CONFLICT OF LAWS

ATTY. LEO DE CASTRO

PAMANTASAN NG LUNGSOD NG MAYNILA
JD SEM 2, SY 2013-2014

Sources of Conflicts:
Family Code: Articles 10. 21, 26, 35, 36, 37, 38, 80, 96, 184, and 187
Art. 10. Marriages between Filipino citizens abroad may be solemnized by a consul-general, consul or vice-consul of
the Republic of the Philippines. The issuance of the marriage license and the duties of the local civil registrar and of
the solemnizing officer with regard to the celebration of marriage shall be performed by said consular official. (75a)
Art. 21. When either or both of the contracting parties are citizens of a foreign country, it shall be necessary for them
before a marriage license can be obtained, to submit a certificate of legal capacity to contract marriage, issued by
their respective diplomatic or consular officials.
Stateless persons or refugees from other countries shall, in lieu of the certificate of legal capacity herein required,
submit an affidavit stating the circumstances showing such capacity to contract marriage. (66a)
Art. 26. All marriages solemnized outside the Philippines, in accordance with the laws in force in the country where
they were solemnized, and valid there as such, shall also be valid in this country, except those prohibited under
Articles 35 (1), (4), (5) and (6), 3637 and 38. (17a)
Where a marriage between a Filipino citizen and a foreigner is validly celebrated and a divorce is thereafter validly
obtained abroad by the alien spouse capacitating him or her to remarry, the Filipino spouse shall have capacity to
remarry under Philippine law. (As amended by Executive Order 227)
Chapter 3. Void and Voidable Marriages
Art. 35. The following marriages shall be void from the beginning:
(1) Those contracted by any party below eighteen years of age even with the consent of parents or guardians;
(2) Those solemnized by any person not legally authorized to perform marriages unless such marriages were
contracted with either or both parties believing in good faith that the solemnizing officer had the legal authority to do
so;
(3) Those solemnized without license, except those covered the preceding Chapter;
(4) Those bigamous or polygamous marriages not failing under Article 41;
(5) Those contracted through mistake of one contracting party as to the identity of the other; and
(6) Those subsequent marriages that are void under Article 53.
Art. 36. A marriage contracted by any party who, at the time of the celebration, was psychologically incapacitated to
comply with the essential marital obligations of marriage, shall likewise be void even if such incapacity becomes
manifest only after its solemnization. (As amended by Executive Order 227)
Art. 37. Marriages between the following are incestuous and void from the beginning, whether relationship between
the parties be legitimate or illegitimate:
(1) Between ascendants and descendants of any degree; and
(2) Between brothers and sisters, whether of the full or half blood. (81a)
Art. 38. The following marriages shall be void from the beginning for reasons of public policy:
(1) Between collateral blood relatives whether legitimate or illegitimate, up to the fourth civil degree;
(2) Between step-parents and step-children;
(3) Between parents-in-law and children-in-law;
(4) Between the adopting parent and the adopted child;
(5) Between the surviving spouse of the adopting parent and the adopted child;
(6) Between the surviving spouse of the adopted child and the adopter;
(7) Between an adopted child and a legitimate child of the adopter;
(8) Between adopted children of the same adopter; and
(9) Between parties where one, with the intention to marry the other, killed that other person's spouse, or his or her
own spouse. (82)
Art. 80. In the absence of a contrary stipulation in a marriage settlement, the property relations of the spouses shall
be governed by Philippine laws, regardless of the place of the celebration of the marriage and their residence.
This rule shall not apply:
(1) Where both spouses are aliens;
(2) With respect to the extrinsic validity of contracts affecting property not situated in the Philippines and executed in
the country where the property is located; and

(3) With respect to the extrinsic validity of contracts entered into in the Philippines but affecting property situated in a
foreign country whose laws require different formalities for its extrinsic validity. (124a)
Section 4. Ownership, Administrative,
Enjoyment and Disposition of the Community Property
Art. 96. The administration and enjoyment of the community property shall belong to both spouses jointly. In case of
disagreement, the husband's decision shall prevail, subject to recourse to the court by the wife for proper remedy,
which must be availed of within five years from the date of the contract implementing such decision.
In the event that one spouse is incapacitated or otherwise unable to participate in the administration of the common
properties, the other spouse may assume sole powers of administration. These powers do not include disposition or
encumbrance without authority of the court or the written consent of the other spouse. In the absence of such
authority or consent, the disposition or encumbrance shall be void. However, the transaction shall be construed as a
continuing offer on the part of the consenting spouse and the third person, and may be perfected as a binding
contract upon the acceptance by the other spouse or authorization by the court before the offer is withdrawn by
either or both offerors. (206a)
Art. 184. The following persons may not adopt:
(1) The guardian with respect to the ward prior to the approval of the final accounts rendered upon the termination of
their guardianship relation;
(2) Any person who has been convicted of a crime involving moral turpitude;
(3) An alien, except:
(a) A former Filipino citizen who seeks to adopt a relative by consanguinity;
(b) One who seeks to adopt the legitimate child of his or her Filipino spouse; or
(c) One who is married to a Filipino citizen and seeks to adopt jointly with his or her spouse a relative by
consanguinity of the latter.
Aliens not included in the foregoing exceptions may adopt Filipino children in accordance with the rules on intercountry adoptions as may be provided by law. (28a, E. O. 91 and PD 603)
Art. 187. The following may not be adopted:
(1) A person of legal age, unless he or she is a child by nature of the adopter or his or her spouse, or, prior to the
adoption, said person has been consistently considered and treated by the adopter as his or her own child during
minority.
(2) An alien with whose government the Republic of the Philippines has no diplomatic relations; and
(3) A person who has already been adopted unless such adoption has been previously revoked or rescinded. (30a, E.
O. 91 and PD 603)

CIVIL CODE, Arts. 14-17, 815, 816, 818, 819, 829, 1039, 1319, and 1753
Article 14. Penal laws and those of public security and safety shall be obligatory upon all who live or sojourn in the
Philippine territory, subject to the principles of public international law and to treaty stipulations. (8a)
Article 15. Laws relating to family rights and duties, or to the status, condition and legal capacity of persons are
binding upon citizens of the Philippines, even though living abroad. (9a)
Article 16. Real property as well as personal property is subject to the law of the country where it is stipulated.
However, intestate and testamentary successions, both with respect to the order of succession and to the amount of
successional rights and to the intrinsic validity of testamentary provisions, shall be regulated by the national law of the
person whose succession is under consideration, whatever may be the nature of the property and regardless of the
country wherein said property may be found. (10a)
Article 17. The forms and solemnities of contracts, wills, and other public instruments shall be governed by the laws
of the country in which they are executed.
Article 815. When a Filipino is in a foreign country, he is authorized to make a will in any of the forms established by
the law of the country in which he may be. Such will may be probated in the Philippines. (n)
Article 816. The will of an alien who is abroad produces effect in the Philippines if made with the formalities
prescribed by the law of the place in which he resides, or according to the formalities observed in his country, or in
conformity with those which this Code prescribes. (n)
Article 818. Two or more persons cannot make a will jointly, or in the same instrument, either for their reciprocal
benefit or for the benefit of a third person. (669)
Article 819. Wills, prohibited by the preceding article, executed by Filipinos in a foreign country shall not be valid in
the Philippines, even though authorized by the laws of the country where they may have been executed. (733a)
Article 829. A revocation done outside the Philippines, by a person who does not have his domicile in this country, is
valid when it is done according to the law of the place where the will was made, or according to the law of the place
in which the testator had his domicile at the time; and if the revocation takes place in this country, when it is in
accordance with the provisions of this Code. (n)
Article 1039. Capacity to succeed is governed by the law of the nation of the decedent. (n)
SECTION 1
Consent
Article 1319. Consent is manifested by the meeting of the offer and the acceptance upon the thing and the cause
which are to constitute the contract. The offer must be certain and the acceptance absolute. A qualified acceptance
constitutes a counter-offer.
Acceptance made by letter or telegram does not bind the offerer except from the time it came to his knowledge. The
contract, in such a case, is presumed to have been entered into in the place where the offer was made. (1262a)
Article 1753. The law of the country to which the goods are to be transported shall govern the liability of the common
carrier for their loss, destruction or deterioration.

PENAL CODE, Article 2

Article 2. Application of its provisions. - Except as provided in the treaties and laws of preferential application, the
provisions of this Code shall be enforced not only within the Philippine Archipelago, including its atmosphere, its
interior waters and maritime zone, but also outside of its jurisdiction, against those who:
1. Should commit an offense while on a Philippine ship or airship
2. Should forge or counterfeit any coin or currency note of the Philippine Islands or obligations and securities issued
by the Government of the Philippine Islands;
3. Should be liable for acts connected with the introduction into these islands of the obligations and securities
mentioned in the presiding number;
4. While being public officers or employees, should commit an offense in the exercise of their functions; or
5. Should commit any of the crimes against national security and the law of nations, defined in Title One of Book Two
of this Code.

CORPORATION CODE, Section 133 Doing Business Without License

Section 133. Doing business without a license. No foreign corporation transacting business in the Philippines without
a license, or its successors or assigns, shall be permitted to maintain or intervene in any action, suit or proceeding in
any court or administrative agency of the Philippines; but such corporation may be sued or proceeded against before
Philippine courts or administrative tribunals on any valid cause of action recognized under Philippine laws. (69a)

CONSTITUTION, Art. IV and Art. V, Section 1

ARTICLE IV
CITIZENSHIP
Section 1. The following are citizens of the Philippines:
Those who are citizens of the Philippines at the time of the adoption of this Constitution;
Those whose fathers or mothers are citizens of the Philippines;
Those born before January 17, 1973, of Filipino mothers, who elect Philippine Citizenship upon reaching the age of
majority; and
Those who are naturalized in the accordance with law.
Section 2. Natural-born citizens are those who are citizens of the Philippines from birth without having to perform any
act to acquire or perfect their Philippine citizenship. Those who elect Philippine citizenship in accordance with
paragraph (3), Section 1 hereof shall be deemed natural-born citizens.
Section 3. Philippine citizenship may be lost or reacquired in the manner provided by law.
Section 4. Citizens of the Philippines who marry aliens shall retain their citizenship, unless by their act or omission
they are deemed, under the law to have renounced it.
Section 5. Dual allegiance of citizens is inimical to the national interest and shall be dealt with by law.
ARTICLE V
SUFFRAGE
Section 1. Suffrage may be exercised by all citizens of the Philippines, not otherwise disqualified by law, who are at
least eighteen years of age, and who shall have resided in the Philippines for at least one year and in the place
wherein they propose to vote, for at least six months immediately preceding the election. No literacy, property, or
other substantive requirement shall be imposed on the exercise of suffrage.

RULES OF COURT, Rule 14 and 39, Section 48, Rule 131, Section 3 (n), 132, Section 25
RULE 14
Summons
Section 1.
Clerk to issue summons. Upon the filing of the complaint and the payment of the requisite legal
fees, the clerk of court shall forthwith issue the corresponding summons to the defendants. (1a)
Section 2.
Contents. The summons shall be directed to the defendant, signed by the clerk of court under seal
and contain (a) the name of the court and the names of the parties to the action; (b) a direction that the defendant
answer within the time fixed by these Rules; (c) a notice that unless the defendant so answers plaintiff will take
judgment by default and may be granted the relief applied for.
A copy of the complaint and order for appointment of guardian ad litem if any, shall be attached to the original and
each copy of the summons. (3a)
Section 3.
By whom served. The summons may be served by the sheriff, his deputy, or other proper court
officer, or for justifiable reasons by any suitable person authorized by the court issuing the summons. (5a)
Section 4.
Return. When the service has been completed, the server shall, within five (5) days therefrom,
serve a copy of the return, personally or by registered mail, to the plaintiff's counsel, and shall return the summons to
the clerk, who issued it, accompanied by proof of service. (6a)
Section 5.
Issuance of alias summons. If a summons is returned without being served on any or all of the
defendants, the server shall also serve a copy of the return on the plaintiff's counsel, stating the reasons for the
failure of service, within five (5) days therefrom. In such a case, or if the summons has been lost, the clerk, on
demand of the plaintiff, may issue an alias summons. (4a)
Section 6.
Service in person on defendant. Whenever practicable, the summons shall be served by handling a
copy thereof to the defendant in person, or, if he refuses to receive and sign for it, by tendering it to him. (7a)
Section 7.
Substituted service. If, for justifiable causes, the defendant cannot be served within a reasonable
time as provided in the preceding section, service may be effected (a) by leaving copies of the summons at the
defendant's residence with some person of suitable age and discretion then residing therein, or (b) by leaving the
copies at defendant's office or regular place of business with some competent person in charge thereof. (8a)
Section 8.
Service upon entity without juridical personality. When persons associated in an entity without
juridical personality are sued under the name by which they are generally or commonly known, service may be
effected upon all the defendants by serving upon any one of them, or upon the person in charge of the office or place
of business maintained in such name. But such service shall not bind individually any person whose connection with
the entity has, upon due notice, been severed before the action was brought. (9a)
Section 9.
Service upon prisoners. When the defendant is a prisoner confined in a jail or institution, service
shall be effected upon him by the officer having the management of such jail or institution who is deemed deputized
as a special sheriff for said purpose. (12a)
Section 10.
Service upon minors and incompetents. When the defendant is a minor, insane or otherwise an
incompetent, service shall be made upon him personally and on his legal guardian if he has one, or if none his
guardian ad litem whose appointment shall be applied for by the plaintiff. In the case of a minor, service may also be
made on his father or mother. (l0a, 11a)
Section 11.
Service upon domestic private juridical entity. When the defendant is a corporation, partnership or
association organized under the laws of the Philippines with a juridical personality, service may be made on the
president, managing partner, general manager, corporate secretary, treasurer, or in-house counsel. (13a)
Section 12.
Service upon foreign private juridical entities. When the defendant is a foreign private juridical
entity which has transacted business in the Philippines, service may be made on its resident agent designated in
accordance with law for that purpose, or, if there be no such agent, on the government official designated by law to
that effect, or on any of its officers or agents within the Philippines. (14a)
Section 13.
Service upon public corporations. When the defendant is the Republic of the Philippines, service
may be effected on the Solicitor General; in case of a province, city or municipality, or like public corporations, service
may be effected on its executive head, or on such other officer or officers as the law or the court may direct. (15)

Section 14.
Service upon defendant whose identity or whereabouts are unknown. In any action where the
defendant is designated as an unknown owner, or the like, or whenever his whereabouts are unknown and cannot be
ascertained by diligent inquiry, service may, by leave of court, be effected upon him by publication in a newspaper of
general circulation and in such places and for such time as the court may order. (16a)
Section 15.
Extraterritorial service. When the defendant does not reside and is not found in the Philippines,
and the action affects the personal status of the plaintiff or relates to, or the subject of which is, property within the
Philippines, in which the defendant has or claims a lien or interest, actual or contingent, or in which the relief
demanded consists, wholly or in part, in excluding the defendant from any interest therein, or the property of the
defendant has been attached within the Philippines, service may, by leave of court, be effected out of the Philippines
by personal service as under section 6; or by publication in a newspaper of general circulation in such places and for
such time as the court may order, in which case a copy of the summons and order of the court shall be sent by
registered mail to the last known address of the defendant, or in any other manner the court may deem sufficient.
Any order granting such leave shall specify a reasonable time, which shall not be less than sixty (60) days after
notice, within which the defendant must answer. (17a)
Section 16.
Residents temporarily out of the Philippines. When any action is commenced against a defendant
who ordinarily resides within the Philippines, but who is temporarily out of it, service may, by leave of court, be also
effected out of the Philippines, as under the preceding section. (18a)
Section 17.
Leave of court. Any application to the court under this Rule for leave to effect service in any
manner for which leave of court is necessary shall be made by motion in writing, supported by affidavit of the plaintiff
or some person on his behalf, setting forth the grounds for the application. (19)
Section 18.
Proof of service. The proof of service of a summons shall be made in writing by the server and
shall set forth the manner, place, and date of service; shall specify any papers which have been served with the
process and the name of the person who received the same; and shall be sworn to when made by a person other
than a sheriff or his deputy. (20)
Section 19.
Proof of service by publication. If the service has been made by publication, service may be proved
by the affidavit of the printer, his foreman or principal clerk, or of the editor, business or advertising manager, to
which affidavit a copy of the publication shall be attached and by an affidavit showing the deposit of a copy of the
summons and order for publication in the post office, postage prepaid, directed to the defendant by registered mail to
his last known address. (21)
Section 20.
Voluntary appearance. The defendant's voluntary appearance in the action shall be equivalent to
service of summons. The inclusion in a motion to dismiss of other grounds aside from lack of jurisdiction over the
person of the defendant shall not be deemed a voluntary appearance. (23a)
RULE 39
Execution, Satisfaction and Effect of Judgments
Section 48.
Effect of foreign judgments or final orders. The effect of a judgment or final order of a tribunal of a
foreign country, having jurisdiction to render the judgment or final order is as follows:
(a)
In case of a judgment or final order upon a specific thing, the judgment or final order, is conclusive upon the
title to the thing, and
(b)
In case of a judgment or final order against a person, the judgment or final order is presumptive evidence of
a right as between the parties and their successors in interest by a subsequent title.
In either case, the judgment or final order may be repelled by evidence of a want of jurisdiction, want of notice to the
party, collusion, fraud, or clear mistake of law or fact. (50a)
RULE 131
Burden of Proof and Presumptions
Section 3.
Disputable presumptions. The following presumptions are satisfactory if uncontradicted, but may
be contradicted and overcome by other evidence:

(a)

That a person is innocent of crime or wrong;

(b)

That an unlawful act was done with an unlawful intent;

(c)

That a person intends the ordinary consequences of his voluntary act;

(d)

That a person takes ordinary care of his concerns;

(e)

That evidence willfully suppressed would be adverse if produced;

(f)

That money paid by one to another was due to the latter;

(g)

That a thing delivered by one to another belonged to the latter;

(h)

That an obligation delivered up to the debtor has been paid;

(i)

That prior rents or installments had been paid when a receipt for the later one is produced;

(j)
That a person found in possession of a thing taken in the doing of a recent wrongful act is the taker and the
doer of the whole act; otherwise, that things which a person possess, or exercises acts of ownership over, are owned
by him;
(k)
That a person in possession of an order on himself for the payment of the money, or the delivery of anything,
has paid the money or delivered the thing accordingly;
(l)

That a person acting in a public office was regularly appointed or elected to it;

(m)

That official duty has been regularly performed;

(n)
That a court, or judge acting as such, whether in the Philippines or elsewhere, was acting in the lawful
exercise of jurisdiction;
(o)
That all the matters within an issue raised in a case were laid before the court and passed upon by it; and in
like manner that all matters within an issue raised in a dispute submitted for arbitration were laid before the
arbitrators and passed upon by them;
(p)

That private transactions have been fair and regular;

(q)

That the ordinary course of business has been followed;

(r)

That there was a sufficient consideration for a contract;

(s)

That a negotiable instrument was given or indorsed for a sufficient consideration;

(t)
That an endorsement of negotiable instrument was made before the instrument was overdue and at the place
where the instrument is dated;
(u)

That a writing is truly dated;

(v)

That a letter duly directed and mailed was received in the regular course of the mail;

(w)
That after an absence of seven years, it being unknown whether or not the absentee still lives, he is
considered dead for all purposes, except for those of succession.
The absentee shall not be considered dead for the purpose of opening his succession till after an absence of ten
years. If he disappeared after the age of seventy-five years, an absence of five years shall be sufficient in order that
his succession may be opened.
The following shall be considered dead for all purposes including the division of the estate among the heirs:
(1)
A person on board a vessel lost during a sea voyage, or an aircraft with is missing, who has not been heard of
for four years since the loss of the vessel or aircraft;

(2)

A member of the armed forces who has taken part in armed hostilities, and has been missing for four years;

(3)
A person who has been in danger of death under other circumstances and whose existence has not been
known for four years;
(4)
If a married person has been absent for four consecutive years, the spouse present may contract a
subsequent marriage if he or she has well-founded belief that the absent spouse is already death. In case of
disappearance, where there is a danger of death the circumstances hereinabove provided, an absence of only two
years shall be sufficient for the purpose of contracting a subsequent marriage. However, in any case, before marrying
again, the spouse present must institute a summary proceedings as provided in the Family Code and in the rules for
declaration of presumptive death of the absentee, without prejudice to the effect of reappearance of the absent
spouse.
(x)

That acquiescence resulted from a belief that the thing acquiesced in was conformable to the law or fact;

(y)

That things have happened according to the ordinary course of nature and ordinary nature habits of life;

(z)

That persons acting as copartners have entered into a contract of copartneship;

(aa)
That a man and woman deporting themselves as husband and wife have entered into a lawful contract of
marriage;
(bb)
That property acquired by a man and a woman who are capacitated to marry each other and who live
exclusively with each other as husband and wife without the benefit of marriage or under void marriage, has been
obtained by their joint efforts, work or industry.
(cc)
That in cases of cohabitation by a man and a woman who are not capacitated to marry each other and who
have acquire properly through their actual joint contribution of money, property or industry, such contributions and
their corresponding shares including joint deposits of money and evidences of credit are equal.
(dd)
That if the marriage is terminated and the mother contracted another marriage within three hundred days
after such termination of the former marriage, these rules shall govern in the absence of proof to the contrary:
(1)
A child born before one hundred eighty days after the solemnization of the subsequent marriage is considered
to have been conceived during such marriage, even though it be born within the three hundred days after the
termination of the former marriage.
(2)
A child born after one hundred eighty days following the celebration of the subsequent marriage is considered
to have been conceived during such marriage, even though it be born within the three hundred days after the
termination of the former marriage.
(ee)

That a thing once proved to exist continues as long as is usual with things of the nature;

(ff)

That the law has been obeyed;

(gg)
That a printed or published book, purporting to be printed or published by public authority, was so printed or
published;
(hh)
That a printed or published book, purporting contain reports of cases adjudged in tribunals of the country
where the book is published, contains correct reports of such cases;
(ii)
That a trustee or other person whose duty it was to convey real property to a particular person has actually
conveyed it to him when such presumption is necessary to perfect the title of such person or his successor in interest;
(jj)
That except for purposes of succession, when two persons perish in the same calamity, such as wreck, battle,
or conflagration, and it is not shown who died first, and there are no particular circumstances from which it can be
inferred, the survivorship is determined from the probabilities resulting from the strength and the age of the sexes,
according to the following rules:
1.

If both were under the age of fifteen years, the older is deemed to have survived;

2.

If both were above the age sixty, the younger is deemed to have survived;

3.

If one is under fifteen and the other above sixty, the former is deemed to have survived;

4.
If both be over fifteen and under sixty, and the sex be different, the male is deemed to have survived, if the
sex be the same, the older;
5.
If one be under fifteen or over sixty, and the other between those ages, the latter is deemed to have
survived.
(kk)
That if there is a doubt, as between two or more persons who are called to succeed each other, as to which
of them died first, whoever alleges the death of one prior to the other, shall prove the same; in the absence of proof,
they shall be considered to have died at the same time. (5a)
RULE 132
Presentation of Evidence
Section 25.
What attestation of copy must state. Whenever a copy of a document or record is attested for the
purpose of evidence, the attestation must state, in substance, that the copy is a correct copy of the original, or a
specific part thereof, as the case may be. The attestation must be under the official seal of the attesting officer, if
there be any, or if he be the clerk of a court having a seal, under the seal of such court. (26a)

Cases for FORUM SELECTION CLAUSES

CARNIVAL CRUISE LINES v. SHUTE

U.S. Supreme Court
Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585 (1990)
Carnival Cruise Lines, Inc. v. Shute
No. 89-1647
Argued Jan. 15, 1991
Decided April 17, 1991
499 U.S. 585
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
THE NINTH CIRCUIT
Syllabus
After the respondents Shute, a Washington State couple, purchased passage on a ship owned by petitioner, a Floridabased cruise line, petitioner sent them tickets containing a clause designating courts in Florida as the agreed-upon
fora for the resolution of disputes. The Shutes boarded the ship in Los Angeles, and, while in international waters off
the Mexican coast, Mrs. Shute suffered injuries when she slipped on a deck mat. The Shutes filed suit in a Washington
Federal District Court, which granted summary judgment for petitioner. The Court of Appeals reversed, holding, inter
alia, that the forum-selection clause should not be enforced under The Bremen v. Zapata Off-Shore Co., 407 U. S. 1,
because it was not "freely bargained for," and because its enforcement would operate to deprive the Shutes of their
day in court in light of evidence indicating that they were physically and financially incapable of pursuing the litigation
in Florida.
Held: The Court of Appeals erred in refusing to enforce the forum-selection clause. Pp. 499 U. S. 590-597.
(a) The Bremen Court's statement that a freely negotiated forum-selection clause, such as the one there at issue,
should be given full effect, 407 U.S. at 407 U. S. 12-13, does not support the Court of Appeals' determination that a
nonnegotiated forum clause in a passage contract is never enforceable simply because it is not the subject of
bargaining. Whereas it was entirely reasonable for The Bremen Court to have expected the parties to have negotiated
with care in selecting a forum for the resolution of disputes arising from their complicated international agreement, it
would be entirely unreasonable to assume that a cruise passenger would or could negotiate the terms of a forum
clause in a routine commercial cruise ticket form. Nevertheless, including a reasonable forum clause in such a form
contract well may be permissible for several reasons. Because it is not unlikely that a mishap in a cruise could subject
a cruise line to litigation in several different fora, the line has a special interest in limiting such fora. Moreover, a
clause establishing ex ante the dispute resolution forum has the salutary effect of dispelling confusion as to where
suits may be brought and defended, thereby sparing litigants time and expense and conserving judicial resources.
Furthermore, it is likely that passengers purchasing tickets
Page 499 U. S. 586
containing a forum clause like the one here at issue benefit in the form of reduced fares reflecting the savings that
the cruise line enjoys by limiting the fora in which it may be sued. Pp. 499 U. S. 590-594.
(b) The Court of Appeals' conclusion that the clause here at issue should not be enforced because the Shutes are
incapable of pursuing this litigation in Florida is not justified by The Bremen Court's statement that
"the serious inconvenience of the contractual forum to one or both of the parties might carry greater weight in
determining the reasonableness of the forum clause."
Id. at 407 U. S. 17. That statement was made in the context of a hypothetical "agreement between two Americans to
resolve their essentially local disputes in a remote alien forum." Ibid. Here, in contrast, Florida is not such a forum,
nor -- given the location of Mrs. Shute's accident -- is this dispute an essentially local one inherently more suited to
resolution in Washington than in Florida. In light of these distinctions, and because the Shutes do not claim lack of
notice of the forum clause, they have not satisfied the "heavy burden of proof," ibid. required to set aside the clause
on grounds of inconvenience. Pp. 499 U. S. 594-595.
(c) Although forum selection clauses contained in form passage contracts are subject to judicial scrutiny for
fundamental fairness, there is no indication that petitioner selected Florida to discourage cruise passengers from
pursuing legitimate claims or obtained the Shutes' accession to the forum clause by fraud or overreaching. P. 499 U.
S. 595.
(d) By its plain language, the forum selection clause at issue does not violate 46 U.S.C. App. 183c, which, inter alia,
prohibits a vessel owner from inserting in any contract a provision depriving a claimant of a trial "by court of
competent jurisdiction" for loss of life or personal injury resulting from negligence. Pp. 499 U. S. 595-597.
897 F.2d 377 (CA9 1990), reversed.
BLACKMUN, J., delivered the opinion of the Court, in which REHNQUIST, C.J., and WHITE, O'CONNOR, SCALIA,
KENNEDY, and SOUTER, JJ., joined. STEVENS, J., filed a dissenting opinion, in which MARSHALL, J., joined, post, p.
499 U. S. 597.
Page 499 U. S. 587
JUSTICE BLACKMUN delivered the opinion of the Court.

In this admiralty case we primarily consider whether the United States Court of Appeals for the Ninth Circuit correctly
refused to enforce a forum selection clause contained in tickets issued by petitioner Carnival Cruise Lines, Inc., to
respondents Eulala and Russel Shute.
I
The Shutes, through an Arlington, Wash., travel agent, purchased passage for a 7-day cruise on petitioner's ship, the
TROPICALE. Respondents paid the fare to the agent, who forwarded the payment to petitioner's headquarters in
Miami, Fla. Petitioner then prepared the tickets and sent them to respondents in the State of Washington. The face of
each ticket, at its left-hand lower corner, contained this admonition:
"SUBJECT TO CONDITIONS OF CONTRACT ON LAST PAGES [bb]IMPORTANT![eb] PLEASE READ CONTRACT -- ON
LAST PAGES 1, 2, 3"
App. 15. The following appeared on "contract page 1" of each ticket:
"TERMS AND CONDITIONS OF PASSAGE CONTRACT TICKET"
****
"3. (a) The acceptance of this ticket by the person or persons named hereon as passengers shall be deemed to be an
acceptance and agreement by each of them of all of the terms and conditions of this Passage Contract Ticket."
****
"8. It is agreed by and between the passenger and the Carrier that all disputes and matters whatsoever arising under,
in connection with or incident to this Contract
Page 499 U. S. 588
shall be litigated, if at all, in and before a Court located in the State of Florida, U.S.A. to the exclusion of the Courts of
any other state or country."
Id. at 16.
The last quoted paragraph is the forum selection clause at issue.
II
Respondents boarded the TROPICALE in Los Angeles, Cal. The ship sailed to Puerto Vallarta, Mexico, and then
returned to Los Angeles. While the ship was in international waters off the Mexican coast, respondent Eulala Shute
was injured when she slipped on a deck mat during a guided tour of the ship's galley. Respondents filed suit against
petitioner in the United States District Court for the Western District of Washington, claiming that Mrs. Shute's injuries
had been caused by the negligence of Carnival Cruise Lines and its employees. Id. at 4.
Petitioner moved for summary judgment, contending that the forum clause in respondents' tickets required the Shutes
to bring their suit against petitioner in a court in the State of Florida. Petitioner contended, alternatively, that the
District Court lacked personal jurisdiction over petitioner because petitioner's contacts with the State of Washington
were insubstantial. The District Court granted the motion, holding that petitioner's contacts with Washington were
constitutionally insufficient to support the exercise of personal jurisdiction. See App. to Pet. for Cert. 60a.
The Court of Appeals reversed. Reasoning that, "but for" petitioner's solicitation of business in Washington,
respondents would not have taken the cruise and Mrs. Shute would not have been injured, the court concluded that
petitioner had sufficient contacts with Washington to justify the District Court's exercise of personal jurisdiction. 897
F.2d 377, 385-386 (CA9 1990). *
Page 499 U. S. 589
Turning to the forum selection clause, the Court of Appeals acknowledged that a court concerned with the
enforceability of such a clause must begin its analysis with The Bremen v. Zapata Off-Shore Co., 407 U. S. 1 (1972),
where this Court held that forum selection clauses, although not "historically . . . favored," are "prima facie valid." Id.
at 407 U. S. 9-10. See 897 F.2d at 388. The appellate court concluded that the forum clause should not be enforced
because it "was not freely bargained for." Id. at 389. As an "independent justification" for refusing to enforce the
clause, the Court of Appeals noted that there was evidence in the record to indicate that "the Shutes are physically
and financially incapable of pursuing this litigation in Florida," and that the enforcement of the clause would operate
to deprive them of their day in court, and thereby contravene this Court's holding in The Bremen. 897 F.2d at 389.
We granted certiorari to address the question whether the Court of Appeals was correct in holding that the District
Court should hear respondents' tort claim against petitioner. 498 U.S. 807-808 (1990). Because we find the forum
selection clause to be dispositive of this question, we need not consider petitioner's constitutional argument as to
personal jurisdiction. See Ashwander v. TVA, 297 U. S. 288, 297 U. S. 347 (1936) (Brandeis, J., concurring) ("
I
t is not the habit of the Court to decide questions of a constitutional nature unless
Page 499 U. S. 590
absolutely necessary to a decision of the case,'" quoting Burton v. United States, 196 U. S. 283, 196 U. S. 295
(1905)).
III
We begin by noting the boundaries of our inquiry. First, this is a case in admiralty, and federal law governs the
enforceability of the forum selection clause we scrutinize. See Archawski v. Nanioti, 350 U. S. 532, 350 U. S. 533
(1956); The Moses Taylor, 4 Wall. 411, 71 U. S. 427 (1867); Tr. of Oral Arg. 36-37, 12, 47-48. Cf. Stewart
Organization, Inc. v. Ricoh Corp., 487 U. S. 22, 487 U. S. 28-29 (1988). Second, we do not address the question
whether respondents had sufficient notice of the forum clause before entering the contract for passage. Respondents
essentially have conceded that they had notice of the forum selection provision. Brief for Respondent 26 ("The

respondents do not contest the incorporation of the provisions nor [sic] that the forum selection clause was
reasonably communicated to the respondents, as much as three pages of fine print can be communicated.").
Additionally, the Court of Appeals evaluated the enforceability of the forum clause under the assumption, although
"doubtful," that respondents could be deemed to have had knowledge of the clause. See 897 F.2d at 389 and n. 11.
Within this context, respondents urge that the forum clause should not be enforced because, contrary to this Court's
teachings in The Bremen, the clause was not the product of negotiation, and enforcement effectively would deprive
respondents of their day in court. Additionally, respondents contend that the clause violates the Limitation of Vessel
Owner's Liability Act, 46 U.S.C. App. 183c. We consider these arguments in turn.
IV
A
Both petitioner and respondents argue vigorously that the Court's opinion in The Bremen governs this case, and each
side purports to find ample support for its position in that
Page 499 U. S. 591
opinion's broad-ranging language. This seeming paradox derives in large part from key factual differences between
this case and The Bremen, differences that preclude an automatic and simple application of The Bremen's general
principles to the facts here.
In The Bremen, this Court addressed the enforceability of a forum selection clause in a contract between two business
corporations. An American corporation, Zapata, made a contract with Unterweser, a German corporation, for the
towage of Zapata's ocean-going drilling rig from Louisiana to a point in the Adriatic Sea off the coast of Italy. The
agreement provided that any dispute arising under the contract was to be resolved in the London Court of Justice.
After a storm in the Gulf of Mexico seriously damaged the rig, Zapata ordered Unterweser's ship to tow the rig to
Tampa, Fla., the nearest point of refuge. Thereafter, Zapata sued Unterweser in admiralty in federal court at Tampa.
Citing the forum clause, Unterweser moved to dismiss. The District Court denied Unterweser's motion, and the Court
of Appeals for the Fifth Circuit, sitting en banc on rehearing, and by a sharply divided vote, affirmed. 446 F.2d 907
(1971).
This Court vacated and remanded, stating that, in general,
"a freely negotiated private international agreement, unaffected by fraud, undue influence, or overweening bargaining
power, such as that involved here, should be given full effect."
407 U.S. at 407 U. S. 12-13 (footnote omitted). The Court further generalized that,
"in the light of present-day commercial realities and expanding international trade, we conclude that the forum clause
should control absent a strong showing that it should be set aside."
Id. at 407 U. S. 16. The Court did not define precisely the circumstances that would make it unreasonable for a court
to enforce a forum clause. Instead, the Court discussed a number of factors that made it reasonable to enforce the
clause at issue in The Bremen and
Page 499 U. S. 592
that, presumably, would be pertinent in any determination whether to enforce a similar clause.
In this respect, the Court noted that there was
"strong evidence that the forum clause was a vital part of the agreement, and [that] it would be unrealistic to think
that the parties did not conduct their negotiations, including fixing the monetary terms, with the consequences of the
forum clause figuring prominently in their calculations."
Id. at 407 U. S. 14 (footnote omitted). Further, the Court observed that it was not "dealing with an agreement
between two Americans to resolve their essentially local disputes in a remote alien forum," and that, in such a case,
"the serious inconvenience of the contractual forum to one or both of the parties might carry greater weight in
determining the reasonableness of the forum clause."
Id. at 407 U. S. 17. The Court stated that, even where the forum clause establishes a remote forum for resolution of
conflicts, "the party claiming [unfairness] should bear a heavy burden of proof." Ibid.
In applying The Bremen, the Court of Appeals in the present litigation took note of the foregoing "reasonableness"
factors and rather automatically decided that the forum selection clause was unenforceable because, unlike the
parties in The Bremen, respondents are not business persons, and did not negotiate the terms of the clause with
petitioner. Alternatively, the Court of Appeals ruled that the clause should not be enforced because enforcement
effectively would deprive respondents of an opportunity to litigate their claim against petitioner.
The Bremen concerned a
"far from routine transaction between companies of two different nations contemplating the tow of an extremely
costly piece of equipment from Louisiana across the Gulf of Mexico and the Atlantic Ocean, through the Mediterranean
Sea to its final destination in the Adriatic Sea."
407 U.S. at 407 U. S. 13. These facts suggest that, even apart from the evidence of negotiation regarding the forum
clause, it was entirely reasonable for the Court in The
Page 499 U. S. 593
Bremen to have expected Unterweser and Zapata to have negotiated with care in selecting a forum for the resolution
of disputes arising from their special towing contract.
In contrast, respondents' passage contract was purely routine, and doubtless nearly identical to every commercial
passage contract issued by petitioner and most other cruise lines. See, e.g., Hodes v. S.N.C. Achille Lauro ed AltriGestione, 858 F.2d 905, 910 (CA3 1988), cert. dism'd, 490 U.S. 1001 (1989). In this context, it would be entirely

unreasonable for us to assume that respondents -- or any other cruise passenger -- would negotiate with petitioner
the terms of a forum-selection clause in an ordinary commercial cruise ticket. Common sense dictates that a ticket of
this kind will be a form contract the terms of which are not subject to negotiation, and that an individual purchasing
the ticket will not have bargaining parity with the cruise line. But by ignoring the crucial differences in the business
contexts in which the respective contracts were executed, the Court of Appeals' analysis seems to us to have distorted
somewhat this Court's holding in The Bremen.
In evaluating the reasonableness of the forum clause at issue in this case, we must refine the analysis of The Bremen
to account for the realities of form passage contracts. As an initial matter, we do not adopt the Court of Appeals'
determination that a nonnegotiated forum selection clause in a form ticket contract is never enforceable simply
because it is not the subject of bargaining. Including a reasonable forum clause in a form contract of this kind well
may be permissible for several reasons: first, a cruise line has a special interest in limiting the fora in which it
potentially could be subject to suit. Because a cruise ship typically carries passengers from many locales, it is not
unlikely that a mishap on a cruise could subject the cruise line to litigation in several different fora. See The Bremen,
407 U.S. at 407 U. S. 13 and n. 15. Additionally, a clause establishing ex ante the forum for dispute resolution has the
salutary
Page 499 U. S. 594
effect of dispelling any confusion about where suits arising from the contract must be brought and defended, sparing
litigants the time and expense of pretrial motions to determine the correct forum, and conserving judicial resources
that otherwise would be devoted to deciding those motions. See Stewart Organization, 487 U.S. at 487 U. S. 33
(concurring opinion). Finally, it stands to reason that passengers who purchase tickets containing a forum clause like
that at issue in this case benefit in the form of reduced fares reflecting the savings that the cruise line enjoys by
limiting the fora in which it may be sued. Cf. Northwestern Nat. Ins. Co. v. Donovan, 916 F.2d 372, 378 (CA7 1990).
We also do not accept the Court of Appeals' "independent justification" for its conclusion that The Bremen dictates
that the clause should not be enforced because "[t]here is evidence in the record to indicate that the Shutes are
physically and financially incapable of pursuing this litigation in Florida." 897 F.2d, at 389. We do not defer to the
Court of Appeals' findings of fact. In dismissing the case for lack of personal jurisdiction over petitioner, the District
Court made no finding regarding the physical and financial impediments to the Shutes' pursuing their case in Florida.
The Court of Appeals' conclusory reference to the record provides no basis for this Court to validate the finding of
inconvenience. Furthermore, the Court of Appeals did not place in proper context this Court's statement in The
Bremen that
"the serious inconvenience of the contractual forum to one or both of the parties might carry greater weight in
determining the reasonableness of the forum clause."
407 U.S. at 407 U. S. 17. The Court made this statement in evaluating a hypothetical "agreement between two
Americans to resolve their essentially local disputes in a remote alien forum." Ibid. In the present case, Florida is not
a "remote alien forum," nor -- given the fact that Mrs. Shute's accident occurred off the coast of Mexico -- is this
dispute an essentially local one inherently more suited to resolution in the State of Washington than in Florida. In
Page 499 U. S. 595
light of these distinctions, and because respondents do not claim lack of notice of the forum clause, we conclude that
they have not satisfied the "heavy burden of proof," ibid. required to set aside the clause on grounds of
inconvenience.
It bears emphasis that forum selection clauses contained in form passage contracts are subject to judicial scrutiny for
fundamental fairness. In this case, there is no indication that petitioner set Florida as the forum in which disputes
were to be resolved as a means of discouraging cruise passengers from pursuing legitimate claims. Any suggestion of
such a bad faith motive is belied by two facts: petitioner has its principal place of business in Florida, and many of its
cruises depart from and return to Florida ports. Similarly, there is no evidence that petitioner obtained respondents'
accession to the forum clause by fraud or overreaching. Finally, respondents have conceded that they were given
notice of the forum provision and, therefore, presumably retained the option of rejecting the contract with impunity.
In the case before us, therefore, we conclude that the Court of Appeals erred in refusing to enforce the forum
selection clause.
B
Respondents also contend that the forum selection clause at issue violates 46 U.S.C. App. 183c. That statute,
enacted in 1936, see 49 Stat. 1480, provides:
"It shall be unlawful for the . . . owner of any vessel transporting passengers between ports of the United States or
between any such port and a foreign port to insert in any rule, regulation, contract, or agreement any provision or
limitation (1) purporting, in the event of loss of life or bodily injury arising from the negligence or fault of such owner
or his servants, to relieve such owner . . . from liability, or from liability beyond any stipulated amount, for such loss
or injury, or (2) purporting in such event to lessen, weaken, or avoid the right of any claimant to a trial by court of
competent
Page 499 U. S. 596
jurisdiction on the question of liability for such loss or injury, or the measure of damages therefor. All such provisions
or limitations contained in any such rule, regulation, contract, or agreement are declared to be against public policy
and shall be null and void and of no effect."

