author: JORDAN, Circuit Judge

text:
    HARTIG DRUG COMPANY INC., on behalf of itself and all others similarly situated, Appellant v. SENJU PHARMACEUTICAL CO. LTD.; Kyorin Pharmaceutical Co. Ltd.; Allergan Inc.
    No. 15-3289
    United States Court of Appeals, Third Circuit.
    Argued June 13, 2016
    (Filed: September 7, 2016)

      J. Clayton Athey, Prickett Jones & Elliott, 1310 King Street, P.O. Box 1328, Wilmington, DE 19899, Brent W. Landau [ARGUED], Hausfeld, 325 Chestnut — Ste. 900, Philadelphia, PA 19106, Counsel for Appellant
    Stephen B. Brauerman, The Bayard Firm, 222 Delaware Avenue — Ste. 900, Wilmington, DE 19801, William F. Sonder-ieker, Carter Ledyard & Milburn, 2 Wall Street, New York, NY 10005, Counsel for Appellee Senju Pharmaceutical Co. Ltd.

      Sara Kusiak, Jones Day, 250 Vesey Street, New York, NY 10281, Rosanna K. McCalips, Kevin D. McDonald, Jones Day, 51 Louisiana Avenue, NW, Washington, DC 20001, David E. Ross, Benjamin J. Sehladweiler, Ross Aronstam & Moritz, 100 South West Street — #400, Wilmington, DE 19801, Counsel for Kyorin Pharmaceutical Co. Ltd.
    Ashley E. Johnson, M. Sean Royall [ARGUED], Gibson Dunn & Crutcher, 2100 McKinney Avenue — Ste. 1100, Dallas, TX 75201, Mark A. Perry, Lucas C. Townsend, Gibson Dunn & Crutcher, 1050 Connecticut Avenue, NW — 9th FL, Washington, DC 20036, Counsel for Appellee Allergan Inc.
    Scott E. Perwin, Kenny Nachwalter, 1441 Brickell Avenue — Ste. 1000, Miami, FL 33131, Counsel for Amicus Appellants, Walgreen Co., Safeway, Inc., Kroger Co., HEB Grocery Co. LP, Albertsons LLC Barry L. Refsin, Hangley Aronchick Se-gal Pudlin & Schiller, One Logan Square, 18th & Cherry Sts. — 27th FL, Philadelphia, PA 19103, Counsel for Amicus Appellant Rite Aid Corp.
    Before: AMBRO, JORDAN, and GREENBERG, Circuit Judges
   OPINION OF THE COURT

JORDAN, Circuit Judge

This appeal arises from a putative class action in which Hartig Drug Company Inc. (“Hartig”) filed a complaint against Senju Pharmaceutical Co., Ltd. (“Senju”), Kyorin Pharmaceutical Co., Ltd. (“Kyorin”), and Allergan Inc. (“Allergan”) (collectively, the “Defendants”), alleging antitrust violations involving medicated eyedrops manufactured by the Defendants. Hartig argues that the Defendants’ wrongful suppression of generic competition resulted in supra-competitive pricing of those eyedrops. Although not a direct purchaser of the medications, Hartig claims it has standing to sue because of an assignment of rights from AmerisourceBergen Drug Corporation (“AmeriSource”) which is a direct purchaser.

The District Court dismissed Hartig’s complaint under Federal Rule of Civil Procedure 12(b)(1) for lack of subject matter jurisdiction. In its opinion, the Court ruled that an anti-assignment clause in a distribution agreement between Allergan and AmeriSource barred any assignment of antitrust claims from AmeriSource to Hartig, leaving Hartig without standing to sue and divesting the Court of subject matter jurisdiction. We conclude that the District Court erred in treating antitrust standing as an issue of subject-matter jurisdiction. Accordingly, we will vacate and remand for further proceedings.

I. Background

A. Factual Background

Kyorin researchers developed an antibiotic called gatifloxacin and, in 1990, were awarded a patent on the drug. In 1997, Kyorin licensed Senju to develop, manufacture, and commercialize ophthalmic solutions containing gatifloxacin. Later, in 2001, Senju researchers obtained U.S. Patent No. 6,333,045 (the “’045 Patent”) claiming aqueous liquid pharmaceutical compositions containing gatifloxacin and methods of utilizing them. The named inventors on that patent assigned their rights to Kyorin and Senju jointly.

Kyorin and Senju also “licensed to Aller-gan the right — including a license under the ’045 [P]atent — to market aqueous liquid gatifloxacin ophthalmic products in the United States.” (A33.) Allergan filed New Drug Applications (“NDAs”) with the Food and Drug Administration for a 0.3% gatifloxacin solution (branded “Zymar”), and for a 0.5% gatifloxacin solution (branded “Zymaxid”); those NDAs were approved in 2003 and 2010 respectively. Am-eriSource subsequently began purchasing Zymar and Zymaxid eyedrops directly from the Defendants and selling them to Hartig, an Iowa-based drug store chain.

Hartig alleged that the Defendants engaged in a number of illegal practices to prevent or delay the introduction into the market of generic alternatives to Zymar and Zymaxid. First, the Defendants filed a baseless lawsuit against another pharmaceutical company, Apotex, claiming patent infringement and delaying FDA approval of that company’s generic version of Zy-mar. Next, the Defendants engaged in so-called “product hopping” (A35) — discouraging doctors from prescribing generic alternatives to the original 0.3% Zymar eye-drops by phasing out that product in favor of “new” 0.5% Zymaxid eyedrops. To buy time for that shift in marketing strategy, the Defendants prolonged the Apotex litigation by filing a frivolous motion for a new trial. They also asked the United States Patent and Trademark Office to reexamine claims of the ’045 Patent, but failed to disclose material information both from the trial record in the Apotex case and from their own expert that undermined their reexamination claims. After the FDA approved Apotex’s 0.3% gatiflox-acin eyedrops, the Defendants sued Apo-tex a second time. Although the courts .ultimately held that the Defendants’ suit was barred by claim preclusion, Apotex was deterred from launching a generic competitor to Zymar. Since then, the Defendants have filed numerous lawsuits against competing drug manufacturers to bar the market entry of generic equivalents to both Zymar and Zymaxid.

B. Procedural Background

Hartig filed its complaint in the United States District Court for the District of Delaware on June 6, 2014. Styled as a class action, the complaint alleged that, were it not for the Defendants’ violations of the Sherman Antitrust Act, generic versions of the gatifloxacin eyedrops would have been sold after Kyorin’s patent on gatifloxacin expired in 2010. Hartig alleged that the “Defendants’ unlawful scheme effectively denied direct purchasers of Zymar and Zymaxid the benefits of competition and of less expensive, generic versions. As a result, [Hartig] and members of the Class ... -have paid supracom-petitive prices for Zymar and Zymaxid and [Zymaxid’s] generic equivalent ].” (A24.)

The complaint acknowledged that Hartig was only an indirect purchaser of the two gatifloxacin products and that Hartig obtained the products through Am-erisource, a direct purchaser. That point was — and is — significant because, under the so-called “direct purchaser rule” recognized in Illinois Brick Co. v. Illinois, 431 U.S. 720, 97 S.Ct. 2061, 52 L.Ed.2d 707 (1977), a direct purchaser of a product has standing to sue under federal antitrust statutes whereas an indirect purchaser does not. Nevertheless, the complaint alleged that AmeriSource had entered an assignment agreement with Hartig that

conveyed, assigned, and transferred to Hartig all of its rights, title and interest in and to all causes of action it may have against Defendants under the antitrust laws of the United States or of any state arising out of or relating to Ameri-source’s purchase of Zymar and Zymax-id to the extent such product was subsequently resold to Hartig... .

(A24-25 ¶ 9.)

Allergan responded to Hartig’s suit by filing a motion to dismiss under Federal Rule of Civil Procedure 12(b)(1) for lack of subject matter jurisdiction. Kyorin and Senju jointly filed a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. Aller-gan’s 12(b)(1) motion argued that Hartig lacked “[sjtanding to sue under the antitrust laws” because an anti-assignment clause in the Distribution Services Agreement (“DSA”) that Allergan had with Am-eriSource expressly prohibited either party from assigning the agreement or related rights and obligations without prior written consent from the other party. Hartig v. Senju, et al., D. Del., CA No. 14-719-SLR Docket Item (“D.I.”) 15, at 4; see id., at 5-9. The DSA is not mentioned in Hartig’s complaint, but it was appended to Aller-gan’s motion to dismiss as an exhibit to a declaration from one of Allergan’s corporate officers, a Mr. Kafer. The anti-assignment clause of the DSA provides as follows:

This Agreement may not be assigned by either party without the prior written consent of the other party. Notwithstanding the foregoing, either party may assign its rights and obligations hereunder without the consent of the other party to a subsidiary or affiliate or to an entity which purchases all or substantially all of the assigning party’s stock or assets or acquires control of the assigning party, whether by merger, consolidation or any other means.

(A108-109 § 14.b.) The Kafer declaration stated that Hartig was not a direct purchaser from Allergan and that Ameri-Source had not sought or obtained written consent from Allergan for the alleged assignment, as purportedly required by the DSA’s anti-assignment clause.

After briefing on both the 12(b)(1) and 12(b)(6) motions, the District Court granted Allergan’s 12(b)(1) motion and, in an order dated August 19, 2015, dismissed the action for lack of subject matter jurisdiction. The District Court relied on the anti-assignment clause in the DSA to conclude that Hartig lacked standing, reasoning that the clause’s prohibition applied to antitrust claims and therefore barred the assignment of the very claims on which Hartig’s standing relied. Hartig timely appealed. Later, a group of seven drug retailers joined the appeal as amici curiae in support of Hartig.

II. DISCUSSION

A. The Appropriateness of Review under Rule 12(b)(1)

The parties have not challenged the District Court’s decision to address antitrust standing as a question of subject matter jurisdiction. Rather, it is the amici who contend that Allergan’s anti-assignment argument implicated only antitrust standing and that such standing is different from Article III standing, so that the District Court’s subject matter jurisdiction has never been rightly in question.

