Jung v. Association of American Medical CollegesJung v. Association of American Medical Colleges
OPINION
Plaintiffs in this putative class action are medical school graduates currently or formerly enrolled in resident physician “residency” programs. The defendants can be categorized into two groups: the organizational defendants (organizations and associations that participate in the administration of graduate medical education in the United States) and the institutional defendants (universities, medical schools, foundations, hospitals, health systems and medical centers that sponsor medical residency programs). The defendants have filed three types of motions to dismiss: (1) motions to dismiss for lack of personal jurisdiction; (2) motions to dismiss for lack of subject matter jurisdiction and to compel arbitration; and (3) motions to dismiss for failure to state a claim upon which relief can be granted.
I. BACKGROUND
Plaintiffs filed suit charging that the defendants have violated Section 1 of the Sherman Act, 15 U.S.C. § 1. Plaintiffs allege that the defendants have contracted, combined and conspired among themselves to “displace competition in the recruitment, hiring, employment and compensation of resident physicians, and to impose a scheme of restraints which have the purpose and effect of fixing, artificially depressing, standardizing and stabilizing resident physician compensation and other terms of employment.” Complaint (“Compl.”) ¶ 2. Plaintiffs assert that there are three intertwining prongs to the antitrust conspiracy.
The first prong of the alleged conspiracy concerns the annual assignment of fourth-year medical students to the institutional defendants’ residency programs by the National Resident Matching Program (“NRMP”). The NRMP, an Illinois not-for-profit corporation, is managed and operated by defendant American Association of Medical Colleges (“AAMC”) from AAMC’s principal office in Washington, D.C. See Compl. ¶ 15. The AAMC also is an Illinois not-for-profit corporation, whose membership includes all 125 accredited medical schools, including those medical schools named in the complaint, and approximately 375 major teaching hospitals and health systems, some of which also are named in the complaint. These hospitals and health systems are member hospitals of a subsection of the AAMC, the Council of Teaching Hospitals and Health Systems (“COTH”) Section. See id. ¶ 17.
Plaintiffs allege that in order to effectuate the assignment, or the “Match,” as it is commonly called, prospective medical residents enter into contracts with and submit to the NRMP a ranked list of desired medical resident positions with various institutions (“Student Match Contract”). The institutions themselves also enter into contracts with the NRMP and submit ranked lists of the medical students whom they are interested in hiring (“Institutional Match Contract”). On a date certain, the NRMP through an algorithm “matches” the students’ lists against the institutions’ rankings, resulting in the assignment of each prospective medical resident to one residency program.
See
Compl. ¶¶ 15, 83-86. Plaintiffs allege that this system eliminates a free and competitive market and substitutes a centralized, anticompetitive allocation system that assigns prospective resident physicians to a single, specific and
Several specific features of this assignment system allegedly serve to impose anticompetitive restraints on medical residency hiring. Plaintiffs allege that a medical student is required to enter into the Match if he or she wishes to gain employment in a residency program accredited by the Accreditation Council for Graduate Medical Education (“ACGME”). See Compl. ¶ 71. An individual’s participation in an ACGME-accredited residency program in turn is allegedly a prerequisite for specialty certification upon completion of the residency by a member board of defendant American Board of Medical Specialties (“ABMS”), an Illinois not-for-profit corporation consisting of 24 recognized medical specialty’ certification boards. See id. ¶¶ 20, 69. Plaintiffs allege that eventual, specialty certification by an ABMS board is considered critical to prospective residents inasmuch as they desire to- be “certified” to practice within a specialty following the completion of their residencies. The practical effect of this structure, plaintiffs charge, is that the vast majority of medical students are compelled to participate in the Match, which is a substitute for all aspects of competitive individual negotiations and requires applicants to commit contractually to any assigned position as a condition of enrolling in the Match Program. See id. ¶¶ 69, 86. Furthermore, certain implementing policing mechanisms of the Match allegedly compel compliance 'with the foregoing restraints. These alleged mechanisms include the requirement that program participants immediately report suspected policy violations to the NRMP and advise the relevant organizational authorities of institution or resident physician violations. See id. ¶ 86(c).
In the second prong of the conspiracy, plaintiffs assert that certain aspects of the aforementioned ACGME accreditation standards, with which the institutional defendants allegedly voluntarily comply, function to further restrict residency employment. Specifically, plaintiffs allege that the ACGME (1) has the authority to regulate the number of employment positions in a residency program; (2) imposes substantial obstacles to the ability of a resident to transfer employment from one employer to another during the period of a residency, thereby effectively making NRMP assignments permanent for the duration of a residency; (3) encourages and/or requires participation in the Match by an institution as a condition of accreditation; and (4) directly reviews compensation and other terms of employment with the purposes of fixing and depressing them. See Compl. ¶ 88.
The third prong of the conspiracy concerns the exchange by defendants of information on resident compensation and other terms of employment through surveys and databases that plaintiffs allege has the purpose and effect of standardizing and stabilizing compensation and other terms of employment.
See
Compl. ¶¶ 73-82. This exchange allegedly occurs in two ways. First, the AAMC annually surveys members of its COTH Section seeking compensation levels for the employment year, aggregates the results into various categories and distributes its findings in an annual report (the “COTH Survey” or “Survey”).
See id.
¶¶ 74-79. Second, hospitals and health systems access similar information through an electronic database known as the Fellowship and Residency Electronic Interactive Database (“FREIDA”), which is maintained by defendant American Medical Association (“AMA”).
Plaintiffs charge that the execution of the Match program, the enforcement of the ACGME-accreditation standards, and the coordinated collection and distribution of residency program compensation information together produce a significant depression of residents’ salaries and working conditions by removing residents’ ability to achieve enhanced salaries and working conditions through competition. See Compl. ¶¶ 92-96. Plaintiffs allege that defendants have violated Section 1 of the Sherman Act by contracting, combining and conspiring to unreasonably restrain trade and commerce. Plaintiffs filed this antitrust action as a proposed class action and have moved to certify both plaintiff and defendant classes. See Motion for Class Certification, filed November 3, 2003.
II. DEFENDANTS’ RULE 12(b)(2) MOTIONS TO DISMISS FOR LACK OF PERSONAL JURISDICTION
A. Rule 12(b)(2) Motions to Dismiss
Sixteen institutional defendants and two organizational defendants, the ABMS and the Council of Medical Specialty Societies (“CMSS”), filed motions to dismiss for lack of personal jurisdiction under Rule 12(b)(2) of the Federal Rules of Civil Procedure. 1 Plaintiffs argue that the Court has jurisdiction over these non-resident defendants on three separate bases: (1) jurisdiction under the District of Columbia long-arm statute; (2) jurisdiction under Section 12 of the Clayton Act, 15 U.S.C. § 22; and (3) jurisdiction pursuant to the long-arm statute under the “conspiracy jurisdiction” doctrine.
It is undisputed that plaintiffs bear the burden of establishing personal jurisdiction over each individual defendant and that in order to meet their burden, plaintiffs cannot rely on conclusory allegations.
See GTE New Media Services Inc. v. Ameritech Corp.,
In this instance, plaintiffs bear a special, higher burden in order to demonstrate jurisdiction because the parties have en
B. Section lS-I23(a): The District of Columbia Long-Arm Statute
Plaintiffs assert that the Court has personal jurisdiction over the moving defendants under three separate subsections of the District of Columbia long-arm statute, Sections 13-423(a)(l), (3) and (4). While the long-arm statute is interpreted broadly and factual disputes are resolved in favor of plaintiffs, plaintiffs must allege some specific facts evidencing purposeful activity by the defendants in the District of Columbia by which they invoked the benefits and protections of the District’s laws.
See Edmond v. United States Postal Service General Counsel,
1. “Transacting Business” under Section 13^423(a)(l)
Section 13-423(a)(l) of the long-arm statute provides that “a District of Columbia court may exercise personal jurisdiction over a person, who acts directly or by an agent, as to a claim for relief arising from the person’s — transacting any business in the District of Columbia.” D.C. Code § 13-423(a)(l). To establish personal jurisdiction under this subsection, plaintiffs must demonstrate that (1) the defendant transacted business in the District; (2) the claim arose from' the business transacted in the District; (3) the defendant had minimum contacts with the District; and (4) the Court’s exercise of personal jurisdiction would not offend “traditional notions of fair play and substantial justice.”
Dooley v. United Technologies,
The constitutional touchstone of the due process determination is “whether the defendant purposefully established minimum
a. The Institutional Defendants
Plaintiffs generally allege that “each of the named Defendants and members of the Defendant Class illegally contract, combine and conspire with persons and entities that have committed, and continue to commit, overt acts within the District of Columbia in furtherance of the contract, combination and conspiracy alleged in this Complaint.” Compl. ¶ 9. Plaintiffs then make the same generic claim with respect to each-moving institutional defendant, alleging that the “[institutional defendant] is a [non-District of Columbia] not-for-profit corporation with its principal place of business [outside the District of Columbia]. [The institutional defendant] sponsors medical residency programs, employing members of the Plaintiff Class. [The institutional defendant] has contracted, combined and conspired with the named Defendants to restrain competition as alleged in this Complaint. Certain conspiratorial acts in which this Defendant participated took place in Washington, D.C.”
Id.
¶¶ 25-28, 30-32, 34, 40-43, 45-47, 49. The Court concludes that these generalized eonelu-sory allegations alone are facially insufficient to meet plaintiffs’ jurisdictional burden.
See GTE New Media Services Inc. v. Ameritech Corp.,
In their opposition to defendants’ motions to dismiss, plaintiffs attempt to re-sculpt and refine these generalized allegations, asserting that the institutional defendants, “through the intensely interactive NRMP web-site, [enter] into contracts in the District of Columbia to secure employment of a significant and important portion of their work force, provide a steady stream of information to the NRMP in order to effectuate the Match, and obtain Match Results,” thereby transacting business in the District of Columbia. Plaintiffs’ Corrected Memorandum of Points and Authorities in Support of Its Omnibus Opposition to Defendants’ Motions to Dismiss Pursuant to Fed.R.Civ.P. 12(b)(2) (“Pis.’ (b)(2) Opp.”) at 36. It is undisputed that Barnes Jewish-Hospital, Baylor College of Medicine, Beth Israel Deaconess Medical Center, Inc., Boston Medical Center Corp., Cedars-Sinai Medical Center, The Cleveland Clinic Foundation, Emory University, Rhode Island Hospital, Rush-Presbyterian-St. Luke’s Medical Center, St. Louis University,
. Six of these institutional defendants admit that they have “sporadic” contacts with the NRMP in connection with the Match in addition to the annual submission of the institution’s Match list.
3
The remaining institutional defendants that participate in the Match assert that they interact with the NRMP only once a year when they transmit their preference lists to the organization. These assertions are contradicted, however, by plaintiffs’ documentation of certain contacts with the NRMP in connection with the Match during 1999-2001. These additional contacts include the submission of quota change forms, updates of institutional information, information and association data forms and/or “reversion” of unfilled position forms. Plaintiffs concede that no one institution submitted more than ten of these communications to the NRMP in any given year.
