Twitter’s (NYSE: TWTR) lawsuit against Elon Musk over his attempt to withdraw from his acquisition of the company marks the latest in a long, long, long series of courtroom battles that the Tesla (NASDAQ: TSLA) chief executive has faced over the years.
For the benefit of those who may have lost count over the number of times Musk has been sued, here are 10 of the most notable examples involving Musk, his company and his peculiar propensity for generating litigation-sparking tweets.
The Founder Lawsuit: Martin Eberhard, who co-founded Tesla Motors in 2002 with Marc Tarpenning and served as its first CEO and chairman until 2007, sued Tesla and Musk in 2009 for slander, libel and breach of contract. Eberhard was particularly incensed that Musk claimed to be a co-founder, accusing him of trying to “rewrite history,” and he also accused him of pushing him out of the company and wrongfully denying him severance.
The lawsuit was settled out of court, and one of the provisions included a corporate history affirmation of Musk being a Tesla co-founder, even though he was not involved with the company until one year after its incorporation.
The “Pedo Guy” Lawsuit: In 2018, Musk’s offer to send a special submarine to help rescue a group of children trapped in a flooded cave in Thailand was rejected by Vernon Unsworth, a British cave explorer who coordinated the children’s rescue. Musk later referred to Unsworth on Twitter as a “pedo guy” and berated a Buzzfeed reporter covering the case with the demand to “stop defending child rapists.”
Unsworth sued Musk in 2019 in Los Angeles court for $190 million for defamation, but lost the case. Unsworth’s attorney Lin Wood later told a press conference, “This verdict sends a signal, and one signal only – that you can make any accusation you want to, as vile as it may be and as untrue as it may be, and somebody can get away with it.”
The “Funding Secured” Lawsuit: On Aug. 7, 2018, Musk tweeted, “Am considering taking Tesla private at $420. Funding secured.” This tweet came without the approval of the Tesla board of directors, and the U.S. Securities and Exchange Commission (SEC) quickly sued Musk for securities fraud.
Musk’s settlement with the SEC required him to step down as Tesla chairman, agreeing to have a lawyer approve his Tesla-related tweets before they were posted. Earlier this year, Musk revisited the controversy by trying to overturn the pre-approval of his tweets and by claiming he had secured funding with a Saudi Arabian entity. However, the judge in an ongoing lawsuit brought by a shareholder in connection to the tweet noted the “statements by Musk were false and misleading and that Musk made these false statements recklessly and with full awareness of the facts that he misrepresented in his tweets.”
The SolarCity Lawsuit: SolarCity Corporation was a rooftop solar panel maker founded by Musk’s cousins Peter and Lyndon Rive. Tesla acquired the unprofitable company for $2.6 billion in cash in 2016, but some Tesla shareholders voiced their disapproval, filing a $13 billion lawsuit that claimed the acquisition was “a rescue from financial distress, a bailout, orchestrated by Elon Musk.”
Last April, the Delaware judge in this case ruled that although Musk “was more involved in the process than a conflicted fiduciary should be,” he nonetheless found that Tesla paid a “fair price” for SolarCity and the acquisition was “highly beneficial” to the company. The shareholders who brought the lawsuit have the option to appeal the ruling.
The SpaceX Whistleblower Lawsuit: Not every Musk lawsuit involves Tesla. SpaceX avionics technician Jason Blasdell sued his former employer for being fired in 2014, claiming that he warned Musk and other officials that the company’s rocket-building test protocols weren’t being properly followed and the results being recorded were inaccurate.
Blasdell took the company to court, but during a 2017 trial, SpaceX argued that Blasdell was an erratic and disruptive presence who never met with Musk and who only began citing incorrect testing protocols after he was fired. A jury ruled against Blasdell, and Musk commented on the outcome by tweeting, "Such an outrageous lawsuit. People sometimes underestimate strength of US judiciary. Lot of respect for the judge & jury system."
See Also: 10 Weirdest Paintings Of Elon Musk
The First Compensation Lawsuit: In 2019, Tesla shareholder Richard Tornetta filed a lawsuit accusing the company’s board of directors of breaching its fiduciary duties by agreeing to give Musk a $2.6 billion compensation package for 2018.
Tornetta questioned whether Musk unduly influenced the board, and the board acknowledged that the compensation committee was not independent of its chief executive. Tornetta is seeking an overhaul of the compensation process for Musk, although Tesla insisted the compensation package was approved by the majority of shareholders. The lawsuit, Richard J. Tornetta v. Elon Musk, et al., is now before the court.
The Second Compensation Lawsuit: Separate from Tornetta’s lawsuit is June 2020 litigation brought by the Detroit Policemen & Firemen Retirement System, the pension fund for the city’s first responders, alleging that Musk and his fellow Tesla board members siphoned off company funds to award themselves “lavish” compensation packages between 2017 and 2020 “in conspicuous disregard of their fiduciary duties.”
The case is now before Delaware Chancery Court as The Police and Fire Retirement System of the City of Detroit v. Elon Musk, et al., and it seeks to make the board members pay back what they received in compensation during the years in question.
The California Racism Lawsuit: While individual Tesla employees have filed lawsuits over alleged racist practices within the company, in February the California Department of Fair Employment and Housing (DFEH) filed a 39-page lawsuit based on a three-year investigation into “hundreds of complaints” of racial harassment and discrimination against the Black employees of Tesla’s Fremont factory. DFEH Director Kevin Kish accused the company of running a “racially-segregated workplace where Black workers are subjected to racial slurs and discriminated against in job assignments, discipline, pay and promotion creating a hostile work environment.”
DFEH cited the company’s high-profile leader in its lawsuit, noting that “Tesla’s CEO, Mr. Musk, has advised that Tesla workers should be ‘thick-skinned’ about race harassment.” Musk has avoided making a direct comment on the lawsuit, although a corporate blog post attributed to the “Tesla Team” belittled the DFEH’s actions as “misguided” and claimed the “Fremont factory has a majority-minority workforce and provides the best-paying jobs in the automotive industry to over 30,000 Californians.”
The “Toxic Workplace Culture” Lawsuit: Last month, Tesla shareholder Solomon Chau filed a lawsuit against Musk, Tesla and the company’s board of directors for failing to address complaints regarding discrimination and harassment at its facilities.
“Tesla has created a toxic workplace culture grounded in racist and sexist abuse and discrimination against its own employees,” said Chau in his litigation. “This toxic work environment has gestated internally for years, and only recently has the truth about Tesla's culture emerged. Tesla's toxic workplace culture has caused financial harm and irreparable damage to the company's reputation.” The case is Chau et al v. Musk et al, U.S. District Court, Western District of Texas.
The Dogecoin Lawsuit: Also last month, Dogecoin (CRYPTO: DOGE) investor Keith Johnson sued Musk, Tesla and SpaceX for $258 billion, charging them with operating a pyramid scheme in support of the cryptocurrency. In his lawsuit, Johnson said Musk and his companies “were aware since 2019 that Dogecoin had no value yet promoted Dogecoin to profit from its trading. Musk used his pedestal as World's Richest man to operate and manipulate the Dogecoin Pyramid Scheme for profit, exposure and amusement.”
The case of Johnson v. Musk et al, was filed in U.S. District Court for the Southern District of New York. Musk has not commented on the Chau or Johnson lawsuits.
Photo: Elon Musk in his 2021 "Saturday Night Live" appearance, courtesy of NBC
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