50 F.4th 445
5th Cir.2022Background
- In 2019 Denning had an implanted intrathecal pain pump and signed two agreements with AIS: authorization for AIS to provide services and an assignment of insurance benefits.
- In Feb. 2021 Denning learned AIS billed her insurer $120/day for services she alleges were unauthorized; she sued in Louisiana state court for breach of contract, unjust enrichment, and fraudulent misrepresentation (individual and putative class claims).
- AIS removed to federal court and moved to dismiss under Rule 12(b)(1) for lack of Article III standing, arguing Denning suffered no out-of-pocket loss because her insurer — not she — paid the billed amounts.
- The district court granted dismissal for lack of standing, concluding a contractual breach alone was insufficient injury in fact and that Denning also failed redressability; it dismissed with prejudice.
- The Fifth Circuit held (1) breach of contract can supply an injury in fact but (2) Denning’s requested damages would redress her insurer, not her, so she lacks redressability; the court affirmed dismissal for lack of standing but modified the dismissal to be without prejudice.
Issues
| Issue | Plaintiff's Argument (Denning) | Defendant's Argument (AIS) | Held |
|---|---|---|---|
| Whether a contract breach alleged by Denning constitutes an Article III injury in fact | Breach of contract is a legally protected interest and suffices as a concrete, particularized injury | No concrete injury because Denning paid nothing and faced no collection; insurer, not Denning, was harmed | Court: Breach of contract can be an injury in fact; Denning satisfied injury-in-fact element |
| Whether Denning’s requested damages (compensatory/punitive) are redressable | Damages for breach would remedy Denning’s harm and vindicate her rights under contract/tort theories | Any monetary recovery would redress the insurer’s loss, not Denning’s; no substantial likelihood of redress | Court: Denning failed redressability — her requested monetary relief would not remedy insurer’s depletion, so no standing |
| Whether unjust enrichment / loss of patrimony (La. Civ. Code art. 2299) gives standing | AIS’s unauthorized billing depleted Denning’s available insurance coverage; restitution would address her loss of patrimony | AIS: payments were received from insurer, not Denning; restitution would return insurer’s funds, not restore Denning’s coverage | Court: Assuming injury in fact, restitution would not restore Denning’s insurance coverage — redressability fails; claim dismissed for lack of standing |
| Whether dismissal should be with or without prejudice | Dismissal for lack of standing should be without prejudice to allow curing jurisdictional defects | District court dismissed with prejudice (AIS called this likely a scrivener’s error) | Court: Dismissals for lack of jurisdiction normally are without prejudice; modified district court judgment to dismiss without prejudice |
Key Cases Cited
- Spokeo, Inc. v. Robins, 578 U.S. 330 (standing requires a concrete injury)
- TransUnion LLC v. Ramirez, 141 S. Ct. 2190 (concreteness assessed by close relationship to harms traditionally actionable)
- Uzuegbunam v. Preczewski, 141 S. Ct. 792 (nominal damages can satisfy redressability for completed violations)
- North Cypress Med. Ctr. Operating Co. v. Cigna Healthcare, 781 F.3d 182 (5th Cir.) (patients suffered injury when insurer paid inconsistent with policy)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (standing elements and injury-in-fact requirements)
- Marbury v. Madison, 5 U.S. 137 (existence of legal remedy when legal right is invaded)
- Vermont Agency of Natural Resources v. U.S. ex rel. Stevens, 529 U.S. 765 (redressability requires substantial likelihood that relief will remedy injury)
- Cole v. General Motors Corp., 484 F.3d 717 (5th Cir.) (economic harm alleged is sufficient for standing)