It’s no secret that Elon Musk is among the more controversial tech founders and CEOs. Last month, Musk settled a three-year-old defamation lawsuit. Despite his proclamation of innocence on Twitter over a year ago, he stated “My commitment: We will never seek victory in a just case against us, even if we will probably win,” he wrote. “We will never surrender/settle an unjust case against us, even if we will probably lose”.
However, he surrendered. Musk recently settled a 3 year long defamation lawsuit by graduate student Randeep Hothi.
The setup: Randeep Hothi vs Tesla
Hothi’s suit accused Musk of defaming him. Allegedly, Musk claimed in an email that Hothi “almost killed” a security guard, with no evidence to back up the allegations.
Hothi was a graduate student at University of Michigan living in the Bay Area in early 2019. Hothi began monitoring auto production from outside Tesla’s Fremont Factory, and posting his findings to his Twitter page, under the handle @skabooshka. Holding Tesla stock, Hothi’s account was popular with short sellers and other Tesla critics known as #TeslaQ.
Hothi was skeptical that Musk could pull off promises of manufacturing a Model 3 that was an “alien dreadnought” , a hyper-automated vehicle factory that could function largely without human interaction.
Hothi turned out to be correct, as Musk’s aggressive automation attempt was a flop, and Tesla ended up assembling Model 3’s in a hastily erected tent outside the factory walls. Tesla stock was also under great pressure at the time from short sellers who were betting on the company to fail. However, somehow, Musk managed to pull it off, and despite not being built by automation, the Model 3 proved popular. However, Tesla narrowly avoided bankruptcy, by Musk’s own admission in 2018, and was still struggling during Hothi’s amaetur investigations in 2019.
The “alien dreadnaught” wasn’t the only source of Hothi’s skepticism. He regarded Musk’s claims that his Autopilot system would soon develop into a “full self-driving” robot car as fantastical. Musk had claimed in 2016 that a Tesla would be able to drive itself with no human intervention from Los Angeles to New York by the end of 2017. Although Tesla has been selling a $15,000 feature it calls Full Self-Driving, no Tesla, nor any commercially available car, can drive itself — not even around the block, much less across the continent.
Unsurprisingly, Hothi’s monitoring of production made him unpopular with Tesla’s executives, especially Musk. The factory’s security force had recorded his license plate number and guards had orders to kick him out if they saw him nosing around.
It began in a parking lot
The trouble started in February 2019, after Hothi parked his car in the Tesla parking lot, which is open to the public, as the factory included a Tesla show room that was open to the public.
As he pulled in, a guard intercepted him and asked him to leave. Hothi claimed he was going to the showroom, but complied with the guard’s request. As Hothi was pulling out of the parking garage, the guard was standing near the side of his car, Hothi passed closely by him. The rest of the physical details are hazy, but after Tesla showed local law enforcement the security footage of the encounter to try and have Hoti arrested, police and prosecutors told Tesla they found no cause to arrest him.
A few months after the factory incident, Hothi was out driving and came across a Tesla-owned vehicle with mounted cameras that Hothi assumed would be used for a video that would show off the car’s self-driving abilities. He took pictures from his car. These actions granted Tesla a temporary restraining order in court, after claiming Hothi stalked, harassed, and endangered the car’s occupants. When Tesla pressed for a permanent restraining order, Hothi told the judge that the Tesla car’s cameras could show exactly what did and didn’t happen that day. The judge ordered Tesla to enter the videos into evidence. Rather than comply, Tesla dropped the case.
Shortly after, in August of 2019, Musk was exchanging emails with Aaron Greenspan, a longtime Tesla critic who runs the legal document search engine called PlainSite. In one of those emails, Musk wrote, “[a]s for the people you mention below, they have actively harassed and, in the case of Hothi, almost killed Tesla employees. What was a sideswipe when Hothi hit one of our people could easily have been a death with 6 inches of difference.”
This was unwise, as Greenspan is well known for sharing correspondence with people such as Musk on social media. Elon Musk is also known for writing emails to employees that are widely distributed over the internet. Greenspan claims Musk never said the emails were confidential and posted the emails to Twitter, where they went viral.
On defamation: What lead to Elon Musk settling?
To prove defamation, legal experts say, a plaintiff generally must show that a defendant made a false statement purporting to be fact; that it was published or communicated to a third person; that the defendant was, at least, negligent; and that the plaintiff suffered reputational damage or other harm.
Hothi, in a prepared statement Monday, said, “I brought this case to defend my work, clear my name, and send a message. I believe I’ve accomplished that, thanks in no small part to Musk, whose own behavior over the last year has highlighted the need to scrutinize his every word and deed. This case was about taking a stand, not seeking fame or money. I feel vindicated.”
Going up against billionaire legally, without similarly unlimited funding is difficult and Hothi’s case depended on donations from supporters, family and friends. Had he lost the case, he would’ve been responsible to pay Musk’s legal fees. When his case was first filed, Hothi said that a simple apology from Musk was all he wanted. He hasn’t received one to date.
Despite previous statements on Twitter that he would never settle, Musk settled out of court for a settlement of $10,000. Admittedly it’s not much, being the equivalent of someone with an income of $165,000 paying 1 cent, but at the very least, it held Elon Musk accountable, a rarity in the world of billionaires. Musk’s reasons for settling remain unclear.