By its plain language, the forum selection clause before us does not take away respondents' right to "a trial by [a]
court of competent jurisdiction," and thereby contravene the explicit proscription of 183c. Instead, the clause states
specifically that actions arising out of the passage contract shall be brought "if at all," in a court "located in the State
of Florida," which, plainly, is a "court of competent jurisdiction" within the meaning of the statute.
Respondents appear to acknowledge this by asserting that, although the forum clause does not directly prevent the
determination of claims against the cruise line, it causes plaintiffs unreasonable hardship in asserting their rights, and
therefore violates Congress' intended goal in enacting 183c. Significantly, however, respondents cite no authority for
their contention that Congress' intent in enacting 183c was to avoid having a plaintiff travel to a distant forum in
order to litigate. The legislative history of 183c suggests, instead, that this provision was enacted in response to
passenger ticket conditions purporting to limit the shipowner's liability for negligence or to remove the issue of liability
from the scrutiny of any court by means of a clause providing that "the question of liability and the measure of
damages shall be determined by arbitration." See S.Rep. No. 2061, 74th Cong., 2d Sess. 6 (1936); H.R.Rep. No.
2517, 74th Cong., 2d Sess., 6 (1936). See also Safety of Life and Property at Sea: Hearings Before the Committee on
Merchant Marine and Fisheries, 74th Cong., 2d Sess., pt. 4, pp. 20, 36-37, 57, 109-110, 119 (1936). There was no
prohibition of a forum selection clause. Because the clause before us allows for judicial resolution of claims against
petitioner and does
Page 499 U. S. 597
not purport to limit petitioner's liability for negligence, it does not violate 183c.
V
The judgment of the Court of Appeals is reversed.
It is so ordered
* The Court of Appeals had filed an earlier opinion also reversing the District Court and ruling that the District Court
had personal jurisdiction over the cruise line, and that the forum selection clause in the tickets was unreasonable, and
was not to be enforced. 863 F.2d 1437 (CA9 1988). That opinion, however, was withdrawn when the court certified to
the Supreme Court of Washington the question whether the Washington long-arm statute, Wash.Rev.Code 4.28.185
(1988), conferred personal jurisdiction over Carnival Cruise Lines for the claim asserted by the Shutes. See 872 F.2d
930 (CA9 1989). The Washington Supreme Court answered the certified question in the affirmative on the ground
that the Shutes' claim "arose from" petitioner's advertisement in Washington and the promotion of its cruises there.
113 Wash.2d 763, 783 P.2d 78 (1989). The Court of Appeals then "refiled" its opinion "as modified herein." See 897
F.2d at 380, n. 1.
JUSTICE STEVENS, with whom JUSTICE MARSHALL joins, dissenting.
The Court prefaces its legal analysis with a factual statement that implies that a purchaser of a Carnival Cruise Lines
passenger ticket is fully and fairly notified about the existence of the choice of forum clause in the fine print on the
back of the ticket. See ante at 499 U. S. 587-588. Even if this implication were accurate, I would disagree with the
Court's analysis. But, given the Court's preface, I begin my dissent by noting that only the most meticulous passenger
is likely to become aware of the forum selection provision. I have therefore appended to this opinion a facsimile
[omitted] of the relevant text, using the type size that actually appears in the ticket itself. A careful reader will find
the forum selection clause in the eighth of the twenty-five numbered paragraphs.
Of course, many passengers, like the respondents in this case, see ante at 499 U. S. 587, will not have an opportunity
to read paragraph 8 until they have actually purchased their tickets. By this point, the passengers will already have
accepted the condition set forth in paragraph 16(a), which provides that "[t]he Carrier shall not be liable to make any
refund to passengers in respect of . . . tickets wholly or partly not used by a passenger." Not knowing whether or not
that provision is legally enforceable, I assume that the average passenger would accept the risk of having to file suit
in Florida in the event of an injury, rather than canceling -- without a refund -- a planned vacation at the last minute.
The fact that the cruise line can reduce its litigation costs, and therefore its liability insurance premiums, by forcing
this choice on its passengers does not, in my opinion, suffice to render the
Page 499 U. S. 598
provision reasonable. Cf. Steven v. Fidelity Casualty Co. of New York, 58 Cal.2d 862, 883, 27 Cal.Rptr. 172, 186, 377
P.2d 284, 298 (1962) (refusing to enforce limitation on liability in insurance policy because insured "must purchase
the policy before he even knows its provisions").
Even if passengers received prominent notice of the forum selection clause before they committed the cost of the
cruise, I would remain persuaded that the clause was unenforceable under traditional principles of federal admiralty
law, and is "null and void" under the terms of Limited Liability Act, 49 Stat. 1480, as amended, 46 U.S.C. App. 183c,
which was enacted in 1936 to invalidate expressly stipulations limiting shipowners' liability for negligence.
Exculpatory clauses in passenger tickets have been around for a long time. These clauses are typically the product of
disparate bargaining power between the carrier and the passenger, and they undermine the strong public interest in
deterring negligent conduct. For these reasons, courts long before the turn of the century consistently held such
clauses unenforceable under federal admiralty law. Thus, in a case involving a ticket provision purporting to limit the
shipowner's liability for the negligent handling of baggage, this Court wrote:
"It is settled in the courts of the United States that exemptions limiting carriers from responsibility for the negligence
of themselves or their servants are both unjust and unreasonable, and will be deemed as wanting in the element of
voluntary assent; and, besides, that such conditions are in conflict with public policy. This doctrine was announced so
long ago, and has been so frequently reiterated, that it is elementary. We content ourselves with referring to the

cases of the Baltimore & Ohio &c. Railway v. Voigt, 176 U. S. 498, 176 U. S. 505, 176 U. S. 507, and Knott v. Botany
Mills, 179 U. S. 69, 179 U. S. 71 [(1900)], where the previously adjudged cases are referred to and the principles
Page 499 U. S. 599
by them expounded are restated."
The Kensington, 183 U. S. 263, 183 U. S. 268 (1902).
Clauses limiting a carrier's liability or weakening the passenger's right to recover for the negligence of the carrier's
employees come in a variety of forms. Complete exemptions from liability for negligence or limitations on the amount
of the potential damage recovery, [Footnote 1] requirements that notice of claims be filed within an unreasonably
short period of time, [Footnote 2] provisions mandating a choice of law that is favorable to the defendant in
negligence cases, [Footnote 3] and forum selection clauses are all similarly designed to put a thumb on the carrier's
side of the scale of justice. [Footnote 4]
Page 499 U. S. 600
Forum selection clauses in passenger tickets involve the intersection of two strands of traditional contract law that
qualify the general rule that courts will enforce the terms of a contract as written. Pursuant to the first strand, courts
traditionally have reviewed with heightened scrutiny the terms of contracts of adhesion, form contracts offered on a
take-or-leave basis by a party with stronger bargaining power to a party with weaker power. Some commentators
have questioned whether contracts of adhesion can justifiably be enforced at all under traditional contract theory
because the adhering party generally enters into them without manifesting knowing and voluntary consent to all their
terms. See, e.g., Rakoff, Contracts of Adhesion: An Essay in Reconstruction, 96 Harv.L.Rev. 1173, 1179-1180 (1983);
Slawson, Mass Contracts: Lawful Fraud in California, 48 S.Cal.L.Rev. 1, 1213 (1974); K. Llewellyn, The Common Law
Tradition 370-371 (1960).
The common law, recognizing that standardized form contracts account for a significant portion of all commercial
agreements, has taken a less extreme position, and instead subjects terms in contracts of adhesion to scrutiny for
reasonableness. Judge J. Skelly Wright set out the state of the law succinctly in Williams v. Walker-Thomas Furniture
Co., 121 U.S.App.D.C. 315, 319-320, 350 F.2d 445, 449-450 (1965) (footnotes omitted):
"Ordinarily, one who signs an agreement without full knowledge of its terms might be held to assume the risk that he
has entered a one-sided bargain. But when a party of little bargaining power, and hence little real choice, signs a
commercially unreasonable contract with little or no knowledge of its terms, it is hardly likely that his consent, or even
an objective manifestation of his consent,
Page 499 U. S. 601
was ever given to all of the terms. In such a case, the usual rule that the terms of the agreement are not to be
questioned should be abandoned and the court should consider whether the terms of the contract are so unfair that
enforcement should be withheld."
See also Steven, 58 Cal.2d at 879-883, 27 Cal.Rptr. at 183-185, 377 P.2d at 295-297; Henningsen v. Bloomfield
Motors, Inc., 32 N.J. 358, 161 A.2d 69 (1960).
The second doctrinal principle implicated by forum selection clauses is the traditional rule that "contractual provisions,
which seek to limit the place or court in which an action may . . . be brought, are invalid as contrary to public policy."
See Dougherty, Validity of Contractual Provision Limiting Place or Court in Which Action May Be Brought, 31 A.L.R.4th
404, 409, 3 (1984). See also Home Insurance Co. v. Morse, 20 Wall. 445, 87 U. S. 451 (1874). Although adherence
to this general rule has declined in recent years, particularly following our decision in The Bremen v. Zapata Off-Shore
Co., 407 U. S. 1 (1972), the prevailing rule is still that forum selection clauses are not enforceable if they were not
freely bargained for, create additional expense for one party, or deny one party a remedy. See 31 A.L.R.4th, at 409438 (citing cases). A forum selection clause in a standardized passenger ticket would clearly have been unenforceable
under the common law before our decision in The Bremen, see 407 U.S. at 407 U. S. 9, and n. 10, and, in my opinion,
remains unenforceable under the prevailing rule today.
The Bremen, which the Court effectively treats as controlling this case, had nothing to say about stipulations printed
on the back of passenger tickets. That case involved the enforceability of a forum selection clause in a freely
negotiated international agreement between two large corporations providing for the towage of a vessel from the Gulf
of Mexico to the Adriatic Sea. The Court recognized that such towage agreements had generally been held
unenforceable in American
Page 499 U. S. 602
courts, [Footnote 5] but held that the doctrine of those cases did not extend to commercial arrangements between
parties with equal bargaining power. The federal statute that should control the disposition of the case before us
today was enacted in 1936, when the general rule denying enforcement of forum selection clauses was indisputably
widely accepted. The principal subject of the statute concerned the limitation of shipowner liability, but, as the
following excerpt from the House Report explains, the section that is relevant to this case was added as a direct
response to shipowners' ticketing practices.
"During the course of the hearings on the bill (H.R. 9969) there was also brought to the attention of the committee a
practice of providing on the reverse side of steamship tickets that, in the event of damage or injury caused by the
negligence or fault of the owner or his servants, the liability of the owner shall be limited to a stipulated amount, in
some cases $5,000, and in others substantially lower amounts, or that in such event the question of liability and the
measure of damages shall be determined by arbitration. The amendment to chapter 6 of title 48 of the Revised

Statutes proposed to be made by section 2 of the committee amendment is intended to, and in the opinion of the
committee will, put a stop to all such practices and practices of a like character."
H.R.Rep. No. 2517, 74th Cong., 2d Sess., 6-7 (1936) (emphasis added); see also S.Rep. No. 2061, 74th Cong., 2d
Sess., 6-7 (1936).
Page 499 U. S. 603
The intent to "put a stop to all such practices and practices of a like character" was effectuated in the second clause
of the statute. It reads:
"It shall be unlawful for the manager, agent, master, or owner of any vessel transporting passengers between ports
of the United States or between any such port and a foreign port to insert in any rule, regulation, contract, or
agreement any provision or limitation (1) purporting, in the event of loss of life or bodily injury arising from the
negligence or fault of such owner or his servants, to relieve such owner, master, or agent from liability, or from
liability beyond any stipulated amount, for such loss or injury, or (2) purporting in such event to lessen, weaken, or
avoid the right of any claimant to a trial by court of competent jurisdiction on the question of liability for such loss or
injury, or the measure of damages therefor. All such provisions or limitations contained in any such rule, regulation,
contract, or agreement are declared to be against public policy and shall be null and void and of no effect."
46 U.S.C. App. 183c (emphasis added).
The stipulation in the ticket that Carnival Cruise sold to respondents certainly lessens or weakens their ability to
recover for the slip and fall incident that occurred off the west coast of Mexico during the cruise that originated and
terminated in Los Angeles, California. It is safe to assume that the witnesses -- whether other passengers or members
of the crew -- can be assembled with less expense and inconvenience at a west coast forum than in a Florida court
several thousand miles from the scene of the accident.
A liberal reading of the 1936 statute is supported by both its remedial purpose and by the legislative history's general
condemnation of "all such practices." Although the statute does not specifically mention forum selection clauses, its
language is broad enough to encompass them. The absence of a
Page 499 U. S. 604
specific reference is adequately explained by the fact that such clauses were already unenforceable under common
law, and would not often have been used by carriers, which were relying on stipulations that purported to exonerate
them from liability entirely. Cf. Moskal v. United States, 498 U. S. 103, 498 U. S. 110-113 (1990).
The Courts of Appeals, construing an analogous provision of the Carriage of Goods by Sea Act, 46 U.S.C. App. 1300
et seq., have unanimously held invalid as limitations on liability forum selection clauses requiring suit in foreign
jurisdictions. See, e.g., Hughes Drilling Fluids v. M/V Luo Fu Shan, 852 F.2d 840 (CA5 1988), cert. denied, 489 U.S.
1033 (1989); Union Ins. Soc. of Canton, Ltd. v. S.S. Elikon, 642 F.2d 721, 724-25 (CA4 1981); Indussa Corp. v. S.S.
Ranborg, 377 F.2d 200, 203-204 (CA2 1967). Commentators have also endorsed this view. See, e.g., G. Gilmore & C.
Black, The Law of Admiralty 145, and n. 23 (2nd ed.1975); Mendelsohn, Liberalism, Choice of Forum Clauses and the
Hague Rules, 2 J. of Maritime Law & Comm. 661, 663-666 (1971). The forum selection clause here does not mandate
suit in a foreign jurisdiction, and therefore arguably might have less of an impact on a plaintiff's ability to recover. See
Fireman's Fund American Ins. Cos. v. Puerto Rican Forwarding Co., 492 F.2d 1294 (CA1 1974). However, the plaintiffs
in this case are not large corporations, but individuals, and the added burden on them of conducting a trial at the
opposite end of the country is likely proportional to the additional cost to a large corporation of conducting a trial
overseas. [Footnote 6]
Under these circumstances, the general prohibition against stipulations purporting "to lessen, weaken, or avoid" the
passenger's right to a trial certainly should be construed to apply to the manifestly unreasonable stipulation in these
passengers'
Page 499 U. S. 605
tickets. Even without the benefit of the statute, I would continue to apply the general rule that prevailed prior to our
decision in The Bremen to forum selection clauses in passenger tickets.
I respectfully dissent.
[Footnote 1]
See 46 U.S.C. App. 183c:
"It shall be unlawful for the . . . owner of any vessel transporting passengers between ports of the United States or
between any such port and a foreign port to insert in any rule, regulation, contract, or agreement any provision or
limitation (1) purporting, in the event of loss of life or bodily injury arising from the negligence or fault of such owner
or his servants, to relieve such owner . . . from liability, or from liability beyond any stipulated amount, for such loss
or injury. . . ."
[Footnote 2]
See 46 U.S.C. App. 183b(a):
"It shall be unlawful for the manager, agent, master, or owner of any sea-going vessel (other than tugs, barges,
fishing vessels and their tenders) transporting passengers or merchandise or property from or between ports of the
United States and foreign ports to provide by rule, contract, regulation, or otherwise a shorter period for giving notice
of, or filing claims for loss of life or bodily injury, than six months, and for the institution of suits on such claims, than
one year, such period for institution of suits to be computed from the day when the death or injury occurred."

See also 49 U.S.C. 11707(e) ("A carrier or freight forwarder may not provide by rule, contract, or otherwise, a
period of less than 9 months for filing a claim against it under this section and a period of less than 2 years for
bringing a civil action against it under this section").
[Footnote 3]
See, e.g., The Kensington, 183 U. S. 263, 183 U. S. 269 (1902) (refusing to enforce clause requiring that all disputes
under contract for passage be governed by Belgian law because such law would have favored the shipowner in
violation of United States public policy).
[Footnote 4]
All these clauses will provide passengers who purchase tickets containing them with a "benefit in the form of reduced
fares reflecting the savings that the cruise line enjoys by limiting [its exposure to liability]." See ante at 499 U. S. 594.
Under the Court's reasoning, all these clauses, including a complete waiver of liability, would be enforceable, a result
at odds with longstanding jurisprudence.
[Footnote 5]
"In [Carbon Black Export, Inc. v. The Monrosa, 254 F.2d 297 (CA5 1958), cert. dismissed, 359 U. S. 180 (1959),] the
Court of Appeals had held a forum selection clause unenforceable, reiterating the traditional view of many American
courts that 'agreements in advance of controversy whose object is to oust the jurisdiction of the courts are contrary to
public policy, and will not be enforced.' 254 F.2d at 300-301."
The Bremen v. Zapata Off-Shore Co., 407 U. S. 1, 407 U. S. 6 (1972).
[Footnote 6]
The Court does not make clear whether the result in this case would also apply if the clause required Carnival
passengers to sue in Panama, the country in which Carnival is incorporated.
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THE BREMEN v. ZAPATA OFF-SHORE

U.S. Supreme Court
The Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972)
The Bremen v. Zapata Off-Shore Co.
No. 71-322
Argued March 21, 1972
Decided June 12, 1972
407 U.S. 1
CERTIORARI TO THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
Syllabus
Petitioner Unterweser made an agreement to tow respondent's drilling rig from Louisiana to Italy. The contract
contained a forum-selection clause providing for the litigation of any dispute in the High Court of Justice in London.
When the rig under tow was damaged in a storm, respondent instructed Unterweser to tow the rig to Tampa, the
nearest port of refuge. There, respondent brought suit in admiralty against petitioners. Unterweser invoked the forum
clause in moving for dismissal for want of jurisdiction and brought suit in the English court, which ruled that it had
jurisdiction under the contractual forum provision. The District Court, relying on Carbon Black Export, Inc. v. The
Monrosa, 254 F. 2d 297, held the forum-selection clause unenforceable, and refused to decline jurisdiction on the
basis of forum non conveniens. The Court of Appeals affirmed.
Held: The forum-selection clause, which was a vital part of the towing contract, is binding on the parties unless
respondent can meet the heavy burden of showing that its enforcement would be unreasonable, unfair, or unjust. Pp.
407 U. S. 8-20
428 F. 2d 888 and 446 F. 2d 907, vacated and remanded.
BURGER, C. J., delivered the opinion of the Court, in which BRENNAN, STEWART, WHITE, MARSHALL, BLACKMUN,
POWELL, and REHNQUIST, JJ., joined. WHITE, J., filed a concurring statement, post, p. 407 U. S. 20. DOUGLAS, J.,
filed a dissenting opinion, post, p. 407 U. S. 20.
Page 407 U. S. 2
MR. CHIEF JUSTICE BURGER delivered the opinion of the Court.
We granted certiorari to review a judgment of the United States Court of Appeals for the Fifth Circuit declining to
enforce a forum selection clause governing disputes arising under an international towage contract between
petitioners and respondent. The circuits have differed in their approach to such clauses. [Footnote 1] For the reasons
stated hereafter, we vacate the judgment of the Court of Appeals.
In November, 1967, respondent Zapata, a Houston-based American corporation, contracted with petitioner
Unterweser, a German corporation, to tow Zapata's ocean-going, self-elevating drilling rig Chaparral from Louisiana to
a point off Ravenna, Italy, in the Adriatic Sea, where Zapata had agreed to drill certain wells.
Zapata had solicited bids for the towage, and several companies, including Unterweser, had responded. Unterweser
was the low bidder and Zapata requested it to submit a contract, which it did. The contract submitted by Unterweser
contained the following provision, which is at issue in this case:
"Any dispute arising must be treated before the London Court of Justice. "
Page 407 U. S. 3
In addition, the contract contained two clauses purporting to exculpate Unterweser from liability for damages to the
towed barge. [Footnote 2]
After reviewing the contract and making several changes, but without any alteration in the forum selection or
exculpatory clauses, a Zapata vice-president executed the contract and forwarded it to Unterweser in Germany, where
Unterweser accepted the changes, and the contract became effective.
On January 5, 1968, Unterweser's deep sea tug Bremen departed Venice, Louisiana, with the Chaparral in tow bound
for Italy. On January 9, while the flotilla was in international waters in the middle of the Gulf of Mexico, a severe
storm arose. The sharp roll of the Chaparral in Gulf waters caused its elevator legs, which had been raised for the
voyage, to break off and fall into the sea, seriously damaging the Chaparral. In this emergency situation, Zapata
instructed the Bremen to tow its damaged rig to Tampa, Florida, the nearest port of refuge.
On January 12, Zapata, ignoring its contract promise to litigate "any dispute arising" in the English courts,
commenced a suit in admiralty in the United States
Page 407 U. S. 4
District Court at Tampa, seeking $3,500,000 damages against Unterweser in personam and the Bremen in rem,
alleging negligent towage and breach of contract. [Footnote 3] Unterweser responded by invoking the forum clause of
the towage contract, and moved to dismiss for lack of jurisdiction or on forum non conveniens grounds, or, in the
alternative, to stay the action pending submission of the dispute to the "London Court of Justice." Shortly thereafter,
in February, before the District Court had ruled on its motion to stay or dismiss the United States action, Unterweser
commenced an action against Zapata seeking damages for breach of the towage contract in the High Court of Justice
in London, as the contract provided; Zapata appeared in that court to contest jurisdiction, but its challenge was
rejected, the English courts holding that the contractual forum provision conferred jurisdiction. [Footnote 4]

Page 407 U. S. 5
In the meantime, Unterweser was faced with a dilemma in the pending action in the United States court at Tampa.
The six-month period for filing action to limit its liability to Zapata and other potential claimants was about to expire,
[Footnote 5] but the United States District Court in Tampa had not yet ruled on Unterweser's motion to dismiss or
stay Zapata's action. On July 2, 1968, confronted with difficult alternatives, Unterweser filed an action to limit its
liability in the District Court in Tampa. That court entered the customary injunction against proceedings outside the
limitation court, and Zapata refiled its initial claim in the limitation action. [Footnote 6]
Page 407 U. S. 6
It was only at this juncture, on July 29, after the six-month period for filing the limitation action had run, that the
District Court denied Unterweser's January motion to dismiss or stay Zapata's initial action. In denying the motion,
that court relied on the prior decision of the Court of Appeals in Carbon Black Export, Inc. v. The Monrosa, 254 F.2d
297 (CA5 1958), cert. dismissed, 359 U. S. 180 (1959). In that case, the Court of Appeals had held a forum selection
clause unenforceable, reiterating the traditional view of many American courts that
"agreements in advance of controversy whose object is to oust the jurisdiction of the courts are contrary to public
policy, and will not be enforced."
254 F.2d at 300-301. [Footnote 7] Apparently concluding that it was bound by the Carbon Black case, the District
Court gave the forum selection clause little, if any, weight. Instead, the court treated the motion to dismiss under
normal forum non conveniens doctrine applicable in the absence of such a clause, citing Gulf Oil Corp. v. Gilbert, 330
U. S. 501 (1947). Under that doctrine "unless the balance is strongly in favor of the defendant, the plaintiff's choice of
forum should rarely be disturbed." Id. at 330 U. S. 508. The District Court concluded: "The balance of conveniences
here is not strongly in favor of [Unterweser] and [Zapata's] choice of forum should not be disturbed."
Thereafter, on January 21, 1969, the District Court denied another motion by Unterweser to stay the limitation action
pending determination of the controversy in the High Court of Justice in London, and granted Zapata's motion to
restrain Unterweser from litigating
Page 407 U. S. 7
further in the London court. The District Judge ruled that, having taken jurisdiction in the limitation proceeding, he
had jurisdiction to determine all matters relating to the controversy. He ruled that Unterweser should be required to
"do equity" by refraining from also litigating the controversy in the London court, not only for the reasons he had
previously stated for denying Unterweser's first motion to stay Zapata's action, but also because Unterweser had
invoked the United States court's jurisdiction to obtain the benefit of the Limitation Act.
On appeal, a divided panel of the Court of Appeals affirmed, and, on rehearing en banc, the panel opinion was
adopted, with six of the 14 en banc judges dissenting. As had the District Court, the majority rested on the Carbon
Black decision, concluding that, "at the very least,'" that case stood for the proposition that a forum selection clause
"`will not be enforced unless the selected state would provide a more convenient forum than the state in which suit is
brought.'" From that premise, the Court of Appeals proceeded to conclude that, apart from the forum selection clause,
the District Court did not abuse its discretion in refusing to decline jurisdiction on the basis of forum non conveniens.
It noted that (1) the flotilla never "escaped the Fifth Circuit's mare nostrum, and the casualty occurred in close
proximity to the district court"; (2) a considerable number of potential witnesses, including Zapata crewmen, resided
in the Gulf Coast area; (3) preparation for the voyage and inspection and repair work had been performed in the Gulf
area; (4) the testimony of the Bremen crew was available by way of deposition; (5) England had no interest in or
contact with the controversy other than the forum selection clause. The Court of Appeals majority further noted that
Zapata was a United States citizen and "[t]he discretion
Page 407 U. S. 8
of the district court to remand the case to a foreign forum was consequently limited" -- especially since it appeared
likely that the English courts would enforce the exculpatory clauses. [Footnote 8] In the Court of Appeals' view,
enforcement of such clauses would be contrary to public policy in American courts under Bisso v. Inland Waterways
Corp., 349 U. S. 85 (1955), and Dixilyn Drilling Corp. v. Crescent Towing & Salvage Co., 372 U. S. 697 (1963).
Therefore,
"[t]he district court was entitled to consider that remanding Zapata to a foreign forum, with no practical contact with
the controversy, could raise a bar to recovery by a United States citizen which its own convenient courts would not
countenance. [Footnote 9]"
We hold, with the six dissenting members of the Court of Appeals, that far too little weight and effect were given to
the forum clause in resolving this controversy. For at least two decades, we have witnessed an expansion of overseas
commercial activities by business enterprises based in the United States. The barrier of distance that, once tended to
confine a business concern to a modest territory no longer does so. Here we see an American
Page 407 U. S. 9
company with special expertise contracting with a foreign company to tow a complex machine thousands of miles
across seas and oceans. The expansion of American business and industry will hardly be encouraged if,
notwithstanding solemn contracts, we insist on a parochial concept that all disputes must be resolved under our laws
and in our courts. Absent a contract forum, the considerations relied on by the Court of Appeals would be persuasive
reasons for holding an American forum convenient in the traditional sense, but in an era of expanding world trade and
commerce, the absolute aspects of the doctrine of the Carbon Black case have little place, and would be a heavy hand
indeed on the future development of international commercial dealings by Americans. We cannot have trade and

commerce in world markets and international waters exclusively on our terms, governed by our laws, and resolved in
our courts.
Forum selection clauses have historically not been favored by American courts. Many courts, federal and state, have
declined to enforce such clauses on the ground that they were "contrary to public policy," or that their effect was to
"oust the jurisdiction" of the court. [Footnote 10] Although
Page 407 U. S. 10
this view apparently still has considerable acceptance, other courts are tending to adopt a more hospitable attitude
toward forum selection clauses. This view, advanced in the well reasoned dissenting opinion in the instant case, is
that such clauses are prima facie valid, and should be enforced unless enforcement is shown by the resisting party to
be "unreasonable" under the circumstances. [Footnote 11] We believe this is the correct doctrine to be followed by
federal district courts sitting in admiralty. It is merely the other side of the proposition recognized by this Court in
National Equipment Rental, Ltd. v. Szukhent, 375 U. S. 311 (1964), holding that in federal courts a party may validly
consent to be sued in a jurisdiction
Page 407 U. S. 11
where he cannot be found for service of process through contractual designation of an "agent" for receipt of process
in that jurisdiction. In so holding, the Court stated:
"[I]t is settled . . . that parties to a contract may agree in advance to submit to the jurisdiction of a given court, to
permit notice to be served by the opposing party, or even to waive notice altogether."
Id. at 375 U. S. 315-316. This approach is substantially that followed in other common law countries, including
England. [Footnote 12] It is the view advanced by noted scholars, and that adopted by the Restatement of the
Conflict of Laws. [Footnote 13] It accords with ancient concepts of freedom of contract, and reflects an appreciation
of the expanding horizons of American contractors who seek business in all parts of the world. Not surprisingly,
foreign businessmen prefer, as do we, to
Page 407 U. S. 12
have disputes resolved in their own courts, but, if that choice is not available, then in a neutral forum with expertise
in the subject matter. Plainly, the courts of England meet the standards of neutrality and long experience in admiralty
litigation. The choice of that forum was made in an arm's length negotiation by experienced and sophisticated
businessmen, and, absent some compelling and countervailing reason, it should be honored by the parties and
enforced by the courts.
The argument that such clauses are improper because they tend to "oust" a court of jurisdiction is hardly more than a
vestigial legal fiction. It appears to rest at core on historical judicial resistance to any attempt to reduce the power
and business of a particular court, and has little place in an era when all courts are overloaded and when businesses,
once essentially local, now operate in world markets. It reflects something of a provincial attitude regarding the
fairness of other tribunals. No one seriously contends in this case that the forum selection clause "ousted" the District
Court of jurisdiction over Zapata's action. The threshold question is whether that court should have exercised its
jurisdiction to do more than give effect to the legitimate expectations of the parties, manifested in their freely
negotiated agreement, by specifically enforcing the forum clause.
There are compelling reasons why a freely negotiated private international agreement, unaffected by fraud, undue
influence, or overweening bargaining power, [Footnote 14] such
Page 407 U. S. 13
as that involved here, should be given full effect. In this case, for example, we are concerned with a far from routine
transaction between companies of two different nations contemplating the tow of an extremely costly piece of
equipment from Louisiana across the Gulf of Mexico and the Atlantic Ocean, through the Mediterranean Sea to its final
destination in the Adriatic Sea. In the course of its voyage, it was to traverse the waters of many jurisdictions. The
Chaparral could have been damaged at any point along the route, and there were countless possible ports of refuge.
That the accident occurred in the Gulf of Mexico and the barge was towed to Tampa in an emergency were mere
fortuities. It cannot be doubted for a moment that the parties sought to provide for a neutral forum for the resolution
of any disputes arising during the tow. Manifestly, much uncertainty and possibly great inconvenience to both parties
could arise if a suit could be maintained in any jurisdiction in which an accident might occur or if jurisdiction were left
to any place where the Bremen or Unterweser might happen to be found. [Footnote 15] The elimination of all such
uncertainties by agreeing in advance on a forum acceptable to both parties is an indispensable element in
international trade,
Page 407 U. S. 14
commerce, and contracting. There is strong evidence that the forum clause was a vital part of the agreement,
[Footnote 16] and it would be unrealistic to think that the parties did not conduct their negotiations, including fixing
the monetary terms, with the consequences of the forum clause figuring prominently in their calculations. Under these
circumstances, as Justice Karminski reasoned in sustaining jurisdiction over Zapata in the High Court of Justice, "[t]he
force of an agreement for litigation in this country, freely entered into between two competent parties, seems to me
to be very powerful."
Page 407 U. S. 15
Thus, in the light of present-day commercial realities and expanding international trade, we conclude that the forum
clause should control absent a strong showing that it should be set aside. Although their opinions are not altogether
explicit, it seems reasonably clear that the District Court and the Court of Appeals placed the burden on Unterweser to

show that London would be a more convenient forum than Tampa, although the contract expressly resolved that
issue. The correct approach would have been to enforce the forum clause specifically unless Zapata could clearly
show that enforcement would be unreasonable and unjust, or that the clause was invalid for such reasons as fraud or
overreaching. Accordingly, the case must be remanded for reconsideration.
We note, however, that there is nothing in the record presently before us that would support a refusal to enforce the
forum clause. The Court of Appeals suggested that enforcement would be contrary to the public policy of the forum
under Bisso v. Inland Waterways Corp., 349 U. S. 85 (1955), because of the prospect that the English courts would
enforce the clauses of the towage contract purporting to exculpate Unterweser from liability for damages to the
Chaparral. A contractual choice of forum clause should be held unenforceable if enforcement would contravene a
strong public policy of the forum in which suit is brought, whether declared by statute or by judicial decision. See,
e.g., Boyd v. Grand Trunk W. R. Co., 338 U. S. 263 (1949). It is clear, however, that whatever the proper scope of
the policy expressed in Bisso, [Footnote 17] it does not reach this case. Bisso rested on considerations with respect to
the towage business strictly in
Page 407 U. S. 16
American waters, and those considerations are not controlling in an international commercial agreement. Speaking for
the dissenting judges in the Court of Appeals, Judge Wisdom pointed out:
"[W]e should be careful not to over-emphasize the strength of the [Bisso] policy. . . . [T]wo concerns underlie the
rejection of exculpatory agreements: that they may be produced by overweening bargaining power; and that they do
not sufficiently discourage negligence. . . . Here, the conduct in question is that of a foreign party occurring in
international waters outside our jurisdiction. The evidence disputes any notion of overreaching in the contractual
agreement. And, for all we know, the uncertainties and dangers in the new field of transoceanic towage of oil rigs
were so great that the tower was unwilling to take financial responsibility for the risks, and the parties thus allocated
responsibility for the voyage to the tow. It is equally possible that the contract price took this factor into account. I
conclude that we should not invalidate the forum selection clause here unless we are firmly convinced that we would
thereby significantly encourage negligent conduct within the boundaries of the United States."
428 F.2d at 907-908. (Footnotes omitted.)
Courts have also suggested that a forum clause, even though it is freely bargained for and contravenes no important
public policy of the forum, may nevertheless be "unreasonable" and unenforceable if the chosen forum is seriously
inconvenient for the trial of the action. Of course, where it can be said with reasonable assurance that, at the time
they entered the contract, the parties to a freely negotiated private international commercial agreement contemplated
the claimed inconvenience, it is difficult to see why any such claim of inconvenience should be heard to render the
forum clause unenforceable.
Page 407 U. S. 17
We are not here dealing with an agreement between two Americans to resolve their essentially local disputes in a
remote alien forum. In such a case, the serious inconvenience of the contractual forum to one or both of the parties
might carry greater weight in determining the reasonableness of the forum clause. The remoteness of the forum
might suggest that the agreement was an adhesive one, or that the parties did not have the particular controversy in
mind when they made their agreement; yet even there, the party claiming should bear a heavy burden of proof.
[Footnote 18] Similarly, selection of a remote forum to apply differing foreign law to an essentially American
controversy might contravene an important public policy of the forum. For example, so long as Bisso governs
American courts with respect to the towage business in American waters, it would quite arguably be improper to
permit an American tower to avoid that policy by providing a foreign forum for resolution of his disputes with an
American towee.
This case, however, involves a freely negotiated international commercial transaction between a German and an
American corporation for towage of a vessel from the Gulf of Mexico to the Adriatic Sea. As noted, selection of a
London forum was clearly a reasonable effort to bring vital certainty to this international transaction, and to provide a
neutral forum experienced and capable in the resolution of admiralty litigation. Whatever "inconvenience" Zapata
would suffer by being forced to litigate in the contractual forum as it agreed to do was clearly
Page 407 U. S. 18
foreseeable at the time of contracting. In such circumstances, it should be incumbent on the party seeking to escape
his contract to show that trial in the contractual forum will be so gravely difficult and inconvenient that he will, for all
practical purposes, be deprived of his day in court. Absent that, there is no basis for concluding that it would be
unfair, unjust, or unreasonable to hold that party to his bargain.
In the course of its ruling on Unterweser's second motion to stay the proceedings in Tampa, the District Court did
make a conclusory finding that the balance of convenience was "strongly" in favor of litigation in Tampa. However, as
previously noted, in making that finding, the court erroneously placed the burden of proof on Unterweser to show
that the balance of convenience was strongly in its favor. [Footnote 19] Moreover, the finding falls far short of a
conclusion that Zapata would be effectively deprived of its day in court should it be
Page 407 U. S. 19
forced to litigate in London. Indeed, it cannot even be assumed that it would be placed to the expense of transporting
its witnesses to London. It is not unusual for important issues in international admiralty cases to be dealt with by
deposition. Both the District Court and the Court of Appeals majority appeared satisfied that Unterweser could receive
a fair hearing in Tampa by using deposition testimony of its witnesses from distant places, and there is no reason to

conclude that Zapata could not use deposition testimony to equal advantage if forced to litigate in London, as it
bound itself to do. Nevertheless, to allow Zapata opportunity to carry its heavy burden of showing not only that the
balance of convenience is strongly in favor of trial in Tampa (that is, that it will be far more inconvenient for Zapata to
litigate in London than it will be for Unterweser to litigate in Tampa), but also that a London trial will be so manifestly
and gravely inconvenient to Zapata that it will be effectively deprived of a meaningful day in court, we remand for
further proceedings.
Zapata's remaining contentions do not require extended treatment. It is clear that Unterweser's action in filing its
limitation complaint in the District Court in Tampa was, so far as Zapata was concerned, solely a defensive measure
made necessary as a response to Zapata's breach of the forum clause of the contract. When the six-month statutory
period for filing an action to limit its liability had almost run without the District Court's having ruled on Unterweser's
initial motion to dismiss or stay Zapata's action pursuant to the forum clause, Unterweser had no other prudent
alternative but to protect itself by filing for limitation of its liability. [Footnote 20] Its action in so doing was a direct
consequence
Page 407 U. S. 20
of Zapata's failure to abide by the forum clause of the towage contract. There is no basis on which to conclude that
this purely necessary defensive action by Unterweser should preclude it from relying on the forum clause it bargained
for.
For the first time in this litigation, Zapata has suggested to this Court that the forum clause should not be construed
to provide for an exclusive forum or to include in rem actions. However, the language of the clause is clearly
mandatory and all-encompassing; the language of the clause in the Cabon Black case was far different. [Footnote 21]
The judgment of the Court of Appeals is vacated, and the case is remanded for further proceedings consistent with
this opinion.
Vacated and remanded.
[Footnote 1]
Compare, e.g., Central Contraction Co. v. Maryland Casualty Co., 367 F.2d 341 (CA3 1966), and Wm. H. Muller & Co.
v. Swedish American Line Ltd., 224 F.2d 806 (CA2) cert. denied, 350 U.S. 903 (1955), with Carbon Black Export, Inc.
v. The Monrosa, 254 F.2d 297 (CA5 1958), cert. dismissed, 359 U. S. 180 (1959).
[Footnote 2]
The General Towage Conditions of the contract included the following:
"1. . . . [Unterweser and its] masters and crews are not responsible for defaults and/or errors in the navigation of the
tow."
"2. . . ."
"b) Damages suffered by the towed object are in any case for account of its Owners."
In addition, the contract provided that any insurance of the Chaparral was to be "for account of" Zapata. Unterweser's
initial telegraphic bid had also offered to "arrange insurance covering towage risk for rig if desired." As Zapata had
chosen to be self-insured on all its rigs, the loss in this case was not compensated by insurance.
[Footnote 3]
The Bremen was arrested by a United States marshal acting pursuant to Zapata's complaint immediately upon her
arrival in Tampa. The tug was subsequently released when Unterweser furnished security in the amount of
$3,500;000.
[Footnote 4]
Zapata appeared specially and moved to set aside service of process outside the country. Justice Karminski of the
High Court of Justice denied the motion on the ground the contractual choice of forum provision conferred
jurisdiction, and would be enforced absent a factual showing it would not be "fair and right" to do so. He did not
believe Zapata had made such a showing, and held that it should be required to "stick to [its] bargain." App. 206,
211, 213. The Court of Appeal dismissed an appeal on the ground that Justice Karminski had properly applied the
English rule. Lord Justice Willmer stated that rule as follows:
"The law on the subject, I think, is not open to doubt. . . . It is always open to parties to stipulate . . . that a
particular Court shall have jurisdiction over any dispute arising out of their contract. Here, the parties chose to
stipulate that disputes were to be referred to the 'London Court,' which I take as meaning the High Court in this
country. Prima facie, it is the policy of the Court to hold parties to the bargain into which they have entered. . . . But
that is not an inflexible rule, as was shown, for instance, by the case of The Fehmarn, [1957] 1 Lloyd's Rep. 511;
(C.A.) [1957] 2 Lloyd's Rep. 551. . . ."
"I approach the matter, therefore, in this way, that the Court has a discretion, but it is a discretion which, in the
ordinary way and in the absence of strong reason to the contrary, will be exercised in favour of holding parties to
their bargain. The question is whether sufficient circumstances have been shown to exist in this case to make it
desirable, on the grounds of balance of convenience, that proceedings should not take place in this country. . . ."
[1968] 2 Lloyd's Rep. 158, 162-163.
[Footnote 5]
46 U.S.C. 183, 185. See generally G. Gilmore & C. Black, Admiralty 115 (1957).
[Footnote 6]
In its limitation complaint, Unterweser stated it "reserve[d] all rights" under its previous motion to dismiss or stay
Zapata's action, and reasserted that the High Court of Justice was the proper forum for determining the entire

controversy, including its own right to limited liability, in accord with the contractual forum clause. Unterweser later
counterclaimed, setting forth the same contractual cause of action as in its English action and a further cause of
action for salvage arising out of the Bremen's services following the casualty. In its counterclaim, Unterweser again
asserted that the High Court of Justice in London was the proper forum for determining all aspects of the controversy,
including its counterclaim.
[Footnote 7]
The Carbon Black court went on to say that it was, in any event, unnecessary for it to reject the more liberal position
taken in Wm. H. Muller & Co. v. Swedish American Line Ltd., 224 F.2d 806 (CA2), cert. denied, 350 U.S. 903 (1955),
because the case before it had a greater nexus with the United States than that in Muller.
[Footnote 8]
The record contains an undisputed affidavit of a British solicitor stating an opinion that the exculpatory clauses of the
contract would be held "prima facie valid and enforceable" against Zapata in any action maintained in England in
which Zapata alleged that defaults or errors in Unterweser's tow caused the casualty and damage to the Chaparral.
In addition, it is not disputed that, while the limitation fund in the District Court in Tampa amounts to $1,390,000, the
limitation fund in England would be only slightly in excess of $80,000 under English law.
[Footnote 9]
The Court of Appeals also indicated in passing that, even if it took the view that choice of forum clauses were
enforceable unless "unreasonable," it was "doubtful" that enforcement would be proper here, because the exculpatory
clauses would deny Zapata relief to which it was "entitled," and because England was "seriously inconvenient" for trial
of the action.
[Footnote 10]
Many decisions reflecting this view are collected in Annot. 56 A.L.R.2d 300, 306-320 (1957), and Later Case Service
(1967).
For leading early cases, see, e.g., Nute v. Hamilton Mutual Ins. Co., 72 Mass. (6 Gray) 174 (1856); Nashua River
Paper Co. v. Hammermill Paper Co., 223 Mass. 8, 111 N.E. 678 (1916); Benson v. Eastern Bldg. & Loan Assn., 174
N.Y. 83, 66 N.E. 627 (1903).
The early admiralty cases were in accord. See, e.g., Wood & Selick, Inc. v. Compagnie Generale Transatlantique, 43
F.2d 941 (CA2 1930); The Ciano, 58 F.Supp. 65 (ED Pa.1944); Kuhnhold v. Compagnie Generale Transatlantique, 251
F. 387 (SDNY 1918); Prince Steam-Shipping Co. v. Lehman, 39 F. 704 (SDNY 1889).
In Insurance Co. v. Morse, 20 Wall. 445 (1874), this Court broadly stated that "agreements in advance to oust the
courts of the jurisdiction conferred by law are illegal and void." Id. at 87 U. S. 451. But the holding of that case was
only that the State of Wisconsin could not by statute force a foreign corporation to "agree" to surrender its federal
statutory right to remove a state court action to the federal courts as a condition of doing business in Wisconsin.
Thus, the case is properly understood as one in which a state statutory requirement was viewed as imposing an
unconstitutional condition on the exercise of the federal right of removal. See, e.g., Wisconsin v. Philadelphia &
Reading Coal Co., 241 U. S. 329 (1916).
As Judge Hand noted in Krenger v. Pennsylvania R. Co., 174 F.2d 556 (CA2 1949), even at that date, there was, in
fact, no "absolute taboo" against such clauses. See, e.g., Mittenthal v. Mascagni, 183 Mass.19, 66 N.E. 425 (1903);
Daley v. People's Bldg., Loan & Sav. Assn., 178 Mass. 13, 59 N.E. 452 (1901) (Holmes, J.). See also Cerro de Pasco
Copper Corp. v. Knut Knutsen, O.A.S., 187 F.2d 990 (CA2 1951).
[Footnote 11]
E.g., Central Contracting Co. v. Maryland Casualty Co., 367 F.2d 341 (CA3 1966); Anastasiadis U.S.S. Little John, 346
F.2d 281 (CA5 1965) (by implication); Wm. H. Muller & Co. v. Swedish American Line Ltd., 24 F.2d 806 (CA2), cert.
denied;. 350 U.S. 903 (1955); Cerro de Pasco Copper Corp. v. Knut Knutsen, O.A.S., 187 F.2d 990 (CA2 1951);
Central Contracting Co. v. C. E. Youngdahl & Co., 418 Pa. 122, 209 A.2d 810 (1965).
The Muller case was overruled in Indussa Corp. U.S.S. Ranborg, 377 F.2d 200 (CA2 1967), insofar as it held that the
forum clause was not inconsistent with the "lessening of liability" provision of the Carriage of Goods by Sea Act, 46
U.S.C. 1303(8), which was applicable to the transactions in Muller, Indussa, and Carbon Black. That Act is not
applicable in this case.
[Footnote 12]
In addition to the decision of the Court of Appeal in the instant case, Unterweser Reederei G.m.b.H. v. Zapata OffShore Co. [The Chaparral], [1968] 2 Lloyd's Rep. 158 (C.A.), see e.g., Mackender v. Feldia A.G., [1967] 2 Q.B. 590
(C.A.); The Fehmarn, [1958] 1 W.L.R. 159 (C.A.); Law v. Garrett, [1878] 8 Ch.D. 26 (C.A.); The Eleftheria, [1970] P.
94. As indicated by tho clear statements in The Eleftheria and of Lord Justice Willmer in this case, supra, n 4, the
decision of the trial court calls for an exercise of discretion. See generally A. Dicey & J. Morris, The Conflict of Laws
979-980, 1087-1088 (8th ed.1967); Cowen & Mendes da Costa, The Contractual Forum: Situation in England and the
British Commonwealth, 13 Am.J.Comp.Law 179 (1964); Reese, The Contractual Forum: Situation in the United States,
id. at 187, 190 n. 13; Graupner, Contractual Stipulations Conferring Exclusive Jurisdiction Upon Foreign Courts in the
Law of England and Scotland, 59 L.Q.Rev. 227 (1943).
[Footnote 13]
Restatement (Second) of the Conflict of Laws 80 (1971); Reese, The Contractual Forum: Situation in the United
States, 13 Am.J.Comp.Law 187 (1964); A. Ehrenzweig, Conflict of Laws 41 (1962). See also Model Choice of Forum
Act (National Conference of Commissioners on Uniform State Laws 1968).