An amicus normally “cannot expand the scope of an appeal with issues not presented by the parties on appeal,” Nuveen Mun. Tr. ex rel. Nuveen High Yield Mun. Bond Fund v. WithumSmith Brown, P.C., 692 F.3d 283, 300 n.10 (3d Cir. 2012), at least not “in cases where the parties are competently represented by counsel,” id. (quoting Universal City Studios, Inc. v. Corley, 273 F.3d 429, 445 (2d Cir. 2001)). And yet, federal courts “have an independent obligation to determine whether subject-matter jurisdiction exists, even in the absence of a challenge from any party.” Arbaugh v. Y & H Corp., 546 U.S. 500, 514, 126 S.Ct. 1235, 163 L.Ed.2d 1097 (2006); see also id. (affirming that “subject matter jurisdiction, because it involves a court’s power to hear a case, can never be forfeited or waived”) (internal quotation marks omitted). A court’s non-waivable obligation to inquire into its own jurisdiction is most frequently exercised in the negative — that is, by questioning whether federal jurisdiction exists even when all parties assume that it does. But “federal courts [also] have a strict duty to exercise the jurisdiction that is conferred upon them by Congress,” Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 716, 116 S.Ct. 1712, 135 L.Ed.2d 1 (1996), and “have no more right to decline the exercise of jurisdiction which is given, than to usurp that which is not,” id. (quoting Cohens v. Virginia, 19 U.S. (6 Wheat.) 264, 404, 5 L.Ed. 257 (1821)). “[S]ubject-matter delineations must be policed by the courts on their own initiative,” irrespective of whether that policing of jurisdictional authority is voiced in the positive or the negative. Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 583, 119 S.Ct. 1563, 143 L.Ed.2d 760 (1999). Thus, regardless of the acquiescence or wishes of the parties, we must question whether the District Court properly treated antitrust standing as a jurisdictional issue under Rule 12(b)(1).

We recently confronted a similar jurisdictional issue — presented in a similar posture — in Group Against Smog and Pollution, Inc. v. Shenango Inc., 810 F.3d 116 (3d Cir. 2016). In that case,' the District Court treated the “diligent prosecution” bar of 42 U.S.C. § 7604(b)(1)(B) as a limitation on its subject matter jurisdiction, and therefore dismissed the action under Rule 12(b)(1). Id. at 121. On appeal, amici curiae “raise[d] the issue of whether the diligent prosecution bar is jurisdictional and appropriately decided through a Rule 12(b)(1) motion to dismiss for lack of subject matter jurisdiction, or whether the diligent prosecution bar is nonjurisdictional and should be decided through a Rule 12(b)(6) motion to dismiss for failure to state a claim.” Id. at 122. We noted that-the appellants themselves had not raised that argument but had proceeded under the assumption that the bar was jurisdictional. Id. at 122 n.5. Nevertheless, we affirmed our independent obligation to “raise and decide jurisdictional questions that the parties either overlook or elect not to press,” id. (quoting Henderson ex rel. Henderson v. Shinseki, 562 U.S. 428, 434, 131 S.Ct. 1197, 179 L.Ed.2d 159 (2011)), an obligation made all the more significant because “branding a rule as going to a court’s subject-matter jurisdiction alters the normal operation of our adversarial system,” id. at 122 (internal quotation marks and brackets omitted). We ultimately concluded that the District Court erred in treating the diligent prosecution bar as a jurisdictional limitation, and therefore should have dealt with the motion to dismiss under Rule 12(b)(6) rather than Rule 12(b)(1). Id. at 132.

Similarly, the amici here argue that the District Court erred by addressing Allergan’s motion to dismiss as a factual challenge to jurisdiction under Rule 12(b)(1), and-that the Court should have addressed the motion under Rule 12(b)(6) for failure to state a claim. The distinction between Rules 12(b)(1) and 12(b)(6) is important because the 12(b)(6) standard affords significantly more protections to a nonmovant. “In deciding a Rule 12(b)(6) motion, a court ... consider^] only the complaint, exhibits attached to the complaint, matters of public record, as well as undisputedly authentic documents if the complainant’s claims are based upon these documents.” Mayer v. Belichick, 605 F.3d 223, 230 (3d Cir. 2010). Moreover, the court is “required to accept as true all allegations in the complaint and all reasonable inferences that can be drawn from them after construing them in the light most favorable to the nonmovant.” Foglia v. Renal Ventures Mgmt., LLC, 754 F.3d 153, 154 n.1 (3d Cir. 2014) (quotation marks and citations omitted).

A Rule 12(b)(1) attack can be a very different matter. A facial 12(b)(1) challenge, which attacks the complaint on its face without contesting its alleged facts, is like a 12(b)(6) motion in requiring the court to “consider the allegations of the complaint as true.” Petruska v. Gannon Univ., 462 F.3d 294, 302 n.3 (3d Cir. 2006) (internal quotation marks omitted). But a factual 12(b)(1) challenge attacks allegations underlying the assertion of jurisdiction in the complaint, and it allows the defendant to present competing facts. Constitution Party of Pa. v. Aichele, 757 F.3d 347, 358 (3d Cir. 2014). When considering a factual challenge, “the plaintiff [has] the burden of proof that jurisdiction does in fact exist,” the court “is free to weigh the evidence and satisfy itself as to the existence of its power to hear the case,” and “no presumptive truthfulness attaches to [the] plaintiffs allegations.... ” Mortensen v. First Fed. Sav. & Loan Ass’n, 549 F.2d 884, 891 (3d Cir. 1977). And, when reviewing a factual challenge, “a court may weigh and consider evidence outside the pleadings.” Constitution Party of Pa., 757 F.3d at 358 (internal quotation marks omitted). Therefore, a 12(b)(1) factual challenge strips the plaintiff of the protections and factual deference provided under 12(b)(6) review. See, e.g., Davis v. Wells Fargo, 824 F.3d 333, 348-50 (3d Cir. 2016).

In arguing the motions to dismiss in the District Court, no one questioned whether Allergan’s attack on Hartig’s antitrust standing should have been brought under Rule 12(b)(6) instead of as a matter of subject-matter jurisdiction under Rule 12(b)(1). As mentioned above, it is the amici who have raised the question on appeal. Remarkably, Hartig neglects to address the argument at all, except to acknowledge that the amici have raised it. Even at oral argument, when squarely faced with the question, Hartig’s counsel did not ask for consideration under 12(b)(6) but voiced an apparent preference to confront Allergan’s 12(b)(1) challenge head-on — that is, by reaching the issue of whether the DSA precluded the assignment of Amerisource’s antitrust causes of action. Nevertheless, in keeping with our independent obligation to consider the boundaries of subject matter jurisdiction, we conclude that the District Court should have treated antitrust standing not as an Article III jurisdictional issue, but rather as a merits issue, and thus should have resolved the motion to dismiss under Rule 12(b)(6) rather than Rule 12(b)(1).

B. Article III Standing versus Antitrust Standing

To meet the “irreducible constitutional minimum” of Article III standing, a plaintiff invoking federal jurisdiction bears the burden of establishing three elements, as set forth in the now familiar case of Lujan v. Defenders of Wildlife, 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). First, it must establish that it has suffered an “injury in fact,” meaning a concrete and particularized invasion of a legally protected interest. Id. Second, it must establish a “causal connection between the injury and the conduct complained of — the injury has to be fairly traceable to the challenged action of the defendant, and not the result of the independent action of some third party not before the court.” Id. (internal quotation and editorial marks omitted). Third, it must show a likelihood “that the injury will be redressed by a favorable decision.” Id. at 561, 112 S.Ct. 2130 (internal quotation marks omitted). Article III standing is essential to federal subject matter jurisdiction and is thus “a threshold issue that must be addressed before considering issues of prudential standing.” Miller v. Nissan Motor Acceptance Corp., 362 F.3d 209, 221 n.16 (3d Cir. 2004) (citation omitted).

In a case like this, even after a plaintiff has established Article III standing, antitrust standing remains as a prerequisite to suit, “ ‘focus[ing] on the nature of the plaintiffs alleged injury,’ [and] asking ‘whether it is of the type that the antitrust statute was intended to forestall.’ ” Barton & Pittinos, Inc. v. Smith-Kline Beecham Corp., 118 F.3d 178, 181 (3d Cir. 1997) (quoting Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 538, 540, 103 S.Ct. 897, 74 L.Ed.2d 723 (1983)).

If the injury is not of the requisite type, even though the would-be plaintiff may have suffered an injury as a result of conduct that violated the antitrust laws, he or she has no standing to bring a private action under the antitrust laws to recover for it.... Therefore, the plaintiff might be able to sue under a different statute or common law rule ... but the plaintiff [would have] no standing to sue under the antitrust laws.

Id.

That Article III standing and antitrust standing both employ the term “standing” tends to confuse matters. The two concepts are distinct, with the former implicating a court’s subject matter jurisdiction and the latter affecting only the plaintiffs ability to succeed on the merits. In Ethypharrn S.A. France v. Abbott Laboratories, we explained that Article III standing is of constitutional and hence jurisdictional consequence, while antitrust standing is not:

Constitutional standing is augmented by consideration of prudential limitations. For plaintiffs suing under federal antitrust laws, one of the prudential limitations is the requirement of antitrust standing. It does not affect the subject matter jurisdiction of the court, as Article III standing does, but prevents a plaintiff from recovering under the antitrust laws.

707 F.3d 223, 232 (3d Cir. 2013) (internal quotation marks, • footnotes, and citations omitted). The difference between Article III standing and antitrust standing is apparent from the Supreme Court’s explanation of the direct purchaser rule in Illinois Brick, which recognized that, although indirect purchasers “may have been actually injured by antitrust violations” through passed-on overcharges, the “legislative purposefs]” un'ilerlying the antitrust statutes would still be better served by limiting recovery to the direct purchasers paying those overcharges in the first instance. 431 U.S. at 746, 97 S.Ct. 2061; see generally id. at 737-47, 97 S.Ct. 2061. Thus, the direct purchaser rule represents a policy decision intended to aid the purposes of the antitrust statutes and does not speak to whether there is an Article III case or controversy.

Sometimes antitrust standing is discussed in terms of “statutory .standing.” See Sullivan v. DB Invs., Inc., 667 F.3d 273, 307 n.35 (3d Cir. 2011) (en banc) (clarifying that the term “statutory standing” refers “to the possession of a viable claim or right to relief, not to a jurisdictional requirement”). Again, however, labels can be misleading. A lack of “statutory standing” means the absence of a valid cause of action under a statute, but it “does not implicate subject-matter jurisdiction, i.e., the court’s statutory or constitutional power to adjudicate the case.” Lexmark Int’l, Inc. v. Static Control Components, Inc., — U.S. -, 134 S.Ct. 1377, 1387 n.4,188 L.Ed.2d 392 (2014) (original emphasis) (internal quotation marks omitted). “Accordingly, statutory standing is simply another element of proof for an antitrust claim, rather than a predicate for- asserting a claim in the first place.” Sullivan, 667 F.3d at 307. In the end, it does not matter “whether the [antitrust] standing inquiry is characterized as ‘prudential’ or ‘statutory’ ... because neither deprives us of Article III jurisdiction and both bar a plaintiffs ability to recover.” Ethypharm, 707 F.3d at 232 n.17.

At oral argument before' us, the Defendants continued to press the position that the DSA’s anti-assignment clause implicated Article III standing. But that is simply not so. Allergan’s motion to dismiss under Rule 12(b)(1) was always premised, at bottom, on Hartig’s purported lack of antitrust standing. True, Allergan framed its 12(b)(1) motion in terms of Article III standing, referring to the “case-or-controversy requirement of Article III.” D.I. 15, at 4 (quoting Lujan, 504 U.S. at 560, 112 S.Ct. 2130). But the substance of Aller-gan’s argument focused solely on the Supreme Court’s holding in Illinois Brick that an indirect purchaser lacks “[standing to sue under the antitrust laws.” Id.

