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Martin Eberhard sues Elon Musk and Tesla Motors

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Everything is relative my friend, instead of trying to "win" by being technical (since your statement of "figures" has nothing to do with months not being ages in your book) try actually addressing the issue at hand.

I stand by my statements. I mean come on, someone makes a comment that Martin was removed by the BOD and not just Elon, and the response is "Do you know how was on that board?" or "Were you at the board meeting?". Come on, it's a real sign of a zealot when facts supporting their cause can't be disproven and any facts for the opposing side are then trivialized.

To address that above by the way, Martin himself has pretty much stated that he didn't want to be CEO and in not so many words admitted he wasn't fit for the job (he wanted to do the technical work). Additionally, wasn't there an article not too far back where (I believe it was by Siry) it was stated, in an unbiased manner, that bringing this lawsuit into the public would be bad for Martin as it would reveal a not-so-stellar tenure as CEO?

So, was he removed because he admittedly wasn't fit to be a CEO and really should've been on the dev team, or was it because EM coordinated a coup? To the rational, unbiased mind, there's more evidence for the former than the latter.

I have nothing against Martin by the way. He had a vision, and things didn't go right for him. But this lawsuit is silly. The ratio of valid complaint to drama-fluff is way too small.
 
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Text of 07/29/09 ruling

The ruling can be found around the middle of the page here: Superior Court of California. County of San Mateo
Rulings are retained at that page for 5 days. Text is available through Google cache and as PDF attachment to this post.

Arnold, what are the next steps in the process? I did notice the following at the end of ruling:
· Responding party shall prepare and submit a formal order complying with California Rule of Court 3.1312 for the Court’s signature.
· If the tentative ruling is uncontested, it shall become the order of the court, pursuant to Rule 3.1308(a)(1), adopted by Local Rule 3.10.
 

Attachments

  • CIV 484400 - 2009-07-29.pdf
    84.7 KB · Views: 618
Arnold, what are the next steps in the process? I did notice the following at the end of ruling:

All this means is that the parties have to create a written document (the "Order") that mirrors what the court said in its ruling about the various claims in order to make the ruling formally effective. No big deal.

As for moving forward, I assume at this point the parties will start some discovery, which is the long, boring part of litigation where each party is entitled to get information from the other side. This includes interrogatories, which are written questions that require a written response, document requests/production, where documents relevant to the litigation are requested, and presumably provided by the other side, and depositions, which are where fact (and expert) witnesses are put in front of opposing counsel, who have the opportunity to ask them basically any question they like. If anyone has ever been in a deposition, it probably falls somewhere between getting root canal and watching James Inhofe talk about global warming on the pain scale.

I should also note that "documents" include electronic data, so e-mails and any other electronically stored data can be requested and must be provided by one side to the other. It is sometimes the case that arrogant plaintiffs and/or defendants will often trip themselves up at this stage by refusing to provide certain relevant documents, which can lead to very negative outcomes for them in litigation. It's being too clever by half. You may have heard about Morgan Stanley "inadvertantly" not providing certain relevant documents to Ron Perelman in a lawsuit he had against them, and it ended up costing them about US$1 billion. I will leave it to your imagination to figure out who in this lawsuit would try to be that sneaky/arrogant and mess with the discovery process.

Discovery can take months or years. I don't have a ton of experience in California state court, but I would assume that we're looking at a period of a least 6 months while this goes one, and probably longer.
 

A could of other notes. This was a very interesting article. I found this nugget to be particularly frustrating:

Yet Musk made little of these accusations and wasn’t pleased with the timing of the legal difficulties.

“Just as we’re emerging from the darkness and things are going really well, you get distracted with this unbelievable lawsuit,” he said. “It’s clearly a distraction for me and some other members of the team.”

