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Briefs and Other Related Documents

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United States Court of Appeals,Second Circuit.

Gregory F. DANIEL, M.D., Ian W. Cummings,M.D., John A. Timmons, M .D., Reed E.

Paulson, M.D., Albert J. Romanosky, M.D., BruceW. McNulty, M.D., On Behalf of

Themselves and All Others Similarly Situated,Plaintiffs-Appellants,

Joseph L. Albright, Jr., M.D., Lloyd G. Alch, M.D.,Richard Alexander, M.D.,

Jeffrey S. Anderson, M.D., Robert J. Aquino, M.D.,Yadon Arad, M.D., Joseph P.

Arno, M.D., David E. Baum, M.D., James R.Beutnagel, M.D., Joel S. Bogner,

M.D., Charles L. Boursier, M.D., Scott J. Campbell,M.D., Kenneth W. Cartaxo,

M.D., Edgar H. Castellanos, M.D., Joseph F.Ceravolo, M.D., Manoj V. Chag,

M.D., Patricia C. Chase, M.D., Kenneth G. Christian,Jr., M.D., Mark S.

Clippinger, M.D., John T. Columbus, M.D., MichaelCooks, M.D., Craig J. Cott,

M.D., Mary Dampier, M.D., David M. Davis, M.D.,Patrick J. Difonzo, M.D.,

Andrew B. Edwards, M.D., Nancy J. Ferguson, M.D.,Denise F. Ferraris, M.D.,

Kathy W. Forred, M.D., Daniel S. Frank, M.D.,Michael S. Gelfond, M.D., Michael

G. Ginder, M.D., Keith S. Goldstein, M.D., Maria T.Granzotti, M.D., Robert E.

Gross, M.D., Thomas K. Hall, M.D., John A.Hatherley, M.D., Anthony J. Horwitz,

M .D., Donald A. Human, M.D., Jonathan A. Jarman,M.D., Jerry Jones, III, M.D.,

Mark R. Kaehler, M.D., Allen Kagan, M.D., K.Michael Keil, M.D., Martin E.

Kernberg, M.D., Herschell King, M.D., M. StephenKramer, M.D., Steven M.

Kushel, M.D., Charles J. Kutner, M.D ., Richard E.Lally, M.D., Peter Lamelas,

M.D., Lucille Lanna, M.D., Stephen G. Larkin, M.D.,Phillip J. Lastella, M.D.,

Robert N. Leach, M.D., Richard E. Leahy, M.D.,Arthur H. Legate, M.D., Jack M.

Levin, M.D., Ronald J. Lugo, M.D., James W.Lunan, M.D., Soren S. Madden, M .

D., Mian A. Majeed, M.D., Thomas A. Malone,M.D., Michael R. Monolescu, M.D.,

John A. Mardones, M.D., Gil Z. Marzinek, M.D.,Stanley D. Meers, M.D., Douglas

M. Middleton, M.D., Lance E. Montauk, M.D.,Charles Jay Morris, M.D., J.D.,

Peter J. Muran, M.D., Julia I. Nathan, M.D., Kurt F.Papenfus, M.D., Jay L.

Patankar, M.D., Howard A. Peth, Jr., M.D., ThomasJ. Pliura, M.D., David A.

Poggemeier, M.D., Yashbir S. Rana, M.D., Allan JayRaskin, M.D., Karin V.

Rhodes, M.D., Atwood L. Rice, III, M.D., Manuel A.Rivera, M.D., Albert J.

James Rosenthal, M.D., John W. Sanders, M.D.,Martin N. Schnell, M.D., Steven

M. Schreiber, M.D., Michael J. Shaw, M.D., RobinR. Shaw, M.D., David M.

Siwicki, M.D., Robert A. Slutsky, M.D., Robin P.Smith, D.O., Perry J.

Spavento, M.D., Leo W. Sullivan, M.D., Robert B.Sussman, M.D., Michael S.

Taplits, M.D., Richard E. Thistle, Jr., M.D., HartleyM. Thomas, M.D., Richard

Y. Thorpe III, M.D., Jane E. Tonkin, M.D., WilliamD. Torres, M.D., Allen G.

Tucker, M.D., Laurie D. Vogel, M.D., Deborah S.Weber, M.D., Anthony T. White,

M.D., Kipp A. Young, M.D. Plaintiffs-Appellants,Donald P. Ables, M.D., Carlos Alvarado, M.D.,

Daniel J. Anhalt, M.D., Robert W.Bates, M.D., George B. Beranek, M.D., Jeffrey D.

Blodgett, D.O., Michael L.Brown, M.D., Philip A. Brown, M.D., Marianne C.

Burke, M.D., Kwok Wai Chiu,M.D., David S. Clark, M.D., Daria M. Davidson,

D.O., Sylvester A. Domme, Jr.,M.D., Thomas L. Eaton, M.D., David S. Engelhardt,

M.D., Michael C. Finger,M.D., William F. Flader, M.D., Jessica A. Furer,

M.D., Kenneth J. Gallant,D.O., Virind D. Gupta, M.D., Steven D. Hanks,

M.D., John R. Harris, M.D.,Stanley E. Hartman, M.D., James W. Hayden, M.D.,

Beth E. Haynes, M.D., JosephF. Hederman, M.D., Dan Heslinga, M.D., Jeffrey P.

Howard, M.D., Gloria S.Huckeby, M.D., Raymond F. Jarris, Jr., M.D., Robert

J. Jeddeloh, M.D., Daniel



H. Kallmerten, M.D., James F. Kenny, M.D., Garry J.Kiernan, M.D., Jahangir

Koleini, M.D., G. Thomas Kraus, M.D., Joseph B.Liebman, M.D., Robert Lippa,

M.D., Etta Lovitt, M.D., Michael R. Lozano, M.D.,Paul F. Paschall, M.D.,

Deborah Porter, M.D., Frank L. Prasnal, Jr., M.D.,Peter J. Reden, M .D., Karl

Richey, M.D., David J. Ricketts-Kingfisher, M.D.,Coleen Riley, M.D., Rodrigo

Rojas, M.D., Kathleen L. Roth, M.D., Julie M.Sabatinos, M.D., Louis Shicker,

M.D., Chester J. Skiba, Jr., M.D., R. Giuseppi Slater,M.D., Lee Slavin, M.D.,

Ronald K. Sterrenberg, D.O ., Thomas S. Talkowski,M.D., Robert S. Tano, M.D.,

Bruce R. Tizes, M .D., Monique M. Van Berkum,M.D., Louis V. Verre, D.O.,

Hector J. Villanueva, M.D., Barry A. Wayne, M.D.,James A. Wichser, M.D.,

Joseph D. Zirneskie, M.D., Philip A. Zurowsky,M.D., Plaintiffs,

v.AMERICAN BOARD OF EMERGENCY

MEDICINE, Children's Hospital of Michigan,Detroit

Receiving Hospital and University Health Center,Forsyth Memorial Hospital,

Loma Linda University Medical Center, MercyCatholic Medical Center-

Misericordia Division, St. Anthony Hospital, Councilof Emergency Medicine

Residency Directors, Mercy Hospital and MedicalCenter, Methodist Hospital of

Indiana, Saint Francis Hospital & Medical Center,Defendants-Appellees,

Richard Stennes, Michael Bishop, Richard Braen,Joseph Clinton, Gerald Healy,

Bruce Janiak, Scott M. Jones, Robert Knopp, HarveyMeislin, Benson Munger,

Robert Neerhout, Douglas Rund, Judith Tintinalli,Michael Vance, Gerald Whelan,

Henry A. Thiede, M.D., Richard I. Shader, M.D.,Steven J. Davidson, M.D.,

Leonard D. Hudson, M.D., Children's Hospital (SanDiego), Kettering Medical

Center, Lincoln Medical & Mental Health Center,Lutheran General Hospital,

Medical College of Pennsylvania and Hospital, OurLady of Mercy Medical Center,

Tri-City Medical Center, Ohio State University,Oregon Health Sciences

University Hospital, University Medical Center(Tucson, Arizona), Frank A.

Disney, M.D., The Johns Hopkins Hospital, Part of

the John Hopkins HealthSystem, Ohio State University Hospital, Porter

Memorial Hospital, RiversideMethodist Hospitals, UCLA Medical Center,

University of California (Irvine)Medical Center, University of California (San Diego)

Medical Center, UniversityHospital-SUNY at Stony Brook, University Hospital

at the University of NewMexico School of Medicine, University of

Massachusetts Medical Center,Defendants,

v.United States of America, Intervenor-Plaintiff.Docket No. 03-6153(L), 03-6163(XAP), 03-6165(XAP), 03-6157(XAP), 03-6185(XAP),

03-6187(XAP), 03-6167(XAP), 03-6177(XAP).

Argued: Oct. 25, 2004.Decided: Oct. 7, 2005.

Background: Emergency medicine physiciansbrought suit against medical specialty certificationboard for emergency medicine, and hospitalsoperating residency programs in emergencymedicine, alleging that defendants conspired tounreasonably restrict competition in the market foremergency medicine physicians, in violation of theSherman and Clayton Acts. Following summaryjudgment in favor of certain hospitals found not to beoperating residency programs, 237 F.Supp.2d 336,defendants moved to dismiss and physicians movedfor class certification. The District Court, Arcara, J.,adopting the Report and Recommendation ofFoschio, United States Magistrate Judge, 269F.Supp.2d 159, dismissed action, and plaintiffsappealed.

Holdings: The Court of Appeals, Raggi, CircuitJudge, held that: (1) Clayton Act's worldwide service of processprovision applies only in cases in which its venueprovision is satisfied; (2) certification board did not "transact business" inthe Western District of New York for purposes of theClayton Act's venue provision; (3) venue was not proper under the general federalvenue provision; and (4) physicians did not have antitrust standing. Affirmed.

Katzmann, Circuit Judge, filed opinion concurring inpart and dissenting in part.

[1] Federal Courts 776

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170Bk776 Most Cited CasesCourt of Appeals reviews de novo the district court'slegal conclusions regarding personal jurisdiction.

[2] Monopolies 28(3)265k28(3) Most Cited CasesClayton Act's worldwide service of process provisionapplies, and therefore establishes personaljurisdiction, only in cases in which its venueprovision is satisfied. Clayton Act, § 12, 15 U.S.C.A.§ 22.

[3] Statutes 188361k188 Most Cited Cases


[3] Statutes 208361k208 Most Cited CasesPlainness or ambiguity of statutory language isdetermined by reference to the language itself, thespecific context in which that language is used, andthe broader context of the statute as a whole.



[4] Statutes 217.4361k217.4 Most Cited CasesIf the meaning of a statute is plain, courts inquire nofurther; only if courts discern ambiguity do theyresort first to canons of statutory construction, and, ifthe meaning remains ambiguous, to legislativehistory.

[5] Federal Courts 71170Bk71 Most Cited CasesAnalysis of special venue provisions must be specificto the statute, because Congress's intent may bepermissive in some circumstances and restrictive inothers.

[6] Monopolies 28(3)265k28(3) Most Cited CasesIf the general venue statute is the basis for venue inan antitrust action, an antitrust plaintiff cannotemploy the Clayton Act's worldwide service ofprocess provision to secure personal jurisdiction; in

such circumstances, a plaintiff must look to otherservice of process provisions, notably those specifiedin the Federal Rules or incorporated therein fromstate law to satisfy this requirement. Clayton Act, §12, 15 U.S.C.A. § 22; 28 U.S.C.A. § 1391; Fed.Rules Civ.Proc.Rule 4, 28U.S.C.A.

[7] Monopolies 28(3)265k28(3) Most Cited CasesClayton Act's worldwide service of process provisiondid not permit district court to exercise personaljurisdiction over emergency medical careorganization and out-of-state hospitals in antitrustaction brought by emergency medicine physicians,where the organization and the hospitals did notconduct business in the district. Clayton Act, § 12,15 U.S.C.A. § 22.

[8] Monopolies 28(3)265k28(3) Most Cited CasesTechnical criteria such as "mere solicitation" or"solicitation plus" are not determinative of whether acorporate defendant "transacts business" in a districtfor purposes of the Clayton Act's venue provision;rather, the propriety of venue turns on the nature ofthe corporate defendant's business. Clayton Act, §12, 15 U.S.C.A. § 22.

[9] Monopolies 28(3)265k28(3) Most Cited CasesMedical specialty certification board did not "transactbusiness" in the Western District of New York forpurposes of the Clayton Act's venue provision;although board certified emergency medicinephysicians in New York, received revenue fromapplication fees of physicians in New York, andmailed a copy of its application form to physician inthe district, it neither developed its certificationstandards nor administered its certificationexaminations in the district, did not own or lease anyreal estate in the district, and did not maintain anoffice, telephone, bank account, or mailing addressthere. Clayton Act, § 12, 15 U.S.C.A. § 22.

[10] Monopolies 28(3)265k28(3) Most Cited CasesProper venue for antitrust action against medicalspecialty certification board was not in WesternDistrict of New York under provision of the generalfederal venue statute making venue proper in districtin which a "substantial part" of events or omissionsgiving rise to the underlying claim occurred; vastmajority of acts underlying the claims occurred

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outside of New York, and board's transmittal into thedistrict of a half-dozen letters rejecting applicationsto sit for its certification examination outside NewYork was only insignificant part of events oromissions giving rise to the claims. 28 U.S.C.A. §1391(b)(2).

[11] Federal Courts 87.5170Bk87.5 Most Cited CasesProvision of the general federal venue statute makingvenue proper in district in which substantial part ofthe events or omissions giving rise to underlyingclaim occurred does not restrict venue to the districtin which the "most substantial" events or omissionsgiving rise to a claim occurred. 28 U.S.C.A. §1391(b)(2).

[12] Federal Courts 87.5170Bk87.5 Most Cited CasesProvision of the general federal venue statute makingvenue proper in district in which substantial part ofthe events or omissions giving rise to underlyingclaim occurred contemplates that venue can beappropriate in more than one district and permitsvenue in multiple judicial districts as long as asubstantial part of the underlying events took place inthose districts. 28 U.S.C.A. § 1391(b)(2).

[13] Federal Courts 87.5170Bk87.5 Most Cited CasesWhen a plaintiff relies on provision of the generalfederal venue statute making venue proper in thedistrict in which a "substantial part" of the events oromissions giving rise to underlying claim occurred todefeat a venue challenge, a two-part inquiry isappropriate: first, a court should identify the nature ofthe claims and the acts or omissions that the plaintiffalleges give rise to those claims; second, the courtshould determine whether a substantial part of thoseacts or omissions occurred in the district where suitwas filed, that is, whether significant events oromissions material to those claims have occurred inthe district in question. 28 U.S.C.A. § 1391(b)(2).

[14] Federal Courts 87.5170Bk87.5 Most Cited Cases"Substantiality" for purposes of provision of thegeneral federal venue statute making venue proper inthe district in which a "substantial part" of the eventsor omissions giving rise to underlying claim occurredis more a qualitative than a quantitative inquiry,determined by assessing the overall nature of theplaintiff's claims and the nature of the specific eventsor omissions in the forum, and not by simply adding

up the number of contacts. 28 U.S.C.A. §1391(b)(2).

[15] Federal Courts 87.5170Bk87.5 Most Cited CasesWhen material acts or omissions within the forumbear a close nexus to the claims, they are properlydeemed "significant" and, thus, substantial, but whena close nexus is lacking, so too is the substantialitynecessary to support venue under provision of thegeneral federal venue statute making venue proper inthe district in which a "substantial part" of the eventsor omissions giving rise to underlying claimoccurred. 28 U.S.C.A. § 1391(b)(2).

[16] Monopolies 28(3)265k28(3) Most Cited CasesProper venue for antitrust action against medicalspecialty certification board was not in WesternDistrict of New York under provision of the generalfederal venue statute making venue proper in judicialdistrict in which any defendant may be found, if thereis no district in which the action may otherwise bebrought; although individual defendant resided in thedistrict, substantial part of alleged events giving riseto the plaintiffs' claims took place in Western Districtof Michigan, where the board was located, makingvenue appropriate there. 28 U.S.C.A. § 1391(b)(3).

[17] Federal Courts 103170Bk103 Most Cited CasesCourts enjoy considerable discretion in decidingwhether to transfer a case in the interest of justice. 28U.S.C.A. § 1406(a).

[18] Federal Courts 104170Bk104 Most Cited CasesCourt's limited jurisdiction to decide whether totransfer or dismiss a case over which it lacksjurisdiction includes a power of limited review of themerits. 28 U.S.C.A. § 1406(a).

[19] Federal Courts 97170Bk97 Most Cited Cases

[19] Federal Courts 104170Bk104 Most Cited CasesIf "a peek at the merits," reveals that the case is a sureloser in the court that has jurisdiction in theconventional sense over it, then the court in which itis initially filed but that does not have jurisdictionshould dismiss the case rather than waste the time ofanother court. 28 U.S.C.A. § 1406(a).



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[20] Monopolies 28(1.6)265k28(1.6) Most Cited CasesWhile the United States is authorized to sue anyoneviolating the federal antitrust laws, a private plaintiffmust demonstrate standing.

[21] Monopolies 28(1.4)265k28(1.4) Most Cited Cases

[21] Monopolies 28(1.6)265k28(1.6) Most Cited CasesFour factors that are generally relevant todetermining antitrust standing: an injury in fact (1) toplaintiffs' "business or property"; (2) that is notremote from or duplicative of that sustained by amore directly injured party; (3) that qualifies as an"antitrust injury"; and (4) that translates intoreasonably quantifiable damages. Clayton Act, § 4,15 U.S.C.A. § 15.


[22] Monopolies 28(1.6)265k28(1.6) Most Cited CasesEmergency medicine physicians did not sufferantitrust injury when medical specialty certificationboard denied them opportunity to take certificationexamination because they had not completed a formalresidency program in emergency medicine, and thusdid not have standing to pursue antitrust actionagainst the board; physicians claimed that theirsalaries were lower because they were not certified,but sought only to join rather than end the exclusivecertification arrangement in order to acquire a shareof the super-competitive profits. Clayton Act, § 4, 15U.S.C.A. § 15.

[23] Monopolies 28(1.4)265k28(1.4) Most Cited CasesWhether the relief they seek is legal or equitable,plaintiffs in antitrust action must demonstrate thatthey themselves have sustained an "antitrust injury,"which is to say injury of the type the antitrust lawswere intended to prevent and that flows from thatwhich makes defendants' acts unlawful. Clayton Act,§ 4, 15 U.S.C.A. § 15.

