The interlocutory appeal in the case of Genuine Parts Company v. Cepec presented one question:  “whether Delaware may exercise general jurisdiction over a foreign corporation for claims having nothing to do with Delaware, as a price for the corporation agreeing simply to be able to do business in Delaware.” Genuine Parts Company v. Cepec, No. 528, 2015, *1 (Apr. 18, 2016).

Genuine Parts Company (“Genuine Parts”) brought this significant question to the forefront when it filed a motion to dismiss the claims against it for lack of personal jurisdiction in the trial court.  The Superior Court denied the motion.  The Superior Court relied on the decision in Sternberg v. O’Neil, 550 A.2d 1105 (Del. 1988) in holding that consent to Delaware’s general jurisdiction is found in registering to do business in Delaware.  On appeal Genuine Parts urged the Supreme Court to depart from Sternberg and to overrule the Superior Court.  It support of its position, Genuine Parts argued that United States Supreme Court decisions such as Daimler AG v. Bauman, 134 S. Ct. 746 (2014) altered the legal landscape since the Sternberg decision.

In a four to one decision reversing the Superior Court the Majority agreed with Genuine Parts stating in part:

After Daimler, we hold that Delaware’s registration statutes must be read as a requirement that a foreign corporation must appoint a registered agent to accept service of process, but not as a broad consent to personal jurisdiction in any cause of action, however, unrelated to the foreign corporation’s activities in Delaware.  Rather, any use of the service of process provision for registered foreign corporations must involve an exercise of personal jurisdiction consistent with the Due Process Clause of the Fourteenth Amendment.

In most situations where the foreign corporation does not have its principal place of business in Delaware, that will mean that Delaware cannot exercise general jurisdiction over the foreign corporation. In that circumstance, the core statute to evaluate whether the foreign corporation is subject to specific jurisdiction is Delaware’s long-arm statute, 10 Del. C. § 3104. The long-arm statute operates smoothly in tandem with § 376, which provides that a foreign corporation can be served via its registered agent in the state. Under the long-arm statute, a foreign corporation ‘submits to the jurisdiction of the Delaware court’ as to any cause of action that arises out of certain enumerated acts by the corporation in this state such as ‘transact[ing] any business or perform[ing] any character of work or service,’ or ‘contract[ing] to supply services or things.’ Moreover, a plaintiff who brings a cause of action fitting under the long-arm statute against a registered foreign corporation need not use cumbersome means of service of process, but instead can serve the foreign corporation‘s registered agent, as contemplated in the long-arm statute. Genuine Parts Company v. Cepec, No. 528, 2015, *3. (citations omitted)

The dissenting opinion by Justice Vaughn states:

I agree with those federal judicial officers who have concluded that Daimler and Goodyear have no effect upon general jurisdiction that is based upon consent through corporate registration statutes. Daimler and Goodyear involved only general jurisdiction by presence where the corporate defendant had not consented to jurisdiction. Just last month, a circuit court judge of the Federal Circuit wrote in a concurring opinion mentioned by the Majority that ― Daimler did not overrule the line of Supreme Court authority establishing that a corporation may consent to jurisdiction over its person by choosing to comply with a state‘s registration statute. The case originated in Delaware and the opinion concluded that [Sternberg v. O’Neil, 550 A.2d 1105 (Del. 1988)] itself remains good law. I fully agree with the reasoning of that concurring opinion and see no need to duplicate it here.

It may be that the United States Supreme Court will go in the same direction as the Majority. But we won‘t know until it gets there. I would not divest the trial courts of this state of significant jurisdiction unless I was sure I was right, and I am not sure the Majority is right. I would affirm the judgment of the Superior Court. Id. at 45. (citations omitted)

The decision may be read in its entirety here.

*****************

Leslie Spoltore is a Partner with the law firm Fox Rothschild LLP.  Leslie practices in Fox Rothschild’s Wilmington, Delaware office.  You can reach Leslie at (302) 622-4203, or lspoltore@foxrothschild.com.