This is ridiculous -- if Musk didn't want the "distraction" of a lawsuit, he shouldn't have cut off Eberhard's severance payments! Even though Tesla was technically within its rights doing so, being magnanimous under the circumstances and just giving Eberhard a warning on the disparagement would very likely have prevented this entire case from being brought. Now, Tesla has to spend a lot more money on legal fees defending the case (not to mention if Eberhard actually wins on some of his claims) than they would have ended up paying to Eberhard under his severance agreement, and has gotten a ton of negative publicity out of it to boot. As a neutral observer (I just got interested in Tesla right before they announced the Model S and have no way of forming an opinion on who's the good guy and bad guy in this situation), this is the first comment I've seen out of Musk that got my eyes rolling. In the immortal words of Teddy KGB: "Pay the man his money!" so we can all move on with our lives and get Tesla out of court.

I also thought this was a very interesting article about Eberhard's lawyer:

Law.com - Relatively Unknown Lawyer Takes On High-Profile Tesla Litigation

What this article tells me, between the lines, is that Eberhard couldn't get a more established, successful attorney to represent him in this case. That doesn't mean this guy isn't a great lawyer (I'd never bet against Israelis in any endeavor), but I presume that Eberhard would have gotten a more established, well-known attorney who had won these types of cases in the past had he been able to do so. This more or less confirms what I gleaned from the Complaint, which is that Eberhard is going to have an uphill battle if he wants to ultimately win at trial, and there were probably at least a few attorneys who looked at his claim and came to the same conclusion and declined to take his case.
 
The University Registrar’s Office maintained that the only record they have of Musk is in the form of an applicant record. In a letter sent last month to Musk, Director of Graduate Admission Judith Haccou confirmed that Musk was in fact accepted into a graduate program in materials science & engineering in 1995, but did not enroll with the University and therefore never received an official certification document.
I think this should put to bed the "misrepresented connection to Stanford" part of the Complaint. I said somewhere earlier that dropping out two days into the quarter is the same as never enrolling. All that really matters is that he was accepted. Shouldn't confuse MatSci with Physics, though.


What this article tells me, between the lines, is that Eberhard couldn't get a more established, successful attorney to represent him in this case.
Peretz has been handling a number of lawsuits against Tesla. Perhaps he's just become the go-to-guy.
 
All this legalese makes my head spin.
This is what I got out of it.

Eberhard claimed Musk never officially enrolled at Stanford, citing this claim as an example of the current CEO’s dishonesty and history of misrepresentation. {claim}"In several national publications, Musk had allegedly misrepresented his affiliation with Stanford University, claiming to have ‘dropped out’ of a Ph.D. program at that university when in fact he was never enrolled at Stanford,” the lawsuit stated.
Furthermore, in a confusing turn of events, he [Musk]went on to corroborate Eberhard’s accusations, stating that he indeed never enrolled at any Stanford graduate program.
The University Registrar’s Office maintained that the only record they have of Musk is in the form of an applicant record. In a letter sent last month to Musk, Director of Graduate Admission Judith Haccou confirmed that Musk was in fact accepted into a graduate program in materials science & engineering in 1995, but did not enroll with the University and therefore never received an official certification document.

Have I oversimplified the "Stanford" part of this argument?
 
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Have I oversimplified the "Stanford" part of this argument?
I don't think so. There isn't really that much to it.

Furthermore, in a confusing turn of events, he [Musk]went on to corroborate Eberhard’s accusations, stating that he indeed never enrolled at any Stanford graduate program.
This is just poor writing/understanding by a Stanford undergrad. There's no "confusing turn of events." Elon didn't really say he enrolled; he deferred enrollment after the quarter had started. Of course he never actually went back to enroll so in a way he quit or "dropped out". Again, all that really matters is that he got accepted, which the article confirms.
 
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Peretz has been handling a number of lawsuits against Tesla. Perhaps he's just become the go-to-guy.

Certainly a reasonably possibility. But given the publicity around Eberhard's claim, attorneys who would normally not take the claims of anonymous former Tesla employees would leap at the chance to represent Eberhard if there was a decent chance they could win. Not only do they make money, but they get themselves all over the news. I've seen enough ads in BART trains to know that plaintiffs-side employment attorneys in California like publicity as much as they do anywhere else in the country.

So if Eberhard chose Peretz because he's the go-to guy to sue Tesla, without bothering to see if a much more experienced and renowned attorney would take his case, that doesn't say much for his judgment on that front.
 
