This appeal is on remand from the Supreme Court of the United States, 108 S.Ct 2268, 2273 (1988), to determine whether the district court lacked subject matter jurisdiction because the plaintiffs failed to satisfy requirements for Article III standing. The July 19, 1982 decision and order of the United States District Court for the Southern District of New York (Carter J.), reported at 544 F. Supp. 471 (S.D.N.Y. 1982), aff'd on reh'g, 603 F. Supp 970 (S.D.N.Y. 1985), found that plaintiffs did have standing to challenge the tax-exempt status of the Roman Catholic Church in the United States. We hold that the plaintiffs do not satisfy Article III's standing requirements, and that the district court therefore lacked subject matter jurisdiction. Reversed and complaint dismissed. Judge Newman dissents in a separate opinion.
Newman, Kearse, and Cardamone, Circuit Judges.
This appeal is before us for a second time. The Supreme Court has remanded the matter for a determination of whether the United States District Court for the Southern District of New York (Carter, J.) had subject matter jurisdiction over the instant lawsuit that challenged the tax-exempt status of the Roman Catholic Church in the United States. The specific issue is whether the plaintiffs, who initiated this litigation to force the government to revoke the Catholic Church's tax-exempt status, satisfy the standing requirements of Article III. For the reasons discussed below, we hold that they do not.
Plaintiffs in this appeal are united in their commitment to a woman's right to obtain a legal abortion. This suit was instituted originally by 20 individuals and nine organizations. We assume familiarity with their specific identities as set forth in the district court's opinion. See Abortion Rights Mobilization, Inc. v. Regan, 544 F. Supp. 471, 474 (S.D.N.Y. 1982). Some are no longer parties. Of the nine original organizational plaintiffs, for example, the district court held that five abortion clinics lacked standing and dismissed their complaints. Id. at 479 nn. 5 & 6. The district court did grant standing to an organization called the Women's Center for Reproductive Health, because it is run by a Presbyterian minister who is also a plaintiff. We discuss the Women's Center with the clergy plaintiffs. The three remaining organizations are Abortions Rights Mobilization Inc. (ARM), the National Women's Health Network Inc. (NWHN) and the Long Island National Organization For Women-Nassau, Inc. (Nassau-NOW). The former two are pro-choice organizations that are non-profit, tax-exempt organizations as defined in § 501(c)(3) of the Internal Revenue Code (Code). 26 U.S.C. § 501(c)(3). Nassau-NOW shares ARM's and NWHN's objectives, but is exempt from taxes under § 501(c)(4), rather than (c)(3).
Twenty individual plaintiffs also bring this suit. They include Protestant ministers and Jewish rabbis. In contrast to the views of the Catholic Church, they believe that abortion is morally permissible under some circumstances. Many of the individual plaintiffs donate money to or serve as directors of the organizational plaintiffs. The individual plaintiffs vote and pay taxes.
B. Pertinent Statutory Framework
Before reciting the history of the prior legal proceedings, an understanding of two pertinent sections of the Code is necessary, as a preliminary matter, to appreciate what is at stake in this litigation. As noted, the Catholic Church and organizational plaintiffs ARM and NWHN are tax-exempt under § 501(c)(3). That section states that qualifying religious or civic public interest organizations need not pay federal taxes. The trade-off for the benefit of this exemption is that no substantial part of the organization's activities may include "carrying on . . . propaganda, or otherwise attempting, to influence legislation . . . [nor may it] participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of any candidate for public office." Thus, the quid pro quo for § 501(c)(3) tax-exemption is a restraint on an organization's right to try to influence the political process. This limitation has been held constitutional. See Regan v. Taxation With Representation of Washington, 461 U.S. 540, 544, 76 L. Ed. 2d 129, 103 S. Ct. 1997 (1983) (TWR). Section 501(c)(3) status is advantageous to the supporters of an organization as well as the organization itself because § 170 of the Code permits donors to § 501(c)(3) entities to claim a deduction for their contributions. This deduction gives the donor an economic incentive to contribute. For example, a donor in a 28 percent tax bracket actually pays only 72 cents for every dollar contributed to the Catholic Church because of the deduction. Consequently, organizations like the Church and plaintiffs ARM and NWHN have enhanced fundraising abilities because they are able to offer donors the lure of the § 170 deduction. See 461 U.S. at 546.
The plaintiffs object to the Internal Revenue Service's (IRS) enforcement -- or, as they describe it, nonenforcement -- of § 501(c)(3)'s prohibition on lobbying and campaigning. Because this appeal arises from a motion to dismiss for want of standing, we must accept all of the plaintiffs' allegations as true and draw all inferences in their favor. See Warth v. Seldin, 422 U.S. 490, 501, 45 L. Ed. 2d 343, 95 S. Ct. 2197 (1975).
Plaintiffs first allege that the Catholic Church is repeatedly violating § 501(c)(3)'s prohibition on campaigning in order to promote the tenet that abortion is immoral and should therefore be made unlawful. For instance, plaintiffs point to the Church's "Pastoral Plan for Pro-Life-Activities", which they claim is an organized effort to mobilize the entire Church in a "three-fold educational, pastoral and political effort to outlaw abortions in the United States." Complaint, para. 22. The complaint also alleges that through its priests and officials, the Catholic Church has endorsed or supported pro-life political candidates and opposed pro-choice candidates by publishing articles in its bulletins, attacking or endorsing candidates from the pulpit, distributing partisan letters to parishioners, and urging its members to donate to and sign petitions of "right to life" committees and candidates. Complaint, para. 26. Similarly, plaintiffs contend that the Church has contributed substantial sums of money to "right to life" and other political groups which have, directly or indirectly, supported the political candidacies for public office of persons favoring anti-abortion legislation. Complaint, para. 27.
