Petition for Writ of Certiorari — Jung v. Association of American Medical Colleges (No. 06-567)

reme Court, U.S.

Sup FILED

l) 06-567 0CT 23 2006

No.

Jn the Supreme Court of the United States

PAUL JUNG, M.D., ET AL.

Petitioners,

v.

ASSOCIATION OF AMERICAN MEDICAL COLLEGES, £7 AL.

Respondents.

On Petition for a Writ of Certiorari to the

United States Court of Appeals

for the District of Columbia Circuit

PETITION FOR A WRIT OF CERTIORARI

SHERMAN MAREK MICHAEL FREED*

Attorney at Law JEAN JANES

1055 W. Bryn Mawr Ave. Much Shelist Freed

Chicago, IL 60660 Denenberg Ament &

(312) 805-0244 Rubenstein, P.C.

19] N. Wacker Dr., Ste. 1800

C. BARRY MONTGOMERY Chicago, IL 60606

DEBORAH H. BORNSTEIN (312) 521-2000

Williams Montgomery

& John, Lid.

20 N. Wacker Dr., Ste. 2100

Chicago, IL 60606

(312) 443-3200

* Counsel of Record

Counsel for Petitioners

QUESTIONS PRESENTED

Whether the D.C. Circuit’s decision in this case

conflicts with this Court’s precedents on important

federal questions of statutory interpretation and

separation of powers by holding that the qualified

antitrust exemption recently enacted in Section

207(b) of the Pension Funding Equity Act of 2004,

15 U.S.C. § 37b, extinguishes the petitioners’ claim

that employers of medical residents conspire to fix,

depress, standardize and stabilize wages nationwide

in violation of Section 1 of the Sherman Act, 15

U.S.C. § 1?

Whether all federal district and circuit courts should

apply the same standard for dismissing complaints

with prejudice, specifically the standard established

by this Court in Foman v. Davis, 371 U.S. 178, 182

(1962), or whether courts in the D.C. and Ninth

Circuits may apply a conflicting standard that permits

rejecting amended complaints that would be allowed

in all other circuits? - —

Whether all federal district and circuit courts should

apply the same standard for post-judgment leave to

amend a complaint ‘where it has been-dismissed on

the pleadings, specifically the standard established by

this Court in Foman, 317 U.S. at 182, or whether

courts in the D.C., Seventh, Eighth, and Ninth

Circuits may apply a conflicting standard that permits

rejecting amended complaints that would be allowed

in all other circuits?

LIST OF PARTIES

Petitioners Paul Jung, M.D.; Denise Greene, M.D.;

and Luis Llerena, M.D. were the plaintiffs in the district

court and the appellants in the Court of Appeals.

Respondents were defendants in the district court and

the appellees in the Court of Appeals, and consist of

Association of American Medical Colleges; National

Resident Matching Program; American Medical Association;

Accreditation Council for Graduate Medical Education;

Medstar-Georgetown Hospital; The George Washington

University; Medstar Health, Inc.; Administrators of the

Tulane Educational Fund; Barnes-Jewish Hospital; Baylor

College of Medicine; Beth Israel Deaconess Medical Center,

Inc.; Beth Israel Medical Center; Boston Medical Center

Corp.; Cedars-Sinai Medical Center; The Cleveland Clinic

Foundation; Duke University Health System, Inc.; Emory

University; Henry Ford Health System; The Massachusetts

General Hospital; The McGaw Medical Center of

Northwestern University, The Mount Sinai School of

Medicine of the City University of New York; The New

York and Presbyterian Hospital; Rhode Island Hospital;

Rush-Presbyterian-St. Luke’s Medical Center; St. Louis

University; Stanford Hospital and Clinics; Strong Memorial

Hospital of the University of Rochester, Thomas Jefferson

University Hospital, Inc.; University Hospitals of Cleveland,

Inc.; William Beaumont Hospital; and Yale-New Haven

Hospital, Inc.

iil

TABLE OF CONTENTS

QUESTIONS PRESENTED...cecscsssccsceccsscsessccsenessesnssceseenee

EUT OF PARTIR co i

TABLE OF AUTHORITIES ccc ieee v

PETITION FOR WRIT OF CERTIORARI oossecscsscscsesoe

COMMONS SHOW re

WURIONCTION ad

STATUTORY PROVISIONS INVOLVED. ..escccocssscocesseee

STATEMENT OF THE CASE.0cscssssssssssssscsssssssseseeeseee 2

REASONS FOR GRANTING THE PETITION ...sccsscsooseee 7

A. The D.C. Circuit’s Decision Conflicts With

This Court’s Decisions On Important

Questions Of Statutory Interpretation And

SSPAPatIGN OT POWEES .oieccccccaconcsssenrestovsescoseosorses 7

1. The Lower Court Decisions Here

Conflict With This Court’s Precedents

On Statutory Interpretation..................... 9

2. The Lower Court Decisions Here

Conflict With This Court’s Precedents

On Separation Of Powers .................00+- 10

B. The Lower Courts’ Decisions Demonstrate

A Conflict Among The Circuits Regarding

The Proper Standard For Dismissal With

PINGS isis eae esiiaileaieied 13

C. The Lower Courts’ Decisions Demonstrate

A Conflict Among The Circuits Regarding

The Proper Standard For Post-Judgment

Leave To Amend After Dismissal On The

TABLE OF AUTHORITIES

CASES

Acito v. IMCERA Group, Inc.,

STE SOST GEC TOFS) sissscvisnsiscscasisvsssoncivsvivcestincs

Adamson v. Lockheed Martin Idaho Technologies

Co.,

20 Fed. Appx. 715 (9th Cir. 2001)...........eeseseeeeees

United States ex rel. Adrian v. Regents of University

of California,

RE ee OO LOU CAE: ZOOAD sesisicsensornceccsssovssisesesass

Alston v. Parker,

963 0.38 20 Gh Ce 90068.

American Tobacco Co. v. United States,

SUG HG ea

Andrx Pharmaceuticals, Inc. v. Biovail Corp., Int'l.,

ZOE SO TIF (OE, Cw ZOO Pais costccricsouscostesslesjunicov

Anixter v. Home-Stake Prod. Co..,

OFT P28 1535 COR Ca: NISL) civivsiessivics Wisicinveseas

Asher v. Harrington,

AGL P28 WOOT" Cis: 1979) oo iihsccisescecnss

Axel Johnson, Ine. v. Arthur Andersen & Co.,

OF 3d 76 (6 Ca: 1999)

Barry Aviation Inc. v. Land O'Lakes Municipal

Airport Comm'n,

FFL Pte OOk CPE GAL. LOIS): crsvsicsstbarepoanctovesegsesisirns

Bauchman for Bauchman v. West High Sch.,

SET Oe PAE COE Gale FGI vperetsiccntistnessarsrpesincnaees

Belizan v. Hershon, i

Fe FT es GAEs I Rcrtsiretsctavnniesvevcvesecivecinvets 18

Bonanno v. Thomas,

S09. F.20 320: (9 Cir. 1962) ......0scciecerssovsesacseseseees 16, 18

Bradley v. Chiron Corp.,

BGP .SG USAT COG: Coe DIGG) ivcicescncevecsevisseomssevsscters 16

Bressner v. Ambroziak,

BIE ATO CTE he DIED was eniciasinrtictcovernerestaseesereie 24

Bridgeport Music, Inc. v. Dimension Films,

QED FIG TIE LOE Gh FOODS ses vesteevistaeiers sreseseincessnsan’ 15

Burgess v. Sailors’ Union of Pacific,

63 Fed. Appx. 337 (9th Cir. 2003)............cscsseseeeeseees 24

Capitol Indemnity Corp. v. Russellville Steel Co., Inc.,

Ee OF Cee BO iis scivincovicdosdconncenoentetvnvionss 21

Chem v. New York Life Ins. Co.,

168 F.3d 498, 1999 WL 97289 (9th Cir. Feb. 25,

SS crtccritcsieiseantudciniciedbaeaicitinviena nabs becees 17

Circuit City Stores, Inc. v. Mantor,

EF FS FO CE GAs RAE perceiving sacerewesicnteeenions 21

Clark v. Arizona,

Fe es et A igs cncvacacbcovicsosiipichoedaiicscstecstannicsieisio’ 9

Coliseum Square Ass'n, Inc. v. Jackson,

__F.3d__, 2006 WL 2664455 (Sth Cir. Sept. 18,

Cupit v. U.S.,

~ 964 F. Supp. 1104 (W.D. La. 1997)..................cccceeseee 19

Vii

Cureton v. National Collegiate Athletic Ass'n,

AIRE PE WEF Le Cie BOON Pricinecnsseresensnisasennsnccbenbcnigies 23

Czosek v. O’Mara,

DET Nia Bt CEO PING iain sssncsschidscaceuan caseecenitenbohamicdeihbinans 14

Doe v. Cassel,

SOS F.Se FOG (BG Cit. ZOOS) oie sesscccinecseecsessconsescossnsvis 15

Dolan v. U.S. Postal Service,

PEO ALE FOr Csi cess tatshecctneleacatianee 9

Edward J. DeBartolo Corp. v. Florida Gulf Coast

Bldg. & Constr. Trades Council,

Me A eke Ee CE iss sinicecedictign thcova shia conastscicamceasneoods 10

Ingle ex rel. Estate of Ingle v. Yelton,

ASD FSG TFS CO Car ZOU GD oo vvicccsnsonicinciantuecerveessomontes 20

Firestone v. Firestone,

76 F.3d 1205 (D.C. Cir. 1996)..........cccccscrseceoes 15, 18, 23

Foman v. Davis,

Ee RN FE 1 AIA Vicsvwneivudesvnclnisiceunaeoshebeosbaseiasies Passim

Geier v. American Honda Motor Co., Inc.,

SE te oii cincsro ada n capcisicetoiscashecabaaale 9

Government Computer Sales Inc., v. Dell Mktg.,

No. 05-35936, 2006 WL 2467913, Slip. Op. (9th ;

Ce. DEE ZB, DOOR ivnwicvivtncccictimateiennpcvcinheore eeveee 16-17

Green v. Peters,

No. 71 C 1403, 1997 WL 769458 (N.D. Ill., Dec.

Si RON siercaccc a caussaseactel eubivanteesiipeaeinlatco need 11

Greenidge v. Allstate Ins. Co.,

GAGE SG SSG C26 Cie. FOG) nna icsccvscccscvtnscovesopnesnees ins 25

Vili

Grogan v. Health. .* :er of County of Riverside,

221 F.3d 1348, 2000 WL 674735 (9th Cir. May

Tes AHPPEE Ginceskcskitteiisss Unsrisiulatiaiebsdorinvchanenivicituaneenn 16

Hanna v. Plumer,

SOO Wich Ge Es scckniSacicriccinceedckarsunrecadoosegtivateei 13, 26

Heisen v. Pacific Coast Bldg. Prod., Inc.,

26 F.3d 130, 1994 WL 250036 (9th Cir. June 9,

Intel Corp. v. Advanced Micro Devices, Inc.,

542 U.S. 241 (2004)......... one verpniseesshstatucsdnostavetabertsis 2,9

Intera Corp. v. Henderson,

425 F356 GOS COs Cir. 2005S) os vcciccccnsssscoscsscnosonsoontesadis 20

Interbank Funding Corp. ‘Sec. Litig.,

432 FSO. 26 SUID, ZOO) csssvesesnscconnipssnsnsvesees 18

Jarrell v. U.S. Postal Serv.,

TOS. Fae TOO A Ci BIR i vscksevtesnciccccctecingins 18

Judge v. City of Lowell,

fig me Er get fm aL. 5 Speeemctemeprenapr rey erun 23

Jung v. Association of Am. Med. Colleges,

No. 04-7023, 2006 WL 1582667 (D.C. Cir.

Pane 1, FOG CO fic eek ec ideas Passim

Jung v. Association of Am. Med. Colleges,

300 F. Supp. 2d 199 (D.D.C. 2004) ("Jung I").... Passim

Jung v. Association of Am. Med. Colleges,

339 F. Supp. 2d 26 (D.D.C. 2004) ("Jung II").....1, 5, 10

Jung v. Association of Am. Med. Colleges,

226 F.R.D. 7 (D.D.C. 2005) ("Jung ITI") ............ eee 1,6

ix

Kapelanski v. Johnson,

FO Fe SEO CIE Colle DUIS) ciccscctsccnscncsscocavovenonessoovenss 21

In re Kellogg,

POE Fake EE VOLE CAT. 1999) ossceseceeivsecesccecsvonesseoyeees 21

Laber v. Harvey,

438 F.3d 404 (4th-Cir. 2006) .0........ceeseeceseeesseeseeeeeeee 22

Lebron-Rios v. U.S. Marshal Service,

EMA WAT CIB CAE, BOWS) snstetesdccosascesesevscestassarsonveseovers 15

Max’s Seafood Café ex rel. Lou-Ann, Inc. v.

Quinteros,

Ee Ee CE CAE, FPO irvckaccsvevereeievsrosersovnsvesevocssvs 21

Marks 3 Zet-Ernst Marks GmBh & Co. KG v.

- Prestek, Inc.,

OF CAME OPE, CI) vsiveriveccsnindsascpseovesersaccesvassesess 20

Messina v. Krakower,

DE WP FOP CPR COM, DOOD) ccnevessecencscerevaveccesteseseceres 20

Miller v. French, -

DIO NIMs SIT (OIG) oxesecnvoscnenciesesssvesceeseosees 11, 14, 20-21

Minter v. Prime Equipment Co.,

5} F390 F196 CLOG Cir, 2006)... cesccecssvsseescoseseccosserees 25

Morse v. McWhorter, |

BOF e LONG AT. 2OUE) cncvvciovesssicvesasvecesscesevasseeses 22

Munafo v. Metropolitan Transp. Auth.,

ee ie BN Dane civcecaccontocnsucevecdsvecsecensseseees 20

Murray v. Albany County Bd. of County Comm’rs,

211 F.3d 1278, 2000 WL 472842 (10th Cir. Apr.

a ids i tess’ : lay catabaniskgekesieesvinissseicsusecncengnoesoetses 19

New v. Armour Pharmaceutical Co.,

GFF SE TH re Ca, FE tii sistiaannn 17

In re Office Prod. Co. Sec. Litig.,

251 F. Sage. 28 SE CD... 20GB) cicssccseseresnrsesssenecsoss 18

Ostrzenski v. Seigel,

OT FP Ce CANCE, TIFF) evcsesnscscensavosongestsinisiincnesse 15

Parnes v. Gateway 2000, Inc.,

B22 FD Sao CO CE DOG FF iccevcrscsmrtovesceckvornsisonesceiees 24

Plaut v. Spendthrift Farm, Inc.,

SEG BaF Cee Biases cicsscnseienestevansishanovinoeseababibietnees 11

Rae v. Union Bank,

TED EAE COE, 1 FGD cciccesicscnierssivintcersensipencens 16

Reddy v. Litton Indus., Inc.,

FEZ E20 ZOE Cae, BGG) ncecicscecsrsnnicsccigueinccienstes 16

Roberts v. Mayor and Burgesses of London Borough

of Brent,

TO Fed. Apon..Gi5 (56 Car. 2003)... -.cccnicsesecsisciecsesseseses 19

Robertson v. Seattle Audubon Soc.,

SS LEB AO IGE is cacinscidcccseenecdiccinibeientacnnin 10-11

Rosenzweig v. Azurix Corp.,

32 PNM Oe OD) ... 22

Sanders v. Clemco Indus.,

SES FO 2 Ce RAN. FED iicatcntssenssetncpasvaccacinttocsoines 24

Schiavo ex rel. Schindler v. Schiavo,

MG F 3d 4270 CE Cir. BOOS) assis soon 11

Schlup v. Delo,

$43 US, JOR Ie a cn ce ce 19

XI

Schreiber Distrib. Co. v. Serv-Well Furniture Co., Inc.,

806 F.2d 1393 (9th Cir. 1986) ..ccecccccccesccsssseessecesseesseen 15

Servants of Paraclete v. Does, :

204 F.3d 1005 (10th Cir. 2000) .............ccccccccsssessecceeres 21

Sheldon v. Vermonty, :

Be BG EEE ESO CE: ZOE D vvssvriniivernccsncincccacossscosncies 15

Spanish Broadcasting System of Fla., Inc. v. Clear

Channel Communications, Inc.,

FIG ESO FOS CEE CAE, 2OOF) oo ccvsscscrccscscsovcssescese 15, 22

Surowitz v. Hilton Hotels Corp.,

Re ee Pe ee avitch sinsncsnisecteonrevslontvieckowiaiceneiaceatia 14

In re Taxable Municipal Bond Sec. Litig.,

796 F. Supp. 954 (E.D. La. 1992) ............ccccssecsosseooses 12

Twombly v. Bell Atlantic Corp.,

MT PU Pe Ae Me Pi ccospatcieboasaierckeisvsncibelesdiegeatthbooneneitl 4

Union Labor Life Ins. Co. v. Pireno;

BAIT AED CFI oi vccscrs ks ossnsssipccensnskescectageincssrcovomandiont

United States v. F. & M. Schaefer Brewing Co.,

FOOT ais Me EPO ites i tentviacspepinemiveseinsveiudecstatonns 13, 26

United States v. Klein,

80 U.S. 128 (1871).............. itaeidiguedasahecss losis 11-13

United States v. University of San Francisco,

No. C 04-03440, 2006 WL 335316 (N.D. Cal.

I A, ID waitaeitnan tadnicesce Keicanjestincininhc betamensaipteannataes 17

_Van Buskirk v. The New York Times Co.,

Fad OE ae ils Da isc sistsvicirscticapivvtaecarvnsitivedioes 15

xii

Weeks v. Bayer, ~

BAT SO 525 CO Cie OOD DY scsesssoscescssrcocesiivincenssssnsees 24

STATUTES

Bee Re Bi ccsinceaseisantjusussisusossbidenoleleipeenssisensianiantoey Passim

FD Rates A FTA cisskiuipealeacdupiants tabeeckotubsbacnsunsacenvacmvedsuecees ie es

Ak eR ROY sca svisccesshadanieistifadanasseaeaviausiolisnsinsitiadimipion 1

RULES sui :

BN, Was RAMs Fs WI) assist aoensscdeshaardigiciarstoessnssenieeseomovscwss 16

FO as GA Fe Fa otieitercintrnccnotrsscoesvndaventone 14, 22-23

Fed. R. Civ. P. 15... .sessessssssesssncserenssssssssessesesenceeresee Passim

Ps Fe RAG Fic OP sich ipciest chtitdepeiscnccvrcrevecnannesabeectanbs Passim

Fed. R. Civ. P. 60.......-scsscsccsesnssssorersesessessssnsesssosesssesesscancess 20

OTHER AUTHORITIES

Amy D. Ronner, Judicial Self-Demise: the Test of

When Congress Impermissibly Intrudes on

Judicial Power, 35 Ariz. L. Rev. 1037, 1048

Ce hcist ca isieas ss natvaskgnedinind nxamaeccebuaiiMieinestiows 12

C. Wright & A. Miller, Federal Practice &

Procedure § 1357 (36 68, ZOO) occcvvccesccsccecocbesssesesesnce 14

PETITION FOR WRIT OF CERTIORARI

—

Petitioners Paul Jung, M.D.; Denise Greene, M.D.;

and Luis Llerena, M.D. (“Resident Physicians” or

Residents”), respectfully request a writ of certiorari.

