International Shoe was a Delaware based corporation with a main office in St. Louis, MO. It had no offices, made no contracts for sale, and did not keep any warehouses of goods in WA.
International Shoe did have several salesmen employees who lived and sold merchandise for the company in WA.
The state of WA sued Shoe in WA court for unpaid contributions to the state's unemployment fund.
Notice was served to a salesman for the company in WA and via registered mail to the corporation's headquarters in MO.
Procedural History:
Lower court found for WA.
Shoe appealed and lost.
Shoe appealed to SCOTUS and lost.
Issues:
Can a state impose jurisdiction on a corporation not in the borders of the state?
Can a corporation's activities in a state make it subject to the jurisdiction of that state?
Holding/Rule:
If a party has "minimum contacts" in a state, that corporation is subject to the jurisdiction of that state as long as it does not offend "traditional notions of fair play and substantial justice".
Test for "minimum contacts" jurisdiction:
Does the defendant come within the terms of the applicable long-arm statute?
Does the defendant have "minimum contacts" with the forum state such that the assertion of jurisdiction would not violate the Due Process Clause?
Has the defendant "purposely availed" itself of the privilege of conducting activities in the forum state, thereby invoking the benefits and protections of the state's laws?
Does the lawsuit arise out of or related to the defendant's purposeful contacts with the forum or, if it does not, are the defendant's forum contacts so extensive that no such relationship is necessary?
Would the exercise of jurisdiction be unfair and unreasonable, taking into account the interests of the defendant, the forum state, the plaintiff, and other states that may have an interest in the matter?
Reasoning:
The corporation enjoyed the protection and benefits from its activities in a state; thus, it must be subject to the jurisdiction of that state.
"To the extent that a corporation exercises the privilege of conducting activities within a state, it enjoys the benefits and 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. "
Dissent:
Black disagreed with the vagueness of the "fair play" clause.
Notes:
Minimum contacts is not a quantitative measure, but qualitative in nature.
Contact quality can be measured in terms of its relation to the subject of the lawsuit.
