U.S. Supreme Court Shaffer v. Heitner, 433
U.S. 186 (1977) Shaffer v. Heitner No. 75-1812 Argued February 22,
1977 Decided June 24, 1977 433
U.S. 186 APPEAL FROM THE SUPREME COURT OF
DELAWARE Syllabus Appellee, a nonresident of Delaware, filed a shareholder's
derivative suit in a Delaware Chancery Court, naming as defendants
a corporation and its subsidiary, as well as 28 present or former
corporate officers or directors, alleging that the individual
defendants had violated their duties to the corporation by causing
it and its subsidiary to engage in actions (which occurred in
Oregon) that resulted in corporate liability for substantial
damages in a private antitrust suit and a large fine in a criminal
contempt action. Simultaneously, appellee, pursuant to Del.Code
Ann., Tit. 10, § 366 (1975), filed a motion for sequestration of
the Delaware property of the individual defendants, all
nonresidents of Delaware, accompanied by an affidavit identifying
the property to be sequestered as stock, options, warrants, and
various corporate rights of the defendants. A sequestration order
was issued pursuant to which shares and options belonging to 21
defendants (appellants) were "seized" and "stop transfer" orders
were placed on the corporate books. Appellants entered a special
appearance to quash service of process and to vacate the
sequestration order, contending that the ex parte sequestration procedure did not accord them due process; that the
property seized was not capable of attachment in Delaware; and that
they did not have sufficient contacts with Delaware to sustain
jurisdiction of that State's courts under the rule of International Shoe Co. v. Washington, 326 U.
S. 310 . In that case, the Court (after noting that the
historical basis of in personam jurisdiction was a court's
power over the defendant's person, making his presence within the
court's territorial jurisdiction a prerequisite to its rendition of
a personally binding judgment against him, Pennoyer v.
Neff, 95 U. S. 714 ) held
that that power was no longer the central concern, and that

															"due process requires only that, in order to subject a defendant
to a judgment in personam, if he be not present within the
territory of the forum, he have certain minimum contacts with it
such that the maintenance of the suit does not offend 'traditional
notions of fair play and substantial justice'"

															(and thus the focus shifted to the relationship among the
defendant, the forum, and the litigation, rather than the mutually
exclusive sovereignty of the States on which the rules of Pennoyer had rested). The Court of Chancery, rejecting
appellants' arguments, upheld the § 366 procedure of compelling
the Page 433 U. S. 187 personal appearance of a nonresident defendant to answer and
defend a suit brought against him in a court of equity, which is
accomplished by the appointment of a sequestrator to seize and hold
the property of the nonresident located in Delaware subject to
court order, with release of the property being made upon the
defendant's entry of a general appearance. The court held that the
limitation on the purpose and length of time for which sequestered
property is held comported with due process, and that the statutory
situs of the stock (under a provision making Delaware the situs of
ownership of the capital stock of all corporations existing under
the laws of that State) provided a sufficient basis for the
exercise of quasi in rem jurisdiction by a Delaware court.
The Delaware Supreme Court affirmed, concluding that International Shoe raised no constitutional barrier to the
sequestration procedure because

															"jurisdiction under § 366 remains . . . quasi in rem founded on the presence of capital stock [in Delaware], not on
prior contact by defendants with this forum." Held: 1. Whether or not a State can assert jurisdiction over a
nonresident must be evaluated according to the minimum contacts
standard of International Shoe Co. v. Washington, supra. Pp. 433 U. S.
207 -212.

															(a) 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 the
thing." The presence of property in a State may bear upon the
existence of jurisdiction by providing contacts among the forum
State, the defendant, and the litigation, as for example, when
claims to the property itself are the source of the underlying
controversy between the plaintiff and defendant, where it would be
unusual for the State where the property is located not to have
jurisdiction. Pp. 433 U. S.
207 -208.

															(b) But where, as in the instant quasi in rem action,
the property now serving as the basis for state court jurisdiction
is completely unrelated to the plaintiff's cause of action, the
presence of the property alone, i.e., absent other ties
among the defendant, the State, and the litigation, would not
support the State's jurisdiction. Pp. 433 U. S.
208 -209.

															(c) Though the primary rationale for treating the presence of
property alone as a basis for jurisdiction is to prevent a
wrongdoer from avoiding payment of his obligations by removal of
his assets to a place where he is not subject to an in
personam suit, that is an insufficient justification for
recognizing jurisdiction without regard to whether the property is
in the State for that purpose. Moreover, the availability of
attachment procedures and the protection of the Full Faith and
Credit Clause also militate against that rationale. Pp. 433 U. S.
209 -210. Page 433 U. S. 188 (d) The fairness standard of International Shoe can be
easily applied in the vast majority of cases. P. 433 U. S.
211 .

															(e) Though jurisdiction based solely on the presence of property
in a State has had a long history, "traditional notions of fair
play and substantial justice" can be as readily offended by the
perpetuation of ancient forms that are no longer justified as by
the adoption of new procedures that do not comport with the basic
values of our constitutional heritage. Cf. Sniadach v. Family
Finance Corp, 395 U. S. 337 , 395 U. S. 340 ; Wolf v. Colorado, 338 U. S. 25 , 338 U. S. 27 .
Pp. 433 U. S.
211 -212.

															2. Delaware's assertion of jurisdiction over appellants, based
solely as it is on the statutory presence of appellants' property
in Delaware, violates the Due Process Clause, which

															"does not contemplate that a state may make binding a judgment .
. . against an individual or corporate defendant with which the
state has no contacts, ties, or relations." International Shoe, supra at 433 U. S. 319 .
Pp. 433 U. S.
213 -217.

															(a) Appellants' holdings in the corporation, which are not the
subject matter of this litigation and are unrelated to the
underlying cause of action, do not provide contacts with Delaware
sufficient to support jurisdiction of that State's courts over
appellants. P. 433 U. S.
213 .

															(b) Nor is Delaware state court jurisdiction supported by that
State's interest in supervising the management of a Delaware
corporation and defining the obligations of its officers and
directors, since Delaware bases jurisdiction not on appellants'
status as corporate fiduciaries, but on the presence of their
property in the State. Moreover, sequestration has been available
in any suit against a nonresident, whether against corporate
fiduciaries or not. Pp. 433 U. S.
213 -215.

															(c) Though it may be appropriate for Delaware law to govern the
obligations of appellants to the corporation and stockholders, this
does not mean that appellants have "purposefully avail[ed
themselves] of the privilege of conducting activities within the
forum State," Hanson v. Denckla, 357 U.
S. 235 , 357 U.S.
253 . Appellants, who were not required to acquire interests
in the corporation in order to hold their positions, did not, by
acquiring those interests, surrender their right to be brought to
judgment in the States in which they had "minimum contacts." Pp. 433 U. S.
215 -216. 361
A.2d 225 , reversed.

															MARSHALL, J., delivered the opinion of the Court, in which
BURGER, C.J., and STEWART, WHITE, BLACKMUN, and POWELL, JJ.,
joined, and in Parts I-III of which BRENNAN, J., joined. POWELL,
J., filed a concurring opinion, post, p. 433 U. S. 217 .
STEVENS, J., filed an opinion concurring in the Page 433 U. S. 189 judgment, post, p. 433 U. S. 217 .
BRENNAN, J., filed an opinion concurring in part and dissenting in
part, post, p. 433 U. S. 219 .
REHNQUIST, J., took no part in the consideration or decision of the
case.

															MR. JUSTICE MARSHALL delivered the opinion of the Court.

															The controversy in this case concerns the constitutionality of a
Delaware statute that allows a court of that State to take
jurisdiction of a lawsuit by sequestering any property of the
defendant that happens to be located in Delaware. Appellants
contend that the sequestration statute as applied in this case
violates the Due Process Clause of the Fourteenth Amendment both
because it permits the state courts to exercise jurisdiction
despite the absence of sufficient contacts among the defendants,
the litigation, and the State of Delaware and because it authorizes
the deprivation of defendants' property without providing adequate
procedural safeguards. We find it necessary to consider only the
first of these contentions. I Appellee Heitner, a nonresident of Delaware, is the owner of one
share of stock in the Greyhound Corp., a business incorporated
under the laws of Delaware with its principal place of business in
Phoenix, Ariz. On May 22, 1974, he filed a shareholder's derivative
suit in the Court of Chancery for New Castle County, Del., in which
he named as defendants Greyhound, its wholly owned subsidiary
Greyhound Lines, Inc., [ Footnote
1 ] and 28 present or former officers or directors of one or Page 433 U. S. 190 both of the corporations. In essence, Heitner alleged that the
individual defendants had violated their duties to Greyhound by
causing it and its subsidiary to engage in actions that resulted in
the corporation's being held liable for substantial damages in a
private antitrust suit [ Footnote
2 ] and a large fine in a criminal contempt action. [ Footnote 3 ] The activities which led to
these penalties took place in Oregon.

															Simultaneously with his complaint, Heitner filed a motion for an
order of sequestration of the Delaware property of the individual
defendants pursuant to Del.Code Ann., Tit. 10, § 366 (1975).
[ Footnote 4 ] This motion was
accompanied by a supporting Page 433 U. S. 191 affidavit of counsel which stated that the individual defendants
were nonresidents of Delaware. The affidavit identified the
property to be sequestered as

															"common stock, 3% Second Cumulative Preferenced Stock and stock
unit credits of the Defendant Greyhound Corporation, a Delaware
corporation, as well as all options and all warrants to purchase
said stock issued to said individual Defendants and all
contractural [ sic ] obligations, all rights, debts or
credits due or accrued to or for the benefit of any of the said
Defendants under any type of written agreement, contract or other
legal instrument of any kind whatever between any of the individual
Defendants and said corporation."

															The requested sequestration order was signed the day the motion
was filed. [ Footnote 5 ]
Pursuant to that order, the sequestrator [ Footnote 6 ] Page 433 U. S. 192 "seized" approximately 82,000 shares of Greyhound common stock
belonging to 19 of the defendants, [ Footnote 7 ] and options belonging to another 2 defendants.
[ Footnote 8 ] These seizures
were accomplished by placing "stop transfer" orders or their
equivalents on the books of the Greyhound Corp. So far as the
record shows, none of the certificates representing the seized
property was physically present in Delaware. The stock was
considered to be in Delaware, and so subject to seizure, by virtue
of Del.Code Ann., Tit. 8, § 169 (1975), which makes Delaware the
situs of ownership of all stock in Delaware corporations. [ Footnote 9 ]

															All 28 defendants were notified of the initiation of the suit by
certified mail directed to their last known addresses and by
publication in a New Castle County newspaper. The 21 defendants
whose property was seized (hereafter referred to as appellants)
responded by entering a special appearance for Page 433 U. S. 193 the purpose of moving to quash service of process and to vacate
the sequestration order. They contended that the ex parte sequestration procedure did not accord them due process of law, and
that the property seized was not capable of attachment in Delaware.
In addition, appellants asserted that, under the rule of International Shoe Co. v. Washington, 326 U.
S. 310 (1945), they did not have sufficient contacts
with Delaware to sustain the jurisdiction of that State's
courts.