[Footnote 14]
The record here refutes any notion of overweening bargaining power. Judge Wisdom, dissenting in the Court of
Appeals, noted:
"Zapata has neither presented evidence of nor alleged fraud or undue bargaining power in the agreement.
Unterweser was only one of several companies bidding on the project. No evidence contradicts its Managing Director's
affidavit that it specified English courts 'in an effort to meet Zapata Off-Shore Company half way.' Zapata's Vice
President has declared by affidavit that no specific negotiations concerning the forum clause took place. But this was
not simply a form contract with boilerplate language that Zapata had no power to alter. The towing of an oil rig across
the Atlantic was a new business. Zapata did make alterations to the contract submitted by Unterweser. The forum
clause could hardly be ignored. It is the final sentence of the agreement, immediately preceding the date and the
parties' signatures. . . ."
428 F.2d 888, 907.
[Footnote 15]
At the very least, the clause was an effort to eliminate all uncertainty as to the nature, location, and outlook of the
forum in which these companies of differing nationalities might find themselves. Moreover, while the contract here did
not specifically provide that the substantive law of England should be applied, it is the general rule in English courts
that the parties are assumed, absent contrary indication, to have designated the forum with the view that it should
apply its own law. See, e.g., Tzortzis v. Monark Line A/B, [1968] 1 W.L.R. 406 (C.A.); see generally 1 T. Carver,
Carriage by Sea 496-497 (12th ed.1971); G. Cheshire, Private International Law 193 (7th ed.1965); A. Dicey & J.
Morris, The Conflict of Laws 705, 1046 (8th ed.1967); Collins, Arbitration Clauses and Forum Selecting Clauses in the
Conflict of Laws: Some Recent Developments in England, 2 J.Mar.L. & Comm. 363, 365-370 and n. 7 (1971). It is
therefore reasonable to conclude that the forum clause was also an effort to obtain certainty as to the applicable
substantive law.
The record contains an affidavit of a Managing Director of Unterweser stating that Unterweser considered the choice
of forum provision to be of "overriding importance" to the transaction. He stated that Unterweser towage contracts
ordinarily provide for exclusive German jurisdiction and application of German law, but that, "[i]n this instance, in an
effort to meet [Zapata] half-way, [Unterweser] proposed the London Court of Justice. Had this provision not been
accepted by [Zapata], [Unterweser] would not have entered into the towage contract. . . ."
He also stated that the parties intended, by designating the London forum, that English law would be applied. A
responsive affidavit by Hoyt Taylor, a vice-president of Zapata, denied that there were any discussions between
Zapata and Unterweser concerning the forum clause or the question of the applicable law.
[Footnote 16]
See nn. 14-15 supra. Zapata has denied specifically discussing the forum clause with Unterweser, but, as Judge
Wisdom pointed out, Zapata made numerous changes in the contract without altering the forum clause, which could
hardly have escaped its attention. Zapata is clearly not unsophisticated in such matters. The contract of its wholly
owned subsidiary with an Italian corporation covering the contemplated drilling operations in the Adriatic Sea provided
that all disputes were to be settled by arbitration in London under English law, and contained broad exculpatory
clauses. App. 306-311.
[Footnote 17]
Dixilyn Drilling Corp. v. Crescent Towing & Salvage Co., 372 U. S. 697 (1963) (per curiam), merely followed Bisso and
declined to subject its rule governing towage contracts in American waters to "indeterminate exceptions" based on
delicate analysis of the facts of each case. See 372 U.S. at 372 U. S. 698 (Harlan, J., concurring).
[Footnote 18]
See, e.g., Model Choice of Forum Act 3(3), supra, n 13, comment:
"On rare occasions, the state of the forum may be a substantially more convenient place for the trial of a particular
controversy than the chosen state. If so, the present clause would permit the action to proceed. This result will
presumably be in accord with the desires of the parties. It can be assumed that they did not have the particular
controversy in mind when they made the choice of forum agreement, since they would not consciously have agreed
to have the action brought in an inconvenient place."
[Footnote 19]
Applying the proper burden of proof, Justice Karminski, in the High Court of Justice at London, made the following
findings, which appear to have substantial support in the record:
"[Zapata] pointed out that in this case the balance of convenience so far as witnesses were concerned pointed in the
direction of having the case heard and tried in the United States District Court at Tampa in Florida because the
probability is that most, but not necessarily all, of the witnesses will be American. The answer, as it seems to me, is
that a substantial minority, at least, of witnesses are likely to be German. The tug was a German vessel, and was, as
far as I know, manned by a German crew. . . . Where they all are now or are likely to be when this matter is litigated
I do not know, because the experience of the Admiralty Court here strongly points out that maritime witnesses, in the
course of their duties, move about freely. The homes of the German crew presumably are in Germany. There is
probably a balance of numbers in favour of the Americans, but not, as I am inclined to think, a very heavy balance."
App. 212. It should also be noted that, if the exculpatory clause is enforced in the English courts, many of Zapata's
witnesses on the questions of negligence and damage may be completely unnecessary.
[Footnote 20]

Zapata has suggested that Unterweser was not in any way required to file its "affirmative" limitation complaint,
because it could just as easily have pleaded limitation of liability by way of defense in Zapata's initial action, either
before or after the six-month period. That course of action was not without risk, however, that Unterweser's attempt
to limit its liability by answer would be held invalid. See G. Gilmore & C. Black, Admiralty 115 (1957). We do not
believe this hazardous option in any way deprived Unterweser's limitation complaint of its essentially defensive
character so far as Zapata was concerned.
[Footnote 21]
See 359 U.S. at 359 U. S. 182.
MR. JUSTICE WHITE, concurring.
I concur in the opinion and judgment of the Court except insofar as the opinion comments on the issues which are
remanded to the District Court. In my view, these issues are best left for consideration by the District Court in the first
instance.
MR. JUSTICE DOUGLAS, dissenting.
Petitioner Unterweser contracted with respondent to tow respondent's drilling barge from Louisiana to Italy. The
towage contract contained a "forum selection clause"
Page 407 U. S. 21
providing that any dispute must be litigated before the High Court of Justice in London, England. While the barge was
being towed in the Gulf of Mexico, a casualty was suffered. The tow made for Tampa Bay, he nearest port, where
respondent brought suit for damages in the District Court.
Petitioners sued respondent in the High Court of Justice in London, which denied respondent's motion to dismiss.
Petitioners, having previously moved the District Court to dismiss, filed a complaint in that court seeking exoneration
or limitation of liability as provided in 46 U.S.C. 185. Respondent filed its claim in the limitation proceedings,
asserting the same cause of action as in its original action. Petitioners then filed objections to respondent's claim and
counterclaimed against respondent, alleging the same claims embodied in its English action, plus an additional
salvage claim.
Respondent moved for an injunction against petitioners' litigating further in the English case, and the District Court
granted the injunction pending determination of the limitation action. Petitioners moved to stay their own limitation
proceeding pending a resolution of the suit in the English court. That motion was denied. 296 F.Supp. 733.
That was the posture of the case as it reached the Court of Appeals, petitioners appealing from the last two orders.
The Court of Appeals affirmed. 428 F.2d 888, 446 F.2d 907.
Chief Justice Taft, in Hartford Accident Co. v. Southern Pacific, 273 U. S. 207, 273 U. S. 214, in discussing the
Limitation of Liability Act, said that
"the great object of the statute was to encourage shipbuilding, and to induce the investment of money in this branch
of industry, by limiting the venture of those who build the ship to the loss of the ship itself or her freight then
pending, in cases of damage or wrong, happening without the privity or
Page 407 U. S. 22
knowledge of the ship owner, and by the fault or neglect of the master or other persons on board; that the origin of
this proceeding for limitation of liability is to be found in the general maritime law, differing from the English maritime
law; and that such a proceeding is entirely within the constitutional grant of power to Congress to establish courts of
admiralty and maritime jurisdiction."
Chief Justice Taft went on to describe how the owner of a vessel who, in case the vessel is found at fault, may limit
his liability to the value of the vessel and may bring all claimants "into concourse in the proceeding, by monition," and
they may be enjoined from suing the owner and the vessel on such claims in any other court. Id. at 273 U. S. 215.
Chief Justice Taft concluded:
"[T]his Court has, by its rules and decisions, given the statute a very broad and equitable construction for the purpose
of carrying out its purpose and for facilitating a settlement of the whole controversy over such losses as are
comprehended within it, and that all the ease with which rights can be adjusted in equity is intended to be given to
the proceeding. It is the administration of equity in an admiralty court. . . . The proceeding partakes in a way of the
features of a bill to enjoin a multiplicity of suits, a bill in the nature of an interpleader, and a creditor's bill. It looks to
a complete and just disposition of a many-cornered controversy, and is applicable to proceedings in rem against the
ship, as well as to proceedings in personam against the owner, the limitation extending to the owner's property as
well as to his person."
Id. at 273 U. S. 215-216.
The Limitation Court is a court of equity, and, traditionally, an equity court may enjoin litigation in another court
where equitable considerations indicate that the other litigation might prejudice the proceedings in the Limitation
Court. Petitioners' petition for limitation
Page 407 U. S. 23
subjects them to the full equitable powers of the Limitation Court.
Respondent is a citizen of this country. Moreover, if it were remitted to the English court, its substantive rights would
be adversely affected. Exculpatory provisions in the towage control provide (1) that petitioners, the masters and the
crews "are not responsible for defaults and/or errors in the navigation of the tow" and (2) that "[d]amages suffered
by the towed object are in any case for account of its Owners."

Under our decision in Dixilyn Drilling Corp v. Crescent Towing & Salvage Co., 372 U. S. 697, 372 U. S. 698, "a contract
which exempts the tower from liability for its own negligence" is not enforceable, though there is evidence in the
present record that it is enforceable in England. That policy was first announced in Bisso v. Inland Waterways Corp.,
349 U. S. 85, and followed in Boston Metals Co. v. The Winding Gulf, 349 U. S. 122; Dixilyn, supra; Gray v.
Johanesson, 287 F.2d 852 (CA5); California Co. v. Jumonville, 327 F.2d 988 (CA5); American S.S. Co. v. Great Lakes
Towing Co., 333 F.2d 426 (CA7); D. R. Kincaid, Ltd. v. Trans-Pacific Towing, Inc., 367 F.2d 857 (CA9); A. L. Mechling
Barge Lines, Inc. v. Derby Co., 399 F.2d 304 (CA5). Cf. United States v. Seckinger, 397 U. S. 203. Although the
casualty occurred on the high seas, the Bisso doctrine is nonetheless applicable. The Scotland, 105 U. S. 24; The
Belgenland, 114 U. S. 355; The Gylfe v. The Trujillo, 209 F.2d 386 (CA2).
Moreover, the casualty occurred close to the District Court, a number of potential witnesses, including respondent's
crewmen, reside in that area, and the inspection and repair work were done there. The testimony of the tower's
crewmen, residing in Germany, is already available by way of depositions taken in the proceedings.
Page 407 U. S. 24
All in all, the District Court judge exercised his discretion wisely in enjoining petitioners from pursuing the litigation in
England. *
I would affirm the judgment below.
* It is said that, because these parties specifically agreed to litigate their disputes before the London Court of Justice,
the District Court, absent "unreasonable" circumstances, should have honored that choice by declining to exercise its
jurisdiction. The forum selection clause, however, is part and parcel of the exculpatory provision in the towing
agreement which, as mentioned in the text, is not enforceable in American courts. For only by avoiding litigation in
the United States could petitioners hope to evade the Bisso doctrine.
Judges in this country have traditionally been hostile to attempts to circumvent the public policy against exculpatory
agreements. For example, clauses specifying that the law of a foreign place (which favors such releases) should
control have regularly been ignored. Thus, in The Kensington, 183 U. S. 263, 183 U. S. 276, the Court held void an
exemption from liability despite the fact that the contract provided that it should be construed under Belgian law,
which was more tolerant. And see E. Gerli & Co. v. Cunard S.S. Co., 48 F.2d 115, 117 (CA2);Oceanic Steam Nav. Co.
v. Corcoran, 9 F.2d 724, 731 (CA2); In re Lea Fabrics, Inc., 226 F.Supp. 232, 237 (NJ); F. A. Straus & Co. v. Canadian
P. R. Co., 254 N.Y. 407, 173 N.E. 564; Siegelman v. Cunard White Star, 221 F.2d 189, 199 (CA2) (Frank, J.,
dissenting). 6A A. Corbin on Contracts 1446 (1962).
The instant stratagem of specifying a foreign forum is essentially the same as invoking a foreign law of construction,
except that the present circumvention also requires the American party to travel across an ocean to seek relief. Unless
we are prepared to overrule Bisso, we should not countenance devices designed solely for the purpose of evading its
prohibition.
It is argued, however, that one of the rationales of the Bisso doctrine, "to protect those in need of goods or services
from being overreached by others who have power to drive hard bargains" (349 U.S. at 349 U. S. 91), does not apply
here, because these parties may have been of equal bargaining stature. Yet we have often adopted prophylactic rules
rather than attempt to sort the core cases from the marginal ones. In any event, the other objective of the Bisso
doctrine, to "discourage negligence by making wrongdoers pay damages" (ibid.) applies here and in every case,
regardless of the relative bargaining strengths of the parties.

BURGER KING CORP. v. RUDZEWICZ

BURGER KING CORPORATION, Appellant v. John RUDZEWICZ.
471 U.S. 462 (105 S.Ct. 2174, 85 L.Ed.2d 528)
BURGER KING CORPORATION, Appellant v. John RUDZEWICZ.
No. 83-2097.
Argued: Jan. 8, 1985.
Decided: May 20, 1985.
Opinion, BRENNAN [HTML]
Dissent, STEVENS, WHITE [HTML]
Syllabus
Appellant is a Florida corporation whose principal offices are in Miami. It conducts most of its restaurant business
through a franchise operation, under which franchisees are licensed to use appellant's trademarks and service marks
in leased standardized restaurant facilities for a period of 20 years. The governing contracts provide that the franchise
relationship is established in Miami and governed by Florida law, and call for payment of all required monthly fees and
forwarding of all relevant notices to the Miami headquarters. The Miami headquarters sets policy and works directly
with the franchisees in attempting to resolve major problems. Day-to-day monitoring of franchisees, however, is
conducted through district offices that in turn report to the Miami headquarters. Appellee is a Michigan resident who,
along with another Michigan resident, entered into a 20-year franchise contract with appellant to operate a restaurant
in Michigan. Subsequently, when the restaurant's patronage declined, the franchisees fell behind in their monthly
payments. After extended negotiations among the franchisees, the Michigan district office, and the Miami
headquarters proved unsuccessful in solving the problem, headquarters terminated the franchise and ordered the
franchisees to vacate the premises. They refused and continued to operate the restaurant. Appellant then brought a
diversity action in Federal District Court in Florida, alleging that the franchisees had breached their franchise
obligations and requesting damages and injunctive relief. The franchisees claimed that, because they were Michigan
residents and because appellant's claim did not "arise" within Florida, the District Court lacked personal jurisdiction
over them. But the court held that the franchisees were subject to personal jurisdiction pursuant to Florida's long-arm
statute, which extends jurisdiction to any person, whether or not a citizen or resident of the State, who breaches a
contract in the State by failing to perform acts that the contract requires to be performed there. Thereafter, the court
entered judgment against the franchisees on the merits. The Court of Appeals reversed, holding that "jurisdiction
under these circumstances would offend the fundamental fairness which is the touchstone of due process."
Held: The District Court's exercise of jurisdiction pursuant to Florida's long-arm statute did not violate the Due Process
Clause of the Fourteenth Amendment. Pp. 471-487.
(a) A forum may assert specific jurisdiction over a nonresident defendant where an alleged injury arises out of or
relates to actions by the defendant himself that are purposefully directed toward forum residents, and where
jurisdiction would not otherwise offend "fair play and substantial justice." Jurisdiction in these circumstances may not
be avoided merely because the defendant did not physically enter the forum. Pp. 471-478.
(b) An individual's contract with an out-of-state party cannot alone automatically establish sufficient minimum
contacts in the other party's home forum. Instead, the prior negotiations and contemplated future consequences,
along with the terms of the contract and the parties' actual course of dealing, must be evaluated to determine
whether a defendant purposefully established minimum contacts within the forum. Pp. 478-479.
(c) Here, appellee established a substantial and continuing relationship with appellant's Miami headquarters, and
received fair notice from the contract documents and the course of dealings that he might be subject to suit in
Florida. The District Court found that appellee is an "experienced and sophisticated" businessman who did not act
under economic duress or disadvantage imposed by appellant, and appellee has pointed to no other factors that
would establish the unconstitutionality of Florida's assertion of jurisdiction. Pp. 479-487.
724 F.2d 1505 (CA11 1984), reversed and remanded.
Joel S. Perwin, Miami, Fla., for appellant.

Thomas H. Oehmke, Detroit, Mich., for appellee.

TOP
Justice BRENNAN delivered the opinion of the Court.
The State of Florida's long-arm statute extends jurisdiction to "any person, whether or not a citizen or resident of this
state," who, inter alia, "breaches a contract in this state by failing to perform acts required by the contract to be
performed in this state," so long as the cause of action arises from the alleged contractual breach. Fla.Stat.
48.193(1)(g) (Supp.1984). The United States District Court for the Southern District of Florida, sitting in diversity,
relied on this provision in exercising personal jurisdiction over a Michigan resident who allegedly had breached a
franchise agreement with a Florida corporation by failing to make required payments in Florida. The question
presented is whether this exercise of long-arm jurisdiction offended "traditional conceptions of fair play and
substantial justice" embodied in the Due Process Clause of the Fourteenth Amendment. International Shoe Co. v.
Washington, 326 U.S. 310, 320, 66 S.Ct. 154, 160, 90 L.Ed. 95 (1945).
* A.
Burger King Corporation is a Florida corporation whose principal offices are in Miami. It is one of the world's largest
restaurant organizations, with over 3,000 outlets in the 50 States, the Commonwealth of Puerto Rico, and 8 foreign
nations. Burger King conducts approximately 80% of its business through a franchise operation that the company
styles the "Burger King System""a comprehensive restaurant format and operating system for the sale of uniform
and quality food products." App. 46. 1 Burger King licenses its franchisees to use its trademarks and service marks for
a period of 20 years and leases standardized restaurant facilities to them for the same term. In addition, franchisees
acquire a variety of proprietary information concerning the "standards, specifications, procedures and methods for
operating a Burger King Restaurant." Id., at 52. They also receive market research and advertising assistance;
ongoing training in restaurant management; 2 and accounting, cost-control, and inventory-control guidance. By
permitting franchisees to tap into Burger King's established national reputation and to benefit from proven procedures
for dispensing standardized fare, this system enables them to go into the restaurant business with significantly
lowered barriers to entry. 3
In exchange for these benefits, franchisees pay Burger King an initial $40,000 franchise fee and commit themselves to
payment of monthly royalties, advertising and sales promotion fees, and rent computed in part from monthly gross
sales. Franchisees also agree to submit to the national organization's exacting regulation of virtually every conceivable
aspect of their operations. 4 Burger King imposes these standards and undertakes its rigid regulation out of conviction
that "uniformity of service, appearance, and quality of product is essential to the preservation of the Burger King
image and the benefits accruing therefrom to both Franchisee and Franchisor." Id., at 31.
Burger King oversees its franchise system through a two-tiered administrative structure. The governing contracts
provide that the franchise relationship is established in Miami and governed by Florida law, and call for payment of all
required fees and forwarding of all relevant notices to the Miami headquarters. 5 The Miami headquarters sets policy
and works directly with its franchisees in attempting to resolve major problems. See nn. 7, 9, infra. Day-to-day
monitoring of franchisees, however, is conducted through a network of 10 district offices which in turn report to the
Miami headquarters.
The instant litigation grows out of Burger King's termination of one of its franchisees, and is aptly described by the
franchisee as "a divorce proceeding among commercial partners." 5 Record 4. The appellee John Rudzewicz, a
Michigan citizen and resident, is the senior partner in a Detroit accounting firm. In 1978, he was approached by Brian
MacShara, the son of a business acquaintance, who suggested that they jointly apply to Burger King for a franchise in
the Detroit area. MacShara proposed to serve as the manager of the restaurant if Rudzewicz would put up the
investment capital; in exchange, the two would evenly share the profits. Believing that MacShara's idea offered
attractive investment and tax-deferral opportunities, Rudzewicz agreed to the venture. 6 id., at 438-439, 444, 460.
Rudzewicz and MacShara jointly applied for a franchise to Burger King's Birmingham, Michigan, district office in the
autumn of 1978. Their application was forwarded to Burger King's Miami headquarters, which entered into a
preliminary agreement with them in February 1979. During the ensuing four months it was agreed that Rudzewicz
and MacShara would assume operation of an existing facility in Drayton Plains, Michigan. MacShara attended the
prescribed management courses in Miami during this period, see n. 2, supra, and the franchisees purchased $165,000
worth of restaurant equipment from Burger King's Davmor Industries division in Miami. Even before the final
agreements were signed, however, the parties began to disagree over site-development fees, building design,
computation of monthly rent, and whether the franchisees would be able to assign their liabilities to a corporation
they had formed. 6 During these disputes Rudzewicz and MacShara negotiated both with the Birmingham district
office and with the Miami headquarters. 7 With some misgivings, Rudzewicz and MacShara finally obtained limited

concessions from the Miami headquarters, 8 signed the final agreements, and commenced operations in June 1979.
By signing the final agreements, Rudzewicz obligated himself personally to payments exceeding $1 million over the
20-year franchise relationship.
The Drayton Plains facility apparently enjoyed steady business during the summer of 1979, but patronage declined
after a recession began later that year. Rudzewicz and MacShara soon fell far behind in their monthly payments to
Miami. Headquarters sent notices of default, and an extended period of negotiations began among the franchisees,
the Birmingham district office, and the Miami headquarters. After several Burger King officials in Miami had engaged
in prolonged but ultimately unsuccessful negotiations with the franchisees by mail and by telephone, 9 headquarters
terminated the franchise and ordered Rudzewicz and MacShara to vacate the premises. They refused and continued
to occupy and operate the facility as a Burger King restaurant.
B
Burger King commenced the instant action in the United States District Court for the Southern District of Florida in
May 1981, invoking that court's diversity jurisdiction pursuant to 28 U.S.C. 1332(a) and its original jurisdiction over
federal trademark disputes pursuant to 1338(a). 10 Burger King alleged that Rudzewicz and MacShara had
breached their franchise obligations "within the jurisdiction of this district court" by failing to make the required
payments "at plaintiff's place of business in Miami, Dade County, Florida," 6, App. 121, and also charged that they
were tortiously infringing its trademarks and service marks through their continued, unauthorized operation as a
Burger King restaurant, &Par; 35-53, App. 130-135. Burger King sought damages, injunctive relief, and costs and
attorney's fees. Rudzewicz and MacShara entered special appearances and argued, inter alia, that because they were
Michigan residents and because Burger King's claim did not "arise" within the Southern District of Florida, the District
Court lacked personal jurisdiction over them. The District Court denied their motions after a hearing, holding that,
pursuant to Florida's long-arm statute, "a non-resident Burger King franchisee is subject to the personal jurisdiction of
this Court in actions arising out of its franchise agreements." Id., at 138. Rudzewicz and MacShara then filed an
answer and a counterclaim seeking damages for alleged violations by Burger King of Michigan's Franchise Investment
Law, Mich.Comp.Laws 445.1501 et seq. (1979).
After a 3-day bench trial, the court again concluded that it had "jurisdiction over the subject matter and the parties to
this cause." App. 159. Finding that Rudzewicz and MacShara had breached their franchise agreements with Burger
King and had infringed Burger King's trademarks and service marks, the court entered judgment against them, jointly
and severally, for $228,875 in contract damages. The court also ordered them "to immediately close Burger King
Restaurant Number 775 from continued operation or to immediately give the keys and possession of said restaurant
to Burger King Corporation," id., at 163, found that they had failed to prove any of the required elements of their
counterclaim, and awarded costs and attorney's fees to Burger King.
Rudzewicz appealed to the Court of Appeals for the Eleventh Circuit. 11 A divided panel of that Circuit reversed the
judgment, concluding that the District Court could not properly exercise personal jurisdiction over Rudzewicz pursuant
to Fla.Stat. 48.193(1)(g) (Supp.1984) because "the circumstances of the Drayton Plains franchise and the
negotiations which led to it left Rudzewicz bereft of reasonable notice and financially unprepared for the prospect of
franchise litigation in Florida." Burger King Corp. v. MacShara, 724 F.2d 1505, 1513 (1984). Accordingly, the panel
majority concluded that "jurisdiction under these circumstances would offend the fundamental fairness which is the
touchstone of due process." Ibid.
Burger King appealed the Eleventh Circuit's judgment to this Court pursuant to 28 U.S.C. 1254(2), and we postponed
probable jurisdiction. 469 U.S. 814, 105 S.Ct. 77, 83 L.Ed.2d 25 (1984). Because it is unclear whether the Eleventh
Circuit actually held that Fla.Stat. 48.193(1)(g) (Supp.1984) itself is unconstitutional as applied to the circumstances
of this case, we conclude that jurisdiction by appeal does not properly lie and therefore dismiss the appeal. 12
Treating the jurisdictional statement as a petition for a writ of certiorari, see 28 U.S.C. 2103, we grant the petition
and now reverse.
II
The Due Process Clause protects an individual's liberty interest in not being subject to the binding judgments of a
forum with which he has established no meaningful "contacts, ties, or relations." International Shoe Co. v.
Washington, 326 U.S., at 319, 66 S.Ct., at 160. 13 By requiring that individuals have "fair warning that a particular
activity may subject them to the jurisdiction of a foreign sovereign," Shaffer v. Heitner, 433 U.S. 186, 218, 97 S.Ct.
2569, 2587, 53 L.Ed.2d 683 (1977) (STEVENS, J., concurring in judgment), the Due Process Clause "gives a degree of
predictability to the legal system that allows potential defendants to structure their primary conduct with some
minimum assurance as to where that conduct will and will not render them liable to suit," World-Wide Volkswagen
Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 567, 62 L.Ed.2d 490 (1980).

Where a forum seeks to assert specific jurisdiction over an out-of-state defendant who has not consented to suit
there, 14 this "fair warning" requirement is satisfied if the defendant has "purposefully directed" his activities at
residents of the forum, Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 774, 104 S.Ct. 1473, 1478, 79 L.Ed.2d 790
(1984), and the litigation results from alleged injuries that "arise out of or relate to" those activities, Helicopteros
Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414, 104 S.Ct. 1868, 1872, 80 L.Ed.2d 404 (1984). 15 Thus "the
forum State does not exceed its powers under the Due Process Clause if it asserts personal jurisdiction over a
corporation that delivers its products into the stream of commerce with the expectation that they will be purchased by
consumers in the forum State" and those products subsequently injure forum consumers. World-Wide Volkswagen
Corp. v. Woodson, supra, 444 U.S., at 297-298, 100 S.Ct., at 567-568. Similarly, a publisher who distributes
magazines in a distant State may fairly be held accountable in that forum for damages resulting there from an
allegedly defamatory story. Keeton v. Hustler Magazine, Inc., supra; see also Calder v. Jones, 465 U.S. 783, 104 S.Ct.
1482, 79 L.Ed.2d 804 (1984) (suit against author and editor). And with respect to interstate contractual obligations,
we have emphasized that parties who "reach out beyond one state and create continuing relationships and obligations
with citizens of another state" are subject to regulation and sanctions in the other State for the consequences of their
activities. Travelers Health Assn. v. Virginia, 339 U.S. 643, 647, 70 S.Ct. 927, 929, 94 L.Ed. 1154 (1950). See also
McGee v. International Life Insurance Co., 355 U.S. 220, 222-223, 78 S.Ct. 199, 200-201, 2 L.Ed.2d 223 (1957).
We have noted several reasons why a forum legitimately may exercise personal jurisdiction over a nonresident who
"purposefully directs" his activities toward forum residents. A State generally has a "manifest interest" in providing its
residents with a convenient forum for redressing injuries inflicted by out-of-state actors. Id., at 223, 78 S.Ct., at 201;
see also Keeton v. Hustler Magazine, Inc., supra, 465 U.S., at 776, 104 S.Ct., at 1479. Moreover, where individuals
"purposefully derive benefit" from their interstate activities, Kulko v. California Superior Court, 436 U.S. 84, 96, 98
S.Ct. 1690, 1699, 56 L.Ed.2d 132 (1978), it may well be unfair to allow them to escape having to account in other
States for consequences that arise proximately from such activities; the Due Process Clause may not readily be
wielded as a territorial shield to avoid interstate obligations that have been voluntarily assumed. And because
"modern transportation and communications have made it much less burdensome for a party sued to defend himself
in a State where he engages in economic activity," it usually will not be unfair to subject him to the burdens of
litigating in another forum for disputes relating to such activity. McGee v. International Life Insurance Co., supra, 355
U.S., at 223, 78 S.Ct., at 201.
Notwithstanding these considerations, the constitutional touchstone remains whether the defendant purposefully
established "minimum contacts" in the forum State. International Shoe Co. v. Washington, supra, 326 U.S., at 316, 66
S.Ct., at 158. Although it has been argued that foreseeability of causing injury in another State should be sufficient to
establish such contacts there when policy considerations so require, 16 the Court has consistently held that this kind
of foreseeability is not a "sufficient benchmark" for exercising personal jurisdiction. World-Wide Volkswagen Corp. v.
Woodson, 444 U.S., at 295, 100 S.Ct., at 566. Instead, "the foreseeability that is critical to due process analysis . . . is
that the defendant's conduct and connection with the forum State are such that he should reasonably anticipate being
haled into court there." Id., at 297, 100 S.Ct., at 567. In defining when it is that a potential defendant should
"reasonably anticipate" out-of-state litigation, the Court frequently has drawn from the reasoning of Hanson v.
Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1239-1240, 2 L.Ed.2d 1283 (1958):
"The unilateral activity of those who claim some relationship with a nonresident defendant cannot satisfy the
requirement of contact with the forum State. The application of that rule will vary with the quality and nature of the
defendant's activity, but it is essential in each case that there be some act by which the defendant purposefully avails
itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its
laws."
This "purposeful availment" requirement ensures that a defendant will not be haled into a jurisdiction solely as a
result of "random," "fortuitous," or "attenuated" contacts, Keeton v. Hustler Magazine, Inc., 465 U.S., at 774, 104
S.Ct., at 1478; World-Wide Volkswagen Corp. v. Woodson, supra, 444 U.S., at 299, 100 S.Ct., at 568, or of the
"unilateral activity of another party or a third person," Helicopteros Nacionales de Colombia, S.A. v. Hall, supra, 466
U.S., at 417, 104 S.Ct., at 1873. 17 Jurisdiction is proper, however, where the contacts proximately result from
actions by the defendant himself that create a "substantial connection" with the forum State. McGee v. International
Life Insurance Co., supra, 355 U.S., at 223, 78 S.Ct., at 201; see also Kulko v. California Superior Court, supra, 436
U.S., at 94, n. 7, 98 S.Ct., at 1698, n. 7. 18 Thus where the defendant "deliberately" has engaged in significant
activities within a State, Keeton v. Hustler Magazine, Inc., supra, 465 U.S., at 781, 104 S.Ct., at 1481, or has created
"continuing obligations" between himself and residents of the forum, Travelers Health Assn. v. Virginia, 339 U.S., at
648, 70 S.Ct., at 929, he manifestly has availed himself of the privilege of conducting business there, and because his
activities are shielded by "the benefits and protections" of the forum's laws it is presumptively not unreasonable to
require him to submit to the burdens of litigation in that forum as well.
Jurisdiction in these circumstances may not be avoided merely because the defendant did not physically enter the
forum State. Although territorial presence frequently will enhance a potential defendant's affiliation with a State and

reinforce the reasonable foreseeability of suit there, it is an inescapable fact of modern commercial life that a
substantial amount of business is transacted solely by mail and wire communications across state lines, thus obviating
the need for physical presence within a State in which business is conducted. So long as a commercial actor's efforts
are "purposefully directed" toward residents of another State, we have consistently rejected the notion that an
absence of physical contacts can defeat personal jurisdiction there. Keeton v. Hustler Magazine, Inc., supra, 465 U.S.,
at 774-775, 104 S.Ct., at 1478; see also Calder v. Jones, 465 U.S., at 778-790, 104 S.Ct., at 1486-1487; McGee v.
International Life Insurance Co., 355 U.S., at 222-223, 78 S.Ct., at 200-201. Cf. Hoopeston Canning Co. v. Cullen, 318
U.S. 313, 317, 63 S.Ct. 602, 605, 87 L.Ed. 777 (1943).
Once it has been decided that a defendant purposefully established minimum contacts within the forum State, these
contacts may be considered in light of other factors to determine whether the assertion of personal jurisdiction would
comport with "fair play and substantial justice." International Shoe Co. v. Washington, 326 U.S., at 320, 66 S.Ct., at
160. Thus courts in "appropriate cases" may evaluate "the burden on the defendant," "the forum State's interest in
adjudicating the dispute," "the plaintiff's interest in obtaining convenient and effective relief," "the interstate judicial
system's interest in obtaining the most efficient resolution of controversies," and the "shared interest of the several
States in furthering fundamental substantive social policies." World-Wide Volkswagen Corp. v. Woodson, supra, 444
U.S., at 292, 100 S.Ct., at 564. These considerations sometimes serve to establish the reasonableness of jurisdiction
upon a lesser showing of minimum contacts than would otherwise be required. See, e.g., Keeton v. Hustler Magazine,
Inc., supra, 465 U.S., at 780, 104 S.Ct., at 1481; Calder v. Jones, supra, 465 U.S., at 788-789, 104 S.Ct., at 14861487; McGee v. International Life Insurance Co., supra, 355 U.S., at 223-224, 78 S.Ct., at 201-202. On the other
hand, where a defendant who purposefully has directed his activities at forum residents seeks to defeat jurisdiction,
he must present a compelling case that the presence of some other considerations would render jurisdiction
unreasonable. Most such considerations usually may be accommodated through means short of finding jurisdiction
unconstitutional. For example, the potential clash of the forum's law with the "fundamental substantive social policies"
of another State may be accommodated through application of the forum's choice-of-law rules. 19 Similarly, a
defendant claiming substantial inconvenience may seek a change of venue. 20 Nevertheless, minimum requirements
inherent in the concept of "fair play and substantial justice" may defeat the reasonableness of jurisdiction even if the
defendant has purposefully engaged in forum activities. World-Wide Volkswagen Corp. v. Woodson, supra, 444 U.S.,
at 292, 100 S.Ct., at 564; see also Restatement (Second) of Conflict of Laws 36-37 (1971). As we previously have
noted, jurisdictional rules may not be employed in such a way as to make litigation "so gravely difficult and
inconvenient" that a party unfairly is at a "severe disadvantage" in comparison to his opponent. The Bremen v. Zapata
Off-Shore Co., 407 U.S. 1, 18, 92 S.Ct. 1907, 1917, 32 L.Ed.2d 513 (1972) (re forum-selection provisions); McGee v.
International Life Insurance Co., supra, 355 U.S., at 223-224, 78 S.Ct., at 201-202.
B
(1)
Applying these principles to the case at hand, we believe there is substantial record evidence supporting the District
Court's conclusion that the assertion of personal jurisdiction over Rudzewicz in Florida for the alleged breach of his
franchise agreement did not offend due process. At the outset, we note a continued division among lower courts
respecting whether and to what extent a contract can constitute a "contact" for purposes of due process analysis. 21
If the question is whether an individual's contract with an out-of-state party alone can automatically establish
sufficient minimum contacts in the other party's home forum, we believe the answer clearly is that it cannot. The
Court long ago rejected the notion that personal jurisdiction might turn on "mechanical" tests, International Shoe Co.
v. Washington, supra, 326 U.S., at 319, 66 S.Ct., at 159, or on "conceptualistic . . . theories of the place of
contracting or of performance," Hoopeston Canning Co. v. Cullen, 318 U.S., at 316, 63 S.Ct., at 604. Instead, we have
emphasized the need for a "highly realistic" approach that recognizes that a "contract" is "ordinarily but an
intermediate step serving to tie up prior business negotiations with future consequences which themselves are the
real object of the business transaction." Id., at 316-317, 63 S.Ct., at 604-605. It is these factorsprior negotiations
and contemplated future consequences, along with the terms of the contract and the parties' actual course of dealing
that must be evaluated in determining whether the defendant purposefully established minimum contacts within the
forum.
In this case, no physical ties to Florida can be attributed to Rudzewicz other than MacShara's brief training course in
Miami. 22 Rudzewicz did not maintain offices in Florida and, for all that appears from the record, has never even
visited there. Yet this franchise dispute grew directly out of "a contract which had a substantial connection with that
State." McGee v. International Life Insurance Co., 355 U.S., at 223, 78 S.Ct., at 201 (emphasis added). Eschewing the
option of operating an independent local enterprise, Rudzewicz deliberately "reached out beyond" Michigan and
negotiated with a Florida corporation for the purchase of a long-term franchise and the manifold benefits that would
derive from affiliation with a nationwide organization. Travelers Health Assn. v. Virginia, 339 U.S., at 647, 70 S.Ct., at
929. Upon approval, he entered into a carefully structured 20-year relationship that envisioned continuing and widereaching contacts with Burger King in Florida. In light of Rudzewicz' voluntary acceptance of the long-term and

exacting regulation of his business from Burger King's Miami headquarters, the "quality and nature" of his relationship
to the company in Florida can in no sense be viewed as "random," "fortuitous," or "attenuated." Hanson v. Denckla,
357 U.S., at 253, 78 S.Ct., at 1239; Keeton v. Hustler Magazine, Inc., 465 U.S., at 774, 104 S.Ct., at 1478; WorldWide Volkswagen Corp. v. Woodson, 444 U.S., at 299, 100 S.Ct., at 568. Rudzewicz' refusal to make the contractually
required payments in Miami, and his continued use of Burger King's trademarks and confidential business information
after his termination, caused foreseeable injuries to the corporation in Florida. For these reasons it was, at the very
least, presumptively reasonable for Rudzewicz to be called to account there for such injuries.
The Court of Appeals concluded, however, that in light of the supervision emanating from Burger King's district office
in Birmingham, Rudzewicz reasonably believed that "the Michigan office was for all intents and purposes the
embodiment of Burger King" and that he therefore had no "reason to anticipate a Burger King suit outside of
Michigan." 724 F.2d, at 1511. See also post, at 488-489 (STEVENS, J., dissenting). This reasoning overlooks
substantial record evidence indicating that Rudzewicz most certainly knew that he was affiliating himself with an
enterprise based primarily in Florida. The contract documents themselves emphasize that Burger King's operations are
conducted and supervised from the Miami headquarters, that all relevant notices and payments must be sent there,
and that the agreements were made in and enforced from Miami. See n. 5, supra. Moreover, the parties' actual
course of dealing repeatedly confirmed that decisionmaking authority was vested in the Miami headquarters and that
the district office served largely as an intermediate link between the headquarters and the franchisees. When
problems arose over building design, site-development fees, rent computation, and the defaulted payments,
Rudzewicz and MacShara learned that the Michigan office was powerless to resolve their disputes and could only
channel their communications to Miami. Throughout these disputes, the Miami headquarters and the Michigan
franchisees carried on a continuous course of direct communications by mail and by telephone, and it was the Miami
headquarters that made the key negotiating decisions out of which the instant litigation arose. See nn. 7, 9, supra.
Moreover, we believe the Court of Appeals gave insufficient weight to provisions in the various franchise documents
providing that all disputes would be governed by Florida law. The franchise agreement, for example, stated:
"This Agreement shall become valid when executed and accepted by BKC at Miami, Florida; it shall be deemed made
and entered into in the State of Florida and shall be governed and construed under and in accordance with the laws
of the State of Florida. The choice of law designation does not require that all suits concerning this Agreement be filed
in Florida." App. 72.
See also n. 5, supra. The Court of Appeals reasoned that choice-of-law provisions are irrelevant to the question of
personal jurisdiction, relying on Hanson v. Denckla for the proposition that "the center of gravity for choice-of-law
purposes does not necessarily confer the sovereign prerogative to assert jurisdiction." 724 F.2d, at 1511-1512, n. 10,
citing 357 U.S., at 254, 78 S.Ct., at 1240. This reasoning misperceives the import of the quoted proposition. The Court
in Hanson and subsequent cases has emphasized that choice-of-law analysis which focuses on all elements of a
transaction, and not simply on the defendant's conductis distinct from minimum-contacts jurisdictional analysis
which focuses at the threshold solely on the defendant's purposeful connection to the forum. 23 Nothing in our cases,
however, suggests that a choice-of-law provision should be ignored in considering whether a defendant has
"purposefully invoked the benefits and protections of a State's laws" for jurisdictional purposes. Although such a
provision standing alone would be insufficient to confer jurisdiction, we believe that, when combined with the 20-year
interdependent relationship Rudzewicz established with Burger King's Miami headquarters, it reinforced his deliberate
affiliation with the forum State and the reasonable foreseeability of possible litigation there. As Judge Johnson argued
in his dissent below, Rudzewicz "purposefully availed himself of the benefits and protections of Florida's laws" by
entering into contracts expressly providing that those laws would govern franchise disputes. 724 F.2d, at 1513. 24
(2)
Nor has Rudzewicz pointed to other factors that can be said persuasively to outweigh the considerations discussed
above and to establish the unconstitutionality of Florida's assertion of jurisdiction. We cannot conclude that Florida
had no "legitimate interest in holding Rudzewicz answerable on a claim related to" the contacts he had established in
that State. Keeton v. Hustler Magazine, Inc., 465 U.S., at 776, 104 S.Ct., at 1479; see also McGee v. International Life
Insurance Co., 355 U.S., at 223, 78 S.Ct., at 201 (noting that State frequently will have a "manifest interest in
providing effective means of redress for its residents"). 25 Moreover, although Rudzewicz has argued at some length
that Michigan's Franchise Investment Law, Mich.Comp.Laws 445.1501 et seq. (1979), governs many aspects of this
franchise relationship, he has not demonstrated how Michigan's acknowledged interest might possibly render
jurisdiction in Florida unconstitutional. 26 Finally, the Court of Appeals' assertion that the Florida litigation "severely
impaired Rudzewicz' ability to call Michigan witnesses who might be essential to his defense and counterclaim," 724
F.2d, at 1512-1513, is wholly without support in the record. 27 And even to the extent that it is inconvenient for a
party who has minimum contacts with a forum to litigate there, such considerations most frequently can be
accommodated through a change of venue. See n. 20, supra. Although the Court has suggested that inconvenience

may at some point become so substantial as to achieve constitutional magnitude, McGee v. International Life
Insurance Co., supra, 355 U.S., at 223, 78 S.Ct., at 201, this is not such a case.
The Court of Appeals also concluded, however, that the parties' dealings involved "a characteristic disparity of
bargaining power" and "elements of surprise," and that Rudzewicz "lacked fair notice" of the potential for litigation in
Florida because the contractual provisions suggesting to the contrary were merely "boilerplate declarations in a
lengthy printed contract." 724 F.2d, at 1511-1512, and n. 10. See also post, at 489-490 (STEVENS, J., dissenting).
Rudzewicz presented many of these arguments to the District Court, contending that Burger King was guilty of
misrepresentation, fraud, and duress; that it gave insufficient notice in its dealings with him; and that the contract
was one of adhesion. See 4 Record 687-691. After a 3-day bench trial, the District Court found that Burger King had
made no misrepresentations, that Rudzewicz and MacShara "were and are experienced and sophisticated
businessmen," and that "at no time" did they "act under economic duress or disadvantage imposed by" Burger King.
App. 157-158. See also 7 Record 648-649. Federal Rule of Civil Procedure 52(a) requires that "findings of fact shall
not be set aside unless clearly erroneous," and neither Rudzewicz nor the Court of Appeals has pointed to record
evidence that would support a "definite and firm conviction" that the District Court's findings are mistaken. United
States v. United States Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 542, 92 L.Ed. 746 (1948). See also Anderson v.
Bessemer City, 470 U.S. 564, 573-576, 105 S.Ct. 1504, ---- - ----, 84 L.Ed.2d 518 (1985). To the contrary, Rudzewicz
was represented by counsel throughout these complex transactions and, as Judge Johnson observed in dissent below,
was himself an experienced accountant "who for five months conducted negotiations with Burger King over the terms
of the franchise and lease agreements, and who obligated himself personally to contracts requiring over time
payments that exceeded $1 million." 724 F.2d, at 1514. Rudzewicz was able to secure a modest reduction in rent and
other concessions from Miami headquarters, see nn. 8, 9, supra; moreover, to the extent that Burger King's terms
were inflexible, Rudzewicz presumably decided that the advantages of affiliating with a national organization provided
sufficient commercial benefits to offset the detriments. 28
III
Notwithstanding these considerations, the Court of Appeals apparently believed that it was necessary to reject
jurisdiction in this case as a prophylactic measure, reasoning that an affirmance of the District Court's judgment would
result in the exercise of jurisdiction over "out-of-state consumers to collect payments due on modest personal
purchases" and would "sow the seeds of default judgments against franchisees owing smaller debts." 724 F.2d, at
1511. We share the Court of Appeals' broader concerns and therefore reject any talismanic jurisdictional formulas;
"the facts of each case must always be weighed" in determining whether personal jurisdiction would comport with
"fair play and substantial justice." Kulko v. California Superior Court, 436 U.S., at 92, 98 S.Ct., at 1696-1697. 29 The
"quality and nature" of an interstate transaction may sometimes be so "random," "fortuitous," or "attenuated" 30 that
it cannot fairly be said that the potential defendant "should reasonably anticipate being haled into court" in another
jurisdiction. World-Wide Volkswagen Corp. v. Woodson, 444 U.S., at 297, 100 S.Ct., at 567; see also n. 18, supra. We
also have emphasized that jurisdiction may not be grounded on a contract whose terms have been obtained through
"fraud, undue influence, or overweening bargaining power" and whose application would render litigation "so gravely
difficult and inconvenient that a party will for all practical purposes be deprived of his day in court." The Bremen v.
Zapata Off-Shore Co., 407 U.S., at 12, 18, 92 S.Ct., at 1914, 1917. Cf. Fuentes v. Shevin, 407 U.S. 67, 94-96, 92 S.Ct.
1983, 2001-2002, 32 L.Ed.2d 556 (1972); National Equipment Rental, Ltd. v. Szukhent, 375 U.S. 311, 329, 84 S.Ct.
411, 421, 11 L.Ed.2d 354 (1964) (BLACK, J., dissenting) (jurisdictional rules may not be employed against small
consumers so as to "cripple their defense"). Just as the Due Process Clause allows flexibility in ensuring that
commercial actors are not effectively "judgment proof" for the consequences of obligations they voluntarily assume in
other States, McGee v. International Life Insurance Co., 355 U.S., at 223, 78 S.Ct., at 201, so too does it prevent
rules that would unfairly enable them to obtain default judgments against unwitting customers. Cf. United States v.
Rumely, 345 U.S. 41, 44, 73 S.Ct. 543, 545, 97 L.Ed. 770 (1953) (courts must not be " 'blind' " to what " 'all others
can see and understand' ").
For the reasons set forth above, however, these dangers are not present in the instant case. Because Rudzewicz
established a substantial and continuing relationship with Burger King's Miami headquarters, received fair notice from
the contract documents and the course of dealing that he might be subject to suit in Florida, and has failed to
demonstrate how jurisdiction in that forum would otherwise be fundamentally unfair, we conclude that the District
Court's exercise of jurisdiction pursuant to Fla.Stat. 48.193(1)(g) (Supp.1984) did not offend due process. The
judgment of the Court of Appeals is accordingly reversed, and the case is remanded for further proceedings
consistent with this opinion.
It is so ordered.
Justice POWELL took no part in the consideration or decision of this case.
TOP

Justice STEVENS, with whom Justice WHITE joins, dissenting.

