This section contains the nature of the case and procedural background.

Hospitals and other health organizations have never been expressly categorized as tax-exempt and have achieved that status only by qualifying as 'charitable' organizations. IRS policy held that hospitals qualified as charitable organizations under 501(c)(3) only if they provided free or below-cost service to those unable to pay. This policy was articulated in Revenue Ruling 56-185, which held that a hospital could qualify for tax-exempt status only if it was 'operated to the extent of its financial ability for those not able to pay for the services rendered and not exclusively for those who are able and expected to pay.' The IRS then issued Revenue Ruling 69-545. It defines 'charitable' in terms of community benefit and holds that the promotion of health constitutes a 'charitable purpose' in the 'generally accepted legal sense of that term' and within the meaning of § 501(c)(3) of the Code. Based on its new community benefit concept, a nonprofit hospital can qualify as a charitable organization under § 501 (c) (3) 'By operating an emergency room open to all persons and by providing hospital care for all those persons in the community able to pay the cost thereof either directly or through third party reimbursement . . .' For a hospital to qualify as a tax-exempt organization, the provision of free or below-cost service to those unable to pay is no longer essential. Ps brought this action seeking to declare Revenue Ruling 69-545 invalid and to enjoin its implementation. They submitted affidavits recounting incidents involving the denial of hospital services to indigents by institutions enjoying tax-exempt status as 'charitable' organizations. Ps claimed this new reg was in violation of Congressional intent, a violation of the APA, and an abuse of discretion. Ds moved for dismissal claiming the court lacked jurisdiction to entertain the action. The court denied this motion without opinion. The court granted summary judgment in favor of Ps.

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