Rush v. Savchuk

In Rush v. Savchuk, 444 U.S. 320, 100 S. Ct. 571, 62 L. Ed. 2d 516 (1980), the Court revisited quasi in rem jurisdiction in the context of intangible property held by corporations conducting business in multiple states. The event underlying that case was a single-car, injury accident that occurred in Indiana and involved Rush, the driver, and Savchuk, a passenger, both Indiana residents. Id. at 322. The car was insured by State Farm Mutual Automobile Insurance Company ("State Farm"), which conducted business in every state. Id. at 322-23 & n.4. Savchuk moved to Minnesota and filed suit against Rush in the Minnesota trial court for injuries sustained in the accident. Id. at 322. The court asserted quasi in rem jurisdiction over Rush after Savchuk garnished State Farm's contractual obligation to defend and indemnify Rush. Id. The Minnesota Supreme Court affirmed the assertion of jurisdiction. Id. at 324. The United States Supreme Court reversed. Id. at 332-33. It reiterated that the touchstone of jurisdictional analysis must be the relationship among the defendant, the forum, and the litigation. Id. at 327. The only contact supporting the assertion of jurisdiction in Minnesota was that State Farm conducted business in that state. Id. at 328. The Court decided that the legal fiction that placed the situs of a debt wherever the debtor is found was insufficient alone to confer jurisdiction in the Minnesota courts as the assertion of jurisdiction would not be fair to Rush and would therefore violate due process. Id. at 328-29. The Court reasoned as follows: State Farm's decision to do business in Minnesota 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, merely because his insurer does business there. Id. The Court further rejected the Minnesota Supreme Court's view that the State Farm insurance policy was so important to the litigation that it alone provided sufficient minimum contacts to support jurisdiction. Id. at 329. The Court noted that the policy was neither the subject matter of the case nor related to the facts of the lawsuit. Id. Thus, the Court concluded that the fictitious presence of State Farm's obligation did not "without more" provide a basis for finding sufficient contacts to support the assertion of jurisdiction. Id. at 329-30.