STATE TAXPAYERS HAVE NO RIGHT TO CHALLENGE OHIO INVESTMENT INCENTIVE, SUPREME COURT RULES.

Held: Plaintiffs have not established their standing to challenge the state franchise tax credit. Because they have no standing to challenge that credit, the lower courts erred by considering their claims on the merits. Pp. 4-18.

ROBERTS, C. J., delivered the opinion of the Court, in which STEVENS, SCALIA, KENNEDY, SOUTER, THOMAS, BREYER, and ALITO, JJ., joined. GINSBURG, J., filed an opinion concurring in part and concurring in the judgment.

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. 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.

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 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).

Plaintiffs filed suit against various state and local officials and DaimlerChrysler in state court, alleging that these tax benefits violated the Commerce Clause. Most of the plaintiffs were residents of Toledo, who paid taxes to both the city of Toledo and State of Ohio. They claimed that they were injured because the tax breaks for DaimlerChrysler diminished the funds available to the city and State, imposing a "disproportionate burden" on plaintiffs. App. 18a, 23a, 28a.²

Defendants removed the action to the United States District Court for the Northern District of Ohio. See 28 U.S.C. § 1441. Plaintiffs filed motions to remand the case to state court. See § 1447(c). One of the grounds on which they sought remand concerned their standing. They professed "substantial doubts about their ability to satisfy either the constitutional or the prudential limitations on standing in the federal court," and urged the District Court to avoid the issue entirely by remanding. Plaintiffs' Supplemental Motion for Remand to State Court in No. 3:00cv7247, p. 13, Record Doc. 17 (footnote omitted).

The District Court declined to remand the case, concluding that, "[a]t the bare minimum, the Plaintiffs who are taxpayers have standing to object to the property tax exemption and franchise tax credit statutes under the 'municipal taxpayer standing' rule articulated in Massachusetts v. Mellon, 262 U.S. 447 (1923)." App. 78a (citations omitted). On the merits, the District Court found that neither tax benefit violated the Commerce Clause. See 154 F. Supp. 2d 1196 (2001). The Court of Appeals for the Sixth Circuit agreed with the District Court as to the municipal property tax exemption, but held that the state franchise tax credit violated the Commerce Clause. See 386 F. 3d 738 (2004). The Court of Appeals did not address the issue of standing.

Defendants sought certiorari to review the Sixth Circuit's invalidation of the franchise tax credit and plaintiffs sought certiorari to review the upholding of the property tax exemption. We granted certiorari to consider whether the franchise tax credit violates the Commerce Clause, 545 U.S. ___ (2005); the Michigan Supreme Court had decided a similar question contrary to the Sixth Circuit's analysis here. See Caterpillar, Inc. v. Dept. of Treasury, 440 Mich. 400, 488 N. W. 2d 182 (1992). We also asked the parties to address whether plaintiffs have standing to challenge the franchise tax credit in this litigation.

This Court has recognized that the case-or-controversy limitation is crucial in maintaining the "'tripartite allocation of power' " set forth in the Constitution. Valley Forge Christian College v. Americans United for Separation of Church and State, Inc., 454 U.S. 464, 474 (1982) (quoting Flast v. Cohen, 392 U.S. 83, 95 (1968)). Marshall again made the point early on, this time in a speech in the House of Representatives. "A case in law or equity," Marshall remarked,

The case-or-controversy requirement thus plays a critical role, and "Article III standing . . . enforces the Constitution's case-or- controversy requirement." Elk Grove Unified School Dist. v. Newdow, 542 U.S. 1, 11 (2004). The "core component" of the requirement that a litigant have standing to invoke the authority of a federal court "is an essential and unchanging part of the case-or- controversy requirement of Article III." Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992). The requisite elements of this "core component derived directly from the Constitution" are familiar: "A plaintiff must allege personal injury fairly traceable to the defendant's allegedly unlawful conduct and likely to be redressed by the requested relief." Allen, supra, at 751. We have been asked to decide an important question of constitutional law concerning the Commerce Clause. But before we do so, we must find that the question is presented in a "case" or "controversy" that is, in James Madison's words, "of a Judiciary Nature." 2 Records of the Federal Convention of 1787, p. 430 (M. Farrand ed. 1966). That requires plaintiffs, as the parties now asserting federal jurisdiction, to carry the burden of establishing their standing under Article III.³

