IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

SUSTAINABILITY PARTNERS LLC,

Plaintiff,

)

)

)

)

v. )

)

C.A. No. 2019-0742-SG

JOEL JACOBS, )

)

Defendant. )

MEMORANDUM OPINION

Date Submitted: March 20, 2020

Date Decided: June 11, 2020

Kathleen M. Miller and Jason Z. Miller, of SMITH, KATZENSTEIN & JENKINS 

LLP, Wilmington, Delaware, Attorneys for Plaintiff.

Jeffrey Goddess, of COOCH AND TAYLOR, P.A., Wilmington, Delaware: OF 

COUNSEL: Robert A. Goodin, of GOODIN, MACBRIDE, SQUERI & DAY, LLP, 

San Francisco, California, Attorneys for Defendant.

GLASSCOCK, Vice Chancellor
1

This action contains an unusual issue of personal jurisdiction. The Defendant, 

Joel Jacobs, had been an at-will employee of the Plaintiff, Sustainability Partners 

LLC (“SP” or the “Company”). His employment was terminated; shortly thereafter, 

he was engaged by the Company as an independent contractor. The Company

presented Jacobs with a form of independent contractor agreement. Jacobs was 

unsatisfied with the agreement, and declined to enter it, expressing that whatever 

agreement the parties reached should include a substantial equity transfer to Jacobs. 

Jacobs continued to work for the Company for a little more than a year as an 

independent contractor, at which point he was fired for disparaging SP. After his 

termination, Jacobs communicated to the Company that he considered SP in breach 

of a purported oral agreement (the “Oral Agreement”) to transfer equity to him, made 

by SP’s CEO.

The Plaintiff—the natural defendant of a breach of contract action based on 

the Oral Agreement—brought this declaratory judgment action, seeking a 

declaration that Jacobs has no rights under the Oral Agreement.

1

 Jacobs, a California 

resident, has moved for dismissal on the ground that this Court is without personal 

jurisdiction over him. The only ground on which the Company asserts personal 

jurisdiction is through the forum selection clause in its Operating Agreement, which 

 

1 As described below, I dismissed a second request for declaratory judgment—that Jacobs is not 

an equity holder in the Plaintiff—from the bench after oral argument as moot.
2

provides for a Delaware forum. The Plaintiff’s theory is that if Jacobs had an 

enforceable agreement to receive equity, as he contends, as an equity holder he 

would be subject to the Operating Agreement and its forum selection clause; 

therefore, he should be deemed to have consented to Delaware jurisdiction. It notes

that, as the party to a prior equity agreement—which never vested—Jacobs was a 

signatory to a prior version of the Operating Agreement, and was well aware of its 

forum selection clause. Jacobs asserts that he does not contend that he is an equity 

holder in SP, nor has he or will he assert a right to specific performance of the Oral 

Agreement. He only seeks damages for breach of the Oral Agreement.

Thus the parties’ positions as to jurisdiction are as turned about as is their 

status as Plaintiff and Defendant. The Company denies that any agreement exists 

under which Jacobs was entitled to equity. It maintains that had the Oral Agreement

existed, however, it would have provided (via the Operating Agreement) for 

Delaware jurisdiction. As a consequence, per SP, it may hale Jacobs into this Court 

to defend against its assertion that the Oral Agreement does not exist. Jacobs, 

conversely, claims that he was entitled to equity in SP, but that he never received it. 

Therefore, he argues, he is not an equity holder subject to the Operating Agreement, 

and has not submitted to Delaware jurisdiction thereby.

An agreement to litigate in Delaware can serve as a consent to the jurisdiction 

of this Court. However, on examination of the allegations here, I note that neither 
3

party is asserting that Jacobs is a party to the Operating Agreement. Instead, the 

Plaintiff argues that the consequence of the Oral Agreement as asserted by Jacobs—

the existence of which the Company denies—is that Jacobs has consented to 

Delaware jurisdiction. Such a decision would, to my mind, contain more of 

metaphysics than jurisprudence. For the reasons that follow, I find that this Court 

lacks personal jurisdiction over Jacobs; accordingly, the matter is dismissed.

