Neo Gen Screening v. New England Newborn Screening

• Decision Date: 07 June 1999
• Docket Number: No. 99-1100,99-1100
• Citation: 187 F.3d 24
• Parties: (1st Cir. 1999) NEO GEN SCREENING, INC., Plaintiff, Appellant, v. NEW ENGLAND NEWBORN SCREENING PROGRAM, d/b/a NEW ENGLAND REGIONAL NEWBORN SCREENING PROGRAM, UNIVERSITY OF MASSACHUSETTS, UNIVERSITY OF MASSACHUSETTS MEDICAL CENTER, HOWARD KOH, RALPH TIMPERI, Defendants, Appellees. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 24

187 F.3d 24 (1st Cir. 1999)

NEO GEN SCREENING, INC., Plaintiff, Appellant, v. NEW ENGLAND NEWBORN SCREENING PROGRAM, d/b/a NEW ENGLAND REGIONAL NEWBORN SCREENING PROGRAM, UNIVERSITY OF MASSACHUSETTS, UNIVERSITY OF MASSACHUSETTS MEDICAL CENTER, HOWARD KOH, RALPH TIMPERI, Defendants, Appellees.

No. 99-1100.

United States Court of Appeals for the First Circuit.

Heard June 7, 1999.

Decided July 14, 1999.

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS

Kenneth P. McKay with whom Law Offices of K. Patrick McKay was on brief for appellant.

Jane L. Willoughby, Assistant Attorney General, with whom Thomas F. Reilly, Attorney General, was on brief for appellees.

Before Boudin, Circuit Judge, Campbell, Senior Circuit Judge, and Lipez, Circuit Judge.

BOUDIN, Circuit Judge.

The present appeal arises out of a federal antitrust case dismissed by the district court on the ground that it was barred by the Eleventh Amendment. We assume to be true, for purposes of this appeal, the facts as alleged in the complaint. Duckworth v. Pratt & Whitney, Inc., 152 F.3d 1, 3 (1st Cir. 1998). However, the district court also considered, as do we, uncontroverted facts furnished by affidavit pertaining to the status of the defendants under the Eleventh Amendment.

The plaintiff-appellant in this case is Neo Gen Screening, Inc., a private, for-profit Pennsylvania corporation whose business is the medical screening of newborn children. In Massachusetts, as elsewhere, newborns must be tested for specified diseases, some of which can be remedied if promptly detected. Mass. Gen. Laws ch. 111, §§ 4E, 110A; see also id. §§ 3, 5, 6. According to the complaint, Neo Gen provides hospitals in various states with screening services to detect disorders in newborns but is being prevented by the defendants from doing so in Massachusetts.

The principal defendants named in the complaint as currently amended are the University of Massachusetts, a not-for-profit corporation linked to the state through governance and financing, its New England Newborn Screening Program ("the Screening Program"),¹ and two individuals--Howard Koh and Ralph Timperi--who are or were respectively the Commissioner of the Massachusetts Department of Public Health and an Assistant Commissioner responsible for laboratory testing. Several other defendants were named in the original complaint but later dismissed by consent.

The original complaint was filed on March 5, 1998, and contained eleven counts; but it was thereafter amended and reduced to two counts, the second of which was later voluntarily withdrawn. The remaining count (count I) is subcaptioned: "PLAINTIFF CORPORATION VS. DEFENDANTS NENSP AND UMASS VIOLATION OF THE SHERMAN ANTI-TRUST LAWS."; and it expressly charges the Screening Program and University of Massachusetts, in concert with the Massachusetts Department of Public Health, with monopolizing, attempting to monopolize and/or conspiring to monopolize "newborn screening services" in Massachusetts and surrounding states.

Although there are some collateral allegations, the main thrust of count I is an attack on the University of Massachusetts for seeking and obtaining a monopoly in the provision of the newborn screening services in Massachusetts. The only relief sought by the complaint is injunctive relief, apart from attorneys' fees, and the injunctive relief sought includes a request to bar the Commissioner and Assistant Commissioner from issuing permanent regulations that maintain the screening program's monopoly over the provision of the testing services in question. The complaint provides a history, which can be summarized briefly, as to how the supposed monopoly came about.

The Screening Program, a collection of personnel and a laboratory, had at one time been a unit of the Department of Public Health. At some point in the 1980s, the Screening Program was taken over by Tufts University and later, beginning in 1997, by the medical school of the University of Massachusetts. The Screening Program currently operates, under a contract between the University of Massachusetts and the Department of Public Health, to provide screening for specified disorders of newborn infants. A blood sample is taken by the hospital where the child is delivered and submitted to the Screening Program for testing, and a charge is paid by the hospital to the Screening Program.

