2023 Page 2

motion should be granted and the plaintiff’s motions should be denied (with limited

exceptions described below).

I. BACKGROUND

Plaintiff William J. Brown brings this action against defendants

Matterport, Inc. (formerly known as Gores Holdings VI, Inc.), Matterport

Operating, LLC (“Legacy Matterport” and with Matterport, Inc., the “Matterport

Defendants”) and four former directors of Legacy Matterport (the “Director

Defendants”).3 The factual background of this bifurcated proceeding is outlined in

my Memorandum Opinion following the phase one trial.4 The five-day, phase two

trial scheduled for November will take up Brown’s breach of fiduciary duty claims,

among others. Generally speaking, Brown alleges that the defendants improperly

prevented him from selling his Matterport shares through lockup restrictions.

Phase two discovery began last fall. Earlier this year, I resolved several

motions that focused on discovery the defendants sought from Brown and certain

3 See Pl.’s Verified Third Am. Compl. (Dkt. 140) (“Compl.”). 4 Post-Trial Mem. Op. Regarding Count I (Dkt. 122); Brown v. Matterport, Inc., 2022 WL 89568, at *2 (Del. Ch. Jan. 10, 2022), aff’d, 282 A.3d 1053 (Del. 2022) (TABLE). C.A. No. 2021-0595-LWW June 5, 2023 Page 3

non-parties.5 Now, the parties have filed motions concerning the discovery Brown

served on the defendants.

II. ANALYSIS

Court of Chancery Rule 26(b) provides that “[p]arties may obtain discovery

regarding any non-privileged matter that is relevant to any party’s claim or defense

and proportional to the needs of the case.”6 Although the scope of discovery is

broad, it is not limitless. This court “may exercise its sound discretion in delineating

the appropriate scope of discovery.”7

These principles guide my review of the motions to compel filed by Brown:

one concerning interrogatory responses and the other concerning document

discovery. The former seeks an order requiring various defendants to respond to

certain interrogatories “in full.”8 The latter seeks an order requiring the defendants

to apply certain search terms and collect data from two sources.9

5 See Dkts. 194-97; Tr. of Feb. 10, 2023 Oral Arg. and Rulings (Dkt. 202) at 45-56 (granting defendants’ motion to compel, denying Brown’s motion to quash, and denying Brown’s motion in limine). 6 Ct. Ch. R. 26(b)(1). 7 In re Tyson Foods, Inc., 2007 WL 2685011, at *3 (Del. Ch. Sept. 11, 2007). 8 Proposed Order Granting Pl.’s Mot. to Compel Interrogs. (Dkt. 217) ¶¶ 2-8 (“Proposed Order”). 9 Pl.’s MTC Docs. 13. C.A. No. 2021-0595-LWW June 5, 2023 Page 4

Separately, the defendants filed a motion for a protective order and relief from

the scheduling order entered in this case.10 Brown insists that the defendants’

witnesses sit for depositions now—despite escalating discovery disputes—and

reserves the right to recall those witnesses later. The defendants have not opposed

Brown’s requests for depositions. They ask that the court preclude the depositions

from going forward until written discovery is complete. To accommodate this, the

defendants request a continuation of the trial date and all interim deadlines.11

I address each motion in turn.
A. Interrogatories

In his Motion to Compel Interrogatory Responses, Brown contends that the

defendants’ interrogatory responses are inadequate, incomplete, or fail to comply

with Court of Chancery Rule 33(d).12 The parties have attempted to address the 18

interrogatory responses at issue by category. For each grouping, I agree with the

defendants that their responses are appropriate.

10 Defs.’ Mot. Protective Order ¶ 5. 11 Under the operative scheduling order, fact discovery ends on June 15, 2023 and trial begins on November 13, 2023. Dkt. 175. 12 Proposed Order ¶¶ 2-8; see generally Pl.’s MTC Interrogs. C.A. No. 2021-0595-LWW June 5, 2023 Page 5

First, Brown argues that the defendants failed to provide detailed descriptions

of oral communications.13 For example, Interrogatory 40 asks the Matterport

Defendants to “describe communications . . . relating to Brown’s shares,” and

Interrogatory 46 asks “the Director Defendants to identify all reports, information,

statements, and records presented to Matterport by any officer, director or advisor,

as the Director Defendants referenced in their Fourth Affirmative Defense.” 14 In

response, the defendants identified certain communications between Matterport and

its transfer agent or advice relied upon by the Director Defendants.15 The defendants

did not elaborate on the substance of the communications or the advice.

Additionally, Brown seeks supplemental responses to contention

interrogatories about disputed legal issues,16 and the redefinition of a term in Legacy

Matterport’s charter.17 In Interrogatories 36 to 39, for example, Brown asks the

13 Pl.’s MTC Interrogs. ¶¶ 2-4. 14 Id. ¶ 2. 15 Id. ¶¶ 2-4; Defs.’ Opp’n to Pl.’s Mot. to Compel Interrog. Resps. and Mot. to Compel and Reply in Further Supp. of Defs.’ Mot. for Protective Order and Relief from Scheduling Order (“Defs.’ Opp’n to Pl.’s MTCs”) ¶¶ 11-14. 16 Pl.’s MTC Interrogs. ¶¶ 5-9; Defs.’ Opp’n to Pl.’s MTCs ¶¶ 15-20. This category includes Interrogatories 36-39, 54, 64-67, and 74 to the Matterport Defendants, and Interrogatory 52 to the Director Defendants. 17 Pl.’s MTC Interrogs. ¶ 6; Defs.’ Opp’n to Pl.’s MTCs ¶¶ 21-23. This category includes Interrogatory 43 to the Matterport Defendants and Interrogatory 34 to the Director Defendants. C.A. No. 2021-0595-LWW June 5, 2023 Page 6

Matterport Defendants for information about Matterport’s contention that it was not

required to register the transfer of Brown’s Matterport shares and its contention

about alleged liability to Brown due to the delay in registering the transfer.18 Brown

avers that the defendants have “refused to provide responses.”19 But the Matterport

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Bluebook (online)
Willilam J. Brown v. Matterport, Inc., Counsel Stack Legal Research, https://law.counselstack.com/opinion/willilam-j-brown-v-matterport-inc-delch-2023.