Elon Musk is furious. The county of Alameda refuses to allow the Tesla factory in Fremont to reopen, claiming it is not an “essential business” as defined by the federal government or the state of California. Elon is so mad that he is threatening to move Tesla headquarters out of the Golden State and reestablish it either in Nevada, where Gigafactory 1 stands on a plot of land that was little more than an empty desert, or to Texas, where SpaceX is building a new space launch facility but the state itself refuses to allow Tesla to sell its cars directly to Texas citizens in Tesla stores.
One of the factors that has made Tesla successful is the enormous pool of talented engineers packed into Silicon Valley. Tesla is unlikely to find the supply of superbly qualified employees quite so abundant in Sparks, Nevada, or Boca Chica, Texas. Even if the lure of working for Tesla convinces some to move to wherever the company moves, it will take years for that transition to happen.
In the final analysis, picking up stakes and moving the company lock, stock, and barrel to a new location won’t get production in Fremont restarted one nanosecond sooner. The threat to do so, however, could very well spark an urgent phone call from California Governor Gavin Newsom to Alameda County officials urging them in the strongest possible terms to rethink their position.
Return To Work Playbook
While the Fremont factory has been idle, Tesla has not been sitting on its hands. The company has put together what it calls a Return To Work Playbook, which should become required reading in every business school in the world. It is an extraordinarily detailed, comprehensive, and thoughtful guide to how to do business in the brave new world of commerce that will follow in the wake of the coronavirus pandemic. This is the kind of document governments at the federal and state level should have created but didn’t. Below is one of many graphics included in the document.
The document covers in detail how to manage suppliers delivering components to the factory, food service and custodial tasks, and employee travel arrangements. It requires the use of face masks and gloves and stresses the need for frequent hand washing coupled with social distancing at all times. Taken as a whole, the document is exemplary and shows all the care and professionalism we have come to expect with the design and manufacture of the company’s automotive products.
The takeaway from the Return To Work Playbook is that any reasonable person would find it adequately, even exhaustively, covers every conceivable aspect of doing business during a pandemic. It’s hard to imagine what further assurances Alameda County health officials might want.
Mr. Musk Goes To Court
Tesla has brought in some pretty big legal guns to support its position. The company has filed a lawsuit in federal court asking a judge to declare the county’s refusal to allow the Fremont factory to reopen a violation of the Constitution on several grounds, ranging from the due process and equal protection clauses contained in the 14th Amendment to a claim that state law takes priority over the county’s orders. The 18 page complaint throws the book at county officials and accuses them of every offense imaginable with the possible exception of mopery upon the high seas.
The equal protection argument comes down to this. San Joaquin County is adjacent to Alameda County, yet Tesla has been allowed to continue operations in San Joaquin County without interruption — ergo, Tesla is subject to two different legal standards which, ipso facto, means it is being discriminated against in violation of the 14th Amendment.
Okay, all of you convinced by that argument, raise your hands. Wow! That’s a lot of people. Now consider this. Alameda County is cooperating with 5 other counties in the San Francisco Bay Area in an effort to coordinate their response to an unexpected infection. The question the Tesla suit puts front and center is, can government at any level apply different standards to different segments of society? Let’s take a modest example.
In the state of North Dakota — one state Elon Musk has not threatened to move Tesla headquarters to — there are 39 counties. In Cass County, home to the city of Fargo, 781 people have tested positive for the virus. In Bowman County, home to the city of Bowman, one person has tested positive, according to the North Dakota Health Department.
Most people would agree that health officials in Fargo would be justified in a more intensive set of restrictions than officials in Bowman. But if Musk and his team of legal eagles, which includes high-powered law firms from New York City and Washington, DC, are correct, the same restrictions either must pertain to every citizen of North Dakota or none of them. The CleanTechnica verdict on this argument? FAIL.
The due process claim is based on the company’s assertion that the orders issued by the county of Alameda are so vague that the company cannot know what it can or cannot do in order to avoid civil and criminal penalties. The claim itself is valid. Legislators and other functionaries cannot just make stuff up that is so opaque that no one can figure out what they are or are not permitted to do. The basis of all vagueness claims goes back to vagrancy statutes popular in many jurisdictions, especially in the South, that made it a crime for a person to appear in public if they had no visible means of supporting themselves. The US Supreme Court struck down such laws decades ago.
