*1 HEITNER SHAFFER et al. Argued February June
No. 1977 Decided 75-1812. *3 MARSHALL, J., оpinion Court, delivered the in which Burger, J., JJ., joined, C. and and and Stewart, White, BlackmuN, Powell, joined. J., J., in Parts I—III of which filed a concur- Brennan, Powell, ring post, J., opinion opinion, p. 217. filed an concurring in the Stevens,
judgment, post, p. BreNNAN, J., 217. filed an opinion concurring in part dissenting and in part, post, p. RehNquist, J., part took no in the consideration or decision of the case.
John R. Reese him argued the cause for appellants. With on the briefs were Edmund Carpenter II, N. R. Franklin Balotti, and Lynn H. Pasahow. F.
Michael Maschio argued the for appellee. cause With him on the brief was Joshua M. Twilley. opinion
Mb. Justice Marshall delivered of the Court. controversy in this case the constitutionality concerns of a Delaware statute that allows a court take jurisdiction of a lawsuit sequestering defendant that happens to be Appel- located in Delaware. lants contend that the sequestration statute applied in this case violates the Due Clause Amend- Process of the Fourteenth both ment because it permits the state courts exercise jurisdiction despite the absence of among sufficient contacts defendants, the State of Delaware litigation, because deprivation authorizes the prop- defendants’ erty without providing adequate procedural safeguards. We find it necessary to only consider first these contentions.
I *4 Appellee a Heitner, nonresident Delaware, is the owner of one share of in Greyhound stock a business Corp., incorporated under the laws of principal Delaware with its place of in Phoenix, May business On he 22, 1974, filed Ariz. a shareholder’s in Chancery derivative suit the Court of for New Castle in County, which he Del., named as defendants wholly its Greyhound, Greyhound owned subsidiary Lines, Inc.,1 present and 28 or former officers or directors of one or
1 Lines, Inc., Greyhound incorporated in California and has its place Phoenix, principal in business Ariz. alleged In Heitner corporations. essence,
both Greyhound violated duties defendants had their individual in actions that subsidiary engage it by causing held liable substantial corporations being in resulted a fine large suit2 and a in damages private in a antitrust to these contempt The which led criminal action.3 activities penalties place Oregon. took motion filed a
Simultaneously complaint, his Heitner with property of the of the Delaware sequestration for an order of Ann., Code Tit. to Del. pursuant defendants individual accompanied by supporting a (1975).4 This motion was § 366 against attorneys’ entered $13,146,090 plus fees was judgment A Trade Greyhound Stages, Greyhound Corp., 1972-3 Inc. Hood Mt. — 2d-(CA9 1977); App. 10. 74,824, aff’d, Cas. F. ¶ (ND Corp., Ill. Greyhound Supp. 525 United States v. F. See 1974). (CA7 aff’d, (ND Ill.), 2d 1973) 508 F. Supp. and 370 F. $500,000. $100,000 Greyhound Greyhound Lines was fined provides: 4 Section 366 Chancery that any complaint filed in the Court “(a) appears If it nonresident any of the defendants or one or more defendant directing may such nonresident State, an order the Court make designated. by day be appear certain to defendant or defendants to defendant or defendants nonresident shall be such Such order served published manner in such otherwise, practicable, mail if and shall be or directs, consecutive weeks. less than once week for 3 as the Court not compel the sеizure may appearance of the defendant The Court may any property be sold under part property, all which or his does plaintiff, if the defendant pay the demand of the order of the Court Any property whose shall appear, not or defaults. defendant otherwise general appearance who shall have entered a have been seized and so plaintiff, petition the Court for an may, upon to the cause notice any part releasing thereof from seizure. property order such satisfy the plaintiff shall Court unless shall release such possibility Court circumstances there a reasonable that because of other may substantially likely plaintiff release less will that such render petition If judgment secured. such shall obtain satisfaction of filed, granted, petition or if shall be such shall remain no such satisfy subject may any judgment to seizure and be sold to in the entered *5 affidavit of counsel which stated that the individual defend- ants were nonresidents of Delaware. The affidavit identified the property sequestered to be as 3%
“common stock, Second Cumulative Preferenced Stock and stock unit credits of the Greyhound Defendant Corporation, Delaware corporation, as well all op- as tions and all warrants to purchase said stock issued to said individual Defendants and all contractural [sic] obligations, all rights, debts or credits or due accrued or for the any benefit of of the said Defendants under any type of written or agreement, legal contract other instrument any kind any whatever of the between individual Defendants and said сorporation.” requested The sequestration signed order day was the the motion filed.5 Pursuant sequestrator6 was to that order, the may any The cause. Court property any part time release such upon giving security. thereof sufficient “(b) may necessary The Court respecting make all rules the form of process, the maimer thereof, of issuance and return the release of such property from property seized, may seizure and for the of the sale so and require plaintiff give security approved to abide order of the respecting property. Court
“(c) Any assignment transfer or property of the seized so after seizure shall thereof and property be void after the sale of made confirmed, purchaser shall be right, entitled and have all the title and interest the defendant in and to the so seized and sold and such sale and purchaser confirmation shall transfer to the all right, title and fully interest defendant in as if the had purchaser defendant transferred the same to the in accordance with law.” sequestration As a condition of order, plaintiff both the and the sequestrator required $1,000 were to file bonds of to assure compliance their with App. the orders of the court.
Following a technical complaint, amendment of the original seques- tration order replaced by sequestration was vacated and an alias order original. identical terms to the sequestrator appointed the court to sequestration. effect the His appear serving sequestration duties to consist order on the *6 192 common Greyhound 82,000 shares approximately
“seized” belong- defendants,7 options аnd 19 of the belonging to stock accom- seizures were These defendants.8 ing to 2 another equivalents or their orders “stop transfer” plished by placing record Corp. So far as the Greyhound of the on the books property representing the seized certificates shows, none of the was considered The stock present in Delaware. physically was of Del. to virtue subject seizure, so Delaware, and to be the (1975), which makes Delaware 8, § 169 Tit. Ann., Code corporations.9 stock in -ownership of Delaware situs of all suit of the initiation of the were notified All 28 defendants addresses and directed to their last known by certified mail The County newspaper. Castle in a by publication New (hereafter was referred property seized defendants whose special for entering appearance responded appellants) as property of the receiving corporation from that a list corporation, named filing performing affects, with court. For and that list which order sequestrator $100 fee case, the received a under in this those services sequestration $100 and under the alias order. original order day Greyhound sequestration closing price stock The on Times, May p. 62. New York order issued was was $14%. sequestered approximately $1.2 million. Thus, was of the stock value warrants, belonging Debentures, stock some of unit credits options sequestered. In stock were also owned either or defendants who Greyhound employment addition, reported that it had an with contract $250,000 calling payment a 12-month defendants one period. Greyhound to furnish further information refused wages, ground due their debt on the since the sums constituted Family Corp., Finance seizure would be See Sniadach v. unconstitutional. challenge 395 U. S. Heitner did this refusal. remaining apparently subject owned no defendants
sequestration order. provides: Section 169 title, action, attachment, .garnishment jurisdic- purposes
“For all State, purpose taxation, tion of all courts held this but not for ownership capital corporations existing of the stock of situs all State, organized chapter under the laws of whether under this otherwise, regarded shall this State.”
the purpose of moving quash process service of and to sequestration vacate the They order. contended that the ex parte sequestration procedure did not accord them due process of law and that the capable seized was not of attach- ment In Delaware. addition, appellants asserted that under the rule of International Shoe Co. Washington, 326 *7 310 (1945), S. they did not have sufficient contacts with Delaware to sustain the of that State’s courts.
