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Shafferv.Heitner
433U.S.186(1977)
AnnotatethisCase
Opinion
Annotation
Syllabus | Case
U.S.SupremeCourt
Shafferv.Heitner,433U.S.186(1977)
Shafferv.Heitner
No.751812
ArguedFebruary22,1977
DecidedJune24,1977
433U.S.186
APPEALFROMTHESUPREMECOURTOFDELAWARE
https://supreme.justia.com/cases/federal/us/433/186/case.html
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Syllabus
Appellee,anonresidentofDelaware,filedashareholder'sderivativesuitinaDelaware
ChanceryCourt,namingasdefendantsacorporationanditssubsidiary,aswellas28
presentorformercorporateofficersordirectors,allegingthattheindividualdefendantshad
violatedtheirdutiestothecorporationbycausingitanditssubsidiarytoengageinactions
(whichoccurredinOregon)thatresultedincorporateliabilityforsubstantialdamagesina
privateantitrustsuitandalargefineinacriminalcontemptaction.Simultaneously,appellee,
pursuanttoDel.CodeAnn.,Tit.10,366(1975),filedamotionforsequestrationofthe
Delawarepropertyoftheindividualdefendants,allnonresidentsofDelaware,accompanied
byanaffidavitidentifyingthepropertytobesequesteredasstock,options,warrants,and
variouscorporaterightsofthedefendants.Asequestrationorderwasissuedpursuantto
whichsharesandoptionsbelongingto21defendants(appellants)were"seized"and"stop
transfer"orderswereplacedonthecorporatebooks.Appellantsenteredaspecial
appearancetoquashserviceofprocessandtovacatethesequestrationorder,contending
thattheexpartesequestrationproceduredidnotaccordthemdueprocessthatthe
propertyseizedwasnotcapableofattachmentinDelawareandthattheydidnothave
sufficientcontactswithDelawaretosustainjurisdictionofthatState'scourtsundertherule
ofInternationalShoeCo.v.Washington, 326U.S.310.Inthatcase,theCourt(afternoting
thatthehistoricalbasisofinpersonamjurisdictionwasacourt'spoweroverthedefendant's
person,makinghispresencewithinthecourt'sterritorialjurisdictionaprerequisitetoits
renditionofapersonallybindingjudgmentagainsthim,Pennoyerv.Neff, 95U.S.714)
heldthatthatpowerwasnolongerthecentralconcern,andthat
"dueprocessrequiresonlythat,inordertosubjectadefendanttoajudgmentinpersonam,
ifhebenotpresentwithintheterritoryoftheforum,hehavecertainminimumcontactswith
itsuchthatthemaintenanceofthesuitdoesnotoffend'traditionalnotionsoffairplayand
substantialjustice'"
(andthusthefocusshiftedtotherelationshipamongthedefendant,theforum,andthe
litigation,ratherthanthemutuallyexclusivesovereigntyoftheStatesonwhichtherulesof
Pennoyerhadrested).TheCourtofChancery,rejectingappellants'arguments,upheldthe
366procedureofcompellingthe
Page433U.S.187
personalappearanceofanonresidentdefendanttoansweranddefendasuitbrought
againsthiminacourtofequity,whichisaccomplishedbytheappointmentofasequestrator
toseizeandholdthepropertyofthenonresidentlocatedinDelawaresubjecttocourtorder,
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withreleaseofthepropertybeingmadeuponthedefendant'sentryofageneral
appearance.Thecourtheldthatthelimitationonthepurposeandlengthoftimeforwhich
sequesteredpropertyisheldcomportedwithdueprocess,andthatthestatutorysitusofthe
stock(underaprovisionmakingDelawarethesitusofownershipofthecapitalstockofall
corporationsexistingunderthelawsofthatState)providedasufficientbasisforthe
exerciseofquasiinremjurisdictionbyaDelawarecourt.TheDelawareSupremeCourt
affirmed,concludingthatInternationalShoeraisednoconstitutionalbarriertothe
sequestrationprocedurebecause
"jurisdictionunder366remains...quasiinremfoundedonthepresenceofcapitalstock
[inDelaware],notonpriorcontactbydefendantswiththisforum."
Held:
1.WhetherornotaStatecanassertjurisdictionoveranonresidentmustbeevaluated
accordingtotheminimumcontactsstandardofInternationalShoeCo.v.Washington,
supra.Pp.433U.S.207212.
(a)Inordertojustifyanexerciseofjurisdictioninrem,thebasisforjurisdictionmustbe
sufficienttojustifyexercising"jurisdictionovertheinterestsofpersonsinthething."The
presenceofpropertyinaStatemaybearupontheexistenceofjurisdictionbyproviding
contactsamongtheforumState,thedefendant,andthelitigation,asforexample,when
claimstothepropertyitselfarethesourceoftheunderlyingcontroversybetweenthe
plaintiffanddefendant,whereitwouldbeunusualfortheStatewherethepropertyislocated
nottohavejurisdiction.Pp.433U.S.207208.
(b)Butwhere,asintheinstantquasiinremaction,thepropertynowservingasthebasisfor
statecourtjurisdictioniscompletelyunrelatedtotheplaintiff'scauseofaction,thepresence
ofthepropertyalone,i.e.,absentothertiesamongthedefendant,theState,andthe
litigation,wouldnotsupporttheState'sjurisdiction.Pp.433U.S.208209.
(c)Thoughtheprimaryrationalefortreatingthepresenceofpropertyaloneasabasisfor
jurisdictionistopreventawrongdoerfromavoidingpaymentofhisobligationsbyremovalof
hisassetstoaplacewhereheisnotsubjecttoaninpersonamsuit,thatisaninsufficient
justificationforrecognizingjurisdictionwithoutregardtowhetherthepropertyisintheState
forthatpurpose.Moreover,theavailabilityofattachmentproceduresandtheprotectionof
theFullFaithandCreditClausealsomilitateagainstthatrationale.Pp.433U.S.209210.
Page433U.S.188
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(d)ThefairnessstandardofInternationalShoecanbeeasilyappliedinthevastmajorityof
cases.P.433U.S.211.
(e)ThoughjurisdictionbasedsolelyonthepresenceofpropertyinaStatehashadalong
history,"traditionalnotionsoffairplayandsubstantialjustice"canbeasreadilyoffendedby
theperpetuationofancientformsthatarenolongerjustifiedasbytheadoptionofnew
proceduresthatdonotcomportwiththebasicvaluesofourconstitutionalheritage.Cf.
Sniadachv.FamilyFinanceCorp, 395U.S.337,395U.S.340Wolfv.Colorado, 338U.
S.25,338U.S.27.Pp.433U.S.211212.
2.Delaware'sassertionofjurisdictionoverappellants,basedsolelyasitisonthestatutory
presenceofappellants'propertyinDelaware,violatestheDueProcessClause,which
"doesnotcontemplatethatastatemaymakebindingajudgment...againstanindividual
orcorporatedefendantwithwhichthestatehasnocontacts,ties,orrelations."
InternationalShoe,supraat433U.S.319.Pp.433U.S.213217.
(a)Appellants'holdingsinthecorporation,whicharenotthesubjectmatterofthislitigation
andareunrelatedtotheunderlyingcauseofaction,donotprovidecontactswithDelaware
sufficienttosupportjurisdictionofthatState'scourtsoverappellants.P.433U.S.213.
(b)NorisDelawarestatecourtjurisdictionsupportedbythatState'sinterestinsupervising
themanagementofaDelawarecorporationanddefiningtheobligationsofitsofficersand
directors,sinceDelawarebasesjurisdictionnotonappellants'statusascorporate
fiduciaries,butonthepresenceoftheirpropertyintheState.Moreover,sequestrationhas
beenavailableinanysuitagainstanonresident,whetheragainstcorporatefiduciariesor
not.Pp.433U.S.213215.
(c)ThoughitmaybeappropriateforDelawarelawtogoverntheobligationsofappellantsto
thecorporationandstockholders,thisdoesnotmeanthatappellantshave"purposefully
avail[edthemselves]oftheprivilegeofconductingactivitieswithintheforumState,"Hanson
v.Denckla, 357U.S.235,357U.S.253.Appellants,whowerenotrequiredtoacquire
interestsinthecorporationinordertoholdtheirpositions,didnot,byacquiringthose
interests,surrendertheirrighttobebroughttojudgmentintheStatesinwhichtheyhad
"minimumcontacts."Pp.433U.S.215216.
361A.2d225,reversed.
MARSHALL,J.,deliveredtheopinionoftheCourt,inwhichBURGER,C.J.,andSTEWART,
WHITE,BLACKMUN,andPOWELL,JJ.,joined,andinPartsIIIIofwhichBRENNAN,J.,
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joined.POWELL,J.,filedaconcurringopinion,post,p.433U.S.217.STEVENS,J.,filed
anopinionconcurringinthe
Page433U.S.189
judgment,post,p.433U.S.217.BRENNAN,J.,filedanopinionconcurringinpartand
dissentinginpart,post,p.433U.S.219.REHNQUIST,J.,tooknopartintheconsideration
ordecisionofthecase.
MR.JUSTICEMARSHALLdeliveredtheopinionoftheCourt.
ThecontroversyinthiscaseconcernstheconstitutionalityofaDelawarestatutethatallows
acourtofthatStatetotakejurisdictionofalawsuitbysequesteringanypropertyofthe
defendantthathappenstobelocatedinDelaware.Appellantscontendthatthe
sequestrationstatuteasappliedinthiscaseviolatestheDueProcessClauseofthe
FourteenthAmendmentbothbecauseitpermitsthestatecourtstoexercisejurisdiction
despitetheabsenceofsufficientcontactsamongthedefendants,thelitigation,andthe
StateofDelawareandbecauseitauthorizesthedeprivationofdefendants'propertywithout
providingadequateproceduralsafeguards.Wefinditnecessarytoconsideronlythefirstof
thesecontentions.
I
AppelleeHeitner,anonresidentofDelaware,istheownerofoneshareofstockinthe
GreyhoundCorp.,abusinessincorporatedunderthelawsofDelawarewithitsprincipal
placeofbusinessinPhoenix,Ariz.OnMay22,1974,hefiledashareholder'sderivativesuit
intheCourtofChanceryforNewCastleCounty,Del.,inwhichhenamedasdefendants
Greyhound,itswhollyownedsubsidiaryGreyhoundLines,Inc.,[Footnote1]and28present
orformerofficersordirectorsofoneor
Page433U.S.190
bothofthecorporations.Inessence,Heitnerallegedthattheindividualdefendantshad
violatedtheirdutiestoGreyhoundbycausingitanditssubsidiarytoengageinactionsthat
resultedinthecorporation'sbeingheldliableforsubstantialdamagesinaprivateantitrust
suit[Footnote2]andalargefineinacriminalcontemptaction.[Footnote3]Theactivities
whichledtothesepenaltiestookplaceinOregon.
Simultaneouslywithhiscomplaint,Heitnerfiledamotionforanorderofsequestrationofthe
DelawarepropertyoftheindividualdefendantspursuanttoDel.CodeAnn.,Tit.10,366
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(1975).[Footnote4]Thismotionwasaccompaniedbyasupporting
Page433U.S.191
affidavitofcounselwhichstatedthattheindividualdefendantswerenonresidentsof
Delaware.Theaffidavitidentifiedthepropertytobesequesteredas
"commonstock,3%SecondCumulativePreferencedStockandstockunitcreditsofthe
DefendantGreyhoundCorporation,aDelawarecorporation,aswellasalloptionsandall
warrantstopurchasesaidstockissuedtosaidindividualDefendantsandallcontractural
[sic]obligations,allrights,debtsorcreditsdueoraccruedtoorforthebenefitofanyofthe
saidDefendantsunderanytypeofwrittenagreement,contractorotherlegalinstrumentof
anykindwhateverbetweenanyoftheindividualDefendantsandsaidcorporation."
Therequestedsequestrationorderwassignedthedaythemotionwasfiled.[Footnote5]
Pursuanttothatorder,thesequestrator[Footnote6]
Page433U.S.192
"seized"approximately82,000sharesofGreyhoundcommonstockbelongingto19ofthe
defendants,[Footnote7]andoptionsbelongingtoanother2defendants.[Footnote8]These
seizureswereaccomplishedbyplacing"stoptransfer"ordersortheirequivalentsonthe
booksoftheGreyhoundCorp.Sofarastherecordshows,noneofthecertificates
representingtheseizedpropertywasphysicallypresentinDelaware.Thestockwas
consideredtobeinDelaware,andsosubjecttoseizure,byvirtueofDel.CodeAnn.,Tit.8,
169(1975),whichmakesDelawarethesitusofownershipofallstockinDelaware
corporations.[Footnote9]
All28defendantswerenotifiedoftheinitiationofthesuitbycertifiedmaildirectedtotheir
lastknownaddressesandbypublicationinaNewCastleCountynewspaper.The21
defendantswhosepropertywasseized(hereafterreferredtoasappellants)respondedby
enteringaspecialappearancefor
Page433U.S.193
thepurposeofmovingtoquashserviceofprocessandtovacatethesequestrationorder.
