Case: 22-16110, 12/27/2022, ID: 12618784, DktEntry: 23, Page 1 of 46
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`No. 22-16110
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`IN THE
`
`
`
`
`FOR THE NINTH CIRCUIT
`
`
`AARON GREENSPAN,
`
`Plaintiff-Appellant,
`
`v.
`
`OMAR QAZI, SMICK ENTERPRISES, INC., ELON MUSK, TESLA, INC.,
`
`Defendants-Appellees.
`
`
`On Appeal From The United States District Court
`For The Northern District Of California
`Civil Case No. 3:20-cv-03426-JD; Hon. James Donato
`
`
`ANSWERING BRIEF OF DEFENDANTS-APPELLEES
`ELON MUSK AND TESLA, INC.
`
`
`
`
`
`Anthony P. Alden
`QUINN EMANUEL URQUHART
` & SULLIVAN, LLP
`865 South Figueroa Street, 10th Floor
`Los Angeles, California 90017
`(213) 443-3000
`
`Alex Spiro (application forthcoming)
`William B. Adams
`QUINN EMANUEL URQUHART
` & SULLIVAN, LLP
`51 Madison Avenue, 22nd Floor
`New York, New York 10010
`(212) 849-7000
`
`Attorneys for Defendants-Appellees Elon Musk and Tesla, Inc.
`
`
`December 27, 2022
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`

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`CORPORATE DISCLOSURE STATEMENT
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`Pursuant to Fed. R. App. P. 26.1, Tesla, Inc. states that it has no parent
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`corporation, and no publicly held corporation owns 10 percent or more of its stock.
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`
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`i
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`TABLE OF CONTENTS
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`Page
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`RULE 26.1 CORPORATE DISCLOSURE STATEMENT ....................................... i
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`TABLE OF CONTENTS .......................................................................................... ii
`
`TABLE OF AUTHORITIES .................................................................................... iv
`
`PRELIMINARY STATEMENT ............................................................................... 1
`
`COUNTERSTATEMENT OF ISSUES PRESENTED ............................................. 4
`
`COUNTERSTATEMENT OF THE CASE ............................................................... 4
`
`A.
`
`B.
`
`Plaintiff’s Complaints And Their Dismissal ......................................... 4
`
`The Orders At Issue In This Appeal ..................................................... 6
`
`1.
`
`2.
`
`3.
`
`The Orders Maintaining The Stay Of Discovery ........................ 6
`
`The Orders Denying Recusal ...................................................... 7
`
`The Order Denying Relief From Judgment Under Rule
`60(b) ............................................................................................ 8
`
`SUMMARY OF ARGUMENT ............................................................................... 10
`
`STANDARD OF REVIEW ..................................................................................... 12
`
`ARGUMENT ........................................................................................................... 13
`
`I.
`
`THE DISTRICT COURT PROPERLY STAYED DISCOVERY
`PENDING RESOLUTION OF THE MOTIONS TO DISMISS .................. 13
`
`A.
`
`B.
`
`C.
`
`The District Court Correctly Followed The PSLRA In Staying
`Discovery ............................................................................................. 14
`
`Even Absent The PSLRA, The District Court Acted Within Its
`Discretion In Staying Discovery ......................................................... 18
`
`Plaintiff’s Challenge To The PSLRA’s Pleading Standard Is
`Waived, Irrelevant, And Meritless ...................................................... 20
`
`ii
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`

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`II.
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`THE DISTRICT COURT CORRECTLY DISMISSED THE
`DEFAMATION CLAIM ............................................................................... 22
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`III. THE DISTRICT COURT WAS WELL WITHIN ITS DISCRETION
`TO DECLINE TO RECUSE ......................................................................... 25
`
`IV. THE DISTRICT COURT WAS WELL WITHIN ITS DISCRETION
`TO DENY RELIEF UNDER RULE 60(B) ................................................... 29
`
`A.
`
`The Supposed New Evidence Of Falsity Was Duplicative ................. 29
`
`B.
`
`The Supposed New Evidence Regarding Qazi’s Agency Status
`Supported Dismissal ............................................................................ 32
`
`C.
