[EDITOR'S NOTE: PART 2 OF 2. THIS DOCUMENT HAS BEEN SPLIT INTO MULTIPLE PARTS ON LEXIS TO ACCOMMODATE ITS LARGE SIZE. EACH PART CONTAINS THE SAME LEXIS CITE.]
m. Ohio State University Hospital
Ohio State University Hospital's contacts with New York include (1) use of New York's media and advertising, involving two segments on Good Morning America a national weekday television program, a Wall Street Journal article, and advertisements in the New York Times and Wall Street Journal for job openings, (2) use of a local advertising agency with a New York office, for purposes of utilizing the agency's relationship with the New York office, (3) receipt, from 1991 to 1993, of nearly $ 200,000 in gross revenues from the treatment of New York patients, (4) charitable contributions received from New York sources,
(5) a contract with Supplemental Health Care Services Ltd., a New York agency, from 1989 to 1993, to provide temporary registered nurse staffing,
(6) defense of a lawsuit pending in Richmond County, New York; in connection with this suit, the university hospital retained the services of a New York attorney, (7) participation, in 1989 to 1990, by two of the hospital's physicians in a multi-center trial (a medical study) which included a study site in Syracuse, New York, and travel by one of the physicians to New York in connection with this trial, and (8) travel to New York by Dr. Hagop Mekhjian, the medical director of Ohio State University Hospital and some of his colleagues in connection with their professional activities. Plaintiffs' Memorandum of Law at III-28 -III-32.
Since July of 1990, Ohio State University Hospital has treated seventy patients from New York, from over 110,000 total patients. Ohio State University Hospital's Memorandum of Points and Authorities, filed May 2, 1994, p. 24.
n. Oregon Health Sciences University Hospital
Oregon Health Sciences University Hospital's contacts with New York include (1) receipt of over $ 565,000 in charitable contributions from New York sources between 1987 and 1994, (2) gross revenues of $ 359,132 for the treatment of New York patients from 1987 to 1994, (3) the fact that the hospital may have received payment from third-party sources in New York for the treatment of New York patients, (4) the hospital's participation in four clinical studies with New York organizations, including the University of Rochester, and contractual relationships with each New York entity with respect to these studies,
(5) travel to New York by members of its faculty to attend professional meetings, (6) advertising job opportunities for physicians and faculty members in national medical journals and other publications that may be distributed in New York, (7) the hospital's listing in the Green Book, (8) the fact that since 1991, seventeen residents who practiced at the hospital, and ten physicians hired by it attended a New York medical school or listed a New York home address, (9) receipt by the hospital, from 1992 to 1994, of ninety-six applications to its emergency medicine residency program from medical students in New York, and (10) the fact that from academic 1991/1992 through academic 1993/1994, five physicians from New York filed applications to its emergency department. Plaintiffs' Memorandum of Law at III-72 - III-73.
o. Riverside Methodist Hospitals
Riverside Methodist Hospitals' contacts include (1) raising through New York underwriters over $ 189 million through bond offerings issued by the County of Franklin, Ohio,
(2) travel by the current president/chief executive officer, chief financial officer, and chair of the finance committee of the hospitals to New York and his presence on the trading floor at the First Boston Corporation in connection with the sale of the hospitals' 1990B bonds, (3) having a New York investment account with over $ 23 million in September of 1989; Oppenheimer Capital Corporation, located in New York City, served as the investment manager of the account, (4) treatment, between 1990 and 1994, of 174 outpatients who provided New York zip codes, and of seventy-four inpatients from New York, between 1988 and 1993; also, between 1988 and 1990, 193 New York patients were treated in the hospitals' emergency room,
(5) billing patients treated from New York directly, (6) receipt of $ 50,193 in charitable contributions between 1988 and 1994 from 289 New York donors, (7) the fact that between 1988 and 1990, the hospitals' current president/chief executive officer and two other representatives visited New York to evaluate products, equipment and facilities design concepts, (8) travel by the hospitals' director of transitional residency to New York on its behalf for a meeting of the Alliance of Independent Medical Centers, (9) occasional contact and invitation of speakers from New York for weekly and monthly continuing medical education courses, (10) sending a representative in 1988, 1991, 1992, and 1993, from the hospitals' Human Resources Department to one or more job fairs or on-campus interview programs in the Western District of New York in order to recruit nurses, physical or occupational therapists, or technologists,
(11) sending recruiting materials concerning job opportunities to individuals who reside in New York through use of a national health professional society or a mailing list company, (12) advertising job opportunities for physicians and/or employees in the New York Times and the Wall Street Journal, as well as other medical journals and publications that are or may be distributed in New York, (13) listing its institution and residency programs in the Green Book, (14) the fact that since 1992, five graduates of New York medical schools have taken part in residency programs at Riverside, and (15) attendance at New York medical schools by two of the hospital's emergency department physicians. Plaintiffs' Memorandum of Law at III-23 - III-28.
p. Saint Francis Medical Center
Saint Francis Medical Center's contacts with New York include (1) its participation in a Group Purchasing Organization, of which Olean General Hospital, located in this district, has been a member since 1989, sponsored and administered by the medical center, pursuant to an agreement with the medical center,
(2) between 1987 and 1993, receipt by the center of at least $ 298,752 in revenues from the treatment of New York patients,
(3) issuance of $ 178,175,000 in bonds through New York facilities by the Illinois Health Facilities Authority for the Illinois institutions which comprise the OSF Healthcare System, including Saint Francis Medical Center,
(4) the fact that from 1983 to 1989, either the medical center or OSF Healthcare System maintained a bank account at Irving Trust to secure the bonds, the balance of this account ranged from $ 350,000 to over $ 600,000, (5) advertising for faculty positions in emergency medicine in national medical journals and the annual job and fellowship listing of the Emergency Residents Association, which is nationally distributed, (6) sending a direct mailing to potential candidates for emergency department faculty positions in 1988, (7) mailing its recruiting brochure to the deans of every medical school in the United States, (8) listing of the Saint Francis Medical Center and its residency programs in the Green Book, and (9) that fact that at least one resident who participated in a Saint Francis Medical Center residency program attended a New York medical school or was from New York. Plaintiffs' Memorandum of Law at III-59 - III-63.
St. Anthony Hospital's contacts include (1) advertising medical and non-medical positions in nationally distributed publications, (2) recruiting for nursing positions through advertisements in the Albany Times Union and the Buffalo News, published in Albany and Buffalo, New York, respectively, (3) the fact that from 1991 to 1994, the hospital had four residents who attended New York medical schools, (4) the fact that fifty-two members of its current medical staff graduated from New York medical schools, (5) treatment, from 1991 to 1994, of 540 New York patients, and from May of 1990 to 1994 generating $ 1,229,364 in revenues from patients residing in New York, and (6) receiving several charitable contributions from New York sources totalling $ 7,895. Plaintiffs' Memorandum of Law at III-71 - III-72.
r. Tri-City Medical Center (San Diego)
Plaintiffs assert that Tri-City Medical Center (1) regularly advertises employment opportunities in national publications, (2) sent promotional materials regarding employment opportunities directly to New York, (3) treated seventy-three New York patients between 1987 and 1993, (4) allowed its interim chief executive officer to attend one seminar in New York, and (5) issued revenue bonds to the public at large, including New York residents. Plaintiffs' Memorandum of Law at III-81 - III-82.
s. University of California (Los Angeles) Medical Center
Plaintiffs advance several contacts to demonstrate that the University of California (Los Angeles) Medical Center should be subject to jurisdiction under the solicitation-plus doctrine, including (1) receipt of $ 5,486,286 in charges for services rendered to New York residents from fiscal 1991 to 1992 through fiscal 1993 to 1994, (2) attendance by its representatives at a nursing job fair in New York City in 1991, (3) sending materials describing its residency programs to New York medical schools, (4) advertising job opportunities in the New York Times and other national medical journals and publications, (5) receipt of $ 108,015 in charitable contributions from New York sources since 1988, (6) issuance of $ 136,530,000 in bonds in 1994 to refinance outstanding debt, including bonds issued in 1986 and 1990,
(7) serving as a founding member of the Academic Medical Center Consortium,
which was incorporated in New York in 1990 or 1991, and maintains its offices in Rochester, New York; contributing approximately $ 65,000 in annual dues to the consortium, and an additional $ 20-30,000 for its participation in specific studies,
and (8) service by Dr. Schultze, director of the medical center, chairman of the board of, and representing the medical center on the University Hospital Consortium, which also performs marketing research for its member institutions.