Theycontendedthattheexpartesequestrationproceduredidnotaccordthemdueprocess
oflaw,andthatthepropertyseizedwasnotcapableofattachmentinDelaware.Inaddition,
appellantsassertedthat,undertheruleofInternationalShoeCo.v.Washington, 326U.S.
310(1945),theydidnothavesufficientcontactswithDelawaretosustainthejurisdictionof
thatState'scourts.
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TheCourtofChanceryrejectedtheseargumentsinaletteropinionwhichemphasizedthe
purposeoftheDelawaresequestrationprocedure:
"Theprimarypurposeof'sequestration'asauthorizedby10Del.C.366isnottosecure
possessionofpropertypendingatrialbetweenresidentdebtorsandcreditorsontheissue
ofwhohastherighttoretainit.Onthecontrary,ashereemployed,'sequestration'isa
processusedtocompelthepersonalappearanceofanonresidentdefendanttoanswerand
defendasuitbroughtagainsthiminacourtofequity.Sandsv.LefcourtRealtyCorp.,
Del.Super.,117A.2d365(1955).Itisaccomplishedbytheappointmentofasequestratorby
thisCourttoseizeandholdpropertyofthenonresidentlocatedinthisStatesubjectto
furtherCourtorder.Ifthedefendantentersageneralappearance,thesequesteredproperty
isroutinelyreleased,unlesstheplaintiffmakesspecialapplicationtocontinueitsseizure,in
whicheventtheplaintiffhastheburdenofproofandpersuasion."
App.7576.Thislimitationonthepurposeandlengthoftimeforwhichsequesteredproperty
isheld,thecourtconcluded,renderedinapplicablethedueprocessrequirements
enunciatedinSniadachv.FamilyFinanceCorp., 395U.S.337(1969)Fuentesv.Shevin,
407U.S.67(1972)andMitchellv.W.T.GrantCo., 416U.S.600(1974).App.7576,80,
8385.Thecourtalsofoundnostatelaworfederalconstitutionalbarriertothe
sequestrator'srelianceonDel.CodeAnn.,Tit.8,169
Page433U.S.194
(1975).App.7679.Finally,thecourtheldthatthestatutoryDelawaresitusofthestock
providedasufficientbasisfortheexerciseofquasiinremjurisdictionbyaDelawarecourt.
Id.at8587.
Onappeal,theDelawareSupremeCourtaffirmedthejudgmentoftheCourtofChancery.
GreyhoundCorp.v.Heitner,361A.2d225(1976).MostoftheSupremeCourt'sopinionwas
devotedtorejectingappellants'contentionthatthesequestrationprocedureisinconsistent
withthedueprocessanalysisdevelopedintheSniadachlineofcases.Thecourtbasedits
rejectionofthatargumentinpartonitsagreementwiththeCourtofChancerythatthe
purposeofthesequestrationprocedureistocompeltheappearanceofthedefendant,a
purposenotinvolvedintheSniadachcases.Thecourtalsoreliedonwhatitconsideredthe
ancientoriginsofthesequestrationprocedureandapprovalofthatprocedureinthe
opinionsofthisCourt,[Footnote10]Delaware'sinterestinassertingjurisdictionto
adjudicateclaimsofmismanagementofaDelawarecorporation,andthesafeguardsfor
defendantsthatitfoundintheDelawarestatute.361A.2dat230236.
Page433U.S.195
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Appellants'claimthattheDelawarecourtsdidnothavejurisdictiontoadjudicatethisaction
receivedmuchmorecursorytreatment.Thecourt'sanalysisofthejurisdictionalissueis
containedintwoparagraphs:
"Therearesignificantconstitutionalquestionsatissuehere,butwesayatoncethatwedo
notdeemtheruleofInternationalShoetobeoneofthem....Thereason,ofcourse,isthat
jurisdictionunder366remains...quasiinremfoundedonthepresenceofcapitalstock
here,notonpriorcontactbydefendantswiththisforum.Under8Del.C.169the'situsof
theownershipofthecapitalstockofallcorporationsexistingunderthelawsofthisState...
[is]inthisState,'andthatprovidestheinitialbasisforjurisdiction.Delawaremay
constitutionallyestablishsitusofsuchshareshere,...ithasdonesoandthepresence
thereofprovidesthefoundationfor366inthiscase....Onthisissue,weagreewiththe
analysismadeandtheconclusionreachedbyJudgeStapletoninU.S.Industries,Inc.v.
Gregg,D.Del.,348F.Supp.1004(1972).[Footnote11]"
"WeholdthatseizureoftheGreyhoundsharesisnotinvalidbecauseplaintiffhasfailedto
meetthepriorcontactstestsofInternationalShoe."
Id.at22.
Wenotedprobablejurisdiction.429U.S.813.[Footnote12]Wereverse.
Page433U.S.196
II
TheDelawarecourtsrejectedappellants'jurisdictionalchallengebynotingthatthissuitwas
broughtasaquasiinremproceeding.Sincequasiinremjurisdictionistraditionallybased
onattachmentorseizureofpropertypresentinthejurisdiction,notoncontactsbetweenthe
defendantandtheState,thecourtsconsideredappellants'claimedlackofcontactswith
Delawaretobeunimportant.Thiscategoricalanalysisassumesthecontinuedsoundnessof
theconceptualstructurefoundedonthecenturyoldcaseofPennoyerv.Neff, 95U.S.714
(1878).
Pennoyerwasanejectmentactionbroughtinfederalcourtunderthediversityjurisdiction.
Pennoyer,thedefendantinthataction,heldthelandunderadeedpurchasedinasheriff's
saleconductedtorealizeonajudgmentforattorney'sfeesobtainedagainstNeffina
previousactionbyoneMitchell.AtthetimeofMitchell'ssuitinanOregonStatecourt,Neff
wasanonresidentofOregon.AnOregonstatuteallowedservicebypublicationon
nonresidentswhohadpropertyintheState,[Footnote13]andMitchellhadusedthat
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proceduretobringNeff
Page433U.S.197
beforethecourt.TheUnitedStatesCircuitCourtfortheDistrictofOregon,inwhichNeff
broughthisejectmentaction,refusedtorecognizethevalidityofthejudgmentagainstNeff
inMitchell'ssuit,andaccordinglyawardedthelandtoNeff.[Footnote14]ThisCourt
affirmed.
Mr.JusticeField'sopinionfortheCourtfocusedontheterritoriallimitsoftheStates'judicial
powers.AlthoughrecognizingthattheStatesarenottrulyindependentsovereigns,Mr.
JusticeFieldfoundthattheirjurisdictionwasdefinedbythe"principlesofpubliclaw"that
regulatetherelationshipsamongindependentnations.Thefirstofthoseprincipleswas"that
everyStatepossessesexclusivejurisdictionandsovereigntyoverpersonsandproperty
withinitsterritory."Thesecondwas"thatnoStatecanexercisedirectjurisdictionand
authorityoverpersonsorpropertywithoutitsterritory."Id.at95U.S.722.Thus,"invirtueof
theState'sjurisdictionoverthepropertyofthenonresidentsituatedwithinitslimits,"the
statecourts"caninquireintothatnonresident'sobligationstoitsowncitizens...tothe
extentnecessarytocontrolthedispositionoftheproperty."Id.at95U.S.723.TheCourt
recognizedthat,iftheconclusionsofthatinquirywereadversetothenonresidentproperty
owner,hisinterestinthepropertywouldbeaffected.Ibid.Similarly,ifthedefendant
consentedtothejurisdictionofthestatecourtsorwaspersonallyservedwithintheState,a
judgmentcouldaffecthisinterestinpropertyoutsidetheState.Butanyattempt"directly"to
assertextraterritorialjurisdictionoverpersonsorpropertywouldoffendsisterStatesand
exceedtheinherentlimitsoftheState'spower.Ajudgmentresultingfromsuchanattempt,
Mr.JusticeFieldconcluded,wasnotonlyunenforceable
Page433U.S.198
inotherStates,[Footnote15]butwasalsovoidintherenderingStatebecauseithadbeen
obtainedinviolationoftheDueProcessClauseoftheFourteenthAmendment.Id.at95U.
S.732733.Seealsoe.g.,Freemanv.Alderson, 119U.S.185,119U.S.187188(1886).
ThisanalysisledtotheconclusionthatMitchell'sjudgmentagainstNeffcouldnotbevalidly
basedontheState'spoweroverpersonswithinitsborders,becauseNeffhadnotbeen
personallyservedinOregon,norhadheconsensuallyappearedbeforetheOregoncourt.
TheCourtreasonedthat,evenifNeffhadreceivedpersonalnoticeoftheaction,serviceof
processoutsidetheStatewouldhavebeenineffectual,sincetheState'spowerwaslimited
byitsterritorialboundaries.Moreover,theCourtheld,theactioncouldnotbesustainedon
thebasisoftheState'spoweroverpropertywithinitsbordersbecausethatpropertyhadnot
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beenbroughtbeforethecourtbyattachmentoranyotherprocedurepriortojudgment.
[Footnote16]Sincethejudgmentwhichauthorizedthesheriff'ssalewasthereforeinvalid,
thesaletransferrednotitle.Neffregainedhisland.
Fromourperspective,theimportanceofPennoyerisnotitsresult,butthefactthatits
principlesandcorollariesderivedfromthembecamethebasicelementsoftheconstitutional
Page433U.S.199
doctrinegoverningstatecourtjurisdiction.See,e.g.,Hazard,AGeneralTheoryofState
CourtJurisdiction,1965Sup.Ct.Rev.241(hereafterHazard).Aswehavenoted,under
Pennoyer,stateauthoritytoadjudicatewasbasedonthejurisdiction'spowerovereither
personsorproperty.Thisfundamentalconceptisembodiedintheveryvocabularywhichwe
usetodescribejudgments.Ifacourt'sjurisdictionisbasedonitsauthorityoverthe
defendant'sperson,theactionandjudgmentaredenominated"inpersonam,"andcan
imposeapersonalobligationonthedefendantinfavoroftheplaintiff.Ifjurisdictionisbased
onthecourt'spoweroverpropertywithinitsterritory,theactioniscalled"inrem"or"quasiin
rem."Theeffectofajudgmentinsuchacaseislimitedtothepropertythatsupports
jurisdiction,anddoesnotimposeapersonalliabilityonthepropertyowner,sinceheisnot
beforethecourt.[Footnote17]InPennoyer'sterms,theownerisaffectedonly"indirectly"by
aninremjudgmentadversetohisinterestinthepropertysubjecttothecourt'sdisposition.
Byconcludingthat"[t]heauthorityofeverytribunalisnecessarilyrestrictedbytheterritorial
limitsoftheStateinwhichitisestablished,"95U.S.at95U.S.720,Pennoyersharply
limitedtheavailabilityofinpersonamjurisdictionoverdefendantsnotresidentintheforum
State.IfanonresidentdefendantcouldnotbefoundinaState,hecouldnotbesuedthere.
Ontheotherhand,sincetheStateinwhichproperty
Page433U.S.200
waslocatedwasconsideredtohaveexclusivesovereigntyoverthatproperty,inremactions
couldproceedregardlessoftheowner'slocation.Indeed,sinceaState'sprocesscouldnot
reachbeyonditsborders,thisCourtheldafterPennoyerthatdueprocessdidnotrequire
anyefforttogiveapropertyownerpersonalnoticethathispropertywasinvolvedinanin
remproceeding.See,e.g.,Ballardv.Hunter, 204U.S.241(1907)Arndtv.Griggs, 134U.
S.316(1890)Hulingv.KawValleyR.Co., 130U.S.559(1889).ThePennoyerrules
generallyfavorednonresidentdefendantsbymakingthemhardertosue.Thisadvantage
wasreduced,however,bytheabilityofaresidentplaintifftosatisfyaclaimagainsta
nonresidentdefendantbybringingintocourtanypropertyofthedefendantlocatedinthe
plaintiff'sState.See,e.g.,Zammit,QuasiInRemJurisdiction:Outmodedand
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Unconstitutional?,49St.John'sL.Rev.668,670(1975).Forexample,inthewellknown
caseofHarrisv.Balk, 198U.S.215(1905),Epstein,aresidentofMaryland,hadaclaim
againstBalk,aresidentofNorthCarolina.Harris,anotherNorthCarolinaresident,owed
moneytoBalk.WhenHarrishappenedtovisitMaryland,EpsteingarnishedhisdebttoBalk.
HarrisdidnotcontestthedebttoBalk,andpaidittoEpstein'sNorthCarolinaattorney.
