Hothi v. Musk Document 15

California Court of Appeals
Case No. A162400
Filed June 10, 2021

Appellant's appendix filed.: Appellant's Appendix Volume 5 of 8 Pages 391 - 537

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Page 1 No. AIN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST APPELLATE DISTRICT, DIVISION ONE
RANDEEP HOTHI,
Plaintiff-Respondent,
v.
ELON MUSK
On Appeal from the Superior Court for the County of Alameda
Hon. Julia Spain, Judge,
Case No. RGAPPELLANT’S APPENDIX
VOLUME V OF VIII, PAGES AA391 TO AA
ALEX SPIRO
(pro hac vice admission
pending)
QUINN EMANUEL URQUHART
& SULLIVAN, LLP
51 Madison Avenue, 22nd Floor
New York, NY Telephone: (212) 849-Facsimile: (212) 849-alexspiro@quinnemanuel.com
MICHAEL T. LIFRAK
(S.B. No. 210846)
JEANINE ZALDUENDO
(S.B. No. 243374)
QUINN EMANUEL URQUHART
& SULLIVAN, LLP
865 S. Figueroa Street, 10th Fl.
Los Angeles, CA Telephone: (213) 443-Facsimile: (212) 443-michaellifrak@quinnemanuel.com
Counsel for Defendant-Appellant Elon Musk
AA
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Defendant-Appellant.
Page 2 Randeep Hothi v. Elon Musk
First Appellate District Court of Appeal, Case No. A(Alameda County Superior Court Case No. RG20069852)
APPELLANT’S APPENDIX
CHRONOLOGICAL INDEX
Description
Date

Verified Complaint for Damages
and Demand for Jury Trial Filed
by Randeep Hothi
Defendant Elon Musk’s Answer
and Affirmative Defenses to the
Verified Complaint of Plaintiff
Randeep Hothi
Defendant Elon Musk’s Motion
to Strike the Complaint Pursuant
to Cal. Code. Civ. Proc. Section
425.16; Memorandum of Points
and Authorities in Support
Thereof
Declaration of Christine Leslie in
Support of Defendant Elon
Musk’s Motion to Strike the
Complaint Pursuant to Cal. Code.
Civ. Proc. Section 425.Declaration of Elon Musk in
Support of Defendant Elon
Musk’s Motion to Strike the
Complaint Pursuant to Cal. Code.
Civ. Proc. Section 425.Declaration of Tyler James in
Support of Defendant Elon
Musk’s Motion to Strike the



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Complaint Pursuant to Cal. Code.
Civ. Proc. Section 425.Declaration of Jeanine Zalduendo
in Support of Defendant Elon
Musk’s Motion to Strike the
Complaint Pursuant to Cal. Code.
Civ. Proc. Section 425.Defendant Elon Musk’s Request
for Judicial Notice in Support of
His Motion to Strike the
Complaint Pursuant to Cal. Code.
Civ. Proc. Section 425.16, and
Exhibits A-F thereto
Exhibit G (part 1) to Defendant
Elon Musk’s Request for Judicial
Notice in Support of His Motion
to Strike the Complaint Pursuant
to Cal. Code. Civ. Proc. Section
425.Exhibit G (part 2) to Defendant
Elon Musk’s Request for Judicial
Notice in Support of His Motion
to Strike the Complaint Pursuant
to Cal. Code. Civ. Proc. Section
425.Exhibits H-I to Defendant Elon
Musk’s Request for Judicial
Notice in Support of His Motion
to Strike the Complaint Pursuant
to Cal. Code. Civ. Proc. Section
425.Exhibits J-L to Defendant Elon
Musk’s Request for Judicial
Notice in Support of His Motion
to Strike the Complaint Pursuant
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to Cal. Code. Civ. Proc. Section
425.[Proposed] Order Granting
Defendant Elon Musk’s Motion
to Strike the Complaint Pursuant
to Cal. Code Civ. Proc. Section
425.Notice of Errata Regarding the
Signature Page to the Declaration
of Elon Musk’s Motion to Strike
the Complaint Pursuant to Cal.
Code Civ. Proc. Section 425.Plaintiff Randeep Hothi’s
Memorandum in Opposition to
Plaintiff Elon Musk’s Special
Motion to Strike
Declaration of Randeep Hothi in
Support of His Opposition to
Defendant’s Special Motion to
Strike
Plaintiff Randeep Hothi’s
Objections to Defendant’s
Evidence Submitted in Support of
Defendant’s Special Motion to
Strike
Reply in Support of Defendant
Elon Musk’s Motion to Strike the
Complaint Pursuant to Cal. Code
Civ. Proc. Section 425.Elon Musk’s Evidentiary
Objections to the Declaration of
Randeep Hothi
Defendant Elon Musk’s
Responses to Plaintiff Randeep
Hothi’s Evidentiary Objections
Page 5
Plaintiff Randeep Hothi’s
Response to Elon Musk’s
Evidentiary Objections to the
Declaration of Randeep Hothi
Order - Motion to Strike
Complaint Denied
Notice of Appeal
Appellant’s Notice Designating
Record on Appeal
Register of Actions and
Certificate
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Page 6 Randeep Hothi v. Elon Musk
First Appellate District Court of Appeal, Case No. A(Alameda County Superior Court Case No. RG20069852)
APPELLANT’S APPENDIX
ALPHABETICAL INDEX
Description
Date

Appellant’s Notice Designating
Record on Appeal
Declaration of Christine Leslie in
Support of Defendant Elon
Musk’s Motion to Strike the
Complaint Pursuant to Cal. Code.
Civ. Proc. Section 425.Declaration of Elon Musk in
Support of Defendant Elon
Musk’s Motion to Strike the
Complaint Pursuant to Cal. Code.
Civ. Proc. Section 425.Declaration of Jeanine Zalduendo
in Support of Defendant Elon
Musk’s Motion to Strike the
Complaint Pursuant to Cal. Code.
Civ. Proc. Section 425.Declaration of Randeep Hothi in
Support of His Opposition to
Defendant’s Special Motion to
Strike
Declaration of Tyler James in
Support of Defendant Elon
Musk’s Motion to Strike the
Complaint Pursuant to Cal. Code.
Civ. Proc. Section 425.


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Defendant Elon Musk’s Answer
and Affirmative Defenses to the
Verified Complaint of Plaintiff
Randeep Hothi
Defendant Elon Musk’s Motion
to Strike the Complaint Pursuant
to Cal. Code. Civ. Proc. Section
425.16; Memorandum of Points
and Authorities in Support
Thereof
Defendant Elon Musk’s Request
for Judicial Notice in Support of
His Motion to Strike the
Complaint Pursuant to Cal. Code.
Civ. Proc. Section 425.16, and
Exhibits A-F thereto
Defendant Elon Musk’s
Responses to Plaintiff Randeep
Hothi’s Evidentiary Objections
Elon Musk’s Evidentiary
Objections to the Declaration of
Randeep Hothi
Exhibit G (part 1) to Defendant
Elon Musk’s Request for Judicial
Notice in Support of His Motion
to Strike the Complaint Pursuant
to Cal. Code. Civ. Proc. Section
425.Exhibit G (part 2) to Defendant
Elon Musk’s Request for Judicial
Notice in Support of His Motion
to Strike the Complaint Pursuant
to Cal. Code. Civ. Proc. Section
425.Exhibits H-I to Defendant Elon
Musk’s Request for Judicial
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Notice in Support of His Motion
to Strike the Complaint Pursuant
to Cal. Code. Civ. Proc. Section
425.Exhibits J-L to Defendant Elon
Musk’s Request for Judicial
Notice in Support of His Motion
to Strike the Complaint Pursuant
to Cal. Code. Civ. Proc. Section
425.Notice of Appeal
Notice of Errata Regarding the
Signature Page to the Declaration
of Elon Musk’s Motion to Strike
the Complaint Pursuant to Cal.
Code Civ. Proc. Section 425.Order - Motion to Strike
Complaint Denied
Plaintiff Randeep Hothi’s
Memorandum in Opposition to
Plaintiff Elon Musk’s Special
Motion to Strike
Plaintiff Randeep Hothi’s
Objections to Defendant’s
Evidence Submitted in Support of
Defendant’s Special Motion to
Strike
Plaintiff Randeep Hothi’s
Response to Elon Musk’s
Evidentiary Objections to the
Declaration of Randeep Hothi
[Proposed] Order Granting
Defendant Elon Musk’s Motion
to Strike the Complaint Pursuant
to Cal. Code Civ. Proc. Section
425.16
Page 9
Register of Actions and
Certificate
Reply in Support of Defendant
Elon Musk’s Motion to Strike the
Complaint Pursuant to Cal. Code
Civ. Proc. Section 425.Verified Complaint for Damages
and Demand for Jury Trial Filed
by Randeep Hothi
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Page 10 Document received by the CA 1st District Court of Appeal.
Exhibit Number
EXHIBIT H
AA400
Page 11 Law Office of D Gill Sperlein
Attn: Sperlein, D Gill
345 Grove Street
San Francisco, CA
Boersch & lllovskv LLP
Attn: Illovsky, Eugene
1611 Telegraph Avenue
Suite Oakland, CA
Superior Court of California, County of Alameda
Hayward Hall of Justice
Tesla, Inc.
No. RGPlaintiff/Petitioner( s)
Order
VS.
Motion for Attorney Fees
Denied
Hothi
The Motion for Attorney Fees filed for Randeep Hothi was set for hearing on 10/01/2019 at 09:00 AM
in Department 511 before the Honorable Jeffrey Brand. The Tentative Ruling was published and was
contested.
The matter was argued and submitted, and good cause appearing therefore,
IT IS HEREBY ORDERED THAT:
The Motion of Hothi for fees under CCP 128.5 is DENIED.
BACKGROUND
This case is an action under CCP 527.6 and CCP 527.8 for civil harassment action and workplace
harassment.
Petitioner Tesla alleged that respondent Randeep Hothi engaged in violence, threats of violence or a
course of conduct warranting the issuance of a permanent order. Tesla's petition is based on two
incidents: (1) an incident on February 21, 2019 in the parking lot of Tesla's Fremont facility wherein
respondent "hit Tesla's security employee ... with his car" and then "fled the scene" in a "reckless
manner" as he left the parking lot and (2) an incident on April 6, 2019 on public roads wherein
respondent "stalked harassed and endangered" a Tesla Model 3 automobile engaged in autonomous
driving testing.
On April 19, 2019, Tesla filed the action. On April 19, 2019, the court entered a temporary restraining
order and set a hearing for May 7, 2019. Hothi requested a continuance of the hearing to pennit time
for discovery. The court granted the request and re-set the hearing to May 21, 2019. On May 21,
2019, the court requested briefing on whether the court can permit discovery and also continued the
matter to July 26, 2019. On July 18, 2019, the Court issued an order clarifying what discovery was
required.
On July 19, 2019, Tesla dismissed the action.
On August 13, 2019, Hothi filed a motion for fees under CCP 128.5.
ORDER
Order
AA
Document received by the CA 1st District Court of Appeal.
Defendant/Respondent( s)
(Abbreviated Title)
Page 12 The Motion ofHothi for fees under CCP 128.5 is DENIED. Tesla's motion for fees is also DENIED.
CCP 128.5(a) states: "A trial court may order a party, the party's attorney, or both, to pay the
reasonable expenses, including attorney's fees, incurred by another party as a result of actions or tactics,
made in bad faith, that are frivolous or solely intended to cause unnecessary delay."
An objective standard applies in determining whether an action was "frivolous or solely intended to
cause unnecessary delay." CCP 128.5(b)(l) states" "Frivolous" means totally and completely without
merit or for the sole purpose of harassing an opposing party." "A motion is totally and completely
without merit for purposes of a finding of frivolousness under section 425.16, subdivision (c)(l) or
section 128.5 only if any reasonable attorney would agree that the motion is totally devoid of merit. ...
This is an objective standard." (Chitsazzadeh v. Kramer & Kaslow (2011) 199 Cal.App.4th 676, 683684.)
Hothi has not demonstrated that the petition was frivolous. The petition was not totally and completely
without merit. The petition alleged the incident on February 21, 2019 in the parking lot of Tesla's
Fremont facility and the incident on April 6, 2019 on public roads. Those are arguably serious
incidents that warranted a serious response.
An objective standard applies in determining vvhether an action vvas "made in bad faith." Subjective bad
faith concerns the motives of the person against whom the sanction is sought.
The evidence does not show that Tesla filed the petition in bad faith.
At the hearing on 10/11/19, Hothi argued that the delay between the first incident on 2/21/19 and the
filing on 4/19/19 suggests bad faith. To the contrary, the fact that Tesla did not file the petition after
the first incident on February 21, 2019, and waited to file a petition until after the second incident on
April 6, 2019, indicates to the court that Tesla deliberated after the first incident and did not decide to
take action until the second incident.
At the hearing on 10/11/19, Hothi argued that Tesla had dispositive evidence showing that Hothi was
not responsible, Tesla never intended to reveal the evidence, and Tesla was trying to generate negative
press about Hothi by filing this action. The evidence does not show that Tesla prosecuted the petition in
bad faith. Tesla had a reasonable basis to file the action, participated in briefing the discovery motion,
and then dropped the case. The voluntary dismissal of a case, without more, does not support an
inference that the case was initiated and prosecuted in bad faith.
Tesla seeks fees based on the assertion that this motion is frivolous and brought in bad faith. The court
finds that motion has no merit, but given the history between Hothi and Tesla, the court cannot find that
it was frivolous and brought in bad faith.
Dated: 10/28/Judge Jeffrey Brand
Order
AA
Document received by the CA 1st District Court of Appeal.
Hothi has not demonstrated that Telsa filed and prosecuted the petition in bad faith. Hothi presents
evidence that he criticized Tesla, which supports an inference that Tesla was wary and suspicious, if not
antagonistic, towards Hothi. But there is no evidence of bad faith.
Page 13 SHORT TITLE:
CASE NUMBER:
RG
Tesla, Inc. VS Hothi
ADDITIONAL ADDRESSEES
Document received by the CA 1st District Court of Appeal.
Sideman & Bancroft LLP
Attn: Alinder, Zachary J
One Embarcadero Center
Twenty-Second Floor
San Francisco, CA 94111-3
Order
AA403
Page 14 Document received by the CA 1st District Court of Appeal.
EXHIBIT I
AA404
Page 15 I
POS-H0RNC\ 0 11 f'~RT'I 1111 HOUT ,\TTQRNEY cN.inoss/
FOR COURT USE ONLY
L). Gill Sr,c-rlr.:i
1Til l'

Ll\\ Office or D. Gill Spcrlcin
Grow Street. S;111 Francisco, CA 94
13~
TELEPHONE NO
-+ I 5--W-+-66 I
FAX NO (Optional)
4 I 5-404-66 I
ENDORSED
"'·'"'"""gi 11\iilspcrlein law .com
FOR 1•"•'"'' Rcspo11dent Ran deep Hoth i
FILED
E-•l~11. ~OORess
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SUPERIOR COURT OF CALIFORNIA, COUNTY OF
STREET ADDRESS
ALAMEDA COUNTY
A l:uneda
2.+.+05 A mador Street
MAY -1
•tAIL ING A00RE SS
Hayw:ird. CA H:ivward Hal I of Justice
PETITIONER/PI.AINTIFF:Tesla, Inc.
c 1n ~o.::1PcooE
' " ' YnlV
J' y
s.s:ANCH NAME
OFTiffi SUPERIOR COURT
~,
ALIClA 8SPIN0~om--
RESPONDENT/DEFENDANT:Randeep Hothi
GASE NUMBER:
PROOF OF SERVICE BY FIRST-CLASS MAIL-CIVIL
(Do not use this Proof of Service to show service of a Summons and Complaint.)
1. I am over 18 years of age and not a party to this action. I am a resident of or employed in the county where the mailing
took place.
2. My residence or business address is:
345 Grove Street
San Francisco, CA 3. On (date):l !/20 I mailed fiom (ciiy and staie): San
the following documents (specify):
Francisco, CA
Judicial Council Form \VV-115 Request to Continue Court Hearing wilh Allachment
Judicial Council Form WV-116 Order on Request to Continue Hearing
D
The documents are listed in the Attachment to Proof of Service by First-Class Mail-Civil (Documents Served)
(fonm POS-030(O)).
4. I served the documents by enclosing them in an envelope and (check one):
a. [2J depositing the sealed envelope with the United States Postal Service with the postage fully prepaid.
b.
placing the envelope for collection and mailing following our ordinary busi ness practices. I am readily familiar with this
business's practice for collecting and processing correspondence for mailing. On the same day that correspondence is
placed for collection and mailing, it is deposited in the ordinary course of business with the United States Postal Service in
a sealed envelope with postage fully prepaid.
D
5. The envelope was addressed and mailed as follows:
a. Name ofpersonserved:Zach ary
J. A linder
b. Address of person served:
Sideman & Bancroft LLP
One Embarcadero Center, 22nd Floor
San Francisco, CA
D
The name and address of each person to whom I mailed the documents is listed in the Attachment to Proof of Service
by First-Class Mail-Civil (Persons Served) (POS-030(P)).

~::::a;;l~;:e; ;enalty of perjury under the laws of the State of California lhal th ?
£
D Gill Sperleio
(TYPE OR PRINT NAME OF PERSON COMPLETING THIS FORM)
Fo,m Apprc,,,ed f0< Op~onal Use
· Judicial Council ct California
POS-0'.30 {New January 1, 2005]

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(SIG~:PJRE"oF PERSON COMF>C'ETING THIS FORM)
PROOF OF SERVICE BY FIRST-CLASS MAIL- CIVIL
(Proof of Service)
AA
Document received by the CA 1st District Court of Appeal.
RGl 90
Code of Civil Procedure,§§ 1013, 1013a
www COI.Ttinfo.ca.()Ov
Scanned by CamScanner
Page 16 Case Number:
KG J :IUJ:> //U
c. (I) Ix : This is my first request for a continuance.
(2) L The hearing has previousiy been continued

rimes.
Extension of Temporary Restraining Order
a. xl A Temporcuy Resmlining Order (fonn WV- I I 0) was issued on (dme):_
4_/1_9_!_2_0_1_9______
Pi ease 3.tt::ich a copy of the order if you have one.
b. Notice: If the he:ufog date is continued, the Temporm:v Restraining Order will remain in effect until the
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Attorney
Revised Juiy i. 20 i
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Signature
<
Party Without Attorney
Request to Continue Court Hearing
(Workplace Violence Prevention}
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'ttVV-115, Page 2 of
Document received by the CA 1st District Court of Appeal.
D. Gill Sperle!n
Tvpe or p ;·inl your name
Page 17 D. G ILL SPERLEIN, SBN I THE L/l,\/\/ OFFICE OF D. G!LL SPERLE!!\!
') 345 Grove Street
San Francisco, CA 94
Facsimile: (415) 404-gill@sperleinlaw.com

Attorneys for Respondent

SUPERIOR COURT OF TH E STATE OF CALI FORNIA

l..UUNI T Ut A LAMCUA

Case No. RGi90 i
Tesla, Inc.,
_ ..
,- .-
Attac hme nt 3(b)(4) to C h- 115 Request
to Continue Hearing
Petitioner,
V.

'CJ)~~
,
""G-

Scheduled Hearing
Randeep Hothi,
Respondent.
Date : 5/ 7/Time: 1:30 pm
C ourtroom: 51

For good cause as set forth herein, Respondent Randeep Hothi ("Hothi")

respectfully requests that the Court ( 1) continue the hearing on the request of

Petitioner Tesla, Inc . ("Tesla") for restraining orders against Hothi currently scheduled

for May 7, 2019 at l :30 pm in Court Room 51 1, and (2) schedule a long-form

evidentiary hearing with a llowance of sufficient time for limited discovery.
: A party is entitled to disclosure in discovery as "a mat1er of right unless statutory m
public policy considerations clearly prohibit it." (Greyhound Corp . v. Superior (1961)
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Page 18 Introduction

Mr. Hothi is a c itizen journalist w hose research and data have revealed

discrepancies in claims Tesla made about its production rate and manufacturing

capabil ities. His work has been cited by business reporters and relied upon by

financial analysts and has won for him a vvide public fo!lowing. At the time of the
events in question, Hothi was gathering information calculated to call into question

Tesia;s extravagant claims about "Fuii Self-Driving" and a "robo taxi" fleet.

In obtaining its ex parte temporary restraining order [with an abject failure to
g ive notice to Hothi, despite knowing he could be readily reached on Tw itter), Tesla
has painted a lurid picture of Hothi as a dangerous individual guilty of stalking,

harassment, and trespass, whose activities constitute "actual and threatened

violence." None of these things is true. As evidence in Tesla's possession will show,

Mr. Hothi endangered no one, threatened no one, and harassed no one.

Tesla's accusations here fall into a long and disturbing pa ttern of using lies

and intimidation in an effort to silence its critics. This matter plainly has ramifications

for beyond the individual Respondent and therefore deserves a long-form

evidentiary hearing. Because Tesia controis potentially e xculpatory evidence, the

parties should have the opportunity to take discovery in advance o f the hearing.


