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Supreme Court of the United States - 326 U.S. 310, 66 S. Ct. 154
Tags: Civil Procedure, Personal Jurisdiction
See also: Pennoyer v. Neff
In 1945, the U.S. Supreme Court ruled on a case between the State of Washington and International Shoe Co., a shoe company from Delaware and Missouri. Washington sued the company for not paying unemployment taxes for its salespeople working in the state. International Shoe argued that they didn't have enough connections to Washington, as they had no offices, property, or agents there. They also claimed that the way the lawsuit was served – by mail and through a salesman – was unfair and violated their rights.
The Supreme Court disagreed with the shoe company and decided that the state court had the power to hear the case. They said that a company can be under a state's legal authority if it has "minimum contacts" with the state that wouldn't go against the ideas of fair play and justice. These connections are present when the company's activities in the state are regular, connected to the lawsuit, and give them the chance to respond to it.
This case was important because it created a more flexible standard for deciding when a company can be under a state's legal authority. It also acknowledged that companies could be legally responsible in multiple states based on their business activities. This idea has influenced the development of legal rules about when state courts can hear lawsuits involving out-of-state parties, including specific and general jurisdiction, purposeful availment, stream-of-commerce theory, and long-arm statutes.
The case involves International Shoe Co. appealing the constitutionality of Washington's unemployment compensation statute, arguing that it violates the due process clause of the Fourteenth Amendment and the commerce clause. The Supreme Court of Washington held that the regular and systematic solicitation of orders by appellant's salesmen in the state constituted doing business in the state and made appellant amenable to suit in its courts. The court found that the appellant was properly served with notice of the lawsuit and was liable for contributions to the state unemployment fund. The court rejected the appellant's claim that the tax violates the Commerce Clause and that the State of Washington has denied the appellant due process of law. The criteria adopted by the Court allow State courts to enforce obligations incurred by a corporation if it is reasonable and just according to traditional conceptions of fair play and substantial justice.
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