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Dioxina, um composto altamente tóxico, é potencialmente bioacumulável no meio ambiente e é de difícil degradação. Causam um amplo espectro de efeitos toxicológicos e bioquímicos em mamíferos, incluindo câncer, disfunção imune, anormalidades reprodutivas e teratogênese. O presente trabalho tem por objetivo levantar informações científicas através de revisão bibliográfica referentes à liberação de dioxinas na atmosfera em decorrência de processos térmicos de fontes difusas e relacionar os efeitos dessa queima a problemas de saúde. Dos dispersores mais comuns de dioxinas, as fontes difusas, tais como a queima de lixo doméstico a céu aberto, escapamentos de veículos motorizados, queima de lixo doméstico e de outros tipos para aquecimento e culinária, incêndios acidentais estruturais, são as mais preocupantes, pois suas emissões não são mensuradas nem monitoradas adequadamente. Tendo em vista os efeitos danosos decorrentes da emissão de dioxina no ambiente, espera-se que este estudo sirva de alerta aos efeitos da queima com emissão desse composto, bem como, permita a reflexão sobre a urgente necessidade de adoção de sistemas de controle e fiscalização da emissão de dioxina.
Palavras-chaves: dioxinas; fontes; processos térmicos; saúde; revisão.
Dioxin, a highly toxic compound, is potentially bioaccumulative in the environment and of difficult degradation. It has a broad range of toxicological and biochemical effects in mammals, including cancer, immune malfunctions, reproductive abnormalities and teratogenesis. The present work seeks to gather scientific information through review of the literature concerning the release of dioxins in the atmosphere as a result of thermal processes from diffuse sources and to relate the effects of this burning to health problems. Among the most common sources of dioxins emissions, the diffuse sources, such as open air domestic waste burning, motor vehicles exhausts, burning of domestic waste and others for heating and cooking, structural accidental fires, are the most worrisome, because their emissions are not measured nor properly monitored. Considering the harmful effects resulting from dioxin emissions in the environment, it is expected that this study will serve as a warning against those effects, and also allow the reflection on the urgent need for the adoption of systems of control and inspection of dioxin emission.
Keywords: dioxins; sources; thermal processes; health; revision.
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If Congress has specifically authorized states to regulate in a certain area, a law that discriminates and retaliates against out-of-state commercial actors in that area is not unconstitutional.
Western & Southern Life Insurance Co. was an Ohio insurer doing business in California. It was subject to a retaliatory tax that California levied on all out-of-state insurers that were incorporated in states that imposed higher taxes on California insurers doing business in them than California would have imposed on that state's insurers that were doing business in California. Western sought refunds through the administrative claims process for the amounts that it paid in retaliatory taxes. When it failed, it argued in California state court that the tax was invalid under the Commerce Clause.
Although Congress has plenary power over interstate commerce, part of this power includes the authority to allow states to regulate interstate commerce. Any action taken by a state within the scope of the authority granted by Congress is per se valid under the Commerce Clause. In this instance, the federal McCarran-Ferguson Act explicitly allowed the states to regulate and tax the insurance business, notwithstanding the authority of Congress under the Commerce Clause.
This law normally would be struck down under the dormant Commerce Clause, but it arose from a specific exception to this doctrine. States do have the authority to regulate, including enacting discriminatory taxes, when Congress has expressly authorized them to do so, as was the situation here.
California, in addition to imposing a premiums tax on both foreign and domestic insurance companies doing business in the State, imposes a "retaliatory" tax on such a foreign insurer when the insurer's State of incorporation imposes higher taxes on California insurers doing business in that State than California would otherwise impose on that State's insurers doing business in California. Appellant, an Ohio insurer doing business in California, after unsuccessfully filing administrative refund claims for California retaliatory taxes paid, brought a refund suit in California Superior Court, alleging that the retaliatory tax violates the Commerce Clause and the Equal Protection Clause of the Fourteenth Amendment. The Superior Court ruled the tax unconstitutional, but the California Court of Appeal reversed.
1. The retaliatory tax does not violate the Commerce Clause. The McCarran-Ferguson Act, which leaves the regulation and taxation of insurance companies to the States, removes entirely any Commerce Clause restriction upon California's power to tax the insurance business. Neither the language nor the history of that Act suggests that it does not permit, as appellant argues, "anticompetitive state taxation that discriminates against out-of-state insurers." Pp. 451 U. S. 652-655.
2. Nor does the retaliatory tax violate the Equal Protection Clause. Pp. 451 U. S. 655-674.
(a) Whatever the extent of a State's authority to exclude foreign corporations from doing business within the State, that authority does not justify imposition of more onerous taxes or other burdens on foreign corporations than those imposed on domestic corporations, unless the discrimination between foreign and domestic corporations bears a rational relation to a legitimate state purpose. Pp. 451 U. S. 655-668.
believed that the retaliatory tax would promote that purpose, it being immaterial whether, in fact, the tax will accomplish its objectives. Assuming that the lawmakers of each State are motivated in part by a desire to promote the interests of their domestic insurance industry, it is reasonable to suppose that California's retaliatory tax will induce other States to lower the burdens on California insurers in order to spare their domestic insurers the cost of the retaliatory tax in California. Pp. 451 U. S. 668-674.
99 Cal.App.3d 410, 159 Cal.Rptr. 539, affirmed.
BRENNAN, J., delivered the opinion of the Court, in which BURGER, C.J., and STEWART, WHITE, MARSHALL, POWELL, and REHNQUIST, JJ., joined. STEVENS, J., filed a dissenting opinion, in which BLACKMUN, J., joined, post, p. 451 U. S. 674.
in the State, is imposed on both foreign and domestic insurance companies, and a "retaliatory" tax, set in response to the insurance tax laws of the insurer's home State, is imposed on some foreign insurance companies. This case presents the question of the constitutionality of retaliatory taxes assessed by the State of California against appellant Western & Southern Life Insurance Co., an Ohio corporation, and paid under protest for the years 1965 through 1971.
tax owed by a given out-of-state insurer, California subtracts the California taxes otherwise due from the total taxes that would be imposed on a hypothetical similar California company doing business in the out-of-state insurer's State of incorporation. If the other State's taxes on the hypothetical California insurer would be greater than California's taxes on the other State's insurer, a retaliatory tax in the amount of the difference is imposed. If the other State's taxes on the hypothetical California insurer would be less than or equal to California's taxes, however, California exacts no retaliatory tax from the other State's insurer.
The Superior Court tried the case on stipulated facts without a jury, and ruled that the retaliatory tax is unconstitutional. It ordered a full refund of retaliatory taxes paid, plus interest and costs. App. 78-79. The California Court of Appeal reversed, upholding the retaliatory tax. 99 Cal.App.3d 410, 159 Cal.Rptr. 539. The California Supreme Court denied Western & Southern's petition for hearing. App. 89. Western & Southern filed a notice of appeal in this Court, and we noted probable jurisdiction. 449 U.S. 817 (1980). We affirm.
The Commerce Clause provides that "The Congress shall have Power . . . To regulate Commerce . . . among the several States." U.S.Const, Art. I, § 8, cl. 3. In terms, the Clause is a grant of authority to Congress, not an explicit limitation on the power of the States. In a long line of cases stretching back to the early days of the Republic, however, this Court has recognized that the Commerce Clause contains an implied limitation on the power of the States to interfere with or impose burdens on interstate commerce. [Footnote 3] Even in the absence of congressional action, the courts may decide whether state regulations challenged under the Commerce Clause impermissibly burden interstate commerce. See, e.g., Minnesota v. Clover Leaf Creamery Co., 449 U. S. 456 (1981); Philadelphia v. New Jersey, 437 U. S. 617 (1978).
may freely regulate an aspect of interstate commerce, any action taken by a State within the scope of the congressional authorization is rendered invulnerable to Commerce Clause challenge.
Congress removed all Commerce Clause limitations on the authority of the States to regulate and tax the business of insurance when it passed the McCarran-Ferguson Act, 59 Stat. 33, 15 U.S.C. § 1011 et seq., as this Court acknowledged in State Board of Insurance v. Todd Shipyards Corp., 370 U. S. 451, 370 U. S. 452 (1962). See also Group Life & Health Ins. Co. v. Royal Drug Co., 440 U. S. 205, 440 U. S. 219, n. 18 (1979); Wilburn Boat Co. v. Firemen's Fund Ins. Co., 348 U. S. 310, 348 U. S. 319 (1955). Nevertheless, Western & Southern, joined by the Solicitor General as amicus curiae, argues that the McCarran-Ferguson Act does not permit "anticompetitive state taxation that discriminates against out-of-state insurers." Brief for Appellant 28; Brief for United States as Amicus Curiae 16. We find no such limitation in the language or history of the Act.
"Congress declares that the continued regulation and taxation by the several States of the business of insurance is in the public interest, and that silence on the part of the Congress shall not be construed to impose any barrier to the regulation or taxation of such business by the several States."
Section 2(a), 59 Stat. 33, 15 U.S.C. § 1012(a), declares: "The business of insurance . . . shall be subject to the laws of the several States which relate to the regulation or taxation of such business." The unequivocal language of the Act suggests no exceptions.
"put the full weight of [Congress'] power behind existing and future state legislation to sustain it from any attack under the commerce clause to whatever extent this may be done with the force of that power behind it, subject only to the exceptions expressly provided for."
We must therefore reject Western & Southern's Commerce Clause challenge to the California retaliatory tax: the McCarran-Ferguson Act removes entirely any Commerce Clause restriction upon California's power to tax the insurance business.
of the laws," but does not prevent the States from making reasonable classifications among such persons. See Lehnhausen v. Lake Shore Auto Parts Co., 410 U. S. 356, 410 U. S. 359-360 (1973); Allied Stores of Ohio v. Bowers, 358 U. S. 522, 358 U. S. 526-527 (1959). Thus, California's retaliatory insurance tax should be sustained if we find that its classification is rationally related to achievement of a legitimate state purpose.
But as appellee points out, state tax provisions directed against out-of-state parties have not always been subjected to such scrutiny. Rather, a line of Supreme Court cases most recently exemplified by Lincoln National Life Ins. Co. v. Read, 325 U. S. 673 (1945), holds that a State may impose a tax on out-of-state corporations for the "privilege" of doing business in the State, without any requirement of a rational basis. Since the California courts have defined the retaliatory tax as a "privilege" tax, Western & Southern Life Ins. Co. v. State Board of Equalization, 4 Cal.App.3d 21, 35, 84 Cal.Rptr. 88, 97-98 (1970), application of the reasoning of these cases would require us to sustain the tax without further inquiry into its rational basis. We must therefore decide first whether California's retaliatory tax is subject to such further inquiry.
