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Shaffer
v Heitner
433 U.S. 186 [1977]
Author:- Sam
Biers
In
Rem
Relevant
Facts: EE, Heitner, a nonresident of DE, is the owner of one
share of stock in Greyhound, a business incorporated in DE, w/
its principal place of business in Phoenix, AZ.
EE
contends that 28 former officers and directors violated their
duties to Greyhound by causing it to engage in actions that
resulted in the corp being held liable for substantial damages in
a antitrust suit, which activities arose in Oregon.
Legal
Issue(s): Whether a Delaware statute 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
is constitutional?
Court’s
Holding: No, violated the due process clause.
Procedure:
Law
or Rule(s): In order to justify exercise of jurisdiction in
rem, basis for jurisdiction must be sufficient to justify
exercising jurisdiction over interests of persons in a thing;
standard for determining whether exercise of jurisdiction over
interests of persons is consistent with due process clause is
minimum contacts standard-contacts, ties or relations w/ the
state.
Court
Rationale: 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 the thing." The presence of property
in a State may bear upon the existence of jurisdiction by
providing contacts among the forum State, the defendant, and the
litigation, as for example, when claims to the property itself
are the source of the underlying controversy between the
plaintiff and defendant, where it would be unusual for the State
where the property is located not to have jurisdiction.
But
where, as in the instant quasi in rem action, the property now
serving as the basis for state-court jurisdiction is completely
unrelated to the plaintiff's cause of action, the presence of the
property alone, i. e., absent other ties among the defendant, the
State, and the litigation, would not support the State's
jurisdiction. Delaware's assertion of jurisdiction over
appellants, based solely as it is on the statutory presence of
appellants' property in Delaware, violates the Due Process
Clause, which "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."
Plaintiff’s
Argument: (EE)
Defendant’s
Argument: (ant) The sequestration statute violates the D. P. of
the 14th b/c it permits the state cts to exercise
jurisdiction despite the absence of sufficient contacts AND b/c
it authorizes the deprivation of df’s property w/o providing
adequate procedural safeguards.
intimations
- clues or suggestions
sequestration
- The separating or removal of property from the person in
possession, pending some further action or proceedings affecting
the property. Process of attaching property.
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