Elon Musk Seeks Venue Change In Shareholder Action, Cites Likely “Local Negativity” In San Francisco – Deadline
Elon Musk wants to move a shareholder class action lawsuit from San Francisco to West Texas, claiming a lack of unbiased jurors in the Bay Area.
A federal judge is mulling the motion. Musk and other Tesla board members are confronting a lawsuit that claims he manipulated Tesla’s stock in 2018. That was when he tweeted he was taking the company private at $420 per share and had “funding secured” to do so. The “420” was considered to be a joking reference to a time associated with marijuana smoking.
The stock soared on the tweet, then seesawed for weeks.
In 2018, Musk lived in California and Tesla was headquartered in Palo Alto, Calif. Musk moved his residence to Texas in 2020, and Tesla relocated its headquarters to Austin in 2021.
Last year, Northern California Senior District Judge Edward M. Chen, who is overseeing the trial, ruled that Musk’s statements in 2018 were false and that he tweeted them knowingly. The trial would determine whether the tweets mattered to shareholders, if and how Tesla’s share price as affected, and whether the company or its directors should be held liable and pay damages.
In the motion to change venue, attorneys argued Musk’s Twitter takeover has generated negative publicity, potentially compromising a jury pool in the Bay Area.
“A substantial portion of the jury pool in this District is likely to hold a personal and material bias against Mr. Musk as a result of recent layoffs at one of his companies as individual prospective jurors—or their friends and relatives—may have been personally impacted,” the brief read. “The existing baseline bias has been compounded, expanded, and reinforced by the negative and inflammatory local publicity surrounding the events.”
Protests outside Twitter headquarters and local politicians inflammatory statements have also tainted the potential jury pool.
Musk and his attorneys argue that the 2018 tweet did not violate the law, and that he had a deal in place with the Saudi Arabia Public Investment Fund.