September 29, 2020

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September 29, 2020

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September 28, 2020

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A Tie Too Far: Antitrust Class Action Alleging Physician Association Tied Board Certification to Association Membership Survives Motion to Dismiss

A New Jersey district court recently denied a motion to dismiss in an antitrust class action alleging that a physician association illegally tied board certification to association membership in violation of Section 1 of the Sherman Act. Talone, et. al. v. The American Osteopathic Association, Case No. 1:16-cv-04644 (D. N.J. Jun. 12, 2017). The defendant association moved to dismiss, arguing that plaintiffs, a group of affected doctors, had failed to allege sufficient facts to demonstrate foreclosure of competition or antitrust injury.

The suit was filed in August 2016 by a group of osteopathic doctors against the primary certifying body for osteopathic physicians in the United States. To practice medicine and obtain a medical license in the United States, an osteopathic physician must complete an accredited residency training program after obtaining a Doctor of Osteopathic Medicine degree. The American Osteopathic Association (“AOA”) is the only accrediting agency for osteopathic graduate medical education. A further component of practicing medicine is board certification to signify a particular specialty. The AOA offers board certification for osteopathic medicine. The American Board of Medical Specialties (“ABMS”) also offers board certification, but osteopathic physicians who complete their residencies at AOA accredited programs—the only accredited osteopathic programs—are not eligible for ABMS board certification. The AOA board certification typically cost in excess of $1000 for the examination and administrative fees, plus annual board certification maintenance.

Plaintiffs’ case targeted the fact that starting in 2012, in addition to the annual board certification maintenance fee, the AOA has required all AOA board certified physicians to purchase and maintain annual membership in the AOA—or risk cancellation of their certification.

Plaintiffs’ antitrust tying claim is that the AOA has exploited its control over board certification for the practice of osteopathic medicine to force osteopathic physicians to become members of the AOA. They allege that they are forced to purchase AOA membership even though it serves no purpose with respect to, and has no actual connection with, AOA board certification or their medical practice. Plaintiffs further allege that the AOA’s requirement has reduced the number of osteopathic physicians willing to purchase membership in other physician associations and has thus foreclosed competition in the market for membership in professional physician associations. As a result of the reduced competition, Plaintiffs also claim that the AOA has been able to increase the price of its annual membership dues.

The AOA argued that plaintiffs failed to plead an antitrust injury because plaintiffs are not competitors of the AOA who have lost members due to the alleged tying. The AOA also asserted that plaintiffs’ claim that they were forced to purchase AOA membership does not show that the AOA has market power or that the AOA has foreclosed other physician associations from competition.

The court found that plaintiffs sufficiently stated claims to overcome a motion to dismiss for a per se and “rule of reason” tying antitrust violation. Citing the approximately 32,000 AOA board certified osteopathic physicians who have no choice but to purchase AOA membership in order to maintain their board certification, the court found that the allegations, when taken as true, show that the AOA ties two distinct products—board certification and AOA membership, that it has market power in the tying product market—board certification, and that it affects a substantial amount of interstate commerce. The allegations, when accepted as true, also show that the AOA’s actions substantially lessen competition and prevent other physician associations from competing for members.

The class action also includes claims under New Jersey’s Consumer Fraud Act related to AOA’s alleged promise pre-2000 that its certification would never expire. The court also denied AOA’s motion to dismiss those claims as well as AOA’s motion to transfer venue.

©1994-2020 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.National Law Review, Volume VII, Number 171


About this Author

Bruce Sokler, Mintz Levin Law Firm, Washington DC, Health Care, Antitrust and Litigation Attorney

Bruce is Chair of the Antitrust Section and in his over 30 years in private practice, he has developed extensive experience in both antitrust and communications regulation, including associated First Amendment and copyright law matters

In the antitrust area, Bruce’s practice includes antitrust counseling and representation in connection with federal and state governmental matters, as well as private antitrust litigation. He counsels and has represented Fortune 100 companies, not-for-profits, start-up entities, and domestic and international joint ventures. Bruce has been involved in...

Robert G. Kidwell Member Mintz DC Antitrust Health Care Enforcement & Investigations Communications Complex Commercial Litigation

Rob’s Washington, DC-based competition and trade regulation practice involves counseling on the regulatory implications of business strategies, regulatory matters, policymaking, and litigation. He defends clients in complex litigation and in merger and regulatory reviews by the US Department of Justice, the Federal Trade Commission, the Committee on Foreign Investment in the US, and the Federal Communications Commission. Rob’s clients include media and telecommunications companies, health systems and providers, national retailers, trade associations, and life sciences and technology companies.

Rob counsels a broad range of clients on business and investment strategy, M&A, litigation, and regulatory matters. He specializes in clearly explaining strategic risks and their relative values in order to help senior executives make informed decisions. Rob provides advice to clients from across the country and around the world, in high-profile matters including:

  • Strategic business planning and risk management 

  • Antitrust issues in mergers and acquisitions / second requests

  • Complex litigation (class action and otherwise)

  • Regulatory issues arising from foreign investments in U.S. businesses

  • Federal and state regulatory investigations

  • Policy advocacy and notice-and-comment rulemaking 

  • Appellate review of agency action

  • Trade association counseling

  • Privacy and data security

  • Unfair/deceptive conduct and false advertising

Rob represents clients in numerous markets, including:

  • Media content and distribution
  • Wireless communications
  • Health care providers and services
  • Life sciences
  • Technology
  • Retail & Consumer Products
  • Trade associations and non-profits

He has written and spoken widely on litigation risk management and cost containment, developments in the law, and on issues faced by businesses when they interact with federal and state enforcers and administrative agencies.

Rob is an active supporter of the firm’s pro bono program, providing representation to numerous indigent clients before the Social Security Administration and in local family and domestic relations courts. He has provided corporate and business planning advice to the National Network to End Domestic Violence and other non-profit clients. He is also an active supporter of the firm’s mentoring and sponsorship program.

Prior to his career in the law, Rob was an on-air radio personality and station production director in Lexington, KY.

Farrah Short, Mintz Levin Law Firm, Washington DC, Health Care, Corporate Law Attorney
Special Counsel

Farrah advises on all aspects of antitrust and competition law, including merger review, competitor collaborations, government investigations, private class action litigation, and general antitrust compliance.

Farrah specializes in counseling clients through the Hart-Scott-Rodino (HSR) merger review process at the U.S. Federal Trade Commission and the U.S. Department of Justice, including responding to Second Requests and providing substantive antitrust risk analysis for strategic acquisitions. She has obtained antitrust clearance for major,...