Plaintiffs' Memorandum of Law at III-73 - III-77.
t. University of California (Irvine) Medical Center
Plaintiffs state that University of California (Irvine) Medical Center (1) has treated 334 patients from New York resulting in over $ 900,000 in total revenues for the hospital, as well as payments by third-party sources, (2) has placed at least eighty advertisements in nationally distributed journals and other publications to fill nurses, clinicians, technologists, and other employee positions, and (3) recruits physicians by placing advertisements in nationally distributed journals. Plaintiffs' Memorandum of Law at III-82 - III-83.
u. University of California (San Diego) Medical Center
Plaintiffs contend that the University of California (San Diego) Medical Center (1) derives substantial revenues from providing services for New York patients, specifically, between fiscal 1990/1991 and fiscal 1993/1994, the medical center charged nearly $ 7 million to New York residents, (2) sends promotional materials to medical schools in New York, (3) advertised employment opportunities in the New York Times and other nationally distributed publications, (4) has two practicing physicians who are from New York or attended New York medical schools, and (5) received $ 67,929 in charitable contributions from New York donors between 1991 and 1994. Plaintiffs' Memorandum of Law at III-81.
v. University Hospital at the University of New Mexico
Plaintiffs allege that the University Hospital at the University of New Mexico has several contacts with New York which allow personal jurisdiction under the solicitation-plus doctrine, including the fact that, (1) its receipt of $ 4,797,792 in charitable contributions from New York sources between fiscal 1987-1988 and fiscal 1992-1993, (2) the hospital placed advertisements for physicians in nationally distributed medical journals, (3) its residency programs being listed in the Green Book, (4) since 1990, at least seventeen residents in the hospital's residency programs attended New York medical schools or resided in New York prior to participating in the program, (5) three physicians hired by the hospital in 1993 and 1994 resided in New York at the time they were hired, (6) forty-one individuals from New York or New York medical schools applied to its emergency medicine residency program or emergency department between 1991 and 1994, (7) the hospital's Board of Regents issued bonds to raise, among other projects, money for the construction of an ambulatory care facility and a parking structure at the hospital,
(8) the hospital's vice-president traveled to New York to meet with Moody's representatives in connection with rating the capital bonds,
(9) its faculty members have traveled to New York since January of 1991 to attend conferences, meetings, and for research purposes. Plaintiffs' Memorandum of Law at III-63 - III-66.
w. University of Massachusetts Medical Center
Plaintiffs maintain that the University of Massachusetts Medical Center has significant contacts with New York, including the fact that (1) it generated $ 4,135,000 in revenues for treatment of New York patients between 1990 and 1993, (2) representatives of the medical center attended two job fairs in New York in 1988 to recruit for scientific research and nursing positions, (3) the medical center advertised job opportunities for professional and non-professional staff in the New York Times, the Wall Street Journal, and the Chronicle of Higher Education, as well as contracted in New York to receive advertising space, (4) the medical center lists its residency programs in the Green Book to recruit residents, (5) the medical center sent recruiting materials to each medical school in the country, and to New York residents based on a mailing list it purchased,
(6) two hundred and sixteen residents who have practiced at the center between 1991 and 1994 have attended medical school in New York, and forty-five additional residents from New York medical schools began their residencies at the medical center in July of 1994, (7) the medical center received 124 applications from individuals in New York or from New York medical students for residency positions in its emergency medicine program, (8) sixty-six members of its current medical staff attended medical school in New York, (9) the medical center's foundation issued $ 20,500,000 in bonds in New York, through the Massachusetts Health and Educational Facilities Authority, to raise money for the purchase of a research facility that the center leases from the foundation,
(10) it is a defendant in a lawsuit pending in the Northern District of New York, and retained counsel from New York in connection with the case, (11) Dr. Richard Aghababian, the medical center's emergency department chairman, attended a meeting in New York of American College of Emergency Physicians' New York affiliate, (12) Derrick Hollings, the chief financial officer of the medical center, attended a training seminar in New York on behalf of the center, and (13) Michael R. Green, a medical center professor, delivered the keynote address at a prestigious professional lecture, held annually at Rockefeller University in New York City. Plaintiffs' Memorandum of Law at III-54 - III-56.
x. University Medical Center, Tucson, Arizona118
The University Medical Center's contacts with New York include the fact that (1) it is affiliated with D'Youville and Daeman colleges, located in Western New York, in the areas of physical and occupational therapy,
(2) an indication by Gregory Pivirotto, the medical center's current president and chief executive officer, that it obtains supplies from suppliers and vendors located in New York, (3) maintaining a pollution insurance policy with a New York company, (4) issuance, between 1991 and 1993, of $ 133,810,000 in public bond offerings,
(5) opening two bank accounts with the New York branch of Societe Generale, which combined held over $ 15 million in 1994 from the bond sales; these accounts remained open at least until August of 1994, at which time their balances were $ 11,071,555 and $ 4,243,000, (6) the fact that between 1988 and 1993, the medical center's gross charges with respect to the treatment of 144 New York patients totalled $ 1,951,516, (7) the fact that the center may have billed New York insurance companies or received payments from state government sources in connection with the treatment of these patients, (8) possible personal contact or contact through a collection agency with patients who have not paid their medical bills, (9) receiving, since July 1, 1992, over $ 32,000 in charitable contributions from New York sources, (10) sending representatives, for each of the past four years, to job fairs to recruit physician and occupational therapists at a fair sponsored by the Niagara Frontier [sic] College, at Trocaire College, the State University of New York at Buffalo, Daemen College and D'Youville College, in Western New York, (11) advertising job opportunities for physicians and other employees in several national medical and trade journals, and other publications, (12) sending national direct mailings to recruit employees, (13) paying the travel expenses of potential New York hirees to come to the center, (14) the fact that from the 1990/1991 academic year through the 1994/1995 academic year, between seven and sixteen residents and fellows who practiced at the center graduated from New York medical schools, (15) receipt of its emergency medicine department of ten to twenty applications from New York residents, and (16) the fact that eleven physicians from New York medical schools have practiced or applied for privileges at the center since 1991. Plaintiffs' Memorandum of Law at III-66 - III-71.
In determining whether any of these contacts with New York, singly or in combination, will satisfy the solicitation-plus doctrine, the court must decide whether each Defendant has sufficient contacts with the state to reach the level of substantial solicitation, which requires that the solicitation be carried on with a considerable measure of continuity. Landoil Resources, 918 F.2d 1039, 1044. Activities which are incidental to a defendant's primary business do not carry the same jurisdictional weight as the solicitation of such primary business itself. Crucible Ventures, Inc. v. Futuresat Industries, Inc., 1990 U.S. Dist. LEXIS 1622, 1990 WL 16140, at *2 (S.D.N.Y. 1990). See also Bryant v. Finnish National Airline, 22 A.D.2d 16, 253 N.Y.S.2d 215, 219-20 (App.Div. 1st Dep't. 1964) ("As the term 'doing business' is used in reference to foreign corporations, it relates to the ordinary business which the corporation was organized to do .... It is not the occasional contact or simple collateral activity which is included."), rev'd on other grounds, 15 N.Y.2d 426, 208 N.E.2d 439, 260 N.Y.S.2d 625 (N.Y. 1965). In cases involving solicitation by a foreign corporation, courts determining questions of jurisdiction "examine the realities of the business done by a foreign corporation to determine whether there is 'a good reason for drawing the defendant into a suit away from its home state.'" Katz Agency, Inc. v. Evening News Assoc., 705 F.2d 20, 24 (2d Cir. 1983) (quoting Tauza, 220 N.Y. 259, 115 N.E. 915, 917-18). If any of the hospital Defendants' contacts with New York rise to this level, the court must then review the facts to ascertain whether additional contacts exist with New York, as mere solicitation is insufficient to establish personal jurisdiction under Section 301. Cohen, 495 F. Supp. 849, 850-51.
Plaintiffs assert that each hospital Defendant has advertised to recruit physicians, residents, and other medical staff in publications which are distributed nationally, including the Wall Street Journal, the New York Times, the Green Book, and other nationally distributed medical journals and materials. However, advertisements placed in "nationally distributed newspapers such as the New York Times do not play a substantial role in the determination of jurisdiction." Russo v. Killington, Ltd., 1994 U.S. Dist. LEXIS 8882 at *8 (S.D.N.Y. 1994). Thus, advertising in periodicals or journals with national circulation fails to constitute an activity of substance in any specific jurisdiction, and cannot be the basis for personal jurisdiction under Section 301. See Russo, supra, at *8.
Plaintiffs also claim that some advertising by hospital Defendants was intended to solicit patients from New York, and the hospital Defendants received revenue from treating New York patients.
Even if the court assumes that all of the revenues derived from the treatment of New York patients by the hospital Defendants was in fact solicited, such revenues do not amount to substantial solicitation. Generally, in focussing on revenues derived from solicitation of business in New York to determine if the solicitation was substantial, New York courts have considered the amount spent on in-state advertising and the degree of business generated by this advertising. Lane v. Vacation Charters, Ltd., 750 F. Supp. 120, 123 (S.D.N.Y. 1990); Katz Agency, Inc. v. Evening News Assoc., 514 F. Supp. 423, 427-28 (S.D.N.Y. 1981), aff'd, 705 F.2d 20 (2d Cir. 1983). However, courts have generally refused to find jurisdiction under the solicitation-plus doctrine when revenues derived from solicitation in New York state comprise an insubstantial percentage of a defendant's total sales. Pellegrino v. Stratton Corporation, 1989 U.S. Dist. LEXIS 1324, 1989 WL 10726, *3 (N.D.N.Y. 1989); Dunn v. Southern Charters, Inc., 506 F. Supp. 564, 567 (E.D.N.Y. 1981) (where defendant derived only 1 and 1/2% of its total sales revenue from New York it was "doubtful" whether its "solicitation activities in New York [were] substantial enough to bring [the defendant] within the 'solicitation-plus' rule"); Stark Carpet Corporation v. M-Geough Robinson, Inc., 481 F. Supp. 499, 505 (S.D.N.Y. 1980) (plaintiff failed to demonstrate substantial solicitation where defendant derived only 2% of its total income from sales in New York); New England Laminates Co., Inc. v. Murphy, 79 Misc. 2d 1025, 362 N.Y.S.2d 730, 733 (Sup. Ct. Nassau Cty. 1974) (4% of total income amounting to $ 400,000 of defendant's total sales was mere solicitation and not sufficient to constitute doing business under Section 301). Compare United Resources 1988-I Drilling and Completion Program, L.P. v. Avalon Exploration Inc., 1993 U.S. Dist. LEXIS 479 (S.D.N.Y. 1993) (holding that 5% of revenue from interstate commerce was substantial).
