# Petition — American Society of Travel Agents, Inc. v. Blumenthal > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385005_0410%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition - **Published:** January 1, 1978 - **Citation:** 435 U.S. 947 ## Text Supreme Court, U.S. FILED JAN $0 1978 | ds 4 - CLERK IN THE Supreme Court of the United States OCTOBER TERM, 1977 nolZZ- 1075 AMERICAN SOCIETY OF TRAVEL AGENTS, INC., et al., Petitioners, Vv. MICHAEL BLUMENTHAL, SECRETARY OF THE TREASURY, et al., Respondents. PETITION FOR WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT PIERRE J. LAFORCE 1785 New York Avenue, N.W. Washington, D.C. 20006 Attorney for Petitioners Of Counsel: WILKINSON, CRAGUN & BARKER PAUuL S. QUINN EDWARD M. FoGARTY WILSON - Eres PRINTING Co.. INC. - RE 7-6002 - WASHINGTON. D.C. 20001 TABLE OF CONTENTS areal lanlialeemennelial PERE SE REEL SE oe OO ee PERN Oe RT Se Nant Questions Presented ...........---..---.-.-...---- EEE LAI RET TO TO EN Cg Reasons for Granting the Writ ......................000.......-......- I. II. III. The Court of Appeals Has Effectively Foreclosed the Only Legal Forum Available to Tax-Paying Business Entities Adversely Affected by Unfair ‘Competition Arising Out of the Unlawful Re fusal of Federal Tax Authorities to Enforce Sec- tions 501(c) (3) and 511(a) (1) of the Internal Revenue Code. In So Doing, the Court of Ap- peals Has Decided an Important Question of Federal Law Which Has Not Been, But Should Be, Settled by This Court ..................................... The Decision of the Court of Appeals Is in Con- flict With a Decision of the United States Court of Appeals for the First Circuit on the Issue of TEA ie TS SE aan AS ck a The Decision of the Court of Appeals Conflicts With Applicable Decisions of This Court on the 8g SIRE ATS SSS a ese nee a The Court of Appeals Dismissed Petitioners’ Complaint Without Accepting as True the Alle- gations of That Complaint, Without Construing the Complaint in Favor of Petitioners, and With- out Providing Petitioners an Opportunity to Supply Further Particularized Allegations of Fact in Support of Their Standing to Sue. In So Doing, the Court of Appeals Has So Far De- parted From the Accepted Course of Judicial Proceedings as to Call for an Exercise of This Court’s Power of Supervision ......................... ac i NI oowwn 10 12 16 18 II TABLE OF AUTHORITIES Cases: Page Arnold Tours, Inc. v. Camp, 400 U.S. 45 (1970) .... 13 Association of Data Processing Service Organiza- tions, Inc. v. Camp, 397 U.S. 150 (1970) -...12, 18, 14, 15 Conley v. Gibson, 355 U.S. 41 (1957) —......-..... 17 Constructores Civiles de Centroamerica v. Hannah, 459 F.2d 1183 (D.C. Cir. 1972) —............. REALS ™ 13 Flast v. Cohen, 392 U.S. 83 (1968) -—................... 18, 14 Hardin v. Kentucky Utilities Co., 390 U.S. 1 I SESRERE GP SBR RET oye er ee 13 Investment Co. Institute v. Camp, 401 U.S. 617 PERRET Se eee = EY oe ae 13 Jenkins v. McKeithen, 395 U.S. 411 (1969) —........ 17 Linda R. S. v. Richard D., 410 U.S. 614 (1973) -.... 9,16 National Ass’n of Neighborhood Health Centers, Inc. v. Mathews, 551 F.2d 321 (D.C. Cir. 1976) .. 12 P.A.M. News Corp. v. Hardin, 440 F.2d 255 (D.C. a 13 Ray Baillie Trash Hauling, Inc. v. Kleppe, 447 F.2d 696 (5th Cir. 1973), cert. denied, 415 U.S. 914 a 14 Rental Housing Ass’n v. Hills, 548 F.2d 388 (1st i ll passim Simon v. Eastern Kentucky Welfare Rights Organ- Me GE GE ee passim Tax Analysts and Advocates v. Blumenthal, No. 75- 1304 (D.C. Cir. June 15, 1977), petition for cert. filed, 46 U.S.L.W. 3338 (U.S. Nov. 14, 1977) REE ERE Cee RCo 2,12, 14, 15 Warth v. Seldin, 422 U.S. 490 (1975) -.................. 17 Statutes and Regulations: Internal Revenue Code of 1954, § 501(c) (3), as amended by Pub. L. No. 94-455, §§ 1307 (d) (1) (A), 13138(a), 90 Stat. 1727, 1730 (Oct. 4, ee Se EAE ORI ON Ns fe Ae passim 26 U.S.C. § 511 (a) (1) passim 26 U.S.C. § 512(a) (1) (1970) ................................. 3 ——. Se Tit TABLE OF AUTHORITIES—Continued S36 USS. §SE8(a) (i000) ..........................-- 28 U.S.C. § 1254(1) (1970) ............. 26 C.F.R. § 1.513-1(b) (1977) ..................... Other Authorities: meee eeenn H.R. Rep. No. 2319, 81st Cong., 2d Sess. (1950) .... S. Rep. No. 2375, 81st Cong., 2d Sess. (1950) 10 10 we IV LIST OF APPENDICES » PRS CD cccccteccursintistmmseneiianiniiinaiiines Memorandum Opinion of the United States District Court for the District of Columbia .................__... Majority Opinion of the United States Court of Ap- peals for the District of Columbia Circuit, Together with Dissenting Opinion of Chief Judge Bazelon _.... Judgment of the United States Court of Appeals for the District of Columbia Circuit —.........-...... . Order of the United States Court of Appeals for the District of Columbia Circuit, Denying Petitioners’ a a Order ot the United States Court of Appeals for the District of Columbia Circuit, Denying Petitioners’ Suggestion for Rehearing En Bane __........................ Majority Opinion of the United States Court of Ap- peals for the District of Columbia Circuit in Taz Analysts and Advocates v. Blumenthal, No. 75-1304 (D.C. Cir. June 15, 1977), petition for cert. filed, 46 U.S.L.W. 3338 (U.S. Nov. 14, 1977) (No. 77- ee nia IN THE Supreme Court of the United States OCTOBER TERM, 1977 No. AMERICAN SOCIETY OF TRAVEL AGENTS, INC., et al., Petitioners, Vv. MICHAEL BLUMENTHAL, SECRETARY OF THE TREASURY, et al., Respondents. PETITION FOR WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT Petitioners, the American Society of Travel Agents, Inc. and twelve of its individual travel agency members, pray that a writ of certiorari issue to review the judg- ment rendered in this case by the United States Court of Appeals for the District of Columbia Circuit. OPINIONS BELOW On May 23, 1975, the United States District Court for the District of Columbia dismissed petitioners’ complaint ' for failure to state a claim upon which relief can be 1 Petitioners’ complaint appears as Appendix A hereto. 2 granted. The district court’s memorandum opinion, not officially reported, is unofficially reported at 36 A.F.T.R.2d 75-5142 (D.D.C. May 23, 1975), and appears as Ap- pendix B to this petition. On September 15, 1977, the United States Court of Appeals for the District of Columbia Circuit affirmed that decision on the ground that petitioners lacked standing to maintain this action. The opinion of the court of appeals, not yet reported, appears as Appendix C hereto.’ The judgment of the court of appeals, entered on Sep- tember 15, 1977, appears as Appendix D. Petitioners’ timely petition for rehearing and sugges- tion for rehearing en banc were denied by the court of appeals on November 1, 1977. The court’s order denying the petition for rehearing appears as Appendix E hereto, and its denial of petitioners’ suggestion for rehearing en bane appears as Appendix F. JURISDICTION As indicated, petitioners’ timely petition for rehearing and suggestion for rehearing en banc were denied by the court of appeals on November 1, 1977.* The jurisdiction of this Court is invoked under 28 U.S.C. § 1254(1) (1970). ? Appendix C also includes the dissenting opinion of Chief Judge Bazelon, which was filed as a common dissent in the instant case and in Tax Analysts and Advocates v. Blumenthal, No. 75-1304 (D.C. Cir. June 15, 1977), petition for cert. filed, 46 U.S.L.W. 3338 (U.S. Nov. 14, 1977) (No. 77-681). See Appendix C, at 30a. The majority opinion in the Taz Analysts case appears as Appendix G to this petition. * See Appendices E, F. QUESTIONS PRESENTED 1. Whether the refusal of federal tax authorities to en- force Sections 501(c) (3) and 511(a)(1) of the In- ternal Revenue Code against tax-exempt organizations which operate business enterprises unrelated to their tax-exempt purposes may ever be challenged by ad- versely affected tax-paying competitors of such enter- prises. ; 2. Whether tax-paying business entities adversely affected by unfair and unlawful competition arising out of the refusal of federal tax authorities to enforce Sec- tions 501(c) (3) and 511(a) (1) of the Internal Rev- enue Code must, in their complaint, identify specific lost customers in order to establish “injury in fact” for standing purposes. STATUTES INVOLVED The statutory provisions involved in this proceeding are Section 501(c)(3) of the Internal Revenue Code of 1954, as amended by Pub. L. No. 94-455, §§ 1307(d) (1) (A), 1813(a), 90 Stat. 1727, 1730 (Oct. 4, 1976), and Sections 511(a) (1), 512(a)(1) and 513(a) of the Internal Revenue Code of 1954, as amended, 26 U.S.C. §§ 511(a) (1), 512(a) (1), 518(a) (1970). Those sections of the Internal Revenue Code appear as Appendix H to this petition. STATEMENT OF THE CASE Petitioner American Society of Travel Agents, Inc. (“ASTA”) is a not-for-profit trade association which rep- resents more than 8,000 travel agents located throughout the United States. The other petitioners herein are twelve individual travel agency members of ASTA which, * ASTA’s membership has increased dramatically in recent years from the “more than 4,000” members indicated in the complaint herein. See Appendix A, { 1, at 3a. 4 typical of the industry, are small independent businesses operating in local communities.* On July 19, 1974, petitioners instituted this action for injunctive and declaratory relief in the United States District Court for the District of Columbia, against the Secretary of the Treasury and the Commissioner of In- ternal Revenue (“respondents”). In a two-count com- plaint, petitioners sought to eliminate the unfair competi- tion of certain tax-exempt organizations which, with the specific approval of respondents, were taking unlawful advantage of their special tax-exempt status by engaging in extensive commercial travel programs—unrelated to their tax-exempt purposes—in direct competition with petitioners and other tax-paying travel agents. Petitioners’ first count alleged that the American Jew- ish Congress (“AJC”) and certain other organizations deemed by respondents to be tax-exempt under Section 501(c)(3) of the Internal Revenue Code of 1954, as amended, 26 U.S.C. § 501(c) (3) (1970),° were operating extensive commercial travel programs, in contravention of Section 501(c)(3) which limits such organizations exclusively to educational, literary, religious, charitable, 5 The travel agency petitioners in this action are: Vega Interna- tional Travel Service (Chicago, Illinois), Garber Travel (Brookline, Massachusetts), George Kronengold Travel Service (Miami, Flor- ida), Trade Wind Tours of Hawaii (San Francisco, California), Arnold Tours, Inc. (Boston, Massachusetts), Columbus Travel Serv- ice (Dorchester, Massachusetts), Fort Collins Travel Agency, Inc. (Fort Collins, Colorado), Platt World Travel Service (Lisle, Illi- nois), Rex Travel Organization, Inc. (Chicago, Illinois), Beverly Hills Travel Bureau, Inc. (Beverly Hills, California), George Kronengold Travel Service, Inc. (New York, New York) and Farr Tours (Miami Beach, Florida). Appendix A, {ff 2-13, at 3a-4a. * Section 501(c)(3) was further amended in 1976, as reflected in Appendix H hereto. The 1976 amendments, however, are not germane to this action. See Pub. L. No. 94-455, §§ 1307(d)(1)(A), 1313(a), 90 Stat. 1727, 1730 (Oct. 4, 1976). ee 5 scientific or other specifically enumerated purposes.’ Peti- tioners further alleged that respondents had unlawfully permitted the AJC and other such organizations to main- tain their tax-exempt status despite the large amounts of unrelated travel business income which they receive each year.’ The complaint further alleged that, because of their tax-exempt status and other privileges flowing from such exempt status, the AJC and other similar organiza- tions were able to and did in fact compete unfairly with the petitioners. and other tax-paying travel agents by offering lower-cost travel programs than they otherwise would have been able to offer.’ The complaint alleged that the petitioner travel agents and other tax-paying travel agents were losing revenue as a result of respondents’ failure to revoke the exempt status of the AJC and other similarly situated tax-exempt organizations.” The second count of petitioners’ complaint alleged that respondents had refused to enforce, assess, and levy the unrelated business income tax imposed by Section 511 (a) (1) of the Internal Revenue Code of 1954, as amended, 26 U.S.C. §511(a)(1) (1970), on the AJC and other tax-exempt organizations which engage in commercial travel programs unrelated to their exempt purposes.” The second count specifically alleged that the predeces- sors in office of the respondent Commissioner of Internal Revenue had issued a Technical Advice Memorandum on May 15, 1970, advising that the AJC was not liable for the unrelated business income tax on its substantial travel income. The second count further alleged that, as a * Appendix A, {[{] 20-21, 23, at 5a-6a. 8 Appendix A, {| 22-23, at 6a. * Appendix A, {| 24, at 7a. 10 Appendix A, {f 24-26, at 7a. 11 Appendix A, { 28, at 7a. 12 Appendiz A, {] 29, at 7a-8a. 6 result of this specific determination and others similar to it, the AJC and other tax-exempt organizations have escaped the payment of taxes, required by law to be im- posed on the unrelated business income of tax-exempt organizations, thereby subjecting tax-paying competitors to unlawful and unfair competition.” Petitioners’ complaint prayed that the district court issue an order (i) requiring respondents to withdraw rulings granting tax-exempt status to the AJC and other organizations substantially involved in unrelated travel programs and permanently enjoining respondents from granting tax-exempt status to such organizations in the future; (ii) requiring respondents to undertake an ap- propriate investigation into the activities of the AJC and to take such action as necessary to comply with the law; (iii) requiring the respondent Commissioner of In- ternal Revenue to withdraw the Technical Advice Memo- randum of May 15, 1970, which declared that the AJC was not liable for the payment of the unrelated business income tax on its income from travel operations, and to withdraw other like rulings; and (iv) granting declara- tory relief.