Concept
What Survives Shaffer
In rem and quasi in rem jurisdiction
What Survives Shaffer
Shaffer v. Heitner held that every assertion of state-court jurisdiction, quasi in rem included, must satisfy the minimum-contacts standard of International Shoe. It also held that a defendant’s property in the forum does not by itself supply those contacts when the dispute has nothing to do with the property.1 The Delaware seizure failed because the Greyhound stock was unrelated to the claim and the directors had no other tie to the state. The Court did not, however, repeal property-based jurisdiction wholesale. It observed that jurisdiction over many types of actions that are or might be brought in rem would survive a holding that every assertion of jurisdiction must meet the International Shoe standard.2
Four uses of property survive in some form, and they rest on different authority, a difference an exam answer should show. The first rests on the Court’s own reasoning: property supplies a contact when it is the subject of the dispute or when the claim arises from the defendant’s ownership of it. The second rests on a footnote: a plaintiff who already holds a judgment may reach the debtor’s property to collect it. The third rests on separate opinions, in which Justices Powell and Stevens left room for jurisdiction over real estate. The fourth rests on a footnote that reserves whether property suffices when the plaintiff has no other forum. Call the first the Court’s reasoning, the second a footnoted limit on the holding, the third a concurring reservation, and the fourth an open question.
One principle runs through all four. Property can serve as a contact tied to the claim, or as the object of enforcement once a court with power has fixed liability. It cannot serve as a free-standing source of jurisdiction over a claim that has no relationship to it.
Claims Tied to Property
Shaffer kept a role for property as a source of contacts. The Court explained that property in the forum can supply ties among the forum, the defendant, and the litigation, and it named two settings in which it does.3 In the first, claims to the property itself are the source of the controversy between plaintiff and defendant, and there, the Court said, “it would be unusual for the State where the property is located not to have jurisdiction.” In the second, the defendant’s ownership is conceded but the cause of action relates to rights and duties growing out of that ownership, as in a suit for injury on the land of an absentee owner.4
The first setting works because one fact does double duty. The defendant’s claim to land in the state is the contact, and the controversy over that claim is the litigation. Fairness follows from three considerations the Court listed. A defendant who claims property in the state expects to benefit from the state’s protection of that interest. The state has strong interests in the marketability of property within its borders and in a peaceful way to resolve disputes over its possession. And the records and witnesses needed to decide the dispute will likely be found there.5 The contacts analysis already supplies everything the property label would add, so removing property as a free-standing basis for jurisdiction leaves these actions standing.
Two of the three forms from earlier in this chapter belong here. The Court’s own footnote places true in rem actions and the first type of quasi in rem proceeding in this category.6 A probate or quiet-title decree concerns a thing in the forum, and a type I suit between rival claimants to the same land concerns a claim to that thing. The link between claim and property that the contacts analysis requires is therefore built into the cause of action, and the inquiry will almost always confirm what the label already indicated.7 The words “almost always” matter. Another footnote cautions that in some circumstances the presence of property will not support the inference of a contact, and it points to a chattel atypically removed to the forum.8 The inference runs from the defendant’s claim to the property, which normally shows an expectation of benefiting from the state’s protection,9 and it weakens when the property reached the state by an unusual route.
The second setting raises a classification puzzle. A plaintiff injured on an absentee owner’s land does not claim the land. Title is conceded and the plaintiff wants damages, so the suit looks like an attachment action and not like a true in rem or type I proceeding. It survives because the claim grows out of the duties of ownership, which ties the land closely to the claim, and because the state has a strong interest in the safety of people within its borders.10 The idea is old. Courts long treated nonresident owners as subject to personal jurisdiction on claims arising from their in-state property, and a nonresident landlord could be sued for failing to keep the premises safe.11 Today the question is an ordinary specific-jurisdiction question. A court in an in rem or quasi in rem action is in effect exercising jurisdiction over the defendant personally, so the plaintiff must show that the defendant would be subject to specific or general jurisdiction in the forum.12 Specific jurisdiction supplies it here. The in-state property is the contact and the claim arises out of it, so the owner need not have set foot in the state.
An exam stem that says the defendant owns land in the forum invites two opposite mistakes, and asking what the lawsuit is about cures both.
The first mistake treats every attachment as dead after Shaffer. The flooded fields refute it, because when a claim grows out of the property, the property is the contact. The second mistake treats ownership of in-state property as enough by itself. The invoice suit refutes that, because the presence of property alone does not support jurisdiction over a claim unrelated to it.13 A stem therefore has to supply a link between claim and property, since the property’s location supplies none.