WhenBalklatersuedHarrisinNorthCarolina,thisCourtheldthattheFullFaithandCredit
Clause,U.S.Const.,Art.IV,1,requiredthatHarris'paymenttoEpsteinbetreatedasa
dischargeofhisdebttoBalk.ThisCourtreasonedthatthedebtHarrisowedBalkwasan
intangibleformofpropertybelongingtoBalk,andthatthelocationofthatpropertytraveled
withthedebtor.ByobtainingpersonaljurisdictionoverHarris,Epsteinhad"arrested"his
debttoBalk,198U.S.at198U.S.223,andbroughtitintotheMarylandCourt.Underthe
structureestablishedbyPennoyer,Epsteinwasthenentitledtoproceedagainstthatdebtto
vindicatehisclaimagainstBalk,eventhoughBalkhimselfwasnotsubjecttothejurisdiction
Page433U.S.201
ofaMarylandtribunal.[Footnote18]Seealsoe.g.,Louisville&N.R.Co.v.Deer, 200U.S.
176(1906)Steelev.G.D.Searle&Co.,483F.2d339(CA51973),cert.denied,415U.S.
958(1974).
Pennoyeritselfrecognizedthatitsrigidcategories,evenasblurredbythekindofaction
typifiedbyHarris,couldnotaccommodatesomenecessarylitigation.Accordingly,Mr.
JusticeField'sopinioncarefullynotedthatcasesinvolvingthepersonalstatusoftheplaintiff,
suchasdivorceactions,couldbeadjudicatedintheplaintiff'shomeStateeventhoughthe
defendantcouldnotbeservedwithinthatState.95U.S.at95U.S.733735.Similarly,the
opinionapprovedthepracticeofconsideringaforeigncorporationdoingbusinessinaState
tohaveconsentedtobeingsuedinthatState.Id.at95U.S.735736SeeLafayetteIns.
Co.v.French,18How.404(1856).This
Page433U.S.202
basisforinpersonamjurisdictionoverforeigncorporationswaslatersupplementedbythe
doctrinethatacorporationdoingbusinessinaStatecouldbedeemed"present"inthe
State,andsosubjecttoserviceofprocessundertheruleofPennoyer.See,e.g.,
InternationalHarvesterCo.v.Kentucky, 234U.S.579(1914)Philadelphia&ReadingR.
Co.v.McKibbin, 243U.S.264(1917).SeegenerallyNote,DevelopmentsintheLaw,
StateCourtJurisdiction,73Harv.L.Rev.909,919923(1960)(hereafterDevelopments).
Theadventofautomobiles,withtheconcomitantincreaseintheincidenceofindividuals
causinginjuryinStateswheretheywerenotsubjecttoinpersonamactionsunder
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Pennoyer,requiredfurthermoderationoftheterritoriallimitsonjurisdictionalpower.This
modification,liketheaccommodationtotherealitiesofinterstatecorporateactivities,was
accomplishedbyuseofalegalfictionthatlefttheconceptualstructureestablishedin
Pennoyertheoreticallyunaltered.Cf.Olberdingv.IllinoisCentralR.Co., 346U.S.338,346
U.S.340341(1953).Thefictionusedwasthattheoutofstatemotorist,whoitwas
assumedcouldbeexcludedaltogetherfromtheState'shighways,had,byusingthose
highways,appointedadesignatedstateofficialashisagenttoacceptprocess.SeeHessv.
Pawloski, 274U.S.352(1927).Sincethemotorist's"agent"couldbepersonallyserved
withintheState,thestatecourtscouldobtaininpersonamjurisdictionoverthenonresident
driver.
Themotorists'consenttheorywaseasytoadminister,sinceitrequiredonlyafindingthat
theoutofstatedriverhadusedtheState'sroads.Bycontrast,boththefictionsofimplied
consenttoserviceonthepartofaforeigncorporationandofcorporatepresencerequireda
findingthatthecorporationwas"doingbusiness"intheforumState.Definingthecriteriafor
makingthatfindinganddecidingwhethertheyweremetabsorbedmuchjudicialenergy.
See,e.g.,InternationalShoe
Page433U.S.203
Co.v.Washington,326U.S.at326U.S.317319.Whiletheessentiallyquantitativetests
whichemergedfromthesecasespurportedsimplytoidentifycircumstancesunderwhich
presenceorconsentcouldbeattributedtothecorporation,itbecameclearthattheywere,
infact,attemptingtoascertain"whatdealingsmakeitjusttosubjectaforeigncorporationto
localsuit."Hutchinsonv.Chase&Gilbert,45F.2d139,141(CA21930)(L.Hand,J.).In
InternationalShoe,weacknowledgedthatfact.
ThequestioninInternationalShoewaswhetherthecorporationwassubjecttothejudicial
andtaxingjurisdictionofWashington.Mr.ChiefJusticeStone'sopinionfortheCourtbegan
itsanalysisofthatquestionbynotingthatthehistoricalbasisofinpersonamjurisdictionwas
acourt'spoweroverthedefendant'sperson.Thatpower,however,wasnolongerthe
centralconcern:
"Butnowthatthecapiasadrespondendumhasgivenwaytopersonalserviceofsummons
orotherformofnotice,dueprocessrequiresonlythatinordertosubjectadefendanttoa
judgmentinpersonam,ifhebenotpresentwithintheterritoryoftheforum,hehavecertain
minimumcontactswithitsuchthatthemaintenanceofthesuitdoesnotoffend'traditional
notionsoffairplayandsubstantialjustice.'Millikenv.Meyer, 311U.S.457,311U.S.463."
326U.S.at326U.S.316.Thus,theinquiryintotheState'sjurisdictionoveraforeign
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corporationappropriatelyfocusednotonwhetherthecorporationwas"present,"buton
whethertherehavebeen
"suchcontactsofthecorporationwiththestateoftheforumasmakeitreasonable,inthe
contextofourfederalsystemofgovernment,torequirethecorporationtodefendthe
particularsuitwhichisbroughtthere."
Id.at326U.S.317.
Page433U.S.204
Mechanicalorquantitativeevaluationsofthedefendant'sactivitiesintheforumcouldnot
resolvethequestionofreasonableness:
"Whetherdueprocessissatisfiedmustdependratheruponthequalityandnatureofthe
activityinrelationtothefairandorderlyadministrationofthelawswhichitwasthepurpose
ofthedueprocessclausetoinsure.Thatclausedoesnotcontemplatethatastatemay
makebindingajudgmentinpersonamagainstanindividualorcorporatedefendantwith
whichthestatehasnocontacts,ties,orrelations."
Id.at326U.S.319.[Footnote19]Thus,therelationshipamongthedefendant,theforum,
andthelitigation,ratherthanthemutuallyexclusivesovereigntyoftheStatesonwhichthe
rulesofPennoyerrest,becamethecentralconcernoftheinquiryintopersonaljurisdiction.
[Footnote20]TheimmediateeffectofthisdeparturefromPennoyer'sconceptualapparatus
wastoincreasetheabilityofthestatecourtstoobtainpersonaljurisdictionovernonresident
defendants.See,e.g.,Green,JurisdictionalReforminCalifornia,
Page433U.S.205
21HastingsL.J.1219,12311233(1970)Currie,TheGrowthoftheLongArm:EightYears
ofExtendedJurisdictioninIllinois,1963U.Ill.L.F.533Developments10001008.
Noequallydramaticchangehasoccurredinthelawgoverningjurisdictioninrem.There
have,however,beenintimationsthatthecollapseoftheinpersonamwingofPennoyerhas
notleftthatdecisionunweakenedasafoundationforinremjurisdiction.Wellreasoned
lowercourtopinionshavequestionedthepropositionthatthepresenceofpropertyina
StategivesthatStatejurisdictiontoadjudicaterightstothepropertyregardlessofthe
relationshipoftheunderlyingdisputeandthepropertyownertotheforum.See,e.g.,U.S.
Industries,Inc.v.Gregg,540F.2d142(CA31976),cert.pending,No.76359Jonnetv.
DollarSavingsBank,530F.2d1123,11301143(CA31976)(Gibbons,J.,concurring)
Camirev.Scieszka,116N.H.281,358A.2d397(1976)Bekinsv.Huish,1Ariz.App.258,
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401P.2d743(1965)Atkinsonv.SuperiorCourt,49Cal.2d338,316P.2d960(1957),
appealdismissedandcert.deniedsubnom.ColumbiaBroadcastingSystemv.Atkinson,
357U.S.569(1958).Theoverwhelmingmajorityofcommentatorshavealsorejected
Pennoyer'spremisethataproceeding"against"propertyisnotaproceedingagainstthe
ownersofthatproperty.Accordingly,theyurgethatthe"traditionalnotionsoffairplayand
substantialjustice"thatgovernaState'spowertoadjudicateinpersonamshouldalso
governitspowertoadjudicatepersonalrightstopropertylocatedintheState.See,e.g.,
VonMehren&Trautman,JurisdictiontoAdjudicate:ASuggestedAnalysis,79Harv.L.Rev.
1121(1966)(hereafterVonMehren&Trautman)Traynor,IsThisConflictReally
Necessary?,37TexasL.Rev.657(1959)(hereafterTraynor)Ehrenzweig,TheTransient
RuleofPersonalJurisdiction:The"Power"MythandForumConveniens,65YaleL.J.289
(1956)DevelopmentsHazard.
Page433U.S.206
AlthoughthisCourthasnotaddressedthisargumentdirectly,wehaveheldthatproperty
cannotbesubjectedtoacourt'sjudgmentunlessreasonableandappropriateeffortshave
beenmadetogivethepropertyownersactualnoticeoftheaction.Schroederv.CityofNew
York, 371U.S.208(1962)Walkerv.CityofHutchinson, 352U.S.112(1956)Mullanev.
CentralHanoverBank&TrustCo., 339U.S.306(1950).Thisconclusionrecognizes,
contrarytoPennoyer,thatanadversejudgmentinremdirectlyaffectsthepropertyownerby
divestinghimofhisrightsinthepropertybeforethecourt.Schroederv.CityofNewYork,
supraat371U.S.213cf.ContinentalGrainCo.v.BargeFBL585, 364U.S.19(1960)
(separateactionsagainstbargeandbargeownerareone"civilaction"forpurposeof
transferunder28U.S.C.1404(a)).Moreover,inMullane,weheldthatFourteenth
Amendmentrightscannotdependontheclassificationofanactionasinremorin
personam,sincethatis
"aclassificationforwhichthestandardsaresoelusiveandconfusedgenerally,andwhich,
beingprimarilyforstatecourtstodefine,mayanddovaryfromstatetostate."
339U.S.at339U.S.312.
Itisclear,therefore,thatthelawofstatecourtjurisdictionnolongerstandssecurelyonthe
foundationestablishedinPennoyer.[Footnote21]Wethinkthatthetimeisripetoconsider
whetherthestandardoffairnessandsubstantialjusticesetforthinInternationalShoe
shouldbeheldtogovernactionsinremaswellasinpersonam.
Page433U.S.207
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III
Thecaseforapplyingtojurisdictioninremthesametestof"fairplayandsubstantialjustice"
asgovernsassertionsofjurisdictioninpersonamissimpleandstraightforward.Itis
premisedonrecognitionthat"[t]hephrase,judicialjurisdictionoverathing,'isacustomary
ellipticalwayofreferringtojurisdictionovertheinterestsofpersonsinathing."Restatement
(Second)ofConflictofLaws56,IntroductoryNote(1971)(hereafterRestatement).
[Footnote22]Thisrecognitionleadstotheconclusionthat,inordertojustifyanexerciseof
jurisdictioninrem,thebasisforjurisdictionmustbesufficienttojustifyexercising
"jurisdictionovertheinterestsofpersonsinathing."[Footnote23]Thestandardfor
determiningwhetheranexerciseofjurisdictionovertheinterestsofpersonsisconsistent
withtheDueProcessClauseistheminimumcontactsstandardelucidatedinInternational
Shoe.
