DaimlerChrysler Corp. v. Cuno

DaimlerChrysler Corp. v. Cuno
U.S. LEXIS 3956; 74 U.S.L.W. 4233; 06 Cal. Daily Op. Serv. 3931; 2006 Daily Journal D.A.R. 5770; 19 Fla. L. Weekly Fed. S 185
Argument	Oral argument
Case history
Prior	Motion to dismiss granted, 154 F. Supp. 2d 1196 (N.D. Ohio 2001); affirmed in part, reversed, 386 F.3d 738 (6th Cir. 2004); rehearing en banc denied, No. 01-3960, 2005 U.S. App. LEXIS 1750 (6th Cir. January 18, 2005); cert. granted, 545 U.S. 1165 (2006).
Holding
State taxpayers do not have standing under Article III of the U.S. Constitution to challenge state tax or spending in federal court simply by virtue of their status as taxpayers. Sixth Circuit Court of Appeals vacated in part and remanded.
Court membership
Chief Justice John Roberts Associate Justices John P. Stevens · Antonin Scalia Anthony Kennedy · David Souter Clarence Thomas · Ruth Bader Ginsburg Stephen Breyer · Samuel Alito
Case opinions
Majority	Roberts, joined by Stevens, Scalia, Kennedy, Souter, Thomas, Breyer, Alito
Concurrence	Ginsburg (in part and in judgment)
Laws applied
U.S. Const. art. III

DaimlerChrysler Corp. v. Cuno, 547 U.S. 332 (2006), is a

On appeal to the United States Court of Appeals for the Sixth Circuit, the dismissal was affirmed in part, and reversed as to the claims regarding the investment tax credit.^[8] The court ruled that the tax credit violated the Commerce Clause and enjoined its enforcement, because it coerced businesses that were already subject to Ohio's franchise tax to expand locally rather than out-of-state, at the expense of interstate commerce.

Opinion of the Court

The Supreme Court granted

The plaintiffs had principally claimed that they had standing by virtue of their status as Ohio taxpayers, alleging that the investment tax credit injured them by "deplet[ing] the funds of the State of Ohio to which the Plaintiffs contribute through their tax payments" and thus "diminish[ing] the total funds available for lawful uses and impos[ing] disproportionate burdens on" them. The Court had in several prior cases denied federal taxpayers standing under Article III to object to a particular expenditure of federal funds simply because they are taxpayers. The Court believed that the rationales for rejecting federal taxpayer standing applied with equal force to state taxpayers, as a prior case had indicated.^[10] The municipal taxpayer standing established by Mellon was not available in claims that did not involve municipal action, where the plaintiffs challenged a state law and state tax credit.

The Court also observed that there was no standing where the alleged injury was not "concrete and particularized," but was instead suffered "in some indefinite way in common with people generally."^[11] In addition, there is also no standing where the injury is not "actual or imminent," but is instead "conjectural or hypothetical."^[12] The court believed that the plaintiffs' alleged injury was "conjectural or hypothetical," because it required speculation that state legislators would respond to a reduction in revenue caused by the credit (a consequence the Court also found speculative, and unlikely) by increasing the plaintiffs' taxes. Establishing that this injury is redressable would furthermore require speculation that legislators would pass along the increase in revenue resulting from the abolition of the tax credit in the form of tax reductions to the plaintiffs. "Neither sort of speculation suffices to support standing."

Analogy to Establishment Clause challenges

The Court rejected the argument that an exception for Commerce Clause challenges to state tax or spending decisions should exist, as an analogy to the Establishment Clause taxation challenge the Court had permitted in Flast v. Cohen, 392 U.S. 83 (1968), because both constitutional clauses operate as a specific limit on the Taxing and Spending Clause.^[13] The Court explained that the right not to contribute money for the support of a religious establishment was "fundamentally unlike" whatever rights the plaintiffs may have under the Commerce Clause, and the comparison the plaintiffs attempted was "at such a high level of generality that almost any constitutional constraint on government power would 'specifically limit' a State's taxing and spending power for Flast purposes." The injury alleged in Flast was instead the specific extraction of money from the plaintiff to spend in aid of a religion, an injury that could be redressed by an injunction, in contrast to that alleged in this case.

Ginsburg's concurrence

Justice Ruth Bader Ginsburg filed a separate concurring opinion, in which she concurred in the Court's judgment, which she believed to be based on longstanding precedent, and in the balance of its opinion. However, she wrote separately to express a "large reservation" to the further limitations on standing that the Court had adopted in decisions dating from the late 1970s through the early 1990s,^[14] which she believed were not necessary to support the Court's ruling.

Footnotes