Elon Musk at Breakthrough Prize Ceremony in April 2024 (Jordan Strauss/Invision/AP, File).
The progressive group Media Matters for America has failed to persuade a conservative federal judge that X and Elon Musk’s self-described “thermonuclear” lawsuit should be thrown out, propelling the business disparagement and tortious interference case one step closer toward trial in April of the coming year.
In a 16-page ruling in the U.S. District Court for the Northern District of Texas, Judge Reed O’Connor, a George W. Bush appointee who previously sided with Musk on discovery and who reportedly owns Tesla stock, wrote that a review of the “relevant case law” led him to the conclusion that Media Matters, its president Angelo Carusone, and extremism investigative reporter Eric Hananoki must face a suit claiming they tried to “harm” X’s business and spark an advertiser exodus with an article that said the social media company placed major brands’ ads “next to content that touts Adolf Hitler and his Nazi Party.”
The lawsuit — similar to a more recently filed X case in Texas against the Global Alliance for Responsible Media and resembling another Musk suit against the Center for Countering Digital Hate that the brother of retired Supreme Court Justice Stephen Breyer threw out in March, leading to an appeal — claimed that Media Matters “knowingly and maliciously manufactured side-by-side images depicting advertisers’ posts on X Corp.’s social media platform beside Neo-Nazi and white-nationalist fringe content and then portrayed these manufactured images as if they were what typical X users experience on the platform.”
X, attacking a “blatant smear campaign” that “falsely portrayed” the social media app as a haven for hate and haters to “harm” it financially following Musk’s forced purchase, brought claims of interference with contract, business disparagement, and interference with prospective economic advantage.
While Media Matters had attempted to challenge venue and jurisdiction by arguing that X must have been judge-shopping in Texas, considering that the allegedly offending Media Matters statements were composed in Maryland and “published” in Washington, D.C., while X is in California, O’Connor on Thursday rejected those arguments and also did not find that X had failed to state a claim.
“Plaintiff has provided sufficient allegations to survive dismissal. Plaintiff has factually alleged: the existence of contracts subject to interference; intentional acts of interference; and proximate causation,” the judge wrote of the tortious interference with contract claim. “It cannot reasonably be disputed that Plaintiff has named parties who contracted for paid ads on X. Media Matters’ reporting has acknowledged as much.”
“Because the Court has personal jurisdiction over Defendants, venue is proper, and Plaintiff has properly pled its claims, Defendants’ Motion to Dismiss is DENIED,” O’Connor concluded later.
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