I am going to let others read and comment on this remarkable document before I do. See if you reach the same conclusions I did. Keith Henson ******* IN THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT No. 99-17038 H. KEITH HENSON, Plaintiff-Appellant V. INTERNAL REVENUE SERVICE1 Defendant -Appel lee ON APPEAL FROM THE JUDGMENT OF THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA BRIEF FOR THE APPELLEE JURISDICTIONAL STATEMENT 1. Jurisdiction in the District Court Mr. H. Keith Henson, appellant, filed a complaint and an amended complaint seekin9 a declaration, injunction, and dama9es of an unspecified amount a9ainst the Internal Revenue Service (i.e., the United States) on December 31, 1998, and -2- March 22, 1999, respectively.1/ (CR 1 & 3.)2/ The amended complaint alleged that jurisdiction existed because "this is a matter involving a Federal agency." (CR 3 at 2, l~-l8.) As more fully explained in the argument section of this brief! the District Court lacked subject matter jurisdiction over the suit. 2. A~~ealable decision and jurisdiction in the Court of A~~eals On August 20, 1999, the District Court granted the motion of the Internal Revenue Service to dismiss the complaint and entered judgment in favor of the Internal Revenue Service. (CR 19 & 20.) The judgment disposes of all claims of all parties and is a final, appealable judgment. This Court has jurisdiction pursuant 28 U.S.C. 1291. 3. Timeliness of a~~eal Mr. Henson filed a timely notice of appeal on September 1, 1999. (ER 70.) See 7483, Internal Revenue ******fn 1/ Mr. Henson also named "Does 1-3~" as defendants, although he did not indicate who the Does were or in what capacity he was suing them, or make any specific claims against them. In his opening brief on appeal, he does not name the Does as appellees, and does not make any argument concerning them. Consequently, he has waived whatever claims he may have made against the Does in his amended complaint. 2/ "CR references are to the documents of the original record on appeal as numbered by the Clerk of the District Court. end*****fn -3- Code of 1986 (26 U.S.C.)3/; Fed. R. App. P. 13(a). See 28 U.S.C. 2107 and Fed R. App. P. 4(a)(1). STATEMENT OF THE ISSUE Whether the District Court correctly dismissed Mr. Henson's complaint for lack of jurisdiction because Mr. Henson lacked standing to challenge the decision of the Internal Revenue Service not to contest a charitable deduction that a taxpayer might claim for a fixed donation to the Church of Scientology. STATEMENT OF THE CASE The Internal Revenue Service entered into a closing agreement with the Church of Scientology, under which the Internal Revenue Service to agreed to allow taxpayers who made payments to the Church with respect to qualified religious services to deduct those payments as charitable contributions Mr. Henson filed a complaint claiming that the Internal Revenue Service thereby acted illegally and caused him both injury-in-fact and injury as a federal taxpayer. As relief for his alleged injuries, Mr. Henson sought a declaration that the closing agreement was illegal, an injunc~ion against its *****fn 3/ Unless otherwise indicated, all statutory references ar to the Internal Revenue Code of 1986, as amended and in effect during the years at issue and at the time the complaint was filed. *****end fn -4 -~ enforcement, and damages in an unspecified amount. Mr. Henson asserted that the District Court had jurisdiction to grant him such relief because the case involved a Federal agency. (CR 3 at 2, 16-17.) The United States (Internal Revenue Service) filed a motion to dismiss the complaint for lack of jurisdiction, and a supporting memorandum, arguing, inter alia, that Mr. Henson lacked standing. (CR 8.) After Mr. Henson filed an opposition to the motion and a supporting memorandum (CR 15), the District Court granted the Government's motion to dismiss and entered judgment for the Government, holding that Mr. Henson lacked standing to bring the suit (CR 19 & 20). STATEMENT OF FACTS The Church of Scientology and the Internal Revenue Service executed a closing agreement in 1993 to settle a controversy spanning 30 years. (CR 1, Ex. 3, p. 2.) One aspect of the controversy involved the deductibility under I.R.C. 170 of payments that individuals made to the Church in exchange for the provision of educational and religious services, known as "audits" and "processing." Earlier, in 1978, the Internal Revenue Service had issued Rev. Rul. 78-189, 1978-1 C.B. 68, taking the position that the payments, which the Church called "fixed donations," were not deductible -5- as charitable contributions under I.R.C. 170, except to the extent that payments exceeded the fair market value of the services. Consistent with that position, in 1989, the United States Supreme Court held in Hernandez V. Commissioner, 490 U.S. 680, 692 (1989) , that, on the record before it, fixed donations to the Church were part of a quid pro quo exchange, and therefore did not constitute contributions or gifts under 170. Nonetheless, litigation regarding the deductibility of such fixed donations continued. See, e.g., Powell v. United States, 945 F.2d 374 (11th Cir. 1991). In 1993, as part of a closing agreement with the Church covering a number of ongoing suits, the Internal Revenue Service agreed not to contest deductions claimed by individuals for fixed donations to the Church in connection with qualified religious services, and to withdraw, obsolete or supersede Rev. Rul. 78-189. (CR 3, Ex. 3, part VII. B & E.) In accordance with that agreement, the Internal Revenue Service, in 1993, issued Rev. Rul. 93-73, 1993-2 C.B. 75, which declares that Rev. Rul. 78-189 is obsolete. In the present case, Mr. Henson claimed in his complaint