Some past decisions of this Court have held that a State may exclude a foreign corporation from doing business or acquiring or holding property within its borders. E.g., Asbury Hospital v. Cass County, 326 U. S. 207, 326 U. S. 211 (1945); Bank of Augusta v. Earle, 13 Pet. 519, 38 U. S. 588-589, 38 U. S. 592 (1839). From this principle has arisen the theory that a State may attach such conditions as it chooses upon the grant of the privilege to do business within the State. Paul v. Virginia, 8 Wall. at 75 U. S. 181. While this theory would suggest that a State may exact any condition, no matter how onerous or otherwise unconstitutional, from a foreign corporation desiring to do business within it, this Court has also held that a State may not impose unconstitutional conditions on the grant of a privilege.
E.g., Sherbert v. Verner, 374 U. S. 398, 374 U. S. 404 (1963); Wieman v. Updegraff, 344 U. S. 183, 344 U. S. 192 (1952); Frost & Frost Trucking Co. v. Railroad Comm'n, 271 U. S. 583, 271 U. S. 592-593 (1926).
These two principles are in obvious tension. If a State cannot impose unconstitutional conditions on the grant of a privilege, then its right to withhold the privilege is less than absolute. But if the State's right to withhold the privilege is absolute, then no one has the right to challenge the terms under which the State chooses to exercise that right. In view of this tension, it is not surprising that the Court's attempt to accommodate both principles has produced results that seem inconsistent or illogical. Compare Dole v. Continental Ins. Co., 94 U. S. 535 (1877), with 87 U. S. v. Morse, 20 Wall. 445 (1874); and compare Lincoln National Life Ins. Co. v. Read, supra, with Hanover Fire Ins. Co. v. Harding, 272 U. S. 494 (1926).
This Court sustained the Virginia statute. Viewing corporations as recipients of "special privileges," 8 Wall. at 75 U. S. 181, and believing that "it might be of the highest public interest that the number of corporations in the Sate should be limited," id. at 75 U. S. 182, the Court held that a State's assent to the creation of a domestic corporation or the entry of a foreign corporation "may be granted upon such terms and conditions as those States may think proper to impose." Id. at 75 U. S. 181. [Footnote 10] Under this view, there was no need for the Court to consider whether the statute was arbitrary, irrational, or discriminatory.
"[The States] may exclude the foreign corporation entirely; they may restrict its business to particular localities, or they may exact such security for the performance of its contracts with their citizens as in their judgment will best promote the public interest. The whole matter rests in their discretion."
Henderson 68. [Footnote 11] Second, the Fourteenth Amendment, ratified in 1868, introduced the constitutional requirement of equal protection, prohibiting the States from acting arbitrarily or treating similarly situated persons differently, even with respect to privileges formerly dispensed at the State's discretion. The combination of general incorporation laws and equal protection necessarily undermined the doctrine of Paul v. Virginia. If the right to incorporate or to do business within a State ceases to be a privilege to be dispensed by the State as it sees fit, and becomes a right generally available to all on equal terms, then the argument for special exactions as "privilege taxes" is destroyed.
the power to change the conditions of admission at any time, for the future, and to impose as a condition the payment of a new tax, or a further tax, as a license fee. If it imposes such license fee as a prerequisite for the future, the foreign corporation, until it pays such license fee, is not admitted willing the State or within its jurisdiction. It is outside, at the threshold, seeking admission, with consent not yet given. . . . By going into the State of New York in 1872, [the Philadelphia Fire Association] assented to such prerequisite as a condition of its admission within the jurisdiction of New York."
Id. at 119 U. S. 119-120.
"that it is the settled doctrine of this court that the terms and conditions so prescribed must not be repugnant to the Constitution of the United States or inconsistent with any right granted or secured by that instrument."
"that a corporation is estopped to claim the benefit of the constitutional provision securing to it the equal protection of the laws simply because it voluntarily entered and remained in a State which has enacted a statute denying such protection to it and to like corporations from the same State?"
Id. at 119 U. S. 127.
"that the imposition of special taxes upon foreign corporations for the privilege of doing business within the State is sufficient to justify such different taxation."
"[i]t would be a fanciful distinction to say that there is any real difference in the burden imposed because the one is taxed for the privilege of a foreign corporation to do business in the State and [the] other for the right to be a corporation."
"to tax the foreign corporation for carrying on business under the circumstances shown, by a different and much more onerous rule than is used in taxing domestic corporations for the same privilege, is a denial of the equal protection of the laws."
thus he manipulated out of existence."
Frost & Frost Trucking Co. v. Railroad Comm'n, 271 U.S. at 271 U. S. 593-594. See also Power Manufacturing Co. v. Saunders, 274 U. S. 490, 274 U. S. 497 (1927).
"that a State may discriminate against foreign corporations by admitting them under more onerous conditions than it exacts from domestic companies. . . ."
"then the long-established rule that a State may discriminate against foreign corporations by admitting them under more onerous conditions than it exacts from domestic companies would go into the discard."
Ibid. [Footnote 19] So long as a tax is "levied upon the privilege of entering the State and engaging in business there," it may not be challenged under the Equal Protection Clause, even though it may impose a burden greater and more discriminatory than was imposed at the date of the corporation's entry into the State. Id. at 325 U. S. 678.
in at least three subsequent cases. In Wheeling Steel Corp. v. Glander, 337 U. S. 562 (1949), the Court struck down a provision of Ohio's ad valorem tax law that subjected certain intangible property of non-Ohio corporations to a tax not applied to identical property of Ohio corporations. The Court concluded that the provision violated the Equal Protection Clause on the ground that the inequality of treatment was "not because of the slightest difference in Ohio's relation to the decisive transaction, but solely because of the different residence of the owner." Id. at 336 U. S. 572. [Footnote 20] The decision in Wheeling Steel was not directly in conflict with that in Lincoln National, because the Ohio courts had held the tax in Wheeling Steel an "ad valorem property tax, . . . and in no sense a franchise, privilege, occupation, or income tax." 337 U.S. at 337 U. S. 572. However, the Wheeling Steel decision rejected the principle of Lincoln National: the opinion declared that a State's power to exclude out-of-state corporations is limited by the Constitution; the State may not "exac[t] surrender of rights derived from the Constitution of the United States." 337 U.S. at 337 U. S. 571 (citing Hanover Fire Ins. Co. v. Harding, supra, at 272 U. S. 507).
"This Court has consistently held that, while a State may impose conditions on the entry of foreign corporations to do business in the State, once it has permitted them to enter,"
"the adopted corporations are entitled to equal protection with the state's own corporate progeny, at least to the extent that their property is entitled to an equally favorable ad valorem tax basis."
"Wheeling Steel Corp. v. Glander, 337 U. S. 562, 337 U. S. 571-572. See Reserve Life Ins. Co. v. Bowers, 380 U. S. 258; Hanover Fire Ins. Co. v. Harding, 272 U. S. 494; Southern R. Co. v. Greene, 216 U. S. 400."
393 U.S. at 393 U. S. 119-120.
"No doubt there are . . . subjects as to which foreign corporations may be classified separately from both individuals and domestic corporations and dealt with differently. But there are other subjects as to which such a course is not admissible, the distinguishing principle being that classification must rest on differences pertinent to the subject in respect of which the classification is made."
In determining whether a challenged classification is rationally related to achievement of a legitimate state purpose, we must answer two questions: (1) does the challenged legislation have a legitimate purpose? and (2) was it reasonable for the lawmakers to believe that use of the challenged classification would promote that purpose? See Minnesota v. Clover Leaf Creamery Co., 449 U.S. at 449 U. S. 461-463; Vance v. Bradley, 440 U. S. 93, 440 U. S. 97-98 (1979).
state doing business therein burdens heavier than those imposed upon corporations of such foreign state doing business in the enacting state, but to induce such foreign state to show the same consideration to corporations of the enacting state doing business therein as is shown to corporations of such foreign state doing business in the enacting state."
"The actual rationale for the provision is that the application of the retaliatory laws acts as a deterrent to state taxation on the insurance industry."
"is to put pressure on the several states to impose the same tax burden on all insurance companies, foreign or domestic, and thereby encourage the doing of interstate business."
99 Cal.App.3d at 413, 159 Cal.Rptr. at 541. Accord, Western & Southern life Ins. Co. v. State Board of Equalization, 4 Cal.App.3d at 34, 84 Cal.Rptr. at 96; Atlantic Ins. Co. v. State Board of Equalization, 255 Cal.App.2d 1, 4, 62 Cal.Rptr. 784, 786 (1967), cert. denied and appeal dism'd, 390 U. S. 529 (1968).
Many may doubt the wisdom of California's retaliatory tax; indeed, the retaliatory tax has often been criticized as a distortion of the tax system and an impediment to the raising of revenue from the taxation of insurance. See, e.g., Council of State Governments, State Retaliatory Taxation of the Insurance Industry 12-13 (1977); Task Force Report, Statement of Policy on Insurance Premium Taxation, 1 Proc.Nat.Assn. of Ins.Comm'rs 71 (1971); Report of New Jersey Tax Policy Comm., Pt. V, pp. 47-48 (1972); Strickler, The Mess in State Premium Taxation of Insurance Companies, 69 Best's Rev. 34, 38 (1969). But the courts are not empowered to second-guess the wisdom of state policies. Ferguson v. Skrupa, 372 U. S. 726, 372 U. S. 729 (1963). Our review is confined to the legitimacy of the purpose.
There can be no doubt that promotion of domestic industry by deterring barriers to interstate business is a legitimate state purpose. This Court has recognized the legitimacy of state efforts to maintain the profit level of a domestic industry, Parker v. Brown, 317 U. S. 341, 317 U. S. 363-367 (1943), and of efforts to "protect and enhance the reputation" of a domestic industry so that it might compete more effectively in the interstate market, Pike v. Bruce Church, Inc., 397 U. S. 137, 397 U. S. 143 (1970). California's effort on behalf of its domestic insurance industry is no less legitimate.
"Any time a State adopts a fiscal or administrative policy that affects the programs of a sister State, pressure to modify those programs may result. Unless that pressure transgresses the bounds of the Commerce Clause or the Privileges and Immunities Clause of Art. IV, § 2, see, e.g., Austin v. New Hampshire, 420 U. S. 656 (1975), it is not clear how our federal structure is implicated."
in fact, the provision will accomplish its objectives is not the question: the Equal Protection Clause is satisfied if we conclude that the California Legislature rationally could have believed that the retaliatory tax would promote its objective. Minnesota v. Clover Leaf Creamery Co., 449 U.S. at 449 U. S. 466; Vance v. Bradley, 440 U.S. at 440 U. S. 111; United States v. Carolene Products Co., 304 U. S. 144, 304 U. S. 154 (1938).