In my opinion there is a significant element of unfairness in requiring a franchisee to defend a case of this kind in the
forum chosen by the franchisor. It is undisputed that appellee maintained no place of business in Florida, that he had
no employees in that State, and that he was not licensed to do business there. Appellee did not prepare his French
fries, shakes, and hamburgers in Michigan, and then deliver them into the stream of commerce "with the expectation
that they would be purchased by consumers in" Florida. Ante, at 473. To the contrary, appellee did business only in
Michigan, his business, property, and payroll taxes were payable in that State, and he sold all of his products there.
Throughout the business relationship, appellee's principal contacts with appellant were with its Michigan office.
Notwithstanding its disclaimer, ante, at 478, the Court seems ultimately to rely on nothing more than standard
boilerplate language contained in various documents, ante, at 481, to establish that appellee " 'purposefully availed
himself of the benefits and protections of Florida's laws.' " Id., at 482. Such superficial analysis creates a potential for
unfairness not only in negotiations between franchisors and their franchisees but, more significantly, in the resolution
of the disputes that inevitably arise from time to time in such relationships.
Judge Vance's opinion for the Court of Appeals for the Eleventh Circuit adequately explains why I would affirm the
judgment of that court. I particularly find the following more persuasive than what this Court has written today:
"Nothing in the course of negotiations gave Rudzewicz reason to anticipate a Burger King suit outside of Michigan.
The only face-to-face or even oral contact Rudzewicz had with Burger King throughout months of protracted
negotiations was with representatives of the Michigan office. Burger King had the Michigan office interview Rudzewicz
and MacShara, appraise their application, discuss price terms, recommend the site which the defendants finally
agreed to, and attend the final closing ceremony. There is no evidence that Rudzewicz ever negotiated with anyone in
Miami or even sent mail there during negotiations. He maintained no staff in the state of Florida, and as far as the
record reveals, he has never even visited the state.
"The contracts contemplated the startup of a local Michigan restaurant whose profits would derive solely from food
sales made to customers in Drayton Plains. The sale, which involved the use of an intangible trademark in Michigan
and occupancy of a Burger King facility there, required no performance in the state of Florida. Under the contract, the
local Michigan district office was responsible for providing all of the services due Rudzewicz, including advertising and
management consultation. Supervision, moreover, emanated from that office alone. To Rudzewicz, the Michigan office
was for all intents and purposes the embodiment of Burger King. He had reason to believe that his working
relationship with Burger King began and ended in Michigan, not at the distant and anonymous Florida headquarters. .
..
"Given that the office in Rudzewicz' home state conducted all of the negotiations and wholly supervised the contract,
we believe that he had reason to assume that the state of the supervisory office would be the same state in which
Burger King would file suit. Rudzewicz lacked fair notice that the distant corporate headquarters which insulated itself
from direct dealings with him would later seek to assert jurisdiction over him in the courts of its own home state. . . .
"Just as Rudzewicz lacked notice of the possibility of suit in Florida, he was financially unprepared to meet its added
costs. The franchise relationship in particular is fraught with potential for financial surprise. The device of the
franchise gives local retailers the access to national trademark recognition which enables them to compete with
better-financed, more efficient chain stores. This national affiliation, however, does not alter the fact that the typical
franchise store is a local concern serving at best a neighborhood or community. Neither the revenues of a local
business nor the geographical range of its market prepares the average franchise owner for the cost of distant
litigation. . . .
"The particular distribution of bargaining power in the franchise relationship further impairs the franchisee's financial
preparedness. In a franchise contract, 'the franchisor normally occupies the dominant role'. . . .
"We discern a characteristic disparity of bargaining power in the facts of this case. There is no indication that
Rudzewicz had any latitude to negotiate a reduced rent or franchise fee in exchange for the added risk of suit in
Florida. He signed a standard form contract whose terms were non-negotiable and which appeared in some respects
to vary from the more favorable terms agreed to in earlier discussions. In fact, the final contract required a minimum
monthly rent computed on a base far in excess of that discussed in oral negotiations. Burger King resisted price
concessions, only to sue Rudzewicz far from home. In doing so, it severely impaired his ability to call Michigan
witnesses who might be essential to his defense and counterclaim.
"In sum, we hold that the circumstances of the Drayton Plains franchise and the negotiations which led to it left
Rudzewicz bereft of reasonable notice and financially unprepared for the prospect of franchise litigation in Florida.

Jurisdiction under these circumstances would offend the fundamental fairness which is the touchstone of due
process." 724 F.2d 1505, 1511-1513 (1984) (footnotes omitted).
Accordingly, I respectfully dissent.
CC | Transformed by Public.Resource.Org
1
Burger King's standard Franchise Agreement further defines this system as "a restaurant format and operating
system, including a recognized design, decor, color scheme and style of building, uniform standards, specifications
and procedures of operation, quality and uniformity of products and services offered, and procedures for inventory
and management control. . . ." App. 43.
2
Mandatory training seminars are conducted at Burger King University in Miami and at Whopper College Regional
Training Centers around the country. See id., at 39; 6 Record 540-541.
3
See App. 43-44. See generally H. Brown, Franchising Realities and Remedies 6-7, 16-17 (2d ed. 1978).
4
See, e.g., App. 24-25, 26 (range, "quality, appearance, size, taste, and processing" of menu items), 31 ("standards of
service and cleanliness"), 32 (hours of operation), 47 ("official mandatory restaurant operating standards,
specifications and procedures"), 48-50 (building layout, displays, equipment, vending machines, service, hours of
operation, uniforms, advertising, and promotion), 53 (employee training), 55-56 (accounting and auditing
requirements), 59 (insurance requirements). Burger King also imposes extensive standards governing franchisee
liability, assignments, defaults, and termination. See id., at 61-74.
5
See id., at 10-11, 37, 43, 72-73, 113. See infra, at 481.
6
The latter two matters were the major areas of disagreement. Notwithstanding that Burger King's franchise offering
advised that minimum rent would be based on a percentage of "approximated capitalized site acquisition and
construction costs," id., at 23, Rudzewicz assumed that rent would be a function solely of renovation costs, and he
thereby underestimated the minimum monthly rent by more than $2,000. The District Court found Rudzewicz'
interpretation "incredible." 7 Record 649.
With respect to assignment, Rudzewicz and MacShara had formed RMBK Corp. with the intent of assigning to it all of
their interest and liabilities in the franchise. Consistent with the contract documents, however, Burger King insisted
that the two remain personally liable for their franchise obligations. See App. 62, 109. Although the franchisees
contended that Burger King officials had given them oral assurances concerning assignment, the District Court found
that pursuant to the parol evidence rule any such assurances "even if they had been made and were misleading were
joined and merged" into the final agreement. 7 Record 648.
7
Although Rudzewicz and MacShara dealt with the Birmingham district office on a regular basis, they communicated
directly with the Miami headquarters in forming the contracts; moreover, they learned that the district office had "very
little" decisionmaking authority and accordingly turned directly to headquarters in seeking to resolve their disputes. 5
id., at 292. See generally App. 5-6; 5 Record 167-168, 174-179, 182-184, 198-199, 217-218, 264-265, 292-294; 6 id.,
at 314-316, 363, 373, 416, 463, 496.
8
They were able to secure a $10,439 reduction in rent for the third year. App. 82; 5 Record 222-223; 6 id., at 500.

9
Miami's policy was to "deal directly" with franchisees when they began to encounter financial difficulties, and to
involve district office personnel only when necessary. 5 id., at 95. In the instant case, for example, the Miami office
handled all credit problems, ordered cost-cutting measures, negotiated for a partial refinancing of the franchisees'
debts, communicated directly with the franchisees in attempting to resolve the dispute, and was responsible for all
termination matters. See 2 id., at 59-69; 5 id., at 84-89, 94-95, 97-98, 100-103, 116-128, 151-152, 158, 163; 6 id., at
395-397, 436-438, 510-511, 524-525.
10
Rudzewicz and MacShara were served in Michigan with summonses and copies of the complaint pursuant to Federal
Rule of Civil Procedure 4. 2 id., at 102-103.
11
MacShara did not appeal his judgment. See Burger King Corp. v. MacShara, 724 F.2d 1505, 1506, n. 1 (CA11 1984).
In addition, Rudzewicz entered into a compromise with Burger King and waived his right to appeal the District Court's
finding of trademark infringement and its entry of injunctive relief. See 4 Record 804-816. Accordingly, we need not
address the extent to which the tortious act provisions of Florida's long-arm statute, see Fla.Stat. 48.193(1)(b)
(Supp.1984), may constitutionally extend to out-of-state trademark infringement. Cf. Calder v. Jones, 465 U.S. 783,
788-789, 104 S.Ct. 1482, 1486-1487, 79 L.Ed.2d 804 (1984) (tortious out-of-state conduct); Keeton v. Hustler
Magazine, Inc., 465 U.S. 770, 776, 104 S.Ct. 1473, 1479, 79 L.Ed.2d 790 (1984) (same).
12
The District Court had found both that Rudzewicz fell within the reach of Florida's long-arm statute and that the
exercise of jurisdiction was constitutional. The Court of Appeals did not consider the statutory question, however,
because, as Burger King acknowledged at argument, that court "accepted the parties' stipulation" that 48.193
reached Rudzewicz "in lieu of [making] a determination of what Florida law provides." Tr. of Oral Arg. 12. Burger King
contends that an appeal is proper "on the basis of the Circuit Court's holding that given that stipulation the statute
was unconstitutional as applied." Id., at 13 (emphasis added).
We disagree. Our "overriding policy, historically encouraged by Congress, of minimizing the mandatory docket of this
Court in the interests of sound judicial administration," Gonzalez v. Automatic Employees Credit Union, 419 U.S. 90,
98, 95 S.Ct. 289, 294, 42 L.Ed.2d 249 (1974) (construing 28 U.S.C. 1253), would be threatened if litigants could
obtain an appeal through the expedient of stipulating to a particular construction of state law where
state law might in fact be in harmony with the Federal Constitution. Jurisdiction under 28 U.S.C. 1254(2) is properly
invoked only where a court of appeals squarely has "held" that a state statute is unconstitutional on its face or as
applied; jurisdiction does not lie if the decision might rest on other grounds. Public Service Comm'n v. Batesville
Telephone Co., 284 U.S. 6, 7, 52 S.Ct. 1, 76 L.Ed. 135 (1931) (per curiam ). Consistent with "our practice of strict
construction" of 1254(2), Fornaris v. Ridge Tool Co., 400 U.S. 41, 42, n. 1, 91 S.Ct. 156, 157, n. 1, 27 L.Ed.2d 174
(1970) (per curiam ), we believe that an appeal cannot lie where a court of appeals' judgment rests solely on the
stipulated applicability of state law. Rather, it must be reasonably clear that the court independently concluded that
the challenged statute governs the case and held the statute itself unconstitutional as so applied. The Court of
Appeals did neither in this case, concluding simply that "[j]urisdiction under these circumstances would offend the
fundamental fairness which is the touchstone of due process." 724 F.2d, at 1513.
Of course, if it were clear under Florida law that 48.193(1)(g) governed every transaction falling within its literal
terms, there could be no objection to a stipulation that merely recognized this established construction. But the
Florida Supreme Court has not ruled on the breadth of 48.193(1)(g), and several state appellate courts have held
that the provision extends only to the limits of the Due Process Clause. See, e.g., Scordilis v. Drobnicki, 443 So.2d
411, 412-414 (Fla.App.1984); Lakewood Pipe of Texas, Inc. v. Rubaii, 379 So.2d 475, 477 (Fla.App.1979), appeal
dism'd, 383 So.2d 1201 (Fla.1980); Osborn v. University Society, Inc., 378 So.2d 873, 874 (Fla.App.1979). If
48.193(1)(g) is construed and applied in accordance with due process limitations as a matter of state law, then an
appeal is improper because the statute cannot be "invalid as repugnant to the Constitution . . . of the United States,"
28 U.S.C. 1254(2), since its boundaries are defined by, rather than being in excess of, the Due Process Clause. See,
e.g., Calder v. Jones, supra, 465 U.S., at 787-788, n. 7, 104 S.Ct., at 1486, n. 7; Kulko v. California Superior Court,
436 U.S. 84, 90, and n. 4, 98 S.Ct. 1690, 1695-1696, and n. 4, 56 L.Ed.2d 132 (1978).
13

Although this protection operates to restrict state power, it "must be seen as ultimately a function of the individual
liberty interest preserved by the Due Process Clause" rather than as a function "of federalism concerns." Insurance
Corp. of Ireland v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 702-703, n. 10, 102 S.Ct. 2099, 2104-2105, n.
10, 72 L.Ed.2d 492 (1982).
14
We have noted that, because the personal jurisdiction requirement is a waivable right, there are a "variety of legal
arrangements" by which a litigant may give "express or implied consent to the personal jurisdiction of the court."
Insurance Corp. of Ireland v. Compagnie des Bauxites de Guinee, supra, at 703, 102 S.Ct., at 2105. For example,
particularly in the commercial context, parties frequently stipulate in advance to submit their controversies for
resolution within a particular jurisdiction. See National Equipment Rental, Ltd. v. Szukhent, 375 U.S. 311, 84 S.Ct.
411, 11 L.Ed.2d 354 (1964). Where such forum-selection provisions have been obtained through "freely negotiated"
agreements and are not "unreasonable and unjust," The Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 15, 92 S.Ct.
1907, 1916, 32 L.Ed.2d 513 (1972), their enforcement does not offend due process.
15
"Specific" jurisdiction contrasts with "general" jurisdiction, pursuant to which "a State exercises personal jurisdiction
over a defendant in a suit not arising out of or related to the defendant's contacts with the forum." Helicopteros
Nacionales de Colombia, S.A. v. Hall, 466 U.S., at 414, n. 9, 104 S.Ct., at 1872, n. 9; see also Perkins v. Benguet
Consolidated Mining Co., 342 U.S. 437, 72 S.Ct. 413, 96 L.Ed. 485 (1952).
16
See, e.g., World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 299, 100 S.Ct. 559, 568, 62 L.Ed.2d 490 (1980)
(BRENNAN, J., dissenting); Shaffer v. Heitner, 433 U.S. 186, 219, 97 S.Ct. 2569, 2588, 53 L.Ed.2d 683 (1977)
(BRENNAN, J., concurring in part and dissenting in part).
17
Applying this principle, the Court has held that the Due Process Clause forbids the exercise of personal jurisdiction
over an out-of-state automobile distributor whose only tie to the forum resulted from a customer's decision to drive
there, World-Wide Volkswagen Corp. v. Woodson, supra; over a divorced husband sued for child-support payments
whose only affiliation with the forum was created by his former spouse's decision to settle there, Kulko v. California
Superior Court, 436 U.S. 84, 98 S.Ct. 1690, 56 L.Ed.2d 132 (1978); and over a trustee whose only connection with
the forum resulted from the settlor's decision to exercise her power of appointment there, Hanson v. Denckla, 357
U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958). In such instances, the defendant has had no "clear notice that it is
subject to suit" in the forum and thus no opportunity to "alleviate the risk of burdensome litigation" there. World-Wide
Volkswagen Corp. v. Woodson, supra, 444 U.S., at 297, 100 S.Ct., at 567.
18
So long as it creates a "substantial connection" with the forum, even a single act can support jurisdiction. McGee v.
International Life Insurance Co., 355 U.S., at 223, 78 S.Ct., at 201. The Court has noted, however, that "some single
or occasional acts" related to the forum may not be sufficient to establish jurisdiction if "their nature and quality and
the circumstances of their commission" create only an "attenuated" affiliation with the forum. International Shoe Co.
v. Washington, 326 U.S. 310, 318, 66 S.Ct. 154, 159, 90 L.Ed. 95 (1945); World-Wide Volkswagen Corp. v. Woodson,
444 U.S., at 299, 100 S.Ct., at 568. This distinction derives from the belief that, with respect to this category of
"isolated" acts, id., at 297, 100 S.Ct., at 567, the reasonable foreseeability of litigation in the forum is substantially
diminished.
19
See Allstate Insurance Co. v. Hague, 449 U.S. 302, 307-313, 101 S.Ct. 633, 637-640, 66 L.Ed.2d 521 (1981) (opinion
of BRENNAN, J.). See generally Restatement (Second) of Conflict of Laws 6, 9 (1971).
20
See, e.g., 28 U.S.C. 1404(a) ("For the convenience of parties and witnesses, in the interest of justice, a district court
may transfer any civil action to any other district or division where it might have been brought"). This provision
embodies in an expanded version the common-law doctrine of forum non conveniens, under which a court in
appropriate circumstances may decline to exercise its jurisdiction in the interest of the "easy, expeditious and

inexpensive" resolution of a controversy in another forum. See Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508-509, 67
S.Ct. 839, 843, 91 L.Ed. 1055 (1947).
21
See, e.g., Lakeside Bridge & Steel Co. v. Mountain State Construction Co., 445 U.S. 907, 909-910, 100 S.Ct. 1087,
1088-1089, 63 L.Ed.2d 325 (1980) (WHITE, J., dissenting from denial of certiorari) (collecting cases); Brewer,
Jurisdiction in Single Contract Cases, 6 U.Ark. Little Rock L.J. 1, 7-11, 13 (1983); Note, Long-Arm Jurisdiction in
Commercial Litigation: When is a Contract a Contact?, 61 B.U.L.Rev. 375, 384-388 (1981).
22
The Eleventh Circuit held that MacShara's presence in Florida was irrelevant to the question of Rudzewicz's minimum
contacts with that forum, reasoning that "Rudzewicz and MacShara never formed a partnership" and "signed the
agreements in their individual capacities." 724 F.2d, at 1513, n. 14. The two did jointly form a corporation through
which they were seeking to conduct the franchise, however. See n. 6, supra. They were required to decide which one
of them would travel to Florida to satisfy the training requirements so that they could commence business, and
Rudzewicz participated in the decision that MacShara would go there. We have previously noted that when
commercial activities are "carried on in behalf of" an out-of-state party those activities may sometimes be ascribed to
the party, International Shoe Co. v. Washington, 326 U.S. 310, 320, 66 S.Ct. 154, 160, 90 L.Ed. 95 (1945), at least
where he is a "primary participan[t]" in the enterprise and has acted purposefully in directing those activities, Calder
v. Jones, 465 U.S., at 790, 104 S.Ct., at 1487. Because MacShara's matriculation at Burger King University is not
pivotal to the disposition of this case, we need not resolve the permissible bounds of such attribution.
23
Hanson v. Denckla, 357 U.S., at 253-254, 78 S.Ct., at 1239-1240. See also Keeton v. Hustler Magazine, Inc., 465 U.S.,
at 778, 104 S.Ct., at 1480; Kulko v. California Superior Court, 436 U.S., at 98, 98 S.Ct., at 1700; Shaffer v. Heitner,
433 U.S., at 215, 97 S.Ct., at 2585.
24
In addition, the franchise agreement's disclaimer that the "choice of law designation does not require that all suits
concerning this Agreement be filed in Florida," App. 72 (emphasis added), reasonably should have suggested to
Rudzewicz that by negative implication such suits could be filed there.
The lease also provided for binding arbitration in Miami of certain condemnation disputes, id., at 113, and Rudzewicz
conceded the validity of this provision at oral argument, Tr. of Oral Arg. 37. Although it does not govern the instant
dispute, this provision also should have made it apparent to the franchisees that they were dealing directly with the
Miami headquarters and that the Birmingham district office was not "for all intents and purposes the embodiment of
Burger King." 724 F.2d, at 1511.
25
Complaining that "when Burger King is the plaintiff, you won't 'have it your way' because it sues all franchisees in
Miami," Brief for Appellee 19, Rudzewicz contends that Florida's interest in providing a convenient forum is negligible
given the company's size and ability to conduct litigation anywhere in the country. We disagree. Absent compelling
considerations, cf. McGee v. International Life Insurance Co., 355 U.S., at 223, 78 S.Ct., at 201, a defendant who has
purposefully derived commercial benefit from his affiliations in a forum may not defeat jurisdiction there simply
because of his adversary's greater net wealth.
26
Rudzewicz has failed to show how the District Court's exercise of jurisdiction in this case might have been at all
inconsistent with Michigan's interests. To the contrary, the court found that Burger King had fully complied with
Michigan law, App. 159, and there is nothing in Michigan's franchise Act suggesting that Michigan would attempt to
assert exclusive jurisdiction to resolve franchise disputes affecting its residents. In any event, minimum-contacts
analysis presupposes that two or more States may be interested in the outcome of a dispute, and the process of
resolving potentially conflicting "fundamental substantive social policies," World-Wide Volkswagen Corp. v. Woodson,
444 U.S., at 292, 100 S.Ct., at 564, can usually be accommodated through choice-of-law rules rather than through
outright preclusion of jurisdiction in one forum. See n. 19, supra.
27

The only arguable instance of trial inconvenience occurred when Rudzewicz had difficulty in authenticating some
corporate records; the court offered him as much time as would be necessary to secure the requisite authentication
from the Birmingham district office, and Burger King ultimately stipulated to their authenticity rather than delay the
trial. See 7 Record 574-575, 578-579, 582, 598-599.
28
We do not mean to suggest that the jurisdictional outcome will always be the same in franchise cases. Some
franchises may be primarily intrastate in character or involve different decisionmaking structures, such that a
franchisee should not reasonably anticipate out-of-state litigation. Moreover, commentators have argued that
franchise relationships may sometimes involve unfair business practices in their inception and operation. See H.
Brown, Franchising Realities and Remedies 4-5 (2d ed. 1978). For these reasons, we reject Burger King's suggestion
for "a general rule, or at least a presumption, that participation in an interstate franchise relationship" represents
consent to the jurisdiction of the franchisor's principal place of business. Brief for Appellant 46.
29
This approach does, of course, preclude clear-cut jurisdictional rules. But any inquiry into "fair play and substantial
justice" necessarily requires determinations "in which few answers will be written 'in black and white. The greys are
dominant and even among them the shades are innumerable.' " Kulko v. California Superior Court, 436 U.S., at 92, 98
S.Ct., at 1697.
30
Hanson v. Denckla, 357 U.S., at 253, 78 S.Ct., at 1239; Keeton v. Hustler Magazine, Inc., 465 U.S., at 774, 104 S.Ct.,
at 1478; World-Wide Volkswagen Corp. v. Woodson, 444 U.S., at 299, 100 S.Ct., at 568.

SWEET LINES v. TEVES

G.R. No. L-37750

May 19, 1978

SWEET LINES, INC., petitioner,

vs.
HON. BERNARDO TEVES, Presiding Judge, CFI of Misamis Oriental Branch VII, LEOVIGILDO TANDOG, JR., and
ROGELIO TIRO, respondents.
Filiberto Leonardo, Abelardo C. Almario & Samuel B. Abadiano for petitioner.
Leovigildo Vallar for private respondents.

SANTOS, J.:
This is an original action for Prohibition with Pre Injunction filed October 3, 1973 to restrain respondent Judge from
proceeding further with Civil Case No. 4091, entitled Leovigildo D. Tandog, Jr. and Rogelio Tiro v. Sweet Lines, Inc."
after he denied petitioner's Motion to Dismiss the complaint, and the Motion for Reconsideration of said order. 1
Briefly, the facts of record follow. Private respondents Atty. Leovigildo Tandog and Rogelio Tiro, a contractor by
professions, bought tickets Nos. 0011736 and 011737 for Voyage 90 on December 31, 1971 at the branch office of
petitioner, a shipping company transporting inter-island passengers and cargoes, at Cagayan de Oro City.
Respondents were to board petitioner's vessel, M/S "Sweet Hope" bound for Tagbilaran City via the port of Cebu.
Upon learning that the vessel was not proceeding to Bohol, since many passengers were bound for Surigao, private
respondents per advice, went to the branch office for proper relocation to M/S "Sweet Town". Because the said vessel
was already filled to capacity, they were forced to agree "to hide at the cargo section to avoid inspection of the
officers of the Philippine Coastguard." Private respondents alleged that they were, during the trip," "exposed to the
scorching heat of the sun and the dust coming from the ship's cargo of corn grits," and that the tickets they bought at
Cagayan de Oro City for Tagbilaran were not honored and they were constrained to pay for other tickets. In view
thereof, private respondents sued petitioner for damages and for breach of contract of carriage in the alleged sum of
P10,000.00 before respondents Court of First Instance of Misamis Oriental. 2
Petitioner moved to dismiss the complaint on the ground of improper venue. This motion was premised on the
condition printed at the back of the tickets, i.e., Condition No. 14, which reads:
14.
It is hereby agreed and understood that any and all actions arising out of the conditions and provisions of this
ticket, irrespective of where it is issued, shall be filed in the competent courts in the City of Cebu. 3
The motion was denied by the trial court. 4 Petitioner moved to reconnsider the order of denial, but no avail. 5 Hence,
this instant petition for prohibition for preliminary injunction, 'alleging that the respondent judge has departed from
the accepted and usual course of judicial preoceeding" and "had acted without or in excess or in error of his
jurisdicton or in gross abuse of discretion. 6
In Our resolution of November 20, 1973, We restrained respondent Judge from proceeding further with the case and
required respondent to comment. 7 On January 18, 1974, We gave due course to the petition and required
respondent to answer. 8 Thereafter, the parties submitted their respesctive memoranda in support of their respective
contentions. 9
Presented thus for Our resolution is a question is aquestion which, to all appearances, is one of first impression, to wit
Is Condition No. 14 printed at the back of the petitioner's passage tickets purchased by private respondents, which
limits the venue of actions arising from the contract of carriage to theCourt of First Instance of Cebu, valid and
enforceable? Otherwise stated, may a common carrier engaged in inter-island shipping stipulate thru condition printed
at the back of passage tickets to its vessels that any and all actions arising out of the ocntract of carriage should be
filed only in a particular province or city, in this case the City of Cebu, to the exclusion of all others?
Petitioner contends thaty Condition No. 14 is valid and enforceable, since private respndents acceded to tit when they
purchased passage tickets at its Cagayan de Oro branch office and took its vessel M/S "Sweet Town" for passage to
Tagbilaran, Bohol that the condition of the venue of actions in the City of Cebu is proper since venue may be
validly waived, citing cases; 10 that is an effective waiver of venue, valid and binding as such, since it is printed in
bold and capital letters and not in fine print and merely assigns the place where the action sing from the contract is

institution likewise citing cases; 11 and that condition No. 14 is unequivocal and mandatory, the words and phrases
"any and all", "irrespective of where it is issued," and "shag" leave no doubt that the intention of Condition No. 14 is
to fix the venue in the City of Cebu, to the exclusion of other places; that the orders of the respondent Judge are an
unwarranted departure from established jurisprudence governing the case; and that he acted without or in excess of
his jurisdiction in is the orders complained of. 12
On the other hand, private respondents claim that Condition No. 14 is not valid, that the same is not an essential
element of the contract of carriage, being in itself a different agreement which requires the mutual consent of the
parties to it; that they had no say in its preparation, the existence of which they could not refuse, hence, they had no
choice but to pay for the tickets and to avail of petitioner's shipping facilities out of necessity; that the carrier "has
been exacting too much from the public by inserting impositions in the passage tickets too burdensome to bear," that
the condition which was printed in fine letters is an imposition on the riding public and does not bind respondents,
citing cases; 13 that while venue 6f actions may be transferred from one province to another, such arrangement
requires the "written agreement of the parties", not to be imposed unilaterally; and that assuming that the condition
is valid, it is not exclusive and does not, therefore, exclude the filing of the action in Misamis Oriental, 14
There is no question that there was a valid contract of carriage entered into by petitioner and private respondents and
that the passage tickets, upon which the latter based their complaint, are the best evidence thereof. All the essential
elements of a valid contract, i.e., consent, cause or consideration and object, are present. As held in Peralta de
Guerrero, et al. v. Madrigal Shipping Co., Inc., 15
It is a matter of common knowledge that whenever a passenger boards a ship for transportation from one place to
another he is issued a ticket by the shipper which has all the elements of a written contract, Namely: (1) the consent
of the contracting parties manifested by the fact that the passenger boards the ship and the shipper consents or
accepts him in the ship for transportation; (2) cause or consideration which is the fare paid by the passenger as
stated in the ticket; (3) object, which is the transportation of the passenger from the place of departure to the place
of destination which are stated in the ticket.
It should be borne in mind, however, that with respect to the fourteen (14) conditions one of which is "Condition
No. 14" which is in issue in this case printed at the back of the passage tickets, these are commonly known as
"contracts of adhesion," the validity and/or enforceability of which will have to be determined by the peculiar
circumstances obtaining in each case and the nature of the conditions or terms sought to be enforced. For, "(W)hile
generally, stipulations in a contract come about after deliberate drafting by the parties thereto, ... there are certain
contracts almost all the provisions of which have been drafted only by one party, usually a corporation. Such contracts
are called contracts of adhesion, because the only participation of the party is the signing of his signature or his
'adhesion' thereto. Insurance contracts, bills of lading, contracts of make of lots on the installment plan fall into this
category" 16
By the peculiar circumstances under which contracts of adhesion are entered into namely, that it is drafted only by
one party, usually the corporation, and is sought to be accepted or adhered to by the other party, in this instance the
passengers, private respondents, who cannot change the same and who are thus made to adhere thereto on the
"take it or leave it" basis certain guidelines in the determination of their validity and/or enforceability have been
formulated in order to that justice and fan play characterize the relationship of the contracting parties. Thus, this
Court speaking through Justice J.B.L. Reyes in Qua Chee Gan v. Law Union and Rock Insurance Co., 17 and later
through Justice Fernando in Fieldman Insurance v. Vargas, 18 held
The courts cannot ignore that nowadays, monopolies, cartels and concentration of capital endowed with overwhelm
economic power, manage to impose upon parties d with them y prepared 'agreements' that the weaker party may not
change one whit his participation in the 'agreement' being reduced to the alternative 'to take it or leave it,' labelled
since Raymond Saleilles 'contracts by adherence' (contracts d' adhesion) in contrast to those entered into by parties
bargaining on an equal footing. Such contracts (of which policies of insurance and international bill of lading are prime
examples) obviously cap for greater strictness and vigilance on the part of the courts of justice with a view to
protecting the weaker party from abuses and imposition, and prevent their becoming traps for the unwary.
To the same effect and import, and, in recognition of the character of contracts of this kind, the protection of the
disadvantaged is expressly enjoined by the New Civil Code
In all contractual property or other relations, when one of the parties is at a disadvantage on account of his moral
dependence, ignorance indigence, mental weakness, tender age and other handicap, the courts must be vigilant for
his
protection. 19

Considered in the light Of the foregoing norms and in the context Of circumstances Prevailing in the inter-island ship.
ping industry in the country today, We find and hold that Condition No. 14 printed at the back of the passage tickets
should be held as void and unenforceable for the following reasons first, under circumstances obligation in the interisland ship. ping industry, it is not just and fair to bind passengers to the terms of the conditions printed at the back
of the passage tickets, on which Condition No. 14 is Printed in fine letters, and second, Condition No. 14 subverts the
public policy on transfer of venue of proceedings of this nature, since the same will prejudice rights and interests of
innumerable passengers in different s of the country who, under Condition No. 14, will have to file suits against
petitioner only in the City of Cebu.
1.
It is a matter of public knowledge, of which We can take judicial notice, that there is a dearth of and acute
shortage in inter- island vessels plying between the country's several islands, and the facilities they offer leave much
to be desired. Thus, even under ordinary circumstances, the piers are congested with passengers and their cargo
waiting to be transported. The conditions are even worse at peak and/or the rainy seasons, when Passengers literally
scramble to whatever accommodations may be availed of, even through circuitous routes, and/or at the risk of their
safety their immediate concern, for the moment, being to be able to board vessels with the hope of reaching their
destinations. The schedules are as often as not if not more so delayed or altered. This was precisely the
experience of private respondents when they were relocated to M/S "Sweet Town" from M/S "Sweet Hope" and then
any to the scorching heat of the sun and the dust coming from the ship's cargo of corn grits, " because even the
latter was filed to capacity.
Under these circumstances, it is hardly just and proper to expect the passengers to examine their tickets received
from crowded/congested counters, more often than not during rush hours, for conditions that may be printed much
charge them with having consented to the conditions, so printed, especially if there are a number of such conditions
m fine print, as in this case. 20
Again, it should be noted that Condition No. 14 was prepared solely at the ms of the petitioner, respondents had no
say in its preparation. Neither did the latter have the opportunity to take the into account prior to the purpose chase
of their tickets. For, unlike the small print provisions of contracts the common example of contracts of adherence
which are entered into by the insured in his awareness of said conditions, since the insured is afforded the op to and
co the same, passengers of inter-island v do not have the same chance, since their alleged adhesion is presumed only
from the fact that they purpose chased the tickets.
It should also be stressed that slapping companies are franchise holders of certificates of public convenience and
therefore, posses a virtual monopoly over the business of transporting passengers between the ports covered by their
franchise. This being so, shipping companies, like petitioner, engaged in inter-island shipping, have a virtual monopoly
of the business of transporting passengers and may thus dictate their terms of passage, leaving passengers with no
choice but to buy their tickets and avail of their vessels and facilities. Finally, judicial notice may be taken of the fact
that the bulk of those who board these inter-island vested come from the low-income groups and are less literate,
and who have little or no choice but to avail of petitioner's vessels.
2.
Condition No. 14 is subversive of public policy on transfers of venue of actions. For, although venue may be
changed or transferred from one province to another by agreement of the parties in writing t to Rule 4, Section 3, of
the Rules of Court, such an agreement will not be held valid where it practically negates the action of the claimants,
such as the private respondents herein. The philosophy underlying the provisions on transfer of venue of actions is
the convenience of the plaintiffs as well as his witnesses and to promote 21 the ends of justice. Considering the
expense and trouble a passenger residing outside of Cebu City would incur to prosecute a claim in the City of Cebu,
he would most probably decide not to file the action at all. The condition will thus defeat, instead of enhance, the
ends of justice. Upon the other hand, petitioner has branches or offices in the respective ports of call of its vessels
and can afford to litigate in any of these places. Hence, the filing of the suit in the CFI of Misamis Oriental, as was
done in the instant case, will not cause inconvenience to, much less prejudice, petitioner.
Public policy is ". . . that principle of the law which holds that no subject or citizen can lawfully do that which has a
tendency to be injurious to the public or against the public good ... 22 Under this principle" ... freedom of contract or
private dealing is restricted by law for the good of the public. 23 Clearly, Condition No. 14, if enforced, will be
subversive of the public good or interest, since it will frustrate in meritorious cases, actions of passenger cants outside
of Cebu City, thus placing petitioner company at a decided advantage over said persons, who may have perfectly
legitimate claims against it. The said condition should, therefore, be declared void and unenforceable, as contrary to
public policy to make the courts accessible to all who may have need of their services.
WHEREFORE, the petition for prohibition is DISMISS. ED. The restraining order issued on November 20, 1973, is
hereby LIFTED and SET ASIDE. Costs against petitioner.
Fernando (Chairman), Aquino, Concepcion, Jr., JJ., concur.

Antonio, J., reserves his vote.

HSBC v. JACK ROBERT SHERMAN

G.R. No. 72494 August 11, 1989
HONGKONG AND SHANGHAI BANKING CORPORATION, petitioner,
vs.
JACK ROBERT SHERMAN, DEODATO RELOJ and THE INTERMEDIATE APPELLATE COURT, respondents.
Quiason, Makalintal, Barot & Torres for petitioner.
Alejandro, Aranzaso & Associates for private respondents.

MEDIALDEA, J.:
This is a petition for review on certiorari of the decision of the Intermediate Appellate Court (now Court of Appeals)
dated August 2, 1985, which reversed the order of the Regional Trial Court dated February 28,1985 denying the
Motion to Dismiss filed by private respondents Jack Robert Sherman and Deodato Reloj.
A complaint for collection of a sum of money (pp. 49-52, Rollo) was filed by petitioner Hongkong and Shanghai
Banking Corporation (hereinafter referred to as petitioner BANK) against private respondents Jack Robert Sherman
and Deodato Reloj, docketed as Civil Case No. Q-42850 before the Regional Trial Court of Quezon City, Branch 84.
It appears that sometime in 1981, Eastern Book Supply Service PTE, Ltd. (hereinafter referred to as COMPANY), a
company incorporated in Singapore applied with, and was granted by, the Singapore branch of petitioner BANK an
overdraft facility in the maximum amount of Singapore dollars 200,000.00 (which amount was subsequently increased
to Singapore dollars 375,000.00) with interest at 3% over petitioner BANK prime rate, payable monthly, on amounts
due under said overdraft facility; as a security for the repayment by the COMPANY of sums advanced by petitioner
BANK to it through the aforesaid overdraft facility, on October 7, 1982, both private respondents and a certain Robin
de Clive Lowe, all of whom were directors of the COMPANY at such time, executed a Joint and Several Guarantee (p.
53, Rollo) in favor of petitioner BANK whereby private respondents and Lowe agreed to pay, jointly and severally, on
demand all sums owed by the COMPANY to petitioner BANK under the aforestated overdraft facility.
The Joint and Several Guarantee provides, inter alia, that:
This guarantee and all rights, obligations and liabilities arising hereunder shall be construed and determined under
and may be enforced in accordance with the laws of the Republic of Singapore. We hereby agree that the Courts of
Singapore shall have jurisdiction over all disputes arising under this guarantee. ... (p. 33-A, Rollo).
The COMPANY failed to pay its obligation. Thus, petitioner BANK demanded payment of the obligation from private
respondents, conformably with the provisions of the Joint and Several Guarantee. Inasmuch as the private
respondents still failed to pay, petitioner BANK filed the above-mentioned complaint.
On December 14,1984, private respondents filed a motion to dismiss (pp 54-56, Rollo) which was opposed by
petitioner BANK (pp. 58-62, Rollo). Acting on the motion, the trial court issued an order dated February 28, 1985 (pp,
64-65, Rollo), which read as follows:
In a Motion to Dismiss filed on December 14, 1984, the defendants seek the dismissal of the complaint on two
grounds, namely:
1.

That the court has no jurisdiction over the subject matter of the complaint; and

2.

That the court has no jurisdiction over the persons of the defendants.

In the light of the Opposition thereto filed by plaintiff, the Court finds no merit in the motion. "On the first ground,
defendants claim that by virtue of the provision in the Guarantee (the actionable document) which reads
This guarantee and all rights, obligations and liabilities arising hereunder shall be construed and determined under
and may be enforced in accordance with the laws of the Republic of Singapore. We hereby agree that the courts in
Singapore shall have jurisdiction over all disputes arising under this guarantee,

the Court has no jurisdiction over the subject matter of the case. The Court finds and concludes otherwise. There is
nothing in the Guarantee which says that the courts of Singapore shall have jurisdiction to the exclusion of the courts
of other countries or nations. Also, it has long been established in law and jurisprudence that jurisdiction of courts is
fixed by law; it cannot be conferred by the will, submission or consent of the parties.
On the second ground, it is asserted that defendant Robert' , Sherman is not a citizen nor a resident of the
Philippines. This argument holds no water. Jurisdiction over the persons of defendants is acquired by service of
summons and copy of the complaint on them. There has been a valid service of summons on both defendants and in
fact the same is admitted when said defendants filed a 'Motion for Extension of Time to File Responsive Pleading on
December 5, 1984.
WHEREFORE, the Motion to Dismiss is hereby DENIED.
SO ORDERED.
A motion for reconsideration of the said order was filed by private respondents which was, however, denied (p. 66,
Rollo).
Private respondents then filed before the respondent Intermediate Appellate Court (now Court of Appeals) a petition
for prohibition with preliminary injunction and/or prayer for a restraining order (pp. 39-48, Rollo). On August 2, 1985,
the respondent Court rendered a decision (p. 37, Rollo), the dispositive portion of which reads:
WHEREFORE, the petition for prohibition with preliminary injuction is hereby GRANTED. The respondent Court is
enjoined from taking further cognizance of the case and to dismiss the same for filing with the proper court of
Singapore which is the proper forum. No costs.
SO ORDERED.
The motion for reconsideration was denied (p. 38, Rollo), hence, the present petition.
The main issue is whether or not Philippine courts have jurisdiction over the suit.
The controversy stems from the interpretation of a provision in the Joint and Several Guarantee, to wit:
(14)
This guarantee and all rights, obligations and liabilites arising hereunder shall be construed and determined
under and may be enforced in accordance with the laws of the Republic of Singapore. We hereby agree that the
Courts in Singapore shall have jurisdiction over all disputes arising under this guarantee. ... (p. 53-A, Rollo)
In rendering the decision in favor of private respondents, the Court of Appeals made, the following observations (pp.
35-36, Rollo):
There are significant aspects of the case to which our attention is invited. The loan was obtained by Eastern Book
Service PTE, Ltd., a company incorporated in Singapore. The loan was granted by the Singapore Branch of Hongkong
and Shanghai Banking Corporation. The Joint and Several Guarantee was also concluded in Singapore. The loan was
in Singaporean dollars and the repayment thereof also in the same currency. The transaction, to say the least, took
place in Singporean setting in which the law of that country is the measure by which that relationship of the parties
will be governed.
xxx xxx xxx
Contrary to the position taken by respondents, the guarantee agreement compliance that any litigation will be before
the courts of Singapore and that the rights and obligations of the parties shall be construed and determined in
accordance with the laws of the Republic of Singapore. A closer examination of paragraph 14 of the Guarantee
Agreement upon which the motion to dismiss is based, employs in clear and unmistakeable (sic) terms the word 'shall'
which under statutory construction is mandatory.
Thus it was ruled that:
... the word 'shall' is imperative, operating to impose a duty which may be enforced (Dizon vs. Encarnacion, 9 SCRA
714).lwph1.t

There is nothing more imperative and restrictive than what the agreement categorically commands that 'all rights,
obligations, and liabilities arising hereunder shall be construed and determined under and may be enforced in
accordance with the laws of the Republic of Singapore.'
While it is true that "the transaction took place in Singaporean setting" and that the Joint and Several Guarantee
contains a choice-of-forum clause, the very essence of due process dictates that the stipulation that "[t]his guarantee
and all rights, obligations and liabilities arising hereunder shall be construed and determined under and may be
enforced in accordance with the laws of the Republic of Singapore. We hereby agree that the Courts in Singapore
shall have jurisdiction over all disputes arising under this guarantee" be liberally construed. One basic principle
underlies all rules of jurisdiction in International Law: a State does not have jurisdiction in the absence of some
reasonable basis for exercising it, whether the proceedings are in rem quasi in rem or in personam. To be reasonable,
the jurisdiction must be based on some minimum contacts that will not offend traditional notions of fair play and
substantial justice (J. Salonga, Private International Law, 1981, p. 46). Indeed, as pointed-out by petitioner BANK at
the outset, the instant case presents a very odd situation. In the ordinary habits of life, anyone would be disinclined
to litigate before a foreign tribunal, with more reason as a defendant. However, in this case, private respondents are
Philippine residents (a fact which was not disputed by them) who would rather face a complaint against them before
a foreign court and in the process incur considerable expenses, not to mention inconvenience, than to have a
Philippine court try and resolve the case. Private respondents' stance is hardly comprehensible, unless their ultimate
intent is to evade, or at least delay, the payment of a just obligation.
The defense of private respondents that the complaint should have been filed in Singapore is based merely on
technicality. They did not even claim, much less prove, that the filing of the action here will cause them any
unnecessary trouble, damage, or expense. On the other hand, there is no showing that petitioner BANK filed the
action here just to harass private respondents.
In the case of Polytrade Corporation vs. Blanco, G.R. No. L-27033, October 31, 1969, 30 SCRA 187, it was ruled:
... An accurate reading, however, of the stipulation, 'The parties agree to sue and be sued in the Courts of Manila,'
does not preclude the filing of suits in the residence of plaintiff or defendant. The plain meaning is that the parties
merely consented to be sued in Manila. Qualifying or restrictive words which would indicate that Manila and Manila
alone is the venue are totally absent therefrom. We cannot read into that clause that plaintiff and defendant bound
themselves to file suits with respect to the last two transactions in question only or exclusively in Manila. For, that
agreement did not change or transfer venue. It simply is permissive. The parties solely agreed to add the courts of
Manila as tribunals to which they may resort. They did not waive their right to pursue remedy in the courts specifically
mentioned in Section 2(b) of Rule 4. Renuntiatio non praesumitur.
This ruling was reiterated in the case of Neville Y. Lamis Ents., et al. v. Lagamon, etc., et al., G.R. No. 57250, October
30, 1981, 108 SCRA 740, where the stipulation was "[i]n case of litigation, jurisdiction shall be vested in the Court of
Davao City." We held:
Anent the claim that Davao City had been stipulated as the venue, suffice it to say that a stipulation as to venue does
not preclude the filing of suits in the residence of plaintiff or defendant under Section 2 (b), Rule 4, Rules of Court, in
the absence of qualifying or restrictive words in the agreement which would indicate that the place named is the only
venue agreed upon by the parties.
Applying the foregoing to the case at bar, the parties did not thereby stipulate that only the courts of Singapore, to
the exclusion of all the rest, has jurisdiction. Neither did the clause in question operate to divest Philippine courts of
jurisdiction. In International Law, jurisdiction is often defined as the light of a State to exercise authority over persons
and things within its boundaries subject to certain exceptions. Thus, a State does not assume jurisdiction over
travelling sovereigns, ambassadors and diplomatic representatives of other States, and foreign military units stationed
in or marching through State territory with the permission of the latter's authorities. This authority, which finds its
source in the concept of sovereignty, is exclusive within and throughout the domain of the State. A State is competent
to take hold of any judicial matter it sees fit by making its courts and agencies assume jurisdiction over all kinds of
cases brought before them (J. Salonga, Private International Law, 1981, pp. 37-38).lwph1.t
As regards the issue on improper venue, petitioner BANK avers that the objection to improper venue has been
waived. However, We agree with the ruling of the respondent Court that:
While in the main, the motion to dismiss fails to categorically use with exactitude the words 'improper venue' it can be
perceived from the general thrust and context of the motion that what is meant is improper venue, The use of the
word 'jurisdiction' was merely an attempt to copy-cat the same word employed in the guarantee agreement but
conveys the concept of venue. Brushing aside all technicalities, it would appear that jurisdiction was used loosely as to
be synonymous with venue. It is in this spirit that this Court must view the motion to dismiss. ... (p. 35, Rollo).

