While a resident of Indiana, appellee was injured in an accident
in Indiana while riding as a passenger in a car driven by appellant
Rush, also an Indiana resident. After moving to Minnesota, appellee
commenced this action against Rush in a Minnesota state court,
alleging negligence and seeking damages. As Rush had no contacts
with Minnesota that would support
in personam
jurisdiction, appellee attempted to obtain quasi
in rem
jurisdiction by garnishing the contractual obligation of State Farm
Mutual Automobile Insurance Co. (State Farm) to defend and
indemnify Rush in connection with such a suit. State Farm, which
does business in Minnesota, had insured the car, owned by Rush's
father, under a liability insurance policy issued in Indiana. Rush
was personally served in Indiana, and after State Farm's response
to the garnishment summons asserted that it owed the defendant
nothing, appellee moved the trial court for permission to file a
supplemental complaint making the garnishee, State Farm, a party to
the action. Rush and State Farm moved to dismiss the complaint for
lack of jurisdiction over the defendant. The trial court denied the
motion to dismiss and granted the motion for leave to file the
supplemental complaint. The Minnesota Supreme Court affirmed,
ultimately holding that the assertion of quasi
in rem
jurisdiction under the Minnesota garnishment statute complied with
the due process standards enunciated in
Shaffer v.
Heitner, 433 U. S. 186.
Held: A State may not constitutionally exercise
quasi in rem jurisdiction over a defendant who has no
forum contacts by attaching the contractual obligation of an
insurer licensed to do business in the State to defend and
indemnify him in connection with the suit. Pp.
444 U. S.
327-333.
(a) A State may exercise jurisdiction over an absent defendant
only if the defendant has certain minimum contacts with the forum
such that the maintenance of the suit does not offend traditional
notions of fair play and substantial justice.
International
Shoe Co. v. Washington, 326 U. S. 310. In
determining whether a particular exercise of state court
jurisdiction is consistent with due process, the inquiry must focus
on "the relationship among the defendant, the forum, and the
litigation."
Shaffer v. Heitner, supra at
433 U. S. 204.
P. 327.
(b) Here, the only affiliating circumstance offered to show a
relationship among Rush, Minnesota, and this lawsuit is that Rush's
insurance
Page 444 U. S. 321
company does business in the State. However, the fictional
presence in Minnesota of State Farm's policy obligation to defend
and indemnify Rush -- derived from combining the legal fiction that
assigns a situs to a debt, for garnishment purposes, wherever the
debtor is found with the legal fiction that a corporation is
"present," for jurisdictional purposes, wherever it does business
-- cannot be deemed to give the State the power to determine Rush's
liability for the out-of-state accident. The mere presence of
property in a State does not establish a sufficient relationship
between the owner of the property and the State to support the
exercise of jurisdiction over an unrelated cause of action, and it
cannot be said that the defendant engaged in any purposeful
activity related to the forum that would make the exercise of
jurisdiction fair, just, or reasonable merely because his insurer
does business there. Nor does the policy provide significant
contacts between the litigation and the forum, for the policy
obligations pertain only to the conduct, not the substance, of the
litigation. Pp.
444 U. S.
327-330.
(c) Moreover, the requisite minimum contacts with the forum
cannot be established under an alternative approach attributing the
insurer's forum contacts to the defendant by treating the
attachment procedure as the functional equivalent of a direct
action against the insurer, and considering the insured a "nominal
defendant" in order to obtain jurisdiction over the insurer. The
State's ability to exert its power over the "nominal defendant" is
analytically prerequisite to the insurer's entry into the case as a
garnishee, and if the Constitution forbids the assertion of
jurisdiction over the insured based on the policy, then there is no
conceptual basis for bringing the "garnishee" into the action. Nor
may the Minnesota court attribute State Farm's contacts to Rush by
considering the "defending parties" together and aggregating their
forum contacts in determining whether it has jurisdiction. The
parties' relationships with each other may be significant in
evaluating their ties to the forum, but the requirements of
International Shoe must be met as to each defendant over
whom a state court exercises jurisdiction. Pp.
444 U. S.
330-332.
272 N.W.2d
888, reversed.
MARSHALL, J., delivered the opinion of the Court, in which
BURGER, C.J., and STEWART, WHITE, BLACKMUN, POWELL, and REHNQUIST,
JJ., joined. BRENNAN, J.,
ante p.
444 U. S. 299,
and STEVENS, J.,
post, p.
