Respondents in No. 74-1124 (hereinafter respondents), several
low income individuals and organizations representing such
individuals, brought this class action in District Court on behalf
of all persons unable to afford hospital services, against the
Secretary of the Treasury and the Commissioner of Internal Revenue.
They claimed that Revenue Ruling 69-545, which announced an
Internal Revenue Service policy of extending favorable tax
treatment under the Internal Revenue Code of 1954 (Code) to
hospitals that did not serve indigents to the extent of the
hospitals' financial ability, "encouraged" hospitals to deny
services to indigents, and was invalid because it was an erroneous
interpretation of the Code and because it had been issued in
violation of the Administrative Procedure Act (APA). The complaint
described instances in which the individual respondents had been
refused treatment, because of their indigency, at hospitals
enjoying favorable tax treatment under the policy announced in the
challenged Revenue Ruling and alleged to be receiving substantial
contributions as a result of that treatment. The District Court
overruled the motion to dismiss of petitioners in No. 74-1124
(hereinafter petitioners), which included a challenge to
respondents' standing, and, on cross-motions for summary judgment,
held Revenue Ruling 69-545 void as contrary to the Code. The Court
of Appeals also found standing in respondents, but upheld Revenue
Ruling 69-545.
Held: The District Court should have granted
petitioners' motion to dismiss because respondents failed to
establish their standing to bring this suit. Pp.
426 U. S.
37-46.
(a) When a plaintiff's standing is challenged the relevant
inquiry is whether, assuming justiciability of the claim, the
plaintiff
Page 426 U. S. 27
has shown an injury to himself that is likely to be redressed by
a favorable decision, and unless such a showing is made, a federal
court cannot exercise its power consistent with the "case or
controversy" limitation of Art. III of the Constitution. Pp.
426 U. S.
37-39.
(b) The respondent organizations, which alleged no injury to
themselves
qua organizations, cannot establish standing
simply on the basis that they are dedicated to promoting access of
the poor to health services. An organization's abstract concern
with a subject that could be affected by an adjudication does not
substitute for the concrete injury required by Art. III.
Sierra
Club v. Morton, 405 U. S. 727. Pp.
426 U. S.
39-40.
(c) Allegations that the individual respondents and members of
respondent organizations were denied hospital services because of
indigency do not establish a case or controversy in this suit,
which is not brought against any hospital, but against Treasury
officials. The Art. III "case or controversy" limitation requires
that a federal court act only to redress injury that fairly can be
traced to the challenged action of a defendant, and not solely to
some third party. Pp.
426 U. S.
40-42.
(d) Though petitioners alleged that the adoption of Revenue
Ruling 69-545 "encouraged" hospitals to deny services to indigents,
it is purely speculative (1) whether the alleged denials of service
are ascribable to petitioners' "encouragement" or resulted from the
hospitals' decisions apart from tax considerations, and (2) whether
the exercise of the District Court's remedial powers would make
such services available to respondents. Respondents' allegation
that the hospitals that denied them service receive substantial
contributions, without more, does not establish that those
hospitals are dependent upon such contributions. It thus appears
that respondents relied
"on little more than the remote possibility, unsubstantiated by
allegations of fact, that their situation might have been better
had [petitioners] acted otherwise, and might improve were the
[District Court] to afford relief."
Warth v. Seldin, 422 U. S. 490,
422 U. S. 507.
Consequently, respondents failed to carry their burden of showing
that their injury is the consequence of petitioners' action or that
prospective relief will remove the harm.
Warth v. Seldin,
supra; Linda R.S. v. Richard D., 410 U.
S. 614, followed. Pp.
426 U. S.
42-46.
165 U.S.App.D.C. 239, 506 F.2d 1278, vacated and remanded.
POWELL, J., delivered the opinion of the Court, in which BURGER,
C.J., and STEWART, WHITE, BLACKMUN, and REHNQUIST, JJ.,
Page 426 U. S. 28
joined. STEWART, J., filed a concurring statement,
post, p.
426 U. S. 46.
BRENNAN, J., filed an opinion concurring in the judgment, in which
MARSHALL, J., joined,
post, p.
426 U. S. 46.
STEVENS, J., took no part in the consideration or decision of the
cases.
MR. JUSTICE POWELL delivered the opinion of the Court.
Several indigents and organizations composed of indigents
brought this suit against the Secretary of the Treasury and the
Commissioner of Internal Revenue. They asserted that the Internal
Revenue Service (IRS) violated the Internal Revenue Code of 1954
(Code) and the Administrative Procedure Act (APA) by issuing a
Revenue Ruling allowing favorable tax treatment to a nonprofit
hospital that offered only emergency room services to indigents. We
conclude that these plaintiff lack standing to bring this suit.
I
The Code, in its original version and by subsequent amendment,
accords advantageous treatment to several types of nonprofit
corporations, including exemption of
Page 426 U. S. 29
their income from taxation and deductibility by benefactors of
the amounts of their donations. Nonprofit hospitals have never
received these benefits as a favored general category, but an
individual nonprofit hospital has been able to claim them if it
could qualify as a corporation "organized and operated exclusively
for . . . charitable . . . purposes" within the meaning of §
501(c)(3) of the Code, 26 U.S.C. § 501(c)(3). [
Footnote 1] As the Code does not define the term
"charitable," the status of each nonprofit hospital is determined
on a case-by-case basis by the IRS.
In recognition of the need of nonprofit hospitals for some
guidelines on qualification as "charitable" corporations, the IRS
in 1956 issued Revenue Ruling 56-185. [
Footnote 2] This Ruling established the position of the
IRS to be
"that the term 'charitable' in its legal sense and as it is used
in section 501(c)(3) of the Code contemplates an implied public
trust constituted for some public benefit. . . ."
In addition, the Ruling set out four "general requirements" that
a hospital had to meet, "among other
Page 426 U. S. 30
things," to be considered a charitable organization by the IRS.
Only one of those requirements is important here, and it reads as
follows:
"It must be operated to the extent of its financial ability for
those not able to pay for the services rendered and not exclusively
for those who are able and expected to pay. It is normal for
hospitals to charge those able to pay for services rendered in
order to meet the operating expenses of the institution, without
denying medical care or treatment to others unable to pay. The fact
that its charity record is relatively low is not conclusive that a
hospital is not operated for charitable purposes to the full extent
of its financial ability. It may furnish services at reduced rates
which are below cost, and thereby render charity in that manner. It
may also set aside earnings which it uses for improvements and
additions to hospital facilities. It must not, however, refuse to
accept patients in need of hospital care who cannot pay for such
services. Furthermore, if it operates with the expectation of full
payment from all those to whom it renders services, it does not
dispense charity merely because some of its patients fail to pay
for the services rendered."
Revenue Ruling 56-185 remained the announced policy with respect
to a nonprofit hospital's "charitable" status for 13 years, until
the IRS issued Revenue Ruling 69-545 on November 3, 1969. [
Footnote 3] This new Ruling described
two unidentified hospitals, referred to simply as Hospital A and
Hospital B, which differed significantly in both
Page 426 U. S. 31
corporate structure and operating policies. [
Footnote 4] The description of Hospital A included
the following paragraph:
"The hospital operates a full-time emergency room, and no one
requiring emergency care is denied treatment. The hospital
otherwise ordinarily limits admissions to those who can pay the
cost of their hospitalization, either themselves, or through
private health insurance, or with the aid of public programs such
as Medicare. Patients who cannot meet the financial requirements
for admission are ordinarily referred to another hospital in the
community that does serve indigent patients."
Despite Hospital A's apparent failure to operate "to the extent
of its financial ability for those not able to pay for the services
rendered," as required by Revenue Ruling 56-185, the IRS in this
new Ruling held Hospital A exempt as a charitable corporation under
§ 501(C)(3). [
Footnote 5]
Noting that Revenue Ruling 56-15 had set out requirements
Page 426 U. S. 32
for serving indigents "more restrictive" than those applied to
Hospital A, the IRS stated that
"Revenue Ruling 56-185 is hereby modified to remove therefrom
the requirements relating to caring for patients without charge or
at rates below cost."
II
Issuance of Revenue Ruling 69-545 led to the filing of this suit
in July, 1971, in the United States District Court for the District
of Columbia, by a group of organizations and individuals. The
plaintiff organizations described themselves as an unincorporated
association [
Footnote 6] and
several nonprofit corporations [
Footnote 7] each of which included low-income persons
among its members and represented the interests of all such persons
in obtaining hospital care and services. The 12 individual
plaintiffs [
Footnote 8]
described themselves as subsisting below the poverty income levels
established by the Federal Government and suffering from medical
conditions requiring hospital services. The organizations sued on
behalf of their members, and each individual sued on his own behalf
and as representative of all other persons similarly situated.
Each of the individuals described an occasion on which he or a
member of his family had been disadvantaged in seeking needed
hospital services because of indigency. Most involved the refusal
of a hospital to admit the person because of his inability to pay a
deposit or an advance fee, even though, in some instances, the
Page 426 U. S. 33
person was enrolled in the Medicare program. At least one
plaintiff was denied emergency room treatment because of his
inability to pay immediately. And another was treated in the
emergency room, but then billed and threatened with suit, although
his indigency had been known at the time of treatment.
