Annotation 13 - Fourteenth Amendment
Generally .--Jurisdiction may be defined as the power to create legal interests. In the famous case of Pennoyer v. Neff, 77 the Court enunciated two principles of jurisdiction respecting the States in a federal system. First, ''every State possesses exclusive jurisdiction and sovereignty over persons and property within its territory,'' and, second, ''no State can exercise direct jurisdiction and authority over persons or property without its territory.'' 78 Although these two principles were drawn from the writings of Joseph Story refining the theories of continental jurists, 79 the constitutional basis for them was deemed to be in the due process clause of the Fourteenth Amendment. 80 From these beginnings, the Court developed a complex set of rules defining when jurisdiction--physical power--could be exerted over persons through in personam actions and over things, generally, through actions in rem. 81
In proceedings in personam to determine liability of a defendant, no property having been subjected by such litigation to the control of the court, jurisdiction over the defendant's person is a condition prerequisite to the rendering of any effective decree. 82 That condition is fulfilled, that is, a State is deemed capable of exerting jurisdiction over an individual if he is physically present within the territory of the State, if he is domiciled in the State although temporarily absent therefrom, or if he has consented to the exercise of jurisdiction over him. In actions in rem, however, a State could validly proceed to settle controversies with regard to rights or claims against property within its borders, notwithstanding that control of the defendant was never obtained. Accordingly, by reason of its inherent authority over titles to land within its territorial confines, a State could proceed through its courts to judgment respecting the ownership of such property, even though it lacked a constitutional competence to reach claimants of title who resided beyond its borders. 83 By the same token, probate 84 and garnishment of foreign attachment 85 proceedings, being in the nature of in rem actions for the disposition of property, or quasi in rem, might be prosecuted to conclusion without requiring the presence of all parties in interest. 86
Over a long period of time, the mobility of American society and the increasing complexity of commerce led to attenuation of the second principle of Pennoyer, 87 and beginning with International Shoe Co. v. Washington, 88 the Court established the modern standard of obtaining in personam jurisdiction based upon the nature and the quality of contacts that individuals and corporations have with a State; this ''minimum contacts'' test permits the courts of a State through process to obtain power over out-of-state defendants. In recent cases, the ''minimum contacts'' test has been held applicable to all assertions of jurisdiction, so that in rem and quasi-in-rem proceedings must now be evaluated in the context of the defendant's relationship to the State in which the suit is being brought. 89
Basis for the territorial concept of jurisdiction promulgated in Pennoyer and modified over the years is a two-fold construction of due process: a concern for ''fair play and substantial justice'' involved in requiring defendants to litigate cases against them far from their ''home'' or place of business 90 and, more important, a concern for the preservation of federalism. 91 The Framers, the Court has asserted, while intending to tie the States together into a Nation, ''also intended that the States retain many essential attributes of sovereignty, including, in particular, the sovereign power to try causes in their courts. The sovereignty of each State, in turn, implied a limitation on the sovereignty of all its sister States--a limitation express or implicit in both the original scheme of the Constitution and the Fourteenth Amendment.'' 92 Thus, the federalism principle is preeminent. ''[T]he Due Process Clause 'does not contemplate that a state may make binding a judgment in personam against an individual or corporate defendant with which the state has no contacts, ties, or relations.' . . . Even if the defendant would suffer minimal or no inconvenience from being forced to litigate before the tribunals of another State; even if the forum State has a strong interest in applying its law to the controversy; even if the forum State is the most convenient location for litigation, the Due Process Clause, acting as an instrument of interstate federalism, may sometimes act to divest the State of its power to render a valid judgment.'' 93
In Personam Proceedings Against Individuals .--As has been noted, presence within the State with service of process is sufficient to create personal jurisdiction over an individual. 94 In the case of a resident, absence alone will not defeat the processes of courts in the State of his domicile; domicile alone is deemed to be sufficient to keep him within reach of the state courts for purposes of a personal judgment, whether obtained by means of appropriate, substituted service or by actual personal service on the resident outside the State. 95 However, if the defendant, although technically domiciled therein, has left the State with no intention to return, service by publication, as compared to a summons left at his last and usual place of abode where his family continued to reside, is inadequate, inasmuch as it is not reasonably calculated to give actual notice of the proceedings and opportunity to be heard. 96
With respect to a nonresident, it is clearly established that no person can be deprived of property rights by a decree in a case in which he neither appeared nor was served or effectively made a party. 97 The early cases held that the process of a court of one State could not run into another and summon a party there domiciled to respond to proceedings against him, when neither his person nor his property was within the jurisdiction of the court rendering the judgment. 98 The attenuation of the rule proceeded in steps. Consent was, of course, sufficient to create jurisdiction, even in the absence of any other connection between the litigation and the forum, and for example, the appearance of the defendant for any purpose other than to challenge the jurisdiction of the court was deemed a voluntary submission to the court's power, 99 and even a special appearance may be treated as consensual submission to the court. 100 Constructive consent, therefore, was seized upon as a basis for obtaining jurisdiction, and, with the advent of the automobile, States were permitted, under the fiction of conditioning the use of their highways on receipt of consent to be sued in state courts for accidents or other transactions arising out of such use, to designate a state official as a proper person to receive service of process in such litigation, provided only that the official receiving notice is obligated to communicate it to the person sued. 101 Although the Court verbalized the result in consent terms, the basis was really the State's power to regulate local acts dangerous to life or property. 102 This extension was necessary in order to permit States to assume jurisdiction over individuals ''doing business'' within the State, inasmuch as the State could not withhold from nonresident individuals the right of doing business subject to consent to be sued. 103 Thus, the Court soon recognized that ''doing business'' within a State was itself a sufficient basis for jurisdiction over a nonresident individual, at least where the business done was exceptional enough to create a strong state interest in regulation, and service could be effectuated within the State on an agent appointed to carry out the business. 104
Culmination of the trend was, of course, the promulgation in International Shoe Co. v. Washington, 105 a corporations case, of the ''minimum contacts'' test of jurisdiction. In the context of in personam jurisdiction over individuals, the test is illustrated by Kulko v. Superior Court, 106 in which the Court held that California could not obtain personal jurisdiction over a New York resident whose sole relevant contact with the State was to send his daughter to live with her mother in California. 107 ''Like any standard that requires a determination of 'reasonableness,' the 'minimum contacts' test . . . is not susceptible of mechanical application; rather, the facts of each case must be weighed to determine whether the requisite 'affiliating circumstances' are present.'' 108 Without deciding that the standard was relevant, the Court noted that the ''effects'' test of contacts, that Kulko had ''caused an effect'' in the State by availing himself of the benefits and protections of California's laws and by deriving an economic benefit in the lessened expense of maintaining the daughter in New York, was not applicable; it was deemed by the Court to involve wrongful activity outside a State which causes injury within the State or commercial activity affecting state residents, factors not present in this case. Any economic benefit to Kulko was derived in New York and not in California. 109 As with many such cases, the decision was narrowly limited to its facts and does little to clarify the standards applicable to state jurisdiction over nonresidents.
