In Highway to Health v. Bohn, No. 2018-0707-AGB (Del. Ch. April 15, 2020), a Delaware corporation’s efforts to procedurally outmaneuver its holders of stock appreciation rights with an action for declaratory judgment fell short for lack of personal jurisdiction. The “close, but no cigar” nature of the Delaware Court of Chancery’s decision reminds litigants that specific personal jurisdiction may be established in a variety of ways—including through the “cumulative effect” theory or by enforcement of a forum selection clause against nonsignatories—so long as the claims asserted against the nonresidents arise from or relate to the conduct supporting the jurisdictional theory.

Background

Highway to Health (the company) is a Delaware corporation with its principal place of business in King of Prussia, Pennsylvania. In November 2013, the company and its stockholders entered into a transaction to sell 49% of the company’s common stock. The transaction closed in December 2013.