Sherley v. Sebelius

Decision Date25 June 2010
Docket NumberNo. 09-5374.,09-5374.
Citation610 F.3d 69
PartiesJames L. SHERLEY, et al., Appellantsv.Kathleen SEBELIUS, in her Official Capacity as Secretary of the Department of Health and Human Services, et al., Appellees.
CourtU.S. Court of Appeals — District of Columbia Circuit

Appeal from the United States District Court for the District of Columbia (No. 1:09-cv-01575-RCL).

Thomas G. Hungar argued the cause for appellants. With him on the briefs were Bradley J. Lingo, Ryan J. Watson, Blaine H. Evanson, Samuel B. Casey, and Steven H. Aden.

Stephanie R. Marcus, Attorney, U.S. Department of Justice, argued the cause for appellees. On the brief were Mark B. Stern, Alisa B. Klein, and Abby C. Wright, Attorneys. R. Craig Lawrence, Assistant U.S. Attorney, entered an appearance.

Before: GINSBURG, BROWN, and KAVANAUGH, Circuit Judges.

Opinion for the Court filed by Circuit Judge GINSBURG.

GINSBURG, Circuit Judge:

An array of variously situated plaintiffs sued the Department and the Secretary of Health and Human Services and the National Institutes of Health and its Director, challenging newly promulgated guidelines that authorize the NIH to fund more research projects involving human embryonic stem cells than it had previously done. The district court dismissed the suit for want of a plaintiff with standing and dismissed as moot the plaintiffs' motion for a preliminary injunction. All the plaintiffs appeal those rulings, but they defend the standing of only two of their number, Drs. James Sherley and Theresa Deisher.

We conclude the two Doctors have standing. Therefore, we reverse the order of the district court insofar as it dismissed their claims and we reinstate the motion for a preliminary injunction.

I. Background

Because a stem cell can develop into any one of many specialized cells in the human body, it can be used in the treatment of a variety of diseases. There are two basic kinds of mammalian stem cells relevant to this case: embryonic stem cells (ESCs), which are found in human embryos, and adult stem cells (ASCs), which are found in the human body and in tissues discarded after birth.

Scientists, often with financial support from the NIH, have done research involving ASCs for about 50 years. They have done research involving ESCs only since 1998, and the NIH did not fund such research until 2001, when President Bush authorized it to do so subject to the limitation that only ESCs derived from then-extant stem cell lines be used.

In 2009 President Obama removed that limitation, directing the “Secretary of Health and Human Services ... through the Director of NIH, [to] support and conduct responsible, scientifically worthy human stem cell research, including human embryonic stem cell research, to the extent permitted by law” and to “issue new NIH guidance on such research that is consistent with this order.” Exec. Order No. 13,505, 74 Fed.Reg. 10,667, 10,667 (Mar. 9, 2009). Pursuant to the resulting Guidelines for Human Stem Cell Research, 74 Fed.Reg. 32170 (July 7, 2009), the NIH may now fund more projects involving ESCs than was previously possible.

The plaintiffs alleged the issuance of the Guidelines violated the Administrative Procedure Act because, among other reasons, the “promulgation and implementation of the Guidelines are not in accordance with law,” Compl. ¶ 67; see 5 U.S.C. § 706(2)(A), to wit, the Dickey-Wicker Amendment, which the Congress has attached every year since 1996 to the Acts appropriating money for the DHHS and which prohibits federal funding of research in which a human embryo is to be harmed or destroyed e.g., Omnibus Appropriations Act of 2009, Pub.L. No. 111-8, div. F, Title V, § 509(a)(2), 123 Stat. 524. The defendants moved to dismiss the case on the ground that none of the plaintiffs had standing to challenge the issuance of the Guidelines. Sherley v. Sebelius, 686 F.Supp.2d 1 (D.D.C.2009).

The plaintiffs whose standing is at issue here are Drs. Sherley and Deisher, both of whom “specialize in adult stem cell research” and who, respectively, have received and plan to seek NIH grants for research involving ASCs. Id. at 3. They claimed to have “competitor standing” because the Guidelines would “result in increased competition for limited federal funding and [would] thereby injure [their] ability to successfully compete for ... NIH stem cell research funds.” Id. at 4. The district court rejected that contention. First, relying upon Hardin v. Kentucky Utilities Co., 390 U.S. 1, 6, 88 S.Ct. 651, 19 L.Ed.2d 787 (1968), the court reasoned that a party may assert competitor standing only when the “particular statutory provision ... invoked” reflects a purpose “to protect a competitive interest” and that the Doctors had not shown they had a protected interest in receiving research funds from the NIH. Sherley, 686 F.Supp.2d at 6. The court further concluded the cases upon which the Doctors relied established only that competitor standing applies to participants in “strictly regulated economic markets,” whereas the Doctors were “applicants for research grants.” Id. at 7. Finally, the court opined that even if the Doctors qualify as “competitors,” they would still lack standing because the “application process to receive NIH funding is [already] extremely competitive,” id., i.e., the additional competition made possible by the Guidelines would “not ‘almost surely cause [them] to lose’ funding,” id. (quoting El Paso Natural Gas Co. v. FERC, 50 F.3d 23, 27 (D.C.Cir.1995)).

The district court also held none of the other plaintiffs had standing. On appeal, those plaintiffs make no argument to the contrary, wherefore we take their lack of standing as conceded. See, e.g., Sitka Sound Seafoods, Inc. v. NLRB, 206 F.3d 1175, 1181 (D.C.Cir.2000) (argument not raised in opening brief on appeal is forfeited).

