Updated on 5/20/2020
As the battle against Covid-19 rages throughout the country, and around the world, it’s become increasingly clear that two camps have developed. Those who have embraced the quarantine and lockdown measures (some even arguing that the restrictions have not gone far enough) and those who believe the demands of the economy must come first. The CEO of Tesla, Elon Musk, can now be firmly counted as a member of the latter group after going toe to toe with the government of California and pulling out a shocking underdog victory. In defiance of the wishes of California, the Tesla factory will reopen for business.
The Background on California’s Lock-down
In early March, most of the United States was just beginning to understand the tremendous impact Covid-19 would have on our country and our lives. For those in California, the seriousness of the situation quickly became clear when the cruise ship Grand Princess was determined to have suffered an outbreak and was forced to quarantine offshore. However, this measure was too little too late and on March 4, when it was determined that the virus was spreading through contact with previous passengers of the ship, Governor Gavin Newsom declared a state of emergency. This prompted counties through California to issue orders closing all “non-essential” businesses.
One of the companies immediately impacted by California’s shutdown of non-essential businesses was Tesla, which operates one of its main factories in Alameda County, California. Though at first Tesla was willing to comply with the order shutting down their operations, things changed quickly after Musk learned that a California state order was being issued which would allow manufacturers like Tesla to resume operations. As the statewide order did not mandate that counties allow non-essential businesses to reopen, in Alameda County it was determined that the shutdown would continue. This was all the spark necessary to ignite a tremendous controversy.
A Defiant Elon Musk Reopens Tesla Factory and Dares Authorities to Arrest Him
Upset that Alameda County would insist on stricter lock-down measures than the State Government of California, Musk launched a two-pronged attack. It began with a lawsuit filed in federal court on May 9 which accused the County of trampling on the Constitution through a blatant “power grab” in the form of the heightened restrictions. Musk followed this up, just two days later on May 11, by simply defying the County and opening the factory regardless of the rules. To add insult to injury, that day Musk tweeted “Tesla is restarting production today against Alameda County rules. I will be on the line with everyone else. If anyone is arrested, I ask that it only be me.”
Perhaps regrettably, Musk’s bravado was never put to the test as on May 11 and 12, there were no enforcement actions taken against him or Tesla in response to their disregard for the County’s order, and on May 13 the County announced that Tesla would be allowed to reopen/stay open. Though the dust has not yet settled, the public outcry over this result has been overwhelming. Those in favor of reopening the economy (including the President) have hailed Musk as a hero for pushing this agenda forward. On the other side, those fearing the effects of reopening too quickly have labeled Musk a villain who is willing to jeopardize the health and safety of his workers to boost his bottom line.
We Know The Results, But Can We Guess The Implications?
Though Tesla’s lawsuit was rife with intriguing constitutional issues which ranged from the extent of local government autonomy to the potential Constitutional protections against government orders restricting economic activity. Because Alameda County backed down from Musk’s challenge there will be no answer to these questions for now. However, perhaps the most interesting implication of these events will continue to play out before our eyes. Simply put, are large companies, and the billionaires who own them, above the law?
For now, the answer seems to be yes, or at least sometimes. But how does this fit into our understanding of the legal framework of our country? Essentially, the answer to this is poorly. For its entire history, the United States has prided itself on being a “rule of law” society, meaning the law is at least in theory applied in the same manner to every individual regardless of background or station. The wrench that modern life seems to have thrown into this model is the reality that perhaps the law cannot be applied in the same way to individuals (and businesses) that have access to an almost unimaginable level of resources and ability to draw public attention. To make this point abundantly clear, consider this stark fact. Alameda County’s total budget for 2019 – 2020 was approximately 3.5 billion dollars. Tesla’s 2019 revenues amount to 24.6 billion dollars and Elon Musk personally has a net worth of approximately 36.5 billion dollars. Regardless of who was right, it’s not hard to see why this may not have seemed like a battle worth fighting. Will other state and local governments see similar confrontations the same way? Impossible to say at this juncture, but it’s no secret that most unwinnable fights are avoided.
During this Stay Home 4 Nevada period, the Governor is encouraging other services, including but not limited to legal, business and management consulting, professional services and insurance services to have employees work remotely. Black & LoBello will remain “on-call” 24/7 to answer your emergency legal concerns at no charge. We know you are concerned but we are here for you.
Remember, this too shall pass. In the meantime, stay safe, stay healthy and be NEVADA STRONG!