"It is true that insurers are disadvantaged by retaliatory taxation provisions in the short run, for they usually result in some insurers' paying more in taxes in retaliating states. But, in the long run, insurers as a group pay less in taxes because of these provisions, since legislators, when considering measures affecting insurers, do consider retaliatory effects in instance after instance."
Insurance Tax, at 66. The study concluded that retaliatory taxes "have kept premiums lower and insurers' profits higher than would otherwise have been the case." Id. at 67. It therefore recommended passage of the proposed constitutional amendment. See ibid.
We cannot say that the California Legislature's conclusions were irrational, or even unreasonable. Assuming that the lawmakers of each State are motivated in part by a desire to promote the interests of their domestic insurance industry, it is reasonable to suppose that California's retaliatory tax will induce other States to lower the burdens on California insurers in order to spare their domestic insurers the cost of the retaliatory tax in California.
"Whether the insurance companies have sponsored this legislation or not, in their resistance to tax change, they have benefitted by it. The home-owned companies in all but a half dozen states are able to say, 'Don't raise our taxes. If you do, we will have to pay more in other states.' The effectiveness of this barrier is demonstrated by the fact that, of the 48 states, only 9 increased their insurance tax rates in the last twelve years. . . . None of these is an outstanding insurance state."
"The common purpose of [retaliatory tax] legislation in the several states has been to discourage any state from imposing discriminatory taxes or other burdens upon out-of-state companies. The effort seems to have been very largely successful; in any event, taxes on insurance premiums have stayed close to 2 percent in most states, for both domestic and out-of-state insurers."
Atlantic Ins. Co. v. State Board of Equalization, 255 Cal.App.2d at 4, 62 Cal.Rptr. at 786.
against foreign insurance companies has declined over the period. Bodily, 44 J. of Risk & Ins. at 27-32. These results are precisely those that advocates of the retaliatory tax would predict, and thus provide some support for that theory. Statistical analysis of the available data, however, failed to verify this conclusion: the correlation between retaliatory tax laws and the observed results was not found to be statistically significant. Id. at 30-31. The author therefore concluded that retaliatory taxes have been "of questionable value." Id. at 34. Cf. Pelletier, 39 Notre Dame Law. at 267-269; Felton, Retaliatory Insurance Company Taxation: An Evaluation, 28 J. of Ins. 71, 77-78 (1961).
"it is evident from all the considerations presented to [the legislature], and those of which we may take judicial notice, that the question is at least debatable."
United States v. Carolene Products Co., supra, at 304 U. S. 154. On this standard, we cannot but conclude that the California retaliatory insurance tax withstands the strictures of the Fourteenth Amendment.
"When by or pursuant to the laws of any other state or foreign country any taxes, licenses and other fees, in the aggregate, and any fines, penalties, deposit requirements or other material obligations, prohibitions or restrictions are or would be imposed upon California insurers, or upon the agents or representatives of such insurers, which are in excess of such taxes, licenses and other fees, in the aggregate, or which are in excess of the fines, penalties, deposit requirements or other obligations, prohibitions, or restrictions directly imposed upon similar insurers, or upon the agents or representatives of such insurers, of such other state or country under the statutes of this State, so long as such laws of such other state or country continue in force or are so applied, the same taxes, licenses and other fees, in the aggregate, or fines, penalties or deposit requirements or other material obligations, prohibitions, or restrictions, of whatever kind shall be imposed upon the insurers, or upon the agents or representatives of such insurers, of such other state or country doing business or seeking to do business in California. Any tax, license or other fee or other obligation imposed by any city, county, or other political subdivision or agency of such other state or country on California insurers or their agents or representatives shall be deemed to be imposed by such state or country within the meaning of this article."
Cal.Ins.Code Ann. § 685 (West 1972).
This provision was enacted in present form in 1959, pursuant to the California Constitution, Art. XIII, § 14-4/5(f)(3). At that time, the California Constitution permitted imposition of the retaliatory tax only when the other State taxed California insurers at a higher rate than it taxed its own insurers. See Cal.Const., Art. . XIII, § 14-4/5(f)(3) (West Supp. 1964). In 1964, however, the California Constitution was amended to permit the imposition of the retaliatory tax whenever the other State's taxes on California insurers are higher than California taxes on similar insurers. Cal.Const., Art. XIII, § 14-4/5(f)(3) (West. Supp. 1966). See Franklin Life In. Co. v. State Board of Equalization, 63 Cal.2d 222, 225-227, 404 P.2d 477, 480-481 (1965).
Western & Southern also challenges a provision of California's property tax law, since repealed, which permitted certain domestic insurance companies to credit a greater portion of property tax paid on their principal offices against their premiums tax liability than foreign insurers could credit. Cal.Rev.Tax. Code Ann. §§ 12241(a) and (b) (West 1970). We need not consider this challenge, because any increase in the property tax deduction would merely trigger an offsetting increase in the retaliatory tax. See App. 86-87.
See Cooley v. Board of Wardens, 12 How. 299 (1852); Gibbons v. Ogden, 9 Wheat. 1, 22 U. S. 209 (1824).
The California courts have described the Kansas retaliatory insurance tax as "substantially identical" to § 685. Atlantic Ins. Co. v. State Board of Equalization, 255 Cal.App.2d 1, 10, 62 Cal.Rptr. 784, 790 (1967), cert. denied and appeal dism'd, 390 U. S. 529 (1968).
"We are unable to find in the record evidence to support the view that the tax in question upon foreign insurance companies is greater than that levied on the home insurance companies."
160 Kan. at 311, 161 P.2d at 734. But the principle of Benjamin, applied in Hobbs, was that it was unnecessary for the Court to decide whether the challenged tax was discriminatory, since the McCarran-Ferguson Act simply made the Commerce Clause inapplicable. Thus, Western & Southern's reliance on this purported distinction carries no weight.
"It is not the intention of Congress in the enactment of this legislation to clothe the States with any power to regulate or tax the business of insurance beyond that which they had been held to possess prior to the decision of the United States Supreme Court in the Southeastern Underwriters Association case. Briefly, your committee is of the opinion that we should provide for the continued regulation and taxation of insurance by the States, subject always, however, to the limitations set out in the controlling decisions of the United States Supreme Court. . . ."
H.R.Rep. No. 143, 79th Cong., 1st Sess., 3 (1945).
"Congress, of course, does not have the final say as to what constitutes due process under the Fourteenth Amendment. And while Congress has authority by § 5 of that Amendment to enforce its provisions [citing cases], the McCarran-Ferguson Act does not purport to do so."
Id. at 370 U. S. 457.
Although Western & Southern raises a due process claim in its statement of questions presented, it does not separately address that claim in its brief. We therefore assume that any due process argument is subsumed in the equal protection issue. See Minnesota v. Clover Leaf Creamery Co., 449 U. S. 456, 449 U. S. 470, n. 12 (1981).
"No conceivable violation of the commerce clause, in letter or spirit, is presented. Nor is contravention of any other limitation."
Id. at 328 U. S. 436. The appellant in that case, however, challenged the South Carolina tax under the Commerce Clause, id. at 328 U. S. 411, and nothing in the opinion of the Court suggests that the Court considered or decided any equal protection issue.
The Court disposed of plaintiff in error's Commerce Clause argument on the ground that the business of insurance is not commerce. 8 Wall. at 75 U. S. 183. See supra at 451 U. S. 653-654.
"at first, the corporate privilege was granted sparingly, and only when the grant seemed necessary in order to procure for the community some specific benefit otherwise unavailable."
Louis K. Liggett Co. v. Lee, 288 U. S. 517, 288 U. S. 549 (1933) (dissenting opinion). See also 1 W. Fletcher, Cyclopedia of the Law of Private Corporations 5-6 (1974); G. Henderson, The Position of Foreign Corporations in American Constitutional Law 64-68 (1918) (hereafter Henderson).
In 1869, the year Paul v. Virginia was decided, the Commonwealth of Virginia did not permit general incorporation of insurance companies. Va.Code of 1860, ch. 65, § 4. Thus, the Court's conception of the corporate franchise in that case as a "grant of special privileges to the corporators," Paul v. Virginia, 8 Wall. at 75 U. S. 181, was an accurate portrayal of the corporation as it existed at that time. This was not to last for long. See Act of Mar. 30, 1871, 1870 Va. Acts, ch. 277 (general incorporation law made applicable to insurance companies).
As appellee concedes, the theory espoused in Philadelphia Fire Assn., that a foreign corporation is not "a person within [the State's] jurisdiction" within the meaning of the Equal Protection Clause unless it is in compliance with all conditions imposed on its entry is now discarded. See Kentucky Finance Corp. v. Paramount Auto Exchange Corp., 262 U. S. 544, 262 U. S. 549-551 (1923) (holding that a foreign corporation is "within" the State if it files a lawsuit therein); Bethlehem Motors Corp. v. Flynt, 256 U. S. 421, 256 U. S. 424 (1921) (holding that "corporations doing business in a State and having an agent there are within the jurisdiction of the State").
Southern R. Co. v. Greene, 216 U. S. 400 (1910); Ludwig v. Western Union Telegraph Co., 216 U. S. 146 (1910); Pullman Co. v. Kansas, 216 U. S. 56 (1910); Western Union Telegraph Co. v. Kansas, 216 U. S. 1 (1910) (Western Union I).
Southern R. Co. relied on two Commerce Clause cases decided earlier in the same Term, in both of which Justice Harlan wrote the plurality opinion. Western Union I, supra, and Pullman Co. v. Kansas, supra, struck down Kansas taxes imposed on the total authorized capital of out-of-state corporations, representing the corporations' property both within and without Kansas. The State defended the taxes on the strength of Paul v. Virginia and like cases, as conditions imposed on the privilege of doing business within the State. The plurality held that a State may not impose unconstitutional conditions on the privilege of doing business within the State. See 216 U.S. at 216 U. S. 33-38, 216 U. S. 46-48; Pullman Co. v. Kansas, supra, at 216 U. S. 62-63. Accord, Ludwig v. Western Union Telegraph Co., supra. Since a tax imposed on the out-of-state operations of an interstate company violates the Commerce Clause, see 216 U.S. at 216 U. S. 38-45, such a tax may not be imposed as a prerequisite to doing business in the State. The plurality opinion distinguished Paul v. Virginia as involving the business of insurance, which was not considered interstate commerce. 216 U.S. at 216 U. S. 33-34. Although modified in detail, the principle established in these cases still governs Commerce Clause challenges to state privilege taxes. See Complete Auto Transit, Inc. v. Brady, 430 U. S. 274 (1977).
