Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-06-05133/USCOURTS-caDC-06-05133-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued March 8, 2007 Decided June 12, 2007

No. 06-5133

RENAL PHYSICIANS ASSOCIATION,

APPELLANT

v.

U. S. DEPARTMENT OF HEALTH AND HUMAN SERVICES, ET

AL.,

APPELLEES

Appeal from the United States District Court

for the District of Columbia

(No. 05cv00067)

Robert S. Plotkin argued the cause for appellant. With him

on the briefs was E. Duncan Getchell, Jr.

Jeffrey T. Green was on the brief for amici curiae American

Medical Association et al. in support of appellant.

Stephanie R. Marcus, Attorney, U.S. Department of Justice,

argued the cause for appellees. With her on the brief were

Jeffrey S. Bucholtz, Acting Assistant Attorney General, Jeffrey

A. Taylor, U.S. Attorney, and Thomas M. Bondy, Attorney.

Before: GINSBURG, Chief Judge, and GARLAND and

USCA Case #06-5133 Document #1046418 Filed: 06/12/2007 Page 1 of 21
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BROWN, Circuit Judges.

Opinion for the Court filed by Circuit Judge BROWN.

BROWN, Circuit Judge: The issue in this case is standing to

challenge a regulatory safe harbor where the direct cause of

injury is the independent action of a third party. The same issue

was before this court in National Wrestling Coaches Ass’n v.

Department of Education, 366 F.3d 930 (D.C. Cir. 2004)

(National Wrestling), though the factual context there was very

different. Here, relying on National Wrestling, the district court

dismissed the complaint for lack of standing. We affirm.

I

Congress first enacted the “Stark Law” as part of the

Omnibus Budget Reconciliation Act of 1989. See Pub. L. 101-

239, § 6204, 103 Stat. 2106, 2236-43 (1989). The law, which

added section 1877 to the Social Security Act, limited the ability

of a physician to refer Medicare patients to clinical laboratories

with which the physician had a “financial relationship.” 42

U.S.C. § 1395nn(a)(1). In 1993, Congress extended the law to

several other health services, id. § 1395nn(h)(6), and also

included Medicaid patient referrals within the scope of the law,

id. § 1396b(s). See Pub. L. 103-66, §§ 13562, 13624, 107 Stat.

312, 604, 636 (1993). Among other things, the law prohibits

payment for services furnished pursuant to a prohibited referral,

42 U.S.C. §§ 1395nn(a)(1)(B), 1396b(s), imposing civil

penalties in the case of a prohibited referral, id. § 1395nn(g).

The Stark Law includes several exceptions, id. § 1395nn(b)-(e),

and authorizes the Secretary of Health and Human Services to

make additional exceptions by regulation, where the “financial

relationship . . . does not pose a risk of program or patient

abuse,” id. § 1395nn(b)(4).

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One of the exceptions to the referral prohibition is for

“[p]ersonal service arrangements.” Id. § 1395nn(e)(3).

Essentially, this exception covers market-rate, pay-for-service

arrangements. In other words, if the physician’s only financial

interest in the clinic is receipt of agreed-upon compensation at

or below “fair market value” for “reasonable and necessary”

services, then the physician may make referrals to the clinic

without violating the law. Id. § 1395nn(e)(3)(A). The Stark

Law, however, limits the extent to which the physician’s

compensation may be based on the volume or value of patient

referrals. Id. at § 1395nn(e)(3)(B). The law defines “fair market

value” as “the value in arm[’]s length transactions, consistent

with the general market value.” Id. § 1395nn(h)(3) (emphasis

added). Obviously, this definition of “fair market value” is

critical to determining the scope of the Stark Law exception, and

the definition hinges on the term “general market value.”

The Centers for Medicare and Medicaid Services

(“CMS”)—formerly called the Health Care Financing

Administration (“HCFA”)—is the division within the United

States Department of Health and Human Services that oversees

regulatory implementation of the Stark Law. In 1998, in a

notice of proposed rulemaking, HCFA proposed a set of

regulations to clarify and implement the various provisions of

the law, including defining “general market value” as “the

compensation that would be included in a service agreement, as

the result of bona fide bargaining between well-informed parties

to the agreement . . . at the time of the service agreement.” 63

Fed. Reg. 1659, 1721 (Jan. 9, 1998). Several comments on this

proposed rule focused on how (i.e., with what sort of evidence)

a party could establish it had met this standard. 66 Fed. Reg.

