PRECEDENTIAL

        UNITED STATES COURT OF APPEALS
             FOR THE THIRD CIRCUIT
                     ______

                      No. 15-3979
                        ______

                 JACKIE NICHOLS,
                       Appellant

                           v.

           CITY OF REHOBOTH BEACH;
          SAM COOPER, Mayor of Rehoboth;
       SHARON LYNN, City Manager of Rehoboth
                     ______

     On Appeal from the United States District Court
               for the District of Delaware
               (D. DE No. 1-15-cv-00602)
      District Judge: Honorable Gregory M. Sleet
                         ______

                 Argued April 7, 2016
Before: FISHER, COWEN, and RENDELL, Circuit Judges.

               (Filed: September 7, 2016)

David L. Finger, Esq. [ARGUED]
Finger & Slanina
1201 Orange Street
One Commerce Center, Suite 725
Wilmington, DE 19801
Counsel for Appellant

Max B. Walton, I, Esq. [ARGUED]
Connolly Gallagher
267 East Main Street
Newark, Delaware 19711

Matthew F. Boyer, Esq.
Ryan P. Newell, Esq.
Arthur G. Connolly, III, Esq.
Connolly Gallagher
1000 West Street
The Brandywine Building, Suite 1400
Wilmington, DE 19801
            Counsel for Appellees

                             ______

                 OPINION OF THE COURT
                         ______


FISHER, Circuit Judge.

        Jackie Nichols is a resident, property owner, and
taxpayer in the City of Rehoboth Beach, Delaware. Rehoboth
Beach held a special election—open to residents of more than
six months—for approval of a $52.5 million bond issue, and
the resolution passed. Nichols voted in the election. She then
filed this civil action challenging the election and the resultant
issuance of bonds. The District Court found that Nichols




                                2
lacked standing and dismissed the case. The sole issue on
appeal is whether Nichols had, as she claims, municipal
taxpayer standing to make such a challenge. Because Nichols
has failed to show an illegal use of municipal taxpayer
funds—and therefore cannot establish standing on municipal
taxpayer grounds—we will affirm the District Court’s Order.
                              I.
                              A.
       The facts of this case are simple. On April 27, 2015,
the Board of Commissioners of Rehoboth Beach adopted a
resolution proposing the issuance of up to $52.5 million in
general obligation bonds to finance an ocean outfall project.
The resolution followed an initial resolution and a public
hearing, as required by Section 40(d)-(e) of Rehoboth
Beach’s City Charter. Pursuant to the City Charter, Rehoboth
Beach held a special election on June 27, 2015, to determine
whether it was authorized to borrow funds to finance the
project. Rehoboth Beach expended municipal funds on the
special election: first, before the election, it used taxpayer
funds to place a full-page advertisement in a local newspaper
urging the voters to “Vote Yes” in favor of the proposed
outfall project; second, the costs of the special election were
paid from the Rehoboth Beach treasury.
        The Rehoboth Beach City Charter governs the voting
procedures for special elections. Section 40(h) of the Charter
states the following:
      At the said Special Election, every owner or
      leaseholder, as defined in this Charter, of
      property, whether an individual, partnership or
      corporation, shall have one vote and every
      person who is a bona fide resident of the City of
      Rehoboth Beach, but who is not an owner or



                              3
       leaseholder, as defined in this Charter, of
       property within the corporate limits of the City
       of Rehoboth Beach and who would be entitled
       at the time of holding of the said Special
       Election to register and vote in the Annual
       Municipal Election if such Annual Municipal
       Election were held on the day of the Special
       Election shall have one vote whether or not
       such person be registered to vote in the Annual
       Municipal Election.
Charter      of     Rehoboth       Beach    § 40(h)     (1963),
http://charters.delaware.gov/rehobothbeach.pdf. Section 40
does not define the term “bona fide resident,” but Section 7 of
the Charter, which deals with the manner of holding annual
elections, defines the term “resident” as “an individual
actually residing and domiciled in the City of Rehoboth
Beach for a period of six months immediately preceding the
date of the election.” 

        At the special election, Rehoboth Beach accepted only
voters who were either property owners or who had been
residents for a minimum of six months. Corporations and
other artificial entities that owned property in Rehoboth
Beach were also permitted to vote. Nichols alleges that
persons who owned several parcels of property in Rehoboth
Beach through the ownership of artificial entities were
granted one vote for each parcel owned. She further alleges
that those who qualified as residents and who owned property
were granted two votes. The votes of the special election were
tallied, and the majority of eligible voters approved the
issuance of the general obligation bonds—637 votes to 606
votes. Nichols is a property owner in Rehoboth Beach and
voted in the special election.




                              4
                              B.
        Nichols filed this action 19 days after the special
election vote took place. About a month later, she filed a four-
count amended complaint against the City of Rehoboth
Beach, Sam Cooper (mayor of Rehoboth Beach), and Sharon
Lynn (city manager of Rehoboth Beach). In Counts I and II of
the amended complaint, Nichols alleged that Rehoboth Beach
violated the Fourteenth Amendment by requiring voters to
live in, or hold property in, Rehoboth Beach for six months
before being entitled to vote as residents. In Count III, she
alleged that Rehoboth Beach violated the Fourteenth
Amendment by allowing property owners to vote more than
once. Count IV was a pendent state law claim for “exceeding
authority” in which Nichols alleged that Rehoboth Beach had
violated Delaware law by purchasing the newspaper
advertisement encouraging voters to support the issuance of
bonds.
       Rehoboth Beach filed a motion to dismiss Nichols’s
amended complaint, arguing, among other things, that
Nichols lacked standing because, as a resident and property
owner, she had voted in the election and had thus suffered no
injury. The District Court issued a memorandum opinion and
order granting Rehoboth Beach’s motion and dismissing the
case for lack of subject matter jurisdiction. The District Court
explained:
       The court agrees with Defendants that Nichols
       lacks standing. Initially, the court agrees with
       Defendants that Nichols is not contesting the
       expenditure of tax funds, but the legality of the
       Special Election. Second, the court notes that
       Nichols suffered no particularized injury as a
       result of the Special Election. Nichols is a




                               5
       property owner in the city and had the right to
       vote in the Special Referenda Election. Thus,
       she lacks the concrete personal injury necessary
       to bring suit. As a result, the court lacks the
       subject matter jurisdiction to hear this action.


