IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

GXP CAPITAL, LLC,
Plaintiff,

C.A. No. N18C-07-267
PRW CCLD

Vv.

SERVICES, INC.; TELEGRAPH HILL
PARTNERS ITI, L.P.; TELEGRAPH
HILL PARTNERS III INVESTMENT

)

)

)

)

)

ARGONAUT MANUFACTURING )
)

)

)

MANAGEMENT, LLC, )
)

Defendants.
Submitted: July 20, 2020
Decided: August 3, 2020
ORDER CERTIFYING AN INTERLOCUTORY APPEAL
This 3" day of August, 2020, upon consideration of Plaintiff GXP Capital,
LLC’s application under Rule 42 of the Supreme Court for an order certifying an
appeal from the interlocutory order of this Court, dated July 1, 2020, it appears to
the Court that:
(1) This is a civil action filed by GXP Capital, LLC (“GXP”), a limited
liability company organized and headquartered in Nevada.' GXP is the assignee and
a subsidiary of GXP CDMO, Inc., formerly known as Bioserv Corporation

(“Bioserv”).?

 

' Compl. at § 1 (DI. 1).

2 Id, at § 1, 7.
(2) GXP alleges that Telegraph Hill Partners, III, L.P.; Telegraph Hill
Partners III Investment Management; and a predecessor entity to Argonaut
Manufacturing Services, Inc. (collectively, “Investors”) obtained confidential
business information about Bioserv during acquisition negotiations pursuant to non-
disclosure agreements.? GXP further alleges that the Investors misused the
information in violation of those agreements to execute a successful hostile
acquisition of key Bioserv assets in bankruptcy proceedings.*

(3) GXP first filed an action seeking relief for these alleged wrongs in
federal district court in the District of Nevada. Due to a lack of personal jurisdiction,
GXP voluntarily dismissed that action and filed a new action in the Southern District
of California. That federal court dismissed this second case for lack of subject matter

Jurisdiction, since the parties lack complete diversity.°

 

3 Td. at Jf 6-9, 12, 14.
4 Id. at 9] 47, 49, 52, 56.

> GPX Capital, LLC v. Argonaut EMS, No. 3:17-cv-02283-GPC-BLM (S.D. Cal. Jul. 23, 2018)
(Dkt. No. 48) (“[T]the Court sua sponte DISMISSES without prejudice the complaint for lack of
subject matter jurisdiction.”). The California district court case is captioned GPX rather than GXP
in conformity with the corresponding Complaint. The same error occurred in early procedural
stages in this case. See generally Compl. (D.I. 1).

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(4) Following these two dismissals, GXP filed suit in this Court. The
Investors moved to dismiss the complaint for forum non conveniens.® Because GXP
had previously initiated this suit in other fora and those suits had terminated without
reaching a resolution on the merits, the Court performed its forum non conveniens
analysis under the intermediate standard articulated in Gramercy Emerging Markets
Fund y. Allied Irish Banks, P.L.C."

(5) Weighing the forum non conveniens factors without presumption, the
Court found that litigation in Delaware would be more burdensome on the Investors
than relief would be on GXP. A key factor to the Court’s analysis in this specific
case was the availability of the state courts of California to do prompt justice.®
Because the weighing of hardships relied on the availability of that alternative
forum, the Court fashioned relief in the form of a stay, giving GXP ninety (90) days

to file suit in California state courts or another available and more appropriate

 

6 (DI. 8). The Motion to Dismiss sought relief other than Forum non conveniens as well, but all
other aspects of that motion were settled by the voluntary dismissal without prejudice of seven of
the Complaint’s counts. (D.I. 25).

7 173 A.3d 1033, 1044 (Del. 2017).

