Slip Opinion — DaimlerChrysler Corp. v. Cuno

(Shp Opamen) OCTOBER TERM, 2005 1

Syllabus

NOTE: Where it us feasible, « syllabus (headnote) will be released, as us

being done im connection with this case. at the time the opinion is issued.

The syllabus constitutes no part of the opimon of the Court but has been

prepared by the Reporter of Decisions for the convemence of the reader.

See United States vy. Detroit Timber & Lumber Co., 200 U.S. 321, 337.

SUPREME COURT OF THE UNITED STATES

Syllabus

DAIMLERCHRYSLER CORP. ET AL. vp CUNO ET AL,

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR

THE SIXTH CIRCUIT

No. 04—1704. Argued March 1. 2006—Decided May 15, 2006*

The city of Toledo and State of Ohio sought to encourage DaimlerChrys-

ler Corp. to expand its Toledo operations by-oflering it local property

tax exemptions and a state franchise tax credit. A group of plaintiffs

including Toledo residents who pay state and local taxes sued in state

court, alleging that the tax breaks violated the Commerce Clause.

The taxpayer plaintiffs claimed injury because the tax breaks de-

pleted the state and local treasuries to which they contributed. De-

fendants removed the action to District Court. Plaintiffs moved to

remand to state court because, infer alia, they doubted whether they

satisfied either the constitutional or prudential limitations on stand-

ing in federal court. The District Court declined to remand the case,

concluding that plaintiffs had standing under the “municipal tax-

payer 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 Cir-

cuit agreed as to the municipal tax exemption, but held that the state

franchise tax credit violated the Commerce Clause. Defendants

sought certiorari to review the invalidation of the franchise tax

credit, and plaintiffs 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.

Held: Plaintiffs have not established their standing to challenge the

state franchise tax credit. + om they have no standing to chal-

lenge that credit, the lower ¢ by considering their claims

* Together with No. 04-1724, Wilkins, Tax Commissioner for State of

Ohio, et al. v. Cuno et al., also on certiorari to the same court.

DAIMLERCHRYSLER CORP. v. CUNO

Syllabus

on the merits. Pp. 4-18.

1. State taxpayers have no standing under Article LI| to challenge

state tax or spending decisions simply by virtue of their status as

taxpayers. Pp. 4-13.

(a) Before this Court can address the merits of plaintiffs’ chal-

lenge, it has an obligation to assure itself that the merits question is

presented in a proper Article II] “case” or “controversy.” Lujan v. De-

fenders of Wildlife, 504 U.S. 555, 560. The case-or-controversy limita-

tion is crucial in maintaining the * ‘tripartite allocation of power ” set

forth in the Constitution. Valley Forge Christian College v. Americans

United for Separation of Church and State, Inc., 454 U.S. 464, 474.

“Article II] standing ... enforces the ... case-or-controversy re-

quirement.” Elk Grove Unified School Dist. v. Newdow, 542 U.S. 1, 11.

The requisite elements of standing are familiar: “A plaintiff must al-

lege personal injury fairly traceable to the defendant's allegedly

unlawful conduct and likely to be redressed by the requested relief.”

Allen v. Wright, 468 U.S. 737, 751. Plaintiffs, as the parties now as-

serting federal jurisdiction, must carry the burden of establishing

their standing. Pp. 4-6.

(b) Plaintiffs’ principal claim that the franchise tax credit de-

pletes state funds to which they contribute through their taxes, and

thus diminishes the total funds available for lawful uses and imposes

disproportionate burdens on them, is insufficient to establish stand-

ing under Article IIl. This Court has denied federal taxpayers st and-

ing under Article II] to object to a particular expenditure of federal

funds simply because they are taxpayers. See, e.g., Valley Forge

Christian College, supra, at 476-482. The animating principle behind

cases such as Valley Forge was announced in Frothingham v. Mellon,

decided with Massachusetts v. Mellon, 262 U.S. 447, in which the

Court observed that a federal taxpayer's “interest in the moneys of

the Treasury ... is shared with millions of others: is comparatively

minute and indeterminable: and the effect upon future taxation, of

any payment out of the funds. so remote, fluctuating and uncertain,

that no basis is afforded for an appeal to the preventive powers of a

court of equity.” /d., at 486-487. This rationale applies with undi-

minished force to state taxpayers who allege simply that a state fiscal

decision will deplete the fise and “impose disproportionate burdens on

them.” See Doremus v. Board of Ed. of Hawthorne, 342 U.S. 429, 433—

134. Because state budgets frequently have an array of tax and

spending provisions that may be challenged on a variety of bases, af-

fording state taxpayers standing to press such challenges simply be-

cause their tax burden gives them an interest in the state treasury

would interpose the federal courts as * ‘virtually continuing monitors

of the wisdom and soundness’ ” of state fiscal administration, con-

Cite as: 547U.S.___ (2006) 3

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trary to the more modest role Article |I! envisions for federal courts.

See Allen, supra, at 760-761. Pp. 7-11.

(c) Also rejected is plaintiffs’ argument that they have state tax-

payer standing on the ground that their Commerce Clause challenge

is just like the Establishment Clause challenge this Court permitted

in Flast v. Cohen, 392 U.S. 83, 105-106. Flast allowed an Estab-

lishment Clause challenge by federal taxpayers to a congressional ac-

tion under Art. 1, §8 Although Flast held out the possibility that

“specific [constitutional] limitations” other than the Establishment.

Clause might support federal taxpayer standing. id, at 105, 85, only

the Establishment Clause has been held to do so since Fast, see, e.g.,

Bowen v. Kendrick, 487 U.S. 589, 618. Plaintiffs’ reliance on Flas? is

misguided: Whatever rights plaintiffs have under the Commerce

Clause, they are fundamentally unlike the right not to contribute

even “three pence” to support a religious establishment that was up-

held in Flast, 392 U.S., at 103. Indeed, plaintiffs compare the two

Clauses at such a high level of generality that almost any constitu-

tional constraint on government power could be likened to the Estab-

lishment —lause as interpreted in Flast. Id., at 105. And a finding

that the Commerce Clause satisfies the Flast test because it often

implicates governments’ fiscal decisions would leave no principled

way of distinguishing other constitutional provisions that also con-

strain governments taxing and spending decisions. See, e.g., Arkan-

sas Writers’ Project, Inc. v. Ragland, 481 U.S. 221. Yet such a broad

application of Flast’s exception to the general prohibition on taxpayer

standing would be at odds with Flast’s own promise that it would not

transform federal courts into forums for taxpayers “generalized

grievances ~ 392 U.S., at 106. Pp. 11-13.