** In a memorandum decision issued on May 23, 1975, the district court dismissed petitioners’ complaint for failure to state a claim upon which relief can be granted.” Petitioners appealed from that order to the United States Court of Appeals for the District of Columbia Cir- cuit. On June 15, 1976, the court of appeals, sua sponte, ordered the parties to submit supplemental memoranda addressing the question of whether petitioners have stand- ing to maintain this action in light of this Court’s decision 18 Appendix A, {| 30-32, at 8a. 144A ppendix A, at 8a-9a. 15 Appendix B. tine tatters = ow 7 in Simon v. Eastern Kentucky Welfare Rights Organiza- tion, 426 U.S. 26 (1976). Such memoranda were sub- mitted on or about July 15, 1976. On September 15, 1977, the court of appeals affirmed the dismissal of this case on the ground that petitioners lacked standing to maintain the action. Petitioners’ timely petition for rehearing and suggestion for rehearing en bane were denied on November 1, 1977.” REASONS FOR GRANTING THE WRIT I. The Court of Appeals Has Effectively Foreclosed the Only Legal Forum Available to Tax-Paying Business Entities Adversely Affected by Unfair Competition Arising Out of the Unlawful Refusal of Federal Tax Authorities to Enforce Sections 501(c)(3) and 511(a)(1) of the Internal Revenue Code. In So Doing, the Court of Appeals Has Decided an Important Question of Federal Law Which Has Not Been, But Should Be, Settled by This Court. Dissenting from the court’s ruling below “that a tax- payer suffering competitive injury lacks standing to chal- lenge tax rulings applicable to a third party,” "* Chief Judge Bazelon observed: The majority . . . states with admirable candor that the case “presents a threshold issue of standing to sue reminiscent of Justice Stewart’s observation, concurring in Simon v. Eastern Kentucky Welfare Rights Organization, et al., 426 U.S. 26, 46 (1975), that he could not ‘imagine a case, at least outside the First Amendment area, where a person whose own tax liability was not affected ever could have stand- ing to litigate the federal tax liability of someone 16 Appendix C, at 18a, 22a, 27a-28a. 17 Appendices E, F. 18 Appendix C, at 30a (Bazelon, C.J., dissenting) . 8 else.’” [Appendix C, at 18a.] Although the opinion does not directly address this question, it constructs a constitutional standard of injury in fact that would effectively preclude taxpayer suits claiming competi- tive injury.” In ruling as it did, the majority indicated that it felt constrained by this Court’s ruling in Simon v. Eastern Kentucky Welfare Rights Organization, supra, to dismiss petitioners’ complaint.” The majority reasoned: ... [T}he lower cost of the tour packages offered by the AJC and other tax-exempt organizations may well be attributable at least in significant part to the use of volunteer labor or the willingness to accept lower profits than would commercial travel agents. More- over, even if appellants were to prevail in this suit, members of § 501(c) (3) organizations might for a variety of reasons continue to prefer the travel pro- grams operated by their own organizations. Alter- nately, such organizations might shift to tour pack- ages whose religious or educational orientation would be more readily apparent. A third possibility is that travel by members of § 501(c) (3) organizations would simply decline. If any of these consequences, or some combination of them, ensued from a decision favorable to appel- lants, private travel agents would enjoy no gain whatever from their successful litigation. This is pre- cisely the sort of situation in which the Supreme Court failed to find standing in Eastern Kentucky.” If the ruling of the majority below is permitted to stand, then any complaint filed by any plaintiff suing as an ad- versely affected competitor which alleges that favorable and unlawful tax treatment of a third party has caused 19 Jd. n.1. 20 See Appendix C, at 18a, 22a, 27a-28a. 21 Appendix C, at 25a. ee 8 er ee cette wok. Deena, «5 4 Le hen 9 him to lose customers will be vulnerable to summary dismissal. In Linda R. S. v. Richard D., 410 U.S. 614, 617 (1973), and again in Simon v. Eastern Kentucky Welfare Rights Organization, supra, this Court has held that “federal plaintiffs must allege some threatened or actual injury resulting from the putatively illegal action before a federal court may assume jurisdiction.” 426 U.S. at 41. Petitioners in the instant case have alleged that they have suffered competitive injury, including loss of cus- tomers, as a result of the unlawful refusal of respond- ents to enforce Sections 501 (c) (3) and 511(a) (1) against the AJC and other similar organizations. They are pre- pared to prove that allegation. The court of appeals, how- ever, has ruled that, because it can conceive of factors— other than favorable tax treatment—which might bestow some competitive advantage upon such organizations, peti- tioners’ complaint should be dismissed. Any competitor’s complaint, if subjected to such wholesale judicial specula- tion, would fall at the hands of an imaginative court. The ruling of the court of appeals is not a fair applica- tion of the “causality” element of the “injury in fact” test for purposes of legal standing.” It is, rather, an absolute foreclosure of the only legal forum available to tax-paying business entities adversely affected by the failure of federal tax authorities to enforce Sections 501(c) (3) and 511(a) (1) of the Internal Revenue Code against tax-exempt organizations which engage in exten- sive business enterprises unrelated to their tax-exempt purposes. 22 Engaging in similarly unfounded speculation as to what might transpire in the event petitioners were to prevail herein, the court of appeals also misconstrued and misapplied the “redressability” ele- ment of the “injury in fact” test. See note 21 supra and accompany- ing text; notes 36-37, 39 infra and accompanying text. 10 In Eastern Kentucky, this Court specifically stated: “We do not reach . . . the question of whether a third party ever may challenge IRS treatment of another... .” 426 U.S. at 37. The court of appeals below has reached and decided that ‘question, at least with respect to ad- versely affected competitors. The ramifications of that decision are ominous indeed,” and should not be permitted to obtain in the absence of specific consideration by this - Court. II. The Decision of the Court of Appeals Is in Conflict With a Decision of the United States Court of Appeals for the First Circuit on the Issue of Standing. In Rental Housing Ass’n v. Hills, 548 F.2d 388 (1st Cir. 1977), the United States Court of Appeals for the First Circuit was called upon to determine the standing vel non of a trade association of landlords which sought to challenge prospectively an award by the Department of Housing and Urban Development of financial assist- ance to a project for the conversion of a factory into low-income housing for the elderly. In its complaint, the plaintiff trade association alleged (i) that the proposed award of funding would reduce the amount of funds available for existing-housing subsidies in the future and (ii) that its members would “lose tenants to the new 28 For example, if permitted to stand, the decision below will render a wide range of revenue-losing IRS determinations—other- wise properly reviewable—beyond the reach of judicial scrutiny. Where, such as here, the only persons (other than taxpayers gen- erally) adversely affected by such rulings are competitors of an improperly favored person or organization, the courts will be help- less to remedy such administrative wrongs. Moreover, the ruling below blatantly thwarts the express congres- sional purpose of protecting competitors such as the petitioners herein from unfair competition at the hands of tax-exempt organi- zations. See H.R. Rep. No. 2319, 81st Cong., 2d Sess. 36 (1950): S. Rep. No. 2375, 81st Cong., 2d Sess. 21-31 (1950). See also 26 C.F.R. § 1.513-1(b) (1977). ee ct RL. eed Pe ae i BOLI Ole ee We te ae. ee ee ll project and thereby suffer competitive harm.” /d. at 389. The plaintiff association’s standing was upheld specifically on the basis of the allegation of prospective competitive injury. The court held: ... [W]e think the allegation of competitive injury sufficient [to satisfy the “injury in fact” test]. While the . . . project is not yet completed, and hence spe- cific proof of competitive injury is not possible, it could hardly be thought that administrative action likely to cause harm cannot be challenged until it is too late... . We see no insurmountable obstacles to proof of the likelihood that Rental Housing Associa- tion’s members will lose tenants to the . . . project. Defendants have cited, and we have found, no au- thority for the proposition that competitive harm is an insufficient allegation of injury in fact. Quite the contrary, the cases finding allegations of competitive injury sufficient are legion... .** In the instant case, petitioners alleged not only that they would in the future suffer competitive injury as a result of respondents’ actions, but indeed that they had suffered and were then suffering such injury, including loss of customers.** Notwithstanding those allegations, the majority below held: . . . [A]ppellants [petitioners herein] have not indi- cated with sufficient specificity either the manner in which their alleged injury occurred or the nature of that injury. Appellants point to no prospective cus- tomers who spurned the services of ASTA members because of appellees’ [respondents’] allegedly in- equitable tax treatment of § 501(c) (3) organiza- tions. Nor do appellants identify tour package pur- chasers who in fact patronized the AJC or some other tax-exempt organization, but who might legitimately ** 548 F.2d at 389-90 (emphasis added). ** Appendix A, {fj 24, 26, 27, 30, 32, at 7a-8a. 12 be expected to do business with a private travel agent in the event appellees enforced the relevant tax code provisions according to appellants’ recommenda- tions... .*° Characterizing petitioners’ allegations of competitive in- jury as “too speculative to support standing,” *’ the court of appeals dismissed their complaint.” The ruling of the court of appeals in this proceeding stands in direct conflict with the decision of the Court of Appeals for the First Circuit in the Rental Housing case. That conflict—which has arisen in the face of this Court’s rulings in Association of Data Processing Service Organizations, Inc. v. Camp, 397 U.S. 150 (1970), and Simon v. Eastern Kentucky Welfare Rights Organization, supra—should be resolved by this Court.” III. The Decision of the Court of Appeals Conflicts With Applicable Decisions of This Court on the Issue of Standing. In Association of Data Processing Service Organiza- tions, Inc. v. Camp, 397 U.S. 150 (1970), this Court upheld the legal standing of certain vendors of data 26 Appendix C, at 22a. 27 Td. ** Referring to the majority’s several hypotheses as to possible reasons for the low cost of travel packages sold by tax-exempt organizations and as to what might happen if petitioners prevailed herein, Chief Judge Bazelon expressed the opinion that +e it is the majority, not the appellants [petitioners], who is engaging in speculation. The economic basis of appellants’ in- jury is straightforward .. . [and] compelling... . Appendix C, at 39a (Bazelon, C.J., dissenting). ** The ruling below is also in direct conflict with at least two deci- sions rendered by other panels of the Court of Appeals for the Dis- trict of Columbia Circuit since this Court’s decision in the Eastern Kentucky case. See Tax Analysts and Advocates v. Blumenthal, supra, Appendix G, at 77a-78a; National Aes'n of Neighborhood Health Centers, Inc. v. Mathews, 551 F.2d 321 (D.C. Cir. 1976). “ ee BO ere OO et nee eit el ee om oS ee 13 processing services to challenge an interpretive ruling of the Comptroller of the Currency which suggested that national banks may, consistent with the National Bank Act, offer data processing services to banks and bank customers.” Likewise, in Arnold Tours, Inc. v. Camp, 400 U.S. 45 (1970), the Court upheld the standing of travel agents to challenge a similar ruling by the Comptroller relating to travel services. And, as Chief Judge Bazelon pointed out in his dissent below, this Court in Investment Co. Institute v. Camp, 401 U.S. 617 (1971), upheld the standing of several investment companies in a similar action on the basis of allegations of competitive injury which “were no more specific tha[n] those of the [peti- tioners] in this case.” ™ Data Processing and its progeny stand firmly for the proposition that competitive injury, suffered as a result of unlawful third-party competition authorized by an administrative ruling, constitutes “injury in fact” suffi- cient to invest the adversely affected competitor with standing to challenge that ruling.” See also Simon v. 30 The Court reaffirmed the principle that the constitutional dimen- sion of the standing issue “is related only to whether the dispute sought to be adjudi- cated will be presented in an adversary context and in a form historically viewed as capable of judicial resolution.” 397 U.S. at 151-52, quoting Flast v. Cohen, 392 U.S. 83, 101 (1968). It expressly characterized Data Processing as “a competitor’s suit,” and specifically held that the petitioners had satisfied the “injury in fact” test. 397 U.S. at 152 (emphasis in original). 