In a one-week period this fall, Elon Musk was hit with three separate lawsuits. The Securities and Exchange Commission sued to compel him to testify about his acquisition of Twitter shares before he purchased the company. The lawsuit came a day after a Jewish man filed a defamation lawsuit alleging Musk had labeled him a neo-Nazi. And the day before that, the singer Grimes had sued the billionaire for the right to see their three children.
Getting hit by three unrelated lawsuits in one week is highly unusual for a CEO—unless that CEO is Musk. In his case, the trio of lawsuits are just a few of the dozens of legal claims that have piled up against Musk and his companies in recent years, and are a reflection of both the man and how he does business. (Musk did not respond to a request for comment sent via Tesla.)
While most people, including CEOs, regard litigation as stressful and expensive and do their best to avoid it, Musk treats lawsuits as an extension of his outsize personality. Ashlee Vance, a journalist who has written a popular biography of the Tesla CEO, says this has always been the case. “Elon has long had a pronounced litigious streak. He tends to feel very strongly about his version of the truth and goes to any and all lengths to stand his version of the truth up in court,” Vance noted.
Legal experts say that for now, Musk has come out a winner in his legal gambits, but in a handful of cases he faces an “existential” threat that could make a courtroom the potential site of his undoing.
Musk’s legal exposure
Musk’s 2022 takeover of Twitter, which he has rebranded as X, led to trouble with the SEC but also lawsuits from workers who claim he failed to pay their severance. Meanwhile, other employees filed a spate of suits alleging illegal dismissals on the basis of age, gender, and disability. Workers at Musk’s other companies, Tesla and SpaceX, had previously filed similar lawsuits.
While employment-related lawsuits are not uncommon at big companies, the nature of the claims at Twitter and the other firms suggests they arose not from Musk stumbling over a legal trip wire—but from his explicit contempt for regulations related to labor and discrimination laws that he has displayed on social media.
Musk has expressed a similar contempt for regulators themselves. When the SEC sued him in 2016 for allegedly misleading investors with a Tesla-related tweet, he settled the case two years later under pressure from his lawyers, but then promptly took to Twitter to mock the agency as the “Shortseller Enrichment Commission.” Since then, Musk has returned to court multiple times in a bid to undo the settlement’s requirement for him to run any Tesla-related tweets by a lawyer—known colloquially as his “Twitter sitter”—before he publishes them.
All of this is just the tip of the iceberg when it comes to Musk’s legal predicaments. He is also facing consumer class actions over insider trading and his pay package, a criminal investigation over Tesla fatalities, and an investigation by the National Labor Relations Board—plus numerous other lawsuits and regulatory probes. Meanwhile, Musk has filed lawsuits himself, including one against a nonprofit group that opposes hate speech, alleging the organization hurt the site formerly known as Twitter by driving away advertisers. He also threatened to sue a high-profile Jewish group, the Anti-Defamation League, for billions of dollars on similar grounds. Legal observers have described Musk’s claims against the groups as far-fetched.
The torrent of litigation, much of it unnecessary, is frightfully expensive—senior lawyers in some of these cases reportedly bill as much as $2,000 an hour—and often highlights the worst aspects of his character. So why does Musk engage in this behavior?
Musk’s motivations
As the richest man in the world, Musk is far wealthier than most CEOs and, in many aspects of life, can operate entirely within his own set of rules. That includes his legal strategy.
“He’s very wealthy, and so he can do this,” said Ann Lipton, a corporate and securities law professor at Tulane University. “It works because individual actors in the legal system don’t have the resources, time, and motives as Musk.”
Unlike other CEOs, Musk also enjoys a large cult following among his customers and the general public—most of whom are indifferent to his crass or insensitive behavior, or even relish the sight of their billionaire hero thumbing his nose at critics and the law.
“His audience for this isn’t bothered by him being in litigation. There’s no reputational cost for him, unlike there might be for a company like Walgreens,” said Verity Winship, a business law professor at the Illinois College of Law.
Senior lawyers in some of these cases reportedly bill up to $2,000 an hour.
Winship noted that Musk’s eagerness to pick legal fights is unusual for a CEO, but that there are other examples—typically involving those who operated their companies since the very early days. She cites the since-ousted chief executives of Uber and WeWork.
But even as much of Musk’s behavior may be driven by impulse, observers say it also has a strategic purpose. Lipton, the Tulane professor, says his reputation for being litigious serves as a deterrent to critics who might challenge him. She says that over his career, Musk has regularly “stiffed contractors” who, along with other adversaries, have often simply walked away rather than tangle with a billionaire—an assessment shared by his biographer. “He certainly does seem to use lawsuits as a tool to keep his detractors at bay. It’s effective. For as long as I’ve been reporting on Musk, people have been cautious to speak out of fear of litigation,” said Vance.
There is one further reason likely driving Musk’s penchant for litigation: So far, he has been winning.
Musk is victorious—for now
In two of Musk’s most high-profile legal battles—one against angry Tesla shareholders, and another a defamation case against a cave diver—he has gone to court and come out on top. Lipton, however, maintains that two ongoing cases do pose an existential threat to the billionaire and his companies. One of these is a claim in Delaware where investors say his $56 billion pay package at Tesla is unreasonable, in part because Musk has at times required employees at the carmaker to work on projects at his other companies. If the claim succeeds, Musk could be compelled to hand back some of his fortune and potentially to reconsider his cavalier view of legal threats.
Lipton says the other potentially existential case confronting Musk comes in the form of the Justice Department’s investigation into Tesla’s autopilot and “full self-driving” features that have allegedly caused numerous fatalities. The company disclosed in late October that the agency has expanded the scope of its probe with additional subpoenas, and that the investigation could result in material losses. This means criminal charges against both Tesla and its CEO are a real possibility—a development that could hobble the carmaker and result in a massive loss to Musk’s personal fortune.