The animating principle behind these cases was announced in their progenitor, Frothingham v. Mellon, decided with Massachusetts v. Mellon, 262 U.S. 447 (1923). In rejecting a claim that improper federal appropriations would "increase the burden of future taxation and thereby take [the plaintiff's] property without due process of law," the Court observed that a federal taxpayer's

Standing has been rejected in such cases because the alleged injury is not "concrete and particularized," Defenders of Wildlife, supra, at 560, but instead a grievance the taxpayer "suffers in some indefinite way in common with people generally," Frothingham, supra, at 488. In addition, the injury is not "actual or imminent," but instead "conjectural or hypothetical." Defenders of Wildlife, supra, at 560 (internal quotation marks and citations omitted). As an initial matter, it is unclear that tax breaks of the sort at issue here do in fact deplete the treasury: The very point of the tax benefits is to spur economic activity, which in turn increases government revenues. In this very action, the Michigan plaintiffs claimed that they were injured because they lost out on the added revenues that would have accompanied DaimlerChrysler's decision to expand facilities in Michigan. See n. 2, supra.

Plaintiffs' alleged injury is also "conjectural or hypothetical" in that it depends on how legislators respond to a reduction in revenue, if that is the consequence of the credit. Establishing injury requires speculating that elected officials will increase a taxpayer-plaintiff's tax bill to make up a deficit; establishing redressability requires speculating that abolishing the challenged credit will redound to the benefit of the taxpayer because legislators will pass along the supposed increased revenue in the form of tax reductions. Neither sort of speculation suffices to support standing. See ASARCO Inc. v. Kadish, 490 U.S. 605, 614 (1989) (opinion of KENNEDY, J.) ("[I]t is pure speculation whether the lawsuit would result in any actual tax relief for respondents"); Warth, 422 U.S., at 509 (criticizing a taxpayer standing claim for the "conjectural nature of the asserted injury").

A taxpayer-plaintiff has no right to insist that the government dispose of any increased revenue it might experience as a result of his suit by decreasing his tax liability or bolstering programs that benefit him. To the contrary, the decision of how to allocate any such savings is the very epitome of a policy judgment committed to the "broad and legitimate discretion" of lawmakers, which "the courts cannot presume either to control or to predict." ASARCO, supra, at 615 (opinion of KENNEDY, J.). Under such circumstances, we have no assurance that the asserted injury is "imminent" -- that it is "certainly impending." Whitmore v. Arkansas, 495 U.S. 149, 158 (1990) (internal quotation marks omitted); see Defenders of Wildlife, 504 U.S., at 564- 565, n. 2.

The foregoing rationale for rejecting federal taxpayer standing applies with undiminished force to state taxpayers. We indicated as much in Doremus v. Board of Ed. of Hawthorne, 342 U.S. 429 (1952). In that case, we noted our earlier holdings that "the interests of a taxpayer in the moneys of the federal treasury are too indeterminable, remote, uncertain and indirect" to support standing to challenge "their manner of expenditure." Id., at 433. We then "reiterate[d]" what we had said in rejecting a federal taxpayer challenge to a federal statute "as equally true when a state Act is assailed: 'The [taxpayer] must be able to show . . . that he has sustained . . . some direct injury . . . and not merely that he suffers in some indefinite way in common with people generally.'" Id., at 433-434 (quoting Frothingham, supra, at 488); see ASARCO, supra, at 613-614 (opinion of KENNEDY, J.) ("[W]e have likened state taxpayers to federal taxpayers" for purposes of taxpayer standing (citing Doremus, supra, at 434)).