															The Court of Chancery rejected these arguments in a letter
opinion which emphasized the purpose of the Delaware sequestration
procedure:

															"The primary purpose of 'sequestration' as authorized by 10
Del.C. § 366 is not to secure possession of property pending a
trial between resident debtors and creditors on the issue of who
has the right to retain it. On the contrary, as here employed,
'sequestration' is a process used to compel the personal appearance
of a nonresident defendant to answer and defend a suit brought
against him in a court of equity. Sands v. Lefcourt Realty
Corp., Del.Super., 117 A.2d
365 (1955). It is accomplished by the appointment of a
sequestrator by this Court to seize and hold property of the
nonresident located in this State subject to further Court order.
If the defendant enters a general appearance, the sequestered
property is routinely released, unless the plaintiff makes special
application to continue its seizure, in which event the plaintiff
has the burden of proof and persuasion."

															App. 75-76. This limitation on the purpose and length of time
for which sequestered property is held, the court concluded,
rendered inapplicable the due process requirements enunciated in Sniadach v. Family Finance Corp., 395 U.
S. 337 (1969); Fuentes v. Shevin, 407 U. S.
67 (1972); and Mitchell v. W. T. Grant Co., 416 U. S. 600 (1974). App. 75-76, 80, 83-85. The court also found no state law or
federal constitutional barrier to the sequestrator's reliance on
Del.Code Ann., Tit. 8, § 169 Page 433 U. S. 194 (1975). App. 76-79. Finally, the court held that the statutory
Delaware situs of the stock provided a sufficient basis for the
exercise of quasi in rem jurisdiction by a Delaware court. Id. at 85-87.

															On appeal, the Delaware Supreme Court affirmed the judgment of
the Court of Chancery. Greyhound Corp. v.
Heitner, 361 A.2d
225 (1976). Most of the Supreme Court's opinion was devoted to
rejecting appellants' contention that the sequestration procedure
is inconsistent with the due process analysis developed in the Sniadach line of cases. The court based its rejection of
that argument in part on its agreement with the Court of Chancery
that the purpose of the sequestration procedure is to compel the
appearance of the defendant, a purpose not involved in the Sniadach cases. The court also relied on what it
considered the ancient origins of the sequestration procedure and
approval of that procedure in the opinions of this Court, [ Footnote 10 ] Delaware's interest in
asserting jurisdiction to adjudicate claims of mismanagement of a
Delaware corporation, and the safeguards for defendants that it
found in the Delaware statute. 361 A.2d at 230-236. Page 433 U. S. 195 Appellants' claim that the Delaware courts did not have
jurisdiction to adjudicate this action received much more cursory
treatment. The court's analysis of the jurisdictional issue is
contained in two paragraphs:

															"There are significant constitutional questions at issue here,
but we say at once that we do not deem the rule of International Shoe to be one of them. . . . The reason, of
course, is that jurisdiction under § 366 remains . . . quasi in
rem founded on the presence of capital stock here, not on
prior contact by defendants with this forum. Under 8 Del. C. § 169
the 'situs of the ownership of the capital stock of all
corporations existing under the laws of this State . . . [is] in
this State,' and that provides the initial basis for jurisdiction.
Delaware may constitutionally establish situs of such shares here,
. . . it has done so and the presence thereof provides the
foundation for § 366 in this case. . . . On this issue, we agree
with the analysis made and the conclusion reached by Judge
Stapleton in U.S. Industries, Inc. v. Gregg, D.Del., 348 F.
Supp. 1004 (1972). [ Footnote
11 ]"

															"We hold that seizure of the Greyhound shares is not invalid
because plaintiff has failed to meet the prior contacts tests of International Shoe. " Id. at 22.

															We noted probable jurisdiction. 429 U.S. 813. [ Footnote 12 ] We reverse. Page 433 U. S. 196 II The Delaware courts rejected appellants' jurisdictional
challenge by noting that this suit was brought as a quasi in
rem proceeding. Since quasi in rem jurisdiction is
traditionally based on attachment or seizure of property present in
the jurisdiction, not on contacts between the defendant and the
State, the courts considered appellants' claimed lack of contacts
with Delaware to be unimportant. This categorical analysis assumes
the continued soundness of the conceptual structure founded on the
century-old case of Pennoyer v. Neff, 95 U. S.
714 (1878). Pennoyer was an ejectment action brought in federal
court under the diversity jurisdiction. Pennoyer, the defendant in
that action, held the land under a deed purchased in a sheriff's
sale conducted to realize on a judgment for attorney's fees
obtained against Neff in a previous action by one Mitchell. At the
time of Mitchell's suit in an Oregon State court, Neff was a
nonresident of Oregon. An Oregon statute allowed service by
publication on nonresidents who had property in the State,
[ Footnote 13 ] and Mitchell
had used that procedure to bring Neff Page 433 U. S. 197 before the court. The United States Circuit Court for the
District of Oregon, in which Neff brought his ejectment action,
refused to recognize the validity of the judgment against Neff in
Mitchell's suit, and accordingly awarded the land to Neff.
[ Footnote 14 ] This Court
affirmed.

															Mr. Justice Field's opinion for the Court focused on the
territorial limits of the States' judicial powers. Although
recognizing that the States are not truly independent sovereigns,
Mr. Justice Field found that their jurisdiction was defined by the
"principles of public law" that regulate the relationships among
independent nations. The first of those principles was "that every
State possesses exclusive jurisdiction and sovereignty over persons
and property within its territory." The second was "that no State
can exercise direct jurisdiction and authority over persons or
property without its territory." Id. at 95 U. S. 722 .
Thus, "in virtue of the State's jurisdiction over the property of
the nonresident situated within its limits," the state courts "can
inquire into that nonresident's obligations to its own citizens . .
. to the extent necessary to control the disposition of the
property." Id. at 95 U. S. 723 . The Court recognized that, if the
conclusions of that inquiry were adverse to the nonresident
property owner, his interest in the property would be affected. Ibid. Similarly, if the defendant consented to the
jurisdiction of the state courts or was personally served within
the State, a judgment could affect his interest in property outside
the State. But any attempt "directly" to assert extraterritorial
jurisdiction over persons or property would offend sister States
and exceed the inherent limits of the State's power. A judgment
resulting from such an attempt, Mr. Justice Field concluded, was
not only unenforceable Page 433 U. S. 198 in other States, [ Footnote
15 ] but was also void in the rendering State because it had
been obtained in violation of the Due Process Clause of the
Fourteenth Amendment. Id. at 95 U. S.
732 -733. See also e.g., Freeman v. Alderson, 119 U. S. 185 , 119 U. S.
187 -188 (1886).

															This analysis led to the conclusion that Mitchell's judgment
against Neff could not be validly based on the State's power over
persons within its borders, because Neff had not been personally
served in Oregon, nor had he consensually appeared before the
Oregon court. The Court reasoned that, even if Neff had received
personal notice of the action, service of process outside the State
would have been ineffectual, since the State's power was limited by
its territorial boundaries. Moreover, the Court held, the action
could not be sustained on the basis of the State's power over
property within its borders because that property had not been
brought before the court by attachment or any other procedure prior
to judgment. [ Footnote 16 ]
Since the judgment which authorized the sheriff's sale was
therefore invalid, the sale transferred no title. Neff regained his
land.

															From our perspective, the importance of Pennoyer is not
its result, but the fact that its principles and corollaries
derived from them became the basic elements of the
constitutional Page 433 U. S. 199 doctrine governing state court jurisdiction. See, e.g., Hazard, A General Theory of State Court Jurisdiction, 1965
Sup.Ct.Rev. 241 (hereafter Hazard). As we have noted, under Pennoyer, state authority to adjudicate was based on the
jurisdiction's power over either persons or property. This
fundamental concept is embodied in the very vocabulary which we use
to describe judgments. If a court's jurisdiction is based on its
authority over the defendant's person, the action and judgment are
denominated " in personam, " and can impose a personal
obligation on the defendant in favor of the plaintiff. If
jurisdiction is based on the court's power over property within its
territory, the action is called " in rem " or " quasi in
rem. " The effect of a judgment in such a case is limited to
the property that supports jurisdiction, and does not impose a
personal liability on the property owner, since he is not before
the court. [ Footnote 17 ] In Pennoyer's terms, the owner is affected only "indirectly"
by an in rem judgment adverse to his interest in the
property subject to the court's disposition.

															By concluding that "[t]he authority of every tribunal is
necessarily restricted by the territorial limits of the State in
which it is established," 95 U.S. at 95 U. S. 720 , Pennoyer sharply limited the availability of in
personam jurisdiction over defendants not resident in the
forum State. If a nonresident defendant could not be found in a
State, he could not be sued there. On the other hand, since the
State in which property Page 433 U. S. 200 was located was considered to have exclusive sovereignty over
that property, in rem actions could proceed regardless of
the owner's location. Indeed, since a State's process could not
reach beyond its borders, this Court held after Pennoyer that due process did not require any effort to give a property
owner personal notice that his property was involved in an in
rem proceeding. See, e.g., Ballard v. Hunter, 204 U. S. 241 (1907); Arndt v. Griggs, 134 U. S. 316 (1890); Huling v. Kaw Valley R. Co., 130 U.
S. 559 (1889). The Pennoyer rules generally
favored nonresident defendants by making them harder to sue. This
advantage was reduced, however, by the ability of a resident
plaintiff to satisfy a claim against a nonresident defendant by
bringing into court any property of the defendant located in the
plaintiff's State. See, e.g., Zammit, Quasi-In-Rem Jurisdiction: Outmoded and Unconstitutional?,
49 St. John's L.Rev. 668, 670 (1975). For example, in the well
known case of Harris v. Balk, 198 U.
S. 215 (1905), Epstein, a resident of Maryland, had a
claim against Balk, a resident of North Carolina. Harris, another
North Carolina resident, owed money to Balk. When Harris happened
to visit Maryland, Epstein garnished his debt to Balk. Harris did
not contest the debt to Balk, and paid it to Epstein's North
Carolina attorney. When Balk later sued Harris in North Carolina,
this Court held that the Full Faith and Credit Clause, U.S.Const.,
Art. IV, § 1, required that Harris' payment to Epstein be treated
as a discharge of his debt to Balk. This Court reasoned that the
debt Harris owed Balk was an intangible form of property belonging
to Balk, and that the location of that property traveled with the
debtor. By obtaining personal jurisdiction over Harris, Epstein had
"arrested" his debt to Balk, 198 U.S. at 198 U. S. 223 ,
and brought it into the Maryland Court. Under the structure
established by Pennoyer, Epstein was then entitled to
proceed against that debt to vindicate his claim against Balk, even
though Balk himself was not subject to the jurisdiction Page 433 U. S. 201 of a Maryland tribunal. [ Footnote 18 ] See also e.g., Louisville & N. R.
Co. v. Deer, 200 U. S. 176 (1906); Steele v. G. D. Searle & Co., 483 F.2d 339
(CA5 1973), cert. denied, 415 U.S. 958 (1974). Pennoyer itself recognized that its rigid categories,
even as blurred by the kind of action typified by Harris, could not accommodate some necessary litigation. Accordingly, Mr.
Justice Field's opinion carefully noted that cases involving the
personal status of the plaintiff, such as divorce actions, could be
adjudicated in the plaintiff's home State even though the defendant
could not be served within that State. 95 U.S. at 95 U. S.
733 -735. Similarly, the opinion approved the practice of
considering a foreign corporation doing business in a State to have
consented to being sued in that State. Id. at 95 U. S.
735 -736; See Lafayette Ins. Co. v.
French , 18 How. 404 (1856). This Page 433 U. S. 202 basis for in personam jurisdiction over foreign
corporations was later supplemented by the doctrine that a
corporation doing business in a State could be deemed "present" in
the State, and so subject to service of process under the rule of Pennoyer. See, e.g., International Harvester Co. v.
Kentucky, 234 U. S. 579 (1914); Philadelphia & Reading R. Co. v. McKibbin, 243 U. S. 264 (1917). See generally Note, Developments in the Law,
State-Court Jurisdiction, 73 Harv.L.Rev. 909, 919-923 (1960)
(hereafter Developments).

