Musk to face court

Tesla’s embattled CEO Elon Musk will face trial in December after a US federal judge dismissed his last attempt to throw out Vernon Unsworth’s defamation lawsuit.

Musk, whose reputation is being tarnished by a string of embarrassing pre-suit disclosure documents, referred to the hero British cave diver as “pedo guy” in tweets.

District Judge Stephen Wilson ruled that a jury would decide whether Musk was negligent in failing to check the veracity of his tweeted claims and “off the record” emails.

He also insisted Musk was not entitled to a free-speech defence, meaning Unsworth’s team only had to prove the negligence, not the malice, of the defamation.

While Musk is also being sued over the Tesla takeover of his near-bankrupt SolarCity company, the defamation lawsuit seems to have been entirely avoidable.

Musk slammed the cave diver, who helped mastermind the rescue of 12 teenage soccer players and their coach in July 2018 after rising floodwaters trapped them for two weeks in a cave network.

Musk insisted Unsworth baited him into the insult by his flippantly dismissive attitude over the mini-submarine Musk’s SpaceX had sent with great media fanfare to assist with the rescue.

Unsworth told a live CNN interview that the mini-submarine was a PR stunt that wasn’t useful in a complicated rescue that cost the life of one rescue diver, and that Musk could “stick his submarine where it hurts”.

Musk responded by tweeting that the Thai-based cave diver was a “pedo guy” and that he couldn’t wait to be sued and even proclaimed he was correct because Unsworth hadn’t sued him yet.

He doubled down on the insult in an unsolicited email to a Buzzfeed journalist, claiming again that Unsworth lived in Thailand because he was a “child rapist” who married a “12-year-old child bride”, then insisted the email was “off the record”.

Musk’s legal team has wriggled and squirmed to try to get him off the defamation hook, including suggesting “pedo guy” was not an offensive term in the billionaire’s native South Africa and declaring Musk was “illiquid” and didn’t have $US75,000 in cash.

Unworth’s lawyer, Lin Wood, chose the negligence tack, rather than claiming Musk’s attack was malicious, because it carries a lower burden of proof, though malice could form part of any punitive damages claim.

Musk’s attorney, Alex Spiro, insisted: “We look forward to the trial. We understand that, while Musk has apologised, Unsworth would like to milk his 15 minutes of fame.”

The discovery for the case, where legal representatives question and examine the defence’s case under the pain of perjury, found Musk had hired a English private investigator to dig up dirt on Unsworth.

It was later discovered that despite paying $US50,000 to the investigator, who turned out to have a criminal record as a conman, nothing was found.

Musk’s “off the record” email to a Buzzfeed reporter also raised eyebrows, as it is common practice in journalism for both parties to agree beforehand to keep conversations or briefings “off the record” and the reporter hadn’t done that.

Far from being 12, Unsworth’s own court filings declared that his wife was 32 when he met her in London (not Thailand).

Unsworth accused Musk over the email, insisting the Tesla front man admitted: “that he wanted the information published whether true or false, and told the reporter that publication is ‘up to you’.”

Depositions with Elon Musk’s brother -- Tesla, SolarCity and SpaceX board member, Kimbal Musk -- showed that the board never suggested the brothers recuse themselves from the SolarCity takeover process.

More critically, it showed that both brothers, and their SolarCity-founding Rive cousins, fund their lifestyles by borrowing cash against the value of their shares. In the case of the Musks, that includes Tesla, SolarCity and SpaceX.

Those lifestyles are contingent upon the share prices continuing to rise. If they fall, they are subject to margin calls from their bankers, which force them to liquidate assets (usually shares in other companies) if the share price of one of their companies tumbles, like SolarCity did.

On February 9, 2015, SolarCity’s stock dropped 30 per cent to $US18, putting both Musks in a margin-call situation.

“SolarCity just got down – just got cut down by two-thirds in value. Tesla is down almost 50 percent. Motherfucker!” Kimbal Musk wrote in an email on February 9, 2016.

The very next day, on February 10, CEO Elon Musk wrote a tweet that surprised his own engineering, manufacturing and sales teams, opening the books for Model 3 deposits.

“Model 3 reservations [$1000 down] will be accepted in Tesla stores on March 31 and online on April 1,” he tweeted.