Southcentral Foundation v. Anthc

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

SOUTHCENTRAL FOUNDATION, No. 18-35868

Plaintiff-Appellant,

D.C. No.

v. 3:17-cv-00018-

TMB

ALASKA NATIVE TRIBAL HEALTH

CONSORTIUM, ORDER AND

Defendant-Appellee. AMENDED

OPINION

Appeal from the United States District Court

for the District of Alaska

Timothy M. Burgess, Chief District Judge, Presiding

Argued and Submitted June 3, 2020

Seattle, Washington

Filed September 14, 2020

Amended December 21, 2020

Before: Ronald M. Gould, Carlos T. Bea, and

Mary H. Murguia, Circuit Judges.

Order;

Opinion by Judge Murguia

2 SOUTHCENTRAL FOUNDATION V. ANTHC

SUMMARY *

Tribal Health Services / Constitutional Standing

The panel filed: (1) an order amending its opinion,

denying a petition for panel rehearing, and denying on behalf

of the court a petition for rehearing en banc; and (2) an

amended opinion reversing the district court’s dismissal for

lack of standing of a tribal health organization’s action

seeking declaratory relief regarding alleged violations of a

federal law concerning the provision of health services to

Alaska Natives.

The Alaska Native Tribal Health Consortium

(“ANTHC”) is an intertribal consortium created by Congress

pursuant to Section 325 of the Department of the Interior and

Related Agencies Appropriations Act of 1998 to provide

certain statewide health services at the Alaska Native

Medical Center in Anchorage. Plaintiff Southcentral

Foundation (“SCF”), a nonprofit regional tribal health

organization, is a participant in ANTHC. SCF sued ANTHC

for alleged violations of Section 325 in (1) forming an

Executive Committee and delegating to it the full authority

of the ANTHC Board of Directors; and (2) erecting

informational barriers in a Code of Conduct and Disclosure

Policy.

The panel held that SCF alleged an injury in fact

sufficient to confer Article III standing by alleging

infringement of its governance and participation rights under

*

This summary constitutes no part of the opinion of the court. It

has been prepared by court staff for the convenience of the reader.

SOUTHCENTRAL FOUNDATION V. ANTHC 3

Section 325, as well as deprivation of its ability to exercise

these rights intelligently and effectively. The panel reversed

and remanded for further proceedings.

COUNSEL

William D. Temko (argued), Munger Tolles & Olson LLP,

Los Angeles, California; Nicholas D. Fram, Munger Tolles

& Olson LLP, San Francisco, California; Jahna M.

Lindemuth, Holmes Weddle & Barcott, Anchorage, Alaska;

for Plaintiff-Appellant.

James E. Torgerson (argued), Stoel Rives LLP, Anchorage,

Alaska; Brad S. Daniels and Rachel C. Lee, Stoel Rives LLP,

Portland, Oregon; for Defendant-Appellee.

ORDER

The Opinion filed on September 14, 2020, is amended as

set out in the attached Amended Opinion.

With the amendment, the panel has voted to deny the

petition for panel rehearing. Judges Gould and Murguia vote

to deny the petition for rehearing en banc and Judge Bea so

recommends.

The full court has been advised of the petition for

rehearing and rehearing en banc and no judge has requested

a vote on whether to rehear the matter en banc. Fed. R. App.

P. 35.

The petition for panel rehearing and the petition for

rehearing en banc are DENIED (Doc. 99). No further

petitions shall be entertained.

4 SOUTHCENTRAL FOUNDATION V. ANTHC

OPINION

MURGUIA, Circuit Judge:

This case asks us to determine whether a tribal health

organization has alleged an injury in fact sufficient to confer

Article III standing to challenge alleged violations of a

federal law concerning the provision of health services to

Alaska Natives.

The Alaska Native Tribal Health Consortium

(“ANTHC”) is an intertribal consortium specifically created

by Congress pursuant to Section 325 of the Department of

the Interior and Related Agencies Appropriation Act of

1998, Pub. L. No. 105-83, 111 Stat. 1543, to provide certain

statewide health services at the Alaska Native Medical

Center in Anchorage, Alaska. Southcentral Foundation

(“SCF”)—a nonprofit regional tribal health organization that

provides health care programs and services to over 65,000

Alaska Natives—is a participant in the intertribal

consortium.