OPINIONS BELOW

Petitioners request review of the D.C. Circuit’s

decision entered on June 1, 2006 ( “Order”, Appendix 1-8),

unpublished but reported at 2006 WL 1582667 and 2006-1

Trade Cases 9 75,275. . The Order affirms decisions of the

District Court for the District of Columbia entered on August

12, 2004 (App. 9-43, “Jung IP’) and January 25, 2005 (App.

44-49, “Jung IIT’), which are reported at 226 F.R.D. 7 and

338 F. Supp. 2d 26. A prior and inconsistent decision by the

district court was entered on February 11, 2004 (App. 50-

155, “Jung I’), and is reported at 300 F. Supp. 2d 119.

JURISDICTION

The Resident Physicians timely filed petitions for

rehearing or rehearing en banc on June 30, 2006. Those

petitions were denied on July 25, 2006 (App. 156-58). This

Court’s jurisdiction is invoked under 28 U.S.C. § 1254(1).

STATUTORY PROVISIONS INVOLVED

Section 1 of the Sherman Act (“Section 1”), 15

U.S.C. § 1, provides: “Every 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 hereby declared illegal.”

Section 207(b) of the Pension Funding Equity Act of

2004 (“Match legislation”), 15 U.S.C. § 37b, enacted

subsequent to the filing of this action, provides in pertinent

part: “(2) Confirmation of Antitrust Status—It shall_not be

unlawful under the antitrust laws to sponsor, conduct or

participate in a graduate medical education residency

matching program, or to agree to sponsor, conduct or

participate in such a program [(“substantive provision”)].

Evidence of any of the conduct described in the preceding

sentence shall not be admissible in Federal court to support

any claim or action alleging a violation of the antitrust laws

[(“evidentiary provision”)]. (3) Applicability—-Nothing in

this section shall be construed to exempt from the antitrust

laws any agreement on the part of 2 or more graduate

medical education programs to fix the amount of the stipend

or other benefits received by students ite las in such

programs [(“savings clause’’)}-”

STATEMENT OF THE CASE

The D.C. Circuit affirmed dismissal of the Residents’

single-count antitrust complaint based on the Match

legislation, but that decision conflicts with this Court’s

precedents on important federal questions of statutory

interpretation and separation of powers. “(T]he statute [is]

the only sure expression of the will of Congress,” Intel Corp.

v. Advanced Micro Devices, Inc., 542 U.S. 241, 267 (2004)

(Scalia, J., concurring), and the statute reflects an intent to

preserve, not extinguish, the precise claim asserted here

alleging an agreement to fix resident physicians’ wages. The

courts below may have believed that Congress took aim at

this lawsuit but missed, and needed extra help in hitting its

target. But as expressed in the statute, the will of Congress

is to protect the practice by which employers collectively

assign potential residents to a single job and refuse to

compete for that resident (“Match”) only so long as it does

not further an agreement to fix wages, a matter that cannot

be decided at the pleadings stage. For the time being it must

be accepted as true, as the Residents allege, that the Match

helps demonstrate wage-fixing-and thus their claim falls

within the scope of the savings clause. This interpretation is

not unreasonable and does not make the Match legislation

pointless. Congress considers the Match important enough

to warrant relief from less serious antitrust claims that would

apply, such as_ horizontal market division and

monopolization, but not important enough to warrant relief

from the ultimate and most egregious antitrust violation of

price-fixing.

Setting aside whether the Residents’ complaint

should have been dismissed on the basis of the Match

legislation, it certainly should not have\been dismissed with

prejudice because the Residents can clearly plead an

alternative claim with no reference to the Match whatsoever.

See proposed Amended Complaint (App, 164-237). Indeed,

the Residents’ complaint would not have been dismissed

with prejudice in any circuit other than the D.C. or Ninth

circuits because an amended complaint would have satisfied

Federal Rule of Civil Procedure (“Rule”) 15(a). This Court

and the majority of Circuits hold that it is an abuse of

discretion to dismiss with prejudice where an amended claim

would meet the Rule 15(a) standard. The D.C. and Ninth

Circuits, however, hold that regardless of Rule 15(a) issues

it is not an abuse of discretion to dismiss with prejudice

where any amended factual allegations would be

“inconsistent” with those originally pleaded. Here, the

Residents’ original complaint alleged that employers

unlawfully agree to fix wages, and that this agreement may

be inferred from economic evidence of parallel wages and

conduct, and evidence of “plus factors” tending to exclude

the possibility of independent action. Those plus factors

include, but far exceed, participation in the Match. The

Residents’ proposed amended complaint alleged the same

unlawful agreement based on all of the plus factors originally

alleged except the Match. Even if this Court soon rules that

it is necessary to plead details regarding evidence from

which a Section 1 agreement may be inferred, see Twombly

v. Bell Atlantic Corp., 425 F.3d 99 (2d Cir.), cert. granted

126 S. Ct. 2965 (2005), the Residents’ proposed amended

complaint here pleaded such detail. But for the D.C. Circuit

this was not enough; it affirmed dismissal with prejudice on

the sole basis that any amended complaint omitting the

Match plus factor would be improperly “inconsistent” with

the original complaint. It declined to review Rule 15(a)

issues at all. Requiring “consistency” in amended pleadings

conflicts with the view of this Court and with the majority of

Circuit Courts, warranting certiorari.

A similar split of authority among the Circuits exists

on another frequently-arising and often-dispositive

procedural issue: the standard for post-judgment leave to

replead the complaint where it was dismissed on the

pleadings. The standard established by this Court and

followed in the majority of Circuits is that it is an abuse of

discretion to deny leave where a new complaint would

satisfy Rule 15(a). The D.C., Seventh, Eighth and Ninth

Circuits, however, hold that the pleader must first satisfy the

“more stringent standard” of Rule 59(e). That ignores,

however, that the Rule 59(e) policies of protecting finality of

judgment and termination of proceedings do not apply with

equal force to judgments on the pleadings. Here, the D.C.

Circuit did not reach the Rule 15(a) issues that would have

been determinative in other Circuits and in this Court.

Instead, it ruled that the high standard of Rule 59(e) was not

- met because the Residents’ post-judgment motion to amend

could have been filed pre-judgment.

The Residents filed suit in May 2002 alleging that

their subsistence-level wages and dangerously long work

hours result from an unlawful agreement among employers

and trade associations to depress, standardize and stabilize

wages and working conditions in violation of Section 1 of

the Sherman Act. As plus factors, the Residents alleged in

detail the parallel nature of wages and historic wage patterns,

participation by employers in wage information exchanges,

compliance by employers with certain anticompetitive

residency program accreditation standards and activities, and

participation in the Match. In February 2004, the district.

court largely denied defendants’ broadside of motions to

dismiss, leaving intact the complaint as to thirty defendants.

See Jung J, App. 50-155, particularly 133-39 and 142-46.

The defendant employers and associations responded

by lobbying Congress for a special antitrust exemption for

the Match. They argued that the Match is essential to

medical training and has no impact on wages (which they

still maintain publicly today). Accepting-the idea of

immunity for lesser antitrust violations, but not immunity for

any role in wage-fixing, Congress enacted compromise

legislation: the Match would be protected from antitrust

claims short of wage-fixing (such as horizontal market

division and monopolization, both of which are supported by

underlying facts but not pleaded here by the Residents), but

the employers and associations would be held to their word:

the exemption would not apply if it were shown that the

Match furthered wage-fixing. Importantly, the Match

legislation did not address anything other than the Match,

and had no bearing on allegations in the Residents’

complaint regarding parallel wages, the information

exchanges, or suspect accreditation activities.

The defendants moved to dismiss the complaint and

for judgment on the pleadings shortly after the Match

legislation was enacted, and the district court granted their

motion almost immediately after the parties completed

briefing. See Jung II, App. 9-43. The court rejected the

Residents’ arguments that the complaint adequately pleaded

a Section 1 claim even without its Match allegations because

of its extensive allegations of plus factors beyond the Match

(App. 23-26); that the savings clause preserved wage-fixing

claims such as that asserted here (App. 26-27); and that the

statute would be unconstitutional in several respects if

applied as the defendants urged (App. 27-39). Moreover,

without explanation the district court entered final judgment

immediately (App. 43), effectively dismissing the Residents’

complaint and entire action with prejudice.

Complying with the rules of the D.C. Circuit, the

Residents timely moved under Rule 59(e) to alter or amend

judgment and under Rule 15(a) for leave to file an amended

complaint. The Residents attached a proposed Amended

Complaint that clearly stated a wage-fixing claim without

any reliance on the Match. App. 164-237. The district court

denied the motions shortly after the parties completed

briefing. See Jung I/I, App. 44-49. It stated that the

stringent standard of Rule 59(e) was not met on the sole

basis that the Residents had waited until after dismissal to

move to amend. App. 46-47. In dicta, it commented that it

would deny the Rule 15(a) motion anyway for futility

because Jung J relied in part on Match allegations and the

amended complaint omitted those allegations. App. 47-49.

The district court did not explain why it considered the

Match plus factor essential to stating a Section 1 claim, nor

why the Residents failed to state such a claim based on the

allegations within the four-corners of their proposed

Amended Complaint. The district court also did not explain

why a simple motion to dismiss put the Residents between

the Scylla and Charybdis of either conceding the motion to

dismiss and amending without any test of the new statute, or

opposing the motion at the risk of losing their entire action

and any ability-to assert an amended, non-Match claim.

The D.C. Circuit affirmed the district court’s rulings

in a short decision (App. 1-8), and then denied the Residents’

request for rehearing and rehearing en banc (App. 156-58).

The D.C. Circuit’s decision conflicts with this

Court’s precedents on important federal questions of

statutory interpretation and separation of powers, applies a

standard for dismissal with prejudice that is contrary to that

of this Court and all Circuit Courts other than the Ninth

Circuit, and applies a standard for post-judgment leave to

amend after dismissal on the pleadings that is contrary to that

of this Court and all Circuit Courts other than the Seventh,

Eighth and Ninth Circuits.

REASONS FOR GRANTING THE PETITION

A. The D.C. Circuit’s Decision Conflicts With

This Court’s Decisions On Important

Questions Of Statutory Interpretation And

Separation Of Powers.

_ The only fair reading of the Match legislation’s

savings clause, 15 U.S.C. § 37b(b)(3), is that it preserves

claims alleging unlawful agreements to fix wages:

Nothing in this section shall be construed to exempt

from the antitrust laws any agreement on the part of

2 or more graduate medical education programs to

fix the amount of the stipend or other benefits

received by students participating in such programs.

Likewise, the only fair reading of the Residents’

complaint is that it alleges precisely such a claim. As the

district court itself concluded at the end of its lengthy ue

analysis in Jung J, App. 50-155 at 150-51:

-

Finally, the Court finds that plaintiffs adequately

‘have alleged a common agreement to displace

competition in the recruitment, hiring, employment

and compensation of residents physicians and to

impose a scheme of restraints that has the purpose

and effect of fixing; artificially depressing,

standardizing and stabilizing resident physician

compensation and other terms of employment... .

The gravamen of the Residents’ complaint is not that

the Match standing alone violates antitrust law, but that

employers agree to fix the Residents’ wages. The Match

allegations, like those regarding other mechanisms identified

in the complaint, are plus factors supporting an inference of

that agreement and tending to exclude the possibility of -

independent conduct.

Two plus two equals four, and the savings clause

applies to preserve the Residents’ complaint here. Any

contrary conclusion misinterprets the statute or the

complaint, and both occurred here. It distorts the statute to

view it as barring Match evidence to support “any” antitrust

claim, including wage-fixing claims falling within the scope

of the savings clause. Order, App. 4. This view ignores the

plain language of the savings clause that “Nothing in this

section” shall insulate wage-fixing claims. It also renders

the savings clause a nullity, because any claim potentially

saved would be eviscerated by the evidentiary provision.

Additionally, it distorts the complaint to say that it “does not

allege a price-fixing conspiracy,” id. at 4; to say that the

Match is “the basis” and “the centerpiece” of the complaint,

id. at 3, 4, and to say that “the central premise of plaintiffs’

complaint and its theory of liability turn entirely on the

Matching Program.” /d. at 5. The proposed amended

complaint (App. 164-237) and the district court’s earlier

reading of the original complaint in Jung J (at App. 133-39,

142-46) show that these statements are all inaccurate.

I. The Lower Court Decisions Here Conflict

With This Court’s Precedents On Statutory Interpretation. A

court may be tempted to gloss over a statute to reath the

result that it believes Congress intended, but the obvious

problem is that “the statute [is] the only sure expression of

the will of Congress.” Intel Corp. v. Advanced Micro

Devices, Inc:, 542 U.S. 241, 267 (2004) (Scalia, J.,

coneurring). The sure expression of Congress in the Match

legislation’s savings clause is that the normal protections of

the Sherman Act apply where, as here, a claim alleges an

agreement to fix wages. This is especially true because “the

Sherman Act does express a longstanding congressional

commitment to the policy of free markets and open

competition . . . our precedents consistently hold that

exemptions from the antitrust laws must be construed

narrowly.” Union Labor Life Ins. Co. v. Pireno, 458 U.S.

119, 126 (1982) (emphasis added).

Congress is presumed not to include superfluous

language in a statute, and a court’s construction must “givie]

effect, if possible, to every clause and word of a statute.”

Clark v. Arizona, 126 S. Ct. 2709, 2723 n.24 (2006). Here,

relying on the evidentiary provision’s term that it applies to

“any” claim, App. 4, including the Residents’ wage-fixing

claim, gives no office to the savings clause and ignores the

express predominance of the savings clause (“nothing in this

section shall be construed” to extinguish wage-fixing

claims). Moreover, “(t]he definition of words in isolation . .

. Is not necessarily controlling in statutory construction”

where there are contrary considerations. Dolan v. U.S.

Postal Service, 126 S. Ct. 1252, 1257 (2006). Indeed, where

considering application of a savings clause, the only relevant

factors are the scope of the clause and the type of claim; not

even the scope of the overall exemption is important at the

outset because it will be trumped anyway. Géeier v.

American Honda Motor Co., Inc., 529 U.S. 861, 867-68

10

(2000). Here, the district and Circuit courts were misguided

in focusing on the substantive and evidentiary provisions and

in looking for language that might conflict with the savings

clause. By logic and by its own terms, the savings clause

predominates.

Furthermore, statutes should not be interpreted to

raise serious questions as to their constitutional validity. See,

e.g., Edward J. DeBartolo Corp. v. Florida Gulf Coast Bldg.

& Constr. Trades Council, 485 U.S. 568, 575 (1988). Here,

interpreting the Match legislation to preserve the Residents’

claim through the savings clause avoids the serious

separation of powers question raised by the evidentiary

provision.

pas The Lower Court Decisions Here Conflict

With This Court's Precedents On Separation Of Powers.

The district court correctly ruled that even if Match activities

are now lawful, “that alone is insufficient” to change

substantive antitrust law to bar the Residents’ complaint

because “if lawful acts are used as the means to effectuate an

antitrust conspiracy, the conspiracy itself is still unlawful.”

Jung II, App. 21, citing Continental Ore Co. v. Union

Carbide & Carbon Corp., 370 U.S. 690, 707 (1962);

American Tobacco Co. v. United States, 328 U.S. 781, 809

(1946).

Leaving substantive law unchanged as to the

Residents’ complaint is precisely what dooms the lower

courts’ interpretation of the evidentiary provision as

unconstitutional. New law may only “replace[] the [original]

legal standards . . . without directing particular applications

under either the old or the new standards.” Robertson v.

Seattle Audubon Soc., 503 U.S. 429, 437 (1992). More

specifically, new law may not “compel[] ... findings or

results under old law,” nor “direct any particular findings of

11

fact or applications of law, old or new, to fact.” Jd. at 438.

It is not a change in substantive law to “tell judges when,

how, or what to do.” Miller v. French, 530 U.S. 327, 346

(2000). Congress may not prescribe the outcome of a case

by “directing what particular steps shall be taken in the

progress of a judicial inquiry.” Plaut v. Spendthrifi Farm,

Inc., 514 U.S. 211, 225 (1995).

One impermissible form of directing what particular

steps shall be taken is “forbid[ding a court] to give the effect

to evidence which, in its own judgment, such evidence

should have ....” United States v. Klein, 80 U.S. 128

(1871). When Congress attempts to dictate such details to

the judiciary, it “pass[es] the limit which separates the

legislative from the judicial power.” /d. at 133. The outer |

boundaries of Klein may be unclear, Order, App. 5, but

whatever they are, Klein is consistently recognized for the

proposition relevant here: that Congress may not interfere

with the Judiciary’s proper fact-finding. See Schiavo ex rel.

Schindler v. Schiavo, 404 F.3d 1270, 1274 (11" Cir. 2005)

(Birch, J., concurring) (stating that under Klein, legislation

may not “direct a federal court in an area traditionally left to

the federal court to decide” nor “rob{] federal courts of

judicial doctrines long-established for the conduct of

prudential decision making”). See also Axel Johnson, Inc. v.

Arthur Andersen & Co., 6 F.3d 78, 82 (2d Cir. 1993)(“unlike

the provision at issue in Klein,” the statute “does not directly

interfere with judicial fact finding”); Anixter v. Home-Stake

Prod. Co., 977. F.2d 1533, 1545 n6 (10th Cir.

1992)(“Notably absent from section 27A, unlike the statute

held unconstitutional in Klein, is a specific directive as to

what evidence a court may consider in determining the

timeliness of the suit’s filing or the case’s merits”); Green v.

Peters, No. 71 C 1403, 1997 WL 769458, at *10 (N.D. Ill,

Dec. 5, 1997) (“Section 3626(b)(2) is plainly distinguishable

from KX/ein in that it does not unduly constrain a federal

court’s ability either to evaluate evidence or to draw its own

12

conclusions with regard to certain evidence”); Jn re Taxable

Municipal Bond Sec. Litig., 796 F. Supp. 954, 960 (E.D. La.

1992) (“the legislation in Klein dictated how the Court must

find the facts without changing the legal rules that prescribe

the rights and conduct of the parties”).

The D.C. Circuit attempts to distinguish Klein on the

basis that Congress may amend substantive law, App. 5, but

Klein expressly recognizes that principle and holds that it is

not a mere change in underlying law where “the court is

forbidden to give the effect to evidence which, in its own

judgment, such evidence should have... .” Klein, 80 U.S. at

147. While Congress may “create new circumstances” by

changing a legal standard, it may not “prescribe [a] rul[e] of

decision to the Judicial Department of the government in

cases pending before it” because “the court [must be] left to

apply its ordinary rules to the new circumstances.” Jd. at

146-147. Accordingly, “it is extremely important that the

1870 Act [invalidated in Klein] directed the decision in a

pending case through the infiltration of a domain that has

been viewed as a traditionally judicial one — namely, that of

determining an evidentiary matter.” Amy D. Ronner,

Judicial Self-Demise: the Test of When Congress

Impermissibly Intrudes on Judicial Power, 35 Ariz. L. Rev.