2. Plaintiffs’ status as municipal taxpayers does not give them

standing to challenge the state franchise tax credit at issue.

This Court has noted with approval the standing of municipal tax-

payers to enjoin the illegal use of a municipal corporation's funds.

See, e.g., Frothingham, supra, at 486-4187. But ple'ntiffs’ attempts to

leverage the notion of municipal taxpayer standing into standing to

challenge the state tax credit are unavailing. Pp. 13-18.

(a) Plaintiffs argue that because state law requires revenues

from the franchise tax to be distributed to local governments, the

award of a credit to DaimlerChrysler reduced such distributions and

thus depleted the funds of local governments to which plaintiffs pay

taxes. But plaintiffs challenge is still to the state law and state deci-

sion. not those of plaintiffs municipality. Their argument thus suf-

fers from the same defects that the claim of state taxpayer standing

exhibits. Pp. 14-15.

(b) Also rejected is plaintiffs’ claim that their standing to chal-

DAIMLERCHRYSLER CORP. v. CUNO -

Syllabus

lenge the municipal property tax exemption supports jurisdiction

over their challenge to the franchise tax credit under the “supplemen-

tal jurisdiction” recognized in Mine Workers v. Gibbs, 383 U.S. 715.

Gibbs held that federal-question jurisdiction over a claim may au-

thorize a federal court to exercise jurisdiction over state-law claims

that may be viewed as part of the same case because they “derive

from a common nucleus of operative fact” as the federal claim. Id., at

725. Plaintiffs assume that Gibbs stands for the proposition that fed-

eral jurisdiction extends to all claims sufficiently related to a claim

within Article IIT to be part of the same case, regardless of the defi-

ciency that would keep the former claims out of federal court if pre-

sented on their own. This Court's general approach to the applica-

tion of Gibbs has been markedly more cautious. See, e.g., Exvon

Mobil Corp. v. Allapattah Services, Inc., 545 U.S. __, __. The Court

has never applied Gibbs’ rationale to permit a federal court to exercise

supplemental jurisdiction over a claim that does not “itself satisfy

those elements of the Article [11 inquiry, such as constitutional stand-

ing, that “servje] to identify those disputes which are appropriately

resolved through the judicial process.” Whitmore v. Arkansas, 495

U.S. 149, 155. There is no reason to read Gibbs’ language as broadly as

plaintiffs urge, particularly since the Court's standing cases confirm

that a plaintiff must demonstrate standing for each claim he seeks to

press, see, e.g., Allen, supra, at 752. If standing were commutative,

as plaintiffs claim, the Court's insistence that a plaintiff must dem-

onstrate standing separately for each form of relief sought, see, e.g.,

Friends of Earth, Inc. v. Laidlaw Environmental Services (TOC), Inc.,

528 U.S. 167, 185, would make little sense when all claims for relief

derive from a “common nucleus of operative fact,” as they appear to

have in cases like Laidlaw.

Such a reading of Gibbs would have remarkable implications. The

doctrines of mootness, ripeness, and political question all originate in

Article IITs “case” or “controversy” language. no !ess than standing

does. See, e.g., National Park Hospitality Assn. v. Department of In-

lerior, 538 U.S. 803, 808. Yet if Gibbs’ “common nucleus” formula-

tion announced a new definition of “case” or “controversy” for all Arti-

cle LIL purposes, a federal court would be free to entertain moot or

unripe claims. or claims presenting a political question, if they “de-

rived from” the same “operative fact|s|" as another federal claim sulf-

fering from none of these defects. Plaintiffs’ reading of Gibbs, there-

fore, would amount to a significant revision of the Court's precedent

interpreting Article [1]. With federal courts thus deciding issues they

would not otherwise be authorized to decide, the * ‘tripartite alloca-

tion of power” that Article III is designed to maintain, Valley Forge,

supra, at 174. would quickly erode, and the Court's emphasis on the

Cite as: 3470.8. (2006)

ce

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standing requirement’s role in maintaining this separation would be

rendered hollow rhetoric, see Lewis v. Casey, 518 U.S. 343, 357.

Pp. 15-18. |

386 F. 3d 738, vacated in part and remanded.

Rowerts, C. J., delivered the opinion of the Court, in which STEVENS,

SCALIA, KENNEDY, SOUTER, THOMAS, BREYER, and ALITO, JJ., joined.

GINSBURG, J., filed an opinion concurring in part and concurring in the

judgment.

Cite as: 547. S. ____ (2006) 1

>

Opinion of the Court

are requested

notify the of Deewsions, Supreme Court of the United States Wash-

ington, D.C. 205438, of any t or other formal errors in order

that corrections may be made the preliminary print goes to press.

SUPREME COURT OF THE UNITED STATES

Nos. 04-1704 and 04-1724

DAIMLERCHRYSLER CORPORATION, ET AL.,

PETITIONERS

04-1704 v.

CHARLOTTE CUNO BT AL. —

WILLIAM W. WILKINS, TAX COMMISSIONER FOR

THE STATE OF OHIO, eT AL., PETITIONERS

0A-1724 v. a

CHARLOTTE CUNO ET AL.

ON WRITS OF CERTIORARI TO THE UNITED STATES COURT OF

APPEALS FOR THE SIXTH CIRCUIT

(May 15, 2006]

CHIEF JUSTICE ROBERTS delivered the opinion of the

Court.

Jeeps were first mass-produced in 1941 for the U.S.

