Commercial Litigation and Arbitration

Elements of Associational Standing — Associational Standing Exists to Assert Injunctive, But Not Damages, Claims (11th Circuit) — Application to ERISA

From Borrero v. United Healthcare of N.Y., Inc., 2010 U.S. App. LEXIS 13738 (11th Cir. July 6, 2010):

3. Associational Standing

The representative associations argue that the district court lacked federal jurisdiction over their claims, even if the claims of the individual Appellants were completely preempted by ERISA. At oral argument, the medical associations argued that under our recent decision in Connecticut State Dental, they lack standing to pursue their claims in federal court, and their claims therefore cannot be completely preempted by ERISA. In Connecticut State Dental, we held that the associational plaintiff lacked standing to sue in a representative capacity because it sought damages on behalf of its individual members. Connecticut State Dental, 591 F.3d at 1353-54. Because the associational Appellants in this case seek only equitable relief, they have standing to assert claims under ERISA.

The Supreme Court has established a three-prong test by which we evaluate associational standing:

[A]n association has standing to bring suit on behalf of its members when: (a) its members would otherwise have standing to sue in their own right; (b) the interests it seeks to protect are germane to the organization's purpose; and (c) neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit.

Hunt v. Wash. State Apple Adver. Comm'n, 432 U.S. 333, 343, 97 S. Ct. 2434, 2441 (1977). "It has long been settled that an organization has standing to sue to redress injuries suffered by its members without a showing of injury to the association itself and without a statute explicitly permitting associational standing." Doe v. Stincer, 175 F.3d 879, 882 (11th Cir. 1999). The medical associations admit in their complaints that they seek to vindicate the rights of the associations and their members. They admit that the purposes of the associations encompass ensuring appropriate service-payment transactions between providers and insurers.

Other circuits have expressly permitted representative entities to sue under ERISA through associational standing. See S. Ill. Carpenters Welfare Fund v. Carpenters Welfare Fund of Ill., 326 F.3d 919, 922 (7th Cir. 2003); Pa. Psychiatric Soc'y v. Green Spring Health Servs., Inc., 280 F.3d 278, 284-87 (3d Cir. 2002); Self-Ins. Inst. of Am., Inc. v. Korioth, 993 F.2d 479, 484-85 (5th Cir. 1993). In Connecticut State Dental, we held that a medical association lacked standing to sue under ERISA because it sought both equitable and legal relief.... We noted that the adjudication of claims for money damages would require the kinds of "individualized proof" that run afoul of the third prong for associational standing enunciated in Hunt... [S]ee also Warth v. Seldin, 422 U.S. 490, 515-16, 95 S. Ct. 2197, 2214 (1975).

We hold that the claims for injunctive and declaratory relief made by the medical associations are completely preempted. That the associations' members have standing to sue in their own right is unquestioned and is indicated by their individual presence in this consolidated appeal. The allegations within the associations' complaints demonstrate the nexus between their organizational purposes and the objects of their claims. The only remaining question is whether their claims would require excessive participation by individual members. It is a question we answered affirmatively in Connecticut State Dental because of the presence of claims for money damages. ***

In this case, the medical associations seek only declaratory and injunctive relief. In Pennsylvania Psychiatric Society, the Third Circuit focused its attention on the content of the society's challenges in determining whether excessive individual participation would be required, and would thus thwart associational standing. Because the society challenged the methods of the managed care organizations, and not specific decisions made by the organizations, its case could be proved by sample testimony.... The court believed it possible that the society could establish its claims with limited individual participation, and therefore held that associational standing existed, reversing the district court's order that dismissed the complaint.***

A review of the medical associations' complaints in this case shows that their claims, too, can be litigated with limited individual participation. The medical associations challenge United's practices — improper coding, bundling, downcoding, edits, improper use of guidelines, and poor claims resolution. The relief they seek is an alteration of United's methodology, not redress for any specific past decision. Because these claims can be proved with the limited participation of organization members, the organization has standing to assert them here. And, just as the individual physicians' claims implicate ERISA plans, the claims of the medical associations are completely preempted by ERISA and are properly subject to the jurisdiction of a federal court.

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