1037, 1048 (1993) (emphasis added).

Moreover, the evidentiary provision as interpreted by

the lower courts here, just as in Klein, would improperly

predetermine the outcome of litigation by allowing evidence

on one side of the scale but not the other. “Evidence of any

of the conduct described in the preceding sentence shall not

be admissible in Federal court to support any claim or action

alleging a violation of the antitrust laws,” Section 207(b)(2),

emphasis added. Congress may limit the admissibility of

evidence, but not in a one-way manner intended to dictate a

result and to prevent courts from “giv[ing] the effect to

evidence which, in its own judgment, such evidence should

13

have....” Klein, 80 U.S. at 147. The evidentiary provision

as here interpreted improperly ties one hand behind a court’s

back, requiring it to allow Match evidence to refute an

antitrust claim but not to support one. That interference with

a court’s integrity is prohibited by the separation of powers

doctrine.

B. The Lower Courts’ Decisions Demonstrate A

Conflict Among The Circuits Regarding The

Proper Standard For Dismissal With

Prejudice. -

This Court established the standard for dismissal with

prejudice in Foman v. Davis, 371 U.S. 178 (1962), a uniform

standard ensuring consistency, predictability and fairness

among all federal district and circuit courts. “One of the

shaping purposes of the Federal Rules is to bring about————-

uniformity in the federal courts ....” Hanna v. Plumer, 380

U.S. 460, 472 (1965). “Because of an asserted conflict

among the circuits and the public importance of the proper

interpretation and uniform application of the provisions of

the Federal Rules . . . we granted certiorari.” United States v.

F. & M. Schaefer Brewing Co., 356 U.S. 227, 230-31 (1958).

In Foman, 371 U.S. at 182, this Court established that

dismissal with prejudice is an abuse of discretion:

in the absence of any apparent or declared reason—

such as undue delay, bad faith or dilatory motive on

the part of the movant, repeated failure to cure

deficiencies by amendments previously allowed,

undue prejudice to the opposing party by virtue of

allowance of the amendment, [or] futility of

amendment... .

‘ 14

The highest of all judicial principles, adjudication on

the merits, is at stake here. “If rules-of procedure work as

they should . . . they not only permit, but should as nearly as

possible guarante2 that bona fide complaints be carried to an

adjudication on the merits.” Surowitz v. Hilton Hotels Corp.,

383 U.S. 363, 373 (1966). Dismissal with prejudice should

be applied sparingly, because “{i]f the underlying facts or

circumstances relied on by a plaintiff may be a proper

subject of relief, he ought to be afforded an opportunity to

test his claim on the merits.” Foman, 371 U.S. at 182.

“{P]laintiff at the very least should be given the opportunity

to file supplemental pleadings unless it appears beyond

doubt that he cannot state a good cause of action.” Czosek v.

O'Mara, 397 U.S. 25, 27 (1970) (quotations omitted).

The rationale is well explained in 5B C. Wright & A.

Miller, Federal Practice & Procedure § 1357 (3d ed. 2004)

(“WRIGHT & MILLER,” footnotes omitted):

As the numerous case citations in the note below

make clear, dismissal under Rule 12(b)(6) generally

is not immediately final or on the merits because the

district court normally will give the plaintiff leave

-to file an amended complaint to see if the

shortcomings of the original document can be

corrected. The federal rule policy of deciding cases

on the basis of the substantive rights involved rather

than on technicalities requires that the plaintiff be

given every opportunity to cure a formal defect in

the pleading. This is true even when the district

judge doubts that the plaintiff will be able to

overcome the shortcomings in the initial pleading.

Thus, the cases make it clear that leave to amend

the complaint should be refused only if it appears to

a certainty that the plaintiff cannot state a claim.

15

The First, Second, Third, Fourth, Fifth, Sixth,

Seventh, Eighth, Tenth and Eleventh Circuits follow these

principles and follow the standard established by Foman.

See, e.g., Doe v. Cassel, 403 F.3d 986, 991 (8th Cir. 2005);

Bridgeport Music, Inc. v. Dimension Films, 410 F.3d 792,

805 (6th Cir. 2005); Barry Aviation Inc. v. Land O'Lakes

Municipal Airport Comm'n, 377 F.3d 682, 687 (7th Cir.

2004); Spanish Broadcasting System of Fla., Inc. v. Clear

Channel Communications, Inc., 376 F.3d 1065, 1077 (11th

Cir. 2004); U.S. ex rel. Adrian v. Regents of University of

California, 363 F.3d 398, 403 (Sth Cir. 2004); Alston v.

Parker, 363 F.3d 229, 236 (3d Cir. 2004); Lebron-Rios v.

U.S. Marshal Service, 341 F.3d 7, 15 (1st Cir. 2003); Van

Buskirk v. The New York Times Co., 325 F.3d 87, 91 (2d Cir.

2003); Sheldon v. Vermonty, 269 F.3d 1202, 1207 n. 5 (10th

Cir. 2001); Ostrzenski v. Seigel, 177 F.3d 245, 252-53 (4th

Cir. 1999).

In contrast, two circuit courts, the D.C. and Ninth

Circuits, add a threshold requirement of “consistency” found

nowhere in Foman or in the law of other circuits. “If a

complaint is dismissed for failure to state a claim, leave to

amend should be granted unless the court determines that the

allegation of other facts consistent with the challenged

pleading could not possibly cure the deficiency.” Schreiber

Distrib. Co. v. Serv-Well Furniture Co., Inc., 806 F.2d 1393,

1401 (9th Cir. 1986) (emphasis added). “A dismissal with

prejudice is warranted only when a trial court determines that

the allegation of other facts consistent with the challenged

pleading could not possibly cure the deficiency.” Firestone

v. Firestone, 76 F.3d 1205, 1209 (D.C. Cir. 1996) (emphasis

added).

The rationale for the “consistency standard” has

never been adequately explained by either the D.C. or the

Ninth Circuit, much less reconciled with contrary principles

16

in Foman and Rule 8(e)(2) (allowing allegations “regardless

of consistency,” even in the same complaint). Indeed, the

consistency standard materialized from thin air as off-hand

dicta in Bonanno v, Thomas, 309 F.2d 320, 322 (9th Cir.

1962), a decision predating Foman by a few months. It came

alive as law in the Ninth Circuit in Rae v. Union Bank, 725

F.2d 478, 480 (9th Cir. 1984) (citing Bonanno), where the

court held that dismissal without leave to amend was proper

because the complaint alleged no factual allegations

supporting an unlawful tying claim and any amended

complaint would need to “inconsistently” plead them. -

Since Rae, the consistency standard has become well-

entrenched law in the Ninth Circuit and has been repeated in

more than 15 appellate decisions applying Ninth Circuit law.

See, e.g., Bradley v. Chiron Corp., 136 F.3d 1317, 1324-26

(Fed. Cir. 1998) (applying Ninth Circuit law to affirm

California district court’s dismissal with prejudice based on

“discrepancies” in an amended and superseded complaint -

that “exceeded permissible adjustment of factual

allegations”); Reddy v. Litton Indus., Inc., 912 F.2d 291,

296-97 (9th Cir. 1990) (affirming dismissal with prejudice

where complaint alleged injury due to wrongful termination

and any amended complaint would have to allege RICO

injury, because “{a]lthough leave to amend should be

liberally granted, the amended complaint may only allege —

other facts consistent with the challenged pleading,”

(quotations omitted)); Heisen v. Pacific Coast Bldg. Prod.,

Inc., 26 F.3d 130, 1994 WL 250036, at *2 (9th Cir. June 9,

1994) (unpublished) (affirming dismissal without leave to

amend where complaint alleged intent to harm plaintiff in

particular and any amended complaint would have to allege

intent to harm competition generally). See also Government

Computer Sales Inc., v. Dell Mktg., No. 05-35936, 2006 WL

2467913, Slip. Op., at *3 (9th Cir. August 28, 2006)

(unpublished); Grogan v. Health Officer of County of

Riverside, 221 F.3d 1348, 2000 WL 674735, at *2 (9th Cir.

17

May 22, 2000) (unpublished); Chem v. New York Life Ins.

Co., 168 F.3d 498, 1999 WL 97289, at *2 (9th Cir. Feb. 25,

1999) (unpublished); New v. Armour Pharmaceutical Co., 67

F.3d 716, 722 (9th Cir. 1995).

_The consistency standard also continues to gain

momentum among the large number of district courts in the

Ninth Circuit, having been cited or applied in nearly fifty

decisions so far this year. See, e.g., Temple v. Adams, No.

CV-F-04-6716, 2006 WL 2454275, slip. op., at *10 (E.D.

Cal. Aug. 23, 2006) (dismissing with prejudice where

complaint alleged facts showing untimeliness of claim and

consistent allegations could not cure); Wheeler v. City of

Oakland, No. C 05-0647, 2006 WL 1140992, slip. op., at *8

(N.D. Cal. Apr. 28, 2006) (dismissing with prejudice where

complaint alleged facts suggesting that city did not have

policy of indifference to civil rights and any amended claim

would have to plead inconsistent facts that it did); U.S. v.

University of San Francisco, No. C 04-03440, 2006 WL

335316, at *3 (N.D. Cal. Feb. 14, 2006) (dismissing with

prejudice where complaint alleged fact that termination was

effective in May and any\amended claim would have to

“plead inconsistent fact of August}-—

Indeed, in decisions dismissing without prejudice,

some Ninth Circuit district courts now instruct plaintiffs not

to replead any allegations’ inconsistent with the dismissed

complaint or claim. See, e.g., Rejects Skate Magazine, Inc.

v. Acutrack, Inc., No. C 06-2590, 2006 WL 2458759, Slip

Op., at *7 (N.D. Cal. Aug. 22, 2006) (plaintiffs may amend

their complaint “if they can, truthfully and without

contradicting the original complaint . . .”); McDaniels v.

Hospice of Napa Valley, No. C 06-2558, 2006 WL 2038276,

Slip. Op., at *9 (N.D. Cal. Jul. 19, 2006) (“Plaintiff is

granted leave to amend to allege, if she can do so truthfully

and without contradicting the original complaint”).

18

The consistency standard followed a_ similar

progression from unexamined roots to repeated dicta to law

_in the D.C. Circuit. The standard migrated to the D.C.

Circuit from the Ninth Circuit when Jarrell v. U.S. Postal

Serv., 753 F.2d 1088, 1091 (D.C. Cir. 1985), quoted

Bonanno v. Thomas, 309 F.2d 320, 322 (9th Cir. 1962). It

- gained momentum, although still dictum, when repeated in

several circuit and district court decisions, namely Firestone

v. Firestone, 76 F.3d 1205, 1209 (D.C. Cir. 1996); Andrx

Pharmaceuticals, Inc. v. Biovail Corp., Int’l., 256 F.3d 799,

807 (D.C. Cir. 2001); In re Office Prod. Co. Sec. Litig., 251

F. Supp. 2d 58, 75 (D.D.C. 2003); Belizan v. Hershon, 434

F.3d 579, 583 (D.C. Cir. 2006); and Interbank Funding

Corp. Sec. Litig., 432 F. Supp. 2d 51, 54 (D.D.C. 2006).

In this case, the D.C. Circuit’s ruling transformed the

~ consistency standard from dictum to law for the first time.

“D]ismissal with prejudice is warranted only when a district

court determines that ‘allegation of other facts consistent

with the challenged pleading could not possibly cure the

deficiency.’” Order, App. 5-6 (emphasis added, quoting

Firestone v. Firestone, 76 F.3d at 1209). “The central

premise of plaintiffs’ complaint and its theory of liability

turn entirely on the Matching Program” and “[a] proposed

amendment advancing price-fixing claims absent the

Matching Program . . . would not be ‘consistent with the

challenged pleading.’” Jd. Setting aside the clear inaccuracy

of these statements, the threshold consistency question ended

the D.C. Circuit’s inquiry here, and it never reached the

Foman factors to determine whether the Residents’ proposed

Amended Complaint pleaded a Section 1 claim (“we need

not reach the Rule 15(a) issue,” Order, App. 7). The D.C.

Circuit thus declined to endorse the district court’s dictum

that any amendment would be futile, and in fact implied that

it would not be. “Nothing in the District Court’s disposition

or in ours precludes future plaintiffs from pursuing price-

19

fixing claims against those defendants or related individuals

or entities that are unrelated to the Matching Program.” /d.

If “future plaintiffs” may pursue the claim contained in the

Amended Complaint, why are the Residents here being

prevented from doing so?

Unless reviewed now by this Court, the consistency

standard is likely to proliferate further and continue to gain

momentum, having now taken root in two of the most cited

Circuits in the country. Additionally, seeds of the

consistency standard already lay waiting in the Third, Fifth,

Seventh and Tenth Circuits, where decisions have

recognized the concept. See Roberts v. Mayor and

Burgesses of London Borough of Brent, 70 Fed. Appx. 615,

619 (3d Cir. 2003) (unpublished); Murray v. Albany County

Bd. of County Comm'rs, 211 F.3d 1278, 2000 WL 472842, at

*2 (10th Cir. Apr. 20, 2000) (unpublished); Asher v.

Harrington, 461 F.2d 890, 895 (7" Cir. 1972); Cupit v. U.S.,

964 F. Supp. 1104, 1109 (W.D. La. 1997).

The inescapable consequence of conflicting

procedural standards is conflicting substantive results. Here,

the D.C. Circuit treated the “inconsistency” issue as

dispositive -- and fatal -- even though consistency between

an amended and superseded complaint would be completely

irrelevant in any other circuit except the Ninth. Similarly,

the D.C. Circuit expressly held that it “need not reach the

Rule 15(a) issue,” App. 7, even though the Rule 15(a) issue

would be the dispositive issue under Foman and the law of

all circuits other than the Ninth. “[T]o say that a district

judge may not abuse his discretion is merely to say that the

action in question . . . may not be done without considering

relevant factors and giving a ‘justifying reason.’” Schlup v.

Delo, 513 U.S. 298, 348 (1995) (Scalia, J., dissenting,

quoting Foman, 371 U.S. at 182). That did not happen here,

and regularly fails to happen in the D.C. and Ninth Circuits:

This conflict among the circuits and with this Court as to the

20

proper standard for dismissal with prejudice should be

resolved.

C. The Lower Courts’ Decisions Demonstrate A

Conflict Among The Circuits Regarding The

Proper Standard For Post-Judgment Leave

To Amend After Dismissal On The-

Pleadings.

. A similar split of authority among the Circuit Courts

exists with respect to another important, frequently-arising

and dispositive procedural issue: the proper standard for

post-judgment leave to amend the complaint after dismissal.

Such motions involve tension between two Federal Rules of

Civil Procedure: Rule 15(a), which governs amendments and

- allows them generously, and Rule 59(e), which governs post-

judgment proceedings and allows them only sparingly.

“Most courts faced with the problem have held that once a

judgment is entered the filing of an amendment cannot be

allowed until the judgment is set aside or vacated under Rule

59 or Rule 60.” 6 WRIGHT & MILLER § 1489.

This Court has never articulated a general standard

for altering or amending judgment under Rule 59(e). Proper

grounds vary among the Circuit Courts and consist of some

combination of an intervening change in controlling law, the

availability of new evidence, or the need to correct a clear

error or prevent manifest injustice. See Messina v.

Krakower, 439 F.3d 755, 758-59 (D.C. Cir. 2006); Marks 3

Zet-Ernst Marks GmBh & Co. KG v. Prestek, Inc., 455 F.3d

7, 15 (ist Cir. 2006); Ingle ex rel. Estate of Ingle v. Yelton,

439 F.3d 191, 197 (4th Cir. 2006); Coliseum Square Ass'n,

Inc. v. Jackson, _ F.3d __, 2006 WL 2664455 (Sth Cir.

Sept. 18, 2006); Munafo v. Metropolitan Transp. Auth., 381

F.3d 99, 105 (2d Cir. 2004); Intera Corp. v. Henderson, 428

F.3d 605, 620 (6th Cir. 2005), cert. denied, 126 S. Ct. 1782

21

(2006); Circuit City Stores, Inc. v. Mantor, 417 F.3d 1060,

1064 n.1 (9th Cir. 2005); Kapelanski v. Johnson, 390 F.3d

525, 532 (7th Cir. 2004); Capitol Indemnity Corp. v.

Russellville Steel Co., Inc., 367 F.3d 831, 834 (8th Cir.

2004); Servants of Paraclete v. Does, 204 F.3d 1005, 1012

(10th Cir. 2000); Max’s Seafood Café ex rel. Lou-Ann, Inc. v.

Quinteros, 176 F.3d 669, 677 (3d Cir. 1999); In re Kellogg,

197 F.3d 1116, 1119 (11th Cir. 1999).

All of these Rule 59(e) standards are considerably

higher than the liberal Rule 15(a) standard for leave to

amend that this Court established in Foman v. Davis, 371

U.S. 178, 182 (1962):

If the underlying facts or circumstances relied upon

by a plaintiff may be a proper subject of relief, he

ought to be afforded an opportunity to test his claim

on the merits. In the absence of any apparent or

declared reason -- such as undue delay, bad faith or

dilatory motive on the part of the movant, repeated

failure to cure deficiencies by, amendments

previously allowed, undue prejudice to the opposing

party by virtue of allowance of the amendment,

futility of amendment, etc. -- the leave sought

should, as the rules require, be “freely given.”

Because in summary judgment or post-trial situations

the lower standard of Rule 15(a) is not reached unless the

higher standard of Rule 59(e) is met as a threshold

requirement, many amendments are barred post-judgment

that would be permitted pre-judgment. “This approach

appears sound. To hold otherwise would enable the liberal

amendment policy of Rule 15(a) to be employed in a way

that is contrary to the philosophy favoring finality of

judgments and the expeditious termination of litigation.” 6

WRIGHT & MILLER § 1489.

22

But a majority of Circuit Courts, and indeed this

Court, hold that this approach is not sound where judgment

is on the pleadings because the policies underlying Rule

59(e) are largely applicable only to more substantive

judgments, like summary judgment and judgment at trial.

This Court applies the lower Rule 15(a) standard to post-

judgment motions to amend the complaint after judgment on

the pleadings, and applies the higher Rule 59(e) standard

only as to more substantive judgments. In Foman, the

district court dismissed the plaintiff's complaint under Rule

12(b)(6) and entered judgment, subsequently denying a

motion to vacate and amend (which were treated by this

Court as a Rule 59(e) motion). 371 U.S. at 180. The Court

of Appeals affirmed. Jd. at 181. This Court reversed, ruling

that denial of the plaintiff's Rule 59(e) motion was an abuse

of discretion where she met the repleading standard of Rule

15(a). Id. at 182.

