ferent normative positions of Justice Ginsburg and Justice Kennedy in this case, and explain which if any you think the correct approach is. III. DEFENDANT'S PROPERTY IN THE FORUM STATE After Pennoyer, if a defendant possessed property in a state with which the defendant neither had minimum contacts nor was present in, personal jurisdiction could still be asserted by the forum state over the defendant, even if the lawsuit was unrelated to the property in the forum state. Consider the following scenario: . A is a resident of Oregon who owns property in Florida but otherwise has no contact with the state of Florida. B, a citizen of California, claims A breached a contract that A entered into with B. The contract was unconnected to the state of Florida. For example, A agreed to repair B's home in California but failed to do so after B paid A. . If B decided to sue A for breach of contract, he could attach A's property in Florida and, as a result of the presence of A's property, albeit property unrelated to the dispute between B and A, the Florida courts would have personal jurisdiction over A in the adjudication of the contract dispute. The restriction on this method of acquiring personal jurisdiction was that the value of the judgment entered by the Florida courts against A could not be higher than the value of A's property in Florida.CH. 16 CH. 16 writ 252 PERSONAL JURISDICTION betw This method of attaching property unrelated to the dispute to establish personal jurisdiction over the defendant in an in personam dispute is known as quasi in rem type The requ II jurisdiction. The Shaffer v. Heitner case reexamined the validity of this method of that orde stock bel obtaining personal jurisdiction. SHAFFER V. HEITNER (1977) 'Th Supreme Court of the United States 433 U.S. 186 secure MR. JUSTICE MARSHALL delivered the opinion of the Court. the issu 'sequest The controversy in this case concerns the constitutionality of a Delaware statute defenda that allows a court of that State to take jurisdiction of a lawsuit by sequestering any property of the defendant that happens to be located in Delaware. Appellants contend accomp] that the sequestration statute as applied in this case violates the Due Process Clause of propert the Fourteenth Amendment both because it permits the state courts to exercise defend jurisdiction despite the absence of sufficient contacts among the defendants, the unless litigation, and the State of Delaware and because it authorizes the deprivation of plaintif defendants' property without providing adequate procedural safeguards. We find it Th necessary to consider only the first of these contentions. held, t also fo Appellee Heitner, a nonresident of Delaware, is the owner of one share of stock in Del. Co the Greyhound Corp., a business incorporated under the laws of Delaware with its situs principal place of business in Phoenix, Ariz. On May 22, 1974, he filed a shareholder's by a D derivative suit in the Court of Chancery for New Castle County, Del., in which he named as defendants Greyhound, its wholly owned subsidiary Greyhound Lines, Inc., and 28 present or former officers or directors of one or both of the corporations. In essence, Chan Heitner alleged that the individual defendants had violated their duties to Greyhound by causing it and its subsidiary to engage in actions that resulted in the corporations being held liable for substantial damages in a private antitrust suit and a large fine in a Oregon. criminal contempt action. The activities which led to these penalties took place in this is co Simultaneously with his complaint, Heitner filed a motion for an order of sequestration of the Delaware property of the individual defendants pursuant to Del. Code Ann., Tit. 10, s 366 (1975).* This motion was accompanied by a supporting affidavit of counsel which stated that the individual defendants were nonresidents of Delaware. The affidavit identified the property to be sequestered as common stock, 3% Second Cumulative Preferenced Stock and stock unit credits of the Defendant Greyhound Corporation, a Delaware corporation, as well as all options and all warrants to purchase said stock issued to said individual Defendants and all contractural (sic) obligations, all rights, debts or credits due or accrued to or for the benefit of any of the said Defendants under any type of * This Delaware Statute allowed the seizure or sequestration of property owned by non-residents of Delaware which was located in the State of Delaware. The sequestration or seizure of the property purported to create personal jurisdiction in Delaware courts over the Defendant even for matters unrelated to the property. Under Delaware lag the share of a Corporation incorporated in Delaware is considered property located in Delaware. The other 49 states consider the share as property present wherever the certificate of ownership of the share is located. WCH. 16 PERSONAL JURISDICTION CH. 16 establish personal written agreement, contract or other legal instrument of any kind whatever 253 s quasi in rem type between any of the individual Defendants and said corporation. of this method of The requested sequestration order was signed the day the motion was filed. Pursuant to "hat order, the sequestrator "seized" approximately 82,000 shares of Greyhound common rock belonging to 19 of the defendants, and options belonging to another 2 defendants. * * * The