I. BACKGROUND2

A. The Parties

Plaintiff SP is a Delaware limited liability company with its principal place of 

business in Arizona.3

Defendant Jacobs is a former employee of SP and a resident of California.4

B. Factual Background

SP’s predecessor, GSV Sustainability Partners, Inc. (“GSV”), hired Jacobs on 

February 3, 2016 as an independent consulting contractor.5

 In July 2016, SP was 

formed and purchased all GSV’s assets.6

 A month later, in August 2016, SP entered 

 2 I draw all facts from the Plaintiff’s Verified Amended Complaint for Declaratory Relief, D.I. 6 

(“Am. Compl.”) and documents incorporated therein. As discussed further below, all well-pled 

facts are considered true for the sake of this motion.

3 Am. Compl., ¶ 4.

4 Id. ¶¶ 5, 17.

5 Id. ¶ 17.

6 Id. ¶ 8.
4

an employment agreement with Jacobs (the “Employment Agreement”).7

 At the 

same time as he entered the Employment Agreement, Jacobs executed an At-Will 

Employment, Confidential Information and Invention Assignment Agreement (the 

“Confidentiality Agreement”), and an Equity Grant Agreement (the “Equity Grant 

Agreement”).8

The Equity Grant Agreement entitled Jacobs to 471 Class C Units vesting over 

the course of the next four years.9

 Vesting would cease upon termination.10 SP’s 

operating agreement (the “Operating Agreement”) contains several requirements 

related to issuing membership units, including Class C Units. The Operating 

Agreement states that “[t]he rights and obligations of holders of Class C Units . . . 

shall be as set forth in the Securityholders Agreement and the Management 

Subscription Agreement by which such Class C Units are awarded and, to the extent 

applicable, this Agreement. . .”11 The Operating Agreement defines “Management 

 7 Id. ¶ 17.

8 Id. The Equity Grant Agreement was governed by Delaware law. Id. ¶ 21. Although not 

included in the Complaint, SP states in its briefing that “in connection with an equity grant in 2016 

. . . Jacobs signed the Amended and Restated Limited Liability Company Agreement, dated as of 

August 22, 2016.” Pl.’s Answering Br. in Opp’n to Def.’s Mot. to Dismiss, D.I. 9 (“Pl.’s 

Answering Br.”), at 2–3. In other words, Jacobs signed a previous version of the Company’s 

operating agreement, which the current version subsequently superseded. Pl.’s Answering Br., at 

2–3. He did not sign the current version of the operating agreement. Pl.’s Answering Br., at 3 

(“[Plaintiff] agree[s] that [Jacobs] did not sign the SP Operating Agreement after the alleged oral 

agreement in July 2017. . .”).

9 Am. Compl., ¶ 19.

10 Id. ¶ 20.

11 Id. ¶ 10.
5

Subscription Agreement” as “any and all of the subscription agreements, 

contribution agreements, grant agreements or other similar agreements pursuant to 

which the Company may issue any Membership Interest to any of its Subsidiaries’

officers, managers, directors, employees, consultants or independent contractors of 

the Company . . . .”12 The Operating Agreement further provides that “[a]ll 

Membership Interests shall be represented by Units.”13 In short, an owner of SP’s 

equity becomes a member subject to the Operating Agreement and must enter a 

“Management Subscription Agreement” with the Company.

14

SP’s Operating Agreement contains a forum selection clause:

Any and all suits, legal actions or proceedings arising out of this 

Agreement (including against any manager or officer of the Company) 

shall be brought solely in the state or federal courts of the State Of 

Delaware sitting in the county, city and state of Delaware, and each 

member hereby submits to and accepts the exclusive jurisdiction of 

such courts for the purpose of such suits, legal actions or proceedings.15

 12 Id. ¶ 11.

13 Id. ¶ 12.

14 See id. ¶¶ 13–14. The Operating Agreement also contains various payout restrictions based on 

the unit class. Id. ¶ 15.

