TALONE et al v. THE AMERICAN OSTEOPATHIC ASSOCIATION
OPINION FILED. Signed by Judge Noel L. Hillman on 6/12/17. (js)
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
ALBERT TALONE, D.O., CRAIG
WAX, D.O., RICHARD RENZA,
D.O., ROY STOLLER, D.O.,
individually and on behalf of
all others similarly
THE AMERICAN OSTEOPATHIC
DUANE MORRIS LLP
1940 ROUTE 70 EAST
CHERRY HILL, NJ 08003
SETH A. GOLDBERG
DUANE MORRIS LLP
30 SOUTH 17TH STREET
PHILADELPHIA, PA 19103
On behalf of Plaintiffs
JACK R. BIERIG
STEVEN J. HOROWITZ
NEIL G. NANDI
SIDLEY AUSTIN LLP
ONE SOUTH DEARBORN STREET
CHICAGO, ILLINOIS 60603
JEFFREY WARREN LORELL
18 COLUMBIA TURNPIKE
FLORHAM PARK, NJ 07932
JEFFREY S. SOOS
JENNIFER ROSE O'CONNOR
ONE GATEWAY CENTER
10TH & 13TH FLOORS
NEWARK, NJ 07102-5311
On behalf of Defendant
HILLMAN, District Judge
This case concerns antitrust and fraud claims brought by
osteopathic physicians against the American Osteopathic
Association for its alleged unlawful tying of board
certification and professional association membership.
Presently before the Court is the motion of the American
Osteopathic Association to dismiss Plaintiffs’ claims, or in the
alternative, transfer venue to the Northern District of
For the reasons expressed below, Defendant’s motion
will be denied in its entirety.
Plaintiffs are osteopathic physicians (“DOs”) who have been
board certified as medical specialists by the American
Osteopathic Association (“AOA”), and who have also purchased
membership in the AOA.
Approximately 48,000 practicing DOs are
members of the AOA, and approximately 32,000 of those DOs are
AOA board certified.
The AOA has notified Plaintiffs and AOA
board certified DOs that their board certification will be
invalidated and cancelled unless they purchase annual membership
in the AOA.
Plaintiffs claim that in order to avoid the loss of
their board certification, Plaintiffs and AOA board certified
DOs have been forced to purchase AOA membership even though it
serves no purpose with respect to, and has no actual connection
with, AOA board certification or their practice as physicians.
Plaintiffs further claim that the AOA’s unlawful tying
arrangement has reduced the number of DOs willing to purchase
membership in other professional physician associations and has
thereby foreclosed competition in the market for membership in
professional physician associations (the “Association Membership
Plaintiffs claim that the reduction in purchases by
AOA board certified DOs of non-AOA professional physician
association memberships has erected barriers to entry, and thus
has prevented potential rivals to the AOA from entering the
Association Membership Market.
In addition, Plaintiffs claim
that the AOA’s unlawful tying arrangement has raised the costs
faced by its existing rivals, as well as softened price
competition between the AOA and its existing rivals.
By reducing competition in the Association Membership
Market through its unlawful tying arrangement, Plaintiffs claim
that the AOA has been able to increase the price of its annual
membership dues to almost double the price that its competitors
in the Association Membership Market charge for membership in
their associations, and there has been a corresponding reduction
in competitive offerings. 1
Plaintiffs further claim that there
is no evidence that the AOA’s tying arrangement enhances the
efficiency of its product offerings, meaning there is no procompetitive business justification for its unlawful tying
In addition to the tying arrangement, Plaintiffs claim that
DOs who received their AOA board certification prior to 2000
were promised by the AOA that it was a “lifetime” certification
that would never expire, and that promise was renewed in 2013,
when the AOA initiated its Osteopathic Continuous Certification
Plaintiffs claim, however, that the AOA
knowingly concealed that lifetime certification holders would
also have to purchase annual membership in the AOA to avoid the
invalidation and cancellation of their prior “lifetime”
Plaintiffs claim that the AOA’s annual regular membership dues
presently are $683 per year, and it is estimated that the AOA is
receiving more than $20,000,000 per year by unlawfully forcing
AOA membership on Plaintiffs and AOA board certified DOs under
the threat of invalidating prior board certifications. In
contrast, other physician associations that provide the same
benefits as the AOA membership charge $350-$525 per year.