Children's Hospital (San Diego) derived over $ 370,000 from the treatment of 111 New York patients between October 1991 and October 1994. Plaintiffs' Memorandum of Law at III-80, Appendix Volume 4, Exhibit 4, Doc. No. LL04 429. The hospital received approximately $ 400,768,500 in net patient revenues for the same period, therefore, .09% of the hospital's revenues were generated from the treatment of New York patients.
The Children's Hospital of Michigan treated 102 New York residents between 1988 and 1993, thus, the Plaintiffs estimated that the hospital derived $ 98,966 from New York patients. Plaintiffs' Memorandum of Law at III-51 - III-52. The hospital's total gross revenue for the same period of time exceeds $ 1 billion, thus, even using the Plaintiffs' figure of $ 98,966, Children's Hospital of Michigan received less than .01% of its revenues from New York patients.
Forsyth Memorial Hospital charged approximately $ 322,767 for the treatment of New York patients from fiscal 1990 through fiscal 1994.
Plaintiffs' Memorandum of Law at III-45; Appendix Volume 12, Exhibit 4, Supplemental Answer to Interrogatory No. 7. The hospital's total gross revenues for the same period exceed $ 1.2 billion. Plaintiffs' Memorandum of Law, Appendix Volume 12, Exhibit 4, Supplemental Answer to Interrogatory No. 7. As such, the hospital's gross revenues from New York patients amount to .03% of its total revenues.
From 1987 through June of 1994, Loma Linda University Medical Center received $ 2,834,192 in gross revenues from New York patients. Plaintiffs' Memorandum of Law at III-77, Appendix Volume 12, Exhibit 8, Response to Interrogatory No. 7. The medical center's gross revenues for the period from 1987 through 1993 totalled over $ 3 billion. Id. Thus, the medical center derives approximately .08% of its revenues from the treatment of New York patients.
Lutheran General Hospital received $ 543,713 in revenues for the treatment of New York residents from 1987 to 1994. Plaintiffs' Memorandum of Law at III-21. However, the net patient revenue of the hospital from fiscal 1990-1991 through fiscal 1991-1992 was nearly $ 526 million. Plaintiffs' Memorandum of Law, Appendix Volume 4, Exhibit 7, Doc. Nos. LL05 885, LL05 890. Thus, the revenue Lutheran General received from providing services to New York patients amounted to less than .1% of its income.
Plaintiffs assert that from fiscal 1991 through fiscal 1994, Medical College of Pennsylvania and Hospital received $ 1,915,560 in revenues from the treatment of New York patients. Plaintiffs' Memorandum of Law at III-33. The hospital's gross patient revenues, including hospital charges and professional fees, from fiscal 1991-1992 and fiscal 1992-1993 total $ 752,049,000. Plaintiffs' Memorandum of Law, Appendix Volume 5, Exhibit 1, Doc. Nos. LL06 790, LL06 806. Thus, the revenue the medical college and hospital received for services provided to patients from New York was less than .25% of its revenues.
Mercy Catholic Medical Center - Misericordia Division indicates that in 1992, 3.26% of its gross patient charges were attributable to the treatment of New York patients, in 1993, the figure was 2.28%, and in 1994, 2.03%. Plaintiffs' Memorandum of Law at III-37; Appendix Volume 12, Exhibit 11, Response to Interrogatory No. 7.
Methodist Hospital of Indiana charged nearly $ 575,000 for services rendered to New York patients for the period from fiscal 1991 through fiscal 1994. Plaintiffs' Memorandum of Law at III-41. The hospital's total patient charges from fiscal 1991 through fiscal 1994 total $ 52,591,051. Plaintiffs' Memorandum of Law, Appendix Volume 5, Exhibit 3, Doc. Nos. LL08 617, LL08 657. Therefore, the revenue received from New York patients amounts to 1.09% of the hospital's total patient charges for that period.
In this case, Ohio State University Hospital received nearly $ 200,000 in gross revenues from 1991 to 1993 from treating New York patients, however, the net patient revenue of the hospital for the same period of time exceeded $ 500 million. Plaintiffs' Memorandum of Law, Appendix Volume 8, Exhibit 3, Doc. No. 85. Therefore, the revenues received from patients from New York amount to .04% of the hospital's net revenues. Additionally, of the over 110,000 total patients treated at the university hospital since July of 1990, only seventy patients were from New York. Ohio State University Hospital's Memorandum of Points and Authorities, filed May 2, 1994, p. 24.
Oregon Health Sciences University Hospital generated $ 359,132 in gross revenues from New York patients between 1987 and 1994. Plaintiffs' Memorandum of Law at III-72, Appendix Volume 13, Exhibit 15, Response to Interrogatory No. 6. For the same period of time, the hospital received $ 1,759,442,000 in gross revenues. Id. Therefore, the university received only .02% of its revenues for the period from July 1, 1987 through February 28, 1994.
Plaintiffs assert that Saint Francis Medical Center derived at least $ 298,752 in revenues from the treatment of patients from New York. Plaintiffs' Memorandum of Law at III-60. As the hospital's total gross revenue for the same period, not including the outpatient revenues for the years 1987 through 1989, is over $ 1.8 billion, the hospital's revenues from New York patients amount to less than .02%. Plaintiffs' Memorandum of Law, Appendix Volume 13, Exhibit 18, Exhibit A to Interrogatory Answers.
St. Anthony Hospital received $ 1,229,365 from May of 1990 to June of 1994 for treating patients from New York. Plaintiffs' Memorandum of Law at III-71, Appendix Volume 13, Exhibit 17, Response to Interrogatory No. 7. For the period from fiscal 1990 through fiscal 1993, the hospital received $ 755,799,000 in gross revenues, which means that .16% of the hospital's revenues were derived from the treatment of New York patients. Id.
University of California (Los Angeles) Medical Center charged nearly $ 5.5 million for services rendered to New York patients for the period from fiscal 1991-1992 through fiscal 1993-1994. Plaintiffs' Memorandum of Law at III-74. However, the net patient revenue of the hospital from fiscal 1991-1992 through fiscal 1992-1993 exceeded $ 750 million. Plaintiffs' Memorandum of Law, Appendix Volume 6, Exhibit 2, Doc. No. LL13 00379. Thus, the revenue the medical center received from providing services to New York patients amounted to .73% of its income.
Plaintiffs assert that since 1991, University of California (Irvine) Medical Center treated 334 New York patients which resulted in over $ 900,000 in total revenues for the hospital. Plaintiffs' Memorandum of Law at III-82. The medical center's net patient revenue for the fiscal 1992-1993 period was $ 181,300,000; limiting the revenue figure for one year, the revenue received for services provided by the medical center to New York patients is only .5%. Plaintiffs' Memorandum of Law, Appendix Volume 5, Exhibit 6, Doc. No. LL11 1115.
University of California (San Diego) Medical Center charged nearly $ 7 million to New York patients between fiscal 1990-1991 and fiscal 1993-1994. Plaintiffs' Memorandum of Law at III-81. However, over the same period, the medical center's total gross revenues amounted to nearly $ 2 billion, Plaintiffs' Memorandum of Law, Appendix Volume 13, Exhibit 23, Supplemental Answers at p. 3, indicating that only .36% of the medical center's revenue was from New York.
Between 1990 and 1993, University of Massachusetts Medical Center generated $ 4,135,000 in revenues for treatment of New York patients. Plaintiffs' Memorandum of Law at III-54. However, for the same period, the medical center received over $ 1 billion in total patient revenues, Plaintiffs' Memorandum of Law, Appendix Volume 13, Exhibit 24, Response to Interrogatory No. 7, hence, only .39% of the medical center's revenue was generated from the treatment of New York patients.
Between 1988 and 1993, University Medical Center (Tucson) generated $ 1,951,516 in revenues for treatment of New York patients. Plaintiffs' Memorandum of Law at III-69, Appendix Volume 7, Exhibit 1, Doc. Nos. LL15 12 - LL15 17. However, the net patient revenues for the period from 1988 through 1992 total $ 615,291,000, which represents less than .32% of the hospital's total revenues being derived from charges to New York patients. Id. at LL15 228, LL15 596.
Thus, even if the court assumes that each of these hospital Defendants successfully solicited patients from New York state, such fact fails to establish the threshold requirement for application of the solicitation-plus rule, as none of the Defendants discussed above received over 3.26%, and most less than one percent, of their gross revenues from the treatment of patients from New York. Therefore, the court is not persuaded that these Defendants engaged in substantial solicitation of patients from New York, see Rolls-Royce Motors, 657 F. Supp. 1040, 1047, as the relatively insignificant revenue percentages attributed to New York patients undermine the contention that these hospitals solicit business in New York.
Further, Plaintiffs' assertion, without evidence, that these Defendant hospitals treated New York residents which they solicited is irrelevant, as here the services rendered were performed outside of New York state, after the New York resident voluntarily traveled elsewhere to benefit from the services offered or were treated on an emergency basis. See Wolf v. Richmond County Hospital Authority, 745 F.2d 904, 911 (4th Cir. 1984) (citing Gelineau v. New York University Hospital, 375 F. Supp. 661, 667 (D.N.J. 1974) ("the residence of a recipient of personal [physician or hospital] services rendered [outside the forum] is irrelevant")). Moreover, "accepting numerous [New York] patients in [Defendant] hospital[s] and treating them . . . over the years is not a business activity within [New York]," as the hospital performed no services within New York, and did not avail itself of the privileges or benefits of New York laws. Walters v. St. Elizabeth Hospital Medical Center, 543 F. Supp. 559, 560 (W.D.Pa. 1982). See Hanson v. Denckla, 357 U.S. 235, 253, 2 L. Ed. 2d 1283, 78 S. Ct. 1228 (1958) ("it is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws") (citing International Shoe, 326 U.S. 310, 319, 90 L. Ed. 95, 66 S. Ct. 154). See also Jackson v. Shepard, 609 F. Supp. 205, 207 (D.Ariz. 1985) (a "hospital is not doing business in Arizona by attempting to collect debts acquired in California . . . nor does the fact that a California hospital accepts Arizonans for treatment constitute doing business by the hospital within Arizona") (citing California Brewing Co. v. Rino, 143 F. Supp. 801, 803 (D. Idaho 1956) and Walters, supra, at 560).
