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All the major legal battles Elon Musk and his companies are facing

Elon Musk and his companies are embroiled in dozens of lawsuits, ranging from fatal crashes blamed on Tesla Inc.’s Autopilot system to civil rights complaints over the treatment of employees.

Tesla’s board and Musk were hit June 6 with another suit over his $56 billion pay package that a judge voided in January — ahead of a June 13 shareholder proxy vote on whether the company should resurrect it.

Musk, who has a history of sparring with regulators, also faces government investigations into his companies that could result in more lawsuits or even criminal prosecutions.

Elon Musk

Bloomberg News has identified more than half a dozen ongoing legal fights in which Musk is a defendant or a plaintiff, as well as about a dozen others involving his companies. Here’s a breakdown of the major legal battles faced by the world’s third-richest person and his companies:

Tesla Inc

Autopilot Crashes, California and Florida state and federal courts

The electric-car maker faces at least half a dozen wrongful death claims over fatal crashes blamed on its Autopilot driver-assistance system.

At stake: A finding that Tesla is culpable for deaths would imperil Musk’s quest to lead the way for fully self-driving cars to cruise down busy city streets and freeways.

Race Discrimination, California state and federal courts

Tesla faces multiple suits over allegations of racism on its production floor filed by workers, California’s civil rights department and the US Equal Employment Opportunity Commission.

At stake: The automaker could have to pay damages and foster a more inclusive environment.

Pay Package, Delaware Chancery Court

Musk is poised to appeal a judge’s decision voiding his Tesla pay package as excessive, while Tesla plans to ask shareholders at the company’s June 13 annual meeting to ratify the same compensation plan approved six years ago. A new suit alleges Musk is trying to strong-arm shareholders into resurrecting the record-setting pay package through a proxy vote.

At stake: Musk has suggested the largest-ever executive pay package is necessary for him to have “the right amount of voting influence at Tesla,” so he can grow it to be a leader in artificial intelligence and robotics.

Anti-Union Tweet, federal appeals court in New Orleans

A 17-judge panel is reviewing a finding by the National Labour Relations Board that Musk illegally threatened workers with the loss of benefits if they unionized.

At stake: A ruling condemning the CEO’s commentary on social media would be a comeuppance for Musk and a morale boost for labour activists who are trying to organize Tesla workers.

Drug Use, Delaware Chancery Court

A shareholder suit alleges that Musk’s use of illicit recreational drugs threatens Tesla’s business, including by apparently influencing his sometimes erratic behavior online.

At stake: The lawsuit seeks closer supervision of Musk’s social media posts about Tesla, which are already supposed to be vetted under an agreement he reached in 2018 with the Securities and Exchange Commission and unsuccessfully challenged all the way to the US Supreme Court.

False Advertising, California federal courts

Tesla faces numerous lawsuits claiming misrepresentations to consumers, including that the company inflated how far its electric vehicles drive on a charge and over-hyped their driving-assistance capabilities.

At stake: The lawsuits take aim at features Tesla promotes to distinguish itself from competitors and are core to the company’s market value.

JPMorgan Stock Warrants, New York federal court

JPMorgan sued Tesla seeking a $162 million payment related to a series of stock warrant transactions dating back to 2014, and Tesla later countersued the bank.

At stake: If the case goes to trial, Musk’s infamous 2018 tweet about taking Tesla private that is central to the dispute will once again haunt the company.

‘Insider’ Sale of $7.5 Billion in Stock, Delaware Chancery Court

A Tesla shareholder alleges Musk had inside knowledge of a miss on production and delivery numbers that the company was facing when he sold more than $7.5 billion in stock in 2022 to help pay for his acquisition of Twitter Inc.

At stake: The investor wants Musk to be ordered return the profit from his allegedly improper trading to the company.

X Corp

Employee Pay, California state and federal courts

X Corp., formerly Twitter, has been accused in multiple suits of labor and workplace violations in the wake of mass layoffs after Musk’s 2022 acquisition, including reneging on promises to pay severance to executives and thousands of workers.

At stake: Collectively, the lawsuits seek hundreds of millions of dollars in back pay.

Unpaid Bills, California state courts

X has been accused in multiple suits of failing to pay vendors and landlords after Musk took over the company and set about cutting operating costs.

At stake: Collectively, the complaints cite millions of dollars of unpaid expenses.

Twitter Takeover, California federal court

Musk faces an investor lawsuit claiming he fueled uncertainty about his proposed buyout in an effort to drive down the platform’s stock price.

