Judge told Tesla to release evidence in short seller trial. Instead, Tesla dropped the case

SAN FRANCISCO  —  Tesla claimed Randeep Hothi was a dangerous stalker who injured a security guard and endangered Tesla employees with his car. It asked a judge to slap Hothi with a restraining order.

But Tesla dropped the suit Friday after the judge ordered the company to turn over video and audio evidence to prove its case. The company said it chose not to release the evidence to protect the privacy of its employees.

In a letter to Alameda County Superior Court Judge Jeffrey Brand, Tesla said the employees suffered “unwanted publicity and online harassment” and that “production of their private conversations to Mr. Hothi would, in Tesla’s view, inflict more damage by subjecting them to an unwarranted invasion of their privacy and further harassment.”

It was Tesla, in the lawsuit, that had revealed the employees’ names, not Hothi.

Hothi could not be reached for comment. He said outside the courtroom at an earlier hearing that Tesla was making up stories to smear him and shut him up. Video and audio evidence would clear him, he said. His attorney, Gill Sperlein, said he sent Tesla lawyers a letter Friday noting that his client plans to file a malicious prosecution suit against the company. The letter demands that Tesla retain all evidence.

“It’s clear that this case was intended from the beginning to intimidate Mr. Hothi,” Sperlein said. “He will not be intimidated. We will continue a dedicated search for the truth.”

Hothi is a member of an online community known as $TslaQ, which uses Twitter to trade information about the company, most of it negative. Most members are short sellers, who bet that a company’s stock price is overvalued and who can make money when the stock price goes down.

A resident of Fremont, Calif., and doctoral student at the University of Michigan, Hothi used cameras to monitor and document production levels at the Tesla automobile assembly plant in Fremont.

Tesla alleged that Hothi struck a security guard with his car in the factory’s parking lot last February and that two months later he used his car to threaten and endanger three Tesla employees testing a Model 3’s Autopilot system on Interstate 880 between Fremont and Oakland. The employees, according to a court document filed by Tesla, feared that Hothi’s “road conduct would cause a collision and injure them.”

Hothi said he hit no one with his car. Fremont police reviewed security video of the event and filed no charges.

Hothi noted that the Model 3 is fitted with eight cameras used to guide the Autopilot driver assist system. An additional camera is mounted on the back of the car to record Autopilot’s capabilities. He said the Tesla employees were taking pictures of him with their smartphones. He was following the car, Hothi said, to take videos and compare them with footage Tesla might show in its marketing videos to demonstrate whether they were edited accurately.

Sperlein, Hothi’s lawyer, asked Tesla to turn over video and audio recordings. Tesla said no. The judge was then asked to order Tesla to do so, which he did. Tesla agreed to turn over the material but asked the court to keep it secret. The judge said he would consider it, but noted that the company would need a compelling reason to hide the material, given that California trials are, by law, public. Tesla had also asked the judge to bar the media from the proceedings, a request the judge never responded to.