Suability of Foreign Corporations .--Because of the curious status of corporations in American law, 110 the basis of the assertion of jurisdiction of the courts of a State over a foreign corporation has been even more uncertain than that with respect to individuals, although the terms have been common. First, it was asserted that inasmuch as a corporation could not carry on business in a State without the State's permission, the State could condition its permission upon the corporation's consent to submit to the jurisdiction of the State's courts, either by appointment of someone to receive process or in the absence of such designation. 111 Second, the corporation by doing business in a State was deemed to be present there and thus subject to service of process and suit because it was present. 112 Presence conflicted with the prevailing idea of corporations as having no existence outside their State of incorporation, but the theory was nonetheless accepted that a corporation ''doing business'' in a State to a sufficient degree was ''present'' for service of process upon its agents in the State who carried out that business. 113 Generally, with rare exceptions, even continuous activity of some sort by a foreign corporation within a State did not suffice to render it amenable to suits therein unrelated to that activity. Without the protection of such a rule, it was maintained, foreign corporations would be exposed to the manifest hardship and inconvenience of defending, in any State in which they happened to be carrying on business, suits for torts wherever committed and claims on contracts wherever made. 114 And if the corporation stopped doing business in the forum State before suit against it was commenced, it might well escape jurisdiction alto gether. 115 The issue of the degree of activity required, in particular the degree of solicitation necessary to constitute doing business by a foreign corporation, was much disputed and led to very particularistic holdings. 116 In the absence of enough activity to constitute doing business, the mere presence within its territorial limits of an agent, officer, or stockholder, upon whom service might readily be had, was not effective to enable a State to acquire jurisdiction over the foreign corporation. 117
The rationales and premises of these cases were swept away in International Shoe Co. v. Washington, 118 although, of course, the results in many of them would stand on the basis of the ''minimum contacts'' analysis there adopted. International Shoe, a foreign corporation, had not been issued a license to do business in the State, but it systematically and continuously employed a force of salesmen, residents thereof, to canvass for orders therein, and was held suable in Washington for unpaid unemployment compensation contributions in respect to such salesmen. Service of the notice of assessment personally upon one of its local sales solicitors plus the forwarding of a copy thereof by registered mail to the corporation's principal office in Missouri was deemed sufficient to apprise the corporation of the proceeding.
To reach this conclusion the Court not only overturned prior holdings to the effect that mere solicitation of patronage does not constitute doing of business in a state sufficient to subject a foreign corporation to the jurisdiction thereof, 119 but also rejected the ''presence'' test as begging ''the question to be decided. . . . The terms 'present' or 'presence,''' according to Chief Justice Stone, ''are used merely to symbolize those activities of the corporation's agent within the State which courts will deem to be sufficient to satisfy the demands of due process. . . . Those demands may be met by such contacts of the corporation with the State of the forum as make it reasonable, in the context of our federal system . . . , to require the corporation to defend the particular suit which is brought there; [and] . . . that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice'. . . . An 'estimate of the inconveniences' which would result to the corporation from a trial away from its 'home' or principal place of business is relevant in this connection.'' 120 As to the scope of application to be accorded this ''fair play and substantial justice'' doctrine, the Court, at least verbally, concluded that ''so far as . . . [corporate] obligations arise out of or are connected with activities within the State, a procedure which requires the corporation to respond to a suit brought to enforce them can, in most instances, hardly be said to be undue.'' 121 Read literally, these statements coupled with the terms of the new doctrine lead to a reversal of former decisions which: (1) nullified the exercise of jurisdiction by the forum State over actions arising outside the State and brought by a resident plaintiff against a foreign corporation doing business therein without having been legally admitted and without having consented to service of process of a resident agent; and (2) exempted a foreign corporation, which has been licensed by the forum State to do business therein and has consented to the appointment of a local agent to accept process, from suit on an action not arising in the forum State and not related to activities pursued therein.
