Organizational Standing: Public Interest Groups' Right to Represent Their Constituents Jeopardized

In its landmark 1972 decision in Sierra Club v. Morton,¹ the Supreme Court ruled that an organization may establish standing to sue on behalf of its members who have suffered actual or threatened injury to a protected interest notwithstanding the lack of any injury to the organization itself.² While in that case the Court held that the Sierra Club lacked standing to sue, the crucial factor in its determination was clearly the absence of any allegations that the federal action at issue would cause "injury in fact" to the plaintiff's members.³ After cosmetic amendment to its pleadings, the group was permitted to pursue the litigation on behalf of those members with an identified stake in the outcome. Ever since, when environmental and other public interest organizations, suing solely as the representatives of their constituents, have challenged federal agency action, standing contests have tended to focus on the character and sufficiency of the injuries alleged by the individuals on whose behalf those organizations have claimed to be suing.⁴

A federal district court ruling in Washington, D.C. recently opened a new and as yet largely unexplored area of organizational standing law, however, by inquiring into the exact character of the relationship between such groups and the injured individuals they purport to represent. On March 13, 1979, Judge John Sirica held, in Health Research Group v. Kennedy,⁵ that two public interest groups lacked standing to sue on behalf of their financial contributors and supporters because they did not have a substantial representational nexus with those individuals. In essence the ruling was based on the fact that the plaintiffs had no formally designated members and that their contributors and supporters did not elect the groups' directors. Public interest litigating groups view the decision as an ominous signal that an additional set of standing hurdles regarding the representational adequacy of their organizational structures is being erected at the federal courthouse door.

Health Research Group v. Kennedy

In April 1977, Health Research Group (HRG) and Public Citizen, two public interest groups founded by Ralph Nader, brought suit challenging Food and Drug Administration regulations⁶ which permit continued marketing of over-the-counter drugs containing ingredients that have not been shown to be effective. The two groups, both of which have been intentionally structured as nonmembership organizations in order to facilitate "operational efficiency,"⁷ brought the suit on behalf of their contributors and supporters, whose health, they contended, the regulations threatened. An intervening pharmaceutical trade association raised the objection that the two organizational plaintiffs lacked standing. This argument was then adopted by the government attorneys from the Antitrust Division of the Department of Justice. The plaintiffs attempted to rebut this defense by submitting affidavits and exhibits to establish their standing to bring the suit in a representational capacity. To be on the safe side, however, they also moved to amend the complaint to add three individual plaintiffs to the action.

Judge Sirica's ruling was twofold. He held that the two groups had no standing to sue in a representational capacity because there was no substantial nexus between the two organizations and the individuals alleged to be injured by the regulations, i.e., their contributors and supporters. However, he kept the lawsuit alive by granting plaintiffs' alternative motion to amend the complaint to add three individual plaintiffs.⁸

Analyzing the Case Law

Judge Sirica grounded his standing ruling on principles drawn from dicta in Sierra Club v. Morton,⁹ Warth v. Seldin,¹⁰ and the 1977 decision in Hunt v. Washington Apple Advertising Commission.¹¹ The court noted initially that all of the Supreme Court's pre-1977 organizational standing cases, particularly Sierra Club [9 ELR 10074] and Warth, had concerned membership associations. It was not until Hunt that the High Court was confronted with an organizational plaintiff whose constituents were not formally designated as members. In Hunt, the Court actually expanded organizational standing by ruling that an association could sue in a representational capacity even though it lacked formal members because the constituents on whose behalf it was bringing the action possessed "the indicia of membership."¹² As indicators that the organization's constituents were the "functional equivalent" of members, the Court pointed to their election of the commission's officers and their complete financing of its operations and activities through contributions. Judge Sirica, while acknowledging that Hunt did not purport to set forth immutable requirements for representational standing by nonmembership organizations, nonetheless read the opinion as placing great emphasis on the importance of membership, whether formal or de facto, in such a determination.