In many states domestic relations matters are heard in trial courts of general jurisdiction.  For over four decades Delaware has taken a different approach.  In 1971 the Delaware General Assembly enacted legislation creating a unified, statewide family court.  This specialized court exercises jurisdiction over a multitude of family matters.  For example, the Family Court hears cases involving juvenile delinquency, dependent/neglected/abused children, adult misdemeanor crimes against juveniles, child and spousal support, paternity, custody and visitation of children, adoptions, terminations of parental rights, divorces and annulments, property divisions, specific enforcement of separation and property division agreements, guardianship of minors, petitions for orders of protection from abuse, and intra-family misdemeanor crimes.

The Delaware Code describes the purpose behind the creation of this unique court as follows:

In the firm belief that compliance with the law by the individual and preservation of the family as a unit are fundamental to the maintenance of a stable, democratic society, the General Assembly intends by enactment of this chapter that 1 court shall have original statewide civil and criminal jurisdiction over family and child matters and offenses as set forth herein. The court shall endeavor to provide for each person coming under its jurisdiction such control, care, and treatment as will best serve the interests of the public, the family, and the offender, to the end that the home will, if possible, remain unbroken and the family members will recognize and discharge their legal and moral responsibilities to the public and to one another.   10 Del. C. § 902.

As future posts will describe and explore, the specialized nature and jurisdiction of the Family Court results in some similarly unique rules, processes and procedures.

______________

Leslie Spoltore is a Partner with the law firm Fox Rothschild LLP.  Leslie practices in Fox Rothschild’s Wilmington, Delaware office.  You can reach Leslie at (302) 622-4203, or lspoltore@foxrothschild.com.

In 2008, the concept of standby guardianship became law in Delaware.  See 13 Del. C. §2361 et seq.  Though it has been in effect for some time, many still find the concept of standby guardiship to be unfamiliar.  In short, standby guardianship allows a parent or guardian afflicted with a progressive, chronic condition or terminal illness to make arrangements for the future care of their child without terminating their own legal rights.  In fact, a standby guardian, if appointed, does not assume his/her role and responsibilities until (i) it is determined that the ill parent or guardian is deceased, incapacitated or debilitated, or (ii) the ill parent or guardian agrees in writing that the standby guardian may assume their role.

The process begins with the filing of a petition for standby guardianship in the Delaware Family Court.  As with other forms of guardianship, the Family Court will not grant a petition for the appointment of a standby guardian without making certain determinations.  To begin, the Court must find that there is a significant risk that the parent or guardian filing the petition will die or become debilitated within 2 years of the filing of the petition.  In addition, the Court must find the petition is in the child’s best interests.  Depending on whether the petition is filed by a parent or guardian, the Court must make go on to make additional findings.

If the petitioner is a parent, the Court must find:

(1) The child would be dependent, neglected or abused in the care of the other parent; or

(2) The other parent of the child is deceased; or

(3) The other parent’s parental rights have been terminated; or

(4) The other parent consents to the appointment of a standby guardian.

If the petitioner is the guardian of a child, the Family Court must make certain finding with regard to each of the child’s parents.  Specifically, the Court must find:

(1) That the child remains dependent, neglected or abused in the parent’s care; or

(2) The parent of the child is deceased; or

(3) The parent’s parental rights have been terminated; or

(4) The parent consents to the appointment of a standby guardian.

13 Del. C. § 2367.

If or when a standby guardian is appointed and assumes that role, he/she has the authority to exercise the same powers, rights and duties respecting the care, maintenance and treatment of the child as a parent.  13 Del. C. § 2369,13 Del. C. § 2340 .

 

______________

Leslie Spoltore is an attorney with the law firm Fox Rothschild LLP.  Leslie practices in Fox Rothschild’s Wilmington, Delaware office.  You can reach Leslie at (302) 622-4203, or lspoltore@foxrothschild.com.