Thisargument,ofcourse,doesnotignorethefactthatthepresenceofpropertyinaState
maybearontheexistenceofjurisdictionbyprovidingcontactsamongtheforumState,the
defendant,andthelitigation.Forexample,whenclaimstothepropertyitselfarethesource
oftheunderlyingcontroversybetweentheplaintiffandthedefendant,[Footnote24]itwould
beunusualfortheStatewherethepropertyislocatednottohavejurisdiction.Insuch
cases,thedefendant'sclaimtoproperty
Page433U.S.208
locatedintheStatewouldnormally[Footnote25]indicatethatheexpectedtobenefitfrom
theState'sprotectionofhisinterest.[Footnote26]TheState'sstronginterestsinassuring
themarketabilityofpropertywithinitsborders[Footnote27]andinprovidingaprocedurefor
peacefulresolutionofdisputesaboutthepossessionofthatpropertywouldalsosupport
jurisdiction,aswouldthelikelihoodthatimportantrecordsandwitnesseswillbefoundinthe
State.[Footnote28]Thepresenceofpropertymayalsofavorjurisdictionincases,suchas
suitsforinjurysufferedonthelandofanabsenteeowner,wherethedefendant'sownership
ofthepropertyisconceded,butthecauseofactionisotherwiserelatedtorightsandduties
growingoutofthatownership.[Footnote29]
Itappears,therefore,thatjurisdictionovermanytypesofactionswhichnowareormightbe
broughtinremwouldnotbeaffectedbyaholdingthatanyassertionofstatecourt
jurisdictionmustsatisfytheInternationalShoestandard.[Footnote30]Forthetypeofquasi
inremactiontypifiedbyHarrisv.Balkandthepresentcase,however,acceptingthe
proposedanalysiswouldresultinsignificantchange.Thesearecaseswhere
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Page433U.S.209
thepropertywhichnowservesasthebasisforstatecourtjurisdictioniscompletely
unrelatedtotheplaintiff'scauseofaction.Thus,althoughthepresenceofthedefendant's
propertyinaStatemightsuggesttheexistenceofothertiesamongthedefendant,the
State,andthelitigation,thepresenceofthepropertyalonewouldnotsupporttheState's
jurisdiction.Ifthoseothertiesdidnotexist,casesoverwhichtheStateisnowthoughtto
havejurisdictioncouldnotbebroughtinthatforum.
SinceacceptanceoftheInternationalShoetestwouldmostaffectthisclassofcases,we
examinetheargumentsagainstadoptingthatstandardastheyrelatetothiscategoryof
litigation.[Footnote31]Beforedoingso,however,wenotethatthistypeofcasealso
presentstheclearestillustrationoftheargumentinfavorofassessingassertionsof
jurisdictionbyasinglestandard.ForincasessuchasHarrisandthisone,theonlyrole
playedbythepropertyistoprovidethebasisforbringingthedefendantintocourt.[Footnote
32]Indeed,theexpresspurposeoftheDelawaresequestrationprocedureistocompelthe
defendanttoenterapersonalappearance.[Footnote33]Insuchcases,ifadirectassertion
ofpersonaljurisdictionoverthedefendantwouldviolatetheConstitution,itwouldseemthat
anindirectassertionofthatjurisdictionshouldbeequallyimpermissible.
Page433U.S.210
Theprimaryrationalefortreatingthepresenceofpropertyasasufficientbasisfor
jurisdictiontoadjudicateclaimsoverwhichtheStatewouldnothavejurisdictionif
InternationalShoeappliedisthatawrongdoer
"shouldnotbeabletoavoidpaymentofhisobligationsbytheexpedientofremovinghis
assetstoaplacewhereheisnotsubjecttoaninpersonamsuit."
Restatement66,Commenta.Accord,Developments955.Thisjustification,however,
doesnotexplainwhyjurisdictionshouldberecognizedwithoutregardtowhetherthe
propertyispresentintheStatebecauseofanefforttoavoidtheowner'sobligations.Nor
doesitsupportjurisdictiontoadjudicatetheunderlyingclaim.Atmost,itsuggeststhata
Stateinwhichpropertyislocatedshouldhavejurisdictiontoattachthatproperty,byuseof
properprocedures,[Footnote34]assecurityforajudgmentbeingsoughtinaforumwhere
thelitigationcanbemaintainedconsistentlywithInternationalShoe.See,e.g.,VonMehren
&Trautman1178Hazard284285Beale,supra,n18,at123124.Moreover,weknowof
nothingtojustifytheassumptionthatadebtorcanavoidpayinghisobligationsbyremoving
hispropertytoaStateinwhichhiscreditorcannotobtainpersonaljurisdictionoverhim.
[Footnote35]TheFullFaithandCreditClause,afterall,makesthevalidinpersonam
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judgmentofoneStateenforceableinallotherStates.[Footnote36]
Page433U.S.211
Itmightalsobesuggestedthatallowinginremjurisdictionavoidstheuncertaintyinherentin
theInternationalShoestandardandassuresaplaintiffofaforum.[Footnote37]SeeFolk&
Moyer,supra,n10,at749,767.Webelieve,however,thatthefairnessstandardof
InternationalShoecanbeeasilyappliedinthevastmajorityofcases.Moreover,whenthe
existenceofjurisdictioninaparticularforumunderInternationalShoeisunclear,thecostof
simplifyingthelitigationbyavoidingthejurisdictionalquestionmaybethesacrificeof"fair
playandsubstantialjustice."Thatcostistoohigh.
Weareleft,then,toconsiderthesignificanceofthelonghistoryofjurisdictionbasedsolely
onthepresenceofpropertyinaState.Althoughthetheorythatterritorialpowerisboth
essentialtoandsufficientforjurisdictionhasbeenundermined,wehaveneverheldthatthe
presenceofpropertyinaStatedoesnotautomaticallyconferjurisdictionovertheowner's
interestinthatproperty.[Footnote38]Thishistorymustbe
Page433U.S.212
consideredassupportingthepropositionthatjurisdictionbasedsolelyonthepresenceof
propertysatisfiesthedemandsofdueprocess,cf.Ownbeyv.Morgan, 256U.S.94,256U.
S.111(1921),butitisnotdecisive."[T]raditionalnotionsoffairplayandsubstantialjustice"
canbeasreadilyoffendedbytheperpetuationofancientformsthatarenolongerjustified
asbytheadoptionofnewproceduresthatareinconsistentwiththebasicvaluesofour
constitutionalheritage.Cf.Sniadachv.FamilyFinanceCorp.,395U.S.at395U.S.340
Wolfv.Colorado, 338U.S.25,338U.S.27(1949).Thefictionthatanassertionof
jurisdictionoverpropertyisanythingbutanassertionofjurisdictionovertheownerofthe
propertysupportsanancientformwithoutsubstantialmodernjustification.Itscontinued
acceptancewouldserveonlytoallowstatecourtjurisdictionthatisfundamentallyunfairto
thedefendant.
Wethereforeconcludethatallassertionsofstatecourtjurisdictionmustbeevaluated
accordingtothestandardssetforthinInternationalShoeanditsprogeny.[Footnote39]
Page433U.S.213
IV
TheDelawarecourtsbasedtheirassertionofjurisdictioninthiscasesolelyonthestatutory
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presenceofappellants'propertyinDelaware.Yetthatpropertyisnotthesubjectmatterof
thislitigation,noristheunderlyingcauseofactionrelatedtotheproperty.Appellants'
holdingsinGreyhounddonot,therefore,providecontactswithDelawaresufficientto
supportthejurisdictionofthatState'scourtsoverappellants.Ifitexists,thatjurisdiction
musthavesomeotherfoundation.[Footnote40]
AppelleeHeitnerdidnotallege,anddoesnotnowclaim,thatappellantshaveeversetfoot
inDelaware.Nordoesheidentifyanyactrelatedtohiscauseofactionashavingtaken
placeinDelaware.Nevertheless,hecontendsthatappellants'positionsasdirectorsand
officersofacorporationcharteredinDelaware[Footnote41]providesufficient"contacts,
ties,orrelations,"InternationalShoeCo.v.Washington,326U.S.at
Page433U.S.214
326U.S.319,withthatStatetogiveitscourtsjurisdictionoverappellantsinthis
stockholder'sderivativeaction.ThisargumentisbasedprimarilyonwhatHeitnerassertsto
bethestronginterestofDelawareinsupervisingthemanagementofaDelaware
corporation.ThatinterestissaidtoderivefromtheroleofDelawarelawinestablishingthe
corporationanddefiningtheobligationsowedtoitbyitsofficersanddirectors.Inorderto
protectthisinterest,appelleeconcludes,Delaware'scourtsmusthavejurisdictionover
corporatefiduciariessuchasappellants.
ThisargumentisundercutbythefailureoftheDelawareLegislaturetoassertthestate
interestappelleefindssocompelling.Delawarelawbasesjurisdictionnotonappellants'
statusascorporatefiduciaries,butratheronthepresenceoftheirpropertyintheState.
Althoughthesequestrationprocedureusedheremaybemostfrequentlyusedinderivative
suitsagainstofficersanddirectors,HughesToolCo.v.FawcettPublications,Inc.,290A.2d
693,695(Del.Ch.1972),theauthorizingstatuteevincesnospecificconcernwithsuch
actions.Sequestrationcanbeusedinanysuitagainstanonresident,[Footnote42]see,
e.g.,U.S.Industries,Inc.v.Gregg,540F.2d142(CA31976),cert.pending,No.76359
(breachofcontract)HughesToolCo.v.FawcettPublications,Inc.,supra,(same),and
reachescorporatefiduciariesonlyiftheyhappentoowninterestsinaDelawarecorporation,
orotherpropertyintheState.ButasHeitner'sfailuretosecurejurisdictionoversevenofthe
defendantsnamedinhiscomplaintdemonstrates,thereisnonecessaryrelationship
betweenholdingapositionasacorporatefiduciaryandowningstockorotherinterestsin
thecorporation.[Footnote43]IfDelawareperceiveditsinterestinsecuringjurisdictionover
corporatefiduciaries
Page433U.S.215
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tobeasgreatasHeitnersuggests,wewouldexpectittohaveenactedastatutemore
clearlydesignedtoprotectthatinterest.Moreover,evenifHeitner'sassessmentofthe
importanceofDelaware'sinterestisaccepted,hisargumentfailstodemonstratethat
Delawareisafairforumforthislitigation.Theinterestappelleehasidentifiedmaysupport
theapplicationofDelawarelawtoresolveanycontroversyoverappellants'actionsintheir
capacitiesasofficersanddirectors.[Footnote44]Butwehaverejectedtheargumentthat,if
aState'slawcanproperlybeappliedtoadispute,itscourtsnecessarilyhavejurisdiction
overthepartiestothatdispute.
"[TheState]doesnotacquire...jurisdictionbybeingthe'centerofgravity'ofthe
controversy,orthemostconvenientlocationforlitigation.Theissueispersonaljurisdiction,
notchoiceoflaw.Itisresolvedinthiscasebyconsideringtheactsofthe[appellants]."
Hansonv.Denckla, 357U.S.235,357U.S.254(1958).[Footnote45]Appelleesuggests
that,byacceptingpositionsasofficersordirectorsofaDelawarecorporation,appellants
performedtheactsrequiredbyHansonv.Denckla.HenotesthatDelawarelawprovides
substantialbenefitstocorporateofficersanddirectors,[Footnote46]andthatthesebenefits
were,atleastinpart,
Page433U.S.216
theincentiveforappellantstoassumetheirpositions.Itis,hesays,"onlyfairandjust"to
requireappellants,inreturnforthesebenefits,torespondintheStateofDelawarewhen
theyareaccusedofmisusingtheirpower.BriefforAppellee15.
But,likeHeitner'sfirstargument,thislineofreasoningestablishesonlythatitisappropriate
forDelawarelawtogoverntheobligationsofappellantstoGreyhoundanditsstockholders.
Itdoesnotdemonstratethatappellantshave"purposefullyavail[edthemselves]ofthe
privilegeofconductingactivitieswithintheforumState,"Hansonv.Denckla,supraat357U.
S.253,inawaythatwouldjustifybringingthembeforeaDelawaretribunal.Appellantshave
simplyhadnothingtodowiththeStateofDelaware.Moreover,appellantshadnoreasonto
expecttobehaledbeforeaDelawarecourt.Delaware,unlikesomeStates,[Footnote47]
hasnotenactedastatutethattreatsacceptanceofadirectorshipasconsenttojurisdiction
intheState.And
"[i]tstrainsreason...tosuggestthatanyonebuyingsecuritiesinacorporationformedin
Delaware'impliedlyconsents'tosubjecthimselftoDelaware's...jurisdictiononanycause
ofaction."
Folk&Moyer,supra,n10,at785.Appellants,whowerenotrequiredtoacquireinterestsin
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Greyhoundinordertoholdtheirpositions,didnot,byacquiringthoseinterests,surrender
theirrighttobebroughttojudgmentonlyinStateswithwhichtheyhadhad"minimum
contacts."
TheDueProcessClause
"doesnotcontemplatethatastatemaymakebindingajudgment...againstanindividual
orcorporatedefendantwithwhichthestatehasnocontacts,ties,orrelations."
InternationalShoeCo.v.Washington,326U.S.at326U.S.319.Delaware'sassertionof
jurisdictionoverappellantsinthiscaseisinconsistentwiththatconstitutionallimitationon
Page433U.S.217
statepower.ThejudgmentoftheDelawareSupremeCourtmust,therefore,bereversed.
Itissoordered.
MR.JUSTICEREHNQUISTtooknopartintheconsiderationordecisionofthiscase.
