Wednesday, December 11, 2019

BREAKING: A 2nd Bad Day In a Row For Arizona AG At U.S. Supreme Court: Solicitor General Opposes AZ Effort To Sue California For Unconstitutional Taxes

Arizona Attorney General Mark Brnovich has suffered back-to-back setbacks in the U.S. Supreme Court on successive days, when the U.S. Solicitor General filed its long-awaited brief Tuesday night strongly urging the Court to reject Arizona's effort to sue California for unconstitutional taxes.

The case was one of two attempts by Arizona this year to convince the highest court in the land to accept original jurisdiction of a legal action (rather than its normal appellate jurisdiction). The Supreme Court rejected the other one on Monday, when it ordered that Arizona could not sue Purdue Pharma and the Sackler family in the Supreme Court.

The filing against California is a less unusual case than the Purdue Pharma/Sackler opioid profits effort. In June, the Justices asked the U.S. Solicitor General to file a brief expressing the Department of Justice's position on whether the high court should consider Arizona's case against California.

The Solicitor General's position was not friendly to Arizona. Against the backdrop that the Supreme Court has often said that it should only accept original jurisdiction cases sparingly, the SG states that this is not such a case:
"Arizona does not assert the types of interests that would warrant such an exercise, and the issues Arizona seeks to present can be adequately raised and litigated by Arizona entities that are actually subject to the tax. In addition, Arizona’s Due Process and Commerce Clause claims would more appropriately be considered on developed factual records concerning affected entities and with the benefit of authoritative interpretations of the relevant statutes by the California courts. Arizona’s Fourth Amendment claim also does not warrant an exercise of this Court’s original jurisdiction because it similarly seeks to advance personal rights and does not otherwise warrant an exercise of original jurisdiction."
Arizona alleges that California unconstitutionally taxes Arizona LLCs for doing business in California - even if that LLC is only an investor in another company that does business in the Golden State. For more information on Arizona's proposed Complaint, here is our first article on the case.

The Supreme Court Justices are not bound to accept the Solicitor General's conclusion, but it is very unusual for the Court to ask the SG to weigh in and to then ignore the opinion.

("AZ Law" has asked the Attorney General's office for response and will update this article as warranted.)


*Arizona's Solicitor General argued in front of the U.S. Supreme Court earlier today in the McKinney v. Arizona death penalty case; no inferences should be drawn as to how those oral arguments were received. Nor does "AZ Law" think that either of the AG's original jurisdiction efforts were unwise.
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