Today’s Supreme Court decision in Armour v. City of Indianapolis presents another lamentable setback for folks (myself included) who’d like to rehabilitate a “rational basis” test that requires an actually—if minimally—rational basis for “economic” government regulation.
Indiana’s “Barrett Law” allows cities to pay for public improvements by apportioning the costs of a project “equally among all abutting lands or lots.” Here, the City of Indianapolis built a sewer serving 180 households. It sent those households a formal notice explaining that each homeowner could pay the entire assessment ($9,278 per property) in a lump sum or in installments, which would include interest at a 3.5% annual rate. 38 homeowners chose to pay up front; all others chose one of several installment plans. The next year, however, the city adopted a different financing scheme. While forgiving all future assessments and payments, the city decided to keep payments already made. It cited two reasons: administrative costs and convenience, and the fact that refunds would prove “fiscally challenging.”
In a 6-3 decision, the Supreme Court sustained the city’s action against the upfront payers’ Equal Protection challenge. All that is needed, Justice Breyer’s opinion for the Court declares, is some rational basis, and administrative convenience is rational. Justice Breyer cites Carolene Products (the origin of the supposed rational basis “test”) three times, and he embraces the most extravagant version of the test: it commands “the one attacking the legislative arrangement to negative every conceivable basis which might support it” [case cites omitted]. Justice Breyer’s opinion fails to explain how this might conceivably be done.
Chief Justice Roberts supplied a trenchant dissent, joined by Justices Alito and Scalia. In justifying a disparity of over 30-1 in payments among equally situated taxpayers, the Chief writes,
the City explained that it was presented with three choices: First, it could have continued to collect the installment plan payments of those who had not yet settled their debts under the old system. Second, it could have forgiven all those debts and given equivalent refunds to those who had made lump sum payments up front. Or third, it could have forgiven the future payments and not refunded payments that had already been made. The first two choices had the benefit of complying with state law, treating all of Indianapolis’s citizens equally, and comporting with the Constitution. The City chose the third option.
Administrative convenience, the dissent continues, cannot justify this move. The unanimous decision in Allegheny Pittsburgh Coal v. Webster County, 488 U.S. 336 (1989), is to the contrary. (Justice Breyer’s opinion distinguishes the case on the ipse dixit grounds that it doesn’t apply.) In any event, Chief Justice Roberts notes, “[t]he Equal Protection Clause does not provide that no State shall ‘deny to any person within its jurisdiction the equal protection of the laws, unless it’s too much of a bother.’” As for the city’s argument that refunds would be “fiscally challenging” because funds had already been expended, the government “cannot evade returning money to its rightful owner by the simple expedient of spending it.”
Granted (the Chief concludes): for good reasons, the Court cuts government a lot of slack in configuring tax obligations.
But every generation or so a case comes along when this Court needs to say enough is enough, if the Equal Protection Clause is to retain any force in this context. Allegheny Pittsburgh was such a case; so is this one.
That just about sums it up. It is difficult to understand the majority’s opinion as anything other than an endorsement of an “anything goes” principle of Equal Protection.
A word about Justice Thomas’s decision to vote with the majority in this case (without a separate concurrence): with all respect due a great man and very fine justice, Armour illustrates that his silence during oral argument can be prejudicial to a party and its lawyers. The lively oral argument in Armour was no cakewalk for either side (Mark Stancil arguing for plaintiffs, Paul Clement for Indianapolis). Inasmuch as Justice Thomas is no fan of the “anything goes in economic regulation” school of thought, he probably has a specific reason for voting as he did. Had he voiced his concerns in oral argument, Mark Stancil might well have had an answer that would have persuaded Justice Thomas and, conceivably, Justice Kennedy as well. (Lyle Denniston’s argument recap suggests that Justice Kennedy was ambivalent about the case.) As it is, Mr. Stancil and his clients will never know, and neither will the rest of us.