[Footnote1]
GreyhoundLines,Inc.,isincorporatedinCaliforniaandhasitsprincipalplaceofbusinessin
Phoenix,Ariz.
[Footnote2]
Ajudgmentof$13,146,090plusattorneys'feeswasenteredagainstGreyhoundinMt.Hood
States,Inc.v.GreyhoundCorp.,19723TradeCas.74,824,aff'd,___F.2d___(CA9
1977)App.10.
[Footnote3]
SeeUnitedStatesv.GreyhoundCorp.,363F.Supp.525(NDIll.1973)and370F.Supp.881
(NDIll.),aff'd,508F.2d529(CA71974).Greyhoundwasfined$100,000andGreyhound
Lines$500,000.
[Footnote4]
Section366provides:
"(a)IfitappearsinanycomplaintfiledintheCourtofChancerythatthedefendantorany
oneormoreofthedefendantsisanonresidentoftheState,theCourtmaymakeanorder
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directingsuchnonresidentdefendantordefendantstoappearbyadaycertaintobe
designated.Suchordershallbeservedonsuchnonresidentdefendantordefendantsby
mailorotherwise,ifpracticable,andshallbepublishedinsuchmannerastheCourtdirects,
notlessthanonceaweekfor3consecutiveweeks.TheCourtmaycompeltheappearance
ofthedefendantbytheseizureofalloranypartofhisproperty,whichpropertymaybesold
undertheorderoftheCourttopaythedemandoftheplaintiff,ifthedefendantdoesnot
appear,orotherwisedefaults.Anydefendantwhosepropertyshallhavebeensoseizedand
whoshallhaveenteredageneralappearanceinthecausemay,uponnoticetotheplaintiff,
petitiontheCourtforanorderreleasingsuchpropertyoranypartthereoffromtheseizure.
TheCourtshallreleasesuchpropertyunlesstheplaintiffshallsatisfytheCourtthat,
becauseofothercircumstancesthereisareasonablepossibilitythatsuchreleasemay
renderitsubstantiallylesslikelythatplaintiffwillobtainsatisfactionofanyjudgment
secured.Ifsuchpetitionshallnotbegranted,orifnosuchpetitionshallbefiled,such
propertyshallremainsubjecttoseizureandmaybesoldtosatisfyanyjudgmententeredin
thecause.TheCourtmayatanytimereleasesuchpropertyoranypartthereofuponthe
givingofsufficientsecurity."
"(b)TheCourtmaymakeallnecessaryrulesrespectingtheformofprocess,themannerof
issuanceandreturnthereof,thereleaseofsuchpropertyfromseizureandforthesaleof
thepropertysoseized,andmayrequiretheplaintifftogiveapprovedsecuritytoabideany
orderoftheCourtrespectingtheproperty."
"(c)Anytransferorassignmentofthepropertysoseizedaftertheseizurethereofshallbe
voidandafterthesaleofthepropertyismadeandconfirmed,thepurchasershallbe
entitledtoandhavealltheright,titleandinterestofthedefendantinandtothepropertyso
seizedandsoldandsuchsaleandconfirmationshalltransfertothepurchaseralltheright,
titleandinterestofthedefendantinandtothepropertyasfullyasifthedefendanthad
transferredthesametothepurchaserinaccordancewithlaw."
[Footnote5]
Asaconditionofthesequestrationorder,boththeplaintiffandthesequestratorwere
requiredtofilebondsof$1,000toassuretheircompliancewiththeordersofthecourt.App.
24.
Followingatechnicalamendmentofthecomplaint,theoriginalsequestrationorderwas
vacatedandreplacedbyanaliassequestrationorderidenticalinitstermstotheoriginal.
[Footnote6]
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Thesequestratorisappointedbythecourttoeffectthesequestration.isdutiesappearto
consistofservingthesequestrationorderonthenamedcorporation,receivingfromthat
corporationalistofthepropertywhichtheorderaffects,andfilingthatlistwiththecourt.For
performingthoseservicesinthiscase,thesequestratorreceivedafeeof$100underthe
originalsequestrationorderand$100underthealiasorder.
[Footnote7]
TheclosingpriceofGreyhoundstockonthedaythesequestrationorderwasissuedwas
$148.NewYorkTimes,May23,1974,p.62.Thus,thevalueofthesequesteredstockwas
approximately$1.2million.
[Footnote8]
Debentures,warrants,andstockunitcreditsbelongingtosomeofthedefendantswho
ownedeitherstockoroptionswerealsosequestered.Inaddition,Greyhoundreportedthatit
hadanemploymentcontractwithoneofthedefendantscallingforpaymentof$250,000
overa12monthperiod.Greyhoundrefusedtofurnishanyfurtherinformationonthatdebt
onthegroundthat,sincethesumsdueconstitutedwages,theirseizurewouldbe
unconstitutional.SeeSniadachv.FamilyFinanceCorp., 395U.S.337(1969).Heitnerdid
notchallengethisrefusal.
Theremainingdefendantsapparentlyownednopropertysubjecttothesequestrationorder.
[Footnote9]
Section169provides:
"Forallpurposesoftitle,action,attachmentgarnishmentandjurisdictionofallcourtsheldin
thisState,butnotforthepurposeoftaxation,thesitusoftheownershipofthecapitalstock
ofallcorporationsexistingunderthelawsofthisState,whetherorganizedunderthis
chapterorotherwise,shallberegardedasinthisState."
[Footnote10]
Thecourtrelied,361A.2dat228,230231,onourdecisioninOwnbeyv.Morgan, 256U.
S.94(1921),andreferencestothatdecisioninNorthGeorgiaFinishing,Inc.v.DiChem,
Inc., 419U.S.601,419U.S.610(1975)(POWELL,J.,concurringinjudgment)Calero
Toledov.PearsonYachtLeasingCo., 416U.S.663,416U.S.679n.14(1974)Mitchell
v.W.T.GrantCo., 416U.S.600,416U.S.613(1974)Fuentesv.Shevin, 407U.S.67,
407U.S.91n.23(1972)Sniadachv.FamilyFinanceCorp.,supraat395U.S.339.The
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onlyquestionbeforetheCourtinOwnbeywastheconstitutionalityofarequirementthata
defendantwhosepropertyhasbeenattachedfileabondbeforeenteringanappearance.
WedonotreadtherecentreferencestoOwnbeyasnecessarilysuggestingthatOwnbeyis
consistentwithmorerecentdecisionsinterpretingtheDueProcessClause.
Sequestrationistheequitycounterpartoftheprocessofforeignattachmentinsuitsatlaw
consideredinOwnbey.Delaware'ssequestrationstatutewasmodeledafteritsattachment
statute.SeeSandsv.LefcourtRealtyCorp.,35Del.Ch.340,344345,117A.2d365,367
(Sup.Ct.1955)Folk&Moyer,SequestrationinDelaware:AConstitutionalAnalysis,73
Colum.L.Rev.749,751754(1973).
[Footnote11]
TheDistrictCourtjudgmentinU.S.IndustrieswasreversedbytheCourtofAppealsforthe
ThirdCircuit.540F.2d142(1976),cert.pending,No.76359.TheCourtofAppeals
characterizedthepassagefromtheDelawareSupremeCourt'sopinionquotedintextas
"crypticconclusions."Id.at149.
[Footnote12]
UnderDelawarelaw,defendantswhosepropertyhasbeensequesteredmustentera
generalappearance,thussubjectingthemselvestoinpersonamliability,beforetheycan
defendonthemerits.SeeGreyhoundCorp.v.Heitner,361A.2d225,235236(1976).
Thus,ifthejudgmentbelowwereconsiderednottobeanappealablefinaljudgment,28
U.S.C.1257(2),appellantswouldhavethechoiceofsufferingadefaultjudgmentor
enteringageneralappearanceanddefendingonthemerits.Thiscaseisinthesame
postureaswasCoxBroadcastingCorp.v.Cohn, 420U.S.469,420U.S.485(1975):
"The[Delaware]SupremeCourt'sjudgmentisplainlyfinalonthefederalissue,andisnot
subjecttofurtherreviewinthestatecourts.Appellantswillbeliablefordamagesifthe
elementsofthestatecauseofactionareproved.Theymayprevailattrialonnonfederal
grounds,itistrue,butifthe[Delaware]courterroneouslyupheldthestatute,thereshouldbe
notrialatall."
Accordingly,"consistentwiththepragmaticapproachthatwehavefollowedinthepastin
determiningfinality,"id.at420U.S.486,weconcludethatthejudgmentbelowisfinalwithin
themeaningof1257.
[Footnote13]
Thestatutealsorequiredthatacopyofthesummonsandcomplaintbemailedtothe
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defendantifhisplaceofresidencewasknowntotheplaintifforcouldbedeterminedwith
reasonablediligence.95U.S.at95U.S.718.Mitchellhadaverredthathedidnotknowand
couldnotdetermineNeff'saddress,sothatthepublicationwastheonly"notice"given.Id.at
95U.S.717.
[Footnote14]
TheFederalCircuitCourtbaseditsrulingondefectsinMitchell'saffidavitinsupportofthe
orderforservicebypublicationandintheaffidavitbywhichpublicationwasproved.Id.at95
U.S.720.Mr.JusticeFieldindicatedthat,ifthisCourthadconfineditselftoconsidering
thoserulings,thejudgmentwouldhavebeenreversed.Id.at95U.S.721.
[Footnote15]
ThedoctrinethatoneStatedoesnothavetorecognizethejudgmentofanotherState's
courtsifthelatterdidnothavejurisdictionwasfirmlyestablishedatthetimeofPennoyer.
See,e.g.,52U.S.Ketchum,11How.165(1851)Boswell'sLesseev.Otis,9How.336
(1850)Kibbev.Kibbe,1Kirby119(Conn.Super.Ct.1786).
[Footnote16]
Attachmentwasconsideredessentialtothestatecourt'sjurisdictionfortworeasons.First,
attachmentcombinedwithsubstitutedservicewouldprovidegreaterassurancethatthe
defendantwouldactuallyreceivenoticeoftheactionthanwouldpublicationalone.Second,
sincethecourt'sjurisdictiondependedonthedefendant'sownershipofpropertyinthe
State,andcouldbedefeatedifthedefendantdisposedofthatproperty,attachmentwas
necessarytoassurethatthecourthadjurisdictionwhentheproceedingsbeganand
continuedtohavejurisdictionwhenitenteredjudgment.95U.S.at95U.S.727728.
[Footnote17]
"Ajudgmentinremaffectstheinterestsofallpersonsindesignatedproperty.Ajudgment
quasiinremaffectstheinterestsofparticularpersonsindesignatedproperty.Thelatterisof
twotypes.Inone,theplaintiffisseekingtosecureapreexistingclaiminthesubjectproperty
andtoextinguishorestablishthenonexistenceofsimilarinterestsofparticularpersons.In
theother,theplaintiffseekstoapplywhatheconcedestobethepropertyofthedefendant
tothesatisfactionofaclaimagainsthim.Restatement,Judgments,59."
Hansonv.Denckla, 357U.S.235,357U.S.246n.12(1958).
AsdidtheCourtinHanson,wewill,forconvenience,generallyusetheterm"inrem"in
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placeof"inremandquasiinrem."
[Footnote18]
TheCourtinHarrislimiteditsholdingtoStatesinwhichtheprincipaldefendant(Balk)could
havesuedthegarnishee(Harris)ifhehadobtainedpersonaljurisdictionoverthegarnishee
inthatState.198U.S.at198U.S.222223,198U.S.226.TheCourtexplained:
"Theimportanceofthefactoftherightoftheoriginalcreditortosuehisdebtorintheforeign
State,asaffectingtherightofthecreditorofthatcreditortosuethedebtororgarnishee,lies
inthenatureoftheattachmentproceeding.Theplaintiffinsuchproceedingintheforeign
Stateisabletosueouttheattachmentandattachthedebtduefromthegarnisheetohis
(thegarnishee's)creditor,becauseofthefactthattheplaintiffisreally,insuchproceeding,
arepresentativeofthecreditorofthegarnishee,andthereforeifsuchcreditorhimselfhad
therighttocommencesuittorecoverthedebtintheforeignState,hisrepresentativehas
thesameright,asrepresentinghim,andmaygarnishorattachthedebt,providedthe
municipallawoftheStatewheretheattachmentwassuedoutpermitsit."
Id.at198U.S.226.Theproblemwiththisreasoningisthat,unlesstheplaintiffhas
obtainedajudgmentestablishinghisclaimagainsttheprincipaldefendant,see,e.g.,
Baltimore&O.R.Co.v.Hostetter, 240U.S.620(1916),hisrightto"represent"the
principaldefendantinanactionagainstthegarnisheeisatissue.SeeBeale,TheExercise
ofJurisdictioninRemtoCompelPaymentofaDebt,27Harv.L.Rev.107,118120(1913).
