FILED NOT FOR PUBLICATION JUN 5 2024 UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
LEGACY HEALTH SYSTEM; et al., No. 23-35511
Plaintiffs-Appellants, D.C. Nos. 6:22-cv-01460-MO 3:02-cv-00339-MO v.
SEJAL HATHI, in her official capacity as MEMORANDUM* Director of Oregon Health Authority,
Defendant-Appellee.
Appeal from the United States District Court for the District of Oregon Michael W. Mosman, District Judge, Presiding
Argued and Submitted May 8, 2024 Seattle, Washington
Before: McKEOWN, W. FLETCHER, and OWENS, Circuit Judges.
Plaintiffs-Appellants Legacy Health System et al. (“Legacy Health System”)
are a group of hospital systems in Oregon. Legacy Health System sued the director
of the Oregon Health Authority (“OHA”), the state agency that operates the
Oregon State Hospital (“OSH”), in her official capacity.
* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. Legacy Health System claims that OHA fails to maintain adequate bed space
at OSH for people who are civilly committed due to mental illness. Legacy Health
System alleges that this causes civilly committed patients to remain for long
periods in Legacy Health System’s acute care facilities, which are not designed or
prepared to provide the treatment that civilly committed individuals need on an
extended basis. Legacy Health System brought claims on its own behalf under the
Due Process Clause and the Takings Clause of the federal Constitution, as well as a
claim on its own behalf under the Takings Clause of the Oregon Constitution.
Legacy Health System also brought constitutional and statutory claims on behalf of
civilly committed patients in its facilities.
The district court dismissed Legacy Health System’s complaint in its
entirety. The district court concluded that Legacy Health System lacked Article III
standing to bring any of its claims because its injuries were traceable to its own
conduct in applying for certification to provide acute care to civilly committed
patients and were therefore not traceable to the conduct of defendant. It further
concluded that Legacy Health System lacked third-party standing to bring claims
on behalf of the civilly committed patients because the interests of Legacy Health
System and the patients were not sufficiently aligned. We have jurisdiction to hear
2 Legacy Health System’s appeal pursuant to 28 U.S.C. § 1291, and we reverse in
part, vacate in part, and remand for further proceedings.
Article III standing: The fact that Legacy Health System applied for
certification to provide acute care to civilly committed patients does not defeat
Article III standing. The Supreme Court has held that there is no “exception to
traceability for injuries that a party purposely incurs.” FEC v. Cruz, 596 U.S. 289,
296–97 (2022). An injury that results from a defendant’s actions satisfies
traceability “even if the injury could be described in some sense as willingly
incurred.” Id. at 297; see also Havens Realty Corp. v. Coleman, 455 U.S. 363, 374
(1982) (holding that a tester who “approached the real estate agent fully expecting
that he would receive false information” had standing to sue for violation of “right
to truthful housing information”). Whether Legacy Health System has a cause of
action (a question we do not decide) is not an Article III question. See Lexmark
Int’l, Inc. v. Static Control Components, Inc., 572 U.S. 118, 128 & n.4 (2014). We
reverse the judgment of the district court to the extent the court concluded that
Legacy Health System lacked Article III standing to bring the claims in this suit.
Third-party standing: Whether Legacy Health System has third-party
standing to bring claims on behalf of civilly committed patients is a closer
question. For a litigant to have standing to assert claims on a third party’s behalf,
3 “[t]he litigant must have suffered an ‘injury in fact’ . . . ; the litigant must have a
close relation to the third party; and there must exist some hindrance to the third
party’s ability to protect his or her own interests.” Powers v. Ohio, 499 U.S. 400,
410–11 (1991) (citations omitted) (quoting Singleton v. Wulff, 428 U.S. 106, 112
(1976)).
Our cases demonstrate that the “close relation” inquiry is nuanced and fact-
dependent. For instance, in Viceroy Gold Corp. v. Aubry, 75 F.3d 482 (9th Cir.
