Daniel v. American Bd. of Emergency Med.
UN ITED STATES COURT OF APPEALS
FO R THE SEC ON D C IRC UIT
Au gus t Te rm, 2004
(A rgued : Oc tobe r 25 , 2004 Dec ided : Oc tobe r 7 , 2005 )
Do cke t No s. 03 -6153(L) , 03-616 3(XA P) , 03-616 5(XA P) , 03-615 7(XA P) , 03-618 5(XA P) ,
03 -6187 (XAP ) , 03 -6167(XAP ) , 03-6177 (XAP )
G REGORY F . DANIEL, M .D., IAN W . CUMMINGS, M .D., JOHN A . T IMMONS, M .D., R EED E .
PAULSON, M .D., A LBERT J . ROMANOSKY, M .D., BRUCE W . M CNULTY, M .D.,
On Beha l f o f Them se lve s and A l l O the r s S im ila r ly S itua ted ,
Plain tiffs-App ellants ,
JOSEPH L. A LBRIGHT, JR., M .D., LLOYD G . A LCH, M .D., R ICHARD A LEXANDER, M .D.,
JEFFREY S . ANDERSON, M .D., ROBERT J . AQUINO, M .D., YADON A RAD, M .D., JOSEPH P .
A RNO, M .D., DAVID E . BAUM, M .D., JAMES R . B EUTNAGEL, M .D., JOEL S . BOGNER,
M .D., CHARLES L . BOURSIER, M .D., SCOTT J . CAMPBELL , M .D., K ENNETH W . CARTAXO,
M .D., EDGAR H . CASTELLANOS, M .D., JOSEPH F . C ERAVOLO , M .D., M ANOJ V . CHAG,
M .D., PATRICIA C . CHASE, M .D., K ENNETH G . CHRISTIAN, JR., M .D., M ARK S .
C LIPPINGER, M .D., JOHN T . COLUMBUS, M .D., M ICHAE L COOKS, M .D., CRAIG J . COTT,
M .D., M ARY DAMPIER, M .D., DAVID M . DAVIS , M .D., PATRICK J . D IFONZO , M .D.,
ANDREW B . EDWARDS, M .D., NANCY J . FERGUSON, M .D., D ENISE F . FERRA RIS , M .D.,
KATHY W . FORRED, M .D., DANIE L S . FRANK, M .D., M ICHAE L S . G ELFOND, M .D.,
M ICHAE L G . G INDER, M .D., K EITH S . GOLDSTEIN , M .D., M ARIA T . G RANZOTTI, M .D.,
ROBERT E . G ROSS, M .D., THOMAS K . HALL, M .D., JOHN A . HATHERLEY, M .D., ANTHONY
J . HORWITZ, M .D., DONALD A . HUMAN, M .D., JONATHAN A . JARMAN, M .D., JERRY
JONES, III , M .D., M ARK R . KAEHLER, M .D., A LLEN KAGAN, M .D., K . M ICHAE L K EIL,
M .D., M ARTIN E . K ERNBERG, M .D., H ERSCHELL K ING, M .D., M . STEPHEN K RAMER,
M .D., STEVEN M . KUSHEL, M .D., CHARLES J . KUTNER, M .D., R ICHARD E . LALLY , M .D.,
PETER LAMELAS, M .D., LUCILLE LANNA, M .D., STEPHEN G . LARK IN, M .D., PHILLIP J .
LAST ELLA , M .D., ROBERT N . LEACH, M .D., R ICHARD E . LEAHY, M .D., A RTHUR H .
LEGATE, M .D., JACK M . LEVIN , M .D., RONALD J . LUGO, M .D., JAMES W . LUNAN, M .D.,
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SOREN S . M ADDEN, M .D., M IAN A . M AJEED, M .D., THOMAS A . M ALONE, M .D., M ICHAEL
R . M ONOLESCU, M .D., JOHN A . M ARDONES, M .D., G IL Z . M ARZINEK, M .D., STANLEY D .
M EERS, M .D., DOUGLAS M . M IDDLETON, M .D., LANCE E . M ONTAUK, M .D., CHARLES JAY
M ORRIS , M .D., J.D ., PETER J . M URAN, M .D., JULIA I . NATHAN, M .D., KURT F . PAPENFUS,
M .D., JAY L . PATANKAR, M .D., HOWARD A . PETH, JR., M .D., THOMAS J . PLIURA, M .D.,
DAVID A . POGGEMEIER, M .D., YASHBIR S . RANA, M .D., A LLAN JAY RASK IN, M .D.,
KARIN V . RHODES, M .D., A TWOOD L . R ICE, III , M .D., M ANU EL A . R IVERA, M .D., A LBERT
J . JAMES ROSENTHAL, M .D., JOHN W. SANDERS, M .D., M ARTIN N . SCHNELL, M .D.,
STEVEN M . SCHREIBER, M .D., M ICHAE L J . SHAW, M .D., ROBIN R . SHAW, M .D., DAVID M .
S IWICKI, M .D., ROBERT A . SLUTSKY, M .D., ROBIN P . SMITH, D.O ., PERRY J . SPAVENTO,
M .D., LEO W . SULLIVAN, M .D., ROBERT B . SUSSMAN, M .D., M ICHAE L S . TAPLITS, M .D.,
R ICHARD E . THIST LE, JR., M .D., HARTLEY M . THOMAS, M .D., R ICHARD Y . THORPE III ,
M .D., JANE E . TONK IN, M .D., W ILLIAM D . TORRES, M .D., A LLEN G . TUCKER, M .D.,
LAURIE D . VOGEL, M .D., D EBORAH S .
W EBER, M .D., ANTHONY T . W HITE, M .D., K IPP A . YOUNG, M .D .
Plain tiffs-App ellants ,
DONALD P . A BLES, M .D., CARLOS A LVARADO, M .D., DANIE L J . ANHA LT, M .D., ROBERT
W . BATES, M .D., G EORGE B . B ERANEK, M .D., JEFFREY D . B LODGETT, D.O ., M ICHAE L L .
BROWN, M .D., PHILIP A . BROWN, M .D., M ARIANNE C . BURKE, M .D., KWOK W AI CHIU ,
M .D., DAVID S . C LARK, M .D., DARIA M . DAVIDSON, D.O ., SYLVESTER A . DOMME, JR.,
M .D., THOMAS L . EATON, M .D., DAVID S . ENGELHARDT, M .D., M ICHAE L C . F INGER,
M .D., W ILLIAM F . FLADER, M .D., JESSICA A . FURER, M .D., K ENNETH J . GALLANT, D.O .,
V IRIND D . GUPTA, M .D., STEVEN D . HANKS, M .D., JOHN R . HARRIS , M .D., STANLEY E .
HARTMAN, M .D., JAMES W . HAYDEN, M .D., B ETH E . HAYNES, M .D., JOSEPH F .
H EDERMAN, M .D., DAN H ESLINGA, M .D., JEFFREY P . HOWARD, M .D., G LORIA S .
HUCKEBY, M .D., RAYMOND F . JARRIS , JR., M .D., ROBERT J . JEDDELOH, M .D., DANIE L H .
KALLMERTEN, M .D., JAMES F . K ENNY, M .D., GARRY J . K IERNAN, M .D., JAHANGIR
KOLEINI, M .D., G . THOMAS K RAUS, M .D., JOSEPH B . L IEBMAN, M .D., ROBERT L IPPA,
M .D., ETTA LOVITT, M .D., M ICHAE L R . LOZANO, M .D., PAUL F . PASCH ALL, M .D.,
D EBORAH PORTER, M .D., FRANK L . PRASNAL, JR., M .D., PETER J . R EDEN, M .D., KARL
R ICHEY, M .D., DAVID J . R ICKETTS-K INGFISHER, M .D., COLEEN R ILEY, M .D., RODRIGO
ROJAS, M .D., KATHLEEN L . ROTH, M .D., JULIE M . SABATINOS, M .D., LOUIS SHICKER,
M .D., CHESTER J . SKIBA, JR., M .D., R . G IUSEPPI SLATER, M .D., LEE SLAVIN , M .D.,
RONALD K . STERRENBERG, D.O ., THOMAS S . TALKOWSKI, M .D., ROBERT S . TANO, M .D.,
BRUCE R . T IZES, M .D., M ONIQUE M . VAN B ERKUM, M .D., LOUIS V . V ERRE, D.O .,
H ECTOR J . V ILLANUEVA, M .D., BARRY A . W AYNE, M .D., JAMES A . W ICHSER, M .D.,
JOSEPH D . Z IRNE SKIE , M .D., PHILIP A . ZUROWSKY, M .D.,
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— v.—
Plain tiffs,
AMERICAN BOARD O F EMERGENCY M EDICINE, CHILDREN’S HOSPITA L OF M ICHIGAN,
D ETROIT R ECEIVING HOSPITAL AND UNIVERSITY H EALTH C ENTER, FORSYTH M EMORIAL
HOSPITAL, LOMA L INDA UNIVERSITY M EDICAL C ENTER, M ERCY CATHOLIC M EDICAL
C ENTER-M ISERICORDIA D IVISION, ST. ANTHONY HOSPITAL, COUNCIL OF EMERGENCY
M EDICINE R ESIDENCY D IRECTORS, M ERCY HOSPITAL AND M EDICAL C ENTER, M ETHODIST
HOSPITA L OF INDIANA, SAINT FRANCIS HOSP ITAL & M EDICAL C ENTER,
De fendan t s -Appe l lee s,
R ICHARD STENNES, M ICHAE L B ISHOP, R ICHARD BRAEN, JOSEPH C LINTON, G ERALD
H EALY , BRUCE JANIAK, SCOTT M . JONES, ROBERT KNOPP, HARVEY M EISLIN , B ENSON
M UNGER, ROBERT N EERHOUT, DOUGLAS RUND, JUDITH T INTINALLI, M ICHAE L VANCE,
G ERALD W HELAN, H ENRY A . THIEDE, M .D., R ICHARD I . SHADER, M .D., STEVEN J .
DAVIDSON, M .D., LEONARD D . HUDSON, M .D., CHILDREN’S HOSP ITAL (SAN D IEGO) ,
K ETTERING M EDICAL C ENTER, L INCOLN M EDICAL & M ENTAL H EALTH C ENTER,
LUTHERAN G ENE RAL HOSPITAL, M EDICAL COLLEGE OF PENNSYLVANIA AND HOSPITAL,
OUR LADY OF M ERCY M EDICAL C ENTER, TRI-C ITY M EDICAL C ENTER, OHIO STATE
UNIVERSITY, O REGON H EALTH SCIENCES UNIVERSITY HOSPITAL, UNIVERSITY M EDICAL
C ENTER (TUCSON, A RIZONA) , FRANK A . D ISNEY, M .D., THE JOHNS HOPKINS HOSPITAL,
PART OF THE JOHN HOPKINS H EALTH SYSTEM, OHIO STATE UNIVERSITY HOSPITAL,
PORTER M EMO RIAL HOSPITAL, R IVERSIDE M ETHODIST HOSP ITALS , UCLA M EDICAL
C ENTER, UNIVERS ITY OF CALIFORNIA (IRVINE) M EDICAL C ENTER, UNIVERSITY OF
CALIFORNIA (SAN D IEGO) M EDICAL C ENTER, UNIVERSITY HOSPITAL- SUNY AT STONY
BROOK, UNIVERSITY HOSPITAL AT THE UNIVERS ITY OF N EW M EXICO SCHOOL OF
M EDICINE, UNIVERS ITY OF M ASSACHUSETTS M EDICAL C ENTER,
— v.—
UNITED STATE S OF AMERICA,
De fenda nts ,
Interv enor -Plain tiff.
3
Be fo re :
M CLAUGHLIN , KATZMANN, and RAGGI, C ircu i t Judges .
A p p ea l f rom a judgmen t en te red in the Un i ted S ta tes D is tr ic t Co ur t for the W es tern
D i s t r ic t of N ew Yo rk (R icha rd J. A rcar a, Judge ; Le slie G . Fo sch io, M ag i s tra te Judge)
d i sm i ss ing p la in t iffs’ com p la in t . P la in t iffs asser t tha t the d i s tr ic t cou r t e rred in conclud ing
tha t they lacked an ti t ru s t s tand ing to pu rsue Sh e rm an A c t cha l lenge s to p rac t ice s and
procedu res th a t rende red them ine lig ib le fo r boa rd cer t if ica tion in eme rgency med ic ine by
the Ame r ican Bo ard of E mergen cy Med ic ine . Defe ndan ts sub m i t tha t the d is tr ic t cour t’s
ru l ing a s to an ti t ru s t s tand ing wa s co r rec t and tha t d i sm i ssa l wa s fu r the r wa r ran ted fo r lack
o f pe r sona l ju r isd ic tion and venue .
A FFIRMED. Judg e K atzm ann c oncu rs in pa rt and d issents in part in a sepa rate
op in ion .
__________________
JEREMY R . K ASHA, P ro sk au er R os e LL P , N ew Y or k, New Y or k (C ol in A .
Unde rwood , Pro ska uer Ro se L LP , Ne w Y ork , N ew Yo rk ; R a lph L .
Ha lp e rn , M itchell J. B anas , Jr., Jaeck le Fleisc hm ann & M ugel LL P ,
B u f f a lo , Ne w Y ork , on the b r ie f), fo r P la in t i ff -Appe llan t G rego ry F .
Dan ie l , M .D . , on beha l f o f h im se lf and o the rs s im i la r ly s itua ted .
JEFFREY D . U BERSAX, Jon es D ay, Cle vela nd, O hio (Ro ber t H. R aw son , Jr.,
Elizab eth A. G rov e, on the b r ie f), fo r De fendan t-Appe l lee Ame r ican
Boa rd o f Eme rgency Med ic ine .
Jona than A . D amon , L eBo eu f , L amb , G r e en e & M a cR a e , LLP , N ew Y o rk ,
New Yo rk , fo r De fendan ts -Appe l lee s Ch i ld ren ’ s Ho sp i ta l o f M ich igan ,
De troit Rec eiving Ho spital a nd U nivers ity H e al th C en te r, Lom a L inda
M edica l Cen ter an d St. A ntho ny H ospita l-Cen tral.
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Rob er t E . G lanv i lle , Ph i l lip s Ly t le , LLP , Bu f fa lo , New Y o rk , for D efend ant-
Appe l lee Counc i l o f Emergen cy Med ic ine Res idency D irec tors.
Doug lass G . Hewit t, M icha el B est & Frie dric h, L LP , Ch icag o, Illin ois, fo r
De fendan t -Appe llee Me thod i st Ho sp i ta l o f Ind iana .
Samue l W . S i lver , Sc hnade r H a r r is on Sega l & Lew i s LLP , Ph i ladelph ia ,
Penn sy lvan ia , for De fendan t-Appe llee Mercy Ca tho l ic Med ica l Cen ter –
M i se r ico rd ia D iv i sion .
Nancy G . L is ch e r, H in s haw & C u lb ertson , Ch icag o, Illin ois, for D efend ant-
Appe l lee S t . Franc is Hosp i ta l & Med ica l Cen ter .
Den ise M . Gu nter , Ne lson , Mu l l in s, R il ey & S c ar bo ro u gh , W i n st on -S a lem ,
No rth C aro lina, for D efend ant-A ppelle e Fo rsyth M em orial H ospita l.
R EENA RAGGI, C i rcu i t Judge :
Plaintif fs-ap pellan ts a re l icen sed phys ic ian s who p rac t ice o r had p rac t iced eme rgency
med ic ine th ro ug ho ut th e U ni ted St ate s a lth ou gh th ey d id no t comp le te fo rma l re s idency
t ra in ing pr og ram s in th at s pe cia lty. They a l lege tha t the de fendan ts , the Ame r ican Boa rd o f
Eme rgency Med ic ine (“ABEM” ) , the Counc i l o f Eme rgency Med ic ine Re s idency D irec tors
(“CO RD ”) , twen ty-e igh t named ho sp i tals , a nd v arious individ uals n ow or pre viou sly
a s soc ia ted with the se in s t itu t ion s and o rgan iza t ion s , co lluded to re s t ra in t rade in connec tion
w i th the p rac t ice o f eme rgency med ic ine in v io la tion o f Sec tion 1 o f the Sh erm an A ct, see
15 U .S .C . § 1 , and to monopo l ize o r a ttemp t to monopo l ize the ma rke t fo r ABEM -ce r ti f ied
and -eligible docto rs in vio lation o f Se ction 2 o f th e Sh erma n A ct, see id . § 2 . P la in t i f fs
spec ifically comp la in tha t the de fendan t s man ipu la ted the res idency t ra in ing requ iremen t fo r
ABEM ce r t if ica tion to lim i t the numbe r o f doc to r s ce rt i f ied in eme rgency med ic ine in o rde r
5
to gua ran tee supe r -compe t i tive compen sa tion fo r such doc to rs and to deny ce r t if ica tion and
its atte nda nt co mp ens ation ben efits to m em ber s of the p laint iff c lass.
P la in ti f f s now appea l a judgmen t o f the Un i ted S tate s D i s tr ic t Cou r t fo r the W es tern
D i s t r ic t of N ew Yo rk (R icha rd J. A rcar a, Judge ; Le slie G . Fo sch io, Mag i s t ra te Judge) ,
en te red on June 20 , 2003 , d i sm i ss ing the i r Second Amended Com p la in t fo r lack o f an t i t rus t
s tand ing . See Dan ie l v . Ame r ican Bd . o f Eme rgency Med ., 269 F . S u pp . 2 d 15 9 (W .D .N .Y .
2003) . De fend ants ins ist that the case w as pro perly d i sm i ssed no t on ly fo r lack o f an t i t rus t
s tand ing bu t a l so fo r lack o f pe r sona l ju r isd ic tion and venue in the We s te rn D i s tr ic t o f New
Yo rk . We ag ree w i th the de fendan t s tha t the lack o f perso nal jurisd iction a nd v enue supp orts
dism issal. Wh ile such a con clusion migh t perm it us to o rder tran sfer o f this ca se to a d i s tr ic t
whe re perso nal jurisd iction a nd v enue prop erly obtain , we c onclu de tha t such a trans fer is
no t in t h e in te r e sts of ju stice in th is case beca use th e plain tiffs lac k antitru st stand ing to
pu r sue their claim s. A cc or di ng ly, we af f irm the judgmen t o f the d is t r ic t cou r t d i sm i ss ing the
pl ain tif fs ’ c om pl ain t in its en tire ty.
I .
Ba ckg round
A .
The Pa r t ie s
A s backg round to ou r d iscuss ion o f the p la in t i f fs ’ a nt it ru st cl aims , w e b r ie f ly ou tl ine
the ro le s p layed by the pa r t ie s in the de l ive ry o f eme rgency med ica l care .
1 .
The De fendan t s -Appe l lee s
a .
Ame r ican Boa rd o f Eme rgency Med ic ine
De fendan t ABEM i s a M ich igan no t – for-p rofit co rpora tion tha t was establish ed in
6
1976 to ce r t ify phys ic ian s in eme rgency med ic ine . I t s o ff ice s , reco rd s, and s ta f f a re loca ted
in E ast L ans ing , M ichig an, a nd i ts da y-to-d ay acti vitie s tak e pla ce th ere.
L ike tw en ty- three o ther med ica l ce r t if ica tion boa rd s rep re sen t ing d if fe ren t d i sc ip l ine s
o f med ic ine and su rge ry, ABEM i s a membe r o f the Ame r ican Boa rd o f Med ica l Spec ia l t ie s
(“ABMS ”) , an umb re l la o rgan iza t ion fo rmed to as sist the m emb er spe cialty board s in
fu l f il l ing the i r m iss ions . AB EM ’s prof essed missio n, as state d in its by -law s , is to “ imp rove
t h e qua l i ty o f eme rgency med ica l ca re ,” to “e s tab li sh and ma in ta in h igh standa rd s o f
exce l lence in the spec ia lty o f eme rgency med ic ine ,” to “ imp rove med ical educa tion and
facilitie s fo r t raining eme rgen cy physician s,” to “a dm inister ev aluatio ns of spec ialists in
eme rgency med icine a pplying f or certif ication and r ecertific a t ion ,” to “g ran t and i ssue
qua l i fied phy s ic ian s cer t if ica te s o r o the r recogn it ion o f sp e c i a l know ledge and s kills in
eme rgency med ic ine and . . . suspend o r revoke same ,” and to “se rve the pub l ic , phys ic ians ,
hosp itals and med ica l schoo l s by fu rn i sh ing l is t s o f tho se D ip loma tes ce r ti f ied b y” AB EM .
AB EM By-L aw s, art. I I.
ABEM i s no t a membe r sh ip o rgan iza tion . Ra the r , like o the r ABMS bo a rd s, ABEM
e s tab li she s educa t ion a l cr i ter ia for i ts med ica l spec ia l ty , adm in is ters an exam ina t ion , and
ce r t if ie s those w ho pass a s AB EM “D ip lom a tes .” No tab ly , for pu rpo se s o f th i s ac tion ,
AB EM has nev er ad min istere d its c ertif icatio n ex am inati on i n N ew Yo rk S tate.
AB EM certifica tion is n ot a l icen se requ ired to p rac t ice eme rgency med ic ine in any
s ta te . No r i s ABEM the on ly boa rd tha t c e r t i f ie s phys ic ian s in eme rgency med ic ine . The
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Ame r ican A c a dem y o f Em ergen cy M edicin e and the A meric an B oard of O steop athic
Med ic ine also aw ard ce rtifica t io ns in eme rgency med ic ine based on the i r own s tanda rds .
Neve r the less , plain t i f fs a s se r t tha t some ho sp i ta ls re s tr ic t the i r h i r ing to ABEM -ce r ti f ied
phys ic ians , wh i le o ther s ba se compen sa t ion and promo t ion deci s ion s on ABEM ce r t if ica tion .
P la in ti f f s s u bm i t t ha t a lt er na ti ve b oa rd c er ti fi ca ti on s do n ot af f or d p h ys ic ia n s t he sam e
p re s tige o r o pp ortu nitie s f or h ig h remu ne ra tio n a s A B EM c e r t if ica tion , a re su lt o f
de fendan ts ’ purp osef ul eff orts to make ABEM ce r t if ica tion the “s ine qua non o f the p rac t ice
o f eme rgency med ic ine .” Appe l lan ts ’ B r . a t 7 .
In 197 6, w hen A BEM initially sough t app rova l as a spec ialty board from ABM S, on ly
th i rty eme rgency med ic ine resid enc y prog ram s ex isted in th e U nited Sta tes. To acce lerate
recogn i tion o f the specia l ty , ABEM p ropo sed two in i t ia l eligibility t rack s fo r doc to rs seek ing
to take it s ce rt i f ica t ion exam ina t ion : (1 ) the p rac tice track , wh ich req uired a pplica nts to have
comp le ted 7 ,000 hou r s and 60 mon th s o f p rac tic ing o r teach ing eme rgency med ic ine ; and (2 )
the re sid en cy t r a ck , wh ich requ ired app l ican t s to have comp le ted an app roved res idency
t ra in ing p ro g ram .1 F rom the s ta r t , ABEM exp re s s ly s ta ted tha t the p rac t ice t ra ck w as an
interim eligibility alte rn a t ive to rema in ava i lab le on ly fo r e igh t yea rs fo llow ing the f i rs t
1 Th i s p ropo sal wa s subm i tted , in the fi rs t in s tance , to the var iou s spec ia lty boa rd s
and med ica l as soc iat ion s unde r who se spon so r sh ip ABEM ope ra ted f rom 1976 un t i l 1986 .
These spon so r s inc luded the Ame r ican Boa rd s o f Fam i ly P rac t ice , In te rna l Med ic ine ,
Ob s te t ric s and G ynecolo gy, Otola ryngolo gy, Pedia trics, P syc h ia t ry and Neu ro logy , and
Su rg er y, a s we l l a s the Ame r ican Med ica l A s soc ia t ion , the Ame r ican Co l lege o f Eme rgency
Ph ysician s, an d th e So ciety f or A cad em ic Eme rge ncy M edic ine.
8
adm in i s tra t ion o f ABEM ’ s ce rt i f ica t ion exam ina t ion in 1980 .2 I t wa s expec ted tha t , in tha t
t im e f rame , add it iona l re s idency tra in ing p rog ram s wou ld be deve loped and acc red ited ,
mak ing i t prac t ica l to requ ire re s idency tra in ing in eme rgency med ic ine , ra the r than p ract ical
expe r ience , a s the e l ig ib i li ty requ i remen t fo r the ce r ti f ica t ion exam ina t ion .3
A s p lanned , ABEM c lo sed it s p rac t ice t rack on Ju ne 30 , 1988 . Since that da te, only
phy s ic i an s who have comp le ted a re s idency p rog ram in eme rgency med ic ine have been
eligible to take the ABEM ce r t if ica tion exam . A no tab le excep t ion ope ra ted be tween 1990
and 1995 when a numbe r o f phy s ic ian s , a l ready boa rd ce r t if ied in in te rna l med ic ine a f te r
comp le t ing a resid ency pro gram in that s p e c i a lty, w e re p e rm i tt ed to t ak e th e ABEM
2 ABEM ’ s 1976 app lica tion to ABMS fo r spec ia lty recogn i tion de sc ribed the p rac t ice
e l ig ib i li ty t rack a l te rna t ive as fo l lows :
To be e l ig ib le unde r th i s ca tego ry, the app l ican t mu s t have:
A . Accumu la ted 7 ,000 hou r s in p rac t ice and /o r teach ing o f eme rgency med ic ine
1 . accumu la ted 2 ,800 o f the 7 ,000 hou r s w i th in any 24 mo nth p eriod p rior to
any app lica tion
2 . accum u la ted the 7 ,00 0 hours o ver a m in imum of 5 years
B . Accumu la ted 50 hou r s o f app roved con tinu ing med ica l educa tion in eme rgency
med ic ine fo r each yea r in p rac t ice a f te r 1973 .
E igh t yea rs a f te r the f i rs t exam ina t ion adm in i s tra t ion , the prac t ice e l ig ib i l i ty ca tegory
w i l l exp ire .
AB EM Ap plica tion to A BM S (M ung er A ff. E x. F (Jan . 27, 1 995 )) (em pha sis ad ded ).
3 O the r ABM S -app roved spec ia lty boa rd s a lso u t il ized a tempo ra ry p ra c t ice t rack
du r ing the early yea rs o f the spec ia lty. O f the s ix new med ica l spec ia l ty boa rd s e s tab l i shed
s ince 1 95 0, in clu din g A B EM , a l l o ffe red p ract ice- t rack a l te rna t ive s to re sidency t ra in ing fo r
be tween fou r and ten yea r s , a f te r wh ich succe s sfu l comp le tion o f re si de n cy t ra in in g be c am e
the e ssen t ia l qua li f ica t ion to s i t fo r a ce r ti f ica t ion exam . O f th i rty- th ree ABM S -app roved
sub spec ia l t ie s e s tab li shed s ince 1975 , a ll o f fe red p rac t ice – t rack a l terna t ive s fo r b etw ee n tw o
and five years b efo re in sistin g on resid enc y trainin g. M ung er A ff. ¶ ¶ 27 -28 & Ex . J.
