Civil
Procedure Class Notes
On Thursday, we wound up Shoe. Shoe introduced our modern concept of
personal jurisdiction, which involves “minimum contacts” and “traditional
notions of substantive justice and fair play”.
Now
we’ll look at cases that develop and interpret the Shoe model.
To
review, what were International Shoe’s contacts?
-
“large volume of interstate business”
-
“systematic and continuous” contacts
-
“the right to resort to the courts”
-
relatedness – “the obligation arose out of
activities” – e.g. the automobile accident, where the contact is 100% related
to the claim stemming from that accident
One
thing we didn’t point out about Shoe last week: Justice Black dissented,
and said that in the area of taxation, states should be able to tax businesses
coming into their territory. Black
wasn’t as concerned about the jurisdiction implication on the facts of this
case. Black was concerned about
the language that the court used: “substantive justice” and “fair play” are not
in the Constitution or the Fifth or Fourteenth Amendments, yet these are going
to be the tests the Court will use going forward.
The
cases so far, in brief
-
Pennoyer asks: Is it there?
-
Shoe asks: Is it fair?
This
opinion came down in 1977. Shoe
was in 1945. We’re jumped forward in
time. That’s important because we’ll go back
and pick up cases that came up in the interim, but Stevie Y. will organize the
cases thematically rather than strictly chronologically.
We’ve
talked a lot about general jurisdiction: everybody, including corporations, can
be sued somewhere. For example,
if the company was incorporated in
Greyhound
was incorporated in
Why
was there any question about suing Greyhound in
Shareholder
Derivative Action
A
shareholder sues on behalf of the corporation. He sues the officers and directors for breach
of their fiduciary duty. You must also
have the corporation as one of the defendants.
So
it’s:
Shareholder (Heitner)
v.
Officers & Directors of
the Corporation (including Shaffer),
plus the Corporation itself
(Greyhound)
It
turns out that Heitner owned just one share.
Greyhound
is just a nominal defendant, but the real dispute is against the
officers and directors.
Why
would Heitner be willing to be the plaintiff in this lawsuit? I mean, he only has one share! There must be some incentive for him to be
the plaintiff here.
Lots
of these things settle, and the settlements often have a little something in
them for the named plaintiff.
Where
are all these people from? Greyhound is
headquartered in
So
the lawsuit is filed in the Delaware Court of Chancery. The question is not whether
Why
doesn’t Shoe answer this question?
To what does the holding of Shoe apply? Shoe seems to deal with in personam
jurisdiction rather than in rem jurisdiction.
The
present case is about in rem jurisdiction, therefore, on its face, Shoe
doesn’t seem to apply to Shaffer.
So
the
What
allows
In Pennoyer,
stuff that’s in the state is under the jurisdiction of the state.
What
about the note cases after Pennoyer?
How about Harris v. Balk?
We find that a debt is going to be located for in rem purposes
wherever the debtor travels! This is
what gives us the law for the present case.
The question is, “Where is intangible property located?” The
Pennoyer + Harris = if we
attach the property at the start of the lawsuit, and the property is located
within the jurisdiction of the forum, then the forum has in rem
jurisdiction.
The
state issues stop orders so the stock can’t be sold. So in the old way, the state is all set to
have jurisdiction in rem against the 28 dudes.
“Shoe
Rules Everything Around Me”
Now, the Court says that Shoe
rules everything. What happens to Harris
v. Balk? It’s explicitly
overruled! However, the basic
principles of Pennoyer are not overruled.
What’s
the rationale? Jurisdiction “over a
thing” is sort of a euphemism for jurisdiction “over the interests of a person
in a thing”. Everything is owned by
somebody, so whatever or wherever the property is, we’re really trying to get
power over the person through their stuff.
Is
the location of the stuff relevant anymore?
The test of Shoe is “minimum contacts” such that the suit does
not offend the notions of “fair play” and “substantial justice”. So the location of the stuff is relevant in
so far as it is a contact. In rem
gave property a special status; Shoe says that property is just
another contact, nothing special.
We’ll just add it into the mix.
A
hypothetical
Say
a relative in
Under
Pennoyer, would the
Under
Shoe and Shaffer, we consider the volume and connectedness of our
contacts with
The
Court says that it would be unusual for a state not to have jurisdiction
in a controversy over some land in a state, because that land is what it’s all
about and would constitute sufficient contacts.
After
Shaffer, we will still see courts talking about in rem and quasi
in rem. The law says that all
assertions of jurisdiction must be made according to Shoe. Shoe, in turn, encompasses in
personam, in rem, and quasi in rem.
Under
Shoe, you don’t need to attach property to satisfy Constitutional
jurisdictional principles. State law
might establish other requirements when you file a lawsuit over some
property. In practice, you really should attach the property.
Change the factual pattern: let’s say you get into
a car accident in
More on Shaffer
next time
For tomorrow, read McGee and
Hanson.