Elon Musk Appeals ‘Unconstitutional Ruling’ to the Supreme Court

Elon Musk, the multibillionaire businessman, filed a petition with the US Supreme Court on Thursday asking the court to consider whether the SEC overreached its authority in imposing a consent decree that Musk has called a “muzzle” on his right to free speech, which is guaranteed by the constitution.


The ruling was sparked by Musk’s August 2018 statement on the now-defunct social networking site X, when he stated that he had “funding secured” to take his electric vehicle business Tesla (TSLA.O) private. After the decision was upheld by a lower court in May, Musk requested that the justices consider his appeal.


A three-judge panel from the 2nd U.S. Circuit of Appeals in Manhattan examined Musk’s case and discovered no proof that the SEC had harassed him on Twitter over the allegations of investor fraud by using the decree. After buying the social networking site last year, Musk changed its name to X.



A consent decree was a part of the deal that Tesla and Musk reached with the SEC. It included a $20 million fine for Tesla and Musk, the removal of Musk’s chairmanship, and Musk’s approval to allow a lawyer for Tesla to pre-approve specific tweets.



Three judges determined that because Musk had “changed his mind,” the screening of his Twitter communications could not be reevaluated. Musk requested a rehearing of the case in July, but the 2nd Circuit denied his request.


The SEC’s “gag rule” was an unlawful restriction on free speech, and the agency lacked the right to impose it as a condition of a settlement, according to Musk’s legal team.


The Fifth U.S. Circuit Court of Appeals in New Orleans, which found in March that Musk had violated federal labor laws when he tweeted in May 2018 that Tesla employees would forfeit their stock options if they formed a union, has agreed to reexamine its decision. The 5th Circuit is expected to hear the matter in January.

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