GXP Capital, LLC v. Argonaut Mfg. Servs., Inc.
| Decision Date | 20 May 2021 |
| Docket Number | No. 247, 2020,No. 248, 2020,247, 2020,248, 2020 |
| Parties | GXP CAPITAL, LLC, a Nevada limited liability company, Plaintiff Below, Appellant, v. ARGONAUT MANUFACTURING SERVICES, INC., a Delaware corporation, TELEGRAPH HILL PARTNERS III, L.P., a Delaware limited partnership, and TELEGRAPH HILL PARTNERS III INVESTMENT MANAGEMENT, LLC, a Delaware limited liability company, Defendants Below, Appellees. |
| Court | United States State Supreme Court of Delaware |
Court Below - Superior Court of the State of Delaware
Before SEITZ, Chief Justice; VALIHURA, VAUGHN, TRAYNOR, and MONTGOMERY-REEVES, Justices, constituting the Court en Banc.
Upon appeal from the Superior Court. AFFIRMED.
David L. Finger, Esq. (argued), FINGER & SLANINA, LLC, Wilmington, Delaware; Attorney for Plaintiff-Appellant GXP Capital LLC.
John L. Reed, Esq. (argued), Peter H. Kyle, Esq., DLA PIPER LLP (US), Wilmington Delaware; Brian A. Foster, Esq., and Julie Gryce, Esq., DLA PIPER LLP (US), San Diego, California; Attorneys for Defendants-Appellees Argonaut Manufacturing Services, Inc., Telegraph Hill Partners III, L.P., and Telegraph Hill Partners III Investment Management, LLC.
GXP Capital, LLC filed two lawsuits against the defendants in different federal courts. GXP alleged that the defendants violated non-disclosure agreements by using confidential information to buy key assets at bargain prices from GXP's parent company. Those cases were dismissed for lack of personal and subject matter jurisdiction. GXP then filed a third suit in Delaware Superior Court. The Superior Court stayed the case on forum non conveniens grounds to allow GXP to file the same case in California state court—a forum the court decided had a greater connection to the dispute and was more convenient for the parties.
On appeal GXP makes two arguments—first, the Superior Court did not apply the correct forum non conveniens analysis when Delaware is not the first-filed action, the prior-filed lawsuits have been dismissed, and no litigation is pending in another forum; and second, the defendants waived any inconvenience objections in Delaware under the forum selection clause in their non-disclosure agreements.
We affirm the Superior Court's judgment. The trial court properly exercised its discretion in this case's procedural posture to stay the Delaware case in lieu of dismissal when another forum with jurisdiction exists and that forum is the more convenient forum to resolve the dispute. And certain of the defendants' consent to non-exclusive jurisdiction in California did not waive their right to object to venue in other jurisdictions, including Delaware.
GXP Capital, LLC ("GXP") is a limited liability company organized and headquartered in Nevada.1 GXP CDMO, Inc., formerly known as Bioserv Corporation, is GXP's parent company. Following bankruptcy proceedings, Bioserv Corporation assigned to GXP substantially all its assets, including this action.
Argonaut Manufacturing Services, Inc., is a Delaware corporation headquartered in California and is the successor entity to Argonaut EMS ("Predecessor"), a California sole proprietorship. Telegraph Hill Partners III, L.P., ("THP III") is a Delaware limited partnership with Telegraph Hill Partners III Investment Management ("THP"), a Delaware LLC, operating as THP III's general partner. THP III and THP are both headquartered in and operate out of California. We will refer to Argonaut, THP III, and THP as "the defendants."
GXP alleges that Predecessor, THP III, and THP violated non-disclosure agreements by misusing confidential business information about Bioserv Corporation disclosed during acquisition talks. Specifically, GXP argues that Argonaut, THP III, and THP—working with others—acquired key Bioserv Corporation assets at below-market prices in bankruptcy proceedings by using and disclosing protected confidential information.
