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Shaffer v. Heitner | 433 U.S. 186 (1977)
Personal jurisdiction is a court’s power over the parties to a lawsuit. Without it, a court’s judgment is void. The 1877 decision in Pennoyer versus Neff acknowledged three types of personal jurisdiction.
In personam jurisdiction exists when the plaintiff sues the defendant personally, and the defendant consents to jurisdiction or receives proper service. In rem jurisdiction exists when the lawsuit’s purpose is to determine competing claims against specific property located within the forum state.
Quasi in-rem jurisdiction is an odd combination of both. It exists if the state court seizes the defendant’s forum-state property to secure the plaintiff’s personal claims against the defendant, whether or not the claims are related to the seized property.
Later, International Shoe Company versus Washington created the modern personal-jurisdiction framework. Under that landmark decision, in personam jurisdiction over a non-consenting, out-of-state defendant requires that the defendant have minimum contacts with the forum state. Minimum contacts exist if the underlying events arose from the defendant’s activities in or toward the forum state, or if the defendant’s continuous, systematic presence in the state justifies suing the defendant there for any reason.
International Shoe didn’t establish whether in rem and quasi in-rem jurisdiction also require minimum contacts. In Shaffer versus Heitner, the United States Supreme Court finally answered that question.
Heitner owned stock in Greyhound Corporation. Greyhound was incorporated in Delaware and headquartered in Arizona. By statute, Greyhound’s stock was located in Delaware.
Heitner filed a shareholder suit against Greyhound and its officers and directors, alleging breach of fiduciary duty. Heitner filed suit in Delaware state court, even though the relevant events occurred in Oregon, and no individual defendant resided in Delaware.
By law, Delaware’s courts could establish quasi in-rem jurisdiction simply by attaching a defendant’s Delaware property. Here, to compel the officers and directors to appear, the trial court attached their Greyhound stock.
The officers and directors moved to dismiss for lack of personal jurisdiction, citing failure of minimum contacts. The trial court denied the motion, holding the minimum-contacts test was unnecessary in light of the court’s quasi in-rem jurisdiction. The Delaware Supreme Court affirmed, and the United States Supreme Court granted cert.
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