Musk's last-minute motions denied, trial Monday over Twitter purchase posts

Senior U.S. District Judge Charles R. Breyer denied a slew of last-minute motions filed by Elon Musk's attorneys asking to postpone trial and throw out a second claim in the securities case surrounding the billionaire's 2022 purchase of Twitter, allowing trial to start Monday.

The judge criticized Musk and his attorneys, Quinn Emanuel Urquhart & Sullivan LLP, for waiting until the days before the trial to challenge a claim -- that Musk engaged in a scheme to lower Twitter's stock price and renegotiate his purchase of the company -- they'd known about since the complaint was filed.

"Seven days before trial, Musk asked this Court for a continuance on an issue that, frankly, should have been raised on his motion to dismiss," Breyer wrote in the order issued Thursday. Giuseppe Pampena v. Elon R. Musk, 3:22-cv-05937 (N.D. Cal., filed Oct. 10, 2022).

The plaintiffs, former Twitter investors, sued Musk over a series of social media posts after he agreed to buy the company. He posted that the deal was on hold because of the prevalence of fake accounts on the platform. The plaintiffs say the posts were materially false and caused Twitter's stock price to fall by over 30%.

Musk's attorneys asked Breyer to bar the plaintiffs from presenting a second theory, that the posts reflected a scheme to lower Twitter's stock price, rather than only being false. In a motion in limine, they argued the theory was just an attempt by the plaintiffs to get evidence back into the trial that Breyer had thrown out, and that the two claims weren't substantially different. Even if Breyer found that the two claims were distinct, they argued, the scheme claim relied on a deposition Musk gave a Delaware court after Twitter sued him to enforce the deal and that he was protected by the Noerr-Pennington doctrine.

But Breyer decided the protections Noerr-Pennington gives speech made while petitioning the government don't apply if that speech itself is part of a broader scheme, citing the 9th U.S. Circuit Court of Appeals' 1982 decision in Clipper Exxpress v. Rocky Mountain Motor Tariff Bureau, Inc.

"Musk is wrong," Breyer wrote. "The Ninth Circuit has already spoken on this issue--over four decades ago. The Ninth Circuit has squarely held that when 'petitioning activity is but a part of a larger overall scheme to restrain trade, there is no overall immunity.'"

When Breyer said at a pretrial conference he would deny the motion, the defense submitted a supplemental brief saying the plaintiffs failed to properly outline the claim in their complaint and asked the judge to postpone trial by four months to prepare for battling the theory. The judge heard the brief a week ago behind closed doors.

Musk's lawyers argued that the plaintiffs alluded to the scheme claim in the complaint but didn't plead it "with particularity" as required for fraud claims by Rule 9(b) of the Federal Rules of Civil Procedure.

Breyer disagreed, saying that the plaintiffs described the alleged scheme "in detail" throughout the complaint, even if they only used the word "scheme" five times.

"Rule 9(b) does impose a heightened pleading standard for fraud claims, it does not contain the word count requirement that Musk appears to suggest," Breyer wrote.

Since the claim was stated clearly in the complaint, Breyer said, Musk has no reason to request that the trial be postponed.

"He cannot now reasonably contend that he would be prejudiced in his 'ability to adequately prepare a defense' against a theory that was part of the complaint, brought up during discovery, permitted during summary judgment, and then permitted again after a pretrial motion in limine," Breyer wrote.

The judge also rejected Musk's motion to reopen class certification on the basis that Breyer only certified a class for the false statements claim.

Breyer seated a jury on Feb. 19, and trial was to begin Monday in San Francisco. Each side was expected to be given five days to present their case.