444 U. S. 333,
filed dissenting opinions.
Page 444 U. S. 322
MR. JUSTICE MARSHALL delivered the opinion of the Court.
This appeal presents the question whether a State may
constitutionally exercise
quasi in rem jurisdiction over a
defendant who has no forum contacts by attaching the contractual
obligation of an insurer licensed to do business in the State to
defend and indemnify him in connection with the suit.
I
On January 13, 1972, two Indiana residents were involved in a
single-car accident in Elkhart, Ind. Appellee Savchuk, who was a
passenger in the car driven by appellant Rush, was injured. The
car, owned by Rush's father, was insured by appellant State Farm
Mutual Automobile Insurance Co. (State Farm) under a liability
insurance policy issued in Indiana. Indiana's guest statute would
have barred a claim by Savchuk. Ind.Code § 9-3-3-1 (1976).
Savchuk moved with his parents to Minnesota in June, 1973.
[
Footnote 1] On May 28, 1974,
he commenced an action against Rush in the Minnesota state courts.
[
Footnote 2] As Rush had no
contacts with Minnesota that would support
in personam
jurisdiction, Savchuk attempted to obtain
quasi in rem
jurisdiction by garnishing State Farm's obligation under the
insurance policy to defend and indemnify Rush in connection with
such a suit. [
Footnote 3] State
Farm does business in Minnesota. [
Footnote 4] Rush was
Page 444 U. S. 323
personally served in Indiana. The complaint alleged negligence
and sought $125,000 in damages. [
Footnote 5]
As provided by the state garnishment statute, Savchuk moved the
trial court for permission to file a supplemental complaint making
the garnishee, State Farm, a party to the action after State Farm's
response to the garnishment summons asserted that it owed the
defendant nothing. [
Footnote 6]
Rush and State
Page 444 U. S. 324
Farm moved to dismiss the complaint for lack of jurisdiction
over the defendant. [
Footnote
7] The trial court denied the motion to dismiss and granted the
motion for leave to file the supplemental complaint.
On appeal, the Minnesota Supreme Court affirmed the trial
court's decision. 311 Minn. 480,
245 N.W.2d
624 (1976) (
Savchuk I). It held, first, that the
obligation of an insurance company to defend and indemnify a
nonresident insured under an automobile liability insurance policy
is a garnishable
res in Minnesota for the purpose of
obtaining quasi
in rem jurisdiction when the incident
giving rise to the action occurs outside Minnesota but the
plaintiff is a Minnesota resident when the suit is filed. Second,
the court held that the assertion of jurisdiction over Rush was
constitutional because he had notice of the suit and an opportunity
to defend, his liability was limited to the amount of the policy,
and the garnishment procedure may be used only by Minnesota
residents. The court expressly recognized that Rush had engaged in
no voluntary activity that would justify the exercise of
in
personam jurisdiction. The court found, however, that
considerations of fairness supported the exercise of
quasi in
rem jurisdiction because in accident litigation the insurer
controls the defense of the case, State Farm does business in and
is regulated by the State, and the State has an interest in
protecting its residents and providing them with a forum in which
to litigate their claims.
Rush appealed to this Court. We vacated the judgment and
remanded the cause for further consideration in light of
Page 444 U. S. 325
Shaffer v. Heitner, 433 U. S. 186
(1977). 433 U.S. 902 (1977).
On remand, the Minnesota Supreme Court held that the assertion
of
quasi in rem jurisdiction through garnishment of an
insurer's obligation to an insured complied with the due process
standards enunciated in
Shaffer. 272 N.W.2d
888 (1978) (
Savchuk II). The court found that the
garnishment statute differed from the Delaware stock sequestration
procedure held unconstitutional in
Shaffer because the
garnished property was intimately related to the litigation and the
garnishment procedure paralleled the asserted state interest in
"facilitating recoveries for resident plaintiffs." 272 N.W.2d at
891. [
Footnote 8] This appeal
followed.
