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TESLA INC.

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Tesla : boss Elon Musk wins defamation trial over his 'pedo guy' tweet

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12/06/2019 | 09:59pm EST
FILE PHOTO: Tesla CEO Elon Musk gestures during a conversation at the E3 gaming convention in Los Angeles

Tesla Inc boss Elon Musk emerged victorious on Friday from a closely watched defamation trial as a federal court jury swiftly rejected the $190 million claim brought against him by a British cave explorer who Musk had branded a "pedo guy" on Twitter.

The unanimous verdict by a panel of five women and three men was returned after roughly 45 minutes of deliberation on the fourth day of Musk's trial. Legal experts believe it was the first major defamation lawsuit brought by a private individual over remarks on Twitter to be decided by a jury.

The outcome was a triumph for Musk, whose mercurial behaviour in a number of instances last year came under close scrutiny from federal regulators and shareholders of Tesla, his Silicon Valley-based electric car manufacturer.

The jury's decision signals a higher legal threshold for challenging potentially libelous Twitter comments, said L. Lin Wood, the high-profile trial lawyer who led the legal team for the plaintiff, Vernon Unsworth.

"This verdict puts everyone's reputation at risk," Wood told reporters after the verdict was announced.

Other lawyers specializing in defamation agreed the verdict reflects how the freewheeling nature of social media has altered understandings of what distinguishes libel punishable in court from casual rhetoric and hyperbole protected as free speech.

Musk, 48, who had testified during the first two days of the trial in his own defence and returned to court on Friday to hear closing arguments, exited the courtroom after the verdict and said: "My faith in humanity is restored."

'TAKE IT ON THE CHIN'

Outside the courthouse, Unsworth, 64, said he was resigned to his defeat. "I accept the jury's verdict, take it on the chin and get on with my life."

Wood said his client went "toe to toe with a billionaire bully," echoing a phrase from his summation earlier in court, and indicated to reporters that an appeal was doubtful.

"It's not the verdict we wanted. But it's the end of the road and we now close this chapter," Wood said.

He said he nevertheless saw the lawsuit as meaningful in helping erase the stain he said Unsworth's reputation suffered.

During the course of the trial, Musk testified under oath that his use of the term "pedo guy" - slang for paedophile - was never meant to be taken literally, and he apologised to Unsworth for the comment from the witness stand.

The case stems from a public quarrel between Musk and Unsworth, a British diver who lives part-time in Thailand and gained fame for his leading role in coordinating the successful rescue of 12 boys and their soccer coach from a flooded cave in that country in July 2018.

Unsworth had chided Musk in a CNN interview for delivering a mini-submarine, which was never used, to the site of the Tham Luang Nang Non cave system. Unsworth called Musk's intervention a "P.R." stunt and said the high-tech entrepreneur should "stick his submarine where it hurts."

THREE TWEETS

Musk responded two days later on Twitter with three posts that became the basis of the defamation case. The first questioned Unsworth's role in the rescue, while the second said, "Sorry pedo guy, you really did ask for it."

The third tweet, in reply to a follower who asked Musk about the second tweet, said, "Bet ya a signed dollar it's true."

Wood said during his summation that Musk's tweets were akin to a "nuclear bomb" that would overshadow Unsworth's relationships and job prospects for years to come and urged jurors to teach the Tesla chief executive and SpaceX founder a lesson by awarding Unsworth $190 million, including $150 million in punitive damages.

Two days earlier, under questioning on the witness stand, Musk had estimated his net worth at $20 billion.

But the jury was apparently swayed by the arguments put forth by Musk's attorney, Alex Spiro, who said the tweets in question amounted to an off-hand insult in the midst of an argument, which no one could be expected to take seriously.

"In arguments you insult people," he said. "No bomb went off."

The defence also said Unsworth failed to demonstrate any harm from the Twitter comments and even tried to profit from his role in the rescue, which won him plaudits from the Thai and British governments.

U.S. District Judge Stephen Wilson had said the case hinged on whether a reasonable person would take Musk's Twitter statements to mean he was actually calling Unsworth a paedophile.

To win, Unsworth needed to show that Musk was negligent in publishing a falsehood that clearly identified the plaintiff and caused him harm. "Actual malice" on Musk's part, a high standard in defamation cases, did not need to be proven since the judge deemed Unsworth a private individual, not a public figure.

The trial revived discussion of Musk’s erratic behaviour in 2018, when he used Twitter to float a leveraged buyout proposal for Tesla that was scuttled, ultimately paying $20 million to settle a Securities and Exchange Commission complaint.

For most of 2019, Musk, who has nearly 30 million Twitter followers, has largely kept his public comments focussed on Tesla’s new models and improved profitability and on the technical progress of his aerospace company, SpaceX.

By Nichola Groom and Rachel Parsons

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Sales 2019 24 443 M
EBIT 2019 -141 M
Net income 2019 -802 M
Debt 2019 7 747 M
Yield 2019 -
P/E ratio 2019 -114x
P/E ratio 2020 235x
EV / Sales2019 4,08x
EV / Sales2020 3,28x
Capitalization 92 015 M
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NameTitle
Elon Reeve Musk Chief Executive Officer & Director
Robyn M. Denholm Chairman
Zachary Kirkhorn Chief Financial Officer
Kimbal Musk Director
Ira M. Ehrenpreis Independent Director
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