American rule in Delaware

2026ATTORNEY’S FEES Delaware follows the American rule which states that “[l]itigants are normally responsible for paying their own litigation costs.” 90 An exception to this rule is the bad faith exception, which requires the party seeking to shift fees to satisfy “the stringent evidentiary burden of producing ‘clear evidence’ of bad faith.” 91 None of the parties have engaged in conduct that would justify an award of bad faith fee shifting. 90 See Mahani v. Edix Media Gp., Inc., 935 A.2d 242, 245 (Del. 2007). 91 Dearing v. Mixmax, Inc., 2023 WL 2632476 , at *5 (Del.

2026ATTORNEY’S FEES Delaware follows the American rule which states that “[l]itigants are normally responsible for paying their own litigation costs.” 90 An exception to this rule is the bad faith exception, which requires the party seeking to shift fees to satisfy “the stringent evidentiary burden of producing ‘clear evidence’ of bad faith.” 91 None of the parties have engaged in conduct that would justify an award of bad faith fee shifting. 90 See Mahani v. Edix Media Gp., Inc., 935 A.2d 242, 245 (Del. 2007). 91 Dearing v. Mixmax, Inc., 2023 WL 2632476 , at *5 (Del.

2025Co. v. Dobler, 880 A.2d 206, 227 (Del. 2005)). 124 Tigani v. Tigani, 2021 WL 1197576 , at *25 (Del.

2025Co. v. Dobler, 880 A.2d 206, 227 (Del. 2005)). 124 Tigani v. Tigani, 2021 WL 1197576 , at *25 (Del.

2025C. § 3584. 122 Under the American rule “each party is generally expected to pay its own attorneys’ fees.” 123 A court may shift fees under limited circumstances “for bad faith conduct ‘to deter abusive litigation and to protect the integrity of the judicial process.’” 124 This Court does not, however, lightly shift fees under the bad faith exception.125 “A party seeking to shift fees must satisfy the stringent evidentiary burden of producing clear evidence of bad faith.”126 “To capture the sorts of vexatious activities that the bad-faith exception is intended to address, this court employs the

2025C. § 3584. 122 Under the American rule “each party is generally expected to pay its own attorneys’ fees.” 123 A court may shift fees under limited circumstances “for bad faith conduct ‘to deter abusive litigation and to protect the integrity of the judicial process.’” 124 This Court does not, however, lightly shift fees under the bad faith exception.125 “A party seeking to shift fees must satisfy the stringent evidentiary burden of producing clear evidence of bad faith.”126 “To capture the sorts of vexatious activities that the bad-faith exception is intended to address, this court employs the

2021Co. v. Dobler, 880 A.2d 206, 227 (Del. 2005). 3 Scion Breckenridge Managing Member, LLC v. ASB Allegiance Real Estate Fund, 68 A.3d 665, 687 (Del. 2013) (quoting Burge v. Fidelity Bond & Mortg.

2021Co. v. Dobler, 880 A.2d 206, 227 (Del. 2005). 3 Scion Breckenridge Managing Member, LLC v. ASB Allegiance Real Estate Fund, 68 A.3d 665, 687 (Del. 2013) (quoting Burge v. Fidelity Bond & Mortg.

2024Right to Choose/NARAL v. Johnson, 986 P.2d 450 (N.M. 1999) (declining to adopt the private attorney general doctrine)); Jones v. Muir, 515 A.2d 855, 862 (Pa. 1986) (“Since public interest litigation is not one of the traditional, judicially created bases for an award of attorney’s fees, and the General Assembly has chosen to govern the awarding of attorney’s fees, we therefore conclude that the power to authorize awards of attorney’s fees under the private attorney-general theory, rests exclusively in the General Assembly.”); Providence Journal Co. v. Mason, 359 A.2d 682, 688 (R.I. 1976) (“We

2024Right to Choose/NARAL v. Johnson, 986 P.2d 450 (N.M. 1999) (declining to adopt the private attorney general doctrine)); Jones v. Muir, 515 A.2d 855, 862 (Pa. 1986) (“Since public interest litigation is not one of the traditional, judicially created bases for an award of attorney’s fees, and the General Assembly has chosen to govern the awarding of attorney’s fees, we therefore conclude that the power to authorize awards of attorney’s fees under the private attorney-general theory, rests exclusively in the General Assembly.”); Providence Journal Co. v. Mason, 359 A.2d 682, 688 (R.I. 1976) (“We

2024Co. v. Wilderness Soc'y, 421 U.S. 240, 245 (1975) (noting that “the general ‘American rule’ [is] that the prevailing party may not recover attorneys’ fees as costs or otherwise” unless there is an applicable statutory authorization for such an award or the award falls within an exception to the American rule). 29