Not surprisingly, the First, Second, Third, Fourth,

Fifth, Sixth, Tenth and Eleventh Circuits have adopted the

sensible (and, for that matter, binding) approach of this

Court. See Laber v. Harvey, 438 F.3d 404, 427-28 (4th Cir.

2006) (“A conclusion that the district court abused its

discretion in denying a motion to amend, however, is

sufficient grounds on which to reverse the district court’s

denial of a Rule 59(e) motion”); Spanish Broadcasting

System of Fla., Inc. v. Clear Channel Communications, Inc.,

376 F.3d 1065 (11th Cir. 2004) (“the[] same [Rule 15(a)]

standards apply when a plaintiff seeks to amend after a

judgment of dismissal has been entered by asking the district

court to vacate its order of dismissal pursuant to [Rule

~ $9(e).”); Rosenzweig v. Azurix Corp., 332 F.3d 854, 864 (5

Cir. 2003) (‘the disposition of the plaintiffs motion to

vacate under rule 59(e) should be governed by the same

considerations controlling the exercise of discretion under

tule 15(a)’’”); Morse v. McWhorter, 290 F.3d 795, 799 (6th

Cir. 2002) (“Where a timely motion to amend judgment is

23

filed under Rule 59(e), the Rule 15 and Rule 59 inquiries

turn on the same [Rule 15] factors”); Cureton v. National

Collegiate Athletic Ass’n, 252 F.3d 267, 272 (3d Cir. 2001)

(“Where a timely motion to amend judgment is filed under

Rule 59(e), the Rule 15 and 59 inquiries turn on the same

[Rule 15] factors”); Judge v. City of Lowell, 160 F.3d 67, 79

(ist Cir. 1998) (applying Rule 15(a) standard to motion to

amend following Rule 12(b)(6) dismissal and judgment);

Acito v. IMCERA Group, Inc., 47 F.3d 47, 54-55 (2d Cir.

1995) (applying Rule 15(a) standard to Rule 59(e) motion

after dismissal and judgment on the pleadings); Bauchman

for Bauchman v. West High Sch., 132 F.3d 542, 559 (10th

Cir. 1997) (“To safeguard a plaintiffs’ opportunity to test her

claims on the merits, Rule 15(a) .. . provides that leave of

the court to amend the pleadings should be freely given

when justice requires.”’)

The D.C. Circuit disagrees, and “applies the higher

Rule 59(e) standard to judgments on the pleadings in

addition to more substantive judgments. As stated here

(Order, App. 6):

After a district court has dismissed a complaint with

prejudice, a party can amend that complaint under

Rule 15(a) only by first prevailing on a Rule 59(e)

motion to alter of amend the judgment. Firestone

[v. Firestone, 76 F.3d 1205, 1208 (D.C. Cir. 1996)].

Although Rule 15(a)’s liberal standard for granting

leave to amend governs once the court has vacated

the judgment, a party must first satisfy Rule 59(e)’s

more stringent standard.

Only the Seventh, Eighth and Ninth Circuits join the

D.C. Circuit in applying the higher Rule 59(e) standard and

failing to distinguish between judgments on the pleadings

and more substantive judgments. As described by the Ninth

24

Circuit, “(t]he issue is not leave to amend .... The question

is whether the court, when it dismissed the case, committed

some clear error that required it to reopen that judgment.”

Weeks v. Bayer, 246 F.3d 1231, 1236-37 (9th Cir. 2001)

(rejecting Rule 15(a) standard and applying the Rule 59(e)

standard to a motion to amend following judgment on the

pleadings). See also Burgess v. Sailors’ Union of Pacific, 63

Fed. Appx. 337, 339 (9th Cir. 2003) (unpublished) (applying

the Rule 59(e) standard and rejecting that of Rule 15(a)

because “(t]he rationale requiring courts to liberally grant

leave to amend is inapposite after the entry of judgment”);

Adamson v. Lockheed Martin Idaho Technologies Co., 20

Fed. Appx. 715, 718 (9th Cir. 2001) (unpublished) (applying

Rule 59(e) standard). The Seventh Circuit holds that while

Rule 15(a) presumes liberal leave to amend, “this

presumption is reversed in cases, such as here, where a

plaintiff seeks to amend a complaint after judgment has been

entered and a case has been dismissed.” Bressner v.

Ambroziak, 379 F.3d 478, 484 (7th Cir. 2004) (declining to

apply the Rule 15(a) standard to a motion to amend

following judgment on the pleadings, citing several Seventh

Circuit cases). Similarly, the Eighth Circuit holds that

“although a motion to amend a complaint should be freely

given under [Rule] 15(a), different considerations apply to

motions filed after dismissal” on the pleadings, requiring a

“valid reason” for failure to amend earlier. Parnes v.

Gateway 2000, Inc., 122 F.3d 539, 550 (8th Cir. 1997)

(quotations omitted). Cf Sanders v. Clemco Indus., 823 F.2d

214, 216-17 (8th Cir. 1987) (applying Rule 15(a) standard to

post-judgment motion to amend).

In its Order, the D.C. Circuit ruled that the high

standard of Rule 59(e) was not met in this case because there

was no change of intervening law, no new evidence, no clear

error below, and no manifest injustice. App. 7. Its only

explanation was that “plaintiffs forfeited any claim of an

abuse of discretion” because the Match legislation was

25

enacted in April 2004 and plaintiffs “had both the time and

opportunity to request leave to amend their complaint prior

to the entry of judgment [in August 2004], but chose not to.”

Id. The Residents did not move to amend during that period,

of course, because they did not concede that the new statute

was fatal to their claim and they were entitled to a court

ruling on that issue.

Setting aside the number of Circuit Courts that

strictly apply the Rule 59(e) standard to post-judgment

motions to amend the complaint after dismissal on the

pleadings, the D.C. Circuit appears to stand entirely alone in

holding that the Rule 59(e) standard is not met where the

post-judgment motion to amend could have been made pre-

judgment. Order, App. 7. If that is a legitimate basis to deny

Rule 59(e) relief, then a district court’s discretion has

virtually no bounds at all because post-judgment motions are

almost always made precisely because they were not made

pre-judgment. The D.C. Circuit broke new ground in

adopting a concept that has so far been applied only where

no Rule 59(e) motion was made—that dismissal with

prejudice is not an abuse of discretion where no pre-

judgment motion for leave to amend was made, thus

improperly raising the amendment issue for the first time on

appeal. See, e.g., Greenidge v. Allstate Ins. Co., 446 F.3d

356 (2d Cir. 2006) (plaintiffs may move to amend pre-or

post-judgment, and where they do neither “a district court

does not abuse its discretion when it fails to grant leave to

amend a complaint without being asked to do so.”) The D.C.

Circuit’s bright line hints at the Rule 15(a) consideration of

“undue delay” (although it expressly declined to reach Rule

15(a) issues, App. 7), but the circuits are split on the proper

standard there, too, and a simple pre- and post-judgment

distinction follows neither. See Minter v. Prime Equipment

Co., 451 F.3d 1196, 1205-06, n.15 (10th Cir. 2006) (noting

that the Second, Fourth, Fifth, Sixth, Seventh, Eighth, Ninth

and D.C. Circuits require prejudice, bad faith, futility or a

26

substantial burden on the court to find undue delay, while the

First, Third, Tenth and Eleventh Circuits focus on whether

the delay is justified in light of all circumstances.)

On this second procedural issue of amending the

_ complaint after judgment on the pleadings, like the first issue

of dismissal with prejudice, the D.C. Circuit applied a

standard contrary to the standard endorsed by this Court and

contrary to. the standard applied by a majority of Circuit

Courts. Once again, the issues that were dispositive here --

Rule 59(e) considerations and the Residents’ failure to

amend pre-judgment -- would have been irrelevant in the

First, Second, Third, Fourth, Fifth, Sixth, Tenth and Eleventh

circuits. By the same token, the issue that would have been

dispositive in those Circuits under the standard endorsed by

this Court -- Rule 15(a) -- was not even reached here.

Nothing in the D.C. Circuit’s decision found or even

insinuated that the Residents’ Amended Complaint failed to

satisfy Rule 15(a). This conflict among the circuits and with

this Court as to the proper standard for post-judgment

_ repleading of a complaint should be resolved. See Hanna v.

Plumer, 380 U.S. 460, 472 (1965) (emphasizing the

importance of uniformity in application of federal procedural

rules); United States v. F. & M. Schaefer Brewing Co., 356

U.S. 227, 230-31 (1958) (granting certiorari to ensure

uniformity in application of federal procedural rules).

CONCLUSION

For the foregoing reasons, petitioners Paul Jung,

M.D.; Denise Greene, M.D.; and Luis Llerena, M.D.;

respectfully request a writ of certiorari to review the June 1,

2006 decision of the Court of Appeals for the District of

Columbia Circuit in this case.

27

Respectfully submitted,

Michael J. Freed (Counsel of Record)

Jean Janes

MUCH, SHELIST, FREED, DENENBERG,

AMENT & RUBENSTEIN, P.C.

191 N. Wacker Drive, Suite 1800

Chicago, IL 60606

(312) 521-2000

Sherman Marek

LAW OFFICE OF SHERMAN MAREK

1055 W. Bryn Mawr Ave., #F-100

Chicago, IL 60660

(312) 805-0244

C. Barry Montgomery

Deborah H. Bornstein

WILLIAMS, MONTGOMERY: & JOHN,

LTD.

20 North Wacker Drive, Suite 2100

Chicago, IL 60606

(312) 443-3200

October 23, 2006

App. 1

United States Court of Appeals

For the District of Columbia Circuit.

No. 04-7023

Paul Jung, M.D., et al.,

Appellees

Vv.

ASSOCIATION OF AMERICAN

MEDICAL COLLEGES, et al.,

Appellees

National Resident Matching Program,

Appellant.

Consolidated with 04-7138.

Appeals from the United States District Court |

for the District of Columbia

(No. 02cv00873)

Before: RANDOLPH and GRIFFITH, Circuit Judges,

and EDWARDS, Senior Circuit Judge.

JUDGMENT

(Filed Jun. 1, 2006)

This appeal was considered on the record from the

United States District Court for the District of Columbia

and on the briefs and arguments of the parties. It is

ORDERED and ADJUDGED that the District

Court’s August 12, 2004 order and judgment be affirmed.

App. 2

The District Court did not err in dismissing the complaint

with prejudice pursuant to Rules 12(b)\(6) and 12(c) of the

Federal Rules of Civil Procedure on the grounds that

plaintiffs could “prove no set of facts in support of [their]

claim which would entitle [them] to relief.” Conley uv.

Gibson, 355 U.S. 41, 45-46 (1957); see Sparrow v. United

Air Lines, Inc., 216 F.3d 1111, 1113 (D.C. Cir. 2000). We

review the dismissal of a complaint de novo, “view[ing] the

facts presented in the pleadings and the inferences to be

drawn therefrom in the light most favorable to the non-

moving party.” Peters v. Natl R.R. Passenger Corp., 966

F.2d 1483, 1485 (D.C. Cir. 1992) (quotation marks omit-

ted).

Paul Jung, M.D., Denise Green, M.D., and Luis

Llerena, M.D., (“plaintiffs”) brought suit in May 2002

against a number of teaching hospitals, medical schools,

and non-profit associations (collectively, “defendants”)

involved in graduate medical education, challenging the

way medical students are assigned to residency programs

by one of the defendants, the National Resident Matching

Program (“Matching Program”). The single-count com-

plaint alleged that defendants participated in a conspiracy,

in violation of the Sherman Act, 15 U.S.C. § 1, to “illegally

restrain competition in the market for resident physician

services” by “(a) stabilizing wages below competitive levels

by exchanging competitively sensitive information regard-

ing resident physician compensation and other terms of

employment; (b) eliminating competition in the recruit-

ment and employment of resident physicians by assigning

prospective resident physician employees to positions

through the National Resident Matching Program ... ;

and (c) establishing and complying with anticompetitive

App. 3

and accreditation standards and requirements.” Compl. in

02-0873 at 5-6.

On April 10, 2004, the Pension Funding Equity Act of

2004, Pub. L. No: 108-218, 118 Stat. 596 (2004) (the “Act”),

became law. Section 207 of the Act, 15 U.S.C. § 37b, not

only exempts “graduate medical education residency

matching program|s]” from antitrust laws, but it also bars

evidence of any participation in such programs in support

of a claim in federal court that antitrust laws have been

violated, id. § 37b(b)(2). A savings clause provides that

Section 207 does not exempt from antitrust laws “any

agreement on the part of 2 or more graduate medical

education programs to fix the amount of the stipend or

other benefits received by students participating in such

programs,” id. § 37b(b)(3). By its express terms, Section

207 applies to suits pending when it became law. 7d.

§ 37b(c).

Within days of enactment, defendants moved to

dismiss the complaint pursuant to Federal Rules of Civil

Procedure 12(b)(6) and 12(c). On August 12, 2004, the

District Court granted the motion and dismissed the

complaint with prejudice, holding that plaintiffs’ claim

relied entirely upon the Matching Program and was,

therefore, barred by Section 207.

We affirm the District Court. The Matching Program

is the basis for plaintiffs’ complaint, and it falls squarely

within both the exemption and bar of Section 207. The Act

defines the term “graduate medical education resident

matching program” by reference to the very program at

‘3sue in the complaint: “the National Resident Matching

Program.” 15 U.S.C. § 37b(b)(1)(C). It is hard to imagine a

more precise fit between the language of a statute and a

App. 4

lawsuit. Plaintiffs attempt to recast the allegations of the

complaint as a price-fixing scheme independent of the

Matching Program so that they can claim the protection of

the savings clause, id. § 37b(b)(3). They argue that the

savings clause permits the use of evidence of participation

in the Matching Program in a price-fixing case. We agree

with the District Court that the complaint’s allegations are

inextricably intertwined with the Matching Program and

thus prohibited by Section 207. “The complaint does not

allege a price-fixing conspiracy, but a single overriding

integrated antitrust conspiracy with the Match as its

centerpiece.” Op. in 02-0873 at 15. Plaintiffs fail “to

demonstrate that absent the Match allegations, the Court

in fact would have come to the same conclusion that ‘a

conspiracy existed.’” Jd. at 16. We also agree that Section

207’s evidentiary bar, which applies to “any claim or action

alleging a violation of the antitrust laws,” 15 U.S.C.

§ 37b(b)(2) (emphasis added), applies to plaintiffs’ claim

because the bar “forbids invocation of the Match program

as evidence in any antitrust suit, including one involving

allegations of price-fixing.” Op. in 02-0873 at 18.

Plaintiffs’ constitutional argument is likewise unavail-

ing. They argue that Section 207 violates the separation of

powers because “Congress has attempted to place a thumb

on the scales in pending litigation.” Pl.’s Br. in 04-7138 at

31. But Congress has done nothing more here than amend

the antitrust laws by carving out a safe harbor for partici-

pation in “graduate medical education residency matching

program|s].” Congress may amend substantive laws, even

when doing so affects pending litigation. See Robertson v.

Seattle Audubon Soc’y, 503 U.S. 429, 438 (1992) (uphold-

ing a statute enacted in response to pending environ-

mental litigation because it did not “direct any particular

App. 5

findings of fact or applications of law, old or new,” but

rather amended the governing substantive law). Congress

may also change laws governing how evidence may be

used. See Tot v. United States, 319 U.S. 463, 467 (1943)

(“Congress has power to prescribe what evidence is to be

received in the courts of the United States.”). Plaintiffs

rely upon United States v. Klein, 80 U.S. 128 (1871), a case

in which the Supreme Court struck down a statute that

limited the scope of the President’s pardon power in an

effort to change on appeal the result of cases that had

already been decided. “Whatever the precise scope of

Klein, however, later decisions have made clear that its

prohibition does not take hold when Congress ‘amend|(s]

applicable law.’” Plaut v. Spendthrift Farm, Inc., 514 U.S.

211, 218, (1995) (quoting Seattle Audubon, 504 US. at

441); see also National Coalition to Save Our Mall v.

Norton, 269 F.3d 1092, 1096 (D.C. Cir. 2001) (declining to

find separation of powers violation under Klein when

Congress made amendment to substantive law that

affected pending litigation).

Plaintiffs argue in the alternative that dismissal of

their complaint should have been without prejudice. We

review a dismissal with prejudice for abuse of discretion,

see United States ex rel. Williams v. Martin-Baker Aircraft

Co., 389 F.3d 1251, 1259 (D.C. Cir. 2004); Confederate

Memorial Ass’n v. Hines, 995 F.2d 295, 298-99 (D.C. Cir.

1993), and find none here. In Firestone v. Firestone, 76

F.3d 1205, 1209 (D.C. Cir. 1996), we held that dismissal

with prejudice is warranted only when a district court

determines that “allegation of other facts consistent with

the challenged pleading could not possibly cure the defi-

ciency.” The central premise of plaintiffs’ complaint and its

theory of liability turn entirely on the Matching Program.

App. 6

A proposed amendment advancing price-fixing claims

absent the Matching Program that would survive Section

207’s exemption and bar would not be “consistent with the

challenged pleading.” See Firestone, 76 F.3d at 1209. Any

allegation of other facts “consistent with the challenged

pleading” would necessarily involve the Matching Program

and “could not possibly cure the deficiency of the com-

plaint.” See id. We affirm the District Court’s dismissal

with prejudice.

FURTHER ORDERED that the District Court’s

January 25, 2005 order denying plaintiffs’ Rule 59(e)

motion to alter or amend the judgment and their Rule

15(a) motion for leave to file an amended complaint be

affirmed. We review denial of a Rule 59(e) motion for

abuse of discretion. See Firestone, 76 F.3d at 1208. We find

no abuse of discretion. After their complaint was dismissed

with prejudice, plaintiffs filed a Rule 59(e) motion seeking

to modify the judgment and a Rule 15(a) motion to allow

the filing of an amended complaint. The District Court

denied plaintiffs’ motions and held that the high standard

for relief under Rule 59(e) had not been met. After a

district court has dismissed a complaint with prejudice, a

party can amend that complaint under Rule 15(a) only by

first prevailing on a Rule 59(e) motion to alter or amend

the judgment. Firestone, 76 F.3d at 1208. Although “Rule

15(a)’s liberal standard for granting leave to amend

governs once the court has vacated the judgment,” Fire-

stone, 76 F.3d at 1208, a party “must first satisfy Rule

59(e)’s more stringent standard.” Jd. “A Rule 59(e) motion

‘is discretionary’ and need not be granted unless the

district court finds that there is an ‘intervening change of

controlling law, the availability of new evidence, or the

App. 7

need to correct a clear error or prevent manifest injus-

tice.’” Id. (citation omitted).

