Pennoyer v. Neff

• John Hipple Mitchell (1835 – 1905) = "Mitchell" = a lawyer (after "reading law" as was pretty common in the 1800s) = the US Senator from Oregon
  • (1873 - 1879;
  • 1885 - 1897;
  • 1901 - 1905 his death)
• Mitchell was raised in Pennsylvania. He impregnated a 15-old-girl (which wasn't uncommon in the 1800s) whom he married in Pennsylvania. After working as a teacher for some time, he got a law license in Pennsylvania.
• In 1860, Mitchell left Pennsylvania for California with his extra-marital lover. Having abandoned his 1st wife in Pennsylvania, he also abandoned his lover with whom he had eloped to California. His next stop was Oregon where he would practice law & become a state lawmaker.
• Mitchell was active in the politics of Oregon state also, having served as the President of the Oregon Senate (1864 - 1866)
• After the Donation Land Claim Act (1850), Neff retained Mitchell for legal advice to obtain land in Oregon.
• At this point in the story, Neff doesn't have title to any land in Oregon.
• In 1865, Mitchell sued a former client "Neff" for not paying his legal fees
• Marcus Neff = former client of Mitchell

• In 1865, Mitchell (attorney) sued Neff (client) in Oregon state court even though Neff had moved to California
• Mitchell didn't serve process onto Neff; the Oregon court allowed Mitchell to constructively serve process onto Neff with a newspaper publication in Oregon. This publication satisfied Oregon's service of process law in 1865.
• Neff had not been personally served, but notice was made via publication.
• Neff didn't show up in the Oregon state court. As a result, a default judgment was won against Neff in Oregon state court.
• Shortly after the default judgment against him, Neff acquired real estate in Oregon even though he hadn't been living there in a number of years.
• Upon finding out that Neff had property in Oregon, Mitchell launched a sheriff's auction to satisfy the default judgment against Neff.
• Neff's property in Oregon was seized in order to satisfy the judgment. The land was later assigned to Pennoyer.
• Sylvester Pennoyer = "Pennoyer" = the buyer of the land that Mitchell had acquired from Neff after the default judgment against Neff
• [The next series of legal drama follows:]
• In 1874, Neff returned to Oregon. Neff sued Pennoyer in federal court to recover his land.
• Neff won because the federal court in Oregon didn't that Neff hadn't been served properly in Mitchell's lawsuit against Neff in the Oregon state court when Neff wasn't residing in Oregon in 1865.
• The federal court in Oregon voided the land sale from Mitchell to Pennoyer.
• Pennoyer appealed to the United States Supreme Court.

May a court assert personal jurisdiction over an out-of-state defendant (Neff) if the defendant is not served personally?

Does a state court have personal jurisdiction over a non-resident who owns property in the state in a suit not related to the property if the individual is not present in the state and cannot be personally served within the state?

• The answer depends on whether the lawsuit is
  • against the defendant individually, or
  • against the defendant's property.
• The Mitchell auction of Neff's property in Oregon is annulled. Consequently, Mitchell didn't have any property to sell to Pennoyer.
• Neff is allowed to recover his Oregon land.

The Oregon state court lacked in personam jurisdiction over Neff in 1865.

• No, for the court to have jurisdiction over a person that does not live in the state, that person, or an agent of that person, must be personally served within the state.
• For the court to have jurisdiction over the property, the property needed to be attached to the property before the start of litigation (which then forms quasi in rem jurisdiction).
• (Quasi in rem jurisdiction = as if against the property)

Finall SCOTUS decision was in favor of Neff. SCOTUS affirmed the federal district court's judgment

Stephen Field: State court powers operate only within that state. Courts can't seize out-of-state property or exert jurisdiction over absent non-residents. Nonetheless, the exceptions are

1. if the defendant is served personally while visiting the forum state or
2. if the defendant's home state law authorizes out-of-state parties to serve its residents.

A court must have personal jurisdiction to create a binding judgment. The court has no personal jurisdiction, and any judgment is invalid, in a case where:

• the defendant doesn't live there;
• the defendant is not present within the state; or
• a property in that state is not in controversy.

An in rem proceeding is a lawsuit to resolve ownership over property. (In this case, Neff didn't own property in Oregon in 1865.)

Ward Hunt dissent: the majority of SCOTUS is making it really difficult to recover debts from out-of-state parties.