Army by the Willys-Overland Motor Company in Toledo,

Ohio. Nearly 60 years later, the city of Toledo and State of

Ohio sought to encourage the current manufacturer of

Jeeps—DaimlerChrysler—to expand its Jeep operation in

Toledo, by offering local and state tax benefits for new

investment. Taxpayers in Toledo sued, alleging that their

local and state tax burdens were increased by the tax

breaks for DaimlerChrysler, tax breaks that they asserted

violated the Commerce Clause. The Court of Appeals

agreed that a state tax credit offered under Ohio law

violated the Commerce Clause, and state and local officials

2 DAIMLERCHRYSLER CORP. v. CUNO

Opinion of the Court

and DaimlerChrysler sought review in this Court. We are

obligated before reaching this Commerce Clause question

to determine whether the taxpayers who objected to the

credit have standing to press their complaint in federal

court. We conclude that they do not, and We therefore can

proceed no further.

I

Ohio levies a franchise tax “upon corporations for the

privilege of doing business in the state, owning or using a

part or all of its capital or property in [the] state, or hold-

ing a certificate of compliance authorizing it to do business

in [the] state.” Wesnovtek Corp. v. Wilkins, 105 Ohio St.

3d 312, 313, 2005-Ohio—1826, 42, 825 N. E. 2d 1099, 1100; ©

see Ohio Rev. Code Ann. §5733.01 (Lexis 2005). A tax-

payer that purchases “new manufacturing machinery and

equipment” and installs it at sites in the State receives a

credit against the franchise tax. See §5733.33(B)(1) (Lexis

1999). Municipalities in Ohio may also offer partial

property tax waivers to businesses that agree to invest

in qualifying areas. See §5709.62(C)(1)(a) (Lexis 2005).

With consent from local school districts, the partial prop-

erty tax waiver can be increased to a complete exemption.

See §5709.62(D)(1).

In 1998, DaimlerChrysler entered into a contract with

the city of Toledo. Under the contract, DaimlerChrysler

agreed to expand its Jeep assembly plant at Stickney

Avenue in Toledo. In exchange, the city agreed to waive

the property tax for the plant, with the consent of the two

school districts in which the plant is located. Because

DaimlerChrysler undertook to purchase and install “new

'Ohio has begun phasing out the franchise tax and has discontinued

offering new credits against the tax like the one DaimlerChrysler

received. See §§5753.01(G), 5733.53(R)(1) (Lexis 2005). Where rele-

vant, therefore, the citations in this opinion are to the statutes in effect

at the time DaimlerChrysler made its investment.

Cite as: 347U.S.____ (2006) 3

Opinion of the Court

manufacturing machinery and equipment,” it was also

entitled to a credit against the state franchise tax. See

§5733.33(B)(1) (Lexis 1999).

Plaintiffs filed suit against various state and local offi-

cials and DaimlerChrysler in state court, alleging that

these tax benefits violated the Commerce Clause. Most of

the plaintiffs were residents of Toledo, who paid taxes to

both the city of Toledo and State of Ohio. They claimed

that they were injured because the tax breaks for Daim-

lerChrysler diminished the funds available to the city and

State, imposing a “disproportionate burden” on plaintiffs.

App. 18a, 23a, 28a.*

Defendants removed the action to the United States

District Court for the Northern District. of Ohio. See 28

U.S.C. §1441. Plaintiffs filed motions to remand the case

to state court. See §1447(c). One of the grounds on which

they sought remand concerned their standing. They pro-

fessed “substantial doubts about their ability to satisfy

either the constitutional or the prudential limitations on

standing in the federal court,” and urged the Distzict

Court to avoid the issue entirely by remanding. Plaintiffs’

Supplemental Motion for Remand to State Court in No.

3:00ev7247, p. 13, Record Doe. 17 (footnote omitted).

The District Court declined to remand the case, conclud-

ing that, “[a]t the bare minimum, the Plaintiffs who are

taxpayers have standing to object to the property tax

exemption and franchise tax credit statutes under the

“Other plaintiffs were residents of Toledo who claimed they were

injured because they were displaced by the DaimlerChrysler expansion

and Michigan residents who claimed injury because DaimlerChrysler

would have expanded its operations in Michigan but for the Ohio

investment tax credit. Plaintiffs neither identified these allegations as

a basis for standing in their merits brief before this Court nor referred

to them at oral argument. Any argument based on these allegations ts

therefore abandoned. See. ¢.g., United Slates v. International Business

Machines Corp., 517 U.S. 843, 855, and n. 3 (1996).

4 DAIMLERCHRYSLER CORP. v. CUNO

Opinion of the Court

‘municipal taxpayer standing’ rule articulated in Massa-

chusetis v. Mellon, 262 U.S. 447 (1923).” App. 78a (citations

omitted). On the merits, the District Court found that

neither tax benefit violated the Commerce Clause. See

154 F. Supp. 2d 1196 (2001). The Court of Appeals for the ~

Sixth Circuit agreed with the District Court as to the

municipal property tax exemption, but held that the state

franchise tax credit violated the Commerce Clause. See

386 F.3d 738 (2004). The Court of Appeals did not ad-

dress the issue of standing.

Defendants sought certiorari to review the Sixth Cir-

cuit’s invalidation of the franchise tax credit and plaintiffs

sought certiorari to review the upholding of the property

tax exemption. We granted certiorari to consider whether

the franchise tax credit violates the Commerce Clause, 545

U.S. (2005); the Michigan Supreme Court had decided

a similar question contrary to the Sixth Circuit's analysis

here. See Caterpillar, Inc. v. Dept. of Treasury, 440 Mich.

A400, 488 N. W. 2d 182 (1992). We also asked the parties to

address whether plaintiffs have standing to challenge the

franchise tax credit in this litigation.

il

We have “an obligation to assure ourselves” of litigants’

standing under Article Ill. Friends of Earth, Inc. v. Laid-

law Environmental Services (TOC), Inc., 528 U.S. 167, 180

(2000). We therefore begin by addressing plaintiffs’ claims

that they have standing as taxpayers to challenge the fran-

chise tax credit.

