It's quite a bit of work, todays WSJ, on the anatomy of a Plaintiff Securities Class Action Lawyer Lawsuit:
"The suit, filed in 2018, alleged that Tesla's chief executive controlled the approval process and that the board misled investors, who later approved it. Musk has said he didn't dictate the terms of his pay plan.
The judge in the case, Chancellor Kathaleen McCormick, found that the process for securing approval of Musk's compensation was "deeply flawed," and agreed to rescind the CEO's package, which was valued at a maximum of $55.8 billion.
The case was originally filed by lawyers from Friedman Oster & Tejtel and Delaware-based Andrews & Springer, which also represents Tornetta in a separate lawsuit that began in 2019.
The lawyers brought in Varallo and several others from his firm in 2021. At the time, they had just survived a motion to dismiss by Tesla's board of directors, raising the likelihood that the case could go to trial. The original legal team recognized it was going to be a massive undertaking, said David Tejtel, principal at Friedman Oster & Tejtel, which is based in New York and specializes in corporate-misconduct cases in Delaware.
More than a week before the trial, the entire legal team essentially moved into Bernstein Litowitz's office and its trial war room to work around the clock. "That was home for us outside the courtroom," Tejtel said.
As a corporate-defense lawyer for 36 years at Delaware's largest firm, including a time as president of the firm, Varallo litigated hundreds of complex business disputes throughout the U.S., including in Delaware. He represented Goldman Sachs in a challenge to its compensation structure, and served as lead counsel for News Corp and 21st Century Fox in shareholder litigation. News Corp is the parent company of Dow Jones, publisher of The Wall Street Journal.
In 2019, the self-described "blue-collar kid" from Philadelphia made an uncommon decision for a well-established defense lawyer: to start working for plaintiffs.
"This was an opportunity in a very entrepreneurial way, to do something entirely new, to work with people that I did know, but in an area that would require some new learning on my part," he said in a 2021 podcast interview .
In his free time, Varallo said he enjoys goose and duck hunting and has been "a game hunter for a long, long time." An elk from Northern Colorado and a mule deer from Mexico trophy hang in his office in Wilmington.
He also plays poker. "We litigate in a world where we have imperfect information, and you play competitive poker in a world where you've got imperfect information," he said on a podcast from The Deal. "There's some, I think, overlap between the two."
It isn't uncommon for a plaintiff's law firm to seek out a shareholder willing to serve as a lead plaintiff, said John Jasnoch, a partner at law firm Scott+Scott, who wasn't involved in the Musk case. Such plaintiffs don't always play a big role in the case, but can receive compensation if a case is successful.
The plaintiff "is standing in the shoes of the company," Jasnoch said, and sues its board or executives for actions that harmed the company. If the suit is successful, the financial benefits go to the company, while the plaintiff typically receives a small incentive award.
Tornetta, who didn't respond to requests for comment, previously worked for a company that created aftermarket audio equipment for cars and other automotive companies, according to public records and an archived version of his LinkedIn page.
Tejtel praised Tornetta for not backing down during the litigation despite some people making negative online statements about the case. "It took a ton of courage to step forward and stay in the game," Tejtel said.
Lawyers have the potential to score a much bigger bounty, said Renee Zaytsev, a partner at law firm Boies Schiller Flexner.
In Delaware, a judge has the final say on the fees lawyers receive. The fees are typically a percentage of the benefit the company receives, Zaytsev said, and a factor is the stage at which the case is resolved.
In the Musk case, the judge directed both sides to meet and come to an agreement on court costs and who pays them, as well as the precise language of a final order in the case, Varallo said. Tesla's board of directors would then have 30 days to file an appeal once that order is entered, he said."