856, 944 (Jan. 4, 2001). HCFA responded in 2001 by stating its

intent “to accept any method [of proof] that is commercially

reasonable and provides us with evidence that the compensation

is comparable to what is ordinarily paid for an item or service in

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the location at issue, by parties in arm’s-length transactions who

are not in a position to refer to one another.” Id. At the same

time, the HCFA issued a final rule defining “general market

value” in accord with its proposed rule. See 66 Fed. Reg. at 856;

42 C.F.R. § 411.351 (2006).

The 2001 rulemaking did not address several subsections of

the Stark Law, and HCFA stated it would address those

subsections “shortly” in a “Phase II” rulemaking. 66 Fed. Reg.

at 856. In addition, this Phase II rulemaking would address

comments received in response to the 2001 rulemaking (i.e.,

“Phase I”). Id. Phase II was completed in 2004, when HCFA

(by this time renamed “CMS”) issued an interim final rule,

which it planned to finalize within three years. 69 Fed. Reg.

16,054, 16,126 (Mar. 26, 2004). To a large extent, the new

rulemaking duplicated portions of the 1998 proposed

rulemaking, addressing Stark Law subsections Phase I had not

covered. Id. at 16,125. However, because a new law (effective

December 8, 2003) required the agency to finalize its proposed

rules within three years, see 42 U.S.C. § 1395hh(a)(3)(B), a

question arose about the continuing viability of the 1998

proposal. Although the agency was unsure the new law

prohibited the Secretary from finalizing rules proposed more

than three years before December 8, 2003, it took the cautious

approach of publishing the new rule as an interim final rule with

a comment period. See 69 Fed. Reg. at 16,125.

In short, CMS restarted the rulemaking process from scratch

but waived publication of a notice of proposed rulemaking,

finding the customary notice and comment period

“impracticable, unnecessary, or contrary to the public interest”

because the public had been afforded two prior opportunities to

comment and could also comment on the interim final rule. See

id. at 16,125 (quoting 5 U.S.C. § 553(b)).

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As part of this interim final rule, CMS created a safe harbor

provision within the existing regulatory definition of “fair

market value.” Id. at 16,092, 16,128. The agency emphasized

the safe harbor was “entirely voluntary; [health service

providers] may continue to establish fair market value through

other methods.” Id. at 16,092. Thus, CMS added the safe

harbor to give providers an easy way of proving fair market

value, but providers remain free to ignore the safe harbor, and so

long as they can show their personal service arrangements are

nevertheless at fair-market rates, they are in full compliance

with the law. The safe harbor offers two methods for showing

that a physician’s hourly rate is at fair market value: (1) by

reference to the hourly rate paid to emergency room physicians

in the same market, and (2) by averaging the hourly

compensation level for physicians in the same specialty, as

determined in several national surveys. Specifically, the safe

harbor provides as follows:

An hourly payment for a physician’s personal

services . . . shall be considered to be fair market value if

the hourly payment is established using either of the

following two methodologies:

(1) The hourly rate is less than or equal to the average

hourly rate for emergency room physician services in the

relevant physician market, provided there are at least three

hospitals providing emergency room services in the market.

(2) The hourly rate is determined by averaging the 50th

percentile national compensation level for physicians with

the same physician specialty (or, if the specialty is not

identified in the survey, for general practice) in at least four

of the following surveys and dividing by 2,000 hours. [The

regulation then lists six salary surveys.]

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42 C.F.R. § 411.351.

