Document: 339 U.S. 643 70 S.Ct. 927 94 L.Ed. 1154 TRAVELERS HEALTH ASS'N et al.v.COMMONWEALTH OF VIRGINIA ex rel. STATE CORPORATION COMMISSION. No. 76. Reargued April 17, 1950. Decided June 5, Mr. Moses G. Hubbard, Jr., Utica, N.Y., for appellants. Walter E. Rogers, Richmond, Va., appellee. Justice BLACK delivered the opinion of Court. 1 In an effort to protect its citizens from 'unfairness, imposition and fraud' in sales certificates insurance other forms securities, Virginia 'Blue Sky Law' requires those selling or offering such securities obtain a permit State Corporation Commission.1 Applicants permits must meet comprehensive conditions: they must, example, provide detailed information concerning their solvency, agree that suits can be filed against them by service process on Secretary Commonweath.2 2 While violation Act is misdemeanor punishable criminal sanctions, § 6 provides another method enforcement. After notice hearing 'on merits', Commission authorized issue cease desist order restraining violations Act. The section also registered mail where types are unavailable 'because advertisement and/or solicitation through periodicals, mail, telephone, telegraph, radio, means communication beyond limits * *.' highest court rejected contentions this violates constitutional requirements due process, case properly here appeal under 28 U.S.C. 1257(2), U.S.C.A. 1257(2). 3 proceedings were instituted Travelers Health Association R. Pratt, as treasurer his personal capacity. Having received only, appeared 'specially' 'the sole purpose objecting alleged jurisdiction Commonwealth Commission, moving set aside quash summons. *' agreed stipulation facts certain exhibits offered state summarized follows: 4 appellant was incorporated Nebraska nonprofit membership association 1904. Since time only office has been located Omaha, which it conducted mail-order health business. New members pay initiation fee obligate themselves periodic assessments at Omaha office. funds so collected used operating expenses sick benefits members. no paid agents; new usually obtained unpaid activities already members, who encouraged recommend friends submit names home Pratt mails solicitations these prospects. He encloses blank applications which, if signed returned with required fee, result election applicants Certificates then mailed, subject return within 10 days 'if not satisfactory.' solicited manner since 1904, caused many benefit claims investigated. When instituted, had approximately 800 5 holding foregoing supported state's power act proceedings, overruled appellants' objection motion service. ordered further residents 'through medium any without state, otherwise, intra- inter-state communication, unless until' authority accordance Law.' This affirmed Court Appeals. 188 Va. 877, 882, 51 S.E.2d 263, 271. Appellants do question validity law 'to extent individual corporate states shall come into doing business there first submitting regulatory State.' As see, e.g., Hall v. Geiger-Jones Co., 242 539, 37 217, 61 480, L.R.A.1917F, 514, Ann.Cas.1917C, 643. Their basic contention all take place Nebraska, consequently reach enforce part law. We cannot general objection, we think 'cease order' enforcing least provision requiring accept claimants Commonwealth. 7 Appellants' chief reliance Minnesota Commercial Men's Ass'n Benn, 261 140, 43 293, 294, 67 573. There Montana same get issued reserved right investigate claims, although pointed out Benn's claim held contracts 'executed performed' Minnesota, 'doing business' therefore could sued courts 'consent' implied. found circumstances transactions took insufficient support implication. 8 But one create continuing relationships obligations need resort fictional sustain agencies latter state. And considering what constitutes sufficiently justify regulation effects 'business' felt, narrow grounds relied Benn deemed controlling. 