Antitrust Law Daily Wrap Up, ANTITRUST—W.D. Tex.: Texas Medical Board denied certification order for appeal, (Aug 16, 2016)

By Michael Menzhuber, J.D., LL.M.

The Texas Medical Board (TMB) was denied certification of an appeal of an order denying its motion to dismiss an antitrust claim brought by Teladoc, Inc., a telehealth service, by the federal district court in Austin. The court determined that the procedural posture of the case, in the middle of the appellate briefing, warranted denial of the motion (Teladoc, Inc. v. Texas Medical Board, August 15, 2016, Pitman, R.).

A motion by TMB to dismiss a suit by Teladoc to enjoin TMB from enforcing rules that would purportedly restrict telehealth services in Texas was denied by the court in December 2015. On January 8, 2016, TMB appealed the order denying the motion to dismiss. Shortly thereafter, the court granted a joint motion by the parties to stay all proceedings until the appeal to the Fifth Circuit was resolved.

The appeal was confined to the issue of whether TMB was entitled to dismissal under the doctrine of state action immunity. While maintaining that they were entitled to an interlocutory appeal under the collateral-order doctrine, TMB requested that the court certify its appeal under 28 U.S.C. § 1292(b) so that the issue of whether they were entitled to state action immunity could be considered by the Fifth Circuit.

Teladoc argued that the TMB’s request, which was filed nearly seven months after entry of the interlocutory order that TMB sought to certify, was extremely untimely. The court noted that, while § 1292(b) does not set a deadline for parties to move for certification of an order by the district court, district courts have exercised their discretion to deny motions for certification deemed untimely. It then concluded that it should consider the timeliness and procedural posture of the case in deciding whether or not to grant a motion for certification under § 1292(b).

The court found that regardless of the number of days TMB delayed in seeking certification or the interlocutory order, the procedural posture of the case compelled it to deny TMB’s motion. The filing of motion in the middle of Teladoc’s briefing window burdened Teladoc with deciding whether or not to address the issue while uncertainty existed as to whether an independent basis for appeal would be created. The court concluded that denial of the motion would eliminate that uncertainty and burden.

The court also found the timing of TMB’s motion raised problematic procedural and jurisdictional questions if it were granted, including: (1) whether Teladoc would need to file a response brief in the pending appeal if the Fifth Circuit had not yet made a decision regarding whether it would remand; (2) would the parties start their briefing over; and (3) after certification, would the parties be able to raise issues outside of the state-action immunity within the appeal.

Finally, despite TMB’s arguments to the contrary, there was not good excuse for TMB’s delay in filing its motion for certification, the court concluded.

The case is No. 1:15-cv-00343-RP.

Attorneys: Drew Navikas (Cleary Gottlieb Steen & Hamilton, LLP) and Dudley D. McCalla (Jackson Walker LLP) for Teladoc, Inc. and Teladoc Physicians, PA. James Carlton Todd, Office of the Attorney General, for Texas Medical Board.

Companies: Teladoc, Inc.; Teladoc Physicians, PA

Cases: Antitrust TexasNews