The Court of Chancery rejected arguments these in a letter opinion emphasized which the purpose of the Delaware se- questration procedure:
“The primary purpose ‘sequestration’ as authorized by 10 Del. C. § 366 is not to secure possession property pending a trial between resident debtors and creditors on the issue of who has right the to retain it. On con- the trary, here employed, ‘sequestration’ a process used compel personal the appearance of a nonresident de- fendant to answer and brought аgainst defend a suit him in of equity. a court Realty Sands v. Corp., Lefcourt 117 2d Supr., (1955). Del. A. 365 accomplished by It is appointment the sequestrator of a by this to seize Court and hold of the nonresident located in this State subject to further Court order. If the defendant enters general sequestered the rou- appearance, tinely released, plaintiff unless the special appli- makes cation to continue seizure, plaintiff its in event which the has burden of proof persuasion.” the App. and 75-76. This limitation on the purpose length of time for which sequestered property is the held, concluded, court rendered process inapplicable requirements the due enunciated in Family Corp., Sniadach Finance (1969); Shevin, Fuentes T. U. S. 67 and Mitchell v. (1972); W. Co., (1974). Grant App. U. S. The 75-76, 80, 83-85. also found no court state-law federal constitutional barrier the reliance on sequestrator’s Code Ann., Del. 169§ Tit. statu- the court held that (1975). App. Finally, 76-79. basis for provided sufficient tory situs of stock Delaware court. quasi jurisdiction by in a Delaware rem exercise of Id., at 85-87. Supreme affirmed
On Court appeal, the Delaware Greyhound Corp. v. judgment Chancery. of the Court of Court’s Heitner, Supreme 361 A. 2d Most rejecting contention opinion appellants’ was devoted to proc- due with the sequestration procedure is inconsistent The line of cases. analysis developed ess the Sniadach agree- part on its argument rejection court based of that of the Chancery purpose ment with the Court of appearance sequestration procedure compel Sniadach cases. purpose involved defendant, origins relied on what it considered the ancient court also procedure procedure approval sequestration asserting interest in opinions Court,10 Delaware’s *8 a Del- mismanagement of adjudicate claims of jurisdiction safeguards that the for defendants aware corporation, A. 2d, 361 at 230-236. found in the Delaware statute. 10 230-231, 2d, 228, our in relied, on decision The 361 A. at court Morgan, (1921), Ownbey 94 and references to that decision v. 256 U. S. Di-Chem, Inc., 601, Georgia 610 Finishing, Inc. v. 419 U. S. in North J., (1975) (Powell, concurring judgment); v. Pearson in Calero-Toledo (1974); Leasing Co., 663, 14 Mitchell W. T. Yacht 679 n. v. S. Shevin, 600, (1974); 67, Fuentes v. 91 Co., 613 407 U. S. Grant 416 U. S. supra, Family Corp., (1972); Finance n. 23 Sniadach Ownbey constitutionality only question in was the before the Court has been attached requirement defendant whose of entering appearance. read the an We do not recent file a before bond Ownbey suggesting Ownbey necessarily consistent references interpreting Due the Process Clause. recent decisions with more Sequestration equity counterpart process foreign attach the Ownbey. sequestration Delaware's ment in suits at law considered statute. See Sands modeled after its attachment statute was Lefcourt Realty 365, (Sup. 344-345, 117 2d Corp., Ch. A. Ct. 35 Del. Sequestration 1955); Moyer, A Delaware: Constitutional Anal Folk & ysis, 73 L. Rev. 751-754 Colum.
Appellants' claim that the Delaware courts did not have adjudicate action this received much more cursory treatment. The analysis court's jurisdictional issue is contained two paragraphs:
“There significant are questions constitutional at issue here say but we at once that we do deem rule not International Shoe to be one thеm. . . . The reason, of course, is quasi § under 366 remains ... in rem founded presence capital here, stock on prior by contact defendants with Un this forum. der 8 § Del. C. 169 the capi ‘situs of ownership tal stock of all corporations existing under the laws of this State ... this State,' provides and that [is] initial for jurisdiction. basis may Delaware constitution ally establish situs of such shares it has done so here, ... presence and the provides thereof § foundation for 366 in this On case. agree analy ... issue we with the sis made and the conclusion reached Judge Stapleton Industries, in U. Gregg, Supp. Inc. v. Del., D. F. 1004 (1972).[11]
“We hold that Greyhound seizure of the shares is not invalid plaintiff because prior has failed meet con- tacts tests of Id., International Shoe.” at 229. probable jurisdiction. We noted 813.12 We U. S. reverse. judgment The District Court in U. S. Industries was reversed Appeals (1976),
Court of for the Third Circuit. cert. 540 F. 2d pending, passage No. of Appeals 76-359. The Court characterized *9 from Supreme opinion quoted “cryptic the Delaware in Court’s text as Id., conclusions.” at 149. 12 law, sequestered Under property Delaware defendants whose been has general appearance, personam must enter a subjecting thus into themselves liability, they Greyhound Corp. before can defend on the merits. See v. Heitner, 225, (1976). 2d Thus, judgment A. 235-236 if the were below appealable judgment, (2), considered not to be an final 28 U. S. C. 1257 § appellants suffering judgment entering would the choice have a default or
II rejected appellants’ jurisdictional courts Delaware The in a brought quasi noting that this suit was challenge quasi rem is tradition- proceeding. rem Since present seizure of ally bаsed attachment or defendant and the not on contacts between the jurisdiction, of con- claimed lack appellants’ considered State, the courts categorical This unimportant. with to be tacts Delaware conceptual soundness of the analysis assumes continued Neff, Pennoyer century-old founded on the case structure 95 U. S. court brought in federal
Pennoyer ejectment an action was jurisdiction. Pennoyer, the defendant diversity under the in sheriff’s purchased action, held the land under deed ob- attorney’s fees judgment on a to realize sale conducted At Mitchell. previous action one Neff in a against tained Neff was court, Oregon suit in an of Mitchell’s the time service An statute allowed Oregon. Oregon a nonresident had on nonresidents who by publication bring Neff procedure had Mitchell used that State,13 and defending This is in same on the merits. case general appearance and (1975): Cohn, Broadcasting Corp. posture Cox as was final on the federal judgment plainly Supreme Court's “The [Delaware] Appellants in the state courts. subject further review and is not issue are of action damages of the state cause if elements be liable for will grounds, true, but They may prevail at trial on nonfederal proved. statute, erroneously upheld the there should court if the [Delaware] no trial at all.” pragmatic approach we have
Accordingly, with “consistent determining id., finality,” at we conclude past in followed in the meaning of 1257. judgment below is final within § complaint required copy of the summons also that a statute place his known to the defendant if of residence was be mailed S., diligence. 95 U. plaintiff determined with reasonable could be he had averred that did not know could 718. Mitchell only address, publication “notice” Neff’s so that was the determine Id., given. at 717.
