ABPN Wins Dismissal Of Antitrust Challenge To Professional Certification Program
11/01/2023On October 4, 2023, the United States District Court for the Northern District of Illinois granted with leave to amend the American Board of Psychiatry and Neurology’s (ABPN) motion to dismiss a class action alleging in part that ABPN’s tying of its professional certification to its maintenance of certification (MOC) program violated Section 1 of the Sherman Act prohibiting illegal restraints of trade or commerce. Lazarou v. Am. Bd. of Psychiatry & Neurology, No. 19-cv-01614 (N.D. Ill. Oct. 4, 2023).
ABPN provides the only widely accepted certification program for psychiatrists and neurologists throughout the United States. After first earning their ABPN certification through an initial exam, certificate holders must then complete ABPN’s MOC program to maintain their certification. That program requires certificate holders to pass an exam every ten years and complete continuing education. Certificate holders who do not comply with ABPN’s MOC program may have their certifications revoked. Plaintiff psychiatrists had initially earned their ABPN certification, but ABPN subsequently revoked their certifications after plaintiffs failed to complete ABPN’s MOC program. Plaintiffs alleged that ABPN’s tying of ABPN certification to ABPN’s MOC program violated Section 1 of the Sherman Act and was both per se illegal and illegal under the rule of reason.
The Court focused its analysis on the first element of a Sherman Act tying claim: whether two separate products or services are involved. Plaintiffs alleged that the MOC program was distinguishable from ABPN certification because “MOC is … a ‘CPD’ or continuing professional development product.” The Court, however, rejected “that MOC and other CPD products are reasonably interchangeable in the minds of psychiatrists and neurologists.” The Court placed substantial weight on the fact that while CPD products are often required for maintaining state licensure, MOC is not. The Court also emphasized plaintiffs’ assertions that MOC was of no value other than to maintain plaintiffs’ initial ABPN certification, as well as the lack of any allegation that ABPN had a financial interest in the continuing education products on its approved-products list.
The Court then considered and rejected plaintiffs’ related additional arguments. Most importantly, the Court concluded that “the mere fact that initial certification and MOC are purchased in separate transactions years apart does not entail that they are separate products.” The Court also held that “the relevant inquiry is not the seller’s purpose but rather consumer demand.” Finally, the Court stated that plaintiffs were not compelled as a matter of law to purchase ABPN’s MOC program. Third parties such as hospitals and insurance companies, not ABPN, imposed the costs associated with revocation of ABPN certification.
This decision serves as useful guidance on how courts analyze Sherman Act tying claims. Although a court’s standard of review at the motion to dismiss stage is very deferential to plaintiffs, this case clarifies this standard and demonstrates that properly alleging the products at issue matters just as much as properly alleging the product markets involved when bringing a tying claim.