Tesla on Monday disputed reporting saying chief executive Elon Musk reversed his position on never settling an "unjust case" against the company, calling an article in The Los Angeles Times "biased and misleading."
The automaker said the plaintiff, Randeep Hothi, in the defamation case Hothi v. Musk, had accepted "a ‘998’ offer under California law."
"These offers are used to shift the cost of litigation to the losing party. If Mr. Hothi had not accepted it, he could have been on the hook for significant legal costs when he eventually lost. The offer expressly denied any liability by Mr. Musk," Tesla tweeted. "This was an admission of defeat by Mr. Hothi and his lawyers, not a victory."
The Code of Civil Procedure section 998 was enacted to encourage the settlement of lawsuits before trial, according to the California Lawyers Association.
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"The statute provides a cost shifting financial disincentive to a party who fails to achieve a better result at trial than that party could have achieved by accepting his or her opponent’s settlement offer," the association said.
"In a settlement, each side claims some victory and suffers some defeat, or there'd be no deal. Musk's ‘surrender’ pertains to breaking his own commitment. Musk & attys were asked to comment and declined. Suit was against Musk, not Tesla. Waiting to hear from Mr. Musk. Call me," responded Times reporter Russ Mitchell.
However, also on Monday, Hothi – a critic of Musk – claimed in his own Twitter post that he had been allowed to "defeat Tesla" and "hold Elon Musk to account."
In a thread, he thanked his lawyer D. Gill Sperlein and said Musk had asked him to settle in March.
"For several reasons, I have decided to accommodate Musk (for a modest $10k). I now join the rest of you who are watching his public meltdown in real time," Hothi wrote.
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"Last year, he claimed he would never settle a case unless it was just. So, I appreciate the meaning of the offer and look forward to receiving a check from him in the mail," he continued, noting that "accepting the offer" allowed him to protect people who supported him.
"We will never surrender/settle an unjust case against us, even if we will probably lose," Musk tweeted nearly a year ago.
A statement from Hothi and his lawyers said he had accepted Musk's settlement offer on April 30. Represented by Sperlein, Hothi filed a defamation suit against Musk in August 2020 based on his remarks.
"Last year, Musk famously promised that he would never 'settle an unjust case.' Yet, he has asked Mr. Hothi to accommodate him. We welcome Musk's belated acknowledgment that this case was just," the attorney said.
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"Freedom of speech is undermined when the rich and powerful improperly act to silence and intimidate their critics," he added.
FOX Business' requests for comments from Tesla, Hothi, Sperlein and The Los Angeles Times were not immediately returned.
The Associated Press contributed to this report.