before the The United States Circuit Court for court. the brought ejectment District of in which Neff his Oregon, action, validity judgment against of the Neff recognize refused to the accordingly in Mitchell’s awarded the land Neff.14 suit, and This Court affirmed. on the opinion for the Court focused
Mr. Justice Field’s Although judicial powers. territorial limits of the States’ truly independent not sover- recognizing that are States was jurisdiction Mr. Field found that their eigns, Justice regulate “principles public law” that defined of those The first relationships independent nations. among jurisdiction exclusive every possesses was “that principles State terri- its property within persons and over and sovereignty direct tory.” “that no can exercise The second was its property or without authority persons over juris- Id., “in territory.” Thus, 722. virtue of State’s within of the non-resident situated property diction over the non-resi- limits,” inquire courts “can into its state neces- ... to the extent to its own citizens obligations dent’s Id., at 723. property.” sary disposition of the control inquiry of that if the conclusions recognized The Court interest owner, his property nonresident were adverse to the if the Similarly, Ibid. property would be affected. courts or jurisdiction of state consented to the defendant could affect judgment personally State, served within the was attempt But outside State. his interest persons “directly” extraterritorial to assert inherent exceed the would offend sister States such resulting A from judgment power. limits of State’s only unen- was concluded, Field attempt, Mr. Justice an ruling in Mitchell’s on defects Court based Federal Circuit by publication and in the order for service support affidavit Field Id., at 720. Mr. Justice proved. publication was which affidavit rulings, considering those had confined itself to that if this indicated Court Id., at been reversed. judgment would have *11 rendering forceable in but void the States,15 other was also Due because in violation of the it had been obtained Id., 732- Process Clause of the Pourteenth Amendment. Alderson, also, g., Freeman 119 See e. v. 187-188 analysis judgment
This led to the conclusion that Mitchell’s power Neff the against could not be based on State’s validly been persons over within Neff had not borders, its because appeared personally consensually nor he Oregon, served had even Oregon before the reasoned that court. The Court service personal action, if Neff had received notice process have been ineffectual outside the State would territorial power since the State’s was limited its could held, boundaries. the action the Court Moreover, over power basis the State’s not sustained the not property had property within its borders because that other court brought been before the attachment which procedure prior the judgment.16 judgment Since sale authorized the sheriff’s sale was therefore invalid, regained transferred no title. Neff his land. is not Pennoyer
From our perspective, importance de- but fact that its and corollaries result, principles rived from them constitu- became the elements basic 15 recognize judgment doctrine that one State does have to firmly jurisdiction was of another State’s if the latter not have courts did Pennoyer. D’Arcy Ketchum, g., 11 See, established at the time of e. (1851); Kibbe v. Otis, (1850); How. 336 Boswell’s Lessee 9 How. 1786). Kibbe, Kirby (Conn. Super. Ct. jurisdiction Attachment was considered essential to the state court’s First, for two reasons. with substituted service attachment combined actually provide greater receive would defendant would assurance Second, publication notice of the alone. since action than would jurisdiction ownership depended court’s on the defendant’s property, disposed the State and if could be defeated the defendant necessary jurisdiction attachment was when to assure the court had proceedings began it entered and continued have when judgment. S., 95 TJ. at 727-728.
tional governing doctrine jurisdiction. state-court See, e. A Hazard, Theory General of State-Court Jurisdiction, Sup. Ct. (hereafter Rev. 241 Hazard). noted, As we have under Pennoyer state authority adjudicate was based on the jurisdiction's power over persons either or property. This concept fundamental is embodied in vocabulary which very we use to describe judgments. If a court’s based on its authority over the person, defendant’s action and judgment are denominated “in personam” impose and can personal obligation on the defendant plaintiff. favor If jurisdiction is based on the power court’s *12 within its territory, “quasi action is “in rem” in called or rem.” The effect of a judgment in such a case is limited to the property supports that imрose and does not a personal liability on the property owner, since he is not before the court.17 Pennoyer’s In only owner is affected terms, “indirectly” in by an rem judgment adverse to his interest in property subject disposition. to the court’s
By concluding that authority every tribunal “[t]he necessarily by restricted the territorial limits of the in State which it is established,” 95 S., 720, Pennoyer sharply U. availability limited the of in personam jurisdiction over defendants not resident in the forum If State. a nonresident defendant could be not found in a he State, could not be sued On there. the other hand, since the in property which 17 judgment “A in persons designated rem affects the interests all property. quasi judgment A in rem particular affects the interests persons designated property. The types. latter is of two In one the plaintiff seeking pre-existing to secure a subject claim in property extinguish and to establish nonexistence of similar interests of particular persons. In the plaintiff other the seeks to apply what he concedes the property to of the defendant to the satisfaction of a claim against Restatement, Judgments, him. 5-9.” Denckla, Hanson v. 357 235, 246 (1958). 12 U. S. n. Hanson, As did the we will generally Court for convenience use the quasi rem” place term “in of “in rem and in rem.” 200 have sovereignty
was located was considered to exclusive proceed regardless in rem could actions property, not process since a State’s could Indeed, owner’s location. beyond Pennoyer Court borders, reach held after any require give property effort process due did owner his personal was involved in an in rem notice Hunter, g., v. 241 proceeding. e. Ballard U. See, S. Huling (1907); Griggs, (1890); Arndt S. Kaw U. Valley Co., (1889). S. 559 R. generally rules Pennoyer favored nonresident defend- by making advantage
ants them harder to sue. was This ability of a plaintiff resident reduced, however, satisfy bringing a nonresident defendant against claim plain- court located in the into defendant Quasi-In-Rem e. Jurisdiction: See, Zammit, tiff’s State. Unconstitutional?, Outmoded John’s L. Rev. St. in the example, For well-known case Balk, 215 (1905), Epstein, Harris v. a resident against claim North Car- Maryland, Balk, had a resident of money owed North Carolina Harris, resident, olina. another Epstein happened Maryland, to Balk. Harris visit When Harris the debt garnished his debt did not contest Balk. *13 attorney. it to North Carolina paid Epstein’s to Balk and North Balk sued in this Court Carolina, When later Harris Full Faith Credit U. Art. Clause, Const., held that the and payment Epstein Harris’ be treated IV, 1, required § that to his debt Court reasoned that discharge as a to Balk. This intangible Balk was an form of the debt Harris owed location that belonging Balk, and that the to By obtaining personal traveled with the debtor. had his Epstein Balk, S., “arrested” debt Harris,
over
to
Maryland
brought
it into the
court. Under the
at
by Pennoyer, Epstein
then
was
entitled
structure established
against
that debt to vindicate his claim
proceed against
to
subject
Balk himself was
to
though
juris-
not
the
Balk, even
Maryland
diction of a
g.,
tribunal.18 See
e.
also,
Louisville &
N. R.
Deer, Co. v.
U. S. 176
Steele
(1906);
v. G.
Searle
D.
Co., &
(CA5
Pennoyer recognized itself rigid that its categories, even as blurred by Harris, the kind of typified action could necessary accommodate some litigation. Accordingly, Mr. Justice Field’s opinion carefully noted that cases the involving personal status of the plaintiff, such divorce could actions, as adjudicated plaintiff’s in the even the though home State defendant could not be served within atS., that State. U. Similarly, opinion 733-735. the approved practice the of con sidering a foreign corporation in business a State to have doing consented Id., to sued in at being 735-736; see State. Lafayette French, Ins. Co. v. How. 404 This
18The Court in Harris holding limited in the States which (Balk) principal garnishee (Harris) defendant could he have sued the if personal garnishee had obtained in the that State. S., 222-223, explained: The Court importance original “The of the fact right of the creditor to sue the foreign State, right his debtor in the affecting as the of the creditor in garnishee, creditor to sue the debtor or lies the nature of the proceeding. plaintiff, proceeding foreign attachment The the such the able to sue out attachment from the and attach debt due garnishee (the garnishee’s) creditor, to his because the fact plaintiff really proceeding representative such creditor of garnishee, and if right therefore such himself had the creditor commence foreign representative suit to recover the debt State his has the same right, him, representing may garnish debt, provided attach municipal law of State where permits the attachment was sued out Id., it.” at 226. problem reasoning plaintiff with is that unless has obtained judgment establishing against principal see, his claim defendant, Hostetter,
e.
