## Facts

- The IRS issued Revenue Ruling 69-545 interpreting “charitable” hospitals under I.R.C. § 501(c)(3) to allow tax-exempt status based on a “community benefit” standard rather than requiring hospitals to provide free or reduced-cost care to indigent patients to the full extent of their financial ability.
- Indigent individuals alleged they were denied non-emergency hospital services because of their inability to pay at hospitals enjoying tax-exempt status and related financial benefits under the ruling.
- Advocacy organizations sued along with the individuals on behalf of indigent persons unable to afford hospital services.
- Plaintiffs sought declaratory and injunctive relief requiring the IRS to withdraw the ruling, asserting (1) it misinterpreted § 501(c)(3) and (2) it was issued in violation of the Administrative Procedure Act.
- The district court denied the government’s motion to dismiss for lack of standing and declared the ruling invalid under the Internal Revenue Code; the D.C. Circuit found standing but upheld the ruling on the merits.
- The Supreme Court granted certiorari and addressed only Article III standing.

## Issues

1. Whether the organizations had standing when they alleged no concrete injury to themselves apart from their interest in improving access to health care for the poor.
2. Whether the indigent individuals’ denial of hospital services was fairly traceable to the IRS ruling, given hospitals’ independent treatment and admissions decisions.
3. Whether it was likely, rather than speculative, that invalidating the ruling and withdrawing tax benefits would redress the individuals’ alleged injuries by causing hospitals to provide the desired services.

## Decision

- The Court held that plaintiffs failed to establish Article III standing and that the case must be dismissed.
- The organizations lacked standing because an abstract interest in a problem, without injury to the organization itself, is insufficient.
- Assuming the individual indigent plaintiffs suffered injury, the Court held causation and redressability were too speculative because the alleged harm depended on independent third-party decisions by hospitals.
- The Court reversed and remanded with instructions to dismiss; it did not reach the statutory or APA challenges to the ruling.

## Legal Principles

- Article III standing requires a plaintiff to show (1) a concrete, personal injury, (2) injury fairly traceable to the defendant’s challenged conduct, and (3) a likelihood that the injury will be redressed by a favorable judicial decision.
- An organization cannot establish standing solely based on its mission or “abstract concern” with an issue; it must show injury to the organization itself (or otherwise satisfy recognized representational standing requirements).
- Where the causal chain depends on discretionary decisions of independent third parties not before the court, traceability and redressability may fail when the alleged link between government policy and the plaintiff’s injury is speculative.
- Federal courts may not decide the merits of a dispute absent standing, even if the challenged government policy plausibly affects the public.

## Conclusion

The Supreme Court required dismissal because the plaintiffs could not show that the IRS’s hospital tax-exemption policy caused their denial of care or that a court order invalidating the policy would likely lead hospitals to treat indigent patients, and the organizations alleged no concrete injury to themselves.


Simon v. E. Ky. Welfare Rights Org., 426 U.S. 26 (1976)