2002 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

2-6-2002

PA Psychiatric v. Green Spring Health

Precedential or Non-Precedential:

Docket 0-3403

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Recommended Citation

"PA Psychiatric v. Green Spring Health" (2002). 2002 Decisions. Paper 108.

http://digitalcommons.law.villanova.edu/thirdcircuit_2002/108
Filed February 6, 2002 

UNITED STATES COURT OF APPEALS 

FOR THE THIRD CIRCUIT 

No. 00-3403 

PENNSYLVANIA PSYCHIATRIC SOCIETY, 

 Appellant 

v. 

GREEN SPRING HEALTH SERVICES, INC.; 

MAGELLAN HEALTH SERVICES, INC.; 

HIGHMARK, INC.; 

KEYSTONE HEALTH PLAN WEST, INC.; 

KEYSTONE HEALTH PLAN CENTRAL, INC.; 

KEYSTONE HEALTH PLAN EAST, INC. 

On Appeal from the United States District Court 

for the Western District of Pennsylvania 

D.C. Civil Action No. 99-cv-00937 

(Honorable Gary L. Lancaster) 

Argued October 31, 2000 

Before: SCIRICA, NYGAARD and BARRY, Circuit Ju dges

(Filed: February 6, 2002) 

 PHILIP H. LEBOWITZ, ESQUIRE 

 (ARGUED) 

 Pepper Hamilton 

 3000 Two Logan Square 

 18th and Arch Streets 

 Philadelphia, Pennsylvania 19103 

 Attorney for Appellant 
 JOHN R. LEATHERS, ESQUIRE 

 (ARGUED) 

 Buchanan Ingersoll 

 One Oxford Centre, 20th Floor 

 301 Grant Street 

 Pittsburgh, Pennsylvania 15219 

 Attorney for Appellees, 

 Green Spring Health Services, Inc. 

 and Magellan Health Services, Inc. 

 GERRI L. SPERLING, ESQUIRE 

 Springer Bush & Perry 

 Two Gateway Center, 15th Floor 

 Pittsburgh, Pennsylvania 15222 

 Attorney for Appellees, 

 Highmark, Inc. and Keystone 

 Health Plan West, Inc. 

 CARLETON O. STROUSS, ESQUIRE 

 Kirkpatrick & Lockhart 

 Payne-Shoemaker Building 

 240 North Third Street 

 Harrisburg, Pennsylvania 17101 

 Attorney for Appellee, 

 Keystone Health Plan Central, Inc. 

 THOMAS S. BIEMER, ESQUIRE 

 JOHN J. HIGSON, ESQUIRE 

 Dilworth Paxson 

 3200 The Mellon Bank Center 

 1735 Market Street 

 Philadelphia, Pennsylvania 19103 

 Attorneys for Appellee, 

 Keystone Health Plan East, Inc. 

 2 
 RICHARD D. RASKIN, ESQUIRE 

 Sidley Austin Brown & Wood 

 10 South Dearborn Street 

 Chicago, Illinois 60603 

 Attorney for Amici Curiae- 

 Appellant, The American Medical 

 Association and Pennsylvania 

 Medical Society 

OPINION OF THE COURT 

SCIRICA, Circuit Judge. 

The Pennsylvania Psychiatric Society sued several 

managed health care organizations on behalf of its member 

psychiatrists and their patients. The gravamen of its 

complaint was that the managed health care organizations 

impaired the quality of health care provided by 

psychiatrists to their patients by refusing to authorize 

necessary psychiatric treatment, excessively burdening the 

reimbursement process and impeding other vital care. 

The principal issue on appeal is whether the 

Pennsylvania Psychiatric Society has properly pleaded 

associational and third-party standing. Finding the Society 

would require significant individual participation to 

establish its member psychiatrists' claims, the District 

Court dismissed its complaint for lack of associational 

standing.1 The District Court also found the Society's 

member psychiatrists lacked third-party standing to pursue 

their patients' claims. As an alternative ground for 

dismissal, the District Court held the mandatory arbitration 

provision in the psychiatrists' contracts barred the Society 

from advancing their members' claims in court. 

We believe the District Court's dismissal under Fed. R. 

Civ. P. 12(b)(6) was premature. For this reason, we will 

vacate and remand for further proceedings. 

_________________________________________________________________ 

1. The District Court adopted the Magistrate Judge's Report and 

Recommendation in full. 

 3 
I. 

The District Court had subject matter jurisdiction under 

28 U.S.C. S 1331 because certain claims asserted by the 

Pennsylvania Psychiatric Society arose under the Employee 

Retirement Income Security Act of 1974 ("ERISA"), 29 

U.S.C. SS 1001-1461.2 We have jurisdiction under 28 U.S.C. 

S 1291. 

_________________________________________________________________ 

2. The case was removed from state court under ERISA's civil 

enforcement provision, S 502(a)(1)(b), which preempts state court 

jurisdiction for claims by a plan participant "to recover benefits due to 

him under the terms of his plan, to enforce his rights under the terms 

of the plan, or to clarify his rights to future benefits under the terms 

of 

the plan." 29 U.S.C. S 1132(a)(1)(B); Metropolitan Life Ins. Co. v. 

Taylor, 

481 U.S. 58, 66 (1987); Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 56 

(1987). 

To discern which claims are preempted, "we embraced a distinction 

between claims pertaining to the quality of the medical benefits provided 

to a plan participant [that is, not preempted] and claims that the plan 

participant was entitled to, but did not receive, a certain quantum of 

benefits under his or her plan [that is, preempted]." In re U.S. 

Healthcare, 

Inc., 193 F.3d 151, 162 (3d Cir. 1999) (citing Dukes v. U.S. Healthcare, 

Inc., 57 F.3d 350, 357-58 (3d Cir. 1995)), cert. denied sub nom., U.S. 

Healthcare, Inc. v. Bauman, 530 U.S. 1242 (2000). Explaining this 

distinction in the Supreme Court's lexicon, we recently restated our 

position that "challenges [to] the administration of or eligibility for 

benefits [i.e., quantity] . . . fall[ ] within the scope of S 502(a) and 

[are] 

completely preempted . . . ." Pryzbowski v. U.S. Healthcare, Inc., 245 

F.3d 266, 273 (3d Cir. 2001). To this end, claims against HMO policies 

that purportedly delay care "fall within the realm of the administration 

of benefits." Id. 

On behalf of its members' patients, the Pennsylvania Psychiatric 

Society alleges the MCOs implemented policies to discourage or prevent 

subscribers from using mental health services. UnderS 502(a), "[r]elief 

may take the form of accrued benefits due, a declaratory judgment on 

entitlement to benefits, or an injunction against a plan administrator's 

improper refusal to pay benefits." Dedeaux , 481 U.S. at 53. In this case, 

the relief sought involves the administration of benefits, because it 

would 

change the quantum of mental health services provided. These 

allegations fall within the scope of ERISA's civil enforcement provision, 

and, therefore, removal was proper as ERISA completely preempts at 

least some of the claims alleged by the Pennsylvania Psychiatric Society 

on behalf of its members' patients. 
 4 
II. 

The Pennsylvania Psychiatric Society, a nonprofit 

corporation representing licensed psychiatrists in 

Pennsylvania, filed suit on behalf of its member 

psychiatrists and their patients who subscribe to managed 

health care plans administered by Green Spring Health 

Services. 