SCF appeals the district court’s dismissal of its

complaint against ANTHC for alleged violations of Section

325. We have jurisdiction under 28 U.S.C. § 1291, and we

reverse.

I. Background of Section 325

Until the 1970s, the federal government administered

health care programs and provided health services directly

to Alaska Natives and American Indians through the Indian

Health Service (“IHS”), an agency within the Department of

Health and Human Services (“DHHS”). Thereafter, federal

policy shifted towards empowering tribes and tribal

organizations to manage and operate federal programs

SOUTHCENTRAL FOUNDATION V. ANTHC 5

offered for the benefit of Alaska Natives and American

Indians. See 25 U.S.C. § 5301. With that goal in mind,

Congress passed the Indian Self-Determination and

Education Assistance Act of 1975 (“ISDEAA”) to promote

a “meaningful Indian self-determination policy which will

permit an orderly transition from the Federal domination of

programs for, and services to, Indians to effective and

meaningful participation by the Indian people in the

planning, conduct, and administration of those programs and

services.” Id. § 5302. In other words, the ISDEAA provides

Indian tribes with the authority, discretion, and funds to

administer programs that the federal government would

otherwise provide.

In the mid-1990s, IHS began constructing a new Alaska

Native Medical Center (“ANMC”) building in Anchorage to

serve Alaska Natives around the state. IHS planned to

transfer control of the ANMC to Alaska tribal entities, but

over 200 Alaska tribes and tribal organizations could not

agree on a management structure. To break the deadlock,

Congress enacted Section 325 in 1997, which created an

intertribal consortium “to provide all statewide health

services provided by the [IHS] of the [DHHS] through the

Alaska Native Medical Center and the Alaska Area Office.”

Pub. L. No. 105-83, § 325, 111 Stat. 1543, 1597 (1997).

Section 325 outlines the formation and governance of the

consortium in the following key terms:

(a) Notwithstanding any other provision of

law, and except as provided in this section,

[thirteen regional tribal health organizations,

including Southcentral Foundation] . . . are

authorized to form a consortium (hereinafter

“the Consortium”) to enter into contracts,

compacts, or funding agreements . . . to

6 SOUTHCENTRAL FOUNDATION V. ANTHC

provide all statewide health services

provided by the [IHS] of the [DHHS]

through the [ANMC] and the Alaska Area

Office. Each specified “regional health

entity” shall maintain that status for purposes

of participating in the Consortium only so

long as it operates a regional health program

for the [IHS] under Public Law 93-638

(25 U.S.C. 450 et seq.), as amended.

(b) The Consortium shall be governed by a

15-member Board of Directors, which shall

be composed of one representative of each

regional health entity listed in subsection

(a) above, and two additional persons who

shall represent Indian tribes, as defined in

25 U.S.C. 450b(e), and sub-regional tribal

organizations which operate health programs

not affiliated with the regional health entities

listed above and Indian tribes not receiving

health services from any tribal, regional or

sub-regional health provider. Each member

of the Board of Directors shall be entitled to

cast one vote. Decisions of the Board of

Directors shall be made by consensus

whenever possible, and by majority vote in

the event that no consensus can be reached.

Id., 111 Stat. at 1597–98 (emphases added).

ANTHC was established as the statutorily-authorized

Consortium to provide statewide health services under

Section 325 shortly after its enactment. ANTHC’s Board of

Directors (the “Board”) held its first meeting in January

1998 and concurrently adopted its original bylaws (the

“Bylaws”).

SOUTHCENTRAL FOUNDATION V. ANTHC 7

II. Factual Background

Many of the following facts are alleged in SCF’s

complaint, which we presume to be true on this appeal. See

Mont. Shooting Sports Ass’n v. Holder, 727 F.3d 975, 979

(9th Cir. 2013).

A. ANTHC’s Executive Committee

In November 2014, the chair and president of ANTHC’s

Board of Directors, Andy Teuber, sent an email to the Board

stating that it would consider certain amendments to the

Bylaws at the Board’s meeting in December 2014.

