Alabama Optometric Ass'n v. Alabama State Bd. of Health, Civ. A. No. 74-120-N.

• Decision Date: 26 July 1974
• Docket Number: Civ. A. No. 74-120-N.
• Citation: 379 F. Supp. 1332
• Parties: ALABAMA OPTOMETRIC ASSOCIATION et al., Plaintiffs, v. The ALABAMA STATE BOARD OF HEALTH et al., Defendants.
• Court: U.S. District Court — Middle District of Alabama

379 F. Supp. 1332

ALABAMA OPTOMETRIC ASSOCIATION et al., Plaintiffs, v. The ALABAMA STATE BOARD OF HEALTH et al., Defendants.

Civ. A. No. 74-120-N.

United States District Court, M. D. Alabama, N. D.

July 26, 1974.

COPYRIGHT MATERIAL OMITTED

Robert D. Segall, Hobbs, Copeland, Franco & Screws, Montgomery, Ala., for plaintiffs.

Champ Lyons, Jr. and Herman H. Hamilton, Jr., Montgomery, Ala., for State Board of Health; Robinson; Chenault; Burleson; Bush; Crowe, Grote; Hamrick; Hutchinson; Lightcap; Nelson; Strandell; White; and Yohn Also James T. Pons, Asst. Atty. Gen. of Ala., Montgomery, Ala., is co-counsel for these Defendants.

John T. Mooresmith, Gen. Counsel, James J. Carter, Hill, Hill, Carter, Franco, Cole & Black, Montgomery, Ala., for Medical Ass'n of State of Alabama.

ORDER

VARNER, District Judge.

This cause is now submitted upon the Defendants' various motions to dismiss; on the Plaintiffs' motion for leave to amend the complaint filed herein May 22, 1974; and on the Plaintiffs' motion to dismiss their fourth cause of action without prejudice filed herein June 7, 1974.

By agreement of the parties, the Plaintiffs Grice and Glober and the class they represent will be dismissed from causes of action No. 1, 2 and 3. By agreement of the parties, Plaintiffs Bingham, Crosby and Himburg and the class they represent will be dismissed from cause of action No. 5.

The Plaintiffs' motion to dismiss the fourth cause of action without prejudice and Plaintiffs' motion for leave to amend the complaint will be granted.

The Defendants collectively attack the substantive validity of the first cause of action, which alleges a violation of the federal antitrust laws, 15 U.S.C. § 1 et seq. Specifically, the Defendants contend that the cause does not allege an interference with "trade or commerce" within the meaning of the Sherman Anti-Trust Act. In support of this contention, Defendants cite Goldfarb v. Virginia State Bar, 497 F.2d 1, (4th Cir., 1974), which concludes that the legal profession is not engaged in "trade or commerce" within the meaning of the Sherman Act. Analogy is drawn from the Goldfarb case to the present case dealing with a variety of eye care services. Defendants argue that the learned practice of eye examination is as a matter of law not "trade or commerce".

The Plaintiffs contend that we are dealing, not with a confined area of medical services, but with a "multi-faceted federal health program" involving numerous services and that, while the Supreme Court failed to decide whether or not the practice of medicine involves "trade or commerce" in United States v. Oregon State Medical Society, 343 U.S. 326, 72 S.Ct. 690, 96 L.Ed. 978 (1958), it has decided that a "group health" service of a nature similar to that in question does involve "trade or commerce", American Medical Association v. United States, 317 U.S. 519, 63 S.Ct. 326, 87 L.Ed. 434.

This Court is of the opinion that the heart of this case lies in the effect of the medicare-medicaid program which is national and, therefore, interstate in its scope. Additionally, the optometrists in question are, allegedly, engaged in the sale and distribution of eye wear, and as retailers, they are involved in "trade or commerce" within the meaning of the Sherman Act. Trade as used in the antitrust laws denotes "the purchase or barter and sale of goods, wares and merchandise, either at wholesale or retail." United States v. Debs, 7 Cir., 64 Fed. 724; Vol. I, Toulmin's Antitrust Laws, § 6.5 (1949).

The Defendants point out that the complaint fails to properly allege in the first cause of action that the Defendants' acts caused an unreasonable restraint on interstate commerce. This fallacy has been corrected by amendment. The parties agree that the allegations of interstate commerce involvement are not subject to attack by motion to dismiss and that evidence must be elicited before a determination as to the sufficiency of the allegations can be made. Therefore, it appears that the substantive antitrust allegations support a claim for relief.

The Defendants attack each and every cause of action on the ground that the Plaintiffs allegedly failed to file this suit within the time allowed by the statute of limitations. The acts complained of, however, allegedly began some years ago and are continuing in nature. The statute of limitations does not act as a bar to this lawsuit. 54 C.J.S. Limitation of Actions § 169. Whether or not limitations may be a defense against certain damages remains to be determined.

