Robert Anderson@ProfRobAnderson
Today there is concerning new evidence of bias in the Delaware Chancellor's handling of Elon Musk's cases in the Chancery Court. Again, the evidence is a LinkedIn "reaction" by Chancellor McCormick to a post about a case involving Musk. This time is different, however, because it involved a case the Chancellor herself was actively presiding over at the time of the reaction--the $55 billion Musk compensation case.
By way of background, you may remember the recent incident where Chancellor McCormick's LinkedIn account "supported" a derogatory post about Musk's loss in a California case. After Musk's attorneys moved for recusal, the Chancellor blamed "suspicious activity" for the LinkedIn reaction and said she did not "support" the post. However, the Chancellor reassigned the Musk cases anyway. The Chancellor has never disclosed what, if anything, was resulted from the "suspicious activity" report she said she filed with LinkedIn.
Unfortunately, it turns out the "support" reaction to a derogatory post about Musk wasn't even close to the most problematic of Chancellor McCormick's reactions on LinkedIn. And if this had been known at the time, it is likely that McCormick would have needed to recuse or reassign the Musk cases.
Two years ago, after Chancellor McCormick handed down her $55 billion decision against Musk, the BLBG law firm that litigated the matter against Musk posted about the win McCormick handed them in the case. They boasted about their "recent victory in the headline-grabbing case against Tesla, a historic decision that nullified CEO Elon Musk's $55.8 billion compensation package."
Chancellor McCormick reacted to the plaintiffs' lawyers post with the "celebration" reaction, as shown in the screenshot. Just to be clear, this "celebration" was in reaction to a post about the victory of the plaintiffs' lawyers regarding the case the Chancellor herself decided. She "celebrated" a post by one side about her own decision in a case.
More disturbingly, the case was not even over. Chancellor McCormick was still presiding over this case for the attorneys' fees and ratification stages. She later awarded these very plaintiffs' lawyers $345 million in fees and rejected Tesla's shareholder ratification. The case was later reversed by the Delaware Supreme Court and the fee was slashed.
In light of this additional evidence, Chancellor McCormick's "suspicious activity" explanation for her "support" reaction on a derogatory Musk post seems less credible. We now know that Chancellor McCormick has a record of "celebrating" anti-Musk posts, in this situation in a case she was actively presiding over.
One might also question whether she operates her LinkedIn account in a deceptive way. The account is clearly operated as a professional account (almost all the posts and reactions relate to the Chancery Court or Delaware practitioners), yet the Chancellor lists her name as "Katie M.", and her occupation as "Delawarean." This makes it difficult for the public to find and scrutinize the account. Although these are open secrets in Delaware, it seems this is her way of communicating support for favored constituencies.
I'm sure everyone will draw their own conclusions from this based on their priors. I personally think it is time for the Delaware legislature or Supreme Court to take action. Every time the Chancellor does something like this, businesses lose confidence in Delaware's courts.
