Court Opinion

ID: 3170343
Source: CourtListenerOpinion
Date Created: 2016-01-19 16:01:02.443812+00
Date Added: 2024-06-11T12:16:36.945996
License: Public Domain

United States Court of Appeals
         FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 22, 2015          Decided January 19, 2016

                       No. 14-5042

   DOUGLAS B. HURON AND UNITED STATES SOCIETY FOR
   AUGMENTATIVE AND ALTERNATIVE COMMUNICATION,
                    APPELLANTS

                             v.

  BETH F. COBERT, IN HER OFFICIAL CAPACITY AS ACTING
 DIRECTOR OF THE UNITED STATES OFFICE OF PERSONNEL
 MANAGEMENT AND OFFICE OF PERSONNEL MANAGEMENT,
                      APPELLEES

        Appeal from the United States District Court
                for the District of Columbia
                    (No. 1:13-cv-00211)

    Eric S. Fleming, Student Counsel, argued the cause for
Appellants. On the briefs were Tillman J. Breckenridge, Tara
A. Brennan, Lewis A. Golinker, and Patricia E. Roberts.

    Douglas Hallward-Driemeier, Joy J. Lui, James R.
Myers, Emerson A. Siegle, Joshua E. Goldstein, and Gregory
R. Nevins were on the brief for amicus curiae Lambda Legal
Defense and Education Fund, Inc., in support of Appellants.
Jennifer C. Pizer entered an appearance.
                               2
     Peter C. Pfaffenroth, Assistant U.S. Attorney, argued the
cause for Appellees. On the brief were Ronald C. Machen
Jr., U.S. Attorney at the time the brief was filed, and R. Craig
Lawrence and Jeremy S. Simon, Assistant U.S. Attorneys.

    Before: HENDERSON, MILLETT, and WILKINS, Circuit
Judges.

    Opinion for the Court filed by Circuit Judge MILLETT.

     MILLETT, Circuit Judge: Speech-generating devices
assist individuals with severe communication impairments by
“speaking” typed messages out loud. Appellants Douglas B.
Huron and the United States Society for Augmentative and
Alternative Communication (the “Society”) filed this action
against the Office of Personnel Management (“OPM”) and its
Director challenging the agency’s approval of health benefits
plans for federal employees that exclude or limit insurance
coverage of speech-generating devices.

    Because Huron and the Society forfeited twice over the
claims on which they predicate standing, we affirm the district
court’s dismissal of the complaint for lack of jurisdiction.

                               I

                   Statutory Background

    In 1959, Congress enacted the Federal Employee Health
Benefits Act (“Act”), Pub. L. No. 86-382, 73 Stat. 708
(codified as amended at 5 U.S.C. §§ 8901–8914), to provide a
subsidized health benefits program for federal employees.
Under the Act, OPM is charged with administering the
Federal Employee Health Benefits Program (“Federal
Program”) and “may contract for or approve” health benefits
plans offered to federal employees by private insurance
                               3
carriers for renewable one-year terms. 5 U.S.C. §§ 8903–
8903a.

     Each health benefits plan contract must “contain a
detailed statement of benefits offered and shall include such
maximums, limitations, exclusions, and other definitions of
benefits as [OPM] considers necessary or desirable.” 5
U.S.C. § 8902(d). Plan rates must “reasonably and equitably
reflect the cost of the benefits provided” and should be set in a
manner “consistent with the lowest schedule of basic rates
generally charged for new group health benefit plans issued to
large employers.” Id. § 8902(i). OPM may renegotiate rates
each year “based on past experience and benefit adjustments,”
but any rate adjustments must be consistent with insurance
industry practice. Id. During a four-week “open season” each
year, employees may transfer plans or cancel their enrollment
in the Federal Program. Id. § 8905(g); 5 C.F.R. § 890.301(f)
(2013).

              Factual and Procedural History

     In reviewing the district court’s dismissal of the
complaint, we accept as true Huron’s and the Society’s well-
pleaded factual allegations, and grant them the benefit of all
inferences that can reasonably be drawn from those facts.
See, e.g., Arpaio v. Obama, 797 F.3d 11, 19 (D.C. Cir. 2015).
The Society is “a membership organization dedicated to
supporting the needs and desires of people who use
augmentative and alternative communication.” Appellants’
Br. ii.     Its members include individuals with severe
communication impairments and their family members,
speech-language pathologists, educators, and manufacturers
of augmentative and alternative communication devices,
including speech-generating devices. The Society aims to
influence public policy by “advocating for the broadest scope
                                4
of coverage for speech-generating devices by all funding
programs and sources.” Id.