[24] Monopolies 28(1.6)265k28(1.6) Most Cited CasesEven if emergency medicine physicians sufferedantitrust injury when medical specialty certificationboard denied them opportunity to take certificationexamination because they had not completed a formal

residency program in emergency medicine, they werenot efficient enforcers of the antitrust laws, and thus did not have standing to pursue antitrustaction against the board; physicians had no naturaleconomic self-interest in reducing the cost ofemergency medical care to consumers, while privateand government health care insurers had a direct andundivided economic interest in obtaining lower costs.Clayton Act, § 4, 15 U.S.C.A. § 15.


[25] Monopolies 28(1.6)265k28(1.6) Most Cited CasesShowing of antitrust injury is necessary, but notalways sufficient, to establish antitrust standing.Clayton Act, § 4, 15 U.S.C.A. § 15.

[26] Monopolies 28(1.6)265k28(1.6) Most Cited CasesOther reasons may sometimes indicate that a partywho states an antitrust injury is nevertheless not aproper antitrust plaintiff; these other reasons mayprevent the plaintiff from being an efficient enforcerof the antitrust laws. Clayton Act, § 4, 15 U.S.C.A. §15.

[27] Monopolies 28(1.6)265k28(1.6) Most Cited CasesAmong the other factors other than antitrust injurygenerally considered relevant to standing are (1)directness or indirectness of the asserted injury; (2)existence of an identifiable class of persons whoseself-interest would normally motivate them tovindicate the public interest in antitrust enforcement;(3) the speculativeness of the alleged injury; and (4)the difficulty of identifying damages andapportioning them among direct and indirect victimsso as to avoid duplicative recoveries. Clayton Act, §4, 15 U.S.C.A. § 15. Appeal from a judgment entered in the United StatesDistrict Court for the Western District of New York(Richard J. Arcara, Judge; Leslie G. Foschio,Magistrate Judge) dismissing plaintiffs' complaint.Plaintiffs assert that the district court erred inconcluding that they lacked antitrust standing topursue Sherman Act challenges to practices andprocedures that rendered them ineligible for boardcertification in emergency medicine by the AmericanBoard of Emergency Medicine. Defendants submitthat the district court's ruling as to antitrust standingwas correct and that dismissal was further warrantedfor lack of personal jurisdiction and venue.

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Affirmed. Judge Katzmann concurs in part anddissents in part in a separate opinion.

Jeremy R. Kasha, Proskauer Rose LLP, New York,New York (Colin A. Underwood, Proskauer RoseLLP, New York, New York; Ralph L. Halpern,Mitchell J. Banas, Jr., Jaeckle Fleischmann & MugelLLP, Buffalo, New York, on the brief), for Plaintiff-Appellant Gregory F. Daniel, M.D., on behalf ofhimself and others similarly situated.

Jeffrey D. Ubersax, Jones Day, Cleveland, Ohio(Robert H. Rawson, Jr., Elizabeth A. Grove, on thebrief), for Defendant-Appellee American Board ofEmergency Medicine.

Jonathan A. Damon, LeBoeuf, Lamb, Greene &MacRae, LLP, New York, New York, forDefendants-Appellees Children's Hospital ofMichigan, Detroit Receiving Hospital and UniversityHealth Center, Loma Linda Medical Center and St.Anthony Hospital-Central.

Robert E. Glanville, Phillips Lytle, LLP, Buffalo,New York, for Defendant-Appellee Council ofEmergency Medicine Residency Directors.

Douglass G. Hewitt, Michael Best & Friedrich, LLP,Chicago, Illinois, for Defendant-Appellee MethodistHospital of Indiana.

Samuel W. Silver, Schnader Harrison Segal & LewisLLP, Philadelphia, Pennsylvania, for Defendant-Appellee Mercy Catholic Medical Center-Misericordia Division.

Nancy G. Lischer, Hinshaw & Culbertson, Chicago,Illinois, for Defendant-Appellee St. Francis Hospital& Medical Center.

Denise M. Gunter, Nelson, Mullins, Riley &Scarborough, Winston-Salem, North Carolina, forDefendant-Appellee Forsyth Memorial Hospital.

Before: McLAUGHLIN, KATZMANN, andRAGGI, Circuit Judges.

REENA RAGGI, Circuit Judge.

*1 Plaintiffs-appellants are licensed physicians whopractice or had practiced emergency medicinethroughout the United States although they did notcomplete formal residency training programs in thatspecialty. They allege that the defendants, the

American Board of Emergency Medicine ("ABEM"),the Council of Emergency Medicine ResidencyDirectors ("CORD"), twenty-eight named hospitals,and various individuals now or previously associatedwith these institutions and organizations, colluded torestrain trade in connection with the practice ofemergency medicine in violation of Section 1 of theSherman Act, see 15 U.S.C. § 1, and to monopolizeor attempt to monopolize the market for ABEM-certified and -eligible doctors in violation of Section2 of the Sherman Act, see id. § 2. Plaintiffsspecifically complain that the defendants manipulatedthe residency training requirement for ABEMcertification to limit the number of doctors certifiedin emergency medicine in order to guarantee super-competitive compensation for such doctors and todeny certification and its attendant compensationbenefits to members of the plaintiff class.

Plaintiffs now appeal a judgment of the UnitedStates District Court for the Western District of NewYork (Richard J. Arcara, Judge; Leslie G. Foschio,Magistrate Judge ), entered on June 20, 2003,dismissing their Second Amended Complaint for lackof antitrust standing. See Daniel v. American Bd. ofEmergency Med., 269 F.Supp.2d 159(W.D.N.Y.2003). Defendants insist that the case wasproperly dismissed not only for lack of antitruststanding but also for lack of personal jurisdiction andvenue in the Western District of New York. We agreewith the defendants that the lack of personaljurisdiction and venue supports dismissal. While sucha conclusion might permit us to order transfer of thiscase to a district where personal jurisdiction andvenue properly obtain, we conclude that such atransfer is not in the interests of justice in this casebecause the plaintiffs lack antitrust standing to pursuetheir claims. Accordingly, we affirm the judgment ofthe district court dismissing the plaintiffs' complaintin its entirety.

I. Background

A. The Parties

As background to our discussion of the plaintiffs'antitrust claims, we briefly outline the roles played bythe parties in the delivery of emergency medical care.

1. The Defendants-Appellees

a. American Board of Emergency Medicine

Defendant ABEM is a Michigan not-for-profitcorporation that was established in 1976 to certify



























physicians in emergency medicine. Its offices,records, and staff are located in East Lansing,Michigan, and its day-to-day activities take placethere.

Like twenty-three other medical certification boardsrepresenting different disciplines of medicine andsurgery, ABEM is a member of the American Boardof Medical Specialties ("ABMS"), an umbrellaorganization formed to assist the member specialtyboards in fulfilling their missions. ABEM's professedmission, as stated in its by-laws, is to "improve thequality of emergency medical care," to "establish andmaintain high standards of excellence in the specialtyof emergency medicine," to "improve medicaleducation and facilities for training emergencyphysicians," to "administer evaluations of specialistsin emergency medicine applying for certification andrecertification," to "grant and issue qualifiedphysicians certificates or other recognition of specialknowledge and skills in emergency medicine and ...suspend or revoke same," and to "serve the public,physicians, hospitals and medical schools byfurnishing lists of those Diplomates certified by"ABEM. ABEM By-Laws, art. II.

*2 ABEM is not a membership organization. Rather,like other ABMS boards, ABEM establisheseducational criteria for its medical specialty,administers an examination, and certifies those whopass as ABEM "Diplomates." Notably, for purposesof this action, ABEM has never administered itscertification examination in New York State.

ABEM certification is not a license required topractice emergency medicine in any state. Nor isABEM the only board that certifies physicians inemergency medicine. The American Academy ofEmergency Medicine and the American Board ofOsteopathic Medicine also award certifications inemergency medicine based on their own standards.Nevertheless, plaintiffs assert that some hospitalsrestrict their hiring to ABEM-certified physicians,while others base compensation and promotiondecisions on ABEM certification. Plaintiffs submitthat alternative board certifications do not affordphysicians the same prestige or opportunities for highremuneration as ABEM certification, a result ofdefendants' purposeful efforts to make ABEMcertification the "sine qua non of the practice ofemergency medicine." Appellants' Br. at 7.

In 1976, when ABEM initially sought approval as aspecialty board from ABMS, only thirty emergencymedicine residency programs existed in the United

States. To accelerate recognition of the specialty,ABEM proposed two initial eligibility tracks fordoctors seeking to take its certification examination:(1) the practice track, which required applicants tohave completed 7,000 hours and 60 months ofpracticing or teaching emergency medicine; and (2)the residency track, which required applicants to havecompleted an approved residency training program.[FN1] From the start, ABEM expressly stated that thepractice track was an interim eligibility alternative toremain available only for eight years following thefirst administration of ABEM's certificationexamination in 1980. [FN2] It was expected that, inthat time frame, additional residency trainingprograms would be developed and accredited,making it practical to require residency training inemergency medicine, rather than practicalexperience, as the eligibility requirement for thecertification examination. [FN3]

As planned, ABEM closed its practice track on June30, 1988. Since that date, only physicians who havecompleted a residency program in emergencymedicine have been eligible to take the ABEMcertification exam. A notable exception operatedbetween 1990 and 1995 when a number ofphysicians, already board certified in internalmedicine after completing a residency program inthat specialty, were permitted to take the ABEMcertification examination without completing anotherresidency program in emergency medicine. Plaintiffsassert that ABEM's recognition of this exception wasitself part of the defendants' conspiratorial scheme.

b. Council of Emergency Medicine ResidencyDirectors

Defendant CORD, also a Michigan not-for-profitcorporation, was established in 1990 as a nationalassociation to facilitate communication among thedirectors of emergency medicine residency trainingprograms around the country. CORD's statedpurposes include improving the quality of emergencymedical care, establishing and maintaining highstandards of excellence in emergency medicineprograms, and improving the quality of instruction bythe exchange of ideas among the faculties of suchprograms. Plaintiffs assert that CORD seeks tomaintain formal residency training as the exclusiveprerequisite to taking the ABEM certification exam.

c. The Hospital Defendants

*3 Twenty-eight hospitals were named as defendantsin plaintiffs' Second Amended Complaint. To the



extent these hospitals hire ABEM -certified doctorsto perform emergency medical services, they may beviewed as consumers who, plaintiffs submit, pay apremium for the ABEM credential. To the extentthese hospital defendants also operate residencytraining programs, they may be viewed as suppliersof the only doctors presently eligible to take theABEM certification exam. Plaintiffs submit that thehospitals, like CORD, thus have an interest inperpetuating formal residency training as theessential prerequisite for the ABEM certificationexam.

Of the twenty-eight hospitals originally sued in thiscase, only nine remain as appellees: Children'sHospital of Michigan, Detroit Receiving Hospital andUniversity Health Center, Forsyth MemorialHospital, Loma Linda University Medical Center,Mercy Catholic Medical Center-MisericordiaDivision, St. Anthony Hospital, Mercy Hospital andMedical Center, Methodist Hospital of Indiana, andSaint Francis Hospital and Medical Center (the"hospital defendants"). [FN4] Each of thesedefendants is incorporated in a state other than NewYork and maintains its principal place of businessoutside New York. [FN5]

2. The Plaintiffs-Appellants

Plaintiff-appellant Dr. Gregory F. Daniel, the other175 named plaintiffs, and the approximately 14,000members of the proposed plaintiff class arephysicians who practice or have practiced emergencymedicine. They allege that ABEM has refused orwould refuse to allow plaintiffs to take itscertification examination because they have notcompleted residency training programs in emergencymedicine or they failed to meet the practice trackrequirements before ABEM closed that option in1988. [FN6] Plaintiffs claim that they could satisfythe practice eligibility alternative at present, ifallowed to do so.

To use Dr. Daniel as an example, he applied to takethe ABEM certification test in 1988, before thepractice track closed. ABEM rejected his applicationbecause he had not completed a residency trainingprogram in emergency medicine and he then lackedthe required 60 months' experience. Apparently, Dr.Daniel had practiced emergency medicine for therequired 7,000 hours, but he had acquired thatexperience in less than five years. By the time Dr.Daniel completed 60 months' work in emergencymedicine, ABEM had closed the practice trackalternative to take its certification examination. Dr.

Daniel nonetheless presently holds an alternativecertification in emergency medicine from theAmerican Academy of Emergency Medicine. He hasheld an attending physician position in the emergencymedicine department of Sisters of Charity Hospital inBuffalo, New York, and a staff physician position inemergency medicine at St. Joseph's Medical CenterHospital in Cheektowaga, New York. Certain othernamed plaintiffs have similarly qualified foralternative certifications in emergency medicine andhave held positions in hospital emergency medicinedepartments during the pendency of this action.

B. The Alleged Antitrust Conspiracy

*4 Plaintiffs allege that ABEM, CORD, numerousnamed and unnamed hospitals, and variousindividuals associated with these organizations andinstitutions, by closing the ABEM practice trackwhile placing a premium on ABEM certification,have unlawfully restrained trade and monopolized themarket for ABEM -certified and -eligible physicians,injuring competition generally and plaintiffsspecifically. [FN7]

With respect to the effect on competition, plaintiffsallege that defendants conspired to limit the pool ofcandidates eligible to sit for the ABEM certificationexamination to doctors who had completed formalresidency programs (with the limited exception from1990 to 1995 for doctors already certified in internalmedicine), deliberately excluding physicians like theplaintiffs who, despite their lack of residencytraining, possess years of emergency medicineexperience. They submit that, as a result of thisscheme, the defendants have created an artificialshortage of ABEM -certified and - eligiblephysicians, thereby allowing doctors possessing thiscredential to demand super-competitiveremuneration.

With specific reference to themselves, plaintiffsassert that the conspiracy has unreasonably preventedthem from competing in the relevant market becausethe hospital defendants and "the majority of desirableand or/better-paying emergency departments, nowrequire, or will soon require," ABEM certification asa prerequisite to employment or professionaladvancement. Second Am. Compl. ¶ 82. As a result,plaintiffs submit that they receive "substantially lessremuneration than ABEM certified physicians" andthey have "suffered and continue[ ] to suffersubstantial losses of income for that period duringwhich they would have been eligible to take theABEM certification examination and compete for



higher salaries." Id. ¶ 104. Plaintiffs further assertthat, as a result of the conspiracy, they have been"denied emergency medicine positions at hospitals,trauma centers, and academic centers throughout theUnited States solely by reason of not being ABEMcertified or ABEM eligible"; "forced to compete foran ever-decreasing pool of positions available to non-ABEM certified emergency physicians"; andprecluded from obtaining positions "in moredesirable locations." Id. ¶ ¶ 104-107. Finally,plaintiffs allege that their lack of ABEM certificationhas resulted in members of the class beingdischarged, demoted, and relegated to undesirablework assignments, "all with concomitant losses ofremuneration." Id. ¶ ¶ 108-09. [FN8]

C. The Procedural Background

The history of proceedings in this case is extensiveand complex. We here reference only those partsrelevant to this appeal.

1. The Original and First Amended Complaints

When this action commenced on September 25,1990, no antitrust violation was pleaded. Instead, asingle plaintiff, Dr. Daniel, sued a single defendant,ABEM, in New York State court for allegedviolations of the New York Human Rights Law, seeN.Y. Exec. Law § § 290-301, as well as the DueProcess and Equal Protection Clauses of theConstitution, see U.S. Const., amend. XIV, as a resultof ABEM's 1988 refusal to allow Daniel to sit for itscertification examination. [FN9] ABEM removed theaction to federal court and moved to dismiss thecomplaint, prompting Daniel to amend his pleadingto substitute federal antitrust claims for those raisedunder the Constitution and to add ABEM's boardmembers as individual defendants. See First Am.Compl. ¶ ¶ 28, 85- 100.

*5 On April 5, 1991, ABEM and its board membersmoved to dismiss the first amended pleading. Thematter was referred to Magistrate Judge Leslie G.Foschio who, on February 2, 1992, issued the first ofwhat would be many carefully reasoned, detailedreports in this case. Magistrate Judge Foschiorecommended that the district court grant dismissalfor lack of personal jurisdiction as to all individualdefendants except Dr. Henry A. Thiede, a New Yorkresident who had formerly served as an ABEM boardmember and director. He further recommended thatthe defendants' motion to dismiss for failure to statean antitrust claim be denied. The district courtadopted these recommendations on August 20, 1992.

See Daniel v. American Bd. of Emergency Med., 802F.Supp. 912, 918 (W.D.N.Y.1992) (incorporatingmagistrate judge's report).

2. The Second Amended Complaint

Two years later, on January 13, 1994, Dr. Danielamended his complaint a second time, adding 175physicians as named plaintiffs and CORD, twenty-eight hospitals, and Frank A. Disney, a formerABEM director who resided in the district, as nameddefendants. The named plaintiffs sought to representa class consisting of 14,000 physicians who"currently practice or have practiced emergencymedicine in the United States." Second Am. Compl. ¶23. The original Human Rights Law claim wasdeleted from the Second Amended Complaint, whichnow alleged only antitrust causes of action. ThisSecond Amended Complaint is the operativepleading for purposes of this appeal.

a. The Initial Motion to Dismiss the Second AmendedComplaint

In May 1994, after preliminary discovery limited toissues of jurisdiction and immunity, the defendantsmoved to dismiss the Second Amended Complaintor, alternatively, for summary judgment, on variousgrounds including the statute of limitations, failure tostate a claim, certain immunity defenses, lack ofpersonal jurisdiction, and improper venue. Afterreceiving two reports from Magistrate Judge Foschiorecommending against dismissal, the district court soruled on November 19, 1997. See Daniel v. AmericanBd. of Emergency Med., 988 F.Supp. 112, 117(W.D.N.Y.1997) (adopting recommendation to denydefendants' motion to dismiss on grounds of statuteof limitations and failure to state a claim andincorporating magistrate judge's report); Daniel v.American Bd. of Emergency Med., 988 F.Supp. 127,143-45 (W.D.N.Y.1997) (adopting recommendationto deny defendants' motion to dismiss for lack ofpersonal jurisdiction and improper venue andincorporating magistrate judge's report). [FN10]

With respect to personal jurisdiction, an argumentthat had been raised in support of dismissal by alldefendants-appellees except ABEM, the district courtconcluded that New York law did not provide forpersonal jurisdiction over CORD and the hospitaldefendants but that Section 12 of the Clayton Act did.See id. at 143-44, 197-205. [FN11] As for thedefendants' venue challenge, the district courtconcluded that venue was proper in the WesternDistrict of New York as to ABEM under Section 12

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of the Clayton Act and as to all defendants under thegeneral federal venue statute, 28 U.S.C. § 1391(b).See id. at 144, 256-63, 271-76. On October 9, 2002,CORD, Mercy Hospital, and Methodist Hospital,joined by other defendants, moved the district courtto certify for interlocutory appeal its Section 12rulings as to personal jurisdiction and venue, but thedistrict court never ruled on this motion.

b. The Second Motion to Dismiss the SecondAmended Complaint

*6 The parties proceeded to a second phase ofdiscovery limited to issues related to classcertification. When, upon completion of thisdiscovery, plaintiffs moved for class certification,defendants crossed-moved once again for dismissal,this time asserting plaintiffs' lack of "antitruststanding." Once again, the motions were referred toMagistrate Judge Foschio, whose reportrecommending dismissal was adopted by the districtcourt on June 30, 2003. See Daniel v. American Bd.of Emergency Med., 269 F.Supp.2d 159, 163-64(W.D.N.Y.2003) (granting dismissal andincorporating magistrate judge's report). Applying atwo-part analysis to the antitrust standing inquiry, thedistrict court concluded that plaintiffs (1) failed toallege an "antitrust injury" because they werethemselves seeking to charge super-competitive feesfor their services; and (2) were not "efficientenforcers" of the antitrust laws because they soughtto join, not to disband, the complained-of cartel inorder to share in the "higher levels of compensationcreated by the charged conspiracy." See id. at 163-64.This appeal followed.

