International Shoe Co. v. State of Washington

The International Shoe decision has been used for the past 50 years to help establish the circumstances under which a person or corporation comes under the jurisdiction of a state that is not a state of primary residence.

If a person who lived in the state of Colorado was taking a road trip through the Midwest and was the cause of a minor traffic accident in Minnesota, the Minnesota resident involved in the accident could sue the Colorado driver under the laws of Minnesota. The out-of-state driver could not claim that, as a Colorado resident, he was only bound by decisions made in Colorado state court. In legal terms, this kind of problem is known as one of personal jurisdiction. Because the Colorado driver committed an act within Minnesota that led to the suit, he is bound by Minnesota state law.

Now suppose that a large shoe company has several sales agents working in Washington state. The shoes that the company sells are all made in St. Louis, Missouri. The company's legal headquarters are in Delaware. The only thing the company does in Washington is to have its salespeople sell shoes there. The salespeople live and work in Washington, but the corporation is not located there. The question is raised as to whether the company is liable to pay unemployment tax--a percentage of the salespeople's salaries--to the state of Washington.

This was the problem faced by the Supreme Court in the case of International Shoe Co. v. State of Washington The decision made by the Court still carries enormous influence in settling problems of personal jurisdiction today.