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Antitrust charges against a board must be more than conclusory statements

A licensee charging that a board violated antitrust law may not simply allege that "the parties agreed," said the U.S. District Court for the District of Connecticut in a January 20 ruling. The case was brought by a veterinarian who contended that a disciplinary action against him stemmed from anticompetitive motivations. The court found that "the ultimate existence of an agreement under antitrust law is a legal conclusion, not a factual allegation, and thus plaintiff must allege facts affirmatively demonstrating such an agreement" (Robb v. Connecticut Board of Veterinary Medicine, 2016 WL 236209).

The veterinarian, John M. Robb, offered reduced dosages of a rabies vaccine to animal-patients in his animal hospital due to some adverse reactions experienced by smaller animals. After the Connecticut Department of Public Health brought changes against Robb on August 1, 2014, the Board of Veterinary Medicine ordered him to appear before it for a hearing over his provision of lower-than-manufacturer-recommended dosages. (In Connecticut, the board adjudicates charges but it is the public health department that conducts investigation and filing of charges.)

Robb filed a complaint and moved for an injunction to stop the administrative proceedings on June 12, 2015.

He alleged that the board members used the announcement of their investigation of him as part of their agreement and conspiracy, and he contended that their conduct “has no pro-competitive or business justification.”

Robb also argued that there was no basis for the administrative action because Connecticut state policy is ambiguous as to vaccination protocols generally and entirely silent on dosage amount. In Robb’s view, the board was pursuing its action for the anti-competitive reason that “offering such services threatens the profits that veterinarians, including three board members, make from vaccination.”

When the board moved to dismiss Robb’s action, the court held that Robb did have standing to bring action under Article III of the Constitution, and his Sherman Antitrust Act claim was sufficiently ripe for review. But, the court noted, an antitrust conspiracy claim requires evidence of conspiracy. “Conclusory allegations are insufficient to state an antitrust conspiracy claim under §1 of the Sherman Act.”

Robb ‘s complaint does not describe any action to the effect of a tacit or express agreement, the court said. “By failing to make a single allegation as to the conduct of the individuals that allegedly came to an illegal agreement, or as to the form, dates, place, structure or detail of such an agreement, Dr. Robb faces a significant hurdle, as a matter of law, to support his claim of an antitrust conspiracy.”

Apart from the fact that the board is an adjudicator and does not instigate charges, “any regulatory board comprised of industry members with a statutory duty to adjudicate regulatory violations will almost always have some common motive to conspire (i.e., excluding at least one competitor from the market). That motive cannot be independently sufficient to infer an antitrust conspiracy,” said the court.

The court also noted that this case is unlike that of North Carolina State Board of Dental Examiners v Federal Trade Commission, 135 S.Ct. 1101, 2015 WL 773331 (Feb. 25, 2015) which involved board members’ taking discretionary action (cease and desist letters) outside of the procedures mandated by state law. Here, Robb is referring to authorized actions by board members.

In dismissing Robb’s antitrust case, the court said the courts stated that “naked identification of a theoretical motive to conspire, without significantly more, is far from sufficient to establish the plausible existence of an agreement amongst competitors.”

“Dr. Robb has thereby failed to allege a plausible claim that the Defendants have conspired with each other.”