(App. 19–20.) Having concluded that it lacked subject matter
jurisdiction, the District Court did not address any of
Rehoboth Beach’s remaining arguments. Nichols timely
appealed.
                              II.
       “We have jurisdiction pursuant to 28 U.S.C. § 1291
over a dismissal for lack of subject matter jurisdiction, and
our review for lack of subject matter jurisdiction is plenary.”
Swiger v. Allegheny Energy, Inc., 

, 180 (3d Cir.
2008).
                             III.
       Nichols argues that the District Court misperceived her
allegations and that she has standing—not as a voter but as a
municipal taxpayer. She presents two bases upon which we
could find that she has municipal taxpayer standing to bring
her case. First, she argues that she has standing to challenge
the $52.5 million in municipal debt incurred by an allegedly
unlawful special election. Second, she contends that she has
standing to challenge Rehoboth Beach’s use of municipal
funds to hold the special election and to purchase a
newspaper advertisement in support of that election.
Nichols’s first argument fails because she has not challenged
the expenditure of the $52.5 million, merely the special
election that approved the issuance of the bonds. Her second
argument fails because she has not alleged a direct link




                              6
between the expenditure of municipal funds and the
challenged aspect of the municipal action and because those
expenditures were de minimis.
           A.     Municipal Taxpayer Standing
       “Article III of the Constitution limits the judicial
power of the United States to the resolution of Cases and
Controversies, and Article III standing enforces the
Constitution’s case-or-controversy requirement.” Hein v.
Freedom From Religion Found., Inc., 

, 597–98
(2007) (internal quotation marks and alterations omitted).
“One of the controlling elements in the definition of a case or
controversy under Article III is standing.” 

(internal
quotation marks and alterations omitted). The elements
necessary for establishing “the irreducible constitutional
minimum of standing” under Article III are as follows:
       First, the plaintiff must have suffered an injury
       in fact—an invasion of a legally protected
       interest which is (a) concrete and particularized,
       and (b) actual or imminent, not conjectural or
       hypothetical. Second, there must be a causal
       connection between the injury and the conduct
       complained of—the injury has to be fairly
       traceable to the challenged action of the
       defendant, and not the result of the independent
       action of some third party not before the court.
       Third, it must be likely, as opposed to merely
       speculative, that the injury will be redressed by
       a favorable decision.


Lujan v. Defenders of Wildlife, 

, 560–61 (1992)
(internal quotation marks, citations, and alterations omitted).




                               7
        The Supreme Court has roundly rejected federal
taxpayer standing noting that a federal taxpayer’s interest “in
seeing that Treasury funds are spent in accordance with the
Constitution does not give rise to the kind of redressable
‘personal injury’ required for Article III standing.” 

(explaining that an “interest in ensuring that
[federal] funds are not used by the Government in a way that
violates the Constitution” is “too generalized and attenuated
to support Article III standing”). This follows from the fact
that a federal taxpayer’s
      interest in the moneys of the treasury . . . is
      shared with millions of others, is comparatively
      minute and indeterminable, and the effect upon
      future taxation, of any payment out of the funds,
      so remote, fluctuating and uncertain, that no
      basis is afforded for an appeal to the preventive
      powers of a court of equity.
Frothingham v. Mellon, decided with Massachusetts v.
Mellon, 

, 487 (1923); see also Doremus v. Bd. of
Ed. of Hawthorne, 

, 433 (1952) (reiterating that
“the interests of a taxpayer in the moneys of the federal
treasury are too indeterminable, remote, uncertain and
indirect to furnish a basis for an appeal to the preventive
powers of the Court over their manner of expenditure”).
       Likewise, “state taxpayers have no standing under
Article III to challenge state tax or spending decisions simply
by virtue of their status as taxpayers.” DaimlerChrysler Corp.
v. Cuno, 

, 346 (2006). Federal and state
taxpayers cannot show Article III standing based on their
status as taxpayers “because the alleged injury is not concrete
and particularized, but instead a grievance the taxpayer
suffers in some indefinite way in common with people




                              8
generally.” 

(internal citations and quotation marks
omitted). “In addition, the injury is not actual or imminent,
but instead conjectural or hypothetical.” 

marks omitted).
      The Supreme Court has, however, allowed one form of
taxpayer standing to survive: standing based on municipal
taxpayer status. This difference in the treatment of municipal
taxpayers is justified, at least in theory, by the closeness
between the municipal taxpayer and the expenditure of
municipal taxpayer funds. As explained in Frothingham:
       The interest of a taxpayer of a municipality in
       the application of its moneys is direct and
       immediate and the remedy by injunction to
       prevent their misuse is not inappropriate. It is
       upheld by a large number of state cases and is
       the rule of this court. . . . The reasons which
       support the extension of the equitable remedy to
       a single taxpayer in such cases are based upon
       the peculiar relation of the corporate taxpayer to
       the corporation, which is not without some
       resemblance to that subsisting between
       stockholder and private 

–87. Thus, unlike a state or federal taxpayer, a
municipal taxpayer may challenge certain expenditures of
municipal funds in federal court.
       Though a municipal taxpayer may, in some cases,
challenge municipal expenditures, her right to do so is not
unlimited. We have applied the “good-faith pocketbook”
requirements, articulated by the Supreme Court in Doremus,
to municipal taxpayer standing. 

