Today Elon Musk Breaks … Civil Procedure! And Maybe The NLRB!

At the tech policy podcast Moderated Content, Stanford Professors Evelyn Douek and Alex Stamos frequently joke that Elon Musk is his own law school curriculum. And it’s true! From contracts, to torts, to the First Amendment, to SLAPP suits, the man is a one-man, 1L textbook on wheels.

Today’s Elon Lesson comes to us in CivPro, and is entitled “Why Do My PACER Alerts — Okay, Fine, Court Listener — Look Like That?”

Screenshot 2024-03-01 at 2.42.34 PM

As usual, this hot, hot mess arises from the Boy Genius’s thin, thin skin. To wit, five SpaceX employees circulated an open letter in June of 2022 via SpaceX’s internal Microsoft Teams channel. In the letter, which was later published by The Verge, the employees called out the company for failing to support diversity and inclusion, as well as excoriating Musk for his constant loutish behavior. (Spoiler Alert: It got a lot worse.)

Space X immediately fired the employees, who responded by filing a complaint with the National Labor Relations Board (NLRB) alleging that the company had interfered with their right to organize. The NLRB investigated, sustained the complaint, and set a March 5 hearing before an administrative law judge in California, where the employees work and Space X is headquartered.

Naturally the company turned around and sued the NLRB claiming that ALJs are illegal. And they did it in Texas.

In one sense, suing in Texas was entirely logical. In 2022, the Fifth Circuit held in Jarkesy v. SEC that ALJs are unconstitutional. The case was argued at SCOTUS in November, but for the time being, there’s a credible claim that ALJs are illegal in the Fifth Circuit.

But in another, more accurate sense, there’s no earthly reason that a California company should be able to forum shop its way into Texas in a dispute over a ruling by ALJs in California pertaining to employees who are also residents of California.

This was more or less the conclusion of Judge Rolando Olvera, in the Southern District of Texas, who transferred the case to the Central District of California on February 15. But before Judge Consuelo Marshall could docket it in Los Angeles, Space X petitioned the Fifth Circuit on February 16 for a writ of mandamus directing Judge Olveras to request that the case be returned.

Without opining on the merits of Space X’s claim that it would be grievously injured if forced to go through with the March 5 NLRB hearing, the Fifth Circuit administratively stayed the transfer on February 19. But since the transfer was already in process, Judge Marshall docketed the case in California on February 23.

On the 26th, the Fifth Circuit put out a testy order claiming that it still retained jurisdiction over the case, thank you very much.

Our court has not been stripped of its jurisdiction until transfer has been completed. Transfer is not complete the moment a case is electronically sent to an out-of-circuit court. Rather, the case must be both sent and docketed for a transfer to be complete.

The appellate panel instructed Judge Olvera to request that Judge Marshall transfer the case back, and both District judges complied forthwith. This explains the state of my PACER alerts, if not what the hell this case is still doing in Texas.

As the NLRB’s lawyers put it in the agency’s response to the petition for mandamus:

The California office of a California company fires eight employees, almost all of them based in California. The California regional office of the National Labor Relations Board (“NLRB”) engages in a year-long investigation, finds merit to charges alleging that the firings were unlawful, and issues an administrative complaint setting the case for a California hearing. According to Petitioner Space Exploration Technologies Corp. (“SpaceX”), not only may a challenge to the NLRB’s proceeding be heard in Texas, but it is “clear and indisputable” that transferring such a challenge from Texas to California is impermissible. This not only sounds wrong, it is wrong. SpaceX’s venue arguments are meritless. And that is exactly what the district court concluded before properly transferring the case to the Central District of California.

Which sounds pretty convincing. But this is the Fifth Circuit so, YMMV.

In re: Space Exploration Technologies [Fifth Circuit Mandamus Docket, via Court Listener]
Space X v. NLRB [Central Dist. CA Docket, via Court Listener]
Space X v. NLRB [Southern Dist. TX Docket, via Court Listener]

Liz Dye lives in Baltimore where she produces the Law and Chaos substack and podcast.


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