Our editorials and TIPP polls have constantly reminded readers of the threat of judicial activism. Idealogues with hatred in their hearts have cleverly been exploiting America’s vaunted criminal and civil justice system to destroy the reputations of individuals or harm their finances. And, too often, judges bring their personal biases to the bench to help.
If courtroom decisions stand, former President Trump is expected to pay Jean Carroll more than $100 million in damages for allegedly sexually assaulting her over 30 years ago and defaming her afterward. Never mind that TDS activists in the State of New York’s legislature passed a law that was valid only for one year, which allowed Carroll to resuscitate the charge and bring the lawsuit against Trump. This generous law excluded plaintiffs from the statute of limitations that would have prevented her from suing because the accusation was a long time ago – so long ago that Carroll could not even recall the year the abuse supposedly happened. Funded by Reid Hoffmann, the billionaire co-founder of LinkedIn, Carroll sued and won.
The latest to fall victim to lawfare is Tesla co-founder Elon Musk. An activist lawsuit by a shareholder who owns just eight shares claimed that Musk’s compensation “was excessive.” A Delaware judge agreed and reversed Musk’s pay.
The legal wrangling resulted from how Musk, a billionaire many times over, negotiated his pay package with Tesla’s board.
In 2018, Tesla faced severe production problems, and the markets were unsure if it could be a viable company. At the time, Tesla ($TSLA) had a market capitalization of just $59 billion. It had not made any profits since its founding 15 years prior.
The EV industry then was very different from today. Consumer Reports magazine, a respected American publication that rates automobile reliability and ownership costs, ranked Tesla low on both attributes. The pick-up truck or SUV had become so popular that both GM and Ford said they would stop car production altogether – a decision to which they have stuck. Electric vehicle range was an issue, with driver anxiety that their cars would run out of charge being paramount. Of the more than 270 million registered vehicles in America, only about 1.1 million were electric, representing a 0.4% share of the market. Nearly half of EV sales were in California.
Today, according to CarEdge, fully electric vehicles (BEVs) have an 8.1% market share (Q4 2023), a new record. Much of this stellar growth can be traced to Tesla’s success, led by Musk. Globally, Tesla’s position is so dominant that it controls 17% of the market, leaving every other Western manufacturer far behind, including GM, Ford, BMW, Mercedes, and Nissan.
Musk negotiated with the Tesla board to make his compensation entirely performance-based – no annual salary, no annual bonuses, no annual stock options, nothing. The deal was that if he could increase Tesla’s market cap from $59 billion in 2018 to $650 billion in five years – that was the only metric – he would be granted options to buy 304 million shares at a predetermined price far less than what $TSLA would trade on the New York Stock Exchange. If Musk were to exercise his options today – indications are that he has not yet done so – he would make over $50 billion.
Musk’s genius was bringing so many innovations to every aspect of Tesla’s value chain – from design to manufacturing, technology, and global marketing – that Tesla reached the $650 billion market cap in just three years. In 2021, Tesla crossed the $1 trillion mark in market cap. Even an elementary school student would conclude that Musk not only met the goals in his compensation package but exceeded them by at least 50%.
A fundamental tenet of American law is that a deal is a deal. That is why we painstakingly write/read contracts for everything we do, whether renting an apartment, leasing a car, or buying a home. Once both parties sign on the dotted line, that piece of paper carries the full force of the law if either party refuses to abide by its terms. Disagreements between parties are taken to court.
The remarkable thing about this case was that there was no disagreement. The board agreed to the compensation plan, as did Musk. The package was put up to shareholders for a vote in 2018. 73% of the shareholders agreed.
Yet one shareholder with only eight shares brought a suit, alleging the compensation was excessive. Chancellor Kathleen St. J. McCormick of the Delaware Court of Chancery agreed, ordering Tesla to cancel stock options awarded to Musk. The judge concluded that “Tesla paid him much more than was needed to motivate him to do a good job.”
It is the most atrocious civil suit and decision in memory. Coupled with Trump’s lawfare cases, the Tesla decision reinforces the average American’s uncomfortable sense that the country’s judicial system has lost its appeal as the global gold standard it once was. As the 2024 general election approaches, expect both sides to litigate every aspect of polling – before, during, and after Americans vote. The last vestige of Americans’ trust in institutions has been the courts – and with this trust in trouble, expect America to become even more divided than it already is.