Plaintiff Renal Physicians Association (“RPA”) brought this

action in the district court, challenging the safe-harbor provision

as violating the notice-and-comment requirements of the

Administrative Procedure Act (“APA”) and as arbitrary and

capricious agency action. RPA is “a national, nonprofit

specialty society” whose “membership consists of nephrologists,

advance practice nurses, and physician assistants specializing in

the treatment of patients with kidney disease.” RPA’s complaint

adds that “[m]any RPA members are medical directors of

outpatient dialysis facilities.” The RPA alleges that a majority

of nephrologists serve as medical directors of dialysis providers

that own clinical laboratories. If these physicians refer patients

to these in-house laboratories for services covered by Medicare

or Medicaid, they violate the Stark Law, unless an exception

applies. See 42 U.S.C. §§ 1395nn(a)(1)(A), 1395nn(h)(6)(A).

Similarly, where a nephrologist has a financial relationship with

a hospital-based dialysis facility, the physician may not refer

patients to the hospital for hospital services covered by

Medicare or Medicaid, unless an exception applies. Id.

§§ 1395nn(a)(1)(A), 1395nn(h)(6)(K). As noted, health service

providers that receive referrals in violation of the Stark Law face

civil penalties, in addition to nonpayment for services furnished

pursuant to the referral. Id. §§ 1395nn(a)(1)(B), 1395nn(g),

1396b(s).

The merits of RPA’s challenge to the safe harbor provision

are not before us, because the district court dismissed the

complaint for lack of standing. The complaint includes several

paragraphs of allegations related to standing, though not the

redressability aspect of standing. Specifically, RPA alleges:

[O]nly by complying with the safe harbor can a dialysis

provider ensure that it will avoid investigation or

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prosecution relating to compensation paid to medical

directors. Thus, in an effort to obtain the protection of the

safe harbor, dialysis providers are likely to limit

compensation for medical director services to the amount

“allowed” under the safe harbor.

. . . [If this occurs,] a significant number of

nephrologists, including RPA members, will experience a

substantial reduction in medical director compensation.

. . . .

. . . On the other hand, if nephrologists demand and are

paid reasonable compensation, both parties run the risk that

HHS will later allege, based upon the safe harbor, that the

compensation paid is “excessive” and that the medical

director arrangement violates the Stark Law.

. . . In fact, dialysis providers have already begun to

insist upon strict compliance with the fair market value safe

harbor. RPA members have advised RPA that in

negotiating the renewal of a medical director agreement,

certain dialysis providers have required reduction of

medical director compensation to safe-harbored levels. In

at least one instance, that position has resulted in an

executed agreement which provides for significantly

reduced compensation to an RPA member.

. . . .

. . . If interested parties had been accorded their

statutory right to comment on the fair market value safe

harbor, the RPA would have demonstrated that . . . based

upon the use of the safe harbor, the compensation paid to

nephrologists for the provision of medical director services

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will significantly and unfairly decrease, causing RPA

members direct economic injury and negatively affecting

patient care.

. . . .

. . . The Stark Law did not empower the Secretary to set

“fair market value” compensation rates . . . . The Stark Law

did not authorize the Secretary to reduce arbitrarily the

compensation currently paid to physicians, in the free

market, for personal services. The fair market value safe

harbor in effect does both, and does so without benefit of

any meaningful record.

. . . The fair market value safe harbor, now fully

effective, poses the threat of imminent economic harm to

RPA members and other medical directors of dialysis

facilities who will not be compensated at fair market value.

Although the safe-harbored compensation rates are well

below the current market rate for medical director services

furnished to dialysis providers, dialysis providers are

insisting upon compensating medical directors in

accordance with the safe harbor so as to avoid a

governmental investigation or enforcement action.

(Emphases added.)

Despite these allegations regarding direct injury, the district

court found RPA failed to meet the three-part test for standing

set forth in Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61

(1992), requiring (1) injury in fact, (2) causation, and (3)

redressability. The district court focused on the third prong,

concluding RPA could not show its alleged injury would be in

any way ameliorated by the relief it was seeking. Renal

Physicians Ass’n v. Dep’t of Health & Human Servs., 422 F.

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Supp. 2d 75, 83-85 (D.D.C. 2006). Because the safe harbor was

merely an available option for proving fair market value, the

direct cause of the alleged injury was not the safe harbor but

rather the actions the clinics decided to take independently. Id.