Baltimore & O. R. Co.
(1916),
right
The with the concomitant automobiles, causing injury the incidence where of individuals States they Pennoyer, subject to in under personam were not actions juris required further moderation territorial limits on power. modification, dictional This like accommodation to the accom corporate activities, realities of interstate was left struc plished legal conceptual use fiction that Pennoyer theoretically ture Cf. Ol established in unaltered. Co., Central 346 U. 340-341 berding v. Illinois R. S. motorist, The out-of-state (1953). fiction used was that altogether from the was assumed could excluded who it by using highways appointed a had those highways, State’s agent accept process. See designated state official as his motorist’s Pawloski, Hess Since the state State, could be within “agent” personally served nonresi jurisdiction over the personam could courts obtain dent driver. since easy to administer theory was motorists’ consent driver had used only finding the out-of-state required implied both the fictions By contrast,
the State’s roads. corporation and of foreign part of to sеrvice on the consent was finding corporation presence required a corporate Defining criteria forum State. in the business” “doing they were met deciding whether finding and making that International Shoe See, judicial energy. e. much absorbed *15 Washington, Co. v. at 317-319. S., While the essen tially quantitative tests which emerged from pur these cases ported identify to simply presence circumstances under which or consent could be attributed to the corporation, it became they clear that were in fact attempting to ascertain “what dealings just subject make it to foreign corporation to local suit.” Gilbert, Hutchinson v. Chase & (CA2 F. 2d 139, 141 1930) (L. Hand, In J.). Shoe, International acknowledged we that fact.
The question in International Shoe was cor- whether the poration subject was judicial to the and taxing jurisdiction of Washington. Mr. Chief Justice opinion Stone’s the Court began analysis question by of that noting that the historical basis personam of in jurisdiction was a over the power court’s person. defendant’s longer That no power, was however, central concern: way
“But now capias respondendum that the ad given has personal notice, service of form summons other due process requires only subject a de order to fendant judgment personam, present if he be within territory mini he certain forum, have mum contacts with it the maintenance of such play suit does fair not offend 'traditional notions of justice.’ substantial Meyer, Milliken 311 U. S. at 463.” 316. S.,U. foreign over a
Thus, inquiry into the State’s corpo- corporation appropriately focused not on whether been “present” ration wаs but on whether there have with the state of corporation “such contacts of our federal reasonable, in the context forum make it de- require corporation system government, Id., brought suit which there.” particular fend quantitative Mechanical or of the defendant’s evaluations of rea- question activities in the forum could not resolve sonableness: depend must rather
“Whether due
is satisfied
process
activity in
*16
upon
relation
the
of the
quality and nature
of
laws which
orderly
to
and
administration
the
the fair
to insure.
process
due
clause
purpose
was the
of the
may
state
make
contemplate
not
That clause does
against
individual
judgment
personam
an
binding a
or
the
no con-
with which
state has
corporate defendant
Id.,
at 319.19
tacts, ties,
relations.”
among
forum,
the
the
and
Thus,
relationship
defendant,
the
mutually
sovereignty
the
the
rather than
exclusive
litigation,
the
Pennoyer
the
which the rules
became
rest,
of
States on
of
inquiry
personal
jurisdiction.20
central
of
into
concern
the
departure
Pennoyer’s
this
from
con-
The immediate effect of
the
ceptual apparatus was to
of
state
ability
increase the
personal jurisdiction
courts to
defend-
obtain
over nonresident
g.,
California,
ants.
e.
Jurisdictional Reform in
See,
Green,
quoted indicates,
language
As
International Shoe Court believed
the
the
setting
against
governed
it was
forth
natural
standard
actions
persons
corporations,
disagree.
as
and
no
See
well
we
reason to
see
(Inter
Co.,
(1957)
Ins.
also McGee
International
v.
355 U. S.
Life
jurisdiction
national
expanding
Shoe culmination of trend
state
toward
“foreign corporations
nonresidents”).
The differences
other
corporations may,
course,
between
to the con
individuals and
of
lead
jurisdiction
given
clusion that a
set of circumstances establishes state
type
over one
of defendant but not over the other.
Denckla,
Nothing
(1958),
in Hanson
con
v.
No equally
change
dramatic
has occurred in
govern
the law
ing jurisdiction in
have,
rem. There
intima
been
however,
tions
collapse
Pennoyer
in personam
wing
has not
left that decision
as a
unweakened
foundation
rem jurisdiction.
court
have
opinions
Well-reasoned lower
questioned
proposition
presence
property'
that the
gives
adjudicate
to the
rights
that State
relationship
dis
regardless
underlying
pute
forum.
U. S.
owner
e.
See,
Industries,
Gregg,
cert.
(CA3
Inc.
Although this Court has not addressed
argument
directly, we have held that subjected
cannot be
judgment
a court's
unless reasonable and appropriate efforts
have been
give
made to
actual notice
owners
the action.
City
Schroeder v.
New York,
“a classification for which the are so elusive standards generally being primarily confused and which, may vary state and do from state define, courts state.” at 312. S.,
It is law of state-court clear, therefore, securely established longer no stands on the foundation Pennoyer.21 ripe to consider We think that the time justice set whether the standard of fairness and substantial govern held to actions forth in International Shoe should be in personam. in rem as well as
21 (pos (Second) 59, a of Conflict of Laws Comment Cf. Restatement § inconsistency underlies principle of reasonableness which between sible jurisdiction in based judicial jurisdiction and of rem of traditional field rule solely 60, (same jurisdiction State); land in Comment a as to based on § (rule Balk solely State); 68, Comment c of Harris v. on chattel in § reasonableness”) thought principle the basic of “might be inconsistent with (1971).
