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ATP Tour, Inc. v. Deutscher Tennis Bund

Supreme Court of Delaware

May 8, 2014

ATP TOUR, INC., ETIENNE DE VILLIERS, CHARLES PASARELL, GRAHAM PEARCE, JACCO ELTINGH, PERRY ROGERS, and IGGY JOVANOVIC, Appellants,
v.
DEUTSCHER TENNIS BUND (GERMAN TENNIS FEDERATION), ROTHENBAUM SPORT GMBH, and QATAR TENNIS FEDERATION, Appellees

Submitted February 19, 2014

Motion for Rehearing filed 5/7/14

Denied 5/9/14.

Case Closed May 27, 2014.

Certification of Questions of Law from the United States District Court for the District of Delaware. C.A. No. 07-178 (GMS).

Philip Trainer, Jr., Esquire, Toni-Ann Platia, Esquire, Ashby & Geddes, Wilmington, Delaware; Of Bradley I. Ruskin, Esquire (argued), Charles S. Sims, Esquire, Jennifer R. Scullion, Esquire and Jordan B. Leader, Esquire, Proskauer Rose LLP, New York, New York for Appellants.

David M. Powlen, Esquire and Kevin G. Collins, Esquire, Barnes & Thornburg LLP, Wilmington, Delaware; Of Robert D. MacGill, Esquire (argued), Peter J. Rusthoven, Esquire and Hamish S. Cohen, Esquire, Barnes & Thornburg LLP, Indianapolis, Indiana for Appellees.

Before STRINE, Chief Justice,[*] HOLLAND, BERGER, JACOBS and RIDGELY, Justices, constituting the Court en Banc.

OPINION

Page 555

BERGER, Justice.

This Opinion constitutes the Court's response to four certified questions of law concerning the validity of a fee-shifting provision in a Delaware non-stock corporation's bylaws. The provision, which the directors adopted pursuant to their charter-delegated power to unilaterally amend the bylaws, shifts attorneys' fees and costs to unsuccessful plaintiffs in intra-corporate litigation. The United States District Court for the District of Delaware found that the bylaw provision's validity was an open question under Delaware law and certified four questions to this Court, asking it to decide whether, and under what circumstances, such a provision is valid and enforceable. Although we cannot directly address the bylaw at issue, we hold that fee-shifting provisions in a non-stock corporation's bylaws can be valid and enforceable under Delaware law. In addition, bylaws normally apply to all members of a non-stock corporation regardless of whether the bylaw was adopted before or after the member in question became a member.

FACTUAL AND PROCEDURAL BACKGROUND

The following undisputed facts are drawn from the District Court's Certification of Questions of Law.[1] ATP Tour, Inc. (ATP) is a Delaware membership corporation that operates a global professional men's tennis tour (the Tour). Its members include professional men's tennis players and entities that own and operate professional men's tennis tournaments. Two of those entities are Deutscher Tennis Bund (DTB) and Qatar Tennis Federation (QTF, and collectively, the Federations). ATP is governed by a ...


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