There are several defendants. Green Spring Health 

Services, Inc. provides a network of psychiatrists as well as 

administrative services for managed health care plans; 

Magellan Health Services, Inc. is its corporate parent. 

Keystone Health Plan West, Inc., Keystone Health Plan 

Central, Inc., and Keystone Health Plan East, Inc. are 

health maintenance organizations that contract with Green 

Spring Health Services to provide mental health and

substance abuse services to their subscribers. Highmark, 

Inc. is the parent company of Keystone Health Plan West 

(these managed care organizations collectively are referred 

to as "the MCOs"). Green Spring Health Services, Magellan 

Health Services and Highmark choose which psychiatrists 

to credential to provide these services. 

Green Spring Health Services administers the psychiatric 

and substance abuse services for the employee benefit 

plans provided by the health management organizations. 

For this purpose, it enters into contracts with psychiatrists 

(the "Provider Agreement") to form a provider network to 

service the plans. In particular, the Provider Agreement 

assures that Green Spring Health Services will not 

undermine the psychiatrists' responsibility to provide 

patients with the mental health services they require. For 

most disputes arising between credentialed psychiatrists 

and Green Spring Health Services, the Provider Agreement 

also contains a mandatory arbitration clause that requires 

exhaustion of internal review procedures before seeking 

binding arbitration. 

Alleging the MCOs unfairly profit at the expense of the 

psychiatrists and their patients, the Pennsylvania 

Psychiatric Society asserts several tort and breach of 

contract claims for impeding necessary psychiatric 

treatment. The Pennsylvania Psychiatric Society contends 

 5 
the MCOs refused to authorize and provide reimbursement 

for medically necessary mental health treatment; interfered 

with patients' care by permitting non-psychiatrists to make 

psychiatric treatment decisions; violated Provider 

Agreements by improperly terminating relationships with 

certain psychiatrists; and breached the contractual duties 

of good faith and fair dealing by failing to timely pay 

psychiatrists and by referring patients to inconvenient 

treatment locations, thereby depriving some patients access 

to treatment. 

On the basis of these allegations, the Pennsylvania

Psychiatric Society claims the MCOs tortiously interfered 

with the psychiatrists' livelihood as well as the psychiatristpatient relationship. In addition, the Society asserts the 

MCOs fraudulently misrepresented the quality of care their 

plans would provide to subscribers and the benefits

psychiatrists would receive for providing their services. 

Finally, on behalf of its members' patients, the Society 

alleges the MCOs made false representations to their 

subscribers in violation of the Pennsylvania Unfair Trade 

Practices and Consumer Protection Law, 73 Pa. Const. Stat. 

Ann. S 201-1 et seq. (West 2001). 

The complaint sought declaratory relief, injunctive relief, 

and damages. The Pennsylvania Psychiatric Society does 

not appeal the dismissal of its damages claims. 

The suit commenced in state court but was removed to 

federal court on grounds that ERISA preempted all or, at 

least, some of the Society's claims. Recommending 

dismissal, the Magistrate Judge issued a Report and

Recommendation finding the Society lacked standing to 

assert the claims of its members and their patients. As an 

alternative ground for dismissal, the Magistrate Judge 

found the mandatory arbitration clause in the psychiatrists' 

contracts foreclosed advancing the claims in court. The 

District Court adopted the Magistrate Judge's Report. The 

Pennsylvania Psychiatric Society timely appealed. 

III. 

The Pennsylvania Psychiatric Society's ability to press the 

claims of its members and their patients initially hinges on 

 6 
whether it meets the constitutional requirements for 

associational standing. For its part, the Society seeks only 

to pursue claims on behalf of its members and their

patients; it does not allege direct injury to itself. 

Our review of a dismissal under Fed. R. Civ. P. 12(b)(6) 

for lack of standing is plenary. ACLU-NJ v. Township of 

Wall, 246 F.3d 258, 261 (3d Cir. 2001); Gen. Instrument 

Corp. v. Nu-Tek Elecs. & Mfg., Inc., 197 F.3d 83, 86 (3d Cir. 

1999). On appeal, we must accept as true all material 

allegations of the complaint and draw all reasonable 

inferences in a light most favorable to plaintiff. Maio v. 

Aetna, Inc., 221 F.3d 472, 481-82 (3d Cir. 2000). " `The 

issue is not whether a plaintiff will ultimately prevail but 

whether the claimant is entitled to offer evidence to support 

the claims.' " In re Burlington Coat Factory Sec. Litig., 114 

F.3d 1410, 1420 (3d Cir. 1997) (quoting Scheuer v. Rhodes, 

416 U.S. 232, 236 (1974)). Therefore, we may affirm the 

district court only if we believe that the association would 

be entitled to no relief under any set of facts consistent 

with its allegations. Allegheny Gen. Hosp. v. Philip Morris, 

Inc., 228 F.3d 429, 434-35 (3d Cir. 2000); City of Pittsburgh 

v. West Penn Power Co., 147 F.3d 256, 262 n.12 (3d Cir. 

1998). 

A. 

To satisfy the "case or controversy" standing requirement 

under Article III, S 2 of the United States Constitution, a 

plaintiff must establish that it has suffered a cognizable 

injury that is causally related to the alleged conduct of the 

defendant and is redressable by judicial action. Friends of 

the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc. , 528 U.S. 

167, 180-81 (2000) (discussing Lujan v. Defenders of 

Wildlife, 504 U.S. 555, 560-61 (1992)); The Pitt News v. 

Fisher, 215 F.3d 354, 359 (3d Cir. 2000). Associations may 

satisfy these elements by asserting claims that arise from 

injuries they directly sustain. See, e.g., Babbitt v. United 

Farm Workers Nat'l Union, 442 U.S. 289, 299 n.11 (1979). 

Absent injury to itself, an association may pursue claims 

solely as a representative of its members. See, e.g., New 

York State Club Ass'n, Inc. v. City of New York, 487 U.S. 1 

(1988); Pub. Interest Research Group of N.J., Inc. v. 

 7 
Magnesium Elektron, Inc., 123 F.3d 111 (3d Cir. 1997). By 

permitting associational standing, we "recognize[ ] 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, United Auto., Aerospace & 

Agric. Implement Workers v. Brock, 477 U.S. 274, 290 

(1986); see also Joint Anti-Fascist Refugee Comm. v. 

McGrath, 341 U.S. 123, 187 (1951) (Jackson, J., 

concurring) (noting purpose of joining an association "often 

is to permit the association . . . to vindicate the interests of 

all"). 

The Supreme Court has enunciated a three-prong test for 

associational standing. An association must demonstrate 

that "(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 Adver. Comm'n, 432 U.S. 333, 343 

(1977) (permitting state agency that represented apple 

industry to challenge North Carolina statute); see also 

Laidlaw Envtl. Servs., 528 U.S. at 181; Hosp. Council v. City 

of Pittsburgh, 949 F.2d 83, 86 (3d Cir. 1991). The need for 

some individual participation, however, does not necessarily 

bar associational standing under this third criterion. 

Hospital Council, 949 F.2d at 89-90. 

In this case, the MCOs concede the Pennsylvania 

Psychiatric Society satisfies Hunt's first and second prongs. 

