Pennoyer v.

Neff

Notes and Problems

1. Before considering anything else, look back at the facts.

➤ Do we know whether Neff ever learned about the existence of Mitchell’s original lawsuit?

➤If not, isn’t the absence of notice a strong objection to the way in which the first lawsuit was
conducted?

➤ Did the court discuss this objection?

2. The case operates on two levels—simple facts and lofty doctrine.

➤ According to the opinion, what facts would have to be different for the Oregon courts to
have had jurisdiction to enter a valid judgment in Mitchell’s original suit against Neff?

3. The Supreme Court confronted not just a case but a significant political and economic problem. The
Court had to steer between two rocks: stopping interstate commerce and permitting interstate
“piracy by judgment.”
a. As an example of the first problem, suppose a transaction much like that in Pennoyer: A
New York purchaser buys a piece of property in Oregon.
➤ If title proves defective, could Purchaser sue Seller in New York?

➤ If Purchaser’s check bounces, could Oregon Seller sue Purchaser in Oregon?

➤ Unless distant parties can reliably resolve disputes, they will not deal with each other.

➤ How does Pennoyer answer these questions?

b. As an example of the second problem, imagine a world with the Full Faith and Credit Clause
but without Pennoyer. Unscrupulous litigants in a distant state could file meritless
complaints, recover default judgments, and then bring those judgments to the defendants’
home state for execution. The opinion hints at this concern:
If, without personal service, judgments in personam, obtained ex parte against non-residents and
absent parties, upon mere publication of process, which, in the great majority of cases, would never be seen
by the parties interested, could be upheld and enforced, they would be the constant instruments of fraud
and oppression. Judgments for all sorts of claims upon contracts and for torts, real or pretended, would be
thus obtained, under which property would be seized, when the evidence of the transactions upon which
they were founded, if they ever had any existence, had perished.
c. As you read the cases that follow Pennoyer, consider how they steer between these two
dangers—blocking commerce and avoiding abusive litigation.
4. After announcing that it would be affirming the judgment on grounds different from those
articulated below, the opinion has an odd structure.
a. Starting with the sentence (partway through the third paragraph of the edited opinion),
“And that they are sound would seem to follow from two well-established principles. … ,”
the opinion enunciates a series of broad categorical propositions: “every State possesses
 exclusive jurisdiction and sovereignty”; “no State can exercise direct jurisdiction and
authority over persons or property without its territory”; “Any exertion of authority of this
sort beyond this limit, is a mere nullity, and incapable of binding such persons or property in
any other tribunals.”
b. The remainder of the opinion (starting with the paragraph that begins, “But as contracts
made in one State. … ,”) the opinion qualifies and takes back some of its more extreme
statements about states’ jurisdictional authority.
c. It thus becomes important both to recognize the conceptual structure implied by the
extreme statements and then to understand how the opinion qualifies them.
5. Let us start with the conceptual structure, which the opinion describes in the lofty Latinate phrases
that divide the world into two jurisdictional categories: in personam and in rem. The case assumes
that jurisdiction is about power and that one can divide power into two apparently distinct
categories—power over persons and power over property. Making that distinction implies that one
could sensibly think about Oregon’s having power over Neff’s property (had it gone about acquiring
it in the proper way) as a question separate from its having power over Neff himself. Power over
Neff himself came to be known as jurisdiction in personam (over the person); power over his
property came to be known as jurisdiction in rem (over the thing). Modern legal scholars doubt that
the distinction holds up. The best critique appears in Geoffrey C. Hazard, Jr., A General Theory of
State Court Jurisdiction, 1965 S. Ct. Rev. 241. As you will see, in recent years the Supreme Court has
reconsidered this distinction.
a. In personam jurisdiction looks, at first, refreshingly simple, as described by Pennoyer. To
obtain jurisdiction over a nonresident defendant the plaintiff must arrange to have
defendant personally served with process within the borders of the state in question. So, in
the hypothetical in Note 3, Purchaser could sue Seller in New York only if he could serve him
with process in New York; otherwise Seller would be beyond the range of the New York
court’s power. In Pennoyer’s view, serving Neff by other means (e.g., by mail) or by personal
service in a different state does not work. Working with the facts of Pennoyer, explain why
the Oregon court did not obtain in personam jurisdiction over Neff.
b. In rem jurisdiction, the more obscure category, flows from a problem created by the rules
for in personam jurisdiction: People sometimes own property distant from their usual
personal residence. In the hypothetical case in Note 3, suppose that, after Purchaser of the
Oregon land returned to New York, the check bounced, and Seller argued that he still owns
the property. Can Purchaser, by remaining out of state—perhaps indefinitely—prevent
Oregon from giving clean title back to Seller (and thus enabling him to sell to a solvent
purchaser)? If in personam jurisdiction were the only possibility, nothing could be done until
Purchaser returned to Oregon and could be served with process. Unwilling to see that
result, the court created a procedure by which a court located in the same state as the
property could enter a judgment disposing of that property—by seizing it at the outset of
the lawsuit. Pennoyer calls that procedure in rem jurisdiction. Working with the facts of
Pennoyer, explain why the Oregon court did not obtain in rem jurisdiction over Neff.
6. So far, so good in the world of concepts. The waters begin to cloud in the paragraph that begins “To
prevent any misapplication … ,” in which the opinion qualifies and retracts some of its broad
statements. It does so in two ways:
a. It says that a state has jurisdiction over “the status of one of its citizens towards a non-
resident.” What does that mean? The same paragraph tells us: it’s marriage and divorce.
Without this paragraph Marcus Neff could abandon his wife in Oregon, move to another
state, and leave her unable to obtain a divorce. The phrase just quoted suggests the
hypothetical Mrs. Neff could obtain an Oregon divorce, because Oregon would have
jurisdiction over her “status” as a married person, even if she could not locate or serve her
husband in Oregon. In fact, courts wrestled with this situation for a century, wishing to allow
abandoned spouses to obtain divorces, but not to allow abandoning spouses to move to
another state and obtain a divorce without satisfying their obligations of support.
b. The next paragraph of the opinion says that states can require someone doing business
there “to appoint an agent or representative in the State to receive service of process and
notice in legal proceedings instituted with respect to such” business. By thus “consenting” to
service of process one would, in the world of Pennoyer, consent to jurisdiction. Could
Mitchell in his retainer letter have required Neff to appoint an agent to receive process? As a
matter of personal jurisdiction doctrine, probably yes; as a matter of legal ethics, maybe not.
(Mitchell was Neff’s lawyer and thus owed him a duty of undivided loyalty: Would it breach
that duty to ask Neff to make it easier for Mitchell to sue his own client for a fee?) In the
wake of Pennoyer many states passed statutes requiring those doing business in the state to
appoint an agent—often a state official—empowered to receive process on their behalf.
International Shoe v. Washington

