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Martin Eberhard sues Elon Musk and Tesla Motors

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Where's our crack TMC legal team?
It appears the complaint stands as is, sans the following:
Eberhard seeks a declaration stating that: 1) Musk was never the founder or the creator of Tesla Motors; 2) That Eberhard and Tarpenning are the sole founders and creators of Tesla Motors; 3) that Eberhard was not principally responsible for the Roadster's production delays or Tesla Motors' financial instability; and 4) that Eberhard was forthright with the BOD and that he never deceived and made misrepresentations to the BOD during his tenure at Tesla Motors.

That matter remains for the court of public opinion ...
 
Where's our crack TMC legal team?

They're not here, so you're stuck with me:wink::biggrin:

Thanks for the link. It never ceases to amaze me how far off the press gets the story from what actually happened. I should have known better than to opine before reading the judge's actual decision.

If this were a boxing match and I were grading this round, I'd probably give the round to ME, 12-10, with no big puches landed by either side. The anti-SLAPP claim was always a long shot, and the judge seems fairly skeptical that EM will ultimately prevail on that point. Interestingly, though, the judge seemed somewhat persuaded by some of the possibly "defamatory" statements by EM about ME. Upon reading the Complaint and Answer, I thought EM had a fairly decent chance of winning this case on the law -- that the statements couldn't really be considered "defaming" in the legal sense of the term, and that he had a legitimate possibility of getting the case dismissed before it got to a jury. With this ruling, it's more likely than I would have originally thought that they could end up in front a jury with a legitimate issue of fact to be determined as to whether what EM said about ME is, in fact, true (which is an absolute defense to any claim of defamation). It's always amazing to people new to the legal system how the judge appointed to your case can oftentimes make or break it. In this case, upon reading this and assuming this is the same judge they'll have throughout (I don't know CA state court procedures and it's possible there's a different judge for a motion for summary judgment and/or trial), this is a huge break for ME.

The rest of the rulilng is window dressing. TM and EM got a couple of causes of actions dismissed, but nothing substantial, and ME didn't get an injunction to make EM stop saying anything at this point. Nothing surprising in any of that.

One other interesting note which could benefit EM in the long run: I have an old version of Black's Law Dictionary (pre-internet days), which is considered a highly credible source, and the linked article is spot. Here is the full definition from my BLD of the word "Founder":

The person who endows an eleemosynary corporation or institution, or supplies the funds for its establishment.

(n.b. "Eleemosynary" is a fancy word for charity or non-profit). Neither of the lawyers addressed this point in the Complaint or Answer (shame on EM's lawyers for missing this -- I deduct 10 points from them for this oversight). While this seems to focus on the establishment of charitable foundations, the fact that the law considers a "founder" to be the person who "supplies the funds" should be quite beneficial to EM, because even ME would have a hard time arguing that EM isn't a founder if that were the sole criteria used.
 
(n.b. "Eleemosynary" is a fancy word for charity or non-profit). Neither of the lawyers addressed this point in the Complaint or Answer (shame on EM's lawyers for missing this -- I deduct 10 points from them for this oversight). While this seems to focus on the establishment of charitable foundations, the fact that the law considers a "founder" to be the person who "supplies the funds" should be quite beneficial to EM, because even ME would have a hard time arguing that EM isn't a founder if that were the sole criteria used.

But WHEN was the founding? If it was before EM came on the scene with his money, then the founding happened with mostly ME's money. At that point the company was done being founded, and needed more money to grow into the going concern it is now. That's where EM's money came in handy, for sure. But that would also mean EM's money had nothing to do with the founding.

Am I on target with that or off base? (I'm not even close to being a lawyer)
 
But WHEN was the founding? If it was before EM came on the scene with his money, then the founding happened with mostly ME's money. At that point the company was done being founded, and needed more money to grow into the going concern it is now. That's where EM's money came in handy, for sure. But that would also mean EM's money had nothing to do with the founding.

Am I on target with that or off base? (I'm not even close to being a lawyer)

The second part of the definition -- supplying the funds for the "establishment" of the entity, could answer your question, which is whether the "founder" is the person who originally supplies the money to get the entity going.

But the first part of the definition basically says that anyone who "endows" the entity is considered a "founder". This would mean, for example, that Warren Buffett is a "founder" of the Bill and Melinda Gates Foundation, because even though the Gates' were the original "founders", Buffett became a "founder" when he donated his $33 billion (give or take) to the organization.

I don't want to get caught in the weeds on this. I think the larger point from the perspective of the lawsuit is that we've all been going on a very common-sense understanding of what a "founder" is of a company. Not that this definition ends the whole matter, but it raises the more philosophical point that there is no one definition of what a "founder" is, and if one looks at the charitable world for guidance or an analogous situation, EM's contributions fall four-square within the common definition of a "founder" under the law for charitable foundations.

