McGee v. International Life
355 U.S. 220 (1957)
- McGee, a California citizen, purchased insurance from an International, which was an Arizona-based company.
- International had actually reached out and solicited the business from McGee (they sent him some advertising or something).
- International was bought out by a Texas company. McGee began sending premiums to Texas and then he died.
- International refused to pay the death benefits. McGee’s beneficiaries sued International in California.
- International argued that they only ever had one policy in California, and therefore did not participate in continuous and systematic activity in California. Therefore the California Court did not have jurisdiction.
- The US Supreme Court found that International Life could be sued in California.
- The US Supreme Court found that even one policy was sufficient to establish a substantial connection.
- Compare this case to the similar Hanson v. Denckla (357 U.S. 235 (1958)). The US Supreme Court distinguished that case by saying that International actually went to McGee in California and solicited business there, while in Hanson, the company (which was in Delaware), didn’t solicit interstate business, the customer had come to them. It was the interstate solicitation that was the important factor in deciding whether there was a substantial connection or not.
- Basically, if you are a company and you cross State lines to get some business, you are giving that State jurisdiction over you. But if a customer comes into your State and asks for your product, you are less likely to have a court in the customer’s State find they have jurisdiction over you.