Hothi provides the following information to establish good cause for the requested
con tinuance, discovery, and long-form evidentiary hearing.
Co!.2d 355, interpreting the Discovery Act of 1957) California courts have reiterated that
discovery provisions in the Civil Discovery Act of 1986 {CCP 2016-2036) and the Civil
Discovery Act (CCP 2016.010-2036.050), which replaces it, are to be liberally construed in
favor of disclosure. (Flagship Theaters of Palm Des., LLC v. Century Thea ters, Inc . (201l) CA4th 1366. 1383)
-2-
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Page 19
Respondenfs Actions
To understand Tesla 's motive for using legal process to discredit and

intimidate Mr. Hothi, and the significance of the evidentiary hearing beyond th e

usual b o unds o f a restraining order, the Court must understand what role Hothi p lays.

Hothi is an outspoken c ritic of Tesla. He is an academic trained in field research a nd

currently completing a Ph.D. in linguistic anthropology. He has applied observation

and data-gathering techniques learned in his studies to uncovering information
about Tesla, especially information Tesla has misrepresented to the public. He is part

of the TSLAQ phenomenon w hich is a type o f c rowd sourcing o f information relevant

to Tesla. (See Russ Mitchell, "The crowd-sourced, social media swarm that is betting

Tesla w ill c rash a nd burn," LA Times (on line Apr. 12, 2019, and attached here to as

Exhibit A)) .

Directly relevant to this matter, Tesla this mon th made extraordinary claims

about the supposed "autonomous driving" capabilities of its vehicles. Tesla has

p romised one miiiion "robo taxis" on the road by next year, capable o f "fuii self-

driving." (See Russ Mitchell, "In a bind, Musk hopes aut onomous Tesla taxis will drive
a new, positive na rra tive," LA Times (on line Apr. 19, 2019, and attached hereto as
r_)
Exhibit B)) . Tesla relies on these statements to boost its share p rice and to encourage
car purchases. If those statements are false, as many believe they are, then there
are far reaching consequences. When, a few days in advance of a highly-

publicized "Investor Autonomy Day," Mr. Hothi happened upon a Tesla c ar
-3-
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ii
Page 20 engaging in performanc e testing on a public high1.Ncy, he took the opportunity to

observe and brie fly record the car's actions. This type of ob servation is essential to

protecting the driving public from an autonomous driving techno!ogy tha t is far from

ready for use on public highways, and to protecting investors fro m materially

inflated claims.
I
I Petitioner's History of Lying and !ntimidation of Critics

To understand the importance of an evidentiary hearing and d iscovery, the

Court a!so needs to learn about Tesla's history o f attacking and intimidating its

c ritics, and appreciate how Tesla 's tactics affect the public 's right to know about
Tesla as a publicly traded company.

First, the deception. Tesla 's most fa mous fraud occurred last August when

Tesla's CEO, Elon Musk, tweeted to his 22 millio n Twitter followers during trading hours

that he had "funding secured " to ta ke Tesla private at a stock price well above the

trading price. The stock price immediately and spectacularly soared. However,

Musk 's claim was a lie. The SEC brought a 10b-5 action against Musk tha t resulted in

a $20 million fine to Musk (and a $20 million fine to Tesla for failure to supervise Musk) .

(See Exhiblt C heretoj. As part of the consent judgment, iv'tusk agreed that he can
?_,
never publicly deny any of the stunning factual allegations made by the SEC in its
lawsuit. (See Exhibit D hereto) .
More relevant to this action, Mr. Hothi, like m any others, is highly skeptical of

Tesla's c urrent claims about autonomous driving because Tesla has a track record

of deceiving the public about its so-called "Full Self-Driving" (or FSD) capabilities. In
2016, Tesla made the c laims about the imminence of its FSD capabilities that are
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Page 21 almost identical to the o nes it is now making. lt released the now infarnous "Paint It
Black" video of a car appearing to navigate complex roads auton omously. Later
reporting revealed the film
Vv'OS
highly deceptive, required special conditions, and
contained doctored footage to hide human interventions. It was w ith the "Paint it

Blac k" video in mind that Mr. Hothi decided to observe the test car. (See Edward

Niedermeyer, "CA DMV Report Sheds New Light on Misleading Tesla Autonomous

Drive Video," Daily Kanban (oniine Feb. 3, 20i 7, and attached hereto as Exhibit Ejj .

In an a ttempt to ensure its many deceptions remain undiscovered, Tesla has

gone to extraordinary efforts to intimidate those w ho seek to report the truth, which
is what they ore attempting here. Respondent offers a few examples here, but there
-
.;
r

a re countless others.

1.
:,r-
When a 20-year veteran photographer for the Reno Gazette Journal
tried to photograph the Tesla gigafactory in Nevada, security guards roughed him

up and c laimed he had tried to run them over. (Reno Gazette Journal's lawyer "sent

a letter in response [to Tesla's claims] stating the two guards rammed the Jeep and

smashed the window with a rock before cutting [the photographer] out of his seat

with a knife, dragging him out o f the vehicie and shoving him to the ground."j (See
?_,
Anjeanette Damon, "Tesla incident: RGJ photographer pays trespass fine, battery

c harges dropped," Reno Gazette Journal (on line Jan. 4, 2018, and a ttached

hereto as Exhibit F)) .

2.

When Tesla whistleblower Martin Tripp informed media and regulators
about b a ttery defec ts at Tesla's Nevada factory that he believed pose life-

threatening danger to passengers and the driving public, Tesla CEO Musk set out to
-5-
AA
Document received by the CA 1st District Court of Appeal.
11
Page 22 lv':att Robinson and Zeke Faux, "\Nhen Elon Musk Tried to Destroy a
I destrov. him. {See
.
Tesla Whistleblower," Bloomberg Businessweek (on line Mar. 13, 2019, and attached

hereto as Exhibit G)). in connection vvith the outrageously false c iaims made by

Tesla against Tripp, Musk also falsely accused reporter Linette Lopez of bribing Tripp

for the information. (See Exhibit H.)

When Tesla Regional Manager Adam Williams reported to his superiors
3.

that employees were knowingly selling defective cars, Tesia demoted and then fired
him. (See Sean O'Kane, "Tesla accused of knowingly selling defective vehicles in
IO
new lawsuit," The Verge (on line Feb. 21, 2018, attached hereto as Exhibit I)) .
4.

=··
CJ'f..:A
When a female engineer a lleged sexual harassment a t Tesla, Tesla

fired her. (See, Sam Levin, "Tesla fires female engineer who a lleged sexual

harassment" LA Times (on line June 1, 2018, a ttached hereto as Exhibit J)).

Good C ause
- :. -
Based on the above facts, there exists good cause to order a long-form

evidentiary hearing w ith sufficient time in advance to conduct discovery for the

following reasons:

l.
The negative impact on this Respondent is far greater than in the

typical restraining order action . The simple act of filing of the petition outed (or
doxxed) Respondent. A number of Tesla fana tics have e-mailed Respondent's

dean, department chair, and thesis advisor commanding that the university expel

Mr. Hothi from his Ph.D. program. Th e inflammatory accusations made by Tesla in this

high-profile proceeding are certain to have a profound effect on Respondent's

-6-
AA
Document received by the CA 1st District Court of Appeal.
11
Page 23 future,. and threaten his obiiity to com plete his Ph.D. studies,. his empioyment
prospects as he enters the job market, and his reputa tion for the rest of his life.
r,
L.

This restraining order ,-,as irnpiications on tr1e general public, reporters,
and investors who rely on citizen journalists and investigators to uncover the truth

about a company that routinely misrepresents important information, attem p ts to

keep negative information about the com pany from coming to light, and

intimidates those who seek to thwart its e fforts to deprive the public of important

information. The more often Tesla causes harm to its critics through legal process or
other methods, the less likely people will be willing to put their necks out to uncover
and disseminate truth.

-,
'-''
-
3.
Tesla
alone
holds
materials
that
Respondent
believes
include
excu!patory evidence. The Tesla test car described in Paragraph 3 o f Attachment A.
to Christine Leslie's Declaration Supporting the Petition had two cameras mounted

on it. Also, the car itself has eight integrated c a meras, and Tesla has claimed those

cameras are a crucial part of the FSD hardware, and how the car stores and

transmits massive amounts of data back to headquarters for analysis. Surely, this car,

being used to test and demonstrate Tesla's work on FSD, had such cam eras and

transmitted such data. Respondent maintains he did not approach the test car in
') ~
the aggressive manner described in the Petition and should be permitted to obtain

the records from the test car to support his testimony. Similarly, Respondent believes
_j
r_)

that security cameras at the Tesla factory may contain exculpatory evidence
supporting his testimony regarding the incidents alleged to have occurred on the
Tesla campus.
-7-
AA
Document received by the CA 1st District Court of Appeal.
11
Page 24 ~ummary

For the reasons set forth above, Respondent request that the Court:

l ) Continue the he ming scheduied for tv',ay 7, 2019 ·vvith sufficient time for the

parties to take discovery prior to the hearing; a nd

2) Schedule a long-form evidentiary hearing on the Petition.

Respectfully Submitted,

,..
-

,t,I/J ✓/f~
/·:§1/f/- . ~/"7/, :- _~
·'// vJ//~)1/

Date : May 1,
V
o .-GifiSperlein
0 . G ILL SPERLEIN
Attorneys for Respondent
THE LAW OFFICE OF

')''
_.)

r_)
-8-
AA
Document received by the CA 1st District Court of Appeal.
10
Page 25 AA
Document received by the CA 1st District Court of Appeal.
Exhibit A
Page 26 https://www.latimes.com/business/autos/la-fi-hy-tesla-short-sellers-musk...
Document received by the CA 1st District Court of Appeal.
The crowd-sourced, social media swarm that is betting Tesla will crash a...
AA1 of
Exhibit A
5/1/2019, 9:38 AM
Page 27 The crowd-sourced, social media swarm that is betting Tesla will crash and burn - Los Angeles Times
. (Raul Allen / For The Times)
It’s a sunny day in March and “Machine Planet” is flying a single-engine Cessna over Northern California. He’s
cruising at 1,500 feet toward a massive lot leased by electric-car maker Tesla. His mission: to burst the Tesla
https://www.latimes.com/business/autos/la-fi-hy-tesla-short-sellers-musk-20190408-story.html
AA
Exhibit A
by the CA 1st District Court of Appeal.
5/1/
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bubble. And make some money doing it.
What he sees today makes his eyes widen: more than 100 car-carrier trailers, the kind you see on highways
hauling new cars to dealers. They’re lined up in neat rows. Empty. Idle.
“Ten days left in the quarter, and they’re just sitting there,” said Machine Planet, peering down at the remote
landscape outside Lathrop. Tesla bought those trailers to aid what Chief Executive Elon Musk said will be an
unprecedented wave of new car deliveries in March. But to Machine Planet — that’s the name he uses on Twitter
— the scene just confirms his suspicions that there are lots all around the U.S. filled with unsold Tesla cars. (He
and others claim to have counted 52.)
The pilot banks his plane hard to the left and starts snapping pictures with a Canon 6D.
For as long as there have been stock markets, there have been short sellers wagering that companies will fail.
Their notoriety stemmed from their dirt-digging tactics. Napoleon supposedly called them “enemies of the state.”
Some blamed them for the stock market crash of 1929.
Short seller Jim Chanos took a position against Enron and won when the company was revealed to be an
accounting fraud. Bill Ackman claimed Herbalife was a pyramid scheme; he slunk away after five years, the
company still intact.
But the war on Tesla is unique. Musk has used Twitter to cultivate a cult-like following as a tech revolutionary.
Fittingly, his nemesis is a social media swarm, made up largely of anonymous contributors with made-up names
https://www.latimes.com/business/autos/la-fi-hy-tesla-short-sellers-musk-20190408-story.html
AA
Exhibit A
by the CA 1st District Court of Appeal.
If you spend any time on the Twitter hashtag $TslaQ, you know what this means to Tesla short sellers. They
believe the lots full of new Model 3s — and Models S and X vehicles, too — show Tesla has reached a cliff in
demand for its vehicles. When the rest of the world finally admits the company’s days as a fast-growth story are
numbered, they say, its stock price will crash, creating a bonanza for investors who, like Machine Planet, have bet
big that Tesla’s shares are grossly overvalued.
3/23
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The crowd-sourced, social media swarm that is betting Tesla will crash and burn - Los Angeles Times
and colorful avatars.
https://www.latimes.com/business/autos/la-fi-hy-tesla-short-sellers-musk-20190408-story.html
AA
Exhibit A
by the CA 1st District Court of Appeal.
Tesla has said there is no mystery to the car-filled lots — they are distribution points for final delivery to
customers. As to the empty trailers, a Tesla spokeswoman said “not all our carriers would be in use at all times.
Some might be in maintenance.”
4/23
Page 30 The crowd-sourced, social media swarm that is betting Tesla will crash and burn - Los Angeles Times
(Raul Allen / For The Times)
The sidewalk spy
https://www.latimes.com/business/autos/la-fi-hy-tesla-short-sellers-musk-20190408-story.html
AA
Exhibit A
by the CA 1st District Court of Appeal.
5/1/
5/23
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Machine Planet belongs to a large and growing network of Tesla skeptics who connect on Twitter through $TslaQ
— Tesla’s stock symbol, followed by Q, a stock exchange notation for a company in bankruptcy. Which Tesla, to be
clear, is not. What Tesla is, relatively speaking, is heavily shorted: About 32.7 million of its shares, or 27.7% of
those available for trade, have been borrowed by short sellers and then sold. They must be paid back at some
point — at a lower price, the shorts hope.
Pronounced Tesla-Q, the channel has emerged as a crowd-sourced stock research platform. Contributors divide
up research duties according to personal interest and ability, with no one in charge.
And some do reconnaissance, posting photos and videos of Tesla storage lots, distribution centers, even the
company’s Fremont assembly plant as seen from above.
A major aim is to change the mind of Tesla stock bulls and the media. The research helps individual short sellers
decide when to move in and out of the stock. But it’s clear from the posts that $TslaQ can be just as vitriolic as
Tesla fans are adoring.
“I go out of my way to listen to them because I want to hear the worst things people can come up with about
stocks I have a position in,” said Ross Gerber, head of Santa Monica portfolio management firm Gerber Kawasaki,
who is impressed by much of $TslaQ’s research.
But he’s been subject to personal attacks from some $TslaQ members, and said too much emotion from the short
sellers can degrade some of the solid research they offer up.
https://www.latimes.com/business/autos/la-fi-hy-tesla-short-sellers-musk-20190408-story.html
AA
Exhibit A
by the CA 1st District Court of Appeal.
Some use commercial databases to track Tesla-loaded ships from San Francisco to Europe and China. Some are
experts at automotive leasing or convertible bonds. Some repost customer complaints about Tesla quality and
service. One contributor, whose Twitter handle is TeslaCharts, assembles collected data to offer graphical
representations of Tesla’s own reports and $TslaQ’s findings.
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“A lot of their premise is emotional,” he said. “They hate Musk. They think he’s a fraud; they think he’s a liar.”
Although activist investors have been around for years, the networked nature of this research and publicity
campaign is new, said Byoung-Hyoun Hwang, a Cornell University finance professor who’s studied social media’s
effect on financial markets. “The diversity of perspectives, not just a diversity of opinions, could be very valuable,”
he said.
https://www.latimes.com/business/autos/la-fi-hy-tesla-short-sellers-musk-20190408-story.html
AA
Exhibit A
by the CA 1st District Court of Appeal.
Most $TslaQ posters try to remain nameless, citing the repercussions faced by some Tesla critics, including death
threats to some $TslaQ members and harassment by Musk himself.
7/23
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https://www.latimes.com/business/autos/la-fi-hy-tesla-short-sellers-musk-20190408-story.html
AA
Exhibit A
by the CA 1st District Court of Appeal.
5/1/
8/23
Page 34 The crowd-sourced, social media swarm that is betting Tesla will crash and burn - Los Angeles Times
(Raul Allen / For The Times)
On a Hawthorne sidewalk not far from another Musk company, SpaceX, a man raises his iPhone to get a good
camera angle.
https://www.latimes.com/business/autos/la-fi-hy-tesla-short-sellers-musk-20190408-story.html
AA
Exhibit A
by the CA 1st District Court of Appeal.
5/1/
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It’s after dark. Model 3s by the hundreds are parked inside a lighted-up three-level parking garage. The cars are
covered in dust. According to the man, some have been in there for months.
“I wanted Tesla to make it,” he says as he taps the big red button. “I’m a car guy, man. The Model S was a great
car, especially when they came out with the dual motor.”
The man says he works for a short seller who goes by the Twitter handle Latrilife. In return for scouting out and
monitoring Tesla delivery centers and storage sites around L.A., he gets $20 an hour.
Such storage practices are “extremely unusual” in the auto industry, said Bill Hampton, a Detroit veteran who
runs AutoBeat Daily, an online industry newsletter.
“But cars shouldn’t be sitting in staging lots for that long under any circumstances,” he said, “unless you have too
many cars.”
Tesla declined to discuss the cars in the Hawthorne lot.
Montana Skeptic gets outed
$TslaQ has no leader, but it does have a hero. His name is Lawrence Fossi, a lawyer and New York money
manager who contributed to the Twitter hashtag as well as investor site Seeking Alpha under the moniker
Montana Skeptic — until he was exposed by Musk.
According to Fossi, after he was outed on Twitter last July, Musk personally called the small investment office he
works for. Musk told his boss he wasn’t happy about the online activity and threatened to sue Fossi for
https://www.latimes.com/business/autos/la-fi-hy-tesla-short-sellers-musk-20190408-story.html
AA
Exhibit A
by the CA 1st District Court of Appeal.
Tesla doesn’t have traditional dealers, whose lots are filled with Fords, Chevys and Hondas awaiting buyers. That
could account for some of Tesla’s scattered inventory, he said.
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The crowd-sourced, social media swarm that is betting Tesla will crash and burn - Los Angeles Times
defamation. (Tesla doesn’t dispute that Musk contacted the company.)
Meanwhile, Tesla’s public relations department sent emails to the media naming Fossi and encouraging reporters
to call his boss — phone number included. The communications executive involved declined to discuss that
matter.
“I had never before heard from Tesla or Elon Musk to correct anything I wrote,” Fossi said. “I would have been
happy to correct anything that was wrong.”
Fossi said he didn’t take the lawsuit threat seriously, “but I couldn’t afford to drag my boss into this.” So he quit
writing for Seeking Alpha and deactivated his Twitter account.
Elon Musk
@elonmusk
44.4K 9:02 AM - May 4, 4,138 people are talking about this
Musk “won the first round,” Fossi said. But $TslaQ gained more visibility and followers in the months that
followed. The Tesla short thesis, Fossi said, “is getting a lot more coverage than it would have gotten if Musk had
kept his big mouth shut, which is apparently beyond his capacity.”
Musk declined to be interviewed for this story. But the $TslaQ phenomenon clearly vexes him. He calls Twitter a
“war zone” and regularly attacks short sellers. His taunts sometimes produce a stock price boost.
https://www.latimes.com/business/autos/la-fi-hy-tesla-short-sellers-musk-20190408-story.html
AA
Exhibit A
by the CA 1st District Court of Appeal.
Oh and uh short burn of the century comin soon. Flamethrowers
should arrive just in time.
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Starting last May, Musk amped up his battle with the shorts, promising “the short burn of the century” on
Twitter. On July 23, four days after Machine Planet posted photos of hundreds of cars parked at a facility outside
Stockton, Musk phoned Montana Skeptic’s boss. And on Aug. 7, Musk issued his infamous “420” tweet, in which
he claimed he had “funding secured” to take Tesla private at a premium price — $420 a share.
https://www.latimes.com/business/autos/la-fi-hy-tesla-short-sellers-musk-20190408-story.html
AA
Exhibit A
by the CA 1st District Court of Appeal.
Some short sellers got burned as the stock price immediately rose by nearly 13%. But so did bull investors who
thought the deal was real. It wasn’t, and by Aug. 20, as reality sank in, Tesla shares were down almost $100 a
share, or 25% from pre-tweet levels. The episode landed Musk in deep trouble with the U.S. Securities and
Exchange Commission. Musk settled fraud charges in September, but the SEC has since asked a federal judge to
hold him in contempt of court, saying he violated terms of the agreement with subsequent tweets. Last Thursday,
the judge told the SEC and Musk to work out a remedy.
12/23
Page 38 The crowd-sourced, social media swarm that is betting Tesla will crash and burn - Los Angeles Times
(Los Angeles Times)
@FCalciu · Oct 4, Florin Calciu
Replying to @derekGUMB and 3 others
short selling should be illegal. Shorts are not investors, they literally hope
companies go bankrupt. @SEC_Enforcement #TeamElon #Tesla #Model$TSLA $TSLAQ
Elon Musk
@elonmusk
https://www.latimes.com/business/autos/la-fi-hy-tesla-short-sellers-musk-20190408-story.html
AA
Exhibit A
by the CA 1st District Court of Appeal.
5/1/
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The crowd-sourced, social media swarm that is betting Tesla will crash and burn - Los Angeles Times
Exactly. Short-sellers are value destroyers. Should definitely be illegal.
1,335 6:40 PM - Oct 4, 574 people are talking about this
The short thesis gained traction last week when Tesla announced a dramatic drop in deliveries in the year’s first
quarter — Model 3 deliveries fell 19% from the previous quarter, and older Models S and X models tumbled 56%.
“The fundamental narrative around Tesla appears more clouded than we have seen in several years,” Morgan
Stanley stock analyst and Tesla bull Adam Jonas wrote well before the numbers were released, in a March investment note. Tesla bull Gerber says the numbers were “a bit light” but sees great things ahead for the
company.
Tesla’s stock closed at $274.96 on Friday, down from an all-time high of $385 in September 2017. Wall Street
sentiment on the company has chilled. Several Wall Street analysts have lowered their stock price targets in
recent weeks.
A threatening fax
Citing the case of Fossi, several $TslaQ contributors agreed to talk only if they could remain anonymous.
Contributors to $TslaQ contacted by The Times said they feared retribution from Musk’s most extreme
supporters. Some say they have received death threats over Twitter. Paul Huettner, an investment banker in New
York City who dares use his real name, said he received a message threatening his family on an old-fashioned fax
machine. In the header, it said, “From: Elon Musk.”
https://www.latimes.com/business/autos/la-fi-hy-tesla-short-sellers-musk-20190408-story.html
AA
Exhibit A
by the CA 1st District Court of Appeal.
Tesla insists that U.S. orders for the Model 3 are strong, and that the company simply couldn’t deliver all ordered
vehicles in the first quarter. And it says, even with the sharply lower deliveries, the Model 3 was the top-selling
midsize luxury sedan.
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Huettner didn’t believe Musk was involved, but he found the message frightening and reported it to the FBI.
Machine Planet is 60 years old, tall and trim. The semiretired marketing executive worked at several well-known
Silicon Valley companies. Now he’s a contract consultant, an avid pilot and an investor with an eye for overvalued
stocks. He scored well, he said, with big short bets against Bear Stearns and Lehman Bros. in the early days of the
Great Recession.
Tesla first attracted Machine Planet’s attention about three years ago, he said, because it seemed as much a cult
as a company.
“If you went by media reports, you got the impression that Elon Musk was the only guy who worked there,” he
said. “I always see that as a bad sign. I mean, Steve Jobs, all his lieutenants became pretty well known. I put Tesla
on my background list.”
“I found there was this whole community of people studying this company. I got sucked in completely over the
next two months.”
He started shorting.
He had nothing against Musk at the time. “It was purely financial. My opinion of Musk was very neutral,” he said.
“The double landing of SpaceX rockets? I was impressed as anybody else.”
But he noticed car-buyer demand was a big topic on $TslaQ. Contributors posted Google satellite shots of lots in
remote locations, far from the company’s Fremont factory, where cars were being stored.
https://www.latimes.com/business/autos/la-fi-hy-tesla-short-sellers-musk-20190408-story.html
AA
Exhibit A
by the CA 1st District Court of Appeal.
In April 2018, laid up after surgery, he listened to a lively conversation about the short case on the irreverent
financial markets podcast Quoth the Raven.
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One spot was in Lathrop, not far from Stockton, in an unirrigated section of the Central Valley known as the “dust
bowl.” A couple of $TslaQ contributors had spotted an ad for Tesla jobs there. They found what seemed like
hundreds or thousands of Model 3s being trucked into a lot through a gate and behind fences. But they couldn’t
get a good look inside.
“So I flew to Lathrop,” Machine Planet said. “There was this amazing moment when I realized the entire facility
was packed with cars.” More than 3,000, he said.
https://www.latimes.com/business/autos/la-fi-hy-tesla-short-sellers-musk-20190408-story.html
AA
Exhibit A
by the CA 1st District Court of Appeal.
“That was entirely the moment where we went from kind of believing Elon about demand and not being able to
build enough cars to [finding evidence that] the cars are either not sold or not salable.”
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Page 42 The crowd-sourced, social media swarm that is betting Tesla will crash and burn - Los Angeles Times
(Raul Allen / For The Times)
The Shorty Air Force is born
Headed back to the airport, he tweeted his findings: “The SAF can confirm thousands of cars at Lathrop. Photos
tonight. 7/19/2018 4:31 p.m.”
He got a tweet back. “SAF?”
“Shorty Air Force,” he said. He’d made the name up on the spot.
https://www.latimes.com/business/autos/la-fi-hy-tesla-short-sellers-musk-20190408-story.html
AA
Exhibit A
by the CA 1st District Court of Appeal.
5/1/
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By the time he’d landed, $TslaQ contributor Zach Hanover had designed a Shorty Air Force shoulder patch logo
based on a World War II design.
The flyover nudged others into action.
Latrilife, who says he has “six figures” invested in short bets that Tesla’s stock price will plummet, hired a
helicopter to photograph the Hawthorne garage’s top level, the view of which was inaccessible from the public
sidewalk. “We don’t trespass,” Latrilife noted.
https://www.latimes.com/business/autos/la-fi-hy-tesla-short-sellers-musk-20190408-story.html
AA
Exhibit A
by the CA 1st District Court of Appeal.
One man started sending a drone over automobile auction houses, posting videos of Teslas stored there.
18/23
Page 44 The crowd-sourced, social media swarm that is betting Tesla will crash and burn - Los Angeles Times
(Raul Allen / For The Times)
A loosely formed Shorty Ground Force began posting pictures of Teslas stored for weeks on lots across the
country. Crow Point Partners, an investment firm with a short position in Tesla, periodically posted pictures of
Model 3s parked in Norwood, Mass., covered in deep snow. The snow recently melted, but most of the cars are
still there, the firm contends.
Just last Tuesday, a $TslaQ contributor posted a video that appeared to show dozens of Teslas parked on the fifth
floor of a shopping mall parking garage in Buena Park.
https://www.latimes.com/business/autos/la-fi-hy-tesla-short-sellers-musk-20190408-story.html
AA
Exhibit A
by the CA 1st District Court of Appeal.
5/1/
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Follow the solar panels
In an age of social media Photoshop fakes, it pays to be leery about anything that appears on Twitter or elsewhere
online. So The Times flew with Machine Planet and spent a day in Los Angeles with Latrilife and the man he hired
to take photos.
A reporter roamed a public parking lot outside the Crunch Gym in Burbank, where more than 100 Teslas sat. The
vehicle identification numbers showed that many were manufactured in 2018.
He backs up his assertion with data from IHS Markit, a market research firm, as reported recently in the New
York Times: Tesla said it delivered 245,000 cars in 2018. Most were in the United States. But IHS said only
164,000 were registered nationwide.
An IHS spokeswoman said the timing of reported sales could account for some of the difference, but for the full
story, “your questions are best to be addressed to Tesla.”
The shorts say distorted sales claims fit with a long list of hyperbolic and misleading Musk statements:
His 2017 assurance to Wall Street analysts that they should have “zero doubt” Tesla would hit a production level
of 10,000 cars a week by the end of 2018. The company has yet to achieve a steady rate of half that number.
Or his 2016 solar tile demonstration, a product that was supposed to revolutionize the residential solar market by
embedding solar panels into the roof itself. But the tile he held in his hands turned out to be a nonfunctional
https://www.latimes.com/business/autos/la-fi-hy-tesla-short-sellers-musk-20190408-story.html
AA
Exhibit A
by the CA 1st District Court of Appeal.
Machine Planet has created a website called Crowdsourced Tesla Research at tslaq.org, in part to escape the snark
and hot takes that infect Twitter. He said readers could draw their own conclusions, but “we think there are at
least 10,000 unsold Model 3s out there.”
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The crowd-sourced, social media swarm that is betting Tesla will crash and burn - Los Angeles Times
mock-up, and more than two years later, the technology isn’t ready for commercial distribution, though Tesla
continues to take deposits from customers.
Machine Planet says his interest in Musk is both pecuniary and personal.
“If I didn’t have an opportunity to personally profit from this and cover my expenses, I wouldn’t be here,” he said.
But “this guy attacks us. Justice is important too.”
California Inc. Newsletter
Weekly
A look back, and ahead, at the latest California business news.
Russ Mitchell



