Shaffer Footnote 36 Extends to New York Convention Award Enforcement: Property-Based (Quasi in Rem) Jurisdiction Without Minimum Contacts

I. Introduction

Sociedad Concesionaria Metropolitana de Salud S.A. (“SCMS”) sought to confirm, recognize, and enforce a Chilean arbitral award arising from a large hospital construction project in Santiago, Chile. The original award debtor was Astaldi (Astaldi Sucursal Chile / Astaldi, S.p.A.). During the arbitration, Astaldi underwent an Italian restructuring (“Concordato”) culminating in a transaction by which Webuild S.p.A. acquired most of Astaldi’s operating business, while the remnant entity (later known as Astaris S.p.A.) would wind down.

To collect in the United States, SCMS filed in the District of Delaware under 9 U.S.C. § 207 (FAA implementing the New York Convention) and attempted to invoke quasi in rem (attachment) jurisdiction by targeting Webuild’s Delaware-situs property: shares in Webuild US Holdings, Inc., a Delaware subsidiary. Webuild moved to dismiss for lack of personal jurisdiction, arguing that Shaffer v. Heitner requires International Shoe minimum contacts (and relatedness) for quasi in rem jurisdiction.

The District Court dismissed, reasoning that property unrelated to the underlying dispute could not support jurisdiction and, alternatively, that Shaffer’s footnote 36 did not apply because no court had determined Webuild (as opposed to Astaldi) was SCMS’s debtor. The Third Circuit vacated and remanded.

II. Summary of the Opinion

The Third Circuit held that Shaffer v. Heitner, 433 U.S. 186, 210 n.36 (1977) preserves “traditional” quasi in rem (attachment) jurisdiction in post-judgment collection actions, and that its logic extends to proceedings to confirm and enforce foreign arbitral awards under the New York Convention. Accordingly, in such enforcement proceedings, the forum need not satisfy International Shoe’s claim-related minimum-contacts requirement; the presence of the award debtor’s property in the forum can suffice.

The Court further held that the District Court must decide the predicate factual/legal question whether Webuild is Astaldi’s successor in interest (and thus the award debtor) as part of the jurisdictional inquiry. The case was remanded for that determination and further proceedings consistent with the opinion.

III. Analysis

A. Precedents Cited

1. The territorial era and its evolution

  • Pennoyer v. Neff, 95 U.S. 714 (1877): The opinion uses Pennoyer as the baseline, where jurisdiction followed territorial power over persons or property. This background frames why quasi in rem attachment once functioned as an “indispensable” tool against absent debtors.
  • Hanson v. Denckla, 357 U.S. 235 (1958): Cited for the historical taxonomy of in personam/in rem/quasi in rem and for purposeful availment as a cornerstone of modern specific jurisdiction (later referenced through the Ford line of cases).
  • International Shoe Co. v. Washington, 326 U.S. 310 (1945) and Milliken v. Meyer, 311 U.S. 457 (1940): The Court situates International Shoe as the pivot from territorialism to “traditional notions of fair play and substantial justice,” which Shaffer later applied broadly—but not, the Third Circuit emphasizes here, without regard to context.

2. Shaffer’s central role—and its limiting footnote

  • Shaffer v. Heitner, 433 U.S. 186 (1977): The decisive authority. The Third Circuit draws a sharp distinction between: (i) plenary quasi in rem actions used as a substitute for in personam jurisdiction (where International Shoe relatedness is required), and (ii) post-judgment enforcement actions (where footnote 36 indicates no unfairness in allowing execution where property is found). The opinion treats footnote 36 as an express preservation of traditional attachment jurisdiction in the collection setting.

