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OP here.
I'm familiar with the North Broadway Estates decision holding that a Board may not amend House Rules to create fines. But, have other courts reached the same decision? Did this rule survive Levandusky?
Also -- In my case, the Board would not be using its authority to amend the House Rules, but the authority to amend the By-Laws. It's one thing to say that a Board's authorization to amend House Rules is not sufficient to allow the Board to impose fines. But the By-Laws are one of the core governing documents. If the Board is given the authority to amend it, why can't it exercise that authority under the BJR to impose reasonable fines?
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No, Levandusky doesn't give the board the authority to impose fines. One of the prongs of Levandusky is that the Business Judgment Rule (BJR) only protects the board's actions if they are acting within the scope of their authority. They can't create new powers they don't have.
It's true that the by-laws are a core governing document, but they don't trump the lease. A board's inability to impose monetary fines is a special case of a larger issue: the board can't change any material term of the Proprietary Lease. That can only be done by shareholder vote, in the case of most leases.
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