Richard J. Tornetta v. Elon Musk

Opinion

COURT OF CHANCERY OF THE STATE OF DELAWARE KATHALEEN ST. JUDE MCCORMICK LEONARD L. WILLIAMS JUSTICE CENTER CHANCELLOR 500 N. KING STREET, SUITE 11400 WILMINGTON, DELAWARE 19801-3734

July 22, 2024

Gregory V. Varallo William M. Lafferty Glenn R. McGillivray Susan W. Waesco Daniel E. Meyer Ryan D. Stottmann BERNSTEIN LITOWITZ Miranda N. Gilbert BERGER & GROSSMANN LLP Jacob M. Perrone 500 Delaware Avenue, Suite 901 MORRIS, NICHOLS, Wilmington, DE 19801 ARSHT & TUNNELL LLP 1201 N. Market Street, 16th Floor Peter B. Andrews Wilmington, DE 19801 Craig J. Springer David M. Sborz Rudolf Koch Andrew J. Peach John D. Hendershot Jackson E. Warren Kevin M. Gallagher ANDREWS & SPRINGER LLC Andrew L. Milam 4001 Kennett Pike, Suite 250 RICHARDS, LAYTON & FINGER, P.A. Wilmington, DE 19807 One Rodney Square 920 North King Street David E. Ross Wilmington, DE 19801 Garrett B. Moritz Thomas C. Mandracchia David S. Eagle ROSS ARONSTAM & MORITZ LLP Sally E. Veghte 1313 North Market St., Suite 1001 KLEHR HARRISON HARVEY Wilmington, DE 19801 BRANZBURG LLP 919 N. Market Street, Suite 1000 Catherine A. Gaul Wilmington, DE 19801 Randall J. Teti ASHBY & GEDDES, P.A. Anthony A. Rickey 500 Delaware Avenue, 8th Floor MARGRAVE LAW LLC Wilmington, DE 19801 3411 Silverside Road Baynard Building, Suite 104 John L. Reed Wilmington, DE 19810 Ronald N. Brown, III Caleb G. Johnson Theodore A. Kittila Daniel P. Klusman HALLORAN FARKAS + KITTILA LLP DLA PIPER LLP (US) 5722 Kennett Pike 1201 N. Market Street, Suite 2100 Wilmington, DE 19807 Wilmington, DE 19801 C.A. No. 2018-0408-KSJM July 22, 2024 Page 2 of 4

Christine M. Mackintosh Daniel A. Griffith GRANT & EISENHOFER, P.A. WHITEFORD TAYLOR & PRESTON LLC 123 Justison Street 600 North King Street Wilmington, DE 19801 Wilmington, DE 19801

Re: Richard J. Tornetta v. Elon Musk, et al., C.A. No. 2018-0408-KSJM

Dear Counsel:

This letter addresses the two motions for leave to participate as amicus curiae

in this action filed by non-parties the Chamber of Commerce of the United States of

America and Professor Charles M. Elson, respectively.1 Both motions are granted.

Amicus briefs are permitted at the court’s discretion.2 “The historic role of an

amicus curiae, to ensure ‘a full and complete presentation on questions of either

general or public interest that were at issue in the proceedings before the court,’

continues to be the ‘primary function’ of a person seeking leave to serve as a ‘friend

of the court.’”3 The purpose of an amicus curiae is to “supplement[] the efforts of

counsel . . . in a case of general public interest” or raise “broader legal or policy

1 C.A. No. 2018-0408-KSJM, Docket (“Dkt.”) 376 (“Chamber Mot.”); Dkt. 329 (“Elson

Mot.”). 2 Louisiana Mun. Police Empls.’ Ret. Sys. v. Hershey Co., 2013 WL 1776668, at *1

(Del. Ch. Apr. 16, 2013); Turnbull v. Fink, 644 A.2d 1322, 1324 (Del. 1994) (“The privilege to be heard as an amicus curiae, as well as the manner and extent of participation, rests within the discretion of the court.”). 3 Hershey, 2013 WL 1776668, at *1 (quoting Giammalvo v. Sunshine Min. Co., 644

A.2d 407, 409 (Del. 1994)). C.A. No. 2018-0408-KSJM July 22, 2024 Page 3 of 4

implications that might otherwise escape its consideration in the narrow context of a

specific case.”4

The Chamber’s motion accomplishes both goals. All parties can agree this is a

case of general public interest. The Chamber’s motion addresses the legal and policy

implications of the issues at hand.5 The Chamber’s reputation and ability speaks for

itself. The motion is unopposed. It is granted.

Professor Elson’s brief also assists the court by supplementing discussion on

the impact of the Telsa stockholder’s June 13, 2024 vote on this action.6 His brief too

addresses the legal and policy implications of the issues at hand. He is highly

reputable.

Tesla opposes Professor Elson’s motion on two bases. First, Tesla argues that

Professor Elson’s motion does not “concern any matter currently at issue in this

action.”7 Relatedly, Tesla argues that the motion is “procedurally improper and

untimely.”8 At the time that Professor Elson filed his motion, on May 13, 2024, Tesla

was correct to note that “[n]o party to this action, however, has asked [the court] to

determine the legal impact of the [stockholder] vote.”9 But Tesla had already taken

the position, through a letter filed on April 17, that a successful stockholder vote was

4 Giammalvo, 644 A.2d at 409.

5 Chamber Mot. at 12–26.

6 Elson Mot. Ex. A.

7 Dkt. 334 (“Tesla Opp. Br.”) at 1 (emphasis added).

8 Id. at 8.

9 Id. at 7. C.A. No. 2018-0408-KSJM July 22, 2024 Page 4 of 4

likely to “impact” this action.10 Also on April 17, Tesla filed its preliminary proxy

describing the stockholder vote as “ratification” and previewed its legal theories.11

So, the issues had been teed up by May 13. In all events, the issue is now squarely

before the court due to the defendants’ June 28, 2024 motion.12 It cannot be disputed

that, currently, Professor Elson’s motion speaks to an issue “included in the opening

brief” of a party.13

Second, Tesla argues that Elson’s purpose in filing his motion was “plainly to

cast aspersions on Tesla and its Board in advance of the . . . stockholder vote.”14 But

the brief addresses complicated legal and policy issues presented by the parties. The

court infers no improper motivation in the filing of the motion, and the court

welcomes the thoughts of Professor Elson, a leading authority on Delaware law who

previously assisted the court in this action.15 Professor Elson’s motion is granted.

Sincerely,

/s/ Kathaleen St. Jude McCormick

Chancellor

cc: All counsel of record (by File & ServeXpress)

10 Dkt. 306 (Letter to The Honorable Kathaleen St. Jude McCormick dated April 17,

2024 from John L. Reed enclosing copy of Nominal Defendant, Tesla, Inc.’s Preliminary Proxy). 11 See id. at Ex. A (Preliminary Proxy) at 6, 7, 9, 75; see also id. at 2.

12 Dkt. 396 (Defs.’ Mot. to Revise) at 13–14.

13 Cf. Jarden LLC v. Ace Am. Ins. Co., 2021 WL 5296824, at *1 (Del. Nov. 10, 2021).

14 Tesla Opp. Br. at 8–9.

15 See Dkt. 266.