International Shoe Co. v. Washington, 326 U.S. 310 (1945)
Personal jurisdiction is constitutional when a defendant has minimum contacts with the state where a lawsuit is brought such that notions of fair play and substantial justice would not be offended.
International Shoe Co. was a business incorporated in Delaware with its principal place of business in Missouri. It employed about a dozen salesmen in the state of Washington, who were residents of that state paid by commissions on their sales. International Shoe did not own any property or have a permanent location in Washington, since the salesmen used hotels and rented spaces to interact with potential clients. This system was designed to restrict the company's location to Missouri, although the business earned about $30,000 annually from customers in Washington.
The state enacted a tax on companies doing business there that functioned as a mandatory contribution to its Unemployment Compensation Fund. When International Shoe failed to comply with the tax, the state of Washington served a notice of assessment on one of the resident salesmen and sent a letter by registered mail to the company's Missouri headquarters. International Shoe tried to forestall the case at the outset by moving that it be dismissed for a lack of personal jurisdiction. This argument failed at every level of the state court system.
- Harlan Fiske Stone (Author)
- Stanley Forman Reed
- Felix Frankfurter
- William Orville Douglas
- Frank Murphy
- John Rutledge
- Harold Hitz Burton
Analyzing the level of contact between International Shoe and the state of Washington, Stone found that due process was satisfied by personal service on the salesman and mailing the registered letter to the corporate headquarters. He felt that the tax was constitutional and the interstate nature of International Shoe's operations did not exempt it from contributions. The opinion articulated the standard of "minimum contacts" that gave rise to much modern jurisprudence in the area of personal jurisdiction. Stone ruled that a forum is proper if establishing jurisdiction over the defendant there would not offend traditional notions of fair play and substantial justice. He also divided types of contact into systematic and continuous contact as opposed to casual contact. In the former situation, any type of claim may be brought against a defendant. In the latter situation, only claims related to the contact with the state can be brought there.
- Hugo Lafayette Black (Author)
Black argued that the majority did not go far enough in giving states the ability to claim jurisdiction over corporate defendants from outside their borders.
- Robert Houghwout Jackson (Author)
Traditionally, non-foreign corporations could be brought into a court only by consent, by being present in a state through doing business there, or a combination. These theories became outdated as interstate commerce grew, and this decision shows that corporations can be sued in many states in a broad range of situations. States now have long arm statutes that have codified this type of jurisdiction, which may be essential in view of the increasingly fluid economy and the tendency of corporations to do business nationwide.
U.S. Supreme CourtInternational Shoe v. State of Washington, 326 U.S. 310 (1945)
International Shoe v. State of Washington
Argued November 14, 1945
Decided December 3, 1945
326 U.S. 310
Activities within a State of salesmen in the employ of a foreign corporation, exhibiting samples of merchandise and soliciting orders from prospective buyers to be accepted or rejected by the corporation at a point outside the State, were systematic and continuous, and resulted in a large volume of interstate business. A statute of the State requires employers to pay into the state unemployment compensation fund a specified percentage of the wages paid for the services of employees within the State.
1. In view of 26 U.S.C. § 1606(a) , providing that no person shall be relieved from compliance with a state law requiring payments to an unemployment fund on the ground that he is engaged in interstate commerce, the fact that the corporation is engaged in interstate commerce does not relieve it from liability for payments to the state unemployment compensation fund. P. 326 U. S. 315.
2. The activities in behalf of the corporation render it amenable to suit in courts of the State to recover payments due to the state unemployment compensation fund. P. 326 U. S. 320.
(a) The activities in question established between the State and the corporation sufficient contacts or ties to make it reasonable and just, and in conformity to the due process requirements of the Fourteenth Amendment, for the State to enforce against the corporation an obligation arising out of such activities. P. 326 U. S. 320.
(b) In such a suit to recover payments due to the unemployment compensation fund, service of process upon one of the corporation's salesmen within the State, and notice sent by registered mail to the corporation at its home office, satisfies the requirements of due process. P. 326 U. S. 320.
3. The tax imposed by the state unemployment compensation statute -- construed by the state court, in its application to the corporation, as a tax on the privilege of employing salesmen within the State -- does not violate the due process clause of the Fourteenth Amendment. P. 326 U. S. 321.
22 Wash. 2d 146, 154 P.2d 801, affirmed.
APPEAL from a judgment upholding the constitutionality of a state unemployment compensation statute as applied to the appellant corporation.