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Meet Florida taxpayer, Ms. Flora. She inherited a house in Missouri from her late mother, FloraBell. Ms. Flora lives for most of the year in Southwest Florida. Flora was raised in Missouri and went to school in that state. She was active in taxpayer rights issues after seeing her father fight against an erroneous assessment which caused a bankruptcy of her father’s small business. She has heard from a long time neighbor in Missouri about a very wasteful project to use tax monies in a road to nowhere project which also has environmental implications. With this in mind, her friend in Missouri solicits her to help fight the project. Flora also went to law school after leaving Missouri and is passionate about misuse of taxes. She undertakes to determine her rights in Missouri. She finds the decision in Collins v. Vernon, 512 S.W.2d 470, 473 (Mo. App. Ct. 1974). This decision gives her hope for success because she recognizes that she can take action in Missouri. The court stated the right to do so this way:

It is a well-recognized rule that an aggrieved taxpayer may institute a suit against a governmental unit to seek relief for an alleged illegal or improper act. This rule was first recognized in the jurisprudence of this state in Newmeyer v. Mo. & Miss. R.R. Co., 52 Mo. 81 (1873). The rationale for such a rule is that a taxpayer has an ‘equitable ownership’ of public funds and any illegal expenditure of such funds will subject the taxpayer to a liability to ‘. . . replenish any deficiency resulting from the misappropriation.’ Everett v. County of Clinton, 282 S.W.2d 30, 35 (Mo. 1955).

She has a sister Alma who winters in Florida but lives most of the year in Alabama. Her sister, a former Alabama judge, advises Flora that Alabama law is clear on this issue and is very similar to Missouri in authorizing legal action. Alma points to the decision of the Alabama Supreme court in Working v. Jefferson Cty. Election Comm'n, 2 So. 3d 827, 832–33 (Ala. 2008) That opinion confirms her cousins opinion stating in part :

In a long line of decisions this Court has recognized the right of a taxpayer to challenge, either as unconstitutional or as not conforming to statute, the expenditure of public funds by county officers.” Zeigler v. Baker, 344 So.2d 761, 763 (Ala.1977) (quoted with approval in Henson v. HealthSouth Med. Ctr., 891 So.2d 863, 866 (Ala.2004)). See also Alabama State Florists Ass'n, Inc. v. Lee County Hosp. Bd., 479 So.2d 720, 722 (Ala.1985)

Curious about Florida law on the subject of challenging government actions while preparing for filing an action in Missouri, she contacts her friend James in Tampa. He is with a Florida law firm and focuses on taxation issues. He advises her of the legal concept in Florida known as “special injury” standing. Unfamiliar with the term, she forages into some legal research on the subject of Florida taxation and finds the decision in North Broward Hospital District v Fornes, 476 So.2d 154 (Fla. 1985)

The decision in North Broward Hospital District v Fornes, 476 So.2d 154 (Fla. 1985) framed the question of great public importance as the following:

Does a taxpayer who alleges that the taxing authority is acting illegally in expending public funds, which will increase his tax burden, have standing to sue to prevent such expenditure, or is it necessary that he suffer some other special injury distinct from other taxpayers (as opposed to other inhabitants) or launch a constitutional attack upon the taxing authority’s action in order to have standing?

Having read the question of “great public importance”, Flora thought she knew the answer because she has read opinions from two other states which seem to address, if not the specifically phrased question, the issue addressed in it, specifically standing to sue as a taxpayer.

Unfortunately for Florida taxpayers, and much to Flora’s dismay, the answer to the questioned posed in the opinion was answered in thenegative, the taxpayer did not have standing. The court opinion traced a path which included a reversal of a District Court of Appeal. The explanation was long but it can be distilled to the following explanation:

Fornes has made several policy arguments why a taxpayer should be permitted to attack the legality of a governmental action which increases his tax burden, but these same reasons have been previously rejected by this Court. We find no reason to modify our rule. We agree with the Third District Court of Appeal's language in Paul v. Blake, 376 So.2d 256 (Fla. 3d DCA 1979), which stated:

We recognize that all these standing rules are based on highly debatable policy choices, but they represent, in our view, a reasonable effort to guarantee that the state and counties lawfully exercise their taxing and spending authority without unduly hampering the normal operations of a representative democratic government. We adhere to these rules today because they are based on long-established precedent and seem both reasonable and fair. 376 So.2d at 259-60. In the present case, Fornes does not allege any special injury to her, and consequently, she has no standing to sue to enjoin the District's planned expansion. N. Broward Hosp. Dist. v. Fornes, 476 So. 2d 154, 156 (Fla. 1985) (e.s.)

