Many 1L students struggle to understand the importance of International Shoe Co. v. Washington. In this post you will learn the relevant facts, the rule you need for exam purposes, and an exam tip for nailing the analysis section on an essay exam.
Contacts in Washington
International Shoe Company was a shoe company incorporated in Delaware with its principal place of business in Missouri. In the State of Washington, International Shoe hired 13 people to solicit orders for the shoes. But the salesmen did not actually sell any shoes in Washington. Once the orders were taken, the salesmen sent the order forms back to headquarters in Missouri. It was in Missouri where the decision was made on whether or not to sell the shoes. This method insured that all shoe sales occurred in Missouri rather than in Washington. The reason for this sales method was primarily to avoid paying state corporate income taxes.
Tax Dispute
But the State of Washington was not trying to enforce its corporate income taxe. Washington was only trying to enforce its unemployment insurance tax as applied to the International Shoe salesmen. When International Shoe refused to pay the unemployment insurance tax, Washington state first issued a tax assessment. Next, Washington sued International Shoe in its own State courts to enforce the tax assessment. Because International Shoe’s office was located in Missouri, the State of Washington sent notice of the lawsuit to those offices by registered mail. International Shoe claimed that since they did not have a permanent presence in Washington, the notice sent by mail to Missouri violated the Due Process clause of the United States Constitution.
Due Process
And finally, this brings us to the primary issue in the case: Does the Due Process clause allow a State court to exercise in personam jurisdiction over an out-of-state defendant who does not have a permanent presence in the State? The Supreme Court explained that historically, in personam jurisdiction required the defendant’s physical presence in the State. This precedent is garnered from Pennoyer v. Neff, which is discussed in this video: Sex and the Senator in Pennoyer v. Neff.
Rule in International Shoe Co. v. Washington
Though the Court could easily have found that International Shoe was physically present in Washington State, the Court chose to articulate the following new rule: To exercise in personam jurisdiction over an out-of-state defendant, the Due Process clause requires the defendant to have minimum contacts with the forum State such that the suit does not offend traditional notions of fair play and substantial justice.
Applied to the facts in this case, the Court noted that 13 salesmen soliciting orders for a substantial number of shoes meets the minimum contacts test.
Study Tips
One challenge in preparing for a personal jurisdiction exam is all the different tests you need to learn. This includes more than just the minimum contacts test in International Shoe Co. v. Washington. You will need to learn the tests in World Wide Volkswagen, Asahi, and several other cases. Early in the semester, use flashcards to help you learn the rules, that way you are prepared for exam day.
Exam Tip
On a final exam, you need to examine every contact that the out-of-state defendant has with the State. Given that companies can do business over the Internet today without ever sending a human into another State, the minimum contacts test is very important. For a brief overview of how technology comes into play when establishing minimum contacts, see this article on the Principles of Jurisdiction.
Your goal on an exam is to persuade the grader that there are or are not minimum contacts. Usually, your professor will give you a set of facts that can go either way. So don’t spend a lot of time looking for the “right” answer. The only right answer is one that identifies the issue, correctly states the rule of law, and then provides a well-thought out reason for whatever conclusion you happen to reach. For help on developing strong analysis, watch my episode called Three Steps to Better Analysis.
