UCLA Offering Course on Elon Musk's Landmark Lawsuits

Elon Musk has been involved in so many usual lawsuits throughout his career that UCLA Law professor Stephen Bainbridge is offering a course next year on the subject, New York Magazine has reported.

Musk is currently involved in a lawsuit brought against him by Twitter for his backing out of an agreement to buy the social media platform.

Bainbridge, whose expertise is in corporate and securities law, explained to the publication that he started the course because over the years, Musk has been "generating a lot of really interesting case law out of Delaware. Tesla's acquisition of SolarCity is an excellent case to teach students. And then there is a pending case on his Tesla CEO-compensation package, which is a great case."

He added that "there are all these cases from different areas that all involve Musk, and given how high profile he is this year with Twitter and everything, I thought this would be a way of really grabbing the students' attention."

Bainbridge said he hopes "to get the students to see that just because [Musk is] a controlling shareholder, and just because he probably has an enormous amount of power, that doesn't necessarily make what he's doing a legal problem — and he could very well have used appropriate processes involving independent directors and so forth."

The UCLA professor said that what he sees as a consistent narrative throughout Musk's legal cases is "the story of an incredibly smart and adventurous guy who's capable of generating ideas that produce enormous amounts of value but who would be a pain in the butt as a client because he often leaps before he looks. He has not shown a tremendous amount of respect for the Delaware courts in terms of dotting all the I's and crossing all the T's in some of these transactions."

Bainbridge explained that "what you've seen in the case law is a continual pattern of not wasting a lot of Elon's time on process. One of the things that I think is very difficult for both students and for non-lawyers to understand is how process-oriented the law is."

He stressed it is "clear that [Musk] is a guy who's willing to push the edge of the legal envelope and take risks in terms of legalities that most business people wouldn't."

Regarding the Twitter lawsuit, Bainbridge said that "on the merits, Twitter has a much stronger case."

Musk essentially contends that Twitter knows it is not true what it has claimed for a long time in its reports that their best estimate is that about 5% of their accounts are bots, with Musk claiming that actual number might even be 20%.

But Bainbridge explained that Musk would have to prove that the representation was false and that its falsity rises to the level of what lawyers call a material adverse event — which means "between the time I agreed to buy and the time we got to close, something happened that fundamentally changed the business in a way that means I won't get the value that I was expecting."

But Bainbridge said "Musk knew, or at least should have known that there were questions about what percentage of the accounts were bots way before he signed the deal [and] there's no evidence to suggest that something happened in the interval between when he signed the deal and now that made the bot situation any worse or any more pertinent."

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