It seems this argument is a bit of a stretch. The county made it perfectly clear what Tesla had to do to be in compliance with its health directives — stop manufacturing automobiles. The CleanTechnica verdict on this argument? FAIL.
The supremacy argument is far more likely to get some traction. California law specifically says directives from the governor’s office take precedence over local regulations. The problem is, in his order of last Thursday reopening some parts of the state’s economy, Governor Newsom seemed to imply that his directive allowed room for local officials to impose stricter guidelines if local conditions warrant them. So, on one hand, state law controls. On the other hand, the chief executive of the state is saying local edicts are okay.
What we are left with is a federal lawsuit in federal court that raises questions that properly belong in state court. Therefore, the crack CleanTechnica legal team believes the result of Tesla’s third request for relief from federal court will be: FAIL. Sorry, Elon. You should have consulted us. We would have given you better legal advice and for far less money.
Professor Eric Posner of the University of Chicago Law School has an interesting take on the role of courts in times of emergency. Writing in the Washington Post, he says, “There are powerful reasons, however, for courts to stay out of emergency public health matters. Chief among them is a little understood asymmetry in the way our judicial system responds to complaints about government misbehavior.
“When the government issues orders that restrict liberties, our constitutional tradition allows affected people to ask judges to block those orders. But when the government fails to issue orders, when it underreaches rather than overreaches, citizens have no right to judicial review. Courts do not recognize a constitutional right to health or safety; they do not allow people to sue for orders compelling the government to act.”
We are seeing this very problem arise in cases like Juliana vs United States, in which climate activists are asking courts to force political leaders to get off their hands and address the threat of a warming planet in a serious and meaningful way. Posner continues:
The coronavirus pandemic poses exquisitely difficult questions for politicians and public health authorities. Because of the explosive rate of contagion, extremely severe restrictions on liberty may be justified even before a single death has occurred. At the same time, politicians must take into account people’s willingness to follow such orders, the limits of police enforcement, the extraordinary uncertainties about how the virus behaves and how the illness can be treated, and the economic harm that results when people are forced to stay at home.
These actions do not benefit from judicial second-guessing. Judges are not public health experts, and in the midst of an emergency, they are in no position to hold hearings so that public health officials can testify, lawyers can cross-examine them and other fact-finding steps can be taken (as is normally required when courts confront difficult questions). And because of the decentralized nature of the judiciary, courts cannot develop a uniform response to the pandemic, as government officials can and do. So a system in which courts can block governments but not force them to act can only weaken the public health system.
An argument could be made that if courts are willing to block governments from taking public health measures that violate civil liberties, they should also be willing to force governments to take measures to vindicate a right to health. But what we need is less judicial involvement, not more. In public health emergencies, as in war, courts do best by leaving policy to the government.
Tesla Has A Political Problem
Tesla’s legal offensive probably belongs in state court, not federal court. But even so, by the time proceedings are commenced, hearings held, witnesses called, briefs submitted, and decisions rendered (putting aside the time taken up by endless appeals), the Alameda County order will have long since expired (it is scheduled to end May 31.) The legal system is simply incapable of moving fast enough to provide the relief sought.
Musk’s temper tantrum is having the desired effect. The mayor of Palo Alto has expressed his support. Even Lily Mei, the mayor of Fremont, has politely taken issue with the actions of Alameda County officials. Governor Newsom is the one who can defuse this sputtering time bomb but he has yet to weigh in, at least publicly. We can presume he is busy it the background looking for a political solution to a political problem.
Tesla has never been shy about using the courts to get what it wants. Two years ago, it sued the state of Michigan, which refuses to permit direct sales of automobiles to customers, in federal court, alleging many of the same arguments that appear in the most recent filing in California. After that suit dragged on for over a year, Tesla and Michigan settled their differences out of court with an agreement that gave Tesla some of what it wanted but not all.
In this situation, Tesla can’t afford to wait a year to get an answer. If Musk and Tesla want to get the Fremont factory open as soon as possible, the proper path goes through the governor’s office, not federal court.
This is still a developing story and CleanTechnica will attempt to follow every twist and turn as the saga unfolds.
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