that the Internal Revenue Service acted illegally in agreeing to allow charitable deductions for fixed donations to the Church, and in issuing Rev. Rul. 93-73 in accordance with that -6- agreement, because the allowance of such deductions was in violation of the Establishment Clause of the First Amendment to the United States Constitution and I.R.C. 170 as interpreted by Hernandez. (CR 3 at 1.) In support of his constitutional claim, Mr. Henson alleged that, pursuant to the terms of the closing agreement and the effect of Rev. Rul. 93-73, (1) the Internal Revenue Service gave tax benefits to Church members that were unavailable to members of other religions (CR 3 at 5, 12) , (2) the Internal Revenue Service compelled taxpayers who were not members of the Church "to subsidize Scientology education courses" (CR 3 at 14), and (3) the "closing agreement entangled the government (IRS) and Scientology to an impressive degree, making Scientology almost part of the IRS for enforcement of the tax code on its members" (CR 3 at 13). Mr. Henson maintained that he had standing to make those claims in the district court because (1) he was a federal taxpayer and (2) such conduct on the part of the Internal Revenue Service had caused him injury-in-fact. (CR 3 at 2-3, 6.) In support the latter claim, Mr. Henson alleged that various branches of the Church had used tax exempt funds to harass him with lawsuits and to pay private investigators to -7- attack his reputation and to attack him physically while picketing. (ifid.) As relief, Mr. Henson requested the district court (1) t declare that the Internal Revenue Service had acted illegally in agreeing to allow taxpayers who made fixed donations to the Church to deduct the payments as charitable contributions and enjoin such action (CR 3 at 18), (2) to set aside Rev. Rul. 93~73 (ifid.), and (3) to award him attorney's fees and "~p]unitive and exemplary damages in an appropriate amount" (CR 3 at 19). Mr. Henson asserted that the District Court had jurisdiction over the case under because his claims involved a Federal agency. (CR 3 at 2.) The Internal Revenue Service filed a motion to dismiss the complaint. (CR 8.) In support of the motion, the Internal Revenue Service argued (1) that Mr. Henson lacked standing to bring the case, (2) that the case was barred under the doctrine of sovereign immunity, and (3) that the Church of Scientology, which had not been joined, was an indispensable party to the suit. (ifid.) On June 28, 1999, Mr. Henson filed a response to the Internal Revenue Service's motion to dismiss, arguing that sovereign immunity was not a bar to his suit, that as a taxpayer he had standing to bring the suit -8- even without suffering injury, and that the Church was not an appropriate party to the action. (CR 15.) On August 20, 1999, the District Court issued an order granting the Internal Revenue Service's motion to dismiss on the ground that Mr. Henson lacked standing to bring the lawsuit. (CR 19 at 2.) The District Court held that Mr. Henson lacked standing as a "federal taxpayer" because (1) he was "not challenging congressional power, but rather [was] challenging an executive branch action, the IRS execution of a closing agreement with the Church," and (2) he "failed to show, and cannot show that the IRS' conduct exceeded constitutional limitations." (CR 19 at 3.) With regard to Mr. Henson's allegations that the Church had used tax exempt funds to harass and physically attack him, the District Court held that those allegations, if true, did not constitute injuries that were sufficient to confer standing because the injuries were not fairly traceable to the conduct of the Internal Revenue Service and, as Mr. Henson had acknowledged, were not likely to be redressed in the case. (Id.) In addition to finding that Mr. Henson lacked standing, the District Court held that Mr. Henson had failed to establish that the court had jurisdiction over the case. (CR 19 at 2.) The court did not address the Internal Revenue Service's -9- contention that the Church of Scientology was an indispensable party to the suit. Mr. Henson appeals. (CR 21.) SUMMARY OF ARGUMENT Mr. H. Keith Henson brought the instant action to obtain a declaration that the IRS's administrative decision to allo taxpayers who make fixed donations to the Church of Scientology to deduct the donations under 170 of the Internal Revenue Code was illegal, an injunction against its enforcement, and monetary damages. The District Court correctly dismissed the case on the ground that Mr. Henson lacked standing. 1. A federal court has no subject matter jurisdiction over a case if the plaintiff lacks standing. To establish standing, a plaintiff generally must show a distinct and palpable injury to himself which is likely to be redressed if the requested relief is granted. The injury must also be fairly traced to the challenged action of the defendant and not one that results from the independent action of a third party. Here, Mr. Henson alleged two injuries. One--that the Church has harassed and attacked him--results from the independent actions of third parties--i.e., the Church of Scientology--not from the challenged administrative decision - 10 - of the IRS to allow deductions for fixed donations to the Church. Moreover, as Mr. Henson has conceded, it is purely speculative whether the desired exercise of the court's remedial powers in this suit--i.e., declaratory and injunctive relief prohibiting the IRS from allowing the deductions~-would eliminate the alleged harassment and attacks on the part of the Church. 