Opinion ID: 1476448
Heading Depth: 1
Heading Rank: 7

Heading: The Relative Interests of Argentina And Delaware in This Controversy

Text: The factor found to weigh most heavily in favor of the Court of Chancery's determination that litigating in Delaware would constitute an overwhelming hardship to Pan American, was that Argentina has a far greater interest in the controversy than does Delaware. The predominate weight given that factor emerges clearly from the Court's opinion. Immediately after finding that overwhelming hardship had been established, the Court of Chancery (i) stated that Delaware has little or no interest in resolving this dispute; (ii) observed that all the parties, the contracts and the alleged wrongful conduct were located in or occurred in Argentina and that Argentina law would apply; and then (iii) concluded that Argentine governmental authorities have expressed a direct interest in this controversy. [26] The problem with this analysis is that factors that bear on choice of law or upon the relative interests of Delaware and Argentina in adjudicating this dispute have no logical relevance to the critical issue, which is whether Pan American will suffer overwhelming hardship if required to litigate in Delaware. Because the defendant has the burden to demonstrate overwhelming hardship from litigating a first-filed case in Delaware, this Court has previously held that whether an alternative forum would be more convenient for the litigation, or perhaps a better location, is irrelevant[;] [27] and that the trial court is not permitted to compare Delaware, the plaintiff's chosen forum, with an alternate forum and decide which is the more appropriate location for the dispute to proceed. [28] That is what prompted this Court, in Mar-Land Industries Contractors, Inc. v. Caribbean Petroleum Refining, L.P., to reverse a dismissal on forum non conveniens grounds, and to hold that the Superior Court improperly weighed the plaintiff's chosen forum versus the defendant's preferred forum, a balancing analysis not contemplated by this Court's forum non conveniens jurisprudence. [29] Even if Argentine law is found to be applicable, the application of foreign law is not sufficient reason to warrant dismissal under the doctrine of forum non conveniens. [30] In Warburg, Pincus Ventures v. Schrapper , this Court rejected the argument that some lesser hardship standard applies where the plaintiff is not a Delaware citizen and where the defendant's `only connection' to Delaware is its status as a Delaware business entity. [31] Affirming the denial of a forum non conveniens motion, the Warburg Court found that the defendant had not established with particularity that it would face overwhelming hardship if required to litigate in Delaware[,] observing that: All of the activities that are the basis of [plaintiff's] complaint occurred outside of the United States. The negotiations between the parties took place in Germany and England, which is also where . . . all of the evidence is located. Similarly, [plaintiff's] alleged damages involve interference with his relationships with various German entities. . . . Warburg argues. . . that either German law or possibly English law would apply to this action. . . . [32] By injecting an irrelevant factor into the forum non conveniens analysis, the Court of Chancery lowered the applicable standard. It also minimized a significant Delaware interest in the lawsuit, which is to make available to litigants a neutral forum to adjudicate commercial disputes against Delaware entities, even where the dispute involves foreign law and the parties and conduct are centered in a foreign jurisdiction. Where, as here, the Delaware action is first-filed, our jurisprudence views that interest to be sufficiently important as to impose upon the moving defendant the heavy burden of demonstrating overwhelming hardship from being required to litigate in Delaware. [33] The governmental interests of Argentina would be a relevant factor had Pan American moved to dismiss under Chancery Court Rule 19, on the basis that the Argentine governmental entities are indispensable parties, such that Pan American would be prejudiced if this case proceeded in Delaware without the presence of those Argentine governmental entities. Pan American did advance the argument that the Argentine courts have exclusive jurisdiction, and both sides briefed that issue; but rather than decide that jurisdictional issue directly, the Court of Chancery folded that question into the Delaware interest in the litigation factor of its forum non conveniens analysis. It is within that framework that the Court of Chancery concluded that for it to entertain this breach of contract and tort action against a private party, will likely implicate Argentina's right to regulate access to surface property . . . [and] . . . will implicate Argentina's economic interests, and also that [b]ecause of the significant interests of Argentine governmental entities, the Argentine courts may have exclusive jurisdiction over this dispute . . . [that] may independently deprive this Court of its jurisdiction. [34] Because that concern was untethered to any asserted hardship to Pan American, overwhelming or otherwise, the Court of Chancery erred by injecting the exclusive jurisdiction issue into a forum non conveniens analytic framework.