Amdt5.4.6.1.1 Due Process and Personal Jurisdiction: Doctrine and Practice

Fifth Amendment:

No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offence to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.

Jurisdiction may be defined as the power of a government to create legal interests, and the Court has long held that the Due Process Clause limits the abilities of states to exercise this power.¹ In the famous case of Pennoyer v. Neff,² the Court enunciated two principles of jurisdiction respecting the states in a federal system³: 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.⁴ Over a long period of time, however, the mobility of American society and the increasing complexity of commerce led to attenuation of the second principle of Pennoyer, and consequently the Court established the modern standard of obtaining jurisdiction based upon the nature and the quality of contacts that individuals and corporations have with a state.⁵ This minimum contacts test, consequently, permits state courts to obtain power over out-of-state defendants.

In Personam Proceedings Against Individuals

How jurisdiction is determined depends on the nature of the suit being brought. If a dispute is directed against a person, not property, the proceedings are considered in personam, and jurisdiction must be established over the defendant’s person in order to render an effective decree.⁶ Generally, presence within the state is sufficient to create personal jurisdiction over an individual, if process is served.⁷ In the case of a resident who is absent from the state, domicile alone is deemed to be sufficient to keep him within reach of the state courts for purposes of a personal judgment, and process can be obtained by means of appropriate, substituted service or by actual personal service on the resident outside the state.⁸ However, if the defendant, although technically domiciled there, 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, because it is not reasonably calculated to give actual notice of the proceedings and opportunity to be heard.⁹

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.¹⁰ The early cases held that the process of a court of one state could not run into another and summon a resident of that state to respond to proceedings against him, when neither his person nor his property was within the jurisdiction of the court rendering the judgment.¹¹ This rule, however, has been attenuated in a series of steps.

Consent has always been sufficient to create jurisdiction, even in the absence of any other connection between the litigation and the forum. 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,¹² and even a special appearance to deny jurisdiction might be treated as consensual submission to the court.¹³ The concept of constructive consent was then seized upon as a basis for obtaining jurisdiction. For instance, with the advent of the automobile, States were permitted to engage in the fiction that the use of their highways was conditioned upon the consent of drivers to be sued in state courts for accidents or other transactions arising out of such use. Thus, a state could designate a state official as a proper person to receive service of process in such litigation, and establishing jurisdiction required only that the official receiving notice communicate it to the person sued.¹⁴

Although the Court approved of the legal fiction that such jurisdiction arose out of consent, the basis for jurisdiction was really the state’s power to regulate acts done in the state that were dangerous to life or property.¹⁵ Because the state did not really have the ability to prevent nonresidents from doing business in their state,¹⁶ this extension was necessary in order to permit states to assume jurisdiction over individuals doing business within the state. 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.¹⁷

The culmination of this trend, established in International Shoe Co. v. Washington,¹⁸ was the requirement that there be minimum contacts with the state in question in order to establish jurisdiction. The outer limit of this test is illustrated by Kulko v. Superior Court,¹⁹ 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.²⁰ The argument was made that the father 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. The Court explained that, [l]ike 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.²¹ Although the Court noted that the effects test had been accepted as a test of contacts when wrongful activity outside a state causes injury within the state or when commercial activity affects state residents, the Court found that these factors were not present in this case, and any economic benefit to Kulko was derived in New York and not in California.²² 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.

Walden v. Fiore further articulated what minimum contacts are necessary to create jurisdiction as a result of the relationship between the defendant, the forum, and the litigation.²³ In Walden, the plaintiffs, who were residents of Nevada, sued a law enforcement officer in federal court in Nevada as a result of an incident that occurred in an airport in Atlanta as the plaintiffs were attempting to board a connecting flight from Puerto Rico to Las Vegas. The Court held that the court in Nevada lacked jurisdiction because of insufficient contacts between the officer and the state relative to the alleged harm, as no part of the officer's conduct occurred in Nevada. In so holding, the Court emphasized that the minimum contacts inquiry should not focus on the resulting injury to the plaintiffs; instead, the proper question is whether the defendant's conduct connects him to the forum in a meaningful way.²⁴