15 Id. ¶ 16 (original in caps). There is, I note, no “County of Delaware” in the State of Delaware. 

There is a Delaware City in this state, but I take judicial notice of the fact that no state or federal 

court sits in Delaware City.
6

On April 12, 2017, the parties amended Jacobs’ Employment Agreement.16 

As a part of that amendment, Jacobs released all claims against the Company, 

including:

any and all claims relating to, or arising from, [the] right to purchase, 

or actual purchase of shares of stock or equity interest of the Company; 

(g) any claims arising out of or related to the Employment Agreement; 

and (h) any and all other claims arising from [the] employment 

relationship with, or equity ownership in, the Company or its 

subsidiaries.17

SP terminated Jacobs’ employment on June 30, 2017, before any of his equity 

vested.18 Following his termination as an employee, Jacobs resumed work for SP

the next month as an independent contractor.19 It appears that the parties intended 

the independent contractor position to be temporary while Jacobs transitioned back 

to employee status.20 As a part of the new position, SP’s CEO, Thomas Cain, 

provided Jacobs with an independent contractor agreement.21 Jacobs informed Cain

that he wanted a revised or a new agreement, but Cain told him to mark up the 

existing agreement with his proposed changes.22 Jacobs did not revise the 

 16 Id. ¶ 22.

17 Id. Jacobs received $50,000 in cash for the release. Id. ¶ 32.

18 Id. ¶ 23.

19 Id. ¶¶ 24–25.

20 Id. ¶ 40.

21 Id. ¶¶ 24, 38.

22 Id. ¶ 38.
7

agreement; instead, he emailed Cain with comments, including, regarding equity 

ownership, that he thought a “15% to 17.5% total equity” range might be 

acceptable.23 Jacobs expressed dissatisfaction with the proposed equity vesting 

schedule, but he did not suggest a new one.

24 Although Jacobs never signed the 

independent contractor agreement, the parties operated under it going forward.25 

Jacobs confirmed his independent contractor status multiple times.

26

Around this time, Jacobs was attempting to obtain a personal loan.27 To this 

end, a few days after their exchange regarding the independent contractor agreement,

Jacobs emailed Cain seeking confirmation of various financial information to 

provide to his lender.

28 Among other things, he sought to confirm his equity 

ownership status: “Equity: To be determined but currently expected at 15% or 

higher.”29 Cain responded, “Confirmed.”30

The parties came into conflict in November 2018 when Jacobs made 

disparaging comments regarding SP that caused it to lose an investment.31 SP 

 23 Id.

24 Id. ¶ 39.

25 See id. ¶¶ 41–42.

26 Id. ¶¶ 26–28.

27 Id. ¶ 43.

28 Id.

29 Id.

30 Id.

31 Id. ¶ 29.
8

allowed Jacobs to continue to work as an independent contractor after receiving 

assurance that he would not repeat the comments or speak to other investors.

32 On 

April 16, 2019, SP terminated its independent contractor relationship with Jacobs.33 

Instead of cutting ties completely, it offered to re-categorize him as a “Development 

Partner” with reduced compensation and a new equity grant plan.34 It revoked that 

offer three days later when it learned that Jacobs had once again disparaged SP to 

customers.35

After his relationship with SP ended, Jacobs asserted that he had a contractual 

right to a 15% equity interest in the Company by way of an agreement with CEO 

Thomas Cain, which I have referred to here as the Oral Agreement.

