Opinion ID: 1540447
Heading Depth: 1
Heading Rank: 12

Heading: The Defendant, the Forum and the Litigation

Text: The sine qua non of any exercise of jurisdiction based upon implied consent is the International Shoe requirement for a defendant to have certain minimum contacts with [the forum], such that the maintenance of the suit does not offend `traditional notions of fair play and substantial justice.' International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945). In order to support an exercise of specific jurisdiction, the nonresident defendant's minimum contacts with the forum must give rise to the particular controversy. Id. at 317-18, 66 S.Ct. at 158-59. [24] Thus, whether the requisite minimum contacts exist is determined by examining the relationship between the defendant, the forum and the litigation. Shaffer v. Heitner, 433 U.S. at 204, 97 S.Ct. at 2579. Our analysis of GenCorp's implied consent to Delaware's specific jurisdiction in this case must focus, therefore, upon the relationship between GenCorp, Delaware, and Sternberg's lawsuit. GenCorp is an Ohio corporation. For more than thirty years, GenCorp has owned 100% of the issued and outstanding shares of RKO General, a Delaware corporation. Sternberg's action is a double derivative suit. One aspect of the suit alleges mismanagement and breaches of fiduciary duty on the part of the directors of RKO General, the Delaware corporation, resulting in detriment to that corporation and therefore to GenCorp, the sole stockholder of that Delaware corporation. The other aspect of the Sternberg suit alleges mismanagement and breaches of fiduciary duty on the part of the GenCorp directors. Sternberg's complaint alleges that as a result of the breaches of fiduciary duty by the directors and officers of each of the corporations, RKO General has lost its radio and television broadcast licenses or the value thereof, to the detriment of both GenCorp and RKO General. We must decide whether or not Delaware has specific jurisdiction to hear this controversy. The Court of Chancery concluded that GenCorp's ownership of a Delaware subsidiary was an insufficient contact with this State to establish a basis for personal jurisdiction. Sternberg v. O'Neil, 532 A.2d at 998. The Court of Chancery ruled that Delaware had no authority to exercise in personam jurisdiction over GenCorp and that since GenCorp was an indispensable party, the entire case must be dismissed. Id. at 999. On appeal, GenCorp argues that this conclusion was correct and is mandated by the holding in Shaffer.