31 Appendix C, at 4la (Bazelon, C.J., dissenting). 82 Similarly, as the Court of Appeals for the First Circuit noted in Rental Housing Ass'n v. Hills, supra: Injury in fact has [also] been found where governmental agen- cies .. . engaged in activities which compete with the plaintiff’s business, Hardin v. Kentucky Utilities Co., 390 U.S. 1, 88 S.Ct. 651, 19 L.Ed.2d 787 (1968); P.A.M. News Corp. v. Hardin, 142 U.S.App.D.C. 227, 440 F.2d 255 (1971), awarded government contracts to a competitor, Constructores Civiles de Centro- 14 Eastern Kentucky Welfare Rights Organization, supra, 426 U.S. at 45 n.25. The court of appeals brushed aside petitioners’ re- liance upon this well-established line of precedent with the observation that “the rather cryptic phrasing of Data Processing . . . provides little guidance as to the precise nature of the requirements which must be satisfied before competitor standing can be sustained.” * The court then attempted, without elaboration, to dis- tinguish Data Processing on the ground that it “was not a tax case.” ** The mere fact that the Internal Revenue Code is involved here, however, certainly does not render the instant action “a tax case.” This case, like Data Processing, “is a competitor’s suit,” * involving a chal- lenge to an improper administrative authorization of illegal competition by persons subject to the administra- tors’ jurisdiction. Petitioners herein are not suing as taxpayers, or as representatives of the general public, or as guardians of some general public interest. They are suing because they themselves are being injured by the wrongful competition made possible by the actions of respondents. america v. Hannah, 148 U.S.App.D.C. 159, 459 F.2d 1183 (1972), or entered into a beneficial relationship with a competi- tor which enhanced its competitive position vis-a-vis the plain- tiff on nongovernmental business, Ray Baillie Trash Hauling, Inc. v. Kleppe, 477 F.2d 696 (5th Cir. 1973) (alternate holding), cert. denied, 415 U.S. 914, 94 S.Ct. 1410, 39 L.Ed.2d 468 (1974). 548 F.2d at 390. 33 Appendix C, at 26a. Contra, id. at 46a (Bazelon, C.J., dissent- ing); Tax Analysts and Advocates v. Blumenthal, supra, Appendix G, at 77a-78a; Rental Housing Ass'n v. Hills, supra, 543 F.2d at 390. ** Appendix C, at 27a. * This Court, distinguishing Data Processing from Flast v. Cohen, 392 U.S. 83 (1968), stated: “Flast was a tarpayer’s suit. The present is a competitor's suit.” 397 U.S. at 152 (emphasis in original). — ee 4 2 ee De memeber see | oe ae SND Ra LES. ACCOM Mie Athy Ril itt D.C gt Bhs BIEN ABP. Bt ye a. — ies at at 15 Finally, the majority below attempted to distinguish Data Processing on the ground that the relief sought in that case, if granted, would have completely barred na- tional banks from the data processing business, whereas, even if petitioners were to prevail herein, “the AJC and other such groups will clearly remain free to pursue their travel businesses ... .”* This attempted distinction either ignores or misconstrues petitioners’ cause of ac- tion. Petitioners do not complain about the fact that the AJC and similar organizations conduct travel businesses. Their complaint, rather, is directed at the illegal competi- tive advantage conferred upon such businesses by im- proper administrative rulings. Reversal of those adminis- trative rulings would, eo instante, eliminate the illegality complained of herein.” Here, as in Data Processing, petitioners have alleged that improper administrative action has caused them economic injury in fact “directly traceable to the action of the [respondent] federal official[s].” See Simon v. Eastern Kentucky Welfare Rights Organization, supra, 426 U.S. at 45 n.25.* In ruling to the contrary, the court of appeals has applied standards fundamentally in con- flict with principles previously articulated by this Court.” 36 Appendix C, at 27a. 37 Moreover, as Chief Judge Bazelon noted in dissent, the major- ity’s purported distinction “goes only to the extent of the injury suffered, not to its speculative or hypothetical nature.” Appendix C, at 45a-46a (Bazelon, C.J., dissenting). See also Tax Analysts and Advocates v. Blumenthal, supra, Appendix G, at 77a-78a. 38 See also Appendix C, at 45a (Bazelon, C.J., dissenting) . %® The majority, while professing adherence to this Court’s ruling in Eastern Kentucky, has in fact created a new, virtually insur- mountable barrier to standing which is clearly unwarranted by that decision. In Eastern Kentucky, this Court held: 16 IV. The Court of Appeals Dismissed Petitioners’ Complaint Without Accepting as True the Allegations of That Complaint, Without Construing the Complaint in Favor of Petitioners, and Without Providing Petitioners an Opportunity to Supply Further Particularized Allega- tions of Fact in Support of Their Standing to Sue. In So Doing, the Court of Appeals Has So Far Departed From the Accepted Course of Judicial Proceedings as to Call for an Exercise of This Court’s Power of Supervision. This case came to the court of appeals from a judg- ment of the district court dismissing petitioners’ com- plaint, on its merits, for failure to state a claim upon which relief can be granted. The court of appeals, sua sponte, ordered the parties to submit memoranda of law discussing the issue of standing in light of this Court’s decision in Simon v. Eastern Kentucky Welfare Rights Organization, supra. On the basis of those memoranda, the court of appeals affirmed the dismissal of the case, not on its merits, but on the wholly different ground that petitioners lacked standing to maintain this action.“ The 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. 426 U.S. at 38. As noted previously, the wrongful and injurious competition of which petitioners complain is clearly and immediately redressable by a favorable judicial ruling. See note 37 supra and accompanying text. Unlike the situations in Eastern Kentucky and Linda R. S. v. Richard D., 410 U.S. 614 (1973)—where the relief sought may or may not have removed the alleged deprivations—the benefit which petitioners here seek to attain is not dependent upon some speculative coercive effect which the requested ruling might have upon the affected third parties. Here, the ruling sought will, in and of itself, remove the illegal competitive advantage of the subject tax-exempt organizations, regardless of how those organiza- tions react thereto. By its failure to recognize this fact, the court of appeals has undermined the principles of legal standing devel- oped by this Court. *° See note 16 supra and accompanying text. —— se 17 appelate court’s summary disposition of this case was manifestly improper. In Warth v. Seldin, 422 U.S. 490 (1975), this Court ruled that: For purposes of ruling on a motion to dismiss for want of standing, both the trial and reviewing courts must accept as true all material allegations of the complaint, and must construe the complaint in favor of the complaining party.” The Court went on to state that a complaint should be dismissed for want of standing only after the plaintiff has been afforded an opportunity to supply “further particularized allegations of fact deemed supportive” of standing.* Clearly, the majority below did not “accept as true all material allegations of the complaint” and did not “con- strue the complaint in favor of the [petitioners].” To the contrary, it ignored specific allegations of competitive in- jury (including loss of customers), and engaged freely in speculation as to possible explanations for the competitive advantages of tax-exempt organizations and the possible impact of the relief sought by the petitioners. It denied petitioners any opportunity—by way of affidavit, discov- ery, or evidentiary hearing—to make a particularized showing of economic injury. The proper course of judicial consideration of standing issues was clearly charted by this Court in Warth v. Seldin, supra. The summary and extreme departure by the court of appeals from that course in this proceeding warrants an exercise of this Court’s plenary power of supervision. #1 422 U.S. at 501. *2 Id. at 501-02. See also Jenkins v. McKeithen, 395 U.S. 411, 421- 22 (1969); Conley v. Gibson, 355 U.S. 41, 45-46 (1957). 18 CONCLUSION For the foregoing reasons, the petition for a writ of certiorari should be granted. Respectfully submitted, PIERRE J. LAFORCE 1735 New York Avenue, N.W. Washington, D.C. 20006 Attorney for Petitioners Of Counsel: WILKINSON, CRAGUN & BARKER PAUL S. QUINN EDWARD M. FOGARTY January 30, 1978 APPENDICES la APPENDIX A Petitioners’ Complaint IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA Civil Action No. 74-1081 [Filed Jul. 19, 1974] THE AMERICAN SOCIETY OF TRAVEL AGENTS, INC. 360 Lexington Avenue New York, New York 10017 (212) 661-2424 VEGA INTERNATIONAL TRAVEL SERVICE 201 North Wells Street Chicago, Illinois 60606 (312) 332-7211 GARBER TRAVEL 1406 Beacon Street Brookline, Massachusetts 02146 (617) 566-2100 GEORGE KRONENGOLD TRAVEL SERVICE 540 Arthur Godfrey Road Miami, Florida 33140 (805) 531-0455 TRADE WIND TOURS OF HAWAII 209 Post Street Suite 808 San Francisco, California 94108 (415) 392-6740 ARNOLD Tours, INC. 79 Newbury Street Boston, Massachusetts 02116 (617) 536-0981 COLUMBUS TRAVEL SERVICE 15-17 Stoughton Street Dorchester, Massachusetts 02125 (617) 288-3040 2a Fort COLLINS TRAVEL AGENCY, INC. First National Tower Building Fort Collins, Colorado 80521 (303) 481-5555 PLATT WORLD TRAVEL SERVICE 4726 Main Street Lisle, Illinois 60532 (312) 852-8050 REX TRAVEL ORGANIZATION, INC. One North La Salle Street Chicago, Illinois 60602 (312) 641-6633 BEVERLY HILLS TRAVEL BUREAU, INC. 9641 Sunset Blvd., Beverly Hills Hotel Beverly Hills, California 90210 (213) 271-2171 GEORGE KRONENGOLD TRAVEL SERVICE, INC. Hotel Penn Garden 7th Avenue & 31st Street New York, New York 10001 (212) PE 6-4822 FARR TOURS 2323 Collins Avenue Miami Beach, Florida 33139 (305) JE 1-5137 Vv. WILLIAM E. SIMON Secretary of the Treasury 15th and Pennsylvania Avenues, N.W. Washington, D.C. DONALD ALEXANDER, Commissioner Internal Revenue Service 1111 Constitution Avenue, N.W. Washington, D.C. 20224 iw Te aretha OM REL ritad is \ ste inh enc PB RPE Bb iw. Pe teem 3a COMPLAINT I. JURISDICTION This Court has jurisdiction pursuant to the Adminis- trative Procedure Act, 5 U.S.C. § 702 and § 703; 28 U.S.C. § 1331; 28 U.S.C. § 1340; 28 U.S.C. § 1361; 28 U.S.C. § 2201 and 28 U.S.C. § 2202. The amount in con- troversy exceeds $10,000 exclusive of interest and penal- ties. II. PARTIES 1. Plaintiff, American Society of Travel Agents, Inc. (ASTA), is a non-profit corporation organized and oper- ated under the laws of the State of New York. ASTA is a professional association of travel agents with more than 4,000 travel agent members in the United States, on whose behalf ASTA is acting in a representative capacity. 2. Plaintiff, Vega International Travel Service, is a tax-paying corporate entity organized and operated under the laws of the State of Illinois. 3. Plaintiff, Garber Travel, is a tax-paying corporate entity organized and operated under the laws of the State of Massachusetts. 4. Plaintiff, George Kronengold Travel Service, is a tax-paying corporate entity organized and operated under the laws of the State of Florida. 5. Plaintiff, Trade Wind Tours of Hawaii, is a tax- paying corporate entity organized and operated under the laws of the State of California. 6. Plaintiff, Arnold Tours, Inc., is a tax-paying corpo- rate entity organized and operated under the laws of the State of Massachusetts. 4a 7. Plaintiff, Columbus Travel Service, is a tax-paying corporate entity organized and operated under the laws of the State of Masschusetts. 8. Plaintiff, Fort Collins Travel Agency, Inc., is a tax- paying corporate entity organized and operated under the laws of the State of Colorado. 9. Plaintiff, Platt World Travel Service, is a tax-pay- ing corporate entity organized and operated under the laws of the State of Illinois. 10. Plaintiff, Rex Travel Organization, Inc., is a tax- paying corporate entity organized and operated under the laws of the State of Illinois. 11. Plaintiff, Beverly Hills Travel Bureau, Inc., is a tax-paying corporate entity organized and operated under the laws of the State of California. 12. Plaintiff, George Kronengold Travel Service, is a tax-paying corporate entity organized and operated under the laws of the State of New York. 13. Plaintiff, Farr Tours, is a tax-paying corporate entity organized and operated under the laws of the State of Florida. 14. Defendant, William E. Simon, is the Secretary of the Treasury with direct responsibility for the adminis- tration of Federal income tax laws. 15. Defendant, Donald Alexander, is the Commissioner of Internal Revenue who is responsible for the assess- ment, levy and collection of federal taxes and various duties and responsibilities with regard to enforcement of the Internal Revenue Code of 1954, as amended, 26 U.S.C. § 1, et seq. 16. The agency plaintiffs are tax-paying travel agents who earn their livelihood through the sale of transporta- Ped se 6 BO eR oR gee red ok Rint oe 6 Eg ap 5a tion, foreign and domestic tours and through arranging various other travel accommodations. 17. The commissions received by the agency plaintiffs on transportation sales are set by traffic conferences such as the Air Traffic Conference, the International Air Traf- fic Conference, the Transatlantic Steamship Passenger Conference and others. These conferences are regulated by the Civil Aeronautics Board and the Federal Maritime Commission, respectively. 