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Law School Case Brief

Int'l Shoe Co. v. Washington - 326 U.S. 310, 66 S. Ct. 154 (1945)

Rule:

Due process requires only that in order to subject a defendant to a judgment in personam, if he is not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.

 

Facts:

International Shoe Co. was incorporated in Delaware and had its principal place of business in St. Louis, Missouri. While the corporation did not have an office in Washington (“State”), it employed eleven to thirteen salesmen, who were residents of the State and who exhibited product samples to prospective buyers from the State. The corporation compensated the salesmen in the form of commissions for any sales from customers they solicited. Due to these business activities, the State issued a Notice of Assessment holding the corporation liable for contributions to the State’s unemployment compensation fund by virtue of the Washington Unemployment Compensation Act. Notice was served via mail and personal service to the Washington salesmen. The corporation refused to pay, arguing that they were not conducting business in Washington and thus the State had no jurisdiction over it. They further argued that the service of notice was insufficient to constitute due process. The trial court ruled in favor of the State and the Supreme Court of Washington ruled that there was sufficient business activity to hold the corporation liable for taxes to the State. The corporation appealed the decision to the Supreme Court of the United States.     

Issue:

Can a non-resident corporation's activities in a state make it subject to the jurisdiction of that state?

Answer:

Yes

Conclusion:

Due process requires only that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend "traditional notions of fair play and substantial justice." The activities carried on in the state of Washington on behalf of the Corporation were neither irregular nor casual.  They were systematic and continuous throughout the years in question.  They resulted in a large volume of interstate business, in the course of which appellant received the benefits and protection of the laws of the state, including the right to resort to the courts for the enforcement of its rights.  The obligation which is here sued upon arose out of those very activities.  It is evident that the operations of the salesmen in Washington established sufficient contacts or ties with the state to make it reasonable and just, according to traditional conception of fair play and substantial justice, to permit the state to enforce the obligations which appellant has incurred there.  Hence we cannot say that the maintenance of the present suit in the State of Washington involves an unreasonable or undue procedure. It is enough that appellant established such contacts with the state that the particular form of substituted service adopted there gives reasonable assurance that the notice will be actual.  

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