Vol. 100: Summer Part One

This Article touches upon some issues of fundamental importance to the several million nationally disenfranchised United States citizens that reside in Puerto Rico. I write with a modicum of uneasiness as a result of the uncertain terrain on which the United States-Puerto Rico relationship presently finds itself, firstly, by reason of two cases that are pending resolution by the Supreme Court of the United States—Puerto Rico v. Sánchez Valle and the consolidated cases of Puerto Rico v. Franklin California Tax-Free Trust and Acosta-Febo v. Franklin California Tax-Free Trust—which have already been argued and are awaiting decision, and secondly, because Congress is now considering legislation entitled the “Puerto Rico Oversight, Management, and Economic Stability Act,” referred to by the uncomfortably inapt acronym “PROMESA”—“promise” in Spanish—pursuant to which the Government of Puerto Rico will be placed in virtual trusteeship by the U.S. government.

Each of these cases and this legislation hold the potential to drastically change the U.S.-P.R. scenario depending on which of several paths the Court chooses to take in resolving the basic questions the cases raise, and what it is that Congress eventually enacts to “assist” the people of Puerto Rico. The final product of the cases could run a gamut of results. What Congress will produce is anyone’s guess, but judging from the socalled “discussion draft” of PROMESA, it does not appear that Puerto Rico is about to be released from the colonial grip of the plenary powers that were authorized by the Insular Cases.4 Rather, it seems that Congress may tighten this grip to a virtual stranglehold. This Article addresses several matters that may serve as background when these cases are decided and Congress passes legislation. Full article here.

October Term 2014 featured what is to date the most important state and local tax case since 1992’s Quill Corp. v. North Dakota.  In Comptroller v. Wynne, the U.S. Supreme Court affirmed a state court decision holding unconstitutional Maryland’s refusal to grant a credit for taxes paid by a resident taxpayer to other states on income earned by the taxpayer in those states.  This essay offers a summary of the case, as well as five takes on Wynne and another state and local tax case from the 2014-2015 term, Direct Marketing Association v. Brohl.

First, it is notable that the Court affirmed the lower court’s decision below, making it the first time in years that the Court weighed a state tax scheme against the dormant Commerce Clause doctrine and found it wanting.  Second, in so doing the Court relied in part on the “internal consistency” doctrine, an aspect of fair apportionment whose continued viability was questioned just a few years ago.  Third, the Court’s invocation of internal consistency and the linkage of it with the DCCD’s anti-discrimination principle raises the possibility that the Court’s DCCD jurisprudence in tax cases might be undergoing a transformation.  Fourth, additional evidence that doctrinal change is afoot is furnished by Justice Kennedy’s concurring opinion in Direct Marketing Association, in which Kennedy signaled a willingness to reconsider Quill’s holding that the Commerce Clause requires the taxpayer’s physical presence in a state to trigger an obligation to collect and remit sales and use taxes.  Fifth, and finally, a recent decision by the U.S. Supreme Court to grant certiorari to, vacate, and remand the decision of the Massachusetts Supreme Judicial Court in First Marblehead Corporation v. Commissioner of Revenue, offers some hints at the potential scope of Wynne. Full essay here.