`BREX INC.,
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`Plaintiff / Counterclaim
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`Defendant,
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`v.
`DIZHE SU,
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`Defendant / Counterclaim
`Plaintiff.
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`C.A. No.: 2022-0758-MTZ
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`PLAINTIFF BREX INC.’S OPPOSITION TO DEFENDANT DIZHE SU’S
`FIRST MOTION TO COMPEL
`Plaintiff/Counterclaim-Defendant Brex Inc. (“Brex”), by and through its
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`undersigned counsel, respond to the motion to compel (the “Motion”) filed by
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`Defendant/Counterclaim-Plaintiff Dizhe Su (“Su”) on November 1, 2023.
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`INTRODUCTION
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`The facts of this case are straightforward and undisputed. During the due
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`diligence period leading up to a merger between Brex and Su’s company Pry
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`Financials, Inc. (“Pry”), Su made multiple misrepresentations that neither he nor Pry
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`were parties to litigation. (See Su’s Answer ¶ 9 (“Defendant admits that Pry did not
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`disclose the Beowawie Litigation in written diligence responses.”); see also Su’s
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`Answer ¶ 11 (“Defendant admits that . . . he did not inform Brex that he and Pry
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`were parties to the Beowawie Litigation prior to execution” of the Merger
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`Agreement)). Unbeknownst to Brex, Su and Pry were defendants in a fraud lawsuit,
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`PUBLIC VERSION FILED -
`DECEMBER 6, 2023
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`EFiled: Dec 06 2023 03:42PM EST
`Transaction ID 71561442
`Case No. 2022-0758-MTZ
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`to which Brex was subsequently named as a defendant following Brex’s merger with
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`Pry.1 (Su’s Answer ¶ 12). After Brex was added as a defendant to the fraud lawsuit,
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`Su finally “apologized for the nondisclosure.” (Su’s Answer ¶ 15). Based on Su’s
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`misrepresentations to Brex, Brex’s Board terminated his employment for “Cause,”
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`which is defined to include the commission of “theft, fraud, a breach of trust, or any
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`material act of dishonesty” or “engaging in other misconduct which materially
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`impairs the performance of such [employee’s] duties,” among other things. (Motion
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`Exhibit 1 § 2.8(e)).
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`Despite the facts of this case being undisputed, Brex has already agreed to
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`review over 37,000 documents from 22 search terms for relevant documents.
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`(Motion Exhibit 12 at 3). Inexplicably, Su’s Motion hyperbolically accuses Brex of
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`engaging in “bad faith” based on a flurry of misleading statements about Brex’s
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`search for relevant documentation. (Motion at 3). For example, Su asserts that Brex
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`has “refuse[d] to collect ESI from any of its Board members.” (Motion at 3). But
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`Brex has collected ESI from its board members in the form of communications
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`between Brex’s employees and Brex’s Board. (Motion Exhibit 12 at 2 (informing
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`1 Su misleadingly suggests that Brex was aware that Su and/or Pry were
`defendants in the fraud litigation prior to the merger. (Motion at 7). That is
`inaccurate. Brex was not aware that Su or Pry were defendants in the fraud litigation
`until after Brex was added as a defendant to the litigation post-merger.
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`2
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`Su that Brex would be searching across the entire company)). Similarly unfounded,
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`Su claims that Brex has not provided a “compliant” hit report, but Brex has provided
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`the number of hits for each search Su asked to be run. (Motion Exhibit 12 at 3).
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`While the hit report noted there were some terms that resulted in errors (such as a
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`39+ element search), Brex asked Su to break up these terms or reformat them so that
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`there would be no errors. (See Exhibit A (“Email from M. Turbenson dated Nov.
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`15, 2023”) at 3).
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`The Court should deny Su’s Motion as it is devoid of factual or legal support.