Suing Out-of-State (Foreign) Corporations

A curious aspect of American law is that a corporation has no legal existence outside the boundaries of the state chartering it.²⁵ Thus, the basis for state court jurisdiction over an out-of-state (foreign) corporation has been even more uncertain than that with respect to individuals. Before International Shoe Co. v. Washington,²⁶ it was asserted that, because 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, by accepting service upon corporate agents authorized to operate within the state.²⁷ Further, by doing business in a state, the corporation was deemed to be present there and thus subject to service of process and suit.²⁸ This theoretical corporate presence conflicted with the idea of corporations having no existence outside their state of incorporation, but it 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.²⁹

Presence alone, however, does not expose a corporation to all manner of suits through the exercise of general jurisdiction. Only corporations, whose continuous and systematic affiliations with a forum make them essentially at home there, are broadly amenable to suit.³⁰ While the paradigmatic examples of where a corporate defendant is at home are the corporation's place of incorporation and principal place of business,³¹ the Court has recognized that in exceptional cases general jurisdiction can be exercised by a court located where the corporate defendant's operations are so substantial as to render the corporation at home in that state.³² Nonetheless, insubstantial in-state business, in and of itself, does not suffice to permit an assertion of jurisdiction over claims that are unrelated to any activity occurring in a state.³³ Without the protection of such a rule, 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.³⁴ And if the corporation stopped doing business in the forum state before suit against it was commenced, it might well escape jurisdiction altogether.³⁵

In early cases, the issue of the degree of activity and, in particular, the degree of solicitation that was necessary to constitute doing business by a foreign corporation, was much disputed and led to very particularistic holdings.³⁶ In the absence of enough activity to constitute doing business, the mere presence of an agent, officer, or stockholder, who could be served, within a state's territorial limits was not sufficient to enable the state to exercise jurisdiction over the foreign corporation.³⁷ The touchstone in jurisdiction cases was recast by International Shoe Co. v. Washington and its minimum contacts analysis.³⁸ International Shoe, an out-of-state corporation, had not been issued a license to do business in the State of Washington, but it systematically and continuously employed a sales force of Washington residents to solicit therein and thus was held amenable to suit in Washington for unpaid unemployment compensation contributions for such salesmen. The Court deemed a notice of assessment served personally upon one of the local sales solicitors, and a copy of the assessment sent by registered mail to the corporation's principal office in Missouri, sufficient to apprise the corporation of the proceeding.

To reach this conclusion, the Court not only overturned prior holdings that mere solicitation of business does not constitute a sufficient contact to subject a foreign corporation to a state’s jurisdiction,³⁹ 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.⁴⁰ As to the scope of application to be accorded this fair play and substantial justice doctrine, the Court 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.⁴¹

Extending this logic, a majority of the Court ruled that an out-of-state association selling mail order insurance had developed sufficient contacts and ties with Virginia residents so that the state could institute enforcement proceedings under its Blue Sky Law by forwarding notice to the company by registered mail, notwithstanding that the Association solicited business in Virginia solely through recommendations of existing members and was represented therein by no agents whatsoever.⁴² 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.⁴³

Likewise, the Court reviewed a California statute which subjected foreign mail order insurance companies engaged in contracts with California residents to suit in California courts, and which had authorized the petitioner to serve a Texas insurer by registered mail only.⁴⁴ 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 and no evidence had been presented that it had solicited anyone other than the 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.⁴⁵

In making this decision, the Court noted that [l]ooking 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.⁴⁶ However, in Hanson v. Denckla, decided during the same Term, the Court found in personam jurisdiction lacking for the first time since International Shoe Co. v. Washington, pronouncing firm due process limitations. In Hanson,⁴⁷ the issue was whether a Florida court considering a contested will obtained jurisdiction over corporate trustees of disputed property through use of ordinary mail and publication. The will had been entered into and probated in Florida, the claimants were resident in Florida and had been personally served, but the trustees, who were indispensable parties, were resident in Delaware. Noting the trend in enlarging the ability of the states to obtain in personam jurisdiction over absent defendants, the Court denied the exercise of nationwide in personam jurisdiction by states, saying that it would be a mistake to assume that th[e] trend [to expand the reach of state courts] heralds the eventual demise of all restrictions on the personal jurisdiction of state courts.⁴⁸

