UNC and Duke fight lawsuit

Defendants in a lawsuit accusing Duke and UNC of an antitrust violation have fired back against allegations made this summer.

Dr. Danielle Seaman, assistant professor at Duke University School of Medicine, filed a class-action lawsuit against Duke University, Duke University Health System and Dr. William Roper, dean of the UNC School of Medicine in August. The suit purported a no-hire agreement between Duke and UNC Schools of Medicine that suppressed healthy competition among faculty.

Defendants filed a motion to dismiss Oct. 15, claiming immunity from the lawsuit on the basis that UNC acted within its rights as an agent of the state, and therefore isn't subject to litigation. Seaman will need to file her response by Nov. 30.

Duke, Duke Health and Roper declined to comment. 

"Anticompetitive conduct by UNC was exempt from the Sherman Act under the doctrine of state-action immunity because UNC is a state representative that acts for the state of North Carolina in its sovereign capacity. That decision governs here, and Dr. Seaman's claims therefore fail as a matter of law," according to the brief filed by Roper.

Daniel Crane, professor at the University of Michigan Law School, said while the immunity claim could be reasonable, it's not without its flaws.

"It's not enough to be an actor for the state — you also have to show that the state legislature has affirmatively and expressly authorized the policy and it's being adequately supervised by state actors," he said. "They basically say the state has authorized UNC Hospitals to weigh in on personnel decisions — that is a far cry from saying the state has authorized the hospital to collude with a private hospital on anti-poaching agreements."

Duke and Duke Health claim immunity on slightly different grounds, according to the brief they filed, also on Oct. 15.

"Dr. Seaman's claims fail because the alleged no-hire agreement falls squarely within the Parker state action doctrine, which affords immunity from the antitrust laws to certain state actions, including agreements with private parties. If there were an agreement between UNC and Duke of the kind alleged, the state action doctrine would afford immunity to both parties' conduct in entering into and implementing that agreement," according to the brief.

The Parker doctrine referenced by Duke comes from a Supreme Court case called Parker v. Brown, that holds when a state is acting in its sovereign regulatory capacity, the same protection can extend to private parties involved, Crane said.

"I would be very surprised if that applies in a basically collusion context, where a state hospital and a private entity are engaging in conduct which would otherwise be illegal under antitrust laws, and one of them says, 'Well, because the other one is allowed to do it, I get immunity as well,' — I do not believe that is the law," he said.

Such a motion to dismiss can be expected in these kinds of suits. During this state of litigation, defendants make every kind of argument possible to have the case dismissed by the court. 

If the case proceeds to the fact-finding, or discovery stage — which could happen around Christmas — the judge can require UNC and Duke to produce key witnesses and turn over relevant evidence, at which point legal teams on both sides will trade arguments.

"It's difficult to say whether a motion will be successful," Crane said. "I do think there are vulnerabilities on this motion in the position laid out — we'll see in the response from the plaintiffs."

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