Russ Mitchell covers the rapidly changing global auto industry, with special emphasis on California, including Tesla, electric vehicles and driverless cars. The
Los Angeles Times’ former technology editor, he’s worked on staff at publications ranging from Business Week to Wired. A graduate of the University of
Illinois, he also studied at the Massachusetts Institute of Technology as a Vannevar Bush Fellow. Mitchell still drives his black 2000 Audi TT, the rare
smooth-backed version manufactured before lawyers made the company attach a spoiler.
COMMENTS (91)
https://www.latimes.com/business/autos/la-fi-hy-tesla-short-sellers-musk-20190408-story.html
AA
Exhibit A
by the CA 1st District Court of Appeal.

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AA
Exhibit A
by the CA 1st District Court of Appeal.
L. A. NOW
22/23
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The crowd-sourced, social media swarm that is betting Tesla will crash and burn - Los Angeles Times
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AA
Exhibit A
by the CA 1st District Court of Appeal.
AP R 19,
23/23
Page 49 AA
Document received by the CA 1st District Court of Appeal.
Exhibit B
Page 50 5/1/
In a bind, Musk hopes autonomous Tesla taxis will drive a new, positive narrative - Los Angeles Times
In a bind, Musk hopes autonomous Tesla taxis will drive
a new, positive narrative
B USI NESS
By RUSS MITCHELL
APR 19, 2019 | 4:00 AM
https://www.latimes.com/business/autos/la-fi-hy-tesla-elon-musk-full-self-drive-model3-demand-cash-20190419-story.html

AA


Exhibit B
by the CA 1st District Court of Appeal.
AUTOS
1/8
Page 51 In a bind, Musk hopes autonomous Tesla taxis will drive a new, positive narrative - Los Angeles Times
Tesla CEO Elon Musk exits federal court in New York on April 4. (Drew Angerer / Getty Images)
Elon Musk is in a bind — perhaps the tightest bind of his business career.
Demand for Tesla cars appears to have stalled. Stores are being closed. Inventory is piling up. Prices are being
cut.
https://www.latimes.com/business/autos/la-fi-hy-tesla-elon-musk-full-self-drive-model3-demand-cash-20190419-story.html
AA
Exhibit B
by the CA 1st District Court of Appeal.
5/1/
2/8
Page 52 5/1/
In a bind, Musk hopes autonomous Tesla taxis will drive a new, positive narrative - Los Angeles Times
Panasonic, the company’s closest business partner, abandoned plans to expand operations at Tesla’s giant battery
factory in Nevada unless car sales pick up.
Although Tesla posted consecutive quarterly profits late last year, Musk has prepared Wall Street for a loss when
first-quarter 2019 earnings are announced April 24.
The controversial chief executive also faces contempt charges from the Securities and Exchange Commission. He
had agreed to settle SEC stock fraud charges after tweeting falsely last August that he had the funding to take
Tesla private. In the settlement, he agreed not to tweet material information about the company without prior
vetting. A federal judge said the settlement could be clearer, ordering both sides to put on their “reasonable
pants” and revise the agreement.
The crowd-sourced, social media swarm that is betting Tesla will crash and burn »
On Monday, Musk will attempt to shift the downbeat narrative from immediate challenges to new prospects for
growth. Judging from his recent tweets, Musk will lay out a near-future vision in which money-generating selfdriving Teslas compete with the likes of Lyft, Uber and Waymo.
The CEO has not yet offered a timeline for such a service. Although Tesla has been working on automated cars as
long as anyone, it would have to start virtually from scratch in the intensely competitive robotaxi business.
The business could prove so lucrative, according to Musk’s tweets, that Tesla cars would appreciate in value year
after year. (Tesla critics were dubious on Twitter. According to Edmunds, a new car loses 15% to 25% of its value
the moment it leaves the dealer lot, and continues to depreciate every year after.)
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AA
Exhibit B
by the CA 1st District Court of Appeal.
Amid the bad news, Tesla’s volatile stock has fallen from a year-to-date high of $347.31 a share to 273.26 on
Thursday, a 21% decline.
3/8
Page 53 5/1/
In a bind, Musk hopes autonomous Tesla taxis will drive a new, positive narrative - Los Angeles Times
At the invitation-only event — called Investor Autonomy Day and set for 11 a.m. Monday at the company’s Palo
Alto headquarters — Musk is likely to detail currently sketchy plans to make Tesla the first company to offer
widespread deployment of driverless cars on highways and city streets. Within months, Musk said, owners of
most Teslas can have their cars refitted with a new computer board to enable full self-driving.
“Tesla will free investors from the tyranny of having to drive their own car,” Musk tweeted this week. (Why
“investors” and not “buyers” went unexplained.)
Rapid deployment of self-driving cars would buck current sentiment in the driverless-vehicle industry, which is
attempting to tamp down expectations of widespread deployment of driverless cars anytime soon.
“We overestimated the arrival of autonomous vehicles,” Ford Chief Executive Jim Hackett said in a recent speech.
Although Ford still plans to begin selling driverless vehicles as planned in 2021, they’ll start out restricted to
FOOD BOWLb will be
specific “geo-fenced” zones, beyond which human drivers would have to take the wheel. The LA
“applications

 TO P I CS
GET TICKETSb
narrow … because the problem is so complex,” he said.
by the CA 1st District Court of Appeal.
Get Tickets |b LA Food Bowl
Waymo, widely considered the industry’s robot-car leader, had once planned to launch a commercial robot taxi
service in Arizona by the end of last year. It did so, but so far has limited its use to a few hundred pre-selected
customers.
General Motors’ Cruise Automation planned to offer robot taxis in San Francisco in 2018, but those plans are on
indefinite hold.
Musk, no surprise, takes the contrary view. He plans to put self-driving Teslas on the road as soon as possible.
He has said it would be immoral not to. He’s claimed that the company’s current Autopilot technology — which
still requires an attentive human driver — has proved safer than Tesla cars driven without Autopilot engaged.
https://www.latimes.com/business/autos/la-fi-hy-tesla-elon-musk-full-self-drive-model3-demand-cash-20190419-story.html
AA
Exhibit B
4/8
Page 54 5/1/
In a bind, Musk hopes autonomous Tesla taxis will drive a new, positive narrative - Los Angeles Times
Professional statisticians from Rand and other research and academic institutions say it will take billions of miles
— and corporate transparency — to prove whether robot cars are safer than humans.
That presents automotive and technology companies with a conundrum: They can’t prove driverless cars are safer
without putting the cars on public highways.
The proof will take years. Meanwhile, robot cars will crash and people will die. The media naturally will focus on
robot-car accidents with far more intensity than on the dozens of other traffic deaths that occur every day.
The group is concerned that crashes and deaths that are inevitable in wide-scale deployment could slow down
development if the public is not convinced that the industry is doing all it can to keep such crashes to a minimum.
There’s big money at stake: Broadly defined, estimates for annual revenue in a new driverless-car industry are in
the hundreds of billions of dollars per year.
Tesla’s Autopilot has been involved in crashes in which drivers have been decapitated or burned to death.
Whether that makes Autopilot more dangerous than human drivers can’t yet be determined, but the stories pack
emotional punch.
Although the industry is unwilling to directly confront Tesla’s aggressive timetable for self-drive deployment, it’s
easy to read between the lines.
After Musk began tweeting about Tesla’s robot car plans, Brad Stertz, who heads U.S. government affairs for
Audi, tweeted: “Speaking for Audi … we are going to introduce this tech responsibly and not beta test on public
https://www.latimes.com/business/autos/la-fi-hy-tesla-elon-musk-full-self-drive-model3-demand-cash-20190419-story.html
AA
Exhibit B
by the CA 1st District Court of Appeal.
In light of that, an industry organization has been created to grapple with how to educate the public about
driverless cars. The group is called PAVE, for Partners for Automated Vehicle Education. Its members include
Audi, Toyota, Waymo and dozens of other companies and organizations, including auto safety groups. Tesla is
not a member of the group.
5/8
Page 55 5/1/
In a bind, Musk hopes autonomous Tesla taxis will drive a new, positive narrative - Los Angeles Times
roads. Some may call that old-school. I beg to differ.”
Whether the autonomy event, and the earnings results to follow, will boost Tesla’s flagging stock price will be
clearer by the end of next week.
California Inc. Newsletter
Weekly
A look back, and ahead, at the latest California business news.

Russ Mitchell



Russ Mitchell covers the rapidly changing global auto industry, with special emphasis on California, including Tesla, electric vehicles and driverless cars. The
Los Angeles Times’ former technology editor, he’s worked on staff at publications ranging from Business Week to Wired. A graduate of the University of
Illinois, he also studied at the Massachusetts Institute of Technology as a Vannevar Bush Fellow. Mitchell still drives his black 2000 Audi TT, the rare
smooth-backed version manufactured before lawyers made the company attach a spoiler.
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AA
Exhibit B
by the CA 1st District Court of Appeal.
AP R 19,
8/8
Page 58 AA
Document received by the CA 1st District Court of Appeal.
Exhibit C
Page 59 UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
_______________________________________________
:
UNITED STATES SECURITIES AND
:
EXCHANGE COMMISSION
:
:
Plaintiff,
:
:
vs.
:
:
ELON MUSK,
:
:
Defendant.
:
:
________________________________________________ :
Civil Action No. 1:18-cv-Jury Trial Demanded
Plaintiff United States Securities and Exchange Commission (the “Commission”), alleges
as follows:
SUMMARY
1.
This case involves a series of false and misleading statements made by Elon
Musk, the Chief Executive Officer of Tesla, Inc. (“Tesla”), on August 7, 2018, regarding taking
Tesla, a publicly traded company, private. Musk’s statements, disseminated via Twitter, falsely
indicated that, should he so choose, it was virtually certain that he could take Tesla private at a
purchase price that reflected a substantial premium over Tesla stock’s then-current share price,
that funding for this multi-billion dollar transaction had been secured, and that the only
contingency was a shareholder vote. In truth and in fact, Musk had not even discussed, much
less confirmed, key deal terms, including price, with any potential funding source.
2.
At approximately 12:48 p.m. EDT on August 7, 2018, during trading hours, Musk
tweeted to his over 22 million Twitter followers, “Am considering taking Tesla private at $420.
AA
Exhibit C
Document received by the CA 1st District Court of Appeal.
COMPLAINT
Page 60 Funding secured.” This statement was false and misleading. Over the next three hours, Musk
made a series of additional materially false and misleading statements via Twitter including:
3.

“My hope is *all* current investors remain with Tesla even if we’re private.
Would create special purpose fund enabling anyone to stay with Tesla.”

“Shareholders could either to [sic] sell at 420 or hold shares & go private.”

