Daimler Chrysler Corporation v. Cuno, 547 U.S _ 2006. This is a case decided by the Supreme of the United States of America. In this case a group of plaintiff including Toledo resident who pay State and local taxes sued in State court, alleging that the tax breaks violated the commerce clause. The tax payer plaintiffs claimed injury because the tax breaks depleted the State and local treasuries to which they contributed.
Defendants removed the action to District Court. Plaintiffs moved to remand to State Court because inter alia, they doubted whether they satisfied either the constitutional or prudential limitations on standing in federal court. The District court refused to remand the case, concluding that plaintiffs had standing under the municipal taxpayer standing” rule articulated in Massachusetts v. Mellon 262 U.S 447.
On the merits the court found that neither tax benefit violated the commerce clause. Without addressing standing, the sixth circuit agreed as the municipal tax exemption, but held that the state franchise tax credit violated the commerce. Defendants sought certiorari to review the upholding of the property tax exemption.This court granted review to consider whether the franchise tax credit violates the commerce clause, and directed the parties to address the issue of standing.
In this case the court unanimously ruled that state tax payers did not have standing under Article III of the United States constitution to challenge State tax or spending decision simply by virtue of their status as taxpayers. Chief Justice Roberts John delivered the majority ruling.Dissenting to the ruling was Ruth Bador Ginsburg.
In this ruling the Supreme Court relied on Article III of the constitution of the United States of America. According to the judgement, taxpayers have no power to challenge state authorities on how to handle state tax in their capacity as taxpayers.
On majority opinion, the court stated that the power of federal courts to engage in judicial review was limited by the requirement that the case be an actual case or controversy under Article III. “If a dispute is not a proper case or controversy, the courts have no business deciding it, or expounding the law in the course of doing so “Despite the plaintiffs previous position regarding standing and the propriety of the federal court forum or their case, the court furthermore stated that because the plaintiff were now asserting standing, the burden was on them to establish it.
Bibliography
Terry M. Dworkin and Eric L. Richards, LAW FOR BUSINESS, 9th ed., Boston: McGraw Hill/Irwin, 2005.