18. The agency plaintiffs sell domestic and interna- tional inclusive tours, that is, a “travel package”, in which transportation, accommodations, entertainment and frequently meals are sold together for an inclusive price. Plaintiffs receive commissions for travel and land por- tions of the tour. Such commissions constitute a substan- tial portion of the income of the agency plaintiffs and other travel agents. Ill. COUNT I 19. Tax-paying travel agents must compete with ex- tensive travel programs operated by organizations which are exempt from federal income tax, pursuant to specific Code provisions, including 26 U.S.C. § 501(c) (3). 20. Section 501(c) (3) and the implementing Internal Revenue Service regulations are very explicit in requiring that, to qualify for an exemption, an organization must be organized and operated exclusively for one or more of the purposes enumerated in the section, namely for edu- cational, literary, religious, charitable or scientific objec- tives or for the purpose of testing for public safety or preventing cruelty to children or animals. The operation of commercial travel programs is not among the enumer- ated purposes set forth in that section. 21. Notwithstanding the statutory terms of § 501(c) (3), and contrary to them, certain organizations which 6a claim to be entitled to tax-exempt status have engaged, and are engaged in the providing of commercial travel service. 22. Contrary to law, the defendants and their prede- cessors in office have ruled that organizations are entitled to federal tax exempt status under § 501(c) (3) and have allowed organizations to operate under the umbrella of the federal tax exemption even when they do not meet the statutory requirements for such exemption because of the large amounts of travel income which they receive each year. Further, defendants and their predecessors in office have ruled that contributions to such organizations are deductible from the taxable income of their contribu- tors pursuant to § 170 of the Code and have caused such organizations to be listed in the IRS Annual Cumulative List of Organizations Described in Section 170(c) of the Internal Revenue Code of 1954, which list is published and distributed to the public as a guide to organizations, contributions to which are deductible from the donors’ federal taxable income. 23. Among others, defendants have allowed the Amer- ican Jewish Congress, Inc., a non-profit corporation or- ganized under the laws of the State of New York, to maintain under their auspices and with their express approval, exemption from federal income tax, pursuant to §501(c) (3) of the Code although defendants know that said organization has operated extensive commercial travel programs in violation of the express provisions of the Code under which defendants have ruled the organ- ization to be exempt. Plaintiffs allege and believe that in violation of their duties of office, defendants have failed and unless ordered by court, will continue to refuse to levy, assess, and collect appropriate federal income taxes from said organization and others similarly situ- ated. ie a e Ta 24. Because of this tax exempt status and the other privileges which flow from it, such as reduced-rate post- age, the above-named organization and others are able to offer lower-cost travel programs than plaintiffs and other tax-paying travel agents. Plaintiffs allege and be- lieve that numerous persons who would otherwise use plaintiffs’ services and the services of other tax-paying travel agents are instead induced by the extensive mail solicitations and lower costs and take business to tax- exempt organizations. 25. Further, plaintiffs and other tax-paying travel agents are being forced to bear a greater share of the public tax burden by virtue of defendants’ actions in al- lowing tax-exempt status and deduction of contributions to organizations which are substantially engaged in com- merce and do not legally qualify for such tax benefits. 26. As a direct result of defendants’ action, plaintiffs and other tax-paying travel agents are losing revenue and suffering other damages and being denied the right to equal and impartial treatment under the law guaran- teed by the fifth amendment to the Constitution. III. COUNT II 27. The allegations of paragraphs 1-27 are realleged and incorporated into this count. 28. Plaintiffs further allege that in violation of law, defendants have refused to enforce, assess and levy the unrelated business income tax imposed by § 511, et. seg. of the Code on tax-exempt organizations engaged in the unrelated conduct of travel enterprises, including specifi- cally the above-named organization. 29. Plaintiffs allege and believe that defendants’ prede- sessors in office issued a ruling dated May 15, 1970 to the above-named organization which advised the organization 8a that it was not liable for unrelated busines income tax on its substantial travel income. 30. The issuance of this ruling and the failure of de- fendants to enforce these provisions and collect the appro- priate tax results in tax-exempt organizations engaging in travel having a competitive advantage over tax-paying travel agents and deprives plaintiffs of the benefits of the laws specifically enacted to protect tax-paying competitors of tax-exempt organizations. 31. Further, plaintiffs allege and believe that defend- ants and/or their predecessors in office have issued rulings similar to that set out in paragraph 30, to other tax exempt organizations competing with plaintiffs. 32. The defendants’ failure to enforce the laws en- trusted to their administration have resulted in the above- named organization, and other tax-exempt organizations having lower business costs and being able to compete for travel business unfairly with the plaintiffs who must pay the full measure of federal, state and local taxes on their income and who operate in the same travel markets as do these organizations. Further, defendants’ discrimi- natory taxation is in derogation of plaintiffs’ right to due process under the fifth amendment to the Constitution. WHEREFORE, the plaintiffs demand a judgment as follows: 1. An order permanently enjoining the defendants from granting organizations substantially involved in un- related travel programs, rulings exempting them from federal income tax and giving advance assurance of de- ductibility of contributions to such organizations and re- quiring withdrawal of such rulings granted to such or- ganizations, specifically the above-named organization. 2. In the alternative, as regards the above-named and similarly situated organizations, an order requiring the 4 } ’ . 4 : M € 9a defendants to make an appropriate investigation into the activities of the said organization and to take such action as is necessary to comply with the law. 8. An order requiring defendant Commissioner to withdraw the ruling of his predecessor in office to the effect that the above-named organization is not liable for the payment of the unrelated business income tax on its income from travel operations to withdraw other such rulings and to assess and collect said tax from this and other similarly situated organizations. 4. A judgment of the Court declaring that the large- scale travel activities are unrelated to the exempt pur- poses enumerated in § 501(c) (3) of the Code. 5. Such other relief as the Court may deem necessary and appropriate. Respectfully submitted, By: PAu. S. QUINN PATRICIA L. BROWN Attorneys for Plaintiffs 1735 New York Avenue, N.W. Washington, D.C. 20006 Of Counsel WILKINSON, CRAGUN & BARKER PIERRE J. LA FORCE 6 te I eT Nine et Ye ae ted ee BR oe lla APPENDIX B Memorandum Opinion of the United States District Court for the District of Columbia UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA Civil Action No. 74-1081 AMERICAN SOCIETY OF TRAVEL AGENTS, INC., ET AL., Plaintiffs, Vv. WILLIAM E. SIMON AND DONALD ALEXANDER, Defendants. MEMORANDUM-ORDER This matter is before the Court on defendants’ motion to dismiss and plaintiffs’ opposition thereto. Plaintiffs are a trade association of travel agencies and twelve incor- porated travel agencies. Defendants are the Secretary of the Treasury and the Commissioner of the Internal Revenue Service (hereinafter referred to either as “De- fendants” or “IRS”). Plaintiffs challenge the IRS policy of granting tax exempt status to organizations which operate extensive travel programs for their members. Plaintiffs also chal- lenge determinations by IRS not to levy the “unrelated business income tax” on income derived from travel en- terprises of tax-exempt organizations. Plaintiffs complain that these determinations enable tax-exempt organizations to offer lower-cost travel programs than can be offered by commercial travel agencies, thereby damaging plain- tiffs’ business. 12a Plaintiffs seek an order enjoining IRS from granting taX-eXempt status to organizations which are substan- tially invelved in unrelated travel programs. [In the ai- vernative, plaintiffs seek an order requiring IRS to in- vestigate tax-exempt organizations which have travel pro- grams to see whether they qualify for tax-exempt status. Additionally, plaintiffs seek an order requiring [RS to withdraw its rulings which do not levy the “unrelated Dusimess tax” on travel income received by certain tax- exempt organizadens; an order declaring that large-scale travel activities are unrelated to the exempt purposes of $ 501: ec! of the Internal Revenue Code (hereinafter, “the Code”: and such other relief as the Court deems ap- vrupriate. Defendants have moved to dismiss om grounds that ‘Nese issues are not justiciable, that plaintiffs lack stand- ‘mg to sue, amd that the action is barred by the Anti- Imjunetion Statute of the Code, the Tax Exception to the Declaratory Judgments Act.* and by the doctrine of Sovereign Immunity. For the reasoms stated below, the -ourt grants defendants’ motion to dismiss on the ground Mt nenjustictabality. L Plaintiffs rst count alleges that. contrary *o law. (RS as granted tax-exempt status under { 501l:c) 3 2§ the Code to organizations that do not meet che statu- ‘ory requirements for suc&@ exemptions because of the arge amounts of income they receive each year from their cruvei programs. Seenen Wie: 3 exempts from income ‘taxation or- cyamizacions formed and operated exciusiveiy for religrous, charitable. scientific. 7est- mg tor pubiie safety. literary. or educational pur- % U.S.C. § 7422. 3B S.C. § 21. ee a 13a poses, or for the prevention of cruelty to children or animals. Plaintiffs contend that since travel is not included as an exempted purpose, any organization which conducts travel programs for its members is ipso facto excluded from tax-exempt status under § 501 .¢)(3). Plaintiffs admit that some travel activity is permissible for tax- exempt organizations. They state that they do not ob- ject to weekend camp-outs by the Girl Scouts. But they do object to the 392 foreign tours sponsored in 1974-75 by the American Jewish Congress, a tax-exempt charity. Apparently it is the size of the travel program offered by an organization which plaintiffs believe should be the key in determining whether that organization qualifies for tax-exempt status. Defendants respond that according to the Code it is not the size of a travel program but the purpose of the organization offering the travel program which is the key to determining its tax status. Section 501(c) (3), supra, specifically states that tax-exempt status is to be deter- mined on the basis of an organization’s “purposes.” Fur- thermore, sections 511-513 of the Code levy a tax on the “unrelated business taxable income” of an otherwise tax- exempt organization. This unrelated business tax demon- strates that commercial activity in and of itself does not destroy the tax-exempt status of an organization if that organization’s purpose qualifies it for exemption. Ac- cording to these sections of the Code, only if a tax-exempt organization’s commercial activity (“trade or business”) is not “substantially related . . . to the exercise or per- formance by such organization of its charitable, educa- tional, or other purpose or function constituting the basis for its exemption . . .” is the ineome derived by the organization from that activity taxable. Plaintiffs reply that an organization’s travel program can be so extensive that it becomes the raison d’etre of 14a the organization. They cite Contracting Plumbers Co- operative Restoration Corporation v. United States, 488 F.2d 684, 686 (2d Cir. 1974), cert. denied 419 U.S. 827, for the proposition that “the presence of a single sub- stantial non-exempt purpose precludes exempt status re- gardless of the number or importance of exempt pur- poses.” But even conceding that such a metamorphosis can occur in 2 given organization’s purpose, the determina- tion of whether it has occurred can be made only upon careful consideration of the particular facts and circum- stances of each case. Passaic United Hebrew Burial Association v. United States, 216 F. Supp. 500 (D.N.J. 1963); Samuel Friedland Foundation v. United States, 144 F. Supp. 74 (D.N.J. 1956). The Code will not per- mit a Court to issue an Order based on the premise that travel programs—even massive travel programs—are per se unrelated to an organization’s tax-exempt purpose. Plaintiffs’ first count fails to state a claim upon which relief can be granted. II. Plaintiffs’ second count alleges that, contrary to law, IRS has refused to enforce, assess, and levy the unre- lated business income tax imposed by sections 511-513 of the Code on tax-exempt organizations engaged in travel enterprises for their members. As an example plaintiffs point to IRS’s treatment of the American Jewish Con- gress (hereinafter “AJC”). IRS has determined that AJC tours are “substantially related” to its educational and religious purposes and therefore not subject to the tax on unrelated business income.* Plaintiffs seek a Court order to cause IRS to with- draw its rulings which concern the unrelated business 8 IRS Advice Memorandum, submitted with Defendants’ Motion to Dismiss, at 2. 