In arguing that the hospital Defendants meet the solicitation-plus requirement under Section 301, Plaintiffs also urge that several of the physicians, residents, and medical staff at various hospitals came from New York or attended medical school in New York, and may have been recruited. Plaintiffs' Memorandum of Law at III-55 - III-56, III-65, III-81. To hold that these hospital Defendants have subjected themselves to the jurisdiction of New York by the simple act of employing New York residents to perform services outside the state would be contrary to Fourteenth Amendment due process requirements as it fails to demonstrate a purposeful availing of the benefits and protections of New York state. See Hanson, supra, at 253; Johnston v. Frank E. Basil, Inc., 802 F.2d 418, 420-21 (11th Cir. 1986). See also Farbman v. Esskay Mfg. Co., 676 F. Supp. 666, 669 (W.D.N.C. 1987) (case dismissed for lack of personal jurisdiction where there was no relationship between the defendant and the forum "except for the fortuitous circumstance that plaintiff was a citizen of the forum when hired").
Plaintiffs also rely upon the fact that other persons from New York applied to the hospital Defendants' emergency medicine residency programs. Plaintiffs' Memorandum of Law at III-55 - III-56, III-65. Although some hospital Defendants have mailed promotional materials to medical schools located in New York, Plaintiffs' Memorandum of Law at III-55, III-76, III-81, III-82, and advertised in nationally distributed publications, these contacts fail to create substantial and continuous activity in New York. Johnston, supra, at 420 (an advertisement in a state newspaper offering employment opportunities outside the state, or sending an individual to interview the resident does not satisfy due process considerations for purposes of personal jurisdiction); Schenck v. Walt Disney Co., 742 F. Supp. 838, 841 (S.D.N.Y. 1990) (defendant not subject to jurisdiction under Section 301 on the basis of its solicitation of business through New York representatives by way of advertisements, sending promotional materials, maintaining a contract with a New York advertising firm, and paying commissions to travel agents where all reservations had to be confirmed by the corporation in Florida).
Additionally, the filing of applications for admission to Defendants' emergency medicine residency programs is often the result of unilateral activity initiated by the prospective resident, rather than the residency program. See Selman, 494 F. Supp. 603, 611 (the administration of defendant association of medical colleges admission test on a regular basis in New York, along with the mailing of applications to New York medical schools, is insufficient to support jurisdiction under Section 301). Cf. Kingsepp, 763 F. Supp. 22, 27 (Dartmouth engaged in a continuous and systematic course of conduct sufficient to find that it was doing business under Section 301 as it actively solicited students by sending representatives to 44 secondary schools in the state yearly, engaged in substantial commercial activity in the state, had a banking relationship with Chase Manhattan Bank since 1982, with at least two bank accounts, issued bonds through Goldman Sachs on at least four occasions, and owned real property in the state). Here, in the absence of evidence particularizing whether medical staff members were in fact recruited by any hospital Defendants in New York, such a finding would be based on inadmissible supposition.
Further, as New York is the second most populous state in the country and has several medical school located within it, it is reasonable to infer that hospital residency programs operated in other states will receive a significant number of New York applicants, and that numerous New York educated physicians or previous residents of New York are practicing in hospitals throughout the country. Thus, the number of physicians who graduated from New York medical schools or were New York residents before practicing at one of the hospital Defendants is irrelevant in the determination of whether these hospitals are subject to personal jurisdiction as it fails to demonstrate the purposeful availing of substantial benefits of New York state essential to a properly based finding of doing business. See Hanson, supra, at 253. Moreover, the number of applications received from medical students and physicians who resided or were trained in New York seeking positions or privileges at one of the Defendant hospitals is not, as explained, a contact that supports the exercise of personal jurisdiction absent evidence of advertent recruitment.
Plaintiffs rely on the issuance of bonds, to raise capital, through New York financial markets as a contact with New York sufficient to presume jurisdiction under Section 301. Plaintiffs' Memorandum of Law at III-13 - III-80. However, the location in New York of service organizations, such as law firms or investment banking companies, which perform financial and related legal services for the hospital Defendants in connection with such offerings, does not represent activity in New York by the hospital Defendants for jurisdictional purposes. Bush v. Stern Brothers & Co., 524 F. Supp. 12, 14 (S.D.N.Y. 1981) (the location in New York of firms, such as law firms and investment services, which perform services for a defendant for a fee does not represent activity by the defendant in New York for jurisdictional purposes). See Stark Carpet, supra, at 506. Compare Kingsepp, supra, at 27 (although the court found that Dartmouth College was doing business in New York, the court did not indicate that the college's issuance of four bond offerings without the additional contacts as found by the court, in sending representatives to forty-four New York schools each year, engaging in substantial commercial activity in the state, maintaining two bank accounts, and owing a remainder interest in real property in New York, would be sufficient to allow jurisdiction under Section 301.) Thus, the retention of these firms for legal and financial services in connection with occasional bond issues is distinguishable from the retention of accountants and attorneys in New York on a continuous basis for purposes of finding jurisdiction pursuant to Section 301. Bush, supra, at 14. See also Nordic Bank PLC v. Trend Group, Ltd., 619 F. Supp. 542, 566 (S.D.N.Y. 1985) (where defendants each marketed in excess of $ 100 million of commercial paper through New York brokerage firms, but did not sell the notes directly to the public (the banks sold them to New York commercial paper dealers who then reoffered them to United States investors), and the sale of commercial paper was an essential aspect of the defendants' business, such contacts with New York were considered limited, sporadic, and not so substantial and continuous as to support a finding of doing business). Further, the defendants in Nordic Bank had also underwritten several multi-million dollar securities offerings and designated New York brokerage firms to represent them in connection with these offerings. Id. at 566 n. 23. However, "these infrequent forays into investment banking were neither substantial nor continuous enough to establish the corporate defendants' presence in New York." Id. at 566.
As with most enterprises, borrowing money for capital or operating purposes is an activity incidental to the hospital Defendants' primary business, thus, the Defendants' issuance of bonds to obtain capital, and visits by each Defendant to help consummate the bond sales do not amount to the continuous business necessary to support jurisdiction under Section 301. See Crucible Ventures, supra, (the solicitation and execution of business loans, where defendant's president visited the state twenty-five times over a three year period to obtain the business loans, did not constitute doing business with the requisite measure of permanence and continuity to confer jurisdiction pursuant to Section 301). See also PaineWebber Inc. v. Westgate Group, Inc., 748 F. Supp. 115, 120 (S.D.N.Y. 1990) (defendant's "desire to get a big 'New York' Investment house is not a purposeful availment of New York as a forum," thus, defendant's contacts with New York were held not to establish jurisdiction).
Therefore, each hospital Defendant's use of New York companies in issuing bonds to raise capital, the use of investment advisors or other New York professional organizations, and the hiring of New York attorneys by Defendants Ohio State University Hospital and the University of Massachusetts Medical Center in connection with defending against suit, are not sufficient contacts with New York to provide for jurisdiction under the solicitation-plus doctrine. Additionally, the business trips taken by Defendants' executives to negotiate and conclude the bond offerings are also insufficient to establish jurisdiction over the hospital Defendants. PHLCORP, Inc. v. Wichita Mortgage Corporation, 1991 U.S. Dist. LEXIS 927, *7, 1991 WL 12328, *3 (S.D.N.Y. 1991) (ten business trips taken by three executives over a period of fourteen months were not sufficient to establish systematic and continuous presence within the state); Hoffritz for Cutlery, 763 F.2d 55, 57-58 (fifty-four visits to New York to discuss business with plaintiff insufficient).
Plaintiffs also contend that charitable contributions received by the hospital Defendants from residents of New York support subjecting the hospitals to jurisdiction in New York. Plaintiffs' Memorandum of Law at III-31, III-63, III-74 n. 28, III-81. However, there is no indication or evidence presented in this record that explains how or whether such contributions were solicited or were received.
Although the court must draw all reasonable inferences in favor of the Plaintiffs, the court cannot infer conclusions that do not have any reasonable basis in fact. See Hoffritz for Cutlery, Inc., 763 F.2d at 57; Marine Midland Bank, 664 F.2d 899, 904. If there was any solicitation of gifts from New York, such donations more likely occurred as the result of requests through the mails from the state in which each hospital Defendant is located or from unsolicited gifts. Further, it is unreasonable to assert that the charitable contributions received by any of the hospital Defendants were sufficient to confer jurisdiction over the Defendants,
as these contributions were not substantial, and did not result in or from continuous and systematic activity in New York. Hutton v. Piepgras, 451 F. Supp. 205, 209 (S.D.N.Y. 1978) (Mayo Clinic's receipt of charitable contributions, open laboratory facilities available nationwide, toll-free telephone service and nationwide circulation of free medical publications did not amount to presence in the state under Section 301). See also Steego Corporation v. Ravenal, 830 F. Supp. 42, 50-51 (D.Mass. 1993) (making donations by resident of forum state to non-resident charitable institutions does not constitute continuous and systematic activity in the forum state to confer personal jurisdiction).
