Case Heading:
INTERNATIONAL SHOE CO. v. WASHINGTON
US Supreme Court, 1945
Parties: International Shoe Co. (appellant-def); Washington State (appellee-plaintiff).
Procedural History and Outcome: Appellant made special appear and moved to set aside order and
notice on the grounds that service was not proper. Motioned was denied on appeal and it was ruled that
Commissioner was entitled to recover unpaid contributions. Both Superior and Supreme Court affirmed.
US Supreme also affirmed.
Facts: Appellant, a Delaware corporation having its principal base of business in Missouri, engaged in the
manufacturing and sale of shoes. It maintains places of business in several states. Appellant has no office
of business in Washington and makes no contracts either for sale or purchase of merchandise there. At the
time of the case, it had no business or presence in Wash. However, from 1937-40, appellant employed 11
to 13 salesmen in the state under direct supervision of managers located in St Louis. These salesmen
resided in Wash., their principal activities were confined to that state; and they were compensated upon
commissions on their sales. Under Wash. statutes, employers are required to make contributions to a an
unemployment compensation fund. Under the statutes, a state Commissioner is authorized to issue and
order and notice of assessment of delinquent contribution upon personal service or, if employer cannot be
found in the state, by mailing. Notice of assessment was served on an (former?) employee of Plaintiff in
Wash. and a copy mailed to appellant address in St. Louis.
Issue: (1)Whether, within the limitations of the due process clause of the 14th amendment, a nonresident
corporation (Delaware) has by its activities (doing business) in another state (Wash) rendered itself
amenable to proceedings in the courts of that state. Also (2) whether the state can extract unpaid
contributions to the state’s unemployment fund consistently with the due process of the 14th amendment.
Holding: To the extent that a corporation exercises the privilege of conducting activities within the state,
it enjoys the benefits of protection of the laws of that state. The exercise of that privilege may give rise to
obligations; and so far as those obligations arise out of or are connected with the activities within the
state, a procedure which requires the corporation to respond to a suit brought to enforce them can, in most
instances, hardly be said to be undue.
Reasoning: Historically the jurisdiction of courts to render judgment in personam is grounded on their de
facto power of the def’s person. Hence presence within the territorial jurisdiction was a prerequisite to a
rendition of judgment personally binding. (Pennoyer). But (…) due process requires only that in order to
subject a def to the jur. in personam, he have certain minimum contacts with the territory of the forum
such that the maintenance of suit does not offend “traditional notions of fair play and substantial
justice.” (…) The criteria by which we mark the boundary between activities that justify the subjection of
a corporation to the forum state’s jurisdiction cannot be simply mechanical or quantitative (…). Whether
due process is satisfied must depend rather upon the quality and nature of the activity in relation to the
fair and orderly administration of the law which it was the purpose of due process to insure.
The activities carried on in behalf of appellant in the state were neither irregular nor casual, but systematic
and continuous throughout the years; they resulted in a large volume of interstate business in the course of
which appellant received the benefit and protection of the laws of the state, including the rights to resort
to its courts. The obligation that is here sues upon arose out of those very activities (…). Thus we cannot
say that the maintenance of the present suit in Wash. involves an unreasonable or undue procedure.
Notes/Dissents: (Justice Black) The constitution leaves to each state, without ifs or buts, a power to tax
and to open the doors of its courts to its citizens and corporations whose agents do business in those
states. I think it a judicial deprivation to condition that power upon this Court’s notion of “fair play;” nor
can I stretch the meaning of due process so far as to authorize this court to deprive a State of the right to
afford judicial protection to its citizens on the grounds that it would be “more convenient” for the corp. to
be sud elsewhere. (…) no reason to read the due process clause so as to restrict a State’s power to tax and
sue those whose activities affect persons and businesses within the state, provided proper service can be
had.