The Court recognized in Hanson 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 Court noted that due process restrictions do more than guarantee immunity from inconvenient or distant litigation, in that [these restrictions] 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.⁴⁹

The Court continued to apply International Shoe principles in diverse situations. Thus, circulation of a magazine in a state was an adequate basis for that state to exercise jurisdiction over an out-of-state corporate magazine publisher in a libel action. The fact that the plaintiff did not have minimum contacts with the forum state was not dispositive since the relevant inquiry is the relations among the defendant, the forum, and the litigation.⁵⁰ Or, 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 over the out-of-state authors of such article, despite the lack of minimum contact between the authors (as opposed to the publishers) and the state.⁵¹ Further, though 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.⁵²

The Court has continued to wrestle over when a state may adjudicate a products liability claim for an injury occurring within it, at times finding the defendant's contacts with the place of injury to be too attenuated to support its having to mount a defense there. In World-Wide Volkswagen Corp. v. Woodson,⁵³ 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 had sustained personal injuries in Oklahoma in an accident involving an alleged defect in their automobile. The car had been purchased the previous year in New York, the plaintiffs were New York residents at time of purchase, and the accident had occurred while they were driving through Oklahoma on their way to a new residence in Arizona. Defendants were the automobile retailer and its wholesaler, both New York corporations that did no business in Oklahoma. The Court found no circumstances justifying assertion by Oklahoma courts of jurisdiction over defendants. The Court found that the defendants (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. Although it might have been foreseeable that the automobile would travel to Oklahoma, foreseeability was held to be 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.⁵⁴ The Court in World-Wide Volkswagen Corp. contrasted the facts of the case with the instance of a corporation deliver[ing] its products into the stream of commerce with the expectation that they will be purchased by consumers in the forum State.⁵⁵

In Asahi Metal Industry Co. v. Superior Court,⁵⁶ the Court addressed more closely how jurisdiction flows with products downstream. The Court identified two standards for limiting jurisdiction even as products proceed to foreseeable destinations. The more general standard harked back to the fair play and substantial justice doctrine of International Shoe and requires balancing the respective interests of the parties, the prospective forum state, and alternative fora. All the Justices agreed with the legitimacy of this test in assessing due process limits on jurisdiction.⁵⁷ However, four Justices would also apply a more exacting test: A defendant who placed a product in the stream of commerce knowing that the product might eventually be sold in a state will be subject to jurisdiction there only if the defendant also had purposefully acted to avail itself of the state's market. According to Justice O’Connor, who wrote the opinion espousing this test, a defendant subjected itself to jurisdiction by targeting or serving customers in a state through, for example, direct advertising, marketing through a local sales agent, or establishing channels for providing regular advice to local customers. Action, not expectation, is key.⁵⁸ In Asahi, the state was found to lack jurisdiction under both tests cited.

Doctrinal differences on the due process touchstones in stream-of-commerce cases became more critical to the outcome in J. McIntyre Machinery, Ltd. v. Nicastro.⁵⁹ Justice Kennedy, writing for a four-Justice plurality, asserted that it is a defendant's purposeful availment of the forum state that makes jurisdiction consistent with traditional notions of fair play and substantial justice. The question is not so much the fairness of a state reaching out to bring a foreign defendant before its courts as it is a matter of a foreign defendant having acted within a state so as to bring itself within the state's limited authority. Thus, a British machinery manufacturer who targeted the U.S. market generally through engaging a nationwide distributor and attending trade shows, among other means, could not be sued in New Jersey for an industrial accident that occurred in the state. Even though at least one of its machines (and perhaps as many as four) were sold to New Jersey concerns, the defendant had not purposefully targeted the New Jersey market through, for example, establishing an office, advertising, or sending employees.⁶⁰ Concurring with the plurality, Justice Breyer emphasized the outcome lay in stream-of-commerce precedents that held isolated or infrequent sales could not support jurisdiction. At the same time, Justice Breyer cautioned against adoption of the plurality's strict active availment of the forum rule, especially because the Court had yet to consider due process requirements in the context of evolving business models, modern e-commerce in particular.⁶¹

