Tesla lawyer asks San Francisco jury to cut $137 million award in race discrimination case

By Malathi Nayak | Bloomberg

Tesla Inc.’s lawyer asked the jury in a damages trial over racism at a California plant to focus on how much money the victim of the abuse should get and not on changing the world.

The five-day trial that started Monday is a redo for Owen Diaz, a former contractor who complained of racial taunts and threats at the electric car-maker’s plant in Fremont, California. Two years ago Diaz won a $137 million verdict, one of the largest jury awards in US history in a discrimination lawsuit by an individual. After the judge decided the amount was too high and offered Diaz $15 million, he instead chose a retrial over damages with a new jury.

“What this case is not about is whether we think everything that happened at the Fremont factory of Tesla was defensible or right. It was not. There’s no excuse,” company attorney Alex Spiro told jurors in federal court in San Francisco. “This case is also not about harassment generally or the problems of this country or the history of the world and what we all ought to spend more time doing to make it better.”

Diaz, a former elevator operator, filed his suit in 2017. Tesla has faced years of complaints from Black workers that managers at the factory turned a blind eye to the commonplace use of racial slurs on the assembly line and were slow to clean up graffiti with swastikas and other hate symbols scrawled in common areas.

Spiro said Diaz exaggerated his claims and lied and urged the jury to award only what he deserves for psychological suffering for proven wrongs.

“This is a hostile environment case based on race,” Diaz’s attorney, Bernard Alexander, told the jury of four women and four men in his opening argument. He drew a stark contrast between a “futuristic company making futuristic products” and a workplace with a “plantation mentality.”

Tesla allowed racism to “fester,” Alexander said. “If you don’t correct the conduct, you’re condoning it,” he said.

Spiro downplayed those claims by calling Tesla’s factory a “small city” where there were “tensions” as thousands of minorities, immigrants and blue-collar workers worked together to get things done and not everybody got along. One instance in which Diaz complained of a coworker physically attacking him in the elevator had nothing to do with racial bias but was “just a fight between two guys,” he said.

There were no written complaints by Diaz with details of racist conduct he claimed he endured, Spiro told jurors. How were Tesla and its managers “supposed to do things about things they didn’t know were happening?” he said.

Diaz’s jury includes retirees and employees of Safeway and Zoom, who were picked from a pool of more than 40 prospective jurors. In written questionnaires, many would-be jurors expressed a dislike for Tesla Chief Executive Officer Elon Musk.

Spiro has become Musk’s go-to attorney for high-profile matters. He persuaded a federal jury in San Francisco in January to return a verdict in Musk’s favor in a securities fraud trial over the billionaire’s 2018 tweet about taking Tesla private.

In a separate case, Tesla is fighting claims by California’s civil rights department that hundreds of African American workers at its factory were subject to mistreatment, including harassment, unequal pay and retaliation.

The case is Diaz v. Tesla Inc., 17-cv-06748, US District Court, Northern District of California (San Francisco).

©2023 Bloomberg L.P.

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