The Federal Trade Commission (“FTC”), in a joint amicus brief with the Department of Justice filed on September 9, 2016, petitioned the Fifth Circuit to dismiss the Texas Medical Board (“TMB”) appeal of the district court ruling holding that TMB regulations restricting the prescribing rights of physicians providing professional services through telemedicine may be challenged under federal anti-trust laws.  The FTC asserted that the appellate court does not have jurisdiction over the issue because there has been no final judgment in the underlying case between Teladoc and the TMB.

Teladoc, a Texas-based telehealth provider, filed the initial complaint alleging that the TMB, in adopting rules dramatically restricting telehealth services in Texas, violated federal antitrust laws.  The TMB filed a motion asking for the suit to be dismissed on the grounds that the TMB is a state agency, and pursuant to the state action doctrine, it is therefore immune to suit.  The judge denied the TMB’s motion to dismiss the suit, stating that the state action doctrine does not apply since the TMB is not actively supervised by the state.

The TMB immediately appealed the order citing the collateral order doctrine, but the FTC argued that the collateral order doctrine only applies to a small class of rulings that satisfy stringent conditions, and the lower court’s refusal to dismiss the suit does not satisfy those conditions.  That class consists of rulings that are appropriately deemed final, too important to be denied review and too independent of the cause to require that an appeal wait until final disposition of the case.  The FTC stated that because the state action doctrine doesn’t create a right to avoid trial, the ruling can be reviewed on appeal from a final judgment.

The FTC furthered argued that if the court does find that it has jurisdiction, however, “it should hold that the state action doctrine does not shield the TMB’s rules from federal antitrust scrutiny because the TMB did not carry its burden to show active supervision.”  “There is no evidence that any disinterested state official reviewed the TMB rules at issue to determine whether they promote state regulatory policy rather than TMB doctors’ private interests in excluding telehealth – and its lower prices – from the Texas market.”

Teladoc Incorporated et al. v. Texas Medical Board et al