Flora is incredulous after reading the reasoning for the decision, one which places access to court rights secondary to “unduly hampering the normal operations of government” and does not consider underlying reasoning of states such as Missouri, e.g. that a taxpayer has an ‘equitable ownership’ of public funds. Moreover, Flora is convinced this reasoning subordinates individual right to prevent wasteful public expenditures of tax funds to the interests of the county and the state. As someone passionate about taxpayer rights she believes she recalls federal law on standing in taxpayer cases. She researches to refresh her memory of the state of the federal law on the subject discovering the relatively recent decision in Arizona Christian Sch. Tuition Org. v. Winn, 563 U.S. 125, 138, 131 S. Ct. 1436, 1444–45, 179 L. Ed. 2d 523 (2011). The Winn decision, ironically a loss for taxpayer rights, described the course of the Supreme Court’s reasoning over time including the creation of exceptions commenting:

In general, the mere fact that someone is a taxpayer does not provide standing to seek relief in federal court. The typical assertion of taxpayer standing rests on unjustifiable economic and political speculation. See Frothingham v. Mellon, 262 U.S. 447, 43 S.Ct. 597, 67 L.Ed. 1078; Doremus v. Board of Ed. of Hawthorne, 342 U.S. 429, 72 S.Ct. 394, 96 L.Ed. 475. Indeed, Frothingham v. Mellon establishes the reasoning followed in general thereafter. The Frothingham opinion relies on weighing the interest of one taxpayer versus the public at large stating:

The administration of any statute, likely to produce additional taxation to be imposed upon a vast number of taxpayers, the extent of whose several liability is indefinite and constantly changing, is essentially a matter of public and not of individual concern. If one taxpayer may champion and litigate such a cause, then every other taxpayer may do the same, not only in respect of the statute here under review, but also in respect of every other appropriation act and statute whose administration requires the outlay of public money, and whose validity may be questioned. The bare suggestion of such a result, with its attendant inconveniences, goes far to sustain the conclusion which we have reached, that a suit of this character cannot be maintained.

It is somewhat odd that the Frothingham decision never mentioned the word “standing”. In any case, the Winn decision followed the same reasoning saying:

There, a taxpayer-plaintiff had alleged that certain federal expenditures were in excess of congressional authority under the Constitution. The plaintiff argued that she had standing to raise her claim because she *135 had an interest in the Government Treasury and because the allegedly unconstitutional expenditure of Government funds would affect her personal tax liability. The Court rejected those arguments. The “effect upon future taxation, of any payment out of funds,” was too “remote, fluctuating and uncertain”

TheFrothingham decision was the settled SCOTUS law for more than 45 years, until the decision of the Court in Flast v. Cohen, 392 U.S. 83, 91, 88 S. Ct. 1942, 1948, 20 L. Ed. 2d 947 (1968) “That ruling has stood for 45 years as an impenetrable barrier to suits against Acts of Congress brought by individuals who can assert only the interest of federal taxpayers.”Id. The ruling in Frothingham has been characterized as a “direct injury” test and this was reiterated by way of distinction in Flast. The Court noted a federal taxpayer's ‘interest in the moneys of the treasury * * * is comparatively minute and indeterminable’ ……. As a result, the Court ruled that the taxpayer had failed to allege the type of ‘direct injury’ necessary to confer standing.Id., at 488, 43 S.Ct. at 601”

However, the Flast decision approved a limited ground for taxpayer standing in the context of the Establishment Clause of the U.S. Constitution.Id. The Flast decision was itself later characterized by the high court in City of Los Angeles v Lyons, 461 U.S. 95, 103 S.Ct. 1660 (1983) as meeting the Article III requirement of case and controversy and, by way of explanation, in Lyons reiterated that “abstract injury” is not enough” Id. Notwithstanding the continued rejection of “abstract injury”, the very recent decision in Winn, supra, reiterated the narrow exception of Flast. As stated in Winn, to have standing under Flast, taxpayers must show (1) a “logical link” between the plaintiff's taxpayer status “and the type of legislative enactment attacked,” and (2) “a nexus” between such taxpayer status and “the precise nature of the constitutional infringement alleged.” 392 U.S., at 102, 88 S.Ct. 1942. Considering the two requirements together, Flast explained that individual taxpayers may suffer a particular injury by means of “the taxing and spending power,….”

This review of federal law convinced Flora that the Supreme Court ( in Flast) expressed a broader view of taxpayer standing than that now held by the Florida Supreme Court as discussed earlier in N. Broward Hosp. Dist. v. Fornes. Id. Likewise, it is very clear that other states, such as Illinois, Alabama and Missouri hold out a much broader view of taxpayer standing. In Jenner v. Illinois Dep't of Commerce & Econ. Opportunity, 2016 IL App (4th), WL 150522 an Illinois appellate court explained the reasoning for the broad view of taxpayer standing in the land of Lincoln stating:

the extent that the State law of standing varies from Federal law, it tends to vary in the direction of greater liberality * * *.” Id. (eg. greater access to court) When it comes to taxpayer standing, Illinois courts are more generous…… the rule in Illinois is precisely the opposite: “a taxpayer may bring suit to enjoin the misuse of public funds in administering an illegal legislative act even though the taxpayer is not subject to the provisions of that act” (Snow, 66 Ill.2d at 451, 6 Ill.Dec. 230, 362 N.E.2d 1052). Second, although the Supreme Court of the United States denies standing to taxpayers because “[t]he effect upon future taxation, of any payment out of funds, [is] too remote, fluctuating[,] and uncertain to give rise to a case or controversy” (internal quotation marks omitted) (Winn, 563 U.S. at 134, 131 S.Ct. 1436), Illinois courts find an injury to taxpayers the moment public funds are used illegally, regardless of the ultimate effect of such illegal use on the treasury or on rates of taxation (see Krebs, 387 Ill. at 475–76, 56 N.E.2d 761).