Plaintiffs allege that the services provided by the AOA
membership are the same as other medical professional
associations. The benefits include continuing medical education
courses, networking opportunities, information about advances in
medicine, billing resources, and volume discount arrangements on
things like auto insurance, car rentals, personal credit cards,
and certain physician related services.
Based on the foregoing, Plaintiffs, on their own behalf and
on behalf of the class and sub-classes, have brought the present
action to obtain injunctive and monetary relief against the AOA
for this alleged anticompetitive tying arrangement, alleging
that it violates Section 1 of the Sherman Act, 15 U.S.C. § 1
(“Section 1”) and Section 3 of the New Jersey Antitrust Act
(“NJAA”), N.J.S.A. 56:9-3 (“Section 3”), and the New Jersey
Consumer Fraud Act (“NJCFA”) N.J.S.A. 56:8-1, et. seq.
The AOA has moved to dismiss Plaintiffs’ claims, or in the
alternative, transfer venue to the Northern District of
Plaintiffs have opposed the AOA’s motion on both
Subject matter jurisdiction
This Court has jurisdiction over Plaintiffs’ federal claims
under 28 U.S.C. § 1331, and supplemental jurisdiction over
Plaintiffs’ state law claims under 28 U.S.C. § 1367.
Standard for Motion to Dismiss
When considering a motion to dismiss a complaint for
failure to state a claim upon which relief can be granted
pursuant to Federal Rule of Civil Procedure 12(b)(6), a court
must accept all well-pleaded allegations in the complaint as
true and view them in the light most favorable to the plaintiff.
Evancho v. Fisher, 423 F.3d 347, 351 (3d Cir. 2005).
It is well
settled that a pleading is sufficient if it contains “a short
and plain statement of the claim showing that the pleader is
entitled to relief.”
Fed. R. Civ. P. 8(a)(2).
liberal federal pleading rules, it is not necessary to plead
evidence, and it is not necessary to plead all the facts that
serve as a basis for the claim.
F.2d 434, 446 (3d Cir. 1977).
Bogosian v. Gulf Oil Corp., 562
However, “[a]lthough the Federal
Rules of Civil Procedure do not require a claimant to set forth
an intricately detailed description of the asserted basis for
relief, they do require that the pleadings give defendant fair
notice of what the plaintiff’s claim is and the grounds upon
which it rests.”
Baldwin Cnty. Welcome Ctr. v. Brown, 466 U.S.
147, 149-50 n.3 (1984) (quotation and citation omitted).
A district court, in weighing a motion to dismiss, asks
“‘not whether a plaintiff will ultimately prevail but whether
the claimant is entitled to offer evidence to support the
Bell Atlantic v. Twombly, 550 U.S. 544, 563 n.8 (2007)
(quoting Scheuer v. Rhoades, 416 U.S. 232, 236 (1974)); see also
Ashcroft v. Iqbal, 556 U.S. 662, 684 (2009) (“Our decision in
Twombly expounded the pleading standard for ‘all civil actions’
. . . .”); Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir.
2009) (“Iqbal . . . provides the final nail-in-the-coffin for
the ‘no set of facts’ standard that applied to federal
complaints before Twombly.”).
Following the Twombly/Iqbal standard, the Third Circuit has
instructed a two-part analysis in reviewing a complaint under
First, the factual and legal elements of a claim
should be separated; a district court must accept all of the
complaint's well-pleaded facts as true, but may disregard any
S. Ct. at 1950).
Fowler, 578 F.3d at 210 (citing Iqbal, 129
Second, a district court must then determine
whether the facts alleged in the complaint are sufficient to
show that the plaintiff has a “‘plausible claim for relief.’”