8’ The Investors stipulated that if granted relief they would waive any statute of limitations
defense in order to proceed to the merits of the underlying dispute in California. Arg. Tr., Jan. 31,
2020, at 8 (D.I. 32). Delaware courts have in the past granted forum non conveniens relief
contingent upon the movants’ agreement not to raise the statute of limitations or any other bar to
a decision on the merits in later-filed litigation which would not have been available in the
Delaware litigation. E.g., Meade Elec., Inc. v. Pepper Const. Co., 1991 WL 1179827, at *9 (Del.
Super. Ct. Aug. 9, 1991).
tribunal.” GXP now requests the Court’s certification of the matter for interlocutory
appeal.

(6) Supreme Court Rule 42 governs interlocutory appeals from this Court’s
orders.'? The trial court may certify the order for appeal in whole or in part, and the
Supreme Court may review it the same way.!!

(7) Under Rule 42, when faced with a litigant’s request for certification for
interlocutory appeal, the trial court must: (a) determine that the order to be certified
for appeal “decides a substantial issue of material importance that merits appellate

review before a final judgment;”'” (b) decide whether to certify via consideration of

 

° The Court issued an initial Opinion and Order on May 4, 2020. GXP Capital, LLC v. Argonaut
Mfg. Servs. Inc., 2020 WL 2111477 (Del. Super. Ct. May 4, 2020). GXP filed a timely Motion
for Reargument under Rule 59(e). (D.I. 34). In that Motion, GXP sought reconsideration in part
based on its belief'the Court had enforced a permissive choice of forum clause as a mandatory one.
The Court withdrew the initial order and issued in substitution the July 1, 2020 Opinion and Order
clarifying that the Court had considered California’s availability to be a weighty factor because
litigation there was both available and substantially less burdensome under the forum non
conveniens factors, not due to any misapprehension that some mandatory forum selection clause
applied. GXP Capital, LLC v. Argonaut Mfg. Servs. Inc., 2020 WL 3581633, at *9 (Del. Super.
Ct. July 1, 2020).

'° DiSabatino Bros., Inc. v. Wortman, 453 A.2d 102, 103 (Del. 1982).

'' See Dow Chemical Corp. v. Blanco, 67 A.3d 392, 394 (Del. 2013) (“The Defendants applied
for an interlocutory appeal of the Superior Court’s opinion under Supreme Court Rule 42. The
Superior Court granted the application for an interlocutory appeal presenting one narrow question.
. . [t]he Superior Court denied certification of the Defendants’ remaining questions for
interlocutory appeal. . . Our inquiry is limited to the question certified.”).

2 Del. Supr. Ct. R. 42(b)(i) (2020).
the eight factors listed in Rule 42(b)(iii); (c) consider the Court’s own assessment
of the most efficient and just schedule to resolve the case; and then (d) identify
whether and why the likely benefits of interlocutory review outweigh the probable
costs, such that interlocutory review is in the interests of justice.'* “If the balance is

uncertain, the trial court should refuse to certify the interlocutory appeal.”!>

 

7 (A) The interlocutory order involves a question of law resolved for
the first time in this State;

(B) The decisions of the trial courts are conflicting upon the question of law;

(C) The question of law relates to the constitutionality, construction, or
application of a statute of this State, which has not been, but should be,
settled by this Court in advance of an appeal from a final order;

(D) The interlocutory order has sustained the controverted jurisdiction of
the trial court;

(E) The interlocutory order has reversed or set aside a prior decision of the
trial court, a jury, or an administrative agency from which an appeal
was taken to the trial court which had decided a significant issue and a
review of the interlocutory order may terminate the litigation,
substantially reduce further litigation, or otherwise serve
considerations of justice;

(F) The interlocutory order has vacated or opened a judgment of the trial
court;

(G) Review of the interlocutory order may terminate the litigation; or
(H) Review of the interlocutory order may serve considerations of justice.
Del. Supr. Ct. R. 42(b)(iii) (2020).
'4 Id. Those “probable costs” are informed, in part, by Rule 42(b)(ii), i.e., interlocutory appeals
“disrupt the normal procession of litigation, cause delay, and can threaten to exhaust scarce party

and judicial resources.” Del. Supr. Ct. R. 42(b)(ii) (2020).