Admiralty follows the same logic. An in rem action against a vessel enforces a maritime lien, a claim that runs against the vessel itself, so the link between claim and property is part of the cause of action and the action stands on firmer ground. Attachment of a nonresident’s property under Supplemental Rules B and E, available when the defendant is not “found within the district,” requires no relationship between the property and the claim, and it appears more constitutionally vulnerable for that reason.14
Enforcing Existing Judgments
A footnote in Shaffer points to a second use of property-based jurisdiction. Once a court of competent jurisdiction has determined that the defendant is a debtor of the plaintiff, the Court wrote, “there would seem to be no unfairness” in allowing an action to realize on that debt in a state where the defendant has property, whether or not that state would have jurisdiction to determine the existence of the debt as an original matter.16 The sentence is tentative, and the Delaware facts did not require it, so describe it as a recognized limit on the holding. Its logic has two halves. The fairness concern behind Shaffer disappears, and without the exception the Full Faith and Credit Clause would lose much of its force.
The footnote makes sense once you separate two questions that one lawsuit usually bundles. The first is whether the defendant owes the plaintiff anything. The second is whether the plaintiff can reach assets to collect what is owed. Shaffer’s holding answered the first: a state with no tie to the defendant or the claim may not decide liability merely because unrelated property of the defendant lies within its borders. An action to realize on an existing judgment asks only the second, because the debt has already been fixed. That is why the enforcing state does not need power to decide the debt as an original matter.17
The fairness half explains why the second question can be treated differently. The contacts requirement protects a defendant from being forced to defend a claim in a forum with which neither the defendant nor the dispute has any real connection. A debtor sued in a state that met that standard has already received the protection it promises. The debtor was sued where it could fairly be sued, could contest liability there, and lost. The enforcing state asks only that the debtor answer for a debt a fair process has established, so no fairness interest remains for the contacts requirement to guard.18
The necessity half concerns what would happen without the exception. A judgment is only paper until someone reaches assets to satisfy it, and a debtor chooses where its assets sit without regard to where it can be sued. If a state could act on assets within its borders only when the debtor had minimum contacts there, a debtor could stay judgment-proof by keeping property in states where it has none. The Full Faith and Credit Clause, which makes one state’s valid judgment enforceable in the others, would then be nearly useless for interstate debt collection.19 In practice the creditor proceeds in two steps. It first sues where the debtor’s contacts satisfy the standard and wins a personal judgment. Finding no reachable assets there, it then sues on the judgment in a state where the debtor holds property and reaches that property.20
The footnote’s phrase “a court of competent jurisdiction” limits the exception. The reasoning assumes that a forum with power to decide the debt has decided it, and a judgment that itself rested on the kind of unrelated-property attachment Shaffer rejected would not meet that assumption.21
A student who sees an unrelated bank account in the forum instinctively answers that Shaffer bars the suit. That answer is right for one creditor and wrong for another, and the dividing fact is whether a court with proper jurisdiction has already fixed the debt.
The account, the state, and the debtor are identical in both scenes, and only the work asked of the second court differs. In the first, State B would decide liability on the strength of unrelated property, the exercise Shaffer forbids. In the second, liability has been decided elsewhere, and State B applies its collection process to an established debt. A student who treats the account as dispositive in either direction has overlooked that variable.
The enforcement use rests on firmer ground than the two reservations that follow. Jurisdiction over real estate depends on suggestions in concurring opinions, and jurisdiction where no other forum exists depends on a question the Court left open. Because enforcement appears in a footnote, an exam answer should present it as a recognized limit on Shaffer’s holding and give the reasoning: liability has been fixed and only collection remains.22
Real Property Reservations
Justice Powell joined the Court’s opinion in Shaffer, agreeing that the principles of International Shoe should govern in rem assertions of jurisdiction as well as in personam ones. He nonetheless would “explicitly reserve judgment” on whether ownership of “some forms of property whose situs is indisputably and permanently located within a State” may, “without more,” supply the contacts needed to subject a defendant to jurisdiction in the state “to the extent of the value of the property.”24 Real property was his example. Preserving quasi in rem jurisdiction for land, he suggested, “arguably would avoid the uncertainty of the general International Shoe standard” without significant cost to fair play and substantial justice.25
Justice Stevens concurred only in the judgment. He agreed with Justice Powell that the opinion should not be read to invalidate quasi in rem jurisdiction “where real estate is involved,” and he added that his uncertainty about how far the opinion reaches, together with his fear that it decided much more than the case required, was why he would not join it.26
Neither statement is a holding. The Court’s holding is that the contacts standard governs property-based jurisdiction and that property alone, unrelated to the dispute, does not satisfy it, and that holding contains no exception for land.27 Justice Powell’s reservation qualifies his own joinder and records a question he declined to decide, while Justice Stevens declined to join the opinion at all. The two concurrences establish only that the question is open. An answer should say that attachment of land on an unrelated claim may survive, and should not say that it does.
