Elon Musk’s preferred judge recuses himself from X’s case against advertisers

Judge not —

Judge who had stock in Tesla and Unilever drops X case over alleged ad boycott.

US District Judge Reed O'Connor today recused himself from Elon Musk's lawsuit alleging that advertisers targeted X with an illegal boycott.

O'Connor was apparently Musk's preferred judge in the lawsuit filed last week against the World Federation of Advertisers (WFA) and several large corporations. In order to land O'Connor, the Musk-owned X Corp. sued in the Wichita Falls division of the US District Court for the Northern District of Texas.

O'Connor purchased Tesla stock, a fact that generated controversy in a different X lawsuit 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 what drove O'Connor's recusal decision.

"I hereby recuse myself from the above numbered case," O'Connor wrote in a filing today. The case was reassigned to 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 stock in Unilever valued at $15,000 or less. The investment generated a dividend of $1,000 or less during 2022, the filing indicates. 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 valued between $15,001 and $50,000. "It is unclear whether O'Connor has sold his investment of up to $50,000 in Tesla stock, because the judge's disclosure form covering the 2023 calendar year is not publicly available," NPR wrote on Friday. "He has requested a filing extension, according to an official with the administrative office of US courts who was not authorized to speak on the record."

Kinkeade filed a 2023 financial disclosure report, which is much shorter than O'Connor's and lists several rental properties and bank interest.

Media Matters questioned judge’s impartiality

O'Connor's Tesla stock has been a point of contention in X's case against Media Matters for America, which O'Connor has not recused himself from. O'Connor remaining on the Media Matters case while recusing himself from the advertising case suggests that his Unilever investment is the main factor in the recusal.

Media Matters drew Musk's ire when it published research on ads being placed next to pro-Nazi content on X. Musk's lawsuit blames Media Matters for the platform's advertising losses.

Media Matters argued in a July court filing that Tesla, the Musk-led electric carmaker, should be listed by X as an "interested party" in the case. "Here, if the Court indeed owns stock in Tesla, recusal would be required under two separate provisions of the judicial recusal statue," Media Matters wrote. "By failing to disclose Tesla, however, X has deprived the Court of information it needed to make an informed recusal decision."

Media Matters said there is a public association between Musk and the Tesla brand, and that this association leads to doubts "about whether a judge with a financial interest in Musk could impartially adjudicate" the case filed by X.

"Because an investment in Tesla is, in large part, a bet on Musk's reputation and management choices—key issues in this case—ownership of Tesla stock would be disqualifying," Media Matters wrote.

X, previously named Twitter, has argued that O'Connor shouldn't have to recuse himself from the Media Matters case. Tesla does not exert any control over X, and Media Matters' argument that Tesla has an interest in the case is "tenuous and speculative," X wrote in a court filing.

O'Connor gave X a victory in April when he denied a Media Matters motion to delay discovery until its motion to dismiss is resolved. Media Matters has complained about the financial toll of the lawsuit, telling the court that "X's discovery requests are extremely broad and unduly burdensome." Media Matters also issued a statement to the press saying it needed to lay off staff because of a "legal assault on multiple fronts."

O'Connor was assigned to the Media Matters case in November 2023 after the original judge recused himself.