															The advent of automobiles, with the concomitant increase in the
incidence of individuals causing injury in States where they were
not subject to in personam actions under Pennoyer, required further moderation of the territorial
limits on jurisdictional power. This modification, like the
accommodation to the realities of interstate corporate activities,
was accomplished by use of a legal fiction that left the conceptual
structure established in Pennoyer theoretically unaltered. Cf. Olberding v. Illinois Central R. Co., 346 U.
S. 338 , 346 U. S.
340 -341 (1953). The fiction used was that the
out-of-state motorist, who it was assumed could be excluded
altogether from the State's highways, had, by using those highways,
appointed a designated state official as his agent to accept
process. See Hess v. Pawloski, 274 U.
S. 352 (1927). Since the motorist's "agent" could be
personally served within the State, the state courts could obtain in personam jurisdiction over the nonresident driver.

															The motorists' consent theory was easy to administer, since it
required only a finding that the out-of-state driver had used the
State's roads. By contrast, both the fictions of implied consent to
service on the part of a foreign corporation and of corporate
presence required a finding that the corporation was "doing
business" in the forum State. Defining the criteria for making that
finding and deciding whether they were met absorbed much judicial
energy. See, e.g., International Shoe Page 433 U. S. 203 Co. v. Washington, 326 U.S. at 326 U. S.
317 -319. While the essentially quantitative tests which
emerged from these cases purported simply to identify circumstances
under which presence or consent could be attributed to the
corporation, it became clear that they were, in fact, attempting to
ascertain "what dealings make it just to subject a foreign
corporation to local suit." Hutchinson v. Chase &
Gilbert, 45 F.2d 139, 141 (CA2 1930) (L. Hand, J.). In International Shoe, we acknowledged that fact.

															The question in International Shoe was whether the
corporation was subject to the judicial and taxing jurisdiction of
Washington. Mr. Chief Justice Stone's opinion for the Court began
its analysis of that question by noting that the historical basis
of in personam jurisdiction was a court's power over the
defendant's person. That power, however, was no longer the central
concern:

															"But now that the capias ad respondendum has given way
to personal service of summons or other form of notice, due process
requires only that in order to subject a defendant to a judgment in personam, if he be not present within the territory of
the forum, he have certain minimum contacts with it such that the
maintenance of the suit does not offend 'traditional notions of
fair play and substantial justice.' Milliken v. Meyer, 311 U. S.
457 , 311 U. S. 463 ."

															326 U.S. at 326 U. S. 316 .
Thus, the inquiry into the State's jurisdiction over a foreign
corporation appropriately focused not on whether the corporation
was "present," but on whether there have been

															"such contacts of the corporation with the state of the forum as
make it reasonable, in the context of our federal system of
government, to require the corporation to defend the particular
suit which is brought there." Id. at 326 U. S.
317 . Page 433 U. S. 204 Mechanical or quantitative evaluations of the defendant's
activities in the forum could not resolve the question of
reasonableness:

															"Whether due process is satisfied must depend rather upon the
quality and nature of the activity in relation to the fair and
orderly administration of the laws which it was the purpose of the
due process clause to insure. That 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." Id. at 326 U. S. 319 .
[ Footnote 19 ] Thus, the
relationship among the defendant, the forum, and the litigation,
rather than the mutually exclusive sovereignty of the States on
which the rules of Pennoyer rest, became the central
concern of the inquiry into personal jurisdiction. [ Footnote 20 ] The immediate effect of this
departure from Pennoyer's conceptual apparatus was to
increase the ability of the state courts to obtain personal
jurisdiction over nonresident defendants. See, e.g., Green, Jurisdictional Reform in California, Page 433 U. S. 205 21 Hastings L.J. 1219, 1231-1233 (1970); Currie, The Growth of
the Long Arm: Eight Years of Extended Jurisdiction in Illinois,
1963 U.Ill.L.F. 533; Developments 1000-1008.

															No equally dramatic change has occurred in the law governing
jurisdiction in rem. There have, however, been intimations
that the collapse of the in personam wing of Pennoyer has not left that decision unweakened as a
foundation for in rem jurisdiction. Well-reasoned lower
court opinions have questioned the proposition that the presence of
property in a State gives that State jurisdiction to adjudicate
rights to the property regardless of the relationship of the
underlying dispute and the property owner to the forum. See,
e.g., U.S. Industries, Inc. v. Gregg, 540 F.2d 142 (CA3 1976), cert. pending, No. 76-359; Jonnet v. Dollar Savings
Bank, 530 F.2d 1123, 1130-1143 (CA3 1976) (Gibbons, J.,
concurring); Camire v. Scieszka, 116 N.H. 281, 358 A.2d
397 (1976); Bekins v. Huish, 1 Ariz.App. 258, 401 P.2d 743
(1965); Atkinson v. Superior Court, 49 Cal. 2d
338 , 316 P.2d 960 (1957), appeal dismissed and cert. denied
sub nom. Columbia Broadcasting System v. Atkinson, 357 U. S. 569 (1958). The overwhelming majority of commentators have also
rejected Pennoyer's premise that a proceeding "against"
property is not a proceeding against the owners of that property.
Accordingly, they urge that the "traditional notions of fair play
and substantial justice" that govern a State's power to adjudicate in personam should also govern its power to adjudicate
personal rights to property located in the State. See,
e.g., Von Mehren & Trautman, Jurisdiction to Adjudicate: A
Suggested Analysis, 79 Harv.L.Rev. 1121 (1966) (hereafter Von
Mehren & Trautman); Traynor, Is This Conflict Really
Necessary?, 37 Texas L.Rev. 657 (1959) (hereafter Traynor);
Ehrenzweig, The Transient Rule of Personal Jurisdiction: The
"Power" Myth and Forum Conveniens, 65 Yale L.J. 289
(1956); Developments; Hazard. Page 433 U. S. 206 Although this Court has not addressed this argument directly, we
have held that property cannot be subjected to a court's judgment
unless reasonable and appropriate efforts have been made to give
the property owners actual notice of the action. Schroeder v.
City of New York, 371 U. S. 208 (1962); Walker v. City of Hutchinson, 352 U.
S. 112 (1956); Mullane v. Central Hanover Bank &
Trust Co., 339 U. S. 306 (1950). This conclusion recognizes, contrary to Pennoyer, that an adverse judgment in rem directly affects the
property owner by divesting him of his rights in the property
before the court. Schroeder v. City of New York, supra at 371 U. S. 213 ; cf. Continental Grain Co. v. Barge FBL-585, 364 U. S.
19 (1960) (separate actions against barge and barge
owner are one "civil action" for purpose of transfer under 28
U.S.C. § 1404(a)). Moreover, in Mullane, we held that
Fourteenth Amendment rights cannot depend on the classification of
an action as in rem or in personam, since that
is

															"a classification for which the standards are so elusive and
confused generally, and which, being primarily for state courts to
define, may and do vary from state to state."

															339 U.S. at 339 U. S.
312 .

															It is clear, therefore, that the law of state court jurisdiction
no longer stands securely on the foundation established in Pennoyer. [ Footnote
21 ] We think that the time is ripe to consider whether the
standard of fairness and substantial justice set forth in International Shoe should be held to govern actions in
rem as well as in personam. Page 433 U. S. 207 III The case for applying to jurisdiction in rem the same
test of "fair play and substantial justice" as governs assertions
of jurisdiction in personam 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." Restatement (Second) of Conflict of Laws § 56, Introductory
Note (1971) (hereafter Restatement). [ Footnote 22 ] This 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."
[ Footnote 23 ] The standard
for determining whether an exercise of jurisdiction over the
interests of persons is consistent with the Due Process Clause is
the minimum contacts standard elucidated in International
Shoe. This argument, of course, does not ignore the fact that the
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, [ Footnote 24 ] 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 Page 433 U. S. 208 located in the State would normally [ Footnote 25 ] indicate that he expected to benefit from
the State's protection of his interest. [ Footnote 26 ] The State's strong interests in assuring
the marketability of property within its borders [ Footnote 27 ] 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.
[ Footnote 28 ] The presence
of property may also favor jurisdiction in cases, such as suits for
injury suffered on the land 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 ownership. [ Footnote
29 ]

															It appears, therefore, that jurisdiction over many types of
actions which now are or might be brought in rem would not
be affected by a holding that any assertion of state court
jurisdiction must satisfy the International Shoe standard.
[ Footnote 30 ] For the type
of quasi in rem action typified by Harris v. Balk and the present case, however, accepting the proposed analysis
would result in significant change. These are cases where Page 433 U. S. 209 the property which now serves as the basis for state court
jurisdiction is completely unrelated to the plaintiff's cause of
action. Thus, although the presence of the defendant's property in
a State might suggest the existence of other ties among the
defendant, the State, and the litigation, the presence of the
property alone would not support the State's jurisdiction. If those
other ties did not exist, cases over which the State is now thought
to have jurisdiction could not be brought in that forum.

