Judge Hears Elon Musk Request to Relocate Trial Over Tesla Tweets
Attorneys for Mr. Musk argued in a filing last week that potential jurors in the trial scheduled to unfold in San Francisco could be biased against the billionaire over his use and recent management of Twitter. U.S. District Judge
Edward Chen
kicked off a hearing on the issue Friday morning.
Mr. Musk and Tesla are facing a trial that is scheduled to begin next week over a shareholder lawsuit relating to his tweets in 2018 suggesting he had funding to take the electric-vehicle company private.
Mr. Musk tweeted in 2018, “Am considering taking Tesla private at $420. Funding secured.” The deal that would have been valued at $72 billion at the time never materialized. Investors sued Tesla and Mr. Musk, claiming his tweets were false and cost them billions by spurring swings in Tesla’s stock price.
Plaintiffs, who are seeking damages, said in a pretrial briefing that days of turmoil sparked by Mr. Musk’s assertions caused billions of dollars in losses to some investors because of what happened with Tesla’s stock, options and bonds. The defendants state in their filing that the plaintiffs won’t be able to establish Mr. Musk’s statements were materially false and misleading.
In court filings, Mr. Musk has maintained that his tweets were accurate and that Saudi Arabia’s sovereign-wealth fund had agreed to support his attempt to take Tesla private. Judge Chen last year ruled that Mr. Musk’s tweets about taking the company private were false and misleading.
San Francisco’s jury pool has been “exposed to excessive and adverse pretrial publicity concerning Defendant Elon Musk that will deprive him of an impartial jury and his constitutional right to a fair trial,” Mr. Musk’s attorneys argued a week ago in a court filing.
Lawyers for the plaintiffs this week pushed back, arguing in a legal filing, among other things, that Mr. Musk’s Twitter conduct had no bearing on the jury’s ability to render a verdict in this case.
Mr. Musk purchased San Francisco-based social-media site Twitter Inc. in late October and soon after laid off about half of its staff. Mr. Musk’s attorneys argued in a court filing that Twitter’s recent staff reductions, including almost 1,000 employees in the federal-court district that includes San Francisco, have caused prejudice against Mr. Musk among jurors “who were personally impacted or are close to those personally impacted.” Mr. Musk’s lawyers also cited negative responses from local politicians and media in the filing.
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Mr. Musk’s attorneys have requested that the trial be held in western Texas. Tesla moved its headquarters from northern California to Austin in late 2021. Plaintiffs argued the case shouldn’t be moved, in part because there was no connection between Tesla and western Texas at the time Mr. Musk sent the tweets spurring the litigation.
Minor Myers, a professor at the University of Connecticut specializing in corporate law, said he sees it as unlikely that the trial will get moved to Texas.
“The idea that you can’t find a jury in San Francisco because of the things people say on Twitter about Elon Musk is hard to believe,” he said.
Mr. Musk and Tesla each paid $20 million to settle a civil lawsuit by the Securities and Exchange Commission over the tweets in 2018. Mr. Musk also relinquished the role of Tesla chairman, though he remained as the company’s chief executive. He later said in legal filings that he felt pressured to settle the suit. Last year, a federal judge denied Mr. Musk’s request to scrap the settlement.
Should the trial’s venue not be moved, Mr. Musk asked that the court delay the trial “to allow the passions and prejudice to fade,” his attorneys wrote in the court filing.
Write to Meghan Bobrowsky at [email protected]
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