## Facts

- An out-of-state bank holding company sought to operate an investment management subsidiary in Florida to provide investment advisory services to the public.
- Florida law was amended after opposition from in-state financial interests to bar out-of-state banks, bank holding companies, and trust companies from owning or controlling Florida businesses selling investment advisory services.
- The Federal Reserve Board denied the company’s proposal, concluding the amended Florida statute prohibited the planned Florida operation.
- The company sued Florida officials for declaratory and injunctive relief, alleging the statutes unconstitutionally discriminated against interstate commerce.
- The district court ruled the challenged Florida provisions violated the Commerce Clause and issued declaratory relief as to both provisions, while enjoining enforcement of the investment-advisory restriction.
- Florida’s Comptroller appealed directly to the U.S. Supreme Court.

## Issues

1. Whether Florida’s ban on out-of-state banks, bank holding companies, and trust companies owning or controlling businesses selling investment advisory services facially discriminates against interstate commerce in violation of the Dormant Commerce Clause.
2. Whether the combined operation of Florida’s investment-advisory restriction and its limits on trust and fiduciary functions unlawfully excludes out-of-state financial firms from Florida markets.
3. Whether the Bank Holding Company Act of 1956 authorizes or immunizes Florida’s discriminatory scheme from Dormant Commerce Clause review.

## Decision

- The Supreme Court affirmed the district court’s judgment.
- The Court held Florida’s investment-advisory restriction directly burdened interstate commerce and violated the Dormant Commerce Clause.
- The Court characterized the statute as protectionist because it overtly barred out-of-state banking organizations from competing in local investment-advisory markets, while permitting in-state institutions to do so.
- The Court held the Bank Holding Company Act did not authorize the discriminatory treatment and therefore did not save the Florida statutes from constitutional invalidation.
- The declaratory relief against both provisions and the injunction against enforcement of the investment-advisory restriction remained in effect.

## Legal Principles

- The Dormant Commerce Clause prohibits state economic protectionism that benefits in-state interests by burdening out-of-state competitors.
- Facial discrimination against interstate commerce is presumptively invalid and can be upheld only if the state shows a legitimate objective unrelated to protectionism and that the discrimination is necessary because reasonable, less discriminatory alternatives are unavailable.
- Banking and related financial services, though subject to local regulation, have interstate attributes sufficient to trigger Dormant Commerce Clause constraints.
- Federal banking statutes do not displace Dormant Commerce Clause limits absent clear congressional authorization for the specific discriminatory state measure.

## Conclusion

Florida’s statutory scheme, which barred out-of-state banking organizations from controlling investment-advisory businesses (and worked with related provisions to reserve key financial functions to in-state institutions), was unconstitutional discrimination against interstate commerce, and federal bank-holding-company law did not permit or justify that discrimination.


Lewis v. BT Inv. Managers, Inc., 447 U.S. 27 (1980)