 Moreover, concluded the court, invalidating the safe harbor

would not relieve the RPA’s alleged injury. At the time of the

Phase I rulemaking, the agency clearly announced its intent “to

accept any method [of proof] that is commercially reasonable

and provides us with evidence that the compensation is

comparable to what is ordinarily paid for an item or service in

the location at issue, by parties in arm’s-length transactions who

are not in a position to refer to one another.” 66 Fed. Reg. at

944. The safe harbor merely identified two “presumptively

reasonable” methods of proof, without restricting parties from

relying on other methods of proof. Renal Physicians Ass’n, 422

F. Supp. 2d at 84. And, in any event, once the agency had

expressed its approval of those two methods, it could not

“unring the bell.” Id. at 85 (quoting Maness v. Meyers, 419 U.S.

449, 460 (1975)). Therefore, even if the safe harbor was

invalidated, the two methods of proof would still be available to

providers and they would still enjoy the implicit approval of the

agency, absent a rulemaking expressly disapproving these

methods. Id. at 84-85. The relief sought in RPA’s complaint

thus would not redress its alleged injury. Id. In reaching these

conclusions, the district court relied on this court’s decision in

National Wrestling, a standing decision that likewise involved

the independent action of a third party in response to a safe

harbor and turned on the question of redressability. 366 F.3d at

933.

The district court granted the government’s motion to

dismiss, 422 F. Supp. 2d at 86, and RPA filed this appeal.

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II

We review a dismissal for lack of standing de novo. Nat’l

Wrestling Coaches Ass’n, 366 F.3d at 937. “As the Supreme

Court explained in [Lujan], the burden of production a plaintiff

must bear in order to show it has standing to invoke the

jurisdiction of the district court varies with the procedural

context of the case. At the pleading stage, ‘general factual

allegations of injury resulting from the defendant’s conduct may

suffice,’ and the court ‘presum[es] that general allegations

embrace the specific facts that are necessary to support the

claim.’” Sierra Club v. EPA, 292 F.3d 895, 898-99 (D.C. Cir.

2002) (quoting Lujan, 504 U.S. at 561).

The government emphasizes that the safe harbor is

voluntary and that, even if the safe harbor were rescinded, the

fair market value requirement would still remain. Therefore, the

clinics might take the same action even without the safe harbor.

Standing, however, surely cannot be so easily defeated solely on

the basis that the challenged regulation creates a voluntary safe

harbor. Voluntary or not, a safe harbor must achieve some

useful purpose or an agency would not bother to create it, which

suggests that every safe harbor has at least some substantive

impact. The extent of this substantive impact turns on the scope

of the risk associated with not using the safe harbor; the higher

the risk, the more likely the safe harbor will attract regulated

entities into its calm (litigation free) waters. If an agency uses

a safe harbor to coerce parties toward a substantive result the

agency prefers, and the safe harbor is voluntary in name only,

then the agency is making substantive law.

Here, however, the alleged impact of the safe harbor on

RPA members is indirect, the result of the actions of third

parties. In Lujan, 504 U.S. 555, the Supreme Court emphasized

the heightened showing required of a plaintiff alleging injury

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from the government’s regulation of a third party:

When . . . a plaintiff’s asserted injury arises from the

government’s allegedly unlawful regulation (or lack of

regulation) of someone else, much more is needed. In that

circumstance, causation and redressability ordinarily hinge

on the response of the regulated (or regulable) third party to

the government action or inaction—and perhaps on the

response of others as well. . . . [I]t becomes the burden of

the plaintiff to adduce facts showing that . . . choices [of the

independent actors] have been or will be made in such

manner as to produce causation and permit redressability of

injury. Thus, when the plaintiff is not himself the object of

the government action or inaction he challenges, standing

is not precluded, but it is ordinarily substantially more

difficult to establish.

504 U.S. at 562 (internal quotation marks and citations omitted;

second emphasis added).