At the meeting, the Board—by a thirteen-to-two vote and

over the objection of SCF’s representative on the Board—

adopted an amendment proposed by Teuber that resulted in

the creation of a five-member “Executive Committee” of the

Board. The Executive Committee was to be comprised of

the Chair of the Board, and two or more additional Directors

appointed by the Chair. The Executive Committee was

authorized to “exercise the authority of the Board of

Directors in the management of the Consortium,” subject to

a few narrow exceptions. Importantly, actions taken by the

newly created Executive Committee were not subject to

ratification by the full Board. Furthermore, the Executive

Committee’s authority was not limited to acting between

Board meetings or in emergency situations.

At the December 2014 meeting, Teuber also proposed an

evaluation of the compensation paid to the Directors, which

included the development of a plan to increase their

compensation retroactive to incorporation, despite the fact

that between 1999 and 2011 the Articles of Incorporation did

not permit Directors to receive compensation for their

service on the Board. Notably, this proposal followed a

8 SOUTHCENTRAL FOUNDATION V. ANTHC

settlement between ANTHC and IHS in June 2014, wherein

IHS provided ANTHC a one-time payment of $153 million

because of failures to pay certain contract obligations.

Shortly thereafter, the Executive Committee met for the

first time. Neither SCF’s primary Director, nor its alternate,

were members of the Executive Committee. The Executive

Committee approved lucrative employment contracts for

two senior executives of ANTHC—Teuber and CEO Roald

Helgesen. Notably, Teuber’s base salary increased from

$110,000 to $730,000.

Meanwhile, SCF’s designated Director was not informed

that the Executive Committee had even met until Teuber

summarized the results of the meeting in an email in

February 2015. Although the email disclosed the execution

of new contracts for Teuber and Helgesen, it did not disclose

the terms of the contracts, including the compensation

amount.

Then, in April 2015, the Board held a special meeting

during which it ratified the actions taken by the Executive

Committee in December 2014. According to SCF, by this

time Teuber’s and Helgesen’s new contracts had already

been signed.

Approximately two years later, in April 2017, the Board

amended the Bylaws to clarify that, moving forward, the

Executive Committee could convene only between meetings

of the Board and that “all actions of the Executive

Committee must be ratified and approved by a vote of the

Board of Directors . . . in order to be effective.”

SOUTHCENTRAL FOUNDATION V. ANTHC 9

B. ANTHC’s Code of Conduct and Disclosure Policy

A couple of years after the Executive Committee was

created, the Board amended its code of conduct (the “Code

of Conduct”) “to clarify expectations and processes

regarding handling conflicts of interest and confidential

information.” According to SCF, these changes clarified

that Directors could share with their designating entities

certain information such as Board resolutions and final

meeting minutes, but they stopped short of permitting full

disclosure of Board material. In order to share any

“confidential or sensitive” information with their

designating entity, Directors needed the permission of

Teuber or the Chair of the Ethics and Compliance

Committee.

The Board also adopted a Disclosure of Records and

Information Policy (the “Disclosure Policy”) in September

2016. According to SCF, the Disclosure Policy further

restricted the information that ANTHC could share with the

regional health entities and their designated Directors on the

Board by “drastically limit[ing] Directors’ access to what

ANTHC considered to be ‘[c]onfidential, proprietary, and

other sensitive information.’” Specifically, the Disclosure

Policy provided that Directors may “make reasonable

inquiries to fulfill their fiduciary responsibilities, including

their duty of representation,” but that the “disclosure of

confidential, sensitive, proprietary or privileged information

may be conditioned on adequate safeguards and assurances.”

The Policy stated that “[o]rdinarily, requests are

unreasonable to the extent they are unduly burdensome;

likely to disrupt operations; . . . or otherwise inconsistent

with the scope of a Director’s responsibilities.” The

Disclosure Policy also provided that “[c]onfidential,

proprietary and other sensitive information may also be

10 SOUTHCENTRAL FOUNDATION V. ANTHC

provided to Directors and other individuals, organizations

and agencies in appropriate cases if adequate safeguards are

in place to protect the integrity, confidentiality and use of the

information[.]”

In other words, according to SCF, the Disclosure Policy

gave unidentified ANTHC personnel absolute discretion to

determine what information could be shared, even with

ANHC’s Directors, with a rebuttable presumption against

disclosure.

