Judicial Notice (02.03.24): Musk’s Money Troubles
The lawyers who killed Elon’s pay package, a judge in (literal) hot water, the latest Biglaw layoffs, and other legal news from the week that was.
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I had a fun week—thanks for asking. It definitely was busy. I recorded three (great) podcast episodes:
Short Circuit, with Anthony Sanders of the Institute for Justice and Daniel Sullivan of Holwell Shuster & Goldberg;
Movers, Shakers & Rainmakers, with my co-host Zach Sandberg and Matt Schwartz of DLA Piper; and
Original Jurisdiction, with David Boies of Boies Schiller Flexner (part two, which I’ll post this coming Wednesday).
I also prepared for a webinar tomorrow, to which you’re cordially invited: Justice Suspended: The Case of Judge Pauline Newman. I’ll be speaking alongside Professor Arthur Hellman of the University of Pittsburgh School of Law, and Judge Jennifer Perkins of the Arizona Court of Appeals will moderate.
This week’s testimonial for Original Jurisdiction comes from Ross Guberman, CEO of BriefCatch, LawCatch, and Legal Writing Pro: “I always look forward to David Lat’s weekly finger-on-the-pulse write-ups of key developments in the litigation, transactional, and judicial corners of the profession.”
The admiration is mutual: I’m a longtime admirer of Ross, a legal-writing guru turned legal-tech innovator, which is why I was delighted to join the LawCatch Board of Directors. As I mentioned in the press release, I’m especially excited about the new AI products that LawCatch has in the works—including one that Ross showed me at last week’s LegalWeek conference that will blow your mind.
Now, on to the news.
Lawyers of the Week: Greg Varallo, Jeroen van Kwawegen, and David Tejtel.
I don’t like being unoriginal—Ross Todd of the American Lawyer already named them his Litigators of the Week—but the clear winners here are Greg Varallo and Jeroen van Kwawegen, of Bernstein Litowitz Berger & Grossmann, and David Tejtel, of Friedman Oster & Tejtel. The trio led a sizable team of lawyers that won a landmark victory in Tornetta v. Musk, in which Delaware Chancellor Kathaleen McCormick ordered the rescission of Elon Musk’s $55.8 billion pay package at Tesla. While the ultimate outcome remains unclear, including whether the ruling will hold up on appeal, Forbes has already demoted the 52-year-old Musk on its real-time billionaires list to the #2 spot, pegging his net worth at $198 billion (behind the $211 billion of Bernard Arnault of LVMH). [UPDATE (8:45 p.m.): As discussed in the comments, Musk was already in danger of falling behind Arnault because of the recent dip in Tesla’s stock price—but as explained in the linked Forbes article, the ruling did contribute to a further erosion in Musk’s net worth: “Forbes has discounted Musk’s options by 50%, enough to knock his net worth down by $25.5 billion after the decision.”]
I discuss Tornetta in more detail below as Ruling of the Week. For now, I’ll just highlight the excellent lawyering that led these litigators to prevail in an incredibly high-stakes case against formidable adversaries: a team from Cravath Swaine & Moore led by the estimable Evan Chesler. For behind-the-scenes looks at some of the strategic decisions that Varallo, van Kwawegen, and Tetjel made—in crafting the case, going through extensive discovery, and trying the case over five days before Chancellor McCormick—see Ross Todd’s write-up and also this Wall Street Journal piece by Ryan Felton and James Fanelli.
Runners-up for Lawyer of the Week: Kyle Hawkins and Leah Bower of Lehotsky Keller Cohn. Prevailing in the Fifth Circuit, they got an award of $365 million in punitive damages against FedEx cut down to… zero. Following on the heels of Kaplan Hecker & Fink’s $83.3 million win against Donald Trump last week, it’s yet another sign that litigation boutiques are handling some of the biggest cases out there—and getting some of the best results.
Also in the headlines: Jae Lee, the latest lawyer to get benchslapped for a ChatGPT fail. After the Second Circuit asked her for a copy of a case she cited that they couldn’t find, she explained to the court that after she “encountered difficulties in locating a relevant case,” she turned to ChatGPT, which suggested the (non-existent) Matter of Bourguignon v. Coordinated Behavioral Health Servs., Inc.
Moral of the story: if ChatGPT suggests a case that’s perfectly on point and named after a classic French dish, it’s too good to be true. Cite In re Duck à l’Orange or United States v. Crêpes Suzette at your peril.
In an update on a past Lawyer of the Week, Fulton County District Attorney Fani Willis filed a 176-page motion telling us what we already knew: she’s in a “personal relationship” with Nathan Wade, whom she appointed to prosecute the Georgia racketeering case against Donald Trump (despite Wade’s lack of experience with trying racketeering or even felony cases). I can’t put it any better than Jesse Wegman of the New York Times (who’s no fan of Trump): “Seriously, Fani Willis?”
Law Blogger of the Week (or past two decades): congratulations to Howard Bashman on the 20th anniversary of How Appealing, and thanks to him for all his great work over the years.
In memoriam: Albert Butzel, the pioneering environmental lawyer who passed away at 85. May he rest in peace.
Judge of the Week: Judge Erika Ballou.
Excuse me, Your Honor, but what’s that underneath your robe?
A Las Vegas judge finds herself in hot water—after posting on Facebook a picture of herself in a bikini, enjoying a jacuzzi alongside two public defenders, and praising her own “great tits.”
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