By an extended application of the logic of the position, a majority of the Court ruled that, notwithstanding that it solicited business in Virginia solely through recommendations of existing members and was represented therein by no agents whatsoever, a foreign mail order insurance company had through its policies developed such contacts and ties with Virginia residents that the State, by forwarding notice to the company by registered mail only, could institute enforcement proceedings under its Blue Sky Law leading to a decree ordering cessation of business pending compliance with that act. 122 The due process clause was declared not to ''forbid a State to protect its citizens from such injustice'' of having to file suits on their claims at a far distant home office of such company, especially in view of the fact that such suits could be more conveniently tried in Virginia where claims of loss could be investigated. 123 Likewise, under a California statute, subjecting foreign mail order insurance companies to suit in California on insurance contracts with residents thereof, petitioner was enabled to obtain a valid judgment in a California court against a Texas insurer served only by registered mail. 124 The contract between the company and the insured specified that Austin, Texas, was the place of ''making'' and the place where liability should be deemed to arise. The company mailed premium notices to the insured in California, and he mailed his premium payments to the company in Texas. Acknowledging that the connection of the company with California was tenuous--it had no office or agents in the State, no evidence had been presented that it had solicited anyone other than this insured for business--the Court sustained jurisdiction on the basis that the suit was on a contract which had a substantial connection with California. ''The contract was delivered in California, the premiums were mailed there and the insured was a resident of that State when he died. It cannot be denied that California has a manifest interest in providing effective means of redress for its residents when their insurers refuse to pay claims.'' 125
''Looking back over the long history of litigation a trend is clearly discernible toward expanding the permissible scope of state jurisdiction over foreign corporations and other nonresidents.'' 126 However, during the same Term, the Court found in personam jurisdiction lacking for the first time since International Shoe, and after a long period of declining to review the exercise of state court jurisdiction the Court pronounced firm due process limitations. Thus, in Hanson v. Denckla, 127 the issue was whether Florida courts obtained through use of ordinary mail and publication jurisdiction over corporate trustees of property the subject of a contest over a will; the will had been entered into and probated in Florida, the trustees were resident in Delaware and were indispensable parties with claimants who were resident in Florida and who had been personally served. Noting the trend in enlarging the ability of the States to obtain in personam jurisdiction over absent defendants, the Court denied that the States could exercise nationwide in personam jurisdiction and said that ''it would be a mistake to assume that this trend heralds the eventual demise of all restrictions on the personal jurisdiction of state courts.'' 128 The Court recognized that Florida law was the most appropriate law to be applied in determining the validity of the will and that the corporate defendants might be little inconvenienced by having to appear in Florida courts, but it denied that either circumstance satisfied the due process clause. The due process restrictions did more than guarantee immunity from inconvenient or distant litigation. ''They are consequences of territorial limitations on the power of the respective States. However minimal the burden of defending in a foreign tribunal, a defendant may not be called upon to do so unless he has the 'minimum contacts' with that State that are a prerequisite to its exercise of power over him.'' The only contacts the corporate defendants had in Florida consisted of a relationship with the individual defendants. ''The unilateral activity of those who claim some relationship with a nonresident defendant cannot satisfy the requirement of contact with the forum State. The application of that rule will vary with the quality and nature of the defendant's activity, but it is essential in each case that there be some act by which the defendant purposefully avails himself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws. . . . The settlor's execution in Florida of her power of appointment cannot remedy the absence of such an act in this case.'' 129
In World-Wide Volkswagen Corp. v. Woodson, 130 the Court applied its ''minimum contacts'' test to preclude the assertion of jurisdiction over two foreign corporations that did no business in the forum State. Plaintiffs sustained personal injuries in Oklahoma in an accident involving an alleged defect in their automobile, which they had purchased the previous year in New York, while they were New York residents, and which they were driving through Oklahoma on their way to a new residence in Arizona. Defendants were the automobile retailer and its wholesaler, New York corporations that did no business in Oklahoma. The Court found no circumstances justifying assertion by Oklahoma courts of jurisdiction over defendants. They (1) carried on no activity in Oklahoma, (2) closed no sales and performed no services there, (3) availed themselves of none of the benefits of the State's laws, (4) solicited no business there either through salespersons or through advertising reasonably calculated to reach the State, and (5) sold no cars to Oklahoma residents or indirectly served or sought to serve the Oklahoma market. The unilateral action of the purchasers in driving the car to Oklahoma was insufficient to create the kinds of requisite contacts. While it might have been foreseeable that the automobile would travel to Oklahoma, foreseeability is relevant only insofar as ''the defendant's conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there.'' 131 Further, ''whatever marginal revenues petitioners may receive by virtue of the fact that their products are capable of use in Oklahoma is far too attenuated a contact to justify that State's exercise of in personam jurisdiction over them.'' 132 Thus, a defendant must, as the Court said in Denckla, ''purposefully [avail] itself of the privilege of conducting activities within the forum State,'' 133 if not by carrying on business there within the constitutional sense, at least by delivering ''its products into the stream of commerce with the expectation that they will be purchased by consumers in the forum State.'' 134