Another factor which will support a finding of jurisdiction under Section 301 is the in-state presence of employees engaged in business activity. Lane, 750 F. Supp. at 125; Pellegrino v. Stratton Corporation, 679 F. Supp. 1164, 1171 (N.D.N.Y. 1988). Plaintiffs argue that a defendant, such as University of California (Los Angeles) Medical Center, which attended a nursing job fair in New York in 1991, supports finding jurisdiction.
Plaintiffs' Memorandum of Law at III-55, III-76. Further, Plaintiffs assert that trips to New York for professional meetings, seminars, continuing education courses, training, or other such reasons demonstrate presence within New York. Plaintiffs' Memorandum of Law at III-22, III-26, III-32, III-42 - III-43, III-46, III-48, III-56, III-58, III-64, III-68, III-73. However, it is clear that these contacts are not systematic and continuous, and will not be sufficient to constitute presence in New York in order to obtain jurisdiction under Section 301. Lane, supra, at 125 (sending employees to two trade shows in the forum state is not sufficient for jurisdiction under Section 301, further, if the employees solicited reservations at the two trade shows, this would nevertheless be insufficient to meet the in-state activity test as the two occasions cannot be characterized as continuous or permanent activity). See Landoil Resources, 918 F.2d at 1045-46 (occasional forays into the jurisdiction do not constitute continuous presence or the substantial activities justifying application of the solicitation-plus doctrine under Section 301).
Under the solicitation-plus test, presence is established when substantial solicitation is coupled with other New York contacts of a continuous nature, such as a New York certificate of incorporation, bank account, or phone number. Gonzalez v. Press Parts, Inc., 1995 U.S. Dist. LEXIS 15257, *10, 1995 WL 608307, *3 (S.D.N.Y. 1995) (citing Rolls-Royce Motor, supra, at 1044). As the record in this case does not permit an inference of the extensive solicitation required under Section 301 to support finding personal jurisdiction over any of the hospital Defendants except for Johns Hopkins Hospital, Plaintiffs have failed to demonstrate substantial solicitation by a preponderance of the evidence. Thus, the solicitation-plus doctrine does not establish personal jurisdiction in this court over any of the remaining hospital Defendants.
As the contacts listed by Plaintiffs do not demonstrate substantial solicitation by any of the Defendants, except for Johns Hopkins Hospital, the court need not address the remaining contacts alleged to satisfy the "plus" portion of the New York solicitation-plus doctrine. However, for purposes of completeness, the court will briefly address the "plus" contacts alleged by Plaintiffs.
The remaining contacts asserted by the Plaintiffs for the "plus" portion of the Section 301 solicitation-plus test include contracting for temporary nursing services, contracting for local advertising services with an agency that has a New York office, participating in multi-center trials or a study with a New York site, participating in a consortium, purchasing supplies from New York companies, affiliations with New York entities, participating in "on-line" national databases, sporadically printing advertisements in local publications, maintaining New York bank accounts, or maintaining a toll-free number which may be accessible from New York. Plaintiffs' Memorandum of Law at III-13 - III-80. Although these activities, except participating in the MATCH and FREIDA database services, constitute contacts with New York, to predicate jurisdiction pursuant to Section 301 on these facts would ascribe undue significance to essentially tenuous and intermittent contacts. See Landoil, 918 F.2d at 1043; Vendetti, 802 F. Supp. 886, 889. See, e.g., Maresca v. Holiday Inns, Inc., 1993 U.S. Dist. LEXIS 57, at *8 (S.D.N.Y. 1993) (Virginia hotel which participates in a national franchise system that includes a nationwide database and a toll-free reservations number was not amenable to jurisdiction in New York); Walsh v. Maryland Bank, N.A., 806 F. Supp. 437, 441 (S.D.N.Y. 1992) (credit card issuer located in Maryland was not doing business in New York for purposes of long-arm statute by virtue of maintaining a toll-free number for customers in the state to request credit card applications and to utilize payment services membership association which was based in New York); Vendetti, supra, at 894 (no Section 301 jurisdiction over defendant with eight New York bank accounts); Grove Valve & Regulator Co. v. Iranian Oil Services Ltd., 87 F.R.D. 93 (S.D.N.Y. 1980) (English corporation's maintenance of local bank accounts does not, without more, amount to doing business in the state); Stark Carpet, supra, at 506 (the location of a defendant's suppliers does not represent any activity by the defendant in New York); Weinberg v. Colonial Williamsburg, Inc., 215 F. Supp. 633, 639-40 (E.D.N.Y. 1963) ("Certainly the mere existence of a bank account is not conclusive as to the fairness of subjecting defendant to suit in this forum"); Fremay, Inc. v. Modern Plastic March. Corp., 15 A.D.2d 235, 222 N.Y.S.2d 694, 700 (App.Div. 1st Dep't. 1961) ("existence of a bank account in New York by itself" is not sufficient to show that a foreign corporation is doing business in New York). Compare Perkins v. Benguet Consolidated Mining Co., 342 U.S. 437, 448, 96 L. Ed. 485, 72 S. Ct. 413, reh'g denied, 343 U.S. 917, 96 L. Ed. 1332, 72 S. Ct. 645 (1952) (While defendant's operations in the Philippine Islands were shut down during the Japanese occupation of the Philippine Islands, the president of the company maintained an office in Ohio from which he carried on his personal business and kept company files, carried on correspondence relating to the company and its employees, drew and distributed salary checks on behalf of the company for himself and two secretaries, maintained active bank accounts carrying substantial balances of company funds, an Ohio bank acted as transfer agent for the company stock, several directors meetings were held in Ohio, and the president supervised policies for the rehabilitation of company properties in the Philippines and dispatched funds to cover purchases of the machinery necessary for the rehabilitation. The Supreme Court held that these Ohio contacts constituted continuous and systematic supervision of the necessarily limited wartime activities of the company, thus, Ohio could exercise jurisdiction over the corporation.); United Rope Distributors, Inc. v. Kimberly Line, 785 F. Supp. 446, 450 (S.D.N.Y. 1992) (distinguished several cases as they concerned bank accounts which were incidental to the business activities of the corporations that owned them, rather than a bank account which "represents a more substantial voluntary activity in New York" such as one for the receipt of "substantially all of the income of a foreign corporation for the payment of substantially all of its business expenses"). These activities do not demonstrate a continuous and systematic presence in New York by any of the hospital Defendants, and, therefore, fall short of establishing jurisdiction under the solicitation-plus doctrine.
Plaintiffs also assert that Dr. Bock, Dr. Chisholm, Dr. Strange, and Dr. Wagner's activities in connection with the RRC-EM and its review of the emergency medicine residency programs is another contact which supports jurisdiction over Detroit Receiving Hospital and University Health Center, Medical College of Pennsylvania and Hospital, Mercy Hospital and Medical Center, and Methodist Hospital of Indiana, the hospitals which sponsor the emergency medicine residency programs with which their physicians are connected, in this district. Plaintiffs' Memorandum of Law at III-35 - III-36, III-42, III-48, III-58. However, Plaintiffs have not shown that any action by these physicians with respect to the RRC-EM was undertaken on behalf of these hospitals. Chrysler Capital Corp, 778 F. Supp. 1260, 1266 (citing Marine Midland Bank, supra, at 904). Accordingly, such review activities are not attributable to the respective hospital Defendants with which these physicians are affiliated or employed. See Discussion Section II(b) (3), infra.
Additionally, jurisdictional contacts must exist at or near the time of filing of the summons and complaint, Andros, 714 F. Supp. 669, in this case, January 13, 1994. As a result, some of the contacts alleged by the Plaintiffs are too stale to be sufficient to obtain personal jurisdiction. Thus, the fact that Mercy Hospital and Medical Center had a $ 1 million certificate of deposit account at a New York bank from November of 1990 through November of 1991, which was closed over two years before the Second Amended Complaint was filed, does not help establish jurisdiction over the medical center. The existence of a bank account is alone not a sufficient basis for jurisdiction. See Holtzman v. Lauder, 1994 U.S. Dist. LEXIS 2837, 1994 WL 88013, *4 - *5 (S.D.N.Y.) reargument denied, 1994 U.S. Dist. LEXIS 4157, 1994 WL 118786 (S.D.N.Y. 1994) (general maintenance of a bank account in New York without more does not constitute doing business under Section 301); Grove Valve & Regulator Co. v. Iranian Oil Servs. Ltd., 87 F.R.D. 93 (S.D.N.Y. 1980) (English corporation's maintenance of local bank accounts does not, without more, amount to doing business in the state); Weinberg v. Colonial Williamsburg, Inc., 215 F. Supp. 633, 639-40 (E.D.N.Y. 1963) ("certainly the mere existence of a bank account is not conclusive as to the fairness of subjecting defendant to suit in this forum."); Hastings v. Piper Aircraft Corp., 274 A.D. 435, 84 N.Y.S.2d 580, 583 (App. Div. 1st Dep't. 1948) (nonresident manufacturer that solicits no business in New York but has account in local bank not doing business in New York). Compare United Rope Distributors, Inc. v. Kimberly Line, 770 F. Supp. 128, 132-33 (S.D.N.Y. 1991), adhered to on reconsideration, 785 F. Supp. 446, 449-50 (S.D.N.Y. 1992) (personal jurisdiction upheld over a foreign corporation on the basis of a New York bank account, where the bank account was used for the receipt of substantially all of the income of the business and payment of substantially all of its expenses; in effect, the foreign corporation was "conducting its business" through the New York account).
