The “implied consent” statute of 10 Del. C. § 3114 provides that a nonresident officer or director of a Delaware corporation consents to the exercise of personal jurisdiction over that individual “in all civil actions or proceedings brought in this State, by or on behalf of, or against such corporation, in which [she] is a necessary or proper party, or in any action or proceeding against [her] for violation of a duty in such capacity.”
Traditionally, the Court of Chancery has interpreted Section 3114 to allow personal jurisdiction over a nonresident director or officer only if he or she was alleged to have breached a fiduciary duty to the corporation that they served. See, e.g., Microsoft Corp. v. Amphus, Inc., 2013 WL 5899003, at *9 (Del. Ch. Oct. 31, 2013) (“[F]or a nonresident director or officer of a Delaware corporation to be subject to personal jurisdiction in Delaware under Section 3114, the plaintiff must allege that the director or officer, acting in that capacity, breached a fiduciary duty to the Delaware corporation that they serve.”).
The recent Delaware Supreme Court opinion of Hazout v. Tsang Mun Ting, 134 A.3d 274 (Del. 2016) has significantly changed this analysis. In that opinion, the High Court held that Section 3114 permits jurisdiction over a nonresident director or officer of a Delaware corporation in any civil action in which the corporation is a party and the director or officer is a “necessary or proper party.”
This decision overturned a long line of Court of Chancery decisions that limited jurisdiction over nonresident directors under Section 3114 to actions involving alleged breaches of a fiduciary or statutory duty owed by the nonresident director or officer to the corporation or its stockholders. Accordingly, following Hazout, a nonresident director or officer of a Delaware corporation may be subject to personal jurisdiction in Delaware if they are deemed to be a “necessary and proper party” to the lawsuit, regardless of whether a breach of fiduciary duty claim was plead against such individual.