Civil Procedure Case Brief # 4

Title and Citation: International Shoe Co. v. Washington, 326 U.S. 310 (1945)

Identities of Parties: P (State of Washington) sued D (International Shoe Co.) to
recover unpaid unemployment taxes.

Procedural History: P sued D for unpaid contributions to the states unemployment
fund. Trial court in Washington ruled it had personal jurisdiction over Ds corporation
(therefore ruling found in favor of P). Superior Court and Supreme Court of Washington
affirmed. D appealed to the United States Supreme Court claiming violation of his due
process clause of the 14
th
Amendment and Commence Clause.

Facts: D (International Shoe Co.) is a corporation based in DE with headquarters in
St. Louis, MO. D employed salesman that resided in WA that sold D products in WA
State. The commissioner who was responsible for the assessment of and collection
of contributions to the WA (P) unemployment fund served a notice of assessment on
D for failure to pay into the fund during the years 1937 to 1940. The commissioner
served the notice on the assessment upon a salesman employed by D in WA. D
sought to set aside the notice on the ground that: (1) it was not a corporation doing
business in WA, (2) had no registered agent within the state, (3) was not an
employed, and did not furnish employment within the state as defined under state
law.

Issue(s): (A) Can a state impose jurisdiction on a corporation not in the borders of
the state? (B) Can a corporations activities in a state make it subject to the
jurisdiction of that state?

Holding and Rule: Yes, for a defendant not present within the territory of a forum
to be subjected to a judgment in personam, due process requires that he have
certain minimum contacts with the forum such that the maintenance of the suit does
not offend traditional notions of fair play and substantial justice.

Courts Reasoning: Yes. A state may subject a corporation to in personam
jurisdiction where the corporation has such minimum contacts with the state as to
make it reasonable to require the corporation to defend a suit there. A corporation
is deemed to be present in a state for jurisdiction purposes when the activities of
the corporation in that state have been continuous and systematic. Due process is
violated where a state makes a binding judgment in personam against an individual
or corporate defendant with which the state has no contacts, ties, or relations.
However, to the extent that a corporation exercises the privilege of conducting
activities within a state, giving rise to certain obligations, it is not unduly
burdensome to require a corporation to respond to a suit brought within the state to
enforce those obligations. In the present case, International Shoes activities in
Washington were systematic and continuous and resulted in a large volume of
interstate business. Indeed, the obligation upon which this suit is based arose out of
those activities. International Shoe employed salesmen who resided in Washington,
whose principal activities were confined to the state, and who were compensated by
commissions based on sales. These salesmen occasionally rented at International
Shoes expense rooms in hotels or business buildings within the state for exhibiting
samples. It is clear that these activities establish sufficient contacts with
Washington, to make it reasonable, under traditional notions of fair play and
substantial justice, to permit the state to enforce the obligations, which
International Shoe has incurred there.

Judgment and Order: The decision of the court of appeals is affirmed.

Dissent: States have an unqualified right to tax and permit its citizens to sue
corporations whose agents do business in those states. The Courts decision
diminishes the power of states to afford judicial protection to their citizens.