II
The Minnesota Supreme Court held that the Minnesota garnishment
statute embodies the rule stated in
Seider v. Roth, 17
N.Y.2d 111, 216 N.E.2d 312 (1966), that the contractual obligation
of an insurance company to its insured under a liability insurance
policy is a debt subject to attachment under state law if the
insurer does business in the State. [
Footnote 9]
Seider jurisdiction was upheld
against a due process challenge in
Simpson v. Loehmann, 21
N.Y.2d 305, 234 N.E.2d 669 (1967),
reargument denied, 21
N.Y.2d 990, 238 N.E.2d 319 (1968). The New York court relied on
Harris v. Balk, 198 U. S. 215
(1905), in holding that the presence of the debt
Page 444 U. S. 326
in the State was sufficient to permit
quasi in rem
jurisdiction over the absent defendant. The court also concluded
that the exercise of jurisdiction was permissible under the Due
Process Clause because, "[v]iewed realistically, the insurer in a
case such as the present is in full control of the litigation"
and,
"where the plaintiff is a resident of the forum state and the
insurer is present in and regulated by it, the State has a
substantial and continuing relation with the controversy."
Simpson v. Loehmann, supra at 311, 234 N.E.2d at
672.
The United States Court of Appeals for the Second Circuit gave
its approval to
Seider in
Minichiello v.
Rosenberg, 410 F.2d 106,
adhered to en banc, 410 F.2d
117 (1968),
cert. denied, 396 U.S. 844 (1969), although on
a slightly different rationale. Judge Friendly construed
Seider as,
"in effect, a judicially created direct action statute. The
insurer doing business in New York is considered the real party in
interest, and the nonresident insured is viewed simply as a
conduit, who has to be named as a defendant in order to provide a
conceptual basis for getting at the insurer."
410 F.2d at 109;
see Donawitz v. Danek, 42 N.Y.2d 138,
142, 366 N.E.2d 253, 255 (1977). The court held that New York could
constitutionally enact a direct action statute, and that the
restriction of liability to the amount of the policy coverage made
the policyholder's personal stake in the litigation so slight that
the exercise of jurisdiction did not offend due process.
New York has continued to adhere to
Seider. [
Footnote 10] New Hampshire has
followed
Seider if the defendant resides in a
Seider jurisdiction, [
Footnote 11] but not in other cases. [
Footnote 12] Minnesota is the only
Page 444 U. S. 327
other State that has adopted
Seider-type jurisdiction.
[
Footnote 13] The Second
Circuit recently reaffirmed its conclusion that
Seider
does not violate due process after reconsidering the doctrine in
light of
Shaffer v. Heitner. O'Conner v. Lee-Hy Paving
Corp., 579 F.2d 194,
cert. denied, 439 U.
S. 1034 (1978).
III
In
Shaffer v. Heitner, we held that "all assertions of
state court jurisdiction must be evaluated according to the
standards set forth in
International Shoe and its
progeny." 433 U.S. at
433 U. S. 212.
That is, a State may exercise jurisdiction over an absent defendant
only if the defendant has
"certain minimum contacts with [the forum] such that the
maintenance of the suit does not offend 'traditional notions' of
fair play and substantial justice."
International Shoe Co. v. Washington, 326 U.
S. 310,
326 U. S. 316
(1945). In determining whether a particular exercise of state court
jurisdiction is consistent with due process, the inquiry must focus
on "the relationship among the defendant, the forum, and the
litigation."
Shaffer v. Heitner, supra, at
433 U. S.
204.
It is conceded that Rush has never had any contacts with
Minnesota, and that the auto accident that is the subject of
Page 444 U. S. 328
this action occurred in Indiana and also had no connection to
Minnesota. The only affiliating circumstance offered to show a
relationship among Rush, Minnesota, and this lawsuit is that Rush's
insurance company does business in the State.
Seider
constructed an ingenious jurisdictional theory to permit a State to
command a defendant to appear in its courts on the basis of this
factor alone. State Farm's contractual obligation to defend and
indemnify Rush in connection with liability claims is treated as a
debt owed by State Farm to Rush. The legal fiction that assigns a
situs to a debt, for garnishment purposes, wherever the debtor is
found is combined with the legal fiction that a corporation is
"present," for jurisdictional purposes, wherever it does business
to yield the conclusion that the obligation to defend and indemnify
is located in the forum for purposes of the garnishment statute.
The fictional presence of the policy obligation is deemed to give
the State the power to determine the policyholder's liability for
the out-of-state accident. [
Footnote 14]
We held in
Shaffer that the mere presence of property
in a State does not establish a sufficient relationship between the
owner of the property and the State to support the exercise of
jurisdiction over an unrelated cause of action. The ownership of
property in the State is a contact between the defendant and the
forum, and it may suggest the presence of other ties. 433 U.S. at
433 U. S. 209.
Jurisdiction is lacking, however, unless there are sufficient
contacts to satisfy the fairness standard of
International
Shoe.
