This is a contract case filed straight to the Supreme Court.

Petitioner(s): Nicolaas and Jacob van Staphorst, two Dutch bankers who agreed to loan Maryland money for the Revolutionary War, in exchange for a million pounds of tobacco per year.

Respondent: The State of Maryland, which was apparently trying to break its tobacco habit by giving all of its supply to the Dutch.

This case went to the Jay Court during the Washington Presidency, but the Court never rendered a decision because the parties settled before the Court ever had the opportunity to make their ruling.

See the super short entry in the U.S. Reports here.

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Just like West v. Barnes, the first Supreme Court case, Van Staphorst v. Maryland was a case between a creditor and a debtor. Only this time, the debtor was the State of Maryland, and Maryland arranged to pay its debt in tobacco.

It’s like this.

Maryland feared the British army would cross into the State and raise hell.¹ The U.S. was still embroiled in the Revolutionary War, after all.²

Pressed for money but determined to bolster its defenses, in 1781, Maryland sent an agent, a well-connected merchant named Matthew Ridley, to Europe.³ His mission? To get a loan from European bankers.⁴

Maryland gave its agent explicit instructions about the deal he was permitted to make on its behalf.⁵ So Ridley set sail and found luck in Amsterdam.⁶

After stopping at a specialty cafe, Ridley struck a deal with two Dutch brothers, the van Staphorsts.⁷

The van Staphorsts agreed to loan Maryland money in exchange for — wait for it — one million pounds of tobacco, every year.⁸

The van Staphorsts weren’t looking to get a legendary nic fix. Rather, they were wheeling and dealing so they could sell American tobacco to make a profit.⁹

As it turns out, when Ridley was busting his ass in Amsterdam trying to make a deal, “the threat to Maryland had subsided” because the British had surrendered in Yorktown, Virginia, meaning the British forces wouldn’t be marching up to Maryland.¹⁰ In fact, “American and British representatives were negotiating for peace…”¹¹

So while Ridley was fighting for Maryland’s life at the negotiation table, the threat of British troops marching on Annapolis was much, much lower than when he set sail for Europe.

Ultimately, even though Maryland was probably safe, Ridley made a deal according to the instructions Maryland gave him, and returned home.¹²

Ridley was confident in the deal. He wrote a friend, Thomas Johnson, (who would soon become a Supreme Court Justice!), “I flatter myself my conduct will be approved.”¹³

Ridley was mistaken.

Upon his return to the States, Maryland’s legislature was furious because, although Ridley followed its instructions to a tee, the war-time situation at home had calmed down, and now the State was stuck with a huge obligation.¹⁴

Making matters worse, because the Revolutionary War was coming to an end, Maryland anticipated the price of tobacco would soon skyrocket…and unfortunately for Maryland, they just guaranteed those damned Dutchmen a cheap price.¹⁵

The way the deal was written, the van Staphorsts would be getting tobacco for cheap and selling it for a big profit, all while Maryland would be stuck weeping as they packed tobacco in barrels, or whatever, for bargain rates.¹⁶

Ridley’s deal also resulted in Maryland being required to deliver more tobacco to the Dutch brothers than was even needed to cover the value of the interest on the loan.¹⁷

Faced with this depressing situation, Maryland didn’t want to honor the deal.¹⁸ They tried to get out of it, arguing they didn’t need to honor the terms because the van Staphorts had breached, or violated, the contract.¹⁹

Specifically, Maryland argued the Dutch brothers promised to raise 300,000 florins (Dutch currency) by a certain date, but they fell short of raising the full amount in the time.²⁰ As a result, Maryland argued it couldn’t be expected to be held to so strict a deal.²¹ The van Staphorsts didn’t take kindly to Maryland’s position, and lawyered up in 1785.²²

After further deterioration of their relationship, the parties agreed to go to arbitration.²³

In Walks John Jay

Of all the people on the planet, guess who the parties selected as one of the four arbitrators to head their matter? It was John Jay, the man who would go on to become the first Chief Justice of the Supreme Court.²⁴ Heck, he would go on to hear this very case.

Not to mention, Jay was apparently Maryland’s agent Matthew Ridley’s brother-in-law.²⁵ What a mess!

*Isn’t it a conflict of interest for an arbitrator on a case to later become a judge on that same case?*

By today’s standards, most definitely. But recusal rules back then were quite loose, meaning there were less ethical rules requiring judges to sit out cases.²⁶ Apparently the common law practice of the time was for a judge to recuse himself for “direct financial interest in the case” only.²⁷

So John Jay was one of four arbitrators over the dispute between the Dutch brothers and the State of Maryland.