2. Mr. Henson also claimed that he had standing as a taxpayer who has been injured by the IRS's decision. A plaintiff has standing as a taxpayer only if he or she challenges the constitutionality of exercises of congressional power under the taxing and spending clause of the Constitution, and establishes a nexus between his status as a taxpayer and constitutional infringement alleged. Flast v. Cohen, 392 U.S. 83, 102-03 (1968). Mr. Henson, however, railed to satisfy either requirement. He failed to identify any manner in which Congress has exacted and spent his tax monies in contravention of a specific constitutional limitation on the taxing and spending power. Instead, he challenged an administrative decision of an agency of the executive branch that has no direct effect whatsoever on his tax obligations. Moreover, his contentions that the IRS's administrative decision violated the Establishment Clause of - 11 - the Constitution because it discriminates among religious organizations is speculative and meritless 3. Suits against the United States or its agencies are barred by the doctrine of sovereign immunity absent the enactment of a specific statute by Congress that waives the Government's immunity. There is no statute that grants the requisite consent for the instant action against the Internal Revenue Service and, accordingly, Mr. Henson's complaint was dismissible on that ground as well. In addition, Mr. Henson' 5 claim for declaratory relief is barred by 28 U.S.C. 2201. Finally, Mr. Henson failed to establish irreparable injury or the lack of an adequate remedy at law, the prerequisites to injunctive relief. The judgment of the district court is correct and should be affirmed. - 12 ARGUMENT THE DISTRICT COURT CORRECTLY DISMISSED MR. HENSON'S COMPLAINT FOR LACK OF JURISDICTION BECAUSE MR. HENSON LACKED STANDING TO CHALLENGE THE DECISION OF THE INTERNAL REVENUE SERVICE NOT TO CONTEST A CHARITABLE DEDUCTION THAT A TAXPAYER MIGHT CLAIM FOR A FIXED DONATION TO THE CHURCH OF SCIENTOLOGY Standard of Review Standing questions are reviewable de novo. Johns v. County of SAA Diego, 114 F.3d 874, 876 (9th Cir. 1997). Issue Raised and Ruled u~on The issue of Mr. Henson's standing was raised in the Internal Revenue Service's motion to dismiss the complaint (CR 8), and ruled upon in the district court's order granting the motion (CR 19). A. Introduction A federal court has no subject matter jurisdiction over a case if the "case or controversy" requirement of Article III of the Constitution, including the requirement that the plaintiff has standing, is not satisfied. Bender v. Williams~ort Area School District, 475 U.S. 534, 541-542 (1986). The basic principles that govern the question whether a plaintiff has standing to maintain a lawsuit in federal court are well established. "The fundamental aspect of standing is that it focuses on the party seeking to get his - 13 - complaint before a federal court." Flast v. Cohen, 392 U.S. 83, 99 (1968). A plaintiff must "allege [1 such a personal stake in the outcome of the controversy as to warrant his invocation of federal-court jurisdiction and to justify his exercise of the court's remedial powers on his behalf." Warth v. Seldin, 422 U.S. 490, 498-499 (1975) (emphasis in original) . The decision to seek review is placed only "in the hands of those who have a direct stake in the outcome" (Sierra Club v. Morton, 405 U.S. 727, 740 (1972)), in order to "assure that [there will exist] concrete adverseness which sharpens the presentation of issues upon which the court so largely depends for the resolution of difficult constitutional questions" (Baker v. Carr, 369 U.S. 186, 204 (1962)). "[C]oncerned bystanders," who seek to invoke the judicial power as a "vehicle for the vindication of value interests," lack standing to sue. United States v. SCRAP, 412 U.S. 669, 687 (1973). In this case, Mr. Henson challenged a purely administrative decision that the Internal Revenue Service made to allow individuals who make fixed donations to the Church of Scientology to deduct those payments as charitable contributions under I.R.C. 170. Thus, in 1993, the Internal Revenue Service agreed to allow deductions for fixed donations 14 - to the Church as part of a closin9 agreement that the Internal Revenue Service entered into with the Church of Scientolo9y to compromise long-standin9 litigation. See ~, Powell V. United States, 945 F.2d 374 (11th Cir. 1991) (distin9uishin9 Hernandez to overturn district court determination that member of Church of Scientolo9y failed to state a claim for deduction of fixed donation) . Mr. Henson asserted that the Internal Revenue Service's decision was illegal because it was inconsistent with Hernandez v. Commissioner, 490 U.S. 680 (1989). In his amended complaint, Mr. Henson claimed that he had a personal stake in the Internal Revenue Service's decision necessary for standin9 because (1) the Internal Revenue Service's decision to allow the deductions caused him specific and personal injuries, and (2) the Internal Revenue Service's decision caused injuries to him and others as federal taxpayers As the District Court held and as demonstrated below, however, neither of those alleged grounds were sufficient to confer standing upon Mr. Henson to maintain this case. B. Mr. Henson's allegations that the Church of Scientology used tax exemrt funds to harass and attack him were insufficient to establish standing against the Internal Revenue Service The core component of standing is that the exercise of judicial power is limited to litigants who can show "injury in - 15 - fact" resulting from the action which they seek to have the court adjudicate. Valley Forge Christian College V. Americans United for Se~aration of Church and State, Inc., 454 U.S 464, 472 (1982) Consequently, a plaintiff must allege a distinct and palpable injury to himself that is likely to be redressed if the requested relief is granted. See Allen V. Wright, 468 U.S. 737, 751 (1984); Simon V. Eastern Kentucky Welfare Rights Organization, 426 U.S. 26, 38, 41 n.22 (1976). "[S]tanding to sue may not be predicated upon an interest * * * which is held in common by all members of the public, because of the necessarily abstract nature of the injury all citizens share." Schlesinger V. Reservists Committee to Sto~ the War, 418 U.S. 208, 220 (1974). The "case or controversy" limitation of Article III requires that a federal court "act only to redress injury that fairly can be traced to the challenged action of the defendant, and not injury that results from the independent action of some third party * * * . " Simon, 426 U.S. at 41-42. "Absent such a showing, exercise of its power by a federal court would be gratuitous and thus inconsistent with the Article III limitation." 