36

C. Procedural History

Plaintiff SP filed its initial complaint seeking a declaratory judgment on 

September 16, 2019.37 Defendant Jacobs moved to dismiss on October 10, 2019.38 

The Plaintiff filed an amended complaint (the “Amended Complaint”) on December 

 32 Id.

33 Id. ¶ 30.

34 Id.

35 Id. ¶ 31.

36 See id. ¶¶ 35–37.

37 Verified Compl. for Declaratory J. that Def. is not an Equity Owner, D.I. 1.

38 Def.’s Mot. to Dismiss for Lack of Jurisdiction and Insufficiency of Service, D.I. 3.
9

16, 2019.39 The Defendant moved to dismiss the Amended Complaint on January 

15, 2020.40 The Amended Complaint contains two counts for Declaratory

Judgement: that Jacobs is not an equity holder in SP (Count I); and that SP has no 

contractual obligation to issue equity to Jacobs (Count II). At argument on March 

20, 2020, I dismissed the Plaintiff’s first Count as moot, based on Jacobs’ agreement

that he is not a member of or equity holder in SP.

41 I took the question of jurisdiction 

regarding Count II under consideration at that time.

II. ANALYSIS

SP brings two counts for declaratory judgment under 10 Del. C. § 6501. That 

statute vests this Court with “power to declare rights, status and other legal relations 

whether or not further relief is or could be claimed . . . The declaration may be either 

affirmative or negative in form and effect, and such declaration shall have the force 

and effect of a final judgment or decree.”42 As described above, in Count I of its 

Amended Complaint, SP seeks a declaration that “Jacobs (i) owns no equity in the

Company, (ii) is not a Member, [and] (iii) owns no Membership Interest in the 

 39 Verified Am. Compl. for Declaratory Relief, D.I. 6.

40 Def.’s Mot. to Dismiss for Lack of Jurisdiction and Insufficiency of Service, D.I. 8.

41 At the time I dismissed Count I, the Plaintiff sought an order that confirmed Jacobs’ concession 

of his non-ownership status. I found such an order unnecessary. Because Jacobs represented to 

the Court unequivocally that he is not and never was an owner of SP equity, and because I relied 

on that assertion in granting his request to dismiss Count I, Jacobs is judicially estopped from 

representing the contrary in subsequent litigation. He conceded as much at oral argument.

42 10 Del. C. § 6501.
10

Company. . .”43 Because Jacobs affirmed all these statements, I dismissed Count I 

as moot at argument.

In Count II, SP seeks a declaration that “the Company did not form a contract 

for the issuance of Units to Jacobs and accordingly, Jacobs has no claim for damages 

for breach of contract.”44 In other words, rather than waiting to defend a contract 

action brought by Jacobs, SP seeks to forestall such an action through a declaration 

from this Court that no such contract existed. Jacobs seeks to dismiss Count II for 

lack of personal jurisdiction under Chancery Court Rule 12(b)(2) as well as lack of 

subject matter jurisdiction under Rule 12(b)(1).45 I find that this Court lacks personal 

jurisdiction over Jacobs, and so I grant his Motion to Dismiss on that ground and do 

not address the parties’ subject matter jurisdiction arguments.

A. Personal Jurisdiction

Jacobs has moved to dismiss the Plaintiff’s claim under Chancery Court Rule 

12(b)(2) for lack of personal jurisdiction.46 When faced with a motion to dismiss 

pursuant to Rule 12(b)(2), “the plaintiff bears the burden of showing a basis for the 

 43 Am. Compl., at 20, Prayer for Relief.

44 Am. Compl., at 20, Prayer for Relief.

45 Ch. Ct. R. 12(b)(1)-(2).

46 Ch. Ct. R. 12(b)(2). Jacobs also moved to dismiss under Rules 12(b)(4) and 12(b)(5) for 

insufficiency of process and service of process but did not argue on these grounds in his briefing 

or at argument. To the extent not waived they are mooted by my finding in this Opinion.
11

court’s exercise of jurisdiction over the defendant.”47 When ruling on a 12(b)(2) 

motion, the court may consider the pleadings, affidavits, and any discovery of 

record—where no evidentiary hearing has been held, “the plaintiff[] need only make 

a prima facie showing of personal jurisdiction and the record is construed in the light 