GXP filed suit first in the Federal District Court for the District of Nevada. It voluntarily dismissed the lawsuit because that court lacked personal jurisdiction over the defendants. GXP filed another lawsuit in the Southern District of California. That court dismissed the suit for a lack of subject matter jurisdiction because the parties lacked complete diversity. Trying a third time, GXP filed a complaint in the Superior Court of Delaware, alleging nine causes of action against the defendants. The complaint was eventually whittled down to two counts—breach of non-disclosure agreements and misappropriation of confidential information.2
In response to the defendants' motion to dismiss for forum non conveniens, the Superior Court found California a more convenient forum and stayed the case to allow GXP to file suit in California state court "solely to preserve the possibility of litigation here should the state courts of California close their doors to this dispute."3 In its decision, the court explained that under the procedural posture of this case—when the Delaware action is not the first-filed action and no other case is pending in another jurisdiction—the court weighs the convenience factors without applying any presumption or heightened burden in favor of a particular forum or party according to our decision in Gramercy Emerging Markets Fund v. Allied Irish Banks, P.L.C.4The Superior Court also relied on its decision in National Union Fire Insurance Co. of Pittsburgh, PA v. Axiall Corp.,5 where the court weighed the forum non conveniens hardship factors in the competing jurisdictions against each other. After weighing the factors in this case, the Superior Court decided that California was the preferred forum to resolve the dispute.
GXP filed two appeals from the Superior Court's stay order—a direct appeal from the court's stay order and another as an interlocutory appeal under Supreme Court Rule 42. The Superior Court granted in part GXP's application for certification of an interlocutory appeal. The two issues certified to our Court from the Superior Court are as follows:
This Court accepted the interlocutory appeal under Supreme Court Rule 42(b) and consolidated the two appeals.7 We issued an order stating in part:
In addition to any other arguments the parties wish to make, the parties' briefs should address: (i) whether the Stay Order is appealable as a final judgment; and (ii) the questions certified for interlocutory review by the Superior Court.8
Forum non conveniens motions are addressed to the trial court's discretion. Thus, we must determine "whether the findings and conclusions of the Superior Court are supported by the record and are the product of an orderly and logical [reasoning] process."9 "If they are, whether or not reasonable people could differ on the conclusions to be drawn from the record, this Court must affirm . . . ."10 Whether the Superior Court applied the correct standard of review is a question of law that we review de novo.11 Questions of contract interpretation are reviewed de novo.12
GXP filed a direct and an interlocutory appeal from the Superior Court's stay order. Before turning to the merits, we address our jurisdiction to hear GXP's directappeal. Unless we accept an interlocutory appeal under Supreme Court Rule 42, our jurisdiction is limited to appeals from final orders.13 As we have explained:
An aggrieved party can appeal to this Court only after a final judgment is entered by the trial court. A final judgment is generally defined as one that determines the merits of the controversy or defines the rights of the parties and leaves nothing for future determination or consideration. In short, a final judgment is one that determines all the claims as to all the parties. The test for whether an order is final and therefore ripe for appeal is whether the trial court has clearly declared its intention that the order be the court's "final act" in a case.14
A stay order is a non-final order.15 Thus, we do not have jurisdiction to hear GXP's direct appeal from the Superior Court's stay order.
GXP's arguments to the contrary are unpersuasive. According to GXP, by staying the case instead of dismissing it, the Superior Court "created a unique circumstance where GXP will not be able to get appellate review."16 If GXP filed in California state court, it argues, a live controversy would no longer exist before this Court and thus deprive it of appellate review. This circumstance, GXP claims, violates constitutional separation of powers through "judicial revision of appellate rights granted by law."17 GXP also points to federal law, where federal courts have adopted the "collateral order" and "effectively out of court" exceptions to the finality requirement for appellate review.18
What GXP ignores, however, is the availability of interlocutory review under Supreme Court Rule 42.19 Indeed, we accepted an interlocutory appeal from the Superior Court's certified questions in the case before us. Given this well-established path to appellate review, we see no need to apply or adopt other carve-outs to our jurisdiction when reviewing stay orders.20 We recognize our ruling haslittle practical effect in this appeal. In accepting the interlocutory appeal we invited the parties to raise whatever issues they wished in addition to the certified issues. But we dismiss GXP's direct appeal from the Superior Court's stay order for lack of jurisdiction.
Next, we turn to whether the non-exclusive venue provision in the NDA prohibited the defendants from arguing that Delaware was an inconvenient forum. The...
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