Summary of International Shoe Co. v. State of Washington, U.S. Supreme Court (1945)
Cause of action: The following is a cause of action on grounds the 14th Amendment prohibits abuse of due process against parties as conducted in the statute, as a result of a denial of DF’s motion to dismiss earlier lawsuit against them.
Procedural History: Motion to dismiss was heard and denied, and action on decision to enact statute was affirmed by state commissioner, as well as WA Superior Court and Supreme Courts.
Facts: PL is a company based in St. Louis, MO and is engaged with clients all over the country. Salespeople travel in the state of Washington and deal with clients, help put together deals at the behest of the corporation, but the corporation holds no offices in the state, save the instances where they rent out showrooms in hotels.
The state has a collection statute for its unemployment fund, in which business of the state contribute. PL refused to contribute on the grounds they are not a business entity of the state. DF contends if they bring their business into the state, they should have to pay into the fund. PL was served in state of WA via a salesperson working in the state at the time, and also served with notice of suit through the mails to their home offices.
Issue(s): Under federal rules of civil procedure, is a company with no business residence in the state required to pay into a state unemployment fund when they had no other ties except for business dealings within the state
Is appropriate notice through a sales agent and through the mails appropriate notice to serve a complaint in such a matter?
Court’s Rationale/Reasoning: Holding that the systematic and continuous activities carried on in-state by appellant’s salesmen made it reasonable and just to permit appellee to enforce the tax by suit against appellant in the forum, the court affirmed. The court held that in order to subject appellant to a judgment in personam, due process required only that the appellant have certain minimum contacts with the forum state such that the maintenance of the suit did not offend traditional notions of fair play and substantial justice.
The court also held that a corporation was deemed to have a “presence” in a state for jurisdictional purposes where its in-state activities had been continuous and systematic and gave rise to the liability sued on. The court held that the activity of appellant’s salesmen was not only substantial, but also gave rise to the obligation to contribute to the unemployment compensation fund. (minimum contacts)
Rule: The term “presence” is used to determine a business/person’s activities, in addition to potentially their residence and/or activity within the jurisdiction in question.