Justice Holmes, in dissent in both cases, pointed out that, if a State has an "absolute arbitrary power" to exclude foreign corporations, then no conditions imposed on corporations in the exercise of that power could be unconstitutional. 216 U.S. at 216 U. S. 54.
Southern R. Co. did not, however, overrule Philadelphia Fire Assn. v. New York and like cases. Although acknowledging the difference in principle between its decision and that in Philadelphia Fire Assn., 216 U.S. at 216 U. S. 416, Southern R. Co. distinguished the earlier case on the ground that the Philadelphia Fire Association, unlike the Southern Railway, held only a one-year license renewable at the State's discretion.
This effectively overruled those portions of Baltic Mining Co. v. Massachusetts, 231 U. S. 68, 231 U. S. 88 (1913), overruled on other grounds, Alpha Portland Cement Co. v. Massachusetts, 268 U. S. 203, 268 U. S. 218 (1925), and Cheney Bros. Co. v. Massachusetts, 246 U. S. 147, 246 U. S. 156-158 (1918), that appeared to limit Southern R. Co. to cases in which the foreign corporation held substantial permanent property within the State.
"the measure of the burden is in the discretion of the State, and any inequality as between the foreign corporation and the domestic corporation in that regard does not come within the inhibition of the Fourteenth Amendment."
272 U.S. at 272 U. S. 511. The opinion makes clear, however, that a tax on the business of the corporation after its admission may not be imposed in the guise of an admission fee. Ibid.
The Court in Lincoln National Life Ins. Co. v. Read erroneously distinguished Hanover Fire Ins. Co. as involving an out-of-state insurance company holding an "unequivocal" license, rather than an annual license, renewable only upon satisfaction of the condition precedent of paying the discriminatory tax. 325 U.S. at 325 U. S. 676. In fact, the Hanover Fire Insurance Co. held only an annual license. 272 U.S. at 272 U. S. 509. The Court in Hanover Fire Ins. Co. explicitly stated that the "principle is the same" no matter whether the license is annual or indefinite. Ibid.
The reasoning in Lincoln National Life was virtually identical to that offered by Justice Holmes in his Western Union dissent. See n 14, supra.
"[i]t is hard to see that this offer of reciprocity restores to appellants any of the equality which the application of the Ohio tax, considered alone, so obviously denies."
337 U.S. at 337 U. S. 573.
"the power constitutionally to discriminate in favor of its own residents against the residents of other state members of our federation."
Id. at 358 U. S. 533. Our position has not been adopted by the Court, which has subsequently required no more than a rational basis for discrimination by States against out-of-state interests in the context of equal protection litigation. E.g., Baldwin v. Montana Fish and Game Comm'n, 436 U. S. 371, 436 U. S. 388-391 (1978); Hughes v. Alexandria Scrap Corp., 426 U. S. 794, 426 U. S. 810-814 (1976).
Although the retaliatory tax is an imposition on interstate insurance companies, it is supported by the industry as a means of fostering uniform and moderate levels of taxation nationwide. See Brief for the American Insurance Association et al. as Amici Curiae; Council of State Governments, State Retaliatory Taxation of the Insurance Industry 12 (1977).
The nature of the classification supports this conclusion as well. The retaliatory tax is not imposed on foreign corporations qua foreign corporations, as would be expected were the purpose of the tax to raise revenue from noncitizens; rather, it is imposed only on corporations whose home States impose more onerous burdens on California insurers than California otherwise would impose on those corporations.
A large part of this decline may be accounted for by the general decline in the States' reliance on business taxes. From 1957 to 1972, the proportion of total state tax revenues attributable to general business taxes fell by 17.7%, while the proportion attributable to life insurance premiums taxes fell by 20.0%. Bodily, The Effects of Retaliation on the State Taxation of Life Insurers, 44 J. of Risk & Ins. 21, 31-32 (1977). But see State Department of Finance, Budget Div., Highlights of Proposal for Quarterly Insurance Tax Payments 3-4 (1963) (showing that, since 1950, the proportion of California tax revenues attributable to insurance taxes has decreased substantially relative to that attributable to bank and corporate taxes).
against Ohio citizens within its jurisdiction is specifically intended to coerce the Ohio Legislature into enacting legislation favored by California. Today the Court holds that this state purpose is legitimate. In my opinion, that coercive motivation is not an acceptable justification for California's discriminatory treatment of nonresidents.
The discrimination disclosed by this record is much more irregular than a simple preference for domestic corporations over foreign corporations. Some foreign insurance companies pay the same tax that domestic companies pay. Those that pay higher taxes than California companies do not all pay the same tax. Thus, for example, California taxes insurance companies incorporated in Ohio at a 2.5% rate, Montana companies at a 2.75% rate, and West Virginia and Idaho companies at a 3% rate. [Footnote 2/1] The prevailing tax rate in California for domestic companies and most foreign companies is 2.3%. [Footnote 2/2] Thus, the insurance companies competing in the California market are subjected to flagrant discrimination.
In my opinion, the federal interest in the impartial administration of the laws of the several States is unquestionably paramount to any one State's parochial interest in applying pressure to its neighbors by use of "retaliatory" legislation. This discriminatory legislation is not justified by a legitimate purpose, and therefore violates the Equal Protection Clause.
See Cal.Ins.Code Ann. § 685 (West 1972); Idaho Code § 41-402 (1977); Ohio Rev.Code Ann. § 5729.03 (1973); Mont.Code Ann. § 33-2705 (1979); W.Va.Code §§ 33-3-14 and 33-3-14a (Supp. 1980). As the Court's opinion indicates, ante at 451 U. S. 651, the amount of retaliatory taxes reflected by these small percentage differences is significant.
Cal.Rev. & Tax. Code Ann. §§ 12201, 12202 (West 1970).
"The several states have different resources, populations, social and economic conditions, levels of public service, fiscal structures, methods and sources of raising revenue, and tax burdens, both in gross and per capita. With respect to other states, where no discriminatory or hostile action is involved, the states are largely autonomous in these matters. And even if another state has engaged in discriminatory action, the Constitution, as this Court has pointed out, does not contemplate the economic warfare of reprisal and retaliation. A&P Tea Co. v. Cottrell, 424 U. S. 366 (1976)."
Brief for United States as Amicus Curiae 10.
"We consider it now established that, whatever the extent of a State's authority to exclude foreign corporations from doing business within its boundaries, that authority does not justify imposition of more onerous taxes or other burdens on foreign corporations than those imposed on domestic corporations, unless the discrimination between foreign and domestic corporations bears a rational relation to a legitimate state purpose."
"It seems obvious that appellants are not accorded equal treatment, and the inequality is not because of the slightest difference in Ohio's relation to the decisive transaction, but solely because of the different residence of the owner."
"[I]t is clear that the purpose is not to generate revenue at the expense of out-of-state insurers, but to apply pressure on other States to maintain low taxes on California insurers."
See ante at 451 U. S. 669-670.
California's objective is to confer a limited benefit on a limited group of companies that are incorporated under its laws. This case involves the special interest of insurance companies in paying taxes at a rate no higher than the rate California requires for its budgetary purposes. The next case may involve a different industry with a different special interest. Thus, for example, the trucking industry or the motorcoach industry might favor high speed limits, loose safety inspection laws, and lax emission standards. If their lobbyists could persuade the legislature of a powerful State to adopt rules favorable to their interests, then, under today's holding, they may also seek retaliatory programs that would apply pressure to neighboring States to adopt similar rules. Although such a statute might violate other constitutional provisions, such as the Commerce Clause, under today's holding, the Equal Protection Clause would present no impediment.
In holding that California's purpose in enacting the discriminatory tax is legitimate, the Court compares this case to state attempts to maintain the profit level of a domestic industry, Parker v. Brown, 317 U. S. 341, 317 U. S. 363-367, and efforts to "protect and enhance the reputation" of a domestic industry, enabling it to compete more effectively in the interstate market. Pike v. Bruce Church, Inc., 397 U. S. 137, 397 U. S. 143. The enactment of a statute designed to confer a direct benefit or to provide protection for domestic corporations is surely not comparable to California's imposition of a burden on foreign corporations designed to coerce foreign States to enact legislation which will benefit California corporations at the expense of the interest which motivated the foreign State's original tax rate.
State Bd. of Equalization of Cal.


text:
andrewraoi, Badis Valdesalici [S.] & van der Voort [S.] 2015:392, Figs. 1-2 [Zootaxa 3985 (no. 3); ref. 33875] West Bengal, Darjeeling district: Dudhia, Mahananda River drainage, Balason River, India, 26°49'18.934"N, 88°14'31.160"E. Holotype: MSNG 57564. Paratypes: MSNG. •Valid as Badis andrewraoi Valdesalici & van der Voort 2015 -- (Valdesalici & van der Voort 2015:199 [ref. 33881], Basumatary et al. 2016:152 [ref. 34778], Blair et al. 2018:103 [ref. 36323]). Current status: Valid as Badis andrewraoi Valdesalici & van der Voort 2015. Badidae. Distribution: West Bengal, India; Nepal. Habitat: freshwater.
assamensis, Badis badis Ahl [E.] 1937:118 [Zoologischer Anzeiger v. 117 (nos 5/6); ref. 15261] Rivulet falling in the Dibru River, 3 kilometers north of Digholtarang, about 100 kilometers southeastern of Dubrugarh (Brahmaputra River drainage), Assam, India, 27°37'42"N, 95°23'25"E. Neotype: NRM 40309. Types mentioned: Paepke 1995:95 [ref. 21847]. Neotype designated by Kullander & Britz 2002:334, 337 [ref. 26542]. •Synonym of Badis badis (Hamilton 1822) -- (Talwar & Jhingran 1991:882 [ref. 20764] as assamenis, Menon 1999:290 [ref. 24904]). •Valid as Badis assamensis Ahl 1937 -- (Kullander & Britz 2002:334 [ref. 26542], Geetakumari & Vishwanath 2010:646 [ref. 30699], Schindler & Linke 2010:212 [ref. 31069], Geetakumari & Kadu 2011:2085 [ref. 31540], Khynriam & Sen 2013:69 [ref. 32119], Basumatary et al. 2016:152 [ref. 34778]). Current status: Valid as Badis assamensis Ahl 1937. Badidae. Distribution: Brahmaputra River drainage, India. Habitat: freshwater.