[Footnote19]
Asthelanguagequotedindicates,theInternationalShoeCourtbelievedthatthestandardit
wassettingforthgovernedactionsagainstnaturalpersons,aswellascorporations,andwe
seenoreasontodisagree.SeealsoMcGeev.InternationalLifeIns.Co., 355U.S.220,
355U.S.222(1957)(InternationalShoeculminationoftrendtowardexpandingstate
jurisdictionover"foreigncorporationsandothernonresidents").Thedifferencesbetween
individualsandcorporationsmay,ofcourse,leadtotheconclusionthatagivensetof
circumstancesestablishesstatejurisdictionoveronetypeofdefendantbutnotoverthe
other.
[Footnote20]
NothinginHansonv.Denckla, 357U.S.235(1958),istothecontrary.TheHansonCourt's
statementthatrestrictionsonstatejurisdiction"areaconsequenceofterritoriallimitations
onthepoweroftherespectiveStates,"id.at357U.S.251,simplymakesthepointthatthe
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Statesaredefinedbytheirgeographicalterritory.Aftermakingthispoint,theCourtin
Hansondeterminedthatthedefendantoverwhichpersonaljurisdictionwasclaimedhadnot
committedanyactssufficientlyconnectedtotheStatetojustifyjurisdictionunderthe
InternationalShoestandard.
[Footnote21]
Cf.Restatement(Second)ofConflictofLaws59,Commenta(possibleinconsistency
betweenprincipleofreasonablenesswhichunderliesfieldofjudicialjurisdictionand
traditionalruleofinremjurisdictionbasedsolelyonlandinState)60,Commenta(same
astojurisdictionbasedsolelyonchattelinState)68,Commentc(ruleofHarrisv.Balk
"mightbethoughtinconsistentwiththebasicprincipleofreasonableness")(1971).
[Footnote22]
"Allproceedings,likeallrights,arereallyagainstpersons.Whethertheyareproceedingsor
rightsinremdependsonthenumberofpersonsaffected."
Tylerv.CourtofRegistration,175Mass.71,76,55N.E.812,814(Holmes,C.J.),appeal
dismissed, 179U.S.405(1900).
[Footnote23]
Itistruethatthepotentialliabilityofadefendantinaninremactionislimitedbythevalueof
theproperty,butthatlimitationdoesnotaffecttheargument.Thefairnessofsubjectinga
defendanttostatecourtjurisdictiondoesnotdependonthesizeoftheclaimbeinglitigated.
Cf.Fuentesv.Shevin,407U.S.at407U.S.8890n32,infra.
[Footnote24]
Thiscategoryincludestrueinremactionsandthefirsttypeofquasiinremproceedings.
Seen17,supra.
[Footnote25]
Insomecircumstances,thepresenceofpropertyintheforumStatewillnotsupportthe
inferencesuggestedintext.Cf.,e.g.,Restatement60,Commentsc,dTraynor672673
Note,ThePowerofaStatetoAffectTitleinaChattelAtypicallyRemovedtoIt,47
Colum.L.Rev.767(1947).
[Footnote26]
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Cf.Hansonv.Denckla,357U.S.at357U.S.253.
[Footnote27]
See,e.g.,Tylerv.CourtofRegistration,supra.
[Footnote28]
Wedonotsuggestthattheseillustrationsincludeallthefactorsthatmayaffectthedecision,
northatthefactorswehavementionedarenecessarilydecisive.
[Footnote29]
Cf.Dubinv.Philadelphia,34Pa.D.&C.61(1938).Ifsuchanactionwerebroughtunderthe
inremjurisdiction,ratherthanunderalongarmstatute,itwouldbeaquasiinremactionof
thesecondtype.Seen17,supra.
[Footnote30]
Cf.Smit,TheEnduringUtilityofInRemRules:ALastingLegacyofPennoyerv.Neff,43
BrooklynL.Rev.600(1977).Wedonotsuggestthatjurisdictionaldoctrinesotherthanthose
discussedintext,suchastheparticularizedrulesgoverningadjudicationsofstatus,are
inconsistentwiththestandardoffairness.See,e.g.,Traynor660661.
[Footnote31]
Concentratingonthiscategoryofcasesisalsoappropriatebecause,intheothercategories,
totheextentthatpresenceofpropertyintheStateindicatestheexistenceofsufficient
contactsunderInternationalShoe,thereisnoneedtorelyonthepropertyasjustifying
jurisdictionregardlessoftheexistenceofthosecontacts.
[Footnote32]
Thevalueofthepropertyseizeddoesservetolimittheextentofpossibleliability,butthat
limitationdoesnotprovidesupportfortheassertionofjurisdiction.Seen23,supra.Inthis
case,appellants'potentialliabilityundertheinremjurisdictionexceeds$1million.Seenn.7
8supra.
[Footnote33]
Seesupraat433U.S.193,433U.S.194.ThispurposeisemphasizedbyDelaware's
refusaltoallowanydefenseonthemeritsunlessthedefendantentersageneral
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appearance,thussubmittingtofullinpersonamliability.Seen12,supra.
[Footnote34]
SeeNorthGeorgiaFinishing,Inc.v.DiChem,Inc., 419U.S.601(1975)Mitchellv.W.T.
GrantCo, 416U.S.600(1974)Fuentesv.Shevin, 407U.S.67(1972)Sniadachv.
FamilyFinanceCorp., 395U.S.337(1969).
[Footnote35]
Theroleofinremjurisdictionasameansofpreventingtheevasionofobligations,likethe
usefulnessofthatjurisdictiontomitigatethelimitationsPennoyerplacedoninpersonam
jurisdiction,mayoncehavebeenmoresignificant.VonMehren&Trautman1178.
[Footnote36]
Onceithasbeendeterminedbyacourtofcompetentjurisdictionthatthedefendantisa
debtoroftheplaintiff,therewouldseemtobenounfairnessinallowinganactiontorealize
onthatdebtinaStatewherethedefendanthasproperty,whetherornotthatStatewould
havejurisdictiontodeterminetheexistenceofthedebtasanoriginalmatter.Cf.n18,
supra.
[Footnote37]
Thiscasedoesnotraise,andwethereforedonotconsider,thequestionwhetherthe
presenceofadefendant'spropertyinaStateisasufficientbasisforjurisdictionwhenno
otherforumisavailabletotheplaintiff.
[Footnote38]
Tothecontrary,inPenningtonv.FourthNat.Bank, 243U.S.269,243U.S.271(1917),
wesaid:
"TheFourteenthAmendmentdidnot,inguaranteeingdueprocessoflaw,abridgethe
jurisdictionwhichaStatepossessedoverpropertywithinitsborders,regardlessofthe
residenceorpresenceoftheowner.Thatjurisdictionextendsaliketotangibleandto
intangibleproperty.Indebtednessduefromaresidenttoanonresidentofwhichbank
depositsareanexampleispropertywithintheState.Chicago,RockIslandPacificRy.Co.
v.Sturm, 174U.S.710.Itis,indeed,thespeciesofpropertywhichcourtsoftheseveral
Stateshavemostfrequentlyappliedinsatisfactionoftheobligationsofabsentdebtors.
Harrisv.Balk, 198U.S.215.Substitutedserviceonanonresidentbypublicationfurnishes
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nolegalbasisforajudgmentinpersonam.Pennoyerv.Neff, 95U.S.714.But
garnishmentorforeignattachmentisaproceedingquasiinrem.Freemanv.Alderson, 119
U.S.185,119U.S.187.Thethingbelongingtotheabsentdefendantisseizedandapplied
tothesatisfactionofhisobligation.TheFederalConstitutionpresentsnoobstacletothefull
exerciseofthispower."
SeealsoHuronHoldingCorp.v.LincolnMineOperatingCo., 312U.S.183,312U.S.193
(1941).
Morerecentdecisions,however,containnosimilarsweepingendorsementsofjurisdiction
basedonproperty.InHansonv.Denckla,357U.S.at357U.S.246,wenotedthatastate
court'sinremjurisdictionis"[f]oundedonphysicalpower,"andthat"[t]hebasisofthe
jurisdictionisthepresenceofthesubjectpropertywithintheterritorialjurisdictionofthe
forumState."Wefoundinthatcase,however,thatthepropertywhichwasthebasisforthe
assertionofinremjurisdictionwasnotpresentintheState.Wethereforedidnothaveto
considerwhetherthepresenceofpropertyintheStatewassufficienttojustifyjurisdiction.
WealsoheldthatthedefendantdidnothavesufficientcontactwiththeStatetojustifyin
personamjurisdiction.
[Footnote39]
Itwouldnotbefruitfulforustoreexaminethefactsofcasesdecidedontherationalesof
PennoyerandHarristodeterminewhetherjurisdictionmighthavebeensustainedunderthe
standardweadopttoday.Totheextentthatpriordecisionsareinconsistentwiththis
standard,theyareoverruled.
[Footnote40]
AppellantsarguethatourdeterminationthattheminimumcontactsstandardofInternational
Shoegovernsjurisdictionheremakesunnecessaryanyconsiderationoftheexistenceof
suchcontacts.BriefforAppellants27ReplyBriefforAppellants9.Theypointoutthatthey
wereneverpersonallyservedwithasummons,thatDelawarehasnolongarmstatute
whichwouldauthorizesuchservice,andthattheDelawareSupremeCourthas
authoritativelyheldthattheexistenceofcontactsisirrelevanttojurisdictionunderDel.Code
Ann.,Tit.10,366(1975).Aspartofitssequestrationorder,however,theCourtof
Chancerydirecteditsclerktosendeachappellantacopyofthesummonsandcomplaintby
certifiedmail.Therecordindicatesthatthosemailingsweremade,andcontainsreturn
receiptsfromatleast19oftheappellants.Noneoftheappellantshassuggestedthathedid
notactuallyreceivethesummonswhichwasdirectedtohimincompliancewithaDelaware
statutedesignedtoprovidejurisdictionovernonresidents.Inthesecircumstances,wewill
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assumethattheproceduresfollowedwouldbesufficienttobringappellantsbeforethe
Delawarecourts,ifminimumcontactsexisted.
[Footnote41]
Ontheviewwetakeofthecase,weneednotconsiderthesignificance,ifany,ofthefact
thatsomeappellantsholdpositionsonlywithasubsidiaryofGreyhoundwhichis
incorporatedinCalifornia.
[Footnote42]
Sequestrationisanequitableprocedureavailableonlyinequityactions,butasimilar
proceduremaybeutilizedinactionsatlaw.Seen10,supra.
[Footnote43]
Delawaredoesnotrequiredirectorstoownstock.Del.CodeAnn.,Tit.8,141(b)(Supp.
1976).
[Footnote44]
Ingeneral,thelawoftheStateofincorporationisheldtogoverntheliabilitiesofofficersor
directorstothecorporationanditsstockholders.SeeRestatement309.Butsee
Cal.Corp.Code2115(WestSupp.1977).Therationaleforthegeneralruleappearstobe
basedmoreontheneedforauniformandcertainstandardtogoverntheinternalaffairsofa
corporationthanontheperceivedinterestoftheStateofincorporation.Cf.Kosterv.
LumbermensMutualCasualtyCo., 330U.S.518,330U.S.527528(1947).
[Footnote45]
Mr.JusticeBlack,althoughdissentinginHanson,agreedwiththemajoritythat
"thequestionwhetherthelawofaStatecanbeappliedtoatransactionisdifferentfromthe
questionwhetherthecourtsofthatStatehavejurisdictiontoenterajudgment...."
357U.S.at357U.S.258.
[Footnote46]
See,e.g.,Del.CodeAnn.,Tit.8,143,145(1975ed.andSupp.1976).
[Footnote47]
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See,e.g.,Conn.Gen.Stat.Rev.33322(1976)N.C.Gen.Stat.5533(1975)S.C.Code
Ann.33570(1977).
MR.JUSTICEPOWELL,concurring.
IagreethattheprinciplesofInternationalShoeCo.v.Washington, 326U.S.310(1945),
shouldbeextendedtogovernassertionsofinremaswellasinpersonamjurisdictionina
statecourt.Ialsoagreethatneitherthestatutorypresenceofappellants'stockinDelaware
northeirpositionsasdirectorsandofficersofaDelawarecorporationcanprovidesufficient
contactstosupporttheDelawarecourts'assertionofjurisdictioninthiscase.
Iwouldexplicitlyreservejudgment,however,onwhethertheownershipofsomeformsof
propertywhosesitusisindisputablyandpermanentlylocatedwithinaStatemay,without
more,providethecontactsnecessarytosubjectadefendanttojurisdictionwithintheState
totheextentofthevalueoftheproperty.Inthecaseofrealproperty,inparticular,
preservationofthecommonlawconceptofquasiinremjurisdictionarguablywouldavoid
theuncertaintyofthegeneralInternationalShoestandardwithoutsignificantcostto
"traditionalnotionsoffairplayandsubstantialjustice.'"Id.at326U.S.316,quotingMilliken
v.Meyer, 311U.S.457,311U.S.463(1940).
