Burlington Educ. Associates v. Future Planning Associates ( 2019 )

Burlington Educ. Associates v. Future Planning Associates, 683-12-18 Wncv (Teachout, J., June 5, 2019)
[The text of this Vermont trial court opinion is unofficial. It has been reformatted from the original. The accuracy of the text and the
accompanying data included in the Vermont trial court opinion database is not guaranteed.]
STATE OF VERMONT
SUPERIOR COURT CIVIL DIVISION
Washington Unit Docket No. 683-12-18 Wncv
BURLINGTON EDUCATION ASSOCIATION, et al.
Plaintiffs
v.
FUTURE PLANNING ASSOCIATES, INC.
Defendant
DECISION
Future Planning’s Motion to Dismiss
Plaintiffs in this case consist of 30 specifically named local labor unions representing
Vermont school employees affiliated with the National Education Association and the Vermont–
National Education Association.1 None of the member–employees are parties. Plaintiffs claim
that the school districts in which their members work contracted with Defendant Future Planning
Associates, Inc., to administer their health insurance plans beginning on January 1, 2018.
Plaintiffs claim that Future Planning administered those plans incompetently, causing financial
and emotional harm to many of its members. Plaintiffs claim breach of contract and breach of
the covenant of good faith and fair dealing against Future Planning, describing their members as
intended third party beneficiaries of the contracts between the relevant school districts and
Future Planning. Plaintiffs also claim that Future Planning’s conduct violated Vermont’s
Consumer Protection Act, 9 V.S.A. §§ 2451–2481x, and they seek punitive damages.
Future Planning has filed a motion to dismiss. It argues that Plaintiffs—the many local
labor unions—lack constitutional standing to represent the interests of their members in this
litigation. Future Planning relies on the three-part test for organizational, or associational,
standing as described in Hunt v. Washington State Apple Advertising Com’n, 432 U.S. 333, 343
(1977). See Parker v. Town of Milton, 169 Vt. 74, 78 (1998) (adopting Hunt in Vermont).
Plaintiffs object to dismissal, arguing that the prong of the test that Future Planning relies on, the
necessity for individual participation of the members, is prudential rather than constitutional, and
therefore the court has discretion over whether standing exists in this case. See United Food and
Commercial Workers Union Local 751 v. Brown Group., Inc., 517 U.S. 544, 556–57 (1996)
(explaining that the third part of the Hunt test is prudential rather than constitutional).
Future Planning’s motion is denied, but not because Plaintiffs have “standing.” Rather,
standing, in the constitutional sense, is inapplicable to this case.
“Standing doctrines are employed to refuse to determine the merits of a legal claim, on
the ground that even though the claim may be correct the litigant advancing it is not properly
1
Plaintiffs also purportedly include “other similarly situated local unions,” implying that Plaintiffs may seek to
certify a larger class of as yet unidentified plaintiff–unions for purposes of a class action. See V.R.C.P. 27.
situated to be entitled to its judicial determination.” 13A Wright & Miller et al., Federal Practice
& Procedure: Jurisdiction 3d § 3531 (footnote omitted). As the Vermont Supreme Court has
explained:
The doctrine of standing is “‘an essential and unchanging part of the case-or-
controversy requirement of Article III [of the U.S. Constitution].’” . . . . One of
the “passive virtues” of the standing doctrine is to promote judicial restraint by
limiting the occasions for judicial intervention into the political process. Standing
doctrine is fundamentally rooted in respect for the separation of powers of the
independent branches of government.
Hinesburg Sand & Gravel Co. v. State, 166 Vt. 337, 340–41 (1997) (citations omitted; emphasis
added). True standing, in the constitutional sense, is a necessary component of the court’s
subject matter jurisdiction. Brigham v. State, 2005 VT 105, ¶ 9, 179 Vt. 525. Standing applies
in “litigation asserting the illegality of governmental action,” not “[c]laims of private
wrongdoing.” 13A Wright & Miller et al., Federal Practice & Procedure: Jurisdiction 3d § 3531.
Claims of private wrongdoing generally do not present separation of powers issues that reflect on
subject matter jurisdiction.
Courts and lawyers both frequently refer improperly to standing rather than the legal
doctrines that more appropriately apply in the context of claims of private wrongdoing. Wright
& Miller discusses this issue and some of the risks it presents as follows.
One last set of cautions is in order. The fascination of complex standing
doctrine and the concern to observe constitutional limits on the judicial power
occasionally lead courts to invoke public-law concepts to resolve concerns that
are better addressed through private-law concepts. In part, these decisions reflect
a longstanding common-law practice. It may be useful to avoid decision whether
a defendant has violated someone’s rights by ruling that in any event the present
plaintiff is not entitled to a remedy. That approach may be expressed by
concluding that the plaintiff lacks standing. The difficulty arises when these
questions of private right are considered through the distinctive public-law
doctrines of standing. It would be better to rely directly on cause-of-action, real-
party-in-interest, capacity, intervention, and like concepts. . . .
The question whether the law recognizes the cause of action stated by a
plaintiff is frequently transformed into inappropriate standing terms. The
Supreme Court has stated succinctly that the cause-of-action question is not a
question of standing. . . .
. . .
These conceptual confusions make unnecessary work. Ordinarily little
other harm is done, apart from generating potentially confusing precedent on what
are represented as standing issues. But conceptual labels may carry real
consequences. Lack of “standing” to raise a federal claim may persuade a court
that it lacks subject-matter jurisdiction and cannot exercise supplemental
jurisdiction. A decision characterized in standing terms may not carry the claim-
preclusion consequences that should flow from what in fact is a dismissal for
failure to state a claim.
. . .
Confusions of standing with real-party-in-interest doctrine occur with
some frequency. The most frequent cases assume that a right has been violated
and ask whether a particular plaintiff is the right plaintiff by invoking standing
theory. . . .
The confusion of standing with real-party-in-interest concepts may have
unfortunate consequences. A focus on standing may lead a court to refuse
application of the ameliorating rules that enable substitution of the real party in
interest when the wrong plaintiff filed the action.
13A Wright & Miller et al., Federal Practice & Procedure: Jurisdiction 3d § 3531 (footnote
omitted).
This case is private litigation between local labor unions and a contractor hired to provide
certain health plan services affecting members of those local labor unions. Future Planning, in
essence, argues that Plaintiff unions are not the real parties in interest, that individual members
who claim to have been harmed are the real parties in interest. See V.R.C.P. 17 (real party in
interest); 13A Wright & Miller et al., Federal Practice & Procedure: Civil 3d § 1352 (explaining
that under Rule 17, generally “an association is not the appropriate party for bringing suit to
assert the personal rights of its members.”). However, because Future Planning framed the real
party in interest issue as one of standing, the parties briefed the nuances of associational standing
and not the nuances of the real party in interest doctrine, including whether any real party in
interest defect applies to all claims and, if there is a defect, whether the real parties in interest
will seek intervention or substitution. On balance, rather than try to address the issue as briefed
and hope it does no harm, the court concludes that Future Planning’s motion instead is better
simply denied.
ORDER
For the foregoing reasons, Future Planning’s motion to dismiss is denied.
Dated at Montpelier, Vermont this ____ day of June 2019.
_____________________________
Mary Miles Teachout
Superior Judge