     Huron, an attorney and resident of the District of
Columbia, is a member of the Society. He relies on a speech-
generating device known as a “DynaWrite” to communicate
orally with his family, friends, colleagues, and clients. The
DynaWrite resembles a small laptop, and when Huron types a
phrase or sentence on its keyboard and presses a button, the
device “speaks” aloud what he has entered.

     After several years, Huron’s DynaWrite stopped
functioning, leaving him in need of a replacement device.
Huron had obtained his original DynaWrite, which ordinarily
costs approximately $5,000, through an insurance plan
offered by a private sector employer. In 2009, Huron chose to
switch to his wife’s insurance policy, a Federal Program plan
sponsored by the Government Employees Health Association
(“GEHA”). Huron made that decision even though the
GEHA plan expressly excluded speech-generating devices
from coverage. Huron also receives benefits from Medicare,
which will reimburse him for 80% of the cost of the new
speech-generating device.

    Although Huron’s GEHA plan does not cover speech-
generating devices, several other Federal Program plans do, to
varying degrees. Since 2008, OPM has encouraged, but not
required, plan sponsors to cover speech-generating devices as
durable medical equipment in the plans offered to federal
employees. More specifically, in its 2008 “call letter,” OPM
asked plan sponsors to indicate the extent to which they
would offer such coverage going forward. 1 In its 2010 call

1
  OPM distributes an annual “call letter” to plan sponsors in which
it solicits benefit and rate proposals for the coming year. The
letters identify OPM’s “key initiatives” and encourage, but do not
                                5
letter, OPM “again encourag[ed] plans to consider proposals
for enhanced coverage for durable medical equipment,
including * * * speech generating devices, * * * and to
increase the dollar amounts for these benefits.” J.A. 42.

     In response, several nationwide and local plan sponsors
in the Federal Program began covering speech-generating
devices, though not always to the same extent as other durable
medical equipment. Huron and the Society allege that,
outside of the Federal Program, all other federal government-
sponsored health benefits programs, including state Medicaid
programs, Medicare, Tricare, and the Veteran’s
Administration, offer some coverage for speech-generating
devices when medically necessary. They further allege that
private-sector plans—including those from a majority of
insurers that also participate in the Federal Program—
routinely cover the devices to the same extent as other durable
medical equipment.

     In February 2013, Huron and the Society filed a one-
count complaint against OPM and its Director in the United
States District Court for the District of Columbia. They
alleged that OPM had “not negotiated with [Federal Program]
plan sponsors over [speech-generating device] coverage,”
Complaint 18, in violation of its obligations under the Act,
and that those “acts and omissions regarding [speech-
generating device] coverage,” id. at 22, were arbitrary,
capricious, an abuse of discretion and contrary to law, in
violation of the Administrative Procedure Act, 5 U.S.C.
§ 706. 2 The complaint requested declaratory and injunctive

require, providers to include in their proposals coverage for those
identified items.
2
  Specifically, the complaint alleged that OPM and its Director
failed to: (i) conduct a complete factual investigation of coverage
                                6
relief, including an order that OPM “direct all [Federal
Program] sponsors to cover [speech-generating devices] to the
same extent and scope as other covered [durable medical
equipment], unless they produce a factual or actuarial
justification to support lesser coverage[.]” Complaint 3.

     OPM and its Director moved to dismiss the complaint
under Federal Rule of Civil Procedure 12(b)(1) for lack of
jurisdiction, and under Rule 12(b)(6) for failure to state a
claim. The district court dismissed the complaint for lack of
jurisdiction. The court found that Huron had suffered an
injury-in-fact when he was unable to obtain a replacement
device through his GEHA plan. But the court held that Huron
lacked standing because he failed to establish that his injury
either (i) was caused by conduct attributable to OPM, since
Huron could have selected another plan that would cover a
new device, or (ii) was likely to be redressed, because a
favorable ruling from the court would not result in GEHA
covering his speech-generating device. The district court also
concluded that, because the Society’s associational standing is
wholly dependent on Huron’s, the Society lacked standing as
well.