9 Osborn Ozlin, 310 53, 62, 60 758, 761, 84 1074, recognized legitimate interest policies protecting risks, even though 'state action may have repercussions lines Hoopeston Canning Co. Cullen, 318 313, 316, 63 602, 604, 605, 87 777, 145 A.L.R. 1113, contention, based among others, regulate determined 'conceptualistic discussion theories contracting performance.' Instead accorded 'great weight' 'consequences' contractual insured resided 'degree interest' seeing faithfully carried out. International Shoe Washington, 326 310, 66 154, 158, 90 95, 161 1057, Court, after reviewing past cases, concluded: 'due defendant judgment personam, he present territory forum, minimum contacts maintenance suit does offend 'traditional notions fair play substantial justice." Measured principles Osborn, ties appellants residents, together faithful observance certificate obligations, subjecting 6. did engage mere isolated short-lived transactions. Its certificates, systematically widely following recommendations Virginians, between each holders losses investigated available seeking created group certificates. See supra, page 320, 160, 1057. 11 Moreover, require Commonwealth, forum injured might Nebraska. seldom large policy afford expense trouble suit. addition, more conveniently tried witnesses would most likely live presumably Such factors given great weight applying doctrine non conveniens. Gulf Oil Corp. Gilbert, 330 501, 508, 839, 843, 91 1055. prior decisions referred unwisdom, unfairness injustice permitting seek redress some distant insurer incorporated.3 Due Process Clause forbid injustice. 12 is, course, recover aid substituted process: garnished Association. Huron Holding Lincoln Mine Operating 312 183, 193, 513, 517, 85 725. indirect procedure undeniably troublesome than plan adopted Law,' clearly harassing Metaphysical concepts 'implied consent' 'presence' should solidified barrier Virginia's simple, direct 13 hold subjection proceeding consistent 'fair justice,' offensive Clause. 14 contend applied because attempts 'destroy impair' make residents. Insofar raised special appearance merely contest jurisdiction, essentially discussed above. For reasons just given, provisions designed accomplish 'can attacked affect outside state.' pages 320—321, 606, 607, 1113. 1074. These two opinions clear Allgeyer Louisiana, 165 578, 17 427, 41 832, different result. 15 concede cases sustained laws providing protective standards states, compliance companies similar out-of-state contracts. It argued, however, distinguishable both involved 'licensed actually while done York old law, brought challenge licensing comply future. Thus kind relief here, purpose. What said York's equally applicable here. 16 suggested requirements. answers insofar alleges lack served Virginia. If challenged adequate reasonable notice, answered Mullane Central Hanover Bank, 306, 652. questions errors brief,4 process. occasion discuss scope Commission's order, methods attempt it.5 Affirmed. 18 19 DOUGLAS, concurring. 20 formula dispose case, I joined opinion. feel type problem presented selective treatment. Hence my separate 21 Blue Law1 scheme protection investors. Securities sale issuer obtains permit.2 To it, applicant supply about earning record, nature securities.3 Promoters bond.4 appoint agent, receive process.5 Only proof good character financial responsibility security salesmen licensed.6 issuance, again eye possible revocation permit.7 high points seeks apply 22 That interstate commerce established United States South-Eastern Underwriters Ass'n, 322 533, 64 1162, 88 1440. Any doubts exclude company refuses dispelled passage McCarran 59 Stat. 33, §§ 1011—1015, 1011—1015. Robertson People California, 328 440, 461, 462, 1160, 1171, 1172, 1366. 23 not, opinion, preclude extension appellant. put side policyholder sue His ability necessarily measure regulate, Old Wayne Mut. Life Indianapolis, Indiana McDonough, 204 8, 21, 27 236, 240, 345. determines degree activity necessary satisfying tax maintain creditor, see surpa; Provident Savings Society Kentucky, 239 103, 114 116, 36 34, 37, 38, 167; Issacs, An Analysis Doing Business, 25 Col.L.Rev. 1018, 1024, view determinative when borders. 24 Laws well-recognized exercise police states. 552, 221, wiles salesman many; devices avoid clever calculated. One contested constitutionality Michigan Law Merrick N. W. Halsey & 568, 573, 227, 229, 498, sending agents it. history various evade too recent extended comment. Instrumentalities foreign extensively employed sell citizens. H.R.Rep.No.85, 73d Cong., 1st Sess. 10. 