Giuseppe Pampena v. Elon R.Musk

District Court, N.D. California·Decided June 30, 2025·No. 3:22-cv-05937·Unknown

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 GIUSEPPE PAMPENA, et al., Case No. 22-cv-05937-CRB (DMR)

8 Plaintiffs, ORDER ON REQUESTS FOR ADMISSION 9 v. Re: Dkt. Nos. 207, 208 10 ELON MUSK, 11 Defendant.

12 Plaintiffs initially challenged 92 requests for admission (“RFAs”) [Docket Nos. 129, 169], 13 and Defendant contested 233 RFAs [Docket Nos. 136, 172]. On April 25, 2025, Plaintiffs filed a 14 unilateral letter stating they were withdrawing their motion to compel responses to all but seven 15 RFAs. [Docket No. 199.] The court ordered the parties to meet and confer, [Docket No. 200], and 16 the parties refined their disputes and significantly narrowed them. Defendant now moves to 17 compel further responses to 24 RFAs. [Docket No. 207 (Def. JDL).] Plaintiffs move to compel 18 further responses to seven RFAs. [Docket No. 208 (Plf. JDL).] 19 This matter is suitable for determination without oral argument. Civ. L.R. 7-1(b). For the 20 reasons stated below, the court grants the motions in part and denies them in part. 21 I. BACKGROUND 22 This is a securities class action. Plaintiffs allege that on April 25, 2022, Twitter and an 23 entity wholly-owned by Defendant Elon Musk entered into an agreement (the “Merger 24 Agreement”) for the acquisition of Twitter at $54.20 per share. [Docket No. 48 (Order on MTD) 25 at 2]. According to Plaintiffs, Musk then made several misrepresentations to “artificially depress 26 the price of Twitter stock and to pressure Twitter to lower the price Defendant would have to pay 27 to acquire it.” Id. at 1. A. Legal Standards for Securities Fraud 1 “Plaintiffs alleging securities fraud under Section 10(b) must plead the following elements: 2 (1) a material misrepresentation or omission; (2) scienter; (3) a connection with the purchase or 3 sale of a security; (4) reliance on the misrepresentation; (5) economic loss; and (6) loss causation 4 (a causal connection between the material misrepresentation and the economic loss).” Order on 5 MTD 17 (citing Dura Pharm., Inc. v. Broudo, 544 U.S. 336, 341–42 (2005); Loos v. Immersion 6 Corp., 762 F.3d 880, 886–87 (9th Cir. 2014)). Scienter is “a mental state embracing intent to 7 deceive, manipulate, or defraud.” Order on MTD 28. “To demonstrate scienter, the defendant 8 must have contemporaneously made ‘false or misleading statements either intentionally or with 9 deliberate recklessness.’” Id. at 29 (quoting Zucco Partners, LLC v. Digimarc Corp., 552 F.3d 10 981, 991 (9th Cir. 2009)). 11 B. Judge Breyer’s Order on the Motion to Dismiss 12 On July 10, 2023, Defendant moved to dismiss Plaintiff’s first amended complaint (FAC) 13 for failure to state a claim. [Docket No. 34 (FAC).] The Honorable Charles R. Breyer granted the 14 motion in part and denied it in part. In so doing, the court analyzed each of the alleged 15 misstatements to determine whether Plaintiffs met the pleading standard to state a securities fraud 16 claim. 17 The court held that, as alleged, Defendant’s statements on May 13, 16, and 17, 2022 met 18 the “material misrepresentation” standard. Order on MTD at 20, 23-25. Specifically, Defendant’s 19 May 13 tweet suggested that “the Twitter deal was on hold—and would not close—until Twitter 20 provided information supporting its bot calculations. Or, put another way, a reasonable investor 21 could have plausibly understood that Twitter was obligated to provide Defendant with the 22 requested information for the deal to close.” Id. at 19. “Because Plaintiffs have plausibly alleged 23 that Twitter did not have that obligation, Defendant’s statement that the deal was on hold pending 24 details from Twitter about its bot calculations was materially misleading to reasonable investors.” 25 Id. at 20. Defendant’s May 16 statement and tweets stated that 20% of Twitter’s users were bots; 26 the court held that Plaintiffs plausibly alleged the investing public was misled to believe 27 Defendant had received this information from Twitter, when in fact he had not. Id. at 23. 1 and that the deal could not move forward without proof from Twitter that the bots were less than 2 5%. The court held that Plaintiffs sufficiently pleaded these statements were false, for the same 3 reasons stated above. Id. at 24-25. 4 With respect to Defendant’s letters sent to Twitter on July 8, August 29, and September 9, 5 2022 terminating the Merger Agreement, the court held that they did not support a securities fraud 6 claim because Plaintiffs had not sufficiently pleaded that the letters were false. Id. at 27. 7 “Plaintiffs do not adequately specify which statements within the various letters are misleading or 8 state the reason or reasons why they are.” Id. (citing the PSLRA standard). 9 The court then analyzed scienter regarding the May 13, 16, and 17 statements. 10 Specifically, the court examined the allegations that: “(a) Defendant ‘personally negotiated’ the 11 Merger and therefore had actual knowledge of the falsity of the statements; (b) Defendant had a 12 motive to depress Twitter stock; (c) Defendant’s actions and ultimate settlement in the Delaware 13 action are evidence of scienter; and (d) Defendant’s dismissal of his financing lead is evidence of 14 scienter.” Id. at 29. The court found that Plaintiffs’ allegations, “when viewed holistically, give 15 rise to a strong inference of scienter.” Id. at 30. 16 II. LEGAL STANDARDS 17 A party may serve on any other party a written request to admit the truth of any 18 nonprivileged matter that is relevant to any party’s claim or defense relating to (1) facts, (2) the 19 application of law to fact, or opinions about either, or (3) the genuineness of any described 20 documents. Fed. R. Civ. P. 36(a); see also Fed. R. Civ. P. 26(b)(1). “While the party seeking to 21 compel discovery has the burden of establishing that its request satisfies relevancy requirements, the party opposing discovery bears the burden of showing that discovery should not be allowed, 22 and of clarifying, explaining, and supporting its objections with competent evidence.” Lofton v. 23 Verizon Wireless (VAW) LLC, 308 F.R.D. 276, 281 (N.D. Cal. 2015) (citing La. Pac. Corp. v. 24 Money Mkt. 1 Inst’l Inv. Dealer, 285 F.R.D. 481, 485 (N.D. Cal. 2012)). 25 It is well-established that “[t]he purpose of Rule 36(a) is to expedite trial by establishing 26 certain material facts as true and thus narrowing the range of issues for trial.” Asea, Inc. v. S. Pac. 27 1 Amendment to Fed. R. Civ. P. 36 (“Rule 36 serves two vital purposes, both of which are designed 2 to reduce trial time. Admissions are sought, first to facilitate proof with respect to issues that 3 cannot be eliminated from the case, and secondly, to narrow the issues by eliminating those that 4 can be.”). Accordingly, “there is general agreement that requests for admission are not to be 5 treated as substitutes for discovery processes to uncover evidence, and that they may not be 6 applied to controverted legal issues lying at the heart of the case. Their purpose is to eliminate 7 from the trial matters as to which there is no genuine dispute.” People of State of Cal. v. The Jules 8 Fribourg, 19 F.R.D. 432, 436 (N.D. Cal. 1955). Rule 36(a) “is not to be used in an effort to ‘harass the other side’ or in the hope that a party’s adversary will simply concede essential 9 elements.” Conlon v. United States, 474 F.3d 616

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Giuseppe Pampena v. Elon R.Musk, (N.D. Cal. 2025).

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