Again, all that really matters is that he got accepted, which the article confirms.


Exactly. This is part of a broader argument by Eberhard in his Complaint and has no legal component to it. Namely, that Musk is some sort of serial liar who routinely exaggerates his own accomplishments and importance. There's no legal claim attached to the facts regarding Musk's undergraduate degree from Penn, or whether or not he was accepted to attend Stanford's graduate program and intended on attending until he decided to pursue his startup instead.

Rather, these allegations are intended to prove Musk's propensity for lying, as in, "if he lied and exaggerated about these things, then it's more plausible to think he lied/exaggerated about his importance to the founding of Tesla".

As far as I can tell, since the Complaint was filed, it's been demonstrated that Musk graduated from Penn at some point, and that he was accepted into the Stanford graduate program, making these associative claims of serial lying extremely weak.

I consider this to be a huge tactical mistake by Eberhard's attorneys. In trying to demonstrate Musk's lack of credibility, they've instead bolstered Musk's credibility and probably hurt their own somewhat. At the end of the day, assuming this ever goes to trial, it's going to come down to which person/side the jury believes, Eberhard or Musk. So their credibility and propensity for the truth becomes of paramount importance in helping the jury figure out whom to believe. A general rule of thumb in litigation is, if you're going to shoot (like Eberhard did on this school thing), make sure you hit the mark, because otherwise it slingshot's back onto you. This is where a much more experienced attorney might not have put something like this into a Complaint without first making sure it was an accurate accusation.

Of course, I got the feeling reading both the Complaint and the Answer that both clients (Eberhard and Musk) forced their attorneys to put lots of stuff in there that the attorneys otherwise wouldn't have bothered to include. This whole school thing is so besides the point of the legal claims it's a little ridiculous it's getting this much attention.
 
This is just poor writing/understanding by a Stanford undergrad. There's no "confusing turn of events." Elon didn't really say he enrolled; he deferred enrollment after the quarter had started. Of course he never actually went back to enroll so in a way he quit or "dropped out". Again, all that really matters is that he got accepted, which the article confirms.

I agree. Getting accepted is impressive by itself. They don't take dummies.
I would love to have an acceptance letter from Harvard or Stanford. I would frame that. :)

The difference between enrolled vs accepted is minor and easy to make a mistake when describing your background.
 
Dismissed

Tesla lawsuit dismissed - Triangle Business Journal:

Tesla lawsuit dismissed - Silicon Valley / San Jose Business Journal:
Former CEO Martin Eberhard voluntarily requested that the suit be dropped on Aug. 7, according to his lawyer, Yosef Peretz.
Peretz declined to comment further on Tuesday, other than to say that more may become public about the case late in September.

Legal Pad: Tesla Case Dropped - Settlement Afoot?

Looks like erstwhile and embittered Tesla CEO Martin Eberhard’s legal feud with Tesla had about as much life as one of those battery powered cars they’re making. The case has been voluntarily dismissed — has there been a settlement?

Eberhard had sued Tesla in May for defamation for publicly blaming Eberhard for production delays and whole laundry list of wrongdeeds from not paying his severance when he was ousted two years ago to crashing his Tesla Roadster. Eberhard and his new-kid-on-the-block, unafraid-of-risky-cases lawyer Yosef Peretz beat back the Tesla’s anti-SLAPP motion, the first hurdle for any defamation case. Although they did lose in their effort to have Eberhard declared a founder. And then on Aug. 7, the case was voluntarily dismissed. No one will comment: Peretz, Tesla or Tesla’s lawyers at Wilson Sonsini. But usually when a case is dismissed like this it means that there’s a settlement or at least a settlement in the works. We will keep you posted with the swiftness of a Tesla Roadster.
Zusha Elinson
 
Good news. I guess most agreed there was little to be gained. Perhaps they can settle their issues as well (personally)

Looks like erstwhile and embittered Tesla CEO Martin Eberhard’s legal feud with Tesla had about as much life as one of those battery powered cars they’re making.

Gotta love the press
 
REPORT: Eberhard drops lawsuit against Tesla - Autoblog Green

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