Morey v. Doud, 354 U.S. 457 (1957)

Morey v. Doud

No. 475

Argued April 24, 1957
Decided June 24, 1957
354 U.S. 457

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

Syllabus

The Illinois Community Currency Exchanges Act provides for the licensing, inspection, bonding, and regulation of "currency exchanges" engaged in the business of issuing or selling money orders. It forbids them to do business on the premises of any other business, but it exempts from all of its provisions money orders sold or issued by the American Express Co., an old, established, worldwide enterprise of unquestioned solvency and high financial standing, which sells money orders through local drug and grocery stores. Appellees, a "currency exchange" issuing and selling money orders and its agent selling them in his own drugstore, sued to enjoin enforcement of the Act against them on the ground of its unconstitutionality.

Held: application of the Act to appellees denies them the equal protection of the laws guaranteed by the Fourteenth Amendment. Pp. 458-470.

(a) The Equal Protection Clause does not require that every state regulatory statute apply to all in the same business, but a statutory discrimination must be based on differences that are reasonably related to the purposes of the statute. Smith v. Cahoon, 283 U.S. 553. Pp. 465-466.

(b) Moreover, a discrimination cannot be justified by different business characteristics when it has no reasonable relation to those differences. Hartford Co. v. Harrison, 301 U.S. 459. P. 466.

(c) The discrimination in favor of the American Express Co. here involved does not have a reasonable relation to the purposes of the Act, or to different business characteristics. Pp. 466-467.

(d) The effect of the discrimination here involved is to create a closed class by singling out American Express money orders for exemption from the requirements of the Act. Pp. 467-468.

(e) The exemption of its money orders gives the American Express Co. important economic and competitive advantages over appellees. Pp. 468-469.

(f) Taking these factors in conjunction, application of the Act to appellees deprives them of equal protection of the laws. P. 469.

(g) This case need not be remitted to the Illinois courts for a determination whether the exception can be severed from the Act under its severability clause, because the Supreme Court of Illinois has indicated rather clearly that the exception is not severable. Pp. 469-470.

146 F. Supp. 887 affirmed.