Louis K. Liggett Co. v. Lee

A Florida anti-chain-store statute made it illegal for a person or entity to operate a retail store within the state without first obtaining a license. The statute imposed a $5.00 licensing fee upon a single retail store. If the same person or entity operated multiple stores, the statutory licensing fees for each store increased depending on the quantity of stores and their location. For example, if someone operated between 2 and 15 stores in the same county, the licensing fee for each of those stores was $10.00. If the same person or entity operated between 2 and 15 stores in different counties, the licensing fee for each store was $15.00. The per-store licensing fee increased by $5.00 for every 15 stores operated by the same person or entity. The statute also imposed a tax of $3.00 for every $1,000 in value of each store's inventory and merchandise. Louis K. Liggett Co. and other chain-store owners (plaintiffs) brought an action against state tax officials (defendants) seeking an injunction to prevent the enforcement of the statute. The owners claimed that the statute violated their due-process and equal-protection rights under the Fourteenth Amendment to the United States Constitution, the Commerce Clause of the United States Constitution, and various provisions of Florida's constitution. The owners argued that there was no difference between how chain stores and individually owned retail stores are operated and that the statute impermissibly imposed an arbitrary and unreasonable tax on one method of conducting business but not the other. The tax officials moved to dismiss the action, and the trial court granted the motion. The Florida Supreme Court affirmed, and the owners appealed to the United States Supreme Court.