The term “Quasi in rem” in Latin means “as if against a thing”. “Quasi in rem” refers to a legal action based on property rights of a person absent from the jurisdiction. The term refers to the power of the court to hear a case and enforce a judgment against a party, even if the party is not personally before the court, solely because the party has an interest in real property or personal property within the geographical limits of the court. A quasi in rem action determines the rights of a person in a thing, rather than the rights of the world in a thing.
For example, foreclosing a mortgage is a quasi in rem action because it seeks not to determine the rights of the world in a piece of property, but rather, the rights between the lender and the borrower. There might be others who could have interests too. Generally, a quasi in rem action tries to secure a preexisting claim in the property, or extinguish someone else’s. In some cases, it may be used to substitute for personal jurisdiction, where a defendant’s property is applied to satisfy a claim that is unrelated to property.
Quasi in rem jurisdiction exists when the court has power to determine whether particular individuals own specific property within the court’s control. This type of jurisdiction permits a court to rule on disputes between a particular plaintiff and defendant regarding property when the property is located within the forum state. In most quasi in rem cases, the plaintiff is unable to obtain personal jurisdiction over the defendant, but the defendant has property in the state. Since the court’s sole basis of jurisdiction is the property, any judgment against the defendant can be satisfied only out of that property.
Therefore, quasi in rem is a type of personal jurisdiction exercised by a court over a party who owns property within the jurisdictional boundaries of the court. Generally, a court must have personal jurisdiction over the parties to a case before it can bind them with its decision. There may be different ways in which a court can acquire jurisdiction. This can be either personal jurisdiction which is usually exercised over a party who resides in the court’s home state; or it can be jurisdiction exercised by a court over an out-of-state party by virtue of the fact that the party has made some contact with the state or owns property within the court’s geographical limits. There are two types of jurisdiction based on property: quasi in rem and in rem.
In a quasi in rem proceeding, the respondent is entitled to receive notice. If the respondent makes an appearance to defend against a quasi in rem claim, he may be forced to defend against all the claims made by the plaintiff. In many states a respondent may avoid this by making a limited appearance to defend the case on the merits with only the property located in the area at stake.
However, after the decision of the U.S. Supreme Court in Shaffer v. Heitner[i], it is no longer acceptable for a state court to gain personal jurisdiction over a defendant merely because the defendant owns property in the state. It was held in this case by the court that a state court can have jurisdiction over a respondent only if s/he maintains a minimum level of purposeful contacts with the forum state. With enough contacts a respondent is deemed to have consented to the jurisdiction of the state and its courts. The Court also held that courts should consider fair play and substantial justice in determining whether to require the appearance of an out-of-state respondent. These considerations should be applied to all forms of personal jurisdiction: in personam, in rem, and quasi in rem.
A quasi in rem action is commonly used when jurisdiction over the defendant is unobtainable due to his/her absence from the state. Any judgment will affect only the property seized, as in personam jurisdiction is unobtainable. However before allowing the plaintiff to exercise quasi in rem jurisdiction over money or other negotiable instruments, a court will examine the nature of the respondent’s contacts with the state and the relation of the property to the underlying dispute.
[i] 433 U.S. 186 (U.S. 1977)