Here, the fact that the defendant's insurer does business in the
forum State suggests no further contacts between the defendant and
the forum, and the record supplies no evidence of any. State Farm's
decision to do business in Minnesota
Page 444 U. S. 329
was completely adventitious as far as Rush was concerned. He had
no control over that decision, and it is unlikely that he would
have expected that, by buying insurance in Indiana, he had
subjected himself to suit in any State to which a potential future
plaintiff might decide to move. In short, it cannot be said that
the
defendant engaged in any purposeful activity related
to the forum that would make the exercise of jurisdiction fair,
just, or reasonable,
see Kulko v. California Superior
Court, 436 U. S. 84,
436 U. S. 93-94
(1978);
Hanson v. Denckla, 357 U.
S. 235,
357 U.S.
253 (1958), merely because his insurer does business
there.
Nor are there significant contacts between the litigation and
the forum. The Minnesota Supreme Court was of the view that the
insurance policy was so important to the litigation that it
provided contacts sufficient to satisfy due process. [
Footnote 15] The insurance policy is
not the subject matter of the case, however, nor is it related to
the operative facts of the negligence action. The contractual
arrangements between the defendant and the insurer pertain only to
the conduct, not the substance, of the litigation, and accordingly
do not affect the court's jurisdiction unless they demonstrate ties
between the defendant and the forum.
In fact, the fictitious presence of the insurer's obligation in
Minnesota does not, without more, provide a basis for concluding
that there is any contact in the
International Shoe
sense
Page 444 U. S. 330
between Minnesota and the insured. To say that "a debt follows
the debtor" is simply to say that intangible property has no actual
situs, and a debt may be sued on wherever there is jurisdiction
over the debtor. State Farm is "found," in the sense of doing
business, in all 50 States and the District of Columbia. Under
appellee's theory, the "debt" owed to Rush would be "present" in
each of those jurisdictions simultaneously. It is apparent that
such a "contact" can have no jurisdictional significance.
An alternative approach for finding minimum contacts in
Seider-type cases, referred to with approval by the
Minnesota Supreme Court, [
Footnote 16] is to attribute the insurer's forum contacts
to the defendant by treating the attachment procedure as the
functional equivalent of a direct action against the insurer. This
approach views
Seider jurisdiction as fair both to the
insurer, whose forum contacts would support
in personam
jurisdiction even for an unrelated cause of action, and to the
"nominal defendant." Because liability is limited to the policy
amount, the defendant incurs no personal liability, [
Footnote 17] and the judgment is satisfied
from the policy proceeds which are not available to the insured for
any purpose other than paying accident claims, the insured is said
to have such a slight stake in the litigation as a practical matter
that it is not unfair to make him a "nominal defendant" in order to
obtain jurisdiction over the insurance company.
Seider actions are not equivalent to direct actions,
however. [
Footnote 18] The
State's ability to exert its power over the "nominal
Page 444 U. S. 331
defendant" is analytically prerequisite to the insurer's entry
into the case as a garnishee. If the Constitution forbids the
assertion of jurisdiction over the insured based on the policy,
then there is no conceptual basis for bringing the "garnishee" into
the action. Because the party with forum contacts can only be
reached through the out-of-state party, the question of
jurisdiction over the nonresident cannot be ignored. [
Footnote 19] Moreover, the
assumption that the defendant has no real stake in the litigation
is far from self-evident. [
Footnote 20]
The Minnesota court also attempted to attribute State Farm's
contacts to Rush by considering the "defending parties" together
and aggregating their forum contacts in determining whether it had
jurisdiction. [
Footnote 21]
The result was the
Page 444 U. S. 332
assertion of jurisdiction over Rush based solely on the
activities of State Farm. Such a result is plainly
unconstitutional. Naturally, the parties' relationships with each
other may be significant in evaluating their ties to the forum. The
requirements of
International Shoe, however, must be met
as to each defendant over whom a state court exercises
jurisdiction.
