Abortion Pill Ruling on Standing Raises Hurdles for Trade Groups

The US Supreme Court’s decision to throw out a challenge on standing against the FDA’s regulation of the abortion drug mifepristone is drawing attention in health and life sciences lawsuits, where attorneys increasingly expect lower courts to scrutinize business associations’ claims of harm.

The June ruling in FDA v. Alliance for Hippocratic Medicine dealt a blow to medical doctors and industry associations when the justices unanimously dismissed their case against the Food and Drug Administration for lack of Article 3 standing, in which plaintiffs need to show they suffered or likely will suffer an injury in fact.

Notably, Justice Clarence Thomas’s concurrence took a swing at associational standing, a legal doctrine that allows groups to file lawsuits on behalf of their members.

Attorneys expect the high court’s decision to shake up how associational standing plays out in lower courts. This could pose a hurdle for the health and life science industry as many challenges are often brought on behalf of groups representing drugmakers, doctors, hospitals, or other health providers.

“What we’re seeing now is the gradual degradation of associational standing with voices like Justice Thomas’s,” said Noam Fischman, the co-team leader for Akerman LLP’s health-care litigation practice.

The concurrence is already being cited in lower courts, particularly in Ohio where a federal judge recently dismissed a lawsuit by the US Chamber of Commerce and three of its affiliates against the Biden administration’s Medicare Drug Price Negotiation Program.

“This could be a huge deal not just for health-care associations but for all trade associations,” said William Sarraille, a regulatory consultant at Sarraille & Associates.

“Some of the value that members see in their trade associations is their ability, at least under existing associational standing, to bring challenges to federal agency action,” he said. “It’s a significant limitation on the ability of people to affect federal regulation if associational standing goes away.”

‘A Loose Interpretation’

In order to prove associational standing, the plaintiff organization must show its members would have standing in their own right; the interests at stake are germane to the association’s mission; and neither the claim nor the relief requested requires the participation of the individual members.

The US Chamber and its affiliates argued the drug price negotiation program would reduce access to new medicines and harm businesses.

The plaintiffs defended associational standing when it identified drugmaker AbbVie Inc. as one its members to be harmed by the program. AbbVie’s cancer treatment Imbruvica is one of the 10 drugs the Biden administration selected for price negotiations. Their interests are also germane to the Dayton Area Chamber of Commerce’s purpose, they argued.

But three of the plaintiffs—the Dayton Area Chamber, the Ohio Chamber of Commerce, and the Michigan Chamber of Commerce—lack associational standing, Judge Michael J. Newman of the US District Court for the Southern District of Ohio ruled in August.

Newman said the groups were able to name a specific member harmed in their amended complaint, AbbVie and Pharmacyclics, but the interests at stake in the lawsuit were only germane to the mission of the US Chamber.

“If the Court found the Dayton Area Chamber of Commerce had standing in this case, it would open the door for any individual or company to bypass venue rules by becoming a member of any association remotely related to a challenged law or regulation,” Newman wrote.

“This case poses the same remedial problem Justice Thomas contemplates,” Newman wrote. “If the Program were found unconstitutional, the Court may have to grant a broad, or universal, injunction because an injunction barring the enforcement of the Program only against the associational plaintiffs would not redress the alleged injury of the members.”

Newman’s decision is just the beginning of courts examining this type of standing, legal experts predict.

“We’ve seen some courts start to question associational standing, or say that there isn’t associational standing if the association doesn’t particularly identify the members’ injury,” said Andrew Hessick, a law professor at the University of North Carolina.

“I think we’ll see more courts indicate that they are inclined to find no standing for associations based on membership injury,” Hessick said.

‘More In Depth Review’

For “hot button issues” such as the regulation of mifepristone or drug pricing, “it’s going to be an even more in depth review in order to find associational standing,” said Jill Steinberg, a partner at ArentFox Schiff LLP.

Pending health lawsuits where plaintiffs argue associational standing include challenges related to the FDA’s regulation of laboratory-developed tests and dietary supplements, and state health insurance reimbursement and coverage mandates.

Associational standing was also drawn into a similar lawsuit fighting the drug price negotiation program, where the US government alleged the Pharmaceutical Research and Manufacturers of America and other plaintiffs lacked Article 3 standing to challenge the program.

Plaintiffs had not identified a membership organization to establish associational standing, the government argued.

A federal judge in February dismissed PhRMA’s lawsuit for lack of jurisdiction and improper venue. The case is now pending before the US Court of Appeals for the Fifth Circuit.

Individual Members

The high court decision also encourages courts to scrutinize which members will face the injury under associational standing.

Newman in Ohio questioned whether individual member participation in the case would be required and would defeat associational standing for the only remaining plaintiff.

He pointed to Thomas’s concurrence, which underscored that the party who needs the remedy—the injured member—is not before the court, so it is “questionable whether ‘relief to these nonparties … exceed[s] constitutional bounds.’”

Pharmacyclics and AbbVie “could have sued on their own in a federal court in a different state,” Newman said.

He noted that another drugmaker—Merck & Co.,—is a member of the US Chamber of Commerce and filed a similar lawsuit in another district court. If that court “were to rule on the merits in this case, it is unclear whether Merck would be bound by that decision,” Newman wrote.

Newman also criticized the US Chamber for filing the lawsuit in Dayton, Ohio, writing “plaintiffs have attempted to manipulate the system and manufacture standing to obtain a favorable venue.”

“Parties and jurists have the ability to use challenges on associational standing to fight some of the forum shopping that’s going on,” Fischman said.

“This suit should never been brought in Ohio—it was a risk,” said Josh Blackman, a constitutional law professor at the South Texas College of Law Houston. “It was a transparent way of picking a forum, even though it’s not clear that the members of the Dayton Area Chamber of Commerce are actually injured by this.”

The extra scrutiny on associational standing may also pick up if litigation intensifies following the Supreme Court’s decision to overturn agency deference under the Chevron doctrine in Loper Bright Enterprises. v. Raimondo.

“No doubt there will be a lot more litigation” following the Loper Bright decision, said James G. Hodge, a health law professor at Arizona State University. “But if you’re letting anybody in the door to challenge these things, the door will never close.”