Arizona Christian School Tuition Organization  v Kathleen M. Winn Et Al. 


Respondents challenged §43–1089, a provision of the Arizona Tax Code. Section 43–1089 allowed Arizona taxpayers to obtain dollar-for-dollar tax credits of up to $500per person and $1,000 per married couple for contributions to STOs. If the credit exceeded an individual’s tax liability, the credit’s unused portion could be carried forward up to five years.

Under a version of §43–1089 in effect during the pendency of the lawsuit, a charitable organization could be deemed an STO only upon certain conditions. The organization was required to be exempt from federal taxation under §501(c)(3) of the Internal Revenue Code of 1986. It could not limit its scholarships to students attending only one school. And it had to allocate “at least ninety percent of its annual revenue for educational scholarships or tuition grants” to children attending qualified schools. 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.

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). The Supreme Court denied certiorari. Rhodes v. Killian, 528 U. S. 810 (1999).

The present action was filed in the United States District 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 violated the Establishment Clause of the First Amendment, as incorporated against the States by the Fourteenth Amendment. Respondents alleged that §43–1089 allowed 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. 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. Supreme Court 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 for failure to state a claim. But the Court of Appeals reversed. It held that respondents had standing under Flast v. Cohen 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). The Supreme Court granted certiorari.

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 traceable to the challenged action of the defendant, and not the 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.’”

In requiring a particular injury, the Supreme Court meant “that the injury must affect the plaintiff in a personal and individual way.” The question before the Supreme Court in the present case was whether respondents, the plaintiffs in the trial court, satisfied the requisite elements of standing.

Respondents suggested that their status as Arizona taxpayers provide them with standing to challenge the STO tax credit. But the Supreme Court held that absent special circumstances standing cannot be based on a plaintiff’s mere status as a taxpayer. The Supreme Court had already rejected the general proposition that an individual who had 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.

 The Supreme Court also rejected the primary contention of respondents that despite the general rule that taxpayers lack standing to object to expenditures alleged to be unconstitutional, their suit fell within the exception established by Flast v. Cohen, 392 U. S. 83.

The fact that respondents were state taxpayers did not give them standing to challenge the subsidies that §43–1089 allegedly provided to religious STOs. To alter the rules of standing or weaken their requisite elements was held to be inconsistent with the case-or-controversy limitation on federal jurisdiction imposed by Article III. The judgment of the Court of Appeals was thus reversed.