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Association of American Physicians & Surgeons, Inc. v. American Board of Medical Specialties

United States District Court, N.D. Illinois, Eastern Division

December 13, 2017



          Andrea R Wood United States District Judge

         Plaintiff Association of American Physicians & Surgeons, Inc. (“AAPS”) has sued Defendant American Board of Medical Specialties (“ABMS”), alleging restraint of trade in violation of Section 1 of the Sherman Act and negligent misrepresentation in connection with ABMS's program for recertification known as the ABMS Maintenance of Certification® program. Before the Court is ABMS's renewed motion to dismiss both claims pursuant to Federal Rule of Civil Procedure 12(b)(6) (the “Motion”) (Dkt. No. 30). For the reasons stated below, the Court finds that AAPS has failed to state a claim with respect to either count and thus grants the Motion.


         As set forth in the Complaint, [1] AAPS is a membership organization of thousands of practicing physicians in virtually all specialties. (Compl. ¶ 4, Dkt. No. 1.) ABMS is a nonprofit entity that serves as the umbrella organization for twenty-four medical specialty boards (the “Member Boards”). (Id. ¶¶ 5, 11.) Each of the Member Boards certifies physicians in a given medical specialty if the physician voluntarily seeks certification, completes an accredited medical residency program in the specialty, passes an examination administered by the Member Board, and otherwise complies with the Member Board's requirements for certification. (ABMS Br. at 1, Dkt. No. 31.) The Member Boards are to be distinguished from the official medical boards of the states, which determine the fitness of physicians to practice medicine. (Compl. ¶ 19, Dkt. No. 1.) Certification by a Member Board is a voluntary process and is not required to be licensed to practice medicine-a patient has the right to seek the medical care of any physician licensed to practice medicine (whether certified or not). (Id. ¶ 20.)

         Although a physician certified by a Member Board was originally certified for life, ABMS and its Member Boards came to recognize the need for periodic recertification given that the state-of-the-art in each medical specialty evolved rapidly and a physician's knowledge of a particular specialty could deteriorate over time. (ABMS Br. at 2, Dkt. No. 31.) As such, in addition to initial certification, ABMS and its Member Boards offer a program for recertification known as the ABMS Maintenance of Certification® (“MOC”) program. (Id.) Like certification, participation in the MOC program is not required in order to be licensed to practice. (See Compl. ¶ 20, Dkt. No. 1.) The MOC program has four basic components: (1) maintenance of a valid license to practice medicine and adherence to guidelines of the Member Board calling for professionalism and honorable personal conduct; (2) regular participation in educational and self-assessment activities that meet specialty-specific standards set by each Member Board; (3) successful completion of an examination; and (4) evaluation of the care provided to patients, and identification and application of strategies to improve that care. (ABMS Br. at 2-3, Dkt. No. 31; see also Compl. ¶ 34, Dkt. No. 1.)

         In November 2009 and subsequently, ABMS and several Member Boards obtained the agreement of The Joint Commission, a private company that accredits more than 20, 000 health care organizations and hospitals, that hospitals must enforce requirements against physicians for renewal of their medical staff privileges. (Compl. ¶¶ 13-14, Dkt. No. 1.) To comply with The Joint Commission's requirements, many hospitals impose parts or all of the MOC program against physicians as a condition of having hospital medical staff privileges. (Id. ¶ 15.)

         The choice not to participate in the MOC program has affected physicians in the United States, including members of AAPS. (Id. ¶¶ 50-51.) For example, in 2011, an AAPS member identified as “J.E.” was excluded from the medical staff of SMC, a hospital in New Jersey, because he chose not to participate in the MOC program. (Id. ¶¶ 29, 32, 43-44.) J.E. had been on the SMC medical staff for twenty-nine years and had been certified by a Member Board. (Id. ¶¶ 30-31.) He was told by SMC in 2011, however, that he would have to comply with recertification requirements under the MOC program to remain on its medical staff. (Id. ¶ 32.) Due to the expense and time required for recertification, J.E. chose not to comply. (See id. ¶¶ 34-43.) As a result, he was not allowed to remain on SMC's medical staff, and patients cannot be treated by J.E. when taken by emergency to SMC. (Id. ¶¶ 44-45.)

