Essential inquiry for litigators as COVID-19 wraths: which cases are ‘fundamental’?

Commercial litigation between organizations influenced by COVID-19 is starting to hit U.S. dockets. In only the previous barely any days, for instance, a California retail designer sued Exxon over a slowed-down $4.2 million property bargain, summoning power Majeure in an offer to hinder the oil organization from offering the property to another purchaser. The Texas proprietor of Star Cinema Grill sued a Mexican film administrator for purportedly pulling out of an arrangement to gain the eat-in cinema. CoronaCide, which makes an FDA-approved test for COVID-19, sued the Wellness Matrix Group for dishonestly indicating to sell its packs, which are just accessible through authorized social insurance suppliers. (Wellbeing Matrix’s CEO said in an email that he “paid (CoronaCide) twice for items that never came”; on Wednesday, the Securities and Exchange Commission suspended exchanging of the organization’s offers until April 22.)

With the economy in dire straits and the virus, killing hundreds of people a day, everything feels like an emergency. That’s entirely understandable. If your deal has cratered or your business is on the verge of going under, you’re going to want to do whatever you can to save it.

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In any case, courts may well have an alternate perspective on what’s essential at present – and litigators would do well to remember that. I’ve just informed you regarding a discussion among investor and corporate guard legal counselors about whether books-and-records requests ought to conceded to give organizations time to settle on essential choices. Commercial litigation is less dynamic. However, it brings up likewise fundamental issues about when the dispute is proper.

Two examples from this week show what I mean. On Monday, a fuel storage company called Buckeye sued GT USA Wilmington, which manages the port in Wilmington, Delaware. Buckeye acquired fuel storage tanks adjacent to the port just weeks ago. In that deal, it inherited a million-dollar fee dispute between G.T. Wilmington and the previous owner of the containers, which contain the fuel that belongs to the distributor of gas to Wawa gas stations and convenience stores throughout Pennsylvania, New Jersey, Delaware, Maryland, and Virginia. According to Buckeye, it engaged in good-faith discussions with G.T. Wilmington about resolving the dispute, so Wawa gas stations – which provide essential services amid the pandemic – can maintain their fuel supply. But according to Buckeye’s complaint, G.T. Wilmington abruptly “blockaded” access to the storage tanks last week, disrupting the supply chain for more than 200 gas stations.

The Delaware Chancery Court complaint and accompanying motion for a temporary restraining order argue that COVID-19 has made the dispute an emergency. “At best, (G.T. Wilmington’s) conduct will cause gasoline prices to increase while millions of Americans file for unemployment benefits,” the brief said. “At worst, those consumers’ — including first responders and health professionals who are critical to providing lifesaving and sustaining measures during the pandemic — access to gasoline could be restricted entirely depending on how long the defendant blockades the Wilmington terminal.”

Vice-Chancellor Travis Lester held a 45-minute telephone hearing on the TRO on Monday afternoon, only hours after Buckeye filed its complaint. On Tuesday afternoon, he entered an order granting Buckeye’s motion to enjoin G.T. Wilmington from blocking access to the storage tanks and from communicating with Buckeye’s customers.