A

Chief Justice Marshall, in Marbury v. Madison, |

Cranch 137 (1803), grounded the Federal Judiciary’s

authority to exercise judicial review and interpret the

Constitution on the necessity to do so in the course of

carrying out the judicial function of deciding cases. As

Marshall explained, “[t]hose who apply the rule to particu-

Cite as: 547U.S.___ (2006) 5

Opinion of the Court

lar cases, must of necessity expound and interpret that

rule.” /d., at 177. Determining that a matter before the

federal courts is a proper case or controversy under Article

111 therefore assumes particular importance in ensuring

that the Federal Judiciary respects “‘the proper—and

properly limited—role of the courts in a democratic soci-

ety,” Allen v. Wright, 468 U.S. 737, 750 (1984) (quoting

Warth v. Seldin, 422 U.S. 490, 498 (1975)). If a dispute is

not a proper case or controversy, the courts have no busi-

ness deciding it, or expounding the law in the course of

doing so.

This Court has recognized that the case-or-controversy

limitation is crucial in maintaining the “‘tripartite alloca-

tion of power’” set forth in the Constitution. Valley Forge

Christian College vy. Americans United for Separation of

Church and State, Inc., 454 U.S. 464, 474 (1982) (quoting

Flast v. Cohen, 392 U.S. 83, 95 (1968)). Marshall again

made the point early on, this time in a speech in the House

of Representatives. “A case in law or equity,” Marshall

remarked,

“was aterm ... of limited signification. It was a con-

troversy between parties which had taken a shape for

judicial decision. If the judicial power extended to

every question under the constitution it would involve

almost every subject proper for legislative discussion

and decision; if to every question under the laws and

treaties of the United States it would involve almost

every subject on which the executive could act. The

division of power [among the branches of government]

could exist no longer, and the other departments

would be swallowed up by the judiciary.” 4 Papers of

John Marshall 95 (C. Cullen ed. 1984).

As this Court. has explained, “‘[nJo principle is more fun- -

damental to the judiciary’s proper role in our system of

government than the constitutional limitation of federal-

6 DAIMLERCHRYSLER CORP. v, CUNO

Opinion of the Court

court jurisdiction to actual cases or controversies.’” Raines

v. Byrd, 521 U.S. 811, 818 (1997) (quoting Simon v. Eastern

Ky. Welfare Rights Organization, 426 U.S. 26, 37 (1976)).

The case-or-controversy requirement thus plays a criti-

cal role, and “Article II standing . . . enforces the Conati-

tution’s case-or-controversy requirement.” Elk Grove

Unified School Dist. v. Newdow, 542 U.S. 1, 11 (2004). The

“core component” of the requirement that a litigant have

standing to invoke the authority of a federal court “is an

essential and unchanging pari of the case-or-controversy

requirement of Article III.” Lujan v. Defenders of Wildlife,

504 U.S. 555, 560 (1992). The requisite elements of this

“core component derived directly from the Constitution”

are familiar: “A plaintiff must allege personal injury fairly

traceable to the defendant's allegedly unlawful conduct

and likely to be redressed by the requested relief.” Allen,

supra, at 751. We have been asked to decide an important

question of constitutional law concerning the Commerce

Clause. But before we do so, we must find that the

question is presented in a “case” or “controversy” that

is, in James Madison's words, “of a Judiciary Nature.” 2

Records of the Federal Convention of 1787, p. 430

(M. Farrand ed. 1966). That requires plaintiffs, as the

parties now asserting federal jurisdiction, to carry the

burden of establishing their standing under Article III."

*Because defendants removed the case from state court fo District

Court, plaintiffs were not initially the parties that invoked federal

jurisdiction. Indeed, plaintiffs initially expressed doubts as to their

standing. Nonetheless, because “|wle presume that federal courts lack

jurisdiction unless the contrary appears affirmatively from the record,”

Renne v. Geary, 501 U.S. 312, 316 (1991) (internal quotation marks

omitted), the party asserting federal jurisdiction when it 1s challenged

has the burden of establishing it. Whatever the parties previous

positions on the propriety of a federal forum, plaintiffs. as the parties

seeking to establish federal jurisdiction, must make the showings

required for standing.

Cite as: 547U.S.___ (2006) 7

Opinion of the Court

B :

Plaintiffs principally claim standing by virtue of their

status as Ohio taxpayers, alleging that the franchise tax

credit “depletes the funds of the State of Ohio to which the

Plaintiffs contribute through their tax payments” and thus

“diminish|es] the total funds available for lawful uses and

impos|es] disproportionate burdens on” them. App. 28a;

see also Brief for Respondents 24. On several occasions,

this Court has denied federal taxpayers standing under

Article ILI to object to a particular expenditure of federal

funds simply because they are taxpayers. Thus the al-

leged “deprivation of the fair and constitutional use of [a

federal taxpayer's] tax dollar” cannot support a challenge

to the conveyance of Government land to a private reli-

gious college, Valley Forge, supra, at 476-482 (internal

quotation marks and some brackets omitted), and “the

interest of a taxpayer in the moneys of the federal treasury

furnishes no basis” to argue that a federal agency's loan

practices are unconstitutional, Alabama Power Co. v. Ickes,

302 U.S. 464, 478 (1938); see also Schlesinger v. Reservists

Comm. to Stop the War, 418 U.S. 208 (1974); United Siates

v. Richardson, 418 U.S. 166 (1974).

The animating principle behind these cases was an-

nounced in their progenitor, Frothingham v. Mellon, de-

cided with Massachusetts v. Mellon, 262 U.S. 447 (1923).

In rejecting a claim that improper federal appropriations

would “increase the burden of future taxation and thereby

take [the plaintiff's] property without due process of law,”

the Court observed that a federal taxpayer's

“interest in the moneys of the Treasury ... is shared

with millions of others; is comparatively minute and

indeterminable; and the effect upon-future taxation, of

any payment out of the funds, so remote, fluctuating

and uncertain, that no basis is afforded for an appeal

to the preventive powers of a court of equity.” Id., at

A86—487.

8 DAIMLERCHRYSLER CORP. v. CUNO

Opinion of the Court

This logic is equally appiicable to taxpayer challenges to

expenditures that deplete the treasury, and to taxpayer

challenges to so-called “tax expenditures,” which reduce

amounts available to the treasury by granting tax credits

or exemptions. In either case, the alleged injury is based

on the asserted -effect. of the allegedly illegal activity on

public revenues, to which the taxpayer contributes.