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`BREX’S DISCOVERY EFFORTS
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`Contrary to Su’s claims, Brex has provided significant information and
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`documents based on Su’s discovery requests. Brex has searched over 37,000
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`documents that were located by running searches for 22 search terms. Specifically,
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`Brex collected email communications for all Brex email accounts for the following
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`terms: (1) “Beowawie,” (2) “inDinero,” (3) “Dizhe,” (4) “Mah,” (5) “Thirty
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`AROUND million,” (6) “(Andy OR Su OR Pry) AROUND (For AROUND cause),”
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`(7) “(Andy OR Su OR Pry) AND (Loss AROUND trust),” (8) “21STCV04269,”
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`(9) “Angeles AROUND Court,” (10) “Beaudet,” (11) “Department AROUND 50,”
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`(12) “Ten AROUND million,” and (13) “huge loss of trust.” Brex further has
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`collected and reviewed communications (emails and alternative means of
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`communication, such as Slack) and documents stored on Google Drive for the
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`following custodians: former employee Ryan Marsh, former employee Patrick
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`Ekeruo, Art Levy, Adam Lesman, and Cosmin Nicolaescu): (14) “Andy,”
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`(15) “Defendant,” (16) “Court,” (17) “Lawsuit,” (18) “Litigation,” (19) “Disclose,”
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`(20) “Termin*,” (21) “Fire,” and (22) “For AROUND cause.”2 (Motion Exhibit 12
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`at 3).
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`On August 23, 2023, Brex made its first production of 712 documents
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`(BREX_000001–BREX_017296). On November 2, 2023, Brex made its second
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`production of 668 documents (BREX_017297–BREX_023578). Brex has further
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`provided hit counts for broken-out search terms for a 39+ element search term:
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`“(Andy OR Su OR Pry) /30 (cause OR breach OR invest! OR talk! OR ask! OR disc!
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`OR fir! OR term! OR resig! OR merg! OR stock OR cash OR trust OR fraud OR lie!
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`OR non! OR indem! OR consid! OR interv! OR loss OR law! OR case OR part! OR
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`sue! OR litig! OR defen! OR answ! OR motion OR demur OR million OR
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`consideration OR equity OR stock OR vest! OR leave),” which has resulted in over
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`657,561 hits. (See Exhibit A).3 Further, as mentioned in the Motion, Brex has
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`2 Google Vault has various best practices for searching, including the use of
`specific search operators. See, e.g., Use Operators to Refine a Search in Vault,
`Google Vault Help, https://support.google.com/vault/answer/2474474?hl=en (last
`accessed Nov. 29, 2023).
`3 These terms are not the subject of Su’s Motion and are disclosed to the Court
`to counter any suggestion that Brex is engaging in “bad faith.” Brex and Su are
`currently discussing which of those terms/hits Brex will review.
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`4
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`searched for and produced relevant text messages from employees Art Levy, Cosmin
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`Nicolaescu, and Adam Lesman. Finally, Brex has responded to 82 interrogatories
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`served by Su.
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`On October 23, 2023—prior to Su filing this Motion—Brex agreed to
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`supplement its interrogatory responses to list documents and communications made
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`during Brex’s investigation into Su, as well as the documents and communications
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`relied upon by Brex’s Board in terminating Su’s employment. (See Exhibit B
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`(“Email from B. Alleman dated October 23, 2023”); Exhibit C (“Amended Second
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`Set of Interrogatories”) at 15–21). Brex served the agreed-upon supplemental
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`interrogatory responses on November 8, 2023. (Exhibit C).
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`ARGUMENT
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`I.
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`Brex Has Searched Documents and Communications It Has Control
`Over With Regard to Board Communications
`Under Chancery Court Rule 34(a), a party is only required to search for and
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`produce documents that are in the party’s “possession, custody or control.” See
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`Fitzgerald v. Cantor, No. 16297-NC, 1998 WL 842278, at *1 (Del. Ch. Nov. 16,
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`1998) (“No Court can compel a litigant to produce documents it does not have.”).
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`Here, Su misleadingly states that Brex has not searched for communications
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`with Brex’s Board. This argument is inaccurate for at least four reasons. First, as
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`Brex has previously indicated to Su, Brex’s companywide searches capture all
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`5
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`communications for individuals with a Brex.com email address. (Motion Exhibit 14
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`at 4 (“Brex has agreed to collect documents for the following terms across all
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`company emails (which, for clarity, include the ‘@brex.com’ email domain)”)).