Notes and Problems

1. The case holds that International Shoe is subject to personal jurisdiction in the state of Washington
in a suit brought to collect unemployment taxes.
➤ What are the implications of that holding?

a. Suppose that right after the Supreme Court decision a Missouri citizen injured by one of
International Shoe’s trucks backing out of its Missouri factory sued in Washington state
court.
➤ Jurisdiction?

➤ If you have the (correct) intuition that the answer is no, why not?

b. In the key paragraph of the opinion the Court writes that, to be subject to a state’s
jurisdiction, a defendant must “have certain minimum contacts with it such that the
maintenance of suit does not offend ‘traditional notions of fair play and substantial justice.’
” A perfectly good principle, but not exactly a clear recipe. One commentator has suggested
that the basic test of International Shoe is a good one but that because of its generality it
must be subjected to a process of “arbitrary particularization” in order to come up with
workable rules. Geoffrey C. Hazard, Jr., A General Theory of State-Court Jurisdiction, 1965
Sup. Ct. Rev. 241, 283. One can read the chain of cases following International Shoe, several
examples of which you will encounter in this chapter, as examples of Hazard’s arbitrary
particularization.
2. To understand the key development in International Shoe try this idea out on a set of simple
hypothetical cases. Assume that International Shoe is incorporated in Delaware and has its
headquarters and principal manufacturing operations in Missouri. Further assume that International
Shoe has no salespeople in Wyoming, sells no shoes there, buys no cowhide there, and does no
business there of any sort—except to use the roads for transporting its wares to other states.
a. A truck loaded with shoes, owned by International Shoe Co. and driven by one of its
employees, travels through Wyoming on its way to the State of Washington. While in
Wyoming, the truck collides with a pickup driven by a rancher, who is injured in the
accident. The rancher files suit against International Shoe in Wyoming, alleging negligence
by the International Shoe driver.
➤ Jurisdiction in Wyoming?

b. In Wyoming there also lives a former employee of International Shoe, who used to work for
the company at its Missouri headquarters. Alleging that she was wrongfully discharged from
her job in Missouri, she files suit against International Shoe in Wyoming.
➤ Jurisdiction?

