PENNOYER V.

NEFF
Facts:
Marcus Neff ("Neff"), a resident of California, hired John H. Mitchell ("Mitchell"), an Oregon lawyer.
Mitchell subsequently sued Neff before a state court in Oregon to collect $300.00 in unpaid attorney's fees.
Summons were served upon Neff by publication in an Oregon newspaper. Neff failed to appear in court to
defend his interests. Consequently, the court rendered a default judgment against Neff. At the time the
judgment was rendered, Neff did not own any property in Oregon. However, he was eventually granted a
landholding in the said state. To satisfy the judgment, the court ordered the seizure and auction of the
landholding owned by Neff. Sylvester Pennoyer won in the auction. Neff then instituted an action to recover
his property before a federal court in Oregon on the ground that the state court did not acquire jurisdiction
over him.

Issue:
Whether or not the state court acquired jurisdiction over Neff.

Held:
No. Since the suit is one in personam, the service of summons upon the defendant through publication is
not enough for the state court to acquire jurisdiction over him. Moreover, the defendant's property must
have been brought under court custody at the commencement of the suit.

Ratio Decidendi:
In rem and in personam suits distinguished; Substituted service by publication ineffective in actions in
personam. Substituted service by publication is valid only in suits which are in rem in character, or those
actions in which the jurisdiction pertains to the property. However, in suits which are in personam, or those
actions which seek to determine only the personal rights and obligations of the defendant, substituted
service by publication is ineffectual for any purpose. Legal processes within one state cannot be effective in
another state. Neither service by publication within the state nor extra-territorial service will cure this.
Jurisdiction over a non-resident dependent on the presence of his or her property within the forum state. A
state does not have jurisdiction over a non-resident who does not have any property within its territorial
jurisdiction since the court's jurisdiction over the defendant is only incidental to its jurisdiction over the
property. Hence, for a suit against a non-resident to prosper, he or she must have property within the forum
state which must brought under the control of the court at the beginning of the suit. Otherwise, the
judgment is void and cannot be rendered valid thought the subsequent acquisition of property within the
forum state by the defendant. Furthermore, if the n0n-resident's property is not immediately seized, the
defendant could easily frustrate the suit by disposing of the said property.

INTERNATIONAL SHOE V STATE OF WASHINGTON

Facts:
• International Shoe was a Delaware based corporation with a main office in St. Louis, MO. It had
no offices, made no contracts for sale, and did not keep any warehouses of goods in WA.
• International Shoe did have several salesmen employees who lived and sold merchandise for the
company in WA.
• The state of WA sued Shoe in WA court for unpaid contributions to the state's unemployment fund.
• Notice was served to a salesman for the company in WA and via registered mail to the corporation's
headquarters in MO.

Procedural History:
• Lower court found for WA.
• Shoe appealed and lost.
• Shoe appealed to SCOTUS and lost.

Issues:

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 • Can a state impose jurisdiction on a corporation not in the borders of the state?
• Can a corporation's activities in a state make it subject to the jurisdiction of that state?

Holding/Rule:
• If a party has "minimum contacts" in a state, that corporation is subject to the jurisdiction of that
state as long as it does not offend "traditional notions of fair play and substantial justice".
o Test for "minimum contacts" jurisdiction:
• Does the defendant come within the terms of the applicable long-arm statute?
• Does the defendant have "minimum contacts" with the forum state such that the
assertion of jurisdiction would not violate the Due Process Clause?
§ Has the defendant "purposely availed" itself of the privilege of conducting
activities in the forum state, thereby invoking the benefits and protections of
the state's laws?
§ Does the lawsuit arise out of or related to the defendant's purposeful contacts
with the forum or, if it does not, are the defendant's forum contacts so extensive
that no such relationship is necessary?
• Would the exercise of jurisdiction be unfair and unreasonable, taking into account the
interests of the defendant, the forum state, the plaintiff, and other states that may
have an interest in the matter?

Reasoning:
• The corporation enjoyed the protection and benefits from its activities in a state; thus, it must be
subject to the jurisdiction of that state.
• "To the extent that a corporation exercises the privilege of conducting activities within a state, it
enjoys the benefits and protection of the laws of that state. The exercise of that privilege may give
rise to obligations; and, so far as those obligations arise out of or are connected with the activities
within the state, a procedure which requires the corporation to respond to a suit brought to enforce
them can, in most instances, hardly be said to be undue. "

Dissent:
• Black disagreed with the vagueness of the "fair play" clause.

Notes:
• Minimum contacts is not a quantitative measure, but qualitative in nature.
• Contact quality can be measured in terms of its relation to the subject of the lawsuit.
• Matrix in minimum contacts
o Continuous and related - jurisdiction
o Noncontinuous but related - tough jurisdiction
o Continuous but unrelated - tough jurisdiction
o Noncontinuous and unrelated - no jurisdiction

PERKINS V CONSOLIDATED MINING CO.

RULE:
The amount and kind of activities which must be carried on by the foreign corporation in the state of the
forum so as to make it reasonable and just to subject the corporation to the jurisdiction of that state are to
be determined in each case. The corporate activities of a foreign corporation which, under state statute,
make it necessary for it to secure a license and to designate a statutory agent upon whom process may be
served provide a helpful but not a conclusive test. For example, the state of the forum may by statute require
a foreign mining corporation to secure a license in order lawfully to carry on there such functional intrastate
operations as those of mining or refining ore. On the other hand, if the same corporation carries on, in that
state, other continuous and systematic corporate activities as it did here -- consisting of directors' meetings,
business correspondence, banking, stock transfers, payment of salaries, purchasing of machinery, etc. --
those activities are enough to make it fair and reasonable to subject that corporation to proceedings in
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personam in that state, at least insofar as the proceedings in personam seek to enforce causes of action
relating to those very activities or to other activities of the corporation within the state.

