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Arizona Christian School Tuition Organization v. Winn

April 4, 2011 *fn1





Argued November 3, 2010

Respondents, Arizona taxpayers, sued petitioner Director of the State Department of Revenue, challenging Ariz. Rev. Stat. Ann. §43--1089 on Establishment Clause grounds. The Arizona law gives tax credits for contributions to school tuition organizations, or STOs, which then use the contributions to provide scholarships to students attending private schools, including religious schools. Petitioner Arizona Christian School Tuition Organization and others later intervened. The District Court dismissed the suit for failure to state a claim. Reversing, the Ninth Circuit held that respondents had standing as taxpayers under Flast v. Cohen, 392 U. S. 83, and had stated an Establishment Clause claim.

Held: Because respondents challenge a tax credit as opposed to a governmental expenditure, they lack Article III standing under Flast v. Cohen, supra. Pp. 4--19.

(a) Article III vests in the Federal Judiciary the "Power" to resolve "Cases" and "Controversies." That language limits the Federal Judiciary to the traditional role of Anglo-American courts: redressing injuries resulting from a specific legal dispute. To obtain a ruling on the merits in federal court a plaintiff must assert more than just the "generalized interest of all citizens in constitutional governance." Schlesinger v. Reservists Comm. to Stop the War, 418 U. S. 208, 217. Instead the plaintiff must establish standing, which requires "an 'injury in fact'"; "a causal connection between the injury and the conduct complained of"; and a conclusion that it is "'likely,' as opposed to merely 'speculative,' that the injury will be 'redressed by a favorable decision.' " Lujan v. Defenders of Wildlife, 504 U. S. 555, 560--561. Pp. 4--6.

(b) In general, the mere fact that someone is a taxpayer does not provide standing to seek relief in federal court. The typical assertion of taxpayer standing rests on unjustifiable economic and political speculation. See Frothingham v. Mellon, 262 U. S. 447; Doremus v. Board of Ed. of Hawthorne, 342 U. S. 429. When a government ex-pends resources or declines to impose a tax, its budget does not necessarily suffer. Even assuming the State's coffers are depleted, finding injury would require a court to speculate "that elected officials will increase a taxpayer-plaintiff's tax bill to make up a deficit." DaimlerChrysler Corp. v. Cuno, 547 U. S. 332, 344. And to find redressability a court must assume that, were the taxpayers' remedy allowed, "legislators [would] pass along the supposed increased revenue in the form of tax reductions." Ibid. These conclusions apply to the present cases. The costs of education may be a significant portion of Arizona's annual budget, but the tax credit, by facilitating the operation of both religious and secular private schools, could relieve the burden on public schools and provide cost savings to the State. Even if the tax credit had an adverse effect on Arizona's budget, problems would remain. To find a particular injury in fact would require speculation that Arizona lawmakers react to revenue shortfalls by in-creasing respondents' tax liability. A causation finding would depend on the additional assumption that any tax increase would be traceable to the STO tax credit. And respondents have not established that an injunction against the credit's application would prompt Arizona legislators to "pass along [any] increased revenue [as] tax reductions." Ibid. Pp. 6--10.

(c) Respondents' suit does not fall within the narrow exception to the rule against taxpayer standing established in Flast v. Cohen, supra. There, federal taxpayers had standing to mount an Establishment Clause challenge to a federal statute providing General Treasury funds to support, inter alia, textbook purchases for religious schools. To have standing under Flast, taxpayers must show (1) a "logical link" between the plaintiff's taxpayer status "and the type of legislative enactment attacked," and (2) "a nexus" between such tax-payer status and "the precise nature of the constitutional infringement alleged." 392 U. S., at 102. Considering the two requirements together, Flast explained that individuals suffer a particular injury when, in violation of the Establishment Clause and by means of "the taxing and spending power," their property is transferred through the Government's Treasury to a sectarian entity. Id., at 105--106.

