METROPOLITAN LIFE INSURANCE CO. V. WARD
470 U.S. 869 (1985)
NATURE OF THE CASE: This was an appeal from an administrative court, concerning the constitutional validity of a state insurance law that seems to discriminate against foreign insurance businesses in prohibition of both the Equal Protection Clause and Commerce Clauses.
FACTS: Under an Alabama law, all out-of-state life insurance companies doing business are assessed a 3% tax on gross premiums earned, and a 4% tax on non-life insurance profits. In contrast, all Alabama insurance companies are assessed a 1% tax no matter the insurance type. The state asserted that the tax served two purposes: to 'encourage foreign business to form new insurance companies in Alabama and to encourage capital investment by foreign insurance companies in Alabama.' However, the foreign insurance companies maintained that the law violated the Equal Protection Clause of the Fourteenth Amendment. An Administrative Court upheld the statute. The Appeals Court affirmed. The Alabama State Supreme Court denied review. The U.S. Supreme Court reversed.
ISSUE:
RULE OF LAW:
HOLDING AND
DECISION:
LEGAL ANALYSIS:
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