According to the complaint, each of the hospitals involved in
these incidents had been determined by the Secretary and the
Commissioner to be a tax-exempt charitable corporation, and each
received substantial private contributions. The Secretary and the
Commissioner were the only defendants. The complaint alleged that,
by extending tax benefits to such hospitals despite their refusals
fully to serve the indigent, the defendants were "encouraging" the
hospitals to deny services to the individual plaintiffs and to the
members and clients of the plaintiff organizations. Those persons
were alleged to be suffering
"injury in their opportunity and ability to receive hospital
services in nonprofit hospitals which receive . . . benefits . . .
as 'charitable' organizations"
under the Code. They also were alleged to be among the intended
beneficiaries of the Code sections that grant favorable tax
treatment to "charitable" organizations.
Plaintiffs made two principal claims. The first was that, in
issuing Revenue Ruling 69545, the defendants had violated the Code,
and that, in granting charitable corporation treatment to nonprofit
hospitals that refused fully to serve indigents, the defendants
continued the violation. Their theory was that the legislative
history of the Code, regulations of the IRS, and judicial precedent
had established the term "charitable" in the Code to mean "relief
of the poor," and that the challenged Ruling and current practice
of the IRS departed from that interpretation. Plaintiffs' second
claim was that the issuance of Revenue Ruling 69-545 without a
Page 426 U. S. 34
public hearing and an opportunity for submission of views had
violated the rulemaking procedures of the APA, 5 U.S.C. § 553. The
theory of this claim was that the Ruling should be considered a
"substantive" rule, as opposed to the "interpretative" type of rule
that is exempted from the requirements of § 553. [
Footnote 9] Plaintiffs sought various forms
of declaratory and injunctive relief. [
Footnote 10]
By a motion to dismiss, defendants challenged plaintiffs'
standing, suggested the nonjusticiability of the subject matter of
the suit, and asserted that, in any event, the action was barred by
the Anti-Injunction Act, [
Footnote 11] the tax limitation in the Declaratory
Judgment Act, [
Footnote 12]
and the
Page 426 U. S. 35
doctrine of sovereign immunity. The District Court denied this
motion without opinion. On subsequent cross-motions for summary
judgment, the court considered, but rejected, each of defendants'
arguments against its reaching the merits. The court then held that
Revenue Ruling 69-545 was "improperly promulgated," and "without
effect" insofar as it permitted nonprofit hospitals to qualify for
tax treatment as charities without their offering "special
financial consideration to persons unable to pay."
370 F.
Supp. 325,
338
(1973). [
Footnote 13]
The Court of Appeals for the District of Columbia Circuit
reversed. 165 U.S. App D.C. 239, 506 F.2d 1278 (1974). It agreed
with the District Court's rejection of defendants' jurisdictional
contentions, but held on the merits that Revenue Ruling 69-545 was
founded upon a permissible definition of "charitable," and was not
contrary to congressional intent in the Code. As to the plaintiffs'
APA claim, which the District Court had not reached, the Court of
Appeals held that Revenue Ruling 69-545 was an "interpretative"
ruling, and thus exempt from the APA's rulemaking requirements.
Plaintiffs sought a writ of certiorari in No. 74-1110 to review
the Court of Appeals' judgment on the merits. Defendants filed a
cross-petition in No. 74-1124 seeking review of that court's
decision on the jurisdictional issues if plaintiffs' petition
should be granted. We granted both petitions and consolidated them.
421
Page 426 U. S. 36
U.S. 975 (1975). Since we deal with defendants' contentions in
No. 74-1124 first, and find it unnecessary to reach the issues
raised by plaintiffs in No. 74-1110, we shall refer to defendants
below as petitioners, and to plaintiffs below as respondents.
III
In this Court, petitioners have argued that a policy of the IRS
to tax or not to tax certain individuals or organizations, whether
embodied in a Revenue Ruling or otherwise developed, cannot be
challenged by third parties whose own tax liabilities are not
affected. Their theory is that the entire history of this country's
revenue system, including but not limited to the evolution of the
Code, manifests a consistent congressional intent to vest exclusive
authority for the administration of the tax laws in the Secretary
and his duly authorized delegates, subject to oversight by the
appropriate committees of Congress itself. It is argued that
allowing third-party suits questioning the tax treatment accorded
other taxpayers would transfer determination of general revenue
policy away from those to whom Congress has entrusted it and vest
it in the federal courts. [
Footnote 14]
Page 426 U. S. 37
In addition; petitioners analogize the discretion vested in the
IRS with respect to administration of the tax laws to the
discretion of a public prosecutor as to when and whom to prosecute.
They thus invoke the settled doctrine that the exercise of
prosecutorial discretion cannot be challenged by one who is himself
neither prosecuted nor threatened with prosecution.
See Linda
R.S. v. Richard D., 410 U. S. 614,
410 U. S. 619
(1973). Petitioners also renew their jurisdictional contentions
that this action is barred by the Anti-Injunction Act, the
Declaratory Judgment Act, and the doctrine of sovereign
immunity.
We do not reach either the question of whether a third party
ever may challenge IRS treatment of another, or the question of
whether there is a statutory or an immunity bar to this suit. We
conclude that the District Court should have granted petitioners'
motion to dismiss on the ground that respondents' complaint failed
to establish their standing to sue. [
Footnote 15]
IV
No principle is more fundamental to the judiciary's proper role
in our system of government than the constitutional limitation of
federal court jurisdiction to actual cases or controversies.
See Flast v. Cohen, 392 U. S. 83,
392 U. S. 95
(1968). The concept of standing is part of this limitation. Unlike
other associated doctrines, for example, that which restrains
federal courts from deciding
Page 426 U. S. 38
political questions, standing "focuses on the party seeking to
get his complaint before a federal court, and not on the issues he
wishes to have adjudicated."
Id. at
392 U. S. 99. As
we reiterated last Term, the standing question, in its Art. III
aspect,
"is whether the plaintiff has 'alleged such a personal stake in
the outcome of the controversy' as to warrant
his
invocation of federal court jurisdiction and to justify exercise of
the court's remedial powers on his behalf."
Warth v. Seldin, 422 U. S. 490,
422 U. S.
498-499 (1975) (emphasis in original). In sum, when a
plaintiff's standing is brought into issue, the relevant inquiry is
whether, assuming justiciability of the claim, the plaintiff has
shown an injury to himself that is likely to be redressed by a
favorable decision. Absent such a showing, exercise of its power by
a federal court would be gratuitous, and thus inconsistent with the
Art. III limitation. [
Footnote
16]
Respondents brought this action under § 10 of the APA, 5 U.S.C.
§ 702, which gives a right to judicial review to any person
"adversely affected or aggrieved by agency action within the
meaning of a relevant statute." [
Footnote 17] In
Data Processing Service v. Camp,
397 U. S. 150
(1969), this Court held the constitutional standing requirement
under this section to be allegations which, if true, would
establish that the plaintiff had been injured in fact by
Page 426 U. S. 39
the action he sought to have reviewed. Reduction of the
threshold requirement to actual injury redressable by the court
represented a substantial broadening of access to the federal
courts over that previously thought to be the constitutional
minimum under this statute. [
Footnote 18] But, as this Court emphasized in
Sierra
Club v. Morton, 405 U. S. 727,
405 U. S. 738
(1972),
"broadening the categories of injury that may be alleged in
support of standing is a different matter from abandoning the
requirement that the party seeking review must himself have
suffered an injury."
See also United States v. Richardson, 418 U.
S. 166,
418 U. S. 194
(1974) (POWELL, J., concurring). The necessity that the plaintiff
who seeks to invoke judicial power stand to profit in some personal
interest remains an Art. III requirement. A federal court cannot
ignore this requirement without overstepping its assigned role in
our system of adjudicating only actual cases and controversies.
[
Footnote 19] It is
according to this settled principle that the allegations of both
the individual respondents and the respondent organizations must be
tested for sufficiency.
A
We note at the outset that the five respondent organizations,
which described themselves as dedicated to
Page 426 U. S. 40
promoting access of the poor to health services, could not
establish their standing simply on the basis of that goal. Our
decisions make clear that an organization's abstract concern with a
subject that could be affected by an adjudication does not
substitute for the concrete injury required by Art. III.
Sierra
Club v. Morton, supra; see Warth v Seldin, supra. Insofar as
these organizations seek standing based on their special interest
in the health problems of the poor, their complaint must fail.
Since they allege no injury to themselves as organizations, and
indeed could not, in the context of this suit, they can establish
standing only as representatives of those of their members who have
been injured in fact, and thus could have brought suit in their own
right.
Warth v. Seldin, supra at
422 U. S. 511.
The standing question in this suit therefore turns upon whether any
individual respondent has established an actual injury, [
Footnote 20] or whether the
respondent organizations have established actual injury to any of
their indigent members.
B
The obvious interest of all respondents, to which they claim
actual injury, is that of access to hospital services. In one
sense, of course, they have suffered injury to that interest. The
complaint alleges specific occasions on which each of the
individual respondents sought but was denied hospital services
solely due to his indigency, [
Footnote 21] and,
Page 426 U. S. 41
in at least some of the cases, it is clear that the needed
treatment was unavailable, as a practical matter, anywhere else.