II. Discussion

A. Section 12 of the Clayton Act Does Not Permitthe Exercise of Personal Jurisdiction Over CORDand the Hospital Defendants in the Western Districtof New York

With the exception of ABEM, all defendants beforeus on this appeal had moved in the district court fordismissal of this action for lack of personaljurisdiction. [FN12] The district court rejected themotion on the merits, ruling that, although New Yorklaw did not afford personal jurisdiction over thesedefendants, see N.Y.C.P.L.R. § § 301-302, Section12 of the Clayton Act did. See Daniel v. AmericanBd. of Emergency Med., 988 F.Supp. at 197-255.Plaintiffs do not dispute the district court's conclusionabout New York law, but defendants-appellees (againwith the exception of ABEM) do challenge the

district court's construction of Clayton Act Section 12to support personal jurisdiction in this case.Accordingly, these "jurisdiction defendants" submitthat lack of personal jurisdiction affords analternative ground for affirmance of the judgment ofdismissal in this case. See. e.g., ACEquip Ltd. v.American Eng'g Corp., 315 F.3d 151, 155 (2dCir.2003) ("Our court may, of course, affirm thedistrict court's judgment on any ground appearing inthe record, even if the ground is different from theone relied on by the district court."). [FN13]

[1] We review de novo the district court's legalconclusions regarding personal jurisdiction, seeSunward Elecs., Inc. v. McDonald, 362 F.3d 17, 22(2d Cir.2004); U.S. Titan, Inc. v. Guangzhou ZhenHua Shipping Co., 241 F.3d 135, 151 (2d Cir.2001),and we conclude that Section 12 of the Clayton Actdid not confer personal jurisdiction over thejurisdiction defendants in this case.

1. The Worldwide Service of Process Provision ofClayton Act Section 12 Can Supply PersonalJurisdiction Only in Cases Where Venue IsEstablished Under Section 12

a. Section 12

*7 Section 12 of the Clayton Act states: Any suit, action, or proceeding under the antitrustlaws against a corporation may be brought not onlyin the judicial district whereof it is an inhabitant,but also in any district wherein it may be found ortransacts business; and all process in such casesmay be served in the district of which it is aninhabitant, or wherever it may be found.

15 U.S.C. § 22. As this language makes plain, thesection consists of two parts. The part before thesemicolon addresses venue, permitting antitrustactions against corporations to be maintained "notonly in the judicial district whereof [the corporatedefendant] is an inhabitant, but also in any districtwherein it may be found or transacts business." Thepart after the semicolon provides for worldwideservice of process and, therefore, the exercise ofpersonal jurisdiction "in such cases." In this case, it isundisputed that the venue provision of Section 12does not apply to any of the jurisdiction defendants.[FN14] Thus, in reviewing the district court'sexercise of personal jurisdiction over thesedefendants, we must decide whether service ofprocess (and personal jurisdiction) is available underSection 12 only in cases satisfying the section'sspecific venue provision or regardless how venue isestablished.










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The answer turns on construction of the introductoryphrase "in such cases" in the process provision,which defines the scope of its applicability. Plainly,the phrase refers back to the venue provision; thequestion is whether it refers back in whole or in part.If "in such cases" refers back to the phrase "[a]nysuit, action, or proceeding under the antitrust laws,"then worldwide process would be available in everyantitrust case, without regard to how venue wasestablished. On the other hand, if "in such cases"refers only to those antitrust actions in which venue isestablished pursuant to Section 12, then theworldwide process provision would be of no help inestablishing personal jurisdiction in cases wherevenue depended on other statutes.

b. The Circuit Split on the Relationship BetweenVenue and Service of Process in Section 12

Our sister circuits are split over the properinterpretation of the venue and process provisions ofSection 12. The Third and Ninth Circuits hold thatSection 12's service of process provision is"independent of and does not require satisfaction of"the section's venue provision. In re Auto. RefinishingPaint Antitrust Litig., 358 F.3d 288, 297 (3dCir.2004); see Action Embroidery Corp. v. AtlanticEmbroidery, Inc., 368 F.3d 1174, 1179- 80 (9thCir.2004) (holding that, "under Section 12 of theClayton Act, the existence of personal jurisdictionover an antitrust defendant does not depend uponthere being proper venue in that court"); Go-Video,Inc. v. Akai Elec. Co., 885 F.2d 1406, 1408-13 (9thCir.1989) (rejecting argument that antitrust plaintiffmust satisfy Section 12's venue provision to availitself of its worldwide service of processauthorization). The District of Columbia Circuit,however, holds that "[t]he language of the statute isplain, and its meaning seems clear: ... [I]nvocation ofthe nationwide service clause rests on satisfying thevenue provision." GTE New Media Servs. Inc. v.BellSouth Corp., 199 F.3d 1343, 1351(D.C.Cir.2000). We have acknowledged this split,without ourselves deciding the issue. See In reMagnetic Audiotape Antitrust Litig., 334 F.3d 204,207 (2d Cir.2003).

*8 [2] Not insignificantly, however, this court wasamong the first to consider the relationship betweenthe venue and service provisions of Section 12 of theClayton Act. Over forty years ago, in Goldlawr, Inc.v. Heiman, we noted that the two parts of Section 12were so closely related that "the extraterritorialservice privilege is given only when the other

requirements [pertaining to venue] are satisfied," 288F.2d 579, 581 (2d Cir.1961) (emphasis added), rev'don other grounds, 369 U.S. 463, 82 S.Ct. 913, 8L.Ed.2d 39 (1962). Because Goldlawr 's observationwas not necessary to the court's ruling, it constitutesdictum that does not specifically control this case.Nevertheless, we recognize that the influence ofGoldlawr 's dictum has been significant. When theD.C. Circuit construed the service of processprovision of Section 12 to depend on satisfaction ofthe section's venue provision, it specifically citedGoldlawr and emphasized that, "[o]n the question ofthe meaning of Section 12, we align ourselves withthe position taken by the Second Circuit." GTE NewMedia Servs. Inc. v. BellSouth Corp., 199 F.3d at1351. Today, we bring the process full circle, joiningthe D.C. Circuit in concluding that the plain languageof Section 12 indicates that its service of processprovision applies (and, therefore, establishes personaljurisdiction) only in cases in which its venueprovision is satisfied.

c. Construing the Scope of Section 12's Service ofProcess Provision

(1) The Statutory Language

[3][4] In reaching this conclusion, we begin with thetext of Section 12 to determine whether its languageis clear or ambiguous. See, e.g., Robinson v. Shell OilCo., 519 U.S. 337, 340, 117 S.Ct. 843, 136 L.Ed.2d808 (1997); accord Freier v. Westinghouse Elec.Corp., 303 F.3d 176, 197 (2d Cir.2002). "Theplainness or ambiguity of statutory language isdetermined by reference to the language itself, thespecific context in which that language is used, andthe broader context of the statute as a whole."Robinson v. Shell Oil Co., 519 U.S. at 341. If themeaning is plain, we inquire no further. Id. ("Ourinquiry must cease if the statutory language isunambiguous and the statutory scheme is coherentand consistent." (quotation marks and citationomitted)); Freier v. Westinghouse Elec. Corp., 303F.3d at 197 (and cases cited therein). Only if wediscern ambiguity do we resort first to canons ofstatutory construction, see United States v. Dauray,215 F.3d 257, 262 (2d Cir.2000), and, if the meaningremains ambiguous, to legislative history, id. at 264.

Applying these principles to this case, we concludefrom the language and context of "in such cases" inthe service of process provision of Section 12, thatthe phrase plainly refers to those cases qualifying forvenue in the immediately preceding clause. Thecommon meaning of the word "such" is "having a
















































quality already or just specified"; "of this or thatcharacter, quality, or extent: of the sort or degreepreviously indicated or implied"; or "previouslycharacterized or described: aforementioned."Webster's Third New International Dictionary(Unabridged) 2283 (1986); see generally Morse v.Republican Party of Va., 517 U.S. 186, 254, 116S.Ct. 1186, 134 L.Ed.2d 347 (1996) ("When words ina statute are not otherwise defined, it is fundamentalthat they will be interpreted as taking their ordinary,contemporary, common meaning." (quotation marksand citation omitted)). The "quality" of the casesspecified in the provision of Section 12 preceding thesemicolon is not simply that they are antitrust cases,or even antitrust cases against corporations; it is thatthey are antitrust cases against corporations broughtin the particular venues approved by Section 12:where the defendant is an "inhabitant," where it "maybe found," or where it "transacts business." 15 U.S.C.§ 22. It is "in such cases," i.e., such venued cases,that Section 12 makes worldwide service of processavailable. We cannot make this point more clearlythan Judge Moore did, writing for the panel inGoldlawr:

*9 Section 12 of the Clayton Act specifies wheresuit against a corporation under the antitrust lawsmay be brought, namely, in a district where it is aninhabitant and also where "it may be found ortransacts business." Conversely, it should followthat if a corporation is not an inhabitant of, is notfound in, and does not transact business in, thedistrict, suit may not be so brought. By statutorygrant if suit is brought as prescribed in this section"all process in such cases may be served in thedistrict of which it (the corporation) is aninhabitant, or wherever it may be found." Thus, "insuch cases," Congress has seen fit to enlarge thelimits of the otherwise restricted territorial areas ofprocess. In other words, the extraterritorial serviceprivilege is given only when the other requirementsare satisfied.

Goldlawr, Inc. v. Heiman, 288 F.2d at 581 (footnoteand citation omitted) (emphasis added). Indeed,Goldlawr 's construction of Section 12 finds somesupport in an early Supreme Court discussion of thestatute. In Eastman Kodak Co. of New York v. SouthPhoto Materials Co., 273 U.S. 359, 47 S.Ct. 400, 71L.Ed. 684 (1927), the Court observed:

[A]s applied to suits against corporations forinjuries sustained by violations of the Anti-TrustAct, [Section 12's] necessary effect was to enlargethe local jurisdiction of the district courts so as toestablish the venue of such a suit not only, astheretofore, in a district in which the corporationresides or is "found," but also in any district in

which it "transacts business"--although neitherresiding nor "found" therein--in which case theprocess may be issued to and served in a district inwhich the corporation either resides or is "found."

Id. at 372-73 (emphasis added). The SupremeCourt's use of "in which case" in the highlightedphrase to link Section 12's process provision to thesatisfaction of its venue clause suggests that thephrase "in such cases" in the statute serves the samepurpose.

Accordingly, we now reiterate the conclusionoriginally reached by this court in Goldlawr andformally adopted by the D.C. Circuit: theextraterritorial service provision of Clayton ActSection 12 may be invoked to establish personaljurisdiction only when the requirements of thesection's venue provision are satisfied.

(2) The Statutory History

Because we conclude that the language of Section 12is plain, we need not resort to legislative history, ashave those of our sister circuits that construe Section12 to be ambiguous. We do, however, note that suchlegislative history as exists does not support aconclusion that Congress enacted Section 12's serviceof process provision with the intent that it operateindependently from or reach beyond the section'svenue provision.

Undoubtedly, Congress viewed Section 12's "maincontribution to be its expansion of the bounds ofvenue." Go-Video, Inc. v. Akai Elec. Co., 885 F.2d at1410 (citing United States v. Scophony Corp. of Am.,333 U.S. 795, 806-08, 68 S.Ct. 855, 92 L.Ed. 1091(1948)) (emphasis added). The purpose of the serviceprovision, however, is less clear. Debate in the Houseof Representatives on the matter was sparse, anddebate in the Senate, which added the service ofprocess provision to an already drafted venueprovision, is non-existent. See Go-Video, Inc. v. AkaiElec. Co., 885 F.2d at 1410 (outlining sparselegislative history). [FN15] If the legislative historyof Section 12 provides no clear insights as toCongress's purpose in enacting expanded antitrustvenue and process provisions in a single sentence,that history can hardly evidence congressionalapproval for now divorcing Section 12's venue andprocess provisions so as to combine the latter with anexpanded general venue statute enacted decades later,an application that obviously could not have been inthe minds of any of the enacting legislators.

*10 Indeed, as the Supreme Court has noted,


























although Congress intended the Clayton Act "toprovide broader and more effective relief, bothsubstantively and procedurally, for persons injured byviolations of its antitrust policy," it was, in fact, quitecareful in expanding venue, rejecting several broaderproposals than the one finally enacted in Section 12.United States v. National City Lines, 334 U.S. 573,588, 68 S.Ct. 1169, 92 L.Ed. 1584 (1948) (noting that"[i]n adopting section 12 Congress was not willing togive the plaintiffs free rein to haul defendants hitherand yon at their caprice"), superseded in part bystatute, 28 U.S.C. § 1404(a) (superseding venuetransfer holding). To the extent the legislative historyspeaks at all, then, it suggests Congress's intent to"fix[ ] the limits within which [the parties] couldclaim advantage in venue and beyond which neithercould seek it." Id. at 588. Thus, before the addition ofa service of process amendment to Section 12, onemember of Congress voiced concern that servicemight not be possible in some places where theexpanded antitrust venue would obtain, see Go-Video, Inc. v. Akai Elec. Co., 885 F.2d at 1410(discussing objection of Rep. Webb), but nothing inthe legislative history suggests that any memberintended to extend service of process beyond thecarefully expanded venue provision. Viewed in thiscontext, Congress's decision in Section 12 to providefor worldwide service of process only "in such cases"as satisfied the expanded venue provision sensiblyserved to maintain the desired venue balance at thesame time that it ensured its effective operation.

(3) Expanded Venue and Service of ProcessProvisions in Other Statutes Are of Little Assistancein Construing Section 12

[5] In reaching a different conclusion, the districtcourt appears to have relied, in part, on other statutescontaining special venue and service of processprovisions that it concluded could operateindependently of one another, notably the SecuritiesExchange Act of 1934 ("Exchange Act"), 15 U.S.C. §78aa, and the Racketeer and Corrupt OrganizationsAct ("RICO"), 18 U.S.C. § 1965. See Daniel v.American Bd. of Emergency Med., 988 F.Supp. at199-200. Preliminarily, we observe that courts mustproceed cautiously in drawing such analogies. As theSupreme Court has warned, "analysis of specialvenue provisions must be specific to the statute"because Congress's intent may be permissive in somecircumstances and restrictive in others. Cortez ByrdChips, Inc. v. Bill Harbert Constr. Co., 529 U.S. 193,204, 120 S.Ct. 1331, 146 L.Ed.2d 171 (2000)(contrasting Congress's restrictive intent with respectto venue in patent cases, actions against national

banks, and geographic reach of Title VII, with itspermissive intent under the Federal Arbitration Act).In any event, attempts to analogize the venue andservice of process provisions of Section 12 withcounterpart provisions in the Exchange Act andRICO offer little help in resolving the parties'personal jurisdiction dispute because the text andstructure of those statutes differ in important respectsfrom the Clayton Act.

*11 Notably, the venue provision of the ExchangeAct reaches even more broadly than Section 12 of theClayton Act, permitting suit "in the district where anyact or transaction constituting the violation occurred."Compare 15 U.S.C. § 78aa [FN16] with 15 U.S.C. §22 (providing for venue where the defendant is "aninhabitant," "may be found," or "transacts business").Thus, our court has had no occasion to consider theindependent operation of the Exchange Act's serviceof process provision because we have yet to confronta case where a plaintiff sought to establish venuethrough some other, broader statute. See, e.g.,Mariash v. Morrill, 496 F.2d 1138, 1144 (2dCir.1974) (declining to decide whether, for purposesof venue under the Exchange Act, defendant"transacts business" in the Southern District of NewYork because it was "clear that an act or transactionconstituting the (alleged) violation (has) occurred" inthat district). Leasco Data Processing EquipmentCorp. v. Maxwell, 468 F.2d 1326 (2d Cir.1972), is tothe same effect: the alleged fraudulentmisrepresentations were made in the SouthernDistrict of New York where venue was laid. Viewedin this context, Judge Friendly's observation in thatcase that certain parts of Section 27 deal with venue,while another "speaks expressly only to service ofprocess," id. at 1340, hardly supports a conclusionthat the service of process provision operatesindependently from the venue provision. Indeed, itappears doubtful that any such circumstance wouldarise because, as Judge Friendly further noted,Congress intended for the venue and serviceprovisions of Section 27 "to extend personaljurisdiction to the full reach permitted by the dueprocess clause." Id. at 1339.

