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Breaking Down The Law: Tesla's reopening of California factory

Elon Musk, the outspoken CEO of Tesla Motors, has recently voiced frustration with the State of California and Alameda County over their stay-at-home orders.

Mr. Musk threatened to move Tesla’s headquarters to either Texas, or right here in Nevada.

Last week, Tesla and Mr. Musk filed a lawsuit against Alameda County in order to reopen their factory in the Bay area, which is the only Tesla vehicle assembly plant in the U.S.

Then over the weekend, Tesla opened their assembly plant, in defiance of the State and County orders, and Mr. Musk indicated he was ready to be arrested if necessary.

What is the basis of the lawsuit, and what may come from the plant’s reopening? Here to discuss the matter is attorney Matt Hoffmann with Battle Born Injury Lawyers.

Thanks, etc.

  1. Let’s start with the lawsuit. What is Tesla alleging against the County?
  • So, I’ve read the lawsuit. And what they are alleging, and what Mr. Musk is so upset about, is the fact that Governor Newsom’s March 20, 2020 stay-at-home order allowed “critical infrastructure” sectors of businesses to remain open, with proper safety protocols.
  • Tesla fell into the definition of critical infrastructure businesses – remember, they don’t just make cars, they also make solar products, solar storage devices, and electric charging systems.
  • But Alameda County’s Sheriff said Tesla was not an essential business and must close. Tesla ignored this and remained open.
  • Tesla then closed on March 23, 2020 and attempted to negotiate a way to stay open.
  • But then the Governor’s reopening order came out on May 4, 2020, which seemed to allow businesses like Tesla to reopen, although they arguably were never required to close under state law.
  • Nevertheless, following the Governor’s order, Alameda County took it upon themselves to make a MORE restrictive set of rules, with CRIMINAL penalties, which made it so the Tesla plant could not reopen.
  • So Tesla sued for a judicial ruling that the County’s order is in violation of the State’s order.
  • Tesla is alleging the County order violates the Due Process Clause, Equal Protection Clause, and the California Constitution, because it fails to give reasonable notice of what is forbidden under the law and creates a situation where Tesla can be compliant with State law but be violating county law. And the California Constitution forbids counties from making ordinances or regulations that conflict with general State laws.
  • Tesla has very good arguments – they were told by the County that they WERE an essential business that could remain open, only to then be told they are not, and if they stay open they’d be subject to criminal penalties.
  • The County is arguing that the Governor’s order gives Counties to make more restrictive rules – but Tesla has pointed out that doing so violates the State Constitution.
  • So Tesla called the County’s bluff, opened up the plant, and Elon Musk has basically said “Arrest me.”
  1. And right now, the factory is open?
  • Yesterday (Tuesday) they were ordered by County officials to close.
  • As of right now, they are still open.
  1. And Mr. Musk has threatened to move Tesla’s headquarters to Nevada or Texas. What are the odds that will happen?
  • Well, it’s pretty hard to just up and move a manufacturing plant. I’ve seen estimates of 12-18 months to do so.
  • Obviously Nevada should be courting Tesla to move here, because we need the jobs.
  • But unlike when Tesla was wooed into building their plant near Reno, our state is broke. So I’m not sure what tax incentives could be offered to get them here, although I seem to remember a bunch of land in the Apex Industrial Park being given to Faraday Future for electric cars, so maybe we could find some land to get them here.
  • They’re certainly motivated to move, given what has happened in Alameda County.