Corroborating this conclusion, in the court's view, was the warning in Sierra Club that while an organization may have standing to seek judicial relief either for an injury to itself or solely as the representative of its injured members, it cannot establish standing simply on the basis of its interest in a particular problem.¹³ From this statement and the "indicia" identified in Hunt, Judge Sirica deduced that the essential requirement for representational standing is a "substantial nexus" between the injured individuals and the organizational plaintiff, adding that this nexus is presumptively provided by actual membership. He then fastened upon the measure of "control" normally exercised by members as the basis for the presumption that membership organizations meet the representational standing requirements. This factor of control was thus in his view the determinant of whether a nonmembership group meets the test for "functional" membership in Hunt.¹³

Applying the "Control" and "Purpose" Tests

In the final step of its standing analysis, the court measured the two organizational plaintiffs in HRG against these standards and found them deficient. Judge Sirica did not deny the plaintiffs' assertion that contributors and supporters influence their choice of policies and projects by the giving or withholding of financial support and the direct communication of their views to the groups' directors. He concluded, however, that these individuals exercised no direct control over the organizations and that the degree of their indirect control as contributors or advocates was not "substantial." The court saw a decisive difference in both substance and degree between the indirect control exercised by financial contributors and letter writers on the one hand and the direct control held by members as they elect an organization's governing body on the other. Only the latter, Judge Sirica intimated, can support representational standing.

As an independent ground for denying standing to one of the two organizations, the court found that the subject matter of the lawsuit was not sufficiently "germane" to Public Citizen's broad organizational purpose of vindicating the public interest. Reading Hunt as establishing such germaneness as one of the prerequisites for representational standing, the court noted that enforcing this requirement helps to ensure that the constituents have had an opportunity to influence the organization's position on the particular question at issue in the lawsuit.

Analysis of the Decision and Its Implications

The central doctrinal underpinning of the HRG ruling was provided by the Supreme Court's discussion of organizational standing in the Hunt opinion. Judge Sirica read Hunt as both inferentially elevating the importance in the standing analysis of the relationship between an organization and its constituents and as setting forth the standards by which the representational adequacy of that relationship is to be judged. Unfortunately, the court's use of Hunt, which expanded the availability of representational standing to nonmembership groups without purporting to define limits on that expansion, misapplies the thrust of that decision.

Judge Sirica initially disclaimed any intention of taking the various organizational characteristics mentioned by the Court in Hunt as immutable and conjunctive requirements for all nonmembership organizations seeking to sue in a representational capacity. But he proceeded to do precisely that, holding that although the allegedly injured contributors financed the operations of Public Citizen and HRG, they failed to meet the additional requirement of exerting electoral control over the organizations' governing bodies and thus lacked a sufficient representational nexus to the two groups. The flaw in this analysis is that Hunt does not say each of the identified indicia of membership must be present in every case to confer representational standing. It seems plausible that either electoral or financial control can be viewed under Hunt as providing a sufficient nexus between an organization and its constituents to allow it to sue on their behalf. Thus while Judge Sirica may well have been correct in deducing an underlying necessity for an adequate representational relationship between the group plaintiff and the injured individuals, the validity of his conclusion that the financial control exercised by contributors is insufficient to establish such a nexus is more dubious.

The two organizational plaintiffs in HRG would therefore seem to have a telling argument on appeal. An early appeal to the D.C. Circuit is, moreover, a distinct possibility if the district court determines that the three substituted individuals also lack standing and dismisses the case in its entirety on this threshold issue. Judge Sirica's decision has already created quite a stir among public interest groups and promises, because of the novelty of the legal questions it treats and the tightly reasoned character of the opinion, to exert significant influence unless overturned on appeal.

Distinguishing Features

A number of categorical distinctions are available to public interest litigating groups who wish to fend off this [9 ELR 10075] decision when it is raised as a basis for denying them standing in future or currently pending lawsuits. The most obvious is an assertion that the ruling applies only to overtly nonmembership organizations, of which there are relatively few. This approach is supported by the cpurt's statement that membership organizations normally enjoy a presumption of representational standing. In addition, the decision can be characterized as barring representational suits only by those groups in which the members or constituents have no electoral voice. A third distinguishing characteristic is the two-tiered organizational structure of Public Citizen and HRG, whereby contributors give only to the former as an umbrella group and have no direct contact with the latter.¹⁴ The court drew on this fact in order to characterize the injured individuals' connection with HRG's organizational interest and expertise regarding the subject matter of the lawsuit as "highly attenuated."

