An Arizona federal judge Tuesday rejected former Nikola CEO Trevor Milton's objections to certifying a class of shareholders accusing him and the electric vehicle startup of exaggerating the viability of its prospects, finding the investors have made reasonable progress toward contacting class members.

U.S. District Judge Michael T. Liburdi said in an order signed on behalf of U.S. District Judge Steven P. Logan that the plaintiffs' notice forms and notice plan are compliant with standard procedures for class actions, despite Milton's claims that the timing of the notice plan would unfairly prejudice him.

The court noted there are no standard timelines for class notice, and that there is no authority indicating the process must be completed before the close of discovery.

"Here, the timing of plaintiffs' proposed notice plan does not reflect a lack of reasonable effort," Judge Liburdi wrote. "The process was delayed by settlement negotiations, and the subsequent breakdown of that settlement."

Milton, who was convicted of securities fraud and pardoned by President Donald Trump earlier this year, said in a motion filed in September that the investors waited until August — more than seven months after the class was certified — to email a proposed class notice process to defense counsel.

The communications revealed the investors did not have contact information for the individual class members to send them required notices, and they sought to issue a subpoena to a third party to discover this information, according to Milton's filings. Discovery in the suit expired June 20, he noted.

Milton asked the court to decertify class members who could not be provided individual notice. Dispositive motions were due by Nov. 3, and Milton alleged he would be unfairly prejudiced if class members were allowed to see the motions and the court's rulings on them before making a decision on whether to opt into the class.

In the order entered Tuesday, the court declined to decertify the class, saying the fact that notice will be provided while summary judgment briefing is ongoing does not make the notice plan deficient. The court also said it would defer ruling on the motions for summary judgment for 90 days to allow for an opt-out period.

Representatives of the parties did not immediately respond to requests for comment.

The shareholders first sued in September 2020, and the case was eventually consolidated with several other actions. The litigation came after Hindenburg Research LLC, an activist short-selling research firm, released a September 2020 report labeling Nikola Corp. "an intricate fraud based on dozens of lies."

The electric-truck maker has slammed the Hindenburg report as "false and defamatory" and merely an attempt to manipulate the market. The U.S. Securities and Exchange Commission got involved, Milton resigned and Nikola's highly publicized investment deal with General Motors Co. was subsequently scaled back.

Judge Logan initially threw out the litigation, finding the investors had not established that top Nikola executives schemed to artificially boost its stock price, but noted the company's public disclosures could have been more carefully worded to caution investors. The shareholders later filed a second consolidated amended complaint.

In December 2021, the company agreed to pay $125 million to resolve the SEC's allegations that Milton falsely gave investors the impression it had reached certain product and technological milestones.

After a month-long trial, a Manhattan federal jury found Milton guilty of one count of securities fraud and two counts of wire fraud in October 2022. He announced in March 2025 that Trump issued him a "full and unconditional pardon."

In September, the SEC said it was dismissing its civil enforcement action against Milton.

The class is represented by Gary Gotto of Keller Rohrback LLP, Jeremy A. Lieberman and Michael J. Wernke of Pomerantz LLP, Jeffrey C. Block, Jacob A. Walker and Michael D. Gaines of Block & Leviton LLP, and Jonathan Gardner and James T. Christie of Labaton Keller Sucharow LLP.

The Nikola defendants are represented by Brad S. Karp, Susanna M. Buergel, Gregory F. Laufer and Alison R. Benedon of Paul Weiss Rifkind Wharton & Garrison LLP.

Milton is represented by Brent O. Hatch, Adam M. Pace and Tyler V. Snow of Hatch Law Group PC, and Troy A. Wallin and Chad A. Hester of Wallin Hester PLC.

The lead case is Borteanu et al. v. Nikola Corp. et al., case number 2:20-cv-01797, in the U.S. District Court for the District of Arizona.