Breaking News

Opinion recap: The near-end of “taxpayer standing”

Along with an essay suggesting that courts (including, the Supreme Court) sometimes decide too much constitutional law, the Supreme Court by a 5-4 vote came very close on Monday to taking away altogether the right of taxpayers to go to court to challenge government programs that provide financial aid to religion — in this case, indirect state subsidies that go most often to pay for parochial school tuition.  While the Court left in the books its most important ruling on “taxpayer standing,” the 1968 precedent in Flast v. Cohen, that ruling appeared to stand alone, in stark and even threatened isolation.

The dissenters complained, perhaps without exaggeration, that “today’s opinion enables the government to end-run Flast‘s guarantee of access to the Judiciary.” In addition, the decision rewarded — at least in a symbolic way — the Obama Administration’s sweeping claim in this case that practically all of the Supreme Court’s “taxpayer standing” decisions had been wrong.

One practical implication of the new decision was the obvious survival of Arizona’s 14-year-old program of giving individual taxpayers a dollar-for-dollar credit on their state taxes when they make contributions to private, non-profit groups that provide scholarships to private school students.   The program has been under challenge in state and federal courts from its beginning, but has been in effect since 1999; the largest organizations that hand out the subsidized scholarships do so for parochial students.  The Ninth Circuit Court ruled that the program would fail constitutionally if it actually went to trial, but now there is no apparent candidate eligible to pursue such a challenge.

In broader terms, the Court’s decision appeared certain to encourage those who support parochial education to seek far wider adoption of the tax credit approach in order to channel money to often cash-strapped parochial schools.

The key to the Court majority’s opinion, written by Justice Anthony M. Kennedy, is that there is a clear-cut distinction between taxpayer lawsuits that challenge direct government spending to aid religion (still allowed, apparently, but perhaps only in the narrowest way), and lawsuits that challenge the use of a tax credit as an indirect way of channeling government tax revenues into parochial education (possibly, no longer allowed).   The Court majority accepted the theory of the Arizona program’s supporters that the money that was going to the subsidized scholarships was not actually state tax revenues, but the donations of the taxpayers who put up the money — and then got a dollar-for-dollar cut in their state taxes.  Further, the Court said the channeling of the money imposed no tax burden on the taxpayers who sued to challenge the program. The opinion asserted that its understanding of the limited opportunity for taxpayers to sue to challenge subsidies to religion could be traced directly to limitations in the Flast v. Cohen precedent.

While the majority said that some who object to government aid to religion may still be able to sue, based on a different theory of constitutional law, it did not leave any opening for a taxpayer to do so unless the specific lawsuit could fit within the narrow confines of the Flast decision as the majority understood that precedent.

Kennedy’s opinion was joined in full by Chief Justice John G. Roberts, Jr., and Justices Samuel A. Alito, Jr., Antonin Scalia and Clarence Thomas.  Scalia, in a separate opinion joined by Thomas, said he would go further, and simply overrule Flast v. Cohen as “misguided.”  The fact that they said that in a separate opinion reinforced the conclusion that the Kennedy opinion did leave that precedent intact, but without much chance of ever again being used successfully against a subsidy, especially if legislatures take the hint and use the tax credit approach instead of the direct spending mode.

In both the opening and closing portions of the Kennedy opinion, the Court majority counseled lower courts about staying within the Constitution’s limits on the decision-making powers of the federal courts to actual “cases or controversies” — that is, cases in which someone complaining about a government program has to show that they, personally, would suffer some very specific harm, and that only a court could relieve it.   Judicial decrees, Kennedy wrote, gain legitimacy from the sparing use of judicial power.

The Court’s newest Justice, Elena Kagan, wrote for the four dissenters.   She accepted the view of the challengers that the Arizona program, in fact, uses public tax revenues to subsidize parochial tuition.  Since the program’s origin, her opinion said, it “has cost the state…nearly $350 million in diverted tax revenues.”  The decision, she said, “devastates taxpayer standing” in cases involving claims that the government is breaching the constitutional wall of separation between religion and government.  She accused the majority of seriously misinterpreting, and “ravaging,” the Flast precedent.  “In not a single non-trivial respect could the Flast Court recognize its handiwork in the majority’s depiction.”

The dissenting opinion said the majority had manufactured a new distinction between direct spending subsidies and aid to religion through tax credits.  That conclusion, Justice Kagan wrote, “has as little basis in principle as it has in our precedent….Taxpayers pick up the cost of the subsidy in either form….What is a cash grant today can be a tax break tomorrow.”  The majority opinion, Kagan said, allows a taxpayer to challenge a grant, but not a tax break, but she argued that a tax break is just another form of a “tax expenditure.”

Joining in the dissent were Justices Stephen G. Breyer, Ruth Bader Ginsburg and Sonia Sotomayor.

The combined cases were Arizona Christian School Tuition Organization v. Winn, et al. (09-987) and Garriott v. Winn, et al. (09-991).

In other actions on Monday, the Court agreed to rule on the constitutionality of a local police department practice of strip-searching everyone who is arrested, no matter how minor the offense involved (Florence v. Board of Chosen Freeholders of Burlington County, 10-945), and agreed to clarify when a decision by the Supreme Court on a issue of criminal law is to be treated as “clearly establishing” what the law is for purposes of applying it in state criminal cases that are taken on to federal courts in habeas pleas (Greene v. Fisher, 10-637).

In addition, the Court agreed to allow the state of Kansas to file a lawsuit, directly in the Supreme Court rather than in lower courts, to make the claim that its neighbor, Nebraska, is drawing too much water out of a river that they share — the Republican River.  Uses of the waters of the Republican are supposed to be controlled by a 1943 interstate compact, but Kansas has argued that Nebraska is taking more than its share, usually for irrigation purposes.  Kansas wants the Court to hold Nebraska in contempt for its alleged actions, and to pay to Kansas the profits it has made from those alleged violations.

The Court said the case could proceed, and it named William J. Kayatta, Jr., a Portland, Maine, as Special Master to act as a kind of advisory judge to make a recommendation on how to decide the case.  Usually, such “original” cases take several years to reach a conclusion.  The new case is Kansas v. Nebraska, et al. (126 Original).

Kayatta is an experienced trial and appellate attorney for the Portland firm of Pierce Atwood.  After taking his law degree at Harvard, he was a law clerk to the late Circuit Judge Frank M. Coffin of the First Circuit.



Recommended Citation: Lyle Denniston, Opinion recap: The near-end of “taxpayer standing”, SCOTUSblog (Apr. 4, 2011, 11:26 AM),