Nonetheless, in order for a state court to exercise specific jurisdiction, the suit must arise out of or relate to the defendant's contacts with the forum,⁶² and when there is no such connection, specific jurisdiction is lacking regardless of the extent of a defendant's unconnected activities in the State.⁶³ As a result, the Court, in Bristol-Myers Squibb Co. v. Superior Court, concluded that the California Supreme Court erred in employing a relaxed approach to personal jurisdiction by holding that a state court could exercise specific jurisdiction over a corporate defendant who was being sued by non-state residents for out-of-state activities solely because the defendant had extensive forum contacts unrelated to the claims in question.⁶⁴ Concluding that California's approach was a loose and spurious form of general jurisdiction,⁶⁵ the Court held that without a connection between the forum and the specific claims at issue, California courts lacked jurisdiction over the corporate defendant.⁶⁶

Actions in Rem: Proceeding Against Property

In an in rem action, which is an action brought directly against a property interest, a state can validly proceed to settle controversies with regard to rights or claims against tangible or intangible property within its borders, notwithstanding that jurisdiction over the defendant was never established.⁶⁷ 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 the only property in question.⁶⁸ Proceedings brought to register title to land,⁶⁹ to condemn⁷⁰ or confiscate⁷¹ real or personal property, or to administer a decedent’s estate⁷² are typical in rem actions. Due process is satisfied by seizure of the property (the res) and notice to all who have or may have interests therein.⁷³ Under prior case law, a court could acquire in rem jurisdiction over nonresidents by mere constructive service of process,⁷⁴ under the theory that property was always in possession of its owners and that seizure would afford them notice, because they would keep themselves apprized of the state of their property. It was held, however, that this fiction did not satisfy the requirements of due process, and, whatever the nature of the proceeding, that 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.⁷⁵

Although the Court has now held that all assertions of state-court jurisdiction must be evaluated according to the [‘minimum contacts’] standards set forth in International Shoe Co. v. Washington,⁷⁶ it does not appear that this will appreciably change the result 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.⁷⁷ Thus, for true in rem actions, the old results are likely to still prevail.

Quasi in Rem: Attachment Proceedings

If a defendant is neither domiciled nor present in a state, he cannot be served personally, and any judgment in money obtained against him would be unenforceable. This does not, however, prevent attachment of a defendant’s property within the state. The practice of allowing a state to attach a non-resident’s real and personal property situated within its borders to satisfy a debt or other claim by one of its citizens goes back to colonial times. Attachment is considered a form of in rem proceeding sometimes called quasi in rem, and under Pennoyer v. Neff⁷⁸ an attachment could be implemented by obtaining a writ against the local property of the defendant and giving notice by publication.⁷⁹ The judgement was then satisfied from the property attached, and if the attached property was insufficient to satisfy the claim, the plaintiff could go no further.⁸⁰

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, such as where the property was related to the matter sued over.⁸¹ In others, the question was more disputed, as in the famous New York Court of Appeals case of Seider v. Roth,⁸² in which the property subject to attachment was the contractual obligation of the defendant’s insurance company to defend and pay the judgment. But, in Harris v. Balk,⁸³ the facts of the case and the establishment of jurisdiction through quasi in rem proceedings raised the issue of fairness and territoriality. The claimant was a Maryland resident who was owed a debt by Balk, a North Carolina resident. The Marylander ascertained, apparently adventitiously, that Harris, a North Carolina resident who owed Balk an amount of money, was passing through Maryland, and the Marylander attached this debt. 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 argued 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.⁸⁴