As Plaintiffs have failed to demonstrate that the hospital Defendants, except for Johns Hopkins Hospital, systematically and continuously solicited business in New York as required under the solicitation-plus test, personal jurisdiction is not established over these Defendants pursuant to N.Y. CPLR Section 301.
Council of Emergency Medicine Residency Directors
The Council of Emergency Medicine Residency Directors ("CORD") is an organization whose membership consists solely of emergency medicine residency training programs. Plaintiffs' Memorandum of Law, Appendix Volume 2, Exhibit 3, Doc. No. C3. Each member program may have two representatives consisting of the residency director and a designee of the program. Id. The purposes of CORD include the improvement of the quality of emergency medical care, establishing and maintaining high standards in emergency medicine training programs, enhancing the quality of instruction in emergency medicine residency programs, and improving communications between faculty members of various emergency medicine training programs. Id.
In demonstrating that CORD is subject to personal jurisdiction pursuant to Section 301, Plaintiffs assert several contacts that CORD has with New York, including the fact that (1) Dr. Peter Viccellio of Defendant SUNY at Stony Brook University Hospital, located in New York, has been a member of CORD's Board of Directors since May of 1994, and is currently the liaison to the CORD program committee, which plans the programs for all national CORD meetings,
(2) CORD conducts its business through its directors, committees and members by telephone conference calls and sending out materials to members, including New York residents, (3) Dr. Viccellio has participated in at least one, and perhaps several conference calls as a member of the CORD board of directors, (4) the CORD Task Force on Overcrowding in 1990 and 1991 was headed by Dr. Nina Mazur, of the Brooklyn Hospital Center, with participating members from Bellevue Hospital in New York City and Stony Brook University Hospital, (5) Dr. Mazur conducted conference calls in conjunction with the activities of the task force and prepared a survey to be sent to all CORD member programs, (6) Dr. Chisholm indicated that in connection with his membership in CORD, he has had telephone conversations with CORD members in New York, (7) Dr. Viccellio and Dr. Mazur were both members of the CORD Ad Hoc Committee on Alternative Pathways,
and participated in conference calls on December 19, 1991 and January 23, 1992 to discuss issues related to this litigation, Dr. Viccellio also participated in a third conference call on February 6, 1992, which may have been with any of thirteen other New York physicians, (8) the CORD Ad Hoc Committee on Alternative Pathways surveyed all 162 representatives of its member programs, including twelve New York member hospitals, one hundred of these surveys were returned, (9) twelve CORD member institutions are located in the state of New York, thus, representative forms and dues are collected from each of these twelve members, (10) the State University of New York at Buffalo, located within this district, became a member in October of 1993,
and its representative, Dr. G. Richard Braen, is the current president of ABEM, (11) CORD solicited Buffalo's membership by sending it materials when its residency program received accreditation, including an application and forms for naming the program's representatives, and (12) CORD sends each of the twelve member programs in New York, as well as all of its other members, newsletters, president's messages, reports, notices of meetings, educational materials, slide bank slides, minutes, agendas, surveys, and invoices for dues through the mails. Plaintiffs' Memorandum of Law at III-83 - III-86.
Although Plaintiffs have enumerated several contacts with New York, they have failed to demonstrate a continuous course of conduct by CORD upon which to predicate personal jurisdiction. The only solicitation in New York alleged by the Plaintiffs is that CORD solicited its members by sending them each materials after the emergency medicine residency program received accreditation from the RRC-EM. However, merely sending an application and information through the mail on a sporadic basis is not a sufficient contact for personal jurisdiction. Landoil Resources, 918 F.2d at 1043; Vendetti, 802 F. Supp. at 889; Tauza, 115 N.E. at 917. Further, CORD has no other business contacts with New York, as it does not own, lease, or occupy any real or personal property located in New York, it does not authorize representatives to act on its behalf in New York, it has never held any meetings in New York, and it pays no taxes, has no employees, addresses or telephone listings, and has no license to do business in New York. CORD's Motion to Dismiss, filed May 12, 1994, Affidavit of Steven Dronen, M.D., at PP2-3 ("Dronen Affidavit").
CORD does have a few members in this state, receives dues from these members, and sends materials to its members in this district. However, these contacts are not sufficient under Section 301 to support a finding of jurisdiction. Selman, 494 F. Supp. at 610-11 (no personal jurisdiction over the Association of Medical Colleges ("AAMC") under Section 301 despite the fact that twelve of its 125 members were New York medical schools, it helped create the Medical College Admission Test, which was administered in New York, it sponsored centralized applications processing for medical students, including those from New York, mailed applications to New York medical schools, and published journals, conducted research, and held meetings and forums for the advancement of medical education). Based on the foregoing, the court finds no jurisdiction over CORD under Section 301.
2. Jurisdiction for Transacting Business under Section 302(a) (1)
A defendant not "doing business" in New York within the meaning of Section 301 may nevertheless be subject to jurisdiction in New York on a lesser showing of contacts with this state if the cause of action arises from those contacts. See N.Y.Civ. Prac. L. & R. § 302(a) (1); Beacon Enterprises, Inc. v. Menzies, 715 F.2d 757, 763 (2d Cir. 1983). Section 302(a) (1) provides that a court may exercise personal jurisdiction over any nondomiciliary who in person or through an agent "transacts any business within the state or contracts anywhere to supply goods or services in the state." N.Y. Civ. Prac. L. & R. § 302(a) (1) (McKinney 1990). "If the defendant has 'transacted business' in New York, it is suable on any cause of action that arises out of the transaction." Hoffritz for Cutlery, Inc., supra, at 58. See N.Y. Civ. Prac. L. & R. § 302(a) (1).
Demonstrating that a defendant "transacted business" in New York and is suable on a cause of action arising from that transaction requires considerably less contact with New York than is necessary to establish that a defendant is doing business, which renders the defendant subject to suit on unrelated causes of action. Beacon Enterprises, Inc., supra, at 763. Section 302(a) (1) is a "single act statute" and "proof of one transaction in New York is sufficient to invoke jurisdiction, even [if] the [defendant] never enters the state, so long as the [defendant's] activities [in New York] were purposeful and there is a substantial relationship between the transaction and the claim asserted." Kreutter v. McFadden Oil Corp., 71 N.Y.2d 460, 522 N.E.2d 40, 43, 527 N.Y.S.2d 195 (N.Y. 1988). See Beacon, supra, at 764 ("defendant's transaction of business in New York must 'bear a substantial relationship to the transaction out of which the instant cause of action arose'") (quoting McGowan v. Smith, 52 N.Y.2d 268, 419 N.E.2d 321, 323, 437 N.Y.S.2d 643 (N.Y. 1981); Fontanetta v. American Board of Internal Medicine, 421 F.2d 355, 357 (2d Cir. 1970) (section 302 requires a direct relation between the cause of action and the in-state conduct).
In making the determination of whether a defendant is transacting business under Section 302(a) (1), the court must examine the totality of defendant's activities with the forum state. Eck v. United Arab Airlines, Inc., 360 F.2d 804, 810-11 (2d Cir. 1966); Falik v. Smith, 884 F. Supp. 862, 866-67 (S.D.N.Y. 1995) (citing GB Marketing USA Inc. v. Gerolsteiner Brunnen GmbH & Co., 782 F. Supp. 763, 769 (W.D.N.Y. 1991)). If, under the totality of the circumstances, a defendant purposefully availed itself of the privilege of conducting business in New York, thereby invoking the benefits and protections of its laws, the defendant "transacts business." Broadcasting Rights International Corp. v. Societe du Tour de France, S.A.R.L., 675 F. Supp. 1439, 1443 (S.D.N.Y. 1987) (citations omitted).
Plaintiffs assert that each of the hospital Defendants "have purposeful, systematic, and routine contacts with New York medical students and medical schools" through FREIDA and the MATCH, Plaintiffs' Memorandum of Law at IV-1 - IV-3, and their claims are sufficiently related to the Defendants' participation in these programs so that it is "not unfair" to find that Plaintiffs' claims arise out of such participation. Plaintiffs' Memorandum of Law at IV-2. Defendants maintain that FREIDA and the MATCH do not grant them access to residents, and thus do not constitute the transaction of business in New York. Defendants' Joint Reply Memorandum at p. 39. Defendants further argue that "ABEM's closure of the practice track - the source of Plaintiffs' injury - bears no 'direct relation' to the administrative services afforded by FREIDA and the Match." Defendants' Joint Reply Memorandum at p. 39.
The present controversy arose as the result of ABEM's closure of the practice track, thereby denying Plaintiffs eligibility to sit for ABEM's emergency medicine certification examination, and from working for hospitals which require physicians practicing emergency medicine to be ABEM certified or eligible. Second Amended Complaint at PP3-12. While Plaintiffs argue that the hospital Defendants participated in ABEM's conspiracy by accepting only ABEM certified or eligible physicians to practice in their emergency departments, and used services such as FREIDA and the MATCH to recruit residents for their residency programs, such conduct is not the transacting of business in New York and, hence, is insufficient to permit jurisdiction over the hospital Defendants under Section 302(a) (1).
