The Problem With Outcome-Based Jurisprudence

May 9 2014, 2:08pm CDT | by

State court systems are created by state governments to enforce state law. It’s a relatively simple concept. Like the federal court system, state judicial branches are separate entities from the executive and legislative branches. Judges are charged with the difficult task of interpreting and implementing state laws and state constitutions and resolving disputes. Under the doctrine of the separation of powers, however, the judiciary does not make the law and it does not enforce the law.

Yet in practice, and particularly for cases in which revenue is involved, judges may feel tempted to take on the concerns of the executive and legislative branches and engage in outcome-based jurisprudence. This happens when a court decides what the outcome of the case should be and then works backward to determine the reasoning that will reach the desired conclusion.

Take, for example, a recent case from the Oklahoma Supreme Court. The case, CDR Systems Corp. v. Oklahoma Tax Commission, addressed a statutory capital gains deduction for taxpayers headquartered in Oklahoma. The statute was challenged by a company headquartered in Florida because it did not provide the same deduction for taxpayers headquartered outside Oklahoma. The company alleged the statute was unconstitutional because it taxes companies differently based on whether they are headquartered in Oklahoma.

Although an Oklahoma appeals court determined the statute was facially discriminatory in violation of the commerce clause, the Oklahoma Supreme Court, in what can only be described as a case of outcome-based jurisprudence, concluded the commerce clause did not apply. What’s troubling, though, is that the disparate treatment of in-state versus out-of-state taxpayers is exactly the type of situation in which the commerce clause should apply.

The opinion from Oklahoma’s highest court is questionable at best. The court went so far as to suggest the statute should be held constitutional because the “Legislature could have imposed a more burdensome means of promoting significant business investment in Oklahoma’s economy.” In other words, the Legislature could have created a more unconstitutional statute, so let’s just leave the current statute alone.

The real question, though, is why? Why did the court go out of its way to dismiss existing commerce clause precedent and produce an opinion that is rife with illogical conclusions?

The answer is likely in the remedy that would have been provided if the taxpayer had prevailed. Oklahoma Tax Commission spokeswoman Paula Ross reportedly conceded that if the statute were struck down, the state would have been liable for up to $400 million in refunds. Practitioners in the state aren’t surprised. Some suspected the court would find a way to protect the treasury while also protecting in-state businesses.

The CRD Systems opinion may have accomplished the goal of protecting the treasury, but its success ends there. Outcome-based opinions should be avoided. It is not for the court to worry about how the state will fashion a remedy. Its task is to interpret and enforce the state’s laws and strike down those that are unconstitutional. In that respect, the court in Oklahoma failed.

 
 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

Himalayan Viagra fuels gold rush for local Tibetans
Washington, Oct 31 (IANS) Overwhelmed by people trying to find the prized medicinal fungus known as Himalayan Viagra, two isolated Tibetan communities have managed to implement a successful system for the sustainable harvest of the precious natural resource, suggests research.
 
 
Oceans were always there on Earth: Scientists
Washington, Oct 31 (IANS) Debunking previous theories that water came late to Earth well after the planet had formed, researchers have significantly moved back the clock for the first evidence of water on Earth and in the inner solar system.
 
 
Wearable health devices key for safe space tourism
New York, Oct 31 (IANS) At a time when several firms are developing spacecrafts to take ordinary citizens on short trips into space, scientists have outlined the risks and challenges involved in human commercial spaceflights.
 
 
Nestle to introduce robots as sales clerks
Tokyo, Oct 31 (IANS/EFE) Nestle will use robots as sales clerks at its outlets selling coffee makers in Japan, an initiative that will later spread worldwide, a Nestle spokesperson confirmed to EFE news agency.
 
 
 

Latest from the Network

Oceans were always there on Earth: Scientists
Washington, Oct 31 (IANS) Debunking previous theories that water came late to Earth well after the planet had formed, researchers have significantly moved back the clock for the first evidence of water on Earth and in...
Read more on Business Balla
 
Wearable health devices key for safe space tourism
New York, Oct 31 (IANS) At a time when several firms are developing spacecrafts to take ordinary citizens on short trips into space, scientists have outlined the risks and challenges involved in human commercial...
Read more on Business Balla
 
Early Walmart Cyber Monday 2014 Sale and Holiday 2014 Sale announced
Walmart has revealed their first Holiday 2014 sales details. Starting Saturday Walmart will offer over 20,000 rollback deals. New this year are early Walmart Cyber Monday 2014 sales starting midnight on walmart.com.On...
Read more on Black Friday Countdown
 
Nestle to introduce robots as sales clerks
Tokyo, Oct 31 (IANS/EFE) Nestle will use robots as sales clerks at its outlets selling coffee makers in Japan, an initiative that will later spread worldwide, a Nestle spokesperson confirmed to EFE news agency....
Read more on Celebrity Balla
 
Healthy diet for infants prevents obesity later
New York, Oct 31 (IANS) If you do not want your baby to grow up into an overweight adult, make sure you feed him or her healthy diet from the very first year, a study suggests. Babies who eat diets high in sugar, fat...
Read more on Business Balla
 
Popular mosquito catcher in Japan uses human odour as bait
Tokyo, Oct 31 (IANS) A novel mosquito trap that lures its prey using human scent and other smells favoured by the critter is creating a buzz as Japan frets about the spread of dengue fever. The boxlike device is the...
Read more on Business Balla
 
Antarctic ozone hole stands steady: Scientists
Washington, Oct 31 (IANS) The Antarctic ozone hole has reached its annual peak size and holds steady, say scientists, trying to determine if the ozone hole trend over the last decade is a result of temperature...
Read more on Business Balla
 
How genes affect Ebola patients
New York, Oct 31 (IANS) The Ebola virus affects different people differently, say researchers, adding that genetic factors could be behind this mild-to-deadly range of reactions to the virus. While some people...
Read more on Business Balla
 
Pierce Brosnan mortgaged heating to fund big break
Pierce Brosnan funded his big break in acting by taking out a second mortgage on his central heating. The 61-year-old star has revealed his late wife Cassandra Harris - who died from ovarian cancer aged 43 in 1991 -...
Read more on Celebrity Balla
 
Lahiri hoping for memorable debut at WGC-HSBC Champions
Shanghai, Oct 31 (IANS) India's Anirban Lahiri will be hoping for a memorable debut when he takes his place among the game's elite at next week's $8.5 million WGC-HSBC Champions. The final World Golf Championships...
Read more on Sport Balla