The Defendant Medical Association moves for dismissal for failure to state a claim against it. The gravamen of Counts I and II of the complaint is that the Medical Association and others conspired in a scheme to deprive the Plaintiffs of their rights to provide or to participate in medical benefits available under medicaid. A corporation may be guilty of conspiracy, and the guilty intent of corporate officers may be imputed to the corporation to prove its guilt. Mininsohn v. United States, 3 Cir., 101 F.2d 477; Joplin Mercantile Co. v. United States, 8 Cir., 213 F. 926, affm'd. 236 U.S. 531, 35 S.Ct. 291, 59 L. Ed. 705. The first and second causes of action alleging conspiracy by the Medical Association to violate federal antitrust laws and in violation of State monopoly statutes do state claims against the Medical Association. The Plaintiffs agree that the third cause of action, alleging violation of Code of Alabama, Title 49, § 32(8), does not state a claim against the Medical Association or its Board of Censors and should be dismissed as to them. The fifth and sixth causes of action, alleging violation of the Plaintiffs' civil rights pursuant to 42 U.S.C. § 1983, will be dismissed as to the Medical Association. A corporation is not a "person" within the meaning of 42 U.S.C. § 1983. Booth v. General Dynamics Corp., 264 F.Supp. 465 (D.C. 1967); Sellers v. Regents of the University of California, a corp., 432 F.2d 493 (9 Cir., 1970); Moor v. County of Alameda, 411 U.S. 693, 93 S.Ct. 1785, 36 L. Ed.2d 596. For the same reason, the Defendants Board of Health and Board of Censors, not being persons as such, should be dismissed as Defendants as to the fifth and sixth causes of action.

The individual members of the Board of Censors of the Medical Association in their official capacity move for dismissal in their official capacity on the ground that the complaint fails to state a claim upon which relief may be granted. While it may be that the burden of proof will be quite difficult to meet¹, the complaint should not be dismissed unless it appears beyond doubt that the Plaintiffs can prove no set of facts in support of their claim which would entitle them to relief. Conley v. Gibson, 355 U.S. 41, 78 S.Ct. 99, 2 L. Ed.2d 80. This ground for motion to dismiss is not available. Each cause of action states a claim upon which the Plaintiffs are entitled to offer proof.

The Defendants move to dismiss the Alabama Optometric Association as a party Plaintiff on the ground that any rights asserted by said Plaintiff are merely cumulative of those asserted by the individual Plaintiffs. As a general rule, associations have standing to sue whenever they or their members are injured. Association of Data Processors, Inc. v. Camp, 397 U.S. 150, 90 S.Ct. 827, 25 L.Ed.2d 184. The Alabama Optometric Association is an organization of many years standing, which was established to promote, not only the interests of its members, but also the optometric profession generally. In this context, the Alabama Optometric Association represents the interests of prospective optometrists, as well as the interests of its present members, and in this capacity, it has standing to bring this suit.²

All of the Defendants, who are officials of the State of Alabama, including the Alabama State Board of Health, have filed motions to dismiss grounded on their official immunity. In considering the official immunity defenses claimed by Defendant officials, it is necessary that the Court examine the nature of the claims made against these Defendants and how the alleged infringements relate to the official duties of the Defendants in the light of general principles of immunity.

No official is here charged with vicarious liability, nor may he be, Moor v. County of Alameda, supra. It must also be remembered that a State may give its consent to be sued. The Supreme Court of Alabama in Aland v. Graham, 287 Ala. 226, 250 So.2d 677, recognized that Alabama has consented to be sued to compel performance by a public official of a public duty, to enjoin enforcement of an unconstitutional law, and to construe or apply statutes or rules by declaratory judgment. As pointed out in Edelman v. Jordan, 415 U.S. 651 at 673, 94 S.Ct. 1347, 1361, 39 L.Ed.2d 662 (1974), the mere fact that a State participates in a federal public aid program is not sufficient to establish its consent to be sued in the federal courts. It, therefore, appears that the officials and the State Committee of Public Health are not immune to suit for an injunction or declaratory relief.

Each of the Defendants is charged in Count I with a violation of federal antitrust laws. While some of the alleged acts complained of appear to be within the scope of the authority of the officials, the parties should have an opportunity to offer evidence thereon as the facts pertinent thereto appear to be in conflict at this stage of the pleadings.

Count II involves an alleged restraint or attempted restraint of the eye care trade and, insofar as the pleadings show, may or may not involve acts within the scope of the official authority of any Defendant.

Count III, in substance, complains that the Defendants set lesser fees for medicaid services by optometrists than for similar services by medical doctors. This setting of fees is allegedly in violation of Code of Alabama, Title 49, § 32(8). The setting of fees is allegedly an administrative function of the...