Simon v. Eastern Kentucky Welfare Rights Organization

Supreme Court of the United States · 1976 · Federal Courts

426 U.S. 26 (1976)

Updated August 1, 2026

Federal CourtscausationredressabilitystandingArticle IIItraceabilityAPAIRS revenue ruling

Facts

The IRS had long applied Revenue Ruling 56-185, which required a nonprofit hospital seeking charitable tax status to operate to the extent of its financial ability for those unable to pay. In 1969, Revenue Ruling 69-545 modified that position by removing the requirements relating to caring for patients without charge or below cost and held exempt a hospital that maintained a full-time emergency room but otherwise ordinarily limited admissions to paying patients. Individual indigent plaintiffs alleged that hospitals denied them admission or treatment because they could not pay, and the complaint alleged that those hospitals had been granted charitable tax treatment. The plaintiffs claimed the IRS, by extending tax benefits to such hospitals, was encouraging hospitals to deny services to indigents and sought declaratory and injunctive relief against Treasury officials alone.

Issue

Did the indigent individuals and organizations have Article III standing to challenge the IRS Revenue Ruling on the theory that it encouraged hospitals to deny services to indigents? More specifically, had they alleged an injury fairly traceable to the challenged IRS action and likely to be redressed by a favorable judicial decision?

Rule

When standing is at issue, the relevant inquiry is whether, assuming the claim is otherwise justiciable, the plaintiff has shown an injury to himself that is likely to be redressed by a favorable decision. Article III requires that the injury fairly can be traced to the challenged action of the defendant, not to the independent action of some third party not before the court, and speculative inferences are insufficient.

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In Detroit, Maya Ortiz was turned away by several privately owned apartment complexes because she could not meet minimum income requirements. She sues the Secretary of Housing and the head of a federal bureau, alleging that a new federal tax credit for residential developers encourages landlords to reject low-income applicants, and seeks an injunction against the federal officials only.

Does Maya most likely have Article III standing?

Explanation. Article III requires more than a concrete injury. The plaintiff must show that the injury is fairly traceable to the challenged action of the defendant and likely to be redressed by a favorable decision. Where the immediate harm was caused by independent third parties not before the court, and it is speculative both that the government's policy caused the third parties' conduct and that invalidating the policy would change that conduct, standing is lacking.