Under Delaware law, director actions are twice-tested: first for legal authorization under a company's organizational documents or positive law, and second under equitable fiduciary principles. A company's organizational documents may only eliminate or modify fiduciary duties and the attendant judicial standards of review to the extent expressly permitted by the Delaware General Assembly. When director actions affect an election of directors or a stockholder vote on matters of corporate control, the board's actions must satisfy enhanced scrutiny under the legal test set forth in Blasius Industries v. Atlas.

In Totta v. CCSB Financial, No. 2021-0173-KSJM (Del. Ch. May 31, 2022), the Delaware Court of Chancery held that a board's action, invalidating stockholder votes in a proxy contest, did not comply with the voting limitation in the company's charter, and interfered with the effective exercise of a stockholder vote in a contested election of directors under Blasius. By way of background, the board applied a voting limitation set forth in the company's charter that prohibited a stockholder and those stockholders acting in concert with one another from exercising more than 10% of the company's stock voting power in an election of directors. The board instructed the inspector of elections not to count the insurgent stockholder's votes as well as the votes of other stockholders, with whom the insurgent was allegedly acting in concert, in excess of 10% of the company's stock voting power. As a result of the board's action, the alleged insurgent stockholder nominees lost the proxy contest.