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Actions in Rem: Proceedings Against Land.—

Supplement: [P. 1716, change heading to:]

The basis of in rem jurisdiction is the power of a State to determine title to all property, whether tangible or intangible, located within its bor[p.1717]ders.138 Unlike jurisdiction in personam, a judgment entered by a court with in rem jurisdiction does not bind the defendant personally but determines the title to or status of only the property in question.139 Proceedings brought to register title to land,140 to condemn141 or confiscate142 real or personal property, or to administer a decedent’s estate143 are typical in rem actions. Due process is satisfied by seizure of the res and notice to all who have or may have interests therein.144 It was formally the case that in in rem actions a court could acquire jurisdiction over nonresidents by mere constructive service of process,145 under the theory that property was always in possession of its owners and that seizure would afford them notice, inasmuch as they would keep themselves apprised of the state of their property. That this was a fiction not satisfying the requirements of due process has been established and, whatever the nature of the proceeding, notice must be given in a manner that actually notifies the person being sought or that has a reasonable certainty of resulting in such notice.146

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


Footnotes

138 Arndt v. Griggs, 134 U.S. 316, 320–21, 323 (1890) ; Pennoyer v. Neff, 95 U.S. 714 (1878) .
139 Boswell’s Lessee v. Otis, 50 U.S. (9 How.) 336, 348 (1850).
140 American Land Co. v. Zeiss, 219 U.S. 47 (1911) ; Tyler v. Judges of the Court of Registration, 175 Mass. 71, 76, 55 N.E. 812, 814 (Chief Justice Holmes), appeal dismissed, 179 U.S. 405 (1900) .
141 Huling v. Kaw Valley Ry. & Improvement Co., 130 U.S. 559 (1889) .
142 The Confiscation Cases, 87 U.S. (20 Wall.) 92 (1874).
143 Clarke v. Clarke, 178 U.S. 186 (1900) ; Riley v. New York Trust Co., 315 U.S. 343 (1942) .
144 Pennoyer v. Neff, 95 U.S. 714 (1878) .

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).

145 Arndt v. Griggs, 134 U.S. 316 (1890) ; Ballard v. Hunter, 204 U.S. 241 (1907) ; Security Savings Bank v. California, 263 U.S. 282 (1923) .
146 Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306 (1950) ; Walker v. City of Hutchinson, 352 U.S. 112 (1956) ; Schroeder v. City of New York, 371 U.S. 208 (1962) ; Robinson v. Hanrahan, 409 U.S. 38 (1972) .
147 433 U.S. 186 (1977) .
148 Id. at 212.
149 Id. at 207–08 (footnote citations omitted). The Court also suggested that the State would usually have jurisdiction in cases such as those arising from injuries suffered on the property of an absentee owner, where the defendant’s ownership of the property is conceded but the cause of action is otherwise related to rights and duties growing out of that controversy. Id.
150 95 U.S. 714 (1878) . Cf. Pennington v. Fourth Nat’l Bank, 243 U.S. 269, 271 (1917) ; Corn Exch. Bank v. Commissioner, 280 U.S. 218, 222 (1930) ; Endicott Co. v. Encyclopedia Press, 266 U.S. 285, 288 (1924) .
151 This theory of notice was disavowed sooner than the theory of jurisdiction. Supra, p. 1716.
152 Atkinson v. Superior Court, 49 Cal. 2d 338, 316 P. 2d 960 (1957), appeal dismissed, 357 U.S. 569 (1958) (debt seized in California was owed to a New Yorker, but it had arisen out of transactions in California involving the New Yorker and the California plaintiff).
153 Seider v. Roth, 17 N.Y. 2d 111, 269 N.Y.S. 2d 99, 216 N.E. 2d 312 (1966).
154 198 U.S. 215 (1905) .
155 Compare New York Life Ins. Co. v. Dunlevy, 241 U.S. 518 (1916) (action purportedly against property within State, proceeds of an insurance policy, was really an in personam action against claimant and, claimant not having been served, the judgment is void). But see Western Union Tel. Co. v. Pennsylvania, 368 U.S. 71 (1961) .
156 433 U.S. 186 (1977) .
157 Id. at 207 (internal quotation from Restatement (Second) of Conflict of Laws 56, Introductory Note (1971)).
158 Id. The characterization of actions in rem as being not actions against a res but against persons with interests merely reflects Justice Holmes’ insight in Tyler v. Judges of the Court of Registration, 175 Mass. 71, 76–77, 55 N.E., 812, 814, appeal dismissed, 179 U.S. 405 (1900) .
159 444 U.S. 320 (1980) .
160 Id. 328–30. In dissent, Justices Brennan and Stevens argued that what the state courts had done was the functional equivalent of direct–action statutes. Id. at 333 (Justice Stevens); World–Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 299 (1980) (Justice Brennan). The Court, however, refused so to view the Minnesota garnishment action, saying that “[t]he State’s ability to exert its power over the ‘nominal defendant’ is analytically prerequisite to the insurer’s entry into the case as a garnishee.” Id. at 330–31. Presumably, the comment is not meant to undermine the validity of such direct–action statutes, which was upheld in Watson v. Employers Liability Assurance Corp., 348 U.S. 66 (1954) , a choice–of–law case rather than a jurisdiction case.
161 Supra, p. 1718 n.153. See O’Conner v. Lee–Hy Paving Corp., 579 F.2d 194 (2d Cir.), cert. denied, 439 U.S. 1034 (1978) .
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