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Tesla Sues California County Over Factory Closure

Rebecca A. Lindland | May 11, 2020

Headlines heralding that “Tesla sues California” are lighting up social media, when in fact, Tesla is suing Alameda County, the location of its Fremont production plant. Regardless, the electric car manufacturer, with its outspoken CEO Elon Musk, followed through on a threat to sue the county-level jurisdiction, challenging the “constitutionality of State Statutes,” according to the Civil Cover Sheet.  

Tesla Model 3 and Tesla Factory

In documents filed in U.S. District Court Northern District of California, the 18-page, 3-count complaint dated May 9, 2020 outlines a variety of conflicts defining “essential businesses” between county-level and state-level orders issued over the last few weeks. The complaint asserts Alameda County is committing a “power-grab” in defiance of a state-level Governor’s Order providing express permission “to continue…the operations of federal critical infrastructure businesses,” dated May 4, 2020.

“I’m not messing around,” the 48-year-old billionaire tweeted after Tesla filed its lawsuit against Alameda County. “Absurd & medically irrational behavior in violation of constitutional civil liberties, moreover by *unelected* county officials with no accountability, needs to stop.”

In the complaint, Tesla defines its “Tesla Factory and other facilities in Alameda County” as a manufacturer of “electric cars, electric motors, and energy storage products.” Therefore, it seeks to reopen its Fremont plant based on the claim it is one of sixteen “critical infrastructure sectors” as defined by the federal government and referenced in a California Governor’s Order to shelter-in-place executed on March 19, 2020, by California Governor Gavin Newsom.

The complaint sites an Alameda County shelter-in-place order on March 16, 2020, citing “Essential businesses [we]re strongly encouraged to remain open.” It also mentions two additional County Orders which outline the definition of “essential businesses” but fail to reference or incorporate the list of sixteen sectors outlined in the Governor’s Order and by the federal government.

Production at Tesla’s facilities continued despite a March 17, 2020 announcement by Sheriff Ahern of Alameda County on Twitter that Tesla was “not an essential business” and could, therefore, only “maintain minimum basic operations.”

After what Tesla calls “good faith” negotiations with the county, the company announced a temporary closure on March 23, 2020. Since that time, the manufacturer asserts on-going negotiations towards a settlement with Alameda County, which insists Tesla is not an “Essential Business” under its Third County Order of April 29, 2020. Tesla claims the county does not have the right to override the Governor’s Order defining critical infrastructure.

The first of three counts seek relief under the Fourteenth Amendment, citing the contradiction of the Third County Order with the Governor’s Order. The second count references violation of the equal protection clause of the Fourteenth Amendment, as Tesla continues to operate its facilities in nearby San Joaquin County. Tesla claims Alameda County is “acting irrationally” by refusing to allow production to continue despite similar COVID-19 infection rates between the two counties, citing a May 7, 2020, New York Times article. The third count references “preemption,” claiming county laws cannot contradict general laws of the State of California.

Tesla is requesting the court declare the Third County Order inconsistent with the Governor’s Order allowing critical infrastructure sectors to continue production. There is no indication yet when the court will hear the complaint. Musk has threatened to leave the state of California over the issue, moving operations to Nevada or Texas.

The information in this article is based on the formal complaint filed by Tesla, on tweets by Elon Musk, and on data from The New York Times. It was accurate as of May 11, 2020. It may have changed since that date. 

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