Allen v. Wright/Dissent Stevens

JUSTICE STEVENS, with whom JUSTICE BLACKMUN joins, dissenting.

Three propositions are clear to me: (1) respondents have adequately alleged "injury in fact"; (2) their injury is fairly traceable to the conduct that they claim to be unlawful; and (3) the "separation of powers" principle does not create a jurisdictional obstacle to the consideration of the merits of their claim.

I
Respondents, the parents of black schoolchildren, have alleged that their children are unable to attend fully desegregated schools because large numbers of white children in the areas in which respondents reside attend private schools which do not admit minority children. The Court, JUSTICE BRENNAN, and I all agree that this is an adequate allegation of "injury in fact." The Court is quite correct when it writes:


 * The injury they identify — their children's diminished ability to receive an education in a racially integrated school — is, beyond any doubt, not only judicially cognizable but, as shown by cases from Brown v. Board of Education, 347 U.S. 483"]347 U.S. 483 (1954), to 347 U.S. 483 (1954), to Bob Jones University v. United States, 461 U.S. 574 (1983), one of the most serious injuries recognized in our legal system.

Ante at 756. This kind of injury may be actionable whether it is caused by the exclusion of black children from public schools or by an official policy of encouraging white children to attend nonpublic [p784] schools. A subsidy for the withdrawal of a white child can have the same effect as a penalty for admitting a black child.

II
In final analysis, the wrong respondents allege that the Government has committed is to subsidize the exodus of white children from schools that would otherwise be racially integrated. The critical question in these cases, therefore, is whether respondents have alleged that the Government has created that kind of subsidy.

In answering that question, we must, of course, assume that respondents can prove what they have alleged. Furthermore, at this stage of the litigation, we must put to one side all questions about the appropriateness of a nationwide class action. The controlling issue is whether the causal connection between the injury and the wrong has been adequately alleged.

An organization that qualifies for preferential treatment under § 501(c)(3) of the Internal Revenue Code, because it is "operated exclusively for . . . charitable . . . purposes," 26 [p785] U.S.C. § 501(C)(3), is exempt from paying federal income taxes, and, under § 170 of the Code, 26 U.S.C. § 170 persons who contribute to such organizations may deduct the amount of their contributions when calculating their taxable income. Only last Term, we explained the effect of this preferential treatment:


 * Both tax exemptions and tax deductibility are a form of subsidy that is administered through the tax system. A tax exemption has much the same effect as a cash grant to the organization of the amount of tax it would have to pay on its income. Deductible contributions are similar to cash grants of the amount of a portion of the individual's contributions.

Regan v. Taxation With Representation of Washington, 461 U.S. 540, 544 (1983) (footnote omitted). The purpose of this scheme, like the purpose of any subsidy, is to promote the activity subsidized; the statutes "seek to achieve the same basic goal of encouraging the development of certain organizations through the grant of tax benefits." Bob Jones University v. United States, 461 U.S. 574, 587, n. 10 (1983). If the granting of preferential tax treatment would "encourage" private segregated schools to conduct their "charitable" activities, it must follow that the withdrawal of the treatment would "discourage" them, and hence promote the process of desegregation. [p786]

We have held that, when a subsidy makes a given activity more or less expensive, injury can be fairly traced to the subsidy for purposes of standing analysis because of the resulting increase or decrease in the ability to engage in the activity. Indeed, we have employed exactly this causation analysis in the same context at issue here — subsidies given private schools that practice racial discrimination. Thus, in Gilmore v. City of Montgomery, 417 U.S. 556 (1974), we easily recognized the causal connection between official policies that enhanced the attractiveness of segregated schools and the failure to bring about or maintain a desegregated public school system. Similarly, in Norwood v. Harrison, [p787] 413 U.S. 455 (1973), we concluded that the provision of textbooks to discriminatory private schools "has a significant tendency to facilitate, reinforce, and support private discrimination." Id. at 466.