The Court has applied International Shoe principles in several more situations. Circulation of a magazine in the forum state is an adequate basis for jurisdiction over the corporate magazine publisher in a libel action; the fact that the plaintiff has no contact with the forum state is not dispositive since the inquiry focuses on the relations among the defendant, the forum, and the litigation. 135 On the other hand, damage done to the plaintiff's reputation in his home state caused by circulation of a defamatory magazine article there may justify assertion of jurisdiction that would otherwise be absent. 136 While there is no per se rule that a contract with an out-of-state party automatically establishes jurisdiction to enforce the contract in the other party's forum, a franchisee who has entered into a franchise contract with an out-of-state corporation may be subject to suit in the corporation's home state where the overall circumstances (contract terms themselves, course of dealings) demonstrate a deliberate reaching out to establish contacts with the franchisor in the franchisor's home state. 137
Actions in Rem: Proceedings Against Property .--The basis of in rem jurisdiction is the power of a State to determine title to all property, whether tangible or intangible, located within its bor ders. 138 Unlike jurisdiction in personam, a judgment entered by a court with in rem jurisdiction does not bind the defendant personally but determines the title to or status of only the property in question. 139 Proceedings brought to register title to land, 140 to condemn 141 or confiscate 142 real or personal property, or to administer a decedent's estate 143 are typical in rem actions. Due process is satisfied by seizure of the res and notice to all who have or may have interests therein. 144 It was formally the case that in in rem actions a court could acquire jurisdiction over nonresidents by mere constructive service of process, 145 under the theory that property was always in possession of its owners and that seizure would afford them notice, inasmuch as they would keep themselves apprised of the state of their property. That this was a fiction not satisfying the requirements of due process has been established and, whatever the nature of the proceeding, notice must be given in a manner that actually notifies the person being sought or that has a reasonable certainty of resulting in such notice. 146
Although the Court's holding in Shaffer v. Heitner 147 ''that all assertions of state-court jurisdiction must be evaluated according to the ['minimum contacts'] standards set forth in International Shoe'' 148 requires an assessment of all decided cases based upon now disavowed tests, it does not appear that the results will appreciably change for in rem jurisdiction over property. ''[T]he presence of property in a State may bear on the existence of jurisdiction by providing contacts among the forum State, the defendant, and the litigation. For example, when claims to the property itself are the source of the underlying controversy between the plaintiff and the defendant, it would be unusual for the State where the property is located not to have jurisdiction. In such cases, the defendant's claim to property located in the State would normally indicate that he expected to benefit from the State's protection of his interest. The State's strong interests in assuring the marketability of property within its borders and in providing a procedure for peaceful resolution of disputes about the possession of that property would also support jurisdiction, as would the likelihood that important records and witnesses will be found in the State.'' 149 Thus, for ''true'' in rem actions, the old results likely still prevail.
Actions in Rem: Attachment Proceedings .--Although the practice of attachment goes back to colonial times, Pennoyer v. Neff 150 was also the most relevant case for a long time respecting the power of a State to permit an attachment of real and personal property situated within its borders belonging to a nonresident to satisfy a debt owed by the nonresident to one of its citizens or to settle a claim for damages founded upon a wrong inflicted on the citizen by the nonresident. Being neither present within the State nor domiciled therein, the nonresident defendant could not be served personally, and any judgment in money obtained against him would be unenforceable. The solution was a form of in rem proceeding, sometimes called ''quasi in rem,'' involving a levy of a writ of attachment on the local property of the defendant, of which proceeding the non-resident need be notified merely by publication, 151 and satisfaction of the judgment from the property attached; if the attached property was insufficient to satisfy the claim, the plaintiff could go no further.
This form of proceeding raised many questions. Of course, there were always instances in which it was fair to subject a person to suit on his property located in the forum State, as where the property was related to the matter sued over. 152 In others, the question was more disputed, as in the famous case in which the property subject to attachment was the obligation of the defendant's insurance company to defend and pay the judgment. 153 But the extension of the principle in Harris v. Balk 154 squarely raised the issue of fairness and territoriality. The claimant was a Maryland resident who was owed a debt by Balk, a North Carolina resident. Apparently adventitiously, Harris, also a North Carolina resident and owing Balk an amount of money, was found passing through Maryland by the Maryland resident and his debt to Balk was attached to satisfy the debt owed to the Marylander. Balk had no notice of the action and a default judgment was entered, after which Harris paid over the judgment to the Marylander. When Balk later sued Harris in North Carolina to recover on his debt, Harris defended that he had been relieved of any further obligation by satisfying the judgment in Maryland, and the Supreme Court sustained his defense, ruling that jurisdiction had been properly obtained and the Maryland judgment was thus valid. 155
Harris v. Balk was overruled in Shaffer v. Heitner, 156 in which the Court held that the ''minimum contacts'' test of International Shoe applied to all in rem and quasi in rem actions. The case arose under a Delaware sequestration statute under which plaintiffs were authorized to bring actions against nonresident defendants by attaching their ''property'' within Delaware, the property consisting of shares of corporate stock and options to stock in the defendant corporation, the stock being considered to be in Delaware because of the incorporation in Delaware, although none of the certificates representing the seized stocks was physically present in Delaware. The reason for applying the same test as is applied in in personam cases, the Court said, ''is simple and straightforward. It is premised on recognition that '[t]he phrase ''judicial jurisdiction over a thing,'' is a customary elliptical way of referring to jurisdiction over the interests of persons in a thing.''' 157 Thus, ''[t]he recognition leads to the conclusion that in order to justify an exercise of jurisdiction in rem, the basis for jurisdiction must be sufficient to justify exercising 'jurisdiction over the interests of persons in a thing.''' 158