The justifications offered in support of
Seider
jurisdiction share a common characteristic: they shift the focus of
the inquiry from the relationship among the defendant, the forum,
and the litigation to that among the plaintiff, the forum, the
insurer, and the litigation. The insurer's contacts with the forum
are attributed to the defendant because the policy was taken out in
anticipation of such litigation. The State's interests in providing
a forum for its residents and in regulating the activities of
insurance companies are substituted for its contacts with the
defendant and the cause of action. This subtle shift in focus from
the defendant to the plaintiff is most evident in the decisions
limiting
Seider jurisdiction to actions by forum residents
on the ground that permitting nonresidents to avail themselves of
the procedure would be unconstitutional. [
Footnote 22] In other words, the plaintiff's contacts
with the forum are decisive in determining whether the defendant's
due process rights are violated.
Such an approach is forbidden by
International Shoe and
its progeny. If a defendant has certain judicially cognizable ties
with a State, a variety of factors relating to the particular cause
of action may be relevant to the determination whether the exercise
of jurisdiction would comport with "traditional notions of fair
play and substantial justice."
See McGee v. International Life
Ins. Co., 355 U. S. 220
(1957);
cf. Kulko v. California Superior Court, 436 U.S.
at
436 U. S.
98-101. Here, however, the defendant has
no
contacts with the forum, and the
Page 444 U. S. 333
Due Process Clause
"does not contemplate that a state may make binding a judgment .
. . against an individual or corporate defendant with which the
state has no contacts, ties, or relations."
International Shoe Co. v. Washington, 326 U.S. at
326 U. S. 319.
The judgment of the Minnesota Supreme Court is, therefore,
Reversed.
[For dissenting opinion of MR. JUSTICE BRENNAN,
see
ante p.
444 U. S.
299.]
[
Footnote 1]
Savchuk moved to Pennsylvania after this appeal was filed.
[
Footnote 2]
The suit was filed after the 2-year Indiana statute of
limitations had run.
272 N.W.2d
888, 891, n. 5 (1978).
[
Footnote 3]
Minnesota Stat. § 571.41, subd. 2 (1978), provides in relevant
part:
"Notwithstanding anything to the contrary herein contained, a
plaintiff in any action in a court of record for the recovery of
money may issue a garnishee summons before judgment therein in the
following instances only:"
"
* * * *"
"(b) If the court shall order the issuance of such summons, if a
summons and complaint is filed with the appropriate court and
either served on the defendant or delivered to a sheriff for
service on the defendant not more than 30 days after the order is
signed, and if, upon application to the court it shall appear
that"
"
* * * *"
"(2) The purpose of the garnishment is to establish quasi in rem
jurisdiction and that"
"
* * * *"
"(b) defendant is a nonresident individual, or a foreign
corporation, partnership or association."
"(3) The garnishee and the debtor are parties to a contract of
suretyship, guarantee, or insurance, because of which the garnishee
may be held to respond to any person for the claim asserted against
the debtor in the main action."
The Minnesota Supreme Court cited this version of the statute,
enacted in 1976, in its opinion in
272 N.W.2d
888 (1978) (
Savchuk II). The version of the statute
that was in effect at the time of the original opinion, 311 Minn.
480,
245 N.W.2d
624 (1976) (
Savchuk I), does not differ in any
important respect.
[
Footnote 4]
State Farm is an Illinois corporation that does business in all
50 States, the District of Columbia, and several Canadian
Provinces. The Insurance Almanac 431-432 (1977).
[
Footnote 5]
The prayer was later reduced voluntarily to $50,000, the face
amount of the policy.
[
Footnote 6]
Minnesota Stat. § 571.495 (1978) requires the garnishee to
disclose the amount of his debt to the defendant. Section 571.51
provides in relevant part:
"[I]n all . . . cases where the garnishee denies liability, the
judgment creditor may move the court at any time before the
garnishee is discharged, on notice to both the judgment debtor and
the garnishee, for leave to file a supplemental complaint making
the latter a party to the action, and setting forth the facts upon
which he claims to charge him; and, if probable cause is shown,
such motion shall be granted. . . ."
Minn.Stat. § 571.51 (1978). The party-garnishee is not a
defendant.
[
Footnote 7]
The motion to dismiss also alleged lack of subject matter
jurisdiction, insufficiency of process, and insufficiency of
service of process.
[
Footnote 8]
Minnesota would apply its own comparative negligence law, rather
than Indiana's contributory negligence rule.
See Schwartz v.
Consolidated Freightways Corp., 300 Minn. 487,
221 N.W.2d
665 (1974). Appellants assert that Minnesota would also decline
to apply the Indiana guest statute if this case were tried in
Minnesota. Juris.Statement 10, n. 2;
cf. Savchuk II, supra
at 891-892. The constitutionality of a choice of law rule that
would apply forum law in these circumstances is not before us.
