Shaffer Vs Heitner

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What if you got a court summons from a state you'd never set foot in? Do you have to go?

If you don't,
what can that court do to you? These are the questions the Supreme Court addressed in Shaffer v. Heitner.

Arnold Heitner owned one stock in Greyhound Corporation, which was headquartered in the state of
Delaware, and he brought a derivative suit against 28 officers and directors of the company, most of whom
lived outside of Delaware. A derivative suit allows a stockholder to bring a lawsuit on behalf of a company
even though the stockholder is not an officer of the company.
To gain personal jurisdiction (authority over a person) over the officers, Heitner sought a sequester (seizure)
order from the court to seize the defendant's stock. This was done to gain jurisdiction over the defendants
since they did not reside in Delaware nor had they taken any action relating to the suit which might provide
Delaware with personal jurisdiction over them.
The defendants had the option of either filing an appearance in the lawsuit to reclaim their stock or risk
losing it if they didn't show up. Once the appearance was filed, then the Delaware court would have
jurisdiction over them. However, most of the officers hired an attorney and filed a special appearance which
allowed them to show up in court to object to the jurisdiction without the court gaining jurisdiction over
them.

Quasi in rem
When hearing quasi in rem actions, a court may only affect a named defendant's interest in a specific
named piece of property. These actions have similarlities with both in rem and in personam actions. As is
the case with in rem actions, a court may hear a quasi in rem action if the named property is within the
court's jurisdiction, even if the court does not have the power to exercise in personam jurisdiction over the
defendant. However, a court acting quasi in rem may only affect the interests of a single, named defendant,
as is the case in an in personam action.
There are two types of quasi in rem actions. In a quasi in rem subtype 1 action, a plaintiff may sue to
enforce a pre-existing interest in the named property. For example, a lender might use a quasi in
rem subtype 1 action to foreclose a mortgage.
A quasi in rem subtype 2 action is more complicated. In this type of action, a plaintiff may sue to apply the
named property to satisfy his or her claim against the property's owner, where the plaintiff's claim is
unrelated to the property. This type of action is technically against the named property, not the property's
owner. Thus, the outcome of the case is final regarding the plaintiff's claim against the named property and
does not affect the plaintiff's future claim against other pieces of property or the property's actual owner.
For example, an American plaintiff injured by a reckless driver while vacationing in a foreign country might
use a quasi in rem subtype 2 to recover from the driver if American courts could not obtain personal
jurisdiction over him.
Courts may not exercise quasi in rem subtype 2 jurisdiction where it would be unreasonable to do so.

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