International Shoe Co. v. State of Washington 1945
| Author | Daniel Brannen, Richard Hanes, Elizabeth Shaw |
| Pages | 984-989 |
Page 984
Appellant: International Shoe Company
Appellee: State of Washington
Appellant's Claim: That a state can not require a company based outside the state to contribute monies into the state's unemployment compensation fund simply for selling products in the state.
Chief Lawyer for Appellant: Henry C. Lowenhaupt
Chief Lawyer for Appellee: George W. Wilkins, Washington Assistant Attorney General
Justices for the Court: Hugo Lafayette Black, William O. Douglas, Felix Frankfurter, Frank Murphy, Stanley Forman Reed, Owen Josephus Roberts, Wiley Blount Rutledge, Harlan Fiske Stone
Justices Dissenting: None (Robert H. Jackson did not participate)
Date of Decision: December 3, 1945
Decision: Ruled in favor Washington by finding that International Shoe had sufficient contacts in the state to pay state unemployment tax.
Significance: The decision established an important rule to determine when an out-of-state company has enough presence in a state to come under that state's jurisdiction. The rule of "minimum contacts" established that very little contact by an out-of-state corporation was necessary to make it subject to state regulation.
Page 985
If a person living in Oregon took a road trip across country and happened to cause a minor traffic accident in Ohio, the Ohio resident involved in the mishap could sue the Oregonian under the state laws of Ohio. The out-of-state driver could not claim that, as a resident of Oregon, he was bound only by decisions made in an Oregon court. In legal terms, this kind of problem is known as personal jurisdiction. Jurisdiction refers to a geographic area over which a government or court has authority. When the term personal is added to jurisdiction, the phrase refers to the power of a court to hear cases where the court is located based on the situation or amount of contact a person, the defendant, has within the court's jurisdiction.
Now suppose that a large shoe company has several sales agents working in the state of Washington. The shoes are all made in St. Louis, Missouri. The company's headquarters are located in Delaware. The only thing the company does in Washington state is to have its salesmen sell shoes there. The question arises as to whether the shoe company must pay unemployment tax—a percentage of the salespeople's salaries—to the state of Washington.
In the 1930s, a time of high unemployment, Washington had passed a law setting up a state compensation (to make up for lost income) fund to pay unemployment wages to...
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