A Baltimore Sun article (2019-05-07) reported on a recent decision by the Maryland Court of Appeals that could expand the concept of “taxpayer standing” and allow taxpayers to sue local governments to allege waste or mismanagement without a need to show a specific harm different from that of the general public.

The decision, George v. Baltimore County, was issued on April 1, 2019. The original case was brought by several Baltimore County taxpayers over alleged mismanagement of the County’s animal shelter. The plaintiffs sought injunctive and declaratory relief as opposed to monetary damages.

In order to have standing as a taxpayer to bring a lawsuit, a plaintiff must: (1) prove they are a taxpayer in the jurisdiction subject to the lawsuit; (2) allege that the challenged action by a local government or public official is illegal or ultra vires (beyond the powers of the government or official); (3) show that the challenged action may cause a pecuniary loss to the taxpayer or an increase in taxes; and (4) show a special interest in the alleged waste or mismanagement that is distinct from the general public. The George decision clarified several of these requirements, particularly (4).

The Circuit Court of Baltimore granted summary judgment for the County, finding that the plaintiffs failed to show that they would suffer a loss or tax increase distinct from the general public. Plaintiffs appealed the case to the Court of Special Appeals, which upheld the ruling of the Circuit Court. Plaintiffs then appealed to the Court of Appeals.

The Court of Appeals overturned the lower courts’ rulings on granting summary judgment and remanded the case back to Circuit Court, where the case will continue forward. As part of its decision, written by Judge Sally Adkins, the Court of Appeals held that simply be being a taxpayer satisfies the special interest requirement. From the decision:

As discussed previously, Taxpayers must also establish a “special interest” in the wasted funds that is “distinct from the general public.” We have explained that entitlement to sue is based on the taxpayer’s “equitable ownership of [public] funds and their liability to replenish the public treasury.” Surely the “taxpayer” to which we referred means any individual who may be liable to replenish the relevant fisc.  Conversely, the “general public” includes all those not subject to such liability.  Hence, “taxpayer” means those in the relevant jurisdiction subject to the taxation which is alleged to have been increased or wasted, while the “general public” amounts to those who are not subject to such taxation. [All citations omitted.] …

In sum, Taxpayers have established pecuniary harm derivative of waste and mismanagement, a nexus between that harm and the alleged illegal government act, and sufficiently quantified the alleged harm. For these reasons, we hold that Taxpayers have demonstrated specific injury and, thus, posses standing to pursue their claim under the taxpayer standing doctrine.

The Sun article provided some additional background on the case as well as several reactions from the parties and other stakeholders. From the article:

Leslie Knapp Jr., legal and policy counsel for the Maryland Association of Counties, said the ruling could “potentially open the doors to more lawsuits through the taxpayer standing standard alleging waste or abuse without any direct harm or nexus.” …