Id. (quoting Iqbal, 129 S. Ct. at 1950).
A complaint must do
more than allege the plaintiff's entitlement to relief.
see also Phillips v. Cnty. of Allegheny, 515 F.3d 224, 234 (3d
Cir. 2008) (stating that the “Supreme Court's Twombly
formulation of the pleading standard can be summed up thus:
‘stating . . . a claim requires a complaint with enough factual
matter (taken as true) to suggest’ the required element.
‘does not impose a probability requirement at the pleading
stage,’ but instead ‘simply calls for enough facts to raise a
reasonable expectation that discovery will reveal evidence of’
the necessary element”).
A court need not credit either “bald
assertions” or “legal conclusions” in a complaint when deciding
a motion to dismiss.
In re Burlington Coat Factory Sec. Litig.,
114 F.3d 1410, 1429-30 (3d Cir. 1997).
The defendant bears the
burden of showing that no claim has been presented.
U.S., 404 F.3d 744, 750 (3d Cir. 2005) (citing Kehr Packages,
Inc. v. Fidelcor, Inc., 926 F.2d 1406, 1409 (3d Cir. 1991)).
A court in reviewing a Rule 12(b)(6) motion must only
consider the facts alleged in the pleadings, the documents
attached thereto as exhibits, and matters of judicial notice.
S. Cross Overseas Agencies, Inc. v. Kwong Shipping Grp. Ltd.,
181 F.3d 410, 426 (3d Cir. 1999).
A court may consider,
however, “an undisputedly authentic document that a defendant
attaches as an exhibit to a motion to dismiss if the plaintiff’s
claims are based on the document.”
Pension Benefit Guar. Corp.
v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir.
If any other matters outside the pleadings are presented
to the court, and the court does not exclude those matters, a
Rule 12(b)(6) motion will be treated as a summary judgment
motion pursuant to Rule 56.
Fed. R. Civ. P. 12(b).
Before addressing the viability of Plaintiffs’ antitrust
and fraud claims, some background information on the AOA board
certification process explained in Plaintiffs’ complaint is
helpful to put Plaintiffs’ claims in the proper context.
In the United States, physicians who practice medicine
either hold a Doctor of Medicine degree (“MD”) or a Doctor of
Osteopathic Medicine degree (“DO”).
MDs are trained in the
principles and approaches of allopathic medicine, while DOs are
trained in the principles and approaches of osteopathic
After graduating from medical school and obtaining a
medical degree, and in order to practice medicine and obtain a
medical license in the U.S., a physician is required to complete
an accredited residency training program.
The AOA is the only
accrediting agency for osteopathic graduate medical education,
while the American College of Graduate Medical Education
(“ACGME”) accredits medical residency programs traditionally
filled by MD post-graduates.
Board certification is another component to practicing
Board certification is the process by which a MD or
DO demonstrates a mastery of basic knowledge and skills in a
In order to obtain board certification,
physicians must meet certain requirements and successfully pass
a series of examinations that demonstrate their mastery of their
skills in a particular medical specialty.
The AOA has established 18 Specialty Certifying Boards
(“AOA Board”) and the AOA’s Department of Certifying Board
Services (“ADCBS”) to administer the process of board
certification for DOs based on the principles of allopathic
The American Board of Medical Specialties (“ABMS”)
also offers board certification to physicians in various
specialties and sub-specialties.
DOs who complete their
residencies at an AOA accredited program are currently not
eligible for ABMS board certification.
Only MDs and DOs who
complete an ACGME residency are eligible to seek board
certification from one of the ABMS’ 24 Member Boards.
completion of an ACGME accredited residency program is one of
the prerequisites for ABMS Member Board certification
eligibility, ABMS board certification is not a viable
alternative for the majority of DOs who complete their
residencies in an AOA certified program and thus ABMS board
certification is not interchangeable with AOA board
In order to become board certified, the AOA charges
examination, processing and administrative fees, typically in
excess of $1,000.
The AOA then charges an annual board
certification maintenance fee.