9
ce r t if ica tion exam ina t ion w i thou t comp le t ing ano the r re s idency p rog ram i n em ergency
med ic ine . P la in ti f f s a sse r t tha t ABEM ’ s recogn i tion o f th i s excep t ion wa s i t sel f pa r t o f the
def end ants ’ co nsp irato rial sc hem e.
b .
Cou nc i l of Em ergency M ed ic ine R es idency D irec to rs
De fendan t CO RD , also a M ich igan not-fo r-prof it co rpo ra tion , wa s e stab l ished in 1990
a s a na t iona l a s soc ia tion to fac i li ta te commun ica t ion among the d i rec to r s o f eme rgency
med ic ine re s idency tra in ing p rog ram s a round the coun try. CORD ’ s s ta ted pu rpo se s inc lude
imp rov ing the qu ality of em ergen cy med ical care , establish ing an d m aintain ing h igh
s tandard s o f ex ce l lence in eme rgency med icine p rog ram s , and imp rov ing the qual i ty o f
in s truc t ion by the exc han ge o f ide as amo ng t he f acu lties o f su ch p rog ram s. P la in ti f f s asser t
tha t COR D seek s to ma in ta in fo rma l re s idency tra in ing a s the exclu s ive p re requ is i te to tak ing
t he ABEM c er ti fi ca ti on e xam .
c .
The Ho spital D efen dants
Twen ty -eigh t ho sp i ta ls w e r e named a s de fendan ts in p la in t if f s ’ Second Amended
Comp laint. To the ex ten t the se ho sp i ta ls h i re ABEM -ce r ti f ied doc to r s to pe r fo rm eme rgency
med ica l se rv ice s , they may be v iewed a s con sume r s who , p la in t if f s subm i t, pay a p rem ium
fo r the A BEM crede ntial. To the ex tent the se ho spita l d e f e ndan t s a lso ope ra te re s idency
t ra in ing p rog ram s , they may be view ed as supp liers of th e only do ctors p resen tly eligible to
take the A BEM certi fica tion exam. P l a in t if f s subm i t tha t the ho sp i ta l s , l ike CORD , thu s
have an inte rest in pe rpe tuat ing fo rma l re s idency tra in ing a s the e s sen tia l p re requ i si te fo r the
10
AB EM certi fica tion exam.
O f th e tw en ty-e ig ht ho sp ita ls o rig in all y su ed in th is c as e, o nl y n ine rema in a s
appe l lees : Ch i ld ren ’s Hosp i t al of M ichiga n, D etroit R eceiv ing H ospital a nd U nivers ity
He alth Cen ter, Fors yth Memo r ia l Ho sp i tal , Loma L inda Un ive rs i ty Med ica l Cen te r , Me rcy
Cath olic Med ica l Cen te r-M i se r ico rd ia D iv is ion , St. A ntho ny Ho spital, Me rcy Ho sp i ta l and
Med ica l Ce nter , M etho dist H osp ital o f In dian a, a n d S ain t F ranc i s Ho sp ita l and Med ica l
Cen te r ( the “hosp i ta l defendan ts”) .4 Each o f the se de fendan t s is inco rpo ra ted in a s ta te o the r
than New Yo rk and ma in ta in s i t s p r inc ipa l p lace o f bu s ines s ou t side New Yo rk . 5
2 .
The Plaintif fs-A ppella nts
P la in ti f f -appe l lan t D r . G rego ry F . Dan ie l, the o the r 175 named p la in t if f s , and the
app rox ima te ly 14 ,000 membe r s o f the p ropo sed p la in t if f c la s s a re phys ic ian s who p rac t ice
4 O f the o the r de fendan t s named in th is ac t ion , the d i s tr ic t cou r t d ism i s sed f if teen
hosp itals and a l l bu t two ind iv idua l de fendan t s in va r iou s decisio ns no t challen ged o n app eal .
See Dan ie l v . Ame r ican Bd . o f Eme rgency Med . , 212 F .R.D . 134 (W.D .N.Y . 2002 ); Dan ie l
v . Ame r ican Bd . o f Eme rgency Med . , 235 F . Supp . 2d 194 (W .D .N .Y. 2 002 ); Dan ie l v .
Ame r ican Bd . o f Eme rgency Med . , 237 F . Su pp . 2 d 336 (W .D .N .Y . 2002 ); Dan ie l v .
Ame r ican Bd . o f Eme rgency Med . , 988 F. Su pp. 12 7, 278 -79 (W .D.N .Y. 19 97); Dan ie l v .
Am e r ican Bd . o f Eme rgency Med . , 802 F . Sup p. 912 (W .D.N .Y. 19 92). In additi on ,
p la in ti f f s reached p re judgmen t se t tlemen t s w i th th ree d ism i s sed and two rema in ing ho sp ita l
de fendan ts . Fina lly, the appe al to this c ourt w as w ithdraw n or v olun tarily dismiss ed w ith
re spec t to the two rema in ing ind iv idua l de fendan ts , Hen ry A . Th iede and Fr an k A . D isn ey,
and two hosp i ta l de fendan ts , Ou r Lady o f Me rcy Med ica l Cen te r and The John s Hopk in s
Ho spita l, Pa rt of the J ohn s H opk ins H ealth System.
5 Of the twen ty-e igh t or ig ina l ho sp i ta l defend an ts , none w as loca ted in the W es tern
D i s t r ic t o f New Y o rk , and on ly two we re loca ted in New Y o r k S ta te : Un ive r s ity Ho sp i ta l
– S ta te Un iver s i ty o f New Yo rk a t S tony B rook , loca ted in Su f fo lk Coun ty, and L incoln
M ed i ca l an d M en tal H ea lth C en ter , lo ca ted in N ew Y or k C ity. The se ho sp it a l s w e r e
dism issed a nd ar e not b efore us on appe al.
11
o r have p rac t iced eme rgency med ic ine . They a llege tha t ABEM has re fused o r wou ld re fuse
to a l low p lain t if f s to take i ts ce r ti f ica t ion exam ina t ion becau se they have no t comp le ted
re s idency t ra in in g pr og ram s in eme rgency med ic ine o r they fa i led to mee t the p rac tice track
r eq u ir em ents be fo re ABEM c lo sed tha t op t ion in 1988 .6 P la in ti f f s c la im tha t they cou ld
satis fy the pra ctice eligi bility alte rna tive a t pre sen t, if allo we d to do s o.
T o u se D r . Dan ie l a s an examp le , he app l ied to take th e AB EM certifica tion test in
1988 , b e f or e th e p ra c ti ce tr a ck c lo s ed . ABEM re jected h i s app l ica t ion becau se he had no t
comp le ted a re s idency tra in ing p rog ram in eme rgency med ic ine and he then lacked the
requ i red 60 mon ths ’ ex pe rie nc e. A pp ar en tly, D r . Dan ie l had p rac t iced eme rgency med ic ine
fo r the req uired 7 ,000 h ours, b ut he h ad ac quired that ex perien ce in l es s t ha n fi ve ye a rs . B y
the t ime D r . Dan ie l comp le ted 60 mon th s ’ wo rk in eme rgency med ic ine , ABEM had c lo sed
the p rac t ice t rack a l te rna t ive to take i ts ce rt i f ica tion exam ina t ion . D r . Dan ie l none the less
prese ntly ho ld s an al t e rn a t ive ce r t if ica tion in eme rgency med ic ine f rom the Ame r ican
A c a dem y of Emerg ency M edicin e. He has h eld an attend ing phy s ic ian po s it ion in the
eme rg ency med ic ine depar tmen t o f S i s ter s o f Cha r ity Ho sp i ta l in Bu f fa lo , New Y o rk , and
a s ta f f phys ic ian po s i tion in eme rgency med ic ine a t S t . Jo seph ’ s Med ica l Cen ter H ospital in
Cheek towaga , New Y o rk . Ce r ta in o ther named p la in t i f fs have s im i la r ly qua li f ied fo r
a l terna t ive ce rtif ica tio ns in em er ge nc y m ed i c in e and have he ld po si t ion s in ho sp ita l
6 Named p la in t if f John A . T immons , M .D . , h a s now t ak en and p as s ed the ABEM
ce r t if ica tion exam , a l though he wa s o r ig ina l ly den ied the oppo r tun ity to do so when he
attem pted to es tabli sh e ligib ility und er th e pr actic e trac k af ter th at op tion clos ed in 198 8.
12
em erg enc y med icine dep artm ents dur ing the p end enc y of th is ac tion .
B .
The A l leged An t i tru s t Con sp iracy
P la in t if f s a l lege tha t ABEM , COR D , nume rous nam ed and unnam ed hosp i ta ls , and
va r iou s ind iv idua l s a ssoc ia ted w i th these o rgan iza t ion s and in s ti tu tion s , by c lo s ing the
ABEM practic e track wh ile placin g a pr emium o n A BEM certifica tion, ha ve un lawf ully
re s tra ined trade and monopo l ized the ma rke t fo r ABEM -ce r ti f ied and -e l ig ib le phys ic ians ,
in ju rin g c om pe titi on ge ne ra lly a nd pl ain tif fs sp ec ifi ca lly. 7
With re spec t to the ef fec t on compe ti t ion , p lain t if f s a l lege tha t de fendan t s con sp i red
to l im it the poo l o f cand ida te s e l ig ib le to s i t fo r the ABEM ce r t i f ica t ion ex am ination to
doc tors wh o had com pleted form al reside ncy pro gram s (with the lim i ted excep t ion from 1990
to 1995 fo r doc to rs a l ready ce r t if ied in in te rna l med ic ine ) , de l ibera te ly exc lud ing phys ic ian s
l ike the plaintiff s wh o, des pite the ir lack o f re s idency t ra in ing , po sse s s yea r s o f eme rgency
med ic ine exp erien ce. T hey su bm it tha t, as a resu l t o f th i s scheme , the de fendan t s have
c rea ted an a r t if ic ia l sho r tage o f ABEM -ce r ti f ied and -e l ig ib le phys ic ian s , the reby a l low ing
doc tors p oss essin g th is cre den tial to dem and sup er-c om petit ive r em une ratio n.
With spec i f ic re fe rence to them se lves , p la in ti f f s a sse r t tha t the con sp i racy has
7 Plaintif fs alle g e th a t th e re levan t geog raph ic ma rke t is the Un i ted S ta tes and the
r e l e v an t p rodu ct m ark et is th e m ark et fo r “A BEM certi fied and AB EM eligi ble . . .
eme rgency phy s ic ian s .” Second Am . Comp l . ¶¶ 91 -92 . De fend ants subm i t tha t the re levan t
p roduc t mark et is broa der, inc luding all emerge ncy room p hys ic ians , no t on ly those wh o are
ABEM certi fied or e ligib le. Bec ause the distric t court s t ru c tured disco very to co ncen trate
the pa r t ie s ’ e f fo rt s on ce r tain top ic s o the r than the re levan t geog raph ic and p roduc t ma rke ts ,
w e do not attemp t to reso lve this dispu te on th e pres ent rec ord. F or pu rpose s of th is app eal ,
we assu me that t he r elev ant m ark ets a re as alleg ed b y the p laint iffs .
13
unre ason ably p re v en te d th em f rom compe t ing in the re levan t ma rke t becau se the ho sp i ta l
defe ndan ts and “ the m ajority of d esirab le and o r /be tte r -pay ing eme rgency depa r tmen ts , now
requ i re , o r w i l l soon requ ire ,” ABEM ce r t i f ica t i on a s a p re requ i s ite to emp loymen t o r
p ro fe s s iona l advancemen t . Second Am . Comp l . ¶ 82 . A s a re su l t, p lain t if f s subm i t tha t they
rece ive “ sub s tan t ia lly le s s remune ra tion than ABEM ce r t i f ied phy sic ian s” and they have
“ su f fe red and con t inue [ ] to su f fe r sub s tan t ial lo s se s o f income fo r tha t per iod du ring wh ich
they wo u l d h av e b e en e lig ib l e to tak e th e ABEM certifica tion ex amin ation a nd co mp ete fo r
h ighe r sa la rie s .” Id . ¶ 104 . P la in ti f f s fu rthe r a sse r t tha t , a s a re su l t o f the con sp i racy , they
have been “den ied eme rgency med ic ine po si t ion s at hos pitals, trauma c enters , and a cademic
cen ters th roughou t the Un i ted S ta te s so le ly by rea son o f no t be ing ABEM c e r ti f ied o r ABEM
eligible ” ; “ fo r c e d to compe te fo r an eve r -dec rea s ing poo l o f po s it ion s ava i lab le to non –
ABEM ce r t if ied eme rgency phys ic ian s” ; and p rec luded from ob ta in ing p os i t ions “ in mo re
desira ble loca tion s .” Id . ¶¶ 10 4-10 7. Fina lly, plaintiffs a llege th at th e ir la ck of ABEM
ce r t if ica tion ha s re su lted in membe r s o f the c la s s be ing d i scha rged , demo ted , and re lega ted
to und esirab le wo rk assig nm ents, “a ll w i th concom i tan t lo s se s o f remune ra tion .” Id . ¶¶ 108 –
09 .8
8 P la in ti f f s have no t a lway s been con s i sten t in labe ling the theo ry o f th e i r an t i trus t
c la ims . In the i r in i tia l b rie f to th i s cou r t , they appea red to a rgue a g roup boyco t t . G roup
bo ycotts “gene ra l ly cons is t o f ag reemen ts by two o r m o re pe rsons no t to do bus iness w i t h
o the r individ uals, or to do b usine ss w ith them only on spec i f ied te rm s .” Bala klaw v. Lo vell ,
14 F .3d 793 , 800 (2d C i r . 1994 ) (c ita t ion and emp hasis omitted ). Def enda nts, howe ver, no te
in the ir appe l la te br ief tha t the p la in t iffs express ly d isc la imed tha t theory in the distric t court,
exp la in ing tha t the i r c la im i s “ [n ]o t techn ica l ly” a g roup boyco tt bu t , in s tead , “a con sp i racy
[ c la im ] to ra ise the p rice s and keep th e p r ice s up .” Dan ie l v . Ame r ican Bd . o f Eme rgency
14
C .
The P rocedu ra l Backg round
The h i s to ry o f proc eedin gs in th i s ca se i s ex ten s ive and comp lex . We he re re fe rence
only thos e parts releva nt to this a ppea l.
1 .
The Orig inal an d First A men ded C om plaints
When th i s ac t ion commenced on Sep tembe r 25 , 1990 , no an t i tru s t v io la t ion wa s
p leaded . Instea d, a sing le plain tiff, D r. Dan ie l , su ed a s ing le de fendan t, ABEM , in New
York S ta te cou r t fo r a l leged v io lat ion s o f the New Yo rk H um an R igh ts L aw , see N .Y . Exec .
Law §§ 290 -301 , a s we l l a s the Due P roce s s and Equa l P ro tec tion C l au s e s o f the
Con s t i tu t ion , see U .S . Con s t ., amend . X IV , a s a re su lt o f ABEM ’ s 1988 re fu sa l to a l low
Dan ie l to s it fo r it s ce rt i f ica t ion exam ina t ion .9 ABEM remov ed the ac t ion to federa l cou r t
and moved to d i sm is s the comp la in t, p romp t ing Dan ie l to amend his plead ing to s ubstitu te
f ed e ra l an t i trus t c la ims for those ra ised und er the Co ns t i tu t ion and to ad d AB EM ’s board
Med . , 90 -CV -1086A , T r . a t 63 (W .D .N .Y . May 23 , 2003 ). In the i r rep ly b r ie f , p la in ti f f s
om i t ted any re fe rence to a g roup boyco t t , focu s ing in s tead on a theo ry o f ma rke t exc lu s ion .
A t o ra l a rgumen t , they exp la ined tha t, in fac t , the i r theo ry wou ld depend on the re levan t
mark et: if the m arket i s de f ined to inc lude a l l eme rgency phy s ic ian s , the i r theo ry i s g roup
boycott; if the m arket is l im ited to ABEM -ce r t i fied and -eligible physician s, their the ory is
mark e t exc lusio n. A s no te d i n t he imm e di at el y p re ce di ng fo o tn o te , o n th is ap p ea l, we
a ss ume tha t p la in t if f s ’ na rrowe r ma rke t def in i tion w i l l p reva i l. Neve r thele s s , i t make s no
d i f fe rence to ou r analysis wh ich m arket d efinition contro ls this case no r whe the r p la in t i f fs ’
cla im s a re pr es en ted on a g ro up -b oyc ot t o r m ar ke t-e xc lu sio n t he or y.
9 D a n ie l a ll eg ed th a t ABEM v io la ted the New Yo rk Hum an R igh t s Law by requ i ring
him “ to subm i t a pho tog raph w i th h i s app lica tion to take th e te s t,” Comp l . ¶ 7 , and the
Fou rteenth Amendmen t “by sub jec t ing [h im] to arb i trary and cap r ic iou s requ i remen ts on a
se le c t ive ba s i s when the same a re no t requ i red o f o the rs seek ing to be qua li f ied a s
D ip loma te s o f the Ame r ican Boa rd o f Eme rgency Med ic ine ,” id . ¶ 13 .
15
memb ers a s ind ivid ual d efe nda nts. See Firs t Am . Comp l. ¶¶ 2 8, 85 -10 0.
O n Ap r i l 5 , 1 991 , ABEM and i t s boa rd membe r s moved to d ism i s s the f i r st amended
p lead ing . The ma t te r wa s re fe r red to Mag i s t ra te Judge Les l ie G . Fosch io w ho , on F ebruary
2 , 1992 , is sued the f i r st o f wh at wo uld b e ma ny caref ully reason ed, de tailed rep orts in th is
ca se . Mag i s t ra te Judge Fo sch io recommended tha t the d i s tr ic t cou r t g ran t d i sm i s sa l fo r lack
o f pe r sona l ju r isd ic tion a s to a ll ind iv idua l de fendan t s excep t D r . Hen ry A . Th iede , a New
York r e si d en t wh o h ad fo rm er ly se rved a s an ABEM boa rd m em ber and dire ctor . He fu r the r
recommended tha t the de fendan t s’ mo t ion to d i sm i s s fo r fa i lu re to s ta te an an ti t ru s t c la im be
den ied . The d i s t ric t cour t ado pted thes e rec omme nda tion s on Au gus t 20 , 199 2. See Dan ie l
v . Ame r ican Bd . o f Eme rgency Med . , 802 F . Supp . 912 , 918 (W .D .N .Y . 1992 ) ( inco rpo ra ting
ma gistr ate ju dge ’s rep ort).
2 .
The Second Amended Com p la in t
Tw o yea rs la te r , on Janua ry 13 , 1994 , D r . Dan ie l amended h is comp la in t a second
t ime , a dd in g 17 5 ph ys ic ia ns as nam ed p la in ti ff s a nd CORD , twen ty -e igh t ho sp i ta ls , and
F rank A . D i sney, a fo rme r ABEM d i rec to r who re s ided in the d is t r ic t , a s named de fendan ts .
The named p la in ti f f s sough t to rep res en t a c la s s con s i s ting o f 14 ,000 phys ic ian s who
“curre ntly p rac t ice o r have p rac t iced eme rgency med ic ine in the Un i ted S ta te s.” S e co n d Am .
Comp l. ¶ 23 . The o r ig ina l Human R igh t s Law c la im wa s de le ted f rom the Second Amended
Comp laint, wh ich now al leged on ly an t i tru s t cau se s o f ac tion . Th is Second Amended
Comp laint is the oper ative p leadin g fo r purp oses o f this ap peal.
a .
The In i tia l Mo t ion to D i sm i ss the Second Amended Comp la in t
16
In May 1994 , a f te r p re lim ina ry d i scove ry lim i ted to i ssue s o f ju r isd i c tion and
imm un ity, the de fendan ts moved to d i sm i s s the Second Amended Com p la in t or, alterna tively,
fo r summa ry judgmen t , on va r ious g rounds includ ing the statute o f limitatio ns, failu re to state
a claim , certain immun i ty de fen se s , lack o f pe rsona l ju r i sd ic t ion , and imp rope r venue . A f te r
rece iv ing two repo rts from M agistrate Judg e Fo schio recommend ing aga ins t d i sm i ssa l , the
d i s tr ic t cou r t so ru led o n N ovemb er 1 9, 19 97. See Dan ie l v . Ame r ican Bd . o f Eme rgency
Med . , 988 F. S upp . 112 , 117 (W .D .N .Y . 1997 ) (adop ting recommenda t ion to deny
de fendan ts ’ mo t ion to d i sm i ss on g round s o f sta tu te o f l im i ta tion s and f ailure to state a c laim
and in corp orating mag istrate judg e’s rep ort); Dan ie l v . Ame r ican Bd . o f Eme rgency Med . ,
988 F . Supp . 127 , 143 -45 (W .D .N .Y . 1997 ) (adop t ing recomm enda t ion to deny de fendan ts ’
mo t ion to d i sm i ss fo r lack o f pe r sona l ju r isd ic tion and imp roper venue and inco rpo ra ting
mag is tra te judg e’s repor t) . 1 0
With re spec t to pe r sona l ju ri sd ic t ion , an a rgumen t tha t had been ra i sed in suppo r t o f
d i sm i ssa l by a l l defendan t s -appe l lee s excep t ABEM , the d i s tr ic t cou r t concluded tha t New
York law d id no t p rov ide fo r pe r sona l jurisdictio n ov er CO RD and th e hos pital de fend ants
1 0 In i ts second N ovem ber 1 9 , 1997 op in ion , the d i s tr ic t cou r t re jec ted bo th a
con s t itu t iona l cha l lenge to the se rv ice o f p rocess p rov i s ion in Sec t ion 12 o f the C layton Ac t
and defend an t Forsy th M emor ia l H osp i ta l’s mo t ion to c er t ify tha t ques t ion for in ter locu tory
appe al. Da niel v . Ame r ican Bd . o f Eme rgency Med . , 988 F . Supp . a t 144 -45 . The
con s t itu t iona l cha l lenge had p rom pted th e U nited S tates’ inte rven tion in this a ction . See 28
U .S .C . § 2403 (a ) . Th is issue is no t be fo re us on appea l , no r is the Un i ted S ta tes .
17
bu t tha t Sect ion 12 o f the C layton Ac t did . See id . at 143 -44 , 197 -205 .1 1 A s fo r the
de fendan ts ’ venue cha l lenge , th e d i s tr ic t cou r t concluded that venue wa s p rope r in the
We s tern D i s t r ic t o f New Yo rk a s to ABEM unde r Sec t ion 12 o f the C layton Ac t and a s to all
defe ndan ts unde r the gene ra l fede ra l venue s ta tu te , 28 U.S .C. § 139 1(b ). See id . a t 144 , 256 –
63 , 27 1- 76 . O n O cto be r 9 , 20 02 , CORD , M er cy H osp i ta l , and Me thod i s t Ho sp ita l , jo ined
by o t h e r d e fendan t s , moved the d i s tr ic t cou r t to ce r t ify fo r in te rlocu to ry appeal i ts Sec t ion
12 rulin g s a s to pers onal ju risdiction and v enue , but the district co urt nev er ruled on th is
mo t ion .
b .
The Seco nd M otion to D i sm i s s the Second Amended Comp la in t
The par t ies proceed ed to a seco nd pha se of d isco very l im ited to issues re la ted to c lass
ce r t if ica tion . W hen , upo n comp letio n of this d isco ver y, p la in t i f fs moved fo r c lass
ce r t if ica tion , de fendan t s c ro s sed -moved once aga in fo r d i sm i ssa l , th i s t ime a s se r t ing
p la in t i f fs ’ lack o f “an t it ru s t s tand ing .” Once aga in , the mo t ion s we re refe rred to M agistrate
Judge Fosch io , whose repor t recommend ing d i sm i s sa l wa s adop ted by the d i st r ic t cou r t on
June 30, 2 003 . See Dan ie l v . Ame r ican Bd . o f Eme rgency Med ., 269 F . Supp . 2d 159 , 163 –
64 (W .D .N .Y . 20 0 3) (g ra n ti ng d ism issa l a nd incorp ora t ing ma g is tra te judge’s repo r t) .
App lying a two -pa r t ana lys i s to the an ti t ru s t s tand ing inqu iry, the d i s tr ic t cou r t concluded that
p la in ti f f s (1 ) fa iled to al lege an “an t it ru s t in ju ry” becau se they we re them se lve s seek ing to
1 1 The two ind iv idua l de fendan ts named in the Second Amended Com p la in t, Th iede
and Disn ey, both Roche s te r , New Yo rk res iden ts , a lso d id no t ra ise ju r isd ic t iona l de fenses ,
see Dan ie l v . Ame r ican Bd . o f Eme rgency Med . , 988 F . Supp . a t 148 n .4 , b u t these
ind iv idua l s a re no t be fo re u s on appea l, a s no ted supra no te 5 .
18
cha rge supe r -compe t i tive fee s fo r the i r se rv ice s ; and (2 ) we re no t “ef f ic ien t en fo rce r s” o f the
an t i t rus t law s becau se they sough t to jo in , no t to d i sband , the comp la ined -o f ca r tel in o rde r
to sha re in the “h ighe r level s o f compen sa tion c reated by the cha rged con sp i racy .” See id . a t
163 -64 . Th is ap pea l foll ow ed.
II .
D i scu s s ion
A .
Sec t ion 12 o f the C layton Ac t Doe s No t Pe rm i t the Exe rc ise of P e r sona l
Ju r i sd ic t ion Ove r COR D and the Ho sp i ta l De fendan t s in the We s te rn D i s tr ic t
of N ew Y ork
With the excep tion o f ABEM , a ll de fendan ts be fo re u s on th i s appea l had mo ved in
the d i s tr ic t cou r t fo r d i sm i ssa l o f th i s ac tion fo r lack o f pe r sona l ju r isd ic tion .1 2 The d i s t ric t
cour t re jected the mo t ion on the me r it s , ru l ing tha t , a l though New York law d id n o t afford
pe r sona l juris dicti on o ver thes e de fen dan ts, see N .Y . C .P.L .R . §§ 301 -302 , Sec tion 12 o f the
C lay ton Ac t did . See Dan ie l v . Ame r ican Bd . o f Eme rgency Med . , 988 F . Supp . a t 197 -255 .
P la in ti f f s do no t d i spu te the d i s tr ic t cou r t ’s conc lu sion abou t New Yo rk law , bu t de fendan ts –
appe l lee s (aga in w i th the excep tion o f ABEM ) do cha l lenge the d is t r ic t cou r t ’s con s t ruc t ion
of C layton Ac t Se ction 12 t o su ppo rt pe rson al jur isdic tion in th is ca se. A cc or di ng ly, these
“ ju r isd ic tion de fendan t s” subm i t tha t lack o f pe r sona l ju r isd ic tion a f fo rd s an a l te rna t ive
1 2 Ap paren tly, the district co urt had conc luded on its co nsid e ra t i on o f de fendan ts ’
mo t ion to d i sm i s s the F i r s t Amended Com p la in t tha t it had pe r sona l ju r isd ic tion ove r ABEM
pu r suan t to Sec t ion 12 o f the C layton Ac t , 15 U .S .C . § 22 , a conc lu s ion de fendan t s d id no t
d i spu te . See Dan ie l v . Ame r ican Bd . o f Eme rgency Med . , 802 F . Supp . a t 918 -19 . ABEM
neve r objec ted to p erson al ju r isd ic t ion in the d is t r ic t cou r t w i th re spec t to the Second
Amended Comp la in t , a rgu ing on ly tha t venue wa s imp rop e r in the d istrict . See Dan ie l v .
