Tesla sues Alameda County for not allowing its factory to reopen

Elon Musk also threatened to move Tesla operations out of California and into Texas or Nevada.
Written by Campbell Kwan, Contributor

Tesla has filed a lawsuit against California's Alameda County for not allowing the company to restart operations at its factory based in Fremont.

The company's Fremont factory has not been in operation since March 23 after Alameda County ordered the factory to remain closed as part of social distancing measures to tackle the coronavirus pandemic.

In the filing, Tesla alleges that Alameda County's shutdown order violates the fourteenth amendment and ignores California Governor Gavin Newsom's order in March that permits businesses in "16 crucial infrastructure industries", including transportation equipment manufacturing, to continue work during the outbreak.

It added that there was "no rational basis" for the factory's shutdown, and that the county has allegedly contradicted its own substantive guidance of what companies are essential and allowed to operate during COVID-19.

The company is seeking a permanent injunction that would invalidate the county's order for Tesla's Fremont factory to remain shut down.

"We will continue to put people back to work in a safe and responsible manner. However, the County's position left us no choice but to take legal action to ensure that Tesla and its employees can get back to work," Tesla said in a statement on Saturday.

At the same time, Tesla CEO Elon Musk in a series of tweets on Saturday threatened to move the company's headquarters to Texas or Nevada due to the county's order.

"Frankly, this is the final straw. Tesla will now move its HQ and future programs to Texas/Nevada immediately. If we even retain Fremont manufacturing activity at all, it will be dependen [sic] on how Tesla is treated in the future. Tesla is the last carmaker left in CA," Musk said.

In response to the lawsuit, Alameda County Health Care Services Agency issued a statement [PDF] saying that the agency has been "communicating directly and working closely with the Tesla team on the ground in Fremont".

"This has been a collaborative, good faith effort to develop and implement a safety plan that allows for reopening while protecting the health and well-being of the thousands of employees who travel to and from work at Tesla's factory," it said.

The officials said Tesla has been responsive to their guidance and hopes to come to an agreement with the company. 

A week prior to Tesla raising the lawsuit, Newsom announced a four-stage framework aimed at allowing Californians to gradually reopen some lower-risk businesses and public spaces. In that announcement, he said that counties would have discretion in how they rolled out the framework.

"While the state will be moving from Stage 1 to Stage 2, counties can choose to continue more restrictive measures in place based on their local conditions, and the state expects some counties to keep their more robust stay at home orders in place beyond May 8," he said.

At the time of writing, the World Health Organization reported there are over 3.9 million confirmed cases, with almost 275,000 deaths as a result of the virus. In the United States, there are over 1.2 million confirmed cases and 75,000 deaths.

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