426 U.S. at 38. In the present case, Mr. Henson claimed in his amended complaint that the Internal Revenue Service's decision to allow individuals to claim charitable deductions for fixed - 16 - donations they made to the Church of Scientology injured him personally because the Church of Scientology allegedly harassed him with lawsuits and hired a private investigator to attack his reputation and attack him physically while he was picketing the Church. As the District Court held, however, those alleged personal injuries were insufficient to confer standing because they were not fairly traceable to or caused by the administrative action of Internal Revenue Service, and were not likely to be redressed by a decision of the District Court in Mr. Henson's favor. In this regard, the case of Simon V. Eastern Kentucky Welfare Rights Organization, 426 U.S. 26, in which the Supreme Court found that the plaintiffs lacked standing to litigate whether the Government was properly enforcing the tax laws against other persons, is instructive. In that case, a group of indigent plaintiffs sued Treasury off4cials to challenge a Revenue Ruling that allowed nonprofit hospitals to qualify for tax exemption under Section 501(c) (3) even if they provided indigents with no more than emergency room services. Although the Supreme Court acknowledged that some of the plaintiffs had been injured by the hospitals' relatively restrictive policy regarding services to indigents (ifid. at 40-41), the Supreme Court held that this injury did not confer standing to sue the - 17 - Government, because it was "purely speculative" whether the alleged injury could fairly be traced to the Government's tax enforcement ruling, "or instead result [5] from decisions made by the hospitals without regard to the tax implications" (id. at 42-43). Moreover, although the complaint alleged that the hospitals received "substantial donations deductible by donors," the Supreme Court stated that it was "speculative at best" to infer that the hospitals were so financially dependent on the favorable tax exempt treatment that they would admit the indigents if required to do so as a condition of receiving the tax benefit. Id. at 43. See also Allen, 468 U.S. at 758-759 (inadequate desegregation of public schools not properly traceable to tax exemptions being challenged) The Supreme Court in Simon V. Eastern Kentucky Welfare Rights Organization also found standing lacking because it was equally speculative whether the desired exercise of the Court's remedial powers in this suit would result in the availability to [the plaintiff group of indigents] * * * of such services." Id. at 43. When these principles are applied to the facts of the amended complaint at hand, it is obvious that the attempt to invoke federal-court jurisdiction here suffers from the same weaknesses as did the complaint in Simon V. Eastern Kentucky - 18 - Welfare Rights Organization. "It is purely speculative" that the alleged harassment and attacks that the Church allegedly imposed upon Mr. Henson can be traced to the Internal Revenue Service's decision in 1993 to allow charitable contribution deductions to individuals who make fixed payments to the Church. Rather, the alleged harassment and attacks resulted from the independent actions of a third party--i.e., the Church of Scientology and the private investigators that the Church allegedly hired. See Simon, 426 U.S. at 41. Moreover, although Mr. Henson alleged that the Church financed its persecution of him with tax-exempt funds, it was "speculative at best" to infer from that allegation that the funds that the Church utilized to harass and attack Mr. Henson consisted of fixed donations that the Church received after 1993, or that the Church would not have harassed and attacked Mr. Henson had those payments been nondeductible. See Simon, 426 U.S. at 43. By the same token, "[i]t is equally speculative whether the desired exercise of the court's remedial powers in this suit" --i.e., a declaration that the Internal Revenue Service's action in allowing individuals to deduct fixed payments to the Church was illegal and the setting aside of Rev. Rul. 93-73-- would cause the Church of Scientology to modify its behavior toward Mr. Henson. See Simon, 426 U.S. at 43. Indeed, as the - 19 - District Court noted (CR 19 at 3),Mr. Henson conceded in the District Court that the Church was unlikely to cease its alleged persecution of him even if he prevailed in this action. (CR 15 at 18.) Thus, Mr. Henson's claim of standing rests "'on little more than the remote possibility, unsubstantiated by allegations of fact, that [his] situation might have been better had [the Internal Revenue Service] acted otherwise, and might improve were the court to afford relief.'" Simon, 426 U.S. at 44 (quoting Warth, 422 U.S. at 507). Such "unadorned speculation will not suffice to invoke the federal judicial power." Simon, 