															Since acceptance of the International Shoe test would
most affect this class of cases, we examine the arguments against
adopting that standard as they relate to this category of
litigation. [ Footnote 31 ]
Before doing so, however, we note that this type of case also
presents the clearest illustration of the argument in favor of
assessing assertions of jurisdiction by a single standard. For in
cases such as Harris and this one, the only role played by
the property is to provide the basis for bringing the defendant
into court. [ Footnote 32 ]
Indeed, the express purpose of the Delaware sequestration procedure
is to compel the defendant to enter a personal appearance.
[ Footnote 33 ] In such cases,
if a direct assertion of personal jurisdiction over the defendant
would violate the Constitution, it would seem that an indirect
assertion of that jurisdiction should be equally impermissible. Page 433 U. S. 210 The primary rationale for treating the presence of property as a
sufficient basis for jurisdiction to adjudicate claims over which
the State would not have jurisdiction if International
Shoe applied is that a wrongdoer

															"should not be able to avoid payment of his obligations by the
expedient of removing his assets to a place where he is not subject
to an in personam suit."

															Restatement § 66, Comment a. Accord, Developments 955. This justification, however, does not explain why
jurisdiction should be recognized without regard to whether the
property is present in the State because of an effort to avoid the
owner's obligations. Nor does it support jurisdiction to adjudicate
the underlying claim. At most, it suggests that a State in which
property is located should have jurisdiction to attach that
property, by use of proper procedures, [ Footnote 34 ] as security for a judgment being sought
in a forum where the litigation can be maintained consistently with International Shoe. See, e.g., Von Mehren &
Trautman 1178; Hazard 284-285; Beale, supra, n 18, at 123-124. Moreover, we know
of nothing to justify the assumption that a debtor can avoid paying
his obligations by removing his property to a State in which his
creditor cannot obtain personal jurisdiction over him. [ Footnote 35 ] The Full Faith and
Credit Clause, after all, makes the valid in personam judgment of one State enforceable in all other States. [ Footnote 36 ] Page 433 U. S. 211 It might also be suggested that allowing in rem jurisdiction avoids the uncertainty inherent in the International Shoe standard and assures a plaintiff of a
forum. [ Footnote 37 ] See Folk & Moyer, supra, n 10, at 749, 767. We believe, however, that the
fairness standard of International Shoe can be easily
applied in the vast majority of cases. Moreover, when the existence
of jurisdiction in a particular forum under International
Shoe is unclear, the cost of simplifying the litigation by
avoiding the jurisdictional question may be the sacrifice of "fair
play and substantial justice." That cost is too high.

															We are left, then, to consider the significance of the long
history of jurisdiction based solely on the presence of property in
a State. Although the theory that territorial power is both
essential to and sufficient for jurisdiction has been undermined,
we have never held that the presence of property in a State does
not automatically confer jurisdiction over the owner's interest in
that property. [ Footnote 38 ]
This history must be Page 433 U. S. 212 considered as supporting the proposition that jurisdiction based
solely on the presence of property satisfies the demands of due
process, cf. Ownbey v. Morgan, 256 U. S.
94 , 256 U. S. 111 (1921), but it is not decisive. "[T]raditional notions of fair play
and substantial justice" can be as readily offended by the
perpetuation of ancient forms that are no longer justified as by
the adoption of new procedures that are inconsistent with the basic
values of our constitutional heritage. Cf. Sniadach v. Family
Finance Corp., 395 U.S. at 395 U. S. 340 ; Wolf v. Colorado, 338 U. S. 25 , 338 U. S. 27 (1949). The fiction that an assertion of jurisdiction over property
is anything but an assertion of jurisdiction over the owner of the
property supports an ancient form without substantial modern
justification. Its continued acceptance would serve only to allow
state court jurisdiction that is fundamentally unfair to the
defendant.

															We therefore conclude that all assertions of state court
jurisdiction must be evaluated according to the standards set forth
in International Shoe and its progeny. [ Footnote 39 ] Page 433 U. S. 213 IV The Delaware courts based their assertion of jurisdiction in
this case solely on the statutory presence of appellants' property
in Delaware. Yet that property is not the subject matter of this
litigation, nor is the underlying cause of action related to the
property. Appellants' holdings in Greyhound do not, therefore,
provide contacts with Delaware sufficient to support the
jurisdiction of that State's courts over appellants. If it exists,
that jurisdiction must have some other foundation. [ Footnote 40 ]

															Appellee Heitner did not allege, and does not now claim, that
appellants have ever set foot in Delaware. Nor does he identify any
act related to his cause of action as having taken place in
Delaware. Nevertheless, he contends that appellants' positions as
directors and officers of a corporation chartered in Delaware
[ Footnote 41 ] provide
sufficient "contacts, ties, or relations," International Shoe
Co. v. Washington, 326 U.S. at Page 433 U. S. 214 326 U. S. 319 ,
with that State to give its courts jurisdiction over appellants in
this stockholder's derivative action. This argument is based
primarily on what Heitner asserts to be the strong interest of
Delaware in supervising the management of a Delaware corporation.
That interest is said to derive from the role of Delaware law in
establishing the corporation and defining the obligations owed to
it by its officers and directors. In order to protect this
interest, appellee concludes, Delaware's courts must have
jurisdiction over corporate fiduciaries such as appellants.

															This argument is undercut by the failure of the Delaware
Legislature to assert the state interest appellee finds so
compelling. Delaware law bases jurisdiction not on appellants'
status as corporate fiduciaries, but rather on the presence of
their property in the State. Although the sequestration procedure
used here may be most frequently used in derivative suits against
officers and directors, Hughes Tool Co. v. Fawcett
Publications, Inc., 290
A.2d 693 , 695 (Del.Ch.1972), the authorizing statute evinces no
specific concern with such actions. Sequestration can be used in
any suit against a nonresident, [ Footnote 42 ] see, e.g., U.S. Industries, Inc. v.
Gregg, 540 F.2d 142 (CA3 1976), cert. pending, No.
76-359 (breach of contract); Hughes Tool Co. v. Fawcett
Publications, Inc., supra, (same), and reaches corporate
fiduciaries only if they happen to own interests in a Delaware
corporation, or other property in the State. But as Heitner's
failure to secure jurisdiction over seven of the defendants named
in his complaint demonstrates, there is no necessary relationship
between holding a position as a corporate fiduciary and owning
stock or other interests in the corporation. [ Footnote 43 ] If Delaware perceived its interest
in securing jurisdiction over corporate fiduciaries Page 433 U. S. 215 to be as great as Heitner suggests, we would expect it to have
enacted a statute more clearly designed to protect that interest.
Moreover, even if Heitner's assessment of the importance of
Delaware's interest is accepted, his argument fails to demonstrate
that Delaware is a fair forum for this litigation. The interest
appellee has identified may support the application of Delaware law
to resolve any controversy over appellants' actions in their
capacities as officers and directors. [ Footnote 44 ] But we have rejected the argument that,
if a State's law can properly be applied to a dispute, its courts
necessarily have jurisdiction over the parties to that dispute.

															"[The State] does not acquire . . . jurisdiction by being the
'center of gravity' of the controversy, or the most convenient
location for litigation. The issue is personal jurisdiction, not
choice of law. It is resolved in this case by considering the acts
of the [appellants]." Hanson v. Denckla, 357 U. S. 235 , 357 U. S. 254 (1958). [ Footnote 45 ]
Appellee suggests that, by accepting positions as officers or
directors of a Delaware corporation, appellants performed the acts
required by Hanson v. Denckla. He notes that Delaware law
provides substantial benefits to corporate officers and directors,
[ Footnote 46 ] and that these
benefits were, at least in part, Page 433 U. S. 216 the incentive for appellants to assume their positions. It is,
he says, "only fair and just" to require appellants, in return for
these benefits, to respond in the State of Delaware when they are
accused of misusing their power. Brief for Appellee 15.

															But, like Heitner's first argument, this line of reasoning
establishes only that it is appropriate for Delaware law to govern
the obligations of appellants to Greyhound and its stockholders. It
does not demonstrate that appellants have "purposefully avail[ed
themselves] of the privilege of conducting activities within the
forum State," Hanson v. Denckla, supra at 357 U.S. 253 , in a way that would
justify bringing them before a Delaware tribunal. Appellants have
simply had nothing to do with the State of Delaware. Moreover,
appellants had no reason to expect to be haled before a Delaware
court. Delaware, unlike some States, [ Footnote 47 ] has not enacted a statute that treats
acceptance of a directorship as consent to jurisdiction in the
State. And

															"[i]t strains reason . . . to suggest that anyone buying
securities in a corporation formed in Delaware 'impliedly consents'
to subject himself to Delaware's . . . jurisdiction on any cause of
action."

															Folk & Moyer, supra, n 10, at 785. Appellants, who were not required to
acquire interests in Greyhound in order to hold their positions,
did not, by acquiring those interests, surrender their right to be
brought to judgment only in States with which they had had "minimum
contacts."

															The Due Process Clause

															"does not contemplate that a state may make binding a judgment .
. . against an individual or corporate defendant with which the
state has no contacts, ties, or relations." International Shoe Co. v. Washington, 326 U.S. at 326 U. S. 319 .
Delaware's assertion of jurisdiction over appellants in this case
is inconsistent with that constitutional limitation on Page 433 U. S. 217 state power. The judgment of the Delaware Supreme Court must,
therefore, be reversed. It is so ordered. MR. JUSTICE REHNQUIST took no part in the consideration or
decision of this case.

															[ Footnote 1 ]

															Greyhound Lines, Inc., is incorporated in California and has its
principal place of business in Phoenix, Ariz.

															[ Footnote 2 ]

															A judgment of $13,146,090 plus attorneys' fees was entered
against Greyhound in Mt. Hood States, Inc. v. Greyhound
Corp., 1972-3 Trade Cas. � 74,824, aff'd, ___ F.2d
___ (CA9 1977); App. 10.

															[ Footnote 3 ] See United States v. Greyhound Corp., 363 F.
Supp. 525 (ND Ill.1973) and 370 F.
Supp. 881 (ND Ill.), aff'd, 508 F.2d 529 (CA7 1974).
Greyhound was fined $100,000 and Greyhound Lines $500,000.

															[ Footnote 4 ]

															Section 366 provides:

															"(a) If it appears in any complaint filed in the Court of
Chancery that the defendant or any one or more of the defendants is
a nonresident of the State, the Court may make an order directing
such nonresident defendant or defendants to appear by a day certain
to be designated. Such order shall be served on such nonresident
defendant or defendants by mail or otherwise, if practicable, and
shall be published in such manner as the Court directs, not less
than once a week for 3 consecutive weeks. The Court may compel the
appearance of the defendant by the seizure of all or any part of
his property, which property may be sold under the order of the
Court to pay the demand of the plaintiff, if the defendant does not
appear, or otherwise defaults. Any defendant whose property shall
have been so seized and who shall have entered a general appearance
in the cause may, upon notice to the plaintiff, petition the Court
for an order releasing such property or any part thereof from the
seizure. The Court shall release such property unless the plaintiff
shall satisfy the Court that, because of other circumstances there
is a reasonable possibility that such release may render it
substantially less likely that plaintiff will obtain satisfaction
of any judgment secured. If such petition shall not be granted, or
if no such petition shall be filed, such property shall remain
subject to seizure and may be sold to satisfy any judgment entered
in the cause. The Court may at any time release such property or
any part thereof upon the giving of sufficient security."

