Greenspan v. Qazi, Case No. 20-cv-03426-JD

• Decision Date: 23 June 2021
• Docket Number: Case No. 20-cv-03426-JD
• Parties: AARON JACOB GREENSPAN, Plaintiff, v. OMAR QAZI, et al., Defendants.
• Court: U.S. District Court — Northern District of California

AARON JACOB GREENSPAN, Plaintiff, v. OMAR QAZI, et al., Defendants.

Case No. 20-cv-03426-JD

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA

June 23, 2021

ORDER RE MOTIONS TO DISMISS AND MOTION TO STRIKE

Re: Dkt. Nos. 107, 108

Pro se plaintiff Aaron Greenspan has filed a third amended complaint (TAC) against defendants Elon Musk and Tesla, Inc., and Omar Qazi and his company, Smick Enterprises, Inc. (Smick), for securities and copyright law violations, defamation, and civil stalking. Dkt. No. 103. The Tesla and Qazi defendants, who are represented by separate counsel, have each filed motions to dismiss the TAC under Federal Rule of Civil Procedure 12(b)(6). Dkt. Nos. 107, 108. The Qazi defendants also ask to strike Greenspan's state-law claims under California's anti-strategic lawsuits against public participation (anti-SLAPP) statute, Cal. Code Civ. P. § 425.16. Dkt. No. 107. The motions are suitable for submission without oral argument. Civil L.R. 7-1(b).

This flood of pleadings motions is part and parcel of the deeply acrimonious interactions between Greenspan and Qazi, and to a lesser degree Greenspan and the Tesla defendants. Greenspan regards Tesla as a "cult" and a "Ponzi scheme," and sees himself as its short-seller "arch-nemesis." Dkt. No. 103 ¶ 3 and at 19. Greenspan considers Qazi to be a "ferocious propagandist" for Tesla who has engaged in a "campaign of criminal harassment" against him. Id. ¶ 6 and at 7. The parties, mainly Greenspan and Qazi, have relentlessly lobbed filings at each other, resulting in a docket that already exceeds 100 entries even though discovery has been stayed and the Court has yet to rule on a motion to dismiss.

Disappointingly, the content and tone of many of these filings have been personally disparaging and inconsistent with the standards of civility and professionalism that all litigants and counsel are expected to meet in this District. Early on, the Court tried to restore at least some measure of good conduct with a "civility" order, Dkt. No. 72, but the parties have not embraced the message. See Dkt. No. 102 at 1 ("Overall, the parties' inability to handle their business in a professional manner has created a mountain of work that does nothing to promote the fair and efficient resolution of this lawsuit.").

Greenspan's complaints have been a significant challenge in themselves. He has filed over 4,000 pages of pleadings. See Dkt. No. 1 (original complaint of 264 pages, including attached exhibits); Dkt. No. 20 (first amended complaint of 1,606 pages with exhibits); Dkt. No. 70 (second amended complaint of 1,889 pages with exhibits); Dkt. No. 103 (the operative TAC of 428 pages with exhibits). Such massive complaints are antithetical to the "short and plain statement of the claim" mandated by Rule 8 of the Federal Rules of Civil Procedure, and they impose unfair burdens on the defendants who are called to answer them. The Court has cautioned Greenspan about this problem and the possible consequence of a summary dismissal. See Dkt. No. 101.

It would be perfectly appropriate to dismiss the 428-page TAC for flouting this order and Rule 8, but the Court will decide the plausibility of the federal claims in the interest of moving this case along. The Court's subject matter jurisdiction is premised on questions of federal law. See Dkt. No. 103 ¶¶ 20-22. There is no allegation of diversity of citizenship, and most of the parties are citizens of California. See id. ¶¶ 15-19. Consequently, the Court will focus on the federal claims in the motions to dismiss. The Court also resolves the challenges to the state law claims against Tesla and Musk, but declines to exercise supplemental jurisdiction over the state law claims against Qazi and Smick pending further order.

All of the federal claims in the TAC are dismissed with leave to amend as governed by the instructions given at the end of the order. The requests for judicial notice, Dkt. Nos. 108-10, 112, 119, are denied. The anti-SLAPP motion is terminated without prejudice.

BACKGROUND

As alleged in the TAC, and as is widely known, Tesla is a publicly traded electric vehicle manufacturer, and Musk is its chief executive officer. See Dkt. No. 103 ¶¶ 1-2, 18-19. Greenspan is "an investor who has held put options" in Tesla's stock,¹ and a "data journalist" who operates an online "legal information service called PlainSite." Id. ¶¶ 24-25. He says that he created an early version of Facebook, a claim that is the focus of his autobiography. See id. ¶ 225, 227; see also id. ¶ 161, issue #6. Greenspan bought put options in Tesla stock based on his belief that it was "fundamentally overvalued by the market." Id. ¶ 24. Tesla experienced a "precipitous increase" in its share price that made Musk "the wealthiest person in the world." Id. ¶ 4. The flip side was that Greenspan lost the value of his put options. Id. ¶ 282. Greenspan operates the Think Computer Foundation, which is said to be registered with the Internal Revenue Service (IRS) as a tax-exempt organization. See id. ¶¶ 51, 78. Qazi is a Tesla shareholder who has authored many social media posts praising the company and denigrating its critics, both individually and through his company, Smick. See id. ¶¶ 6, 8.