`
`The New Scienter Authority Was Irrelevant ....................................... 33
`
`CONCLUSION ........................................................................................................ 34
`
`STATEMENT OF RELATED CASES ................................................................... 35
`
`CERTIFICATE OF COMPLIANCE ....................................................................... 36
`
`CERTIFICATE OF SERVICE ................................................................................ 37
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`iii
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`
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`TABLE OF AUTHORITIES
`
`Page(s)
`
`CASES
`
`Aetna Life Ins. Co. of Hartford, Conn. v. Haworth,
` 300 U.S. 227 (1937) ..................................................................................... 20
`
`Alaska Cargo Transp., Inc. v. Alaska R.R. Corp.,
` 5 F.3d 378 (9th Cir. 1993) ..................................................................... 12, 19
`
`Barnes v. BTN, Inc.,
` 555 Fed. App’x 281 (5th Cir. 2014) ............................................................. 27
`
`Bell Atl. Corp. v. Twombly,
` 550 U.S. 544 (2007) ..................................................................................... 19
`
`Ben Sager Chem. Int’l v. E. Targosz & Co.,
` 560 F.2d 805 (7th Cir. 1977) ........................................................................ 29
`
`Brown v. United States,
` 823 F. App’x 97 (3d Cir. 2020) .................................................................... 27
`
`Cent. Laborers’ Pension Fund v. Integrated Elec. Servs. Inc.,
` 497 F.3d 546 (5th Cir. 2007) ........................................................................ 22
`
`Cheney v. U.S. Dist. Ct. for D.C.,
` 541 U.S. 913 (2004) ..................................................................................... 26
`
`Coastal Transfer Co. v. Toyota Motor Sales, U.S.A., Inc.,
` 833 F.2d 208 (9th Cir. 1987) ........................................................................ 29
`
`Correia v. Santos,
` 191 Cal. App. 2d 844 (1961) ........................................................................ 24
`
`Crawford-El v. Britton,
` 523 U.S. 574 (1998) ..................................................................................... 16
`
`Datagate, Inc. v. Hewlett–Packard Co.,
` 941 F.2d 864 (9th Cir. 1991) ........................................................................ 28
`
`Delay v. Gordon,
` 475 F.3d 1039 (9th Cir. 2007) ...................................................................... 13
`
`Eade v. InvestorsHub.com, Inc.,
` 2011 WL 13323344 (C.D. Cal. July 12, 2011) ............................................ 25
`
`Engleson v. Burlington N.R. Co.,
` 972 F.2d 1038 (9th Cir. 1994) ...................................................................... 29
`
`
`
`iv
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`

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`
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`Feature Realty, Inc. v. City of Spokane,
` 331 F.3d 1082 (9th Cir. 2003) ...................................................................... 29
`
`Foley v. Biter,
` 793 F.3d 998 (9th Cir. 2015) ........................................................... 12, 13, 19
`
`Foos v. Wells Fargo Bank,
` 2010 WL 5287534 (E.D. Cal. Dec. 17, 2010), report and
`recommendation adopted, 2011 WL 13247518 (E.D. Cal. Aug. 8,
`2011) .............................................................................................................. 18
`
`Goehring v. Brophy,
` 94 F.3d 1294 (9th Cir. 1996) ........................................................................ 16
`
`Greenspan v. Random House, Inc.,
` 859 F. Supp. 2d 206 (D. Mass. 2012) ............................................................. 1
`
`Griffith Co. v. N.L.R.B.,
` 545 F.2d 1194 (9th Cir. 1976) ...................................................................... 14
`
`Hoesl v. United States,
` 451 F. Supp. 1170 (N.D. Cal. 1978) ............................................................. 24
`
`Hutchinson v. City of San Leandro,
` No. 4:12-cv-3898 PJH, ECF No. 23 (N.D. Cal. Jan. 24, 2013) ................... 28
`
`In re Advanta Corp. Secs. Litig.,
` 180 F.3d 525 (3d Cir. 1999) ......................................................................... 22
`
`In re Gibson,
` 950 F.3d 919 (7th Cir. 2019) ........................................................................ 28
`
`J.L. v. Children’s Inst., Inc.,
` 177 Cal. App. 4th 388 (2009) ....................................................................... 32
`
`Jacobsen v. Filler,
` 790 F.2d 1362 (9th Cir. 1986) ...................................................................... 18
`
`Kolley v. Adult Protective Servs.,
` 725 F.3d 581 (6th Cir. 2013) ........................................................................ 19
`
`Krinsky v. Doe 6,
` 159 Cal. App. 4th 1154 (2008) ..................................................................... 25
`
`Laborers Int’l Union of N. Am. v. Bailey,
` 310 F. App’x 128 (9th Cir. 2009) ................................................................. 15
`
`Lieberman v. Fieger,
` 338 F.3d 1076 (9th Cir. 2003) ............................................................... 23, 24
`
`Liteky v. United States,
` 510 U.S. 540 (1994) ....................................................................................... 7
`
`
`
`v
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`

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`