As for the RICO statute, see 18 U.S.C. § 1965,which the Ninth Circuit also relied on in construingSection 12's service of process provision to operateindependently of its venue provision, see ActionEmbroidery Corp. v. Atlantic Embroidery, Inc., 368F.3d at 1179, we note an important structuraldifference. While Section 12 of the Clayton Actdiscusses venue and service of process in onesentence, RICO separates these provisions into non-










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sequential, lettered subsections. Compare 15 U.S.C. §22 with 18 U.S.C. § 1965(a), (d). More importantstill is a textual difference between the two statutes.The language of RICO's service of process provisiondoes not limit its application to "such cases" as arereferred to in the statute's venue provision. Rather, inRICO, Congress specifically provides for the serviceof process provision to apply "in any action orproceeding under this chapter, " that is, the chapterdealing with racketeering. 18 U.S.C. § 1965(d)(emphasis added). Given that the Clayton Act servedas a model for RICO, see United States v. BonannoOrg. Crime Family of La Cosa Nostra, 879 F.2d 20,24 (2d Cir.1989), these language and structuraldifferences between the two statutes in theirtreatment of venue and process only reinforce theconclusion that Congress was expressly renderingindependent under RICO concepts that it had plainlylinked under Clayton Act Section 12, cf. id. at 25-27(discussing other similarities and differences betweenRICO and the Clayton Act that reveal Congress'sintent with respect to reach of these statutes). Thus,while plaintiffs urge us to construe Section 12'sservice of process clause to apply to the entireantitrust chapter, the narrower language of Section 12will not support that interpretation.

*12 In sum, when we interpret Section 12 " 'the wayit is written," ' we are obliged to conclude that itsservice of process provision can properly conferpersonal jurisdiction over a defendant " 'only whenthe action is brought in the district where thedefendant resides, is found, or transacts business," 'that is, the district where Section 12 venue lies. GTENew Media Servs. Inc. v. BellSouth Corp. ., 199 F.3dat 1351 (quoting Herbert Hovenkamp, PersonalJurisdiction and Venue in Private Antitrust Actions inthe Federal Courts, 67 Iowa L.Rev. 485, 509 (1982)).

[6] This is not to suggest that the general venuestatute does not remain available to plaintiffs inantitrust actions. Quite the contrary. See 15 CharlesAlan Wright, Arthur R. Miller & Edward H. Cooper,Federal Practice and Procedure § 3818 (2d ed.1986) ("[I]t is now clear beyond any doubt that thegeneral venue statutes apply to antitrust cases."). Butif 28 U.S.C. § 1391 is the basis for venue, anantitrust plaintiff cannot employ Section 12's serviceof process provision to secure personal jurisdiction.In such circumstances, a plaintiff must look to otherservice of process provisions, notably those specifiedin Fed.R.Civ.P. 4 or incorporated therein from statelaw to satisfy this requirement.

2. Applying Section 12 to the Jurisdiction

Defendants

[7] In view of this construction of Section 12'sservice of process provision, we cannot sustain thedistrict court's exercise of personal jurisdiction overCORD and the nine remaining hospital defendants.The district court expressly ruled that thesejurisdiction defendants did not satisfy Section 12'svenue provision because they did not transactbusiness in the district. See Daniel v. American Bd. ofEmergency Med., 988 F.Supp. at 263- 71. Plaintiffsdo not challenge this venue ruling on appeal. [FN17]Accordingly, for the reasons just discussed in theprevious subsection of this opinion, we conclude that,because plaintiffs cannot establish venue in theWestern District of New York under Section 12, theycannot avail themselves of that statute's worldwideservice of process provision to establish personaljurisdiction in that district. We, therefore, affirmdismissal of plaintiffs' Second Amended Complaintagainst CORD and the hospital defendants for lack ofpersonal jurisdiction.

B. Neither the Clayton Act nor 28 U.S.C. § 1391(b)Supports Venue in the Western District of New Yorkwith Respect to ABEM

Although ABEM did not raise a personal jurisdictionchallenge in the district court, and does not do so onappeal, it does challenge the district court'sconclusion that venue over this action properlyresides in the Western District of New York. SeeDaniel v. American Bd. of Emergency Med., 988F.Supp. at 258-63. Accordingly, it submits that lackof venue provides an alternative ground for affirmingthe judgment of dismissal. We agree. BecauseABEM's venue challenge is based upon essentiallyundisputed facts, we review the district court's venuedetermination de novo, see Gulf Ins. Co. v.Glasbrenner, 417 F.3d 353, 355 (2d Cir.2005), andconclude that venue is not proper under either theClayton Act or the general venue statute.

1. Venue Under Section 12 of the Clayton Act

*13 The district court concluded that plaintiffs'claims against ABEM were properly venued in theWestern District of New York under Section 12 ofthe Clayton Act because ABEM "transacts business"in that district. Daniel v. American Bd. of EmergencyMed., 988 F.Supp. at 258-63. We must disagree.

a. Section 12's "Transacts Business" Requirement

[8] The Supreme Court has construed the phrase



































"transacts business," as used in the venue provisionof Clayton Act Section 12, to refer to "the practical,everyday business or commercial concept of doingbusiness or carrying on business of any substantialcharacter." United States v. Scophony Corp., 333 U.S.at 807; accord Banana Distribs., Inc. v. United FruitCo., 269 F.2d 790, 794 (2d Cir.1959) (quotingScophony ); see also Eastman Kodak Co. of N.Y. v.South Photo Materials Co., 273 U.S. at 373 ("[A]corporation is engaged in transacting business in adistrict ... although not present by agents carrying onbusiness of such character and in such manner that itis 'found' therein and is amenable to local process--ifin fact, in the ordinary and usual sense, it 'transactsbusiness' therein of any substantial character.").Under this construction, "[t]echnical criteria such as'mere solicitation' or 'solicitation plus' are notdeterminative." Banana Distribs., Inc. v. United FruitCo., 269 F.2d at 794 (quoting Scophony, 333 U.S. at807). Rather, the propriety of venue turns on thenature of the corporate defendant's business.

A defendant manufacturer that promotes its goods ina judicial district through product demonstrations,that solicits orders through its salesmen in thatdistrict, and that ships its goods into that districtclearly "transacts business" under Section 12. SeeEastman Kodak Co. of N.Y. v. South Photo MaterialsCo., 273 U.S. at 404; see also Banana Distribs., Inc.v. United Fruit Co., 269 F.2d at 794 & n. 8 (findingcompany transacts business where it solicits sales,maintains office, and provides customer assistance indistrict). But, in the view of the D.C. Circuit, so toodoes a defendant charged with accrediting institutionswhen it conducts field inspections in the judicialdistrict as part of the accreditation process. See Levinv. Joint Comm'n on Accreditation of Hosps., 354 F.2d515, 517-18 (D.C.Cir.1966). Meanwhile, the ThirdCircuit has concluded that a defendant professionalorganization transacts business in a district when itenforces its standards against constituentorganizations through direct, continual supervision ofthose organizations in the judicial district. See Myersv. American Dental Assoc., 695 F.2d 716, 730 (3dCir.1983).

On the other hand, when an association's business is"public relations and professional advancement," theFourth Circuit has ruled that it does not transactbusiness within a particular district merely becausesome of its members reside there and it solicitsadvertising time in and transmits advertisements andother professional materials into the district. SeeBartholomew v. Virginia Chiropractors Assoc., 612F.2d 812, 816 (4th Cir.1979), abrogated on other

grounds, Union Labor Life Ins. Co. v. Pireno, 458U.S. 119, 102 S.Ct. 3002, 73 L.Ed.2d 647 (1982).Similarly, the Fifth Circuit has concluded that anassociation of golf professionals does not transactbusiness in a district where some of its membersreside and where it advertises in magazines, makesmembership materials available, and conducts a five-day program for its members. See Golf City, Inc. v.Wilson Sporting Goods, Inc., 555 F.2d 426, 436-38(5th Cir.1977).

*14 In each of these cases, the determinationwhether a defendant transacted business in a districtdepended on a realistic assessment of the nature ofthe defendant's business and of whether its contactswith the venue district could fairly be said toevidence the "practical, everyday business orcommercial concept of doing business or carrying onbusiness of any substantial character." United Statesv. Scophony Corp., 333 U.S. at 807.

b. ABEM Does Not "Transact Business" in theWestern District of New York

[9] The district court concluded that ABEM transactsbusiness in the Western District of New Yorkbecause it "maintains continuous contacts whichamount to business continuity within this district," asevidenced by the following circumstances: (1)ABEM certified an unspecified number of physiciansin New York State and, in so doing, communicatedwith them in this state; (2) application fees constitute99% of ABEM's revenue, and ABEM received anunspecified amount of that revenue from theapplication fees of physicians in New York State; and(3) ABEM mailed a copy of its application form toplaintiff Dr. Daniel in the district. Daniel v. AmericanBd. of Emergency Med., 988 F.Supp. at 259-62.These facts, however, are insufficient to show thatABEM "transacts business" in the Western District ofNew York.

Preliminarily, we note that, with the exception of theapplication mailed to Dr. Daniel, the cited contactsare with the State of New York as a whole, notspecifically the Western District of New York. Onlythe latter contact is relevant to Section 12 venue. See15 U.S.C. § 22 ("Any suit ... may be brought notonly in the judicial district whereof [the defendantcorporation] is an inhabitant, but also the district ...wherein it ... transacts business. " (emphasis added));see also Eastman Kodak Co. of N.Y. v. South PhotoMaterials Co., 273 U.S. at 374 (holding thatsolicitation of orders from and sale and shipment ofgoods to "the Georgia district ... was transacting


















































business in that district").

In any event, these contacts must be considered inlight of the nature of ABEM's business, which iscertifying doctors who meet its training and testingstandards in the field of emergency medicine.ABEM, which operates out of its headquarters inMichigan, neither develops its standards noradministers its certification examinations in theWestern District of New York. It does not own orlease any real estate in the district. It does notmaintain an office, telephone, bank account, ormailing address there. It employs no agent to carry onits operations or promote its activities in the WesternDistrict of New York. It does not advertise or solicitapplicants for its certification examination in thedistrict. Indeed, inquiries or contacts are initiated bypotential applicants to ABEM, not the reverse. To theextent the district court found that 99% of ABEM'srevenues derive from examination application fees,see Daniel v. American Bd. of Emergency Med., 988F.Supp. at 261, it made no finding as to how much ofthat fee revenue derived from applicants in theWestern District of New York. Indeed, the onlyevidence on that point appears to be an affidavit ofABEM's executive director (in support of ABEM'smotion to dismiss plaintiffs' Second AmendedComplaint), which states that the revenue ABEMreceives from examination applications in theWestern District of New York is de minimis "inrelation to ABEM's total revenues." Munger Aff. ¶ 7(July 20, 1994).

*15 With this understanding of ABEM's business, itis impossible to conclude that an unspecified numberof communications by ABEM into the district inresponse to inquiries about tests to be administeredoutside the district, even when coupled with anunspecified but apparently minimal amount ofrevenue from test fees transmitted from applicantsresiding in the district, evidences the sort of"practical, everyday business or commercial conceptof doing business or carrying on business of anysubstantial character" that the Supreme Court hasequated to "transact[ing] business" for purposes ofSection 12 venue. See United States v. ScophonyCorp., 333 U.S. at 807; Batholomew v. VirginiaChiropractors Assoc., 612 F.2d at 816; Golf City, Inc.v. Wilson Sporting Goods, Inc., 555 F.2d at 436-38.

Accordingly, because we conclude that, as a matterof law, plaintiffs failed to demonstrate that ABEM"transacts business" in the Western District of NewYork, venue could not rest in that district pursuant toSection 12 of the Clayton Act.

2. Venue Under the 28 U.S.C. § 1391(b)

Plaintiffs submit that, even if venue does not lie inthe Western District of New York under Section 12of the Clayton Act, the district court correctlyconcluded that it had venue pursuant to the generalfederal venue statute, 28 U.S.C. § 1391(b). Althoughthe district court's conclusions were not limited toABEM, because we have already concluded that thedistrict court lacked personal jurisdiction over CORDand the hospital defendants, we focus our § 1391(b)discussion on ABEM.

Title 28 U.S.C. § 1391(b) provides in relevant part: A civil action wherein jurisdiction is not foundedsolely on diversity of citizenship may, except asotherwise provided by law, be brought only in (1) ajudicial district where any defendant resides, if alldefendants reside in the same State, (2) a judicialdistrict in which a substantial part of the events oromissions giving rise to the claim occurred ..., or(3) a judicial district in which any defendant maybe found, if there is no district in which the actionmay otherwise be brought.

We conclude that none of the three grounds forvenue identified in the statute permit plaintiffs topursue their antitrust claims against ABEM in theWestern District of New York.

a. Section 1391(b)(1)

Plaintiffs' reliance on § 1391(b)(1) merits littlediscussion because all defendants do not reside inNew York State. To the extent the district courtthought otherwise, its conclusion was informed by itsmisconstruction of the service of process provision ofSection 12 of the Clayton Act.

Title 28 U.S.C. § 1391(c) defines the residence of acorporation as "any judicial district in which it issubject to personal jurisdiction at the time the actionis commenced." Because the district court ruled thatpersonal jurisdiction over all defendants could beobtained in the Western District of New Yorkpursuant to the worldwide service of processprovision of Section 12, it concluded that alldefendants were residents of New York State.Properly construed, however, Section 12's service ofprocess provision did not permit the district court toexercise personal jurisdiction over CORD or thehospital defendants. See supra Part II.A. Thus, thesedefendants cannot be deemed residents of New Yorkpursuant to § 1391(c), and the district court lackedvenue under § 1391(b)(1) to hear this claim against
























ABEM.

b. Section 1391(b)(2)

*16 [10] In fact, it is § 1391(b)(2), not §1391(b)(1), on which plaintiffs primarily rely tosupport venue over ABEM in the Western District ofNew York, arguing that a "substantial part of theevents or omissions giving rise to [their antitrust]claim[s] occurred" in that district. In ruling inplaintiffs' favor on this point, the district courtconcluded that ABEM's "denial of the [certificationtest] applications and appeals by Daniel and fiveother individual plaintiffs and [its] officialcommunication of this action to Plaintiffs in NewYork is sufficient to constitute a substantial part ofthe events giving rise to Plaintiffs' claims." Daniel v.American Bd. of Emergency Med., 988 F.Supp. at274-75 . [FN18] Once again, we must disagree.

[11][12] Although our court has had few occasionsto interpret § 1391(b)(2) since that statute wasamended in 1990, certain principles are clear. Section1391(b)(2) does not restrict venue to the district inwhich the "most substantial" events or omissionsgiving rise to a claim occurred. See Bates v. C & SAdjusters, Inc. ., 980 F.2d 865, 868 (2d Cir.1992);David D. Siegel, "Commentary on the 1988 and 1990Revisions of Section 1391, Subdivision (a), Clause(2)," printed in 28 U.S.C.A. § 1391 at 9-10 (West1993); see also First of Mich. Corp. v. Bramlet, 141F.3d 260, 264 (6th Cir.1998) (interpreting analogous"substantial part of the events or omission" languagein 28 U.S.C. § 1391(a)(2) (relating to jurisdictionfounded only on diversity)); Setco Enters. Corp. v.Robbins, 19 F.3d 1278, 1281 (8th Cir.1994) (same).Rather, as we recently explained, § 1391(b)(2)"contemplates that venue can be appropriate in morethan one district" and "permits venue in multiplejudicial districts as long as a 'substantial part' of theunderlying events took place in those districts." GulfIns. Co. v. Glasbrenner, 417 F.3d at 356.Nevertheless, the "substantial events or omissions"requirement does limit the forums available toplaintiffs. See id. at 357 (cautioning district courts to"take seriously the adjective 'substantial" ' indischarging duty to "construe the venue statutestrictly"). This is so because, as the Supreme Courtexplained before the amendment of section 1391,"[i]n most instances, the purpose of statutorilydefined venue is to protect the defendant against therisk that a plaintiff will select an unfair orinconvenient place of trial." Leroy v. Great W. UnitedCorp., 443 U.S. 171, 183-84 (1979) (emphasis inoriginal); see also Bates v. C & S Adjusters, Inc., 980

F.2d at 867 (noting that Leroy and other pre-amendment precedents "remain important sources ofguidance" in construing the venue statute andrecognizing 1990 amendments to § 1391 as "at mosta marginal expansion of the [general] venueprovision" aimed at reducing litigation about "wherethe claim arose" under the former venue provision);Cottman Transmission Sys. v. Martino, 36 F.3d 291,294 (3d Cir.1994) (explaining that "the currentstatutory language still favors the defendant in avenue dispute by requiring that the events oromissions supporting a claim be 'substantial" ' and "isintended to preserve the element of fairness so that adefendant is not haled into a remote district having noreal relationship to the dispute"); Woodke v. Dahm,70 F.3d 983, 985 (8th Cir.1995) (explaining that "byreferring to 'events and omissions giving rise to theclaim,' Congress meant to require courts to focus onrelevant activities of the defendant, not of theplaintiff").

*17 [13] Thus, when a plaintiff relies on §1391(b)(2) to defeat a venue challenge, a two-partinquiry is appropriate. First, a court should identifythe nature of the claims and the acts or omissions thatthe plaintiff alleges give rise to those claims. See GulfIns. Co. v. Glasbrenner, 417 F.3d at 357. Second, thecourt should determine whether a substantial part ofthose acts or omissions occurred in the district wheresuit was filed, that is, whether "significant events oromissions material to [those] claim[s] ... haveoccurred in the district in question." See id. (emphasisremoved); see also Jenkins Brick Co. v. Bremer, 321F.3d 1366, 1372 (11th Cir.2003) (asking (1) "Whatacts or omissions by [defendant] gave rise to[plaintiff's] claim?" and (2) "Of those acts, did a'substantial part' of them take place in [the chosenvenue]?"); cf. Cottman Transmission Sys. v. Martino,36 F.3d at 295- 96 (identifying alleged acts oromissions and then asking whether they aresubstantial).

[14][15] "Substantiality" for venue purposes is morea qualitative than a quantitative inquiry, determinedby assessing the overall nature of the plaintiff'sclaims and the nature of the specific events oromissions in the forum, and not by simply adding upthe number of contacts. See Gulf Ins. Co. v.Glasbrenner, 417 F.3d at 357; Cottman TransmissionSys. v. Martino, 36 F.3d at 295-96 ("In assessingwhether events or omissions giving rise to the claimsare substantial, it is necessary to look at the nature ofthe dispute."). When material acts or omissionswithin the forum bear a close nexus to the claims,they are properly deemed "significant" and, thus,






























































substantial, but when a close nexus is lacking, so toois the substantiality necessary to support venue. SeeJenkins Brick Co. v. Bremer, 321 F.3d at 1372(explaining that substantiality requirement of §1391(b)(2) requires consideration only of acts oromissions that "have a close nexus to the wrong").

