Letter to Federal Trade Commission Chairman Timothy Muris |
Feb. 4, 2003 By Facsimile and U.S. Mail Re: Antitrust Violation by New Jersey Medical Society Dear Chairman Muris: As we are sure you are aware, many physicians are upset with recent spikes in the price of medical malpractice insurance. We are writing to you because in New Jersey and possibly other jurisdictions doctors, with the express support of their medical societies, are taking the law into their own hands by staging "job actions," in which they agree not to perform any but emergency medical procedures. That kind of collective activity is a classic form of group boycott that violates the antitrust laws and section 5 of the Federal Trade Commission Act, 15 U.S.C. 45, which outlaws unfair methods of competition. This is precisely the same conduct that the United States Supreme Court held to be a violation of those laws in 1990, when the Federal Trade Commission brought a similar case against lawyers for refusing to serve indigent defendants in the District of Columbia, as a means to protest the District’s failure to raise the statutory rates of pay applicable to those cases. The purpose of this letter is to ask the Commission to launch an immediate investigation into the New Jersey matter and to make clear to doctors and medical societies elsewhere that they too will be subject to similar investigations if they follow the pattern in New Jersey. The evidence that you will need to begin your investigation can be found on the web page of the Medical Society of New Jersey, www.msnj.org. The most salient aspect of that material is that it leaves no doubt that the boycott is being orchestrated by the Society and is not simply the idea of individual physicians. Thus, as reflected on the page of Media Releases (attached), the Society’s Board adopted a resolution on January 19th supporting the plan to refuse to provide non-emergency and non-urgent care starting February 3rd and pledging its full support, including legal, communications, and public relations services to carry out the plan. The Society also called on "all physicians to march on Trenton on Tuesday February 4, 2003 to demonstrate their resolve and the need for immediate action," which obviously made it impossible for those who join the march to perform medical services at the same time. Under the heading "Medical Liability Advocacy Central," the Society has two other significant items. The first is entitled "Physician Job Action" (attached), which is another name for a strike or group boycott. Some of what is on these pages reflects perfectly legitimate efforts to influence public policy, but the title and several of the entries make it clear that the Society is unwilling to resort only to legal means and is instead coordinating the efforts of New Jersey doctors to withhold their services as a means of coercing the legislature to enact laws that will economically benefit doctors. Thus, the Society describes a model letter that it has written for doctors to send to their patients "to help them understand why you [a doctor] are taking this action and how it may impact them." The same entry informs the doctors that "MSNJ will also prepare a notice to be posted on your door if your office is closed during the job action." The following item, titled "Hospital Communication," makes clear that MSNJ is coordinating these efforts at hospitals as well, including setting up conference calls "among these physician leaders prior to and during any job action." The other significant group of materials is untitled, and is also found under "MSNJ Advocacy;" it provides further confirmation that the decision to withhold medical services has been organized, coordinated, and implemented by the New Jersey Medical Society and is plainly not the result of the individual decisions of doctors acting on their own. In all likelihood the Medical Society will reply that it is not guilty of a group boycott because it is exercising its rights under the First Amendment to petition the government for redress of grievances and to speak out (and assemble to protest) against what it considers to be injustices in the laws. But the answer to that claim is that it was unequivocally rejected by the Supreme Court in Federal Trade Commission v. Superior Court Trial Lawyers Ass’n, 493 U.S. 411 (1990). The Court made clear that its decision did nothing to preclude any person or organization from expressing their views on matters on which they seek legislative action, but the antitrust laws do not countenance individuals or organizations from collectively refusing to serve their clients (here, their patients) in order to gain leverage with the legislature. As we have outlined above, the MSNJ has plainly engaged in collective activities the express purpose of which is to cause doctors throughout New Jersey to deny medical services to their patients as a means of pressuring the New Jersey legislature to enact laws that will increase the economic well-being of doctors. It is the unlawful nature of the means, not the legislative ends, that gives rise to the violation of law. If the Federal Trade Commission under President Reagan was willing to bring a case against criminal defense lawyers who withheld their services, and to take it all the way to the Supreme Court, this Commission should be at least as willing to start an investigation here. Indeed, the equities here are even less in favor of the striking doctors than they were of the trial lawyers. In the trial lawyers case, there were no alternative "buyers" of their services since they worked exclusively on cases funded by the District of Columbia Government, whereas here it is at least theoretically possible for doctors to shop elsewhere for malpractice insurance. In addition, the lawyers were protesting their pay of $30 an hour for in-court time and $20 an hour for preparation, which had not been increased in 13 years during a time of rampant inflation. The average gross intake for the protesting lawyers was about $45,000 a year, out of which they had to pay all of their expenses. By contrast, the average earnings of a physician in New Jersey are in excess of $155,000 a year. Moreover, in contrast to members of labor unions, who are permitted by the labor laws to withhold their services from their employers in order to pressure their employers to improve their terms and conditions of employment, the doctors are either self-employed or organized as individual professional corporations and in that capacity are refusing to do business with their patients in order to put pressure on the government to change its rules. So far, the New Jersey job action has lasted for only two days, but there is no way of knowing whether it will continue or whether it will resume if the Medical Society does not achieve its demands. Moreover, similar plans are underway in other states, and therefore it is important that the Commission take decisive action now to head off further illegal conduct. Nor should the fact that patients, hospitals and others injured by this illegal conduct may have lawsuits, in which they may recover treble damages, deter the Commission from acting to assure that the law is not violated. There are two steps that the Commission should take that are urgently needed. First, the Commission should immediately open an investigation of the conduct of the Medical Society of New Jersey in leading the job action and announce that fact. Second, it should make a public announcement that the law as enunciated in FTC v. Superior Court Trial Lawyers Ass’n is still the law and that the Commission will closely examine similar job actions in other states when doctors attempt to achieve their legislative ends by means that violate the antitrust law. We are sending a similar letter to the Attorney General of New Jersey asking him to review the Medical Society’s conduct under New Jersey’s antitrust laws and to take appropriate action under them.
Sincerely, Alan B. Morrison Frank Clemente Sidney M. Wolfe, M.D. |