CIVIL PROCEDURE CLASS 35

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CIVIL PROCEDURE CLASS 35

• Professor Fischer
• Columbus School of Law
• The Catholic University of America
• November 15, 2002

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WRAP-UP OF LAST CLASS

• We discussed Shaffer v. Heitner, a case
  concerning the extent to which personal
  jurisdiction can be validly based on the presence
  of Ds property within the forum state.

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WHAT WILL WE DO TODAY

• Continue with personal jurisdiction unit.
• A few more words on Shaffer v. Heitner
• Consider the Burnham case, which concerns extent
  to which personal jurisdiction can be validly
  based solely on personal service within the form
  state (tag jurisdiction, or transient
  jurisdiction)

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Shaffer v. Heitner

• Shareholder derivative suit brought by Heitner
  (shareholder) against 28 defendants who were
  present or former officers/directors of Greyhound
  Corp.

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Shaffer v. Heitner

• Greyhound (AZ, DE)
• Judgment against Greyhound in antitrust suit/fine
  in criminal contempt action for activities in OR
• Heitner not resident in DE
• How were Ds notified about the suit?

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Shaffer

• What was the legal basis for the Delaware courts
  assertion of jurisdiction over the D? (in
  personam? In rem? Quasi in rem?)
• Quasi in rem, pursuant to 2 Delaware statutes

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2 Delaware Statutes

• 1. SEQUESTRATION STATUTE Del. Code Ann., Tit. 10
  366 (1950)- permitted seizure of property
  belonging to a non-resident D as the basis to
  compel the Ds appearance in litigation.
• 2. SITUS OF OWNERSHIP STATUTE Del. Code Ann.,
  Tit. 8 169 (1975) Delaware is the situs of
  ownership for all stock in DE corporation
  regardless of where the certificates ae located.

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Challenging DE jurisdiction

• 21 Ds whose property was seized challenge
  jurisdiction on the basis that the ex parte
  sequestration procedure did not accord them due
  process and also did not have enough contacts
  with DE to satisfy International Shoe test.
• DE courts uphold jurisdiction
• U.S. Supreme Court only considers Intl Shoe
  issue. Does the U.S. Supreme Court affirm or
  reverse the Delaware Supreme Courts ruling on
  jurisdiction? Why

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Justice Marshall opinion of the Court

• Intl Shoe standard applies to quasi in rem
  jurisdiction.

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Justice Marshall opinion of the Court

• Traditional notions of fair play and substantial
  justice can be as readily offended by the
  perpetuation of ancient forms that are no longer
  justified as by the adoption of new procedures
  that are inconsistent with the basic values of
  our constitutional heritage

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Justice Marshall opinion of the Court

• The fiction that an assertion of jurisdiction
  over property is anything but an assertion of
  jurisdiction over the owner of property supports
  an ancient form without substantial modern
  justification. Its continued acceptance would
  serve only to allow state-court jurisdiction that
  is fundamentally unfair to the defendant. We
  therefore conclude that all assertions of
  state-court jurisdiction must be evaluated
  according to the standards set forth in
  International Shoe and its progeny.

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On the Facts

• Heitner claims that DE has a strong interest in
  managing a DE corporation.
• But Marshall says that the DE legislature has not
  endorsed this view the sequestration statute
  bases jurisdiction only on the presence of
  property in the state.
• Moreover, Heitner hasnt shown DE is a fair forum
  for this dispute only that DE law should govern
  obligations of officers to Greyhound and
  stockholders.

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Legislative Response to Shaffer

• DE enacts a statute (Del.St. Ti. 10 3334) by
  accepting appointment as trustee, director,
  member of DE corporation, consent to jurisdiction
  in the DE state courts

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Justice Powell

• Concern with overbreadth agrees with Marshalls
  assessment of sequestration statute in this case
  but reserves judgment about whether other kinds
  of property, especially real property, located in
  DE could provide necessary contacts to subject
  non-resident D to jurisdiction of DE courts.

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Justice Brennan

• Why does he dissent from Part IV of the Courts
  opinion?

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AFTER SHAFFER

• Shaffers broad statement We . . . Conclude
  that all assertions of state-court jurisdiction
  must be evaluated according to the standards set
  forth in International Shoe, raised questions
  remained about the validity of the traditional
  categorical rule that jurisdiction over a
  non-resident defendant was lawful if based solely
  on physical presence within the jurisdiction,
  however transitory the presence or how unrelated
  it was to the lawsuit against the defendant.