207 III applying jurisdiction The case for in rem the same test play of “fair justice” substantial governs assertions of in jurisdiction personam is simple is straightforward. It premised recognition jurisdic- ‘judicial phrase, “[t]he thing/ customary elliptical tion over a way referring is a of jurisdiction persons thing.” over the interests of in Re- a of (Second) Introductory statement of Conflict 56,§ Laws Restatement).22 (1971) (hereafter Note recognition This leads juris- to the conclusion in order to of justify an exercise rem, in jurisdiction diction for sufficient to the basis must be persons justify exercising “jurisdiction the interests of thing.” The an standard whether exer- determining jurisdiction of persons cise over the interests of is consistent with Due Clause is minimum-contacts stand- Process ard elucidated in Shoe. International
This not that the argument, course, ignore of does the fact of may existence presence property a State bear on the by providing among State, contacts the forum claims to For when defendant, litigation. example, and the controversy underlying itself source of the property are the unusual it would plaintiff defendant,24 and the between juris- have located not where the for the State claim In the defendant’s cases, such diction. really against persons. Whether rights, are like all proceedings, "All persons rights in rem depends number
they proceedings on the are Registration, 76, 71, E. Tyler v. Court 175 Mass. N. affected.” dismissed, (Holmes, J.), appeal C. 179 U. S. 812, 814 in rem liability an action potential defendant It true that not does affect property, limitation the value but limited subjecting to state-court defendant argument. fairness litigated, being Cf. depend on the size the claim does 88-90; Shevin, S., at n. Fuentes infra. quasi rem type first actions and the category includes true This supra. n. in rem proceedings. See *19 208
located in the would State indicate that he ex- normally25 pected protection to benefit the from State's of his interest.26 The strong assuring marketability interests the State’s of within borders [27] and in providing a procedure for peaceful disputes possession resolution about that of of support would like- jurisdiction, also as would the that records important lihood and witnesses will be found in of property may The also presence juris- favor State.28 cases, injury diction in such as suits suffered land of where the owner, ownership an absentee defendant’s of the property is but action is otherwise conceded cause of out of that rights growing related to and duties ownership.29 many appears, therefore, types It that might brought rem would not actions which now are or holding be affеcted a assertion state-court /jurisdiction Shoe satisfy must the International standard.30 quasi in typified by rem action Harris v. Balk type For the analy present case, however, accepting proposed
and the significant change. sis result in These are cases where would 25 presence property in the State In forum some circumstances suggested g., Cf., e. Restatement support in text. will not inference 672-673; c, Note, §60, d; Traynor The Power of Comments 767 It, 47 Colum. L. Rev. Atypieally Affect Title in a Chattel Removed to (1947). 26 S., Denckla, Cf. Hanson 27 Tyler Registration, supra. See, e. v. Court of 28 all these include factors that suggest illustrations do We are decision, we have mentioned may nor that factors affect necessarily decisive. 29 (1938). If Philadelphia, Pa. D. & C. such Dubin v. Cf. under in rem rather than brought an under the action were quasi type. statute, rem action second long-arm it would be supra. See n. Lasting Legacy A Utility Smit, Enduring of In Rem Rules: Cf. Pennoyer Brooklyn suggest Neff, L. We do not Rev. text, jurisdictional than discussed such doctrines other those adjudications status, governing particularized are inconsistent rules See, g., Traynor e. 660-661. with the fairness. standard *20 the basis for state-court property the which now serves as plaintiff’s cause of jurisdiction completely is unrelated to the prop presence of the defendant’s Thus, although action. the erty of other ties the existence might suggest a State pres State, and the the among the the defendant, litigation, support not the State’s property ence of the alone would over which jurisdiction. If cases exist, those other ties did not be not thought jurisdiction the is now have could brought in that forum. would most Shoe test acceptance
Since of the International against arguments we cases, affect this class of examine category of they relate to this adopting that standard as type note that this however, Before we litigation.31 doing so, argument of the presents also the clearest illustration of case single by a assessing jurisdiction of in favor of assertions only one, in cases such as Harris and this standard. For bringing provide is to the basis played by role purpose of express Indeed, into the defendant court.32 defendant compel the procedure is to sequestration Delaware if direct In cases, such appearance.33 personal to enter a would the defendant personal jurisdiction assertion as- indirect seem that an it would Constitution, violate the impermissible. equally jurisdiction should sertion of that appropriate because is category cases also Concentrating on property in the State presence categories, the extent the other Shoe, International under contacts existence of sufficient indicates regard justifying jurisdiction rely property as on need to no there contacts. the existence of those less limit the extent does serve to property seized The value provide support for limitation does not liability, but that possible poten supra. case, appellants’ 23, In this jurisdiction. See n. assertion nn. $1 million. See jurisdiction exceeds in rem liability under tial supra. 8,7, emphasized Delaware’s purpose This supra, See the defendant enters the merits unless defense to allow refusal liability. personam n. submitting full in See appearance, thus general supra. The primary rationale for treating presence of as a sufficient basis for to adjudicate claims over which the State would not have if International Shoe applied wrongdoer that a
“should not be payment obligations able to avoid his expedient of removing place his to a where assets subject he is personam not to an in suit.” Restatement 66,§ a. Comment
Accord, Developments does however, 955. This justification, explain why jurisdiction without recognized should be *21 regard to property whether the because present in the State of an effort does it to avoid owner’s Nor obligations. the support jurisdiction At adjudicate underlying to claim. the most, that in is located suggests property a which State jurisdiction should have use attach that property, proper procedures,34 security being sought for judgment a in forum a where litigation consistently the can be maintained with International Shoe. & Trautman See, e. Von Mehren 1178; Hazard More 284-285; Beale, supra, n. at 123-124. over, we know of justify assumption that a nothing the debtor can avoid his his paying obligations by removing property to per a State in which his cannot creditor obtain jurisdiction sonal him.35 over The Full Faith and Credit Clause, all, after makes the valid personam judgment one State enforceable in other all States.36
34
Georgia Finishing,
Di-Chem, Inc.,
North
See
Inc. v.
We are left, then, significance consider the history of jurisdiction solely based presence property on the Although theory power State. territorial both essential to sufficient for jurisdiction has under- been mined, we never held in a have presence jurisdiction State does not automatically confer owner’s property.38 history interest in that must This property, defendant have has whether or not would original to determine the existence of the debt as an matter. 18, supra. Cf. n. raise, ques This consider, case does and we do not therefore presence tion whether of a in a defendant’s State is a sufficient basis plaintiff. when no other forum is available to the *22 38 Pennington 269, contrary, Bank, To the in v. Fourth Nat. 243 U. S. (1917), 271 we said: law,
“The
not,
process
Fourteenth
guaranteeing
Amendment did
due
of
abridge
jurisdiction
possessed
property
which a State
over
within
borders,
juris
regardless
presence
of
That
of
residence or
the owner.
tangible
property.
diction extends
intangible
alike to
Indebtedness
and to
due from
an
deposits
to a
are
resident
non-resident —of which bank
example
Chicago,
property within
Rock Island &
the State.
Pacific
—is
Ry.
Sturm,
is, indeed,
property
Co. v.
species
We therefore conclude that all assertions of state-court set jurisdiction according must be evaluated the standards progeny.39 forth in International Shoe and its presents of this Federal Constitution no obstacle to full exercise power.” Holding Corp. Operating Co., Huron Lincoln Mine U. S.
See also 183, 193 decisions, however, sweeping
More recent contain no endorse- similar jurisdiction S., property. Denckla, on ments of based In Hanson jurisdiction “[fjounded we noted that a state court’s in rem jurisdiction physical power” presence and that basis of the “[t]he subject property jurisdiction within the territorial of the forum State.” case, however, We found in that which was the basis for present in rem the assertion of was in the We not State. presence did have therefore to consider whether the justify jurisdiction. sufficient defend- State was We also held that the justify personam ant did not have sufficient contact with the State to jurisdiction. 39It would not be fruitful for to re-examine the facts of decided us cases Pennoyer on the and Harris rationales of to determine whether might today. adopt have been sustained under the we To the standard *23 prior standard, they extent that decisions are inconsistent with this are overruled.
