Modern Reforms of Personal Jurisdiction

3. CASEBOOK: 80-91 (International Shoe; McGee; Hanson).

4. CASEBOOK: 91-102 (Shaffer).
Read Rule 12 carefully for Monday

Redefining Constitutional Power

A state always has personal jurisdiction over a person, or entity, this is domiciled in the
state

International Shoe Co. v. Washington, p.81

326 U.S. 310 (1945)

Facts
International Shoe was a Delaware company, with headquarters in St. Louis, that did business
through several commission-based salesmen who lived and worked in Washington.
State of Washington sued ISCo to get contributions to a state fund that was required of all
employers to contribute.
WA personally served notice to one of the salesman and mailed notice to headquarters in St.
Louis.
Procedural History

Issue
Whether or not WA has personal jurisdiction over ISCo
Whether the processes followed violated the Fourteenth Amendment
Rule
From this case, rule becomes: State may, in certain circumstances, exercise personal jurisdiction
over corporations operating within their state, even if not headquartered or incorporated in that
state
Analysis
“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.”
ISCo had conducted business in WA regularly for many years
The appellant received benefits of the state, including the right to use the courts of that state,
therefore

Conclusion

Notes and Problems

International Shoe changed jurisdiction inquiry from “Is he there?” to “Is it fair?”
1) Next
a. WA would not have jurisdiction in this case, because the injury happened in MO.
WA only has person jurisdiction to the extent of operations that ISCo conducts in
WA.
2) Next

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 a. Would the Wyoming court have jurisdiction over ISCo?
i. Yes, it would have jurisdiction to the extent that ISCo conducted business
or operations there. Since it drove its trucks through there on a fairly
regular basis; the state would gain jurisdiction over at least the portion of
the company business that was conducted within its bounds.
b. Concerning the former employee, WY would have no jurisdiction over that case,
because the only ‘business’ ISCo conducts in WY is transport related. Everything
that happened with the former employee, the wrongful discharge, would have
occurred in another state, with no connection to WY. Therefore, she would need
to file in the state it occurred in, or had a connection with it.
c. No, because Missouri will always have personal jurisdiction over ISCo, because
that is where the corporation is domiciled.
3) “contact” will support jurisdiction, but only over claims related to that contact
4) Next
a. General jurisdiction: In some cases the defendant will have such substantial
contacts with the forum state to make it fair to assert jurisdiction even over claims
unrelated to those contacts.
b. Specific jurisdiction: minimum contacts analysis is important; typically,
corporations are going to be liable for things that relate to in-state activity

McGee v. International Life Insurance Co., p.89

355 U.S. 220 (1957)
State may hold jurisdiction over company, even if they have no location there, if they had done
business with a resident of the state (the business was conducted solely within the state of
California for this transaction, via mail)

Hanson v. Denckla, p.89

357 U.S. 235 (1958)
quasi in rem

Notes and Problems

1) Factual difference between two cases: In McGee, the business was conducted (through a
third party), exclusively with someone in CA. In Hanson, there was no real business
conducted by the woman while she was in FL.

Absorbing In Rem Jurisdiction

2
Shaffer v. Heitner, p.93
433 U.S. 186 (1977)

Facts
Derivative suit: shareholder steps forwards and sues the directors or officers in the name of the
corporation, alleging some breach of fiduciary duty
Greyhound Corp, was incorporated in DE; primary place of business was in Phoenix
Heitner files derivative suit in DE against present/former officers for breach of fiduciary duty
Greyhound had been involved in antitrust suit and was subject to a large fine
Antitrust suit proceedings took place in OR
Procedural History
DE courts reject
Rule
“Minimum contacts” standard as established in International Shoe
Standards of fairness and substantial justice

Analysis
Quasi in rem vs. In rem; in the first, the property is used as basis for jurisdiction, whereas in the
latter the property is the basis for the legal matter itself

Rationale for in rem jurisdiction: a wrongdoer should not be able to avoid payment of his
obligations by the expedient of removing his assets to a place where he is not subject to an in
personam suit.

The ownership of stock within this company does not meet the standards of minimum contact as
set forth in International shoe

Rules
“Minimum contacts” necessary to establish jurisdiction
Quasi in rem is subject to “minimum contacts” as well