At stake: The investors seek unspecified damages over stock value losses.

Content Moderation, California federal court

X has sued non-profits that have issued reports criticizing toxic posts on the platform and faulting the company for lax content moderation.

At stake: X already lost one suit, but if it can prove its claim in the other case that a series of published articles are false and malicious attacks aimed at driving advertisers away, Musk’s company could win monetary damages.

Spacex Corp

Retaliatory Firings, California

SpaceX was accused by the NLRB of illegally firing eight employees over an internal letter sharply critical of Musk.

At stake: The company could be forced to reinstate the workers or provide back pay, but the US labour board generally can’t hold executives personally liable for alleged wrongdoing or issue any punitive damages.

Sexual Harassment, California state court

The eight fired SpaceX employees who complained to the NLRB have also sued Musk over the alleged retaliation as well as sexual harassment. They claim Musk brought into the workplace “vile sexual photographs, memes, and commentary that demeaned women and/or the LGBTQ+ community.”

At stake: Unlike the NLRB complaint, the lawsuit could hold Musk personally liable for alleged wrongdoing and result in punitive damages.

US Labour Board, California federal court

SpaceX sued the NLRB to have the agency’s structure for in-house administrative proceedings declared unconstitutional after the board filed its complaint over fired SpaceX employees.

At stake: A victory for SpaceX could hobble the authority of the federal labour rights watchdog.

Gender Discrimination, California state court

SpaceX faces multiple gender-discrimination suits, including allegations that female employees are underpaid relative to men and subject to sexual harassment.

At stake: A loss for the company would hurt its reputation and might discourage talented female engineers and managers from seeking employment.

Wildlife Area LaunchpadDC federal court

SpaceX’s use of a rocket launchpad neighboring a Texas wildlife refuge drew a lawsuit from environmental groups over how the site won approval from the Federal Aviation Administration.

At stake: The environmental scrutiny could delay future licensing for the company.

Trespassing, Texas state court

The maker of the popular game Cards Against Humanity claimed SpaceX trespassed on and damaged land it owns on the border of Texas and Mexico. The property was purchased in 2017 as part of the game developer’s campaign against then-President Donald Trump’s plan for building a border wall.

At stake: Cards Against Humanity is seeking $15 million. The company said it “will also accept Twitter.com as compensation.”

Miscellaneous

Musk v. OpenAI, California state court

Musk sued OpenAI and its Chief Executive Officer Sam Altman for allegedly putting profit ahead of humanity in violation of the startup’s founding mission. But Musk dropped the litigation on June 11.

At stake: Musk voluntarily dismissed the lawsuit, which lawyers said was a long-shot, one day before OpenAI was scheduled to argue for its dismissal before a judge. Musk, who tends to see court fights through to the bitter end rather than conceding, reserved the right to revive his claims.

Fired Disney Actor, California federal court

Musk is funding a lawsuit against Walt Disney Co. by The Mandalorian actor Gina Carano over controversial statements she posted on X.

At stake: As a “free-speech absolutist,” Musk has promised to pay legal fees for people fired from jobs for statements they made on the platform.

‘False Flag’ Defamation, Texas state court

Musk faces a defamation suit for allegedly promoting a conspiracy theory that falsely identified a California Jewish man as involved in a scheme to discredit right-wing groups by posing as a neo-Nazi street brawler.

At stake: Ben Brody, who filed the lawsuit, is seeking at least $1 million in damages.

Government investigations

Tesla Self-Driving 

The Justice Department and Securities and Exchange Commission launched investigations in 2021 and 2022 about whether Tesla made misleading claims about its vehicles’ purported self-driving capabilities.

At stake: The probes could result in a regulatory enforcement action or criminal charges against Tesla.

Glass House 

The SEC and Justice Department last year started investigating whether Tesla improperly used company funds to build a glass house in Texas and whether Musk was involved, the Wall Street Journal reported.

At stake: The probes could result in a regulatory enforcement action over securities law violations or criminal charges against Tesla.

Twitter Stock Purchases

The SEC is seeking information about Musk’s 2022 purchases of Twitter stock and statements he made about his investments ahead of his $44 billion purchase of the social media platform.

At stake: The probe could lead to an enforcement action over securities law violations and possible fines for Musk.

X Privacy

The US Federal Trade Commission is monitoring X over its compliance with a May 2022 settlement over data privacy practices reached prior to Musk’s takeover.

At stake: Violations of the settlement could lead to millions of dollars in fines or even criminal charges against individuals.

© 2024 Bloomberg

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