PJ study guide: current status of traditional bases

Pennoyer‘s traditional bases

You’ll recall from the handout on Pennoyer that the traditional bases for jurisdiction were:

• Domicile
• Tag jurisdiction
• Consenting to or waiving jurisdiction
• Property found in the state

Three of those bases (domicile, tag, and property) were premised on the First Principle of Public Law, that “every State possesses exclusive jurisdiction and sovereignty over persons and property within its territory.” Conversely, unless a defendant consented to or waived an objection to PJ, states lacked direct jurisdiction over persons or property found outside the state because of the Second Principle of Public Law: “no State can exercise direct jurisdiction and authority over persons or property without its territory.”

International Shoe and the Principles of Public Law

After International Shoe, when a defendant has sufficient minimum contacts with a state, that state can exercise direct power over that person. This directly overrules the Second Principle in part.

What other effects might Shoe have on traditional bases? See below.

Domicile

For the most part, the law remains the same, though the rationale might have changed.

• Pre-International Shoe: In Milliken v. Meyer, 311 U.S. 457, the Supreme Court held “Domicile in the state is alone sufficient to bring an absent defendant within the reach of the state’s jurisdiction for purposes of a personal judgment by means of appropriate substituted service.”
• Post-International Shoe: In the Goodyear and Daimler cases, the Supreme Court described domicile as a paradigmatic example of general in personam jurisdiction. But general jurisdiction stems not from Pennoyer but from International Shoe! This seems to place the Court’s “domicile” power within the Shoe minimum contacts framework rather than the Pennoyer framework. For further discussion, see the general jurisdiction study guide.

Regardless, domicile is still a basis for PJ.

Consent & waiver

Here International Shoe does not change things. The Glannon casebook provides a good basic explanation of consent and waiver.

• Consent: you do something that results in PJ.
  • Express consent: That might be signing a contract with a forum-selection clause or stipulating to PJ in written or oral form. If the contract or stipulation are effective, then there is PJ. 
  • Implied consent: May no longer be a viable basis for PJ based on language in International Shoe that treats implied consent as a “legal fiction” that is better analyzed through the Shoe minimum contacts test.
• Waiver: you fail to do something that results in PJ, such as defending a lawsuit without timely objecting to personal jurisdiction. We’ll later study FRCP 12, which governs how some defenses (such as objections to PJ, venue, process, or service of process) can be waived if not timely and properly asserted. When we get there, I call that rule the “initial response” rule.

These are also still good bases for PJ, even after International Shoe.

Tag jurisdiction

Here things mostly have not changed.

Let’s recall that tag PJ is. Tag (or transient) jurisdiction exists over an individual when they are personally served with process while present in the forum state. Some things to know about tag jurisdiction:

• It can’t be used to establish PJ over a corporation.
• Courts will often refuse to allow tag jurisdiction in cases where fraud or deceit are used to trick the defendant into visiting the forum (though the caselaw is not always consistent).

It is likely that tag jurisdiction is generally going to be upheld in most cases where the defendant is voluntarily in the state while personally served with process. What is not clear is whether tag jurisdiction still remains a viable traditional basis or should instead be analyzed under the Shoe minimum contacts framework.

In Burnham v. Superior Court, 495 US 604 (1990), the Court split on this somewhat academic question. In that case, a man who was separated from his wife visited California for a few days for business and to spend time with his daughter. He picked up his daughter at his wife’s place and spent a few days with her. Upon returning the daughter, he was served with divorce papers. Was he subject to PJ in California? A unanimous Court held he was. However, a majority was lacking on the rationale for tag jurisdiction. Here are three important opinions from the case:

• One plurality by Justice Scalia held that tag jurisdiction was and remained a “traditional” (i.e., historically sanctioned) basis for jurisdiction. Thus, for Scalia, tag jurisdiction was ok under Pennoyer and that part of Pennoyer was still good law. For Scalia, discussions of contacts or reasonableness were unnecessary.
• Another plurality by Justice Brennan held that tag jurisdiction should be analyzed under the International Shoe minimum contacts test. Applying that test, Brennan thought that PJ would exist over Mr. Burnham, even though the defendant was in the state for only three days and the events leading to the divorce took place in New Jersey.
• Justice Stevens wrote separately (preventing a tie-breaker), agreeing that there was PJ over Mr. Burnham but refusing to side with Scalia or Brennan. Instead, stated Stevens, “[p]erhaps the adage about hard cases making bad law should be revised to cover easy cases.”