The complaint also alleges that members of the respondent
organizations need hospital services, but live in communities in
which the private hospitals do not serve indigents. We thus assume,
for purpose of analysis, that some members have been denied
service. But injury at the hands of a hospital is insufficient, by
itself, to establish a case or controversy in the context of this
suit, for no hospital is a defendant. The only defendants are
officials of the Department of the Treasury, and the only claims of
illegal action respondents desire the courts to adjudicate are
charged to those officials.
"Although the law of standing has been greatly changed in
[recent] years, we have steadfastly adhered to the requirement
that, at least in the absence of a statute expressly conferring
standing, federal plaintiffs must allege some threatened or actual
injury resulting from the putatively illegal action before a
federal court may assume jurisdiction."
Linda R.S. v. Richard D., 410 U.S. at
410 U. S. 617.
[
Footnote 22] In other
words, the
"'case or controversy' limitation of Art. III still requires
that a federal court act only to redress injury that fairly can be
traced to the challenged action of the defendant, and not
injury
Page 426 U. S. 42
that results from the independent action of some third party not
before the court."
The complaint here alleged only that petitioners, by the
adoption of Revenue Ruling 69-545, had "encouraged" hospitals to
deny services to indigents. [
Footnote 23] The implicit corollary of this allegation is
that a grant of respondents' requested relief, resulting in a
requirement that all hospitals serve indigents as a condition to
favorable tax treatment, would "discourage" hospitals from denying
their services to respondents. But it does not follow from the
allegation and its corollary that the denial of access to hospital
services in fact results from petitioners' new Ruling, or that a
court-ordered return by petitioners to their previous policy would
result in these respondents' receiving the hospital services they
desire. It is purely speculative whether the denials of service
Page 426 U. S. 43
specified in the complaint fairly can be traced to petitioners'
"encouragement," or instead result from decisions made by the
hospitals without regard to the tax implications.
It is equally speculative whether the desired exercise of the
court's remedial powers in this suit would result in the
availability to respondents of such services. So far as the
complaint sheds light, it is just as plausible that the hospitals
to which respondents may apply for service would elect to forgo
favorable tax treatment to avoid the undetermined financial drain
of an increase in the level of uncompensated services. It is true
that the individual respondents have alleged, upon information and
belief, that the hospitals that denied them service receive
substantial donations deductible by the donors. This allegation
could support an inference that these hospitals, or some of them,
are so financially dependent upon the favorable tax treatment
afforded charitable organizations that they would admit respondents
if a court required such admission as a condition to receipt of
that treatment. But this inference is speculative, at best.
[
Footnote 24] The Solicitor
General states in his brief that, nationwide, private philanthropy
accounts for only 40% of private hospital revenues. Respondents
introduced in the District Court a statement to Congress by an
official of a hospital association describing the importance to
nonprofit hospitals of the favorable tax treatment they receive as
charitable corporations. Such conflicting evidence supports the
common sense proposition that the dependence upon special tax
benefits may vary from hospital to hospital. Thus, respondents'
allegation that
Page 426 U. S. 44
certain hospitals receive substantial charitable contributions,
without more, does not establish the further proposition that those
hospitals are dependent upon such contributions.
Prior decisions of this Court establish that unadorned
speculation will not suffice to invoke the federal judicial power.
In
Linda R.S. v. Richard D., the mother of an illegitimate
child averred that state court interpretation of a criminal child
support statute as applying only to fathers of legitimate children
violated the Equal Protection Clause of the Fourteenth Amendment.
She sought an injunction requiring the district attorney to enforce
the statute against the father of her child. We held that the
mother lacked standing, because she had "made no showing that her
failure to secure support payments results from the nonenforcement,
as to her child's father, of [the statute]." 410 U.S. at
410 U. S. 618.
The prospect that the requested prosecution in fact would result in
the payment of child support -- instead of jailing the father --
was "only speculative."
Ibid. Similarly, last Term in
Warth v. Seldin, we held that low-income persons seeking
the invalidation of a town's restrictive zoning ordinance lacked
standing because they had failed to show that the alleged injury,
inability to obtain adequate housing within their means, was fairly
attributable to the challenged ordinance instead of to other
factors. In language directly applicable to this litigation, we
there noted that plaintiffs relied
"on little more than the remote possibility, unsubstantiated by
allegations of fact, that their situation might have been better
had [defendants] acted otherwise, and might improve were the court
to afford relief."
422 U.S. at
422 U. S.
507.
The principle of
Linda R.S. and
Warth controls
this case. As stated in
Warth, that principle is that
indirectness of injury, while not necessarily fatal to
standing,
Page 426 U. S. 45
"may make it substantially more difficult to meet the minimum
requirement of Art. III: to establish that, in fact, the asserted
injury was the consequence of the defendants' actions, or that
prospective relief will remove the harm."
422 U.S. at
422 U. S. 505.
Respondents have failed to carry this burden. Speculative
inferences are necessary to connect their injury to the challenged
actions of petitioners. [
Footnote 25] Moreover, the complaint suggests no
substantial likelihood that victory in this suit would result
Page 426 U. S. 46
in respondents' receiving the hospital treatment they desire. A
federal court, properly cognizant of the Art. III limitation upon
its jurisdiction, must require more than respondents have shown
before proceeding to the merits.
Accordingly, the judgment of the Court of Appeals is vacated,
and the cause is remanded to the District Court with instructions
to dismiss the complaint.
It is so ordered.
MR. JUSTICE STEVENS took no part in the consideration or
decision of these cases.
* Together with No. 74-1110,
Eastern Kentucky Welfare Rights
Organization et al. v. Simon, Secretary of the Treasury, et
al., also on certiorari to the same court.
[
Footnote 1]
Section 501 is the linchpin of the statutory benefit system.
Subsection (a) states that organizations described in subsection
(c) "shall be exempt from taxation under this subtitle. . . ."
Among the organizations described in current subsection (c)(3) are
nonprofit corporations
"organized and operated exclusively for religious,
charitable, scientific, testing for public safety,
literary, or educational purposes, or for the prevention of cruelty
to children or animals."
(Emphasis added.) Deduction by either an individual or a
corporate taxpayer of a contribution to a nonprofit charitable
corporation is allowed by §§ 170(a), (e)(2). 26 U.S.C. §§ 170(a),
(c)(2). Other indirect benefits to such a corporation, similar in
nature to the benefit it derives from third-party deductibility of
contributions, are provided by various other sections of the Code.
See 26 U.S.C. §§ 642(e), 2055(a)(2), 2106(a)(2)(A)(ii),
2522(a)(2) and (b)(2).
[
Footnote 2]
1956-1 Cum.Bull. 202.
[
Footnote 3]
1969-2 Cum.Bull. 117. The substance of this Ruling had been
issued as a policy pronouncement approximately one month earlier.
Technical Info. Rel. 1022 (Oct. 8, 1969).
[
Footnote 4]
The descriptions fit, in whole or in part, actual hospitals as
to whose tax status either a taxpayer or an IRS field office had
requested advice. The anonymous reference to the hospitals in
Revenue Ruling 69-545 conformed to the IRS practice of deleting
"identifying details and confidential information" contained in
such requests, which are dealt with privately before the underlying
fact situation is used in a published Revenue Ruling.
See
1969-2 Cum.Bull. xxii.
[
Footnote 5]
In reaching this conclusion, the IRS cited the law of trusts for
the premise that promotion of health was a "charitable" purpose
provided only that the class of direct beneficiaries was
sufficiently large that its receipt of health services could be
said to benefit the community as a whole.
See Restatement
(Second) of Trusts §§ 368, 372 (1959); 4 A. Scott, Law of Trusts §§
368, 372 (3d ed.1967). The IRS then applied that premise to
Hospital A and concluded that, by maintaining an open emergency
room and providing hospital care to all persons able to pay, either
directly or through insurance, the hospital served a large enough
class to qualify as charitable.
[
Footnote 6]
California Welfare Rights Organization.
[
Footnote 7]
Eastern Kentucky Welfare Rights Organization; National Tenants
Organization; Association of Disabled Miners and Widows, Inc.;
Health, Education, Advisory Team, Inc.
[
Footnote 8]
One of the 12, a minor, sued by and through his parents, who
also were named plaintiffs.
[
Footnote 9]
Section 553(b) states that, "[e]xcept when notice or hearing is
required by statute, this subsection does not apply -- (A) to
interpretative rules. . . ."
Plaintiffs also claimed that issuance of Revenue Ruling 69-545
amounted to an abuse of discretion and denied them due process of
law. These claims were treated summarily or not at all by the
courts below, and plaintiffs have not pressed them in this
Court.
[
Footnote 10]
Plaintiffs requested judicial declarations that defendants had
violated the Code and the APA, and that a hospital's charitable
status required provision of full services to persons unable to pay
and those on Medicaid. In addition, they sought to enjoin
defendants to suspend charitable organization treatment of, and to
refrain from extending such treatment to, any hospital that failed
to submit proof, on forms to be approved by the District Court,
that it served indigents and those on Medicaid without either
requiring advance deposits or attempting to collect, once service
had been rendered. Plaintiffs also asked the District Court to
order collection of all taxes "due and owing" because of the
allegedly "illegal" extension of charitable status to hospitals
that refused to serve indigents.
[
Footnote 11]
"[N]o suit for the purpose of restraining the assessment or
collection of any tax shall be maintained in any court by any
person, whether or not such person is the person against whom such
tax was assessed."
