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Monday, May 15, 2006

Law - Two significant U.S. Supreme Court decisions today; important air review granted

Two cases out of Ohio, DaimlerChrysler Corp. v. Cuno, 04-1704, and Wilkins v. Cuno, 04-1724, involved the issue of the state using tax incentives for economic development. The ILB has had several entries on this challnge.

From an early AP report:

In a victory for business, the Supreme Court on Monday rebuffed the efforts of a group of taxpayers in Toledo, Ohio, to challenge nearly $300 million in tax breaks for DamilerChrysler AG's new Jeep plant.

Chief Justice John Roberts said in the 9-0 decision that the alleged injury to the taxpayers was mere conjecture and that they had no standing to challenge tax or spending decisions "simply by virtue of their status as taxpayers."

DaimlerChrysler called the ruling "a big win for America" and said Congress and the states should seek legislation to reinforce the ability to use tax incentives as a tool to compete for investment and jobs. * * *

Business groups and lawmakers in several states said in friend-of-the-court filings that a ruling against Ohio and DaimlerChrysler would hurt economic development throughout the nation and put U.S. manufacturing at a disadvantage against foreign competitors.

Peter Enrich, an attorney for the taxpayers, said the decision "simply sends us back to the Ohio state courts, where we began six years ago." Enrich, a Northeastern University law professor, said "tax giveaways" similar to Toledo's cost states and municipalities around the country billions of dollars that could be better spent on education and other publicly financed programs.

In an earlier ruling in favor of the taxpayers, the 6th U.S. Circuit Court of Appeals struck down Ohio's tax credit on new equipment, saying the practice hinders interstate commerce because the incentives are available only to businesses that invest in Ohio.

To lure a $1.2 billion Jeep assembly plant to the area, the city of Toledo and two local school districts gave the company a 10-year exemption from property taxes, and the company received additional investment tax credits against the state's corporate franchise tax.

The court disagreed with the taxpayers' argument that their local and state tax burdens were increased by the tax breaks.

"A taxpayer-plaintiff has no right to insist that the government dispose of any increased revenue it might experience as a result of his suit by decreasing his tax liability or bolstering programs that benefit him," the chief justice wrote. "To the contrary, the decision of how to allocate any such savings is the very epitome of a policy judgment."

A core constitutional concept is that someone filing a lawsuit must allege personal injury that is traceable to the defendant's allegedly unlawful conduct and is likely to be redressed by the requested relief.

The Toledo taxpayers also claimed standing by virtue of being municipal taxpayers, but such an argument is "yet another level of conjecture to their already hypothetical claim of injury," Roberts wrote.

In all, DaimlerChrysler received nearly $300 million in property and investment tax benefits.

The Court also decided a Clean Water Act case, S.D. Warren Co. v. Maine Board of Environmental Protection, but I hope to find a better summary than this one from the AP.

In addition, the Court today agreed to hear next term Environmental Defense v. Duke Energy Corp., 05-848. Here is a good write-up on the grant from the AP. A quote:
The case involves the Bush administration's attempts in 2002 and 2003 to rewrite the Environmental Protection Agency's "new source review" regulations under 1977 amendments to the Clean Air Act.

Those regulations said that older industrial facilities - such as aging coal-fired power plants, refineries, smelters, and chemical and manufacturing plants - must install state-of-the-art equipment if they expand or modernize in a way that results in significantly more air pollution.

Posted by Marcia Oddi on May 15, 2006 03:55 PM
Posted to Environment | General Law Related