Document: 379 U.S. 378 85 S.Ct. 528 13 L.Ed.2d 365 UNITED STATES, Petitioner,v.FIRST NATIONAL CITY BANK. No. 59. Argued Nov. 16, 1964. Decided Jan. 18, 1965. Louis F. Oberdorfer, Washington, D.C., for petitioner. Henry Harfield, New York City, respondent. Mr. Justice DOUGLAS delivered the opinion of Court. 1 This case presents a collateral phase litigation involving jeopardy assessments some $19,000,000 made by Commissioner Internal Revenue against Omar, S.A., Uruguayan corporation. The charged that income had been realized within United States on which tax was due. On same day respondent served with notice levy and federal lien. At time petitioner commenced an action in District Court naming as well others, defendants. Personal jurisdiction over acquired; but date argument here, Omar not yet served. That requested, inter alia, foreclosure lien upon all Omar's property, including sums held account or credit foreign branch offices respondent.1 It also requested that, pending determination action, be enjoined from transferring any property rights to Omar; affidavits filed complaint averred removing its assets States. 2 Court, basis affidavits, issued temporary injunction enjoining now it without States, indicating would modify order should compliance shown violate law. 210 F.Supp. 773. Appeals reversed divided vote both panel three, 321 F.2d 14, en banc, 325 1020. is here writ certiorari. 377 951, 84 1629, 12 496. 3 Title 26 U.S.C. § 7402(a) gives power grant injunctions 'necessary appropriate enforcement internal revenue laws.' Since has personal respondent, interim relief requested? We are advised respondent's only debt payable at Montevideo. said creditor, can assert those debtor, under law depositor head office where there demand wrongful refusal branch. Sokoloff v. National City Bank, 239 N.Y. 158, 145 N.E. 917, 37 A.L.R. 712; 250 69, 164 745. point emphasized obligation due Montevideo—an apparently dischargeable currency, dollars. Therefore, runs, no claim debtor (Omar) creditor reach. 4 need consider this juncture refinements reasoning. For narrow issue us whether (the States) may pendente lite protect whatever have who before court service. If were clear beyond reach so far service concerned, we quite different case—one intimate opinion. But 302(a) Civil Practice Law Rules, 7B McKinney's Consol.Laws Ann., 302, exercised 'non-domiciliary' 'transacts business state' cause arising out such transaction, event out-of-state provided 313.2 Federal Rules Procedure Rule 4(e) 4(f) allow party inhabitant State found therein summons manner circumstances prescribed state statute.3 See Montreal Trust Co., 35 F.R.D. 216. 5 To sure, arose, filed, statute became effective. has, however, indicated suit instituted after effective statute, will normally apply transactions occurring date. Simonson International 14 N.Y.2d 281, 290, 200 N.E.2d 427, 432, 251 N.Y.S.2d 433, 440. further where, instant case, based prior transaction 'the new act shall except 'would feasible work injustice' 'to proceedings' * *.'4 Ibid. seems obvious future attempt Government serve process considered 'further proceeding' litigation. Accordingly, judge injunction, prospective application, light present remedy affords.5 And our review exercise equity granted must public interest involved: 'Courts may, frequently do, go much farther give withhold furtherance than they accustomed when private interests involved.' Virginian R. Co. System Federation, 300 515, 552, 57 592, 601, 81 L.Ed. 789. see Morgan, 307 183, 194, 59 795, 801, 83 1211; Hecht Bowles, 321, 330, 64 587, 88 754. 6 acquired, able collect what could collect. opportunity make collection lost limine merely because agreed-upon place their contract. 7 Whether Montevideo 'separate entity,' thought, germane issue. separate entity sense insulated managerial prerogatives. Respondent actual, practical control branches; organized 24, authorizes 'To sue sued, complain defend, equity, fully natural persons'—as one entity, bank's affairs are, therefore, personam entered home office. Once obtained, authority 'freeze' control, Jersey 283 473, 482, 51 519, 521, 75 1176. 8 say country treat bank overseas often caught web extraterritorial activities ken courts competence. have, involvement showing mere 'freezing' accounts, law, cf. Societe Internationale Rogers, 357 197, 211, 78 1087, 1095, 1255, risk double liability. Cf. Western Union Telegraph Com. Pennsylvania, 368 71, 82 199, 139. reserved enter protective character. 