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' request to dismiss the case.
X Corp. sued Media Matters after the nonprofit watchdog 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.
O'Connor's ruling allows X to proceed with his claims of tortious interference with contract, business contempt, and tortious interference with potential economic advantage. A jury trial is scheduled to begin on April 7, 2025.
“Plaintiff alleges that Defendants knowingly and willfully fabricated juxtaposed images of various advertiser posts on Plaintiff’s social media platform X, displayed alongside neo-Nazi or other extremist content, and depicted these fabricated images as if they were what the average user experiences on the X platform,” O’Connor wrote in his ruling on the motion to dismiss. “Plaintiff alleges that Defendants pursued this conduct in an effort to publicly portray X as a social media platform dominated by neo-Nazi and anti-Semitism, thereby alienating major advertisers, publishers, and users of the X platform, with the intent to harm it.”
Another federal judge in the District of Columbia recently criticized X's claims, noting that “X did not deny that advertising did in fact appear alongside the extremist messages on the day in question.” But X has a friendlier judge in O'Connor, who has ruled against Media Matters on several occasions. The defendant also could face a difficult appeal, as objections would be filed with the conservative U.S. Court of Appeals for the 5th Circuit.
Judge: Media Matters targeted Texas advertisers
Media Matters' motion to dismiss argues, among other things, that Texas is not an appropriate forum for the dispute because “X is incorporated under the laws 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 self-administer any disputes.” (Musk recently said that X will move its headquarters from San Francisco to Austin, Texas.)
O'Connor's ruling recognizes that “when a nonresident defendant files a motion to dismiss for lack of personal jurisdiction, the burden of proof is on the plaintiff as the party seeking to invoke the jurisdiction of the district court.” In this case, O'Connor said, jurisdiction was established if the defendants “engaged in the conduct that forms the basis of this Texas lawsuit.”
O'Connor ruled that the court has 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 the Media Matters articles “targeted, among other things, Oracle, a Texas-based company that placed ads on Plaintiff's platform… Plaintiff also alleges that this 'crusade' targeted its blue-chip advertisers, including Oracle and AT&T, Texas-based companies.”
O'Connor, appointed by George W. Bush, wrote that a “defendant who attacks a Texas company for unlawful activities can be fairly put on notice that it can be sued there.”
“This targeted approach to the alleged torts at the headquarters of Texas-based companies is sufficient to establish specific jurisdiction in Texas… each defendant engaged in the alleged torts aimed at causing harm in, among other places, Texas,” he wrote.
Judge calls TV appearances
So did Hananoki, the Media Matters reporter who wrote the articles, and Carusone. Each of those individual defendants “targeted” the behavior in Texas, O’Connor found.
“Plaintiff alleges that Carusone participated in the ‘crusade’ with Hananoki and Media Matters when he appeared on a number of television programs discussing the importance of advertisers to Plaintiff’s business model and advocating that advertisers should stop doing business with Plaintiff if there was to be a flood of ‘unmoderated right-wing hate and misinformation,’” O’Connor wrote.
O'Connor ruled that “Media Matters targeted Texas,” writing that the group “pursued a strategy of targeting Plaintiff's blue-chip advertisers, including Oracle and AT&T, Texas-based companies; in furtherance of this strategy, it published the Hananoki articles and published other articles pressuring blue-chip advertisers, all with the purpose of pressuring blue-chip advertisers to stop doing business with Plaintiff. Finally, the inference from Media Matters' sworn statement is that Media Matters also emailed the Hananoki articles to Texans, and that Plaintiff's lawsuit arises from this conduct.”
Media Matters also sought dismissal on the grounds that X had failed to state a claim. But O'Connor said that “the court must accept as true all of the well-reasoned facts in the complaint and view them in the light most favorable to plaintiff,” and found that X “has made sufficient allegations to survive dismissal.”
Media Matters declined to comment today when contacted by Ars.