But echoing defendants' objections, the District Court 

found the psychiatrists' claims would require a level of 

individual participation that precludes associational 

standing. As noted, the Society has not appealed the 

dismissal of its damages claims. This is noteworthy because 

damages claims usually require significant individual 

participation, which fatally undercuts a request for 

associational standing. On this point, the Supreme Court 

has explained that 

 "[w]hether an association has standing to invoke the 

 court's remedial powers on behalf of its members 

 depends in substantial measure on the nature of the 

 relief sought. If in a proper case the association seeks 

 8 
 a declaration, injunction, or some other form of 

 prospective relief, it can reasonably be supposed that 

 the remedy, if granted, will inure to the benefit of those 

 members of the association actually injured. Indeed, in 

 all cases in which we have expressly recognized 

 standing in associations to represent their members, 

 the relief sought has been of this kind." 

Hunt, 432 U.S. at 343 (quoting Warth v. Seldin, 422 U.S. 

490, 515 (1975)). Because claims for monetary relief 

usually require individual participation, courts have held 

associations cannot generally raise these claims on behalf 

of their members. E.g., Air Transp. Ass'n v. Reno, 80 F.3d 

477, 484-85 (D.C. Cir. 1996) (collecting cases); Sanner v. 

Bd. of Trade, 62 F.3d 918, 923 (7th Cir. 1995) (same). 

Specifically, the Supreme Court has counseled "that an 

association's action for damages running solely to its 

members would be barred for want of the association's 

standing to sue." United Food & Commercial Workers Union 

Local 751 v. Brown Group, Inc., 517 U.S. 544, 546 (1996) 

(relying on Hunt, 432 U.S. at 343). Had the Society

continued to press its claims for damages on appeal, 

dismissal under Rule 12(b)(6) would be entirely appropriate. 

The sole associational standing question remains 

whether, taking the allegations as true, the Pennsylvania 

Psychiatric Society's requests for declaratory and injunctive 

relief will require an inappropriate level of individual 

participation.3 We first addressed this question in Hospital 

Council of Western Pennsylvania v. City of Pittsburgh, where 

an association alleged that certain city and counties 

threatened to discriminate against nonprofit hospitals on 

taxation, zoning, and contract matters if the hospitals 

_________________________________________________________________ 

3. Individual participation by an association's membership may be 

unnecessary when the relief sought is prospective (i.e., an injunction or 

declaratory judgment). See Brock, 477 U.S. at 287-88; Ark. Med. Soc'y, 

Inc. v. Reynolds, 6 F.3d 519, 528 (8th Cir. 1993); Action Alliance of 

Senior 

Citizens v. Snider, Civ. A. No. 93-4827, 1994 WL 384990, at *3 (E.D. Pa. 

July 18, 1994) ("[P]articipation of individual members is rarely necessary 

when injunctive relief rather than individual damages is sought. Hospital 

Council, 949 F.2d at 89. This particularly true where . . . a broad based 

change in procedure rather than individualized injunctive relief is 

sought."). 

 9 
refused to make voluntary payments in lieu of taxes. 949 

F.2d 83. Interpreting Hunt's third prong through the prism 

of earlier Supreme Court jurisprudence, we rejected the 

city's argument that some individual participation violated 

this requirement.4 Id. at 89. Explaining the circumstances 

on which this conclusion rested, we concluded: 

 [T]he claims asserted by the Council would require 

 some participation by some Council members. This 

 case, unlike many prior associational standing cases, 

 does not involve a challenge to a statute, regulation, or 

 ordinance, but instead involves a challenge to alleged 

 practices that would probably have to be proved by 

 evidence regarding the manner in which the defendants 

 treated individual member hospitals. Adjudication of 

 such claims would likely require that member hospitals 

 provide discovery, and trial testimony by officers and 

 employees of member hospitals might be needed as 

 well. Nevertheless, since participation by "each 

 [allegedly] injured party" would not be necessary, we 

 see no ground for denying associational standing. 

Id. at 89-90. 

The Court of Appeals for the Seventh Circuit 

subsequently adopted our interpretation of Hunt 's third 

prong in Retired Chicago Police Association v. City of 

Chicago, where the Retired Chicago Police Association sued 

the city to bar implementation of increased health care 

premiums. 7 F.3d 584 (7th Cir. 1993). In this drawn-out 

litigation, the Retired Chicago Police Association 

represented city employees who allegedly had been 

guaranteed subsidized health coverage. When the city 

attempted to raise the coverage price because of escalating 

costs, the employees claimed the city reneged on its 

promise and sued. Believing the allegations would require 

individual participation, the district court concluded the 

association lacked standing. Id. at 600-01. Relying on 

Hospital Council, the court of appeals reversed and

remanded, holding the association could attempt to 

_________________________________________________________________ 

4. In its brief, Keystone suggests reasons why individual participation 

would be required. 

 10 
establish its allegations with limited membership 

participation.5 Id. at 602-03. 

The MCOs argue the medical coverage decisions on 

psychiatric care and substance abuse services, which form 

the basis of the organization's allegations, are fact-intensive 

inquiries. For this reason, they assert the examination of 

medical care determinations will demand significant

individual participation. To buttress this point, defendants 

note they offer subscribers various health care plans that in 

turn provide varying benefits. Consequently, they argue, 

demonstrating any single coverage decision violated their 

obligations will entail a case-by-case examination of a 

patient's condition along with the corresponding available 

benefits. In support, defendants rely on Rent Stabilization 

Association v. Dinkins, where an association of landowners 

alleged rent regulations constituted an unconstitutional 

taking of their property. 5 F.3d 591 (2d Cir. 1993). There, 

the Court of Appeals for the Second Circuit held that the 

extensive individual testimony required to adjudicate the 

claims would violate Hunt. Id. at 596; see also Reid v. Dep't 

of Commerce, 793 F.2d 277, 279-80 (Fed. Cir. 1986) 

(holding union lacked standing to assert back pay claims 

for its members because each claim depended on member's 

individual circumstances). The court reasoned the claims 

foreclosed standing because it 

 would have to engage in an ad hoc factual inquiry for 

 each landlord who alleges that he has suffered a 

 taking. [The court] would have to determine the 

 landlord's particular return based on a host of 

 individualized financial data, and [the court] would 

_________________________________________________________________ 

5. The Court of Appeals for the Seventh Circuit stated: 

 We believe that the approach of the Third Circuit is a sound one. 

We 

 can discern no indication in Warth, Hunt , or Brock that the 

Supreme 

 Court intended to limit representational standing to cases in which 

 it would not be necessary to take any evidence from individual 

 members of an association . . . . Rather, the third prong of Hunt 

is 

 more plausibly read as dealing with situations in which it is 

 necessary to establish "individualized proof," 432 U.S. at 344, for 

 litigants not before the court in order to support the cause of 

action. 

7 F.3d at 601-02. 

 11 
 have to investigate the reasons for any failure to obtain 

 an adequate return, because the Constitution certainly 

 cannot be read to guarantee a profit to an inefficient or 

 incompetent landlord. 

Rent Stabilization, 5 F.3d at 596. But the Court of Appeals 

for the Second Circuit has not rejected associational 

standing where only limited individual participation by 

some members would be required. See N.Y. State Nat'l Org. 

for Women v. Terry, 886 F.2d 1339, 1349 (2d Cir. 1989) 

(association warranted standing although evidence from 

some individual members necessary); see also Nat'l Ass'n of 

Coll. Bookstores, Inc. v. Cambridge Univ. Press, 990 F. 

