INCORPORATING IN TEXAS DOES NOT MAKE IT A CONVENIENT FORUM

Grynberg v. Grynberg
Dallas Court of Appeals (November 28, 2017)
Justices Bridges, Fillmore, and Stoddart (Opinion here)
A family dispute over control of a Texas corporation erupted in two competing lawsuits, one in Texas followed by another in Colorado, where all the parties resided. The Texas action was dismissed on forum-non-conveniens grounds, and the Dallas Court of Appeals affirmed.

Jack Grynberg incorporated Pricaspian in Texas in 1993 to hold and invest in mineral-related assets. He also caused Grynberg Production Corporation (GPC), his wholly-owned entity, to assign to Pricaspian the rights to his valuable oil and gas projects in Kazakhstan. He later assigned shares in Pricaspian to his wife and three adult children, who became directors of the company and (according to Jack) received approximately $160 million over a twenty-year period. In 2015, the board of directors began to strip Jack of his authority, replaced him as president, and ultimately removed him from the board. In response, Jack and GPC filed a declaratory judgment action in Texas to confirm revocation of the previous assignments of the Pricaspian shares to Jack’s wife and children. The defendants filed a forum-non-conveniens motion to dismiss the Texas lawsuit, and initiated a competing lawsuit in Colorado.

The parties’ affidavits and other evidence established that Pricaspian’s Texas incorporation was the lawsuit’s only connection to the state. Pricaspian’s offices, corporate records, shareholders, officers, and directors were all located “within a twenty-mile radius of Denver, Colorado,” as were the relevant documents and potential witnesses. Although the “internal affairs” of Pricaspian would be governed by Texas law, that is a conflict-of-laws principle, not a matter of subject-matter jurisdiction, so did not require adjudication by a Texas court. Plaintiffs’ choice of forum was given little deference, since they were not Texas residents. And both the public- and private-interest “Gulf Oil” factors heavily favored Colorado as the more convenient forum for resolving the dispute. The trial court therefore did not abuse its discretion in dismissing the Texas action.

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