2024Co. v. Wilderness Soc'y, 421 U.S. 240, 245 (1975) (noting that “the general ‘American rule’ [is] that the prevailing party may not recover attorneys’ fees as costs or otherwise” unless there is an applicable statutory authorization for such an award or the award falls within an exception to the American rule). 29

2024Right to Choose/NARAL v. Johnson, 986 P.2d 450 (N.M. 1999) (declining to adopt the private attorney general doctrine)); Jones v. Muir, 515 A.2d 855, 862 (Pa. 1986) (“Since public interest litigation is not one of the traditional, judicially created bases for an award of attorney’s fees, and the General Assembly has chosen to govern the awarding of attorney’s fees, we therefore conclude that the power to authorize awards of attorney’s fees under the private attorney-general theory, rests exclusively in the General Assembly.”); Providence Journal Co. v. Mason, 359 A.2d 682, 688 (R.I. 1976) (“We

2024Right to Choose/NARAL v. Johnson, 986 P.2d 450 (N.M. 1999) (declining to adopt the private attorney general doctrine)); Jones v. Muir, 515 A.2d 855, 862 (Pa. 1986) (“Since public interest litigation is not one of the traditional, judicially created bases for an award of attorney’s fees, and the General Assembly has chosen to govern the awarding of attorney’s fees, we therefore conclude that the power to authorize awards of attorney’s fees under the private attorney-general theory, rests exclusively in the General Assembly.”); Providence Journal Co. v. Mason, 359 A.2d 682, 688 (R.I. 1976) (“We

2024Kuramo Post-Trial Opening Br. at 145; McGowan v. Empress Ent., Inc., 791 A.2d 1, 4 (Del.

2024Kuramo Post-Trial Opening Br. at 145; McGowan v. Empress Ent., Inc., 791 A.2d 1, 4 (Del.

2024Ch. 1943))); Tandycrafts, Inc. v. Initio P’rs, 562 A.2d 1162, 1164 (Del. 1989) (describing the American rule). 44 common benefit involved the creation of a common fund. 176 In a common fund case, counsel’s fees are paid from the fund.177 This creates a conflict between counsel and their clients—“[t]he more the attorneys receive, the less goes to the [client].”178 The same conflict arises indirectly when the corporation receives a benefit.

2024Ch. 1943))); Tandycrafts, Inc. v. Initio P’rs, 562 A.2d 1162, 1164 (Del. 1989) (describing the American rule). 44 common benefit involved the creation of a common fund. 176 In a common fund case, counsel’s fees are paid from the fund.177 This creates a conflict between counsel and their clients—“[t]he more the attorneys receive, the less goes to the [client].”178 The same conflict arises indirectly when the corporation receives a benefit.

2018Transportation in refusing to accept defense when tendered without obtaining a prior ruling on its obligation to defend.”). 121 Town Bank v. City Real Estate Dev., LLC, 793 N.W.2d 476, 484 (Wis. 2010) (quoting Huml v. Vlazny, 716 N.W.2d 807, 820 (Wis. 2006)).

2018Transportation in refusing to accept defense when tendered without obtaining a prior ruling on its obligation to defend.”). 121 Town Bank v. City Real Estate Dev., LLC, 793 N.W.2d 476, 484 (Wis. 2010) (quoting Huml v. Vlazny, 716 N.W.2d 807, 820 (Wis. 2006)).

2018Hutton Gp., Inc., 681 A.2d 1039, 1044 (Del. 1996) (“Pursuant to the American Rule, prevailing litigants are responsible for the payment of their own attorney’s fees.” (footnote omitted)). 75 See El Paso Pipeline GP Co., L.L.C. v. Brinckerhoff, 152 A.3d 1248 (Del. 2016). 33 derivative claims becomes irrelevant.”76 This is one of those cases.

2018Hutton Gp., Inc., 681 A.2d 1039, 1044 (Del. 1996) (“Pursuant to the American Rule, prevailing litigants are responsible for the payment of their own attorney’s fees.” (footnote omitted)). 75 See El Paso Pipeline GP Co., L.L.C. v. Brinckerhoff, 152 A.3d 1248 (Del. 2016). 33 derivative claims becomes irrelevant.”76 This is one of those cases.

