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Showing 11 posts in Personal Jurisdiction.

Chancery Finds Personal Jurisdiction Over Individual Who Formed Delaware Entities in Connection with a Challenged Merger Transaction

Posted In Chancery, M&A, Personal Jurisdiction


In Re P3 Health Grp. Hldgs., LLC, Consol. C.A. No. 2021-0518-JTL (Del. Ch. Oct. 14, 2022)
The Court of Chancery rejected an individual defendant’s challenge to Delaware’s assertion of personal jurisdiction over him. Although the defendant portrayed himself as merely a shareholder of Delaware entities (which is not in itself a basis for personal jurisdiction), the Court found that he had transacted business in the state for purposes of Delaware’s Long Arm Statute because he also formed two entities as part of a planned merger. It did not offend due process to require the individual to defend litigation related to the merger in Delaware because there was a nexus between his contacts and the claims and because he should have reasonably anticipated that Delaware would exercise jurisdiction over him in litigation arising from the merger.

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Chancery Applies Implied Consent to Service Provision of Delaware LLC Act to LLC’s General Counsel and Chief Legal Officer

Posted In Chancery, LLCs, Personal Jurisdiction


In re P3 Health Group Holdings, LLC, Consol. C.A. No. 2021-0518-JTL (Del. Ch. Sept. 12, 2022)
The plaintiff, a large unit holder in a Delaware LLC, sued several defendants, including the general counsel and chief legal officer of the LLC, for allegedly breaching her fiduciary duties to the LLC and its members for her role in facilitating a challenged de-SPAC merger. The implied consent provision of Section 18-109 of Delaware’s LLC Act provides that “managers” of Delaware LLCs consent to the service of process in Delaware. The statute defines “managers” as both (1) those formally designated as managers, and (2) those who “participate [] materially” in management. Defendant moved to dismiss for lack of personal jurisdiction arguing that Section 18-109 did not apply to her in her role as an officer of the LLC because (1) she was not a designated manager, and (2) she was not acting in a managerial capacity. Plaintiff argued that because the defendant voluntarily assumed the role of a senior officer of the LLC and because, as alleged in the complaint, she acted in a significant managerial capacity with respect to the LLC, the implied consent provision did, in fact, apply. The Court of Chancery agreed with the plaintiff and its decision provides a thorough discussion of the acting manager prong of Section 18-109. The Court reasoned that, at the pleading stage, the customary responsibilities of a general counsel and chief legal officer provided a basis for asserting personal jurisdiction. The specific allegations, in this case, supported a reasonable inference that the defendant acted in a significant managerial capacity in connection with the challenged conduct. 

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Chancery Holds That Controlling Stockholder Approving Exclusive Forum Selection Clause In Charter Amendment Impliedly Consented To Personal Jurisdiction


In Re Carvana Co. S’holders Litig., C.A. No. 2020-0415-KSJM (Del. Ch. Aug. 31, 2022)
In Delaware, parties may waive the requirement of personal jurisdiction either expressly or impliedly. The Court of Chancery applied this waiver principle in In re Pilgrim’s Corporations Derivative Litigation (2019), finding that a controlling stockholder impliedly consented to personal jurisdiction when his Board appointees approved a bylaw selecting the Court of Chancery as the exclusive jurisdiction for certain stockholder disputes. This decision extends and applies Pilgrim’s ruling to a controlling stockholder who personally voted to approve a charter amendment that granted exclusive jurisdiction in the Court of Chancery. More ›

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Non-Resident Asset Managers Found Not To Be “Acting Managers” Subject To Personal Jurisdiction Under Delaware LLC Act

Posted In Chancery, Jurisdiction, LLCs, Personal Jurisdiction


Dlayal Holdings, Inc. v. Gracey, C.A. 2020-1070-LWW (Del. Ch. Dec. 27, 2021)
Under 6 Del. C. § 18-109(a), serving as the manager of a Delaware LLC constitutes consent to be served through the company’s registered agent for all Delaware proceedings “involving or relating to the [company’s] business ... or a violation by the manager ... of a duty” to the company or its members. By its terms, the statute applies not only to formal managers identified in the company’s governing documents but also to acting managers – that is, persons who “participate[] materially in the management” of the company. This case clarifies what constitutes material participation under § 18-109(a). More ›

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Chancery Finds Lack of Personal Jurisdiction Over Delaware Corporate Officers Based on Due Process Considerations

Posted In Chancery, Directors and Officers, Personal Jurisdiction


In re Bam International, LLC v. The MSBA Group Inc., C.A. No. 2021-0181-SG (Del. Ch. Dec. 14, 2021)
Two officers of a Delaware corporation were sued for alleged tortious interference with an escrow agreement between the Delaware corporation employing the officers and the plaintiff (another Delaware corporation). The plaintiff also brought a breach of contract claims against the Delaware corporation and other entity defendants. The two officers moved to dismiss for lack of personal jurisdiction arguing that, other than their status as officers of a Delaware corporation, they had no relationship with Delaware. The officers further noted that they were not signatories to the contract at issue, which, in any event, was only connected to Delaware by choice of law and forum clauses. Plaintiff contended that the officer defendants, as fiduciaries of a Delaware entity, had implicitly consented to jurisdiction pursuant to 10 Del. C. § 3114(b). More ›

