PRINCE EDWARD SCHOOL FOUNDATION v. UNITED STATES
No. 80-484
Supreme Court of the United States
450 U.S. 944
C. A. D. C. Cir. Certiorari denied.
The initial question presented by this petition is whether the Internal Revenue Service is entitled to deny tax-exempt status to a private school which discriminates in its admissions policy. If so, the additional question posed is what steps a private school must take in order to establish that its admissions policy is in fact nondiscriminatory.
Petitioner, Prince Edward School Foundation, was formed as a nonprofit private school foundation to operate elementary and secondary schools in Prince Edward County, Va. The principal purpose for petitioner‘s establishment was to ensure a segregated education for the white children who attended petitioner‘s schools. Griffin v. School Board of Prince Edward County, 377 U. S. 218, 223, 231 (1964). Presently, petitioner‘s sole activity is the operation of one private school, Prince Edward Academy.
From 1959 until 1970, petitioner was considered by the Service as a tax-exempt organization within the terms of
In 1970, the Service announced that it would no longer recognize the tax-exempt status of any private school unless the school adopted and administered a nondiscriminatory admissions policy. This new position was announced during the course of litigation in Green v. Connally, 330 F. Supp. 1150 (DC 1971), in which the Service‘s prior policy was being challenged. A three-judge panel in Green thereafter ruled that a private school is not entitled to acquire or retain exempt status under
To effectuate its new policy regarding tax exemptions for private schools, the Service issued Revenue Procedure 72-54 (currently Rev. Proc. 75-50, 1975-2 Cum. Bull. 587), which requires a private school seeking tax-exempt status to pub-
Petitioner has continuously refused to publicize that its school has a racially nondiscriminatory admissions policy, although it has steadfastly contended that in fact this is the case. (App. to Pet. for Cert. 49a.) In 1978, the Service revoked petitioner‘s exempt status because it “[had] not complied with the requirements of Revenue Procedure 75-50 nor any of its guidelines that preceded it and [has] not demonstrated that [it has] adopted a racially nondiscriminatory policy as to students. . . .” (Id., at 18a.)
Thereafter, petitioner brought this action under
On cross-motions for summary judgment, the District Court upheld the Service‘s determination. The District Court concluded:
“It is accordingly undisputed that the plaintiff has never admitted, never received an application from, and thus has never denied admission to a black person. Notwithstanding the absence of direct evidence in either party‘s favor, it remains the plaintiff‘s burden to establish that
its policy is to admit black students on the same basis as those of other races. The plaintiff has failed to present any evidence to that effect. On the other hand, the inference that plaintiff in fact administers a racially discriminatory policy may be drawn from the circumstances surrounding the school‘s establishment. . . . A further inference that plaintiff administers a racially discriminatory admissions policy can be drawn from the fact that plaintiff has previously conceded that it practiced a racially discriminatory policy of exclusiveness, was subsequently enjoined from such practices by court order, but has failed to present any evidence that it has since modified that policy.”2
The questions presented by this petition are of widespread importance. The validity of the Service‘s policy of denying tax-exempt status to private schools which have a racially discriminatory admissions policy is not apparent from a reading of the relevant provisions of the 1954 Code.
Given the general rule that words of a statute, including the Revenue Acts, should be interpreted where possible in their ordinary, everyday sense, Malat v. Riddell, 383 U. S. 569, 571 (1966); Hanover Bank v. Commissioner, 369 U. S. 672, 687 (1962), the authority of the Secretary of the Treasury to promulgate this policy regarding the tax status of private schools is sufficiently questionable to merit review by this Court. Perhaps, implementation by the Service of the express language of the statute will, as suggested by the District Court in Green v. Connally, supra, create problems of a constitutional nature. That, however, is a question that this Court, as opposed to the Service, is better equipped to address.
Assuming, arguendo, the validity of the Service‘s policy pertaining to private schools, the determination made by the District Court that petitioner does not qualify for tax-exempt treatment is questionable on the record before us. Petitioner was, and still is, under a court order not to discriminate in its admissions. No contempt proceedings have been initiated against the petitioner for violation of that order. Moreover, the District Court had before it sworn affidavits that petitioner has an open admissions policy. Admittedly, petitioner refused to advertise this open admissions policy, but the Service‘s requirement of such is one step further removed from the express language of the statute and therefore of even more questionable statutory and constitutional validity.
Not surprisingly, petitioner has not had the opportunity to demonstrate the sincerity of its open admissions practice. Petitioner has retained, and in fact teaches, its belief that racial segregation is desirable. The Court, however, has upheld the First Amendment right of parents to send their children to educational institutions such as petitioner‘s, although we have condemned as unlawful the practice of deny-
Because I believe the time has come for this Court to deal with the difficult statutory and constitutional questions raised in this petition, I dissent from the denial of the petition for a writ of certiorari.