most favorable to the plaintiff.”48 In considering a 12(b)(2) motion, the court 

employs a two-step analysis: “the court must first determine that service of process 

is authorized by statute and then must determine that the exercise of jurisdiction over 

the nonresident defendant comports with traditional due process notions of fair play 

and substantial justice.”49

Here, SP argues that Jacobs is bound by the forum selection clause in SP’s 

Operating Agreement. “A forum selection clause is one avenue to expressly consent 

to personal jurisdiction.”50 If a party gives consent expressly through a forum 

selection clause, then the second prong of the analysis—due process—is satisfied.

51 

 47 Ryan v. Gifford, 935 A.2d 258, 265 (Del. Ch. 2007) (citing Werner v. Miller Tech. Mgmt., L.P., 

831 A.2d 318 (Del. Ch. 2003)).

48 Id. (internal citations and quotation marks omitted).

49 Id. (citing Amaysing Techs. Corp. v. CyberAir Commc’ns., Inc., 2005 WL 578972, at *3 (Del. 

Ch. Mar. 3, 2005)).

50 Alstom Power Inc. v. Duke/Flour Daniel Caribbean S.E., 2005 WL 407206, at *2 (Del. Super.

Jan. 31, 2005) (citation omitted).

51 Capital Grp. Cos., Inc. v. Armour, 2004 WL 2521295, at *2 (Del. Ch. Nov. 3, 2004) (if a party 

is bound by a forum selection clause, a minimum contacts analysis is not required).
12

Jacobs did not sign SP’s Operating Agreement.52 SP asserts that he is nonetheless 

bound. It relies on the principle of equitable estoppel, which “prevents a nonsignatory to a contract from embracing the contract, and then turning her back on 

the portions of the contract, such as a forum selection clause, that she finds 

distasteful.”53

To address whether a non-signatory may nonetheless be bound to a forum 

selection clause in a contract, this Court has developed a three-step analysis adopted

from federal case law and elaborated in Capital Group Cos. v. Armour:

54 “First, is 

the forum selection clause valid? Second, are the defendants third-party 

beneficiaries, or closely related to, the contract? Third, does the claim arise from 

their standing relating to the . . . agreement?”55 For a non-signatory to be bound by 

a contract’s forum selection clause, the answer to all three questions must be yes.56 

 52 As noted in the factual recitation, as a part of his original employment with SP, Jacobs signed a 

previous version of the operating agreement no longer in effect. According to SP, this shows that 

he is “no stranger” to the Operating Agreement. Pl.’s Answering Br., at 2–3. SP does not argue 

that signing a previous version, of itself, confers personal jurisdiction with regard to a separate 

Operating Agreement, or that it makes Jacobs a party to the current Operating Agreement.

53 Capital Grp., 2004 WL 2521295, at *6 (quoting Int’l Paper Co. v. Schwabedissen Maschinen 

& Anlagen GMBH, 206 F.3d 411, 418 (4th Cir. 2000)).

54 2004 WL 2521295 (Del. Ch. Oct. 29, 2004).

55 Id. at *5 (citing Hadley v. Shaffer, 2003 WL 21960406, at *4 (D. Del. Aug. 12, 2003)).

56 Neurvana Med., LLC v. Balt USA, LLC, 2019 WL 4464268, at *3 (Del. Ch. Sept. 18, 2019), 

reargument denied, 2019 WL 5092894 (Del. Ch. Oct. 10, 2019).
13

The parties do not dispute the validity of the forum selection clause in the Operating 

Agreement, and so I focus on the second part of the analysis as the operative inquiry.

