Paul v. Virginia
| Paul v. Virginia | |
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| Argued October 8, 12, 1869 Decided November 1, 1869 |
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| Full case name | Samuel Paul v. Virginia |
| Citations | 75 U.S. 168 (more)
75 U.S. (8 Wall) 168; 19 L. Ed. 357; 1868 U.S. LEXIS 1092
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| Holding | |
| A corporation is not a citizen within the meaning of the Privileges and Immunities Clause and issuing a policy of insurance is not a transaction of commerce. | |
| Court membership | |
| Case opinions | |
| Majority | Field, joined by unanimous |
| Laws applied | |
| U.S. Const. Art. I, § 8. and U.S. Const. Art. IV, § 2 | |
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Overruled by
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| United States v. South-Eastern Underwriters Ass'n, 322 U.S. 533 (1944) | |
Paul v. Virginia, 75 US 168 (1869), is a US corporate law case, of the United States Supreme Court. It held that a corporation is not a citizen within the meaning of the Privileges and Immunities Clause. Of greater consequence, the Court further held that "issuing a policy of insurance is not a transaction of commerce," effectively removing the business of insurance beyond the United States Congress's legislative reach.
In the 19th century, the insurance business was exclusively regulated by the states, individually. As a result, a patchwork of separate regulations proliferated to the dismay of insurance companies which sought uniform regulation across states. In an effort to promote federal regulation of the insurance industry, a number of New York insurance companies orchestrated a test case to try to invalidate state regulation. On February 3, 1866, the legislature of Virginia had passed a statute provided that an insurance company not incorporated under the laws of the state should not carry on its business within the State without previously obtaining a license for that purpose and that it should not receive such license until it had deposited with the treasurer of the state bonds in an amount varying from thirty to fifty thousand dollars.
In May 1866, Samuel Paul, a resident of the Commonwealth of Virginia, was appointed the agent of the New York insurance companies, to carry on the general business of insurance against fire. He then applied for a license to act as such agent within the state, offering at the time to comply with all the requirements of the statute with the exception of the provision requiring a deposit of bonds with the treasurer of the state. Based on his failure to comply with the requirements of the statute, the license was refused. Notwithstanding this refusal he undertook to act in the State as agent for the New York companies without any license.
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