Delaware Supreme Court Explains Delaware’s Intermediate Forum Non Conveniens Standard Under Gramercy
GXP Capital, LLC v. Argonaut Manufacturing Services, Inc. et al., Nos. 247, 2020 and 248, 2020 (Del. May, 20, 2021)
Delaware has three standards for forum non conveniens motions. The two more commonly addressed are Cryo-Maid, which favors first-filed Delaware actions, and McWane, which favors first-filed litigation pending elsewhere. The third standard, Gramercy, consists of neutrally balancing the well-established forum non conveniens factors as between a later-filed Delaware action and another available forum. This decision clarifies Gramercy in the context of a Delaware action stayed in favor of an available alternate jurisdiction where no action was yet pending.
In GXP, plaintiff, a Nevada limited liability company, sued a group of related Delaware entities with their principal places of business in California. Plaintiff filed first in a Nevada federal court, and then in a California federal court. Those suits were dismissed for lack of personal jurisdiction and lack of diversity jurisdiction, respectively. Plaintiff then sued in the Delaware Superior Court. Defendants moved to dismiss the Delaware action on forum non conveniens grounds, arguing that plaintiff’s suit should be brought in California state court, which had both personal and subject matter jurisdiction over the defendants. Applying the Gramercy test, the Superior Court found that the forum non convienens factors tipped in favor of staying the Delaware action so that plaintiff could file a fourth suit in California state court. In reaching this decision, the Court noted that most of the parties had connections to California, and that all of the third-party witnesses were located outside of Delaware and could not be compelled to appear in Delaware court.
Plaintiff appealed and, in addition to clarifying the application of the forum non conveniens factors in this context, the Supreme Court answered two interlocutory questions that were certified by the trial court. First, it was appropriate for the trial court to assess the comparative burdens of litigating in the opposing jurisdictions under the Gramercy framework even when a case has not been filed in the foreign jurisdiction, but that jurisdiction has personal and subject matter jurisdiction over the parties and the case. Second, the trial court had the discretion to grant a stay under Gramercy, rather than a dismissal, especially where a dismissal might create additional procedural or statute of limitation hurdles for the plaintiff.Share