Standing has been rejected in such cases because the

alleged injury is not “concrete and particularized,” Defend-

ers of Wildlife, supra, at 560, but instead a grievance the

taxpayer “suffers in some indefinite way in common with

people generally,” Frothingham, supra, at 488. In addi-

tion, the injury is not “actual or imminent,” but instead

“conjectural or hypothetical.” Defenders of Wildlife, supra,

at. 560 (internal quotation marks and citations omitted). As

an initial matter, it is unclear that tax breaks of the sort

at. issue here do in fact deplete the treasury: The very

point of the tax benefits is to spur economic activity, which

in turn increases government revenues. In this very ac-

tion, the Michigan plaintiffs claimed that they were in-

jured because they lost out on the added revenues that

would have accompanied DaimlerChrysler’s decision to

expand facilities in Michigan. See n. 2, supra.

Plaintiffs’ alleged injury is also “conjectural or hypotheti-

cal” in that it depends on how legislators respond to a reduc-

tion in revenue, if that is the consequence of the credit.

Establishing injury requires speculating that elected offi-

cials will increase a taxpayer-plaintiff's tax bill to make up a

deficit; establishing redressability requires speculating that

abolishing the challenged credit will redound to the benefit

of the taxpayer because legislators will pass along the sup-

posed increased revénue in the form of tax reductions.

Neither sort of speculation suffices to support standing. See

ASARCO Inc. v. Kadish, 490 U.S. 605, 614 (1989) (opinion

of KENNEDY, J.) (I]t is pure speculation whether the law-

suit would result in any actual tax relief for respondents’);

Cite as: 547 U.S. (2006) 9

Opinion of the Court

Warth, 422 U.S., at 509 (criticizing a taxpayer standing

claim for the “conjectural nature of the asserted injury’).

A taxpayer-plaintiff has no right to insist that the gov-

ernment dispose of any increased revenue it might experi-

ence as a result of his suit by decreasing his tax liability or

bolstering programs that benefit him. To the contrary, the

decision of how to allocate any such savings is the very

epitome of a policy judgment committed to the “broad and

legitimate discretion” of lawmakers, which “the courts

cannot presume either to control or to predict.”. ASARCO,

supra, at 615 (opinion of KENNEDY, J.). Under such cir-

cumstances, we have no assurance that the asserted in-

jury is “imminent’—that it is “certainly impending.” |

Whiimore v. Arkansas, 495 U.S. 149, 158 (1990) (internal

quotation marks omitted); see Defenders of Wildlife, 504

U.S., at 564-565, n. 2.

The foregoing rationale for rejecting federal taxpayer

standing applies with undiminished force to state taxpay-

ers. We indicated as much in Doremus v. Board of Ed. of

Hawthorne, 342 U.S. 429 (1952). In that case, we noted our

-earlier holdings that “the interests of a taxpayer in the

moneys of the federal treasury are too indeterminable,

remote, uncertain and indirect” to support standing to

challenge “their manner of expenditure.” /d., at 433. We

then “reiterate|d]" what we had said in rejecting a federal

taxpayer challenge to a federal statute “as equally true

when a state Act is assailed: “The [taxpayer] must be able to

show ... that he has sustained ... some direct injury ...

and not merely that he suffers in some indefinite way in

common with people generally.” /d., at 433-434 (quoting

Frothingham, supra, at 488); see ASARCO, supra, at 613-—

614 (opinion of KENNEDY, J.) [W]e have likened state

taxpayers to federal taxpayers” for purposes of taxpayer

standing (citing Doremus, supra, at 434)).

The allegations of injury that plaintiffs make in their

complaint furnish no better basis for finding standing

10 DAIMLERCHRYSLER CORP. v. CUNO

Opinion of the Court

than those made in the cases where federal taxpayer

standing was denied. Plaintiffs claim that DaimlerChrys-

ler’s tax credit depletes the Ohio fisc and “impos|es] dis-

proportionate burdens on |them].” App. 28a. This is no

different from similar claims by federal taxpayers we have

already rejected under Article III as insufficient to estab-

lish standing. See, e.g., Frothingham, 262 U.S., at 486

(allegation of injury that the effect of government spend-

ing “will be to increase the burden of future taxation and

thereby take [plaintiffs] property without due process of

law’).

State policymakers, no less than their federal counter-

parts, retain broad discretion to make “policy decisions”

concerning state spending “in different ways ... depend-

ing on their perceptions of wise state fiscal policy and

myriad other circumstances.” ASARCO, supra, at 615

(opinion of KENNEDY, J.). Federal courts may not assume

a particular exercise of this state fiscal discretion in estab-

lishing standing; a party seeking federal jurisdiction

cannot rely on such “|s]peculative inferences . .. to connect

[his] injury to the challenged actions of [the defendant],”

Simon, 426 U.S., at 45; see also Allen, 468 U.S., at 759.

Indeed, because state budgets frequently contain an array

of tax and spending provisions, any number of which may

be challenged on a variety of bases, affording state tax-

payers standing to press such challenges simply because

their tax burden gives them n interest in the state treas-

ury would interpose the federal courts as “‘virtually con-

tinuing monitors of the wisdom and soundness’” of state

fiscal administration, contrary to the more modest role

Article Ll] envisions for federal courts. See id., at 760-761

(quoting Laird v. Tatum, 408 U.S. 1, 15 (1972)).

For the foregoing reasons, we hold that state taxpayers

have no standing under Article III to challenge state tax

or spending decisions simply by virtue of their status as

Cite as: 547 U.S. (2006) il

Opinion of the Court

taxpayers. '

C

Plaintiffs argue that an exception-to the general prohibi-

tion on taxpayer standing should exist for Commerce

Clause challenges to state tax or spending decisions,

analogizing their Commerce Clause claim to the Estab-

lishment Clause challenge we permitted in Flast v. Cohen,

392 U.S. 83. Flast held that because “the Establishment

Clause ... specifically limit|s] the taxing and spending

power conferred by Art. I, §8,” “a taxpayer will heve stand-

ing consistent with Article IIl to invoke federal judicial

power when he alleges that congressional action under the

taxing and spending clause is in derogation of” the Estab-

lishment Clause. /d., at 105-106. Flast held out the

possibility that “other specific [constitutional] limitations”

on Art. 1, §8, might surmount the “barrier to suits against

Acts of Congress brought by individuals who can assert

only the interest of federal taxpayers.” 392 U.S., at 105,

85. But as ptaintiffs candidly concede, “only the Estab-

lishment Clause” has supported federal taxpayer suits

since Flast. Brief for Respondents 12; see Bowen v. Ken-

drick, A487 U.S. 589, 618 (1988) (“Although we have con-

sidered the problem of standing and Article III limitations

on federal jurisdiction many times since /Flast/, we have

consistently adhered to Flast and the narrow exception it

'The majority of the Courts of Appeals to have considered the issue

have reached a similar conclusion. See, e.g., Booth v. Hvass, 302 F. 3d

819 (CA8 2002); Board of Ed. of Mt. Sinai Union Free School Dist. v.

