Tesla files suit in response to coronavirus restrictions after Musk threatens to relocate

Company alleged in its suit that Alameda County had violated due process and equal protection clauses of Fourteenth Amendment

Chief executive Elon Musk said he would take company’s headquarters and future programmes to Texas and Nevada (Getty)

Tesla on Saturday filed a lawsuit against the California county that has prohibited the electric car company from producing vehicles during the outbreak.

The company alleged in its suit, filed in the US District Court for the Northern District of California, that Alameda County had violated the due process and equal protection clauses of the Fourteenth Amendment and sought an injunction that would allow the company to operate. Its Fremont manufacturing plant is located in that county.

The suit followed chief executive Elon Musk threatening in a series of tweets earlier Saturday that the company would sue and move Tesla’s headquarters and future programmes to Texas and Nevada. He appeared to leave open the possibility of maintaining some operations in Fremont depending “on how Tesla is treated in the future”.

He tweeted that the restrictions imposed by Alameda County are “contrary to the Governor, the President, our Constitutional freedoms & just plain common sense!”.

Tesla did not immediately respond to a request for comment. In the lawsuit, the company argued that the county-level orders are inconsistent and the state orders should supersede local orders.

“We need to continue to work together so those sacrifices don’t go to waste and that we maintain our gains,” the Alameda County Public Health Department said in a statement on Saturday. “It is our collective responsibility to move through the phases of reopening and loosening the restrictions of the Shelter-in-Place Order in the safest way possible, guided by data and science.”

The suit and Mr Musk’s public comments come a day after the company said it would resume vehicle production, only to again provoke the ire of local health officials, who said Tesla “must not reopen”. Alameda County leaders said Tesla did not meet the criteria to resume operations even as California began opening up other parts of the state.

Tesla is headquartered in Palo Alto, California, which is in a different county, and it conducts much of its manufacturing at its Fremont factory. Both are in the Bay Area, which was the first major region in the nation to order residents to shelter in place, even before the state did.

California this week began loosening restrictions and allowing businesses to start reopening. But the Bay Area counties have not yet followed, and state officials have made it clear that county orders take precedence.

Mr Musk had started calling workers back to the factory Friday. It was at least the second showdown with the county. As Alameda County issued its first shelter-in-place order in mid-March, Mr Musk sent an email to employees telling them he would continue reporting to work, although they could stay home if they felt uncomfortable. County officials then ordered the factory to shut down because it was not an essential business under the county’s definition.

Mr Musk’s tweet came as a shock to many who follow Tesla, even as the CEO had made increasingly erratic pronouncements on and off the platform during the pandemic. The tech billionaire is known for leveraging Twitter to dispense material information, including a tweet in 2018 that said he had secured funding to take the company private at $420 (£338) a share. It was unclear if that was true, and he and Tesla were later each fined $20m (£16.1m) by the Securities and Exchange Commission.

Mr Musk has also consistently downplayed the seriousness of the coronavirus public health orders, calling panic over the virus “dumb,” theorizing about the virus’ effect on children and promoting scepticism over the necessity for social distancing and shelter-in-place orders. On Tesla’s earnings call late last month, he launched into a profanity-laced tirade over the ongoing orders after highlighting what he saw as the “serious risk” posed by the factory’s closure.

“To say that they cannot leave their house and they will be arrested if they do, this is fascist,” he said on the call. “This is not democratic – this is not freedom.” The previous day, he tweeted: “FREE AMERICA NOW.”

Then on 1 May, he tweeted Tesla’s stock was priced “too high”, sending the share price plunging during the middle of the trading day.

Mr Musk highlighted Tesla’s economic footprint in a subsequent tweet Friday, noting the size of its manufacturing operation in a likely attempt to sway California officials. The Fremont factory employs 10,000 workers.

County court operations had largely ceased during the outbreak, but the Alameda County Superior Court division of California announced it would resume accepting almost all new civil filings beginning Monday.

The Washington Post