FILED

NOT FOR PUBLICATION

JUN 5 2024

UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS

FOR THE NINTH CIRCUIT

LEGACY HEALTH SYSTEM; et al., No. 23-35511

Plaintiffs-Appellants, D.C. Nos. 6:22-cv-01460-MO 3:02-cv-00339-MO v.

SEJAL HATHI, in her official capacity as MEMORANDUM* Director of Oregon Health Authority,

Defendant-Appellee.

Appeal from the United States District Court for the District of Oregon Michael W. Mosman, District Judge, Presiding

Argued and Submitted May 8, 2024 Seattle, Washington

Before: McKEOWN, W. FLETCHER, and OWENS, Circuit Judges.

Plaintiffs-Appellants Legacy Health System et al. (“Legacy Health System”)

are a group of hospital systems in Oregon. Legacy Health System sued the director

of the Oregon Health Authority (“OHA”), the state agency that operates the

Oregon State Hospital (“OSH”), in her official capacity.

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. Legacy Health System claims that OHA fails to maintain adequate bed space

at OSH for people who are civilly committed due to mental illness. Legacy Health

System alleges that this causes civilly committed patients to remain for long

periods in Legacy Health System’s acute care facilities, which are not designed or

prepared to provide the treatment that civilly committed individuals need on an

extended basis. Legacy Health System brought claims on its own behalf under the

Due Process Clause and the Takings Clause of the federal Constitution, as well as a

claim on its own behalf under the Takings Clause of the Oregon Constitution.

Legacy Health System also brought constitutional and statutory claims on behalf of

civilly committed patients in its facilities.

The district court dismissed Legacy Health System’s complaint in its

entirety. The district court concluded that Legacy Health System lacked Article III

standing to bring any of its claims because its injuries were traceable to its own

conduct in applying for certification to provide acute care to civilly committed

patients and were therefore not traceable to the conduct of defendant. It further

concluded that Legacy Health System lacked third-party standing to bring claims

on behalf of the civilly committed patients because the interests of Legacy Health

System and the patients were not sufficiently aligned. We have jurisdiction to hear

2 Legacy Health System’s appeal pursuant to 28 U.S.C. § 1291, and we reverse in

part, vacate in part, and remand for further proceedings.

Article III standing: The fact that Legacy Health System applied for

certification to provide acute care to civilly committed patients does not defeat

Article III standing. The Supreme Court has held that there is no “exception to

traceability for injuries that a party purposely incurs.” FEC v. Cruz, 596 U.S. 289,

296–97 (2022). An injury that results from a defendant’s actions satisfies

traceability “even if the injury could be described in some sense as willingly

incurred.” Id. at 297; see also Havens Realty Corp. v. Coleman, 455 U.S. 363, 374

(1982) (holding that a tester who “approached the real estate agent fully expecting

that he would receive false information” had standing to sue for violation of “right

to truthful housing information”). Whether Legacy Health System has a cause of

action (a question we do not decide) is not an Article III question. See Lexmark

Int’l, Inc. v. Static Control Components, Inc., 572 U.S. 118, 128 & n.4 (2014). We

reverse the judgment of the district court to the extent the court concluded that

Legacy Health System lacked Article III standing to bring the claims in this suit.

Third-party standing: Whether Legacy Health System has third-party

standing to bring claims on behalf of civilly committed patients is a closer

question. For a litigant to have standing to assert claims on a third party’s behalf,

3 “[t]he litigant must have suffered an ‘injury in fact’ . . . ; the litigant must have a

close relation to the third party; and there must exist some hindrance to the third

party’s ability to protect his or her own interests.” Powers v. Ohio, 499 U.S. 400,

410–11 (1991) (citations omitted) (quoting Singleton v. Wulff, 428 U.S. 106, 112

(1976)).

Our cases demonstrate that the “close relation” inquiry is nuanced and fact-

dependent. For instance, in Viceroy Gold Corp. v. Aubry, 75 F.3d 482 (9th Cir.

1996), we held that a nonunionized gold ore processing company met the “close

relation” requirement when it challenged on behalf of its employees a state statute

allowing unionized ore-processing plants to schedule twelve-hour shifts but

forbidding nonunionized plants from scheduling shifts of more than eight hours.

See id. at 485–86, 489. A company would not generally have a “close relation” to

its workers for purposes of third-party standing in a challenge to a statute that

protects the workers from excessive hours; the interests of companies and their

employees would often be adverse in such cases. But on the facts of Viceroy Gold

Corp., the remedy sought by the company would have benefitted the workers

because many of them had “a daily commute of seventy-five miles or more each

way” and had “requested a shorter work week—with fewer days at 12 hours per

day—to reduce the commute and give them more free time.” Id. at 485. We

4 therefore concluded that “[o]n this narrow issue, [the company’s] interest is

sufficiently aligned with that of its employees.” Id. at 489.