primary purpose of 'sequestration' as authorized by 10 Del.C. s 366 is not to secure possession of property pending a trial between resident debtors and creditors on laware statute the issue of who has the right to retain it. On the contrary, as here employed, sequestration is a process used to compel the personal appearance of a nonresident questering any defendant to answer and defend a suit brought against him in a court of equity. It is llants contend accomplished by the appointment of a sequestrator by this Court to seize and hold cess Clause of property of the nonresident located in this State subject to further Court order. If the to exercise defendant enters a general appearance, the sequestered property is routinely released, endants, the unless the plaintiff makes special application to continue its seizure, in which event the privation of plaintiff has the burden of proof and persuasion." We find it This limitation on the purpose and length of time for which sequestered property is held, the court concluded, rendered inapplicable the due process requirements. The court also found no state-law or federal constitutional barrier to the sequestrator's reliance on of stock in Del. Code Ann., Tit. 8, s 169 (1975). Finally, the court held that the statutory Delaware situs of the stock provided a sufficient basis for the exercise of quasi in rem jurisdiction e with its reholder's by a Delaware court. he named On appeal, the Delaware Supreme Court affirmed the judgment of the Court of ., and 28 Chancery. * * * essence, eyhound Appellants' claim that the Delaware courts did not have jurisdiction to adjudicate orations this action received [ ] cursory treatment. The court's analysis of the jurisdictional issue fine in a lace in is contained in two paragraphs: There are significant constitutional questions at issue here but we say at once that we do not deem the rule of International Shoe to be one of them. . . . The der of reason of course, is that jurisdiction under s 366 remains . . . quasi in rem ant to founded on the presence of capital stock here, not on prior contact by defendants with this forum. Under 8 Del.C. s 169 the 'situs of the ownership of the capital orting stock of all corporations existing under the laws of this State . . . (is) in this nts of State,' and that provides the initial basis for jurisdiction. Delaware may constitutionally establish situs of such shares here, . . . it has done so and the presence thereof provides the foundation for s 366 in this case. . . * * * "We hold that seizure of the Greyhound shares is not invalid because plaintiff has failed to meet the prior contacts tests of International Shoe." We noted probable jurisdiction, We reverse, are nal aw tesCH. 16 PERSONAL JURISDICTION CH. 16 "jurisdictio 254 whether a II Due Proce The Delaware courts rejected appellants' jurisdictional challenge by noting that this This suit was brought as a quasi in rem proceeding. Since quasi in rem jurisdiction is traditionally based on attachment or seizure of property present in the jurisdiction, not State ma on contacts between the defendant and the State, the courts considered appellants State, the claimed lack of contacts with Delaware to be unimportant. This categorical analysis are the s assumes the continued soundness of the conceptual structure founded on the century-old it would case of Pennoyer v. Neff. In such [After reviewing the Pennoyer case and the line of minimum contacts cases the court indicate concluded that these cases did not specifically address the in rem or quasi in rem strong jurisdiction recognized in Pennoyer but addressed only in personam actions.] providi No equally dramatic change has occurred in the law governing jurisdiction in rem, propert There have, however, been intimations that the collapse of the in personam wing of and w Pennoyer has not left that decision unweakened as a foundation for in rem jurisdiction. jurisdi Well-reasoned lower court opinions have questioned the proposition that the presence of where property in a State gives that State jurisdiction to adjudicate rights to the property other regardless of the relationship of the underlying dispute and the property owner to the forum. The overwhelming majority of commentators have also rejected Pennoyer's premise that a proceeding "against" property is not a proceeding against the owners of migh that property. Accordingly, they urge that the "traditional notions of fair play and cour substantial justice" that govern a State's power to adjudicate in personam should also rem govern its power to adjudicate personal rights to property located in the State. wou Although this Court has not addressed this argument directly, we have held that as t property cannot be subjected to a court's judgment unless reasonable and appropriate act efforts have been made to give the property owners actual notice of the action. This the conclusion recognizes, contrary to Pennoyer, that an adverse judgment in rem directly pre affects the property owner by divesting him of his rights in the property before the court. tie Moreover, in Mullane we hold that Fourteenth Amendment rights cannot depend on the no classification of an action as in rem or in personam, since that is "a classification for which the standards are so elusive and confused generally and which, being primarily for state courts to define, may and do vary from state to state." It is clear, therefore, that the law of state-court jurisdiction no longer stands securely on the foundation established in Pennoyer. We think that the time is ripe to consider whether the standard of fairness and substantial justice set forth in International Shoe should be held to govern actions in rem as well as in personam. III The case for applying to jurisdiction in rem the same test of "fair play and substantial justice" as governs assertions of jurisdiction in personam is simple and straightforward. It is premised on recognition that "(the phrase, 'judicial jurisdiction over a thing', is a customary elliptical way of referring to jurisdiction over the interests of persons in a thing." This 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 exercisingCH. 