Helico, 466 U.S. 408 ,
- Colombian corporation's contacts with TX, which consisted of (i) one trip to TX by corporation's chief executive officer for purpose of negotiating transportation services contract, (ii) acceptance of checks drawn on TX bank, and (iii) purchases of helicopters and equipment from TX manufacturer, and (iv) related training trips, were not sufficient to satisfy due process requirement, and, thus, not grant TX court in personam jurisdiction over the corporation (insufficient to satisfy requirements of due process clause of the 14th and hence to allow TX court to assert in personam jurisdiction over corporation in wrongful death action ; the corporation's biz contacts with TX were not continuous and systematic enough to satisfy the requirements of the Due Process Clause of the 14th) ;
- The corp. did not maintain a place of biz in TX ; the death (cause of action) took place in Peru ;
- * The purchase of part of helicopter is not related to the cause of action
-
Pebble Beach Co. v. Caddy , 453 F.3d 1151 , 2006, p.150
- (D) a British “bed and breakfast,” which did not include a golf-course, operated under the same name “pebble beach,” ; (P) the “pebble beach” golf resort brought trademark infringement and trademark dilution action against the British in CA court
- Here, use of “Pebble Beach” in passive (non-interactive) website advertising his services and in the website's domain name were not acts aimed at CA
- The D argue no CA court’s in personam jurisdiction over the D ;
-
In rem jurisdiction p.158
Tyler v. Judges of Court of Registration, 175 Mass. 71, p.158
Pennington v. Fourth Nat'l Bank, 243 U.S. 269
- Wife (P), who obtained a divorce in OH court, sought alimony and joined the bank as a D because the bank is where her husband kept his money (DO- attach bank account) ; the trial court entered a preliminary order that enjoined the bank from paying out any part of the deposit
- The husband challenged the garnishment of his bank account to pay alimony, alleging that ; he is non-resident of OH ; had not been personally served with process within the state ; had not voluntarily appeared in the suit (no consent) ; had been served by publication only ; (DO- no consent, presence, citizenship) ; thus, allege that the court has no personal jurisdiction over the husband
- Held (in rem jurisdiction) - the wife was a creditor and that an injunction issued against a resident debtor of a non-resident defendant was a sufficient seizure of the defendant's property to give jurisdiction
- a person or entity, quite often a bank or employer, which receives a court order to not release funds held for or owed to a customer or employee, pending further order of the court
Harris v. Balk, 198 U.S. 215 , p.161
- Epstein (MD, creditor) ; Balk (debtor) ; (Balk (NC) is creditor – Harris (NC) is debtor) ;
- Epstein instituted a garnishee proceeding in MD court, attaching the debt due Balk from Harris, ; Harris was personally served with the writ of attachment (while Harris was present in MD)
- Harris paid the $180 to Epstein
- Balk filed a suit against Harris in NC court to recover $180 ; Harris invoked full faith and credit of MD court judgment ; Balk argue no personal jurisdiction of MD court over Harris
- Held – (i) the MD court had personal jurisdiction (in rem jurisdiction) over Harris ; (ii) The judgment of MD court is entitled to the full faith and credit in NC court
Reasoning
- The temporary presence of the garnishee (Harris) within the state (MD) gives a court of that state (MD court) jurisdiction to render judgment against him (Harris) in the garnishment proceedings upon personal service of process within the state
- “The garnishee's debt owed to defendant followed the garnishee everywhere”
- P could attach the debt owed by the garnishee to D (while the garnishee is present in the forum state, though the garnishee is out-of-state )
- Dicta – the result might have been different if Balk had not been given notice of the attachment and an opportunity to defend in the MD action
Shaffer v. Heitner, 433 U.S. 186 , 1977, p.161
Fact
- a non-resident shareholder of a DE corporation brought a shareholder's derivative suit, in DE state court, against officers and directors (non-resident of DE), alleging that Ds violated duties to corporation by causing damages in a antitrust suit ; the breach of contract activities took place in OR ; Corporation headquartered in AZ ;
- Simultaneously, P filed a motion for sequestration of the DE property of the individual Ds (all non-residents) ; the property to be sequestered was stock of Ds ; sequestration pursuant to DE statute ; the stock was considered to be in DE (“statutory presence”) ;;
o (DO- P structure the suit as quasi in rem jurisdiction, coz, D officers are non-resident of DE, no in personam jurisdiction, ;; by quasi in rem jurisdiction, personal jurisdiction established )
