A federal judge in Texas who holds Tesla shares has rejected an attempt to force Elon Musk to recuse himself from overseeing the company’s legal battle with X and Media Matters.
Media Matters, the left-leaning nonprofit group Musk is suing for defamation, has filed a motion arguing that Company X should identify Tesla as an “interested party” in the lawsuit because of Musk’s close ties to both brands.
The label could force U.S. District Judge Reed O’Connor, who revealed in 2022 that he owns between $15,001 and $50,000 worth of Tesla stock, to dismiss the case.
O’Connor accused Media Matters of attempting legal “gamesplay” when it denied the motion last Friday.
The judge found that Media Matters had not met the legal standard for proving that Tesla had an “economic interest” in X.
“Defendants have failed to demonstrate that Mr. X’s alleged relationship with Tesla meets this standard,” O’Connor said. “Instead, Defendants appear to be attempting to force the removal of Defendants through the back door through enforcement motions.”
“This type of bargaining is improper and contrary to the rules of the Northern District of Texas,” he added.
O’Connor ordered Media Matters to pay Mr X’s legal fees relating to the claim.
A representative for Media Matters did not immediately respond to a request for comment on the judge’s decision.
X filed a lawsuit against Media Matters in November, after Musk previously called the nonprofit “pure evil.”
The lawsuit alleges that the nonprofit “knowingly and maliciously fabricated images depicting advertisers’ posts on Company X’s social media platform juxtaposing them with neo-Nazi and white supremacist extremist content, and then portrayed these fabricated images as being what a typical Company X user would experience on the platform.”
O’Connor’s decision comes just days after she decided to recuse herself from a separate federal antitrust lawsuit filed by X against the World Federation of Advertisers, the now-disbanded nonprofit GARM, and a handful of well-known companies, including Unilever and Mars.
The judge did not explain why he recused himself from the case. O’Connor also owns shares in Unilever, which may have contributed to his decision. According to Ars Technica:.
In the lawsuit, Musk’s company accuses the WFA and GARM of orchestrating an illegal, collusive boycott to withhold advertising dollars from X over “brand safety” issues.
The lawsuit was filed shortly after the Republican-led House Judiciary Committee released a damning report detailing evidence that GARM executive Robert Rakowitz and others orchestrated a campaign to restrict advertising to numerous news outlets and online platforms, including The Washington Post.
GARM abruptly shut down earlier this month, citing the costs of its legal defense against Musk.