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`Marshall v. Marshall,
` 721 F.3d 1032 (9th Cir. 2013) ...................................................................... 12
`
`Meide v. Pulse Evolution Corp.,
` 2021 WL 4459653 (M.D. Fla. Sept. 29, 2021) ............................................ 18
`
`Moi v. Chihuly Studio, Inc.,
` 846 F. App’x 497 (9th Cir. 2021) ................................................................. 16
`
`Muñoz v. United States,
` 28 F.4th 973 (9th Cir. 2022) ......................................................................... 18
`
`Nat’l Abortion Fed’n v. Ctr. for Med. Progress,
` 257 F. Supp. 3d 1084 (N.D. Cal. 2017) ........................................................ 26
`
`O’Neal v. Price,
` 531 F.3d 1146 (9th Cir. 2008) .............................................................. passim
`
`Outdoor Media Grp., Inc. v. City of Beaumont,
` 506 F.3d 895 (9th Cir. 2007) ........................................................................ 13
`
`Patterson v. Mobil Oil Corp.,
` 335 F.3d 476 (5th Cir. 2003) ........................................................................ 27
`
`Petrie v. Elec. Game Card, Inc.,
` 761 F.3d 959 (9th Cir. 2014) ........................................................................ 15
`
`Planned Parenthood v. Center for Medical Progress,
` 890 F.3d 828 (9th Cir. 2018) ........................................................................ 17
`
`Rubke v. Capitol Bancorp Ltd.,
` 551 F.3d 1156 (9th Cir. 2009) ...................................................................... 22
`
`Rutman Wine Co. v. E. J. Gallo Winery,
` 829 F.2d 729 (9th Cir. 1987) ........................................................................ 19
`
`Sanai v. Kozinski,
` 2021 WL 2273982 (N.D. Cal. May 24, 2021) ............................................. 26
`
`SG Cowen Sec. Corp. v. U.S. Dist. Ct. for N. Dist. of Calif.,
` 189 F.3d 909 (9th Cir. 1999) ........................................................................ 15
`
`Singer v. Wadman,
` 745 F.2d 606 (10th Cir. 1984) ........................................................................ 8
`
`Summit Bank v. Rogers,
` 206 Cal. App. 4th 669 (2012) ....................................................................... 25
`
`Taylor v. Vermont Dept. of Educ.,
` 313 F.3d 768 (2d Cir. 2002) ......................................................................... 28
`
`Think Computer Corp. v. Dwolla, Inc.,
` Case No. 5:13-cv-02054-EJD (N.D. Cal. Mar. 24, 2014) .............................. 1
`
`
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`vi
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`True Health Chiropractic, Inc. v. McKesson Corp.,
` 896 F.3d 923 (9th Cir. 2018) ........................................................................ 20
`
`Twinde v. Threshold Pharms. Inc.,
` 2008 WL 2740457 (N.D. Cal. July 11, 2008) .............................................. 31
`
`United States v. Holland,
` 519 F.3d 909 (9th Cir. 2008) ................................................................. 26, 27
`
`United States v. Sibla,
` 624 F.2d 864 (9th Cir. 1980) ........................................................................ 26
`
`Wilson v. Dalene,
` 699 F. Supp. 2d 534 (E.D.N.Y. 2010) .......................................................... 18
`
`STATUTORY AUTHORITIES
`
`15 U.S.C. § 77z-1(b)(1) .........................................................................................4, 6
`
`15 U.S.C. § 78u-4(b)(1) ........................................................................................... 21
`
`15 U.S.C. § 78u-4(b)(3)(B) ......................................................................... 15, 16, 17
`
`28 U.S.C. § 455 ......................................................................................... 4, 7, 25, 26
`
`28 U.S.C. § 455(a) .................................................................................................... 26
`
`28 U.S.C. § 455(b)(5)(iii) ......................................................................................... 28
`
`28 U.S.C. § 2072(a) ................................................................................................. 14
`
`28 U.S.C. § 2072(b) ................................................................................................. 13
`
`Private Securities Litigation Reform Act of 1995, 15 U.S.C. § 78u-4(b) ................. 3
`
`RULES AND REGULATIONS
`
`Fed. R. App. P. 32(a)(5) .......................................................................................... 36
`
`Fed. R. App. P. 32(a)(6) .......................................................................................... 36
`
`Fed. R. App. P. 32(a)(7)(B) .................................................................................... 36
`
`Fed. R. Civ. P. 8 and 9(b) ......................................................................................... 20
`
`Fed. R. Civ. P. 8(a)(2) .............................................................................................. 21
`
`Fed. R. Civ. P. 9(b) ........................................................................................... 21, 22
`
`Fed. R. Civ. P. 12(b)(6) ....................................................................................... 4, 13
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`vii
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`Fed. R. Civ. P. 26 .............................................................................................. 13, 15
