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Law School Case Brief

Shaffer v. Heitner - 433 U.S. 186, 97 S. Ct. 2569 (1977)

Rule:

The relationship among a defendant, the forum, and the litigation, rather than the mutually exclusive sovereignty of the states is the central concern of the inquiry into the constitutionality of an exercise of personal jurisdiction.

Facts:

A nonresident of Delaware who owned stock in a corporation that 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 nonresident's motion under 10 Del C. 366, the court sequestered certain property, primarily stock, of a number of the nonresident individual defendants. 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 this case was quasi in rem and founded on the presence of stock in the Delaware.

Issue:

Whether the minimum contacts test of International Shoe should have been applied to assertions of in rem as well as in personam jurisdiction.

Answer:

Yes.

Conclusion:

On appeal, the United States Supreme Court reversed the judgment. 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 defendants' seized property did not have sufficient contacts with the state to support Delaware's assertion of jurisdiction over defendants. The Court further held that defendants 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.

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