On the surface, plaintiffs' proposed guidelines appear to be significantly different than the current IRS procedure in that they shift the burden of proof onto the private schools to establish their innocence After their exemptions have been withdrawn by the IRS. The plaintiffs' proposed guidelines require all "badge of doubt" schools (to be determined by plaintiffs' three criteria, see p. 2, Supra ) to overcome a presumption of guilt. However, the record provides absolutely no indication that the criteria that the IRS would employ under plaintiffs' proposed remedy would be any different than those which are employed currently. Hence, it is purely speculative whether, in the final analysis, any fewer schools would be granted tax exemptions under plaintiffs' system than under the current IRS system.
Furthermore, even if it were reasonable to assume that fewer exemptions would be available to "target" private schools under plaintiffs proposed guidelines, it is purely speculative that loss of these exemptions would produce any net change in the desegregation of a given school district (the second injury asserted by plaintiffs). It is by no means clear that these schools would not elect to forego the exemption in question rather than end any discriminatory conduct. It appears probable that many such schools have only limited dependence on these exemptions; indeed, even assuming substantial dependence, the schools might well choose to compensate by alternate means for financial benefits otherwise available from the exemptions. Clearly, under law firmly established by Eastern Kentucky, supra, plaintiffs lack standing because there is a sufficient degree of speculativeness that the relief requested will remedy the injury claimed by plaintiffs.
4. Even if plaintiffs satisfied criteria 1, 2, and 3, plaintiffs lack the necessary concrete adverseness to satisfy the case and controversy requirement of Article III.
Under plaintiffs' proposed guidelines, all "target" schools would presumptively lose their tax exempt status until such time as they could prove to the IRS that they are not discriminating. If plaintiffs were to prevail, as of the day of the decree each of the 3500 "target" schools would lose legal rights to their exemption and deductibility status. Notwithstanding the ability of the schools to subsequently prove that they are within the law, they are not made parties to This particular action. Plaintiffs would deprive these schools of their valuable tax exempt status without ever giving the affected schools a day in court.
The defendant IRS, on the other hand, seems to have nothing to lose if it were forced to grant less tax exemptions to private schools. In fact, this Court observes that the named adversary parties in this action, the parents of the black public school children and the Internal Revenue Service, seem closely allied in terms of the need to promulgate future guidelines.
In Baker v. Carr, 369 U.S. 186, 82 S. Ct. 691, 7 L. Ed. 2d 663 (1961), the Supreme Court held that both parties must have "such a personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues upon which the court so largely depends . . ." 369 U.S., at 204, 82 S. Ct., at 703. Thus, the standing question in its Article III aspect "is whether the plaintiff has "alleged such a personal stake in the outcome of the controversy' as to warrant his invocation of federal-court jurisdiction and to justify exercise of the court's remedial powers on his behalf." Warth v. Seldin, 422 U.S. 490, 498-499, 95 S. Ct. 2197, 2205, 45 L. Ed. 2d 343 (1975) (emphasis in original).
Given the present posture of the case, the complaint does not present a question in the adversary context, or in a form historically viewed as capable of judicial resolution. Flast v. Cohen, 392 U.S. 83, 88 S. Ct. 1942, 20 L. Ed. 2d 947 (1968).
THE ACTION OF THE WRIGHT PLAINTIFFS IS BARRED BY THE DOCTRINE OFNONREVIEWABILITY
Since an accurate assessment of plaintiffs' action would require this Court to undertake detailed or continuing review of a generalized IRS enforcement program, or to review complex issues of tax enforcement policy and of agency resource allocation, this Court holds that this instant suit is barred by the doctrine of nonreviewability.
Ever since the IRS issued regulations in response to Green v. Connally, supra, (40 Fed.Reg. 53409), the issue of their proper implementation and enforcement has been "a terribly complex and difficult problem." Oral Argument, November 20, 1979. There have been lengthy administrative hearings and "over 100,000 written comments" (Oral Argument, November 20, 1979) concerning the two subsequent sets of modified regulations.
The September 29, 1979 passage of the Ashbrook and Dornan Amendments to the 1980 General Appropriations Act has had the effect of retaining the presentRev.Proc. 75-50 for at least one more year. Currently, therefore, the IRS regulatory scenario is in a significant state of flux. Since the parties admit that the present guidelines are in some way inadequate, the dispute seems to involve a choice among a number of proposed guidelines. Presented with this factual situation, this Court concludes that it would be inappropriate for it to fashion relief in this case. Such action would be tantamount to this Court becoming a "shadow commissioner of Internal Revenue" to run the administration of tax assessments to private schools in the United States. It is clearly inappropriate and unjustifiable for a federal court to become the administrator of a nationwide tax enforcement program.
Plaintiff proposes that this Court require the IRS to implement three guidelines which the IRS would therefore be bound to administer and enforce. In order to assess the viability of IRS implementation and enforcement efforts, this Court would be required to analyze results from a significant number of schools. Even if, as plaintiffs contend, the Court need examine only a "representative number" of schools to gauge compliance, the effort would be unfathomable. The thrust of the complaint is that there are "thousands of . . . racially segregated independent private schools which operate in or serve desegregating public school districts." Complaint, P 20. Plaintiff further contends that there are more than 3,500 racially segregated private academies operating in the country having a total enrollment of more than 750,000 children. Complaint P 20. It is clear that such review would impose grave burdens on this Court's resources and would require the Court to exercise an extensive administrative expertise and to involve itself deeply in defendants' practical day-to-day operations.
