Tuesday, May 16, 2006

Supreme Court decision in DaimlerChrysler v. Cuno

The Supreme Court yesterday dismissed the case which might have determined whether Ohio tax incentive program didn’t violate the U.S. Constitution’s so-called “commerce clause,” but did so because of plaintiff’s inability to establish standing.

Originally filed in Lucas County’s Court of Common Pleas, the case was removed to the district courts on the presumption that plaintiffs’ constitutional challenges to respective statutes made it a federal question. Plaintiffs then moved to remand to the state courts, but that was denied and the District found on the merits of the case that neither of Ohio’s tax benefit programs violated the Constitution’s “commerce clause.” That decision was appealed to the 6th. Circuit Court of Appeals, being argued in Feb. 2003. That court, “without addressing the matter of standing,” according to the Supreme Court’s syllabus, “agreed as to the municipal tax exemption’s being valid, but held that the state’s franchise tax credit did violate the commerce clause,” The issue was then advanced to the Supreme Court, with defendants seeking a review of the invalidation of the franchise tax credit, and plaintiffs a review of the upholding of the property tax exemption.

The Supreme Court in granting the writ for certiorari on Sept. 27, 2005, specified that in addition to the questions presented by petition, parties were also directed to brief and argue whether they in fact had standing to challenge the investment tax credit. As it turned out, the Court decided the plaintiffs weren’t able to establish that standing.

Ohio Governor Robert Taft issued the following statement.

We’ve had several postings on this case over the past three years as well which might prove interesting. (See Sept. 17, 2004; Aug. 2, 2005; March 20, 2006).

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