1933, 48 74, 77a seq., passed fill gap.8 A helpless operates borders, establishes agents, salesmen, solicitors Then formal arrangement. actual arrangement shows soliciting active, continuous, methodical regular employed. Cf. 26 Practically originates recommendation member relieves duty furnishing reference. Though designated 'agents,' 'clearly appears,' stated Supreme Appeals, 'that relies almost excusively bring expansion business.' Virginia, 887, 267. device unconventional unorthodox; but functionally precisely formally agents. Through people realistically entered looking obtaining Whether regulate. Hooper 155 648, 658, 207, 211, 39 297. demand less9 minimal depending pinch decision corporation. Office Unemployment Compensation Placement, 316—319, 159, Where project entails use business, violence traditional concept allow measures governing solicitation. premature. placed injunction appellants, numerous consequences, contempt proceedings. existing controversy—real vital MINTON, whom JACKSON joins, dissenting. 29 leading instant Law. Michie's Va.Code 1942, 3848(52). upon persons corporations communication. hearing, give publicity considers desirable. 30 taken statute fine, fine failure lawful Commission. Va.Code, 3848(61)(63). way attempted Therefore hurt, reached. statute, appears sanction know reason why go shadow-boxing performance publicize notify qualified says proceeding—a reiterated brief opinion: 31 'Respondents rely fact doinb enter either personally setting up defense lose sight action. They charged advertising promoting foreclose activities. will suffice stop beside point. pertinent opportunity heard determine facts, and, if, issued, sees fit 'information public." 32 'No word inference derived Section 6, aforesaid, properly, our judgment, impose penalties respondents. 33 'There element compulsion except flow dread attending order. weapon publicly advise respondent bear stamp approval being public regard enacted them. imposes penalties, exacts toll orders proceed. 34 aspect. far appears, statutes nonresident opened conducting State. 3848(55)a. Up date claimed agent nor rendered made manner. understand, therefore, application Court's reference case. answer consequences entitle person Parker Los Angeles County, 338 327, 161. would, dismiss appeal. 35 stated, seems me majority saying proceeding. State, read intimate letter further. validly compel designate constitutionally considered automatically accomplishing personam corporation natural person, neither ever Pennoyer Neff, 95 714, 565; Mutual Ind. 22—23, 241, directly, indirectly. Certainly justified legal non-residents compelled thereafter effected serving Secretary. So pull itself own bootstraps. Service sufficient 'minimum contacts' forum. How 'contacts' before subjected informed. Here mail. No wholly Under circumstances, never 'present' 'For terms symbolize corporation's deem satisfy demands process.' 316—317, 38 understand 'activities made, addition letter, seem indispensable fortiori proposition dealing transaction citizens, bar concerned how has. sufficiency officer whether power, whether, having acquired power. 40 instruct intruders believe judgments obtained, simple whose brought, REED FRANKFURTER, agreeing reaching merits, merits join dissent. Acts General Assembly 1928, c. 529, p. 1373, amended, 1932, 434, 1942 Code 3848(47) seq. Michie 3848(51), (55). Pennsylvania Lumbermen's Fire Ins. Meyer, 197 407, 418, 419, 483, 486, 497, 49 810; Connecticut Spratley, 172 619, 308, 314, 569; cf. 319, federal statement interpreted infringed control delegated Congress Art. I, 8(7) Constitution. submission include 'specifications upon' mention clause. examples problems punishment Strassheim Daily, 221 280, 284—285, 558, 560, 55 735; Hyatt Corkran, 691, 712, 719, 456, 459, 47 657. enforcement, stature attributed giving 'publicity press otherwise commission may, discretion, advisable public.' 3848(47). 3848(51). 3848(51)(r). 3848(55). 3848(50)(m). 3848(53). By 3(a)(8) supervision specified exempt regulation. agency over person. Rutledge Frene Louisville Cement 77 U.S.App.D.C. 129, 134 F.2d 511, 516, 146 926, '* casual single acts borders sovereignty confer acquire provided requirements.'

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