Sixth Circuit Court Denies Associational Standing in Medicare Drug Pricing Challenge

The United States Court of Appeals for the Sixth Circuit is the federal court with appellate jurisdiction over the U.S. District Courts in the State of Michigan.  In a case out of Ohio, the Sixth Circuit just upheld dismissal of a challenge to the forced drug price negotiations of the Inflation Reduction Act (IRA) which allows the federal government to cram down Medicare (and Medicaid) drug prices.  The dismissal was based upon the the lawsuit not being "germane to the Dayton Chamber's purposes", a form of legal standing argument.  Legal standing arguments are used by courts to dismiss hot potato cases they would prefer not to rule on:

https://reason.com/volokh/

Sixth Circuit Rejects Associational Standing in Medicare Drug Pricing Challenge
An easy way to avoid the merits in the latest high-stake health care litigation.
Jonathan H. Adler | August 9, 2025

The Inflation Reduction Act (IRA) authorized the federal government to force prescription drug manufacturers to "negotiate" drug prices for Medicaid. In a large number of lawsuits, drug makers allege the negotiations are coercive and potentially unconstitutional. Among the claims made in the various suits are that the IRA's rules violate due process, impose unconstitutional conditions, result in regulatory takings or excessive fines, and compel speech, among other things. Most of the cases are in district courts or focusing on preliminary matters, though the U.S. Court of Appeals for the Third Circuit rejected one suit on the merits. [Update: As did the U.S. Court of Appeals for the Second Circuit just this week.]

This past week a panel of the U.S. Court of Appeals for the Sixth Circuit affirmed the dismissal of one of these cases on standing grounds in Dayton Area Chamber of Commerce v. Kennedy. Specifically, the Court concluded that because the lawsuit was not "germane to the Dayton Chamber's purposes," venue in the Southern District Court of Ohio was improper. Basically, the Court concluded that prescription drug makers, located elsewhere, could not use the Dayton Chamber to file suit in the Southern District of Ohio.

From the opinion:

An association may sue on behalf of its members if "(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 v. Wash. State Apple Advert. Comm'n, 432 U.S. 333, 343 (1977). "[T]he doctrine of associational standing recognizes that the primary reason people join an organization is often to create an effective vehicle for vindicating interests that they share with others." Int'l Union, UAW v. Brock, 477 U.S. 274, 290 (1986). Requiring that an "association plaintiff be organized for a purpose germane to the subject of its member's claim raises an assurance that the association's litigators will themselves have a stake in the resolution of the dispute, and thus be in a position to serve as the defendant's natural adversary." United Food & Com. Workers Union Loc. 751 v. Brown Grp., Inc., 517 U.S. 544, 555–56 (1996). As explained by the Second Circuit in Building & Construction Trades Council of Buffalo v. Downtown Development, Inc., 448 F.3d 138, 149 (2d Cir. 2006), the subject matter of the suit must "bear[] a reasonable connection to the association's knowledge and experience." . . .

Whether the interests at stake in this case (which the complaint describes as stopping the government from "depriving Plaintiffs' members of their constitutional rights, making it more difficult for them to operate their businesses, and stifling healthcare innovations that all of us depend on") are germane to the purpose of the Dayton Chamber (which it describes as "improv[ing] the region's business climate and overall standard of living" and "providing networking and training opportunities for its members") is far from obvious. One could argue, in fact, that the overall standard of living in the Dayton area would actually improve with lower drug prices for its citizenry. And at best, any possible relation between Pharmacyclics's and AbbVie's interests in this lawsuit and the Dayton Chamber's purposes exists at only a sky-high
level of generality. This is especially so because Pharmacyclics and AbbVie have no facilities in the Dayton area or indeed in the entire state of Ohio.

The Dayton Chamber itself acknowledges that its primary purpose is to advocate for a business-friendly environment in the Dayton region. And although Plaintiffs collectively argue that they have a broader purpose of safeguarding the principles of free enterprise and advocating for a business-friendly legislative and regulatory environment, the interests that they aim to protect are greatly attenuated from the regional interests of the Dayton Chamber. . . .

The present case is closer to those holding that an association lacked standing to sue. As in those cases, there is little reason to believe that the Dayton Chamber has any particular knowledge or experience in the subject matter of the lawsuit. It instead appears to be more of a "stalking horse" for Pharmacyclics and AbbVie in seeking a perceived favorable venue that Pharmacyclics and AbbVie could not obtain on their own. The district court reached the same conclusion, reasoning as follows:

Pharmacyclics and AbbVie are large pharmaceutical companies that could have
sued on their own in a federal court in a different state. Instead, Plaintiffs have
attempted to manipulate the system and manufacture standing to obtain a
favorable venue. If the Court found the Dayton Area Chamber of Commerce had
standing in this case, it would open the door for any individual or company to
bypass venue rules by becoming a member of any association remotely related to
a challenged law or regulation. The Court will not adopt a loose interpretation of
the standing requirement for the purpose of forum shopping.

We find this reasoning persuasive

This decision is interesting because it adopts a fairly stingy approach to associational standing--a controversial aspect of standing doctrine insofar as it may facilitate cause-based litigation by those without a concrete stake in the underlying issues (as the court suggested was occurring here).

Some, such as Justice Thomas, have raised questions about the scope of associational standing. Others, such as Michael Morley and Andrew Hessick, would argue associational standing should not exist at all. If the [SCOTUS] justices wanted a case to revisit the doctrine, this might be a case in which to do it--assuming the drug makers seek certiorari.