We have repeatedly interpreted Illinois Brick and its progeny as addressing not the threshold question of whether an indirect purchaser has Article III standing to sue in federal court at all, but rather the subsequent question of whether such a purchaser has standing to recover under federal antitrust statutes. See, e.g., Warren Gen. Hosp. v. Amgen Inc., 643 F.3d 77, 79 (3d Cir. 2011) (“In Illinois Brick, the Supreme Court held that only direct purchasers have standing under Section 4 of the Clayton Act.”); Howard Hess Dental Labs. Inc. v. Dentsply Int’l, Inc., 424 F.3d 363, 366 n.2 (3d Cir. 2005) (“Illinois Brick determined that direct purchasers are the only parties ‘injured’ in a manner that permits them to recover damages. It thus held that indirect purchaser plaintiffs do not have statutory standing to recover damages under Section 4 of the Clayton Act.”) (internal citations omitted); Merican, Inc. v. Caterpillar Tractor Co., 713 F.2d 958, 963 (3d Cir. 1983) (identifying Illinois Brick as recognizing “that there are certain classes of plaintiffs who, although able to trace an injury to an antitrust violation, are generally not within the group of private attorneys general Congress created to enforce the antitrust laws under section 4”) (internal quotation marks omitted).

Forced to confront the distinction between constitutional and antitrust standing, the Defendants now attempt to change tlie discussion by arguing that Hartig’s assertion of antitrust standing via assignment was actually a fatal misstep, somehow undermining its ability to establish constitutional standing. In a supplemental filing, they endeavor to reformulate the arguments that Allergan made in the 12(b)(1) motion in the District Court, saying,

Had Hartig sued for its own injury — the alleged overcharge it paid to Ameri-Source - Allergan would have moved to dismiss for lack of antitrust standing under Rule 12(b)(6). Because Hartig sued for someone else’s injury — the alleged overcharge paid by AmeriSource— Allergan properly moved under Rule 12(b)(1) advancing a constitutional standing argument.

(Defendants’ Letter Dated June 24, 2016, at 2.) This is a wholly new argument. Allergan’s motion to dismiss was always premised upon Hartig’s lack of antitrust standing as an indirect purchaser, which was an Illinois Brick argument and not a constitutional challenge to standing. See D.I. 15, at 4-5 (“Indirect purchasers ... lack standing.” (citing Illinois Brick, 431 U.S. at 746, 97 S.Ct. 2061)); see also id. at 5 n.l (urging that, even if the District Court were to consider Allergan’s motion under Rule 12(b)(6), the Court could still consider the DSA “in deciding whether Hartig satisfies the indispensable element of antitrust standing” (emphasis added)).

But, even ignoring that none of the Defendants previously made the argument that the assignment from AmeriSource to Hartig created a problem of constitutional magnitude, the substance of the Defendants’ new argument is unpersuasive. For purposes of constitutional standing, the underlying questions raised by the argument are captured in the first two of the well-known Lujan factors. In particular, those questions are whether Hartig has suffered an injury in fact and whether that injury is fairly traceable to the Defendants. On these matters, the distinction between direct and indirect purchasers is of little relevance.

Hartig certainly has alleged such an injury. Its complaint asserted that it bought Zymar and Zymaxid from AmeriSource, which in turn purchased those products from the Defendants. (A24-25.) Thus, notwithstanding that the “direct purchaser rule” from Illinois Brick would disqualify Hartig from serving as a private attorney general under the antitrust statutes, Hartig’s allegations are that it was in fact harmed by the downstream effects of the Defendants’ anticompetitive behavior. Indeed, while the Defendants argued that Hartig did not assert its own injuries, in the same breath they recognized that Har-tig has “alleged” it paid “overeharge[s]” for the Zymar and Zymaxid products. (Defendants’ Letter Dated June 24, 2016, at 2.) The complaint plainly and repeatedly emphasizes that, as a result of the Defendants’ anticompetitive behavior in suppressing generic equivalents of Zymar and Zymaxid, Hartig has paid inflated prices for those products. Those allegations, together with the complaint’s specific descriptions of anticompetitive behavior indulged in by the Defendants, are sufficient to establish a judicially redressable injury-in-fact that is fairly traceable to the Defendants — or, in other words, an Article III case or controversy.

We recognize that the conflation of Article III standing with antitrust standing may arise, at least in part, from those doctrines’ overlap in both the factual questions they can involve and in their terminology. Nevertheless, we again caution against expanding Rule 12(b)(1) “beyond its proper purpose,” and reaffirm that, in general, “Rule 12(b)(6) — with its attendant procedural and substantive protections for plaintiffs — is the proper vehicle for the early testing of a plaintiff’s claims.” Davis, 824 F.3d at 348-49. As we recently reaffirmed in Davis v. Wells Fargo, “dismissal via a Rule 12(b)(1) factual challenge to standing should be granted sparingly,” id. at 350, and it is only the “unusual” case that will be properly dismissed under 12(b)(1) “when the facts necessary to succeed on the merits are at least in part the same as must be alleged or proven to withstand jurisdictional attacks,” id. (citing Mortensen, 549 F.2d at 892) (internal quotation marks omitted). In this case, Hartig has not alleged claims “so .... completely devoid of merit as to not involve a federal controversy.” Kulick v. Pocono Downs Racing Ass’n, Inc., 816 F.2d 895, 899 (3d Cir. 1987) (quoting Oneida Indian Nation v. County of Oneida, 414 U.S. 661, 666, 94 S.Ct. 772, 39 L.Ed.2d 73 (1974)). On the contrary, it had Article III standing sufficient to give the District Court subject matter jurisdiction, and thus a dismissal under Rule 12(b)(1) was not legitimately in play.

C. Review Under Rule 12(b)(6) Rather than Rule 12(b)(1)

Because “we may affirm on any basis supported by the record,” we next consider whether the District Court could have granted Allergan’s motion to dismiss under the Rule 12(b)(6) framework. Davis, 824 F.3d at 350. The Defendants admit that Allergan, in styling its Rule 12(b)(1) argument as one of constitutional standing, “did not make an argument in the alternative under Rule 12(b)(6).” (Defendants’ Letter Dated June 24, 2016, at 2 n.l.) Even had the Court treated the 12(b)(1) motion in the alternative as the 12(b)(6) motion that it actually was, the decision would nonetheless be unsound because the Court relied upon the DSA, whereas it should have measured Allergah’s motion primarily “against the bare allegations of the complaint.” JM Mech. Corp. v. HUD, 716 F.2d 190, 196-97 (3d Cir. 1983). As mentioned above, for purposes of Rule 12(b)(6), a court “must consider only the complaint, exhibits attached to the complaint, matters of public record, as well as undisputedly authentic documents if the complaint’s claims are based upon these documents.” Mayer, 605 F.3d at 230.

Allergan has argued that the DSA can be considered in a 12(b)(6) analysis because it is a document “integral to or explicitly relied upon in the complaint.” D.I. 15, at 5 n.l (quoting Warren Gen. Hosp., 643 F.3d at 82 n.4). Not so. The DSA was never mentioned in Hartig’s complaint, was not attached to the complaint, was not a matter of public record, and did not form a basis for any of the claims. Although Allergan cites authority suggesting that the District Court could have considered the DSA “to determine whether the plaintiff was a direct purchaser,” id. Hartig’s complaint readily acknowledged that the company was an indirect purchaser, and instead predicated its antitrust standing on an assignment from Am-eriSource, itself a direct purchaser. Rule 12(b)(6) requires that those specific allegations be accepted as true and viewed in the light most favorable to Hartig. Thus, we cannot say that the DSA was integral to Hartig’s claims. It is integral only to the Defendants’ attack on those claims. Because the DSA is extrinsic to the complaint, the District Court could not have properly considered it for purposes of a Rule 12(b)(6) motion to dismiss, and, without the DSA, Allergan’s entire challenge to the validity of Amerisource’s assignment lacks a foundation.

For the District Court to have considered documents that, like the DSA, lie outside the bounds of the complaint, it would have had to do so by “converting the 12(b)(6) motion] into a summary judgment proceeding and affording] the plaintiff a reasonable opportunity to present all material made pertinent to a summary judgment motion by Rule 56.” JM Mech. Corp., 716 F.2d at 197; see also Rose v. Barbie, 871 F.2d 331, 342 (3d Cir. 1989) (“We have held that it is reversible error for a district court to convert a motion under Rule 12(b)(6) ... into a motion for summary judgment unless the court provides notice of its intention to convert the motion and allows an opportunity to submit materials admissible in a summary judgment proceeding or allows a hearing”). Because the District Court considered the DSA under Rule 12(b)(1), none of those procedures were followed. It may be, as the Defendants urge, that “Hartig would not have objected to the district court considering the DSA on a Rule 12(b)(6) motion.” (Defendants’ Letter Dated June 24, 2016, at 2 n.l.) Based on the record before us, though, that assent is still theoretical: Allergan did not proffer its anti-assignment argument in the alternative as grounds for dismissal under Rule 12(b)(6); the District Court did not consider the DSA under that framework; and Hartig thus had no occasion to formally waive any of its 12(b)(6) protections or to respond, after proper notice, to a converted motion for summary judgment. We will not affirm on such a record, but instead will remand so that the parties may have the opportunity to make their arguments under the proper procedural framework, with its attendant safeguards.

Once the correct procedures have been followed, the District Court may have occasion to interpret the effect of the DSA. Therefore, considerations of judicial economy merit our noting some doubt about the Court’s interpretation of the DSA as barring the assignment of antitrust causes of action.

In light of the DSA’s choice-of-law provision, the District Court correctly looked to Pennsylvania law to determine the DSA’s effect, but it may have misstepped in its choice of interpretive principles. It cited Crawford Central School District v. Commonwealth, 585 Pa. 131, 888 A.2d 616, 623 (2005), for the idea that “an assignment will ordinarily be construed in accordance with the rules governing contract interpretation and the circumstances surrounding the execution of the assignment document.” In Pennsylvania, the “[consideration of the surrounding circumstances” does not appear to be a general principle of contract law, U.S. Nat’l Bank in Johnstown v. Campbell, 354 Pa. 483, 47 A.2d 697, 700 (1946), but rather has developed as a principle of interpretation specific to assignments. See Horbal v. Moxham Nat’l Bank, 548 Pa. 394, 697 A.2d 577, 583 (2001) (“In interpreting an assignment, it will ordinarily be construed in accordance with the rules of construction governing contracts and the circumstances surrounding the execution of the assignment document.”)- Perhaps because this case implicated an assignment, the District Court considered not only the language of the DSA, but also expressly considered the “circumstances” surrounding that agreement. (All n.4.) The problem with that approach is that the Court was not interpreting an assignment. The DSA, not the assignment agreement, was under scrutiny, and the DSA is simply a contract, not an assignment. Thus, it seems likely that Pennsylvania’s general principles of contract interpretation should have applied, which focus on the “clear and unambiguous” language of an agreement “as manifestly expressed, rather than as, perhaps, silently intended.” Amoco Oil Co. v. Snyder, 505 Pa. 214, 478 A.2d 795, 798 (1984) (original emphasis) (internal quotation marks omitted); see also LJL Transp., Inc. v Pilot Air Freight Corp., 599 Pa. 546, 962 A.2d 689, 647 (2009) (“When the words of an agreement are clear and unambiguous, the intent of the parties is to be ascertained from the language used in the agreement, which will be given its commonly accepted and plain meaning.” (internal citations omitted)). But that is a question for the District Court to address, if necessary, on remand.