Remember, in order for ME to prevail on his defamation claim, he's got to prove first and foremost that what EM is saying (that he's a "founder" of TM) is an untrue statement. If we think of common successful claims of defamation, it's things like announcement a movie star is pregnant when they're not, or that they engaged in some very specific action that is possible to definitively prove true or not. I'm not sure we have that same situation here because if "what is a 'founder'?" becomes an esoteric question, I don't see how ME can prevail on that claim, which is really the heart of his whole case.
 
To Dave's point, Timing and Money. The money part. How much is "funds"? An office a letterhead, and hours of research done into a Tesla powerpoint presentation does not seem like much but ME put his own cash into the LithTZero ($100K?) as an investment into proving the company's product concept. EM may have never invested in Tesla without the amazing performance of the TZero that he was not allowed to buy.
 
The judge didn't say Martin is not a founder. He didn't say Elon is not a founder. He just didn't address it. Nor is it clear that the law cares one way or the other.

Alternating Current was an idea Nikola Tesla brought to both Thomas Edison and George Westinghouse. Edison screwed him, and Westinghouse made it happen with his money and engineering staff. Both were great people. Tesla had the initial passion and idea. Westinghouse understood the mathematics (Edison didn't and had prior investments in D/C). Is Tesla not the founder of A/C, but George Westinghouse is?

So Elon, if "there was no there there" why didn't you start your own company from scratch instead of funding a company that already existed and placing Martin as CEO with a prominent public face?

It doesn't make sense. I don't have a problem with Elon wanting to be known as a founder, but it seems weird that he denies Martin is and trashed him after firing him. That tells me to Elon this is all personal and fueled by his narcissism. I hope I never cross paths with him in business or otherwise.
 
The judge didn't say Martin is not a founder. He didn't say Elon is not a founder. He just didn't address it. Nor is it clear that the law cares one way or the other.

A very good point -- but whether or not Elon is a founder or not is the lynchpin of Martin's entire defamation claim. There were no allegations in the Complaint that Elon was affirmatively saying that Martin wasn't a founder, but the assertion is that by Elon claiming that he's the/a founder of TM, it dilutes Martin's role with the company and that hurts him financially because he doesn't get credit in the marketplace for being the/a founder of Tesla.

I still think Martin's going to have a very tough time getting traction on this claim. Yesterday's ruling does little to increase his odds.
 
A very good point -- but whether or not Elon is a founder or not is the lynchpin of Martin's entire defamation claim. There were no allegations in the Complaint that Elon was affirmatively saying that Martin wasn't a founder, but the assertion is that by Elon claiming that he's the/a founder of TM, it dilutes Martin's role with the company and that hurts him financially because he doesn't get credit in the marketplace for being the/a founder of Tesla.

I still think Martin's going to have a very tough time getting traction on this claim. Yesterday's ruling does little to increase his odds.

Great points, but if we go back to the blog post by Elon, titled, "In the Beginning", we can clearly see that it was never the intent to defame or reduce Martin's role in the early stages of the company. And considering all of his egregious and gross missteps, Martin was in fact lucky he was allowed to stay on so long.

And we can't be too hasty to forget that while Tesla had a basic corporation in place, They hadn’t even registered or obtained the trademark for their name and they had no formal offices or assets.

Elon used his time and resources and had the SpaceX articles of incorporation and bylaws copied for Tesla, as well as having the same people who created the SpaceX logo, create the Tesla logo. These are all critical steps to founding a business. And they were carried out by EM.

You could even argue that at the time Elon hopped on board with Tesla, the company wasn't even yet founded, or founded properly.

This is in addition to the fact that Elon also invested $6.35M (98%) of the initial round of funding that totaled $6.5M. Martin invested $75k (approximately 1%). And Elon continued to pour his own time and money into the development of Tesla.

One of my biggest issues is, while Martin wants credit for the success of Tesla, he doesn't want to also take credit for his screw ups and mistakes.

In essence, I am merely stating that considering what each party has done for Tesla, I think credit should be issued all the way around with the understanding that if it wasn't for the deft and strategic work of Elon, Tesla may not have been able to stand here before us today.
 
This is an interesting lawsuit to me, but not for the legal aspects.

I've come to the conclusion that Musk has never really been concerned about whether he is called a founder. Rather, he's irked that somebody is saying that neither he nor anybody else can call him a founder.

More consequentially, you can see that through the lawsuit and accompanying PR, Musk is securing JB Straubel's place at the table. Musk wants to build more electric cars and probably electric airplanes in the future, and JB Straubel will help him do that. None of these other guys will.
 
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Please, list them up. I'm very interested to see what they are. Just copying EM's BS won't count though.

EM's BS?

If you see the information as BS then I have already lost this argument and it's not worth my time to continue.

But do remember, this isn't just between Elon and Martin. The entire Tesla board agreed to remove Martin based on facts which you deem as BS.

@Rarity: Agreed!
 
But do remember, this isn't just between Elon and Martin. The entire Tesla board agreed to remove Martin based on facts which you deem as BS.


So are we to believe from your definitive statements that you were a party in these proceedings? How else would you be able to declare the decision to be unanimous and not a close event orchestrated by some stock deals and the gradual loading of the board with family and friends?