International Shoe Co. v. Washington

Brief Fact Summary.

International Shoe Co. was sued in Washington state for recovery of unpaid unemployment contributions to the state unemployment compensation fund, based on the state’s Unemployment Compensation Act. Personal service was made on a company salesman employed by International Shoe Co. in Washington state, and by mailing a copy of the notice to the company’s Missouri address. International Shoe Co. objected to service upon it, claiming that jurisdiction over it was lacking because its activities in Washington were not sufficient to constitute its presence in the state. The administrative authority (state office of unemployment), the lower state court, and the Supreme Court of Washington affirmed. International Shoe appealed, claiming infringement of its rights under the due process clause of the Fourteenth Amendment and the commerce clause.

Synopsis of Rule of Law.

To the extent that a corporation enjoys the benefits of conducting activities within a state, and the protections of its laws, it may also incur obligations; to the extent its obligations arise out of activities in the state, it may be subject to suit in the state to enforce those obligations.

Facts.

International Shoe Co. was sued in Washington state for recovery of unpaid unemployment contributions to the state unemployment compensation fund, based on provisions of the state’s Unemployment Compensation Act. Personal service was made on a company salesman employed by International Shoe Co. in Washington state, and by mailing a copy of the notice to the company’s principal place of business, in Missouri. International Shoe Co. objected to service upon it, claiming that jurisdiction over it was lacking because its activities in Washington were not sufficient to constitute its presence in the state. International Shoe had no office in Washington, made no contracts there, had no inventory there, and did not deliver goods in intrastate commerce. International Shoe did employ 11 to 13 salesman who lived and worked in Washington state. The administrative authority (state office of unemployment) upheld jurisdiction; the lower state court and the Supreme Court of Washington affirmed. International Shoe appealed, claiming that its due process rights under the Fourteenth Amendment and the commerce clause were infringed.

Issue.

Did due process allow for the State of Washington to exercise jurisdiction over International Shoe Co., based on its activities in the state?

Held.

Yes. International Shoe Co.’s activities and operations in Washington established sufficient contacts or ties with the state to make it reasonable and just to allow the state to enforce the obligations incurred there.

Concurrence.

Justice Black

Justice Black’s opinion expressed concern over curtailment of the states’ powers to an extent not justified by the Constitution. He acknowledged that the state’s power was upheld in this case, but expressed concern over the increasing scope being given the Fourteenth Amendment as it impacted the states’ constitutional rights.

Discussion.

Due process requires only that in order to subject a defendant to the court’s jurisdiction, he have minimum contacts such that maintaining the lawsuit against him does not offend “traditional notions of fair play and substantial justice.” The Court explained that  that this rule was appropriate for the time, given that personal service of a summons or other forms of notice were common (as opposed to historically needing “presence” in the state).