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Tesla Motor’s Defamation Saga

Posted on 12 April, 2013 in Defamation by admin

Tesla defamation

Tesla Motors is the hot new electric car company that seems to be dealing with some defamation issues. How should the car company respond?

In certain circles, Tesla Motors is the new darling of the automotive industry – and those circles don’t take kindly when detractors trash their “Great Battery Hope.” So when New York Times reporter, John Broder, penned and published a less than flattering column about a Tesla Model S test drive, the blogosphere perked up and chimed in. Who was right? Would Tesla sue the NTY for defamation even though a UK court recently ruled against them? Below is the whole story.

Elon Musk is part Steve Jobs, part Sir Richard Branson and part Henry Ford. Evidence: back in the day, the 21st century Renaissance Man started the now ubiquitous online payment processor, Pay Pal. He’s also the brains behind the Jetson-esque travel venture, SpaceX.  But today, Musk is best known as a leading luminary in the electric car industry. His company, Tesla Motors, is now one of the most profitable electronic car companies in the United States – and it ain’t doing badly abroad either.

Musk’s impressive forward-thinking entrepreneurial skills have put him in the category of Jobs, Branson and Ford. And like his fellow T1 business brethren, an arguably unctuous cult has grown up around Musk. To put it bluntly, Tesla’s website feels like an online meeting group for people who hand out free copies of  ‘Who Killed the Electric Car.’ (And hey, more power to ‘em.)

So when a New York Times journalist wrote a biting review of a Tesla Model S, the proverbial quinoa hit the solar-powered windmill.

Several days after Broder’s article appeared in the New York Times, Musk had a rebuttal up on Tesla’s website. In a cautious, yet strongly worded, analysis, Musk addressed every negative point in Broder’s article using data pulled from the vehicle’s data log, which he said the company started keeping track of after its defamation lawsuit against British television show, Top Gear.

Within a few days, the issue garnered international attention. Broder responded to Musk’s claims – and even a third New York Times reporter got involved, in an effort to act as an objective third party investigating the claims made by both her colleague, Broder, and Tesla’s top executive, Musk.

Since the competing versions hit the wires, the question on everybody’s mind has been: Is Tesla going to enter the libel litigation ring, once again, but this time with the New York Times?

Let’s take a look at the Tesla criticism saga from the beginning.

Top Gear Incident

In 2008, a Tesla Roadster was featured on the humorous and popular BBC program, Top Gear. Top Gear, being the satirical show that it is, took a few pot shots at the battery-powered vehicle. Specifically, the show depicted the car running out of juice on the track. At the end of the segment, host Jeremy Clarkson opined, “Although Tesla says it will do 200 miles we have worked out that on our track it will run out after just 55 miles and it if does run out, it is not a quick job to charge it up again.”

Despite the jab, Clarkson and crew praised the Roadster’s acceleration. Nevertheless, Musk declared the show’s performance, “completely false” and Tesla promptly filed a defamation lawsuit against the BBC in UK court. And who could blame them. After all, British libel laws are a whole lot more plaintiff-friendly than their U.S. counterparts, and the veracity of a Tesla battery is, foundationally, the metaphorical oil that greases the company’s success. More than that, Musk claims to have seen a copy of the Top Gear script for the episode before the test drive even happened. He insists it already included the bit about the battery dying.

Result Of The UK Defamation Suit: Advantage BBC

Despite the UK’s claimant-friendly libel laws, a judge ruled in favor of the BBC. Then an appeal’s court affirmed the lower court’s decision. British judicial officials reasoned that the average person would not have “reasonably compared” the Roadster’s performance on the Top Gear track to the car’s real-life capabilities. Specifically, the ruling judge explained that the material under review was “not capable of being defamatory at all, or, if it is, it is not capable of being a sufficiently serious defamatory meaning to constitute a real and substantial tort.”

Next Up: Broder’s ‘Stalled Out On Tesla’s Electric Highway’

Just when Tesla thought their defamation battles were over, on February 8, 2013, the New York Times published an article written by John Broder, an auto journalist.  The article entitled “Stalled Out On Tesla’s Electric Highway” chronicled Broder’s trip, in a Tesla Model S – a car which the company claims has a 265-mile charge range — from Washington, DC to Boston, MA.

Tesla facilitated the test drive. Their hope was that Broder would have a problem free journey on the mid-Atlantic section of Interstate 95 where new “ultrafast” charging stations have recently been added in Newark, DE and Milford, CT.

Tesla’s hopes of a positive review, however, were not to be fulfilled. While Broder penned a paucity of praise for the electronic car, his missive was mainly littered with complaints. After a fairly uneventful first half of the trip, Broder claims problems began. He reported:

  1. After noticing the battery charge diminishing rapidly, Broder said he followed Tesla’s “range maximization guide,” turned the climate control to low, set up camp in the far-right lane, and activated cruise control at 54mph.
  2. Not noticing any improvement, Broder reports to have called Tesla to ask for help. He said the customer service representative instructed him to turn off cruise control.
  3. Broder reported that after several more “cold, slow miles” the dashboard indicator said it was shutting off the heater and ordered, in red letters, to “recharge now!”
  4. He kept going and lamented that “[he] drove a state-of-the-art electric vehicle past a lot of gas stations…[and]…wasn’t smiling.”
  5. Broder claimed to have “limped along” the Interstate at 45mph for many miles.