New York State Teachers Retirement System, 60 F.3d 106 (CAZ 1995):

Colorado Taxpayers Union, Inc. v. Romer, 963 F. 2d 1394 (CA10 1992);

Taub v. Kentucky, 842 F. 2d 912 (CA6 1988): Korioth v. Briscoe, 523

F. 2d 1271 (CA5 1974): but ef. Arakaki v. Lingle, 423 F.3d 954, 967-

969 (CAQ 2005) (finding state taxpayer standing in light of Hoohuli

v. Ariyoshi, 741 F.2d 1169 (CA9Y 1984), but noting that Justice

KENNEDYs opinion in ASARCO Inc. v. Kadish, 199 U.S. 605 (1989),

would “carry persuasive value” absent Hoohuli).

12 DAIMLERCHRYSLER CORP. v. CUNO

Opinion of the Court

created to the general rule against taxpayer standing’).

Quite apart from whether the franchise tax credit is

analogous to an exercise of congressional power under Art.

|, §8, plaintiffs’ reliance on Flast is misguided: Whatever

rights plaintiffs have under the Commerce Clause, they

are fundamentally unlike the right not to “‘contribute

three pence .. . for the support of any one [religious] estab-

lishment.” 392 U.S., at 103 (quoting 2 Writings of James

Madison 186 (G. Hunt ed. 1901)). Indeed, plaintiffs com-

pare the Establishment Clause to the Commerce Clause at

such a high level of generality that almost any constitu-

tional constraint on government power would “specifically

limit” a State’s taxing and spending power for Flast pur-

poses. 392 U.S., at 105; see Brief for Respondents 14 (“In

each case, the harm to be avoided by [the two clauses] is

the loss of governmental neutrality”). And even if the two

clauses are similar in that they often implicate govern-

ments’ fiscal decisions, see id., at 13-14, a finding that the

Commerce Clause satisfies the Flast test would leave no

principled way of distinguishing those other constitutional

provisions that we have recognized constrain govern-

ments’ taxing and spending decisions. See, e.g., Arkansas

Writers’ Project, Inc. v. Ragland, 481 U.S. 221 (1987)

(invalidating state sales tax under the Free Press Clause).

Yet such a broad application of Flast’s exception to the

general prohibition on taxpayer standing would be quite at

odds with its narrow application in our precedent and

Flast’s own promise that it would not transform federal

courts into forums for taxpayers’ “generalized grievances.”

392 U.S., at 106.

Flast is consistent with the principle, underlying the

Article Ill prohibition on taxpayer suits, that a litigant

may not assume a particular disposition of government

funds in establishing standing. The Flast Court discerned

in the history of the Establishment Clause “the specific

evils feared by |its drafters] that the taxing and spending

Cite as: 547U.S. (2006) 13

Opinion of the Court

power would be used to favor one religion over another or

to support religion in general.” /d., at 108.) The Court

therefore understood the “injury” alleged in Establishment

Clause challenges to federal spending to be the very “ex-

tractlion] and spen|ding]” of “tax money” in aid of religion

alleged by a plaintiff. /d., at 106. And an injunction

against the spending would of course redress (hal injury,

regardless of whether lawmakers would dispose of the

savings in a way that would benefit the taxpayer-plaintiffs

personally. See Valley Forge, 454 U.S., at 514 (STEVENS,

J., dissenting) ({T]he plaintiffs’ invocation of the Estab-

lishment Clause was of decisive importance in resolving the

standing issue in /Flast]”).

Plaintiffs thus do not have state taxpayer standing on

the ground that their Commerce Clause challenge is just

like the Establishment Clause challenge in Flast.

Hl

Plaintiffs also claim that their status as municipal

taxpayers gives them standing to challenge the slate

franchise tax credit at issue here. The Frothingham Court.

noted with approval the standing of municipal residents to

enjoin the “illegal use of the moneys of a municipal corpo-

ration,” relying on “the peculiar relation of the corporate

taxpayer to the corporation” to distinguish such a case

from the general bar on taxpayer suits. 262 U.5S., at 486—

A87; see ASARCO, 490 U.S., at 613-614 (opinion of

KENNEDY, J.) (reiterating distinction). Plaintiffs here

challenged the municipal property tax exemption as mu-

nicipal taxpayers. That challenge was rejected by the

Court of Appeals on the merits, and no issue regarding

plaintiffs’ standing to bring it has been raised. In plain-

tiffs’ challenge to the state franchise tax credit, however,

they identify no municipal action contributing to any

claimed injury. Instead, they try to leverage the notion of

municipal taxpayer standing beyond challenges to munici-

\4 DAIMLERCHRYSLER CORP. v, CUNO

Opinion of the Court

pal action, in two ways.

A

lirst, plaintiffs claim that because state law requires

revenues from the franchise tax to be distributed to local

governments, Ohio Rev. Code Ann. §5733.12 (Lexis 2005),

the award of a credit to DaimlerChrysler reduced such

distributions and thus depleted the funds of “local gov-

ernments to which Respondents pay taxes.” Brief for

Respondents 16. But plaintiffs’ challenge is still to the

state law and state decision, not those of their municipal-

ity. We have already explained why a state taxpayer lacks

standing to challenge a state fiscal decision on the grounds

that it might affect his tax liability. All plaintiffs have

done in recasting their claims as ones brought by munici-

pal taxpayers whose municipalities receive funding from

the State—the level of which might be affected by the

same state fiscal decision—s introduce yet another level

of conjecture to their already hypothetical claim of injury.