15a tax on travel income received by tax-exempt organiza- tions. But according to the Code, these rulings turn on whether the tax-exempt organization’s travel activity is “substantially related” to its tax-exempt purpose(s). Plaintiffs are in effect asking the Court to substitute its discretion for that of IRS in determining which travel programs of tax-exempt organizations qualify for tax- exemption. As defendants point out, citing Langevin v. Chenango Court, Inc., 447 F.2d 296 (2d Cir. 1971), Hahn v. Gott- lieb, 430 F.2d 1248 (1st Cir. 1970), and Kletschka v. Driver, 411 F.2d 486 (2d Cir. 1969), this is the kind of review which courts have traditionally declined to un- dertake. The Court’s jurisdiction may be invoked to check a specific abuse of discretion by IRS. Eastern Kentucky Welfare Rights Organization v. Simon, —— U.S.App.D.C. ——, 506 F.2d 1278 (1974). But it may not be invoked to undertake continuing supervision of IRS’s administration of the Internal Revenue Code. Plaintiffs’ second count fails to state a claim upon which relief can be granted. ORDER In light of the foregoing, it is by the Court this 22nd day of May, 1975, ORDERED that defendants’ motion to dismiss be, and it is hereby, granted. /s/ Oliver Gasch Judge 17a APPENDIX C Majority Opinion of the United States Court of Appeals for the District of Columbia Circuit, Together with Dissenting Opinion of Chief Judge Bazelon UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT No. 75-1782 AMERICAN SOCIETY OF TRAVEL AGENTS, INC., ET AL., Appellants v. MICHAEL BLUMENTHAL, SECRETARY OF TREASURY, ET AL. Appeal from tie United States District Court for the District of Columbia (D.C. Civil 74-1081) Argued October 20, 1976 Decided September 15, 1977 Thomas J. Bacas, with whom Paul S. Quinn was on the brief, for appellants. Leonard J. Henzke, Jr., Attorney, Tax Division, De- partment of Justice, with whom Scott P. Crampton, As- sistant Attorney General, Earl J. Silbert, United States Attorney, and Ann B. Durney, Attorney, Tax Division, Department of Justice, were on the brief, for appellees. 18a Before BAZELON, Chief Judge, MCGOWAN and Ross, Circuit Judges. Opinion for the court filed by Circuit Judge MCGOWAN. Dissenting opinion filed by Chief Judge BAZELON.* McGowan, Circuit Judge: This is an appeal from the District Court’s dismissal of a complaint challenging the administration of the federal tax laws, not in relation to the tax liabilities of plaintiffs-appellants, but as to third parties not before the court. It thus presents a threshold issue of standing to sue reminiscent of Justice Stewart’s observation, concurring in Simon v. Eastern Kentucky Welfare Rights Organization, et al., 426 US. 26, 46 (1975), that he could not “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.” Because Eastern Kentucky—an obviously relevant case—was pending before the Supreme Court at the time this appeal was first scheduled for oral argument, we deferred our consideration to await the Supreme Court’s outcome. We now hold, by reference to the Supreme Court’s disposition of Eastern Kentucky, that there was a fatal want of standing here; and we affirm the District Court’s judgment for that reason. I Appellants, the American Society of Travel Agents (ASTA) and several individual travel agencies, complain of the failure of the federal tax authorities to assess taxes upon certain income received by the American Jewish Congress (AJC) and other organizations enjoy- ing tax exemption under § 501(c)(3) of the Internal *The dissenting opinion filed by Chief Judge Bazelon in this case is also to be filed as a dissent to No. 75-1304, Tax Analysts and Advocates Vv. Blumexuthal (D.C. Cir., June 15, 1977). 19a Revenue Code.' In particular, they object to the tax- exempt treatment accorded to income derived from the operation of travel programs by § 501(c) (3) organiza- tions. Appellants assert that such income should be taxed as so-called unrelated business income, i.e., income ob- tained from a business the conduct of which is “not substantially related . . . to the exercise of perform- ance . . . [of the] purpose or function constituting the basis” for an organization’s § 501 exemption. See I.R.C. § 513(a). Alternatively, appellants contend that the AJC and other exempt organizations have become so heavily involved in the travel business that their § 501(c) (3) exemptions should be eliminated altogether. By memorandum order, the District Court decided that neither count of appellants’ complaint stated a claim upon which relief could be granted. 36 A.F.T.R.2d 75- 5142 (D.D.C. May 23, 1975). It observed that allega- tions like those raised by plaintiffs would necessitate “careful consideration of the particular facts and cir- cumstances of each case.” Unwilling to embark upon such an enterprise, the court declared that its jurisdic- tion could “not be invoked to undertake continuing super- * I.R.C. §501(c) (3) (as amended, 1976) contains the following list of exempt organizations: Corporation, and any community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or to foster national or international amateur sports competition (but only if no part of its activities involve the provision of athletic facilities or equipment), or for the pre- vention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private share- holder or individual, no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation (except as otherwise provided in sub- section (h)), and which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of any candidate for public office. vision of IRS’s administration of the Internal Revenue Code.” The District Court’s reluctance to become embroiled, at the instance of taxpayers not directly involved, in the intricacies of tax law enforcement is both understand- able and far from irrational in terms of jurisdictional principles. However, we believe that, looking to the Su- preme Court’s opinion in Eastern Kentucky, dismissal of appellants’ action should be accomplished by resolution of the preliminary question of standing. We conclude that appellants have failed to demonstrate any actual injury resulting from appellees’ administration, with re- spect to third parties, of the statutory provisions govern- ing tax-exempt organizations. We find that appellants here, like the complainants in Eastern Kentucky, “have failed to carry [the] burden” of establishing “that, in fact, the asserted injury was the consequence of defend- ants’ actions, or that prospective relief will remove the harm.” 426 U.S. at 45, quoting Warth v. Seldin, 422 U.S. 490, 505 (1975). II Appellants’ basic grievance may be simply stated. Pri- vate travel agents earn their livelihood, primarily on a commission basis, through the sale of transportation and travei related services in both domestic and foreign mar- kets. One especially common function performed by travel agents is the arrangement of so-called tour packages, con- sisting of transportation, accommodations, meals, and a variety of other features. Such packages are sold together at one price, a portion of which the agent retains as a commission. Appellants allege that, in recent years, a number of tax-exempt organizations, including the AJC, have be- come increasingly involved in preparing tour packages and offering such packages to their members. Appellants 2la further allege that the tax-exempt status of these or- ganizations has enabled them to sell tour packages at prices lower than those which private travel agents must charge in order to earn a reasonable profit. Thus, so it is said, the AJC and other unspecified organizations have improperly used their tax exemptions to obtain an unfair competitive advantage in the sale of tour packages. Operation of an extensive travel program is, in appel- lants’ view, substantially unrelated to the religious charitable, scientific, or educational purposes which jus- tify many § 501(c)(3) exemptions, including that en- joyed by the AJC. Consequently, appellants urge that income from such a travel program should be subjected to the same tax treatment accorded to income earned by ordinary ASTA members. Somewhat less vigorously, ap- pellants maintain that if the § 501(c) (3) organizations at issue conduct travel businesses of significant size, then those organizations are no longer operated “exclusively” for religious, charitable, scientific, or educational pur- poses, and thereby forfeit their § 501 (c) (3) exemptions. We do not reach the merits, because we believe ap- pellants have not alleged any judicially cognizable “in- jury in fact,” and thus have failed te establisi their standing to bring this suit. “Injury in fact” has long been regarded as the foremost standing prerequisite, and the only one of constitutional dimension. See, e.g., United States v. SCRAP, 412 U.S. 669, 686-89 & n. 14 (1973): Sierra Club v. Morton, 405 U.S. 727, 738 (1972): and Flast v. Cohen, 392 U.S. 88, 99-101 (1968). Under Arti- cle III of the Constitution, federal courts are limited to the adjudication of cases and controversies. In order to guarantee the adversarial litigation posture demanded by this constitutional language, plaintiffs seeking to invoke oe fog t ena have been required to demon- ve suffered inj i me nat vy ~ some actual injury attribu- 22a llants claim to have been injured by ap- dunt tana administration of the Internal Revenue Code, and seek injunctive relief. However, appellants have not indicated with sufficient Specificity either the manner in which their alleged injury occurred or the nature of that injury. Appellants point to no prospective customers who spurned the services of ASTA members because of appellees’ allegedly inequitable tax treatment of § 501(c) (3) organizations. Nor do appellants identify tour package purchasers who in fact patronized the AJ or some other tax-exempt ype antl eo “ itimately be expected to do business wi ea a in the event appellees enforced the relevant tax code provisions according to appellants recommenda- tions. Instead, appellants complain in more abstract terms, alleging injury arising from appellees creation of an unfair competitive atmosphere, and seeking relief in the form of the more congenial competitive environment which would supposedly result from proper tax enforce- ment policy. We regard this sort of injury claim as too speculative to support standing under the circumstances presented here. We conceive that this disposition is not only sustained, but also largely mandated, by Eastern Kentucky. In that case, several indigents and organizations composed of indigents attacked a 1969 Revenue Ruling which revised the criteria under which non-profit hospitals might qual- ify for tax-exempt status as charitable institutions. : In particular, the challenged ruling eliminated the require- ment contained in a 1956 ruling to the effect that a non- profit hospital desirous of charitable classification “must be operated to the extent of its financial ability for those not able to pay for the services rendered.” Deletion of this language, argued the Eastern Kentucky plaintiffs, was directly responsible for several refusals by tax- exempt hospitals to provide needed services to indi- 23a viduals unable to pay a deposit or advance fee. Plain- tiffs further alleged that similar refusals could be ex- pected in the future if the offending Revenue Ruling was not changed. As indicated above, the Supreme Court held that “[s]peculative inferences are necessary to connect [plain- tiffs’] injury to the challenged actions . . . and “[mlJore- over, the complaint suggests no substantial likelihood that victory in this suit would result” in receipt of the hos- pital treatment desired. 426 U.S. at 45-46. The Court explained its conclusion by commenting upon what it per- ceived as the tenuous connection between the injury suf- fered and the relief sought by plaintiffs: (I]t does not follow . . . 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 respond- ents’ receiving the hospital services they desire. It is purely speculative whether the denials of service specified in the complaint fairly can be traced to peti- tioners’ “encouragement” or instead result from deci- sions made by the hospitals without regard to the tax implications. It is equally speculative whether the desired exer- cise of the court’s remedial powers in this suit would result in the availability to respondents of such serv- ices. 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 forego favorable tax treatment to avoid the undetermined financial drain of an increase in the level of uncompensated services.’ * Justice Powell’s opinion for the Court made clear that the finding of a standing deficiency in Eastern Kentucky rested upon a consti- tutional foundation. [When a plaintiff's standing is brought into issue the relevant inquiry is whether .. . the plaintiff has shown an injury to him- 24a Id. at 42-43. ASTA’s complaint in the appeal before us reveals in- adequacies closely comparable to those which afflicted the pleadings filed by the indigents and indigent organi- self 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. * - o a The necessity that the plaintiff who seeks to invoke judicial power stand to profit in some personal interest remains an Art. III requirement. “ * * * * The standing question in this suit therefore turns upon whether any individual respondent has established an actual injury, or whether the respondent organizations have established actual injury to any of their indigent members. - * * * [T]he “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. .. . Id. at 38-41 (footnotes omitted). In a recent case decided by another panel of this court, inquiries relating to causation and redressability of an alleged injury are characterized as “prudential limitations.” Tax Analysts and Advo- cates v. Blumenthal, No. 75-1304, slip op. at 11-12 (D.C. Cir. June 15, 1977); and see also Harrington v. Bush, No. 75-1862, slip op. at 28 n. 68 (D.C. Cir. Feb. 18, 1977), where such inquiries are por- trayed as being separate and apart from the “constitutional threshold of injury-in-fact.” The implication of these statements is that, although considerations of causation or redressability may conceivably operate to deprive particular plaintiffs of standing, such factors can in no event rise to the level of constitutional signifi- cance. Justice Powell’s words in Eastern Kentucky, especially the passages quoted above, are at odds with this approach. Causation and redressability, far from being prudential matters to be evalu- ated seriatim only after constitutional standing has been estab- lished, are part and parcel of the “injury in fact” requirement arising from the “case or controversy” language in Article III. Causation and redressability thus represent not additional inde- pendent standing hurdles which prospective litigants must clear, but rather identifiable aspects of the “injury in fact” test which has long been recognized as the primary standing criterion in the fed- eral courts. 