Jung v. Association of American Medical Colleges

339 F. Supp. 2d 26, 2004 U.S. Dist. LEXIS 16099, 2004 WL 1803198
District Court, District of Columbia·Decided August 12, 2004·No. CIV.A.02-0873 PLF·Published·Cited by 56 cases

Opinion

OPINION

PAUL L. FRIEDMAN, District Judge.

This matter is before the Court for consideration of Defendants’ Motion for Judgment on the Pleadings. Plaintiffs in this putative class action are medical school graduates currently or formerly enrolled in resident physician “residency” pro- ’ grams. The defendants can be categorized into two groups: the organizational, defendants (organizations and associations that participate in the administration of graduate medical education in the United States) and the institutional defendants (universities, medical schools, foundations, hospitals, health systems and medical centers that sponsor medical residency programs). Plaintiffs filed suit charging that the defendants have violated Section 1 of the Sherman Act, 15 U.S.C. § 1. Specifically, plaintiffs allege that the defendants have contracted, combined and conspired among themselves to “displace competition in the recruitment, hiring, employment and compensation of resident physicians, and to impose a scheme of restraints which have the purpose and effect of fixing, artificially depressing, standardizing and stabilizing resident physician compensation and other terms of employment.” Complaint (“Compl.”) ¶ 2.

On February 11, 2004, the Court issued an Opinion and Order addressing certain defendants’ motions to dismiss this action on various grounds. See Jung v. Association of American Medical Colleges, 300 F.Supp.2d 119 (D.D.C.2004) (“February 11 Opinion and Order”). After the Court issued this Opinion and Order, Congress enacted and President George W. Bush signed into law the Pension Funding Equity Act of 2004, Pub.L. No. 108-218, 118 Stat. 596 (2004), which includes a provision entitled “Confirmation of Antitrust Status of Graduate Medical Resident Matching Programs,” an amendment to the antitrust laws that has been codified as 15 U.S.C. § 37b. Certain defendants now move under Rule 12(c) of the Federal Rules of Civil Procedure for judgment on the pleadings on the ground that the action must be dismissed in light of this new legislation which creates or confirms an antitrust exemption for graduate medical education residency matching programs.

I. BACKGROUND

A Plaintiffs’ Allegations

In their class action complaint in this case, plaintiffs assert that there are three intertwining prongs to the antitrust conspiracy they allege. The first prong of the alleged conspiracy concerns the annual assignment of fourth-year medical students to the institutional defendants’ residency *32 programs by the National Resident Matching Program (“NRMP”). The NRMP, an Illinois not-for-profit corporation, is managed and operated by defendant American Association of Medical Colleges (“AAMC”) from AAMC’s principal office in Washington, D.C. See Compl. ¶ 15. The AAMC also is an Illinois not-for-profit corporation, whose membership includes all 125 accredited medical schools, including those medical schools named in the complaint, and approximately 375 major teaching hospitals and health systems, some of which also are named in the complaint. These hospitals and health systems are member hospitals of a subsection of the AAMC, the Council of Teaching Hospitals and Health Systems (“COTH”) Section. See id. ¶ 17.

Plaintiffs further allege that in order to effectuate the assignment, or the “Match,” as it is commonly called, prospective medical residents enter into contracts with and submit to the NRMP a ranked list of desired medical resident positions with various institutions (“Student Match Contract”). The institutions themselves also enter into contracts with the NRMP and submit ranked lists of the medical students whom they are interested in hiring (“Institutional Match Contract”). On a date certain, the NRMP through an algorithm “matches” the students’ lists against the institutions’ rankings, resulting in the assignment of each prospective medical resident to one residency program. See Compl. ¶¶ 15, 83-86. Plaintiffs allege that this system eliminates a free and competitive market and substitutes a centralized, anticompetitive allocation system that assigns prospective resident physicians to a single, specific and mandatory residency program. Plaintiffs further allege that the defendants designed and implemented this system and collectively agreed to comply with it in violation of the antitrust laws. See id. ¶ 83.

Several specific features of this assignment system allegedly serve to impose anticompetitive restraints on medical residency hiring. Plaintiffs allege that a medical student is required to enter into the Match if he or she wishes to gain employment in a residency program accredited by defendant Accreditation Council for Graduate Medical Education (“ACGME”). See Compl. ¶ 71. An individual’s participation in an ACGME-accredited residency program in turn allegedly is a prerequisite for specialty certification by a member board of defendant American Board of Medical Specialties (“ABMS”), an Illinois not-for-profit corporation consisting of 24 recognized medical specialty certification boards, upon completion of the residency. See id. ¶¶ 20, 69. Plaintiffs allege that eventual specialty certification by an ABMS board is considered critical to prospective residents inasmuch as they desire to be “certified” to practice within a specialty following the completion of their residencies. The practical effect of this structure, plaintiffs charge, is that the vast majority of medical students are compelled to participate in the Match, which is a substitute for all aspects of competitive individual negotiations and requires applicants to commit contractually to any assigned position as a condition of enrolling in the Match Program. See id. ¶¶ 69, 86. Furthermore, certain implementing policing mechanisms of the Match allegedly compel compliance with the foregoing restraints. These alleged mechanisms include the requirement that program participants immediately report suspected policy violations to th,e NRMP and advise the relevant organizational authorities of institution or resident physician violations. See id. ¶ 86(c).

In the second prong of the alleged conspiracy, plaintiffs assert that certain aspects of the aforementioned ACGME accreditation standards, with which the *33 institutional defendants allegedly voluntarily comply, function to further restrict residency employment. Specifically, plaintiffs allege that the ACGME (1) has the authority to regulate the number of employment positions in a residency program; • (2) imposes substantial obstacles to the ability of a resident to transfer employment from one employer to another during the period of a residency, thereby effectively making NRMP assignments permanent for the duration of a residency; (3) encourages and/or requires participation in the Match by an institution as a condition of accreditation; and (4) directly reviews compensation and other terms of employment with the purposes, of fixing and depressing them. See Compl. ¶ 88.

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Jung v. Association of American Medical Colleges, 339 F. Supp. 2d 26, 2004 U.S. Dist. LEXIS 16099, 2004 WL 1803198 (D.D.C. 2004).

339 F. Supp. 2d 26 (Jung v. Association of American Medical Colleges) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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