Y. Conclusion

We part from the District Court in its treatment of antitrust standing as a factual challenge to subject matter jurisdiction under Rule 12(b)(1), and we reject the proposition that the Court could have considered the extrinsic evidence of the DSA’s anti-assignment clause under Rule 12(b)(6). The case should not have been dismissed pursuant to Allergan’s Rule 12(b)(1) motion. Therefore, we will vacate the order of dismissal and remand for further proceedings.

      . As explained in greater detail hereafter, it was error for the District Court to dismiss the action under Rule 12(b)(1). Treating the motion to dismiss as one under Rule 12(b)(6), we recount the facts as alleged by the non-mov-ant, Hartig, accepting them as true. Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009).

      . We deliberately refer to the Defendants collectively in describing the alleged anticompet-itive conduct, as Hartig claims that all the Defendants, and not merely Allergan, engaged in such conduct.

      . The complaint alleges that Apotex, when it filed its Abbreviated New Drug Application ("ANDA”) for a 0.3% gatifloxacin ophthalmic solution, certified that it would not market that product until Kyorin’s patent expired on June 15, 2010, and Apotex notified the Defendants that its proposed ANDA product would not infringe on any valid claim of the separate '045 Patent. The complaint also alleges that the Defendants knew that the claims of the '045 Patent were invalid as obvious.

      .Specifically, Hartig alleged that "Defendants’ anticompetitive actions delayed the entry of any generic competition from the market for over three years (at least from June 15, 2010 until October 3, 2013), and has limited generic competition even today to a single generic competitor offering a generic to Zy-maxid only.” (A48.)

      . The Defendants contend that Hartig failed to establish the existence of the assignment agreement. Because, as we ultimately conclude, the District Court should have considered Allergan’s motion to dismiss under Rule 12(b)(6) rather than Rule 12(b)(1), the Court was obligated to accept the complaint’s factual allegations as true and view them in the light most favorable to Hartig. See Foglia v. Renal Ventures Mgmt., LLC, 754 F.3d 153, 154 n.l (3d Cir. 2014). Thus, even without the introduction of a written copy of the assignment agreement, the complaint's allegation that an assignment of antitrust rights had occurred suffices at this stage of the proceedings.

      . Allergan subsequently joined that 12(b)(6) motion as well.

      . The amici are Walgreen Co., The Kroger Co., Safeway Inc., Albertson’s LLC, HEB Grocery Company LP, CVS Health Corporation, and Rite Aid Corporation.

      . The District Court’s subject matter jurisdiction is the primary issue in this appeal. We have appellate jurisdiction to review the final decision of the District Court pursuant to 28 U.S.C. § 1291. The question of whether the District Court had subject matter jurisdiction is an issue of law that we review de novo. In re Phar-Mor, Inc. Sec. Litig., 172 F.3d 270, 273 (3d Cir. 1999). Likewise, the determination of a contract's legal effect is a question of law subject to plenary review. Ram Constr. Co. v. Am. States Ins. Co., 749 F.2d 1049, 1053 (3d Cir. 1984).

      . Indeed, Allergan's legal argument on this point was as follows:
      Standing to sue under the antitrust laws is limited to parties that were direct purchasers of the product at issue. Ill. Brick, 431 U.S. at 746, 97 S.Ct. 2061. Indirect purchasers — that is, parties who allegedly paid an overcharge that was passed on by a party that made a purchase directly from the defendants — lack standing.
      D.I. 15, at 4-5.

      . The third element from Lujan, redressibility, is not raised by the Defendants’ new Article III standing argument.

      . We are careful not to say that the distinction between direct and indirect purchasers is wholly irrelevant to the question of Article III standing, since an indirect purchaser could be so remote as to be unable to meet its burden of establishing either that it had suffered an injury in fact or that such injury was fairly traceable to the defendant's actions.

      . That disqualification may or may not be overcome by the alleged assignment from Am-eriSource. That is a question for the District Court in the first instance.

      . See A24 ¶ 8 ("Defendants' unlawful scheme effectively denied direct purchasers of Zymar and Zymaxid the benefits of competition and of less expensive, generic versions. As a result, Plaintiff [Hartig] ... ha[s] paid supracompetitive prices for Zymar and Zy-maxid and its generic equivalents.”); A48 ¶ 124 ("Defendants’ anticompetitive actions resulted in Plaintiff [Hartig] ... paying higher prices for gatifloxacin ophthalmic formulations than [it] would have paid if a generic equivalent to Zymar and Zymaxid had been available throughout the class period.”); A51 ¶ 141 (same); A50 ¶¶ 136-37 (alleging that, "[a]s a result of the Defendants' illegal conduct,” Hartig and other "purchasers of Zymar and Zymaxid have sustained substantial losses and damage to their business and property in the form of overcharges”); A52 ¶ 143 (asserting that, "as a direct and proximate result of Defendants' wrongful conduct,” Hartig and other class members "paid artificially inflated prices for Zymar and Zymaxid and were deprived of the benefits of earlier and robust competition from cheaper generic versions of those products”); A55-56 ¶¶ 164-65 (claiming that, "[b]ut for Defendants' unlawful actions,” Hartig "would have benefitted from the presence of [] low-cost generic ... alternative^]” to Zymar and Zymaxid that the Defendants’ embattled competitors "could and would have supplied”); A57 ¶¶ 177-78 (same); A59 ¶¶ 190-91 (same).

      .We have repeatedly cautioned against allowing a Rule 12(b)(1) motion to dismiss for lack of subject matter jurisdiction to be turned into an attack on the merits. Caution is necessary because the standards governing >the two rules differ markedly, as Rule 12(b)(6) provides greater procedural safeguards for plaintiffs than does Rule 12(b)(1). First, proceeding under Rule 12(b)(1) inverts the burden of persuasion. When presenting a Rule 12(b)(6) motion, the defendant bears the burden to show that the plaintiff has not stated a claim. But under Rule 12(b)(1), the plaintiff must prove the court has subject matter jurisdiction. The two rules also treat the complaint’s factual allegations very differently. Unlike Rule 12(b)(6), under which a defendant cannot contest the plaintiff's factual allegations. Rule 12(b)(1) allows a defendant to attack the allegations in the complaint and submit contrary evidence in its effort to show that the court lacks jurisdiction. Thus, improper consideration of a merits question under Rule 12(b)(1) significantly raises both the factual and legal burden on the plaintiff. Given the differences between the two rules, a plaintiff may be prejudiced if what is, in essence, a Rule 12(b)(6) challenge to the complaint is treated as a Rule 12(b)(1) motion.

        Davis, 824 F.3d at 348-49 (internal citations, quotation marks, and brackets omitted). Because Rule 12(b)(6) is the preferred mechanism for the early testing of a plaintiff's claims, and because defendants are nevertheless likely to prefer the relaxed standards of Rule 12(b)(1), district courts confronted with arguments framed as 12(b)(1) challenges to jurisdiction should approach those arguments with particular care.

      . In fact, for purposes of this appeal, the DSA has been filed separately under seal, and it states at the bottom of every page that it is “confidential” and "not to be shared with any third party.” (A100-15.)

      . The complaint does not mention Ameri-Source at all except for the single paragraph alleging that (1) AmeriSource "directly purchased branded Zymar and Zymaxid from Defendants” (A25 ¶ 9), (2) Hartig purchased those same drugs from AmeriSource, and (3) AmeriSource assigned its antitrust rights to Hartig.

      . The DSA’s limitation on assignments provides that "[t]his Agreement may not be assigned" without prior written consent, but that "either party may assign its rights and obligations hereunder" without written consent if the assignment is to a "subsidiary or affiliate." (A108 (emphasis added).) Because Amerisource’s antitrust causes of action arise by statute, there is a serious argument that they do not fall within the DSA's plain language limiting assignment of "rights and obligations hereunder” — that is, they arise by operation of an extrinsic legal regime rather than by contract.


source: Caselaw Access Project

author: FISHER, Circuit Judge. COWEN, Circuit Judge.

license: Public Domain

text:
    Jackie NICHOLS, Appellant v. CITY OF REHOBOTH BEACH; Sam Cooper, Mayor of Rehoboth; Sharon Lynn, City Manager of Rehoboth
    No. 15-3979
    United States Court of Appeals, Third Circuit.
    Argued April 7, 2016
    (Filed: September 7, 2016)

      David L. Finger, Esq. [ARGUED], Finger & Slanina, 1201 Orange Street, One Commerce Center, Suite 725, Wilmington, DE 19801, Counsel for Appellant
    Max B. Walton, I, Esq. [ARGUED], Connolly Gallagher, 267 East Main Street, Newark, Delaware 19711, Matthew F. Boyer, Esq., Ryan P. Newell, Esq., Arthur G. Connolly, III, Esq., Connolly Gallagher, 1000 West Street, The Brandywine Building, Suite 1400, Wilmington, DE 19801, Counsel for Appellees
    Before: FISHER, COWEN, and RENDELL, Circuit Judges.
   OPINION OF THE COURT

FISHER, Circuit Judge.

Jackie Nichols is a resident, property owner, and taxpayer in the City of Reho-both Beach, Delaware. Rehoboth Beach held a special election — open to residents of more than six months — for approval of a $52.5 million bond issue, and the resolution passed. Nichols voted in the election. She then filed this civil action challenging the election and the resultant issuance of bonds. The District Court found that Nichols lacked standing and dismissed the case. The sole issue on appeal is whether Nichols had, as she, claims, municipal taxpayer standing to make such. a challenge. Because Nichols has failed to show an illegal use of municipal taxpayer funds — and therefore cannot establish standing on municipal taxpayer grounds — we will affirm the District Court’s Order.

I.

A.