Ame r ican Bd . o f Eme rgency Med . , 988 F. S upp . at 19 7.
19
g round for af firma nce o f the ju dgm ent of dism issal in this cas e. See , e .g ., ACEqu ip L td . v .
Ame r ican Eng ’g Co rp ., 315 F .3d 15 1 , 155 (2d C ir . 2003 ) (“Our co ur t may , of course , aff irm
the d i s tr ic t cou r t ’s judgmen t on any grou nd ap pearin g in the record , even if the g roun d is
d ifferen t from the one re l ied o n by the d is tr ic t cour t .”) .1 3
W e revi ew d e novo the d i st r ic t cou r t’ s lega l conc lu s ion s rega rd ing per sona l
ju r isd ic tion , see Sunwa rd E lec s . , Inc . v . McD ona ld , 362 F .3d 17 , 22 (2 d C ir. 2004 ); U .S .
T i tan , Inc . v . Guangzhou Zhen Hua Sh ipp ing Co ., 24 1 F. 3d 1 35 , 1 5 1 ( 2d C ir . 2 0 01 ), an d we
conc lude tha t Sect ion 12 o f the C layton Ac t d id no t confer p ersona l jur isd ic t ion ov er th e
ju r isd ic tion de fendan ts in th i s ca se .
1 .
The Wo r ldw ide Se rv ice o f P roce s s P rov i s ion o f C layton Ac t Sec tion 12
Can Supp ly Pe r sona l Ju r i sd ic t ion On ly in Ca se s Whe re Ven ue Is
E s tab l ished Unde r Sec t ion 12
a .
Sec t ion 12
Sec t ion 12 o f the C lay ton Ac t s ta tes :
Any su i t, ac tion , o r p roceed ing unde r the an t i t rus t laws aga ins t a co rpo ra tion
may be br oug ht no t only in the ju dicial d istrict wh ereof it is an inh abitan t, bu t
a lso in any d is tr i c t wh e r ein it m ay be fo und or tran sacts b usine ss; and all
p rocess in such ca se s may be se rved in the d i s tr ic t of w hich it is a n inh abitan t,
o r whe reve r it may be found .
15 U .S .C . § 22 . As th is lan guage make s p la in , the sec t ion co ns is ts of two par ts . The pa r t
1 3 Inde ed, w hile de fend ants initia lly filed a cro ss-app eal raisin g cha llenge s to
in te rlocu to ry ru l ing s by the d i s tr ic t cou r t , inc lud ing i t s ru l ing s on pe r sona l ju r isd ic tion and
venue , ou r cou r t d i sm i ssed th e cro ss-a ppe al as unn ece ssar y. See Powe l l v . Sch rive r, 175
F .3d 107 , 113 (2d C i r . 1999 ) (conc lud ing tha t , w i thou t c ross -appea l , de fendan t may ra ise a s
a l terna t ive groun d for aff irmance q ua l if ied imm un i ty defense re jec ted by d is tr ic t cour t) .
20
before the sem ico lon add re s se s venue , pe rm i t ting an t it ru s t ac t ion s aga in st co rpo ra t ion s to be
ma in ta ined “no t on ly in the jud ic ia l d is tr ic t whe reo f [ the co rpo ra te de fendan t ] i s an
inhab itant, bu t a l so in any d i s tr ic t whe re in i t may be found o r t ran sac t s bu sine s s .” The p ar t
a f te r the sem ico lon p rov ide s fo r wo r ldw ide se rv ice o f p roce s s and , the re fo re , the exe rc ise o f
pe r sona l jur isd ic t ion “ in such c ases .” In th i s ca se , it i s und i spu ted tha t the venue p rov i s ion
o f Sec t ion 12 does no t app ly to any o f the ju r isd ic tion de fendan ts .1 4 Thu s , in rev iew ing the
d i s tr ic t cour t’s exe rcise o f pers onal ju r isd ic t i on ove r the se de fendan t s, we mu s t dec ide
whe the r se rv ice of p roces s (and perso nal jurisd iction) is a vailab le und er Se ction 1 2 on ly in
ca se s sa t is fying the sec t ion ’ s spec if ic venue p rov is ion or rega rd les s how venue i s e stab l ished .
The an swe r tu rn s on con s t ruc t ion o f the in troduc to ry ph ra se “ in such ca se s” in the
p rocess p rov i s ion , wh ich de f ines the scope o f i ts app l icab il i ty. P la in ly, the ph rase re fe r s back
to the venu e pro vision ; the qu estion is wh ether it re fers b ack in wh ole or in part. If “ in such
cases” re fe r s back to the ph ra se “ [a ]ny suit, a ction , or p roc eed ing und er th e an titrus t law s,”
then wo r ldw ide p roce ss wou ld be ava i lab le in eve ry an t i tru s t ca se , w i thou t rega rd to how
venue wa s e s tab li shed . On the o the r hand , i f “ in such cases” re fe rs on ly to those an t i trus t
ac t ion s in w hich v enue is estab lished p ursua nt to S ectio n 12 , then the wo r ldw ide p rocess
p rov i s ion wou ld be o f no he lp in e s tab li sh ing pe rsona l ju r i sd ic t ion in ca se s whe re venue
depended on o the r s ta tu tes .
1 4 To e s tab li sh venue a s to the se de f endan t s , the p lain t if f s appa ren tly re l ied on the
gen eral v enu e sta tute, 2 8 U .S.C . § 13 91( b). See infra Pa r t II .B .3 .
21
b .
The C i rcu i t Sp l i t on th e Re la t ion sh ip Be tween Venue and
Se rv ice o f P roce s s in Sec t ion 12
O u r s is te r c ircu i ts a re sp l i t ove r the p rope r in te rp re ta tion o f the venue and p rocess
prov i s ion s o f Sec t ion 12 . The Th i rd and N in th C i rcu i ts ho ld tha t Sec tion 12 ’ s se rv ice o f
p rocess p rov i s ion i s “ independen t o f and doe s no t requ i re sa t i sfac t ion o f” the sec t ion ’s venue
p rov i s ion . In re Au to . Re f in i sh ing Pa in t An t it ru s t L i t ig ., 358 F .3d 288 , 297 (3d C ir . 2004) ;
see Ac t ion Emb ro ide ry Co rp . v . A t lan t ic Emb ro ide ry, Inc ., 368 F .3d 1174 , 1179-80 (9 th C ir .
2004 ) (ho ld ing tha t , “unde r Sec tion 12 of th e C layton Ac t , the ex is tence o f pe r sona l
ju r isd ic tion ove r an antitrust d efen dant d oes n ot dep end u pon there b eing p rope r ven ue in tha t
cour t”) ; Go -V ideo , Inc . v . Aka i E lec . Co ., 885 F .2d 1406 , 1408 -13 (9 th C i r. 1989 ) (re ject ing
a rgumen t tha t an t i trus t p la in t iff mus t sa t isfy Sec t ion 1 2’s venu e pro vision to ava il i t se l f o f
its wo r ldw ide se rv ice o f p roce s s au tho r iza tion ) . The D i s t r ic t of Co lumb ia C ircu i t , howev er ,
ho ld s that “[ t]he lan guag e of th e statute is pla in , and i t s me anin g se em s cle ar: . . .
[ I ]nvoca tion of the nation wid e serv ice clau se rests on sa t is fying the venue p rov i sion .” GTE
New Med ia Se rv s . Inc . v . Be l lSou th Co rp ., 199 F .3d 1343 , 1351 (D .C . C i r . 2000 ) . We have
acknow ledged this s plit, w itho ut o urse lves dec idin g th e issu e. See In re Magne t ic Aud io tape
An t i t ru s t L i tig ., 334 F .3d 204 , 207 (2d C ir . 200 3) .
No t ins ign i f ican tly , howeve r , th is cou r t was among the f i rs t to con s ide r the
relation ship be tween the venue and se rv ice p rov i sion s o f Sec t i on 1 2 of the C layton A ct.
Ove r forty yea rs ago , in Go ld law r , Inc . v . He iman , we no ted tha t the two pa r t s o f Sec t ion 12
were so c lo sely re la ted tha t “ the ex tra te rr i to r ia l se rv ice p r iv ilege is g iven only when the o the r
22
requ ireme nts [pe r tain ing to venue ] a re sa t is f ied ,” 288 F .2d 579 , 581 (2d Cir. 19 61) (emp hasis
added ) , rev ’d on o the r g round s, 369 U .S . 463 (19 62) . Becau se G o ld law r’ s ob se rva t ion wa s
no t nece s sa ry to the cou r t’ s ru ling , it con s ti tu te s d ic tum that do es no t specif ically contro l this
ca se . Ne verthe less, w e reco gniz e th a t th e in f luence o f G o ld law r’s d ic tum ha s been
signif icant. When the D .C. C ircuit con s t rued the se rv ice o f p roce s s p rov is ion o f Sec tion 12
to depend on sa t is fac t ion o f the sect ion ’s venue p rov is ion , i t spec i f ica l ly c ited G o ld law r and
empha s ized tha t , “ [o ]n the que s t ion o f the mean ing o f Sec t ion 12 , we align o urselv es w ith
the po s i tion taken by the S econ d C ircuit .” GTE N ew Med ia Se rv s . Inc . v . Be l lSou th Co rp .,
199 F.3 d at 1 351 . To day, w e br ing the p roc ess f ull ci rcle, j o in ing th e D .C. C ircuit in
conc lud ing th a t the p la in language o f Sec t ion 12 ind ica tes tha t i ts se rv ice o f p rocess
p rov i s ion app l ies (and , the re fo re , e stab l ishe s perso nal jurisd iction) o nly in case s in w hich its
venue p rov i sion i s sa t is f ied .
c .
Con s t ru ing the S cop e o f Sec t ion 12 ’s Se rv ice o f P rocess
P rov i s ion
(1 )
The S ta tu to ry Language
In reach ing this conc lusion , we b egin w i th the tex t o f Sec tion 12 to de te rm ine whe the r
its lang uag e is c lear o r am big uou s. See , e .g ., Rob in son v . She l l O i l Co . , 519 U .S . 337 , 340
(1997) ; accord F re ie r v . We s t inghou se E lec . Co rp ., 303 F .3d 176 , 197 (2d C ir . 200 2) . “The
p la inness o r am biguity o f sta tu to ry language is de te rm ined by re fe rence to the language i tse l f ,
the spec ific co ntext in wh ich tha t language i s u sed , and the b roade r con tex t o f the s ta tu te a s
a who le .” Rob in son v . She ll O i l Co ., 519 U.S . at 341 . If the m eanin g is p la in , we inqu i re no
23
fur ther . Id . (“Ou r inqu i ry mu s t cea se if the s ta tu to ry language i s unamb iguou s and the
s ta tu tory scheme i s coheren t and cons istent.” (q uotatio n m arks a nd cita tion om itted)); F re ie r
v . We s t inghou se E lec . Co rp ., 303 F .3d a t 197 (and cases c i ted there in) . O n ly if we d iscern
amb iguity do w e reso rt first to canon s o f s ta tu to ry con st ruc tion , see Un i ted S ta te s v . Dau ray,
215 F .3d 257 , 262 ( 2d C ir. 2000 ), and, if the m eanin g rem ains am bigu ous, to legis la t iv e
histo ry, id . a t 264 .
App ly ing these p rinciple s to this ca se , we conc lude f rom the language and con tex t o f
“in such ca se s” in the se rv ice o f p roce s s p rov i s ion o f Sectio n 12 , that the p hrase plainly
refers to those ca se s qua li fying fo r venue in the immed iate ly p reced ing c lau se . The common
mean ing o f the wo rd “ such” i s “hav ing a qua l ity a l ready o r ju s t spec i f ied” ; “o f th i s o r tha t
charac ter , qua l i ty , o r ex ten t: o f the so r t o r deg ree pre vi ou sly i nd ica ted o r imp l ied” ; o r
“prev iously cha rac te r ized o r de sc ribed : afo rem entio ned .” We bster’s Third New In terna t ional
D ic t ionary (Unab r idged ) 2283 (1 986) ; see g enera lly Mo r se v . Repub l ican Pa r ty o f Va . , 517
U .S . 186 , 254 (1996) (“W hen w ords in a s ta tu te are no t o the rw i se de f ined , i t i s fundamen ta l
t h a t they w ill be inter pre ted a s tak ing their ord inar y, con tem por ary, comm on m ean ing .”
(quo ta tion marks a nd c i ta t ion om i t ted)) . The “qua lity” of the c ases sp ecified in the p rov is ion
o f Sec t ion 12 p reced ing the sem ico lon is no t s imp ly tha t they a re an t it ru s t ca se s , o r even
an t i t rus t cases again st corp oration s; i t is th at they a re an ti t ru s t ca se s aga in st co rpo ra t ion s
b rough t in the part i c u la r venue s app roved by Sec tion 12 : whe re the de fendan t is an
“inh abita nt,” wh ere it “m ay be fo und ,” or w here it “ transa cts bus ines s.” 15 U .S .C . § 22 . I t
is “ in su c h ca se s ,” i .e., such venued ca se s , tha t Sect ion 12 make s wo r ldw ide se rv ice o f
24
p r o cess ava i lab le . We canno t make th i s po in t mo re clea r ly than Judge Moo re d id , w r it ing
fo r the pane l in G o ld law r:
Sec t ion 12 o f the C lay ton Ac t spec i fie s whe re su i t again s t a co rpo ra tion unde r
the an t i tru s t law s may be b rough t, name ly, in a d i s tr ic t whe re i t is an inhab itan t
and a l so whe re “ it may be found o r t ran sac t s bu s ine s s.” Co nver sely, it shou ld
fo l low that if a co rpo ra tion i s no t an inhab i tan t o f , i s no t found in , and doe s no t
t ran sac t bu s ine s s in , the d i s tr ic t, su it may no t be so b rough t . By s ta tu to ry g ran t
if su i t i s b rough t a s p re scr ibed in th is sec tion “a l l p roce s s in such ca se s may be
se rved in the d is t r ic t o f wh ich it ( the co rpo ra tion ) is an inhab itan t , o r whe reve r
it may be found .” Thu s , “ in such ca se s ,” Cong re s s ha s seen f i t to en large the
limits o f the o the rw i se re s t ric ted te r ri to ria l area s o f p rocess . In o the r wo rds ,
the extrate rritorial serv ice priv ilege is given only wh en the other r equiremen ts
a re sa ti s f ied .
Go ld law r , Inc . v . He iman , 288 F .2d a t 581 (foo tno te and c i ta t ion om i t ted) (em phas is add ed) .
Indeed , G o ld law r’ s c o ns tr uc ti on o f S e ct io n 12 f in d s s ome suppor t in an ear ly Supreme Cou r t
d i scu s sion o f the s ta tu te. In Ea s tman Kodak Co . o f New Yo rk v . Sou th Pho to Ma te r ia ls Co .,
273 U .S . 359 (1927 ), the Cou r t ob se rved :
[A]s app l ied to su i ts aga ins t co rpo ra tion s fo r in ju rie s su sta ined by v io la t ion s
o f the An t i -T rus t Ac t , [Sec tion 12 ’ s ] nece s sa ry e f fec t wa s to en la rge the loca l
ju r isd ic tion o f the d is t r ic t cou r ts so as to es tab l ish the venue o f such a su i t no t
on ly, a s the re to fo re, in a d i s tr ic t in wh ich the co rpo ra tion reside s or is “fo und ,”
bu t a l so in any d is t r ic t in wh ich i t “t ran sac t s bu sine s s” – a l though nei the r
re s id ing no r “ found” the re in – in wh ich ca se the p rocess may be is sued to and
se rved in a d istrict in w hich the c orp ora tion eithe r resi des or is “ fou nd.”
Id . a t 372 -73 (empha s i s added ). The Sup reme Cou r t ’s u se o f “ in wh ich ca se” in th e
h ighl igh ted ph ra se to l ink Sec tion 12 ’ s p roce s s p rov is ion to the sa ti s fac tion o f i ts venue
c lau se sugge s t s tha t the ph ra se “ in such ca se s” in the s ta tu te se rve s the same pu rpo se .
A cc or di ng ly, we n ow reiterate th e con clusion origina lly reached by this cou rt in
G o ld law r and fo rma l ly adop ted by the D .C . C i rcu i t : the ex tra te rr i to r ia l se rv ice p rov i sion o f
25
C lay ton A ct S ec tio n 1 2 m ay b e invo ked to e s tab li sh pe rsona l ju r i sd ic t ion on ly when the
requ i remen t s o f the sec t ion ’ s venue p rov i s ion a re sa ti s f ied .
(2 )
The S ta tu tory H is tory
Because we conc lude tha t the language of Sec t ion 12 is p la in , w e need n o t resor t to
leg i sla t ive history, as h ave th ose o f ou r sister circ uits tha t con s t rue Sec t ion 12 to be
amb iguous . W e do , how ev er , no te tha t such leg is la t ive h is tory as ex is ts does no t sup por t
a conc lus ion tha t Cong ress enac ted Sec tion 12 ’ s se rv ice o f p roce s s p rov i s ion w i th the in ten t
that i t op erate ind epe nde ntly fro m o r rea ch b eyon d th e se ction ’s ve nue pro visio n.
U nd ou bt ed ly, Co ngre ss view ed S ection 12’s “main contrib ution to be i t s expan s ion
o f the bound s o f venue .” Go -V ideo , Inc . v . Aka i E lec . Co ., 885 F .2d a t 1410 (c i ting Un i ted
S ta te s v . S coph ony Co rp . o f Am ., 333 U .S . 795 , 806 -08 (1948 ) ) (empha s i s added ) . The
pu rpo s e o f the se rv ice p rov i sion , howeve r , i s le s s c lea r . Deba te in the Hou se o f
Rep re sen tat ive s on the ma t te r wa s spa r se , and deba te in the Sena te , wh ich added the se rv ice
o f p roce s s p rov i s ion to an a lready d ra f ted venu e pro vision , is non -existen t. See Go -V ideo ,
Inc . v . Aka i E lec . Co . , 885 F .2d a t 1410 (o u t l in ing sparse leg is la t ive h is tory) .1 5 I f the
leg i sla t ive h is to ry o f Sec t ion 12 p rov ides no c lea r ins igh t s a s to Co ngre ss’s pu rpose in
1 5 Wh ile we are dis incline d to sp ecula te f rom cong re s siona l si lence o r to a ffo rd undue
we igh t to punc tuat ion , we n o t e th at i t wou ld have been cu r iou s fo r Cong re s s to have
amended an ex i s ting sen tence p rov id ing fo r expanded venue by in se r ting , af te r a sem ico lon ,
ano the r sen tence p rov id ing fo r se rv ic e o f pro cess if the tw o pro vision s we re inten ded to
oper ate indepen den t ly of one an o ther . See W i l l iam S t runk , Jr. & E.B . W hite, The Elem ents
o f Style 6 (4 th ed . 2000 ) (ob se rv ing tha t compound sen tence jo ined by sem ico lon is a be t te r
way to “ sugge s t[ ] the c lo se re la t ion sh ip be tween the two s ta temen t s” than sepa ra te sen tence s
punc tua ted by per iods) .
26
enac t ing expanded an t it ru s t venue and p roce s s p rov i s ion s in a s ing le sen tenc e , tha t h is tory
can ha rd ly ev idence cong re s s ional app rova l fo r now d ivo rc ing Sec t ion 12 ’s venu e and
p rocess prov isions s o as to com bine th e latte r w i th an ex pand ed ge neral v enue statute
enac ted decade s la te r , an app l ica t ion tha t obv iou s ly cou ld no t have been in the m ind s o f any
o f the enac t ing leg is la to rs .
Indeed , as the Sup reme C our t ha s no ted , a l though Cong res s in tended the C layton Ac t
“to p rov ide b roade r and mo re e f fec t ive re l ie f , bo th sub s tan tive ly and p roced u ra l l y , fo r
pe r son s in ju red by v io la t ions o f i ts an t i t rus t po l icy,” i t was , in fac t, qu i te ca re fu l in expand ing
venue , rejec ting sev eral b roa der pro pos als th an th e on e fin ally en acte d in Sec tion 12. Un i ted
S ta te s v . Na t iona l C i ty L ines , 334 U .S . 573 , 588 (1948 ) (no ting tha t “ [ i ]n adop t ing sec t ion
12 Co ngre ss w as no t willing to give the pla intiffs f ree rein to hau l de fendan ts h i the r and yon
a t their cap rice” ), su pe rse de d i n p ar t b y s tatute , 28 U .S .C . § 1404 (a ) (supe r sed ing venue
t ran sfe r hol din g). T o th e ex tent t he le gisla tive h istor y spea ks a t all, th en , it sugge sts
Con gress’s in tent to “ fix[ ] th e limits w ithin w hich [ the pa rties] cou ld claim adva ntage in
v enue and beyond wh ich ne i ther cou ld seek i t.” Id . at 588 . Thu s, befo re the a dditio n o f a
se rv ice o f p rocess amen dmen t to Sec t ion 12 , one member o f Con gress vo iced concern tha t
se rv ice m igh t no t be po s s ib le in some p lace s whe re the expand ed an titrust ven ue w ould
ob ta in , see Go -V ideo , Inc . v . Aka i E lec . Co ., 885 F .2d a t 1410 (d i scu s s ing ob jec t ion o f Rep .
We bb) , bu t no th ing in the leg isla t ive h isto ry sugges ts tha t any membe r in tended to ex tend
se rv ice o f p rocess beyond the ca refully ex pand ed ve nue p rovisio n. V iewe d in this conte xt ,
Con gress’s dec i s ion in Sec t ion 12 to p rov ide fo r wo r ldw ide se rv ice o f p roce s s on ly “ in such
27
c a ses” a s sa ti s f ied the expanded venue p rov i sion sen s ib ly se rved to ma in ta in the de s ired
venue ba lance a t the same t ime tha t i t en su red it s e f fect ive opera t ion .
(3 )
Expanded Ve nue a nd S ervice of P roces s Pro vision s in
O the r S ta tu tes A re o f L i t t le Ass is t an ce in Con s t ru ing
Sec t ion 12
In reach ing a d ifferen t co nc lus ion , the d is tr ic t cour t appea r s to have re lied , in pa r t, on
o the r s ta tu te s con ta in ing spec ia l venue and se rv ice o f p roce s s p ro v i s ion s tha t i t concluded
could ope ra te independen tly o f one ano the r, no tab ly the Secu r it ie s Exch a ng e A c t o f 1934
(“Exchange Ac t”) , 15 U .S.C . § 78 aa, and th e Racke tee r and Co r rup t O rgan iza t ion s Ac t
(“RIC O”) , 18 U.S .C. § 196 5. See Dan ie l v . Ame r ican Bd . o f Eme rgency Med . , 988 F . Supp .
a t 199 -200 . P re l im ina r i ly , we ob se rve tha t cou r t s mu s t p roceed cau t iou sly in d raw ing such
ana log ies . A s the Sup reme Cou r t ha s wa rned , “ana ly s is o f spec ia l venue p rov i s ion s mu s t be
spec ific to the sta tu te” becau se Cong re ss ’ s in ten t may be pe rm i s sive in some c i rcum s tance s
and res t r ic t ive in o the rs . Co r tez Byrd Ch ip s , Inc . v . B i l l Ha rber t Con s tr . Co ., 529 U .S . 193 ,
204 (2000 ) (con t ra st ing Cong re ss ’ s re s t ric t ive in ten t w i th re spec t to venue in pa ten t cases ,
ac t ion s aga in s t na t ional bank s , and geog raph ic reach o f T i tle V I I , w i th i ts pe rm i s sive in ten t
unde r the Fede ral A rb i t ra t ion Ac t) . In any even t , a t temp t s to ana log ize the venue and se rv ice
o f p roce s s p rov i s ion s o f S e c tion 12 w i th coun te rpa r t p rov i s ion s in the Exchange Ac t and
R ICO o f fe r l i t tle he lp in reso lv ing the pa r t ies ’ pe r sona l ju r isd ic tion d i spu te becau se the tex t
and s tructure of tho se statu tes diff er in im portan t respe cts from the Clayton Ac t.
N ot ab ly, the v enue p rov i sion o f the Exchange Ac t reache s even mo re b road ly than
Sec ti on 12 o f th e C layton Ac t , pe rm i t ting su it “ in the d i s tr ic t whe re any act o r tran sac tion
28
con s t itu t ing the v io la t ion occu r red .” Com pa re 15 U .S .C . § 78aa1 6 with 15 U .S .C . § 22
(p rov id ing for v enue wh ere the defe ndan t is “an in habita nt,” “m ay be fo und ,” or “tra nsac ts
bus iness”) . Thus , our cou r t ha s had no occa s ion to con s ide r the independen t ope ra t ion o f the
Exchange Ac t’s servic e of p roces s prov ision b ecau se w e hav e yet to co nfro nt a case w here
a p la in ti ff so u gh t t o e st ab li sh v en u e t hr ou g h s ome o the r , b roade r statu te. See , e .g ., Ma r iash
v . M orrill , 496 F .2d 1138 , 11 44 (2d C ir . 1974 ) (dec lin ing to dec ide whe the r, fo r pu rpo se s o f
venue und er the E xcha nge A ct, defe ndan t “ t r an s ac t s bu s ine s s” in the Sou the rn D i s t r ic t o f
New Yo rk becau se i t wa s “c lea r tha t an ac t o r tran sac tion con s ti tu ting the (a l leged ) v io la t ion
(has ) occu rred” in tha t d is tr ic t) . Lea sco D ata Pro cessin g Eq uipm ent C orp. v . Ma xw ell , 468
F .2d 1326 (2d C i r . 1972 ) , is to the same e f fec t: the al leged f raudu len t m i s rep re sen ta t ion s
were mad e in th e So u th ern D istrict of N ew Yo rk w here v enue wa s laid. V iewe d in this
conte xt, Judge Fr iend ly’s obse rvation in that c ase tha t certain p arts of Sectio n 27 deal w ith
venue , wh i le ano the r “ speak s exp re s s ly only to se rv ice o f p roce s s ,” id . at 134 0, hard ly
supp orts a conc lu s ion tha t the se rv ice o f p roce s s p rov i s ion ope ra tes independen tly f rom the
1 6 Sectio n 27 of the Exc hang e A ct states in pertine nt part:
Any c r im inal p roceed ing [unde r th i s chap te r ] may be b rough t in the
d i s tr ic t wh erein a ny act or tra nsac tion co nstituting the v io la t ion
occu r red . Any su i t o r ac t ion to en fo rce any liab i li ty o r du ty c rea ted by
this chap te r o r ru le s and regu la t ion s the reunder , o r to en jo in any
v io la tion o f such chap te r o r ru les and regu la t ions , may be b rough t in
any such district or in the distric t wh erein th e def enda nt is fo und or is
an inhab itan t o r t ran sac t s bu sine s s , and p roce s s in such ca se s may be
se rved in any o the r d is t r ic t o f wh ich the de fendan t is an inhab itan t o r
whe reve r the de fendan t may be found .
