Tesla Model 3 on display during LA Auto Show at the Los Angeles Convention Center on Nov. 30, 2017. (Photo: Betto Rodrigues/Shutterstock.com)Tesla Gets Early Win in 'Non-Twitter' Securities Suit
U.S. District Judge Charles Breyer specified early in his order granting the electric car company's motion to dismiss that the claims centered on missed production goals for Tesla's "Model 3" rather than Elon Musk's recent tweets.
August 28, 2018 at 02:47 PM
3 minute read
With plaintiffs lawyers hawk-eyeing Tesla Inc. over founder and CEO Elon Musk's recent Twitter activity—not to mention the SEC's reported interest in the tweets implying Musk had “go-private” financing lined up—the electric car maker got some welcome news Monday on the securities litigation front.
A federal judge in San Francisco granted a motion to dismiss filed by Tesla's lawyers at Fenwick & West related to claims the company misled investors about its ability to meet goals of producing 5,000 of its mass-market “Model 3″ per week by the end of 2017.
U.S. District Judge Charles Breyer of the Northern District of California, who specified early in Monday's order that his ruling applied to a “non-Twitter-related securities action,” wrote that “a firm's failure to meet projections is only actionable if the firm did not accompany those projections with meaningful qualifications.”
“Because plaintiffs fail to allege that defendants made any projections that were not so qualified, their claims fail,” Breyer wrote.
In their amended class action complaint, the lead plaintiffs lawyers—Laurence Rosen of The Rosen Law Firm in Los Angeles and Jacob Goldberg and Gonen Haklay in the firm's Jonestown, Pennsylvania, office—cited confidential former Tesla employees who claimed that Musk and other executives knew that the 5,000-vehicle-per-week goal was unrealistic long before the company reported in a October 2017 press release that it had fallen short because of “production bottlenecks.”
But Breyer agreed with Tesla's lawyers at Fenwick, who argued the company and officials had always accompanied the forward-looking goal with appropriate cautionary statements regarding the company's supply chain and the unprecedented ramp-up they were asking of their parts makers.
“That Tesla employees and suppliers may have disagreed with Tesla's own estimates of what was a realistic timeline does not make Tesla's estimates false, given that the market had access to the same factual information as those employees and suppliers,” Breyer wrote.
Breyer's order dismissed the case but offered the plaintiffs an opportunity to amend their complaint. Neither Rosen nor Goldberg responded to email messages asking if the plaintiffs intend to amend their claims.
Read the ruling:
|This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View All
Federal Judge Rejects Teams' Challenge to NASCAR's 'Anticompetitive Terms' in Agreement
Film Company Alleges Elon Musk, Tesla Used AI to Mimic 'Blade Runner' Scene
6 minute readTrending Stories
- 1What Are Forbidden Sexual Relations With Clients?
- 2AEDI Takeaways: Demystifying Hype, Changing Caselaw & Harvey’s CEO Talks State of Industry
- 3New England Law | Boston Announces New Dean
- 4Nordic Capital Plans to Acquire IP Management Solutions Provider Anaqua
- 5Criminalization of Homelessness Is Not the Solution
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250
