Legal News for Tues 12/17 - Musk Pay Ruling Hits Legal Fees, TikTok Fights US Ban at SCOTUS, Trump Loses Hush Money Appeal, Judge Ho Sucks up to Trump and an Expanded CTC

Minimum Competence

This Day in Legal History: First Impeachment Trial in Senate

On December 17, 1798, the United States Senate convened its first impeachment trial in history, marking an early test of the Constitution’s impeachment provisions. The case involved Senator William Blount of Tennessee, a prominent land speculator and politician. Blount was accused of conspiring with Britain to incite a takeover of Spanish-controlled Florida, a plot uncovered through a letter implicating him in this scheme.

Blount’s alleged motives stemmed from his failing financial ventures, as he hoped British control of Florida would enhance land values in the region and stabilize his investments. The House of Representatives quickly responded by impeaching him, and the Senate expelled Blount from its ranks in July 1797, months before the trial officially began. Despite his expulsion, the Senate proceeded with impeachment to determine whether a former senator could still be tried under its jurisdiction.

Blount, however, complicated matters further by refusing to appear, retreating to Tennessee instead. The trial concluded in January 1799 when the Senate dismissed the charges, ruling it lacked jurisdiction to try a sitting or former senator. This decision clarified the limits of impeachment at the time, as the Constitution explicitly outlines the process for executive and judicial officers but does not mention senators.

The Blount trial set important precedents, underscoring the boundaries of congressional power while revealing early struggles to interpret the impeachment process. Although Blount evaded formal punishment, the case demonstrated the fragility of political integrity during the nation’s formative years.

A Delaware court ruling that struck down Elon Musk’s $56 billion Tesla compensation package also significantly reduced the legal fees sought by plaintiffs’ attorneys. Chancellor Kathaleen St. J. McCormick awarded $345 million—far less than the billions requested—by basing the fee calculation on the $2.3 billion value of the stock options at their grant date in 2018, rather than their later invalidated worth.

McCormick aimed to address the “windfall problem,” balancing incentives for lawyers to pursue risky cases with concerns over excessively high payouts. The decision highlights Delaware courts' flexibility in managing complex shareholder litigation, particularly in “moonshot” cases involving ambitious CEO pay tied to performance milestones.

This ruling could influence future disputes over executive compensation structures, which are growing in popularity but often lead to uncertain valuation dilemmas, such as stock options that fluctuate significantly. McCormick’s approach avoids setting rigid rules while signaling caution against legal fees that might “shock the conscience.” Though unique, the decision reflects broader judicial efforts to balance fairness, accountability, and public perception in high-stakes corporate litigation.

Musk Ruling Takes Aim at Lawyer Windfalls in Moonshot Pay Cases

TikTok and its parent company, ByteDance, have asked the U.S. Supreme Court to block a looming ban set to take effect on January 19, the day before the presidential inauguration. The ban, which requires ByteDance to sell TikTok or face restrictions, could disrupt the platform’s U.S. operations, impacting its 170 million American users. TikTok argues that enforcing the ban now would be unnecessary, especially since President-elect Trump has expressed openness to reconsidering his prior hardline stance on the app.

Trump recently acknowledged TikTok’s role in engaging young voters, stating he has a “warm spot” for the platform, which could influence his administration’s approach to enforcement. TikTok contends that Congress violated the First Amendment by singling it out, but the D.C. Circuit Court rejected this argument, citing national security concerns.

The ban would not require users to delete the app but would bar U.S. companies, like Oracle, from providing essential services to TikTok. TikTok warns this would effectively shut down the platform, calling it one of the nation’s most significant speech platforms. Content creators have also joined TikTok’s request to the Supreme Court, emphasizing the app’s importance for free expression, entertainment, and small businesses. Lawmakers insist the ban is necessary to prevent China from accessing U.S. user data, though no concrete evidence of misuse has been presented.

TikTok Asks US Supreme Court to Block Ban as Deadline Looms (2)

TikTok turns to US Supreme Court in last-ditch bid to avert ban | Reuters

A New York judge rejected Donald Trump’s attempt to overturn his hush money conviction based on presidential immunity, following a recent U.S. Supreme Court ruling that presidents are immune from prosecution for official acts. Justice Juan Merchan ruled the case focused on Trump’s personal actions—falsifying business records to cover up a hush money payment—rather than official presidential duties. Trump’s lawyers argued that evidence presented at trial, including social media posts and conversations from his presidency, violated the Supreme Court’s decision, but prosecutors maintained the case involved “wholly unofficial conduct.”

