Antitrust Law Daily Wrap Up, ANTITRUST—M.D.N.C.: Duke University state action immunity question certified for appeal, (Feb 16, 2016)

By Greg Hammond, J.D.

Whether a public university’s status as a constitutionally-established entity is enough to entitle it, its employees, and Duke University (under an alleged no-hire agreement) to state action immunity from antitrust liability under Parker v. Brown, 317 U.S. 341 (1943), and its progeny, is a controlling question of law for which there is substantial ground for difference of opinion, according to the federal district court in Greensboro, North Carolina. The question was therefore certified for immediate appeal to the Fourth Circuit (Seaman v. Duke University, February 12, 2016, Eagles, C.).

A radiologist and professor of radiology at Duke University filed suit against Duke, Duke University Health System (DUHS), and various individuals, alleging that executives of DUHS entered into an express agreement with the University of North Carolina Health Care System (UNC Health) to not hire certain skilled medical personnel employed by each other. The only exception would be for faculty who were granted a promotion simultaneous to their hiring. The defendants entered into the express agreement with the knowledge and intent of reducing employee compensation and mobility by eliminating competition for skilled labor, the complaint alleges. The radiologist consequently brought claims for violation of the Sherman Act and the North Carolina Unfair and Deceptive Trade Practices Act.

The district court denied the motion to dismiss filed by Duke University and DUHS, concluding that UNC Health’s status as a constitutionally-established entity is not enough to entitle it, its employees, and Duke (under the alleged no-hire agreement) to state immunity from antitrust liability under Parker and that the question of immunity is better dealt with after development of the factual record.

Nevertheless, the court found that the question of immunity is a controlling question of law for which there is substantial ground for difference of opinion. If the defendants are entitled to such immunity as a matter of law, the lawsuit would be over as to those defendants and possibly all defendants, and both sides would avoid significant unnecessary expense, according to the court. If immunity is not available to the defendants as a matter of law, then discovery would be simplified and summary judgment could focus on other issues. The court therefore gave the defendants 10 days to apply to the Fourth Circuit for permission to appeal.

The case is No. 1:15-CV-462.

Attorneys: Robert M. Elliot (Elliot Morgan Parsonage, P.A.) for Danielle Seaman. Derek Ludwin (Covington & Burling, LLP) and Kelly Margolis Dagger (Ellis & Winters, LLP) for Duke University and Duke University Health System, Inc.

Companies: Duke University; Duke University Health System, Inc.

Cases: Antitrust NorthCarolinaNews