Musk's X Corp loses lawsuit against hate speech watchdog

By Jonathan Stempel

(Reuters) -A U.S. judge on Monday threw out Elon Musk's lawsuit against a nonprofit group that faulted him for allowing a rise in hate speech on his social media platform X, formerly Twitter.

U.S. District Judge Charles Breyer in San Francisco said it was "evident" that Musk's X Corp sued the Center for Countering Digital Hate (CCDH) because he didn't like its criticism, and thought its research would hurt X's image and scare advertisers away.

"X Corp has brought this case in order to punish CCDH for CCDH publications that criticized X Corp--and perhaps in order to dissuade others who might wish to engage in such criticism," Breyer wrote.

"It is impossible to read the complaint and not conclude that X Corp is far more concerned about CCDH's speech than it is its data collection methods," he added.

X, in a statement, said it plans to appeal.

The decision is a blow to Musk, the world's third-richest person, who has for many years styled himself as a free-speech champion.

But since paying $44 billion for Twitter in October 2022, he has faced wide criticism for firing too many people who policed misinformation, and from civil rights groups for allowing more harmful and abusive posts.

Imran Ahmed, chief executive of the Center for Countering Digital Hate, in a statement said Breyer's decision affirms his group's right "to hold accountable social media companies for decisions they make behind closed doors."

Roberta Kaplan, a lawyer for the nonprofit, said the decision shows that Musk "cannot bend the rule of law to his will."

Musk and X have also faced many other lawsuits, including claims by former Twitter executives that Musk improperly withheld severance, and by vendors claiming they haven't been paid.

Tesla, the electric vehicle maker that Musk runs, has separately faced several lawsuits claiming it tolerated the harassment of workers. It has denied those claims.

MUSK TAKEOVER NOT FORESEEABLE

X accused the center of breaching its 2019 user contract by scraping and cherry-picking data to create false and misleading reports that Musk turned X into a haven for hate speech, extremism and misinformation.

According to X's complaint filed last July, the nonprofit designed its "scare campaign" to drive away advertisers, and caused tens of millions of dollars in damages.

X had argued that the nonprofit was bound by Musk’s policy changes, and could have left Twitter if it didn’t like them.

Breyer agreed that X's desire to staunch criticism was "entirely reasonable from a business point of view."

But he said the nonprofit could not have foreseen when it signed up with Twitter that Musk would eventually take over and loosen how it moderated user content.

Breyer also dismissed X's claims against the European Climate Foundation, a nonprofit based in The Hague, Netherlands that promotes efforts to mitigate climate change.

X had accused it of conspiring with the Center for Countering Digital Hate to illegally gather data.

Nathaniel Bach, a lawyer for ECF, said that nonprofit was grateful for the dismissal of Musk's "frivolous" lawsuit.

Musk's own speech has often also drawn complaints.

In November 2023, Musk endorsed an antisemitic post on X that said members of the Jewish community were stoking hatred against white people, saying the user spoke "the actual truth."

Musk has denied being antisemitic and sought to make amends, including in a January visit to the former Nazi death camp Auschwitz in southern Poland.

The case is X Corp v. Center for Countering Digital Hate Inc et al, U.S. District Court, Northern District of California, No. 23-03836.

(Reporting by Jonathan Stempel in New York; Editing by Aurora Ellis)