May 20, 2022
Arizona's suit challenging constitutionality of ARPA provision can go forward, Ninth Circuit holds
Reversing a district court decision, the Ninth Circuit has held (State of Arizona v. Janet Yellen) that Arizona has standing to challenge the constitutionality of the American Rescue Plan Act (ARPA) as violating the Spending Clause and the Tenth Amendment. Arizona challenged ARPA's Offset Provision, which prohibits a state from using ARPA funds to subsidize a tax cut or other reduction in state net tax revenue. The circuit court concluded there was (1) a realistic likelihood that the Offset Provision would be enforced, and (2) a justiciable challenge to the state's sovereign authority to set its tax policy.