“Investor support is confirmed. Only reason why this is not certain is that it’s
contingent on a shareholder vote.”
Musk knew or was reckless in not knowing that each of these statements was false
and/or misleading because he did not have an adequate basis in fact for his assertions. When he
made these statements, Musk knew that he had never discussed a going-private transaction at
would be possible for all current investors to remain with Tesla as a private company via a
“special purpose fund,” and had not confirmed support of Tesla’s investors for a potential goingprivate transaction. He also knew that he had not satisfied numerous additional contingencies,
the resolution of which was highly uncertain, when he unequivocally declared, “Only reason
why this is not certain is that it’s contingent on a shareholder vote.” Musk’s public statements
and omissions created the misleading impression that taking Tesla private was subject only to
Musk choosing to do so and a shareholder vote.
4.
Investors reacted to Musk’s August 7 tweets. From the time of Musk’s first tweet
that day until the close of trading on August 7, Tesla’s stock price increased by more than 6% on
significantly increased volume and closed up 10.98% from the previous day.
5.
Musk’s false and misleading public statements and omissions caused significant
confusion and disruption in the market for Tesla’s stock and resulting harm to investors.
AA
Exhibit C
Document received by the CA 1st District Court of Appeal.
$420 per share with any potential funding source, had done nothing to investigate whether it
Page 61 6.
By engaging in the conduct alleged in this Complaint, Musk violated, and unless
restrained and enjoined will violate again, Section 10(b) of the Securities Exchange Act of (“Exchange Act”) [15 U.S.C. § 78j(b)] and Rule 10b-5 [17 C.F.R. § 240.10b-5] thereunder.
NATURE OF PROCEEDING AND RELIEF SOUGHT
7.
The Commission brings this action against Musk pursuant to Section 21(d) of the
Exchange Act [15 U.S.C. § 78u(d)] to enjoin the transactions, acts, practices, and courses of
business alleged in this Complaint and to seek orders of disgorgement, along with prejudgment
interest, civil penalties, and an officer and director bar against Musk, and such further relief as
the Court may deem appropriate.
8.
This Court has jurisdiction over this action pursuant to Sections 21(d), 21(e), and
27 of the Exchange Act [15 U.S.C. §§ 78u(d), 78u(e), and 78aa].
9.
Venue in this District is proper pursuant to Section 27 of the Exchange Act [
U.S.C. § 78aa]. Defendant transacts business in this District, and certain of the acts, practices,
transactions, and courses of business constituting the violations alleged in this Complaint
occurred within this District, and were effected, directly or indirectly, by making use of the
means, instruments, or instrumentalities of transportation or communication in interstate
commerce, or of the mails, or the facilities of national securities exchanges. Musk regularly
communicates via Twitter with users located in this District. In addition, Tesla is traded on the
Nasdaq Global Select Market, which is headquartered in this District, and trades in Tesla
securities were handled and executed by trading personnel located in this District during the
period relevant to the allegations.
AA
Exhibit C
Document received by the CA 1st District Court of Appeal.
JURISDICTION AND VENUE
Page 62 DEFENDANT
10.
Defendant Elon Musk, age 47, resides in Los Angeles, California. He co-
founded Tesla, Inc. in 2003 and since that time has been the Chairman of Tesla’s Board of
Directors and largest stockholder. He was named Chief Executive Officer in 2008. Musk
oversees all product development, engineering, and design of Tesla’s products.
RELEVANT ENTITY
11.
Tesla, which designs, develops, manufactures, and sells electric vehicles and
energy generation and storage systems, is incorporated in Delaware with its principal place of
business in Palo Alto, California. Tesla conducted an initial public offering in 2010, and at all
of the Exchange Act [15 U.S.C. § 78l(b)] and was publicly traded on the Nasdaq Global Select
Market under the ticker symbol TSLA.
FACTUAL ALLEGATIONS
Musk Used Twitter to Communicate with Millions of People as Tesla’s Spokesperson
12.
Musk created a profile on the social media application Twitter
(twitter.com/elonmusk) in 2009. Since that time, Musk often used Twitter to communicate about
Tesla’s business. Tesla’s Chief Financial Officer described Musk’s Twitter statements as a
“strong channel of marketing” with Musk acting as a “spokesman” for Tesla.
13.
On November 5, 2013, Tesla publicly filed a Form 8-K with the Commission
stating that it intended to use Musk’s Twitter account as a means of announcing material
information to the public about Tesla and its products and services and has encouraged investors
to review the information about Tesla published by Musk via his Twitter account.
AA
Exhibit C
Document received by the CA 1st District Court of Appeal.
relevant times, its common stock was registered with the Commission pursuant to Section 12(b)
Page 63 14.
In August 2018, over 22 million people, including members of the press,
“followed” Musk on Twitter. His tweets were published instantaneously to those people and
were also publicly available to anyone with Internet access.
Musk’s Statements Regarding Tesla Short Sellers
15.
In 2018, stock analysts and investors increasingly began to question whether
Tesla could meet its previously announced production targets and begin to earn sufficient cash in
order to sustain its operations and pay its existing debt load. By August 2018, more than $billion worth of Tesla shares were being “shorted,” meaning they were sold by investors who did
not own them at the time of the sale. Investors who sell stock short typically believe the price of
earn a profit. If the price of the stock rises, short sellers who then exit their short positions by
purchasing the stock at the higher price will incur losses.
16.
Musk has complained that Tesla has been unfairly targeted by short sellers and
predicted that short sellers would be “burned.” For example, on May 4, 2018, Musk tweeted,
“Oh and uh short burn of the century comin soon. Flamethrowers should arrive just in time.”
On June 17, 2018, Musk tweeted that short sellers “have about three weeks before their short
position explodes.”
Preliminary Discussions Regarding Taking Tesla Private
17.
Beginning in January 2017, Musk had three or four in-person meetings with
representatives of a sovereign investment fund (the “Fund”). During these meetings, according
to Musk, the lead representative of the Fund expressed a verbal desire to make a large investment
in Tesla and establish a Tesla production facility in the Middle East.
AA
Exhibit C
Document received by the CA 1st District Court of Appeal.
the stock will fall and hope to buy the stock at the lower price to cover their short positions and
Page 64 18.
In late July 2018, Musk and representatives of the Fund had not spoken for many
months. On July 28, 2018, a representative of the Fund requested a meeting with Musk. On the
evening of July 31, Musk and his chief of staff met with three representatives of the Fund at
Tesla’s factory in Fremont, California for approximately 30 to 45 minutes. Tesla’s CFO joined
midway through the meeting.
19.
According to Musk, at the meeting the Fund’s lead representative told Musk that
the Fund had recently acquired almost five percent of Tesla’s common stock on the open market,
expressed interest in taking Tesla private, and confirmed that he was empowered to make
investment decisions for the Fund. Musk later stated that he assumed without confirming that
of any such deal were not discussed.
20.
During the July 31 meeting, the lead Fund representative again raised the prospect
of establishing a production facility in the Middle East. According to Musk, he expressed
openness but made no commitment; Musk assumed that whether a Tesla production facility in
the Middle East was a precondition to the Fund’s willingness to take Tesla private would depend
on the amount of capital the Fund was required to commit to the transaction. Musk did not
discuss his assumption with the representatives of the Fund.
21.
The July 31 meeting lacked discussion of even the most fundamental terms of a
proposed going-private transaction. For example, there was no discussion at the July 31 meeting
of (1) any dollar amount or specific ownership percentage for the Fund’s investment in a goingprivate transaction; (2) any acquisition premium to be offered to current Tesla shareholders; (3)
any restrictions on foreign ownership of a significant stake in Tesla; (4) the Fund’s available
liquid capital; (5) whether the Fund had any past experience participating in a going-private
AA
Exhibit C
Document received by the CA 1st District Court of Appeal.
the lead Fund representative was proposing a “standard” going-private transaction, but the terms
Page 65 transaction; (6) any regulatory hurdles to completion of a going-private transaction; or (7) the
board approval process necessary to take Tesla private. Musk has acknowledged that the July meeting was the most specific discussion of a transaction to take Tesla private between him and
representatives of the Fund.
22.
According to Musk, at the close of the July 31 meeting, the lead representative of
the Fund asked Musk to tell the Fund how he wanted to do a going-private transaction and
represented that so long as the terms were “reasonable,” the Fund would be fine with them.
Musk acknowledged that no specific deal terms had been established at the meeting and that
there was no discussion of what would or would not be considered reasonable. Nothing was
with representatives of the Fund again about a going-private transaction until August 10, three
days after his August 7 statements.
Musk’s Discussion of a Going-Private Transaction with Tesla’s Board of Directors
23.
On August 2, 2018, after market close, Musk sent an email with the subject,
“Offer to Take Tesla Private at $420,” to Tesla’s Board of Directors, Chief Financial Officer, and
General Counsel. In the email, Musk explained his reasons for wanting to take Tesla private,
including that being public “[s]ubjects Tesla to constant defamatory attacks by the short-selling
community, resulting in great harm to our valuable brand.” In the email, Musk asked that the
“matter be put to a shareholder vote at the earliest opportunity” and stated that the “offer expires
in 30 days.”
24.
According to Musk, he calculated the $420 price per share based on a 20%
premium over that day’s closing share price because he thought 20% was a “standard premium”
in going-private transactions. This calculation resulted in a price of $419, and Musk stated that
AA
Exhibit C
Document received by the CA 1st District Court of Appeal.
exchanged in writing, and there was no discussion of confidentiality. Musk did not communicate
Page 66 he rounded the price up to $420 because he had recently learned about the number’s significance
in marijuana culture and thought his girlfriend “would find it funny, which admittedly is not a
great reason to pick a price.”
25.
Prior to Musk’s meeting with Fund representatives on the evening of July 31,
Tesla’s stock had closed at approximately $298 per share. Accordingly, at the time of the
meeting, the price per share with a 20% premium would have been approximately $358.
Between the July 31 meeting and Musk’s August 2 email to Tesla’s board, Tesla’s share price
had increased over 17% following the company’s August 1 earnings announcement. Musk
realized that a spike in Tesla’s share price might make a going-private transaction not feasible
however, said that he assumed without confirming with the Fund or any other funding source
that the 17% spike in Tesla’s share price did not affect the feasibility of taking Tesla private at
that time. Musk did not discuss a $420 price per share with any potential funding source for a
Tesla going-private transaction prior to sending his email to Tesla’s board.
26.
According to Musk, he thought that there was “a lot of uncertainty” regarding a
potential going-private transaction at the time of his August 2 email to Tesla’s board, “but it was
worth investigating.” He believed at the time that the likelihood of consummation of a
transaction was about 50%.
27.
In response to Musk’s August 2 email about taking Tesla private, Tesla’s board
held a telephonic meeting with Musk on the night of August 3. During that call, Musk informed
the board that the Fund was interested in funding a going-private transaction.
AA
Exhibit C
Document received by the CA 1st District Court of Appeal.
because it would require an investor in the transaction to pay a “premium on a spike.” Musk,
Page 67 28.
Musk also told board members that he wanted existing investors to stay with the
company. According to Musk, at least one board member told him that it would be “really
difficult for small investors” to remain shareholders in a private Tesla.
29.
During the August 3 call, Musk told the board that he wanted to contact existing
shareholders to assess their interest in participating in a going-private transaction. The board
authorized Musk to contact certain investors and asked him to report back to the board on those
conversations.
Musk’s August 7 Statements and the Market’s Reaction
30.
Between the July 31 meeting with representatives of the Fund and the morning of
the Fund; (2) did not discuss a going-private transaction at a share price of $420 with any
potential funding source; (3) had a conversation with a private equity fund representative about
the process, but did not actually contact any additional potential strategic investors to assess their
interest in participating in a going-private transaction; (4) did not provide Tesla’s Board of
Directors with a more specific proposal to take Tesla private; (5) did not contact existing Tesla
shareholders to assess their interest in remaining invested in Tesla as a private company; (6) did
not formally retain any advisors to assist with a going-private transaction; (7) did not determine
whether retail investors could remain invested in Tesla as a private company; (8) did not
determine whether there were restrictions on illiquid holdings by Tesla’s institutional investors;
and (9) did not determine what regulatory approvals would be required for such a transaction or
whether they could be satisfied.
31.
On August 6, Musk discussed a potential going-private transaction with a private
equity fund partner with previous experience with such transactions. During this call, Musk
AA
Exhibit C
Document received by the CA 1st District Court of Appeal.
August 7, Musk (1) did not have any further substantive communications with representatives of
Page 68 mentioned that to execute the potential transaction, the number of Tesla shareholders needed to
be below 300. At the time, Tesla had over 800 institutional shareholders and many more
individual shareholders. According to the private equity fund partner, the transaction structure
that Musk was contemplating was “unprecedented” in his experience.
32.
These uncertainties notwithstanding, on Tuesday, August 7, 2018, Musk
published a series of statements about a transaction to take Tesla private using his personal
Twitter account. Musk did not consult with Tesla’s Board of Directors, any other Tesla
employees, or any outside advisors about these tweets before publishing them.
33.
At approximately 12:48 PM EDT on Tuesday, August 7, 2018, Musk, using his
secured.” Musk published this tweet in the middle of the day’s official market trading.
Immediately after this tweet, the trading volume and price of Tesla shares spiked.
34.
Over the next few hours, Musk made additional statements about taking Tesla
private. At approximately 1:15 PM EDT, Musk responded to another Twitter user’s question,
“At what price?” by repeating “420.”
35.
At approximately 1:23 PM EDT, about 35 minutes after Musk’s initial tweet
about taking Tesla private, Tesla’s Chief Financial Officer sent a text message to Musk, “Elon,
am sure you have thought about a broader communication on your rationale and structure to
employees and potential investors. Would it help if [Tesla’s head of communications], [Tesla’s
General Counsel], and I draft a blog post or employee email for you?” Musk responded, “Yeah,
that would be great.” Tesla’s Chief Financial Officer then replied, “Working on it. Will send
you shortly.”
AA
Exhibit C
Document received by the CA 1st District Court of Appeal.
mobile phone, published a tweet, “Am considering taking Tesla private at $420. Funding
Page 69 36.
At approximately 1:40 PM EDT, Musk tweeted, “I don’t have a controlling vote
now & wouldn’t expect any shareholder to have one if we go private. I won’t be selling in either
scenario.”
37.
At approximately 2:00 PM EDT, Musk tweeted, “My hope is *all* current
investors remain with Tesla even if we’re private. Would create special purpose fund enabling
anyone to stay with Tesla. Already do this with Fidelity’s SpaceX [a privately held company for
which Musk serves as CEO] investment.” In response to this tweet another Twitter user asked,
“Could we still invest once private?” Musk responded, “Yes, but liquidity events would be
limited to every 6 months or so (like SpaceX).”
At approximately 2:07 PM EDT, Musk responded to a Twitter user who wrote,
“Or if you do take Tesla private, please have a provision for retail investors who have held Tesla
shares prior to Dec 31, 2016 that those shares will be converted into private shares in the new
private company. . . .” by tweeting, “Absolutely. Am super appreciative of Tesla shareholders.
Will ensure their prosperity in any scenario.”
39.
Nasdaq rules specify that listed companies such as Tesla must notify Nasdaq at
least ten minutes prior to publicly releasing material information about corporate events like a
proposed going-private action. Musk did not notify Nasdaq prior to publishing his August tweets.
40.
At approximately 2:08 PM EDT, Nasdaq halted trading in TSLA shares.
41.
At approximately 2:13 PM EDT, Musk tweeted, “Shareholders could either to
[sic] at 420 or hold shares & go private.”
42.
At approximately 3:07 PM EDT, Musk responded to a Twitter user’s comment
about a “forced buyout” by tweeting, “Def. no forced sales. Hope all shareholders remain. Will
AA
Exhibit C
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38.
Page 70 be way smoother & less disruptive as a private company. Ends negative propaganda from
shorts.” Later that day, Musk “retweeted” this statement, causing it to be published again in his
Twitter feed.
43.
At approximately 3:16 PM EDT, Musk sent an email to Tesla employees. The
content of that email, entitled “Taking Tesla Private,” was published to a publicly available Tesla
blog at 3:32 PM EDT. In the email and blog post, Musk explained his reasons for wanting to
take Tesla private, including asserting that TSLA was “the most shorted stock in the history of
the stock market” and stating that “being public means there are large numbers of people who
have incentive to attack the company.”
In his company-wide email and blog post, Musk reiterated that he would like to
structure a Tesla going-private transaction “so that all shareholders have a choice. Either they
can stay investors in a private Tesla or they can be bought out at $420 per share . . . .” Musk
added, “This proposal to go private would ultimately be finalized through a vote of our
shareholders.”
45.
A few minutes after publishing the blog post, at approximately 3:36 PM EDT,
Musk tweeted a link to it in a tweet that stated, “Investor support is confirmed. Only reason why
this is not certain is that it’s contingent on a shareholder vote.” Neither Musk’s tweet nor the
blog post provided any further information or context about the meaning of Musk’s statement,
“Investor support confirmed,” or disclosed any contingencies other than a shareholder vote that
would have to be satisfied in order to take Tesla private.
46.
Approximately nine minutes later, at 3:45 PM EDT, Nasdaq lifted the trading halt
on Tesla shares. After trading resumed, Tesla’s stock price continued to rise, closing at $379.57,
up over 6% from the time Musk first tweeted about taking Tesla private earlier that day.
AA
Exhibit C
Document received by the CA 1st District Court of Appeal.
44.
Page 71 Reaction to Musk’s August 7 Statements
47.
Investors, stock analysts, and journalists immediately sought clarification of
Musk’s August 7 statements. At 1:00 PM EDT, approximately 12 minutes after Musk published
his tweet stating, “Am considering taking Tesla private at $420. Funding secured,” Tesla’s own
head of Investor Relations sent a text to Musk’s chief of staff asking, “Was this text legit?”
48.
At approximately 1:13 PM EDT, a Tesla investor and friend of Musk’s chief of
staff texted the chief of staff, “What’s Elon’s tweet about? Can’t make any sense of it. Would
be incredibly disappointing for shareholders that have stuck it out for so long.” A few minutes
later, at approximately 1:32 PM EDT, a business reporter texted Musk’s chief of staff, “Quite a
49.
At approximately 2:23 PM EDT, another reporter sent Musk an email with the
subject, “Are you just messing around?” and wrote, “Reaching out to see what’s going on with
your tweets about taking the company private? Is this just a 420 joke gone awry? Are you
serious? It seems like you are dancing into some pretty tricky legal territory by messing about
with the markets this way. Is there an actual explanation coming?”
50.
After Tesla published Musk’s email to Tesla employees on its blog, at
approximately 5:09 PM EDT on August 7, an investment bank research analyst emailed Tesla’s
head of Investor Relations, “In the tweet, he said financing is secured but in the letter he doesn’t
address this. Can you clarify?” Tesla’s head of Investor Relations responded approximately ten
minutes later, “I can only say that the first Tweet clearly stated that ‘financing is secured’. Yes,
there is a firm offer.”
51.
At approximately 5:23 PM EDT, another research analyst emailed Tesla’s head of
Investor Relations and another Investor Relations employee, “Had some questions/clarifications
AA
Exhibit C
Document received by the CA 1st District Court of Appeal.
tweet! (Is it a joke?).”
Page 72 on today’s news and blog post. Can either of you speak?” A few minutes later, Tesla’s head of
Investor Relations responded, “[A]part from what has been tweeted and what was written in a
blog post, we can’t add anything else. I only wanted to stress that Elon’s first tweet, which
mentioned ‘financing secured’ is correct.”
52.
After Tesla’s head of Investor Relations received another inquiry from another
investment bank research analyst at approximately 7:20 PM EDT, he asked whether the analyst
had read Tesla’s “official blog post on this topic.” The analyst responded, “I did. Nothing on
funding though?” The head of Investor Relations replied, “The very first tweet simply
mentioned ‘Funding secured’ which means there is a firm offer. Elon did not disclose details of
this a verbal agreement?” The head of Investor Relations responded, “I actually don’t know, but
I would assume that given we went full-on public with this, the offer is as firm as it gets.”
Additional Statements by Musk on August 53.
Musk did not make any attempt to clarify his August 7 statements until August
13. During the interim, Musk continued to publish statements via his Twitter account, including
an apparent joke on August 10 about “Short shorts coming soon to Tesla merch[andise].”
54.
On August 12, 2018, a news outlet reported that “people with knowledge of the
[F]und’s plans” said that it “hasn’t made any firm decisions on whether to increase its stake, or
by how much, but talks are ongoing . . . .”
55.
The following day, August 13, 2018, a blog post attributed to Musk called
“Update on Taking Tesla Private” was published on Tesla’s public blog. In the blog post, Musk
attempted to walk back his August 7 statements, stating publicly for the first time that when he
had tweeted, “Am considering taking Tesla private at $420. Funding secured,” it was based on
AA
Exhibit C
Document received by the CA 1st District Court of Appeal.
who the buyer is.” The analyst then asked, “Firm offer means there is a commitment letter or is
Page 73 his impression that there was “no question” that a deal with Fund could be closed and that it was
“just a matter of getting the process moving.”
56.
Musk’s August 13 post also disclosed for the first time that he was still in
discussions about taking Tesla private with the Fund and a number of other investors and that no
detailed proposal had been presented to the board or any board committee. This was contrary to
Musk’s August 7 tweet stating, “Only reason why this is not certain is that it’s contingent on a
shareholder vote.”
57.
Although it provided some new information about a potential transaction to take
Tesla private, Musk’s August 13 blog post still did not disclose that the $420 share price had not
in the blog post, Musk again stated that his “proposal was based on using a structure where any
existing shareholder who wished to remain as a shareholder in a private Tesla could do so, with
the $420 per share buyout used only for shareholders who preferred that option.” Musk did not
disclose that he had still not determined whether such a structure would be possible. After
abandoning the going-private transaction, Musk admitted that his assumption that it would be
possible for small shareholders to remain invested in Tesla as a private company was a
“fundamental misunderstanding.”
58.
At approximately 11:15 PM EDT on Friday, August 24, 2018, after the close of
official Nasdaq trading, a blog post was published on Tesla’s public blog announcing that Musk
had abandoned the process of attempting to take Tesla private.
59.
The August 24 blog post, attributed to Musk, stated:
Given the feedback I’ve received, it’s apparent that most of Tesla’s
existing shareholders believe we are better off as a public
company. Additionally, a number of institutional shareholders
have explained that they have internal compliance issues that limit
AA
Exhibit C
Document received by the CA 1st District Court of Appeal.
been agreed to by any potential funding source for a transaction to take Tesla private. Similarly,
Page 74 how much they can invest in a private company. There is also no
proven path for most retail investors to own shares if we were
private. Although the majority of shareholders I spoke to said they
would remain with Tesla if we went private, the sentiment, in a
nutshell, was “please don’t do this.”
This was the first time that Musk publicly disclosed the obstacles to allowing current Tesla
investors to remain invested if Tesla went private and thus corrected his multiple previous
misstatements that any going-private transaction would allow all current shareholders to remain
invested.
60.
On the next trading day, August 27, 2018, Tesla stock closed at $319.27, down
over 15% from the closing price of $379.57 on August 7, the date of Musk’s initial tweets about
Musk’s August 7 Statements Were Materially False and Misleading
61.
Musk made multiple materially false statements on August 7, and taken together,
his August 7 statements left market participants with the false and misleading impression that if
Musk chose to take Tesla private at $420 per share, the only outstanding requirement to be
satisfied was a shareholder vote.
62.
Musk’s first tweet on August 7 stated, “Am considering taking Tesla private at
$420. Funding secured.” Musk then repeated the $420 share price in at least two additional
tweets that day. Later that day, Musk also tweeted, “Investor support is confirmed. Only reason
why this is not certain is that it’s contingent on a shareholder vote.” Musk’s statements that
funding was “secured” and investor support was “confirmed” were false and misleading because,
in reality, Musk had no “secured” or “confirmed” commitment from any source to provide any
amount of funding. In addition, he had never even discussed taking Tesla private at a price of
$420 per share with the Fund or any other potential investor.
AA
Exhibit C
Document received by the CA 1st District Court of Appeal.
taking Tesla private.
Page 75 63.
Musk’s statement, “Only reason why this is not certain is that it’s contingent on a
shareholder vote,” was also false and misleading. In fact, there were numerous reasons in
addition to a shareholder vote why a going-private transaction was not “certain” at that time.
Any going-private transaction would have required approval of Tesla’s board or a speciallyappointed committee of the board, and at that time, no formal proposal to take Tesla private had
even been presented for consideration. In fact, no deal terms had been agreed upon with any
source of funding, and any large investment to fund such a transaction would likely have been
predicated on terms that the parties would have to negotiate and agree upon. For example, the
Fund had indicated that its investment might be contingent on Tesla building a production
transaction, and to which neither Musk nor Tesla had agreed. At least one Tesla board member
described such a condition as a “non-starter.”
64.
Musk’s August 7 statements, taken together, also created the misleading
impression that certain terms of a transaction to take Tesla private had been determined when, in
fact, they had not even been explored, and in some cases, proved to be impossible. On August 7,
Musk repeatedly stated that all current Tesla investors would be able to remain invested in Tesla
after a going-private transaction.
65.
Specifically, Musk tweeted, “My hope is *all* current investors remain with
Tesla even if we’re private. Would create special purpose fund enabling anyone to stay with
Tesla. Already do this with Fidelity’s SpaceX investment.” Musk also responded to another
Twitter user who wrote, “Or if you do take Tesla private, please have a provision for retail
investors who have held Tesla shares prior to Dec 31, 2016 that those shares will be converted
into private shares in the new private company. . . .” by tweeting, “Absolutely. Am super
AA
Exhibit C
Document received by the CA 1st District Court of Appeal.
facility in the Middle East, a condition that would have significantly complicated any
Page 76 appreciative of Tesla shareholders. Will ensure their prosperity in any scenario.” Musk also
tweeted, “Shareholders could either to [sic] at 420 or hold shares & go private.” Finally, in his
August 7 blog post, Musk stated “ . . . all shareholders have a choice. Either they can stay
investors in a private Tesla or they can be bought out at $420 per share . . . .”
66.
Musk also responded to a Twitter user who asked, “Could we still invest once
private?” by tweeting, “Yes, but liquidity events would be limited to every 6 months or so (like
SpaceX).”
67.
At the time of these statements, Musk had not determined or even explored
whether it would be possible (1) for individual investors to invest in Tesla if it was a private
to create a “special purpose fund enabling anyone to stay with Tesla”; or (4) to hold liquidity
events “every 6 months or so.” In fact, Musk later admitted, “I thought the vast majority of
existing investors would want to maintain their stake, and we would find a vehicle for small
investors to participate. That latter part was a fundamental misunderstanding that I just did not
know -- I thought there would be some way to retain small investors, but there isn’t.” Musk’s
statements regarding specific terms of a transaction to take Tesla private created the misleading
impression that these terms had been decided upon, when in fact, they had not even been
investigated or determined to be possible.
Musk Knew or Was Reckless in Not Knowing that His Statements Were False and
Misleading
68.
Musk made his false and misleading public statements about taking Tesla private
using his mobile phone in the middle of the active trading day. He did not discuss the content of
the statements with anyone else prior to publishing them to his over 22 million Twitter followers
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Exhibit C
Document received by the CA 1st District Court of Appeal.
company; (2) for all current Tesla shareholders to remain invested if Tesla were to go private; (3)
Page 77 and anyone else with access to the Internet. He also did not inform Nasdaq that he intended to
make this public announcement, as Nasdaq rules required.
69.
Musk’s statements were premised on a long series of baseless assumptions and
were contrary to facts that Musk knew. Between the July 31 meeting with representatives of the
Fund and his August 7 misstatements, Musk knew that he (1) had not agreed upon any terms for
a going-private transaction with the Fund or any other funding source; (2) had no further
substantive communications with representatives of the Fund beyond their 30 to 45 minute
meeting on July 31; (3) had never discussed a going-private transaction at a share price of $with any potential funding source; (4) had not contacted any additional potential strategic
contacted existing Tesla shareholders to assess their interest in remaining invested in Tesla as a
private company; (6) had not formally retained any legal or financial advisors to assist with a
going-private transaction; (7) had not determined whether retail investors could remain invested
in Tesla as a private company; (8) had not determined whether there were restrictions on illiquid
holdings by Tesla’s institutional investors; and (9) had not determined what regulatory approvals
would be required or whether they could be satisfied.
70.
In addition, Musk knew that Tesla’s board had not yet voted on any proposal or
authorized a shareholder vote on it, and in fact, Musk had not yet even submitted a formal
proposal to Tesla’s board.
71.
Musk did not disclose any of these material facts that were known to him when he
made his August 7 statements. Unlike market participants reading his tweets, Musk knew that
his ostensibly “secured” funding was based on a 30 to 45 minute conversation regarding a
potential investment of an unspecified amount in the context of an undefined transaction
AA
Exhibit C
Document received by the CA 1st District Court of Appeal.
investors to assess their interest in participating in a going-private transaction; (5) had not
Page 78 structure. Musk also knew that there were many uncertainties beyond just a shareholder vote
that would have had to be resolved before any going-private transaction could have been
possible. As a result, Musk knew or was reckless in not knowing that his August 7 statements
were false and misleading.
Musk Omitted Material Facts
72.
Musk’s statements on August 7 also omitted material information. Musk had a
duty to disclose material facts necessary to make his statements not misleading.
73.
Despite receiving numerous inquiries from journalists, research analysts, and
current Tesla investors indicating that they were confused by Musk’s tweets and that the August
statements until the blog post, “Update on Taking Tesla Private,” was issued on August 13.
74.
Moreover, the August 13 blog post still did not disclose that Musk had not
secured an agreement from any potential source of funding to fund a going-private transaction at
a price of $420 per share or that it was uncertain that a going-private transaction could be
accomplished in a manner that allowed existing Tesla shareholders to remain invested.
Musk’s Tweets Caused Market Chaos and Harmed Tesla Investors
75.
Immediately prior to Musk’s August 7 statements via Twitter, Tesla’s stock was
trading at $356.67. Musk’s first tweet about taking Tesla private set off a trading frenzy, and the
trading volume and price of Tesla shares immediately spiked. Nasdaq subsequently halted Tesla
trading for more than 90 minutes pending an official announcement from Tesla. At the end of
August 7, after Musk’s tweets and the post on Tesla’s blog, the stock closed at $379.57, up
6.42% from just prior to the first tweet.
AA
Exhibit C
Document received by the CA 1st District Court of Appeal.
7 blog post had not remedied that confusion, Musk did not attempt to clarify the August 7
Page 79 76.
By the close of market trading on August 13, after Musk and Tesla disclosed
more information about the details underlying Musk’s “funding secured” statement, Tesla’s
stock price had declined to around pre-tweet trading levels. By the close of trading on August
27, the first trading day after Musk announced that he was abandoning his proposal to take Tesla
private, Tesla’s stock had dropped to $319.44.
77.
As a result of Musk’s false and misleading statements and material omissions,
investors who purchased Tesla stock in the period after the false and misleading statements but
before accurate information was made known to the market were harmed.
CLAIM FOR RELIEF
78.
Paragraphs 1 through 77 are hereby re-alleged and are incorporated herein by
reference.
79.
Defendant, with scienter, in connection with the purchase or sale of securities as
set forth above, directly or indirectly made untrue statements of material fact and omitted to state
material facts necessary in order to make the statements made, in light of the circumstances
under which they were made, not misleading by the use of the means or instrumentalities of
interstate commerce, and of the mails, and the facilities of a national securities exchange.
80.
By reason of the foregoing, Defendant violated, and unless restrained and
enjoined will continue to violate, Section 10(b) of the Exchange Act, [15 U.S.C. § 78j(b)], and
Rule 10b-5 thereunder, [17 C.F.R. § 240.10b-5].
PRAYER FOR RELIEF
WHEREFORE, the Commission respectfully requests that the Court enter a Final
Judgment:
AA
Exhibit C
Document received by the CA 1st District Court of Appeal.
Violations of Section 10(b) of the Exchange Act and Rule 10b-5 Thereunder
Page 80 I.
Finding that Defendant violated the provisions of the federal securities laws as alleged
herein;
II.
Permanently restraining and enjoining Defendant from, directly or indirectly, engaging in
conduct in violation of Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-thereunder [17 C.F.R. § 240.10b-5];
III.
Ordering Defendant to disgorge, with prejudgment interest, any ill-gotten gains received
IV.
Ordering Defendant to pay civil penalties pursuant to Section 21(d)(3) of the Exchange
Act [15 U.S.C. § 78u(d)(3)];
V.
Ordering that Defendant be prohibited from acting as an officer or director of any issuer
that has a class of securities registered pursuant to Section 12 of the Exchange Act [15 U.S.C.
§ 78l] or that is required to file reports pursuant to Section 15(d) of the Exchange Act [15 U.S.C.
§ 78o(d)]; and
AA
Exhibit C
Document received by the CA 1st District Court of Appeal.
as a result of the violations alleged herein;
Page 81 VI.
Granting such other and further relief as this Court may deem just, equitable, or
necessary.
Dated: September 27,
Respectfully submitted,
/s/ Jina L. Choi
Jina L. Choi
Cheryl L. Crumpton*
E. Barrett Atwood*
U.S. Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. (202) 551-4459 (Crumpton)
crumptonc@sec.gov
44 Montgomery Street, Suite San Francisco, CA (415) 295-2467 (Atwood)
atwoodb@sec.gov
Of counsel:
Erin E. Schneider
Steven Buccholz
Walker S. Newell
Bernard B. Smith
AA
Exhibit C
Document received by the CA 1st District Court of Appeal.
*Application for admission pro hac vice
forthcoming
Page 82 Case
Filed 09/29/10/16/18 Page
Page 11 of
of 6 Filed
Document1:18-cv-08865-A JN Document
Case 1:18-cv-08865-AJN
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Plaintiff,
No. 1:18-cv-8865-AJN -GWG
vs.
ELON MUSK
Defendant.
CONSENT MOTION FOR ENTRY OF FINAL JUDGMENT
respectfully submits this consent motion to enter final judgment according to the parties'
settlement. In support of this motion, the Commission states the following:
1.
On September 27, 2018, the Commission filed a Complaint against Defendant
Musk alleging violations of the federal securities laws.
2.
The parties have reached a settlement agreement in this case. Attached hereto as
Exhibit 1 is the executed Consent of Defendant Elon Musk, setting forth the terms of his
settlement with the Commission.
3.
Attached hereto as Exhibit 2 is the proposed Final Judgment to which Defendant
Musk agreed. The proposed Final Judgment would pennanently enjoin him from violating
Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. It would also order him to
pay a penalty of $20,000,000 and to comply with the unde1iakings detailed in the Final
Judgment.
AA
Exhibit D
Document received by the CA 1st District Court of Appeal.
Plaintiff United States Securities and Exchange Commission (the "Commission")
Page 83 Case
Filed 09/29/10/16/18 Page
Page 22 of
of 6 Filed
Document1:18-cv-08865-AJN Document
Case1:18-cv-08865-AJN
The Commission respectfully requests that the Court enter the proposed Final Judgment
attached hereto as Exhibit 2.
Respectfully submitted,
Isl Jina L. Choi
Jina L. Choi
Cheryl L. Crumpton*
E. Barrett Atwood*
*Motion to appear pro hac vice pending
U.S. Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. (202) 551-4459 (Crumpton)
44 Montgomery Street, Suite San Francisco, CA (415) 705-2467 (Atwood)
AA
Document received by the CA 1st District Court of Appeal.
Dated: September 29,
Exhibit D
Page 84 AA
Document received by the CA 1st District Court of Appeal.
Exhibit D
Page 85 UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
UNITED STATES SECURITIES AND
EXCHANGE COMMISSION
Plaintiff,
No. 1:18-cv-8865-AJN -GWG
vs.
ELON MUSK,
Defendant.
1.
Defendant Elon Musk ("Defendant") waives service of a summons and the
complaint in this action, enters a general appearance, and admits the Court's jurisdiction over
Defendant in this action only and over the subject matter of this action.
2.
Without admitting or denying the allegations of the complaint (except as provided
herein in paragraph 13 and except as to personal jurisdiction as to this matter only and subject
matter jurisdiction, which Defendant admits), Defendant hereby consents to the entry of the final
Judgment in the fonn attached hereto (the "Final Judgment") and incorporated by reference
herein, which, among other things:
(a)
permanently restrains and enjoins Defendant from violation of Section
10(b) of the Securities Exchange Act of 1934 (the "Exchange Act") [US.C. § 78j(b)] and Rule lOb-5 thereunder [17 C.F.R. § 240.l0b-5];
(b)
orders Defendant to pay a civil penalty in the amount of $20,000,under Section 2l(d)(3) of the Exchange Act [15 US. C. § 78u(d)(3)}; and
(c)
requires Defendant to comply with the undertaking set forth in this
Consent and incorporated in the Final Judgment.
3.
Defendant acknowledges that the civil penalty paid pursuant to the Final
AA
Exhibit D
Document received by the CA 1st District Court of Appeal.
CONSENT OF DEFENDANT ELON MUSK
Page 86 Case 1:18-cv-08865-A
1:18-cv-08865-AJN
Document 6-14 Filed
ofPage42of
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Filed 10/16/JN Document
Case
Judgment may be distributed pursuant to the Fair Fund provisions of Section 308(a) of the
Sarbanes-Oxley Act of 2002, as amended. Regardless of whether any such Fair Fund
distribution is made, the civil penalty shall be treated as a penalty paid to the government for all
purposes, including all tax purposes. To preserve the deterrent effect of the civil penalty argue
that he is entitled to, nor shall he further benefit by, offset or reduction of any award of
compensatory damages in any Related Investor Action by the amount of any part of Defendant's
payment of a civil penalty in this action ("Penalty Offset"). If the court in any Related Investor
Action grants such a Penalty Offset, Defendant agrees that he shall, within 30 days after entry of
a final order granting the Penalty Offset, notify the Commission's counsel in this action and pay
the amount of the Penalty Offset to the United States Treasury or to a Fair Fund, as the
not be deemed to change the amount of the civil penalty imposed in this action. For purposes of
this paragraph, a "Related Investor Action" means a private damages action brought against
Defendant by or on behalf of one or more investors based on substantially the same facts as
alleged in the Complaint in this action.
4.
Defendant agrees that he shall not seek or accept, directly or indirectly,
reimbursement or indemnification from any source, including but not limited to payment made
pursuant to any insurance policy, with regard to any civil penalty amounts that Defendant pays
pursuant to the Final Judgment, regardless of whether such penalty amounts or any part thereof
are added to a distribution fund or otherwise used for the benefit of investors. Defendant further
agrees that he shall not claim, assert, or apply for a tax deduction or tax credit with regard to any
federal, state, or local tax for any penalty amounts that Defendant pays pursuant to the Final
Judgment, regardless of whether such penalty amounts or any part thereof are added to a
distribution fund or otherwise used for the benefit of investors.
5.
Defendant undertakes to:
(a)
resign from his role as Chairman of the Board of Directors of Tesla, Inc.
("Chairman") within forty-five (45) days of the filing of this Consent and
AA
Exhibit D
Document received by the CA 1st District Court of Appeal.
Commission directs. Such a payment shall not be deemed an additional civil penalty and shall
Page 87 agree not to seek reelection or to accept an appointment as Chairman for a
period of three years thereafter. Upon request by Defendant, the
Commission staff may grant in its sole discretion an extension to the
deadline set forth above;
(b)
comply with all mandatory procedures implemented by Tesla, Inc. (the
"Company") regarding (i) the oversight of communications relating to the
Company made in any format, including, but not limited to, posts on
social media (e.g., Twitter), the Company's website (e.g., the Company's
blog), press releases, and investor calls, and (ii) the pre-approval of any
such written communications that contain, or reasonably could contain,
(c)
ce1iify, in writing, compliance with undertaking (a) set forth above. The
certification shall identify the undertaking, provide written evidence of
compliance in the form of a narrative, and be supported by exhibits
sufficient to demonstrate compliance. The Commission staff may make
reasonable requests for further evidence of compliance,' and Defendant
agrees to provide such evidence. Defendant shall submit the certification
and supporting material to Steven Buchholz, Assistant Regional Director,
U.S. Securities and Exchange Commission, 44 Montgomery Street, 28th
Floor, San Francisco, CA 94104, with a copy to the Office of Chief
Counsel of the Enforcement Division, 100 F Street NE, Washington, DC
20549, no later than fourteen (14) days from the date of the completion of
the undertaking.
6.
Defendant waives the entry of findings of fact and conclusions of law pursuant to
Rule 52 of the Federal Rules of Civil Procedure.
7.
Defendant waives the right, if any, to a jury trial and to appeal from the entry of
the Final Judgment.
AA
Exhibit D
Document received by the CA 1st District Court of Appeal.
information material to the Company or its shareholders; and
Page 88 8.
Defendant enters into this Consent voluntarily and represents that no threats,
offers, promises, or inducements of any kind have been made by the Commission or any
member, officer, employee, agent, or representative of the Commission to induce Defendant to
enter into this Consent.
9.
Defendant agrees that this Consent shall be incorporated into the Final Judgment
with the same force and effect as if fully set forth therein.
10.
Defendant will not oppose the enforcement of the Final Judgment on the ground,
if any exists, oflack of compliance with Rule 65(d) of the Federal Rules of Civil Procedure, and
hereby waives any objection based thereon.
11.
Defendant waives service of the Final Judgment and agrees that entry of the Final
of its terms and conditions. Defendant further agrees to provide counsel for the Commission,
within thirty days after the Final Judgment is filed with the Clerk of the Court, with an affidavit
or declaration stating that Defendant has received and read a copy of the Final Judgment.
12.
Consistent with 17 C.F.R. § 202.S(f), this Consent resolves only the claims
asserted against Defendant in this civil proceeding. Defendant acknowledges that no promise or
representation has been made by the Commission or any member, officer, employee, agent, or
representative of the Commission with regard to any criminal liability that may have arisen or
may arise from the facts underlying this action or immunity from any such criminal liability.
Defendant waives any claim of Double Jeopardy based upon the settlement of this proceeding,
including the imposition of any remedy or civil penalty herein. Defendant further acknowledges
that the Court's entry of a permanent injunction may have collateral consequences under federal
or state law and the rnles and regulations of self-regulatory organizations, licensing boards, and
other regulatory organizations. Such collateral consequences include, but are not limited to, a
statutory disqualification with respect to membership or participation in, or association with a
member of, a self-regulatory organization. This statutory disqualification has consequences that
are separate from any sanction imposed in an administrative proceeding. In addition, in any
AA
Exhibit D
Document received by the CA 1st District Court of Appeal.
Judgment by the Court and filing with the Clerk of the Court will constitute notice to Defendant
Page 89 Case 1:18-cv-1:18-cv-08865-AJN
Document 6-14 Filed
ofPage75of
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Filed 10/16/5-AJN Document
Case
disciplinary proceeding before the Commission based on the entry of the injunction in this
action, Defendant understands that he shall not be permitted to contest the factual allegations of
the complaint in this action.
13.
Defendant understands and agrees to comply with the terms of 17 C.F .R. §
202.5(e), which provides in part that it is the Commission's policy "not to permit a defendant or
respondent to consent to a judgment or order that imposes a sanction while denying the
allegations in the complaint or order for proceedings," and "a refusal to admit the allegations is
equivalent to a denial, unless the defendant or respondent states that he neither admits nor denies
the allegations." As part of Defendant's agreement to comply with the terms of Section 202.5( e),
Defendant: (i) will not take any action or make or permit to be made any public statement
complaint is without factual basis; (ii) will not make or permit to be made any public statement
to the effect that Defendant does not admit the allegations of the complaint, or that this Consent
contains no admission of the allegations, without also stating that Defendant does not deny the
allegations; (iii) upon the filing of this Consent, Defendant hereby withdraws any papers filed in
this action to the extent that they deny any allegation in the complaint; and (iv) stipulates solely
for purposes of exceptions to discharge set forth in Section 523 of the Bankruptcy Code [J U.S.C. § 523} that the allegations in the complaint are trne, and further, that any debt for
disgorgement, prejudgment interest, civil penalty or other amounts due by Defendant under the
Final Judgment or any other judgment, order, consent order, decree or settlement agreement
entered in connection with this proceeding, is a debt for the violation by Defendant of the federal
securities laws or any regulation or order issued under such laws, as set forth in Section
523(a)(19) of the Bankruptcy Code [I 1 U.S.C. § 523(a)(19)}. If Defendant breaches this
agreement, the Commission may petition the Court to vacate the Final Judgment and restore this
action to its active docket. Nothing in this paragraph affects Defendant's: (i) testimonial
obligations; or (ii) right to take legal or factual positions in litigation or other legal proceedings
in which the Commission is not a party.
AA
Exhibit D
Document received by the CA 1st District Court of Appeal.
denying, directly or indirectly, any allegation in the complaint or creating the impression that the
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14.
Defendant hereby waives any rights under the Equal Access to Justice Act, the
Small Business Regulatory Enforcement Fairness Act of 1996~ or any other provision of law to
seek from the 1.Jnited States, or any agency, or any official of the United States acting in his or
her official capacity, directly or indirectly, reimbursement
or attorney's fees or other fees,
expenses, or costs expended by Defendant to defend against this action. For these purposes,
Defendant agrees that Defendant is not the prevailing party in this action since the parties have
reached a good faith settlement.
15.
Defendant agrees that the Commission may present the Final Judgment to the
Court for signature and entry \Vithout rurther notice.
16.
Defendant agrees that this Court shall retain jurisdiction over this matter for the
Dated:
_j;L_j/t_____..,·~~-
,
Elon Musk
a person known to me,
2018,. eAo Vi Mus
personally appeared before me and acknowledged executing the foregoing Consent.
Approved as to form:
Steven M. Farina
Williams & Connolly LLP
725 Twelfth Street N. W.
Washington, DC Attorney for Defendant

