Rule of Law Isn’t a Recommendation, for Elon Musk or Anyone Else

Before Elon Musk spent September fighting Brazil’s online disinformation rules, he devoted his energy to pulling down a pillar of US corporate law.

When a Delaware judge voided his record $56 billion pay package, Musk slammed the state, moved Tesla to Texas, urged shareholders to re-approve the comp deal, and told the judge to restore it. In essence, he’s looking to override a landmark court ruling by sheer force of will.

Musk has reportedly blinked first after a protracted feud with a Brazilian judge over anti-government posts on his social network, X. But both that confrontation and the Delaware gambit seem to reflect something in his DNA that tells him to go whenever the conventional wisdom says stop. Musk famously told the biographer Walter Isaacson that “the only rules are the ones dictated by the laws of physics. Everything else is a recommendation.”

He may not quite have broken the laws of physics, but he’s bent them. Tesla brought electric cars to the masses. Starlink connects the world. SpaceX lands rockets upright on offshore platforms. PayPal has become a verb.

The catch is the way he’s bent the rules of law, too.

In disputes involving the roadways, the stock market, the workplace, and the internet, Musk’s MO has been not just to defend himself, but to go after the legitimacy of courts and agencies. And “it seems like every single time he eventually just gets away with it,” says Southern Methodist University law professor Carliss Chatman.

His brinkmanship raises urgent questions about how the laws apply (or don’t) to the world’s richest man. In case after case, Musk pushes and pushes, exploiting the blind spots in norms we mistook for rules. He may have met his match in Brazil’s Alexandre de Moraes—for now—but we don’t have that type of legal Lone Ranger in the US.

He defied local Covid-19 lockdown orders to reopen a Tesla plant. He’s trying to dismantle the National Labor Relations Board by challenging its constitutionality. He has European digital enforcers at a loss as he swallows their fines without making any effort to curb disinformation on X.

And that’s a partial list.

Is Musk’s defiance a legitimate use of his resources? Is his superpower unimaginable wealth, or just unprecedented hubris? Would it take unconstitutional tactics to stop him? Is it worth the collateral damage?

Tesla CEO Elon Musk speaks during the official opening of the electric car manufacturer’s Gigafactory in Germany.

Photo by Christian Marquardt - Pool/Getty Images

Musk built most of his fortune and influence in emerging sectors that are coming of age when regulators are growing weaker and Congress rarely passes major new legislation. “What Elon highlights for me is the failure of all the things that are supposed to happen before you ever get to court,” Chatman says. “We haven’t ever had anyone who was capable of testing the system this way.”

Billionaires who bristle against the regulatory reins have always been major drivers of legal change, as the US Supreme Court’s ruling in June in Loper Bright Enterprises v. Raimondo illustrates. The decision—curtailing judicial deference toward federal agencies—may have been the crowning victory of the long-term campaign to defang the administrative state.

Still, there seems to be something different about the manifold Musk. With each bid to reshape the law, he’s tailoring it “to fit the Elon Musks of the world,” says Columbia University law professor Eric Talley. “The problem is that there’s only one of them.”

Lesser tycoons might be disciplined by the capital markets or public opinion. Not Musk. When his strident stance against content moderation sent advertisers fleeing X, he responded with an antitrust lawsuit alleging an illegal boycott.

Nor has he lost support among retail investors—"deacons in the church of Musk,” in Talley’s words—even as Tesla’s shares stagnated. The worshipful fanbase is something he can “weaponize in circumstances that most other billionaires can’t,” Talley says. When Delaware Chancellor Kathaleen St. J. McCormick struck down his pay package, Musk’s diatribes effectively unleashed thousands of his defenders on her.

Delaware’s Chancery Court, where McCormick is chief judge, is a court of equity with the discretion to look beyond the thick red lines of the law. That means it already offers flexibility for a special case like Musk. Even applying that framework, McCormick found his pay package went too far.

His effort to overturn that ruling at the shareholder ballot “seems to be saying, ‘I don’t think those rules should apply to me, either,” Talley says.

Meanwhile, in Brazil, Musk collided with a crusader who seemed to make up the rules as he went along. Cracking down on even loathsome political speech wouldn’t fly in the US. Neither would banning X. If we’re choosing a side to err on, “states are scarier than people,” as Chatman put it.

But the law can only bend so far before it breaks.