We grappled with these competing considerations in

National Wrestling, a case involving a challenge to a 1979

“Policy Interpretation” of the Department of Education (“DOE”)

addressing how colleges could comply with Title IX’s ban on

sex discrimination in intercollegiate athletics. Nat’l Wrestling

Coaches Ass’n, 366 F.3d at 933. The 1979 Policy Interpretation

established what became known as the “Three-Part Test,” under

which Title IX compliance can be demonstrated in any one of

three ways: (1) strictly by the numbers (i.e., athletic

opportunities for men and women in proportion to male and

female enrollment at the college); (2) by showing that the

college has been (and is) expanding programs that serve the

underrepresented sex; or (3) by showing that the interest and

abilities of the underrepresented sex are fully served by the

existing program. Id. at 935. The first of the three

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options—which was the easiest to objectively demonstrate—was

in essence a safe harbor.

The plaintiffs in National Wrestling were “several

membership organizations that represent the interests of

collegiate men’s wrestling coaches, athletes, and alumni.” Id. at

933. The organizations claimed injury “from decisions by

educational institutions to eliminate or reduce the size of men’s

wrestling programs,” allegedly to comply with the first prong of

the Three-Part Test. Id. at 935. The district court concluded the

plaintiffs lacked standing, and we affirmed. Id. at 949.

We reasoned that the “direct causes of appellants’ asserted

injuries—loss of collegiate-level wrestling opportunities for

male student-athletes—are the independent decisions of

educational institutions . . . . Appellants offer nothing but

speculation to substantiate their claim that a favorable decision

from this court will redress their injuries by altering these

schools’ independent decisions.” Id. at 936-37. In our

discussion, id. at 933, 938-39, we relied on Lujan as well as

several other Supreme Court decisions holding that standing to

challenge a government policy cannot be founded merely on

speculation as to what third parties will do in response to a

favorable ruling. See Allen v. Wright, 468 U.S. 737, 758-59

(1984) (speculative whether change in tax exemption for private

schools would lead to a change in school policies); Simon v.

E. Ky. Welfare Rights Org., 426 U.S. 26, 42-43 (1976)

(speculative whether change in tax rules governing nonprofit

hospitals would improve services for indigents); cf. Warth v.

Seldin, 422 U.S. 490, 504 (1975) (plaintiffs claiming a local

zoning ordinance excluded low income residents failed to show

they would be able to buy or rent homes in the town if the court

granted their requested remedy).

In National Wrestling, we also relied on our earlier holding

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in Freedom Republicans, Inc. v. Federal Election Commission,

13 F.3d 412 (D.C. Cir. 1994). In Freedom Republicans, an

independent, multiracial organization of Republicans sought to

challenge the Federal Election Commission’s funding of the

Republican National Convention, arguing the party’s delegateselection processes discriminated against minority groups. Id.

at 413-14. We found that, although the level of government

funding was “substantial,” the alleged injury was “not fairly

traceable to any encouragement on the part of the government,”

and “we cannot begin to predict . . . what impact withdrawal [of

government funding] might have on Party decisionmaking as

to . . . delegate-allocation.” Id. at 419.

The same deficiency that defeated standing in these cases

doomed the plaintiffs in National Wrestling. Specifically, the

plaintiffs had not “suggest[ed] that any particular school

necessarily would forego elimination of a wrestling team or

reinstate a previously disbanded program in the absence of [the

Three-Part Test’s safe harbor].” Nat’l Wrestling Coaches Ass’n,

366 F.3d at 939. Referencing a comment at oral argument that

the plaintiff organizations would have “better odds” of retaining

their wrestling programs if the court invalidated the Three-Part

Test, we explained that “a quest for ill-defined ‘better odds’ is

not close to what is required to satisfy the redressability prong

of Article III.” Id. We continued:

Even if appellants prevailed on the merits in their challenge

to the Three-Part Test, Title IX and the 1975 Regulations

would still be in place. Federally funded schools would still

be required to provide athletic opportunities in a manner

that equally accommodated both genders. . . . Schools

would remain free to eliminate or cap men’s wrestling

teams and may in some circumstances feel compelled to do

so to comply with the statute and the 1975 Regulations.

This is particularly so since Title IX itself permits evidence

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of disproportion in the distribution of benefits between

sexes to be considered in enforcement proceedings against

recipients of federal funding. Moreover, other reasons

unrelated to the challenged legal requirements[, such as a

desire to do what is morally right,] may continue to

motivate schools to take such actions.

