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Federal Appeals Court Affirms Dismissal of Medical Residents' Antitrust Litigation

June 5, 2006

WASHINGTON, D.C., June 5, 2006  -  The United States Court of Appeals for the District of Columbia Circuit affirmed today that a federal statute, enacted in April 2004 to protect the nation's graduate medical education system, barred allegations of a nationwide antitrust conspiracy to depress the compensation of medical residents.  Based on the statute, District Judge Paul L. Friedman had dismissed a putative class action antitrust suit brought against the nation's leading medical schools and teaching hospitals.  Today's decision by the Court of Appeals unanimously affirmed Judge Friedman's rulings.

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.  In response to plaintiffs' suit, Congress passed a statute stating that participation in the Match was lawful under the antitrust laws and barring evidence of Match-related conduct in support of any antitrust claim.

In today's opinion, the Court of Appeals held that plaintiffs' complaint "falls squarely within both the exemption and the bar" of the statute, and that "[i]t is hard to imagine a more precise fit between the language of a statute and a lawsuit."  Accordingly, it affirmed the district court's dismissal of the complaint with prejudice, and refused to permit an amendment to the complaint, finding that any proposed amendment would not be "consistent with the challenged pleading."  The Court also rejected plaintiffs' challenges to the constitutionality of the statute.

The D.C. Circuit's ruling represents the successful culmination of an integrated legislative and litigation strategy led by Covington & Burling.  Representing a group of seven of the twenty nine defendant institutions, Covington played a lead role throughout the defense of the case.  Jim Atwood, co-chair of the firm's Antitrust Practice Group, argued the appeal for all defendants before the D.C. Circuit.  Also on the Covington team were partners Gregg H. Levy, John E. Hall, and Eric H. Holder and associates Derek Ludwin and Brent F. Powell.

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