Subsequently, Harris v. Balk was overruled by Shaffer v. Heitner,⁸⁵ in which the Court rejected the Delaware state court’s jurisdiction, holding that the minimum contacts test of International Shoe applied to all in rem and quasi in rem actions. The case involved a Delaware sequestration statute under which plaintiffs were authorized to bring actions against nonresident defendants by attaching their property within Delaware, the property here consisting of shares of corporate stock and options to stock in the defendant corporation. The stock was considered to be in Delaware because that was the state of incorporation, but none of the certificates representing the seized stocks were 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.⁸⁶ 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.’⁸⁷

A further tightening of jurisdictional standards occurred in Rush v. Savchuk.⁸⁸ The plaintiff was injured in a one-car accident in Indiana while a passenger in a car 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.⁸⁹ Rush thus resulted in the demise of the controversial Seider v. Roth doctrine, which lower courts had struggled to save after Shaffer v. Heitner.⁹⁰

Actions in Rem: Estates, Trusts, Corporations

Generally, probate will occur where the decedent was domiciled, and, as a probate judgment is considered in rem, a determination as to assets in that state will be determinative as to all interested persons.⁹¹ Insofar as the probate affects real or personal property beyond the state’s boundaries, however, the judgment is in personam and can bind only parties thereto or their privies.⁹² Thus, the Full Faith and Credit Clause would not prevent an out-of-state court in the state where the property is located from reconsidering the first court’s finding of domicile, which could affect the ultimate disposition of the property.⁹³

The difficulty of characterizing the existence of the res in a particular jurisdiction is illustrated by the in rem aspects of Hanson v. Denckla.⁹⁴ As discussed earlier,⁹⁵ the decedent created a trust with a Delaware corporation as trustee,⁹⁶ and the Florida courts had attempted to assert both in personam and 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,⁹⁷ 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 the domiciliary’s will, under which the foreign assets might pass, were a sufficient basis of in rem jurisdiction and decided they were not.⁹⁸ The effect of International Shoe in this area is still to be discerned.

The reasoning of the Pennoyer⁹⁹ rule, that seizure of property and publication was sufficient to give notice to nonresidents or absent defendants, has also been applied in proceedings for the forfeiture of abandoned property. If all known claimants were personally served and all claimants who were unknown or nonresident were given constructive notice by publication, judgments in these proceedings were held binding on all.¹⁰⁰ But, in Mullane v. Central Hanover Bank & Trust Co.,¹⁰¹ the Court, while declining to characterize the proceeding as in rem or in personam, held that a bank managing a common trust fund in favor of nonresident as well as resident beneficiaries could not obtain a judicial settlement of accounts if the only notice was publication in a local paper. Although such notice by publication was sufficient as to beneficiaries whose interests or addresses were unknown to the bank, the Court held that it was feasible to make serious efforts to notify residents and nonresidents whose whereabouts were known, such as by mailing notice to the addresses on record with the bank.¹⁰²

Notice: Service of Process

Before a state may legitimately exercise control over persons and property, the state's jurisdiction must be perfected by an appropriate service of process that is effective to notify all parties of proceedings that may affect their rights.¹⁰³ Personal service guarantees actual notice of the pendency of a legal action, and has traditionally been deemed necessary in actions styled in personam.¹⁰⁴ But certain less rigorous notice procedures have enjoyed substantial acceptance throughout our legal history; in light of this history and the practical obstacles to providing personal service in every instance, the Court in some situations has allowed the use of procedures that do not carry with them the same certainty of actual notice that inheres in personal service.¹⁰⁵ But, whether the action be in rem or in personam, there is a constitutional minimum; due process requires 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.¹⁰⁶

The use of mail to convey notice, for instance, has become quite established,¹⁰⁷ especially for assertion of in personam jurisdiction extraterritorially upon individuals and corporations having minimum contacts with a forum state, where various long-arm statutes authorize notice by mail.¹⁰⁸ Or, in a class action, due process is satisfied by mail notification of out-of-state class members, giving such members the opportunity to opt out but with no requirement that inclusion in the class be contingent upon affirmative response.¹⁰⁹ 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.¹¹⁰