The allegations of injury that plaintiffs make in their complaint furnish no better basis for finding standing than those made in the cases where federal taxpayer standing was denied. Plaintiffs claim that DaimlerChrysler's tax credit depletes the Ohio fisc and "impos[es] disproportionate burdens on [them]." App. 28a. This is no different from similar claims by federal taxpayers we have already rejected under Article III as insufficient to establish standing. See, e.g., Frothingham, 262 U.S., at 486 (allegation of injury that the effect of government spending "will be to increase the burden of future taxation and thereby take [plaintiff's] property without due process of law").

State policymakers, no less than their federal counterparts, retain broad discretion to make "policy decisions" concerning state spending "in different ways . . . depending on their perceptions of wise state fiscal policy and myriad other circumstances." ASARCO, supra, at 615 (opinion of KENNEDY, J.). Federal courts may not assume a particular exercise of this state fiscal discretion in establishing standing; a party seeking federal jurisdiction cannot rely on such "[s]peculative inferences . . . to connect [his] injury to the challenged actions of [the defendant]," Simon, 426 U.S., at 45; see also Allen, 468 U.S., at 759. Indeed, because state budgets frequently contain an array of tax and spending provisions, any number of which may be challenged on a variety of bases, affording state taxpayers standing to press such challenges simply because their tax burden gives them an interest in the state treasury would interpose the federal courts as " 'virtually continuing monitors of the wisdom and soundness'" of state fiscal administration, contrary to the more modest role Article III envisions for federal courts. See id., at 760-761 (quoting Laird v. Tatum, 408 U.S. 1, 15 (1972)).

For the foregoing reasons, we hold that state taxpayers have no standing under Article III to challenge state tax or spending decisions simply by virtue of their status as taxpayers.⁴

Quite apart from whether the franchise tax credit is analogous to an exercise of congressional power under Art. I, § 8, plaintiffs' reliance on Flast is misguided: Whatever rights plaintiffs have under the Commerce Clause, they are fundamentally unlike the right not to "'contribute three pence . . . for the support of any one [religious] establishment.'" 392 U.S., at 103 (quoting 2 Writings of James Madison 186 (G. Hunt ed. 1901)). Indeed, plaintiffs compare the Establishment Clause to the Commerce Clause at such a high level of generality that almost any constitutional constraint on government power would "specifically limit" a State's taxing and spending power for Flast purposes. 392 U.S., at 105; see Brief for Respondents 14 ("In each case, the harm to be avoided by [the two clauses] is the loss of governmental neutrality"). And even if the two clauses are similar in that they often implicate governments' fiscal decisions, see id., at 13-14, a finding that the Commerce Clause satisfies the Flast test would leave no principled way of distinguishing those other constitutional provisions that we have recognized constrain governments' taxing and spending decisions. See, e.g., Arkansas Writers' Project, Inc. v. Ragland, 481 U.S. 221 (1987) (invalidating state sales tax under the Free Press Clause). Yet such a broad application of Flast's exception to the general prohibition on taxpayer standing would be quite at odds with its narrow application in our precedent and Flast's own promise that it would not transform federal courts into forums for taxpayers' "generalized grievances." 392 U.S., at 106.

Flast is consistent with the principle, underlying the Article III prohibition on taxpayer suits, that a litigant may not assume a particular disposition of government funds in establishing standing. The Flast Court discerned in the history of the Establishment Clause "the specific evils feared by [its drafters] that the taxing and spending power would be used to favor one religion over another or to support religion in general." Id., at 103. The Court therefore understood the "injury" alleged in Establishment Clause challenges to federal spending to be the very "extract[ ion] and spen[ding]" of "tax money" in aid of religion alleged by a plaintiff. Id., at 106. And an injunction against the spending would of course redress that injury, regardless of whether lawmakers would dispose of the savings in a way that would benefit the taxpayer-plaintiffs personally. See Valley Forge, 454 U.S., at 514 (STEVENS, J., dissenting) ("[T]he plaintiffs' invocation of the Establishment Clause was of decisive importance in resolving the standing issue in [Flast] ").