Application of this doctrine of nonreviewability entails an analysis of the pragmatic consequences for the court itself and for the affected agency likely to result from the review being sought. Panama Canal Co. v. Grace Line, 356 U.S. 309, 78 S. Ct. 752, 2 L. Ed. 2d 788 (1958). (Holding nonreviewable certain complex technical issues regarding the application of the statutory formula for fixing canal tolls to particular facts and cost accounting methods). Applying this standard to a factual situation similar to this case, the District Court for this district ruled that it would not review the IRS assessment of taxes on income of the American Jewish Congress derived from the operation of travel programs. American Society of Travel Agents v. Blumenthal, 75-1 U.S.T.C. 87,289 P 9484 (D.C.D.C.1975). By memorandum order, the Court observed that, "Plaintiffs are in effect asking the Court to substitute its discretion for that of the Internal Revenue Service in determining which travel programs of tax exempt organizations qualify for tax exemptions . . . This is the kind of review which courts traditionally decline to undertake. The court's jurisdiction may be invoked to check a specific abuse of discretion by the Internal Revenue Service . . . But it may not be invoked to undertake continuing supervision of the IRS's administration of the Internal Revenue Code." Id., at 87,290.
Plaintiffs cite a line of cases supporting the proposition that courts are required to review agency action when the harm involved is a "fundamental, Constitutional" one. Johnson v. Robison, 415 U.S. 361, 94 S. Ct. 1160, 39 L. Ed. 2d 389 (1973); Adams v. Richardson, 156 U.S.App.D.C. 267, 480 F.2d 1159 (D.C.Cir. 1973). In the instant case, however, the issue is not Whether review is possible. Rather, the core issue concerns the Type of review that is appropriate, feasible, and consistent with the doctrine of nonreviewability. This Court submits that any violation of the Constitution or federal law by a discriminating school should be remedied on a case-by-case basis through a lawsuit filed directly against the offending school.
RECENT CONGRESSIONAL ACTION SUGGESTS THAT THIS COURT SHOULD NOT FASHION A REMEDY FOR THE WRIGHT PLAINTIFFS
On September 29, 1979, the General Appropriations Act of 1980 (P.L. 96-74) became law. Section 615 of the Act, known as the Dornan rider, provides as follows: "None of the funds available under this Act may be used to carry out proposed revenue procedure 4830-01-M of the Internal Revenue Service entitled "Proposed Revenue Procedure on Private Tax-Exempt Schools' (44 F.R. 9451 through 9455, February 13, 1979, F.R. Document 79-4801), and proposed revenue procedure 4830-1 of the Internal Revenue Service entitled "Proposed Revenue Procedure on Private Tax-Exempt Schools' (43 F.R. 37296 through 37298, August 22, 1978, F.R. Document 78-23515), or parts thereof." Section 103 of the Act, known as the Ashbrook rider, is much broader, and provides as follows: "None of the funds made available pursuant to the provisions of this Act shall be used to formulate or carry out any rule, policy, procedure, guideline, regulation, standard, or measure which would cause the loss of tax-exempt status to private religious, or church-operated schools under section 501(c)(3) of the Internal Revenue Code of 1954 unless in effect prior to August 22, 1978." The effect of this recent action is to retain in effect, at least until September, 1980, the presently effectiveRev.Proc. 75-50, which is the regulation attacked by plaintiffs as inadequate to insure compliance with the Internal Revenue Code and therefore "legally insufficient." Complaint, P 23.
This Court agrees that the Ashbrook and Dornan Amendments provide "a complete and total refutation of the contention . . . that existing regulations are legally insufficient, and that Section 501(c)(3) of the Internal Revenue Code requires adoption of the presumed-guilty-until-proven-innocent approach which requires of private schools "proofs" of non-discrimination . . ." Second Supplemental Memorandum of Intervenor Wayne Allen in Support of Motion to Dismiss at 4. Congress has absolutely forbidden the IRS from adopting Any new regulations concerning the tax-exempt status of private schools. If plaintiffs were to be granted the relief they seek in this case, it would be completely contrary to Congressional intent and policy. The actions by Congress are the strongest possible expressions of the Congressional intent that Section 501(c) (3) of the Internal Revenue Code is not susceptible of the construction which plaintiffs would place upon it in this case.
As plaintiffs contend, the legislative history of the Ashbrook and Dornan Amendments apparently Allows a federal court to fashion a remedy in this area. However, this Court maintains that, in such an area ripe with legislative history and governmental regulation,
it is not the business of a federal court to explicitly thwart the will of Congress or to otherwise fail to carry it out. This Court declines to fashion such a remedy.
In conclusion, this Court is of the opinion that (A) the Wright plaintiffs lack standing to assert their claims; (B) the action of the Wright plaintiffs is barred by the doctrine of nonreviewability; and (C) recent Congressional action suggests that this Court should not fashion a remedy for the Wright plaintiffs. Accordingly, the plaintiffs involved in the "Wright component" of the litigation are dismissed and judgment will be entered in favor of the defendants.