Employers Resource Management Co. v. Ronk
162 Idaho 774
| Idaho | 2017Background
- Idaho enacted the Idaho Reimbursement Incentive Act (IRIA) in 2014, authorizing refundable tax credits (up to 30% and 15 years) to incentivize businesses to locate or expand in Idaho; applicants must show a community match and obtain approval from the Economic Advisory Council (EAC).
- In 2016 the EAC approved a $6.5 million tax credit to Paylocity, an Illinois corporation, which Employers Resource Management Company (Employers) alleges gives Paylocity a government-enabled competitive advantage.
- Employers sued for declaratory relief, arguing IRIA unconstitutionally delegated legislative taxing authority to the executive branch and that the Paylocity award injured Employers competitively.
- The Director (Megan Ronk) moved to dismiss for lack of standing; the district court granted the motion, finding Employers lacked a protectable interest and that its alleged competitive harms were speculative.
- The Idaho Supreme Court reviewed standing de novo and considered whether competitor standing could be recognized where government action confers an advantage on a rival.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Employers has standing to sue after a tax credit was awarded to a competitor | Employers: governmental subsidy to Paylocity injures Employers’ competitive position and is redressable by invalidating the award/ program | Ronk: action was directed at Paylocity, not Employers; alleged harms are speculative and not particularized | Court: Employers has standing as a competitor when government action confers a distinct competitive advantage likely to cause economic injury; dismissal vacated |
| Whether Idaho recognizes competitor standing for increased competition generally | Employers: competitor standing applies because subsidy will likely cause economic injury | Ronk: Idaho historically has not recognized competitor standing; increased competition alone is insufficient | Court: rejects expansive federal approach; increased competition on a level playing field is insufficient, but competitor standing exists where government action grants a rival a competitive advantage that injures the plaintiff |
| Whether Employers’ alleged injury satisfies causation and redressability | Employers: injury is fairly traceable to the EAC’s award and invalidation would restore a level playing field | Ronk: harm is speculative; relief would not necessarily redress the alleged injury | Court: causation and redressability satisfied because invalidation would remove the governmental advantage and likely remedy the competitive harm |
| Whether the district court properly applied precedents limiting competitor standing | Employers: earlier Idaho cases do not bar competitor standing when the government confers an advantage | Ronk: district court correctly relied on cases restricting competitor standing and requiring more than an added hurdle | Court: district court misapplied National Tank and similar precedents; Idaho will not follow the broad federal doctrine but permits competitor standing when a government action creates a competitor advantage |
Key Cases Cited
- Tucker v. State, 162 Idaho 11 (Idaho 2017) (standing/justiciability principles; jurisdictional rule clarification)
- Coeur d’Alene Tribe v. Denney, 161 Idaho 508 (Idaho 2016) (relaxed standing standard for significant constitutional violations)
- Coal. for Agric.’s Future v. Canyon Cnty., 160 Idaho 142 (Idaho 2016) (traditional standing elements articulated)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (U.S. 1992) (plaintiff not object of government action makes standing harder)
- Allen v. Wright, 468 U.S. 737 (U.S. 1984) (limits on standing when plaintiff is not the object of challenged action)
- Clinton v. City of New York, 524 U.S. 417 (U.S. 1998) (economic injury from altered competitive conditions can satisfy injury-in-fact)
- Association of Data Processing Serv. Orgs. v. Camp, 397 U.S. 150 (U.S. 1970) (competitor standing recognized where regulatory change permits increased competition)
- La. Energy & Power Auth. v. FERC, 141 F.3d 364 (D.C. Cir. 1998) (economic logic that easing restrictions on competitors creates injury)
- Sherley v. Sebelius, 610 F.3d 69 (D.C. Cir. 2010) (recognition of competitor standing when government action benefits rival)
- National Tank Truck Carriers v. Lewis, 550 F. Supp. 113 (D.D.C. 1982) (district court decision limiting competitor standing; court here distinguishes it)
- Martin v. Camas County, 150 Idaho 508 (Idaho 2011) (Idaho has been reluctant to expand competitor standing; increased competition alone insufficient)