Ultimately, Broder’s article climaxed with the Model S being loaded on to a flatbed truck because it allegedly could not reach the next charge station in Milford. The column concluded with the car being dropped off at a Tesla dealership in Manhattan.

A Most Peculiar Test Drive

Needless to say, Elon Musk and the Tesla fan club did not take kindly to Broder’s account. Several days after “Stalled Out” hit the wires, Musk posted a response on the Tesla blog. In an eloquent – yet tendentious – reply, Musk touched on all of Broder’s complaints.

Seemingly in an effort to combat Broder’s insinuation that the Model S does not perform well in cold temperatures, Musk also pointed out the popularity of Tesla in colder countries, like Norway. Specifically, he reminded readers, “about half of all Tesla Roadster and Model S customers drive in temperatures well below freezing in the winter.”

The consummate professional, in his reply, Musk was sure not to disparage journalists as a whole, offering, “While the vast majority of journalists are honest, some believe the facts shouldn’t get in the way of a salacious story.” He was also sure to mention Broder’s past work, and concluded the journalist had an “outright disdain for electric cars”

Unbeknownst to Broder, the Model S he drove was being monitored via the cars “feedback” system. In his blog post, Musk explained that after the Top Gear incident, Tesla always “carefully data log media drives” in the event they need to rebut any unfairly unflattering reviews.

And with that, Musk refuted each of Broder’s reported negative experiences, using data from the drive logs. Point-by-point he deconstructed Broder’s accusations against the car’s empirical data and explained why, in the company’s opinion, “Stalled Out” “does not factually represent Tesla technology.” Musk averred that according to the data:

  1. The battery never ran out of energy.
  2. Broder didn’t follow advice from the Tesla customer service agent, whom Musk says told him not to disconnect the charge cable when range displayed 32 miles.
  3. Broder’s mileage accounts in “Stalled Out” did not jive with the car data.
  4. Broder drove past a public charge station even though the car warned him he was low.
  5. Broder never set cruise control to 54, and drove between 65-81mph when he said he was travelling at 54mph.
  6. The average cabin temperature was 72, not 45.
  7. Broder turned the temperature up from 72 to 74, and didn’t turn down like he reported.
  8. The battery was not charged to full capacity at various charging stations along the route.
  9. Broder took an unplanned detour in Manhattan.
  10. Broder drove in circles “for over a half mile in a tiny 100-space parking lot.”

Musk also spent some time talking about possible improper use of the car’s supercharger capabilities, which are recommended for long drives. At the end of the rebuttal, Musk called on the New York Times to investigate the “journalistic integrity” of Broder’s article.

Public Response

The die was cast. Journalists and bloggers on both sides of the pond had both sides of the story – and people got down to the business of analyzing both. Within a few hours, the public was spewing their opinion online. Sides were chosen, and folks waited to see if Tesla would sue the New York Times for defamation.

Both Wired.com and The Atlantic Wire posted articles the day after Musk’s refutation.  Both punched holes in Tesla’s data analysis and ultimately concluded that while Musk wasn’t lying about what the logs revealed, he also conveniently left out information that didn’t support his argument.

In a show of proper journalism, the New York Times took Musk up on his urging. One of the paper’s reporters, Margaret Sullivan, hopped on the case. After investigating, Sullivan concluded the fault fell equally on both Broder and Musk – the former for not using good judgment during the test drive, and the latter for not being 100% transparent with the data analysis.

A Question Of Defamation

After the dust settled, the prevailing consensus was that both sides were to blame. But there is no denying that the controversy didn’t give Tesla some promotion. And to belabor the old saying, any publicity is good publicity. So the question remains: will Tesla opt to file a defamation lawsuit against Broder and the New York Times? If not because they think they could win, but because it would keep the company’s name in the press.

If Musk and company decided to go through with a libel suit, they’d be the underdog. For starters, the United States – thanks in large part to the First Amendment – has the most defendant-friendly libel laws in the world. Secondly, the car company would most likely have to reveal a whole lot of trade secrets.

But perhaps the largest hurdle they’d have to jump to land in the winner’s circle would be “actual malice.” In a defamation lawsuit between Tesla and the New York Times, the Plaintiffs would probably have to prove actual malice – meaning they’d have to submit convincing evidence that Broder purposefully bungled the Test Drive – and or lied about his experience – to harm Tesla. Now, if Tesla can somehow prove that the data log conclusively proves that Broder acted in bad faith, they may have a shot.

What do you think? Based on your knowledge of the case, do you think Tesla has a shot at winning a defamation lawsuit against the New York Times? If you think they don’t, is a defamation lawsuit – which plays out in the press — a way to increase publicity for the up-and-coming car company?