Subjecttotheforegoingreservation,IjointheopinionoftheCourt.
MR.JUSTICESTEVENS,concurringinthejudgment.
TheDueProcessClauseaffordsprotectionagainst"judgmentswithoutnotice."International
ShoeCo.v.Washington, 326U.S.310,326U.S.324(opinionofBlack,J.).Throughout
ourhistory,theacceptableexerciseofinremandquasiinrem
Page433U.S.218
jurisdictionhasincludedaproceduregivingreasonableassurancethatactualnoticeofthe
particularclaimwillbeconveyedtothedefendant.*Thus,publication,noticebyregistered
mail,orextraterritorialpersonalservicehasbeenanessentialingredientofanyprocedure
thatservesasasubstituteforpersonalservicewithinthejurisdiction.
Therequirementoffairnoticealso,Ibelieve,includesfairwarningthataparticularactivity
maysubjectapersontothejurisdictionofaforeignsovereign.IfIvisitanotherState,or
acquirerealestateoropenabankaccountinit,Iknowinglyassumesomeriskthatthe
Statewillexerciseitspowerovermypropertyormypersonwhilethere.Mycontactwiththe
State,thoughminimal,givesrisetopredictablerisks.
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Perhapsthesameconsequencesshouldflowfromthepurchaseofstockofacorporation
organizedunderthelawsofaforeignnation,because,tosomelimitedextent,one's
propertyandaffairsthenbecomesubjecttothelawsofthenationofdomicileofthe
corporation.Asamatterofinternationallaw,thatsuggestionmightbeacceptablebecausea
foreigninvestmentissufficientlyunusualtomakeitappropriatetorequiretheinvestorto
studytheramificationsofhisdecision.Butapurchaseofsecuritiesinthedomesticmarketis
anentirelydifferentmatter.
Onewhopurchasessharesofstockontheopenmarketcanhardlybeexpectedtoknow
thathehastherebybecomesubjecttosuitinaforumremotefromhisresidenceand
unrelatedtothetransaction.Asapracticalmatter,theDelawaresequestrationstatute
createsanunacceptableriskofjudgmentwithoutnotice.Unlikethe49otherStates,
Delawaretreatstheplaceofincorporationasthesitusofthestock,eventhoughboththe
ownerandthecustodianofthesharesareelsewhere.Moreover,Delawaredeniesthe
defendant
Page433U.S.219
theopportunitytodefendthemeritsofthesuitunlesshesubjectshimselftotheunlimited
jurisdictionofthecourt.Thus,itcoercesadefendanteithertosubmittopersonaljurisdiction
inaforumwhichcouldnototherwiseobtainsuchjurisdictionortolosethesecuritieswhich
havebeenattached.Ifitsprocedurewereupheld,Delawarewould,ineffect,imposeaduty
ofinquiryoneverypurchaserofsecuritiesinthenationalmarket.Forunlessthepurchaser
ascertainsboththeStateofincorporationofthecompanywhosesharesheisbuying,and
alsotheidiosyncrasiesofitslaw,hemaybeassuminganunknownriskoflitigation.I
thereforeagreewiththeCourtthat,ontherecordbeforeus,noadequatebasisfor
jurisdictionexists,andthattheDelawarestatuteisunconstitutionalonitsface.
HowtheCourt'sopinionmaybeappliedinothercontextsisnotentirelycleartome.Iagree
withMR.JUSTICEPOWELLthatitshouldnotbereadtoinvalidatequasiinremjurisdiction
whererealestateisinvolved.Iwouldalsonotreaditasinvalidatingotherlongaccepted
methodsofacquiringjurisdictionoverpersonswithadequatenoticeofboththeparticular
controversyandthefactthattheirlocalactivitiesmightsubjectthemtosuit.Myuncertainty
astothereachoftheopinion,andmyfearthatitpurportstodecideagreatdealmorethan
isnecessarytodisposeofthiscase,persuadememerelytoconcurinthejudgment.
*
"Todispensewithpersonalservice,thesubstitutethatismostlikelytoreachthedefendant
istheleastthatoughttoberequiredifsubstantialjusticeistobedone."
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McDonaldv.Mabee, 243U.S.90,243U.S.92.
MR.JUSTICEBRENNAN,concurringinpartanddissentinginpart.
IjoinPartsIIIIoftheCourt'sopinion.Ifullyagreethattheminimumcontactsanalysis
developedinInternationalShoeCo.v.Washington, 326U.S.310(1945),representsafar
moresensibleconstructfortheexerciseofstatecourtjurisdictionthanthepatchworkof
legalandfactualfictionsthathasbeengeneratedfromthedecisioninPennoyerv.Neff, 95
U.S.714(1878).Itispreciselybecause
Page433U.S.220
theinquiryintominimumcontactsisnowofsuchoverridingimportance,however,thatI
mustrespectfullydissentfrom433U.S.
I
TheprimaryteachingofPartsIIIIoftoday'sdecisionisthataState,inseekingtoassert
jurisdictionoverapersonlocatedoutsideitsborders,mayonlydosoonthebasisof
minimumcontactsamongtheparties,thecontestedtransaction,andtheforumState.The
DelawareSupremeCourtcouldnothavemadeplainer,however,thatitssequestration
statute,Del.CodeAnn.,Tit.10,366(1975),doesnotoperateonthisbasis,butinsteadis
strictlyanembodimentofquasiinremjurisdiction,ajurisdictionalpredicatenolonger
constitutionallyviable:
"[J]urisdictionunder366remains...quasiinremfoundedonthepresenceofcapital
stockhere,notonpriorcontactbydefendantswiththisforum."
GreyhoundCorp.v.Heitner,361A.2d225,229(1976).Thisstatecourtrulingobviously
comportswiththeunderstandingoftheparties,fortheissueoftheexistenceofminimum
contactswasneverpleadedbyappellee,madethesubjectofdiscovery,orruleduponby
theDelawarecourts.Thesefactsnotwithstanding,theCourtin433U.S.Succinctlystated,
oncehavingproperlyandpersuasivelydecidedthatthequasiinremstatutethatDelaware
admitstohavingenactedisinvalid,theCourtthenproceedstofindthataminimumcontacts
lawthatDelawareexpresslydenieshavingenactedalsocouldnotbeconstitutionally
appliedinthiscase.
Inmyview,apurerexampleofanadvisoryopinionisnottobefound.True,appellantsdo
notdenyhavingreceivedactualnoticeoftheactioninquestion.Anteat433U.S.213n.40.
Page433U.S.221
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However,noticeisbutoneingredientofaproperassertionofstatecourtjurisdiction.The
otherisastatuteauthorizingtheexerciseoftheState'sjudicialpoweralongconstitutionally
permissiblegroundswhichhenceforthmeansminimumcontacts.Asoftoday,366isnot
suchalaw.[Footnote2/1]Recognizingthattoday'sdecisionfundamentallyaltersthe
relevantjurisdictionalgroundrules,Icertainlywouldnotwanttoruleoutthepossibilitythat
Delaware'scourtsmightdecidethatthelegislature'soverridingpurposeofsecuringthe
personalappearanceinstatecourtsofdefendantswouldbestbeservedbyreinterpretingits
statutetopermitstatejurisdictiononthebasisofconstitutionallypermissiblecontacts,rather
thanstockownership.Werethestatecourtstotakethisstep,itwouldthenbecome
necessarytoaddressthequestionofwhetherminimumcontactsexisthere.Butinthe
presentpostureofthiscase,theCourt'sdecisionofthisimportantissueispurelyan
abstractruling.
MyconcernwiththeinappropriatenessoftheCourt'sactionishighlightedbytwoother
considerations.First,aninquiryintominimumcontactsinevitablyishighlydependenton
creatingaproperfactualfoundationdetailingthecontactsbetweentheforumStateandthe
controversyinquestion.Becauseneithertheplaintiffappelleenorthestatecourtsviewed
suchaninquiryasgermaneinthisinstance,theCourttodayisunabletodrawupona
properfactualrecordinreachingitsconclusionmoreover,itsdispositiondeniesappellee
thenormalopportunitytoseekdiscoveryonthecontactsissue.Second,itmustbe
rememberedthattheCourt'srulingisaconstitutionalone,andnecessarily
Page433U.S.222
willaffectthereachofthejurisdictionallawsofall50States.Ordinarilythiswouldcounsel
restraintinconstitutionalpronouncements.Ashwanderv.TVA, 297U.S.288,297U.S.
345348(1936)(Brandeis,J.,concurring).CertainlyitshouldhavecautionedtheCourt
againstreachingouttodecideaquestionthat,ashere,hasyettoemergefromthestate
courtsripenedforreviewonthefederalissue.
II
Nonetheless,becausetheCourtrulesontheminimumcontactsquestion,Ifeelimpelledto
expressmyview.Whileevidencederivedthroughdiscoverymightsatisfymethatminimum
contactsarelackinginagivencase,Iamconvincedthat,asageneralrule,astateforum
hasjurisdictiontoadjudicateashareholderderivativeactioncenteringontheconductand
policiesofthedirectorsandofficersofacorporationcharteredbythatState.Unlikethe
Court,IthereforewouldnotforecloseDelawarefromassertingjurisdictionoverappellants
wereitpersuadedtodosoonthebasisofminimumcontacts.
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Itiswellsettledthataderivativelawsuit,aspresentedhere,doesnotinureprimarilytothe
benefitofthenamedplaintiff.Rather,theprimarybeneficiariesarethecorporationandits
owners,theshareholders.
"Thecauseofactionwhichsuchaplaintiffbringsbeforethecourtisnothisown,butthe
corporation's....Suchaplaintiffoftenmayrepresentanimportantpublicandstockholder
interestinbringingfaithlessmanagerstobook."
Kosterv.LumbermensMutualCasualtyCo., 330U.S.518,330U.S.522,524(1947).
Viewedinthislight,thecharteringStatehasanunusuallypowerfulinterestininsuringthe
availabilityofaconvenientforumforlitigatingclaimsinvolvingapossiblemultiplicityof
defendantfiduciariesandforvindicatingtheState'ssubstantivepoliciesregardingthe
managementofitsdomesticcorporations.Ibelievethatourcasesfairlyestablishthat
Page433U.S.223
theState'svalidsubstantiveinterestsareimportantconsiderationsinassessingwhetherit
constitutionallymayclaimjurisdictionoveragivencauseofaction.
Inthisinstance,Delawarecanpointtoatleastthreeinterrelatedpublicpoliciesthatare
furtheredbyitsassertionofjurisdiction.First,theStatehasasubstantialinterestin
providingrestitutionforitslocalcorporationsthatallegedlyhavebeenvictimizedbyfiduciary
misconduct,evenifthemanagerialdecisionsoccurredoutsidetheState.Theimportanceof
thisgeneralstateinterestinassuringrestitutionforitsownresidentspreviouslyfound
expressionincasesthatwentoutsidethethenprevailingdueprocessframeworkto
authorizestatecourtjurisdictionovernonresidentmotoristswhoinjureotherswithinthe
State.Hessv.Pawloski, 274U.S.352(1927)seeOlberdingv.IllinoisCentralR.Co., 346
U.S.338,346U.S.341(1953).Morerecently,ithasledStatestoseekandtoacquire
jurisdictionovernonresidenttortfeasorswhosepurelyoutofstateactivitiesproduce
domesticconsequences.E.g.,Grayv.AmericanRadiator&StandardSanitaryCorp.,22
Ill.2d432,176N.E.2d761(1961).Second,statecourtshavelegitimatelyreadtheir
jurisdictionexpansivelywhenacauseofactioncentersinanareainwhichtheforumState
possessesamanifestregulatoryinterest.E.g.,McGeev.InternationallifeIns.Co., 355U.
S.220(1957)(insuranceregulation)TravelersHealthAssn.v.Virginia, 339U.S.643
(1950)(blueskylaws).OnlythisTerm,wereiteratedthattheconductofcorporate
fiduciariesisjustsuchamatterinwhichthepoliciesandinterestsofthedomesticforumare
ordinarilypresumedtobeparamount.SantaFeIndustries,Inc.v.Green, 430U.S.462,
430U.S.478480(1977)seeCortv.Ash, 422U.S.66,422U.S.8485(1975).Finally,a
StatelikeDelawarehasarecognized,interestinaffordingaconvenientforumfor
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supervisingandoverseeingtheaffairsofanentitythatispurelythecreationofthatState's
law.Forexample,evenfollowingourdecisionin
Page433U.S.224
InternationalShoe,NewYorkcourtswerepermittedtoexercisecompletejudicialauthority
overnonresidentbeneficiariesofatrustcreatedunderstatelaw,eventhough,unlike
appellantshere,thebeneficiariespersonallyenteredintonoassociationwhatsoeverwith
NewYork.Mullanev.CentralHanoverBank&TrustCo., 339U.S.306,339U.S.313
(1950)[Footnote2/2]cf.HartfordLifeIns.Co.v.Ibs, 237U.S.662,237U.S.671(1915)
(litigationconcerningmanagementofmortuaryfundoperatedbylocallychartered
corporationrestsincourtofthatState)Bernheimerv.Converse, 206U.S.516,206U.S.