25a zations in Eastern Kentucky. Appellants here must rely solely on speculation in their attempt to assert that their business or profits would improve in the event that ap- pellees began to tax the travel-related income of § 501(c) (3) organizations. Appellants have not demonstrated that they would reap any tangible benefit if the court were to order the relief sought. As appellees argue in their supplemental memorandum, the lower cost of the tour packages offered by the AJC and other tax-exempt organizations may well be attribut- able at least in significant part to the use of volunteer labor or the willingness to accept lower profits than would commercial travel agents. Moreover, even if appellants were to prevail in this suit, members of § 501(c) (3) or- ganizations might for a variety of reasons continue to prefer the travel programs operated by their own or- ganizations. Alternately, such organizations might shift to tour packages whose religious or educational orienta- tion would be more readily apparent. A third possibility is that travel by members of § 501(c) (3) organizations would simply decline. If any of these consequences, or some combination of them, ensued from a decision favorable to appellants, pri- vate travel agents would enjoy no gain whatever from their successful litigation. This is precisely the sort of situation in which the Supreme Court failed to find standing in Eastern Kentucky. By emphasizing their asserted competitor status, ap- pellants seek to distinguish Eastern Kentucky. Appellants 8’ Although Justice Stewart’s concurring statement in Eastern Kentucky dramatically denotes the special problems attendant upon the establishment of standing in the tax cases, under the circum- stances of this case we find, as did the Eastern Kentucky majority, no need to reach “the question of whether a third party ever may challenge IRS treatment of another.” 426 U.S. at 37. The conven- tional “injury in fact” prerequisite was simply not met by appellants in the record before us. 26a contend that, as competitors of the AJC and certain other § 501(c) (3) organizations, they are entitled to protest tax treatment of such organizations in federal court.* For support of their position, appellants rely heavily on Association of Data Processing Organizations, Inc. V. Camp, 397 U.S. 150 (1970). In that case, the Court held that private competitors had standing to challenge a ruling by the Comptroller of the Currency which al- lowed national banks to provide data processing services to other banks and bank customers. Appellants emphasize that the Supreme Court has, in its Eastern Kentucky opinion, recently reaffirmed the vitality of the Data Processing decision. See 426 U.S. at 45 n.25. Our response is threefold. First, the rather cryptic phrasing of Data Processing does not clearly define the contours of competitor standing as conceived by the Su- preme Court. The opinion by Justice Douglas for the Court provides little guidance as to the precise nature of the requirements which must be satisfied before com- petitor standing can be sustained.° ¢ Appellants also rely on their competitor status to establish that they are within the “zone of interests to be protected or regulated by” the relevant Internal Revenue Code provisions. The so-called “zone of interests” test stems from the Supreme Court’s companion opinions in Association of Data Processing Organizations, Inc. v. Camp, 397 U.S. 150, 153 (1970) and Barlow v. Collins, 397 U.S. 159, 164-65 (1970). As the Court observed in Eastern Kentucky, the “zone of interests” test presents “a second, nonconstitutional standing requirement.” 426 U.S. at 39 n.19. In an effort to demon- strate that the “unrelated business” concept was incorporated into the Code in order to protect competitors of tax-exempt organizations, appellants point to both the legislative history of I.R.C. § 513 and the regulations promulgated regarding that section. See, e.g., H.R. Rep. No. 2319, 81st Cong., 2d Sess. 36 (1950) ; S. Rep. No. 2375, 81st Cong., 2d Sess. 27-31 (1950); and 26 C.F.R. §1.513-1(b) (1976). Given our disposition of this case under the “injury in fact” rubric, we need not address appellants’ “zone of interests” argument. 5 Two examples may be cited. The first involves the identity of the parties who must be sued by a litigant alleging competitor standing. In Data Processing, one of the respondents was American 27a Secondly, and more significantly, Data Processing was not a tax case. Whatever may be the impact of com- petitor standing when ordinary administrative action is at issue, we do not believe that Data Processing should be read to endorse standing for any private business, in- dividual or corporate, which wishes to contest the tax treatment of a competitor. Finally, § 501(c) (3) organizations occupy a different posture with respect to the sale of tour packages than did the national banks with respect to the provision of data processing services. Here, the AJC and other such groups will clearly remain free to pursue their travel businesses, however the tax status is finally re- solved. By contrast, in Data Processing, if the Comp- troller of the Currency’s ruling had been overturned on judicial review, the offering of data processing services by national banks would have been illegal, and_peti- tioners undoubtedly would have faced no further com- petition from that source, absent statutory revision. For all these reasons, we do not believe that the Data Processing decision controls the standing issue in the National Bank & Trust Company, a national bank which was offer- ing data processing services pursuant to the controverted ruling by the Comptroller of the Currency. Justice Douglas’s opinion does not disclose whether a successful claim of competitor standing necessitates naming one or more specific competitors as party opponents. Here, only the Secretary of the Treasury and the Com- missioner of Internal Revenue were named as defendants. No organizations holding § 501(c)(3) tax exemptions were made parties. We note that in Eastern Kentucky, Justice Powell stressed the fact that no tax-exempt hospital was a defendant. See 426 U.S. at 41. Also omitted from the Data Processing opinion was all discussion of the chain of causation connecting the challenged administrative action to the injury allegedly suffered by competitors of regulated enterprises. That chain was patently much shorter and more direct in Data Processing than it is in this case. 28a present litigation.* Since we are convinced that the East- ern Kentucky analysis of standing is the one we are bound to apply in this case, and that under it appellants lacked standing to maintain this suit, the judgment of dismissal is affirmed.’ It is so ordered. *In Tax Analysts, supra note 2, a panel of this court recently found economic injury in fact, adequate to meet the Article III test of standing. Appellant in that case was the owner of a small domestic oil well. Rightly or wrongly, he characterized himself as a competitor of the major oil companies producing and importing oil from abroad. He claimed to have suffered economic harm be- cause the IRS had acquiesced in the tax credit treatment of certain sums paid by large oil companies to foreign governments. Appel- lant in Tax Analysts asserted that these sums represented foreign excise taxes or royalties, not foreign income taxes, and that there- fore, they should be treated as deductible business expenses, not tax credits. Having found such allegations sufficient to establish in- jury in fact, the Tax Analysts panel then addressed the pru- dential “zone of interests” test, and found that the court house door was barred on that score. By reason of this latter finding, the panel did not think it necessary to pursue what it termed the “two addi- tional prudential limitations relating to causation and redressability of the grievance... .” Slip op. at 11-12 (footnote omitted); and see note 2 supra. 7 The dissent observes of the foregoing opinion that “it con- structs a constitutional standard of injury in fact that would effectively preclude taxpayer suits claiming competitive injury.” The word “constructs” is hardly an apt characterization of the majority’s effort, in purpose and effect, to follow as faithfully as possible the Supreme Court’s disposition of Eastern Kentucky— the case which, prior to that disposition, all members of the panel appeared to regard as almost certainly controlling. It would thus seem that the dissent’s quarrel is essentially with the approach taken by the Supreme Court majority in Eastern Kentucky, and not with anything the panel majority has itself contrived. The dissent asserts that that approach is an impolitic and unwarrantable return to the rigors of common law pleading, and one that is incompatible with a rational determination of asses- sibility to the federal courts. Although in this instance the dissent purports to see distinctions which enable it to assert that Eastern Kentucky was rightly denied by the Supreme Court, it is manifest that this is not an undertaking it finds either necessary or con- genial. As is usually the case in such circumstances, the differ- entiations here made in terms of economic probabilities are less than conclusive. It is no disrespect to the Supreme Court to say that the concept of standing appears to be undergoing development. Warth v. Seldin, supra, and Eastern Kentucky, with their new emphasis upon cau- sation and redressability, indicate that at least a majority of the Court is no longer content with a constitutional concept of injury in fact limited to an assurance that the interest asserted will guar- antee an effective adversarial presentation. Causation and redress- ability have now explicitly been comprehended within that concept. Whether this is only a tightening up of pleading requirements, or whether it is a way station on the road to a holding of nonjustici- ability in certain classes of litigation, neither we nor the dissent can say. In such circumstances it is surely the function of an inter- mediate appellate court to be guided by standing requirements as they are currently articulated by the Supreme Court in closely comparable contexts. 30a. BAZELON, Chief Judge, dissenting in No. 75-1304, Tax Analysts and Advocates v. Blumenthal, and in No. 75- 1782, American Society of Travel Agents, Inc. v. Blum- enthal: Two panels of the Court hold, for partially in- consistent reasons, that a taxpayer suffering competitive injury lacks standing to challenge tax rulings applicable to a third party. Because I disagree with the reasoning of both panels, I must respectfully dissent. I have decided to write a common dissent on both decisions because I believe that, although each panel develops a different aspect of standing doctrine, both are in fact responding to a common but implicit apprehension of taxpayer standing.’ I share that apprehension. The spectre of the Internal Revenue Service (IRS) defending a multiplicity of suits challenging the tax liabilities of third parties is not a happy one.* Taxes and courts are a volatile political combination; our jurisdiction in this area 1The majority opinion in No. 75-1782, American Society of Travel Agents, Inc. v. Blumenthal, states with admirable candor that the case “presents a threshold issue of standing to sue reminis- cent of Justice Stewart’s observation, concurring in Simon Vv. Eastern Kentucky Welfare Rights Organization, et al., 426 U.S. 26, 46 (1975), that he could not ‘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.’” Maj. op. at 2. Although the opinion does not directly address this question, it constructs a constitutional standard of injury in fact that would effectively preclude taxpayer suits claiming competitive injury. The majority opinion in No. 75-1304, Tax Analysts and Advocates v. Blumenthal, explicitly de- clines to address the issue of “whether a third party ever made challenge IRS treatment of another.” Maj. op. at 27 n.90. However, the discussion of the “zone of interests” test in the opinion seems designed, “as a prudential matter,” id. at 26, to eliminate such chal- lenges from a federal forum. 2? On the other hand, it must be recognized that the Code is a statutory system designed delicately to balance the relationships among economic entities. To permit tax liability to be challenged only by the taxpayer himself is in effect to permit the IRS virtually 3la has for that reason been circumscribed by statute.