I think it’s fascinating that John Jay was involved both in this case and in West v. Barnes before either case ever made it to the U.S. Supreme Court.²⁸

Anywho, the parties ultimately put a hold on arbitration because they were able to negotiate a payment plan.²⁹ However, the brothers weren’t satisfied, so in 1790, they sued the State of Maryland in the United States Supreme Court.³⁰

Houston, We Have a Problem. My Clients and Witnesses Are in Amsterdam.

After 10 years of squabbling over the tobacco deal, the parties showed up at the Supreme Court…right?

Wrong.

Ridley died.³¹

The van Staphorsts were in Amsterdam.³² So were most of their witnesses.³³

The parties weren’t ready to proceed.³⁴

To move the case along, the parties needed folks in Amsterdam to do some lawyering for them — specifically, to take witnesses’ depositions. After all, these American lawyers weren’t about to trek to Amsterdam to depose witnesses.

Luckily for the parties, the same law that screwed General West of West v. Barnes, the Judiciary Act of 1789, empowered the parties to “appoint a commission to take depositions…in cases where witnesses lived more than one hundred miles from the court…”³⁵ This means the parties were allowed to get folks in Amsterdam to take deps on their behalf.

I guess Congress did understand some people needed flexibility when it came to traveling far distances…but only lawyers. God forbid their shoes get scuffed.

(Did I ever tell you about the time I stepped in wet cement during my lunch break on a day when I was meeting with a client, suited up and everything? Ruined my shoes.)

So, the Dutch brothers’ attorney requested the Court’s permission to assemble a commission in Amsterdam to take deps.³⁶ The Justices initially denied the request, stating they would not grant a commission until they knew exactly who the commissioners would be, but once the parties hashed it out and came up with a list, the Court granted the request.³⁷

The Settlement

After the Supreme Court told the parties to go ahead and get their deps, Maryland’s legislature switched gears and expressed a strong preference to settle the case. And settle they did.

Ultimately, Maryland settled the case for £61,525 in U.S. stock.³⁸ That’s somewhere between $7,880,000 to $16,200,000 in today’s (2026) money.³⁹ Yikes.

The sage editors of The Documentary History of the Supreme Court of the United States, 1789–1800: Volume Five explain, “After years of wrangling, only the prospect of litigation in the Supreme Court brought the parties to a resolution of the controversy…”⁴⁰

Perhaps Maryland feared their sovereignty, or ability to govern themselves, would be threatened by putting their fate in the hands of the newly established Supreme Court.

Because the parties here settled before the Court could weigh in on the dispute, we don’t have any judicial opinions to parse like we had in West v. Barnes.

We could have an academic discussion about the budding concerns about sovereign immunity, the issue of whether somebody is actually allowed to sue a State, but we’ll get there very soon.

I think there’s a more practical lesson here.

Why Settle After a Ten Year Knife-Fight?

Can we take a minute to consider why parties sometimes fight like hell for years, only to settle at the last minute?

Every lawyer is familiar with the saying, “95% of cases settle before trial,” or something to that effect.

As a plaintiff-side employment attorney, I always shared that stat with my clients, even before I sent them a retainer agreement.

I thought it was really, really important to contextualize what resolution might look like for them.

Prior to speaking with me, I think a lot of my clients assumed their fate would be decided by a jury of their peers, in a courtroom, with all of the theatrics we see on TV. And I don’t blame them. Sometimes, that is how their fate is decided.

But the total number of cases that actually go to trial, even with a heavy caseload, is slim.

Attorneys in my practice area know a small proportion of their cases will ever go to trial because, as the factual record develops over the lifecycle of a case, there are probably going to be opportunities to reach a satisfactory (and oftentimes excellent) resolution without going to a jury.

In New Jersey, the court actually requires parties to try to resolve employment discrimination cases through mediation before they ever see the inside of a courtroom.⁴¹ The court incentivizes early resolution (in part because the court is overburdened with cases, and is desperate to clear its docket).

The fact that settlement is so common doesn’t mean most lawyers cower at the possibility of trial, or sell their clients short. I sure didn’t.

Rather, there are a number of reasons why settlement becomes the better option for so many litigants.

One is speed. In New Jersey, employment cases will be litigated for at least 450 days before they make it to trial.⁴² And after all of the extensions and motion practice, most litigants are looking at years before they get their “day in court.” For somebody who has just been fired, waiting years to be compensated for their losses is untenable.