This principle has informed our venue analysis inother cases, even if we have not articulated thesubstantiality requirement specifically in terms of thenexus between the acts or omissions in the chosenforum and the nature of plaintiffs' claims. Mostrecently, we concluded that judgment holders' requestand receipt of an order lifting an automaticbankruptcy stay in the district, which permitted thejudgment holders to obtain their judgment, togetherwith the submission, approval, or issuance in thedistrict of the insurance policy under which thejudgment allegedly must be paid, could constitute asubstantial part of the events giving rise to a claimsounding in contract. See Gulf Ins. Co. v.Glasbrenner, 417 F.3d at 357-58 (vacating andremanding for venue determination). Similarly, inBates v. C & S Adjusters, Inc., 980 F.2d at 868, weconcluded that plaintiff's receipt of a collection noticein the district was a substantial part of the eventsgiving rise to a claim under the Fair Debt CollectionPractices Act because the statute seeks to curb theeffect on consumers of abusive debt practices like thecollection notices sent to the plaintiff. Also, wheretwo agreements giving rise to a defense werenegotiated through a series of communicationsdirected to one party in the Southern District of NewYork, we concluded that a substantial part of theplaintiff's claim to a right to arbitration under thoseagreements occurred in that district and supportedvenue there. See U.S. Titan, Inc. v. Guangzhou ZhenHua Shipping Co., 241 F.3d at 153. But when allevents supporting a claim for dissolution of adefendant company (including commingling offunds, improper transactions, and failure to maintaincorporate records) occurred in Illinois, we concludedthat the fact of defendant's incorporation in NewYork, its servicing of New York hospitals, itscollection of money from New York debtors, and itsemployment of a New York law firm did not supportvenue in the Southern District of New York becausethe New York actions did not constitute a substantialpart (or, indeed, any part) of the events or omissionsgiving rise to plaintiff's claims. See Friedman v.Revenue Mgmt. of N.Y., Inc., 38 F.3d 668, 672 (2dCir.1994).

*18 Other circuits have similarly resolved venuedisputes by considering the connection between the

acts or omissions in the filing forum and the assertedclaims. See, e.g., Jenkins Brick Co. v. Bremer, 321F.3d at 1372- 73 [11th Cir.] (rejecting Alabamavenue for plaintiff company with headquarters in thatstate when events giving rise to claim for breach ofnon-compete agreement all occurred in SouthernDistrict of Georgia); Uffner v. La Reunion Francaise,244 F.3d 38, 42-43 (1st Cir.2001) (concluding thatDistrict of Puerto Rico was proper venue becauseloss of vessel in district's waters is substantial part ofevents giving rise to claim by vessel owner forwrongful denial of insurance claim); First of Mich.Corp. v. Bramlet, 141 F.3d at 263-64 [6th Cir.](concluding that Eastern District of Michigan wasproper venue in case involving dispute overinvestment advice because financial advisor didbusiness and underlying transactions and investmentstook place there); Woodke v. Dahm, 70 F.3d at 985-86 [8th Cir.] (holding venue improper in NorthernDistrict of Iowa where plaintiff resided and felteffects of charged trademark violations becauseneither alleged "passing off" nor any other eventhaving substantial connection to claims occurredthere); Cottman Transmission Sys., Inc. v. Martino,36 F.3d at 295-96 [3d Cir.] (holding venue improperin Eastern District of Pennsylvania when all but oneevent relevant to contract, trademark, and unfair tradepractice claims took place in Michigan).

Applying these principles to this case, we concludethat § 1391(b)(2) does not support venue in theWestern District of New York. Plaintiffs allege aseries of actions by defendants to support theirantitrust claims: in 1988, ABEM closed the practicetrack to qualify for its certification exam; since thattime, ABEM has consistently refused to permitplaintiffs to take the ABEM certification exam;meanwhile, the hospital defendants have refused tohire, promote, or pay top remuneration to doctors notcertified by ABEM. Plainly, the vast majority ofthese acts occurred outside the Western District ofNew York, indeed, outside the State of New York.ABEM's decision to close the practice-track wasmade at its headquarters in Michigan. Similarly,ABEM's rejections of plaintiffs' applications to takeits certification exam were made in Michigan. To theextent ABEM communicated its decision to plaintiffsby mail sent to their home states, plaintiffs point toonly six of the 176 named plaintiffs who receivedsuch rejection notices in the Western District of NewYork. As for the hospitals, whose alleged failure tohire, promote, or pay plaintiffs in a mannercomparable to ABEM-certified doctors is the mainalleged injury, of the twenty-eight sued in this case,not one is located in the Western District of New




































York.

Viewed in this context, ABEM's transmittal into theWestern District of New York of a half-dozen lettersrejecting applications to sit for its certificationexamination outside New York constitutes only aninsignificant and certainly not "a substantial part ofthe events or omissions giving rise to the [plaintiff'santitrust] claim[s]." We conclude that thesecoincidental contacts are insufficient to afford venuein the Western District of New York pursuant to §1391(b)(2).

c. Section 1391(b)(3)

*19 [16] Plaintiffs contend that venue over theirantitrust claims is proper in the Western District ofNew York pursuant to § 1391(b)(3) because, at thetime this action was filed, individual defendant HenryA. Thiede resided in the Western District of NewYork and, given the geographic diversity of the othernamed defendants, there is no other district in whichthis action could reasonably be brought.

As this court has previously explained in discussingan analogous venue alternative in § 1391(a)(3)(relating to diversity jurisdiction), the phrase "if thereis no district in which the action may otherwise bebrought" indicates that venue may be based on thatsubsection only if venue cannot be established inanother district pursuant to any other venueprovision. See Doctor's Assocs. v. Stuart, 85 F.3d975, 983 (2d Cir.1996) (citing 1A Moore's FederalPractice ¶ 0.342[3], at 4083); see also Wright,Miller & Cooper, 15 Federal Practice and Procedure§ 3802.1 (Supp.2005) (describing § 1391(a)(3), like§ 1391(b)(3), as a "fallback" provision available onlywhen there is no district in which venue can be laidpursuant to (a)(1) and (a)(2)).

In this case, § 1391(b)(2) does establish anothervenue for plaintiffs' antitrust claims: the WesternDistrict of Michigan. As our discussion of the factsdemonstrates, a "substantial part" of the allegedevents giving rise to the plaintiffs' antitrust claimsoccurred in East Lansing, Michigan. It is there thatABEM has its headquarters. It was there that ABEMcreated and then closed the practice track for itscertification examination, the crux of the chargedantitrust scheme. It was from there that ABEMrejected plaintiffs' applications to sit for its exam. Itwas there that CORD purportedly strove to maintainformal residency training as the unwaivablerequirement for ABEM certification. Thus, becauseplaintiffs could have satisfied § 1391(b)(2) in the

Western District of Michigan, they cannot rely on §1391(b)(3) to support venue in the Western Districtof New York.

In sum, because neither Section 12 of the ClaytonAct nor 28 U.S.C. § 1391(b) establishes venue in theWestern District of New York to hear this caseagainst ABEM, we can affirm dismissal of this actionagainst ABEM on this alternative ground.

C. The Transfer of this Case to Another DistrictWhere Jurisdiction and Venue Are Proper Is Not inthe Interest of Justice

1. Discretion to Transfer

The identified defects in personal jurisdiction andvenue preclude plaintiffs from pursuing this case inthe Western District of New York, despite its longhistory in that forum. See Christianson v. Colt Indus.Operating Corp., 486 U.S. 800, 818, 108 S.Ct. 2166,100 L.Ed.2d 811 (1988) (noting "age-old rule that acourt may not in any case, even in the interest ofjustice, extend its jurisdiction where none exists," arule that applies even to parties who "spend yearslitigating claims only to learn that their efforts andexpense were wasted in a court that lackedjurisdiction"). A question remains, however, as towhether we should simply affirm dismissal on thesegrounds or, in the interest of justice, order transfer ofthe action to another district where jurisdiction andvenue properly obtain. See 28 U.S.C. § 1406(a)(permitting court to cure venue defect "in the interestof justice" by transferring case "to any district ordivision in which it could have been brought"); seealso Goldlawr, Inc. v. Heiman, 369 U.S. at 465-66(reversing dismissal of antitrust action becausedistrict court was authorized to transfer under §1406(a) even though it lacked personal jurisdictionover defendants); Corke v. Sameiet M.S. Song ofNorway, 572 F.2d 77, 79 (2d Cir.1978) (concludingthat § 1406(a) permits courts to transfer in interest ofjustice whenever either personal jurisdiction or venueare improper); SongByrd, Inc. v. Estate of Grossman,206 F.3d 172, 179 n. 9 (2d Cir.2000) (citing Corkeand recognizing propriety of § 1406 transfer to curelack of personal jurisdiction even when venueproper).

*20 [17] Courts enjoy considerable discretion indeciding whether to transfer a case in the interest ofjustice. See Phillips v. Seiter, 173 F.3d 609, 610 (7thCir.1999). A "compelling reason" for transfer isgenerally acknowledged when a plaintiff's case, ifdismissed, would be time-barred on refiling in the










































proper forum. Id.; accord Corke v. Sameiet M.S.Song of Norway, 572 F.2d at 80 (noting an"important purpose" of § 1406(a) transfer is toalleviate burden of statutes of limitations operating as"procedural obstacles" to merits consideration).

[18][19] In this case, it is possible that the four-yearstatute of limitations applicable to antitrust actions,see 15 U.S.C. § 15b, might preclude plaintiffs fromrefiling the exact same antitrust complaint in theWestern District of Michigan, unless, of course,plaintiffs could demonstrate a continuing wrong. SeeZenith Radio Corp. v. Hazeltine Research, Inc., 401U.S. 321, 338, 91 S.Ct. 795, 28 L.Ed.2d 77 (1971)("In the context of a continuing conspiracy to violatethe antitrust laws ... each time a plaintiff is injured byan act of the defendants a cause of action accrues tohim to recover the damages caused by that act andthat, as to those damages, the statute of limitationsruns from the commission of the act." (citationsomitted)); accord Higgins v. New York Stock Exch.,Inc., 942 F.2d 829, 832 (2d Cir.1991). Even in suchcircumstances, however, courts will not "wastejudicial resources by transferring a case that is clearlydoomed." Phillips v. Seiter, 173 F.3d at 610. AsJudge Posner observed in Phillips, a court's limitedjurisdiction "to decide whether to transfer or dismiss"a case over which it lacks jurisdiction thus includes"a power of limited review of the merits." Id. at 611.If "a peek at the merits," id. at 620, "reveals that thecase is a sure loser in the court that has jurisdiction(in the conventional sense) over it, then the court inwhich it is initially filed--the court that does not havejurisdiction--should dismiss the case rather thanwaste the time of another court," id. at 611.Following these principles, this court recentlyaffirmed dismissal of a Tucker Act claim, refusing toorder § 1631 transfer to the Court of Claims becausethe record failed to establish the "entitlement"necessary to support the plaintiff's due process claim.Adeleke v. United States, 355 F.3d 144, 152 (2dCir.2004); see also Aura Lamp & Lighting v.International Trading Corp., 325 F.3d 903, 909-10(7th Cir.2003) (ordering dismissal rather than transferof appeal that was plainly lacking in merit); Haugh v.Booker, 210 F.3d 1147, 1150 (10th Cir.2000)(affirming dismissal without requiring transfer ofhabeas challenge that was without merit).

So in this case, in which the issue of antitruststanding was fully litigated in the district court andhas been the focus of briefing and argument onappeal, we agree with the district court that plaintiffslack antitrust standing to pursue their claim andconclude that transfer to another district is not in the

interest of justice. Accordingly, the judgment ofdismissal should be affirmed.

2. The Requirement of Antitrust Standing

a. The Factors Relevant to Standing

*21 [20] It is a well-established principle that, whilethe United States is authorized to sue anyoneviolating the federal antitrust laws, a private plaintiffmust demonstrate "standing." See Cargill, Inc. v.Monfort of Colo., 479 U.S. 104, 110 & nn.5-6, 107S.Ct. 484, 93 L.Ed.2d 427 (1986); see also CrimpersPromotions, Inc. v. Home Box Office, Inc., 724 F.2d290, 292- 93 (2d Cir.1983) (Friendly, J.) (explainingrequirements of antitrust standing). This standingrequirement originates in the Supreme Court'srecognition that, although Section 4 of the ClaytonAct appears to confer a broad private right of actionfor antitrust damages, [FN19] "Congress did notintend the antitrust laws to provide a remedy indamages for all injuries that might conceivably betraced to an antitrust violation." Associated Gen.Contractors of California, Inc. v. California StateCouncil of Carpenters, 459 U.S. 519, 534, 103 S.Ct.897, 74 L.Ed.2d 723 (1983). Just as in common-lawtort and contract litigation, concepts such as"foreseeability and proximate cause, directness ofinjury, certainty of damages, and privity of contract"circumscribe a party's right to recovery, so in antitrustactions "the plaintiff's harm, the alleged wrongdoingby the defendants, and the relationship betweenthem," can limit the right to sue. Id. at 532-33, 535-36 (noting "similarity between the struggle ofcommon-law judges to articulate a precise definitionof the concept of 'proximate cause,' and the struggleof federal judges to articulate a precise test todetermine whether a party injured by an antitrustviolation may recover treble damages" (footnotesomitted)). The same logic applies to claims forinjunctive relief under Section 16 of the Clayton Act.[FN20] See Cargill, Inc. v. Monfort of Colo., Inc.,479 U.S. at 110-13 (applying antitrust standingrequirement to claims for injunctive relief).

Because the theory of antitrust standing is notcodified but was developed by courts over time inresponse to myriad concerns presented in particularcases, it cannot easily be reduced to a "black-letterrule that will dictate the result in every case."Associated Gen. Contractors of California, Inc. v.California State Council of Carpenters, 459 U.S. at536. Nevertheless, certain basic principles can beidentified. For example, the fact that the plaintiffscharge the defendants, at least in part, with a per se





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violation of the antitrust laws does not absolve themof the obligation to demonstrate standing. SeeAtlantic Richfield Co. v. USA Petroleum Co., 495U.S. 328, 344, 110 S.Ct. 1884, 109 L.Ed.2d 333(1990). Further, it is useful to distinguish the questionof whether an antitrust violation occurred fromwhether plaintiffs have standing to pursue it. Toavoid confusing these issues, some courts andcommentators have suggested assuming the existenceof a violation in addressing the issue of standing. SeeSAS of Puerto Rico v. Puerto Rico Tel. Co., 48 F.3d39, 43, 46 (1st Cir.1995); see also 2 Phillip E.Areeda, Herbert Hovenhamp, & Roger D. Blair,Antitrust Law ¶ 335f, at 299 & n.63 (2d ed.2000)(collecting cases). Thus, while the issue of anantitrust violation in this case is by no means clear,for purposes of this appeal we assume the allegedviolation and assess only plaintiffs' standing to pursuetheir claim.

*22 [21] Finally, we identify four factors that aregenerally deemed relevant to determining antitruststanding: an injury in fact (1) to plaintiffs' "businessor property," see 15 U.S.C. § 15; (2) that is notremote from or duplicative of that sustained by amore directly injured party, see Associated Gen.Contractors of California v. California State Councilof Carpenters, 459 U.S. at 540-42; (3) that qualifiesas an "antitrust injury," see Brunswick Corp. v.Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 489, 97S.Ct. 690, 50 L.Ed.2d 701 (1977); and (4) thattranslates into reasonably quantifiable damages, seeAssociated Gen. Contractors of California v.California State Council of Carpenters, 459 U.S. at545. See also 2 Areeda, Hovenkamp & Blair,Antitrust Law ¶ 335a, at 286 (identifying four factorsand noting that antitrust standing "requires more thanthe constitutional minimum [of a] 'case orcontroversy" '). Material factual disputes existbetween the parties as to the first and fourth factors.Thus, like the district court, we do not assume at thisstage that these factors would necessarily be resolvedagainst the plaintiffs. We focus instead on theremaining two factors: whether the plaintiffs haveadequately demonstrated that the alleged injury totheir business or property is one that the antitrustlaws were intended to prevent and whether theyqualify as efficient enforcers of the antitrust claims atissue.

b. The Antitrust Injury

[22][23] The fact that private plaintiffs have beeninjured by acts that violate the antitrust laws is notenough to confer standing to sue. Whether the relief

they seek is legal or equitable, plaintiffs mustdemonstrate that they themselves have sustained an"antitrust injury, which is to say injury of the type theantitrust laws were intended to prevent and that flowsfrom that which makes defendants' acts unlawful."Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429U.S. at 489 (emphasis in original); see also Cargill,Inc. v. Monfort of Colo., Inc., 479 U.S. at 110-13. Inthis regard, it has long and frequently been observedthat "the antitrust laws ... were enacted 'for theprotection of competition, not competitors." 'Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429U.S. at 488 (quoting Brown Shoe v. United States,370 U.S. 294, 320, 82 S.Ct. 1502, 8 L.Ed.2d 510(1962) (emphasis in original)); accord Cargill, Inc. v.Monfort of Colo., Inc., 479 U.S. at 110; George HaugCo. v. Rolls Royce Motor Cars Inc., 148 F.3d 136,139 (2d Cir.1998); see also Geneva Pharms. Tech.Corp. v. Barr Labs., Inc., 386 F.3d 485, 511 (2dCir.2004) (noting that "focus of [Clayton Act] § 7,like the Sherman Act, is on competition notcompetitors").

To evaluate whether plaintiffs--would-becompetitors in a market that they define as ABEM-certified and -eligible doctors--demonstrate "antitrustinjury" as a result of the defendants' actions, it is firstnecessary carefully to consider the nature ofplaintiffs' claim. They assert that ABEM, by insistingupon completion of a formal residency program inemergency medicine as a precondition to taking itscertification test, except for the few practicingphysicians allowed post-1988 to take the examwithout emergency medicine residency training,artificially restricts the supply of ABEM-certifieddoctors. As a result, the remuneration presentlyreceived by ABEM-certified doctors is inflated, andthese higher costs are then "passed on to consumersof and the persons and entities who pay for suchservices." Second Am. Compl. ¶ 96. In detailingtheir own financial injury from this scheme, plaintiffsallege that they "have been and continue to receivesubstantially less remuneration than ABEM certifiedemergency physicians" and that they are unable to"compete for the higher salaries paid to ABEMeligible and ABEM certified emergency physicians."Id. ¶ 104. Indeed, plaintiffs specifically plead theirremuneration injury by reference to the differencebetween their own earnings and those of ABEM-certified doctors: "an average amount of no less than$50,000 annually." Id. In short, their theory of injuryis not simply that ABEM-certified doctors commandsuper-competitive remuneration; their injury is theinability to do likewise.















































*23 As the Seventh Circuit observed in Sanjuan v.American Board of Psychiatry and Neurology, Inc.,such a theory does not state "an antitrust injury." 40F.3d 247, 251-52 (7th Cir.1995). The Sanjuanplaintiffs were also doctors denied board certificationin their field of medical specialty, in that casebecause they failed to pass the defendant'scertification examination. Plaintiffs complained that,because English was not their native language, theywere at an unfair disadvantage in taking the oral partof the examination compared to doctors born in theUnited States. As a result of not receiving boardcertification, the plaintiffs claimed that they earnedless than their board-certified colleagues.

