Appellant, an Indiana corporation, maintains an office in New
Jersey on premises leased in the name of its district manager and
occupied by him and a secretary, with appellant's name on the door
and in the lobby and with the telephone listed in appellant's name.
Appellant also has 18 other salaried employees traveling throughout
the State and promoting the sale of its pharmaceutical products not
to wholesalers, who buy them interstate, but to hospitals,
physicians and retail drugstores, who buy them intrastate from
wholesalers and sell them intrastate to consumers.
on the record in this case, appellant is doing
business intrastate in New Jersey, and a state statute requiring it
to obtain a certificate of authority to do business there, as a
condition precedent to maintaining in a state court a suit not
based on a particular interstate sale, does not violate the
Commerce Clause of the Federal Constitution. Pp. 366 U. S.
31 N.J. 591, 158
MR. JUSTICE BLACK delivered the opinion of the Court.
The appellant Eli Lilly and Company, an Indiana corporation
dealing in pharmaceutical products, brought this action in a New
Jersey state court to enjoin the
Page 366 U. S. 277
appellee Sav-On-Drugs, Inc., a New Jersey corporation, from
selling Lilly's products in New Jersey at prices lower than those
fixed in minimum retail price contracts into which Lilly had
entered with a number of New Jersey drug retailers. Sav-On had
itself signed no such contract but, under the New Jersey Fair Trade
Act, prices so established become obligatory upon nonsigning
retailers who have notice that the manufacturer has made these
contracts with other retailers. [Footnote 1
] Sav-On moved to dismiss this complaint under a
New Jersey statute that denies a foreign corporation transacting
business in the State the right to bring any action in New Jersey
upon any contract made there unless and until it files with the New
Jersey Secretary of State a copy of its charter, together with a
limited amount of information about its operations, [Footnote 2
] and obtains from him a
certificate authorizing it to do business in the State. [Footnote 3
Lilly opposed the motion to dismiss, urging that its business in
New Jersey was entirely in interstate commerce and arguing, upon
that ground, that the attempt to require it to file the necessary
information and obtain a certificate for its New Jersey business
was forbidden by the Commerce Clause of the Federal Constitution.
Both parties offered evidence to the Court in the nature of
affidavits as to the extent and kind of business done by Lilly with
New Jersey companies and people. On this
Page 366 U. S. 278
evidence, the trial court made findings of fact and granted
Sav-On's motion to dismiss, stating as its ground that
"the conclusion is inescapable that the plaintiff [Lilly] was in
fact doing business in this State at the time of the acts
complained of, and was required to, but did not, comply with the
provisions of the Corporation Act. [Footnote 4
On appeal to the Supreme Court of New Jersey, this
constitutional attack was renewed, and the State Attorney General
was permitted to intervene as a party defendant to defend the
validity of the statute. The State Supreme Court then affirmed the
judgment upholding the statute, relying entirely upon the opinion
of the trial court. [Footnote
] We noted probable jurisdiction to consider Lilly's
contention that the constitutional question was improperly decided
by the state courts. [Footnote
The record shows that the New Jersey trade in Lilly's
pharmaceutical products is carried on through both interstate and
intrastate channels. Lilly manufactures these products and sells
them in interstate commerce to certain selected New Jersey
wholesalers. These wholesalers then sell the products in intrastate
commerce to New Jersey hospitals, physicians and retail drug
stores, and these retail stores, in turn, sell them, again in
intrastate commerce, to the general public. It is well established
that New Jersey cannot require Lilly to get a certificate of
authority to do business in the State if its participation in this
trade is limited to its wholly interstate sales to New Jersey
wholesalers. [Footnote 7
the authority of the so-called "drummer" cases, such as Robbins
Page 366 U. S. 279
County Taxing District,
] Lilly is free to send salesmen into New Jersey
to promote this interstate trade without interference from
regulations imposed by the State. On the other hand, it is equally
well settled that, if Lilly is engaged in intrastate as well as
interstate aspects of the New Jersey drug business, the State can
require it to get a certificate of authority to do business.