The Court itself appears to embrace this reading of Gilmore and Norwood. It describes Gilmore as holding that a city's policy of permitting segregated private schools to use public parks


 * would impede the integration of the public schools. Exclusive availability of the public parks "significantly enhanced the attractiveness of segregated private schools . . . by enabling them to offer complete athletic programs."

Ante at 762, n. 27 (quoting 417 U.S. at 569). It characterizes Norwood as having concluded that the provision of textbooks to such schools would impede court-ordered desegregation. Ante at 763. Although the form of the subsidy for segregated private schools involved in Gilmore and Norwood was different from the "cash grant" that flows from a tax exemption, the economic effect and causal connection between the subsidy and the impact on the complaining litigants was precisely the same in those cases as it is here. [p788]

This causation analysis is nothing more than a restatement of elementary economics: when something becomes more expensive, less of it will be purchased. Sections 170 and 501(c)(3) are premised on that recognition. If racially discriminatory private schools lose the "cash grants" that flow from the operation of the statutes, the education they provide will become more expensive, and hence less of their services will be purchased. Conversely, maintenance of these tax benefits makes an education in segregated private schools relatively more attractive by decreasing its cost. Accordingly, without tax-exempt status, private schools will either not be competitive in terms of cost or have to change their admissions policies, hence reducing their competitiveness for parents seeking "a racially segregated alternative" to public schools, which is what respondents have alleged many white parents in desegregating school districts seek. In either event, the process of desegregation will be advanced in the same way that it was advanced in Gilmore and Norwood — the withdrawal of the subsidy for segregated schools means the incentive structure facing white parents who seek such schools for their children will be altered. Thus, the laws of economics, not to mention the laws of Congress embodied in §§ 170 and 501(c)(3), compel the conclusion that the injury respondents have alleged — the increased segregation of their children's schools because of the ready availability of private schools that admit whites only — will be redressed if these schools' operations are inhibited through the denial of preferential tax treatment. [p789]

III
Considerations of tax policy, economics, and pure logic all confirm the conclusion that respondents' injury in fact is fairly traceable to the Government's allegedly wrongful conduct. The Court therefore is forced to introduce the concept of "separation of powers" into its analysis. The Court writes that the separation of powers "explains why our cases preclude the conclusion" that respondents' injury is fairly traceable to the conduct they challenge. Ante at 759.

The Court could mean one of three things by its invocation of the separation of powers. First, it could simply be expressing the idea that, if the plaintiff lacks Art. III standing to bring a lawsuit, then there is no "case or controversy" [p790] within the meaning of Art. III, and hence the matter is not within the area of responsibility assigned to the Judiciary by the Constitution. As we have written in the past, through the standing requirement,


 * Art. III limit[s] the federal judicial power "to those disputes which confine federal courts to a role consistent with a system of separated powers and which are traditionally thought to be capable of resolution through the judicial process."

Valley Forge Christian College v. Americans United for Separation of Church and State, Inc., 454 U.S. 464, 472 (1982) (quoting Flast v. Cohen, 392 U.S. 83, 97 (1968)). While there can be no quarrel with this proposition, in itself it provides no guidance for determining if the injury respondents have alleged is fairly traceable to the conduct they have challenged.

Second, the Court could be saying that it will require a more direct causal connection when it is troubled by the separation of powers implications of the case before it. That approach confuses the standing doctrine with the justiciability of the issues that respondents seek to raise. The purpose of the standing inquiry is to measure the plaintiff's stake in the outcome, not whether a court has the authority to provide it with the outcome it seeks:


 * [T]he standing question 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 the exercise of the court's remedial powers on his behalf.

