Facts of the Case

As part of Ohio's economic development plan, DaimlerChrysler agreed to expand its operations in Toledo in exchange for tax exemptions and tax credits worth roughly $280 million. Charlotte Cuno and others challenged the deal, however, arguing that Ohio had violated the Commerce Clause of the U.S. Constitution by offering the tax incentives. A federal district court disagreed, ruling for DaimlerChrysler, but on appeal a panel of the Sixth Circuit Court of Appeals reversed. The panel found that the tax incentives coerced businesses to expand in Ohio at the expense of other states, and were therefore unconstitutional manipulations of interstate commerce.

Question

Did Ohio violate the Commerce Clause of the U.S. Constitution by giving businesses tax incentives to expand their manufacturing operations inside Ohio?

Conclusion

The Supreme Court did not reach the central question presented, finding instead that Cuno and the other plaintiffs did not have standing to bring the suit. Chief Justice John Roberts, for the unanimous Court, wrote that simply alleging standing based on their status as taxpayers in Ohio and Michigan did not give them a sufficiently strong interest in the case. The citizens from Ohio could not definitively show that the tax incentives had decreased the amount of money available to the state treasury (and thus increased their tax burden or decreased the services available to them) because the point of the incentive was to increase long-term tax revenue. The citizens from Michigan, meanwhile, could not show that any tax revenue increase in Michigan that could have resulted from DaimlerChrysler expanding there instead of in Ohio would have actually benefited them directly, because it might have been used for programs that they did not benefit from. Without any clear injury, they had no standing to sue.