At any rate, this issue is now of no moment because We hold that venue here was properly laid for the same reasons
discussed above.
The respondent Court likewise ruled that (pp. 36-37, Rollo):
... In a conflict problem, a court will simply refuse to entertain the case if it is not authorized by law to exercise
jurisdiction. And even if it is so authorized, it may still refuse to entertain the case by applying the principle of forum
non conveniens. ...
However, whether a suit should be entertained or dismissed on the basis of the principle of forum non conveniens
depends largely upon the facts of the particular case and is addressed to the sound discretion of the trial court (J.
Salonga, Private International Law, 1981, p. 49).lwph1.t Thus, the respondent Court should not have relied on
such principle.
Although the Joint and Several Guarantee prepared by petitioner BANK is a contract of adhesion and that
consequently, it cannot be permitted to take a stand contrary to the stipulations of the contract, substantial bases
exist for petitioner Bank's choice of forum, as discussed earlier.
Lastly, private respondents allege that neither the petitioner based at Hongkong nor its Philippine branch is involved
in the transaction sued upon. This is a vain attempt on their part to further thwart the proceedings below inasmuch as
well-known is the rule that a defendant cannot plead any defense that has not been interposed in the court below.
ACCORDINGLY, the decision of the respondent Court is hereby REVERSED and the decision of the Regional Trial Court
is REINSTATED, with costs against private respondents. This decision is immediately executory.
SO ORDERED.
Narvasa, Cruz, Gancayco and Gri;o-Aquino, JJ., concur.

WHITE v. TENNANT
In White v Tennant [10] it was held that residence of only a few hours was sufficient after the propositus had left his
belongings in Pennsylvania, despite returning to lodge with relatives for the night in his previous domicile of West
Virginia and dying there.
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That the emphasis is upon the animusrather than the duration of residence has the consequence that even a brief
residence may be sufficient to acquire a domicile of choice. This can be illustrated by a case arising in West Virginia
where the court was confronted with the problem of a very brief residence.
The facts of White v Tennant54 were unremarkable: a family were moving home. The man abandoned his home in
State A and moved about half a mile to his new home in State B. Having put their belongings in the new house, the
family returned to their old State as the new house was not ready to inhabit.
When the man died during the night the court decided that he died domiciled in State B and not State A.
It should be remembered that each State in the USA represents a separate country for the purposes of the conflict of
laws. In White v Tennant,55 the evidence as to the animus was clear.
Domicile of choice
Every independent person can acquire a domicile of choice by thecombination of
residence
and
intention
of permanent orindefinite residence.
Residence
Residence means physical presence as an inhabitant (see
IRC
v
Duchess of Portland
[1982] Ch 314, 318-319). It is not necessary that residence should be of long duration. In an American case(
White
v
Tennant
8 SE 596 [1888]), part of a day was enough. An immigrant can acquire a domicile immediately on arrival if he or she
intends to settle.
White v. Tennant (WV SC 1888) (Cb. 25)
domicile (at time of death)
ambiguous move within property
across WV/PA border, White had moved to PA and had no intention of returning although he died in WV law of state
of decedent's domicile at time of death
White v. Tennant
772 F.2d 909 (6th Cir. 1985)
JURISDICTION United States Court of Appeals, Sixth Circuit
FULL TITLE
Unpublished Disposition NOTICE: Sixth Circuit Rule 24(c) states that citation of unpublished
dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of
copies of cited unpublished dispositions of the Sixth Circuit. HOWARD LEE WHITE,, v. PAULA TENNANT; REGIONAL
COMMISSIONER OF U.S. PAROLE COMMISSION, ATLANTA, GEORGIA; ROBERT GROBMEYER, U.S. PROBATION
OFFICER, MEMPHIS, TENNESSEE; AND U.S. MARSHAL'S SERVICE, MEMPHIS, TENNESSEE, NO. 85-5160
SHORT TITLE White v. Tennant
CITATION
772 F.2d 909 (6th Cir. 1985)
DOCKET
PETITIONER-APPELLANT, RESPONDENTS-APPELLEES
DECIDED
Aug. 16, 1985
ARGUED

PRIOR HISTORY
SUBSEQUENT HISTORY
LAWS APPLIED
TEXT
*909 909
772 F.2d 909
Unpublished Disposition
NOTICE: Sixth Circuit Rule 24(c) states that citation of unpublished dispositions is disfavored except for establishing
res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the
Sixth Circuit.
HOWARD LEE WHITE, PETITIONER-APPELLANT,
v.
PAULA TENNANT; REGIONAL COMMISSIONER OF U.S. PAROLE
COMMISSION, ATLANTA, GEORGIA; ROBERT GROBMEYER, U.S.
PROBATION OFFICER, MEMPHIS, TENNESSEE; AND U.S. MARSHAL'S
SERVICE, MEMPHIS, TENNESSEE, RESPONDENTS-APPELLEES.
NO. 85-5160
United States Court of Appeals, Sixth Circuit.
8/16/85
W.D.Tenn.
AFFIRMED
ORDER
Before: KENNEDY and KRUPANSKY, Circuit Judges; and DOWN, * District Judge.
Petitioner appeals the order dismissing his habeas corpus petition brought under 28 U.S.C. Sec. 2241. He has also
filed a motion to prohibit his transfer under Rule 23(a) of the Federal Rules of Appellate Procedure. The case has
been referred to a panel of this Court pursuant to Sixth Circuit Rule 9(a). Upon examination of the briefs and the
record, the panel agrees unanimously that oral argument is not needed. Rule 34(a), Federal Rules of Appellate
Procedure.
Petitioner, a federal prisoner, filed this habeas corpus petition challenging actions of the United States Parole
Commission. The District Court dismissed the petition sua sponte on the grounds that petitioner failed to exhaust his
administrative remedies prior to filing a habeas action. The District Court was correct in dismissing the action. See
Little v. Hopkins, 638 F.2d 953 (6th Cir. 1981). Appellant has advised this Court that the Parole Commission,
subsequent to the filing of the appeal, issued a final decision on May 24, 1985, revoking petitioner's parole. If this is
the case, petitioner may file a new action. It is not grounds to reverse the judgment of the District Court.
Petitioner has filed a motion for this Court to issue an 'emergency' order prohibiting his transfer in violation of
procedures set forth in Rule 23(a), Federal Rules of Appellate Procedure. Petitioner has failed to show that a transfer
is imminent at this time or that any special circumstances warrant such extraordinary action by this Court. However,
we note that the Rule 23(a) procedures should be followed if the Warden contemplates a transfer of petitioner.
Accordingly, it is ORDERED that the motion to prohibit transfer is denied. The District Court's judgment is affirmed.
--------------* The Honorable David D. Dowd, Jr., United States District Judge for the Northern District of Ohio, sitting by
designation.

Cases for JURISDICTION OVER THE PERSON

INTERNATIONAL SHOE CO. v. WASHINGTON

INTERNATIONAL SHOE CO. v. WASHINGTON, 326 U.S. 310 (1945)
326 U.S. 310
INTERNATIONAL SHOE CO.
v.
STATE OF WASHINGTON, OFFICE OF UNEMPLOYMENT COMPENSATION AND PLACEMENT et al.
No. 107.
Decided Dec. 3, 1945.
Appeal from the Supreme Court of the State of Washington. [326 U.S. 310, 311] Mr. Henry C. Lowenhaupt, of St.
Louis Mo., for appellant.
Mr. George W. Wilkins, of Olympia, Wash., for appellees.
Mr. Chief Justice STONE delivered the opinion of the Court.
The questions for decision are (1) whether, within the limitations of the due process clause of the Fourteenth
Amendment, appellant, 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 exacted by state statutes, Washington Unemployment Compensation Act, Washington Revised
Statutes, 9998-103a through 9998-123a, 1941 Supp., and (2) whether the state can exact those contributions
consistently with the due process clause of the Fourteenth Amendment.
The statutes in question set up a comprehensive scheme of unemployment compensation, the costs of which are
defrayed by contributions required to be made by employers to a state unemployment compensation fund. [326 U.S.
310, 312] The contributions are a specified percentage of the wages payable annually by each employer for his
employees' services in the state. The assessment and collection of the contributions and the fund are administered by
respondents. Section 14(c) of the Act, Wash.Rev.Stat. 1941 Supp., 9998- 114c, authorizes respondent Commissioner
to issue an order and notice of assessment of delinquent contributions upon prescribed personal service of the notice
upon the employer if found within the state, or, if not so found, by mailing the notice to the employer by registered
mail at his last known address. That section also authorizes the Commissioner to collect the assessment by distraint if
it is not paid within ten days after service of the notice. By 14(e) and 6(b) the order of assessment may be
administratively reviewed by an appeal tribunal within the office of unemployment upon petition of the employer, and
this determination is by 6(i) made subject to judicial review on questions of law by the state Superior Court, with
further right of appeal in the state Supreme Court as in other civil cases.
In this case notice of assessment for the years in question was personally served upon a sales solicitor employed by
appellant in the State of Washington, and a copy of the notice was mailed by registered mail to appellant at its
address in St. Louis, Missouri. 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; that appellant was not a corporation of the State of Washington and was not doing business within
the state; that it had no agent within the state upon whom service could be made; and that appellant is not an
employer and does not furnish employment within the meaning of the statute.
The motion was heard on evidence and a stipulation of facts by the appeal tribunal which denied the motion [326
U.S. 310, 313] and ruled that respondent Commissioner was entitled to recover the unpaid contributions. That
action was affirmed by the Commissioner; both the Superior Court and the Supreme Court affirmed. 154 P.2d 801.
Appellant in each of these courts assailed the statute as applied, as a violation of the due process clause of the
Fourteenth Amendment, and as imposing a constitutionally prohibited burden on interstate commerce. The cause
comes here on appeal under 237(a) of the Judicial Code, 28 U.S.C. 344(a), 28 U.S.C.A. 344(a), appellant assigning as
error that the challenged statutes as applied infringe the due process clause of the Fourteenth Amendment and the
commerce clause.
The facts as found by the appeal tribunal and accepted by the state Superior Court and Supreme Court, are not in
dispute. Appellant is a Delaware corporation, having its principal place of business in St. Louis, Missouri, and is
engaged in the manufacture and sale of shoes and other footwear. It maintains places of business in several states,
other than Washington, at which its manufacturing is carried on and from which its merchandise is distributed
interstate through several sales units or branches located outside the State of Washington.

Appellant has no office in Washington and makes no contracts either for sale or purchase of merchandise there. It
maintains no stock of merchandise in that state and makes there no deliveries of goods in intrastate commerce.
During the years from 1937 to 1940, now in question, appellant employed eleven to thirteen salesmen under direct
supervision and control of sales managers located in St. Louis. These salesmen resided in Washington; their principal
activities were confined to that state; and they were compensated by commissions based upon the amount of their
sales. The commissions for each year totaled more than $31,000. Appellant supplies its salesmen with a line of
samples, each consisting of one shoe of a pair, which [326 U.S. 310, 314] they display to prospective purchasers.
On occasion they rent permanent sample rooms, for exhibiting samples, in business buildings, or rent rooms in hotels
or business buildings temporarily for that purpose. The cost of such rentals is reimbursed by appellant.
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, and 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 Supreme Court of Washington was of opinion that the regular and systematic solicitation of orders in the state by
appellant's salesmen, resulting in a continuous flow of appellant's product into the state, was sufficient to constitute
doing business in the state so as to make appellant amenable to suit in its courts. But it was also of opinion that there
were sufficient additional activities shown to bring the case within the rule frequently stated, that solicitation within a
state by the agents of a foreign corporation plus some additional activities there are sufficient to render the
corporation amenable to suit brought in the courts of the state to enforce an obligation arising out of its activities
there. International Harvester Co. v. Kentucky, 234 U.S. 579, 587 , 34 S.Ct. 944, 946; People's Tobacco Co. v.
American Tobacco Co., 246 U.S. 79, 87 , 38 S.Ct. 233, 235, Ann.Cas.1918C, 537; Frene v. Louisville Cement Co., 77
U.S.App.D.C. 129, 134 F.2d 511, 516, 146 A.L.R. 926. The court found such additional activities in the salesmen's
display of samples sometimes in permanent display rooms, and the salesmen's residence within the state, continued
over a period of years, all resulting in a [326 U.S. 310, 315] substantial volume of merchandise regularly shipped by
appellant to purchasers within the state. The court also held that the statute as applied did not invade the
constitutional power of Congress to regulate interstate commerce and did not impose a prohibited burden on such
commerce.
Appellant's argument, renewed here, that the statute imposes an unconstitutional burden on interstate commerce
need not detain us. For 53 Stat. 1391, 26 U.S.C. 1606(a), 26 U.S.C.A. Int.Rev.Code, 1606(a), provides that 'No person
required under a State law to make payments to an unemployment fund shall be relieved from compliance therewith
on the ground that he is engaged in interstate or foreign commerce, or that the State law does not distinguish
between employees engaged in interstate or foreign commerce and those engaged in intrastate commerce.' 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. Kentucky Whip & Collar Co. v. Illinois Central R. Co., 299
U.S. 334 , 57 S.Ct. 277; Perkins v. Pennsylvania, 314 U.S. 586 , 62 S.Ct. 484; Standard Dredging Corp. v. Murphy,
319 U.S. 306, 308 , 63 S.Ct. 1067, 1068; Hooven & Allison v. Evatt, 324 U.S. 652, 679 , 65 S.Ct. 870, 883; Southern
Pacific Co. v. Arizona, 325 U.S. 761, 769 , 65 S.Ct. 1515, 1520
Appellant also insists that its activities within the state were not sufficient to manifest its 'presence' there and that in
its absence the state courts were without jurisdiction, that consequently it was a denial of due process for the state to
subject appellant to suit. It refers to those cases in which it was said that the mere solicitation of orders for the
purchase of goods within a state, to be accepted without the state and filled by shipment of the purchased goods
interstate, does not render the corporation seller amenable to suit within the state. See Green v. Chicago, Burlington
& Quincy R. Co., 205 U.S. 530, 533 , 27 S.Ct. 595, 596; International Harvester Co. v. Kentucky, supra, 234 U.S. 586,
587 , 34 S.Ct. 946; Philadelphia [326 U.S. 310, 316] & Reading R. Co. v. McKibbin, 243 U.S. 264, 268 , 37 S.Ct. 280;
People's Tobacco Co. v. American Tobacco Co., supra, 246 U.S. 87 , 38 S.Ct. 235, Ann.Cas.1918C, 537. And appellant
further argues that since it was not present within the state, it is a denial of due process to subject it to taxation or
other money exaction. It thus denies the power of the state to lay the tax or to subject appellant to a suit for its
collection.
Historically the jurisdiction of courts to render judgment in personam is grounded on their de facto power over the
defendant's person. Hence his presence within the territorial jurisdiction of court was prerequisite to its rendition of a
judgment personally binding him. Pennoyer v. Neff, 95 U.S. 714 , 733. But now that the capias ad respondendum has
given way to personal service of summons or other form of notice, due process requires only 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 certain
minimum contacts with it such that the maintenance of the suit does not offend 'traditional notions of fair play and
substantial justice.' Milliken v. Meyer, 311 U.S. 457, 463 , 61 S.Ct. 339, 343, 132 A.L.R. 1357. See Holmes, J., in

McDonald v. Mabee, 243 U.S. 90, 91 , 37 S.Ct. 343, L.R.A.1917F, 458. Compare Hoopeston Canning Co. v. Cullen,
318 U.S. 313, 316 , 319 S., 63 S.Ct. 602, 604, 606, 145 A.L.R. 1113. See Blackmer v. United States, 284 U.S. 421 , 52
S.Ct. 252; Hess v. Pawloski, 274 U.S. 352 , 47 S.Ct. 632; Young v. Masci, 289 U.S. 253 , 53 S.Ct. 599, 88 A.L.R. 170.
Since the corporate personality is a fiction, although a fiction intended to be acted upon as though it were a fact,
Klein v. Board of Tax Supervisors, 282 U.S. 19, 24 , 51 S.Ct. 15, 16, 73 A.L.R. 679, it is clear that unlike an individual
its 'presence' without, as well as within, the state of its origin can be manifested only by activities carried on in its
behalf by those who are authorized to act for it. To say that the corporation is so far 'present' there as to satisfy due
process requirements, for purposes of taxation or the maintenance of suits against it in the courts of the state, is to
beg the question to be decided. For the terms 'present' or 'presence' are [326 U.S. 310, 317] used merely to
symbolize those activities of the corporation's agent within the state which courts will deem to be sufficient to satisfy
the demands of due process. L. Hand, J., in Hutchinson v. Chase & Gilbert, 2 Cir., 45 F.2d 139, 141. Those demands
may be met by such contacts of the corporation with the state of the forum as make it reasonable, in the context of
our federal system of government, to require the corporation to defend the particular suit which is brought there. An
'estimate of the inconveniences' which would result to the corporation from a trial away from its 'home' or principal
place of business is relevant in this connection. Hutchinson v. Chase & Gilbert, supra, 45 F.2d 141.
'Presence' in the state in this sense has never been doubted when the activities of the corporation there have not only
been continuous and systematic, but also give rise to the liabilities sued on, even though no consent to be sued or
authorization to an agent to accept service of process has been given. St. Clair v. Cox, 106 U.S. 350, 355 , 1 S.Ct.
354, 359; Connecticut Mutual Life Ins. Co. v. Spratley, 172 U.S. 602, 610 , 611 S., 19 S.Ct. 308, 311, 312;
Pennsylvania Lumbermen's Mut. Fire Ins. Co. v. Meyer, 197 U.S. 407, 414 , 415 S., 25 S.Ct. 483, 484, 485;
Commercial Mutual Accident Co. v. Davis, 213 U.S. 245, 255 , 256 S., 29 S.Ct. 445, 448; International Harvester Co.
v. Kentucky, supra; cf. St. Louis S.W.R. Co. v. Alexander, 227 U.S. 218 , 33 S.Ct. 245, Ann.Cas.1915B, 77. Conversely
it has been generally recognized that the casual presence of the corporate agent or even his conduct of single or
isolated items of activities in a state in the corporation's behalf are not enough to subject it to suit on causes of action
unconnected with the activities there. St. Clair v. Cox, supra, 106 U.S. 359, 360 , 1 S.Ct. 362, 363; Old Wayne Mut.
Life Ass'n v. McDonough, 204 U.S. 8, 21 , 27 S.Ct. 236, 240; Frene v. Louisville Cement Co., supra, 77 U.S.App.D.C.
133, 134 F.2d 515, 146 A.L.R. 926, and cases cited. To require the corporation in such circumstances to defend the
suit away from its home or other jurisdiction where it carries on more substantial activities has been thought to lay
too great and unreasonable a burden on the corporation to comport with due process. [326 U.S. 310, 318] While it
has been held in cases on which appellant relies that continuous activity of some sorts within a state is not enough to
support the demand that the corporation be amenable to suits unrelated to that activity, Old Wayne Mut. Life Ass'n v.
McDonough, supra; Green v. Chicago, Burlington & Quincy R. Co., supra; Simon v. Southern R. Co., 236 U.S. 115 , 35
S.Ct. 255; People's Tobacco Co. v. American Tobacco Co., supra; cf. Davis v. Farmers' Co-operative Equity Co., 262
U.S. 312, 317 , 43 S.Ct. 556, 558, there have been instances in which the continuous corporate operations within a
state were thought so substantial and of such a nature as to justify suit against it on causes of action arising from
dealings entirely distinct from those activities. See Missouri, K. & T.R. Co. v. Reynolds, 255 U.S. 565 , 41 S.Ct. 446;
Tauza v. Susquehanna Coal Co., 220 N.Y. 259, 115 N.E. 915; cf. St. Louis S.W.R. Co. v. Alexander, supra.
Finally, although the commission of some single or occasional acts of the corporate agent in a state sufficient to
impose an obligation or liability on the corporation has not been thought to confer upon the state authority to enforce
it, Rosenberg Bros. & Co. v. Curtis Brown Co., 260 U.S. 516 , 43 S.Ct. 170, other such acts, because of their nature
and quality and the circumstances of their commission, may be deemed sufficient to render the corporation liable to
suit. Cf. Kane v. New Jersey, 242 U.S. 160 , 37 S.Ct. 30; Hess v. Pawloski, supra; Young v. Masci, supra. True, some
of the decisions holding the corporation amenable to suit have been supported by resort to the legal fiction that it has
given its consent to service and suit, consent being implied from its presence in the state through the acts of its
authorized agents. Lafayette Insurance Co. v. French, 18 How. 404, 407; St. Clair v. Cox, supra, 106 U.S. 356 , 1
S.Ct. 359; Commercial Mutual Accident Co. v. Davis, supra, 213 U.S. 254 , 29 S.Ct. 447; State of Washington v.
Superior Court, 289 U.S. 361, 364 , 365 S., 53 S.Ct. 624, 626, 627, 89 A.L.R. 653. But more realistically it may be said
that those authorized acts were of such a nature as to justify the fiction. Smolik v. Philadelphia & [326 U.S. 310, 319]
R.C. & I. Co., D.C., 222 F. 148, 151. Henderson, The Position of Foreign Corporations in American Constitutional Law,
94, 95.
It is evident that the criteria by which we 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. The test is not merely,
as has sometimes been suggested, whether the activity, which the corporation has seen fit to procure through its
agents in another state, is a little more or a little less. St. Louis S.W.R. Co. v. Alexander, supra, 227 U.S. 228 , 33
S.Ct. 248, Ann.Cas. 1915B, 77; International Harvestor Co. v. Kentucky, supra, 234 U.S. 587 , 34 S.Ct. 946. Whether
due process is satisfied must depend rather 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. That clause does not
contemplate that a state may make binding a judgment in personam against an individual or corporate defendant
with which the state has no contacts, ties, or relations. Cf. Pennoyer v. Neff, supra; Minnesota Commercial Men's
Ass'n v. Benn, 261 U.S. 140 , 43 S.Ct. 293.

But 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. The exercise of that privilege may give rise to obligations; and, 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, in most instances, hardly be said to be undue. Compare
International Harvester Co. v. Kentucky, supra, with Green v. Chicago, Burlington & Quincy R. Co., supra, and
People's Tobacco Co. v. American Tobacco Co., supra. Compare Connecticut Mutual Life Ins. Co. v. Spratley, supra,
172 U.S. 619, 620 , 19 S.Ct. 314, 315, and Commercial Mutual Accident Co. v. Davis, supra, with Old Wayne Mut. Life
Ass'n v. McDonough, supra. See 29 Columbia Law Review, 187-195. [326 U.S. 310, 320] Applying these standards,
the activities carried on in behalf of appellant in the State of Washington were neither irregular nor casual. They were
systematic and continuous throughout the years in question. They resulted in a large volume of interstate business, in
the course of which appellant received the benefits and protection of the laws of the state, including the right to
resort to the courts for the enforcement of its rights. The obligation which is here sued upon arose out of those very
activities. It is evident that these operations establish sufficient contacts or ties with the state of the forum to make it
reasonable and just according to our traditional conception of fair play and substantial justice to permit the state to
enforce the obligations which appellant has incurred there. Hence we cannot say that the maintenance of the present
suit in the State of Washington involves an unreasonable or undue procedure.
We are likewise unable to conclude that the service of the process within the state upon an agent whose activities
establish appellant's 'presence' there was not sufficient notice of the suit, or that the suit was so unrelated to those
activities as to make the agent an inappropriate vehicle for communicating the notice. It is enough that appellant has
established such contacts with the state that the particular form of substituted service adopted there gives reasonable
assurance that the notice will be actual. Connecticut Mutual Life Ins. Co. v. Spratley, supra, 172 U.S. 618, 619 , 19
S.Ct. 314, 315; Board of Trade v. Hammond Elevator Co., 198 U.S. 424, 437 , 438 S., 25 S.Ct. 740, 743, 744;
Commercial Mutual Accident Co. v. Davis, supra, 213 U.S. 254, 255 , 29 S.Ct. 447, 448. Cf. Riverside & Dan River
Cotton Mills v. Menefee, 237 U.S. 189, 194 , 195 S., 35 S.Ct. 579, 580, 581; see Knowles v. Gaslight & Coke Co., 19
Wall. 58, 61; McDonald v. Mabee, supra; Milliken v. Meyer, supra. Nor can we say that the mailing of the notice of
suit to appellant by registered mail at its home office was not reasonably calculated to apprise appellant of the suit.
Compare Hess v. Pawloski, supra, with McDonald v. Mabee, supra, 243 U.S. [326 U.S. 310, 321] 92, 37 S.Ct. 344,
L.R.A.1917F, 458, and Wuchter v. Pizzutti, 276 U.S. 13, 19 , 24 S., 48 S.Ct. 259, 260, 262, 57 A.L.R. 1230; cf. Bequet
v. MacCarthy, 2 B. & Ad. 951; Maubourquet v. Wyse, 1 Ir.Rep.C.L. 471. See State of Washington v. Superior Court,
supra, 289 U.S. 365 , 53 S. Ct. 626, 89 A.L.R. 653.
Only a word need be said of appellant's liability for the demanded contributions of the state unemployment fund. 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. This construction we accept for purposes of determining the constitutional validity of the
statute. The right to employ labor has been deemed an appropriate subject of taxation in this country and England,
both before and since the adoption of the Constitution. Steward Machine Co. v. Davis, 301 U.S. 548 , 579 et seq., 57
S.Ct. 883, 887 et seq., 109 A.L.R. 1293. And such a tax imposed upon the employer for unemployment benefits is
within the constitutional power of the states. Carmichael v. Southern Coal & Coke Co., 301 U.S. 495 , 508 et seq., 57
S.Ct. 868, 871 et seq., 109 A.L.R. 1327.
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. For 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. The state thus has constitutional power to lay the tax and to subject
appellant to a suit to recover it. The activities which establish its 'presence' subject it alike to taxation by the state and
to suit to recover the tax. Equitable Life Assur. Society v. Pennsylvania, 238 U.S. 143, 146 , 35 S.Ct. 829, 830; cf.
International Harvester Co. v. Wisconsin Department of Taxation, 322 U.S. 435 , 442 et seq., 64 S.Ct. 1060, 1064 et
seq.; Hoopeston Canning Co. v. Cullen, [326 U.S. 310, 322] supra, 318 U.S. 316 -319, 63 S.Ct. 604-606, 145 A.L.R.
113; see General Trading Co. v. State Tax Com., 322 U.S. 335, 349 , 64 S.Ct. 1028, 1030, 1319.
AFFIRMED.
Mr. Justice JACKSON took no part in the consideration or decision of this case.
Mr. Justice BLACK delivered the following opinion.
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. 26 U.S.C. 1606, 26 U.S.C.A.
Int.Rev.Code, 1606. We have twice decided that this Congressional consent is an adequate answer to a claim that

imposition of the tax violates the Commerce Clause. Perkins v. Pennsylvania, 314 U.S. 586 , 62 S.Ct. 484, affirming
342 Pa. 529, 21 A.2d 45; Standard Dredging Corp. v. Murphy, 319 U.S. 306, 308 , 63 S.Ct. 1067, 1068. Two
determinations by this Court of an issue so palpably without merit are sufficient. Consequently that part of this appeal
which again seeks to raise the question seems so patently frivolous as to make the case a fit candidate for dismissal.
Fay v. Crozer, 217 U.S. 455 , 30 S. Ct. 568. Nor is the further ground advanced on this appeal, that the State of
Washington has denied appellant due process of law, any less devoid of substance. It is my view, therefore, that we
should dismiss the appeal as unsubstantial,1 Seaboard Air Line R. Co. v. Watson, 287 U.S. 86, 90 , 92 S., 53 S.Ct. 32,
34, 35, 86 A.L.R. 174; and decline the invitation to formulate broad rules as to the meaning of due process, which
here would amount to deciding a constitutional question 'in advance of the necessity for its decision.' Alabama State
Federation of Labor v. McAdory, 325 U.S. 450, 461 , 65 S.Ct. 1384, 1389, 1734. [326 U.S. 310, 323] Certainly
appellant can not in the light of our past decisions meritoriously claim that notice by registered mail and by personal
service on its sales solicitors in Washington did not meet the requirements of procedural due process. And the due
process clause is not brought in issue any more by appellant's further conceptualistic contention that Washington
could not levy a tax or bring suit against the corporation because it did not honor that State with its mystical
'presence.' For 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. To read this into the due process clause would in fact result in
depriving a State's citizens of due process by taking from the State the power to protect them in their business
dealings within its boundaries with representatives of a foreign corporation. Nothing could be more irrational or more
designed to defeat the function of our federative system of government. Certainly a State, at the very least, has
power to tax and sue those dealing with its citizens within its boundaries, as we have held before. Hoopeston Canning
Co. v. Cullen, 318 U.S. 313 , 63 S.Ct. 602, 145 A.L.R. 1113. Were the Court to follow this principle, it would provide a
workable standard for cases where, as here, no other questions are involved. The Court has not chosen to do so, but
instead has engaged in an unnecessary discussion in the course of which it has announced vague Constitutional
criteria applied for the first time to the issue before us. It has thus introduced uncertain elements confusing the
simple pattern and tending to curtail the exercise of State powers to an extent not justified by the Constitution.
The criteria adopted insofar as they can be identified read as follows: Due process does permit State courts to
'enforce the obligations which appellant has incurred' if [326 U.S. 310, 324] it be found 'reasonable and just
according to our traditional conception of fair play and substantial justice.' And this in turn means that we will 'permit'
the State to act if upon 'an 'estimate of the inconveniences' which would result to the corporation from a trial away
from its 'home' or principal place of business', we conclude that it is 'reasonable' to subject it to suit in a State where
it is doing business.
It is true that this Court did use the terms 'fair play' and 'substantial justice' in explaining the philosophy underlying
the holding that it could not be 'due process of law' to render a personal judgment against a defendant without notice
to and an opportunity to be heard by him. Milliken v. Meyer, 311 U.S. 457 , 61 S.Ct. 339, 132 A.L. R. 1357. In
McDonald v. Mabee, 243 U.S. 90, 91 , 37 S.Ct. 343, L.R.A.1917F, 458, cited in the Milliken case, Mr. Justice Holmes
speaking for the Court warned against judicial curtailment of this opportunity to be heard and referred to such a
curtailment as a denial of 'fair play', which even the common law would have deemed 'contrary to natural justice.' And
previous cases had indicated that the ancient rule against judgments without notice had stemmed from 'natural
justice' concepts. These cases, while giving additional reasons why notice under particular circumstances is
inadequate, did not mean thereby that all legislative enactments which this Court might deem to be contrary to
natural justice ought to be held invalid under the due process clause. None of the cases purport to support or could
support a holding that a State can tax and sue corporations only if its action comports with this Court's notions of
'natural justice.' I should have thought the Tenth Amendment settled that.
I believe 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. Believing that the
Constitution gave the States that power, I think it a judicial deprivation to condition its exercise upon this [326 U.S.
310, 325] Court's notion of 'fairplay', however appealing that term may be. Nor can I stretch the meaning of due
process so far as to authorize this Court to deprive a State of the right to afford judicial protection to its citizens on
the ground that it would be more 'convenient' for the corporation to be sued somewhere else.
There is a strong emotional appeal in the words 'fair play', 'justice', and 'reasonableness.' But they were not chosen
by those who wrote the original Constitution or the Fourteenth Amendment as a measuring rod for this Court to use
in invalidating State or Federal laws passed by elected legislative representatives. No one, not even those who most
feared a democratic government, ever formally proposed that courts should be given power to invalidate legislation
under any such elastic standards. Express prohibitions against certain types of legislation are found in the
Constitution, and under the long settled practice, courts invalidate laws found to conflict with them. This requires
interpretation, and interpretation, it is true, may result in extension of the Constitution's purpose. But that is no
reason for reading the due process clause so as to restrict a State's power to tax and sue those whose activities affect
persons and businesses within the State, provided proper service can be had. Superimposing the natural justice

concept on the Constitution's specific prohibitions could operate as a drastic abridgment of democratic safeguards
they embody, such as freedom of speech, press and religion,2 and the right to counsel. This [326 U.S. 310, 326] has
already happened. Betts v. Brady, 316 U.S. 455 , 62 S.Ct. 1252. Compare Feldman v. United States, 322 U.S. 487 ,
494-503, 64 S.Ct. 1082, 1085-1089, 154 A.L.R. 982. For application of this natural law concept, whether under the
terms 'reasonableness', 'justice', or 'fair play', makes judges the supreme arbiters of the country's laws and practices.
Polk Co. v. Glover, 305 U.S. 5 , 17-18, 59 S.Ct. 15, 20, 21; Federal Power Commission v. Natural Gas Pipeline Co., 315
U.S. 575, 600 , 62 S.Ct. 736, 750, note 4. This result, I believe, alters the form of government our Constitution
provides. I cannot agree.
True, the State's power is here upheld. But the rule announced means that tomorrow's judgment may strike down a
State or Federal enactment on the ground that it does not conform to this Court's idea of natural justice. I therefore
find myself moved by the same fears that caused Mr. Justice Holmes to say in 1930:
'I have not yet adequately expressed the more than anxiety that I feel at the ever increasing scope given to the
Fourteenth Amendment in cutting down what I believe to be the constitutional rights of the States. As the decisions
now stand, I see hardly any limit but the sky to the invalidating of those rights if they happen to strike a majority of
this Court as for any reason undesirable.' Baldwin v. Missouri, 281 U.S. 586, 595 , 50 S.Ct. 436, 439, 72 A.L.R. 1303.
Footnotes
[ Footnote 1 ] This Court has on several occasions pointed out the undesirable consequences of a failure to dismiss
frivolous appeals. Salinger v. United States, 272 U.S. 542, 544 , 47 S.Ct. 173, 174; United Surety Co. v. American
Fruit Product Co., 238 U.S. 140 , 35 S.Ct. 828; De Bearn v. Safe Deposit & Trust Co., 233 U.S. 24, 33 , 34 S., 34 S.Ct.
584, 586, 587.
[ Footnote 2 ] These First Amendment liberties-freedom of speech, press and religion-provide a graphic illustration of
the potential restrictive capacity of a rule under which they are protected at a particular time only because the Court,
as then constituted believes them to be a requirement of fundamental justice. Consequently, under the same rule,
another Court, with a different belief as to fundamental justice, could at least as against State action, completely or
partially withdraw Constitutional protection from these basic freedoms, just as though the First Amendment had never
been written.

PERKINS v. BENGUET
Perkins v. Benguet Consolidated Mining Co. - 342 U.S. 437 (1952)
Syllabus
Case
U.S. Supreme Court
Perkins v. Benguet Consolidated Mining Co., 342 U.S. 437 (1952)
Perkins v. Benguet Consolidated Mining Co.
No. 85
Argued November 27-28, 1951
Decided March 3, 1952
342 U.S. 437
CERTIORARI TO THE SUPREME COURT OF OHIO
Syllabus
A foreign corporation, owning gold and silver mines in the Philippine Islands, temporarily carried on in Ohio (during
the Japanese occupation of the Philippines) a continuous and systematic, but limited, part of its general business -consisting of directors' meetings, business correspondence, banking, stock transfers, payment of salaries, purchasing
of machinery, etc. While engaged in doing such business in Ohio, its president was served with summons in an action
in personam against the corporation filed in an Ohio state court by a nonresident of Ohio. The cause of action did not
arise in Ohio, and did not relate to the corporation's activities there. A judgment sustaining a motion to quash the
service was affirmed by the State Supreme Court.
Held:
1. The Federal Constitution does not compel Ohio to open its courts to such a case -- even though Ohio permits a
complainant to maintain a proceeding in personam in its courts against a properly served nonresident natural person
to enforce a cause of action which does not arise out of anything done within the State. Pp. 342 U. S. 440-441.
2. The Due Process Clause of the Fourteenth Amendment also does not prohibit Ohio from granting such relief against
a foreign corporation. Old Wayne Life Assn. v. McDonough, 204 U. S. 8, and Simon v. Southern R. Co., 236 U. S. 115,
distinguished. Pp. 342 U. S. 441-447.
3. As a matter of federal due process, the business done by the corporation in Ohio was sufficiently substantial and of
such a nature as to permit Ohio to entertain the cause of action against it, though the cause of action arose from
activities entirely distinct from its activities in Ohio. Pp. 342 U. S. 447-449.
4. It not clearly appearing, under the Ohio practice as to the effect of the syllabus, whether the Supreme Court of
Ohio rested its decision on Ohio law or on the Fourteenth Amendment, the cause is remanded to that court for further
proceedings in the light of the opinion of this Court. Pp. 342 U. S. 441-449.
155 Ohio St. 116, 98 N.E.2d 33, vacated and remanded.
Page 342 U. S. 438
In two actions in an Ohio state court, the trial court sustained a motion to quash the service on the respondent
foreign corporation. The Court of Appeals of Ohio affirmed, 88 Ohio App. 118, 95 N.E.2d 5, as did the State Supreme
Court, 155 Ohio St. 116, 98 N.E.2d 33. This Court granted certiorari. 342 U.S. 808. Judgment vacated and cause
remanded, p. 342 U. S. 449.
MR. JUSTICE BURTON delivered the opinion of the Court.
This case calls for an answer to the question whether the Due Process Clause of the Fourteenth Amendment to the
Constitution of the United States precludes Ohio from subjecting a foreign corporation to the jurisdiction of its courts
in this action in personam. The corporation has been carrying on in Ohio a continuous and systematic, but limited,
part of its general business. Its president, while engaged in doing such business in Ohio, has been served with
summons in this proceeding. The cause of action sued upon did not arise in Ohio and does not relate to the
corporation's activities there. For the reasons hereafter stated, we hold that the Fourteenth Amendment leaves Ohio
free to take or decline jurisdiction over the corporation.
After extended litigation elsewhere, [Footnote 1] petitioner, Idonah Slade Perkins, a nonresident of Ohio, filed two
actions in personam in the Court of Common Pleas of Clermont
Page 342 U. S. 439
County, Ohio, against the several respondents. Among those sued is the Benguet Consolidated Mining Company, here
called the mining company. It is styled a "sociedad anonima" under the laws of the Philippine Islands, where it owns
and has operated profitable gold and silver mines. In one action, petitioner seeks approximately $68,400 in dividends
claimed to be due her as a stockholder. In the other, she claims $2,500,000 damages, largely because of the
company's failure to issue to her certificates for 120,000 shares of its stock.
In each case, the trial court sustained a motion to quash the service of summons on the mining company. Ohio
Com.Pl., 99 N.E.2d 515. The Court of Appeals of Ohio affirmed that decision, 88 Ohio App. 118, 95 N.E.2d 5, as did
the Supreme Court of Ohio, 155 Ohio St. 116, 98 N.E.2d 33. The cases were consolidated, and we granted certiorari
in order to pass upon the conclusion voiced within the court below that federal due process required the result there
reached. 342 U.S. 808.

We start with the holding of the Supreme Court of Ohio, not contested here, that, under Ohio law, the mining
company is to be treated as a foreign corporation. [Footnote 2] Actual notice of the proceeding was given to the
corporation
Page 342 U. S. 440
in the instant case through regular service of summons upon its president while he was in Ohio acting in that
capacity. Accordingly, there can be no jurisdictional objection based upon a lack of notice to a responsible
representative of the corporation.
The answer to the question of whether the state courts of Ohio are open to a proceeding in personam, against an
amply notified foreign corporation, to enforce a cause of action not arising in Ohio and not related to the business or
activities of the corporation in that State rests entirely upon the law of Ohio, unless the Due Process Clause of the
Fourteenth Amendment compels a decision either way.
The suggestion that federal due process compels the State to open its courts to such a case has no substance.
"Provisions for making foreign corporations subject to service in the state is a matter of legislative discretion, and a
failure to provide for such service is not a denial of due process. Still less is it incumbent upon a state in furnishing
such process to make the jurisdiction over the foreign corporation wide enough to include the adjudication of
transitory actions not arising in the state."
Missouri P. R. Co. v. Clarendon Co., 257 U. S. 533, 257 U. S. 535.
Page 342 U. S. 441
Also without merit is the argument that, merely because Ohio permits a complainant to maintain a proceeding in
personam in its courts against a properly served nonresident natural person to enforce a cause of action which does
not arise out of anything done in Ohio, therefore the Constitution of the United States compels Ohio to provide like
relief against a foreign corporation.
A more serious question is presented by the claim that the Due Process Clause of the Fourteenth Amendment
prohibits Ohio from granting such relief against a foreign corporation. The syllabus in the report of the case below,
while denying the relief sought, does not indicate whether the Supreme Court of Ohio rested its decision on Ohio law
or on the Fourteenth Amendment. The first paragraph of that syllabus is as follows:
"1. The doing of business in this state by a foreign corporation, which has not appointed a statutory agent upon
whom service of process against the corporation can be made in this state or otherwise consented to service of
summons upon it in actions brought in this state, will not make the corporation subject to service of summons in an
action in personam brought in the courts of this state to enforce a cause of action not arising in this state, and in no
way related to the business or activities of the corporation in this state."
155 Ohio St. 116, 117, 98 N.E.2d 33, 34.
If the above statement stood alone, it might mean that the decision rested solely upon the law of Ohio. In support of
that possibility, we are told that, under the rules and practice of the Supreme Court of Ohio, only the syllabus
necessarily carries the approval of that court. [Footnote 3] As
Page 342 U. S. 442
we understand the Ohio practice, the syllabus of its Supreme Court constitutes the official opinion of that court, but it
must be read in the light of the facts and issues of the case.
Page 342 U. S. 443
The only opinion accompanying the syllabus of the court below places the concurrence of its author unequivocally
upon the ground that the Due Process Clause of the Fourteenth Amendment prohibits the Ohio courts from exercising
jurisdiction over the respondent corporation in this proceeding. [Footnote 4] That opinion is an official part of the
report of the case. The report, however, does not disclose to what extent, if any, the other members of the court may
have shared the view expressed in that opinion. Accordingly, for us to allow the judgment to stand as it is would risk
an affirmance of a decision which might have been decided differently if the court below had felt free under our
decisions to do so.
The cases primarily relied on by the author of the opinion accompanying the syllabus below are Old Wayne Life Assn.
v. McDonough, 204 U. S. 8, and Simon v. Southern R. Co., 236 U. S. 115. Unlike the case at bar, no actual notice of
the proceedings was received in those cases by a
Page 342 U. S. 444
responsible representative of the foreign corporation. In each case, the public official who was served with process in
an attempt to bind the foreign corporation was held to lack the necessary authority to accept service so as to bind it
in a proceeding to enforce a cause of action arising outside of the state of the forum. See 204 U.S. at 204 U. S. 2223, and 236 U.S. at 236 U. S. 130. The necessary result was a finding of inadequate service in each case and a
conclusion that the foreign corporation was not bound by it. The same would be true today in a like proceeding where
the only service had and the only notice given was that directed to a public official who had no authority, by statute
or otherwise, to accept it in that kind of a proceeding. At the time of rendering the above decisions, this Court was
aided, in reaching its conclusion as to the limited scope of the statutory authority of the public officials, by this Court's
conception that the Due Process Clause of the Fourteenth Amendment precluded a state from giving its public officials
authority to accept service in terms broad enough to bind a foreign corporation in proceedings against it to enforce an
obligation arising outside of the state of the forum. That conception now has been modified by the rationale adopted
in later decisions, and particularly in International Shoe Co. v. Washington, 326 U. S. 310.