AA
Exhibit D
Document received by the CA 1st District Court of Appeal.
purpose of en forcing the tenns of the Final Judgment.
Page 91 CALIFORNI A JURAT
STA TE OF CALIFORNIA
COUNTY OF ALAMEDA
)
) ss.
)
Subscribed and sworn to (or affirmed) before me on this 28th day of September 2018, by Elon
Musk, proved to me on the basis of satisfactory evidence to be the person(s) who appeared
before me.
WITNESS my hand and official seal.
--~-
ALESSANDRMRANCESCAFERRIS
Notary Pi!t,lic -· California
Santa Claril
Comrn;ss:ori
My Ccmm. Expires Oc! 20.
(Seal)
Notar) ~ 1c
State of California
AA
Exhibit D
Document received by the CA 1st District Court of Appeal.
A notary public or other officer completing this
certificate verifies only the identity of the individual who
signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or validity
of that document.
Page 92 Case
of Page101 of
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Filed10/16/6-2 Filed
Document1:18-cv-08865-AJN Document
Case 1:18-cv-08865-AJN
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
UNITED STATES SECURITIES AND
EXCHANGE COMMISSION
Plaintiff,
No. 1:18-cv-8865-AJN -GWG
vs.
ELON MUSK,
Defendant.
The Securities and Exchange Commission having filed a Complaint and Defendant Elon
Musk having entered a general appearance; consented to the Court's jurisdiction over Defendant
in this matter only and the subject matter of this action; consented to entry of this Final Judgment
without admitting or denying the allegations of the Complaint (except as to jurisdiction and
except as otherwise provided herein in paragraph III); waived findings of fact and conclusions of
law; and waived any right to appeal from this Final Judgment:
I.
IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Defendant is
permanently restrained and enjoined from violating, directly or indirectly, Section 10(b) of the
Securities Exchange Act of 1934 (the "Exchange Act") [15 US.C. § 78j(b)J and Rule lOb-promulgated thereunder [17 C.F.R. § 240.1 0b-5}, by using any means or instrumentality of
interstate commerce, or of the mails, or of any facility of any national securities exchange, in
connection with the purchase or sale of any security:
(a)
to employ any device, scheme, or artifice to defraud;
(b)
to make any untrue statement of a material fact or to omit to state a
material fact necessary in order to make the statements made, in the light
AA
Exhibit D
Document received by the CA 1st District Court of Appeal.
FINAL JUDGMENT AS TO DEFENDANT ELON MUSK
Page 93 Case
of Page112 of
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Document1:18-cv-08865-A JN Document
Case 1:18-cv-08865-AJN
of the circumstances under which they were made, not misleading; or
(c)
to engage in any act, practice, or course of business which operates or
would operate as a fraud or deceit upon any person.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as provided in
Federal Rule of Civil Procedure 65( d)(2), the foregoing paragraph also binds the following who
receive actual notice of this Final Judgment by personal service or otherwise: (a) Defendant's
agents, servants, employees, and attorneys; and (b) other persons in active concert or
participation with Defendant or with anyone described in (a).
II.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant shall pay a
to Section 21(d)(3) of the Exchange Act [J 5 U.S. C. § 78u(d)(3)}. Defendant shall make this
payment within 14 days after entry of this Final Judgment.
Defendant may transmit payment electronically to the Commission, which will provide
detailed ACH transfer/Fedwire instructions upon request. Payment may also be made directly
from a bank account via Pay.gov through the SEC website at
http://www.sec.gov/about/offices/ofm.htm. Defendant may also pay by certified check, bank
cashier's check, or United States postal money order payable to the Securities and Exchange
Commission, which shall be delivered or mailed to
Enterprise Services Center
Accounts Receivable Branch
6500 South MacArthur Boulevard
Oklahoma City, OK and shall be accompanied by a letter identifying the case title, civil action number, and name of
this Court; Elon Musk as a defendant in this action; and specifying that payment is made
pursuant to this Final Judgment.
Defendant shall simultaneously transmit photocopies of evidence of payment and case
identifying information to the Commission's counsel in this action. By making this payment,

