## Facts

- A nonresident Greyhound shareholder filed a derivative action in Delaware against Greyhound, its subsidiary, and numerous present and former officers and directors.
- The complaint alleged breach of fiduciary duty based on corporate actions taken outside Delaware that produced significant antitrust and contempt liabilities.
- To obtain jurisdiction over nonresident individual defendants, the plaintiff invoked Delaware’s sequestration statute to “seize” defendants’ Delaware-situs property.
- The property identified for sequestration consisted of shares, options, warrants, and related rights in Delaware corporations; “stop transfer” notations were placed on corporate records.
- Defendants received notice by mail and publication and entered a special appearance to quash service and vacate the sequestration order.
- Defendants argued, among other things, that they lacked sufficient contacts with Delaware under the due process standard associated with minimum contacts and fairness.

## Issues

1. Whether a state may assert quasi in rem jurisdiction over nonresidents solely because their property is deemed present in the state by statute, when the property is not the subject of the litigation.
2. Whether all assertions of state-court jurisdiction (in personam, in rem, and quasi in rem) must satisfy the minimum-contacts standard of due process.

## Decision

- The Supreme Court reversed the Delaware Supreme Court.
- The Court held that all assertions of state-court jurisdiction, including in rem and quasi in rem, must be evaluated under the minimum-contacts framework.
- Delaware could not constitutionally exercise jurisdiction over the nonresident officers and directors based only on sequestration of stock and related interests deemed located in Delaware.
- The Court rejected reliance on territorial formalism where the seized property was unrelated to the cause of action and functioned only as a jurisdictional device.
- The Court disapproved prior doctrine allowing attachment-based jurisdiction without a minimum-contacts inquiry, including the approach exemplified by Harris v. Balk.

## Legal Principles

- Due process requires that state-court jurisdiction be reasonable in light of the relationship among the defendant, the forum, and the litigation.
- The minimum-contacts test governs not only personal jurisdiction but also jurisdiction asserted through in rem or quasi in rem mechanisms.
- The statutory “location” of intangible property in a forum, without additional forum-directed conduct tied to the claims, does not by itself establish minimum contacts.
- When the attached property is neither the subject matter of the dispute nor the source of the plaintiff’s claims, attachment alone cannot supply constitutionally sufficient contacts.
- Jurisdiction may not rest on contacts created only by another party’s unilateral acts or legal fictions that do not reflect a meaningful forum connection.

## Conclusion

The Court held that Delaware’s seizure of defendants’ stock and related interests to force their appearance in a derivative suit based on out-of-state conduct violated due process, because quasi in rem jurisdiction—like any other form of jurisdiction—requires minimum contacts between the defendants, the forum, and the litigation.


Shaffer v. Heitner, 433 U.S. 186 (1977)