Allen v. Wright and Donald T. Regan v. Inez Wright

The U.S. government and Wayne Allen filed separate petitions to the U.S. Supreme Court. The Court heard arguments for both cases concurrently and decided to reverse the decision of the U.S. Court of Appeals. The majority opinion, shared by five justices, held that the respondents (parents of the African American public school children) did not have legal standing to maintain the lawsuit against the IRS.

In this case "standing," as specified under Article III of the U.S. Constitution, pertained to both the jurisdictional propriety and the appropriateness of the claims of litigants. The majority opinion pointed out that, under the principle of "separation of powers," for any court to exercise judicial authority (according to the decision in Valley Forge College v. Americans United [1982]), especially with respect to alleged wrongdoing by another branch of government, there had to exist a "case or controversy." Moreover, as stipulated in Warth v. Seldin (1975), a court had to ensure the "litigant is entitled to have the court decide the merits or dispute of a legal issue." In the absence of appropriateness in a litigant's "standing," the Court explained that any judicial action would be improper. Specifically, in cases involving alleged governmental injury to a private individual or group, a plaintiff had to allege that some kind of personal injury was sustained that could be traced to (the government's) unlawful conduct and which might be corrected only through judicial intervention. Thus, the Court held the respondents had no viable legal standing to bring suit. Respondents did not allege that their children were victims of the segregationist policy of private schools receiving tax exemptions. Neither did they allege that their children ever applied or would ever apply for any of the mentioned private schools. Either allegation could have allowed the court to recognize a "judicially cognizable injury," which would have been appropriate for judicial redress.

In an earlier decision in Moose Lodge No. 107 v. Irvis (1972), the Supreme Court held that the plaintiff had no standing to challenge a club's policy to discriminate racially because Irvis never applied for membership. Similarly, in Rizzo v. Goode (1976) and O'Shea v. Littleton (1974), plaintiffs did not possess appropriate standing because discrimination was not personally directed at the plaintiffs. Similarly, the claim in the class action suit brought by parents of African American students against Allen (and the IRS) did not evidence judicially cognizable injury. Hence, the Court felt they had no choice but to decide that the respondents held no standing, which made complaint or adjudication appropriate. Further, the justices had difficulty understanding how the allegation that tax-exempt status given to segregated private schools harmed the ability to have all schools (public and private) desegregated. The reduced ability of African American children to receive a desegregated education would only have been "fairly traceable" if the respondents could have demonstrated that a sufficient number of segregated private schools in the area existed as a direct result of the IRS extending tax-exempt privileges to them. Moreover, respondents would have had to present convincing evidence that removing tax exemptions would make an obvious difference in public school integration. Justices for the majority, therefore, held that the alleged injury was not "fairly traceable to the asserted unlawful conduct of the IRS."

The majority opinion went on to point out that, considering the arguments presented to the Court, they found difficulty in determining exactly how many racially discriminatory private schools might have had tax-exempt status. They also found questionable whether a change in policy regarding the tax status of private schools would make public school integration more effective. Finally, the Court concluded that even if there existed a viable element of "case or controversy," respondents' arguments presented in Court did not show cause and effect and their case was, at best, weak.

More than voicing opposition to the majority opinion, Justice Brennan provided another perspective in his written decision on behalf of the minority justices. He believed that the Court had used the issues of "standing" and "separation of powers" to avoid consideration of a very important claim. IRS practice was not satisfactory in identifying racially discriminatory schools; thus, their lack of proper protocol resulted in permitting tax-exempt status to schools that practiced racial discrimination. Moreover, the respondents' brief was amply meritorious because it correctly argued that IRS guidelines, as written, inappropriately permitted schools to receive tax-exemptions based on adopting and certifying a desegregation policy rather than basing tax-exemptions on implementation of desegregation policy.

In direct opposition to the majority decision, the minority believed the "case or controversy" requirement for the respondents' standing was satisfied. In their opinion, the respondents' claim alleged at least one type of injury: in granting tax-exemptions to racially discriminatory private schools, the IRS essentially encouraged expansion that could impede efforts of federal courts and local schools to operate under the dual school system. (Brennan's written opinion observed that the Court had previously recognized that such injury was sufficient to satisfy constitutional standards.) Furthermore, the minority firmly believed that distraction of a child's right to receive an education in a desegregated school, whether public or private, was surely injury in fact. Analogous to the case of Gladstone Realtors v. Metropolitan Life Ins. Co. (1976), such injury was also sufficient to satisfy the constitutional requirements of standing. Such injury was also "fairly traceable" to the governmental conduct challenged in the respondents' suit. Accordingly, failure of the IRS to deny tax-exempt status resulted in continued racial discrimination--there existed a direct relationship between government action and injury suffered.

The minority found inappropriate the majority's argument that injury would be "fairly traceable" only if parents listed enough segregated private schools in areas where they lived. In fact, parents had specifically named at least 32 racially discriminatory schools that continued to benefit from tax exemptions. In concluding (and, in a rare moment of adversarial objection), the minority sharply criticized their colleagues, charging that it was only because the respondents' "injury in fact" was "fairly traceable" that the Court was forced to inappropriately and incorrectly introduce the concept of "separation of powers."