for speech-generating devices; (ii) negotiate with plan sponsors
over coverage of speech-generating devices; (iii) require plan
sponsors to justify exclusions and limitations pertaining to the
coverage of speech-generating devices; (iv) ensure that federal
employees have the same access to speech-generating devices as
private-sector employees do; (v) ensure that federal employees
receive the best coverage at the lowest cost; and (vi) ensure that
plan coverage is consistent with changes in medical knowledge or
standards of practice.
                               7
                               II

                           Analysis

     We review the district court’s dismissal of a case for lack
of standing de novo. See Information Handling Servs., Inc. v.
Defense Automated Printing Servs., 338 F.3d 1024, 1029
(D.C. Cir. 2003). In evaluating standing at this early stage of
the litigation, we assume that the complaint states a valid
legal claim. Id.

     To establish standing, Huron and the Society must
demonstrate that (1) they suffered an “injury-in-fact” that is
“concrete and particularized” and “actual or imminent, not
conjectural or hypothetical”; (2) the injury is “fairly traceable
to the challenged action of the defendant, and not the result of
the independent action of some third party”; and (3) it is
“likely, as opposed to merely speculative, that the injury will
be redressed by a favorable decision.” Lujan v. Defenders of
Wildlife, 504 U.S. 555, 560–561 (1992) (alterations, citations,
and internal quotation marks omitted). Huron and the Society
bear the burden of establishing each of those elements of
standing. Id. Because the parties agree that the Society’s
claim to associational standing is entirely derivative of
Huron’s individual injury, see Hunt v. Washington State
Apple Advertising Comm’n, 432 U.S. 333, 342–343 (1977),
we focus on Huron’s alleged standing.

     Before the district court, Huron repeatedly alleged that
his injury-in-fact was the financial harm he suffered because
he was unable to obtain satisfactory coverage for a
replacement speech-generating device through his Federal
Program plan. See Plaintiffs’ Mem. of Law in Opposition to
Defendants’ Motion to Dismiss the Complaint (“Pl. Opp.”),
Huron v. Berry, No. 1:13-cv-00211-ABJ (D.D.C. filed July
31, 2013), ECF No. 15, at 19 (“[Huron] therefore cannot
                                 8
obtain a[] [speech-generating device] though his [Federal
Program] plan,” which caused him “injury in fact.”); id.
(purchasing a new device out-of-pocket “would have required
Mr. Huron to incur monetary costs, which is obviously a form
of injury-in-fact”); id. at 20 (borrowing a device “was the best
available option for him to deal with an injury in fact he had
already suffered—GEHA’s non-coverage”); id. (“Thus, non-
coverage of the [speech-generating device] has impacted Mr.
Huron in a ‘personal and individual way.’”) (quoting
Defenders of Wildlife, 504 U.S. at 560 n.1); id. at 22 (“OPM’s
approvals and determinations currently in force cause him
monetary injury in fact * * *.”). The district court therefore
conducted its analysis of Huron’s standing based upon that
asserted injury-in-fact. 3

     On appeal, however, Huron has advanced an entirely
different theory of injury and standing not previously
presented, and has expressly abandoned any argument that he
suffered a traditional financial injury-in-fact. See Oral Arg.
Tr. 7–8 (Q: “You’re not asserting non-procedural traditional
Article III injury anymore?” A: “That’s correct, Your
Honor.” * * * Q: “You’ve completely abandoned that as the
theory for jurisdiction?” A: “I believe that we have. Yes,
Your Honor.”).       Huron, indeed, makes no meaningful
challenge to the district court’s findings of both a lack of
causation and redressability for the previously asserted
financial injury.

    Instead, Huron recasts his injury-in-fact as a procedural
one caused by OPM’s alleged failure to negotiate vigorously

3
  DynaVox Mayer-Johnson, the manufacturer of the DynaWrite,
agreed to lend Huron a replacement speech-generating device
pending the resolution of this case. Huron must return the device at
the close of litigation.
                                9
enough to obtain his desired level of coverage for speech-
generating devices by all Federal Program insurers.

     A procedural injury occurs when a governmental action
is undertaken without following a required procedure, and
that procedure both is “designed to protect some threatened
concrete interest” of the plaintiff and, if not followed, “will
cause a distinct risk to a particularized interest of the
plaintiff.” Florida Audubon Soc’y v. Bentsen, 94 F.3d 658,
664 (D.C. Cir. 2014) (en banc). Under Huron’s new
approach, he claims to have “suffered both procedural and
particularized injuries when OPM approved his health
benefits plan without abiding by the statutorily required
procedure” that the agency negotiate for plans comparable to
private sector plans with respect to their coverage of speech-
generating devices. Appellants’ Br. 25. That failure
purportedly “tainted the plan selection process from the
outset, and forced Huron to make a ‘coerced choice’ from a
number of statutorily inadequate options.” Id. at 31.

