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DaimlerChrysler Corp. v. Cuno

Supreme Court of the United States

March 1, 2006, Argued ; May 15, 2006 1, Decided

Nos. 04-1704 and 04-1724.

Opinion

 [*337]  [**1859]  [***599]    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.  [*338]  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 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.

] 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 [****12]  in [the] state, or holding 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, 825 N.E.2d 1099-Ohio-1826, P2,  105 Ohio St. 3d 312, 2005 Ohio 1826, 825 N.E.2d 1099, 1100; see Ohio Rev. Code Ann. § 5733.01 (Lexis 2005). A taxpayer that purchases "new manufacturing machinery and equipment" and installs it at sites in the State receives a credit against  [***600]  the franchise tax. See § 5733.33(B)(1) (Lexis 1999). 2 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 property tax waiver can be increased to a complete exemption. See § 5709.62(D)(1).

 [****13]  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  [*339]  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 manufacturing machinery and equipment," it was also entitled to a credit against the state franchise tax. See § 5733.33(B)(1) (Lexis 1999).

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547 U.S. 332 *; 126 S. Ct. 1854 **; 164 L. Ed. 2d 589 ***; 2006 U.S. LEXIS 3956 ****; 74 U.S.L.W. 4233; 19 Fla. L. Weekly Fed. S 185

DAIMLERCHRYSLER CORPORATION v. CHARLOTTE CUNO ET AL. WILLIAM W. WILKINS, TAX COMMISSIONER FOR THE STATE OF OHIO, ET AL., PETITIONERS v. CHARLOTTE CUNO ET AL.

Subsequent History:  [****1] US Supreme Court rehearing denied by DaimlerChrysler Corp. v. Cuno, 548 U.S. 920, 126 S. Ct. 2961, 165 L. Ed. 2d 979, 2006 U.S. LEXIS 5143 (U.S., 2006)

US Supreme Court rehearing denied by Wilkins v. Cuno, 548 U.S. 920, 126 S. Ct. 2961, 165 L. Ed. 2d 979, 2006 U.S. LEXIS 5144 (U.S., 2006)

On remand at, Remanded by Cuno v. Daimler Chrysler Corp., 197 Fed. Appx. 454, 2006 U.S. App. LEXIS 32541 (6th Cir.) (6th Cir., 2006)

Prior History: ON WRITS OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT.

Cuno v. Daimler Chrysler, Inc., 386 F.3d 738, 2004 U.S. App. LEXIS 21821 (6th Cir. Ohio, 2004)

Disposition: Vacated in part and remanded.

CORE TERMS

taxpayer, franchise tax, municipal, federal court, spending, plaintiffs', cases, standing to challenge, state taxpayer, state tax, treasury, federal jurisdiction, challenges, decisions, funds, taxpayer's suit, tax exemption, parties, courts, fiscal, allegations, conjectural, limitations, speculating, Assembly, deplete, grounds

Tax Law, State & Local Taxes, Franchise Taxes, General Overview, Real Property Taxes, Constitutional Law, Case or Controversy, Standing, The Judiciary, Separation of Powers, Elements, Evidence, Burdens of Proof, Allocation, Particular Parties, Fundamental Freedoms, Freedom of Religion, Establishment of Religion, Congressional Duties & Powers, Commerce Clause, Civil Procedure, Subject Matter Jurisdiction, Supplemental Jurisdiction, Same Case & Controversy, Pendent Claims