See
Pis.’ (b)(2) Opp., Ex. 11, Defendant NRMP’s Objections and Answers to Plaintiff Paul Jung’s First Set of Interrogatories on Jurisdiction; Schedule II.B., “Communications from Institutions/Programs to the NRMP — 2001 Residency Match;” Schedule III.B, “Communications from Institutions/Programs to" the NRMP — 2000 Residency Match;” and Schedule IV.B, “Communications from Institutions/Programs to the NRMP — 1999 Residency Match.” It is these additional contacts on which plaintiffs base their assertion that in providing a steady stream of information into the District of Columbia in order to effectuate the Match, the moving institutional defendants “transact
The Court concludes that the fact that the moving institutional defendants entered into the Institutional Match Contract and communicated information concerning their individual programs to the NRMP up to ten times a year in order to effectuate an accurate Match does not by itself form a basis for personal jurisdiction.
See Far West Capital, Inc. v. Towne,
Upon consideration of the contacts alleged in plaintiffs’ complaint, the Court concludes that the contacts simply are not of the quality that would support a conclusion that the institutional defendants have “purposefully availed [themselves] of the privilege of conducting business in the forum state,” such that they “should reasonably anticipate being haled into court” here under Section 13-423(a)(1).
Burger King Corp. v. Rudzewicz,
Third, no terms in the Institutional Match Contract itself indicate any special connection with the District of Columbia. The only indication at all that the Match occurred in the District of Columbia is the listing of the NRMP’s Washington, D.C. address on the face of the contract. Fourth, the contract includes a choice-of-law provision designating Illinois law. While this by no means conclusively demonstrates that defendants are beyond the Court’s jurisdictional reach, it does inform the assessment of whether the defendants could have reasonably foreseen being involved in litigation in the District of Columbia concerning the execution of the Institutional Match Contract.
See Burger King Corp. v. Rudzewicz,
Finally, there is nothing in the parties’ actual course of conduct that indicates that the moving institutional defendants should have reasonably foreseen being subject to the jurisdiction of this Court. There is no debate that the Match is very important to the institutional defendants’ business of providing health care; it is the mechanism by which the institutional defendants hire resident doctors. The NRMP is not involved, however, in the hospitals’ substan-tivé process of evaluating potential residents prior to submission of the preference lists. Nor does the NRMP continue to play a role in the hospitals’ business once the Match is completed or in any other fashion exert control over the rest of the hospitals’ affairs. The mere fact that the NRMP, with its principal place of business in the District of Columbia, entered into a contract with others cannot “standing alone” provide jurisdiction over those other contracting parties.
See Health Communications, Inc. v. Mariner Corp.,
Plaintiffs rely heavily on
Schwartz v. CDI Japan, Ltd.
in support of their jurisdictional argument. Plaintiffs are correct that the Court in
Schwartz
.stated that “[t]he ‘transacting any business’ provision of the District’s long-arm statute embraces the contractual activities of a non-resident defendant that cause repercussions in the District” and that “[i]t is ‘therefore sufficient’ ... that the suit [be] based on a contract that [has] [a] substantial connection with the District.”
Schwartz v. CDI Japan, Ltd.,
The Court therefore concludes that the moving institutional defendants’ entry into the Institutional Match Contract, and the accompanying electronic and/or mail correspondence those defendants sent into the District in support of the contract, do not and cannot provide a basis for personal jurisdiction under Section 13-423(a)(l) of the long-arm statute.
b. The Organizational Defendants
Aside from the conclusory, generalized allegations in the complaint concerning “defendants,” which the Court already has found insufficient to meet the pleading standards for personal jurisdiction over the institutional defendants in Section 11(B)(1)(a), supra, plaintiffs provide scant additional support for their jurisdictional claim that the ABMS or the CMSS transacts business in the District of Columbia for the purposes of the long-arm statute. In their complaint, plaintiffs introduce the ABMS as “an Illinois not-for-profit corporation whose membership consists of 24 recognized medical specialty certification boards in the United States” that “develop and apply professional and education standards for the evaluation and certification of physician specialists.” Compl. ¶ 20. Plaintiffs also allege that the ABMS is one of five “governing sponsors” of the NRMP. Id. With respect to the CMSS, plaintiffs allege that it is “a not-for-profit corporation whose membership consists of 17 physician societies in specialties having a member board participating in ABMS” and that it also is one of five “governing sponsors” of the NRMP. Id. ¶ 21.
Plaintiffs do not define “governing sponsor” in their complaint. In their opposition to defendants’ motions to dismiss, plaintiffs cite to statements by the Executive Director of the NRMP, Robert L. Beran, Ph.D., that the ABMS and the CMSS are two of five “sponsors” of the NRMP. Pis.’ (b)(2) Opp. at 30 (citing Defendant National Resident Matching Program’s Motion to Dismiss and Compel Arbitration, Ex. A, Affidavit of Robert L. Beran, Ph.D. (“Ber-an Compel Aff.”) ¶ 1). Plaintiffs assert that the ABMS thus itself “admits” that it is a sponsor of the NRMP, that its representative serves as President of the NRMP and that its representative telephones the NRMP several times a month. Plaintiffs also assert that the CMSS admits to its “involvement” with the NRMP and has “contacts with the District of Columbia.” Pis.’ (b)(2) Opp. at 30. Plaintiffs charge that the relationships between these two organizational defendants and the NRMP are “ongoing and committed [, and] as sponsors, [the ABMS and the CMSS] are entitled to and do elect two members to the twelve member NRMP Board of Directors.” Id. at 36. From this predicate, plaintiffs argue that “the two moving Organizational Defendants play an integral role in governing the NRMP, [and in] formulating its policies, including the anti-competitive policies of the Match,” and that they therefore are subject to suit in the District of Columbia under Section 13^23(a)(l). Id.
The ABMS and the CMSS offer support for their motions to dismiss in the form of sworn declarations from their Executive Vice President and President, respectively. Each states that his organization does not
The Court concludes that plaintiffs have not alleged sufficient facts to demonstrate that either the ABMS or the CMSS transacts business in the District of Columbia for purposes of the long-arm statute. Plaintiffs’ only true jurisdictional claim rests on the fact that these organizational defendants are “governing sponsors” of the NRMP and nominate two directors to the NRMP board. Because plaintiffs do not define “governing sponsor,” the Court is left to consider what that term may mean. In light of plaintiffs’ assertion that as governing sponsors the organizational defendants have the power to direct policy and determine procedures of the NRMP, perhaps the most analogous relationship is that of a parent corporation with control over the activities of its subsidiary. See, e.g., El-Fadl v. Central Bank of Jordan, 75 F.3d 668, 676 (D.C.Cir.1996) (“[I]f parent and subsidiary ‘are not really separate entities,’ ... or one acts as an agent of the other, ... the local subsidiary’s contacts can be imputed to the foreign parent.”). If this is the most analogous relationship, however, it does not serve plaintiffs well. Plaintiffs fail to allege a sufficient level of control by the ABMS and/or the CMSS over the NRMP, and the uncontradicted declarations submitted by Dr. Miller and Dr. Spivey state unequivocally that then-organizations do not exercise any control over the activities of the NRMP. The Court therefore has no basis to attribute the activity of the NRMP in the District of Columbia to either organization. 6
Section 13-423(a)(3) of the long-arm statute confers jurisdiction over a person who causes “tortious injury in the District of Columbia by an act or omission in the District of Columbia.” D.C. Code § 13-423(a)(3). To invoke this subsection, plaintiffs must show that the moving defendants either directly or through an agent caused tortious injury to plaintiffs in the District of Columbia by an act or omission in the District of Columbia.
See Richard v. Bell Atlantic Corp.,
Section 13 — 423(a)(4) of the long-arm statute provides:
A District of Columbia court may exercise personal jurisdiction over a person, who acts directly or by an agent, as to a claim for relief arising from the person’s ... causing tortious injury in the District of Columbia by an act or omission outside the District of Columbia if he regularly does or solicits business, engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered, in the District of Columbia.
D.C. Code § 13-423(a)(4). In order to establish personal jurisdiction under this subsection after jurisdictional discovery has taken place plaintiffs must demonstrate by a preponderance of the evidence that (1) plaintiffs suffered a tortious injury in the District of Columbia; (2) the injury was caused by a defendant’s act or omission outside of the District; and (3) the defendant had one of the three enumerated contacts- with the District of Columbia.
See Crane v. Carr,
Under both “tortious injury” subsections of the long-arm statute plaintiffs must allege that they have suffered a tor-tious injury in the District of Columbia. In their complaint, plaintiffs allege no injury to the named plaintiffs within the District of Columbia. In their opposition to defendants’ motion to dismiss, plaintiffs attempt to describe an injury, citing to allegations in the complaint that the defendants’ actions restrained competition in the recruitment, hiring, employment and compensation of resident physicians nationwide. Because the District of Columbia is part of the alleged national relevant market in which competition was restrained, plaintiffs argue that they lost “the right to
At oral argument, plaintiffs argued belatedly that the injury was the Match itself — that is, that the injury is the actual binding of the fourth year medical student to a specific residency program — and thus the tortious injury occurred in the District of Columbia where the Match is executed. See Transcript of February 23, 2003 Motions Hearing, Afternoon Session (“Tr.”) at 41 (“As soon as that rank order list is submitted, and the algorithm employed, and that match is made, that is the injury.”). Without reaching the merits of this “injury” claim, the Court rejects this line of reasoning in light of the plaintiffs’ own assertion in their complaint and briefs that plaintiffs are bound and thus, by extension, injured upon entry into the Student Match Contract rather than upon the execution of the contract. See Compl. ¶ 86(b); Pis.’ (b)(2) Opp. at 6 n. 4 (“[Mjedical school seniors who sign up for the Match agree that they will accept the position to which they are matched if a match is made, and will enroll in the residency program to which they are matched by the NRMP. ‘The listing of [¶]... ] a program by an applicant on the individual’s Rank Order List establishes a commitment to [¶]... ] accept an appointment when a match results.’ ”) (quoting NRMP Handbook for Institutions and Program Directors at 4-5). There are no allegations that plaintiffs were in the District of Columbia when they entered into the Student Match Contract. The Court concludes that plaintiffs’ allegations are insufficient to demonstrate any tortious injury in the District of Columbia, and therefore that jurisdiction cannot be predicated on Section 13-423(a)(3) or (4) of the long-arm statute.
C. Personal Jurisdiction under Section 12 of the Clayton Act: “Transacting Business”
Plaintiffs assert that the Court has jurisdiction over all the moving defendants under the jurisdictional grant of Section 12 of the Clayton Act.
See
Compl. ¶ 7. Section 12 states that “[a]ny suit, action,, or proceeding under the antitrust laws against a corporation may be brought not only in the judicial district whereof it is an inhabitant,
In determining whether jurisdiction over defendants exists under the Clayton Act, the Court must assess “whether the corporation is doing business in the district of any substantial character, even if its business is entirely interstate in character and is transacted by agents who do not reside in the District.”
