Quasi in Rem Jurisdiction

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QUASI IN REM JURISDICTION

The power of a court to hear a case and enforce a judgment against a party, even if the party is not personally before the court, solely because the party has an interest in real property orpersonal propertywithin the geographical limits of the court.

Quasi in rem is a type of personal jurisdiction exercised by a court over a party who owns property within the jurisdictional boundaries of the court. A court must have personal jurisdiction over the parties to a case before it can bind them with its decision. A court can gain personal jurisdiction over a party who resides in the court's home state; a court can also gain jurisdiction over an out-of-state party who has made some contact with the state or who owns property within the court's geographical limits. There are two types of jurisdiction based on property: quasi in rem and in rem.

Both in rem and quasi in rem jurisdiction are based on the presence of the party's property within the court's territorial authority. In each instance the court may exercise jurisdiction without the actual presence of the party in court. The distinction between the two types of jurisdiction involves the nature of the dispute to which each applies and the extent of the authority each conveys. In rem (Latin for "against the thing") jurisdiction applies where the dispute involves the property itself. A court exercising in rem jurisdiction has the authority to make a decision as to the property's ownership that will be binding on all the world. Quasi in rem (Latin for "sort of against the thing") jurisdiction applies to personal suits against the defendant, where the property is not the source of the conflict but is sought as compensation by the plaintiff. The authority of a court exercising quasi in rem jurisdiction is limited to a determination of the respondent's interest in the property.

A respondent in a quasi in rem proceeding is entitled to receive notice of the proceeding. If the respondent makes an appearance to defend against a quasi in rem claim, he may be forced to defend against all the claims made by the plaintiff. In many states a respondent may avoid this by making a limited appearance to defend the case on the merits with only the property located in the area at stake.

The concept of quasi in rem jurisdiction has become all but obsolete. It is no longer acceptable for a state court to gain personal jurisdiction over a defendant merely because the defendant owns property in the state. In Shaffer v. Heitner, 433 U.S. 186, 97 S. Ct. 2569, 53 L. Ed. 2d 683 (1977), the U.S. Supreme Court ruled that a respondent must have a minimum level of purposeful contacts with the forum state before a state court may gain jurisdiction over the respondent. With enough contacts a respondent is deemed to have consented to the jurisdiction of the state and its courts. The Shaffer Court also held that courts should consider fair play and substantial justice in determining whether to require the appearance of an out-of-state respondent. These considerations should be applied to all forms of personal jurisdiction: in personam, in rem, and quasi in rem.

The practical effect of the Shaffer decision is to limit the number of cases based on in rem and quasi in rem jurisdiction. Due to the increasingly interstate nature of commerce in modern society, the average person may have contacts with, or own property in, several far-away states without even knowing it. Without a narrowed treatment of quasi in rem jurisdiction, potential civil respondents would be open to suit in any number of states with which they have no real connection. To guard against the abuse of quasi in rem jurisdiction, courts tend to closely examine intangible, movable property such as money and other negotiable instruments, such as stocks, bonds, and insurance policies. To exercise quasi in rem jurisdiction over money or other negotiable instruments, a court will examine the nature of the respondent's contacts with the state and the relation of the property to the underlying dispute.

Quasi in rem jurisdiction as a basis for personal jurisdiction has been almost completely absorbed by long-arm statutes. These statutes help plaintiffs gain in personam jurisdiction, so quasi in rem jurisdiction, with its limited relief, is frequently unnecessary. However, if the plaintiff's home state does not have a long-arm statute and an out-of-state respondent owns property in the state, the plaintiff may seek an attachment of the property by asking the court to exercise quasi in rem jurisdiction over the property.