Today, if an authorized representative of a foreign corporation be physically present in the state of the forum and be
there engaged in activities appropriate to accepting service or receiving notice on its behalf, we recognize that there is
no unfairness in subjecting that corporation to the jurisdiction of the courts of that state through such service of
process upon that representative. This has been squarely held to be so in a proceeding in personam against such a
corporation, at least in relation to a cause of action
Page 342 U. S. 445
arising out of the corporation's activities within the state of the forum. [Footnote 5]
The essence of the issue here, at the constitutional level, is a like one of general fairness to the corporation.
Appropriate tests for that are discussed in International Shoe Co. v. Washington, supra, at 326 U. S. 317-320. The
amount and kind of activities which must be carried on by the foreign corporation in the state of the forum so as to
make it reasonable and just to subject the corporation to the jurisdiction of that state are to be determined in each
case. The corporate activities of a foreign corporation which, under state statute, make it necessary for it to secure a
license and to designate a statutory agent upon whom process may be served provide a helpful, but not a conclusive,
test. For example, the state of the forum may by statute require a foreign mining corporation to secure a license in
order lawfully to carry on there such functional intrastate operations as those of mining or refining ore. On the other
hand, if the same corporation carries on, in that state, other continuous and systematic corporate activities as it did
here -- consisting of directors' meetings, business correspondence, banking, stock transfers, payment of salaries,
purchasing of machinery, etc. -- those activities are enough to make it fair and reasonable to subject that corporation
to proceedings in personam in that state, at least insofar as the proceedings in personam seek to enforce
Page 342 U. S. 446
causes of action relating to those very activities or to other activities of the corporation within the state.
The instant case takes us one step further to a proceeding in personam to enforce a cause of action not arising out of
the corporation's activities in the state of the forum. Using the tests mentioned above, we find no requirement of
federal due process that either prohibits Ohio from opening its courts to the cause of action here presented or
compels Ohio to do so. This conforms to the realistic reasoning in International Shoe Co. v. Washington, supra, at 326
U. S. 318-319:
". . . there have been instances in which the continuous corporate operations within a state were thought so
substantial and of such a nature as to justify suit against it on causes of action arising from dealings entirely distinct
from those activities. See Missouri, K. & T. R. Co. v. Reynolds, 255 U.S. 565; [Footnote 6] Tauza v. Susquehanna Coal
Co., 220 N.Y. 259, 115 N.E. 915; cf. 227 U. S. Louis S.W. R. Co. v. Alexander, supra, [227 U.S. 218]."
". . . some of the decisions holding the corporation amenable to suit have been supported by resort to the legal fiction
that it has given its consent to service and suit, consent being implied from its presence in the state through the acts
of its authorized agents. Lafayette Insurance Co. v. French, 18 How. 404, 59 U. S. 407; St. Clair v. Cox, supra, 106
U.S. [350,] 106 U. S. 356; Commercial Mutual Accident Co. v. Davis, supra, 213 U.S.
Page 342 U. S. 447
[245,] 213 U. S. 254; Washington v. Superior Court, 289 U. S. 361, 289 U. S. 364-365. But, more realistically, it may
be said that those authorized acts were of such a nature as to justify the fiction. Smolik v. Philadelphia & Reading Co.,
222 F. 148, 151. Henderson, The Position of Foreign Corporations in American Constitutional Law 94, 95."
". . . Whether due process is satisfied must depend, rather, 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. That
clause does not contemplate that a state may make binding a judgment in personam against an individual or
corporate defendant with which the state has no contacts, ties, or relations. Cf. 95 U. S. Neff, supra, [95 U.S. 714];
Minnesota Commercial Assn. v. Benn, 261 U. S. 140."
It remains only to consider in more detail the issue of whether, as a matter of federal due process, the business done
in Ohio by the respondent mining company was sufficiently substantial and of such a nature as to permit Ohio to
entertain a cause of action against a foreign corporation where the cause of action arose from activities entirely
distinct from its activities in Ohio. See International Shoe Co. v. Washington, supra, at 326 U. S. 318.
The Ohio Court of Appeals summarized the evidence on the subject. 88 Ohio App. at 119-125, 95 N.E.2d at 6-9. From
that summary, the following facts are substantially beyond controversy: the company's mining properties were in the
Philippine Islands. Its operations there were completely halted during the occupation of the Islands by the Japanese.
During that interim, the president, who was also the general manager and principal stockholder of the company,
returned to his home in Clermont County, Ohio. There, he maintained an office in
Page 342 U. S. 448
which he conducted his personal affairs and did many things on behalf of the company. He kept there office files of
the company. He carried on there correspondence relating to the business of the company and to its employees. He
drew and distributed there salary checks on behalf of the company, both in his own favor as president and in favor of
two company secretaries who worked there with him. He used and maintained in Clermont County, Ohio, two active
bank accounts carrying substantial balances of company funds. A bank in Hamilton County, Ohio, acted as transfer
agent for the stock of the company. Several directors' meetings were held at his office or home in Clermont County.
From that office, he supervised policies dealing with the rehabilitation of the corporation's properties in the
Philippines, and he dispatched funds to cover purchases of machinery for such rehabilitation. Thus, he carried on in
Ohio a continuous and systematic supervision of the necessarily limited wartime activities of the company. He there
discharged his duties as president and general manager, both during the occupation of the company's properties by

the Japanese and immediately thereafter. While no mining properties in Ohio were owned or operated by the
company, many of its wartime activities were directed from Ohio and were being given the personal attention of its
president in that State at the time he was served with summons. Consideration of the circumstances which, under the
law of Ohio, ultimately will determine whether the courts of that State will choose to take jurisdiction over the
corporation is reserved for the courts of that State. Without reaching that issue of state policy, we conclude that,
under the circumstances above recited, it would not violate federal due process for Ohio either to take or decline
jurisdiction of the corporation in this proceeding. This relieves the Ohio courts of the restriction relied upon in the
opinion
Page 342 U. S. 449
accompanying the syllabus below, and which may have influenced the judgment of the court below.
Accordingly, the judgment of the Supreme Court of Ohio is vacated, and the cause is remanded to that court for
further proceedings in the light of this opinion. [Footnote 7]
It is so ordered.
MR. JUSTICE BLACK concurs in the result.
[Footnote 1]
See Perkins v. Perkins, 57 Phil.R. 205; Harden v. Benguet Consolidated Mining Co., 58 Phil.R. 141; Perkins v.
Guaranty Trust Co., 274 N.Y. 250, 8 N.E.2d 849; Perkins v. Benguet Consolidated Mining Co., 55 Cal.App.2d 720, 132
P.2d 70, rehearing denied, 55 Cal.App.2d 774, 132 P.2d 102, cert. denied, 319 U.S. 774; 60 Cal.App.2d 845, 141 P.2d
19, cert. denied, 320 U.S. 803, 815; Perkins v. First National Bank of Cincinnati, Com.Pl., Hamilton County, Ohio, 79
N.E.2d 159.
[Footnote 2]
Ohio requires a foreign corporation to secure a license to transact "business" in that State, Throckmorton's Ohio Code,
1940, 8625-4, and to appoint a "designated agent" upon whom process may be served, 8625-2, 8625-5. The
mining company has neither secured such a license nor designated such an agent. While this may make it subject to
penalties and handicaps, this does not prevent it from transacting business or being sued. 8625-25. If it has a
"managing agent" in Ohio, service may be made upon him. 11290. Such service is a permissive alternative to
service on the corporation through its president or other chief officer. 11288. Lively v. Picton, 218 F. 401, 406-407.
The evidence as to the business activities of the corporation in Ohio is summarized by the Ohio Court of Appeals. 88
Ohio App. 118, 119-125, 95 N.E.2d 5, 6-9. That court held that such activities did not constitute the transaction of
business referred to in the Code. In its syllabus, however, the Supreme Court of Ohio, without passing upon the
sufficiency of such acts for the above statutory purpose, and without defining its use of the term, affirmed the
judgment dismissing the complaint and assumed that what the corporation had done in Ohio constituted "doing
business" to an extent sufficient to be recognized in reaching its decision.
[Footnote 3]
In 1858, the Supreme Court of Ohio promulgated the following rule:
"A syllabus of the points decided by the Court in each case shall be stated, in writing, by the Judge assigned to deliver
the opinion of the Court, which shall be confined to the points of law, arising from the facts of the case, that have
been determined by the Court. And the syllabus shall be submitted to the Judges concurring therein for revisal, before
publication thereof, and it shall be inserted in the book of reports without alteration, unless by the consent of the
Judges concurring therein."
5 Ohio St. vii.
This policy has been recognized by statute. Bates Ohio R.S. 427, as amended, 103 Ohio Laws 1913, 1483, and
108 Ohio Laws 1919, 1483. It appears now in Throckmorton's Ohio Code, 1940, 1483, as follows:
"Whenever it has been thus decided to report a case for publication, the syllabus thereof shall be prepared by the
judge delivering the opinion, and approved by a majority of the members of the court, and the report may be per
curiam, or if an opinion be reported, the same shall be written in as brief and concise form as may be consistent with
a clear presentation of the law of the case. . . . Only such cases as are hereafter reported in accordance with the
provisions of this section shall be recognized by and receive the official sanction of any court within the state."
There are many references to this practice, both in the syllabi and opinions written for the Supreme Court of Ohio.
Typical of these is the following:
"It has long been the rule of this court that the syllabus contains the law of the case. It is the only part of the opinion
requiring the approval of all the members concurring in the judgment. Where the judge writing an opinion discusses
matters or gives expression to his views on questions not contained in the syllabus, it is merely the personal opinion
of that judge."
State ex rel. Donahey v. Edmondson, 89 Ohio St. 93, 107-108, 105 N.E. 269, 273.
See also Williamson Heater Co. v. Radich, 128 Ohio St. 124, 190 N.E. 403; Baltimore & O. R. Co. v. Baillie, 112 Ohio
St. 567, 148 N.E. 233. A syllabus must be read in the light of the facts in the case, even where brought out in the
accompanying opinion, rather than in the syllabus itself. See Williamson Heater Co. v. Radich, supra; Perkins v. Bright,
109 Ohio St. 14, 19-20, 141 N.E. 689, 690-691; In re Poage, 87 Ohio St. 72, 82-83, 100 N.E. 125, 127-128.
[Footnote 4]
"However, the doing of business in a state by a foreign corporation, which has not appointed a statutory agent upon
whom service of process against the corporation can be made in that state or otherwise consented to service of
summons upon it in actions brought in that state, will not make the corporation subject to service of summons in an

action in personam brought in the courts of that state to enforce a cause of action in no way related to the business
or activities of the corporation in that state. Old Wayne Mutual Life Assn. of Indianapolis v. McDonough, 204 U. S. 8,
204 U. S. 22-23; Simon v. Southern Ry. Co., 236 U. S. 115, 236 U. S. 129-130 and 236 U. S. 132. See also
Pennsylvania Fire Ins. Co. of Philadelphia v. Gold Issue Mining & Milling Co., 243 U. S. 93, 243 U. S. 95-96; Robert
Mitchell Furniture Co. v. Selden Breck Construction Co., 257 U. S. 213, 257 U. S. 215-216; International Shoe Co. v.
Washington, 326 U. S. 310, 326 U. S. 319-320."
"An examination of the opinions of the Supreme Court of the United States in the foregoing cases will clearly disclose
that service of summons in such an instance would be void as wanting in due process of law."
155 Ohio St. 116, 119-120, 98 N.E.2d 33, 35.
[Footnote 5]
". . . The obligation which is here sued upon arose out of those very activities. It is evident that these operations
establish sufficient contacts or ties with the state of the forum to make it reasonable and just, according to our
traditional conception of fair play and substantial justice, to permit the state to enforce the obligations which appellant
has incurred there. Hence, we cannot say that the maintenance of the present suit in the Washington involves an
unreasonable or undue procedure."
International Shoe Co. v. Washington, supra, at 326 U. S. 320.
[Footnote 6]
This citation does not disclose the significance of this decision, but light is thrown upon it by the opinions of the state
court below. Reynolds v. Missouri, K. & T. R. Co., 224 Mass. 379, 113 N.E. 413; 228 Mass. 584, 117 N.E. 913. In
addition to the cases cited in the text, see Barrow S.S. Co. v. Kane, 170 U. S. 100; Pennsylvania Fire Insurance Co. v.
Gold Issue Mining Co., 243 U. S. 93 (statutory agent appointed); Philadelphia & Reading R. Co. v. McKibbin, 243 U. S.
264, 243 U. S. 268-269 (question left open).
[Footnote 7]
For like procedure followed under somewhat comparable circumstances, see State Tax Comm'n v. Van Cott, 306 U. S.
511.
MR. JUSTICE MINTON, with whom THE CHIEF JUSTICE joins, dissenting.
As I understand the practice in Ohio, the law as agreed to by the court is stated in the syllabus. If an opinion is filed,
it expresses the views of the writer of the opinion and of those who may join him as to why the law was so declared
in the syllabus. Judge Taft alone filed an opinion in the instant case.
The law as declared in the syllabus, which is the whole court speaking, is clearly based upon adequate state grounds.
Judge Taft, in his opinion, expresses the view that the opinions of this Court on due process grounds require the court
to declare the law as stated in the syllabus. As the majority opinion of this Court points out, this is an erroneous view
of this Court's decisions.
"This brings the situation clearly within the settled rule whereby this Court will not review a State court decision
resting on an adequate and independent nonfederal ground even though the State court may have also summoned to
its support an erroneous view of federal law."
Radio Station WOW v. Johnson, 326 U. S. 120, 326 U. S. 129.
The case of State Tax Comm'n v. Van Cott, 306 U. S. 511, is not this case. There, the case was not clearly decided on
an adequate state ground, but the state ground and the federal ground were so interwoven that this Court was
"unable to conclude that the judgment rests upon an independent interpretation of the state law." 306 U.S. at 306 U.
S. 514. In the instant case, a clear statement of the state law is made by the court in the syllabus. Only Judge Taft
has summoned the erroneous view of this Court's decisions to his support of the adequate state ground approved by
the whole court.
What we are saying to Ohio is:
"You have decided this case on an adequate state ground, denying service, which you had a right to do, but you don't
have to do it if you don't want to, as far as the decisions of this Court are concerned."
I think what we are doing is giving gratuitously an advisory opinion to the Ohio Supreme Court. I would dismiss the
writ as improvidently granted.
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PHILSEC INVESTMENT v. CA
G.R. No. 103493

June 19, 1997

PHILSEC INVESTMENT CORPORATION, BPI-INTERNATIONAL FINANCE LIMITED, and ATHONA HOLDINGS, N.V.,
petitioners,
vs.
THE HONORABLE COURT OF APPEALS, 1488, INC., DRAGO DAIC, VENTURA O. DUCAT, PRECIOSO R. PERLAS, and
WILLIAM H. CRAIG, respondents.

MENDOZA, J.:
This case presents for determination the conclusiveness of a foreign judgment upon the rights of the parties under
the same cause of action asserted in a case in our local court. Petitioners brought this case in the Regional Trial Court
of Makati, Branch 56, which, in view of the pendency at the time of the foreign action, dismissed Civil Case No. 16563
on the ground of litis pendentia, in addition to forum non conveniens. On appeal, the Court of Appeals affirmed.
Hence this petition for review on certiorari.
The facts are as follows:
On January 15, 1983, private respondent Ventura O. Ducat obtained separate loans from petitioners Ayala
International Finance Limited (hereafter called AYALA) 1 and Philsec Investment Corporation (hereafter called
PHILSEC) in the sum of US$2,500,000.00, secured by shares of stock owned by Ducat with a market value of
P14,088,995.00. In order to facilitate the payment of the loans, private respondent 1488, Inc., through its president,
private respondent Drago Daic, assumed Ducat's obligation under an Agreement, dated January 27, 1983, whereby
1488, Inc. executed a Warranty Deed with Vendor's Lien by which it sold to petitioner Athona Holdings, N.V.
(hereafter called ATHONA) a parcel of land in Harris County, Texas, U.S.A., for US$2,807,209.02, while PHILSEC and
AYALA extended a loan to ATHONA in the amount of US$2,500,000.00 as initial payment of the purchase price. The
balance of US$307,209.02 was to be paid by means of a promissory note executed by ATHONA in favor of 1488, Inc.
Subsequently, upon their receipt of the US$2,500,000.00 from 1488, Inc., PHILSEC and AYALA released Ducat from
his indebtedness and delivered to 1488, Inc. all the shares of stock in their possession belonging to Ducat.
As ATHONA failed to pay the interest on the balance of US$307,209.02, the entire amount covered by the note
became due and demandable. Accordingly, on October 17, 1985, private respondent 1488, Inc. sued petitioners
PHILSEC, AYALA, and ATHONA in the United States for payment of the balance of US$307,209.02 and for damages
for breach of contract and for fraud allegedly perpetrated by petitioners in misrepresenting the marketability of the
shares of stock delivered to 1488, Inc. under the Agreement. Originally instituted in the United States District Court of
Texas, 165th Judicial District, where it was docketed as Case No. 85-57746, the venue of the action was later
transferred to the United States District Court for the Southern District of Texas, where 1488, Inc. filed an amended
complaint, reiterating its allegations in the original complaint. ATHONA filed an answer with counterclaim, impleading
private respondents herein as counterdefendants, for allegedly conspiring in selling the property at a price over its
market value. Private respondent Perlas, who had allegedly appraised the property, was later dropped as
counterdefendant. ATHONA sought the recovery of damages and excess payment allegedly made to 1488, Inc. and,
in the alternative, the rescission of sale of the property. For their part, PHILSEC and AYALA filed a motion to dismiss
on the ground of lack of jurisdiction over their person, but, as their motion was denied, they later filed a joint answer
with counterclaim against private respondents and Edgardo V. Guevarra, PHILSEC's own former president, for the
rescission of the sale on the ground that the property had been overvalued. On March 13, 1990, the United States
District Court for the Southern District of Texas dismissed the counterclaim against Edgardo V. Guevarra on the
ground that it was "frivolous and [was] brought against him simply to humiliate and embarrass him." For this reason,
the U.S. court imposed so-called Rule 11 sanctions on PHILSEC and AYALA and ordered them to pay damages to
Guevarra.
On April 10, 1987, while Civil Case No. H-86-440 was pending in the United States, petitioners filed a complaint "For
Sum of Money with Damages and Writ of Preliminary Attachment" against private respondents in the Regional Trial
Court of Makati, where it was docketed as Civil Case No. 16563. The complaint reiterated the allegation of petitioners
in their respective counterclaims in Civil Action No. H-86-440 of the United States District Court of Southern Texas
that private respondents committed fraud by selling the property at a price 400 percent more than its true value of
US$800,000.00. Petitioners claimed that, as a result of private respondents' fraudulent misrepresentations, ATHONA,
PHILSEC, and AYALA were induced to enter into the Agreement and to purchase the Houston property. Petitioners

prayed that private respondents be ordered to return to ATHONA the excess payment of US$1,700,000.00 and to pay
damages. On April 20, 1987, the trial court issued a writ of preliminary attachment against the real and personal
properties of private respondents. 2
Private respondent Ducat moved to dismiss Civil Case No. 16563 on the grounds of (1) litis pendentia, vis-a-vis Civil
Action No. H-86-440 filed by 1488, Inc. and Daic in the U.S., (2) forum non conveniens, and (3) failure of petitioners
PHILSEC and BPI-IFL to state a cause of action. Ducat contended that the alleged overpricing of the property
prejudiced only petitioner ATHONA, as buyer, but not PHILSEC and BPI-IFL which were not parties to the sale and
whose only participation was to extend financial accommodation to ATHONA under a separate loan agreement. On
the other hand, private respondents 1488, Inc. and its president Daic filed a joint "Special Appearance and Qualified
Motion to Dismiss," contending that the action being in personam, extraterritorial service of summons by publication
was ineffectual and did not vest the court with jurisdiction over 1488, Inc., which is a non-resident foreign
corporation, and Daic, who is a non-resident alien.
On January 26, 1988, the trial court granted Ducat's motion to dismiss, stating that "the evidentiary requirements of
the controversy may be more suitably tried before the forum of the litis pendentia in the U.S., under the principle in
private international law of forum non conveniens," even as it noted that Ducat was not a party in the U.S. case.
A separate hearing was held with regard to 1488, Inc. and Daic's motion to dismiss. On March 9, 1988, the trial court
3 granted the motion to dismiss filed by 1488, Inc. and Daic on the ground of litis pendentia considering that
the "main factual element" of the cause of action in this case which is the validity of the sale of real property in the
United States between defendant 1488 and plaintiff ATHONA is the subject matter of the pending case in the United
States District Court which, under the doctrine of forum non conveniens, is the better (if not exclusive) forum to
litigate matters needed to determine the assessment and/or fluctuations of the fair market value of real estate
situated in Houston, Texas, U.S.A. from the date of the transaction in 1983 up to the present and verily, . . .
(emphasis by trial court)
The trial court also held itself without jurisdiction over 1488, Inc. and Daic because they were non-residents and the
action was not an action in rem or quasi in rem, so that extraterritorial service of summons was ineffective. The trial
court subsequently lifted the writ of attachment it had earlier issued against the shares of stocks of 1488, Inc. and
Daic.
Petitioners appealed to the Court of Appeals, arguing that the trial court erred in applying the principle of litis
pendentia and forum non conveniens and in ruling that it had no jurisdiction over the defendants, despite the
previous attachment of shares of stocks belonging to 1488, Inc. and Daic.
On January 6, 1992, the Court of Appeals 4 affirmed the dismissal of Civil Case No. 16563 against Ducat, 1488, Inc.,
and Daic on the ground of litis pendentia, thus:
The plaintiffs in the U.S. court are 1488 Inc. and/or Drago Daic, while the defendants are Philsec, the Ayala
International Finance Ltd. (BPI-IFL's former name) and the Athona Holdings, NV. The case at bar involves the same
parties. The transaction sued upon by the parties, in both cases is the Warranty Deed executed by and between
Athona Holdings and 1488 Inc. In the U.S. case, breach of contract and the promissory note are sued upon by 1488
Inc., which likewise alleges fraud employed by herein appellants, on the marketability of Ducat's securities given in
exchange for the Texas property. The recovery of a sum of money and damages, for fraud purportedly committed by
appellees, in overpricing the Texas land, constitute the action before the Philippine court, which likewise stems from
the same Warranty Deed.
The Court of Appeals also held that Civil Case No. 16563 was an action in personam for the recovery of a sum of
money for alleged tortious acts, so that service of summons by publication did not vest the trial court with jurisdiction
over 1488, Inc. and Drago Daic. The dismissal of Civil Case No. 16563 on the ground of forum non conveniens was
likewise affirmed by the Court of Appeals on the ground that the case can be better tried and decided by the U.S.
court:
The U.S. case and the case at bar arose from only one main transaction, and involve foreign elements, to wit: 1) the
property subject matter of the sale is situated in Texas, U.S.A.; 2) the seller, 1488 Inc. is a non-resident foreign
corporation; 3) although the buyer, Athona Holdings, a foreign corporation which does not claim to be doing business
in the Philippines, is wholly owned by Philsec, a domestic corporation, Athona Holdings is also owned by BPI-IFL, also
a foreign corporation; 4) the Warranty Deed was executed in Texas, U.S.A.
In their present appeal, petitioners contend that:

1.
THE DOCTRINE OF PENDENCY OF ANOTHER ACTION BETWEEN THE SAME PARTIES FOR THE SAME CAUSE
(LITIS PENDENTIA) RELIED UPON BY THE COURT OF APPEALS IN AFFIRMING THE TRIAL COURT'S DISMISSAL OF
THE CIVIL ACTION IS NOT APPLICABLE.
2.
THE PRINCIPLE OF FORUM NON CONVENIENS ALSO RELIED UPON BY THE COURT OF APPEALS IN
AFFIRMING THE DISMISSAL BY THE TRIAL COURT OF THE CIVIL ACTION IS LIKEWISE NOT APPLICABLE.
3.
AS A COROLLARY TO THE FIRST TWO GROUNDS, THE COURT OF APPEALS ERRED IN NOT HOLDING THAT
PHILIPPINE PUBLIC POLICY REQUIRED THE ASSUMPTION, NOT THE RELINQUISHMENT, BY THE TRIAL COURT OF
ITS RIGHTFUL JURISDICTION IN THE CIVIL ACTION FOR THERE IS EVERY REASON TO PROTECT AND VINDICATE
PETITIONERS' RIGHTS FOR TORTIOUS OR WRONGFUL ACTS OR CONDUCT PRIVATE RESPONDENTS (WHO ARE
MOSTLY NON-RESIDENT ALIENS) INFLICTED UPON THEM HERE IN THE PHILIPPINES.
We will deal with these contentions in the order in which they are made.
First. It is important to note in connection with the first point that while the present case was pending in the Court
of Appeals, the United States District Court for the Southern District of Texas rendered judgment 5 in the case before
it. The judgment, which was in favor of private respondents, was affirmed on appeal by the Circuit Court of Appeals.
6 Thus, the principal issue to be resolved in this case is whether Civil Case No. 16536 is barred by the judgment of
the U.S. court.
Private respondents contend that for a foreign judgment to be pleaded as res judicata, a judgment admitting the
foreign decision is not necessary. On the other hand, petitioners argue that the foreign judgment cannot be given the
effect of res judicata without giving them an opportunity to impeach it on grounds stated in Rule 39, 50 of the Rules
of Court, to wit: "want of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact."
Petitioners' contention is meritorious. While this Court has given the effect of res judicata to foreign judgments in
several cases, 7 it was after the parties opposed to the judgment had been given ample opportunity to repel them on
grounds allowed under the law. 8 It is not necessary for this purpose to initiate a separate action or proceeding for
enforcement of the foreign judgment. What is essential is that there is opportunity to challenge the foreign judgment,
in order for the court to properly determine its efficacy. This is because in this jurisdiction, with respect to actions in
personam, as distinguished from actions in rem, a foreign judgment merely constitutes prima facie evidence of
the justness of the claim of a party and, as such, is subject to proof to the contrary. 9 Rule 39, 50 provides:
Sec. 50. Effect of foreign judgments. The effect of a judgment of a tribunal of a foreign country, having jurisdiction
to pronounce the judgment is as follows:
(a)

In case of a judgment upon a specific thing, the judgment is conclusive upon the title to the thing;

(b)
In case of a judgment against a person, the judgment is presumptive evidence of a right as between the
parties and their successors in interest by a subsequent title; but the judgment may be repelled by evidence of a want
of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact.
Thus, in the case of General Corporation of the Philippines v. Union Insurance Society of Canton, Ltd., 10 which
private respondents invoke for claiming conclusive effect for the foreign judgment in their favor, the foreign judgment
was considered res judicata because this Court found "from the evidence as well as from appellant's own pleadings"
11 that the foreign court did not make a "clear mistake of law or fact" or that its judgment was void for want of
jurisdiction or because of fraud or collusion by the defendants. Trial had been previously held in the lower court and
only afterward was a decision rendered, declaring the judgment of the Supreme Court of the State of Washington to
have the effect of res judicata in the case before the lower court. In the same vein, in Philippines International
Shipping Corp. v. Court of Appeals, 12 this Court held that the foreign judgment was valid and enforceable in the
Philippines there being no showing that it was vitiated by want of notice to the party, collusion, fraud or clear mistake
of law or fact. The prima facie presumption under the Rule had not been rebutted.
In the case at bar, it cannot be said that petitioners were given the opportunity to challenge the judgment of the U.S.
court as basis for declaring it res judicata or conclusive of the rights of private respondents. The proceedings in the
trial court were summary. Neither the trial court nor the appellate court was even furnished copies of the pleadings in
the U.S. court or apprised of the evidence presented thereat, to assure a proper determination of whether the issues
then being litigated in the U.S. court were exactly the issues raised in this case such that the judgment that might be
rendered would constitute res judicata. As the trial court stated in its disputed order dated March 9, 1988.

On the plaintiff's claim in its Opposition that the causes of action of this case and the pending case in the United
States are not identical, precisely the Order of January 26, 1988 never found that the causes of action of this case
and the case pending before the USA Court, were identical. (emphasis added)
It was error therefore for the Court of Appeals to summarily rule that petitioners' action is barred by the principle of
res judicata. Petitioners in fact questioned the jurisdiction of the U.S. court over their persons, but their claim was
brushed aside by both the trial court and the Court of Appeals. 13
Moreover, the Court notes that on April 22, 1992, 1488, Inc. and Daic filed a petition for the enforcement of judgment
in the Regional Trial Court of Makati, where it was docketed as Civil Case No. 92-1070 and assigned to Branch 134,
although the proceedings were suspended because of the pendency of this case. To sustain the appellate court's
ruling that the foreign judgment constitutes res judicata and is a bar to the claim of petitioners would effectively
preclude petitioners from repelling the judgment in the case for enforcement. An absurdity could then arise: a foreign
judgment is not subject to challenge by the plaintiff against whom it is invoked, if it is pleaded to resist a claim as in
this case, but it may be opposed by the defendant if the foreign judgment is sought to be enforced against him in a
separate proceeding. This is plainly untenable. It has been held therefore that:
[A] foreign judgment may not be enforced if it is not recognized in the jurisdiction where affirmative relief is being
sought. Hence, in the interest of justice, the complaint should be considered as a petition for the recognition of the
Hongkong judgment under Section 50 (b), Rule 39 of the Rules of Court in order that the defendant, private
respondent herein, may present evidence of lack of jurisdiction, notice, collusion, fraud or clear mistake of fact and
law, if applicable. 14
Accordingly, to insure the orderly administration of justice, this case and Civil Case No. 92-1070 should be
consolidated. 15 After all, the two have been filed in the Regional Trial Court of Makati, albeit in different salas, this
case being assigned to Branch 56 (Judge Fernando V. Gorospe), while Civil Case No. 92-1070 is pending in Branch
134 of Judge Ignacio Capulong. In such proceedings, petitioners should have the burden of impeaching the foreign
judgment and only in the event they succeed in doing so may they proceed with their action against private
respondents.
Second. Nor is the trial court's refusal to take cognizance of the case justifiable under the principle of forum non
conveniens. First, a motion to dismiss is limited to the grounds under Rule 16, 1, which does not include forum non
conveniens. 16 The propriety of dismissing a case based on this principle requires a factual determination, hence, it is
more properly considered a matter of defense. Second, while it is within the discretion of the trial court to abstain
from assuming jurisdiction on this ground, it should do so only after "vital facts are established, to determine whether
special circumstances" require the court's desistance. 17
In this case, the trial court abstained from taking jurisdiction solely on the basis of the pleadings filed by private
respondents in connection with the motion to dismiss. It failed to consider that one of the plaintiffs (PHILSEC) is a
domestic corporation and one of the defendants (Ventura Ducat) is a Filipino, and that it was the extinguishment of
the latter's debt which was the object of the transaction under litigation. The trial court arbitrarily dismissed the case
even after finding that Ducat was not a party in the U.S. case.
Third. It was error we think for the Court of Appeals and the trial court to hold that jurisdiction over 1488, Inc. and
Daic could not be obtained because this is an action in personam and summons were served by extraterritorial
service. Rule 14, 17 on extraterritorial service provides that service of summons on a non-resident defendant may be
effected out of the Philippines by leave of Court where, among others, "the property of the defendant has been
attached within the Philippines." 18 It is not disputed that the properties, real and personal, of the private
respondents had been attached prior to service of summons under the Order of the trial court dated April 20, 1987.
19
Fourth. As for the temporary restraining order issued by the Court on June 29, 1994, to suspend the proceedings in
Civil Case No. 92-1445 filed by Edgardo V. Guevarra to enforce so-called Rule 11 sanctions imposed on the petitioners
by the U.S. court, the Court finds that the judgment sought to be enforced is severable from the main judgment
under consideration in Civil Case No. 16563. The separability of Guevara's claim is not only admitted by petitioners, 20
it appears from the pleadings that petitioners only belatedly impleaded Guevarra as defendant in Civil Case No.
16563. 21 Hence, the TRO should be lifted and Civil Case No. 92-1445 allowed to proceed.
WHEREFORE, the decision of the Court of Appeals is REVERSED and Civil Case No. 16563 is REMANDED to the
Regional Trial Court of Makati for consolidation with Civil Case No. 92-1070 and for further proceedings in accordance
with this decision. The temporary restraining order issued on June 29, 1994 is hereby LIFTED.
SO ORDERED.

Regalado, Romero, Puno and Torres, Jr., JJ., concur.

WORLDWIDE VOLKSWAGEN v. WOODSON

WORLD-WIDE VOLKSWAGEN CORPORATION et al., Petitioners, v. Charles S. WOODSON, District Judge of Creek
County, Oklahoma, et al.
444 U.S. 286 (100 S.Ct. 559, 62 L.Ed.2d 490)
WORLD-WIDE VOLKSWAGEN CORPORATION et al., Petitioners, v. Charles S. WOODSON, District Judge of Creek
County, Oklahoma, et al.
No. 78-1078.
Argued: Oct. 3, 1979.
Decided: Jan. 21, 1980.
Opinion, WHITE [HTML]
Dissent, BRENNAN [HTML]
Dissent, MARSHALL, BLACKMUN [HTML]
Dissent, BLACKMUN [HTML]
Syllabus
A products-liability action was instituted in an Oklahoma state court by respondents husband and wife to recover for
personal injuries sustained in Oklahoma in an accident involving an automobile that had been purchased by them in
New York while they were New York residents and that was being driven through Oklahoma at the time of the
accident. The defendants included the automobile retailer and its wholesaler (petitioners), New York corporations that
did no business in Oklahoma. Petitioners entered special appearances, claiming that Oklahoma's exercise of
jurisdiction over them would offend limitations on the State's jurisdiction imposed by the Due Process Clause of the
Fourteenth Amendment. The trial court rejected petitioners' claims and they then sought, but were denied a writ of
prohibition in the Oklahoma Supreme Court to restrain respondent trial judge from exercising in personam jurisdiction
over them.
Held: Consistently with the Due Process Clause, the Oklahoma trial court may not exercise in personam jurisdiction
over petitioners. Pp. 291-209.
(a) A state court may exercise personal jurisdiction over a nonresident defendant only so long as there exist
"minimum contacts" between the defendant and the forum State. International Shoe Co. v. Washington, 326 U.S.
310, 66 S.Ct. 154, 90 L.Ed. 95. The defendant's contacts with the forum State must be such that maintenance of the
suit does not offend traditional notions of fair play and substantial justice, id., at 316, 66 S.Ct., at 158, and the
relationship between the defendant and the forum must be such that it is "reasonable . . . to require the corporation
to defend the particular suit which is brought there," id., at 317, 66 S.Ct., at 158. The Due Process Clause "does not
contemplate that a state may make binding a judgment in personam against an individual or corporate defendant
with which the state has no contacts, ties, or relations." Id., at 319, 66 S.Ct., at 159. Pp. 291-294.
(b) Here, there is a total absence in the record of those affiliating circumstances that are a necessary predicate to any
exercise of state-court jurisdiction. Petitioners carry on no activity whatsoever in Oklahoma; they close no sales and
perform no services there, avail themselves of none of the benefits of Oklahoma law, and solicit no business there
either through salespersons or through advertising reasonably calculated to reach that State. Nor does the record
show that they regularly sell cars to Oklahoma residents or that they indirectly, through others, serve or seek to serve
the Oklahoma market. Although it is foreseeable that automobiles sold by petitioners would travel to Oklahoma and
that the automobile here might cause injury in Oklahoma, "foreseeability" alone is not a sufficient benchmark for
personal jurisdiction under the Due Process Clause. The foreseeability that is critical to due process analysis is not the
mere likelihood that a product will find its way into the forum State, but rather is that the defendant's conduct and
connection with the forum are such that he should reasonably anticipate being haled into court there. Nor can
jurisdiction be supported on the theory that petitioners earn substantial revenue from goods used in Oklahoma. Pp.
295-299.
Okl., 585 P.2d 351, reversed.
Herbert Rubin, New York City, for petitioners.
Jefferson G. Greer, Tulsa, Okl., for respondents.

TOP
Mr. Justice WHITE delivered the opinion of the Court.
The issue before us is whether, consistently with the Due Process Clause of the Fourteenth Amendment, an Oklahoma
court may exercise in personam jurisdiction over a nonresident automobile retailer and its wholesale distributor in a
products-liability action, when the defendants' only connection with Oklahoma is the fact that an automobile sold in
New York to New York residents became involved in an accident in Oklahoma.
* Respondents Harry and Kay Robinson purchased a new Audi automobile from petitioner Seaway Volkswagen, Inc.
(Seaway), in Massena, N. Y., in 1976. The following year the Robinson family, who resided in New York, left that
State for a new home in Arizona. As they passed through the State of Oklahoma, another car struck their Audi in the
rear, causing a fire which severely burned Kay Robinson and her two children. 1
The Robinsons 2 subsequently brought a products-liability action in the District Court for Creek County, Okla.,
claiming that their injuries resulted from defective design and placement of the Audi's gas tank and fuel system. They
joined as defendants the automobile's manufacturer, Audi NSU Auto Union Aktiengesellschaft (Audi); its importer
Volkswagen of America, Inc. (Volkswagen); its regional distributor, petitioner World-Wide Volkswagen Corp. (WorldWide); and its retail dealer, petitioner Seaway. Seaway and World-Wide entered special appearances, 3 claiming that
Oklahoma's exercise of jurisdiction over them would offend the limitations on the State's jurisdiction imposed by the
Due Process Clause of the Fourteenth Amendment. 4
The facts presented to the District Court showed that World-Wide is incorporated and has its business office in New
York. It distributes vehicles, parts, and accessories, under contract with Volkswagen, to retail dealers in New York,
New Jersey, and Connecticut. Seaway, one of these retail dealers, is incorporated and has its place of business in New
York. Insofar as the record reveals, Seaway and World-Wide are fully independent corporations whose relations with
each other and with Volkswagen and Audi are contractual only. Respondents adduced no evidence that either WorldWide or Seaway does any business in Oklahoma, ships or sells any products to or in that State, has an agent to
receive process there, or purchases advertisements in any media calculated to reach Oklahoma. In fact, as
respondents' counsel conceded at oral argument, Tr. of Oral Arg. 32, there was no showing that any automobile sold
by World-Wide or Seaway has ever entered Oklahoma with the single exception of the vehicle involved in the present
case.
Despite the apparent paucity of contacts between petitioners and Oklahoma, the District Court rejected their
constitutional claim and reaffirmed that ruling in denying petitioners' motion for reconsideration. 5 Petitioners then
sought a writ of prohibition in the Supreme Court of Oklahoma to restrain the District Judge, respondent Charles S.
Woodson, from exercising in personam jurisdiction over them. They renewed their contention that, because they had
no "minimal contacts," App. 32, with the State of Oklahoma, the actions of the District Judge were in violation of their
rights under the Due Process Clause.
The Supreme Court of Oklahoma denied the writ, 585 P.2d 351 (1978), 6 holding that personal jurisdiction over
petitioners was authorized by Oklahoma's "long-arm" statute Okla.Stat., Tit. 12, 1701.03(a)(4) (1971). 7 Although
the court noted that the proper approach was to test jurisdiction against both statutory and constitutional standards,
its analysis did not distinguish these questions, probably because 1701.03(a)(4) has been interpreted as conferring
jurisdiction to the limits permitted by the United States Constitution. 8 The court's rationale was contained in the
following paragraph, 585 P.2d, at 354:
"In the case before us, the product being sold and distributed by the petitioners is by its very design and purpose so
mobile that petitioners can foresee its possible use in Oklahoma. This is especially true of the distributor, who has the
exclusive right to distribute such automobile in New York, New Jersey and Connecticut. The evidence presented below
demonstrated that goods sold and distributed by the petitioners were used in the State of Oklahoma, and under the
facts we believe it reasonable to infer, given the retail value of the automobile, that the petitioners derive substantial
income from automobiles which from time to time are used in the State of Oklahoma. This being the case, we hold
that under the facts presented, the trial court was justified in concluding that the petitioners derive substantial
revenue from goods used or consumed in this State."
We granted certiorari, 440 U.S. 907, 99 S.Ct. 1212, 59 L.Ed.2d 453 (1979), to consider an important constitutional
question with respect to state-court jurisdiction and to resolve a conflict between the Supreme Court of Oklahoma and
the highest courts of at least four other States. 9 We reverse.
II

The Due Process Clause of the Fourteenth Amendment limits the power of a state court to render a valid personal
judgment against a nonresident defendant. Kulko v. California Superior Court, 436 U.S. 84, 91, 98 S.Ct. 1690, 1696,
56 L.Ed.2d 132 (1978). A judgment rendered in violation of due process is void in the rendering State and is not
entitled to full faith and credit elsewhere. Pennoyer v. Neff, 95 U.S. 714, 732-733, 24 L.Ed. 565 (1878). Due process
requires that the defendant be given adequate notice of the suit, Mullane v. Central Hanover Trust Co., 339 U.S. 306,
313-314, 70 S.Ct. 652, 657, 94 L.Ed. 865 (1950), and be subject to the personal jurisdiction of the court, International
Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945). In the present case, it is not contended that
notice was inadequate; the only question is whether these particular petitioners were subject to the jurisdiction of the
Oklahoma courts.
As has long been settled, and as we reaffirm today, a state court may exercise personal jurisdiction over a
nonresident defendant only so long as there exist "minimum contacts" between the defendant and the forum State.
International Shoe Co. v. Washington, supra, at 316, 66 S.Ct., at 158. The concept of minimum contacts, in turn, can
be seen to perform two related, but distinguishable, functions. It protects the defendant against the burdens of
litigating in a distant or inconvenient forum. And it acts to ensure that the States through their courts, do not reach
out beyond the limits imposed on them by their status as coequal sovereigns in a federal system.
The protection against inconvenient litigation is typically described in terms of "reasonableness" or "fairness." We
have said that the defendant's contacts with the forum State must be such that maintenance of the suit "does not
offend 'traditional notions of fair play and substantial justice.' " International Shoe Co. v. Washington, supra, at 316,
66 S.Ct., at 158, quoting Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 342, 85 L.Ed. 278 (1940). The
relationship between the defendant and the forum must be such that it is "reasonable . . . to require the corporation
to defend the particular suit which is brought there." 326 U.S., at 317, 66 S.Ct., at 158. Implicit in this emphasis on
reasonableness is the understanding that the burden on the defendant, while always a primary concern, will in an
appropriate case be considered in light of other relevant factors, including the forum State's interest in adjudicating
the dispute, see McGee v. International Life Ins. Co., 355 U.S. 220, 223, 78 S.Ct. 199, 201, 2 L.Ed.2d 223 (1957); the
plaintiff's interest in obtaining convenient and effective relief, see Kulko v. California Superior Court, supra, 436 U.S.,
at 92, 98 S.Ct., at 1697, at least when that interest is not adequately protected by the plaintiff's power to choose the
forum, cf. Shaffer v. Heitner, 433 U.S. 186, 211, n. 37, 97 S.Ct. 2569, 2583, n. 37, 53 L.Ed.2d 683 (1977); the
interstate judicial system's interest in obtaining the most efficient resolution of controversies; and the shared interest
of the several States in furthering fundamental substantive social policies, see Kulko v. California Superior Court,
supra, 436 U.S., at 93, 98, 98 S.Ct., at 1697, 1700.
The limits imposed on state jurisdiction by the Due Process Clause, in its role as a guarantor against inconvenient
litigation, have been substantially relaxed over the years. As we noted in McGee v. International Life Ins. Co., supra,
355 U.S., at 222223, 78 S.Ct., at 201, this trend is largely attributable to a fundamental transformation in the
American economy:
"Today many commercial transactions touch two or more States and may involve parties separated by the full
continent. With this increasing nationalization of commerce has come a great increase in the amount of business
conducted by mail across state lines. At the same time modern transportation and communication have made it much
less burdensome for a party sued to defend himself in a State where he engages in economic activity."
The historical developments noted in McGee, of course, have only accelerated in the generation since that case was
decided.
Nevertheless, we have never accepted the proposition that state lines are irrelevant for jurisdictional purposes, nor
could we, and remain faithful to the principles of interstate federalism embodied in the Constitution. The economic
interdependence of the States was foreseen and desired by the Framers. In the Commerce Clause, they provided that
the Nation was to be a common market, a "free trade unit" in which the States are debarred from acting as separable
economic entities. H. P. Hood & Sons, Inc. v. Du Mond, 336 U.S. 525, 538, 69 S.Ct. 657, 665, 93 L.Ed. 865 (1949).
But the Framers also intended that the States retain many essential attributes of sovereignty, including, in particular,
the sovereign power to try causes in their courts. The sovereignty of each State, in turn, implied a limitation on the
sovereignty of all of its sister Statesa limitation express or implicit in both the original scheme of the Constitution
and the Fourteenth Amendment.
Hence, even while abandoning the shibboleth that "the authority of every tribunal is necessarily restricted by the
territorial limits of the State in which it is established," Pennoyer v. Neff, supra, 95 U.S., at 720, we emphasized that
the reasonableness of asserting jurisdiction over the defendant must be assessed "in the context of our federal
system of government," International Shoe Co. v. Washington, 326 U.S., at 317, 66 S.Ct., at 158, and stressed that
the Due Process Clause ensures not only fairness, but also the "orderly administration of the laws," id., at 319, 66
S.Ct., at 159. As we noted in Hanson v. Denckla, 357 U.S. 235, 250-251, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958):