         AAPS has filed a two-count Complaint alleging (1) restraint of trade in violation of Section 1 of the Sherman Act, and (2) negligent misrepresentation. With respect to Count I, AAPS alleges that ABMS has restrained trade in connection with the MOC program. (Id. ¶¶ 57- 70.) In particular, AAPS claims that ABMS has restrained trade by: (a) seeking and obtaining agreements with the Member Boards to impose formal recertification requirements as part of the MOC program, (b) seeking and obtaining agreement by The Joint Commission to require enforcement by hospitals of formal recertification requirements, (c) inducing health insurance companies and plans to exclude physicians who do not purchase and comply with the MOC program, (d) requiring recertification by younger physicians while exempting older physicians, and (e) acting in concert with the Member Boards to seek an endorsement by the Federation of State Medical Boards of “maintenance of licensure” to impose the MOC program as a requirement of licensure by state medical boards. (Id. ¶¶ 57-62.) AAPS argues that the relevant service market consists of medical care provided by physicians to hospitalized patients and that the relevant geographic market is nationwide. (Id. ¶¶ 27-28.) According to AAPS, ABMS's actions have no legitimate purpose, reduce the supply of physicians available to treat patients, and limit patients' access to their own physicians. (Id. ¶¶ 63-66.)

         With respect to Count II, AAPS alleges that certain statements of ABMS are false and have deceived physicians and the public. (Id. ¶¶ 78-91.) The statements at issue consist of: (a) a statement on an ABMS website that doctors who participate in the MOC program “are voluntarily part of a rigorous process that continually assesses and enhances their medical knowledge, judgment, professionalism, clinical techniques, and communication skills;” (b) a statement on an ABMS website that “you can count on quality patient care” from doctors who are Board Certified; (c) ABMS's use of phrases such as “Not Meeting MOC Requirements” to describe physicians who do not participate in the MOC program, and (d) inviting patients to search on the names of individual physicians to see if they have complied with the MOC program. (Id. ¶¶ 78-81, 82.) AAPS argues that ABMS's statements “create the false impression that [the MOC program] is indicative of the medical skills of physicians, and that as a result physicians who decline to purchase [ABMS's] product are likely to be less competent” and “falsely imply[] that physicians who decline to participate or who do not fully complete the program are somehow less competent physicians.” (Id. ¶¶ 81-82.)


         Federal Rule of Civil Procedure 8(a) requires that a complaint contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a). To survive a Rule 12(b)(6) motion, a complaint must “state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 547 (2007). While the Complaint need not include detailed factual allegations, there “must be enough to raise a right to relief above the speculative level.” Id. at 555. The plaintiff must “plead[] factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Where a complaint pleads facts that are merely consistent with a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief.” McReynolds v. Merrill Lynch & Co., 694 F.3d 873, 885 (7th Cir. 2012) (internal citations and quotation marks omitted) (quoting Ashcroft v. Iqbal, 556 U.S. 662 (2009)). In addition, “although the complaint's factual allegations are accepted as true at the pleading stage, allegations in the form of legal conclusions are insufficient to survive a Rule 12(b)(6) motion.” Id. Furthermore, “a party may plead itself out of court by either including factual allegations that establish an impenetrable defense to its claims or by attaching exhibits that establish the same.” Massey v. Merrill Lynch & Co., 464 F.3d 642, 650 (7th Cir. 2006).

         I. Count I - Restraint of Trade in Violation of Section 1 of the Sherman Act

         Section 1 of the Sherman Act states, “[e]very contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal.” 15 U.S.C. § 1. To state a claim for a Section 1 violation, AAPS must plead facts plausibly suggesting: (1) a contract, combination, or conspiracy (i.e., an agreement); (2) a resultant unreasonable restraint of trade in a relevant market; and (3) an accompanying injury. Agnew v. Nat'l Collegiate Athletic Ass'n, 683 F.3d 328, 335 (7th Cir. 2012). The Court's analysis focuses on the second and third factors.

         A. A Resultant Unreasonable Restraint of Trade in ...

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