15 Id.
(8) The first step, deciding whether the order over which a party is seeking
certification decides a substantial issue of material importance, is a threshold inquiry
without which certification is inappropriate.'° An issue is substantial when it
“decides a main question of law which relates to the merits of the case, and not to
collateral matters.”!”

(9) Though the forum is, strictly speaking, immaterial to the merits of the
underlying case, Delaware courts oft treat forum non conveniens motions as
satisfying this criterion because a party’s right to have an action heard “in a proper
forum ... meets the tests for appealability of an interlocutory order in this
jurisdiction.” '®
(10) While satisfying that threshold inquiry, interlocutory review of a stay

in lieu of dismissal in forum non conveniens cases still requires of showing of

“exceptional circumstances” under the Rule 42(b)(iii) factors.'"? The Delaware

 

'6 Traditions, L.P. v. Harmon, 2020 WL 1646784, at *1 (Del. Apr. 2, 2020).
'7 Sprint Nextel Corp. v. iPCS, Inc., 2008 WL 2861717, at *1 (Del. Ch. July 22, 2008).
'8 State Marine Lines v. Domingo, 269 A.2d 223, 225 (Del. 1970).

'9 See Aveta, Inc. v. Olivieri, 2008 WL 4215973, at *1 (Del. Super. Ct. Sept. 10, 2008)
(“Delaware courts occasionally have found that forum non conveniens decisions determine
substantial issues and establish legal rights. However, absent exceptional circumstances, the
Supreme Court has refused to accept interlocutory appeals from forum non conveniens decisions.”)
(internal citations omitted).
Supreme Court has frequently denied interlocutory review to forum non conveniens
orders, whether the trial court granted”? or denied?! forum non conveniens relief.
(11) GXP urges the Court to consider two legal theories which it believes

implicate several of these factors:

i. that a stay in lieu of dismissal abrogates the appeal rights of a
litigant under the Delaware Constitution; and

ii. that under Ingres Corp. v. CA, Inc.”? and Utilipath, LLC v.
Hayes” the party to a permissive forum selection clause cannot
obtain forum non conveniens relief.

(12) GXP asserts that the first of these theories implicates the first and third

Rule 42(b)(iii) factors as a novel issue of Delaware constitutional law. It argues that

the second of these theories implicates both the first factor as an issue of first

 

20 See Lima Delta Co. v. Global Aerospace, Inc., 2016 WL 1436582, at *2 (Del. Apr. 5, 2016)
(refusing to grant interlocutory review on a forum non conveniens dismissal as to some parties and
stay of litigation as to other where the trial court denied appeal certification); Chadwick v. Metro
Corp., 2003 WL 21054790, at *1 (Del. May 7, 2003) (refusing interlocutory appeal of trial court’s
forum non conveniens stay and denial of certification); Derdinger v. Tallman, 2000 WL 1589929,
at *1 (Del. Aug. 29, 2000) (refusing interlocutory appeal of trial court’s grant of forum non
conveniens stay and denial of certification).

*I See Wilmington Tr., N.A. v. Lincoln Benefit Life Co., 2018 WL 2111156, at *1 (Del. May 8,
2018) (refusing to grant interlocutory review on a forum non conveniens order denying dismissal
where trial court also denied appeal certification); iPCS, Inc. v. Sprint Nextel Corp., 2008 WL
2942136, at *1 (Del. Aug. 1, 2008) (same); Berman Real Estate Dev., Inc. v. Berdel, Inc., 1995
WL 788597, at *1 (Del. Dec. 6, 1995) (same).

2 8 A.3d 1143 (Del. 2010).

3 2015 WL 1744163 (Del. Ch. Apr. 15, 2015).

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impression and the second factor because the Superior Court is now in conflict with
the Court of Chancery in Utilipath.