"As technological progress has increased the flow of commerce between the States, the need for jurisdiction over
nonresidents has undergone a similar increase. At the same time, progress in communications and transportation has
made the defense of a suit in a foreign tribunal less burdensome. In response to these changes, the requirements for
personal jurisdiction over nonresidents have evolved from the rigid rule of Pennoyer v. Neff, 95 U.S. 714, 24 L.Ed.
565, to the flexible standard of International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95. But it
is a mistake to assume that this trend heralds the eventual demise of all restrictions on the personal jurisdiction of
state courts. Citation omitted. Those restrictions are more than a guarantee of immunity from inconvenient or distant
litigation. They are a consequence of territorial limitations on the power of the respective States."
Thus, the Due Process Clause "does not contemplate that a state may make binding a judgment in personam against
an individual or corporate defendant with which the state has no contacts, ties, or relations." International Shoe Co. v.
Washington, 326 U.S., at 319, 66 S.Ct., at 159. Even if the defendant would suffer minimal or no inconvenience from
being forced to litigate before the tribunals of another State; even if the forum State has a strong interest in applying
its law to the controversy; even if the forum State is the most convenient location for litigation, the Due Process
Clause, acting as an instrument of interstate federalism, may sometimes act to divest the State of its power to render
a valid judgment. Hanson v. Denckla, supra, 357 U.S., at 251, 254, 78 S.Ct., at 1238, 1240.
Applying these principles to the case at hand, 10 we find in the record before us a total absence of those affiliating
circumstances that are a necessary predicate to any exercise of state-court jurisdiction. Petitioners carry on no activity
whatsoever in Oklahoma. They close no sales and perform no services there. They avail themselves of none of the
privileges and benefits of Oklahoma law. They solicit no business there either through salespersons or through
advertising reasonably calculated to reach the State. Nor does the record show that they regularly sell cars at
wholesale or retail to Oklahoma customers or residents or that they indirectly, through others, serve or seek to serve
the Oklahoma market. In short, respondents seek to base jurisdiction on one, isolated occurrence and whatever
inferences can be drawn therefrom: the fortuitous circumstance that a single Audi automobile, sold in New York to
New York residents, happened to suffer an accident while passing through Oklahoma.
It is argued, however, that because an automobile is mobile by its very design and purpose it was "foreseeable" that
the Robinsons' Audi would cause injury in Oklahoma. Yet "foreseeability" alone has never been a sufficient benchmark
for personal jurisdiction under the Due Process Clause. In Hanson v. Denckla, supra, it was no doubt foreseeable that
the settlor of a Delaware trust would subsequently move to Florida and seek to exercise a power of appointment
there; yet we held that Florida courts could not constitutionally exercise jurisdiction over a Delaware trustee that had
no other contacts with the forum State. In Kulko v. California Superior Court, 436 U.S. 84, 98 S.Ct. 1690, 56 L.Ed.2d
132 (1978), it was surely "foreseeable" that a divorced wife would move to California from New York, the domicile of
the marriage, and that a minor daughter would live with the mother. Yet we held that California could not exercise
jurisdiction in a child-support action over the former husband who had remained in New York.
If foreseeability were the criterion, a local California tire retailer could be forced to defend in Pennsylvania when a
blowout occurs there, see Erlanger Mills, Inc. v. Cohoes Fibre Mills, Inc., 239 F.2d 502, 507 (CA4 1956); a Wisconsin
seller of a defective automobile jack could be haled before a distant court for damage caused in New Jersey, Reilly v.
Phil Tolkan Pontiac, Inc., 372 F.Supp. 1205 (N.J.1974); or a Florida soft-drink concessionaire could be summoned to
Alaska to account for injuries happening there, see Uppgren v. Executive Aviation Services, Inc., 304 F.Supp. 165,
170-171 (Minn.1969). Every seller of chattels would in effect appoint the chattel his agent for service of process. His
amenability to suit would travel with the chattel. We recently abandoned the outworn rule of Harris v. Balk, 198 U.S.
215, 25 S.Ct. 625, 49 L.Ed. 1023 (1905), that the interest of a creditor in a debt could be extinguished or otherwise
affected by any State having transitory jurisdiction over the debtor. Shaffer v. Heitner, 433 U.S. 186, 97 S.Ct. 2569,
53 L.Ed.2d 683 (1977). Having inferred the mechanical rule that a creditor's amenability to a quasi in rem action
travels with his debtor, we are unwilling to endorse an analogous principle in the present case. 11
This is not to say, of course, that foreseeability is wholly irrelevant. But the foreseeability that is critical to due process
analysis is not the mere likelihood that a product will find its way into the forum State. Rather, it is that the
defendant's conduct and connection with the forum State are such that he should reasonably anticipate being haled
into court there. See Kulko v. California Superior Court, supra, 436 U.S., at 97-98, 98 S.Ct., at 1699-1700; Shaffer v.
Heitner, 433 U.S., at 216, 97 S.Ct., at 2586, and see id., at 217-219, 97 S.Ct., at 2586-2587 (Stevens, J., concurring
in judgment). The Due Process Clause, by ensuring the "orderly administration of the laws," International Shoe Co. v.
Washington, 326 U.S., at 319, 66 S.Ct., at 159, gives a degree of predictability to the legal system that allows
potential defendants to structure their primary conduct with some minimum assurance as to where that conduct will
and will not render them liable to suit.
When a corporation "purposefully avails itself of the privilege of conducting activities within the forum State," Hanson
v. Denckla, 357 U.S., at 253, 78 S.Ct., at 1240, it has clear notice that it is subject to suit there, and can act to
alleviate the risk of burdensome litigation by procuring insurance, passing the expected costs on to customers, or, if
the risks are too great, severing its connection with the State. Hence if the sale of a product of a manufacturer or

distributor such as Audi or Volkswagen is not simply an isolated occurrence, but arises from the efforts of the
manufacturer or distributor to serve directly or indirectly, the market for its product in other States, it is not
unreasonable to subject it to suit in one of those States if its allegedly defective merchandise has there been the
source of injury to its owner or to others. The forum State does not exceed its powers under the Due Process Clause
if it asserts personal jurisdiction over a corporation that delivers its products into the stream of commerce with the
expectation that they will be purchased by consumers in the forum State. Cf. Gray v. American Radiator & Standard
Sanitary Corp., 22 Ill.2d 432, 176 N.E.2d 761 (1961).
But there is no such or similar basis for Oklahoma jurisdiction over World-Wide or Seaway in this case. Seaway's sales
are made in Massena, N. Y. World-Wide's market, although substantially larger, is limited to dealers in New York, New
Jersey, and Connecticut. There is no evidence of record that any automobiles distributed by World-Wide are sold to
retail customers outside this tristate area. It is foreseeable that the purchasers of automobiles sold by World-Wide
and Seaway may take them to Oklahoma. But the mere "unilateral activity of those who claim some relationship with
a nonresident defendant cannot satisfy the requirement of contact with the forum State." Hanson v. Denckla, supra,
at 253, 78 S.Ct., at 1239-1240.
In a variant on the previous argument, it is contended that jurisdiction can be supported by the fact that petitioners
earn substantial revenue from goods used in Oklahoma. The Oklahoma Supreme Court so found, 585 P.2d, at 354355, drawing the inference that because one automobile sold by petitioners had been used in Oklahoma, others might
have been used there also. While this inference seems less than compelling on the facts of the instant case, we need
not question the court's factual findings in order to reject its reasoning.
This argument seems to make the point that the purchase of automobiles in New York, from which the petitioners
earn substantial revenue, would not occur but for the fact that the automobiles are capable of use in distant States
like Oklahoma. Respondents observe that the very purpose of an automobile is to travel, and that travel of
automobiles sold by petitioners is facilitated by an extensive chain of Volkswagen service centers throughout the
country, including some in Oklahoma. 12 However, financial benefits accruing to the defendant from a collateral
relation to the forum State will not support jurisdiction if they do not stem from a constitutionally cognizable contact
with that State. See Kulko v. California Superior Court, 436 U.S., at 94-95, 98 S.Ct., at 1698-1699. In our view,
whatever marginal revenues petitioners may receive by virtue of the fact that their products are capable of use in
Oklahoma is far too attenuated a contact to justify that State's exercise of in personam jurisdiction over them.
Because we find that petitioners have no "contacts, ties, or relations" with the State of Oklahoma, International Shoe
Co. v. Washington, supra, 326 U.S., at 319, 66 S.Ct., at 159, the judgment of the Supreme Court of Oklahoma is
Reversed.
TOP
Justice BRENNAN, dissenting.
The Court holds that the Due Process Clause of the Fourteenth Amendment bars the States from asserting jurisdiction
over the defendants in these two cases. In each case the Court so decides because it fails to find the "minimum
contacts" that have been required since International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158,
90 L.Ed.2d 95 (1945). Because I believe that the Court reads International Shoe and its progeny too narrowly, and
because I believe that the standards enunciated by those cases may already be obsolete as constitutional boundaries,
I dissent.
* The Court's opinions focus tightly on the existence of contacts between the forum and the defendant. In so doing,
they accord too little weight to the strength of the forum State's interest in the case and fail to explore whether there
would be any actual inconvenience to the defendant. The essential inquiry in locating the constitutional limits on
state-court jurisdiction over absent defendants is whether the particular exercise of jurisdiction offends " 'traditional
notions of fair play and substantial justice.' " International Shoe, supra, at 316, 66 S.Ct., at 158, quoting Milliken v.
Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 342, 85 L.Ed. 278 (1940). The clear focus in International Shoe was on
fairness and reasonableness. Kulko v. California Superior Court, 436 U.S. 84, 92, 98 S.Ct. 1690, 1697, 56 L.Ed.2d 132
(1978). The Court specifically declined to establish a mechanical test based on the quantum of contacts between a
State and the defendant:
"Whether due process is satisfied must depend rather 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. That clause does
not contemplate that a state may make binding a judgment in personam against an individual or corporate defendant
with which the state has no contacts, ties, or relations." 326 U.S., at 319, 66 S.Ct., at 160 (emphasis added).

The existence of contacts, so long as there were some, was merely one way of giving content to the determination of
fairness and reasonableness.
Surely International Shoe contemplated that the significance of the contacts necessary to support jurisdiction would
diminish if some other consideration helped establish that jurisdiction would be fair and reasonable. The interests of
the State and other parties in proceeding with the case in a particular forum are such considerations. McGee v.
International Life Ins. Co., 355 U.S. 220, 223, 78 S.Ct. 199, 201, 2 L.Ed.2d 223 (1957), for instance, accorded great
importance to a State's "manifest interest in providing effective means of redress" for its citizens. See also Kulko v.
California Superior Court, supra, 436 U.S., at 92, 98 S.Ct., at 1697; Shaffer v. Heitner, 433 U.S. 186, 208, 97 S.Ct.
2569, 2581, 53 L.Ed.2d 683 (1977); Mullane v. Central Hanover Trust Co., 339 U.S. 306, 313, 70 S.Ct. 652, 657, 94
L.Ed. 865 (1950).
Another consideration is the actual burden a defendant must bear in defending the suit in the forum. McGee, supra.
Because lesser burdens reduce the unfairness to the defendant, jurisdiction may be justified despite less significant
contacts. The burden, of course, must be of constitutional dimension. Due process limits on jurisdiction do not protect
a defendant from all inconvenience of travel, McGee, supra, at 224, 78 S.Ct., at 201, and it would not be sensible to
make the constitutional rule turn solely on the number of miles the defendant must travel to the courtroom. 1
Instead, the constitutionally significant "burden" to be analyzed relates to the mobility of the defendant's defense. For
instance, if having to travel to a foreign forum would hamper the defense because witnesses or evidence or the
defendant himself were immobile, or if there were a disproportionately large number of witnesses or amount of
evidence that would have to be transported at the defendant's expense, or if being away from home for the duration
of the trial would work some special hardship on the defendant, then the Constitution would require special
consideration for the defendant's interests.
That considerations other than contacts between the forum and the defendant are relevant necessarily means that
the Constitution does not require that trial be held in the State which has the "best contacts" with the defendant. See
Shaffer v. Heitner, supra, 433 U.S., at 228, 97 S.Ct., at 2592 (BRENNAN, J., dissenting). The defendant has no
constitutional entitlement to the best forum or, for that matter, to any particular forum. Under even the most
restrictive view of International Shoe, several States could have jurisdiction over a particular cause of action. We need
only determine whether the forum States in these cases satisfy the constitutional minimum. 2
In each of these cases, I would find that the forum State has an interest in permitting the litigation to go forward, the
litigation is connected to the forum, the defendant is linked to the forum, and the burden of defending is not
unreasonable. Accordingly, I would hold that it is neither unfair nor unreasonable to require these defendants to
defend in the forum State.
In No. 78-952, 444 U.S. 320, 100 S.Ct. 571, 62 L.Ed.2d 516, a number of considerations suggest that Minnesota is an
interested and convenient forum. The action was filed by a bona fide resident of the forum. 3 Consequently,
Minnesota's interests are similar to, even if lesser than, the interests of California in McGee, supra, "in providing a
forum for its residents and in regulating the activities of insurance companies" doing business in the State. 4 444 U.S.,
at 332, 100 S.Ct., at 579. Moreover, Minnesota has "attempted to assert its particularized interest in trying such cases
in its courts by . . . enacting a special jurisdictional statute." Kulko, supra, 436 U.S., at 98, 98 S.Ct., at 1700; McGee,
supra, 355 U.S., at 221, 224, 78 S.Ct., at 199, 201. As in McGee, a resident forced to travel to a distant State to
prosecute an action against someone who has injured him could, for lack of funds, be entirely unable to bring the
cause of action. The plaintiff's residence in the State makes the State one of a very few convenient fora for a personal
injury case (the others usually being the defendant's home State and the State where the accident occurred). 5
In addition, the burden on the defendant is slight. As Judge Friendly has recognized, Shaffer emphasizes the
importance of identifying the real impact of the lawsuit. O'Connor v. Lee-Hy Paving Corp., 579 F.2d 194, 200 (CA2
1978) (upholding the constitutionality of jurisdiction in a very similar case under New York's law after Shaffer ). Here
the real impact is on the defendant's insurer, which is concededly amenable to suit in the forum State. The defendant
is carefully protected from financial liability because the action limits the prayer for damages to the insurance policy's
liability limit. 6 The insurer will handle the case for the defendant. The defendant is only a nominal party who need be
no more active in the case than the cooperation clause of his policy requires. Because of the ease of airline
transportation, he need not lose significantly more time than if the case were at home. Consequently, if the suit went
forward in Minnesota, the defendant would bear almost no burden or expense beyond what he would face if the suit
were in his home State. The real impact on the named defendant is the same as it is in a direct action against the
insurer, which would be constitutionally permissible. Watson v. Employers Liability Corp., 348 U.S. 66, 75 S.Ct. 166,
99 L.Ed. 74 (1954); Minichiello v. Rosenberg, 410 F.2d 106, 109-110 (CA2 1968). The only distinction is the formal,
"analytical prerequisite," 444 U.S., at 331, 100 S.Ct., at 578, of making the insured a named party. Surely the mere
addition of appellant's name to the complaint does not suffice to create a due process violation. 7

Finally, even were the relevant inquiry whether there are sufficient contacts between the forum and the named
defendant, I would find that such contacts exist. The insurer's presence in Minnesota is an advantage to the
defendant that may well have been a consideration in his selecting the policy he did. An insurer with offices in many
States makes it easier for the insured to make claims or conduct other business that may become necessary while
traveling. It is simply not true that "State Farm's decision to do business in Minnesota was completely adventitious as
far as Rush was concerned." 444 U.S., at 328-329, 100 S.Ct., at 577. By buying a State Farm policy, the defendant
availed himself of the benefits he might derive from having an insurance agent in Minnesota who could, among other
things, facilitate a suit for appellant against a Minnesota resident. It seems unreasonable to read the Constitution as
permitting one to take advantage of his nationwide insurance network but not to be burdened by it.
In sum, I would hold that appellant is not deprived of due process by being required to submit to trial in Minnesota,
first because Minnesota has a sufficient interest in and connection to this litigation and to the real and nominal
defendants, and second because the burden on the nominal defendant is sufficiently slight.
B
In No. 78-1078, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490, the interest of the forum State and its connection to the
litigation is strong. The automobile accident underlying the litigation occurred in Oklahoma. The plaintiffs were
hospitalized in Oklahoma when they brought suit. Essential witnesses and evidence were in Oklahoma. See Shaffer v.
Heitner, 433 U.S., at 208, 97 S.Ct., at 2581. The State has a legitimate interest in enforcing its laws designed to keep
its highway system safe, and the trial can proceed at least as efficiently in Oklahoma as anywhere else.
The petitioners are not unconnected with the forum. Although both sell automobiles within limited sales territories,
each sold the automobile which in fact was driven to Oklahoma where it was involved in an accident. 8 It may be
true, as the Court suggests, that each sincerely intended to limit its commercial impact to the limited territory, and
that each intended to accept the benefits and protection of the laws only of those States within the territory. But
obviously these were unrealistic hopes that cannot be treated as an automatic constitutional shield. 9
An automobile simply is not a stationary item or one designed to be used in one place. An automobile is intended to
be moved around. Someone in the business of selling large numbers of automobiles can hardly plead ignorance of
their mobility or pretend that the automobiles stay put after they are sold. It is not merely that a dealer in
automobiles foresees that they will move. 444 U.S., at 295, 100 S.Ct., at 566. The dealer actually intends that the
purchasers will use the automobiles to travel to distant States where the dealer does not directly "do business." The
sale of an automobile does purposefully inject the vehicle into the stream of interstate commerce so that it can travel
to distant States. See Kulko, 436 U.S., at 94, 98 S.Ct., at 1698; Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228,
1239, 2 L.Ed.2d 1283 (1958).
This case is similar to Ohio v. Wyandotte Chemicals Corp., 401 U.S. 493, 91 S.Ct. 1005, 28 L.Ed.2d 256 (1971). There
we indicated, in the course of denying leave to file an original-jurisdiction case, that corporations having no direct
contact with Ohio could constitutionally be brought to trial in Ohio because they dumped pollutants into streams
outside Ohio's limits which ultimately, through the action of the water, reach Lake Erie and affected Ohio. No
corporate acts, only their consequences, occurred in Ohio. The stream of commerce is just as natural a force as a
stream of water, and it was equally predictable that the cars petitioners released would reach distant States. 10
The Court accepts that a State may exercise jurisdiction over a distributor which "serves" that State "indirectly" by
"delivering its products into the stream of commerce with the expectation that they will be purchased by consumers in
the forum State." 444 U.S., at 297-298, 100 S.Ct., at 567. It is difficult to see why the Constitution should distinguish
between a case involving goods which reach a distant State through a chain of distribution and a case involving goods
which reach the same State because a consumer, using them as the dealer knew the customer would, took them
there. 11 In each case the seller purposefully injects the goods into the stream of commerce and those goods
predictably are used in the forum State. 12
Furthermore, an automobile seller derives substantial benefits from States other than its own. A large part of the
value of automobiles is the extensive, nationwide network of highways. Significant portions of that network have been
constructed by and are maintained by the individual States, including Oklahoma. The States, through their highway
programs, contribute in a very direct and important way to the value of petitioners' businesses. Additionally, a
network of other related dealerships with their service departments operates throughout the country under the
protection of the laws of the various States, including Oklahoma, and enhances the value of petitioners' businesses by
facilitating their customers' traveling.
Thus, the Court errs in its conclusion, 444 U.S., at 299, 100 S.Ct., at 568 (emphasis added), that "petitioners have no
'contacts, ties, or relations' " with Oklahoma. There obviously are contacts, and, given Oklahoma's connection to the

litigation, the contacts are sufficiently significant to make it fair and reasonable for the petitioners to submit to
Oklahoma's jurisdiction.
III
It may be that affirmance of the judgments in these cases would approach the outer limits of International Shoe's
jurisdictional principle. But that principle, with its almost exclusive focus on the rights of defendants, may be
outdated. As Mr. Justice MARSHALL wrote in Shaffer v. Heitner, 433 U.S., at 212, 97 S.Ct., at 2584: " 'Traditional
notions of fair play and substantial justice' can be as readily offended by the perpetuation of ancient forms that are no
longer justified as by the adoption of new procedures . . . ."
International Shoe inherited its defendant focus from Pennoyer v. Neff, 95 U.S. 714, 24 L.Ed. 565 (1878), and
represented the last major step this Court has taken in the long process of liberalizing the doctrine of personal
jurisdiction. Though its flexible approach represented a major advance, the structure of our society has changed in
many significant ways since International Shoe was decided in 1945. Mr. Justice Black, writing for the Court in McGee
v. International Life Ins. Co., 355 U.S. 220, 222, 78 S.Ct. 199, 201, 2 L.Ed.2d 223 (1957), recognized that "a trend is
clearly discernible toward expanding the permissible scope of state jurisdiction over foreign corporations and other
nonresidents." He explained the trend as follows:
"In part this is attributable to the fundamental transformation of our national economy over the years. Today many
commercial transactions touch two or more States and may involve parties separated by the full continent. With this
increasing nationalization of commerce has come a great increase in the amount of business conducted by mail across
state lines. At the same time modern transportation and communication have made it much less burdensome for a
party sued to defend himself in a State where he engages in economic activity." Id., at 222-223, 78 S.Ct., at 201.
As the Court acknowledges, 444 U.S., at 292-293, 100 S.Ct., at 565, both the nationalization of commerce and the
ease of transportation and communication have accelerated in the generation since 1957. 13 The model of society on
which the International Shoe Court based its opinion is no longer accurate. Business people, no matter how local their
businesses, cannot assume that goods remain in the business' locality. Customers and goods can be anywhere else in
the country usually in a matter of hours and always in a matter of a very few days.
In answering the question whether or not it is fair and reasonable to allow a particular forum to hold a trial binding on
a particular defendant, the interests of the forum State and other parties loom large in today's world and surely are
entitled to as much weight as are the interests of the defendant. The "orderly administration of the laws" provides a
firm basis for according some protection to the interests of plaintiffs and States as well as of defendants. 14 Certainly,
I cannot see how a defendant's right to due process is violated if the defendant suffers no inconvenience. See 444
U.S., at 294, 100 S.Ct., at 565.
The conclusion I draw is that constitutional concepts of fairness no longer require the extreme concern for defendants
that was once necessary. Rather, as I wrote in dissent from Shaffer v. Heitner, supra, 433 U.S., at 220, 97 S.Ct., at
2588 (emphasis added), minimum contacts must exist "among the parties, the contested transaction, and the forum
State." 15 The contacts between any two of these should not be determinative. "When a suitor seeks to lodge a suit
in a State with a substantial interest in seeing its own law applied to the transaction in question, we could wisely act
to minimize conflicts, confusion, and uncertainty by adopting a liberal view of jurisdiction, unless considerations of
fairness or efficiency strongly point in the opposite direction." 16 433 U.S., at 225-226, 97 S.Ct., at 2591. Mr. Justice
Black, dissenting in Hanson v. Denckla, 357 U.S., at 258-259, 78 S.Ct., at 1242, expressed similar concerns by
suggesting that a State should have jurisdiction over a case growing out of a transaction significantly related to that
State "unless litigation there would impose such a heavy and disproportionate burden on a nonresident defendant
that it would offend what this Court has referred to as 'traditional notions of fair play and substantial justice.' " 17
Assuming that a State gives a nonresident defendant adequate notice and opportunity to defend, I do not think the
Due Process Clause is offended merely because the defendant has to board a plane to get to the site of the trial.
The Court's opinion in No. 78-1078 suggests that the defendant ought to be subject to a State's jurisdiction only if he
has contacts with the State "such that he should reasonably anticipate being haled into court there." 18 444 U.S., at
297, 100 S.Ct., at 567. There is nothing unreasonable or unfair, however, about recognizing commercial reality. Given
the tremendous mobility of goods and people, and the inability of businessmen to control where goods are taken by
customers (or retailers), I do not think that the defendant should be in complete control of the geographical stretch of
his amenability to suit. Jurisdiction is no longer premised on the notion that nonresident defendants have somehow
impliedly consented to suit. People should understand that they are held responsible for the consequences of their
actions and that in our society most actions have consequences affecting many States. When an action in fact causes
injury in another State, the actor should be prepared to answer for it there unless defending in that State would be
unfair for some reason other than that a state boundary must be crossed. 19

In effect the Court is allowing defendants to assert the sovereign rights of their home States. The expressed fear is
that otherwise all limits on personal jurisdiction would disappear. But the argument's premise is wrong. I would not
abolish limits on jurisdiction or strip state boundaries of all significance, see Hanson, supra, 357 U.S., at 260, 78 S.Ct.,
at 1243 (Black, J., dissenting); I would still require the plaintiff to demonstrate sufficient contacts among the parties,
the forum, and the litigation to make the forum a reasonable State in which to hold the trial. 20
I would also, however, strip the defendant of an unjustified veto power over certain very appropriate foraa power
the defendant justifiably enjoyed long ago when communication and travel over long distances were slow and
unpredictable and when notions of state sovereignty were impractical and exaggerated. But I repeat that that is not
today's world. If a plaintiff can show that his chosen forum State has a sufficient interest in the litigation (or sufficient
contacts with the defendant), then the defendant who cannot show some real injury to a constitutionality protected
interest, see O'Connor v. Lee-Hy Paving Corp., 579 F.2d, at 201, should have no constitutional excuse not to appear.
21
The plaintiffs in each of these cases brought suit in a forum with which they had significant contacts and which had
significant contacts with the litigation. I am not convinced that the defendants would suffer any "heavy and
disproportionate burden" in defending the suits. Accordingly, I would hold that the Constitution should not shield the
defendants from appearing and defending in the plaintiffs' chosen fora.
TOP
Mr. Justice MARSHALL, with whom Mr. Justice BLACKMUN joins, dissenting.
For over 30 years the standard by which to measure the constitutionally permissible reach of state-court jurisdiction
has been well established:
"Due process requires only 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 certain minimum contacts with it such that the maintenance of the suit does
not offend 'traditional notions of fair play and substantial justice.' " International Shoe, Co. v. Washington, 326 U.S.
310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945), quoting Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 342, 85
L.Ed. 278 (1940).
The corollary, that the Due Process Clause forbids the assertion of jurisdiction over a defendant "with which the state
has no contacts, ties, or relations," 326 U.S., at 319, 66 S.Ct., at 160, is equally clear. The concepts of fairness and
substantial justice as applied to an evaluation of "the quality and nature of the defendant's activity," ibid., are not
readily susceptible of further definition, however, and it is not surprising that the constitutional standard is easier to
state than to apply.
This is a difficult case, and reasonable minds may differ as to whether respondents have alleged a sufficient
"relationship among the defendants, the forum, and the litigation," Shaffer v. Heitner, 433 U.S. 186, 204, 97 S.Ct.
2569, 2580, 53 L.Ed.2d 683 (1977), to satisfy the requirements of International Shoe. I am concerned, however, that
the majority has reached its result by taking an unnecessarily narrow view of petitioners' forum-related conduct. The
majority asserts that "respondents seek to base jurisdiction on one, isolated occurrence and whatever inferences can
be drawn therefrom: the fortuitous circumstance that a single Audi automobile, sold in New York to New York
residents, happened to suffer an accident while passing through Oklahoma." Ante, at 295. If that were the case, I
would readily agree that the minimum contacts necessary to sustain jurisdiction are not present. But the basis for the
assertion of jurisdiction is not the happenstance that an individual over whom petitioner had no control made a
unilateral decision to take a chattel with him to a distant State. Rather, jurisdiction is premised on the deliberate and
purposeful actions of the defendants themselves in choosing to become part of a nationwide, indeed a global,
network for marketing and servicing automobiles.
Petitioners are sellers of a product whose utility derives from its mobility. The unique importance of the automobile in
today's society, which is discussed in Mr. Justice BLACKMUN'S dissenting opinion, post, at 318, needs no further
elaboration. Petitioners know that their customers buy cars not only to make short trips, but also to travel long
distances. In fact, the nationwide service network with which they are affiliated was designed to facilitate and
encourage such travel. Seaway would be unlikely to sell many cars if authorized service were available only in
Massena, N. Y. Moreover, local dealers normally derive a substantial portion of their revenues from their service
operations and thereby obtain a further economic benefit from the opportunity to service cars which were sold in
other States. It is apparent that petitioners have not attempted to minimize the chance that their activities will have
effects in other States; on the contrary, they have chosen to do business in a way that increases that chance, because
it is to their economic advantage to do so.

To be sure, petitioners could not know in advance that this particular automobile would be driven to Oklahoma. They
must have anticipated, however, that a substantial portion of the cars they sold would travel out of New York.
Seaway, a local dealer in the second most populous State, and WorldWide, one of only seven regional Audi
distributors in the entire country, see Brief for Respondents 2, would scarcely have been surprised to learn that a car
sold by them had been driven in Oklahoma on Interstate 44, a heavily traveled transcontinental highway. In the case
of the distributor, in particular, the probability that some of the cars it sells will be driven in every one of the
contiguous States must amount to a virtual certainty. This knowledge should alert a reasonable businessman to the
likelihood that a defect in the product might manifest itself in the forum Statenot because of some unpredictable,
aberrant, unilateral action by a single buyer, but in the normal course of the operation of the vehicles for their
intended purpose.
It is misleading for the majority to characterize the argument in favor of jurisdiction as one of " 'foreseeability' alone."
Ante, at 295. As economic entities petitioners reach out from New York, knowingly causing effects in other States and
receiving economic advantage both from the ability to cause such effects themselves and from the activities of dealers
and distributors in other States. While they did not receive revenue from making direct sales in Oklahoma, they
intentionally became part of an interstate economic network, which included dealerships in Oklahoma, for pecuniary
gain. In light of this purposeful conduct I do not believe it can be said that petitioners "had no reason to expect to be
haled before an Oklahoma court." Shaffer v. Heitner, supra, 433 U.S., at 216, 97 S.Ct., at 2586; see ante, at 297, and
Kulko v. California Superior Court, 436 U.S. 84, 97-98, 98 S.Ct. 1690, 1699-1700, 94 L.Ed.2d 132 (1978).
The majority apparently acknowledges that if a product is purchased in the forum State by a consumer, that State
may assert jurisdiction over everyone in the chain of distribution. See ante, at 297-298. With this I agree. But I
cannot agree that jurisdiction is necessarily lacking if the product enters the State not through the channels of
distribution but in the course of its intended use by the consumer. We have recognized the role played by the
automobile in the expansion of our notions of personal jurisdiction. See Shaffer v. Heitner, supra, 433 U.S., at 204, 97
S.Ct., at 2579; Hess v. Pawloski, 274 U.S. 352, 47 S.Ct. 632, 71 L.Ed. 1091 (1927). Unlike most other chattels, which
may find their way into States far from where they were purchased because their owner takes them there, the
intended use of the automobile is precisely as a means of traveling from one place to another. In such a case, it is
highly artificial to restrict the concept of the "stream of commerce" to the chain of distribution from the manufacturer
to the ultimate consumer.
I sympathize with the majority's concern that the persons ought to be able to structure their conduct so as not to be
subject to suit in distant forums. But that may not always be possible. Some activities by their very nature may
foreclose the option of conducting them in such a way as to avoid subjecting oneself to jurisdiction in multiple forums.
This is by no means to say that all sellers of automobiles should be subject to suit everywhere; but a distributor of
automobiles to a multistate market and a local automobile dealer who makes himself part of a nationwide network of
dealerships can fairly expect that the cars they sell may cause injury in distant States and that they may be called on
to defend a resulting lawsuit there.
In light of the quality and nature of petitioners' activity, the majority's reliance on Kulko v. California Superior Court,
supra, is misplaced. Kulko involved the assertion of state-court jurisdiction over a nonresident individual in connection
with an action to modify his child custody rights and support obligations. His only contact with the forum State was
that he gave his minor child permission to live there with her mother. In holding that exercise of jurisdiction violated
the Due Process Clause, we emphasized that the cause of action as well as the defendant's actions in relation to the
forum State arose "not from the defendant's commercial transactions in interstate commerce, but rather from his
personal, domestic relations," 436 U.S., at 97, 98 S.Ct., at 1699 (emphasis supplied), contrasting Kulko's actions with
those of the insurance company in McGee v. International Life Ins. Co., 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223
(1957), which were undertaken for commercial benefit. *
Manifestly, the "quality and nature" of commercial activity is different, for purposes of the International Shoe test,
from actions from which a defendant obtains no economic advantage. Commercial activity is more likely to cause
effects in a larger sphere, and the actor derives an economic benefit from the activity that makes it fair to require him
to answer for his conduct where its effects are felt. The profits may be used to pay the costs of suit, and knowing that
the activity is likely to have effects in other States the defendant can readily insure against the costs of those effects,
thereby sparing himself much of the inconvenience of defending in a distant forum.
Of course, the Constitution forbids the exercise of jurisdiction if the defendant had no judicially cognizable contacts
with the forum. But as the majority acknowledges, if such contacts are present the jurisdictional inquiry requires a
balancing of various interests and policies. See ante, at 292; Rush v. Savchuk, 444 U.S., at 332, 100 S.Ct., at 579. I
believe such contacts are to be found here and that, considering all of the interests and policies at stake, requiring
petitioners to defend this action in Oklahoma is not beyond the bounds of the Constitution. Accordingly, I dissent.
TOP

Mr. Justice BLACKMUN, dissenting.

I confess that I am somewhat puzzled why the plaintiffs in this litigation are so insistent that the regional distributor
and the retail dealer, the petitioners here, who handled the ill-fated Audi automobile involved in this litigation, be
named defendants. It would appear that the manufacturer and the importer, whose subjectability to Oklahoma
jurisdiction is not challenged before this Court, ought not to be judgment-proof. It may, of course, ultimately amount
to a contest between insurance companies that, once begun, is not easily brought to a termination. Having made this
much of an observation, I pursue it no further.
For me, a critical factor in the disposition of the litigation is the nature of the instrumentality under consideration. It
has been said that we are a nation on wheels. What we are concerned with here is the automobile and its peripatetic
character. One need only examine our national network of interstate highways, or make an appearance on one of
them, or observe the variety of license plates present not only on those highways but in any metropolitan area, to
realize that any automobile is likely to wander far from its place of licensure or from its place of distribution and retail
sale. Miles per gallon on the highway (as well as in the city) and mileage per tankful are familiar allegations in
manufacturers' advertisements today. To expect that any new automobile will remain in the vicinity of its retail sale
like the 1914 electric driven car by the proverbial "little old lady"is to blink at reality. The automobile is intended for
distance as well as for transportation within a limited area.
It therefore seems to me not unreasonableand certainly not unconstitutional and beyond the reach of the principles
laid down in International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945), and its progeny
to uphold Oklahoma jurisdiction over this New York distributor and this New York dealer when the accident happened
in Oklahoma. I see nothing more unfair for them than for the manufacturer and the importer. All are in the business
of providing vehicles that spread out over the highways of our several States. It is not too much to anticipate at the
time of distribution and at the time of retail sale that this Audi would be in Oklahoma. Moreover, in assessing
"minimum contacts," foreseeable use in another State seems to me to be little different from foreseeable resale in
another State. Yet the Court declares this distinction determinative. Ante, at 297-299.
Mr. Justice BRENNAN points out in his dissent, 444 U.S., at 307, 100 S.Ct., at 585, that an automobile dealer derives
substantial benefits from States other than its own. The same is true of the regional distributor. Oklahoma does its
best to provide safe roads. Its police investigate accidents. It regulates driving within the State. It provides aid to the
victim and thereby, it is hoped, lessens damages. Accident reports are prepared and made available. All this
contributes to and enhances the business of those engaged professionally in the distribution and sale of automobiles.
All this also may benefit defendants in the very lawsuits over which the State asserts jurisdiction.
My position need not now take me beyond the automobile and the professional who does business by way of
distributing and retailing automobiles. Cases concerning other instrumentalities will be dealt with as they arise and in
their own contexts.
I would affirm the judgment of the Supreme Court of Oklahoma. Because the Court reverses that judgment, it will
now be about parsing every variant in the myriad of motor vehicles fact situations that present themselves. Some will
justify jurisdiction and others will not. All will depend on the "contact" that the Court sees fit to perceive in the
individual case.
CC | Transformed by Public.Resource.Org
1
The driver of the other automobile does not figure in the present litigation.
2
Kay Robinson sued on her own behalf. The two children sued through Harry Robinson as their father and next friend.
3
Volkswagen also entered a special appearance in the District Court, but unlike World-Wide and Seaway did not seek
review in the Supreme Court of Oklahoma and is not a petitioner here. Both Volkswagen and Audi remain as
defendants in the litigation pending before the District Court in Oklahoma.
4

The papers filed by the petitioners also claimed that the District Court lacked "venue of the subject matter," App. 9, or
"venue over the subject matter," id., at 11.
5
The District Court's rulings are unreported, and appear at App. 13 and 20.
6
Five judges joined in the opinion. Two concurred in the result, without opinion, and one concurred in part and
dissented in part, also without opinion.
7
This subsection provides:
"A court may exercise personal jurisdiction over a person, who acts directly or by an agent, as to a cause of action or
claim for relief arising from the person's . . . causing tortious injury in this state by an act or omission outside this
state if he regularly does or solicits business or engages in any other persistent course of conduct, or derives
substantial revenue from goods used or consumed or services rendered, in this state . . . ."
The State Supreme Court rejected jurisdiction based on 1701.03(a)(3), which authorizes jurisdiction over any
person "causing tortious injury in this state by an act or omission in this state." Something in addition to the infliction
of tortious injury was required.
8
Fields v. Volkswagen of America, Inc., 555 P.2d 48 (Okla.1976); Carmack v. Chemical Bank New York Trust Co., 536
P.2d 897 (Okla.1975); Hines v. Clendenning, 465 P.2d 460 (Okla.1970).
9
Cf. Tilley v. Keller Truck & Implement Corp., 200 Kan. 641, 438 P.2d 128 (1968); Granite States Volkswagen, Inc. v.
District Court, 177 Colo. 42, 492 P.2d 624 (1972); Pellegrini v. Sachs & Sons, 522 P.2d 704 (Utah 1974); Oliver v.
American Motors Corp., 70 Wash.2d 875, 425 P.2d 647 (1967).
10
Respondents argue, as a threshold matter, that petitioners waived any objections to personal jurisdiction by (1)
joining with their special appearances a challenge to the District Court's subject-matter jurisdiction, see n. 4, supra,
and (2) taking depositions on the merits of the case in Oklahoma. The trial court, however, characterized the
appearances as "special," and the Oklahoma Supreme Court, rather than finding jurisdiction waived, reached and
decided the statutory and constitutional questions. Cf. Kulko v. California Superior Court, 436 U.S. 84, 91, n. 5, 98
S.Ct. 1690, 1696, n. 5, 56 L.Ed.2d 132 (1978).
11
Respondents' counsel, at oral argument, see Tr. of Oral Arg. 19-22, 29, sought to limit the reach of the foreseeability
standard by suggesting that there is something unique about automobiles. It is true that automobiles are uniquely
mobile, see Tyson v. Whitaker & Son, Inc., 407 A.2d 1, 6, and n. 11 (Me.1979) (McKusick, C. J.), that they did play a
crucial role in the expansion of personal jurisdiction through the fiction of implied consent, e. g., Hess v. Pawloski, 274
U.S. 352, 47 S.Ct. 632, 71 L.Ed. 1091 (1927), and that some of the cases have treated the automobile as a
"dangerous instrumentality." But today, under the regime of International Shoe, we see no difference for jurisdictional
purposes between an automobile and any other chattel. The "dangerous instrumentality" concept apparently was
never used to support personal jurisdiction; and to the extent it has relevance today it bears not on jurisdiction but on
the possible desirability of imposing substantive principles of tort law such as strict liability.
12
As we have noted, petitioners earn no direct revenues from these service centers. See supra, at 289.
1

In fact, a courtroom just across the state line from a defendant may often be far more convenient for the defendant
than a courtroom in a distant corner of his own State.
2
The States themselves, of course, remain free to choose whether to extend their jurisdiction to embrace all
defendants over whom the Constitution would permit exercise of jurisdiction.
3
The plaintiff asserted jurisdiction pursuant to Minn.Stat. 571.41, subd. 2 (1978), which allows garnishment of an
insurer's obligation to defend and indemnify its insured. See 444 U.S., at 322-323, n. 3, 100 S.Ct., at 574, n. 3, and
accompanying text. The Minnesota Supreme Court has interpreted the statute as allowing suit only to the insurance
policy's liability limit. The court has held that the statute embodies the rule of Seider v. Roth, 17 N.Y.2d 111, 269
N.Y.S.2d 99, 216 N.E.2d 312 (1966).
4
To say that these considerations are relevant is a far cry from saying that they are "substituted for . . . contacts with
the defendant and the cause of action." 444 U.S., at 332, 100 S.Ct., at 579. The forum's interest in the litigation is an
independent point of inquiry even under traditional readings of International Shoe's progeny. If there is a shift in
focus, it is not away from "the relationship among the defendant, the forum, and the litigation." 444 U.S., at 332, 100
S.Ct., at 579 (emphasis added). Instead it is a shift within the same accepted relationship from the connections
between the defendant and the forum to those between the forum and the litigation.
5
In every International Shoe inquiry, the defendant, necessarily, is outside the forum State. Thus it is inevitable that
either the defendant or the plaintiff will be inconvenienced. The problem existing at the time of Pennoyer v. Neff, 95
U.S. 714, 24 L.Ed. 565, that a resident plaintiff could obtain a binding judgment against an unsuspecting, distant
defendant, has virtually disappeared in this age of instant communication and virtually instant travel.
6
It is true that the insurance contract is not the subject of the litigation. 444 U.S., at 329, 100 S.Ct., at 578. But one of
the undisputed clauses of the insurance policy is that the insurer will defend this action and pay any damages
assessed, up to the policy limit. The very purpose of the contract is to relieve the insured from having to defend
himself, and under the state statute there could be no suit absent the insurance contract. Thus, in a real sense, the
insurance contract is the source of the suit. See Shaffer v. Heitner, 433 U.S. 186, 207, 97 S.Ct. 2569, 2581, 53
L.Ed.2d 683 (1977).
7
Were the defendant a real party subject to actual liability or were there significant noneconomic consequences such
as those suggested by the Court's note 20, 444 U.S., at 331, 100 S.Ct., at 579, a more substantial connection with the
forum State might well be constitutionally required.
8
On the basis of this fact the state court inferred that the petitioners derived substantial revenue from goods used in
Oklahoma. The inference is not without support. Certainly, were use of goods accepted as a relevant contact, a
plaintiff would not need to have an exact count of the number of petitioners' cars that are used in Oklahoma.
9
Moreover, imposing liability in this case would not so undermine certainty as to destroy an automobile dealer's ability
to do business. According jurisdiction does not expand liability except in the marginal case where a plaintiff cannot
afford to bring an action except in the plaintiff's own State. In addition, these petitioners are represented by insurance
companies. They not only could, but did, purchase insurance to protect them should they stand trial and lose the
case. The costs of the insurance no doubt are passed on to customers.
10

One might argue that it was more predictable that the pollutants would reach Ohio than that one of petitioners' cars
would reach Oklahoma. The Court's analysis, however, excludes jurisdiction in a contiguous State such as
Pennsylvania as surely as in more distant States such as Oklahoma.
11
For example, I cannot understand the constitutional distinction between selling an item in New Jersey and selling an
item in New York expecting it to be used in New Jersey.
12
The manufacturer in the case cited by the Court, Gray v. American Radiator & Standard Sanitary Corp., 22 Ill.2d 432,
176 N.E.2d 761 (1961), had no more control over which States its goods would reach than did the petitioners in this
case.
13
Statistics help illustrate the amazing expansion in mobility since International Shoe. The number of revenue
passenger-miles flown on domestic and international flights increased by nearly three orders of magnitude between
1945 (450 million) and 1976 (179 billion). U.S. Department of Commerce, Historical Statistics of the United States, pt.
2, p. 770 (1975); U.S. Department of Commerce, Statistical Abstract of the United States 670 (1978). Automobile
vehicle-miles (including passenger cars, buses, and trucks) driven in the United States increased by a relatively
modest 500% during the same period, growing from 250 billion in 1945 to 1,409 billion in 1976. Historical Statistics,
supra, at 718; Statistical Abstract, supra, at 647.
14
The Court has recognized that there are cases where the interests of justice can turn the focus of the jurisdictional
inquiry away from the contacts between a defendant and the forum State. For instance, the Court indicated that the
requirement of contacts may be greatly relaxed (if indeed any personal contacts would be required) where a plaintiff
is suing a nonresident defendant to enforce a judgment procured in another State. Shaffer v. Heitner, 433 U.S., at
210-211, nn. 36, 37, 97 S.Ct., at 2582-2583, nn. 36, 37.
15
In some cases, the inquiry will resemble the inquiry commonly undertaken in determining which State's law to apply.
That it is fair to apply a State's law to a nonresident defendant is clearly relevant in determining whether it is fair to
subject the defendant to jurisdiction in that State. Shaffer v. Heitner, supra, at 225, 97 S.Ct., at 2590 (BRENNAN, J.,
dissenting); Hanson v. Denckla, 357 U.S. 235, 258, 78 S.Ct. 1228, 1242, 2 L.Ed.2d 1283 (1958) (Black, J., dissenting).
See n. 19, infra.
16
Such a standard need be no more uncertain than the Court's test "in which few answers will be written 'in black and
white. The greys are dominant and even among them the shades are innumerable.' Estin v. Estin, 334 U.S. 541, 545,
68 S.Ct. 1213, 1216, 92 L.Ed. 1561 (1948)." Kulko v. California Superior Court, 436 U.S. 84, 92, 98 S.Ct. 1690, 1697,
56 L.Ed.2d 132 (1978).
17
This strong emphasis on the State's interest is nothing new. This Court, permitting the forum to exercise jurisdiction
over nonresident claimants to a trust largely on the basis of the forum's interest in closing the trust, stated:
"[T]he interest of each state in providing means to close trusts that exist by the grace of its laws and are
administered under the supervision of its courts is so insistent and rooted in custom as to establish beyond doubt the
right of its courts to determine the interests of all claimants, resident or nonresident, provided its procedure accords
full opportunity to appear and be heard." Mullane v. Central Hanover Trust Co., 339 U.S. 306, 313, 70 S.Ct. 652, 656,
94 L.Ed. 865 (1950).
18

The Court suggests that this is the critical foreseeability rather than the likelihood that the product will go to the
forum State. But the reasoning begs the question. A defendant cannot know if his actions will subject him to
jurisdiction in another State until we have declared what the law of jurisdiction is.
19
One consideration that might create some unfairness would be if the choice of forum also imposed on the defendant
an unfavorable substantive law which the defendant could justly have assumed would not apply. See n. 15, supra.
20
For instance, in No. 78-952, if the plaintiff were not a bona fide resident of Minnesota when the suit was filed or if the
defendant were subject to financial liability, I might well reach a different result. In No. 78-1078, I might reach a
different result if the accident had not occurred in Oklahoma.
21
Frequently, of course, the defendant will be able to influence the choice of forum through traditional doctrines, such
as venue or forum non conveniens, permitting the transfer of litigation. Shaffer v. Heitner, 433 U.S., at 228, n. 8, 97
S.Ct., at 2592, n. 8 (BRENNAN, J., dissenting).
*
Similarly, I believe the Court in Hanson v. Denckla, 357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958), was
influenced by the fact that trust administration has traditionally been considered a peculiarly local activity.