(explaining that “a good-faith pocketbook action” is one in
which a plaintiff alleges “a direct dollars-and-cents injury”).



                               9
The municipal taxpayer plaintiffs in Doremus challenged a
state law mandating Bible reading in public 

–31. The Supreme Court concluded that they lacked
standing as municipal taxpayers because they failed to show
that the Bible reading resulted in any direct monetary cost. 

(“[I]t is neither conceded nor proved that the brief
interruption in the day’s schooling caused by compliance with
the statute adds cost to the school expenses or varies by more
than an incomputable scintilla the economy of the day’s
work.”). The plaintiffs made no allegation that the Bible
reading was “supported by any separate tax or paid for from
any particular appropriation or that it adds any sum whatever
to the cost of the school.” 

Furthermore, the
plaintiffs failed to show that the Bible reading had any impact
on their overall tax burden. 

is given as
to what kind of taxes are paid by appellants and there is no
averment that the Bible reading increases any tax they do pay
or that as taxpayers they are, will, or possibly can be out of
pocket because of it.”). Thus, the Supreme Court made clear
in Doremus that in order for a municipal taxpayer to have
standing in federal court, she must demonstrate (1) that a
particular expenditure accompanied the allegedly illegal
practice and (2) that it put her “out of pocket.”
       Accordingly, in ACLU-NJ v. Township of Wall, we
recognized that, following Doremus, plaintiffs must
“establish more than a potential de minimis drain on tax
revenues due to the [allegedly unconstitutional conduct].” 

, 262 (3d Cir. 2001). In ACLU-NJ, residents of Wall
Township, New Jersey, filed a suit against the Township,
alleging that the Township’s holiday display violated the
Establishment Clause of the First Amendment. 

The
holiday display consisted of a variety of holiday items,
including a crèche and a menorah. We observed that, even



                              10
though the Township “own[ed] the Nativity display, and
presumably the menorah, and the overall display [was] set up
with defendant’s support, direction and/or approval,” the
Township did not “maintain” the display. 

As such,
we held that the plaintiffs lacked standing because they
“failed to establish an expenditure on the challenged elements
of the [holiday] display.” 

The Township did
not expend funds by displaying the religious elements it
owned. A plaintiff must therefore establish a municipal
expenditure on the challenged aspect of the disputed practice
in order to have municipal taxpayer standing.
       We further clarified that, even if the Township had
used its own paid employees to erect the display, or had used
Township funds to light it, we would not, without further
evidence, assume that such expenditures amounted to
anything more than de minimis expenditures. And, consistent
with Doremus, de minimis expenditures attributable to the
challenged practice are insufficient to confer Article III
standing. Therefore, a municipal taxpayer plaintiff must show
(1) that he pays taxes to the municipal entity, and (2) that
more than a de minimis amount of tax revenue has been
expended on the challenged practice itself. 

–64; see also Doe v. Beaumont Indep. Sch. Dist.,

, 282 (5th Cir. 1999).
                B.      The Issuance of Bonds
       As an initial observation, we agree with the District
Court that “Nichols is not contesting the expenditure of tax
funds, but the legality of the Special Election.” (App. 19–20.)
We are not faced with the question of whether Nichols would
have had standing to challenge these voting requirements
under different circumstances—e.g., in a case where she was
not permitted to vote. Certainly, as the District Court




                              11
recognized, Nichols was both a property owner in and a
resident of Rehoboth Beach and therefore has no basis to
challenge the voting requirements directly. Instead, Nichols
has attempted to remedy her lack of traditional “injury-in-
fact” by asserting municipal taxpayer standing. This she
cannot do. 1
        In order for a plaintiff to gain access to federal court
using municipal taxpayer standing, she must show that the
municipality has actually expended funds on the allegedly
illegal elements of the disputed practice. Nichols’s argument
on appeal fails to grasp this inherent requirement, despite her
recognition that “[m]unicipal taxpayer standing is available
when there is an expenditure of municipal tax funds on an


       1
          Nichols waives any argument that she has standing as
a voter, see Appellant’s Br. 15 (“The particular injury was to
Ms. Nichols as a municipal taxpayer, not as a voter . . . .”),
but mentions parenthetically that “the dilution of her vote as a
result of those unlawful rules should provide an independent
ground for her standing,” 

is developed only
in a footnote with a brief citation to authority. Any argument
that she has standing as a voter is accordingly waived. See
John Wyeth & Bro. Ltd. v. CIGNA Int’l Corp., 

,
1076 n.6 (3d Cir. 1997) (“[A]rguments raised in passing (such
as, in a footnote), but not squarely argued, are considered
waived.”). The Dissent “question[s] whether anyone else
would be a more suitable plaintiff to litigate . . . the ‘one
person, one vote’ claim.” Dissent, lines 284–85. We do not
pass judgment on whether Nichols would be an appropriate
plaintiff to make such a challenge since she waived her ability
to challenge the voting requirements directly.




