Legislatures and governors can work for years to establish a framework for attracting business to a state.
Laws and consecutive administrations can make the case that this state is business-friendly and deserves to be considered as a corporate location.
And for a long time, the program can be successful.
Then along comes one left wing judge and it all goes away, like a heat mirage in the desert.
This time, amazingly enough, it’s Democrats having trouble with judges.
It all began in 2024. Newsmax has the story, "A Delaware judge moved Monday to confirm its confiscation of Elon Musk's wealth that he created at Tesla — denying him a compensation package that would be worth over $100 billion in value today.
Delaware Chancellor Judge Kathaleen McCormick on Monday ruled to confirm her January ruling that found Musk was not eligible for a 2018 compensation package then valued at $56 billion."
- Was the package illegal?
- Was Musk milking the shareholders?
No, not at all. Elon’s crime was he offended the judge. McCormick complained the Tesla package for Musk was the "biggest compensation plan ever — an unfathomable sum."
Even after Tesla shareholders voted again to award Musk the pay package, the judge blocked it.
One judge’s whim erased decades of corporate-friendly policies that generated massive amounts of revenue for the state. Now corporations are wary, and worse for Delaware, corporations are leaving.
Newsmax's Charlie McCarthy has an update.
"Andreessen Horowitz, one of the world's most influential venture capital firms, announced it will move its corporate headquarters from Delaware to Nevada.
"The investment giant is the latest corporation to join a Delaware exodus that began after a state court voided Tesla CEO Elon Musk's $55 billion pay package in response to a 2018 lawsuit filed by a shareholder who thought the amount was excessive. Musk also moved SpaceX to Texas."
And it’s not just a domestic phenomenon.
Mercado Libre, a Latin American company, is moving out of Delaware and will reincorporate in Texas. Musk approved with a tweet stating, "At this point, any lawyer recommending incorporation in Delaware is committing malpractice."
Oklahoma, Texas and Nevada recognized Delaware’s self-inflicted wound and “have recently approved changes aimed at helping their states dip into the lucrative side of corporate litigation that Delaware, with a specialized court and business-friendly laws, has dominated as the world's incorporation capital."
Nevada just attracted Andreessen Horowitz, one of the world's most influential venture capital firms.
The company posted an update on its website that explained, "It used to be a no-brainer: start a company, incorporate in Delaware.
That is no longer the case due to recent actions by the Court of Chancery, which have injected an unprecedented level of subjectivity into judicial decisions, undermining the court's reputation for unbiased expertise.
"We have therefore decided to move the state of incorporation of our primary business, AH Capital Management, from Delaware to Nevada, which has historically been a business-friendly state with fair and balanced regulatory policies."
This judge-generated stampede may get very expensive for Delaware. The state collects millions in corporate franchise taxes, which are among Delaware’s top five revenue sources.
"Other major companies to leave Delaware recently include the nation's largest mall owner Simon Property Group, Bill Ackman's Pershing Square Capital Management, online retailer Mercado Libre, Roblox, Tripadvisor, Affirm, AMC cable networks, Madison Square Garden, and Dropbox, among others."
Not surprisingly, President Donald Trump's media company joined the exodus from Delaware, fleeing the left-leaning Blue State for the more "pro-business" climate of Florida.
And Reuters found "investors in nine more public companies worth at least $1 billion each would vote on proposals to ditch Delaware as their place of incorporation." That’s a mighty expensive price tag for one minor judge’s sense of propriety being offended.
We now live in a society were judges nationwide and from top to bottom in status suffer from a vastly inflated sense of their own importance.
Unlike umpires who call balls and strikes, these judges have decided to rewrite the rulebooks themselves.
Congress is hopeless on a federal level and frankly, if Blue States want to let popinjays in black robes run roughshod, that’s fine with us.
Red state legislatures need to wake up now and make sure their state judges don’t come down with this same judicial plague.
Michael Reagan, the eldest son of President Ronald Reagan, is a Newsmax TV analyst. A syndicated columnist and author, he chairs The Reagan Legacy Foundation. Mr. Reagan is an in-demand speaker with Premiere Speaker's Bureau. Read Michael Reagan's Reports — More Here.
Michael R. Shannon is a commentator, researcher for the League of American Voters, and an award-winning political and advertising consultant with nationwide and international experience. He is author of "Conservative Christian's Guidebook for Living in Secular Times (Now With Added Humor!)" Read Michael Shannon's Reports — More Here.