] In such a
situation, Lilly could not escape state regulation merely because
it is also engaged in interstate commerce. We must then look to the
record to determine whether Lilly is engaged in intrastate commerce
in New Jersey.
The findings of the trial court, based as they are upon
uncontroverted evidence presented to it, show clearly that Lilly is
conducting an intrastate as well as an interstate business in New
"The facts are these: Plaintiff maintains an office at 60 Park
Place, Newark, New Jersey. Its name is on the door and on the
tenant registry in the lobby of the building. (The September 1959
issue of the Newark Telephone Directory lists the plaintiff, both
in the regular section and in the classified section under
'Pharmaceutical Products,' as having an office at 60 Park Place,
Newark.) The lessor of the space is plaintiff's employee, Leonard
L. Audino, who is district manager in charge of its marketing
division for the district known as Newark. Plaintiff is not a party
to the lease, but it reimburses Audino 'for all expenses incidental
to the maintenance and operation of said office.' There is a
secretary in the office,
Page 366 U. S. 280
who is paid directly by the plaintiff on a salary basis. There
are 18 'detailmen' under the supervision of Audino. These detailmen
are paid on a salary basis by the plaintiff, but receive no
commissions. Many, if not all of them, reside in the State of New
Jersey. Whether plaintiff pays unemployment or other taxes to the
State of New Jersey is not stated. It is the function of the
detailmen to visit retail pharmacists, physicians and hospitals in
order to acquaint them with the products of the plaintiff with a
view to encouraging the use of these products. Plaintiff contends
that their work is 'promotional and informational only.' On an
occasion, these detailmen, 'as a service to the retailer,' may
receive an order for plaintiff's products for transmittal to a
wholesaler. They examine the stocks and inventory of retailers and
make recommendations to them relating to the supplying and
merchandising of plaintiff's products. They also make available to
retail druggists, free of charge, advertising and promotional
material. When defendant opened its store in Carteret, plaintiff
offered to provide, and did provide, announcements for mailing to
the medical profession, without cost to defendant. The same thing
occurred when defendant opened its Plainfield store. [Footnote 10
We agree with the trial court that "[t]o hold under the facts
above recited that plaintiff [Lilly] is not doing business in New
Jersey is to completely ignore reality." [Footnote 11
] Eighteen "detailmen," working out of a
big office in Newark, New Jersey, with Lilly's name on the door and
in the lobby of the building, and with Lilly's district manager and
secretary in charge, have been regularly engaged
Page 366 U. S. 281
in work for Lilly which relates directly to the intrastate
aspects of the sale of Lilly's products. These eighteen "detailmen"
have been traveling throughout the State of New Jersey promoting
the sales of Lilly's products not to the wholesalers, Lilly's
interstate customers, but to the physicians, hospitals and
retailers who buy to use products in intrastate commerce from the
wholesalers. To this end, they have provided these hospitals,
physicians and retailers with up-to-date knowledge of Lilly's
products and with free advertising and promotional material
designed to encourage the general public to make more intrastate
purchases of Lilly's products. And they sometimes even directly
participate in the intrastate sales themselves by transmitting
orders from the hospitals, physicians and drugstores they service
to the New Jersey wholesalers.
This Court had a somewhat similar problem before it in
Cheney Brothers Co. v. Massachusetts.
] In that case, the Northwestern
Consolidated Milling Company of Minnesota had been conducting
business in Massachusetts in a manner quite similar to that being
used by Lilly in New Jersey -- a number of wholesalers were buying
Northwestern's flour in interstate commerce and selling it to
retail stores in Massachusetts in intrastate commerce. Northwestern
had in Massachusetts, in addition to any force of drummers it may
have had to promote its interstate sales to the wholesalers, a
group of salesmen who traveled the State promoting the sale of
flour by Massachusetts wholesalers to Massachusetts retailers.
