Syllabus
§ 1341's undisputed compass: All involved plaintiffs who mounted federal litigation to avoid paying state taxes (or to gain a refund of such taxes). Federal court relief, therefore, would have operated to reduce the flow of state tax revenue. Those decisions are not fairly portrayed cut loose from their secure, state-revenue-protective moorings. See, e. g., Grace Brethren Church, 457 U.S., at 410. This Court has interpreted and applied the TIA only in cases Congress wrote the statute to address, i. e., cases in which state taxpayers seek federal court orders enabling them to avoid paying state taxes. The Court has read harmoniously the § 1341 instruction conditioning the jurisdictional bar on the availability of "a plain, speedy and efficient remedy" in state court. The remedy inspected in the Court's decisions was not designed for the universe of plaintiffs who sue the State, but was tailormade for taxpayers. See, e. g., id., at 411. Pp. 102–108.
(c) In other federal courts as well, § 1341 has been read to restrain taxpayers from instituting federal actions to contest their liability for state taxes, but not to stop third parties from pursuing constitutional challenges to state tax benefits in a federal forum. Further, numerous federal court decisions—including decisions of this Court reviewing lower federal court judgments—have reached the merits of third party constitutional challenges to tax benefits without mentioning the TIA. See, e. g., Byrne v. Public Funds for Public Schools of New Jersey, 442 U.S. 907; Griffin v. School Bd. of Prince Edward Cty., 377 U.S. 218. Consistent with the decades long understanding prevailing on this issue, respondents' suit may proceed without any TIA impediment. Pp. 108–112.
Ginsburg, J., delivered the opinion of the Court, in which Stevens, O'Connor, Souter, and Breyer, JJ., joined. Stevens, J., filed a concurring opinion, post, p. 112. Kennedy, J., filed a dissenting opinion, in which Rehnquist, C. J., and Scalia and Thomas, JJ., joined, post, p. 113.
Terry Goddard, Attorney General of Arizona, argued the cause for petitioner. With him on the briefs were Mary O'Grady, Solicitor General, Paula S. Bickett, and Joseph Kanefield, Special Assistant Attorney General.
Deputy Solicitor General Hungar argued the cause for the United States as amicus curiae urging reversal. With him on the brief were Solicitor General Olson, Assistant Attorney General O'Connor, Kent L. Jones, and Kenneth L. Greene.