ASAHI METAL v. SUPERIOR COURT

Asahi Metal Indus. v. Superior Court - 480 U.S. 102 (1987)
Syllabus
Case
U.S. Supreme Court
Asahi Metal Indus. v. Superior Court, 480 U.S. 102 (1987)
Asahi Metal Indus. Co., Ltd. v. Superior Ct. of California
No. 85-693
Argued November 5, 1986
Decided February 24, 1987
480 U.S. 102
CERTIORARI TO THE SUPREME COURT OF CALIFORNIA
Syllabus
Petitioner manufactures tire valve assemblies in Japan and sells them to several tire manufacturers, including Cheng
Shin Rubber Industrial Co. (Cheng Shin). The sales to Cheng Shin, which amounted to at least 100,000 assemblies
annually from 1978 to 1982, took place in Taiwan, to which the assemblies were shipped from Japan. Cheng Shin
incorporates the assemblies into its finished tires, which it sells throughout the world, including the United States,
where 20 percent of its sales take place in California. Affidavits indicated that petitioner was aware that tires
incorporating its assemblies would end up in California, but, on the other hand, that it never contemplated that its
sales to Cheng Shin in Taiwan would subject it to lawsuits in California. Nevertheless, in 1979, a product liability suit
was brought in California Superior Court arising from a motorcycle accident allegedly caused by defects in a tire
manufactured by Cheng Shin, which in turn filed a cross-complaint seeking indemnification from petitioner. Although
the main suit was eventually settled and dismissed, the Superior Court denied petitioner's motion to quash the
summons issued against it. The State Court of Appeal then ordered that the summons be quashed, but the State
Supreme Court reversed, finding that petitioner's intentional act of placing its assemblies into the stream of commerce
by delivering them to Cheng Shin in Taiwan, coupled with its awareness that some of them would eventually reach
California, were sufficient to support state court jurisdiction under the Due Process Clause.
Held: The judgment is reversed, and the case is remanded.
39 Cal.3d 35, 702 P.2d 543, reversed and remanded.
JUSTICE O'CONNOR delivered the opinion of the Court as to Parts I and II-B, concluding that the state court's
exercise of personal jurisdiction over petitioner would be unreasonable and unfair, in violation of the Due Process
Clause. Pp. 480 U. S. 113-116.
(a) The burden imposed on petitioner by the exercise of state court jurisdiction would be severe, since petitioner
would be required not only to traverse the distance between Japan and California, but also to submit
Page 480 U. S. 103
its dispute with Cheng Shin to a foreign judicial system. Such unique burdens should have significant weight in
assessing the reasonableness of extending personal jurisdiction over national borders. Pp. 480 U. S. 113-114.
(b) The interests of Cheng Shin and the forum State in the exercise of jurisdiction over petitioner would be slight, and
would be insufficient to justify the heavy burdens placed on petitioner. The only surviving question is whether a
Japanese corporation should indemnify a Taiwanese corporation on the bases of a sale made in Taiwan and a
shipment of goods from Japan to Taiwan. The facts do not demonstrate that it would be more convenient for Cheng
Shin to litigate its claim in California, rather than in Taiwan or Japan, while California's interests are diminished by
Cheng Shin's lack of a California residence and by the fact that the dispute is primarily about indemnity, rather than
the safety of consumers. While the possibility of being sued in California might create an additional deterrent to
petitioner's manufacture of unsafe assemblies, the same effect would result from pressures placed on petitioner by
Cheng Shin, whose California sales would subject it to state tort law. Pp. 480 U. S. 114-115.
(c) The procedural and substantive policies of other nations whose interests are affected by the forum State's
assertion of jurisdiction over an alien defendant must be taken into account, and great care must be exercised when
considering personal jurisdiction in the international context. Although other nations' interests will differ from case to
case, those interests, as well as the Federal Government's interest in its foreign relations policies, will always be best
served by a careful inquiry into the reasonableness of the particular assertion of jurisdiction, and an unwillingness to
find an alien defendant's serious burdens outweighed where, as here, the interests of the plaintiff and the forum State
are minimal. P. 480 U. S. 115.
JUSTICE O'CONNOR, joined by THE CHIEF JUSTICE, JUSTICE POWELL, and JUSTICE SCALIA, concluded in Parts II-A
and III that, even assuming, arguendo, that petitioner was aware that some of the assemblies it sold to Cheng Shin
would be incorporated into tires sold in California, the facts do not establish minimum contacts sufficient to render the
State's exercise of personal jurisdiction consistent with fair play and substantial justice, as required by the Due
Process Clause. Since petitioner does not do business, have an office, agents, employees, or property, or advertise or
solicit business in California, and since it did not create, control, or employ the distribution system that brought its
assemblies to, or design them in anticipation of sales in, California, it did not engage in any action to purposely avail

itself of the California market. The "substantial connection" between a defendant and the forum State necessary for a
finding of minimum contacts must derive from an action purposely directed toward the forum State, and the mere
placement of a product
Page 480 U. S. 104
into the stream of commerce is not such an act, even if done with an awareness that the stream will sweep the
product into the forum State absent additional conduct indicating an intent to serve the forum state market. Pp. 480
U. S. 108-113, 116.
JUSTICE BRENNAN, joined by JUSTICE WHITE, JUSTICE MARSHALL, and JUSTICE BLACKMUN, agreed with the
Court's conclusion in Part II-B that the exercise of jurisdiction over petitioner would not comport with "fair play and
substantial justice," but disagreed with Part II-A's interpretation of the stream-of-commerce theory, and with the
conclusion that petitioner did not purposely avail itself of the California market. As long as a defendant is aware that
the final product is being marketed in the forum State, jurisdiction premised on the placement of a product into the
stream of commerce is consistent with the Due Process Clause, and no showing of additional conduct is required.
Here, even though petitioner did not design or control the distribution system that carried its assemblies into
California, its regular and extensive sales to a manufacturer it knew was making regular sales of the final product in
California were sufficient to establish minimum contacts with California. Pp. 480 U. S. 116-121.
JUSTICE STEVENS, joined by JUSTICE WHITE and JUSTICE BLACKMUN, agreed that the California Supreme Court's
judgment should be reversed for the reasons stated in Part II-B of the Court's opinion, but did not join Part II-A, for
the reasons that (1) the Court's holding that the State's exercise of jurisdiction over petitioner would be
"unreasonable and unfair" alone requires reversal, and renders any examination of minimum contacts unnecessary;
and (2) even assuming that the "purposeful availment" test should be formulated here, Part II-A misapplies it to the
facts of this case, since, in its dealings with Cheng Shin, petitioner has arguably engaged in a higher quantum of
conduct than the mere placement of a product into the stream of commerce. Pp. 480 U. S. 121-122.
O'CONNOR, J., announced the judgment of the Court and delivered the opinion for a unanimous Court with respect to
Part I, the opinion of the Court with respect to Part II-B, in which REHNQUIST, C.J., and BRENNAN, WHITE,
MARSHALL, BLACKMUN, POWELL, and STEVENS, JJ., joined, and an opinion with respect to Parts II-A and III, in
which REHNQUIST, C.J., and POWELL and SCALIA, JJ., joined. BRENNAN, J., filed an opinion concurring in part and
concurring in the judgment, in which WHITE, MARSHALL, and BLACKMUN, JJ., joined, post, p. 480 U. S. 116.
STEVENS, J., filed an opinion concurring in part and concurring in the judgment, in which WHITE and BLACKMUN, JJ.,
joined, post, p. 480 U. S. 121.
Page 480 U. S. 105
JUSTICE O'CONNOR announced the judgment of the Court and delivered the unanimous opinion of the Court with
respect to Part I, the opinion of the Court with respect to Part II-B, in which THE CHIEF JUSTICE, JUSTICE BRENNAN,
JUSTICE WHITE, JUSTICE MARSHALL, JUSTICE BLACKMUN, JUSTICE POWELL, and JUSTICE STEVENS join, and an
opinion with respect to Parts II-A and III, in which THE CHIEF JUSTICE, JUSTICE POWELL, and JUSTICE SCALIA join.
This case presents the question whether the mere awareness on the part of a foreign defendant that the components
it manufactured, sold, and delivered outside the United States would reach the forum State in the stream of
commerce constitutes "minimum contacts" between the defendant and the forum State such that the exercise of
jurisdiction "does not offend traditional notions of fair play and substantial justice.'" International Shoe Co. v.
Washington, 326 U. S. 310, 326 U. S. 316 (1945), quoting Milliken v. Meyer, 311 U. S. 457, 311 U. S. 463 (1940).
I
On September 23, 1978, on Interstate Highway 80 in Solano County, California, Gary Zurcher lost control of his
Honda motorcycle and collided with a tractor. Zurcher was severely injured, and his passenger and wife, Ruth Ann
Moreno, was killed. In September 1979, Zurcher filed a product liability action in the Superior Court of the State of
Page 480 U. S. 106
California in and for the County of Solano. Zurcher alleged that the 1978 accident was caused by a sudden loss of air
and an explosion in the rear tire of the motorcycle, and alleged that the motorcycle tire, tube, and sealant were
defective. Zurcher's complaint named, inter alia, Cheng Shin Rubber Industrial Co., Ltd. (Cheng Shin), the Taiwanese
manufacturer of the tube. Cheng Shin in turn filed a cross-complaint seeking indemnification from its codefendants
and from petitioner, Asahi Metal Industry Co., Ltd. (Asahi), the manufacturer of the tube's valve assembly. Zurcher's
claims against Cheng Shin and the other defendants were eventually settled and dismissed, leaving only Cheng Shin's
indemnity action against Asahi.
California's long-arm statute authorizes the exercise of jurisdiction "on any basis not inconsistent with the Constitution
of this state or of the United States." Cal.Civ.Proc.Code Ann. 410.10 (West 1973). Asahi moved to quash Cheng
Shin's service of summons, arguing the State could not exert jurisdiction over it consistent with the Due Process
Clause of the Fourteenth Amendment.
In relation to the motion, the following information was submitted by Asahi and Cheng Shin. Asahi is a Japanese
corporation. It manufactures tire valve assemblies in Japan and sells the assemblies to Cheng Shin, and to several
other tire manufacturers, for use as components in finished tire tubes. Asahi's sales to Cheng Shin took place in
Taiwan. The shipments from Asahi to Cheng Shin were sent from Japan to Taiwan. Cheng Shin bought and
incorporated into its tire tubes 150,000 Asahi valve assemblies in 1978; 500,000 in 1979; 500,000 in 1980;100,000 in
1981; and 100,000 in 1982. Sales to Cheng Shin accounted for 1.24 percent of Asahi's income in 1981 and 0.44

percent in 1982. Cheng Shin alleged that approximately 20 percent of its sales in the United States are in California.
Cheng Shin purchases valve assemblies from other suppliers as well, and sells finished tubes throughout the world.
Page 480 U. S. 107
In 1983, an attorney for Cheng Shin conducted an informal examination of the valve stems of the tire tubes sold in
one cycle store in Solano County. The attorney declared that, of the approximately 115 tire tubes in the store, 97
were purportedly manufactured in Japan or Taiwan, and of those 97, 21 valve stems were marked with the circled
letter "A", apparently Asahi's trademark. Of the 21 Asahi valve stems, 12 were incorporated into Cheng Shin tire
tubes. The store contained 41 other Cheng Shin tubes that incorporated the valve assemblies of other manufacturers.
Declaration of Kenneth B. Shepard in Opposition to Motion to Quash Subpoena, App. to Brief for Respondent 5-6. An
affidavit of a manager of Cheng Shin whose duties included the purchasing of component parts stated:
"In discussions with Asahi regarding the purchase of valve stem assemblies, the fact that my Company sells tubes
throughout the world and specifically the United States has been discussed. I am informed and believe that Asahi was
fully aware that valve stem assemblies sold to my Company and to others would end up throughout the United States
and in California."
39 Cal.3d 35, 48, n. 4, 702 P.2d 543, 549-550, n. 4 (1985). An affidavit of the president of Asahi, on the other hand,
declared that Asahi "has never contemplated that its limited sales of tire valves to Cheng Shin in Taiwan would
subject it to lawsuits in California." Ibid. The record does not include any contract between Cheng Shin and Asahi. Tr.
of Oral Arg. 24.
Primarily on the basis of the above information, the Superior Court denied the motion to quash summons, stating:
"Asahi obviously does business on an international scale. It is not unreasonable that they defend claims of defect in
their product on an international scale."
Order Denying Motion to Quash Summons, Zurcher v. Dunlop Tire & Rubber Co., No. 76180 (Super. Ct., Solano
County, Cal., Apr. 20, 1983).
The Court of Appeal of the State of California issued a peremptory writ of mandate commanding the Superior Court to
quash service of summons. The court concluded that
"it
Page 480 U. S. 108
would be unreasonable to require Asahi to respond in California solely on the basis of ultimately realized foreseeability
that the product into which its component was embodied would be sold all over the world, including California."
App. to Pet. for Cert. B5-B6.
The Supreme Court of the State of California reversed and discharged the writ issued by the Court of Appeal. 39
Cal.3d 35, 702 P.2d 543 (1985). The court observed:
"Asahi has no offices, property or agents in California. It solicits no business in California, and has made no direct
sales [in California]."
Id. at 48, 702 P.2d at 549. Moreover, "Asahi did not design or control the system of distribution that carried its valve
assemblies into California." Id. at 49, 702 P.2d at 549. Nevertheless, the court found the exercise of jurisdiction over
Asahi to be consistent with the Due Process Clause. It concluded that Asahi knew that some of the valve assemblies
sold to Cheng Shin would be incorporated into tire tubes sold in California, and that Asahi benefited indirectly from
the sale in California of products incorporating its components. The court considered Asahi's intentional act of placing
its components into the stream of commerce -- that is, by delivering the components to Cheng Shin in Taiwan -coupled with Asahi's awareness that some of the components would eventually find their way into California, sufficient
to form the basis for state court jurisdiction under the Due Process Clause.
We granted certiorari, 475 U.S. 1044 (1986), and now reverse.
II
B
The Due Process Clause of the Fourteenth Amendment limits the power of a state court to exert personal jurisdiction
over a nonresident defendant. "[T]he constitutional touchstone" of the determination whether an exercise of personal
jurisdiction comports with due process "remains whether the defendant purposefully established minimum contacts' in
the
Page 480 U. S. 109
forum State." Burger King Corp. v. Rudzewicz, 471 U. S. 462, 471 U. S. 474 (1985), quoting International Shoe Co. v.
Washington, 326 U.S. at 326 U. S. 316. Most recently, we have reaffirmed the oft-quoted reasoning of Hanson v.
Denckla, 357 U. S. 235, 357 U. S. 253 (1958), that minimum contacts must have a basis in
"some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum
State, thus invoking the benefits and protections of its laws."
Burger King, 471 U.S. at 471 U. S. 475.
"Jurisdiction is proper . . . where the contacts proximately result from actions by the defendant himself that create a
'substantial connection' with the forum State."
Ibid., quoting McGee v. International Life Insurance Co., 355 U. S. 220, 355 U. S. 223 (1957) (emphasis in original).
Applying the principle that minimum contacts must be based on an act of the defendant, the Court in World-Wide
Volkswagen Corp. v. Woodson, 444 U. S. 286 (1980), rejected the assertion that a consumer's unilateral act of
bringing the defendant's product into the forum State was a sufficient constitutional basis for personal jurisdiction
over the defendant. It had been argued in World-Wide Volkswagen that, because an automobile retailer and its

wholesale distributor sold a product mobile by design and purpose, they could foresee being haled into court in the
distant States into which their customers might drive. The Court rejected this concept of foreseeability as an
insufficient basis for jurisdiction under the Due Process Clause. Id. at 444 U. S. 295-296. The Court disclaimed,
however, the idea that "foreseeability is wholly irrelevant" to personal jurisdiction, concluding that
"[t]he forum State does not exceed its powers under the Due Process Clause if it asserts personal jurisdiction over a
corporation that delivers its products into the stream of commerce with the expectation that they will be purchased by
consumers in the forum State."
Id. at 444 U. S. 297-298 (citation omitted). The Court reasoned:
Page 480 U. S. 110
"When a corporation 'purposefully avails itself of the privilege of conducting activities within the forum State,' Hanson
v. Denckla, 357 U.S. [235,] 357 U. S. 253 [(1958)], it has clear notice that it is subject to suit there, and can act to
alleviate the risk of burdensome litigation by procuring insurance, passing the expected costs on to customers, or, if
the risks are too great, severing its connection with the State. Hence, if the sale of a product of a manufacturer or
distributor . . . is not simply an isolated occurrence, but arises from the efforts of the manufacturer or distributor to
serve, directly or indirectly, the market for its product in other States, it is not unreasonable to subject it to suit in one
of those States if its allegedly defective merchandise has there been the source of injury to its owners or to others."
Id. at 444 U. S. 297.
In World-Wide Volkswagen itself, the state court sought to base jurisdiction not on any act of the defendant, but on
the foreseeable unilateral actions of the consumer. Since World-Wide Volkswagen, lower courts have been confronted
with cases in which the defendant acted by placing a product in the stream of commerce, and the stream eventually
swept defendant's product into the forum State, but the defendant did nothing else to purposefully avail itself of the
market in the forum State. Some courts have understood the Due Process Clause, as interpreted in World-Wide
Volkswagen, to allow an exercise of personal jurisdiction to be based on no more than the defendant's act of placing
the product in the stream of commerce. Other courts have understood the Due Process Clause and the above-quoted
language in World-Wide Volkswagen to require the action of the defendant to be more purposefully directed at the
forum State than the mere act of placing a product in the stream of commerce.
The reasoning of the Supreme Court of California in the present case illustrates the former interpretation of WorldWide Volkswagen. The Supreme Court of California held that, because the stream of commerce eventually brought
Page 480 U. S. 111
some valves Asahi sold Cheng Shin into California, Asahi's awareness that its valves would be sold in California was
sufficient to permit California to exercise jurisdiction over Asahi consistent with the requirements of the Due Process
Clause. The Supreme Court of California's position was consistent with those courts that have held that mere
foreseeability or awareness was a constitutionally sufficient basis for personal jurisdiction if the defendant's product
made its way into the forum State while still in the stream of commerce. See Bean Dredging Corp. v. Dredge
Technology Corp., 744 F.2d 1081 (CA5 1984); Hedrick v. Daiko Shoji Co., 715 F.2d 1355 (CA9 1983).
Other courts, however, have understood the Due Process Clause to require something more than that the defendant
was aware of its product's entry into the forum State through the stream of commerce in order for the State to exert
jurisdiction over the defendant. In the present case, for example, the State Court of Appeal did not read the Due
Process Clause, as interpreted by World-Wide Volkswagen, to allow
"mere foreseeability that the product will enter the forum state [to] be enough by itself to establish jurisdiction over
the distributor and retailer."
App. to Pet. for Cert. B5. In Humble v. Toyota Motor Co., 727 F.2d 709 (CA8 1984), an injured car passenger brought
suit against Arakawa Auto Body Company, a Japanese corporation that manufactured car seats for Toyota. Arakawa
did no business in the United States; it had no office, affiliate, subsidiary, or agent in the United States; it
manufactured its component parts outside the United States and delivered them to Toyota Motor Company in Japan.
The Court of Appeals, adopting the reasoning of the District Court in that case, noted that, although it "does not
doubt that Arakawa could have foreseen that its product would find its way into the United States," it would be
"manifestly unjust" to require Arakawa to defend itself in the United States. Id. at 710-711, quoting 578 F.Supp. 530,
533 (ND Iowa 1982). See also Hutson v. Fehr Bros.,
Page 480 U. S. 112
Inc., 584 F.2d 833 (CA8 1978); see generally Max Daetwyler Corp. v. R. Meyer, 762 F.2d 290, 299 (CA3 1985)
(collecting "stream of commerce" cases in which the "manufacturers involved had made deliberate decisions to
market their products in the forum state").
We now find this latter position to be consonant with the requirements of due process. The "substantial connection,"
Burger King, 471 U.S. at 471 U. S. 475; McGee, 355 U.S. at 355 U. S. 223, between the defendant and the forum
State necessary for a finding of minimum contacts must come about by an action of the defendant purposefully
directed toward the forum State. Burger King, supra, at 471 U. S. 476; Keeton v. Hustler Magazine, Inc., 465 U. S.
770, 465 U. S. 774 (1984). The placement of a product into the stream of commerce, without more, is not an act of
the defendant purposefully directed toward the forum State. Additional conduct of the defendant may indicate an
intent or purpose to serve the market in the forum State, for example, designing the product for the market in the
forum State, advertising in the forum State, establishing channels for providing regular advice to customers in the
forum State, or marketing the product through a distributor who has agreed to serve as the sales agent in the forum
State. But a defendant's awareness that the stream of commerce may or will sweep the product into the forum State

does not convert the mere act of placing the product into the stream into an act purposefully directed toward the
forum State.
Assuming, arguendo, that respondents have established Asahi's awareness that some of the valves sold to Cheng Shin
would be incorporated into tire tubes sold in California, respondents have not demonstrated any action by Asahi to
purposefully avail itself of the California market. Asahi does not do business in California. It has no office, agents,
employees, or property in California. It does not advertise or otherwise solicit business in California. It did not create,
control, or employ the distribution system that brought its valves to California. Cf. Hicks v. Kawasaki Heavy Industries,
Page 480 U. S. 113
452 F.Supp. 130 (MD Pa. 1978). There is no evidence that Asahi designed its product in anticipation of sales in
California. Cf. Rockwell International Corp. v. Costruzioni Aeronautiche Giovanni Agusta, 553 F.Supp. 328 (ED Pa.
1982). On the basis of these facts, the exertion of personal jurisdiction over Asahi by the Superior Court of California
exceeds the limits of due process.
B
The strictures of the Due Process Clause forbid a state court to exercise personal jurisdiction over Asahi under
circumstances that would offend "traditional notions of fair play and substantial justice.'" International Shoe Co. v.
Washington, 326 U.S. at 326 U. S. 316, quoting Milliken v. Meyer, 311 U.S. at 311 U. S. 463.
We have previously explained that the determination of the reasonableness of the exercise of jurisdiction in each case
will depend on an evaluation of several factors. A court must consider the burden on the defendant, the interests of
the forum State, and the plaintiff's interest in obtaining relief. It must also weigh in its determination
"the interstate judicial system's interest in obtaining the most efficient resolution of controversies; and the shared
interest of the several States in furthering fundamental substantive social policies."
World-Wide Volkswagen, 444 U.S. at 444 U. S. 292 (citations omitted).
Page 480 U. S. 114
A consideration of these factors in the present case clearly reveals the unreasonableness of the assertion of
jurisdiction over Asahi, even apart from the question of the placement of goods in the stream of commerce.
Certainly the burden on the defendant in this case is severe. Asahi has been commanded by the Supreme Court of
California not only to traverse the distance between Asahi's headquarters in Japan and the Superior Court of California
in and for the County of Solano, but also to submit its dispute with Cheng Shin to a foreign nation's judicial system.
The unique burdens placed upon one who must defend oneself in a foreign legal system should have significant
weight in assessing the reasonableness of stretching the long arm of personal jurisdiction over national borders.
When minimum contacts have been established, often the interests of the plaintiff and the forum in the exercise of
jurisdiction will justify even the serious burdens placed on the alien defendant. In the present case, however, the
interests of the plaintiff and the forum in California's assertion of jurisdiction over Asahi are slight. All that remains is a
claim for indemnification asserted by Cheng Shin, a Tawainese corporation, against Asahi. The transaction on which
the indemnification claim is based took place in Taiwan; Asahi's components were shipped from Japan to Taiwan.
Cheng Shin has not demonstrated that it is more convenient for it to litigate its indemnification claim against Asahi in
California, rather than in Taiwan or Japan.
Because the plaintiff is not a California resident, California's legitimate interests in the dispute have considerably
diminished. The Supreme Court of California argued that the State had an interest in "protecting its consumers by
ensuring that foreign manufacturers comply with the state's safety standards." 39 Cal.3d at 49, 702 P.2d at 550. The
State Supreme Court's definition of California's interest, however, was overly broad. The dispute between Cheng Shin
and Asahi is primarily about indemnification, rather than safety
Page 480 U. S. 115
standards. Moreover, it is not at all clear at this point that California law should govern the question whether a
Japanese corporation should indemnify a Taiwanese corporation on the basis of a sale made in Taiwan and a
shipment of goods from Japan to Taiwan. Phillips Petroleum Co. v. Shutts, 472 U. S. 797, 472 U. S. 821-822 (1985);
Allstate Insurance Co. v. Hague, 449 U. S. 302, 449 U. S. 312-313 (1981). The possibility of being haled into a
California court as a result of an accident involving Asahi's components undoubtedly creates an additional deterrent to
the manufacture of unsafe components; however, similar pressures will be placed on Asahi by the purchasers of its
components as long as those who use Asahi components in their final products, and sell those products in California,
are subject to the application of California tort law.
World-Wide Volkswagen also admonished courts to take into consideration the interests of the "several States," in
addition to the forum State, in the efficient judicial resolution of the dispute and the advancement of substantive
policies. In the present case, this advice calls for a court to consider the procedural and substantive policies of other
nations whose interests are affected by the assertion of jurisdiction by the California court. The procedural and
substantive interests of other nations in a state court's assertion of jurisdiction over an alien defendant will differ from
case to case. In every case, however, those interests, as well as the Federal Government's interest in its foreign
relations policies, will be best served by a careful inquiry into the reasonableness of the assertion of jurisdiction in the
particular case, and an unwillingness to find the serious burdens on an alien defendant outweighed by minimal
interests on the part of the plaintiff or the forum State. "Great care and reserve should be exercised when extending
our notions of personal jurisdiction into the international field." United States v. First National City Bank, 379 U. S.
378, 379 U. S. 404 (1965) (Harlan, J., dissenting). See Born, Reflections on Judicial Jurisdiction in International Cases,
to be published in 17 Ga.J.Int'l & Comp.L. 1 (1987).

Page 480 U. S. 116

Considering the international context, the heavy burden on the alien defendant, and the slight interests of the plaintiff
and the forum State, the exercise of personal jurisdiction by a California court over Asahi in this instance would be
unreasonable and unfair.
III
Because the facts of this case do not establish minimum contacts such that the exercise of personal jurisdiction is
consistent with fair play and substantial justice, the judgment of the Supreme Court of California is reversed, and the
case is remanded for further proceedings not inconsistent with this opinion.
It is so ordered.
* We have no occasion here to determine whether Congress could, consistent with the Due Process Clause of the
Fifth Amendment, authorize federal court personal jurisdiction over alien defendants based on the aggregate of
national contacts, rather than on the contacts between the defendant and the State in which the federal court sits.
See Max Daetwyler Corp. v. R. Meyer, 762 F.2d 290, 293-295 (CA3 1985); DeJames v. Magnificence Carriers, Inc.,
654 F.2d 280, 283 (CA3 1981); see also Born, Reflections on Judicial Jurisdiction in International Cases, to be
published in 17 Ga. J. Int'l & Comp. L. 1 (1987); Lilly, Jurisdiction Over Domestic and Alien Defendants, 69 Va.L.Rev.
85, 127-145 (1983).
JUSTICE BRENNAN, with whom JUSTICE WHITE, JUSTICE MARSHALL, and JUSTICE BLACKMUN join, concurring in
part and concurring in the judgment.
I do not agree with the interpretation in Part II-A of the stream-of-commerce theory, nor with the conclusion that
Asahi did not "purposely avail itself of the California market." Ante at 480 U. S. 112. I do agree, however, with the
Court's conclusion in Part II-B that the exercise of personal jurisdiction over Asahi in this case would not comport with
"fair play and substantial justice," International Shoe Co. v. Washington, 326 U. S. 310, 326 U. S. 320 (1945). This is
one of those rare cases in which
"minimum requirements inherent in the concept of 'fair play and substantial justice' . . . defeat the reasonableness of
jurisdiction even [though] the defendant has purposefully engaged in forum activities."
Burger King Corp. v. Rudzewicz, 471 U. S. 462, 471 U. S. 477-478 (1985). I therefore join Parts I and II-B of the
Court's opinion, and write separately to explain my disagreement with Part II-A.
Part II-A states that
"a defendant's awareness that the stream of commerce may or will sweep the product into the forum State does not
convert the mere act of placing the product into the stream into an act purposefully directed toward
Page 480 U. S. 117
the forum State."
Ante at 480 U. S. 112. Under this view, a plaintiff would be required to show "[a]dditional conduct" directed toward
the forum before finding the exercise of jurisdiction over the defendant to be consistent with the Due Process Clause.
Ibid. I see no need for such a showing, however. The stream of commerce refers not to unpredictable currents or
eddies, but to the regular and anticipated flow of products from manufacture to distribution to retail sale. As long as a
participant in this process is aware that the final product is being marketed in the forum State, the possibility of a
lawsuit there cannot come as a surprise. Nor will the litigation present a burden for which there is no corresponding
benefit. A defendant who has placed goods in the stream of commerce benefits economically from the retail sale of
the final product in the forum State, and indirectly benefits from the State's laws that regulate and facilitate
commercial activity. These benefits accrue regardless of whether that participant directly conducts business in the
forum State, or engages in additional conduct directed toward that State. Accordingly, most courts and commentators
have found that jurisdiction premised on the placement of a product into the stream of commerce is consistent with
the Due Process Clause, and have not required a showing of additional conduct. [Footnote 1]
Page 480 U. S. 118
The endorsement in Part II-A of what appears to be the minority view among Federal Courts of Appeals [Footnote 2]
represents a marked retreat from the analysis in World-Wide Volkswagen v. Woodson, 444 U. S. 286 (1980). In that
case,
"respondents [sought] to base jurisdiction on one isolated occurrence and whatever inferences can be drawn
therefrom: the fortuitous circumstance that a single Audi automobile, sold in New York to New York residents,
happened to suffer an accident while passing through Oklahoma."
Id. at 444 U. S. 295. The Court held that the possibility of an accident in Oklahoma, while to some extent foreseeable
in light of the inherent mobility of the automobile, was not enough to establish
Page 480 U. S. 119
minimum contacts between the forum State and the retailer or distributor. Id. at 444 U. S. 295-296. The Court then
carefully explained:
"[T]his is not to say, of course, that foreseeability is wholly irrelevant. But the foreseeability that is critical to due
process analysis is not the mere likelihood that a product will find its way into the forum State. Rather, it is that the
defendant's conduct and connection with the forum State are such that he should reasonably anticipate being haled
into Court there."
Id. at 444 U. S. 297. The Court reasoned that, when a corporation may reasonably anticipate litigation in a particular
forum, it cannot claim that such litigation is unjust or unfair, because it

"can act to alleviate the risk of burdensome litigation by procuring insurance, passing the expected costs on to
consumers, or, if the risks are too great, severing its connection with the State."
Ibid.
To illustrate the point, the Court contrasted the foreseeability of litigation in a State to which a consumer fortuitously
transports a defendant's product (insufficient contacts) with the foreseeability of litigation in a State where the
defendant's product was regularly sold (sufficient contacts). The Court stated:
"Hence, if the sale of a product of a manufacturer or distributor such as Audi or Volkswagen is not simply an isolated
occurrence, but arises from the efforts of the manufacturer or distributor to serve, directly or indirectly, the market for
its product in other States, it is not unreasonable to subject it to suit in one of those States if its allegedly defective
merchandise has there been the source of injury to its owner or to others. The forum State does not exceed its
powers under the Due Process Clause if it asserts personal jurisdiction over a corporation that delivers its products
into the stream of commerce with the expectation that they will be purchased
Page 480 U. S. 120
by consumers in the forum State."
Id. at 444 U. S. 297-298 (emphasis added). The Court concluded its illustration by referring to Gray v. American
Radiator & Standard Sanitary Corp., 22 Ill.2d 432, 176 N.E.2d 761 (1961), a well known stream-of-commerce case in
which the Illinois Supreme Court applied the theory to assert jurisdiction over a component parts manufacturer that
sold no components directly in Illinois, but did sell them to a manufacturer who incorporated them into a final product
that was sold in Illinois. 444 U.S. at 444 U. S. 297-298.
The Court in World-Wide Volkswagen thus took great care to distinguish
"between a case involving goods which reach a distant State through a chain of distribution and a case involving
goods which reach the same State because a consumer . . . took them there."
Id. at 444 U. S. 306-307 (BRENNAN, J., dissenting). [Footnote 3] The California Supreme Court took note of this
distinction, and correctly concluded that our holding in World-Wide Volkswagen preserved the stream-of-commerce
theory. See App. to Pet. for Cert. C-9, and n. 3, C-13-C-15; cf. Comment, Federalism, Due Process, and Minimum
Contacts: World-Wide Volkswagen Corp v. Woodson, 80 Colum.L.Rev. 1341, 1359-1361, and nn. 140-146 (1980).
Page 480 U. S. 121
In this case, the facts found by the California Supreme Court support its finding of minimum contacts. The court
found that,
"[a]lthough Asahi did not design or control the system of distribution that carried its valve assemblies into California,
Asahi was aware of the distribution system's operation, and it knew that it would benefit economically from the sale in
California of products incorporating its components."
App. to Pet. for Cert. C-11. [Footnote 4] Accordingly, I cannot join the determination in Part II-A that Asahi's regular
and extensive sales of component parts to a manufacturer it knew was making regular sales of the final product in
California is insufficient to establish minimum contacts with California.
[Footnote 1]
See, e.g., Bean Dredging Corp. v. Dredge Technology Corp., 744 F.2d 1081 (CA5 1984); Hedrick v. Daiko Shoji Co.,
715 F.2d 1355 (CA9 1983); Nelson v. Park Industries, Inc., 717 F.2d 1120, 1126 (CA7 1983), cert. denied, 465 U.S.
1024 (1984); Stabilisierungsfonds fur Wein v. Kaiser Stuhl Wine Distributors Pty. Ltd., 207 U.S.App.D.C. 375, 378, 647
F.2d 200, 203 (1981); Poyner v. Erma Werke Gmbh, 618 F.2d 1186, 1190-1191 (CA6), cert. denied, 449 U.S. 841
(1980); cf. Fidelity & Casualty Co. of New York v. Philadelphia Resins Corp., 766 F.2d 440 (CA10 1985) (endorsing
stream-of-commerce theory, but finding it inapplicable in instant case), cert. denied, 474 U.S. 1082 (1986);
Montalbano v. Easco Hand Tools, Inc., 766 F.2d 737 (CA2 1985) (noting potential applicability of stream-of-commerce
theory, but remanding for further factual findings). See generally Currie, The Growth of the Long-Arm: Eight Years of
Extended Jurisdiction in Illinois, 1963 U.Ill.Law Forum 533, 546-560 (approving and tracing development of the
stream-of-commerce theory); C. Wright & A. Miller, Federal Practice and Procedure 1069, pp. 259-261 (1969)
(recommending in effect a stream-of-commerce approach); Von Mehren & Trautman, Jurisdiction to Adjudicate: A
Suggested Analysis, 79 Harv.L.Rev. 1121, 1168-1172 (1966) (same).
[Footnote 2]
The Court of Appeals for the Eighth Circuit appears to be the only Court of Appeals to have expressly adopted a
narrow construction of the stream-of-commerce theory analogous to the one articulated in Part II-A today, although
the Court of Appeals for the Eleventh Circuit has implicitly adopted it. See Humble v. Toyota Motor Co., Ltd., 727 F.2d
709 (CA8 1984); Banton Industries, Inc. v. Dimatic Die & Tool Co., 801 F.2d 1283 (CA11 1986). Two other Courts of
Appeals have found the theory inapplicable when only a single sale occurred in the forum State, but do not appear
committed to the interpretation of the theory that the Court adopts today. E.g., Chung v. NANA Development Corp.,
783 F.2d 1124 (CA4), cert. denied, 479 U.S. 948 (1986); Dalmau Rodriguez v. Hughes Aircraft Co., 781 F.2d 9 (CA1
1986). Similarly, the Court of Appeals for the Third Circuit has not interpreted the theory as JUSTICE O'CONNOR's
opinion has, but has rejected stream-of-commerce arguments for jurisdiction when the relationship between the
distributor and the defendant "remains in dispute" and "evidence indicating that [defendant] could anticipate either
use of its product or litigation in [the forum State] is totally lacking," Max Daetwyler Corp. v. R. Meyer, 762 F.2d 290,
298, 300, n. 13, cert. denied, 474 U.S. 980 (1985), and when the defendant's product was not sold in the forum State
and the defendant "did not take advantage of an indirect marketing scheme," DeJames v. Magnificence Carriers, Inc.,
654 F.2d 280, 285, cert. denied, 454 U.S. 1085 (1981).

[Footnote 3]
In dissent, I argued that the distinction was without constitutional significance, because, in my view, the foreseeability
that a customer would use a product in a distant State was a sufficient basis for jurisdiction. 444 U.S. at 444 U. S.
306-307, and nn. 11, 12. See also id. at 444 U. S. 315 (MARSHALL, J., dissenting) ("I cannot agree that jurisdiction is
necessarily lacking if the product enters the State not through the channels of distribution, but in the course of its
intended use by the consumer"); id. at 444 U. S. 318-319 (BLACKMUN, J., dissenting) ("[F]oreseeable use in another
State seems to me little different from foreseeable resale in another State"). But I do not read the decision in WorldWide Volkswagen to establish a per se rule against the exercise of jurisdiction where the contacts arise from a
consumer's use of the product in a given State, but only a rule against jurisdiction in cases involving "one isolated
occurrence [of consumer use, amounting to] . . . the fortuitous circumstance. . . ." Id. at 444 U. S. 295. See Hedrick
v. Daiko Shoji Co., 715 F.2d at 1358-1359.
[Footnote 4]
Moreover, the Court found that "at least 18 percent of the tubes sold in a particular California motorcycle supply shop
contained Asahi valve assemblies," App. to Pet. for Cert. C-11, n. 5, and that Asahi had an ongoing business
relationship with Cheng Shin involving average annual sales of hundreds of thousands of valve assemblies, id. at C-2.
JUSTICE STEVENS, with whom JUSTICE WHITE and JUSTICE BLACKMUN join, concurring in part and concurring in
the judgment.
The judgment of the Supreme Court of California should be reversed for the reasons stated in Part II-B of the Court's
opinion. While I join Parts I and II-B, I do not join Part II-A for two reasons. First, it is not necessary to the Court's
decision. An examination of minimum contacts is not always necessary to determine whether a state court's assertion
of personal jurisdiction is constitutional. See Burger King Corp. v. Rudzewicz, 471 U. S. 462, 471 U. S. 476-478
(1985). Part II-B establishes, after considering the factors set forth in World-Wide Volkswagen Corp. v. Woodson, 444
U. S. 286, 444 U. S. 292 (1980), that California's exercise of jurisdiction over Asahi in this case would be
"unreasonable and unfair." Ante at 480 U. S. 116. This finding alone requires reversal; this case fits within the rule
that
"minimum requirements inherent in the concept of 'fair play and substantial justice' may defeat
Page 480 U. S. 122
the reasonableness of jurisdiction even if the defendant has purposefully engaged in forum activities."
Burger King, 471 U.S. at 471 U. S. 477-478 (quoting International Shoe Co. v. Washington, 326 U. S. 310, 326 U. S.
320 (1945)). Accordingly, I see no reason in this case for the plurality to articulate "purposeful direction" or any other
test as the nexus between an act of a defendant and the forum State that is necessary to establish minimum
contacts.
Second, even assuming that the test ought to be formulated here, Part II-A misapplies it to the facts of this case. The
plurality seems to assume that an unwavering line can be drawn between "mere awareness" that a component will
find its way into the forum State and "purposeful availment" of the forum's market. Ante at 480 U. S. 112. Over the
course of its dealings with Cheng Shin, Asahi has arguably engaged in a higher quantum of conduct than "[t]he
placement of a product into the stream of commerce, without more. . . ." Ibid. Whether or not this conduct rises to
the level of purposeful availment requires a constitutional determination that is affected by the volume, the value, and
the hazardous character of the components. In most circumstances I would be inclined to conclude that a regular
course of dealing that results in deliveries of over 100,000 units annually over a period of several years would
constitute "purposeful availment," even though the item delivered to the forum State was a standard product
marketed throughout the world.
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RUSH v. SAVCHUK
Rush v. Savchuk - 444 U.S. 320 (1980)
Syllabus
Case
U.S. Supreme Court
Rush v. Savchuk, 444 U.S. 320 (1980)
Rush v. Savchuk
No. 78-952
Argued October 3, 1979
Decided January 21, 1980
444 U.S. 320
Syllabus
While a resident of Indiana, appellee was injured in an accident in Indiana while riding as a passenger in a car driven
by appellant Rush, also an Indiana resident. After moving to Minnesota, appellee commenced this action against Rush
in a Minnesota state court, alleging negligence and seeking damages. As Rush had no contacts with Minnesota that
would support in personam jurisdiction, appellee attempted to obtain quasi in rem jurisdiction by garnishing the
contractual obligation of State Farm Mutual Automobile Insurance Co. (State Farm) to defend and indemnify Rush in
connection with such a suit. State Farm, which does business in Minnesota, had insured the car, owned by Rush's
father, under a liability insurance policy issued in Indiana. Rush was personally served in Indiana, and after State
Farm's response to the garnishment summons asserted that it owed the defendant nothing, appellee moved the trial
court for permission to file a supplemental complaint making the garnishee, State Farm, a party to the action. Rush
and State Farm moved to dismiss the complaint for lack of jurisdiction over the defendant. The trial court denied the
motion to dismiss and granted the motion for leave to file the supplemental complaint. The Minnesota Supreme Court
affirmed, ultimately holding that the assertion of quasi in rem jurisdiction under the Minnesota garnishment statute
complied with the due process standards enunciated in Shaffer v. Heitner, 433 U. S. 186.
Held: A State may not constitutionally exercise quasi in rem jurisdiction over a defendant who has no forum contacts
by attaching the contractual obligation of an insurer licensed to do business in the State to defend and indemnify him
in connection with the suit. Pp. 444 U. S. 327-333.
(a) A State may exercise jurisdiction over an absent defendant only if the defendant has certain minimum contacts
with the forum such that the maintenance of the suit does not offend traditional notions of fair play and substantial
justice. International Shoe Co. v. Washington, 326 U. S. 310. In determining whether a particular exercise of state
court jurisdiction is consistent with due process, the inquiry must focus on "the relationship among the defendant, the
forum, and the litigation." Shaffer v. Heitner, supra at 433 U. S. 204. P. 327.
(b) Here, the only affiliating circumstance offered to show a relationship among Rush, Minnesota, and this lawsuit is
that Rush's insurance
Page 444 U. S. 321
company does business in the State. However, the fictional presence in Minnesota of State Farm's policy obligation to
defend and indemnify Rush -- derived from combining the legal fiction that assigns a situs to a debt, for garnishment
purposes, wherever the debtor is found with the legal fiction that a corporation is "present," for jurisdictional
purposes, wherever it does business -- cannot be deemed to give the State the power to determine Rush's liability for
the out-of-state accident. The mere presence of property in a State does not establish a sufficient relationship
between the owner of the property and the State to support the exercise of jurisdiction over an unrelated cause of
action, and it cannot be said that the defendant engaged in any purposeful activity related to the forum that would
make the exercise of jurisdiction fair, just, or reasonable merely because his insurer does business there. Nor does
the policy provide significant contacts between the litigation and the forum, for the policy obligations pertain only to
the conduct, not the substance, of the litigation. Pp. 444 U. S. 327-330.
(c) Moreover, the requisite minimum contacts with the forum cannot be established under an alternative approach
attributing the insurer's forum contacts to the defendant by treating the attachment procedure as the functional
equivalent of a direct action against the insurer, and considering the insured a "nominal defendant" in order to obtain
jurisdiction over the insurer. The State's ability to exert its power over the "nominal defendant" is analytically
prerequisite to the insurer's entry into the case as a garnishee, and if the Constitution forbids the assertion of
jurisdiction over the insured based on the policy, then there is no conceptual basis for bringing the "garnishee" into
the action. Nor may the Minnesota court attribute State Farm's contacts to Rush by considering the "defending
parties" together and aggregating their forum contacts in determining whether it has jurisdiction. The parties'
relationships with each other may be significant in evaluating their ties to the forum, but the requirements of
International Shoe must be met as to each defendant over whom a state court exercises jurisdiction. Pp. 444 U. S.
330-332.
272 N.W.2d 888, reversed.

MARSHALL, J., delivered the opinion of the Court, in which BURGER, C.J., and STEWART, WHITE, BLACKMUN,
POWELL, and REHNQUIST, JJ., joined. BRENNAN, J., ante p. 444 U. S. 299, and STEVENS, J., post, p. 444 U. S. 333,
filed dissenting opinions.
Page 444 U. S. 322
Official Supreme Court caselaw is only found in the print version of the United States Reports. Justia caselaw is
provided for general informational purposes only, and may not reflect current legal developments, verdicts or
settlements. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information
contained on this site or information linked to from this site. Please check official sources