Elon Musk Can’t Shake Defamation Lawsuit

On December 20, 2021, the California Court of Appeals issued an unpublished opinion that upheld a trial court’s order that Elon Musk’s statements in an email were not protected by California’s anti-SLAPP statute. The California anti-SLAPP statute provides for a motion to strike the lawsuit at its inception if (a) the claims are based upon free speech, and (b) the plaintiff cannot show that the lawsuit has merit. Thus, the defamation claims against Musk, having survived the anti-SLAPP motion, will proceed to trial.

Plaintiff Randeep Hothi, known as a Tesla “short seller”, developed an interest in Tesla’s business and its claims about its production and technology. Short sellers buy and sell stock in a company, but they wager that the stock they are selling will drop in price. The aim for short sellers is to sell the stock with the goal to buy the stock back at a cheaper price to make a profit off the difference. Hothi regularly tweeted skepticism about Tesla on an anonymous Twitter account and posted photos and videos at the Tesla Freemont factory parking and logistics lots, which he would frequently visit for content (without proper access), he would also place remote cameras in the Tesla lots.

In 2019, Tesla sought a temporary restraining order against Hothi. Tesla alleged Hothi hit a security guard with his car when asked to leave the Tesla Freemont factory. This episode, Tesla claims, was part of Hothi’s “ongoing crusade against the company” and resulted in “minor injuries” to the security guard’s left knee. In April 2019, the trial court granted the temporary restraining order. However, Tesla withdrew its petition for a permanent restraining order after Hothi requested information and documents from Tesla.

Shortly after, PlainSite.org founder, Aaron Greenspan, engaged in an email exchange with Musk criticizing the company’s “truly shameful” treatment of Hothi and others. PlainSite is an organization that provides free and paid access to legal documents and information about the U.S. legal system on a variety of subjects. Musk replied that the people Greenspan mentioned “actively harassed” and, in the case of Hothi, “almost killed” Tesla employees. Musk further stated, “what was a sideswipe when Hothi hit one of our people could easily have been a death with 6 inches of difference.” Greenspan published the email on Twitter, leading Hothi to file a defamation suit in California state court.

Musk claimed the anti-SLAPP statute applied because his email related to a matter of public interest – Tesla’s manufacturing operation and technological capabilities, how Tesla and Musk treat critics, and the “$TSLAQ group” ($TSLAQ group is an anonymous collective of short-sellers and skeptics criticizing Tesla and Musk). The appellate panel, like the trial court, was unpersuaded by Musk’s argument that the anti-SLAPP statute applied to this dispute stating the law “demands some degree of closeness between the challenged statements and the asserted public interest.” Musk’s statements of Hothi actively harassing and almost killing a Tesla employee did not involve Tesla’s technology or operations, Musk and Tesla’s treatment of critics, or the alleged $TSLAQ group. Ultimately, Musk’s statements must somehow contribute to public debate. It is “not enough” that his statements refer to “a subject of widespread public interest.”

The panel also rejected Musk’s claim that the exchange furthered the debate regarding Tesla’s operations by highlighting Hothi’s “unreliable and improper methods for obtaining his supposed information.” The panel reiterated the lack of a “functional relationship” between the statements about Hothi’s misconduct and alleged issues of public interest identified by Musk.

Hothi is represented by D. Gill Sperlein of The Law Office of D. Gill Sperlein.

Musk is represented by Michael T. Lifrak of Quinn Emanuel Urquhart & Sullivan LLP.

The case is Hothi v. Musk, case number A162400, in the State of California Court Of Appeal, First Appellate District.

* Lowe & Associates (“The Firm”) is an entertainment and business law firm located in Beverly Hills, California. The firm has extensive experience handling cases involving defamation law having provided top-quality legal services to its clients since 1991. The Firm is recognized for its many achievements, including successfully litigating many high-profile cases.

Find us at our website at www.LoweLaw.com

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