Prior to about 2000, most DOs
who earned board certification from an AOA Board were promised
by the AOA that it was a “lifetime” board certification.
2000 on, most if not all AOA board certifications have had six,
eight, or 10 year terms.
In order for a DO who has completed an AOA residency program to
obtain ABMS Board Certification instead of, or in addition to,
AOA board certification, he or she would need to apply for, be
selected for, and then complete a second residency at an ACGME
accredited residency program. Completing a second residency is
not an economically viable or reasonable alternative for an
osteopathic physician who has already completed an AOA
accredited residency program and is in active practice.
Since August 1, 2012, in addition to their annual board
certification maintenance fee, the AOA has required all AOA
board certified DOs to purchase and maintain annual membership
in the AOA and pay the AOA’s annual membership dues in order to
avoid the AOA’s deactivation of their AOA board certification.
This requirement serves the basis for Plaintiffs’ claims.
noted above, Plaintiffs claim that the AOA’s tying scheme
violates Section 1 of the Sherman Act, 15 U.S.C. § 1 (“Section
1”) and Section 3 of the New Jersey Antitrust Act (“NJAA”),
N.J.S.A. 56:9-3 (“Section 3”), and the New Jersey Consumer Fraud
Act (“NJCFA”) N.J.S.A. 56:8-1, et. seq.
The AOA has moved to dismiss Plaintiffs’ antitrust claims
because they fail to provide sufficient facts to demonstrate
foreclosure of competition in the Association Membership Market
or that they have suffered any antitrust injury.
The AOA has
moved to dismiss Plaintiffs’ consumer fraud claim because it
fails to meet the heightened pleading standard for fraud claims.
The AOA has also moved, in the alternative, for the transfer of
the case to the Northern District of Illinois.
Each of the
AOA’s arguments will be addressed in turn.
Plaintiffs’ antitrust claims
For plaintiffs suing under federal antitrust laws, one of
the prudential limitations is the requirement of “antitrust
Ethypharm S.A. France v. Abbott Laboratories, 707
F.3d 223, 232 (3d Cir. 2013) (citing Section 4 of the Clayton
Act, which provides the statutory authorization for a private
antitrust suit); 15 U.S.C. § 15 (“[A]ny person who shall be
injured in his business or property by reason of anything
forbidden in the antitrust laws” may maintain a “private action
for treble damages.”)) (other citations omitted).
It does not
affect the subject matter jurisdiction of the court, as Article
III standing does, but prevents a plaintiff from recovering
under the antitrust laws.
Id. (citation omitted).
Generally, antitrust injury - which is “‘injury of the type
the antitrust laws were intended to prevent and that flows from
that which makes [the] defendants' acts unlawful’” - “‘is
limited to consumers and competitors in the restrained market
and to those whose injuries are the means by which the
defendants seek to achieve their anticompetitive ends.’”
233 (quoting Brunswick Corp. v. Pueblo Bowl–O–Mat, Inc., 429
U.S. 477, 489 (1977)) (other citation omitted).
Establishing the requisite standing by showing an antitrust
injury thus depends upon the type of antitrust violation
In this case, Plaintiffs allege a per se tying
violation, and a “rule of reason” tying violation.
“Tying is defined as selling one good (the tying product) on the
condition that the buyer also purchase another, separate good
(the tied product).”
Town Sound and Custom Tops, Inc. v.
Chrysler Motors Corp., 959 F.2d 468, 475 (3d Cir. 1992).
essential characteristic of an invalid tying arrangement lies in
the seller's exploitation of its control over the tying product
to force the buyer into the purchase of a tied product that the
buyer either did not want at all, or might have preferred to
purchase elsewhere on different terms.
When such ‘forcing’ is
present, competition on the merits for the tied item is
restrained and the Sherman Act is violated.”
Id. at 476
(quoting Jefferson Parish Dist. No. 2 v. Hyde, 466 U.S. 2, 12
The U.S. Supreme Court long ago established a “per se” rule
against tying arrangements in cases where it thought
exploitation of leverage is “probable.”