Caribe Trailer Systems, Inc. v. Puerto Rico Maritime Shipping Authority,
1. The Institutional Defendants
Plaintiffs do not allege any tangible manifestations of doing business in the District of Columbia on the part of the moving institutional defendants. Instead, they invite the Court to consider the institutional defendants’ participation in the Institutional Match Contract, the COTH Survey and activities related to the institutions’ membership in the AAMC. See Pis.’ (b)(2) Opp. at 44 (“[Ejach of the moving Institutional Defendants enter into multiple agreements with the D.C.-based NRMP and AAMC to perform highly prized services which require regular and ongoing contacts with each of the D.C.based entities, and the Institutional Defendants pay fees into the District of Columbia for those services.”).
It is undisputed that Barnes-Jewish Hospital, Beth Israel Deaconess Medical Center, Inc., Boston Medical Center Corp., Cedars-Sinai Medical Center, The Cleveland Clinic Foundation, Emory University, Rhode Island Hospital, Rush-Presbyterian-St. Luke’s Medical Center, St. Louis University, Stanford Hospital & Clinics, Thomas Jefferson University Hospital, Inc., Administrators of the Tulane Educational Fund, University Hospitals of Cleveland, Inc. and Yale-New Haven Hospital, Inc. participated in the Match and in the annual COTH Survey by submitting the institutions’ resident stipend data to the AAMC, and by receiving the results of the Survey in return. 9
Third, Baylor College of Medicine acknowledges that it has had two additional contacts with the District: specifically that it contracted with a firm that provides services concerning relations with the federal government, and that certain Baylor residents each year attend a program conducted in the District of Columbia by the United States Department of Defense. •
See
Supplemental Memorandum in Support of Defendant Baylor College of Medicine’s Motion to Dismiss the Complaints Pursuant to Fed.R.Civ.P. 12(b)(2) at 3 n. 2. Finally, the Administrators of the Tulane Educational Fund admits that it has one assistant professor who “is pro
To the extent that the moving institutional defendants admit to their agents’ presence in the District of Columbia in order to lobby certain agencies of the federal government on the defendants’ behalf, such contacts with the District are excluded from the jurisdictional analysis under the “government contacts” exception. Under this exception, a person or company does not subject itself to the jurisdiction of the courts of the District of Columbia merely by filing an application with a government agency or by seeking redress of grievances from the Executive Branch or the Congress.
See Naartex Consulting Corp, v. Watt,
The Court also concludes that the institutional defendants’ membership in and contacts with the AAMC or the COTH Section in the District of Columbia should not be considered in the evaluation of whether any defendant transacted business of any “substantial character” in the District because- it is established that the “government contacts” exception extends “to non-resident contact with trade associations located with [sic] the District of Columbia.”
World Wide Minerals, Ltd. v. Republic of Kazakhstahn,
The Court thus is left to consider only plaintiffs’’ allegations with respect to the institutional defendants’ participation in the Match Program and the COTH Survey, and the
de minimis
contacts admitted by Baylor College of Medicine and the Administrators of the Tulane Educational Fund with respect to those institutions. The Court concludes that these contacts
2. The Organizational Defendants
Plaintiffs do not allege any additional contacts with the District of Columbia that would subject the moving organizational defendants to the Court’s jurisdiction in addition to those evaluated in the Court’s “transacting business” analysis under Section 13-423(a)(l) of the long-arm statute. For the reasons stated in Section 11(B)(1)(b), supra, the Court therefore concludes that plaintiffs have failed to demonstrate that the ABMS or. the CMSS has transacted “substantial business” within the District of Columbia.
D. “Conspiracy Jurisdiction” Under the Long-Arm, Statute
Plaintiffs assert that the Court has jurisdiction over all the moving defendants pursuant to the “conspiracy” theory of long-arm jurisdiction. Under this doctrine, acts undertaken within the forum by one co-conspirator in furtherance of an alleged conspiracy may subject a non-resident co-conspirator to personal jurisdiction under the long-arm statute.
See Second Amendment Foundation v. United States Conference of Mayors,
Plaintiffs claim that personal jurisdiction exists over each moving defendant pursuant to the conspiracy theory of jurisdiction stemming from Section 13-423(a)(1).
See
Pis.’ (b)(2) Opp. at 24-30.
12
“Mere speculation” that a conspiracy exists or that “the non-resident defendants are co-conspirators [is] insufficient to meet plaintiffs [] burden.”
Dooley v. United Technologies Corp.,
In addition, once jurisdictional discovery has taken place it still is necessary under a theory of conspiracy jurisdiction that plaintiffs demonstrate jurisdiction by a preponderance of the evidence.
See Second Amendment Foundation v. United States Conference of Mayors,
The Court concludes that if the activities alleged constitute a conspiracy to restrain trade, plaintiffs have demonstrated by a preponderance of the evidence that acts in furtherance of the conspiracy took place in the District of Columbia. Specifically, it is uncontested that defendant NRMP conducts the Match in the District of Columbia and that defendant AAMC facilitates the COTH Survey from the District. Plaintiffs also have submitted documentation demonstrating that the District-based institutional defendants MedStar-George-town Hospital Medical Center, George Washington University and MedStar Health, Inc. contracted in the District of Columbia with the NRMP to participate in the Match and employed resident physicians in the District of Columbia through the Match Program during the relevant period.
See
Pis.’ (b)(2) Opp., Ex. 2, NRMP Directory 1999 Match, Hospitals and Programs Participating in the Matching Program at 12-13. Thus, if there was a conspiracy plaintiffs have demonstrated that several of the conspirators committed overt acts in furtherance of the conspiracy in the District of Columbia.
See In re Vitamins Antitrust Litigation,
As the Court explains in Section IV(B),
infra,
plaintiffs adequately have alleged a conspiracy to depress resident compensation between,
inter alia,
those institutional defendants that participated in the Match and the NRMP. The Court therefore concludes that the fifteen moving institutional defendants who themselves acknowledge that they took part in the Match Program are subject to the jurisdiction of this Court under the conspiracy theory of jurisdiction. Those institutional defendants are Barnes Jewish-Hospital, Baylor College of Medicine, Beth Israel Deaconess Medical Center, Inc., Boston Medical Center Corp., Cedars-Sinai Medical Center, The Cleveland Clinic Foundation, Emory University, Rhode Island Hospital, Rush-Presbyterian-St. Luke’s Medical Center, St. Louis University, Stanford Hospital & Clinics, Thomas Jefferson University Hospital, Inc., Administrators of the Tulane Educational Fund, University Hospitals of Cleveland, Inc. and Yale-New Haven Hospital, Inc.
14
Because plaintiffs failed to
With respect to the ABMS and the CMSS, the organizational defendants that moved to dismiss for lack of personal jurisdiction, the Court concludes that because plaintiffs have failed to demonstrate that either organization participated in the conspiracy, see Section IV(B)(2), infra, the Court lacks personal jurisdiction over these organizational defendants under a conspiracy theory of jurisdiction and will grant their motions to dismiss for lack of personal jurisdiction.
III. DEFENDANT NRMP’S RULE 12(b)(1) MOTION TO DISMISS FOR ' LACK OF SUBJECT MATTER JURISDICTION AND MOTION TO COMPEL ARBITRATION
A. Background
The NRMP moves to dismiss plaintiffs’ claim against it for lack of subject matter jurisdiction under Rule 12(b)(1) of the Federal Rules of Civil Procedure, arguing that to the extent that plaintiffs’ claim relates to the NRMP and its governing sponsors, the claim is subject to compulsory arbitration. The NRMP therefore seeks an order “compelling plaintiffs to arbitrate the first element of their tripartite claim; namely, that defendants used the Matching Program to eliminate competition in the recruitment and employment of resident physicians.” Memorandum of Law in Support of Defendant National Resident Matching Program’s Motion to Dismiss and to Compel Arbitration (“NRMP Arbit. Mem.”) at 7 (internal quotation omitted). The NRMP relies on the arbitration provision of Student Match Contract. The provision states as follows:
All claims, disputes and other matters in question arising out of or relating to this Agreement or the breach thereof, shall be decided by binding arbitration in accordance with the Rules of the American Arbitration Association then in effect, unless the parties mutually agree otherwise. This agreement to arbitrate shall be specifically enforceable. The' NRMP Polices shall govern the demand for arbitration and other procedural matters. The arbitrators shall conduct all arbitration proceedings in the Offices of the American Arbitration Association in Chicago, Illinois. This Agreement shall be governed by the laws of the State of Illinois, but Illinois conflicts of laws provisions shall not be construed to apply the law of any other jurisdiction. ' The unenforceability of one or more of the terms of this Agreement shall not affect the validity of the remaining terms.
Id., citing Beran Compel Aff., Ex. A-l, 1998 Student Agreement of Plaintiff Denise Greene (emphasis added). 15
The NRMP further argues that the claim against the AMA also should be referred to binding arbitration despite the fact that this organization is not a signatory to the Student Match Contract, because plaintiffs’ claim against it is based on the organizations’ alleged status as governing sponsors of the NRMP. See NRMP Arbit. Mem. at 14-16. 16 Plaintiffs and certain institutional defendants oppose the motion.
B. Compulsory Arbitration Under the Federal Arbitration Act
The Federal Arbitration Act (“FAA”) provides that a “written provision in ... a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction ... shall be valid, irrevocable, and enforceable, save upon any grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2. The FAA applies to any transaction involving interstate commerce and creates a strong presumption in favor of the enforcement of agreements to arbitrate; any doubts regarding the scope of an agreement to arbitrate are to be resolved in favor of arbitration.
See Shearson/American Express, Inc. v. McMahon,
This strong public policy in favor of arbitration must be considered in the context of the equally important principle that “arbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed to submit.”
AT & T Technologies, Inc. v. Communications Workers of America,
In
Mitsubishi
the Supreme Court provided the standard by which motions to compel arbitration should be evaluated. The Court’s first task “is to determine whether the parties agreed to arbitrate [the] dispute,” keeping in the forefront the strong policy favoring arbitration.
Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc.,
Relying on the plain language of arbitration provision of the Student Match Contract signed by each plaintiff — all claims “arising out of or relating to this Agreement” shall be referred to binding arbitration — the NRMP argues that plaintiffs’ Section 1 conspiracy claim “arises out of’ or “relates to” the Student Match Contract and therefore must be referred to arbitration. The NRMP maintains that the Match itself is “squarely challenged by plaintiffs in this action,” that plaintiffs’ complaint specifically alleges that “defendants eliminated competition ‘by assigning prospective resident physician employees to resident positions through [the Match Program],’ ” and that the Match Program “is a mechanism that eliminates a free and competitive market and substitutes a centralized anticompetitive allocation system.” NRMP Arbit. Mem. at 10-11 (quoting Compl. ¶¶ 3(b), 15, 83-85). The NRMP also focuses on the complaint’s allegations that the Match Program “ ‘imposes anti-competitive restraints through several of its features,’ ” including,
inter alia,
“ ‘forcing applicants to commit contractually to any assigned position as a condition of enrolling in the matching program’ and ‘severely restricting attempts by employers and applicants to withdraw from the matching program.’ ” NRMP Arbit. Mem. at 11 (quoting Compl. ¶ 86(a)-(b)). The NRMP asserts that the former of
Plaintiffs respond that the arbitration agreement does not include antitrust claims expressly, that their Sherman Act claim does not concern the Student Match Contract, and that although this contract “may have evidentiary significance in proving defendants’ illegal conspiracy,” such significance does not mean that the dispute itself “relates to” or “arises from” the contract. Plaintiffs’ Consolidated Brief Opposing Defendants’ Motion to Dismiss and to Compel Arbitration (“Pis.’ Arbit. Opp.”) at 8.