Under Florida law, a taxpayer must demonstrate “special injury”, a standard apart and more difficult than even the “direct injury” standard in Winn and certainly much more difficult to plead and meet successfully than the sister states identified herein.

The Take Away on Standing, Part II

The very recent decision from Illinois in Jenner, supra ( the extent that the State law of standing varies from Federal law, it tends to vary in the direction of greater liberality) demonstrates the states’ greater focus on taxpayer rights based upon the view that ..”[ A] taxpayer has an ‘equitable ownership’ of public funds, and any illegal expenditure of such funds will subject taxpayers to a liability to ‘. . . replenish any deficiency”. Unfortunately, Florida appears to take a much narrower and less generous view of taxpayer standing when compared to its sister states. Indeed, under Fornes even “direct injury” described in federal law would not be sufficient to provide standing unless such injury is “distinct” from other taxpayers, a so called “special injury”. Perhaps the Florida Supreme Court could recognize, in the proper case, that “direct injury” should always be sufficient for standing regardless of whether taxpayers injuries as a group can be characterized as common with the injuries of the litigant. This change would eliminate the bizarre current paradigm in which “everyone is injured but nobody can sue”. How can access to the courts be cut off because a large group of taxpayers are harmed. Why should access to courts be cut off when it comes to taxpayer rights (in contrast to voting rights, for example) because there is a common basis for the injury based upon taxation? Hardly seems equitable let alone, fair and reasonable. Absent judicial intervention, it is up to the Florida legislature to help Florida taxpayers by statutorily expanding their right to court access. When each taxpayer has suffered a direct injury from a common source (especially in ad valorem assessment cases) the mere fact that it is not a unique or special injury is not a logical basis for denying standing to sue. Broadening standing of taxpayers in local tax cases is justified not only on the basis of fairness but also based upon the “equitable ownership” reasoning applied in sister states. Because of the very narrow door of “special injury” “[s]tanding serves as a trap for the unwary, resulting in parties losing potentially meritorious cases because they did not foresee the facts that courts ultimately decided were necessary to establish standing.” Fn. 1 The ambiguity and limited nature of Florida’s current standing doctrine on taxation makes it particularly difficult for plaintiffs to make accurate predictions about which facts courts will require under the “special injury” doctrine. Because discerning ultimate and important facts to establish standing in class actions and other taxpayer challenges cannot be overlooked, specialized knowledge and focus of practice are fundamentally important. A firm dedicated to taxpayer defense provides this focus and understanding.

Fn. 1. Justin R. Pidot, The Invisibility of Jurisdictional Procedure and Its Consequences, 64 Fla. L. Rev. 1405 (2012)

About the Firm: Formed in 1991, the Law Offices of Moffa, Sutton, & Donnini, P.A. is a law firm with a primary practice area of Florida tax controversy and a heavy emphasis on Florida sales and use tax. With offices in Fort Lauderdale, Tampa, and Tallahassee, the firm defends business owners against the Florida Department of Revenue and the Department of Business and Professional Regulation from the initial audit notice through administrative protest and litigation as well as collections, revocations, and criminal investigations.

Florida tax attorney; Florida sales tax attorney; Florida sales tax audit; Florida tax protest; Florida tax help; Tampa tax attorney; Orlando tax attorney; Miami tax attorney; Tallahassee tax attorneyAbout the Author: James (Jim) F. McAuley is an experienced attorney, joining the firm in 2015 after an exemplary career with the state of Florida. Holding the Florida Bar board certification as a specialist in State and Federal Administrative Law, Mr. McAuley represented the State of Florida for more than 20 years in the area of state and local taxation and administrative law with an emphasis on litigation. Mr. McAuley is Board Certified by the Florida Bar in the area of State and Federal Government Administrative Practice. Mr. McAuley holds the highest rating given to lawyers by Martindale Hubbell (Av) and has maintained that rating for more than 15 years. He is also a published legal author in both State taxation and Administrative law. He is an alumni & author of the Nova Law Review (Fall 2007). You can read more about Mr. McAuley in his firm bio.


FL Tax: When Everyone is Injured, But Nobody Can Sue, published August 3, 2016, by James McAuley, Esq.

Burden of Proof & Persuasion in FL Tax Cases, published May 31, 2015, by James McAuley, Esq.

Challenging Agency Statements Defined as a Rule, published October 6, 2015, by James McAuley, Esq.