09-223 Levin v. Commerce Energy, Inc.

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Tax
Discriminatory taxes; comity

Under the comity doctrine, a taxpayer's complaint of allegedly discriminatory state taxation, even when framed as a request to increase a competitor's tax burden, must proceed originally in state court.

A confluence of factors in this case, absent in Hibbs, leads to the conclusion that the comity doctrine controls here. First, respondents seek federal-court review of commercial matters over which Ohio enjoys wide regulatory latitude; their suit does not involve any fundamental right or classification that attracts heightened judicial scrutiny. Second, while respondents portray themselves as third-party challengers to an allegedly unconstitutional tax scheme, they are in fact seeking federal-court aid in an endeavor to improve their competitive position. Third, the Ohio courts are better positioned than their federal counterparts to correct any violation because they are more familiar with state legislative preferences and because the TIA does not constrain their remedial options. Individually, these considerations may not compel forbearance by federal district courts; in combination, however, they demand deference to the state adjudicative process.

554 F. 3d 1094, reversed and remanded.

Local effect: The opinion overrules the governing precedent in the Seventh Circuit, Levy v. Pappas, 510 F.3d 755 (7th Cir. 2007).

09-223 Levin v. Commerce Energy, Inc.

Ginsburg, J.; Kennedy, J., concurring; Thomas, J., concurring; Alito, J., concurring.

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