III. Procedural Background

On January 20, 2017, SCF filed suit seeking a

declaration that ANTHC violated Section 325 when it:

(1) formed the Executive Committee and delegated to it the

full authority of the fifteen-member Board, and (2) erected

informational barriers in the Code of Conduct and

Disclosure Policy. ANTHC filed counterclaims seeking a

declaration that these disputed practices did not violate state

or federal law. In August 2017, the parties filed cross-

motions for summary judgment, and ANTHC also moved to

dismiss the complaint for lack of standing under Federal

Rule of Civil Procedure 12(b)(1). The district court granted

ANTHC’s motion to dismiss after concluding that SCF

failed to allege an injury in fact sufficient to confer Article

III standing. The court therefore denied as moot the parties’

cross-motions for summary judgment. SCF timely appealed.

IV. Standard of Review

We review de novo an order granting a motion to dismiss

for lack of standing under Federal Rule of Civil Procedure

12(b)(1) and construe all material allegations of fact in the

complaint in favor of the plaintiff. Mont. Shooting Sports

Ass’n, 727 F.3d at 979.

SOUTHCENTRAL FOUNDATION V. ANTHC 11

V. Analysis

Standing is “an essential and unchanging part of the

case-or-controversy requirement of Article III.” Lujan v.

Defs. of Wildlife, 504 U.S. 555, 560 (1992). To have Article

III standing, a plaintiff must demonstrate that it has

“(1) suffered an injury in fact, (2) that is fairly traceable to

the challenged conduct of the defendant, and (3) that is likely

to be redressed by a favorable judicial decision.” Spokeo,

Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016) (citing Lujan,

504 U.S. at 560–61). Here, the only element of the standing

inquiry at issue is injury in fact.

“[A]n injury in fact must be both concrete and

particularized.” Id. at 1548. To be particularized, an injury

must “affect the plaintiff in a personal and individual way.”

Id. (quoting Lujan, 504 U.S. at 560 n.1). “Thus, a plaintiff

normally does not have standing where the only ‘asserted

harm is a “generalized grievance” shared in substantially

equal measure by all or a large class of citizens.’” Thomas

v. Mundell, 572 F.3d 756, 760 (9th Cir. 2009) (quoting

Warth v. Seldin, 422 U.S. 490, 499 (1975)). To be concrete,

an injury “must be ‘de facto’; that is, it must actually exist.”

Spokeo, 136 S. Ct. at 1548. In other words, an abstract,

theoretical concern does not suffice. However, “[a]lthough

tangible injuries are perhaps easier to recognize, we have

confirmed in many of our previous cases that intangible

injuries can nevertheless be concrete.” Id. at 1549.

SCF alleges an injury in fact in two distinct ways: first,

that ANTHC infringed SCF’s governance and participation

rights under Section 325 by delegating the full authority of

the fifteen-member Board to the five-person Executive

Committee; and second, that ANTHC erected informational

barriers in the Code of Conduct and Disclosure Policy that

deprived SCF of its ability to exercise effectively its

12 SOUTHCENTRAL FOUNDATION V. ANTHC

governance and participation rights. We address each claim

in turn.

A. Standing for Executive Committee Claim

To determine whether SCF has standing to bring its

claim for a declaratory judgment that the formation of the

Executive Committee violated federal law (the “Executive

Committee Claim”), we begin our analysis with the plain

language of Section 325. See United States v. Gallegos,

613 F.3d 1211, 1214 (9th Cir. 2010) (“The starting point for

our interpretation of a statute is always its language.”).

In no uncertain terms, Section 325 provides that the

“[t]he Consortium shall be governed by a 15-member Board

of Directors, which shall be composed of one representative

of each regional health entity listed in subsection

(a) above[.]” Pub. L. No. 105-83, § 325(b). In addition,

Section 325 expressly identifies thirteen regional health

entities that shall be represented on the Board, including

SCF. Id. § 325(a). Section 325 also guarantees that “[e]ach

member of the Board of Directors shall be entitled to cast

one vote,” provided that the regional health entities maintain

their status as such by operating a regional health program.

Id. § 325(a)–(b).