Supp. 245, 249-50 (S.D.N.Y. 1997). We agree that 

conferring associational standing would be improper for 

claims requiring a fact-intensive-individual inquiry. 

The District Court reviewed the Pennsylvania Psychiatric 

Society's allegations--overly restrictive treatment

authorizations; care determinations based on criteria 

besides medical necessity; creation of improper obstacles to 

physician credentialing; imposition of overly-burdensome 

administrative requirements; failure to pay psychiatrists for 

rendered services; direct interference with psychiatristpatient relations--and found each assertion would 

necessitate significant individual participation. If this were 

true, the organization would not satisfy the associational 

standing requirements.6 

But the Pennsylvania Psychiatric Society maintains the 

heart of its complaint involves systemic policy violations 

that will make extensive individual participation 

unnecessary. In effect, the Society contends the methods 

the MCOs employ for making decisions--e.g., authorizing or 

denying mental health services, credentialing physicians, 

and reimbursement--represent breaches of contract as well 

as tortious conduct. Therefore, insofar as its allegations 

concern how the MCOs render these decisions, the 

Society's complaint "involve[s] [ ] challenge[s] to alleged 

practices," Hospital Council, 949 F.2d at 89, that may be 

_________________________________________________________________ 

6. Likewise, if the Pennsylvania Psychiatric Society continued to press 

damages claims on behalf of its members, it would not meet the 

requirements for associational standing. See supra p. 8. 

 12 
established with sample testimony, which may not involve 

specific, factually intensive, individual medical care 

determinations. See Virginia Hosp. Ass'n v. Baliles, 868 

F.2d 653, 663 (4th Cir. 1989), aff 'd on other grounds sub 

nom. Wilder v. Virginia Hosp. Ass'n, 496 U.S. 498 (1990). 

If the Pennsylvania Psychiatric Society can establish 

these claims with limited individual participation, it would 

satisfy the requirements for associational standing. While 

we question whether the Society can accomplish this, at 

this stage of the proceedings on a motion to dismiss for 

lack of standing, we review the sufficiency of the pleadings 

and "must accept as true all material allegations of the 

complaint and must construe the complaint in favor of the 

plaintiff." Trump Hotels & Casino Resorts, Inc. v. Mirage 

Resorts Inc., 140 F.3d 478, 483 (3d Cir. 1998) (citing Warth, 

422 U.S. at 501). For this reason, we believe the Society's 

suit should not be dismissed before it is given the

opportunity to establish the alleged violations without 

significant individual participation (as noted, if the damages 

claims remained, we would affirm the dismissal under Fed. 

R. Civ. P. 12(b)(6)). Moreover, as the organization concedes, 

if it cannot adequately demonstrate the MCOs' breaches 

with limited individual participation, its suit should be 

dismissed. Because this appeal arises on a motion to 

dismiss, the Pennsylvania Psychiatric Society should be 

allowed to move forward with its claims within the 

boundaries of associational standing. Therefore, we

conclude that the District Court erred in dismissing the 

matter on this basis under Fed. R. Civ. P. 12(b)(6). 

Nevertheless, the District Court is free to revisit this issue. 

B. 

In addition to advancing the rights of its member 

psychiatrists, the Pennsylvania Psychiatric Society seeks to 

assert the claims of its members' patients who are also 

allegedly injured by defendants' practices. Because the 

patients are not members of, or otherwise directly 

associated with, the Pennsylvania Psychiatric Society, the 

Society does not have associational standing to assert their 

claims. Nonetheless, the Society maintains it may bring the 

 13 
patients' claims under the doctrine of third-party standing.7 

In particular, the Society contends its member psychiatrists 

have third-party standing to assert the claims of their 

patients, and the Society has standing to bring the claims 

of its members, including their third-party claims.

Defendants have challenged both of these steps. Therefore, 

we must decide, first, whether the member psychiatrists 

have third-party standing to bring the claims of their 

patients, and second, whether the Pennsylvania Psychiatric 

Society has associational standing to assert these members' 

third-party claims. 

1. 

Apart from the constitutional requirements for standing,8 

courts have imposed a set of prudential limitations on the 

exercise of federal jurisdiction over third-party claims. 

Bennett v. Spear, 520 U.S. 154, 162 (1997) ("[T]he federal 

judiciary has also adhered to a set of prudential principles 

that bear on the question of standing.") (quotation and 

citation omitted); Warth, 422 U.S. at 498; Powell v. Ridge, 

189 F.3d 387, 404 (3d Cir. 1999). The restrictions against 

third-party standing do not stem from the Article III "case 

or controversy" requirement, but rather from prudential 

concerns,9 Amato v. Wilentz , 952 F.2d 742, 748 (3d Cir. 

_________________________________________________________________ 

7. Third-party standing is also commonly known as jus tertii standing. 

City of Chicago v. Morales, 527 U.S. 41, 56 n.22 (1999); The Pitt News, 

215 F.3d at 362 n.6; see also Henry Monaghan, Third Party Standing, 84 

Colum. L. Rev. 277, 278 n.6 (1984) (explaining jus tertii standing). 

8. Under standing doctrine, a plaintiff must satisfy three constitutional 

preconditions: (1) a cognizable injury that is (2) causally connected to 

the 

alleged conduct and is (3) capable of being redressed by a favorable 

judicial decision. Lujan, 504 U.S. at 560-61; see also supra pp. 6-7. 

9. The Supreme Court has consistently held that standing to assert 

third-party rights is a prudential matter: 

 [O]ur decisions have settled that limitations on a litigant's 

assertion 

 of jus tertii are not constitutionally mandated, but rather stem 

from 

 a salutary "rule of self-restraint" designed to minimize 

unwarranted 

 intervention into controversies where the applicable constitutional 

 questions are ill-defined and speculative. 

Craig v. Boren, 429 U.S. 190, 193-95 (1976); see also Brown Group, 517 

U.S. at 557; Allen v. Wright, 468 U.S. 737, 751 (1984); Singleton v. 

Wulff, 

428 U.S. 106, 123-24 (1976) (plurality opinion); Warth 422 U.S. at 499; 
Barrows v. Jackson, 346 U.S. 249, 255, 257 (1953). 

 14 
1991), which prevent courts from "deciding questions of 

broad social import where no individual rights would be 

vindicated and . . . limit access to the federal courts to 

those litigants best suited to assert a particular claim." 

Gladstone, Realtors v. Vill. of Bellwood, 441 U.S. 91, 99-100 

(1979); see also Sec'y of State v. Joseph H. Munson Co., 467 

U.S. 947, 955 (1984). 

It is a well-established tenet of standing that a"litigant 

must assert his or her own legal rights and interests, and 

cannot rest a claim to relief on the legal rights or interests 

of third parties." Powers v. Ohio, 499 U.S. 400, 410 (1991); 

see also Valley Forge Christian Coll. v. Ams. United for 

Separation of Church and State, Inc., 454 U.S. 464, 474-75 

(1982); Wheeler v. Travelers Ins. Co., 22 F.3d 534, 538 (3d 

Cir. 1994). This principle is based on the assumption that 

"third parties themselves usually will be the best 

proponents of their own rights," Singleton v. Wulff, 428 U.S. 

106, 114 (1976) (plurality opinion), which serves to foster 

judicial restraint and ensure the clear presentation of 

issues. See Munson, 467 U.S. at 955. 

