First American Title Insurance Company and Old Republic National Title Insurance Company v. Carole Keeton Strayhorn, Comptroller of Public Accounts of the State of Texas and Greg Abbott, Attorney General of the State of Texas
First American Title Insurance Company and Old Republic National Title Insurance Company, foreign title insurers in Texas, challenged the Comptroller's revised interpretation of retaliatory tax calculations. The new interpretation allowed insurers to include only 15% of the premium tax paid, instead of 100%, in determining their financial burden for retaliatory tax purposes, arguing that title agents bore the remaining 85%. The companies claimed this interpretation was incorrect and unconstitutional, leading to significantly higher taxes for foreign insurers. The district court granted summary judgment in favor of the Comptroller. The Court of Appeals affirmed the judgment, finding the Comptroller's interpretation reasonable, consistent with the statutes, and constitutional, as it served the legitimate governmental purpose of deterring other states from imposing excessive taxes on Texas-based insurers.