In Zync, Inc. v. Porsche Investments Management, S.A., et al., C.A. No. 2025-0284-JTL, the Delaware Court of Chancery dismissed defendant Ulrich Thiem for lack of personal jurisdiction after concluding that the alleged Delaware contacts did not satisfy either Delaware’s long-arm statute or its conspiracy jurisdiction doctrine. The Court held that (1) entering into agreements governed by Delaware law did not constitute a Delaware-directed act; (2) appointing a director to the board of a Delaware corporation did not constitute a Delaware-directed act sufficient to support personal jurisdiction; and (3) the absence of hypothetical Delaware filings that would have accompanied proposed financing transactions lacked the required causal nexus to the plaintiff’s alleged injuries.
Legal Analysis
Thiem moved to dismiss the claims against him pursuant to Court of Chancery Rule 12(b)(2), arguing that the Court lacked personal jurisdiction over him. Thiem contended that he neither performed an act nor committed an omission in Delaware sufficient to subject him to jurisdiction under Delaware’s long-arm statute or conspiracy jurisdiction doctrine.
- Zync’s First Theory: Delaware-Directed Acts
Zync argued that personal jurisdiction existed because Thiem participated in the execution of the Porsche Note, Investor Agreement, and Voting Agreement, each of which selected Delaware law, and because Porsche exercised its contractual right to appoint Christian Knörle to the board of a Delaware corporation.
The Court rejected both arguments.
First, the Court held that the existence of Delaware choice-of-law provisions did not transform the execution of the agreements into Delaware-directed acts. The Court explained that a Delaware choice-of-law provision, standing alone, is not a Delaware-directed act and does not establish a sufficient jurisdictional connection to Delaware.
Second, the Court held that appointing a director to the board of a Delaware corporation was not itself a Delaware-directed act. The Court observed that no Delaware decision had treated the appointment of a director, standing alone, as conduct directed toward Delaware for jurisdictional purposes. The Court further reasoned that, even if the appointment could have jurisdictional significance, the appointment right belonged to Porsche, making the act attributable to Porsche rather than Thiem individually.
- Zync’s Second Theory: Delaware-Based Omissions
Zync also advanced an omission-based theory under Delaware’s long-arm statute and conspiracy jurisdiction doctrine.
According to Zync, the venture capital financing and private equity transaction would have closed but for defendants’ misconduct. Had those transactions closed, they would have required filings with the Delaware secretary of state. Zync argued that the absence of those filings constituted an omission in Delaware sufficient to support jurisdiction over Thiem.
The Court rejected the argument.
While acknowledging the creativity of the theory, the Court emphasized that Delaware’s long-arm statute requires a plaintiff’s claim to arise from the alleged omission. The Court reasoned that Zync’s alleged injury was the loss of the financing opportunities themselves. Any Delaware filing obligation would have arisen only after the transactions closed and therefore could not have caused the alleged injury.
The Court further explained that the omission of a Delaware filing was merely a collateral consequence of the alleged misconduct. The omission that allegedly caused the injury was Knörle’s failure to approve the financings, but that omission occurred outside Delaware and therefore could not serve as a jurisdiction-conferring omission under Delaware law. Because the hypothetical Delaware filings neither formed the basis of Zync’s claims nor bore a causal connection to its alleged injuries, they could not support personal jurisdiction over Thiem.
- The Court’s Ruling
The Court concluded that Zync failed to plead a reasonable basis for exercising personal jurisdiction over Thiem under either Delaware’s long-arm statute or conspiracy jurisdiction doctrine. Accordingly, the Court granted Thiem’s motion to dismiss for lack of personal jurisdiction.
Takeaways
The decision reinforces that Delaware courts will carefully police the limits of personal jurisdiction over nonresident actors, even in disputes involving Delaware corporations. The opinion demonstrates that contractual relationships governed by Delaware law, governance rights associated with Delaware entities, and indirect effects on Delaware corporate filings will not necessarily suffice to establish jurisdiction absent conduct purposefully directed at Delaware and a sufficient causal connection between the alleged Delaware contact and the plaintiff’s claims.
Practitioners evaluating personal jurisdiction over nonresident defendants should carefully analyze whether the alleged acts or omissions are genuinely directed toward Delaware and whether the plaintiff’s claims arise from those contacts, rather than merely relating to them in a broader sense. The decision also underscores that collateral consequences occurring in Delaware will not support jurisdiction when the conduct that allegedly caused the injury occurred elsewhere.
* Brandon Choi, a summer associate at the firm not yet admitted to the bar, contributed to this alert.