Media Matters Isn't Saying Judge Reed O'Connor Is Conflicted. They're Just Saying That He Stands To Financially Benefit From Twitter SLAPP Suit.
Subtle.
(Photo by Justin Sullivan/Getty Images)
Media Matters for America (MMFA) filed a motion this afternoon hinting that Judge Reed O’Connor, a GWB-appointee who out-Trumps the Trumpers, should recuse himself from litigation involving Ex-Twitter (ET).
The unsubtle suggestion came in a motion to compel ET to list Tesla as an interested party in the lawsuit filed the day after Musk vowed to go “thermonuclear” on the media company for tortious journalisming him with mean, true words.
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“Plaintiff X Corp.’s certificate of interested persons is deficient because it fails to disclose that Tesla and its shareholders have a financial interest in this case,” MMFA’s megawatt legal team from Gibson Dunn and the Elias Law Group wrote, noting that Elon Musk has “blurred the lines” between his many companies, even while making himself the face of the broader brand as a whole.
At Musk’s direction, X has routinely used Tesla employee time, resources, and even office space as its own—with documented consequences to Tesla stock. Because of this commingling, and in light of the public’s reasonable perception that both X and Tesla are stand-ins for Musk, Tesla’s financial interest in this lawsuit is clear. X’s victory or defeat will necessarily impact Tesla, including the price of its stock.
Then MMFA went in for the kill.
It is important for this Court to be aware of Tesla’s financial interest in this case because the Court’s most recently available disclosures indicate that it may own between $15,001 and $50,000 of Tesla stock. Throughout this litigation, the Court will be called upon to make decisions that will impact Tesla’s stock price. For instance, any decisions regarding Defendants’ outstanding request for Musk’s deposition—including resolution of objections, whether any portions of the transcript may be sealed, and whether to allow it in the first place—are likely to have an impact on Tesla stock, as Musk’s testimony will shed light on Musk’s management choices, public statements, private views, and the division of his time and allocation of resources between Tesla and X.
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In a throat-clearing footnote, the media outlet added that “Defendants have not, at this juncture, filed a motion to recuse under 28 U.S.C. § 455 because the oversight at issue is X’s failure to notify the Court of Tesla’s financial interest, disclosure of which would have enabled the Court to make a recusal decision sua sponte.”
As if the judge didn’t know damn well that literally anything involving Elon Musk affects Tesla’s stock price. (The case was assigned to Judge Mark Pittman previously, but he recused for unspecified reasons.)
The defendants came out guns blazing here, using the ample ammo provided by the world’s most famous ketamine aficionado. Musk declared himself “Technoking” of Tesla, whose own SEC disclosures point to the risk to shareholders if Musk needs to sell more Tesla shares to finance other ventures, as he did when he purchased ET a year ago. And if Musk’s debt load doesn’t drive down Tesla’s share price, his big mouth may well do it anyway, particularly if and when he’s forced to go under oath.
“Musk’s testimony about matters of concern to Tesla’s shareholders—including for example, the extent to which his time and attention are devoted to X at the expense of Tesla—will be central to this case,” MMFA’s lawyers wrote, adding that “Defendants intend as part of their defense to establish that Musk’s behavior and business decisions caused advertisers’ flight from the X platform. Defendants’ evidence to that effect will impeach Musk’s business judgment with respect to all his businesses, including Tesla.”
They go on to quote about a dozen articles linking Tesla’s stock price to Musk’s erratic responses on and about ET — although oddly they fail to note that Tesla removed the Disney+ app from its vehicles about five minutes after Disney yanked its ads from ET and Musk told Disney CEO Bob Iger to “go fuck yourself.”
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Elon Musk’s adventures in judge shopping have thus far been a rousing success. After getting his ass kicked in a SLAPP suit filed in California, Space X sued the National Labor Relations Board in Texas — over a dispute where the incident in question and all the parties reside in California. When Judge Rolando Olvera ruled that the case should be transferred, the Eight Circuit ordered the trial judge to un-transfer it.
Then when MMFA correctly pointed out that major companies were having their ads run next to explicitly Nazi content, ET filed this claim in the Northern District of Texas, where it wound up in front of the one jurist who wouldn’t summarily bounce it for having zero relationship to the venue and the court’s lack of personal jurisdiction over MMFA, which operates out of DC, or its reporter Eric Hananoki, a Maryland resident. The court has yet to rule on the motion to dismiss for lack of personal jurisdiction, instead allowing ET to proceed with discovery — and subject MMFA to the punishing expense of litigation — before deciding a threshold matter.
The judge also refused to approve a stipulation between the parties protecting confidential discovery, although he may have done that out of general cussedness, not bias toward one side — who can say!
Oh, you sat through CivPro and heard this can’t happen? LOL, suckers!
X Corp. v. Media Matters for America [Docket, via Court Listener]
Liz Dye lives in Baltimore where she produces the Law and Chaos substack and podcast.