															"(b) The Court may make all necessary rules respecting the form
of process, the manner of issuance and return thereof, the release
of such property from seizure and for the sale of the property so
seized, and may require the plaintiff to give approved security to
abide any order of the Court respecting the property."

															"(c) Any transfer or assignment of the property so seized after
the seizure thereof shall be void and after the sale of the
property is made and confirmed, the purchaser shall be entitled to
and have all the right, title and interest of the defendant in and
to the property so seized and sold and such sale and confirmation
shall transfer to the purchaser all the right, title and interest
of the defendant in and to the property as fully as if the
defendant had transferred the same to the purchaser in accordance
with law."

															[ Footnote 5 ]

															As a condition of the sequestration order, both the plaintiff
and the sequestrator were required to file bonds of $1,000 to
assure their compliance with the orders of the court. App. 24.

															Following a technical amendment of the complaint, the original
sequestration order was vacated and replaced by an alias
sequestration order identical in its terms to the original.

															[ Footnote 6 ]

															The sequestrator is appointed by the court to effect the
sequestration. is duties appear to consist of serving the
sequestration order on the named corporation, receiving from that
corporation a list of the property which the order affects, and
filing that list with the court. For performing those services in
this case, the sequestrator received a fee of $100 under the
original sequestration order and $100 under the alias order.

															[ Footnote 7 ]

															The closing price of Greyhound stock on the day the
sequestration order was issued was $14 8. New York Times, May 23,
1974, p. 62. Thus, the value of the sequestered stock was
approximately $1.2 million.

															[ Footnote 8 ]

															Debentures, warrants, and stock unit credits belonging to some
of the defendants who owned either stock or options were also
sequestered. In addition, Greyhound reported that it had an
employment contract with one of the defendants calling for payment
of $250,000 over a 12-month period. Greyhound refused to furnish
any further information on that debt on the ground that, since the
sums due constituted wages, their seizure would be
unconstitutional. See Sniadach v. Family Finance Corp., 395 U. S. 337 (1969). Heitner did not challenge this refusal.

															The remaining defendants apparently owned no property subject to
the sequestration order.

															[ Footnote 9 ]

															Section 169 provides:

															"For all purposes of title, action, attachment garnishment and
jurisdiction of all courts held in this State, but not for the
purpose of taxation, the situs of the ownership of the capital
stock of all corporations existing under the laws of this State,
whether organized under this chapter or otherwise, shall be
regarded as in this State."

															[ Footnote 10 ]

															The court relied, 361 A.2d at 228, 230-231, on our decision in Ownbey v. Morgan, 256 U. S. 94 (1921), and references to that decision in North Georgia
Finishing, Inc. v. Di-Chem, Inc., 419 U.
S. 601 , 419 U. S. 610 (1975) (POWELL, J., concurring in judgment); Calero-Toledo v.
Pearson Yacht Leasing Co., 416 U. S. 663 , 416 U. S. 679 n. 14 (1974); Mitchell v. W. T. Grant Co., 416 U.
S. 600 , 416 U. S. 613 (1974); Fuentes v. Shevin, 407 U. S.
67 , 407 U. S. 91 n.
23 (1972); Sniadach v. Family Finance Corp., supra at 395 U. S. 339 .
The only question before the Court in Ownbey was the
constitutionality of a requirement that a defendant whose property
has been attached file a bond before entering an appearance. We do
not read the recent references to Ownbey as necessarily
suggesting that Ownbey is consistent with more recent
decisions interpreting the Due Process Clause.

															Sequestration is the equity counterpart of the process of
foreign attachment in suits at law considered in Ownbey. Delaware's sequestration statute was modeled after its attachment
statute. See Sands v. Lefcourt Realty Corp., 35 Del.Ch.
340, 344-345, 117 A.2d
365 , 367 (Sup.Ct.1955); Folk & Moyer, Sequestration in
Delaware: A Constitutional Analysis, 73 Colum.L.Rev. 749, 751-754
(1973).

															[ Footnote 11 ]

															The District Court judgment in U.S. Industries was
reversed by the Court of Appeals for the Third Circuit. 540 F.2d
142 (1976), cert. pending, No. 76-359. The Court of
Appeals characterized the passage from the Delaware Supreme Court's
opinion quoted in text as "cryptic conclusions." Id. at
149.

															[ Footnote 12 ]

															Under Delaware law, defendants whose property has been
sequestered must enter a general appearance, thus subjecting
themselves to in personam liability, before they can
defend on the merits. See Greyhound Corp. v.
Heitner, 361
A.2d 225 , 235-236 (1976). Thus, if the judgment below were
considered not to be an appealable final judgment, 28 U.S.C. §
1257(2), appellants would have the choice of suffering a default
judgment or entering a general appearance and defending on the
merits. This case is in the same posture as was Cox
Broadcasting Corp. v. Cohn, 420 U. S. 469 , 420 U. S. 485 (1975):

															"The [Delaware] Supreme Court's judgment is plainly final on the
federal issue, and is not subject to further review in the state
courts. Appellants will be liable for damages if the elements of
the state cause of action are proved. They may prevail at trial on
nonfederal grounds, it is true, but if the [Delaware] court
erroneously upheld the statute, there should be no trial at
all."

															Accordingly, "consistent with the pragmatic approach that we
have followed in the past in determining finality," id. at 420 U. S. 486 ,
we conclude that the judgment below is final within the meaning of
§ 1257.

															[ Footnote 13 ]

															The statute also required that a copy of the summons and
complaint be mailed to the defendant if his place of residence was
known to the plaintiff or could be determined with reasonable
diligence. 95 U.S. at 95 U. S. 718 .
Mitchell had averred that he did not know and could not determine
Neff's address, so that the publication was the only "notice"
given. Id. at 95 U. S.
717 .

															[ Footnote 14 ]

															The Federal Circuit Court based its ruling on defects in
Mitchell's affidavit in support of the order for service by
publication and in the affidavit by which publication was proved. Id. at 95 U. S. 720 .
Mr. Justice Field indicated that, if this Court had confined itself
to considering those rulings, the judgment would have been
reversed. Id. at 95 U. S.
721 .

															[ Footnote 15 ]

															The doctrine that one State does not have to recognize the
judgment of another State's courts if the latter did not have
jurisdiction was firmly established at the time of Pennoyer. See, e.g., 52 U. S. Ketchum, 11 How. 165 (1851); Boswell's
Lessee v. Otis , 9 How. 336 (1850); Kibbe v.
Kibbe, 1 Kirby 119 (Conn.Super.Ct. 1786).

															[ Footnote 16 ]

															Attachment was considered essential to the state court's
jurisdiction for two reasons. First, attachment combined with
substituted service would provide greater assurance that the
defendant would actually receive notice of the action than would
publication alone. Second, since the court's jurisdiction depended
on the defendant's ownership of property in the State, and could be
defeated if the defendant disposed of that property, attachment was
necessary to assure that the court had jurisdiction when the
proceedings began and continued to have jurisdiction when it
entered judgment. 95 U.S. at 95 U. S.
727 -728.

															[ Footnote 17 ]

															"A judgment in rem affects the interests of all persons
in designated property. A judgment quasi in rem affects
the interests of particular persons in designated property. The
latter is of two types. In one, the plaintiff is seeking to secure
a preexisting claim in the subject property and to extinguish or
establish the nonexistence of similar interests of particular
persons. In the other, the plaintiff seeks to apply what he
concedes to be the property of the defendant to the satisfaction of
a claim against him. Restatement, Judgments, 5-9." Hanson v. Denckla, 357 U. S. 235 , 357 U. S. 246 n. 12 (1958).

															As did the Court in Hanson, we will, for convenience,
generally use the term " in rem " in place of " in
rem and quasi in rem. "

															[ Footnote 18 ]

															The Court in Harris limited its holding to States in
which the principal defendant (Balk) could have sued the garnishee
(Harris) if he had obtained personal jurisdiction over the
garnishee in that State. 198 U.S. at 198 U. S.
222 -223, 198 U. S. 226 .
The Court explained:

															"The importance of the fact of the right of the original
creditor to sue his debtor in the foreign State, as affecting the
right of the creditor of that creditor to sue the debtor or
garnishee, lies in the nature of the attachment proceeding. The
plaintiff in such proceeding in the foreign State is able to sue
out the attachment and attach the debt due from the garnishee to
his (the garnishee's) creditor, because of the fact that the
plaintiff is really, in such proceeding, a representative of the
creditor of the garnishee, and therefore if such creditor himself
had the right to commence suit to recover the debt in the foreign
State, his representative has the same right, as representing him,
and may garnish or attach the debt, provided the municipal law of
the State where the attachment was sued out permits it." Id. at 198 U. S. 226 .
The problem with this reasoning is that, unless the plaintiff has
obtained a judgment establishing his claim against the principal
defendant, see, e.g., Baltimore & O. R. Co. v.
Hostetter, 240 U. S. 620 (1916), his right to "represent" the principal defendant in an
action against the garnishee is at issue. See Beale, The
Exercise of Jurisdiction in Rem to Compel Payment of a
Debt, 27 Harv.L.Rev. 107, 118-120 (1913).

															[ Footnote 19 ]

															As the language quoted indicates, the International
Shoe Court believed that the standard it was setting forth
governed actions against natural persons, as well as corporations,
and we see no reason to disagree. See also McGee v.
International Life Ins. Co., 355 U. S. 220 , 355 U. S. 222 (1957) ( International Shoe culmination of trend toward
expanding state jurisdiction over "foreign corporations and other
nonresidents"). The differences between individuals and
corporations may, of course, lead to the conclusion that a given
set of circumstances establishes state jurisdiction over one type
of defendant but not over the other.

															[ Footnote 20 ]

															Nothing in Hanson v. Denckla, 357 U.
S. 235 (1958), is to the contrary. The Hanson Court's statement that restrictions on state jurisdiction "are a
consequence of territorial limitations on the power of the
respective States," id. at 357 U. S. 251 ,
simply makes the point that the States are defined by their
geographical territory. After making this point, the Court in Hanson determined that the defendant over which personal
jurisdiction was claimed had not committed any acts sufficiently
connected to the State to justify jurisdiction under the International Shoe standard.

															[ Footnote 21 ] Cf. Restatement (Second) of Conflict of Laws § 59,
Comment a (possible inconsistency between principle of
reasonableness which underlies field of judicial jurisdiction and
traditional rule of in rem jurisdiction based solely on
land in State); § 60, Comment a (same as to jurisdiction
based solely on chattel in State); § 68, Comment c (rule
of Harris v. Balk "might be thought inconsistent with the
basic principle of reasonableness") (1971).

