A cause of action, anyone? Federal equity and the preemption of state law.

• Author: Monaghan, Henry Paul
• Position: Special Issue on the Federal Courts

I was not fortunate enough to have known Dan Meltzer well. I met Danny only a few times. We had only the thinnest of correspondence. Of his sterling reputation as a human being, I am of course fully aware. And I do know his work--all of it--thoroughly. On that point, a mountain of encomiums would iterate only a simple thought: Dan was the gold standard in federal courts scholarship. (1) It is, therefore, a special honor to participate in a symposium to honor his memory.

In this very brief Essay, I focus on aspects of a topic on which both Danny and I have written and on which our reasoning differed: federal court authority, "sitting in equity," to enjoin enforcement of state law on federal preemption grounds. In a coercive action brought by the state to enforce the state law, the federal act could of course be set up as a defense. Suppose, however, that alleging "arising under" subject-matter jurisdiction, (2) the plaintiff sues the appropriate state officials to restrain enforcement of the state statute. Many such challenges are readily entertained on the merits, often because these challenges have a firm statutory basis such as 42 U.S.C. [section] 1983. (3) But not all do. The Court has, however, asserted a more general, freestanding equitable injunctive authority: "[A]s we have long recognized, if an individual claims federal law immunizes him from state regulation, the court may issue an injunction upon finding the state regulatory actions pre empted." (4) Yet, not all such non-statutorily based challenges succeed. In Armstrong v. Exceptional Child Center, Inc., (5) for example, the source of the preceding quotation, a divided Court just last term refused to entertain such a challenge by participants in a federal funding program (healthcare providers) seeking more favorable state-set Medicaid rates for their services. That result may or may not be sound, but to my mind what is most interesting is the intriguing nature of the various opinions, particularly given the Court's unanimous opinion one term earlier in Lexmark International, Inc. v. Static Control Components, Inc. (6) Lexmark's mode of analysis, if it takes firm root, should significantly reshape long-embedded modes of thinking about standing, at least at the statutory level. These two decisions and their intersection are the focus of this brief Essay.

1. OLD BASICS

   For many decades law students have been taught that before a district court may address the merits of a private litigant's substantive claims, Article III requires that the plaintiff satisfy a three-part, trans-substantive set of "constitutional standing" requirements--injury-in-fact, causation, and redressability (7)--as well as three additional "prudential" justiciability barriers. (8) The source of judicial authority to fashion this discretionary overlay has never been made clear, (9) but its content generally included a ban on the assertion of both generalized grievances and third-party claims, (10) as well as a demand that the plaintiff s injury fall "within the zone of interests protected by the law invoked." (11)

   Allen v. Wright (12) is the casebook poster child for this body of doctrine. It is a leading case in virtually every casebook that has a section on standing. (13) But Association of Data Processing Service Organizations v. Camp, (14) decided in 1970, not Allen v. Wright, arguably is the doctrinal high-water mark. That decision, however, appears much later in the casebook standing sections. (15) And there is a puzzle about what it illustrates: statutory limits on article standing; prudential standing; the invention of the zone-of-interest standing limitations; the APA? Long familiarity with the decision has obscured its intellectual importance.

   In Data Processing, the Court said that standing is a matter distinct from and anterior to the plaintiff s merits claim:

   The "legal interest" test goes to the merits. The question of standing is different. It concerns, apart from the "case" or "controversy" test, the question whether the interest sought to be protected by the complainant is arguably within the zone of interests to be protected or regulated by the statute or constitutional guarantee in question. Thus the Administrative Procedure Act grants standing to a person "aggrieved by agency action within the meaning of a relevant statute." (16) What is perhaps insufficiently remembered now is that the Data Processing formulation constituted a sharp break from previous cases, in which the Court frequently (but not always (17)) rejected any sharp distinction between standing and the claim on the merits, especially in the statutory context. That is, the earlier formulation, the "legal interest" test, asked whether this plaintiff had stated a cause of action. (18) As a leading administrative law casebook puts it: "Standing is a modern jurisprudential concept. For most of our legal history, litigation occurred principally within a private-rights model, in which who could seek relief was not recognized as distinct from whether the complaint stated a cause of action." (19)

   The private-rights model included litigants asserting interests protected by the common law and those secured by statute. (20) In theory, therefore, unless the plaintiff's claim was too insubstantial to confer subject-matter jurisdiction, (21) dismissal should be for failure to state a claim, not for want of subject-matter jurisdiction.

