Tesla CEO Elon Musk won’t be subject to a gag order in the court case over his infamous “Funding secured” tweets, but a federal judge confirmed that the jury will be told Musk’s tweets were false. District Judge Edward Chen denied the gag order requested by lead plaintiff Glen Littleton in a ruling issued Wednesday, in part because of the instructions Chen plans to issue to the jury.
“[T]hough ‘jury instructions are often an ineffective remedy,’ the Court finds that unlikely to be true for the instant case where the jury will be told that the Court has already found that the August 2018 tweets were false and made with the requisite scienter [knowledge of wrongdoing],” Chen wrote.
Musk and Tesla face a class action lawsuit in US District Court for the Northern District of California over Musk’s August 2018 claim that he had secured funding to take Tesla private. Musk made the claim over several tweets, starting with one that said, “Am considering taking Tesla private at $420. Funding secured.”
Musk has continued arguing publicly that he actually did secure funding, despite previously acknowledging that no financial deal was completed and settling a lawsuit filed by the Securities and Exchange Commission.
Sealed ruling confirmed
Musk’s latest claim at a TED conference that “funding was actually secured” led the plaintiff to seek a temporary restraining order that would prohibit Musk “from speaking with the press, media, news, and other public outlets about this case or the underlying facts until the end of trial.” The plaintiff argued that “Musk’s extensive pretrial media interviews pose a clear danger and serious risk to a fair trial because they attract pretrial publicity, poison the jury pool, and influence the outcome on the eve of trial.”
Littleton’s filing also said that the court ruled Musk’s tweets about taking Tesla private “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.” Chen’s recent ruling on the falsity of Musk’s tweets was issued under seal and hasn’t been made public yet, but Chen’s statement about the planned jury instructions essentially confirmed Littleton’s description.
Chen also confirmed that previous ruling in the introduction to his latest one:
Mr. Littleton believes that a TRO [temporary restraining order] is necessary based on recent comments made by Mr. Musk during a TED Talk held on April 14, 2022. During the talk, Mr. Musk stated that funding had been secured to take Tesla private back in July-August 2018. Mr. Musk made these comments after the Court issued its summary judgment order, which found that Mr. Musk’s tweets from August 2018—claiming, e.g., that funding was secured—were in fact false and made with the requisite scienter.