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`Among the six board members who decided to unanimously terminate Su’s
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`employment for “Cause,” two board members (Co-Founder Henrique Dubugras and
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`Co-CEO Pedro Franceschi) have @brex.com email accounts and, thus, their
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`communications have been collected and searched. The remaining board members
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`who participated (Meyer Malka, Anu Hariharan, Victor Lazarte, and Thasunda
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`Brown Duckett) do not have @brex.com email accounts. Instead, communications
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`with those board members are sent to their respective companies’ emails. For
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`example, Ms. Brown Duckett is employed by TIAA and communications are sent to
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`her TIAA email account. Similarly, communications to Mr. Lazarte are sent to his
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`Wildlife Studios email account; communications to Ms. Hariharan were sent through
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`her Y Combinator email account4; and communications to Mr. Malka are sent to his
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`Ribbit Capital email account. Brex does not have possession, custody, or control of
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`entities like TIAA or the other entities and, thus, has no ability to search those
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`accounts.
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`4 Ms. Hariharan concluded her service on Brex’s board on March 23, 2023.
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`Second, Brex oftentimes sends communications to its Board by carbon
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`copying “board-comms@brex.com.” Those emails have been collected and
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`reviewed under Brex’s companywide searches.
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`Third, Brex has collected and searched communications sent from Brex
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`employees to Brex’s Board. (Motion Exhibit 14 at 4–5). Brex agreed to perform
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`expanded searches on the individuals generally involved in the investigation of Su—
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`Adam Lesman, Patrick Ekeruo, Art Levy, Cosmin Nicolaescu, and Ryan Marsh.
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`(Motion Exhibit 14 at 4–5). To the extent any of these individuals involved in the
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`investigation sent a communication to the Brex Board, that communication was
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`searched and reviewed. Brex has also detailed the information and documents that
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`were presented to Brex’s Board. (Exhibit C at 21–22). Thus, while Brex is unable to
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`search the specific email accounts of four current or former members of Brex’s
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`Board, it has been able to review the communications with Brex’s Board and anyone
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`with a @brex.com email account (including two members of the Brex Board).
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`Furthermore, despite the foregoing, the basis for the Board’s decision is
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`known and undisputed. Su lied to Brex prior to the consummation of the merger with
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`Pry and did not disclose the litigation even after the merger was consummated until
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`he was questioned by Brex. (Exhibit D (“Action by Unanimous Written Consent of
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`the Board of Directors”)). During conferrals, Su’s counsel stated that the reason for
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`their demands regarding the Brex Board was based on an unpled conspiracy theory
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`7
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`that “Brex’s Board hatched a plot premised on a prediction that Mr. Su would lie on
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`multiple occasions.” (Motion Exhibit 14 at 7). Farfetched and unpled conspiracy
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`theories depending on a suggestion that Brex’s Board predicted Su would lie are no
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`basis for demanding burdensome, duplicative discovery.
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`II. Brex Has Disclosed the Information Considered by the Board, and Su’s
`Request Otherwise Seeks Privileged Communications.
`“A client has a privilege to refuse to disclose and to prevent any other person
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`from disclosing confidential communications made for the purpose of facilitating
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`the rendition of professional legal services to the client . . . between the client or the
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`client’s representative and the client’s lawyer or the lawyer’s representative.” Del.
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`R. Evid. 502(b). A party “can rely on the privilege to prevent discovery of any
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`communications with its legal counsel, such as its counsel’s presentation at the board
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`of directors’ meeting . . . .” Cincinnati Bell Cellular Sys. Co. v. Ameritech Mobile
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`Phone Serv., No. 13389, 1995 WL 347799, at *2 (Del. Ch. May 17, 1995).
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`Here, Brex’s former in-house attorneys Ryan Marsh and Patrick Ekeruo led
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`an oral presentation to Brex’s Board alongside outside counsel Alex Kaufman.
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`(Exhibit C at 21–22). Prior to Su filing the Motion, Brex agreed to provide all
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`“factual information communicated during this presentation.” (Exhibit B; Exhibit C
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`at 21–22). Brex has described the facts presented to the Board, including:
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`Su did not disclose his or Pry Financials, Inc.’s involvement in the
`case captioned 290 Beowawie LLC v. InDinero, No. 21STCV04269
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`(Los Angeles Super. Ct.) during due diligence leading up to the Brex-
`Pry merger;
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`Brex merged with Pry Financials, Inc. without knowledge that either
`Mr. Su or Pry Financials, Inc. were parties to the 290 Beowawie case;
`and
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`Brex was sued as part of the 290 Beowawie case after the Brex-Pry
`merger.
