Tesla Fires Back at Founder, This Time in Court Calling for Dismissal

tesla-logoWhen Tesla Motors founder Martin Eberhard’s lawsuit against the electric vehicle startup and its current CEO, Elon Musk, surfaced earlier this month, Tesla called the allegations of libel, slander and breach of contract “an unfair personal attack,” and said it “will likely be filing counterclaims.” Now Tesla has filed its first official response in the San Mateo County Court, seeking to have the whole shebang dismissed.

Rather than a counterclaim, Tesla filed what’s called an anti-SLAPP motion (SLAPP stands for Strategic Lawsuit Against Public Participation) yesterday morning, arguing that Eberhard’s lawsuit represents:

[N]othing more than an attempt to curb open discourse on matters of importance to the public and to extract money from Tesla in the bargain. He [Eberhard] also takes the extraordinary (and hypocritical) step of seeking an injunction that would prevent Musk from exercising his free speech rights in public or private.”

tesla-models-muskOn the question of who gets to call himself “founder,” Tesla has an interesting response — turning it into a matter of free speech. The company argues that Eberhard’s request for Musk to be legally barred from making statements that undermine the status of Eberhard and Marc Tarpenning as the company’s sole founders and creators, or suggest that Musk himself deserves that credit, amounts to nothing less than what’s called prior restraint — the legal shorthand for violating protections for free speech by restraining expressions before they’re made public.

Tesla also disputes Eberhard’s assertion that “contractual payments arising under the agreement at issue” should be treated as wages, given that the payments were “admittedly not in exchange for the performance of any services.” And the startup labels moot Eberhard’s allegation that Tesla failed to upgrade the drivetrain on his Roadster, since the company says it has already completed the upgrade.

Given the incredible importance of being a founder for entrepreneurs, and that Eberhard makes it abundantly clear in his 146-page complaint that he wants wants his legacy as the founder (along with co-founder Tarpenning) of Tesla to be widely known and acknowledged, the biggest sting in Tesla’s response may be the argument, way down in a footnote, that the court really shouldn’t “consider any injunction to who is or is not called a ‘founder'” anyway. The term, Tesla argues, is simply a description, “without legal significance.”

Beyond all of this, Tesla offers its own version of how the company’s early days played out, portraying Musk — in contrast with Eberhard’s telling — as a savvy businessman who helped a group of entrepreneurs with a half-baked idea to make electric cars, but without funding, intellectual property relating to electric cars, or even the trademark for their own company name, start the venture that became the buzzy, DOE-backed Tesla Motors.

We’ll leave it to the courts to decide how valid and relevant these claims and narratives are under law, but we will keep following this case as it unfolds.

Tesla Model S photo (CEO Elon Musk in background) courtesy Flickr user jurvetson