How Can Standing Challenges Be Presented to Mitigate These Risks?
Given these decisions, what can defense practitioners do to effectively present standing challenges in a way that won’t simply result in a case being remanded to state court and putting your client at risk for attorneys’ fees? This section provides a few suggestions.
Consider whether state law standing principles provide a better basis for seeking dismissal.
Rather than immediately removing a case to federal court and seeking dismissal for lack of standing, consider whether to remove the case at all. Many states have adopted the same (or more stringent) standing requirements as Article III (log-in required), and a defendant may be better off making those arguments in state court rather than removing.
Think about timing.
If you do remove, consider whether it is wise to immediately file a motion arguing that the plaintiff lacks standing. The Mocek court appears to have been concerned that the defendant was taking inconsistent positions, arguing for federal jurisdiction, while at the same time claiming the plaintiff did not have standing to assert the claim in federal court. Be aware of that risk. It may be better to concede that the allegations of the complaint establish standing and then challenge whether the plaintiff has any actual injury at a later time based on a more developed evidentiary record.
Focus on statutory standing.
Not all “standing” is created equal. If you remove a case and argue that the plaintiff lacks Article III standing, you run the risk of having the case remanded to state court or dismissed without prejudice, in which case you may have accomplished nothing. But there is a different flavor of standing. “Statutory” standing focuses on the merits of the claim, including whether the claim requires proof of injury. A successful challenge to statutory standing results in dismissal with prejudice, rather than remand or dismissal without prejudice. Maya v. Centex Corp., 658 F.3d 1060, 1067 (9th Cir. 2011) (discussing differences between statutory and Article III standing). Therefore, rather than framing arguments in terms of Article III standing, consider focusing on the statutory standing requirements, which may include actual injury, reliance and causation. The argument may sound similar to an Article III challenge, but the result should be different.
Focus on “divestment” of federal question jurisdiction.
For cases removed based on federal question jurisdiction, a defendant has another argument: divestment. In Advocates for Individuals with Disabilities Found. Inc. v. Russell Enterprises Inc., 2016 WL 7187931, at *1 (D. Ariz. Dec. 12, 2016), the court faced a situation similar to that in Mocek, but declined to remand the federal claim, notwithstanding a lack of standing. The Russell case involved claims filed in state court under the Americans with Disabilities Act (ADA). The defendant removed based on federal question jurisdiction and moved to dismiss for lack of standing. In response, the plaintiff filed a motion to remand. Although the court agreed that it lacked subject matter jurisdiction, it declined to remand the ADA claim, concluding that “Plaintiff is actually arguing that a state’s more-lenient standing requirements can divest a federal court of its 28 U.S.C. § 1331 federal question jurisdiction, which Defendant invoked by removing this case to federal court.” The court held that it “f[ound] no authority [] that such divestment is possible” and declined to remand the federal claim.
Consider whether Congress can create a cause of action where plaintiff lacks Article III standing.
For cases that involve federal claims, a defendant also may want to argue that remand would be “futile” because Congress cannot create a cause of action that, whether in state of federal court, runs afoul of Article III. First, a caveat. The Ninth Circuit recently noted that the cases providing a “futility” exception to remand under 28 U.S.C. § 1447(c) “may no longer be good law,” although the court declined to decide the issue. Polo v. Innoventions Int’l, LLC, 833 F.3d 1193 (9th Cir. 2016). Nevertheless, many cases recognize that Congress cannot create a cause of action that would not satisfy Article III, and it would seem odd to conclude that a state court could adjudicate a federal claim that could not be decided in federal court. See Paul J. Katz, Standing in Good Stead: State Courts, Federal Standing Doctrine, and the Reverse-Erie Analysis, 99 Nw. U. L. Rev. 1315 (2005) (“it seems unreasonable that the Constitution would allow Congress to utilize state courts to enforce statutory directives where federal courts cannot”). Therefore, whether in federal or state court, a defendant should consider digging into the case law recognizing that Congress cannot simply do away with Constitutional requirements, including Article III’s injury requirement.