                                 REVISED



                   United States Court of Appeals,

                            Fifth Circuit.

                            No. 96-40590.

          FRIENDS OF THE EARTH, INC., Plaintiff-Appellant,

                                   v.

              CHEVRON CHEMICAL CO., Defendant-Appellee.

                            Dec. 10, 1997.

Appeal from the United States District Court for the Eastern
District of Texas.

Before REAVLEY, BARKSDALE and STEWART, Circuit Judges.

       REAVLEY, Circuit Judge:

       Pursuant to the citizen suit provision of the Clean Water Act,

33 U.S.C. § 1365(a), Friends of the Earth, Incorporated (FOE) sued

Chevron Chemical Company for violating the terms of its National

Pollution Discharge Elimination System (NPDES) permit.         After a

three-day bench trial, the district court dismissed the case for

lack of subject matter jurisdiction on the grounds that FOE lacked

associational standing because it had no members under corporate

law.    We reverse and remand.

                            I. Background

       FOE is a non-profit corporation organized under the laws of

the District of Columbia to promote a broad agenda of environmental

awareness and improvement projects.        The organization has pursued




                                    1
this agenda in the federal courts.1

     Chevron manufactures polyethylene in its facility in Orange,

Texas.    Under its NPDES permit, Chevron discharges the process

water, combined with any stormwater, into Round Bunch Gully, which

flows into Cow Bayou and then down to the Sabine River and the

Sabine Lake. The permit includes mass limitations on the amount of

total suspended solids (TSS) that Chevron can discharge.            Between

October 1990 and January 1994, Chevron exceeded its TSS limits.            In

July 1994, after giving the required 60 days notice to the EPA, FOE

filed a private civil enforcement action against Chevron pursuant

to § 505 of the Clean Water Act, 33 U.S.C. § 1365, alleging

violations of Chevron's NPDES permit.          FOE asserted standing as a

representative    of    its   members,    naming   four   members   who   had

allegedly been injured by Chevron's discharges. FOE filed a second

suit in September 1994, and the district court consolidated the two

cases.

     In an order signed September 1, 1995, the district court

denied Chevron's motion for summary judgment asserting that FOE

lacked constitutional standing.          The court concluded in a careful

opinion   that   FOE    had   constitutional    standing   to   pursue    the

citizens' suit.2       After a motion to clarify the order, the court

issued a second order stating that "a fact issue remains regarding

Plaintiffs' standing."

     1
      See, e.g., Friends of the Earth v. Consolidated Rail Corp.,
768 F.2d 57 (2d Cir.1985).
    2
     Friends of the Earth, Inc. v. Chevron Chem. Co., 900 F.Supp.
67, 74-76 (E.D.Tex.1995).

                                     2
     The day before trial, Chevron filed a supplemental memorandum

arguing for the first time that FOE lacked standing to represent

the named aggrieved persons because it had no legal members under

the corporate laws of the District of Columbia.                 FOE's bylaws

provide that membership requirements shall be set by the board of

directors.   At that time, FOE's board had never taken any formal

affirmative action to comply with its responsibility and authority

to determine membership requirements.            The officers of FOE simply

followed a practice of considering all those who gave a donation,

as well as those who had a donation made in their name, to be

members.

     The   district   court   found       that   FOE   could   not   meet   the

associational standing test because it had no members.

                      II. Associational Standing

      The standing requirement stems from the Article III grant of

power to the federal courts over cases or controversies.                    The

standing requirement "tends to assure that the legal questions

presented to the court will be resolved, not in the rarified

atmosphere of a debating society, but in a concrete factual context

conducive to a realistic appreciation of the consequences of

judicial action."3     Further, it "serve[s] as at least a rough

attempt to put the decision as to whether review will be sought in




       3
        Valley Forge Christian College v. Americans United for
Separation of Church and State, Inc., 454 U.S. 464, 472, 102 S.Ct.
752, 758, 70 L.Ed.2d 700 (1982).

                                      3
the hands of those who have a direct stake in the outcome."4

     In Hunt v. Washington State Apple Advertising Commission, the

Supreme Court stated that an organization can assert "associational

standing" to represent the interests of individuals if it can show

that (1) one or more of the organization's members would have

standing in his or her own right;      (2) the interests which the

organization seeks to protect in the lawsuit are germane to the

purposes of the organization;   and (3) the nature of the case does

not require the participation of the individual affected members as

plaintiffs to resolve the claims or prayers for relief at issue.5

The second and third prongs are not disputed in this case.      The

only issue is whether FOE meets the first prong of the Hunt test.

     The district court focused on the issue of "membership" within

the first prong.   The court found that FOE did not have any members

under the laws of the District of Columbia and, as a result, did

not have any members for purposes of constitutional standing.

While a corporation's failure to comply with state and internal

rules for identification of its members might be relevant to the

issue of whom the corporation represents, we do not believe this

defect should overshadow the considerable activities of FOE with

and for those persons its officers and staff have consistently

considered to be members.