The facts of this case are simple. On April 27, 2015, the Board of Commissioners of Rehoboth Beach adopted a resolution proposing the issuance of up to $52.5 million in general obligation bonds to finance an ocean outfall project. The resolution followed an initial resolution and a public hearing, as required by Section 40(d)-(e) of Rehoboth Beach’s City Charter. Pursuant to the City Charter, Reho-both Beach held a special election on June 27, 2015, to determine whether it was authorized to borrow funds to finance the project. Rehoboth Beach expended municipal funds on the special election: first, before the election, it used taxpayer funds to place a full-page advertisement in a local newspaper urging the voters to “Vote Yes” in favor of the proposed outfall project; second, the costs of the special election were paid from the Rehoboth Beach treasury.

The Rehoboth Beach City Charter governs the voting procedures for special elections. Section 40(h) of the Charter states the following:

At the said Special Election, every owner or leaseholder, as defined in this Charter, of property, whether an individual, partnership or corporation, shall have one vote and every person who is a bona fide resident of the City of Reho-both Beach, but who is not an owner or leaseholder, as defined in this Charter, of property within the corporate limits of the City of Rehoboth Beach and who would be entitled at the time of holding of the said Special Election to register and vote in the Annual Municipal Election if such Annual Municipal Election were held on the day of the Special Election shall have one vote whether or not such person be registered to vote in the Annual Municipal Election.

Charter of Rehoboth Beach § 40(h) (1963), http://charters.delaware.gov/ rehobothbeach.pdf. Section 40 does not define the term “bona fide resident,” but Section 7 of the Charter, which deals with the manner of holding annual elections, defines the term “resident” as “an individual actually residing and domiciled in the City of Rehoboth Beach for a period of six months immediately preceding the date of the election.” Id. § 7(d).

At the special election, Rehoboth Beach accepted only voters who were either property owners or who had been residents for a minimum of six months. Corporations and other artificial entities that owned property in Rehoboth Beach were also permitted to vote. Nichols alleges that persons who owned several parcels of property in Rehoboth Beach through the ownership of artificial entities were granted one vote for each parcel owned. She further alleges that those who qualified as residents and who owned property were granted two votes. The votes of the special election were tallied, and the majority of eligible voters approved the issuance of the general obligation bonds — 637 votes to 606 votes. Nichols is a property owner in Re-hoboth Beach and voted in the special election.

B.

Nichols filed this action 19 days after the special election vote took place. About a month later, she filed a four-count amended complaint against the City of Re-hoboth Beach, Sam Cooper (mayor of Re-hoboth Beach), and Sharon Lynn (city manager of Rehoboth Beach). In Counts I and II of the amended complaint, Nichols alleged that Rehoboth Beach violated the Fourteenth Amendment by requiring voters to live in, or hold property in, Reho-both Beach for six months before being entitled to vote as residents. In Count III, she alleged that Rehoboth Beach violated the Fourteenth Amendment by allowing property owners to vote more than once. Count IV was a pendent state law claim for “exceeding authority” in which Nichols alleged that Rehoboth Beach had violated Delaware law by purchasing the newspaper advertisement encouraging voters to support the issuance of bonds.

Rehoboth Beach filed a motion to dismiss Nichols’s amended complaint, arguing, among other things, that Nichols lacked standing because, as a resident and property owner, she had voted in the election and had thus suffered no injury. The District Court issued a memorandum opinion and order granting Rehoboth Beach’s motion and dismissing the case for lack of subject matter jurisdiction. The District Court explained:

The court agrees with Defendants that Nichols lacks standing. Initially, the court agrees with Defendants that Nichols is not contesting the expenditure of tax funds, but the legality of the Special Election. Second, the court notes that Nichols suffered no particularized injury as a result of the Special Election. Nichols is a property owner in the city and had the right to vote in the Special Referenda Election. Thus, she lacks the concrete personal injury necessary to bring suit. As a result, the court lacks the subject matter jurisdiction to hear this action.

(App. 19-20.) Having concluded that it lacked subject matter jurisdiction, the District Court did not address any of Reho-both Beach’s remaining arguments. Nichols timely appealed.

II.

“We have jurisdiction pursuant to 28 U.S.C. § 1291 over a dismissal for lack of subject matter jurisdiction, and our review for lack of subject matter jurisdiction is plenary.” Swiger v. Allegheny Energy, Inc., 540 F.3d 179, 180 (3d Cir. 2008).

III.

Nichols argues that the District Court misperceived her allegations and that she has standing — not as a voter but as a municipal taxpayer. She presents two bases upon which we could find that she has municipal taxpayer standing to bring her case. First, she argues that she has standing to challenge the $52.5 million in municipal debt incurred by an allegedly unlawful special election. Second, she contends that she has standing to challenge Rehoboth Beach’s use of municipal funds to hold the special election and to purchase a newspaper advertisement in support of that election. Nichols’s first argument fails because she has not challenged the expenditure of the $52.5 million, merely the special election that approved the issuance of the bonds. Her second argument fails because she has not alleged a direct link between the expenditure of municipal funds and the challenged aspect of the municipal action and because those expenditures were de minimis.

A. Municipal Taxpayer Standing

“Article III of the Constitution limits the judicial power of the United States to the resolution of Cases and Controversies, and Article III standing enforces the Constitution’s case-or-controversy requirement.” Hein v. Freedom From Religion Found., Inc., 551 U.S. 587, 597-98, 127 S.Ct. 2553, 168 L.Ed.2d 424 (2007) (internal quotation marks and alterations omitted). “One of the controlling elements in the definition of a case or controversy under Article III is standing.” Id. at 598, 127 S.Ct. 2553 (internal quotation marks and alterations omitted). The elements necessary for establishing “the irreducible constitutional minimum of standing” under Article III are as follows:

First, the plaintiff must have suffered an injury in fact — an invasion of a legally protected interest which is (a) concrete and particularized, and (b) actual or imminent, not conjectural or hypothetical. Second, there must be a causal connection between the injury and the conduct complained of — the injury has to be fairly traceable to the challenged action of the defendant, and not the result of the independent action of some third party not before the court. Third, it must be likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision.

Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61, 112 S.Ct. 2180, 119 L.Ed.2d 351 (1992) (internal quotation marks, citations, and alterations omitted).

The Supreme Court has roundly rejected federal taxpayer standing noting that a federal taxpayer’s interest “in seeing that Treasury funds are spent in accordance with the Constitution does not give rise to the kind of redressable ‘personal injury’ required for Article III standing.” Hein, 551 U.S. at 599, 127 S.Ct. 2553 (explaining that an “interest in ensuring that [federal] funds are not used by the Government in a way that violates the Constitution” is “too generalized and attenuated to support Article III standing”). This follows from the fact that a federal taxpayer’s

interest in the moneys of the treasury ... is shared with millions of others, is comparatively minute and indeterminable, and the effect upon future taxation, of any payment out of the funds, so remote, fluctuating and uncertain, thát no basis is afforded for an appeal to the preventive powers of a court of equity.

Frothingham v. Mellon, decided with Massachusetts v. Mellon, 262 U.S. 447, 487, 43 S.Ct. 597, 67 L.Ed. 1078 (1923); see also Doremus v. Bd. of Ed. of Hawthorne, 342 U.S. 429, 433, 72 S.Ct. 394, 96 L.Ed. 475 (1952) (reiterating that “the interests of a taxpayer in the moneys of the federal treasury are too indeterminable, remote, uncertain and indirect to furnish a basis for an appeal to the preventive powers of the Court over their manner of expenditure”).

Likewise, “state taxpayers have no standing under Article III to challenge state tax or spending decisions simply by virtue of their status as taxpayers.” DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 346, 126 S.Ct. 1854, 164 L.Ed.2d 589 (2006). Federal and state taxpayers cannot show Article III standing based on their status as taxpayers “because the alleged injury is not concrete and particularized, but instead a grievance the taxpayer suffers in some indefinite way in common with people generally.” Id. at 344, 126 S.Ct. 1854 (internal citations and quotation marks omitted). “In addition, the injury is not actual or imminent, but instead conjectural or hypothetical.” Id. (internal quotation marks omitted).

The Supreme Court has, however, allowed one form of taxpayer standing to survive: standing based on municipal taxpayer status. This difference in the treatment of municipal taxpayers is justified, at least in theory, by the closeness between the municipal taxpayer and the expenditure of municipal taxpayer funds. As explained in Frothingham:

The interest of a taxpayer of a municipality in the application of its moneys is direct and immediate and the remedy by injunction to prevent their misuse is not inappropriate. It is upheld by a large number of state cases and is the rule of this court.... The reasons which support the extension of the equitable remedy to a single taxpayer in such cases are based upon the peculiar .relation of the corporate taxpayer to the corporation, which is not without some resemblance to that subsisting between stockholder and private corporation.

262 U.S. at 486-87, 43 S.Ct. 597. Thus, unlike a state or federal taxpayer, a municipal taxpayer may challenge certain expenditures of municipal funds in federal court.

Though a municipal taxpayer may, in some cases, challenge municipal expenditures, her right to do so is not unlimited. We have applied the “good-faith pocketbook” requirements, articulated by the Supreme Court in Doremus, to municipal taxpayer standing. Doremus, 342 U.S. at 434, 72 S.Ct. 394 (explaining that “a good-faith pocketbook action” is one in which a plaintiff alleges “a direct dollars- and-cents injury”). The municipal taxpayer plaintiffs in Doremus challenged a state law mandating Bible reading in public schools. 342 U.S. at 430-31, 72 S.Ct. 394. The Supreme Court concluded that they lacked standing as municipal taxpayers because they failed to show that the Bible reading resulted in any direct monetary cost. Id. at 431, 72 S.Ct. 394 (“[I]t is neither conceded nor proved that the brief interruption in the day’s schooling caused by compliance with the statute adds cost to the school expenses or varies by more than an incomputable scintilla the economy of the day’s work.”). The plaintiffs made no allegation that the Bible reading was “supported by any separate tax or paid for from any particular- appropriation or that it adds any sum whatever to the cost of the school.” Id. at 433, 72 S.Ct. 394. Furthermore, the plaintiffs failed to show that the Bible reading had any impact on their overall tax burden. Id. (“No information is given as to what kind of taxes are paid by appellants and there is no averment that the Bible reading increases any tax they do pay or that as taxpayers they are, will, or possibly can be out of pocket because of it.”). Thus, the Supreme Court made clear in Doremus that in order for a municipal taxpayer to have standing in federal court, she must demonstrate (1) that a particular expenditure accompanied the allegedly illegal practice and (2) that it put her “out of pocket.”

