The Delaware Court of Chancery has approved an attorney fee award of $3 million in a case where plaintiffs were successful in knocking out a provision in three internet retailers' certificates of incorporation limiting jurisdiction in securities cases to the federal courts.

In Sciabacucchi v. Salzberg, the court said plaintiffs counsel prevailed in “relatively complex” litigation.

Vice Chancellor Travis Laster was ruling on attorney fees in the aftermath of his decision on the merits last December. Plaintiffs counsel asked for a $3 million fee award while defendants said they were owed no more than $365,000.

Laster said it was reasonable to award $3 million in fees for the plaintiffs counsel's 266.4 hours litigating the merits and for the anticipated time that will be required to defend the award.

“A bit of long division shows that a fee award of $3 million would work out to $11,262.26 per hour, which sounds excessive,” Laster wrote. “But that headline figure only tells part of the story. Because the defendants intend to appeal the Merits Decision, plaintiff's counsel can expect to expend approximately the same number of hours litigating before the Delaware Supreme Court. Assuming a total investment of 500 hours, an award of $3 million works.”

Laster also credited the lawyers with developing new arguments.

“The relatively low number of hours that plaintiff's counsel incurred in this case also fails to reflect the overall value of counsel's investment, because they first developed the arguments that prevailed in this case during the course of other litigation,” he said.

Weighing five factors detailed under the 2012 case Americas Mining v. Theriault, Laster looked at the result achieved by counsel, as well as the time and effort expended, complexity of the case, the “standing and ability” of counsel, and contingent factors.

“In this case, the plaintiff achieved a significant and substantive result by successfully invalidating the Federal Forum Provisions,” Laster wrote. “Because the value of the relief is non-quantifiable, the plaintiff looked to precedent to determine an appropriate fee.”

After the lawsuit was filed, nine companies dropped the federal forum mandate, Laster said.

In an analogous case from 2012, then-Chancellor Leo Strine mediated talks between a number of companies that dropped forum-limiting bylaws in a case brought by an institutional investor. Strine called a request for $3.6 million reasonable given they had been handed a victory by defendants in a case over a “hotly contested, open issue.”

The plaintiffs in Sciabacucchi achieved a similar result as those secured in the case before Strine, which was captioned In re Exclusive Forum Provision Mootness Fee Petitions, Laster observed. But  “practically, however, the plaintiff in this case achieved something more significant” in that they got a result on the merits, and not an action from defendants rendering the case moot.

Listed as counsel for the plaintiffs were Kurt Heyman and Melissa Donimirski of Heyman Enerio Gattuso & Hirzel in Wilmington and Jason Leviton and Joel Fleming of Block & Leviton in Boston.

Heyman declined to make a comment on the decision.

Listed as defense counsel for 13 directors and nominal defendants Stitch Fix and Roku were Wilmington-based William Chandler, Randy Holland, Bradley Sorrels and Lindsay Kwoka Faccenda, and Palo Alto, California-based Boris Feldman and David Berger of Wilson Sonsini Goodrich & Rosati.

Listed as defense counsel for seven directors and nominal defendant Blue Apron Holdings  were Catherine Dearlove and Sarah Andrade of Richards, Layton & Finger in Wilmington; New York-based Michael Bongiorno and Boston-based Timothy Perla of Wilmer Cutler Pickering Hale and Dorr.

Chandler did not immediately respond to a message seeking comment.