(13) GXP raised these issues only belatedly. It submitted Jngres by letter to
the Court just days before oral argument—after the parties had submitted completed
all briefing on the original motion.** GXP did not raise the adequacy of appellate
review until their request for reargument.”°> And it did not raise Utilipath until the
present request for certification.”°

(14) The Court is not persuaded that either of these arguments satisfies any
of the Rule 42(b)(iii) factors.

(15) The Delaware Supreme Court has specifically instructed trial courts to
exercise their discretion freely to grant a stay of litigation for forum non conveniens
when a first-filed case exists in another jurisdiction.*” GXP’s vague reference to

provisions of the Delaware Constitution and Code does not make clear its theory for

 

* DI 31,
> DI. 34.
© DL 38,

*7 See McWane Cast Iron Pipe Corp. v. McDowell-Wellman Engineering Co., 263 A.2d 281, 283
(Del. 1970) (“[A] Delaware action will not be stayed as a matter of right by reason of a prior action
pending in another jurisdiction involving the same parties and the same issues; that such stay may
be warranted, however, by facts and circumstances sufficient to move the discretion of the Court;
that such discretion should be exercised freely in favor of the stay when there is a prior action
pending elsewhere, in a court capable of doing prompt and complete justice, involving the same
parties and the same issues.”’).
how this long settled practice is forbidden. Even if GXP were correct that Delaware
courts have long labored under a grievous misunderstanding of litigants’ appellate
rights, this misunderstanding lacks the novelty required by the first and third factors
to obtain interlocutory certification.

(16) Moreover, when initially considering the Investors’ motion, the Court
asked the parties to answer two supplemental questions, the first of which was
whether the Court was permitted under Gramercy to grant a stay in lieu of
dismissal.?* GXP responded that such relief was in the Court’s power.2? GXP
certainly urged the Court to find such relief inappropriate. But, just as certainly,
GXP never raised any hint of its newly-asserted belief that a forum non conveniens
stay unconstitutionally abrogates a party’s appellate rights.*°

(17) GXP’s reliance on Jngres and Utilipath is likewise misplaced. In Ingres
the court denied a later-filed Delaware suit’s defendant forum non conveniens relief
because the first-filed suit contravened a valid mandatory forum selection clause
limiting the parties to the courts of either Delaware or New York.*! In Utilipath, the

Court denied relief because the parties’ contract contained a permissive forum

 

*8 Court’s Letter to All Parties, at 2 (D.I. 23).
9 GXP’s Resp. to the Court’s Letter, at 1 (D.I. 27).
39 Id. at 1-2.

3! Ingres, 8 A.3d at 1145.
selection clause expressly naming Delaware and also expressly disclaiming any
future forum non conveniens motion in Delaware.” That is, both cases involved
forum selection clauses designating Delaware and determining the effect of those
clauses on claims of hardship from Delaware litigation. In this case, the Investors
claim hardship from Delaware litigation but the forum selection clause indicates
California. To the extent that Utilipath and Ingres apply, they emphasize the
appropriateness of California litigation and thus the lack of hardship that the Court’s
relief imposes on GXP. There is no conflict between the Delaware trial courts. The
second factor does not apply.

(18) All that said, the Court does believe application of Gramercy implicates
several of the Rule 42(b)(iii) factors for reasons other than those GXP identifies.

(19) With respect to the first factor of novelty, as best this Court and the
parties could determine, this case is the first opportunity for a Delaware trial court
to fully apply the Gramercy intermediate standard. The Court and parties identified
only two other cases involving this intermediate posture. In one, the issue of forum
non conveniens was mooted on reconsideration due to an applicable statute of

limitations necessitating dismissal with prejudice on the merits.** In the other, an

 

32 See Utilipath, 2015 WL 1744163, at *4.
3 Schmidt v. Washington Newspaper Publishing Company, 2019 WL 4785560 (Del. Super. Ct.

Sept. 30, 2019), amended on reconsideration by, 2019 WL 7000039 (Del. Super. Ct. Dec. 20,
2019).

