May 13, 2026 Tesla Shareholders Appeal Suit Dismissal Tied To Texas Move
By Sydney Price
Law360 (May 13, 2026, 8:05 PM EDT) — Tesla shareholders, whose breach of fiduciary duty suit against Elon Musk and the automaker’s directors was dismissed last month following the company’s move to Texas, appealed the dismissal to the Delaware Supreme Court on Wednesday.
The notice of appeal states that the shareholders will challenge the April 13 decision by Vice Chancellor Bonnie W. David granting dismissal bids filed by Musk and Tesla Inc. directors to end the claims. Vice Chancellor David found that a forum selection bylaw applies retroactively even though the conduct at issue occurred before the company reincorporated in the Lone Star State.
The consolidated case was transferred to Vice Chancellor David on April 2 by Chancellor Kathaleen St. J. McCormick, the top judge on the Delaware Chancery Court, who denied Musk’s motion seeking her recusal from the matter and two other highÂprofile cases involving stockholders and Tesla in March.
Among other claims, the shareholders say Musk breached his fiduciary duties to the company by selling Tesla stock based on material nonpublic information, hiring Tesla employees to work for his other company xAl, and diverting microchips from Tesla to xAI and Twitter, now known as X.
The plaintiffs also claim Tesla’s directors breached their fiduciary duties by failing to maintain adequate insider trading internal controls and failing to exercise oversight over Musk’s conduct.
Employees’ Retirement System of Rhode Island is represented by Bruce E. Jameson, Marcus E. Montejo, Kevin H. Davenport and John G. Day of Prickett Jones & Elliott PA, and Daniel P. Chip lock, John T. Nicolaou, Sean A. Petterson, Miranda K. Litwak, Richard M. Heimann, Katherine Lubin Benson and Bruce W. Leppla of Lieff Cabraser Heimann & Bernstein LLP.
Cleveland Bakers and Teamsters Pension Fund, Daniel Hazen and Michael Giampietro are represented by Christine M. Mackintosh, Vivek Upadhya and William G. Passannante II of Grant & Eisenhofer PA, Thomas Curry, David J. Schwartz, David L. Wales and Adam D. Warden of Saxena White PA, Brian Schall of Schall Law Firm, and Ned Weinberger, John Vielandi and Joshua M. Glasser of Labaton Keller Sucharow LLP.
Michael Perry is represented by P. Bradford deLeeuw of deLeeuw Law LLC, Olimpia Lee Squitieri of Squitieri & Fearon LLP and Fletcher Moore of Moore Law PLLC.
Elon Musk is represented by Michael A. Barlow, Shannon M. Doughty, Hayden J. Driscoll, Alex B. Spiro, Christopher D. Kercher and Jonathan E. Feder of Quinn Emanuel Urquhart & Sullivan LLP.
Tesla Inc. is represented by John L. Reed, Ronald N. Brown III, Caleb G. Johnson, Daniel P. Klusman, Melanie Walker and Steve Rosato of DLA Piper, Rudolf Koch, Kevin M. Gallagher and Andrew L. Milam of Richards Layton & Finger PA, and Brian T. Frawley, Matthew A. Schwartz and Michael T. Lemanski of Sullivan & Cromwell LLP.
The Tesla directors are represented by David E. Ross and Garrett B. Moritz of Ross Aronstam & Moritz LLP, and Boris Feldman, Doru Gavril, Rebecca Lockert and J. Mia Tsui ofFreshfields LLP.
The case is In Re: Tesla Inc. Derivative Litigation, case number 2024-0631, in the Supreme Court of the State of Delaware.