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`Fed. R. Civ. P. 26(a)(1)(A) ...................................................................................... 16
`
`Fed. R. Civ. P. 26(a)(1)(C) ............................................................................... 16, 17
`
`Fed. R. Civ. P. 26(c)(1)(A) ...................................................................................... 16
`
`Fed. R. Civ. P. 56 ..................................................................................................... 17
`
`Fed. R. Civ. P. 60(b) ......................................................................................... 1, 3, 4
`
`Fed. R. Civ. P. 60(b)(2) ............................................................................................ 29
`
`LEGISLATIVE MATERIALS
`
`S. Rep. No. 104-98(1995) ........................................................................................ 15
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`Case: 22-16110, 12/27/2022, ID: 12618784, DktEntry: 23, Page 10 of 46
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`PRELIMINARY STATEMENT
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`This appeal arises from a final judgment and an order denying relief under
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`Federal Rule of Civil Procedure 60(b) of the U.S. District Court for the Northern
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`District of California (Donato, J.), which correctly dismissed baseless and incendiary
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`accusations against Defendants-Appellees Tesla, Inc. and its founder and Chief
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`Executive Officer Elon Musk (the “Tesla Defendants”).
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`Plaintiff-Appellant Aaron Greenspan is a self-described “data journalist” and
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`purported founder of Facebook1 who has, for years, waged an online campaign
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`aimed at smearing both Tesla and Mr. Musk. Since at least 2018, plaintiff has
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`authored tweets, accusatory emails, and even a 107-page conspiracy theory-laden
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`manifesto accusing Tesla and Mr. Musk of misleading investors and other
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`misconduct. Plaintiff, though, did not limit himself to spreading misinformation
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`about the Tesla Defendants. Instead, he sought to profit from doing so. In 2018,
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`around when he started tweeting accusations against Tesla, plaintiff began
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`purchasing put options on Tesla stock—and continued to do so for years. Under this
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`short-selling strategy, plaintiff bet that Tesla’s stock price would go down. But
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`Plaintiff lost his bet. The supposed fraud that plaintiff fervently decried never
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`
`
`1 See Think Computer Corp. v. Dwolla, Inc., Case No. 5:13-cv-02054-EJD
`(N.D. Cal. Mar. 24, 2014); Greenspan v. Random House, Inc., 859 F. Supp. 2d 206,
`210-11 (D. Mass. 2012).
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`
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`1
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`

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`materialized, and Tesla’s stock price steadily increased. Meanwhile, each of
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`plaintiff’s put options expired, worthless, even as he continued to purchase more.
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`Seeking to recoup his losses, plaintiff filed this suit, alleging various federal
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`and state law claims against the Tesla Defendants and another set of defendants—
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`Omar Qazi and Smick Enterprises, Inc. (the “Smick Defendants”). Despite five
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`attempts to plead viable claims, plaintiff could muster only a series of wildly
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`speculative assertions. Attempting to transform his conspiracy theories and Internet
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`“research” into a federal lawsuit, plaintiff sought to hold the Tesla Defendants liable
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`for the conduct of an unrelated third party (Mr. Qazi), claimed that Tesla deceived
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`investors about its finances and products in violation of the federal securities laws,
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`and asserted that Mr. Musk’s dismissive commentary about plaintiff on the Internet
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`was somehow libelous. These claims did not satisfy the pleading standards of Rule
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`8, much less the stringent pleading standards for private securities cases. The district
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`court properly dismissed them with prejudice after affording the utmost solicitude
`
`to plaintiff’s voluminous and convoluted pleadings.