                              12
unconstitutional practice.” Appellant’s Br. 8. 2 Because the
$52.5 million was not spent on an illegal practice, Nichols
cannot assert municipal taxpayer standing to challenge the
expenditure.
       The Dissent mischaracterizes the nature of the injury
Nichols alleged and asserts that the proposed issuance of
$52.5 million in general obligation bonds satisfies the injury
requirement. Dissent, Lines 91–93. Certainly, if $52.5 million
had been expended on an illegal practice, this would be a
different case. But Nichols did not allege that there was
anything illegal about what the $52.5 million was to be
expended on. The only expenditure that Nichols can
challenge is the cost of holding the special election—not the
resultant issuance of bonds—and, as we will explain below,
those funds would have been expended regardless of whether
the voting requirements were unconstitutional or not.

       2
          The cases that Nichols cites illustrate that municipal
taxpayer standing exists only in cases where plaintiffs seek to
challenge unlawful expenditures. See, e.g., Smith v. Jefferson
Cty. Bd. of Sch. Comm’rs, 

, 210 (6th Cir. 2011)
(“[M]unicipal taxpayers may fulfill the injury requirement by
pleading an alleged misuse of municipal funds.”); Bd. of Ed.
v. N.Y. Teachers Ret. Sys., 

, 110 (2d Cir. 1995)
(“[A] municipal taxpayer has standing to challenge allegedly
unlawful municipal expenditures.”); Cammack v. Waihee, 

, 770 (9th Cir. 1991) (“[M]unicipal taxpayer standing
simply requires the ‘injury’ of an allegedly improper
expenditure of municipal funds. . . .”); see also Freedom
From Religion Found., Inc. v. Zielke, 

, 1470
(7th Cir. 1988) (“A plaintiff’s status as a municipal taxpayer
is irrelevant for standing purposes if no tax money is spent on
the allegedly unconstitutional activity.”).



                              13
               C.     Municipal Expenditures
       Nichols also contends that she has municipal taxpayer
standing to bring this action on the basis of two expenditures
by Rehoboth Beach: (1) the funds required to hold the special
election and (2) the funds used to purchase an advertisement
in a local newspaper. Neither of these expenditures is
sufficient to grant Nichols standing. As such, she does not
have municipal taxpayer standing to challenge the special
election, and the District Court properly dismissed her
complaint.
                                1.
        We conclude that the expenditure of municipal funds
to hold a special election is not sufficient to establish
municipal taxpayer standing. Nichols alleged that the voting
procedures at the special election—the six-month residency
requirement and the ability of property owners to vote more
than once—violated the Fourteenth Amendment. She did not
assert that Rehoboth Beach expended funds on the allegedly
unconstitutional aspects of the special election, i.e., the voting
requirements. The special election itself would have been
held regardless of the procedures Rehoboth Beach employed.
In other words, Rehoboth Beach would have expended the
funds necessary to hold the special election even if the voting
requirements had been different.
       As noted above, in ACLU-NJ, the plaintiffs could not
show that the Township expended funds on the challenged
element—the public display of religious symbols. Because
the plaintiffs failed to establish an expenditure on the
challenged elements of the holiday display, they could not
show municipal taxpayer standing. 

–64. Here, Nichols’s concern is not that Rehoboth Beach
held a special election to approve bonds but rather that some



                               14
of the requirements of the special election were
unconstitutional. But the complaint fails to allege any direct
link between the expenditure of municipal funds and the
allegedly unconstitutional elements of the special election—
and this failure is fatal to Nichols’s claim. 3
                              2.
       Rehoboth Beach’s purchase of an advertisement in a
local newspaper similarly does not support municipal
taxpayer standing in this instance. There is no dispute that
Rehoboth Beach expended municipal funds when it
purchased an advertisement alerting the public to the special
election. Again, the purported illegality of the election
procedures has nothing to do with the expenditure of funds
for the advertisement—an appropriate expenditure. The

       3
         Even if there were a direct connection between the
funds expended on the special election and the challenged
voting practice, we would reach the same result. That de
minimis costs were associated with the special election itself
does not give rise to Article III standing. 

(requiring more than de minimis municipal
expenditures to make a “good-faith pocketbook action”). The
Dissent asserts that “the issuance of $52.5 million in
municipal bonds cannot really be compared to the trivial
amount of taxpayer money a municipality could have
possibly spent to erect and light two discrete components of a
seasonal holiday display.” Dissent, Lines 116–19. Obviously
not. But that comparison misses the mark since the $52.5
million at issue in this case was not expended on a challenged
practice. By contrast, the challenged expenditure in ACLU-NJ
was the cost of erecting and lighting the religious elements in
the holiday display, which is comparable to the expense of
holding the election here.



                              15
advertisement simply urged eligible voters to participate.
Moreover, the cost is analogous to the types of expenses
dismissed in ACLU-NJ as de minimis—such as the cost of
electricity required to light the religious elements of a display.
Accordingly, the advertisement does not qualify as the kind
of “direct dollars-and-cents injury” required under Doremus
for “a good-faith pocketbook action.” 

; see also Fuller v. Volk, 

, 327 (3d Cir. 1965)
(“[I]n order for the taxpayer to have standing, he must show
that his position as a taxpayer is in some way affected . . . .”).
This expenditure cannot, therefore, serve as a basis for
municipal taxpayer standing.
                               IV.
       Because Nichols does not have standing as a municipal
taxpayer, we will affirm the District Court’s dismissal of her
case for lack of subject matter jurisdiction.




                               16
Nichols v. City of Rehoboth Beach, et al., No. 15-3979,
dissenting.

COWEN, Circuit Judge.