26 U.S.C. § 7421(a).
[
Footnote 12]
"In a case of actual controversy within its jurisdiction,
except with respect to Federal taxes, any court of the
United States, upon the filing of an appropriate pleading, may
declare the rights and other legal relations of any interested
party seeking such declaration, whether or not further relief is or
could be sought."
28 U.S.C. §2201 (emphasis added).
[
Footnote 13]
The court entered a declaratory judgment to that effect and
enjoined defendants from extending tax-exempt status to a nonprofit
hospital, or allowing deductions for contributions to it, until the
hospital had satisfied the requirements of previous Revenue Ruling
5185 regarding service to indigents and had posted in its public
areas a court-approved notice reciting those requirements.
[
Footnote 14]
Petitioners rely in part upon this Court's decision in
Louisiana v. McAdoo, 234 U. S. 627
(1914), as precedent for their position. In that case, the State of
Louisiana, as a producer of sugar, brought suit challenging the
tariff rates applied by the Secretary of the Treasury to sugar
imported from Cuba. This Court ordered the suit dismissed.
Petitioners rely particularly upon statements in the opinion that
maintenance of such actions "would operate to disturb the whole
revenue system of the Government," and that "[i]nterference [by the
courts] in such a case would be to interfere with the ordinary
functions of government."
Id. at
234 U. S. 632,
234 U. S. 633.
I n view of our disposition, we express no opinion on the
application of
McAdoo to this kind of case.
[
Footnote 15]
As noted
supra at
426 U. S. 34-35,
the District Court considered petitioners' jurisdictional
arguments, including their challenge to respondents' standing, when
it ruled on cross-motions for summary judgment. The affidavits
submitted by respondents merely supported the allegations of the
complaint relative to establishing standing, rather than going
beyond them. Thus, the standing analysis is no different, as a
result of the case having proceeded to summary judgment, than it
would have been at the pleading stage.
Cf. Warth v.
Seldin, 422 U. S. 490,
422 U. S.
501-502 (1975).
[
Footnote 16]
This Court often has noted that the focus upon the plaintiff's
stake in the outcome of the issue he seeks to have adjudicated
serves a separate and equally important function bearing upon the
nature of the judicial process. As stated in
Baker v.
Carr, 369 U. S. 186,
369 U. S. 204
(1962), a significant personal stake serves
"to assure that concrete adverseness which sharpens the
presentation of issues upon which the court so largely depends for
illumination of difficult . . . questions."
[
Footnote 17]
"A person suffering legal wrong because of agency action, or
adversely affected or aggrieved by agency action within the meaning
of a relevant statute, is entitled to judicial review thereof."
5 U.S.C. § 702.
[
Footnote 18]
The previous view can be found in
Kansas City Power Light
Co. v. McKay, 96 U.S.App.D.C. 273, 281, 225 F.2d 924, 932
(1955).
See Sierra Club v. Morton, 405 U.
S. 727,
405 U. S. 733
(1972).
[
Footnote 19]
The Data Processing decision established a second,
nonconstitutional standing requirement that the interest of the
plaintiff, regardless of its nature in the absolute, at least be
"arguably within the zone of interests to be protected or
regulated" by the statutory framework within which his claim
arises.
See 397 U.S. at
397 U. S. 153.
As noted earlier, respondents in this case claim that they, and of
course their particular interests involved in this suit, are the
intended beneficiaries of the charitable organization provisions of
the Code. In view of our disposition of this case, we need not
consider this "zone of interests" test.
[
Footnote 20]
The individual respondents sought to maintain this suit as a
class action on behalf of all persons similarly situated. That a
suit may be a class action, however, adds nothing to the question
of standing, for even named plaintiffs who represent a class
"must allege and show that they personally have been injured,
not that injury has been suffered by other, unidentified members of
the class to which they belong and which they purport to
represent."
Warth v. Seldin, 422 U.S. at
422 U. S.
502.
[
Footnote 21]
One of the individual respondents complains not that he was
denied service, but that he was treated and then billed despite the
hospital's knowledge of his indigency. This variation of the injury
does not change the standing analysis.
[
Footnote 22]
The reference in
Linda R. S. to "a statute expressly
conferring standing" was in recognition of Congress' power to
create new interests the invasion of which will confer standing.
See 410 U.S. at
410 U. S. 617
n. 3;
Trafficante v. Metropolitan Life Ins. Co.,
409 U. S. 205
(1972). When Congress has so acted, the requirements of Art. III
remain:
"[T]he plaintiff still must allege a distinct and palpable
injury to himself, even if it is an injury shared by a large class
of other possible litigants."
Warth v. Seldin, supra at
422 U. S. 501.
See also United States v. SCRAP, 412 U.
S. 669 (1973);
cf. Sierra Club v. Morton, supra
at
405 U. S. 732
n. 3.
[
Footnote 23]
The Court of Appeals, in sustaining Revenue Ruling 69-545 on the
merits, relied in part upon its conclusion that the new IRS policy,
which apparently requires a hospital to provide free emergency care
to indigents, may result in as much or more relief to the poor than
the policy of the previous Ruling. Much of respondents' argument,
and that of several of the
amici, have been directed
against that conclusion. As we do not reach the merits, we need not
consider this question. But we accept for purposes of the standing
inquiry respondents' averment that the IRS's new policy encourages
a hospital to provide fewer services to indigents than it might
have under the previous policy.
We do note, however, that it is entirely speculative whether
even the earlier Ruling would have assured the medical care they
desire. It required a hospital to provide care for the indigent
only "to the extent of its financial ability," and stated that a
low charity record was not conclusive that a hospital had failed to
meet that duty.
See supra at
426 U. S. 30.
Thus, a hospital could not maintain, consistently with Revenue
Ruling 56-185, a general policy of refusing care to all patients
unable to pay. But the number of such patients accepted, and
whether any particular applicant would be admitted, would depend
upon the financial ability of the hospital to which admittance was
sought.
[
Footnote 24]
The complaint reveals nothing at all about the dependence upon
charitable contributions of any hospitals that might have denied
services to members of respondent organizations.
See supra
at
426 U. S.
40-41.
[
Footnote 25]
The courts below erroneously believed that
United States v.
SCRAP supported respondents' standing. In
SCRAP,
although the injury was indirect and "the Court was asked to follow
[an] attenuated line of causation," 412 U.S. at
412 U. S. 688,
the complaint nevertheless "alleged a specific and perceptible
harm" flowing from the agency action.
Id. at
412 U. S. 689.
Such a complaint withstood a motion to dismiss, although it might
not have survived challenge on a motion for summary judgment.
Id. at
412 U. S. 689,
and n. 15. But, in this case, the complaint is insufficient even to
survive a motion to dismiss, for it fails to allege an injury that
fairly can be traced to petitioners' challenged action.
See
supra at
426 U. S. 40-43.
Nor did the affidavits before the District Court at the summary
judgment stage supply the missing link.
Our decision is also consistent with
Data Processing Service
v. Camp, 397 U. S. 150
(1969). The Court there stated: "The first question is whether the
plaintiff alleges that the challenged action has caused him injury
in fact, economic or otherwise."
Id. at
397 U. S. 152.
The complaint in
Data Processing alleged injury that was
directly traceable to the action of the defendant federal official,
for it complained of injurious competition that would have been
illegal without that action.
Accord, Arnold Tours, Inc. v.
Camp, 400 U. S. 45
(1970);
Investment Co. Institute v. Camp, 401 U.
S. 617,
401 U. S.
620-621 (1971). Similarly, the complaint in
Data
Processing's companion case of
Barlow v. Collins,
397 U. S. 159
(1970), was sufficient because it alleged extortionate demands by
plaintiffs' landlord made possible only by the challenged action of
the defendant federal official.
See id. at
397 U. S.
162-163. In the instant case, respondents' injuries
might have occurred even in the absence of the IRS Ruling that they
challenge; whether the injuries fairly can be traced to that Ruling
depends upon unalleged and unknown facts about the relevant
hospitals.
MR. JUSTICE STEWART, concurring.
I join the opinion of the Court holding that the plaintiffs in
this case did not have standing to sue. I add only that I cannot
now imagine a case, at least outside the First Amendment area,
where a person whose own tax liability was not affected ever could
have standing to litigate the federal tax liability of someone
else.
MR. JUSTICE BRENNAN, with whom MR. JUSTICE MARSHALL joins,
concurring in the judgment.
I agree that, in this litigation as it is presently postured,
respondents (herein used to refer to plaintiffs below) have not met
their burden of establishing a concrete and reviewable controversy
between themselves and the Government with respect to the disputed
Revenue Ruling. That is, however, the full extent of my agreement
with the Court in this case. I must dissent from the Court's
reasoning on the standing issue, reasoning that is unjustifiable
under any proper theory of standing and clearly contrary to the
relevant precedents. The Court's further obfuscation of the law of
standing is particularly unnecessary when there are obvious and
reasonable alternative grounds upon which to decide this
litigation.
Page 426 U. S. 47
I
Respondents brought this action for declaratory and injunctive
relief, seeking,
inter alia, a declaration that Revenue
Ruling 69-545 is inconsistent with the relevant provisions of the
Internal Revenue Code and promulgated in violation of the
rulemaking provisions of the Administrative Procedure Act, 5 U.S.C.
