A Washington federal judge dismissed a highly publicized class-action antitrust lawsuit filed on behalf of 200,000 current and former resident physicians, but the development offers little comfort to physicians trying to obtain antitrust protection for collective bargaining, a physician union organizer and health lawyer said.
Citing the Pension Funding Equity Act signed by President Bush in April, U.S. District Judge Paul Friedman dismissed the claims brought by residents in a May 2000 lawsuit filed against the National Resident Matching Program, some top medical and hospital associations, and nearly 30 teaching hospitals and medical schools.
The resident physicians alleged that the matching program, its sponsors and the hospitals conspired to fix prices to depress wages for medical residents in violation of the Sherman Act, which prohibits unfair restraints of trade. In his 30-page opinion, Friedman rejected the residents' antitrust claims. In February, the American Hospital Association, the American Medical Association, two teaching hospitals and two medical specialty associations were dropped from the litigation. The Association of American Medical Colleges and 28 teaching hospitals remained as defendants.
Friedman ruled that the Pension Funding Equity Act conferred antitrust immunity on graduate medical-resident matching programs retrospectively, effectively nullifying the residents' claims. It was the first federal judicial ruling affirming the new law.
"I think this is the nail in the coffin," said Chicago antitrust lawyer Thomas Campbell of Gardner, Carton & Douglas, who defended the matching program in the case. Campbell said the residents can request another hearing, appeal Friedman's decision, or submit a redrafted complaint to try to get around the antitrust exemption.
Chicago lawyer Sherman Marek, who represents the lead plaintiff, physician Paul Jung, said the case is far from over. While Marek conceded that the residents lost this round, he said, "The plaintiff residents will certainly continue their fight for fair wages and work hours." He pointed out that Friedman's ruling left open the possibility of filing a new claim and said his clients are also considering a possible appeal.
Physicians seeking a similar antitrust exemption to enable them to bargain collectively are unlikely to find solace in Friedman's ruling, observers said.
Barry Liebowitz, president of the New York-based Doctors Council, which represents 17,000 unionized physicians, said last month's report on the Federal Trade Commission and U.S. Justice Department joint hearings on competition in healthcare dimmed hopes for similar immunity for collective bargaining.
"We regret it, but it's unlikely that the Bush administration would overrule two of its agencies that have opposed collective bargaining by independent physicians," Liebowitz said.
Chicago healthcare antitrust lawyer David Marx of the firm McDermott, Will & Emery said the Pension Funding Equity Act is the most recent example of specialized industry legislation conferring antitrust immunity. The AHA, the AMA and the AAMC lobbied congressional leaders for the law's passage.
"But I think the law is drafted narrowly enough to prevent its use by physicians to collectively negotiate agreements with payers," Marx said. "While the implications of this may be wide-ranging, I think its practical effect is narrow."