In the fall of 1997, Neo Gen set about trying to persuade Massachusetts hospitals to let Neo Gen screen their newborns. It solicited hospitals in Massachusetts and purported to offer more modern, comprehensive screening at half the fee charged by the Screening Program. According to the complaint, the University of Massachusetts and its Screening Program responded by seeking adoption of regulations by the Department of Public Health that would give the Screening Program a monopoly in the provision of screening services in Massachusetts.

The complaint charges that the Screening Program "influenced" the Department of Public Health to issue emergency regulations that required testing for nine diseases and required that the blood samples be submitted to the Department itself. See 105 C.M.R. 270.000 et seq.. Also appended to the complaint is a contract entered into between the Department of Public Health and the University of Massachusetts requiring the latter to provide newborn screening laboratory work, clinical follow-up and research services. The proposed regulations were adopted on an emergency basis in November 1997, accompanied by statements that the Department of Public Health would thereafter study the possibility of allowing other entities to perform the screening.

The defendants moved to dismiss the amended complaint as barred by the Eleventh Amendment, asserting as well that the complaint failed to state a claim under the federal antitrust laws and was barred by various antitrust doctrines. In a decision issued on December 3, 1998, the district court held that the only claim remaining in the case was count I, that this count was directed against the University of Massachusetts and the Screening Program, and that both entities were arms of the state and were entitled to dismissal under the Eleventh Amendment. This appeal followed.

Under the Eleventh Amendment, a state or an arm of the state is normally immune from suits by citizens in federal court, Edelman v. Jordan, 415 U.S. 651, 662-63 (1974); see Chemerinsky, Federal Jurisdiction § 7.4, at 403 (3d ed. 1999), unless the state waives its immunity, Idaho v. Coeur d'Alene Tribe of Idaho, 521 U.S. 261, 267 (1997), or Congress overrides that immunity as it may do in limited situations, Seminole Tribe v. Florida, 517 U.S. 44, 57-68 (1996). Neo Gen has not argued either that there was any waiver of Eleventh Amendment immunity by defendants or any abrogation of that immunity by Congress.

Whether and when state universities are arms of the state for Eleventh Amendment purposes have long vexed the federal courts. The multi-part tests that we have used are not easy to apply,² and, confusingly, overlap but do not quite duplicate tests that determine whether a university is an independent entity for purposes of diversity jurisdiction. Cf. University of Rhode Island v. A.W. Chesterton Co., 2 F.3d 1200, 1202-05 (1st Cir. 1993). A number of decisions have held that individual state universities are arms of the state for Eleventh Amendment purposes, but the inquiry tends to turn on facts peculiar to each university, and there are cases denying protection. See Chemerinsky, supra, § 7.4, at 407 & nn.33-34 (collecting cases).

In its decision under review, the district court explicitly found that the University in conducting the Screening Program was "acting as an agency or arm of the Commonwealth of Massachusetts." It rested this legal conclusion on a detailed discussion of the University's mission, its governance, its financial relationship to the state and similar matters. Its conclusion that the University is an arm of the Commonwealth accords with the view of another district court involving the University of Massachusetts. Daniel v. American Board of Emergency Medicine, 988 F. Supp. 127, 178-81 (W.D.N.Y. 1997).

On this appeal, Neo Gen has effectively failed to dispute the district court's holding that the University and its Screening Program are covered by the Eleventh Amendment. Since that ruling is at least colorable and certainly not plain error, cf. Beatty v. Michael Business Machines Corp., 172 F.3d 117, 121 (1st Cir. 1999), we treat the dismissal of the case against these two defendants as conceded. However, Neo Gen argues that Koh and Timpari were also intended defendants in count I and that despite the Eleventh Amendment these state officials are subject to injunctive relief under the doctrine of Ex Parte Young, 209 U.S. 123 (1908).

Ex Parte Young is one of several major qualifications on Eleventh Amendment immunity. Chemerinsky, supra, §§ 7.5-7.7, at 411-46. Ignoring some refinements, the doctrine removes the Eleventh Amendment bar where the private suit is directed not against the state or a state agency eo nomine but instead against state officials acting in violation of federal law and where (in addition) retrospective damages or property transfers are not sought for official acts. Coeur d'Alene Tribe, 521 U.S. at 269, 277-80; Strahan v. Coxe, 127 F.3d 155, 166-67 (1st Cir. 1997), cert. denied,--- U.S. ---, 119 S. Ct. 81 (1998); Chemerinsky, supra, at § 7.5, at 411-30. This exception is Neo Gen's main argument on this appeal.

The Commonwealth replies that the claims in count I were asserted only against the University of Massachusetts and the Screening Program and that no relief was sought under that count against the two named state officers. That is certainly what the district court thought, and its view is supported by the subcaption of the count (quoted above), which referred to those institutional d...