§ 553. Respondents claimed to be indigents, to be in need of free
or below-cost medical care provided by private, nonprofit hospitals
accorded tax-exempt status under the Internal Revenue Code, and to
be protected by and beneficiaries of the provisions of the Code
providing for tax-exempt status for nonprofit organizations
engaging in "charitable" activities. Respondents alleged that they
had, in specified instances, been denied provision of free or
below-cost medical services by nonprofit hospitals accorded
tax-exempt status under the Code, and that, by issuing the disputed
Revenue Ruling, the Internal Revenue Service was "encouraging"
tax-exempt hospitals to deny them such services. Accordingly,
respondents alleged, the IRS was injuring them in their
"opportunity and ability" to receive medical services, and doing so
illegally, in derogation of the results intended by the
"charitable" provisions of the Code.
However, as noted by the Court, the disputed Ruling, on its
face, applies only to a narrow category of nonprofit hospitals --
those fairly characterized by the factual and legal circumstances
described in the Ruling as pertaining to "Hospital A." The Ruling
does not indicate what treatment will be accorded hospitals not
within the situation described in the hypothesis. [
Footnote 2/1] The most hotly
Page 426 U. S. 48
contested portion of the disputed ruling, that modifying the
earlier Revenue Ruling 56-185 by "remov[ing] therefrom the
requirements relating to caring for patients
Page 426 U. S. 49
without charge or at rates below cost," is, at best, ambiguous
regarding its application or effect respecting nonprofit hospitals
not within the factual and legal situation
Page 426 U. S. 50
of Hospital A. Accordingly, there is simply no ripe controversy
with respect to a claim that the disputed ruling illegally
"encourages" all nonprofit hospitals to withdraw the provision of
indigent services by removing from all hospitals the requirement of
such services as a prerequisite to tax-exempt status.
This was the position of the Secretary of the Treasury and the
Commissioner of Internal Revenue with respect to the disputed
Ruling at oral argument, [
Footnote
2/2] and no representation
Page 426 U. S. 51
to the contrary appears in the record. Moreover, no facts were
alleged or introduced in the District Court that in any way
indicated with more specificity that the disputed Ruling had or was
intended to have application to all nonprofit hospitals.
Respondents apparently made no attempt to clarify the meaning of
the Ruling in this regard, as, for example, by filing with the IRS
a petition for clarification of the Ruling pursuant to the
Administrative Procedure Act, 5 U.S.C. § 555(e),
see, e.g.,
Dunlop v. Bachowski, 421 U. S. 560,
421 U. S. 573
(1975), or by petitioning for a revision of the Ruling pursuant to
that Act, 5 U.S.C. § 553(e),
cf. Oljato Chapter of Navajo Tribe
v. Train, 169 U.S.App.D.C.195, 207, 515 F.2d 654, 666-667
(1975), or by seeking clarification by means of discovery or an
informal request. Accordingly, with respect to any claim that the
Ruling illegally withdraws the requirement of the provision of
indigent services from all hospitals seeking tax-exempt status
under the "charitable" provisions of the Code, a
"lack of ripeness inhere[s] in the fact that the need for some
further procedure, some further contingency of application
Page 426 U. S. 52
or interpretation . . . serve[s] to make remote the issue which
was sought to be presented to the Court."
Poe v. Ullman, 367 U. S. 497,
367 U. S. 528
(1961) (Harlan, J., dissenting).
Cf. Toilet Goods Assn. v.
Gardner, 387 U. S. 158,
387 U. S.
163-164 (1967). [
Footnote
2/3]
"It is clear beyond question . . . that [the disputed Ruling],
on [its] face, raise[s] questions which should not be adjudicated
in the abstract and in the general, but which require a 'concrete
setting' for determination."
Gardner v. Toilet Goods Assn., 387 U.
S. 167,
387 U. S. 197
(1967) (opinion of Fortas, J.).
Further, if respondents wished to challenge the legality of the
Ruling in respect to the unambiguous aspects of its application --
its application to hospitals fairly coming within the situation
described as pertaining to Hospital A -- it was incumbent upon them
to allege, and, at the appropriate stage of the litigation, to
offer evidence to show that the hospitals whose conduct affected
them were hospitals whose operations could fairly be characterized
as implicated by the terms of the Ruling. Such allegations and
showings were necessary to demonstrate some logical connection or
nexus between the wrongful action alleged, the issuance of the
disputed Ruling, and the harm of which respondents complain, injury
to their "opportunity and ability" to secure medical services. This
is required, of course, by the only constitutional, "case or
controversy," policy affecting the law of standing -- to ensure
that the party seeking relief has
"alleged such a personal stake in the outcome of the controversy
as to assure that concrete adverseness which sharpens the
presentation of issues upon which the [C]ourt so largely
Page 426 U. S. 53
depends for illumination of difficult . . . questions."
Baker v. Carr, 369 U. S. 186,
369 U. S. 204
(1962).
The allegations of the complaint are probably sufficient to
state this claim with respect to certain of the respondents.
[
Footnote 2/4] In any event,
however, the petitioners (used herein to refer to defendants below)
later moved for summary judgment on the standing issue,
specifically arguing that
"[t]he plaintiffs have failed to demonstrate that the alleged
injuries complained of herein were incurred as a result of any
actions on the part of the defendants."
App. 154. At this point in the litigation, it was clearly
incumbent upon the respondents to make a showing sufficient to
create a material issue of fact whether there was any connection
between the hospitals affecting them and the Ruling alleged to be
illegally "encouraging" tax-exempt hospitals to withdraw the
provision of indigents' services, thereby injuring respondents'
"opportunity and ability" for such services.
Page 426 U. S. 54
See Barlow v. Collins, 397 U.
S. 159,
397 U. S. 175,
and n. 10 (1970) (opinion of BRENNAN, J.). [
Footnote 2/5] No such showing was made. There is
absolutely no indication in the record that the contested Ruling
altered the operation of these hospitals in any way, or that the
tax-exempt status of these hospitals was in any way related to the
Ruling. Accordingly, the petitioners were entitled to judgment in
their favor on their motion for summary judgment.
II
The Court today, however, wholly ignores the foregoing aspects
of this case. Rather, it assumes that the governmental action
complained of
is encouraging the hospitals affecting
respondents to provide fewer medical services to indigents.
Ante at
426 U. S. 42,
and n. 23. This is done in order to make the gratuitous and
erroneous point that respondents, as a prerequisite to pursuing any
legal claims regarding the Revenue Ruling, must allege and later
prove that the hospitals affecting respondents
Page 426 U. S. 55
"are dependent upon" their tax-exempt status,
ante at
426 U. S. 44,
that they would not, in the absence of the Ruling's assumed
"encouragement," "elect to forgo favorable tax treatment," and that
the absence of the allegedly illegal inducement would "result in
the availability to respondents of such services,"
ante at
426 U. S. 43. In
reaching this conclusion, the Court abjures analysis either of the
Art. III policies heretofore assumed to inhere in the
constitutional dimension of the standing doctrine, or of the
relevant precedents of this Court. [
Footnote 2/6]
A
First, the Court's treatment of the injury-in-fact standing
requirement is simply unsupportable in the context of this case.
The wrong of which respondents complain is that the disputed Ruling
gives erroneous economic signals to nonprofit hospitals whose
subsequent responses affect respondents; they claim the IRS is
offering the economic inducement of tax-exempt status to such
hospitals under terms illegal under the Internal
Page 426 U. S. 56
Revenue Code. Respondents' claim is not, and by its very nature
could not be, that they have been and will be illegally denied the
provision of indigent medical services by the hospitals. Rather, if
respondents have a claim cognizable under the law, it is that the
Internal Revenue Code requires the Government to offer economic
inducements to the relevant hospitals only under conditions which
are likely to benefit respondents. The relevant injury in light of
this claim is, then, injury to this beneficial interest -- as
respondents alleged, injury to their "opportunity and ability" to
receive medical services. Respondents sufficiently alleged this
injury, and if, as the Court so readily assumes, they had made a
showing sufficient to create an issue of material fact that the
Government was injuring this interest, they would continue to
possess standing to press the claim on the merits.
Clearly such conditions, if met, would provide the essence of
the only constitutionally mandated element of standing -- a
personal stake sufficient to create concrete adverseness meeting
minimal conditions for Art. III justiciability.
Baker v.
Carr, 369 U.S. at
369 U. S. 204;
Barlow v. Collins, supra at
397 U. S. 164.
See also United States v. Richardson, 418 U.
S. 166,
418 U. S. 196
n. 18 (1974) (POWELL, J., concurring). Nothing in the logic or
policy of constitutionally required standing is added by the
further injury-in-fact dimension required by the Court today --
that respondents allege that the hospitals affecting them would not
have elected to forgo the favorable tax treatment, and that this
would "result in the availability to respondents of" free or
below-cost medical services.
