Elon Musk has to pay three fired Twitter executives nearly $200 million each to settle a lawsuit they’d filed against him and his company last year.
That’s about twice as much as the $75 million the company paid Twitter CEO Jack Dorsey in 2016.
That’s a result of the U.S. law known as a “triple damages cap.” The three employees are entitled to triple the size of any award they receive — including punitive damages, attorneys fees and “such other relief as the court deems appropriate.”
Lawsuits based on those caps have been popular in the tech industry for decades. The idea is simple: There’s a cap on how much a plaintiff can get from a defendant, and the more the defendant pays to the plaintiffs, the greater the number of times the trial court can find in their favor and award a larger amount of damages to the plaintiff.
The “cap” in this case is the maximum amount that a plaintiff can sue the defendant for in a lawsuit. When a defendant violates the cap, the trial court is allowed to award the plaintiff triple damages of the amount the defendant has paid them. But the court is not allowed to award a larger sum because after one time the defendant’s liability is paid, the plaintiff is not allowed to win more than double the first amount.
In the lawsuit, the plaintiffs sought $150 million in damages, citing the suit brought by Amazon’s Bezos which was settled in 2017 for $180 million. In the case of Facebook’s Libra lawsuit, plaintiffs have argued the amount of damages was twice what was actually owed.
Elon Musk’s case against Twitter is different. His lawyers sought $210 million in total damages, claiming that the company’s “unlawful conduct caused damage in excess of $200 million.”
In court during the case, Musk’s lawyers argued that the first $105 million in damages should be paid to the three of the fired executives — the $10 million each they were awarded in the three previous cases brought by them. But the lawyers want the other $105 million to be paid to them as part of his settlement, because he says