Getty Images | Win McNamee
U.S. District Judge Reed O'Connor today withdrew from Elon Musk's lawsuit alleging that advertisers were illegally boycotting X.
O'Connor was apparently Musk's judge of choice in the lawsuit filed last week against the World Federation of Advertisers (WFA) and several major corporations. To lure O'Connor on board, Musk-controlled X Corp. filed a lawsuit in the Wichita Falls division of the U.S. District Court for the Northern District of Texas.
O'Connor bought Tesla stock, a fact that caused controversy in another lawsuit by X that he is still overseeing. He also invested in Unilever, one of the defendants in X's advertising lawsuit. The Unilever investment appears to be the reason for O'Connor's decision to recusal.
“I hereby withdraw from the above-numbered case,” O'Connor wrote in a filing today. The case was reassigned to U.S. District Judge Ed Kinkeade. Both judges were appointed by President George W. Bush. O'Connor is based in Fort Worth, while Kinkeade is based in Dallas.
A financial disclosure report for calendar year 2022 shows that O’Connor owned shares in Unilever worth $15,000 or less. The investment generated a dividend of $1,000 or less in 2022, the filing shows. Unilever is one of the defendants named in X’s advertising lawsuit, along with Mars, Incorporated; CVS Health Corporation; and Ørsted A/S.
The 2022 disclosure also listed a purchase of Tesla stock worth between $15,001 and $50,000. “It's unclear whether O'Connor sold his investment of up to $50,000 in Tesla stock because the judge's disclosure form for the 2023 calendar year is not public,” NPR wrote on Friday. “He has requested a stay of filing, according to an official with the Administrative Office of U.S. Courts who was not authorized to speak on the record.”
Kinkeade has filed a 2023 financial disclosure report that is much shorter than O'Connor's and lists several rental properties and banking interests.
Media Matters questions judge's impartiality
O'Connor's Tesla stock has been a point of contention in X's case against Media Matters for America, from which O'Connor has not recused himself. That O'Connor remains in the Media Matters case while withdrawing from the advertising case suggests his Unilever investment is the key factor in the withdrawal.
Media Matters drew Musk's ire when it published research into ads placed next to pro-Nazi content on X. Musk is suing Media Matters, blaming the platform for the ad losses.
Media Matters argued in a July court filing that Tesla, the Musk-led electric carmaker, should have been listed by X as an “interested party” in the case. “In this case, if the court does indeed own stock in Tesla, recusal would be required under two separate provisions of the recusal statute,” Media Matters wrote. “However, by failing to disclose Tesla, X deprived the court of the information it needed to make an informed recusal decision.”
According to Media Matters, there is a public association between Musk and the Tesla brand, and this association raises doubts “about whether a judge with a financial interest in Musk can rule impartially” on the case brought by X.
“Because an investment in Tesla is largely a bet on Musk's reputation and management choices — important issues in this case — owning Tesla stock would be disqualifying,” Media Matters wrote.
X, formerly known as Twitter, has argued that O'Connor should not recuse himself from the Media Matters case. Tesla does not exercise any control over X, and Media Matters' argument that Tesla has a vested interest in the case is “weak and speculative,” X wrote in a court filing.
O'Connor handed X a victory in April when he denied a motion by Media Matters to stay discovery until the motion to dismiss is resolved. Media Matters has complained about the financial toll of the litigation, telling the court that “X's requests for discovery are extremely broad and unnecessarily burdensome.” Media Matters also released a statement to the press saying it was laying off staff due to a “multi-pronged legal attack.”
O'Connor was assigned to the Media Matters case in November 2023 after the original judge resigned.