Membership organizations such as the Natural Resources Defense Council (NRDC) and the Environmental Defense Fund (EDF) whose members do not elect their boards of directors, are nonetheless worried that other courts may use an expansive reading of this decision to establish a general requirement of electoral control for all organizations that seek representational standing. They also fear that the additional requirement that an organization's purpose be "germane" to the subject matter of litigation in which it engages on behalf of its members is so amorphous as to be subject to unpredictable judicial application.

Parallel Developments

As evidence that the HRG decision is the vanguard of a concerted attack on representational standing, public interest groups point to recent attempts by the Justice Department and the Nuclear Regulatory Commission (NRC) to use more severe versions of both these tests to deny standing to organizational plaintiffs and intervenors in pending proceedings. For example, in a currently pending suit¹⁵ by Consumers Union callenging the legality of truth-in-lending regulations¹⁶ issued by the Federal Reserve Board, the government lawyers, again from the Justice Department's Antitrust Division, have acknowledged that the plaintiff is a membership organization whose members elect its board of directors. They contend, however, that the organization must in addition show that its members, or at least those threatened with injury, have specifically authorized or directed the group to bring the lawsuit on their behalf. The defendants have also asserted that Consumers Union's broad organizational purpose of informing and protecting consumers is not sufficiently germane to Federal Reserve Board credit regulations to justify the inference that the group's members, by the very act of joining the organization, implicitly authorized it to represent them in this litigation.

An NRC Atomic Safety and Licensing Appeal Board has already accepted similar arguments. In a ruling¹⁷ in April 1979, the board held that groups seeking to intervene in licensing proceedings in a representational capacity must produce specific authorizations for the intervention from injured members unless implicit authorization from each member to represent him or her in such proceedings may reasonably be inferred from the group's stated purposes.

Public interest groups have pointed out that this strategy of pushing to the limit newly discovered arguments against organizational standing flies in the face of President Carter's announced policy¹⁸ of facilitating citizen access to the federal courts to raise public policy issues. Even if the Department of Justice were to drop its proclivity for asserting this sort of standing defense on the part of federal defendants in future public interest lawsuits, the seed has been planted: objections to representational standing will undoubtedly continue to be raised in the government's stead by intervening trade associations and industrial parties. Moreover, since adequate standing of the parties is a requisite to jurisdiction under Article III,¹⁹ federal courts would in any event have an obligation to consider this question sua sponte.

Alternative Litigation Techniques

Public interest organizations do, of course, have alternatives to suing in a representative capacity when the group itself is not among the injured. The most obvious is to file a class action on behalf of their injured members, provided the basic numerosity requirement can be met.²⁰ While this is theoretically an available option, class actions are not really a practical possibility for most public interest litigation because they are cumbersome, expensive, and lead to drawn-out litigation. A more realistic alternative, and one that groups such as EDF and NRDC have used on many occasions in the past and have now begun to adopt on a systematic basis, is to join injured individuals as plaintiffs in all suits. There are difficulties here too, however. Where the lawsuit seeks injunctive relief, the magnitude of the harm weighing on plaintiffs' side of the balance may be reduced if the plaintiffs are only a few individuals rather than a class or an organization's membership. Plaintiffs' attorneys might also face possible difficulties with the rules against client solicitation in their efforts to secure individuals to join in the case. Furthermore, motions in pending suits to amend the complaint to include additional plaintiffs²¹ or to join such plaintiffs²² might be denied on grounds of untimeliness or prejudice to the opposing parties.

