An orthodontist, who employs more than 50 employees, sought a declaration that the delay of the ACA’s employer mandate was invalid. The 11th Circuit, in a divided opinion, found that the plaintiff lacked standing. I’d like to draw attention to one aspect of the dissent. For purposes of standing, you accept the “material allegations” as true.
The majority says that because “Kawa’s complaint does not mention the word ‘interest,’ let alone allege that Kawa had specific plans to invest its money into an interest-bearing asset . . . [its] lost-interest argument is waived.” But I am mindful that “[w]hen the defendant challenges standing via a motion to dismiss, both trial and reviewing courts must accept as true all material allegations of the complaint, and must construe the complaint in favor of the complaining party.” Region 8 Forest Serv. Timber Purchasers Council v. Alcock, 993 F.2d 800, 806 (11th Cir. 1993) (quotation marks omitted). We may find standing “based on the facts alleged in the complaint.” Shotz v. Cates, 256 F.3d 1077, 1081 (11th Cir. 2001) (emphasis added). …
I agree with the majority’s suggestion that Kawa has poorly explained how expending funds in 2013 rather than in 2015 would injure it. However, a party’s deficient enunciation of a legal argument does not strip us of our duty to view the complaint in the light most favorable to the plaintiff and determine whether it has alleged facts sufficient to show standing. See Lawrence v. Dunbar, 919 F.2d 1525, 1529 (11th Cir. 1990) (“Facial attacks on the complaint require the court merely to look and see if the plaintiff has sufficiently alleged a basis of subject matter jurisdiction, and the allegations in his complaint are taken as true for the purposes of the motion.” (quotation marks omitted)).
I think this precedent is quite helpful to the West Virginia suit, which premises standing on a commandeering theory. For purposes of a motion to dismiss, courts should accept as true “material allegations” for purposes of asserting standing. Now, whether the commandeering argument is deemed a factual predicate–that would be accepted as true–or a legal conclusion is an important point a court will have to decide.