"The taxpayer's allegation in such cases would be that his tax money is being extracted and spent in violation of specific constitutional protections against such abuses of legislative power." Id., at 106. The STO tax credit does not visit the injury identified in Flast. When the Government spends funds from the General Treasury, dissenting taxpayers know that they have been made to contribute to an establishment in violation of conscience. In contrast, a tax credit allows dissenting taxpayers to use their own funds in accordance with their own consciences. Here, the STO tax credit does not "extrac[t] and spen[d]" a conscientious dissenter's funds in service of an establishment, 392 U. S., at 106, or " 'force a citizen to contribute' " to a sectarian organization, id., at 103. Rather, taxpayers are free to pay their own tax bills without contributing to an STO, to contribute to a religious or secular STO of their choice, or to contribute to other charitable organizations. Because the STO tax credit is not tantamount to a religious tax, respondents have not alleged an injury for standing purposes. Furthermore, respondents cannot satisfy the requirements of causation and redressability. When the government collects and spends taxpayer money, governmental choices are responsible for the transfer of wealth; the resulting subsidy of religious activity is, under Flast, traceable to the government's expenditures; and an injunction against those expenditures would address taxpayer-plaintiffs' objections of conscience. Here, by contrast, contributions result from the decisions of private taxpayers regarding their own funds. Private citizens create private STOs; STOs choose beneficiary schools; and taxpayers then contribute to STOs. Any injury the objectors may suffer are not fairly traceable to the government. And, while an injunction most likely would reduce contributions to STOs, that remedy would not affect noncontributing taxpayers or their tax payments. Pp. 10--16.

(d) Respondents' contrary position-that Arizonans benefiting from the tax credit in effect are paying their state income tax to STOs- assumes that all income is government property, even if it has not come into the tax collector's hands. That premise finds no basis in standing jurisprudence. This Court has sometimes reached the merits in Establishment Clause cases involving tax benefits as opposed to governmental expenditures. See Mueller v. Allen, 463 U. S. 388; Nyquist v. Mauclet, 432 U. S. 1; Hunt v. McNair, 413 U. S. 734; Walz v. Tax Comm'n of City of New York, 397 U. S. 664. But those cases did not mention standing and so do not stand for the proposition that no jurisdictional defects existed. Moreover, it is far from clear that any non-binding sub silentio standing determinations in those cases de-pended on Flast, as there are other ways of establishing standing in Establishment Clause cases involving tax benefits. Pp. 16--18.

562 F. 3d 1002, reversed.

KENNEDY, J., delivered the opinion of the Court, in which ROBERTS, C. J., and SCALIA, THOMAS, and ALITO, JJ., joined. SCALIA, J., filed a concurring opinion, in which THOMAS, J., joined. KAGAN, J., filed a dissenting opinion, in which GINSBURG, BREYER, and SOTOMAYOR, JJ., joined.

The opinion of the court was delivered by: Justice Kennedy

563 U. S. ____ (2011)

Opinion of the Court

Arizona provides tax credits for contributions to school tuition organizations, or STOs. STOs use these contributions to provide scholarships to students attending private schools, many of which are religious. Respondents are a group of Arizona taxpayers who challenge the STO tax credit as a violation of Establishment Clause principles under the First and Fourteenth Amendments. After the Arizona Supreme Court rejected a similar Establishment Clause claim on the merits, respondents sought intervention from the Federal Judiciary.

To obtain a determination on the merits in federal court, parties seeking relief must show that they have standing under Article III of the Constitution. Standing in Estab­ lishment Clause cases may be shown in various ways. Some plaintiffs may demonstrate standing based on the direct harm of what is claimed to be an establishment of religion, such as a mandatory prayer in a public school classroom. See School Dist. of Abington Township v. Schempp, 374 U. S. 203, 224, n. 9 (1963). Other plaintiffs may demonstrate standing on the ground that they have incurred a cost or been denied a benefit on account of their religion. Those costs and benefits can result from alleged discrimination in the tax code, such as when the availability of a tax exemption is conditioned on religious affiliation. See Texas Monthly, Inc. v. Bullock, 489 U. S. 1, 8 (1989) (plurality opinion).

For their part, respondents contend that they have standing to challenge Arizona's STO tax credit for one and only one reason: because they are Arizona taxpayers. But the mere fact that a plaintiff is a taxpayer is not generally deemed sufficient to establish standing in federal court. To overcome that rule, respondents must rely on an exception created in Flast v. Cohen, 392 U. S. 83 (1968). For the reasons discussed below, respondents cannot take advantage of Flast's narrow exception to the general rule against taxpayer standing. As a consequence, respondents lacked standing to commence this action, and their suit must be dismissed for want of jurisdiction.