426 U.S. at 44. C. Mr. Henson's contention that he alternatively had standing as a federal taxrayer to challenge the Internal Revenue Service's administrative decision lacked merit The Supreme Court first considered the question whether a taxpayer has standing to challenge the appropriation of moneys to administer an assertedly unconstitutional statute in Frothingham V. Mellon, 262 U.S. 447 (1923). There, the Court rejected, for lack of standing, a taxpayer challenge to the constitutionality of the Maternity Act of 1921, which provided federal funding to the states for the purpose of reducing maternal and infant mortality. The Supreme Court concluded that, in substance, the "injury" alleged was the expenditure of government funds in the administration of an assertedly - 20 - unconstitutional statute. Id. at 488. But as the Court explained, the interest of a taxpayer "in the moneys of the Treasury * * * is shared with millions of others; is comparatively minute and indeterminable; and the effect upon future taxation, of any payment out of the funds, so remote, fluctuating and uncertain, that no basis is afforded for an appeal to the preventive powers of a court of equity." Id. at 487. The Court stated that "[t]he administration of any statute, likely to produce additional taxation to be imposed upon a vast number of taxpayers, the extent of whose several liability is definite and constantly changing, is essentially a matter of public and not individual concern." Ibid. The taxpayer's asserted injury to her pocketbook was not judicially cognizable, because a plaintiff "must be able to show not only that the statute is invalid but that he has sustained or is immediately in danger of sustaining some direct injury as the result of its enforcement, and not merely that he suffers in some indefinite way in common with people generally." Id. at 488. The decision in Frothingham V. Mellon stood for nearly half a century as an absolute bar to federal taxpayers' standing gua taxpayers to challenge the execution of a federal appropriation action. Then, in Flast V. Cohen, 392 U.S. 83 - 21 - (1968), taxpayers sued to enjoin the expenditure of funds under a federal statute granting financial aid to religious schools. The Court stated that "we find no absolute bar in Article III to suits by federal taxpayers challenging allegedly unconstitutional taxing and spending programs." Id. at 102. The Court found that "[w]hether such individuals have standing to maintain that form of action turns on whether they can demonstrate the necessary stake as taxpayers in the outcome of the litigation to satisfy Article III requirements." Ibid. In order to show this stake, the Court in Flast established a two-prong test. First, a taxpayer must show a "logical link" between his status as a taxpayer and the type of legislative enactment attacked. 392 U.S. at 102. A taxpayer would be a proper party to challenge the unconstitutionality "only of exercises of congressional power under the taxing and spending clause of Art. I, ~ 8, of the Constitution"1/ (ibid.), and not "the incidental expenditur of tax funds in the administration of an essentially regulatory statute" (ibid.). Second, the taxpayer must show a fn********** 1/ Article I, Section 8, Clause 1 of the Constitution of the United States authorizes Congress to "lay and collect Taxes * * * and provide for the common Defence and general Welfare of the United States." end fn ****** - 22 - nexus between his status as taxpayer "and the precise nature of the constitutional infringement alleged." (Ibid.) Th challenged enactment must exceed "specific constitutional limitations imposed upon the exercise of the congressional taxing and spending power" (id. at 102-103), and "not simply that the enactment is generally beyond the powers delegated to Congress by Art. I, ~ 8' (id. at 103). The Court in Flast went on to hold that the Establishment Clause of the First Amendment "operates as a specific constitutional limitation upon the exercise by Congress of the taxing and spending power conferred by Art. I, 8." 392 U.S at 104. In the Court's view, the taxpayers had established both criteria, in that federal tax money had been disbursed to finance instruction in religious and sectarian schools under a statute enacted under the authority of Article I, Section 8, and further, that the funds were being sent in violation of a specific constitutional limitation upon the taxing and spending power, namely, the Establishment Clause. As a result, the taxpayers in Flast had "the requisite personal stake" in the litigation (392 U.S. at 101) to maintain standing to sue. The Flast test for taxpayer standing, however, serves as an overlay to the minimum Article III requirement of an actual - 23 - injury. Bell V. City of Kellogg, 922 F.2d 1418, 1422 (9th Cir. 1991). Thus, to invoke the Flast test for taxpayer standing, the plaintiff must first allege that he is a federal taxpayer and that he was injured due the government's wrongful expenditure of tax revenues. Doe V. Madison School District, 177 F.3d 789, 793-794 (9th Cir. 1999). Mr. Henson claimed in this case that he had standing as a federal taxpayer to challenge the decision of the Internal Revenue Service to allow individuals who make fixed payments to the Church of Scientology to deduct those payments as charitable contributions under 170. As the District Court held, however, Mr. Henson's claim is meritless. To begin with, Mr. Henson challenges only the Internal Revenue Service's administrative decision to allow the deductions to other taxpayers; he does not complain about any expenditure of tax revenues. He therefore failed to allege an actual financial injury to himself as a taxpayer, as is minimally required under Article