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Journalist Helen Andrews offered a pithy and insightful observation that the entirety of ideational and social changes leading to “woke” ideology is the result of the feminization of institutions due to greater numbers of women participants (see The Great Feminization). This, she insists, has not been a salutary development.
Is the Delaware Chancery Court a case in point?.
The first woman to serve as a Chancery judge was appointed in 1984, when the court was expanded to four judges. She retired in 1994. A second female judge served from 2015 to 2019. There are now seven judges, four of them women, including the first woman to serve as Chancellor, Kathleen St. Jude McCormick, appointed in 2021.
Delaware has long been known for its laws favorable to those entrusted with corporate governance. One of the significant advantages of Delaware incorporation has been the highly professional, predictable, jury-free work of the Chancery Court, staffed with highly qualified specialists in corporate law. It is still the case that the judges and magistrates on the Chancery Court have impeccable credentials.
There is no corporate tax in Delaware. There have been no significant adverse legislative changes. So why have a significant number of big firms such as Tesla, Dropbox, Coinbase, the Trump Media Group and other tech firms suddenly reincorporated in Nevada, Florida or Texas? It is understandable that firms would flee California’s tax and regulatory predation, but what has changed in Delaware?
In a controversial and apparently diagnostic ruling, Chancellor McCormick agreed with a plaintiff shareholder that Elon Musk's Tesla compensation package violated a fairness standard even though it had been board-approved in accordance with company rules and procedures. The Delaware Supreme Court overruled her and found the assumption that Musk must have exerted undue influence violated the rather basic principle of law that the plaintiff must prove his case, and by implication that the defendant is not required to overcome the inclinations of the judge.
Musk’s legal team (which appears to include about half the big law firms in Delaware and NYC) later discovered that Chancellor McCormick had “liked” a comment on LinkedIn by someone who had worked on the Twitter lawsuit in which Musk was hit with a $2 billion judgment. The commenter posted congratulations to the legal team “for standing up for the little guy against the richest man in the world.” "Liking" this comment prompted the charge of bias.
The judge said she had no recollection of doing that and later suggested that maybe her account had been hacked. She now assigns vice chancellor judges to Musk cases (of which there are several pending matters) by picking Scrabble tiles from a bag with letters corresponding to the names of the other judges.
In any event, the damage has been done. The whole point of incorporating in Delaware is to avoid unpredictable outcomes derived from arbitrary emotional support of “the little guy” (or emotional animus against the big guy) rather than predictably following the law.
In a different era, back when it seemed there was a rush to the courthouse to file derivative class action suits every time a stock price dropped, some firms maintained a roster of clients who seemed to own at least one share of every stock on the NY Exchange so they could be named in a class action. The "little guy" was an abstract commodity. Then-Chancellor Grover Brown had a humorous take on this phenomenon:
In more than nine years as a member of the Court of Chancery I have noticed that each year seems to bring forth several new shareholder-related suits brought in the name of Harry Lewis. Over the same period, however, because of settlements, voluntary dismissals, mooted actions and the like, I have never had the good fortune to actually lay eyes on anyone claiming to be Harry Lewis. From time to time I would check with other members of the Court. As best I can tell, none of them has ever seen this apparent champion of the minority shareholders either. I must facetiously admit that more than once the suspicion crossed my mind that perhaps no such person as Harry Lewis actually existed, that perhaps he was merely a fiction--a "street name" if you will--utilized at random by various counsel for the purpose of bringing class and derivative actions for the needed protection of shareholders interests.
Then one day not long ago I chanced to meet a respected member of the Delaware corporate bar who, apparently having become aware of my tongue-in-cheek concern, felt constrained to tell me that he had only recently attended a deposition in New York at which Harry Lewis was also in attendance. Thus, I proceed on the assumption that, in fact, Harry Lewis lives.
I think Elon would have fared better before Chancellor Brown, as would the fiscal health of the State of Delaware.
Discussion (18)
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The most alarming thing in the whole affair is that absent McCormick's trivial social media interaction the judgment would have been sustained. The suit should have been dismissed when it was brought, with scornful hilarity if that's a legal thing. On the other hand, if the charge were valid it shouldn't have been subject to dismissal on such trivial grounds.
Corporations are justified in running from Delaware. You can't run a business in the longhouse.
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I think the best that can be hoped for is that the largely indecipherable hierarchy of oppression that comprises the blueprint for the [fill-in-the-blank]ification of society turns into the equivalent of a circular firing squad, and that most of them take each other out in the race to the top without doing too much more damage to us normies.
For a long while, what's come to be known as the "feminization" of society was, more or less, the primary focus of the equality movement. So it's had a head start over the color-ization, the relig-ization, the disable-ization, the queer-ization, and all the rest of the "-izations" that have come since.
There is considerable evidence to suggest that early feminist efforts to level the playing field relied on the (accurate) idea that women--given equal opportunity--could actually compete meritocratically with men in many fields (see Camille Paglia), but that idea quickly went by the wayside in favor of a twisted idea of "fairness," percentages, and a determination to meet arbitrary and mindless quotas, regardless of actual qualifications for the post. As a result, women have often been elevated to positions for which they were not best qualified, and so, here we are.
I expect, over time, things to get worse, as the ramifications and fallout from those "izations" I mentioned above become more widely recognized.
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In a successful leftist revolution the most vicious kill the useful idiots after they consolidate control. That actually turns out to be the worst of all outcomes.
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Yes, it is a thing and the feminists will tell you it is a good thing.
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