    4
     Id. at 473, 102 S.Ct. at 759 (quoting Sierra Club v. Morton,
405 U.S. 727, 740, 92 S.Ct. 1361, 1368-69, 31 L.Ed.2d 636 (1972)).

        5
       432 U.S. 333, 343, 97 S.Ct. 2434, 2441, 53 L.Ed.2d 383
(1977); Warth v. Seldin, 422 U.S. 490, 511, 95 S.Ct. 2197, 2211-
12, 45 L.Ed.2d 343 (1975).

                                  4
      In   Sierra    Association   for      Environment   v.   Federal     Energy

Regulatory     Commission,      the      Ninth   Circuit       held    that   an

organization's form under state law does not affect its federal

standing.6     In that case, the Sierra Association for Environment

(SAFE)—a non-profit corporation organized under the laws of the

State of California—had been suspended and failed to take the steps

necessary to preserve its corporate status under California law.

The Ninth Circuit rejected the defendant's argument that SAFE

lacked standing, stating:

      SAFE's ability under California law as a suspended California
      corporation to initiate suit would be relevant if this action
      were under our diversity jurisdiction.      But because this
      action arises under federal law, SAFE had capacity to sue as
      an unincorporated association, and any incapacity under
      California law is accordingly irrelevant.7

      The Supreme Court in Hunt, while articulating the three-part

test for associational standing, elaborated on the "membership"

requirement.        In Hunt, the Washington State Apple Advertising

Commission sought to establish standing to assert the economic

interests of Washington apple growers and dealers, much in the way

a non-governmental trade association could do.8 Yet the Commission

was   a    state    agency   created   by    state   statute,    not   a    trade

association.       The Commission had no "members" under state law, and

participation of the apple growers and dealers in the Commission

came, not through voluntary contributions, but rather through


      6
       744 F.2d 661 (9th Cir.1984).
      7
       Id. at 662 (citations omitted).
      8
       Hunt, 432 U.S. at 342-43, 97 S.Ct. at 2440-41.

                                       5
"mandatory assessments."9

       The Supreme Court rejected the defendant's argument that the

Commission        was    precluded     from    establishing        the    requisites    of

associational           standing     because       it   lacked     formal      membership.

Rather, the court performed a functional analysis to determine

whether the nature of the relationship between the Commission and

the relevant interests of the individual Washington apple growers

and dealers satisfied the goals of the constitutional standing

requirement.          The Court found that the apple growers and dealers

possessed "all the indicia of membership," and that "the Commission

represents the State's growers and dealers and provides the means

by which they express their collective views and protect their

collective interests."10 Thus, the Court concluded, "it would exalt

form       over   substance     to    differentiate          between     the   Washington

Commission and a traditional trade association" for purposes of

determining        Article     III    standing.11            The   Supreme      Court   has

reiterated         Hunt's      three-part          test      for    associational        or

representational standing.12

            Chevron      has   provided    no       cogent    reason     to    limit    the

accompanying detailed analysis of the "membership" requirement

within that test to the facts of Hunt.                    Every case can be limited

       9
        Id. at 345, 97 S.Ct. at 2442.
       10
            Id. at 344-45, 97 S.Ct. at 2441-42.
       11
            Id. at 345, 97 S.Ct. at 2442.
            12
        International Union, United Auto., Aerospace, & Agric.
Implement Workers v. Brock, 477 U.S. 274, 282, 106 S.Ct. 2523,
2528-29, 91 L.Ed.2d 228 (1986).

                                               6
to its facts and distinguished from later ones.           In this case, the

policy underlying the decision in Hunt, as well as the decisions in

other circuits, supports holding that the "indicia of membership"

test is the correct one to apply to determine whether a purported

corporation, despite the failure to meet state law requirements,

has "members" whose interests it can represent in federal court.

As the Third Circuit said in a recent case involving FOE, "[w]e do

not accept this formalistic argument because it lacks merit.                To

meet the requirements of organizational standing, PIRG and FOE need

only prove that their members possess the "indicia of membership'

in their organizations."13

     The next step is to apply the Hunt "indicia of membership"

test.    The Court in Hunt looked to who elected the governing body

of the organization and who financed its activities. The purported

members of FOE meet both these elements. Additionally, the members

have voluntarily associated themselves with FOE, in contrast to the

apple    growers    who   financed   the   Commission    through    mandatory

assessments.       The individuals testified in court that they were

members of FOE.      FOE has a clearly articulated and understandable

membership structure.       This suit clearly is within FOE's central

purpose, and thus within the scope of reasons that individuals

joined    the   organization.        For   all   these   reasons,    FOE   has

associational standing to represent its members.

                              III. Disposition


         13
        Public Interest Research Group of New Jersey, Inc. v.
Magnesium Elektron, Inc., 123 F.3d 111, 119 (3d Cir.1997).

                                       7
     The district court initially decided that the individuals

"clearly       would    have     constitutional     standing       to   pursue    this

action."14      Were we to review that decision, it would be de novo.15

Because that court now has a full trial record and is in a position

to reconsider, if it chooses, constitutional standing together with

any other issues reached, we leave further decision to the court on

remand.

     REVERSED and REMANDED.