autumnum, Badis Valdesalici [S.] & van der Voort [S.] 2015:396, Figs. 4-6 [Zootaxa 3985 (no. 3); ref. 33875] West Bengal, Cooch Behar district, Petla, near Dinhata town: Singimari River drainage, Rathbari stream, India, 26°12’84.7"N, 89°43’65.15"E. Holotype: MSNG 57567. Paratypes: MSNG. •Valid as Badis autumnum Valdesalici & van der Voort 2015 -- (Valdesalici & van der Voort 2015:199 [ref. 33881], Basumatary et al. 2016:152 [ref. 34778]). Current status: Valid as Badis autumnum Valdesalici & van der Voort 2015. Badidae. Distribution: West Bengal, India. Habitat: freshwater.
badis, Labrus Hamilton [F.] 1822:70, 368, Pl. 25 (fig. 23) [An account of the fishes found in the river Ganges; ref. 2031] Shore of Tumapao River close to Duma village (Ganges River drainage), about 65 kilometers north-northeast of Calcutta, West Bengal, India, 22°58'03"N, 88°49'49"E. Neotype: NRM 43012. Neotype designated by Kullander & Britz 2002:305, 310 [ref. 26542]. •Valid as Badis badis (Hamilton 1822) -- (Ataur Rahman 1989:321 [ref. 24860], Talwar & Jhingran 1991:882 [ref. 20764], Sen 1995:587 [ref. 23778], Banik & Choudhury 1996:579 [ref. 24736], Sen 1999:203 [ref. 24750], Menon 1999:289 [ref. 24904], Tomey 1999:24 [ref. 24285], Rafique 2000:327 [ref. 25220], Karmakar 2000:35 [ref. 25662], Kullander & Britz 2002:305 [ref. 26542], Mirza 2003:23 [ref. 27265], Ataur Rahman 2003:347 [ref. 31338], Vishwanath & Shanta 2004:1620 [ref. 27861], Shrestha 2008:219 [ref. 29923], Geetakumari & Vishwanath 2010:646 [ref. 30699], Schindler & Linke 2010:212 [ref. 31069], Geetakumari & Kadu 2011:2085 [ref. 31540], Britz et al. 2012:63 [ref. 32015], Khynriam & Sen 2012:66 [ref. 32119], Ahmed et al. 2013:286 [ref. 32872], Gurung et al. 2013:4884 [ref. 32969], Dahanukar et al. 2015:435 [ref. 33730], Valdesalici & van der Voort 2015:391 [ref. 33875], Basumatary et al. 2016:152 [ref. 34778], Blair et al. 2018:104 [ref. 36323]). Current status: Valid as Badis badis (Hamilton 1822). Badidae. Distribution: Asia: Pakistan, Nepal, India, Bhutan and Bangladesh. Habitat: freshwater.
blosyrus, Badis Kullander [S. O.] & Britz [R.] 2002:339, Figs. 24-25 [Ichthyological Exploration of Freshwaters v. 13 (no. 4); ref. 26542] Janali River, Raimana, 26°39'00"N, 89°58'00"E, Brahmaputra River drainage, Kokrajhar Distr., Assam, India. Holotype: ZMH 9285. Paratypes: NRM 47770 (10), ZMH 9286 (77). •Valid as Badis blosyrus Kullander & Britz 2002 -- (Geetakumari & Vishwanath 2010:646 [ref. 30699], Schindler & Linke 2010:212 [ref. 31069], Geetakumari & Kadu 2011:2085 [ref. 31540], Khynriam & Sen 2013:69 [ref. 32119], Basumatary et al. 2016:152 [ref. 34778]). Current status: Valid as Badis blosyrus Kullander & Britz 2002. Badidae. Distribution: Brahmaputra River drainage, India. Habitat: freshwater.
britzi, Badis Dahanukar [N.], Kumkar [P.], Katwate [U.] & Raghavan [R.] 2015:430, Figs. 1-3 [Zootaxa 3941 (no. 3); ref. 33730] Karnataka, Nagodi tributary of the west-flowing Sharavati River, near the town of Nittur, India (13°54’58"N, 74°53’21"E), elevation 594 meters. Holotype: BNHS FWF 125. Paratypes: BNHS FWF, WILD, ZSI-WRC. •Valid as Badis britzi Dahanukar, Kumkar, Katwate & Raghavan 2015. Current status: Valid as Badis britzi Dahanukar, Kumkar, Katwate & Raghavan 2015. Badidae. Distribution: Western Ghats, India. Habitat: freshwater.
buchanani, Badis Bleeker [P.] 1853:106, Pl. 2 (fig. 3) [Verhandelingen van het Bataviaasch Genootschap van Kunsten en Wetenschappen. v. 25 (art. 8); ref. 341] Hooghly River, Calcutta; Jihlum River, Chillianwallah, India. Syntypes and/or Bleeker specimens: (24) AMS B.8227-30 [from Day] (1, 1, 1, 1), B.8326 [from Day] (1); RMNH 6354 (?). •Synonym of Badis badis (Hamilton 1822) -- (Menon 1999:290 [ref. 24904], Kullander & Britz 2002:305 [ref. 26542], Ataur Rahman 2003:347 [ref. 31338]). Current status: Synonym of Badis badis (Hamilton 1822). Badidae. Habitat: freshwater.
burmanicus, Badis badis Ahl [E.] in Arnold & Ahl 1936:449, Fig. [Fremdländische Süßwasserfische; ref. 26585] Rangoon, Myanmar. Syntypes: (3) ZMB 31904 (now 1). Types mentioned: Paepke 1995:95 [ref. 21847]. Syntypes as listed in Ahl 1937 [ref. 15261] and see Kullander & Britz 2002:324 [ref. 26542]. •Synonym of Badis badis (Hamilton 1822) -- (Talwar & Jhingran 1991:882 [ref. 20764]). •Synonym of Badis ruber Schreitmüller 1923 -- (Kullander & Britz 2002:319 [ref. 26542], Kottelat 2013:367 [ref. 32989]). Current status: Synonym of Badis ruber Schreitmüller 1923. Badidae. Habitat: freshwater.
chittagongis, Badis Kullander [S. O.] & Britz [R.] 2002:314, Fig. 11 [Ichthyological Exploration of Freshwaters v. 13 (no. 4); ref. 26542] Small stream in Lama town, 21°46'N, 92°12'E, Matamohuri River drainage, Bandarban Hill tracts, Chittagong Division, Bangladesh. Holotype: CAS 216608. Paratypes: CAS 95176-79 (17, 2, 8, 4). •Valid as Badis chittagongis Kullander & Britz 2002 -- (Vishwanath & Shanta 2004:1620 [ref. 27861], Geetakumari & Vishwanath 2010:647 [ref. 30699], Schindler & Linke 2010:212 [ref. 31069], Geetakumari & Kadu 2011:2085 [ref. 31540], Khynriam & Sen 2013:69 [ref. 32119], Dahanukar et al. 2015:434 [ref. 33730], Basumatary et al. 2016:152 [ref. 34778]). Current status: Valid as Badis chittagongis Kullander & Britz 2002. Badidae. Distribution: Matamohuri River drainage, Bangladesh. Habitat: freshwater.
corycaeus, Badis Kullander [S. O.] & Britz [R.] 2002:342, Fig. 26 [Ichthyological Exploration of Freshwaters v. 13 (no. 4); ref. 26542] Nan Kywe Chaung about 200 meters south of Sha Dau village, about 18 kilometers on road Myitkyina-Mogaung, 25°20'03"N, 97°16'40"E, Irrawaddy River drainage, Myitkyina District, Kachin State, Myanmar. Holotype: NRM 36193. Paratypes: CAS 98262 (26), 98265 (54, 5 c&s); NRM 36182 (1), 36227 (5), 37304 (1), 39904 (1), 40877 (14), 40894 (9), 40914 (2), 40976 (21), 41004 (11), 41047 (4), 42511-12 (34, 5), 42527-31 (50, 19, 50, 25, 25), 43003 (1), 43008-10 (4, 6, 6). •Valid as Badis corycaeus Kullander & Britz 2002 -- (Geetakumari & Vishwanath 2010:646 [ref. 30699], Schindler & Linke 2010:212 [ref. 31069], Geetakumari & Kadu 2011:2085 [ref. 31540], Kottelat 2013:367 [ref. 32989]). Current status: Valid as Badis corycaeus Kullander & Britz 2002. Badidae. Distribution: Irrawaddy River drainage, Myanmar. Habitat: freshwater.
dibruensis, Badis Geetakumari [K.] & Vishwanath [W.] 2010:645, Figs. 1-2 [Journal of Threatened Taxa v. 2 (no. 1); ref. 30699] 27°32'09.98"N, 94°58'02.31"E, Dibru, Dibru River, Brahmaputra River drainage, Assam, India. Holotype: MUMF-Per 95. Paratypes: MUMF-Per 96-107 (12), 108-110 (3, c&s). •Valid as Badis dibruensis Geetakumari & Vishwanath 2010 -- (Schindler & Linke 2010:209 [ref. 31069], Geetakumari & Kadu 2011:2085 [ref. 31540], Dahanukar et al. 2015:434 [ref. 33730], Basumatary et al. 2016:152 [ref. 34778]). Current status: Valid as Badis dibruensis Geetakumari & Vishwanath 2010. Badidae. Distribution: Dibru River, Brahmaputra River drainage, Assam, India. Habitat: freshwater.
fasciata, Labrus (Cychla) Swainson [W.] 1839:228 [The natural history and classification v. 2; ref. 4303] No types known. Based on Hamilton, fig. 25 -- which is Hamilton 1822:Pl.10 (fig. 25) [ref. 2031]. Family may be incorrect. Unnecessary replacement name for Labrus badis Hamilton 1822 (Kullander & Britz 2002:305 [ref. 26542]). •Synonym of Badis badis (Hamilton 1822) -- (Kullander & Britz 2002:305 [ref. 26542]). Current status: Synonym of Badis badis (Hamilton 1822). Badidae. Habitat: freshwater.