Respondents challenged §43--1089, a provision of the Arizona Tax Code. See 1997 Ariz. Sess. Laws §43--1087, codified, as amended, Ariz. Rev. Stat. Ann. §43--1089 (West Supp. 2010). Section 43--1089 allows Arizona taxpayers to obtain dollar-for-dollar tax credits of up to $500 per person and $1,000 per married couple for contributions to STOs. §43--1089(A). If the credit exceeds an individual's tax liability, the credit's unused portion can be carried forward up to five years. §43--1089(D). Under a version of §43--1089 in effect during the pendency of this lawsuit, a charitable organization could be deemed an STO only upon certain conditions. See §43--1089 (West 2006). The organization was required to be exempt from federal taxation under §501(c)(3) of the Internal Revenue Code of 1986. §43--1089(G)(3) (West Supp. 2005). It could not limit its scholarships to students attending only one school. Ibid. And it had to allocate "at least ninety per cent of its annual revenue for educational scholarships or tuition grants" to children attending qualified schools. Ibid. A "qualified school," in turn, was defined in part as a private school in Arizona that did not discriminate on the basis of race, color, handicap, familial status, or national origin. §43--1089(G)(2).

In an earlier lawsuit filed in state court, Arizona taxpayers challenged §43--1089, invoking both the United States Constitution and the Arizona Constitution. The Arizona Supreme Court rejected the taxpayers' claims on the merits. Kotterman v. Killian, 193 Ariz. 273, 972 P. 2d 606 (1999). This Court denied certiorari. Rhodes v. Killian, 528 U. S. 810 (1999); Kotterman v. Killian, 528 U. S. 921 (1999).

The present action was filed in the United States Dis­ trict Court for the District of Arizona. It named the Director of the Arizona Department of Revenue as defendant. The Arizona taxpayers who brought the suit claimed that §43--1089 violates the Establishment Clause of the First Amendment, as incorporated against the States by the Fourteenth Amendment. Respondents alleged that §43-- 1089 allows STOs "to use State income-tax revenues to pay tuition for students at religious schools," some of which "discriminate on the basis of religion in selecting students." Complaint in No. 00--0287 (D Ariz.), ¶¶29--31, App. to Pet. for Cert. in No. 09--987, pp. 125a--126a. Respondents requested, among other forms of relief, an injunction against the issuance of §43--1089 tax credits for contributions to religious STOs. The District Court dismissed respondents' suit as jurisdictionally barred by the Tax Injunction Act, 28 U. S. C. §1341. The Court of Appeals reversed. This Court agreed with the Court of Appeals and affirmed. Hibbs v. Winn, 542 U. S. 88 (2004).

On remand, the Arizona Christian School Tuition Organization and other interested parties intervened. The District Court once more dismissed respondents' suit, this time for failure to state a claim. Once again, the Court of Appeals reversed. It held that respondents had standing under Flast v. Cohen, supra. 562 F. 3d 1002 (CA9 2009). Reaching the merits, the Court of Appeals ruled that respondents had stated a claim that §43--1089 violated the Establishment Clause of the First Amendment. The full Court of Appeals denied en banc review, with eight judges dissenting. 586 F. 3d 649 (CA9 2009). This Court granted certiorari. 560 U. S. __ (2010).


he concept and operation of the separation of powers in our National Government have their principal foundation in the first three Articles of the Constitution. Under Article III, the Federal Judiciary is vested with the "Power" to resolve not questions and issues but "Cases" or "Controversies." This language restricts the federal judicial power "to the traditional role of the Anglo-American courts." Summers v. Earth Island Institute, 555 U. S. 488, ___ (2009) (slip op., at 4). In the English legal tradition, the need to redress an injury resulting from a specific dispute taught the efficacy of judicial resolution and gave legitimacy to judicial decrees. The importance of resolving specific cases was visible, for example, in the incremental approach of the common law and in equity's consideration of exceptional circumstances. The Framers paid heed to these lessons. See U. S. Const., Art. III, § 2 ("The judicial Power shall extend to all Cases, in Law and Equity . . . ").

