International Milling Co. v. Columbia Transportation Co.

Background

A Minnesota-based grain dealer (a Delaware corporation with its main office in Minneapolis) sued a Great Lakes shipping company (also a Delaware corporation headquartered in Cleveland) after grain it shipped in 1930 was negligently handled and damaged. The carrier’s successor had vessels operating on the Great Lakes. In July 1932, one of the carrier’s ships was seized at Duluth under a local writ of attachment sued out by the grain dealer; the carrier filed a $40,000 bond and then asked the court to vacate the attachment and summons, arguing that a Minnesota suit would unreasonably burden interstate commerce.

Reasoning

The key question was whether allowing the Minnesota suit would place an unreasonable burden on interstate trade. The Court compared prior cases where carriers were only soliciting business in a forum and thus immune from suit, but found different facts here. The grain dealer sued where it lived and where the carrier regularly brought vessels, used local agents at Duluth to load and unload cargoes, and subjected the ship to attachment in the ordinary course of business. For those reasons the Court concluded the local attachment and suit were not oppressive or unreasonable and therefore Minnesota courts could hear the case.

Real world impact

The ruling means that when a shipping company regularly operates in local waters and uses local agents, it can be sued in that state after its vessel is attached there. The decision reverses the Minnesota court and sends the case back for further proceedings on the merits; it resolves only whether the local courts may hear the suit, not the final outcome of the damage claim.