        I must respectfully dissent. The City of Rehoboth
Beach held a special election to authorize a $52.5 million
bond issuance, which was approved—637 votes to 606 votes.
In Counts I and II of her amended complaint, Jackie Nichols
alleged that Rehoboth Beach, Mayor Sam Cooper, and City
Manager Sharon Lynn violated the Fourteenth Amendment
by requiring individuals to reside in the municipality for at
least six months in order to cast votes as Rehoboth Beach
residents. In Count III, she claimed that Defendants violated
“the ‘one person, one vote’ principle of the 14th Amendment”
by allowing “individuals one vote for each parcel of property
they owned in Rehoboth (directly or indirectly through an
entity), in addition to one vote if they also resided in
Rehoboth.” (A12.) “Count IV was a pendent state law claim
for ‘exceeding authority’ in which Nichols alleged that
Rehoboth Beach had violated Delaware law by purchasing
the newspaper advertisement encouraging voters to support
the issuance of bonds.” (Maj. Op. at 5.) Unlike the majority,
I conclude that Nichols—as a municipal taxpayer—has
Article III standing to bring her federal constitutional claims
as well as her state law cause of action. In addition, I believe
that, while she fails to satisfy the requirements for prudential
standing with respect to Counts I and II, she has prudential
standing to litigate Counts III and IV.

       The majority appropriately points out that “[t]he
Supreme Court has, however, allowed one form of taxpayer
standing to survive: standing based on municipal taxpayer




                               1
status.” (Id. at 9.) Under the doctrine of municipal taxpayer
standing, “[t]he interest of a taxpayer of a municipality in the
application of its money is direct and immediate and the
remedy by injunction to prevent their misuse is not
inappropriate.” Frothingham v. Mellon, 

, 486
(1923). “In other words, under Frothingham we presume a
municipal taxpayer’s relationship to the municipality is
‘direct and immediate’ such that the taxpayer suffers concrete
injury whenever the ‘challenged activity involves a
measurable appropriation or loss of revenue.’” United States
v. City of N.Y., 

, 470 (2d Cir. 1992) (quoting
D.C. Common Cause v. Dist. of Columbia, 

, 5
(D.C. Cir. 1988)). In fact, a number of judges have
questioned whether this well-established approach—which
dates back to the 1800s—is at odds with both modern
standing principles as well as the contemporary realities of
municipal financing and spending practices. See, e.g., Smith
v. Jefferson Cty. Bd. of Sch. Comm’rs, 

, 221
(6th Cir. 2011) (en banc) (Sutton, J., concurring) (addressing
“tension between the municipal-taxpayer-standing doctrine
and modern standing principles”); City of 

(questioning Frothingham presumption given existence
of municipalities with multi-billion dollar budgets).
According to the Sixth Circuit, “municipal taxpayers are able
to rely on what would otherwise be labeled a generalized
grievance,” and they are thereby allowed “to sidestep the
‘zone of interest’ test that courts apply in other instances.”
Smith v. Jefferson Cty. Bd. of Sch. Comm’rs, 

,
591 n.4 (6th Cir. 2015) (citing 

(Sutton, J., concurring)), cert. denied sub nom. Kucera v.
Jefferson Cty. Bd. of Sch. Comm’rs, 

(2016).
Yet “[t]he Supreme Court created the distinction and has
stood by it for some time, requiring lower courts like ours to




                               2
apply it as is.” 

(Sutton, J., concurring)
(citing Rodriguez de Quijas v. Shearson/Am. Express Inc.,

, 484 (1984)).

       I find that the District Court did not approach this
generous notion of municipal taxpayer standing with the
seriousness and care it deserves. “If standing is ‘one of the
most amorphous [concepts] in the entire domain of the public
law,’ Flast v. Cohen, [

, 99 (1968)], nowhere is
this better demonstrated than in the area of municipal
taxpayer standing.” Warnock v. NFL, 

,
540 (W.D. Pa.), aff’d, 154 F. App’x 291 (3d Cir. 2005).
Nevertheless, the District Court merely cited general legal
principles governing the standing inquiry and, without a
detailed explanation, stated that it “agrees with Defendants
that Nichols is not contesting the expenditure of tax funds, but
the legality of the Special Election.” Nichols v. City of
Rehoboth Beach, C.A. No. 15-602 GMS, 

,
at *3 (D. Del. Dec. 14, 2015). Unlike the majority, the
District Court did not discuss any municipal taxpayer cases or
address the governing principles of this doctrine. The
majority, in any event, recognizes that we exercise de novo
review over the District Court’s dismissal on standing
grounds. See, e.g., Edmonson v. Lincoln Nat. Life Ins. Co.,

, 414 (3d Cir. 2013), cert. denied, 

(2014). “In examining a challenge to a party’s standing,
the Court must accept as true all material allegations set forth
in the complaint and construe those facts in favor of the
nonmoving party.” Nichols, 

, at *2 (citing
Warth v. Seldin, 

, 501 (1975); Storino v.
Borough of Point Pleasant Beach, 

, 296 (3d Cir.
2003)). General factual allegations of injury resulting from
the defendant’s actions may be sufficient at the motion to




                               3
dismiss stage. See, e.g., Lujan v. Defenders of Wildlife, 

, 561 (1992).

