Shareholders suing Tesla CEO Elon Musk over a deceptive tweet have asked a federal court to reject Musk’s request to relocate the trial from California to Texas. Musk claims that possible jurors in the federal court in San Francisco, where the case has been pending for four years, would treat him unjustly.
However, in a filing made this past Wednesday, Tesla shareholders’ attorneys argued there are no legal grounds to move the upcoming trial, which centers on a tweet from August 7, 2018, in which Musk indicated he had lined up financing for a Tesla buyout, a deal that ultimately did not materialize and resulted in a $40 million settlement with U.S. securities regulators. The attorneys also claimed that Musk is solely to blame for any unfavorable public opinion of him, citing his prolific use of Twitter (which he now owns and controls) as evidence.
“For better or worse, Musk is a celebrity who garners attention from the media around the globe,” The shareholder attorneys’ 19-page rebuttal to the transfer proposal was written in contradiction to the shareholders’ wishes. “His footprint on Twitter alone is partially to blame for that. If ‘negative’ attention was all that was required to disqualify a jury pool, Musk would effectively be untriable before a jury given his knack for attracting ‘negative’ coverage.”
A week and a half before to this filing, Musk’s attorney Alex Spiro urged U.S. District Judge Edward Chen to shift the lawsuit to Texas, where Musk relocated Tesla’s headquarters in 2021 after almost 20 years in Silicon Valley. Spiro wants to postpone the start of jury selection, which is set to begin on Tuesday if the trial isn’t moved.
Lawyers for the shareholders pointed out that when their case was initially filed in 2018, Tesla was still located in Palo Alto, California, and a federal court in Texas would never have authorized them to sue over Musk’s buyout tweet. In addition, numerous former California-based Tesla executives are on the list of witnesses, and they would be unduly inconvenienced by a trial relocation to Texas.
Friday is the day that Judge Chen has set aside to hear more arguments about Musk’s request to relocate or postpone the trial. After finding that Musk’s buyout statement was untrue, the case now goes to a jury to evaluate whether or not his tweet was irresponsible and whether or not it caused financial loss to Tesla shareholders. If your account for two stock splits that have occurred since 2018, the value of a Tesla share is approximately six times what it was when Musk tweeted about the fake buyout.
Spiro feels Musk’s reputation has been severely damaged by unfavorable media coverage in the San Francisco Bay Area since Musk finalized his $44 billion purchase of Twitter in October. Since then, Musk has alienated the service’s users by implementing rules that opponents say have removed the service’s guardrails against disinformation and vile material, and he has laid off or pushed away more than half of Twitter’s personnel.
Spiro claims that potential jurors are more likely to be biased against Musk because of the criticism of his activities, which he has defended as measures to reduce Twitter’s losses and maintain free-speech rights. Spiro said that jurors from the San Francisco Bay Area would be biased against Twitter since they themselves or someone they know may have been laid off after Musk’s purchase.
To counter this, the shareholders’ counsel pointed to the nearly 200 completed juror questionnaires submitted to Chen. Attorneys claim that just two or three of the prospective jurors admitted knowing anyone who worked at Twitter.
To avoid having the trial moved from California to Texas, the shareholders suing Tesla CEO Elon Musk over a misleading tweet have urged a federal judge to deny Musk’s request.
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