III of the constitution for a plaintiff to have standing as a federal taxpayer. See Valley Forge Christian College V. Americans United for Se~aration of Church & State, Inc., 454 U.S. 464, 485 (1982) (holding that plaintiffs lacked standing to challenge as unconstitutional conveyance of surplus federal property to sectarian - 24 - institutions, because plaintiffs "fail[ed] to identify any personal injury suffered by them as a conse~uence of the alleged constitutional error, other than the psychological consequence presumably produced by observation of conduct with which one disagrees") Furthermore, under Flast, a taxpayer has standing to challenge "only exercises of congressional power" (Flast, 418 U.S. at 102); he does not have standing to challenge "a decision by the executive branch" (Ranid Transit Advocates V. Southern California Ra~id Transit, 752 F.2d 373, 379 (9th Cir. 1985)). For example, in Schlesinger V. Reservists Committee to Ston the War, 418 U.S. 208, 221 (1974) the plaintiffs sought to have members of Congress then serving in the armed forces reserves barred from such service under the Incompatibility Clause, Article I, Section 6, Clause 2 of the Constitution, which prohibits members of Congress from holding "any Office of the United States." The Supreme Court rejected the claim that the plaintiffs had standing to sue as taxpayers, because the plaintiffs "did not challenge an enactment under Art. I, 8, but rather the action of the Executive Branch in permitting Members of Congress to maintain their Reserve status." Id. at 228 (footnote omitted) . The Court's decision in Valley Forge Christian College, 454 U.S. - 25 - at 478-481, is to the same effect. There, the Court rejected the plaintiffs' claim that they had standing as taxpayers to challenge the transfer of surplus federal property, because the plaintiffs were challenging an action by the Department of Health, Education, and Welfare rather than a "congressional action. In this case, the source of the Internal Revenue Service's decision to allow the deduction of fixed donations to the Church of Scientology was the closing agreement that the Internal Revenue Service entered into with the Church in compromise of long-standing tax disputes. As part of that closing agreement, the Internal Revenue Service agreed to no longer contest deductions that taxpayer claimed under Section 170 of the Code for fixed donations to the Church. In challenging that closing agreement, Mr. Henson makes no challenge to the constitutionality of any legislative enactment, much less (1) to the legislative enactments pursuant to which the Internal Revenue Service entered into the closing agreements (which are I.R.C. 7121 and 7122), or (2) to I.R.C. 170 (which provides for the deduction of charitable contributions) . Instead, Mr. Henson challenges an administrative decision that the Internal Revenue Service made in executing those statutory provisions. The Internal Revenue - 26 - Service, however, made that decision as a federal agency of the Treasury Department, which is part of the executive branch of the United States. Accordingly, its decision to agree as part of its closing agreement not to contest deductions claimed for fixed donations to the Church of Scientology was an executive branch decision, and not an exercise of Congressional power. It follows that, as the District Court held, Mr. Henson's amended complaint did not satisfy the first prong of the Flast test. In his brief on appeal (at 3-4), Mr. Henson incorrectly suggests that a federal taxpayer does have standing to challenge the constitutionality of an executive branch action. In this regard, he cites Bowen V. Kendrick, 487 U.S. 589 (1988). His reliance upon that case, however, is misplaced. There, the Court held that where a taxpayer challenges the constitutionality of a legislative enactment on its face, his challenge to the legislation "as applied" by the agency responsible for executing is similarly a challenge to the constitutionality of the legislative enactment. See 487 U.S. at 618-619. Here, Mr. Henson does not challenge the constitutionality of any legislative enactment. Jnstead, he contends that the Internal Revenue Service allowed deductions for fixed donations to the Church of Scientology in violation - 27 - of I.R.C. 170, as interpreted by the Supreme Court in Hernandez. His challenge is therefore readily distinguishable from the one at issue in Bowen. Morever, even if Mr. Henson's amended complaint could be construed as challenging an exercise of congressional power (which it cannot), Mr. Henson nonetheless failed to satisfy the second prong of the Flast test. To show that the closing agreement violated a constitutional limitation imposed upon Congress' 5 power to tax and spend, Mr. Henson claimed the agreement violated the Establishment Clause of the constitution because (1) its purpose was to advance the Church of Scientology, (2) it's effect was to discriminate among religions by allowing deductions to members of the Church of Scientology that are not allowed to members of other religions, (3) it forces taxpayers to subsidize the Church of Scientology, and (4) the decision advanced the Church of Scientology over other religions and fostered excessive entanglement of the government in the Church's affairs (CR 3 at 13). The first and second claims listed above were insufficient because they were purely speculative. See Los Angeles V. Lyons, 461 U.S. 95, 102 (1983) (injury required for standing must be immediate," not "conjectural" or - 28 - "hypothetical") Indeed, Mr. Henson offered no factual allegations to support his claim that the Internal Revenue Service entered into the closing agreement for the purpose of preferring the Church of ScientolQgy