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Metropolitan Life Insurance Co. v. Ward

470 U.S. 869, 105 S.Ct. 1676, 84 L.Ed.2d 751 (1985)

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Metropolitan Life Insurance Co. v. Ward

United States Supreme Court

470 U.S. 869, 105 S.Ct. 1676, 84 L.Ed.2d 751 (1985)

Facts

An Alabama law taxed out-of-state insurance companies at higher rates than Alabama insurance companies. Metropolitan Life Insurance Co. and other out-of-state insurance companies (plaintiffs) brought suit, claiming that the law violated the Equal Protection Clause of the United States Constitution. The trial court found the law constitutional, ruling that it served two legitimate purposes: encouraging the formation of new insurance companies in Alabama and encouraging out-of-state insurance companies to invest in Alabama assets and securities. The court further held that the tax distinction between in-state and out-of-state companies was rationally related to those purposes. The plaintiffs appealed with regards to the legitimacy of the two purposes.

Rule of Law

Issue

Holding and Reasoning (Powell, J.)

Dissent (O’Connor, J.)

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