These salesmen also solicited orders from the retail dealers and
turned them over to the nearest Massachusetts wholesaler. Despite
this substantial connection with the intrastate business in
Massachusetts, Northwestern contended that its business was wholly
in interstate commerce -- a
Page 366 U. S. 282
contention that this Court disposed of summarily in the
following words: "Of course, this is a domestic business --
inducing one local merchant to buy a particular class of goods from
another." [Footnote 13
Lilly attempts to distinguish the holding in the Cheney
case on the ground that, here, its detailmen are not engaged in a
systematic solicitation of orders from the retailers. It is true
that the record in the Cheney
case shows a more regular
solicitation of orders than does the record here. But that
difference is not enough to distinguish the cases. For the record
shows that Lilly here, no less than Northwestern there, engages in
a "domestic business -- inducing," as the Court said of
Northwestern, "one local merchant to buy a particular class of
goods from another." The fact that the business of "inducing"
intrastate sales, as engaged in by Lilly, is primarily a
promotional and service business which does not include a
systematic solicitation of orders goes only to the nature of the
intrastate business Lilly is carrying on, not to the question of
whether it is carrying on an intrastate business.
Lilly also contends that, even if it is engaged in intrastate
commerce in New Jersey, and can, by virtue of that fact, be
required to get a license to do business in that State, New Jersey
cannot properly deny it access to the courts in this case, because
the suit is one arising out of the interstate aspects of its
business. In this regard, Lilly relies upon such cases as
International Textbook Co. v. Pigg,
] holding that a State cannot
condition the right of a foreign corporation to sue upon a contract
for the interstate sale of goods. We do not think that those cases
are applicable here, however, for the present suit is not of that
kind. Here, Lilly is suing upon a contract entirely
Page 366 U. S. 283
separable from any particular interstate sale and the power of
the State is consequently not limited by cases involving such
What we have said would be enough to dispose of this case were
it not for the contention that the question whether Lilly is
engaged in intrastate commerce in New Jersey is not properly before
us. This contention is based upon Lilly's interpretation of the
decision of the New Jersey court as resting upon the assumption
that Lilly has been engaged in interstate commerce only. We cannot
accept that contention, because, in the first place, it rests upon
a completely erroneous interpretation of the New Jersey court's
opinion. That court was called upon to decide whether appellant was
"transacting business" in New Jersey within the meaning of the
statute which requires the registration of foreign corporations. In
deciding that question, the court relied upon the facts set out in
the affidavits with regard to the various local activities of Lilly
as summarized in the findings quoted above. The only reasonable
inference from these findings is that the trial court interpreted
the phrase "transacting business" in the New Jersey statute to mean
transacting local intrastate business, and concluded from the facts
it found that Lilly was transacting such business. This conclusion
is reinforced by a subsequent New Jersey opinion that distinguishes
the decision in this case on precisely that ground. [Footnote 15
But even if the opinion of the court below should, as is urged,
be interpreted as resting upon the mistaken belief that appellant
could be required to register, even though it transacted no
business whatever in New Jersey except interstate business, we
think it would still be necessary to affirm the decision of that
court on the record presently before us. That record clearly shows
Page 366 U. S. 284
was, as a matter of fact, engaged in local intrastate business
in New Jersey through the employees it kept there to induce
retailers, physicians and hospitals to buy Lilly's products from
New Jersey wholesalers in intrastate commerce. So, even if the
state court had rested its conclusions on an improper ground, this
Court could not, in view of the undisputed facts establishing its
validity declare a solemn act of the State of New Jersey
unconstitutional. The record clearly supports the judgment of the
New Jersey Supreme Court, and that judgment must therefore be, and
N.J.Rev.Stat. 56:4-6. The legality of such arrangements insofar
as the antitrust laws are concerned was provided for by the McGuire
Act, 66 Stat. 632, 15 U.S.C. § 45(a).
The information required is: (1) the amount of the corporation's
authorized capital stock; (2) the amount of stock actually issued
by the corporation; (3) the character of the business which the
corporation intends to transact in New Jersey; (4) the principal
office of the corporation in New Jersey; and (5) the name and place
of abode of an agent upon whom process against the corporation may
be served. N.J.Rev.Stat. 14:15-3.
57 N.J.Super. 291, 302,
154 A.2d 650
31 N.J. 591, 158 A.2d
364 U.S. 860.
See, e.g., Crutcher v. Kentucky, 141 U. S.
