CRS Annotated Constitution
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Supplement: [P. 1716, change heading to:]
Although the Court’s holding in Shaffer v. Heitner147 “that all assertions of state–court jurisdiction must be evaluated according to the [‘minimum contacts’] standards set forth in International Shoe”148 requires an assessment of all decided cases based upon now disavowed tests, it does not appear that the results will appreciably change for in rem jurisdiction over property. “[T]he presence of property in a State may bear on the existence of jurisdiction by providing contacts among the forum State, the defendant, and the litigation. For example, when claims to the property itself are the source of the underlying controversy between the plaintiff and the defendant, it would be unusual for the State where the property is located not to have jurisdiction. In such cases, the defendant’s claim to property located in the State would normally indicate that[p.1718]he expected to benefit from the State’s protection of his interest. The State’s strong interests in assuring the marketability of property within its borders and in providing a procedure for peaceful resolution of disputes about the possession of that property would also support jurisdiction, as would the likelihood that important records and witnesses will be found in the State.”149 Thus, for “true” in rem actions, the old results likely still prevail.
Actions in Rem: Attachment Proceedings.—Although the practice of attachment goes back to colonial times, Pennoyer v. Neff150 was also the most relevant case for a long time respecting the power of a State to permit an attachment of real and personal property situated within its borders belonging to a nonresident to satisfy a debt owed by the nonresident to one of its citizens or to settle a claim for damages founded upon a wrong inflicted on the citizen by the nonresident. Being neither present within the State nor domiciled therein, the nonresident defendant could not be served personally, and any judgment in money obtained against him would be unenforceable. The solution was a form of in rem proceeding, sometimes called “quasi in rem,” involving a levy of a writ of attachment on the local property of the defendant, of which proceeding the non–resident need be notified merely by publication,151 and satisfaction of the judgment from the property attached; if the attached property was insufficient to satisfy the claim, the plaintiff could go no further.
This form of proceeding raised many questions. Of course, there were always instances in which it was fair to subject a person to suit on his property located in the forum State, as where the property was related to the matter sued over.152 In others, the question was more disputed, as in the famous case in which the property subject to attachment was the obligation of the defendant’s insurance company to defend and pay the judgment.153 But[p.1719]the extension of the principle in Harris v. Balk154 squarely raised the issue of fairness and territoriality. The claimant was a Maryland resident who was owed a debt by Balk, a North Carolina resident. Apparently adventitiously, Harris, also a North Carolina resident and owing Balk an amount of money, was found passing through Maryland by the Maryland resident and his debt to Balk was attached to satisfy the debt owed to the Marylander. Balk had no notice of the action and a default judgment was entered, after which Harris paid over the judgment to the Marylander. When Balk later sued Harris in North Carolina to recover on his debt, Harris defended that he had been relieved of any further obligation by satisfying the judgment in Maryland, and the Supreme Court sustained his defense, ruling that jurisdiction had been properly obtained and the Maryland judgment was thus valid.155
Harris v. Balk was overruled in Shaffer v. Heitner,156 in which the Court held that the “minimum contacts” test of International Shoe applied to all in rem and quasi in rem actions. The case arose under a Delaware sequestration statute under which plaintiffs were authorized to bring actions against nonresident defendants by attaching their “property” within Delaware, the property consisting of shares of corporate stock and options to stock in the defendant corporation, the stock being considered to be in Delaware because of the incorporation in Delaware, although none of the certificates representing the seized stocks was physically present in Delaware. The reason for applying the same test as is applied in in personam cases, the Court said, “is simple and straightforward. It is premised on recognition that ‘[t]he phrase “judicial jurisdiction over a thing,” is a customary elliptical way of referring to jurisdiction over the interests of persons in a thing.”’157 Thus, “[t]he recognition leads to the conclusion that in order to justify an exercise of jurisdiction in rem, the basis for jurisdiction must be sufficient to justify exercising ‘jurisdiction over the interests of persons in a thing.”’158[p.1720]
A further tightening of jurisdictional standards occurred in Rush v. Savchuk.159 The plaintiff was injured in a one–automobile accident in Indiana while a passenger in an automobile driven by defendant. Plaintiff later moved to Minnesota and sued defendant, still resident in Indiana, in state court in Minnesota. There were no contacts between the defendant and Minnesota, but defendant’s insurance company did business there and plaintiff garnished the insurance contract, signed in Indiana, under which the company was obligated to defend defendant in litigation and indemnify him to the extent of the policy limits. The Court refused to permit jurisdiction to be grounded on the contract; the contacts justifying jurisdiction must be those of the defendant engaging in purposeful activity related to the forum.160 Rush thus resulted in the demise of the controversial Seider v. Roth doctrine, which lower courts had struggled to save after Shaffer v. Heitner.161
Supplement: [P. 1717, add to n.144:]
Predeprivation notice and hearing may be required if the property is not the sort that, given advance warning, could be removed to another jurisdiction, destroyed, or concealed. United States v. James Daniel Good Real Property, 510 U.S. 43 (1993) (notice to owner required before seizure of house by government).
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