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`On appeal, plaintiff does not even contend that his Fourth Amended
`
`Complaint stated a plausible federal claim. Rather, plaintiff challenges several
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`ancillary rulings in the hope of getting a sixth bite at the apple. None of his
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`arguments has merit.
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`2
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`First, the district court properly maintained the discovery stay mandated by
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`the Private Securities Litigation Reform Act of 1995, 15 U.S.C. § 78u-4(b)
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`(“PSLRA”). Contrary to plaintiff’s novel argument, the Federal Rules of Civil
`
`Procedure do not “conflict with” (and thus do not supersede) the PSLRA. And even
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`if the PSLRA’s automatic discovery stay did not apply, plaintiff fails to argue, much
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`less show, that the district court abused its discretion in maintaining a stay of
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`discovery while defendants’ motions to dismiss were pending.
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`Second, the district court correctly dismissed plaintiff’s claim for defamation
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`based on certain social media posts. The statements at issue are constitutionally
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`protected opinions, rather than verifiable facts, and thus are not actionable as a matter
`
`of law.
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`Third, Judge Donato properly declined to recuse himself based on plaintiff’s
`
`speculative attacks on his impartiality, which plaintiff first raised only after Judge
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`Donato dismissed his Third Amended Complaint. Neither the judge’s distant
`
`employment history nor his wife’s present employment would cause a reasonable
`
`person to conclude that the judge’s impartiality might reasonably be questioned.
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`Finally, the district court acted within its discretion in denying plaintiff’s
`
`motion for relief from judgment pursuant to Federal Rule of Civil Procedure 60(b)
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`because plaintiff’s supposedly new evidence did not support his dismissed claims.
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`
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`3
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`

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`This Court should affirm the district court’s judgment and Rule 60 order in
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`full.
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`COUNTERSTATEMENT OF ISSUES PRESENTED
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`1. Whether the district court properly exercised its discretion in staying
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`discovery “during the pendency of [a] motion to dismiss” under the PSLRA, 15
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`U.S.C. § 77z-1(b)(1).
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`2. Whether the district court correctly dismissed plaintiff’s defamation
`
`claim pursuant to Federal Rule of Civil Procedure 12(b)(6).
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`3. Whether the district court properly exercised its discretion in ruling on
`
`and denying plaintiff’s motion for recusal pursuant to 28 U.S.C. § 455.
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`4. Whether the district court properly exercised its discretion in denying
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`plaintiff’s motion for relief from judgment pursuant to Federal Rule of Civil
`
`Procedure 60(b).
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`COUNTERSTATEMENT OF THE CASE
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`A.
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`Plaintiff’s Complaints And Their Dismissal
`
`In May 2020, plaintiff filed a complaint asserting various federal and state law
`
`claims against the Tesla Defendants and the Smick Defendants. ECF No. 1. Plaintiff
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`subsequently filed a First (ECF No. 20), Second (ECF No. 70), and Third (ECF No.
`
`103) Amended Complaint. In these and many other filings, plaintiff alleged that the
`
`Tesla Defendants deceived investors about their finances and products in violation
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`
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`4
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`of the federal securities laws, made libelous remarks about plaintiff, stalked plaintiff,
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`and even collaborated with drug lords.
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`The district court dismissed each of these claims when it considered the Third
`
`Amended Complaint (ER-223-44), describing them as “merely conclusory” (ER-
`
`231), “well short of the mark” (ER-230), and “entirely too vague and speculative to
`
`support an allegation of securities fraud” (ER-233). As to the defamation claim, the
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`court concluded that the statements at issue were not actionable because “no
`
`reasonable observer would conclude that the[] words were intended to convey
`
`anything other than a personal opinion about [plaintiff].” ER-231. Even though
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`plaintiff had already “filed over 4,000 pages of pleadings” (ER-101), the court
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`granted plaintiff leave to amend his complaint for a fourth time because “this [was]
`
`the Court’s first order on the adequacy of the complaint” (ER-243). The court,
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`however, cautioned plaintiff that his “massive complaints” were “wholly
`
`inconsistent with Rule 8.” ER-243-44.
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`Plaintiff ultimately filed a 73-page Fourth Amended Complaint. ER-144-216.
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`Plaintiff later moved to file a supplemental complaint (ECF No. 141), which the
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`district court denied because plaintiff had “already filed hundreds of pages of
`
`pleadings in this case, and a total of five complaints” (ECF No. 142).
