Harris v. Balk
Encyclopedia
Harris v. Balk, was a United States Supreme Court case that exemplified the bizarre types of jurisdiction
state courts (and therefore plaintiffs) could assert through quasi in rem
actions before International Shoe's
"minimum contacts" test replaced Pennoyer's principles of "power and notice".
This case involved three parties: Harris, Balk, and Epstein. Harris owed Balk money and Balk owed Epstein money. Thus, there was no debt relationship between Harris and Epstein. Harris and Balk lived in North Carolina
while Epstein lived in Maryland
. Harris traveled to Maryland. While he was there, Epstein attached the debt
Harris owed Balk in order for Epstein to obtain jurisdiction over Balk. Through this, Epstein hoped to obtain the debt that Balk owed him by accessing the debt Harris owed Balk. Consequently, Epstein obtained a judgment against Balk which directed Harris to pay Epstein instead of Balk.
To understand the principles in this case, one must understand a little about quasi in rem actions and jurisdictional principles at the time. At that time, a state court could not assert in personam
jurisdiction over someone who was not physically served process in that state. However, if a defendant, on whom in personam jurisdiction was unable to be asserted, owned property in the state in which plaintiff was situated, plaintiff could "attach" to the action whatever property defendant owned in that state. Such an action was labeled quasi-in rem and, when this occurred, state courts were permitted to assert jurisdiction over an out-of-state defendant on any matter, with the limitation that any remedy
be limited to involving only the attached property.
Applying the above principles to this case, debt (money owed to someone) is considered actual property of the creditor. Importantly, at the time of Harris v. Balk, debt was considered to "follow the debtor" (i.e., wherever a debtor went, he brought along the debt he owed to his creditor). When Harris entered Maryland, he "brought along" the debt he owed to Balk (Harris's debt to Balk being Balk's property). This enabled Epstein to attach it in a quasi-in rem action and obtain jurisdiction over Balk.
The principles allowing the Maryland state court to assert jurisdiction in this case were subsequently overturned by the Supreme Court case in Shaffer v. Heitner
.
Jurisdiction
Jurisdiction is the practical authority granted to a formally constituted legal body or to a political leader to deal with and make pronouncements on legal matters and, by implication, to administer justice within a defined area of responsibility...
state courts (and therefore plaintiffs) could assert through quasi in rem
Quasi in rem
Quasi in rem is a legal term referring to a legal action based on property rights of a person absent from the jurisdiction. In the American legal system the state can assert power over an individual simply based on the fact that this individual has property in the state...
actions before International Shoe's
International Shoe v. Washington
International Shoe Co. v. Washington, 326 U.S. 310 , was a landmark decision of the United States Supreme Court in which the Court established important rules impacting a number of areas of the law including the participation of corporations involved in interstate commerce in state unemployment...
"minimum contacts" test replaced Pennoyer's principles of "power and notice".
This case involved three parties: Harris, Balk, and Epstein. Harris owed Balk money and Balk owed Epstein money. Thus, there was no debt relationship between Harris and Epstein. Harris and Balk lived in North Carolina
North Carolina
North Carolina is a state located in the southeastern United States. The state borders South Carolina and Georgia to the south, Tennessee to the west and Virginia to the north. North Carolina contains 100 counties. Its capital is Raleigh, and its largest city is Charlotte...
while Epstein lived in Maryland
Maryland
Maryland is a U.S. state located in the Mid Atlantic region of the United States, bordering Virginia, West Virginia, and the District of Columbia to its south and west; Pennsylvania to its north; and Delaware to its east...
. Harris traveled to Maryland. While he was there, Epstein attached the debt
Debt
A debt is an obligation owed by one party to a second party, the creditor; usually this refers to assets granted by the creditor to the debtor, but the term can also be used metaphorically to cover moral obligations and other interactions not based on economic value.A debt is created when a...
Harris owed Balk in order for Epstein to obtain jurisdiction over Balk. Through this, Epstein hoped to obtain the debt that Balk owed him by accessing the debt Harris owed Balk. Consequently, Epstein obtained a judgment against Balk which directed Harris to pay Epstein instead of Balk.
To understand the principles in this case, one must understand a little about quasi in rem actions and jurisdictional principles at the time. At that time, a state court could not assert in personam
In personam
In personam is a Latin phrase meaning "directed toward a particular person". In a lawsuit in which the case is against a specific individual, that person must be served with a summons and complaint to give the court jurisdiction to try the case, and the judgment applies to that person and is called...
jurisdiction over someone who was not physically served process in that state. However, if a defendant, on whom in personam jurisdiction was unable to be asserted, owned property in the state in which plaintiff was situated, plaintiff could "attach" to the action whatever property defendant owned in that state. Such an action was labeled quasi-in rem and, when this occurred, state courts were permitted to assert jurisdiction over an out-of-state defendant on any matter, with the limitation that any remedy
Legal remedy
A legal remedy is the means with which a court of law, usually in the exercise of civil law jurisdiction, enforces a right, imposes a penalty, or makes some other court order to impose its will....
be limited to involving only the attached property.
Applying the above principles to this case, debt (money owed to someone) is considered actual property of the creditor. Importantly, at the time of Harris v. Balk, debt was considered to "follow the debtor" (i.e., wherever a debtor went, he brought along the debt he owed to his creditor). When Harris entered Maryland, he "brought along" the debt he owed to Balk (Harris's debt to Balk being Balk's property). This enabled Epstein to attach it in a quasi-in rem action and obtain jurisdiction over Balk.
The principles allowing the Maryland state court to assert jurisdiction in this case were subsequently overturned by the Supreme Court case in Shaffer v. Heitner
Shaffer v. Heitner
Shaffer v. Heitner, 433 U.S. 186 , was a case in which the Supreme Court of the United States established that in order for an American state to assert personal jurisdiction, due process under the Fourteenth Amendment requires minimum contacts over and above the mere ownership of stocks...
.