Elon Musk’s lawyers are trying to move the trial from California to Texas, citing ‘local negativity’
Lawyers for Tesla and Elon Musk are asking a federal judge in San Francisco to move or postpone a trial coming from Northern California to West Texas.
Musk and other current and former Tesla board members will face a jury in a shareholder class action lawsuit alleging the CEO manipulated Tesla stock in 2018 when he tweeted that he was considering privatize his electric vehicle company for $420 a share and was in favor of it “. guaranteed financing”.
Tesla stock trading was initially halted, then stocks were highly volatile for weeks after the tweets.
Until that year, Musk was living in California and Tesla was headquartered in Palo Alto. The CEO of Tesla and SpaceX relocated to Texas in 2020, and his electric vehicle company moved its headquarters to Austin in 2021.
In 2022, Northern California District Chief Judge Edward M. Chen, who is overseeing the trial, ruled that Musk’s 2018 statements were false and that he knowingly tweeted them.
The upcoming trial and jury will decide whether Musk’s now-infamous tweets mattered to shareholders, if and how they impacted Tesla’s stock price, and whether the company or the its directors must be held responsible and pay damages.
In a motion to change jurisdiction, lawyers for Tesla and Musk argue that the CEO received extensive and negative publicity in California after acquiring San Francisco-based social media company Twitter in October 2022.
Musk has proclaimed himself CEO of Twitter and laid off 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.
Alex Spiro, a partner at Quinn Emanuel Urquhart & Sullivan, who has represented Musk in several cases, argued in a recent filing, “A significant portion of the jury in this district is likely to have a more personal bias and materials against Mr. Musk. from one based on the last.” Shooting at one of his companies, as individual potential jurors – or their friends and relatives – could have been personally affected. The underlying distortion that existed was aggravated, amplified and reinforced by the negative and inflammatory local publicity surrounding the events.”
Spiro added in the filing that “the negativity toward Mr. Musk was not limited to the press.” He said there are regular protests and pickets outside Musk’s offices in San Francisco, adding that some have “the support and encouragement of local politicians”.
Musk and his lawyers previously argued that his comments about a potential take-private deal for Tesla in 2018 did not violate the law.
Tesla’s CEO has repeatedly claimed to have reached a handshake deal with investors in Saudi Arabia’s Public Investment Fund to privatize Tesla for $420 per share. Messages revealed in another trial in 2022 suggested that Saudi PIF investors had not fully agreed to finance a Tesla deal.
The Court’s submissions this month in the securities class action show that Musk’s lawyers have subpoenaed four people who help run the Saudi Public Investment Fund to testify in the case, including Naif Al Mogren, Saad Al Jarboa, Turqi Alnowaise and Yasir Al-Rumayyan.
Source: www.nbcnews.com
