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Law360 (May 20, 2020, 7:34 PM EDT ) Tesla Inc. dropped its lawsuit against Alameda County in California federal court on Wednesday, 11 days after filing the suit, which alleged that the county made an unconstitutional "power grab" when it initially prevented the electric car manufacturer from reopening its Fremont, California, plant.
After filing the lawsuit May 9, Tesla restarted operations at its plant on May 11, flouting the county government's orders that it stay closed without an essential business designation, and amid critical tweets from CEO Elon Musk.
Earlier this week, however, Tesla and the county government appeared to come to an agreement that ended in Alameda blessing the reopening of the plant, according to news reports.
Tesla gave no reason in its court filing Wednesday for the decision to drop the suit without prejudice.
Musk, an outspoken critic of COVID-19 stay-at-home orders, said on May 11 on Twitter, "Tesla is restarting production today against Alameda County rules. I will be on the line with everyone else. If anyone is arrested, I ask that it only be me."
Tesla said Alameda County's enforcement of its shelter-in-place mandate was a power grab to prevent its car manufacturing plant from reopening, as a recent state order allowed manufacturers there to restart operations.
At the time, experts told Law360 that the lawsuit was seen more as a power play by Musk.
Tesla argued that Gov. Gavin Newsom's order allowing crucial infrastructure manufacturers and services to resume operations should override Alameda County's local order that prevented Tesla from reopening its non-essential Fremont facility.
In another tweet, Musk said, "Frankly, this is the final straw. Tesla will now move its HQ and future programs to Texas/Nevada immediately."
Tesla's suit had sought a permanent injunction against Alameda County's order, even as the company was reopening the plant.
The company alleged that the county ignored the federal and California constitutions in enforcing its shelter-in-place order as the state was lifting some restrictions.
Counsel for Tesla didn't immediately respond to a request for comment Wednesday.
A spokesperson for Alameda County declined to comment.
Tesla is represented by Alex Spiro, Derek L. Shaffer and Kyle K. Batter of Quinn Emanuel Urquhart & Sullivan LLP.
Counsel information for Alameda County was not immediately available Wednesday.
The case is Tesla Inc. v. County of Alameda, case number 3:20-cv-03186, in the U.S. District Court for the Northern District of California.
--Additional reporting by Linda Chiem. Editing by Brian Baresch.
For a reprint of this article, please contact reprints@law360.com.
