February 19, 2016

Shaffer v. Heitner - 433 U.S. 186, 97 S.Ct. 2569, 53 L.Ed.2d 683 - Supreme Court of the United States

FACTS: Heitner is a nonresident of DW and owns one share of Greyhound stock.  Greyhound's is incorporated under DW law vut its principal p[lace of business is in Pheonix.  Heitner claims the action of the defendants caused Greyhound to be held liable for a private anti-trust suit and a fine in a criminal contempt action.  With his complaint Heitner filed a motion for an order of sequestration of the DW property of the individual defendants (mostly the stock in Greyhound).  The defendants contend that the ex parte sequestration procedure did not accord them due process and that the property seized could not be attached in DW and that under the rule in Shoe they did not have sufficient contacts.

HISTORY: DW courts rejected appellant's jurisdictional challenge noting that the suit was brought quasi in rem which doesn't require contacts. 

ISSUE: Is the standard of fairness and substantial justice set forth in Shoe available to govern actions in rem?

HOLDING: Yes

RATIONALE:

- these are cases in which the property serves as the basis for  a state's jurisdiction even though it is unrelated to the cause of action

- however, the presence of property alone does not support a state's jurisdiction; allowing this would support an ancient form w/o modern justification

- all assertions of a state court jurisdiction must be evaluated according to the standards set forth in Shoe

- Heitner claims that there is additional contact w/ DW b/c the defendants are on the Board of Directors of a company incorporated in DW

- this action by the defendant's does not demonstrate they have "purposefully availed themselves of the privilege of conducting activities within the forum state

DISPOSITION: Judgement of DW Supreme Court is reversed.