A further tightening of jurisdictional standards occurred in Rush v. Savchuk. 159 The plaintiff was injured in a one-automobile accident in Indiana while a passenger in an automobile driven by defendant. Plaintiff later moved to Minnesota and sued defendant, still resident in Indiana, in state court in Minnesota. There were no contacts between the defendant and Minnesota, but defendant's insurance company did business there and plaintiff garnished the insurance contract, signed in Indiana, under which the company was obligated to defend defendant in litigation and indemnify him to the extent of the policy limits. The Court refused to permit jurisdiction to be grounded on the contract; the contacts justifying jurisdiction must be those of the defendant engaging in purposeful activity related to the forum. 160 Rush thus resulted in the demise of the controversial Seider v. Roth doctrine, which lower courts had struggled to save after Shaffer v. Heitner. 161
Actions in Rem: Estates, Trusts, Corporations .--Probate administration, being in the nature of a proceeding in rem, is one to which all the world is charged with notice. 162 Generally, probate will be opened in the proper court of the decedent's domicile, and as to the assets in that State the probate judgment is in rem and determinative as to all; insofar as it affects property, land or personalty, beyond the State, the judgment is in personam and can bind only parties thereto or their privies. 163 That is, the full faith and credit clause and statute would not prevent an attack in the forum of the situs of the property on the first court's finding of domicile as a predicate to deciding the disposition of the property. 164 The difficulty of characterization of the existence of the res in a particular jurisdiction is illustrated by the in rem aspects of Hanson v. Denckla. 165 There, the decedent, while a resident of Pennsylvania, created a trust with a Delaware corporation as trustee. She reserved the power to appoint the remainder, after her reserved life estate, either by testamentary disposition or by inter vivos instrument. After she moved to Florida, she executed a new will and a new power of appointment under the trust, which did not satisfy the requirements for testamentary disposition under Florida law. Upon her death, dispute arose as to whether the property passed pursuant to the terms of the power of appointment or in accordance with the residuary clause of the will. While the Florida courts had in personam jurisdiction over individual defendants, they attempted to assert in rem jurisdiction over the Delaware corporation. Asserting the old theory that a court's in rem jurisdiction ''is limited by the extent of its power and by the coordinate authority of sister States,'' 166 i.e., whether the court has jurisdiction over the thing, the Court thought it clear that the trust assets that were the subject of the suit were located in Delaware and thus the Florida courts had no in rem jurisdiction. The Court did not expressly consider whether the International Shoe test should apply to such in rem jurisdiction, as it has now held it generally must, but it did briefly consider whether Florida's interests arising from its authority to probate and construe its domiciliary's will, under which the foreign assets might pass, were a sufficient basis of in rem jurisdiction and decided they were not. 167 The effort of International Shoe in this area is still to be discerned.
The old Pennoyer rule, that seizure of property was sufficient to give notice to nonresident or absent defendants, was likewise applied in statutory proceedings for the forfeiture of abandoned property. Judgments in proceedings to determine succession to property in escheat were held binding on all when personal service of summons was made on all known claimants and constructive notice by publication to all claimants who were unknown or nonresident. 168 But in Mullane v. Central Hanover Bank & Trust Co., 169 the Court held that the characterization of an action as in rem or in personam did not determine what process was due in a statutory proce dure whereby a bank managing a common trust fund in favor of nonresident as well as resident beneficiaries could obtain a judicial settlement of accounts which was conclusive on all, with the only notice being publication in a local paper. Such notice by publication was necessarily sufficient as to beneficiaries whose interests or addresses were unknown to the bank, the Court held, but as to those, resident and nonresident alike, whose whereabouts were known, it was feasible to make serious efforts to notify them at least by mail to their addresses on record with the bank. The rule has been applied in the escheat situation, and the Court finding that a ''contacts'' test would not be workable in this field has held that, inasmuch as due process would prevent more than one State from escheating a given item of property, because of ease of administration rather than logic and jurisdiction, the State of residence shown by the last known address on a company's books would have the authority to take by escheat the uncollected claims against a corporation located in a particular State. 170
Notice: Service of Process .--It is not enough, however, that a State be potentially capable of exercising control over persons and property. Before a State legitimately can exercise such power to alter private interests, its jurisdiction must be perfected by the employment of an appropriate mode of serving process deemed effective to acquaint all parties of the institution of proceedings calculated to affect their rights. 171 ''An elementary and fundamental requirement of due process in any proceeding which is to be accorded finality is notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.'' 172 Personal service guarantees actual notice of the pendency of a legal action; it thus presents the ideal circumstance under which to commence legal proceedings against a person, and has traditionally been deemed necessary in actions styled in personam. 173 But less rigorous notice procedures have been accepted, in light of history and of the practical obstacles to providing personal service in every instance, and these procedures do not carry with them the same certainty of actual notice that inheres in personal service. 174 But, whether the action be in rem or in personam, there is a constitu tional minimum; if it be shown that the notice used was not reasonably calculated to provide the necessary information, its age and history will not sustain it. 175
The function of mail, indeed, as conveying sufficient notice, has become quite established, 176 and the development of the ability of States, quite contrary to the Pennoyer theory, to assert in personam jurisdiction extraterritorially upon individuals and corporations having ''minimum contacts'' with the forum State, resulted in the passage of ''long-arm'' jurisdictional statutes under which notice was practically always by mail. 177 In a class action, due process is satisfied by notification by mail of out-of-state class members, with opportunity to ''opt out'' but with no requirement that inclusion in the class be contingent upon affirmative response. 178 Other service devices, and substitutions, have been pursued and show some promise of further loosening of the concept of territoriality even while complying with minimum due process standards of notice. 179
[Footnote 78] Id. at 722.
[Footnote 79] Hazard, A General Theory of State-Court Jurisdiction, 1965 Sup. Ct. Rev. 241, 252-62.
