The Delaware Court of Chancery invoked the McWane doctrine last week when it dismissed with prejudice a shareholder lawsuit against Diamond Foods Inc. because the plaintiffs filed lawsuits alleging similar claims in both California state and federal courts prior to pursuing litigation in Delaware. In dismissing the plaintiffs’ claims, the Chancery Court held that their lawsuit cannot proceed in Delaware because they had first chosen to litigate in California.
Established by the Delaware Supreme Court in its 1970 decision McWane Cast Iron Pipe v. McDowell-Wellman Engineering, the McWane doctrine permits a Delaware court to exercise its discretion to stay or dismiss an action "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." Chancellor Leo E. Strine Jr. cited McWane as the principal reason for dismissing the Diamond Foods shareholders’ Delaware lawsuit.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.
For questions call 1-877-256-2472 or contact us at [email protected]