➤ What is the rationale on which one could explain a different outcome in 2a and 2b?
 c. Now imagine the plaintiffs in 2a and 2b file suit in Missouri.
➤ In determining whether the state has personal jurisdiction over International Shoe,
would it make any difference whether the plaintiff was the rancher in 2a or the former
employee in 2b?

3. One explanation of why “no jurisdiction” is the answer to Notes 1a and 2b is that International Shoe
creates a sliding scale, in which a high level of activities will support jurisdiction even over claims
unrelated to those activities. By contrast, a low level of activity (“contact,” in the jargon) will support
jurisdiction, but only over claims related to that contact. The opinion hints at this idea, which has
been elaborated in subsequent cases and commentary:
While it has been held, in cases on which appellant relies, that continuous activity of some sorts within a state is
not enough to support the demand that the corporation be amenable to suits unrelated to that activity, there have
been instances in which the continuous corporate operations within a state were thought so substantial and of such a
nature as to justify suit against it on causes of action arising from dealings entirely distinct from those activities.
(Emphasis added.)
From the idea of a sliding scale for personal jurisdiction courts and scholars have implied an entire
vision of jurisdiction.
a. General jurisdiction. In some cases the defendant will have such substantial contacts with the
forum state to make it fair to assert jurisdiction even over claims unrelated to those contacts.
For example, suppose an individual is a resident of California. She could be sued in California
even over contracts or torts concluded or committed in other states or nations. Likewise, take a
corporation like Microsoft, which has its chief place of business in Washington State. Under the
theory of general jurisdiction, Microsoft could be sued in Washington even over contracts or
torts concluded or committed in Idaho or Germany. As Daimler AG v. Bauman (infra page 137)
put it, “A court may assert general jurisdiction over foreign (sister-state or foreign-country)
corporations to hear any and all claims against them when their affiliations with the State are so
‘continuous and systematic’ as to render them essentially at home in the forum State.” Later in
this chapter we return to the question of general jurisdiction; for now, keep in mind the basic
proposition that every individual and business entity in the United States has at least one state
where they can be sued on any claim. To use the language of Daimler, an individual will be “at
home” (and thus amenable to suit on all claims) in the state of her domicile. Corporations will
similarly be “at home” both in the state of their incorporation and in the state that is their
principal place of business (if that differs from their state of incorporation). In later cases, we
will consider where else they can be sued.
b. Specific jurisdiction. Where the defendant’s activities fall short of general jurisdiction, the
minimum contacts analysis of International Shoe becomes important. In those cases courts
worry both about the extent of those contacts and about the relation between defendants’
contacts with the state and the claim on which plaintiff is suing. Suppose, for example, Driver
has never been in Missouri but, in the course of a vacation, enters the state, and injures a
pedestrian. Specific jurisdiction would allow the injured pedestrian to sue Driver in Missouri on a
claim arising from that accident—but not on other, unrelated claims. As the Daimler Court put
it, “International Shoe recognized, as well, that ‘the commission of some single or occasional
acts of the corporate agent in a state’ may sometimes be enough to subject the corporation to
jurisdiction in that State’s tribunals with respect to suits relating to that in-state activity.”
Commentators describe such cases as instances of specific jurisdiction, in which jurisdiction
exists for the specific claim in question but not necessarily for other claims. In the decades
following International Shoe, courts tried to work out its application to varying factual patterns.
In particular, they wrestled with the question of whether the holding of International Shoe
provided any limits: Was every defendant (at least every business defendant) subject to
jurisdiction anywhere it did any business? Two cases decided by the Supreme Court about a
decade after International Shoe gave contrasting answers to that question. Both are still
frequently cited and present paradigmatic instances of the issues that arise in applying
International Shoe.