29
venue p rov i s ion . Indeed , it appea r s doub tfu l that any such c i rcum s tance wou ld a ri se becau se ,
a s Judge F r iend ly fu r the r no ted , Cong ress in tended fo r the venue and se rv ice p rov i sion s o f
Sec t ion 27 “ to ex tend pe r sona l ju ri sd ic t ion to the fu l l reach pe rm i t ted by the due p rocess
c lau se .” Id . a t 1339 .
A s fo r the RIC O s tatut e, see 18 U .S .C . § 1965 , wh ich the N in th C i rcu i t a l so re l ied on
in cons tru ing S ec t ion 12’s se rv ice o f p roce s s p rov i s ion to ope ra te independen tly o f i t s venue
p rov i s ion , see Ac t ion Emb ro ide ry Co rp . v . A t lan t ic Emb ro ide ry, Inc ., 368 F .3d a t 1179 , w e
note an impo r tan t s truc tu ra l d i ffe rence . Wh i le Sec t ion 12 o f the C layton Ac t d i scu s se s venue
and servic e of p roces s in one senten ce, R ICO sepa rates the se pro vision s into n on-se quen tial ,
le t te red sub sec tion s. Com pare 15 U .S .C . § 22 with 18 U .S .C . § 196 5(a) , (d) . Mo re impo r tan t
still i s a tex tua l d if fe rence be tween the two s tatu te s. The language o f R ICO ’ s se rv ice o f
p r o c ess p rov i s ion doe s no t lim i t i t s app l ica t ion to “ such ca se s” a s a re re fe r red to in th e
statute’s venu e pro vision . Rath er, in R ICO , Con gress s pecif ically p rov ide s fo r the se rv ice
o f p roce s s p rov i s ion to app ly “ in any ac t ion o r p roce ed ing unde r t h i s chap te r,” tha t i s, the
chap te r dea li ng w ith racketee r ing . 18 U .S .C . § 1965 (d ) (empha s i s added ). G iven tha t the
C lay ton Ac t se rved as a mo del f or R ICO , see Un ited Sta tes v. B onan no O rg. Cr ime F amily
o f La C osa N os tra , 879 F .2d 20 , 24 (2d C i r . 1989 ), these language and s t ruc tu ra l d i f fe rence s
be tween the tw o statute s in the i r t rea tmen t o f venue and p roce s s on ly re in fo rce the
conc lu s ion tha t Cong res s wa s exp re s s ly rende r ing independen t unde r R ICO concep t s tha t it
had p la in ly linked unde r C lay ton Ac t Sec t ion 12 , c f . id . a t 25 -27 (d i scu s sing o the r s im i la r i tie s
and d i f fe rence s be tween R ICO and the C lay ton Ac t tha t revea l Cong re s s ’ s in ten t w i th re spec t
30
to reach o f these s ta tu tes) . Thus , wh i le p lain t if f s u rge u s to con s t rue Sec t ion 12 ’ s se rv ice o f
p rocess c lause to app ly to the en ti re an ti t ru s t chap te r , the na r rowe r language o f Sec t ion 12
w i l l no t suppo r t tha t in te rp re ta t ion .
In sum , w hen w e in terpre t Sec t ion 1 2 “‘ the w ay i t is wr it t en ,’ ” w e a re oblig ed to
conc lude tha t it s se rv ice o f p roce s s p rov is ion can p rope r ly con fe r pe r sona l ju ri sd ic t ion ove r
a defe ndan t “‘only w hen th e actio n is b rough t in the d istrict wh ere the defe ndan t resides , is
found , or tran sacts b usine ss,’” tha t is , the d istrict wh ere S ectio n 12 ven ue lie s. GTE N ew
M edia Se rv s . Inc . v . Be l lSou th Co rp ., 199 F .3d at 1 351 (quo ting H erbert Hov e nkamp ,
Pe r sona l Jurisdic tion an d V enue in P r iva te An t i t rus t Ac tions in the F edera l Cou rts , 67 Iow a
L . Rev . 485 , 509 (1 982)) .
This i s no t to sugges t th a t th e gene ral ven ue statu te doe s not remain availa ble to
p la in t i f f s in an titrus t actio ns. Q uite t he c ont rary. See 1 5 C ha rl es A la n W ri gh t, A rt hu r R .
M iller & Edwa rd H . Co ope r, Federa l P rac t ice and P rocedure § 3818 (2d ed . 19 86) (“[I] t is
now c lea r beyond any doub t tha t the gene ra l venue s ta tu te s app ly to an t i tru s t ca se s .” ) . Bu t
if 28 U .S .C . § 1391 is the ba si s fo r venue , an an t i trus t p la in t iff canno t emp loy Sec t ion 12’s
se rv ice o f p roce s s p rov i s ion to secure pe r sona l ju ri sd ic t ion . In such c ircum s tances , a p la in t if f
mu s t look to o the r servic e of p roces s prov isions, n otably tho se spe cified in F ed . R . C iv . P .
4 or in corp orated therein from state law to satisfy this r equiremen t.
31
2 .
Ap plying S ection 12 to the Ju risdiction De fend ants
In v iew o f th is con s t ruc t ion o f Sec t ion 12 ’ s se rv ice o f p roce s s p rov i s ion , we canno t
sustain the d i st r ic t cou r t’ s exe rc i se o f persona l ju r isd ic t ion ove r CORD and the n ine
rema in ing hosp ital de f endan t s . The d i s t ric t cou r t exp re s s ly ru led tha t these ju ri sd ic t ion
defe ndan ts d id no t sa t i sfy Sec tion 12 ’ s venue p rov i s ion becau se they d id no t t ran sac t
bus iness in th e dis trict. See Dan ie l v . Ame r ican Bd . o f Eme rgency Med . , 988 F . Supp . a t
263 -71 . P la in t if f s do not cha llenge this ven ue ru ling on appe al.1 7 Acco rd ing ly, fo r the
rea son s just disc ussed in the p reviou s sub section of this opin ion, w e con clude that, because
p la in ti f f s canno t e s tab l i sh venue in the We s te rn D i s tr ic t o f New Y o rk unde r Sec tion 12 , they
canno t ava i l them se lves o f tha t s ta tu te ’ s wo r ldw ide se rv ice o f p rocess p rov is ion to es tab l ish
pe r sona l jur isd ic t ion in tha t d is tr ic t . W e , the re fo re , a f f i rm d ism i s sa l o f p la in t i f fs ’ Second
Amended Comp laint ag ain s t CORD and the ho sp ita l defendan t s fo r lack o f pe rsona l
ju r isd ic tion .
B .
Ne i the r the C layton Ac t no r 28 U .S .C . § 1391 (b ) Suppo rt s Venue in the
W e s te rn D i s tr ic t o f N ew Yo rk w i th R e spe c t to ABEM
A l though ABEM d id no t ra ise a pers onal ju risdiction challe nge in the distric t court ,
and does no t do so on appea l , i t doe s cha l lenge the d is t r ic t cou r t’ s conc lu s ion tha t venue ove r
this action prop erly resides in th e W este rn D istrict of N ew Yo rk. See Dan ie l v . Ame r ican
1 7 The plaintiff s did not arg ue be fore th e district c ourt, no r do th ey conte nd o n app eal ,
tha t any o f the ju r isd ic tion de fendan t s i s an “ inhab i tan t” o f the We s tern D is tr ic t of N ew Y ork
o r may be “found” the re . Thu s , these a l te rna t ive g round s fo r Sec t ion 12 venue have neve r
been a t is sue .
32
Bd . o f Eme rgency Med ., 988 F . Sup p. at 25 8-63 . Acc ordin gly, it subm i t s tha t lack o f venue
p rov ide s an a l te rna t ive g round fo r a f f i rm ing the judgmen t o f d i sm i ssa l . We ag ree . Because
AB EM ’s venue cha l lenge i s ba sed upon e s sen tia l ly und ispu ted fact s , we rev iew the d i s tr ic t
cour t’s venue de te rm ina t ion de novo , see Gu l f In s . Co . v . G la sb renne r, 417 F .3d 353 , 355 (2d
C ir . 2005 ) , and conclude that venue is no t p roper unde r e ithe r the C layton Ac t o r the genera l
venue s ta tu te .
1 .
Venue Unde r Sec t ion 12 o f the C layton Ac t
The d i s tr ic t cou r t conc luded tha t plaintiff s’ claim s aga inst A BEM we re pro perly
venued in th e W e s t e rn D i s t r ic t o f New Y o rk unde r Sec t ion 12 o f the C lay ton Ac t because
ABEM “tran sac ts bu sine ss” in that d istrict . Dan ie l v . Ame r ican Bd . o f Eme rgency Med ., 988
F . Supp . a t 258 -63 . We mu s t d isag ree .
a .
Sec t ion 12 ’s “T ran sac ts Bu s ine s s” Requ i remen t
The Sup reme Cou r t ha s con st rued the ph r a s e “ tr ansac t s bu s ine s s,” a s u sed in the
venue prov ision o f Cla yton A ct Sec tion 12 , to refe r to “ the p rac t ica l , eve ryday bu sine s s o r
comme rc ia l concep t o f do ing bus iness or c arryin g on bus ines s of any su bsta ntial cha racte r.”
Un i ted S ta te s v . Scophony Co rp ., 333 U .S. at 80 7; accord Ban ana D istribs., Inc . v . Un ited
Fruit Co . , 269 F .2d 790 , 794 (2d C i r. 1959 ) (quo t ing Scophony); see a lso Ea s tman Kodak Co .
o f N .Y . v . Sou th Pho to Ma te r ia ls Co ., 27 3 U. S. at 37 3 (“ [A ] co rpo r a tion is eng aged in
t ran sac t ing bu s ine s s in a d i st r ic t . . . al though no t p re sen t by agen ts ca r ry ing on bu s ine s s o f
such cha rac te r and in such manne r tha t i t is ‘ found ’ the re in and is amenab le to loca l p rocess
– if in fac t, in the o rd ina ry and u sua l sen se , it ‘ tran sac ts bu s ine ss ’ there in o f any sub stan t ia l
33
charac ter .”) . Un der this cons truction , “ [ t] e chn ica l c r i te r ia such a s ‘me re so l ic ita t ion ’ o r
‘ so l ic i tat ion p lu s ’ a re no t de te rm ina t ive.” Banana D i s t r ib s . , Inc . v . Un i ted F ru it Co ., 269
F .2d a t 794 (quo ting Scophony, 333 U.S . at 80 7). Ra ther , the p rop rie ty o f venue tu rn s on the
na tu re o f the co rpo ra te de fendan t ’s bus iness .
A defendan t manu fac tu re r tha t p romo te s it s good s in a jud icia l d is t r ic t th rough p roduct
demons t ra t ions , tha t so l ic it s o rder s th rough i t s sa le smen in tha t d is t r ic t , and that ship s its
good s in to tha t d i st r ic t c lea r ly “ t ran sac t s bu sine s s” unde r Sec t ion 12 . See Ea s tman Kodak
Co . o f N .Y . v . Sou th Pho to Ma te r ia ls Co ., 273 U .S. at 404 ; see a lso Banana D i s t r ib s . , Inc .
v . Un i ted F ru it Co ., 269 F .2d at 7 94 & n.8 (fin ding com pany tran sacts b usine ss w here it
solicits sales, m aintain s off ice, and prov ides cu stom er assista nce in d i s tr ic t) . Bu t , in the v iew
o f the D .C. C i r cuit, so to o do es a d efen dant c harg ed w ith acc rediting institution s wh en it
conduc ts f ie ld in spe ction s in th e jud icial d istrict as p art o f the acc red itatio n pr oce ss. See
Lev in v . Jo in t Comm ’n on Acc red i ta tion o f Hosps . , 354 F .2d 515 , 517 -18 (D .C . C ir . 1966 ) .
Meanwh i le , the Th i rd C i rcu i t ha s conc luded tha t a de fend an t p ro fes s iona l o rgan izat ion
transa cts bus iness in a d is t ric t when i t en fo rces i ts s tanda rds aga in s t con s t ituen t o rgan iza tion s
th rough d i rec t, con tinua l supe rv i sion o f tho se o rgan iza t ion s in the jud ic ia l d istrict . See
Mye r s v . Ame r ican Den ta l A s soc., 695 F .2d 716 , 730 (3d C ir . 198 3) .
O n the oth er han d, w hen a n asso cia t ion ’ s bu s ine s s i s “pub lic re la t ion s and
p ro fe s s iona l advancemen t ,” the Fou r th C i rcu i t ha s ru led tha t i t doe s no t t ran sact bu s in e ss
with in a pa r t icu la r d is tr i c t m e r ely becau se som e of its m emb ers resid e there and it so licits
adve r t is ing t ime in and t ran sm i t s adve rt i semen t s and o th e r p ro fe ss iona l ma te r ia l s in to the
34
d istrict. See Ba r tho lomew v . V i rg in ia Ch irop rac to r s A s soc ., 612 F .2d 812 , 816 (4 th C ir .
1979) , ab roga ted on o the r g round s , Un ion Labo r L i fe In s. Co . v . P i reno, 458 U .S . 119
(1 98 2) . S im ila rly, the F ifth C ircuit has c onclu ded th at an a ssocia tion of golf p rofes siona ls
doe s no t t ransac t bus in e s s in a d i s trict wh ere some o f its memb ers resid e and wh ere it
adve r t ise s in magaz in e s, m ake s membe r sh ip ma te r ia ls ava i lab le , and conduc t s a f ive -day
p rog ram for its m em ber s. See Go l f C i ty, Inc . v . W i l son Spo rt ing Good s , Inc ., 555 F .2d 426 ,
436-38 (5 th C ir . 1977 ) .
In each o f the se ca se s , the de te rm ina tion whe the r a de fendan t tran sac ted busin ess in
a d i s tr ic t depended on a rea li s tic a s se s smen t o f the na tu re o f the de fendan t ’s bus iness and o f
w he t h e r i t s con tacts w ith the v enue district co uld fa irly be said to evide nce th e “pra ctical,
eve ryday bu s ine s s o r comme rc ia l concep t o f do ing bu s ine s s o r car rying on bu s ine s s o f any
sub s tan tia l cha rac te r .” Un i ted S ta te s v . Scophony Co rp ., 333 U .S . at 807 .
b .
ABEM Doe s No t “T ran sac t Bu s ine s s” in the We s te rn D i s t r ic t o f
New York
The d is tr ic t cour t conc luded that A BEM transa cts bu siness in the We s te rn D i s t r ic t o f
New Yo rk because i t “ma in ta in s con t inuou s conta cts w hich amo unt to b usine ss con tinuity
with in this d istrict ,” a s ev idenced by th e fo l low ing ci rcum s tance s : (1 ) ABEM ce r t if ied an
un spec i f ied num ber o f ph ysicians in N ew Yo rk Sta te and, in so do ing, comm unica ted w ith
them in th is s ta te ; (2) app l ica t ion fees c ons t i tu te 99% of A BEM’s re v enu e , and ABEM
rece ived an un spec ified amo unt o f that re venu e from the ap plication fees o f ph ysicians in
New York S ta te ; and (3) A BEM m a i led a copy of i ts app l ica t ion form to p la in t i f f D r . Dan ie l
35
in the d istrict . Dan ie l v . Ame r ican Bd . o f Eme rgency Med ., 988 F . Supp . a t 259 -62 . These
fac ts , howeve r , a re in su f fi c i en t to show tha t AB EM “ transac ts bus ine ss” in the W es tern
D i s t r ic t o f New Yo rk .
Pr elim in ar ily, we no te tha t, w i th the excep t ion of the applic ation m ailed to Dr. D aniel ,
the c it ed con t a c t s are w i th the S ta te of Ne w Y ork as a w ho le , no t spec if ica l ly the Wes tern
D i s t r ic t o f New Y o rk . On ly the lat te r con tac t i s relevan t to Sec tion 12 v enu e. See 1 5 U .S .C .
§ 22 ( “A ny sui t . . . may be b rough t no t on ly in the jud ic ial d i s tr ic t whe reo f [ the de fendan t
co rpo ra tion ] i s an inhab i tan t , bu t a l so the d is tr ic t . . . whe re in i t . . . t ransac ts bus iness.”
(emp hasis adde d)); see a lso Ea s tman Kodak Co . o f N .Y . v . Sou th Ph oto Ma te r ia ls Co ., 273
U .S . at 374 (hold ing tha t solicitation of o rders f rom and s ale an d shipmen t of go ods to “ the
Ge org ia dis trict . . . w as tra nsa cting bus ines s in th at dis trict” ).
In any even t , the se con tac t s mu s t be con s ide red in l igh t of the na tu re of A BEM’s
bus iness , wh ich i s ce rt i fying doc to rs who mee t its training and te sting sta ndar ds in th e field
o f emerge ncy med ic ine . A BEM , w h ich ope ra tes ou t of i ts head quar ters in M ich igan , ne ithe r
deve lop s i t s s tanda rd s no r adm in is te rs i ts ce r ti f ica t ion exam ina t ion s in the We s te rn D i s tr ic t
o f New Y o rk . It doe s no t own o r lea se any rea l es ta te in the d is tr ic t . I t doe s no t ma in ta in an
o f f ice , te lephone , bank accoun t , o r ma i l ing add ress there. It em ploys no agen t to carry on its
ope ra t ion s o r p romo te it s ac tiv i tie s in the We s te rn D i s t r ic t o f New Yo rk . I t doe s no t
adve r t ise o r so lic i t app l ican t s fo r i t s ce r t if ica tion exam ina tion in the d i s tr ic t. Indeed ,
inqu i rie s o r con tact s a re in i tia ted by po ten t ial app l ican ts to A B EM , no t the reve r se . To the
ex ten t the d i st r ic t cou r t found tha t 99% o f ABEM ’ s r ev enue s de r ive f rom exam ina tion
36
app l ica t ion fees , s e e D an i e l v . Ame r ican Bd . o f Eme rgency Med . , 988 F . Sup p. at 26 1, it
made no f ind ing as to how much o f tha t fee revenue de rived f rom app l ican ts in the W es tern
D i s t r ic t o f New Y o rk . Indeed , the on ly ev idence on tha t po in t appea r s to be an a f f idav it o f
AB EM ’s execu t ive d i recto r (in suppo r t o f ABEM ’ s mo t ion to d i sm i s s p la in t i f fs ’ Second
Amended Comp lain t) , wh ich s ta te s tha t the revenue ABEM rece ive s f rom exam ina tion
app l ica t ion s in the W es tern D is tr ic t of N ew Y ork is de m inimis “ in re la t ion to A BEM’s to ta l
rev enu es.” M ung er A ff. ¶ 7 (Ju ly 20, 1 994 ).
With th i s unde r s tand ing o f ABEM ’ s bu s ine s s , i t is impo s s ib le to con c lud e tha t an
un spec i f ied numbe r o f commun ica t ion s by ABEM in to the d i s tr ic t in re spon se to inqu i r ie s
abou t te s ts to be adm in i s te red ou t side the d i s tr ic t, even when coup led w i th an un spec i f ied bu t
appa ren tly m i nim al amoun t o f revenue f rom te st fee s tran sm i tted f rom app lican ts re s id ing
in the d is tr ic t , ev idences the so r t o f “p rac tica l, eve ryday bu sine s s o r comme rc ia l concep t o f
do ing bus iness o r ca r ry ing on bu s ine s s o f any subs tan t ia l charac ter” th a t the Supreme C our t
ha s equa ted to “ t ransac t [ ing ] bus iness” fo r pu rpo ses o f Sec t ion 12 venue . See Un i ted S ta te s
v . Scophony Co rp ., 333 U .S . at 807 ; Ba tho lomew v . V i rg in ia Ch i rop rac to r s A s soc ., 612 F .2d
at 816 ; Go l f C i ty, Inc . v . W i l son Spo rt ing Good s , Inc ., 555 F .2d a t 436 -38 .
A cc or di ng ly, beca use w e con clude tha t , as a m atter of law, p laintiffs failed to
dem onstra te tha t ABEM “ t ran sac ts bu s ine ss” in the We s te rn D i s tr i c t o f New Y o rk , venue
could not res t in that d istrict purs uant to Sectio n 12 of the Clayton Ac t.
37
2 .
Venue Unde r the 28 U .S .C . § 1391 (b )
P la in ti f f s subm it that, even if venue d oes no t l ie in the W es tern D is tr ic t of N ew Y ork
unde r Sec t ion 12 o f the C lay ton Ac t , the d i s tr ic t cou r t co rrec t ly conc luded tha t i t had venue
pu r suan t to the gene ra l fede ra l venue s ta tu te, 28 U .S .C . § 1391 (b ) . A l though the d is t r ic t
cour t’s conc lu s ion s we re no t lim i ted to ABEM , because we have a l ready conc luded tha t the
d i s tr ic t cou r t lacked pe r sonal ju ri sd ic t ion ove r CORD and the ho sp ita l de fendan t s, we focu s
o ur § 13 91 (b ) d isc uss io n o n A B EM .
Title 28 U.S .C. § 1 391 (b) pro vides in relev ant pa rt:
A c iv i l ac t ion whe re in ju ri sd ic t ion is no t founded so lely on div ersity of citize nship
m ay, exce pt a s o th e rw i s e p rov ided by law , be b rough t on ly in (1 ) a jud icia l d is t r ic t
whe re any de fendan t re s ide s, i f al l de fendan t s re s ide in the same S tate , (2 ) a jud ic ial
d i s tr ic t in wh ich a sub stan t ia l pa r t o f the even ts o r om iss ions g iv ing r ise to the c laim
occu r red . . . , o r (3 ) a jud ic ia l d is tr ic t in wh ich a ny defenda n t may be fo und , if there
is no d istrict in w hich th e actio n m ay otherw ise be b roug ht.
W e conc lude tha t n one o f the th ree gro und s for v enue identif ied in th e statute perm it
p la in ti f f s to pu rsue the i r an t it rus t claim s aga inst A BEM in the We s te rn D i s t r ic t o f New Yo rk .
a .
Sec t ion 1391 (b ) (1 )
P la in t i f fs ’ relianc e on § 139 1(b)(1 ) mer its l i t tle d iscuss ion because a l l defendan t s do
no t re s ide in New Yo rk S ta te . To the exten t the d is trict cou rt thoug ht othe rwise , its
conc lu s ion wa s in fo rmed by i t s m i scon s truc t ion o f the se rv ice of proce s s p rov i s ion o f Sec t ion
12 o f the Cla yton A ct.
Title 28 U .S .C . § 1391 (c) de f ines the re s idence o f a corpo ra t ion a s “any jud ic ia l
d i s tr ic t in wh ich it is subjec t to pers onal ju risdiction at the tim e the a ction is com me nce d.”
38
B e c au se the d i st r ic t cou r t ru led tha t pe r sona l ju ri sd ic t ion over a l l de fendan t s cou ld be
ob ta ined in the We s te rn D i s tr ic t o f New Y o rk pu r suan t to the wo r ldw ide se rv ice o f p rocess
p rov i s ion of S ection 12, it co nclud ed tha t all defe ndan ts were res id en ts of N ew Y ork S ta te .
Prop erly cons t rued , howeve r , Sec t ion 12 ’s s e rv ic e o f p roce s s p rov i s ion d id no t pe rm i t the
d i s tr ic t cour t to exe rcise p erson al jurisdic tion ov er CO RD or the h ospit a l d e f end ants. See
supra Part II.A . Thu s, these d efen dants canno t be deemed re s iden ts o f New Yo rk pu r suan t
to § 1391 (c) , and the d is tr ic t cour t lacked venue under § 1391 ( b ) (1 ) to hea r th is c la im aga ins t
A B EM .
b .
Sec t ion 1391 (b ) (2 )
In fact, i t is § 139 1(b)(2 ), not § 1 391 (b)(1), o n w hich p laintiffs prima rily rely to
suppor t venue ove r ABEM in the We s te rn D i s tr ic t o f New Y o rk , a rgu ing tha t a “ sub s tan t ia l
par t o f the even ts o r om i s sion s g iv ing r ise to [ th ei r an ti t ru s t ] cla im [ s ] occu r red” in tha t
district. In rulin g in p laintiffs ’ favo r on th is po in t , the d i st r ic t cou r t conc luded tha t AB EM ’s
“den ia l o f the [ce rt i f ica t ion te s t] app l ica t ion s and appea l s by Dan ie l and f ive o the r ind iv idua l
p la in ti f f s and [ its] offic ial commu n ic ation o f this ac tion to P laintiffs in N ew Yo rk is
su f f ic ien t to con s ti tu te a sub s tan t ial pa r t o f the ev en t s g ivin g rise to P laint iffs ’ claims .”
Dan ie l v . Ame r ican Bd . o f Eme rgency Med ., 988 F . Supp . a t 274 -75 .1 8 Once aga in , we mus t
1 8 The d i s t ric t cou r t re jec ted a s a ba sis fo r ve nue , and p rope r ly so in ou r v iew , the
New Yo rk re s idence o f then -ABEM p re s iden t G . R icha rd B raen and fo rme r boa rd membe r
and dire ctor He nry A . Th iede . See Dan ie l v . Ame r ican Bd . o f Eme rgency Med . , 988 F .
Supp . at 275 . The re is no claim that the se ind ividua ls took any actio n a t a l l in New York
re la ted to the an t i t rus t c la im , le t a lone any ac t ion tha t m igh t con s ti tu te a “ sub s tan t ial pa r t o f
the even ts o r om is si on s gi vi ng ri se to th e ” a n ti tr us t c la im . No r i s i t a l leged tha t any pa rt o f
39
d i sag ree .
A l though ou r cou r t ha s had few occa s ion s to interp ret § 13 91(b )(2) sinc e that sta tute
wa s amended in 1990 , ce r ta in p r inc ip le s are c lear. Sec t ion 1391 (b ) (2 ) does no t res t r ic t venue
to the d i st r ic t in wh ic h th e “m o st subs tantial” e vents or om issions giving rise to a c laim
occu r red . See Ba te s v . C & S Ad ju s te r s, Inc ., 98 0 F. 2d 8 65 , 8 6 8 ( 2d C ir . 1 9 92 ); D av id D .