And in fact events have highlighted the peril of assum-

ing that any revenue increase resulting from a taxpayer

suit will be put to a particular use. Ohio's General As-

sembly suspended the statutory budget mechanism that

distributes franchise tax revenues to local governments in

2001 and again in its subsequent biennial budgets.

See Amended Substitute H. B. 94, 124th General Assem-

bly §140 (2001), available at http://www.legislature.state.

oh.us/BillText124/124_HB_94_ENR.pdf (all Internet ma-

terials as visited May 12, 2006, and available in

Clerk of Court’s case file); Amended Substitute H. B.

95, 125th General Assembly §139 (2003), available at

http://www.legislature.state.oh.us/BillText 125/125 _HB_95

_EN2_N.pdf; Amended Substitute IH. B. 66, 126th Gen-

eral Assembly §557.12 (2005), available at http//www.

legislature.state.oh.us/BillText 126/126 IIB 66_EN2d.pdf. Any

effect that enjoining DaimlerChrysler’s credit will have on

Cite as: 547.8. (2006) 15

Opinion of the Court

municipal funds, therefore, will not result from automatic

operation of a statutory formula, but from a hypothesis

that the state government will choose to direct the sup-

posed revenue from the restored franchise tax to munici-

palities. This is precisely the sort of conjecture we may

not entertain in assessing standing. See ASARCO, supra,

at. 614 (opinion of KENNEDY, d.).

B

The second. way plaintiffs seek to leverage their stand-

ing to challenge the municipal property tax exemption into

a challenge to the franchise tax credit is by relying on

Mine Workers v. Gibbs, 383 U.S. 715 (1966). According to

plaintiffs, the “supplemental jurisdiction” recognized in

that case supports jurisdiction over all their claims, once

the District Court determined they had standing to chal-

lenge the property tax exemption. Brief for Respondents

17-18.

Gibbs held that federal-question jurisdiction over a

claim may authorize a federal court to exercise jurisdiction

over state-law claims that may be viewed as part of the

same case because they “derive from a common nucleus of

operative fact” as the federal claim. 383 U.S., at 725.

Plaintiffs assume that Gibbs stands for the proposition

that federal jurisdiction extends to all claims sufficiently

related to a claim within Article Ill to be part of the same

case, regardless of the nature of the deficiency that would

keep the former claims out of federal court if presented on

their own. 7

Our general approach to the application of Gibbs, how-

ever, has been markedly more cautious. lor example, as a

matter of statutory construction of the pertinent jurisidic-

tional provisions, we refused to extend Gibbs to allow

claims to be asserted against nondiverse parties when

jurisdiction was based on diversity, see Owen Equipment

& Erection Co. v. Kroger, 437 U.S. 365 (1978), and we

16 DAIMLERCHRYSLER CORP. v, CUNO

Opinion of the Court

refused to extend Gibbs to authorize supplemental juris-

diction over claims that do not satisfy statutory amount-

in-controversy requirements, see Finley v. United States,

490 U.S. -545 (1989). As the Court explained just last

Term, “|wlje have not ... applied Gibbs’ expansive inter-

pretive approach to other aspects of the jurisdictional

statutes.” Exxon Mobil Corp. v. Allapatiah Services, Inc.,

545 U.S. ___, ___ (2005) (slip op., at 5) (applying 28 U.S. C.

$1367, enacted in 1990, to allow a federal court in a diver-

sity action to exercise supplemental jurisdiction over addi-

tional diverse plaintiffs whose claims failed to meet the

amount-in-controversy threshold).

What we have never done is apply the rationale of Gibbs

to permit a federal court to exercise supplemental jurisdic-

_ tion over a claim that does not itself satisfy those elements

of the Article LI inquiry, such as constitutional standing,

that “serv[e] to identify those disputes which are appro-

priately resolved through the judicial process.” Whitmore,

A95 U.S., at 155. We see no reason to read the language of

Gibbs so broadly, particularly since our standing cases

confirm that a plaintiff must demonstrate standing for

each claim he seeks to press. See Allen, 468 U.S., at 752

(“|T}he standing inquiry requires careful judicial examina-

tion of a complaint’s allegations to ascertain whether the

particular plaintiff is entitled to an adjudication of the

particular claims asserted” (emphasis added)). We have

insisted, for instance, that “a plaintiff must demonstrate

standing separately for each form of relief sought.” Laid-

law, 528 U.S., at 185; see Los Angeles v. Lyons, 461 U.S.

95, 109 (1983). But if standing were commutative, as

plaintiffs claim, this insistence would make little sense

when all claims for relief derive from a “common nucleus

of operative fact,” as they certainly appear to have in both

Laidlaw, supra, at. 175-179, and Lyons, supra, at 97-98.

Plaintiffs’ reading of Gibbs to allow standing as to one

claim to suffice for all claims arising from the same “nu-

Cite as: 547U.S._ (2006) 17

Opinion of the Court

cleus of operative fact” would have remarkable implica-

tions. The doctrines of mootness, ripeness, and political

question all originate in Article III's “case” or “contro-

versy’ language, no less than standing does. See, e.g.,

National Park Hospitality Assn. v. Department of Interior,

538 U.S. 803, 808 (2003) (ripeness); Arizonans for Official

tnglish v. Arizona, 520 U.S. 43, 67 (1997) (mootness);

Reservists Comm. to Stop the War, 418 U.S., at 215 (po-

litical question). Yet if Gibbs’ “common nucleus” formula-

tion announced a new definition of “case” or “controversy”

for all Article II] purposes, a federal court would be free to

entertain moot or unripe claims, or claims presenting a

political question, if they “derived from” the same “opera-

tive fact|s]” as another federal claim suffering from none

of these defects. Plaintiffs’ reading of Gibbs, therefore,

would amount to a significant revision of our precedent

interpreting Article II]. With federal courts thus deciding

issues they would not otherwise be authorized to decide,

the “‘tripartite allocation of power” that Article III is

designed to maintain, Valley Forge, 454 U.S., at 474, would

quickly erode; our emphasis on the standing requirement’s

role in maintaining this separation would be rendered

hollow rhetoric. As we have explained, “|t]he actual-injury

requirement would hardly serve the purpose ... of pre-

venting courts from undertaking tasks assigned to the

political branches,] if once a plaintiff demonstrated harm

from one particular inadequacy in government admini-

stration, the court were authorized to rethedy all inade-

quacies in that administration.” Lewis v. Casey, 518 U.S.