; International Textbook Co. v. Pigg,
217 U. S. 91
Sioux Remedy Co. v. Cope, 235 U.
120 U. S. 120
489. The Robbins
case has been followed in a long line of
subsequent decisions by this Court. A partial list of these cases
is set out in Memphis Steam Laundry Cleaner v. Stone,
342 U. S. 389
342 U. S.
-393, note 7.
See, e.g., Railway Express Co. v. Virginia,
282 U. S. 440
Cf. Union Brokerage Co. v. Jensen, 322 U.
, especially at 322 U. S.
57 N.J.Super. at 298-299, 154 A.2d at 654.
at 300, 154 A.2d at 655.
246 U. S. 246
246 U.S. at 246 U. S.
217 U. S. 217
91. See also Furst v. Brewster, 282 U.
; Sioux Remedy Co. v. Cope, 235 U.
United States Time Corp. v. Grand Union Co.,
N.J.Super. 39, especially at 45-46,
MR. JUSTICE HARLAN, concurring.
On the premise that New Jersey cannot impede an out-of-state
seller's access to the state market, [Footnote 2/1
] the difficult issue presented in this case
is how much more than shipping its goods into New Jersey Lilly may
do within the State without subjecting itself to the requirements
and sanctions of New Jersey's licensing laws. In joining the
Court's opinion, I think some further observations appropriate.
It is clear that sending "drummers" into New Jersey seeking
customers to whom Lilly's goods may be sold and shipped,
Robbins v. Shelby County Taxing District, 120 U.
, and suing in the state courts to enforce
contracts for sales from an out-of-state store of goods,
Page 366 U. S. 285
International Textbook v. Pigg, 217 U. S.
, are both so intimately connected with Lilly's right
to access to the local market, free of local controls, that they
cannot be separated off as "local business" even if they are
conducted wholly within New Jersey. However, I do not think that
the systematic promotion of Lilly's products among local retailers
and consumers who, as Lilly conducts its affairs, can only purchase
them from a New Jersey wholesaler bears the same close relationship
to the necessities of keeping the channels of interstate commerce
state-unburdened. I believe that New Jersey can treat as "local
business" such promotional activities, which are pointed at and
result initially in local sales by Lilly's customers, and not in
direct sales from its own out-of-state store of goods. [Footnote 2/2
] Three factors, particularly,
persuade me to that view.
Page 366 U. S. 286
a licensing requirement, as applied in this
situation, does not deny Lilly a significant opportunity to reach
New Jersey customers. Appellant remains free, and is
constitutionally entitled to remain free, to solicit purchases
directly by New Jersey retailers and consumers or, alternatively,
to rely on its wholesalers to develop the New Jersey market. Thus,
Lilly is not in the position of the manufacturer with whose
protection Mr. Justice Bradley was concerned when, in Robbins
v. Shelby County, supra,
at 120 U. S. 494
"How is a manufacturer, or a merchant, of one state to sell his
goods in another state, without in some way obtaining orders
therefor? Must he be compelled to send them at a venture, without
knowing whether there is any demand for them?"
were Lilly, for a distinct consideration, to
enter into an arrangement with its New Jersey wholesalers to
promote or solicit business within the State for their account, I
would suppose it scarcely doubtful that such an endeavor would
constitute a local incident subject to the State's licensing power,
even though the ultimate purpose and effect of the arrangement
itself were also to enhance Lilly's own interstate business. I do
not see why New Jersey must treat differently Lilly's present
activities, which, in fact, redound both to the wholesalers'
benefit, by lessening the need for promotional effort and expense
on their part, and to Lilly's profit, in the form of increased
orders from wholesalers. See Cheney Brothers v.
Massachusetts, 246 U. S. 147
] cf. 340 U.
Page 366 U. S. 287
Department of Revenue, 340 U.
, 340 U. S. 536
340 U. S.
-539. A different constitutional result is not
indicated by the circumstance that no consideration, other than the
purchase price for goods bought, is paid Lilly by the wholesalers,
and that the benefit to Lilly from such local service comes from
the resulting increase in interstate sales. The essential point is
that Lilly's New Jersey activities were
"wholly separate from interstate commerce, involved no question
of the delivery of property shipped in interstate commerce or of
the right to complete an interstate commerce transaction, but
concerned merely the doing of a local act after interstate commerce
had completely terminated."
