Louis K. Liggett Co. v. Lee

In Louis K. Liggett Co. v. Lee (1933), the Supreme Court upheld a Florida law taxing chain stores at higher rates than independent businesses, ruling that states may use such taxes to protect local merchants. However, the Court struck down a provision that imposed extra taxes on chains operating in multiple counties, finding it arbitrary and a violation of equal protection. The case is notable for Justice Brandeis's dissent, which warned that states competing for corporate business had created a "race... not of diligence, but of laxity," and criticized the growing power of large corporations. ==Judgment==

The majority of the Supreme Court, with the opinion delivered by Roberts J, held that § 5 of the Florida Act, which increased tax if stores were present in more than one county, was unreasonable and arbitrary and violated the Equal Protection Clause. Justice Brandeis dissented. He agreed with the race to the bottom theory of corporate law, proposed by Adolf Berle and Gardiner Means in The Modern Corporation and Private Property (1932). ==See also==