AA
Exhibit D
Document received by the CA 1st District Court of Appeal.
civil penalty in the amount of $20,000,000 to the Securities and Exchange Commission pursuant
Page 94 Case
of 3 of
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Case 1:18-cv-08865-AJN
Defendant relinquishes all legal and equitable right, title, and interest in such funds and no part
of the funds shall be returned to Defendant.
Defendant shall pay post judgment interest on any delinquent amounts pursuant to U.S.C. § 1961. The Commission shall hold the funds, together with any interest and income
earned thereon (collectively, the "Fund"), pending further order of the Court.
The Commission may propose a plan to distribute the Fund subject to the Court's
approval. Such a plan may provide that the Fund shall be distributed pursuant to the Fair Fund
provisions of Section 308( a) of the Sarbanes-Oxley Act of 2002, as amended. The Court shall
retain jurisdiction over the administration of any distribution of the Fund. If the Commission
staff determines that the Fund will not be distributed, the Commission shall send the funds paid
Regardless of whether any such Fair Fund distribution is made, amounts ordered to be
paid as civil penalties pursuant to this Judgment shall be treated as penalties paid to the
government for all purposes, including all tax purposes. To preserve the deten-ent effect of the
civil penalty, Defendant shall not argue that he is entitled to, nor shall he further benefit by offset
or reduction of any award of compensatory damages in any Related Investor Action by the
amount of any part of Defendant's payment of a civil penalty in this action ("Penalty Offset"). If
the court in any Related Investor Action grants such a Penalty Offset, Defendant shall, within days after entry of a final order granting the Penalty Offset, notify the Commission's counsel in
this action and pay the amount of the Penalty Offset to the United States Treasury or to a Fair
Fund, as the Commission directs. Such a payment shall not be deemed an additional civil
penalty and shall not be deemed to change the amount of the civil penalty imposed in this
Judgment. For purposes of this paragraph, a "Related Investor Action" means a private damages
action brought against Defendant by or on behalf of one or more investors based on substantially
the same facts as alleged in the Complaint in this action.
III.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, solely for purposes of
AA
Exhibit D
Document received by the CA 1st District Court of Appeal.
pursuant to this Final Judgment to the United States Treasury.
Page 95 Case
of 4 of
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Document 1:18-cv-08865-AJN Document
Case 1:18-cv-08865-AJN
exceptions to discharge set forth in Section 523 of the Bankruptcy Code [11 U.S. C. § 523} the
allegations in the complaint are true and admitted by Defendant, and further, any debt for
disgorgement, prejudgment interest, civil penalty or other amounts due by Defendant under this
Final Judgment or any other judgment, order, consent order, decree or settlement agreement
entered in connection with this proceeding, is a debt for the violation by Defendant of the federal .
securities laws or any regulation or order issued under such laws, as set forth in Section
523(a)(19) of the Banlauptcy Code [11 U.S.C. § 523(a)(19)]. Nothing in this paragraph (a)
constitutes an admission by Defendant for any purpose other than determining the applicability
of Section 523(a)(l 9) or (b) affects Defendant's (i) testimonial obligations; or (ii) right to take
any legal or factual positions in litigation or other legal proceedings in which the Commission is
IV.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that the Consent is
incorporated herein with the same force and effect as if fully set forth herein, and that Defendant
shall comply with all of the undertakings set forth therein, including, but not limited to, the
undertakings to:
(a)
resign from his role as Chairman of the Board of Directors of Tesla, Inc.
("Chairman") within forty-five (45) days of the filing of this Consent and
agree not to seek reelection or to accept an appointment as Chairman for a
period of three years thereafter. Upon request by Defendant, the
Commission staff may grant in its sole discretion an extension to the
deadline set forth above;
(b)
comply with all mandatory procedures implemented by Tesla, Inc. (the
"Company") regarding (i) the oversight of communications relating to the
Company made in any fonnat, including, but not limited to, posts on
social media (e.g., Twitter), the Company's website (e.g., the Company's
blog), press releases, and investor calls, and (ii) the pre-approval of any
AA
Exhibit D
Document received by the CA 1st District Court of Appeal.
not a party.
Page 96 Case
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such written communications that contain, or reasonably could contain,
infonnation material to the Company or its shareholders; and
(c)
certify, in writing, compliance with undertaking (a) set forth above. The
certification shall identify the undertaking, provide written evidence of
compliance in the form of a narrative, and be supported by exhibits
sufficient to demonstrate compliance. The Commission staff may make
reasonable requests for further evidence of compliance, and Defendant
agrees to provide such evidence. Defendant shall submit the certification
and supporting material to Steven Buchholz, Assistant Regional Director,
U.S. Securities and Exchange Commission, 44 Montgomery Street, 28th
Counsel of the Enforcement Division, 100 F Street NE, Washington, DC
20549, no later than fourteen (14) days from the date of the completion of
the undertaking.
V.
IT IS FURTHER ORDERED, ADWDGED, AND DECREED that this Court shall retain
jurisdiction of this matter for the purposes of enforcing the terms of this Final Judgment.
s J. Nathan
Hon.
UNITED STATES DISTRICT WDGE
AA
Exhibit D
Document received by the CA 1st District Court of Appeal.
Floor, San Francisco, CA 94104, with a copy to the Office of Chief
Page 97 AA
Document received by the CA 1st District Court of Appeal.
Exhibit E
Page 98 5/1/
CA DMV Report Sheds New Light On Misleading Tesla Autonomous Drive Video
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CA DMV Report Sheds New Light On
Misleading Tesla Autonomous Drive
Video
The DailyKanban Newsbot
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Autopilot Navigation Error - Bloomberg
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by the CA 1st District Court of Appeal.
Big crowds, 'softball' questions and turkey
February 3, 2017 By Edward Niedermeyer
wraps - CNBC
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Citroen, Volvo - Automotive News
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More Analysis
https://dailykanban.com/2017/02/ca-dmv-report-sheds-new-light-misleading-tesla-autonomous-drive-video/
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1/6
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CA DMV Report Sheds New Light On Misleading Tesla Autonomous Drive Video
No drones!
Tesla’s Shanghai
construction site
has received all
the attention it
On October 20th of last year Tesla Motors¬published¬an official blog post announcing an important
development:
wants
“as of today, all Tesla vehicles produced in our factory – including Model 3 – will have
3 am delivery:
Tesla’s mad dash
to make its
quarter in China
the hardware needed for full self-driving capability at a safety level substantially
greater than that of a human driver.”
Tesla backed up this bold claim with a slick video, set to The Rolling Stones’ “Paint It Black,” which
depicted one of the company’s Model X SUVs driving itself from a home in the Bay Area to the
company’s headquarters near the Stanford University campus, apparently with no driver input. In a
tweet¬linking to the video, Tesla’s CEO Elon Musk described this demonstration in no uncertain terms:
World’s Largest Automakers 2019: Toyota
maintains its lead
Why Haven’t Over-The-Air Updates Taken
Over The Auto Industry?
Junheng Li: NIO is “an appetizing opportunity
to short.”
“Tesla drives itself (no human input at all) thru urban streets to highway to streets, then
finds a parking spot”
failed to prevent, the video prompted a return to the fawning, uncritical media coverage that
characterized the initial launch of Autopilot.¬And by advertising a new sensor suite that made all existing
Teslas obsolete, the company was able to bolster demand for its cars even as it discontinued the
discounts that had driven sales in the third quarter. Like so many of Tesla’s publicity stunts, the video
was a masterpiece of viral marketing that drove the company’s image to new heights… but like so many
of Tesla’s publicity stunts it also turns out to have been extremely misleading.
Companies like Tesla who test drive autonomous vehicles on public roads in California are required to
submit an annual report the the state Department of Motor Vehicles detailing every instance in which the
autonomous drive system “disengaged” while on public roads and a human driver took over. This week
the California DMV released the¬“disengagement reports” each company submitted for 2016, providing
the public with its first insight into the various autonomous drive technology testing efforts underway in
the state. Thanks to Tesla’s report [PDF] we now know¬that the company’s self-driving demonstration
video did not in fact depict the unassisted autonomous trip the company initially claimed.
https://dailykanban.com/2017/02/ca-dmv-report-sheds-new-light-misleading-tesla-autonomous-drive-video/
AA
Stories We Wrote Elsewhere:
Ed’s Op Eds
by the CA 1st District Court of Appeal.
After months of negative news about Tesla’s Autopilot in the wake of a deadly crash that the system had
Welcome to
General Tso’s
Motors (SWWE)
Taking Taxpayers
for a Ride
Romney’s Plan
Would Also Have
‘Saved’ Detroit
(SWWE)
G.M.’s Electric Lemon (SWWE)
2/6
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CA DMV Report Sheds New Light On Misleading Tesla Autonomous Drive Video
In 2016 Tesla recorded just 550 miles of autonomous drive testing on California roads, fewer than the
majority of its competitors which include established automakers, Tier One suppliers and Silicon Valley
technology firms. All but 20 of those miles were driven in the month of October, and the vast majority of
those miles were driven between the 14th and the 17th of the month. A source who lives in the Palo Alto
area and witnessed production of the demonstration video tells Daily Kanban that Tesla was filming over
those four days, and independently confirmed that the demonstration followed the route depicted here.
This eyewitness also tells Daily Kanban that Tesla shot sections of the video in multiple takes and that
A Green Detroit?
No, a Guzzling
One (SWWE)
the company stopped filming on Highway 280 when rush hour traffic picked up, apparently in order to
make the demonstration less challenging.
According to the same source, it rained in Palo Alto during the first few days of filming¬and Tesla’s
disengagement report confirms that its autonomous vehicle experienced wet road conditions on the 14th,
15th and 16th, while road conditions on the 17th were dry. Tesla’s video shows¬its Model X navigating
dry roads, suggesting that most or all of the footage that made the final cut was obtained on or after the
17th (a subsequently-released video does show a self-driving Tesla in more humid conditions). Musk had
initially tweeted¬that¬the unveiling of the new Autopilot hardware suite would take place on¬the 17th, but
on the 16th (after several days of filming marred by rain) he announced that the announcement would
take place two days later, saying “Moving the Tesla announcement to Wednesday. Needs a few more
days of refinement.” On the evening of the 19th Musk¬tweeted¬“Will post video of a Tesla navigating a
midnight¬he followed up with a tweet stating¬“Still working on the video. Fully autonomous drive demo
only completed several hours ago.” None of Musk’s tweets or Tesla’s official communications mention
weather as a cause for the delay, which might have raised questions about the new Autopilot system’s
ability to operate in adverse weather conditions.
More troublingly, Tesla’s California DMV disengagement report¬undercuts the fundamental claim Tesla
and Musk made about its demonstration video. The video begins with the following notice:
“The person in the driver’s seat is only there for legal reasons. He is not doing anything.
The car is driving itself.”
https://dailykanban.com/2017/02/ca-dmv-report-sheds-new-light-misleading-tesla-autonomous-drive-video/
AA
Bertel’s Boneyard
by the CA 1st District Court of Appeal.
complex urban environment shortly. That was what took the extra couple of days,” and just after
Autobiography of
BS©: How I
Invented
Interactive Video
Autobiography of
BS©: The World’s
Most Elaborate
Duck Trap
3/6
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CA DMV Report Sheds New Light On Misleading Tesla Autonomous Drive Video
Autobiography of
BS©: How I
Violated the One
China Principle
Yet Tesla’s disengagement report shows that a human driver had to take over control of the vehicle
numerous times during filming, for a variety of reasons. ¬The majority of these disengagments are
categorized with vague descriptions like “Follower Output Invalid” and “Planner Output Invalid” but
they include more specific categories as well including “ACC Cancel,” “Cruise Fault,” and the ominoussounding “Health Monitor.” 177 of the 182 disengagements that Tesla reported during 2016 took place
between October 14 and October 17th, indicating that a human driver had to take over control of Tesla’s
ostensibly self-driving car many times during the filming of its demonstration video.
Autobiography of
BS©: How Car
Catalogs Killed
Creatives
Based on these data alone it is impossible to say definitively that a self-driving Tesla did not drive the
demonstration route without a single disengagement or any human input. But combined with eyewitness
reports of multiple days worth of filming, it’s clear that at a minimum Tesla’s system had many attempts
to practice the route before recording a truly autonomous run. This alone would have given the system
an edge that takes away from the video’s impact as a demonstration of autonomous drive technology. So
to do the reports that Tesla only filmed during the hours between the morning and evening rush hours,
Autobiography of
BS©: How I Lied
About The Golf
which made the demonstration far less challenging. The fact that a Tesla representative insisted that the
demonstration drive started in Fremont, CA (resulting in a correction to this post of mine at Bloomberg
View) when both our eyewitness source,¬a Redditor¬and SeekingAlpha’s Paulo Santos all independently
reported that the route started in Palo Alto suggests a pattern of systematic misrepresentation. This
pattern in turn builds off of a much larger pattern of misleading communications by Tesla about its
This pattern has been noticed by Tesla fans who are already aggravated by the slow rollout of Autopilot
capabilities to vehicles with the new hardware suite. One commenter at the Tesla Motors Club forum
notes
by the CA 1st District Court of Appeal.
Autopilot system and its putative capabilities.
Search Dailykanban
Removed searchbox. It slows the site down. Use
Today’s Electrek article documents why Tesla’s autonomous driving project isn’t
progressing quite as quickly as some of us would like. Seems they drove about miles in October 2016, and most of that apparently was focused on producing Elon
Musk’s self-driving car video. Once that was out the door, the testing stopped almost
completely. Stats like these fairly accurately document the vaporware that most APbuyers are experiencing.
https://dailykanban.com/2017/02/ca-dmv-report-sheds-new-light-misleading-tesla-autonomous-drive-video/
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"site:dailykanban.com, whattosearchfor" ia your
Google search
4/6
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CA DMV Report Sheds New Light On Misleading Tesla Autonomous Drive Video
Another¬adds
Holy crap that report is depressing.
If you look at all the self driving, it happened between the 14th and 17th of October.
They were originally supposed to announce AP2 on Oct 17th, but they didn’t until the
19th for “more refinement.” Now we know why.
It appears it took them 550 miles and 168 disconnect events. That’s a disconnect every
3.3 miles. Given they wanted a video without disconnects, it quite possibly took them
169 tries to get a video they could use.
It’s never good when a company’s customers and fans feel like they’ve been sold a bill of goods, but in
this case there is even more at stake. The run of bad news about Autopilot that Tesla’s video managed to
wash away was based not on a technical failure of the system itself, but on drivers overestimating the
capabilities of the system. When drivers believe that a semi-autonomous system is more capable than it
of keeping them safe. Tesla has made some progress on this issue, for example making Autopilot’s 8.software more insistent about reminding drivers to maintain control at all times, but by selling the new
Autopilot hardware as being capable of becoming fully self-driving and then bolstering that claim with a
video that understated the lack of driver input actually needed, Tesla took another big step in the wrong
direction. At best it misled and frustrated Tesla’s customers and fans; at worst, it might have planted a
perception that could cause a Tesla driver to put a fatal amount of trust in the new Autopilot system.
¬
Discuss, or share via:
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Related
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by the CA 1st District Court of Appeal.
really is, they pay less attention and run the risk of over-relying on a system that is not actually capable
5/6
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CA DMV Report Sheds New Light On Misleading Tesla Autonomous Drive Video
Thursday Morning Auto News, Oct
25, October 25, In “Morning News”
Filed Under: Analysis
Thursday Morning Auto News,
Aug 02, August 2, In “Morning News”
Friday Morning Auto News, Oct
19, October 19, In “Morning News”
Tagged With: Autonomous, Autopilot, Communication, Elon Musk, Hardware,
Marketing, PR, self-driving, self-driving car, Sensors, Tesla, video First published on February 3, 2017 3:36 pm
https://dailykanban.com/2017/02/ca-dmv-report-sheds-new-light-misleading-tesla-autonomous-drive-video/
Copyright ©¬2019 dailykanban.com - All rights reserved - Terms & Conditions - Privacy Policy
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by the CA 1st District Court of Appeal.
Return to top of page
6/6
Page 104 AA
Document received by the CA 1st District Court of Appeal.
Exhibit F
Page 105 5/1/
Tesla incident: RGJ photographer pays trespass fine, battery charges dropped
2019 Volkswagen
This Memorial Day,
sign, then drive, then
barbeque.
Tiguan
Tiguan SEL Premium with
4MOTION® shown
Tesla incident: RGJ photographer pays trespass fine,
battery charges dropped
Published 10:42 a.m. PT Jan. 4, 2018 | Updated 3:37 p.m. PT Jan. 4,
The Storey County district attorney has dropped misdemeanor battery charges against Reno Gazette Journal
photographer Andy Barron, who has paid a fine for trespassing while taking photos from a hilltop overlooking
the Tesla gigafactory construction site.
by the CA 1st District Court of Appeal.
Anjeanette Damon, adamon@rgj.com
The fine resolves a two­year­old case that stemmed from an altercation between Barron and two Tesla security
guards, who attempted to confiscate his camera. The guards accused Barron of attempting to ram them with
his vehicle as he was leaving the hillside.
(Photo: Jason Bean)
District Attorney Anne Langer said that after further reviewing the case, she decided she would not be able to
prove beyond a reasonable doubt that Barron intended to harm the guards.
"The fact of the matter is I felt if I were to take the battery part of the case into a trial, I wouldn't be able to prove the intent issue," Langer said.
2 free articles left. Only $5 for 3 months.
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https://www.rgj.com/story/news/2018/01/04/tesla-incident-rgj-photographer-pays-trespass-fine-battery-charges-dropped/10