Id. at 939-40 (citations omitted).

We identified two categories of cases where standing exists

to challenge government action though the direct cause of injury

is the action of a third party. First, standing exists where the

challenged government action authorized conduct that would

otherwise have been illegal. Id. at 940. In such cases, if the

authorization is removed, the conduct will become illegal and

therefore very likely cease. Hence, “[c]ausation and

redressability . . . are satisfied in this category of cases, because

the intervening choices of third parties are not truly independent

of government policy. . . . [T]hey could only preclude redress

if those third parties took the extraordinary measure of

continuing their injurious conduct in violation of the law.” Id.

at 940-41.

Second, standing has been found “where the record

presented substantial evidence of a causal relationship between

the government policy and the third-party conduct, leaving little

doubt as to causation and the likelihood of redress.” Id. at 941.

As examples we cited Tozzi v. United States Department of

Health & Human Services, 271 F.3d 301 (D.C. Cir. 2001), and

Block v. Meese, 793 F.2d 1303 (D.C. Cir. 1986). In Tozzi, we

found a manufacturer had standing to challenge the

government’s classification of dioxin as a carcinogen, because

there was “little doubt” the government’s authoritative statement

would affect demand for the manufacturer’s products. 271 F.3d

at 309. Similarly, in Block, we found a film distributor had

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standing to challenge the government’s classification of certain

films as “political propaganda,” because the distributor

submitted several declarations and affidavits detailing specific

instances in which potential customers declined to take a film

because of the classification. 793 F.2d at 1308.

In other words, to establish redressability at the pleading

stage, we required more than a bald allegation; we required that

the facts alleged be sufficient to demonstrate a substantial

likelihood that the third party directly injuring the plaintiff

would cease doing so as a result of the relief the plaintiff sought.

Nat’l Wrestling Coaches Ass’n, 366 F.3d at 942-44. We did not

find such allegations in National Wrestling, because a school’s

decision whether to keep a men’s wrestling program might

depend on factors having nothing to do with the Three-Part Test,

not the least of which was the school’s independent desire to

shift more resources to women’s sports. Nat’l Wrestling

Coaches Ass’n, 366 F.3d at 939-40. The plaintiffs “offered

nothing but ‘unadorned speculation’ to suggest that the schools

covered by Title IX would change their decisions if appellants

were to prevail in this case.” Id. at 943. We continued:

There is nothing in Tozzi and Block indicating that the third

parties whose conduct injured the plaintiffs would have had

reason to continue their injurious conduct unaltered in the

absence of the challenged government action. In this case,

by contrast, the continued vitality of Title IX itself and the

1975 Regulations means that schools must continue to take

gender equity into account when designing their athletic

programs. And appellants have offered nothing to indicate

that the schools will act any differently than they have in

the past regarding decisions to comply with Title IX.

Id.

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“In sum,” we concluded, “[t]he problem here is that

appellants have failed completely to satisfy the redressability

prong of Article III standing, for there is nothing to support

appellants’ claim that a favorable ruling would alter the schools’

conduct.” Id. at 944.

III

Here, as in National Wrestling, an agency has created a

voluntary safe-harbor provision; various regulated entities have

independently chosen to take advantage of the safe harbor; and

a party that is indirectly affected by the safe harbor has brought

a law suit, challenging it. Under National Wrestling, RPA needs

to show that the decision of clinics to reduce the hourly wage of

medical directors is linked to the continuing existence of the

safe-harbor provision such that invalidating the provision will be

reasonably likely to cause the clinics to raise the hourly wage.

Moreover, it is not enough simply to plead this causative link.

National Wrestling makes clear that, even at the pleading stage,

a party must make factual allegations showing that the relief it

seeks will be likely to redress its injury.

RPA claims standing as the representative of its members,

who allegedly suffered injury as a result of the safe harbor. See

Hunt v. Wash. State Apple Adver. Comm’n, 432 U.S. 333, 343

(1977) (“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”). RPA has made detailed

allegations regarding some elements of standing, but none

regarding redressability. Although RPA alleges that its

members were injured, and that the safe harbor was the cause,

it does not allege facts showing that even a single hospital or

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dialysis center would pay a medical director more if the court

held the safe-harbor provision invalid.