Cf. Home Ins. Co. v. Dick, 281 U.
S. 397 (1930).
[
Footnote 9]
272 N.W.2d at 891.
[
Footnote 10]
Baden v. Staples, 45 N.Y.2d 889, 383 N.E.2d 110 (1978).
The State has declined, however, to make the attachment procedure
available to nonresident plaintiffs.
Donawitz v. Danek, 42
N.Y.2d 138, 366 N.E.2d 253 (1977).
[
Footnote 11]
Forbes v. Boynton, 113 N.H. 617, 313 A.2d 129 (1973).
But cf. Rocca v. Kenney, 117 N.H. 1057, 381 A.2d 330
(1977).
[
Footnote 12]
Camire v. Scieszka, 116 N.H. 281, 358 A.2d 397
(1976).
[
Footnote 13]
The practice has been rejected, based on state law or
constitutional grounds, in
Belcher v. Government Employees Ins.
Co., 282 Md. 718, 387 A.2d 770 (1978);
Javorek v. Superior
Court, 17 Cal. 3d
629, 552 P.2d 728 (1976);
Hart v. Cote, 145 N.J.Super.
420,
367 A.2d 1219 (Law Div.1976);
Grinnell v. Garrett, 295
So. 2d 496 (La.App. 1974);
Johnson v. Farmers Alliance Mutual
Ins. Co., 499 P.2d 1387
(Okla.1972);
State ex rel. Government Employees Ins. Co. v.
Lasky, 454 S.W.2d
942 (Mo.App. 1970);
Howard v. Allen, 254 S.C. 455,
176 S.E.2d
127 (1970);
De Rentiis v. Lewis, 106 R.I. 240,
258
A.2d 464 (1969);
Housley v. Anaconda Co., 19 Utah 2d
124,
427 P.2d 390
(1967);
Jardine v. Donnelly, 413 Pa. 474, 198 A.2d 513
(1964).
See also Tessier v. State Farm Mutual Ins. Co.,
458 F.2d 1299 (CA1 1972);
Kirchman v. Mikula, 443 F.2d 816
(CA5 1971);
Robinson v. O. F. Shearer & Sons, 429 F.2d
83 (CA3 1970);
Sykes v. Beal, 392
F. Supp. 1089 (Conn.1975);
Ricker v.
Lajoie, 314 F.
Supp. 401 (Vt.1970).
[
Footnote 14]
The conclusion that State Farm's obligation under the insurance
policy was garnishable property is a matter of state law, and
therefore is not before us. Assuming that it was garnishable
property, the question is what significance that fact has to the
relationship among the defendant, the forum, and the
litigation.
[
Footnote 15]
The court explained:
"In the instant case, the insurer's obligation to defend and
indemnify, while theoretically separable from the tort action, has
no independent value or significance apart from accident
litigation. In the accident litigation, however, it is inevitably
the focus, determining the rights and obligation [
sic] of
the insurer, the insured, and practically speaking, the
victim."
Savchuk II. 272 N.W.2d at 892 (emphasis in original).
The court considered the "practical relationship between the
insurer and the nominal defendant,"
ibid. the limitation
of liability to the policy amount, and the restriction of the
garnishment procedure to resident plaintiffs, and concluded that
"the relationship between the defending parties, the litigation,
and the forum state,"
id. at 893, was sufficient to
sustain the exercise of jurisdiction.
[
Footnote 16]
Id. at 892-893;
but see Savchuk I, 311 Minn.
at 488, 245 N.W.2d at 629.
[
Footnote 17]
See Savchuk II, 272 N.W.2d at 892;
Simpson v.
Loehmann, 21 N.Y.2d 990, 991, 238 N.E.2d 319, 320 (1968).
[
Footnote 18]
In
Savchuk I, the Minnesota Supreme Court rejected
Rush's argument that the garnishment procedure amounted to a direct
action, observing: "The defendant, not the insurer, is the party
sued. There is nothing in the statute which suggests that the
insurer should be named as a defendant." 311 Minn. at 488, 245
N.W.2d at 629.
See n
6,
supra.
[
Footnote 19]
Compare the direct action statute upheld in
Watson
v. Employers Liability Assurance Corp., 348 U. S.