over other religious organizations. To the contrary, the closing agreement itself states that its purpose is to compromise long-standing litigation with the Church. (CR 3, Ex. 3 p.2.) Furthermore, Mr. Henson made no factual allegations, and offered no legal authorities, suggesting that, after entering into the closing agreement, the Internal Revenue Service contested or disallowed any deduction that a taxpayer claimed for a payment he made to another religious organization that was similar to the fixed donations to Church of Scientology involved in the closing agreement. The third constitutional claim listed above was insufficient because it was meritless. It has long been settled that tax exemptions for charitable organizations, and, consequently, tax deductions for donations to charitable organizations, including churches and other religious organizations, do not violate the First Amendment. Walz V. Tax Commission of the City of New York, 397 U.S. 664, 673-673 (1970); id. at 685 (Brennan, J. concurring) ("No judicial decision, state or federal, has ever held that [tax exemptions 29 for reli9ious or9anizations] violate the Establishment Clause.") ; Mueller V. Allen, 463 U.S. 388, 397-99 (1983) (approving tax deduction for educational expenses that applied to expenses incurred at broad range of public and private schools, sectarian as well as non-sectarian) Finally, Mr. Henson's fourth constitutional claim was also insufficient to satisfy the second prong of the Flast test. In making that claim, Mr. Henson was essentially contending that, in deciding as part of the closing agreement to allow charitable deductions for fixed donations to the Church, the Internal Revenue Service necessarily made a denominational preference and necessarily became excessively entangled with the Church, in violation of the Establishment clause. In Hernandez V. Commissioner, 490 U.S. 680 (1989), the Supreme Court rejected the very same contention with respect to I.R.C. ~ 170. There, to determine if ~ 170 created unconstitutional denominational preferences, even though it did not facially differentiate among religions, the Court applied "the customary three-pronged Establishment Clause inquiry derived from Lemon v. Kurtzman, 403 U.S. 602' (1971). Hernandez, 490 U.S. at 695. Under that test, a legislative enactment accords with the Establishment Clause so long as (1) it has a secular purpose, (2) its principle effect is one that - 30 - neither advances nor inhibits religion, and (3) the statute does not foster "an excessive entanglement with religion." Id. at 695, n. 11. The Court held that Section 170 easily passed (1) the first part of that test because it "is neutral in both design and purpose" with respect to differing religious organizations, (2) the second part of the test because its did not endorse any religion or religious practice, and (3) the third part of the test because the determination of whether a payment to a religious organization was deductible under its Section 170 requires only "routine regulatory action which involves no inquiries into religious doctrine, * * * no delegation of state power to a religious body, * * * and no 'detailed monitoring and close administrative contact' between secular and religious bodies." Id. at 696-697 (citations omitted) Here, as was the case with I.R.C. ~ 170 in Hernandez, the closing agreement that Mr. Henson challenges does not facially differentiate among religions. Instead, the agreement addresses the deductibility only of fixed donations to the Church of Scientology; the agreement des not address the deductibility of payments to any other religious organizations. Furthermore, the purpose of the agreement is to compromise litigation. That purpose is secular. Moreover, - 31 - the closing agreement does not endorse the Church of Scientology or its religious practices. Instead, it merely provides that the Internal Revenue Service will not contest deductions claimed for fixed donations to the Church. Finally, ascertaining whether a payment is a fixed donation and therefore is deductible under the terms of the closing agreement involves only routine regulatory practice, with no entanglement in religious doctrine or other religious concerns. See Hernandez, 490 U.S. at 696-697. D. Alternatively, Mr. Henson claims were barred under the doctrine of sovereign immunity It is well settled that the United States, as sovereign, may not be sued without its consent and that the terms of its consent define the court's jurisdiction.~/ United States v. Mitchell, 445 U.S. 535, 538 (1980); United States v. Testan, 424 U.S. 392, 399 (1976); United States v. Sherwood, 312 U.S. 584, 586 (1941); United States v. Shaw, 309 U.S. 495, 500-501 (1940). In this regard, sovereign immunity is waived only by a statute specifically providing for the maintenance of a suit against the United States. See Holloman v. Watt, 708 F.2d fn******* 5/ Mr. Henson's complaint against the Internal Revenue Service was invalid on its face as Congress has not authorized suits against that agency en nominee. See Blackmar v. Guerre, 34 U.S. 512 (1952). Nonetheless, the District Court treated Mr. Henson's complaint as one against the United States, and we adhere to that treatment in this brief. end fn ****** - 32 - 1399, 1401 (9th Cir. 1983), cert. denied sub nom. Holloman v. Clark, 466 U.S. 958 (1984); Essex v. Vinal, 499 F.2d 226, 231 (8th Cir. 1974) , cert. denied, 419 U.S. 1107 (1975); Geurkink Farms, Inc. v. United States, 452 F.2d 643, 644 (7th ~ir. 1971). A waiver of sovereign immunity must be strictly construed. Honda v. Clark, 386 U.S. 484, 501 (1967); Soriano v. United States, 352 U.S. 270, 276 (1957). Where there is no statute expressly waiving sovereign immunity, dismissal of the