Parish, 466 U.S. at 15).
Id. (citing Jefferson
“[W]here (1) a defendant seller ties
two distinct products; (2) the seller possesses market power in
the tying product market; and (3) a substantial amount of
interstate commerce is affected, then the defendant's tying
practices are automatically illegal without further proof of
Id. at 477.
While the “per se illegality rule applies when a business
practice on its face has no purpose except stifling
competition,” conduct that does not trigger a per se analysis is
analyzed under a “rule of reason” test, which focuses on the
particular facts disclosed by the record to determine whether
the probable effect of the tying arrangement is to substantially
lessen competition, rather than merely disadvantage rivals.
Eisai, Inc. v. Sanofi Aventis U.S., LLC, 821 F.3d 394, 402–03
(3d Cir. 2016) (citations and quotations omitted).
Under the rule of reason test, a plaintiff must show a
substantial foreclosure of the market for the relevant product.
Id. (citations and quotations omitted).
Although the test is
not total foreclosure, the challenged practices must bar a
substantial number of rivals or severely restrict the market's
Id. (citations and quotations omitted).
The “concern is
not about which products a consumer chooses to purchase, but
about which products are reasonably available to that consumer.
For example, if customers are free to switch to a different
product in the marketplace but choose not to do so, competition
has not been thwarted - even if a competitor remains unable to
increase its market share.”
Id. (citations and quotations
However, even in cases where consumers have a choice
between products, the market is foreclosed if the defendant's
anticompetitive conduct renders that choice meaningless.
(citations and quotations omitted).
Here, the AOA contends that Plaintiffs have failed to plead
an antitrust injury because Plaintiffs are not competitors of
the AOA who have lost members due to the AOA’s alleged
The AOA further argues that
Plaintiffs’ claims that they purchased AOA memberships even
though they did not want AOA memberships is not sufficient to
show that the AOA possesses market power over the Association
Membership Market, or that the AOA has foreclosed other
association membership organizations from competition, both of
which are fatal to Plaintiffs’ antitrust claims.
Plaintiffs counter that their injuries are not as simple as
characterized by the AOA.
Plaintiffs claim that AOA board
certified DOs have no choice but to purchase AOA memberships
because they would lose their board certifications if they did
not purchase AOA memberships.
Plaintiffs claim that even though
they have the option of choosing another association membership,
and they would want to choose a different, less costly
membership, it is a meaningless choice because (1) they would
lose AOA certification and have to repeat the very time
consuming and expensive residency and board certification
process with the ACGME and ABMS, or (2) purchase a second
association membership, which is an additional yearly expense
and duplicative of many of the AOA membership benefits.
Plaintiffs further claim that the AOA’s tying arrangement and
the resulting lack of AOA board certified DOs’ meaningful choice
forecloses competition from other membership associations.
Plaintiffs also claim that the AOA’s tying arrangement allows
the AOA to inflate the price of its membership to almost double
the cost of other physician association memberships.
The Court finds at this pleading stage that Plaintiffs have
sufficiently stated claims for per se and “rule of reason”
Plaintiffs have pleaded that 32,000 AOA
board certified DOs from around the country have no choice but
to purchase AOA memberships that cost significantly more than
other physician association memberships with similar benefits,
resulting in almost $9 million in dues since August 2012, and
preventing other membership associations from competing for
those DOs’ business.
Plaintiffs have also pleaded that they
would choose a different membership association if they were not
tied to the AOA membership. 4
These allegations, when taken as
true, show that the AOA ties two distinct products, it has
market power in the tying product market, and it affects a
substantial amount of interstate commerce.
accepted as true, these allegations show that the AOA’s tying
The AOA argues that Plaintiffs’ single averment in their
complaint that “many AOA board certified DOs forego purchasing
memberships in other professional physician associations”
(Docket No. 18 at 30, ¶ 107), is a barebones conclusion that
does not meet the Twombly/Iqbal pleading standard. The Court
disagrees. Even though at a later stage in the case Plaintiffs
must present evidence to support that contention, Plaintiffs’
averment as pleaded is not a legal conclusion, but rather a
statement of fact, which when accepted as true, supports their
antitrust violation claims.