II. Analysis

In reviewing de novo the district court's decision to dismiss this suit on the ground that the Doctors lack standing to sue Young Am.'s Found. v. Gates, 573 F.3d 797, 799 (D.C.Cir.2009), we “accept[ ] as true all of the factual allegations contained in the complaint and draw[ ] all inferences in favor of the nonmoving party,” City of Harper Woods Employees' Ret. Sys. v. Olver, 589 F.3d 1292, 1298 (D.C.Cir.2009). The Doctors' burden is to show they have standing not only under Article III of the Constitution of the United States but also under our doctrine of prudential standing. See Shays v. FEC, 414 F.3d 76, 83 (D.C.Cir.2005).

A. Article III Standing

In order to establish their Article III standing, the Doctors must both identify an “injury in fact” that is “actual or imminent” and “fairly ... trace[able] to the challenged action of the defendant,” and show it is “likely, as opposed to merely speculative, that [their] injury will be redressed by a favorable decision.” Lujan v. Defenders of Wildlife, 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992) (internal quotation marks omitted). The doctrine of competitor standing addresses the first requirement by recognizing that economic actors “suffer [an] injury in fact when agencies lift regulatory restrictions on their competitors or otherwise allow increased competition” against them. La. Energy & Power Auth. v. FERC, 141 F.3d 364, 367 (D.C.Cir.1998); accord New World Radio, Inc. v. FCC, 294 F.3d 164, 172 (D.C.Cir.2002) (“basic law of economics” that increased competition leads to actual injury); see also Canadian Lumber Trade Alliance v. United States, 517 F.3d 1319, 1332 (Fed.Cir.2008) (doctrine of competitor standing “relies on economic logic to conclude that a plaintiff will likely suffer an injury-in-fact when the government acts in a way that increases competition or aids the plaintiff's competitors”). The form of that injury may vary; for example, a seller facing increased competition may lose sales to rivals, or be forced to lower its price or to expend more resources to achieve the same sales, all to the detriment of its bottom line. Because increased competition almost surely injures a seller in one form or another, he need not wait until “allegedly illegal transactions ... hurt [him] competitively” before challenging the regulatory (or, for that matter, the deregulatory) governmental decision that increases competition. La. Energy, 141 F.3d at 367.

In considering whether the Doctors have Article III standing, we address only the question whether they allege a legally adequate injury-in-fact. That is the only element of constitutional standing upon which the parties focus, for it is clear the alleged injury is traceable to the Guidelines and redressable by the court.

We do not agree with the district court's suggestion that only a “participant [ ] in [a] strictly regulated economic market[ ] may assert competitor standing. Sherley, 686 F.Supp.2d at 7. We see no reason any one competing for a governmental benefit should not be able to assert competitor standing when the Government takes a step that benefits his rival and therefore injures him economically. In this vein, we have applied the doctrine of competitor standing to the political “market,” holding incumbent congressmen had standing to challenge new campaign finance regulations that made it easier for rival candidates to compete against them for election. Shays, 414 F.3d at 87.

The district court also concluded the doctrine of competitor standing applies only where the “particular statutory provision ... invoked” reflects a purpose “to protect a competitive interest.” Sherley, 686 F.Supp.2d at 6 (quoting Hardin, 390 U.S. at 6, 88 S.Ct. 651). The requirement of a protected competitive interest, however, “goes to the merits” of a plaintiff's claim, not to his Article III standing. See Ass'n of Data Processing Serv. Orgs., Inc. v. Camp, 397 U.S. 150, 153, 90 S.Ct. 827, 25 L.Ed.2d 184 (1970).

In order to bring themselves within the scope of the doctrine of competitor standing, the Doctors invoke our holding in Associated Gas Distributors v....

To continue reading

Request your trial
98 cases
  • Wash. Alliance of Tech. Workers v. U.S. Dep't of Homeland Sec.
    • United States
    • U.S. District Court — District of Columbia
    • January 28, 2021
    ...agencies lift regulatory restrictions on their competitors or otherwise allow increased competition’ against them." Sherley v. Sebelius, 610 F.3d 69, 72 (D.C. Cir. 2010) (second alteration in original) (quoting La. Energy & Power Auth. v. Fed. Energy Regul. Comm'n, 141 F.3d 364, 367 (D.C. C......
  • Multnomah Cnty., an Existing Cnty. Gov'T&a Body Politic & Corporate v. Azar
    • United States
    • U.S. District Court — District of Oregon
    • August 30, 2018
    ...Int'l Bhd. of Teamsters v. U.S. Dep't of Transp. , 861 F.3d 944, 950 (9th Cir. 2017) (citation omitted); see also Sherley v. Sebelius , 610 F.3d 69, 72 (D.C. Cir. 2010) ("Because the Guidelines have intensified the competition for a share in a fixed amount of money, the plaintiffs will have......
  • Ass'n for Cmty. Affiliated Plans v. U.S. Dep't of Treasury
    • United States
    • U.S. District Court — District of Columbia
    • July 19, 2019
    ...agencies lift regulatory restrictions on their competitors or otherwise allow increased competition’ against them." Sherley v. Sebelius, 610 F.3d 69, 72 (D.C. Cir. 2010) (quoting La. Energy & Power Auth. v. FERC, 141 F.3d 364, 367 (D.C. Cir. 1998) ); see also Canadian Lumber Trade All. v. U......
  • Chamber of Commerce of The U.S. v. Envtl. Prot. Agency
    • United States
    • U.S. Court of Appeals — District of Columbia Circuit
    • April 29, 2011
    ...from ‘conjectural’ to ‘imminent,’ ” the petitioners must show that there is a “substantial.... probability” of injury. Sherley v. Sebelius, 610 F.3d 69, 74 (D.C.Cir.2010); see Sierra Club, 292 F.3d at 898. With respect to the second and third elements of standing, the petitioners here face ......
  • Request a trial to view additional results
2 books & journal articles

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT