On Monday the United States Supreme Court, in Armour v. City of Indianapolis, ruled that a tax forgiveness plan that effectively caused some to pay as much as 30 times more for a sewer hook-up than their neighbors did not violate the Fourteenth Amendment's Equal Protection clause, according to the ABA Journal.

The crux of the case was the city of Indianapolis' decision to allow certain individuals to forgo payments owed on a sewer improvement fee installment plan. By contrast, others who had paid the entire $9,278 fee in one lump sum were refused refunds.

In a 6-3 decision, authored by Justice Stephen Breyer the nation's high  Court ruled that the city had a rational basis for the distinction and, accordingly, found that the city did not commit an equal protection violation.

Rational basis review is the most deferential form of judicial review employed by the Supreme Court. In practice, when it is applied in an equal protection challenge it almost always results in a victory for the state.

The court determined that the city had rationally chosen to forgive the sewer debt because it was adopting a new payment system that financed sewer projects in part through bonds.

“Distinguishing past payments from future obligations is a line well known to the law,” Breyer wrote. “Sometimes such a line takes the form of an amnesty program, involving, say, mortgage payments, taxes or parking tickets.”

Continuing to collect the installment debt that was in some cases as low as $25 a month would be “complex and expensive,” Breyer added. The costs would continue even as the number of debtors dissipated, “thereby continuously increasing the per-debtor cost of collection.”

Instituting a refund policy would add further administrative costs, Breyer continued.

“Even if petitioners have found a superior system, the Constitution does not require the city to draw the perfect line nor even to draw a line superior to some other line it might have drawn,” Breyer said. “It requires only that the line actually drawn be a rational line.”

Essentially, what Justice Breyer is saying is that the policy can be both over and under-inclusive in getting at it's proffered objective, as long as it is not arbitrary nor discriminatory.

Breyer distinguished Armour from a 1989 Supreme Court case, Allegheny Pittsburgh Coal Co. v. Commission of Webster County, in which a tax assessor determined property values based on the last sale. The opinion finding an equal protection violation involved “a clear state law requirement [requiring equal valuation] clearly and dramatically violated,” he said.

The dissenting opinion in the case was authored by Chief Justice John G. Roberts Jr. and joined by Justices Scalia and Alito.  The dissent noted the differential effect that the city policy had, as some homeowners whose fees were forgiven had paid as little as $309, which was 30 times less than the lump-sum fee.

“Our precedents do not ask for much from government in this area—only ‘rough equality in tax treatment,’ ” Roberts wrote. “It is and should be; we give great leeway to taxing authorities in this area, for good and sufficient reasons. 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.”

The dissent voiced their view that, although most economic and tax based government policy satisfies rationale basis review, there are certain instances, such as this one, where the 3 justices feel that the Court needs to put its foot down.

What do you think?


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