Here, there was no change of intervening law (Section

207 was enacted several months before the complaint was

dismissed), no new evidence had become available, and the

District Court’s ruling contains no “clear error” and

_ threatens no “manifest injustice.” Dismissal of the com-

plaint was warranted because it clearly falls within the

range of suits Congress preempted by Section 207. As the

District Court noted, “[p]laintiffs had both the time and

opportunity to request leave to amend their complaint

prior to the entry of judgment, but chose not to.” Mem. Op. .

in 02-0873 at 3. “By failing to advise the court in a timely

fashion — i.e., before the court ruled on the motion to

dismiss” — that they were willing to amend their Com-

plaint in light of Section 207, plaintiffs “forfeited any claim

of an abuse of discretion.” See Ciralsky v. CIA, 355 F.3d

661, 673 (D.C. Cir. 2004). Nothing in the District Court’s

disposition or in ours precludes future plaintiffs from

pursuing price-fixing claims against those defendants or

related individuals or entities that are unrelated to the

Matching Program.

Because we affirm the District Court’s refusal to grant

the Rule 59(e) motion, we need not reach the Rule 15(a)

issue. In addition, because we affirm the dismissal of the

complaint, we do not reach the question of whether the

District Court abused its discretion in denying the motion

of the National Resident Matching Program to compel

arbitration of plaintiffs’ claim.

Pursuant to D.C. Circuit Rule 36, this-disposition will

not be published. The Clerk is directed to withhold issuance

of the mandate herein until seven days after resolution of

App. 8

=

any timely petition for rehearing or rehearing en banc. See

Fed. R. App. P. 41(b); D.C. Cir. R. 41.

Per Curiam

FOR THE COURT:

Mark J. Langer, Clerk

BY: Michael C. McGrail

Michael C. McGrail

Deputy Clerk

App. 9

339 F. Supp. 2d 26

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

PAUL JUNG, M.D., et al., )

Plaintiffs,

v.

ASSOCIATION OF

AMERICAN MEDICAL .

COLLEGES, et al.,

Defendants.

Civil Action No. 02-0873 (PLF)

de

PINION

(Filed Aug. 12, 2004)

This matter is before the Court for consideration of

Defendants’ Motion for Judgment on the Pleadings.

Plaintiffs in this putative class action are medical school

graduates currently or formerly enrolled in resident

physician “residency” programs. The defendants can be

categorized into two groups: the organizational defendants

(organizations and associations that participate in the

administration of graduate medical education in the

United States) and the institutional defendants (universi-

ties, medical schools, foundations, hospitals, health sys-

tems and medical centers that sponsor medical residency

programs). Plaintiffs filed suit charging that the defen-

dants have violated Section 1 of the Sherman Act, 15

U.S.C. § 1. Specifically, plaintiffs allege that the defen-

dants have contracted, combined and conspired among

themselves to “displace competition in the recruitment,

hiring, employment and compensation of resident physi-

cians, and to impose a scheme of restraints which have the

App. 10

purpose and effect of fixing, artificially depressing, stan-

dardizing and stabilizing resident physician compensation

and other terms of employment.” Complaint (“Compl.”)

q 2.

On February 11, 2004, the Court issued an Opinion

and Order addressing certain defendants’ motions to

dismiss this action on various grounds. See Jung w. Asso-

ciation of American Medical Colleges, 300 F. Supp. 2d 119

(D.D.C. 2004) (“February 11 Opinion and Order”). After

the Court issued this Opinion and Order, Congress en-

acted and President George W. Bush signed into law the

Pension Funding Equity Act of 2004, Pub. L. No. 108-218,

118 Stat. 596 (2004), which includes a provision entitled

“Confirmation of Antitrust Status of Graduate Medical

Resident Matching Programs,” an amendment to the

antitrust laws that has been codified as 15 U.S.C. § 37b.

Certain defendants now move under Rule 12(c) of the

Federal Rules of Civil Procedure for judgment on the

pleadings on the ground that the action must be dismissed

in light of this new legislation which creates or confirms

an antitrust exemption for graduate medical education

residency matching programs.

I. BACKGROUND

A. Plaintiffs’ Allegations

In their class action complaint in this case, plaintiffs

assert that there are three intertwining prongs to the

antitrust conspiracy they allege. The first prong of the

alleged conspiracy concerns the annual assignment of

fourth-year medical students to the institutional defen-

dants’ residency programs by the National Resident

Matching Program (“NRMP”). The NRMP, an Illinois

App. 11

not-for-profit corporation, is managed and operated by

defendant American Association of Medical Colleges

(“AAMC”) from AAMC’s principal office in Washington,

D.C. See Compl. J 15. The AAMC also is an Illinois not-for-

profit corporation, whose membership includes all 125

accredited medical schools, including those medical schools

named in the complaint, and approximately 375 major

teaching hospitals and health systems, some of which also

are named in the complaint. These hospitals and health

systems are member hospitals of a subsection of the

AAMC, the Council of Teaching Hospitals and Health

Systems (“COTH”) Section. See id. J 17.

Plaintiffs further allege that in order to effectuate the

assignment, or the “Match,” as it is commonly called,

prospective medical residents enter into contracts with

and submit to the NRMP a ranked list of desired medical

resident positions with various institutions (“Student

Match Contract”). The institutions themselves also enter

into contracts with the NRMP and submit ranked lists of

the medical students whom they are interested in hiring

(“Institutional Match Contract”). On a date certain, the

NRMP through an algorithm “matches” the students’ lists

against the institutions’ rankings, resulting in the assign-

ment of each prospective medical resident to one residency

program. See Compl. 9{ 15, 83-86. Plaintiffs allege that

this system eliminates a free and competitive market and

substitutes a centralized, anticompetitive allocation system

that assigns prospective resident physicians to a single,

specific and mandatory residency program. Plaintiffs

further allege that the defendants designed and imple-

mented this system and collectively agreed to comply with

it in violation of the antitrust laws. See id. J 83.

App. 12

Several specific features of this assignment system

allegedly serve to impose anticompetitive restraints on

medical residency hiring. Plaintiffs allege that a medical

student is required to enter into the Match if he or she

wishes to gain employment in a residency program accred-

ited by defendant Accreditation Council for Graduate

Medical Education (“ACGME”). See Compl. 771. An

individual’s participation in an ACGME-accredited resi-

dency program in turn allegedly is a prerequisite for

specialty certification by a member board of defendant

American Board of Medical Specialties (“ABMS”), an

Illinois not-for-profit corporation consisting of 24 recog-

nized medical specialty certification boards, upon comple-

tion of the residency. See id. J] 20, 69. Plaintiffs allege

that eventual specialty certification by an ABMS board is

considered critical to prospective residents inasmuch as

they desire to be “certified” to practice within a specialty

following the completion of their residencies. The practical

effect of this structure, plaintiffs charge, is that the vast

majority of medical students are compelled to participate

in the Match, which is a substitute for all aspects of

competitive individual negotiations and requires appli-

cants to commit contractually to any assigned position as a

condition of enrolling in the Match Program. See id. J{ 69,

86. Furthermore, certain implementing policing mecha-

nisms of the Match allegedly compel compliance with the

foregoing restraints. These alleged mechanisms include

the requirement that program participants immediately

report suspected policy violations to the NRMP and advise

the relevant organizational authorities of institution or

resident physician violations. See id. | 86(c).

In the second prong of the alleged conspiracy, plain-

tiffs assert that certain aspects of the aforementioned

App. 13

ACGME accreditation standards, with which the institu-

tional defendants allegedly voluntarily comply, function to

further restrict residency employment. Specifically, plain-

tiffs allege that the ACGME (1) has the authority to

regulate the number of employment positions in a resi-

dency program; (2) imposes substantial obstacles to the

ability of a resident to transfer employment frorn one

employer to another during the period of a residency,

thereby effectively making NRMP assignments permanent

for the duration of a residency; (3) encourages and/or

requires participation in the Match by an institution as a

condition of accreditation; and (4) directly reviews com-

pensation and other terms of employment with the pur-

poses of fixing and depressing them. See Compl. 7 88.

The third prong of the alleged conspiracy concerns the

exchange by defendants of information on resident com-

pensation and other terms of employment through surveys

and databases that plaintiffs allege has the purpose and

effect of standardizing and stabilizing compensation and

other terms of employment. See Compl. {{ 73-82. This

exchange allegedly occurs in two ways. First, the AAMC___

annually surveys members of its COTH Section seeking

compensation levels for the employment year, aggregates

the results into various categories and distributes its

findings in an annual report (the “COTH Survey” or

“Survey”). See id. {9 74-79. Second, hospitals and health

systems access similar information through an electronic

database known as the Fellowship and Residency Elec-

tronic Interactive Database (“FREIDA”), which is main-

tained by defendant American Medical Association

(“AMA”). See id. 4 80. Plaintiffs allege that this exchange

of information allows institutional defendants to fix

App. 14

resident salaries and benefits each year at depressed,

anticompetitive levels.

Plaintiffs charge that the execution of the Match

program, the enforcement of the ACGME-accreditation

standards, and the coordinated collection and distribution

of residency program compensation information together

produce a significant depression of residents’ salaries and

working conditions by removing residents’ ability to

achieve enhanced salaries and working conditions through

competition. See Compl. 7] 92-96. Plaintiffs allege that

defendants have violated Section 1 of the Sherman Act by

contracting, combining and conspiring to unreasonably

restrain trade and commerce. Plaintiffs filed this antitrust

action as a proposed class action and have moved to certify

both plaintiff and defendant classes. See Motion for Class

Certification, filed November 3, 2003. .

B. The February 11 Opinion and Order

In its February 11 Opinion and Order, the Court (1)

denied certain institutional defendants’ motion to dismiss

for lack of personal jurisdiction; (2) granted the motion to

dismiss for lack of personal jurisdiction of defendants

Washington University Medical Center, the American

Board of Medical Specialties and the Council of Medical

Specialty Societies; (3) denied defendant National Resi-

dent Matching Program’s motion to dismiss for lack of

subject matter jurisdiction under Rule 12(b)(1) of the

Federal Rules of Civil Procedure and its motion to compel

arbitration, and denied the motion to compel arbitration

filed by the American Medical Association; (4) denied the

motions to dismiss for failure to state a claim upon which

relief can be granted filed by the Association of American

App. 15

Medical Colleges and the Accreditation Council for Gradu-

ate Medical Education; and (5) granted the motions to

dismiss for failure to state a claim filed by the American

Hospital Association, the American Medical Association

and Yeshiva University.

Specifically, the Court first concluded that it had

personal jurisdiction over certain institutional defendants

under the “conspiracy theory” of personal jurisdiction. The

Court found that plaintiffs adequately had alleged “a

conspiracy to depress resident compensation between,

inter alia, those institutional defendants that participated

in the Match and the NRMP” and that certain acts in

furtherance of the conspiracy had taken place in the

District of Columbia. See Jung v. Association of American

Medical Colleges, 300 F. Supp. 2d at 142. The Court

further concluded that it did not have personal jurisdiction

over those moving defendants that plaintiffs had not

adequately alleged participated in the conspiracy. See id.

at 143. Second, the Court denied defendant NRPM’s

motion to compel arbitration of those elements of the

conspiracy claim that concerned the Match, concluding

that the Supreme Court’s decision in Continental Ore Co.

v. Union Carbide & Carbon Corp., 370 U.S. 690 (1962),

and its progeny manifested “a clear and compelling coun-

tervailing interest in the comprehensive adjudication of

conspiracy claims brought under the Sherman Act.” Jung

v. Association of American Medical Colleges, 300 F. Supp.

2d at 156. The Court denied the motion of the American

Medical Association to compel arbitration on similar

grounds. See id.

Third, the Court denied the motions to dismiss for

failure to state a claim filed by the Association of American

Medical Colleges and the Accreditation Council for Graduate

App. 16

Medical Education, concluding that “plaintiffs adequately

have alleged a common agreement to displace competition

in the recruitment, hiring, employment and compensation

of resident physicians and to impose a scheme of restraints

that has the purpose and effect of fixing, artificially

depressing, standardizing and stabilizing resident physi-

cian compensation and other terms of employment among

certain defendants” and that the moving defendants

participated in that conspiracy. Jung v. Association of

American Medical Colleges, 300 F. Supp. 2d at 173-74. In

considering the Rule 12(b)(6) motions, the Court assessed

the conspiracy allegations holistically rather then parsing

out and considering those allegations that expressly

related to the individual moving defendants. See id. at

160-61 (citing Continental Ore Co. v. Union Carbide &

Carbon Corp., 370 U.S. at 699, and American Tobacco Co.

v. United States, 328 U.S. 781, 809 (1946)).’

C. The New Legislation

On April 10, 2004, President Bush signed into law the

Pension Funding Equity Act of 2004, Pub. L. No. 108-218,

118 Stat. 596 (2004), which includes Section 207 entitled

“Confirmation of Antitrust Status of Graduate Medical

Resident Matching Programs,” now codified as 15 U.S.C.

§ 37b (“Section 207”). At its core, Section 207 provides that

“{it]} shall not be unlawful under the antitrust laws to

sponsor, conduct, or participate in a graduate medical

education residency matching program, or to agree to

* The Court concluded that plaintiffs failed to allege adequately

that defendants AHA, AMA and Yeshiva University participated in the

conspiracy. See Jung v. Association of American Medical Colleges, 300 F.

Supp. 2d at 173-74.

App. 17

sponsor, conduct, or participate in such a_program.” 15

U.S.C. § 37b(b)(2) (the “substantive” provision). In addi-

tion, the statute provides that “[e]vidence of any of the

conduct described in the preceding sentence shall not be

admissible in Federal court to support any claim or action

alleging a violation of the antitrust laws.” Jd. (the “eviden-

tiary prohibition”). The stated purposes of the law are to

“confirm that the antitrust laws do not prohibit sponsor-

ing, conducting, or participating in a graduate medical

education residency matching program, or agreeing to do

so; and ... [to] ensure that those who sponsor, conduct or

participate in such matching programs are not subjected

to the burden and expense of defending against litigation

that challenges such matching programs under the anti-

trust laws.” 15 U.S.C. § 37b(a)(2XA)-(B). Section 207

creates a price-fixing exemption for a certain class of

antitrust claims, providing that “[nJothing in this section

shall be construed to exempt from the antitrust laws any

agreement on the part of 2 or more graduate medical

education programs to fix the amount of the stipend or

other benefits received by students participating in such

programs.” 15 U.S.C. § 37b(b)(3).

Section 207 took effect on April 10, 2004, and applies

“to conduct whether it occurs prior to, on, or after such

date of enactment” and “to all judicial and administrative

actions or other proceedings pending on such date of

enactment.” 15 U.S.C. § 37b(c). Defendants argue that

judgment must be entered on their behalf because Section

207 precludes plaintiffs from pursuing their claim in light

of the Court’s conclusion in the February 11 Opinion and

Order that plaintiffs allege a single overarching conspiracy

with three interrelated prongs with the Match program at

its center. Section 207 requires this conclusion, defendants

App. 15

argue, both by expressly exempting the Match program

and its participants from the antitrust laws and by forbid-

ding the consideration of evidence related to any entities’

sponsorship, conduct, or participation in a graduate

medical education residency matching program, or agree-

ment to sponsor, conduct, or participate in such a program,

in support of any antitrust claim. See Defendants’ Motion

for Judgment on the Pleadings (“Defs.’ Mot.”) at 5-6.

Defendants further argue that the legislation expressly

applies to this action and that the “price-fixing” clause

does not save plaintiffs’ claim. See id. at 6-7.

II. DISCUSSION

A. Procedural Posture of Defendants’ Motion

Plaintiffs first argue that defendants’ motion for

judgment on the pleadings is premature because fifteen of

the moving defendants have not yet answered the com-

plaint. See Plaintiffs’ Response Opposing Defendants’ Rule

12(c) Motion for Judgment on the Pleadings (“Pls.’ Opp.”)

at 2-3. Rule 12(c) of the Federal Rules of Civil Procedure

states that “[alfter the pleadings are closed but within

such time as not to delay the trial, any party may move for

judgment on the pleadings.” FED. R. Civ. P. 12(c). This

argument must fail, however, because if a party files a

Rule 12(c) motion before its answer, the Court may treat it

as a motion to dismiss under Rule 12(b)(6) for failure to

state a claim. See Dale v. Executive Office of the President,

164 F. Supp. 2d 22, 24 (D.D.C. 2001) (citing Seber v. Unger,

881 F. Supp. 323, 325 n.2 (N.D. Ill. 1995)); Moran v.

Peralta Community College Dist., 825 F. Supp. 891, 894

(N.D. Cal. 1993) (considering Rule 12(c) motion even

though all defendants had not yet answered because

App. 19

otherwise plaintiff could avoid Rule 12(c) motion simply by

not serving one defendant).

No prejudice to any party results from treating a Rule

12(c) motion as a Rule 12(b)(6) motion because the stan-

dard of review for motions for judgment on the pleadings

under Rule 12(c) of the Federal Rules of Civil Procedure is

essentially the same as that for motions to dismiss under

Rule 12(b)(6). See Ramirez v. Dep’t of Corrections, 222 F.3d

1238, 1240-41 (10th Cir. 2000); Haynesworth v. Miller, 820

F.2d 1245, 1254 (D.C. Cir. 1987); Transworld Products Co.

v. Canteen Corp., 908 F. Supp. 1, 2 (D.D.C. 1995). On

either motion, the Court may not rely on facts outside the

pleadings and must construe the complaint in the light

most favorable to the non-moving party. See Kowal v. MCI

Communications Corp., 16 F.3d 1271, 1276 (D.C. Cir.

1994). Granting judgment on the pleadings pursuant to

Rule 12(c) or a motion to dismiss for failure to state a

claim under Rule 12(b)(6) is warranted only if it appears

beyond doubt, based on the allegations contained in the

complaint, that “the plaintiff can prove no set of facts in

support of his claim which would entitle him to relief.”

Conley v. Gibson, 355 U.S. 41, 45-46 (1957). See also Alicke

v. MCI Communications Corp., 111 F.3d 909, 912 (D.C. Cir.

1997).

Fourteen of the moving defendants have filed an-

swers. The remaining 15 movants have noi filed an

answer or a motion to dismiss pursuant to Rule 12(b)(6).

Although certain defendants in this latter group filed

motions to dismiss for lack of personal jurisdiction under

* Contrary to the allegations in plaintiffs’ brief, defendants

ACGME and AAMC have filed answers to the complaint.

App. 20

Rule 12(b)(2), such motions do not preclude them from

later filing motions to dismiss for failure to state a claim.

See Fep. R. Civ. P. 12(g) (“If a party makes a motion under

this rule but omits therefrom any defense or objection then

available to the party which this rule permits to be raised

by motion, the party shall not there:.rter make a motion

based on the defense or objection so omitted, except a

motion as provided in subdivision (h)(2) hereof on any of

the grounds there stated.”) (emphasis added). Rule 12(h)(2)

expressly mentions a motion to dismiss for failure to state

a claim.

Based on the foregoing authorities, the Court con-

cludes that it is appropriate for it to proceed with consid-

eration of defendants’ motion under Rule 12(c) for those

defendants that have answered the complaint and under

Rule 12(b)(6) for those defendants that have not. The

motion is not premature as to any defendant.

