The U.S. Supreme Court overturned the Cuno Case May 15, but does the ruling spell the ultimate end of the debate over 'corporate welfare?' Apparently not.

Of course, Cuno specifically challenge the legality of incentives for existing industry. It was based on a law suit involving Daimler-Chrysler's expansion of an Ohio-based plant.

While the Court ruled unanimously to overturn the ruling by a lower Ohio circuit court panel, it did so based on narrow criteria: lack of standing of the Plaintiffs.

"This is very good news, but only as far as it goes," according to J.C Biggins, Managing Executive Partner of SBB, a CoreNet Global Economic Development Leadership Awards partner.

"There was concern that the Court might well dispose of the case on these narrow grounds - narrow in the sense that the decision does not squarely deal with the merits of states' rights to decide if and how they chose to use incentives to compete in the market place for jobs and investment."

The incentives that states and communities offer total more than $50-billion annually and generate considerable economic impact in terms of the commercial real estate markets, as well as generating GNP-expanding impact from job creation, capital investment and infrastructure improvements.

"The judgment left the legal question open," agrees Gordon Lorig of AREC Associates. "The industry should look forward to another case that would result in a definitive ruling."

The immediate market impact appears favorable, but longer-term doubts may persist. "While the Cuno decision is helpful in clarifying the ground rules for the market," Biggins observes, "it only goes as far as its facts, and thus is no assurance against future litigation risks."

Lorig expresses some concerns about the markets but thinks another legal challenge may work to the industry's favor. "The lack of a clear decision may result in a 'chill' on the efforts of some communities to move forward with economic development programs. It is in the best interests of the industry to welcome a new challenge and to aggressively defend its position."

"Cuno clearly presented the wrong plaintiffs," Biggins also says, "but there may be others that can satisfy the constitutional standards for 'standing,' for example, competitors whose type and extent of 'injury' may survive the Court's standards."

But checks and balances could come into play. Congress can still clarify the merits of incentives. It had the chance to do so before the court ruling on May 15, and it can do so in the future.

As for the judicial branch, Biggins advises that the continuing saga of Cuno is not quite over, and neither is the debate over the merit of economic development incentives. "Stay tuned for the next test case to work its way through the Federal court system," he says, casting an eye to the next chapter of this still-unresolved question.

Ultimately, will the essence of free markets and free enterprise prevail? "Incentives are a fact of economic life," offers Dennis Donovan of WDG Consulting. "In a free market like the U.S., I do not foresee the congress or courts limiting the application of incentives. I believe that business should proceed as usual."

Richard Kadzis, CAE, is Senior Contributing Editor to Corporate Real Estate LEADER magazine, the official publication of CoreNet Global.