        To satisfy the standing requirements of Article III, a
plaintiff must show that: (1) he or she has suffered an injury
in fact “that is (a) concrete and particularized and (b) actual or
imminent, not conjectural or hypothetical;” (2) the injury is
fairly traceable to the defendant’s challenged action; and (3) it
is likely that the injury will be redressed by a favorable
decision. Friends of the Earth, Inc. v. Laidlaw Envt’l Servs.
(TOC), Inc., 

, 180-81 (2000) (citing 

). In order to meet the injury requirement, a
municipal taxpayer must establish a so-called “good-faith
pocketbook” injury. See, e.g., ACLU-NJ v. Twp. of Wall,

, 262 (3d Cir. 2001) (“[A] municipal taxpayer
may possess standing to litigate ‘a good faith pocketbook
action.’” (citing Doremus v. Bd. of Educ., 

(1952))); see also, e.g., Fuller v. Volk, 

, 327 (3d
Cir. 1965) (stating that, in order to have standing, plaintiff
must show position as taxpayer is in some way affected and,
in short, that action constitutes good-faith pocketbook action).
A municipal taxpayer establishes a good-faith pocketbook
injury by showing “a measurable appropriation or
disbursement” of public funds “occasioned solely by the
activities complained of.” Doremus v. Bd. of Educ., 

, 434 (1952) (citing Everson v. Bd. of Educ., 

(1947)); see also, e.g., D.C. Common Cause v. Dist. of
Columbia, 

, 4 (D.C. Cir. 1988) (“One commentator
has interpreted Doremus as requiring a taxpayer to challenge
an activity involving an expenditure of public funds that
would not otherwise be made.” (citing Note, Taxpayers’
Suits: A Survey and Summary, 69 Yale L.J. 895, 922
(1960))).




                                4
        According to Nichols, she has an interest as a
municipal taxpayer in challenging “the unlawful incurring of
municipal debt by issuing bonds to be repaid from tax funds.”
(Appellant’s Brief at 11 (footnote omitted).) She also points
to the Defendants’ use of taxpayer funds to purchase a
newspaper advertisement and to conduct the special election.
I believe that the proposed issuance of $52.5 million in
general obligation bonds—based on an election conducted
pursuant to allegedly unconstitutional voting rules and
decided by a mere thirty-one votes—satisfies the injury
requirement.      Likewise, this bond issuance meets the
causation and redressability prongs. Because Nichols thereby
has Article III standing to pursue her federal constitutional
claims, I need not—and do not—consider whether the
election expenditures likewise meet these standing
requirements. In addition, I conclude that the use of taxpayer
money to purchase an advertisement in a local newspaper
satisfies the requirements for Article III standing with respect
to Nichols’s state law cause of action.

       The proposed bond issuance constitutes a “good-faith
pocketbook” injury. In ACLU-NJ v. Township of Wall, 

(3d Cir. 2001), two taxpayers challenged on
Establishment Clause grounds the inclusion of a crèche and a
menorah in a holiday display erected near the entrance to the
township’s municipal building, 

We determined
that the plaintiffs failed to carry “their burden of proving an
expenditure of revenues to which they contribute that would
make their suit ‘a good-faith pocketbook action.’” 

(quoting 

). The Court explained
that, even if we were to assume that the display was erected
by paid municipal employees, “there is no indication that the




                               5
portion of such expenditure attributable to the challenged
elements of the display would have been more than the de
minimis expenditure that was involved in the Bible reading in
Doremus [in which the teacher or school principal was
responsible for the readings].” 

(citing Doremus v.
Bd. of Educ., 

, 733 (N.J. Super. Ct. 1950); Doe v.
Madison Sch. Dist. No. 321, 

, 794 (9th Cir.
1999) (en banc)). Similarly, the ACLU-NJ Court refused to
assume that the township expended more than a de minimis
amount of money to light the display’s religious elements. 

the display also featured an evergreen tree,
decorated urns, and candy can banners. 

However,
the issuance of $52.5 million in municipal bonds cannot
really be compared to the trivial amount of taxpayer money a
municipality could have possibly spent in order to erect and
light two discrete components of a seasonal holiday display.
This appeal instead implicates millions of dollars in debt
“backed by the full faith and credit of the issuing
municipality” and payable “by tax revenue.” In re Smurfit-
Stone Container Corp., 

, 737 n.2 (Bankr. D. Del.
2010) (citing Greenberg, Municipal Sources: Some Basic
Principles and Practices, 9 Urb. Law. 340-41 (1977)). Such
indebtedness clearly represents a measurable liability or
encumbrance of the municipality. Given the nature of the
relationship between a municipality and municipal
taxpayers—“which is not without some resemblance to that
subsisting between stockholder and private corporation,”

(citing 4 Dillon, Municipal
Corporations § 1580 et seq (5th ed.))—this liability in turn
constitutes a burden on the taxpayers themselves, see, e.g.,
Crampton v. Zabriskie, 

, 609 (1879) (“[I]t would
seem eminently proper for courts of equity to interfere upon
the application of the taxpayers of a county to prevent the




                              6
consummation of a wrong, when the officers of those
corporations, assume, in excess of their powers, to create
burdens upon property-holders.”).

       According to the majority, Nichols “has not challenged
the expenditure of the $52.5 million, merely the special
election that approved the issuance of the bonds.” (Maj. Op.
at 6.) Purportedly, “[b]ecause the $52.5 million was not spent
on an illegal practice, Nichols cannot assert municipal
taxpayer standing to challenge the expenditure.” (Id. at 13.) I
nevertheless believe that an expenditure of taxpayer money
specifically “approved” by a special election conducted under
unconstitutional voting rules constitutes “an illegal practice.”
These two components—i.e., the expenditure and the election
approving the expenditure—should not be severed in the
manner suggested by the majority. After all, the legality of
the bond issuance itself depends on the special election and
its outcome—which, in this case, was decided by thirty-one
votes. Could an expenditure really be considered anything
other than “an illegal practice” where the requisite election
approving the expenditure itself violated “the ‘one person,
one vote’ principle of the 14th Amendment” as well as basic
constitutional principles governing voter residency
requirements? (A12.)

         Federal “municipal taxpayer” cases also indicate that
Nichols satisfies the injury requirement with respect to the
proposed bond issuance and the underlying special election.
ACLU-NJ had already been fully litigated on the merits, and
the plaintiffs accordingly had the burden of proving their
standing “‘in the same way as any other matter on which the
plaintiff bears the burden of proof, i.e., with the manner and
degree of evidence required at successive stages of the




                               7
litigation.’” 

