## Facts

- Abortion-rights organizations and individuals sued federal tax officials, alleging the IRS unlawfully maintained § 501(c)(3) tax-exempt status for Catholic Church-related entities despite claimed political campaign intervention related to abortion.
- Plaintiffs sought judicial compulsion of IRS action to revoke or deny tax-exempt status, asserting unfair political advantage and harm to plaintiffs’ advocacy.
- During discovery, the district court issued subpoenas and production orders to the United States Catholic Conference and the National Conference of Catholic Bishops as non-party witnesses.
- The non-party entities resisted discovery; the district court held them in civil contempt for noncompliance.
- After Supreme Court guidance that non-party contemnors may challenge the court’s subject-matter jurisdiction, the case returned to the Second Circuit to determine whether plaintiffs had Article III standing and thus whether the district court had jurisdiction to issue discovery and contempt orders.

## Issues

1. Whether the plaintiffs had Article III standing to challenge the IRS’s conferral or maintenance of § 501(c)(3) tax-exempt status for Catholic Church-related entities based on alleged political activity.
2. If plaintiffs lacked standing (and the district court lacked subject-matter jurisdiction), whether the district court’s discovery orders and resulting civil contempt orders against non-party witnesses were valid.

## Decision

- The Second Circuit held the plaintiffs lacked Article III standing and the district court therefore lacked subject-matter jurisdiction over the underlying action.
- The court rejected plaintiffs’ standing theories, including taxpayer standing, voter/clergy/advocacy-based standing, and “competitive advocate” standing.
- Because the district court lacked jurisdiction, its discovery orders directed to the non-party entities were unauthorized.
- The civil contempt orders against the non-party entities were vacated, and the matter was remanded with instructions consistent with dismissal for lack of jurisdiction.

## Legal Principles

- Article III standing requires (1) a concrete, particularized injury in fact, (2) injury fairly traceable to the defendant’s challenged conduct, and (3) likely redressability by judicial relief.
- Generalized grievances about government administration of the tax laws, including objections framed as misuse of tax benefits or dissatisfaction with enforcement choices, do not constitute injury in fact.
- Alleged ideological or political disadvantage from perceived governmental favoritism toward an opposing viewpoint is typically too abstract to establish standing.
- “Competitor” or “competitive” standing generally requires a concrete, legally cognizable competitive injury; a claimed disadvantage in public debate arising from voluntary compliance with statutory limits is insufficient.
- Where plaintiffs lack standing, the federal court lacks subject-matter jurisdiction, and coercive ancillary orders (including discovery and contempt against non-parties) cannot stand.

## Conclusion

The Second Circuit concluded that plaintiffs challenging the IRS’s handling of § 501(c)(3) status for Catholic Church-related entities alleged only generalized, speculative harms lacking traceability and redressability, so the district court lacked jurisdiction; accordingly, the discovery and civil contempt orders against the non-party entities were vacated.


In re U.S. Catholic Conference, 885 F.2d 1020 (2d Cir. 1989)