Accordingly, in ACLU-NJ v. Township of Wall, we recognized that, following Do-remus, plaintiffs must “establish more than a potential de minimis drain on tax revenues due to the [allegedly unconstitutional conduct].” 246 F.3d 258, 262 (3d Cir. 2001). In ACLU-NJ, residents of Wall Township, New Jersey, filed a suit against the Township, alleging that the Township’s holiday display violated the Establishment Clause of the First Amendment. Id at 260. The holiday display consisted of a variety of holiday items, including a creche and a menorah. We observed that, even though the Township “own[ed] the Nativity display, and presumably the menorah, and the overall display [was] set up with defendant’s support, direction and/or approval,” the Township did not “maintain” the display. Id. at 263. As such, we held that the plaintiffs lacked standing because they “failed to establish an expenditure on the challenged elements of the [holiday] display.” Id. at 263-64. The Township did not expend funds by displaying the religious elements it owned. A plaintiff must therefore establish a municipal expenditure on the challenged aspect of the disputed practice in order to have municipal taxpayer standing.

We further clarified that, even if the Township had used its own paid employees to erect the display, or had used Township funds to light it, we would not, without further evidence, assume that such expenditures amounted to anything more than de minimis expenditures. And, consistent with Doremus, de minimis expenditures attributable to the challenged practice are insufficient to confer Article III standing. Therefore, a municipal taxpayer plaintiff must show (1) that he pays taxes to the municipal entity, and (2) that more than a de minimis amount of tax revenue has been expended- on the challenged practice itself. ACLU-NJ, 246 F.3d at 263-64; see also Doe v. Beaumont Indep. Sch. Dist., 173 F.3d 274, 282 (5th Cir. 1999).

B. The Issuance of Bonds

As an initial observation, we agree with the District Court that “Nichols is not contesting the expenditure of tax funds, but the legality of the Special Election.” (App. 19-20.) We are not faced with the question of whether Nichols would have had standing to challenge these voting requirements under different circumstances — e.g., in a case where she was not permitted to vote. Certainly, as the District Court recognized, Nichols was both a property owner in and a resident of Reho-both Beach and therefore has no basis to challenge the voting requirements directly. Instead, Nichols has attempted to remedy her lack of traditional “injury-in-fact” by asserting municipal taxpayer standing. This she cannot do.

In order for a plaintiff to gain access to federal court using municipal taxpayer standing, she must show that the municipality has actually expended funds on the allegedly illegal elements of the disputed practice. Nichols’s argument on appeal fails to grasp this inherent requirement, despite her recognition that “[m]unieipal taxpayer standing is available when there is an expenditure of municipal tax funds on an unconstitutional practice.” Appellant’s Br. 8. Because the $52.5 million was not spent on an illegal practice, Nichols cannot assert municipal taxpayer standing to challenge the expenditure..

The Dissent mischaracterizes the nature of the injury Nichols alleged and asserts that the proposed issuance of $52.5 million in general obligation bonds satisfies the injury requirement. Dissent, Lines 91-93. Certainly, if $52.5 million had been expended on an illegal practice, this would be a different case. But Nichols .did not allege that there was anything illegal about what the $52.5 million was to be expended on. The only expenditure that Nichols can challenge is the cost of holding the special election — not the resultant issuance of bonds — and, as we will explain below, those funds would have been expended regardless of whether the voting requirements were unconstitutional or not.

C. Municipal Expenditures

Nichols also contends that she has municipal taxpayer standing to bring this action on the basis of two expenditures-by Rehoboth Beach: (1) the funds required to hold the special election and (2) the funds used to purchase an advertisement in a local newspaper. Neither of these expenditures is sufficient to grant Nichols standing. As such, she does not have municipal taxpayer standing to challenge the special election, and the District Court properly dismissed her complaint.

1.

We conclude that the expenditure of municipal funds to hold a special election is not sufficient to establish municipal .taxpayer standing. Nichols alleged that the voting procedures at the special election— the six-month residency requirement and the ability of property owners to vote more than once — violated the Fourteenth Amendment. She did not assert that Reho-both Beach expended funds on the allegedly unconstitutional aspects of the special election, i.e., the voting requirements. The special election itself would have been held regardless of the procedures Rehoboth Beach employed. In other words, Reho-both Beach would have expended the funds necessary to hold the special election even if the voting requirements had been different.

As noted above, in ACLU-NJ, the plaintiffs could not show that the Township expended funds on the challenged element — the public display of religious symbols. Because the plaintiffs failed to establish an expenditure on the challenged elements of the holiday display, they could not show municipal taxpayer standing. ACLU-NJ, 246 F.3d at 263-64. Here, Nichols’s concern is not that Rehoboth Beach held a special election to approve bonds but rather that some of the requirements of the special election were unconstitutional. But the complaint fails to allege any direct link between the expenditure of municipal funds and the allegedly unconstitutional elements of the special election — and this failure is fatal to Nichols’s claim.-

2.

Rehoboth Beach’s purchase of an advertisement in a local newspaper similarly does not support municipal taxpayer standing in this instance. There is no dispute that Rehoboth Beach expended municipal funds when it purchased an advertisement alerting the public to the special election. Again, the purported illegality of the election procedures has nothing to do with the expenditure of funds for the advertisement — an appropriate expenditure. The advertisement simply urged eligible voters to participate. Moreover, the cost is analogous to the types of expenses dismissed in ACLU-NJ as de minimis — such as the cost of electricity required to light the religious elements of a display. Accordingly, the advertisement does not qualify as the kind of “direct dollars-and-cents injury” required under Doremus for “a good-faith pocketbook action.” Doremus, 342 U.S. at 434, 72 S.Ct. 394; see also Fuller v. Volk, 351 F.2d 823, 327 (3d Cir. 1965) (“[I]n order for the taxpayer to have standing, he must show that his position as a taxpayer is in some way affected.... ”). This expenditure cannot, therefore, serve as a basis for municipal taxpayer standing.

IV.

Because Nichols does not have standing as a municipal taxpayer, we will affirm the District Court’s dismissal of her case for lack of subject matter jurisdiction.

COWEN, Circuit Judge.

I must respectfully dissent. The City of Rehoboth Beach held a special election to authorize a $52.5 million bond issuance, which was approved — 637 votes to 606 votes. In Counts I and II of her amended complaint, Jackie Nichols alleged that Re-hoboth Beach, Mayor Sam Cooper, and City Manager Sharon Lynn violated the Fourteenth Amendment by requiring individuals to reside in the municipality for at least six months in order to cast votes as Rehoboth Beach residents. In Count III, she claimed that Defendants violated “the ‘one person, one vote’ principle of the 14th Amendment” by allowing “individuals one vote for each parcel of property they owned in Rehoboth (directly or indirectly through an entity), in addition to one vote if they also resided in Rehoboth.” (A12.) “Count IV was a pendent state law claim for ‘exceeding authority’ in which Nichols alleged that Rehoboth Beach had violated Delaware law by purchasing the newspaper advertisement encouraging voters to support the issuance of bonds.” (Maj. Op. at 281.) Unlike the majority, I conclude that Nichols — as a municipal taxpayer— has Article III standing to bring her federal constitutional claims as well as her state law cause of action. In addition; I believe that, while she fails to satisfy the require-, ments for prudential standing with respect to Counts I and II, she has prudential standing to litigate Counts III and -IV.

The majority appropriately points out that “[t]he Supreme Court has, however, allowed one form of taxpayer standing to survive: standing based on municipal taxpayer status.” (Id. at 280.) Under the doctrine of municipal taxpayer standing, “[t]he interest of a taxpayer of a municipality in the application of its money is direct and immediate and the remedy by injunction to prevent their misuse is not inappropriate.” Frothingham v. Mellon, 262 U.S. 447, 486, 43 S.Ct. 597, 67 L.Ed. 1078 (1923). “In other words, under Frothingham we presume a municipal taxpayer’s relationship to the municipality is ‘direct and immediate’ such that the taxpayer suffers concrete injury whenever the ‘challenged activity involves a measurable appropriation or loss of revenue.’ ” United States v. City of N.Y., 972 F.2d 464, 470 (2d Cir. 1992) (quoting D.C. Common Cause v. Dist. of Columbia, 858 F.2d 1, 5 (D.C. Cir. 1988)). In fact, a number of judges have questioned whether this well-established approach — which dates back to the 1800s — is at odds with both modern standing principles as well as the contemporary realities of municipal financing and spending practices. See, e.g., Smith v. Jefferson Cty. Bd. of Sch. Comm’rs, 641 F.3d 197, 221 (6th Cir. 2011) (en banc) (Sutton, J., concurring) (addressing “tension between the municipal-taxpayer-standing doctrine and modern standing principles”); City of N.Y., 972 F.2d at 471 (questioning Frothingham presumption given existence of municipalities with multi-billion dollar budgets). According to the Sixth Circuit, “municipal taxpayers are able to rely on what would otherwise be labeled a generalized grievance,” and they are thereby allowed “to sidestep the ‘zone of interest’ test that courts apply in other instances.” Smith v. Jefferson Cty. Bd. of Sch. Comm’rs, 788 F.3d 580, 591 n.4 (6th Cir. 2015) (citing Smith, 641 F.3d at 222 (Sutton, J., concurring)), cert. denied sub nom. Kucera v. Jefferson Cty. Bd. of Sch. Comm’rs, — U.S. -, 136 S.Ct. 1246, 194 L.Ed.2d 175 (2016). Yet “[t]he Supreme Court created the distinction and has stood by it for some time, requiring lower courts like ours to apply it as is.” Smith, 641 F.3d at 222 (Sutton, J., concurring) (citing Rodriguez de Quijas v. Shearson/Am. Express, Inc., 490 U.S. 477, 484, 109 S.Ct. 1917, 104 L.Ed.2d 526 (1989)).

I find that the District Court did not approach this generous notion of municipal taxpayer standing -with the seriousness and care it deserves. “If standing is ‘one of the most amorphous [concepts] in the entire domain of the public law,’ Flast v. Cohen, [392 U.S. 83, 99, 88 S.Ct. 1942, 20 L.Ed.2d 947 (1968) ], nowhere is this better demonstrated than in the area of municipal taxpayer standing.” Warnock v. NFL, 356 F.Supp.2d 535, 540 (W.D. Pa.), aff'd, 154 Fed.Appx. 291 (3d Cir. 2005). Nevertheless, the District Court merely cited general legal principles governing the standing inquiry and, without a detailed explanation, stated that it “agrees - with Defendants that Nichols is not contesting the expenditure of tax funds, but the legality of the Special Election.” Nichols v. City of RehoBoth Beach, C.A. No. 15-602 GMS, 2015 WL 8751180, at *3 (D. Del. Dec.. 14, 2015). Unlike the majority, the District Court did not discuss any municipal taxpayer cases or address the governing principles of this doctrine. The majority, in any event, recognizes that we exercise de novo review over the District Court’s dismissal on standing grounds. See, e.g., Edmonson v. Lincoln Nat. Life Ins. Co., 725 F.3d 406, 414 (3d Cir. 2013), cert. denied, — U.S. -, 134 S.Ct. 2291, 189 L.Ed.2d 173 (2014). “In examining a challenge to a party’s standing, the Court must accept as true all material allegations set forth in the complaint and construe those facts in favor of the nonmoving party.” Nichols, 2015 WL 8751180, at *2 (citing Warth v. Seldin, 422 U.S. 490, 501, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975); Storing v. Borough of Point Pleasant Beach, 322 F.3d 293, 296 (3d Cir. 2003)). General factual allegations of injury resulting from the defendant’s actions may be sufficient at the motion to dismiss stage. See, e.g., Lujan v. Defenders of Wildlife, 504 U.S. 555, 561, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992).

