Update on Don Lemon v. Elon Musk
We have written previously about how Elon Must casually talks about “canceling” contracts, both as the owner of Twitter (X) and as the de facto head of the So-Called Department of So-Called Government Efficiency. It all started with a post about Mr. Musk’s claim that he was canceling a contract with former CNN-figure Don Lemon to stream an interview show on Twitter. Not yet familiar with chain saws, it seems, Mr. Musk boasted that he had “axed” the deal. At the time of the “axing,” I wrote the following:
In my language, people who “cancel” a contract without cause pay damages, but only if those damages can be proven with reasonable certainty. In this case, there appears to be no signed writing evidencing the terms of the deal. That’s okay; there doesn’t need to be a signed writing here. The issue will be whether what Mr. Lemon calls “the financial terms of the agreement” are specified in sufficient detail to support an award of damages. It seems from the interview that the two men had never previously met. Presumably, there is a paper trail here.
Mr. Lemon sued last year. Last month, Judge Harold Kahn, of the California Superior Court, issued three orders (all behind a pay wall). First, Judge Kahn denied X’s motion to dismiss Mr. Lemon’s claims for fraud in the inducement, misappropriation of name and likeness, promissory estoppel and restitution. Mr. Lemon is entitled to amend his complaint to clarify whether he is alleging breach of an express or an implied contract, and there is no basis for concluding that the alleged agreement is within the statute of frauds.
Second, Judge Kahn dismissed Mr. Lemon’s claims against Mr. Musk for lack of personal jurisdiction. Third, Judge Kahn dismissed Mr. Lemon’s remaining claims against Twitter (X), including claims for negligent misrepresentation, defamation, coerced defamation, retaliation, harassment, failure to prevent retaliation or harassment, and negligence.
Twitter (X) also sought to strike all claims, alleging that Mr. Lemon’s claims were a SLAPP suit, that is, that he was engaged in a strategic lawsuit against public participation. Specifically. Twitter claimed to be (and was found to be) engaged in protected First Amendment activities. However, with respect to the causes of action covered in the first opinion, Mr. Lemon has shown that his claims have merit, and thus his complaint is not a SLAPP suit, at least with respect to those causes of action.
The moral of the story is that if you “cancel” a contract without justification, you get sued. And if you get sued, you might have to pay damages for breach of contract, among other things.