Opinion ID: 1540447
Heading Depth: 1
Heading Rank: 13

Heading: Shaffer v. Heitner

Text: In Shaffer, the United States Supreme Court held that Delaware could not exercise jurisdiction in a stockholder derivative suit brought against nonresident corporate officers, whose only contact with the state was their ownership of a minority interest of stock in a Delaware corporation. Shaffer v. Heitner, 433 U.S. 186, 97 S.Ct. 2569, 53 L.Ed.2d 683 (1977). In Shaffer, the defendants argued that their ownership of stock in a Delaware corporation was insufficient to satisfy the requirements of International Shoe. Id. at 193, 97 S.Ct. at 2574. The United States Supreme Court held that the minimum contact test that had been used in in personam actions was also applicable to in rem assertions of jurisdiction. Id. at 207-12, 97 S.Ct. at 2581. The Shaffer majority applied that test and concluded that since the derivative claims being asserted were unrelated to the property that had been seized, an exercise of jurisdiction violated due process because it did not meet the minimum contact standard of International Shoe. Id. Nevertheless, after reaching that conclusion, based upon specific facts that had been presented, the Shaffer Court acknowledged 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. Id. at 208, 97 S.Ct. at 2581. [25] The implications of Shaffer have been considered by legal scholars at length. [26] However, as one legal scholar has observed whatever its nuances, the obvious impact of Shaffer is to limit jurisdiction where the property of a nonresident is seized in order to provide a basis for prosecuting an unrelated claim. Lilly, Jurisdiction over Domestic and Alien Defendants 69 Va.L. Rev. 85, 98 (1983).