The second question in the analysis asks whether the defendant is a third-party 

beneficiary, or closely related to, the contract. SP does not argue that Jacobs is a 

third-party beneficiary; it argues only that he is “closely related” to the Operating 

Agreement.57 “Under Delaware law, ‘[t]he ‘closely-related’ concept expands the 

availability of the equitable estoppel doctrine to encompass parties who would not 

technically meet the definition of third-party beneficiaries.’”58 However, “[t]his 

Court will expand the doctrine in this manner only if: ‘(1) [the party] receives a direct 

benefit from the agreement; or (2) it was foreseeable that [the party] would be bound 

by the agreement.’”59 SP argues that both conditions apply.60 I analyze each in turn.

I assume, without deciding and for purposes of this analysis, that if Jacobs had 

actually been issued equity in SP, he would have been bound by the terms of the 

Operating Agreement, including the forum selection clause.61

 57 See Pl.’s Answering Br., at 31–32.

58 Neurvana Med., 2019 WL 4464268, at *4 (quoting iModules Software, Inc. v. Essenza Software, 

Inc., 2017 WL 6596880, at *2 (Del. Ch. Dec. 22, 2017) (ORDER)).

59 Id. (quoting Weygandt v. Weco, LLC, 2009 WL 1351808, at *4 (Del. Ch. May 14, 2009)).

60 Pl.’s Answering Br., at 31.

61 Again, this approaches metaphysics. Jacobs’ contention is that he should have been issued 

equity under the Oral Agreement. It is that agreement, not the Operating Agreement, that he 

contends has been breached. If he had been issued equity, no live controversy would be before the 

Court. No dispute would have “aris[en] out of [the Operating] Agreement.” Am. Compl., ¶ 16.
14

1. Direct Benefit

“In evaluating whether a non-signatory received a direct benefit for the 

purpose of the closely-related test, Delaware courts have deemed both pecuniary and 

non-pecuniary benefits sufficient to satisfy the test.”62 This Court’s case law on this 

point is clear: to be bound by forum selection clauses, non-signatories must actually 

receive a benefit under or by way of the contract.63 Defendants in those cases 

received direct benefits from the contracts like permitted stock transfers,64 lucrative 

leases,65 a seat on a board of directors,66 or cash.67 In such a case, an estoppel may 

arise in light of the knowing acceptance of the benefits of the performance of the 

contract. However, “the mere ‘contemplation’ of a benefit” is not the receipt of a 

benefit for purposes of estoppel.

68

 62 Neurvana Med., 2019 WL 4464268, at *4 (citing Baker v. Impact Holding, Inc., 2010 WL 

1931032, at *4 (Del. Ch. May 13, 2010)).

63 Only one federal case departs from this standard. In Ninespot, Inc. v. Jupai Holdings Ltd., 2018 

WL 3626325 (D. Del. July 30, 2018), the court found that because a defendant “stood to receive

the direct benefit of shares in Plaintiff” through a stock agreement—but had not yet received the 

shares—it directly benefited from the contract at issue. Ninespot, 2018 WL 3626325, at *5

(emphasis added). For reasons explained below, the Ninespot case is more properly analyzed 

under the second prong (foreseeability), is distinguished from this action, and has been repudiated 

on this point by the Court of Chancery. See Neurvana Med., 2019 WL 4464268, at *7–8.

64 Capital Grp. Cos., Inc. v. Armour, 2004 WL 2521295, at *7 (Del. Ch. Oct. 29, 2004).

65 Weygandt v. Weco, LLC, 2009 WL 1351808, at *5 (Del. Ch. May 14, 2009).

66 Baker, 2010 WL 1931032, at *4.

67 McWane, Inc. v. Lanier, 2015 WL 399582, at *7 (Del. Ch. Jan. 30, 2015).

68 Neurvana Med., 2019 WL 4464268, at *4 (Del. Ch. Sept. 18, 2019).
15

Here, by contrast, Jacobs has received no direct benefit from the Operating 

Agreement. There is no dispute on this fact. SP itself sought a declaration in this 

lawsuit stating exactly that: “Jacobs (i) owns no equity in the Company, (ii) is not a 

Member, [and] (iii) owns no Membership Interest in the Company”69 Jacobs agreed. 