Furthermore, the injury of which respondents complain is of a
continuing and continuous nature, and the additional allegations
and showings that the Court requires would not be determinative of
the hospitals' future conduct. Even if a given hospital affecting
respondents had in the past made its determination regarding
indigent
Page 426 U. S. 57
services without regard to the tax consequences of that
determination -- would have elected to forgo favorable tax
treatment in the absence of the allegedly illegal "encouragement"
-- such a choice presumably would be subject to continuous
reevaluation in the future, as the hospital's circumstances, the
economic climate, and expectations regarding donor contributions
changed over time. Respondents complain of and seek relief from the
threat of future policy determinations by the hospitals based on
the allegedly illegal tax Ruling, not redress for past
"encouragement." We have often found standing in plaintiffs to
complain of such future harm irrespective of any showing of the
realization of such threatened injuries in the past.
E.g., Doe
v. Bolton, 410 U. S. 179,
410 U. S. 188
(1973);
Epperson v. Arkansas, 393 U. S.
97,
393 U. S.
101-102 (1968).
Indeed, to the extent that there is Art. III substance to the
concerns addressed by the Court today, it is not a question of
standing -- of identifying the proper party to bring the
action -- but rather whether the threat of the more ultimate future
harm is of sufficient immediacy to meet the minimum requirements of
Art. III justiciability. The task is one of distinguishing between
a "justiciable controversy" and a "difference or dispute of a
hypothetical or abstract character,"
Aetna Life Ins. Co. v.
Haworth, 300 U. S. 227,
300 U. S. 240
(1937), and the question is "necessarily one of degree."
Maryland Cas. Co. v. Pacific Coal & Oil Co.,
312 U. S. 270,
312 U. S. 273
(1941);
Golden v. Zwickler, 394 U.
S. 103,
394 U. S. 108
(1969).
"[I]t would be difficult, if it would be possible, to fashion a
precise test for determining in every case whether there is such a
controversy. Basically, the question in each case is whether the
facts alleged, under all the circumstances, show that there is a
substantial controversy, between parties having adverse legal
interests, of sufficient immediacy and reality
Page 426 U. S. 68
to warrant the issuance of a declaratory judgment."
Ibid. If, as the Court assumes, respondents had
demonstrated that the disputed Ruling had application to the
hospitals affecting them, I would have no doubt that this standard
had been met. In such a case, I would readily conclude:
"[T]he challenged governmental activity . . . is not contingent,
. . . and, by its continuing and brooding presence, casts what may
well be a substantial adverse effect on the interests of the
[responding] parties."
"
* * * *"
"Where such state action or its imminence adversely affects the
status of private parties, the courts should be available to render
appropriate relief and judgments affecting the parties' rights and
interests."
Super Tire Engineering Co. v. McCorkle, 416 U.
S. 115,
416 U. S. 122,
416 U. S. 125
(1974).
B
Second, the Court's treatment of the injury-in-fact requirement
directly conflicts with past decisions. Respondents brought this
action seeking general statutory review of administrative action
under the provisions of the Administrative Procedure Act. Hence,
the governing precedents respecting standing are those developed in
Data Processing Service v. Camp, 397 U.
S. 150 (1970);
Barlow v. Collins, 397 U.
S. 159 (1970);
Sierra Club v. Morton,
405 U. S. 727
(1972); and
United States v. SCRAP, 412 U.
S. 669 (1973).
See also Harding v. Kentucky
Utilities Co., 390 U. S. 1 (1968).
Any prudential, nonconstitutional considerations that underlay the
Court's disposition of the injury-in-fact standing requirement in
cases such as
Linda R.S. v. Richard
D., 410
Page 426 U. S. 59
U.S. 614 (1973), [
Footnote 2/7]
and
Warth v. Seldin, 422 U. S. 490
(1975), are simply inapposite when review is sought under a
congressionally enacted statute conferring standing and providing
for judicial review. [
Footnote 2/8]
In such a case, considerations respecting "the allocation of power
at the national level [and] a shift away from a democratic form of
government,"
United States v. Richardson, 418 U.S. at
418 U. S. 188
(POWELL, J., concurring), are largely ameliorated, and such
prudential limitations as remain are supposedly
Page 426 U. S. 60
subsumed under the "zone of interests" test developed in
Data Processing Service v. Camp, supra. [
Footnote 2/9]
See United States v. Richardson,
supra at
418 U. S. 196
n. 18 (POWELL, J., concurring).
Our previous decisions concerning standing to sue under the
Administrative Procedure Act conclusively show that the injury in
fact demanded is the constitutional minimum identified in
Baker
v. Carr, 369 U.S. at
369 U. S. 204
-- the allegation of such a "personal stake in the outcome of the
controversy as to assure" concrete adverseness.
Sierra Club v.
Morton, supra at
405 U. S.
732-733;
Data Processing Service v. Camp, supra
at
397 U. S.
151-152 . True, the Court has required that the person
seeking review allege that he personally has suffered or will
suffer the injury sought to be avoided,
Sierra Club, supra
at
405 U. S. 740.
But there can be no doubt that respondents here, by demonstrating a
connection between the disputed Ruling and the hospitals affecting
them, could have adequately served the policy implicated by the
pleading requirement of
Sierra Club -- putting "the
decision as to whether review will be sought in the hands of those
who have a direct stake in the outcome."
Ibid. In such a
case, respondents would not be attempting merely to "vindicate
their own value preferences through the judicial process."
Ibid. See Albert,
supra, 426 U.S.
26fn2/8|>n. 8, at 485-489. If such a showing were made, a
real and recognizable harm to tangible interest would have been
alleged, indeed more so than we have required in other
circumstances.
United States v. SCRAP, supra; Sierra Club v.
Morton., supra;
Page 426 U. S. 61
cf. Barlow v. Collins, supra at
397 U. S. 163.
[
Footnote 2/10] Moreover, the
injury alleged would be a "
distinctive or discriminating' . . .
harm," id. at 397 U. S. 172
n. 5 (opinion of BRENNAN, J.), clearly a "particularized injury
[setting respondents] apart from the man on the street." United
States v. Richardson, supra at 418 U. S. 194
(POWELL, J., concurring).
Furthermore, our decisions regarding standing to sue in actions
brought under the Administrative Procedure Act make plain that
standing is not to be denied merely because the ultimate harm
alleged is a threatened future one rather than an accomplished
fact.
United States v. SCRAP, supra; Sierra Club v. Morton,
supra. Nor has the fact that the administrative action
ultimately
Page 426 U. S. 62
affects the complaining party only through responses to
incentives by third parties been fatal to the standing of those who
would challenge that action.
United States v. SCRAP, supra;
Barlow v. Collins, supra. And the ultimate harm to respondents
threatened here is obviously much more "direct and perceptible,"
and the "line of causation" less "attenuated," than that found
sufficient for standing in
United States v. SCRAP, 412
U.S. at
412 U. S.
688.
Certainly the Court's attempted distinction of
SCRAP
will not "wash." The Court states that, in
SCRAP,
"although the injury was indirect and 'the Court was asked to
follow an attenuated line of causation,' . . . the complaint
nevertheless 'alleged a specific and perceptible harm' flowing from
the agency action."
Ante at
426 U. S. 45 n.
25. The instant case is different, the Court says, because the
complaint "fails to allege an injury that fairly can be traced" to
the allegedly wrongful action. I find it simply impossible fairly
and meaningfully to differentiate between the allegations of the
two sets of pleadings.
Compare App. 13-25 in this case
with App. 8-12 in No. 72-562, O.T. 1972,
Aberdeen
& Rockfish R. Co. v. SCRAP. The Court complains that
"whether the injuries fairly can be traced to [the disputed] Ruling
depends upon unalleged and unknown facts about the relevant
hospitals."
Ante at
426 U. S. 45 n.
25. It is obvious that the complaint in
SCRAP lacked
precisely the same specific factual allegations; there, however,
the Court's response was much more in keeping with modern notions
of civil procedure. 412 U.S. at
412 U. S.
689-690, and n. 15.
Moreover, apart from the specificity required of the pleadings,
it is not apparent why these "unalleged and unknown facts about the
relevant hospitals" are required to establish injury in fact at
all. As the Court notes,
ante at
426 U. S. 42 n.
23, the earlier Revenue Ruling requires a hospital only to provide
medical care "to the extent
Page 426 U. S. 63
of its financial ability," and stated that a low charitable
record was not conclusive on the point. Accordingly, in the absence
of some showing to the contrary by the petitioners, it readily can
be inferred that a hospital under the earlier Ruling would provide
some indigent services, the maximum extent being the point at which
the benefits received from the favorable tax status were exactly
offset by the cost of the services conferred. If respondents had
demonstrated at the summary judgment stage a connection between the
disputed Ruling withdrawing this incentive and the hospitals
affecting them, they would have certainly made a showing of injury
to their "opportunity and ability" to receive medical care
sufficient under
SCRAP for standing to challenge the
governmental action.
We may properly wonder where the Court, armed with its "fatally
speculative pleadings" tool, will strike next. To pick only the
most obvious examples, will minority schoolchildren now have to
plead and show that, in the absence of illegal governmental
"encouragement" of private segregated schools, such schools would
not "elect to forgo" their favorable tax treatment, and that this
will "result in the availability" to complainants of an integrated
educational system?
See Green v. Kennedy, 309 F.
Supp. 1127 (DC 1970),
later decision reported sub nom.
Green v. Connally, 330 F.
Supp. 1150,
summarily aff'd sub nom. Coit v. Green,
404 U.S. 997 (1971). [
Footnote
2/11] Or will black Americans be required to plead and show
that, in the absence of illegal governmental encouragement, private
institutions would not "elect to
Page 426 U. S. 64
forgo" favorable tax treatment, and that this will "result in
the availability" to complainants of services previously denied?