Warth v. Seldin, 422 U.S. 490, 498-499 (1975) (emphasis in original) (quoting Baker v. Carr, 369 U.S. 186, 204 (1962)). [p791]

Thus, the


 * "fundamental aspect of standing" is that it focuses primarily on the party seeking to get his complaint before the federal court, rather than "on the issues he wishes to have adjudicated,"

United States v. Richardson, 418 U.S. 166, 174 (1974) (emphasis in original) (quoting Flast, 392 U.S. at 99). The strength of the plaintiff's interest in the outcome has nothing to do with whether the relief it seeks would intrude upon the prerogatives of other branches of government; the possibility that the relief might be inappropriate does not lessen the plaintiff's stake in obtaining that relief. If a plaintiff presents a nonjusticiable issue, or seeks relief that a court may not award, then its complaint should be dismissed for those reasons, and not because the plaintiff lacks a stake in obtaining that relief, and hence has no standing. Imposing an undefined but clearly more rigorous standard for redressability for reasons unrelated to the causal nexus between the injury and the challenged conduct [p792] can only encourage undisciplined, ad hoc litigation, a result that would be avoided if the Court straightforwardly considered the justiciability of the issues respondents seek to raise, rather than using those issues to obfuscate standing analysis.

Third, the Court could be saying that it will not treat as legally cognizable injuries that stem from an administrative decision concerning how enforcement resources will be allocated. This surely is an important point. Respondents do seek to restructure the IRS's mechanisms for enforcing the legal requirement that discriminatory institutions not receive tax-exempt status. Such restructuring would dramatically [p793] affect the way in which the IRS exercises its prosecutorial discretion. The Executive requires latitude to decide how best to enforce the law, and in general the Court may well be correct that the exercise of that discretion, especially in the tax context, is unchallengeable.

However, as the Court also recognizes, this principle does not apply when suit is brought "to enforce specific legal obligations whose violation works a direct harm," ante at 761. For example, despite the fact that they were challenging the methods used by the Executive to enforce the law, citizens were accorded standing to challenge a pattern of police misconduct that violated the constitutional constraints on law enforcement activities in Allee v. Medrano, 416 U.S. 802 (1974). Here, respondents contend that the IRS is violating a specific constitutional limitation on its enforcement discretion. There is a solid basis for that contention. In Norwood, we wrote:


 * A State's constitutional obligation requires it to steer clear, not only of operating the old dual system of racially segregated schools, but also of giving significant aid to institutions that practice racial or other invidious discrimination.

413 U.S. at 467. Gilmore echoed this theme:


 * [A]ny tangible State assistance, outside the generalized services government might provide to private segregated schools in common with other schools, and with all citizens, is constitutionally prohibited if it has "a significant tendency to facilitate, reinforce, and support private discrimination." Norwood v. Harrison, 413 U.S. 455, 466 (1973). The constitutional obligation of the State "requires it to steer clear, not only of operating the old dual system of racially segregated schools, but also of giving significant aid to institutions that practice racial [p794] or other invidious discrimination." Id. at 467.

417 U.S. at 568-569.

Respondents contend that these cases limit the enforcement discretion enjoyed by the IRS. They establish, respondents argue, that the IRS cannot provide "cash grants" to discriminatory schools through preferential tax treatment without running afoul of a constitutional duty to refrain from "giving significant aid" to these institutions. Similarly, respondents claim that the Internal Revenue Code itself, as construed in Bob Jones, constrains enforcement discretion. It has been clear since Marbury v. Madison, 1 Cranch 137 (1803), that "[i]t is emphatically the province and duty of the judicial department to say what the law is." Id. at 177. Deciding whether the Treasury has violated a specific legal [p795] limitation on its enforcement discretion does not intrude upon the prerogatives of the Executive, for, in so deciding, we are merely saying "what the law is." Surely the question whether the Constitution or the Code limits enforcement discretion is one within the Judiciary's competence, and I do not believe that the question whether the law, as enunciated in Gilmore, Norwood, and Bob Jones, imposes such an obligation upon the IRS is so insubstantial that respondents' attempt to raise it should be defeated for lack of subject matter jurisdiction on the ground that it infringes the Executive's prerogatives.

In short, I would deal with the question of the legal limitations on the IRS's enforcement discretion on its merits, rather than by making the untenable assumption that the granting of preferential tax treatment to segregated schools does not make those schools more attractive to white students, and hence does not inhibit the process of desegregation. I respectfully dissent.