Plaintiffs thus do not have state taxpayer standing on the ground that their Commerce Clause challenge is just like the Establishment Clause challenge in Flast.

And in fact events have highlighted the peril of assuming that any revenue increase resulting from a taxpayer suit will be put to a particular use. Ohio's General Assembly suspended the statutory budget mechanism that distributes franchise tax revenues to local governments in 2001 and again in its subsequent biennial budgets. See Amended Substitute H. B. 94, 124th General Assembly § 140 (2001), available at http://www.legislature.state. oh.us/BillText124/124_HB_94_ENR.pdf (all Internet materials as visited May 12, 2006, and available in Clerk of Court's case file); Amended Substitute H. B. 95, 125th General Assembly § 139 (2003), available at http://www.legislature.state.oh.us/BillText125/125_HB_95 _EN2_N.pdf; Amended Substitute H. B. 66, 126th General Assembly § 557.12 (2005), available at http://www. legislature.state.oh.us/BillText126/126_HB_66_EN2d.pdf. Any effect that enjoining DaimlerChrysler's credit will have on municipal funds, therefore, will not result from automatic operation of a statutory formula, but from a hypothesis that the state government will choose to direct the supposed revenue from the restored franchise tax to municipalities. This is precisely the sort of conjecture we may not entertain in assessing standing. See ASARCO, supra, at 614 (opinion of KENNEDY, J.).

Gibbs held that federal-question jurisdiction over a claim may authorize a federal court to exercise jurisdiction over state-law claims that may be viewed as part of the same case because they "derive from a common nucleus of operative fact" as the federal claim. 383 U.S., at 725. Plaintiffs assume that Gibbs stands for the proposition that federal jurisdiction extends to all claims sufficiently related to a claim within Article III to be part of the same case, regardless of the nature of the deficiency that would keep the former claims out of federal court if presented on their own.

Our general approach to the application of Gibbs, however, has been markedly more cautious. For example, as a matter of statutory construction of the pertinent jurisidictional provisions, we refused to extend Gibbs to allow claims to be asserted against nondiverse parties when jurisdiction was based on diversity, see Owen Equipment & Erection Co. v. Kroger, 437 U.S. 365 (1978), and we refused to extend Gibbs to authorize supplemental jurisdiction over claims that do not satisfy statutory amount-in-controversy requirements, see Finley v. United States, 490 U.S. 545 (1989). As the Court explained just last Term, "[w]e have not . . . applied Gibbs' expansive interpretive approach to other aspects of the jurisdictional statutes." Exxon Mobil Corp. v. Allapattah Services, Inc., 545 U.S. ___, ___ (2005) (slip op., at 5) (applying 28 U.S.C. § 1367, enacted in 1990, to allow a federal court in a diversity action to exercise supplemental jurisdiction over additional diverse plaintiffs whose claims failed to meet the amount-in-controversy threshold).

What we have never done is apply the rationale of Gibbs to permit a federal court to exercise supplemental jurisdiction over a claim that does not itself satisfy those elements of the Article III inquiry, such as constitutional standing, that "serv[e] to identify those disputes which are appropriately resolved through the judicial process." Whitmore, 495 U.S., at 155. We see no reason to read the language of Gibbs so broadly, particularly since our standing cases confirm that a plaintiff must demonstrate standing for each claim he seeks to press. See Allen, 468 U.S., at 752 ("[T]he standing inquiry requires careful judicial examination of a complaint's allegations to ascertain whether the particular plaintiff is entitled to an adjudication of the particular claims asserted" (emphasis added)). We have insisted, for instance, that "a plaintiff must demonstrate standing separately for each form of relief sought." Laidlaw, 528 U.S., at 185; see Los Angeles v. Lyons, 461 U.S. 95, 109 (1983). But if standing were commutative, as plaintiffs claim, this insistence would make little sense when all claims for relief derive from a "common nucleus of operative fact," as they certainly appear to have in both Laidlaw, supra, at 175-179, and Lyons, supra, at 97-98.