Plaintiffs' cause of action, moreover, did not arise as the result of any of the Defendants' participation in the MATCH or FREIDA. As discussed, Discussion Section II(b) (1), supra, the MATCH is an independent nonprofit organization located in Washington D.C. Randlett Affidavit No. 1 at P3. The MATCH service is offered, for a fee, to residency programs in the United States, and prospective resident physicians worldwide. Randlett Affidavit No. 2 at P4. The service performed by the MATCH occurs at the close of the residency application process, and the MATCH only sorts the ranking preferences of the programs and the applicants. Randlett Affidavit No. 1 at P3; Randlett Affidavit No. 2 at P5. FREIDA is an informational database. Hedrick Affidavit at PP3, 5. All activities related to FREIDA are performed in Illinois by the AMA, including collection of information, publication and marketing, and sales. Hedrick Affidavit at P7. Moreover, no hospital or residency program has any control or responsibility for either the MATCH or FREIDA. Hedrick Affidavit at P7; Randlett Affidavit No. 2 at P3. Significantly, as relevant to jurisdictional considerations, utilization of these services must first be initiated by the individual medical student applicant. Randlett Affidavit No. 1 at P3; Randlett Affidavit No. 2 at PP5, 7; Grenholm Affidavit at P2. None of the remaining contacts alleged by the Plaintiffs for jurisdiction under Section 301 are sufficiently related to the cause of action to sustain jurisdiction under Section 302(a) (1). For example, advertising campaigns, intermittent recruiting activity, travel to New York for professional meetings or seminars, participation in multi-center research trials, receipt of charitable donations, the treatment of New York residents, the issuance of bonds or use of professional services in New York, and the employment of physicians or residents who attended New York medical schools or resided in New York are insufficiently related to Plaintiffs' cause of action to allow jurisdiction pursuant to Section 302(a) (1). See Muollo v. Crestwood Village, Inc., 155 A.D.2d 420, 547 N.Y.S.2d 87, 88 (App.Div. 2d Dep't. 1989) (relationship between defendant's filing of prospectus and advertising in New York regarding the sale of a condominium and prospective purchaser's injury while inspecting defendant's New Jersey condominium insufficient for jurisdiction under Section 302(a) (1)); Apicella v. Valley Forge Military Academy & Junior College, 103 A.D.2d 151, 478 N.Y.S.2d 663, 665 (App.Div. 2d Dep't. 1984) (tort claim for harm to New York resident attending New Jersey school did not arise out of recruitment visits to New York by school employees and advertisements for the school in a New York newspaper); Selman, 494 F. Supp. at 612 (nexus requirement satisfied only if defendant associations' officers were in New York in an official capacity relating to the cause of action).
Accordingly, the court finds no identifiable nexus or substantial relationship between the hospital Defendants' contacts with New York and Plaintiffs' cause of action sufficient to predicate jurisdiction under Section 302(a) (1).
3. Conspiracy Jurisdiction under Section 302(a) (2)
Having concluded that the hospital Defendants and CORD are not transacting business in New York thereby warranting exercise of personal jurisdiction under Section 302(a) (1), the court must next consider Plaintiffs' contention that these Defendants are subject to New York jurisdiction under Section 302(a) (2), providing for jurisdiction over a non-domiciliary who commits a tortious act within the state. N.Y.Civ.Prac. L. & R. § 302(a) (2) (McKinney 1990).
"It is basic that the burden of proving jurisdiction is upon the party who asserts it and that he must show by the complaint and supporting affidavits the essential requirements of the jurisdictional statute." Lehigh Valley Industries v. Birenbaum, 527 F.2d 87, 92 (2d Cir. 1975). To establish jurisdiction under Section 302(a) (2) on the basis of conspiratorial acts, Plaintiffs must make a factual showing of a conspiracy by a preponderance of the evidence, and allege specific facts warranting the inference that each defendant was a member of the conspiracy. Chrysler Capital Corporation v. Century Power Corporation, 778 F. Supp. 1260, 1266 (S.D.N.Y. 1991) (citing Marine Midland Bank, 664 F.2d at 904). In addition, "[a] plaintiff must also show that the defendant's co-conspirator committed a tortious act in New York." Chrysler Corp., supra, at 1266. Further, to impute conduct, for the purposes of establishing personal jurisdiction under Section 302(a) (2) over an out-of-state defendant co-conspirator, it must also be shown that (1) each defendant had an awareness of the effects in New York of its activity, (2) the activity of the co-conspirators in New York was to the benefit of each of the out-of-state conspirators as to whom personal jurisdiction is sought, and, (3) the co-conspirators acting in New York acted "at the direction or under the control," or "at the request of or on behalf of" the non-resident defendants. Chrysler Corp., supra, at 1269.
It is well established that acts committed in New York by a co-conspirator of an out-of-state defendant pursuant to a conspiracy may subject the defendant to jurisdiction under Section 302(a) (2). Chrysler Capital Corp., supra, at 1266. However, it is also settled that existence of a civil conspiracy alone does not qualify as an independent tort in New York for jurisdictional purposes under New York law. Durante Brothers and Sons, Inc. v. Flushing National Bank, 755 F.2d 239, 251 (2d Cir.), cert. denied, 473 U.S. 906, 87 L. Ed. 2d 654, 105 S. Ct. 3530 (1985) (New York law does not recognize a substantive tort of conspiracy); Grove Press, Inc. v. Angleton, 649 F.2d 121, 123 (2d Cir. 1981); Chrysler Corp., supra, at 1267 n. 8; ABKCO Industries, Inc. v. Lennon, 52 A.D.2d 435, 384 N.Y.S.2d 781, 784 (App.Div. 1st Dep't. 1976). Therefore, to sustain jurisdiction under Section 302(a) (2) Plaintiffs must first demonstrate that one of the Defendants, as a co-conspirator, committed a tortious act in New York state. East Coast Novelty Company, Inc. v. City of New York, 842 F. Supp. 117, 122 (S.D.N.Y. 1994) (citing Valdan Sportswear v. Montgomery Ward & Co., 591 F. Supp. 1188 (S.D.N.Y. 1984)); Chrysler Corp., supra, at 1267. To cross this threshold Plaintiffs focus on ABEM, contending that as ABEM committed a tortious act within New York state resulting from its wrongful denial of Plaintiffs' applications to obtain ABEM certification, this tortious act is, for Section 302(a) (2) purposes, imputed, as an act in furtherance of the conspiracy, to each of the out-of-state, non-resident Defendants including each of the hospital Defendants and CORD, as members of a conspiracy to restrain trade, thereby creating a basis for personal jurisdiction in New York under Section 302(a) (2). Plaintiffs' Memorandum of Law at Section V.
a. Tortious Act Within New York
Plaintiffs urge that ABEM's denial of the opportunity to Plaintiffs to gain ABEM certification is "the heart of plaintiffs' claims for violations of the antitrust laws, which the Court determined were 'in the nature of a tort,'" and therefore that Defendant ABEM committed a tortious act in New York,
Plaintiffs' Memorandum of Law at V-2, forming the legal predicate for Section 302(a) (2) jurisdiction. It is contended that ABEM committed a tort within New York by corresponding with Dr. Daniel and other New York based Plaintiffs, by mail and telephone, regarding their applications for certification as ABEM Diplomates. Plaintiffs' Memorandum of Law at V-2; Appendix Volume 1, Exhibits 4, 5. To sustain Section 302(a) (2) jurisdiction, a defendant need not be physically present in New York in order to commit the required tortious act. See Pilates, Inc. v. Pilates Institute, Inc., 891 F. Supp. 175, 180 (S.D.N.Y. 1995) (in cases of trademark infringement, the wrong takes place where goods are passed off to the consumer, rather than where deceptive labels are affixed or where goods are wrapped in misleading packaging). Although the federal courts in this circuit have held that the transmission of a communication by mail or telephone from outside the state into New York is generally not an act committed within the state for purposes of jurisdiction under Section 302(a) (2), Van Essche v. Leroy, 692 F. Supp. 320, 324 (S.D.N.Y. 1988) (citing cases), an action alleging violations of antitrust laws is considered a claim for injuries sustained in New York,
and thus is in the nature of a tort supporting long-arm jurisdiction under Section 302(a) (2). Daniel, supra, at 919 (citing Fashion Two Twenty, Inc. v. Steinberg, 339 F. Supp. 836, 841 (E.D.N.Y. 1981)); Albert Levine Associates v. Bertoni & Cotti, S.p.A., 314 F. Supp. 169, 171 (S.D.N.Y. 1970) ("The injury flowing from the conspiracy is the tort. The claim, therefore, arises where the plaintiff suffered injury to his business."). See also Bigelow v. RKO Radio Pictures, 327 U.S. 251, 264, 90 L. Ed. 652, 66 S. Ct. 574 (1946) (antitrust violations are essentially tortious acts); Rios v. Marshall, 530 F. Supp. 351, 367 n. 16 (S.D.N.Y. 1981) (an antitrust violation is characterized as a tortious act for purposes of personal jurisdiction). But see Van Essche, supra, at 324 (in a suit alleging prima facie tort, intentional infliction of emotional distress and tortious interference with employment relationship, the court explained that "'the mere occurrence of the injury in [New York] certainly cannot serve to transmute an out-of-state tortious act into one committed [in New York]'") (quoting Longines-Wittnauer Watch Co. v. Barnes & Reinecke, Inc., 15 N.Y.2d 443, 209 N.E.2d 68, 77, 261 N.Y.S.2d 8 (N.Y.), cert. denied sub nom., Estwing Manufacturing Co., Inc. v. Singer, 382 U.S. 905, 15 L. Ed. 2d 158, 86 S. Ct. 241 (1965)). Thus, if Plaintiffs suffered antitrust injuries in New York,
the injury occurring in New York is sufficient to meet the requirement that a tortious act take place in New York under Section 302(a) (2). See N.Y.Civ. Prac. L. & R. § 302(a) (2) (McKinney 1990) (requiring that the defendant commit a tortious act within the state).