IV The Delaware courts based their assertion jurisdiction in solely case on the statutory presence of appellants’ Delaware. Yet that subject not the matter of this nor litigation, is the underlying cause action related to the property. Appellants’ holdings Greyhound not, do therefore, provide sufficient with contacts Delaware support jurisdiction of that State’s courts appel- lants. If it exists, must have some other foundation.40
Appellee Heitner allege did not and does not now claim that appellants have ever set foot in Nor Delaware. does he identify any act related to cause of having his action as place taken in Delaware. Nevertheless, he contends that appellants’ positions as a corporation directors officers of provide chartered ties, Delaware41 sufficient “contacts, relations,” Washington, International Shoe Co. v. S., at
40Appellants argue that our determination that the minimum-contacts unnecessary governs jurisdiction of International Shoe here malees standard Appellants consideration of existence of such contacts. Brief for 27; Appellants They Reply point they Brief for out that never were summons, long-arm personally with that Delaware served has no statute service, Supreme authorize such and that Court which would the Delaware authoritatively held has the existence of contacts irrelevant Ann., part under Del. Code Tit. As of its §366 sequestration Chancery order, however, the Court directed clerk appellant copy complaint each summons and certified send mailings record indicates that those were made and contains mail. The appel receipts appellants. from least None of the return actually suggested that he did which receive the summons lants has compliance designed to him with a Delaware statute directed was circumstances, In jurisdiction over nonresidents. these wе will provide appel procedures bring followed be sufficient to would assume courts, existed. before the Delaware if minimum contacts lants significance, case, need view we take of the we not consider On the appellants positions only any, with a the fact that some hold if Greyhound incorporated subsidiary which is in California. *24 jurisdiction appel- over give with that its courts 319, State to argument This derivative action. lants in this stockholder’s strong what Heitner asserts to be primarily is based of a management in supervising Delaware interest of from That interest is said to derive corporation. Delaware establishing corporation law the role Delaware officers and directors. defining obligations owed to it Delaware’s concludes, protect interest, appellee In order fiduciaries such corporate over must have courts appellants. as of the Delaware undercut the failure argument
This com finds so appellee state interest Legislature assert appellants’ not on jurisdiction, law bases Delaware pelling. presence on the but rather corporate fiduciaries, as status pro Although sequestration property in the State. their in derivative may frequently be most used cedure used here Co. Fawcett Hughes Tool against directors, officers and suits (Del. 1972), Ch. Publications, Inc., 290 2d 693, A. concern with specific no authorizing statute evinces against suit can used Sequestration actions. such Gregg, 540 Industries, Inc. v. see, nonresident,42 e. (breach of 76-359 (CA3 1976), pending, cert. 2d 142 No. F. Inc., Publications, Tool Co. v. Fawcett Hughes contract); if only they corporate fiduciaries reaches supra (same), and or other corporation, in a interests Delaware to own happen to secure But as Heitner’s failure in the State. his com named in of the defendants over seven relationship between necessary demonstrates, is no plaint there corporate fiduciary owning stock holding position as a perceived corporation.43 in the Delaware interests If other fiduciaries securing jurisdiction corporate its interest only actions, equity equitable procedure available Sequestration an supra. may n. procedure See be utilized in actions law. a similar but Ann., require stock. Del. Code directors to own Delaware does not 1976). (b) (Supp. Tit. §
to be as great Heitner expect we would suggests, have enacted a clearly statute more designed protect that interest.
Moreover, even if assessment of importance Heitner’s of Delaware’s interest his accepted, argument fails to *25 demonstrate that Delaware is a fair forum for litigation. this appellee interest has may support identified applica- tion of law Delaware to resolve any controversy appel- lants’ actions in capacities their officers directors.44 But rejected we have argument that if a law prop- can State’s erly be applied a dispute, to its courts necessarily juris- have diction over the parties to dispute. that acquire does not jurisdiction by being
“[The State] . . . the ‘center of gravity’ of the controversy, or the most convenient location for litigation. personаl The issue is jurisdiction, choice of It law. in resolved by case the acts considering of the [appellants].” Han Denckla, son v. 235, U. S. 254 (1958).45 Appellee suggests accepting positions as officers or directors of a Delaware performed corporation, appellants acts required Hanson He v. Denckla. notes that Delaware law substantial corporate benefits to officers provides and directors,46 and that these in part benefits were at least
44 general, incorporation govern In the law of State is held to corporation liabilities of officers or directors to the and its stockholders. (West See Restatement Corp. 309. But see Cal. Supp. Code 2115 § § 1977). general The rationale appears for the rule to be based more on the need for a govern uniform and certain standard to the internal affairs corporation perceived aof than on the interest incorpora State of Casualty 518, Mutual Co., tion. Cf. Koster Lumbermens 330 U. S. 527-528 Black, although dissenting Hanson, Mr. Justice agreed with majority question that “the whether applied the law of can a State to question transaction different a from the whether courts of that judgment S., enter State have to . . . .” at 258. 46See, 8, (1975 Ann., e. Del. Supp. Code Tit. ed. and §§ 1976). It positions. their appellants incentive for to assume appellants, “only just” require fair and to he says,
is, of Delaware benefits, respond return for these to they power. Brief misusing are accused their when Appellee reasoning this line argument, first
But like Heitn'er’s for Delaware law only appropriate establishes Greyhound and its govern оbligations appellants to have appellants It does not demonstrate that stockholders. of con- privilege “purposefully avail [ed themselves] Denckla, forum Hanson v. ducting State,” activities within the them bringing way justify would supra, simply had Appellants have a Delaware tribunal. before appel- Moreover, nothing do with the State Delaware. a Delaware be haled before expect no lants reason had not enacted has States,47 unlike some Delaware, court. *26 directorship as consent acceptance of a treats statute ... reason strains in And jurisdiction the State. “[i]t formed corporation in anyone buying securities a suggest that to Dela- subject himself 'impliedly consents’ to in Delaware Moyer, Folk & on cause action.” jurisdiction ware’s ... required not were Appellants, at 785. who n. supra, posi- their Greyhound in order to hold in acquire interests right their surrender by acquiring those interests tions, did not had they which with brought judgment States only to be “minimum contacts.” had Clause
The Due Process a binding may make state contemplate “does defendant corporate individual against an judgment... or relations.” contacts, ties, has no the state which with Washington, at 319. 326 U. S., Shoe Co. v. International appellants jurisdiction over assertion Delaware’s limitation that constitutional with inconsistent case (1976); Stat. N. Gen. Rev. 33-322 C. Stat. See, e. Conn. Gen. § Ann. (1975); Code C. §33-5-70 §65-33 power.
state The judgment of the Supreme Delaware Court must, therefore, be reversed.
It is so ordered. Rehnquist Mr. Justice took part no in the consideration or decision of this case.
Mr. Justice Powell, concurring.
I agree that
the principles of Internаtional Shoe
Co.
Washington,
I explicitly would reserve judgment, however, on whether the ownership of some forms of situs is in- whose disputably permanently located within may, a State without provide more, the contacts necessary to subject to jurisdiction defendant within the State to extent of the value the property. In the case of real property, preservation quasi particular, concept common-law rem arguably uncertainty would avoid the general significant International Shoe standard without “ play cost to Traditional notions of fair and substantial ” justice.’ Id., quoting Milliken Meyer, U. S. *27 457, I
Subject foregoing reservation, join opinion to the the of the Court.
