The American Rescue Plan Act’s “offset provision” may be tested in the nation’s highest court, after Ohio petitioned the Supreme Court to hear its case against Janet Yellen and the Department of Treasury’s provision that bars states from using federal relief funds to offset reductions in tax revenue.
That’s the latest in the multi-state battle against the ARPA’s offset provision, which still includes cases in Kentucky, Tennessee, Arizona, Missouri, West Virginia and Texas.
A panel of the Sixth Circuit Court of Appeals ruled against Ohio on standing grounds in November 2022 but the case got further complicated at the Sixth Circuit when the a panel granted standing and victory to Tennessee’s claims that the provision would unconstitutionally burden the state with compliance costs, which could be used to support Ohio’s case in the Supreme Court.
“The Sixth Circuit held that Ohio’s challenge was moot,” Ohio’s petition to the Supreme Court said. “On that basis, it vacated the District Court’s judgment, which permanently enjoined the respondents from enforcing the Mandate against Ohio. But on the same day, in a case brought by Kentucky and Tennessee, the Sixth Circuit held that Tennessee’s challenge to the Mandate was not moot,” the petition said. “It went on to affirm an order enjoining the Mandate’s enforcement against Tennessee.”
Ohio also requested a 60-day extension of time to file a write of certiorari by April 17, giving it the chance to align its case with the decision in Tennessee and Kentucky but has not yet indicated whether they will include the lower court’s decision.
Ohio has been informed that the Supreme Court doesn’t oppose this request and that there is “good cause for an extension,” the petition said.
“Ohio will petition for review. And Ohio expects the respondents to petition for a writ certiorari in Kentucky, as the Sixth Circuit in that case enjoined the enforcement of a federal law. But the respondents have not confirmed whether they will seek certiorari or not. Their decision to seek review (or not) will affect the presentation of the issues in Ohio’s petition. And if the respondents do seek review, it would be most efficient for the Court to consider the cases together. An extension will allow Ohio greater ability to ensure that its petition and the respondents’ proceed on a similar track.”
The case would have implications for other states challenging the provision but in other circuit courts, the fight still rages on. On Jan. 20, the Eleventh Circuit ruled in favor of West Virginia and on March 6, Treasury requested a rehearing en banc.
The government argued that a lack of clarity about a funding condition is a factor in statutory interpretation but does not allow a statute to be invalidated and that the offset provision is clear, requesting to renew its argument that the states lack standing.
“Treasury has yet to win on the merits in any of these cases, and here it lost at the trial court and appeals court already,” Joseph Bishop-Henchman, executive director of the National Taxpayers Union Foundation. “The panel addressed these arguments and analogized it to contract law: there is no contract unless the terms are reasonably certain.”mi