Judge Easterbrook, writing for the Sanjuan panel,rejected this theory of injury: "The claim that apractice reduces (particular) producers' incomes hasnothing to do with the antitrust laws, which aredesigned to drive producers' prices down rather thanup." Id. at 251. He tartly concluded: "Plaintiffs, whowant to obtain a credential that will help them chargehigher prices, have pleaded themselves out of courton the antitrust claim." Id. at 252.

Plaintiffs before this court submit that Sanjuan isdistinguishable because the complaining doctors inthat case were permitted to sit for their specialtycertification exam, while they are not. They arguethat the Sanjuan doctors were not "excluded fromcompetition"; they "failed in competition."Appellants' Br. at 32. That argument, however, goesto whether the Sanjuan plaintiffs stated an antitrustviolation, not whether they had antitrust standing topursue such a claim. The Seventh Circuit appears tohave concluded that, even if the defendant'schallenged examination practice violated the antitrustlaws, dismissal was required because the injuryalleged by plaintiffs--their inability to earn higherpay--was not "an antitrust injury."

This is not to suggest that a would-be competitor cannever demonstrate standing to challenge anexclusionary scheme that precludes him fromentering a market simply because he sues to recoverthe profits that he otherwise would have earned.Indeed, both the Supreme Court and this court haveconcluded to the contrary. See generally AtlanticRichfield Co. v. USA Petroleum Co., 495 U.S. at 345-46 (recognizing that, depending on the nature of theinjury alleged, competitors may suffer antitrustinjury); Volvo N. Am. Corp. v. Men's Int'l Prof'lTennis Council, 857 F.2d 55, 67 (2d Cir.1988)(concluding putative cartel member has antitruststanding). To the extent the district court's opinion

has been read to suggest that competitors seekinghigher compensation do not state an antitrust injury,see Philip E. Areeda & Herbert Hovenkamp,Antitrust Law ¶ 335, at 108 (2004 Supp.) (notingdecision and expressing doubt that competitorclaiming inability to obtain "higher compensation" asantitrust injury would be an unsuitable plaintiff tochallenge a boycott), we think that characterizationinapt. As the magistrate and district judges who longlabored with this case recognized, the theory ofantitrust injury pleaded by plaintiffs in their SecondAmended Complaint was not that they were deniedthe competitive remuneration that the market wouldhave awarded but for domination by the defendants'cartel. Instead, through years of litigation, plaintiffs'singular complaint was that they were denied theopportunity to command the same super-competitivepay earned by their ABEM-certified colleagues. SeeDaniel v. American Bd. of Emergency Med., 269F.Supp.2d at 176-77. In a Memorandum of Law filedto support class certification, plaintiffs described thecommon injury to the class as follows: defendants'"conspiracy has prevented all Plaintiffs fromobtaining the higher salaries that ABEM and ABEMeligible emergency physicians command." Id. at 176(quoting Pls.' Mem. at 26 (Doc. 70) (emphasisadded)) (quotation marks omitted). Similarly, at hisdeposition, lead plaintiff Dr. Daniel stated that hesought ABEM certification in order to "command ahigher hourly rate" that would afford him economic"parity " with other ABEM-certified physicians. Id.(quoting Daniel Dep. at 135-36 (emphasis added)).

*24 The conclusion that plaintiffs do not state anantitrust injury is reinforced by the narrow scope oftheir injunctive prayer, by which they seek only tojoin rather than end the exclusive ABEMarrangement in order to acquire a share of the super-competitive profits. Assuming arguendo that thedefendants' control over the supply of ABEM-certified doctors does injure competition byrestricting supply, [FN21] plaintiffs cannotthemselves state an antitrust injury when theirpurpose is to join the cartel rather than disband it. See2 Areeda, Hovenkamp, & Blair, Antitrust Law ¶348e, at 401 ("[T]here is no antitrust right to join acartel."). As this court noted in Volvo North AmericaCorp. v. Men's International Professional TennisCouncil, a cartel member--or would-be member--whoseeks to remove a restraint "that merely prevents acartel member from acquiring a greater share of thefruits of the cartel" does not suffer antitrust injury.857 F.2d at 67. If, however, a cartel-member plaintiffseeks to remove the restraint so he may be "free tocompete--such that the member's interest coincides


















with the public interest in vigorous competition -" hesatisfies the antitrust injury requirement. Id. at 67-70(concluding that putative cartel-member plaintiffsuffered antitrust injury because plaintiff's "interestmay diverge from the interests of the cartel as awhole" where plaintiff challenged and sought to endfive cartel practices). That is not this case. Plaintiffsdo not, after all, sue to eliminate the eligibilitycriteria for ABEM certification that they claim allowsdefendants to limit market supply. Certainly, they donot seek an injunction allowing any licensed doctorto take the ABEM exam so that all who pass canreceive board certification in emergency medicine.Plaintiffs do not even seek to eliminate the residencytraining requirement. They sue only to restore--temporarily--the practice track as an alternative toresidency training so that they can qualify for theABEM exam, after which they are satisfied to havethe certification door shut on any other testapplicants. [FN22] In sum, by seeking relief thatwould permit them to join but not end the allegedexclusive arrangement, plaintiffs make plain that theyare not complaining of an antitrust injury.

Todorov v. DCH Healthcare Authority, 921 F.2d1438 (11th Cir.1991), a case relied on by the districtcourt, supports this conclusion. In Todorov, theplaintiff doctor sought hospital privileges in order tojoin the charged anticompetitive scheme and therebysecure a share of the allegedly anticompetitivebenefits. Id. at 1453-55. But a plaintiff who "seeks tojoin the exclusive arrangement" of which hecomplains "while leaving the exclusivity requirementotherwise intact" is simply "not a victim of antitrustinjury." 2 Areeda, Hovenkamp, & Blair, AntitrustLaw ¶ 348e, at 401. Thus, the private action inTodorov was dismissed for lack of standing. Todorovv. DCH Healthcare Auth., 921 F.2d at 1455.

*25 To the extent that we would considertransferring this case to the Western District ofMichigan, we have no reason to think that the SixthCircuit takes a different view of antitrust standing. InPotters Medical Center v. City Hospital Association,800 F.2d 568 (6th Cir.1986), that court allowed aplaintiff hospital to sue a rival hospital to force it toend its anticompetitive practice of denying hospitalprivileges to physicians who also had privileges withplaintiff. This conclusion is consistent with theprinciple that, when a plaintiff thus "seeks to forbidexclusivity--first on its own behalf and implicitly onbehalf of others," the plaintiff does state an antitrustinjury because it seeks "to destroy an anticompetitivearrangement." 2 Areeda, Hovenkamp & Blair,Antitrust Law ¶ 348e, at 401. [FN23] As already

noted, in this case, plaintiffs do not sue to destroy,but rather to join, defendants' alleged exclusivearrangement for supplying the market with ABEM-certified doctors so that plaintiffs can command ashare of the super-competitive remuneration that thecartel scheme makes available to ABEM-certifieddoctors.

Essentially conceding the merits of the magistratejudge's conclusion that a suit to achieve this goalwould not state an antitrust injury, the plaintiffsargued in their objections to the report andrecommendation that they should be allowed toamend their complaint for a third time, to limit theirprayer for damages to the difference between theiractual earnings and the amount they would haveearned in a competitive market absent the conspiracy.See generally Fed.R.Civ.P. 15(a). They did not,however, alter the injunctive relief sought. We cannotconclude that the district court abused its discretionin denying leave to amend. See Zenith Radio Corp. v.Hazeltine Research, Inc., 401 U.S. at 330; seegenerally Official Comm. of Unsecured Creditors ofColor Tile, Inc. v. Coopers & Lybrand, LLP, 322F.3d 147, 168 (2d Cir.2003) (concluding districtcourt did not abuse discretion in denying leave toamend "because there was 'a repeated failure to curedeficiencies by amendments previously allowed" '(citation omitted)). Assuming such an amended claimwould state an antitrust injury, as the district courtnoted, the proposed amendment represented a thirdchange in pleadings over thirteen years of litigation.This raised legitimate concerns as to both unduedelay and prejudice because plaintiffs proposed "tochange their entire theory of the case" in a way thatwas unsupported by any expert economic analysis.Daniel v. American Bd. of Emergency Med., 269F.Supp.2d at 164; see Barrows v. Forest Labs., Inc.,742 F.2d 54, 58-59 (2d Cir.1984) (upholding districtcourt's denial of leave to amend complaint to effect"a radical shift" in theory of recovery); cf. Foman v.Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 9 L.Ed.2d222 (1962) (recognizing delay and prejudice asgrounds for denying leave to amend).

On appeal, plaintiffs submit that the amendmentrepresented only a clarification, not a departure, fromtheir prior theory of antitrust injury. They furthersubmit that the theory is supported by basic economicprinciples of supply and demand, requiring no expertevidence that their entry into the market would lowerprices for consumers. The first argument is belied bythe record, which, as we have already discussed,demonstrates that plaintiffs' core complaint was theirinability to command the same super-competitive
































compensation available to ABEM-certified doctors.Indeed, even after plaintiffs proposed to amend theirprayer for damages, they offered no modification totheir equitable demand. To the extent, then, thatplaintiffs continued to seek an injunction requiring atemporary reinstatement of the practice track to allowthem to enter the alleged cartel, while otherwisepreserving its exclusive certification arrangement(and super-competitive remuneration opportunities),there was still reason to question whether they wereseeking relief for an antitrust injury even afteramendment. As for plaintiffs' second argument, wenote simply that the pro-competitive effect forconsumers of having plaintiffs provide emergencyhealth care at higher rates as ABEM-certified doctorsthan they had as non-certified practitioners is by nomeans obvious. [FN24] Plaintiffs' economic expertconceded that he had performed no analysis of theconsumer effect of defendants' purportedlyanticompetitive conduct. Plaintiffs attempt to excusethis omission by arguing that the issue had not beenthe focus of discovery up to that point. Theirargument is unconvincing. The fact that plaintiffs hadnot yet been called upon to provide defendants withthat economic analysis in discovery does not explainwhy, after a decade of litigation, their own expert hadnot been asked to consider this critical issue. Underthese circumstances, we cannot conclude that, thedistrict court abused its discretion in refusing to allowplaintiffs, after more than a decade of litigation, tosubstitute an untested theory of antitrust injury forone that was deficient as a matter of law.

*26 Because plaintiffs fail to demonstrate theantitrust injury necessary to support standing, there isno point in transferring this case to another district.

c. Efficient Enforcers

[24][25][26][27] Even if we were to conclude thatthe plaintiffs had adequately stated an antitrust injury,that would not necessarily establish their standing tosue in this case. "A showing of antitrust injury isnecessary, but not always sufficient," to establishstanding. Cargill, Inc. v. Monfort of Colo., Inc., 479U.S. at 110 n. 5; accord G.K.A. Beverage Corp. v.Honickman, 55 F.3d 762, 766 (2d Cir.1995). "[O]therreasons" may sometimes indicate that a party whostates an antitrust injury is nevertheless not a properantitrust plaintiff. Associated Gen. Contractors ofCalifornia v. California State Council of Carpenters,459 U.S. at 540-45; Cargill, Inc. v. Monfort of Colo.,Inc., 479 U.S. at 110 n. 5. These other reasons may"prevent the plaintiff from being an efficient enforcerof the antitrust laws." Balaklaw v. Lovell, 14 F.3d

793, 798 n. 9 (2d Cir.1994) (citing Todorov v. DCHHealthcare Auth., 921 F.2d at 1449). Among the"other" factors generally considered relevant tostanding are

(1) "the directness or indirectness of the assertedinjury"; (2) "the existence of an identifiable class ofpersons whose self-interest would normallymotivate them to vindicate the public interest inantitrust enforcement"; (3) the speculativeness ofthe alleged injury; and (4) the difficulty ofidentifying damages and apportioning them amongdirect and indirect victims so as to avoidduplicative recoveries.

Volvo N. Am. Corp. v. Men's Int'l Prof'l TennisCouncil, 857 F.2d at 66 (quoting Associated Gen.Contractors of California v. California State Councilof Carpenters, 459 U.S. at 540-45). The extent towhich these factors apply when plaintiffs sue forinjunctive relief depends on the circumstances of thecase. See Cargill, Inc. v. Monfort of Colo., Inc., 479U.S. at 111 n. 6 (noting with respect to duplicativerecoveries that "one injunction is as effective as 100,"and "100 injunctions are no more effective than one"(quotation marks and citation omitted)); see alsoVolvo N. Am. Corp. v. Men's Int'l Prof'l TennisCouncil, 857 F.2d at 66 ("Some, but not all, of thesesecondary factors may also limit a plaintiff's right toinjunctive relief under § 16 [of the Clayton Act].").Similarly, the weight to be given the various factorswill necessarily vary with the circumstances ofparticular cases. See generally Sullivan v. Tagliabue,25 F.3d 43, 46 (1st Cir.1994) (noting that theSupreme Court has provided "little guidance as tohow to weigh the various factors" relevant to antitruststanding).

In this case, where plaintiffs sue for both moneydamages and injunctive relief, one factor raisesparticular standing concerns: the presence of otherefficient antitrust enforcers "whose self-interestwould normally motivate them to vindicate the publicinterest in antitrust enforcement." Associated Gen.Contractors of California v. California State Councilof Carpenters, 459 U.S. at 542. In considering thisfactor, we recognize, as the district court observed,that plaintiffs "have no natural economic self-interest" in reducing the cost of emergency medicalcare to consumers. Daniel v. American Bd. ofEmergency Med., 269 F.Supp.2d at 182. This sameconcern may frequently arise when competitors sueto vindicate the antitrust laws, without automaticallydepriving such plaintiffs of antitrust standing. But inthis case, the concern is not theoretical. There is along litigation history in which the relief pursued byplaintiffs has been to gain entry into an exclusive













































arrangement that they otherwise seek to maintain inorder to share in the super-competitive remunerationallegedly made possible by ABEM exclusivity.

*27 While it is questionable whether plaintiffs'damages demand and their particular prayer forinjunctive relief would genuinely promote the publicinterest in antitrust enforcement, no such concernwould arise if defendants' actions were challenged byanother group of plaintiffs: the health care insurers,including employers and government agencies, whocompensate hospitals for most emergency medicalcare. It would be unrealistic to expect emergency carepatients, who can hardly make a deliberate selectionof an emergency physician, let alone inquire into thedoctor's board certification, to pursue an antitrustaction to challenge an artificially inflatedcompensation rate. As for the hospitals, we recognizethat they play a dual role in the alleged scheme. Asconsumers who purportedly overpaid for emergencymedical care, they might be seen as victims of thealleged anticompetitive conduct and potentialplaintiffs. On the other hand, as suppliers ofresidency training in emergency medicine, thehospitals have an alleged interest in limiting ABEMcertification to doctors with such training. But privateand government health care insurers that routinelyreimburse hospitals for millions of dollars inemergency care provided to thousands of coveredpatients have a direct and undivided economicinterest in obtaining lower costs, as well as the legalsophistication and resources necessary to pursue anantitrust challenge. The fact that none has done so todate does not support recognizing plaintiffs' standing.Rather, it reinforces the conclusion that no publicinterest is sacrificed by dismissing this action for lackof personal jurisdiction and venue without transfer toanother district. See Associated Gen. Contractors ofCalifornia, Inc. v. California State Council ofCarpenters, 459 U.S. at 542.

III. Conclusion

To summarize, we conclude that the district courtcould not acquire personal jurisdiction over CORD orthe hospital defendants through the service of processprovision of Section 12 of the Clayton Act unlessvenue was established pursuant to that section.Because Section 12 venue did not obtain in this case,the action against CORD and the hospital defendantsis properly dismissed for lack of personaljurisdiction. We further conclude that the actionagainst ABEM is properly dismissed for lack ofvenue because neither Section 12 of the Clayton Actnor 28 U.S.C. § 1391 permits this case to be heard in

the Western District of New York. Finally, weconclude that transfer of this case to any other districtwhere jurisdiction and venue might properly beobtained is not in the interest of justice becauseplaintiffs lack antitrust standing to pursue this casefurther.

The June 30, 2003 judgment of the district courtdismissing all claims is AFFIRMED.

KATZMANN, Circuit Judge, concurring in part anddissenting in part:

I concur in the majority's well-reasoneddeterminations that personal jurisdiction in theWestern District of New York does not exist overCORD and the Hospital Defendants, and that venuein the Western District is not supported for ABEM. Irespectfully dissent, however, from the conclusionthat transfer to another district is not in the interest ofjustice because the plaintiffs lack antitrust standing.

*28 I respectfully disagree with the two conclusionsunderlying the majority's view that the plaintiffs herecannot demonstrate standing: 1) that they have notdemonstrated antitrust injury, and 2) that even if theycould show antitrust injury, they do not have anadequate self-interest in securing relief to vindicatethe public interest in antitrust enforcement.

Antitrust Injury

I believe the antitrust injury inquiry is in fact asimple one. The antitrust injury requirement"ensure[s] that 'a plaintiff can recover only if the lossstems from a competition-reducing aspect or effect ofthe defendant's behavior." ' Primetime 24 JointVenture v. NBC, 219 F.3d 92, 103 (2d Cir.2000)(quoting Atlantic Richfield Co. v. USA PetroleumCo., 495 U.S. 328, 334, 110 S.Ct. 1884, 109 L.Ed.2d333 (1990)). Here the allegations in the SecondAmended Complaint meet this burden. They statethat because the defendants closed the practice trackand continue to forbid practice-track physicians fromtaking the certification exam, the plaintiffs are being"unreasonably restrained from competing in themarket" for ABEM-certified emergency physicians,and that as a consequence, the plaintiffs "have beenand continue to receive substantially lessremuneration than ABEM certified emergencyphysicians." ¶ 104. These allegations suffice, in myview, to allege losses stemming from a competition-reducing aspect or effect of the defendant's behavior.

