Owen Diaz worked for Tesla as a contract worker from June 2015 until May 2016. In 2017, he decided to sue the company for facing racism on its premises. The first result was out in October 2021, and it granted Diaz $136.9 million. Tesla appealed and reduced that to $15 million, but Diaz rejected it and decided to face the EV maker in another jury trial. On April 3, the second trial verdict emerged. Tesla will have to pay a bit less than $3.2 million.
That includes $175,000 for economic losses and $3 million in punitive damages. That’s just a fraction of the original amount Diaz was entitled to receive. More precisely, it is 2.3% of the $136.9 million he was granted in October 2021. Anyone curious about how the story ended like this should know the explanation may rest on a name: Alex Spiro.
This attorney is the same one who managed to convince a jury that Elon Musk did not defame Vernon Unsworth when he called him a “pedo guy.” The British diver was crucial in saving 12 boys in the Tham Luang cave rescue in 2018. Spiro also helped the Tesla CEO dismiss a security fraud trial after he tweeted he would take Tesla private by paying $420 per share. Although he was not involved with Tesla’s defense in the racism lawsuit Diaz filed against the company, Spiro took part in the new jury trial.
Photo: Tesla
Lawrence Organ represented Diaz in the first one. He told Forbes that Spiro’s strategy was to attack his client’s credibility. In Organ’s own words, the idea was to “minimize and sanitize.” Spiro accused Diaz of lying several times. He said the former contract worker alleged he left Tesla to work as a bus driver but that he actually went to work for a Coca-Cola factory. Spiro also urged the jurors not to believe anything a witness who lied would have to say. Organ lamented that “those antics worked.” And they indeed did.
Diaz’s lawyer asked $150 million as punitive damages with the argument that this would be the only way to “hold a multibillion-dollar company accountable, to get their attention” in preventing the racism Diaz had to face. J. Bernard Alexander’s strategy failed: his client should receive only 1/50 of the amount he considered to be fair if there is no way to appeal the decision. I tried to contact Organ about that but have received no reply from him so far.
Photo: Tesla
Ironically, none of the parties was allowed to bring more evidence to the judgment. After all, it was held solely to determine the new damages Diaz should receive, not the racism he was subject to when he worked at Tesla’s Fremont factory: that was considered to be more than proven. Judge William Orrick wrote that the first jury heard Fremont “was saturated with racism.” That means that everything Spiro used was probably in the jury trial that granted the former contract worker $136.9 million. That makes you wonder, doesn’t it?
If Diaz lied, why did the first jury grant him one of the highest damages ever awarded to an individual in the U.S. due to discrimination? The only things that changed from the first jury trial to the latest one were the attorneys and the jurors. Apart from Spiro, the explanation for the new results may be in the jury. The selection process for the jurors may have made all the difference.
Photo: Tesla/DFEH/edited by autoevolution
Whatever caused this extreme change, Elon Musk still thinks it could have been better for his company. He criticized the fact Tesla could not present new evidence and stated that they could make the company walk without paying a dime to Diaz. Musk was answering a tweet from one of his fans who mocked the jury trial result. Both may be celebrating too soon.
Tesla still has to go to court several more times due to racism lawsuits. Marc Cage filed his lawsuit on February 2022. Marcus Vaughn started a class-action case related to that in November 2017. Tyron Aguedo, Teri Mitchell, and 13 other former Tesla employees are also suing the EV maker. As employees, they may be forced to take their cases to arbitration courts. Melvin Berry won $1 million in one of them. Above all, the California Department of Fair Employment and Housing (DFEH) wants Tesla to face justice for “systematic racial discrimination and harassment.”
Where there’s smoke, there’s fire. Instead of making fun of Owen Diaz, Musk and his followers could try to address the root cause and prevent new racism cases on Tesla premises. The EV maker may not have lost $136.9 million with Diaz alone, but that does not mean it will dodge losing way more than that with all the pending cases it is yet to tackle. As competent as Alex Spiro may have proved to be as a firefighter, these blazes may reignite as much as a battery pack on a thermal runaway.
If we had been allowed to introduce new evidence, the verdict would’ve been zero imo.
Jury did the best they could with the information they had. I respect the decision.
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