Greenspan characterizes Tesla as "the largest Ponzi scheme in history -- one that just happens to produce cars." Id. ¶ 3; see also id. ¶ 14 (referring to Tesla as "a trillion-dollar securities fraud: the largest in American history"). He says that Musk and Tesla have made "thousands of false and misleading statements and material omissions" to boost Tesla's stock price. Id. ¶ 12. Greenspan alleges 35 "issues" that are said to evince a scheme to mislead investors about Tesla's value, in violation of the securities laws. See id. ¶¶ 268-72. These include allegations that Musk posted a tweet stating that "critical feedback is always super appreciated," when Musk was "conspiring" with "ex-CIA and ex-NSA officials," "convicted felons," "social media influencers," and others to "unlawfully disseminate false and misleading news stories, and to discredit or silence critics." Id. ¶ 271, issue #15. Another allegation is that Tesla and Musk hadundisclosed dealings with the families of the notorious drug kingpins, Pablo Escobar and Joaquin "El Chapo" Archivaldo Guzmán Loera. Id. ¶ 272, issue #33. More mundanely, Greenspan also alleges that Tesla used "accounting tricks" to inflate its cash balance, id. ¶ 268, issue #1; reported "deliveries" of cars rather than "sales," id. ¶ 269, issue # 7; reported an inflated accounts receivable balance, see id. ¶ 270, issue #11; and that in January 2020, Musk made inaccurate forecasts about COVID-19, see id. ¶ 271, issue # 27. Greenspan says he continued to purchase put options even as the allegedly misleading nature of the Tesla Defendants' statements or omissions was exposed to the public. See id. ¶ 283. He has posted comments on social media about perceived problems with Tesla products. See id. ¶ 28.

The allegations against Qazi border on the lurid. They begin with Greenspan's assertion that he posted on PlainSite, his website, a report about a convicted murderer in Spain named Diego MasMarques Jr., who retaliated by "falsely alleging" on various websites that Greenspan and his family had "committed a wide variety of crimes ranging from setting up a 'fraudulent' nonprofit organization, to tax evasion, to extortion, to the hacking of his e-mail account." Id. ¶¶ 25-27. Greenspan obtained a restraining order against MasMarques. Id. ¶ 26. While not clearly explained in the TAC, this incident appears to be relevant to the defamation claims because Greenspan believes it drew the attention of Qazi, who started criticizing Greenspan by re-posting Diego's allegations on a Twitter account called "@tesla_truth." See id. ¶ 28.

The TAC then alleges a torrent of nasty exchanges between Greenspan and Qazi in the Twitterverse and similar forums. There is no reason to catalog these communications here, especially since the Court will not take up the state law defamation claims against Qazi at this time. For present purposes, it is enough to note that Greenspan accuses Qazi of conduct ranging from impersonating an AT&T service technician to get Greenspan's home address, to tweeting a doctored version of the restraining order against MasMarques to suggest that Greenspan was seeking protection from a five-year-old child named "Little Billy Watkins," with the comment, "BREAKING: Aaron Greenspan of PlainSite has been arrested after trying to beat up a group of kids in the playground after a failed child abduction. The kids ended up doing a number on him and now he has filed a restraining order against them. Should've known they would fight back."See id. ¶¶ 36, 42. Greenspan also appears to allege that Qazi was associated with an anonymous text message stating, in pertinent part, "we know about all the child pornography and images of underage kids on your computer." Id. ¶¶ 43-45. Greenspan adds that Qazi created fake Twitter accounts named after Greenspan's family members, see id. ¶¶ 69, 73, and an account called "@PlainShite," see id. ¶¶ 56, 93.

Greenspan alleges that Twitter permanently banned Qazi and shut down his accounts. Id. ¶ 98. Qazi is said to have circumvented the ban by setting up a new account through a third party, id. ¶ 119, which he used to publish more comments about Greenspan, see, e.g., id. ¶¶ 125-29.

Tesla and Musk also feature in the allegations against Qazi. Greenspan says that Qazi used his Twitter accounts to promote Tesla products and attack investors seeking to profit from decreases in Tesla's stock. See, e.g., id. ¶¶ 31, 57. Musk was aware of Qazi's Twitter presence, and praised Qazi in a news story. Id. ¶ 57. Greenspan describes them as a "tag team" lined up against him. Id. ¶ 10. When Greenspan emailed a notice of intent to sue, Musk replied with the comment, "Does the psych ward know you have a cell phone? Just curious." Id. ¶¶...