place of incorporation

On May 22, 1974, appellee Heitner, a nonresident of Delaware who owned one share of stock in the Greyhound Corporation, filed a shareholder's derivative suit in the Court of Chancery for New Castle County, Delaware. The complaint named as defendants Greyhound Corporation, its wholly owned subsidiary Greyhound Lines, Inc., and twenty-eight present or former officers and directors of one or both corporations. Heitner alleged that the individual defendants had violated their fiduciary duties by causing the corporations to engage in activities that resulted in a private antitrust judgment of over thirteen million dollars and a criminal contempt fine of six hundred thousand dollars, both arising from events in Oregon. The individual defendants resided primarily in Arizona and conducted their business there. Simultaneously with the complaint, Heitner filed a motion for sequestration of the Delaware property of the individual defendants pursuant to Del. Code Ann., Tit. 10, § 366. The Court of Chancery granted the motion the same day and appointed a sequestrator who seized approximately eighty-two thousand shares of Greyhound common stock belonging to nineteen defendants, along with options belonging to two others and certain debentures, warrants, and stock unit credits. The stock certificates were not physically present in Delaware, but Del. Code Ann., Tit. 8, § 169 deemed the situs of ownership of all stock in Delaware corporations to be in the state, allowing the sequestrator to place stop-transfer orders on the corporation's books. The value of the sequestered stock was approximately one point two million dollars. All twenty-eight defendants received notice of the suit by certified mail to their last known addresses and by publication in a New Castle County newspaper. The twenty-one defendants whose property had been seized entered special appearances and moved to quash service of process and vacate the sequestration order. They argued that the ex parte sequestration procedure violated due process and that they lacked sufficient contacts with Delaware to sustain jurisdiction. The Court of Chancery rejected these arguments in a letter opinion, and the Delaware Supreme Court affirmed the judgment in Greyhound Corp. v. Heitner, 361 A. 2d 225 (1976). The United States Supreme Court noted probable jurisdiction and heard argument on February 22, 1977. The individual defendants whose property was seized became the appellants before the Court. Greyhound Corporation and its subsidiary appeared in the action and moved to dismiss on the ground that the sequestration statute was unconstitutional. The sequestration order remained in effect pending resolution of the constitutional questions presented.

In June 1996, Massachusetts adopted An Act Regulating State Contracts with Companies Doing Business with or in Burma (Myanmar), 1996 Mass. Acts 239, ch. 130, codified at Mass. Gen. Laws §§ 7:22G–7:22M (1997), and the statute generally bars state entities from buying goods or services from any person identified on a restricted purchase list of those doing business with Burma. The definition of doing business with Burma is broad and encompasses operations or subsidiaries in Burma, providing financial services to the government, promoting importation of gems or timber, or providing goods or services to the government, though exemptions exist for news reporting, international telecommunications, and medical supplies. Three months later, in September 1996, Congress passed a statute imposing mandatory and conditional sanctions on Burma that banned aid to the Burmese Government except for humanitarian purposes, instructed United States representatives to oppose loans from international financial institutions, and imposed visa restrictions on Burmese officials. Congress also authorized the President to prohibit new investment by United States persons upon findings of repression and directed development of a multilateral strategy while granting authority to waive sanctions when contrary to national security interests. On May 20, 1997, the President issued Executive Order No. 13047, certifying that the Burmese Government had committed large-scale repression of the democratic opposition and prohibiting new investment in Burma by United States persons along with related transactions. The National Foreign Trade Council, a nonprofit representing companies engaged in foreign commerce, had thirty-four members on the Massachusetts restricted purchase list in 1998, and three of those members withdrew from Burma after the state law while one had a bid increased by ten percent under the state provision. In April 1998 the Council filed suit in the United States District Court for the District of Massachusetts against the state officials charged with administering the Act, and after detailed stipulations, briefing, and argument the district court permanently enjoined enforcement of the state Act. The First Circuit affirmed the injunction on three independent grounds, and the Supreme Court granted certiorari to resolve the questions of preemption and related constitutional issues.