Getty Images | AFP/Suzanne Cordeiro
A federal judge in Texas ruled yesterday that Elon Musk's X Corp. can proceed with its lawsuit against Media Matters for America. U.S. District Judge Reed O'Connor of the Northern District of Texas, who recently refused to recuse himself from the case despite buying Tesla stock, denied Media Matters' motion to dismiss the lawsuit.
X Corp. sued Media Matters after the nonprofit watchdog group published an investigation into ads placed alongside pro-Nazi content on X (formerly Twitter). X's lawsuit also names reporter Eric Hananoki and Media Matters President Angelo Carusone as defendants.
Because of the O'Connor ruling, X can proceed with its claims for tortious interference with contract, business disparagement, and tortious interference with future economic advantage. A jury trial is scheduled to begin on April 7, 2025.
“Plaintiff alleges that Defendants knowingly and maliciously created side-by-side images of posts by various advertisers on Plaintiff's social media platform X and displayed them alongside neo-Nazi or other extremist content, and presented these designed images as if they corresponded to what the average user experiences on the X platform,” O'Connor wrote in his ruling on the motion to dismiss the lawsuit. “Plaintiff alleges that Defendants engaged in this practice to publicly portray X as a social media platform dominated by neo-Nazism and anti-Semitism, and thereby scare away major advertisers, publishers, and users from the X platform, with the intent to harm it.”
Another federal judge in the District of Columbia recently criticized X's claims, pointing out that “X did not deny that advertising did indeed appear alongside the extremist posts on the day in question.” But in O'Connor, X has a friendlier judge who has already made several rulings against Media Matters. The defendant could also face a tough time on appeal, as the appeals would go to the conservative-leaning U.S. Court of Appeals for the Fifth Circuit.
Judge: Media Matters ‘targeted’ Texas-based advertisers
Media Matters' motion to dismiss argues, among other things, that Texas is not an appropriate forum for the dispute because “X is organized under the laws of the State of Nevada and has its principal place of business in San Francisco, California, where its own terms of service require users of its platform to litigate any disputes in court.” (Musk recently said that X would move its headquarters from San Francisco to Austin, Texas.)
O'Connor's ruling recognizes that “when a nonresident defendant files a motion to dismiss the action for lack of personal jurisdiction, the burden of proof is on the plaintiff as a party seeking to assert the jurisdiction of the district court.” In this case, O'Connor said, jurisdiction is established if the defendants “have challenged the conduct that forms the basis for this Texas action.”
O'Connor ruled that the court had jurisdiction because Media Matters' articles targeted Texas-based companies that advertised on X, specifically Oracle and AT&T, even though those companies are not parties to the lawsuit. O'Connor said Media Matters' articles “targeted, among others, Oracle, a Texas-based company that placed ads on Plaintiff's platform… Plaintiff also alleges that this 'crusade' targeted its blue-chip advertisers, which included Oracle and AT&T, Texas-based companies.”
O'Connor, a judge appointed by George W. Bush, wrote that a “defendant who targets a Texas company with unlawful conduct can have timely warning that he could be sued there.”
“The targeting of the alleged torts at the headquarters of Texas-based companies is sufficient to establish special jurisdiction in Texas … each defendant participated in the alleged torts aimed at causing harm, among other things, in Texas,” he wrote.
Judge refers to TV appearances
They include Hananoki, the Media Matters reporter who wrote the articles, and Carusone. Each of these defendants “targeted” the conduct in Texas, O'Connor noted.
“Plaintiff alleges that Carusone joined Hananoki and Media Matters in the 'crusade' when he made multiple television appearances discussing the importance of advertisers to plaintiff's business model and advocating that advertisers should end their business relationships with plaintiff in response to a flood of 'unbridled hatred and misinformation from the right,'” O'Connor wrote.
O'Connor ruled that “Media Matters targeted Texas,” writing that the group “pursued a strategy designed to attack Plaintiff's blue-chip advertisers, including Oracle and AT&T, Texas-based companies. In furtherance of that strategy, it published the Hananoki articles and other articles that put pressure on the blue-chip advertisers, all in an effort to get the blue-chip advertisers to cease doing business with Plaintiff. Finally, it can be inferred from Media Matters' affidavit that Media Matters also emailed the Hananoki articles to Texans and that Plaintiff's lawsuit arises from that conduct.”
Media Matters also moved to dismiss the lawsuit on the grounds that X had not made any claims. However, O'Connor said that “the court must accept as true all of the facts well-pleading in the complaint and consider them in the light most favorable to the plaintiff,” and he found that X “has made sufficient allegations to withstand dismissal.”
When contacted by Ars, Media Matters declined to comment today.