arrangement substantially lessens the competition so that other
professional association membership organizations are foreclosed
from competing for AOA board certified DOs’ business. 5
Consequently, the factual underpinning of Plaintiffs’
antitrust claims are sufficiently pleaded to move forward with
The AOA’s motion to dismiss Counts I through IV of
Plaintiffs’ complaint must be denied. 6
Plaintiffs’ NJCFA claim (Count V)
Plaintiffs claim that DOs who received their AOA board
certification prior to 2000 were promised by the AOA that it was
a “lifetime” certification that would never expire, and that
promise was renewed in 2013, when the AOA initiated its
The 16,000 AOA members without AOA board certification who
chose to purchase AOA memberships over other physician
association memberships are not handcuffed to AOA memberships
like AOA board certified DOs. It appears that their claim is
that the AOA’s market control over the tied DOs allows the AOA
to inflate its membership cost and shut out competition, which
then in turn injures non-board-certified AOA members because
they have paid inflated costs due to the softened competition –
in other words, increased pricing, without any offsetting procompetitive benefit. These allegations are also sufficient to
state a “rule of reason” antitrust claim.
Because “‘the New Jersey Antitrust Act shall be construed in
harmony with ruling judicial interpretations of comparable
federal antitrust statutes,’” Eisai, Inc. v. Sanofi Aventis
U.S., LLC, 821 F.3d 394, 403 (3d Cir. 2016) (quoting State v.
N.J. Trade Waste Ass'n, 472 A.2d 1050, 1056 (N.J. 1984)),
Plaintiffs’ claims based on New Jersey’s antitrust laws may
proceed for the same reasons as Plaintiffs’ claims based on
Osteopathic Continuous Certification program (“OCC”).
the AOA issued a brochure to “lifetime” board certification
holders that stated,
If you have a lifetime certification, you will not be
required to participate in OCC at this time. We do
strongly encourage your participation, particularly as more
states begin to require a maintenance of certification
process in order to maintain licensure.
(Docket No. 16 at 20, ¶ 114.)
Plaintiffs claim, however, that the AOA knowingly concealed
that lifetime certification holders would also have to purchase
annual membership in the AOA to avoid the invalidation and
cancellation of their prior “lifetime” certifications.
Plaintiffs claim that this deception constitutes a violation of
New Jersey’s Consumer Fraud Act, N.J.S.A. 56:8-2.
A claim under NJCFA must meet the Federal Civil Procedure
Rule 9(b) heightened pleading standard.
Frederico v. Home
Depot, 507 F.3d 188, 202-03 (3d Cir. 2007).
To satisfy this
standard, the plaintiff must “plead the date, time, and place of
the alleged fraud, or otherwise inject precision into the
allegations by some alternative means,” so that the defendant is
placed on notice of the precise misconduct with which it is
In re Riddell Concussion Reduction Litig., 77 F. Supp.
3d 422, 433 (D.N.J. 2015).
The NJCFA imposes liability on any person who uses: “any
unconscionable commercial practice, deception, fraud, false
pretense, false promise, misrepresentation, or the knowing,
concealment, suppression, or omission of any material fact with
intent that others rely upon such concealment, suppression or
Consumer fraud violations are
divided broadly into three categories: affirmative acts, knowing
omissions, and regulatory violations.
International Union of
Operating Engineers Local No. 68 Welfare Fund v. Merck & Co.,
Inc., 929 A.2d 1076, 1086 (N.J. 2007) (quotations and citation
To state a NJCFA claim, a plaintiff must allege three
elements: (1) unlawful conduct; (2) an ascertainable loss; and
(3) a causal relationship between the defendant’s unlawful
conduct and the plaintiffs’ ascertainable loss.
and citation omitted).