Exhibit F
1/4
Page 106 5/1/
Tesla incident: RGJ photographer pays trespass fine, battery charges dropped
Barron,Support
a 20­year veteran
was today
initially arrested on felony battery charges. Those charges were reduced to misdemeanors and ultimately
localphotographer,
journalism
dropped. Reporter Jason Hidalgo, who was with Barron, was not arrested but also paid a $195 fine for trespassing.
$for 3 months. Save 83%.
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A Tesla spokeswoman declined to comment on the case.
In October 2015, Barron and Hidalgo traveled to the Tahoe­Reno Industrial Center to photograph progress on the construction of the Tesla gigafactory.
by the CA 1st District Court of Appeal.
John Arrascada, Barron's lawyer, said the photographer "accepted responsibility for his actions" by paying the trespassing fine.
They parked their RGJ Jeep in a publicly accessible area of the industrial park and climbed a hill with a view of the factory, passing “no trespassing” signs
along the way.
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A Tesla security guard spotted the duo and confronted Barron, demanding his camera. Barron and Hidalgo attempted to leave, walking down the hill and
climbing into their Jeep, where another security guard was waiting.
Tesla released a statement after the incident saying Barron, who was driving, accelerated at two guards and hit their ATV in an attempt to flee. RGJ
of his seat belt with a knife, dragging him out of the vehicle and shoving him to the ground.
The $5 billion gigafactory, a joint project with Panasonic, manufactures lithium­ion batteries. It began construction in May 2014. The Reno Gazette
Journal documented the construction process from the beginning of the project.
by the CA 1st District Court of Appeal.
lawyer Scott Glogovac sent a letter in response stating the two guards rammed the Jeep and smashed the window with a rock before cutting Barron out
The factory is taking advantage of up to $1.25 billion in tax incentives approved by the Nevada Legislature last year. The project is considered a crowning
achievement in Gov. Brian Sandoval’s economic development agenda.
Editor's note: This story was edited to clarify the position of the two security guards on the hill.
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Exhibit G
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When Elon Musk Tried to Destroy Tesla Whistleblower Martin Tripp - Bloomberg
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Bloomberg Businessweek
Welcome, lawrence.fossi
Updated Tried
on March 13,to
2019,
12:40 PM EDT a Tesla Whistleblower
When Elon Musk
Destroy
March 13, 2019, 5:00 AM EDT
It started with a Twitter meltdown and ended with a fake mass shooter. A former security
manager says the company also spied and spread misinformation.
https://www.bloomberg.com/news/features/2019-03-13/when-elon-musk-tried-to-destroy-tesla-whistleblower-martin-tripp
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Exhibit G
by the CA 1st District Court of Appeal.
By Matt Robinson and Zeke Faux
From Hyperdrive
1/21
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▲ Tesla’s “be on the lookout” flyer alerting employees following what turned out to be a bogus warning of a mass shooter.
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Exhibit G
by the CA 1st District Court of Appeal.
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By the larger-than-life standards of Elon Musk, the story was far from a
blockbuster. On June 4, 2018, Business Insider reported that Tesla Inc. was
scrapping or reworking 40 percent of the raw materials at the Gigafactory, its
huge battery plant in the Nevada desert. The article cited a source who figured the
Post
inefficiency had cost Musk’s electric car company $150 million, describing giant
Email
piles of scrap materials in the factory. Tesla denied the report, and a few hours
later, the world moved on.
The world, that is, except Elon Musk. Although he wasn’t asked about the Business
Insider story the following day at the company’s annual meeting, he stewed for weeks,
dispatching a team of investigators to try to figure out who’d shared the information with
the press.
The leaker, they determined, was one Martin Tripp, a slight man of 40 who’d spent
his career in a series of low-level manufacturing jobs before finding his way to the
assembly line at the Gigafactory. Tripp later claimed to be an idealist trying to get Tesla
to tighten its operations; Musk saw him as a dangerous foe who engaged in “extensive
and damaging sabotage,” as he wrote in a staff memo. He implied that Tripp had shared
the data not only with the press but also with “unknown third parties.”
https://www.bloomberg.com/news/features/2019-03-13/when-elon-musk-tried-to-destroy-tesla-whistleblower-martin-tripp
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Exhibit G
by the CA 1st District Court of Appeal.
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Exhibit G
by the CA 1st District Court of Appeal.
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Could larger forces be at work? Musk wondered out loud. Could Tripp be
coordinating with one of Tesla’s many enemies—oil companies, rival automakers, or Wall
Street short sellers? “There are a long list of organizations that want Tesla to die,” he
warned.
On June 20, the company sued Tripp for $167 million. Later that day, Tripp heard
from the sheriff ’s department in Storey County, Nev. Tesla’s security department had
passed a tip to police. An anonymous caller had contacted the company to say Tripp was
planning a mass shooting at the Gigafactory.
When the police confronted Tripp that evening, he was unarmed and in tears. He said
he was terrified of Musk and suggested the billionaire might have called in the tip
himself. A sheriff ’s deputy attempted to cheer up Tripp and then called Tesla to tell the
accounts from police, former employees, and documents produced by Tesla’s own
internal investigation reveal, Musk set out to destroy him.
Tesla’s PR department spread rumors that Tripp was possibly homicidal and had
been part of a grand conspiracy. On Twitter, Musk suggested the Business Insider
reporter, Linette Lopez, was on the payroll of short sellers and claimed Tripp had
admitted to taking bribes from her in exchange for “valuable Tesla IP.” Lopez denied the
allegation.
https://www.bloomberg.com/news/features/2019-03-13/when-elon-musk-tried-to-destroy-tesla-whistleblower-martin-tripp
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Exhibit G
by the CA 1st District Court of Appeal.
company that the threat, whoever had made it, was bogus. Tripp wasn’t dangerous.
Many chief executive officers would try to ignore somebody like Tripp. Instead, as
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Bloomberg
Share
Don't F­­­ With Elon, Read Aloud
The Tripp incident was the beginning of a social media meltdown so epic that the U.S.
Securities and Exchange Commission forced Tesla to appoint a so-called Twitter sitter, an
in-house lawyer who’s supposed to vet Musk’s tweets. Since last summer, Musk’s antics
have included:
① Baselessly accusing a British cave diver on Twitter of pedophilia;
② Falsely claiming on (where else?) Twitter that investors had put up funds to take
Tesla private at $420 a share, leading to an SEC lawsuit;
③ Somehow igniting a feud with B-list hip-hop artist Azealia Banks (“Elon will learn
very soon who is more powerful of us two,” Banks posted on Instagram);
https://www.bloomberg.com/news/features/2019-03-13/when-elon-musk-tried-to-destroy-tesla-whistleblower-martin-tripp
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Exhibit G
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Cookie policy
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④ Puffing a joint during a live podcast taping, causing the federal government to
When Elon Musk Tried to Destroy Tesla Whistleblower Martin Tripp - Bloomberg
review the security clearance needed for his rocket company, SpaceX.
Musk’s treatment of Tripp threatens to complicate this legal and regulatory mess. The
security manager at the Gigafactory, an ex-military guy with a high-and-tight haircut
named Sean Gouthro, has filed a whistleblower report with the SEC. Gouthro says Tesla’s
security operation behaved unethically in its zeal to nail the leaker. Investigators, he
claims, hacked into Tripp’s phone, had him followed, and misled police about the
surveillance. Gouthro says that Tripp didn’t sabotage Tesla or hack anything and that
Musk knew this and sought to damage his reputation by spreading misinformation.
A Tesla spokeswoman said in a statement that Gouthro’s allegations “are untrue and
this and says his performance reviews were mostly positive. He says he’s coming forward
to let regulators and the public know what Tesla is capable of.
“They had the ability to do things I didn’t even know existed,” he says. “It scared the
shit out of me.”
Gouthro isn’t the first person to blow the whistle on security operatives at a fast-growing
transportation company. Two years ago, Richard Jacobs, a manager of global intelligence
at Uber Technologies Inc., claimed his colleagues surreptitiously recorded conversations
of rival executives and its own employees, among other ethically dubious actions. He
https://www.bloomberg.com/news/features/2019-03-13/when-elon-musk-tried-to-destroy-tesla-whistleblower-martin-tripp
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Exhibit G
by the CA 1st District Court of Appeal.
sensationalized,” but she didn’t comment on specifics. She pointed out that Gouthro
never raised any concerns until he was fired for “poor performance.” Gouthro disputes
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later walked back some of his accusations, but Uber’s new management has since
apologized, disavowed surveillance, and generally promised to be nicer. Two of the Uber
investigators named by Jacobs, Nicholas Gicinto and Jacob Nocon, sued him for
defamation, calling his claims “character assassination for cash.” They said his
accusations would make it hard for them to get new jobs.
They were wrong. While the press reacted to Uber’s alleged misdeeds with shock—“F--ing blockbuster bonkers criminal allegations,” tweeted Amir Efrati, a reporter at the
Information—Musk saw some promising recruits. In early 2018 he named Jeff Jones, a top
Uber security executive, as his global security chief and hired Gicinto and Nocon as
investigators, interviewing the three personally, according to Gouthro. Musk defended
https://www.bloomberg.com/news/features/2019-03-13/when-elon-musk-tried-to-destroy-tesla-whistleblower-martin-tripp
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Exhibit G
by the CA 1st District Court of Appeal.
Gicinto to the tech news site Gizmodo, saying he’d been “thrown under the bus by Uber
for the sins of others.” Tesla didn’t make Gicinto or Nocon available for comment; Jones,
who left Tesla in November, declined to comment.
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At this time, the Gigafactory, a huge three-story expanse 20 miles east of Reno, was a
chaotic place. Musk had warned repeatedly that Tesla would have to survive “production
hell” as it scrambled to hire staff and speed up manufacturing for the Model 3 sedan. He
suffered through the experience, sleeping in his office and later giving tearful interviews
in which he confessed he was near the end of his rope. “This is like—I tell you—the most
excruciatingly hellish several months that I have ever had,” he said at Tesla’s annual
meeting in June 2018.
https://www.bloomberg.com/news/features/2019-03-13/when-elon-musk-tried-to-destroy-tesla-whistleblower-martin-tripp
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Exhibit G
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It was this chaos that Tripp, a former U.S. Navy electronics technician who joined the
company in late 2017, claimed he wanted to calm. He complained to superiors that the
factory was in a constant state of flux and there were parts scattered everywhere, often
in ways that seemed to him to be unsafe and wasteful. He suggested his bosses try to cut
down on scrap, then wrote an email to Musk that went unanswered. “I kept bringing this
up to management, supervisors, anyone who would listen,” Tripp would later tell the
been filled with workers so quickly that it was almost impossible to control. Not long
after Gouthro started in January 2018, he discovered that many employees, some of
whom were living out of their car in the corners of the industrial park, were using
cocaine and meth in the bathrooms. Others were having sex in parts of the factory that
were still under construction. Gouthro says the scanners guards used to check badges
were unreliable, so they’d wave in anyone with a piece of paper that looked legitimate.
Local scrap yards called him to report thieves were trying to sell obscure electric vehicle
parts.
Gouthro’s job was to come up with a system to bring order. A 32-year-old former U.S.
Marine, he’s tall and buff, with a full sleeve of tattoos on his left arm. He’d worked at
Facebook Inc. in an operations center that responded to dangerous situations spotted on
live videos. The work had been upsetting, but Gouthro says Facebook’s was a far more
professional environment than Tesla’s. Early on, according to Gouthro, a company
https://www.bloomberg.com/news/features/2019-03-13/when-elon-musk-tried-to-destroy-tesla-whistleblower-martin-tripp
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Exhibit G
by the CA 1st District Court of Appeal.
Guardian in an interview. “Everyone just said, ‘Yeah, whatever.’ ”
Gouthro says that if Tripp was ignored, it was partly because his problems barely
rated in Nevada. The Gigafactory, one of the world’s largest buildings by floor area, had
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lawyer told him that the previous head of security at the Gigafactory, Andrew Ceroni,
had left after a bitter dispute. The lawyer said Ceroni had spied on a union meeting on
https://www.bloomberg.com/news/features/2019-03-13/when-elon-musk-tried-to-destroy-tesla-whistleblower-martin-tripp
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Exhibit G
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Musk’s orders and then threatened to tell the world about it when he left the company.
Ceroni declined to comment.
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While Gouthro was trying to address the sex, drugs, and raucous disorganization,
Lopez, who’d written about Tesla for Business Insider, emailing and texting her numbers
showing wasted material and pictures of battery parts that he said could catch fire.
Tripp hoped that when Lopez’s story came out, Tesla would be forced to make the
changes he’d suggested. Instead, Tesla said the waste was normal and no damaged
batteries made it into finished cars. “As is expected with any new manufacturing
process, we had high scrap rates earlier in the Model 3 ramp,” Tesla told Business Insider.
“We want to ensure that only the highest-quality parts are used to create the best
vehicles for our customers.”
Meanwhile, Gouthro went to work to identify the leaker, reviewing video footage
taken from the floor of the Gigafactory. At the same time, he says, Gicinto and Nocon
worked backwards to see who’d accessed data that could result in the numbers
published in Business Insider. It turned out Tripp had been the only one to look up the
exact information the story cited.
https://www.bloomberg.com/news/features/2019-03-13/when-elon-musk-tried-to-destroy-tesla-whistleblower-martin-tripp
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Exhibit G
by the CA 1st District Court of Appeal.
Tripp decided to go public. He had access to Tesla’s internal production database and
dug into it to figure out just how much material was being wasted. He decided to go to
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The security team had their man, but they didn’t know what other secrets he might
have seen. Tripp and a few other employees were asked to turn their laptops in for a
routine update that was, in fact, a forensic audit. Gouthro also sent a plainclothes
security guard to the assembly floor to keep an eye on Tripp.
Nocon were waiting. According to a transcript viewed by Bloomberg Businessweek, the
conversation started on friendly terms, with the two interrogators asking Tripp about
reports he’d made to his bosses. “This to me is a major safety, a public safety concern,”
Tripp said, patiently explaining the punctured battery cells he’d seen. They mentioned
the Business Insider story repeatedly without asking Tripp if he was the source.
Then, two and a half hours into the interview, the investigators disclosed that Tripp
had been the only one who’d accessed the manufacturing numbers. Tripp admitted he
was the leaker. But the transcript shows that he denied accepting bribes—despite Musk’s
later Twitter claims to the contrary—and he said he hadn’t given the information to
anyone else. Gouthro, who wasn’t in the interrogation room, says at one point he saw a
colleague reading the text messages and emails that Tripp was sending during breaks in
the questioning. He says that somehow Tesla was able to access Tripp’s communications
in real time.
https://www.bloomberg.com/news/features/2019-03-13/when-elon-musk-tried-to-destroy-tesla-whistleblower-martin-tripp
AA
Exhibit G
by the CA 1st District Court of Appeal.
When Tripp arrived at work on June 14, he was met by a human resources
representative, who escorted him to a conference room. When he got there, Gicinto and
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The interview lasted almost six hours. By the end, the investigators seemed
sympathetic, telling Tripp what he’d done was “not even close to anything bad.” Tripp
pulled out his phone and showed them a video of himself playing guitar. “Dude, that’s
impressive,” one said. Gouthro says they debriefed a furious Musk via video conference.
a story titled, “Martin Tripp: 5 Fast Facts You Need to Know,” which said he lived in a
rental apartment in nearby Sparks, Nev. Panicked about who might come find him, he
sent an email to Musk. “You have what’s coming to you for the lies you have told to the
public and investors,” he wrote.
His former boss, of course, engaged him with gusto. “Threatening me only makes it
worse for you,” Musk replied. Later, he wrote: “You should be ashamed of yourself for
framing other people. You’re a horrible human being.”
“I NEVER ‘framed’ anyone else or even insinuated anyone else as being involved in
my production of documents of your MILLIONS OF DOLLARS OF WASTE, Safety
concerns, lying to investors/the WORLD,” Tripp responded. “Putting cars on the road
with safety issues is being a horrible human being!”
The anonymous shooting tip was called in to a Tesla call center a few hours later; then
Gouthro relayed it to the Storey sheriff ’s office. Tesla also printed out a BOLO flyer—short
for “be on the lookout”—with Tripp’s smiling face on it and the words “do not allow on
property.”
https://www.bloomberg.com/news/features/2019-03-13/when-elon-musk-tried-to-destroy-tesla-whistleblower-martin-tripp
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Exhibit G
by the CA 1st District Court of Appeal.
Tesla fired Tripp on June 19.
The following day, news of the lawsuit hit the internet. Tripp Googled himself and saw
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Exhibit G
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After Gouthro had called the sheriff, he made a second call—to the private
investigators he says Tesla kept on retainer, asking them to find Tripp. The PIs found
Tripp before the police did, tracking him to the Nugget casino in Reno. Gouthro says his
boss told him not to tell the cops that Tesla had Tripp followed.
Meanwhile, Musk emailed a reporter at the Guardian: “I was just told that we received
a call at the Gigafactory that he was going to come back and shoot people,” Musk wrote.
footage shows Tripp shaking and crying as he walked up to the police. He said he didn’t
have a gun. Then he sat down on a park bench and started telling the police what had
been going on since he’d clumsily attempted to blow the whistle on one of the world’s
richest and most famous men.
“They keep saying I’m stealing data,” Tripp can be heard saying between sobs. “I’m
not that smart.” He said he learned about the threat he’d supposedly made from a
Washington Post reporter, who’d called him after a tip from Tesla.
“This is sort of strange,” Dosen told Tripp. “It’s almost like a movie.”
The Storey County Sheriff’s Office is in Virginia City, a one-stoplight town, population
855, with a tired row of Old West tourist attractions. The area is so sleepy, officers are
often called to chase raccoons out of the trash. Their main tasks include issuing work
permits to each prostitute at the local brothel.
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Exhibit G
by the CA 1st District Court of Appeal.
“I hope you all are safe,” the reporter replied.
A sheriff ’s deputy, Tony Dosen, met Tripp on the street outside the casino. Body cam
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Gerald Antinoro is the sheriff, and he looks the part, dressed in black cowboy boots, a
black denim jacket, and black Wranglers, with a pistol on his hip. In an interview in his
office months after the incident, he still seems both mystified and amused by the Tesla
shooting threat. The sheriff says that when he’d looked into the anonymous call after
police confronted Tripp, the threat seemed less threatening than the company made it
sound. The caller said Tripp was volatile but didn’t say he was on his way to shoot up the
colleague of Tripp’s who might have called in the tip. To Antinoro, one of the strangest
parts of the situation was that after he told the company the threat was false, it asked
him to put out a press release hyping it. He declined, but Tesla publicized the incident
anyway. The morning after the threat was debunked, a spokesman texted another
reporter: “Yesterday afternoon we received a phone call from a friend of Mr. Tripp
telling us that Mr. Tripp would be coming to the Gigafactory to ‘shoot the place up.’ ”
“It’s one of them head-scratchers,” the sheriff says. “The only way the press knew
anything about it was from them.”
After he was outed, Tripp hired a lawyer who worked on contingency and filed a
claim with the SEC, which receives 10,000 or so such reports a year. Fewer than 1 in leads to a case, but the successful tipsters can get life-changing payouts—as much as percent of any fine.
https://www.bloomberg.com/news/features/2019-03-13/when-elon-musk-tried-to-destroy-tesla-whistleblower-martin-tripp
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Exhibit G
by the CA 1st District Court of Appeal.
place. “You remember playing telephone as a kid?” Antinoro asks. “It got blown out of
proportion.” He dropped the investigation when Tesla declined to make available a
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The lawyer, Stuart Meissner, specializes in representing whistleblowers. His claim to
fame is working with a Monsanto Co. employee who got a $22 million award in 2016. But
percent.” Meissner says he vets his clients extensively.
Tripp has since changed lawyers, but the publicity over the case caught the attention
of one of Gouthro’s underlings, Karl Hansen. Last summer, Hansen, a former U.S. Army
investigator and special agent, flew to New York and met with Meissner, who got him
booked on the Fox Business channel. His allegations were wilder than Tripp’s: Hansen
said Tesla was ignoring huge amounts of theft and drug-dealing at the Gigafactory. “A
member of a Mexican cartel was in fact trafficking in potential large quantities of
methamphetamine and cocaine,” he said on TV, complaining that his investigation was
shut down prematurely.
https://www.bloomberg.com/news/features/2019-03-13/when-elon-musk-tried-to-destroy-tesla-whistleblower-martin-tripp
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Exhibit G
by the CA 1st District Court of Appeal.
Meissner doesn’t seem too picky about his clients. His website features a whistle, a bag of
money, and a picture of himself glowering. “Your whistleblower award could be worth
millions of dollars,” it says. “We will beat any competing fee arrangement by
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▲ Hansen PHOTOGRAPHER: JULIAN BERMAN FOR BLOOMBERG BUSINESSWEEK
Hansen flew back to Reno and reported to work at Tesla, apparently unaware that
Musk might not take kindly to his impromptu media tour. He was fired that day. (Sheriff
Antinoro said he’d looked into the allegations and didn’t find them credible. Musk told
Gizmodo that Hansen was “super nuts,” using the peanut emoji.)
Gouthro says that after he got fired from Tesla in December, Hansen convinced him
he should go public. He hired Meissner and filed a formal report to the SEC that backs up
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Hansen’s claims. “We started connecting some dots and some trends, and here we are,”
Gouthro says. He worries that speaking out will make him unemployable but says that
telling the truth is too important.
Gouthro and Hansen seem to sincerely believe that what they helped Tesla do to
Tripp was wrong. They also say, without offering proof, that a Tesla investigator installed
a device at the factory that monitored everyone’s private communications.
relevant. He’s moved to Hungary, where his wife has family, to avoid attention; but the
SEC called him in July and interviewed him for several hours. A person familiar with the
meeting says Tripp told the agency that he’d found data that seemed to contradict the
production numbers that Musk was touting. “What Tesla did to Tripp is terrible,” says
Tripp’s lawyer, Robert Mitchell, who’s representing him in a countersuit against the
company that alleges defamation. “His life is ruined. He’s scared of these guys.”
Musk, true to form, is still tangling with the SEC. The agency is asking a judge to hold
him in contempt over violations of a settlement reached after the $420 tweet and could
ask to have him removed from Tesla. The fight is a distraction from what has been, by
any rational measure, an amazing year for Musk. Tesla hit its goal of making 5,000 cars a
week in July. Last month the company lowered the price of its Model 3 to $35,000, a goal
that once seemed unattainable. It will introduce an SUV, the Model Y, on March 14. In
early March, SpaceX completed a successful test mission for a capsule that will one day
send astronauts into orbit.
https://www.bloomberg.com/news/features/2019-03-13/when-elon-musk-tried-to-destroy-tesla-whistleblower-martin-tripp
AA
Exhibit G
by the CA 1st District Court of Appeal.
Even if what Gouthro and Hansen say is true, it’s not clear it would lead to a case for
securities regulators. Tripp, on the other hand, has information that might be more
20/21
Page 130 5/1/
When Elon Musk Tried to Destroy Tesla Whistleblower Martin Tripp - Bloomberg
Antinoro says he’s told his force not to bother investigating crimes at the Gigafactory
unless Tesla starts cooperating. Big business, he’s decided, is its own strange world.
▲ How Tesla CEO Elon Musk Tried to Destroy a Whistleblower
(Updates 43rd paragraph with additional information about Gouthro’s lawyer.)
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https://www.bloomberg.com/news/features/2019-03-13/when-elon-musk-tried-to-destroy-tesla-whistleblower-martin-tripp
AA
Exhibit G
by the CA 1st District Court of Appeal.
“Standard Oil was probably as weird as Elon Musk,” he says.
21/21
Page 131 AA
Document received by the CA 1st District Court of Appeal.
Exhibit H
Page 132 (20) Elon Musk on Twitter: "@S_Padival @lopezlinette Sounds very sketchy if true. @lopezlinette, is it possible you’re serving as an inside trading source for one of Tesla’s biggest short-sellers? An ex-Tesla e…
#
Q
Polixenes v
Search Twitter
l
[ This Tweet is not available because it's from someone you blocked.
V
Elon Musk e @elonmusk • Jul 5, @lopezlinette has published several false articles about Tesla, including a
doozy where she claimed Tesla scrapped more batteries than our total S,X
&3 production number, which is physically impossible.

