- Elon Musk is facing a class action lawsuit over tweets saying he secured financing to take Tesla private.
- His lawyers say the trial should be held in Texas instead of California to ensure justice.
- Since Musk’s Twitter takeover, potential jurors are biased against the billionaire, they argued.
Elon Musk’s Twitter takeover has made him so unpopular in the state of California that it is unlikely he will be able to get a fair trial, his lawyers argued in a recent lawsuit.
The Tesla CEO is facing a class action lawsuit over his 2018 tweets indicating he planned to take the electric car company private at $420 a share and had “financed” to do so.
Just one month after the first tweet in 2018, Musk paid a $20 million fine and filed fraud charges with the SEC for making “false and misleading statements.” Although Musk neither admitted nor denied the allegations, he resigned as Tesla’s chairman and was replaced by Robyn Denholm.
Northern California Senior District Judge Edward M. Chen, who will oversee the class action, ruled last year that Musk knowingly made the false statements, which may have affected Tesla’s stock price. The upcoming trial will determine whether the posts actually affected Tesla’s stock price, whether the company or its directors should be held liable, and whether shareholders are entitled to compensation, according to NBC News.
After completing his $44 billion deal to buy Twitter last year, the billionaire is still saddled with about $13 billion in debt — much of which is secured against his remaining stake in Tesla as part of the leveraged buyout, The Street reported , which makes the financial future of the two. companies deeply intertwined.
Since the acquisition of Twitter on October 27, Tesla’s share price has fallen from $225.09 to $113.06 per share, the lowest point since August 2020.
Musk’s dealings since acquiring the social media company, including mass layoffs and a culture current employees describe as “toxic,” could also make it harder for the billionaire to be tried by a jury of his peers in California, according to his lawyers. and will be moved to Texas.
Musk’s attorney, Alex Spiro, argued in a motion filed Friday that a “substantial portion of the jury pool in this district is likely to have a personal and material bias against Mr. Musk as a result of recent layoffs at one of his companies as individual companies. potential jurors—or their friends and relatives—may have been personally influenced. The existing baseline 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 is still based in San Francisco, California.
Citing regular protests and walkouts in front of 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. Musk was not isolated to the press” and “will deprive him of an impartial jury and his constitutional right to a fair trial.”
Should the request to transfer venue not be granted by the court, Spiro asked for a continuance to delay the trial, arguing that the judge should allow time for the “passions that have been inflamed” by “recent events and biased local media coverage to subside” before jurors hearing the case.
The request is to be heard by Judge Chen on January 13, according to the filing, just four days before the trial is set to begin.
Musk, his legal team and representatives for Tesla did not immediately respond to Insider’s requests for comment.