Community Financial Services Association of America, Ltd. v. Federal Deposit Insurance Corporation, Civil Action No. 2014-0953

Background

Plaintiffs: CFSA (an association of payday lenders) and Advance America (a CFSA member) sued FDIC, FRB, OCC and the Comptroller, alleging Defendants participated in "Operation Choke Point" to pressure banks to terminate relationships with payday lenders, violating members' procedural due process rights.
Plaintiffs originally asserted APA and Fifth Amendment (due process) claims; the court previously dismissed APA claims but allowed stigma-plus due process claims to proceed (based on reputational harm plus loss of a protected interest).
Defendants moved to dismiss CFSA (the association) for lack of associational, organizational, and third-party standing; Advance America’s standing was not challenged in this motion.
CFSA sought injunctive relief to stop the alleged campaign; its claims require proving (a) stigma, (b) loss of banking relationships, and (c) causation linking stigma to the losses.
The court concluded CFSA lacks associational standing because individual member participation is necessary to prove loss of bank accounts and causation, and sampling would not cure that need given the fact-specific, as-applied nature of the claims and CFSA’s small membership.
The court also held CFSA lacks organizational standing: alleged loss of dues was speculative and not shown to be caused or redressable by relief, and diversion of advocacy resources was insufficient as a concrete Article III injury.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Does CFSA have associational standing to sue for members' due process claims?	CFSA argues its members have standing, the claims are germane to CFSA’s purpose, and member participation is not required (or can be limited via sampling).	Defendants argue the claims require individualized proof by members (lost accounts, bank reasons), so member participation is required; sampling is inadequate.	Court: No. Member-specific evidence is necessary; third prong of Hunt not met; sampling inappropriate here.
Does CFSA have organizational standing to sue on its own behalf?	CFSA claims injury from reduced dues and diversion of resources to assist members.	Defendants argue loss of dues is speculative (no members identified who reduced dues) and resource diversion is ordinary advocacy not a cognizable injury.	Court: No. Loss of dues lacks causation/redressability; diverted advocacy expenses are insufficient.
Can CFSA assert members' claims under third-party (jus tertii) standing?	CFSA contends members are hindered from suing and CFSA can protect their rights.	Defendants argue CFSA lacks Article III standing and any alleged hindrance is insufficient; members (e.g., Advance America) can and do participate.	Court: No. CFSA lacks Article III standing; asserted hindrances do not justify third-party standing.
Were Defendants’ standing arguments waived by not raising them earlier post-Lexmark?	CFSA contends prudential standing rules are non-jurisdictional after Lexmark, so Defendants waived these defenses by not raising them earlier.	Defendants argue Rule 12(h)(2) and continuing authority permit raising these defenses now; some standing limits remain jurisdictional.	Court: No waiver. Whether prudential or jurisdictional, the defenses were preserved and permissibly raised via Rule 12(c)/12(b)(1).

Key Cases Cited

Paul v. Davis, 424 U.S. 693 (stigma-plus doctrine for due process claims)
General Elec. Co. v. Jackson, 610 F.3d 110 (D.C. Cir.) (application of stigma-plus rule)
Hunt v. Washington State Apple Advertising Comm'n, 432 U.S. 333 (associational standing test)
Lujan v. Defenders of Wildlife, 504 U.S. 555 (Article III standing elements)
Clapper v. Amnesty Int'l USA, 133 S. Ct. 1138 (standing requires non-speculative chain of causation)
Friends for Am. Free Enterprise Ass'n v. Wal-Mart Stores, 284 F.3d 575 (associational standing denied where member participation required)
National Wrestling Coaches Ass'n v. Dept. of Education, 366 F.3d 930 (need for non-speculative causal allegations when third parties’ choices affect standing)