Contempt for Musk clouds jury selection in Twitter takeover trial

SAN FRANCISCO (CN) — Jury selection kicked off Thursday in San Francisco federal court in a trial centered on Elon Musk’s $44 billion buyout of Twitter in 2022.

Musk is set to stand trial in early March in a class action brought by Twitter investors who claim Musk manipulated Twitter stock leading up to his multibillion-dollar purchase of the social media platform.

Investors, including lead plaintiffs Steve Garrett, Nancy Price, John Garrett and Brian Belgrave, sued Musk in October 2022 over claims they suffered major losses when Musk deliberately made misleading statements about the presence of spam bot accounts on Twitter to drive down the company’s stock, in hopes of backing out of the acquisition deal or renegotiating more favorably for himself.

The investors claim that Musk attempted to artificially lower Twitter’s stock price after agreeing to acquire the platform, while also failing to disclose when his Twitter stake exceeded 5% or that he had initially been invited to join Twitter’s board.

Twitter ultimately sold to Musk for $54.20 per share, only closing after the company sued Musk to force the deal to go through, while he accused the platform of hiding information about fake accounts.

A large portion of jury selection focused on prospective jurors' opinions of Musk and whether they would be able to be impartial. 

“Whatever your opinion is on Mr. Musk, Twitter or Tesla, can you set it aside in the sense that you will judge the defendant based solely, emphasize solely, on the evidence produced in this trial and the law as I give it to you?” U.S. District Judge Charles R. Breyer asked the prospective jury pool.

Musk’s ties to the Trump administration were also a focal point of jury screening, with Breyer telling prospective jurors the case is “not a referendum on the president of the United States.” 

“Even though you may have strong views on the presidency, this is not the forum where this is expressed,” he told prospective jurors, adding that they should affirm that “whatever your views of the presidency are, they are not going to influence your views in this case.”

More than a third of the initial jury pool indicated they could not serve impartially and were dismissed by the judge. Others were questioned by the parties about the answers they provided to the court, indicating a strongly held negative opinion of Musk. 

Stephen Broome of Quinn Emanuel Urquhart & Sullivan, an attorney for Musk, raised concerns with Breyer following jury screening that the court was "desensitized" to how improper it would be to seat jurors who expressed extreme dislike for the defendant. He claimed that if Musk was any other defendant, a juror who said “I hate that guy and he has no moral compass” would be dismissed. 

Breyer pushed back, saying that the case was not like any other because Musk is a well-known public figure akin to a United States president, and jurors are allowed to have personal views on public figures.

“He is a public figure, and as a public figure, he will excite views, strong views. The question is whether or not they can set them aside,” said Breyer, a Bill Clinton appointee presiding over the trial. 

The trial is scheduled to begin on March 2 and go through March 16 with nine jurors and no alternates. The defense has not indicated whether or not Musk will testify at trial. 

In December 2023, Breyer allowed the investors’ claims to advance, finding Musk made a series of statements that were false or misleading in the days following the announcement of his Twitter purchase. 

The statements at issue include a tweet from May 13, 2022, where Musk said the Twitter deal was on hold “pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users.” Twitter stock declined over 9% on the day of the tweet; investors said they interpreted the tweet to mean that Twitter was hiding information.

Musk followed this up with a comment at a conference three days later that fake and spam accounts made up at least 20% of Twitter users at the time. When then-CEO Parag Agrawal commented that there was no way for external parties to calculate this information, Musk tweeted a poop emoji at Agrawal. Musk tweeted the next day that the deal would not be moving forward until Agrawal provided evidence of bot numbers under 5%.

Breyer again allowed the claims to proceed when he denied Musk’s motion for judgment on the pleadings in August 2024, finding that Musk made the same arguments in December 2023, “which this court explicitly considered and rejected.”

Last October, Breyer denied the plaintiffs’ motion for summary judgment, finding that there were “genuine issues of material fact.” 

He additionally denied the plaintiffs’ motion to disqualify one of Musk’s lawyers, Alexander Spiros of Quinn Emanuel Urquhart & Sullivan, in December based on the argument that Spiros is also a witness in the case. Breyer allowed Spiros to continue with the defense because Musk had provided informed written consent to keep Spiros as trial counsel, even if he was called as a witness. 

Further, the day before jury selections were scheduled to begin, the judge denied X Corp’s efforts to intervene in the case to protect privileged information, ruling that the court — and Musk as the chairman of X Corp — can protect the company’s privilege during trial. 

The plaintiffs are represented by Aaron P. Arnzen and Francis A. Bottini of Bottini & Bottini and Joseph W. Cotchett, Mark C. Molumphy, Tyson C. Redenbarger, Elle D. Lewis, Caroline A. Yuen and Gia Jung of Cotchett, Pitre & McCarthy.

Musk is represented by Stephen A. Broome, Ellyde R. Thompson, Stephanie Kelemen, Michael T. Lifrak and Rebecca Arno of Quinn Emanuel Urquhart & Sullivan.

Representatives for both parties did not immediately respond to a request for comment.

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