P (non-resident of DE) owned one share of stock in Greyhound, a business incorporated in DE.
P filed a shareholder's derivative suit against Greyhound and its board of directors (Ds) claiming that they should be held liable for letting Greyhound lose in a private antitrust lawsuit.
The activities that led to that antitrust suit took place in OR.
P also filed motion for an order of sequestration of the DE property of the Ds. P seized 82k shares of Greyhound stock even though none of the stock certificates were physically in DE.
Ds moved to vacate the sequestration order and quash service of process.
Procedural History:
Lower court found for P.
DE Supreme Court affirmed, found for P.
SCOTUS reversed, found for D, no jurisdiction.
Issues:
Can a state obtain personal jurisdiction over a party if that party owns property in that state?
Is quasi in rem jurisdiction subject to the "minimum contacts" analysis outlined in International Shoe?
Holding/Rule:
A state cannot obtain personal jurisdiction over a party based on the single fact that the party owns property in that state.
Quasi in rem jurisdiction is subject to the "minimum contacts" analysis outlined in International Shoe.
Reasoning:
A state's interest in assuring the marketability of property within its borders and in providing a procedure for resolution of disputes about that property would support jurisdiction.
Property in a state may favor jurisdiction in cases where the suit arises out of ownership and rights relating to that property.
In rem jurisdiction requires "minimum contacts" analysis as well.
The only role played by the property in this case is to provide the basis for bringing the Ds into court. That property is not the subject matter of the litigation or the underlying cause of action.
One who purchases shares of stock in a company cannot reasonably foresee being haled into court in the state where the company is incorporated.
Dissent:
Ds voluntarily associated with DE and invoked the benefits and protections of the state through their relationship with one of its domestic corporations.
We are only concerned with "minimum" not "best contacts".
Notes:
Put Pennoyer to rest. International Shoe takes over.
There is no reason for the artifice of quasi in rem jurisdiction since Int'l Shoe does it much nicer.