(quoting 

). This matter comes to us on a motion to dismiss.
As the District Court acknowledged, we must accept as true
all material allegations set forth in the complaint, and general
factual allegations of injury may be sufficient at this early
stage of the litigation. See, e.g., 

;

. In addition, I have already
highlighted the generous nature of the municipal taxpayer
standing doctrine. In fact, a municipal taxpayer need not
show there is a likelihood of any resulting savings that will
inure to his or her benefit, see, e.g., City of 

, or “a net loss to the municipal fisc,” 

(citing, inter alia, 

). In
Crampton v. Zabriskie, 

(1879), the Supreme
Court concluded that county taxpayers had standing to
challenge a bond issuance on the grounds that the issuance
violated a state statute limiting the county’s total expenditures
to the amount of money it raised by taxes, 

We
similarly should permit a taxpayer to challenge a bond
issuance on the grounds that it is based on an election
conducted in an unconstitutional manner.

        As Nichols points out, a number of state supreme
courts have held that municipal taxpayers possessed the
requisite standing to challenge the issuance of bonds on the
grounds of underlying electoral illegalities. Relying on the
United States Supreme Court’s ruling in Crampton, the
Virginia Supreme Court of Appeals stated that, “[w]henever a
citizen and taxpayer is confronted with the proposition that an
illegal election for the issuance of bonds has been held and
the issuance of the bonds will result in the imposition of an
illegal tax burden upon him, he has the right to proceed either
in equity to enjoin the issuance of the bonds . . . or to proceed




                               8
by filing a petition in the pending matter.” Appalachian Elec.
Power Co. v. Town of Galax, 

, 392 (Va. 1939).
The Idaho Supreme Court concluded that a municipal
taxpayer could contest the result of a special bond election—
and the official declaration of the election result—on the
grounds that several identified persons were permitted to vote
even though they were not qualified to do so (and that,
without these votes, the proposition would not have passed).
Henley v. Elmore Cty., 

, 856-57 (Idaho 1952).
More recently, Maine’s highest court allowed a taxpayer to
challenge a municipality’s attempt to incur debt based on
what the taxpayer believed was an unlawful recounting of
previously rejected absentee ballots. McCorkle v. Town of
Falmouth, 

, 337-39 (Me. 1987).                Even
Defendants acknowledge that the McCorkle and Henley
courts allowed the respective taxpayers to “challenge
municipality’s vote count.” (Appellees’ Brief at 16 n.9
(citing 

; 

).) If a municipal taxpayer has standing to challenge the
vote count, why wouldn’t he or she have the right to
challenge the constitutionality of the basic rules the
municipality used to decide who may vote—and how many
votes they may cast? 1

      1
         While we should approach state court case law
applying standing principles with some caution, see, e.g.,
Rocks v. City of Phila., 

, 647 (3d Cir. 1989)
(rejecting plaintiffs’ argument that “we should apply
Pennsylvania case law respecting the broad rights of
municipal taxpayers to sue local government agencies”), I
find that these bond election opinions have special
significance given the fact that neither the majority nor
Defendants themselves cite to any contrary federal (or even




                              9
        Likewise, Nichols’s pendent state law claim
constitutes a good-faith pocketbook action. The majority
compares the expense of buying a single newspaper
advertisement with the potential de minimis costs of erecting
and lighting the religious elements of the seasonal holiday
display at issue in ACLU-NJ. However, the taxpayers’
Establishment Clause claim implicated the purported costs of
erecting and lighting the crèche and menorah—as opposed to
what the township may have spent to erect and light the
display in its entirety. In contrast, Nichols does not merely
challenge some minor component of a municipal expenditure.
She instead alleged that it was the purchase of the newspaper
advertisement itself that violated Delaware state law.
According to her amended complaint, “Rehoboth, utilizing
taxpayer funds (on information and belief), caused to be
published in a local newspaper a full-page advertisement
exhorting people to ‘Vote Yes,’ i.e., in favor of the proposed
outfall project, and presenting a one-sided view of the project,
without affording opponents the opportunity by means of that
financed medium to present their side.” (A12-A13.) “The
expenditure is not within Rehoboth’s express or implied
power and so is unlawful.” (A13.) While it may not have
cost the municipality and its taxpayers that much money to
purchase a single advertisement, “‘[m]unicipal taxpayer
standing simply requires the “injury” of an allegedly


state) case law that specifically consider whether a taxpayer
has standing to challenge a bond issuance based on purported
irregularities in the bond election. This case law also appears
to be consistent with the generous doctrine of taxpayer
standing recognized by the United States Supreme Court. See
Appalachian Elec. Power 

(quoting

).




                              10
improper expenditure of municipal funds’” (Maj. Op. at 13
n.2 (quoting Cammack v. Waihee, 

, 770 (9th
Cir. 1991))). See, e.g., D.C. Common 

(“Although the factual record on this allegation is sparse, we
think appellees have made a sufficient showing to avoid
dismissal for lack of standing. The District spent $7,000 in
the 1984 campaign [to influence the outcome of an initiative],
which is evidence that it may do so again.” (citation
omitted)).

        “Injury is only the first part of the standing analysis;
the plaintiff must also establish that the challenged action
caused the injury and that the injury would be redressed by a
favorable decision.” 

