Tesla Sues California County, Elon Musk Threatens to Move Company

Tesla CEO Elon Musk speaks at a 2018 news conference in Chicago. (AP Photo/Kiichiro Sato, File)

(CN) — Tesla founder Elon Musk reopened his Fremont, California, factory Monday in defiance of a public health official’s order that cut operations to a bare minimum.

“Tesla is restarting production today against Alameda County rules. I will be on the line with everyone else. If anyone is arrested, I ask that it only be me,” he tweeted Monday afternoon.

This follows a federal lawsuit Tesla filed Saturday claiming the county is abridging the company’s constitutional rights by restricting its ability to operate in contravention of Governor Gavin Newsom’s statewide order allowing essential businesses to stay open.

In a statement Monday, Alameda County public information manager Neetu Balram said, “We notified Tesla that they can only maintain minimum basic operations until we had an improved plan that can be implemented in accordance with the local public health order. We are addressing this matter using the same phased approach we use for other businesses which have violated the order in the past, and we hope that Tesla will likewise comply without further enforcement measures,” Balram said.

“We continue to move closer to an agreed-upon safety plan for reopening beyond minimum basic operations by working through steps that Tesla has agreed to adopt. These steps include improving employee health screening procedures and engaging front-line staff on their concerns and feedback regarding safety protocols.”

Tesla also agreed to submit a plan specific to the Fremont factory by late Monday, according to Balram, who added, “We look forward to reviewing Tesla’s plan and coming to an agreement on protocol and a timeline to reopen safely.”

Balram added the county had no further comment and would not accept interview requests.

Tesla shuttered its East Bay plant on March 23 pursuant to several public health orders issued by the county’s interim health officer, Dr. Erica Pan.

But Musk believes his company is exempt from closure because it manufactures electric vehicles and batteries, pointing to both Newsom’s order and the county’s own guidelines that make exceptions for critical infrastructure businesses.

Musk expressed his displeasure with the county in a tweet on Saturday, saying, “Tesla is filing a lawsuit against Alameda County immediately. The unelected & ignorant “Interim Health Officer” of Alameda is acting contrary to the Governor, the President, our Constitutional freedoms & just plain common sense!”

He threatened in a subsequent tweet to move operations out of California, and said whether Tesla retains any manufacturing in Fremont will depend on how the company is treated in the future.

The lawsuit claims the county violated Tesla’s Fourteenth Amendment due process and equal protection rights, and that its authority to impose restrictions on businesses is preempted by Newsom’s.

“Although the Governor’s order expressly permits the operation of the Tesla Factory, plaintiff has attempted in good faith to negotiate a settlement with Alameda County to allow its plant to reopen and begin producing critical federal infrastructure,” Tesla’s lawsuit says.

“Nevertheless, defendants continue to take the position that the Tesla Factory is not an ‘essential business’ under the third county order and therefore may not reopen, regardless of the express permission to do so in the Governor’s order.”

It adds that the county threatens violators with criminal penalties that it lacks the power to impose, saying, “Thus, Alameda County has not only created a legal quagmire by wrongly declaring that its own orders trump the state level orders, it has threatened jail time and significant fines for businesses and individuals that do not comply, even where they are clearly authorized by the state order to continue critical infrastructure activities.”

California Assemblywoman Lorena Gonzalez, who has made the treatment of workers a top legislative priority, responded bluntly to the lawsuit in a tweet Saturday night, saying “F*ck Elon Musk.”

In a follow-up tweet on Sunday, Gonzalez demurred while explaining her position.

“California has highly subsidized a company that has always disregarded worker safety & well-being, has engaged in union busting & bullies public servants,” she wrote. “I probably could’ve expressed my frustration in a less aggressive way. Of course, no one would’ve cared if I tweeted that.”

Tesla is represented by Alex Spiro with Quinn, Emmanuel, Urquhart & Sullivan LLP in New York.

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