355 U.S. 220 (1957)
Tags: Personal Jurisdiction
See also: International Shoe
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The case of "McGee v. International Life Insurance Co." involved Lulu B. McGee, who won a judgment against International Life Insurance Company in a California state court. However, the company was not served with process in California, and the Texas courts refused to enforce the judgment. The case raised important questions about jurisdiction, and the Supreme Court granted certiorari. In 1944, a California resident named Lowell Franklin purchased a life insurance policy from Empire Mutual Insurance Company, an Arizona corporation. In 1948, the respondent agreed to assume Empire Mutual's insurance obligations. Respondent mailed a reinsurance certificate to Franklin in California, offering to insure him according to the terms of the policy he held with Empire Mutual. Franklin accepted and paid premiums by mail from his California home to respondent's Texas office until his death in 1950. Franklin's mother, the beneficiary, sent proof of his death to respondent, but it refused to pay, claiming suicide. Neither Empire Mutual nor respondent had an office or agent in California, and there is no evidence that respondent solicited or conducted any insurance business in California apart from this policy.
The Due Process Clause of the Fourteenth Amendment limits state courts' power to enter binding judgments against individuals not served with process within their boundaries. However, the standard for measuring the extent of state judicial power over foreign corporations has evolved to "minimum contacts" with the forum state. With the increase in nationalization of commerce and business conducted by mail across state lines, it has become less burdensome for a party sued to defend themselves in a state where they engage in economic activity. In this case, the California court was allowed to enter a judgment against the respondent because the suit was based on a contract with a substantial connection to California, and California has a manifest interest in providing effective means of redress for its residents. The respondent had adequate notice of the suit and sufficient time to prepare its defenses and appear.
The California statute does not impair the obligation of an existing contract as it is remedial and does not affect the respondent's substantive rights or obligations under the contract. The statute only provides a forum for the petitioner to enforce their rights against the respondent. The respondent had no vested right to avoid being sued in California. The judgment is reversed and remanded for further proceedings. The Chief Justice did not participate in the case.
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