Indeed, this case is not unlike other antitrust cases in
















which courts have held that health care providersalleging harm from anti-competitive practices havedemonstrated antitrust standing. In Brader v.Allegheny General Hospital, 64 F.3d 869 (3dCir.1995), a physician claimed that a conspiracy hadresulted in the termination of his hospital privileges,and that the loss of these privileges prevented himfrom obtaining privileges at other hospitals. Id. at871-72. He alleged that this constituted a ShermanAct violation, id., stating that the defendants' actions"prevented the Plaintiff and others from engaging inthe practice of general vascular trauma surgery in therelevant market," which "prevented competition inthe relevant product market within the relevantgeographic market." Id. at 875-76. The courtconcluded that these allegations--which are similar inall important respects to the plaintiffs' allegationhere--sufficed to demonstrate antitrust injury. Id. at876-77. See also Angelico v. Lehigh Valley Hosp.,Inc., 184 F.3d 268, 272-73 (3rd Cir.1999) (holdingthat a surgeon-plaintiff who had sued three hospitalsfor effectively excluding him from staff privilegeshad shown antitrust injury and antitrust standing).

The majority, however, concludes that the plaintiffscannot possibly demonstrate antitrust injury becausethe plaintiffs' "theory of remuneration is not simplythat ABEM-certified doctors command super-competitive remuneration; their injury is the inabilityto do likewise." Majority Op.at 58. To support theassertion that the plaintiffs seek to earn "super-competitive" wages, the majority makes severalassertions about the relief the plaintiffs seek. In myview, these assertions are problematic.

*29 First, the majority contends that the plaintiffs'theory "was not that they were denied the competitiveremuneration that the market would have awardedbut for domination by the defendants' cartel."Majority Op. at 59-60. I believe, however, that thisstatement is belied by the Second AmendedComplaint, which states that the plaintiffs have beendeprived of the opportunity to "compete for thehigher salaries paid to ABEM eligible and ABEMcertified emergency physicians." ¶ 104 (emphasisadded). Because the complaint specifies that theplaintiffs, if they obtain the remedy they seek, willcompete with existing ABEM-eligible and ABEM-certified emergency physicians, the complaint makesclear that the plaintiffs do in fact seek thecompensation that the market would have awardedthem but for domination by the defendants' cartel.True, these salaries will be higher than the plaintiffs'current salaries. However, the plaintiffs' demands areconsistent with consumer benefit, in that increased

supply could result in lower salaries for ABEM-certified physicians in general, and lower prices forconsumers of their services. In the end, if thepractice-track exclusion is anti-competitive inviolation of the Sherman Act, and plaintiffs areawarded the relief they seek, consumers will havemore choices as they seek the highest quality ABEM-certified service at the lowest price--exactly the sortof outcome the Sherman Act is designed to foster.See Northern Pac. Ry. Co. v. United States, 356 U.S.1, 4, 78 S.Ct. 514, 2 L.Ed.2d 545 (1958) (stating thatthe Sherman Act rests on the premise thatcompetition "will yield the best allocation of oureconomic resources, the lowest prices, the highestquality and the greatest material progress" and addingthat "the policy unequivocally laid down by the Act iscompetition").

Second, the majority states that the "[p]laintiffs donot ... sue to eliminate the eligibility criteria forABEM certification that they claim allowsdefendants to limit market supply." Majority Op. at61. However, the Second Amended Complaint seeksto have ABEM "permit plaintiffs and the class theyrepresent who, as of the date of judgment herein, orwith the passage of time, meet ABEM's practice trackcriteria ... to take the ABEM certificationexamination." In my view, this would constitute theelimination of the eligibility criteria that the plaintiffsclaim allows the defendants to limit market supplyillegally.

Third, the majority states that the plaintiffs "do notseek an injunction allowing any licensed doctor totake the ABEM exam so that all who pass can receiveboard certification in emergency medicine." MajorityOp. at 61. This is true. However, this only means thatthe plaintiffs will earn "super-competitive"remuneration if one assumes that all restrictions onwho may take the certification exam are illegallyanti-competitive. The plaintiffs do not allege theillegallity of restrictions other than the restriction onpractice-track physicians. Whether excludingphysicians who are neither residency-track norpractice-track physicians is lawful might be thesubject of some other litigation brought by someother set of excluded plaintiffs. At this stage of thislitigation, however, without further discovery, Ibelieve we must accept not only the plaintiffs'allegations that excluding practice-track physicians isillegally anti-competitive, but also the view--implicitin the complaint-- that excluding all physicians otherthan residency-track physicians and practice-trackphysicians is reasonable and not illegal. [FN25]





















*30 Fourth, the majority states that the plaintiffsseek to restore practice-track eligibility only"temporarily." Majority Op. at 61. However, theSecond Amended Complaint seeks to have thecertification exam open to all class members "who, asof the date of judgment herein, or with the passage oftime, meet ABEM's practice track criteria." (emphasisadded). I believe the complaint thus seeks relief thatis by no means temporary. A footnote in the majorityopinion suggests that at oral argument plaintiffs'counsel admitted that the sought-after remedy is lessthan permanent. Majority Op. at 62 n.22. In therelevant portion of the oral argument, counsel wasasked whether, because "demand is exceedingsupply" in the market for emergency medicineservices, the total cost of such services would stay thesame, even if relief were granted. Oral Arg.Recording at 10:55:53. Counsel responded, in part,that even if demand is currently "exceeding supply,"that might change if a court granted the relief theplaintiffs seek, so that supply would increase to fulfilldemand, and "have market forces take over entirely."Id. at 10:56:10. Later, in response to a follow-upquestion, counsel stated that once practice-trackphysicians are permitted to take the certificationexam, and supply has increased, "the violationpresumably will have ceased." Id. at 10:56:43. I viewthese responses as simply assuming hypotheticallythat market forces have taken over and violationshave ceased because the plaintiffs have obtained theongoing relief they seek. Neither response indicates aconcession "that, at some future point, ... it would beappropriate to close the practice track."

For these reasons, I do not believe that the plaintiffsseek to earn "super-competitive" wages, or any otherrelief that is inconsistent with their allegations that 1)prohibiting practice-track physicians from taking thecertification exam is illegally anti-competitive and 2)the plaintiffs have suffered antitrust injury as aconsequence.

Of course, it may be that the plaintiffs are notentitled to relief on the merits. Perhaps the exclusionof practice-track physicians is entirely reasonablebecause, in fact, its pro-competitive benefitsoutweigh its anti-competitive effects. For example,perhaps physicians who would qualify for the examonly through practice experience are fundamentallyless skilled than those who have completed anapproved residency program. These issues, however,are classic "rule of reason" questions, distinct fromthe antitrust standing question. [FN26] See GenevaPharms. Tech. Corp. v. Barr Labs., Inc., 386 F.3d485, 506-07 (2d Cir.2004) (summarizing rule of

reason analysis); Angelico, 184 F.3d at 272-76(holding that a surgeon-plaintiff who had sued threehospitals for effectively excluding him from staffprivileges had antitrust standing, and distinguishingbetween antitrust standing and anti-competitivemarket effect under the rule of reason analysis); Finev. Barry & Enright Prods., 731 F.2d 1394, 1397-99(9th Cir.1984) (holding that a plaintiff who was notpermitted to be a contestant on a game show becauseof restrictions on repeat appearances had standing tosue but did not demonstrate sufficient injury to thecontestant market under a rule of reason analysis).

*31 The majority relies principally on Sanjuan v.American Board of Psychiatry and Neurology, Inc.,40 F.3d 247 (7th Cir.1995). I believe Sanjuan isfundamentally different from the case before us. Inthat case, the physician-plaintiffs had failed an oralexamination of the American Board of Psychiatryand Neurology. See id. at 248. The plaintiffs hadneglected to show that their exclusion harmedconsumers, instead demonstrating only that it harmedthe plaintiffs. See id. at 251 (observing that "[i]t ishard to see how the Board's activities could amountto an exercise of market power, which entails cuttingback output in the market and thus driving up pricesto consumers," and adding that "[w]hen challenged,plaintiffs revealed that they want to show injury toproducers"). Sanjuan is thus a classic case of allegingharm to competitors, not competition, which, as themajority rightly points out, does not suffice forSherman Act protection. See Brunswick Corp. v.Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 488, 97S.Ct. 690, 50 L.Ed.2d 701 (1977) ("The antitrustlaws, however, were enacted for 'the protection ofcompetition, not competitors." ') (quoting BrownShoe Co. v. United States, 370 U.S. 294, 320, 82S.Ct. 1502, 8 L.Ed.2d 510 (1962)). Here, by contrast,the plaintiffs have alleged that the defendants have"severely limit[ed] the output of ABEM certified andABEM eligible emergency physicians" and that"higher costs of ABEM emergency physicians havebeen passed on to consumers of ... such services."Second Amended Complaint at ¶ ¶ 94, 96. Becausethey have alleged that relevant conduct does in factharm consumers and not just themselves, I believethe plaintiffs in our case have alleged "injury of thetype the antitrust laws were intended to prevent."Brunswick Corp., 429 U.S. at 489.

The majority also cites to Todorov v. DCH MedicalAuthority, 921 F.2d 1438 (11th Cir.1991). I believethis case is also inapposite. In Todorov, an appealfrom a summary judgment grant, the Eleventh Circuitconcluded that if a local hospital granted the plaintiff-































physician privileges to administer CT scans, thatphysician--a neurologist who did not specialize in CTscans--would "administer and interpret CT scans ofthe head less efficiently than the radiologists," whowould "reduce the price of CT scans of the head until[the plaintiff] could no longer participate in themarket at a profit." Id. at 1453. The plaintiff"eventually would either be driven from the marketor reach some agreement with the radiologists to fixprices," an outcome that "would not benefitconsumers," and the Seventh Circuit thus affirmedthe grant of summary judgment to the defendants forlack of antitrust standing. Id. at 1453-55. Here, weconsider the antitrust injury question on a motion todismiss, when only limited discovery has beenconducted. In this posture, there is no basis toconclude that 1) if practice-track physicians werepermitted to sit for the certification exam, those whopassed would provide emergency medicine servicesless efficiently than do residency-track physicians; 2)that residency-track physicians would reduce theirprices until the practice-track physicians were eitherdriven from the market or agreed to fix prices; and 3)that consumers would not benefit. Consequently, I donot believe Todorov affords a basis for concludingthat the plaintiffs cannot show antitrust injury.[FN27]

Self-Interest in Securing Relief and the AssociatedGeneral Contractors Factors

*32 Second, the majority concludes that theplaintiffs cannot demonstrate standing based on oneof the "other reasons" courts sometimes consider inanalyzing antitrust standing. Majority Op. at 66.These additional factors, analyzed once antitrustinjury has been demonstrated, were originallyidentified in Associated General Contractors v.California State Council of Carpenters, 459 U.S.519, 103 S.Ct. 897, 74 L.Ed.2d 723 (1983) and aresometimes referred to collectively as the "efficientenforcer" analysis.

Here, the majority bases its conclusion on just one ofthe Associated General Contractors points: "[t]heexistence of an identifiable class of persons whoseself-interest would normally motivate them tovindicate the public interest in antitrust enforcement."Id. at 542. The majority expresses concern that theplaintiffs have no "natural economic self-interest" inreducing the cost of emergency medical care toconsumers. Majority Op. at 68. Of course, it cannotbe the case that any plaintiff seeking to increase itsincome fails the Associated General Contractorsanalysis. Such a rule would essentially prohibit

antitrust suits by competitors, which the majorityacknowledges is simply not the law. Majority Op. at59. Rather, the majority rests its holding on adifferent ground: that health insurers are better suitedthan the plaintiffs to vindicate the public's interest inlower costs.

In Associated General Contractors, the SupremeCourt grappled with the problem that a literal readingof section four of the Clayton Act "is broad enough toencompass every harm that can be attributed directlyor indirectly to the consequences of an antitrustviolation." Id. at 529. As the majority opinion hereobserves, Associated General Contractors concludedthat Congress must have intended that litigationunder section four of the Clayton Act "would besubject to constraints comparable to well-acceptedcommon-law rules," such as "foreseeability andproximate cause, directness of injury, certainty ofdamages, and privity of contract." Id. at 532-33. Tostay faithful to this congressional intent, the Courtlaid out the factors we now call the "efficientenforcer" analysis to "guide the exercise ofjudgment" in determining "whether a party injured byan antitrust violation may recover treble damages"under the Clayton Act. Id. at 536-37. The AssociatedGeneral Contractors plaintiffs were unions allegingthat a multi-employer association and its memberscoerced third parties and association members intobusiness relationships with non-union firms. Id. at520. Applying the multi-factor analysis, the Courtheld that these "allegations of consequential harm"were "insufficient as a matter of law." Id. at 545.

Associated General Contractors offers no guidanceas to how many factors must weigh against a plaintiffin order to find that a Clayton Act remedy isprecluded, or which factors are the most important. Itseems clear, however, that the ultimate purpose of the"efficient enforcer" analysis is not to find the idealplaintiff, nor the most altruistic one, nor the one mostgrievously injured by the anti-competitive conduct.Rather, the purpose is to ensure that the statute is notread so broadly that any person who has been harmedby anti-competitive conduct, however remotely orindirectly, is granted a right to sue. See also VerizonCommunications, Inc. v. Law Offices of Curtis V.Trinko, LLP, 540 U.S. 398, 416-17, 124 S.Ct. 872,157 L.Ed.2d 823 (Stevens, J., concurring) (observingthat the Associated General Contractorsinterpretation of section four was intended to avoidduplicative recoveries and complex apportionment ofdamages, and stating that this interpretation "has thusadhered to Justice Holmes' observation that the'general tendency of the law, in regard to damages at












least, is not to go beyond the first step" ') (quotingSouthern Pacific Co. v. Darnell-Taenzer Lumber Co.,245 U.S. 531, 533, 38 S.Ct. 186, 62 L.Ed. 451(1918)).

*33 I simply do not believe it is necessary, in orderto effectuate this purpose, to preclude suit by theplaintiffs in the present case solely because insurancecompanies appear to have a greater self-interest invindicating the public interest in antitrustenforcement. In my view, the Associated GeneralContractors issues here are similar to those in PottersMedical Center v. City Hospital Association, 800F.2d 568 (6th Cir.1986), in which the Sixth Circuitconsidered antitrust claims brought by a smallhospital, Potters Medical Center, against the EastLiverpool City Hospital, a nearby larger hospital. Id.at 570-71. Potters alleged that City Hospital violatedthe Clayton Act by refusing to grant staff privilegesto doctors with privileges at Potters, pressuringdoctors with City Hospital privileges not to obtainPotters privileges, and harassing doctors to preventthem from referring patients to Potters. Id. at 571.The district court had ruled that the plaintiffs lackedantitrust standing based on a multi-factor test similarto our "efficient enforcer" analysis and derived fromAssociated General Contractors. Id. at 575. TheSixth Circuit reversed, finding that 1) Potters was"clearly a competitor" in the market for inpatientphysician services--a fact that weighed in favor ofstanding; 2) Potters's injuries flowed directly from thealleged antitrust violation; 3) damages weresomewhat speculative, but not enough to precludestanding; and 4) the risk of duplicative recovery wasminimal. Id. at 576, 580. It seems that the identicalmulti-factor analysis would yield the same result inthis case. Moreover, presumably, insurancecompanies would have been as well situated todemand that City Hospital grant staff privileges toPotters physicians as insurers are in our case todemand that the defendants reopen the practice track.This possibility apparently did not trouble the SixthCircuit. [FN28]

The majority attempts to differentiate Potters bysuggesting that the plaintiffs here, unlike those inPotters, do not seek to "forbid exclusivity" by trying"to destroy an anticompetitive arrangement."Majority Op. at 62-63. However, as noted above, theplaintiffs here seek to forbid the exclusion ofpractice-track physicians from ABEM certification,which would destroy an allegedly anti-competitivearrangement. True, as the majority points out, theirrelief would preserve some exclusivity for thecertification exam. Majority Op. at 63. But again, I

believe this only means that the plaintiffs see somerestrictions on who may take the exam as reasonableand legal, even though, they contend, prohibitingpractice-track physicians from taking the exam isillegally anti-competitive. In the Sixth Circuit case,Potters itself engaged in the common practice of onlygranting staff privileges to certain physicians,Potters, 800 F.2d at 571, but this did not prohibit itfrom contesting the defendants' allegedly illegallyanti-competitive practices.

*34 Thus, I cannot agree with the majority that theplaintiffs lack standing based on the AssociatedGeneral Contractors "efficient enforcer" factors.

The Competitor/Consumer Baseline and theLikelihood of Success

I add only one further point concerning antitruststanding. A review of cases and commentariesindicates that courts do indeed dispute thecircumstances under which a party that is neither acompetitor nor a consumer may demonstrate antitrustinjury or satisfy the Associated General Contractorsanalysis. However, I believe there is agreement thatcompetitors and consumers constitute a baseline setof parties that generally do meet these tests. SeeIllinois ex rel. Ryan v. Brown, 227 F.3d 1042, 1046(7th Cir.2000) ("[N]ormally only consumers orcompetitors have standing ...."); Carpet Group Int'l v.Oriental Rug Imps. Ass'n, 227 F.3d 62, 76-77 (3dCir.2000) ("[G]enerally only competitors andconsumers will suffer antitrust injury ...."); SerpaCorp. v. McWane, Inc., 199 F.3d 6, 10 (1st Cir.1999)("Competitors and consumers in the market wheretrade is allegedly restrained are presumptively theproper plaintiffs to allege antitrust injury."); Fla. Seedv. Monsanto Co., 105 F.3d 1372, 1374 (11thCir.1997) (stating that "[b]asically, a plaintiff mustshow that it is a customer or competitor in therelevant antitrust market" to show it is an efficientenforcer); Bell v. Dow Chem. Co., 847 F.2d 1179,1183 (5th Cir.1988) ("Restraint in the market affectsconsumers and competitors in the market; as such,they are the parties that have standing to sue."); Gen.Indus. Corp. v. Hartz Mountain Corp. ., 810 F.2d795, 809 (8th Cir.1987) ("[S]tanding to sue under theSherman Act is limited to a consumer or competitorthat proximately suffers antitrust injury.") (quotationmarks omitted); Bahn v. NME Hosps., Inc., 772 F.2d1467, 1470 (9th Cir.1985) (stating that the efficientenforcer analysis requires "that the injured party be aparticipant in the same market as the allegedmalefactors"); see also C. Douglas Floyd, AntitrustVictims Without Antitrust Remedies: The Narrowing
















































of Standing in Private Antitrust Actions, 82 Minn.L.Rev. 1, 2 (1997) (observing that lower federalcourts have distilled Supreme Court holdings to theprinciple that antitrust standing "should be limited,either absolutely or presumptively, to consumers orcompetitors adversely affected by the defendant'santicompetitive conduct"). In my view, to suggest, asthe majority does, that a competitor does not havestanding if 1) the competitor seeks to earn a higherwage by ending some but not all exclusions from amarket, or 2) some other class of competitors orconsumers apparently has a greater self-interest inremedying the violation, departs from the mainstreamof antitrust standing cases.