t.l.
C) 3.2K
l
This Tweet is not available because it's from someone you blocked.
Elon Musk e
@elonmusk
V
Sounds very sketchy if true. @lopezlinette, is it possible
you're serving as an inside trading source for one of
Tesla's biggest short-sellers? An ex-Tesla employee just
went on record formally claiming you bribed him & he sent
you valuable Tesla IP in exchange. Is this true?
( Follow )
S Padival
@S_Padival
Blocked
Indian Aussie I BernieBro 1$TSLA Long
term investor I Engineer
Following
Sr Finance Correspondent writing my
opinions & such @businessinsider.
Trends for you
Trending in USA
Senate Judiciary Committee
Trending with: Bill Barr
6:02 AM• Jul 5, 2018 • Twitter for iPhone
WATCH LIVE: William Barr
testifies on Mueller re ort to ...
& pbs.org
Reply
1.4K Likes
https://twitter.com/elonmusk/status/
Elon Musk e
@elonmusk
Linette Lopez e
@lopezline... Follows you
Replying to @S_Padival and @lopezlinette
173 Retweets
Relevant people
by the CA 1st District Court of Appeal.
5/1/
AA
I
1/6
Page 133 (20) Elon Musk on Twitter: "@S_Padival @lopezlinette Sounds very sketchy if true. @lopezlinette, is it possible you’re serving as an inside trading source for one of Tesla’s biggest short-sellers? An ex-Tesla e…
#
Q
Polixenes v
Search Twitter
Chanos & Tepper with caption "Love both these dudes". Doesn't sound very
objective
r
Attorney General William Barr
Trending with: Bob Mueller, Robert Mueller
David Tepper And Jim Chanos Balled Out At The Same
Vegas Club Last Night
c9 dodgeglobe.com

l

t_l,
Q
l
V
Caleb Brandalise @calebsbrand • Jul 5, Oh my f'n greatness this thread! Rootin for you Elon, and for everyone really.
Having a socially visible rating score revolving around credibility in
predictions and effectiveness in reporting will be an amazing relief to one of
the most outdated constrains on society
t_l,
Democrats call for impeachment
of Attorney General William Barr...
& newsweek.com
J
This Tweet is not available because it's from someone you blocked.

Trending in USA
j
Trending in USA
#AyrtonSenna
Trending with: #SennaSempre
j
Formula Remembering Ayrton Senna on
the 25th anniversary of his death
Sascha Pallenberg is Tweeting about this
Q
by the CA 1st District Court of Appeal.
5/1/
Trending in USA
This Tweet is not available because it's from someone you blocked.
#BarrLied
18.2K Tweets
View
Show more
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Terms
More v
Red Dog Capital @red_dog_capital • Jul 5, Replying to @elonmusk @S_Padival and @lopezlinette
@AlderLaneeggs here kitty, kitty. Come on down from that tree!
n
1'
https://twitter.com/elonmusk/status/
M
.1'.
AA
V
Privacy policy
Cookies
Ads info
© 2019 Twitter, Inc.
Reply
2/6
Page 134 5/1/
(20) Elon Musk on Twitter: "@S_Padival @lopezlinette Sounds very sketchy if true. @lopezlinette, is it possible you’re serving as an inside trading source for one of Tesla’s biggest short-sellers? An ex-Tesla e…
#
Q
Polixenes v
Search Twitter
Replying to @elonmusk
Way to call them out!!! Yes!!

Trading Standards @TradingStandar4 • Jul 5, Replying to @elonmusk @S_Padival and @lopezlinette
As these details unfold it makes sense publicly or privately coordinating a
short in a stock is illegal and Jim Chanos and co are in on it.

t_l,
(?

David Wong @davidrwkw • Jul 5, Replying to @elonmusk @S_Padival and @lopezlinette
Shouldn't SEC look into this? JAMES CHANOS

t_l,
(?
V

The Futurists are many.... @FiveQplusFiveQ • Jul 5, Replying to @elonmusk @S_Padival and @lopezlinette
'When you lie about someone, your creating problems for society!

t_l,
(?
V

V
i!i
r
This Tweet is not available because it's from someone you blocked.
View
H. Sedaghat @h_sedaghat • Jul 5, v
Replying to @elonmusk @S_Padival and @lopezlinette
In the age of tabloid news and wild social media with all the trolling and lies
we are finding that journalistic integrity is something one cannot buy.

t_l,
https://twitter.com/elonmusk/status/
(?

AA
by the CA 1st District Court of Appeal.
(?

Reply
3/6
Page 135 5/1/
(20) Elon Musk on Twitter: "@S_Padival @lopezlinette Sounds very sketchy if true. @lopezlinette, is it possible you’re serving as an inside trading source for one of Tesla’s biggest short-sellers? An ex-Tesla e…
#
Q
Polixenes v
Search Twitter
V
Dee J @DeeJ722 • Jul 5, Replying to @elonmusk @S_Padival and @lopezlinette
Business Insider posts a lot of negative Tesla articles so they clearly have an
agenda

t_l,
\/
Cristina Balan @3d_Cristina • Jul 5, Replying to @elonmusk @S_Padival and @lopezlinette
How many ex or current Tesla employees did your lawyers bribed so they
will Never tell the truth?!
V
Stop talking about the truth! You are the first in Tesla that cannot Handle the
Truth!
t_l,
\/
P.T. Muskrat @BmwSchaeffer • Jul 5, Replying to @elonmusk @S_Padival and @lopezlinette
Elon Musk is channeling his inner Parker Petite

drvannostril
t_l,
\/
II @drvannostril • Jul 5,
I wish there was a button beyond

V
t_l,
V
... I'd fornicate with this assertion.
\/
Bubbleception: Triple Bubble Trouble @GreatCrashO ... • Jul 5, Replying to @elonmusk @S_Padival and @lopezlinette
Have you stopped beating your car company, yet?
#LeadingQuestionsAreEasy #OwningUpToYourFailureAsCEOnot
https://twitter.com/elonmusk/status/
AA
v
by the CA 1st District Court of Appeal.

Reply
4/6
Page 136 5/1/
(20) Elon Musk on Twitter: "@S_Padival @lopezlinette Sounds very sketchy if true. @lopezlinette, is it possible you’re serving as an inside trading source for one of Tesla’s biggest short-sellers? An ex-Tesla e…
#
Q
Polixenes v
Search Twitter
Replying to @elonmusk @S_Padival and @lopezlinette
Musk you are blaming her for misleading. Didn't you mislead public of false
self driving tech and asked them to do abythjng in car? And when they did
and started getting killed you ran away from owning it?
0
(?
letsrebel @letsrebel1 • Jul 5,
V
3/ you take 450 millions at zero interest free loan from thousands of ppl by
lying to them about your car price. 2 yrs gone and there is no 35k car. Isn't
that fraud?
0
t_l,
(?
letsrebel @letsrebel1 • Jul 5,
V
4/ your company is on verge of bankruptcy. But you tell your shareholders
and public you won 't.I need a capital raise. Isn't that misleading investors?
t_l,
(?
letsrebel @letsrebel1 • Jul 5,
V
5/ in the same shareholder meeting you said you are making 3.5 model 3 a
week but your overall rate is 1.9k a week. Didn't you mislead them?
0
t_l,
(?
letsrebel @letsrebel1 • Jul 5,
V
6/ your company does accounting gimmick all the time. You have bad
dangerous env at your factory. Isn't that worse than what a reporter writes
in an article ?
0
t_l,
(?
letsrebel @letsrebel1 • Jul 5,
V
7/ shame on you musk. Shame on your existence as a human.
https://twitter.com/elonmusk/status/
AA
by the CA 1st District Court of Appeal.
0
Reply
5/6
Page 137 (20) Elon Musk on Twitter: "@S_Padival @lopezlinette Sounds very sketchy if true. @lopezlinette, is it possible you’re serving as an inside trading source for one of Tesla’s biggest short-sellers? An ex-Tesla e…
#
https://twitter.com/elonmusk/status/
Q
Polixenes v
Search Twitter
AA
by the CA 1st District Court of Appeal.
5/1/
Reply
6/6
Page 138 AA
Document received by the CA 1st District Court of Appeal.
Exhibit I
Page 139 5/1/
TRANSPORTATION
Tesla accused of knowingly selling defective vehicles in new lawsuit - The Verge
CARS
TESLA
Tesla accused of knowingly selling defective
vehicles in new lawsuit

The company says there’s ‘no merit’ to the claims
Feb 21, 2018, 4:14pm EST
Photo by Amelia Holowaty Krales / The Verge
https://www.theverge.com/2018/2/21/17036426/tesla-lemon-cars-whistleblower-lawsuit
AA
Exhibit I
by the CA 1st District Court of Appeal.
By Sean O'Kane @sokane
1/4
Page 140 5/1/
Tesla accused of knowingly selling defective vehicles in new lawsuit - The Verge
A former Tesla employee claims the company knowingly sold defective cars, often referred to as “lemons,” and that he
was demoted and eventually fired after reporting the practice to his superiors. He made these allegations in a lawsuit
filed in late January in New Jersey Superior Court under the Conscientious Employee Protection Act (CEPA).
The former employee, Adam Williams, worked for Tesla as a regional manager in New Jersey dating back to late 2011.
While there, he says he watched the company fail “to disclose to consumers high-dollar, pre-delivery damage repairs”
before delivering its vehicles, according to the complaint. Instead, he says the company sold these cars as “used,” or
labeled as “demo/loaner” vehicles.
“There’s no merit to this lawsuit. Mr. Williams’ description of
how Tesla sells used or loaner vehicles is totally false and
not how we do things at Tesla,” a representative for the
company said in response to the lawsuit. “It’s also at odds
with the fact that we rank highest in customer satisfaction
of any car brand, with more owners saying they’d buy a
“MR. WILLIAMS’ DESCRIPTION OF HOW
TESLA SELLS USED OR LOANER VEHICLES IS
TOTALLY FALSE AND NOT HOW WE DO
THINGS AT TESLA.”
terminated at Tesla for performance reasons, not for any other reason.” The lawyer for the plaintiff could not be
reached in time for publish.
Williams says in the court filing that he reported this behavior in late 2016 and early 2017 to his supervisor, as well as
Lenny Peake, Tesla’s East Coast Regional Manager, and Jerome Guillen, a company vice president. Shortly after that,
he claims, he was demoted to service manager of the Springfield, New Jersey Tesla store. He then says he was
demoted again later in the year to a “mobile manager” position and was ultimately fired in September 2017.
In the lawsuit, Williams argues that he was terminated for reporting the alleged lawbreaking practices, and he should
therefore be covered by CEPA’s whistleblower protection. CEPA is a so-called “whistleblower act” in New Jersey that
https://www.theverge.com/2018/2/21/17036426/tesla-lemon-cars-whistleblower-lawsuit
AA
Exhibit I
by the CA 1st District Court of Appeal.
Tesla again than any other manufacturer. Mr. Williams was
2/4
Page 141 5/1/
Tesla accused of knowingly selling defective vehicles in new lawsuit - The Verge
was put in place to stop employers from retaliating against employees who report, object to, or refuse to participate in
what they view as illegal behavior.
This is not the first time Tesla has dealt with a lawsuit that involved accusations of lemon law issues. The company
settled a lawsuit with a Model X owner in 2016 who complained about problems with the doors and software of his
vehicle.
https://www.theverge.com/2018/2/21/17036426/tesla-lemon-cars-whistleblower-lawsuit
AA
Exhibit I
by the CA 1st District Court of Appeal.
Willams vs Tesla by Anonymous ohKLS5K on Scribd
3/4
Page 142 5/1/
Tesla accused of knowingly selling defective vehicles in new lawsuit - The Verge

https://www.theverge.com/2018/2/21/17036426/tesla-lemon-cars-whistleblower-lawsuit
of
 
AA


Show me more about this topic
  
Exhibit I
by the CA 1st District Court of Appeal.
BUR-L-000194-18 01/26/2018 2:22:14 PM Pg 1 of 7 Trans ID: LCV
4/4
Page 143 AA
Document received by the CA 1st District Court of Appeal.
Exhibit J
Page 144 Tesla fires female engineer who alleged sexual harassment | Technology | The Guardian
This article is more than 1 year old
Tesla fires female engineer who alleged sexual harassment
https://www.theguardian.com/technology/2017/jun/01/tesla-fires-aj-vandermeyden-lawsuit-sexual-harrassment
AA
Exhibit J
by the CA 1st District Court of Appeal.
5/1/
1/4
Page 145 Tesla fires female engineer who alleged sexual harassment
5/1/
Tesla fires female engineer who alleged sexual harassment | Technology | The Guardian
Lawyer for AJ Vandermeyden says termination was retaliatory after she took lawsuit public, accusing the company of
discrimination
Sam Levin in San Francisco
Thu 1 Jun 2017 09.25 EDT
A female engineer at Tesla who accused the car manufacturer of ignoring her complaints of sexual harassment and paying her less
than her male counterparts has been fired in what her lawyer alleges was an act of retaliation.
AJ Vandermeyden, who went public with her discrimination lawsuit against Elon Musk’s car company in an interview with the
Guardian in February, was dismissed from the company this week.
Vandermeyden had claimed she was taunted and catcalled by male employees and that Tesla failed to address her complaints
about the harassment, unequal pay and discrimination. “It’s shocking in this day and age that this is still a fight we have to have,”
she said at the time.
“Despite repeatedly receiving special treatment at the expense of others, Ms Vandermeyden nonetheless chose to pursue a
miscarriage of justice by suing Tesla and falsely attacking our company in the press,” a Tesla spokesperson said. “After we
carefully considered the facts on multiple occasions and were absolutely convinced that Ms Vandermeyden’s claims were
illegitimate, we had no choice but to end her employment at Tesla.”
by the CA 1st District Court of Appeal.
In a statement to the Guardian, Tesla confirmed the company had fired Vandermeyden, saying it had thoroughly investigated the
employee’s allegations with the help of a “a neutral, third-party expert” and concluded her complaints were unmerited.
“This was absolutely shocking for AJ. She is devastated,” Therese Lawless, Vandermeyden’s attorney, said by phone. “She brought
the lawsuit in an attempt to make the workplace at Tesla more equitable and fair and to have Tesla comply with the law.”
Asked about Tesla’s justification for the firing, Lawless said: “They’ve just proven our case. It’s clear retaliation.” She added:
“Somebody is trying to instill in employees that when they speak out about matters they are legally allowed to speak out about,
they too will be fired.”
Vandermeyden’s firing is likely to reignite debate over employment standards in Silicon Valley, where startups and major tech
corporations are grappling with complaints of systemic wage disparities, gender discrimination and sexual misconduct.
An account of alleged sexism at Uber went viral earlier this year, fueling debate about harassment in the industry, while a recent
federal lawsuit against Google has placed a spotlight on concerns about tech firms underpaying women.
https://www.theguardian.com/technology/2017/jun/01/tesla-fires-aj-vandermeyden-lawsuit-sexual-harrassment
AA
Exhibit J
2/4
Page 146 5/1/
Tesla fires female engineer who alleged sexual harassment | Technology | The Guardian
Lawless, who represented the former Reddit CEO Ellen Pao in her high-profile discrimination lawsuit, against the venture capital
firm Kleiner Perkins Caufield & Byers, said she intended to file a formal retaliation complaint on behalf of Vandermeyden.
“It is illegal in the state of California for an employer to retaliate against an employee who asserts her rights, including her rights
to receive equal pay as her male colleagues.”
Vandermeyden, who started working at Tesla in 2013, claims in her lawsuit that she was paid less than male engineers whose
work she directly took over as a manufacturing engineer in the general assembly department.
Her complaint further alleged that she raised issues about flaws in the quality testing of cars that her supervisors and male
engineers had missed. Although she came up with a solution, men were granted positions over her, she alleged. The complaint
said that she and other female engineers were denied promotions despite the fact that they were “equally or more qualified” than
the men.
Vandermeyden also alleged that she experienced “unwelcome and pervasive harassment by men on the factory floor including
but not limited to inappropriate language, whistling, and catcalls”.
Although she had positive performance evaluations, she felt she had to transfer out of general assembly to the purchasing
department, according to the lawsuit, which also said that Tesla retaliated against her for being a “whistleblower”.
Tesla has continued to strongly reject Vandermeyden’s claims. A spokesperson said the company had “conducted a thorough
internal investigation” and “extensively re-reviewed all the facts”, repeatedly concluding that her allegations were false.
Tesla added that Vandermeyden had been granted numerous positions “over other more qualified candidates” and was “given
special treatment and opportunities for advancement that were unwarranted based on her qualifications”.
by the CA 1st District Court of Appeal.
Further, the lawsuit accused Tesla of retaliating against her for speaking up. Management allegedly told her that in order to
advance her position, she would need to achieve a performance standard in the factory that was not expected of male engineers
and was unattainable.
“The termination was based on Ms Vandermeyden behaving in what the evidence indicates is a fundamentally false and
misleading manner, not as a result of retaliation for the lawsuit,” the spokesperson added. “It is impossible to trust anyone after
they have behaved in such a manner and therefore continued employment is also impossible.”
The Vandermeyden case is one of several labor issues that have dogged Tesla, which is facing growing scrutiny over its practices
in California.
Earlier this month, the Guardian published an investigation into working conditions at Tesla’s “factory of the future” in Fremont,
California, where several factory workers complained about their treatment at the plant.
Exhibit J
https://www.theguardian.com/technology/2017/jun/01/tesla-fires-aj-vandermeyden-lawsuit-sexual-harrassment
3/AA536
Page 147 5/1/
Tesla fires female engineer who alleged sexual harassment | Technology | The Guardian
Incident reports revealed that ambulances have been called more than 100 times since 2014 for workers experiencing fainting
spells, seizures, dizziness, abnormal breathing and chest pains. A recent report from a worker safety organization found that Tesla
workers were injured at a rate 31% higher than the industry average in 2015.
The company has said it has significantly improved safety standards in recent months at the factory, and Musk told the Guardian
he cared deeply about the health and wellbeing of his employees.
Vandermeyden, in her interview with the Guardian in February, emphasized that she believed Tesla was a “revolutionary and
innovative company” and said she took out a hefty loan to buy the cheapest version of the Model S car.
“Until somebody stands up, nothing is going to change,” she added. “I’m an advocate of Tesla. I really do believe they are doing
great things. That said, I can’t turn a blind eye if there’s something fundamentally wrong going on.”
At the time, Vandermeyden said she was hopeful her lawsuit and public comments would not end her career at the company. But
she expressed some concern that her decision to speak out could result in retaliation. “Half the time when I walk into work,” she
said, “I wonder if my badge is going to work.”
This article was amended on 2 June 2017 to reflect that Tesla has rejected, rather than refuted, Vandermeyden’s claims.
Topics
Tesla
California
Gender
Sexual harassment
news
https://www.theguardian.com/technology/2017/jun/01/tesla-fires-aj-vandermeyden-lawsuit-sexual-harrassment
AA
Exhibit J
by the CA 1st District Court of Appeal.
Contact the author: sam.levin@theguardian.com
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