[Footnote 80] Pennoyer v. Neff, 95 U.S. 714, 733 -35 (1878). The due process clause and the remainder of the Fourteenth Amendment had not been ratified at the time of the entry of the state-court judgment giving rise to the case. This inconvenient fact does not detract from the subsequent settled utilization of this constitutional foundation. Pennoyer denied full faith and credit to the judgment because the state lacked jurisdiction.
[Footnote 86] The jurisdictional requirements for rendering a valid divorce decree are considered under the full faith and credit clause. Supra, pp. 840-50.
[Footnote 87] The first principle, that a State may assert jurisdiction over anyone or anything physically within its borders, no matter how briefly there--the so-called ''transient'' rule of jurisdiction-- McDonald v. Mabee, 243 U.S. 90, 91 (1917), remains valid, although in Shaffer v. Heitner, 433 U.S. 186, 204 (1977), the Court's dicta appeared to assume it is not.
[Footnote 88] 326 U.S. 310 (1945). As the Court explained in McGee v. International Life Ins. Co., 355 U.S. 220, 223 (1957), ''[w]ith this increasing nationalization of commerce has come a great increase in the amount of business conducted by mail across state lines. At the same time modern transportation and communication have made it much less burdensome for a party sued to defend himself in a State where he engages in economic activity.'' See World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 293 (1980).
[Footnote 90] International Shoe Co. v. Washington, 326 U.S. 310, 316 , 317 (1945); Travelers Health Ass'n v. Virginia ex rel. State Corp. Comm., 339 U.S. 643, 649 (1950); Shaffer v. Heitner, 433 U.S. 186, 204 (1977).
[Footnote 94] McDonald v. Mabee, 243 U.S. 90, 91 (1917). Cf. Michigan Trust Co. v. Ferry, 228 U.S. 346 (1913). The rule has been strongly criticized but persists. Ehrenzweig, The Transient Rule of Personal Jurisdiction: The ''Power'' Myth and Forum Conveniens, 65 Yale L. J. 289 (1956). But in Burnham v. Superior Court, 495 U.S. 604 (1990), the Court held that service of process on a nonresident physically present within the state satisfies due process regardless of the duration or purpose of the nonresident's visit.
[Footnote 98] Sugg v. Thornton, 132 U.S. 524 (1889); Riverside Mills v. Menefee, 237 U.S. 189, 193 (1915); Hess v. Pawloski, 274 U.S. 352, 355 (1927). See also Harkness v. Hyde, 98 U.S. 476 (1879); Wilson v. Seligman, 144 U.S. 41 (1892).
[Footnote 99] Louisville & Nashville R.R. v. Schmidt, 177 U.S. 230 (1900); Western Loan & Savings Co. v. Butte & Boston Min. Co., 210 U.S. 368 (1908); Houston v. Ormes, 252 U.S. 469 (1920). See also Adam v. Saenger, 303 U.S. 59 (1938) (plaintiff suing defendants deemed to have consented to jurisdiction with respect to counterclaims asserted against him).
[Footnote 107] Kulko had visited the State twice, seven and six years respectively before initiation of the present action, his marriage occurring in California on the second visit, but neither the visits nor the marriage was sufficient or relevant to jurisdiction. Id. at 92-93.
[Footnote 108] Id. at 92.
[Footnote 109] Id. at 96-98.
[Footnote 111] Lafayette Ins. Co. v. French, 59 U.S. (18 How.) 404 (1855); St. Clair v. Cox, 196 U.S. 350 (1882); Commercial Mutual Accident Co. v. Davis, 213 U.S. 245 (1909); Simon v. Southern Ry., 236 U.S. 115 (1915); Pennsylvania Fire Ins. Co. v. Gold Issue Mining & Milling Co., 243 U.S. 93 (1917).
[Footnote 112] Presence was first independently used to sustain jurisdiction in International Harvester Co. v. Kentucky, 234 U.S. 579 (1914), although the possibility was suggested as early as St. Clair v. Cox, 106 U.S. 350 (1882). See also Philadelphia & Reading Ry. v. McKibbin, 243 U.S. 264, 265 (1917) (Justice Brandeis for Court).
[Footnote 114] E.g., Old Wayne Life Ass'n v. McDonough, 204 U.S. 8 (1907); Simon v. Southern Railway, 236 U.S. 115, 129 -130 (1915); Green v. Chicago, B. & Q. Ry., 205 U.S. 530 (1907); Rosenberg Co. v. Curtis Brown Co., 260 U.S. 516 (1923); Davis v. Farmers Co-operative Co., 262 U.S. 312 (1923); Helicopteros Nacionales de Colombia v. Hall, 466 U.S. 408 (1984). Continuous operations were sometimes sufficiently substantial and of a nature to warrant assertions of jurisdiction. St. Louis S. W. Ry. v. Alexander, 227 U.S. 218 (1913).
[Footnote 115] Robert Mitchell Furn. Co. v. Selden Breck Constr. Co., 257 U.S. 213 (1921): Chipman, Ltd. v. Thomas B. Jeffery Co., 251 U.S. 373, 379 (1920). On a consent theory, jurisdiction would continue. Washington ex rel Bond & Goodwin & Tucker v. Superior Court, 289 U.S. 361, 364 (1933).
[Footnote 116] Solicitation of business alone was inadequate to constitute ''doing business,'' Green v. Chicago, B. & Q. Ry., 205 U.S. 530 (1907), but when connected with other activities would suffice to confer jurisdiction. International Harvester Co. v. Kentucky, 234 U.S. 579 (1914). See the survey of cases by Judge Hand in Hutchinson v. Chase and Gilbert, 45 F.2d 139, 141-42 (2d Cir. 1930).