Sieg el, “Co mm entary on the 19 88 an d 19 90 R evision s of S ection 139 1, Su bdiv is ion (a) ,
C lause (2 ) ,” printed in 28 U .S .C .A . § 139 1 a t 9 -10 (Wes t 199 3); see a lso F i rs t o f M ich . Co rp .
v . B ram le t, 141 F .3d 260 , 264 (6 th C i r. 1998 ) (in te rp re t ing ana logou s “ sub s tan tia l par t o f the
even ts o r om i s s ion” language in 28 U .S.C. § 139 1(a)(2 ) (relating to jurisd iction f oun ded o nly
on divers ity)); Se tco En te rs . Co rp . v . Robb in s, 19 F .3d 1278 , 12 81 (8 th C ir . 1994) (sam e) .
Ra ther , a s w e recen tly explaine d, § 13 91(b )(2) “c ontem plates th at ven ue ca n be a ppro priate
in mo re than one d is t r ic t” and “pe rm i t s venu e in mu l t ip le jud ic ia l d is t ric ts as long as a
‘ sub s tan t ial pa r t ’ o f the und e r lying even t s took p lace in tho se d is t r ic t s .” Gu l f In s . Co . v .
G la sb renne r, 417 F .3d a t 356 . Neve r the less , the “subs tan t ia l even ts o r om iss ions”
requ i remen t does limit the f orums ava ilabl e to p laint iffs . See id . a t 357 (cau t ion ing d i s tr ic t
cour ts to “ take se r iou s ly the ad jec t ive ‘ sub s tan t ial ’” in d i scha rg ing du ty to “con s t rue the
venue statu te stric tly”). T his is so b eca use , as the Sup reme Cou r t exp la ined be fo re the
amendmen t o f sec t ion 1391 , “ [ i ]n mos t ins tances , the pu rpose o f s ta tu to r ily de f ined venue
is to p ro tec t the de fendan t aga in s t the r isk tha t a p la in t i f f w i l l se lec t an un fa i r o r inconven ien t
the a c ti vi ti es o f CORD o r the ho sp i ta l de fendan t s a l leged to g ive r i se to the a n ti tr us t c la im s
occ urre d in Ne w Y ork .
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p lace o f t r ia l .” Le roy v . G rea t W . Un i ted Co rp ., 443 U.S . 171, 1 83-8 4 (19 79) (emp hasis in
or ig ina l) ; see a lso Ba tes v . C & S Ad jus ters , In c . , 980 F.2d at 867 (noting that Le roy and
o the r p re -amendmen t p receden t s “ rema in impo r tan t sou rce s o f gu idance” in con s t ru ing the
venue statute a nd re cogn izing 1 990 ame ndm ents to § 13 91 as “at m ost a ma rg ina l expan s ion
o f the [gene ra l ] venue p rov i s ion” a imed a t reduc ing l i tiga t ion abou t “whe re the c la im a ro se”
unde r the fo rme r venue prov ision); Co t tman T ran sm i ss ion Sys . v . Ma r t ino, 36 F .3d 291 , 294
(3d C i r . 1994 ) (exp la in ing tha t “ the cu rren t s ta tu to ry language s ti l l favo r s the de fendan t in
a venue d i spu te by requ i r ing tha t the even t s o r om i s s ion s suppor t ing a c la im be ‘su bs tan t ia l’”
and “ i s in tended to p re se rve the e lemen t o f fa irne s s so tha t a de f enda n t is no t ha led in to a
remo te d i s tr ic t hav ing n o rea l re la t ionsh ip to the d ispu te”) ; Woodke v . Dahm , 70 F .3d 983 ,
985 (8 th C i r. 1995 ) (exp la in ing tha t “by re fe r r ing to ‘even ts and om i s s ion s g iv ing r i se to the
claim ,’ Cong re s s mean t to requ ire cou r ts to focu s on re levan t ac tiv i tie s o f the de fendan t, no t
of the p la in t iff”) .
Thus , when a p la in ti f f re lie s on § 1391 (b ) (2 ) to de fea t a venue cha l lenge , a tw o-par t
inqu iry is ap pro pria te. F irst, a cour t shou ld iden tify the natu re of th e claim s and the ac ts o r
om i s s ion s tha t the p la in t i f f a l lege s g ive ri se to tho se cl aim s. See Gu l f In s . Co . v .
G la sb renne r, 417 F .3d a t 357 . S econd , the cour t shou ld de te rm ine whe the r a subs tan t ia l par t
o f tho s e ac t s o r om i s s ion s occu r red in the d i s tr ic t whe re su i t wa s f i led , tha t is , whe the r
“ s ign if ican t even ts or om issions mate rial to [ those] c la im[ s] . . . have occu r red in the d is t r ic t
in que s tion .” See id . (emph as is remov ed) ; see a lso Jenk in s B r ick Co . v . B reme r , 321 F .3d
1366 , 1372 (11 th C i r. 2003 ) (a sk ing (1 ) “Wha t acts or om issions by [def enda nt] gav e rise to
41
[p la in t i f f ’s ] c la im?” and (2 ) “O f tho se act s , d id a ‘ sub s tan tia l par t ’ o f them take p lace in [ the
cho sen venu e]?” ); c f . Co t tman T ran sm i ss ion Sy s . v . Ma r t ino , 36 F .3d a t 295 -96 ( iden t i fy ing
a l leged ac ts or om iss ions an d then ask ing wh e ther they are subs tan t ia l) .
“S ub sta nt ial ity” fo r venue pu rpo se s i s mo re a qua l i ta t ive than a qu an tita tiv e in qu iry,
de term i n ed by a sse s s ing the ove ral l na tu re o f the p la in ti f f ’ s c la im s and the na tu re o f the
spec ific even t s o r om i s s ion s in the fo rum , and no t by s imp ly add ing up the numbe r o f
con tacts . See Gu l f In s . Co . v . G la sb renne r, 417 F .3d a t 357 ; Co t tman T ran sm i ss ion Sy s . v .
Ma r t ino, 36 F .3d a t 295 -96 (“ In a s s e s s ing whe the r even ts o r om i s sion s g iv ing r ise to the
c la im s are su bstan tial, it is nece ssary to look a t the na tu re o f the d ispu te .” ) . When ma te ria l
acts or om issions with in the f orum bear a close n exus to the c la im s , they a re p rope r ly deemed
“ s ign if ican t” and , thu s , sub stan t ia l , bu t when a c lo se nexu s i s lack ing , so too is the
subs tantiality nec essa ry to su ppo rt ve nue . See Jenk in s B r ick Co . v . B reme r, 321 F .3d a t 1372
(exp la in ing that sub stantiali ty requ iremen t of § 13 91(b )(2) req uires c onsid eration only of a cts
or om iss ion s tha t “have a c lose nexu s to the wro ng”) .
This p r inc ip le has in fo rmed ou r venue ana lys is in o the r cases , even i f we have no t
a r t icu la ted the su bstan tiality requirem ent sp ecifica lly in terms o f the n exus betw een th e acts
o r om issions in the c hose n fo rum and th e natu re of p laintiffs ’ claim s. M ost rece n t ly , w e
conc luded tha t judgmen t ho lde rs ’ reques t and rece ip t o f an o rde r lifting an autom atic
bank rup tcy s tay in the d is t r ic t , wh ich pe rm i tted the judgmen t ho lders to obtain their
judgmen t, toge ther w i th the subm i s s ion , app rova l, o r is suance in the d i st r ic t o f the in su rance
po l icy unde r wh ich the judgmen t a l leged ly mu s t be pa id , cou ld co ns t i tu te a subs tan t ia l par t
42
o f the even ts g iv ing r i se to a c la im sound ing in con tract. See Gu l f In s . Co . v . G la sb renne r,
417 F .3d a t 357 -58 (vaca ting and remand ing fo r venue de te rm ina tion ) . S im i lar ly, in Ba te s
v . C & S A d ju s te r s , Inc ., 980 F .2 d at 86 8 , w e conc luded tha t p lain t if f ’ s rece ip t o f a co l lec t ion
no t ice in the d i s tr ic t wa s a sub s tan tia l par t o f the even t s g iv ing r ise to a claim und er the F air
Deb t Co l lec tion P rac tice s Ac t becau se the s ta tu te seek s to cu rb the e f fec t on con sume r s o f
abu s ive deb t pra ctice s like the c ollec tion not ices sen t to th e pla intif f. A lso, w he re tw o
agreemen ts givin g r i se to a de fen se we re nego t ia ted th rough a se rie s o f commun ica tion s
d i rec ted to one pa r ty in the Sou the rn D i s t r ic t o f New Yo rk , we conc luded tha t a sub stan t ia l
par t o f the p la in ti f f ’ s c la im to a r igh t to a rb it ra tion unde r tho se ag reemen t s occu rred in tha t
distr ict an d su ppo rted ven ue th ere. See U .S . T i tan , Inc . v . Guangzhou Zhen Hua Sh ipp ing
Co . , 241 F .3d a t 153 . Bu t when a l l even t s suppo r t ing a c la im fo r d i s so lu t ion o f a de fendan t
company ( inc lud ing comm ing l ing of fu nds , impro p e r transa ctions, a nd f ailure to main tain
corp orate reco rds ) occu r red in I ll ino is , w e c onc lude d tha t the fac t of defend an t’s
inco rpo ra t ion in N ew Yo rk, its serv icing o f N ew Yo rk ho spitals, its co l lec t ion o f money f rom
New Yo rk deb to r s , and i t s emp loymen t o f a New Y o rk law f i rm d id no t suppo rt venue in the
Sou the rn D is tr ic t of N ew Y ork becau se the New Y o rk ac t ion s d id no t con s t itu te a sub s tan tia l
par t (or , indeed , any par t) of the e ven ts or om iss ions g iv ing r i s e to p la in t if f ’s cla ims . See
F r iedman v . Revenue Mgm t . o f N .Y . , Inc ., 38 F .3d 6 68 , 672 (2 d C ir . 199 4) .
O the r c i rcu it s have sim i la r ly re so lved venue d i spu te s by con s ide ring the connec t ion
be tween the a cts o r om issio ns in the f iling for um and the a sser ted c laim s. See , e .g ., Jenk in s
B r ick Co . v . B reme r, 321 F .3d a t 1372 -73 [11 th C i r . ] ( re jec t ing A labama venue fo r p la in t if f
43
company w i th hea dquar ters in that sta te wh en ev ents g iving ris e to cla im fo r b reach o f non –
com pete ag reemen t a ll occu r red in Sou the rn D istrict of G eorg ia); U f fne r v . La Reun ion
F ranca ise , 244 F .3d 38 , 42 -43 (1s t C i r . 2001 ) (conc lud ing tha t D i st r ic t o f Pue r to R ico wa s
p rope r venue becau se lo s s o f ve s se l in d is t r ic t ’ s wa te r s is sub s tan t ial pa r t o f even t s g iv ing
r i se to c laim by ve sse l owne r fo r wro ngf ul den ial of in suran ce claim ); F i r s t o f M ich . Co rp .
v . B ram le t, 141 F .3d at 2 63-6 4 [6 th C i r . ] (conc lud ing tha t Ea ste rn D i st r ic t o f M ich igan wa s
p rope r venu e in ca se inv olving dispu te ove r inves tmen t advic e bec ause finan cial ad visor d id
bus iness and un der ly ing transac t ions and inves tmen ts took p lace the re) ; Woodke v . Dahm ,
70 F.3d at 985 -86 [ 8th C ir.] (holdin g ven ue im prop er in N orth e rn D is tr ic t of Iow a wh ere
p la in ti f f reside d and felt e f fec t s o f cha rged tradema rk v io la t ion s becau se ne ithe r a lleged
“pa s s ing o f f” no r a ny o ther even t hav ing subs tan t ia l connec t ion to c la ims occu rred there) ;
C o ttm an T r an sm i s s ion Sy s ., Inc . v . Ma r t ino , 36 F .3d a t 295 -96 [3d C i r .] (ho ld ing venue
imp rope r in Ea s tern D i s t ric t o f P ennsylvan ia wh en all b ut on e eve nt relev ant to c ontrac t,
trademark , and unf a ir trade prac t ice c la ims to ok p lace in M ich igan) .
App ly ing these pr inc ip les to th is case , we con c lude tha t § 1 391(b)(2) d oes no t sup por t
venue in the We s te rn D i s tr ic t o f Ne w Y ork . P la in ti f f s a llege a ser ie s o f ac t ion s by
defe ndan ts to sup port the ir antitrust c laims: in 1988, A BEM closed the pra ctice trac k to
qua l i fy fo r i ts ce r ti f ica t ion exam ; s ince tha t t ime , AB EM has c onsiste ntly refuse d to p ermit
p la in ti f f s t o take the ABEM ce r t i f icat ion exam ; meanwh i le , the ho sp ita l defendan t s have
re fu sed to hi re , pr om ot e, o r p ay to p r em un er ati on to do cto rs n ot ce rtif ied by A BEM . P lai nl y,
the vast m ajority of th ese ac ts occu r red ou ts ide the We s te rn D i s tr ic t o f New Y o rk , indeed ,
44
ou t s ide the S ta te o f New Y ork. A BEM ’s dec ision to close th e prac tice-track wa s ma de at its
headq uar ters in M ichig an. S im i lar ly, ABEM ’ s re jec t ion s o f p la in t i f fs ’ app lica tion s to take
its ce r t if ica tion exam w e re ma de in M ichiga n. To the ex tent A BEM com mu nicate d its
dec i s ion to p la in t i f fs by ma il sen t to the ir home s ta te s , p la in t if f s po in t to on ly s ix o f the 176
named p la in ti f f s wh o rece ived s uch r ejection notice s in the We s te rn D i s t r ic t o f New Yo rk .
A s fo r the ho sp i ta ls , who se a lleged fa ilu re to h i re , p romo te , o r pay p la in ti f f s in a manne r
com parab le to ABEM -c er tif ied do cto rs i s th e m ain all eg ed in ju ry, o f the twen ty -e igh t sued
in th is ca se , no t one i s loca ted in the We s te rn D i s tr ic t o f New Y o rk .
V iew ed in th is con tex t , ABEM’s transm i t ta l in to the W es tern D is tr ic t of N ew Y ork
o f a half -doz en lette r s re ject ing app lica tion s to s i t fo r i ts ce r ti f ica t ion exam ina t ion ou t s ide
New Yo rk con s t itu te s on ly an in s ign i f ican t and ce r tain ly no t “a sub stan t ia l pa r t o f the ev ents
o r om i s s ion s g iv ing r i se to the [p la in ti f f ’ s an t i tru s t ] c la im [ s ] .” We conc lude tha t these
co inc iden ta l con tac ts a re insu f f ic ien t to a f fo rd venue in the Wes te rn D is t r i c t of N ew Y ork
pursuan t to § 1391 (b)(2) .
c .
Sec t ion 1391 (b ) (3 )
P la in ti f f s conte nd th at ven ue ov er their a ntitrust cla ims is p rope r in th e W es tern
D i s t r ic t o f New Y o rk pu r suan t to § 1391 (b )(3 ) becau se , at the tim e this ac tion wa s f i led ,
ind iv idua l defend an t He nry A . Th ied e res ided in the W es tern D is t r ic t o f New Y o rk and ,
g iven the geog raph i c d iv ersity of the o ther named defe ndan ts, there is n o oth er district in
wh ich th is ac tion cou ld re aso nab ly be b rou ght .
45
A s th i s cou rt ha s p rev iou s ly exp la ined in d i scu s sing an ana logou s venue a l te rna t ive
in § 1391 (a ) (3 ) ( rela t ing to d ive rs i ty ju r i sd ic t ion ), the ph ra se “ if the re i s no d is t r ic t in wh ich
the ac t ion may o the rw i se be b rough t” ind icate s tha t venue may be ba sed on tha t sub sec t ion
only i f venue canno t be e s tab li shed in ano the r d is t r ic t pu r suan t to any o the r venue p rov i sion .
See Doc to r ’ s A s socs . v . S tuar t , 85 F .3d 975 , 983 (2d C i r. 1996 ) (c i t ing 1A Moo re ’ s Fede ra l
P rac t ice ¶ 0.34 2[3 ], at 408 3); see a lso W righ t, M i l le r & Coope r , 15 Fede ra l P rac t ice and
Proced ure § 3802 .1 (Supp . 2005 ) (de scr ib ing § 1391 (a ) (3 ) , like § 1391 (b ) (3 ) , as a “ fa l lback”
p r ov i s ion availab le only w hen th ere is n o district in wh ich ve nue c an be laid pu rsuan t to
(a)(1) and (a)(2)) .
In th i s ca se , § 1391 (b ) (2 ) does e s tab l i sh ano the r venue fo r p la in t if fs ’ an t i t rus t c la ims :
the We s te rn D i s tr ic t o f M ich igan . A s ou r d iscuss ion o f the fac ts demons t ra tes , a “ sub s tan t ial
pa r t” o f the a l leged even ts g iv ing r ise to the p la in ti f fs ’ an t i trus t c la ims occu r red in Eas t
Lan s ing , M i ch ig an . I t i s th er e th a t ABEM h a s i ts h eadqua r te r s. It w a s th er e th a t ABEM
crea ted and then c lo sed the p rac t ice t rack fo r i ts ce r ti f ica t ion exam ina t ion , the c rux o f the
cha rged an ti t ru s t scheme . I t wa s f rom there th at AB EM rejected plaintiff s’ app lications to
s i t f o r i ts exam . I t wa s the re tha t CORD pu rpo r ted ly s t rove to ma in ta in fo rma l re s idency
t ra in ing a s th e u nw aiv ab le re qu ireme nt f or A B EM ce r t i f ica tion . Thu s , becau se p la in t if f s
cou ld h av e sa t is f ied § 1391 (b ) (2 ) in the We s te rn D i s t r ic t o f M ich igan , they canno t rely on
§ 1391 (b ) (3 ) to suppo r t venue in the We s te rn D i s tr ic t o f New Y o rk .
In sum , becaus e n e it h e r S e c t ion 12 o f the C layton Ac t no r 28 U .S .C . § 1391 (b )
e s tab li she s v en u e i n t he W es te rn D is tr ic t o f N ew Y or k t o h ea r t hi s c as e a ga in st ABEM , we
46
can a f f i rm d i sm i s sal o f th is ac t ion aga in s t ABEM on th i s a l terna t ive g round .
C .
The T rans f e r o f th i s Ca se to Ano the r D i s tr ic t Whe re Ju r i sd ic t ion and Venue
A re P rope r I s No t in the In te re st o f Ju s tice
1 .
D i sc re tion to T ran s fe r
The iden t if ied de fec ts in pe rsona l ju r i sd ic t ion and venue p rec lude p la in t i f fs f rom
pu r su ing this c a se in th e W es te rn D is tr ic t o f N ew Y o r k, de sp it e i ts lo n g h is to ry i n t ha t f o rum .
See Ch r i s tian son v . Co l t Indu s. Ope ra t ing Co rp ., 486 U .S. 800 , 818 ( 198 8) (no ting “a ge-o ld
rule tha t a cou r t may no t in any ca se , even in the in te re s t o f ju s t ice , ex tend i t s ju r isd ic tion
whe re non e ex ists,” a ru le tha t app lie s even to pa r t ie s who “ spend yea r s li t iga t ing claim s only
to lea rn tha t thei r e f fo rt s and expen se we re wa s ted in a cour t th a t l ack ed juris dicti on” ). A
que s t ion rema in s , how ev e r , as to whe the r we shou ld s imp ly a f f i rm d ism issa l on these
g round s or, in the interest o f justice , order tra nsfe r of the action to ano ther d is tr ic t where
j u ri sd ic t ion and ven ue p rop erly ob tain. See 28 U .S.C. § 140 6(a) (p ermittin g cou rt to cu re
venue defe ct “ in th e interest o f justice ” by trans ferring case “ to any distric t or divis ion in
wh ich i t cou ld have been brou ght”); see a lso Go ld law r , Inc . v . He iman , 369 U .S . at 465 -66
( reve rs ing d i sm i ssa l o f an t it ru s t ac t ion becau se d is t r ic t cou r t wa s au tho r ized to tran s fe r unde r
§ 1406(a ) even th oug h it lack ed pe rsona l jurisdictio n ov er def enda nts); Co rke v . Same ie t
M .S . Song o f No rway , 572 F .2d 77 , 79 (2d Cir. 19 78) (c onclu ding that § 1 406 (a) permits
cour ts to transfer in in teres t of jus t ice w henev er e i ther persona l jur isd ic t ion or venue are
imprope r) ; So ng B yrd , I nc . v . E s ta te o f G ro s sman , 206 F .3d 172 , 179 n .9 (2d C i r. 2000 )
(c i t in g Co rke and recogn iz ing p rop rie ty o f § 1406 t ran sfe r to cu re lack o f pe r sonal
47
jur isd ic t ion even w hen ve nue pro per) .
Co urts en joy con s ide rab le d isc re tion in decid ing whe ther to tran s fe r a ca se in the
in te res t o f ju s tice . See Ph i l lip s v . Se i te r, 173 F .3d 609 , 610 (7 th C i r. 1999 ) . A “compe l l ing
rea son” for tran sfer is genera l ly acknow ledged w hen a p la in t iff’s case, if dism issed, w ould
be t ime -bar red on re f i ling in th e pr ope r fo rum . Id .; accord Co rke v . Same ie t M .S . Song o f
No rway , 572 F .2d a t 80 (no ting an “ impo r tan t purp ose” of § 140 6(a) tran sfer is to alleviate
bu rden o f s ta tu te s o f lim i ta t ion s ope ra t ing a s “p rocedu ra l obs tac les” to m er i ts cons idera t ion) .
In th i s ca se , it i s po s s ib le tha t the fou r -yea r s ta tu te o f l im i ta t ions app l icab le to an t i t rus t
ac t ions , see 15 U .S .C . § 15b , m igh t p rec lude p la in t i f fs f rom re f i l ing the exac t same an t i t rus t
comp la in t in the We s te rn D i s tr ic t o f M ich igan , un le s s , o f course , pla intiffs c ould dem onstra te
a con tinu ing wr ong . See Zen i th Rad io Co rp . v . Haze l tine Re sea rch , Inc ., 401 U .S . 321 , 338
(1971 ) (“ In the con tex t o f a c o nt in u in g co n sp ir ac y t o v io la te th e an ti tr us t l aw s . . . e a ch tim e
a plain tiff is injured by an ac t of the defe ndan ts a cau se of action accru es to h im to recove r
the damage s cau sed by tha t ac t and tha t , a s to tho se damage s , the s ta tu te o f l im ita t ion s run s
f rom the comm ission o f the a ct.” ( c i ta t ions omitted )); accord H igg in s v . New Y o rk S tock
Ex ch., Inc ., 942 F.2d 829 , 832 ( 2d C ir. 1991 ). Eve n in su ch circ um stance s, how ever, c ourts
will no t “wa s te jud ic ial reso urc es b y trans ferr ing a ca se th at is c learl y doome d.” Ph i l lip s v .
Se i te r, 173 F .3d a t 610 . A s Judge Po sne r ob se rved in Ph i l lip s, a cou r t’ s l im i ted ju r i sd ic t ion
“to dec ide whe the r to t ran s fe r o r d i sm i ss” a ca se over wh ich i t lack s ju r i sd ic t ion thu s inc lude s
“a powe r o f l im ited rev iew o f the me r i ts .” Id . a t 611 . I f “a peek a t the me r it s ,” id . a t 620 ,
“reve als that the case is a sure loser in the co urt th a t h a s ju r i sd ic t ion (in the conven t ional
48
sen se ) o v er it , t he n t he co u rt in w hi ch it i s in i tia l ly f iled – the cou r t tha t doe s no t have
ju r isd ic tion – sho uld d ismiss th e case rather th an w aste the t ime o f ano the r cou rt ,” id . a t 611 .
Fo l low ing these p rinciple s, this co urt rece ntly affirm e d di sm is sa l o f a T u c ke r A c t c la im ,
re fu s ing to o rde r § 1631 t ran sfe r to the Cou r t o f C la ims because the reco rd fa i led to es tab lish
the “en t it lemen t” nece s sa ry to suppo r t the p la in t i f f’ s due pro ces s cla im. Ade leke v . Un i ted
S ta te s, 355 F.3d 144 , 152 ( 2d C ir. 2004 ); see a lso Au r a L amp & L igh t ing v . In te rna t ional
T rad ing Co rp ., 325 F .3d 903 , 909 -10 (7 th C i r . 2003 ) (o rde ring d i sm i s sa l ra the r than t ran s fe r
o f appe al that w as plain ly lacking in merit); Haugh v . Booke r , 210 F .3d 1147 , 11 50 (10 th C ir .
2000 ) (a f f i rm ing d i sm i ssa l w i thou t requ ir ing tran s fe r o f habea s cha llenge tha t wa s w i thou t
mer i t) .
So in this ca se , in wh ich the is sue o f an ti t ru s t s tand ing wa s fu l ly li t iga ted in the d i st r ic t
cour t and ha s been the focu s o f b r ie f ing and a rgumen t on appeal , we ag ree w i th the d i s tr ic t
cour t tha t p la in t if f s lack an t i tru s t stand ing to pu r sue the i r c la im and conc lud e tha t t ran sfe r
to anoth er district is n ot in the interest o f ju s t ice . Acco rd ing ly, the judgmen t o f d ism i s sa l
shou ld be a f f irmed .
2 .
The Requ i remen t o f An t it ru s t S tand ing
a .
The Fac to r s Re levan t to S tand ing
I t i s a we l l-e s tab l i shed p r inc ip le that , wh i le the Un i ted S ta te s i s au tho r ized to sue
anyone v io la ting the fede ral antitru st law s, a priva te plain tiff m ust demo nstrate “sta ndi ng.”
See Ca rg i l l, Inc . v . Mon fo r t o f Co lo ., 479 U .S . 104 , 110 & n n .5-6 (198 6); see a lso Cr imp ers
P romo t ions , Inc . v . Home Box O f f ice , Inc ., 724 F .2d 290 , 292 -93 (2 d C ir. 1 98 3) (F rie nd ly,
49
J.) (exp la in ing req u iremen ts of an t i trus t s tand ing) . This stand ing req uirem ent orig inates in
the S up r em e C ou rt’s reco gnition that, altho ugh Sectio n 4 o f the C layton A ct app ears to
con fe r a bro ad pr ivate r igh t o f ac t ion fo r an t i t rus t damages , 1 9 “Cong re s s d id no t in tend the
an t i t rus t law s to p rov ide a remedy in d am ag e s fo r a l l in ju rie s tha t m igh t conce ivab ly be
t raced to an an t it ru s t v io la tion .” A s soc ia ted Gen . Con t rac to r s o f Ca l ifo rn ia , Inc . v . Calif ornia
S ta te C ounc i l of C arpen ters , 459 U .S . 519 , 534 (1983) . Jus t as in c omm on- law tor t and
con t ract l i t iga t ion , concep ts such as “foresee ab ilit y an d p ro xim ate ca us e, d ire ctn es s o f in ju ry,
certain ty o f damages , and p r iv ity o f con t rac t” c ircum sc r ibe a pa r ty ’s r igh t to reco very, so in
an t i t rus t a c t ion s “ the p la in t if f ’ s ha rm , the a lleged w rongdo ing by the de fendan ts , and the
relation ship betw een them ,” ca n lim it the righ t to su e. Id . a t 532 -33 , 535 -36 (no t ing
“simila rity be tween the st rugg le o f common – law judge s to a r ticu late a p rec i se de f in it ion o f
the conc ept of ‘prox imate cau se , ’ and the s trugg le o f fede ra l judge s to a rt icu la te a p rec ise tes t
to determ ine w hethe r a party in ju red by an an t it rus t v io la t ion may recove r t reb le damages”
( foo tno te s om i t ted ) ) . The same log ic app l ie s to c laim s fo r in junc tive re lie f unde r Sec t ion 16
1 9 Sectio n 4 sta tes in pe rtinent p art:
[A ]ny pe rso n w ho sh all be in ju re d i n h is b us in es s o r p ro pe rty by re a son o f
any th ing fo rb idden in the an ti t ru s t law s may sue the re fo r in any d is tr ic t cour t
o f the Un i ted S ta te s in the d i s tr ic t in wh ich the de fendan t re s ide s o r is found
o r has a n age nt, w i thou t re spec t to the amoun t in con t rove r sy, and sha ll recover
threef old the damag es by him sustain ed, an d the c ost of suit, inclu d in g a
rea sonab le a t to rney’ s fee .