2018“The American Rule provides that parties to litigation typically are responsible for their own attorney fees.”119 Under Wisconsin law, if parties contract for the award of attorneys’ fees, then the court may deviate from the American rule. 120 Courts “construe the contract language according to its plain or ordinary meaning. ‘If the contract is unambiguous, [the] attempt to determine the parties’ intent ends with the four corners of the contract . . . .’” 121 117 Cerberus Int’l , Ltd. v. Apollo Mgmt., L.P., 794 A.2d 1141, 1150 (Del. 2002). 118 I do not address Ecolab’s reasonableness argument

2018“The American Rule provides that parties to litigation typically are responsible for their own attorney fees.”119 Under Wisconsin law, if parties contract for the award of attorneys’ fees, then the court may deviate from the American rule. 120 Courts “construe the contract language according to its plain or ordinary meaning. ‘If the contract is unambiguous, [the] attempt to determine the parties’ intent ends with the four corners of the contract . . . .’” 121 117 Cerberus Int’l , Ltd. v. Apollo Mgmt., L.P., 794 A.2d 1141, 1150 (Del. 2002). 118 I do not address Ecolab’s reasonableness argument

2018Transportation in refusing to accept defense when tendered without obtaining a prior ruling on its obligation to defend.”). 121 Town Bank v. City Real Estate Dev., LLC, 793 N.W.2d 476, 484 (Wis. 2010) (quoting Huml v. Vlazny, 716 N.W.2d 807, 820 (Wis. 2006)).

2018Transportation in refusing to accept defense when tendered without obtaining a prior ruling on its obligation to defend.”). 121 Town Bank v. City Real Estate Dev., LLC, 793 N.W.2d 476, 484 (Wis. 2010) (quoting Huml v. Vlazny, 716 N.W.2d 807, 820 (Wis. 2006)).

2018First, there are some cases, typically involving closely held entities, in which “the relationships among the parties may be so simple and the circumstances so clear-cut that the distinction between direct and 74 See, e.g., McNeil v. McNeil, 798 A.2d 503, 514 (Del. 2002) (“The American rule, which is of general application, requires each side to bear the cost of its attorney’s fees.”); Goodrich v. E.F.

2018First, there are some cases, typically involving closely held entities, in which “the relationships among the parties may be so simple and the circumstances so clear-cut that the distinction between direct and 74 See, e.g., McNeil v. McNeil, 798 A.2d 503, 514 (Del. 2002) (“The American rule, which is of general application, requires each side to bear the cost of its attorney’s fees.”); Goodrich v. E.F.

2017Under the “American Rule,” courts “do not award attorneys’ fees to a prevailing party absent some special circumstance.”252 The “American Rule would be eviscerated if every decision holding defendants liable for fraud or the like also awarded attorney’s fees.”253 The “quite narrow exception” to the American rule instead “is applied in only the most egregious instances of fraud or overreaching.”254 251 Pls.’ Post-Trial Reply Br. 21. 252 See Arbitrium (Cayman Is.) Handels AG v. Johnston, 705 A.2d 225, 231 (Del.

2017Under the “American Rule,” courts “do not award attorneys’ fees to a prevailing party absent some special circumstance.”252 The “American Rule would be eviscerated if every decision holding defendants liable for fraud or the like also awarded attorney’s fees.”253 The “quite narrow exception” to the American rule instead “is applied in only the most egregious instances of fraud or overreaching.”254 251 Pls.’ Post-Trial Reply Br. 21. 252 See Arbitrium (Cayman Is.) Handels AG v. Johnston, 705 A.2d 225, 231 (Del.

2015See Fleischmann Distilling Corp. v. Maier Brewing Co., 386 U.S. 714, 718 , 87 S.Ct. 1404 , 18 L.Ed.2d 475 (1967) ("In support of the American rule, it has been argued that since litigation is at best uncertain one should not be penalized for merely defending or prosecuting a lawsuit, and that the poor might be unjustly discouraged from instituting actions to vindicate their rights if the penalty for losing included the fees of their opponents’ counsel.”); 20 C.J.S.

2015See Fleischmann Distilling Corp. v. Maier Brewing Co., 386 U.S. 714, 718 , 87 S.Ct. 1404 , 18 L.Ed.2d 475 (1967) ("In support of the American rule, it has been argued that since litigation is at best uncertain one should not be penalized for merely defending or prosecuting a lawsuit, and that the poor might be unjustly discouraged from instituting actions to vindicate their rights if the penalty for losing included the fees of their opponents’ counsel.”); 20 C.J.S.

2008Nagy v. Bistricer, 770 A.2d 43, 64-65 (Del.Ch.2000); see also Donald J.

2008Nagy v. Bistricer, 770 A.2d 43, 64-65 (Del.Ch.2000); see also Donald J.

2002Brice v. State Dept. of Correction, 704 A.2d 1176, 1178 (Del.1998).

2002Brice v. State Dept. of Correction, 704 A.2d 1176, 1178 (Del.1998).

1978See National Football League v. Governor of State of Delaware, D.Del., 435 F.Supp. 1372, 1382-3 (1977).