B. The Impact of Section 207

Defendants first argue that “Congress has now made

clear through Section 207 that it is not unlawful under the

antitrust laws to sponsor, conduct, or participate in the

Match or to agree to sponsor, conduct or participate in the

Match.” Defs.’ Mot. at 6. While that may be true, that

alone is insufficient because plaintiffs do not allege in

their complaint that the existence of and/or participation

in the Match is a per se violation of the antitrust laws.

Instead, plaintiffs argue that the Match, in combination

with the dissemination of the COTH Survey and the en-

forcement of the ACGME accreditation standards, functions

to suppress competition in resident hiring and compensa-

tion, resulting in depressed salaries and benefits. See Jung

App. 21

uv. Association of American Medical Colleges, 300 F. Supp.

2d at 161-62, 167.’ This isa critical distinction, because, as

the Court noted in its February 11 Opinion and Order, if

lawful acts are used as the means to effectuate an anti-

trust conspiracy, the conspiracy itself is still unlawful. See

id. at 160-61. The Supreme Court has concluded that “[i]t

is not of importance whether the means used to accom-

plish the unlawful objective are in themselves lawful or

unlawful. Acts done to give effect to the conspiracy may be

in themselves wholly innocent acts. Yet, if they are part of

the sum of the acts which are relied upon to effectuate the

conspiracy which the statute forbids, they come within its

prohibition.” American Tobacco Co. v. United States, 328

U.S. at 809. See also Continental Ore Co. v. Union Carbide

& Carbon Corp., 370 U.S. at 707 (“acts which are in and of

themselves legal lose that character when they become

constituent elements of an unlawful scheme.”). Accord-

ingly, congressional confirmation that the Match program

or participation in the Match program does not constitute

a per se violation of the antitrust laws in the substantive

provision of Section 207 does not defeat plaintiffs’ anti-

trust claim.

The second sentence of Section 207(b)(2) goes on to

provide, however, that “[e]vidence of any of the conduct

described in the preceding sentence shall not be admissi-

ble in Federal court to support any claim or action alleging

a violation of the antitrust laws.” 15 U.S.C. § 37b(b)(3).

* Interestingly, in an effort to make out long-arm jurisdiction,

plaintiffs did attempt to suggest at oral argument on defendants’ -

motion to dismiss that the tortious injury (if not the antitrust injury) to

plaintiffs was the Match itself but, in view of plaintiffs’ complaint, the

Court rejected the argument. See Jung v. Association of American

Medical Colleges, 300 F. Supp. 2d at 136.

App. 22

Defendants argue that this provision prohibits plaintiffs

from “us{ing] allegations related to the Match to support

any antitrust claim, price-fixing or otherwise. Because

plaintiffs’ ‘single’ claim depends on evidence that defen-

dant sponsored, conducted, or participated in the Match,

Section 207 is fatal to their complaint, and it should be

dismissed.” Defs.’ Mot. at 7. Plaintiffs respond to this

charge in two ways.

First, plaintiffs argue that “(the February 11 Order

and Opinion] upheld plaintiffs’ price-fixing conspiracy

claim without significant reliance on the allegations

regarding the Match.” Pls.’ Opp. at 9-10. Accordingly,

plaintiffs argue, the evidentiary prohibition does not

defeat plaintiffs’ claim. In support of this assertion, plain-

tiffs cite those portions of the February 11 Opinion in

which the Court assessed the conspiracy claim as it relates

to the AAMC and the ACGME and the allegations regard-

ing the defendants’ wage information and exchange and

accreditation activities. See id. at 9. They argue-that the

Court focused not on the Match, but on the other prongs of

the alleged conspirecy almost entirely. See id. at 9-10. In

so arguing, however, plaintiffs fail to consider that the

Court’s conspiracy analysis entailed two steps, the first of

which relied greatly on allegations related to the Match.

In considering the original Rule 12(b)(6) motions, the

first question the Court asked was whether plaintiffs

adequately had alleged that an antitrust conspiracy

existed. In concluding that they had, the Court focused on

the highly intertwined, three-pronged nature of the

alleged conspiracy, and relied in large part on the primary

role the Match allegations played in the conspiracy claim.

See Jung v. Association of American Medical Colleges, 300 -

F. Supp. 2d at 162 (concluding that “plaintiffs adequately

App. 23

have alleged a common agreement ... among a number of

the named organizational defendants and those institu-

tional defendants that participated in the Match Program”)

(emphasis added). In the second prong of the Rule 12(b)(6)

analysis the Court assessed whether plaintiffs had alleged

adequately that the individual defendants. participated in

the conspiracy. While -the Court did then focus on the

allegations of the individual defendant at issue — in the .

case of the AAMC, the allegations concerning the COTH

Survey; with respect to the ACGME, the allegations that

related to that defendant’s accreditation standards — such

“individualized” analysis does not change the fact that the

Court first had concluded that piaintiffs had alleged an

intertwining three-pronged conspiracy with the Match at

its core. Plaintiffs’ assertion that the Court considered the

claims of the AAMC and the ACGME without reference to

the Match is simply incorrect.

Second, plaintiffs argue that “[e]ven without the

Match allegations” the complaint satisfies “the three

elements of a properly pleaded claim under Section 1 of

the Sherman Act,” Pls.’ Opp. at 10-11, and that even

without the Match-related allegations, the complaint still

alleges a price-fixing conspiracy. See id. at 11. This argu-

ment is unsupported by the complaint that plaintiffs filed

in this case, however. The complaint does not allege a

price-fixing conspiracy but a single overarching integrated

antitrust conspiracy with the Match as its centerpiece. See

Compl. 7493 (alleging three-pronged conspiracy), 58

(defendant class is defined in part by “all NRMP Institu-

tional Participants”), 83-86 (alleging anticompetitive

function of Match). Even the allegations that pertain to

the ACGME accreditation standards rely in part on

Match-related allegations. See id. ] 88(c) (“the ACGME

App. 24

encourages and/or requires participation in the NRMP as

a condition of accreditation”). Plaintiffs’ argument also is

inconsistent with the Court’s characterization of plaintiffs’

claim in the February 11 Opinion and Order. See Jung v.

Association of American Medical Colleges, 300 F. Supp. 2d

at 161-62; see id. at 166-67. In fact, plaintiff’s current

position is inconsistent with plaintiffs’ own previous

position as set forth in their earlier filings. In opposing

NRMP’s motion to compel arbitration, for example, plain-

tiffs asserted that they allege: i

a single, overarching conspiracy and the

gravamen of plaintiffs’ claim against NRMP is

that it combined and conspired with others to

displace competition in the market for resident

services and to fix and stabilize residents’ wages.

The conspiracy which plaintiffs allege involves

conduct significantly beyond particular features

of the operation of the match program. While

plaintiffs refer to certain conduct related to the

operation of the match and its effects as some

evidence of how the defendants carry out their

overarching conspiracy to depress residents’

wages, the complaint makes clear that the anti-

competitive conduct related to the Match is not

limited solely to the NRMP and that the anti-

competitive conduct related to the match neces-

sarily interrelates with the other anticompetitive

conduct alleged... .

Plaintiffs’ Consolidated Brief Opposing Defendants’ Motion

to Dismiss and to Compel Arbitration at 5 (underscore in

original, italics added). See also Plaintiffs’ Brief in Support

of Their Motion for Certification of a Plaintiff Class and

Certification of a Defendant Class at 2; 5.

App. 25

Finally, while arguing with reference to the allega-

tions related to the other two prongs of the alleged con-

spiracy that the conspiracy claim is legally sufficient

without consideration of the Match-related claims, plain-

tiffs make no attempt to demonstrate that absent the

Match allegations, the Court in fact would have come to

the same conclusion that a conspiracy existed based solely

on the remaining prongs. Moreover, the burden cannot be

on the Court to effectively rewrite the complaint and

consider it, as reconfigured, without the central Match-

related allegations in order to evaluate plaintiffs’ argu-

ment here.’ While there may be a “tree ... without the

Match limb,” Pls.’ Opp. at 14-15, plaintiffs’ conclusory

argument does not convince the Court that it is so.° The

Court concludes that the allegations concerning the Match

* Nor would such an endeavor by the Court be consistent with the

February 11 Opinion and Order. See Jung v. Association of American

Medical Colleges, 300 F. Supp. 2d at 155 (“conspiracy allegations in

antitrust cases cannot be compartmentalized and considered in

isolation ‘as if they were separate lawsuits, thereby overlooking the

conspiracy claim itself’ ”) (quoting Jn re Fine Paper Antitrust Litigation,

685 F.2d 810, 822 (3d Cir. 1982)).

* The Court’s dismissal of the AMA in the February 11 Opinion and

Order is irrelevant. Plaintiffs argue that “the Order shows — indeed

establishes as the law of this case — that legal failure of one component

of defendants’ alleged conspiracy may lead to the dismissal of any

defendant. only involved in that component, but does not lead to the

dismissal of the defendants involved in the remaining components.”

Pls.’ Opp. at 13 (emphasis in original). Plaintiffs base this argument on

the Court’s conclusion that the single allegation regarding the FREIDA

database, in the absence of any other allegations relating to AMA

participation in the conspiracy, “[did] not lend support to an inference

that the AMA participated in the alleged conspiracy.” See Jung v.

Association of American Medical Colleges, 300 F. Supp. 2d at 169. The

allegations concerning the Match program, by contrast, permeate the

complaint and, as the Court concluded, serve as a cornerstone of the

conspiracy. See id. at 162.

App. 26

and the institutional defendants’ participation in the

Match are so interdependent that the Court cannot sepa-

rate them from the remaining allegations. Because Con-

gress has prevented this or any other Federal court from

considering evidence of Match-related conduct, the Court

necessarily concludes that plaintiffs’ complaint must be

dismissed under 15 U.S.C. § 37b(b)\(3).

C. The “Savings” Clause

Plaintiffs next argue that notwithstanding the “evi-

dentiary” prohibition of Section 207, the clause exempting

price-fixing claims preserves their complaint. Section 207

provides that “[njothing in this section shall be construed

to exempt from the antitrust laws any agreement on the

part of 2 or more graduate medical education programs to

fix the amount of the stipend or other benefits received by

students participating in such programs.” 15 U.S.C.

§ 37b(f). Plaintiffs interpret this clause to exclude from the

antitrust exemption all claims that allege the price-fixing

of resident wages, including their own. See Pls.’ Opp. at 23.

Plaintiffs construe this exclusion too broadly. Section 207

does not exclude all price-fixing claims related to resident_

compensation; it only excludes price-fixing claims that

allege agreements between two or more institutional

defendants to fix resident stipends and other benefits.

There is a difference, and plaintiffs’ complaint demonstrates

that difference. Their pleading does not allege an agreement

among residency programs to fix wages paid to residents.

It alleges that an agreement exists between institutional

defendants and numerous organizational defendants to

suppress competition and depress compensation, and the

allegations related to the organizational defendants — the

Match Program, the AAMC dissemination of information,

App. 27

and the ACGME accreditation standards — comprise the

heart of plaintiffs’ claim. See Jung v. Association of Ameri-

can Medical Colleges, 300 F. Supp. 2d at 161-62.

In an attempt to save their claim, plaintiffs also

maintain that the Court must conclude that the savings

clause is exempt from the evidentiary prohibition of

Section 207, arguing that the restrictions on the admissi-

bility of certain evidence in subsection (b)(2) cannot apply

to price-fixing suits provided for in subsection (b)(3)

because the subsection states that “nothing” in Section 207

shall provide exemptions from price-fixing claims. See Pls.’

Opp. at 26. Again, plaintiffs misread the statute. Applica-

tion of the evidentiary provision to the savings clause does

not function to preclude the excepted price-fixing claims.

Application of the provision merely forbids invocation of

the Match program as evidence in any antitrust suit,

including one involving allegations of price-fixing; but

price-fixing claims unrelated to the Match as described in

Section 207(b)\(3) are not affected.

D. Constitutional Challenges to Section 207

Plaintiffs understandably are frustrated. They won a

significant victory in court; Congress now has snatched it

away. As a result, they have spent a significant portion of

their brief discussing the “highly peculiar” legislative path

Section 207 took before its passage. Pls’ Opp. at 17. They

point out that there were no hearings, no testimony, no

significant debate, and vigorous opposition from those few

Senators and Representatives who cared enough or were

importuned enough to focus on the Match legislation. See

id. at 16-22. “By furtively attaching the Match Legislation

as a rider to an unrelated bill on the eve of imminent

App. 28

passage rather than introducing legislation through

normal procedures, defendants were able to avoid public

and Congressional awareness and avoid opposition to their

scheme.” Jd. at 21. As Bismarck suggested, “the making of

laws, like the making of sausage, is something from which

the fastidious person would often be well advised to avert

his or her gaze.” ACLU v. Capitol Square Review Advisory

- Board, 243 F.3d 289, 309 n.21 (6th Cir. 2001); Community

Nutrition Institute v. Block, 749 F.2d 50, 51 (D.C. Cir.

1984) (same). Absent a valid constitutional challenge to a

law passed by Congress and signed by the President,

however, the responsibility of the courts is to interpret and

apply the statute, not to second-guess. See Mistretta v.

United States, 488 U.S. 361, 384 (1989) (“When this Court

is asked to invalidate a statutory provision that has been

approved by both Houses of Congress and signed by the

President, . .. it should only do so for the most compelling

constitutional reasons.”) (quoting Bowsher v. Synar, 478

U.S. 714, 736 (1986) (Stevens, J., concurring)); Nuclear

Energy Institute, Inc. v. EPA, No. 01-1258, 2004 U.S. App.

LEXIS 14186, *144 (D.C. Cir. July 9, 2004) (“Congress has

settled the matter, and we, no less than the parties, are

bound by its decision.”).

Plaintiffs challenge the constitutionality of Section

207 on several grounds. Upon consideration of the parties’

arguments, the Court concludes that none of plaintiffs’

arguments saves plaintiffs’ conspiracy claim.

1. Separation of Powers

Plaintiffs charge that interpreting Section 207 to

require disposition of this action in defendants’ favor

would amount to “a legislative adjudication of this pending

App. 29

case” in violation of “bedrock separation of powers princi-

ples” because “Congress may not ... direct decisions in

pending cases.” Pls.’ Opp. at 28. Plaintiffs rely primarily

on the Supreme Court’s decision in United States v. Klein,

80 U.S. 128 (1871). Klein concerned a suit seeking pro-

ceeds from cotton seized from a Confederate sympathizer

and sold by the Union army during the Civil War. The

petitioner filed the suit pursuant to a federal statute that

allowed recovery of seized property by owners if they

provided proof of loyalty to the Union, which loyalty, the

Court previously had determined, could be proven by

evidence of a presidential pardon of the owner for any

support he offered to the Southern rebellion. See id. at

142-43. The owner of the cotton had received such a

pardon. After petitioner had recovered in the Court of

Claims, however, Congress passed another statute that

precluded the use of any pardons given to those who

participated in the rebellion to demonstrate proof of

loyalty, and provided that acceptance of such a pardon in

fact demonstrated disloyalty. Congress also directed that

upon presentation of proof of such a pardon, the Court of

Claims and the Supreme Court must dismiss the property

claim for want of jurisdiction. See id. at 143-44.

The Supreme Court found the statute unconstitu-

tional in two respects. First, the Court determined that

Congress is prohibited from “prescrib[ing] a rule for the

decision of a cause in a particular way” in cases “pending

before [the Judicial department of the government].”

United States v. Klein, 80 U.S. at 146. As noted, the Court

of Claims had already rendered judgment for the claimant,

and an appeal had been taken to the Supreme Court. The

Supreme Court found the statute at issue unconstitutional

because it had the effect of forbidding the Supreme Court

App. 30

(and for the future, the Court of Claims) from “giv[ing]

effect to the evidence which, in [the Court’s] judgment,

such evidence should have, and .. . direct[ing it] to give it

an effect precisely [to] the contrary.” Jd. at 147. In so

concluding, the Court distinguished those cases in which

“new circumstances” are created under the statute that

have the effect of determining the outcome of the case. Id.

Second, the statute impaired the effect of the Presidential

pardon and therefore infringed upon the constitutional

power of the Executive. It was clear to the Supreme Court

that “the legislature cannot change the effect of such a

pardon any more than the executive can change a law ~

[passed by the legislature].” Jd. at 147-48."

Plaintiffs argue that the evidentiary prohibition

enacted by Congress with respect to the Match cannot

stand under Klein because Congress “may not constitu-

tionally assume the judicial function of determining the

effect or weight to be given to evidence in a pending case”

by altering the rules of decision such that the alteration

directs disposition of the action in defendants’ favor. See

Pls. Opp. at 32.’ As the D.C. Circuit has noted, “Klein’s

* As later explained by the Supreme Court, the statute at issue in

Klein was unconstitutional in two respects: First, “it prescribed a rule of

decision in a case pending before the courts, and did so in a manner

that required the courts to decide a controversy in the Government's

favor.” Second, the statute infringed the constitutional power of the

President to issue pardons. United States v. Sioux Nation of Indians,

448 U.S. 371, 404-05 (1980).

’ Plaintiffs also argue that interpreting the substantive provision

of Section 207 to require the disposition of this lawsuit in defendants’

favor is unconstitutional. See Pls. Opp. at 30-31. In light of the Court’s

conclusion that Section 207 by its own terms does not direct judgment

for defendants, see Section II.B, supra, the Court does not reach this

argument.

App. 31

exact meaning is far from clear.” National Coalition to

Save Our Mall v. Norton, 269 F.3d 1092, 1096 (D.C. Cir.

2001). One thing is certain, however, and that is that

“[wlhatever the precise scope of Klein ... later decisions

have made clear that its prohibition does not take hold

when Congress ‘amend|[s] applicable law.’” Plaut v. Spend-

thrift Farm, Inc., 514 U.S. 211, 218 (1995). When “a

statute ‘compels changes in the law, not findings or results

under old law,’ it merely amends the underlying law, and

therefore is not subject to a Klein challenge.” Imprisoned

Citizens Union v. Prasse, 169 U.S. 178, 187 (3d Cir. 1999)

(quoting Robertson v. Seattle Audubon Society, 503 U.S.

429, 438 (1992)). See also Benjamin v. Jacobson, 124 F.3d

162, 174 (2d Cir. 1997) (“if legislation can be characterized

as changing the underlying law rather than as prescribing

a different outcome under pre-existing law, it will not

violate the separation of powers principle formulated in

Klein”).

The Court concludes_that_by enacting the statute

Congress changed the scope of permissible antitrust

claims that may be resolved by the Federal courts. Con-

gress exempted from antitrust-prosecution all claims that

directly challenge the legality of the Match and participa-

tion in the Match program by institutional defendants

under the antitrust laws, and prohibited the use in anti-

trust actions of evidence concerning the Match Program

and its participants. The plain language of the statute add

a new antitrust exemption to the antitrust laws and new

procedural or evidentiary restrictions on the prosecution of

certain antitrust actions. See 15 U.S.C. § 37b(b)(2).*° This

~ * Despite arguments to the contrary, the statute is not merely a

confirmation of prior existing law, the titles of Section 207, “Confirmation

(Continued on following page)

App. 32

change in or amendment to applicable antitrust law does

not, however, prescribe a different finding, conclusion

or result in the outcome of this or any other particular

antitrust case. It therefore does not run afoul of Klein.