15 U .S .C . § 15(a) .
50
o f the C l a y ton A ct.2 0 See Ca rg i l l, Inc . v . Mon fo r t o f Co lo ., Inc ., 479 U .S . at 110 -13
(app ly ing an t i trus t s tand ing req u iremen t to c la ims for in junc t ive re l ief) .
Because the theo ry o f an t it ru s t s tand ing i s no t cod i f ied bu t wa s dev elope d by cou rts
ove r t ime in re spon se to my r iad conce rn s p re sen ted in pa rt i cu la r c a s e s, i t canno t ea si ly be
reduced to a “b lack – let te r ru le tha t w i l l d ic tate the re su lt in every ca se .” A s soc ia ted Gen .
Con trac tors of Ca l iforn ia , In c . v . Ca l iforn ia S ta te Coun c i l of Carp en ters , 459 U .S . at 536 .
Neve r the less , certa in b asic prin ciple s ca n be iden tified . For e xam ple , the fac t tha t the
p la in ti f f s charg e the d efen dants , at least in pa r t , w i th a pe r se v io la tion o f t he an ti tr us t l aw s
doe s not abs olv e them o f the obl igati on t o demo nstra te sta ndi ng. See A t lan t ic R ich f ie ld Co .
v . USA P e t ro leum Co . , 495 U .S . 328 , 344 (1990 ) . Fu r the r, i t i s u se fu l to d is t ingu i sh the
que s t ion o f whe the r an an ti t ru s t v io la t ion occu r red f rom whe the r p la in t if f s have stand ing to
pu r sue i t . To avo id con fus ing these i s sue s, some cou r ts and commen ta to rs have sugge s ted
a s sum ing the ex istence of a v iolation in add re s s ing the i ssue o f s tand ing . See SA S of Pue rto
R ico v . Pue r to R ico Te l . Co . , 48 F .3d 39 , 43, 46 (1st C ir. 1995 ); see a lso 2 Ph illip E . A reeda ,
He rbe rt H ove nhamp , & Ro ger D. B lair, An t i t rus t Law ¶ 335 f , a t 299 & n .63 (2d ed . 2000 )
(co l lec t ing cases ) . Thus , wh ile the issu e of a n antitru st violatio n in this ca se i s by no mean s
2 0 Sectio n 16 states in p ertinen t part:
Any person , f irm , corpora t ion , or assoc ia t ion sha l l be en t i tled to sue fo r and have
in junc tive re l ie f , in any cou rt o f the Un i ted S ta tes hav ing ju r isd ic t ion ove r the pa r t ies ,
aga inst th reate ned loss or d am age by a v iolat ion of th e an titrus t law s . . . .
15 U .S .C . § 26 .
51
c lear , fo r pu rpo ses o f th i s appea l we a s sume the a l leged v io la t ion and assess on ly p la in t i f fs ’
s ta n di ng to p ur su e th e ir cl aim .
Fi na lly, we iden t ify fou r fac to rs tha t a re gene ra l ly deemed re levan t to de term in ing
an t i t rus t s tand ing : an in ju ry in fac t (1 ) to p la in ti f f s ’ “bu s in e s s o r p rope rty,” see 1 5 U .S .C .
§ 15 ; (2 ) tha t is no t remo te f rom o r dup lica tive o f tha t su s ta ined by a mo re d i rec tly in ju red
pa rty, s e e A s soc ia ted Gen . Con t rac to r s o f Ca l ifo rn ia v . Ca l i fo rn ia S ta te Counc i l o f
Carpe n ters , 459 U.S . at 540 -42; (3 ) tha t q ua l i fie s a s an “an t it ru s t in ju ry ,” see B run sw ick
Co rp . v . Pu eb lo Bow l -O -Ma t , Inc ., 429 U .S. 477 , 489 ( 197 7); and (4) tha t translate s into
reaso nably quan t i fiab le damages, see Assoc ia ted Ge n. Co ntracto rs of C aliforn ia v. C aliforn ia
State Cou nc i l of Ca rpen ters , 459 U.S . at 54 5. See a lso 2 A reeda , Hovenkamp & B la ir ,
An t i t rus t Law ¶ 33 5a, at 2 86 ( id en t i fy ing fou r fac to r s and no ting tha t an t i tru s t stand ing
“ requ i re s mo re than the con s t itu t iona l m in imum [o f a ] ‘ca se o r con t rove r sy’” ) . Ma te r ia l
fac tua l d i spu te s ex i st be tween the pa r t i e s a s to the fi r s t and fou r th fac to r s. Thu s , like the
d i s tr ic t cou r t , we do no t a s sume a t th i s s tage tha t these fac to r s wou ld nece ssa r ily be re so lved
aga ins t the p la in ti ff s. W e f oc us in st ea d o n th e r em a in in g tw o fac to rs : whe the r the p lain t if f s
have adequa te ly demon s tra ted tha t the a l leged in ju ry to the i r bu s ine s s o r p rope r ty is one tha t
the an t i tru s t law s we re in tended to p reven t and whe the r they qua l i fy a s e f f ic ien t en fo rce r s o f
the an ti t ru s t c la im s a t is sue .
b .
The A n t i trus t In jury
The fac t tha t p r iva te p la in t i f fs have been in ju red by a ct s t ha t v io la te th e a nt it ru st law s
52
is not en oug h to co nfer s tandin g to su e. W hethe r the relie f they see k is lega l o r eq u i tab le ,
p la in ti f f s mu s t demon s t ra te tha t they them se lves have su s ta ined an “an t i t rus t in ju ry, wh ich
is to say in ju ry o f t he typ e t he an ti tr us t l aw s we re in tended to p reven t and that f low s f rom tha t
wh ich makes de fendan ts ’ ac t s un law fu l .” Bru nsw ick C orp. v . Pueb lo Bow l -O -Ma t , Inc ., 429
U .S . at 489 (emp hasis in origina l); see a lso Carg ill, Inc . v . Mon fo r t o f Co lo . , Inc ., 479 U .S .
a t 110 -13 . In th i s rega rd , it ha s long and f requen tly been ob s e rv ed t ha t “ th e a nt it ru st law s
. . . we re enac ted ‘fo r the p ro tec t ion o f compe t i tion, not comp e t i tors. ’” B run sw ick Co rp . v .
Pue blo Bow l -O -Ma t , Inc ., 429 U .S . at 488 (quo ting B rown Shoe v . Un i ted S ta te s , 370 U .S .
294 , 320 (196 2) (em phas is in orig inal)); accord Carg ill, Inc . v . Mon fo r t o f Co lo . , Inc ., 479
U .S . at 110 ; Geo rge Haug Co . v . Ro l l s Royce Mo to r Ca r s Inc ., 148 F .3d 136 , 139 (2d C ir .
1998) ; see a lso Geneva Pha rm s . Tech . Co rp . v . Ba r r Lab s ., Inc ., 386 F .3d 485 , 511 (2d C ir .
2004 ) (no t ing tha t “foc us of [Cla yton A ct] § 7 , l ike the She rman Ac t , i s on compe t it ion no t
comp e t i tors”) .
T o eva lua te whe the r p la in t i f fs – wou ld -be compe t i to r s in a ma rke t tha t they de f ine a s
ABEM -ce r ti f ied and -e l ig ib le doc to rs – d emon s t ra te “an t it ru s t in ju ry” a s a re su lt o f the
de fendan ts ’ action s, it i s f ir s t nece s sa ry ca re fu l ly to con s ide r the n a tu re o f p la in ti ff s’ cl aim .
They assert th at ABEM , by insisting upo n com pletion of a f orm al reside ncy pro gram in
eme rgency med ic ine a s a p recond it ion to t ak ing it s ce rt i f ica t ion te s t, excep t fo r the few
p rac t ic ing phys i c ian s a l lowed po s t-1988 to take the exam w i thou t eme rgency med ic ine
re s idency training , artificially restricts th e sup ply of A BEM -certified docto rs. As a resu lt ,
53
the remune ra tion p re sen t ly rece ived by ABEM -ce r t i f ied doc to r s i s in f la ted , and the se h ighe r
costs a re then “passed on to consume rs o f and the pe rso n s and en t i tie s who pay fo r such
serv ices .” Sec ond Am . Comp l. ¶ 96 . In de tailing the ir ow n fina ncial in jury from this
scheme , p la in ti f f s a llege tha t they “have been and con t inue to rece ive sub stan t ia l ly le ss
remune ra tion t ha n ABEM c e r tified em ergen cy physician s” an d that th ey are un able to
“ com pete fo r the h ighe r sa la r ie s pa id to ABEM e l ig ib le and ABEM ce r t if ied eme rgen cy
physi cian s.” Id . ¶ 104 . Indeed , p la in t if f s spec if i c a lly p l e ad the i r remune ra tion in ju ry by
re fe rence to the d iffere nce b etwe en the ir own ea rn ings and those o f A BEM -ce r t i f ied doc to rs :
“an ave rage amoun t o f no le s s than $50 ,000 annua l ly .” Id . In shor t , the ir theory of in jury
is not sim ply tha t ABEM -ce r t i fied docto rs com man d sup er-com petitive r emu neratio n; their
in ju ry is the inab i l ity to do l ikew i se .
A s the Seven th C i rcu i t ob se rved in San juan v . Ame r ican Boa rd o f P sych ia try and
N eu ro lo gy, Inc ., such a theory does no t s ta te “an an t i trus t injury.” 40 F.3d 247 , 251- 52 (7 th
C ir . 1995 ) . The San juan plaintiff s we re also docto rs den ied bo ard ce rtification in their f ield
o f med ica l spec ia lty, in tha t ca se becau se they fa iled to pas s the defendan t’ s c e rt i f ica t ion
exam ina t ion . P la in t i f fs comp la ined tha t, because Eng l ish wa s no t the i r na t ive language , they
were a t an un fa ir d i sadvan tage in tak ing the ora l par t of the exam ina t ion co mpared to doc tors
born in the U nited S ta te s . A s a re su l t o f no t rece iv ing boa rd cer t if ica tion , the p la in t i f fs
c la imed tha t they ea rned less than the i r boa rd -ce r t i f ied co l leagues .
Judge Ea s te rb rook , w r i ting fo r the San juan pane l, rejected this theo ry o f in ju ry : “The
54
claim tha t a prac t ice redu ces (par t icu lar) p roduce r s ’ income s ha s no th ing to do w i th the
an t i t rus t law s , wh ich a re de s igned to d r ive p roduce rs ’ p r i c e s down ra the r than up .” Id . a t
251 . He ta r t ly conc luded : “P lain t if f s , who wan t to ob t a in a c reden tia l tha t w i l l he lp them
cha rge h ighe r p r ices , have p leaded themse lves ou t o f cou r t on the an t it rus t claim .” Id . a t 252 .
P la in ti f f s be fo re th i s cou rt subm it that San juan i s d is t ingu i shab le becau se the
comp la in ing doc tors in t ha t c a se w e re p erm it te d to s it fo r t he ir sp e ci al ty c e rt if ic a ti on e xam ,
wh ile they a re no t . They a rgue th a t the San juan doc to r s we re no t “exc luded f rom
compe t i tion” ; they “fa i led in com pe t i t ion .” App e l lan ts’ Br . a t 32 . Tha t argume n t , howe ver ,
go e s to whe the r the San juan p la in ti f f s sta ted an an t it ru s t v io la tion , no t whe ther th ey h ad
an t i t rus t s tand ing to p u r su e such a c la im . The Seven th C i rcu i t appea r s to have conc luded
that , even i f the de fendan t ’s cha l lenged exam ina t ion p r a c t ice v io la ted the an t i t rus t laws ,
d i sm i ssa l wa s requ ired be caus e the in jury alleged by plaintiff s – the ir inability to ea rn h igher
pay – wa s no t “an antit rust i nju ry.”
This is not to sugg est that a wo uld-b e com petitor c an ne ver d emo nstrate s tandin g to
cha l lenge an exc lu s iona ry scheme tha t p rec ludes h im f rom en ter ing a ma rke t s imp ly because
he sue s to recove r the p ro f it s t ha t h e ot he rw i se w o ul d h a ve e ar ne d . I nd e ed , b o th th e Su p rem e
Cou r t and this c our t hav e co nclu ded to th e co ntra ry. See g enera lly Atlan tic Rich field Co . v .
USA Pe t ro leum Co . , 495 U .S . at 345 -46 (recogn izing tha t, depend ing on th e na tu re o f the
in jury a l leged , com pe t i tors may suff er antitru st injury); Vo lvo N . Am . Co rp . v . Me n’s In t’ l
Prof’ l Ten nis C oun cil , 857 F .2d 55 , 67 (2d C i r . 1988 ) (conc lud ing put a tive ca rte l membe r
55
ha s an t i trus t s tand ing) . To the ex ten t the d is tr ic t cour t’s op in ion ha s been read to sugge s t tha t
comp e t i tors seeking h ighe r comp ens ation do n ot sta te an antit rust i nju ry, see Ph i l ip E . A reeda
& H erb ert H ove nkamp , An t i t ru s t Law ¶ 335 , a t 108 (2004 Supp . ) (no t ing dec i s ion and
exp re s s ing doub t tha t co mpe t i tor c la im ing inab i l i ty to ob ta in “h igher c om pen sa t ion” a s
an t i t rus t in ju ry wo u ld be an un su i tab le p la in t if f to cha llenge a boyco t t ), we th ink tha t
cha rac te r izat ion inap t. A s the mag is t ra te and d is t ric t judges who long labo red w i th th is case
r e co gn ized , t he th e or y o f an ti tr us t i nj ur y p le a de d by p la in ti ff s i n t he ir S ec o nd Am end ed
Comp la in t wa s no t tha t they we re den ied the compe t i tive remune ra t ion tha t the mark et wo uld
have awa rded bu t fo r dom ina tion by the de fendan ts ’ ca rte l . In s tead , th rough yea r s o f
l i tiga t ion , pla in t i f f s ’ singu lar com plaint w as that th ey wer e den ied the opp ortun ity to
command the same supe r-compe t it ive pay ea rned by the i r ABEM -ce r t i f ied co l leagues . See
Dan ie l v . Ame r ican Bd . o f Eme rgency Med ., 269 F . Supp . 2d a t 176 -77 . In a Memo randum
o f Law f i led to suppo r t c la s s ce r t if ica tion , p la in t if f s de sc ribed the common in ju ry to the c lass
a s f ol low s: d e fendan t s ’ “con sp i racy has p reven ted a l l P la in ti f f s f rom ob ta in ing the h igher
sa la rie s tha t ABEM and AB EM e l ig ib le eme rgency phys ic ians command .” Id . a t 176
(quo t ing Pl s.’ M em . at 26 (D oc . 70 ) (em ph as is a dd ed )) ( qu ot ati on m ar ks om itte d) . S im ila rly,
a t h i s depo s it ion , lead p la in ti f f D r . Dan ie l sta ted tha t he sough t ABEM ce r t if ica tion in o rde r
to “ c omm and a h ighe r hou rly ra te” tha t wou ld af fo rd h im econom ic “parity” w i th o ther
AB EM -cer tified physi cian s. Id . (quo t ing D an ie l Dep . a t 135-36 (em phas is add ed)) .
The conc lu s ion tha t p la in t if f s do no t sta te an an t it ru s t in ju ry is re in fo rced by the
56
na r row scope o f thei r in junc t ive p raye r , by wh ich they seek on ly to jo in ra the r than end the
exc lu s ive AB EM arrangem en t in order to acqu i re a sha re o f the supe r -compe t i t ive p ro f i ts .
A s sum ing a rguendo tha t the de fendan t s’ con t ro l ove r the su pply of A BEM-c er t if ied doc tors
doe s in ju re com pe titi on by r es tric tin g s up pl y,2 1 p la in ti f f s cann ot them selves state an an t i t rus t
in jury when the i r pu rpo se i s to jo in the ca r te l ra the r than d isband i t . S e e 2 A reeda ,
Hovenkamp , & Bla ir, A n t it ru s t L aw ¶ 348e , a t 401 (“ [T ]he re i s no an ti t ru s t r igh t to jo in a
ca r te l .”) . A s th i s cou rt no ted in Vo lvo No r th Ame r ica Co rp . v . Men ’ s In te rna t iona l
P ro fe s s iona l Ten nis C oun cil , a car te l mem ber – or w ou ld-be m embe r – wh o see ks to remove
a res t ra in t “ tha t me re ly p reven ts a ca r tel membe r f rom acqu ir ing a greate r share of the fruits
o f the ca r te l” does no t su f fe r an ti t rus t inju ry. 857 F.2 d at 6 7. If , how eve r, a ca r tel -membe r
p la in ti f f seeks to r emov e the re st ra in t so he may be “ f ree to compe te – such tha t the
mem ber’s in te res t co inc ide s w i th the pub l ic in te re st in v igo rou s compe t it ion – ” he sa t is f ie s
t h e antit rust i nju ry requ irem ent. Id . a t 67 -70 (conc lud ing tha t pu ta t ive ca r tel -membe r
p la in ti f f su f fe red an t i t rus t in ju ry because p la in t i f f ’s “ in te res t may diverg e from the inte rests
o f the car te l as a w ho le” w here plaintiff challe nged and s oug ht to end f ive c ar te l prac t ices) .
Tha t i s no t th i s ca se . P la in t if f s do no t , a f t e r a ll , su e to e l im ina te the e l ig ib i li ty c r i te r ia fo r
2 1 We no te , bu t need no t here d iscuss, d efen dants ’ statistical sh ow ing tha t the sup ply
o f d oc to rs e lig ib le to ta ke th e A B EM ce r t i f ica t io n exam ha s , in fac t , g rown by severa l
mu l t ip le s betw een th e closin g o f the prac t ice track in 1988 , a year in w h ich 367 doc tors
en te red re s idency t ra in ing p rog ram s , and 1999 , a year in wh ich 1 ,039 doc to r s g raduated f rom
suc h tra inin g pr ogr am s.
57
ABEM certifica tion tha t they claim allow s def enda nts to l im it ma rke t supp ly. Ce r ta in ly, they
do no t seek an in junc t ion a l low ing any l icense d do ctor to ta ke the AB EM exam so tha t all
who pa s s can rece ive board ce r t if ica tion in eme rgency med ic ine . P la in ti f f s do no t even seek
to e l im ina te the re s idency tra in ing requ i remen t . They sue on ly to re sto re – tempo ra r ily – the
p rac t ice t rack a s an a l te rna t ive to re sidency t ra in ing so tha t they c an qu a li fy fo r th e ABEM
e x am , after w hich th ey are satis f ied to have the ce r t i f ica tion doo r shu t on any o the r tes t
app l ican ts .2 2 In sum , by seek ing re l ief tha t wou ld pe rm i t them to jo in bu t no t end the a l leged
exc lu s ive a r rangemen t , p la in t if fs make p la in tha t they a re no t comp la in ing o f an an t i t rus t
in ju ry.
2 2 A t o ra l a rgumen t on appea l , p la in ti f f s ’ coun se l ind ica ted that his c lients do not, in
fact, que s t ion ABEM ’ s r igh t to lim i t i t s ce r t if ica tion to doc to rs who h av e comp le ted
re s idency train ing pro grams , a s ign if ican t conce s s ion becau se tha t decisio n had appe ared to
be the c r it ical fac to r su ppo r t ing the i r c la im o f re s t ra in t on trade . Coun se l exp la ined tha t
p la in t iffs asser t tha t ABEM , by o f fe ring a p ract ice- t rack option for ce rtification – bu t only
fo r eight yea rs – res tricts com petition betw een th ose d octors wh o qu alif ied for ABEM
ce r t if ica tion unde r the p rac tice track and tho se who no longe r have that op tion. C arried to
its log ical conc lu s ion , p lain t if f s ’ a rgumen t wou ld requ i re ABEM to ma in ta in a p rac t ice t rack
a l terna t ive in pe rpe tu i ty. When a sked abou t tha t po s s ib i l ity, howeve r , coun se l conceded that,
a t some f u ture po in t , p re sumab ly a f te r p la in ti f f s a lso acqu i red AB EM certifica tion, it w ould
be app rop riate to clo se th e pr actic e trac k. This sugge s t s tha t p la in t if f s ’ comp lain t is no t abou t
the qu a l i f ica t ion re s tr ic tion s ABEM pu t s on doc to r s w i sh ing to s it fo r it s ce rt i f ica t ion
exam ina t ion . I t is no t even abou t the p rop rie ty o f a p rac tice- t rack o p t io n to a l low
compe t i tion w i th doc to rs who acqu i re ABEM ce r t if ica tion a f te r re s idency tra in ing . In stead ,
p la in t i f fs ’ case re duce s to a d ispute a bou t when ABEM cou ld re ti re the p rac tice – track op t ion .
Bu t now here in the reco rd do p la in t i f fs demon s t rate that i t wa s p rema tu re fo r AB EM to re t ire
the p r a c t ic e track in 198 8 (af ter g iv ing m ed ica l s tuden ts an d doc tors e igh t years’ no t ice) ,
much le s s do p la in ti f f s s h ow t ha t t he y s u ff e re d an y a n ti tr us t i nj ur y f rom c lo s ur e a t t hi s t im e
ra the r than a t some la ter da te tha t wo uld allow th em e ntry into the pu rporte d A BEM cartel.
58
Todo rov v. D CH He althca re A utho rity, 921 F .2d 1438 (1 1 th C ir . 1991 ) , a case re lied
on by the distr ict co urt, su ppo rts th is co nclu sion . In T odo rov , the p la in ti f f doc to r sough t
ho sp i ta l p r iv ilege s in o rde r to jo in the cha rged an ticompe t it ive scheme and t he re by s ecure
a share of th e alle ged ly antic om petit ive b ene fits. Id . a t 1453 -55 . Bu t a p la in t i f f who “ seek s
to j oi n t he ex cl us iv e a rr an g em e nt ” o f w h i ch he comp lains “w hile leav ing the exclu sivity
requ i remen t o the rw ise in tac t” is s imp ly “no t a v ic t im o f an t i t rus t in ju ry. ” 2 A reeda ,
Hovenkamp , & Bla ir, An t i t ru s t Law ¶ 348 e, at 40 1. Th us, the p rivate ac t ion in Todo rov wa s
dism issed for lack of s tand ing . Todo rov v . DCH H ea l thca re Au th ., 921 F .2d a t 1455 .
T o the ex ten t that we wou ld con s ide r t ran sfe r r ing th i s ca se to the We s te rn D i s tr ic t o f
M ich igan , we have no rea son to th ink tha t the S ix th C i rcu i t takes a d i f fe ren t v iew o f an t i t rus t
stand ing . In Po t te rs Med ica l Cen te r v . C i ty Ho sp i ta l A s soc ia t ion, 800 F .2d 568 (6 th C ir .
1986) , that co urt allow ed a p laintiff h ospital to sue a rival ho spital to f orce it to end its
an t icompe t i tive p rac t ice o f denying ho sp i ta l p r iv i leges to phys ic ian s who a l so had p riv i lege s
with p la in t i f f . Th is conc lus ion is cons is te n t w i th the p rinc ip le tha t, when a p la in t i f f thu s
“ seek s to forb id exc lusivity – first o n its own beha l f and imp l ic i t ly on beha l f o f o the r s ,” the
p la in ti f f doe s s t at e an an t i tru s t in ju ry becau se it seek s “ to de s troy an an t icompe t i tive
arra ngeme nt.” 2 Ar eed a, H ove nkamp & Bla ir, An t i t ru s t Law ¶ 348e , a t 401 .2 3 A s a l ready
2 3 Er tag v. N ap les Cm ty. Ho sp . , No . 95-3 134 , slip op. a t 2 (11 th C i r. Aug . 1 , 1997 )
(unpub l ished ) , an unpub l i shed dec i s ion o f the E leven th C i rcu it re lied on ex ten s ive ly by
p la in t i f fs , similarly inv olves plaintiff s wh o sou ght to e nd th e alleg edly antico mp etitiv e
practic e at issu e, not to join it.
59
no ted , in th is ca se , p la in ti f f s do no t sue to d e s t roy, bu t ra the r to jo in , de fendan t s’ a l leged
exc lu s ive a r rangemen t fo r supp ly ing the ma rke t w i th ABEM -ce r ti f ied doc to r s so tha t
p la in ti f f s can command a sha re o f the supe r -compe t i tive remune ra t ion tha t the c a rt el sc h em e
makes ava i lab le to ABEM -ce r t i f ied doc to rs .
Esse ntially c o nc e di ng th e m er it s o f th e m ag i s trate jud ge’s c onclu sion th at a suit to
ach ieve th i s goa l wou ld no t s ta te an an t it ru s t in ju ry , the p lain t if f s a rgued in the i r ob jec tion s
to the repor t and recommenda t ion tha t they shou ld be a l lowed to amend the i r comp la in t fo r
a th i rd t ime , to l im i t the i r p raye r fo r damage s to the d i ffe rence be tween the i r ac tua l ea rn ing s
and the am oun t they wo uld have earne d in a comp etitiv e m ark et ab sen t the c ons pira cy. See
gene rally Fed . R. C iv. P . 15( a). T he y d id no t, h ow ev er, a lte r th e in ju nc tiv e re lie f s ou gh t. W e
canno t con clud e tha t the d istrict cou rt ab use d its d iscre tion in d enyin g lea ve to am end . See
Zen ith R ad io Co rp . v . Haze l tine Re sea rch , Inc ., 401 U .S. at 33 0; see g enera lly O f f ic ia l
Comm . o f U n se cu red C red ito rs o f Co lor T il e, In c . v . Coop e rs & Lyb r and , LLP , 322 F .3 d
147 , 168 (2d C ir. 2003 ) (con cludin g district c ourt d id no t abu se d isc re tion in denying leave
to amend “becau se the re wa s ‘a repea t ed f a ilu re to cu re def icienc ies by am endm ents
prev iously a l lowed ’” (c i ta t ion om itted )). A s sum ing such an amended c la im wou ld s ta te an
an t i t rus t injury, as the distric t co ur t no ted , the prop osed am endm en t represen ted a th ird
change in p lead ings ove r th i rteen yea rs o f l i tig a tion . This raised legitima te con cerns as to
both undue de lay and p re jud ice because p la in t iffs propo sed “ to cha nge the ir en t ire theo ry o f
the ca se” in a w ay th a t wa s un sup por ted b y any ex per t eco nom ic an alysis. Dan ie l v .
