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Federal Courts -
U. S. Supreme Court - June - December, 1945
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Guaranty Trust Co. v. York, No. 264,
SUPREME COURT OF THE UNITED STATES, June 18, 1945, Decided
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Overview: Petitioner trustee appealed reversal of a summary judgment that would have barred respondent noteholder's action for petitioner's breach of trust. The decision was reversed on grounds that a federal court sitting in diversity was not bound in equity by the state statute of limitations that barred the suit in the state court. The court noted that under the Erie Doctrine, in all cases where a federal court had jurisdiction solely because of diversity of citizenship, the outcome of the litigation in the federal court should be substantially the same, so far as legal rules determine the outcome of a litigation, as it would be if tried in a state court. The doctrine required the federal diversity court to follow state law, and if the statute of limitations under state law barred recovery in a state court, the federal court could not afford recovery. The court reiterated that the source of substantive rights enforced by a federal diversity court was state law, and that this law determined the outcome regardless of the forum or whether the remedy was in law or in equity.
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Int'l Shoe Co. v. Wash., No. 107,
SUPREME COURT OF THE UNITED STATES, December 3, 1945, Decided
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Overview: Appellee state sought to collect from appellant corporation a deficiency in the payment of contributions to the state unemployment compensation fund. Appellee personally served appellant's salesman with notice of the suit and mailed a copy of the notice to appellant's out-of-state headquarters. Holding that the systematic and continuous activities carried on in-state by appellant's salesmen made it reasonable and just to permit appellee to enforce the tax by suit against appellant in the forum, the court affirmed. The court held that in order to subject appellant to a judgment in personam, due process required only that appellant have certain minimum contacts with the forum state such that the maintenance of the suit did not offend traditional notions of fair play and substantial justice. The court also held that a corporation was deemed to have a "presence" in a state for jurisdictional purposes where its in-state activities had been continuous and systematic and gave rise to the liability sued on. The court held that the activity of appellant's salesmen was not only substantial, but also gave rise to the obligation to contribute to the unemployment compensation fund.
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