															[ Footnote 22 ]

															"All proceedings, like all rights, are really against persons.
Whether they are proceedings or rights in rem depends on
the number of persons affected." Tyler v. Court of Registration, 175 Mass. 71, 76, 55
N.E. 812, 814 (Holmes, C.J.), appeal dismissed, 179 U. S. 405 (1900).

															[ Footnote 23 ]

															It is true that the potential liability of a defendant in an in rem action is limited by the value of the property, but
that limitation does not affect the argument. The fairness of
subjecting a defendant to state court jurisdiction does not depend
on the size of the claim being litigated. Cf. Fuentes v.
Shevin, 407 U.S. at 407 U. S. 88 -90; n 32, infra. [ Footnote 24 ]

															This category includes true in rem actions and the
first type of quasi in rem proceedings. See n 17, supra. [ Footnote 25 ]

															In some circumstances, the presence of property in the forum
State will not support the inference suggested in text. Cf.,
e.g., Restatement § 60, Comments c, d; Traynor
672-673; Note, The Power of a State to Affect Title in a Chattel
Atypically Removed to It, 47 Colum.L.Rev. 767 (1947).

															[ Footnote 26 ] Cf. Hanson v. Denckla, 357 U.S. at 357 U.S. 253 .

															[ Footnote 27 ] See, e.g., Tyler v. Court of Registration, supra. [ Footnote 28 ]

															We do not suggest that these illustrations include all the
factors that may affect the decision, nor that the factors we have
mentioned are necessarily decisive.

															[ Footnote 29 ] Cf. Dubin v. Philadelphia, 34 Pa.D. & C. 61 (1938).
If such an action were brought under the in rem jurisdiction, rather than under a long-arm statute, it would be a quasi in rem action of the second type. See n 17, supra. [ Footnote 30 ] Cf. Smit, The Enduring Utility of In Rem Rules: A Lasting Legacy of Pennoyer v. Neff, 43 Brooklyn
L.Rev. 600 (1977). We do not suggest that jurisdictional doctrines
other than those discussed in text, such as the particularized
rules governing adjudications of status, are inconsistent with the
standard of fairness. See, e.g., Traynor 660-661.

															[ Footnote 31 ]

															Concentrating on this category of cases is also appropriate
because, in the other categories, to the extent that presence of
property in the State indicates the existence of sufficient
contacts under International Shoe, there is no need to
rely on the property as justifying jurisdiction regardless of the
existence of those contacts.

															[ Footnote 32 ]

															The value of the property seized does serve to limit the extent
of possible liability, but that limitation does not provide support
for the assertion of jurisdiction. See n 23, supra. In this case,
appellants' potential liability under the in rem jurisdiction exceeds $1 million. See nn. 7 8 supra. [ Footnote 33 ] See supra at 433 U. S. 193 , 433 U. S. 194 .
This purpose is emphasized by Delaware's refusal to allow any
defense on the merits unless the defendant enters a general
appearance, thus submitting to full in personam liability. See n 12, supra. [ Footnote 34 ] See North Georgia Finishing, Inc. v. Di-Chem, Inc., 419 U. S. 601 (1975); Mitchell v. W. T. Grant Co, 416 U.
S. 600 (1974); Fuentes v. Shevin, 407 U. S.
67 (1972); Sniadach v. Family Finance Corp., 395 U. S. 337 (1969).

															[ Footnote 35 ]

															The role of in rem jurisdiction as a means of
preventing the evasion of obligations, like the usefulness of that
jurisdiction to mitigate the limitations Pennoyer placed
on in personam jurisdiction, may once have been more
significant. Von Mehren & Trautman 1178.

															[ Footnote 36 ]

															Once it has been determined by a court of competent jurisdiction
that the defendant is a debtor of the plaintiff, there would seem
to be no unfairness in allowing an action to realize on that debt
in a State where the defendant has property, whether or not that
State would have jurisdiction to determine the existence of the
debt as an original matter. Cf. n 18, supra. [ Footnote 37 ]

															This case does not raise, and we therefore do not consider, the
question whether the presence of a defendant's property in a State
is a sufficient basis for jurisdiction when no other forum is
available to the plaintiff.

															[ Footnote 38 ]

															To the contrary, in Pennington v. Fourth Nat. Bank, 243 U. S. 269 , 243 U. S. 271 (1917), we said:

															"The Fourteenth Amendment did not, in guaranteeing due process
of law, abridge the jurisdiction which a State possessed over
property within its borders, regardless of the residence or
presence of the owner. That jurisdiction extends alike to tangible
and to intangible property. Indebtedness due from a resident to a
nonresident -- of which bank deposits are an example -- is property
within the State. Chicago, Rock Island Pacific Ry. Co. v.
Sturm, 174 U. S. 710 . It is, indeed,
the species of property which courts of the several States have
most frequently applied in satisfaction of the obligations of
absent debtors. Harris v. Balk, 198 U. S.
215 . Substituted service on a nonresident by publication
furnishes no legal basis for a judgment in personam. Pennoyer v. Neff, 95 U. S. 714 . But garnishment or
foreign attachment is a proceeding quasi in rem. Freeman v. Alderson, 119 U. S. 185 , 119 U. S.
187 . The thing belonging to the absent defendant is
seized and applied to the satisfaction of his obligation. The
Federal Constitution presents no obstacle to the full exercise of
this power." See also Huron Holding Corp. v. Lincoln Mine Operating
Co., 312 U. S. 183 , 312 U. S. 193 (1941).

															More recent decisions, however, contain no similar sweeping
endorsements of jurisdiction based on property. In Hanson v.
Denckla, 357 U.S. at 357 U. S. 246 ,
we noted that a state court's in rem jurisdiction is
"[f]ounded on physical power," and that "[t]he basis of the
jurisdiction is the presence of the subject property within the
territorial jurisdiction of the forum State." We found in that
case, however, that the property which was the basis for the
assertion of in rem jurisdiction was not present in the
State. We therefore did not have to consider whether the presence
of property in the State was sufficient to justify jurisdiction. We
also held that the defendant did not have sufficient contact with
the State to justify in personam jurisdiction.

															[ Footnote 39 ]

															It would not be fruitful for us to reexamine the facts of cases
decided on the rationales of Pennoyer and Harris to determine whether jurisdiction might have been sustained under
the standard we adopt today. To the extent that prior decisions are
inconsistent with this standard, they are overruled.

															[ Footnote 40 ]

															Appellants argue that our determination that the minimum
contacts standard of International Shoe governs
jurisdiction here makes unnecessary any consideration of the
existence of such contacts. Brief for Appellants 27; Reply Brief
for Appellants 9. They point out that they were never personally
served with a summons, that Delaware has no long-arm statute which
would authorize such service, and that the Delaware Supreme Court
has authoritatively held that the existence of contacts is
irrelevant to jurisdiction under Del.Code Ann., Tit. 10, § 366
(1975). As part of its sequestration order, however, the Court of
Chancery directed its clerk to send each appellant a copy of the
summons and complaint by certified mail. The record indicates that
those mailings were made, and contains return receipts from at
least 19 of the appellants. None of the appellants has suggested
that he did not actually receive the summons which was directed to
him in compliance with a Delaware statute designed to provide
jurisdiction over nonresidents. In these circumstances, we will
assume that the procedures followed would be sufficient to bring
appellants before the Delaware courts, if minimum contacts
existed.

															[ Footnote 41 ]

															On the view we take of the case, we need not consider the
significance, if any, of the fact that some appellants hold
positions only with a subsidiary of Greyhound which is incorporated
in California.

															[ Footnote 42 ]

															Sequestration is an equitable procedure available only in equity
actions, but a similar procedure may be utilized in actions at law. See n 10, supra. [ Footnote 43 ]

															Delaware does not require directors to own stock. Del.Code Ann.,
Tit. 8, § 141(b) (Supp. 1976).

															[ Footnote 44 ]

															In general, the law of the State of incorporation is held to
govern the liabilities of officers or directors to the corporation
and its stockholders. See Restatement § 309. But
see Cal.Corp.Code § 2115 (West Supp. 1977). The rationale for
the general rule appears to be based more on the need for a uniform
and certain standard to govern the internal affairs of a
corporation than on the perceived interest of the State of
incorporation. Cf. Koster v. Lumbermens Mutual Casualty
Co., 330 U. S. 518 , 330 U. S.
527 -528 (1947).

															[ Footnote 45 ]

															Mr. Justice Black, although dissenting in Hanson, agreed with the majority that

															"the question whether the law of a State can be applied to a
transaction is different from the question whether the courts of
that State have jurisdiction to enter a judgment. . . ."

															357 U.S. at 357 U. S.
258 .

															[ Footnote 46 ] See, e.g., Del.Code Ann., Tit. 8, §§ 143, 145 (1975 ed.
and Supp. 1976).

															[ Footnote 47 ] See, e.g., Conn.Gen.Stat.Rev. § 33-322 (1976);
N.C.Gen.Stat. § 55-33 (1975); S.C.Code Ann. § 33-5-70 (1977).

															MR. JUSTICE POWELL, concurring.

															I agree that the principles of International Shoe Co. v.
Washington, 326 U. S. 310 (1945), should be extended to govern assertions of in rem as well as in personam jurisdiction in a state court. I
also agree that neither the statutory presence of appellants' stock
in Delaware nor their positions as directors and officers of a
Delaware corporation can provide sufficient contacts to support the
Delaware courts' assertion of jurisdiction in this case.

															I would explicitly reserve judgment, however, on whether the
ownership of some forms of property whose situs is indisputably and
permanently located within a State may, without more, provide the
contacts necessary to subject a defendant to jurisdiction within
the State to the extent of the value of the property. In the case
of real property, in particular, preservation of the common law
concept of quasi in rem jurisdiction arguably would avoid
the uncertainty of the general International Shoe standard
without significant cost to " traditional notions of fair play
and substantial justice.'" Id. at 326 U. S. 316 ,
quoting Milliken v. Meyer, 311 U.
S. 457 , 311 U. S. 463 (1940). Subject to the foregoing reservation, I join the opinion of the
Court.

															MR. JUSTICE STEVENS, concurring in the judgment.

															The Due Process Clause affords protection against "judgments
without notice." International Shoe Co. v. Washington, 326 U. S. 310 , 326 U. S. 324 (opinion of Black, J.). Throughout our history, the acceptable
exercise of in rem and quasi in rem Page 433 U. S. 218 jurisdiction has included a procedure giving reasonable
assurance that actual notice of the particular claim will be
conveyed to the defendant. * Thus,
publication, notice by registered mail, or extraterritorial
personal service has been an essential ingredient of any procedure
that serves as a substitute for personal service within the
jurisdiction.

