Travelers Health Assn. v. Virginia, 339 U.S. 643 (1950)

Travelers Health Association v. Virginia

No. 76

Argued November 15, 1949
Reargued April 17, 1950
Decided June 5, 1950
339 U.S. 643

APPEAL FROM THE SUPREME COURT OF APPEALS OF VIRGINIA

Syllabus

In a proceeding under § 6 of the Virginia "Blue Sky Law," the State Corporation Commission ordered an Association, located in Nebraska and engaged in the mail order health insurance business, and its treasurer (appellants here) to cease and desist from further offerings or sales of certificates of insurance to Virginia residents until the Association had complied with the Act by furnishing information as to its financial condition, consenting to suit against it by service of process on the Secretary of the Commonwealth, and obtaining a permit. Notice of the proceeding was served on appellants by registered mail, as authorized by § 6 when other forms of service are unavailable. They appeared specially, challenged the jurisdiction of the State, and moved to quash the service of summons. On recommendations from Virginia members, the Association for many years had been issuing insurance certificates to residents of Virginia, and it had approximately 800 members there. It had caused claims for losses to be investigated, and the Virginia courts were open to it for the enforcement of obligations of certificate holders.

Held:

1. The State has power to issue a cease and desist order to enforce at least the requirement that the Association consent to suit against it by service of process on the Secretary of the Commonwealth. Pp. 646-647.

2. The contacts and ties of appellants with Virginia residents, together with that State’s interest in faithful observance of the certificate obligations, justify subjecting appellants to cease and desist proceedings under § 6. Pp. 647-648.

3. Virginia’s subjection of the Association to the jurisdiction of the State Commission in a § 6 proceeding is consistent with fair play and substantial justice, and is not offensive to the Due Process Clause of the Fourteenth Amendment. P. 649.

4. The power of the State to subject the Association to the jurisdiction of the State Commission and to authorize a cease and desist order under § 6 is not vitiated by the fact that business activities carried on outside of the State are affected. P. 650.

5. Service of process on appellants by registered mail did not violate the requirements of due process. Pp. 650-651.

188 Va. 877, 51 S.E.2d 263, affirmed.

An order of the Virginia Corporation Commission requiring appellants to cease and desist from offering and issuing, without a permit, certificates of insurance to residents of the State, was affirmed by the Supreme Court of Appeals. 188 Va. 877, 51 S.E.2d 263. On appeal to this Court, affirmed, p. 651.