Purdue Football Alumni on X

NEWS: A Delaware court today dismissed several shareholder lawsuits against @Tesla after ruling that the cases must be filed in Texas instead, a big win for Tesla and Elon Musk. Vice Chancellor Bonnie W. David ruling: "I will not second-guess Tesla stockholders’ chosen forum by purporting to weigh the advantages and disadvantages of Texas law and procedure relative to our own. The owners of the corporation voted to require that derivative litigation be filed in a Texas forum. On the present facts, it is not inequitable to enforce their decision. The defendants’ motions to dismiss are therefore granted." The three lawsuits were originally brought in Delaware. However, while the cases were still in early stages, Tesla announced and then approved a corporate change moving its legal home from Delaware to Texas. As part of that move, Tesla adopted a new bylaw requiring that all shareholder derivative lawsuits be filed exclusively in Texas courts. The shareholders argued their cases should stay in Delaware since they were filed there first. The court disagreed, saying Tesla’s new Texas forum rule is valid and applies even to existing cases because the litigation had not progressed far and the change was properly approved by shareholders. As a result, the Delaware court granted Tesla’s motion to dismiss, not on the merits of the allegations, but because Delaware is no longer the correct venue. The plaintiffs would need to refile in Texas if they want to continue the cases. Big legal win for Tesla!