Willis v. PCA Pain Center of Virginia, Inc., C.A. No. 9006-VCN (Del. Ch. October 20, 2014). This Chancery decision is noted for its usefulness in the toolbox of those who practice corporate and commercial litigation in Delaware, for two nuanced issues that often arise: (i) when equitable relief sought will be sufficient to provide Chancery with equitable jurisdiction even when legal remedies may arguably make the plaintiff whole; and (ii) nuances of the first-filed rule that explain situations (unlike this case) when deference is not always given to the suit that was first-filed.
I) Equitable jurisdictional basis: The court observed that even though specific performance can be an equitable remedy, it remains a discretionary one. If one is seeking specific performance for the transfer of personal property, as opposed to real estate, that typically can be satisfied by money damages, and thus is not necessarily a basis for a court of equity to exercise jurisdiction. But in this case involving professional services, the court found other facts that may not have allowed the parties to be made whole by money. Though not applicable here, the court noted that in some circumstances, there is a basis for equitable jurisdiction if a company’s insolvency can make a legal remedy unavailable–but a detailed foundation for the defendant’s insolvency must be adequately alleged. Equitable jurisdiction may also be available when the legal remedy is speculative or not quantifiable. Neither of the last two options applied in this case, however.
II) Nuances of the court’s discussion of the first-filed rule: (i) there are situations when complaints filed in two different fora within days or weeks of each other may be considered filed at the same time, and (ii) it is not necessary that parties be identical in both jurisdictions, especially if the missing party in one forum is controlled by a party in the other case; (iii) allegations need not be identical if they arise in both cases out of the same “nucleus of operative facts”; and (iv) issues such as those implicating the internal affairs doctrine and corporate law are more likely to be retained by a Delaware court than a run of the mill contract case.
In this matter, a breach of contract case filed a week earlier in Virginia was considered first-filed, and thus, this Delaware case was stayed in favor of that case. For purposes of allowing a case filed only a few days before to be considered first-filed, and not contemporaneous, the court observed that it will consider whether the first-filed case was the result of a race to the courthouse, such as after an agreed-upon moratorium expired, or if it was retaliation for the first-filed suit, or both parties each had months to decide whether or not to file a complaint, and one just took action sooner.