FACTS:
A nonresident of Ohio filed suit against several respondents, including an incorporated foreign mining
company. The mining company had been carrying on a limited but continuous and systematic part of its
general business in the state. The foreign company filed a motion to quash on the ground that
the petitioner's cause of action did not arise in Ohio and did not relate to the company's activities there.
The Supreme Court of Ohio sustained the foreign company's motion to quash.

ISSUE:
Can the Due Process Clause precluded Ohio from subjecting a foreign corporation to the jurisdiction of its
courts in an action in personam?

ANSWER:
No

CONCLUSION:
The U.S. Supreme Court held that the company's continuous and systematic in-state activities, including
directors' meetings, business correspondence, banking stock transfers, and payment of salaries, were
enough to make it fair and reasonable to subject the company to proceedings in personam, at least insofar
as the proceedings sought to enforce causes of action related to those very activities or to other activities
within the state. As such, it did not violate federal due process for Ohio to either take or decline jurisdiction
of the company.

SHAFFER V HEITNER
RULE:
Whether due process is satisfied must depend rather upon the quality and nature of the activity in relation
to the fair and orderly administration of the laws which it was the purpose of the due process clause to
insure. That clause does not contemplate that a state may make binding a judgment in personam against
an individual or corporate defendant with which the state has no contacts, ties, or relations.

FACTS:
A nonresident of Delaware, who owned stock in a corporation which was incorporated in Delaware but
which maintained its principal office in Arizona, brought a shareholder's derivative action in the Court of
Chancery for New Castle County, Delaware, naming as defendants the corporation, a wholly owned
subsidiary of the corporation, and 28 present or former officers of one or both corporations. Pursuant to the
plaintiff's motion under 10 Del C 366, the court sequestered certain property, primarily stock, of a number
of the nonresident individual defendants. The defendants contended, inter alia, that they did not have
sufficient contacts with Delaware to sustain the jurisdiction of that state's courts, but the Court of Chancery
ruled that the situs of the stock, which was by Delaware statute considered to be within that state, provided
a sufficient basis for the exercise of quasi in rem jurisdiction by a Delaware Court. On appeal, the Delaware
Supreme Court affirmed, holding that the minimum contacts rule was not applicable since the jurisdiction
in the instant case was quasi in rem and founded on the presence of stock in the state.

ISSUE:
Must a nonresident have minimum contacts with the forum state in order for the state to exercise in rem
jurisdiction?

ANSWER:
Yes.

CONCLUSION:
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The Court held that (1) all assertions of state jurisdiction, including in rem and quasi in rem actions, must
be evaluated according to the minimum contacts standard, and (2) neither the presence of the nonresident
defendants' stock in Delaware nor the fact that the nonresident defendants were officers of a Delaware
chartered corporation, provided the requisite contacts to establish the jurisdiction of Delaware courts.
In support of its ruling, the court held that the minimum contacts test of International Shoe should have
been applied to assertions of in rem as well as in personam jurisdiction. The court noted that appellant's
seized property did not have sufficient contacts with the state to support Delaware's assertion of jurisdiction
over appellants. The court further held that appellants had neither purposefully availed themselves of the
privilege of conducting activities within the state, nor had any reason to expect to be brought before a
Delaware court.

HELICOPTEROS NACIONALES DE COLOMBIA V HALL

RULE:
Even when the cause of action does not arise out of or relate to the foreign corporation's activities in the
forum state, due process is not offended by a state's subjecting the corporation to its in personam jurisdiction
when there are sufficient contacts between the state and the foreign corporation.

FACTS:
A foreign corporation entered into contract negotiations in Texas with decedents' employer to provide
helicopter services. They signed a contract in Peru that provided for decedents' employer to make payments
to the corporation's United States bank account. The corporation did not maintain a place of business in
Texas, but purchased helicopter parts there and sent employees there for training. The decedents'
representatives filed a wrongful death action against the corporation following the decedents' deaths in a
helicopter crash in Peru. The Supreme Court of Texas ruled that the corporation's contacts with the state
were sufficient to allow a state court to assert jurisdiction over the corporation in respondent
representatives' cause of action against the corporation for the wrongful deaths of their decedents, which
did not arise out of, and was unrelated to, the corporation's activities within the state. The foreign
corporation appealed the decision to the Supreme Court of the United States.

ISSUE:
Could a state acquire personal jurisdiction over a foreign corporation where the corporation contracted to
provide services in another country, with some goods purchases and some training in the state?

ANSWER:
No.

CONCLUSION:
The Supreme Court held that the corporation's contacts with the state were not sufficient to subject it to
the state court's in personam jurisdiction. Because the representatives' causes of action for wrongful death
arose out of the crash in Peru, and were not related to the corporation's contacts with the state, and the
corporation's business contacts with the state were not continuous and systematic enough to satisfy the
requirements of the Due Process Clause of the Fourteenth Amendment, the Supreme Court concluded that
the state court lacked personal jurisdiction over the corporation.