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applicable mandatory forum selection clause designating Mexico as the exclusive
forum for the action brought required dismissal without reaching analysis of the
forum non conveniens factors.4 Breaking further new ground, unlike Gramercy
itself, the potential alternative less-burdensome forum here is in the United States
rather than overseas.*° And this Court here had to determine the appropriate
remedy—dismissal or stay—for the first time under Gramercy. This appeal would
thus resolve a novel question of Delaware common law,” satisfying the first Rule
42(b)(ii1) factor.

(20) The underlying Opinion and Order effectively ends this litigation here
in Delaware, leaving only a stayed residual as a backstop contingency should
California state courts refuse to reach the merits of the underlying dispute. A ruling
affirming this Court’s Order would satisfy the seventh factor: the Supreme Court’s
review may terminate the litigation. Conversely, a ruling reversing this Court’s
Order would correct an improper termination of litigation and substantially reduce
further litigation by preventing the commencement of an unnecessary parallel suit

in California.

 

** Degregorio v. Marriott Int’l, Inc., 2018 WL 3096627, at *5 (Del. Super. Ct. Jun. 20, 2018).

°5 See Gramercy, 173 A.3d at 1035 (noting that the incident at issue took place in Bulgaria and
arose under Bulgarian law).

36 See In re Asbestos Litigation, 929 A.2d 373, 381 (Del. Super. Ct. 2006) (“forum non
conveniens is a creature of the common law.”).

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(21) As to the eighth factor, in this Court’s view, considerations of justice
weigh in favor of interlocutory review of the present Order. While GXP misreads
the Court’s disposition of the case*’ it is correct that interlocutory review is the only
mechanism by which an aggrieved party can obtain appellate review of a forum non
conveniens stay, since a final order appealable as of right will not issue until after a
preclusive judgment on the merits issues in the foreign jurisdiction. Actually, both
sides suffer from such non-appealability, since a litigant aggrieved by denial of
forum non conveniens relief can also obtain meaningful appellate review only by
certification of that interlocutory order.*®

(22) Thus, the first, seventh, and eighth Rule 42(b)(iii) factors are implicated
by this Court’s Gramercy analysis here.

(23) After consideration of the eight Rule 42(b)(iii) factors, the Court lastly

considers its own “assessment of the most efficient and just schedule to resolve the

 

37 Tnits application for interlocutory review, GXP asserts “Presumably, once the California action
was commenced, this Court would dismiss this action without prejudice, so as not to foreclose a
decision on the merits in California,” and “[a]lthough not stated explicitly, the inference is that if
GXP failed to do so it would still dismiss the case here.” GXP Mot. at 4-5 n.2 (D.L. 38). The
Court informed the parties it would “renew the stay for the duration of the [California] litigation
to ensure it reaches a final ruling on the merits.” GXP Capital, 2020 WL 3581633, at *10. The
Court was likewise explicit that should GXP fail to initiate suit elsewhere during the stay the Court
would “consider the underlying claim abandoned and dismiss the suit entirely.” Id.

38 Since by definition a final judgment on the merits will only issue after the trial has been
conducted with all of the burdens that formed the basis of the request for forum non conveniens
relief.

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case. . . [and] whether and why the likely benefits . . . outweigh the probable costs,
such that interlocutory review is in the interests of justice.”*”

(24) Gramercy analysis, the sole issue for which this Court would certify
GXP’s appeal, is narrow and can be efficiently resolved on interlocutory review.
‘An order is final when the trial court has clearly declared its intention that the order
be the court’s final act in disposing of all justiciable matters within its jurisdiction.”*°
The ordered stay fails this standard only very narrowly. The Investors sought
dismissal, not a stay, and the Court ordered lesser relief solely to preserve the
possibility of litigation here should the state courts of California close their doors to
this dispute. Had the Court instead issued the dismissal sought, no doubt the matter
would be ripe for direct review as of right,’ and appellate review of the case under
a stay in lieu of dismissal presents little additional difficulty and expense. The

purpose of limiting interlocutory appeals is to prevent piecemeal litigation,” a

danger not present here.

