426 U.S. 26, 40–41 (1976)
Several indigents and organizations composed of indigents brought this suit against the Secretary of the Treasury and the Commissioner of Internal Revenue.1 They asserted that the Internal Revenue Service violated the Internal Revenue Code of 1954, and the Administrative Procedure Act, by issuing a Revenue Ruling allowing favorable tax treatment to a nonprofit hospital that offered only emergency-room services to indigents.
The Code accords advantageous treatment to nonprofit corporations organized and operated exclusively for charitable purposes.2 In 1956 the IRS issued Revenue Ruling 56-185.3 That ruling required hospitals to operate to the extent of their financial ability for those not able to pay.4 Thirteen years later, on November 3, 1969, the IRS issued Revenue Ruling 69-545.5 It described Hospital A as limiting admissions to those who can pay but operating a full-time emergency room open to all.6 The IRS held it exempt as charitable.7 It modified the prior ruling to remove the requirements relating to caring for patients without charge.8
Issuance of the new ruling led to the filing of this suit in July 1971 in the United States District Court for the District of Columbia.9 The plaintiff organizations included low-income persons among their members and represented their interests in obtaining hospital care.10 The twelve individual plaintiffs subsisted below poverty levels and suffered from medical conditions requiring hospital services.11 Each described an occasion on which he or a family member had been disadvantaged in seeking needed hospital services because of indigency, including refusals of admission without deposits and denial of emergency-room treatment.12
By motion to dismiss, defendants challenged standing and other jurisdictional grounds.13 The District Court denied the motion and on cross-motions for summary judgment held the ruling improperly promulgated and without effect.14 The Court of Appeals for the District of Columbia Circuit reversed on the merits, finding the ruling founded on a permissible definition of charitable and exempt from APA rulemaking requirements.15 Plaintiffs sought certiorari, defendants filed a cross-petition, and the Supreme Court granted both in 1975.16
Whether the respondents established their standing to sue by alleging injury fairly traceable to the petitioners' issuance of Revenue Ruling 69-545?17
No. The established facts show that several indigents and organizations composed of indigents brought this suit against the Secretary of the Treasury and the Commissioner of Internal Revenue.20 They asserted that the Internal Revenue Service violated the Internal Revenue Code of 1954 and the Administrative Procedure Act by issuing Revenue Ruling 69-545.21 The facts further establish that the twelve individual plaintiffs subsisted below poverty levels and described specific occasions on which they or family members were denied hospital services due to indigency.22 The plaintiff organizations included low-income persons among their members and represented their interests in obtaining hospital care.
Yet the only defendants are Treasury officials.23 The complaint alleged only that the ruling encouraged hospitals to deny services.24 It remains speculative whether the denials of service resulted from the ruling or from independent hospital decisions.25 It also remains speculative whether court-ordered relief would result in the hospitals providing the desired services rather than forgoing favorable tax treatment.26
The respondents failed to establish their standing to sue.27
Related opinions on this issue
Justice Stewart joined the opinion of the Court holding that the plaintiffs in this case did not have standing to sue.28 He added only that he 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.29
Joined by Justice Marshall
Justice Brennan concurred in the judgment.30 He agreed that respondents had not met their burden of establishing a concrete and reviewable controversy between themselves and the Government with respect to the disputed Revenue Ruling.31 He dissented from the Court's reasoning on the standing issue, finding it unjustifiable under any proper theory of standing and clearly contrary to the relevant precedents.32
He argued that the injury alleged was to respondents' opportunity and ability to receive medical services, as the ruling gave erroneous economic signals to nonprofit hospitals whose responses affected them.33 The ruling's application was ambiguous, raising ripeness concerns since it applied only to a narrow category of hospitals like Hospital A and did not clearly withdraw the indigent-care requirement from all hospitals.34 The standing analysis itself was flawed under Article III policies because it required additional speculative showings about hospital dependence on tax benefits not mandated by precedents such as SCRAP and placed the holding beyond congressional power to rectify by resting on an expanded injury-in-fact minimum.35