Enlarge / Elon Musk speaks at the Satellite Conference and Expo in Washington, DC on March 9, 2020.
Getty Images | Win McNamee
U.S. District Judge Reed O’Connor today removed himself from Elon Musk’s lawsuit alleging that advertisers targeted Company X with an illegal boycott.
O’Connor appears to be a judge appointed by Musk in a lawsuit filed last week against the World Federation of Advertisers and several major companies. To secure her, Musk’s company, X, filed suit in the U.S. District Court for the Northern District of Texas in Wichita Falls.
O’Connor has purchased Tesla shares, a fact that has caused controversy in another X lawsuit that she is currently handling. She also has investments in Unilever, one of the defendants in the X advertising lawsuit. It appears that the Unilever investment is what prompted O’Connor’s decision to step down.
“I hereby recuse myself from the above-numbered case,” O’Connor wrote in a filing today. The case has been reassigned to U.S. District Judge Ed Kinkead. Both judges were appointed by President George W. Bush. O’Connor is based in Fort Worth and Kinkead is based in Dallas.
O’Connor owned less than $15,000 in Unilever stock, according to financial disclosure reports for calendar year 2022. The investment generated less than $1,000 in dividends in 2022, the filings show. Unilever is named as a defendant in the X advertising lawsuit, along with Mars Incorporated, CVS Health Corp. and Orsted A/S.
The 2022 disclosures also list the purchase of between $15,001 and $50,000 worth of Tesla stock. “The judge’s disclosure documents for 2023 have not been made public, so it is unclear whether Judge O’Connor sold off his investment of up to $50,000 in Tesla stock,” NPR reported Friday. “He requested an extension to the filing deadline, according to an official at the administrative office of the U.S. courts who was not authorized to speak publicly.”
Kinkead has filed a financial disclosure report for 2023, which is much shorter than O’Connor’s and lists several rental properties and bank interests.
Media Matters questions judge’s impartiality
O’Connor’s Tesla shares are at issue in X’s lawsuit against Media Matters for America, but O’Connor has not recused herself from the case. O’Connor’s withdrawal from the advertising lawsuit but her remaining in the Media Matters lawsuit suggests that her Unilever investment is the main driver for her withdrawal.
Media Matters drew Musk’s ire when it published findings that ads on X were running next to pro-Nazi content, and Musk’s lawsuit blames Media Matters for the platform’s advertising losses.
In a July court filing, Media Matters argued that Musk’s electric car maker, Tesla, should have been listed by Company X as a “party in interest” in the case. “If the court in this case actually owned Tesla stock, then challenge would be necessary under two separate provisions of the Challenge Law,” Media Matters wrote. “But by failing to disclose Tesla, Company X has deprived the court of the information it needs to make an informed challenge decision.”
Media Matters said there was a public connection between Musk and the Tesla brand, which raised questions about whether “a judge with a financial interest in Musk” could “fairly adjudicate” the lawsuit brought by Mr X.
“An investment in Tesla is primarily a bet on Musk’s reputation and business judgment, which are material issues in this case and would make one ineligible to own Tesla shares,” Media Matters wrote.
X, formerly known as Twitter, argues that O’Connor shouldn’t recuse herself from the Media Matters lawsuit. Tesla exerts no control over X, and Media Matters’ assertions that Tesla has an interest in the case are “frivolous and speculative,” X wrote in court documents.
O’Connor in April denied Media Matters’ motion to stay discovery until the motion to dismiss was resolved, handing Company X a victory. Media Matters complained about the financial burden of the litigation, telling the court that “Company X’s discovery demands are excessively broad and unduly burdensome.” Media Matters also issued a statement telling the news organizations that they should fire employees because of the “multi-pronged legal attack.”
O’Connor was appointed to take up the Media Matters case in November 2023 after the original judge retired.
