- Elon Musk is facing a class action lawsuit over tweets alleging he secured financing to take Tesla private.
- His lawyers say the trial should be held in Texas instead of California to ensure fairness.
- Since Musk’s takeover of Twitter, prospective jurors are biased against the billionaire, they argued.
Elon Musk’s takeover of Twitter has made him so unpopular in the state of California that it’s unlikely he’ll be able to get a fair trial, his lawyers argued in a recent court filing.
The Tesla CEO is facing a class action lawsuit over his 2018 tweets that said he planned to take the electric vehicle company private for $420 a share and had “secured financing” to do so.
Just a month after the original 2018 tweet, Musk paid a $20 million fine and settled fraud charges with the SEC for making “false and misleading statements.” Although Musk has neither admitted nor denied the allegations, he has resigned as Tesla’s chairman and has been replaced by Robin Denholm.
Northern California Senior District Judge Edward M. Chen, who will oversee the class action, ruled last year that Musk knowingly made false statements that may have affected Tesla’s stock price. The upcoming trial will determine whether the announcements actually affected Tesla’s stock price, whether the company or its directors should be held liable, and whether shareholders are entitled to damages, according to NBC News.
After finalizing his $44 billion deal to buy Twitter last year, the billionaire remains roughly $13 billion in debt — much of which was secured by his remaining stake in Tesla as part of a leveraged buyout, The Street reported, which makes the financial future of the two of them. companies deeply intertwined.
Since its acquisition of Twitter on October 27, Tesla’s stock price has fallen from $225.09 to $113.06 per share, its lowest point since August 2020.
Musk’s dealings since taking over the social media company, including mass layoffs and a culture described by current employees as “toxic,” could also make it difficult for the billionaire to be tried by a jury of his peers in California, according to his lawyers, and should be moved to Texas.
Musk’s attorney, Alex Spiro, argued in a filing Friday that “a substantial portion of the jury in this district is likely to have a personal and material bias against Mr. Musk as a result of recent firings at one of his companies as individual prospective jurors — or their friends and relatives.” — may have been personally affected. The existing underlying bias has been reinforced, widened and reinforced by the negative and inflammatory local publicity surrounding the events.”
In December 2021, Tesla moved its headquarters from Silicon Valley to Austin, Texas. Twitter remains headquartered in San Francisco, California.
Citing regular protests and picket lines outside Musk’s San Francisco offices — some of which, Spiro said, are “supported and encouraged by local political figures” — Musk’s lawyers noted in the filing that “the negativity toward Mr. Mask is not isolated from the press” and “will deprive him of an impartial jury and his constitutional right to a fair trial.”
If the court does not grant the motion, Spiro asked for a further adjournment, arguing that the judge should allow time for “passions inflamed” by “recent events and biased local media coverage to die down” before jurors hear the case.
Judge Chan is scheduled to hear the motion on Jan. 13, the filing said, just four days before the trial begins.
Musk, his legal team and Tesla representatives did not immediately respond to Insider’s requests for comment.