SWOPblogger

Supremes Rule Narrowly on Cuno

The U.S. Supreme Court yesterday ruled 9-0 that the taxpayer plaintiffs in Cuno v. DaimlerChrysler did not have standing – or the right to sue – in federal court. (The plaintiffs had not sued in federal court to begin with; it was the defendants who insisted on taking the case there.) The U.S. Court of Appeals for the Sixth Circuit had ruled in 2004 that an investment tax credit given to DaimlerChrylser by the state of Ohio violated the Commerce Clause of the U.S. Constitution. However, the Supreme Court did not rule yesterday on the Commerce Clause issue. The case now goes back to Ohio state court, where standing rules are more permissive. The plaintiffs have vowed to persevere on both state claims and on the federal Commerce Clause theory.

Greg LeRoy, executive director of Good Jobs First, today issued the following statement concerning the decision:

“This is a narrow, technical victory for DaimlerChrysler only on standing. It is also a lost opportunity for the U.S. economy. A positive decision could have fostered a fresh new debate on how to curb the economic war among the states and get back to basics such as skills and infrastructure that really do create good jobs. The Supreme Court did not rule on the Commerce Clause issue at the heart of the case. But sooner or later, it will undoubtedly need to decide whether discriminatory tax breaks impede interstate commerce, as the Sixth Circuit said they do.

“This issue is not going away. By every measure I see, there is growing public concern about the need to rein in wasteful corporate tax giveaways. Increasingly, people understand that globalization makes these state-versus-state episodes more irrelevant and wasteful than ever. More states and cities are enacting economic development safeguards such as disclosure, clawbacks and job quality standards. Local organizing for community benefits agreements continues to grow. Attendance at smart growth conferences is surging, and more people are learning that regional cooperation for economic development needs to replace the war among the suburbs. People understand that the Baby Boom generation’s imminent departure and our nation’s decaying infrastructure beg for reinvestment in public goods and services instead of corporate tax giveaways. They also realize that massive federal deficits mean federal aid for economic development will continue to decline, forcing states to do more with less.

“I admire the plaintiffs and recall their outrage after hearing the case argued on March 1st. How dare anyone say we were not harmed and therefore lack standing, they asked. One lost a small business to eminent domain. Another has three grandchildren suffering in public schools impoverished by corporate tax breaks.” For your reference, see below a statement by defendant DaimlerChrysler and a news report summarizing the decision.

The decision itself is at: http://www.supremecourtus.gov

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Greg LeRoy

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