326 U.S. 310 (1945)
International Shoe Co. is a Delaware corporation with its principal place of business in St. Louis, Missouri.1 The company manufactured and sold shoes and other footwear.2 During the years 1937 to 1940 the company employed eleven to thirteen salesmen who resided in Washington and whose principal activities were confined to that state.3 These salesmen were compensated by commissions totaling more than $31,000 each year.4
The salesmen displayed samples to prospective purchasers.5 On occasion they rented permanent sample rooms in business buildings or rented rooms in hotels or business buildings temporarily for that purpose.6 The cost of such rentals was reimbursed by the company.7 The authority of the salesmen is limited to exhibiting their samples and soliciting orders from prospective buyers, at prices and on terms fixed by appellant.8 The salesmen transmit the orders to appellant's office in St. Louis for acceptance or rejection.9 When accepted the merchandise for filling the orders is shipped f. o. b. from points outside Washington to the purchasers within the state.10
Washington state maintained a comprehensive unemployment compensation scheme.11 The costs of the scheme are defrayed by contributions required to be made by employers to a state unemployment compensation fund.12 The contributions are a specified percentage of the wages payable annually by each employer for his employees' services in the state.13 The assessment and collection of the contributions and the fund are administered by appellees.14
For the years in question notice of assessment for delinquent contributions was personally served upon a sales solicitor employed by appellant in the State of Washington.15 A copy of the notice was mailed by registered mail to appellant at its address in St. Louis, Missouri.16 Appellant appeared specially before the office of unemployment and moved to set aside the order and notice of assessment on the ground that the service upon appellant's salesman was not proper service upon appellant.17 Appellant also asserted that it was not doing business within the state and that it is not an employer and does not furnish employment within the meaning of the statute.18
The motion was heard on evidence and a stipulation of facts by the appeal tribunal which denied the motion and ruled that appellee Commissioner was entitled to recover the unpaid contributions.19 That action was affirmed by the Commissioner.20 Both the Superior Court and the Supreme Court affirmed.21 The company appealed to the United States Supreme Court under section 237(a) of the Judicial Code.22 The facts found by the appeal tribunal and accepted by the state courts showed that the company had no office in Washington and makes no contracts either for sale or purchase of merchandise there.23 It maintains no stock of merchandise in that state and makes there no deliveries of goods in intrastate commerce.24 All the merchandise shipped into Washington is invoiced at the place of shipment from which collections are made.25 No salesman has authority to enter into contracts or to make collections.26
Whether, within the limitations of the due process clause of the Fourteenth Amendment, a Delaware corporation has by its activities in the State of Washington rendered itself amenable to proceedings in the courts of that state to recover unpaid contributions to the state unemployment compensation fund?27
Due process requires that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have minimum contacts with it such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.28 The criteria by which courts mark the boundary line between those activities which justify the subjection of a corporation to suit, and those which do not, cannot be simply mechanical or quantitative.29 The test depends upon the quality and nature of the activity in relation to the fair and orderly administration of the laws which it was the purpose of the due process clause to insure.30
Yes. The company's activities carried on in behalf of appellant in the State of Washington were neither irregular nor casual.31 They were systematic and continuous throughout the years in question.32 The company employed eleven to thirteen salesmen who resided in Washington.33 Their principal activities were confined to that state.34 They were compensated by commissions based upon the amount of their sales.35 The commissions for each year totaled more than $31,000.36 The salesmen displayed samples to prospective purchasers. On occasion they rented permanent sample rooms in business buildings or rented rooms in hotels or business buildings temporarily for that purpose. The cost of such rentals was reimbursed by appellant.37
The authority of the salesmen is limited to exhibiting their samples and soliciting orders from prospective buyers, at prices and on terms fixed by appellant. The salesmen transmit the orders to appellant's office in St. Louis for acceptance or rejection. When accepted the merchandise for filling the orders is shipped f. o. b. from points outside Washington to the purchasers within the state. All the merchandise shipped into Washington is invoiced at the place of shipment from which collections are made. No salesman has authority to enter into contracts or to make collections. The company has no office in Washington and makes no contracts either for sale or purchase of merchandise there.38 It maintains no stock of merchandise in that state and makes there no deliveries of goods in intrastate commerce.
Washington operated a comprehensive unemployment compensation program funded by employer contributions calculated as a percentage of wages paid for services performed in the state.39 The state Commissioner issued an order assessing delinquent contributions for the years in question.40 Service was effected by personally delivering notice to one of the company's sales solicitors in Washington while also sending a registered mail copy to the company's St. Louis address.41 The company appeared specially before the office of unemployment and moved to set aside the order and notice of assessment on the ground that the service upon appellant's salesman was not proper service upon appellant.42 Appellant asserted that it was not a corporation of the State of Washington and was not doing business within the state.43 After considering evidence and a stipulation of facts the appeal tribunal denied the motion and ruled that appellee Commissioner was entitled to recover the unpaid contributions.44 That action was affirmed by the Commissioner. Both the Superior Court and the Supreme Court affirmed.
