“Mandatory Abstention”
In Principal Growth Strategies v. AGH Parent, the United States District Court for the District of Delaware abstained from the proceeding and granted the plaintiff’s motion to remand to the Delaware Court of Chancery. In an analysis for mandatory abstention, the district court interpreted the language “based upon a State law claim or State law cause of action” for 28 U.S.C. § 1334(c)(2) to include the present action with five state law claims, despite three foreign law claims. Further, the district court held the claims were “related to a case under title 11 but not arising under title 11 or arising in a case under title 11” because: (i) the foreign representatives right under 11 U.S.C. § 1509(f) to sue in state court did not require a chapter 15 case, and (ii) the claims were not created under title 11. Also, the district court held federal courts would not have jurisdiction over the claims but for its relation to the chapter 15 case because there was currently no diversity jurisdiction or federal question jurisdiction. The district court concluded the action could be timely adjudicated in a state forum of appropriate jurisdiction because denial of the motion would not result in consolidation with other ongoing actions in the Southern District of New York, and the Delaware Court of Chancery is well known for its expeditious handling of complex civil litigation. Based in part on the mandatory abstention and lack of adverse impact on the chapter 15 case, the district court remanded the proceeding based on equitable grounds under 28 U.S.C. § 1452(b).