Any benefits to Jacobs by way of the Operating Agreement are at most contemplated 

benefits that could result upon the vesting of equity under the Oral Agreement, and 

not direct benefits. This is clear from the Plaintiff’s consistent use of the subjunctive 

mood in its briefing on this point: “The alleged agreement between Jacobs and SP 

would give him a direct interest in SP”; “Jacobs would have all of the benefits and 

rights under the SP Operating Agreement if the contract he alleges was formed”; and 

“if an agreement has been reached, Jacobs would receive a direct benefit under the 

SP Operating Agreement.”70 But Jacobs did not receive these benefits, and the 

Company denies that he was ever entitled to them. In sum, Jacobs has received no 

direct—or indirect—benefits through the Operating Agreement. Lacking 

membership or equity in SP, and with his anticipated contract claim unproven, any 

benefits the Operating Agreement could bestow on Jacobs are, at most, contemplated 

benefits.

 69 Am. Compl., at 20, Prayer for Relief.

70 Pl.’s Answering Br., at 31–32 (emphasis added).
16

2. Foreseeability

“The foreseeability inquiry ‘rests on the public policy that forum selection 

clauses promote stable and dependable public relations, and it would be inconsistent 

with that policy to allow the entities through which one of the parties chooses to act 

to escape the forum selection clause.’”71 In Neurvana Medical, LLC v. Balt USA, 

LLC,

72 Vice Chancellor McCormick conducted a scholarly analysis of the applicable 

case law and concluded that “[a]lthough the direct-benefit and foreseeability 

inquiries have been articulated as disjunctive, many Delaware cases have relegated 

the foreseeability inquiry to a subordinate role.”73

Where, as here, foreseeability must be a “standalone basis” for finding a party 

“closely related” to a contract, it has been applied only in two scenarios: (1) when 

non-signatory defendants sought to enforce a forum selection clause, and the 

signatory plaintiffssought to avoid it by arguing the non-signatory defendants lacked 

standing under the contract;

74 and (2) when a controlled entity is subject to a forum 

selection clause agreed to by its controller and the controlled entity bears a “clear 

 71 Neurvana Med., 2019 WL 4464268, at *5 (quoting Weygandt v. Weco, LLC, 2009 WL 1351808, 

at *5 (Del. Ch. May 14, 2009)).

72 2019 WL 4464268 (Del. Ch. Sept. 18, 2019).

73 Id. at *5.

74 Ashall Homes Ltd. v. ROK Entm’t Grp., Inc., 992 A.2d 1239, 1249 (Del. Ch. 2010); Lexington 

Servs. Ltd. v. U.S. Patent No. 8019807 Delegate, LLC, 2018 WL 5310261, at *5–6 (Del. Ch. Oct. 

26, 2018).
17

and significant connection to the subject matter of the agreement.”75 As Vice 

Chancellor McCormick observed, the foreseeability analysis is best narrowly

constrained to these two contexts; expanded too far, it “requires rejecting principles 

of corporate separateness” by broadly haling into Delaware courts those who neither 

joined an agreement nor received any benefit from it.76 In any event, it is clear that 

Jacobs, an individual defendant, fits neither of these categories.

In Neurvana Medical, Vice Chancellor McCormick also addresses a federal 

case, Ninespot, Inc. v. Jupai Holdings Ltd.,

77 that found a non-signatory defendant 

to be “closely related” based on foreseeability outside of the narrow contexts 

described above. In Ninespot, the Federal District Court for the District of Delaware 

found a defendant “closely related” to a contract despite a lack of direct benefits 

because the defendant “was involved in the planning and negotiation of the 

[agreement] to such a degree that it could expect to be bound by the agreement.”78 

This is aptly dubbed the “active-involvement theory.”79 In Neurvana Medical, Vice 

Chancellor McCormick found that “[b]y divorcing the foreseeability inquiry from 

 75 iModules Software, Inc. v Essenza Software, Inc., 2017 WL 6596880, at *3 (Del. Ch. Dec. 22, 

2017).