`(Exhibit C at 22). To the extent Su claims to still be seeking this information, the
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`request is moot, and when Su filed the Motion, he knew that Brex had agreed to
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`supplement its Interrogatory Response with this information. (Exhibit B).
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`To the extent that Su seeks the specific communications or descriptions of the
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`communications made to the Board, those communications are privileged. Brex will
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`serve a privilege log for privileged written communications by the Court’s deadline
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`of January 10, 2024. Any request for the Court to determine privilege prior to either
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`party exchanging a privilege log is premature.
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`III. Brex Has Disclosed the Text Messages that Are Relevant to this Action.
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`Su’s argument regarding imaging cellphones presents a demand in need of a
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`dispute. As Su notes, Brex has reviewed and disclosed text messages that are relevant
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`to this action, including text messages from Art Levy and Cosmin Nicolaescu. (See
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`Motion Exhibit 15 (Levy text messages); Motion Exhibit 14 at 6 (Nicolaescu text
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`message)). There are few text messages because Brex’s practice was not to conduct
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`business (or something as sensitive as the investigation into Su) over a personal
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`cellphone. (Motion Exhibit 14 at 5–6). The exception to this practice occurred
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`specifically with communications with Su because either he: (1) did not yet have a
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`Brex email account around the time of the merger on March 17, 2022; or (2) was on
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`an extended leave of absence from April 2022 through the date of the termination of
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`his employment on August 2, 2022, during which he was generally not reachable via
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`his Brex email.
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`Su demanded Brex collect text messages of five individuals: Ryan Marsh, Art
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`Levy, Cosmin Nicolaescu, Adam Lesman, and Patrick Ekeruo. Ryan Marsh and
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`Patrick Ekeruo are former employees and, thus, Brex is unable to search their
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`cellphones at this time.5 However, Brex has produced text messages of Art Levy and
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`Cosmin Nicolaescu, and has searched for responsive text messages from Adam
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`Lesman. Su does not contend that the text messages produced by Brex are
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`unreadable and offers no other reason that Brex would need to image the personal
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`cellphones of its employees. The only conceivable basis for Su’s request to image
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`5 Su’s Motion attaches text messages of Don Slater and Wilson Jian (who
`became a Brex employee after the Pry merger). (Motion Exhibits 17, 18). Su has
`never asked Brex to search for text messages involving Slater or Jian, as neither
`employee was involved in the investigation into Su. To the extent Su is now
`demanding that Brex image all of its employees’ phones, that request is entirely
`overbroad and unwarranted. Su’s text messages with Levy and James Reggio are not
`related to any fact at-issue in this action. (Motion Exhibit 16).
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`the phones of Levy or Nicolaescu is to cause undue disruption and increase discovery
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`burdens and costs on Brex.
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`Because Brex has searched for and produced text messages from Art Levy,
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`Cosmin Nicolaescu, and Adam Lesman, the Court should deny Su’s demand that
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`Brex image their personal cell phones.
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`IV. Contrary to Su’s Contention, Brex Has Provided a Hit Report
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`Su states that Brex “refuses to provide a hit report.” (Motion at 13). That
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`statement is misleading. Brex has provided a list of demanded search terms with the
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`number of documents hit based on the sources and custodians searched. (Motion
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`Exhibit 12). That list is by definition a “hit report.” See, e.g., Alight Sols. v.
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`Thomason, No. 20 C 3043, 2021 WL 5119111, at *5 (N.D. Ill. Nov. 3, 2021)
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`(remarking a “hit report” details “the ‘hits’ each search term uncovered”). Su argues
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`that this is not a hit report because it does not include information like “the number
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`of hits with families.” (Motion at 13). But Su does not cite any authority for his
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`argument that a hit report must include detailed statistical information beyond the
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`number of hits to be “Delaware-compliant.” Brex has not refused to review
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`documents responsive to any search term based on merely the number of documents
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`that would be collected when families are searched. Moreover, including such
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`information would only increase the number of documents to be searched, so it
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`makes little sense why Su seeks the additional information.