- (DO- like Pennoyer attached non-resident Neff’s land in OR, But, the stock of a corp. incorporated in DE is in DE for the purpose of jurisdiction ? many corp. are incorporated in DE, shareholder of the corp. should fly to DE, if sequestered and attached, only because he purchased the share ?) (many Ps whose D happen to have share of DE corporation, would be able to file a suit in DE by quasi-in-rem jurisdiction)
the US Supreme Court Held
- ** DE court’s assertion of quasi-in-rem jurisdiction over Ds officers, based solely on the statutory presence of their property (share) in DE, violated the Due Process Clause
o DO - not clear as to whether the Court abandoned quasi-in-rem jurisdiction in general OR just as to stocks
- the minimum contacts test of International Shoe should have been applied to assertions of in rem (quasi-in-rem) as well as in personam jurisdiction
- Ds’ seized property did not have sufficient contacts with DE (under international shoe), to support DE's court’s jurisdiction over Ds officers ;
o that Ds officers had neither purposefully availed themselves of the privilege of conducting activities within the state, nor had any reason to expect to be brought before a Delaware court
DE Courts
- rejected jurisdictional challenge on the ground that this suit is a quasi in rem proceeding ; (like in Pennoyer,)
question
- constitutionality of a DE statute that allows a DE state court to take jurisdiction of a lawsuit by sequestering any property of the D that happens to be located in DE (here, stock of officers of DE incorporated corporation)
the sequestration statute
- DE court - said the purpose of the statute is not to secure possession of the property, but to compel the personal appearance ; DE’s interest in asserting jurisdiction over claim of mismanagement of a DE corporation and safeguard for defendants
Development in in personam jurisdiction p.161
Pennoyer
- every state possesses exclusive jurisdiction and sovereignty over persons and property within its territory
- no state can exercise direct jurisdiction over persons and property without its territory
- in virtue of the state’s jurisdiction over the property of the non-resident situated within its limits, the state court can inquire into that non-resident’s obligation to its own citizen to the extent of the property
- if defendant consented to the jurisdiction of the state court or was personally served within the state, (presence) a judgment could affect his interest in property outside the state. (Full Credit Clause)
Significance :
- Pennoyer limited in personam jurisdiction over defendant without border ; in rem action could proceed regardless of the owner’s location ; quasi in rem jurisdiction over defendant without border by any property of the defendant in the P’s state
international shoe
Development in in rem jurisdiction
inherent bearing on minimum contact of in rem jurisdiction
o property itself is the source of the underlying controversy
o D expected to benefit from the state’s protection of his interest
o state’s strong interest in assuring marketability of property within its border
o evidence (records and witness) will be found in the state
conclusion p.161
- in rem jurisdiction would not be affected by international shoe standard
- but, in quasi-in-rem jurisdiction like Harris v. Balk and the present case, international shoe standard would result in significant change
o the property, which is the basis for state court jurisdiction, is completely unrelated to the P’s cause of action ; without other ties, jurisdiction would be denied
o if direct assertion of personal jurisdiction over the D would violate DP (due process clause), indirect assertion of the jurisdiction would be equally impermissible
o e.g. If MD state court lacks jurisdiction over Balk in in personam jurisdiction, it equally should lack jurisdiction over Balk in quisi-in-rem jurisdiction
Conclusion :
- All assertions of state-court jurisdiction, including quisi-in-rem jurisdiction, must be evaluated according to international shoe standard
- (Prof. e.g. tenant in NY sue against landlord in MO for tenant-landlord issue in NY state court ; quasi-in-rem could be asserted ; even in personam could be ; in sum, if NY long arm does not reach landlord in MO, then apply quasi-in-rem jurisdiction )
DE sequestration statute
- DE state court based its jurisdiction on the statutory presence of D’s property (stock) in DE
- The first prong analysis
o Ds has no sufficient contact with DE
o Ds had ever set foot in DE
- The second prong analysis
o The property (stock) is not the subject matter of this litigation (violation of duty to corporation), nor related to cause of action
o Cause of action not took place in DE
(Prof)
- Where cause of action arise? (Cf. second prong, cause of action arise out of forum state)
o violation of fiduciary duty =/ anti-trust activity (DO- financial activity =/ physical activity)
- Shareholder, officer, director benefit from DE law?