Generally, courts have interpreted broadly agreements providing for the arbitration of disputes “arising out of or relating to” the underlying contract.
See Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc.,
Upon review of the complaint, the Court concludes that plaintiffs’ conspiracy claim does relate in part to the Student Match Contract. Although plaintiffs assert that the agreement merely serves as evidence of the conspiracy, the allegations of the complaint suggest much more. Plaintiffs expressly allege that forcing plaintiffs to execute the contract was itself an anticom-petitive act.
See
Compl. ¶ 86(b) (Match Program “imposes anticompetitive restraints through several of its features including ... forcing applicants to commit contractually to any assigned position as a condition of enrolling in the matching program”); ¶ 100(b) (“Defendants and members of the Defendant Class illegally restrain competition in a number of related ways, including ... assigning prospective resident physician employees to positions through the NRMP.”).
17
Where the execution of the contract is itself alleged to be an anticompetitive act, plaintiffs cannot argue that the claim does not arise from or relate to the agreement.
See Simula, Inc. v. Autoliv, Inc.,
The cases on which plaintiffs rely in support of their position that the Student Match Contract merely evidences the alleged conspiracy do not lead to a different conclusion. In those actions,- plaintiffs’ claims were separate from and tangential to the contracts containing the arbitration provisions.
See Telecom Italia, SpA v. Wholesale Telecom Corp.,
C. Countervailing Statutory or Policy Concerns
In light of the Court’s conclusion that plaintiffs’ claim relates to the Student Match Contract, the Court must determine whether a countervailing statute or policy renders the claim nonetheless non-arbitrable. While plaintiffs acknowledge that antitrust claims are arbitrable as a matter of law,
see Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc.,
Plaintiffs first assert that they were forced to enter the Student Match Contract and, by extension, the arbitration provision, by the “overwhelming economic power” defendants hold over “[f]ourth year medical students, like plaintiffs here, [who] have no practical choice but to sign the match application—with the ‘boilerplate’ arbitration clause on which NRMP relies which is presented to the medical students on a ‘take it or leave it’ basis.” Pis.’ Arbit. Opp. at 20-21. Plaintiffs argue that this imbalance in power between the NRMP and plaintiffs unlawfully denies them the right to vindicate their statutory rights under the Sherman Act. Plaintiffs rely on the Supreme Court’s cautionary note in
Mitsubishi
that “courts should remain attuned to well-supported claims that the agreement to arbitrate resulted from the sort of fraud or overwhelming economic power that would provide grounds ‘for the revocation of any contract.’”
Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc.,
2. The NRMP “Fee-Splitting” Policy
Plaintiffs next argue that NRMP Policy 11.0, which is incorporated by reference in the Student Match Contract, frustrates the objectives of the Sherman Act because it requires plaintiffs to share equally in the costs of arbitration. See Pis.’ Arbit. Opp. at 21. The Policy states that “[e]ach party shall share equally in the costs of arbitration.” See Beran Compel. Aff., Ex. A-4, NRMP Policies in Effect for 1996 and 1997 Matches at 4.
Plaintiffs’ “fee-splitting” claim does not survive scrutiny. While plaintiffs provide an affidavit detailing the possible costs of arbitration in this matter
(see
Pis.’ Arbit. Opp., Affidavit of Michael L. Shakman), they offer no support for their assertion that the individual plaintiffs are unable to meet the anticipated costs. As the Supreme Court held in
Green Tree Financial Corp.—Alabama v. Randolph,
Furthermore, the NRMP has stated that if any plaintiff “can show the fees are unreasonable given their respective finan
3. Unconseionability
Section 2 of the FAA provides that “a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction ... shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2. The Supreme Court has concluded that “the text of § 2 declares that staté law may be applied
‘if
that law arose to govern issues concerning the validity, revocability, and enforceability of contracts generally.’ Thus, generally applicable contract defenses, such as fraud, duress, or unconseionability, may be applied to invalidate arbitration agreements without contravening § 2.”
Doctor’s Associates, Inc. v. Casarotto,
Plaintiffs-assert that the arbitration provision in the Student Match Contract should not be enforced because it is unconscionable under Ulinqis law.
19
Specifically, they argue that a gross disparity in bargaining positions existed between the NRMP and the medical students, that plaintiffs had no meaningful choice when presented with the Student Match Contract, and that the terms of the arbitration provision, “especially the fee-splitting requirement,” are unreasonably favorable to defendants. Pis.’ Arbit. Opp. at 26. The Supreme Court of Illinois has held that “a contract is unconscionable when it is improvident, oppressive, or totally one-sided .... ”
The Streams Sports Club, Ltd. v. Richmond,
The Court concludes that the arbitration provision of the Student Match Contract is not unconscionable under Illinois law. Plaintiffs make broad assertions that the agreement is “unreasonably favorable” to defendants and that plaintiffs had no meaningful choice when presented with the agreement. Under Illinois law, however, “mere disparity of bargaining power is not sufficient grounds to vitiate contractual obligations.”
The Streams Sports Club, Ltd. v. Richmond,
4. Duress
Plaintiffs also argue that the arbitration agreement is unenforceable because it is a product of economic duress. Under Illinois law,
[djuress occurs where one is induced by a wrongful act or threat of another to make a contract under circumstances that deprive one of the exercise of one’s own free will. To establish duress, one must demonstrate that the threat has left the individual bereft of the quality of mind essential to the making of a contract. The acts or threats complained of must be wrongful; however, the term “wrongful” is not limited to acts that are criminal, tortious, or in violation of a contractual duty. They must extend to acts that are also wrongful in a moral sense.
Krilich v. American National Bank and Trust Co. of Chicago,
Plaintiffs do not argue that they were actually threatened or forced to enter the Student Match Contract but suggest that they lacked “free will” in that they either could sign the contract or “surrender their plan to become physicians and forfeit the time and money that they had invested in medical school.” Pis.’ Arbit. Opp. at 27. Once again, however, under Illinois law “where consent to an agreement is secured merely because of hard bargaining positions or financial pressures, duress does not exist.”
Hurd v. Wildman, Harrold, Allen and Dixon,
5. Avoidance of Arbitration Under Illinois Arbitration Law
Finally, plaintiffs assert that in analyzing the motion to compel, the Court should apply Illinois arbitration law pursuant to the general choice of law provision of the Student Match Contract, and that under Illinois law the Student Match Contract is not enforceable because the contract itself allegedly “results from defendants’ violation of the antitrust laws.” Pis.’ Arbit. Opp. at 24. Certain of the institutional defendants make a somewhat similar argument, asserting that under Illinois law, a court — and not an arbitrator— must decide whether the Student Match Contract violates the antitrust laws. See Inst. Defs.’ Arbit. Mem. at 1-2. Defendants respond that both arguments are foreclosed by the Supreme Court’s decision in Mastrobuono v. Shearson Lehman Hutton, Inc., in which the Court held that the parties’ intent to incorporate state laws or rules regarding the scope of arbitration must be clear, and that a broad choice of law clause is insufficient to meet that requirement. See NRMP’s Arbit. Reply at 20-21. Defendants assert that Illinois arbitration law therefore is not applicable here because the parties’ intent to apply the state’s arbitration law is not clearly demonstrated.
Plaintiffs and the institutional defendants primarily rely on
Armco Steel Co. v. CSX Corp.,
Four years after Judge Hogan decided
Armco,
however, the Supreme Court decided
Mastrobuono.
The dispute in
Mas-trobuono
arose out of a standard form contract that expressly provided in a general choice of law clause that the contract was to be governed by the laws of the State of New York. The matter went to arbitration, and the arbitrators awarded punitive damages. Respondent moved for
. The Supreme . Court first determined that nothing in the contract indicated- that the parties affirmatively expressed their intent to preclude the arbitrator from awarding punitive damages notwithstanding the general choice of law provision.
See Mastrobuono v. Shearson Lehman Hutton, Inc.,
Numerous courts of appeals have concluded that
Mastrobuono
requires that the intent of the .contracting parties to apply state arbitration rules or law to arbitration proceedings must be explicitly stated in the contract and that under
Mastrobuono,
a general choice of law provision does not evidence such intent.
See Sovak v. Chugai Pharmaceutical Co.,
In light of
Mastrobuono
and its progeny, the Court concludes that plaintiffs and the institutional defendants cannot rely on Judge Hogan’s decision in
Armco
in support of their assertion that the general choice of law provision in the Student Match Contract suffices to demonstrate the parties’ intent to apply Illinois law to define the scope of the arbitrator’s authority.
Mastrobuono
requires more.
See Mastrobuono v. Shearson Lehman Hutton, Inc.,
This Circuit’s decision in
Ekstrom v. Value Health, Inc.,
The Court’s conclusion is significant because federal law differs in substantial ways from Illinois law (as it is described by the non-moving parties) to the detriment of the non-moving parties’ efforts to avoid arbitration. Plaintiffs assert that under Illinois law a party is relieved from an arbitration agreement if the underlying contract is alleged to be void for
D. Compelling Countervailing Interest in the Proper Adjudication of Sherman Act Claims
While the Court has concluded that the arbitration clause in the Student Match Contract encompasses the claim the NRMP seeks to have arbitrated, and that none of the countervailing statutory or policy considerations suggested by plaintiffs and certain institutional defendants relieve them from the responsibility to arbitrate, the Court nonetheless concludes that compelling arbitration of any part of the conspiracy claim would undermine the purposes of the Sherman Act by improperly compartmentalizing plaintiffs’ single conspiracy claim. The Court also concludes that the request for arbitration by the AMA, a non-signatory to the Student Match Contract, would result in further improvident compartmentalizing of the claim.
In its motion, the NRMP describes plaintiffs’ conspiracy claim, designating three main elements: the use of the Match Program to eliminate competition in the recruitment and employment of medical residents, the exchange of competitively sensitive information regarding resident physician compensation and benefits, and the promulgation of and compliance with purportedly anticompetitive accreditation standards.
See
NRMP’s Arbit. Mem. at 3-4. The NRMP asserts that “[together, these three elements of the supposed conspiracy are said to have ‘the purpose and
The Supreme Court has held that where certain claims within a multi-count complaint are arbitrable, the liberal federal policy favoring arbitration directs referral of those claims to arbitration “even where the result would be the possibly inefficient maintenance of separate proceedings in different forums.”
Dean Witter Reynolds Inc. v. Byrd,
It does not follow, however, that one element of an overarching conspiracy claim, an element in which multiple defendants allegedly are involved, should be referred to arbitration. Conspiracy is a far different creature from breach of contract, and conspiracy allegations in antitrust cases cannot be compartmentalized and considered in isolation “as if they were separate lawsuits, thereby overlooking the conspiracy claim itself.”
