United States District Court, D. New Jersey
ALBERT TALONE, D.O., CRAIG WAX, D.O., RICHARD RENZA, D.O., ROY STOLLER, D.O., individually and on behalf of all others similarly situated, Plaintiffs,
THE AMERICAN OSTEOPATHIC ASSOCIATION, Defendant.
GREENBERG, DUANE MORRIS LLP, SETH A. GOLDBERG, DUANE MORRIS
LLP On behalf of Plaintiffs
R. BIERIG, STEVEN J. HOROWITZ, NEIL G. NANDI, SIDLEY AUSTIN
LLP JEFFREY WARREN LORELL SAIBER LLC JEFFREY S. SOOS JENNIFER
ROSE O'CONNOR SAIBER LLC On behalf of Defendant
L. HILLMAN, U.S.D.J.
case concerns antitrust and fraud claims brought by
osteopathic physicians against the American Osteopathic
Association for its alleged unlawful tying of board
certification and professional association membership.
Presently before the Court is the motion of the American
Osteopathic Association to dismiss Plaintiffs' claims, or
in the alternative, transfer venue to the Northern District
of Illinois. For the reasons expressed below, Defendant's
motion will be denied in its entirety.
are osteopathic physicians (“DOs”) who have been
board certified as medical specialists by the American
Osteopathic Association (“AOA”), and who have
also purchased membership in the AOA. Approximately 48, 000
practicing DOs are members of the AOA, and approximately 32,
000 of those DOs are AOA board certified. The AOA has
notified Plaintiffs and AOA board certified DOs that their
board certification will be invalidated and cancelled unless
they purchase annual membership in the AOA. Plaintiffs claim
that in order to avoid the loss of their board certification,
Plaintiffs and AOA board certified DOs have been forced to
purchase AOA membership even though it serves no purpose with
respect to, and has no actual connection with, AOA board
certification or their practice as physicians.
further claim that the AOA's unlawful tying arrangement
has reduced the number of DOs willing to purchase membership
in other professional physician associations and has thereby
foreclosed competition in the market for membership in
professional physician associations (the “Association
Membership Market”). Plaintiffs claim that the
reduction in purchases by AOA board certified DOs of non-AOA
professional physician association memberships has erected
barriers to entry, and thus has prevented potential rivals to
the AOA from entering the Association Membership Market. In
addition, Plaintiffs claim that the AOA's unlawful tying
arrangement has raised the costs faced by its existing
rivals, as well as softened price competition between the AOA
and its existing rivals.
reducing competition in the Association Membership Market
through its unlawful tying arrangement, Plaintiffs claim that
the AOA has been able to increase the price of its annual
membership dues to almost double the price that its
competitors in the Association Membership Market charge for
membership in their associations, and there has been a
corresponding reduction in competitive
offerings. Plaintiffs further claim that there is no
evidence that the AOA's tying arrangement enhances the
efficiency of its product offerings, meaning there is no
pro-competitive business justification for its unlawful tying
addition to the tying arrangement, Plaintiffs claim that DOs
who received their AOA board certification prior to 2000 were
promised by the AOA that it was a “lifetime”
certification that would never expire, and that promise was
renewed in 2013, when the AOA initiated its Osteopathic
Continuous Certification program (“OCC”).
Plaintiffs claim, however, that the AOA knowingly concealed
that lifetime certification holders would also have to
purchase annual membership in the AOA to avoid the
invalidation and cancellation of their prior
on the foregoing, Plaintiffs, on their own behalf and on
behalf of the class and sub-classes, have brought the present
action to obtain injunctive and monetary relief against the
AOA for this alleged anticompetitive tying arrangement,
alleging that it violates Section 1 of the Sherman Act, 15
U.S.C. § 1 (“Section 1”) and Section 3 of
the New Jersey Antitrust Act (“NJAA”), N.J.S.A.
56:9-3 (“Section 3”), and the New Jersey Consumer
Fraud Act (“NJCFA”) N.J.S.A. 56:8-1, et. seq.
has moved to dismiss Plaintiffs' claims, or in the
alternative, transfer venue to the Northern District of
Illinois. Plaintiffs have opposed the AOA's motion on
Subject matter jurisdiction
Court has jurisdiction over Plaintiffs' federal claims
under 28 U.S.C. § 1331, and supplemental jurisdiction
over Plaintiffs' state law claims under 28 U.S.C. §
Standard for Motion to Dismiss
considering a motion to dismiss a complaint for failure to
state a claim upon which relief can be granted pursuant to
Federal Rule of Civil Procedure 12(b)(6), a court must accept
all well-pleaded allegations in the complaint as true and
view them in the light most favorable to the plaintiff.