So where do things stand? The Burnham case had no majority on the law and therefore settled nothing. However, in most cases, personal service in the state will likely be enough to establish tag jurisdiction, at least in cases where the individual defendant is voluntarily and intentionally in the state.

Property

Under Pennoyer and the First Principle of Public Law, the presence of property in a state was enough to establish in rem or quasi in rem jurisdiction over property. That property might be land, stock, or even a debt. In fact, in one bizarre case, the Supreme Court held that a debt existed in the state where a debtor could be found, stating “[t]he obligation of the debtor to pay his debt clings to and accompanies him wherever he goes.”

In a minute, I’ll talk about the current state of the law. But first, let’s talk about the types of jurisdiction that can exist over property. In the four scenarios below, assume that jurisdiction is asserted over a house located in the forum state. Below are four different flavors of jurisdiction-over-property:

• In rem: this is when the property is the subject matter of the suit and the whole world will be bound by the judgment. Example: A probate proceeding determining the distribution of a decedent’s assets.
• Quasi-in-rem Type I: this is when the property is the subject matter of the suit but only the litigants will be bound by the judgment. Example: A lawsuit for specific performance of a contract for the sale of property.
• Quasi-in-rem Type II.A: This is when the property is related to the lawsuit but the suit is not determining ownership of the property. Example: A lawsuit for damages for personal injuries sustained on the property.
• Quasi-in-rem Type II.B: This is when the property is unrelated to the lawsuit. Example: P sues D for a car accident.

How have things changed under International Shoe? The short answer: a lot.

In Shaffer v. Heitner, 433 U.S. 186 (1977), the question presented was whether Delaware would have jurisdiction over stock and stock options located in that state. The Court concluded that the Delaware stock had nothing to do with the lawsuit, which alleged corporate misconduct in Oregon.

This was a major change from Pennoyer, which would have allowed jurisdiction. Explaining the change, the Court announced that “all assertions of state-court jurisdiction must be evaluated according to the standards set forth in International Shoe and its progeny.” On its face, this announcement would seem to overrule the “property” portion of the First Principle of Public Law, which had stated “every State possesses exclusive jurisdiction and sovereignty over persons and property within its territory.” After Shaffer, sometimes a State will not have jurisdiction over in-state property.

So when will and won’t a state have jurisdiction over property? The Shaffer court very helpfully explained how the relationship between the property and the suit would determine whether or not a court had jurisdiction over that property. See the table below. It summarizes how the Shaffer Court used the International Shoe framework to analyze jurisdiction over property. Ultimately the Court treated the stock as being a quasi-in-rem Type II.B jurisdictional claim, and concluded that there was no jurisdiction.

A final note on property after Shoe and Shaffer. Several concurring Justices in Shaffer suggested that when real property is involved that the Pennoyer rule might still be good law and that minimum contacts analysis would not be used.

Let’s make our heads hurt. Bonus consideration!

As noted above, Shaffer stated in 1977 that “all assertions of state-court jurisdiction must be evaluated according to the standards set forth in International Shoe and its progeny.”

Again, as noted above, in 1990, Justices Scalia and Brennan fought in Burnham over whether tag jurisdiction was justified by Pennoyer or should instead be analyzed under International Shoe.

Part of the Scalia/Brennan fight arose from their differing interpretations of the “all assertions” sentence from Shaffer!

Who do you think had the stronger argument in Burnham? Scalia or Brennan? If you were on the Court in 1990, what weight would you give to Shaffer‘s “all assertions” sentence? Why? Regardless of what you think, now consider the arguments that could be made for the other side.

Bottom line.

Domicile: Still a basis for PJ, though Daimler probably now considers it to be a form of general jurisdiction.

Waiver/Consent: Remain good bases for PJ, although “implied consent” may now be something that should be analyzed instead under the minimum contacts test.

Tag jurisdiction: In cases where an individual is personally served with process while voluntarily in the forum state, there will probably be PJ, although the Brennan approach would seem to require a minimum contacts analysis that still heavily favors PJ.

Property: Use the minimum contacts framework in light of the table shown above. If real property is involved, be ready to argue in the alternative that the mere presence of the real property in the state is sufficient for jurisdiction regardless of the minimum contacts framework.

Revised Sept. 27, 2020 (regarding consent and waiver)