Abulhawa v. United States Department of the Treasury, 239 F. Supp. 3d 24

Background

Thirty-seven plaintiffs challenge the Treasury Department’s alleged failure to investigate or revoke 501(c)(3) tax-exempt status of approximately 200 U.S. organizations that plaintiffs claim fund Israeli settlement activity in the West Bank and East Jerusalem.
Plaintiffs allege those U.S. charities act as pass-throughs to settlers and Israeli groups that commit property seizures, violence, and other unlawful acts, and seek declaratory and prospective injunctive relief compelling Treasury investigations, revocations of tax-exempt status, and referrals for criminal prosecution.
Plaintiffs filed an amended complaint and sought leave to file a second amended complaint adding five plaintiffs who claim specific harms (loss or threatened loss of land, assault, loss of property), while a third party, Sam Abrams, moved to permissively intervene proposing claims of his own.
Defendants moved to dismiss for lack of Article III standing and failure to state a claim; they opposed amendment and intervention on jurisdictional grounds.
The court considered whether any plaintiff (or prospective intervenor) adequately pleaded the three standing elements—injury in fact, causation (traceability), and redressability—and reviewed the pleadings under Rule 12(b)(1) standards.
The court concluded that, although some plaintiffs allege concrete injuries, none adequately alleged causation or redressability because the asserted chain linking Treasury inaction to plaintiffs’ harms depended on speculative, independent third-party actions; thus the complaint was dismissed, amendment denied as futile, and intervention denied.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Article III standing — injury in fact	Plaintiffs asserted concrete injuries (e.g., lost or threatened land, assaults) and generalized harms from financing of settlements	Defendants conceded some plaintiffs alleged concrete injuries but argued the case fails for lack of causation and redressability	Court: Some plaintiffs allege injury in fact, but standing fails on other two prongs
Article III standing — causation / traceability	Plaintiffs argued Treasury’s grant/failure to revoke 501(c)(3) status enabled fundraising that funded settlers and caused plaintiffs’ harms (a relatively direct chain)	Defendants argued the causal chain is attenuated and depends on independent third-party decisions (donors, charities, settlers), citing Allen and related precedent	Court: Causation is too attenuated; speculative third-party actions break the chain; standing not met
Article III standing — redressability	Plaintiffs sought prospective relief (investigation, revocation, prosecutions) asserting these steps would reduce funding and prevent future injuries	Defendants argued the requested relief would not likely redress past injuries and would only speculatively affect future harms because donors/third parties might continue support or settlers might act regardless	Court: Relief would not likely redress plaintiffs’ past injuries and would only speculatively avert future harms; redressability not satisfied
Intervention (Rule 24(b))	Abrams sought permissive intervention to require investigations of charities hostile to Israel if plaintiffs’ claims proceed	Defendants argued Abrams lacks standing and thus cannot invoke subject-matter jurisdiction needed to litigate his separate claim	Court: Permissive intervention denied because no party (including Abrams) has Article III standing and court lacks a case or controversy

Key Cases Cited

Arpaio v. Obama, 797 F.3d 11 (D.C. Cir. 2015) (pleading-stage standing standards and factual-acceptance rule)
West v. Lynch, 845 F.3d 1228 (D.C. Cir. 2017) (standing elements and redressability analysis)
Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (three-part Article III standing test)
Allen v. Wright, 468 U.S. 737 (1984) (attenuated causation from IRS tax-exemption decisions defeats standing)
Haase v. Sessions, 835 F.2d 902 (D.C. Cir. 1987) ( Rule 12(b)(1) standing evidence and jurisdictional principles)
Scenic Am., Inc. v. U.S. Dep’t of Trans., 836 F.3d 42 (D.C. Cir. 2016) (redressability complicated by independent third-party actions)
Nat’l Wrestling Coaches Ass’n v. Dep’t of Educ., 366 F.3d 930 (D.C. Cir. 2004) (need for substantial evidence tying government policy to third-party conduct for standing)
Fulani v. Brady, 935 F.2d 1324 (D.C. Cir. 1991) (doubts about standing where relief seeks removal of a third party’s tax exemption)
City of Los Angeles v. Lyons, 461 U.S. 95 (1983) (injunctive relief inappropriate absent likelihood of future harm)
Steel Co. v. Citizens for a Better Environment, 523 U.S. 83 (1998) (court must resolve jurisdiction before addressing merits)