533(1907)(statecourtscanoverseeliquidationofstatecharteredcorporation).I,ofcourse,
amnotsuggestingthatDelaware'svariedinterestswouldjustifyitsacceptanceof
jurisdictionoveranytransactiontouchingupontheaffairsofitsdomesticcorporations.Buta
derivativeactionwhichraisesallegationsofabusesofthebasicmanagementofan
institutionwhoseexistenceiscreatedbytheStateandwhosepowersanddutiesare
definedbystatelawfundamentallyimplicatesthepublicpoliciesofthatforum.
Tobesure,theCourtisnotblindtotheseconsiderations.ItnotesthattheState'sinterests
"maysupporttheapplicationofDelawarelawtoresolveanycontroversyoverappellants'
actionsintheircapacitiesasofficersanddirectors."
Anteat433U.S.215.Butthis,theCourtargues,pertainstochoiceoflaw,notjurisdiction.I
recognizethatthejurisdictionalandchoiceoflawinquiriesarenotidentical.Hansonv.
Denckla, 357U.S.235,357U.S.254(1958).ButIwouldnotcompartmentalizethinkingin
thisareaquitesorigidlyasitseemstometheCourtdoestoday,forbothinquiries"are
Page433U.S.225
oftencloselyrelatedandtoasubstantialdegreedependuponsimilarconsiderations."Id.at
357U.S.258(Black,J.,dissenting).Ineithercase,animportantlinchpinistheextentof
contactsbetweenthecontroversy,theparties,andtheforumState.Whileconstitutional
limitationsonthechoiceoflawarebynomeanssettled,see,e.g.,HomeIns.Co.v.Dick,
281U.S.397(1930),importantconsiderationscertainlyincludetheexpectanciesofthe
partiesandthefairnessofgoverningthedefendants'actsandbehaviorbyrulesofconduct
createdbyagivenjurisdiction.See,e.g.,Restatement(Second)ofConflictofLaws6
(1971)(hereafterRestatement).ThesesamefactorsbearupontheproprietyofaState's
exercisingjurisdictionoveralegaldispute.Attheminimum,thedecisionthatitisfairtobind
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adefendantbyaState'slawsandrulesshouldprovetobehighlyrelevanttothefairnessof
permittingthatsameStatetoacceptjurisdictionforadjudicatingthecontroversy.
Furthermore,Ibelievethatpracticalconsiderationsargueinfavorofseekingtobridgethe
distancebetweenthechoiceoflawandjurisdictionalinquiries.Evenwhenacourtwould
applythelawofadifferentforum,[Footnote2/3]asageneralrule,itwillfeelless
knowledgeableandcomfortableininterpretation,andlessinterestedinfosteringthepolicies
ofthatforeignjurisdiction,thanwouldthecourtsestablishedbytheStatethatprovidesthe
applicablelaw.See,e.g.,GulfOilCo.v.Gilbert, 330U.S.501,330U.S.509(1947)
Restatement313,p.347Traynor,IsThisConflictReallyNecessary?,37TexasL.Rev.
657,664(1959).Obviously,suchchoiceoflawproblemscannotentirelybeavoidedina
diverselegalsystemsuchasourown.Nonetheless,whenasuitor
Page433U.S.226
seekstolodgeasuitinaStatewithasubstantialinterestinseeingitsownlawappliedto
thetransactioninquestion,wecouldwiselyacttominimizeconflicts,confusion,and
uncertaintybyadoptingaliberalviewofjurisdiction,unlessconsiderationsoffairnessor
efficiencystronglypointintheoppositedirection.
Thiscaseisnotonewhere,inmyjudgment,thispreferenceforjurisdictionisadequately
answered.CertainlynothingsaidbytheCourtpersuadesmethatitwouldbeunfairto
subjectappellantstosuitinDelaware.Thefactthattherecorddoesnotrevealwhetherthey
"setfoot"orcommitted"act[s]relatedto[the]causeofaction"inDelaware,anteat433U.S.
213,isnotdecisive,forjurisdictioncanbebadstrictlyonoutofstateactshaving
foreseeableeffectsintheforumState.E.g.,McGeev.InternationalLifeIns.Co.,supra
Grayv.AmericanRadiator&StandardSanitaryCorp.,supraRestatement37.Ihavelittle
difficultyinapplyingthisprincipletononresidentfiduciarieswhoseallegedbreachesoftrust
aresaidtohavesubstantialdamagingeffectonthefinancialpostureofaresident
corporation.[Footnote2/4]Further,Icannotunderstandhowtheexistenceofminimum
contactsinaconstitutionalsenseisatallaffectedbyDelaware'sfailurestatutorilyto
expressaninterestincontrollingcorporatefiduciaries.Anteat433U.S.214.Tomethis
simplydemonstratesthatDelaware
Page433U.S.227
didnotelecttoassertjurisdictiontotheextenttheConstitutionwouldallow.[Footnote2/5]
NorwouldIviewascontrollingorevenespeciallymeaningfulDelaware'sfailuretoexact
fromappellantstheirconsenttobesued.Anteat433U.S.216.Oncewehaverejectedthe
jurisdictionalframeworkcreatedinPennoyerv.Neff,Iseenoreasontorestjurisdictionona
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fictionaloutgrowthofthatsystemsuchastheexistenceofaconsentstatute,expressedor
implied.[Footnote2/6]
I,therefore,wouldapproachtheminimumcontactsanalysisdifferentlythandoestheCourt.
Crucialtomeisthefactthatappellants[Footnote2/7]voluntarilyassociatedthemselves
withthe
Page433U.S.228
StateofDelaware,"invokingthebenefitsandprotectionsofitslaws,"HansonvDenckla,
357U.S.at357U.S.253InternationalShoeCo.v.Washington,326U.S.at326U.S.319,
byenteringintoalongtermandfragilerelationshipwithoneofitsdomesticcorporations.
Theytherebyelectedtoassumepowersandtoundertakeresponsibilitieswhollyderived
fromthatState'srulesandregulations,andtobecomeeligibleforthosebenefitsthat
Delawarelawmakesavailabletoitscorporations'officials.E.g.,Del.CodeAnn.,Tit.8,143
(1975)(interestfreeloans)145(1975ed.andSupp.1976)(indemnification).Whileitis
possiblethatcountervailingissuesofjudicialefficiencyandthelikemightclearlyfavora
differentforum,theydonotappearonthemeagerrecordbeforeus[Footnote2/8]and,of
course,weareconcernedsolelywith"minimum"contacts,notthe"best"contacts.Ithusdo
notbelievethatitisunfairtoinsistthatappellantsmakethemselvesavailabletosuitina
competentforumthatDelawaremightcreateforvindicationofitsimportantpublicpolicies
directlypertainingtoappellants'fiduciaryassociationswiththeState.
[Footnote2/1]
Indeed,theCourt'sdecisiontoproceedtotheminimumcontactsissuetreatsDelaware's
sequestrationstatuteasifitweretheequivalentofRhodeIsland'slongarmlaw,which
specificallyauthorizesitscourtstoassumejurisdictiontothelimitpermittedbythe
Constitution,R.I.Gen.LawsAnn.933(1970),therebynecessitatingjudicialconsideration
ofthefrontiersofminimumcontactsineverycasearisingunderthatstatute.
[Footnote2/2]
TheMullaneCourtheld:
"[T]heinterestofeachstateinprovidingmeanstoclosetruststhatexistbythegraceofits
lawsandareadministeredunderthesupervisionofitscourtsissoinsistentandrootedin
customastoestablishbeyonddoubttherightofitscourtstodeterminetheinterestsofall
claimants,residentornonresident,provideditsprocedureaccordsfullopportunitytoappear
andbeheard."
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339U.S.at339U.S.313.
[Footnote2/3]
Inthiscase,therecorddoesnotinformuswhetheranactualconflictislikelytoarise
betweenDelawarelawandthatofthelikelyalternativeforum.Pursuanttothegeneralrule,I
assumethatDelawarelawprobablywouldobtainintheforeigncourt.Restatement309.
[Footnote2/4]
Irecognize,ofcourse,thatidentifyingacorporationasaresidentofthecharteringStateis
tobuilduponalegalfiction.Inmanyrespects,however,thelawactsasifstatecharteringof
acorporationhasmeaning.E.g.,28U.S.C.1332(c)(fordiversitypurposes,acorporation
isacitizenoftheStateofincorporation).And,ifanything,theproprietyoftreatinga
corporationasaresidentoftheincorporatingStateseemstomeparticularlyappropriatein
thecontextofashareholderderivativesuit,fortheStaterealisticallymayperceiveitselfas
havingadirectinterestinguaranteeingtheenforcementofitscorporatelaws,inassuring
thesolvencyandfairmanagementofitsdomesticcorporations,andinprotectingfromfraud
thoseshareholderswhoplacedtheirfaithinthatstatecreatedinstitution.
[Footnote2/5]
Infact,itisquiteplausiblethattheDelawareLegislatureneverfelttheneedtoassertdirect
jurisdictionovercorporatemanagerspreciselybecausethesequestrationstatuteheretofore
hasservedasasomewhatawkwardbuteffectivebasisforachievingsuchpersonal
jurisdiction.See,e.g.,HughesToolCo.v.FawcettPublications,Inc.,290A.2d693,695
(Del.Ch.1972):
"Sequestrationismostfrequentlyresortedtoinsuitsbystockholdersagainstcorporate
directorsinwhichrecoveriesaresoughtforthebenefitofthecorporationonthegroundof
claimedbreachesoffiduciarydutyonthepartofdirectors."
[Footnote2/6]
Admittedly,whenoneconsentstosuitinaforum,hisexpectationisenhancedthathemay
behaledintothatState'scourts.Tothisextent,Iagreethatconsentmayhavebearingon
thefairnessofacceptingjurisdiction.Butwhateveristhedegreeofpersonalexpectation
thatisnecessarytowarrantjurisdictionshouldnotdependontheformalityofestablishinga
consentlaw.Indeed,ifone'sexpectationsaretocarrysuchweight,thenappellantshere
mightbefairlychargedwiththeunderstandingthatDelawarewoulddecidetoprotectits
substantialintereststhroughitsowncourts,fortheycertainlyrealizedthat,inthepast,the
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sequestrationlawhasbeenemployedprimarilyasameansofsecuringtheappearanceof
corporateofficialsintheState'scourts.N.5,supra.Evenintheabsenceofsuchastatute,
however,thecloseandspecialassociationbetweenastatecorporationanditsmanagers
shouldapprisethelatterthattheStatemayseektoofferaconvenientforumforaddressing
claimsoffiduciarybreachoftrust.
[Footnote2/7]
WhetherthedirectorsoftheoutofstatesubsidiaryshouldbeamenabletosuitinDelaware
mayraiseadditionalquestions.Itmaywellrequirefurtherinvestigationintosuchfactorsas
thedegreeofindependenceintheoperationsofthetwocorporations,theinterrelationship
ofthemanagersofparentandsubsidiaryintheactualconductunderchallenge,andthe
reasonableexpectationsofthesubsidiarydirectorsthattheparentStatewouldtakean
interestintheirbehavior.Cf.UnitedStatesv.FirstNat.CityBank, 379U.S.378,379U.S.
384(1965).Whilethepresentrecordisnotilluminatingonthesematters,itappearsthatall
appellantsactedlargelyinconcertwithrespecttotheallegedfiduciarymisconduct,
suggestingthatoveralljurisdictionmightfairlyrestinDelaware.
[Footnote2/8]
And,ofcourse,ifapreferableforumexistselsewhere,aStatethatisconstitutionallyentitled
toacceptjurisdictionnonethelessremainsfreetoarrangeforthetransferofthelitigation
underthedoctrineofforumnonconveniens.See,e.g.,Broderickv.Rosner, 294U.S.629,
294U.S.643(1935)GulfOilCo.v.Gilbert, 330U.S.501,330U.S.504(1947).
Disclaimer:OfficialSupremeCourtcaselawisonlyfoundintheprintversionoftheUnited
StatesReports.Justiacaselawisprovidedforgeneralinformationalpurposesonly,and
maynotreflectcurrentlegaldevelopments,verdictsorsettlements.Wemakenowarranties
orguaranteesabouttheaccuracy,completeness,oradequacyoftheinformationcontained
onthissiteorinformationlinkedtofromthissite.Pleasecheckofficialsources.
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