773, 775. if, argued dissent, might embarrassing diplomacy, remains open Executive Branch, which, remembered, moving proceeding. 9 eminently prevent dissipation assets. Morris & Essex Cir., 135 711, 713—714. taxpayers facing either transfer abroad dissipate accounts American institutions taxpayer made. Such scheme underfoot aver. Unlike De Beers Consol. Mines 212, 65 1130, 89 1566, subject provisions final decree cause.' Id., 220, 1134. conclude 'a reasonable measure preserve status quo' (Deckert Independence Shares Corp., 311 282, 61 229, 234, 189) adjudication merits. 10 Reversed. 11 HARLAN, whom GOLDBERG joins, dissenting. Court's reflects expansive view tie up owned situated I cannot agree. Service first focused corporation, 1959 return seeking $10,000 regulated investment company. Investigation relatively small refund revealed possibility fact owed very substantial amount taxes Government. maintained several securities brokers, purchase sale orders communicated resulted realization large profits. lawyer acting contended these gave rise liability holding In meeting investigating agent May 1962, warned if persisted company, 'Omar likely liquidate holdings send money country.'1 did persist. October 31, totaling $19,300,000, Southern defendants brokerage houses dealt, banks First Bank (hereinafter Citibank) here. By part succeeded liquidating funds country. Some transferred Citibank's Montevideo, Uruguay, deposit filed. As sought, asked (we informed size) until obtained Omar. Citibank contested ground situs therefore court. two years since. thus 55 Wall Street, City. 15 presented is: Did freeze Omar? argues stem sources: quasi rem owing Citibank, capable controlling even though outside court's jurisdiction. Despite enigmatic unsupported statement 'there cause," ante, p. 385, does decide relied. rests entirely theory. Both theories my view, demonstrably insufficient. I. 16 PERSONAL JURISDICTION. 17 upholds acquisition enjoin (over jurisdiction) allowing 18 There doubt powers available adequate accomplish end view. sufficient require order, sanctions contempt inflicted officers district.2 'jurisdiction' synonymous naked power. combination policy. Judge Learned Hand Amey Colebrook Guaranty Sav. 92 62, containing elements us. reversing interlocutory sitting Vermont cutting timber Maine, said: 19 'The word, 'jurisdiction,' connection somewhat equivocal; it; personally appeared his orders, corporation be; he sequester Vermont, find any, proceed contempt. although defendant asserting still improper him do so. Courts always exert themselves full, direct parties effectively compel, forbearance sometimes called lack 'jurisdiction.' What reserves make, dealing real territory, altogether plain; things, freely hold legal interests.' 63. 20 problem this: Granting bringing bear coercive ought it? Or put question statutory terms,3 'appropriate' laws? 1. Need Jurisdiction Over 21 starkest form. Assuming (see Part IV, infra, 404) likelihood obtaining why use power, extent brought others world avowed purpose coercing into paying taxes? 22 Use judicial coerce unheard of. authorizing render decrees laws' clearly intends traditional end.4 interpreted authorization employ radically extremely far-reaching forms more freewheeling approach international domestic cases.5 Neither nor extraordinary Suffice contrary position taken, serious constitutional problems arise. 23 2. Improbability Obtaining Time Injunction Was Issued. 24 basic notions justify issuance exist probability jurisdiction, judgment, respect person sought affected.6 contest proposition, virtually concedes issued, insufficient order. Section alone relies, become months later.7 25 No other theory offered issued.8 3. Evaluating 'as now.' 27 course left Indeed ruled retroactively validate actions cases taken enactment, applied proceedings equitable so.9 Thus glib assumption interpret traded long distance own Exchanges,10 nonetheless show, matter continuing existence inescapable reasons impossible. 28 (a) so-called 'temporary' effect years. During form obtained. appellate delay. review. contesting Citibank. Nothing pertaining precluded excused proceeding otherwise having neither 404), judgment being it, during peso fallen 60%.11 chance removed Indeed, (supra, 386), move later. effort obtain issued; enacted; supposedly altered chose argue case. expresses latter event, obviously irrelevant equities somehow explains excuses Government's failure acquired surely untenable. petition rehearing July 10, 1963, following initial Appeals' banc. elapsed since time. Were itself conclusive stated unequivocally rehearing: 29 seeks alia taking necessary steps effectuate Omar.' 30 face way excuse avoid Government, reason neglect inability, failed acquire ample it. Yet inexplicably finds order.12 allegedly withdrew taxation country, naturally sympathetic aspect justification perpetuating basis, tied years.13 Alleged dodgers, crime, entitled treatment. hand stayed reaches limits. 