3. Cases invoked by Webuild, and why they did not control

  • Rush v. Savchuk, 444 U.S. 320 (1980): Distinguished as a pre-judgment tort suit in which the attached “property” (an insurer’s obligations) was unrelated to the underlying negligence claim. Rush reinforces Shaffer’s rule for unrelated plenary actions; it does not address footnote 36’s post-judgment collection scenario.
  • Nehemiah v. Athletics Cong. of U.S., 765 F.2d 42 (3d Cir. 1985) and Burnham v. Superior Ct. of Cal., 495 U.S. 604 (1990): The Court notes Nehemiah’s broad reading of Shaffer and observes Burnham abrogated Nehemiah’s conclusion about tag jurisdiction, cautioning against treating Shaffer as eliminating all traditional jurisdictional bases.
  • Mallory v. Norfolk S. Ry. Co., 600 U.S. 122 (2023): Cited for the Supreme Court’s warning against misreading Shaffer as discarding every traditional method of obtaining jurisdiction. This supports the Third Circuit’s willingness to give operative effect to Shaffer’s footnote 36.

4. Support from sister circuits for post-judgment attachment without minimum contacts

  • Glencore Grain Rotterdam B.V. v. Shivnath Rai Harnarain Co., 284 F.3d 1114 (9th Cir. 2002); Office Depot Inc. v. Zuccarini, 596 F.3d 696 (9th Cir. 2010); Cerner Middle E. Ltd. v. iCapital, LLC, 939 F.3d 1016 (9th Cir. 2019): These cases are cited to show “considerable authority” that enforcement against forum property is permissible post-judgment even if the property is unrelated to the underlying controversy.
  • Frontera Res. Azerbaijan Corp. v. State Oil Co. of Azerbaijan Republic, 582 F.3d 393 (2d Cir. 2009): Cited to reflect acceptance that enforcing a foreign arbitral award requires jurisdiction over the person or property, aligning with the Third Circuit’s approach.
  • The Court also notes its own prior nonprecedential hesitation: Base Metal Trading Ltd. v. OJSC "Novokuznetsky Aluminum Factory", 47 F. App'x 73 (3d Cir. 2002).

5. Enforcement frameworks: domestic judgments, foreign judgments, and arbitral awards

  • Kulko v. Superior Court, 436 U.S. 84 (1978): Used to illustrate the “rear-view mirror” logic: a valid judgment rendered where jurisdiction existed can be enforced elsewhere.
  • World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (1980): Cited for the proposition that a judgment rendered in violation of due process is void and not entitled to full faith and credit.
  • Titus v. Wallick, 306 U.S. 282 (1939) and Baker ex rel. Thomas v. Gen. Motors Corp., 522 U.S. 222 (1998): Support the idea that enforcement is a distinct, limited cause of action and that states may apply their own enforcement mechanisms.
  • Aetna Life Ins. Co. v. Tremblay, 223 U.S. 185 (1912) and Hilton v. Guyot, 159 U.S. 113 (1895): Explain that foreign judgments are not governed by full faith and credit but by comity; once due process-like criteria are met, relitigation of merits is disfavored.
  • McDonald v. City of West Branch, 466 U.S. 284 (1984): Clarifies that arbitration is not a “judicial proceeding” for § 1738 full faith and credit purposes—important to the opinion’s careful mapping of analogies.
  • The Court relies on arbitration-specific pro-enforcement doctrine: Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (1985), and uses Commonwealth Coatings Corp. v. Cont'l Cas. Co., 393 U.S. 145 (1968) and Baravati v. Josephthal, Lyon & Ross, Inc., 28 F.3d 704 (7th Cir. 1994) to emphasize both the fairness and party autonomy of arbitration (while acknowledging structural differences from judging).
  • For the “summary proceeding” nature of confirmation/enforcement: Jiangsu Beier Decoration Materials Co. v. Angle World LLC, 52 F.4th 554 (3d Cir. 2022), Teamsters Loc. 177 v. United Parcel Serv., 966 F.3d 245 (3d Cir. 2020), Florasynth, Inc. v. Pickholz, 750 F.2d 171 (2d Cir. 1984), and Lynne Carol Fashions, Inc. v. Cranston Print Works, Co., 453 F.2d 1177 (3d Cir. 1972). These authorities support the Court’s view that confirmation converts an already-final award into an enforceable judgment, with res judicata-like effect.
  • For extending Shaffer footnote 36 logic specifically to New York Convention awards: Crescendo Mar. Co. v. Bank of Commc'ns Co., 2016 WL 750351 (S.D.N.Y. Feb. 22, 2016), Swiss Marine Servs. S.A. v. Louis Dreyfus Energy Servs. L.P., 598 F. Supp. 2d 414 (S.D.N.Y. 2008), and CME Media Enters. B.V. v. Zelenzy, 2001 WL 1035138 (S.D.N.Y. Sept. 10, 2001).

