Pennoyer v. Neff, , was a decision by the Supreme Court of the United States in which the Court held that a state court can only exert personal jurisdiction over a party domiciled out-of-state if that party is served with process while physically present within the state. More importantly, the court imposed a procedural limit on quasi in rem jurisdiction over property located within the state; it would have to be "brought under the control of the court" at the time the suit commenced otherwise quasi in rem jurisdiction would remain unavailable.
The case emerged from a fee dispute between Marcus Neff, a homesteader in the Territory of Oregon, and attorney John H. Mitchell. Neff hired Mitchell to manage his application for a land patent under the Donation Land Claim Act of 1850 and Mitchell later accused Neff of failing to pay his fee. Although the existence of the debt was highly suspect, Mitchell successfully obtained a judgment by default and took title to Neff's homestead. Mitchell later assigned the land to Sylvester Pennoyer, future governor of Oregon. Pennoyer held the land for eight years before Neff sought it back. Pennoyer lost in every action against Neff in an attempt to regain his land, including his action in Federal Court which would reach the Supreme Court. Pennoyer was extremely embittered by the process, and carried his hatred for the Supreme Court into his political career. There is speculation that the unethical Mitchell may have falsified the original lawsuit, which may have itself emerged from an illegal deal between Mitchell and Neff. In the end, Pennoyer was left without recourse due to Mitchell's faults, and Neff recovered the land.
The legal issues of the case turned on whether the court in question could extend personal jurisdiction over a defendant who isn't present in the state. Though Neff had settled in Oregon originally, he had allegedly moved to California by the time of the lawsuit. The lower court narrowly ruled in Neff's favor, mostly based on Mitchell's untrustworthiness, but the Supreme Court turned the case into a sweeping treatise on personal jurisdiction. The Supreme Court's decision laid the groundwork for the complex common law of personal jurisdiction. It has been substantially modified in subsequent decisions, especially International Shoe Co. v. Washington (1945), but some parts remain. It is frequently taught to first year law students in the study of civil procedure.
Background
thumb|left|Sylvester Pennoyer, taken more than a decade later while Governor of Oregon.
The case included a colorful cast of characters attempting to build lives on the Oregon frontier. Marcus Neff (born 1826) had arrived in Oregon in 1848 after taking the Oregon Trail by wagon. He became one of the first men to speculate over land in Oregon. Neff sought a land grant under the Donation Law of Oregon, an act of the United States Congress enacted on September 27, 1850. The act provided an incentive for the development of land in the territories of the American West by conveying parcels of land to be used for further development. Single unmarried men, like Neff was at the time, could receive of free land. The law required that requests for land be made by December 1, 1850. Neff appears to have missed the actual deadline to apply, as his application stated December 15, but December had been crossed out and September 15 had been put in its place (a date before the law had been passed). So began the first of numerous frauds that surrounded the case.
thumb|The approximate location of the parcel of land, along the Willamette river, in what is now downtown Portland.
To gain title to the land, a settler had to work it for four years for their own use, and have two third parties sign affidavits that confirmed the land had been used properly and by the settler. Neff submitted one such affidavit in 1853 (too early), and another in 1856. The slow pace of frontier and government bureaucracy meant that the claim would not be fully processed for another decade. In an attempt to speed up the process and deal with the requisite paperwork, the illiterate Neff hired attorney John H. Mitchell. Neff however failed to pay Mitchell the $300 he was allegedly owed for his services. Whether Neff actually owed Mitchell the $300 is doubtable, given the poor ethics of Mitchell. Neff reportedly paid $6.05, a sizeable sum less than claimed. Although the work was rendered from 1862 into 1863, Mitchell waited until 1865 to sue, likely waiting until Neff was out of the state. Mitchell sued for $253.15 plus legal fees (some $4,300 in 2020, adjusted for inflation).). Though the lower court judgement was issued in February 1866, Mitchell waited until July 22, 1866 to seek execution of the judgement. This likely aligned with the arrival of Neff's land patent, which had been granted in March but likely took some months to travel to the frontier.
Subsequent developments
Parties
Pennoyer was extremely embittered by his multiple losses, in a case where he had effectively done nothing wrong. The fault seemed to lie with Mitchell, but Pennoyer never recovered any damages from Mitchell, likely because the property had been conveyed via quitclaim deed without warranty. Pennoyer took his anger at the case and the Supreme Court into his political career. In his inaugural address upon being elected governor of Oregon, he railed against the Supreme Court and called for the justices to all be impeached, seeing the Supreme Court as a massive governmental overreach. He held especial rage for Chief Justice John Marshall, whom he termed the head of a judicial oligarchy that had supplanted democracy. Judge Deady felt the speech made a fool of Pennoyer, and that he had expected such buffoonery from Pennoyer.
Mitchell's political career took him to the Senate from 18721879, and again in 1885. The 1885 election had an unusual connection to the case: the judge of the lower court, Matthew Deady, came into possession of Mitchell's love-letters from yet another affair. Mitchell's unexpected re-election, despite publication of the affair in The Oregonian, was decried by Deady. Mitchell would later be sentenced to six months in prison for his role in the Oregon land fraud scandal. Dean Purdue cites this as the climactic fraud of Mitchell's life, and wonders how far back his frauds went, speculating that the original claim against Neff emerged from a nefarious deal between Neff and Mitchell. Though Dean Purdue acknowledges that such things cannot be known, she further guesses that the discrepancy from the small fee paid and the large fee sought could also have been the result of a bribe paid by Mitchell to an official to speed up the processing of Neff's patent, which was a common practice at the time.