76 Neurvana Med., 2019 WL 4464268, at *6.

77 2018 WL 3626325 (D. Del. July 30, 2018).

78 Id. at *5.

79 Neurvana Med., 2019 WL 4464268, at *7–8.
18

circumstances in which the signatory controls the non-signatory, Ninespot takes the 

inquiry a step too far,” and she declined to apply it.80

I agree with Vice Chancellor McCormick’s reasoning in Neurvana Medical, 

and I follow it here. Even were I to entertain the active-involvement theory from 

Ninespot, however, it could not support a finding that Jacobs was “closely related” 

to the SP Operating Agreement. In Ninespot, the defendant was the chief negotiator 

of the contract at issue and referred to it in correspondence with the plaintiff as “our 

preliminary agreement.”81 Completion of the contract depended on the defendant’s 

funding.82 Nothing like that is present here. Jacobs did not negotiate any aspect of 

the Operating Agreement. There is no allegation that he was involved in the creation 

of the Operating Agreement in any way. Thus, even if Ninespot’s holding on this 

issue were to be followed in this Court, its rationale would not support a finding that 

Jacobs was “closely related” to the Operating Agreement containing the forum 

selection clause.

Based on the above, I find that Jacobs is not a closely related party to the 

Operating Agreement, as required by our case law to find a non-signatory bound by 

a forum selection clause. Because of this finding, I need not address the third prong

 80 Id. at *8.

81 Ninespot, 2018 WL 3626325, at *5–6.

82 Id.
19

of the analysis, whether “the claim arise[s] from [the defendant’s] standing relating 

to the . . . agreement.”83 SP asserts no other bases for personal jurisdiction besides 

consent to the forum selection clause in the Operating Agreement. Having found 

that this clause does not bind Jacobs, I conclude that this Court lacks personal 

jurisdiction. I therefore grant Jacobs’ motion to dismiss under Rule 12(b)(2).

B. Subject Matter Jurisdiction

Having found that this Court lacks personal jurisdiction over the Defendant, 

his motion to dismiss under 12(b)(1) based on subject matter jurisdiction is moot.

III. CONCLUSION

Based on the foregoing, I grant the Defendant’s Motion to Dismiss for lack of 

personal jurisdiction under Chancery Court Rule 12(b)(2). An appropriate order is 

attached.

 83 Capital Grp. Cos., Inc. v. Armour, 2004 WL 2521295, at *5 (Del. Ch. Oct. 29, 2004) (citing 

Hadley v. Shaffer, 2003 WL 21960406, at *4 (D. Del. Aug. 12, 2003)). In its briefing, SP relied 

heavily on PPL Corp. v. Riverstone Holdings LLC, 2019 WL 5423306 (Del. Ch. Oct. 23, 2019) to 

argue that Jacobs’ claim arises out of the Operating Agreement because the Operating Agreement 

will have to be interpreted and construed to resolve the claim, no matter where it is brought. Pl.’s 

Answering Br., at 33–34. I note that personal jurisdiction was not at issue in Riverstone Holdings; 

the defendants there sought to dismiss for venue reasons in favor of a first-filed action in another 

state under the McWane doctrine. In any event, whether or not some aspect of relief Jacobs might 

seek could be said to “arise out of” the Operating Agreement is immaterial in light of my findings 

above.
20

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

SUSTAINABILITY PARTNERS LLC,

Plaintiff,

)

)

)

)

v. )

)

C.A. No. 2019-0742-SG

JOEL JACOBS, )

)

Defendant. )

ORDER

AND NOW, this 11th day of June, 2020, for the reasons set forth 

contemporaneously in the attached Memorandum Opinion dated June 11, 2020, IT 

IS HEREBY ORDERED that the Defendant’s Motion to Dismiss is GRANTED.

IT IS SO ORDERED.

/s/ Sam Glasscock III 

Vice Chancellor