285 A.2d 826 | Del. Ch. | 1971
Plaintiff seeks the following relief: (1) an injunction restraining the original defendant from redelivering natural gas sold to it by plaintiff to the intervening defendant Hoechst Polymer Corporation, (2) a declaratory judgment to the effect that its contract with Stauffer for the delivery and sale of such natural gas has been terminated as a result of defendant’s actions, and (3) damages for its alleged loss of profits on the gas which the defendant improperly has redelivered to the intervening defendant Hoechst.
Two motions are now before the Court, first plaintiff’s motion for a preliminary injuction as prayed for, and second, defendant’s motion to stay or dismiss the action. This is the decision of the Court on such motions.
In 1961 Stauffer entered into a twenty year contract for the purchase of natural gas from Eastern. The contract specified, inter alia, the amounts of gas to be delivered each day to Stauffer’s Delaware City plant through Eastern’s gas pipeline and the rate which Stauffer would pay for the gas so delivered. The contract also contained the following provision concerning assignment of the parties’ rights and obligations under the contract:
“Any corporation which shall succeed by purchase, merger or consolidation to the properties, substantially as an entirety, of Seller (Eastern) or Buyer (Stauf-fer), as the case may be, shall be entitled to the rights and shall be subject to the obligations of its predecessor in title under this Contract, and either party may, without relieving itself of its obligations under this Contract, assign any of its rights hereunder to a corporation with which it is affiliated, but otherwise no assignment of this Contract or any of the rights or obligations hereunder shall be made unless there first shall have been obtained the consent thereto of Seller, in the event of an assignment by Buyer, or the consent thereto of Buyer, in the event of an assignment by Seller.”
Prior to December 11, 1970, the defendant Stauffer was affiliated with Stauffer Hoechst Polymer Corporation, its subsidiary, which corporation occupies a space adjacent to Stauffer’s Delaware City plant. Relying on the terms of its contract with Eastern Stauffer permitted such subsidiary to use approximately two percent of the gas which Stauffer was purchasing from Eastern.
On December 11, 1970, Stauffer sold its fifty percent interest in Stauffer Hoechst to American Hoechst, Inc., and Stauffer
Defendant bases its motion to stay or dismiss on the doctrine of primary federal jurisdiction, which, if established, would oust this Court of jurisdiction over plaintiff’s claim, this not being a case of alleged state primary jurisdiction, Pottock v. Continental Can Co., Inc., 42 Del.Ch. 296, 210 A.2d 295. Defendant argues that by reason of the provisions of the Natural Gas Act
As has been made clear by decisions of the courts of this State and of the Supreme Court of the United States, the Natural Gas Act does not abrogate a state court’s jurisdiction to hear cases concerned with interstate distributors of natural gas, Columbian Fuel Corp. v. Superior Court, 2 Storey 365, 158 A.2d 478, aff’d sub. nom. Pan American Petroleum Corp. v. Superior Court, 366 U.S. 656, 81 S.Ct. 1303, 6 L.Ed. 2d 584. Accordingly the test to be applied to determine whether or not state court jurisdiction exists is whether the claims alleged arise under the Natural Gas Act or under state law, the Supreme Court stating in Pan American Petroleum Corp. v. Superior Court, supra, as follows:
“The answers depend on the particular claims a suitor makes in a state court— on how he casts his action. Since 'the party who brings a suit is master to decide what law he will rely upon,’ The Fair v. Kohler Die & Specialty Co., 228 U.S. 22, 25, 33 S.Ct. 410, 411, 57 L.Ed. 716, the complaints in the Delaware Superior Court determine the nature of the suits before it.”
In the cited case the court went on to hold that:
“Their operative paragraphs demand recovery on alleged contracts to refund overpayments in the event of a judicial finding that the Kansas minimum-rate order was invalid, or for restitution of the overpayments by which petitioners have allegedly been unjustly enriched under the compulsion of the invalid Kansas order. No right is asserted under the Natural Gas Act.”
This Court must therefore determine whether or not plaintiff’s claims arise under state contract law or under the overriding federal law, inasmuch as if such claims arise solely under the terms of the Natural Gas Act, a stay or dismissal of this action would be appropriate, Order of Railroad Conductors v. Pitney, 326 U.S. 561, 66 S.Ct. 322, 90 L.Ed. 318, rehearing denied, 327 U.S. 814, 66 S.Ct. 525, 90 L.Ed. 1038 and Armour & Co. v. Alton R. Co., 312 U.S. 195, 61 S.Ct. 498, 85 L.Ed. 771.
In the second count of its complaint plaintiff seeks a declaration by this Court that defendant has breached its contract with plaintiff and that plaintiff has therefore properly terminated such contract in accordance with the provisions thereof which govern contract termination following a breach. It thus appears that in such count plaintiff has stated a claim which may be actionable in a state court, Kansas-Nebraska Natural Gas Co. v. City of Hastings, (D.Neb.) 10 F.R.D. 280. However, because of the limited jurisdiction of this Court, I am satisfied that I cannot properly decide such claim insofar as it seeks a declaratory judgment. In other words, in order for this Court properly to exercise jurisdiction over a claim for a declaratory judgment, there must be some underlying basis for equitable jurisdiction, Jefferson Chemical Co. v. Mobay Chemical Co., Del.Ch., 253 A.2d 512, the test as to whether or not equitable jurisdiction exists being whether or not, in the absence of a prayer for declaratory judgment, the issues presented should be properly disposed of in an equitable as opposed to a legal action, Diebold Computer Leasing, Inc. v. Commercial Credit Corp., Del. Supr., 267 A.2d 586.
As I see it, the only coercive state court relief which plaintiff would be entitled to seek on the present record is damages for an alleged breach of contract, a form of relief not presently sought. Thus, apart from plaintiff’s federal claims, there is no claim of irreparable damage to the plaintiff flowing from the breach claimed which would provide a proper basis for in-junctive relief. Compare City of Wilmington v. Delaware Coach Co., 43 Del.Ch. 343, 230 A.2d 762.
Plaintiff’s motion for a preliminary injunction must therefore be denied, while defendant’s motion to dismiss will be granted on the ground of lack of jurisdiction. The order to be entered, however, shall recognize plaintiff’s right to transfer this case to a court of competent jurisdiction under the provisions of 10 Del.C. § 1901.
An appropriate order may be presented on notice.
. 15 U.S.C. § 717(a) et seq.