Powell, Concurring p.161
- quasi-in rem jurisdiction is still valid (international shoe standard is not applied) where real estate is involved
(prof.)
- In Helico case (p.142), if Helico has huge bank account in NY, can P sue Helico in NY state court, under quisi-in-rem jurisdiction, after Shaffer ?
o NY state’s interest ; if not, P have to go to Peru ; according to concurring, Shaffer is not applied in case of land (real property) ; See FT.37 p.166
Note p.173
The UT Supreme Court upheld the attachment of farm land in UT for jurisdictional purpose
- (UT) quisi-in-rem jurisdiction was still upheld where real estate is involved,
- (prof.) sort of following Powell’s concurring ; if strictly following international shoe standard even in quisi-in-rem, jurisdiction might have been denied
Sec. H. jurisdiction based upon physical presence p.175
Burnham v. Superior Court of Cal., 495 U.S. 604, p.175
- Husband (NJ), who had been served with court summons and divorce petition while in CA moved to quash service
Held
- CA court had personal jurisdiction in divorce action over NJ resident who was served with process while temporarily in CA for activities unrelated to the suit
- Jurisdiction based on physical presence alone constitutes due process because it is one of the continuing traditions of the legal system which define the due process standard of “traditional notions of fair play” and substantial justice.
Reasoning
- Shaffer’s holding – which places all suits against absent non-resident on the same constitutional setting, whether in personam, in rem, or quasi-in-rem, - does not compel the conclusion that physically present D must be treated identically to absent one
- International shoe confined its minimum contacts requirement to situations in which the D be not present within the territory of the forum
o Distinction b/w the present case and Int’l Shoe and Shaffer : here, based upon in-state service of process
o Burnham is also applicable to corporation?
§ E.g. Helico CEO, while briefly stays in TX, is served ; TX jurisdiction over Helico? NO !! Burnham is human being, whereas this case is corporation ;
§ law – no transit jurisdiction for corporation ; rationale – transit jurisdiction for corporation would totally defeat international shoe standard
- a D voluntarily present in a particular state has a “reasonable expectation” that he is subject to suit there
- (1) consent ; (2) citizenship ;
- (3) presence
o 1) person
§ (i) international shoe (corporation, (DO, human being as well)),
§ (ii) burnham (human being) ,,, -
o 2) property – Shaffer ,
Sec.. another basis of jurisdiction – consent p.186
- Rule 12(h)(1) : a D who fails to raise an objection to personal jurisdiction in the answer is precluded from raising the issue subsequently
Ins. Corp. of Ireland. v. Compagnie Des Bauxites De Guinee, 456 U.S. 694, 1982, p.186
- Rule 37(b)(2)(A)(i) - failure to comply with a court order : directing that the matters embraced in the order … be taken as established for purposes of the action …
- The requirement of personal jurisdiction can be waived
- By submitting to the jurisdiction of the court for the limited purpose of challenging jurisdiction, the D agrees to abide by that court’s determination on the issue of jurisdiction
- the sanction of regarding certain facts as established, may be imposed, with respect to failure to comply with discovery orders, related to attempts to establish the facts relevant to the exercise of personal jurisdiction
(Prof.) consent of corporation by appointing agent for service of process
Q- non-resident corporation, when registering at forum-state, appointed an agent for service of process ; is it create personal jurisdiction ?
- No, under minimum contact – international shoe standard
- Yes, under consent, (general consent), forum state has jurisdiction over the corporation
o It is not inconsistent with int’l shoe coz the standard is about whether “presence” of corporation ; See (1) consent, (2) citizenship, (3) presence – person, property
o See bottom of p.187, in exchange for being forced to give consent, can make money ;
900 F 2d 1196 (8th 2000)
- appointment of an agent for service of process gives consent to the jurisdiction of MN courts for any cause of action, whether or not arising out of activities within the state
US S.Crt upheld enforceability of forum selection clause
- M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 1972, p.188
o Forum selection clause are prima facie valid and should be enforced by federal court unless enforcement is unreasonable
- Carnival Cruise Lines v. Shute, 499 U.S. 585, 1991 p.189
o Forum selection clause is subject to judicial scrutiny for fundamental fairness
o Forum selection clause is upheld based upon consent, not by minimum contact
