Reid v. Siniscalchi, et al., C.A. No. 2874-VCN (Del. Ch. Jan. 31, 2011). See summary of prior decision of the Delaware Supreme Court in this case here, before the remand which led to the instant opinion by the Court of Chancery.
Issue: The broader issue was whether Court of Chancery Rule 12(b)(2) required dismissal due to lack of personal jurisdiction because the “Entity Defendants” are all organized under the laws of Italy, but the more limited issue in this 35-page decision was the scope of permissible jurisdictional discovery needed in order for the Court to address the issues.
Procedural History: The Delaware Supreme Court reversed a prior dismissal of this suit based on the “sixth prong” of the Delaware Savings Statute, and held that it was error to dismiss based on laches. See 10 Del. C. § 8118(a). On remand, the Chancery Court allowed jurisdictional discovery before it addressed the issue of personal jurisdiction. That was the prelude to the current discovery issue.
Holding: Because Plaintiff has the burden in reply to a Rule 12(b)(2) motion, Plaintiff is entitled to “reasonable discovery in aid of mounting such proof” to support its argument that personal jurisdiction is apt. See footnote 19. But contrasting the authority in footnote 19 are cases cited in footnotes 20 and 22 that limit jurisdictional discovery to issues presented–and to the factual allegations made in the complaint, as well as ultimately the question of personal jurisdiction, as opposed to the proverbial “fishing expedition.”
Overview of the Legal Principles Discussed: The Court discussed the “specific” and the “general” categories of personal jurisdiction analysis, based on the Delaware Long-Arm Statute. See 10 Del. C. § 3104(c). The Court also discusses conspiracy as basis for establishing personal jurisdiction. As described below, this opinion includes basic jurisdictional principles and analysis that would be useful additions to the toolbox of any lawyer engaged in Chancery litigation.
Next, the Court reviewed each contested Request for Production and Interrogatory at issue regarding the scope allowed, compared to the data requested, and observed that where the dividing line cannot be neatly separated, some discovery on the merits is inevitable.
Notably, the Court did not require translations of documents that only existed in their original Italian, unless the translations already had been performed. See footnote 38. To that, I am sure the Italian parties said "grazie".
The Court observed that regular advertising in the state may suffice to establish jurisdiction. The Court also discusses theories under which a court may ignore the separate corporate existence of a parent and subsidiary entity to impose jurisdiction over an affiliated subsidiary, but ownership of stock alone in a Delaware corporation is not enough, ipso facto, to establish personal jurisdiction. See footnotes 64 to 71.