In re Fine Paper Antitrust Litigation,
plaintiffs should be given the full benefit of their proof without tightly compartmentalizing the various factual components and wiping the slate clean after scrutiny of each. The character and effect of a conspiracy are not to be judged by dismembering it and viewing its separate parts, but only by looking at it as a whole .... [I]n a case like the one before us, the duty of the jury was to look at the whole picture and not merely at the individual figures in it.
Id.
at 699,
Chief Judge Hogan’s decision in
In re Vitamins Antitrust Litigation,
Misc. No. 99-197 (TFH),
The Court also concludes that the request for arbitration made by the AMA, a non-signatory to the Student Match Contract, must be denied as well. The referral of the claim would further improperly compartmentalize plaintiffs’ single conspiracy elairh. Moreover, inasmuch as this request is predicated on a theory of derivative liability resulting from the AMA’s role as a “governing sponsor” of the NRMP, the Court’s conclusion that the claim as it relates to the NRMP is non-arbitrable also defeats these additional requests.
See
NRMP Arbit. Reply at 30-31. It also seems self-evident that entities that are not parties to a contract containing an arbitration agreement are not entitled to arbitrate their disputes. As the Supreme Court said in
Waffle House,
“[t]he FAA directs courts to place arbitration agreements on equal footing with other contracts, but it ‘does not require parties to arbitrate when they have not agreed to do so.’”
EEOC v. Waffle House, Inc.,
IV. DEFENDANTS’ RULE 12(b)(6) MOTIONS TO DISMISS FOR FAILURE TO STATE A CLAIM
Plaintiffs raise one claim of price-fixing against all defendants under Section 1 of the Sherman Act: “Defendants and others have illegally contracted, combined and conspired among themselves to displace competition in the recruitment, hiring, employment and compensation of resident physicians, and to impose a scheme of
A. The Legal Framework
1. Failure to State a Claim in the Antitrust Context
On a motion to dismiss for failure to state a claim under Rule 12(b)(6), the Court must assume the truth of the facts alleged in the complaint and may grant the motion only if it appears that plaintiffs will be unable to prove any set of facts that would justify relief.
See Summit Health, Ltd. v. Pinhas,
To survive a Rule 12(b)(6) motion in the antitrust context, plaintiffs must do more than simply paraphrase the language of the federal antitrust laws or state in con-clusory terms that a defendant has violated those laws.
See Dial A Car. Inc. v. Transportation, Inc.,
2. Conspiracy in Restraint of Trade under Section 1
In order to state a claim of conspiracy in restraint of trade in violation of Section 1 of the Sherman Act, plaintiffs must allege (1) that the defendants entered into some agreement, contract, combination, conspiracy or other concerted ac
3. Inapplicability of Matsushita to Rule 12(b)(6) Motions
Two defendants, the ACGME and Yeshiva University (‘Yeshiva”), argue that there is another element to the legal standard that plaintiffs must satisfy in order to survive a motion to dismiss in the antitrust context. Specifically, these defendants assert that there is a limitation on the inferences that the Court may make in consideration of their motions to dismiss that derives from the Supreme Court’s decision in
Matsushita Electric Industrial Co. v. Zenith Radio Corp.,
[T]he absence of any plausible motive to engage in the conduct charged is highly relevant to whether a ‘genuine issue for trial’ exists within the meaning of Rule 56(e). Lack of motive bears on the range of permissible conclusions that might be drawn from ambiguous evidence: if petitioners had no rational economic motive to conspire, and if their conduct is consistent with other, equally plausible explanations, the conduct does not give rise to an inference of conspiracy.
Id.
at 596-97,
The Court concludes that application of the
Matsushita
rule simply is not appropriate in the context of a motion to dismiss. A motion to dismiss for failure to state a claim generally is made before discovery and should be evaluated on the basis of the four corners of the pleading.
See Summit Health, Ltd. v. Pinhas,
By contrast, plaintiffs are not required to set forth allegations of motive in their complaint in anticipation of what defendants may argue on a motion to dismiss are equally plausible explanations for the alleged conspiratorial activities.
See Atlantic Coast Airlines Holdings, Inc. v. Mesa Air Group, Inc.,
In Continental Ore Co. v. Union Carbide & Carbon Corp., the Supreme Court held that in cases that involve an alleged conspiracy among multiple actors involving multiple acts,
plaintiffs should be given the full benefit of their' proof without tightly compartmentalizing the various factual components and wiping the slate clean after scrutiny of each. The character and effect of a conspiracy are not to be judged by dismembering it and viewing its separate parts, but only by looking at it as a whole ... and in a case like the one before us, the duty of the jury was to look at the whole picture and not merely at the individual figures in it.
Continental Ore Co. v. Union Carbide & Carbon Corp.,
The Supreme Court also stated in
Continental Ore
that “acts which are in and of themselves legal lose that character when they become constituent elements of an unlawful scheme.”
Continental Ore Co. v. Union Carbide & Carbon Corp.,
It is not the form of the combination or the particular means used but the resultto be achieved that the statute condemns. It is not of importance whether the means used to accomplish the unlawful objective are in themselves lawful or unlawful. Acts done to give effect to the conspiracy may be in themselves wholly innocent acts. Yet, if they are part of the sum of the acts which are relied upon to effectuate the conspiracy which the statute forbids, they come within its prohibition.
Id.
at 809,
Neither of these rules, however, relieves plaintiffs of the burden of adequately alleging that a conspiracy to restrain trade existed in the first instance and that each defendant knowingly joined or agreed to participate in the conspiracy. If plaintiffs fail to do so, neither
Continental Ore
nor
American Tobacco
shield plaintiffs’ claims from dismissal.
See Southern Pacific Communications Co. v. American Telephone & Telegraph Co.,
B. Organizational Defendants’ Motions to Dismiss
Plaintiffs have sued seven organizational defendants: (1) the American Hospital Association (“AHA”); (2) the American Board of Medical Specialties (“ABMS”); (3) the Council of Medical Specialty Societies (“CMSS”); (4) the American Association of Medical Colleges (“AAMC”); (5) the American Medical Association (“AMA”); (6) the Accreditation Council for Graduate Medical Education (“ACGME”); and (7) the National Resident Matching Program (“NRMP”). Plaintiffs in their complaint allege that the AAMC “operates and manages” the Match Program, which functions to suppress competition in the hiring of medical residents by adopting policies that “restrict[] attempts by employers and applicants to withdraw from the matching program,” that “prohibit[] employment agreements between [Match Program] participants outside the [M]atch,” and that require “applicants to commit contractually to any assigned position as a condition of enrolling in the [Match Program].” Compl. ¶ 86(a), (b). Certain ACGME standards that limit the number of residents in any given program and limit the mobility of medical residents between programs allegedly further serve to suppress competition in the hiring and employment of medical residents. See id. ¶ 88. Plaintiffs charge that medical students are compelled to participate in the Match Program because “with few exceptions, only resident physicians who complete specified employment periods in ACGME-accredited institutions and programs or combined programs are eligible for ABMS-member board certification,” and that the ACGME “encourages and/or requires participation in [the Match] as a condition of accreditation.” Id. ¶¶ 87, 88(c).
Plaintiffs’ claim is that the restrictive “one position” nature of the Match Program combined with the ACGME accreditation standards together foreclose any external pressure on the institutional defendants to raise compensation levels that would be generated by prospective medical residents with multiple employment offers and their attendant bargaining power.
See
Compl. ¶ 92. This allegedly allows for
From these allegations, the Court concludes that plaintiffs adequately have alleged a common agreement to displace competition in the recruitment, hiring, employment and compensation of resident physicians and to impose a scheme of restraints, which have the purpose and effect of fixing, artificially depressing, standardizing and stabilizing resident physician compensation and other terms of employment among a number of the named organizational defendants and those institutional defendants that participated in the Match Program. The extent to which plaintiffs adequately have alleged that the organizational defendants participated in the conspiracy and which organizational defendants participated is the subject of the following analyses. 25
All the organizational defendants but the NRMP have filed motions to dismiss for failure to state a claim under Rule 12(b)(6) of the Federal Rules of Civil Procedure. All of the movants except the ACGME assert that plaintiffs’ claim based on the allegation that they are “governing sponsors” of the NRMP and the ACGME cannot survive scrutiny. The AAMC and the AMA also argue that their information exchange programs — -in the case of the AAMC, the COTH Survey; in the case of the AMA, the FREIDA database — cannot form the basis of a Section 1 antitrust claim. The ACGME argues that its creation and enforcement of accreditation standards for resident medical programs is non-commercial conduct that is beyond the reach of the antitrust laws.
1. Motion to Dismiss of the AHA
The AHA moves to dismiss the claim against it on the ground that the only allegations in the complaint pertaining to it — namely that it is a “governing sponsor” of the NRMP and the ACGME— are insufficient to demonstrate its participation in an antitrust conspiracy. The AHA further argues that those generalized allegations in the complaint pertaining to all “defendants” are conclusory and also are insufficient to tie the association to the conspiracy. See Memorandum of American Hospital Association in Support of Its Motion to Dismiss for Failure to State a Claim (“AHA (b)(6) Mem.”) at 1-2. 26
Plaintiffs do not dispute the AHA’s assertion that Illinois law, the state of incorporation of the AHA and the NRMP, does not recognize or otherwise define the term “governing sponsor.” The meaning of the term “governing sponsor” is far from self-evident, and plaintiffs do not make any assertions with respect to what role governing sponsors play for either the NRMP or the ACGME. The Court will not speculate as to the purpose or activities of a “governing sponsor” or infer from this vague term that the AHA “designed and implemented” or “facilitated” the Match Program or that, through its “active governance” of the ACGME, the AHA “created” the allegedly anticompetitive accreditation standards. Pis.’ (b)(6) Opp. at 44, 44 n. 31, 45. While all inferences are to be drawn in favor of plaintiffs on a motion to dismiss, the Court will not draw inferences from such vague, unsupported allegations.
See Andrx Pharmaceuticals v. Biovail Corp. Int’l,
Furthermore, plaintiffs’ use of the term “defendants” to refer to multiple defendants situated very differently from one another in the context of general and global allegations is insufficient either by itself or in combination with the allegations relating to “governing sponsor” to demonstrate a basis for the AHA’s participation in the conspiracy. Plaintiffs cannot escape their burden of alleging that each defendant participated in or agreed to join the conspiracy by using the term “defendants” to apply to numerous parties without any specific allegations as to the AHA.
See Invamed, Inc. v. Barr Laboratories, Inc.,
Plaintiffs’ allegations themselves evidence the ambiguity inherent in the global term “defendants.” Surely paragraph 83 of the complaint, for example, does not mean that all the defendants design the Match Program or that each defendant is in a position to implement it.
See
Compl. ¶ 83 (“Defendants collectively design and implement [the Match Program] and collectively agree to and comply with its anticompetitive restrictions.”). Nor can paragraph 85 mean that each defendant “periodically refine[s] the matching program to strengthen and expand its anti-competitive effect,” for not every defendant is in a position to do so.
Id.
¶ 85.
