• by Wendy Davis  @wendyndavis, December 8, 2023

X Corp. owner Elon Musk on Thursday told the Supreme Court that a restriction on his ability to tweet about Tesla violates the First Amendment.

The restriction, which he agreed to as part of a settlement with the Securities and Exchange Commission, prohibits Musk from tweeting about his car company without first obtaining approval from its lawyers.

Such a restriction “is a quintessential prior restraint that the law forbids,” his lawyers say in a petition urging the Supreme Court to review the restriction.

They add that the settlement term “restricts Mr. Musk’s speech even when truthful and accurate,” and "chills Mr. Musk’s speech through the never-ending threat of contempt, fines, or even imprisonment for otherwise protected speech if not pre-approved to the SEC’s or a court’s satisfaction."

Musk's settlement with the agency, entered into in 2018, stemmed from charges that he misled investors by tweeting earlier that year that he intended to take Tesla private. In addition to requiring Musk to clear his tweets in advance, the agreement required him to step down as chairman of the company's board, and pay a $20 million fine.

Since entering into the settlement, the Securities and Exchange Commission launched two investigations of Musk's tweets -- the first involved tweets regarding Tesla's annual production of cars, and the second centered on a 2021 Twitter poll in which Musk floated selling 10% of his Tesla stock.

In March of 2022, Musk petitioned a federal district court to lift the restriction on his tweets, unsuccessfully arguing that the terms violated the First Amendment, and that the Securities and Exchange Commission was using the consent decree to “micro-manage” Musk's speech.

U.S. District Court Judge Lewis Liman in New York rejected Musk's argument, ruling that even though the restriction on tweeting affects his right to free speech, he waived that right when he entered into the settlement.

The 2nd Circuit upheld Liman's ruling, writing that people who enter into settlements can waive their constitutional rights.