16 CH. 16 PERSONAL JURISDICTION "jurisdiction over the interests of persons in a thing."23 The standard for determining 255 noting that this "Whether an exercise of jurisdiction over the interests of persons is consistent with the jurisdiction is whe Process Clause is the minimum-contacts standard elucidated in International Shoe. irisdiction, not ed appellants' This argument, of course, does not ignore the fact that the presence of property in a orical analysis state may bear on the existence of jurisdiction by providing contacts among the forum e century-old 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. ses the court In such cases, the defendant's claim to property located in the State would normally uasi in rem indicate that 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 tion in rem. 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 im wing of and witnesses will be found in the State. The presence of property may also favor risdiction. jurisdiction in cases such as suits for injury suffered on the land of an absentee owner, resence of where the defendant's ownership of the property is conceded but the cause of action is property otherwise related to rights and duties growing out of that ownership. 29 er to the It appears, therefore, that jurisdiction over many types of actions which now are or nnoyer's might be brought in rem would not be affected by a holding that any assertion of state- wners of court jurisdiction must satisfy the International Shoe standard. For the type of quasi in lay and rem action typified by . . . the present case, however, accepting the proposed analysis ild also would result in significant change. These are cases where the property which now serves as the basis for state-court jurisdiction is completely unrelated to the plaintiff's cause of d that action. Thus, although the presence of the defendant's property in a State might suggest the existence of other ties among the defendant, the State, and the litigation, the priate presence of the property alone would not support the State's jurisdiction. If those other This ties did not exist, cases over which the State is now thought to have jurisdiction could rectly court. not be brought in that forum. Since acceptance of the International Shoe test would most affect this class of cases, the we examine the arguments against adopting that standard as they relate to this category for of litigation. 31 Before doing so, however, we note that this type of case also presents the trily clearest illustration of the argument in favor of assessing assertions of jurisdiction by a single standard. For in cases such as . . . this one, the only role played by the property is ely to provide the basis for bringing the defendant into court. 32 [ ]In such cases, if a direct ler assertion of personal jurisdiction over the defendant would violate the Constitution, it oe 23 It is true that the potential liability of a defendant in an in rem action is limited by the value of the property, but that limitation does not affect the argument, The fairness of subjecting a defendant to state-court jurisdiction does not depend on the size of the claim being litigated, 24 This category includes true in rem actions and the first type of quasi in rem proceedings. 29 If such an action were brought under the in rem jurisdiction rather than under a long-arm statute, it would 31 Concentrating on this category of cases is also appropriate because in the other categories, to the extent that be a quasi in rem action of the second type, presence of property in the State indicates the existence of sufficient contacts under International Shoe, there is no need to rely on the property as justifying jurisdiction regardless of the existence of those contacts. 32 The value of the property seized does serve to limit the extent of possible liability, but that limitation does not provide support for the assertion of jurisdiction, See n, 23, supra. In this case, appellants' potential liability under the in rem jurisdiction exceeds $1 million,CH. 16 Delawar 256 PERSONAL JURISDICTION CH. 16 that constitu would seem that an indirect assertion of that jurisdiction should be equally Court must, impermissible. It is so * * * It might also be suggested that allowing in rem jurisdiction avoids the uncertainty MR. JUSTIC inherent in the International Shoe standard and assures a plaintiff of a forum. 