Based on this language, we have no difficulty concluding

that SCF has met its burden to demonstrate that the injury it

asserts—infringement of its governance and participation

rights under Section 325—is sufficiently concrete and

particularized. It is clear that the alleged injury is

sufficiently particularized, as Section 325 allocates the right

to govern the statutorily-authorized Consortium to a Board

of Directors that expressly includes a representative from

SCF. It is also clear that the alleged injury is sufficiently

concrete. SCF alleged that the creation of the Executive

SOUTHCENTRAL FOUNDATION V. ANTHC 13

Committee, and the delegation to it the full powers of the

Board, infringed on SCF’s right under Section 325(b) to cast

its vote in the management of the Consortium, thereby

depriving SCF of the ability to effectuate the “meaningful

Indian self-determination” envisioned by Congress when it

enacted the ISDEAA. 25 U.S.C. § 5302; cf. Lapidus v.

Hecht, 232 F.3d 679, 683 (9th Cir. 2000) (shareholders had

standing under Massachusetts law to bring direct action for

violation of their voting rights).

We are not persuaded by ANTHC’s argument that SCF’s

right to “participat[e] in the Consortium” referenced in

Section 325(a) pertains only to SCF’s right to participate in

the Consortium’s “provi[sion of] all statewide health

services.” The clause in Section 325(a) referring to the

“provi[sion of] all statewide health services” merely

describes the types of “contracts, compacts, or funding

agreements” that the Consortium is permitted to enter into;

it does not limit the scope of the regional health entities’

right to “participat[e] in the Consortium.” Rather, the clause

in Section 325(a) regarding the regional health entities’ right

to “participat[e] in the Consortium” relates to preserving

each regional health entity’s status as such in order to serve

on the Board of Directors. In other words, so long as the

regional health entities operate a regional health program,

they can be represented on the Board to “participat[e] in the

Consortium.”

Nor are we persuaded by ANTHC’s argument that

Section 325 grants rights of governance only to Directors.

ANTHC highlights that Section 325(b) references persons

specifically—as opposed to entities—when it mandates that

ANTHC “shall be governed by a 15-member Board of

Directors, which shall be composed of one representative of

each regional health entity . . . and two additional persons

14 SOUTHCENTRAL FOUNDATION V. ANTHC

who shall represent Indian tribes.” Pub. L. No. 105-83,

§ 325(b). Had Congress intended that the regional health

entities exercise governance rights themselves, ANTHC

argues, Congress would have specified how to allocate

decision-making power among the regional health entities.

But Congress did just that when it created the right to

have a “representative” on the Board. A representative is

“[s]omeone who stands for or acts on behalf of another.”

Representative, Black’s Law Dictionary (11th ed. 2019).

“The preeminent canon of statutory interpretation requires

us to presume that the legislature says in a statute what it

means and means in a statute what it says there.” Steinle v.

City & Cty. of San Francisco, 919 F.3d 1154, 1164 (9th Cir.

2019) (quoting In re HP Inkjet Printer Litig., 716 F.3d 1173,

1180 (9th Cir. 2013)). Had Congress meant, for instance,

that regional health entities were merely “advisory,” it could

have used this alternate language. Instead, Congress

endowed each specified regional health entity with the right

to have a “representative” on the Board that stands in the

shoes of the designating entity by acting on its behalf.

We briefly pause to note that ANTHC does not meet its

“heavy burden” to establish mootness by virtue of the

subsequent Bylaws amendment. Friends of the Earth, Inc.

v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 189

(2000). ANTHC argues that, after the Bylaws were

amended in April 2017 to require Executive Committee

actions to be ratified by the full Board to be effective, there

is no reasonable likelihood that the alleged violation will

recur. We have explained that “the mere cessation of illegal

activity in response to pending litigation does not moot a

case, unless the party alleging mootness can show that the

‘allegedly wrongful behavior could not reasonably be

expected to recur.’” Rosemere Neighborhood Ass’n v. U.S.