Yet the prohibition is not invariable and our 

jurisprudence recognizes third-party standing under certain 

circumstances.10 Campbell v. Louisiana, 523 U.S. 392, 397- 

98 (1998); see also Hodel v. Irving, 481 U.S. 704, 711 

(1987) (acknowledging general rule that party must assert 

own interests is "subject to exceptions"). In particular, if a 

course of conduct "prevents a third-party from entering into 

a relationship with the litigant (typically a contractual 

relationship), to which relationship the third party has a 

_________________________________________________________________ 

10. For instance, doctors may be able to assert the rights of patients; 

lawyers may be able to assert the rights of clients; vendors may be able 

to assert the rights of customers; and candidates for public office may be 

able to assert the rights of voters. See, e.g. , Caplin & Drysdale, 

Chartered 

v. United States, 491 U.S. 617 (1989) (holding lawyer could bring Sixth 

Amendment lawsuit on behalf of criminal defendant); Singleton, 428 U.S. 

106 (conferring standing on physicians on behalf of patients to challenge 

a statute that excluded funding for abortions from Medicaid benefits); 

Craig, 429 U.S. 190 (allowing vendor to challenge statute that prohibited 

males under age of twenty-one from buying beer); Mancuso v. Taft, 476 

F.2d 187 (1st Cir. 1973) (permitting candidate for public office to raise 

voters' rights). 

 15 
legal entitlement," third-party standing may be appropriate. 

United States Dep't of Labor v. Triplett, 494 U.S. 715, 720 

(1990); see also Munson, 467 U.S. at 954-58 (fundraiser 

had third-party standing to challenge statute limiting fees 

charitable organizations could pay because law infringed on 

organizations' right to hire fundraiser for a higher fee). 

The Supreme Court has found that the principles 

animating these prudential concerns are not subverted if 

the third party is hindered from asserting its own rights 

and shares an identity of interests with the plaintiff. See 

Craig, 429 U.S. at 193-94; Singleton, 428 U.S. at 114-15; 

Eisenstadt v. Baird, 405 U.S. 438, 443-46 (1972). More 

specifically, third-party standing requires the satisfaction of 

three preconditions: 1) the plaintiff must suffer injury; 2) 

the plaintiff and the third party must have a "close 

relationship"; and 3) the third party must face some 

obstacles that prevent it from pursuing its own claims. 

Campbell, 523 U.S. at 397; Powers, 499 U.S. at 411; The 

Pitt News, 215 F.3d at 362. It remains for courts to balance 

these factors to determine if third-party standing is 

warranted. Amato, 952 F.2d at 750. 

a. 

Although the Pennsylvania Psychiatric Society itself has 

not suffered direct injury, it is uncontested that it properly 

pleaded that defendants' policies and procedures have 

economically injured its member psychiatrists and 

undermined their ability to provide quality health care. 

Thus, while the Society does not itself stand in an

appropriate relationship to the patients' claims to directly 

assert them, its members may have third-party standing to 

do so.11 And because plaintiff seeks to establish standing on 

_________________________________________________________________ 

11. The District Court held--and the dissent argues--that the 

Pennsylvania Psychiatric Society could not raise these claims because it 

did not itself suffer injury. Injury to the Society, however, is not 

relevant 

to the issue of the psychiatrists' standing to bring the patients' claims. 

Because of the Society's posture, that is the initial question to be 

resolved. Only after it is determined that the member psychiatrists would 

have third-party standing over these claims do we assess whether the 

Society can bring its members' third-party claims. It is in the latter 

context that injury to appellant itself is a potential requirement, which 

we discuss below. 

 16 
the basis of its members' standing to bring these claims, 

the members are the appropriate focus of inquiry for these 

purposes. 

b. 

We next turn to whether the psychiatrists and their

patients have a sufficiently "close relationship" which will 

permit the physicians to effectively advance their patients' 

claims. To meet this standard, this relationship must 

permit the psychiatrists to operate " `fully, or very nearly, as 

effective a proponent' " of their patients' rights as the 

patients themselves.12 Powers , 499 U.S. at 413 (quoting 

Singleton, 428 U.S. at 115). 

The patients' relationships with their psychiatrists fulfills 

this requirement. See supra note 12. In Singleton v. Wulff, 

the Supreme Court granted physicians third-party standing 

on behalf of their patients to challenge a statute prohibiting 

Medicaid funding for certain abortions. 428 U.S. 106. 

Because of the inherent closeness of the doctor-patient 

relationship, the plurality found the physicians could 

efficaciously advocate their patients' interests. Id. at 117 

(noting "abortion decision is one in which the physician is 

intimately involved"). The relationship forged between 

psychiatrists and their patients is equally compelling. 

Psychiatrists clearly have the kind of relationship with 

their patients which lends itself to advancing claims on 

their behalf. This intimate relationship and the resulting 

mental health treatment ensures psychiatrists can 

effectively assert their patients' rights. Because the 

Pennsylvania Psychiatric Society alleges the MCOs prevent 

patients from receiving necessary mental health services 

and psychiatrists from providing them, its member 

psychiatrists would be well-suited to litigate these claims 

for both parties, as their interests are clearly aligned. See 

_________________________________________________________________ 

12. Courts have generally recognized physicians' authority to pursue the 

claims of their patients. Am. Coll. of Obstetricians & Gynecologists v. 

Thornburgh, 737 F.2d 283, 290 & n.6 (3d Cir. 1984) (collecting cases 

where physicians allowed to assert patients' claims); see also Planned 

Parenthood v. Farmer, 220 F.3d 127, 147 & n.10 (3d Cir. 2000). 

 17 
Amato, 952 F.2d at 751 (noting doctor-patient relationship 

provides strong likelihood of effective advocacy by a 

physician on behalf of his patients). Accordingly, we believe 

the psychiatrist-patient relationship would satisfy the 

second criterion for third-party standing.13 

c. 

Finally, we examine whether the mental health patients 

face obstacles to pursuing litigation themselves. This 

criterion does not require an absolute bar from suit, but 

"some hindrance to the third party's ability to protect his or 

her own interests," Powers, 499 U.S. at 411. In other 

words, a party need not face insurmountable hurdles to 

warrant third-party standing.14Id. at 415 (holding excluded 

juror's limited incentive to bring discrimination suit 

satisfied obstacle requirement for criminal defendant to 

merit third-party standing); Singleton, 428 U.S. at 117 

(recognizing lawsuit's invasion of patient's privacy and 

"imminent mootness" of pregnancy sufficiently impeded 

patient from bringing suit herself). The District Court found 

the patients' mental health problems did not significantly 

hinder them from suing. We disagree. 

The stigma associated with receiving mental health 

services presents a considerable deterrent to litigation. Cf. 

Parham v. J.R., 442 U.S. 584, 622 (1979) (Stewart, J., 

concurring) ("There can be no doubt that commitment to a 

mental institution results in massive curtailment of liberty. 

In addition to the physical confinement involved, a person's 

liberty is also substantially affected by the stigma attached 

to treatment in a mental hospital.") (quotations and 

_________________________________________________________________ 

13. The importance of the psychiatrist-patient relationship has been 

recognized in other settings too. In Jaffee v. Redmond, the Supreme 

Court upheld the evidentiary privilege for psychotherapist-patient 

communications. 518 U.S. 1, 10-15 (1996). 

14. One treatise insists that "cases do not demand an absolute 

impossibility of suit in order to fall within the[impediment] exception. 