* But whether a federal forum should be closed to such suits is a profound and complicated issue, and at base one that should be decided by Congress. At present Congress has decided that we do have jurisdiction to hear cases such as those presently before us,* and we are obligated to exercise this statutory jurisdiction. Appellants have alleged circumstances that would have justified standing had they been seeking review of an or- dinary administrative ruling. What concerns me most deeply about these decisions is that both deny appellants unfettered discretion in adjusting these economic interrelationships. The spectre of such unreviewable discretion, especially when, as is alleged in these two cases, it is exercised in contradiction to the commands of Congress, is also discomforting. 8 26 U.S.C. § 7421(a), for example, provides that, except in certain exceptional circumstances, “no 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.” The purpose of the statute is “to permit the United States to assess and collect taxes alleged to be due without judicial intervention, and to require that the legal right to the disputed sums be determined in a suit for refund.” Enochs v. Williams Packing and Navigation Co., Inc., 370 U.S. 1, 7 (1962). Our jurisdiction is similarly limited in the area of fed- eral taxes by the Declaratory Judgment Act, which authorizes courts of the United States to issue declaratory judgments “except with respect to Federal taxes. . . .” 28 U.S.C. § 2201. *In Simon v. Eastern Kentucky Welfare Rights Org., 426 U.S. 26, 36-37 (1976), the Supreme Court specifically left open the ques- tion of whether statutory or immunity bars would ever permit a third party to “challenge IRS treatment of another.” This court has held, however, that since 26 U.S.C. § 7421(a) only forbids suits instigated “for the purpose of restraining the assessment or collec- tion of any tax,” (emphasis added), it does not bar suits seeking to compel the collection of taxes. Eastern Kentucky Welfare Rights Org. v. Simon, 506 F.2d 1278, 1284 (D.C. Cir. 1974), vacated on other grounds, 426 U.S. 26 (1976). We have also held that the scope of the prohibition in the Declaratory Judgment Act, 28 U.S.C. § 2201, is “coterminous” with that of 26 U.S.C. §7421(a), id. at 1284-85, and hence that in suits seeking to compel the collection of taxes we are authorized to provide declaratory relief. 32a standing not on principles specifically applicable to tax- payers suits, but on the basis of general doctrines of the law of standing. The consequence is that general stand- ing law is distorted to accommodate the purpose of shield- ing the IRS. In No. 75-1782, American Society of Travel Agents, Inc. Vv. Blumenthal, appellants, numerous commercial travel agencies and the American Society of Travel Agents (ASTA), a non-profit corporation organized to represent the professional interests of travel agents, al- lege that certain organizations tax exempt under 26 U.S.C. § 501(c) (3),° and the American Jewish Congress (AJC) in particular, actually package and offer to the public large scale commercial travel programs. Appel- lants argue that such commercial activities are illegal in corporations exempt under § 501(c)(3),*° and that appellants are injured by this illegality since tax-exempt organizations can offer travel programs more cheaply than tax-paying organizations." They ask that the AJC and similar organizations be deprived of their tax-exempt status, or, in the alternative, that income from these 526 U.S.C. §501(c)(3) exempts from taxation {c]orporations and any community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or to foster national or international amateur sports competition (but only if no part of its activities involve the provision of athletic facilities or equipment), or for the pre- vention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private share- holder or individual, no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation (except as otherwise provided in subsection (h)), and which does not participate in, or intervene in (in- cluding the publishing or distributing of statements), any political campaign on behalf of any candidate for public office. * Complaint {{ 22, 23. * Id. at J 24. 33a commercial programs be taxed under 26 U.S.C. § 511 (a).* The majority holds that appellants fail to meet the Article III requirement of injury in fact. Because I believe that appellants have alleged ordinary competitive injury sufficient to meet the standards set out in Asso- ciation of Data Processing Service Organizations, Inc. Vv. Camp, 397 U.S. 150 (1970), I dissent from this holding. In No. 75-1304, Tax Analysts and Advocates v. Blum- enthal, the majority denies standing to appellant Tax Analysts and Advocates (TAA), a non-profit corporation organized for the purpose of promoting tax reform, and to appellant Thomas Field, a United States taxpayer and owner of the entire working interest in a currently producing oil well in Pennsylvania. Appellants seek to challenge published® and private” rulings by the IRS that taxes imposed by Saudi Arabia, Libya, Iran, Ku- wait and Venezuela are “income” taxes, and thus can be credited against U.S. tax liability under 26 U.S.C. § 901(b).“ Appellants allege that these taxes are in fact either royalties or “excise, severance, or similar taxes not creditable under Section 901(b).” ” *26 U.S.C. §511(a) imposes on corporations subject to § 501 (c)(3) a tax on “unrelated business taxable income.” “Unrelated business” is defined in §513(a) to mean any trade or business the conduct of which is not substantially related . . . to the exercise or performance by such organiza- tion of its charitable, educational, or other purpose or function constituting the basis for its exemption under section 501... . *See Revenue Ruling 55-296, 1955-1 Cum. Bull. 386; Revenue Ruling 68-552, 1968-2 Cum. Bull. 306. 10 See Amended complaint § 10, Joint Appendix (JA) at 41. 1226 U.S.C. §901(b) permits a U.S. citizen or domestic corpo- ration to receive a tax credit for “the amount of any income, war profits, and excess profits taxes paid or accrued during the taxable year to any foreign country... .” 12 Amended Complaint § 14, JA at 42. 34a Appellant Field and appellant TAA as a representative of its tax-paying members, claim injury as taxpayers. They allege that the illegal IRS rulings cost the U.S. Treasury approximately $3,000,000,000 in 1974, and ar- gue that this loss causes them to pay higher federal in- come taxes." Appellant Field, in addition, claims that he is injured as a competitor of those oil companies who benefit from the illegal IRS rulings. Field alleges that since the prices charged by these companies for imported oil largely determine the market price for the uncon- trolled crude oil of domestic independent producers, he receives a lower price for his oil than would be the case if such companies could only deduct these foreign taxes from their gross income rather than illegally credit them.“ Moreover, since domestic producers can only de- duct the royalties they pay to the land owners of their oil wells, Field claims that investment in foreign oil production is relatively more profitable and attractive. Field alleges that the IRS rulings thus “depress the value of his operating interest in a domestic oil well.” * The majority denies standing to both Field and the TAA in their capacities as mere taxpayers.” Because as taxpayers appellants have not met the “nexus” text of 18 Amended Complaint at { 14, 20, 21, JA at 42, 44. 1* Amended Complaint at { 18, JA at 43-44. 15 Appellant Field pays a royalty of one-eighth of the proceeds of all oil produced from his well to the owners of the land on which the well is located. These royalties are expected to amount to $46.32 per year for the next five years. See the findings of the District Court, Tax Analysts and Advocates v. Simon, 390 F. Supp. 927, 929- 30 (D.C.C. 1975). 16 Amended Complaint § 19, JA at 44. 17 The majority affirms the District Court’s finding of no injury in fact and adopts its reasoning at 390 F. Supp. 932-38. Maj. op. at 4n.10. 35a Flast v. Cohen, 392 U.S. 83, 102-03 (1968), and have alleged only a “generalized grievance” the impact of which “is plainly undifferentiated and ‘common to all members of the public...’ Ex parte Lévitt, 302 US. 633, 634 (1937),”* I concur in that holding.” The majority also denies appellant Field standing. It concedes the Field has suffered injury in fact sufficient to meet Article III standards,” yet it finds that Field has failed the second of the standing tests enunciated in Association of Data Processing Service Organizations, Inc. v. Camp, 397 U.S. 150 (1970). It concludes that the interests Field seeks to protect are not “arguably within the zone of interests to be protected or regulated” by §901(b). In reaching this conclusion the majority is forced to construe the “zone of interests” test in an un- supportable manner, capable of causing unforeseeable 18 Flast focused on the “logical nexus between the status asserted and the claim sought to be adjudicated.” The decision held that there were two aspects to the nexus required to sustain taxpayer’s standing. “First, the taxpayer must establish a logical link between [federal taxpayer] status and the type of legislative enactment attacked .. .. Secondly, the taxpayer must establish a nexus between that status and the precise nature of the constitutional infringement alleged.” 392 U.S. at 102. %® United States v. Richardson, 418 U.S. 166, 176-77 (1974). 2°T do not agree, however, with the majority’s conclusion that appellants have suffered no injury in fact. Maj. op. at 4 n.10. A generalized grievance is a grievance nonetheless. Since injury in fact is a constitutional prerequisite of standing, the taxpayer in Flast must have suffered such an injury. Nevertheless, the Supreme Court has held that as a prudential matter, a grievance “shared in sub- stantially equal measure by all or a large class of citizens” should normally not “warrant exercise of jurisdiction.” Warth v. Seldin, 422 U.S. 490, 499 (1975). Congress can, of course, “either expressly or by clear implication” override this prudential consideration. /d. at 501. Appellants, however, have pointed to no statute in which Congress has either expressly or implicitly authorized a right of action for generalized taxpayer grievances. 21 Maj. op. at 12. 36a mischief in other areas of standing law. I dissent both from the majority’s conclusion and from its construction. I. INJURY IN FACT Article III of the Constitution limits federal court ju- risdiction to actual cases or controversies. The question of standing “focuses on the party seeking to get his complaint before a federal court,” Flast v. Cohen, 392 U.S. 83, 99 (1968), in order to determine if he “has made out a ‘case or controversy’ between himself and the defendant within the meaning of Art. III.” Warth v. Seldin, 422 U.S. 490, 498 (1975). Two aspects of the case and controversy standard are important for the law of standing. The first is that cases and controversies must be adversary; that is, they must be disputes over actual or threatened injuries. Thus standing exists “only when the plaintiff himself has suffered ‘some threatened or actual injury resulting from the putatively illegal action... .’ Linda R. S. v. Richard D., 410 US. 614, 617 (1973).” Id. at 499. Second, cases and controversies must “be presented in a form historically viewed as capable of judicial resolution.” Flast v. Cohen, 392 US. 83, 101 (1968). Thus federal courts cannot, consistent with Article III, issue advisory opinions. /d. at 96-97. Standing requires that a plaintiff demonstrate “an in- jury to himself that is likely to be redressed by a favor- able decision. Absent such a showing, exercise of its power by a federal court would be gratuitous and thus inconsistent with the Art. III limitation.” Simon Vv. Eastern Kentucky Welfare Rights Org., 426 U.S. 26, 38 (1976) .*? Eastern Kentucky makes clear that an injury capable of being redressed is one that can fairly “be traced to the challenged action of the defendant, and not 22 See United States v. Evans, 213 U.S. 297 (1909). 37a injury that results from the independent action of some third party not before the court.” Jd. at 41-42." It is, of course, settled law that in appropriate cir- cumstances competitive injury constitutes sufficient in- jury in fact to fulfill Article III requirements.* This is acknowledged by the opinion in Tax Analysts.* In that case appellant Field owns the entire working interest in a Pennsylvania oil well. The well produces three barrels of crude oil per month at a price of $10.28 per barrel. Field’s anticipated profits before taxes are approximately $203.76 per year.” He complains of economic injury be- cause allegedly illegal IRS rulings have decreased the value of his well and the price he receives for his crude oil. At first blush it is tempting to hold such economic injury, if it exists, to be de minimis. However, it is ap- parent that there can be no principled justification for such a holding, and the Supreme Court has held that any identifiable trifle of harm is enough to establish standing. United States v. SCRAP, 412 U.S. 669, 689 n.14 (1973). It is also tempting to hold that Field’s injury is too speculative. While it is true that we cannot know with absolute certainty whether the elimination of the allegedly illegal IRS ruling would redress Field’s 28 Like the majority in Travel Agents, I disagree with the obser- vation in Taz Analysts that “causation” and “redressability” are merely “prudential limitations” on standing. See Tax Anaylsts at 11-12; Travel Agents at 8 n.2. 24 Schlesinger v. Reservists Committee to Stop the War, 418 U.S. 208, 223 (1974) ; Sierra Club v. Morton, 405 U.S. 727, 736-37 & u.11 (1972); Investment Co. Institute v. Camp, 401 U.S. 617 (1971); Arnold Tours, Inc. v. Camp, 400 U.S. 45 (1970); Association of Data Processing Service Organizations, Inc. v. Camp, 397 U.S. 150 (1970). 25 Maj. op. at 12. 26 390 F. Supp. at 929. 