60
Ame r ican Bd . o f Eme rgency Med . , 269 F . Sup p. 2d a t 164 ; see Ba r row s v . Fo re st Lab s ., Inc .,
742 F .2d 54 , 58 -59 (2d C i r . 1984 ) (upho ld ing d i st r ic t cou r t’ s den ia l o f leave to amend
comp la in t to eff ect “a r adica l shift” in theory of recov ery); c f . Fom an v. D avis , 371 U .S . 178 ,
182 (19 62) (recog n iz ing de lay and p re jud ice as gro unds fo r deny ing leave to amend ) .
O n appe al, plaintiff s submit tha t the amendmen t rep resen ted on ly a c la r i f ica t ion , no t
a depar t ure , from the ir pr ior theory of an t i trus t in jury . They fur ther subm i t tha t the theory
is suppor ted by bas ic ec onom ic pr inc ip les of su pp ly and dem and , requ ir ing n o expe r t
ev idence tha t the i r en try in to the ma rke t wou ld lowe r p r ice s fo r c on sume rs . The f i rs t
a rgumen t i s be lied by the reco rd , wh ich , a s we have a l ready d iscu s sed , d emon s t ra te s tha t
p la in t i f fs ’ co re comp la in t wa s the ir inab il i ty to command the s ame supe r -compe ti t ive
compen sa t ion ava i lab le to ABEM -ce r ti f ied doc to rs . Indeed , even a f te r p la in ti f f s p ropo sed
to amend the i r p raye r fo r damage s, they o f fe red no mod i f ica tion to the i r equ itab le demand .
T o the ex tent, then , that p l a in ti f fs con t inued to seek an in junc t ion requ ir ing a tempo rary
re in sta temen t o f the p ra ct ic e t ra ck to al low them to en te r the a l leged ca r te l , wh i le o the rw ise
p re se rv ing i t s exc lu s ive ce r ti f ica t ion ar rangemen t ( and supe r -compe t i tive remune ra t ion
oppor tun i t ies) , the re wa s st i ll rea son to que s tion whe the r they we re seek ing re l ie f fo r an
an t i t rus t injury eve n afte r ame ndm ent. A s for p laintiffs ’ seco nd ar gum ent, w e note simp ly
tha t the pro-com pe t i t ive effec t for consum ers o f hav ing p la in t if f s p rov ide eme rgen cy health
ca re a t h ighe r ra te s a s ABEM -ce r ti f ied doc to r s than they had as non-ce r t if ied prac t i t ioners
61
is by no means obv ious . 2 4 P la in ti ff s’ ec o nom ic expert conceded tha t he had pe r fo rmed no
analysis o f the con sume r e f fec t o f defendan t s ’ pu rpo r t e dly anticom petitive c ond uct.
P la in ti f f s a t temp t to excu se th i s om i s s ion by a rgu ing tha t the i ssue had no t been the focu s o f
d iscovery up to tha t po in t . The i r a rgumen t i s unconv inc ing . The fac t tha t p lain t if f s had no t
ye t been called upo n to p rovid e def enda nts w ith that ec onomic a nalysis in d i scove ry doe s no t
expla in why , a f te r a decade o f litigation, th eir ow n exp ert had not b een a sked to cons ider this
c r i tica l i ss ue . U n de r t he se ci rc um s ta nc es , w e canno t conc lude tha t, the d i s tr ic t cou r t abu sed
its discre tion in re fusin g to allow p laintiffs , after m ore tha n a de cade of litigatio n, to
subs titute an un te s ted theo ry o f an t it ru s t in ju ry fo r one tha t wa s de f ic ien t a s a ma tte r o f l aw .
B e c au se p la in ti f f s fa il to demon s tra te the an t it ru s t in ju ry neces sa ry to suppor t
2 4 For e xam ple, if as ABEM d ip lom a tes , p la in ti f f s cou ld , in fac t , command $50 ,000
more in annua l remune ra t ion ( the d if fe rence iden t i fied in the i r comp la in t between themse lves
and AB EM -cer tified cou nter par ts), see Seco nd A m. C om pl. ¶ 10 4, then the tota l cost to
consum ers (hosp i ta ls , pa t ien ts , and insu re rs ) of eme rge ncy m edic al ca re w oul d in crea se, a
result of n o intere st to antit rust l aw . Even i f p la in t i f fs ’ en try in to the ABEM ma rke t resu l ted
in a dec rea se in the pay p re sen tly com man ded b y certified d octors but an increa se in
p la in t i f fs ’ pay , tha t wou ld no t nece s sa r i ly tran s la te in to a to ta l cos t sav ings fo r consume rs .
A s the m agistrate judg e obs erved with respe ct to pla intiffs’ p leade d th eo ry o f in ju ry : “ the
e c on om ic comp lex i t ies of the hea l th ca re serv ices m arke t , inc lud ing a h igh degre e o f
governmen t regu la tion and f inanc ia l invo lvemen t,” require “soph is tica ted econ om ic analysis”
to de te rm in e i f “ the no rma l law s o f supp ly and demand can even be app lied” in th i s ca se .
Dan ie l v . Ame r ican Bd . o f Eme rgency Med ., 269 F. S upp . 2d a t 1 8 2- 83 . T h e sam e
conc lu s ion app l ies to p la in t if f s ’ p ropo sed am end ed theory of injury. Ca reful e cono mic
analysis i s nece ssa ry to de term ine the ove ra l l compe t i tive e f fec t and con sume r bene f it f rom
an ac t ion tha t wou ld move a s ign if ican t numbe r o f doc to rs – name ly, the p la in ti f f s – ou t o f
one p roduc t ma rket , whe re phys ic ian s no t ce rt i f ied by ABEM p rov ide eme rgency med ica l
ca re fo r mode s t compen sa tion , in to ano ther ma rke t , whe re a l im i ted numbe r o f ABEM –
ce r t i f ied doc to rs cha rge s ign i f ican t ly h ighe r ra tes fo r essen t ia lly the same se rv ices .
62
stand ing , the re is no poin t in transf erring this cas e to an other d istrict.
c .
Eff ic ien t E nforcers
E v e n if we w ere to conc lude tha t the p la in t iffs h ad adeq ua te ly s ta ted an an t i trus t
in ju ry, tha t wou ld no t nece s sa r i ly e stab l ish the ir s tand ing to sue in th is ca se . “A show ing o f
an t i t rus t in ju ry is nece s sary, bu t no t a lway s su f f ic ien t ,” to e s tab l i sh s tand ing . C a rg i ll , Inc .
v . Mon fo r t o f Co lo . , Inc ., 479 U.S . at 110 n.5; accord G .K .A . Beve rage Co rp . v . Hon ickman,
55 F .3d 762 , 766 (2d C i r . 1995 ). “ [O ] ther rea son s” may some t ime s ind ica te tha t a pa r ty who
s ta te s an a ntitru st inju ry is ne ver thele ss n ot a p rop er an titrus t plai ntiff . A s soc ia t ed G en .
Con trac tors of Ca l iforn ia v . Ca l iforn ia S ta te Cou nc i l of Ca rpen ters , 459 U .S . a t 540 -45 ;
Carg ill, Inc . v . Mon fo r t o f Co lo . , Inc ., 479 U.S . at 11 0 n.5 . T he se o the r rea son s may
“p reven t the p lain t if f f rom be ing an e ff ic ien t en fo rce r o f the an t i t ru s t law s .” Ba lak law v .
Lov ell , 14 F .3d 793 , 798 n .9 (2d C ir . 1994 ) (c it ing Todo rov v . DCH H ea l thca re Au th ., 921
F .2d a t 14 49) . Am ong the “ o ther” fac to rs genera l ly cons idered re levan t to s tand in g are
(1 ) “ the d irec tnes s o r ind i rec tne s s o f the a s se r ted in ju ry” ; (2 ) “ the ex i s tence o f
an iden t if iab le c la s s o f pe r son s who se se lf – interest w ould norm ally motiva te
them to v in d ica te the pub lic in te re s t in an t it ru s t en fo rcemen t”; (3 ) the
specu la t iveness o f the a lleged in ju ry; and (4 ) the d i ff icu lty o f iden ti fying
damage s and appo r t ion ing them among d i rec t and ind i rect victim s so as to
avo id dup l ica t ive recove r ies .
Vo lv o N . Am . Corp . v. M en’s In t’l Prof ’l Ten nis C oun cil , 857 F .2d at 6 6 (qu oting
A s soc ia ted Gen . Con t rac to r s o f Ca l ifo rn ia v . Ca l iforn ia S ta te Coun c i l of Carp en ters , 459
U .S . a t 540-45 ) . The exten t to w hich th ese fa ctors a pply when p la in ti f f s sue fo r in junc t ive
63
re l ie f depend s on the ci rcum s tance s o f the c ase . See Ca rg i l l, Inc . v . Mon fo r t o f Co lo . , Inc .,
479 U .S . a t 111 n .6 (no ting w i th re spec t to dup l icat ive recove r ie s tha t “one in junc t ion is a s
e f fec t ive a s 100 ,” and “100 in junc tion s are no mo re e f fec t ive than one” (quo ta t ion ma rk s and
c i tat ion om itted)); see a lso Vo lvo N . Am . Corp . v. M en’s In t’l Prof ’l Ten nis C oun cil , 857
F .2d a t 66 (“ Som e, but n ot all, of th ese se cond ary facto rs ma y also limit a plain tiff’s righ t to
in junc tive relie f un der § 16 [of the C layton Ac t].”). S imila rly, the w e igh t to be g iven the
va r iou s fac to rs will nec essa rily var y with the c ircums tanc es o f pa rticu lar ca ses. See g enera lly
Su l l ivan v . Tag l iabue , 25 F .3 d 43 , 4 6 (1 s t C i r. 19 9 4) (n o ti ng th a t t he S up rem e Cou r t ha s
p rov ided “ l i tt le gu idan c e a s to how to w e igh the va r ious fac to rs” re levan t to an t i trus t
s tand ing) .
In this ca se , whe re p la in ti f f s sue fo r bo th money damage s and in junc tive re lie f , one
fac to r ra i se s pa r t icu la r s tand ing co ncerns : the pre sence of o ther eff ic ien t an t i trus t enforcers
“whose se l f -in te re s t wou ld no rma l ly mo t iva te them to v ind ica te the pub lic in te res t in an t it rus t
en forc em ent.” Ass ociate d G en. C ontrac tors of Calif ornia v . Califo rnia S tate C oun cil o f
Carpe n ters , 459 U .S . a t 542 . In co ns ider ing th is fac tor , we reco gn ize , as the d is tr ic t cour t
ob se rved , tha t p la in t if f s “have no na tu ra l econom ic se l f- in te re s t” in reducing the co s t o f
eme rgency med ica l ca re to consume rs . Dan ie l v . Ame r ican Bd . o f Eme rgency Med ., 269 F .
Supp . 2d at 182 . This sam e con cern m ay frequ ently arise w hen c om petitors s ue to v indica te
the an t i t rus t laws , w i thou t au toma t ica lly dep r iv ing such p la in t i f fs o f an t it ru s t s tand ing . Bu t
in th i s ca se , the conce rn i s no t theo re tica l. The re is a long li t iga t ion h is to ry in wh ich the
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r e l ie f pu r su ed by pla intiffs h as be en to g ain en try into an e xclus ive arra ngem ent tha t they
o the rw ise seek to ma intain in orde r to sha re in the supe r-com petitive r emu neratio n alleg edly
m ad e p os sib le b y ABEM ex clu siv ity.
Wh ile i t is que s t ionab le whe the r p la in ti f f s ’ damage s demand and the i r pa r t icu la r
p raye r for in junc t ive re l ie f wou ld genu ine ly p romo te the pub l ic in te res t in an t i t rus t
enfo rcem ent, no such conce rn wou ld ar i se i f de fendan ts ’ ac tion s we re cha llenged by ano the r
g roup o f p la in t i f fs : the hea l th ca re in su re r s, includ ing emp loyer s and gove rnmen t agenc ies ,
who compen sa te ho spitals fo r mo st eme rgen cy med ical care . It wo uld b e unr ealistic to
expec t eme rgency ca re pa tien t s, who can ha rd ly make a de l ibera te se lec tion o f an eme rgency
phy s ic ian , le t a lone inqu i re in to the doc to r ’s boa rd ce rt i f ica t ion , to pu rsue an an t it ru s t ac t ion
to cha l lenge an a r ti f icia l ly in f la ted compen sa t ion ra te . A s fo r the ho sp i ta l s , we recogn ize tha t
they p lay a dua l ro le in the a lleged scheme . A s con sume r s who pu rpo r ted ly ove rpa id fo r
eme rgency med ical care , they m igh t be seen a s v ic tim s o f the al leged an t icompe t i tive conduc t
and po ten t ia l p lain t if f s . On the o the r hand , a s supp l ie r s o f re s idency t ra in ing in eme rgency
m ed ic ine, the ho spitals h ave a n alleg ed inte rest in lim iting A BEM certifica tion to d octo rs
with suc h tra inin g. Bu t pr iva te a nd gov ernmen t hea l th care insu re rs tha t rou t ine ly re imbu rse
hosp itals fo r m i l lion s o f do lla r s in eme rgency ca re p rov ided to thou sand s o f cove red patien ts
have a d i rec t and und iv ided econom ic in te re s t in ob ta in ing lowe r co st s , a s we l l a s the lega l
soph istication and r esou rces n ecess ary to pu r sue an an ti t ru s t cha llenge . The fac t tha t none
has d one s o to d ate does not su ppo rt recog nizing plaintiff s’ stand ing. R ather, it re in fo rce s
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the conc lu s ion th a t no pub l ic in te re st i s sac r if iced by d i sm i ss ing th i s ac tion fo r lack o f
p e r so n a l ju risdi ction and ven ue w itho ut tra nsf er to ano ther distr ict. See A s soc ia ted Gen .
Con trac tors of Ca l iforn ia , Inc . v . Ca l iforn ia S ta te Coun c i l of Carp en ters , 459 U .S . at 542 .
III .
Conc lu s ion
T o summariz e, we conc lude th at the d istrict cou r t cou ld no t acqu i re pe r sona l
ju r isd ic tion ove r CORD o r the ho sp i ta l de fendan t s th rough the se rv ice o f p roce s s p rov i s ion
o f Sec t ion 12 o f the C layton Ac t un les s venue wa s e s tab l i shed pu r suan t to tha t sec t ion .
Because Sectio n 12 v enue d id no t ob ta in in th i s ca se , the ac t ion aga in s t COR D and the
ho sp i ta l defe ndan ts is prop erly dismis sed f or lack of p erson al jurisd ic t i on . We fu r the r
conc lude that th e a c t ion aga ins t ABEM is p rope r ly d ism issed fo r lack o f venue because
ne i ther Sec t ion 12 o f the C lay ton Ac t no r 28 U .S .C . § 1391 pe rm i t s th i s ca se to be heard in
the We s tern D is t r ic t o f New Yo rk . F ina l ly , we conc lude tha t t rans fe r o f th is case to any o the r
d i s tr ic t whe re ju r isd ic tion and venue m igh t p rope r ly be ob ta ined i s no t in the in te re st o f
jus t ice because p la in t iffs lack an t i trus t s tand ing to pursue th is ca se fur ther .
The June 30 , 2003 judgmen t o f t he di st ri ct co u rt di sm is si ng al l c la im s is A FF IRMED .
KA TZMAN N, C ircuit Jud ge, co ncur ring in p art and dissen ting in p art:
I concu r in the ma jo r ity’ s we l l- rea soned de te rm ina t ion s tha t per sona l jurisdictio n in
the Wes te rn D is t r ic t o f New Y o rk does no t ex is t o v er CORD and the Hosp i ta l De fendan ts ,
and tha t venue in the We s te rn D istrict is no t supp orted f or A BEM . I respe ctfully disse nt ,
how ever , f rom the conc lu s ion tha t tran s fe r to ano ther d i s tr ic t i s no t in the in te re st o f ju st ice
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becau se the p la in t i f fs lack an ti t ru s t s tand ing .
I respe ctfully disa gree w ith the two conc lu s ion s unde rlying the ma jo r i ty ’s v iew tha t
the p la in ti f f s he re canno t demon s tra te stand ing : 1 ) tha t they have no t demons t ra ted an t i t rus t
in ju ry, and 2 ) tha t even i f they cou ld show an t i tru s t in ju ry, they do no t have an adequa te se l f –
interest in secu ring re lief to v indica te the p ublic in terest in a ntitrust en forcemen t.
An t i trus t In jury
I be l ieve the an ti t ru s t in ju ry inqu i ry is in fac t a s imp le on e . The an t i trus t in jury
requ i remen t “en su re [ s] tha t ‘a p la in t i f f can recove r on ly i f t he lo s s s tem s f rom a
compe t i tion – reduc ing a spec t o r e f fec t o f the de fendan t ’s behav io r. ’” P r im e tim e 24 Jo in t
Ven ture v . NBC , 219 F .3d 92 , 103 (2d C i r . 2000 ) (quo ting Atlan t ic R ich f i e ld Co . v . USA
Pe t ro leum Co . , 495 U .S . 328 , 334 (1990 ) ) . He re the a llega tion s in the Second Amended
Comp la in t mee t th i s bu rden . They s ta te tha t becau se the de fendan t s c lo sed the p rac tice track
and con t inue to fo rb id p rac t ice – t rack phy s ic i ans f rom tak ing the ce rt i f ica t ion exam , the
p la in ti f f s a re be ing “un re aso na bly re stra in ed from c om pe tin g in th e m ark et” fo r A B EM –
ce r t if ied eme rgency phys ic ian s , and tha t a s a con sequence , the p la in t i f fs “have been and
con t inue to rece ive su bstan tia l ly le s s remune ra t ion than ABEM ce r t if ied eme rgency
physi cian s.” ¶ 10 4. T hes e alle gatio ns s uff ice, in my v iew , to a l lege lo s se s s temm ing f rom
a comp etitio n-re duc ing asp ect o r eff ect o f the def end ant’ s be hav ior.
Indeed , th i s ca se i s no t un l ike o the r an t i tru s t ca se s in wh ich cou r t s h av e he ld that
health ca re p rov ide r s a lleg ing h a rm f rom an t i -compe t i tive p ract ices have demon s t ra ted
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an t i t rus t s tand ing . In B rade r v . A llegheny Gene ra l Ho sp i ta l, 64 F .3d 869 (3d C ir . 1995 ) , a
phy s ic ian c la imed tha t a con sp i racy had r esulted in the te rm ina t ion o f h is hosp i ta l p r iv ileges ,
and that the loss of these p rivilege s prev ented him f rom obtain ing p rivileges a t o the r
hosp i ta ls . Id . a t 871 -72 . He a l leged tha t th is con s t itu ted a Sh erm an A ct vio latio n, id ., s ta t ing
tha t the de fendan ts ’ ac tion s “p reven ted the P la in ti f f and o the rs f rom engag ing in the p ract ice
o f gene ra l va scu la r trauma su rge ry in the re levan t ma rke t,” wh ich “p reven ted compe ti t ion
in the re levan t prod uct m arket w ithin the r elev ant g eog rap hic m ark et.” Id . a t 875 -76 . The
cour t conc luded tha t these a l lega t ion s—w h ich a r e sim i la r in a ll impo r tan t re spec t s to the
p la in t i f fs ’ a l lega t ion he re— su f f iced to demons t ra te an t i trus t inju ry. Id . at 87 6-7 7. See a lso
Ange l ico v . Leh igh Va l ley Ho sp ., Inc ., 184 F .3d 268 , 272 -73 (3 rd C ir. 1999 ) (hold ing tha t a
su rgeon -p la in t i f f w ho had sued th ree ho sp i ta l s fo r e f fec t ive ly exc lud ing h im f rom s ta ff
pr iv i leges had show n an t i trus t in jury and an t i trus t s tand ing) .
The ma jo r i ty , howeve r , conc lu des th at the p laintiffs cann ot po ssibly dem onstra te
an t i t rus t in ju ry becau se the p la in t if f s ’ “ theo ry o f remune ra tion is no t s im ply th at A B EM –
ce r t if ied doc to r s command supe r -compe t i tive remune ra t ion ; the i r in ju ry is the inab i l ity to do
likew ise.” M ajo rity O p.a t 58 . To s upp ort th e a s s e r t ion tha t the p la in t iffs seek to earn
“ supe r -compe t i tive” wa ges, th e m ajo r ity make s seve ra l a s se r tion s abou t the re lie f the
p la in ti f f s seek . In my v iew , the se a s ser t ion s a re p rob lema t ic .
First, the ma jo ri ty con tend s tha t the p la in t i f fs ’ theo ry “wa s no t tha t they we re den ied
the compe t i tive remune ra t ion tha t the mark et wo uld have awa rded bu t fo r dom ina t ion by the
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de fendan ts ’ carte l.” M ajo rity O p. a t 59 -60 . I be l ieve , howeve r , tha t th i s s ta temen t is be l ied
by the Second Amended Comp la in t , wh ich s ta te s tha t the p lain t if f s have been dep rived o f
the opp o r tu n i ty to “com pete fo r th e h igh e r s a la r ie s pa id to ABEM e l igib le and ABEM
ce r t if ied eme rgency phy s ic ian s .” ¶ 104 (empha s i s added ) . Becau se the comp la in t spec i f ie s
tha t th e p lai nt iff s, i f th ey o bt ain th e r em ed y th ey see k , w ill c om pe te with ex is tin g A B EM –
eligible and AB EM -cer tified em erg enc y physic ians , th e comp la in t make s c lea r tha t the
p la in ti f f s do in fac t seek the compen sa t ion tha t the ma rke t wou ld have awa rded them bu t fo r
dom ina t ion by the de fendan ts ’ ca r te l . T rue , these sa la r ies w i ll be h ighe r than the p la in ti f fs ’
cu r ren t sala ries. Ho we ver, the plaintiff s’ dem ands are co nsisten t with c onsumer b enef it , in
tha t increa sed su pply cou ld resu lt in lowe r salaries f or A BEM -certified physician s in ge neral,
and low er price s for c onsumers of the ir service s. In the e nd, if the p rac t ice – t rack exc lu sion
is an t i -compe t i tive in v io la t ion o f the Sherm an A c t , and p la in t iffs are awa rded the re l ief they
seek , con sume r s w i ll have mo re cho ice s a s they seek the h igh e s t qua l ity ABEM -ce r ti f ied
se rv ice a t the lowe s t p rice—exac t ly the so rt o f ou tcome th e Sh e rm a n Ac t is desig ned to
fos ter . See No r the rn Pac . Ry . Co . v . Un i t ed S ta te s , 356 U .S . 1 , 4 (1958 ) ( s ta t ing tha t the
She rman Ac t res ts on th e p rem i se tha t compe t it ion “w i ll yie ld the be s t a lloca tion o f ou r
econ om ic resou rces , the lowes t p r ices , the h ighes t qua l i ty and the g rea tes t ma te r ia l p rog ress”
and ad d ing tha t “ the p o l icy unequ ivoc a l ly la id down by the A c t is compe t i t ion”) .
Second , the ma jo r i ty s ta tes tha t the “ [p ] la in ti f fs do no t . . . sue to e l im in a te the
eligibility c r i te r ia fo r ABEM ce r t if ica tion that the y claim allo ws d efen dants to l im it ma rke t
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sup ply.” M ajo rity O p. a t 61 . Howeve r , the Second Amended Com p l a in t s e ek s to have
ABEM “pe rm i t p la in ti f f s and the c la s s they rep re sen t who , a s o f the da te o f judgmen t he re in ,
o r w i th the pas sage o f time , mee t ABEM ’ s p ract ice t rack cr i te r ia . . . to tak e th e ABEM
ce r t if ica tion exam ina t ion .” In m y view, th is wo uld co nstitute th e elim inatio n o f the
eligibility c r i te r ia tha t the p la in tiffs cla im allows th e def enda nts to lim it mark et sup ply
ille ga lly.
Th i rd , the ma jo r i ty s ta te s tha t the p la in ti f f s “do no t seek an in junct ion a llow ing any
l icen sed doc to r to take the ABEM exam so tha t a l l who pa s s can rece ive boa rd ce rt i f ica t ion
in eme rgency med ic ine .” M ajo rity O p. a t 61 . This is t rue . Howeve r , th i s on ly mean s tha t
the p la in ti f f s w i ll ea rn “supe r -compe t i tive” remune ra t ion i f one a s sume s that all re s tr ic tion s
on wh o m ay take th e certific ation e xam are illega lly an t i -compe t i tive . The p la in ti f f s do no t
a l lege t h e il lega l li ty o f res t r ic tions o the r than the res tr ic t ion on p rac t ice – t rack phys ic ians .
Whe the r exc lud ing phy s ic ian s who are ne i ther re s idency -t rack no r p rac t ice – t rack phy sic ian s
is l aw f u l m i gh t b e th e su b je c t o f som e o the r li t iga t ion b rough t by some o the r se t o f exc luded
p la in t i f fs . A t th i s s tage o f th i s li t iga t ion , howeve r , w i thou t fu r the r d is co v er y, I b el ie ve w e
mus t acce pt no t only the p laintiffs ’ allega tions th at exc ludin g practic e-track physician s is
i l lega l ly an ti -compe ti t ive , bu t also the view— implic it in the c om plaint— that ex cludin g all
phy s ic ian s o the r than re s idency -t rack phys ic ian s and p rac tice – track phys ic ian s is reaso nable
and n ot illegal. 2 5
2 5 Of cour se, no t all exc lusio ns a re v iolat ion s of the S herma n A ct. See , e.g., Wh ite
Mo to r Co . v. Un ited S ta te s, 372 U .S . 253 , 263 (1963 ) ( sta t ing tha t ver t ica l te r r ito r ia l
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Fou r th , the ma jo ri ty s ta te s tha t the p la in ti f f s seek to resto re prac tice-track eligibility
only “ tempo ra ri ly.” M ajo rity O p. a t 61 . Howeve r , the Second Amended Com p la in t seek s
to have the c e r t if ica tion exam open to a ll c las s membe r s “who , a s o f the da te o f judgmen t
he re in , or w i th the pa s sage o f time , mee t ABEM ’ s p ract ice track cr i ter ia .” (empha s is added) .