At 

the other end of the spectrum, a practical disincentive to sue may 

suffice, although a mere disincentive is less persuasive than a concrete 

impediment." 15 James Wm. Moore et al., Moore's Federal Practice 

S 101.51[3][c]. 

 18 
citations omitted); Humphreys v. Drug Enforcement Admin., 

96 F.3d 658, 662 (3d Cir. 1996) (noting "psychiatric 

patients suffer a stigma in society") (quotation and citation 

omitted). For example, the Supreme Court recognized in 

Singleton that the obstacles confronted by women in

opposing an abortion statute were not overwhelming. In 

fact, the Court acknowledged the suit could have been 

brought pseudonymously or as a class. Singleton , 428 U.S. 

at 117. The Court still concluded that a woman's desire to 

protect her privacy could discourage her from bringing suit 

and constituted a sufficient impediment. Id. at 117-18. 

These concerns apply with equal, if not greater, force to 

mental health patients. See Bd. of Trustees of Univ. of Ala. 

v. Garrett, 531 U.S. 356, 375 (2001) ("There can be little 

doubt, then, that persons with mental or physical 

impairments are confronted with prejudice which can stem 

from indifference or insecurity as well as from malicious ill 

will.") (Kennedy, J., concurring). Besides the stigmatization 

that may blunt mental health patients' incentive to pursue 

litigation, their impaired condition may prevent them from 

being able to assert their claims. Therefore, we believe the 

patients' fear of stigmatization, coupled with their potential 

incapacity to pursue legal remedies, operates as a powerful 

deterrent to bringing suit. 

Because the third-party claims asserted by the 

Pennsylvania Psychiatric Society do not implicate any 

constitutional rights of the psychiatrists' patients, the 

MCOs contend that granting third-party standing is 

unwarranted. While successful third-party standing claims 

have involved alleged violations of third parties' 

constitutional rights, Singleton and its progeny have not 

stipulated that constitutional claims are a prerequisite.15 It 

is true that the rule against third-party standing"normally 

bars litigants from asserting the rights or legal interests of 

others in order to obtain relief from injury to themselves." 

_________________________________________________________________ 

15. Simply raising a third party's constitutional claims will not in and 

of 

itself satisfy the requirements for third-party standing. For instance, a 

litigant may not assert a third party's Fourth Amendment rights against 

unreasonable search and seizure to prevent the admission of damaging 

evidence. E.g., United States v. Payner , 447 U.S. 727 (1980); see also 

Monaghan, supra note 7, at 305 n.149. 

 19 
Warth, 422 U.S. at 509. Furthermore, the Supreme Court 

has noted that courts must consider "the relationship of the 

litigant to the person whose rights are being asserted; the 

ability of the person to advance his own rights; and the 

impact of the litigation on third-party interests." Caplin & 

Drysdale, 491 U.S. at 623 n.3. But the Court has not held 

that a constitutional claim must also be alleged, see, e.g., 

Powers, 499 U.S. at 410-11, and absent further guidance, 

we will not impose this requirement. For these reasons, we 

hold the Pennsylvania Psychiatric Society's member 

psychiatrists would have third-party standing to assert the 

claims of their patients. 

2. 

The Pennsylvania Psychiatric Society contends it has 

standing to bring these third-party claims just as it has 

standing to bring its members' other claims under the 

doctrine of associational standing. Defendants maintain the 

patients' claims are too attenuated from the Society to 

permit derivative standing. 

We decline to adopt a per se rule barring such derivative 

claims. The Supreme Court did not delineate in Hunt which 

types of claims associations could bring on behalf of their 

members, but rather simply held that "an association has 

standing to bring suit on behalf of its members" when the 

requisite elements are established. Hunt, 432 U.S. at 343. 

The limitations on derivative standing, therefore, are to 

be determined by applying the test for associational 

standing specified in Hunt. Our holding that the 

Pennsylvania Psychiatric Society has alleged facts sufficient 

to establish the third-party standing of its members to 

bring their patients' claims implies the satisfaction of only 

the first requirement of the Hunt test--that "its members 

would otherwise have standing" to bring these claims. A 

third-party claim must also meet the requirements that 

"the interests it seeks to protect are germane to the 

organization's purpose" and that "neither the claim asserted 

nor the relief requested requires the participation of 

individual members in the lawsuit." Id. These factors inform 

the analysis whether an association stands in the correct 

 20 
relationship to a claim to allow it to assert that claim on 

behalf of others. 

Other courts of appeals have adopted this approach in 

finding standing in similar cases. In Fraternal Order of 

Police v. United States, the Court of Appeals for the District 

of Columbia granted an organization derivative authority to 

assert the third-party claims of its members. 152 F.3d 998, 

1002 (D.C. Cir. 1998) ("[T]he presence of[the chief law 

enforcement officers] as members gives the Order standing 

to make these [third-party] claims as well.").16 The Fraternal 

Order of Police sued to contest the constitutionality of 

federal legislation that prohibited supplying firearms to 

police officers convicted of domestic violence. Id. at 1000- 

01. Because a chief law enforcement officer would be liable 

for supplying a firearm to a subordinate convicted of 

domestic violence and because the failure to supply a 

weapon could also violate the subordinate officer's rights, 

the court of appeals found the chiefs had third-party 

standing to advance the claims of their officers. Id. at 1002. 

Since the chiefs were members of the Fraternal Order of 

Police, the association had standing to advance the chiefs' 

claims as well as the claims of their subordinates. Similar 

to this case, none of the members were themselves party to 

the suit.17 

The Court of Appeals for the Sixth Circuit also granted an 

organization derivative authority to enjoin the enforcement 

of a statute requiring private schools to administer 

proficiency tests in Ohio Association of Independent Schools 

v. Goff. 92 F.3d 419, 421-22 (6th Cir. 1996). As parties to 

the litigation, the association's member schools had 

standing because failure to comply with the statute would 

_________________________________________________________________ 

16. The opinion containing the discussion of standing in Fraternal Order 

of Police was reversed on rehearing. Fraternal Order of Police v. United 

States, 173 F.3d 898 (D.C. Cir. 1999). In the second opinion, however, 

the court stated, "The analysis of standing on this issue is unchanged 

from our prior opinion." Id. at 903. 

17. Contrary to the dissent, we believe Fraternal Order of Police supports 

recognition of the combination of associational standing and third-party 

standing, since the standing "bridge" in that case--the chief law 

enforcement officers--were not parties to the litigation. 

 21 
result in the loss of their school charters. Id. at 422. The 

private schools also had third-party standing to assert the 

constitutional right of their students' parents to direct their 

children's education. Because its member schools could be 

injured by the statute, the Ohio Association of Independent 

Schools also had standing to assert their claims. Since its 

member schools had standing to assert the rights of the 

parents, the court held the Ohio Association of Independent 

Schools also had standing to sue on behalf of the parents 

whose children attended its members' schools. Id. ("The 

member schools . . . have standing . . . on behalf of parents 

of students who are threatened with the nonreceipt of 

diplomas. Consequently, the OAIS itself, as an organization 

dedicated exclusively to advancing the interests of the 

member schools, has associational standing to challenge 

the statutes at issue."). Thus, while some member schools 

--the intermediate parties--were parties to the dispute, the 

Sixth Circuit's standing analysis did not rely on that fact. 