[Footnote 117] E.g. Goldey v. Morning News, 156 U.S. 518 (1895); Conley v. Mathieson Alkali Works, 190 U.S. 406 (1903); Riverside Mills v. Menefee, 237 U.S. 189, 195 (1915). But see Connecticut Mutual Life Ins. Co. v. Spratley, 172 U.S. 602 (1899).
[Footnote 119] This departure was recognized by Justice Rutledge subsequently in Nippert v. City of Richmond, 327 U.S. 416, 422 (1946). Inasmuch as International Shoe, in addition to having its agents solicit orders, also permitted them to rent quarters for the display of merchandise, the Court could have utilized International Harvester Co. v. Kentucky, 234 U.S. 579 (1914), to find it was ''present'' in the State.
[Footnote 121] Id. at 319.
[Footnote 122] Travelers Health Ass'n v. Virginia ex rel. State Corp. Comm'n, 339 U.S. 643 (1950). The decision was 5-to-4 with one of the majority Justices also contributing a concurring opinion. Id. at 651 (Justice Douglas). The possible significance of the concurrence is that it appears to disagree with the implication of the majority opinion, id. at 647-48, that a State's legislative jurisdiction and its judicial jurisdiction are coextensive. Id. at 652-53 (distinguishing between the use of the State's judicial power to enforce its legislative powers and the judicial jurisdiction when a private party is suing). See id. at 659 (dissent).
[Footnote 123] Id. at 647-49. The holding in Minnesota Commercial Men's Ass'n v. Benn, 261 U.S. 140 (1923), that a similar mail order insurance company could not be viewed as doing business in the forum State and that the circumstances under which its contracts with forum State citizens, executed and to be performed in its State of incorporation, were consummated could not support an implication that the foreign company had consented to be sued in the forum State, was distinguished rather than formally overruled. 339 U.S. at 647 . In any event, Benn, although unmentioned in the opinion, could not survive McGee v. International Life Ins. Co., 355 U.S. 220 (1957).
[Footnote 125] Id. at 223. The Court also noticed the proposition that the insured could not bear the cost of litigation away from home as well as the insurer. See also Perkins v. Benguet Consolidating Mining Co., 342 U.S. 437 (1952), a case too atypical on its facts to permit much generalization but which does appear to verify the implication of International Shoe that in personam jurisdiction may attach to a corporation even where the cause of action does not arise out of the business done by defendant in the forum State, as well as to state, in dictum, that the mere presence of a corporate official within the State on business of the corporation would suffice to create jurisdiction if the claim arose out of that business and service were made on him within the State. Id. at 444-45. The Court held that the State could, but was not required to, assert jurisdiction over a corporation owning gold and silver mines in the Philippines but temporarily (because of the Japanese occupation) carrying on a part of its general business in the forum State, including directors' meetings, business correspondence, banking, and the like, although it owned no mining properties in the State.
[Footnote 126] McGee v. International Life Ins. Co., 355 U.S. 220, 222 (1957). An exception exists with respect to in personam jurisdiction in domestic relations cases, at least in some instances. E.g., Vanderbilt v. Vanderbilt, 354 U.S. 416 (1957) (holding that sufficient contacts afforded Nevada in personam jurisdiction over a New York resident wife for purposes of dissolving the marriage but Nevada did not have jurisdiction to terminate the wife's claims for support).
[Footnote 128] Id. at 251. In dissent, Justice Black observed that ''of course we have not reached the point where state boundaries are without significance and I do not mean to suggest such a view here.'' Id. at 260.
[Footnote 129] Id. at 251, 253-54. Justice Black argued that the relationship of the nonresident defendants, of the subject of the litigation to the forum State, upon an analogy of choice of law and forum non conveniens, made Florida the natural and constitutional basis for asserting jurisdiction. Id. at 258-59. The Court has numerous times asserted that contacts sufficient for the purpose of designating a particular State's law as appropriate may be insufficient for the purpose of asserting jurisdiction. See Shaffer v. Heitner, 433 U.S. 186, 215 (1977); Kulko v. Superior Court, 436 U.S. 84, 98 (1978); World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 294 -95 (1980). On the due process limits on choice of law decisions, see Allstate Insurance Co. v. Hague, 449 U.S. 302 (1981).
[Footnote 131] Id. at 297.
[Footnote 132] Id. at 299.
[Footnote 134] Id. at 298. Of the three dissenters, Justice Brennan argued that the ''minimum contacts'' test was obsolete and that jurisdiction should be predicated upon the balancing of the interests of the forum State and plaintiffs against the actual burden imposed on defendant, id. at 299, while Justices Marshall and Blackmun applied the test and found jurisdiction because of the foreseeability of defendants that a defective product of theirs might cause injury in a distant State and because the defendants had entered into an interstate economic network. Id. at 313. The balancing of interests test was applied in Asahi Metal Industry Co. v. Superior Court, 480 U.S. 102 (1987), holding unreasonable exercise of jurisdiction by a California court over an indemnity action by a Taiwan tire manufacturer against a Japanese manufacturer of tire valves, the underlying damage action by a California motorist having been settled.
[Footnote 137] Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985). But cf. Helicopteros Nacionales de Colombia v. Hall, 466 U.S. 408 (1984) (purchases and training within state, both unrelated to cause of action, are insufficient to justify general in personam jurisdiction).
[Footnote 140] American Land Co. v. Zeiss, 219 U.S. 47 (1911); Tyler v. Judges of the Court of Registration, 175 Mass. 71, 76, 55 N.E. 812, 814 (Chief Justice Holmes), appeal dismissed, 179 U.S. 405 (1900).