TIPP Takes
Geopolitics, Geoeconomics, And More
1. Hamas Gives ‘Initial Positive Confirmation’ On Truce Plan, Says Qatar – WION
“The meeting in Paris succeeded in consolidating the proposals…,” Qatar’s foreign ministry spokesman Majed al-Ansari said of talks Qatari, U.S., Israeli, and Egyptian officials had on Sunday.
“That proposal has been approved by the Israeli side, and now we have an initial positive confirmation from the Hamas side.”
Ansari stated there were hopes of “good news” about a new pause in the fighting “in the next couple of weeks.” However, the Hamas group stated there was yet to be a consensus on the proposed plan.
2. Israel Defense Minister Declares Victory In Gaza’s Khan Younis – UPI
Defense Minister Yoav Gallant said ground forces have officially routed Hamas from Gaza’s Khan Younis.
He said the victory comes as Israel Defense Forces have killed 10,000 Hamas fighters and wounded another 10,000.
3. Britain Could Officially Recognize A Palestinian State After Cease-Fire, Says UK Top Diplomat – WION
Speaking during a visit to Lebanon, David Cameron said this could be done without waiting for the outcome of what could be years-long talks on a two-state solution between Israel and the Palestinians.
However, he stated that no recognition could come while Hamas remained in Gaza. “You can’t have a two-state solution with Gaza still controlled by the people responsible for 7 October,” he said, referring to the Hamas attack that triggered the ongoing war in Gaza.
4. Russia Says Ukraine Has Not Asked For Bodies Of POWs Killed In Crash: Report – Reuters
Russia has not received any requests from Kyiv to hand over the bodies of prisoners of war killed in the IL-76 crash last week; the RIA news agency cited Kremlin spokesman Dmitry Peskov as saying.
The Ukrainian government has said it made such a request.
5. Russia To Incorporate Ex-Wagner Units Into Its National Guard, Says UK Ministry Of Defense – WION
In its customary intelligence update, the UK’s Ministry of Defence (MoD) shared that Russian President Vladimir Putin had signed a law permitting the Russian National Guard to create its own volunteer formations.
Rosgvardia is often referred to as Putin’s “private army.”
“Rosgvardia will likely deploy its new volunteer detachments to Ukraine and Africa. Rosgvardia is reportedly offering volunteers six-month contracts for service in Ukraine and nine-month contracts for service in Africa,” read the statement.
6. EU Leaders Reach Deal On Ukraine Aid As Hungary Drops Demands – RFE/RL
Leaders from the European Union unanimously agreed to a four-year 50 billion-euro aid package for Ukraine as Hungary, which vetoed the deal in December, fell into line with the other 26 member states, ending weeks of wrangling over the move.
The deal was announced after Hungarian Prime Minister Viktor Orban held talks with the leaders of Germany, France, Italy and European Commission President Ursula von der Leyen. Ukraine will receive the first tranche of 4.5 billion euros ($4.9 billion) from Brussels next month.
7. China Warns Ukraine About Labeling Its Firms As ‘Sponsors Of War’ – Reuters
China has warned Ukraine about designating Chinese companies as “international sponsors of war,” saying it could damage relations between the two countries.
Last month, Chinese officials communicated their displeasure to Kyiv, which has included 14 Chinese entities among a list of 48 companies it claims have aided Russia. China was a significant trading partner for Ukraine before the war.
8. China Warns U.S. Tech Curbs Will ‘Come Back To Bite Them’ – AFP
The Pentagon placed several Chinese companies on a list of firms aiding Beijing’s People’s Liberation Army, including Yangtze Memory Technologies, one of China’s biggest chip manufacturers.
Asked about the move, Beijing’s foreign ministry condemned the U.S. for “unreasonably suppressing Chinese firms.”
“These U.S. actions violate principles of market competition and international economic and trade rules,” foreign ministry spokesman Wang Wenbin said, warning they would “harm the interests of U.S. firms and investors.”
9. Taiwan’s Pro-China Speaker Choice Stirs Fears Of Deeper Beijing Influence – RFA
The former pro-China mayor of Taiwan’s Kaohsiung has been elected speaker of the Legislative Yuan, sparking local civic groups’ protests to “reject China’s choice.”
The Taiwan Green Party, one of the civic groups, stated:
Letting a person who agrees with the CCP’s ‘1992 consensus’ become the speaker of Taiwan’s parliament is probably the biggest breakthrough for the CCP to infiltrate and unite Taiwan. It is undoubtedly a humiliation and threat to Taiwan’s democracy.
10. I’m Singaporean! TikTok CEO Denies China Communist Party Ties – BBC
At a hearing in Washington DC, U.S. Senator Tom Cotton asked Shou Zi Chew, CEO of Chinese-owned social media app TikTok, about his citizenship, passport, and whether he is a member of the Chinese Communist Party (CCP), to which he replied “Senator, I’m Singaporean. No.”