[9 ELR 10076]

Proposals and Prospects for Legislation

The HRG decision has provoked calls from public interest groups for the enactment of legislation to assure broad representational standing. The fundamental problem which any such drive for congressional action must face is whether these newly evolving restrictions on organizational standing are grounded in Article III rather than in judicially propounded prudential considerations. If the requirement for a "substantial nexus" between litigating groups and their injured constituents is constitutionally based, it is immune from direct legislative reversal. Judge Sirica's opinion is unclear on this point but can be read to treat this nexus as a constitutional requirement. This reading is reinforced by the Supreme Court's observation in Hunt that the various factors linking the associational plaintiff and its injured constituents coalesced to assure the necessary "concrete adverseness."²³

S. 680,²⁴ now being considered by the Senate Judiciary Committee, would add a new section to Title 28 of the United States Code to liberalize standing rules in suits against the government.²⁵ This measure does not as yet treat the problem of representational standing, however. One legislative approach to foreclosing further development of such barriers would be to amend Title 28 or § 10 of the Administrative Procedure Act (APA)²⁶ to provide that "any person" can obtain judicial review of federal agency action as long as at least some person is adversely affected or aggrieved by it. Such a strategy of directly eliminating the nexus requirement would necessarily rest on an assessment that the judicially articulated limitations on representational standing are prudentially rather than constitutionally based. The emphatic dicta in Warth and Hunt regarding the need for a party suffering injury to be present in the lawsuit, either directly or through an organizational representative, suggests there is a serious risk such legislation would be judicially invalidated on constitutional grounds.

An alternative tactic would be to "end-run" these standing limitations by amending the APA to establish a general right in all persons to agency action within the law and a correlative federal cause of action in any person to sue to enforce that right.²⁷ The notion that violation of such a statutorily created right can give rise to an injury sufficient to confer standing is well established.²⁸ Organizations could then sue on the basis of direct injury to themselves from the violation of this statutory right and thereby avoid the representational standing morass altogether.

The second of these approaches would seem to run less risk of judicial reversal and work a more far reaching change in standing law than the first. Whether such a change would result in a deluge of litigation that had until now been held in check by restrictive standing rules is questionable. It would, however, certainly allow concerned groups to bring their energy and expertise to bear on particular problems in a judicial forum without having to put forward several individuals to front as plaintiffs for the suit or to expend huge amounts of energy in pretrial battles concerning standing. As a practical matter thouth, the current political climate does not seem conducive to passage of any expansion of standing which may be characterized as breeding additional delay into the federal regulatory process or further clogging federal court dockets.

Conclusion

In the wake of the HRG decision, public interest litigating groups are bracing themselves for new challenges to their ability to obtain judicial review of unlawful federal agency action on behalf of injured constituents. If the novel representational standing requirements enunciated by Judge Sirica and already advanced by the government in more extreme forms in other pending cases are widely adopted, these groups may find courts scrutinizing their organizational structures and policy-making procedures before listening to their claims regarding the illegality of federal actions that threaten environmental harm.

Although the standing decision in HRG is tightly reasoned, its correctness is questionable, and a successful appeal is a distinct possibility. Preferring to be safe rather than sorry, however, EDF, in a move other groups may soon imitate, has already adopted a policy of including individuals as co-plaintiffs in all future lawsuits that it brings on behalf of its members.

Organizations which do not allow their members or constituent to elect or ratify their boards of directors could in some cases institute such procedures without insurmountable difficulties. However, public interest groups uniformly reject the notion that explicit authorization by injured members or constituents is necessary to bring a lawsuit. Such a requirement, they argue, would violate both the privacy of their members or constituents and in many instances be prohibitively expensive.

The Carter Administration is now receiving earnest requests to refrain from short circuiting public interest lawsuits by raising such technical objections to organizational standing, and Congress is being pressed to liberalize the current standing rules by statutory amendment. The prospects for administrative or legislative responses which completely resolve the representational standing problem are not bright, however. A more likely scenario for the immediate future is further judicial development of the new substantial nexus requirement.

1. 405 U.S. 727, 2 ELR 20192 (1972).

2. Under Article III of the Constitution, the judicial power of the United States extends only to "Cases" and "Controversies." U.S. CONST. art. III, § 2. The courts have inferred from this limitation a basic constitutional requirement that the plaintiff must himself have suffered an injury at the hands of the defendant in order to invoke federal jurisdiction. See Warth v. Seldin, 422 U.S. 490, 498-99 (1975); Baker v. Carr, 369 U.S. 186, 204 (1962). The doctrine of "representational" standing by an association on behalf of its injured members constitutes a variant rather than an exception to this rule in that the members' standing as a result of their injuries is simply imputed to the organization through which they seek to protect their interests. Warth v. Seldin, 422 U.S. 490, 511 (1978).