     RHESA HAWKINS BARKSDALE, Circuit Judge, dissenting:

     Because FOE did not have the requisite individual members in

order     to   qualify     for    associational     standing,       I   respectfully

dissent.

     The central contention made by FOE, and the one upon which the

majority relies, is that Hunt v. Washington State Apple Adver.

Comm'n, 432 U.S. 333, 97 S.Ct. 2434, 53 L.Ed.2d 383 (1977),

controls.       But, Hunt concerned a state agency that was acting

similar to a trade association;             unlike FOE, it had no mechanism to

establish "members" in the traditional sense. Faced with this, the

Supreme      Court     looked    to   the   "indicia     of   membership"     because

"[u]nder the circumstances presented here, it would exalt form over

substance      to    differentiate      between    the    [state    agency]      and   a

traditional trade association...."                Id. at 345, 97 S.Ct. at 2442

(emphasis added).


     14
          Friends of the Earth, Inc., 900 F.Supp. at 76.
        15
       Sierra Club, Lone Star Chapter v. Cedar Point Oil Co., 73
F.3d 546, 555 (5th Cir.1996).

                                            8
       The majority expands Hunt to cover nonprofit corporations,

pointing     to   Sierra   Ass'n    for       Environment   v.    Federal    Energy

Regulatory Comm'n, 744 F.2d 661 (9th Cir.1984). However, that case

involved whether the plaintiff had the capacity to sue under

FED.R.CIV.P. 17(b)(1);      it has little or no bearing on whether the

laws   regulating     nonprofit     corporate       membership     would     affect

associational standing.

       The other, non-binding, authority upon which the majority

relies is Public Interest Research Group of New Jersey, Inc. v.

Magnesium Elektron, Inc., 123 F.3d 111 (3d Cir.1997).                 The portion

of Magnesium Elektron that deals with the expansion of Hunt is

relegated to two sentences and it does not address the issue

presented here:      what role by-laws and state law should play in

determining nonprofit corporate membership; what the result should

be when, as here, procedures for membership are not established or

followed;     and why Hunt should apply to such corporations.

       There are sound reasons not to extend Hunt to nonprofit

corporations.      In Hunt, the Court's extension of the associational

standing doctrine was from a trade association to a state agency

that   had   an   established      constituency      through      state    enabling

legislation.      The Court stated:            "The only question presented,

therefore, is whether, on this record, the Commission's status as

a state agency, rather than a traditional voluntary membership

organization,      precludes   it   from       asserting    the   claims    of   the

Washington apple growers and dealers who form its constituency."

432 U.S. at 344, 97 S.Ct. at 2442 (emphasis added).


                                          9
     This extension of "membership" from an association to a

certain type of state agency does not as a matter of logic or

policy, much less law, continue on to a nonprofit corporation.

Associations are far more loosely organized and are not required to

follow certain formalities because they do not receive the many

benefits of corporate status.    A nonprofit corporation, which has

a method for selecting its members according to its by-laws and

state law, but which has failed to follow this method, should not

be entitled to associational standing with respect to persons who

are, therefore, non-members, simply because, in certain situations,

it may choose to assert these individuals' "indicia of membership".

(This principle, of course, would not operate in reverse:              an

action against an individual who is            not a member of such a

corporation   could   not   expose    the    corporation   to   liability.

Needless to say, limiting liability is a primary reason for forming

such a corporation, with procedures for determining who is, and who

is not, a member.)

     It is unnecessary to engage in the difficult, and somewhat

speculative, application of the "indicia of membership" test when

a nonprofit corporation has, or at least should have, a method with

which it can clearly, readily, and easily establish its membership.

The difficulties associated with this indicia test are demonstrated

by the facts presented in this case.        Two of FOE's "members" do not

appear to have joined until after the last lawsuit in this case was

filed. Another's membership is founded on a surprise gift donation

on her behalf by another individual, five years prior to the


                                     10
lawsuit.   Finding membership based upon these facts is troublesome

and most unnecessary.

     In response to the quite legitimate concerns expressed by the

majority of elevating form over substance, I note the substantial

constitutional     requirements    underpinning       this    more    limited,

prudential view of associational standing.           Limiting Hunt is more

than an exercise in formalism or line-drawing;               the "indicia of

membership" test was a means to allow an entity, with certain

membership     characteristics,    to    have     standing   when,    under   a

traditional view, it otherwise could not.           As stated, the same is

not true of a nonprofit corporation such as FOE.

     Obviously, the Article III "case or controversy" requirement

serves many salutary purposes. Not the least of these is ensuring,

as the majority notes, that a party has a stake in the outcome;

this avoids, among other things, frivolous actions, unreasonable

refusals to settle, and proscribed advisory opinions.                Extending

the "indicia of membership" test to cover persons who could—and

should—have been made members by a nonprofit corporation pushes

associational standing to a point beyond the "case or controversy"

requirements and relieves the plaintiff of some of its Article III

standing burden.

     For the foregoing reasons, I am of the view that the district

court   held   correctly   that   FOE    lacked    associational     standing.

Accordingly, I respectfully dissent.




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