Mr. Stevens, concurring judgment. Justice the protection affords against The Process Clause “judg- Due Washington, Shoe without notice.” International Co. ments of J.). (opinion Black, our Throughout U. S. quasi of in acceptable the exercise rem in rem history assur procedure giving has included a reasonable conveyed be particular claim will ance actual notice by registered notice publication, to defendant.* the Thus, essential personal has been an or extraterritorial service mail, a ingredient procеdure of that serves as substitute personal jurisdiction. service within the includes fair believe, I requirement of fair notice also, particular may-subject person a to warning that a activity or State, I foreign sovereign. If another visit knowingly I open it, or a bank account acquire real estate power some risk that assume the State will exercise with my My while contact my person there. risks. though minimal, gives predictable rise to State, pur- flow from Perhaps the consequences same should aof under laws corporation organized of stock of a chase limited extent one’s foreign nation, because to some of the nation subject and affairs then become the laws to corporation. domicile of international As a matter foreign acceptable be law, suggestion because might appropriate sufficiently investment to make unusual of his decision. require study the investor to ramifications an purchase But a securities in the domestic market entirely different matter. open can on the purchases
One who stock shares market thereby sub- hardly be he become expected to know that has ject suit in a forum remote from his residence unrelated practical matter, As the Delaware transaction. risk of unacceptable judg- sequestration statute creates an other Dela- States, ment without Unlike the 49 notice. as the incorporation situs of place ware treats the the custodian though even both the owner and stock, Delaware the defend- shares are elsewhere. Moreover, denies likely is most disрense personal with service substitute that *“To required ought to if reach the substantial defendant least Mabee, justice done.” McDonald v. 243 U. S. is to be *28 ant defend the merits opportunity unless suit he subjects himself to jurisdiction unlimited the court. Thus, it coerces a defendant to submit to personal either jurisdiction forum which not otherwise obtain such could jurisdiction or to lose the securities which have been attached. procedure If its were upheld, impose Delaware would, effect, duty inquiry every on purchaser of securities in the national market. For purchaser ascertains both unless the State of incorporation of the company shares he is whose buying, idiosyncrasies and also the may he be law, assuming an unknown risk I of litigation. agree therefore with the Court the record no adequate before basis us exists and that is un- Delaware statute constitutional on its face. opinion
How the Court’s may applied be in other contexts entirely not clear to Ime. Powell agree with Justice Mr. that it should quasi read to in rem jurisdic- invalidate tion where real estate is I involved. would not read it as also invalidating other long-accepted juris- methods of acquiring persons diction over with adequate par- of both notice controversy ticular fact that their local activities might subject them to suit. My uncertainty as to the reach my opinion, and fear that purports great decide a deal more than necessary dispose persuade of this me case, merely to concur in judgment.
Mr. Justice Brennan, concurring part and dissenting in part.
I join I-III opinion. Parts of the Court’s I fully agree analysis developed minimum-contacts in Interna Washington, tional Shoe Co. v. repre S. 310 (1945), sents far more sensible construct for the exercise of state- patchwork legal court than the and factual generated fictions has from been the decision in Pen noyer Neff, It precisely because *29 the inquiry overriding into minimum contacts is now of such I from importance, however, respectfully that must dissent Part IV opinion. of the Court’s
I today’s I-III of decision teaching The primary Parts person jurisdiction over seeking is to assert State, that a on may only do so the basis borders, outside located its transaction, among parties, the contested minimum contacts could Supreme Court Delaware and the forum State. sequestration however, that plainer, not made have- operate not does 10, § Tit. Ann., (1975), statute, Del. Code quasi strictly an embodiment basis, but instead this con- longer no jurisdictional predicate in rem jurisdiction, stitutionally viable: in rem quasi . . .
“[Jjurisdiction under 366 remains § not on capital here, stock presence founded on Grey forum.” with this defendants prior contact Heitner, 361 A. 2d Corp. hound under- obviously comports with ruling This state-court the existence the issue of standing of parties, made by appellee, pleaded minimum was never contacts courts. Delaware upon discovery, or ruled subject IV reaches in Part the Court notwithstanding, facts These lack- contacts such question and finds minimum-contacts having stated, once Succinctly applied appellants. ing as quasi in rem that decided properly persuasively in- having enacted admits Delaware statute minimum- to find that a proceeds then Court valid, enacted having denies expressly Delaware law that contacts case. constitutionally applied be could not also opinion advisory of an example purer view, my In having received deny do not True, appellants found. Ante, 213 n. 40. question. of the action notice actual However, notice is but one ingredient of a proper asser- tion of jurisdiction. state-court The other is a statute au- thorizing the exercise of the judicial State’s power along constitutionally permissible grounds henceforth means —which minimum contacts. As of today, 366§ is not such a law.1 Recognizing today’s decision fundamentally alters the relevant jurisdictional ground I rules, certainly would not want to rule out possibility might Delaware’s courts *30 decide that legislature’s overriding the purpose of securing personal the appearance in state courts of defendants would best be by served reinterpreting permit to state its statute jurisdiction on constitutionally the basis of con- permissible tacts rather than ownership. stock Were the courts state to take this step, necessary it would become address then to question the of whether minimum contacts here. But exist present the posture the case, of this Court’s decision important is purely ruling. issue an abstract My inappropriateness concern with the Court’s ac- the highlighted tion is First, two other considerations. an inquiry inevitably highly into minimum depend- contacts creating proper detailing ent on a factual foundation contacts between the forum controversy question. Because neither nor plaintiff-appellee such in- inquiry germane state courts viewed an as in this today to stance, upon proper the Court unable draw a reaching its dis- conclusion; factual record its moreover, opportunity position appellee denies the normal to dis- seek remembered, covery Second, on the issue. contacts must ruling necessarily the Court’s a constitutional one and proceed decision Indeed the Court’s to to minimum-contacts issue sequestration equivalent if treats Delaware’s statute as it were the long-arm law, specifically which to Rhode Island’s authorizes courts permitted Constitution, limit to the R. I. assume Gen. thereby (1970), necessitating judicial Laws Ann. consideration §9-5-33 every arising case under statute. the frontiers of minimum contacts jurisdictional laws of all will affect reach Ordinarily restraint in constitu- this would counsel States. A, TV pronouncements. Ashwander tional Certainly it (1936) (Brandéis, J., concurring). 345-348 to reaching out against have cautioned the Court should from the yet emerge has question that, here, decide a federal issue. ripened state courts for review II minimum-
Nonetheless, rules on because the Court my I While impelled express contacts feel view. question, through discovery might satisfy me derived evidence I am con- case, lacking given minimum contacts are in a has general vinced that as rule a forum state centering on adjudicate derivative action shareholder officers of policies of the directors conduct and I Court, Unlike by that corporation chartered State. juris- asserting from therefore would foreclose Delaware on the do so persuaded were it appellants diction over *31 of minimum contacts. basis presented lawsuit as settled that a derivative
It well named the benefit primarily inure here does not corpora are the beneficiaries primary plaintiff. j Rather of action “The cause shareholders. owners,'the tion and its own his court brings before the plaintiff which such a may rep often plaintiff a . . Such corporation’s. but . bring in interest and stockholder important public resent an Lumbermens Koster v. to book. ing managers faithless ” (1947). 524 518, 522, Casualty Co., Mutual S. unusually has an chartering State light, in Viewed availability convenient of a insuring in powerful interest multiplicity involving possible litigating claims forum for sub- vindicating for the State’s fiduciaries of defendant domestic management its regarding the policies stantive fairly our establish I cases believe that corporations.
223 the State’s valid substantive interests are important con- in siderations assessing whether it constitutionally may claim jurisdiction over given cause of action.
In this instance, Delaware
point
can
to at
least
three
interrelated public policies that are
furthered
its asser
jurisdiction.
tion of
First,
the State has a substantial
in
in
terest
providing restitution for its local corporations that
allegedly have been
victimized
fiduciary misconduct, even
if
managerial
decisions occurred outside the State. The
importance
general
of this
state
assuring
interest
restitu
tion
own
previously
expression
residents
found
cases
went outside the then-prevailing
process frame
due
work to authorize state-court
jurisdiction over nonresident
motorists
injure
who
others within the State. Hess v. Paw
loski, 274 U.
(1927);
S. 352
Cеntral
Olberding
see
Illinois
Co.,
R.
(1953).
recently,
U. S.
More
it has
led
to acquire jurisdiction
States
seek and
nonresident
domes
purely
produce
tortfeasors whose
out-of-state activities
consequences.
tic
&
Gray v.
Radiator
E.