3. The suit was brought under § 10 of the Administrative Procedure Act, which permits any person "adversely affected or aggrieved" to seek judicial review of agency action. 5 U.S.C. § 702, ELR STAT. & REG. 41005. This statutory formulation mirrors the Article III requirement for injury. See Association of Data Processing Service Organizations v. Camp, 397 U.S. 150, 154 (1970).

4. See, e.g., United States v. SCRAP, 412 U.S. 669, 3 ELR 20536 (1973); Animal Welfare Institute v. Kreps, 561 F.2d 1002, 7 ELR 20617 (D.C. Cir. 1977), rev'g Animal Welfare Institute v. Richardson, 7 ELR 20073 (D.D.C. 1976). See also W. RODGERS, ENVIRONMENTAL LAW § 1.6 at 25-30 (1977); Comment, Judges as Statesmen: U.S. Supreme Court Jumps Standing Hurdles to Uphold Price-Anderson Act, 8 ELR 10162, 10166-68 (1978); Comment, The Revival of the Standing Defense in Environmental Litigation, 7 ELR 10031 (1977).

5. __ F. Supp. __, 9 ELR 20183 (D.D.C. Mar. 13, 1979).

6. 21 C.F.R. § 330.10(a)(5) & (12) (1977).

7. The groups also are arranged in a two-tiered structure, with Public Citizen serving as the umbrella organization for the financing and administration of HRG and a number of other advocacy groups. All public contributions are funneled into Public Citizen which then redistributes funds to the subsidiary groups; contributors' only direct contact is thus with Public Citizen.

8. The court postponed consideration of defendants' further contention that the substituted individual plaintiffs lack standing as well.

9. 405 U.S. 727, 2 ELR 20192 (1972).

10. 422 U.S. 490 (1975).

11. 432 U.S. 333 (1977).

12. Id. at 344-45.

13. [A] mere "interest in a problem," no matter how long-standing the interest and no matter how qualified the organization is in evaluating the problem, is not sufficient by itself to render the organization "adversely affected or aggrieved" within the meaning of the APA.

405 U.S. at 739.

14. See note 7 supra.

15. Consumers Union v. Miller, No. 78-2188 (D.D.C. filed Dec. 5, 1978).

16. 12 C.F.R. § 226.9(g)(6) (1978).

17. In re Houston Lighting & Power Company (Allens Creek Nuclear Generating Station, Unit 1), ALAB-535 (NRC Apr. 4, 1979).

18. I support legislation which will give citizens broader standing to initiate suits against the government, in appropriate cases. The government has too often routinely invoked the "standing" defense when it is challenged in court.

President's Message to the Congress Recommending Measures to Increase Consumer Participation in Government, 13 WEEKLY COMP. OF PRES. DOC. 495, 497 (Apr. 6, 1977).

19. U.S. CONST. art III, § 2; see note 2 supra.

20. See FED. R. CIV. P. 23(a).

21. FED. R. CIV. P. 15.

22. FED. R. CIV. P. 22.

23. 432 U.S. at 345.

24. S. 680, 96th Cong., 1st Sess. (1979), reprinted at 125 CONG. REC. S2822 (daily ed. Mar. 15, 1979).

25. The measure would generally eliminate the "zone of interests," "casual nexus," and "redressability" limitations on standing in suits against federal or state agencies or officials alleging statutory or constitutional violations.

26. 5 U.S.C. § 702, ELR STAT. & REG. 41005.

27. Section 304(a) of the Clean Air Act, 42 U.S.C. § 7604(a), ELR STAT. & REG. 42256, provides a model for such a citizen suit provision, in that it makes no requirement that the plaintiff have suffered any other form of cognizable injury.

28. Trafficante v. Metropolitan Life Insurance Co., 409 U.S. 209 (1972); Sierra Club v. Morton, 405 U.S. 727, 732, 2 ELR 20192, 20193 (1972); Animal Welfare Institute v. Kreps, 561 F.2d 1002, 7 ELR 20617 (D.C. Cir. 1977).