Delaware Court of Chancery Allows Depositions of Foreign Witnesses to Establish Personal Jurisdiction

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The Delaware Court of Chancery recently addressed the extent to which a plaintiff may depose witnesses for the purpose of establishing personal jurisdiction under a conspiracy theory.

Plaintiff Dennis A. Reid sued Alenia Spazio, Alcatel Alenia Space Italia, S.p.A, and Finmeccanica S.p.A. alleging that defendants conspired to divest U.S. Russian Telecommunications, LLC of its interest in a business venture intended to exploit, for commercial gain, satellite orbital slots controlled by Russia.

The defendants moved to dismiss on the grounds that the Delaware Chancery Court did not have personal jurisdiction. The plaintiff sought to depose several out-of-state witness as part of jurisdictional discovery. The defendants objected on the grounds that: 1) the depositions were cumulative or duplicative of prior discovery, 2) the plaintiff improperly delayed in seeking the requested depositions, and 3) the depositions would be unduly burdensome or expensive.

The Court noted that plaintiffs are generally entitled to reasonable discovery for the purpose of establishing personal jurisdiction and rejected all the defendants’ arguments against the depositions. First, the Court rejected the defendants’ argument that discovery would be cumulative or duplicative, because prior discovery in the case had not sufficiently addressed the personal jurisdiction issue, Second, the Court held that the plaintiff sought the proposed depositions within a reasonable period after receiving documents and responses to interrogatories. Third, while the Court acknowledged the costs of potentially deposing international witnesses in Italy, France and Russia, it held that the defendants were aware of the international expense and obstacles when they entered into the disputed transaction.

The Court concluded that the plaintiff had alleged sufficient facts to establish that the depositions would be relevant to or reasonably calculated to lead to relevant evidence on the issue of personal jurisdiction.

Reid v. Siniscalchi, No. 2874-VCN (Del. Ch. May 25, 2012).