Also known as: legitimate business purposes · business purpose · legitimate purpose
Written by attorneys · grounded in primary & secondary sources — see below
A valid non-pretextual reason for governmental or private action that advances a genuine interest of the actor or entity. The reason must stand independent of forbidden motives such as invidious discrimination and must be rationally related to the action taken.
Select any source to read its text and confirm it supports the definition.
State officials defend a statute prohibiting interracial marriage by citing traffic-safety data and administrative convenience. A couple denied a license sues. The court rejects the defense because the stated reasons mask racial animus and supply no independent legitimate purpose.
A motel refuses rooms to Black travelers and claims the policy protects white guests' comfort. The court finds the asserted purpose illegitimate because it rests on racial prejudice rather than any neutral business justification.
Voters enact a constitutional amendment that bars any local law protecting gay people from discrimination. The state defends the measure as preserving majoritarian control. The court strikes it down because the amendment lacks a legitimate purpose and instead imposes a broad disability on one group.
A parent corporation merges its partially owned subsidiary and pays minority shareholders cash. The parent asserts the transaction streamlines operations. Minority shareholders challenge the merger. The court upholds the transaction after finding the asserted streamlining goal constitutes a legitimate business purpose.
A controlling shareholder forces a cash-out merger of the remaining public shares. The controller cites cost savings from going private. Minority shareholders sue. The court requires the controller to prove the cost-saving rationale is a legitimate business purpose that could not be achieved by less harmful means.
A city condemns waterfront homes to assemble land for a private developer who promises new jobs and tax revenue. Homeowners object. The court upholds the takings because the city's plan to create employment and increase tax base supplies a legitimate public purpose.
The controlling group must first articulate a genuine business objective such as cost reduction or operational efficiency. The minority shareholder may then show that the same objective could have been achieved by a less harmful alternative. The court balances the strength of the asserted purpose against the availability of the alternative.
Supporting sources
No. In false imprisonment or trespass claims, a business or investigatory motive does not negate the intent element. The actor remains liable if the conduct meets the tort's elements even when the actor claims the conduct served a legitimate business purpose.
…467 U. S., at 245 ("A purely private taking could not withstand the scrutiny of the public use requirement; it would serve no legitimate purpose of government and would thus be void"); Missouri Pacific R. Co. v. Nebraska , 164 U. S. 403 (1896).[^maj-5] Nor would the City be allowed to take property under the mere pretext of a…
…§ 202.01, reprinted in 3 CCH Fed. Sec. L. Rep. ¶ 23,515 (1987) (premature public announcement may properly be delayed for valid business purpose and where adequate security can be maintained); American Stock Exchange Company Guide §§ 401-405, reprinted in 3 CCH Fed. Sec. L. Rep. ¶¶ 23,124A-23, 124E (1985) (similar provisions). It…
…justifications that we find it impossible to credit them. We cannot say that Amendment 2 is directed to any identifiable legitimate purpose or discrete objective. It is a status-based enactment divorced from any factual context from which we could discern a relationship to
…the most troubling component of the Hoffman posts, as they appeared in the indictment, was the reference to Hoffman’s cat. What legitimate purpose
…judgment presumptions are applicable, the board’s decision will be upheld unless it cannot be 'attributed to any rational business purpose
Supporting sources
A corporation may include former employees or agents who retain specialized knowledge and occasional access to facilities if the board documents that the grants serve to retain expertise and align incentives. The plan must fall within the statutory grant of authority to create incentive arrangements for current or former directors, officers, employees, and agents.
Supporting sources
The city must show that the taking serves a valid public use such as creating jobs or increasing tax revenue. A plan that transfers property from one private owner to another solely for private gain fails the test, but a comprehensive development plan that produces public benefits satisfies the requirement.
Supporting sources