Compare In re Magnetic Audiotape Antitrust Litigation,
99 Civ. 1580,
The Court concludes that plaintiffs’ allegations with respect to the AHA are vague, conclusory and simply insufficient to meet plaintiffs’ burden under Rule 12(b)(6) of the Federal Rules of Civil Procedure. The Court therefore grants defendant AHA’s motion to dismiss for failure to state a claim.
2. Motions to Dismiss of the CMSS and the ABMS
Defendants CMSS and ABMS move to dismiss the complaint by joining in the motions of the AMA, the AAMC, the ACGME and the AHA.
See
CMSS Mot. at 2; ABMS Mot. at 2. Upon review of the complaint, the Court determines that the only explicit or implied reference to the CMSS in the complaint is an allegation defining the CMSS as “an Illinois not-for-profit corporation whose membership consists of 17 physician societies in specialties having a member board participating in ABMS. The CMSS is one of five governing sponsors of the NRMP and the ACGME.” Compl. ¶21. Plaintiffs allege that the ABMS also is one of five governing sponsors of the NRMP and the ACGME.
See id.
¶ 20.
28
Plaintiffs further allege (1) that the ABMS is “an Illinois not-for-profit corporation whose membership consists of 24 recognized medical specialty certification boards in the United States”
(id.);
(2) that these medical specialty boards “develop and apply professional and education standards for the evaluation and certification of physician specialists”
(id.);
and (3) that “[specialty certification by one of the
Even if these allegations adequately alleged that the 17 physician societies that are members of the CMSS or the 24 medical certification boards that are members of the ABMS were part of the conspiracy, the Court will not impute the activities of either organization’s members to the organization itself absent allegations that the entity participated in the conspiracy. There are no such allegations in the complaint, and it is established that a trade association or like organization can be held liable “for concerted action” taken by its members in furtherance of a conspiracy only if the association “acted as an entity.”
Alvord-Polk, Inc. v. F. Schumacher & Co.,
3. Motion to Dismiss of the AAMC
The AAMC asserts that only three allegations in the complaint pertain to it: (1) the AAMC “manage[s] and operate^] the residency matching program of the NRMP” (CompLf 15); (2) the “AAMC is one of the five governing sponsors of both the NRMP and the ACGME” (id. ¶ 17); and (3) “the AAMC/COTH annually surveys members of the COTH Section” of the AAMC and then “publishes an annual report entitled ‘Survey of Housestaff Stipends, Benefits and Funding,’ ” which includes, inter alia, historical (from 1968) and current national average salaries for first year residents as well as the average salaries for years one through six of the post graduate years of employment (id. ¶ 74). See AAMC (b)(6) Mem. at 3. In addition to these specific allegations cited by the AAMC, plaintiffs include introductory information about the AAMC, alleging that it is a not-for-profit corporation made up of a membership including “all 125 accredited medical schools (including those medical schools named as Defendants in this Complaint) and approximately 375 major teaching hospitals and health systems in the United States (including those hospitals and health systems named as Defendants in this Complaint).” Compl. ¶ 17. 29
With respect to the allegations concerning the COTH Survey, plaintiffs plead in detail the way in which the AAMC through the COTH Survey allegedly facilitates the conspiracy by annually gathering and disseminating medical resident compensation information.
See
Compl. ¶¶ 73-79, 81. Specifically, plaintiffs make the following allegations: The AAMC annually surveys the members of the COTH Sec
The AAMC argues that plaintiffs have failed to state a claim against it because the allegations related to the COTH Survey concern only the exchange of information that is only in aggregated form, because the Survey includes no information on future compensation, because the information is readily available to the public, and because there is no allegation that the AAMC participated in any discussion of compensation information. See AAMC (b)(6) Mem. at 7-21. The AAMC maintains that the dissemination of this kind of information under such circumstances is not a violation of the antitrust laws. 30
As a preliminary matter, the Court notes that the AAMC mischaracterizes plaintiffs’ claim by limiting the scope of the claim to the allegations that explicitly name the AAMC. A more accurate characterization of plaintiffs’ claim is that there exists an agreement to fix the compensation of resident physicians at an improperly depressed level and that the AAMC has participated in the conspiracy by facilitating the anticompetitive agreement through the creation and dissemination of the COTH Survey, which provides a mechanism by which compensation levels remain stabilized and depressed. Plaintiffs specifically allege that together the Match Program and the ACGME accreditation standards eliminate the possibility that prospective medical residents can use compensation as a bargaining chip in gaining employment or in negotiating the terms of employment, and that the compensation information disseminated by the AAMC assists in keeping compensation levels for resident physicians fixed. The AAMC’s motion to dismiss must be viewed through the lens of this larger price-fixing charge, and through this lens the Court concludes that while plaintiffs have not alleged expressly that the AAMC agreed to join the conspiracy, it is reasonable to infer from the facts and circumstances detailed in the complaint that the AAMC, an organization whose membership includes the institutional defendants, annually col
The AAMC argues that several facets of the COTH Survey preclude the Court from concluding that plaintiffs adequately have alleged that the AAMC participated in the conspiracy, but none of its arguments is persuasive. First, the fact that plaintiffs’ allegations regarding the AAMC concern information dissemination does not prevent the Court from concluding that the AAMC participated in the conspiracy. While the sharing of pricing and other information often may serve legitimate purposes,
United States v. United States Gypsum Co.,
Third, the fact that plaintiffs allege only the exchange of past and current price information' — as contrasted with proposals for future price increases or announcements of new prices — does not defeat plaintiffs’ claim that the information exchange facilitated the stabilization of medical resident compensation. As the Supreme Court has held, “[e]xchanges of current price information ... have the greatest potential for generating anti-competitive effects and ... have consistently been held to violate the Sherman Act.”
United States v. United States Gypsum Co.,
Fourth, the fact that the information is publicly disseminated does not insulate the activity from consideration in the larger price-fixing claim. As the Ninth Circuit concluded in
In re Coordinated Pretrial Proceedings in Petroleum Products Antitrust Litigation,
Finally, plaintiffs do not allege only that the dissemination of the COTH Survey allows the institutional defendants to set depressed compensation levels. Plaintiffs also allege that the COTH Survey provides a policing mechanism for the various institutions — a separate, second way in which plaintiffs charge that the AAMC’s distribution of the COTH Survey facilitates the price-fixing conspiracy.
See
Compl. ¶ 73. With the annual COTH Survey the institutional defendants not only are able to gauge their own compensation levels on a regular basis, but also are able to monitor them co-conspirators to ensure that others are not departing upward from the depressed levels. Plaintiffs’ allegation that “survey reports have at times included statistics on ‘atypical’ deviations from salary averages” underscores this point.
Id.
¶ 81(b);
see Todd v. Exxon Corp.,
4. Motion to Dismiss of the AMA
The AMA asserts that only two paragraphs in the complaint relate to it: (1) the allegation that it is a “governing sponsor” of both the NRMP and the ACGME (see Compl. ¶ 18); and (2) the allegation that “employers have access to resident physician compensation information through an electronic database known as the Fellowship and Residency Electronic Interactive Database (‘FREIDA’), which is maintained by the AMA.” Id. ¶ 80. 31 According to plaintiffs, “[t]he information contained in FREIDA is not average or aggregated data. It is detailed and employer-specific.” Id. The AMA argues that the FREIDA-based allegation fails to state a claim against the AMA. Like the AAMC, the AMA contends that plaintiffs have not alleged that the association entered into an agreement with competitors to fix medical resident compensation, but rather only that the AMA allegedly conspired to disseminate information. See AMA (b)(6) Mem at 5-6. 32
For the reasons stated with respect to the AAMC’s dissemination of compensa
5. Motion to Dismiss of the ACGME
The ACGME moves to dismiss plaintiffs’ claim against it on the ground that the creation and enforcement of accreditation standards for resident medical programs is non-commercial conduct that is beyond the reach of the antitrust laws. In addition, the ACGME argues that plaintiffs have failed to allege that the ACGME took part in any conduct outside of educational accreditation. See ACGME (b)(6) Mem. at 2. 35
Plaintiffs allege in .their complaint that the ACGME accreditation standards play a central role in the conspiracy to depress medical resident salaries. Broadly stated, plaintiffs allege that completion of an ACGME-accredited residency program is perceived by medical students as neces
The ACGME is correct that actors in the educational world and/or professional associations have been held to be insulated from the antitrust laws if the activity at issue is non-commercial in nature.
See Marjorie Webster Junior College v. Middle States Association of Colleges and Secondary Schools, Inc.,
Plaintiffs allege that certain ACGME accreditation standards have a clear impact on commerce because they facilitate and enforce the suppression of competition in the hiring, employment and compensation of resident physicians effectuated by the Match Program and allow the ACGME to monitor resident compensation.
See
Pis.’ (b)(6) Opp. at 27-28. While the ACGME responds that it lacks a motive to conspire to depress salaries and compensation in the medical resident field and offers non-anticompetitive explanations for the existence of the accreditation standards, this is not the proper stage of the proceedings in which to evaluate motive or weigh countervailing explanations for actions allegedly taken in furtherance of the conspiracy.
See
Section IV(A)(3),
supra; see also Hamilton Chapter of Alpha Delta Phi, Inc. v. Hamilton College,
In
DM Research, Inc. v. College of American Pathologists,
Judge Boudin addressed the circumstances in which accreditation standards have been found to be anticompetitive. He noted that “[m]erely to say that the standards are disputable or have some market effects has not generally been enough to condemn them as ‘unreasonable’ under the Sherman Act.”
DM Research, Inc. v. College of American Pathologists,
C. Yeshiva University’s Motion to Dismiss
Defendant Yeshiva University moves to dismiss for failure to state a claim on the ground that the complaint does not set forth any allegations connecting it to the alleged conspiracy. See Yesh. (b)(6) Mem. at 3. The only allegation in the complaint that explicitly concerns Yeshiva is that “[defendant Yeshiva University (Yeshiva’), of which the Albert Einstein College of Medicine (‘AEC’) is a part, ... through AEC, sponsors medical residency programs, employing members of the Plaintiff class. Yeshiva has contracted, combined and conspired with the named Defendants and others to restrain competition as alleged in this Complaint.” Compl. ¶ 50.
Plaintiffs argue that this is enough to tie Yeshiva to the conspiracy because the term “defendants” as it is used throughout the complaint includes “employers of resident physicians, entities related to and/or affiliated with such employers, or professional organizations through which the illegal restraints set forth in this Complaint are accomplished.” Pis.’ (b)(6) Opp. at 50 (quoting Compl. ¶ 5) (emphasis added). Notwithstanding this general definition, the Court concludes that the complaint fails to allege adequately any claim against Yeshiva.
The only connection Yeshiva is alleged to have to the price-fixing conspiracy is that it “sponsors” the graduate medical education aspects of the AEC on behalf of the ACGME. See Compl. ¶ 50. In the complaint, however, a “Sponsoring Institution” is defined as an institution “operating medical residency programs in one or more specialties, as well as individual residency programs (‘Sponsored Programs’) affiliated with those and other institutions ....” Id. ¶ 16. Yeshiva does not fall into this category because it does not operate a medical residency program nor is it an individual residency program. 37 Any allegations concerning the activities of “Sponsoring Institutions” therefore do not pertain to Yeshiva. In addition, unlike the other institutional defendants, Yeshiva is not alleged to own or operate a hospital or health center, to employ medical residents or to participate in either the Match Program or the COTH Survey. Any allegations concerning these activities therefore also do not pertain to Yeshiva.
