Indiana Supreme Court justices on Thursday heard arguments in a case that could change how organizations represent their members in court, affecting groups like utility customer watchdogs in the Wabash Valley. The legal dispute focuses on what is known as 'associational standing,' which allows groups to sue on behalf of their members.
The case originated from a challenge to Duke Energy Indiana's plans for its Cayuga Generating Station in western Indiana’s Vermillion County. Duke Energy sought permission from the Indiana Utility Regulatory Commission (IURC) to build two new natural gas-fired units at the facility. The utility proposed a 'pay-as-you-build' financing mechanism for the $3.3 billion project, stating it would save customers almost $560 million in additional financing costs, according to the IURC’s 2025 approval.
Ratepayer watchdog Citizens Action Coalition and another organization, Vote Solar, opposed Duke Energy's financing plan. They argued that the construction-work-in-progress approach would require customers to pay higher prices before the natural gas units begin producing electricity. After the IURC approved Duke's plan, these two groups appealed the decision to the Indiana Court of Appeals.
However, Duke Energy asked the Indiana Supreme Court to take over the case directly, challenging the standing of Citizens Action Coalition and Vote Solar to sue on behalf of their members. A split Indiana Supreme Court granted this emergency petition to transfer in April. Justice Christopher Goff and Chief Justice Loretta Rush voted against accepting the case on an emergency basis.
Justice Goff expressed concerns about the expedited process, noting that the concept of associational standing has been accepted by lower courts and prior iterations of the high court. He stated that the case seemed to be 'rushed through by people who have really powerful interests,' and raised concerns about constitutional implications when deciding matters of such importance in an urgent manner. Peter Rusthoven, an attorney representing Duke Energy Indiana, assured Justice Goff that the case was 'fully briefed' and would have reached the Supreme Court regardless of the emergency transfer.
Duke Energy maintains that Citizens Action Coalition lacks standing to sue because the organization itself is not a Duke customer, and no individual customers are listed as plaintiffs in the lawsuit. Rusthoven argued that for legal proceedings to continue, an 'actual injured party' must be before the court. He suggested that individual Duke ratepayers who oppose the financing plan are free to sue, with associations able to support them. Rusthoven also noted that associations could participate in lawsuits through other methods, such as filing friend-of-the-court briefs, or engage in regulatory and legislative processes.
Conversely, the organizations challenging Duke Energy contend that associational standing is crucial for ordinary citizens to access the legal system. Kirti Datla, an attorney representing Citizens Action Coalition and Vote Solar, explained that groups offer protection, allowing people to come together without standing out individually. A brief filed by a coalition of nonprofits, including the American Civil Liberties Union of Indiana and conservative lawyer Jim Bopp, argued that associational standing helps resolve legal violations even when individuals cannot sue on their own due to issues like privacy, fear of retaliation, disability, immigration status, or cost. Another coalition of builders, real estate agents, and restaurants asserted that this type of litigation benefits large groups of stakeholders.
Datla also stated that requiring a member to sue as a plaintiff on behalf of all other members of the association would not make their dispute 'any more concrete.' She and Rusthoven also disagreed on whether Indiana’s Office of Utility Consumer Counselor would retain its ability to sue without associational standing.
During the oral arguments, justices, including Justice Goff, explored a potential 'middle ground.' This alternative would involve an association listing an affected individual as a 'nominal' plaintiff while the association retains control of the lawsuit. Datla suggested this approach might function similarly to a class-action lawsuit. Rusthoven questioned the necessity of associational standing if an individual would ultimately control the action, even nominally. He proposed that if associational standing is retained, the court should require proof that an association is actively collaborating with affected members on the lawsuit and limit the scope of disputes to those relevant to the group's stated purpose.