31 (b) situation examined originally now, show frozen ultimate execution. subjected government levy, freezing permit attach directly expressed how difficulty avoided. 32 obstacle skirted fashion. 302 mailing letter Uruguay pursuant York's substituted statute.14 Judgment then together When refuses comply voluntarily—it punished contempt—a officer appointed 70 sent name States.15 payment, breach contract pay demand. An n. 27, infra). accrues York, garnish satisfy judgment. Of course, debt, 'within district' necessitating elaborate theories. 33 procedural cakewalking commend manifest. Foreign customary practice (which presumably follows) enforce judgments.16 Therefore undoubtedly valid court-appointed borders. proper governs contract, Zimmermann Sutherland, 274 253, 47 625, 71 1034. 34 Furthermore prospect startling district court, aware dispatch self-help.17 II. THE DE BEERS AND DECKERTS CASES. surprising content cursorily lay aside Consolidated Mines, Ltd. examination indistinguishable 36 Sherman antitrust African-based diamond companies alleging monopolization conspiracy restraint trade. All doing With preliminary belonging opinion, given support motion were: "The injury America withdrawal deposits, diamonds irreparable sequestration means enforcing corporate principal carried countries quickly withdraw render.' 38 'Amongst supporting papers affidavit counsel investigation shows named herein endeavored subjecting making sales requiring customers advance purchases." U.S., 215—216, 1132. 39 Under Act restrain violations act.' (26 Stat. 209, (1958 ed.)), and, 'allwrits' section Judicial Code, 'issue writs aid respective jurisdictions agreeable usages principles law' (now 1651 ed.)). construed grants limited powers. demonstrated remoteness defendants, vacated noted unlike borders stop alleged monopolistic practices little meet voluntary $19,300.000. 40 distinguish trial award injunctive relief, whereas successful, award. However, recognized ultimately Clearly emphasizing scope instance too remote terms outset Remoteness determinative point, cause, stronger amounts govern litigation.18 41 puts forth Deckert 189, instead most analogous one. bill insolvent fraudulent vendor third vendor. plaintiffs hands frozen, sustained request. Distinguishing features many. involved problems. concerned. funds. contingency depended plaintiff win suit; thus, remoteness. pp. 542—545), attached court.19 III. 42 OVERALL BALANCE OF EQUITIES CONSIDERATIONS AFFECTING JURISDICTION.20 43 Certainly remark 'public interest' mean ignore duty balance equities. is, just overall benefits accrue result today's decision. 44 Except context comparatively rare element surprise side, utility taxcollecting weapon minimal. regulation adopted declares freeze-order hinder delay office.21 words, snare smart unscrupulous enough stupid uninformed enough, decision, provide toy pistol, flexes muscles never imagined. 45 minimal, detriments substantial. 46 expose innocent stakeholder, exactly kind administrative hazards entity' designed obviate. recognize States' multiple permitted slander credit. offer conflicts hedge dangers, operating best places heavy burden blameless situation, discovering operation unclear sure sued payment litigated. loath another (it fear York), impossible establish late. manages account, afterwards established liable recoupment, eventuality provision oral oppose. 48 (c) alleges banking hurt depositors discouraged using reached courts. gauge seriousness possibility, stakeholder resolved favor. 49 (d) Code provides rough translation: 50 'Art. 511. Judgments rendered states Republic (Uruguay) applicable treaties. 512. treaties nation rendered, laws nation, Republic. 52 513. proceeds jurisprudence, Tribunals Republic, (sic) force here.'22 53 sues plead defense, speculates (ante, 384 385). Uruguay's reciprocity principle decision implicitly signifies similar court.23 Operating York.24 am reluctant uphold type indeed significant all. A nothing bare propriety rest reliability usual recognition problems,25 taxing authorities, something judging. 