   Data Processing has always struck me as a laconic, casually tossed off opinion. But it has stood for decades as a systemic judicial response to the emergence of federal-court litigants who could not be analogized to private parties asserting rights protected by the common law--most significantly, to plaintiffs (like the Exceptional Child plaintiffs) who themselves are not the direct subject of governmental regulation but who claimed injury arising from the activities (or inactivities) of the modern regulatory state. (22) However, the Data Processing/ Allen v. Wright constitutional/prudential framework has not yielded anything like a unified theory. (23) In fact, the Court's standing jurisprudence has long drawn strident criticism as "unprincipled" along a wide variety of perspectives (from that of low-level politics, to concealed merits determinations, to unpredictability). (24) I pass those criticisms here. Professor Fallon's recent comprehensive study, The Fragmentation of Standing, is for me far more helpful. (25) He maintains that "[r]ecent years have witnessed the accelerated fragmentation of standing into a multitude of varied, complexly related subdoctrines." (26) If one looks at discrete areas of law, however, he observes that one finds considerably more consistency and predictability. (27) This Essay is an effort to look at one such area, albeit a rather large and important one: statutory standing. And I want to emphasize the importance of the existence of a cause or right of action, an idea that until Lexmark had been obscured by Data Processing's description of the elements of constitutional and prudential standing. (28)

   Before turning to Lexmark, however, one final point should be noted. Richard Stewart characterized Data Processing as an "unredeemed disaster" and he was by no means alone. (29) But how much its conceptual shift actually changed things on the ground I cannot say. (30) Issues of "statutory standing, (31) as Lexmark reluctantly but accurately denominated them, quickly took hold, typically framed under the heading of prudential standing. (32) Laid bare, the end question often ultimately became, does this statute authorize this plaintiff to sue? Lexmark itself provides an excellent illustration. Lexmark, it was alleged, had committed trade libel against a component supplier of a Lexmark competitor. As it came to the Court, the question was one of "statutory standing" under [section] 43(a)(1)(B) of the Lanham Act. (33) Specifically, did a supplier to a Lexmark competitor have a claim against Lexmark for the "false or misleading" advertising proscribed by the Act? The Act imposed liability "in a civil action by any person who believes that he or she is or is likely to be damaged by such act." (34) Despite this very capacious language, no one, including the Court's textualists, supposed that "anyone" injured could sue. (35) The courts of appeals had framed the relevant statutory narrowing inquiry in terms of "prudential standing," (36) and a three-way circuit split developed as to the appropriate standard. Acknowledging but describing the prudential standing label as "misleading," (37) the Court granted review: "We granted certiorari to decide 'the appropriate analytical framework for determining a party's standing to maintain an action for false advertising under the Lanham Act.'" (38) As we shall see, the Court greatly reshaped "the appropriate analytical framework for determining" who could sue in the federal court. (39)

2. NEW BASICS?

   Further analysis of our preemption topic should, I believe, now be filtered through the prism of Lexmark's (I hope) watershed and (I believe) restorative decision. That decision drew wide notice because, writing for a unanimous Court, Justice Scalia's opinion all but categorically held that no judicially fashioned prudential standing barriers could exist for refusing to exercise statutorily conferred jurisdiction. (40) This was quite startling given recent squarely contrary precedent. (41) Moreover, all the Members of the Court seemingly agreed that the ban on "generalized grievance" claims inhered in Article III itself. (42) With those striking aspects of the decision I am not here concerned.

   What is important for us is that Justice Scalia removed Data Processings zone-of-interest test from prudential standing and merged it with the issue of proximate causation. "Although we admittedly have placed that test under the 'prudential' rubric in the past," he said, "it does not belong there." (43) To ask "[w]hether a...