38a competitive injury, he has set forth a cogent economic analysis that this would be the case. To require Field to allege facts that would prove the laws of economics would be ungainly, wasteful, and inconsistent with the philosophy of pleading of the Federal Rules of Civil Procedure. The modern conception of “notice pleading” ” does “not require a claimant to set out in detail the facts upon which he bases his claim. To the contrary, all the Rules require is ‘a short and plain statement of the claim’ that will give the defendant fair notice of what the plaintiff’s claim is and the grounds upon which it rests.” Conley v. Gibson, 355 U.S. 41, 47 (1957). Re- quiring Field to allege all of the facts supportive of the chain of causation upon which his allegation of in- jury rests would return us to the unpredictable and fact-laden system of code pleading.* Recognizing all this, the majority in Tax Analysts holds that Field “has suffered injury in fact in his capacity as a competitor.” *° I concur in this holding. And, so far as I can see, the competitive injury that ASTA and the other appellants in Travel Agents claim to have suffered is virtually indistinguishable. Yet the majority in that case holds that appellants have no standing because they have failed to demonstrate “any judicially cognizable ‘injury in fact.’” * The majority in Travel Agents holds, first, that the very existence of appellants’ competitive injury is “too 27 Wright and Miller object to the term “notice pleading” and suggest instead “modern pleading” or “simplified pleading.” WRIGHT & MILLER, FEDERAL PRACTICE AND PROCEDURE: CIVIL § 1202 (1969). 28 See id.; 2A MOORE’S FEDERAL PRACTICE {ff 8.12-8.13 (1975); CLARK, CODE PLEADING § 38 (1947); Skinner, Pre-Trial and Dis- covery Under the Alabama Rules of Civil Procedure, 9 ALA. L. REV. 202, 203-05 (1957). 29 Maj. op. at 12. The majority terms the government’s arguments to the contrary “frivolous.” Jd. at 12 n.45. 8° Maj. op. at 5. 39a speculative to support standing” since they do not allege specific customers who would be gained if the AJC and similar organizations were to lose their tax-exempt status.** Second, the majority concludes that “[a]ppel- lants have not demonstrated that they would reap any tangible benefit if the court were to order the relief sought.” * If the tax-exempt status of the AJC or other tax-exempt organizations were eliminated, these organiza- tions might still maintain lower prices because of ‘“volun- teer labor or the willingness to accept lower profits”; or members of these tax-exempt organizations might still prefer the travel programs of their own organizations even if more expensive; or such members might simply decide not to travel at all.* With all due respect, such reasoning reveals that it is the majority, not the appellants, who is engaging in specu- lation. The economic basis of appellants’ injury is straight- forward, far more compelling even than that alleged by appellant Field in Tax Analysts. Appellants allege that because of the AJC’s tax-exempt status and the other privileges which flow from it, such as reduced-rate postage, the [AJC] and others are able to offer lower-cost travel programs than plaintiffs and other tax-paying travel agents. Plaintiffs allege and believe that numerous persons who would otherwise use plaintiffs’ services and the services of other tax-paying travel agents are instead induced by the extensive mail solicitations and lower costs and take business to tax-exempt organizations.” 31 Jd. at 6. 82 Jd. at 9. 83 Jd. 84 Complaint {| 24. 40a It is true, of course, that all claims of competitive injury are to some extent speculative, since they are predicated on the independent decisions of third parties; 7.¢., custom- ers. However economics is the science of predicting these economic decisions, and it is the stuff of the most elemen- tary economic texts that if two firms are offering a similar product for different prices, the firm offering the lower price will draw away customers from its competitor. For us to fly in the face of this learning and require a plaintiff to allege in his complaint the names of specific customers who would be led to alter their consumption patterns, would be to exalt form over substance and to take a long, unfortunate step backwards into what Pro- fessor Moore has termed “the morass” of code pleading.*° I know of no case, nor has one been cited by the majority, in which such allegations have been adjudged a necessary element in a complaint of competitive injury. 352A MOORE’S FEDERAL PRACTICE { 8.13 (1975). Stripped to its essentials, the majority’s argument is that appellants have alleged conclusions rather than facts. However, under the philosophy of the Federal Rules, “it is immaterial whether a pleading states ‘con- clusions’ or ‘facts’ as long as fair notice is given... .” ZJd. 86 See Arnold Tours, Inc. v. Camp, 400 U.S. 45 (1970); Associa- tion of Data Processing Service Organizations, Inc. v. Camp, 397 U.S. 150 (1970); FCC v. Sanders Brothers Radio Station, 309 U.S. 470 (1940); Rental Housing Ass’n of Greater Lynn, Inc. v. Hills, 548 F.2d 388 (1st Cir. 1977); Concerned Residents of Buck Hill Falls v. Grant, 537 F.2d 29, 33 (3d Cir. 1976). It is unclear to me exactly what facts the majority would require to be alleged. Surely an affidavit from a tour package purchaser swearing that he would have patronized a commercial travel agency had its prices been competitive would constitute the height of specu- lation. See American Trucking Ass’ns, Inc. v. United States, 364 U.S. 1 (1960), in which the Court concluded that trucking compa- nies had standing under § 205(g) of the Interstate Commerce Act and §10(a) of the Administrative Procedure Act to challenge the ICC’s granting of a permit to a competitor to perform transporta- tion services for appellee General Motors Corporation, despite GM’s statement in court that it would not do business with appellants. The Court stated, “And surely the statement by General Motors that it would not in any event give the business to any appellant 4la The majority’s reasoning, in fact, is flatly contradictory to Investment Co. Institute v. Camp, 401 U.S. 617 (1971). In that case plaintiffs complained of competitive injury because of an allegedly illegal regulation of the Comp- troller of the Currency permitting national banks to estab- lish and operate collective investment funds. The Supreme Court upheld the standing of the plaintiffs, id. at 620-21, even though their allegations of injury were no more specific that those of the appellants in this case. Plaintiffs alleged merely that they would suffer present and continuing serious and irreparable injury as a direct result of the illegal activity au- thorized by the Comptroller’s challenged regulations and particularly as a result of the Bank’s proposed illegal activity which was approved by the Comp- troller under such regulations. This illegal activity will subject the Institute’s mutual fund members to illegal competition, will deprive them of legitimate business, and will dilute, divert, and withdraw a sub- stantial portion of the potential market for securities in mutual funds to the substantial and irreparable injury of such plaintiffs and the shareholders in such funds. This illegal activity will also subject the Insti- tute’s investment adviser and underwriter members, including the additional plaintiffs, to illegal competi- tion and to loss of opportunities for profit in their trade and will dilute, divert and withdraw a substan- cannot deprive appellants of standing. The interests of these inde- pendents cannot be placed in the hands of a shipper to do with as it sees fit through predictions as to whom its business will or will not go. The decision we believe to be controlling is . . . Alton R. Co. v. United States, 315 U.S. 15, where the Court confirmed the standing of a railroad to contest the award of a certificate to a competing trucker.” Jd. at 17-18. 42a tial portion of the potential market for their services to the irreparable injury of such plaintiffs.” The Supreme Court did not, as does the majority in this case, require plaintiffs to allege in their complaint facts suflicient to refute every possible anomaly of the market- place such as the existence of voluntary labor or ideologic- ally committed consumers. The Court assumed that the marketplace would function in a normal, predictable fashion,** for to assume otherwise would be to foreclose the very possibility of ever satisfactorily alleging a com- petitive injury. As the majority’s opinion demonstrates, one might conjecture an indefinite number of such anoma- **? Complaint 18. Investment Co. Institute v. Camp was a con- solidation of two cases, No. 61, Investment Co. Institute v. Camp, and No. 59, National Ass’n of Securities Dealers, Inc. v. SEC. The complaint quoted in text is from No. 61, the case in which the Supreme Court specifically upheld standing. «ust last year, this court accepted jurisdiction of a case in which plaintiffs had obtained standing on the basis of a complaint reading very much like the complaint in the instant case. Plaintiffs alleged competitive injury, yet named no specific customers who had been lost. This court not only accepted plaintiffs’ standing, but also up- held the district court injunction because it was necessary to pro- tect these plaintiffs from “further economic and competitive in- jury.” Independent Bankers Ass’n v. Smith, 534 F.2d 991, 952 (D.C. Cir.), cert. denied sub nom. Bloom v. Independent Bankers Ass’n, 429 U.S. 862 (1976) ; Complaint § 31. 88 The assumption is a common one. For example, in cases under the Robinson-Patman Act, 15 U.S.C. § 13, “competitive injury may be inferred when one set of customers buys at substantially lower prices than other customers.” Hanson v. Pittsburgh Plate Glass Industries, Inc., 482 F.2d 220, 227 (5th Cir. 1973), cert. denied, 414 U.S. 1136 (1974). See FTC v. Morton Salt Co., 334 U.S. 37, 46-47 (1948): “Here the Commission found what would appear to be obvious, that the competitive opportunities of certain merchants were injured when they had to pay respondent substantially more for their goods than their competitors had to pay.” The injury, of course, may be inferred because merchants faced with higher prices and therefore higher costs must in turn charge their customers higher prices and thereby lose business and suffer competitive in- jury. This is precisely the chain of economic reasoning relied upon by appellants in Travel Agents. rte ve 48a lies, some more plausible than others. For every anomaly invented, the plaintiffs’ claim can be made to appear more “speculative.” Standing under such access rules would virtually depend upon the imagination of the reviewing judge. The majority argues that its conclusion is required by Simon Vv. Eastern Kentucky Welfare Rights Org., 426 U.S. 26 (1976). I disagree. In Eastern Kentucky, plain- tiffs alleged that a 1969 Revenue Ruling has “encouraged” hospitals to deny services to indigents.** Under the tax code, benefactors of institutions qualifying as “charitable” under § 501(c) (3) can deduct the amount of their dona- tions. Plaintiffs alleged that the new Revenue Ruling, by permitting hospitals that offered only emergency room services to indigents to qualify for § 501(c) (3) status, “caused” the refusal of various hospitals to admit indigent plaintiffs. The premise of the plaintiffs’ argument was that hospitals were so dependent upon deductible dona- tions that they would perform whatever services were necessary to qualify for § 501(c) (3) status. That pre- mise, as a logical or economic prediction, was clearly false: there was no way of knowing in advance whether the in- creased income from charitable contributions would exceed the increased costs of providing additional services. The result, as the Supreme Court observed, would “vary from hospital to hospital.” Jd. at 43. Plaintiffs had thus failed to allege facts sufficient to predict whether the change in the Revenue Ruling would affect the behavior of those particular hospitals that had refused to admit the plain- tiffs. Eastern Kentucky applies to fundamentally different circumstances than those presented in T’ravel Agents. The injury alleged by ASTA and the other appellant travel agencies does not depend upon the discreet decisions of 8° 426 U.S. at 42. 44a particular institutions or specific customers. Appellants allege a competitive injury, stemming from a systematic distortion of the marketplace. They claim that, because of illegal IRS rulings, their competitors pay no taxes and therefore have lower costs and charge lower prices. There is nothing hypothetical about this allegation: if we grant the relief appellants seek, the costs of their competitors would necessarily increase. The ultimate injury alleged is a loss of customers, and there is, of course, an implicit prediction in appellants’ case that customers will, on the whole, tend to buy similar items at the lowest possible price. The majority can refer to this injury as “abstract” and to this prediction as “speculative,” but these are ab- stractions and speculations that every businessman must confront every day.“ The majority’s corrosive skepti- cism would altogether eliminate competitive injury as a grounds for standing.“ That would in fact be contrary *# Article III, of course, does not require absolute certainty that prospective relief will redress the alleged harm. See Simon v. Eastern Kentucky Welfare Rights Org., 426 U.S. 26, 44-45 (1976); City of Hartford v. Towns of Glastonbury, West Hartford, and East Hartford, Nos. 76-6049, -6050, -6059, slip op. at 1098 (2d Cir. 23 December 1976). This court, for example, has held that an unsuc- cessful bidder for a government contract has standing to challenge the validity of the awarding of the contract, ever