343, 357 (1996).

Lewis emphasized that “|t}he remedy must of course be

limited to the inadequacy that produced the injury in fact

that the plaintiff has established.” bid. Plaintiffs’ theory

of ancillary standing would contravene this principle.

Plaintiffs failed to establish Article ITT injury with respect

to their sfale taxes, and even if they did do so with respect

18 DAIMLERCHRYSLER CORP. v, CU NO

Opinion of the Court

to their municipal taxes, that injury does not entitle them

to seek a remedy as to the state taxes. As the Court

summed up the point in Lewis, “standing is not dispensed

in gross.” /d., at 358, n. 6.°

* * 7.

All the theories plaintiffs have offered to support. their

standing to challenge the franchise tax credit are unavail-

ing. Because plaintiffs have no standing to challenge that

credit, the lower courts erred by considering their claims

against it on the merits. The judgment of the Sixth Cir-

cuit is therefore vacated in part, and the cases are re-

manded for dismissal of plaintiffs’ challenge to the fran-

chise tax credit.

It is so ordered.

‘In defending the contrary position, plaintiffs rely on three cases

from the Courts of Appeals. But two of those cases hold only that, once

a litigant nas standing to request invalidation of a particular agency

action, it may do so by identifying all grounds on which the agency may

have “‘failed to comply with its statutory mandate.” Sierra Club vy.

Adams, 578 F. 2d 389, 392 (CADC 1978) (quoting Sierra Club v. Morton,

405 U.S. 727, 737 (1972)): see also lowa Independent Bankers v. Board of

Governors of Fed. Reserve, 511 ¥. 2d 1288, 1293-1294 (CADC 1975). They

do not establish that the litigant can. by virtue of his standing to challenge

one government action. challenge other governmental actions that did not

injure him. In the third case, the Court of Appeals relied substantially on

the fact that “all courts possess an inherent power to prevent unprofes-

sional conduct by those attorneys who are practicing before them” in

allowing the Government to contest the division of a damages award it

was ordered to pay between a plaintiff and his attorney. Jackson v.

United States, 88) F.2d 707, 710-711 (CA9 1989). That situation is

rather far afield from the question before us. ~

Cite as: 547U.S. 2006) 1

(pinion of GINSBURG, J.

SUPREME COURT OF THE UNITED STATES

Nos. 04—1704 and 04-1724

DAIMLERCHRYSLER CORPORATION, ET AL.,

PETITIONERS

04-1704 U.

CHARLOTTE CUNO ET AL.

WILLIAM W. WILKINS, TAX COMMISSIONER FOR

THE STATE OF OHIO, ET AL., PETITIONERS

04-1724 v.

CHARLOTTE CUNO ET AL.

ON WRITS OF CERTIORARI TO THE UNITED STATES COURT OF

APPEALS FOR THE SIXTH CIRCUIT

[May 15, 2006]

JUSTICE GINSBURG, concurring in part and concurring in

the judgment.

Today's decision, the Court rightly points out, is solidly

grounded in longstanding precedent, Frothingham v.

Mellon (decided with Massachusetts v. Mellon), 262 U.S.

A4A7 (1923), and Doremus v. Board of Ed. of Hawthorne,

342 U.S. 429 (1952), decisions that antedate current

jurisprudence on standing to sue. See ante, at 7, 9. Froth-

ingham held nonjusticiable a federal taxpayer's suit chal-

lenging a federal-spending program. See 262 U.S., at 487

(describing taxpayer's interest as “minute and indeter-

minable”). Doremus applied Frothingham’s reasoning to a

state taxpayer's suit. 342 U.S., at 434. These decisions

exclude from federal-court cognizance claims, not deline-

ated by Congress, presenting generalized grievances. An

exception to Frothingham’s rule, recognized post-Doremus

in Flast v. Cohen, 392 U.S. 83 (1968), covers certain al-

2 DAIMLERCHRYSLER CORP. v. CUNO

Opinion of GINSBURG, J.

leged violations of the Establishment Clause. The Flast

exception has not been extended to other areas. See Bo-

wen v. Kendrick, 487 U.S. 589, 618 (1988); ef. Enrich,

Saving the States from Themselves: Commerce Clause

Constraints on State Tax Incentives for Business, 110

Harv. L. Rev. 377, 417-418 (1996).

One can accept, as I do, the nonjusticiability of Froth-

ingham-type federal and state taxpayer suits in federal

court without endorsing as well the limitations on stand-

ing later declared in Simon v. Eastern Ky. Welfare Rights

Organization, 426 U.S. 26 (1976) (EAWRO), Valley Forge

Christian College vy. Americans United for Separation of

Church and State, Inc., 454 U.S. 464 (1982), Allen vy.

Wright, 468 U.S. 737 (1984), and Lujan v. Defenders of

Wildlife, 504 U.S. 555 (1992). See EKWRO, 426 U.S., at

54—66 (Brennan, J., concurring in judgment); Valley Forge,

454A U.S., at 513-515 (STEVENS, J., dissenting); Allen, 468

U.S., at 783-795 (STEVENS, J., dissenting), and the over-

turned Court of Appeals opinion, Wright v. Regan, 656

KF. 2d 820, 828-832 (CADC 1981) (Ginsburg, J.); Defenders

of Wildlife, 504 U.S., at 582-585 (STEVENS, J., concurring

in judgment); Sunstein, What’s Standing after Lujan? Of

Citizen Suits, “Injuries,” and Article Hl, 91 Mich. L. Rev.

163, 203-205, 228-229 (1992) (contrasting Lujan, Allen,

and EKWRO with Regents of Univ. of Cal. v. Bakke, 438

U.S. 265 (1978)); Fletcher, The Structure of Standing, 98

Yale L. J. 221, 267-270 (1988) (commenting on Flast and

Valley Forge). Noting this large reservation, | concur in

the judgment, and in the balance of the Court's opinion.