By rules consistent with the longstanding practices of Anglo-American courts a plaintiff who seeks to invoke the federal judicial power must assert more than just the "generalized interest of all citizens in constitutional governance." Schlesinger v. Reservists Comm. to Stop the War, 418 U. S. 208, 217 (1974).

Continued adherence to the case-or-controversy requirement of Article III maintains the public's confidence in an unelected but restrained Federal Judiciary. If the judicial power were "extended to every question under the constitution," Chief Justice Marshall once explained, federal courts might take possession of "almost every subject proper for legislative discussion and decision." 4 Papers of John Marshall 95 (C. Cullen ed. 1984) (quoted in DaimlerChrysler Corp. v. Cuno, 547 U. S. 332, 341 (2006)). The legislative and executive departments of the Federal Government, no less than the judicial department, have a duty to defend the Constitution. See U. S. Const., Art. VI, cl. 3. That shared obligation is incompatible with the suggestion that federal courts might wield an "unconditioned authority to determine the constitutionality of legislative or executive acts." Valley Forge Christian College v. Americans United for Separation of Church and State, Inc., 454 U. S. 464, 471 (1982). For the federal courts to decide questions of law arising outside of cases and controversies would be inimical to the Constitution's democratic character. And the resulting conflict between the judicial and the political branches would not, "in the long run, be beneficial to either." United States v. Richardson, 418 U. S. 166, 188--189 (1974) (Powell, J., concurring). Instructed by Chief Justice Marshall's admonition, this Court takes care to observe the "role assigned to the judiciary" within the Constitution's "tripartite allocation of power." Valley Forge, supra, at 474 (internal quotation marks omitted).


To state a case or controversy under Article III, a plaintiff must establish standing. Allen v. Wright, 468 U. S. 737, 751 (1984). The minimum constitutional requirements for standing were explained in Lujan v. Defenders of Wildlife, 504 U. S. 555 (1992).

"First, the plaintiff must have suffered an 'injury in fact'-an invasion of a legally protected interest which is (a) concrete and particularized, and (b) 'actual or imminent, not "conjectural" or "hypothetical.' " Second, there must be a causal connection between the injury and the conduct complained of-the injury has to be 'fairly . . . trace[able] to the challenged action of the defendant, and not . . . th[e] result [of] the independent action of some third party not before the court.' Third, it must be 'likely,' as opposed to merely 'speculative,' that the injury will be 'redressed by a favorable decision.' " Id., at 560--561 (citations and footnote omitted).

In requiring a particular injury, the Court meant "that the injury must affect the plaintiff in a personal and individual way." Id., at 560, n. 1. The question now before the Court is whether respondents, the plaintiffs in the trial court, satisfy the requisite elements of standing.


Respondents suggest that their status as Arizona taxpayers provides them with standing to challenge the STO tax credit. Absent special circumstances, however, standing cannot be based on a plaintiff's mere status as a taxpayer. This Court has rejected the general proposition that an individual who has paid taxes has a "continuing, legally cognizable interest in ensuring that those funds are not used by the Government in a way that violates the Constitution." Hein v. Freedom From Religion Foundation, Inc., 551 U. S. 587, 599 (2007) (plurality opinion). This precept has been referred to as the rule against taxpayer standing.

The doctrinal basis for the rule was discussed in Froth-ingham v. Mellon, 262 U. S. 447 (1923) (decided with Massachusetts v. Mellon). There, a taxpayer-plaintiff had alleged that certain federal expenditures were in excess of congressional authority under the Constitution. The plaintiff argued that she had standing to raise her claim because she had an interest in the Government Treasury and because the allegedly unconstitutional expenditure of Government funds would affect her personal tax liability. The Court rejected those arguments. The "effect upon future taxation, of any payment out of funds," was too "remote, fluctuating and uncertain" to give rise to a case or controversy. Id., at 487. And the taxpayer-plaintiff's "interest in the moneys of the Treasury," the Court recognized, was necessarily "shared with millions of others." Ibid. As a consequence, Frothingham held that the ...

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