Jurisdiction over the Parties or Things – In Rem Jurisdiction and Quasi In Rem Jurisdiction

Terms:

In rem jurisdiction:
In rem jurisdiction gives a court the authority to determine title to an object or real property. It is most often implicated when possible claimants are unknown.

Quasi in rem jurisdiction:
Quasi In Rem Jurisdiction is when a court uses its in Rem jurisdiction over property to "force" a litigant to appear in court by attaching property that belongs to the litigant. In this way, a court can use in rem jurisdiction to "get around" the fact that it may not have personal jurisdiction over one of the litigants. While the court cannot compel attendance by the litigant, it can indirectly do so by forcing the litigant to choose between losing his or her property and appearing in the court.

In Rem Jurisdiction

In rem jurisdiction usually involves actions concerning title to property. It is usually invoked when courts are asked to determine the rights of all people concerning some property. For example, in rem jurisdiction would apply to a case in which someone has found a diamond ring and has initiated an action to determine to whom the ring belongs.

For a court to exercise in rem jurisdiction, five conditions must be satisfied:

Value of property: The property must be valuable.

Location of property: The property must be located within the territory in which the court has jurisdiction. In other words, at the time the action is commenced, the property must be within the jurisdiction in which the court sits.

Control of property: The court must have control of the property before it is able to exercise in rem jurisdiction. While the court does not have to have actual possession of the property, it must control the property to the exclusion of the parties.

Procedural due process: To satisfy constitutional muster, the parties who may have an interest in the property must receive adequate notice of the pending action and must have the opportunity to be heard. Because in rem jurisdiction involves title or interest in property, and potential defendants may not be immediately known, publication in a newspaper usually satisfies this requirement.

Substantive due process: Because in rem actions usually involve property in which the state has an interest, substantive due process is often satisfied easily. The assertion of in rem jurisdiction does not require contracts between the parties interested in the property and the forum state.

Quasi In Rem Jurisdiction

Quasi In Rem Jurisdiction applies when a court uses its in Rem jurisdiction over property to "force" a litigant over whom the court has no personal jurisdiction to appear in court by attaching property that belongs to the litigant. It applies only when a litigant has property within a state. The court in that state may take control of that property and force the litigant to submit to jurisdiction of that court if the litigant wants to get his or her property back. In this way, the court can obtain jurisdiction over that party even if the court would normally have no personal jurisdiction over that party. For example:

John, a resident of Idaho, and Joan, a resident of Montana, get into a car accident in Idaho. Joan sues John in Montana. Normally, absent other facts, the Montana court would have no personal jurisdiction over John because John is not a resident of Montana and the accident did not happen in Montana. However, suppose John owns a farm in Montana. In such a case, the court could assert jurisdiction over the farm. In essence, the court would be saying to John, "Either appear before our court in Montana or we will seize your farm and use it to satisfy Joan's lawsuit against you." This is a classic exercise of quasi in rem jurisdiction.

Quasi in rem jurisdiction is similar to in rem jurisdiction in that it involves the court’s control of the property, but with quasi in rem jurisdiction, the identities of the defendants are usually known or identifiable.

For a court to exercise quasi in rem jurisdiction, six conditions must be satisfied:

Value of property: The property must be valuable. The court has quasi in rem jurisdiction over only the amount at which the property is valued. For example:

John is domiciled in Maryland; Adam is domiciled in Pennsylvania. Adam maintains a bank account in Maryland with $100,000 in it. John files a claim against Adam in Maryland court for $200,000. Assuming the Maryland court has no basis for personal jurisdiction over Adam, the Maryland court may only exercise quasi in rem jurisdiction over the $100,000 bank account, not the entire $200,000 claim. John could bring just the $100,000 claim. However, to sustain the full $200,000 claim, he would have to either find another basis for the Maryland court’s personal jurisdiction over Adam, or bring the action in another court, such as a Pennsylvania court, that has personal jurisdiction over Adam.

See Shaffer v. Heitner, 433 U.S. 186, 97 S.Ct. 2569, 53 L.Ed.2d 683 (1977).

Location of property: Like in rem jurisdiction, the property seized must be, at the time the action is commenced, within the state. Seizure of real property easily satisfies this requirement. Seizure of movable property, however, can pose difficulty. Seizure of intangible property, like corporate stock, can pose even more difficulty. Some states hold that the location of the property is where the stock certificate is physically located or where the corporation is incorporated.

Ownership of property: The defendant must claim an interest in the property. If the defendant does not own the seized property, of course, the seizure will not force the defendant to appear in court to try to defend it.

Control of property: The court must have control of the property before it is able to exercise quasi in rem jurisdiction. While the court does not have to have actual possession of the property, it must control the property to the exclusion of the defendant.

Procedural due process: To satisfy constitutional muster, the defendant must receive adequate notice of the pending action and have the opportunity to be heard.

Substantive due process: Unlike with in rem jurisdiction, there is a requirement of some level of contract between the litigant and the forum state. Or, if the litigant has no contract with the forum state, at the very least, the seized property must have some relation to the cause of action to satisfy the “notions of fair play and substantial justice” set forth in the International Shoe case. Less of a relationship, however, is necessary as a basis for quasi in rem jurisdiction than is necessary for the full personal jurisdiction discussed in the last subchapter. See Louring v. Kuwait Boulder Shipping Co., 455 F. Supp. 630 (D. Conn. 1977).

See Federal Rule of Civil Procedure 4(n).

(n) Seizure of Property; Service of Summons Not Feasible.
(1) If a statute of the United States so provides, the court may assert jurisdiction over property. Notice to claimants of the property shall than be sent in the manner provided by the statute or by service of a summons under this rule.
(2) Upon a showing that personal jurisdiction over a defendant cannot, in the district where the action is brought, be obtained with reasonable efforts by service of summons in any manner authorized by this rule, the court may assert jurisdiction over any of the defendant's assets found within the district by seizing the assets under the circumstances and in the manner provided by the law of the state in which the district court is located.

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