     Huron’s decision to roll out an entirely new argument for
standing for the first time on appeal, coupled with his failure
to challenge the district court’s ruling that he lacked
traditional injury-in-fact standing, dooms his case. “It is well
settled that issues and legal theories not asserted at the District
Court level ordinarily will not be heard on appeal.” District
of Columbia v. Air Florida, Inc., 750 F.2d 1077, 1084 (D.C.
Cir. 1984); see also Singleton v. Wulff, 428 U.S. 106, 120
(1976) (“It is the general rule * * * that a federal appellate
court does not consider an issue not passed upon below.”).
That rule applies to standing, as much as to merits, arguments,
because it is not the province of an appellate court to
“hypothesize or speculate about the existence of an injury
[Plaintiff] did not assert” to the district court. Kawa
                                 10
Orthodontics, LLP v. Secretary, U.S. Dep’t of the Treasury,
773 F.3d 243, 246 (11th Cir. 2014). 4

     Any arguments Huron or the Society might have made
for “traditional” standing, and might have made in response to
the causation and redressability failings identified by the
district court, are entirely missing from their briefs and were
expressly abandoned at oral argument. Accordingly, that
claim to standing is likewise forfeited. Oral Arg. Tr. 7–8; see
also Williams v. Romarm, SA, 756 F.3d 777, 782–783 (D.C.
Cir. 2014) (questions not presented and argued in briefs are
forfeited).

     To be sure, this court has the discretion, in “exceptional
circumstances, where injustice might otherwise result,” to
“consider questions of law that were neither raised below nor
passed upon by the District Court.” Air Florida, Inc., 750
F.2d at 1085. But Huron makes no argument that this case
presents such an exceptional circumstance, and we find no
reason to conclude that it does either.

    Huron and the Society do not deny those rules of
procedure exist.  Instead, they insist that they have
4
  See also, e.g., Pluet v. Frasier, 355 F.3d 381, 384–385 & n.2 (5th
Cir. 2004) (refusing to “disturb the district court’s judgment” based
on plaintiff’s new standing argument because it was “an entirely
new legal theory raised for the first time on appeal and is
accordingly waived”); In re Hen House Interstate, Inc., 177 F.3d
719, 724 (7th Cir. 1999) (declining to consider alternative statutory
basis for standing raised for the first time on appeal); Common
Cause of Pennsylvania v. Pennsylvania¸ 558 F.3d 249, 263 (3d Cir.
2009) (“A litigant generally cannot create standing through new
allegations asserted on appeal.”). Cf. Adarand Constructors, Inc. v.
Mineta, 534 U.S. 103, 109–110 (2001) (declining to consider
plaintiff’s belated arguments and evidence regarding standing that
had “never been presented to any lower court”).
                              11
“consistently” argued procedural standing, Appellants’ Br. 39,
and that the district court simply “disregarded [Huron’s]
procedural injury,” id. at 13; see also id. at 25 (“The district
court, however, failed to recognize that Huron also suffered a
procedural injury.”); id. at 37 (“The district court did not
examine redressability under the lens of a procedural standing
analysis, so its justifications for dismissing Huron’s
Complaint for lack of redressability are misplaced.”).

     That argument is inaccurate and unfair to the district
court. Huron and the Society never identified a procedural
injury or raised procedural standing before the district court,
and instead argued vigorously for “traditional” standing until
their briefing on appeal. In fact, Huron and the Society
explicitly disavowed any argument for procedural standing in
their opposition to dismissal in district court, contending that
allegations in the complaint of statutory shortcomings by the
agency “simply summarize how OPM’s substantive
determinations may be explained in a procedural context and
are not intended as stand-alone remediable allegations of
statutory violations.” Pl. Opp. 13 n.9 (emphasis added).

                              III

                         Conclusion

    Huron’s and the Society’s appellate about-face on the
nature of Huron’s claimed injury leaves them no viable basis
on which to establish standing. We accordingly affirm the
judgment of the district court.

                                                    So ordered.