3 minute read

Valley Forge College v. Americans United

Taxpayer Standing

Prior to 1968, citizens claiming general injury as federal taxpayers in opposition to legislation authorizing government spending programs were routinely denied "standing" by the Court. Standing means that only persons considered directly affected by or involved in a dispute may sue in federal court. The persons initiating a suit must demonstrate clearly that they have "suffered some actual or threatened injury" as a result of supposedly unlawful activity, that the injury can be traced to the challenged action, and that it can be resolved by a court decision. Also, the injured party must be the one bringing legal action, not another party speaking on their behalf. These requirements also serve to protect those that may be the target of lawsuits by providing a factual forum for them to defend themselves and appeal unfavorable decisions. A taxpayer can challenge constitutionality of government spending under the various articles and amendments of the Constitution. Options include the Tax and Spend Clause of Article I, the Judicial Powers Clause of Article III, and the Establishment Clause of the First Amendment.

The restriction to federal taxpayer standing was established in 1923 by the Frothingham v. Mellow case. A taxpayer claimed financial injury by a federal law providing funds to states implementing programs to reduce maternal and infant mortality. Though the Court previously ruled taxpayers had standing to sue local governments over spending issues, the question of federal government spending had not been addressed. The Court ruled the taxpayer had no basis to bring suit by simply asserting that Congress was acting unconstitutionally. No specific injury to the individual could be identified. The Court asserted "the relation of a taxpayer to the United States is very different" than with local governments because their interest was "shared with millions of others." Any personal effects would be comparatively minor. The Court wrote, "The party who invokes the power [of judicial review] must be able to show not only that the (law) is invalid but that he has sustained or is immediately in danger of sustaining some direct injury as a result of its enforcement, and not merely that he suffers in some indefinite way in common with people generally."

The Frothington prohibition rigidly held until 1968 when the Court created a limited exception. In Flast v. Cohen (1968), the Court determined the Establishment Clause of the First Amendment provided sufficient connection between the taxpayer's constitutional claims and government spending to create standing.

In the Valley Forge case, the district court dismissed the lawsuit ruling that Americans United failed to demonstrate any actual injury other than disagreement with the government action. Americans United then appealed to the U.S. Court of Appeals which reversed the lower court's decision. The court of appeals agreed with the district court's finding that American United lacked standing for suing as American taxpayers, but asserted that they "had standing merely as `citizens,' claiming (injury) to their . . . right to a government that `shall make no law respecting the establishment of religion.'" The college appealed to the Supreme Court.

In assessing Americans United's standing, Justice Rehnquist, writing on behalf of the 5-4 majority, found that Americans United were challenging the action by HEW under the Tax and Spending Clause of Article I, but HEW was actually operating under the Property Clause of Article IV. Taxpayer standing did not apply to land grant actions under that article. Rehnquist claimed that citizens as taxpayers could only challenge congressional spending, not spending by the executive branch of government. Rehnquist noted that the property in question was in Pennsylvania, the respondents lived in Maryland and Virginia with their office in Washington, D.C., and that they learned of the transfer through a news release. The Court concluded "that any connection between the challenged property transfer and respondents' tax burden is at best speculative and at worst nonexistent." In fact public funds spent in acquiring the property and building the facility were actually spent 30 years before Americans United claimed injury. In finding no specific injury, Rehnquist wrote that "standing is not measured by the intensity of the litigant's interest or fervor of this advocacy." In sum, Rehnquist wrote that the Establishment Clause does not provide citizens "a special license to roam the country in search of governmental wrongdoing and to reveal their discoveries in federal court. The federal courts were simply not created as overseers of the general welfare." Rehnquist sharply criticized the lower court by going out of their way in finding "an available plaintiff" to try the case. The Court reversed the court of appeals decision essentially overruling the Establishment Clause exemption of Flast.

Additional topics

Law Library - American Law and Legal InformationNotable Trials and Court Cases - 1981 to 1988Valley Forge College v. Americans United - Significance, Taxpayer Standing, Right To Sue, Impact