SOUTHCENTRAL FOUNDATION V. ANTHC 15

Envtl. Prot. Agency, 581 F.3d 1169, 1173 (9th Cir. 2009)

(quoting Friends of the Earth, 528 U.S. at 189). Here,

however, ANTHC does little more than point to the fact of

the April 2017 amendment as evidence of mootness, which

does little to assure that the amendment is not merely “a

temporary policy that . . . will [be] refute[d] once this

litigation is concluded.” Smith v. Univ. of Wash. Law

School, 233 F.3d 1188, 1194 (9th Cir. 2000) (quoting White

v. Lee, 227 F.3d 1214, 1244 (9th Cir. 2000)). This is

especially true where ANTHC is not entitled to a

presumption of good faith that its cessation of the disputed

conduct will not recur. As we recently explained, the

voluntary cessation of challenged acts by a private party is

not entitled to the presumption of good faith enjoyed by

legislative bodies when they repeal or amend a challenged

legislative provision. Bd. of Trs. of the Glazing Health &

Welfare Tr. v. Chambers, 941 F.3d 1195, 1199 (9th Cir.

2019) (en banc). Therefore, without more, ANTHC has not

met its burden to establish mootness.

In sum, while we express no views on the merits of

SCF’s claim that the formation of the Executive Committee

violated Section 325, we conclude that Section 325 granted

SCF governance and participation rights in the management

of ANTHC to be exercised through SCF’s representative on

the Board and that SCF has alleged an injury in fact

sufficient to confer Article III standing to bring its claim.

B. Standing for Information Claim

Relatedly, SCF argues that it suffered an injury when

ANTHC amended the Code of Conduct and adopted the

Disclosure Policy, which together deprived SCF of its ability

to exercise its governance rights intelligently and effectively

by prohibiting SCF’s Director from sharing certain critical

information with SCF.

16 SOUTHCENTRAL FOUNDATION V. ANTHC

Consistent with our foregoing conclusion that SCF has

standing to bring its Executive Committee Claim, we

likewise agree that the alleged deprivation of information

necessary to exercise effectively the governance and

participation rights allocated to the regional health entities in

Section 325 constitutes an injury in fact sufficient to confer

Article III standing. Indeed, the right to govern would be a

hollow promise absent the information necessary to exercise

that right intelligently.

ANTHC relies on Wilderness Society, Inc. v. Rey,

622 F.3d 1251 (9th Cir. 2010), however, to argue that

because Section 325 does not create an express right to

information, SCF cannot establish standing as to this claim.

That argument is unavailing. In Wilderness Society,

environmental groups argued that they had standing to

challenge various regulations issued by the United States

Forest Service that “significantly limit[ed] the scope and

availability of notice, comment, and appeals procedures” for

proposed decisions concerning projects under the Forest

Service Decisionmaking and Appeals Reform Act (“ARA”),

thereby allegedly causing the environmental groups an

“informational injury.” Id. at 1253, 1258–59. We observed

that in order “[t]o ground a claim to standing on an

informational injury, the ARA must grant a right to

information capable of supporting a lawsuit.” Id. at 1259.

We concluded that plaintiffs failed to assert an informational

injury because “Congress’s purpose in mandating notice in

the context of the ARA was not to disclose information, but

rather to allow the public opportunity to comment on the

proposals.” Id. at 1259.

ANTHC argues that because the purpose of Section 325

was to allow participation in decision-making—not to

provide information—SCF does not have standing to assert

SOUTHCENTRAL FOUNDATION V. ANTHC 17

an informational injury, even if information may act “as a

predicate” for participation in decision-making. However,

unlike the plaintiffs in Wilderness Society, SCF alleges an

informational injury that is inextricably tied to its interest in

exercising its governance and participation rights, not

merely the right to participate in the public comment

process. Cf. Lapidus, 232 F.3d at 683 (shareholders had

standing under Massachusetts law to bring direct action for

violation of their voting rights). This is a meaningful

difference in kind. Accordingly, we conclude that SCF has

demonstrated injury in fact sufficient to confer Article III

standing to bring its informational injury claim.

VI. Conclusion

Because we conclude that Section 325 conferred

governance and participation rights to SCF, which

necessarily includes an entitlement to information necessary

to effectively exercise those rights, we reverse the district

court’s dismissal of SCF’s complaint for lack of Article III

standing and remand for further proceedings consistent with

this opinion.

REVERSED and REMANDED. Defendant-Appellee

must bear all costs.