The only aspect of the alleged conspiracy that arguably may link Yeshiva to the conspiracy is that portion of the complaint that addresses the ACGME accreditation standards, because Yeshiva admits that it monitors residency program compliance with ACGME standards for the accreditation association.
See
Yesh. (b)(6) Mem. at 4. In that section of the complaint, however, plaintiffs set forth no allegations concerning entities like Yeshiva that monitor residency program compliance with ACGME standards on behalf of the ACGME. Even the allegation that expressly pertains to residency program compliance does not mention the existence or role of such a monitoring entity. Plaintiffs only allege that “in reviewing compliance with accreditation standards, the ACGME
directly
reviews compensation
Athough plaintiffs assert that ACGME accreditation standards can regulate residency programs “only through conduits like Yeshiva,” (Pis.’ (b)(6) Opp. at 51), plaintiffs have not set forth any allegations in them complaint that describe or challenge the activities of such “conduits,” or specifically of Yeshiva. The Court will not infer from the generalized allegations concerning the ACGME that a separate entity that monitors ACGME-accredited medical residencies on behalf of the ACGME participated in the conspiracy.
See Associated General Contractors of California, Inc. v. California State Council of Carpenters,
Y. CONCLUSION
For the foregoing reasons, the Court first concludes that it has personal jurisdiction over the following institutional defendants: Barnes Jewish-Hospital, Baylor College of Medicine, Beth Israel Deaconess Medical Center, Inc., Boston Medical Center Corp., Cedars-Sinai Medical Center, The Cleveland Clinic Foundation, Emory ■ University, Rhode Island Hospital, Rush-Presbyterian-St. Luke’s Medical Center, St. Louis University, Stanford Hospital & Clinics, Thomas Jefferson University Hospital, Inc., Administrators of the Tulane Educational Fund, University Hospitals of Cleveland, Inc. and Yale-New Haven Hospital, Inc. The Court therefore denies the motions to dismiss’for lack of personal jurisdiction filed by those institutions under Rule 12(b)(2) of the Federal Rules of Civil Procedure. The Court concludes that it does not have personal jurisdiction over institutional defendant Washington University Medical Center and therefore grants its motion to dismiss.
The only two organizational defendants that have filed motions to dismiss for lack of personal jurisdiction are the American Board of Medical Specialties and the Council of Medical Specialty Societies. The Court concludes that it does not have personal jurisdiction over either organizational defendant and therefore grants those defendants’ motions to dismiss for lack of personal jurisdiction.
Second, the referral to arbitration of any portion of plaintiffs’ single conspiracy claim would be improper. The Court therefore has subject matter jurisdiction over plaintiffs’ entire claim and denies defendant National Resident Matching Program’s motion to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1) of the Federal Rules of Civil Procedure and its motion to compel arbitration. It also denies the motion to compel arbitration filed by the American Medical Association.
Finally, the Court finds that plaintiffs adequately have alleged a common agreement to displace competition in the recruitment, hiring, employment and compensation of resident physicians and to impose a scheme of restraints that has the purpose and effect of fixing, artificially depressing,
An Order consistent with this Opinion shall be issued this same day.
SO ORDERED.
ORDER
For the reasons stated in the separate Opinion issued this same day, it is hereby
ORDERED that the Motion of the Defendant the Cleveland Clinic Foundation to Dismiss Plaintiffs’ Complaints Against the Cleveland Clinic Foundation for Lack of Personal Jurisdiction [21-1] is DENIED; it is
FURTHER ORDERED that Defendant Beth Israel Deaconess Medical Center’s Motion to Dismiss the Complaint [27-1] is DENIED; it is
FURTHER ORDERED that Defendant Boston Medical Center’s Motion to Dismiss the Complaint [29-1] is DENIED; it is
FURTHER ORDERED that Defendant Rhode Island Hospital’s Motion to Dismiss the Complaint [31-1] is DENIED; it is
FURTHER ORDERED that Defendant Thomas Jefferson University Hospital’s Motion to Dismiss the Complaint [33-1] is DENIED; it is
FURTHER ORDERED that Defendant Yale-New Haven Hospital’s Motion to Dismiss the Complaint [35-1] is DENIED; it is
FURTHER ORDERED that the Motion of the Association of American Medical Colleges to Dismiss for Failure to State a Claim [37-1] is DENIED; it is
FURTHER ORDERED that the Motion of American Hospital Association to Dismiss Plaintiffs’ Complaint for Failure to State a Claim [40-1] is GRANTED; it is
FURTHER ORDERED that Yeshiva University’s Motion to Dismiss the Complaint for Failure to State a Claim Upon Which Relief Can Be Granted [45-1] is GRANTED; it is
FURTHER ORDERED the Defendant Rush-Presbyterian-St. Luke’s Medical Center’s Motion to Dismiss Pursuant to Rule 12(b)(2) [47-1] is DENIED; it is
FURTHER ORDERED that Defendant National Resident Matching Program’s Motion to Dismiss and to Compel Arbitration [49-1] is DENIED; it is
FURTHER ORDERED that Defendant Bames-Jewish Hospital’s Motion to Dismiss [50-1] is DENIED; it is
FURTHER ORDERED that Defendant Emory University’s Motion to Dismiss [54-1] is DENIED; it is
FURTHER ORDERED that Defendant Stanford Hospital & Clinics’ Motion to Dismiss [58-1] is DENIED; it is
FURTHER ORDERED that Defendant Administrators of the Tulane Educational Fund’s Motion to Dismiss [61-1] is DENIED; it is
FURTHER ORDERED that Defendant Washington University Medical Center’s Motion to Dismiss [63-1] is GRANTED; it is
FURTHER ORDERED that Defendant University Hospitals of Cleveland, Inc.’s
FURTHER ORDERED that Defendant St. Louis University’s Motion to Dismiss the Complaints for Lack of Personal Jurisdiction [69-1] is DENIED; it is
FURTHER ORDERED that the Motion of Council of Medical Specialty Societies to Dismiss the Complaint for lack of personal jurisdiction [71 — 1] is GRANTED; it is
FURTHER ORDERED that the Motion of Defendant American Medical Association to Dismiss the Complaints Against It for Failure to State a Claim and Conditional Motion to Compel Arbitration [83-1] is DENIED in part and GRANTED in part; the conditional motion to compel arbitration is DENIED; the motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim is GRANTED; it is
FURTHER ORDERED that the American Board of Medical Specialties’ Motion to Dismiss the Complaint for lack of personal jurisdiction [89-1] is GRANTED; it is
FURTHER ORDERED that Baylor College of Medicine’s Motion to Dismiss for Lack of Personal Jurisdiction [91-1] is DENIED; it is
FURTHER ORDERED that Defendant Cedars-Sinai’s Motion to Dismiss the Complaints Pursuant to Fed.R.Civ.P. 12(b)(2) [92-1] is DENIED; and it is
FURTHER ORDERED that the Motion to Dismiss of Defendant Accreditation Council for Graduate Medical Education [104-1] is DENIED; it is
FURTHER ORDERED that this case is dismissed against the following defendants with prejudice: the American Hospital Association, Yeshiva University, and the American Medical Association; and it is
FURTHER ORDERED this case is dismissed against the following defendants without prejudice: Washington University Medical Center, the Counsel for Medical Specialty Societies, and the American Board of Medical Societies.
SO ORDERED.
Notes
. The institutional defendants that have moved to dismiss the complaint for lack of personal jurisdiction are Barnes Jewish-Hospital, Baylor College of Medicine, Beth Israel Deaconess Medical Center, Inc., Boston Medical Center Corp., Cedars-Sinai Medical Center, The Cleveland Clinic Foundation, Emory University, Rhode Island Hospital, Rush-Presbyterian-St. Luke’s Medical Center, St. Louis University, Stanford Hospital & Clinics, Thomas Jefferson University Hospital, Inc., Administrators of the Tulane Educational Fund, University Hospitals of Cleveland, Inc., Washington University Medical Center and Yale-New Haven Hospital, Inc.
. Washington University Medical Center asserts that contrary to plaintiffs' complaint it does not participate in the Match. See Supplemental Memorandum of Law in Support of Defendant Washington University Medical Center’s Motion to Dismiss the Complaints Pursuant to Fed.R.Civ.P. 12(b)(2), Declaration of Brian Phillips ¶ 4. Plaintiffs do not refute this statement.
. See Supplemental Memorandum of Points and Authorities in Support of Defendant Barnes-Jewish Hospital’s Motion to Dismiss the Complaints Pursuant to Fed.R.Civ.P. 12(b)(2), Declaration of Terra Mouser ¶ 2 ("Barnes-Jewish Hospital also has sporadic contact with the NRMP’s technical support staff'); Supplemental Memorandum in Support of Defendant Baylor College of Medicine's Motion to Dismiss the Complaints Pursuant to Fed.R.Civ.P. 12(b)(2), Declaration of Ralph D. Feigin ¶ 4 (interactions include transmission of resident names, telephone calls to NRMP to address electronic submission problems, receipt of periodic emails and packages from NRMP); Supplemental Memorandum of Points and Authorities in Support of Defendant Emory University's Motion to Dismiss the Complaints Pursuant to Fed. R.Civ.P. 12(b)(2), Declaration of James R. Zaidan, M.D., M.B.A ¶ 3 (defendant "has sporadic contact with the NRMP’s technical sup- ' port staff'); Memorandum of Law in Support of Defendant Rush Presbyterian St. Luke's Medical Center’s Motion to Dismiss the.Com-, plaints Pursuant to Fed.R.Civ.P. 12(b)(2), Declaration of Thomas A. Deutsch ¶ 4 (defendant "has sporadic contact with the NRMP's technical support staff”); Supplemental Memorandum of Points and Authorities in Support of Defendant Stanford Hospital & Clinics’ Motion to Dismiss the Complaints Pursuant to Fed.R.Civ.P. 12(b)(2), Declaration of Ann M. Dohn ¶ 3 (defendant "has sporadic contact with the NRMP's technical support staff”); Supplemental Memorandum of Points and Authorities in Support of Defendant Tulane’s Motion to Dismiss the Complaints Pursuant to Fed.R.Civ.P. 12(b)(2); Declaration of Edward F. Foulks, M.D., Ph.D. ¶ 3 (defendant "has sporadic contact with the NRMP's technical support staff”).
. Taking plaintiffs' argument to its logical conclusion, a forum-based entity could ensure that the Court had jurisdiction over any non-forum contracting party merely by requesting that the non-forum party provide any information necessary to execute the contract in intervals. See Health Communications, Inc. v. Mariner Corp., 860 F.2d 460, 463 (D.C.Cir.1988).
