It just doesn't matter. It just doesn't matter. . . . Or does it?

In Shaffer v. Heitner, Justice Marshall stated that the minimum contacts test should apply to all in rem and quasi-in-rem disputes. He seemed to go even further, declaring that "all assertions of state-court jurisdiction must be evaluated according to the standards set forth in International Shoe and its progeny." (Emphasis added.)

The applicability of Shaffer beyond the dispute at hand in that case is debatable. First, in Burnham v. Superior Court, the Court split over the applicability of Shaffer’s “all assertions” language in the context of transient jurisdiction. Second, the dispute in Shaffer was narrow, concerning an assertion of quasi-in-rem jurisdiction over property owned by out-of-state defendants that was unrelated to the suit (a “Type II.B” case). Even in Shaffer, several concurring Justices expressed concern over Shaffer’s applicability to real estate. These two facts could be read to suggest that the Court may at some point construe Shaffer narrowly.

But for purposes of analysis, let's assume that the Court meant what it said and said what it meant regarding in rem and quasi-in-rem cases. The question becomes: can we conclude "It Just Doesn't Matter?" Put differently, does it matter whether one asserts in personam or in rem/quasi-in-rem jurisdiction? It does, and here’s a few reasons why.

1. Sometimes the only basis for jurisdiction will be in rem or quasi-in-rem jurisdiction. There will remain cases where in personam jurisdiction is lacking but there is in rem or quasi-in-rem jurisdiction. In such cases, Justice Marshall's analysis may be helpful.

Example 1: In Pennsylvania, D (a Pennsylvania domiciliary) promises to sell P her stamp collection, worth $10, for $10. D fails to perform and instead sends the stamps to Ohio. P files suit in Ohio for specific performance. Assuming D has no relevant contacts with Ohio, there would be no in personam jurisdiction and the only basis for jurisdiction would be quasi-in-rem. Under Marshall's framework, where ownership of the property was the subject matter of the suit (Type I), even under a minimum contacts analysis, it would be "unusual" for the forum state to lack quasi-in-rem jurisdiction. Thus, even where in personam jurisdiction is lacking, there would likely be quasi-in-rem jurisdiction.

2. Minimum contacts can lead to different results. Shaffer itself showed that applying a minimum contacts analysis to a quasi-in-rem suit changed the result. Under the traditional rule, there could have been quasi-in-rem jurisdiction in Shaffer. But under the minimum contacts approach, the property was unrelated to the subject matter of the suit and there were no other relevant contacts. Accordingly, there was no jurisdiction, quasi-in-rem or otherwise.

3. Full faith and credit. A valid judgment in personam will be afforded full faith and credit for the full amount of the judgment. A judgment in rem or quasi-in-rem, however, is limited to the value of the property. Let's take a look at a variation of Example 1.

Example 2: In Pennsylvania, D (a Pennsylvania domiciliary) promises to sell P her stamp collection, worth $10, for $10. P contracts separately with T to make a mural based on the stamps, which T promises to buy for $1000. D fails to perform and instead sends the stamps to Ohio. Since P can’t make the mural, T cancels the contract. P sues D for specific performance (to get the stamps) and for $990 (the profit he expected to make).

The place of suit will determine the type of judgment, and in turn, its scope and applicability:

If suit filed in PA: If P sues in Pennsylvania, he will have in personam jurisdiction over D. If he wins, he should be able to use full faith & credit take the judgment to Ohio and get the stamps. He will also be able to execute the judgment anywhere D’s property can be found for the $990.

If suit filed in OH: if P sues in Ohio, his only basis for jurisdiction will be quasi-in-rem regarding the stamps. His recovery will be limited to the stamps. His judgment will have no value beyond the stamps, and he cannot use full faith and credit to use this judgment to obtain his desired $990 damages elsewhere.

Categories: Issue & claim preclusion, Judgments, Personal jurisdiction k-icp k-jj k-pj