Browning v. City of Waycross, 233 U. S.
, 233 U. S. 22
I cannot agree that the effect of the decision
in this case "is to repudiate the whole line of drummer'
cases." We have not been referred to any case in which
Page 366 U. S.
an interstate seller has been granted an immunity from a
state license requirement where the seller has promoted or
participated in transactions between a local vendor and a local
purchaser involving goods already within the State. Cf. Wagner
v. City of Covington, 251 U. S. 95. The
only aspect of the present case that resembles the "drummer" cases
is the fact that Lilly's promotion of local sales ultimately serves
to increase its interstate sales. To treat this factor as bringing
the present situation within the drummer cases would, in my view,
be substantially to extend the reach of those cases. I am not
prepared to subscribe to such an extension at the expense of state
power to regulate the promotion of sales of goods owned and located
within the State when the countervailing federal considerations are
as thin as they seem to me to be here, and when the interstate
seller remains free to enjoy the immunities of interstate commerce
by simply restricting its promotion to those who may buy from its
own out-of-state store of goods.
Finally, while I am less clear than the rest of the majority
that the state courts based their decision on a finding of "local
business," I do not believe that any doubt on that score forecloses
us from now sustaining the State on that ground where, as here, the
facts leading to that conclusion are not in dispute. See
Nashville, C. & St. L. R. Co. v. Browning, 310 U.
Because I am of the view that Eli Lilly has engaged in "local
business" in New Jersey, there is no need now to consider whether a
wholly interstate business enjoys the same degree of immunity from
state licensing provisions when the state requirement is regulatory
as it does when the state requirement is purely a tax measure.
Compare California v. Thompson, 313 U.
, and Union Brokerage Co. v. Jensen,
322 U. S. 202
with Nippert v. Richmond, 327 U.
, and Spector Motor Service, Inc., v.
O'Connor, 340 U. S. 602
Powell, Vagaries and Varieties in Constitutional
Interpretation, 172-176, 186-187.
There can be no doubt that the "promotional and informational"
activities of Lilly in New Jersey were specifically aimed at
securing retail and consumer trade for its local wholesalers. One
of the two affidavits submitted by Lilly in opposition to the
motion below states:
"The primary purpose of said employees [stationed in New Jersey]
is to acquaint retail pharmacists, physicians, and hospitals with
the products of Eli Lilly and Company so that the said retail
pharmacists, physicians, and hospitals will order Lilly products
from local wholesale distributors."
The other such affidavit states:
"It is the function of said detail men [Lilly employees
stationed in New Jersey] only to visit retail pharmacists,
physicians and hospitals and to acquaint same with the various
products of Eli Lilly and Company, with a view to encouraging the
purchase and use of said retail products by such institutions and
professional men. The work of the detail men is promotional and
informational only. They do not accept orders under any
circumstances for the purchase of Eli Lilly and Company products.
Products of Eli Lilly and Company are sold to retailers in the
State of New Jersey by wholesale distributors. On occasion, detail
men of Eli Lilly and Company may, as a service to the retailer,
receive an order for Eli Lilly and Company products only for the
purpose of transmitting same to the wholesaler. Orders so received
and transmitted are then subject to acceptance or rejection by the
To the same effect are the findings of the state court which are
set forth in this Court's opinion, 366 U.S. at 366 U. S.
I recognize that the force of the Cheney Brothers
at least in the field of state income taxation, has been impaired
by the Act of September 14, 1959, Pub.L. 86-272, 73 Stat. 555,
which was passed by the Congress in response to our decision in
Northwestern States Portland Cement Co. v. Minnesota,
358 U. S. 450
Even so, it should be observed that the statute, which immunizes
from the reach of state income taxation a foreign concern's
intrastate solicitation of orders "for the benefit of a prospective
[interstate] customer," does not include within such immunity
situations where the foreign seller maintains a local office for
the purpose of such solicitation. See
§ 101(c) of the
statute and 105 Cong.Rec. 16469-16477. Lilly maintains an office in
New Jersey in connection with its promotional activities. Reliance
on the Northwestern Cement
opinion's characterization of
activities similar to those of Lilly as being "exclusively in
furtherance of interstate commerce" seems to me to be stretching
too far a casual reference which was quite unnecessary to the issue
decided by the Court in that case.
