CHOOSING A JURISDICTION/LOCATING ASSETS

Jurisdiction and venue

First decide in which state and where in the state to bring the action. Choosing a state in which to enforce your judgment is fairly simple if both the judgment debtor and his assets are in the same state. Even if the judgment creditor does not reside in that state, an enforcement judgment from the debtor's home state will be enforceable in the creditor's home state via Full Faith and Credit. The standard governing all questions of personal jurisdiction is minimum contacts with the forum state, fair play, and substantial justice (the “minimum contacts test”). Although this standard is easily met in the above situation, issues of personal jurisdiction may complicate matters if out-of-state assets are involved.

Since Shaffer v. Heitner, 433 U.S. 186 (1977), the minimum contacts standard applies even in in rem and quasi-in-rem actions. Most in rem cases will meet this threshold, and an in rem judgment by a court with jurisdiction is valid in all jurisdictions, as the Supreme Court recognized in Hilton v. Guyot. Thus, if the judgment will likely be satisfied by the seizure of real property, choose a court in the jurisdiction where the res is located. Quasi-in-rem bases of jurisdiction – for example, out of state bank accounts, real estate or pension plans – are more problematic.