A Delaware judge’s ruling that plaintiff lawyers in a case against Elon Musk were entitled to hundreds of millions of dollars in legal fees has sparked new demands for tort reform from social media and a legal expert who spoke with Fox News Digital.

Chancellor Kathaleen St. Jude McCormick ruled earlier this month that Musk is not entitled to receive a multibillion-dollar compensation package even though Tesla shareholders had approved it. McCormick also rejected a massive request for fees by plaintiff attorneyswho argued they were entitled to legal fees in the form of Tesla stock valued at more than $5 billion. However, McCormick ruled that the lawyers were entitled to $345 million in damages.

The request for the record fee was made by investor Richard Tornetta on behalf of the three law firms that represented him in the lawsuit against Musk’s compensation plan, which is believed to be the largest among directors delegates of publicly traded companies in the US.

Tornetta owned nine Tesla shares when he sued over the pay package that was originally approved by shareholders in 2018 before being first struck down by McCormick of the Delaware Court of Chancery in January. The fee request amounted to about $7.2 billion based on Tesla’s stock price at the time and amounted to a rate of $370,000 for each hour worked by the team of 37 attorneys, associates and paralegals , some of which typically bill as little as $275 an hour. according to documents filed by Tornetta’s legal team in court.

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A judge awarded $345 million in attorneys’ fees related to Elon Musk’s compensation dispute. (Getty Images)

“Lawyers who did nothing but damage Tesla want $6 billion,” Musk said published in X in March 2024 in response to the initial request that plaintiff attorneys were seeking. “Criminal”.

The $345 million judgment, according to Reuters, represented “one of the largest fee awards ever in securities litigation,” and The Associated Press reported that “the fee award amounts to nearly half of the current record $688 million in legal fees awarded in 2008 in litigation stemming from the Enron collapse.”

The massive ruling has led many to call for greater tort reform legislation to protect against egregious or unfair damages in lawsuits.

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Tesla Inc. CEO Elon Musk raises a glass at the Atreju convention in Rome on Saturday, Dec. 16, 2023. (Alessia Pierdomenico/Bloomberg via Getty Images)

“When consumer goods and services have to be priced to compensate lawyers at an hourly rate of $17,692, something has gone terribly wrong with the American legal system,” said Gordon Gray, executive director of Pinpoint Policy Institute, on Fox News Digital.

“Policymakers must act on behalf of their constituents to reduce runaway harm.”

“Add judicial insult to injury, Delaware Judge McCormick has ordered #Tesla shareholders to pay $345M to plaintiff’s lawyers!” Ark Invest Founder and CEO Cathie Wood published in X. “The plaintiff owned 9 shares of $TSLA. McCormick is making a mockery of the sense of fairness essential to our American judicial system.”

“This decision and the pay for the lawyers is absurd,” said billionaire hedge fund manager Bill Ackman. published in X. “We’re going to see a migration of Corporate America from Delaware.”

“This is clearly absurd,” venture capitalist Bill Gurley published in X. “If a plaintiff owns 9 shares that actually made money (no damage) can generate a $345mm legal fee, every Delaware company will be at risk and under attack. Everyone should change domicile as soon as possible. brand new plane.”

“The vast majority of Tesla shareholders approved Elon’s compensation package in 2018 and have approved it again now,” said David Sacks, the White House’s artificial intelligence and crypto czar. published in X in June “An activist judge struck it down for nothing. Litigation attorneys seeking billions in fees should get nothing.”

Elon Musk, right, speaks with President-elect Donald Trump. (Photo by Brandon Bell/Getty Images/Getty Images)

“It is unfathomable to suggest that any financial gain arising from this case could justify such exorbitant fees for plaintiff attorneys,” Tesla shareholder Liang Guo of Fort Lee, New Jersey, told the judge. according to Bloomberg. Shareholder Brian Lecher said: “Instead of honoring the wishes of the shareholders and rewarding the hard work of the CEO, it appears that the court is rewarding lawyers who did nothing for the company or the shareholders.”

Bloomberg reported that McCormick is “ethically bound” to ignore the shareholder letters, noting that Larry Hamermesh, a retired law professor well-versed in Delaware corporate disputes, called the situation “uncharted waters.”

“There is no clear guidance in the law for a fee like this.”

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“Musk’s companies are some of the most innovative and indispensable out there, from space travel to artificial intelligence, free speech and electric vehicles,” said columnist Josh Hammer. he wrote in the City Journal this month “However, companies like his are seen as lucrative targets by left-wing litigation lawyers.”

“But legal reform efforts aren’t just about a lawsuit, a CEO, or a billionaire. It’s about fixing a broken system that’s driving up the costs of every American business and threatening it. Voters delivered Trump a term in the 2024 election. Next year, he and Republicans in Congress will have to rein in the left-leaning legal lobby, protect consumers and businesses, and reduce costs if successful, will help drain one of the murkiest parts of the Washington, DC swamp.”

In a statement to Fox News Digital, a spokesperson for the Delaware Court of Chancery said, “The Court’s written ruling speaks for itself. We have no further comment.”

Eric Revell of Reuters and Fox News Digital contributed to this report