															The requirement of fair notice also, I believe, includes fair
warning that a particular activity may subject a person to the
jurisdiction of a foreign sovereign. If I visit another State, or
acquire real estate or open a bank account in it, I knowingly
assume some risk that the State will exercise its power over my
property or my person while there. My contact with the State,
though minimal, gives rise to predictable risks.

															Perhaps the same consequences should flow from the purchase of
stock of a corporation organized under the laws of a foreign
nation, because, to some limited extent, one's property and affairs
then become subject to the laws of the nation of domicile of the
corporation. As a matter of international law, that suggestion
might be acceptable because a foreign investment is sufficiently
unusual to make it appropriate to require the investor to study the
ramifications of his decision. But a purchase of securities in the
domestic market is an entirely different matter.

															One who purchases shares of stock on the open market can hardly
be expected to know that he has thereby become subject to suit in a
forum remote from his residence and unrelated to the transaction.
As a practical matter, the Delaware sequestration statute creates
an unacceptable risk of judgment without notice. Unlike the 49
other States, Delaware treats the place of incorporation as the
situs of the stock, even though both the owner and the custodian of
the shares are elsewhere. Moreover, Delaware denies the
defendant Page 433 U. S. 219 the opportunity to defend the merits of the suit unless he
subjects himself to the unlimited jurisdiction of the court. Thus,
it coerces a defendant either to submit to personal jurisdiction in
a forum which could not otherwise obtain such jurisdiction or to
lose the securities which have been attached. If its procedure were
upheld, Delaware would, in effect, impose a duty of inquiry on
every purchaser of securities in the national market. For unless
the purchaser ascertains both the State of incorporation of the
company whose shares he is buying, and also the idiosyncrasies of
its law, he may be assuming an unknown risk of litigation. I
therefore agree with the Court that, on the record before us, no
adequate basis for jurisdiction exists, and that the Delaware
statute is unconstitutional on its face.

															How the Court's opinion may be applied in other contexts is not
entirely clear to me. I agree with MR. JUSTICE POWELL that it
should not be read to invalidate quasi in rem jurisdiction
where real estate is involved. I would also not read it as
invalidating other long-accepted methods of acquiring jurisdiction
over persons with adequate notice of both the particular
controversy and the fact that their local activities might subject
them to suit. My uncertainty as to the reach of the opinion, and my
fear that it purports to decide a great deal more than is necessary
to dispose of this case, persuade me merely to concur in the
judgment.

															*

															"To dispense with personal service, the substitute that is most
likely to reach the defendant is the least that ought to be
required if substantial justice is to be done." McDonald v. Mabee, 243 U. S. 90 , 243 U. S.
92 .

															MR. JUSTICE BRENNAN, concurring in part and dissenting in
part.

															I join Parts I-III of the Court's opinion. I fully agree that
the minimum contacts analysis developed in International Shoe
Co. v. Washington, 326 U. S. 310 (1945), represents a far more sensible construct for the exercise
of state court jurisdiction than the patchwork of legal and factual
fictions that has been generated from the decision in Pennoyer
v. Neff, 95 U. S. 714 (1878). It is precisely because Page 433 U. S. 220 the inquiry into minimum contacts is now of such overriding
importance, however, that I must respectfully dissent from 433 U. S. I The primary teaching of Parts I-III of today's decision is that
a State, in seeking to assert jurisdiction over a person located
outside its borders, may only do so on the basis of minimum
contacts among the parties, the contested transaction, and the
forum State. The Delaware Supreme Court could not have made
plainer, however, that its sequestration statute, Del.Code Ann.,
Tit. 10, § 366 (1975), does not operate on this basis, but instead
is strictly an embodiment of quasi in rem jurisdiction, a
jurisdictional predicate no longer constitutionally viable:

															"[J]urisdiction under § 366 remains . . . quasi in rem founded on the presence of capital stock here, not on prior contact
by defendants with this forum." Greyhound Corp. v. Heitner, 361
A.2d 225 , 229 (1976). This state court ruling obviously
comports with the understanding of the parties, for the issue of
the existence of minimum contacts was never pleaded by appellee,
made the subject of discovery, or ruled upon by the Delaware
courts. These facts notwithstanding, the Court in 433 U.
S. Succinctly stated, once having properly and
persuasively decided that the quasi in rem statute that
Delaware admits to having enacted is invalid, the Court then
proceeds to find that a minimum contacts law that Delaware
expressly denies having enacted also could not be constitutionally
applied in this case.

															In my view, a purer example of an advisory opinion is not to be
found. True, appellants do not deny having received actual notice
of the action in question. Ante at 433 U. S. 213 n. 40. Page 433 U. S. 221 However, notice is but one ingredient of a proper assertion of
state court jurisdiction. The other is a statute authorizing the
exercise of the State's judicial power along constitutionally
permissible grounds -- which henceforth means minimum contacts. As
of today, § 366 is not such a law. [ Footnote 2/1 ] Recognizing that today's decision
fundamentally alters the relevant jurisdictional ground rules, I
certainly would not want to rule out the possibility that
Delaware's courts might decide that the legislature's overriding
purpose of securing the personal appearance in state courts of
defendants would best be served by reinterpreting its statute to
permit state jurisdiction on the basis of constitutionally
permissible contacts, rather than stock ownership. Were the state
courts to take this step, it would then become necessary to address
the question of whether minimum contacts exist here. But in the
present posture of this case, the Court's decision of this
important issue is purely an abstract ruling.

															My concern with the inappropriateness of the Court's action is
highlighted by two other considerations. First, an inquiry into
minimum contacts inevitably is highly dependent on creating a
proper factual foundation detailing the contacts between the forum
State and the controversy in question. Because neither the
plaintiff-appellee nor the state courts viewed such an inquiry as
germane in this instance, the Court today is unable to draw upon a
proper factual record in reaching its conclusion; moreover, its
disposition denies appellee the normal opportunity to seek
discovery on the contacts issue. Second, it must be remembered that
the Court's ruling is a constitutional one, and necessarily Page 433 U. S. 222 will affect the reach of the jurisdictional laws of all 50
States. Ordinarily this would counsel restraint in constitutional
pronouncements. Ashwander v. TVA, 297 U.
S. 288 , 297 U. S.
345 -348 (1936) (Brandeis, J., concurring). Certainly it
should have cautioned the Court against reaching out to decide a
question that, as here, has yet to emerge from the state courts
ripened for review on the federal issue. II Nonetheless, because the Court rules on the minimum contacts
question, I feel impelled to express my view. While evidence
derived through discovery might satisfy me that minimum contacts
are lacking in a given case, I am convinced that, as a general
rule, a state forum has jurisdiction to adjudicate a shareholder
derivative action centering on the conduct and policies of the
directors and officers of a corporation chartered by that State.
Unlike the Court, I therefore would not foreclose Delaware from
asserting jurisdiction over appellants were it persuaded to do so
on the basis of minimum contacts.

															It is well settled that a derivative lawsuit, as presented here,
does not inure primarily to the benefit of the named plaintiff.
Rather, the primary beneficiaries are the corporation and its
owners, the shareholders.

															"The cause of action which such a plaintiff brings before the
court is not his own, but the corporation's. . . . Such a plaintiff
often may represent an important public and stockholder interest in
bringing faithless managers to book." Koster v. Lumbermens Mutual Casualty Co., 330 U.
S. 518 , 330 U. S. 522 ,
524 (1947).

															Viewed in this light, the chartering State has an unusually
powerful interest in insuring the availability of a convenient
forum for litigating claims involving a possible multiplicity of
defendant fiduciaries and for vindicating the State's substantive
policies regarding the management of its domestic corporations. I
believe that our cases fairly establish that Page 433 U. S. 223 the State's valid substantive interests are important
considerations in assessing whether it constitutionally may claim
jurisdiction over a given cause of action.

															In this instance, Delaware can point to at least three
interrelated public policies that are furthered by its assertion of
jurisdiction. First, the State has a substantial interest in
providing restitution for its local corporations that allegedly
have been victimized by fiduciary misconduct, even if the
managerial decisions occurred outside the State. The importance of
this general state interest in assuring restitution for its own
residents previously found expression in cases that went outside
the then-prevailing due process framework to authorize state court
jurisdiction over nonresident motorists who injure others within
the State. Hess v. Pawloski, 274 U.
S. 352 (1927); see Olberding v. Illinois Central R.
Co., 346 U. S. 338 , 346 U. S. 341 (1953). More recently, it has led States to seek and to acquire
jurisdiction over nonresident tortfeasors whose purely out-of-state
activities produce domestic consequences. E.g., Gray v.
American Radiator & Standard Sanitary
Corp., 22 Ill. 2d
432 , 176 N.E.2d
761 (1961). Second, state courts have legitimately read their
jurisdiction expansively when a cause of action centers in an area
in which the forum State possesses a manifest regulatory interest. E.g., McGee v. International life Ins. Co., 355 U.
S. 220 (1957) (insurance regulation); Travelers
Health Assn. v. Virginia, 339 U. S. 643 (1950) (blue sky laws). Only this Term, we reiterated that the
conduct of corporate fiduciaries is just such a matter in which the
policies and interests of the domestic forum are ordinarily
presumed to be paramount. Santa Fe Industries, Inc. v.
Green, 430 U. S. 462 , 430 U. S.
478 -480 (1977); see Cort v. Ash, 422 U. S.
66 , 422 U. S. 84 -85
(1975). Finally, a State like Delaware has a recognized, interest
in affording a convenient forum for supervising and overseeing the
affairs of an entity that is purely the creation of that State's
law. For example, even following our decision in Page 433 U. S. 224 International Shoe, New York courts were permitted to
exercise complete judicial authority over nonresident beneficiaries
of a trust created under state law, even though, unlike appellants
here, the beneficiaries personally entered into no association
whatsoever with New York. Mullane v. Central Hanover Bank &
Trust Co., 339 U. S. 306 , 339 U. S. 313 (1950); [ Footnote 2/2 ] cf.
Hartford Life Ins. Co. v. Ibs, 237 U.
S. 662 , 237 U. S. 671 (1915) (litigation concerning management of mortuary fund operated
by locally chartered corporation rests in court of that State); Bernheimer v. Converse, 206 U. S. 516 , 206 U. S. 533 (1907) (state courts can oversee liquidation of state-chartered
corporation). I, of course, am not suggesting that Delaware's
varied interests would justify its acceptance of jurisdiction over
any transaction touching upon the affairs of its domestic
corporations. But a derivative action which raises allegations of
abuses of the basic management of an institution whose existence is
created by the State and whose powers and duties are defined by
state law fundamentally implicates the public policies of that
forum.