The line between a statute that provides the standard

to which courts must adhere and a statute that compels a

specific result in a pending action at times is difficult to

draw. See Benjamin v. Jacobson, 124 F.3d at 174 (“The

distinction may in some cases be hard to discern.”); Axel

Johnson Inc. v. Arthur Andersen & Co., 6 F.3d 78, 81 (2d

Cir. 1993) (“The conceptual line between a valid legislative

change in law and an invalid act of adjudication is often

difficult to draw.”). In this case, however, the line is clear,

and the fact that Section 207 has application to actions

beyond this lawsuit only bolsters the Court’s conclusion

that the statute was amended. Section 207 precludes both

claims challenging the antitrust status of the Match

Program itself, and the consideration of evidence related

to the Match Program in actions brought under the anti-

trust laws. Accordingly, the Court concludes that plaintiffs

can find no refuge in Klein and its articulation of the

separation of powers doctrine.

of Antitrust Status of Graduate Medical Resident Matching Programs,”

and of subsection (b\2), “Confirmation of Antitrust Status,” and the

articulated purpose of subsection (a)(2)A) notwithstanding. “The title

of a statute ‘[is] of use only when [it] sheds light on some ambiguous

word or phrase’ in the statute itself.” Carter v. United States, 530 U.S.

255, 267 (2000) (quoting Pennsylvania Dept. of Corrections v. Yeskey,

524 U.S. 206, 212 (1998) (internal quotation omitted)) (brackets in

original). Here, the statute is unambiguous.

App. 33

2. Unconstitutional Taking

Plaintiffs next argue that dismissal of their complaint

under the evidentiary prohibition of Section 207 would

constitute an unlawful taking in violation of the Fifth

Amendment. Specifically, plaintiffs argue that with dis-

missal they will lose their property interest in their future

wages and working conditions. See Pls.’ Opp. at 36. These

lost increased wages and bettered working conditions can

only be considered “lost,” however, if plaintiffs succeed in

this action and wages in fact are increased. Otherwise,

there is no basis on which to assume that compensation

would increase in the future. The court of appeals has

made it clear that plaintiffs have no property interest in

their pending claim. Causes of actions only become action-

able property interests upon the entry of final judgment.

Adams v. Hinchma~, 154 F.3d 420, 424 (D.C. Cir. 1998) (a

cause of action “affords no definite or enforceable property

right until reduced to a final judgment”); Grimesy v. Huff,

876 F.2d 738, 744 (9th Cir. 1989) (“a party’s property right

in any cause of action does not rest until a final unreview-

able judgment is obtained.”) (internal quotations and

citation omitted) (emphasis in original). Similarly, to the

extent that plaintiffs implicitly assert that dismissal of

their complaint would constitute a taking in the form of

past wage loss stemming from defendants’ anticompetitive

behavior, those asserted lweses likewise are compeasable,

if at all, only upon entry of a final judgment.

3. Additional Constitutional Arguments

Plaintiffs also argue that dismissal of their antitrust

claim through the evidentiary restriction of Section 207

would violate their right to due process, their right to

access to the courts and their right to equal protection of

App. 34

the laws. Plaintiffs first raise a due process claim under

Logan v. Zimmerman Brush Co., 455 U.S. 422 (1982),

asserting that “exclusion of this concededly relevant

evidence would result in summary dismissal of plaintiffs’

entire claim at the pleading stage,” thereby denying them

the right to adjudication on the merits. Pls.’ Opp. at 53

(emphasis in original). The Supreme Court in Logan did

not conclude that litigants have a due process right to an

adjudication on the merits, however. Instead, the Court

concluded that it was a denial of due process to create a

cause of action in which parties have a property right and

then to allow the state to take that right away without

providing the party with any judicial forum. See id. at 429-

30. This case does not present the same situation, and

plaintiffs’ reliance on Logan therefore is misplaced. Sec-

tion 207 does not deny plaintiffs a forum in which to bring

their claim. Instead, the statute restricts the basis for an

antitrust cause of action, which is not an unconstitutional

restriction so long as there is a rational basis for the law,

as the Court discusses, infra at Section II.D.3.

Plaintiffs similarly argue that the evidentiary prohibi-

tion unconstitutionally prescribes their right to access to

the courts under the First Amendment. The constitutional

right of access is predicated on the existence of an underly-

ing claim, however. If the cause of action no longer exists,

the right to access cannot save the claim. As the Supreme

Court concluded in Christopher v. Harbury, 536 U.S. 403

(2002):

Whether an access claim turns on a litigating

opportunity yet te be gained or an opportunity

already lost, the very point of recognizing any ac-

cess claim is to provide some effective vindication

for a separate and distinct right to seek judicial

App. 35

relief for some wrong. However unsettled the ba-

sis of the constitutional right of access to courts,

our cases rest on the recognition that the right is

ancillary to the underlying claim, without which

a plaintiff cannot have suffered injury by being

shut out of court.

Id, at 414-15. Here, plaintiffs assert that dismissal of the

complaint under Section 207 effectively denies plaintiffs

access to the courts to adjudicate their claim. A more

proper construction of the effect of the statute is that it

effectively eliminates the cause of action in the first

instance. Plaintiffs’ “access to the courts” argument there-

fore is misplaced. Whether the congressional act was

constitutional is a separate question, to be discussed, infra

at Section II.D.3.

Plaintiffs next argue that the evidentiary prohibition

fails to comport with due process because “a special

evidentiary rule that applies only to litigants who seek to

include in their cases evidence relating to a matching

program — one that applies regardless of the merit of those

litigants’ claims — is an archetype of irrational legislation.”

Pls.’ Opp. at 36. As a preliminary matter, the Court notes

that there is a “strong deference accorded legislation in the

field of national economic policy,” Pension Benefit Guar-

anty Corp. v. R.A. Gray & Co., 467 U.S. 717, 729 (1984),

and “Congress has considerable leeway to fashion eco-

nomic legislation.” Eastern Enterprises v. Apfel, 524 U.S.

498, 528 (1998). As the Supreme Court has concluded,

“legislative Acts adjusting the burdens and benefits of

economic life come to the Court with a presumption of

constitutionality, and ... the burden is on one complaining

of a due process violation to establish that the legislature

has acted in an arbitrary and irrational way.” Eastern

App. 36

Enterprises v. Apfel, 524 U.S. at 524 (quoting Usery v.

Turner Elkhorn Mining Co., 428 U.S. 1, 15 (1976)). Accord-

ingly, the Court must assess whether the Congress acted

in an arbitrary and irrational way in enacting the eviden-

tiary prohibition of Section 207. Upon review of the poli-

cies expressly articulated in the statute, the Court

concludes that it did not.

Subsection (a) of Section 207 articulates the congres-

sional findings, purposes and intent justifying the exclu-

sion of the Match Program and participation in the Match

from the purview of the antitrust laws, both in actions

against the program and its participants and in actions

that more generally seek to demonstrate violation of the

antitrust laws by making allegations concerning the

Match. The subsection first references the historical

impetus for the creation of the Match, which include a

desire for efficiency, for fairness and for protection of

students’ early years of medical school. See 15 U.S.C.

§ 37b(a)(1)(A)-(D). The statute then provides:

Antitrust lawsuits challenging the matching

process, regardless of their merit or lack thereof,

‘have the potential to undermine this highly effi-

cient, pro-competitive, and long-standing process.

The costs of defending such litigation would di-

vert the scarce resources of our country’s teach-

ing hospitals and medical schools from their

crucial missions of patient care, physician train-

ing, and medical research. In addition, such costs

may lead to abandonment of the matching proc-

ess, which has effectively served the interests of

medical students, tcaching hospitals, and pa-

tients for over half a century.

15 U.S.C. § 37b(aX1XE). The intent behind the enactment

of Section 207 was to secure the continuation of the Match

App. 37

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 Court

cannot conclude that this protection, effectuated by ex-

empting the Match or its participants from antitrust

prosecution, is an irrational or arbitrary act on the part of

Congress.

Furthermore, if Congress’s specific intent was to

prevent use of funds in lawsuits that challenge the Match

either directly or indirectly under the antitrust laws, the

evidentiary prohibition is a rational means of actualizing

that protection of resources. The fact that application of

the statute effectively will end this litigation does not

make the law irrational or arbitrary. See National Coali-

tion to Save Our Mall v. Norton, 269 F.2d at 1097 (Con-

gress may enact legislation that affects pending actions so

long as it does so by amending the relevant law); Deck v.

Peter Romein’s Sons, Inc., 109 F.3d 383, 386 (7th Cir. 1997)

(“Congress’ power to effect a change in the law and to

make that change controlling as to pending cases is

beyond peradventure.”); National Juvenile Law Center,

Inc. v. Regnery, 738 F.2d 455, 465 (D.C. Cir. 1984) (“Pend-

ing cases are often affected by the actions of coordinate

branches of government. For instance, the general rule is

that, if Congress changes the law while a case is pending,

the courts are obligated to apply the law as they find it at

the time of judgment (including appellate judgment).”).

This reasoning also disposes of any additional argu-

ment that retroactive application of the statute to this

action violates plaintiffs’ due process rights. It cannot be

disputed that Congress intended that Section 207 apply to

this action. See 15 U.S.C. § 37b(c) (“[t]his section . . . shall

App. 38

apply to all judicial and administrative actions or other

proceedings pending on [the] date of enactment”). The

Court therefore must ask whether “the retroactive applica-

tion of a statute [is] supported by a legitimate legislative

purpose furthered by rational means.” Pension Benefit

Guaranty Corp. v. R.A. Gray & Co., 467 U.S. at 729. The

policies articulated by Congress in Section 207(a) (“Find-

ings and Purposes”) provide the bases for the conclusion

that retroactive application of the statute is a rational

means to effect these purposes. With Section 207, Con-

gress intended to protect the Match Program and its

participants from the cost of defending antitrust actions

that challenge the Match. Clearly, this lawsuit is such an

action, and application of the statute to this action accom-

plishes Congress’s goal of conserving the resources of the

medical education community. While plaintiffs disagree

with many of the “findings” of Congress, particularly

because they were made without the benefit of any con-

gressional hearings, see supra at Section II.D, and ques-

tion the policies underlying the statute, the findings

themselves are not irrational and there is a rational

connection between the findings made and the policies

enacted. See Hammond v. United States, 786 F.2d 8, 13

(1st Cir. 1986) (plaintiff has not met burden of showing

that statute is “arbitrary and irrational in purpose and

effect” and not “reasonably related to a legitimate congres-

sional purpose”).

Plaintiffs raise a similar claim that Section 207

violates their equal protection rights. As the Supreme

Court provided in FCC v. Beach Communications, Inc.,

508 U.S. 307 (1993), however, “[iJn areas of social and

economic policy, a statutory classification that neither

proceeds along suspect lines nor infringes fundamental

App. 39

constitutional rights must be upheld against equal protec-

tion challenge if there is any reasonably conceivable state

of facts that could provide a rational basis for the classifi-

cation.... Where there are ‘plausible reasons’ for Con-

gress’ action, ‘our inquiry is at an end.’” Jd. at 313

(internal quotations and citations omitted). In the absence

of any argument that plaintiffs are members of a suspect

class or that their claim asserts infringement of a constitu-

tional right, plaintiffs’ equal protection argument fails on

the same basis as did their due process claim. See

Calloway v. District of Columbia, 216 F.3d 1, 8-9 (D.C. Cir.

2000) (where plaintiffs are not members of suspect class,

equal protection challenge is reviewed under rational basis

standard); Hammond v. United States, 786 F.2d at 15

(failing to allege a suspect class, plaintiffs’ equal protection

argument fails on same basis as due process analysis). And

“rational-basis review in equal protection analysis ‘is not a

license for courts to judge the wisdom, fairness, or logic of

legislative choices.’ ... [Clourts are compelled under

rational-basis review to accept a legislature’s generaliza-

tions even when there is an imperfect fit between means

and ends.” Heller v. Doe, 509 U.S. 312, 319, 321 (1993)

(quoting FCC v. Beach Communications, Inc., 508 U.S. at

318).

Ii]. CONCLUSION

For the foregoing reasons, in view of the enactment of

Section 207 by Congress, the Court concludes that with

respect to the 14 defendants that have filed answers it

must grant their motion for judgment on the pleadings

under Rule 12(c) of the Federal Rules of Civil Procedure,

and, with respect to the remaining 15 movants it must

treat their motion as a motion for failure to state a claim

App. 40

under Rule 12(b)(6) and grant that motion. The Court will

deny all other pending motions as moot.’ A separate Order

consistent with this Opinion will issue this same day.

SO ORDERED.

PAUL L. FRIEDMAN

DATE: United States District Judge

* Had the Court not granted the instant motion, it would have

granted the motion of certain defendants to certify an immediate appeal

under 28 U.S.C. § 1292(b).

App. 41

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

PAUL JUNG, M.D., et al., )

Plaintiffs,

v.

ASSOCIATION OF

AMERICAN MEDICAL

COLLEGES, et al.,

Defendants.

Civil Action No. 02-0873 (PLF)

Ne eee eee ee ee”

ORDER AND JUDGMENT

(Filed Aug. 12, 2004)

For the reasons stated in the separate Opinion issued

this same day, it is hereby

ORDERED that the motion for judgment on the

pleadings under Rule 12(c) of the Federal Rules of Civil

Procedure is GRANTED with respect to the 14 defendants

that have filed answers; it is

FURTHER ORDERED that with respect to the

remaining 15 movants that have not yet filed answers, the

motion for judgment on the pleadings shall be treated as a

motion to dismiss for failure to state a claim under Rule

12(b\6) of the Federal Rules of Civil Procedure, and it is

GRANTED; it is

FURTHER ORDERED that defendant National

Resident Matching Program’s motion to strike plaintiffs’

statement is DENIED as moot; it is

FURTHER ORDERED that defendant National

Resident Matching Program’s motion to strike plaintiffs’

App. 42

response opposing defendant NRMP’s motion for protec-

tive order is DENIED as moot; it is

FURTHER ORDERED that the consent motion for

entry of a stipulated order on experts’ discovery is DE-

NIED as moot; it is

FURTHER ORDERED that plaintiffs’ motion for class

certification is DENIED as moot; it is

FURTHER ORDERED that defendants’ motion to

compel class discovery is DENIED as moot; it is

FURTHER ORDERED that plaintiffs’ motion to

amend or correct order staying class discovery is DENIED

as moot; it is

FURTHER ORDERED that plaintiffs’ motion for a

protective order is DENIED as moot;

FURTHER ORDERED that plaintiffs’ amended

motion for class certification is DENIED as moot; it is

FURTHER ORDERED that defendant National

Resident Matching Program’s motion to stay proceedings

pending appeal is DENIED as moot; it is

FURTHER ORDERED that certain defendants’

motion for a certificate of appealability is DENIED as

moot; it is

FURTHER ORDERED that defendants’ motion to

stay proceedings pending appeal is DENIED as moot; it is

FURTHER ORDERED that plaintiffs’ motion to

amend the complaint is DENIED as moot; it is

App. 43

FURTHER ORDERED that certain defendants’

motion to reconsider the Rule 12(b)(2) jurisdiction ruling is

DENIED as moot; it is

FURTHER ORDERED that judgment on the plead-

ings is entered for defendants and the case is DISMISSED

for failure to state a claim; and it is

FURTHER ORDERED that this Order and Judgment

shall constitute a FINAL JUDGMENT in this case. This is

a final appealable order. See Rule 4(a), Fed. R. App. P.

SO ORDERED.

PAUL L. FRIEDMAN

DATE: United States District Judge

App. 44

226 F.R.D. 7

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

PAUL JUNG, MLD.., et al.,

)

ies )

Plaintiffs, ) Civil Action No.

v. ) 02-0873(PLF)

ASSOCIATION OF AMERICAN

MEDICAL COLLEGES, et ail., )

Defendants. )

MEMORANDUM OPINION AND ORDER

(Filed Jan. 25, 2005)

On August 12, 2004, this Court entered judgment for

the fourteen defendants who had filed answers and dis-

missed plaintiffs’ claims against the remaining fifteen

movants pursuant to Rule 12(b)(6). This ruling was in

response to the recent enactment by Congress and subse-

quent signing into law by President George W. Bush of the

Pension Funding Equity Act of 2004, Pub. L. No. 108-218,

118 Stat. 596 (2004), which includes a provision entitled

“Confirmation of Antitrust Status of Graduate Medical

Resident Matching Programs,” an amendment to the

antitrust laws that has been codified as 15 U.S.C. § 37b

(“Match legislation”). See Jung v. Association of American

Medical Colleges, 339 F. Supp. 2d 26 (D.D.C.2004).

Plaintiffs have filed a motion under Rule 59(e) of the

Federal Rules of Civil Procedure requesting that the Court

“alter or amend its judgment to render the dismissal of

plaintiffs’ complaint without prejudice and non-final in

order to permit the plaintiffs to file an amended complaint

App. 45

asserting antitrust claims based on defendants’ activities

other than the Match, including the defendants’ informa-

tion exchanges and wage-restrictive accreditation rules,

policies and procedures.” See Plaintiffs’ Rule 59(e) Motion

to Alter or Amend the Judgment and Rule 15(a) Motion for

Leave to Amend Their Complaint (“Mot.”) at 1. Upon

consideration of plaintiffs’ motion, defendants’ opposition,

plaintiffs’ reply, defendants’ surreply and plaintiffs’ sur-

surreply, the Court concludes that plaintiffs’ motion should

be denied.

“{(Olnce a final judgment has been entered, a court

cannot permit an amendment [of the complaint under

Rule 15(a) of the Federal Rules of Civil Procedure] unless

the plaintiff ‘first satisfies Rule 59(e)’s more stringent

standard’ for setting aside that judgment.’” Ciralsky v.

CIA, 355 F. 3d 661, 673 (D.C. Cir. 2004) (quoting Firestone

v. Firestone, 76 F. 3d 1205, 1208 (D.C. Cir. 1996)). Rule

59(e) motions “are disfavored and relief from judgment is

granted only when the moving party establishes extraor-

dinary circumstances.” Niedermeier v. Office of Max S.

Baucus, 153 F. Supp. 2d 23, 28(D.D.C. 2001). “A motion to

alter or amend a judgment under Rule 59(e) . . . will not be

granted unless there is an ‘intervening change of control-

ling law, the availability of new evidence, or the need to

correct a clear error or prevent manifest injustice.” Koch

vu. McPhie, Civil Action No. 01-0875, 2004 U.S. Dist. LEXIS

14315, *1-2 (D.D.C. July 1, 2004) (quoting Firestone uv.

Firestone, 76 F. 3d at 1208). “Rule 59(e) motions ‘may not

be used to relitigate old matters, or to raise arguments or

present evidence that could have been raised prior to the

entry of judgment.’” Niedermeier v. Office of Max S.

