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Personal Jurisdiction

International Shoe Co. v. Washington


326 U.S. 310 (1945)
Procedure:
An employee of the appellant in the state of Washington was personally served
with a notice of assessment for the years in question, and a copy of the notice
was mailed by registered mail to appellants address in St. Louis, Missouri.
Appellant appeared before the office of unemployment and moved to set aside
the order and notice of assessment by special appearance, on the grounds that
the service upon appellants employee was not proper service upon appellant;
that appellant was not a corporation of the state of Washington and wasnt doing
business within the state; that it had no agent within the state upon whom
service could be made; and that appellant is not an employer and doesnt furnish
employment within the meaning of the statute.
Facts:
Appellant allegedly violated Washingtons Unemployment Compensation Act,
which set up a comprehensive scheme of unemployment compensation, the costs
of which are defrayed by contributions required to be made by employers to a
state unemployment compensation fund. The contributions are a specified
percentage of the wages payable annually by each employer for his employees
services within the state. Appellant is a Delaware corporation with its principal
place of business in St. Louis, Missouri. Appellants corporation maintains places
of business in several states excluding Washington. Appellants corporation
manufactures its product in several states and the merchandise is distributed
through several sales units or branches located outside the state of Washington.
Appellant doesnt have an office in Washington and makes no contracts for sale or
purchase of merchandise there. Appellant maintains no stock of merchandise in
that state and makes no deliveries of goods in interstate commerce. During the
years in question appellant employed eleven to thirteen salesmen under direct
supervision and control of sales managers located in St. Louis. These salesmen
resided in Washington; their principal activities were confined to that state; and
they were compensated by commissions based upon the amount of their sales.
The authority of the salesmen was limited to exhibiting their samples and
soliciting orders from perspective buyers, at prices and on terms fixed by
appellant. The orders were sent to the appellants office in St. Louis for
acceptance or rejection, and when accepted the merchandise for filling the orders
was shipped f.o.b. from areas outside Washington to purchasers within the state.
No salesman had authority to enter into contracts or to make collections.
Appellant claimed that the activities within the state werent sufficient to confer
jurisdiction and that since he wasnt present within the state, it is a denial of due
process to subject appellant to taxation or other money exaction. Thus, denying
the power of the state to lay taxation or to subject appellant to a suit for the
collection of taxation.
Issue:
By its activities within the state, was appellant subject to in personam
jurisdiction?
Law:
Due process requires that in order to subject a nonresident defendant to in
personam jurisdiction, there must be certain minimum contacts with the forum
such that the maintenance of the suit does not offend traditional notions of fair
play and substantial justice.

Personal Jurisdiction

Whether due process has been satisfied depends upon the quality and nature of
the activity in relation to the fair and orderly administration of the laws, which it
was the purpose of the due process clause to insure.
To subject a nonresident defendant to in personam jurisdiction, there must be
certain minimum contacts with the forum such that the maintenance of the suit
does not offend traditional notions of fair play and substantial justice. Reciprocity
is the basis of the minimum contacts standard.
o A state cannot make a binding judgment in personam against an individual
or corporate defendant with, which the state has no contacts, ties, or
relations.

Reasoning:
Appellant rendered itself amenable to suit upon obligations arising out of the
activities of its salesmen in Washington, and the state is entitled to present suit in
personam to collect the tax laid upon the exercise of the privilege of employing
appellants salesmen within the state.
The terms presence and present are used to symbolize the activities of the
corporations agent within the state, which courts will deem to be sufficient to
satisfy the demands of due process.
The court introduced the concept of specific jurisdiction stating that appellants
presence within the state was not only continuous and systematic but also give
rise to the liabilities sued upon.
The court introduced the concept of general jurisdiction, stating that continuous
corporate activities in a state can be so substantial and of such a nature as to
justify jurisdiction where a suit arises from dealings entirely distinct from the
activities.
Also, jurisdiction exists when corporate activities rise to the level sufficient to
satisfy due process. The nature and quality and circumstances of the corporation
may be deemed sufficient to render the corporation liable to suit.
It is also relevant to note the approx. estimate of the inconveniences, which would
result to the corporation from a trial away from its home or principle place of
business.
The court also noted that by a corporations taking advantage of the privileges of
conducting activities within a state, it is not unreasonable for the state to impose
a reciprocity clause for the corporation taking advantage of those privileges, thus
obligated the corporation to appear.
The more closely related the defendants contacts are to the claim, the fewer
contacts are required to comport with substantial justice and fair play.
Holding:
Affirmed.