and from which they are transmitted to the main plant in State A. Manifestly, under such circumstances, such a concern would be said to be doing business in State B, as well as in State A, and, therefore, to be subject to service of process in State B, and to jurisdiction over its person in the local courts.
An entirely different situation is presented on those many occasions in which a newspaper temporarily sends one or more representatives to a particular locality in order to observe and report a local event or a series of occurrences and then withdraws its personnel and maintains no permanent office within the jurisdiction. In such an instance it may well be said that the newspaper does not do business in that State, and that it would be unfair and unjust to subject its publisher to suit within that jurisdiction.
One may well wonder whether the defendant would contend if there were a dispute between it and one of its Washington employees over salaries or expenses, or a controversy with one of its local suppliers over a payment for office supplies, that the employee or supplier claimed to be aggrieved would have to go to Philadelphia to bring suit, and would not be in a position to do so in the District of Columbia. The fact that the present action is a suit for libel brought by a resident of the Washington Metropolitan area, does not lead to the invocation of a different principle. So, too, no reason is discernible for applying a different doctrine to a newspaper publisher than that which governs the transactions of persons and concerns engaged in other lines of endeavor.
Counsel for the defendant presented no argument based on principle or reasoning, but relied solely on two decisions of the Court of Appeals for this Circuit. The first is Neely v. Philadelphia Inquirer Co., 61 App.D.C. 334, 62 F.2d 873, decided in 1932, in which it was held that the publisher of the "Philadelphia Inquirer" was not doing business in the District of Columbia. It had one Washington correspondent for the gathering of news, who occupied two rooms in an office building in this City. The second case is Layne v. Tribune Co., 63 App.D.C. 213, 71 F.2d 223, cert. den. 293 U.S. 572, 55 S. Ct. 83, 79 L. Ed. 670, in which it was held that "The Chicago Tribune" was not doing business in the District of Columbia. The Court relied on its prior decision in the Neely case. In neither of these cases was there any evidence, so far as the opinion indicates, as to the amount of money expended by the newspaper in the District of Columbia. In the instant case the expenditures are substantial as indicated above.
A study and an analysis of the developments in this field subsequently to these two decisions, leads this Court to the conclusion that the Neely and Layne cases no longer represent the law and must be deemed to have been overruled sub silentio. The changes in the principle as to what constitutes doing business within a State on the part of a foreign corporation, and the adoption of a much more liberal doctrine than that which had formed the basis for the Neely and Layne decisions, was inaugurated by the opinion of Mr. Chief Justice Stone in International Shoe Co. v. State of Washington, 326 U.S. 310, 66 S. Ct. 154, 90 L. Ed. 95, which was decided on December 3, 1945, - eleven years subsequently to the decision of the Court of Appeals in the Layne case. The International Shoe Company was a Delaware corporation engaged in the manufacture and sale of shoes and having its principal place of business in St. Louis, Missouri. It maintained establishments in several States, but none in the State of Washington. It did not have any office and did not keep any stock of merchandise in that State. It employed a number of salesmen in the State of Washington, who were under the direct supervision of the St. Louis office. These salesmen resided in Washington, and were compensated by commissions based on the amount of their sales. The corporation supplied them with a line of samples, each consisting of one shoe of a pair. On occasion they rented rooms for exhibiting samples. The Supreme Court of the State of Washington found that the corporation was doing business within that State. The decision was affirmed by the Supreme Court of the United States, which held that there was no violation of due process of law in ruling that the activities of the company constituted doing business within the State. On that aspect of the controversy Mr. Chief Justice Stone wrote that it was sufficient if the defendant had certain minimum contacts within the State, such "that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice'," (p. 316, 66 S. Ct. p. 158). Mr. Justice Black wrote a concurring opinion. There were no dissents.
In Perkins v. Benguet Consol. Mining Co., 342 U.S. 437, 447, 72 S. Ct. 413, 96 L. Ed. 485, in which Mr. Justice Burton wrote the opinion, the defendant corporation was organized under the laws of the Philippine Islands and owned mining property there. Its operations were halted during World War II because of the occupation of the Islands by the Japanese. In the interim the President of the Company returned to his home in Ohio and maintained an office where he conducted both his personal affairs and also did many things in behalf of the Company, such as carrying on its correspondence, keeping its office files, and the like. The Supreme Court of Ohio held that the due process clause of the Fourteenth Amendment prohibited the Ohio courts from exercising jurisdiction over the corporation. The Supreme Court of the United States reversed the judgment of the State court. Mr. Justice Burton stated (p. 444, 72 S. Ct. p. 418) that the conception relating to the service of process on foreign corporations had been modified in recent decisions and particularly in International Shoe Company v. State of Washington, supra. His opinion continued:
"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."
In McGee v. International Life Ins. Co., 355 U.S. 220, 78 S. Ct. 199, 2 L. Ed. 2d 223, in which Mr. Justice Black wrote the opinion for a unanimous bench, a resident of California bought a life insurance policy from an Arizona insurance company, whose principal place of business was in Texas. It maintained no office and had no agents in California. The transaction was handled entirely by mail. The beneficiary of the policy brought suit against the insurance company in a California court. Process was served by substituted service, specifically by registered mail, directed to the defendant's principal place of business in Texas. The plaintiff recovered judgment. Unable to collect it in California, the plaintiff brought suit on the judgment in a Texas court. The Texas courts refused to enforce the judgment, holding that it was void under the Fourteenth Amendment. The Supreme Court held on certiorari that the California court had properly exercised jurisdiction over the insurance company and that, therefore, the Texas courts erred in refusing to give the judgment full faith and credit. The Supreme Court indicated that a foreign corporation may be subjected to a judgment in personam if it has certain minimum contacts with the State, such that the maintenance of the suit does not offend "traditional notions of fair play and substantial justice" (p. 222, 78 S. Ct. p. 201). The opinion contains the following significant observations:
"Looking back over this long history of litigation a trend is clearly discernible toward expanding the permissible scope of state jurisdiction over foreign corporations and other nonresidents. 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", (pp. 222-223, 78 S. Ct. p. 201).