Several years later, Indianapolis introduced its new and better Septic Tank Elimination Program that it chose to fund by annual charges of $2,500 per home. That welcome technological improvement was paired with a novel financial plan. Indianapolis forgave all unpaid assessments against the homeowners who participated in the installment plan. But the city refused to refund any money to the homeowners who had paid the full amount in one lump sum payment. These 38 lump sum payers promptly sued to recover an amount equal to the smallest amount of debt that the city gave to any homeowner (roughly $8,000 each). Their basic claim was that Indianapolis violated their Fourteenth Amendment guarantee of “the equal protection of the laws.”
The Court thus faced a public finance question with constitutional implications. But instead of starting with the former, Justice Stephen Breyer, writing for a six-member majority (himself, Kennedy, Thomas, Ginsburg, Sotomayor, and Kagan), started by setting the constitutional standard of review. Since the claim against Indianapolis involved neither a preferred constitutional right, like speech or religion, nor a suspect classification, like race, or out-of-state or new residents, Justice Breyer adopted the well-established, though misnamed, “rational basis” review under which
a legislature need not “actually articulate at any time the purpose or rationale supporting its classification.” Rather, the “burden is on the one attacking the legislative arrangement to negative every conceivable basis which might support it.” (internal citations omitted).
Justice Breyer then held that this standard allowed the state to invoke the administrative costs of running the refund program as a reason not to start it. The motivation for this test was made clear in oral argument when Justice Sotomayor wondered out loud whether accepting Armour’s claim would commit the Court to examining ”amnesty programs” covering everything from parking tickets to illegal immigration.
These weird comparisons are all off point. Full relief in Armour requires at most a set of easy financial calculations of the sort routinely used by banks and public utilities everywhere. It doesn’t raise tricky enforcement issues in the face of widespread public noncompliance. Put otherwise, the claimants in Armour objected to an illicit form of favoritism from one set of landowners to another that was implemented by a city government with its own financial interest in keeping the moneys that it had already collected.