ferrarisi, Badis Kullander [S. O.] & Britz [R.] 2002:332, Fig. 19 [Ichthyological Exploration of Freshwaters v. 13 (no. 4); ref. 26542] Chindwin River drainage, Saigaing Division, Irrawaddy River drainage, Myanmar.Myanmar (Kalaymyo market, reported to come from Myit-tha River and nearby streams of Myit-tha drainage). Holotype: NRM 48424. Paratypes: CAS 88869 (3); NRM 44000 (19). •Valid as Badis ferrarisi Kullander & Britz 2002 -- (Vishwanath & Shanta 2004:1621 [ref. 27861], Geetakumari & Vishwanath 2010:646 [ref. 30699], Schindler & Linke 2010:212 [ref. 31069], Geetakumari & Kadu 2011:2085 [ref. 31540], Kottelat 2013:367 [ref. 32989], Dahanukar et al. 2015:434 [ref. 33730]). Current status: Valid as Badis ferrarisi Kullander & Britz 2002. Badidae. Distribution: Irrawaddy River drainage, Myanmar. Habitat: freshwater.
juergenschmidti, Badis Schindler [I.] & Linke [H.] 2010:210, Figs. 2-5 [Vertebrate Zoology v. 60 (no. 3); ref. 31069] Ka Dat Chaung River, at Kammon Chaung village, about 8 kilometers northwest of kyaiktiyo, 17°24'22"N, 97°04'20"E, Myanmar. Holotype: MTD F 32325. Paratypes: MTD F 32326-29 (4). •Valid as Badis juergenschmidti Schindler & Linke 2010 -- (Kottelat 2013:367 [ref. 32989]). Current status: Valid as Badis juergenschmidti Schindler & Linke 2010. Badidae. Distribution: Ka Dat Chaung River, Myanmar. Habitat: freshwater.
kanabos, Badis Kullander [S. O.] & Britz [R.] 2002:316, Fig. 12 [Ichthyological Exploration of Freshwaters v. 13 (no. 4); ref. 26542] Janali River, Raimana, 26°39'00"N, 89°58'00"E, Brahmaputra River drainage, Kokrajhar District, Assam, India. Holotype: ZMH 9283. Paratypes: NRM 46138 (10); ZMH 3361 (1), 9284 (69). •Valid as Badis kanabos Kullander & Britz 2002 -- (Vishwanath & Shanta 2004:1620 [ref. 27861], Geetakumari & Vishwanath 2010:646 [ref. 30699], Schindler & Linke 2010:212 [ref. 31069], Geetakumari & Kadu 2011:2085 [ref. 31540], Khynriam & Sen 2013:69 [ref. 32119], Dahanukar et al. 2015:434 [ref. 33730], Basumatary et al. 2016:152 [ref. 34778]). Current status: Valid as Badis kanabos Kullander & Britz 2002. Badidae. Distribution: Brahmaputra River drainage, India. Habitat: freshwater.
khwae, Badis Kullander [S. O.] & Britz [R.] 2002:328, Fig. 18 [Ichthyological Exploration of Freshwaters v. 13 (no. 4); ref. 26542] Small stream near Ban Chong Lu, about 13 kilometers northwest of Sangkhlaburi, 15°10'21"N, 98°20'00"E, Mae Nam Khwae Noi drainage, Kanchanaburi Province, Thailand. Holotype: NRM 47959. Paratypes: CMK 5501 (1), 14573 (3), 14793 (4), 15155 (21), 15177 (1); NRM 47960 (8); ZRC 46740 (8). •Valid as Badis khwae Kullander & Britz 2002 -- (Geetakumari & Vishwanath 2010:646 [ref. 30699], Schindler & Linke 2010:212 [ref. 31069], Geetakumari & Kadu 2011:2085 [ref. 31540], Kottelat 2013:367 [ref. 32989]). Current status: Valid as Badis khwae Kullander & Britz 2002. Badidae. Distribution: Mae Khlong River basin, Thailand. Habitat: freshwater.
kyanos, Badis Valdesalici [S.] & van der Voort [S.] 2015:399, Figs. 7-9 [Zootaxa 3985 (no. 3); ref. 33875] West Bengal, Jalpaiguri district, 7 km west of Dam Dim, Tista River drainage, Chel River, India, 26°87’48.42"N, 88°61’00.44"E. Holotype: MSNG 57571. Paratypes: MSNG. •Valid as Badis kyanos Valdesalici & van der Voort 2015 -- (Valdesalici & van der Voort 2015:199 [ref. 33881], Basumatary et al. 2016:152 [ref. 34778]). Current status: Valid as Badis kyanos Valdesalici & van der Voort 2015. Badidae. Distribution: West Bengal, India. Habitat: freshwater.
kyar, Badis Kullander [S. O.] & Britz [R.] 2002:350, Fig. 30 [Ichthyological Exploration of Freshwaters v. 13 (no. 4); ref. 26542] Nan Kywe Chaung about 200 meters southern of Sha Dau village, about 18 kilometers on road Myitkyina-Mogaung, 25°20'03"N, 97°16'40"E, Irrawaddy River drainage, Myitkyina District, Kachin State, Myanmar. Holotype: NRM 37302. Paratypes: CAS 98263 (8); NRM 35882 (4), 36180 (3), 36186 (2), 36195 (1), 36207 (5), 36200 (5), 37303 (1), 40282 (1, c&s), 40657 (4), 40876 (3), 40895 (3), 41695-96 (1, 1), 42508-09 (37, 10), 43002 (17), 44925 (1). •Valid as Badis kyar Kullander & Britz 2002 -- (Geetakumari & Vishwanath 2010:646 [ref. 30699] Schindler & Linke 2010:212 [ref. 31069], Geetakumari & Kadu 2011:2085 [ref. 31540], Kottelat 2013:367 [ref. 32989]). Current status: Valid as Badis kyar Kullander & Britz 2002. Badidae. Distribution: Irrawaddy River drainage, Myanmar. Habitat: freshwater.
laspiophilus, Badis Valdesalici [S.] & van der Voort [S.] 2015:194, Figs. 1-3 [Zootaxa 3986 (no. 2); ref. 33881] Jalpaiguri District, buffer zone of the Buxa Tiger Reserve, Shipra swamp area, Torsa River drainage, 26°30’234"N, 89°44’095"E, West Bengal, India, elevation 54 meters. Holotype: MTD F 32869. Paratypes: MSNG, MTD. Plus non-type specimens. •Valid as Badis laspiophilus Valdesalici & van der Voort 2015 -- (Basumatary et al. 2016:152 [ref. 34778]). Current status: Valid as Badis laspiophilus Valdesalici & van der Voort 2015. Badidae. Distribution: Torsa River drainage, West Bengal, India. Habitat: freshwater.
pancharatnaensis, Badis Basumatary [S.], Choudhury [H.], Baishya [R. A.], Sarma [D.] & Vishwanath [W.] 2016:152, Figs. 1-3 [Vertebrate Zoology v. 66 (no. 2); ref. 34778] Hasila Beel, Brahmaputra drainage, Goalpara District, Assam, India, 26°10'20.8"N, 90°36'17.2"E, elevation 40 meters. Holotype: GUMF 0095. Paratypes: GUMF, ZSI. •Valid as Badis pancharatnaensis Basumatary, Choudhury, Baishya, Sarma & Vishwanath 2016. Current status: Valid as Badis pancharatnaensis Basumatary, Choudhury, Baishya, Sarma & Vishwanath 2016. Badidae. Distribution: Brahmaputra drainage, Goalpara District, Assam, India. Habitat: freshwater.
pyema, Badis Kullander [S. O.] & Britz [R.] 2002:346, Fig. 28 [Ichthyological Exploration of Freshwaters v. 13 (no. 4); ref. 26542] Nan Hto Chaung, in Putao, about 1 mile from 46th regiment, 27°19'44"N, 97°22'36"E, Irrawaddy River drainage, Kachin State, Myanmar. Holotype: NRM 43005. Paratypes: NRM 35884 (5), 40931 (5), 40934 (2), 41688 (1), 43004 (6), 44926 (1). •Valid as Badis pyema Kullander & Britz 2002 -- (Geetakumari & Vishwanath 2010:646 [ref. 30699], Schindler & Linke 2010:212 [ref. 31069], Geetakumari & Kadu 2011:2085 [ref. 31540], Kottelat 2013:367 [ref. 32989]). Current status: Valid as Badis pyema Kullander & Britz 2002. Badidae. Distribution: Irrawaddy River drainage, northern Myanmar. Habitat: freshwater.
rubra, Badis badis var. Schreitmüller [W.] 1923:252 [Blätter für Aquarien- und Terrarienkunde v. 7; ref. 23695] Roadside ditch, Irrawaddy River drainage, about 48 kilometers on road Pyay-Yangon, 18°30'41"N, 95°24'48"E, Bago Division, Myanmar. Neotype: NRM 36194. Appeared first in Liebig 1923:145 [ref. 23696] but not named. Neotype designated by Kullander & Britz 2002:319, 324 [ref. 26542]. •Valid as Badis ruber Schreitmüller 1923 -- (Kottelat 2000:88 [ref. 25486], Kottelat 2001:152 [ref. 25780], Kullander & Britz 2002:319 [ref. 26542], Geetakumari & Vishwanath 2010:646 [ref. 30699], Schindler & Linke 2010:212 [ref. 31069], Geetakumari & Kadu 2011:2085 [ref. 31540], Kottelat 2013:367 [ref. 32989]) Current status: Valid as Badis ruber Schreitmüller 1923. Badidae. Distribution: Irrawaddy, Mu, Sittoung, and Mekong River basins, Myanmar, Thailand, and Laos; Tenasserim region of Myanmar. Habitat: freshwater.
siamensis, Badis badis Klausewitz [W.] 1957:199, Fig. 3 [Senckenbergiana Biologica v. 38 (nos 3/4); ref. 12152] Phuket Island, Phuket city, southern Thailand. Holotype: SMF 3978. Paratypes: SMF 3979 (5). •Valid as Badis siamensis Klausewitz 1957 -- (Kullander & Britz 2002:325 [ref. 26542], Geetakumari & Vishwanath 2010:646 [ref. 30699], Geetakumari & Kadu 2011:2085 [ref. 31540], Kottelat 2013:367 [ref. 32989]) Current status: Valid as Badis siamensis Klausewitz 1957. Badidae. Distribution: Takaupa River drainage, Irrawaddy River drainage, Thailand. Habitat: freshwater.