Chinese company ByteDance owns TikTok. Mr. Chew denies his company has ever shared or received a request to share U.S. users’ data with the Chinese government.
11. U.S. Approves Plan To Strike Iranian Targets In Syria And Iraq, Officials Say – BBC
Officials said the strikes will take place over several days, and weather conditions will likely dictate when they are launched.
U.S. officials have said that U.S. intelligence believes that the drone used to attack the facility was manufactured by Iran – and is similar to the drones Iran has been sending to Russia for its invasion of Ukraine.
Iran, meanwhile, has denied any role in the attack, which killed three U.S. soldiers and injured 41 others in Jordan.
12. U.S. Approves $4bn Sale Of Armed Drones To India – BBC
The U.S. State Department has approved the potential sale of 31 armed drones, missiles, and other equipment to India for nearly $4bn.
The MQ-9B Predator drone deal was announced during Prime Minister Narendra Modi’s visit to the U.S. in June 2023. In December, it was put on hold by a Senate committee pending an investigation into an alleged Indian assassination plot on U.S. soil. General Atomics Aeronautical Systems will be the principal contractor for the deal.
13. IMF Chief Urges Caution As European Farmers Protest: Report – WION
The International Monetary Fund’s (IMF’s) Managing Director, Kristalina Georgieva, has cautioned European governments against yielding to demands for increased financial support from protesting farmers across the continent.
Amid weeks of disruptive yet predominantly peaceful demonstrations by farmers from Germany, France, Italy, Belgium, and Greece, Georgieva emphasized the potential consequences if governments succumb to the pressure.
Georgieva acknowledged the challenges faced by farmers but warned against compromising the economic strength of nations due to populist sentiments.
14. North Korea Fires Several Cruise Missiles Into Yellow Sea: South Korea – Kyodo News
North Korea fired several unidentified cruise missiles into the Yellow Sea, South Korea’s military said, marking Pyongyang’s fourth cruise missile launch this year.
The missiles were fired following launches on Jan. 24 and on Sunday and Wednesday this week.
15. Kim Jong Un Calls For Boosting ‘War Preparations’ At Naval Shipyard – UPI
North Korean leader Kim Jong Un called for building up the country’s naval forces to intensify war preparations, state-run media reported, as tensions on the Korean Peninsula remain at their highest in years.
Kim toured the Nampho Dockyard at a major seaport on the west coast to review the construction of new warships, Korean Central News Agency reported.
16. Though U.N. Says Al-Qaeda Growing In Afghanistan, Taliban Disputes Report – UPI
The United Nations Security Council reported this week that Al-Qaeda established eight new training camps and maintains several safe houses in Afghanistan, but the Taliban rejects the claim.
The report, compiled by a U.N. sanctions team created to monitor Al-Qaeda, said the Taliban had provided support and protection for the terror group since reclaiming Afghanistan shortly after U.S. forces pulled out in 2021.
17. New Cancer Cases To Soar 77% By 2050 – WHO – AFP
The number of new cancer cases will rise to more than 35 million in 2050 — 77 percent higher than the figure in 2022, the World Health Organization’s cancer agency warned.
The WHO’s International Agency for Research on Cancer (IARC) cited tobacco, alcohol, obesity, and air pollution as key factors in the estimated rise.
18. Prescription Drug Costs Much Higher In U.S. Than In Other Nations, Report Says – UPI Health
According to the RAND Corporation study, U.S. drug prices average 2.78 times the prices charged in 33 other countries studied.
For brand-name drugs, it’s even more pronounced, with U.S. prices for those kinds of drugs being 4.22 times higher than drug prices in other countries. RAND found U.S. prices for insulin ranged from 457% higher than those in Mexico to 3,799% higher than in Turkey.
19. Many U.S. Adults Report Feeling Lonely, Survey Shows – UPI Health
About one in three U.S. adults said they feel lonely at least once a week. Worse, results show that one in 10 Americans feels lonely daily.
Younger people are more likely to experience loneliness, which is defined as a lack of meaningful or close relationships or a sense of belonging, according to the American Psychiatric Association’s latest Healthy Minds Monthly Poll.
Loneliness has been linked to an increased risk of heart disease, stroke, Type 2 diabetes, depression, anxiety, addiction, dementia, and early death, according to the U.S. Centers for Disease Control and Prevention.
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Republished with permission from TIPP Insights
