282 A.3d 1054
Del. Ch.2022Background
- P3 Health Group Holdings, LLC is a Delaware manager-managed LLC; Chicago Pacific controlled the Board and Hudson held veto rights over affiliated transactions.
- In 2021 P3 pursued a merger with SPAC Foresight; Hudson alleges the Board (and certain officers) excluded Hudson Managers and misled them about the process and legal advice.
- Jessica Puathasnanon was P3’s general counsel and chief legal officer; Hudson’s amended complaint asserts fiduciary-duty breaches by Puathasnanon (Counts IX–X) arising from her role in the Merger.
- Hudson served Puathasnanon under the LLC Act’s implied-consent provision, 6 Del. C. § 18-109(a), alleging she was an “acting manager” who “participate[d] materially in the management” of the LLC.
- Puathasnanon moved to dismiss under Ct. Ch. R. 12(b)(2) for lack of personal jurisdiction. The Court found the pleading-stage record supports an inference she materially participated (advising Board, working with outside counsel, preparing minutes and materials) and denied the motion.
- The court held that implied consent via § 18-109(a) and minimum-contacts/due-process principles are satisfied for claims tied to her managerial/officer role; jurisdictional discovery (overlapping with merits) is available.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Service under 6 Del. C. § 18-109(a): is Puathasnanon a “manager” (acting manager) for service? | Hudson: Puathasnanon as GC/CLO materially participated in management and thus is an acting manager under § 18-109(a)(ii). | Puathasnanon: She was not a formal manager and did not materially participate; her role was ministerial. | Held: At pleading stage, allegations (advice to Board, coordinating with outside counsel, preparing minutes, circulating final docs) permit inference she participated materially; service under § 18-109(a) is proper. |
| Meaning of “participates materially in the management” (scope/test) | Hudson: Plain meaning and analogous tax-law/material‑participation tests support finding senior officers who work full-time and perform managerial functions qualify. | Puathasnanon: The phrase should not be read to reach C‑suite officers absent specific statutory text naming them. | Held: Court adopts a contextual/plain-meaning approach; tax-law tests inform but do not control; senior officers performing customary managerial duties can qualify as acting managers. |
| Applicability of corporate-officer consent analogy (10 Del. C. § 3114) | Hudson: Corporate statute explicitly reaches C‑suite (including CLO); LLC Act’s flexible structure calls for an encompassing rule—§ 18-109 should reach comparable LLC officers. | Puathasnanon: § 18-109 omits specific officer titles (unlike § 3114), so it was not intended to reach CLOs. | Held: Analogy is persuasive; § 18-109’s title-agnostic formulation fits LLC flexibility and reaches senior officers who materially participate; omission of titles does not exclude officers. |
| Due process/minimum contacts for implied consent jurisdiction | Hudson: By accepting a senior officer role in a Delaware LLC and acting in that capacity, Puathasnanon implicitly consented and reasonably anticipated Delaware litigation about those duties. | Puathasnanon: Challenges contacts and fairness (argues insufficient nexus to Delaware). | Held: Due process satisfied—claims centrally concern her duties as an officer of a Delaware LLC; implied consent and forum state interest make jurisdiction constitutional. |
Key Cases Cited
- Ryan v. Gifford, 935 A.2d 258 (Del. Ch. 2007) (implied consent statute supports jurisdiction over corporate officers for claims tied to their officer duties)
- Matthew v. Fläkt Woods Gp. SA, 56 A.3d 1023 (Del. 2012) (two-part personal-jurisdiction framework: valid service + minimum contacts/due process)
- Int'l Shoe Co. v. Washington, 326 U.S. 310 (U.S. 1945) (established minimum-contacts standard for due process)
- Assist Stock Mgmt., L.L.C. v. Rosheim, 753 A.2d 974 (Del. Ch.) (Delaware recognizes implied consent for managers/officers where claim centers on manager’s duties)
- AeroGlobal Capital Mgmt., LLC v. Cirrus Indus., Inc., 871 A.2d 428 (Del. 2005) (analysis of minimum contacts in corporate-context jurisdiction disputes)
- In re Am. Int'l Group, Inc., 965 A.2d 763 (Del. Ch. 2009) (discussion of corporate-officer jurisdictional reach)