singenensis, Badis Geetakumari [K.] & Kadu [K.] 2011:2086, Image 1 [Journal of Threatened Taxa v. 3 (no. 9); ref. 31540] Saku-Kadu Village, Singen River, Brahmaputra drainage, Arunachal Pradesh, India. Holotype: MUMF-Per 113. Paratypes: (26) MUMF-Per 114-131 (19, 2 dissected and c&s), RGUMF 0218-0225 (8). •Valid as Badis singenensis Geetakumari & Kadu 2011 -- (Valdesalici & van der Voort 2015:198 [ref. 33881], Basumatary et al. 2016:152 [ref. 34778]). Current status: Valid as Badis singenensis Geetakumari & Kadu 2011. Badidae. Distribution: Brahmaputra drainage, Arunachal Pradesh, India. Habitat: freshwater.
soraya, Badis Valdesalici [S.] & van der Voort [S.] 2015:402, Figs. 10-11 [Zootaxa 3985 (no. 3); ref. 33875] West Bengal, Jalpaiguri district, 12 km west of Dam Dim, Tista River drainage, Lish River, India, 26°51'55.530"N, 88°34'3.374"E. Holotype: MSNG 57574. Paratypes: MSNG. •Valid as Badis soraya Valdesalici & van der Voort 2015 -- (Valdesalici & van der Voort 2015:199 [ref. 33881], Basumatary et al. 2016:152 [ref. 34778]). Current status: Valid as Badis soraya Valdesalici & van der Voort 2015. Badidae. Distribution: Tista River drainage, West Bengal, India. Habitat: freshwater.
triocellus, Badis Khynriam [D.] & Sen [N.] 2013:65, Pl. I [Records of the Zoological Survey of India v. 111 (no. 4) (for 2011); ref. 32119] Subansiri river below damsite, lower Subansiri district, Arunachal Pradesh, India, 27°32'82"N, 94°15'35"E, altitude 100 meters. Holotype: ERS-V/F-2806. Paratypes: ERS-V/F-2807 (3), 2808 (4), 2809 (4), 2810 (20). Appeared as Badis trocellii in prepublication (not available). •Valid as Badis triocellus Khynriam & Sen 2013. •Probably a synonym of Badis singenensis Geetakumari & Kadu 2011 -- (Valdesalici & van der Voort 2015:407 [ref. 33875]). Current status: Valid as Badis triocellus Khynriam & Sen 2013. Badidae. Distribution: North east India: Arunachal Pradesh, Assam and Meghalaya, India. Habitat: freshwater.
tuivaiei, Badis Vishwanath [W.] & Shanta [K.] 2004:1619, Fig. 1 [Zoos' Print Journal v. 19 (no.9); ref. 27861] Tuivai River, Churachandpur District, Manipur, India. Holotype: MUMF 5124. Paratypes: MUMF 5115/20 (20), 5116 (1), 5118 (1), 5125-5127 (3). •Valid as Badis tuivaiei Vishwanath & Shanta 2004 -- (Geetakumari & Vishwanath 2010:646 [ref. 30699], Schindler & Linke 2010:209 [ref. 31069], Geetakumari & Kadu 2011:2085 [ref. 31540], Khynriam & Sen 2013:69 [ref. 32119], Basumatary et al. 2016:152 [ref. 34778]). Current status: Valid as Badis tuivaiei Vishwanath & Shanta 2004. Badidae. Distribution: Brahmaputra River drainage, Manipur, India. Habitat: freshwater.

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Pennsylvania courts continue to carefully scrutinize restrictive covenants. In a recent non-precedential decision, First National Bank of Pennsylvania v. Nagle, Superior Court of Pa. (No. 441 WDA 2015) (April 8, 2016), the Superior Court reversed and remanded a trial court order enjoining a former employee from dealing with customers that the employee had acquired prior to the commencement of his employment.
The employee was terminated for alleged improper conduct and the employer filed a Complaint and Petition for Preliminary Injunction alleging that the employee violated the Non-Solicitation Agreement by improperly contacting and soliciting customers after his termination. The employee admitted that he had contacted or was contacted by the customers at issue; however, the employee maintained that the customers were his own preexisting customers and as a consequence, no violation of the Non-Solicitation Agreement had occurred. The trial court entered an Order granting the employer’s Motion for Judgment on the Pleadings and enjoined the employee from continuing to violate the terms of the Non-Solicitation Agreement by contacting the customers. The employee filed an appeal to the Superior Court of Pennsylvania arguing that the trial court improperly enjoined the employee from engaging in business with customers whom he had developed prior to his employment with the employer.
In Nagle, the court noted that a Pennsylvania Supreme Court decision, Hess v. Gebhard & Co., stands for the proposition that an employer does not have a protectable business interest in pre-existing customers. In addition, Pennsylvania courts have historically viewed such covenants as contracts in restraint of trade that prevent a former employee from earning a livelihood, and, therefore, have disfavored such provisions in the law and that covenants not to compete are strictly construed against the employer. However, the Pennsylvania Supreme Court has also recognized an employer’s right to protect, by a covenant not to compete, its interest in customer relationships acquired through the efforts of its employees, thus, while Pennsylvania law looks with disfavor upon restrictive covenants, covenants may be enforced if (1) they are incident to an employment relationship between the parties; (2) they are supported by adequate consideration; (3) the restrictions imposed by the covenant are reasonably necessary for the protection of legitimate interests of the employer; and (4) the restrictions imposed are reasonably limited in duration and geographic extent. The court found that the issue is whether barring the employee from contacting his preexisting customers is reasonably necessary for the protection of the employer. The court noted that keeping in mind that Pennsylvania law disfavors restrictive covenants, it would be unreasonable to extend the Non-Solicitation Agreement to include personal customers of the employee who came to the customers of the employer solely to avail themselves of the employee’s services and only as a result of his own independent recruitment efforts which were neither subsidized nor financially supported by the employer. As a consequence, the Superior Court reversed the trial court’s Order and remanded the case for further proceedings.
Today, in Socko v. Mid-Atlantic Systems of CPA, Inc., No. 142 MAP 2014, the Supreme Court of Pennsylvania reaffirmed that the enforcement of an employment agreement containing a restrictive covenant not to compete, entered into after the commencement of employment, may be successfully challenged as unenforceable by an employee for a lack of consideration. Such an agreement is unenforceable even where the agreement, by its express terms, states that the parties “intend to be legally bound,” which language implicates the Uniform Written Obligations Act (“UWOA”).
In Socko, while already employed, the employee signed a third, more restrictive Non-Competition Agreement which, by its terms, superseded all prior agreements. Pursuant to the agreement, the employee was not permitted to compete for two years after the termination of his employment in any of the following locations: Connecticut, the District of Columbia, Delaware, Maryland, New Jersey, Pennsylvania, New York, Virginia, West Virginia, or any other jurisdiction in which the employer did business. The Agreement also expressly provided for the application of Pennsylvania law, and stated that the parties intended to be “legally bound.” In Socko, the employee filed a motion for partial summary judgment, asserting that the non-competition clause in the agreement was unenforceable, as it was not supported by sufficient consideration. It was not disputed that the agreement was signed during the course of the employee’s employment and the employee did not receive any benefit or any change in his existing employment status in exchange for signing the new agreement.
The Supreme Court of Pennsylvania noted that while a covenant not to compete may be desirable and justified in some circumstances on the part of an employer, Pennsylvania courts have historically viewed such covenants as contracts in restraint of trade that prevent a former employee from earning a livelihood, and, therefore, have disfavored such provisions in the law. While generally disfavored, Pennsylvania law, however, has recognized the validity and enforceability of covenants not to compete in an employment agreement, assuming adherence to certain requirements. Currently in Pennsylvania, restrictive covenants are enforceable only if they are: (1) ancillary to an employment relationship between an employee and an employer; (2) supported by adequate consideration; (3) the restrictions are reasonably limited in duration and geographic extent; and (4) the restrictions are designed to protect the legitimate interests of the employer. The Court noted as with other contracts, for an employment agreement containing a restrictive covenant to be enforced, consideration is crucial, whether the covenant is entered into prior to, during, or after employment ends. Thus, to be valid, a covenant not to compete must be consummated with the exchange of consideration.
If a noncompetition clause is executed at the inception of the employment, the consideration to support the covenant may be the award of the job itself. A restrictive covenant is not required to be included in the initial employment contract to be valid. However, when a non-competition clause is required after an employee has commenced employment, it is enforceable only if the employee receives new and valuable consideration that corresponds with a benefit or a favorable change in employment status. In Pennsylvania sufficient new and valuable consideration has been found to include a promotion, a change from part-time to full-time employment, a compensation package of bonuses, insurance benefits or severance benefits.
Socko confirms that without new and valuable consideration, a restrictive covenant is unenforceable. More specifically, the continuation of the employment relationship at the time an employer and employee enter into the restrictive covenant is insufficient by itself to serve as consideration for the new covenant, despite the fact that there may be an at-will relationship terminable by either the employer or the employee. As a consequence, in Socko the Court held that in “light of the clear and unambiguous language of the UWOA, and consistent with our prior case law, we reject Mid-Atlantic’s (the employer’s) view and conclude that a contract containing a written express statement of intent to be “legally bound” does not supply the necessary consideration to support the enforceability of an agreement.
Employment law attorneys are frequently retained to advise employees on the enforceability of non-compete agreements / restrictive covenants under Pennsylvania law. In Socko v. Mid-Atlantic Systems of CPA, Inc. 2014 Pa. Super. LEXIS 702 (May 13, 2014), the Superior Court of Pennsylvania recently set forth a thorough analysis of the current state of Pennsylvania non-compete law.
Restrictive covenants not to compete have always been disfavored in Pennsylvania because they have been historically viewed as a restraint on trade that prevents a former employee from earning a living. This follows the principle set forth by the Pennsylvania Supreme Court that contracts in restraint of trade made independently of a sale of a business or contract of employment are void as against public policy regardless of the valuableness of the consideration exchanged therein. Restrictive covenants entered into at the sale of business or a contract to commence employment where none existed previously have been found to constitute consideration supporting that covenant. However, when a restrictive covenant in an employment contract is executed after the beginning of employment relationship, courts have found the agreements unenforceable for lack of consideration.
Forty years ago in Maintenance Specialties, Inc. v. Gottus, 455 Pa. 327, 314 A.2d 279 (Pa. 1974), the Pennsylvania Supreme Court held that restrictive covenants in restraint of trade are enforceable only if the employer satisfies three requirements: (1) the covenant must relate to (i.e., be ancillary to) either a contract for the sale of goodwill or other subject property or to a contract of employment; (2) the covenant must be supported by adequate consideration; and (3) the application of the covenant must be reasonably limited in both time and territory. Each of these requirements must exist before a restrictive covenant is enforceable.
