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Elon Musk's attorneys argue his Twitter purchase has caused so much 'local negativity' that a class action trial should be moved from California to Texas

Elon Musk looks down during a 2022 SpaceX speech
Elon Musk looks down during a speech.Jim Watson/AFP via Getty Images
  • Elon Musk faces a class action lawsuit over tweets saying he secured funding to take Tesla private.

  • His attorneys say the trial should be held in Texas instead of California to ensure fairness.

  • Since Musk's Twitter takeover, prospective 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's unlikely he'd be able to get a fair trial, his lawyers argued in a recent court filing.

The Tesla chief executive is facing a class action lawsuit over his 2018 tweets indicating he planned to take the electric vehicle company private at $420 per share and had "funding secured" to do so.

Just one month after the initial 2018 tweet, Musk paid a $20 million fine and settled fraud charges with the SEC for making "false and misleading statements." Though 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 trial, ruled last year that Musk knowingly made the false statements, which may have impacted Tesla's share price. The upcoming trial will determine whether the posts indeed impacted Tesla's share price, if the company or its directors should be held liable, and if shareholders are entitled to damages, according to NBC News.

After finalizing his $44 billion deal to buy Twitter last year, the billionaire remains roughly $13 billion in debt — much of which is secured against his remaining stake in Tesla as part of the leveraged buyout, The Street reported, making the financial future of the two companies deeply entwined.

Since the October 27 acquisition of Twitter, Tesla's stock price has fallen from $225.09 to $113.06 per share, its lowest point since August 2020.

Musk's business dealings since acquiring the social media company, including mass layoffs and a culture current employees describe as "toxic," may also make it more difficult for the billionaire to be judged by a jury of his peers in California, according to his lawyers, and should 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 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."

In December 2021, Tesla relocated its headquarters from Silicon Valley to Austin, Texas. Twitter remains based in San Francisco, California.

Referencing regular protests and picket lines in front of Musk's offices in San Francisco — some of which, Spiro said, are "endorsed and encouraged by local political figures" — Musk's attorneys 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 for a venue transfer not be granted by the court, Spiro requested a continuance to delay the trial, arguing the judge should allow time for "the passions that have been inflamed" by "recent events and biased local media coverage to dissipate" before jurors hear the case.

The request is set 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.

Read the original article on Business Insider