Wednesday, March 17, 2010
Morgan L. Holcomb (Hamline) & Nicholas Allen Smith (J.D. 2009, Minnesota) have published The Post-Cuno Litigation Landscape, 58 Case W. Res. L. Rev. 1157 (2008). Here is the part of the Introduction:
[T]here is a sustained and vigorous debate about whether [state tax incentive programs] work. Proponents hope that tax incentives will “attract new and expanding businesses, create thousands of good jobs, contribute to robust economic health, and restore a sense of hope for the future.” Critics, on the other hand, argue that the incentives do not create jobs or spur economic growth, and that the tax incentives end up costing more than the economic activity they generate. Despite the debate, there is no indication that states or localities are jumping off the tax-incentive treadmill. ...
In addition to the debate about efficacy of the tax incentives, there is an equally vigorous debate about whether the schemes are constitutional. This debate came to the fore in 1996 when Professor Peter Enrich of Northeastern University School of Law wrote in the Harvard Law Review that state tax incentives are not constitutional and set forth his thesis that the incentives, at least as some of them are promulgated, violate the Commerce Clause. Enrich's article garnered the attention of consumer activist Ralph Nader, who contacted Enrich and encouraged him to litigate the question.
This article begins by describing the constitutional landscape into which Enrich cast his argument. We then turn to the litigation that Enrich's article has generated, including Enrich's own case, Cuno v. DaimlerChrysler Corp., which held the promise of resolving this dormant Commerce Clause question, only to wither away on the vine of standing. Following our discussion of Cuno, this article will turn to an exploration of the litigation that is currently proceeding in two state courts: Minnesota and North Carolina. We conclude by offering our perspective on the trends that appear from the state court litigation.