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`In May 2022, the district court dismissed the Fourth Amended Complaint
`
`(ER-101-04) because it “did not adduce additional facts that might have made the
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`
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`5
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`

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`securities or copyright claims plausible, and did not otherwise fix the problems
`
`discussed at length in the prior dismissal order” (ER-102).
`
`B.
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`The Orders At Issue In This Appeal
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`On appeal, plaintiff principally focuses on three sets of ancillary orders: (1)
`
`orders maintaining the PSLRA’s mandatory stay of discovery; (2) orders denying
`
`recusal of the district judge; and (3) an order denying Rule 60(b) relief.
`
`1.
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`The Orders Maintaining The Stay Of Discovery
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`Soon after filing his First Amended Complaint, Plaintiff filed an “Emergency
`
`Motion to Clarify Applicability Of The PSLRA And, If Relevant, Lift the Discovery
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`Stay.” ER-250-62. Rather than request that the district court lift the stay imposed
`
`by PSLRA “during the pendency of any motion to dismiss … to preserve evidence
`
`or to prevent undue prejudice,” as authorized by the PSLRA, 15 U.S.C. § 77z-
`
`1(b)(1), plaintiff argued that the PSLRA did not apply to his action. ER-255-60.
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`Plaintiff presented arguments that have been soundly rejected by other courts—such
`
`as that the PSLRA does not apply to pro se plaintiffs, non-class actions,
`
`supplemental non-securities claims, and already-produced documents—along with
`
`the novel argument that the Federal Rules of Civil Procedure supersede the PSLRA.
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`The district court denied the motion, ruling that “[a] stay on discovery will continue
`
`pending an order on the motion to dismiss.” ER-249.
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`
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`6
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`

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`Then, after failing for nearly two years to muster a viable complaint, plaintiff
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`again moved to lift the discovery stay while the motion to dismiss the Fourth
`
`Amended Complaint was pending. ECF No. 162. The district court denied
`
`plaintiff’s renewed motion—truly a belated motion for reconsideration—stating:
`
`“Plaintiff has not been unduly burdened by the stay. It will remain in effect pending
`
`an order on the motion to dismiss, which will be filed shortly.” ECF No. 167.
`
`2.
`
`The Orders Denying Recusal
`
`Shortly after the district court dismissed plaintiff’s Third Amended Complaint
`
`with leave to amend, plaintiff move to recuse Judge Donato under 28 U.S.C. § 455.
`
`ECF No. 129. Plaintiff argued that Judge Donato’s affiliation with a law firm—
`
`which ended years before this case began—was grounds to question Judge Donato’s
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`impartiality. Id. at 2-3. The remainder of the motion claimed that Judge Donato was
`
`biased because he had not specifically addressed various allegations in the Third
`
`Amended Complaint. Id. at 4-9.
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`Judge Donato denied the request. ER-217-20. He explained that his “prior
`
`affiliation with Cooley Godward and attorney Dwyer [were] not grounds for
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`disqualification.” ER-218. Further, while plaintiff “disagree[d] with some of the
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`Court’s decisions, ‘judicial rulings alone almost never constitute a valid basis for a
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`bias or partiality recusal motion’ under Section 455.” ER-219 (quoting Liteky v.
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`United States, 510 U.S. 540, 555 (1994)). And Judge Donato questioned whether
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`plaintiff’s motion was based on a genuine concern for impartiality, as opposed to
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`dissatisfaction with the court’s rulings: “This case has been pending since May
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`2020, and the parties have been unusually active in litigating it from day one.
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`[Plaintiff] did not file the recusal request until after the Court dismissed his third
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`amended complaint with leave to amend, which happened over one year into the
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`litigation. Other courts have found such timing to be improper.” ER-218-19 (citing
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`Singer v. Wadman, 745 F.2d 606, 608 (10th Cir. 1984)).
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`Plaintiff again raised recusal in his Rule 60(b) motion, arguing for the first
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`time that recusal was required because counsel for the Tesla Defendants had
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`retained, at some unspecified point, Solutus Legal Search—of which Judge Donato’s
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`wife is one employee of many. ER-94-95. Judge Donato rejected this argument as
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`“unfounded conjecture,” explaining that “[n]o reasonable person with knowledge of
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`all the facts would conclude that the Court’s impartiality might reasonably be
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`questioned on the basis of [plaintiff’s] speculation.” ER-2.