See McGlotten v. Connally, 338 F.
Supp. 448 (DC 1972);
Pitts v. Wisconsin Dept. of
Revenue, 333 F.
Supp. 662 (ED Wis.1971). As perusal of these reported decisions
reveals, the lower courts have not assumed that such allegations
and proofs were somehow required by Art. III.
C
Of course, the most disturbing aspect of today's opinion is the
Court's insistence on resting its decision' regarding standing
squarely on the irreducible Art. III minimum of injury in fact,
thereby effectively placing its holding beyond congressional power
to rectify. Thus, any time Congress chooses to legislate in favor
of certain interests by setting up a scheme of incentives for third
parties, judicial review of administrative action that allegedly
frustrates the congressionally intended objective will be denied,
because any complainant will be required to make an almost
impossible showing. Clearly the Legislative Branch of the
Government cannot supply injured individuals with the means to make
the factual showing in a specific context that the Court today
requires. More specific indications of a congressional desire to
confer standing upon such individuals would be germane not to the
Art. III injury-in-fact requirement, but only to the Court's "zone
of interests" test for standing, that branch of standing lore which
the Court assiduously avoids reaching.
Ante at
426 U. S. 39
n.19. [
Footnote 2/12]
Page 426 U. S. 65
In our modern-day society, dominated by complex legislative
programs and large-scale governmental involvement in the everyday
lives of all of us, judicial review of administrative action is
essential both for protection of individuals illegally harmed by
that action,
Flast v. Cohen, 392 U. S.
83,
392 U. S. 111
(1968) (Douglas, J., concurring), and to ensure that the attainment
of congressionally mandated goals is not frustrated by illegal
action,
Barlow v. Collins, 397 U.S. at
397 U. S.
173-175, and n. 9 (opinion of BRENNAN, J.).
See
Albert, 83 Yale L.J.,
supra, 426 U.S.
26fn2/8|>n. 8, at 451-456. In dissenting from the Court's
earlier creation of the "zone of interests" test applicable to
standing for review under the Administrative Procedure Act, an
inquiry that confuses standing with aspects of reviewability and
the merits, I said:
"[I]n my view, alleged injury in fact, reviewability, and the
merits pose questions that are largely distinct from one another,
each governed by its own considerations. To fail to isolate and
treat each inquiry independently of the other two, so far as
possible, is to risk obscuring what is at issue in a given case,
and thus to risk uninformed, poorly reasoned decisions that may
result in injustice. Too often these various questions have been
merged into one confused inquiry, lumped under the general rubric
of 'standing.' The books are full of opinions that dismiss a
plaintiff for lack of 'standing' when dismissal, if proper at all,
actually rested either upon the plaintiff's failure to prove on the
merits the existence of the legally protected interest that he
claimed or on his failure to prove that the challenged agency
action
Page 426 U. S. 66
was reviewable at his instance."
Barlow v. Collins, supra at
397 U. S. 176.
[
Footnote 2/13]
Today, however, the Court achieves an even worse result through
its manipulation of injury in fact, stretching that conception far
beyond the narrow bounds within which it usefully measures a
dimension of Art III justiciability. The Court's treatment of
injury in fact without any "particularization" in light of either
the policies properly implicated or our relevant precedents
threatens that it shall "become a catchall for an unarticulated
discretion on the part of this Court" to insist that the federal
courts "decline to adjudicate" claims that it prefers they not
hear.
Poe v. Ullman, 367 U.S. at
367 U. S. 530
(Harlan, J., dissenting).
[
Footnote 2/1]
Revenue Ruling 69-545, 1969-2 Cum.Bull. 117, provides in
pertinent part:
"Advice has been requested whether the two nonprofit hospitals
described below qualify for exemption from Federal income tax under
section 501(c)(3) of the Internal Revenue Code of 1954. . . . "
"
Situation 1. Hospital A is a 250-bed community
hospital. Its board of trustees is composed of prominent citizens
in the community. Medical staff privileges in the hospital are
available to all qualified physicians in the area, consistent with
the size and nature of its facilities. The hospital has 150 doctors
on its active staff and 200 doctors on its courtesy staff. It also
owns a medical office building on its premises with space for 60
doctors. Any member of its active medical staff has the privilege
of leasing available office space. Rents are set at rates
comparable to those of other commercial buildings in the area."
"The hospital operates a full-time emergency room, and no one
requiring emergency care is denied treatment. The hospital
otherwise ordinarily limits admissions to those who can pay the
cost of their hospitalization, either themselves, or through
private health insurance, or with the aid of public programs such
as Medicare. Patients who cannot meet the financial requirements
for admission are ordinarily referred to another hospital in the
community that does serve indigent patients."
"The hospital usually ends each year with an excess of operating
receipts over operating disbursements from its hospital operations.
Excess funds are generally applied to expansion and replacement of
existing facilities and equipment, amortization of indebtedness,
improvement in patient care, and medical training, education, and
research."
"
* * * *"
"To qualify for exemption from Federal income tax under section
501(c)(3) of the Code, a nonprofit hospital must be organized and
operated exclusively in furtherance of some purpose considered
'charitable' in the generally accepted legal sense of that term,
and the hospital may not be operated, directly or indirectly, for
the benefit of private interests."
"In the general law of charity, the promotion of health is
considered to be a charitable purpose.
Restatement
(Second), Trusts, sec. 368 and sec. 372; IV Scott on Trusts
(3rd ed.1967), sec. 368 and sec. 372. A nonprofit organization
whose purpose and activity are providing hospital care is promoting
health and may, therefore, qualify as organized and operated in
furtherance of a charitable purpose. If it meets the other
requirements of section 501(c)(3) of the Code, it will qualify for
exemption from Federal income tax under section 501(a)."
"Since the purpose and activity of Hospital A, apart from its
related educational and research activities and purposes, are
providing hospital care on a nonprofit basis for members of its
community, it is organized and operated in furtherance of a purpose
considered 'charitable' in the generally accepted legal sense of
that term. The promotion of health, like the relief of poverty and
the advancement of education and religion, is one of the purposes
in the general law of charity that is deemed beneficial to the
community as a whole even though the class of beneficiaries
eligible to receive a direct benefit from its activities does not
include all members of the community, such as indigent members of
the community, provided that the class is not so small that its
relief is not of benefit to the community.
Restatement
(Second), Trusts, sec. 368, comment (b) and sec. 372, comments
(b) and (c); IV Scott on Trusts (3rd ed.1967), sec. 368 and sec.
372.2. By operating an emergency room open to all persons, and by
providing hospital care for all those persons in the community able
to pay the cost thereof either directly or through third party
reimbursement, Hospital A is promoting the health of a class of
persons that is broad enough to benefit the community."
"The fact that Hospital A operates at an annual surplus of
receipts over disbursements does not preclude its exemptions. By
using its surplus funds to improve the quality of patient care,
expand its facilities, and advance its medical training, education,
and research programs, the hospital is operating in furtherance of
its exempt purposes."
"
* * * *"
"Accordingly, it is held that Hospital A is exempt from Federal
income tax under section 501(c)(3) of the Code."
"
* * * *"
"Even though an organization considers itself within the scope
of Situation 1 of this Revenue Ruling, it must file an application
on Form 1023, Exemption Application, in order to be recognized by
the Service as exempt under section 501(c)(3) of the Code."
"Revenue Ruling 56-185, C.B.1956-1, 202 sets forth requirements
for exemption of hospitals under section 501(c)(3) more restrictive
than those contained in this Revenue Ruling with respect to caring
for patients without charge or at rates below cost. . . ."
"Revenue Ruling 5185 is hereby modified to remove therefrom the
requirements relating to caring for patients without charge or at
rates below cost."
[
Footnote 2/2]
E.g.,
"Now, this ruling itself demonstrates the hypothetical quality
of what the plaintiffs are seeking, the hypothetical quality of the
relief they are seeking, because, as the Court can readily see in
[perusing] this Revenue Ruling, it sets forth two polar situations,
situation 1 and situation 2, dealing with two hospitals, Hospital A
and Hospital B. In Hospital A, there are a variety of facts in
connection with Hospital A, it has an open board of trustees, it
gives open staff privileges, it is involved in research and
educational activities, it maintains a full-time emergency room,
and no one requiring emergency care is denied treatment. To the
contrary, [H]ospital B is almost proprietary in nature, it's owned
by a small group of doctors, they limit the staff privileges to
people they know, and they comprise the medical committee generally
to keep out qualified physicians, et cetera, et cetera, and it
maintains an emergency room, but basically to treat the patients of
its own doctors."
"Now, these two polar examples were designed to educate the
public generally and hospital administrators as to clear-cut
situations. Hospital A is a situation, if you are like Hospital A,
you will be fairly certain of exemption, but, of course, the ruling
does conclude that you can't be certain of that itself. You have
got to yourself submit an application for exemption to the Internal
Revenue Service."
"If you are like [H]ospital B, which is a polar example of a
hospital that doesn't seem to provide any community benefit, it
seems to be run pretty much strictly for the private inurement of
its owner-doctors. In that situation, you are not going to get a
tax-exempt status."