action is required. Hutchinson v. United States, 677 F.2d 1322, 1327 (9th Cir. 1982); Stout v. United States, 229 F.2d 918, 919 (2d Cir. 1956), cert. denied, 351 U.S. 982 (1956). The burden is upon the party bringing the action to demonstrate that the United States has consented to suit. Hill v. United States, 571 F.2d 1098, 1102-1103 (9th Cir. 1990) It is clear that Mr. Henson's complaint against the Internal Revenue Service--i.e., that the Internal Revenue Service's decision to allow charitable deductions for fixed donations to the Church of Scientology is illegal--cannot be entertained absent a waiver of sovereign immunity. Mr. Henson, however, cited no statutory waiver of sovereign immunity applicable to the instant action, and, indeed, there - 33 - is none.6/ Thus, as the District Court held, Mr. Henson "failed to establish that the Court has jurisdiction over this case." (CR 19 at 2.) The District Court's exercise of jurisdiction over Mr. Henson's request for declaratory relief also was barred by 28 U.S.C. ~ 2201. That section provides district courts with fn********* 6/ Although the complaint alleged that the Internal Revenue Service violated 42 U.S.C., Sections 1985, and 1986, those statutes cannot waive the sovereign immunity of the United States since they do not specifically provide for the maintenance of suits against the United States. See e.g., Morourgo v. Board of Higher Education in City of New York, 423 F. Supp. 704, 714 (S.D. N.Y. 1976) (United States cannot be sued under 42 U.S.C., Sections 1983 and 1985 "because it is not a 'person' and because these provisions do not waive sovereign immunity"); Broome v. Simon, 255 F. Supp. 434, 440 (W.D. La. 1966) ("[n]one of the civil rights statutes * * * expressly or inferentially authorize suit against the United States") . See also Beale v.Blount, 461 F.2d 1133, 1138 (5th Cir. 1972) (28 U.S.C., Section 1343, which grants the district courts original jurisdiction of actions under 28 U.S.C., Sections 1983, 1985, and 1986, "may not be construed to constitute waivers of the federal government's defense of sovereign immunity" .) Nor does the mere allegation of constitutional violations provide the necessary waiver of sovereign immunity. While 28 U.S.C., Section 1331 provides the district courts with ''original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States," the Courts of Appeals have specifically held that 28 U.S.C., Section 1331 is not a general waiver of sovereign immunity. Gilbert v. DaGrossa, 756 F.2d 1455 (9th Cir. 1985); Cotter Cor~. v. Seaborg, 370 F.2d 686, 692 n.15 (10th Cir. 1966); Radin v. United States, 699 F.2d 681, 685 n.9 (4th Cir. 1983); Murray v. United States, 686 F.2d 1320, 1325 (8th Cir. 1982) cert. denied, 459 U.S. 1147 (1983); Estate of Watson v. Blumenthal, 586 F.2d 925 (2d Cir. 1978); Beale v. Blount, suora. end fn ******* - 34 jurisdiction over cases seeking declaratory relief. A specific exception exists, however, for disputes "with respect to Federal taxes." Here, Mr. Henson sought a declaration that the IRS's decision to allow deductions for fixed donations to the Church was illegal because it was contrary to I.R.C. ~ 170 and to the decision of the Supreme Court in Hernandez. To the extent he sought declaratory relief, his suit was "with respect to Federal taxes," and the district court lacked jurisdiction to consider it. See Hughes v. United States, 953 F.2d 531, 536-537 (9th Cir. 1992). Mr. Henson also requested injunctive relief apparently to prohibit the IRS from allowing deductions for fixed donations to the Church.2/ In order to obtain such relief, Mr. Henson was required to show that, absent the injunction, there was no adequate remedy at law and he would suffer irreparable injury. See Enochs v. Williams Packing & Navigation Co., 370 U.S. 1, 6-7 (1962). Mr. Henson, however, failed to allege facts that if true, would make that showing. As discussed above, he failed to allege an injury that was sufficient to establish his standing to sue the IRS, much less any irreparable injury. fn ******* 7/ We note that the Anti-Injunction Act (I.R.C. ~ 7421(a)) prohibits injunctions against the Government "for the purpose of restraining the assessment or collection of any tax ...." Thus, injunctive relief is generally barred against the Government in tax cases. end fn ***** - 35 - Moreover, with regard to his claims that the Church harassed and attacked him, he has an adequate remedy at law--he can sue the Church. And his grievances about the manner in which the IRS enforces the tax laws is "subject matter [that] is committed to the surveillance of Congress." See United States V. Richardson, 418 U.S. 166, 179 (1974) .8/ fn ******** 8/ In the district court, we argued in the alternative that dismissal was appropriate because Mr. Henson failed to name the Church of Scientology as an party to this suit, as required under Rule 19(a), Fed. R. Civ. P. (CR 8 at 12-13.) Although the District Court did not address that argument, because it dismissed the case on jurisdictional grounds, we adhere to our position that the Church was an indispensable party to the suit. end fn ******* - 36 - CONCLUSION For the reasons stated above, the judgment of the District Court should be affirmed. Respectfully submitted, PAULA M. JUNGHANS Acting Assistant Attorney Generai ~~Šy <$q/~~ KENNETH L. GREEN~ (202) 514-3573 LAURIE SNYDER (202) 514-6066 Attorneys Tax Division Denartment of Justice Post Office Box 502 Washington, D.C. 20044 Of Counsel: MICHAEL J. YAMAGUCHI United States Attorney JAY ROBERT WEILL Assistant United States Attorney MARCH 2000 - 37 STATEMENT OF RELATED CASES Pursuant to Local Rule 28-2.6, counsel for the appellee state that they are not aware any related cases pending in this Court. - 38 -