Tesla Will Have To Pay Just One-Ninth Of The $137M Claim In Racism Lawsuit

Tesla Inc TSLA is liable to pay $15 million to a former Black elevator operator in a racism lawsuit, Reuters reported on Wednesday, citing a court decision. 

What Happened: U.S. District Judge William Orrick in San Francisco lowered the $137 million jury award for Owen Diaz to $1.5 million for compensatory damage and punitive damages to $13.5 million.

The federal judge found Diaz was subject to a hostile environment at the Elon Musk-led Tesla factory in Fremont and the company failed to stop the racism he faced.

Diaz’s lawyers welcomed the decision but plan to appeal the lowered damages award.

"The award of $15 million is substantial but does not come close to reflecting the harm caused to Mr. Diaz, or the reprehensibility of Tesla's conduct," the report said, citing Bernard Alexander, a lawyer for Diaz.

See Also: Tesla Was Ordered To Pay Up $137M In Racism Lawsuit — Now, A Judge Says That's 'Too High'

Why It Matters: A federal jury in San Francisco had in October ordered the Elon Musk-led EV maker to pay $137 million in damages to Diaz, a former employee who worked as an elevator operator at Tesla’s Fremont, California factory in 2015 and 2016.

Tesla’s lawyer had then argued that compensatory damages should be as little as $300,000 and that punitive damages should be less than four times that amount based on similar cases. 

Price Action: Tesla stock closed 3.6% higher at $1,022.4 a share on Wednesday.

Photo courtesy: Tesla