Tesla has filed a lawsuit against a prominent short-seller and critic of the company, one of whom claimed to have hit an employee with his car, according to the paperwork filed with the Alameda County Superior Court on Friday night. The company's decision to drop the case comes two weeks after the judge asked Tesla to transfer evidence to substantiate his claims.
Tesla says it has video and audio evidence that would do exactly that. But in a letter to the court on Friday evening, a copy that Tesla has provided The edge, the company's lawyers disagreed with the court's order to produce the evidence.
The Tesla legal team argued that the production of evidence would contain information about employees involved in the case and who "was never intended for public consumption." Company lawyers also claim that after the original complaint, employees are subject to "unwanted publicity and online harassment".
The company declined to comment further and referred instead The edge until Friday's submission.
In April, Tesla asked the court for a temporary restraining order against a prominent critic, previously known only to Twitter, and @skabooshka. When applying for the restraining order, Tesla revealed to the court that the man who ran the account was a California resident named Randeep Hothi.
Earlier that month, Hothi tweet photos & # 39; s that he took of a company-managed model 3 that Tesla seemed to be filming for the then & # 39; Autonomy investor day & # 39 ;. Hothi claimed that he had seen the driver break local speed limits and suggested that Tesla might misrepresent the footage during the event.
Tesla told the court that Hothi "" harassed and threatened the people who were in that Model 3 ". The company claimed that he had "chased these workers on the public highway for about 35 minutes, alternately driving in front of, beside and behind them, and dangerously swinging close to the vehicle."
Hothi troubles also a number of times before the run-in from Tesla in Fremont, California, the company claimed in its original application. (The majority of the deposits at the docket can be viewed here.) In August 2018, Tesla said it had found an Arlo security camera attached to a utility pole outside the factory and that an Arlo customer service representative owned the camera at Hothi. In January 2019, Tesla said it had found another security camera hidden in a utility box in one of the factory's parking lots, which was eventually removed by Hothi's own security camera & # 39; s.
In February 2019, Tesla found Hothi in his car in one of the factory's parking places. Two security officers approached him, with someone taking photos and instructing him to leave. Tesla said that Hothi is not rolling down his window and instead "drove his car out of the parking lot quickly and recklessly." The company also said that Hothi hit one of those employees with his car.
Hothi is one of many people who have a short supply of Tesla, which means that he has actually placed a bet that the company's stock price will fall by a certain date. He has in the past posted photos and videos of Tesla employee parking spaces to be able to estimate whether the company is running at full speed.
Hothi and other short sellers have also photographed parking areas where Tesla stores the inventory, which they see as an indicator of the demand (or lack thereof) of the company's cars.
Tesla CEO Elon Musk has for years tried to tame the people who have a short supply of Tesla & # 39; s, often promising "Burn" their positions by announcing good news. But the community seems to grow as more Musk is hostile and it especially exploded after last year's "secured finance" debacle that some of the more prominent shorts said, the reason they followed Tesla closely.
They organize using the Twitter "cash tag" $ TSLAQ, and post research a website with the same name. The community quickly gathered around Hothi when the restraining order struck, and even a previously pseudonymous poster started a GoFundMe for Hothi, it has now exceeded $ 100,000. (That poster was @MontanaSkeptic, or Lawrence Fossi, whose identity was revealed after Musk called his boss and had him fired.)
Responding to Tesla's allegations, Hothi lawyers wrote in a May court that he is "a citizen journalist whose investigation and data have exposed discrepancies in claims made by Tesla and his CEO about production activities, technological capabilities, financial health , and the treatment of employees and customers. "They claimed that Hothi's research was" an informed public debate about technology in Silicon Valley and has won a wide audience for him. "
The Hothi lawyers said that Tesla & # 39; a lurid photo & # 39; of their client, and argued that the company & # 39; has a history in which the legal system is used to silence critics & # 39 ;. They cite the example of Martin Tripp, a former Tesla employee who became a whistleblower and was sued by Tesla for allegedly hacking business systems and stealing trade secrets. (Tripp is now the opposite, alleged defamation.) They also pointed to intimidation that Hothi experienced as a result of the restraining order, including being referred to as a terrorist. Musk even mailed Volkswagen CEO Herbert Diess about Hothi in 2018 after he found out that his brother works for the German automaker.
The Hothi lawyers also claimed that Tesla's security staff gave conflicting reports about the February incident and that none of his actions during the April meeting with the Model 3 qualified as stalking or violence.
In May the Hothi legal team asked Tesla to present all his evidence to the court. On July 1, the court partially accepted this request and ordered Tesla to provide "limited and focused" photographic, audio or video evidence specifically related to the February and April incidents.
Tesla tried to combat this by claiming that there was "confidential company information" in the recordings. The Hothi legal team responded by offering Tesla to exclude sensitive information. But on Friday, Tesla's legal team informed the court that it would not produce that evidence because the company dropped the case completely. The submission of the evidence to the court would have endangered the safety and privacy of the employees involved in the case, the lawyers claimed.
Tesla also said it believes Hothi has clearly stated that it cannot enter its property and that Tesla will take appropriate action in the future to protect its employees & # 39; and that it will redouble its efforts to protect its employees in other ways.
Gill Sperlein, the lawyer of Hothi, said in an email The edge that "Tesla did not file this lawsuit to protect its employees, but rather to discredit Mr. Hothi." Sperlein also said that "(w) HERE was on the audio tapes that they refused to produce would have demonstrated the first point." Sperlein told it Los Angeles Times on the weekend he sent a letter to Tesla informing the company that Hothi is planning to submit "a malicious prosecution package" and Tesla is demanding that all evidence in the case be kept against him.