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`Su next represents that Brex has moved “forward primarily with its self-
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`selected search terms.” (Motion at 13). This is, again, misleading. Brex has collected
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`documents for 22 search terms proposed by Su. As Brex has explained, terms like
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`“Department” resulted in numerous mis-hits for the 5,743 documents, resulting in
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`“thousands of documents about the departments in Brex or in other companies.”
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`(Motion Exhibit 14 at 8 n.5). Brex has not refused to run any search terms. Brex ran
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`the two length search strings and encountered an error. Su does not move to compel
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`Brex to search any specific terms.
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`Finally, Su suggests that Brex cannot run terms using Google Vault and,
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`instead, must hire a third-party vendor, but Su does not seek any relief based on this
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`argument. (Motion at 14). As emphasized in Section 7(b)(i) of the “Guidelines to
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`Help Lawyers Practice in the court of Chancery,” there is no “‘one-size-fits-all’
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`approach to the collection and review of documents.” Su does not cite any authority
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`suggesting that Google Vault cannot be used to perform searches for responsive
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`documents, particularly where undersigned counsel is performing the review of the
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`collected documents.
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`V. The Court Should Not Award Fees or Costs
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`Only if a motion to compel is granted in its entirety is the Court required to
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`award fees unless “opposition to the motion was substantially justified or that other
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`circumstances make an award of expenses unjust.” Del. Ch. Ct. R. 37(a)(4)(A).
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`Where a party does not prevail on the majority of a motion to compel, a request for
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`fees should be denied. See Brown v. Matterport, Inc., No. 2021-0595-LWW, 2023
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`WL 3830501, at *7 n.60 (Del. Ch. June 5, 2023) (citing Summit Fire & Sec. LLC v.
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`Kolias, No. 2022-0460-MTZ, 2022 WL 3572827, at *4 (Del. Ch. Aug. 19, 2022)).
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`Here, Su’s request for fees should be denied for at least two reasons. First, Su
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`is unlikely to prevail on any aspect of his Motion. Each request is either improper
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`or—in the case of disclosing facts communicated to Brex’s Board—moot. Before
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`Su filed his Motion, Brex agreed to provide such information and then provided such
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`information within the time promised. (Exhibits B, C).
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`Brex’s opposition is also substantially justified. While Su states that his
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`position is based on “clear Delaware law and Guidelines,” he notably does not cite
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`any such law or the Guidelines to support his position about what is allegedly
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`required to be included in a hit report. His Motion is also based on hyperbole that iss
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`entirely unsupported by the evidence attached to the Motion.
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`CONCLUSION
`For the foregoing reasons, the Court should deny Su’s Motion to Compel.
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`Dated: November 29, 2023
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`OF COUNSEL:
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`Craig Solomon Ganz
`Mitchell Turbenson
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`BALLARD SPAHR LLP
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`/s/ Elizabeth S. Fenton
`Elizabeth S. Fenton (#5563)
`Brittany M. Giusini (# 6034)
`R. Michael Lindsey (#2711)
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`BALLARD SPAHR, LLP
`1 East Washington Street, Suite 2300
`Phoenix, AZ 85004-2555
`Tel.: 602.798.5400
`Fax: 602.798.5595
`Email: ganzc@ballardspahr.com
` turbensonm@ballardspahr.com
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`919 N. Market Street, 11th Floor
`Wilmington, DE 19801-3034
`Tel.: (302) 252-4465
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`Attorneys for Plaintiff / Counterclaim
`Defendant Brex Inc.
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`WORDS: 2,981
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`CERTIFICATE OF SERVICE
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`I hereby certify that on December 6, 2023, I caused a true and correct copy
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`of the foregoing Public Version of Plaintiff Brex Inc.’s Opposition to Defendant
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`Dizhe Su’s First Motion to Compel to be served by File & ServeXpress
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` upon the following counsel of record:
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`Sean Meluney, Esquire
`William M. Alleman Jr., Esquire
`MELUNEY ALLEMAN & SPENCE LLC
`1143 Savannah Rd, Suite 3-A
`Lewes, Delaware 19958
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`Attorneys for Defendant/Counterclaim Plaintiff
`Dizhe Su
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`/s/ Elizabeth S. Fenton
`Elizabeth S. Fenton (No. 5563)
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