• A federal judge in Pennsylvania returned to state court a lawsuit against Elon Musk and his political action committee over their $1 million daily giveaway to voters in swing states.
• The order came a day after the lawsuit by city District Attorney Larry Krasner was removed to federal court at the request of the Tesla CEO Musk and his America PAC.
• Krasner's lawsuit accuses Musk and the PAC, who are supporting Donald Trump over Kamala Harris, of running an illegal lottery.

A Pennsylvania federal judge on Friday returned to state court a lawsuit against billionaire Elon Musk and his political action committee over their $1 million daily giveaway to registered voters.

The order kicking the case from federal court — two days after it landed there – potentially sets the stage for Philadelphia District Attorney Larry Krasner to obtain a quick order in the Philadelphia County Court of Common Pleas blocking Musk and his America PAC from awarding any more prizes to voters in Pennsylvania.

A hearing on that request had begun Thursday morning but was soon aborted after a judge there said Musk's removal of the case to federal court prevented any action in the state court.

Krasner accuses Musk and the PAC of operating an illegal lottery and of trying to influence voters in the presidential election between Donald Trump and Kamala Harris.

Musk and the PAC, who are backing Trump, also are accused in the suit of violating state consumer protection laws.

U.S. District Judge Gerald Pappert in his ruling returning the case to the Court of Common Pleas dismissed arguments by Musk's lawyers that the suit should be handled in Philadelphia federal court because it references the upcoming presidential election.

"But federal question jurisdiction does not turn on a plaintiff's motivations in filing suit; it turns on whether the legal issues arising from the claims originate in federal or state law," wrote Pappert, who was appointed by former President Barack Obama.

Pappert said the defendants had not identified "any question of federal law" that must be resolved in the DA's favor "in order to prove either state-law claim."

Krasner's office in a statement Friday said, "This ruling is consistent with the argument of the District Attorney that America PAC's and Mr. Musk's eleventh hour effort to take the case away from state court in Philadelphia was contrary to law."

John Summers, an attorney representing Krasner's office in the case, said, "We await the state court's scheduling of the hearing" to consider an emergency request to halt the $1 million lottery.

CNBC has requested comment from a lawyer for Musk and America PAC.

Musk on Oct. 19 said the PAC would randomly award $1 million per day until Election Day to registered voters in one of seven swing states — among them Pennsylvania — who signed a petition supporting the U.S. Constitution. The first three prize winners were from Pennsylvania.

After he was sued Monday by Krasner in the Court of Common Pleas, Musk had been ordered to appear at an emergency hearing in that state court on Thursday morning, where a judge planned to consider Krasner's request for an injunction halting the lottery in Pennsylvania.

But on Wednesday night, lawyers for Musk and the PAC filed a notice removing the lawsuit to federal court.

On Thursday morning, after Musk failed to show at his hearing, Court of Common Pleas Judge Angelo Foglietta said the case could not proceed there, for the moment at least, because of the removal to federal court.

Summers hours later asked Pappert to return the case from federal court.

Musk's lawyer Matthew Haverstick on Friday filed a motion asking Foglietta to quash the order that Musk personally appear when a hearing on Krasner's request for an injunction resumes.

"His attendance now is only requested in order to harass and oppress," Haverstick wrote in the motion.

"Plaintiff seeks to harass Defendant Musk, and improperly sideline him in the final days leading up to a hotly contested presidential election," the lawyer wrote. "To say this is improper would be a gross understatement; seeking to chill Defendant Musk's exercise of his First Amendment rights is absolutely unconstitutional coming from a government official."