In support of standing, RPA supplemented the factual

allegations in its complaint with a single affidavit of one of its

members: Dr. Joseph Anzalone, a nephrologist, who was the

medical director for the dialysis facility at Central Washington

Hospital in Washington state. Affidavit of Joseph Anzalone,

M.D. (June 9, 2005), Joint Appendix 83. In 2005, after the safe

harbor was created, the facility where Dr. Anzalone performed

services (and to which he made referrals) reduced his hourly

wage, stating its “hands were tied” by a “new federal law.” Id.

at 84-85. Rather than accept this reduction in his wage, Dr.

Anzalone left his post as medical director of the facility, losing

$35,000 in income as a result. Id. Since that time, he has not

been able to obtain a similar post at another facility, because he

has not identified an opening for a medical director position in

his area. Id. at 85.

Assuming, for purposes of argument, that Dr. Anzalone

adequately asserts an injury, causation remains uncertain and

redressability is not addressed at all. The affidavit does not even

mention the safe-harbor provision in specific terms. Instead, it

refers vaguely to a “new federal law,” which might be a

reference to the Stark Law in general. Therefore, we really have

no way of knowing why the dialysis facility at Central

Washington Hospital reduced Dr. Anzalone’s hourly wage, and

we cannot assume the safe-harbor provision was a critical factor.

Nor do we have even an allegation that vacating the safe harbor

would lead to an increase in Dr. Anzalone’s compensation.

Nor does the logic of Dr. Anzalone’s allegations regarding

injury and causation make it “likely,” rather than “speculative,”

that, if the safe harbor were invalidated or rescinded, the Central

Washington Hospital dialysis facility would, in response, raise

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the hourly wage it pays its medical director. Ctr. for Law &

Educ. v. Dep’t of Educ., 396 F.3d 1152, 1157 (D.C. Cir. 2005)

(quoting Lujan, 504 U.S. at 560-61) (internal quotation marks

omitted). It is at least as plausible that, having established the

market will easily bear the lower wage, the clinic will maintain

the lower wage. See E. Ky. Welfare Rights Org., 426 U.S. at 43

(holding, in a challenge to an IRS revenue ruling allowing

favorable tax treatment to nonprofit hospitals that offered

indigents only emergency room service, that the plaintiffs failed

to establish redressability where, if such treatment were

rescinded, it was “just as plausible that the hospitals to which

[the plaintiffs] may apply for service would elect to forgo

favorable tax treatment to avoid the undetermined financial

drain of an increase in the level of uncompensated services” as

it was that the “suit would result in the availability to [the

plaintiffs] of such services”) (quoted in Nat’l Wrestling Coaches

Ass’n, 366 F.3d at 938). If one effect of the safe harbor has been

to lower wages for medical directors, a secondary effect has

been to demonstrate to dialysis facilities that they can pay lower

wages and still function effectively. Thus, it is “speculative,”

rather than “likely,” that invalidating the safe harbor will

somehow cause these facilities to pay more. The effect (if any)

of the safe harbor cannot be simply undone.

There is a related point that the trial court found particularly

persuasive, as do we. Even if a court invalidated the safe

harbor, dialysis facilities would remain obligated under the Stark

Law to pay no more than fair market value for medical director

services, and CMS policy makes clear, in this regard, that a

facility can offer any method of proof “that is commercially

reasonable and provides [the agency] with evidence that the

compensation is comparable to what is ordinarily paid . . . in the

location at issue, by parties in arm’s-length transactions who are

not in a position to refer to one another.” 66 Fed. Reg. at 944.