87 We I agree believe, however, that the fairness standard of International Shoe can be easily applied assertions in the vast majority of cases. Moreover, when the existence of jurisdiction in a particular neither the forum under International Shoe is unclear, the cost of simplifying the litigation by directors a avoiding the jurisdictional question may be the sacrifice of "fair play and substantial justice." That cost is too high. the Delaw I wou forms of The fiction that an assertion of jurisdiction over property is anything but an may, with assertion of jurisdiction over the owner of the property supports an ancient form without within th substantial modern justification. Its continued acceptance would serve only to allow state-court jurisdiction that is fundamentally unfair to the defendant. in partic arguably We therefore conclude that all assertions of state-court jurisdiction must be significar evaluated according to the standards set forth in International Shoe and its progeny.39 the fore IV The Delaware courts based their assertion of jurisdiction in this case solely on the statutory presence of appellants' property in Delaware. Yet that property is not the 52. Wh subject matter of this litigation, nor is the underlying cause of action related to the property. Appellants' holdings in Greyhound do not, therefore, provide contacts with 53. In Delaware sufficient to support the jurisdiction of that State's courts over appellants. If it oc exists, that jurisdiction must have some other foundation. 54. W Appellee Heitner did not allege and does not now claim that appellants have ever 55. W set foot in Delaware. Nor does he identify any act related to his cause of action as having taken place in Delaware. th la * * * 56. P Moreover, appellants had no reason to expect to be haled before a Delaware court. Delaware, unlike some States, has not enacted a statute that treats acceptance of a directorship as consent to jurisdiction in the State. And "(i)t strains reason . . . to suggest 57. that anyone buying securities in a corporation formed in Delaware 'impliedly consents' 58. to subject himself to Delaware's . . . jurisdiction on any cause of action." * * * The Due Process Clause "does not contemplate that a state may make binding a judgment . . . against an individual or corporate defendant with which the state has no contacts, ties, or relations." International Shoe Co. v. Washington. 59. 37 This case does not raise, and we therefore do not consider, the question whether the presence of a defendant's property in a State is a sufficient basis for jurisdiction when no other forum is available to the plaintiff. 39 To the extent that prior decisions are inconsistent with this standard, they are overruled.CH. 16 PERSONAL JURISDICTION CH. 16 Delaware's assertion of jurisdiction over appellants in this case is inconsistent with 257 ld be equally that constitutional limitation on state power. The judgment of the Delaware Supreme Court must, therefore, be reversed. It is so ordered e uncertainty MR . JUSTICE POWELL , concurring . forum. 37 We asily applied I agree that the principles of International Shoe Co., should be extended to govern a particular assertions of in rem as well as in personam jurisdiction in a state court. I also agree that litigation by "either the statutory presence of appellants' stock in Delaware nor their positions as substantial directors and officers of a Delaware corporation can provide sufficient contacts to support the Delaware courts' assertion of jurisdiction in this case. I would explicitly reserve judgment, however, on whether the ownership of some ng but an forms of property whose situs is indisputably and permanently located within a State may, without more, provide the contacts necessary to subject a defendant to jurisdiction m without within the State to the extent of the value of the property. In the case of real property, to allow in particular, preservation of the common-law concept of quasi in rem jurisdiction arguably would avoid the uncertainty of the general International Shoe standard without must be significant cost to " traditional notions of fair play and substantial justice.'" Subject to geny. 39 the foregoing reservation, I join the opinion of the Court. DIRECTED READING QUESTIONS on the 52. What is a shareholder's derivative suit? not the 53. In what state did the activities of the defendant, giving rise to the suit filed in Delaware, to the s with occur? ts. If it 54. What exactly is the property of the defendants which is located in Delaware? 55. Why does the plaintiff allege that personal jurisdiction is proper in Delaware, even though there is no relationship between the defendants' activities giving rise to the ever aving lawsuit and Delaware? 56. Please list the different categories of actions that the Supreme Court identifies as in rem, and give the examples that the Court uses to illustrate each category. 57. Please explain the impact of the Shaffer ruling on each of the categories identified above. urt. 58. In Nicastro, Justice Kennedy's plurality opinion justifies the use of state borders as a factor in personal jurisdiction, because it is necessary to prevent the uncertainty of using of a foreseeability as the basis of determining whether purposeful availment exists. How does rest the plaintiff in Shaffer argue that avoiding uncertainty should prevent the injection of its' the in personam minimum contacts concept into personal jurisdiction questions in in rem actions? Is the plaintiff successful? 59. According to Justice Powell's concurrence, does the type of property make a difference? a