We see a compelling analogy between these cases and the 

claims before us, and believe the Pennsylvania Psychiatric 

Society may have standing to assert its members' thirdparty claims. 

The District Court found the Pennsylvania Psychiatric 

Society lacked derivative authority to pursue the claims of 

its members' patients because it had not suffered direct 

injury itself. On this point, defendants contend Goff is inapt 

because the Court of Appeals for the Sixth Circuit did not 

require that the association suffer injury in fact. See Amato, 

952 F.2d at 749. This criticism is misplaced. It is generally 

true that third-party standing requires the party who 

advances the interests of another party to also suffer 

discrete injury. As noted previously, this prudential 

requirement sharpens presentation of claims and avoids 

litigation of general grievances. But when an association, 

which has not sustained direct injury, obtains standing to 

pursue the claims of its members, the association may rely 

on the injuries sustained by its members to satisfy the 

injury-in-fact requirement. Consequently, once an 

organization's members establish third-party standing, the 

prudential concerns are alleviated if the association also 

has authority to assert its members' claims. 

 22 
It is a well-recognized anomaly of representational

standing that the individuals who have sustained the 

requisite injury to satisfy the constitutional and prudential 

standing criteria are not in fact responsible for bringing 

suit. So long as the association's members have or will 

suffer sufficient injury to merit standing and their members 

possess standing to represent the interests of third-parties, 

then associations can advance the third-party claims of 

their members without suffering injuries themselves. 18 If on 

remand the Pennsylvania Psychiatric Society warrants 

associational standing to represent its members, we

conclude it also may have derivative authority to raise the 

claims of its members' patients.19 

IV. 

We now consider the arbitration provision in the Provider 

Agreement between the MCOs and the psychiatrists. 20 The 

_________________________________________________________________ 

18. In Public Citizen v. FTC, the Court of Appeals for the District of 

Columbia held Public Citizen and other organizations had standing to 

challenge an FTC regulation exempting certain promotional items from a 

statutory requirement that all advertisements for smokeless tobacco 

products carry certain health warnings. 869 F.2d 1541 (D.C. Cir. 1989). 

The court held the organizations had associational standing to assert the 

claims of their members. Id. at 1550. Additionally, the court held that 

members who were also parents had standing to advance claims for their 

children. The organizations thus had the derivative authority to assert 

the claims of their members' children as well. Id. 

19. Because the District Court held the Pennsylvania Psychiatric Society 

did not have standing to assert the claims of its members' patients, it 

found the organization itself did not fall within the "zone of interests" 

of 

the common law fraud or statutory fraud claims asserted on behalf of 

the psychiatrists' patients. Because we reverse and remand the District 

Court's judgment on associational and third-party standing, it will have 

to reconsider this issue. 

20. The Provider Agreement provides in part: 

 Section 10.1 Resolution of Disputes. In the event that a dispute 

 between Green Spring and Provider arises out of or is related to 

this 

 Agreement, the parties to the dispute agree to negotiate in good 

faith 

 to attempt to resolve the dispute. In the event the dispute is not 

 resolved within 30 days of the date one party sent written notice 

of 

 23 
Pennsylvania Psychiatric Society argues that the District 

Court erred in holding all its claims were subject to 

mandatory arbitration. The Society contends the arbitration 

provision should not apply to its member psychiatrists for 

several reasons: (1) the arbitration provision is an 

unconscionable contract of adhesion; (2) the organization's 

broad-based claims are beyond the scope of the arbitration 

provision; (3) claims regarding the process of determining 

medical necessity fall outside the purview of arbitration and 

pursuing these claims through the available internal review 

procedures would be futile; and (4) the psychiatrists with 

initial credentialing or re-credentialing claims do not have 

contracts with the MCOs requiring arbitration.21 

_________________________________________________________________ 

 the dispute to the other party, and if any party wishes to pursue 

the 

 dispute, it shall be submitted to binding arbitration in accordance 

 with the rules of the American Arbitration Association . . . . If 

the 

 dispute pertains to a matter which is generally administered in 

 accordance with Green Spring's procedures involving, for example, 

 credentialing or quality assurance, the procedures set forth by 

 Green Spring must be fully exhausted by Provider before Provider 

 may invoke its right to arbitration under this Section. Provider 

 acknowledges that the recommendation and determination of 

 whether Health Services are Medically Necessary shall be made in 

 accordance with Green Spring's policies and procedures and shall 

 not be subject to this Section 10. 

The Provider Agreement defines Medically Necessary Health Services as: 

 Health Services including professional services and supplies 

 rendered by a Provider to identify or treat an illness that has 

been 

 diagnosed or is suspected, and which are: (a) consistent with (i) 

the 

 efficient diagnosis and treatment of a condition; and (ii) 

standards of 

 good medical practice; (b) required for other than convenience; (c) 

 the most appropriate supply or level of service; (d) unable to be 

 provided in a more cost-effective and efficient manner; and (e) 

 unable to be provided at a facility providing a less intensive 

level of 

 care. When applied to inpatient care, the term means: The needed 

 care cannot be safely given on other than an inpatient basis. 

21. The District Court believed that these claims had all been settled, 

but 

the Pennsylvania Psychiatric Society maintains in its brief that these 

claims have not been addressed completely. Keystone also argues the 

association should be prohibited from asserting claims on behalf of 
psychiatrists that Green Spring Health Services has never credentialed 

 24 
Because it denied the Society associational and thirdparty standing to advance the claims of its members' 

patients, the District Court did not did not examine 

whether the patients' claims would be subject to mandatory 

arbitration. The District Court only reviewed the effect of 

the arbitration provision on the credentialed psychiatrists 

who are Society members. It strikes us that, assuming the 

Society has standing to assert the claims of each party, the 

District Court will have to re-examine the scope as well as 

the effect of the arbitration provision on all the parties 

involved. Because we find the Pennsylvania Psychiatric 

Society survives a motion to dismiss for lack of standing, 

the District Court must sort through, in the first instance, 

the impact of the psychiatrists' arbitration clause on the 

alleged claims. 

V. 

We will reverse and remand the dismissal of the 

Pennsylvania Psychiatric Society's complaint for lack of 

standing. Depending on the level of individual participation 

necessary to demonstrate its claims, the Society may have 

standing to press the claims of its member psychiatrists 

and their patients. Of course, we express no opinion as to 

the merits of any of the claims or defenses. 

We will reverse the order of the District Court and

remand for proceedings consistent with this opinion. 

_________________________________________________________________ 

because their claims are not present in the Pennsylvania Psychiatric 

Society's Amended Complaint. See Pa. ex. rel. Zimmerman v. PepsiCo, 

Inc., 836 F.2d 173, 181 (3d Cir. 1988). In addition, defendants contend 

that the Pennsylvania Psychiatric Society has not asserted a single claim 

in its complaint on behalf of psychiatrists who have been denied 

credentialing by defendants. However, several of the allegations in the 

organization's amended complaint could arguably be read as asserting 

claims on behalf of this class of psychiatrists. Although the Amended 

Complaint is somewhat ambiguous, all these claims may be found woven 

throughout the allegations. 