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Burnham v. Superior Court of California

• According to Francie Burnham, her husband Dennis
  broke a promise to her that he had made in July,
  1987. What was this promise?

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Burnham v. Superior Court of California

• In July 1987, Francie and Dennis agreed that
  Francie would file for divorce in CA on the
  grounds of irreconciliable differences.
• But Dennis filed for divorce on the grounds of in
  NJ in Oct. 1987 on the grounds of desertion.
• Dennis did not serve process on Francie. What
  would you need to know to determine whether, if
  Dennis had served Francie with process, the NJ
  court would have had jurisdiction?

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Meanwhile, in California.

• Francie sues Dennis for divorce in CA state court
  in Jan. 1988, presumably on irreconciliable
  differences ground
• Where and how is Dennis served with process?

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Paying a Price for Being a Good Dad?

• Served at Francies house when returning child
  after a short weekend visit
• Dennis contests the jurisdiction of the CA
  court. On what basis? Do the CA courts agree
  with Dennis?

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Burnham Issue for Decision By the U.S. Supreme
Court

• Court must decide whether the Due Process clause
  of the XIV Amendment prohibits the CA courts from
  exercising jurisdiction over a non-resident who
  was personally served with process while
  temporarily visiting CA, in a lawsuit unrelated
  to his activities in CA.
• How does the Court rule on this issue?

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Burnham

• All of the justices agree that the CA court
  could constitutionally assert jurisdiction over
  Burnham.
• They greatly diverge in their reasoning, however.

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Role-Playing In a Supreme Court Conference Are

• Justice Scalia
• Justice Brennan
• Justice White
• Justice Stevens
• Please explain your reasoning in Burnham.
• Next, defend your reasoning, showing why you
  think the approach of your brethren is wrong.

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Justice Scalia Textualist, Traditionalist
Jurisprudence

• In general, traditional theory of transient
  jurisdiction (based on presence in the forum
  state) does not violate due process.
• Joined by Justice Kennedy, Rehnquist and White
  (joins in I, Iia, IIb and IIC)

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Justice Scalia Importance of Tradition

• Jurisdiction over a person within a states
  borders is one of the continuing traditions of
  our legal system that defines due process
  standard of traditional notions of fair play and
  substantial justice and its validation is its
  pedigree
• Transient jurisdiction need not be analyzed under
  the minimum contacts test of International Shoe
  because International Shoe developed as a
  substitute for personal service and it would thus
  make no logical sense to subject personal service
  to the International Shoe test.
• All doesnt meanall in Shaffer (p. 746)

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What If Scalia Was On the Court forShaffer

• Would Scalias approach have led to a different
  result in Shaffer?

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Justice Brennans Concurrence

• Joined By Marshall, Blackmun, OConnor

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Justice Brennan No Categorical Rules, Concern
With Fairness

• Although personal service in the forum state is
  generally sufficient as a valid basis for
  jurisdiction over a non-resident defendant, there
  is no categorical rule to this effect.
• Transient jurisdiction must be subjected to the
  minimum contacts test of International Shoe.
  That is All means All. So you need to assess
  relevant state service rule.
• Tradition is a relevant factor in determining
  whether the International Shoe test is met, but
  it is not dispositive.

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Bennans

• How does Brennan weigh benefits and burdens on
  transient defendants?

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Justice Whites Concurrence

• What is the basis for Whites concurrence?

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Justice Whites Concurrence Common Sense Should
Prevail

• Transient Jurisdiction rule has been so widely
  accepted throughout this country that I could not
  possibly stike it down.
• No showing that rule so arbitrary and lacking in
  common sense that it would violate due process in
  every case. Unless that could be shown, should
  not allow challenges in individual cases a
  least where presence in the forum is intentional.

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Stevens Concurrence An Easy Case

• Why does Stevens think this is an easy case?
• Why doesnt he join in the opinions of Justice
  Scalia or Justice Brennan

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Hypos What Would Be Scalia and Brennans
Approach?

• What if Mr. B did not visit CA, but was served
  while only in CA for 15 minutes while changing
  planes at LAX airport?
• What Mr. B never went to CA, but, on a business
  trip to Hawaii was served onboard the plane as it
  flew over CA?
• What if Mrs. B. tricked Mr. B by falsely telling
  him that the kids were sick and served him when
  he came to CA to see them?
• What if Mrs. B served Mr. B while he was in CA
  testifying as a witness in another unrelated
  action brought by P against D?