Labor & Employment Law Daily Wrap Up, PROCEDURE—2nd Cir.: Membership’s lack of standing for preliminary injunction purposes did not compel case dismissal, (Jan 13, 2025)

By Pamela L. Wolf

“We see nothing... that requires plaintiffs who opt to seek a preliminary injunction on incomplete evidence to risk outright dismissal, even if their allegations are otherwise sufficient to establish standing at the pleading stage.”

A district court erred in concluding that its resolution as to a membership organization’s standing in the context of its preliminary injunction motion was conclusive as to the membership’s Article III standing to maintain an action challenging a company’s program advancing those of Black/African American, Latino/Hispanic, and Native American descent, ruled the Second Circuit, vacating its earlier opinion to the contrary. The court also vacated the district court’s decision and remanded for the lower court to consider whether the membership sufficiently pleaded standing to survive a motion to dismiss, should the company so move (Do No Harm v. Pfizer Inc., No. 23-15 (2nd Cir. Jan. 10, 2025)).

Fellowship program challenged. Pfizer sponsors a Breakthrough Fellowship Program that seeks “to advance students and early career colleagues of Black/African American, Latino/Hispanic, and Native American descent.” Do No Harm, a nationwide membership organization whose stated mission is “to protect healthcare from radical, divisive, and discriminatory ideologies, including the recent rise in explicit racial discrimination,” sued Pfizer on behalf of its members, alleging that the company unlawfully excludes white and Asian-American applicants from the fellowship in violation of federal and state laws. The district court sua sponte dismissed without prejudice of membership’s case for lack of Article III standing to pursue a preliminary injunction.

Initially, the Second Circuit affirmed, but vacated that opinion, and in a new opinion, concluded that the district court applied the wrong standard in determining membership’s standing for purposes of dismissal.

Associational standing. At issue here is the membership’s ability to establish associational standing, specifically the first requirement that at least one association member has standing to sue in their own right. Ordinarily, to establish standing to challenge an allegedly discriminatory program, a plaintiff must apply to that program, but need not go through the motions of formally applying when that would be a “futile gesture.” In those circumstances, “a plaintiff need only demonstrate that they are able and ready to apply, but a discriminatory policy prevents them from doing so on equal footing.”

According to the membership, at the pleading stage, it need not name members to establish Article III standing, and it had sufficiently alleged that its pseudonymous members were ready and able to apply to the fellowship.

Standing burdens and dismissal. The appeals court next analyzed the various burdens for establishing standing, which remain on the plaintiff and increase as litigation progresses. The critical question here was whether the membership’s failure to establish standing to secure a preliminary injunction doomed its claims altogether. Said differently, when a plaintiff seeks a preliminary injunction, but fails to establish standing, must the court dismiss the case altogether?

While the district court answered this question in the affirmative, the membership argued that the court should have denied its motion for preliminary injunction rather than dismissing its claims altogether.

Legal theory flawed. In some cases, a plaintiff’s failure to establish standing to secure a preliminary injunction has nothing to do with the measure of evidence they have produced, the Second Circuit observed. The legal theory itself, rather than the insufficiency of the evidence, may doom the plaintiff’s standing. Where that becomes apparent to the district court when considering a motion for preliminary injunction, the court cannot consider the merits of the preliminary injunction motion and should dismiss the claim altogether. Thus, in cases in which a plaintiff cannot establish standing no matter how much evidence they muster, dismissal makes sense—without jurisdiction, the court cannot act.

Insufficient evidence of standing. In contrast, where the failure to establish standing arises from the insufficiency of the plaintiff’s evidence of standing, and that insufficiency may be remediable, dismissal of a plaintiff’s claims for lack of sufficient evidence to establish standing for a preliminary injunction would be premature, the court wrote. “A determination that the plaintiff hasn’t presented enough evidence to establish standing in the preliminary injunction context doesn’t mean the plaintiff won’t be able to do so at a later stage in the proceeding.”

Even where the plaintiff’s failure to muster sufficient evidence to establish standing to secure a preliminary injunction arises from their failure to proffer sufficient evidence to establish standing, the consequence is that the plaintiff isn’t entitled to a preliminary injunction, the appeals court said. “We see nothing in the law or rules of procedure that requires plaintiffs who opt to seek a preliminary injunction on incomplete evidence to risk outright dismissal, even if their allegations are otherwise sufficient to establish standing at the pleading stage.”

Quality and quantity of evidence, not fundamental flaw. The district court’s underlying analysis focused on the quantity and quality of the membership’s evidence, rather than a fundamental flaw in the membership’s claim to standing. Even if these evidentiary shortcomings would impair the membership’s ability to secure a favorable judgment on the merits, they did not present an insurmountable obstacle to the membership’s standing. The membership “could identify its allegedly injured member or members by name, and those members could provide more detailed information to establish in a more particularized way that they are ready and able to apply for and accept the Fellowship if offered,” explained the appeals court.

Thus, the district court erred to the extent it concluded that its resolution of the standing question with respect to the preliminary injunction motion was, in this case, conclusive as to the membership’s Article III standing to maintain the action. That left the question of whether the membership sufficiently pleaded standing to survive a motion to dismiss, which the district court had not decided. Although the appeals court had discretion to consider this question, it left it to the district court on remand to do so. If on remand the company moves to dismiss the membership’s claims on the ground of standing, the district court may address in the first instance the question of whether the membership’s pleadings are adequate. The court also denied as moot the membership’s request to supplement the record. The district court can address such a motion in the first instance and may address any other jurisdictional issues that arise.

The appeals court thus vacated its prior opinion, vacated the district court’s decision, and remanded for further proceedings.

The case is No. 23-15.

Judge: Per curiam.

Attorneys: Cameron Thomas Norris (Consovoy McCarthy) for Do No Harm. Jeannie S. Rhee (Paul, Weiss, Rifkind, Wharton & Garrison) for Pfizer Inc.

Companies: Pfizer Inc.; Do No Harm

Cases: Procedure Discrimination RaceDiscrimination ConnecticutNews NewYorkNews VermontNews