 25 
NYGAARD, Circuit Judge, dissenting: 

I agree with much of what the majority has said. I part 

company, however, with its conclusion that grants PPS a 

hybrid-type of third-party derivative standing. PPS argues 

that it has standing to litigate, not the interests of its 

member-psychiatrists, but rather the issues and interests 

of its member-psychiatrists' patients -- who are three steps 

removed from PPS. PPS's argument has three premises. Its 

first two premises are exceptions to the standing rule: 1) 

that PPS has associational standing to litigate on behalf of 

its member-psychiatrists; and, 2) that its memberpsychiatrists have third-party standing to litigate on behalf 

of their patients. Its third premise is that these exceptions 

can be "stacked" to concoct a new exception to the standing 

rule. PPS thus concludes that it should have standing to 

litigate on behalf if its members' patients. 

The first two premises are sound, but I disagree with the 

majority on the third. PPS cannot piggy-back two discrete 

exceptions, to swallow up the long-standing rule that 

litigants must assert their own rights and interests. I 

cannot find, nor does PPS cite, any authority for stacking or 

piggy-backing these relationships into an attenuated 

concatenation of exceptions to the standing rule so as to 

confer standing on PPS. I would hold that PPS cannot seek 

relief based upon the rights and interests of remote third 

parties. I must therefore respectfully dissent on this point. 

Central to my conclusion is that PPS's third premise runs 

afoul of Amato v. Wilentz, 952 F.2d 742 (3d Cir. 1991), 

wherein we discussed the objectives and standards for 

third-party standing. Although third-party standing

typically proves to be a nebulous prudential doctrine, 

sensitive to the particularities and peculiarities of the 

relationship between the parties and their claims, we 

distilled a basic test for third-party standing in Amato. Id. 

at 748-49. We require that the party seeking standing must 

first have suffered an injury in fact. If the party seeking 

standing has suffered an injury in fact, the court must then 

examine further, considering: a) the intimacy of the 

relationship between the parties; b) any impediment the 

party might have to advancing its own rights; and c) the 

identity of the interests between the parties. Id. at 749. 

 26 
Applying the Amato standards, the District Court first 

found that PPS did not itself suffer an injury. No one 

disputes this fact. I agree with the District Court that 

because PPS has not even alleged a concrete injury to itself, 

it cannot satisfy Amato's most elementary standard.

Standing should be denied to PPS on this test alone. 

The District Court, however, continued and found that 

even if PPS had alleged an injury in fact to itself, Amato's 

subsequent elements, or balancing tests, would not favor 

PPS third-party standing for its members' patients. The 

District Court found that the "relationship between PPS and 

the patient subscribers is so attenuated as to weigh against 

PPS to bring suit on behalf of persons with which it has no 

direct relationship." The District Court next found that 

"there appears to be no impediment to the patients seeking 

to enforce their legal claims themselves" and the patients 

face "no affirmative obstacle to sue[ ]." I agree with the 

District Court that even had PPS shown an injury-in-fact, 

the subsequent balancing test would not confer standing on 

PPS. The argument that psychiatric patients may face some 

impediment to bringing these claims themselves, because of 

the stigma attached to mental illness and psychiatric care, 

is mere speculation, and moreover, this factor is 

counterbalanced by the remoteness of the relationship 

between PPS and its members' patients. The relationship 

between PPS and the patients is nothing like the 

doctor/patient intimacy that supports that exception to the 

standing rule. 

Thus the District Court held that PPS should be denied 

third-party standing for its member' patients for three 

distinct reasons: 1) PPS suffered no injury in fact and 

therefore the Court did not need to entertain the secondary 

balancing factors set forth in Amato; 2) even if PPS did 

merit consideration under the balancing test, the balancing 

test would not weigh in favor of granting standing since 

PPS's relationship with its members' patients is too 

attenuated; and 3) the patients have no substantial

obstacle to bringing their claims independently. I agree with 

all three reasons, and with the District Court's conclusion. 

PPS argues to us that the District Court "ignored 

significant case law recognizing derivative third-party 

 27 
standing." Nonsense. None of the cases PPS cites are 

directly on point. PPS and its amici cite cases that confer 

standing to doctors to litigate on behalf of their patients. 

But this does nothing to advance PPS' argument on the 

"stacking" issue presented here. PPS cites both American 

College of Obstetricans v. Thornburgh, 737 F.2d 283 (3d Cir. 

1983) and Ohio Association of Independent Schools v. Goff, 

92 F.3d 419 (6th Cir. 1996), to support the notion that "an 

association may assert third-party claims that could be 

brought by its members." Neither of these cases stand for 

such a notion. 

In Ohio Association, the association, along with several of 

its member schools, sought standing for parents of children 

in the schools to challenge the requirement of state 

formulated testing in private schools. Ohio Association, 92 

F.3d at 421. The Court found that the "OAIS member 

schools also have standing to assert the constitutional right 

of parents to direct their children's education." Id. at 422 

(emphasis added). Thus the Court did not find that the 

association had standing to assert parents' interests, but 

that individual schools had standing to do so. Thus the 

operative distinction between Ohio Association and PPS' 

argument is that in Ohio Association both the association 

and its individual members jointly brought the suit, but 

here, PPS attempts to bring its claims to court without the 

participation of any of its members. 

American College presents the same problems for PPS. In 

American College, the challenge was brought by a team of 

an association, doctors, and medical providers. American 

College, 737 F.2d at 289. In a footnote the Court stated 

that the "district court concluded that plaintiff physicians, 

ACOG, and medical providers all had standing to raise their 

own interests (or the interests of members) and those of 

patients and customers in challenging the Act's 

constitutionality. We affirm this general conclusion." Id. at 

290 n.6. As in Ohio Association, the standing questions in 

American College turned on the doctors actually 

participating in the suit. The reason is obvious: The doctors 

provide the standing "bridge" between the association and 

the patients. All of the support cited in American College 

demonstrates the need for physicians to participate in the 

 28 
suit to establish standing. Id. (citing City of Akron v. Akron 

Ctr. for Reprod. Health, 462 U.S. 416 (1983) (challenge by 

abortion clinics and a physician); Planned Parenthood Ass'n 

v. Ashcroft, 462 U.S. 476 (1983) (challenge by Planned 

Parenthood, two physicians and an abortion clinic); Planned 

Parenthood v. Danforth, 428 U.S. 52, 62 (1976) (challenge 

by Planned Parenthood and two physicians); Singleton v. 

Wulff, 428 U.S. 106 (1976) (challenge by two physicians)). 

Other cases demonstrate this need for a caretaker, such 

as a parent or advising officer, to be a party to the suit to 

provide the bridge between the association and the harmed 

individual. See Fraternal Order of Police v. United States, 

152 F.3d 998 (D.C. Cir. 1998) (granting standing for an 

organization whose members included chief law 

enforcement officers based on the chief law enforcement 

officer's standing to advance the equal-protection rights of 

subordinate officers); Public Citizen v. FTC, 869 F.2d 1541 

(D.C. Cir. 1989) (organizations had standing to challenge an 

FTC regulation that exempted certain promotional items 

from the requirement that advertising for smokeless

tobacco products carry health warnings, since the members 

of the organizations included parents of children who might 

be injured by the lack of warnings). 

In summary, I agree with the manner in which the 

District Court applied the Amato standard. I am convinced 

that PPS has neither successfully met (nor 

circumnavigated, as the case may be) Amato's requirement 

that PPS must have itself suffered an injury. Hence I 

respectfully dissent and would affirm the District Court. 

A True Copy: 

Teste: 

 Clerk of the United States Court of Appeals 

 for the Third Circuit 

 29