Opinion ID: 2310956
Heading Depth: 1
Heading Rank: 3

Heading: Court of Chancery's Analysis

Text: The Court of Chancery analyzed each of the factors relevant to this case. First, since plaintiff conceded that Canadian law governs the substantive issues in this case, the Court of Chancery found that the choice of law factor weighed in favor of Logic's motion to dismiss this action brought in Delaware. Second, regarding the relative ease of access to sources of proof, the Court of Chancery pointed out that none of the sources is located in Delaware. All are either in Canada or in California or both. Logic failed to identify any witnesses it intended to call at trial or to demonstrate that any of them would suffer overwhelming hardship if this action is litigated in Delaware. Accordingly, the Court of Chancery concluded that there was no clear advantage nor clear disadvantage in access to evidence by litigating in any one of the three jurisdictions competent to hear this matter. Third, the Court of Chancery found that the availability of compulsory process for procuring the testimony of witnesses weighed in favor of Logic because Canadian courts would find it easier to serve process on the necessary witnesses in Canada. The Court of Chancery did not speak to the identical difficulties faced by Canadian courts serving process on the necessary witnesses in California, however. We hold that these mirror-image difficulties cancel out each other. Accordingly, as to service of process, there is no clear advantage nor clear disadvantage to litigating in Canada, Delaware or California. Fourth, the Court of Chancery noted that there is a later-filed action pending in California involving the same subject matter and the same parties. That action has been stayed awaiting disposition of this case. Without commenting on the weight of this factor, the Court of Chancery determined that, although there is no action pending in a Canadian court, Canada would be the more appropriate forum for this suit since Canadian courts are better positioned to interpret Canada's laws governing the internal affairs of its corporations. Returning to the significance of the stayed California action, we find that this factor carries little weight in the analysis because the California action was filed later than the action at issue in this appeal, involves a different stockholder-plaintiff and because both actions are in their preliminary stages. Finally, the Court of Chancery found that other practical considerations weighed in favor of Logic's motion to dismiss. It noted that plaintiff is a Canadian citizen [10] with shares in a Canadian corporation governed by Canadian law. The Court stated that Delaware has no interest in resolving a dispute between a minority stockholder of a foreign corporation and the majority stockholder, which happens to be a Delaware corporation, especially in light of the fact that none of the complained-of activity occurred in Delaware. The Court of Chancery concluded its analysis with a determination that Canada's courts have a greater interest in the outcome of this case than the Delaware courts, and that the courts of Canada should resolve the application of Canadian laws to a Canadian corporation and its investors. This may be true. Yet Delaware courts are accustomed to deciding controversies in which the parties are non-residents of Delaware and where none of the events occurred in Delaware. We conclude, therefore, that these factors alone are not sufficient to warrant interference with the plaintiff's choice of forum. [11] It is not unusual for courts to wrestle with open questions of the law of sister states or foreign countries. [12] The application of foreign law is not sufficient reason to warrant dismissal under the doctrine of forum non conveniens. [13]