Plaintiffs' reading of Gibbs to allow standing as to one claim to suffice for all claims arising from the same "nucleus of operative fact" would have remarkable implications. The doctrines of mootness, ripeness, and political question all originate in Article III's "case" or "controversy" language, no less than standing does. See, e.g., National Park Hospitality Assn. v. Department of Interior, 538 U.S. 803, 808 (2003) (ripeness); Arizonans for Official English v. Arizona, 520 U.S. 43, 67 (1997) (mootness); Reservists Comm. to Stop the War, 418 U.S., at 215 (political question). Yet if Gibbs' "common nucleus" formulation announced a new definition of "case" or "controversy" for all Article III purposes, a federal court would be free to entertain moot or unripe claims, or claims presenting a political question, if they "derived from" the same "operative fact[s]" as another federal claim suffering from none of these defects. Plaintiffs' reading of Gibbs, therefore, would amount to a significant revision of our precedent interpreting Article III. With federal courts thus deciding issues they would not otherwise be authorized to decide, the "'tripartite allocation of power'" that Article III is designed to maintain, Valley Forge, 454 U.S., at 474, would quickly erode; our emphasis on the standing requirement's role in maintaining this separation would be rendered hollow rhetoric. As we have explained, "[t]he actual-injury requirement would hardly serve the purpose . . . of preventing courts from undertaking tasks assigned to the political branches[,] if once a plaintiff demonstrated harm from one particular inadequacy in government administration, the court were authorized to remedy all inadequacies in that administration." Lewis v. Casey, 518 U.S. 343, 357 (1996).

Lewis emphasized that "[t]he remedy must of course be limited to the inadequacy that produced the injury in fact that the plaintiff has established." Ibid. Plaintiffs' theory of ancillary standing would contravene this principle. Plaintiffs failed to establish Article III injury with respect to their state taxes, and even if they did do so with respect to their municipal taxes, that injury does not entitle them to seek a remedy as to the state taxes. As the Court summed up the point in Lewis, "standing is not dispensed in gross." Id., at 358, n. 6.⁵

It is so ordered.

² Other plaintiffs were residents of Toledo who claimed they were injured because they were displaced by the DaimlerChrysler expansion and Michigan residents who claimed injury because DaimlerChrysler would have expanded its operations in Michigan but for the Ohio investment tax credit. Plaintiffs neither identified these allegations as a basis for standing in their merits brief before this Court nor referred to them at oral argument. Any argument based on these allegations is therefore abandoned. See, e.g., United States v. International Business Machines Corp., 517 U.S. 843, 855, and n. 3 (1996).

³ Because defendants removed the case from state court to District Court, plaintiffs were not initially the parties that invoked federal jurisdiction. Indeed, plaintiffs initially expressed doubts as to their standing. Nonetheless, because "[w]e presume that federal courts lack jurisdiction unless the contrary appears affirmatively from the record," Renne v. Geary, 501 U.S. 312, 316 (1991) (internal quotation marks omitted), the party asserting federal jurisdiction when it is challenged has the burden of establishing it. Whatever the parties' previous positions on the propriety of a federal forum, plaintiffs, as the parties seeking to establish federal jurisdiction, must make the showings required for standing.

⁴ The majority of the Courts of Appeals to have considered the issue have reached a similar conclusion. See, e.g., Booth v. Hvass, 302 F. 3d 849 (CA8 2002); Board of Ed. of Mt. Sinai Union Free School Dist. v. New York State Teachers Retirement System, 60 F. 3d 106 (CA2 1995); Colorado Taxpayers Union, Inc. v. Romer, 963 F. 2d 1394 (CA10 1992); Taub v. Kentucky, 842 F. 2d 912 (CA6 1988); Korioth v. Briscoe, 523 F. 2d 1271 (CA5 1974); but cf. Arakaki v. Lingle, 423 F. 3d 954, 967-969 (CA9 2005) (finding state taxpayer standing in light of Hoohuli v. Ariyoshi, 741 F. 2d 1169 (CA9 1984), but noting that JUSTICE KENNEDY's opinion in ASARCO Inc. v. Kadish, 490 U.S. 605 (1989), would "carry persuasive value" absent Hoohuli).

