In the case of American Motorists Insurance Co. v. Starnes, the U.S Supreme Court was asked to determine whether a state court could exercise jurisdiction over an out-of-state insurance company based on its contractual relationship with an in-state policyholder involved in a car accident within that state's borders. The plaintiff, Starnes, was injured by another driver who had liability coverage through American Motorists Insurance Company (AMIC), which did not have any offices or agents in his home state of Tennessee but provided nationwide coverage for its insureds' accidents anywhere in the United States. AMIC argued that it lacked sufficient contacts with Tennessee to be sued there under traditional principles of personal jurisdiction. The Supreme Court held that due process permitted such jurisdiction because AMIC had purposefully availed itself of conducting activities within Tennessee by insuring drivers who might cause accidents there and thus should reasonably anticipate being haled into court there if one such accident occurred and resulted in litigation against it or its insureds.

In the dissenting opinion for American Motorists Insurance Co. v. Starnes, it was argued that the majority's decision to uphold a Tennessee statute allowing direct action against insurers in certain circumstances violated due process rights of insurance companies under the Fourteenth Amendment. The dissent contended that this ruling allowed plaintiffs to sue an insurer directly without first obtaining judgment against the insured party, which fundamentally altered traditional principles of contract and tort law by creating liability where none existed before. They believed this could lead to unfair outcomes as insurers might be held liable even when their policyholders were not at fault or had valid defenses available to them. Furthermore, they expressed concern about potential jurisdictional issues arising from permitting suits in states where insurers do business but are not incorporated or headquartered.