SAN FRANCISCO (AP) — Lawyers for Tesla shareholders, who are suing the electric vehicle maker’s CEO Elon Musk over a misleading tweet, are urging a federal judge to deny the billionaire’s request to move an upcoming trial from California to Texas.
Musk claims he is being treated unfairly by would-be jurors in federal court in San Francisco, where the 4-year-old case was filed.
But in a filing filed Wednesday, lawyers for Tesla shareholders claimed there were no legal grounds to delay the upcoming trial over it a tweet dated August 7, 2018 in which Musk indicated that he had prepared funding for a Tesla buyout – a deal that never materialized and led to a $40 million settlement with US securities regulators.
The attorneys also argued that Musk was solely responsible for negative perceptions, largely because of his frequent activity on Twitter, the social media platform he now owns and operates.
“Musk is, for better or for worse, a celebrity who is attracting media attention around the world,” the shareholders’ attorneys wrote in their 19-page opposition to the transfer proposal. “His footprint on Twitter is partly responsible for that. If “negative” attention were all it took to disqualify a jury pool, Musk would be virtually untouchable in front of a jury given his talent for attracting “negative” coverage.”
The filing comes less than a week after Musk’s attorney, Alex Spiro, asked US District Judge Edward Chen to move the case to Texas, the state where Musk moved Tesla’s headquarters to in 2021 after nearly 20 years in its original one spent at home in Silicon Valley. If the trial is not rescheduled, Spiro is pushing for a postponement of the start of jury selection, currently scheduled for Tuesday.
The shareholders’ attorneys noted that since Musk’s buyout tweet occurred while Tesla was based in Palo Alto, California, their 2018 lawsuit would never have been allowed in a Texas federal court at the time. In addition, a list of witnesses includes several former California-based Tesla executives who would be unduly harassed if the trial were moved to Texas.
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Chen has scheduled a hearing for Friday to hear more arguments about Musk’s efforts to delay or delay the trial. The judge has already ruled that Musk’s buyout tweet was false, leaving it up to a jury to decide whether he acted recklessly in posting it and whether he caused financial harm to Tesla shareholders. After adjusting for two stock splits since 2018, Tesla stock is now worth nearly six times what it was when Musk tweeted about the sham takeover.
Though Musk has been hailed as a technology visionary in the San Francisco Bay Area for years, Spiro believes his reputation across the region has been badly tarnished by negative media coverage since he made his $44 billion purchase of Twitter in October has completed. Since then, Musk has fired or pushed out more than half of Twitter’s workforce while snubbing users of the service with policies that critics say have weakened the service’s guard rails against misinformation and hateful content.
The backlash to those actions, which Musk has defended as steps to reduce Twitter’s losses and protect the right to free speech, Spiro said increased the likelihood that potential jurors would be biased against him. Among other things, Spiro cited the possibility that potential San Francisco Bay Area judges were recently fired from Twitter or know someone who lost their job after Musk’s takeover.
The shareholders’ lawyers cited the approximately 200 jury questionnaires presented to Chen to refute this argument. Only two or three of the prospective jurors said they knew anyone who works at Twitter, the attorneys said.