INTERNATIONAL SHOE Co. v. WASHINGTON

Case Reminder

Citation                International Shoe co. v. Washingtion. 326 U.S. 310 (1945)

Statement of the case   This is a civil action taking place in Federal Court. This is an appeal by
                        International Shoe Co. against the state of Washington. The state of Washington
                        brought an action against International Shoe (defendant) for not paying
                        unemployment taxes. The state seeks to collect the taxes.


Procedure               The Washington State trial court ruled for the state of Washington that the taxes
                        were collectable. International shoe appealed claiming that it’s due process rights
                        had been violated. The United States Supreme Court affirmed the trial courts
                        decision and International shoe must pay the taxes.

Statement of fact       International Shoe Co. was incorporated in Delaware and had its primary place of
                        business in St. Louis Missouri. It made and sold shoes in several states. In
                        Washington State International shoe did not have any office or manufacturing
                        sites. It also maintained no stock of merchandise and makes no deliveries of
                        goods in interstate commerce. During the years from 1937 to 1940 the years in
                        question the appellant employed eleven to thirteen salesmen under direct
                        supervision and control of sales managers located in St Lous.Sometimes the
                        salesmen rented showrooms for the samples. Orders were filled from St. Louis
                        and the merchandise was sent straight to the customer. The state of Washington
                        sent international shoe a Notice of assessment for the years in question and
                        personally served notice upon a sales employee employed by the defendant in the
                        state of Washington.

Issue                   Whether or not a corporation that was not present within the state can be subject
                        to taxation or other money exaction by a state it does business in because it has
                        certain “minimum contacts” within the state.

Decision                yes a corporation that was not present within the state can be subject to taxation
                        or other money exaction by a state it does business in because it has certain
                        minimum contacts within the state

Rule                    Due process requires only that in order to subject a defendant to a judgment in
                        peronam, if he be not present within the territory of the forum, he have certain
                        minimum contact with it such that the maintenance of the suit does not offend
                        “traditional notions of fair place and substantial justice”

Reasoning               The court states that presence in the state in this sense has never been doubted
                        when the activities of the corporation there have not only been continuous and
                        systematic but also give rise to the liabilities sued on even though no consent to
                        be sued or authorization to an agent to accept service of process has been given.
                        It has been generally recognized that the casual presence of the corporate agent
                        or even his conduct of single or isolated items of activities in a state in the
                  corporations behalf are not enough to subject it to suit on causes of action
                  unconnected with the activities there.

   Defendant conducted “systematic and continuous” business in Washington
   Large volume of interstate business for defendant created through their agents in
   Defendant and its agents received the protection of the laws of Washington
   Permanent Agents established in Washington.
   So can be held liable in Washington court
   Also, personal notice served to one of the agents was sufficient notice under Due Process
   Affirmed

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