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Superior Court Rejects Insurers’ Motions to Dismiss Coverage Dispute Based upon Ripeness and Lack of Personal Jurisdiction

Posted In CCLD, Insurance, Personal Jurisdiction

Energy Transfer Equity, L.P. v. Twin City Fire Insurance Co., et al., C.A. No. N19C-11-009 EMD CCLD (Del. Super. Ct. Sept. 25, 2020)

Energy Transfer Equity, L.P. v. Twin City Fire Insurance Co., et al., C.A. No. N19C-11-009 EMD CCLD (Del. Super. Ct. Sept. 28, 2020) 

Plaintiffs-Insureds sought declaratory relief and damages for Defendants-Insurers anticipatory breach of directors’ and officers’ insurance policies. Defendant Twin City Fire Insurance Co. issued the primary policy, and the remaining Defendants issued excess coverage policies. Plaintiffs specifically sought insurance coverage related to litigation in the Court of Chancery (“Dieckman Action”), in which trial had occurred but no decision had been issued. More ›

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Chancery Rejects Conspiracy Jurisdiction Over Foreign Defendant

Posted In Chancery, Personal Jurisdiction

Lacey v. Mota-Velasco, C.A. No. 2019-312-SG (Del. Ch. Oct. 6, 2020)

Under Istituto Bancario, a foreign defendant alleged to be part of a conspiracy may be subject to personal jurisdiction in Delaware, but only if the plaintiff alleges, among other requirements, and consistent with the Delaware long-arm statute and due process, an act in Delaware in furtherance of the conspiracy. Conspiracy jurisdiction is not an independent basis of jurisdiction but rather provides a framework by which the Delaware courts evaluate whether there are sufficient minimum contacts to justify the exercise of personal jurisdiction.  More ›

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Chancery Declines to Apply Status Quo Order to Prevent Sale of Litigant’s Personal Interest in Indirect Foreign Subsidiary of Delaware LLC

Posted In Chancery, Control Disputes, Personal Jurisdiction

Carlos Eduardo Lorefice Lynch v. R. Angel Gonzalez Gonzalez, C.A. No. 2019-0356-MTZ (Del. Ch. June 22, 2020)

In this control dispute, the Delaware Court of Chancery denied a motion to amend a status quo order, finding that the proposed amendment would require the Court to enforce orders beyond its jurisdictional purview.  More ›

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Court Finds LLC Manager Consent Statute Authorizes Personal Jurisdiction for Tort Claims Related to the Company, Not Just Alleged Breaches of Managers’ Duties; However, Court Dismisses Investor Defendants with Insufficient Delaware Contacts

Posted In Personal Jurisdiction

CLP Toxicology, Inc. v. Casla Bio Holdings LLC, C.A. 2018-0783-PRW (Del. Ch. Jun. 29, 2020) & NC18C-10-332 PRW CCLD (Del. Super. Jun. 29, 2020)

In both the corporation and LLC contexts, Delaware law employs consent statutes, which authorize personal jurisdiction over officers and directors of corporations and over managers (in name or in fact) of LLCs. Despite broad language in such statutes, courts traditionally interpreted the statutes to apply to only claims related to breaches of fiduciary or statutory duties. As demonstrated here, however, the modern trend is to interpret consent statutes to apply to a broader range of claims related to the entity. More ›

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Chancery Dismisses Action Involving Unusual Issue of Personal Jurisdiction

Posted In Chancery, Forum Selection Provisions, Personal Jurisdiction

Sustainability Partners LLC, v. Jacobs, C.A. No. 2019-0742-SG (Del. Ch. June 11, 2020)

In this action involving “an unusual issue of personal jurisdiction,” plaintiff Sustainability Partners LLC (“SP” or the “Company”) sought a declaratory judgment that defendant, a former SP employee (the “Defendant” or “Jacobs”), had no rights under a purported oral agreement between the Defendant and the Company. Despite the fact that Jacobs was not a signatory, the Company claimed that there was personal jurisdiction over Jacobs pursuant to the forum selection clause in the Company’s Operating Agreement based on a theory of equitable estoppel. The Court of Chancery disagreed and dismissed the action for lack of personal jurisdiction pursuant to Chancery Court Rule 12(b)(2).  More ›

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Chancery Finds Lack of Personal Jurisdiction Over Employee Defendants in Stock Appreciation Rights Dispute

Posted In Chancery, Personal Jurisdiction

Highway to Health, Inc. v Bohn, C.A. No. 2018-0707-AGB (Del. Ch. Apr. 15, 2020).
To establish personal jurisdiction over a nonresident defendant under the Delaware long-arm statute, 10 Del. C. § 3104, a plaintiff must show that: “(1) there is a statutory basis for exercising personal jurisdiction; and (2) subjecting the nonresident defendant to jurisdiction in Delaware would not violate the Due Process Clause of the Fourteenth Amendment.”  More ›

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