CIVIL PROCEDURE CLASS 35.pptVIP

CIVIL PROCEDURE CLASS 35 Professor Fischer Columbus School of Law The Catholic University of America November 14, 2005 Shaffer v. Heitner Shareholder derivative suit brought by Heitner (shareholder) against 28 defendants who were present or former officers/directors of Greyhound Corp. Shaffer v. Heitner Greyhound (AZ, DE) Heitner not resident in DE Suit against present/former officers/directors of Greyhound for alleged mismanagement of corporation’s business in Oregon How were Ds notified about the suit? Shaffer: What was the legal basis for the Delaware court’s assertion of jurisdiction over the D? (in personam? In rem? Quasi in rem (type I or type 2)?) Shaffer: What was the legal basis for the Delaware court’s assertion of jurisdiction over the D? (in personam? In rem? Quasi in rem?) Quasi in rem, type 2, pursuant to 2 Delaware statutes Exercise of attachment jurisdiction to seize intangible assets that could be used to satisfy the claim against the defendants which had nothing to do with the property attached 2 Delaware Statutes 1. SEQUESTRATION STATUTE Del. Code Ann., Tit. 10 § 366 (1950)- permitted seizure of property belonging to a non-resident D as the basis to compel the D’s appearance in litigation brought against that D 2. SITUS OF OWNERSHIP STATUTE Del. Code Ann., Tit. 8 § 169 (1975) – Delaware is the situs of ownership for all stock in DE corporation regardless of where the certificates ae located. Challenging DE jurisdiction 21 Ds whose property was seized challenge jurisdiction on the basis that the ex parte sequestration procedure did not accord them due process and also did not have enough contacts with DE to satisfy International Shoe test. DE courts (Court of Chancery, DE Supreme Court) uphold jurisdiction U.S. Supreme Court only considers Int’l Shoe issue. Does the U.S. Supreme Court affirm or reverse the Delaware Supreme Court’s ruling on jurisdiction? Why Justice Marshall – opinion of the Court Int’l Shoe standard applies to quasi in re