Territorial Power Over Property

Property-Based Jurisdiction

Territorial Power Over Property

A state court's power to adjudicate once depended on what the court could physically reach. That territorial theory, traced to Pennoyer v. Neff, is the baseline against which Shaffer v. Heitner measures property-based jurisdiction. Under it, state authority to adjudicate rested on the state's power over either persons or property within its borders.¹ Two principles carried the theory. The first was "that every State possesses exclusive jurisdiction and sovereignty over persons and property within its territory"; the second was "that no State can exercise direct jurisdiction and authority over persons or property without its territory."²

Together the two principles gave a plaintiff very different prospects against a nonresident, depending on whether the plaintiff aimed at the person or at property. A nonresident who could not be found in the state could not be sued there. But because the state where property sat was considered to have exclusive sovereignty over it, a proceeding against that property could go forward regardless of where the owner lived.³ Because a state had jurisdiction over a nonresident's property situated within its limits, its courts could inquire into that nonresident's obligations.⁴ The two sources of power survive in the vocabulary of judgments: a judgment in personam rests on power over a person, a judgment in rem on power over a thing.⁵

Pennoyer itself shows the theory at work. Mitchell sued Neff in an Oregon state court to collect attorney's fees. Neff was a nonresident, but an Oregon statute allowed service by publication on nonresidents who owned property in the state, and Mitchell used that procedure to bring Neff before the court. Mitchell obtained a judgment for the fees, and Neff's Oregon land was sold at a sheriff's sale to realize on it. Pennoyer held the land under the deed from that sale. Neff then brought an ejectment action in federal court, which refused to recognize the Oregon judgment and awarded him the land.⁶

The Oregon judgment failed for want of power over both the person and the property. Neff had not been served with process in Oregon, had not consented to jurisdiction, and had not appeared, so the judgment could not rest on power over his person.⁷ It could not rest on power over his land either, because the land had not been brought before the court by attachment or any other procedure before judgment. With the judgment invalid, the sheriff's sale passed no title, and Neff regained his land.⁸ A seizure at the outset would have changed the analysis. Neff's ownership of Oregon land might have given the state power to adjudicate rights to that land, even though his dispute with Mitchell had nothing to do with it, if the court had attached the land and made it the subject of the action before judgment.⁹ The Court did not require the seized property to relate to the plaintiff's claim.¹⁰

The Court insisted on attachment before judgment because of what the court's power was built on. Jurisdiction to determine a nonresident's obligations was "only incidental to its jurisdiction over the property," so it could not "depend upon facts to be ascertained after it has tried the cause and rendered the judgment." A judgment void when rendered stays void, even if property is later found or acquired; it cannot be valid if property turns up and void if none does.¹¹ The contrary rule would make a judgment's validity turn on whether the defendant sold the property before the levy, and that would "introduce a new element of uncertainty in judicial proceedings."¹²

A plaintiff who attached property at the outset still received only what that property could pay. If the defendant defaulted, the judgment was limited to the value of the attached property, because that was the limit of the state's sovereign power, and other states gave the judgment no full faith and credit beyond that amount. The plaintiff had to begin an entirely new action to obtain further relief.¹³

Notice followed the same physical-control logic. A state's process could not reach beyond its borders, so after Pennoyer the Court held that due process required no effort to give a property owner personal notice that his property was involved in an in rem proceeding.¹⁴ Publication sufficed for in rem and quasi in rem jurisdiction, whose personal liability was limited. Only some form of personalized service could support a full in personam judgment against a nonconsenting nonresident.¹⁵ That rule describes the old baseline only. Later decisions made clear that Mullane's "reasonably calculated" test applies even in true in rem matters, and that test remains the constitutional benchmark for sufficient notice.¹⁶

International Shoe Co. v. Washington then changed the test for personal jurisdiction. The Court rejected presence as a prerequisite and held that due process requires only that a defendant not present in the forum "have certain minimum contacts with it such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.'"¹⁷ The new standard supplemented Pennoyer rather than replacing it. Where jurisdiction rested on domicile, the two approaches reached the same result, but International Shoe allowed jurisdiction where Pennoyer would not.¹⁸ That raised the reverse question: whether an exercise of jurisdiction permissible under the traditional approach could survive if it did not fit the International Shoe standard.¹⁹ Attachment jurisdiction posed that question sharply. A plaintiff seeking a personal judgment against a nonresident now had to show contacts between the defendant and the forum, while a plaintiff who found any attachable asset of the same nonresident in the state could sue on an unrelated claim without showing contacts at all.²⁰ The sections below follow how the Court answered.