1996), we held that a nonunionized gold ore processing company met the “close
relation” requirement when it challenged on behalf of its employees a state statute
allowing unionized ore-processing plants to schedule twelve-hour shifts but
forbidding nonunionized plants from scheduling shifts of more than eight hours.
See id. at 485–86, 489. A company would not generally have a “close relation” to
its workers for purposes of third-party standing in a challenge to a statute that
protects the workers from excessive hours; the interests of companies and their
employees would often be adverse in such cases. But on the facts of Viceroy Gold
Corp., the remedy sought by the company would have benefitted the workers
because many of them had “a daily commute of seventy-five miles or more each
way” and had “requested a shorter work week—with fewer days at 12 hours per
day—to reduce the commute and give them more free time.” Id. at 485. We
4 therefore concluded that “[o]n this narrow issue, [the company’s] interest is
sufficiently aligned with that of its employees.” Id. at 489.
In Hong Kong Supermarket v. Kizer, 830 F.2d 1078 (9th Cir. 1987), we held
that a supermarket lacked standing to bring a claim on behalf of its customers
challenging the federal Special Food Program for Women, Infants and Children
(“WIC”). Id. at 1079–80, 1082. The supermarket alleged that the WIC program
“discriminated against Southeast Asians and Indochinese refugees by basing the
selection of supplemental foods on a conventional American diet, without taking
into account the diverse cultural eating habits and lactose intolerance of these
groups.” Id. at 1080. To remedy this alleged discrimination, the supermarket
sought an injunction prohibiting the administration of the WIC program. Id.
Vendors generally have standing to assert claims on behalf of their
customers. See, e.g., Craig v. Boren, 429 U.S. 190, 195 (1976). But in Hong Kong
Supermarket, the remedy sought by the supermarket would have harmed its
customers by depriving them of all WIC program benefits. Looking to “the
outcome [the supermarket] seeks on the face of its complaint,” we therefore
concluded that “its interests and those of the nutritionally high risk WIC recipients
are not ‘inextricably’ intertwined.” Hong Kong Supermarket, 830 F.2d at 1082.
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FILED NOT FOR PUBLICATION JUN 5 2024 UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
LEGACY HEALTH SYSTEM; et al., No. 23-35511
Plaintiffs-Appellants, D.C. Nos. 6:22-cv-01460-MO 3:02-cv-00339-MO v.
SEJAL HATHI, in her official capacity as MEMORANDUM* Director of Oregon Health Authority,
Defendant-Appellee.
Appeal from the United States District Court for the District of Oregon Michael W. Mosman, District Judge, Presiding
Argued and Submitted May 8, 2024 Seattle, Washington
Before: McKEOWN, W. FLETCHER, and OWENS, Circuit Judges.
Plaintiffs-Appellants Legacy Health System et al. (“Legacy Health System”)
are a group of hospital systems in Oregon. Legacy Health System sued the director
of the Oregon Health Authority (“OHA”), the state agency that operates the
Oregon State Hospital (“OSH”), in her official capacity.
* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. Legacy Health System claims that OHA fails to maintain adequate bed space
at OSH for people who are civilly committed due to mental illness. Legacy Health
System alleges that this causes civilly committed patients to remain for long
periods in Legacy Health System’s acute care facilities, which are not designed or
prepared to provide the treatment that civilly committed individuals need on an
extended basis. Legacy Health System brought claims on its own behalf under the
Due Process Clause and the Takings Clause of the federal Constitution, as well as a
claim on its own behalf under the Takings Clause of the Oregon Constitution.
Legacy Health System also brought constitutional and statutory claims on behalf of
civilly committed patients in its facilities.
The district court dismissed Legacy Health System’s complaint in its
entirety. The district court concluded that Legacy Health System lacked Article III
standing to bring any of its claims because its injuries were traceable to its own
conduct in applying for certification to provide acute care to civilly committed
patients and were therefore not traceable to the conduct of defendant. It further
concluded that Legacy Health System lacked third-party standing to bring claims
on behalf of the civilly committed patients because the interests of Legacy Health
System and the patients were not sufficiently aligned. We have jurisdiction to hear
2 Legacy Health System’s appeal pursuant to 28 U.S.C. § 1291, and we reverse in
part, vacate in part, and remand for further proceedings.