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`3.
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`The Order Denying Relief From Judgment Under Rule 60(b)
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`Following entry of final judgment, plaintiff moved to set aside the judgment
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`under Rule 60(b). ER-78-96. Plaintiff purported to offer evidence that supported
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`his securities claims. See ER-85-92. But this evidence, albeit from supposed new
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`sources, simply rehashed the allegations in the Fourth Amended Complaint.
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`Compare ER-85-92 with ER-144-216. And much, if not all, of the documentation
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`plaintiff cited pre-dated the district court’s dismissal order. See, e.g., ECF No. 179,
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`Ex. B (“May 2020 Tesla Early Access Program Contract”); Ex. E (“Internal January
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`2014 Microsoft Dynamics AX Spreadsheet Excerpt”).
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`Plaintiff asserted that “[a]fter the filing of the 4AC, multiple Confidential
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`Witnesses stepped forward to provide Plaintiff with internal Tesla data.” ER-85
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`(cleaned up). But plaintiff did not provide the specific date on which he supposedly
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`obtained this evidence, nor did he provide any credible basis to believe it was “newly
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`discovered.” Plaintiff also did not name the alleged witnesses; rather, he refused to
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`do so. See ER-88 n.6 (“Plaintiff intends to refuse to identify his Confidential
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`Witness sources if asked.”). And plaintiff did not explain how these purported
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`witnesses knew to divulge—of all the information available at Tesla—precisely the
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`information that supposedly corroborated plaintiff’s allegations at precisely the right
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`time.
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`In addition to the presentation of supposedly new evidence, plaintiff cited to
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`a recent decision in In re Tesla Securities Litigation, Case No. 3:16-cv-04865-EMC
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`(N.D. Cal.), as evidence of scienter. ER-94. But plaintiff admitted that the case
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`dealt with issues “separate and apart from those raised here.” ER-255.
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`The district court denied plaintiff’s motion, stating: “Nothing in the motion
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`warrants reconsideration of the judgment or the reasons leading up to it. Most of the
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`motion simply rehashes [plaintiff’s] prior unsuccessful arguments, and emphasizes
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`his disagreement with the Court’s findings and conclusions. These are not good
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`grounds for reconsideration under Rule 60(b).” ER-1. This appeal followed.
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`SUMMARY OF ARGUMENT
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`I.
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`The district court was well within its discretion to maintain a stay of
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`discovery during the pendency of defendants’ motions to dismiss.
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`Plaintiff wrongly argues that the PSLRA’s discovery stay provision conflicts
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`with and is thus superseded by Rule 26. As this Court has recognized, Rule 26 gives
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`district courts broad discretion to control discovery, including, for example,
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`discretion to control the timing of when parties must make initial disclosures. These
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`provisions thus can be read harmoniously.
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`Moreover, even if the PSLRA did not mandate a stay of discovery in this case,
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`the district court nevertheless had discretion to stay discovery during the pendency
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`of defendants’ motions to dismiss. Indeed, as this Court has recognized, the purpose
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`of Rule 12(b)(6) is to allow defendants to challenge the legal sufficiency of
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`complaints without subjecting themselves to discovery. And the district court’s stay
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`plainly furthered that purpose here given that plaintiff’s securities claims were
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`ultimately dismissed for failure to state a claim, and plaintiff has not challenged that
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`dismissal on appeal.
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`Plaintiff’s argument that the PSLRA’s pleading standard conflicts with the
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`pleading standards in the Federal Rules of Civil Procedure also fails. Plaintiff
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`waived that argument by not raising it below, and he now seeks an impermissible
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`advisory opinion because he never explains how the judgment would have been any
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`different if the district court had applied the pleading standards in the Federal Rules.
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`In any event, as this Court has recognized, the PSLRA’s pleading standard is
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`virtually identical to Rule 9(b), such that his challenge fails on the merits as well.
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`II.
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`The district court correctly ruled that plaintiff failed to state a claim for
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`defamation against the Tesla Defendants. The hyperbolic social media posts at issue
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`were plainly constitutionally protected statements of opinion and thus, as the district
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`court rightly ruled, not actionable under California law.
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`III. The district court acted within its discretion in denying plaintiff’s
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`recusal motion. Contrary to plaintiff’s argument, Judge Donato was not required to
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`delegate the recusal motion to another judge, and he properly ruled on the motion.
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`Nor was Judge Donato required