Plaintiffs' other major contention is that the IRS knows about the Catholic Church's alleged political activities and has ignored these activities rather than either revoking the Church's tax-exempt status under § 501(c)(3), or not renewing the Church's annual exemption. They therefore assert that the government has "exempted the Roman Catholic Church from the strictures of the law and from the government's enforcement efforts," Complaint, para. 33, and that the IRS treats the Catholic Church more favorably than those organizations that are pro-choice. Yet plaintiffs do not allege that the IRS has penalized them for violating the Code; in fact, they assert that they have not violated § 501(c)(3) by electioneering, and do not intend to. Rather, they want the government to enforce the strictures of § 501(c)(3) against the Catholic Church. Thus, plaintiffs do not complain about their own tax status -- their challenge is directed solely against the Catholic Church's exemption.
The complaint and affidavits also spell out the asserted harms plaintiffs suffer as a result of the Church's and the IRS' acts. Because the nature of the claimed harm is an integral component in standing analysis, it will be fully analyzed in the later discussion of standing.
In the amended complaint of January 30, 1981 the plaintiffs sued then-Secretary of the Treasury Donald T. Regan, then-Commissioner of Internal Revenue Roscoe L. Egger, Jr., the United States Catholic Conference, Inc., and the National Conference of Catholic Bishops (the latter two collectively the Catholic Church or the Church). The Catholic Church is composed of approximately 30,000 parishes, schools and other entities in the United States whose tax-exemption is granted collectively in a group ruling. The plaintiffs sought declarations that the defendants had violated both § 501(c)(3) of the Code and the Establishment Clause of the First Amendment to the United States Constitution. They also sought injunctive relief to compel the government to enforce the Code and Constitution by revoking the Church's group tax-exemption, to collect the resulting back taxes, and to notify contributors to the Catholic Church that they may no longer claim their donations as deductions on their income tax returns.
The defendants moved to dismiss the complaint on several grounds, including standing. In 1982 the district court held that the clergy and voter plaintiffs had standing, see Abortion Rights Mobilization, Inc. v. Regan, 544 F. Supp. at 491 (S.D.N.Y. 1982) (ARM I), and three years later -- following a rehearing to consider the impact of the Supreme Court's subsequent decision in Allen v. Wright, 468 U.S. 737, 82 L. Ed. 2d 556, 104 S. Ct. 3315 (1984) -- reiterated this holding. See Abortion Rights Mobilization, Inc. v. Regan, 603 F. Supp. 970 (S.D.N.Y. 1985) (ARM II). The defendant Catholic Church's motion to dismiss it as a defendant in the suit was granted. See ARM I, 544 F. Supp. at 487. As the litigation progressed, plaintiffs requested substantial discovery from the Church as a non-party witness. Upon its refusal to comply, the Catholic Church was held in contempt in May, 1986. See 110 F.R.D. 337 (S.D.N.Y. 1986).
On appeal, the Church argued that it was improperly held in contempt in the action because the district court lacked subject matter jurisdiction over the case before it due to plaintiffs' lack of standing. We held that, as a non-party contemnor, the Church itself lacked standing to challenge plaintiffs' standing in the main suit, and that as a non-party witness it could only challenge a contempt finding when the district court was without even colorable jurisdiction. Hence, we had no occasion to reach the underlying question now before us of plaintiffs' standing. See In re United States Catholic Conference, 824 F.2d 156 (2d Cir. 1987). The Supreme Court reversed, holding that a non-party witness held in contempt had standing to challenge the district court's subject matter jurisdiction. United States Catholic Conference v. Abortion Rights Mobilization, Inc., 487 U.S. 72, 108 S. Ct. 2268, 101 L. Ed. 2d 69 (1988). Upon remand from the Supreme Court, we now must analyze whether plaintiffs have standing to sue the government for conferring tax-exempt status to the Catholic Church.
In Allen v. Wright, 468 U.S. 737, 82 L. Ed. 2d 556, 104 S. Ct. 3315 (1984), the Supreme Court made clear that standing is not merely a prudential inquiry into whether a court should exercise jurisdiction, but is rooted in Article III's "case" or "controversy" requirement and reflects separation of powers principles. See also Valley Forge Christian College v. Americans United For Separation of Church and State, Inc., 454 U.S. 464, 471, 70 L. Ed. 2d 700, 102 S. Ct. 752 (1982). Thus, when a plaintiff lacks standing to bring suit, a court has no subject matter jurisdiction over the case. Deceptively simple to state, standing entails a complex three-pronged inquiry. First, plaintiffs must show that they have suffered an injury in fact that is both concrete in nature and particularized to them. Allen v. Wright, 468 U.S. at 755; Valley Forge, 454 U.S. at 482-87; Warth v. Seldin, 422 U.S. at 502; Gladstone, Realtors v. Village of Bellwood, 441 U.S. 91, 100, 60 L. Ed. 2d 66, 99 S. Ct. 1601 (1979). Second, the injury must be fairly traceable to defendants' conduct. See Allen, 468 U.S. at 757; Valley Forge, 454 U.S. at 472; Simon v. Eastern Ky. Welfare Rights Org., 426 U.S. 26, 41-42, 48 L. Ed. 2d 450, 96 S. Ct. 1917 (1976) (EKWRO); Warth, 422 U.S. at 504-05; Linda R.S. v. Richard D., 410 U.S. 614, 617, 35 L. Ed. 2d 536, 93 S. Ct. 1146 (1973). Third, the injury must be redressable by removal of defendants' conduct. See Allen, ...