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Column: Pfizer diversity case splits appeals court over ‘naming names’ to establish a right to sue

Credit: REUTERS/Dado Ruvic

By Alison Frankel

March 7 (Reuters) - An appellate decision on Wednesday that rejected a conservative group’s challenge to a Pfizer diversity fellowship raised a tough question: When an organization brings a lawsuit claiming harm to its members, must those members be identified by name?

That question divided the 2nd U.S. Circuit Court of Appeals panel that heard the Pfizer case.

Judges Beth Robinson and Dennis Jacobs ruled that under the 2nd Circuit’s heightened requirements for constitutional standing at the summary judgment stage of litigation, organizations must supply the court with the name of at least one allegedly injured member.

Judge Richard Wesley agreed that the nonprofit in the Pfizer case, a group called Do No Harm, did not have standing to enjoin Pfizer's program – but strongly disagreed with the majority’s holding that organizations must identify an injured member by name to meet standing requirements.

Wesley said in a concurring opinion that this “new constitutional rule” is both unnecessary and ungrounded in precedent. (As I’ll explain, the majority disputed that assertion.) Wesley also said the new rule could have “troubling” implications for groups seeking to vindicate the civil rights of their members.

Do No Harm, which says its mission is "to protect healthcare from radical, divisive and discriminatory ideologies," sought on behalf of a white member and an Asian member to enjoin a Pfizer fellowship for Black, Latino and Native American applicants. But the 2nd Circuit’s new “naming names” rule, Wesley predicted, will “constrict access to the courts” for all kinds of groups, regardless of their ideology.

“That is an unfortunate ruling for organizations everywhere,” the judge said in his concurrence.

Diversity proponents were quick to seize on the 2nd Circuit’s new holding. The 11th Circuit heard oral arguments in January in an anti-affirmative action group’s bid to enjoin a venture capital fund’s grant program for businesses run by Black women. On Wednesday, lawyers for the venture capital firm, the Fearless Fund, notified the 11th Circuit of the 2nd Circuit ruling in the Pfizer case.

The letter noted that the group that sued the Fearless Fund, the American Alliance for Equal Rights, similarly failed to identify allegedly injured members by name. The American Alliance for Equal Rights retorted in its own letter to the 11th Circuit that the 2nd Circuit’s Pfizer decision is an “outlier” that is at odds with rulings from several other federal circuits.

Among the contrary decisions, the American Alliance said, is a Feb. 9 opinion from the 10th Circuit in a case brought by Speech First, a group dedicated to the free speech rights of conservative college students. The 10th Circuit ruled that Speech First had constitutional standing to challenge policies at the University of Oklahoma even though its allegedly injured members used pseudonyms instead of their real names.

As it happens, the conservative groups in the Pfizer, Fearless Fund and Oklahoma cases were all represented by the same law firm, Consovoy McCarthy. Consovoy partner Cameron Norris, who argued for the groups at the 2nd and 10th Circuits, did not respond to my query on the implications of the 2nd Circuit’s “naming names” requirement.

But Do No Harm said in an email statement that it intends to seek additional review of the 2nd Circuit ruling, which, according to the group, “departs from established precedent and makes it unduly hard for organizations to vindicate civil rights.”

That is not the view of the 2nd Circuit majority, which concluded that the naming requirement is not only justified by U.S. Supreme Court precedent in 2009's Summers v. Earth Island Institute -- which rejected an environmental group's attempt to establish standing by claiming a statistical likelihood that one of its members was harmed by the federal government's approval of a timber sale on federal land -- but also necessary to assure that organizations are asserting claims on behalf of members who are genuinely harmed by alleged discrimination.

A name, according to the 2nd Circuit majority, “does not merely check a box; it is a demonstration of the sincerity of the member's interest.” (The majority said the name need not be public but must be disclosed to the court.)

Robinson and Jacobs acknowledged 2nd Circuit case law holding that organizations can establish standing in the preliminary stages of litigation without revealing the names of specific injured members. But because Do No Harm sought a preliminary injunction, the 2nd Circuit said, it was held to a higher standard.

The 2nd Circuit majority also conceded that the Supreme Court’s decision in the Summers case does not explicitly require organizations to identify members by name to establish standing. The court held only that Earth Island could not meet standing requirements by asserting that one of its members was likely harmed but was required to allege injury to a specific person.

The ruling also contained a sentence whose meaning has now become a matter of hot dispute. In a reference to a 1990 case in which the court rejected constitutional standing arguments based on an affidavit asserting harm to unnamed people, the Supreme Court said in Summers that “this requirement of naming the affected members has never been dispensed with.”

The 2nd Circuit majority, like the 1st Circuit in a 2016 ruling in Draper v. Healey, interpreted that sentence from the Summers decision to “recognize the necessity of naming members actually harmed by a challenged program."

“We assume the Supreme Court said what it meant and meant what it said,” Robinson wrote for the majority.

As I mentioned, other appellate courts have read the Supreme Court’s ruling in Summers differently. The 10th Circuit, in that Feb. 9 ruling in the Speech First case, for instance, refused to draw inferences from the Supreme Court’s use of the word “naming,” holding that it was “clearly not the intent of the court” to impose a new requirement for standing in an opinion that “provided no hint, much less an emphatic statement, that it was abrogating decades of precedent.”

Given Do No Harm’s pledge to seek review of the 2nd Circuit holding – and the percolation of the naming issue in other appellate courts – it’s a good bet that you haven’t heard the last of this.

Read more:

Group suing over Pfizer diversity fellowship program loses US appeal

Venture capital fund defends grants for Black women in US appeals court

(Reporting By Alison Frankel)

((alison.frankel@thomsonreuters.com; 646-223-6491 (o) 917-848-7493 (c);))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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