The effect of the safe-harbor provision has been to identify one

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relatively simple method of proof CMS finds persuasive, and

there is no reason to think CMS will find this method of proof

any less persuasive if the safe harbor is invalidated. See Renal

Physician Ass’n, 422 F. Supp. 2d at 84-85. Indeed, the

gravamen of RPA’s complaint is that the safe harbor sets

compensation rates below market, and there thus can be no

doubt that a dialysis facility or hospital complies with the Stark

Law if its compensation rates are set in accordance with the safe

harbor methodologies. See 42 U.S.C. § 1395nn(e)(3)(A)

(approving of compensation rates that “do[] not exceed fair

market value” (emphasis added)). In short, the word is already

out, and therefore it is too late to reverse course. Even if a court

were to declare the safe harbor invalid, the same dialysis

facilities that have opted to rely on the safe harbor will be likely

to continue to rely on the safe-harbor method of proof, knowing

with some assurance that the agency will be likely to accept this

proof as indicative of fair market value. Indeed, the only way to

prevent this result would be for a court not only to invalidate the

safe harbor but also to repudiate the safe harbor as an acceptable

method of proof, but RPA does not suggest any legal basis for

such relief, nor does it seek such relief.

In sum, RPA has not satisfied the redressability prong of the

standing requirement, because it has not alleged any facts

showing that an order invalidating the safe harbor will likely

cause dialysis facilities to increase the wages of RPA members.

Specifically, RPA failed to allege facts showing that even a

single hospital or dialysis center would pay a medical director

more, or would forgo a planned pay cut, if the court held the

safe-harbor provision invalid.

In reaching this conclusion, we do not read National

Wrestling more broadly than is warranted by the facts of that

case. We see National Wrestling as standing for two simple

points, neither of which constitutes a shift in the law of standing,

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but both of which doom RPA’s claim of standing here. First,

although less is required to survive a motion to dismiss than a

motion for summary judgment, National Wrestling makes clear

that a bald allegation of standing is not enough to survive even

a motion to dismiss where neither the factual allegations nor

their logic establish redressability. SeeNat’l Wrestling Coaches

Ass’n, 366 F.3d at 938, 941-43. Second, National Wrestling

confirms that causation does not inevitably imply redressability.

See id. at 937, 942-43. There might be some circumstances in

which governmental action is a substantial contributing factor in

bringing about a specific harm, but the undoing of the

governmental action will not undo the harm, because the new

status quo is held in place by other forces. That was the case in

National Wrestling, where the independent desire of colleges to

balance their athletic programs worked to hold in place changes

that might have been influenced at the outset by the Department

of Education’s policies. Id. at 939-40. Likewise, that is the case

here, where the independent choice of the dialysis facilities,

seeking to keep costs down and avoid the risks of litigation, will

hold in place the alleged effect of the safe harbor even if a court

were to invalidate the safe harbor.

IV

RPA argues a lesser showing of redressability suffices here

because it is alleging an injury to procedural rights. See Lujan,

504 U.S. at 572 n.7. This argument also fails, however.

The point of the lower standard for redressability in a

procedural-injury case is that the injury in such a case is not

associated only with the substantive decision the agency reached

but also with the agency’s failure to follow proper procedures in

reaching that decision. Therefore, in a procedural-injury case,

a plaintiff need not show that better procedures would have led

to a different substantive result. See Nat’l Parks Conservation

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Ass’n v. Manson, 414 F.3d 1, 5 (D.C. Cir. 2005); Sugar Cane

Growers Coop. v. Veneman, 289 F.3d 89, 94-95 (D.C. Cir.

2002). Nevertheless, to have standing to bring a proceduralinjury case, the procedure at issue must be one designed to

protect a threatened interest of the plaintiff. Lujan, 504 U.S. at

573 n.8; Nat’l Parks Conservation Ass’n, 414 F.3d at 5; Fla.

Audubon Soc’y v. Bentsen, 94 F.3d 658, 664 (D.C. Cir. 1996).

Moreover, though the plaintiff in a procedural-injury case is

relieved of having to show that proper procedures would have

caused the agency to take a different substantive action, the

plaintiff must still show that the agency action was the cause of

some redressable injury to the plaintiff. Ctr. for Law & Educ.,

396 F.3d at 1157, 1160. Therefore, here, RPA must show the

safe harbor inflicted on it or its members a redressable injury.

For the reasons already stated, it has failed to do so.

V

We agree with the district court that RPA lacks standing to

bring its case because it has not shown that a ruling in its favor

will redress the injury it alleges. The dismissal for lack of

subject matter jurisdiction is therefore

Affirmed.

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