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Elon Musk attorneys try to move trial from California to Texas, citing ‘local negativity’

In a motion to transfer venue, attorneys argue that Musk has garnered negative publicity in California after taking over Twitter.
Elon Musk during an unveiling event for the Tesla Model Y in Hawthorne, Calif.,
Elon Musk during an unveiling event for the Tesla Model Y in Hawthorne, Calif., in March 2019. Patrick T. Fallon / Bloomberg via Getty Images file
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Attorneys for Tesla and Elon Musk are asking a federal judge in San Francisco to move, or delay, a forthcoming trial from Northern California to Western Texas, saying they won’t be able to find unbiased jurors and citing “local negativity” toward Musk.

Musk, and other current and former Tesla board members, are set to face a jury in a shareholder class action that claims the CEO manipulated Tesla’s stock in 2018 when he tweeted that he was considering taking his electric vehicle company private at $420 per share, and had “funding secured” to do so.

Tesla’s stock trading initially halted, then shares were highly volatile for weeks after the tweets.

That year, Musk resided in California and Tesla was headquartered in Palo Alto. The Tesla and SpaceX CEO moved his residence to Texas in 2020, and his electric vehicle company relocated its headquarters to Austin in 2021.

In 2022, 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 forthcoming trial and jury will decide whether Musk’s now infamous tweets mattered to shareholders, if and how they impacted Tesla’s share price, and whether the company or its directors should be held liable and pay damages.

In a motion to transfer venue, attorneys representing Tesla and Musk argue that the CEO has garnered extensive and negative publicity in California after taking over a San Francisco-based social media company, Twitter, in October 2022.

Musk appointed himself CEO of Twitter, and has cut thousands of employees in a series of chaotic firings and layoffs since the deal closed.

In 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 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 existing baseline bias has been compounded, expanded, 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 isolated to the press.” He said there are regular protests and picketing activity in front of Musk’s offices in San Francisco, adding that some are “endorsed and encouraged by local political figures.”

Musk and his attorneys have previously argued that his statements about a possible take-private deal for Tesla in 2018 did not violate the law.

The Tesla CEO has repeatedly claimed that he made a handshake deal with investors from Saudi Arabia’s Public Investment Fund to take Tesla private at $420 per share. Text messages revealed in another trial in 2022 suggested Saudi PIF investors had not fully agreed to fund a Tesla deal.

Court filings this month in the securities class action show that Musk’s attorneys have subpoenaed four people who help run the Saudi Public Investment Fund to testify in this trial including Naif Al Mogren, Saad Al Jarboa, Turqi Alnowaise and Yasir Al-Rumayyan.