To satisfy the standing requirements of Article III, a plaintiff must show that: (1) he or she has suffered an injury in fact “that is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical;” (2) the injury is fairly traceable to the defendant’s challenged action; and (3) it is likely that the injury will be redressed by a favorable decision. Friends of the. Earth, Inc. v. Laidlaw Envt’l Servs. (TOC), Inc., 528 U.S. 167, 180-81, 120 S.Ct. 693, 145 L.Ed.2d 610 (2000) (citing Lujan, 504 U.S. at 560-61, 112 S.Ct. 2130). In order to meet the injury requirement, a municipal taxpayer must establish a so-called “good-faith pocketbook” injury. See, ag., ACLU-NJ v. Twp. of Wall, 246 F.3d 258, 262 (3d Cir. 2001) (“[A] municipal taxpayer may possess standing to litigate ‘a good faith pocketbook action.’ ” (citing Doremus v. Bd. of Educ., 342 U.S. 429, 72 S.Ct. 394, 96 L.Ed. 475 (1952))); see also, e.g., Fuller v. Volk, 351 F.2d 323, 327 (3d Cir. 1965) (stating that, in order to have standing, plaintiff must show position as taxpayer is in some way affected and, in short, that action constitutes good-faith pocketbook action). A municipal taxpayer establishes a good-faith pocketbook injury by showing “a measurable appropriation or disbursement” of public funds “occasioned solely by the activities complained of.” Doremus v. Bd. of Educ., 342 U.S. 429, 434, 72 S.Ct. 394, 96 L.Ed. 475 (1952) (citing Everson v. Bd. of Educ., 330 U.S. 1, 67 S.Ct. 504, 91 L.Ed. 711 (1947)); see also, e.g., D.C. Common Cause v. Dist. of Columbia, 858 F.2d 1, 4 (D.C. Cir. 1988) (“One commentator has interpreted Dore-mus as requiring a taxpayer to challenge an activity involving an expenditure of public funds that would not otherwise be made.” (citing Note, Taxpayers’ Suits: A Survey and Summary, 69 Yale L.J. 895, 922 (1960))).

According to Nichols, she has an interest as a municipal taxpayer in challenging “the unlawful incurring of municipal debt by issuing bonds to be repaid from tax funds.” (Appellant’s Brief at 11 (footnote omitted).) She also points to the Defendants’ use of taxpayer funds to purchase a newspaper advertisement and to conduct the special election. I believe that the proposed issuance of $52.5 million in general obligation bonds — based on an election conducted pursuant to allegedly unconstitutional voting rules and decided by a mere thirty-one votes — satisfies the injury requirement. Likewise, this bond issuance meets the causation and redressability prongs. Because Nichols thereby has Article III standing to pursue her federal constitutional claims, I need not — and do not — consider whether the election expenditures likewise meet these standing requirements. In addition, I conclude that the use of taxpayer money to purchase an advertisement in a local newspaper satisfies the requirements for Article III standing with respect to Nichols’s state law cause of action.

The proposed bond issuance constitutes a “good-faith pocketbook” injury. In ACLU-NJ v. Township of Wall, 246 F.3d 258 (3d Cir. 2001), two taxpayers challenged on Establishment Clause grounds the inclusion of a creche and a menorah in a holiday display erected near the entrance to the township’s municipal building, ' id. at 260. We determined that the plaintiffs failed to carry “their burden of proving an expenditure of revenues to which they contribute that would make their suit ‘a good-faith pocketbook action.’ ” Id. at 264 (quoting Doremus, 342 U.S. at 434, 72 S.Ct. 394). The Court explained that, even if we were to assume that the display was erected by paid municipal employees, “there is no indication that the portion of such expenditure attributable to the challenged elements of the display would have been more than the de minimis expenditure that was involved in the Bible reading in Doremus [in which the teacher or school principal was responsible for the readings].” Id. at 264 (citing Doremus v. Bd. of Educ., 7 N.J.Super. 442, 71 A.2d 732, 733 (1950); Doe v. Madison Sch. Dist. No. 321, 177 F.3d 789, 794 (9th Cir. 1999) (en banc)). Similarly, the ACLU-NJ Court refused to assume that the township expended more than a de minimis amount of money to light the display’s religious elements. Id. After all, the display also featured an evergreen tree, decorated urns, and candy can banners. Id. at 260. However, the issuance of $52.5 million in municipal bonds cannot really be compared to the trivial amount of taxpayer money a municipality could have possibly spent in order to erect and light two discrete components of a seasonal holiday display. This appeal instead implicates millions of dollars in debt “backed by the full faith and credit of the issuing municipality” and payable “by tax revenue.” In re Smurfit-Stone Container Corp., 425 B.R. 735, 737 n.2 (Bankr. D. Del. 2010) (citing Greenberg, Municipal Sources: Some Basic Principles and Practices, 9 Urb. Law. 340-41 (1977)). Such indebtedness clearly represents a measurable liability or encumbrance of the municipality. Given the nature of the relationship between a municipality and municipal taxpayers — “which is not without some resemblance to that subsisting between stockholder and private corporation,” Frothingham, 262 U.S. at 487, 43 S.Ct. 597 (citing 4 Dillon, Municipal Corporations § 1580 et seq (5th ed.)) — this liability in turn constitutes a burden on the taxpayers themselves, see, e.g., Crampton v. Zabriskie, 101 U.S. 601, 609, 25 L.Ed. 1070 (1879) (“[I]t would seem eminently proper for courts of equity to interfere upon the application of the taxpayers of a county to prevent the consummation of a wrong, when the officers of those corporations, assume, in excess of their powers, to create burdens upon property-holders.”).

According to the majority, Nichols “has not challenged the expenditure of the $52.5 million, merely the special election that approved the issuance of the bonds.” (Maj. Op. at 279.) Purportedly, “[bjecause the $52.5 million was not spent on an illegal practice, Nichols cannot assert municipal taxpayer standing to challenge the expenditure.” (Id. at 282.) I nevertheless believe that an expenditure of taxpayer money specifically “approved” by a special election conducted under unconstitutional voting rules constitutes “an illegal practice.” These two components — i.e., the expenditure and the election approving the expenditure — should not be severed in the manner suggested by the majority. After all, the legality of the bond issuance itself depends on the special election and its outcome — which, in this case, was decided by thirty-one votes. Could an expenditure really be considered anything other than “an illegal practice” where the requisite election approving the expenditure itself violated “the ‘one person, one vote’ principle of the 14th Amendment” as well as basic constitutional principles governing voter residency requirements? (A12.)

Federal “municipal taxpayer” cases also indicate that Nichols satisfies the injury requirement with respect to the proposed bond issuance and the underlying special election. ACLU-NJ had already been fully litigated on the merits, and the plaintiffs accordingly had the burden of proving their standing “ ‘in the same way as any other matter on which the plaintiff bears the burden of proof, i.e., with the manner and degree of evidence required at successive stages of the litigation.’ ” ACLU-NJ, 246 F.3d at 261 (quoting Lujan, 504 U.S. at 561, 112 S.Ct. 2130). This matter comes to us on a motion to dismiss. As the District Court acknowledged, we must accept as true all material allegations set forth in the complaint, and general factual allegations of injury may be sufficient at this early stage of the litigation. See, e.g., Lujan, 504 U.S. at 561, 112 S.Ct. 2130; Warth, 422 U.S. at 501, 95 S.Ct. 2197. In addition, I have already highlighted the generous nature of the municipal taxpayer standing doctrine. In fact, a municipal taxpayer need not show there is a likelihood of any resulting savings that will inure to his or her benefit, see, e.g., City of N.Y., 972 F.2d at 466, or “a net loss to the municipal fisc,” Smith, 641 F.3d at 212 (citing, inter alia, ACLU-NJ, 246 F.3d at 262). In Crampton v. Zabriskie, 101 U.S. 601, 25 L.Ed. 1070 (1879), the Supreme Court concluded that county taxpayers had standing to challenge a bond issuance on the grounds that the issuance violated a state statute limiting the county’s total expenditures to the amount of money it raised by taxes, id. at 607-09. We similarly should permit a taxpayer to challenge a bond issuance on the grounds that it is based on an election conducted in an unconstitutional manner.

As Nichols points out, a number of state supreme courts have held that municipal taxpayers possessed the requisite standing to challenge the issuance of bonds on the grounds of underlying electoral illegalities. Relying on the United States Supreme Court’s ruling in Crampton, the Virginia Supreme Court of Appeals stated that, “[wjhenever a citizen and taxpayer is confronted with the proposition that an illegal election for the issuance of bonds has been held and the issuance of the bonds will result in the imposition of an illegal tax burden upon him, he has the right to proceed either in equity to enjoin the issuance of the bonds ... or to proceed by filing a petition in the pending matter.” Appalachian Elec. Power Co. v. Town of Galax, 173 Va. 329, 4 S.E.2d 390, 392 (1939). The Idaho Supreme Court concluded that a municipal taxpayer could contest the result of a special bond election — and the official declaration of the election result — on the grounds that several identified persons were permitted to vote even though they were not qualified to do so (and that, without these votes, the proposition would not have passed). Henley v. Elmore Cty., 72 Idaho 374, 242 P.2d 855, 856-57 (1952). More recently, Maine’s highest court allowed a taxpayer to challenge a municipality’s attempt to incur debt based on what the taxpayer believed was an unlawful recounting of previously rejected absentee ballots. McCorkle v. Town of Falmouth, 529 A.2d 337, 337-39 (Me. 1987). Even Defendants acknowledge that the McCor-kle and Henley courts allowed the respective taxpayers to “challenge municipality’s vote count.” (Appellees’ Brief at 16 n.9 (citing Henley, 242 P.2d at 857; McCorkle, 529 A.2d at 338).) If a municipal taxpayer has standing to challenge .the vote count, why wouldn’t he or she have the right to challenge the constitutionality of the basic rules the municipality used to decide who may vote — and how many votes they may cast?

