Tesla’s Many Dockets of Litigation Keep Lawyers and Judges Busy

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Elon Musk generates a near-constant barrage of news headlines because of his tweets. It’s a lot to keep up with.

Last week, he posted a Hitler meme, only to delete it hours later. On Wednesday, Musk claimed he’s been “building a case” against the U.S. Securities and Exchange Commission, which he accused of starting a fight with him that he will finish. The SEC likely would beg to differ with this retelling and point to Musk’s August 2018 tweets about taking Tesla private, which the agency alleged amounted to securities fraud.

But ignore the tweets. Look instead at the litigation Tesla is facing. Writing about tweets is easy compared to following all the filings in countless dockets in numerous courtrooms. Here’s a quick sample of legal matters, by topic:

Autopilot

Tesla’s driver-assistance system is part of several cases involving fatal crashes.

Litigation is ongoing in the case of Walter Huang, the Apple employee who died after his Model X crashed on Highway 101 in Silicon Valley in 2018. The family of Jeremy Banner, whose car crashed into a tractor trailer in Florida in 2019, also is suing; the case is slated to go to trial in the fall.

Dennis and Jenna Monet were driving across the country in a Model 3 in 2019 when they hit a parked fire truck on an Indiana highway. Jenna Monet died, while Dennis survived and is suing Tesla in federal court in San Francisco. The crash is one of 12 that led to the defect investigation the National Highway Traffic Safety Administration started in August.

Racial discrimination

Last fall, a federal jury in San Francisco awarded Owen Diaz, a former contract worker at Tesla’s Fremont plant, $137 million in a racial discrimination case. Tesla has appealed the decision, and the presiding judge, William Orrick, has signaled he’ll shrink the award.

A California agency sued Tesla in Alameda County Superior Court this month, alleging “rampant racism” against Black workers at the Fremont plant and other facilities throughout the state.

Several other lawsuits alleging discrimination have been filed: Kaylen Barker, a former contract worker at Tesla’s factory in Lathrop, alleges a white coworker struck her with a hot grinding tool while calling her the n-word. Another case was filed on Feb. 18 by Marc Cage. He alleges that “virtually every restroom in Tesla’s Fremont facility contained writings or carvings of racist symbols or slurs, including swastikas and prominent displays of the n-word.”

Shareholder suits

The trial in the shareholder lawsuit over Tesla’s 2016 acquisition of SolarCity wrapped up in January; at closing arguments, Judge Joseph Slights of Delaware Chancery Court said he would rule in about three months, before he retires.

A shareholder suit over those going-private tweets Musk sent in 2018 is scheduled for trial in federal court in San Francisco in May. And another shareholder lawsuit about Musk’s unprecedented compensation plan will be going to trial in Delaware in the fall.

The SEC

The agency reached settlements with Musk and Tesla in September 2018. Earlier this month, Tesla disclosed in a regulatory filing that on Nov. 16, the SEC sent a subpoena seeking information about the company’s governance processes and compliance with the settlements.

Alex Spiro, Musk’s outside counsel, wrote in a letter last week to the judge overseeing the case that the SEC was targeting Musk with “unrelenting investigation” because of Musk’s outspoken criticism of the government. The SEC responded with a denial. Early this week, Spiro, a partner at the law firm Quinn Emanuel, filed a new letter, ratcheting up the rhetoric and accusing the SEC of leaking details about its probe.

Read more: Musk Keeps Poking the Bear Who Wanted to Ban Him From Tesla

While all this is a lot to keep track of, investors are paying attention.

New York’s state retirement fund has filed a shareholder resolution calling on Tesla to disclose “the total number and aggregate dollar amount of disputes settled by the company related to abuse, harassment or discrimination.” This and any other pressure from investors related to legal disputes bears watching.

To contact the author of this story:
Dana Hull in San Francisco at dhull12@bloomberg.net

To contact the editor responsible for this story:
Dimitra Kessenides at dkessenides1@bloomberg.net

Craig Trudell

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