A recent Delaware Court of Chancery decision should be consulted by those who need to be aware of the latest iteration of Delaware law on the topic of indispensable parties to a lawsuit as prescribed in Rule 19. In Germaninvestments AG v. Allomet Corp., C.A. No. 2018-0666-JRS (Del. Ch. Nov. 20, 2020), the Court provides a thorough explanation of the various contours and factors in Rule 19 and why the lack of indispensable parties in this case required its dismissal.

The factual details of this case where provided in a prior Chancery decision profiled on these pages, as well as in a Supreme Court decision that reversed the first Chancery ruling in this case. That high court ruling was also covered on these pages.

Key Takeaways:

  • A thorough examination and analysis of the multi-faceted aspects of Rule 19, and the various factors that need to be applied to determine when a person or entity may be indispensable, is covered on pages 15 to 34 of this opinion.
  • The court observes that a Rule 19 argument may be presented for the first time at trial, based on Rule 12(h)(2), and therefore is not waived per Rule 12(g). See Slip op. at 18.
  • The net impact of the application of this rule can be quite draconian in terms of the wasted time and money and resources expended on litigating the merits of a case–only to reach trial and find that the merits of the case will not be addressed.
  • A much more efficient approach (even if it may necessitate a rule change), would be to require an issue not directly merits-based that has such a drastic impact on a case to be addressed and decided at an earlier stage of a case.