54 lose sight modern developed framework whose various processes governed Due Process Clause judgments full faith structure. Great care reserve extending field, permitting IV. QUASI IN REM 56 consideration chooses decide. turns attach.26 conditional right wrongfully refused, 745;27 recent decisions determines nature purposes. Bess, 51, s.Ct. 1054, 1135, died leaving unpaid year. Several life insurance policies estate. 58 'We Bess possessed lifetime, meaning 3670, 'property' 'rights property' perfected 1946 attach. 3670 creates attaches consequences, federally defined, created look Bess' defined law.' 55, 1057.28 them. drawn cash surrender value; lifetime extent. true value policies. answer contention treated differently 60 '(O)nce determined insured requirements inoperative attachment liens statutes favor States.' 56—57, 1058. analysis—that rights, them—the concluded enforced beneficiary value. 62 Even York. treats entities makes primarily ordinary garnishing creditors, arguably application Aquilino 363 509, 80 1277, 1365, accept evaluate underlying rationale needs collection. general contractor defaulted subcontractors mechanics' liens. Money owner suit. 'mere title' fund, trust subcontractors; argued, himself statute. remanding determine contended, despite definition contractor's creditors prevailed property. (See dissenting 516, 1281.) 63 ascertaining taxpayer's reconciling claims competing lienors logic sound principles. strikes between legitimate creating defining citizens, necessity uniform administration statutes.' 514, 1281. entities, cripping effects each payments branches.29 policy immediate Aquilino, create rule not, think, incidental contracting simply convenience thwart law—for instance, agreement certain consummate transaction—but State, parties, incidental. recognizes predicated can, right, satisfaction derive limited. analogize company condition policyholder collect.30 override requirement surrender, cases, readily distinguishable. parties; indeed, characterized housekeeping detail.31 later time, guaranteed garantee protection 66 conclusion remembered interpreting.32 1655, U.S.C., 'Lien enforcement; absent defendants,' district.' Montevideo.33 hold,34 common understanding indulge wholly novel interpretation governing 67 CONCLUSION. 68 cited relating dumping garbage sea off coast Jersey.35 slender reed stands Beers, basically bar, plus powerful considerations enumerated above. preponderance leads 'appropriate (§ 7402(a), 3, supra), did, (ibid.) challenged follows (a proposition me unacceptable) regarded entailing abuse discretion magnitude mischievous radiations jurisprudence supervisory powers.36 69 While utmost sympathy efforts revenue, think permissible affirm Appeals. These branches corporations parts single, chartered §§ 601—604; Service, 271 616. appearance Tax 20, redetermination deficiencies 4(e), 1, reads relevant part: 'Whenever (1) summons, notice, lieu state, (2) appear respond defend garnishment seizure located rule.' 4(f), 'All subpoena anywhere territorial limits held, authorized rules, state.' conclusions 10003, 10003: 'This hereafter commenced. actions, particular injustice, former procedure applies. Proceedings takes ineffectual impaired attempted primary injunction. Appeals: jurisdictional then, Bank. Certainly, stage proceeding, inconsequential res taxpayer.' went rejected, wished deposits 'constitute Court.' Finally stated: 'It concludes becomes relevant. afforded stand efforts.' alternatively rem,' previously, pass. Affidavit William T. Gottlieb, agents. Penn Lord Baltimore, Ves. sen. 444, 454 (Ch. 1750) (1st Am. ed. 1831); Deschenes Tallman, 248 33, 161 321. 1954, provides: processes, judgments.—The civil ne exeat republica, appointing receivers, laws. remedies hereby addition exclusive Compare 1566; Appalachian Coals, Inc. 288 344, 377, 471, 480, 77 825. Banco Nacional de Cuba Sabbatino, 376 398, 923, 804. Hall Signal General 153 907; A. H. Bull Steamship Marine Engineers' Beneficial Assn., 332, 337. September 1963. 1962. '(a) Acts non-domiciliary, executor administrator, acts section, domiciliary through agent, he: '1. transacts state; '2. commits tortious defamation character act; '3. owns, uses possesses state. '(b) Effect appearance. Where solely confer causes section.' lame suggestion voluntarily evidently purposefully withdrawn question, putting surprising. title (an Lehman Bros. attached); recognized, appearance, (There split appearances permitted. Balanovski, 236 298 (C.A.2d Cir.), cert. denied, 352 968, 357, 322, therein. Developments Law: State-Court Jurisdiction, 73 Harv.L.Rev. 909, 953 (1960).) prevail courts, extend authorize piece command wherever located, conceivably affected 1960 Arizona bank. existing statutes. plaintiff's appeal Appeals, appellant tried rely bank, affirmed dismissal complaint. 