A federal judge in Texas has rejected Media Matters' request to force Elon Musk's X to list Tesla as a financially interested party to a case the social media company filed against the liberal media watchdog group, which could have forced the judge to recuse himself due to his ownership of Tesla stock.
Friday's decision by U.S. District Judge Reed O'Connor in Fort Worth, Texas, came three days after he stepped aside from hearing a separate lawsuit by X against a group of advertisers following a news report about his ownership of stock in the Musk-led electric car manufacturer.
But O'Connor, a appointee of Republican President George W. Bush well-known for handing conservative litigants victories in cases over Democratic-backed causes, said Media Matters' request amounted to improper "gamesmanship."
He said Media Matters' motion was belated and "motivated by an effort to force recusal, as opposed to disclosure of unknown information." As a result, he ordered Media Matters to pay X's attorney's fees in relation to litigating its motion.
Lawyers for X and Media Matters did not respond to requests for comment.
X, which was known as Twitter before Musk bought the company in 2022, sued Media Matters in November, alleging the group defamed the platform after it published a report that said ads for major brands had appeared next to posts touting Adolf Hitler and the Nazi party.
That report led several other major advertisers to pull ads from the social media platform now owned by Musk, who has increasingly embraced conservative causes and recently endorsed Donald Trump in the 2024 presidential election race.
Media Matters has defended its reporting and called the lawsuit frivolous.
Under applicable disclosure rules, corporate parties in lawsuits in the Northern District of Texas are required to file a list of all people and legal entities that have a financial interest in the outcome of a case.
Such disclosures are designed to help judges determine whether they must recuse as a result of their own financial conflicts of interest.
In a filing in June, Media Matters' lawyers argued X should be forced to amend a filing to add Tesla, which Musk founded and leads as CEO, as an interested party. O'Connor owns Tesla stock, according to his financial disclosure reports.
But O'Connor said there is no indication that Tesla has any control over X or any financial ties to X and that reports of "blurred lines" between the two companies since Musk's purchase of Twitter did not legally amount to a financial interest.
"The mere assertions that Musk owns a constellation of companies, some former Tesla employees now work at X, and that Tesla leased workspace from X do not support a finding that Tesla and X are not separate legal entities or that they share a financial interest," O'Connor wrote.
The judge's decision came despite his decision on Aug. 13 to recuse himself from an antitrust lawsuit X filed earlier this month accusing the World Federation of Advertisers, Mars, CVS Health and other companies of unlawfully conspiring to boycott the site.
O'Connor gave no reason for why he was recusing himself. But his recusal came a few days after NPR reported that O'Connor owned Tesla shares, raising questions about whether he should oversee the litigation.
The case is X v. Media Matters, U.S. District Court for the Northern District of Texas, No. 4:23-cv-01175.
For X: Judd Stone of Stone Hilton and John Sullivan of SL Law
For Media Matters: Theodore Boutrous, Amer Ahmed and Andrew LeGrand of Gibson Dunn & Crutcher and Abha Khanna and Aria Branch of Elias Law Group
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