Texan Elon Musk, who has seen his net worth plummet hundreds of billions of dollars this month due to a steep decline in Telsa stock, quietly added a new foe last week — Susman Godfrey and Houston partner Justin Nelson — which could be a courtroom-size headache for the world’s wealthiest person.
Nelson, who led the Dominion Voting Systems $787.5 million victory over Fox News in 2023, filed a federal lawsuit on behalf of Media Matters against X Corp/Twitter accusing the social media platform and its owner of abusing the civil justice system to get vengeance against media entities that he blames for his economic losses.
In a 38-page lawsuit filed in San Francisco last week, Media Matters accuses Texas-headquartered X Corp of conducting “a vendetta-driven campaign of libel tourism” by violating its own terms of service when it filed multiple lawsuits around the world alleging the not-for-profit media watchdog manipulated algorithms to create images of racist content appearing next to X’s largest advertisers, which caused those advertisers to stop doing billions of dollars in business with the social media platform.
The lawsuits brought in 2023 by X Corp against Media Matters were filed in the Northern District of Texas, Ireland and Singapore. Those cases are active and pending.
To fight the litigation brought by Musk and X Corp., Media Matters has now hired two litigation powerhouses, Houston-based Susman Godfrey and global law firm Gibson Dunn, to get more aggressive in its defense and, as the lawsuit filed last week demonstrates, to go on the offensive.
“X brought these suits as punishment for Media Matters’ truthful reporting that ads appeared next to white-supremacist content on the X platform,” Nelson wrote in the lawsuit against X Corp. “Immediately after Media Matters published that reporting, Elon Musk — chairman of X— proclaimed that his company was about to file a ‘thermonuclear’ lawsuit against Media Matters in retaliation.”
The Media Matters complaint points out that all three lawsuits brought by X Corp. violated its own terms of service, which included a forum selection clause. The TOS states:
“All disputes related to these Terms or the Services will be brought solely in the federal or state courts located in San Francisco County, California, United States.”
When Musk purchased Twitter in 2022, he fired 80 percent of the company’s workers employed to safeguard against users posting content deemed to be violent, racist or extremist and he “reinstated suspended accounts of known white supremacists,” which was followed by a “surge in hateful language,” including a tripling of racial slurs against Black people and a 61 percent jump in antisemitic posts, the lawsuit states.
When the news media reported the data, several major advertisers suspended their advertising efforts on X Corp., causing revenues to plummet by about 50 percent, court documents show.
“In response, Musk lashed out — not against the violent and extremist rhetoric exploding on X, but against the organizations calling attention to these issues on the world’s leading platform for real-time communication and agenda-setting,” Nelson wrote in the lawsuit.
To address the issue, X Corp. announced in August 2023 that its new partnership with Integral Ad Science would give advertisers greater control over the placement of their ads.
But in November 2023, Media Matters senior reporter Eric Hananoki wrote an article stating that the “advertising controls were not functioning effectively” and that “X was permitting the placement of advertisements next to pro-Nazi or other extremist content,” the lawsuit stated.
The article published several examples, including an image of an advertisement for Oracle appearing next to an image of Adolf Hitler.
Four days later, Musk’s company, X Corp., filed the first of the three lawsuits in federal court against Media Matters and Hananoki in the federal court in Fort Worth accusing them of manipulating the X user’s experience, publishing false and defamatory articles with the intent of harming X Corp.’s revenue stream.
“Media Matters for America is a self-proclaimed media watchdog that decided it would not let the truth get in the way of a story it wanted to publish about X Corp.,” lawyers for X Corp. wrote in a complaint filed in 2023. “Looking to portray X’s social networking platform as being dominated by ‘white nationalist and anti-Semitic conspiracy theories,’ Media Matters knowingly and maliciously manufactured side-by-side images depicting advertisers’ posts on X Corp.’s social media platform beside Neo-Nazi and white-nationalist fringe content and then portrayed these manufactured images as if they were what typical X users experience on the platform.”
“Media Matters designed both these images and its resulting media strategy to drive advertisers from the platform and destroy X Corp.,” the lawsuit stated.
X Corp. is represented by Cedar Hill lawyer John Sullivan and Austin lawyer Judd Stone II.
Lawyers for Media Matters filed motions in the Fort Worth lawsuit seeking a transfer of venue in the case to San Francisco, citing X Corp.’s own terms of service agreement and noting that there is “no connection between the case and that district.”
“Hananoki did not do any research in or otherwise travel to Texas for his article, he did not speak to anyone in Texas in the process of preparing the article, and Texas is not referenced in the article,” Nelson wrote in the lawsuit filed last week. “X Corp.’s decision to file there was nothing more than an additional element of harassment in an already abusive and punitive lawsuit. While this first suit was harassment enough — and has cost Media Matters millions of dollars to defend — it was only the start of Musk’s globetrotting litigation campaign against Media Matters.”
In court documents, Nelson stated that “Musk has reiterated that these suits are part of his personal campaign against Media Matters.”
“Media Matters is an evil propaganda machine,” Musk stated at an X townhall meeting, according to the lawsuit. “We are suing them in every country that they operate. And we will pursue not just the organization, but anyone funding that organization. I want to be clear about that. Anyone funding that organization, we will pursue them. So Media Matters is an evil propaganda machine. They can go to hell. I hope they do.”
U.S. District Judge Reed O’Connor has scheduled an October trial for the case brought by X Corp. against Media Matters.
Susman Godfrey earlier this month replaced the Elias Law Firm as co-lead counsel with Gibson Dunn in the Northern District of Texas litigation. The lawsuits in Ireland and Singapore are being handled by separate counsel.
In the lawsuit, Nelson states that the litigation brought by X Corp. has cost Media Matters millions of dollars in legal fees and forced the not-for-profit to lay off employees last year.
Besides Nelson, the other Susman Godfrey lawyers working on the case for Media Matters include Matthew Behncke, Katherine Peaslee and Amanda Bonn. Gibson Dunn partner Amer Ahmed of New York is co-lead counsel.
No counsel for X Corp. has yet been identified. Efforts to reach the company for a comment were unsuccessful.
The case is Media Matters for America v. X Corp, Twitter International. Case No. 3:25-cv0-02397.