Using quasi-in-rem jurisdiction to prevent pre-suit loss or alteration of evidence.

• Author: Hannan, Edward A.

In almost every jurisdiction, this little-known remedy should be available to be used to preserve relevant, potential, tangible or physical evidence

IN THE WAR of words of contemporary litigation, physical evidence usually determines the balance of power and the outcome. Juries commonly are instructed to disregard testimony that "conflicts" with established physical fact. Physical evidence, mute but tangible, ordinarily exercises greater persuasive force than all the words uttered by scores of witnesses. Physical evidence persuades because it simultaneously and immediately engages the senses of sight and touch and captures both the history of and the true reasons for a wide variety of conditions and events.

In vehicle litigation, scrape marks, gouges, dents and tears are useful in determining the point of and direction of application of forces and the types of forces applied to materials.

In products litigation, the physical evidence--the thing itself--is essential to determining many factors, including (1) the point of origin of a failure; (2) whether an alleged defective product was manufactured in substantial compliance with manufacturing specifications; (3) the physical, chemical, electrical, thermal and mechanical properties of materials; and (4) the actual geometries and section thicknesses of the article or device. Physical objects can be subjected to a wide range of destructive and non-destructive testing, such as x-ray examination, to determine properties, character and changes in properties and character. Testing can foreclose genuine debate over the reasons for the behavior of tangible objects.

In construction litigation, the story told just by the condition of the box beam involved in the Kansas City Hyatt disaster is legendary for its simplicity, clarity and immediacy.

Preserving an accident scene and all the physical evidence is critical to preserving the truth. Preserving intact a scene of a catastrophic loss is essential to determining the cause and origin of most failures and to conducting an inquiry into the reasons for failures. Indeed, the subject of collection and preservation of physical items, information and evidence is so important that it is the subject of ASTM Designation E 1188 published by the American Society of Testing and Materials.

But what happens when defense counsel is notified of a catastrophic event--for instance, a fire loss--and of pre-suit activities that could lead to the loss or alteration of physical evidence? Counsel must be aware of a judicial remedy that can be invoked to preserve potentially relevant evidence. That remedy is a court's quasi-in-rem jurisdiction over both the prospective litigant's interest in a future lawsuit and the physical evidence to issue a temporary restraining order to prevent unsupervised loss or alteration of the physical evidence.

What is the concept and what are some of the limitations of quasi-in-rem jurisdiction for the purpose of preserving potentially relevant evidence? What are the procedures for invoking a court's quasi-in-rem jurisdiction, the requirements for obtaining temporary restraining orders, and the use of the contempt remedy to address violations of those orders?

As a general procedural backdrop, this article uses Wisconsin law, Rule 65 of the Federal Rules of Civil Procedure, and court decisions. It is intended to alert counsel to a general remedy based on in-rem or quasi-in-rem jurisdiction, and statutory procedures specifically authorizing pre-suit remedies to preserve evidence are beyond its scope.

QUASI-IN-REM JURISDICTION: THE CONCEPT

Judicial power over interests in property, tangible or intangible, things or status, is known as "in rem jurisdiction" or "quasi-in-rem jurisdiction." A right to judgment in a lawsuit is a property right: a "chose in action."(1) An interest in a lawsuit is a form of "property."(2) The prospective litigant's interest in a potential lawsuit and the preservation of evidence that might be relevant in that lawsuit are the "interests in property" that suffice to support standing and the invocation of a court's in rem or quasi-in-rem jurisdiction.

The general distinction between in rem jurisdiction and quasi-in-rem jurisdiction focuses on whether the object of the proceeding is to establish an interest as against the entire world--in which event the proceedings are considered in rem--or whether the object is to establish an interest against the claims of certain designated persons--in which event the proceedings are considered quasi-in-rem.(3) Judgments in rem or quasi-in-rem do not impose personal obligations on a defendant, and unlike in personam judgments, they cannot be enforced by actions in other states.(4)

Axiomatically, courts of general jurisdiction enjoy judicial power over all property within their borders, real or personal.(5) For instance, Section (Rule) 801.17 of the Wisconsin Code of Civil Procedure expressly recognizes in rem and quasi-in-rem jurisdiction, providing that quasi-in-rem jurisdiction exists whenever a defendant "has or claims an interest actual or contingent" in real or personal property. (Emphasis added.) Any "interest" should suffice, including a contingent interest in the outcome of a civil action in which the property at issue is material evidence.

If confronted with the argument that a lawsuit has not been filed as yet in the forum and that an alleged interest in a future action is simply too remote to support the exercise of jurisdiction, counsel should argue that an intangible property right may be the propel subject of the court's subject matter jurisdiction, even if personal jurisdiction over all potentially involved parties is not feasible, or possible.(6)

Wisconsin's statute states that jurisdiction in rem or quasi-in-rem extends only to real or personal property located within the state at the time of commencement of the in rem or quasi-in-rem action. If the physical evidence or the accident scene is located within the forum at the time of commencement of the quasi-in-rem action, and the object of the action is to preserve evidence material for a potential, future civil action that could be brought in the forum, the court's power to exercise quasi-in-rem jurisdiction should exist.

In Shaffer v. Heitner,(7) the U.S. Supreme Court cast some doubt on the line of authorities following Pennnoyer v. Neff,(8) that quasi-in-rem jurisdiction always is supported by the mere presence of the property at issue in the state in which the court sits, without more. Shaffer held that the fundamental fairness test of International Shoe Co. v. Washington,(9) must be satisfied to pass constitutional muster, even in cases invoking quasi-in-rem jurisdiction. However, since the property at issue necessarily would have been located in the jurisdiction either at the time or shortly before the commencement of the quasi-in-rem action and since the property necessarily is "related to" the prospective action, satisfying the dictates of International Shoe should not impose an insurmountable obstacle, particularly if independent grounds exist to assert in personam jurisdiction over the persons controlling the physical evidence.(10)

If both the contingent interest in future litigation--the chose in action--and the tangible property that is potentially relevant evidence to that chose in action are located within the forum, the state has a compelling interest in adjudicating the rights of its citizens and in enforcing its own laws. The nexus between the presence of the tangible evidence and the events occurring within its borders ought to satisfy the minimum requirements of due process to support the exercise of jurisdiction.

If, however, the property is a movable thing and is outside the state at the time of commencement of the action, then a court's quasi-in-rem jurisdiction over the tangible thing can be subject to genuine question. However, a court's quasi-in-rem jurisdiction over the intangible property--a potential litigant's interest in a prospective lawsuit that could be brought in the forum--should not be open to genuine challenge when the...