Evancho v. Fisher, 423 F.3d 347, 351 (3d Cir. 2005).
It is well settled that a pleading is sufficient if it
contains “a short and plain statement of the claim
showing that the pleader is entitled to relief.”
Fed.R.Civ.P. 8(a)(2). Under the liberal federal pleading
rules, it is not necessary to plead evidence, and it is not
necessary to plead all the facts that serve as a basis for
the claim. Bogosian v. Gulf Oil Corp., 562 F.2d 434,
446 (3d Cir. 1977). However, “[a]lthough the Federal
Rules of Civil Procedure do not require a claimant to set
forth an intricately detailed description of the asserted
basis for relief, they do require that the pleadings give
defendant fair notice of what the plaintiff's claim is
and the grounds upon which it rests.” Baldwin Cnty.
Welcome Ctr. v. Brown, 466 U.S. 147, 149-50 n.3 (1984)
(quotation and citation omitted).
district court, in weighing a motion to dismiss, asks
“‘not whether a plaintiff will ultimately prevail
but whether the claimant is entitled to offer evidence to
support the claim.'” Bell Atlantic v.
Twombly, 550 U.S. 544, 563 n.8 (2007) (quoting
Scheuer v. Rhoades, 416 U.S. 232, 236 (1974));
see also Ashcroft v. Iqbal, 556 U.S. 662, 684 (2009)
(“Our decision in Twombly expounded the
pleading standard for ‘all civil actions' . . .
.”); Fowler v. UPMC Shadyside, 578 F.3d 203,
210 (3d Cir. 2009) (“Iqbal . . . provides the
final nail-in-the-coffin for the ‘no set of facts'
standard that applied to federal complaints before
the Twombly/Iqbal standard, the Third Circuit has
instructed a two-part analysis in reviewing a complaint under
Rule 12(b)(6). First, the factual and legal elements of a
claim should be separated; a district court must accept all
of the complaint's well-pleaded facts as true, but may
disregard any legal conclusions. Fowler, 578 F.3d at
210 (citing Iqbal, 129 S.Ct. at 1950). Second, a
district court must then determine whether the facts alleged
in the complaint are sufficient to show that the plaintiff
has a “‘plausible claim for relief.'”
Id. (quoting Iqbal, 129 S.Ct. at 1950). A
complaint must do more than allege the plaintiff's
entitlement to relief. Id.; see also Phillips v.
Cnty. of Allegheny, 515 F.3d 224, 234 (3d Cir. 2008)
(stating that the “Supreme Court's Twombly
formulation of the pleading standard can be summed up thus:
‘stating . . . a claim requires a complaint with enough
factual matter (taken as true) to suggest' the required
element. This ‘does not impose a probability
requirement at the pleading stage, ' but instead
‘simply calls for enough facts to raise a reasonable
expectation that discovery will reveal evidence of' the
necessary element”). A court need not credit either
“bald assertions” or “legal
conclusions” in a complaint when deciding a motion to
dismiss. In re Burlington Coat Factory Sec. Litig.,
114 F.3d 1410, 1429-30 (3d Cir. 1997). The defendant bears
the burden of showing that no claim has been presented.
Hedges v. U.S., 404 F.3d 744, 750 (3d Cir. 2005)
(citing Kehr Packages, Inc. v. Fidelcor, Inc., 926
F.2d 1406, 1409 (3d Cir. 1991)).
in reviewing a Rule 12(b)(6) motion must only consider the
facts alleged in the pleadings, the documents attached
thereto as exhibits, and matters of judicial notice. S.
Cross Overseas Agencies, Inc. v. Kwong Shipping Grp.
Ltd., 181 F.3d 410, 426 (3d Cir. 1999). A court may
consider, however, “an undisputedly authentic document
that a defendant attaches as an exhibit to a motion to
dismiss if the plaintiff's claims are based on the
document.” Pension Benefit Guar. Corp. v. White
Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir.
1993). If any other matters outside the pleadings are
presented to the court, and the court does not exclude those
matters, a Rule 12(b)(6) motion will be treated as a summary
judgment motion pursuant to Rule 56. Fed.R.Civ.P. 12(b).
addressing the viability of Plaintiffs' antitrust and
fraud claims, some background information on the AOA board
certification process explained in Plaintiffs' complaint