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Hall v. Geiger-Jones Co. - 242 U.S. 539, 37 S. Ct. 217 (1917)

Rule:

The Ohio blue sky law, Ohio Rev. Code Ann. § 6373-1 to -24, is a restraint upon the disposition of certain property, and requires dealers in securities evidencing title to or interest in such property to obtain a license. 

Facts:

Under the blue sky laws, brokers who disposed of securities within Ohio were to be licensed to do so. To obtain a license, a designated executive officer needed to be satisfied of the good business repute of the applicants and their agents, and licenses, when issued, could be revoked by him upon ascertaining that the licensees were of bad business repute, violated any provision of the act, or engaged in illegitimate business or fraudulent transactions. Appellee Geiger-Jones Co. filed an action in against appellant Hall, the Superintendent of Banks and Banking of the State Of Ohio, seeking to enjoin enforcement of Ohio's blue sky laws. The district granted the injunctive relief. Hall appealed.

Issue:

Were Ohio's blue sky laws properly enjoined?

Answer:

No.

Conclusion:

The Supreme Court of the United States reversed the district court's judgment and remanded the matter for further proceedings. The Court ruled that the powers conferred to Hall were not arbitrary or violative of the due process clause of U.S. Const. amend. XIV. Moreover, the blue sky laws did not interfere with interstate commerce and, therefore, did not violate the commerce clause. According to the Court, such regulation affected interstate commerce in securities only incidentally.

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