OpenAI and Altman Move to Dismiss Musk’s “Larded Carcass” Complaint
We told you early last summer that Musk filed and then dismissed a state law action asserting several crazy legal theories to support his allegation that Altman and OpenAI (c)(3) sold out to big business. I think he’s probably right but the law doesn’t provide a remedy for every gripe in the world. OpenAI says that Musk isn’t concerned about saving the world. He’s just using the courts to gain a competitive edge for his own AI business. I think that’s right too. This is cutthroat business competition by now, this isn’t about charity.
The latest happening is a Motion to Dismiss in which some mofos from Morrison Foerster, with help from some Wachtell mofos, wax eloquent. I especially like the part where they describe Musk’s latest complaint as nothing more than the “larded carcass” of his earlier state court complaint. Here is the intro:
This suit is the latest move in Elon Musk’s increasingly blusterous campaign to harass OpenAI for his own competitive advantage. OpenAI is dedicated to the safe and beneficial development of artificial general intelligence (“AGI”). Musk once supported OpenAI in that mission, but abandoned the venture when his bid to dominate it failed. Since launching a competing artificial intelligence company, xAI, Musk has been trying to leverage the judicial system for an edge. The effort should fail; Musk’s complaint does not state a claim and should be dismissed.
Earlier this year, Musk sued OpenAI entities and individuals in California Superior Court. He claimed that OpenAI, Inc.’s Certificate of Incorporation (“COI”), an email with OpenAI CEO Sam Altman from 2015, and a blog post from the same year together comprised an enforceable written contract—a “Founding Agreement” in which all of the defendants purportedly promised Musk they would open-source their latest technology and would not license it, nor grant a board observer seat, to a for-profit company.
That state court action—which Musk’s current counsel has called a “Goldfish” that “lacked teeth”—was dismissed on Musk’s own initiative, hours before argument on defendants’ fully-briefed demurrer. Two months later, Musk brought this action—boasting through counsel that the goldfish has morphed into a “Great White.” How? Not with new evidence; the core documents and facts alleged are the same. And not with a new narrative; this complaint, though more hyperbolic, recycles the same story. Instead, what’s new is that the carcass of the “Founding Agreement” (now lowercased and shunted to the back of the complaint, see ¶ 2484 ) is larded with allegations of fraud, racketeering, and false advertising. Citing RICO and the Lanham Act, Musk now claims entitlement to treble damages.
But Musk offers neither the factual nor the legal scaffolding needed to sustain his claims. His express contract claim (Count VI) pleads no mutual assent and no bargained-for consideration—the two essential elements of any contract. The same goes for Musk’s implied contract claim (Count VII), pursuit of which Musk disclaimed in his earlier action. Musk’s claims for breach of the implied covenant (Count VIII) and tortious interference (Count XIV) fall with his contract claims and fail for independent reasons.
Musk’s new claim for promissory fraud (Count I) and its unjust enrichment tag-along (Count IX) are puffed-up versions of his untenable contract claims. Musk cannot clearly identify any promises made to him that were then broken, much less any facts supporting his spurious accusation of intent to defraud. He comes nowhere near satisfying the heightened pleading requirement of Federal Rule of Civil Procedure 9(b). Nor, as a result, can he sustain his aiding-and-abetting claim (Count III)—which is in any event asserted against entities that did not exist at the time of the purported false promises.
Musk’s RICO claims (Counts IV and V), predicated on supposed acts of wire fraud, bear the same defects, and also rest on the implausible premise—supported by zero facts pleaded—that Altman, OpenAI President Greg Brockman, and various entities within and outside the OpenAI organization infiltrated and corrupted OpenAI, Inc. as the mob might a business. Musk’s claims for constructive fraud (Count II), unfair competition (Count XI), and aiding and abetting fiduciary breach (Count XIII) are improper efforts to avoid standing rules designed to prevent precisely what Musk is attempting here: using one’s status as a non-profit donor to try to control the affairs of the non-profit.
Musk’s claims for false advertising under California law and the Lanham Act fail for, among other things, want of an advertisement. Finally, Musk’s request for a judicial declaration respecting what constitutes AGI should be dismissed for lack of any well-pleaded substantive claim to ground it. In short, Musk’s second attempt to muster a cognizable legal claim against any of the OpenAI Defendants fails in its entirety.
darryll k. jones