As to the nature of the consideration which is required to support a covenant not to compete, Pennsylvania law requires the presence of “valuable consideration.” Two types of consideration support a restrictive covenant in an employment contract. When the restrictive covenant is contained in the initial contract of employment, consideration for the restrictive covenant is the job itself. When the restrictive covenant is added to an existing employment relationship, however, it is only enforceable when the employee receives a corresponding benefit or change in status. An employee’s continued employment is not sufficient consideration for a covenant not to compete which the employee signed after the inception of his employment, where the employer makes no promise of continued employment for a definite term.
In George W. Kistler, Inc. v. O’Brien, 464 Pa. 475, 347 A.2d 311 (Pa. 1975), the Pennsylvania Supreme Court again found unenforceable a restrictive covenant set forth in an employment contract executed after the employee had previously entered into a binding oral employment agreement and commenced work, without any corresponding benefit or change in job status. In Kistler, the Supreme Court excluded three forms of consideration it found inadequate to support a covenant not to compete. First, the Court held that continued employment does not constitute sufficient consideration even if the employment relationship was terminable at the will of either party. Second, the execution of the employment agreement under seal did not constitute valuable consideration to support the restrictive covenant. Lastly, the recitation of nominal consideration ($1.00) was inadequate consideration for the restrictive covenant. Thus, when an employee enters into an employment contract containing a covenant not to compete subsequent to employment, the covenant must be supported by new consideration which could be in the form of a corresponding benefit to the employee or a beneficial change in employment status.
In Socko, the court held the restrictive covenant was not enforceable because the employer conceded that the non-competition restrictive covenant in an employment agreement was entered into after the commencement of employment, thus, there was a lack of consideration and the employer provided the employee with no benefit or change in job status at the time of execution. The court flatly rejected the employer’s contention that the insertion of language in the agreement which states that the mere insertion of language that the parties “intend to be legally bound” by itself is adequate consideration under the Uniformed Written Obligations Act. Thus, in Socko, the Superior Court of Pennsylvania concluded that the restrictive covenant was unenforceable for lack of valuable consideration.
In De Lage Landen v. Thomasian, 2013 U.S. Dist. LEXIS 62639 (E. D. Pa. May 1, 2013) (Buckwalter, S. J.), the Defendant employee entered into an Employee Agreement with Restrictive Covenants and voluntarily terminated his employment with his former employer, one month after he had accepted an offer to work for a new employer, CoActiv. The employee admittedly breached his Employee Agreement by giving his former employer’s laptop and security credentials to his new employer which he subsequently returned. The Court declined to enter a preliminary injunction, finding that the plaintiff failed to prove irreparable harm (the difficulty in showing that damages can only be adequately compensated by granting an injunction”).
While the court found that the defendant breached a non-solicitation agreement by encouraging one of his former employer’s employees to work for CoActiv, the new employer; Coactive does not compete with the former employer on a national basis and the two companies “are not presently in the same ballpark.” In addition, the Defendant employee’s office was 40 miles from any of his former employer’s regional offices and the employee has not solicited former customers.
In a recent New York federal court case interpreting Pennsylvania law, the court refused to enforce a non-solicitation clause against an employee who was terminated. In Fenner Precision Inc. v. Mearthane Products Corp. 2013 U.S. Dist. LEXIS 15588 (W. D. N. Y. February 5, 2013), the former employee defendant was a salesman in the field of elastomeric precision products for more than 20 years. His original employer was acquired by a new company and he was required to sign a non-compete agreement with a Pennsylvania choice-of-law provision, containing various restrictive covenants, including confidentiality, non-compete, and non-solicitation provisions. The employee was employed by the new employer for 4 years and then was terminated at age 58 without any reason being provided. Thereafter, the employee accepted employment with a competitor of his former employer. The former employer filed a Motion for Preliminary Injunction, not attempting to enforce the non-compete covenant, but instead only seeking to enforce the confidentiality and non-solicitation provisions.
While the Court noted that Pennsylvania law has not expressly resolved whether pure non-solicitation clauses, which do not otherwise prohibit former employees from engaging in a particular occupation or field, should be subject to the test of reasonableness, the court relied upon a Pennsylvania Superior Court decision in Missett v. Hub Intern. Pennsylvania, LLC, 6 A.3d 530, 538-540 (Pa.Super. 2010), finding that a non-solicitation clause must be reasonable to be enforced. In Fenner Precision, the Court relied upon Pennsylvania cases clearly expressing a heightened scrutiny for employees who are terminated by their employers, on the theory that the employer views such employees as “worthless” and concluded that the Defendant employee is likely to prevail in demonstrating that enforcement of the non-solicitation clause against him would not be reasonable and denied the Motion for a Preliminary Injunction.
As we have commented before, there is a clear trend in Pennsylvania law not to enforce restrictive covenants. While they is an extremely positive development for all employees, the benefit of the trend is largely skewed only to high wage earners, due to the high initial costs associated with successfully litigating preliminary injunctions and restrictive covenants.
Employees confronted with non-compete agreements often face an impossible situation. Even though there is an emerging trend in Pennsylvania courts where non-compete agreements are being voided, the cost of litigation often precludes employees from taking affirmative action. A recent Allegheny County case, Bosses v. Servicelink, C. C. P. Allegheny City, G.D. No. 12-012206 (Ward J.), shows that where a Plaintiff has sufficient resources to take affirmative action, a plaintiff’s declaratory judgment may be granted based upon established law.
In Bosses, the plaintiff began working for one company in a clerical position and rose to a Vice President position by the time the company was acquired by another company. At the time of the acquisition, the Plaintiff received a number of documents but did not sign the noncompete agreement until one month later when he was told he would lose his job if he did not sign. Several years later the Plaintiff received a job offer from another company, contingent upon becoming unencumbered by the non-compete.
The Court relied upon many principals Plaintiffs can rely upon to invalidate restrictive covenants: the loss of a business opportunity may be characterized as an irreparable injury, Santoro v. Morse, 781 A.2d 1220, 1227-28 (Pa.Super. 2001); an employee has an important interest in being able to earn a living in his chosen profession.” All-Pak, Inc. v. Johnston, 694 A.2d 347, 351 (Pa.Super. 1997); and restrictive covenants are not favored in Pennsylvania, as they can be seen as a trade restraint preventing a former employee from earning a living. Hess v. Gebhard & Co, 808 A.2d 912, 920 (Pa. 2002). Ultimately, in Bosses, the court cited established law concluding that “a restrictive covenant will not be enforced if no consideration was exchanged for its execution.” Shepherd v. Pittsburgh Glass Works, LLC, 25 A.3d 1233, 1243 (Pa.Super. 2011.
Bosses shows that when an employee has the resources to take affirmative action, established appellate law in Pennsylvania can lead to positive results. Unfortunately, when an employee is not an executive, the end result can be much different, solely as a consequence of not having the resources to take on a well financed corporation. This is a key difference between non-compete litigation and a typical employment discrimination case, where the Plaintiff is solely seeking money damages. Fortunately, Plaintiffs in employment discrimination cases often have the support of attorneys willing to enter into contingency fee agreements which can make the playing field more equal.

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In an action to recover damages for personal injuries, the plaintiff appeals, as limited by her brief, from so much of an order of the Supreme Court, Nassau County (Lally, J.), dated October 7, 2010, as granted the motion of the defendant Great Neck Park District for summary judgment dismissing the complaint insofar as asserted against it.
The plaintiff allegedly slipped and fell on a patch of ice while walking on a sidewalk abutting certain land owned by the defendant Great Neck Park District (hereinafter the Park District).
Contrary to the plaintiff's contentions, the Supreme Court properly granted the Park District's motion for summary judgment dismissing the complaint insofar as asserted against it. "Unless a statute or ordinance clearly imposes liability upon an abutting landowner, only a municipality may be held liable for the negligent failure to remove snow and ice from a public sidewalk" (Hilpert v. Village of Tarrytown, 81 A.D.3d 781, 781, 916 N.Y.S.2d 817; see Smalley v. Bemben, 12 N.Y.3d 751, 880 N.Y.S.2d 878, 908 N.E.2d 868; Schwint v. Bank St. Commons, LLC, 74 A.D.3d 1312, 904 N.Y.S.2d 220; Ferguson v. Shu Ham Lam, 74 A.D.3d 870, 903 N.Y.S.2d 101; Braun v. Weissman, 68 A.D.3d 797, 890 N.Y.S.2d 615). Although the Code of the Village of Great Neck Plaza requires an abutting landowner to remove snow and ice from abutting public sidewalks, it does not specifically impose tort liability for a breach of that duty (see Hilpert v. Village of Tarrytown, 81 A.D.3d at 781, 916 N.Y.S.2d 817).
"In the absence of a statute or ordinance imposing liability, the owner of property abutting a public sidewalk will be held liable only where it, or someone on its behalf, undertook snow and ice removal efforts which made the naturally occurring conditions more hazardous" (id. at 782, 916 N.Y.S.2d 817; see Schwint v. Bank St. Commons, LLC, 74 A.D.3d 1312, 904 N.Y.S.2d 220; Ferguson v. Shu Ham Lam, 74 A.D.3d 870, 903 N.Y.S.2d 101; Braun v. Weissman, 68 A.D.3d 797, 890 N.Y.S.2d 615). Here, while the Park District acknowledged that it undertook certain snow removal efforts on the sidewalk, it established, prima facie, that its snow removal efforts did not create or exacerbate any dangerous condition on the sidewalk (see Hilpert v. Village of Tarrytown, 81 A.D.3d at 782, 916 N.Y.S.2d 817; Krichevskaya v. City of New York, 30 A.D.3d 471, 471, 817 N.Y.S.2d 103; Friedman v. Stauber, 18 A.D.3d 606, 607, 795 N.Y.S.2d 612; see also Urquhart v. Town of Oyster Bay, 85 A.D.3d 899, 900, 925 N.Y.S.2d 609). In opposition, the plaintiff merely speculated that the icy condition was created by snow removal activities that were allegedly undertaken by the Park District five days before the incident occurred. Under the circumstances, speculation regarding the actions taken by the Park District and the results of such actions was insufficient to raise a triable issue of fact to defeat the Park District's motion (see Krichevskaya v. City of New York, 30 A.D.3d at 471, 817 N.Y.S.2d 103; Scher v. Kiryas Joel Hous. Dev. Fund Co., 17 A.D.3d 660, 660, 794 N.Y.S.2d 112; Trabolse v. Rizzo, 275 A.D.2d 320, 320, 712 N.Y.S.2d 401).
Accordingly, the Supreme Court properly granted the Park District's motion for summary judgment dismissing the complaint insofar as asserted against it.

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