ATP is a very management friendly opinion. The basic holding that fees can be shifted will reduce the number of actions filed by shareholders.
Potentially even more momentous, the Court's reading of Section 109 entails an almost unlimited interpretation of the "business of the corporation." Anything that can be done by contract can be done by bylaw as long as it involves the company's business. Thus, a bylaw could presumably require a shareholder to waive the right to a jury trial since these provisions routinely appear in contracts.
Nonetheless, the broad holding, once it moves to the traditional for profit corporate context (recall that ATP involved a non-stock corporation), will likely be narrowed (or the Delaware legislature will overturn portions of the decision, as it did with respect to CA v. AFSCME). Indeed, the Court left open this possibility by noting that the bylaw at issue "appear[s] to satisfy" Section 109. Appearances can change.
There are a couple of reasons to expect a change in appearance.
First, the courts have already thrown up substantial barriers to shareholder actions. As a result, even meritorious cases are routinely thrown out because of pleading burdens. Given the high risk of dismissal, a fee shifting bylaw will likely prevent shareholders from bringing legitimate claims.
Broadly written the provision could also shift fees in appraisal cases. Given the uncertainty of the determinations in these cases, a fee shifting provision applicable where shareholders did not "substantially achieve" the full remedy sought could effectively eliminate the statutory right. This consequence will cause shareholders to seek to have the limit overturned. To the extent it does not happen in Delaware, shareholders will have to seek a federal remedy. Preemption in short.
Second, Delaware thrives on shareholder litigation. It fills the hotels, compensates the bar, and allows the courts to determine national corporate law. The management friendly nature of the Delaware courts has already caused a substantial number of cases to move to other jurisdictions. Forum selection bylaws are an attempt to stem the outflow. To the extent that Delaware courts are willing to rigorously enforce fee shifting bylaws, shareholders will have even more incentive to file suit outside of Delaware. Courts in other jurisdictions would presumably be more likely to narrow the application of these bylaws or invalidate them on public policy grounds.
Delaware, therefore, has an incentive to, and will, narrow the import of the ATP holding.
Nonetheless, the decision is instructive. As we have noted before, there was a time (the 1980s) when shareholders could occasionally win a major governance case (Van Gorkom) or at least not entirely lose (Unocal). Those days are, however, over. It is, in the end, an unfortunate change. Federal preemption comes at a cost. Yet the decisions of the Delaware courts are causing the benefits of federal preemption to outweigh the costs.