International Shoe Co. v. Washington

326 U.S. 310 (1945)

Facts:

  • Appellant is a Delaware corporation with headquarters in St. Louis MO.
  • Appellant employed 11-13 salesmen between 1937-1940 who resided in Washington, but were under the direct supervision of managers in St. Louis.
  • The salesmen’s primary activities were in Washington, where they rented permanent sample rooms or hotel rooms for the purposes of displaying to prospective buyers.
  • The salesmen only have authority to show the samples and solicit orders from prospective buyers. Checks are cashed and orders are filled and shipped from St. Louis and other points outside Washington.       Salesmen cannot enter into contracts or make collections.

Procedural History:

  • State of Washington sues ISC for failure to contribute to the state’s unemployment compensation fund
  • Court finds for state
  • ISC appeals

Affirmed

Contentions of parties:

ISC: Washington has no jurisdiction over them. Appellants contend that service upon appellant’s salesman was not proper service upon appellant. Appellant was:

  1. Not a WA corporation
  2. Not doing business with the state
  3. Did not have an agent within the state to properly serve
  4. Not an employer under statute

Issue:

What level of connection must exist between a non-resident corporation and a state in order for that corporation to be sued within that state?

Holding:

Jurisdiction was appropriate in this case because International Shoe Co. engaged in substantial activities in the state of Washington, enjoyed the benefits and protections of the state of Washington through the ability to sell there, and had access to Washington’s courts to resolve its disputes

Rule:

The Fourteenth Amendment requires that a defendant cannot be brought before a court of a particular state unless that person has:

Certain minimum contacts with the forum state such that maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice”

Reasoning:

Pennoyer v. Neff (1877) established that a person’s presence was needed within the state to properly serve that person, but since the process of summons has come into being, a person needs only to have “certain minimum contacts with the forum state such that maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.”

* To define “certain minimum contacts” the court defines:

  1. The difference between continuous / systematic and isolated activities
  2. Quality and nature of the activities
  3. Whether suit arises directly from these activities

* Doing business with a state gives the corporation the protection and benefits of its laws, including the right to file suit. These protections bring responsibilities, including having to respond to suits that arise directly from the enforcement of laws connected with the corporation’s activities.

* Application: the activities of INC in WA were

  1. Continuous & systematic
  2. Enjoyed the rights and benefits of state law
  3. Obligation to contribute to unemployment fund arose directly from these activities.

Concurring opinion:

Justice BLACK:

*To uphold that corporations cannot be served in states in which they deal with state citizens would be to deny the citizens of due process.