Franchise Tax Bd. v. Alcan Aluminium

From Conservapedia

In Franchise Tax Bd. v. Alcan Aluminium, 493 U.S. 331 (1990), the U.S. Supreme Court held that the Tax Injunction Act

This case presented two questions. First, whether a foreign company, sole shareholder of an American subsidiary, has standing to challenge in federal court, on Foreign Commerce Clause grounds, the accounting method by which the State of California determines the locally taxable income of that subsidiary. Second, whether such a federal action for injunctive and declaratory relief is barred by the Tax Injunction Act, 28 U.S.C. § 1341 (1982 ed.).

The Court of Appeals for the Seventh Circuit held that the foreign companies involved in this case had alleged injuries sufficiently direct and independent of the injuries to their subsidiaries to confer both Article III and stockholder standing, and that their federal actions were not barred by the Tax Injunction Act or the principle of comity that underlies that Act. 860 F.2d 688 (1988).

The Court concluded that there is an Article III case or controversy, and assumed that respondents have standing as stockholders. But the Court held that these actions are barred by the Tax Injunction Act, and reversed the decision of the Seventh Circuit.

Justice Byron White wrote the opinion for a unanimous Court.