Third Avenue Trust v. MBIA Insurance Corp., No. 4486-VCS (Del. Ch. Oct. 28, 2009), read opinion here. This Court of Chancery case involves the rather uncommon result in which the Court declined to exercise jurisdiction over a dispute.
Although it may be admittedly simplistic to highlight this case in such a manner, the opinion by the Court of Chancery in this matter can be characterized, on a rudimentary level, merely as relinquishing jurisdiction over a case that is based on New York law between "New York-centered parties" and does not present a sufficient policy justification for the Delaware Courts to adjudicate a dispute between entities regulated by the New York Insurance Department. The Court actually explains in quasi-metaphysical fashion the political philosophy that would justify its decision to decline to rule on this dispute involving insurance companies that operate in New York, and that the State of New York has a greater interest adjudicating. A taste of the flavor of the Court’s analysis is exemplified in its opening paragraph which provides as follows:
The United States is a federal republic that depends on comity among the states for the peaceful and efficient conduct not only of public regulation, but also of private commerce . . . . This case presents a clear example of a dispute where this Court ought to refuse to make a determination of another state’s law and refer the matter, by abstention and appropriate enforcement of a forum selection clause, to the Courts of the state whose law and public policy is affected by the resolution of the key question.
This is one of a series of recent cases where for different policy reasons and legal rationales, the Chancery Court was presented with cases involving arguments that the Delaware Court should refrain from ruling on a case involving competing litigation between the parties in another jurisdiction. Compare two recent cases summarized here and here, one of which declined to adjudicate in Delaware a dispute involving litigation between the same parties in another jurisdiction, and another recent case summarized here that reached a contrary result based on contrary factors and facts.