More than 180 years ago, Sam Houston, then commander-in-chief of the army of Texas, employed a strategic retreat to regroup after the fall of the Alamo to the Mexican army. His tactic resulted in victory at the Battle of San Jacinto and saved the effort for Texan independence.
On Oct. 14, the Texas Medical Board appeared to engage in
the same strategy in an effort to save its rules on telemedicine. The board
voluntarily dismissed its appeal in the U.S. Court of Appeals for the Fifth
Circuit challenging a court order that refused to acknowledge the board’s claim
for immunity from
the federal antitrust laws.
The case involves rules issued by the board requiring an
in-person consultation before a physician can prescribe certain drugs. Teladoc
Inc., one of the nation’s largest telemedicine providers, sued in federal
court, saying the board’s rules were an attempt by the physicians on the
board to eliminate competition from telemedicine providers in violation of the
Sherman Act and the Commerce Clause of the U.S. Constitution.
The board claimed that it was immune from the antitrust laws
because it was a Texas agency and sought to
dismiss the case. The judge disagreed, saying
board wasn’t sufficiently supervised by the state to qualify for state action immunity. The board immediately
appealed the order and the trial court put the case on hold while the Fifth Circuit
considered the appeal.
A large number of interested parties—
the Federal Trade Commission and the Department of Justice’s Antitrust Division— filed
friend of the court briefs questioning whether the board had used the proper
procedural method of bringing the appeal. Alternatively, the parties urged the
appeals court to find that the trial court was right in ruling that the board
hadn’t shown it was immune as a matter of law.
The board then dropped its appeal, which now restarts the
case in the trial court. In explaining why the board decided to drop the
appeal, the board’s interim executive director indicated that it was a
strategic retreat. He said
the board intended to defend not
only the legitimacy of its telemedicine rules, but also the application of
state action immunity to its decisions. It will be interesting if the strategy
works and the board is able to regroup and defend its rules.
Read my full story about the development at http://src.bna.com/jvw.
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