6. Jurisdiction to decide jurisdiction; successor issues intertwined with merits

  • United States v. Ruiz, 536 U.S. 622 (2002): Quoted for the principle that a federal court has jurisdiction to determine its own jurisdiction.
  • Rarick v. Federated Serv. Ins. Co., 852 F.3d 223 (3d Cir. 2017) and Colo. River Water Conservation Dist. v. United States, 424 U.S. 800 (1976): For the “virtually unflagging obligation” to exercise jurisdiction where it exists.
  • Schuchardt v. President of the U.S., 839 F.3d 336 (3d Cir. 2016) and Gould Elecs. v. United States, 220 F.3d 169 (3d Cir. 2000): For the ability/obligation to resolve contested jurisdictional facts, even via a plenary trial if needed.
  • Bolivarian Republic of Venezuela v. Helmerich & Payne Int'l Drilling Co., 581 U.S. 170 (2017): For the proposition that jurisdiction must be decided even when merits and jurisdiction are intertwined.
  • The opinion also situates successor/alter-ego concepts across jurisdictional modes: In re Nazi Era Cases Against German Defendants Litig., 153 F. App'x 819 (3d Cir. 2005); Patin v. Thoroughbred Power Boats Inc., 294 F.3d 640 (5th Cir. 2002); Bunge S.A. v. Pac. Gulf Shipping (Singapore) Pte. Ltd., 2020 WL 1528250 (D. Or. Mar. 31, 2020); Transfield ER Cape Ltd. v. Indus. Carriers, Inc., 571 F.3d 221 (2d Cir. 2009); NYKCool A.B. v. Pac. Int'l Servs., Inc., 2013 WL 6799973 (S.D.N.Y. Dec. 20, 2013); Gorton v. Air & Liquid Sys. Corp., 303 F. Supp. 3d 278 (M.D. Pa. 2018); In re DES Cases, 789 F. Supp. 552 (E.D.N.Y. 1992).
  • On remand practice and appellate restraint: Hudson United Bank v. LiTenda Mortg. Corp., 142 F.3d 151 (3d Cir. 1998) and Gov't of Virgin Islands v. Martinez, 780 F.2d 302 (3d Cir. 1985).

B. Legal Reasoning

  1. Core distinction: plenary liability adjudication vs. post-judgment enforcement. The Court reads Shaffer as aimed at preventing end-runs around International Shoe where property is used merely to drag a defendant into an unrelated merits dispute. That rationale is much weaker (and fairness concerns are “less stringent”) when the defendant’s liability has already been determined by a competent tribunal and the forum proceeding is merely to “realize on that debt.”
  2. Footnote 36 is operational, not ornamental. The Court treats Shaffer’s footnote 36 as an affirmative recognition that attachment jurisdiction remains constitutionally fair in the collection context: once there is a debtor-creditor determination by a competent tribunal, it is not unfair to allow execution where the debtor has property, even if the enforcing forum could not have adjudicated the original claim.
  3. Extending the logic to New York Convention awards. The Court acknowledges key differences (arbitration is not a “judicial proceeding” for § 1738), but emphasizes functional parallels: (i) arbitration resolves substantive rights; (ii) the New York Convention/FAA establishes a pro-enforcement, limited-review regime; and (iii) confirmation is a “truncated summary proceeding” converting an already-final award into an enforceable judgment. Given these features—and Congress’s “emphatic federal policy” favoring international arbitration—treating awards as eligible for footnote-36-style enforcement avoids incentivizing award debtors to park assets in jurisdictions where they would be immune absent unrelatedness-based minimum contacts.
  4. Jurisdictional predicate: identifying the “debtor.” The Court rejects the District Court’s view that footnote 36 is unavailable unless some prior court already determined that Webuild (not Astaldi) is the debtor. Because the forum court “always has jurisdiction to determine its own jurisdiction,” it must decide whether Webuild is Astaldi’s successor in interest. If it is, then the enforcing court itself becomes “a court of competent jurisdiction” determining that “the defendant is a debtor of the plaintiff” for footnote 36 purposes.