The company's activities were systematic and continuous throughout the years in question rather than irregular or casual.45 The company employed eleven to thirteen resident salesmen. Their principal activities were confined to Washington. They generated more than thirty-one thousand dollars in annual commissions. The reimbursement of sample-room rentals produced a substantial volume of merchandise regularly shipped into the state.46 These operations gave rise to the very obligations sued upon because the tax is measured by wages paid for the salesmen's services in Washington.47 The company therefore enjoyed the benefits and protection of Washington law while incurring obligations connected with its activities there.48 It is reasonable and just according to traditional notions of fair play and substantial justice to permit the state to enforce the obligations which appellant has incurred there.49
The Delaware corporation has by its activities in Washington rendered itself amenable to proceedings in that state's courts to recover the unpaid contributions.50
Related opinions on this issue
Justice Black delivered a separate opinion arguing that the appeal should be dismissed as unsubstantial.51 He observed that Congress pursuant to its constitutional power to regulate commerce has expressly provided that a State shall not be prohibited from levying the kind of unemployment compensation tax here challenged.52 He noted that the Court has twice decided that this Congressional consent is an adequate answer to a claim that imposition of the tax violates the Commerce Clause.53
Black maintained that the due process claim is equally without substance. It is unthinkable that the vague due process clause was ever intended to prohibit a State from regulating or taxing a business carried on within its boundaries simply because this is done by agents of a corporation organized and having its headquarters elsewhere.54 He criticized the majority for introducing vague constitutional criteria of fair play and substantial justice that would curtail the exercise of state powers to an extent not justified by the Constitution.55
Black asserted that the Federal Constitution leaves to each State without any ifs or buts a power to tax and to open the doors of its courts for its citizens to sue corporations whose agents do business in those States.56 He believed that it is a judicial deprivation to condition the exercise of that power upon the Court's notion of fair play.57
Whether the state can exact those contributions consistently with the due process clause of the Fourteenth Amendment?58
To the extent that a corporation exercises the privilege of conducting activities within a state it enjoys the benefits and protection of the laws of that state.59 The exercise of that privilege may give rise to obligations.60 So far as those obligations arise out of or are connected with the activities within the state, a procedure which requires the corporation to respond to a suit brought to enforce them can hardly be said to be undue. The state has constitutional power to lay the tax and to subject the corporation to a suit to recover it.61
Yes. The obligation which is here sued upon arose out of those very activities.62 The Supreme Court of Washington construing and applying the statute has held that it imposes a tax on the privilege of employing appellant's salesmen within the state measured by a percentage of the wages here the commissions payable to the salesmen.63 Appellant having rendered itself amenable to suit upon obligations arising out of the activities of its salesmen in Washington the state may maintain the present suit in personam to collect the tax laid upon the exercise of the privilege of employing appellant's salesmen within the state.64
Washington has made one of those activities which taken together establish appellant's presence there for purposes of suit the taxable event by which the state brings appellant within the reach of its taxing power.65 The state thus has constitutional power to lay the tax and to subject appellant to a suit to recover it.66
The state can exact those contributions consistently with the due process clause of the Fourteenth Amendment.67
Related opinions on this issue
Justice Black delivered a separate opinion arguing that the appeal should be dismissed as unsubstantial. He observed that Congress pursuant to its constitutional power to regulate commerce has expressly provided that a State shall not be prohibited from levying the kind of unemployment compensation tax here challenged. He noted that the Court has twice decided that this Congressional consent is an adequate answer to a claim that imposition of the tax violates the Commerce Clause.
Black maintained that the due process claim is equally without substance. It is unthinkable that the vague due process clause was ever intended to prohibit a State from regulating or taxing a business carried on within its boundaries simply because this is done by agents of a corporation organized and having its headquarters elsewhere. He criticized the majority for introducing vague constitutional criteria of fair play and substantial justice that would curtail the exercise of state powers to an extent not justified by the Constitution.
Black asserted that the Federal Constitution leaves to each State without any ifs or buts a power to tax and to open the doors of its courts for its citizens to sue corporations whose agents do business in those States. He believed that it is a judicial deprivation to condition the exercise of that power upon the Court's notion of fair play.
Whether the challenged statutes as applied infringe the commerce clause?68
Congress has provided that no person required under a State law to make payments to an unemployment fund shall be relieved from compliance on the ground that he is engaged in interstate or foreign commerce.69 It is no longer debatable that Congress in the exercise of the commerce power may authorize the states in specified ways to regulate interstate commerce or impose burdens upon it.70
No. The federal statute expressly authorizes the states to require payments to unemployment funds without regard to whether the payer is engaged in interstate commerce.71 Appellant's argument renewed here that the statute imposes an unconstitutional burden on interstate commerce need not detain us.72 Because Congress has consented to the state tax the commerce clause challenge presents no substantial question.73
The challenged statutes as applied do not infringe the commerce clause.74