WILMINGTON, DE (February 7, 2024) The law firm of Reger Rizzo & Darnall, in what is being called a significant decision by the Supreme Court last week, was on the prevailing side in an appeal that reverses a fee award by the Court of Chancery. That award had entitled Appellees to more than $1.47 million in legal fees under the common benefit doctrine. The legal fees came from lawsuits seeking increased funding for Delaware’s public schools filed against multiple Delaware public officials in their official capacities, some of whom were responsible for tax collection in Delaware’s three counties.  

The decision upholds precedence that prevents “fee-shifting” in public benefit litigation involving government entities, political subdivisions, and municipalities, and supports Delaware’s longstanding following of the “American Rule.” The American Rule says two opposing sides in a legal matter must pay their own attorney fees, regardless of who wins the case – unless they fall within one of the clearly defined exceptions to the Rule.

Reger Rizzo & Darnall attorney and City Solicitor for Newark, Delaware, Paul E. Bilodeau, represented the Delaware League of Local Governments (DLLG) in submitting an Amicus Brief, arguing without a General Assembly law, there should be no fee-shifting permitted under the American Rule for non-taxpayer public interest litigation. “Our appeal presented a very important issue for Delaware, and we are pleased that the Supreme Court agreed,” said Bilodeau. “In almost all instances, it is for the Legislature, and not the Court, to determine when fee-shifting is appropriate for public interest cases against the government.”

“The decision is a victory for all Delaware governmental entities and the taxpayers who shouldn’t have to pay opposing legal fees regardless of the decision,” said Kevin J. Spence, PhD., Executive Director of DLLG. “The earlier Court of Chancery decision put all Delaware municipalities at risk for awards of attorneys’ fees under the common benefit doctrine for public interest-related litigation; we are pleased that the Court ruled appropriately.”

New Castle County Executive Matt Meyer also expressed his support for the decision. “We are proud that we just saved taxpayers $1.48 million, a substantial portion of which would have been paid to out of state New York lawyers. This decision, from Delaware’s highest court, means countless public funds will be at considerably less risk in future lawsuits against towns, cities, counties, and local governments across Delaware,” said Meyer.

The DLLG serves Delaware’s 57 municipalities and three counties and seeks to improve everyday life for all Delawareans and to be a unified voice for Delaware’s local governments, including cities, towns, and counties.

###

For more than 30 years, Reger Rizzo & Darnall have been committed to providing dedicated, aggressive, and practical legal advice to individuals, small businesses, charitable and non-profit organizations, and fortune 500 companies alike. With seven offices and more than 50 attorneys, the firm provides services across a wide range of practice areas, including business services, commercial litigation, real estate, estates and trusts, employment, insurance coverage, and utilities. The firm was recently named to The Legal Intelligencer’s Watch List in recognition of its continued growth and national reach.