44 U. Colo. L. Rev. 447 (1972-1973)
New Test for Suits Seeking to Halt Governmental Support to Private Discriminating Organizations - Impermissible State Action: McGlotten v. Connally

handle is hein.journals/ucollr44 and id is 449 raw text is: A NEW TEST FOR SUITS SEEKING TO HALT
GOVERNMENTAL SUPPORT TO PRIVATE
DISCRIMINATING ORGANIZATIONS -
IMPERMISSIBLE STATE ACTION:
McGlotten v. Connally
National fraternal organizations have recently been under in-
creasing attack for their racially discriminatory membership and
guest policies. In McGlotten v. Connally,' the Federal District Court
for the District of Columbia enjoined the Secretary of the Treasury
from granting certain tax benefits2 to fraternal organizations which
discriminate on the basis of race in their membership policies. More
recently, the United States Supreme Court in Moose Lodge No. 107
v. Irvis3 reversed a federal district court order4 directing the Pennsyl-
vania Liquor Control Board to cancel a private club liquor license
issued to a local chapter of the Moose Lodge which discriminated in
its membership and guest policies. Although discrimination by pri-
vate clubs was specifically exempted from the broad prohibitions on
racial discrimination contained in the 1964 Civil Rights Act,' the
decision in McGlotten indicates that certain governmental support of
private clubs is not permitted either by the Act or the Constitution.
This note addresses the question of how to determine whether a
particular form of governmental support to a private discriminating
organization is constitutionally impermissible and whether the means
I. 338 F. Supp. 448 (D.D.C. 1972).
2. Nonprofit clubs and fraternal organizations operating under the lodge system are
exempted from taxation under INT. REV. CODE OF 1954,  501(c)(7), (8) [hereinafter cited by
Section number only].
Individual contributions to nonprofit clubs and fraternal organizations used exclusively
for religious, charitable, scientific, literary, or educational purposes, or for the prevention of
cruelty to children or animals are deductible by the contributor for income, estate and gift
tax purposes under Sections 170(c)(4), 642(c), 2055(a)(2), (3), 2106(a)(2)(A)(ii), (iii), and
2522(a)(2), (3) and (b)(2), (3). These sections thereby encourage gifts to nonprofit clubs and
fraternal organizations.
The holding in McGlotten prevented any of the benefits provided by these sections from
inuring to discriminating fraternal organizations. Not only must passive investment income of
discriminating fraternal organizations be treated similarly to that of nonprofit clubs, but contri-
butions to discriminating fraternal organizations can no longer be treated as tax deductible to-
the contributor. The plaintiff in McGlotten did not question the deductibility of individual
contributions to discriminating nonprofit clubs, but these deductions, using the McGlotten
court's analysis, should prove to be unconstitutional when the issue is presented to a court.
3. 407 U.S. 163 (1972).
4. Irvis v. Scott, 318 F. Supp. 1246 (M.D. Pa. 1970).
5. 42 U.S.C.  2000a(e) (1970).

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