288, 431, 439; Purdy Argentina, 333 95, 962, 653 (decided Illinois patterned). Grobark Addo Machine Ill.2d 426, 158 73; Insull World-Telegram 273 166; Gas Appliance Corp. AB Electrolux, 270 472. Exchange Rates, Times, Oct. 47, col. 5; 11, 1965, 37, 4. assertion changed belied statement, prominently featured rehearing, brief heretofore every effectuated *.' alternative below done statements quoted (gleaned footnote) indicate (rightly, think) weaker point. particularly unknowns imponderables posture saturated. Thus, firm indication country's interests, stake, Can doubted better removed? Had delayed but, instead, proceeded (if possible) execution come opaqueness removed. validity defense account; moot earlier attacked running principle, successfully ability stems 313 'A domiciled 301 resident possession duly qualified attorney, solicitor, barrister, equivalent jurisdiction.' 'If directs execute conveyance land deliver deeds documents perform specific fails specified, cost disobedient like party.' Harden, (1963) Can.Sup.Ct. 366, D.L.R.2d 721; India Taylor, (1955) A.C. 491 (H.L.); Peter Buchanan Ld. Macharg McVey, 516 (Eire Sup.Ct.). Moore Mitchell, 600, 1354, aff'd grounds, 281 175, 673; Colorado Harbeck, 232 133 357. Contra: Oklahoma Comm. Rodgers, 238 Mo.App. 1115, 193 S.W.2d 919. used change understanding. Owens, Income Treaties: Their Role Relieving Double Taxation; Rutgers L.Rev. 428, 449—451 (1963). treaty Treaties Force, 205 (Dept. 1964). Nations, generally chary officials purposes serving process, unlikely official entering Smit, Aspects Procedure, Col.L.Rev. 1031, 1040 (1961); Harvard Research Law, Draft Convention Assistance, Am.J.Int'l L., Spec.Supp. II, 43—65 (1939); Jones, Assistance: Procedural Chaos Program Reform, Yale L.J. 534—537 (1953); Longley, Serving Process, Subpoenas Other Documents Territory, A.B.A. Int'l Comp.Law (1959). derives bizarre Branch' 384-385). certainly odds wish. Department easy lend aid, issuing passport otherwise, advanture. reliance 1176, inapposite coast. involved, enforcement, parties. circular route calculated offensive manner. beginning journey. last feature heavily relied tax-lien directly. Prior amendments 4(e)), defendant. Big Vein Coal Read, 229 694, 1053. Those once decided exists generality raising question. peculiar relate whether, established, exercised. '26 CFR 301.6332—1 (as amended T.D. 6746, Fed.Reg. 9792) Surrender levy. Requirement—(1) general. Any (or obligated to) shall, director, discharge obligation) demand, process. '(2) Property banks. Notwithstanding subparagraph paragraph, engaged to), unless specifies director deposits. specify believes— '(i) States; '(ii) made, consist, whole part, imposed Code. 'For subparagraph, term 'possession includes Guam, Midway Islands, Panama Canal Zone, Commonwealth Puerto Rico, Samoa, Virgin Wake Island.' Codigo Procedimiento (Couture, 1952). amendments, Index Latin Legislation, Library Congress. Ehrenzweig, Conflict Laws, 45, (1962); Hilton Guyot, 159 113, 139, 95. distinction parent offices. Reese, Status Country Rendered Abroad, 783 (1950). 1655 ed.) 1655. Lien 'In to, remove incumbrance cloud district, appear, certain. 'Such practicable, found, persons charge any. published direct, less week six consecutive weeks. allowed, regards affect action. district. 'Any notified year thereupon set costs deems just.' Bluebird Undergarment Gomez, 139 Misc. 742, 249 N.Y.S 319; Cronan Schilling, Sup., 100 474, 282 App.Div. 940, 126 192; Newtown Jackson Animashaun, 148 66; McCloskey Chase Manhattan 936, 228 825, 183 227; Zimmerman Hicks, 443, sub nom., Richardson (1927) Prob. 228, 137 L.T.R. (n.s.) 492; Comment, Mich.L.Rev. 90 (1957); Note, Cornell L.Q. analytically, damages 6321. neglects (including interest, additional amount, tax, assessable penalty, thereto) personal, person.' (1957). E.g., Equitable Life Assurance Society 331 29; metropolitan Ins. 256 17; Metropolitan 130 149. 29, 33. Crane Commissioner, 1047, 91 1301. Banana Fruit 213 347, 356—357, 511, 512—513, 826. Richardson, 492. known, situations required supra. appears, limit length acquiring

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