Article III standing: The fact that Legacy Health System applied for
certification to provide acute care to civilly committed patients does not defeat
Article III standing. The Supreme Court has held that there is no “exception to
traceability for injuries that a party purposely incurs.” FEC v. Cruz, 596 U.S. 289,
296–97 (2022). An injury that results from a defendant’s actions satisfies
traceability “even if the injury could be described in some sense as willingly
incurred.” Id. at 297; see also Havens Realty Corp. v. Coleman, 455 U.S. 363, 374
(1982) (holding that a tester who “approached the real estate agent fully expecting
that he would receive false information” had standing to sue for violation of “right
to truthful housing information”). Whether Legacy Health System has a cause of
action (a question we do not decide) is not an Article III question. See Lexmark
Int’l, Inc. v. Static Control Components, Inc., 572 U.S. 118, 128 & n.4 (2014). We
reverse the judgment of the district court to the extent the court concluded that
Legacy Health System lacked Article III standing to bring the claims in this suit.
Third-party standing: Whether Legacy Health System has third-party
standing to bring claims on behalf of civilly committed patients is a closer
question. For a litigant to have standing to assert claims on a third party’s behalf,
3 “[t]he litigant must have suffered an ‘injury in fact’ . . . ; the litigant must have a
close relation to the third party; and there must exist some hindrance to the third
party’s ability to protect his or her own interests.” Powers v. Ohio, 499 U.S. 400,
410–11 (1991) (citations omitted) (quoting Singleton v. Wulff, 428 U.S. 106, 112
(1976)).
Our cases demonstrate that the “close relation” inquiry is nuanced and fact-
dependent. For instance, in Viceroy Gold Corp. v. Aubry, 75 F.3d 482 (9th Cir.
1996), we held that a nonunionized gold ore processing company met the “close
relation” requirement when it challenged on behalf of its employees a state statute
allowing unionized ore-processing plants to schedule twelve-hour shifts but
forbidding nonunionized plants from scheduling shifts of more than eight hours.
See id. at 485–86, 489. A company would not generally have a “close relation” to
its workers for purposes of third-party standing in a challenge to a statute that
protects the workers from excessive hours; the interests of companies and their
employees would often be adverse in such cases. But on the facts of Viceroy Gold
Corp., the remedy sought by the company would have benefitted the workers
because many of them had “a daily commute of seventy-five miles or more each
way” and had “requested a shorter work week—with fewer days at 12 hours per
day—to reduce the commute and give them more free time.” Id. at 485. We
4 therefore concluded that “[o]n this narrow issue, [the company’s] interest is
sufficiently aligned with that of its employees.” Id. at 489.
In Hong Kong Supermarket v. Kizer, 830 F.2d 1078 (9th Cir. 1987), we held
that a supermarket lacked standing to bring a claim on behalf of its customers
challenging the federal Special Food Program for Women, Infants and Children
(“WIC”). Id. at 1079–80, 1082. The supermarket alleged that the WIC program
“discriminated against Southeast Asians and Indochinese refugees by basing the
selection of supplemental foods on a conventional American diet, without taking
into account the diverse cultural eating habits and lactose intolerance of these
groups.” Id. at 1080. To remedy this alleged discrimination, the supermarket
sought an injunction prohibiting the administration of the WIC program. Id.
Vendors generally have standing to assert claims on behalf of their
customers. See, e.g., Craig v. Boren, 429 U.S. 190, 195 (1976). But in Hong Kong
Supermarket, the remedy sought by the supermarket would have harmed its
customers by depriving them of all WIC program benefits. Looking to “the
outcome [the supermarket] seeks on the face of its complaint,” we therefore
concluded that “its interests and those of the nutritionally high risk WIC recipients
are not ‘inextricably’ intertwined.” Hong Kong Supermarket, 830 F.2d at 1082.