The AOA argues that Plaintiffs’ NJCFA claim fails because
in August 2012, “lifetime” board certified DOs were aware of the
AOA’s new rule that AOA board certified DOs were required to
purchase AOA memberships in order to retain their board
certifications, and it is not actionable fraud that that AOA did
not remind them of this requirement in its 2013 brochure.
The AOA’s view of what the “lifetime” board certification
holders knew cannot defeat Plaintiffs’ NJCFA claim as it is
The “lifetime” Plaintiffs allege that when they
obtained their “lifetime” status, AOA membership was not a
requirement to maintain their board certification.
publication issued to all “lifetime” board certification holders
titled, “Introduction to the AOA Osteopathic Continuous
Certification Process,” the AOA informed them in unambiguous
wording, “If you have a lifetime certification, you will not be
required to participate in OCC at this time.”
the AOA knew that “lifetime” board certification holders would
rely upon this statement, and the AOA knowingly and
intentionally omitted that the AOA was nonetheless going to
require “lifetime” board certification holders to purchase
membership in the AOA in order to avoid the deactivation of
their “lifetime” board certifications, causing them injury in
having to purchase AOA memberships.
These allegations satisfy the Rule 9(b) heightened pleading
standard and state a viable NJCFA claim.
Accordingly, the AOA’s
motion to dismiss Plaintiffs’ count alleging NJCFA violations
must be denied.
Whether the action should be transferred to the
Northern District of Illinois
The AOA argues that this case should be transferred to the
Northern District of Illinois pursuant to 28 U.S.C. § 1404(a).
Under § 1404(a), “[f]or the convenience of parties and
witnesses, in the interest of justice, a district court may
transfer any civil action to any other district or division
where it might have been brought.”
The goals of 28 U.S.C. §
1404(a) are “to prevent the waste of time, energy and money and
to protect litigants, witnesses and the public against
unnecessary inconvenience and expense.”
Van Dusen v. Barrack,
376 U.S. 612, 616 (1964) (citation omitted).
The burden is on
the moving party to establish the need for a transfer.
v. State Farm Ins. Co., 55 F.3d 873, 879 (3d Cir. 1995).
In considering a § 1404(a) motion, a court must take into
account public and private interests in determining whether
transfer is appropriate.
Jumara, 55 F.3d at 879.
plaintiff's forum preference as manifested in the original
choice; the defendant's preference; whether the claim arose
elsewhere; the convenience of the parties as indicated by
their relative physical and financial condition; the
convenience of the witnesses - but only to the extent that
the witnesses may actually be unavailable for trial in one
of the fora; and the location of books and records
(similarly limited to the extent that the files could not
be produced in the alternative forum).
Id. at 879 (citations omitted). The public interests are:
the enforceability of the judgment; practical
considerations that could make the trial easy, expeditious,
or inexpensive; the relative administrative difficulty in
the two fora resulting from court congestion; the local
interest in deciding local controversies at home; the
public policies of the fora; and the familiarity of the
trial judge with the applicable state law in diversity
Id. at 879–80 (citations omitted).
Although a plaintiff’s choice of forum is not entitled to
dispositive weight in the § 1404(a) calculus, it is black-letter
law that “‘the plaintiff's choice of venue should not be lightly
Yocham v. Novartis Pharmaceuticals Corp., 565 F.
Supp. 2d 554, 557 (D.N.J. 2008) (quoting Jumara, 55 F.3d at 879)
(other citations omitted).
“Indeed, in light of the paramount
consideration accorded to a plaintiff's choice of venue, courts
in this district have recognized that unless the balance of
inconvenience of the parties is strongly in favor of Defendant,
[Plaintiff's] choice of forum should prevail.”
and quotations omitted).