American
2d
Sanitary Corp.,
2d
176 N.
Standard
Ill.
E.
(1961).
legitimately read their
Second, state courts have
centers
expansively when a cause of action
possesses
regula
an
which
forum
area
manifest
Co.,
tory
g., McGee
Ins.
interest. E.
v. International Life
(1957)
(insurance regulation);
Travelers
S. 220
U.
sky
(blue
Virginia,
(1950)
Health Assn. v.
To applica “may support interests It notes that State’s controversy appel resolve tion Delaware law to directors.” as officers and capacities in their lants’ actions choice argues, pertains Ante, this, But the Court at 215. jurisdictional recognize I jurisdiction. not law, Hanson identical. inquiries are and choice-of-law I com But would not Denckla, 235, 254 357 U. S. rigidly so quite area thinking partmentalize “are inquiries for both today, Court does seems me providing of each state interest held: Court “[T]he The Mullane grace and are adminis its laws trusts that exist to close means in cus is so insistent and rooted its courts supervision of tered under right beyond of its courts to determine doubt as to establish tom provided procedure nonresident, claimants, resident or interests of all S.,U. at 313. be heard.” 339 appear opportunity full accords
often closely related and to a
degree
substantial
depend
upon similar
Id.,
considerations.”
at 258 (Black, J., dis-
senting).
In either case
important
an
linchpin is the extent
of contacts between the controversy,
and the
parties,
forum State. While constitutional
limitations on the choice
by
of lаw are
no means settled,
g.,
e.
Home
see,
Ins. Co.
Dick,
Furthermore, practical believe argue considerations in favor of seeking bridge the distance between the jurisdictional choice-of-law and court inquiries. Even when a would apply general the law of a forum,3 different as a (cid:127) rule it will knowledgeable feel less and comfortable policies interpretation, fostering interested in less foreign of that than would courts jurisdiction, established e. provides applicable the State that law. See, Oil Gilbert, Co. (1947); Restate Gulf Traynor, Is 313, p. 347; § ment This Conflict Neces Really 37 Texas Rev. such sary?, (1959). Obviously, L. problems entirely choice-of-law cannot be avoided in a diverse system Nonetheless, legal such as our own. when a suitor us whether In this case the record does inform an conflict actual likely likely law and that of the to arise between Delaware alternative general rule, I proba assume that forum. Pursuant to Delaware law bly foreign in the court. Restatement would obtain § suit in a substantial interest lоdge a State with seeks *34 in we applied question, law transaction own seeing uncer- confusion, wisely could act to minimize conflicts, unless con- by jurisdiction, of tainty adopting a liberal view in the efficiency strongly point of fairness or siderations opposite direction. prefer my this judgment, not one where,
This case is Certainly noth jurisdiction adequately ence for answered. unfair me it would be ing persuades said that Court that subject in Delaware. fact appellants to suit or com they “set foot” the record reveal whether does not Delaware, of action” in mitted related to cause “act[s] [the] ante, can be based jurisdiction at 213, decisive, is not in the having foreseeable effects strictly on out-of-state acts Co., Ins. International g., forum McGee v. State. E. Life Corp., Sanitary & Standard supra; Gray American Radiator difficulty applying I have little supra; § Restatement 37. alleged whose breaches fiduciaries principle to nonresident on the effect damaging of substantial trust are said to have I cannot posture corporation.4 Further, financial resident a con minimum in a contacts understand how existence failure statu Delaware’s stitutional sense at all affected fiduciaries. controlling corporate express an interest in torily Delaware Ante, simply To demonstrates that at 214. me this identifying corporation as recognize, course, a a resident 4 1 many respects, legal fiction. In chartering upon a State is build chartering corporation has mean however, of a as if state the law acts diversity purposes, corporаtion is (c) (for a ing. E. S. C. 1332 § And, anything, propriety if incorporation). citizen of the incorporating State seems treating corporation as a resident of a shareholder derivative in the context particularly appropriate to me having a may direct inter suit, realistically perceive itself for the State assuring corporate laws, guaranteeing of its enforcement est in pro corporations, management and in solvency of its domestic and fair placed who their faith tecting shareholders from fraud those state-created institution.
did not elect to assert to the extent the Constitu- I tion would Nor controlling allow.5 would view as or even especially meaningful failure appel- Delaware’s to exact from Ante, lants their to be consent sued. Once we have rejected jurisdictional Pennoyer framework created in I Neff, see no reason to rest out- a fictional growth system of that such as the consent existence statute, expressed implied.6
I, analysis would therefore, approach the minimum-contacts differently than does the Court. me the fact Crucial to appellants7 voluntarily themselves with the associated *35 fact, quite plausible Legislature In it is that the felt Delaware never managers precisely the need to corporate assert direct sequestration because the statute has as a somewhat heretofore served achieving personal jurisdiction. See, awkward but effective basis for such g., Hughes e. Publications, Inc., Tool Co. v. 693, Fawcett 290 A. 2d (Del. 1972): “Sequestration frequently Ch. suits most resorted to in against corporate sought stockholders directors in which recoveries are corporation ground for benefit the on the claimed of of breaches fiduciary duty part on the of directors.” 6Admittedly, forum, when one a expectation consents to suit in his may enhanced that he be extent, haled into that State’s courts. To this agree may I bearing that accepting juris consent have on the fairness of degree personal expectation diction. But whatever is of is nec essary depend formality warrant should not on the of es tablishing Indeed, law. expectations carry consent if one’s are such weight, appellants then might fairly charged here be with the under standing protect that Delaware would decide to its substantial interests through courts, they certainly its own for past realized sequestration employed primarily law has been securing as a means of the appearance corporate supra. officials State’s courts. N. Even in the absence statute, however, of such a special the close and asso corporation ciation between state managers and its apprise should may latter that the State seek to offer a addressing convenient forum for fiduciary claims of breach of trust. 7 Whether the directors of the subsidiary out-of-state should amenable may to suit in Delaware questions. raise may additional It well require investigation further into such degree factors as the independ- protections and benefits “invoking Delaware, State of 253; International Denckla, S., at 357 U. laws,” its Hanson v. entering into a S., 319, by Washington, Shoe Co. v. cor domestic with one relationship long-term fragile and powers and thereby to assume porations. elected They wholly from that State's derived responsibilities undertake bene eligible for those to become regulations, rules and corporations’ to its makes available Delaware law fits that (interest- (1975) § 143 Tit. g.,E. Del. Code Ann., officials. Supp. 1976) (indemnifica (1975 ed. and free logns); § of judi issues possible countervailing tion). it is While might. clearly different efficiency the like favor a cial us;8 appear meager do not record before forum, they solely “minimum” con and, course, we are concerned with I tacts, not “best” contacts. thus do believe that appellants to insist that make available to unfair themselves competent might forum suit that Delaware create public directly important policies pertaining of its vindication appellants’ fiduciary associations with State. operations corporations, interrelationship the two ence in *36 managers parent subsidiary in conduct chal- actual under expectations subsidiary lenge, and the reasonable directors that the parent an behavior. State would take interest their Cf. United City Bank, 378, (1965). States First U. While Nat. S. illuminating matters, present appears record is not these that all largely respect alleged fiduciary appellants in concert with to the acted misconduct, suggesting jurisdiction might fairly that overall rest Delaware. elsewhere, course, And, preferable if forum exists accept constitutionally entitled to nonetheless remains free to arrange litigation jorum for the transfer of the under the non doctrine See, Rosner, Broderick (1935); conveniens. e. S. Gilbert, Oil Co. v. Gulf