Baucus, 153 F. Supp. 2d at 28 (quoting 11 CHARLES ALAN

App. 46

WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE & PRO-

CEDURE § 2810.1 (2d ed. 1995)).

Defendants argue that “[p}laintiffs do not suggest that

the Court committed ‘clear error’ in entering judgment

against them, that new evidence became available after

judgment was entered, or that a change in controlling law

warrants reconsideration of the Court’s conclusions.” See

Defendants’ Opposition to Plaintiffs’ Rule 5%e) Motion to

Alter or Amend Judgment and Rule 15(a) Motion for Leave

to File Amended Complaint (“Opp.”) at 2. Plaintiffs’ reply

clarifies their position that the Rule 59(e) motion should |

be granted because (a) the Match legislation was a change

in controlling law, and (b) plaintiffs will suffer “manifest

injustice” if the motion for reconsideration is not granted.’

Although the Court agrees with plaintiffs that the

Match legislation is a “change in controlling law,” that

change took place in April of 2004, several months before

the Court issued its August 2004 Opinion entering judg-

ment for certain defendants and dismissing the case with

respect to the remainder. Plaintiffs had both the time and

the opportunity to request leave to amend their complaint

prior to the Court’s entry of judgment, but chose not to. “It

is well established that plaintiffls] cannot resuscitate

[their] case post-dismissal by [filing a Rule 59(e) motion]

alleging facts or legal theories that were available to

[them] at the inception of the case,” or “that could have

* Defendants also argue that plaintiffs’ motion should be denied

because plaintiffs withdrew their original argument in their reply and

put forward two new arguments instead. Defendants therefore main-

tain that plaintiffs’ arguments are untimely under Rule 59(e). Because

the Court finds plaintiffs’ arguments unpersuasive, there is no reason

to decide this question.

App. 47

been raised prior to the entry of judgment.” Niedermeier v.

Office of Max S. Baucus, 153 F. Supp. 2d at 28. Likewise,

plaintiffs’ claim of “manifest injustice” fails to meet the

burden required under Rule 59(e). Plaintiffs were well

aware of the Match legislation and of the bases for defen-

dants’ motion for judgment on the pleadings before entry

of judgment and cannot now claim that an adverse ruling

resulting from the grant of defendants’ motion based on

that legislation worked a manifest injustice on them.

Because the Court concludes that plaintiffs have not

satisfied the stringent standard for relief under Rule 59(e),

plaintiffs’ motion to alter or amend the judgment must be

denied. Plaintiffs’ motion to amend their complaint there-

fore is moot. See Ciralsky v. CIA, 355 F. 3d at 673.

Even if the Court had found that plaintiffs satisfied

the heavy burden for relief under Rule 59(e), the Court

still would have denied plaintiffs’ motion to amend their

complaint. Plaintiffs correctly point out that leave to file

an amended complaint should be “freely given when

justice so requires.” Mot. at 4 (quoting Feb. R. Civ. P.

15(a)). The Court, however, may deny leave if the party

opposing the motion can provide a good reason why the

amendment should not be allowed, including the clear

futility of permitting the amendment. See Foman v. Davis,

371 U.S. 178, 182 (1962); Willoughby v. Potomac Electric

Power Co., 100 F. 3d 999, 1003 (D.C.Cir.1996). An amend-

ment is futile if it would not survive a motion to dismiss or

for judgment on the pleadings. See Willoughby v. Potomac

Electric Power Co., 100 F. 3d at 1003; Stith v. Chadbourne

& Parke, LLP, 160 F. Supp. 2d 1, 6 (D.D.C.2001).

Contrary to plaintiffs’ assertion, the Match was an

essential and integra! part of this Court’s February 11,

2004 ruling and of plaintiffs’ claims. This Court already

App. 48

has stated that plaintiffs’ current position that they can

maintain a price-fixing conspiracy even without the

Match-related allegations “is inconsistent with plaintiffs’

own previous position as set forth in their earlier filings”

and with this Court’s decision. See Jung v. Association of

American Medical Colleges, 339 F. Supp. 2d at 38. As the

Court noted then, plaintiffs themselves argued in their

consolidated brief opposing defendants’ motion to dismiss

and to compel arbitration that “the anticompetitive con-

duct related to the match necessarily interrelates with the

other anticompetitive conduct alleged.” Id. The Court

concluded in August 2004 that

the allegations concerning the Match and the

institutional defendants’ participation in the

Match are so interdependent that the Court can-

not separate them from the remaining allega-

tions. Because Congress has prevented this or

any other Federal court from considering evi-

dence of Match-related conduct, the Court neces-

sarily concludes that plaintiffs’ complaint must

be dismissed under 15 U.S.C. § 37b(b)(2).

Id. at 39. The proffered amended complaint cannot save

plaintiffs from this analysis and the actions of Congress.

Moreover, as defendants point out, if plaintiffs were

permitted, by amending their complaint, to “remove[] the

unifying element of the Match, what is left is a sprawling,

1000-institution conspiracy,” which would present signifi-

cant problems “in terms of issues of personal jurisdiction,

class certification, liability, impact and damages.” Opp. at

10. This is most certainly true in the context of personal

jurisdiction. In its February 11, 2004 Opinion, this Court

found the sole basis for personal jurisdiction to be long-

arm jurisdiction based on a specific conspiracy, namely “a

App. 49

conspiracy to depress resident compensation between,

inter alia, those institutional defendants that have par-

ticipated in the Match and the [National Resident Match-

ing Program].” Jung v. Association of American Medical

Colleges, 300 F. Supp. 2d 119, 142 (D.D.C. 2004). Plaintiffs

now seek to argue that they can establish a conspiracy

absent any evidence of Match-related activity, the very

activity on which the Court relied to find that conspiracy

jurisdiction existed. The Court finds such an argument to

be meritless, both with respect to the conspiracy claim and

conspiracy as the basis for personal jurisdiction. Thus, to

permit the amendment of the complaint would be a futile

action, inasmuch as a renewed motion to dismiss or for

judgment on the pleadings would necessarily be granted.

For the foregoing reasons, it is hereby

ORDERED that plaintiffs’ Rule 59(e) Motion to Alter

or Amend the Judgment and Rule 15(a) Motion for Leave

to Amend Their Complaint [282] is DENIED.

SO ORDERED.

/s/

- PAUL L. FRIEDMAN

United States District Judge

DATE: January 25, 2005

App. 50

300 F. Supp. 2d 119

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

PAUL JUNG, M.D., et al.,

Plaintiffs,

Civil Action No. 02-0873 (PLF)

Vv.

ASSOCIATION OF

AMERICAN MEDICAL

COOLEGES, et al.,

Defendants.

OPINION

(Filed Feb. 11, 2004)

Plaintiffs in this putative class action are medical

school graduates currently or formerly enrolled in resident

physician “residency” programs. The defendants can be

categorized into two groups: the organizational defendants

(organizations and associations that participate in the

administration of graduate medical education in the

United States) and the institutional defendants (universi-

ties, medical schools, foundations, hospitals, health sys-

tems and medical centers that sponsor medical residency

programs). The defendants have filed three types of

motions to dismiss: (1) motions to dismiss for lack of

personal jurisdiction; (2) motions to dismiss for lack of

subject matter jurisdiction and to compel arbitration; and

(3) motions to dismiss for failure to state a claim upon

which relief can be granted.

App. 51

I. BACKGROUND

Plaintiffs filed suit charging that the defendants have

violated Section 1 of the Sherman Act, 15 U.S.C. §1.

Plaintiffs allege that the defendants have contracted,

com ined and conspired among themselves to “displace

competition in the recruitment, hiring, employment and

compensation of resident physicians, and to impose a

scheme of restraints which have the purpose and effect of

fixing, artificially depressing, standardizing and stabiliz-

ing resident physician compensation and other terms of

employment.” Complaint (“Compl.”) J 2. Plaintiffs assert

that there are three intertwining prongs to the antitrust

conspiracy.

The first prong of the alleged conspiracy concerns the

annual assignment of fourth-year medical students to the

institutional defendants’ residency programs by the

National Resident Matching Program (“NRMP”). The

NRMP, an Illinois not-for-profit corporation, is managed

and operated by defendant American Association of Medi-

cal Colleges (“AAMC”) from AAMC’s principal office in

Washington, D.C. See Compl. { 15. The AAMC also is an

Illinois not-for-profit corporation, whose membership

includes all 125 accredited medical schools, including

those medical schools named in the complaint, and ap-

proximately 375 major teaching hospitals and health sys-

tems, some of which also are named in the complaint. These

hospitals and health systems are member hospitals of a

subsection of the AAMC, the Council of Teaching Hospitals

and Health Systems (“COTH”) Section. See id. § 17.

Plaintiffs allege that in order to effectuate the as-

signment, or the “Match,” as it is commonly called, pro-

spective medical residents enter into contracts with and

App. 52

submit to the NRMP a ranked list of desired medical

resident positions with various institutions (“Student

Match Contract”). The institutions themselves also enter

into contracts with the NRMP and submit ranked lists of

the medical students whom they are interested in hiring

(“Institutional Match Contract”). On a date certain, the

NRMP through an algorithm “matches” the students’ lists

against the institutions’ rankings, resulting in the assign-

ment of each prospective medical resident to one residency

program. See Compl. 74 15, 83-86. Plaintiffs allege that

this system eliminates a free and competitive market and

substitutes a centralized, anticompetitive allocation system

that assigns prospective resident physicians to a single,

specific and mandatory residency program. Plaintiffs

further allege that defendants designed and implemented

this system and collectively agree to comply with it in

- violation of the antitrust laws. See id. J 83.

Several specific features of this assignment system

allegedly serve to impose anticompetitive restraints on

medical residency hiring. Plaintiffs allege that a medical

student is required to enter into the Match if he or she

wishes to gain employment in a residency program accred-

ited by the Accreditation Council for Graduate Medical

Education (“ACGME”). See Compl. 9 71. An individual’s

participation in an ACGME-accredited residency program

in turn is allegedly a prerequisite for specialty certification

upon completion of the residency by a member board of

defendant American Board of Medical Specialties

(“ABMS”), an Illinois not-for-profit corporation consisting

of 24 recognized medical specialty certification boards. See

id. 9 20, 69. Plaintiffs allege that eventual specialty

certification by an ABMS board is considered critical to

prospective residents inasmuch as they desire to be

App. 53

“certified” to practice within a specialty following the

completion of their residencies. The practical effect of this

structure, plaintiffs charge, is that the vast majority of

medical students are compelled to participate in the

Match, which is a substitute for all aspects of competitive

individual negotiations and requires applicants to commit

contractually to any assigned position as a condition of

enrolling in the Match Program. See id. |] 69, 86. Fur-

thermore, certain implementing policing mechanisms of

the Match allegedly compel compliance with the foregoing

restraints. These alleged mechanisms include the re-

quirement that program participants immediately report

suspected policy violations to the NRMP and advise the

relevant organizational authorities of institution or resi-

dent physician violations. See id. | 86(c).

In the second prong of the conspiracy, plaintiffs assert

that certain aspects of the aforementioned ACGME ac-

creditation standards, with which the institutional defen-

dants allegedly voluntarily comply, function to further

restrict residency employment. Specifically, plaintiffs

allege that the ACGME (1) has the authority to regulate

the number of employment positions in a residency pro-

gram; (2) imposes substantial obstacles to the ability of a

resident to transfer employment from one employer to

another during the period of a residency, thereby effec-

tively making NRMP assignments permanent for the

duration of a residency; (3) encourages and/or requires

participation in the Match by an institution as a condition

of accreditation; and (4) directly reviews compensation and

other terms of employment with the purposes of fixing and

depressing them. See Compl. { 88.

The third prong of the conspiracy concerns the exchange

by defendants of information on resident compensation and

App. 54

other terms of employment through surveys and databases

that plaintiffs allege has the purpose and effect of stan-

dardizing and stabilizing compensation and other terms of

employment. See Compl. {{ 73-82. This exchange alleg-

edly occurs in two ways. First, the AAMC annually sur-

veys members of its COTH Section seeking compensation

levels for the employment year, aggregates the results into

various categories and distributes its findings in an

annual report (the “COTH Survey” or “Survey”). See id.

7 74-79. Second, hospitals and health systems access

similar information through an electronic database known

as the Fellowship and Residency Electronic Interactive

Database (“FREIDA”), which is maintained by defendant

American Medical Association (“AMA”). See id. {¥ 80.

Plaintiffs allege that this exchange of information allows

institutional defendants to fix resident salaries and

benefits each year at depressed, anticompetitive levels.

Plaintiffs charge that the execution of the Match

program, the enforcement of the ACGME-accreditation

standards, and the coordinated collection and distribution

of residency program compensation information together

produce a significant depression of residents’ salaries and

working conditions by removing residents’ ability to

achieve enhanced salaries and working conditions through

competition. See Compl. 9{ 92-96. Plaintiffs allege that

defendants-have violated Section 1 of the Sherman Act by

contracting, combining and conspiring to unreasonably

restrain trade and commerce. Plaintiffs filed this antitrust

action as a proposed class action and have moved to certify

both plaintiff and defendant classes. See Motion for Class

Certification, filed November 3, 2003.

App. 55

Il. DEFENDANTS’ RULE 12(b)(2) MOTIONS TO DIS-

MISS FOR LACK OF PERSONAL JURISDICTION

A. Rule 12(b)(2) Motions to Dismiss

Sixteen institutional defendants and two organiza-

tional defendants, the ABMS and the Council of Medical

Specialty Societies (“CMSS”), filed motions to dismiss for

lack of personal jurisdiction under Rule 12(b)(2) of the

Federal Rules of Civil Procedure.’ Plaintiffs argue that the -

Court has jurisdiction over these non-resident defendants

on three separate bases: (1) jurisdiction under the District

of Columbia long-arm statute; (2) jurisdiction under

Section 12 of the Clayton Act, 15 U.S.C. § 22; and (3)

jurisdiction pursuant to the long-arm statute under the

“conspiracy jurisdiction” doctrine.

It is undisputed that plaintiffs bear the burden of

establishing personal jurisdiction over each individual

defendant and that in order to meet their burden, plain-

tiffs cannot rely on conclusory allegations. See GTE New

Media Services Inc. v. Ameritech Corp., 21 F. Supp. 2d 27,

36 (D.D.C. 1998), remanded on other grounds sub nom,

GTE New Media Services Inc. v. BellSouth Corp., 199 F.3d

1343 (D.C. Cir. 2000). Nor can plaintiffs aggregate factual

allegations concerning multiple defendants in order to

' The institutional defendants that have moved to dismiss the

complaint for lack of personal jurisdiction are Barnes Jewish-Hospital,

Baylor College of Medicine, Beth Israel Deaconess Medical Center, Inc.,

Boston Medical Center Corp., Cedars-Sinai Medical Center, The Cleve-

land Clinic Foundation, Emory University, Rhode Island Hospital, Rush-

Presbyterian-St. Luke’s Medical Center, St. Louis University, Stanford

Hospital & Clinics, Thomas Jefferson University Hospital, Inc., Adminis-

trators of the Tulane Educational Fund, University Hospitals of

Cleveland, Inc., Washington University Medical Center and Yale-New

Haven Hospital, Inc.

App. 56

demonstrate personal jurisdiction over any individual

defendant. See Rush v. Savchuk, 444 U.S. 320, 331-32

(1980) (rejecting aggregation of co-defendants’ forum

contacts in determining personal jurisdiction because “the

requirements of International Shoe must be met as to each

defendant over whom a state court exercises jurisdiction”).

In evaluating whether plaintiffs have established personal

jurisdiction, the Court need not treat all of plaintiffs’

allegations as true but instead “may receive and weigh

affidavits and other relevant matter to assist in determin-

ing the jurisdictional facts.” United States v. Philip Morris

Inc., 116 F. Supp. 2d 116, 120 n.4 (D.D.C. 2000).

In this instance, plaintiffs bear a special, higher

burden in order to demonstrate jurisdiction because the

parties have engaged in jurisdictional discovery.

“{Ajlthough ordinarily a plaintiff need only establish a

prima facie case that personal jurisdiction exists to sur-

vive a motion to dismiss, ... in situations where the

parties are permitted to conduct discovery on the jurisdic-

tional issue a plaintiff must prove personal jurisdiction by

a preponderance of the evidence.” Shapiro Lifschitz &

Schram, P.C. v. Hazard, 24 F. Supp. 2d 66, 69 (D.D.C.

1998). See also In re Vitamins Antitrust Litigation, 270 F.

Supp. 2d 15, 20 (D.D.C. -2003) (citing In re Vitamins

Antitrust Litigation, Misc. No. 99-0197, 2001 U.S. Dist.

LEXIS 25073, at *22 (D.D.C. Oct. 21, 2001)) (“Because

plaintiffs have conducted jurisdictional discovery, they

must establish personal jurisdiction over defendants by a

preponderance of the evidence.”).

App. 57

B. Section 13-423(a): The District of Columbia

Long-Arm Statute

Plaintiffs assert that the Court has personal jurisdic-

tion over the moving defendants under three separate

subsections of the District of Columbia long-arm statute,

Sections 13-423(a)(1), (3) and (4). While the long-arm

statute is interpreted broadly and factual disputes are

resolved in favor of plaintiffs, plaintiffs must allege some

specific facts evidencing purposeful activity by the defen-

dants in the District of Columbia by which they invoked

the benefits and protections of the District’s laws. See

Edmond v. United States Postal Service General Counsel,

949 F.2d 415, 428 (D.C. Cir. 1991); First Chicago Int'l v.

United Exchange Co., Lid., 836 F.2d 1375, 1378 (D.C. Cir.

1988); United States v. Philip Morris, Inc., 116 F. Supp. 2d

at 121. In addition, because a court in the District of

Columbia may exercise jurisdiction over a non-resident

defendant “only [for] a claim for relief arising from the

specific acts enumerated in [the statute] ... ,” D.C. CODE

§ 13-423(b), plaintiffs’ jurisdictional allegations must arise

from the same conduct of which they complain. See Willis

v. Willis, 655 F.2d 1333, 1336 (D.C. Cir. 1981); Dooley v.

United Technologies Corp., 786 F. Supp. 65, 71 (D.D.C.

1992); LaBrier v. A.H. Robins Co., Inc., 551 F. Supp. 53, 55

(D.D.C. 1982).

1. “Transacting Business” under Section 13-

423(a)(1)

Section 13-423(a)(1) of the long-arm statute provides

that “a District of Columbia court may exercise personal

jurisdiction over a person, who acts directly or by an

agent, as to a claim for relief arising from the person’s —

transacting any business in the District of Columbia.” D.C.

App. 58

CODE § 13-423(a)(1). To establish personal jurisdiction

under this subsection, plaintiffs must demonstrate that (1)

the defendant transacted business in the District; (2) the

claim arose from the business transacted in the District;

(3) the defendant had minimum contacts with the District;

and (4) the Court’s exercise of personal jurisdiction would

not offend “traditional notions of fair play and substantial

justice.” Dooley v. United Techno

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