In The News . . . . Massachusetts Appellate Court Decides In-House Counsel Work Can Be Recovered In Fee Proceeding And Delaware Senate Bill Pending To Undo Recent ATP Tours Bylaw Decision With Respect To Stock Corporations.

 

     Our colleagues at NALFA recently posted on one case and a subsequent development we now share with you.

Massachusetts Appellate Court Finds In-House Counsel Fees Are Recoverable.

     In Holland v. Jackmann, Mass. App. No. 13-P-0280 (May 14, 2014), an appellate court determined that in-house counsel work could be recoverable as attorney’s fees for the defense after it prevailed in a Massachusetts fair trade practice act case. It found no reason to find any difference between a company “incurring” fees to outside counsel as compared to having to pay for the in-house work of corporate attorneys. In this regard, Massachusetts is similar to California, which finds in-house attorneys can be compensated and are not within the ambit of the Trope prohibition. (See PLCM Group, Inc. v. Drexler, 22 Cal.4^th 1084, 1093 (2000) [one of our Leading Cases]; Soni v. Wellmike Enterprise Co. Ltd., a recent 2014 Second District case discussed in our March 26, 2014 post.)

Delaware Senate Bill Pending to Partially Abrogate ATP Tours Decision.

     In our May 31, 2014 post, we discussed ATP Tours, Inc. v. Deutscher Tennis Bund, a recent Delaware Supreme Court decision which upheld the validity of a Delaware company’s bylaw indicating that a shareholder could be liable for attorney’s fees and costs should the shareholder not prevail in a shareholder suit. Well, this has drawn some quick action in Delaware through the introduction of Senate Bill 236. This bill would add new section 331 to Title 8 of the Delaware General Corporation Law to prohibit stock corporations from shifting fees and costs onto shareholders in such suits. However, private companies not issuing stock (non-stock corporations) could still have such a prohibitive bylaw under the pending bill.