Photo: Yahoo Finance/National Geographic/edited by autoevolution
In the legal litigation world, there are some measures taken only to gain time. This seems to be exactly what Elon Musk’s lawyers tried to do when they asked a federal court in San Francisco to move the securities fraud trial he would face there to Texas. The argument was that a jury based in California would be biased against the executive.
The judgment is based on Musk’s tweets about taking Tesla private with funding secured and paying $420 per share in 2018. The CEO was sued by the U.S. Securities and Exchange Commission (SEC) and also by shareholders. With the SEC, Musk struck a settlement agreement that he is now trying to terminate. The shareholders' lawsuit still stands.
Arguing that the “media reports are character assassinations” against his client, Alex Spiro argued that a juror questionnaire revealed that 80% of them had a negative impression of Musk. Only a trial in Texas – where the Tesla CEO currently lives – would ensure a fair result. Spiro focused on the purchase of Twitter as the reason for Californians to be mad at Musk, but there is a lot more to paint the CEO in a bad light.
Tesla is facing several lawsuits for allowing racism and sexual harassment on its premises, especially at the Fremont plant. The California Department of Fair Employment and Housing (DFEH) is also suing the EV maker for that. Tesla recently tried to dismiss this lawsuit. When that failed, it countersued to avoid the trial. It also did not work, which only adds to the recent legal losses Tesla and its CEO have faced.
When it comes to the security fraud trial in California, District Court Judge Edward M. Chen’s predictably denied the request to move the security fraud trial to Texas. Just think about it: which judge would ever agree that their court could not provide a just trial to anyone?
Chen’s answer was that he was confident an impartial jury could be selected and that Musk still had “a lot of fans” in the Bay Area. Another reason for him to deny the move is that the lawsuit was proposed when Tesla was still headquartered in California, so it has no connection to Texas. In April 2022, the same judge ruled that Musk acted with scienter, meaning he knew the “funding secured” bit of his infamous tweet was false.
The shareholder’s lawyers did not lose the opportunity to mock Musk’s attorneys’ request. According to their answer to that petition, “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.” Again, it was so obvious the request would be denied that the best explanation for it was postponing the trial. We’re yet to understand how that could be helpful, but the verdict may answer that.
Arguing that the “media reports are character assassinations” against his client, Alex Spiro argued that a juror questionnaire revealed that 80% of them had a negative impression of Musk. Only a trial in Texas – where the Tesla CEO currently lives – would ensure a fair result. Spiro focused on the purchase of Twitter as the reason for Californians to be mad at Musk, but there is a lot more to paint the CEO in a bad light.
Tesla is facing several lawsuits for allowing racism and sexual harassment on its premises, especially at the Fremont plant. The California Department of Fair Employment and Housing (DFEH) is also suing the EV maker for that. Tesla recently tried to dismiss this lawsuit. When that failed, it countersued to avoid the trial. It also did not work, which only adds to the recent legal losses Tesla and its CEO have faced.
When it comes to the security fraud trial in California, District Court Judge Edward M. Chen’s predictably denied the request to move the security fraud trial to Texas. Just think about it: which judge would ever agree that their court could not provide a just trial to anyone?
Chen’s answer was that he was confident an impartial jury could be selected and that Musk still had “a lot of fans” in the Bay Area. Another reason for him to deny the move is that the lawsuit was proposed when Tesla was still headquartered in California, so it has no connection to Texas. In April 2022, the same judge ruled that Musk acted with scienter, meaning he knew the “funding secured” bit of his infamous tweet was false.
The shareholder’s lawyers did not lose the opportunity to mock Musk’s attorneys’ request. According to their answer to that petition, “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.” Again, it was so obvious the request would be denied that the best explanation for it was postponing the trial. We’re yet to understand how that could be helpful, but the verdict may answer that.
Am considering taking Tesla private at $420. Funding secured.
— Elon Musk (@elonmusk) August 7, 2018
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