C. Impact

  • Practical expansion of enforcement fora for New York Convention awards. Award creditors may proceed quasi in rem in any U.S. jurisdiction where the award debtor has attachable property, without having to show the property (or forum) is related to the underlying dispute—so long as the proceeding is genuinely post-award enforcement.
  • Delaware (and other incorporation hubs) become more significant enforcement venues. The opinion specifically validates targeting shares or equity interests deemed located in the forum, reinforcing the strategic importance of locating debtor assets (or corporate ownership structures) that can be attached.
  • Increased litigation over successor liability as a jurisdictional gateway. Because the Third Circuit requires the district court to decide whether the named respondent is the award “debtor,” future cases will likely feature intensive disputes over mergers, spin-offs, assumption of liabilities, and choice-of-law issues at the threshold stage.
  • Doctrinal clarification inside the Third Circuit. The decision resolves (in precedential form) the question left open in Base Metal Trading and aligns the Circuit with the Second and Ninth Circuits’ trajectory, while avoiding the more aggressive view that no jurisdictional basis is needed at all to confirm/recognize.

IV. Complex Concepts Simplified

Quasi in rem (Type II) / “attachment jurisdiction”
A court does not exercise power over the defendant personally; it exercises power over the defendant’s property in the forum. Any recovery is limited to the value of that attached property.
Minimum contacts / relatedness (International Shoe; Shaffer)
Typically, a court may not decide a dispute unless the defendant has purposeful, meaningful ties to the forum and the claim arises out of or relates to those ties. Shaffer applied this logic to many property-based cases—especially when property is used only as a hook for an unrelated merits suit.
Shaffer footnote 36
A carve-out: if the defendant’s debt has already been validly determined elsewhere, it is ordinarily fair to allow collection where the debtor has property, even if the enforcing forum could not have heard the original dispute.
New York Convention / 9 U.S.C. § 207
A treaty (and its U.S. implementing statute) requiring U.S. courts to recognize and enforce covered foreign arbitral awards, subject to limited defenses. Confirmation is intended to be a summary, not merits-retrying, proceeding.
Successor in interest
A doctrine under which a new entity may be treated as responsible for another entity’s debts (including award debts) due to a transaction such as merger, asset acquisition with liability assumption, or other corporate restructuring—often intensely fact- and law-dependent.
Concordato
An Italian restructuring process similar in broad purpose to U.S. Chapter 11, which can involve reorganizing operations, addressing creditor claims, and approving complex transactions that may allocate assets and liabilities across entities.

V. Conclusion

The Third Circuit’s central contribution is a clear, enforcement-focused jurisdictional rule: in proceedings to confirm and enforce a foreign arbitral award under the New York Convention, a federal court may exercise traditional quasi in rem (attachment) jurisdiction based on the presence of the award debtor’s property in the forum, without requiring International Shoe “minimum contacts” relatedness between the forum and the underlying dispute. The fairness rationale is supplied by Shaffer’s footnote 36: liability has already been adjudicated; the forum action is to collect.

At the same time, the Court insists on a critical safeguard: the enforcing court must determine whether the named respondent is in fact the award “debtor”— including by resolving contested successor-in-interest questions—before proceeding. The resulting framework both promotes robust enforcement of international arbitral awards (consistent with federal policy and the New York Convention) and anchors jurisdiction in a concrete property-based mechanism tethered to a validated adjudication of debt.