⁵ In defending the contrary position, plaintiffs rely on three cases from the Courts of Appeals. But two of those cases hold only that, once a litigant has standing to request invalidation of a particular agency action, it may do so by identifying all grounds on which the agency may have " 'failed to comply with its statutory mandate.' " Sierra Club v. Adams, 578 F. 2d 389, 392 (CADC 1978) (quoting Sierra Club v. Morton, 405 U.S. 727, 737 (1972)); see also Iowa Independent Bankers v. Board of Governors of Fed. Reserve, 511 F. 2d 1288, 1293-1294 (CADC 1975). They do not establish that the litigant can, by virtue of his standing to challenge one government action, challenge other governmental actions that did not injure him. In the third case, the Court of Appeals relied substantially on the fact that "all courts possess an inherent power to prevent unprofessional conduct by those attorneys who are practicing before them" in allowing the Government to contest the division of a damages award it was ordered to pay between a plaintiff and his attorney. Jackson v. United States, 881 F. 2d 707, 710-711 (CA9 1989). That situation is rather far afield from the question before us.

Today's decision, the Court rightly points out, is solidly grounded in longstanding precedent, Frothingham v. Mellon (decided with Massachusetts v. Mellon), 262 U.S. 447 (1923), and Doremus v. Board of Ed. of Hawthorne, 342 U.S. 429 (1952), decisions that antedate current jurisprudence on standing to sue. See ante, at 7, 9. Frothingham held nonjusticiable a federal taxpayer's suit challenging a federal-spending program. See 262 U.S., at 487 (describing taxpayer's interest as "minute and indeterminable"). Doremus applied Frothingham's reasoning to a state taxpayer's suit. 342 U.S., at 434. These decisions exclude from federal-court cognizance claims, not delineated by Congress, presenting generalized grievances. An exception to Frothingham's rule, recognized post- Doremus in Flast v. Cohen, 392 U.S. 83 (1968), covers certain alleged violations of the Establishment Clause. The Flast exception has not been extended to other areas. See Bowen v. Kendrick, 487 U.S. 589, 618 (1988); cf. Enrich, Saving the States from Themselves: Commerce Clause Constraints on State Tax Incentives for Business, 110 Harv. L. Rev. 377, 417-418 (1996).

One can accept, as I do, the nonjusticiability of Frothingham-type federal and state taxpayer suits in federal court without endorsing as well the limitations on standing later declared in Simon v. Eastern Ky. Welfare Rights Organization, 426 U.S. 26 (1976) (EKWRO), Valley Forge Christian College v. Americans United for Separation of Church and State, Inc., 454 U.S. 464 (1982), Allen v. Wright, 468 U.S. 737 (1984), and Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992). See EKWRO, 426 U.S., at 54-66 (Brennan, J., concurring in judgment); Valley Forge, 454 U.S., at 513-515 (STEVENS, J., dissenting); Allen, 468 U.S., at 783-795 (STEVENS, J., dissenting), and the overturned Court of Appeals opinion, Wright v. Regan, 656 F. 2d 820, 828-832 (CADC 1981) (Ginsburg, J.); Defenders of Wildlife, 504 U.S., at 582-585 (STEVENS, J., concurring in judgment); Sunstein, What's Standing after Lujan? Of Citizen Suits, "Injuries," and Article III, 91 Mich. L. Rev. 163, 203-205, 228-229 (1992) (contrasting Lujan, Allen, and EKWRO with Regents of Univ. of Cal. v. Bakke, 438 U.S. 265 (1978)); Fletcher, The Structure of Standing, 98 Yale L.J. 221, 267-270 (1988) (commenting on Flast and Valley Forge). Noting this large reservation, I concur in the judgment, and in the balance of the Court's opinion.