Elon Musk's No Stranger To Lawsuits. Check Out The Most Talked About Cases So Far
Have a look at the timeline of the top 10 cases that Elon Musk has faced head-on till now.
The conflict escalated between Elon Musk and Brazil on Sunday when a Supreme Court judge opened an inquiry into the billionaire. This came after Musk declared his intention to reinstate accounts on the social media platform X, which the judge had previously ordered to be blocked. Musk, the owner of X and a proponent of free speech, challenged Justice Alexandre de Moraes' ruling to block specific accounts. He argued that X, previously known as Twitter, would remove all restrictions, considering them unconstitutional, and called for Moraes' resignation.
Elon Musk is a man who is no stranger to lawsuits though. He has faced numerous cases against him and against the companies that he owns. Let us have a look at the top 10 cases that the tech billionaire has encountered so far.
Musk V. Eberheardm Founders Dispute (2009)
The company's founding led to a lawsuit that was eventually settled out of court. On May 26, 2009, Eberhard initiated legal action against Tesla and Musk, citing slander, libel, and breach of contract. Musk responded with a detailed blog post containing original source documents such as emails among senior executives, aiming to prove that Eberhard was dismissed by Tesla's board of directors. A judge dismissed Eberhard's claim of being one of only two founders. Tesla responded with a statement affirming its belief in a collective of founders, including Elon Musk, who played a significant role in Tesla's creation from its inception.
Sexual Harassment Cases At Tesla & SpaceX (From Inception Till Now)
A number of cases regarding sexual harassment have been filed by Tesla and SpaceX employees. A civil rights complaint by former employees has accused SpaceX of fostering a culture of discrimination, crude sexual humour, and harassment, as reported by The Guardian. Managers at Elon Musk's company allegedly promoted a frat-style atmosphere where such behaviour was common.
Lawsuits alleging sexual harassment were filed by six female employees at the Fremont factory and service centre against the company in December 2021. As of March 2024, these cases remain unresolved.
Olivier Chaine V. Tesla Energy Op (2020)
In a legal filing from 2020, a customer of Tesla Solar made allegations against the company, claiming that it employed "bait-and-switch financing" tactics by misrepresenting the solar-financing agreement as "a massive loan" to credit agencies, consequently negatively impacting the customer's credit rating. The case was directed to arbitration in April 2021. As of May 2023, the arbitration process for the case was ongoing and had not reached a resolution.
Steven Hankes V. Tesla (2020)
In November 2020, Steven Henkes, a former Tesla employee, initiated a lawsuit claiming that Tesla terminated him as a form of retaliation for voicing safety concerns regarding "unacceptable fire risks" in the company's solar installations. Incidents of Tesla solar installations catching fire were reported at seven Walmart locations and an Amazon warehouse. The Securities and Exchange Commission (SEC) confirmed in September 2021 that it is actively investigating the whistleblower complaint made by Henkes in 2019. As of March 2024, the case remains unresolved.
Tesla Autopilot Car Crash Injuring 5 Police Officers (2021)
In September 2021, five police officers filed a complaint partly against Tesla regarding a crash involving Autopilot that caused severe injuries to them. The plaintiffs' main goal is to compel Tesla to openly acknowledge and promptly address the known flaws in its Autopilot technology. The next significant trial date is scheduled for August 5, 2024, as of March 2024.
The officers are seeking damages for injuries and permanent disabilities. The lawsuit lists damages in excess of $1,000,000, with maximum damages of $20,000,000.
Gharrity V. Musk (2021)
Musk's unpredictable tweets and the Tesla directors' inability to ensure his compliance with the SEC settlement have resulted in significant financial losses for shareholders, amounting to billions of dollars. The complaint highlighted numerous posts by Musk on Twitter, such as his comment that Tesla's stock price was "too high," leading to a market value drop of over $13 billion for Tesla.
Chase Gharrity, the plaintiff, argued that Musk's actions and the directors' failure to act have caused considerable financial harm and breached their fiduciary duties, necessitating damages to be paid to Tesla, based in Palo Alto, California.
Fair Employment And Housing Racism Suit (2022)
In February 2022, the California Department of Fair Employment and Housing (DFEH) filed a lawsuit against Tesla, alleging discrimination against its Black employees. This action followed numerous complaints from Tesla workers and DFEH's findings of racial segregation at Tesla's Fremont factory, where Black workers reportedly faced racial slurs and discrimination in various aspects like job assignments, discipline, pay, and promotions, leading to a hostile work environment.
In response to the lawsuit, Tesla posted a blog in February 2022, expressing plans to request a pause in the case and implement measures to ensure fair consideration of facts and evidence.
In August 2022, Tesla's petition to the California Office of Administrative Law, claiming insufficient investigation by DFEH prior to the lawsuit, was declined. As of March 2024, the legal matter remains unresolved.
Dogecoin Racketeering Lawsuit (2022)
In June 2022, a high-profile class action lawsuit was filed against Elon Musk, Tesla, and other entities associated with him, alleging their involvement in a complex scheme allegedly designed to manipulate the price of Dogecoin, a popular cryptocurrency. The lawsuit sought substantial damages amounting to $258 billion. Subsequently, in June 2023, an amended complaint was introduced, adding an accusation of insider trading against Musk.
This accusation stemmed from Musk's sale of Dogecoin valued at $124 million shortly after he posted a tweet featuring the Dogecoin logo. This tweet notably led to a significant 30 per cent surge in the cryptocurrency's value. The legal matter, which has drawn substantial attention and speculation, remains unresolved as of the latest update in March 2024.
Twitter V. Musk (2023)
Elon Musk was ordered by a U.S. judge to face most of a lawsuit claiming he defrauded former Twitter shareholders last year by waiting too long to disclose that he had invested in the social media company, which he later bought and renamed X. In a decision made public on Monday, U.S. District Judge Andrew Carter said shareholders in the proposed class action could try to prove that Musk intended to defraud them by waiting 11 days past a U.S. Securities and Exchange Commission deadline to reveal he had bought 5% of Twitter's shares.
Musk V. OpenAI (2024)
Musk filed a suit against OpenAI in a California court in March. In the lawsuit, the billionaire alleged that Altman and other executives had “breached the founding agreement” of the company by pursuing private commercial success rather than working for the benefit of humanity. His suit read, “Mr Altman caused OpenAI to radically depart from its original mission.”
Musk's legal filing comprises a comprehensive narrative detailing the inception of OpenAI and his concerns regarding AI's societal risks. Yet, at its heart, the lawsuit centres on Musk's claim that OpenAI violated an initial pact to disseminate its technology for public benefit and transitioned into a primarily profit-driven entity after securing substantial investment from Microsoft. OpenAI pushed back by presenting emails in which Musk was in agreement of keeping the source codes private.
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