International Shoe Co. v. Washington

Facts

International Shoe Co. was a Delaware corporation with its principal place of business in St. Louis, Missouri. It made and sold shoes and other footwear. It made its goods in several other states and distributed them through sales branches outside Washington. In Washington it had no office, made no contracts to buy or sell merchandise, kept no stock of goods and made no deliveries of goods in intrastate commerce. From 1937 to 1940, though, it employed eleven to thirteen salesmen who lived in Washington and worked mainly there. Sales managers in St. Louis supervised and controlled them. They were paid by commission, and the commissions for each year totaled more than $31,000. Each salesman carried a line of samples, one shoe of a pair, and showed them to prospective buyers, sometimes in rented sample rooms whose cost the company repaid. The salesmen could only show samples and solicit orders at prices and on terms the company set. They sent the orders to St. Louis for acceptance or rejection, and accepted orders were shipped from points outside Washington to buyers in the state. No salesman could make contracts or collect payment. Washington's unemployment compensation statute required employers to pay contributions into a state fund, figured as a percentage of wages for services in the state. Washington served a notice of assessment for unpaid contributions on one of the company's salesmen in the state and mailed a copy by registered mail to the company in St. Louis.

Issues

1. Did International Shoe's activities in Washington make it answerable, consistent with the due process clause of the Fourteenth Amendment, to a proceeding in Washington to collect unpaid contributions to the state unemployment fund?
2. Did service of the notice on a salesman in Washington, plus registered mail to the company's St. Louis office, give the company sufficient notice of the suit?
3. Could Washington exact the unemployment contributions from the company consistently with the due process clause?

Holding

Yes. The company's salesmen carried on systematic and continuous activities in Washington that produced a large volume of business and gave rise to the very obligation sued on. Those contacts made it reasonable and just for Washington to make the company answer there. Service on a salesman in the state plus registered mail to St. Louis was sufficient notice, and Washington had power to lay the tax and sue to collect it.