"Now, the important thing which we emphasize is that the ruling
doesn't even begin to attempt to deal with the hundreds of
gradations in between Hospital A and Hospital B. Hospital A,
assuming for a moment that it doesn't give free care to indigents
on a broad scale, let's say it dropped its emergency room
completely for, let's say, the particular example that it might be
engaged in treating cancer patients or a particular kind of
disease. Under those circumstances, an emergency room would be
superfluous, because such a hospital would rarely have need for an
emergency room. Or, for example, a consortium of hospitals in a
particular community could get together and one could say, 'We will
have the emergency room, you have the nursing school, and a third
-- '"
Tr. of Oral Arg. 23-25.
[
Footnote 2/3]
Of course, the ripeness determination has as an integral
component the question of whether the agency action is sufficiently
"final" for judicial review within the meaning of the
Administrative Procedure Act, 5 U.S.C. § 704.
See Abbott
Laboratories v. Gardner, 387 U. S. 136,
387 U. S. 149
(1967).
[
Footnote 2/4]
With respect to certain of the respondents, the allegations of
the complaint would seem to controvert a connection between the
hospitals whose past conduct affected them and the disputed Revenue
Ruling. For example, certain of the respondents alleged they were
enrolled in the Medicaid program, but were denied treatment in the
absence of a further cash deposit by the hospitals to which they
applied for admission. This would appear to refute an inference
that the hospitals involved came within the terms of the disputed
Ruling and were granted tax-exempt status on that basis. No further
allegations or, at summary judgment, showings were made to clarify
this aspect of the case.
In fairness to respondents, it is noted that the wrongs alleged
in the complaint and the relief sought went beyond simply
challenging the disputed Ruling; respondents further sought to
declare illegal and enjoin the IRS from granting tax-exempt status
to hospitals whose operations, apart from the disputed Ruling, did
not properly fall within the definition of "charitable" as required
by the Internal Revenue Code. However, only issues concerning the
disputed Revenue Ruling are before us on the petition for
certiorari.
[
Footnote 2/5]
Such a showing was required to demonstrate standing in respect
to respondents' claim that the Revenue Ruling was promulgated in
violation of the rulemaking provisions of the Administrative
Procedure Act, as well as for purposes of their other claims. It is
true that the rulemaking section of the Act provides for notice and
opportunity to comment for "interested persons," 5 U.S.C. § 553(c).
However, it is unnecessary to decide in this case whether Congress,
by so providing, has created a cognizable interest in such
participation and standing to complain of its wrongful deprivation
apart from any other injury in fact flowing from the agency action.
Cf. Trafficante v. Metropolitan Life Ins. Co.,
409 U. S. 205
(1972). Respondents in this litigation made no allegation or
showing that they desired an opportunity to participate, or that
they would have availed themselves of such an opportunity had it
been presented. Therefore, in regard to this procedural claim no
less than the other claims raised, respondents were required to
demonstrate some connection between the disputed Ruling and the
hospitals affecting them in order to make out some injury in fact
resulting from the challenged action.
[
Footnote 2/6]
Moreover, by requiring that this "
line of causation,'"
ante at 426 U. S. 45 n.
25, be precisely and intricately elaborated in the complaint, the
Court continues its recent policy of "reverting to the form of fact
pleading long abjured in the federal courts." Warth v.
Seldin, 422 U. S. 490,
422 U. S. 528
(1975) (BRENNAN, J., dissenting). One waits in vain for an
explanation for this selectively imposed pleading requirement; a
requirement so at odds with our usual view that, under the Federal
Rules of Civil Procedure,
"a complaint should not be dismissed for failure to state a
claim unless it appears beyond doubt that the plaintiff can prove
no set of facts in support of his claim which would entitle him to
relief."
Conley v. Gibson, 355 U. S. 41,
355 U. S. 45-46
(1957). The want of an explanation is even more striking when
considered in light of our reaffirmation of
Conley only
this Term,
Hospital Bldg. Co. v. Trustees of Rex Hospital,
425 U. S. 738,
425 U. S. 746
(1976), and our observation therein that the same standard is
applicable to testing the sufficiency of the complaint for subject
matter jurisdiction,
id. at
425 U. S. 742
n. 1.
[
Footnote 2/7]
We were originally told in
Linda R.S. v. Richard D.,
410 U.S. at
410 U. S. 617,
410 U. S. 619,
that the treatment of the injury-in-fact standing requirement, and
the consequent dismissal of the case owing to the lack of a "direct
nexus" between the injury incurred and the wrongful action alleged,
was a consequence of the "unique context of a challenge to a
criminal statute," and the "special status of criminal prosecutions
in our system." Although. this conclusion was arguable even in its
specific context,
see id. at
410 U. S. 621
(WHITE, J., dissenting), last Term's
Warth v. Seldin,
422 U. S. 490
(1975), taught that the raising of the threshold requirement for
pleading injury in fact in
Linda R.S. was not "unique"
after all. But whatever the merits of the treatment of the
injury-in-fact requirement in those cases, it is distressing that
the Court should mechanically apply the approach developed therein
to a case brought under the Administrative Procedure Act without
any analysis,
see ante at
426 U. S. 37-39,
and n. 16, of the only constitutional dimension of standing -- the
requirement of concrete adverseness flowing from a personal stake
in the outcome.
See United States v. Richardson,
418 U. S. 166,
418 U. S. 181
(1974) (POWELL, J., concurring).
[
Footnote 2/8]
The Court has read the standing provision of the Administrative
Procedure Act, 5 U.S.C. § 702, which provides for review for any
"person . . . adversely affected or aggrieved by agency action
within the meaning of a relevant statute," as conferring standing
upon any person whose interest is adversely affected in fact, so
long as that interest comes within the purposes and policies of the
statute or statutes authorizing the agency action in question
("within the meaning of a relevant statute").
See Sierra Club
v. Morton, 405 U.S. at
405 U. S.
732-733; Albert, Standing to Challenge Administrative
Action: An Inadequate Surrogate for Claim for Relief, 83 Yale L.J.
425, 451-452, n. 105 (1974).
[
Footnote 2/9]
It is my view, however, that such considerations go only to
other questions of justiciability or to questions of the
reviewability of the administrative action, and not properly to the
question of standing.
Barlow v. Collins, 397 U.S. at
397 U. S.
168-170,
397 U. S. 171
n. 3,
397 U. S.
173-175 (opinion of BRENNAN, J.).
[
Footnote 2/10]
It clearly cannot be determinative for purposes of
constitutionally required standing that there is only a
probabilistic connection between the immediate interest, to which
injury is alleged, and some more ultimate injury to the complaining
party.
United States v. SCRAP, 412 U.S. at
412 U. S. 689
n. 14, specifically rejected the argument that, for standing
purposes, "significant" injury must be alleged. Rather, the Court
held that Art. III policies were adequately fulfilled even though
the ultimate injury is very small indeed.
Ibid. Clearly
there is no difference for purposes of Art. III standing --
personal interest sufficient for concrete adverseness -- between a
small but certain injury and a harm of a larger magnitude
discounted by some probability of its nonoccurrence. If the
probability of the more ultimate harm is so small as to make the
claim clearly frivolous, "the plaintiff can be hastened from the
court by summary judgment."
Barlow v. Collins, supra at
397 U. S. 175
n. 10 (opinion of BRENNAN, J.);
United States v. SCRAP,
supra at
412 U. S. 689,
and n. 15.
See, e.g., Granite Falls State Bank v.
Schneider, 319 F. Supp. 1346 (WD Wash.1970),
summarily
aff'd, 402 U.S. 1006 (1971). Obviously, however, if the
respondents had demonstrated that the IRS was "encouraging" the
hospitals affecting them to withdraw provision of medical services
for indigents, the probability of the occurrence of the more
ultimate injury would be sufficient to confer standing upon the
respondents to challenge the action.
[
Footnote 2/11]
I note that this Court summarily affirmed in
Coit v.
Green, a case in which the standing issue was expressly raised
on appeal.
See Jurisdictional Statement 11 in No. 71-425,
O.T. 1971. The court below in that case found standing without any
such gratuitous allegations or showings respecting injury in fact.
309 F. Supp. at 1132.
[
Footnote 2/12]
This is apparently the point the Court wishes to drive home by
means of the following statement,
ante at
426 U. S. 41 n.
22:
"The reference in
Linda R.S. to 'a statute expressly
conferring standing' was in recognition of Congress' power to
create new interests the invasion of which will confer standing. .
. . When Congress has so acted, the requirements of Art. III
remain:"
"the plaintiff still must allege a distinct and palpable injury
to himself, even if it is an injury shared by a large class of
other possible litigants."
[
Footnote 2/13]
See also Davis, The Liberalized Law of Standing, 37
U.Chi.L.Rev. 450, 469 (1970). After today's decision, the lower
courts will understandably continue to lament the intellectual
confusion created by this Court under the rubric of the law of
standing.
E.g., Scanwell Laboratories v. Shaffer, 137
U.S.App.D.C. 371, 373, 424 F.2d 859, 861 (1970):
"The law of standing as developed by the Supreme Court has
become an area of incredible complexity. Much that the Court has
written appears to have been designed to supply retrospective
satisfaction, rather than future guidance. The Court has itself
characterized its law of standing as a 'complicated specialty of
federal jurisdiction.' . . . One cannot help asking why this should
be true."