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Hospital Council of Western Pennsylvania v. City of Pittsburgh

argued: June 13, 1991.

THE HOSPITAL COUNCIL OF WESTERN PENNSYLVANIA, APPELLANT
v.
CITY OF PITTSBURGH, COUNTY OF ALLEGHENY, CITY OF ERIE AND CITY OF JOHNSTOWN, APPELLEES



On Appeal from the United States District Court for the Western District of Pennsylvania; D.C. Civil No. 90-00621.

Becker and Alito, Circuit Judges and Huyett, District Judge.

Author: Alito

Opinion OF THE COURT

The Hospital Council of Western Pennsylvania appeals from an order dismissing its complaint on two alternative grounds: lack of associational standing and abstention under Middlesex County Ethics Committee v. Garden State Bar Association, 457 U.S. 423, 73 L. Ed. 2d 116 , 102 S. Ct. 2515 (1982). We will reverse.

I.

The Council filed a complaint in the United States District Court for the Western District of Pennsylvania asserting federal constitutional claims and pendent state claims against the City of Pittsburgh, the County of Allegheny, the City of Erie, and the City of Johnstown. The complaint alleged that the Council is "a Pennsylvania nonprofit corporation which functions as a membership organization that represents, assists and speaks for its members in matters where joint action is appropriate." The complaint stated that the Council has ninety-four members, including all of the private nonprofit hospitals within the governmental units named as defendants.

The heart of the complaint was the allegation that the defendant governmental units had attempted and were attempting to "coerce" or "force" tax-exempt member hospitals to make payments in lieu of taxes by "indicating that those [hospitals] which [did] not agree to such payments and/or agreements 'in lieu of taxes' [would] have their tax exempt status challenged, [would] be likely to run into difficulties in obtaining zoning approvals, and [would] not be offered the opportunity to provide services to the taxing authority." The complaint alleged that members had been harmed and were immediately threatened with harm as a result of the defendants' actions. The complaint also specified agreements reached between the defendants and various hospitals within their jurisdictions.

Count One of the complaint asserted that the defendants had violated the Council members' right to equal protection by discriminating against those who refused to make payments in lieu of taxes. Count Two alleged that members were being deprived of property without due process. Count Three repeated essentially the same constitutional claims as Counts One and Two. Finally, Count Four asserted pendent claims under the Uniformity Clause of the Pennsylvania Constitution, art. 8, sec. 1, and other state laws. The complaint sought declaratory and injunctive relief, but it did not request damages for any past violations.

On motion by the defendants, the district court dismissed the complaint. The court held that the Council did not meet two of the three requirements for associational standing set out in Hunt v. Washington State Apple Advertising Commission, 432 U.S. 333, 53 L. Ed. 2d 383 , 97 S. Ct. 2434 (1977). First, the court found that "there is no injury, real or threatened, which is fairly traceable to defendants' allegedly unlawful conduct." The court wrote that none of the members had lost its tax exemption, that any payments made in lieu of taxes were purely voluntary, and that any alleged threat was "purely hypothetical and conjectural." The court also concluded that the Council lacked associational standing because "the claims asserted and the relief requested . . . would require the participation of the individual hospitals in this lawsuit."

As an alternative ground for dismissal, the court held that abstention was required under Middlesex County Ethics Committee. The court noted that the defendants had challenged the tax exemptions of several member hospitals in state administrative proceedings and that "any constitutional challenges to defendants' taxing practices implicate important state interests." The Council appealed.

II.

"An association has standing to bring suit on behalf of its members when: (a) its members would otherwise have standing to sue in their own right; (b) the interests it seeks to protect are germane to the organization's purpose; and (c) neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit." Hunt, 432 U.S. at 343. "When standing is challenged on the basis of the pleadings," as it was here, we must "'accept as true all material allegations of the complaint and . . . construe the complaint in favor of the complaining party.'" Pennell v. City of San Jose, 485 U.S. 1, 7, 99 L. Ed. 2d 1 , 108 S. Ct. 849 (1988), quoting Warth v. Seldin, 422 U.S. 490, 501, 45 L. Ed. 2d 343 , 95 S. Ct. 2197 (1975). Under these standards, the complaint in this case should not have been dismissed for lack of standing.*fn1

A. Standing of individual members

The district court held -- and the County of Allegheny and the City of Pittsburgh argue on appeal -- that members of the Council lacked standing because they did not suffer injury in fact. The meaning of injury in fact was set out in Whitmore v. Arkansas, 495 U.S. 149, ...


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