In this case, the only factor in the AOA’s favor is its own
desire to litigate in the Northern District of Illinois.
other relevant factors favor Plaintiffs:
Plaintiffs’ choice of
forum is New Jersey; even though the AOA’s policy of tying board
certification with AOA membership arguably took place at its
headquarters in Illinois, the effect of that policy has been
felt by 32,000 AOA board certification holders residing
throughout the country, with thousands located in New Jersey;
the AOA is not financially incapable of litigating in New
Jersey, while forcing Plaintiffs to litigate in Illinois could
cost more than their individual recovery and hinder their
medical practices; even though some witnesses and documents are
located in Illinois, there is no indication that those witnesses
will not voluntarily travel to New Jersey or that those
documents cannot be sent, by paper copy or electronically, to
New Jersey 7; the judgment would be enforceable in New Jersey; and
the Northern District of Illinois is not any less busy than this
This case is not similar to cases cited by the AOA to
support its position.
For example, the AOA cites to this
Court’s decision in Culp v. NFL Productions LLC, 2014 WL
4828189, at *4 (D.N.J. 2014) for the proposition that in class
action cases a plaintiff’s choice of forum is entitled to less
Even though that proposition is generally true, the
Court’s decision based on non-neutral dispositive factors for
transferring the action to the District of Minnesota under §
1404(a) did not hinge on that general proposition, but instead
was based on the fact that (1) three similar opt-out cases were
pending there, (2) only one of the nine plaintiffs resided in
New Jersey, with the others from across the country, (3) no
other similarly situated plaintiffs resided in New Jersey, and
(4) although NFL Films was produced in New Jersey, the
plaintiffs’ claims concerned images that were aired world-wide.
Moreover, on the plaintiff’s-choice-of-forum factor, this Court
Plaintiffs point out in their complaint that AOA executive
leadership resides in various states other than Illinois. The
complaint relates that 27 of 28 AOA Board of Trustee members
live outside of Illinois, including the current membership
chair, almost half live in New Jersey, Pennsylvania and other
East Coast states, two executive directors live in Virginia and
New York, and 16 of 18 AOA Bureau of Osteopathic Specialists
live outside of Illinois, with five on the East Coast.
found that it actually weighed in the plaintiffs’ favor,
although not significantly enough to be singularly dispositive
to the transfer analysis.
Culp, 2014 WL 4828189, at *5.
Here, in contrast, the AOA has not identified related
actions pending in the Northern District of Illinois, the AOA’s
alleged anti-competitive actions are directed to and felt in New
Jersey, three of four Plaintiffs are citizens of New Jersey and
maintain practices in New Jersey, the other Plaintiff lives and
practices two miles away in Philadelphia, and, according to
Plaintiffs’ complaint, thousands of similarly situated class
members live and practice in New Jersey.
The AOA also cites Association of American Physicians &
Surgeons, Inc. v. American Bd. of Medical Specialties, 2014 WL
1334260 (D.N.J. 2014) to support its transfer argument because
that court transferred, under § 1406(a), a case against the
Illinois-based American Board of Medical Specialties (“ABMS”) to
the Northern District of Illinois on the plaintiff’s claims that
ABMS’s new board recertification program violated § 1 of the
Even though the court transferred the action, it
did so in lieu of dismissal after finding that venue was
improper under 28 U.S.C. § 1391(b) because ABMS did not transact
business in New Jersey as defined by the § 12 of the Clayton
Act, and because all the substantial events underlying the
plaintiff’s claims occurred outside New Jersey.
AAPS, 2014 WL
1334260, at *7.
Here, AOA does not argue that venue is improper
under 28 U.S.C. § 1391 or § 12 of the Clayton Act, and it merely
seeks transfer for its convenience rather than to challenge the
propriety of venue in this Court.
In short, the AOA’s preference to transfer this action to
the Northern District of Illinois does not meet the purpose of §
1404(a), and its arguments cannot override the paramount
consideration accorded to Plaintiffs’ choice of venue.
Accordingly, the AOA’s request to transfer this case must be
For the foregoing reasons, the AOA’s motion to dismiss
Plaintiffs’ antitrust and NJCFA claims must be denied.
AOA’s alternative relief seeking the transfer of the action to
the Northern District of Illinois must also be denied.
appropriate Order will be entered.
June 12, 2017
At Camden, New Jersey
s/ Noel L. Hillman
NOEL L. HILLMAN, U.S.D.J.
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