The reservation has a narrow target. When the claim concerns the land itself or grows out of owning it, the property is already a contact tied to the dispute, and the ordinary contacts analysis decides the case, as the preceding subsection showed. The reservation matters only when the plaintiff attaches land the defendant owns in the forum and sues on something unrelated to it, which is the quasi in rem type II form that Shaffer curtailed. Justice Powell’s wording reaches beyond land, since he reserved judgment on “some forms of property,” but real estate is the only form he named and the only one Justice Stevens mentioned in that connection.28
The two concurrences give different reasons, aimed at different parts of the fairness inquiry. Justice Powell’s reason is administrative. A rule asking only whether the defendant owns land in the state yields a quick factual answer where the contacts inquiry must be litigated case by case, and he thought the price in fairness would be small. His own wording suggests why, since the reservation reaches jurisdiction only to the extent of the property’s value, so the defendant’s exposure would stop at the land. Justice Stevens’s reason is notice. Due process protects against judgments rendered without notice, and notice includes fair warning that an activity may subject a person to the jurisdiction of a foreign sovereign. A person who acquires real estate in another state knowingly assumes some risk that the state will exercise power over that property, and the contact, though minimal, makes that risk predictable. His list of such acts also includes opening a bank account in another state, so his reasoning turns on the owner’s own deliberate step into the state, but the quasi in rem jurisdiction he would preserve is the kind that involves real estate.29
Land fits the fair-warning reasoning because the physical world fixes its location and the owner selects that location by buying there. Intangible property has no location of its own, so a legislature can assign it one, and the owner may never learn of the assignment. Delaware did exactly that with the Greyhound stock. It treated the state of incorporation as the situs of stock even though the owner and the custodian of the shares were elsewhere, and in Justice Stevens’s view that rule would impose a duty of inquiry on every purchaser of securities in the national market. A buyer on the open market can hardly be expected to know that the purchase exposes the buyer to suit in a remote forum unrelated to the transaction.30 The unfairness behind the Shaffer result arose mainly with intangibles such as the stock there and the debt in Harris v. Balk, whose situs could lie in the forum without any real connection to it.31
The issue appears on an exam as a stem that attaches a nonresident’s land on an unrelated claim and asks what Shaffer does to the attachment.
The Greyhound shares fall on the other side of Justice Stevens’s line, because a statute, and not the owners’ choice of location, placed them in Delaware.32 The fact that moves the answer is how the property came to be located in the forum. A careful answer states the Court’s rule first: unrelated property alone does not support jurisdiction. It then identifies land as the setting in which Justices Powell and Stevens signaled openness, gives their reasons of permanence and fair warning, and labels the point unresolved. Two errors need avoiding: treating either concurrence as the law, and stretching the reservation to stock or debts, whose situs a legislature or a legal convention can assign.
No Alternative Forum
The fourth use of property rests on a reservation and nothing more. After holding that unrelated property does not by itself support jurisdiction, the Court added a footnote: “This case does not raise, and we therefore do not consider, the question whether the presence of a defendant’s property in a State is a sufficient basis for jurisdiction when no other forum is available to the plaintiff.”34 A court that says it does not consider a question has declined to decide it, so the sentence supplies no rule. It marks a place where the holding might stop, and the idea it points to is sometimes called jurisdiction by necessity.35
The Court left the question alone because the facts did not force it. Heitner was not a plaintiff without a court. Greyhound’s principal place of business was in Arizona and the conduct behind the suit took place in Oregon, so he could presumably have sued the directors in either state without offending International Shoe. Whether an alternative forum exists is one of the factors bearing on fairness,36 and a plaintiff with a fair forum gains nothing from a rule that adds an unfair one, the answer the earlier discussion of certainty and a guaranteed forum drew from those same facts.
The reservation answers a real tension in the reasoning. A creditor who cannot sue in the property’s state ordinarily has a second route: sue where the defendant has the contacts International Shoe requires, win a judgment, and enforce it against assets elsewhere. That route works only if some proper forum exists. If none does, the state holding the property is the only place where anything of the defendant’s can be reached, and a rule barring adjudication there leaves the plaintiff with a claim and no court to hear it. On the other side of the ledger is the old unfairness of hauling a defendant into a state with no tie to the defendant or the dispute. The Court did not have to weigh those costs against each other, because Heitner could avoid the first.
Heitner’s suit sat on the other side of the line. His attached stock and the defendants’ lack of Delaware contacts posed the same kind of problem the creditor faces, yet the necessity argument was unavailable to him because Arizona and Oregon were open. The footnote speaks of a forum that is available, so a plaintiff who finds the other forum costly or distant has not described the reserved situation. The fact that moves the answer is whether any court anywhere could take the case consistently with the contacts standard.
Two features keep the exception unsettled. The Court gave no reasoning for it, only a statement that the question was not before it, and later cases have not developed the idea.37 Commentators describe it as a suggestion in Shaffer that quasi in rem jurisdiction may survive in the unusual case where the plaintiff has no other forum,38 and the courts have struggled since 1977 to decide how much of the old doctrine remains.39 The enforcement use differs, because the Court at least stated why enforcing an established debt is fair. On an exam, state Shaffer’s holding first. Then ask whether any forum with minimum contacts exists, which usually ends the argument. Only then describe necessity as a reserved question that may survive and has not been resolved.