Under the Delaware Limited Liability Company Act, a non-Delaware resident may be deemed to have consented to being sued in Delaware if she is a “manager” of the LLC. But who, exactly, is such a manager? That question is answered by the recent decision in In re Dissolution of Arctic Ease, C.A. No. 8932-VCMR (Del. Ch. Dec. 9, 2016). As that decision points out, all who manage are not “managers” under the Delaware LLC Act.
The analysis starts with Section 18-109(a) of the Delaware LLC Act that provides for implied consent to Delaware jurisdiction. A person designated as a manager in an LLC agreement is deemed to have consented to the jurisdiction of a Delaware court. But, the section goes on to also hold that someone who “participates materially in the management” of a Delaware LLC is also a manager who is deemed to consent to Delaware jurisdiction. Does that mean even the manager of a Delaware LLC’s employee cafeteria consents to Delaware jurisdiction? Clearly some line needs to be drawn.