 

39 Del. Supr. Ct. R. 42(b)(iii) (2020).

“0 Delaware Dept. of Health and Soc. Servs. v. Dolinger, 1999 WL 504324, at *1 (Del. Mar. 16,
1999).

“| See Reid v. Spazio, 970 A.2d 176, 181 (Del. 2009) (“[A]ppeals from adverse final
determinations in civil actions in the Superior Court and the Court of Chancery are taken as of

right to this Court.”),

“2 Showell Poultry, Inc. v. Delmarva Poultry Corp., 146 A.2d 794, 795 (Del. 1958).

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(25) Moreover, the interests of justice would be well-served by interlocutory
review. This Court has frequent occasion to hear motions for forum non conveniens,
but has not developed case law applying the Gramercy intermediate standard where
the forum non conveniens factors are examined without presumption. And, most
notably, has little guidance on the range of available relief when the balance tips in
the aggrieved defendant’s favor.

(26) In particular, the Court relied by analogy on its own prior decision in
Nat’l Union Fire Ins. Co. of Pittsburgh v. Axiall Corp.8 That case concerned a
forum non conveniens motion seeking a stay in lieu of dismissal where a suit on the
same subject matter was simultaneously filed in another jurisdiction.“ The Axiall
court weighed the forum non conveniens hardship factors presented to each litigant
in the two competing jurisdictions against each other, and issued a stay because
Delaware presented the greater hardship.** The Delaware Supreme Court refused to

grant interlocutory review.*

 

4 2019 WL 4303388 (Del. Super. Ct. Sept. 11, 2019).
44 Td. at *2.
45 Id. at *4.

*6 Nat'l Union Fire Ins. Co. of Pittsburgh vy. Axiall Corp., 2019 WL 4795508, at *2 (Del. Oct. 1,
2019).

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(27) Although no case has yet been commenced in California state court, the
undisputed personal and subject matter jurisdiction of those courts over this dispute
militated in favor of applying a similar framework and considering the relative
hardships to the parties each would present. But, due to the rarity of Gramercy non-
presumption motions, the Court believes that the interests of justice would be well-
served by a conclusive determination from the Supreme Court in this case, in much
the same way as justified interlocutory appeal in McWane itself.”

(28) “Interlocutory appeals should be exceptional, not routine, because they
disrupt the normal procession of litigation, cause delay, and can threaten to exhaust
scarce party and judicial resources.”** Because of the novelty of the Gramercy
standard, and the unusual procedural posture ameliorating the difficulties
interlocutory review normally presents, the Court believes this case is exceptional.
And so the Court certifies this interlocutory appeal on two questions:

a. Is the Axiall comparative burden analysis the correct framework
to analyze forum non conveniens motions in the intermediate

Gramercy posture where the courts of another state indisputably
possess personal and subject matter jurisdiction over the case?

 

47 See McWane, 263 A.2d at 282 (noting that McWane arose from appeal of a denial of forum
non conveniens relief in an ongoing case); see also Meade Elec. Co., Inc. v. Pepper Const. Co.,
1991 WL 1179844, at *1 (Jan. 24, 1991) (certifying an order denying forum non conveniens relief
for interlocutory review because “a review of the interlocutory order may serve considerations of
justice by refining the standard for deciding a motion to dismiss or stay on the ground of forum
non conveniens.”).

“8 Del. Supr. Ct. R. 42(b)(ii).
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b. Is a trial court within its discretion to grant a Gramercy stay in
lieu of dismissal when that relief is, in the court’s judgment, the
least burdensome to the parties under the forum non conveniens
factors?

NOW, THEREFORE, IT IS HEREBY ORDERED that Plaintiff GXP

Capital, LLC’s Application for Certification of Interlocutory Appeal is hereby

a
ae

GRANTED IN PART. Sie >
POP eds

Paul R. Wallace, Judge

Original to Prothonotary
cc: All counsel via File & Serve

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