5 How the principles discussed in these cases and others should apply here is
not obvious. Doctors often have been found to have standing to assert the rights of
their patients. See, e.g., Singleton, 428 U.S. at 117. But Legacy Health System
does not seek to provide appropriate long-term treatment to civilly committed
patients itself; rather, Legacy Health System seeks an injunction requiring OHA to
provide appropriate long-term care to these patients. Accepting as true the
complaint’s allegations, “the outcome” that Legacy Health System “seeks on the
face of its complaint” would benefit civilly committed patients by ensuring they
receive appropriate long-term treatment from OHA. See Hong Kong Supermarket,
830 F.2d at 1082. But as Legacy Health System’s complaint acknowledges, bed
space at OSH is limited, and OSH is under competing pressure from the injunction
upheld by our circuit in Oregon Advocacy Center v. Mink, 322 F.3d 1101 (9th Cir.
2003), which requires OSH to admit criminal defendants who are found “mentally
incapacitated . . . within seven days of the judicial finding of their incapacity to
proceed to trial.” Id. at 1107, 1123. Whether Legacy Health System’s interests are
sufficiently aligned with the interests of its civilly committed patients may depend
on what outcome Legacy Health System in fact is likely to achieve in this litigation
and whether that outcome would benefit the patients whom Legacy Health System
6 seeks to represent. These questions are not clearly answered in the complaint or
the present briefing.
The district court concluded that Legacy Health System lacked third-party
standing in part because it concluded that Disability Rights Oregon (“DRO”)
would be better suited “to speak on behalf of civilly committed patients.” That
conclusion is clearly erroneous. Cf. In re Palmdale Hills Prop., LLC, 654 F.3d
868, 873 (9th Cir. 2011) (“Factual determinations underlying the standing decision
are reviewed for clear error.”). DRO represents the “mentally incapacitated
criminal defendant[s]” in the Mink litigation. See Mink, 322 F.3d at 1105. It is
undisputed that the defendants represented by DRO compete with civilly
committed patients for the limited bed space available at OSH. The conflict
between the interests of civilly committed patients and DRO’s clients in the Mink
litigation calls into serious question DRO’s ability fairly to represent the civilly
committed patients.
The district court also found that Legacy Health System lacked third-party
standing because the hospitals “complain about how much civilly committed
patients are costing them and about the harms [the patients] inflict on their staff
members.” These allegations can be relevant to third-party standing, especially to
the extent they may reflect a prioritization of the hospitals’ financial concerns or
7 indicate a potential disjunction of interests if the remedy sought by Legacy Health
System—the creation or allocation of additional bed space at OSH for civilly
committed patients—proves unavailable. But some tension in Legacy Health
System’s complaint between the needs of civilly committed patients and the
hospitals is not necessarily enough to show that Legacy Health System lacks a
“close relation” to the patients in light of our precedent instructing that parties with
some degree of adversity may nonetheless be “sufficiently aligned” for third-party
standing purposes. See Viceroy Gold Corp., 75 F.3d at 489.
The present record is insufficient to determine whether Legacy Health
System has third-party standing to assert claims on behalf of civilly committed
patients. We therefore vacate the judgment of the district court on this issue and
remand for reconsideration in light of the third-party standing principles discussed
above.
We construe Appellee’s motion to substitute a party (Dkt. 36) as a motion to
amend the case caption and grant it. See Fed. R. App. P. 43(c)(2). We grant non-
party Samaritan Health Services, Inc.’s motion for leave to file an untimely amicus
brief (Dkt. 39). We deny as moot Legacy Health System’s motion for judicial
notice (Dkt. 46) because the materials presented therein are unnecessary to our
8 disposition of this matter. Each party shall bear its own costs on appeal. See Fed.
R. App. P. 39(a)(4).
REVERSED IN PART, VACATED IN PART, AND REMANDED.