In the Browning
case, an agent of an out-of-state
seller of lightning rods, who was engaged in installing lightning
rods, purchased in interstate commerce, for the customers of such
seller, was held subject to a state tax on the occupation of
erecting lightning rods despite the fact that the contract for the
purchase of such rods obligated the seller to install the rods at
its own expense. The Court observed that
"it was not within the power of the parties, by the form of
their contract, to convert what was exclusively a local business,
subject to state control, into an interstate commerce business
protected by the commerce clause."
at 233 U. S.
I do not regard such cases as Sprout v. City of South
Bend, 277 U. S. 163
Leloup v. Port of Mobile, 127 U.
, as controlling contrary authority in light of
the opinion of the New Jersey Superior Court which suggests that
the state statute may apply only to constitutionally licensable
local business. In this regard, see
the Superior Court's
later opinion in United States Time Corp. v. Grand Union
64 N.J.Super. 39,
165 A.2d 310
MR. JUSTICE DOUGLAS, with whom MR. JUSTICE FRANKFURTER, MR.
JUSTICE WHITTAKER and MR. JUSTICE STEWART concur, dissenting.
The Court, with all deference, blends in this opinion three
distinct lines of decisions which until today have
Page 366 U. S. 289
been considered separate. They do, indeed, present different
problems one from the other. I refer to our decisions concerning
the power of a State (1) to tax an interstate enterprise, (2) to
subject it to local suits, and (3) to license it.
(1) If New Jersey sought to collect from appellant a tax
apportioned to some local business activity which it carries on in
that State, I would see no constitutional objection to it.
Northwestern Cement Co. v. Minnesota, 358 U.
. Such an apportioned tax imposed by New Jersey
would have relation "to opportunities which it has given, to
protection which it has afforded, to benefits which it has
conferred." Wisconsin v. J. C. Penney Co., 311 U.
, 311 U. S.
(2) If appellant were sued in New Jersey, I think its
connections with that State have been sufficient to make it subject
to the jurisdiction of the state courts (International Shoe Co.
v. Washington, 326 U. S. 310
least as to suits which reveal a "substantial connection" with the
State. McGee v. International Life Ins. Co., 355 U.
. Cf. Hanson v. Denckla, 357 U.
, 357 U. S.
(3) The present case falls in neither of those two categories.
New Jersey demands that appellant obtain from it a certificate
authorizing it to do business in the State, absent which she denies
appellant access to her courts. The case thus presents the
strikingly different issue -- whether an interstate business can be
subjected to a licensing system.
I put to one side cases such as Union Brokerage Co. v.
Jensen, 322 U. S. 202
Rice v. Santa Fe
Page 366 U. S. 290
Corp., 331 U. S. 218
where the issue was whether a company doing business in the State
was exempt from a regulation of this kind because Congress had
subjected it to a licensing system. I also put to one side
Railway Express Agency v. Virginia, 282 U.
, where a company, doing an intrastate
as well as an
interstate express business, was required to obtain a certificate
authorizing it to conduct an intrastate business. The question here
is whether a State can require a license for the doing of an
interstate business. The power to license the exercise of a federal
right, like the power to tax it, is "the power to control or
suppress its enjoyment." Murdock v. Pennsylvania,
319 U. S. 105
319 U. S. 112
Soliciting interstate business has, up to this day, been on the
same basis as doing an interstate business so far as the protection
of the Commerce Clause is concerned. It has usually been argued
that soliciting interstate business is a "local activity" that can
be licensed by a State or on which a State may lay a privilege tax.
That was the argument in Nippert v. Richmond, 327 U.
, 327 U. S. 420
Memphis Steam Laundry v. Stone, 342 U.