Trump was convicted in May on 34 counts related to a $130,000 payment his former lawyer, Michael Cohen, made to adult film actor Stormy Daniels before the 2016 election to silence claims of a sexual encounter, which Trump denies. It marked the first criminal conviction of a U.S. president. Trump's lawyers continue pursuing other motions to dismiss, including claims that his conviction could impede his ability to govern as president-elect.

While Trump’s sentencing remains on hold, Merchan’s decision affirms that unofficial conduct is not protected by presidential immunity. This case stands apart as the only one of Trump’s four criminal cases to go to trial, while other federal and state charges over the 2020 election and classified documents remain stalled.

Trump loses bid to toss hush money conviction on immunity grounds | Reuters

Democratic-led states preparing to challenge President-elect Donald Trump’s policies face a tougher legal environment, particularly in federal appeals courts. During Trump’s first term, Democratic state attorneys general successfully blocked many initiatives, but Trump reshaped the judiciary, appointing 54 conservative appellate judges and three Supreme Court justices. This transformation has particularly impacted the historically liberal 9th Circuit Court of Appeals, where Trump named 10 judges, reducing the liberal majority and increasing the risk for Democrats litigating there.

In response, Democratic states may shift their focus to courts with more favorable benches, such as the 4th Circuit, which hears appeals from Maryland, or the 1st Circuit, which remains free of Trump appointees. However, the judicial changes may slow or weaken efforts to halt Trump’s agenda on issues like immigration and abortion.

Readers should note that this shift comes as Senate Democrats recently struck a deal allowing Republicans to block four Biden appellate nominees in exchange for advancing district court judges. By abandoning these critical appellate picks, Democrats opened the door for Trump to fill influential circuit court seats, further consolidating conservative control over the federal judiciary.

Democratic-led states could face tougher legal pathway to challenge Trump's policies | Reuters

Fifth Circuit Judge James Ho’s recent public remarks have fueled speculation that he is positioning himself for a potential Supreme Court nomination under President-elect Donald Trump. Since the election, Ho has taken a series of public stances aligned with Trump’s priorities, including changing his long-held view on birthright citizenship to suggest it may not apply to children of undocumented migrants, a key Trump agenda point. Ho also criticized progressive academics and defended judges adhering to the “written Constitution” over a so-called “woke constitution” in interviews and appearances.

These moves stand out as Ho has historically been outspoken both on and off the bench, tackling contentious topics like immigration, law school protests, and judicial independence. His statements contrast with a past law review article where he argued birthright citizenship could only be revoked via constitutional amendment, prompting observers to see his shift as a calculated effort to align with Trump’s platform.

While there are currently no Supreme Court vacancies, Ho, a former law clerk for Justice Clarence Thomas, has the conservative credentials and judicial record that could place him on Trump’s shortlist. His actions echo historic parallels of judges subtly auditioning for the high court, though public remarks of this nature are a modern twist.

James Ho's Post-Election Remarks Fuel Supreme Court Speculation

In my column, I argue that expanding the child tax credit (CTC) presents a rare opportunity for bipartisan agreement and transformative policy improvement. The incoming administration has signaled interest in enhancing the CTC—potentially to $5,000 per child—but for it to succeed, it must embrace key reforms: monthly payouts, simplified access via the IRS Direct File system, and state-level matching incentives. These changes would make the program more impactful while appealing to conservative principles by involving states in its execution.

The 2021 expanded credit demonstrated the CTC’s potential to dramatically reduce child poverty. Delivered as monthly payments rather than a lump sum at tax time, the credit provided families with a reliable income stream to cover recurring expenses like rent, groceries, and utilities. This structure reduced food insecurity and helped families avoid costly loans for unexpected bills.

However, complex enrollment processes often exclude the most vulnerable households—those not required to file taxes. Integrating the IRS Direct File system would streamline access, ensuring non-filing families aren’t left out. Additionally, automatic enrollment for recipients of federal programs like SNAP or Medicaid could further eliminate administrative barriers.

State-level matching programs would enhance the credit’s reach and effectiveness by tailoring aid to regional needs, such as childcare costs or inflation impacts. This federal-state partnership could multiply benefits, turning the credit into a flexible, minimum aid floor rather than a rigid cap.

These reforms align with conservative priorities by decentralizing some control to states while maximizing federal investment through local collaboration. Politically, this makes the expanded CTC a pragmatic, rather than idealistic, proposal with a real chance of gaining congressional approval. By building on its proven success, policymakers can create a durable, bipartisan solution to child poverty.

Expanding Child Tax Credit for Good Has Bipartisan Potential

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