. Plaintiffs’ discussion of personal jurisdiction predicated on a defendant’s contact with a forum via an interactive web site is a red herring. Those cases cited by plaintiffs address the question of whether a defendant, by maintaining
its own
interactive web site that is accessible to or directed towards a specific jurisdiction, makes itself vulnerable to suit within that forum.
See Gorman v. Ameritrade Holding Corp.,
. With further respect to the fact that Dr. Miller serves both as President of the NRMP and Executive Vice President of the ABMS, plaintiffs have not disputed Dr. Miller's declaration that any actions he took in the District of Columbia were in his capacity as President of the NRMP and not in his capacity as Executive Vice President of the ABMS. The presence of Dr. Miller as an officer of both organizations, without additional allegations that the steps Dr. Miller took nominally as NRMP President were in fact taken on behalf of the
. Then Circuit Judge Ruth Bader Ginsburg described these three contacts as the "plus factors," factors that demonstrate some "reasonable connection" between the jurisdiction in which the court sits "separate from and in addition to” the injury caused in the jurisdiction.
Crane v. Carr,
. While some putative class members likely pursued employment in the District, defendants are correct that plaintiffs cannot rely on alleged injury to putative plaintiffs in order to meet the in-District injury requirement.
See Selman v. Harvard Medical School,
. There are three institutions that challenge plaintiffs' allegation that they participate in the COTH Survey.
See
Supplemental Memorandum of Law in Support of Defendant Washington University Medical Center’s Motion to Dismiss the Complaints Pursuant to Fed.R.Civ.P. 12(b)(2), Declaration of Brian Phillips ¶ 4; Supplemental Memorandum in Support of Defendant Baylor College of Medicine's Motion to Dismiss the Complaints Pursuant to Fed.R.Civ.P. 12(b)(2), Declaration of Ralph D. Feigin ¶ 5; Supplemental Memorandum of Points and Authorities in Support of Defendant Tulane's Motion to Dismiss the Complaints Pursuant to Fed.R.Civ.P. 12(b)(2), Supplemental Declaration of Edward F.
. See Supplemental Memorandum in Support of Defendant Beth Israel Deaconess Medical Center’s Motion to Dismiss the Complaints Pursuant to Fed.R.Civ.P. 12(b)(2), Declaration of Paul F. Levy ¶ 4; Supplemental Memorandum in Support of Defendant Boston Medical Center's Motion to Dismiss the Complaints Pursuant to Fed.R.Civ.P. 12(b)(2), Declaration of John B. Chessare, M.D. ¶ 4; Defendant Cedars-Sinai's Supplemental Memorandum of Points and Authorities in Support of Motion to Dismiss the Complaints Pursuant to Fed.R.Civ.P. 12(b)(2), Declaration of Thomas M. Priselac ¶ 6 (President and Chief Executive Officer in individual capacity is member of AHA and Chair of COTH Administrative Board; travels to the District four to six times a year to fulfill related obligations); Supplemental Memorandum of Law in Support of Defendant Rhode Island Hospital's Motion to Dismiss the Complaint Pursuant to Fed.R.Civ.P. 12(b)(2), Declaration of Joseph F. Amaral ¶ 4; Defendant Thomas Jefferson University Hospital’s Motion to Dismiss the Complaint, Declaration of Thomas J. Lewis ¶ 4 (President and Chief Executive Officer travels on behalf of defendant to District four times a year to fulfill obligations related to membership in AHA and COTH); Supplemental Memorandum in Support of Defendant University Hospitals of Cleveland, Inc.'s Motion to Dismiss the Complaints Pursuant to Fed.R.Civ.P. 12(b)(2), Declaration of John Ferry, M.D. ¶ 7 (employees travel to District of Columbia in individual capacities as members of professional or industry organizations); Supplemental Memorandum of Law in Support of Defendant Yale-New Haven Hospital's Motion to Dismiss the Complaints Pursuant to Fed.R.Civ.P. 12(b)(2), Declaration of Joseph A. Zaccagnino ¶ 4 (employees travel to District of Columbia in individual capacities as members of professional or industry organizations).
. For the reasons stated in Section 11(B)(1)(a), supra, the moving institutional defendants’ contacts with the District of Columbia in connection with the Institutional Match Contract are insufficient by themselves to demonstrate that the defendants conducted “substantial business” within the District.
. Plaintiffs also claim conspiracy jurisdiction pursuant to Sections 13 — 423(a)(3) and (4), but
. To the extent that plaintiffs assert that personal jurisdiction exists over the individual moving defendants under a conspiracy jurisdiction theory under Section 12 of the Clayton Act, this Court explicitly rejected the "conspiracy” theory in the Clayton Act context in
Mylan Laboratories, Inc. v. Akzo, N.V.,
. Thirteen institutional defendants did not move to dismiss this action for lack of personal jurisdiction: Medstar-Georgetown Hospital Medical Center, Inc., George Washington University, MedStar Health, Inc., Beth Israel Medical Center, Duke University Health System, Inc., Henry Ford Health System, The Massachusetts General Hospital, The McGraw
. Dr. Beran avers that the remaining named plaintiffs also entered into Student Match Contracts with identical arbitration and choice of law provisions, and this assertion is not disputed. See Beran Compel Aff. ¶ 10.
. The AMA conditionally moves to compel arbitration and adopts the arguments put forth by the NRMP. See Motion of Defendant American Medical Association to Dismiss the Complaints Against It for Failure to State a Claim and Conditional Motion to Compel Arbitration at 4-5. Both the ABMS and the CMSS also conditionally move to compel arbitration. See Motion of American Board of Medical Specialties to Dismiss the Complaint ("ABMS Mot.”) at 1; Motion of Council of Medical Specialty Societies to Dismiss the Complaint ("CMSS Mot.”) at 1. Because the Court has concluded that it lacks personal jurisdiction over these organizational defendants, see Sections 11(B)(1)(b), (2), supra, however, the Court will decline to consider the motions to compel of the ABMS or the CMSS.
. For these purposes, any distinction between allegations concerning the Match Program and the Student Match Contract is artificial. See Compl. ¶ 15 (“The NRMP exists for the sole purpose of illegally restraining trade by eliminating .competition in the recruitment and employment of resident physicians by assigning prospective resident physician employees to medical residency positions.”).
. Although the opinion of the D.C. Circuit in
Cole v. Burns International Security Services,
. It is undisputed that Illinois law applies to plaintiffs’ contract-based claims pursuant to the choice of law provision in the Student Match Contract. See Beran Compel. Aff., Ex. A-l, 1998 Student Agreement of Plaintiff Denise Greene (“This agreement shall be governed by laws of the State of Illinois, but the Illinois conflicts of law provision shall be not be construed to apply the law of any other jurisdiction.”).
. To the extent that plaintiffs substantially rest their unconscionability argument on the claim that the fee-splitting provision makes the arbitration agreement "oppressive” and "totally one-sided,” Pis.' Arbit. Opp. at 26, the argument is rejected for the reasons stated in Section 111(C)(2), supra, in view of the NRMP’s offer to pay the individual plaintiffs’ shares of the costs of arbitration.
. Although the NRMP drafted the Match Contract, the Court concludes that the policy directing a court to hold ambiguity against the drafter does not outweigh the policies that heavily favor arbitration.
See Volt Information Sciences, Inc. v. Board of Trustees,
. To the extent that other members of this Court have interpreted
Ekstrom post-Mastrobuono
to extend a general choice of law provision to matters concerning the scope of the arbitrator’s authority, the undersigned respectfully disagrees.
See Int’l Technologies Integration, Inc. v. Palestine Liberation Organization,
. Having determined that Mastrobuono precludes application of Illinois law relating to the scope of an arbitrator's authority, the Court does not reach the question of whether the parties accurately represented the status of Illinois law.
. The cases relied upon by defendants in support of their argument for application of
Matsushita
in the dismissal context do not convince the Court otherwise. In those decisions, the courts extended the plausibility analysis articulated in
Matsushita
to one of impossibility, effectively concluding that those plaintiffs’ complaints failed to state a claim under Rule 12(b)(6).
See DM Research, Inc. v. College of American Pathologists,
. Only one institutional defendant, Yeshiva University, separately moved to dismiss the complaint for failure to state a claim. Its arguments are addressed in Section IV(C), infra. Four other institutional defendants joined the motions to dismiss filed by the AAMC, the AMA and the ACGME. None of the joining institutional defendants, however, are similarly situated to the organizations such that dismissal of the organizational defendants would provide a basis for dismissal of the institutions, as is evident in the following pages.
. Defendants AMA, AAMC, ABMS and CMSS moved to join AHA’s motion to dismiss to the extent that plaintiffs' allegations pertain to them in their capacity as governing spon
. Plaintiffs’ reference to the Court's decision in
In re Vitamins Antitrust Litigation,
. The Court rejects plaintiffs' governing sponsor assertions with respect to the CMSS and the ABMS as insufficient for the reasons stated in Section IV(B)(1), supra.
. The Court rejects plaintiffs' "governing sponsor” allegations as insufficient for the reasons stated in Section IV(B)(1), supra, with respect to the AHA. The Court also rejects the allegation that the AAMC "manages and operates” the NRMP as insufficient because plaintiffs offer no support for this conclusoiy allegation.
. Four institutional defendants have joined the AAMC’s Rule 12(b)(6) motion to dismiss. See Defendant Beth Israel Medical Center's Notice of Joinder in Motions to Dismiss ("Beth Israel Joinder") at 1; Notice by Defendants Duke University Health System, Inc., and Mount Sinai School of Medicine of the City University of New York of Their Joinder in Motions to Dismiss ("Duke/Sinai Joinder") at 1; Defendant the New York and Presbyterian Hospital’s Notice of Joinder in Motions to Dismiss (“NY/Presb. Joinder”) at 1-2.
. Four institutional defendants have joined the AMA’s Rule 12(b)(6) motion to dismiss. See Beth Israel Joinder at 1; Duke/Sinai Join-der at 1; NY/Presb. Joinder at 1-2.
. The AMA further argues that if the Court infers that the AMA was a member of the conspiracy through its maintenance of the FREIDA database, by analogy the publisher of
.In addition, whether the AMA’s operation of the FREIDA database and the dissemination of database information is itself lawful is irrelevant.
See American Tobacco Co. v. United States,
. The Court rejects plaintiffs’ governing sponsor allegations as insufficient for the reasons stated in Section IV(B)(2), supra.
. Four institutional defendants have joined the ACGME’s Rule 12(b)(6) motion to dismiss. See Beth Israel Joinder at 1; Duke/Sinai Join-der at 1; NY/Presb. Joinder at 1-2.
.
"Marjorie Webster
is of questionable vitality after
Goldfarb,
to the extent that it draws a bright line between education and business, or accreditation policy and commerce."
Welch v. American Psychoanalytic Association,
No. 85 Civ. 1651 (JFK),
. Similarly, plaintiffs define the defendant class in relevant part as "all ACGME-accredit-ed Sponsoring Institutions as of the date of certification of the Defendant Class, and entities that were ACGME-accredited Sponsoring Institutions at any time since May 7, 1998." Id. ¶ 58. Yeshiva therefore does not fall into the proposed defendant class because it is not a "sponsoring institution” as that term is defined.