On November 12, 1998, the city of Toledo, Ohio entered into a development agreement with auto manufacturer DaimlerChrysler, for it to construct a new Jeep assembly plant near its existing facility in exchange for various tax incentives.

Eighteen taxpayers subsequently filed suit in Lucas County Court of Common Pleas against DaimlerChrysler, the city and school districts, and other State of Ohio defendants, claiming that the state statutes that permitted the property tax exemption[2] and the investment tax credit[3] violated the Commerce Clause in Article One of the United States Constitution and provisions of the Ohio Constitution by granting preferential treatment to in-state investment and activity.

The District Court ruled that the remaining claims all failed to establish that the tax statutes violated either the Ohio or U.S. Constitutions, and were accordingly dismissed with prejudice.

[9] The Court unanimously vacated the Sixth Circuit in part, ruling that it had improperly reached the merits of the case without first determining the issue of standing.

The Court also observed that there was no standing where the alleged injury was not "concrete and particularized," but was instead suffered "in some indefinite way in common with people generally.

"[12] The court believed that the plaintiffs' alleged injury was "conjectural or hypothetical," because it required speculation that state legislators would respond to a reduction in revenue caused by the credit (a consequence the Court also found speculative, and unlikely) by increasing the plaintiffs' taxes.

[13] The Court explained that the right not to contribute money for the support of a religious establishment was "fundamentally unlike" whatever rights the plaintiffs may have under the Commerce Clause, and the comparison the plaintiffs attempted was "at such a high level of generality that almost any constitutional constraint on government power would 'specifically limit' a State's taxing and spending power for Flast purposes."