, 342 U. S. 392
We rejected it, pointing out that, in the long line of case
beginning with Robbins v. Shelby County, 120 U.
, "this Court has held that a tax imposed upon the
solicitation of interstate business is a tax upon interstate
commerce itself." 342 U.S. at 342 U. S.
What appellant's employees do in New Jersey is certainly no more
than what a "drummer" for an interstate house does. The record
shows that petitioner's employees engage in the following
activities in New Jersey:
"It is the function of the detailmen to visit retail
pharmacists, physicians, and hospitals in order to acquaint them
with the products of the plaintiff with a view to encouraging the
use of these products.
Page 366 U. S. 291
Plaintiff contends that their work is 'promotional and
informational only.' On an occasion, these detailmen, 'as a service
to the retailer,' may receive an order for plaintiff's products for
transmittal to a wholesaler. They examine the stocks and inventory
of retailers and make recommendations to them relating to the
supplying and merchandising of plaintiff's products. They also make
available to retail druggists, free of charge, advertising and
promotional material. When defendant opened its store in Carteret,
plaintiff offered to provide, and did provide, announcements for
mailing to the medical profession, without cost to defendant. The
same thing occurred when defendant opened its Plainfield
In Robbins v. Shelby County, supra,
p. 120 U. S. 491
the "drummer" who failed to take out a license from the State was
doing the following:
"Sabine Robbins . . . , a citizen and resident of Cincinnati,
Ohio, . . . was engaged in the business of drumming in the taxing
district of Shelby county, Tenn.; i.e.,
by the use of samples, for the house or firm for which he worked as
(a) drummer; said firm being the firm of 'Rose, Robbins & Co.,'
doing business in Cincinnati, and all the members of said firm
being citizens and residents of Cincinnati, Ohio."
In this case, appellant's employees within the State were
engaged solely in the "drumming up" of appellant's interstate
trade. They did this not by direct solicitation of the interstate
buyers, but by contacts with the customers of the buyers. Such
activities were said to be "exclusively in furtherance of
interstate commerce" only two years ago in Northwestern States
Portland Cement Co. v. Minnesota, supra, 358 U. S. 452
358 U. S. 455
Yet today the Court finds these activities to be separable from
appellant's interstate business;
Page 366 U. S. 292
appellant is "inducing" sales, not "soliciting" them. It is not
a distinction I can accept.
We deal here with a general state regulatory measure. Under our
precedents, access to state courts cannot be barred to "a foreign
corporation merely coming into [the State] to contribute to or to
conclude a unitary interstate transaction." Union Brokerage Co.
v. Jensen, 322 U. S. 202
322 U. S. 211
Yet that is what New Jersey claims the power to do. We have struck
down similar state requirements which barred access to state courts
to recover the purchase price on an interstate contract,
International Textbook Co. v. Pigg, 217 U. S.
, to recover for the breach of an interstate contract
of sale, Dahnke-Walker Milling Co. v. Bondurant,
257 U. S. 282
to attack as fraudulent the transfer of assets of a domestic
debtor, Buck Stove & Range Co. v. Vickers,
226 U. S. 205
Surely, the cause of action here asserted does not involve a state
interest more compelling than the protection of domestic debtors or
the stability of title to domestic lands.
The Court places special reliance on Cheney Bros. Co. v.
Massachusetts, 246 U. S. 147
246 U. S. 155
where Massachusetts' imposition of an "excise tax" on the
Northwestern Consolidated Milling Company was upheld. There, the
entire activity of the foreign corporation in the State was the
direct solicitation of orders for local wholesalers. Here, the
dominant activity is nothing more than advertising and public
relations. These are the minimum activities in which every
"drummer" for an out-of-state concern engages.
To hold that New Jersey can license appellant in this case is to
repudiate the whole line of "drummer" cases.
This case, on its own, may do little injury. But it provides the
formula whereby a State can stand over the channels of interstate
commerce in a way that promises to do great harm to the national
market that heretofore the Commerce Clause has protected.
* In that case, the express company picked up and delivered
articles within Virginia as well as shipped other articles into and
out of the State.