In Hong Kong Supermarket v. Kizer, 830 F.2d 1078 (9th Cir. 1987), we held

that a supermarket lacked standing to bring a claim on behalf of its customers

challenging the federal Special Food Program for Women, Infants and Children

(“WIC”). Id. at 1079–80, 1082. The supermarket alleged that the WIC program

“discriminated against Southeast Asians and Indochinese refugees by basing the

selection of supplemental foods on a conventional American diet, without taking

into account the diverse cultural eating habits and lactose intolerance of these

groups.” Id. at 1080. To remedy this alleged discrimination, the supermarket

sought an injunction prohibiting the administration of the WIC program. Id.

Vendors generally have standing to assert claims on behalf of their

customers. See, e.g., Craig v. Boren, 429 U.S. 190, 195 (1976). But in Hong Kong

Supermarket, the remedy sought by the supermarket would have harmed its

customers by depriving them of all WIC program benefits. Looking to “the

outcome [the supermarket] seeks on the face of its complaint,” we therefore

concluded that “its interests and those of the nutritionally high risk WIC recipients

are not ‘inextricably’ intertwined.” Hong Kong Supermarket, 830 F.2d at 1082.

5 How the principles discussed in these cases and others should apply here is

not obvious. Doctors often have been found to have standing to assert the rights of

their patients. See, e.g., Singleton, 428 U.S. at 117. But Legacy Health System

does not seek to provide appropriate long-term treatment to civilly committed

patients itself; rather, Legacy Health System seeks an injunction requiring OHA to

provide appropriate long-term care to these patients. Accepting as true the

complaint’s allegations, “the outcome” that Legacy Health System “seeks on the

face of its complaint” would benefit civilly committed patients by ensuring they

receive appropriate long-term treatment from OHA. See Hong Kong Supermarket,

830 F.2d at 1082. But as Legacy Health System’s complaint acknowledges, bed

space at OSH is limited, and OSH is under competing pressure from the injunction

upheld by our circuit in Oregon Advocacy Center v. Mink, 322 F.3d 1101 (9th Cir.

2003), which requires OSH to admit criminal defendants who are found “mentally

incapacitated . . . within seven days of the judicial finding of their incapacity to

proceed to trial.” Id. at 1107, 1123. Whether Legacy Health System’s interests are

sufficiently aligned with the interests of its civilly committed patients may depend

on what outcome Legacy Health System in fact is likely to achieve in this litigation

and whether that outcome would benefit the patients whom Legacy Health System

6 seeks to represent. These questions are not clearly answered in the complaint or

the present briefing.

The district court concluded that Legacy Health System lacked third-party

standing in part because it concluded that Disability Rights Oregon (“DRO”)

would be better suited “to speak on behalf of civilly committed patients.” That

conclusion is clearly erroneous. Cf. In re Palmdale Hills Prop., LLC, 654 F.3d

868, 873 (9th Cir. 2011) (“Factual determinations underlying the standing decision

are reviewed for clear error.”). DRO represents the “mentally incapacitated

criminal defendant[s]” in the Mink litigation. See Mink, 322 F.3d at 1105. It is

undisputed that the defendants represented by DRO compete with civilly

committed patients for the limited bed space available at OSH. The conflict

between the interests of civilly committed patients and DRO’s clients in the Mink

litigation calls into serious question DRO’s ability fairly to represent the civilly

committed patients.

The district court also found that Legacy Health System lacked third-party

standing because the hospitals “complain about how much civilly committed

patients are costing them and about the harms [the patients] inflict on their staff

members.” These allegations can be relevant to third-party standing, especially to

the extent they may reflect a prioritization of the hospitals’ financial concerns or

7 indicate a potential disjunction of interests if the remedy sought by Legacy Health

System—the creation or allocation of additional bed space at OSH for civilly

committed patients—proves unavailable. But some tension in Legacy Health

System’s complaint between the needs of civilly committed patients and the

hospitals is not necessarily enough to show that Legacy Health System lacks a

“close relation” to the patients in light of our precedent instructing that parties with

some degree of adversity may nonetheless be “sufficiently aligned” for third-party

standing purposes. See Viceroy Gold Corp., 75 F.3d at 489.

The present record is insufficient to determine whether Legacy Health

System has third-party standing to assert claims on behalf of civilly committed

patients. We therefore vacate the judgment of the district court on this issue and

remand for reconsideration in light of the third-party standing principles discussed

above.

We construe Appellee’s motion to substitute a party (Dkt. 36) as a motion to

amend the case caption and grant it. See Fed. R. App. P. 43(c)(2). We grant non-

party Samaritan Health Services, Inc.’s motion for leave to file an untimely amicus

brief (Dkt. 39). We deny as moot Legacy Health System’s motion for judicial

notice (Dkt. 46) because the materials presented therein are unnecessary to our

8 disposition of this matter. Each party shall bear its own costs on appeal. See Fed.

R. App. P. 39(a)(4).

REVERSED IN PART, VACATED IN PART, AND REMANDED.

9