Terms:

Venue:
The appropriate venue in which to file suit is the county, city, state, or area in which a court has jurisdiction to hear the case. Just as multiple courts may have jurisdiction over a case, there may be several suitable venues.

Foreign Corporation:
A corporation formed under the laws of State X is considered a foreign corporation in State Y. This does not necessarily denote a corporation formed under the laws of some country other than the United States, and usually is not used to refer to such non-U.S. companies.

As discussed above, the most limited level of review to which a law can be subjected under Equal Protection analysis is "rational basis" review. This standard of review is applied when the classification in the law is “nonsuspect”. At this level, great deference is given to the legislature’s decision to use the classification to bring about some legitimate state goal. So long as the classification is not “purely arbitrary,” the law will be upheld, even if “in practice it results in some inequity.” See Lindsley v. Natural Carbonic Gas Co., 220 U.S. 61, 68 (1911).

In Idaho Department of Employment v. Smith, 434 U.S. 100, 101 (1977), the Court put it quite nicely:

"[Following are] the requirements of the Equal Protection Clause in the field of social welfare and economics. This Court has consistently deferred to legislative determinations concerning the desirability of statutory classifications affecting the regulation of economic activity and the distribution of economic benefits. If the classification has some reasonable basis, it does not offend the Constitution simply because the classification is not made with mathematical nicety or because in practice it results in some inequality."

In other words, the standard of review for general legislation regarding social welfare and economics is the rational basis test. In addition, many might be surprised to discover that discriminatory laws which classify on the basis of age or sexual orientation and laws which treat the disabled differently are subjected only to the weaker "rational basis" test and not strict scrutiny or even intermediate scrutiny, as these are neither suspect nor quasi-suspect classifications. So long as laws which make use of these classifications are rationally related to some legitimate state purpose they will not be struck down as Equal Protection violations.

In Idaho Dep’t of Employment, the statute in question denied unemployment benefits to people who were otherwise eligible but who chose to attend school during the day. Similarly situated citizens who chose to attend school at night were still able to receive their unemployment benefits. The Supreme Court of Idaho struck down the law as an Equal Protection violation. However, the U.S. Supreme Court disagreed, finding the classification was rationally related to a legitimate state purpose. After all, it is easier to find employment during the day than during the night, and therefore, the choice to attend school during the day limits the chance of finding a job. The state legislature’s choice to offer unemployment benefits only to those citizens who maximized their chances of finding work (by not making themselves unavailable to work during the day) was a legitimate goal. So the Idaho law, while discriminating against people who attend school during the day for purposes of unemployment eligibility, did not violate the Equal Protection clause.

EXAMPLE: Massahampshire passes a law requiring all pubic universities to develop standards for the instructional workloads carried by their professors. The law dictates that those standards are not subject to collective bargaining, thus creating a class of public employees who could not bargain regarding their workload. All other public employees in Massahampshire can negotiate their workload through the collective bargaining process. Because the law is rationally related to a conceivable, legitimate state purpose, (increasing the time faculty members spend in the classroom) it would pass rational basis review, which is appropriate, given the law’s regulation of an economic or social welfare issue and the nonsuspect classification involved. See Central State University v. American Association of University Professors, 526 U.S. 124 (1999).

EXAMPLE: A Montana statute, as interpreted by its courts, allows anyone to sue an out-of-state corporation in any county in Montana but requires that a suit brought against a corporation formed under the laws of Montana be brought only in the county where that corporation has its principal place of business. This discrimination based on the classification of out-of-state corporations as distinguished from local corporations will be subject to the rational basis test as a nonsuspect classification. See Burlington Northern Railroad Co. v. Ford, 504 U.S. 648 (1992).

In Burlington Northern Railroad, the Montana venue statute might at first appear to discriminate against out-of-state corporations. After all, they are subject to suit in more counties in the state than are local corporations. The issue in that case, however, was the relative inconvenience of being sued in a given location. A local company would certainly be more inconvenienced by being sued in a distant county than if it were sued in the location of its principal place of business. A foreign corporation, however, will be equally inconvenienced no matter where in Montana the suit is heard.

Although state residency is not a suspect classification, and therefore is subject to only the rational basis test, laws which use such classifications to discriminate against out-of-staters will often be struck down under this mild test as pursuing an illegitimate purpose. Earlier, in Subchapter 1, we saw how discriminating against out-of-state corporation in favor of local companies could run awry of the Fourteenth Amendment. See Metropolitan Life Insurance Co. v. Ward, 470 U.S. 869 (1985). Discriminating against people who are residents of other states in favor of state citizens is also an impermissible state goal and statutes which discriminate based on residency will be struck down. See Hooper v. Bernalillo County Assessor, 472 U.S. 612 (1985). See also Zobel v. Williams, 457 U.S. 55 (1982).

EXAMPLE: New York decides that the recent difficulties experienced by local firefighters and police officers might be helped by granting their families a tax exemption for several years. Since the legislature’s intent is to help those families who were affected by the terrorist attacks of September 11, 2001, the exemption is limited to those families who resided within New York State prior to September, 2001. This award of benefits certainly falls within the “social welfare or economic” realm, and the classification is not itself suspect, so the rational basis test applies. Discriminating against those families who were out-of-staters at a certain time, however, is not a legitimate state objective and the law will likely be struck down.