Assessing competing expert analyses on Mexican law, the Delaware Superior Court (Jurden, J.) in Arteaga v. Bell Helicopter Textron, Inc. (C.A. No. N12C-05-008 JRJ) denied the defendant helicopter manufacturers’ motion to dismiss on the ground of forum non conveniens.  Read entire decision here.  Critical to the Court’s decision was the principle that there must be “a clear choice of jurisdictions in which to sue,” and “that choice must have been present when Plaintiffs initially filed their complaint.” 

This lawsuit arose out of a fatal helicopter crash that occurred in Mexico in October 2010.  Representatives of the deceased filed wrongful death actions in Delaware against Bell Helicopter Textron, Inc. and Bristow Helicopters, Inc. (“Defendants”), alleging that the crash was caused by manufacturing defects. 

Defendants filed a motion to dismiss on the ground of forum non conveniens, arguing that Mexico is the most appropriate forum in which to litigate the case.  Defendants even offered to file a stipulation with a Mexican court waiving any jurisdictional defenses based on the fact that they are domiciled in the United States. 

Plaintiff’s expert on Mexican law, however, explained that a Mexican court would never accept such a stipulation because Mexican courts always decide sua sponte whether they may exercise jurisdiction as soon as a new case is filed.  If the court determines that it has jurisdiction, the defendant is served with notice and the case proceeds.  If, on the other hand, the court decides that it lacks jurisdiction, it will dismiss the case.  Thus, according to Plaintiff’s expert, a defendant is not permitted to submit argument to a Mexican court regarding whether or not the court has jurisdiction.  (See Opinion at 5.)  Plaintiffs also offered the sworn affidavit of a Mexican judge which corroborated this information. 

Plaintiff’s and Defendants’ experts both agreed that Mexican courts frequently dismiss cases where the defendant is not domiciled in Mexico.  Accordingly, the Court concluded that “Mexico is not an available alternative forum,” as “Mexican courts will almost certainly dismiss this suit because Defendants are domiciled in the United States of America.”

The opinion offers an interesting look at how a Delaware court will view competing legal arguments regarding the laws of a foreign jurisdiction. 

The nature of the division of jurisdiction between the Court of Chancery and the Superior Court often gives rise to interesting questions regarding the proper forum for an action.  The Court of Chancery has jurisdiction to hear matters in equity, and the Superior Court serves as the court of general jurisdiction.  The question of which court is the proper forum can, in some cases, be determined by something as simple as whether a document is affixed with a seal. 

This very issue arose in Community Bank Delaware v. Far East Capital, Inc.  Plaintiff, Community Bank Delaware (“Community”), filed a foreclosure action in the Superior Court regarding two commercial mortgages and a commercial line of credit.  Community then filed a motion for summary judgment.  Defendant, Far East Capital, Inc. (“Far East”), filed a cross motion for summary judgment, or in the alternative, a motion to dismiss the action.  Far East argued that because its corporate seal was not affixed to any of the mortgage instruments, the contracts were equitable in nature, rendering them unenforceable at law in the Superior Court.  

The Superior Court agreed.  The Court noted, however, that the absence of the corporate seal on a commercial mortgage does not render the document invalid or unenforceable.  Rather, the absence of the seal is a technical defect.  The Court noted “[t]he sine qua non of a mortgage is not the form, but the parties’ intention to secure a debt by a pledge of real property.”  Therefore, the technical defect in the form of the mortgage was determinative only of the court in which the action may be heard.  Without the proper seal, the Superior Court determined it lacked jurisdiction to hear the matter.  However, the Order provides Community the opportunity to file an election to transfer the matter to the Court of Chancery.

The decision may be read in its entirety here.

_________________________

Leslie Spoltore is an attorney with the law firm Fox Rothschild LLP.  Leslie practices in Fox Rothschild’s Wilmington, Delaware office.  You can reach Leslie at (302) 622-4203, or lspoltore@foxrothschild.com.