## Facts

- Clifford V. McGlotten, a Black applicant, alleged he was denied membership in a local fraternal lodge solely because of race.
- He brought a class action seeking to stop federal officials from granting tax exemptions and related tax benefits to private fraternal and nonprofit organizations that racially exclude members.
- The complaint asserted three theories: (1) constitutional limits on tax benefits that support racial discrimination, (2) the Internal Revenue Code should be construed not to authorize such benefits for discriminatory groups, and (3) tax benefits constitute federal financial assistance barred by Title VI when linked to discrimination.
- The Secretary of the Treasury moved to dismiss on jurisdictional grounds and for failure to state a claim.
- Because the suit sought to enjoin enforcement of federal statutes on constitutional grounds, a three-judge district court was convened.

## Issues

1. Whether a three-judge court was properly convened under 28 U.S.C. § 2282, including whether the constitutional challenge was substantial and directed to statutes rather than only administrative action.
2. Whether the Anti-Injunction Act, 26 U.S.C. § 7421(a), barred a suit seeking to terminate tax benefits to discriminatory organizations.
3. Whether an individual excluded from membership had standing to challenge the federal government’s conferral of tax benefits on discriminatory private organizations.
4. Whether the complaint stated a claim under constitutional, statutory-construction, and Title VI theories sufficient to survive a motion to dismiss.

## Decision

- The court denied the Secretary’s motion to dismiss.
- The court held the three-judge court was properly convened because the complaint presented a substantial constitutional challenge to federal statutes conferring tax benefits.
- The court held the Anti-Injunction Act did not bar the action because plaintiffs were not attempting to restrain the assessment or collection of a tax against themselves, but to end allegedly unlawful tax subsidies.
- The court held plaintiffs had standing because they alleged direct injury from racial exclusion allegedly encouraged or supported by federal tax benefits.
- The court held the complaint stated claims sufficient at the pleading stage under the constitutional and alternative non-constitutional theories.

## Legal Principles

- A three-judge district court may hear a suit seeking to enjoin enforcement of an Act of Congress when the complaint presents a substantial constitutional challenge to statutory provisions, even if alternative claims address administrative implementation.
- The Anti-Injunction Act does not bar suits that target the federal government’s conferral of tax benefits as an allegedly unlawful subsidy, rather than suits seeking to stop assessment or collection of taxes.
- Individuals alleging personal injury from racial discrimination may have standing to challenge government action that allegedly encourages or supports that discrimination through financial benefits.
- At the pleading stage, allegations that federal tax exemptions and deductions operate as government support for private racial discrimination can state a constitutional claim, and parallel statutory and Title VI theories may proceed if plausibly alleged.

## Conclusion

The three-judge court allowed the case to proceed, holding that excluded individuals plausibly alleged injury traceable to federal tax subsidies for discriminatory organizations, that jurisdiction was not barred by the Anti-Injunction Act, and that the constitutional and alternative statutory theories were sufficient to survive dismissal.


McGlotten v. Connally, 338 F. Supp. 448 (D.D.C. 1972)