I believ e the c om plaint t hu s s e ek s re l ie f tha t i s by no mean s tempo ra ry . A foo tno te in the
majo rity opin ion su gges ts tha t at oral arg um ent pla intiffs’ c oun sel adm itted that th e sou ght-
a f te r rem edy is le ss th an p erm ane nt. Ma jo r i ty Op . at 6 2 n .22. In the re levan t po r t ion o f the
o ra l argumen t, coun sel w a s a sked whe the r , becau se “demand is exceed ing supp ly” in the
ma rke t fo r eme rgency med ic ine se rv ices , the to tal co s t o f such se rv ice s wou ld s tay the same ,
even if re l ief were gra nted . O ral A rg. R eco rdi ng at 1 0:5 5:5 3. Co unse l respo nded , in part,
tha t even i f demand is cu r ren t ly “exceed ing supp ly,” tha t m igh t change i f a cou r t g ran ted the
re l ie f the p la in t if fs seek , so tha t supp ly wou ld inc rease to fu l fi l l demand , and “have ma rke t
fo rce s take ove r en t i re ly.” Id . at 10:5 6 :10 . La te r , in re spon se to a fo llow -up que s tion ,
counse l sta ted that once p rac t ice – t rack phy sic ian s a re pe rm i t ted to take the ce rt i f ica t ion exam ,
and s upp ly ha s inc rea sed , “the v io la t ion p re sumab ly w i l l have cea sed .” Id . at 1 0:5 6:4 3. I
l im ita t ion s “ma y be allow able p rotectio ns ag ainst ag gressiv e com petitors o r the on ly
practic able mean s a sma l l company ha s fo r b reak ing in to o r s taying in bu sine s s” and hence
perm issible und er the a ntitrust law s); Ange l ico, 184 F .3d a t 276 n .3 ( sta t ing in a hea l th care
exc lu s ion ca se that “ [g ] roup boy co tts o r conce r ted re fusa ls to dea l a re no t a lways pe r se
v io la tion s o f the She rman Ac t ; ra the r, the ana lys i s tu rn s on the fac ia l e f fec t s o f the
cha l lenged practic e.”); Re tina Ass ocs ., P .A . v . Sou the rn Bap t is t Ho sp ., 105 F .3d 13 76 (1 1th
C ir . 1997 ) (ho ld ing tha t a re fe r ra l ag reemen t be tween non – spec ia l ized oph tha lmo log i s ts and
a re t ina spec ial i st , under wh ich the p la in t if f s , re tina specialists, rece ived v i r tua l ly no re fe r ra ls ,
was n e i ther per se un reasonab le nor i l lega l under the ru le of reaso n ana lys is) .
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v iew the se re spon se s a s s imp ly a ssum ing hypo the t ica l ly tha t ma rke t fo rce s have taken ove r
and v io la tion s have cea sed becau se the p lain t if f s have ob ta ined the ongo ing re l ief they seek .
Ne i the r resp ons e ind icate s a c onc essio n “th at, at s om e fu ture poi nt, . . . i t wo u ld be
app rop riate to clo se th e pr actic e trac k.”
Fo r the se rea son s , I do no t be lieve tha t the p la in ti f f s seek to ea rn “ supe r -compe t i tive”
wages , or an y other relie f that is in con s i s ten t w i th the i r a llega tion s tha t 1 ) p roh ib i ting
p rac t ice – t rack phy s ic ian s f rom tak ing the ce rt i f ica t ion exam i s i llega lly an t i -compe t i tive and
2 ) the p la in t if f s have su f fered an t it ru s t in ju ry a s a con sequence .
O f cou r se , i t may be tha t the p lain t if f s are no t entitled to re l ie f on the me r it s . Pe rhap s
the exc lu s ion o f p rac tice – track phys ic ian s i s en t i re ly rea sonab le becau se , in f a c t , i ts p ro –
compe t i tive bene f i ts ou twe igh it s an ti -compe ti t ive e f fec ts . Fo r examp le , pe rhap s phys ic ian s
who wou ld qua l i fy fo r the exam on ly th rough p rac t ice expe r ience a re fundamen ta l ly less
sk i lled than tho se who have comp le ted an approv ed res idency p rog ram . These issues ,
how ever , a re c la s s ic “ ru le o f rea son” que s tion s , d i s tinc t from the an ti t ru s t s tand ing
que s t ion .2 6 See Geneva Pha rm s . Tech . Co rp . v . Ba r r Lab s . , Inc ., 386 F .3d 485 , 506 -07 (2d
C ir . 200 4) (sum mariz ing ru le of rea son a nalysis); Ange l ico, 184 F .3d a t 272 -76 (ho ld ing tha t
a su rgeon -p la in t if f who had sued th ree ho sp ita l s fo r e f fec tive ly exc lud ing h im f rom s ta ff
2 6 Mo reove r , such que st ion s s imp ly canno t be re so lved w i thou t s ign i f ican t add i t iona l
di sc ov er y, a f ac t th at t he m ajo rity o p in ion seem s to acknow ledge , when i t s ta te s tha t
“ [c ]a refu l econom ic ana ly s is i s nece s sa ry to de term ine th e ove ra ll compe t it ive ef fec t and
con sume r bene fit f rom” pe rm i tt ing non -ABEM -ce r ti f ied eme rgency med icine p hysicians to
bec om e A BEM -cer tified . Ma jor i ty Op . a t 65 n .24 .
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p r iv ilege s had an t i tru s t standin g, and disting uishin g betw een a ntitrust stan ding and a nti-
compe t i tive ma rke t e f fect unde r the rule of reaso n ana lysis); F ine v . Barry & Enr igh t Prods . ,
731 F .2d 1394 , 1397 -99 (9 th C i r . 1984 ) (ho ld ing tha t a p la in ti f f who wa s no t pe rm it ted to be
a con testant o n a game s how beca use o f restrictio ns on repea t appe aranc es ha d stan ding to
sue bu t d id no t demon s t ra te su f f ic ien t in ju ry to the con te s tan t ma rke t unde r a ru le o f rea son
ana lys is) .
The m ajo rity r e l i e s pr inc ipa l ly on San juan v . Ame r ican Boa rd o f P sych ia t ry and
Neu ro logy , Inc ., 40 F .3d 247 (7 th C i r. 1995 ) . I be l ieve San juan is fundamen ta l ly d if fe ren t
f rom the ca se be fo re u s . In tha t ca se , the phy sic ian -p la in t i f fs had fa i led an o ra l exam ina t ion
o f the Ame r ican Bo ard of P sychia try and Ne uro log y. See id . a t 248 . The p la in ti f f s had
neg lec ted to show tha t the i r exc lu s ion ha rmed con sume rs , in s tead demon s t rat ing on ly tha t
it harme d th e pla intif fs. See id . a t 251 (ob s e rv ing tha t “[ i] t is hard to see how the Boa rd’s
ac t iv i t ie s cou ld amoun t to an exerc ise of m arket p ow er, wh ich en tails cutting back outp ut in
the ma rke t and thu s d r iv ing up p r i c e s to con sume r s ,” and add ing tha t “ [w ]hen cha llenged ,
p la in ti f f s rev eale d th at the y wa nt to show in jury to p rod uce rs”). San juan is thus a classic
case of a l leg ing h arm to com petitors, n ot com petition , wh ich, as th e ma jority rightly poin ts
out , doe s no t suf fice for Sh erm an A ct pr otec tion . See B r un sw ic k C o rp . v . P u eb lo B ow l-O –
M at, Inc ., 429 U .S . 477 , 488 (1977) (“T he an t i trus t laws , ho wev er , were en ac ted for ‘ t h e
p ro tec tion o f compe t i tion , no t compe t ito r s .’” ) (quo t ing B rown Shoe Co . v . Un i ted S ta te s, 370
U .S . 294 , 320 (1962)) . He re , by con t ra st , the p la in t i f fs have a l leged tha t the de fendan ts have
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“sev erely l im it [ed ] the ou tpu t o f ABEM ce r t i f ied and ABE M e l ig ib le eme rgency phys ic ians”
and th at “h igh e r co st s o f ABEM em ergency phys ic ians hav e been p assed on to consum ers
o f . . . such se rv ice s .” Second Amended Comp la in t a t ¶¶ 94 , 96 . Becau se they have a l leged
tha t releva nt con duct do e s in fac t ha rm con sume r s and no t ju s t them se lve s , I be l ieve the
p la in ti f f s in ou r ca se h av e a lleged “injury of the type th e antitru st law s we re inten ded to
p reven t .” B run sw ick Co rp ., 429 U .S . at 489 .
The majo rity a l so c ite s to Todo rov v. DC H M edica l Auth ority , 921 F .2d 14 38 (1 1th
C ir . 1991 ) . I be l ieve th i s ca se i s a l so inappo s i te . In Todo rov , an appea l from a summ ary
judgmen t gran t, the Ele venth Circu it conc luded tha t if a loca l ho sp i ta l g ran ted the p la in t if f –
phy s ic ian p r iv ilege s to adm in i s te r CT scan s , tha t phys ic ian—a neu ro log i s t who d id no t
spec ia lize i n CT s ca n s—w o u l d “ a dm i ni st er an d in te rp re t CT scan s o f the head less ef ficien tly
than the rad io log i st s ,” who wou ld “ reduce the p rice o f CT s c an s o f the head un t i l [ the
p la in ti f f ] cou ld no longer par t ic ipa te in the marke t a t a p ro f i t .” Id . a t 1453 . The p la in ti f f
“eve ntually wou ld e i ther be d r iven f rom the ma rke t o r reach some ag reemen t w i th the
radiolo gists to fix p rices,” a n ou tcom e that “wo uld no t bene f it con sume r s,” and the Sev enth
Circu it thu s a f f irmed the g ran t o f summa ry judgmen t to the de fendan ts fo r lack o f an t i t rus t
s tand ing . Id . at 145 3-55 . Here , we c onsid er the a ntitrust inju ry questio n on a mo tion to
d ism iss , when onl y limite d di sco ver y has b een con duc ted. In this p osture , there is n o bas is
to conc lude tha t 1 ) if p rac tice – track phys ic ian s we re pe rm i tted to si t fo r the ce rt i f ica t ion
e x am , tho se who pa s sed wou ld p rov ide eme rgency med ic ine se rv ices le s s ef f ic ien t ly than do
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re s idency -t rack phy s ic ian s ; 2 ) tha t re s idency -t rack physician s wo uld red uce th eir price s until
the p rac t ice – t rack phy sic ian s were e i ther d r iven f rom the ma rke t o r ag reed to f ix p r ice s ; and
3 ) tha t con sume r s wou ld no t bene f i t. Con sequen tly, I do no t be l ieve Todo rov affo rds a b asis
fo r c on clu di ng th at t he pl ain tif fs ca nn ot sh ow an titr us t in ju ry. 2 7
Se l f -In te re s t in Secu r ing Re lie f and the Assoc ia ted Gen era l Con trac tors Fac tors
Second , the ma jo ri ty conc lude s tha t the pla intiffs c anno t dem onstra te s tand ing ba sed
on one o f the “ other r easo ns” c ourts so metim es co nside r in ana lyzing an titrust stand ing .
M ajor ity Op . a t 66 . The se ad ditiona l facto rs, analyze d on ce an titru s t in ju ry ha s been
demon s t ra ted , we re o r ig ina l ly iden t if ied in Asso ciated Ge nera l Con tractor s v. Ca lifornia
State Counc i l o f Carpen ters , 459 U .S . 519 (198 3) an d are s om etime s refe rred to collec tively
as the “e f f ic ien t en fo rce r” ana lys is .
He re , the ma jo ri ty ba se s it s conc lu s ion on ju s t one o f the A s soc ia ted Gene ra l
Con trac tors po in t s: “ [t ]h e ex is tence o f an iden t i f iab le c lass o f pe rsons whose se l f – in te res t
wo uld norm ally motiva te them to v ind ica te the pub l ic in te re st in an ti t ru s t en fo rcemen t .” Id .
at 54 2. The majo rity express es co ncern that the plaintiff s hav e no “ natura l econ om ic se l f –
interest” in reduc ing the cos t o f em erg enc y med ical c are to con sum ers. Ma jor i ty Op . a t 68 .
O f cour se, it can not b e the c ase tha t any p la in t i f f seek ing to inc rease i ts income fa il s the
2 7 Indeed , at leas t one commen ta to r ha s conc luded “ [ t ]he Todo rov cou r t ’s app roach
to a n t i tr u s t in ju ry wa s w rong ,” becau se the an t it ru s t in ju ry que st ion doe s no t requ ire the
invo lved econom ic ana lys is eng a g ed in by Todo rov , analysis tha t is mo re relev ant “to
an t i t rus t lia bility, to ca us atio n, a nd to de te rm in in g th e amo un t o f d am ag es .” Ro na ld W .
Dav is , S tand ing on Shaky G round : The S trange ly E lus ive Doc tr ine o f An t i trus t In jury , 70
An t i trus t L .J . 697 , 750 (200 3) .
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A s soc ia ted Gen e ra l Con trac tors ana lys is . Such a ru le wou ld essen t ia l ly p roh ib i t an t it rus t
suits by compe ti to rs , wh ich the majo rity ackno wled ges is sim ply not the la w. Ma jo r i ty Op .
a t 5 9 . Ra the r , the ma jo r i ty res ts i ts ho ld ing on a d i f fe ren t g round : tha t hea l th insu re rs are
bette r suit ed th an th e pla intif fs to vin dica te the pub lic’s in teres t in lowe r co sts.
In Assoc ia ted Genera l Con trac tors, the Sup reme Cou rt grapp led with the prob lem that
a l i te ra l read ing o f sec t ion fou r o f the C layton A ct “is bro ad en oug h to encom pass every harm
tha t can be attrib uted dire ctly or in dire ctly to th e co nse que nce s of an a ntitru st vio latio n.” Id .
a t 529 . A s the ma jority o pin ion her e ob serv es, Assoc ia ted Genera l Con trac tors conc luded
tha t Cong re s s mu s t have in tended tha t li t iga t ion under sec tion fou r o f the C layton A ct “w ould
be sub jec t to con s t rain t s compa rab le to we l l -accep ted common – law ru le s ,” such a s
“fore seeab ility and p rox ima te cau se , directn ess of injury, certain ty of d ama ges, an d priv ity
o f con t rac t .” Id . at 532 -33. T o stay faith ful to th is cong re s s iona l in ten t , the Cou r t la id ou t
the fac tors we now ca l l the “e f f ic ien t en fo rce r” ana lysis to “gu ide the exe rc ise of jud gm ent”
in de te rm in ing “whe the r a pa r ty in ju red by an antitrus t v io la tion may recove r t reb le damages”
unde r the C layton Ac t. Id . a t 536 -37 . The Assoc ia ted Genera l Con trac tors p la in t iffs we re
un ion s allegin g that a mu l t i-emp loyer assoc ia t ion and i ts m embe rs coerced th ird pa r t ie s and
a s soc ia t ion memb ers in to b usin ess r elatio nsh ips w ith n on- uni on f irms . Id . a t 520 . App ly ing
the mu l t i-fac tor ana lys is , the Cou r t he ld tha t these “a l lega t ion s of con sequen t ia l harm” w ere
“ in su f f ic ien t a s a ma t te r o f law .” Id . at 54 5.
Asso c ia t ed G enera l Con trac tors o f fe rs no gu idance as to how m any fac to rs mus t
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w e i g h ag a in s t a p la in t i f f in o rde r to f ind tha t a C layton Ac t remedy i s p rec luded , o r wh ich
fac to r s a re th e mo s t impo r tan t . I t seem s c lea r, howeve r , tha t the u l t ima te pu rpo se o f the
“e f f ic ien t enforce r” ana lys i s is no t to f ind the idea l p la in ti f f , no r the mo s t a l t ru i s tic one , no r
the one mo s t g r ievou s ly in ju red by the an t i-comp e t i t ive conduc t . Ra ther , the pu rpose is to
en su re tha t the s ta tu te i s no t read so b road ly tha t any pe rson who ha s been harm ed by an ti-
compe t i tive conduc t , howeve r remo te ly o r ind i rec t ly , i s g ran ted a r ig ht to sue . See a lso
Ve r i zon Commu n i ca t ion s , In c. v. L aw O f fi ce s of Cu rt is V . T r inko , LLP, 540 U .S . 398 , 416 -17
(S tevens , J ., concu r ring ) (ob se rv ing tha t the A s soc ia ted Genera l Con trac tors in te rp re ta tion
o f sec t ion fou r wa s in tended to avo id dup l icat ive recove r ie s and comp lex appo r t ionmen t o f
damages , and s tating th at this inte rpretatio n “ha s thus a dher ed to J ustice H olme s’ obs ervati on
tha t the ‘gene ral tendency o f the law , in rega rd to damage s a t lea s t , i s no t to go beyond the
f i rs t s tep ’” ) (quo ting Sou thern Pac ific Co . v . Darne l l-Taen ze r Lumbe r Co ., 245 U .S . 531 , 533
(1918)) .
I sim pl y do no t b eli ev e it is n ec es sa ry, in ord er to ef fectu ate this pu rpo se , to p rec lude
suit by the p la in t i f fs in the p resen t case so le ly because in su rance compan ie s appea r to have
a g rea te r se l f -in te res t in v ind icatin g th e pu blic i nter est in antit rust e nfo rcem ent. I n m y v iew ,
the Assoc ia ted Genera l Con trac tors issues here a r e s im i la r to tho se in Po t te r s Med ica l
Cen te r v . C i ty Ho sp i ta l A s soc ia t ion, 800 F .2d 568 (6 th C i r . 1986 ) , in wh ich the Sixth Circu it
con s ide red a n ti tr us t c la im s b rough t by a sma l l ho sp ita l , Po t te rs Med ica l Cen te r, aga in s t the
Eas t Liv erp ool City H osp ital, a n earb y large r ho spita l. Id . a t 570 -71 . Po t te rs a l leged tha t
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City Ho sp i ta l v io la ted the C layton Ac t by re fu s ing to g ran t s ta f f p riv i lege s to do ctors w ith
p r iv ilege s a t Po t te r s , p re s su ring doc to r s w i th C i ty Hosp i ta l pr iv i leges no t to ob ta in Po t ters
p r iv i leges , and h a rass ing doc tors t o pr eve nt th em from re ferr ing patie nts to Po tters. Id . a t
571 . The d i s t ric t cou r t had ru led that the p la in t if f s lacked an t i tru s t stand ing ba sed on a mu lti-
fac to r tes t s im i lar to our “eff ic ien t enforcer” a n al ys is an d de ri ve d fr om A s soc ia ted Gene ra l
Con trac tors . Id . a t 575 . The S ix th C i rcu i t re ve rse d, f in di ng th at 1 ) P ot ter s w as “c lea rly a
comp e t i tor” in the ma rke t fo r inpa t ien t phys ic ian se rv ice s—a fac t tha t we ighed in favo r o f
s tand ing ; 2 ) Po t te r s ’ s in ju rie s f lowed d i rec t ly f rom the a lleged an ti t ru s t v io la t ion ; 3 ) damage s
were somewha t specu lat ive , bu t no t enough to p rec lude s tand ing ; and 4 ) the r i sk o f
dup licativ e rec ove ry wa s m inim al. Id . a t 576 , 580 . I t s eem s tha t the iden tica l mu l t i- fac to r
analysis wou ld y ie ld the same resu l t i n th i s ca se . Mo reove r, p re sumab ly , in su rance
compan ie s wo uld h ave b een a s we ll situ a t ed to d em and tha t C i ty Ho sp i ta l g ran t sta f f
p r iv ilege s to Po tte rs p hys i c i an s a s insure rs are in our c ase to d ema nd th at the d efen dants
reop en the practic e track . This p ossibility app arently did not trou ble the Sixth Circu it .2 8
The m a jo r i ty a ttemp t s to d i f fe ren t ia te Po t ters by sugges t ing tha t the p la in t i f fs he re ,
un l ike tho se in Po t ters, do no t seek to “ fo rb id exc lu s iv i ty” by trying “ to des t roy an
an t icompe ti t ive a r rangemen t.” Ma jor i ty Op . a t 62 -63 . Howeve r , a s no ted abov e , th e
2 8 I t is wo r th no t ing tha t we re we to t ran sfe r th i s ca se , we wou ld p re sumab ly t ran sfe r
it t he W es te rn D is tr ic t o f M i ch ig an , w he re A BEM is loca ted , and whe re the p la in t i f fs ’
app l ica t ion s we re den ied. B ecau se M ichiga n is in th e Six th C i rcu i t, i f the Po t ters facts
re la ting to an t it ru s t s tand ing a re e s sen t ial ly s im i la r to tho se he re , a s I be lieve they a re, Po t ters
wo uld co ntrol.
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p la in ti f f s here s eek to forb id the e xclus ion o f p ra c ti ce – tr a ck phys ic ian s f rom ABEM
ce r t if ica tion , wh ich w ould destro y an alleg edly an t i -compe t i tive a r rangemen t . T rue , a s the
majo rity po in t s ou t , the i r re l ief wou ld p re se rve s om e exc lu s iv i ty fo r the ce r t if ica tion e x am .
M ajority Op . at 63. B ut aga in, I believ e this on ly mean s that the plain t i f fs s e e some
re s tr ic tion s on who may take the exam a s rea sonab le and lega l, even though , they con tend ,
p roh ib it ing p rac t ice – t rack phy sic ian s f rom tak ing the exam is i l lega l ly an t i-comp e t i t ive . In
the S ix th C i rcu i t ca se , Po tte r s i t se l f engaged in the com mo n pra ctice o f on ly g ran t ing s ta f f
p r iv ilege s to ce rtain physi cian s, Po t ters, 800 F .2d a t 571 , bu t th i s d id no t p roh ib it i t f rom
con tes t ing the de fendan ts ’ a l leged ly i llega l ly an t i -compe t i t ive p rac t ices .
Thus , I canno t ag ree w i th the ma jo r ity tha t the p la in t i f fs lack s tand ing ba sed on the
Assoc ia ted Genera l Con trac tors “e f f ic ien t en fo rce r” fac to rs.
The Com pe t i tor /Consum er Base l ine and the L ike l ihood o f Success
I a dd o nl y o n e f ur th er po in t c on ce rn in g an ti tr us t s ta nd in g . A r ev iew o f c a s e s and
commen ta r ie s indica tes that c ourts d o ind eed d ispute the circ um stance s und er w hich a party
tha t i s ne ithe r a compe t i to r no r a con sume r may demon s tra te an t i tru s t in ju ry o r sa ti s fy the
A sso c i a ted Genera l Con trac tors ana lys i s . Howeve r , I be l ieve the re i s ag reemen t tha t
comp e t i tors and co ns um er s c on sti tu te a ba se lin e s et o f p ar tie s th at g en er all y do mee t these
tes ts . See I ll in o is ex re l. R ya n v. B row n, 227 F .3d 1042 , 10 46 (7 th C ir . 200 0) (“[N]o rmally
only consum e r s o r competitors h ave s tandin g . . . .”); Ca rpe t G roup In t ’l v . O r ien ta l Rug
Imp s . A s s ’n , 227 F .3d 62 , 76 -77 (3d C i r. 2000 ) (“ [G ]ene ra lly on ly compe t i to r s and
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cons um ers w ill suffe r antitrus t injury . . . .”); Se rpa Co rp . v . McWane , Inc ., 199 F .3d 6 , 10
(1s t C i r . 1999 ) (“Compe t i to r s and consum ers in the ma rke t whe re trade i s a l leged ly re s tra ined
are presump tively the pr oper plain t i f fs to allege antitrust in jury.”); Fla. S eed v . Mo nsan to
Co . , 105 F .3d 1372 , 1374 (11 th C i r . 1997 ) ( s tat ing tha t “ [b ]a s ica lly, a p la in t if f mu s t show
tha t i t is a cu s tome r o r compe t i to r in the re levan t an ti t ru s t ma rke t” to show i t is an e f f icien t
enforc e r ) ; Be l l v . D ow Chem . Co . , 847 F .2d 1179 , 1183 (5 th C i r. 1988 ) (“Re s t ra in t in the
ma rke t a f fec ts consum e r s and compe t i to r s in the ma rke t ; a s such , they a re the pa r t ie s tha t
have stand ing to s ue.”); Gen . Indu s . Co rp . v . Ha r t z Moun ta in Co rp ., 810 F .2d 795 , 809 ( 8th
C ir . 1987 ) (“ [S ]tand ing to sue unde r the She rman Ac t i s lim i ted to a con sume r o r compe t i to r
tha t prox ima te ly suffers an t i trus t in jury .”) (quo ta t ion marks om i t ted) ; Ba hn v . NM E H osp s.,
Inc ., 772 F .2d 1467 , 1470 (9 th C i r . 1985 ) ( s ta t ing tha t the e f f ic ien t en fo rce r ana ly s is requ ire s
“ tha t the in ju red pa r ty be a pa r t ic ipan t in the same ma rke t as the a lleged male facto rs”); see
a lso C . D ou gl as Fl oyd , An t i t rus t V ic tim s W i thou t An t i tru s t Remed ie s: The Na r row ing o f
S tand ing in P r iva te An t i tru s t Ac tion s, 82 M inn . L . Rev . 1 , 2 (1997 ) (ob s e rv ing tha t lowe r
fede ra l cou r t s have d i s ti l led Sup reme Cou r t ho ld ing s to the p r inc ip le tha t an t i tru s t stand ing
“sho uld be l im ited , e i ther ab so lu te ly o r p re sump tive ly, to con sume r s o r compe ti to rs adverse ly
a f fec ted by the de fendan t ’s an t icompe t i tive condu c t ” ). In my v iew , to sugge s t , a s the
majo rity does , tha t a compe t i to r does not have s tand ing if 1) the com petitor se eks to ea rn a
h ighe r wage by e n di ng s om e b ut no t a ll ex c lu s io n s f rom a ma rke t , o r 2 ) some o the r c las s o f
compe t i to r s o r con sume r s appa ren tly ha s a g rea te r se l f -in te re s t in remedy ing the v io la t ion ,
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depa r ts f rom the ma ins t ream o f an t i t rus t s tand ing cases .
And , o f cou r se , he re , we a re no t even dec id ing th e s ta nd in g is su e c on clu siv ely. W e
need on ly dec ide whe the r the p lain t if f s have a like l ihood o f demon s t ra ting an t i tru s t stand ing
in ano the r d is t r ic t , such tha t the p lain t if f s have no t “p la in ly f a il [ ed ]” to demon s tra te a
me r i to riou s c la im . Ad e l e k e v . Un i ted S ta tes , 355 F .3d 14 4, 152 (2d C ir. 2004 ); see a lso
Ph i l lip s v . Se ite r, 173 F .3d 609 , 611 (7 th C ir . 1999 ) (stating that tran sfer is in appr opriate
when “ the case is a su re loser” af ter transfer , becau se tran s fe rr ing wou ld s imp ly “wa s te the
t im e o f ano the r cou r t” ) . Fo r the reasons d e s c r ib ed above , I be l ieve tha t the p la in t if fs ’
chances o f success a re s ign i f ican t ly be t te r than th is .
C on se qu en tly, a l though I co ncu r in th e jur isdic tion and ven ue a nalyse s, I respe ctfully
d i s sen t f rom the ma jo ri ty op in ion to the ex ten t i t re fu se s to t ran s fe r th i s ma t te r to ano the r
district.
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