[Footnote 144] Pennoyer v. Neff, 95 U.S. 714 (1878). Predeprivation notice and hearing may be required if the property is not the sort that, given advance warning, could be removed to another jurisdiction, destroyed, or concealed. United States v. James Daniel Good Real Property, 510 U.S. 43 (1993) (notice to owner required before seizure of house by government).
[Footnote 146] Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306 (1950); Walker v. City of Hutchinson, 352 U.S. 112 (1956); Schroeder v. City of New York, 371 U.S. 208 (1962); Robinson v. Hanrahan, 409 U.S. 38 (1972).
[Footnote 148] Id. at 212.
[Footnote 149] Id. at 207-08 (footnote citations omitted). The Court also suggested that the State would usually have jurisdiction in cases such as those arising from injuries suffered on the property of an absentee owner, where the defendant's ownership of the property is conceded but the cause of action is otherwise related to rights and duties growing out of that controversy. Id.
[Footnote 150] 95 U.S. 714 (1878). Cf. Pennington v. Fourth Nat'l Bank, 243 U.S. 269, 271 (1917); Corn Exch. Bank v. Commissioner, 280 U.S. 218, 222 (1930); Endicott Co. v. Encyclopedia Press, 266 U.S. 285, 288 (1924).
[Footnote 151] This theory of notice was disavowed sooner than the theory of jurisdiction. Supra, p. 1716.
[Footnote 152] Atkinson v. Superior Court, 49 Cal. 2d 338, 316 P. 2d 960 (1957), appeal dismissed, 357 U.S. 569 (1958) (debt seized in California was owed to a New Yorker, but it had arisen out of transactions in California involving the New Yorker and the California plaintiff).
[Footnote 153] Seider v. Roth, 17 N.Y. 2d 111, 269 N.Y.S. 2d 99, 216 N.E. 2d 312 (1966).
[Footnote 155] Compare New York Life Ins. Co. v. Dunlevy, 241 U.S. 518 (1916) (action purportedly against property within State, proceeds of an insurance policy, was really an in personam action against claimant and, claimant not having been served, the judgment is void). But see Western Union Tel. Co. v. Pennsylvania, 368 U.S. 71 (1961).
[Footnote 157] Id. at 207 (internal quotation from Restatement (Second) of Conflict of Laws 56, Introductory Note (1971)).
[Footnote 158] Id. The characterization of actions in rem as being not actions against a res but against persons with interests merely reflects Justice Holmes' insight in Tyler v. Judges of the Court of Registration, 175 Mass. 71, 76-77, 55 N.E., 812, 814, appeal dismissed, 179 U.S. 405 (1900).
[Footnote 160] Id. 328-30. In dissent, Justices Brennan and Stevens argued that what the state courts had done was the functional equivalent of direct-action statutes. Id. at 333 (Justice Stevens); World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 299 (1980) (Justice Brennan). The Court, however, refused so to view the Minnesota garnishment action, saying that ''[t]he State's ability to exert its power over the 'nominal defendant' is analytically prerequisite to the insurer's entry into the case as a garnishee.'' Id. at 330-31. Presumably, the comment is not meant to undermine the validity of such direct-action statutes, which was upheld in Watson v. Employers Liability Assurance Corp., 348 U.S. 66 (1954), a choice-of-law case rather than a jurisdiction case.
[Footnote 164] Id. at 353.
[Footnote 166] Id. at 246.
[Footnote 167] Id. at 247-50. The four dissenters, Justices Black, Burton, Brennan, and Douglas, believed that the transfer in Florida of $400,000 made by a domiciliary and affecting beneficiaries, almost all of whom lived in that State, gave rise to a sufficient connection with Florida to support an adjudication by its courts of the effectiveness of the transfer. Id. at 256, 262.
[Footnote 171] ''There . . . must be a basis for the defendant's amenability to service of summons. Absent consent, this means there must be authorization for service of summons on the defendant.'' Omni Capital Int'l v. Rudolph Wolff & Co., 484 U.S. 97 (1987).
[Footnote 175] In Greene v. Lindsey, 456 U.S. 444 (1982), the Court held that in light of substantial evidence that notices posted on the doors of apartments in a housing project in an eviction proceeding were often torn down by children and others before tenants ever saw them, service by posting did not comport with due process. Without requiring it, the Court observed that the mails provided an efficient and inexpensive means of communication upon which prudent men could rely and that notice by mail would provide a reasonable assurance of notice. Id. at 455. See also Mennonite Bd. of Missions v. Adams, 462 U.S. 791 (1983) (personal service or notice by mail is required for mortgagee of real property subject to tax sale); Tulsa Professional Collection Servs. v. Pope, 485 U.S. 478 (1988) (notice by mail or other appropriate means to reasonably ascertainable creditors of probated estate).
[Footnote 177] See, e.g., G.D. Searle & Co. v. Cohn, 455 U.S. 404, 409 -12 (1982) (discussing New Jersey's ''long-arm'' rule, under which a plaintiff must make every effort to serve process upon someone within the State and then only if ''after diligent inquiry and effort personal service cannot be made'' within the State, then ''service may be made by mailing, by registered or certified mail, return receipt requested, a copy of the summons and complaint to a registered agent for service, or to its principal place of business, or to its registered office.''). Cf. Velmohos v. Maren Engineering Corp., 83 N.J. 282, 416 A.2d 372 (1980), vacated and remanded, 455 U.S. 985 (1982).