Tesla CEO Elon Musk speaks at an event in Hawthorne, California on April 30, 2015.
Patrick T. Fallon | Reuters
Lawyers for Tesla and Elon Musk asked a federal judge in San Francisco to move, or delay, the upcoming trial from Northern California to Western Texas, saying they will not be able to find a fair jury and citing “local negativity” towards Musk.
Musk, and other current and former Tesla board members, will face a jury in a shareholder class action alleging the CEO manipulated Tesla stock in 2018 when he tweeted that he is considering taking the electric vehicle company private for $420 per share, and has “guaranteed funding” to do so.
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Tesla stock trading was initially halted, then the stock was highly volatile for weeks after the tweets.
That year, Musk was living in California and Tesla was headquartered in Palo Alto. The CEOs of Tesla and SpaceX are moving their homes to Texas in 2020, and the electric vehicle company is moving its headquarters to Austin in 2021.
In 2022, Northern California Senior District Judge Edward M. Chen, who oversaw the trial, ruled that Musk’s 2018 statement was false and that he had tweeted intentionally.
The upcoming trial and jury will decide whether Musk’s now-infamous tweets mattered to shareholders, if and how they affected Tesla’s stock price, and whether the company or its directors should be held accountable and pay damages.
In the motion to move the venue, the lawyers representing Tesla and Musk argued that the CEO has received extensive and negative publicity in California after taking over the San Francisco-based social media company, Twitter, in October 2022.
Musk was appointed CEO of Twitter, and has cut thousands of employees in a series of chaotic layoffs and layoffs since the deal closed.
At a recent public appearance in San Francisco, Musk was booed after comedian Dave Chappelle invited him on stage.
Quinn Emanuel Urquhart & Sullivan partner Alex Spiro, who has represented Musk in several court matters, argued in this latest filing:
“A large portion of the jury pool in this District may have a personal and material bias against Mr. Musk as a result of a recent layoff at one of the companies as individual juror candidates—or their friends and relatives—may be personal. Existing baseline bias has been compounded, expanded, and reinforced by the negative and inflammatory local publicity surrounding the event.
Spiro added in the filing that “the negativity toward Mr. Musk is not isolated to the press.” He said there had been regular protests and picketing activity in front of Musk’s office in San Francisco, adding that some were “endorsed and supported by local political figures.”
Musk and his lawyers have previously argued that claims about a possible private deal for Tesla in 2018 did not violate the law.
Tesla’s CEO has repeatedly claimed that he made a handshake deal with investors from Saudi Arabia’s Public Investment Fund to take Tesla private for $420 per share. Text messages revealed in another trial in 2022 suggest Saudi PIF investors have not yet agreed to finance the Tesla deal.
Court filings this month in the securities class action show that Musk’s lawyers have invited four people who helped run the Saudi Public Investment Fund to testify in the trial, including Naif Al Mogren, Saad Al Jarboa, Turqi Alnowaise and Yasir Al-Rumayyan.
Read the filing from In Re: Tesla Inc. Securities Litigation (Case 3:18-cv-04865-EMC) here: