Judge who owns Tesla stock greenlights X lawsuit against critics
A lawsuit aimed at punishing critics of Elon Musk’s X will go forward, thanks to a ruling from a judge with a financial interest in Musk’s success.
On Thursday, Judge Reed O’Connor denied a motion to dismiss X’s lawsuit against Media Matters For America (MMFA). The suit was filed in Texas last year and alleges that MMFA should be held legally liable for negative reporting that caused companies to pull ads from X. O’Connor dismissed objections that it was filed in a state where neither X nor MMFA is headquartered, saying the fact that MMFA “targeted” two X Texas-based advertisers — Oracle and AT&T — by mentioning them in articles and interviews is sufficient. (X is based in California, though its current San Francisco office will soon close and Musk has discussed moving to Texas.)
O’Connor also determined that X’s claims had enough merit to proceed in court — which is, to put it gently, concerning.
Unlike your standard libel lawsuit, X doesn’t say MMFA made a factually incorrect claim; it outright admits that X served ads against racist or otherwise offensive content. Instead, it argues that this situation is rare and the authors “deliberately misused the X platform to induce the algorithm to pair racist content with popular advertisers’ brands.” What constitutes misuse of a platform? Using accounts that had been active for more than a month, following the accounts of racists and major brands, and “endlessly scrolling and refreshing” to get new ads. In other words, X isn’t suing MMFA for lying — it’s suing them for seeking out bad things about a business and not reporting those things in a sufficiently positive light.
This is a painfully tortured argument aimed at establishing that private citizens pushing private businesses to avoid buying ads on a website is illegal censorship. Contra numerous promises that Musk is a “free speech absolutist,” it’s leaning on the legal system to shut down criticism instead of simply answering it with more facts. The ruling doesn’t technically agree with X’s claims; it says MMFA presents a “compelling alternative version” of events by pointing out it’s not lying. But O’Connor says it’s not his job to “choose among competing inferences,” so both versions can get argued at a later stage. MMFA declined to comment on the ruling.
Drawing a weak case out is an unmitigated win for X and Musk, who have effectively infinite legal resources. It’s a win for the Musk-favored strategy of forum shopping. It’s a loss for MMFA, which laid off staffers in the wake of this suit and two equally specious investigations by Republican state attorneys general sympathetic to Musk, both of which have been blocked by other judges.
It’s also coming a few weeks after NPR reported that O’Connor holds between $15,001 and $50,000 worth of stock in Tesla, one of Musk’s other companies. The judge recused himself from a lawsuit Musk filed against advertisers who stopped placing ads on X but apparently because he owned stock in one of those advertisers. O’Connor (who benefits when Musk’s famously intertwined network of companies prospers) flatly dismissed the argument that Musk (who owns X) or Tesla (which, according to a separate lawsuit, sent “volunteers” to moonlight at X) has any meaningful legal connection to X.
It’s a striking contrast with the outcome of yet another lawsuit that X filed against its critics. In California, Judge Charles Breyer dismissed a complaint against the Center for Countering Digital Hate, where X used different but equally tortured legal reasoning to attack claims that it wasn’t addressing hateful conduct. “Although X Corp accuses CCDH of trying ‘to censor viewpoints’ … it is X Corp that demands ‘at least tens of millions of dollars’ in damages — presumably enough to torpedo the operations of a small nonprofit — because of the views expressed in the nonprofit’s publications,” it reads, in an observation that could apply equally to MMFA. Elsewhere, the judge is even blunter: “this case is about punishing the defendants for their speech.”