(citing Allen v. Wright, 

, 751 (1984)). Defendants insist that, “[b]ecause the
Delaware General Assembly adopted the voting requirements
contained in the City’s Charter, the ‘causation’ prong is not
satisfied because the challenged conduct is not caused by the
City, rather it is ‘th[e] result [of] the independent action of
some third party not before the court’—the State.”
(Appellees’ Brief at 21 (quoting 

).)
In fact, Defendants repeatedly attempt to shift the focus—and
blame—from themselves to the State of Delaware.
Nevertheless, it was Defendants’ choice to undertake a
special election, to enforce the allegedly unconstitutional
voting rules set forth in the City Charter, and to incur millions
of dollars in municipal debt on the basis of what turned out to
be a closely contested election. “[G]overnment officials are
not bound to follow state law when that law is itself
unconstitutional. Quite the contrary: in such a case, they are
bound not to follow state law.” Carhart v. Steinberg, 

, 1152 (8th Cir. 1999), aff’d, 

(2000). Nichols likewise seeks only prospective relief, and




                               11
the doctrine of qualified immunity does not apply to such
claims. See, e.g., Hill v. Borough of Kutztown, 

,
244 (3d Cir. 2006).

        More generally, I find that Plaintiffs satisfy both the
causation and redressability elements. As the majority notes,
“municipal taxpayer standing simply requires the ‘injury’ of
an allegedly improper expenditure of municipal funds.”
Cammack v. Waihee, 

, 770 (9th Cir. 1991). In
this case, the “injury” consists of a proposed multi-million
dollar bond issuance—which was based on a special election
decided by a mere thirty-one votes pursuant to voting rules
that allegedly violated the Fourteenth Amendment. In turn,
the federal judiciary could provide redress by, inter alia,
enjoining Defendants from issuing any bonds if they fail to
conduct an election that complies with the United States
Constitution. 2 With respect to the state law claim, Nichols
specifically alleged an improper expenditure of funds—the
purchase of a newspaper advertisement presenting a one-
sided view of the proposed project—which could be remedied
by declaratory or injunctive relief. See, e.g., D.C. Common

(“Appellees’ injury—the District’s

       2
         While Defendants take issue with Nichols’s failure to
raise her objections until after the special election took place,
they do not cite to any case specifically holding that the
respective plaintiffs lacked standing because they failed to
object before the election or took too long to file their lawsuit
(and, in two of the decisions they cite, the courts actually
determined that the plaintiffs possessed standing, see Fulani
v. Hogsett, 

, 1030 (7th Cir. 1990); Soules v.
Kauaians for Nukoli Campaign Comm., 

, 1179
(9th Cir. 1988)).




                               12
future misuse of public funds [to influence the outcome of
initiatives]—will be redressed by an injunction prohibiting
such expenditures.”).

        Having determined (unlike the majority) that Nichols
possesses standing under Article III to pursue her
constitutional and state law claims, I must also consider
whether she satisfies the requirements for prudential standing.
In Rocks v. City of Philadelphia, 

(3d Cir. 1989),
several city taxpayers and residents “asserted an equal
protection violation resulting from the application of minority
business enterprise participation requirements (‘MBE’) to a
city construction project,” 

We agreed with the
district court that these plaintiffs—as municipal taxpayers—
had Article III standing. 

However, “[t]he question
is whether these appellants have sustained a proximate,
individual, and addressable injury, based solely upon their
status as municipal residents and taxpayers.” 

our earlier ruling in Frissell v. Rizzo, 

(3d Cir.
1979), abrogation on other grounds recognized by Amato v.
Wilentz, 

(3d Cir. 1991), the Rocks Court
concluded that the plaintiffs had not satisfied these prudential
requirements.      

.           Frissell, a
Philadelphia taxpayer, sought to enjoin the mayor from
denying customary public advertising to a newspaper in
retaliation for unfavorable news articles, although the
newspaper had not joined in the lawsuit or filed its own action
against the city. 

this case no business
enterprise or construction worker, those most likely to have
suffered injury under the challenged bid specifications, has
joined the complaint or brought suit to enjoin the city. The
appellants here are solely taxpayers, resting their claim on the
legal rights and interests of third parties, to-wit, those




                              13
business entities and workers not qualifying under the MBE
requirements.” Id.; see also 

(“Rocks suggests that plaintiff is required to establish more
than an injury received ‘solely’ on his status as a municipal
taxpayer in order to overcome prudential standing
limitations.”).

       In light of Rocks (and Frissell), I conclude that Nichols
lacks prudential standing to bring Counts I and II challenging
the imposition of a sixth-month residency requirement. But I
reach the opposite conclusion with respect to her state law
cause of action (Count IV) as well as her claim (Count III)
alleging that Defendants violated the Fourteenth Amendment
by allowing property owners to vote more than once in the
special election. On the one hand, Nichols satisfied the sixth-
month residency requirement and accordingly was allowed to
vote in the special election—which she did. No disqualified
voter, “those most likely to have suffered injury under [this
residency requirement],” has joined this litigation or filed
their own actions against Defendants. 

. On the other hand, a rule granting multiple votes to
property owners—as well as a bond issuance based on the
outcome of a closely contested election conducted under such
a voting rule—directly affected Nichols herself.            The
purchase of an allegedly illegal newspaper advertisement
similarly injured her. She accordingly need not rest her claim
on “the legal rights and interests of third parties.” 

residents disqualified from voting in the election would
appear to be the most appropriate parties to challenge the
residency requirement, I question whether anyone else would
be a more suitable plaintiff to litigate either the “one person,
one vote” claim or the pendent state law cause of action.




                              14
       In conclusion, I would affirm the District Court’s order
in part and vacate it in part. The order would be affirmed
insofar as it dismissed Counts I and II of the amended
complaint. Otherwise, I would vacate the order insofar as it
dismissed Counts III and IV.




                              15