Court Hears Arguments In NRMP Suit Hearing

The parties in the lawsuit challenging the National Resident Matching Program (NRMP) made oral arguments Feb. 26 before the U.S. District Court in Washington, D.C.

The arguments were the latest in the Paul Jung v. AAMC suit filed last May by three physicians against the NRMP, its five sponsors, the Accreditation Council for Graduate Medical Education (ACGME), and 29 hospitals or medical schools that sponsor residency programs. The plaintiffs charge that the NRMP and activities related to it are anti-competitive and a violation of antitrust laws.

Counsel for the suit's defendants - including the AAMC, the ACGME, and others - filed motions to dismiss for failure to state a claim upon which relief can be granted, motions to dismiss for lack of personal jurisdiction, and motions to dismiss and compel arbitration in the suit.

The ACGME and the American Hospital Association (AHA) also filed motions to dismiss, which were joined by, among others, the American Medical Association (AMA) and Yeshiva University.

ACGME: No commercial activity

In arguing against the charge that the Match and its related activities violate antitrust laws, ACGME attorney Douglas Carlson said that graduate medical education (GME) is primarily an educational endeavor, and not a commercial activity subject to antitrust constraints. Carlson told the court that the plaintiffs failed to allege activity on the part of the ACGME that constitutes commerce within the scope of the Sherman Act, which prohibits every "contract, combination, or conspiracy in restraint of trade" and allows for the imposition of substantial penalties for violations.

Carlson argued that, in order to fall under the Sherman Act, plaintiffs must allege that the ACGME "derived a commercial benefit from depressing or stabilizing resident stipends." There is no commercial benefit to ACGME from the alleged depressing and stabilizing of resident stipends, nor have the plaintiffs alleged that the ACGME is a competitor in the market for services of resident physicians, Carlson added.

AAMC: COTH survey lawful

Responding to one plaintiff allegation, Robert Burgoyne, the AAMC's attorney, told the court that the association's COTH (Council of Teaching Hospitals) survey is not unlawful. The survey "is an information exchange which falls squarely within the guidelines posted by the Department of Justice and the Federal Trade Commission for addressing information exchanges," Burgoyne said.

The data published in the survey is not institution specific, he told the court, is at least three months old, is publicly available, and is made up of national and regional averages. The non-specificity of the survey's data makes it unlikely that it could be used for anticompetitive purposes, he said.

Another plaintiff allegation is that the AAMC's status as sponsor of both the NRMP and the ACGME - and its operation of the Match for the NRMP - constitute participation in the alleged conspiracy. But Burgoyne argued that the complaint fails to allege any facts that would support a conclusion the AAMC has "participated in an overarching conspiracy to fix prices, allocate markets, or impose unfair working conditions on residents."

There are no factual allegations "regarding any express agreement by the AAMC, nor are there any factual allegations that would support [the conclusion that the AAMC has entered] into a tacit agreement" to participate in a conspiracy, he said. The operation of the Match is no proof of a conspiracy, he added, as "a working relationship is not equivalent to a conspiratorial relationship."

Institutional Defendants: No personal jurisdiction

Meanwhile, Cedars-Sinai and several other institutional defendants, as well as Council of Medical Specialty Societies (CMSS) and the American Board of Medical Specialties (ABMS), asked the court to dismiss them from the case based on lack of personal jurisdiction. The institutional defendants argued that membership in the AAMC and participation in the Match do not constitute sufficient contact with the District of Columbia to confer court jurisdiction on defendants outside that area. (Cedars-Sinai, for example, is in Los Angeles and CMSS is in Lake Bluff, Ill.)

NRMP: Compel arbitration

The NRMP argued in its motion that the court compel the parties to arbitrate. This argument was predicated on the agreements the plaintiffs signed before they participated in the Match, stating that all "claims, disputes, or other matters" related to the agreement or to the program must be resolved by "binding arbitration in accordance with the rules of the American Arbitration Association."

Plaintiffs: Antitrust concerns

Sherman Marek, the attorney for the Jung plaintiffs, said that "each and every one of [the defendants] … have eliminated competition and fixed prices on the services of residents." He told the court that, contrary to defense claims, the case was not about GME.

"We don't have any problem with accreditation standards that don't relate to employment issues, such as salaries," Marek told the court. "What this case is about is restraints that are placed on the market for resident salaries."

The defendants accomplish this "depression in standardization" of salaries through "several related mechanisms," Marek said. "One is the matching program, which divides the market. Market division is, per se, a violation of the antitrust laws. The market division is perpetuated through the residents' period of residency by the ACGME's impediments to transferring among programs." Other mechanisms, he argued, are the AAMC's COTH survey and the ACGME's powers of accreditation.

"What the plaintiffs repeatedly refer to as salaries, we refer to as stipends," Burgoyne said in rebuttal. "That's because these are, in fact, payments made to individuals who are continuing their education, just as graduate students get stipends. And just as they get stipends, they also get a great deal of value from the training that they're being provided by the institutions in question."

Judge Paul Friedman, who heard the case, promised rulings "in due course." The court consented to the approach agreed to by the parties that the motions should be ruled on in the order they were argued - motions to dismiss for failure to state a claim, motions to dismiss on jurisdictional grounds, and the NRMP's motion to compel arbitration.

- Suria Santana

Editor's note: For more information, visit www.aamc.org/newsroom/jungcomplaint.

Contact Us    © 1995-2008 AAMC    Terms and Conditions    Privacy Statement