In this case, Plaintiffs' have claimed that ABEM's denial of several of the individual Plaintiffs' applications to sit for ABEM's certification examination, while they resided in New York, and the denial of their appeals, caused injuries in New York state. Plaintiffs' Memorandum of Law at V-2 - V-3; Appendix Volume 1, Exhibits 4, 5; Appendix Volume 2, Exhibit 3; Appendix Volume 3. Plaintiffs claim that they have received less remuneration than ABEM-certified physicians, have been unable to apply for or denied positions, promotions, or professionally related directorships based on lack of ABEM certification, and that a manpower shortage in the medical specialty of emergency medicine has been created as the result of the alleged conspiracy. Id. As these injuries flow from the alleged conspiracy and are factually supported by the Plaintiffs' declarations, Plaintiffs' Memorandum of Law, Appendix Volume 1, Exhibits 4 and 5, Plaintiffs have demonstrated that they have suffered injuries within New York.
Plaintiffs also assert that a tortious act was committed by ABEM in New York because ABEM's current president, Dr. G. Richard Braen, is a residency director at the State University of New York at Buffalo. Plaintiffs' Memorandum of Law at V-3. However, the fact that the president of ABEM, a Michigan corporation, is a New York resident does not demonstrate that any tortious acts by ABEM took place in New York. See Allstate Life Insurance Co. v. Linter Group, Ltd., 782 F. Supp. 215, 221 (S.D.N.Y. 1992), aff'd, 994 F.2d 996 (2d Cir.), cert. denied, 510 U.S. 945, 114 S. Ct. 386, 126 L. Ed. 2d 334 (1993) ("'the mere presence of one conspirator [in a forum state] ... does not confer jurisdiction over another alleged conspirator'") (quoting Leasco, 468 F.2d 1326, 1343). Moreover, it is ABEM and not Dr. Braen which is alleged to be a member of the conspiracy.
Further, the Plaintiffs' conspiracy claim is, in itself, insufficient to support jurisdiction under Section 302(a) (2) as "conspiracy is merely the string which serves to connect defendants to the actionable wrong and the overt acts which caused injury." Chrysler Corp., supra, at 1267 n. 8 (citing Kajtazi v. Kajtazi, 488 F. Supp. 15, 21 (E.D.N.Y. 1978) and Rutkin v. Reinfeld, 229 F.2d 248, 252 (2d Cir.), cert. denied, Kaplow v. Reinfeld, 352 U.S. 844, 1 L. Ed. 2d 60, 77 S. Ct. 50 (1956)). See Allstate, supra, at 221 (to establish jurisdiction on the basis of conspiracy plaintiffs must demonstrate that the defendant's co-conspirator committed a tortious act pursuant to the conspiracy in New York). Therefore, although the Plaintiffs' conspiracy allegations standing alone are insufficient to constitute an independent tort under New York law, Chrysler Capital Corp., supra, at 1267, assuming the truth of Plaintiffs' other allegations and drawing every reasonable inference in Plaintiffs' favor, as is required on this motion, Marine Midland Bank, supra, at 904, Plaintiffs have made a sufficient showing that ABEM committed a tortious act, based upon the infliction of antitrust injuries in this state, to support personal jurisdiction under Section 302(a) (2).
b. Factual Showing of a Conspiracy in Restraint of Trade
The antitrust conspiracy alleged in Plaintiffs' Second Amended Complaint grows out of a scheme conducted by physicians and the hospitals with which they are affiliated to unreasonably restrict competition in emergency medicine by denying other practicing, experienced, and qualified physicians, including Plaintiffs, eligibility to obtain ABEM certification.
When ABEM was established in 1976, the two available ways to achieve eligibility to become certified for ABEM's Diplomate status were the "residency" path, whereby the applicant physician was required to complete an approved three-year residency training program in emergency medicine, and the practice track, which required the applicant to complete 7000 hours and sixty months of practice in emergency room medicine, with twenty-four months of continuing emergency medicine practice. In accordance with its original charter provisions, ABEM discontinued the practice track on June 30, 1988 and now relies exclusively on the residency path for eligibility to sit for ABEM's examination. To become ABEM certified, upon completion of the initial qualification, following either the former practice track or the current residency path, physicians must also pass a certification examination. Plaintiffs allege that by promoting ABEM certification as the benchmark of quality and fitness to practice emergency medicine within the national health marketplace and then closing the practice track, ABEM and its co-conspirators ensured a high demand for the emergency medicine resident training programs now required by ABEM and offered by the hospital Defendants.
Plaintiffs' conspiracy theory, upon which they seek to predicate jurisdiction in conformance with their burden, posits that the hospital Defendants, acting through their physician "agents," as alleged by Plaintiffs, control several emergency medicine organizations, including ABEM, CORD, the American College of Emergency Physicians ("ACEP"),
and the Residency Review Committee for Emergency Medicine ("RRC-EM"),
and acting through these organizations, agreed with ABEM to close the ABEM practice track, thereby excluding competitor non-ABEM certified emergency physicians from the market. This conspiracy, according to Plaintiffs, among the hospital Defendants, ABEM, CORD, and the other emergency medicine organizations, ACEP, the Society for Academic Emergency Medicine ("SAEM"),
the University Association for Emergency Medicine ("UA/EM"),
the Society for Teachers of Emergency Medicine ("STEM"),
the Association of Academic Chairs in Emergency Medicine ("AACEM"),
the American Medical Association's ("AMA") Section on Emergency Medicine,
and the RRC-EM, also involved an agreement not to permit any alternative routes to attain ABEM certification, required that all directors, faculty, and attending physicians in emergency medicine be ABEM certified, and promoted ABEM certification as the sole standard of competency for emergency department physicians. Plaintiffs' Memorandum of Law at V-8 - V-59.
Plaintiffs contend that each hospital Defendant is both a principal and beneficiary of the conspiracy, as each hospital has created and implemented policies to employ only ABEM certified physicians, thereby excluding many emergency physicians who have more experience, knowledge, and skill than those with ABEM certification. Second Amended Complaint at PP78-82, 89, 108-110.
Plaintiffs also assert that ABEM has a monopoly over the market for board certified emergency medicine physicians, and that the exclusion of other qualified emergency medicine physicians from the market for board certified emergency medicine physicians is an unreasonable restraint on trade. Second Amended Complaint at PP122-135. In Plaintiffs' view, this exclusion results in the suppression of competition with ABEM Diplomates. Plaintiffs also maintain that the resultant diminished supply of emergency medicine Diplomates has inflated the cost and thus price for emergency medical services, and created a manpower shortage in the field of emergency medicine. Plaintiffs' Memorandum of Law at V-60 - V-68. To find jurisdiction based upon Section 302(a) (2) in this case, it is therefore necessary to determine whether Plaintiffs have established by a preponderance of the evidence that the alleged conspiracy among ABEM, CORD, the other non-defendant professional emergency medicine organizations and the hospital Defendants was in violation of the antitrust laws, an overt act was committed in its furtherance, and each Defendant over whom jurisdiction under Section 302(a) (2) is sought intentionally participated in furtherance of the unlawful agreement. See Chrysler Capital Corp., supra, at 1267.
The Sherman Act prohibits unlawful or corrupt agreements, meaning every contract, combination, or conspiracy "in restraint of trade or commerce among the several States," 15 U.S.C. § 1, and also prohibits monopolizing "any part of the trade or commerce among the several States." 15 U.S.C. § 2.
To prove a violation of the Sherman Act Section 1, a plaintiff must establish the existence of a contract, combination or conspiracy which constitutes a restraint of trade and has an impact on interstate commerce. See Standard Oil of New Jersey v. United States, 221 U.S. 1, 55 L. Ed. 619, 31 S. Ct. 502 (1911). Independent unilateral action is not actionable under Section 1 of the Sherman Act. See Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752, 767, 81 L. Ed. 2d 628, 104 S. Ct. 2731 (1984). Plaintiffs therefore carry the burden of presenting sufficient evidence to permit the inference of concerted action, and evidence that tends to exclude the possibility that the defendants were acting independently. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 588, 89 L. Ed. 2d 538, 106 S. Ct. 1348 (1986); Monsanto v. Spray-Rite Serv. Corp., 465 U.S. 752, 763-64, 79 L. Ed. 2d 775, 104 S. Ct. 1464 (1986). Thus, an "antitrust plaintiff should present direct or circumstantial evidence that reasonably tends to prove that the [defendants] 'had a conscious commitment to a common scheme designed to achieve an unlawful objective.'" Monsanto, supra, at 764 (quoting Edward J. Sweeney & Sons, Inc. v. Texaco, Inc., 637 F.2d 105, 111 (3d Cir. 1980), cert. denied, 451 U.S. 911, 68 L. Ed. 2d 300, 101 S. Ct. 1981 (1981)). To be actionable under the Sherman Act, a conspiracy cannot be inferred from similar conduct absent an examination of "the [anticompetitive] motivation of the alleged conspirators, [but] proof of [such] motivation is not required when there exists either direct evidence of collaboration or other probative circumstantial evidence (beyond evidence of mere parallel and innocent conduct) from which to infer an [anticompetitive] agreement." Bhan, supra, at 1015 (citing Wilson Indus., Inc. v. Chronicle Broadcasting Co., 794 F.2d 1359, 1365 (9th Cir. 1986) and VI P. Areeda, Antitrust Law PP1412a, 1425b (1986)).
According to Plaintiffs, the conspiracy involves an agreement among ABEM, CORD, and the hospital Defendants which included the elimination of the practice track by ABEM,
the rejection by various professional organizations of "alternative pathways" to residency programs to attain ABEM certification, RRC-EM's setting of special requirements including ABEM certification for faculty in emergency medicine residency programs, ACEP and ABEM's encouragement of hospitals to hire ABEM certified emergency physicians, and the refusal of ...