															To be sure, the Court is not blind to these considerations. It
notes that the State's interests

															"may support the application of Delaware law to resolve any
controversy over appellants' actions in their capacities as
officers and directors." Ante at 433 U. S. 215 .
But this, the Court argues, pertains to choice of law, not
jurisdiction. I recognize that the jurisdictional and choice of law
inquiries are not identical. Hanson v. Denckla, 357 U. S. 235 , 357 U. S. 254 (1958). But I would not compartmentalize thinking in this area
quite so rigidly as it seems to me the Court does today, for both
inquiries "are Page 433 U. S. 225 often closely related and to a substantial degree depend upon
similar considerations." Id. at 357 U. S. 258 (Black, J., dissenting). In either case, an important linchpin is
the extent of contacts between the controversy, the parties, and
the forum State. While constitutional limitations on the choice of
law are by no means settled, see, e.g., Home Ins. Co. v.
Dick, 281 U. S. 397 (1930), important considerations certainly include the expectancies
of the parties and the fairness of governing the defendants' acts
and behavior by rules of conduct created by a given jurisdiction. See, e.g., Restatement (Second) of Conflict of Laws § 6
(1971) (hereafter Restatement). These same factors bear upon the
propriety of a State's exercising jurisdiction over a legal
dispute. At the minimum, the decision that it is fair to bind a
defendant by a State's laws and rules should prove to be highly
relevant to the fairness of permitting that same State to accept
jurisdiction for adjudicating the controversy.

															Furthermore, I believe that practical considerations argue in
favor of seeking to bridge the distance between the choice of law
and jurisdictional inquiries. Even when a court would apply the law
of a different forum, [ Footnote
2/3 ] as a general rule, it will feel less knowledgeable and
comfortable in interpretation, and less interested in fostering the
policies of that foreign jurisdiction, than would the courts
established by the State that provides the applicable law. See,
e.g., Gulf Oil Co. v. Gilbert, 330 U.
S. 501 , 330 U. S. 509 (1947); Restatement § 313, p. 347; Traynor, Is This Conflict Really
Necessary?, 37 Texas L.Rev. 657, 664 (1959). Obviously, such choice
of law problems cannot entirely be avoided in a diverse legal
system such as our own. Nonetheless, when a suitor Page 433 U. S. 226 seeks to lodge a suit in a State with a substantial interest in
seeing its own law applied to the transaction in question, we could
wisely act to minimize conflicts, confusion, and uncertainty by
adopting a liberal view of jurisdiction, unless considerations of
fairness or efficiency strongly point in the opposite
direction.

															This case is not one where, in my judgment, this preference for
jurisdiction is adequately answered. Certainly nothing said by the
Court persuades me that it would be unfair to subject appellants to
suit in Delaware. The fact that the record does not reveal whether
they "set foot" or committed "act[s] related to [the] cause of
action" in Delaware, ante at 433 U. S. 213 ,
is not decisive, for jurisdiction can be bad strictly on
out-of-state acts having foreseeable effects in the forum State. E.g., McGee v. International Life Ins. Co., supra; Gray v.
American Radiator & Standard Sanitary Corp., supra; Restatement § 37. I have little difficulty in applying this
principle to nonresident fiduciaries whose alleged breaches of
trust are said to have substantial damaging effect on the financial
posture of a resident corporation. [ Footnote 2/4 ] Further, I cannot understand how the
existence of minimum contacts in a constitutional sense is at all
affected by Delaware's failure statutorily to express an interest
in controlling corporate fiduciaries. Ante at 433 U. S. 214 .
To me this simply demonstrates that Delaware Page 433 U. S. 227 did not elect to assert jurisdiction to the extent the
Constitution would allow. [ Footnote
2/5 ] Nor would I view as controlling or even especially
meaningful Delaware's failure to exact from appellants their
consent to be sued. Ante at 433 U. S. 216 .
Once we have rejected the jurisdictional framework created in Pennoyer v. Neff, I see no reason to rest jurisdiction on
a fictional outgrowth of that system such as the existence of a
consent statute, expressed or implied. [ Footnote 2/6 ]

															I, therefore, would approach the minimum contacts analysis
differently than does the Court. Crucial to me is the fact that
appellants [ Footnote 2/7 ]
voluntarily associated themselves with the Page 433 U. S. 228 State of Delaware, "invoking the benefits and protections of its
laws," Hanson v Denckla, 357 U.S. at 357 U.S. 253 ; International Shoe
Co. v. Washington, 326 U.S. at 326 U. S. 319 ,
by entering into a long-term and fragile relationship with one of
its domestic corporations. They thereby elected to assume powers
and to undertake responsibilities wholly derived from that State's
rules and regulations, and to become eligible for those benefits
that Delaware law makes available to its corporations' officials. E.g., Del.Code Ann., Tit. 8, § 143 (1975) (interest-free
loans); § 145 (1975 ed. and Supp. 1976) (indemnification). While it
is possible that countervailing issues of judicial efficiency and
the like might clearly favor a different forum, they do not appear
on the meager record before us; [ Footnote 2/8 ] and, of course, we are concerned solely
with "minimum" contacts, not the "best" contacts. I thus do not
believe that it is unfair to insist that appellants make themselves
available to suit in a competent forum that Delaware might create
for vindication of its important public policies directly
pertaining to appellants' fiduciary associations with the
State.

															[ Footnote 2/1 ]

															Indeed, the Court's decision to proceed to the minimum contacts
issue treats Delaware's sequestration statute as if it were the
equivalent of Rhode Island's long-arm law, which specifically
authorizes its courts to assume jurisdiction to the limit permitted
by the Constitution, R.I.Gen.Laws Ann. § 9-33 (1970), thereby
necessitating judicial consideration of the frontiers of minimum
contacts in every case arising under that statute.

															[ Footnote 2/2 ]

															The Mullane Court held:

															"[T]he interest of each state in providing means to close trusts
that exist by the grace of its laws and are administered under the
supervision of its courts is so insistent and rooted in custom as
to establish beyond doubt the right of its courts to determine the
interests of all claimants, resident or nonresident, provided its
procedure accords full opportunity to appear and be heard."

															339 U.S. at 339 U. S.
313 .

															[ Footnote 2/3 ]

															In this case, the record does not inform us whether an actual
conflict is likely to arise between Delaware law and that of the
likely alternative forum. Pursuant to the general rule, I assume
that Delaware law probably would obtain in the foreign court.
Restatement § 309.

															[ Footnote 2/4 ]

															I recognize, of course, that identifying a corporation as a
resident of the chartering State is to build upon a legal fiction.
In many respects, however, the law acts as if state chartering of a
corporation has meaning. E.g., 28 U.S.C. § 1332(c) (for
diversity purposes, a corporation is a citizen of the State of
incorporation). And, if anything, the propriety of treating a
corporation as a resident of the incorporating State seems to me
particularly appropriate in the context of a shareholder derivative
suit, for the State realistically may perceive itself as having a
direct interest in guaranteeing the enforcement of its corporate
laws, in assuring the solvency and fair management of its domestic
corporations, and in protecting from fraud those shareholders who
placed their faith in that state-created institution.

															[ Footnote 2/5 ]

															In fact, it is quite plausible that the Delaware Legislature
never felt the need to assert direct jurisdiction over corporate
managers precisely because the sequestration statute heretofore has
served as a somewhat awkward but effective basis for achieving such
personal jurisdiction. See, e.g., Hughes Tool Co. v. Fawcett
Publications, Inc., 290
A.2d 693 , 695 (Del.Ch.1972):

															"Sequestration is most frequently resorted to in suits by
stockholders against corporate directors in which recoveries are
sought for the benefit of the corporation on the ground of claimed
breaches of fiduciary duty on the part of directors."

															[ Footnote 2/6 ]

															Admittedly, when one consents to suit in a forum, his
expectation is enhanced that he may be haled into that State's
courts. To this extent, I agree that consent may have bearing on
the fairness of accepting jurisdiction. But whatever is the degree
of personal expectation that is necessary to warrant jurisdiction
should not depend on the formality of establishing a consent law.
Indeed, if one's expectations are to carry such weight, then
appellants here might be fairly charged with the understanding that
Delaware would decide to protect its substantial interests through
its own courts, for they certainly realized that, in the past, the
sequestration law has been employed primarily as a means of
securing the appearance of corporate officials in the State's
courts. 433
U.S. 186 fn2/5|>N. 5, supra. Even in the absence of
such a statute, however, the close and special association between
a state corporation and its managers should apprise the latter that
the State may seek to offer a convenient forum for addressing
claims of fiduciary breach of trust.

															[ Footnote 2/7 ]

															Whether the directors of the out-of-state subsidiary should be
amenable to suit in Delaware may raise additional questions. It may
well require further investigation into such factors as the degree
of independence in the operations of the two corporations, the
interrelationship of the managers of parent and subsidiary in the
actual conduct under challenge, and the reasonable expectations of
the subsidiary directors that the parent State would take an
interest in their behavior. Cf. United States v. First Nat.
City Bank, 379 U. S. 378 , 379 U. S. 384 (1965). While the present record is not illuminating on these
matters, it appears that all appellants acted largely in concert
with respect to the alleged fiduciary misconduct, suggesting that
overall jurisdiction might fairly rest in Delaware.

															[ Footnote 2/8 ]

															And, of course, if a preferable forum exists elsewhere, a State
that is constitutionally entitled to accept jurisdiction
nonetheless remains free to arrange for the transfer of the
litigation under the doctrine of forum non conveniens. See, e.g., Broderick v. Rosner, 294 U.
S. 629 , 294 U. S. 643 (1935); Gulf Oil Co. v. Gilbert, 330 U.
S. 501 , 330 U. S. 504 (1947).

Summary:
Here is a summary of the Supreme Court case Shaffer v. Heitner:

The case centers around a nonresident of Delaware who filed a shareholder's derivative suit in a Delaware court against a corporation, its subsidiary, and several corporate officers and directors. The plaintiff simultaneously requested the sequestration of the defendants' Delaware property. The defendants, also nonresidents of Delaware, argued that the ex parte sequestration procedure did not provide them due process and that they did not have sufficient contacts with Delaware for the state's courts to have jurisdiction.

The Supreme Court of Delaware upheld the sequestration procedure, but the U.S. Supreme Court disagreed, ruling that the mere presence of property in a state does not establish sufficient contact or connection to allow that state to exercise jurisdiction over a nonresident defendant. The Court held that the state court must have personal jurisdiction over the defendants, which requires that they have certain minimum contacts with the state to satisfy due process.

The Court also addressed the issue of consent, suggesting that while consent may impact the fairness of accepting jurisdiction, it should not depend on the formality of establishing a consent law. Additionally, the Court noted that the close association between a state corporation and its managers should indicate to the managers that the state may offer a convenient forum for addressing fiduciary breach of trust claims.

Finally, the Court discussed the possibility of transferring the litigation under the doctrine of forum non conveniens if a more preferable forum exists elsewhere.