There is also something to be said about the psychological effects of protracted litigation. Plaintiffs are subjected to a grueling discovery process, consisting of invasive discovery requests and stress-inducing depositions. Throughout the process, the plaintiff is re-traumatized because he or she is forced to re-live whatever mess gave rise to the lawsuit.

Defendants are not spared the heartache either. In the employment discrimination context, defendants find their character and business closely scrutinized.

But there is one reason above all, in my view, why plaintiffs often choose to settle their cases — to control their destiny.

When it comes to how a jury will rule, you just never know. With settlement, you do know.

At trial, good cases sometimes go south, and bad cases sometimes catch a break. There is no certainty as to how a jury will behave.

For a client to be put through the ringer for years and years, and potentially get nothing, is an untenable result for most clients (and for most lawyers).

Settlement is a counterbalance to the uncertainty of trial. When a client authorizes a settlement, she is taking destiny into her own hands, and settling the matter on her own terms. Of course, the client always has the final say.

That’s why, sometimes, parties settle just before the rubber meets the road, whether “the road” be opening statements at trial, or litigating in the Supreme Court.

In Van Staphorst v. Maryland, the parties were effectively deadlocked for ten years before they were faced with the prospect of losing control of their fate. Once the parties sobered up and saw the sands of destiny slipping through their fingers, they emerged from their trenches and made peace.

The song-and-dance showcased in Van Staphorst v. Maryland is common.

Top dog lawyers don’t want to broadcast that message to their adversaries, but that’s the truth. Litigation is often a big game of chicken.

You Be the Judge

Have more to say? Leave a comment!

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Here’s a Bluebook cite for ya – Johnathan J. Azar, What If One Million Pounds of Tobacco Could Save Your Life? Van Staphorst v. Maryland (1791) (Feb. 17, 2026)

FOOTNOTES

1. Maeva Marcus ed., The Documentary History of the Supreme Court of the United States, 1789–1800: Vol. 5, Suits Against States 7 (Columbia Univ. Press 1994). ↩︎
2. Id. ↩︎
3. Id. ↩︎
4. Id. ↩︎
5. Id. ↩︎
6. Id. at 8 ↩︎
7. Id. ↩︎
8. Id. ↩︎
9. Id. at 9 ↩︎
10. Id. ↩︎
11. Id. ↩︎
12. Id. at 8 ↩︎
13. Id. at 10 ↩︎
14. Id. at 10 ↩︎
15. Id. ↩︎
16. Id. at 11 ↩︎
17. Id. ↩︎
18. Id. at 13 ↩︎
19. Id. ↩︎
20. Id. ↩︎
21. Id. ↩︎
22. Id. at 14 ↩︎
23. Id. ↩︎
24. At the time, John Jay was Secretary for Foreign Affairs for the pre-Constitution government. Id. ↩︎
25. Documentary History, vol. 5, at 18. ↩︎
26. Dmitry Bam, Understanding Caperton: Judicial Disqualification Under the Due Process Clause, 42 McGeorge L. Rev. 65, 67 n.11 (2010), https://digitalcommons.mainelaw.maine.edu/faculty-publications/95 ↩︎
27. Id. ↩︎
28. I was starting to think John Jay was a member of the Society of the Cincinnati, but I can’t find any evidence he was… ↩︎
29. Id. ↩︎
30. Id. ↩︎
31. Id. at 17 ↩︎
32. Id. at 17-18 ↩︎
33. Id. at 18 ↩︎
34. Id. ↩︎
35. Id. ↩︎
36. Id. ↩︎
37. Id. at 18-19 ↩︎
38. Id. at 20 ↩︎
39. Lawrence H. Officer & Samuel H. Williamson, Computing “Real Value” Over Time With a Conversion Between U.K. Pounds and U.S. Dollars, 1791 to Present, MeasuringWorth (2026). ↩︎
40. Documentary History, vol. 5, at 7. ↩︎
41. Although mediation is not required under N.J. Court Rules, the Rules do empower judges to require litigants to try resolving their cases through mediation. N.J. Ct. R. 1:40-4(a) https://www.njcourts.gov/attorneys/rules-of-court. In practice, judges have mandated mediation across the board for New Jersey Law Against Discrimination cases. ↩︎
42. Alan H. Schorr, Individual Liability Under LAD & CEPA, at 1 (Apr. 2012), https://www.schorrlaw.com/articles/Individual%20Liability%20Under%20LAD%20and%20CEPA%20-%20April%202012.pdf ↩︎

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