Levin v. Commerce Energy, Inc. - Oral Argument - March 22, 2010

Levin v. Commerce Energy, Inc.

Media for Levin v. Commerce Energy, Inc.

Audio Transcription for Opinion Announcement - June 01, 2010 in Levin v. Commerce Energy, Inc.

Audio Transcription for Oral Argument - March 22, 2010 in Levin v. Commerce Energy, Inc.

John G. Roberts, Jr.:

We will hear argument next this morning in Case 09-223, Levin, the Tax Commissioner, v. Commerce Energy.

Stephen G. Breyer:

If that's correct, I have found no case that -- I haven't looked that hard, but certainly no case in this Court -- that said there is standing for a firm to challenge the taxes of a competitor where the remedy is: Raise his taxes.

Forget comity.

John G. Roberts, Jr.:

Mr. Mizer.

Benjamin C. Mizer:

Mr. Chief Justice, and may it please the Court:

Respondents are natural gas suppliers who object to the way Ohio taxes them.

Their suit belongs in State court rather than Federal court for two independent reasons.

First, principles of comity and federalism dictate that the State court should resolve challenges to the validity of their own tax laws.

And second, the Tax Injunction Act squarely prohibits Federal courts from issuing declaratory judgments holding State tax laws unconstitutional.

Although either of these grounds would independently support reversal of the Sixth Circuit here, the analysis can really begin and end with the comity doctrine, because that is where the lower courts have shown confusion in the--

Stephen G. Breyer:

Before you get into that, I have a question that there may be an obvious answer to, but I haven't found it.

My understanding is -- it's a standing question.

My understanding is that they are asking as relief, and the only relief they ask for, is to raise the taxes of a competitor.

Am I right?

Benjamin C. Mizer:

--That is how they have -- that is the case, correct.

Stephen G. Breyer:


If there were standing for such a thing, it would -- I'm surprised that there aren't competitors all over the country doing business out of State bringing diversity cases in Federal court, saying: My competitor's taxes should increase; it's all very complicated, but the Commissioner didn't properly follow State law.

Now, I have found no case, certainly not in this Court, which said: Where all you want is to raise the tax of a competitor, you have standing.

So perhaps this is well-settled that you can do it, but I thought I would raise that for both of you at the beginning in case there is something you want to say about it, which might save me a little time looking it all up.

Benjamin C. Mizer:

Well, I think there is a good reason that there -- there aren't cases in the Federal courts to that effect, but it's not a standing problem.

And to address the standing point directly, it's because they do claim an injury that is cognizable.

Under Dennis v. Higgins, they are claiming a dormant Commerce Clause injury.

Stephen G. Breyer:

I have no doubt, and the standing rule I think is clear, that if we're saying because I am injured, and they have injury, you can't -- you must give me reduction in my tax.

That's what those cases say.

I have no problem with that.

Absolutely clear.

You can do it.

But where all you want is to raise somebody else's taxes, that I had thought -- and probably wrongly, but I had thought there is a prudential standing rule that says you cannot bring such a lawsuit.

And I don't see why you should be able to.

It seems to me it would be a nightmare if you could, which doesn't surprise.