Elon Musk has lost yet again in court against his right to shitpost unfettered. The 2nd US Circuit Court of Appeals in New York City rejected the billionaire’s bid to end his 2018 settlement with the Securities and Exchange Commission that ordered legal oversight of certain Tesla-related tweets.
Musk’s request to overturn the more than four-year-old consent order has already been rejected by a federal judge in New York District Court. in April 2022. But the multihyphenate CEO filed an appeal, which was rejected on Monday. on new judgmentthree additional judges rejected Musk’s bid to set aside SEC oversight and accountability for his posts.
“We have considered the remaining arguments of the Defendant-Appellant and find them to be without merit. Accordingly, we AFFIRM the judgment of the district court,” wrote the three judge panel in their filing last Monday. In line with this decision, Musk is still required to have a Tesla lawyer review some of the content he wants to post online, or face potential investigation and consequences.
Which means that even owning Twitter doesn’t free Musk from legal restrictions on his tweets. Even if he becomes the CEO of Twitter (at least for the next few weeks until Linda Yaccarino maybe will take his place), Musk remains trusted by the powers that be despite “Chief Twit.”
Why can’t Elon Musk tweet whatever he wants?
It all started back with a stupid 2018 ‘420’ post on Twitter that Tesla CEO Musk has admits that there is nothing to do the grass. “I’m considering going private with Tesla at $420. Funding secured,” he announced in a post on August 7, 2018. Except for Tesla’s board and investors who apparently still don’t know about the idea. A shitstorm ensued at which point Tesla’s stock price spiked, trading halted, and the SEC stepped in. The federal watchdog’s investigation revealed that there is no finalized deal to privatize Tesla in place. The SEC Musk has been accused of fraud.
As part of a settlement, the the billionaire must resign as Tesla Chairman (although he retained his position as CEO) and he and the company were forced to pay another $20 million in fines. Also, Musk signed a consent decree intended to prevent any communications that could significantly change Tesla’s stock price. Under the agreement, tweets related to Musk’s Tesla operations must be reviewed by the company’s attorney before he posts them.
Even Musk after all won his securities fraud case earlier this year, and a jury found him not liable to the investors for their losses, the terms of the original settlement still stand.
Has Musk changed his Twitter habits?
Yet Musk apparently seems to reject that requirement and continues to tweet indiscriminately. Two of his posts since the 2018 settlement triggered further investigation of the SEC (one in 2019 and one in 2021). At least one more post led to another federal agency is investigating Musk. A deal in 2019 the ban was reaffirmed in his social media communications. But he even continues to defend that original 420 post, and he continues to fight against the consent decree restrictions.
In 2022, his lawyer, Alex Spiro, admitted to the SEC tried to “mozzle and harass” the billionaire by digging up specific posts. Spiro further said the SEC’s handling was “calculated to chill” Musk’s First Amendment rights.
What Do the Judges Think?
However, according to Monday’s ruling, the federal appeals judges did not think that the second richest man on Earth was unfairly beaten, harassed, or deprived of liberty.
“We have found no evidence to support Musk’s contention that the SEC used the consent order to conduct bad faith, harassing investigations of his protected speech,” the panel wrote. “Whether or not the consent order may ‘give[d] broader relief than a court would grant after a trial ‘did not interfere with the SEC’s ability to enforce the agreement voluntarily signed by Musk.
Basically, through consent decrees, people are allowed to sign away some of their First Amendment rights. And it turns out Musk did when he agreed to settlement terms with the SEC. “If Musk wants to preserve his right to tweet without limited internal oversight about certain Tesla-related topics, he has the ‘right to arbitrate and defend against [SEC’s] sue’ or negotiate another deal—but he chose not to do that.”
Further appeals from Musk’s legal team regarding the change in terms and conditions also did not stop the court. Other lawyers for Spiro and Musk tried to argue that it was in everyone’s best interest to adjust the degree of consent, and that the changes to the “real conditions” made the agreement more onerous. it was at first.
But the judges pointed out that nothing had changed in the law and that the public would likely benefit from some oversight of CEO’s public communications about their companies. “The public interest [does not] require modification of the consent order. If anything, it cuts in the other direction,” the panel wrote.
Yet Musk remains undaunted. In Reuters, Written by Spiro“We will seek further review and continue to pay attention to the important issue of government suppression of speech.”