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Court of Chancery Grants Motion To Stay Litigation Pending Resolution Of Prior Filed Case In District Court

Posted In Business Torts
Davis Int'l, LLC v. New Start Group Corp., C.A. No. 1297-N, 2005 WL 2899683 (Del. Ch. Oct. 27, 2005). Defendants moved to stay Court of Chancery action pending resolution of prior filed district court case. In 2000, Plaintiffs brought action against some of the Defendants in the Southern District of New York. In 2003, the court dismissed the case on forum non conveniens grounds. That decision was affirmed on appeal. In 2004, Plaintiffs filed a similar action in the Court of Chancery against Defendants. Defendants removed the case to the Delaware district court and moved to dismiss on the grounds of forum non conveniens and estoppel based on the prior decision of the New York district court. Plaintiffs then amended the federal complaint to remove non-federal claims and re-filed the state claims, plus new state claims, in the Court of Chancery. Defendants moved to stay the Court of Chancery action pending resolution of the district court action. The Court of Chancery granted the defendants' motion. The Court found that the action pending in district court was the first-filed action, involving similar parties and issues and the district court was capable of providing prompt and complete justice. Although Plaintiffs had initially filed the action in the Court of Chancery, they asserted federal claims and subjected themselves to removal to the district court.