## Facts

- Congress enacted the Tax Reform Act of 1986, substantially revising depreciation and other tax rules affecting real-estate investments.
- The Act included narrow transition rules that granted favorable tax treatment to a small, identifiable set of taxpayers with qualifying pre-enactment projects.
- Apache Bend Apartments, Ltd., and related real-estate entities claimed they were similarly situated to those receiving transition relief but were excluded by the statute’s criteria.
- Plaintiffs alleged the exclusion increased their federal tax liability compared to taxpayers who received the transition benefits.
- Plaintiffs sued the United States, asserting the transition rules were unconstitutional as selective tax relief aimed at particular taxpayers.
- The district court granted summary judgment for the United States, rejecting both constitutional theories.
- A Fifth Circuit panel found standing and affirmed on the merits.
- The Fifth Circuit reheard the case en banc and addressed only Article III standing.

## Issues

1. Whether taxpayers excluded from narrow tax transition benefits have Article III standing to challenge the statutory provisions under the Uniformity Clause and the Fifth Amendment’s equal-protection component.
2. Whether the alleged injury—paying higher taxes because others received a statutory carve-out—is a concrete, particularized injury that is fairly traceable to the challenged provisions and likely to be redressed by judicial relief.

## Decision

- The en banc Fifth Circuit held the plaintiffs lacked Article III standing.
- The court treated the claimed harm as a generalized grievance about legislative favoritism rather than a judicially cognizable, particularized injury.
- The court concluded plaintiffs lacked a legally protected entitlement to the transition relief and that exclusion from a selective tax benefit did not establish injury-in-fact.
- The court found redressability lacking because invalidating the carve-out would not necessarily reduce plaintiffs’ tax liability and courts could not extend the benefit by rewriting the statute.
- The judgment dismissing the action was affirmed on standing grounds, without reaching the merits of the constitutional claims.

## Legal Principles

- Article III standing requires injury-in-fact, traceability, and likely redressability; failure on any element defeats jurisdiction.
- A taxpayer’s complaint that others received a statutory tax preference, without more, is generally treated as a generalized grievance outside federal judicial power.
- Paying taxes under a generally applicable regime while others receive narrow exceptions does not, by itself, create a cognizable constitutional injury.
- Redressability is not satisfied where the likely remedy would only eliminate benefits for others, and the court lacks authority to confer the sought benefit by altering the statutory scheme.
- Federal courts avoid resolving challenges that would require second-guessing tax classifications absent a concrete injury and a remedy within judicial competence.

## Conclusion

The en banc court dismissed the challenge for lack of standing, holding that exclusion from narrowly targeted tax transition relief did not present a concrete, redressable Article III injury, and therefore federal courts could not adjudicate the Uniformity Clause or Fifth Amendment claims.


Apache Bend Apartments, Ltd. v. United States, 987 F.2d 1174 (5th Cir. 1993)