And, of course, here, we are not even deciding thestanding issue conclusively. We need only decidewhether the plaintiffs have a likelihood ofdemonstrating antitrust standing in another district,such that the plaintiffs have not "plainly fail[ed]" todemonstrate a meritorious claim. Adeleke v. UnitedStates, 355 F.3d 144, 152 (2d Cir.2004); see alsoPhillips v. Seiter, 173 F.3d 609, 611 (7th Cir.1999)(stating that transfer is inappropriate when "the caseis a sure loser" after transfer, because transferringwould simply "waste the time of another court"). Forthe reasons described above, I believe that theplaintiffs' chances of success are significantly betterthan this.

*35 Consequently, although I concur in thejurisdiction and venue analyses, I respectfully dissentfrom the majority opinion to the extent it refuses totransfer this matter to another district.

FN1. This proposal was submitted, in thefirst instance, to the various specialty boardsand medical associations under whosesponsorship ABEM operated from 1976until 1986. These sponsors included theAmerican Boards of Family Practice,Internal Medicine, Obstetrics andGynecology, Otolaryngology, Pediatrics,Psychiatry and Neurology, and Surgery, aswell as the American Medical Association,the American College of EmergencyPhysicians, and the Society for AcademicEmergency Medicine.

FN2. ABEM's 1976 application to ABMSfor specialty recognition described thepractice eligibility track alternative asfollows: To be eligible under this category,the applicant must have: A. Accumulated 7,000 hours in practice

and/or teaching of emergency medicine 1. accumulated 2,800 of the 7,000 hourswithin any 24 month period prior to anyapplication 2. accumulated the 7,000 hours over aminimum of 5 years B. Accumulated 50 hours of approvedcontinuing medical education in emergencymedicine for each year in practice after1973. Eight years after the first examinationadministration, the practice eligibilitycategory will expire. ABEM Application to ABMS (Munger Aff.Ex. F (Jan. 27, 1995)) (emphasis added).

FN3. Other ABMS-approved specialtyboards also utilized a temporary practicetrack during the early years of the specialty.Of the six new medical specialty boardsestablished since 1950, including ABEM, alloffered practice-track alternatives toresidency training for between four and tenyears, after which successful completion ofresidency training became the essentialqualification to sit for a certification exam.Of thirty-three ABMS-approvedsubspecialties established since 1975, alloffered practice-track alternatives forbetween two and five years before insistingon residency training. Munger Aff. ¶ ¶ 27-28 & Ex. J.

FN4. Of the other defendants named in thisaction, the district court dismissed fifteenhospitals and all but two individualdefendants in various decisions notchallenged on appeal. See Daniel v.American Bd. of Emergency Med., 212F.R.D. 134 (W.D.N.Y.2002); Daniel v.American Bd. of Emergency Med., 235F.Supp.2d 194 (W.D.N.Y.2002); Daniel v.American Bd. of Emergency Med., 237F.Supp.2d 336 (W.D.N.Y.2002); Daniel v.American Bd. of Emergency Med., 988F.Supp. 127, 278-79 (W.D.N.Y.1997);Daniel v. American Bd. of Emergency Med.,802 F.Supp. 912 (W.D.N.Y.1992). Inaddition, plaintiffs reached prejudgmentsettlements with three dismissed and tworemaining hospital defendants. Finally, theappeal to this court was withdrawn orvoluntarily dismissed with respect to the tworemaining individual defendants, Henry A.Thiede and Frank A. Disney, and two






























hospital defendants, Our Lady of MercyMedical Center and The Johns HopkinsHospital, Part of the Johns Hopkins HealthSystem.

FN5. Of the twenty-eight original hospitaldefendants, none was located in the WesternDistrict of New York, and only two werelocated in New York State: UniversityHospital--State University of New York atStony Brook, located in Suffolk County, andLincoln Medical and Mental Health Center,located in New York City. These hospitalswere dismissed and are not before us onappeal.

FN6. Named plaintiff John A. Timmons,M.D., has now taken and passed the ABEMcertification exam, although he wasoriginally denied the opportunity to do sowhen he attempted to establish eligibilityunder the practice track after that optionclosed in 1988.

FN7. Plaintiffs allege that the relevantgeographic market is the United States andthe relevant product market is the market for"ABEM certified and ABEM eligible ...emergency physicians." Second Am. Compl.¶ ¶ 91-92. Defendants submit that therelevant product market is broader,including all emergency room physicians,not only those who are ABEM certified oreligible. Because the district court structureddiscovery to concentrate the parties' effortson certain topics other than the relevantgeographic and product markets, we do notattempt to resolve this dispute on the presentrecord. For purposes of this appeal, weassume that the relevant markets are asalleged by the plaintiffs.

FN8. Plaintiffs have not always beenconsistent in labeling the theory of theirantitrust claims. In their initial brief to thiscourt, they appeared to argue a groupboycott. Group boycotts "generally consistof agreements by two or more persons not todo business with other individuals, or to dobusiness with them only on specified terms."Balaklaw v. Lovell, 14 F.3d 793, 800 (2dCir.1994) (citation and emphasis omitted).Defendants, however, note in their appellatebrief that the plaintiffs expressly disclaimedthat theory in the district court, explaining

that their claim is "[n]ot technically" a groupboycott but, instead, "a conspiracy [claim] toraise the prices and keep the prices up."Daniel v. American Bd. of Emergency Med.,90-CV-1086A, Tr. at 63 (W.D.N.Y. May 23,2003). In their reply brief, plaintiffs omittedany reference to a group boycott, focusinginstead on a theory of market exclusion. Atoral argument, they explained that, in fact,their theory would depend on the relevantmarket: if the market is defined to includeall emergency physicians, their theory isgroup boycott; if the market is limited toABEM-certified and -eligible physicians,their theory is market exclusion. As noted inthe immediately preceding footnote, on thisappeal, we assume that plaintiffs' narrowermarket definition will prevail. Nevertheless,it makes no difference to our analysis whichmarket definition controls this case norwhether plaintiffs' claims are presented on agroup-boycott or market-exclusion theory.

FN9. Daniel alleged that ABEM violated theNew York Human Rights Law by requiringhim "to submit a photograph with hisapplication to take the test," Compl. ¶ 7,and the Fourteenth Amendment "bysubjecting [him] to arbitrary and capriciousrequirements on a selective basis when thesame are not required of others seeking to bequalified as Diplomates of the AmericanBoard of Emergency Medicine," id. ¶ 13.

FN10. In its second November 19, 1997opinion, the district court rejected both aconstitutional challenge to the service ofprocess provision in Section 12 of theClayton Act and defendant ForsythMemorial Hospital's motion to certify thatquestion for interlocutory appeal. Daniel v.American Bd. of Emergency Med., 988F.Supp. at 144-45. The constitutionalchallenge had prompted the United States'intervention in this action. See 28 U.S.C. §2403(a). This issue is not before us onappeal, nor is the United States.

FN11. The two individual defendants namedin the Second Amended Complaint, Thiedeand Disney, both Rochester, New Yorkresidents, also did not raise jurisdictionaldefenses, see Daniel v. American Bd. ofEmergency Med., 988 F.Supp. at 148 n. 4,but these individuals are not before us on















appeal, as noted supra note 5.

FN12. Apparently, the district court hadconcluded on its consideration ofdefendants' motion to dismiss the FirstAmended Complaint that it had personaljurisdiction over ABEM pursuant to Section12 of the Clayton Act, 15 U.S.C. § 22, aconclusion defendants did not dispute. SeeDaniel v. American Bd. of Emergency Med.,802 F.Supp. at 918-19. ABEM neverobjected to personal jurisdiction in thedistrict court with respect to the SecondAmended Complaint, arguing only thatvenue was improper in the district. SeeDaniel v. American Bd. of Emergency Med.,988 F.Supp. at 197.

FN13. Indeed, while defendants initiallyfiled a cross-appeal raising challenges tointerlocutory rulings by the district court,including its rulings on personal jurisdictionand venue, our court dismissed the cross-appeal as unnecessary. See Powell v.Schriver, 175 F.3d 107, 113 (2d Cir.1999)(concluding that, without cross-appeal,defendant may raise as alternative groundfor affirmance qualified immunity defenserejected by district court).

FN14. To establish venue as to thesedefendants, the plaintiffs apparently reliedon the general venue statute, 28 U.S.C. §1391(b). See infra Part II.B.3.

FN15. While we are disinclined to speculatefrom congressional silence or to affordundue weight to punctuation, we note that itwould have been curious for Congress tohave amended an existing sentenceproviding for expanded venue by inserting,after a semicolon, another sentenceproviding for service of process if the twoprovisions were intended to operateindependently of one another. See WilliamStrunk, Jr. & E.B. White, The Elements ofStyle 6 (4th ed.2000) (observing thatcompound sentence joined by semicolon is abetter way to "suggest[ ] the closerelationship between the two statements"than separate sentences punctuated byperiods).

FN16. Section 27 of the Exchange Act statesin pertinent part:

Any criminal proceeding [under thischapter] may be brought in the districtwherein any act or transaction constitutingthe violation occurred. Any suit or action toenforce any liability or duty created by thischapter or rules and regulations thereunder,or to enjoin any violation of such chapter orrules and regulations, may be brought in anysuch district or in the district wherein thedefendant is found or is an inhabitant ortransacts business, and process in such casesmay be served in any other district of whichthe defendant is an inhabitant or whereverthe defendant may be found.

FN17. The plaintiffs did not argue before thedistrict court, nor do they contend on appeal,that any of the jurisdiction defendants is an"inhabitant" of the Western District of NewYork or may be "found" there. Thus, thesealternative grounds for Section 12 venuehave never been at issue.

FN18. The district court rejected as a basisfor venue, and properly so in our view, theNew York residence of then-ABEMpresident G. Richard Braen and formerboard member and director Henry A.Thiede. See Daniel v. American Bd. ofEmergency Med., 988 F.Supp. at 275. Thereis no claim that these individuals took anyaction at all in New York related to theantitrust claim, let alone any action thatmight constitute a "substantial part of theevents or omissions giving rise to the"antitrust claim. Nor is it alleged that any partof the activities of CORD or the hospitaldefendants alleged to give rise to theantitrust claims occurred in New York.

FN19. Section 4 states in pertinent part:[A]ny person who shall be injured in hisbusiness or property by reason of anythingforbidden in the antitrust laws may suetherefor in any district court of the UnitedStates in the district in which the defendantresides or is found or has an agent, withoutrespect to the amount in controversy, andshall recover threefold the damages by himsustained, and the cost of suit, including areasonable attorney's fee. 15 U.S.C. § 15(a).

FN20. Section 16 states in pertinent part: Any person, firm, corporation, or association





















shall be entitled to sue for and haveinjunctive relief, in any court of the UnitedStates having jurisdiction over the parties,against threatened loss or damage by aviolation of the antitrust laws .... 15 U.S.C. § 26.

FN21. We note, but need not here discuss,defendants' statistical showing that thesupply of doctors eligible to take the ABEMcertification exam has, in fact, grown byseveral multiples between the closing of thepractice track in 1988, a year in which 367doctors entered residency training programs,and 1999, a year in which 1,039 doctorsgraduated from such training programs.

FN22. At oral argument on appeal,plaintiffs' counsel indicated that his clientsdo not, in fact, question ABEM's right tolimit its certification to doctors who havecompleted residency training programs, asignificant concession because that decisionhad appeared to be the critical factorsupporting their claim of restraint on trade.Counsel explained that plaintiffs assert thatABEM, by offering a practice-track optionfor certification--but only for eight years--restricts competition between those doctorswho qualified for ABEM certification underthe practice track and those who no longerhave that option. Carried to its logicalconclusion, plaintiffs' argument wouldrequire ABEM to maintain a practice trackalternative in perpetuity. When asked aboutthat possibility, however, counsel concededthat, at some future point, presumably afterplaintiffs also acquired ABEM certification,it would be appropriate to close the practicetrack. This suggests that plaintiffs' complaintis not about the qualification restrictionsABEM puts on doctors wishing to sit for itscertification examination. It is not evenabout the propriety of a practice-track optionto allow competition with doctors whoacquire ABEM certification after residencytraining. Instead, plaintiffs' case reduces to adispute about when ABEM could retire thepractice-track option. But now here in therecord do plaintiffs demonstrate that it waspremature for ABEM to retire the practicetrack in 1988 (after giving medical studentsand doctors eight years' notice), much lessdo plaintiffs show that they suffered anyantitrust injury from closure at this time

rather than at some later date that wouldallow them entry into the purported ABEMcartel.

FN23. Ertag v. Naples Cmty. Hosp., No. 95-3134, slip op. at 2 (11th Cir. Aug. 1, 1997)(unpublished), an unpublished decision ofthe Eleventh Circuit relied on extensively byplaintiffs, similarly involves plaintiffs whosought to end the allegedly anticompetitivepractice at issue, not to join it.

FN24. For example, if as ABEMdiplomates, plaintiffs could, in fact,command $50,000 more in annualremuneration (the difference identified intheir complaint between themselves andABEM-certified counterparts), see SecondAm. Compl. ¶ 104, then the total cost toconsumers (hospitals, patients, and insurers)of emergency medical care would increase,a result of no interest to antitrust law. Evenif plaintiffs' entry into the ABEM marketresulted in a decrease in the pay presentlycommanded by certified doctors but anincrease in plaintiffs' pay, that would notnecessarily translate into a total cost savingsfor consumers. As the magistrate judgeobserved with respect to plaintiffs' pleadedtheory of injury: "the economic complexitiesof the health care services market, includinga high degree of government regulation andfinancial involvement," require"sophisticated economic analysis" todetermine if "the normal laws of supply anddemand can even be applied" in this case.Daniel v. American Bd. of Emergency Med.,269 F.Supp.2d at 182-83. The sameconclusion applies to plaintiffs' proposedamended theory of injury. Careful economicanalysis is necessary to determine theoverall competitive effect and consumerbenefit from an action that would move asignificant number of doctors-- namely, theplaintiffs--out of one product market, wherephysicians not certified by ABEM provideemergency medical care for modestcompensation, into another market, where alimited number of ABEM-certified doctorscharge significantly higher rates foressentially the same services.

FN25. Of course, not all exclusions areviolations of the Sherman Act. See, e.g.,White Motor Co. v. United States, 372 U.S.









253, 263, 83 S.Ct. 696, 9 L.Ed.2d 738(1963) (stating that vertical territoriallimitations "may be allowable protectionsagainst aggressive competitors or the onlypracticable means a small company has forbreaking into or staying in business" andhence permissible under the antitrust laws);Angelico, 184 F.3d at 276 n. 3 (stating in ahealth care exclusion case that "[g]roupboycotts or concerted refusals to deal are notalways per se violations of the Sherman Act;rather, the analysis turns on the facial effectsof the challenged practice."); Retina Assocs.,P.A. v. Southern Baptist Hosp., 105 F.3d1376 (11th Cir.1997) (holding that a referralagreement between non-specializedophthalmologists and a retina specialist,under which the plaintiffs, retina specialists,received virtually no referrals, was neitherper se unreasonable nor illegal under therule of reason analysis).

FN26. Moreover, such questions simplycannot be resolved without significantadditional discovery, a fact that the majorityopinion seems to acknowledge, when itstates that "[c]areful economic analysis isnecessary to determine the overallcompetitive effect and consumer benefitfrom" permitting non-ABEM-certifiedemergency medicine physicians to becomeABEM-certified. Majority Op. at 65 n.24.

FN27. Indeed, at least one commentator hasconcluded "[t]he Todorov court's approachto antitrust injury was wrong," because theantitrust injury question does not require theinvolved economic analysis engaged in byTodorov, analysis that is more relevant "toantitrust liability, to causation, and todetermining the amount of damages."Ronald W. Davis, Standing on ShakyGround: The Strangely Elusive Doctrine ofAntitrust Injury, 70 Antitrust L .J. 697, 750(2003).

FN28. It is worth noting that were we totransfer this case, we would presumablytransfer it the Western District of Michigan,where ABEM is located, and where theplaintiffs' applications were denied. BecauseMichigan is in the Sixth Circuit, if thePotters facts relating to antitrust standing areessentially similar to those here, as I believethey are, Potters would control.

--- F.3d ----, 2005 WL 2470530 (2nd Cir.(N.Y.))

Briefs and Other Related Documents (Back to top)

• (Appellate Brief) Brief of Defendants-Appellees(Aug. 20, 2004)Original Image of this Document(PDF)

• (Appellate Brief) Reply Brief of Plaintiffs-Appellants (Aug. 20, 2004)Original Image of thisDocument (PDF)

• (Appellate Brief) Brief of Plaintiffs-Appellants(May. 04, 2004)Original Image of this Documentwith Appendix (PDF)

• 03-6177 (Docket)(Aug. 12, 2003)

• 03-6185 (Docket)(Aug. 12, 2003)

• 03-6187 (Docket)(Aug. 11, 2003)

• 03-6167 (Docket)(Aug. 07, 2003)

• 03-6157 (Docket)(Aug. 05, 2003)

• 03-6163 (Docket)(Aug. 05, 2003)

• 03-6165 (Docket)(Aug. 05, 2003)

• 03-6153 (Docket)(Jul. 22, 2003)

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(Cite as: 2005 WL 2470530 (2nd Cir.(N.Y.))) - Jones · PDF file(Cite as: 2005 WL 2470530 (2nd...

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