66 (1954), which was applicable only if the accident or
injury occurred in the State or the insured was domiciled there and
which permitted the plaintiff to sue the insurer alone, without
naming the insured as a defendant.
Id. at
348 U. S. 68, n.
4.
[
Footnote 20]
A party does not extinguish his legal interest in a dispute by
insuring himself against having to pay an eventual judgment out of
his own pocket. Moreover, the purpose of insurance is simply to
make the defendant whole for the economic costs of the lawsuit; but
noneconomic factors may also be important to the defendant.
Professional malpractice actions, for example, question the
defendant's integrity and competence, and may affect his
professional standing.
Cf. Donawitz v. Danek, 42 N.Y.2d
138, 366 N.E.2d 253 (1977) (medical malpractice action premised on
Seider jurisdiction dismissed because plaintiff was a
nonresident). Further, one can easily conceive of cases in which
the defendant might have a substantial economic stake in
Seider litigation -- if, for example, multiple plaintiffs
sued in different States for an aggregate amount in excess of the
policy limits, or if a successful claim would affect the
policyholder's insurability. For these reasons, the defendant's
interest in the adjudication of his liability cannot reasonably be
characterized as
de minimis.
[
Footnote 21]
The court stated:
"We view as relevant the relationship between he
defending
parties, the litigation, and the forum state. It cannot be
said that Minnesota lacks such minimally requisite 'contacts, ties
or relations' to those
defending parties as to offend the
requirements of due process."
Savchuk II, 272 N.W.2d at 893 (emphasis added).
[
Footnote 22]
See, e.g., Farrell v. Piedmont Aviation, Inc., 411 F.2d
812 (CA2 1969);
Rintala v. Shoemaker, 362 F.
Supp. 1044 (Minn.1973);
Donawitz v. Danek, supra; Savchuk
I.
MR. JUSTICE STEVENS, J., dissenting.
As the Court notes, appellant Rush had no contact with Minnesota
that would support personal jurisdiction over him in that State.
Ante at
444 U. S. 322.
Moreover,
Shaffer v. Heitner, 433 U.
S. 186, precludes the assertion of
quasi in rem
jurisdiction over his property in that forum if the intangible
property attached is unrelated to the action. It does not follow,
however, that the plaintiff may not obtain
quasi in rem
jurisdiction over appellant's insurance policy, since his carrier
does business in Minnesota and since it has also specifically
contracted in the policy attached to defend the very litigation
that plaintiff has instituted in Minnesota.
In this kind of case, the Minnesota statute authorizing
jurisdiction is correctly characterized as the "functional
equivalent" of a so-called direct action statute. The impact of the
judgment is against the insurer.
* I believe such a
direct action statute is valid as applied to a suit brought by a
forum resident,
see Watson v. Employers liability Assurance
Corp., 348 U. S. 66,
348 U. S. 72,
even if the accident giving rise to the action did not occur in the
forum State,
see Minichiello v. Rosenberg,
Page 444 U. S. 334
410 F.2d 106 (CA2 1968),
cert. denied, 396 U.S. 844, so
long as it is understood that the forum may exercise no power
whatsoever over the individual defendant. As so understood, it
makes no difference whether the insurance company is sued in its
own name or, as Minnesota law provides, in the guise of a suit
against the individual defendant.
In this case, although appellant Rush may have a contractual
obligation to his insurer to appear in court to testify and
generally to cooperate in the defense of the lawsuit, it is my
understanding that Minnesota law does not compel him to do so
through the contempt power or otherwise. Moreover, any judgment
formally entered against the individual defendant may only be
executed against the proceeds of his insurance policy. In my
opinion, it would violate the Due Process Clause to make any use of
such a judgment against that individual -- for example, by giving
the judgment collateral estoppel effect in a later action against
him arising from the same accident.
Accord, Minichiello v.
Rosenberg, supra, at 112; Note, The Constitutionality of
Seider v. Roth after
Shaffer v. Heitner, 78
Colum.L.Rev. 409, 418-419 (1978). But we are not now faced with any
problem concerning use of a
quasi in rem judgment against
an individual defendant personally. I am therefore led to the
conclusion that the Federal Constitution does not require the
Minnesota courts to dismiss this action.
* It seems to me that the possible impact of a default judgment
on the reputation of an individual,
see ante at
444 U. S. 331,
n. 20, who has no contacts whatever with the forum State is far too
remote to affect the analysis of the constitutional issue in this
case.