Likewise, Nichols’s pendent state law claim constitutes a good-faith pocketbook action. The majority compares the expense of buying a single newspaper advertisement with the potential de minimis costs of erecting and lighting the religious elements of the seasonal holiday display at issue in ACLU-NJ. However, the taxpayers’ Establishment Clause claim implicated the purported costs of erecting and lighting the creche and menorah — as opposed to what the township may have spent to erect and light the display in its entirety. In contrast, Nichols does not merely challenge some minor component of a municipal expenditure. She instead alleged that it was the purchase of the newspaper advertisement itself that violated Delaware state law. According to her amended complaint, “Rehoboth, utilizing taxpayer funds (on information and belief), caused to be published in a local newspaper a full-page advertisement exhorting people to “Vote Yes,’ ie., in favor of the proposed outfall project, and presenting a one-sided view of the project, without affording opponents the opportunity by means of that financed medium to present their side.” (A12-A13.) “The expenditure is not within Rehoboth’s express or implied power and so is unlawful.” (A13.) While it may not have cost the municipality and its taxpayers that much money to purchase a single advertisement, “ ‘[mjunicipal taxpayer standing simply requires the “injury” of an allegedly improper expenditure of municipal funds’ ” (Maj. Op. at 282 n.2 (quoting Cammack v. Waihee, 932 F.2d 765, 770 (9th Cir. 1991))). See, e.g., D.C. Common Cause, 858 F.2d at 9 (“Although the factual record on this allegation is sparse, we think appellees have made a sufficient showing to avoid dismissal for lack of standing. The District spent $7,000 in the 1984 campaign [to influence the outcome of an initiative], which is evidence that it may do so again.” (citation omitted)).

“Injury is only the first part of the standing analysis; the plaintiff must also establish that the challenged action caused the injury and that the injury would be redressed by a favorable decision.” Id. at 5 (citing Allen v. Wright, 468 U.S. 737, 751, 104 S.Ct. 3315, 82 L.Ed.2d 556 (1984)). Defendants insist that, “[bjecause the Delaware General Assembly adopted the voting requirements contained in the City’s Charter, the ‘causation’ prong is not satisfied because the challenged conduct is not caused by the City, rather it is ‘th[e] result [of] the independent action of some third party not before the court’ — the State.” (Appellees’ Brief at 21 (quoting Lujan, 504 U.S. at 560-61, 112 S.Ct. 2130).) In fact, Defendants repeatedly attempt to shift the focus — and blame — from themselves to the State of Delaware. Nevertheless, it was Defendants’ choice to undertake a special election, to enforce the allegedly unconstitutional voting rules set forth in the City Charter, and to incur millions of dollars in municipal debt on the basis of what turned out to be a closely contested election. “[Gjovernment officials are not bound to follow state law when that law is itself unconstitutional. Quite the contrary: in such a case, they are bound not to follow state law.” Carhart v. Stenberg, 192 F.3d 1142, 1152 (8th Cir. 1999), aff'd, 530 U.S. 914, 120 S.Ct. 2597, 147 L.Ed.2d 743 (2000). Nichols likewise seeks only prospective relief, and the doctrine of qualified immunity does not apply to such claims. See, e.g., Hill v. Borough of Kutztown, 455 F.3d 225, 244 (3d Cir. 2006).

More generally, I find that Plaintiffs satisfy both the causation and redressability elements. As the majority notes, “municipal taxpayer standing simply requires the ‘injury’ of an allegedly improper expenditure of municipal funds.” Cammack v. Waihee, 932 F.2d 765, 770 (9th Cir. 1991). In this case, the “injury” consists of a proposed multi-million dollar bond issuance — which was based on a special election decided by a mere thirty-one votes pursuant to voting rules that allegedly violated the Fourteenth Amendment. In turn, the federal judiciary could provide redress by, inter alia, enjoining Defendants from issuing any bonds if they fail to conduct an election that complies with the United States Constitution. With respect to the state law claim, Nichols specifically alleged an improper expenditure of funds — the purchase of a newspaper advertisement presenting a one-sided view of the proposed project — which could be remedied by declaratory or injunctive relief. See, e.g., D.C. Common Cause, 858 F.2d at 9 (“Appellees’ injury — the District’s future misuse of public funds [to influence the outcome of initiatives] — will be redressed by an injunction prohibiting such expenditures.”).

Having determined (unlike the majority) that Nichols possesses standing under Article III to pursue her constitutional and state law claims, I must also consider whether she satisfies the requirements for prudential standing. In Rocks v. City of Philadelphia, 868 F.2d 644 (3d Cir. 1989), several city taxpayers and residents “asserted an equal protection violation resulting from the application of minority business enterprise participation requirements (‘MBE’) to a city construction project,” id. at 645. We agreed with the district court that these plaintiffs — as municipal taxpayers — had Article III standing. Id. at 648. However, “[t]he question is whether these appellants have sustained a proximate, individual, and addressable injury, based solely upon their status as municipal residents and taxpayers.” Id. Relying on our earlier ruling in Frissell v. Rizzo, 597 F.2d 840 (3d Cir. 1979), abrogation on other grounds recognized by Amato v. Wilentz, 952 F.2d 742 (3d Cir. 1991), the Rocks Court concluded that the plaintiffs had not satisfied these prudential requirements. Rocks, 868 F.2d at 648. Frissell, a Philadelphia taxpayer, sought to enjoin the mayor from denying customary public advertising to a newspaper in retaliation for unfavorable news articles, although the newspaper had not joined in the lawsuit or filed its own action against the city. Id. “Similarly, in this case no business enterprise or construction worker, those most likely to have suffered injury under the challenged bid specifications, has joined the complaint or brought suit to enjoin the city. The appellants here are solely taxpayers, resting their claim on the legal rights and interests of third parties, to-wit, those business entities and workers not qualifying under the MBE requirements.” Id.; see also Warnock, 356 F.Supp.2d at 546 (“Rocks suggests that plaintiff is required to establish more than an injury received ‘solely’ on his status as a municipal taxpayer in order to overcome prudential standing limitations.”).

In light of Rocks (and Frissell), I conclude that Nichols lacks prudential standing to bring Counts I and II challenging the imposition of a sixth-month residency requirement. But I reach the opposite conclusion with respect to her state law cause of action (Count IV) as well as her claim (Count III) alleging that Defendants violated the Fourteenth Amendment by allowing property owners to vote more than once in the special election. On the one hand, Nichols satisfied the sixth-month residency requirement and accordingly was allowed to vote in the special election — which she did. No disqualified voter, “those most likely to have suffered injury under [this residency requirement],” has joined this litigation or filed their own actions against Defendants. Rocks, 868 F.2d at 648. On the other hand, a rule granting multiple votes to property owners — as well as a bond issuance based on the outcome of a' closely contested election conducted under such a voting rule — directly affected Nichols herself. The purchase of an allegedly illegal newspaper advertisement similarly injured her. She accordingly need not rest her claim on “the legal rights and interests of third parties.” Id. While new residents disqualified from voting in the election would appear to be the most appropriate parties to challenge the residency requirement, I question whether- anyone else would be a more suitable plaintiff to litigate either the “one person, one vote” claim or the pendent state law causé of action.

In conclusion, I would affirm the District Court’s order in part and vacate it in part. The order would be affirmed insofar as it dismissed Counts I and II of the amended complaint. Otherwise, I would vacate the order insofar as it dismissed Counts III and TV.

      . Nichols waives any argument that she has standing as a voter, see Appellant’s Br. 15 ("The particular injury was to Ms. Nichols as a municipal taxpayer, not as a voter... but mentions parenthetically that "the dilution of her vote as a result of those unlawful rules should provide an independent ground for her standing,” id. This position is developed only in a footnote with a brief citation to authority. Any argument that she has standing as a voter is accordingly waived. See John Wyeth & Bro. Ltd. v. CIGNA Int’l Corp., 119 F.3d 1070, 1076 n.6 (3d Cir. 1997) ("[Ajrgu-ments raised in passing (such as, in a footnote), but not squarely argued, are considered waived.”). The Dissent "question[s] whether anyone else would be a more suitable plaintiff to litigate ... the 'one person, one vote' claim.” Dissent, lines 284-85. We do not pass judgment on whether Nichols would be an appropriate plaintiff to make such a challenge since she waived her ability to challenge the voting requirements directly.

      . The cases that Nichols cites illustrate that municipal taxpayer standing exists only in cases where plaintiffs seek to challenge unlawful expenditures. See, e.g., Smith v. Jefferson Cty. Bd. of Sch. Comm’rs, 641 F.3d 197, 210 (6th Cir. 2011) ("[Mjunicipal taxpayers may fulfill the injury requirement by pleading an alleged misuse of municipal funds.”); Bd. of Ed. v. N.Y. Teachers Ret. Sys., 60 F.3d 106, 110 (2d Cir. 1995) ("[A] municipal taxpayer has standing to challenge allegedly unlawful municipal expenditures.”); Cammack v. Waihee, 932 F.2d 765, 770 (9th Cir. 1991) ("Municipal taxpayer standing simply requires the 'injury' of an allegedly improper expenditure of municipal funds....”); see also Freedom From Religion Found., Inc. v. Zielke, 845 F.2d 1463, 1470 (7th Cir. 1988) ("A plaintiff's status as a municipal taxpayer is irrelevant for standing purposes if no tax money is spent on the allegedly unconstitutional activity.”).

      . Even if there were a direct connection between the funds expended on the special election and the challenged voting practice, we would reach the same result. That de minimis costs were associated with the special election itself does not give rise to Article III standing. ACLU-NJ, 246 F.3d at 264 (requiring more than de minimis municipal expenditures to make a "good-faith pocketbook action”). The Dissent asserts that “the issuance of $52.5 million in municipal bonds cannot really be compared to the trivial amount of taxpayer money a municipality could have possibly spent to erect and light two discrete components of a seasonal holiday display.” Dissent, Lines 116-19. Obviously not. But that comparison misses the mark since the $52.5 million at issue in this case was not expended on a challenged practice. By contrast, the challenged expenditure in ACLU-NJ was the cost of erecting and lighting the religious elements in the holiday display, which is comparable to the expense of holding the election here.

      . While we should approach state court case law applying standing principles with some caution, see, e.g., Rocks v. City of Phila., 868 F.2d 644, 647 (3d Cir. 1989) (rejecting plaintiffs' argument that "we should apply Pennsylvania case law respecting the broad rights of municipal taxpayers to sue local government agencies”), I find that these bond election opinions have special significance given the fact that neither the majority nor Defendants themselves cite to any contrary federal (or even state) case law that specifically consider whether a taxpayer has standing to challenge a bond issuance based on purported irregularities in the bond election. This case law also appears to be consistent with the generous doctrine of taxpayer standing recognized by the United States Supreme Court. See Appalachian Elec. Power Co., 4 S.E.2d at 392 (quoting Crampton, 101 U.S. at 609).

      . While Defendants take issue with Nichols's failure to raise her objections until after the special election took place, they do not cite to any case specifically holding that the respective plaintiffs lacked standing because they failed to object before the election or took too long to file their lawsuit (and, in two of the decisions they cite, the courts actually determined that the plaintiffs possessed standing, see Fulani v. Hogsett, 917 F.2d 1028, 1030 (7th Cir. 1990); Soules v. Kauaians for Nukolii Campaign Comm., 849 F.2d 1176, 1179 (9th Cir. 1988)).