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Rejecting Constitutional Challenges, Federal Court Rules In Favor of Medical Institutions And Dismisses Medical Residents' Antitrust Claims

August 13, 2004

WASHINGTON, D.C., August 13, 2004 - The United States District Court for the District of Columbia ruled yesterday that a federal statute, enacted in April to protect the nation's graduate medical education system, barred claims of a nationwide antitrust conspiracy to depress the  compensation of medical residents.  On this basis, Judge Paul L. Friedman dismissed a putative class action antitrust suit brought against the nation's leading medical schools and teaching hospitals. 

The linchpin of the alleged antitrust conspiracy was the Match, a decades-old system that ensures that graduating medical students and medical residency programs are matched according to their respective preferences.  The Match is an integral part of the nation's graduate medical education system, the preeminent training system for young doctors in the world. 

Because the mere pendency of the lawsuit threatened both the Match and the graduate medical education system, Congress passed legislation in April to protect these vital resources.  As the Court noted, the legislation was intended to "secure the continuation of the Match itself, which Congress found is an efficient, valuable placement system, and to protect the financial resources of teaching hospitals and programs from costs of antitrust litigation that concern the Match program."  The legislation confirms that participation in the Match is lawful and bars evidence of Match-related conduct in support of an antitrust claim. 

In its 30-page opinion, the Court squarely rejected plaintiffs' attempts to suggest that their complaint could be read to state a claim even without the Match-related allegations, noting that the complaint alleged "a single overarching integrated antitrust conspiracy with the Match as its centerpiece."  The Court also rejected plaintiffs' arguments that their claims were exempt from the statute and their challenges to the constitutionality of the statute.

Yesterday's ruling represents a significant victory for the medical institutions and the successful culmination of an integrated legislative and litigation strategy led by Covington & Burling.  Representing a group of seven of the twenty nine institutions, Covington played a leadership role throughout the defense of the case, including with regard to the strategy that led Congress to enact the Match legislation.  Covington also took the lead in drafting the briefs that led to the dismissal of the complaint.

Covington's clients included Barnes-Jewish Hospital, Emory University, The George Washington University, Stanford Hospital & Clinics, Strong Memorial Hospital of the University of Rochester, Washington University Medical Center, and Tulane University.  The Covington team was led by partners Gregg H. Levy, James R. Atwood, John E. Hall, and Eric H. Holder and included associates Derek Ludwin, Heidi C. Doerhoff, and Brent F. Powell.  A copy of the opinion is available at http://www.dcd.uscourts.gov/02-873a.pdf.

 

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