Opinion ID: 706916
Heading Depth: 3
Heading Rank: 1

Heading: NTU's Complaint and the South Carolina Exception

Text: 36 In South Carolina, the Supreme Court found that the AIA did not bar the state from suing to enjoin enforcement of a provision of the Internal Revenue Code that directly affected the issuance of state bonds. 465 U.S. at 378-79, 104 S.Ct. at 1114-15. The Court recognized that, unless allowed to bring suit, the state would only be able to vindicate its own interests if it could convince a taxpayer to raise its claims. Id. at 380-81, 104 S.Ct. at 1115. Given this unusual situation, the Court found that Congress did not intend the [AIA] to apply where an aggrieved party would be required to depend on the mere possibility of persuading a third party to assert his claims. Id. at 381, 104 S.Ct. at 1116. Rather, the [AIA] was intended to apply only when Congress has provided an alternative avenue for an aggrieved party to litigate its claims on its own behalf. Id. However, this exception is inapplicable in the instant case, because NTU has no independent standing, and, therefore, has no viable claims to pursue on its own behalf. 37 Moreover, even if we assume, arguendo, that NTU might have independent standing to challenge Section 13208, it still could not avail itself of the South Carolina exception to the AIA, because that exception does not apply to litigation of tax claims by organizations that represent taxpayers. Id. at 381 n. 19, 104 S.Ct. at 1115 n. 19. The Court noted that, because the taxpayer members of such organizations have alternative remedies, it would elevate form over substance to treat such organizations as if they did not possess alternative remedies. Id. Thus, because NTU members aggrieved by Section 13208 may challenge that statute in their own right as taxpayers, NTU does not qualify for the South Carolina exception to the AIA. See also Foodservice and Lodging Inst., Inc. v. Regan, 809 F.2d 842, 844-45 (D.C.Cir.1987) (The South Carolina exception to the AIA did not apply to a trade association where members of the association had an avenue to challenge contested income tax regulations on their own behalf.). 38