Delaware Business Litigation Report

Court of Chancery Permits Targeted Jurisdictional Discovery to Seek Proof to Support Non-Frivolous Claim of Personal Jurisdiction

HM Life Ins. Co. v. Wilmington Sav. Fund Soc’y, FSB, C.A. No. 2018-0649-SG (Del. Ch. Apr. 9, 2020).

If a plaintiff has pled facts in its complaint to support a non-frivolous claim of personal jurisdiction over a defendant, the Court of Chancery may allow targeted jurisdictional discovery to seek proof that the Court has personal jurisdiction over a defendant in response to a motion to dismiss for lack of personal jurisdiction.

In HM Life Insurance Company v. Wilmington Savings Fund Society, FSB, plaintiffs alleged a coordinated, fraudulent scheme involving reinsurance transactions, trust agreements, and investment vehicles. Plaintiffs asserted that a Delaware statutory trust and its series were created and used for the sole purpose of concealing unauthorized investments and subsequent losses.

Several defendants moved to dismiss for lack of personal jurisdiction. Relying on Hart Holding Co. Inc. v. Drexel Burnham Lambert Inc., 593 A.2d 535 (Del. Ch. 1991), the Court concluded that, because the plaintiffs had alleged sufficient facts to support a non-frivolous claim of the Court’s personal jurisdiction over those defendants, plaintiffs would be permitted to undertake reasonable targeted jurisdictional discovery to seek proof for its claim of personal jurisdiction.

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