Texas Medical Board Drops Appeal in Teladoc Case

The Texas Medical Board (TMB) has ended its challenge to a federal court’s ruling last December that denied its motion to dismiss Teladoc’s antitrust claims against the board. The district court had determined that the TMB was not immune to federal antitrust laws, and the board appealed to the U.S. Court of Appeals for the 5th Circuit. The TMB withdrew that appeal on Monday, Bloomberg BNA reports.

The TMB has forcefully opposed Teladoc’s lawsuit, which the telehealth provider brought in 2015, alleging that the board’s telemedicine rules violate federal antitrust laws. The TMB maintains that the board is a state actor and is therefore immune from complying with federal antitrust laws like the Sherman Act.

The case now returns to the U.S. District Court in Austin, Texas, where the TMB is expected to continue to assert its state-action immunity argument as a defense against Teladoc’s antitrust claims.

The TMB’s appeal was unusual in that most appeals are filed after a lawsuit concludes.  As a Modern Healthcare article on the appeal notes, mid-stream appeals like the Board’s request for the 5th Circuit to overturn the district court’s denial of its motion to dismiss are rarely granted.

CTeL News reported in September that the U.S. Department of Justice and the Federal Trade Commission (FTC) had jointly filed a friend-of-the-court brief with the 5th Circuit supporting Teladoc’s position. The brief also indicated that the FTC is investigating the Texas Medical Board for possible antitrust violations.

Modern Healthcare reports that Teladoc’s chief legal officer, Adam Vandervoort, said the Texas Medical Board’s outgoing executive director, Mari Robinson, called the decision to withdraw “purely strategic.” “The Texas Medical Board evidently withdrew its appeal because it didn’t want to suffer a ninth loss to Teladoc in the courts,” he said.

Indeed, Scott Freshour, interim executive director of the Texas Medical Board made clear that the board’s decision to drop the appeal does not reflect a change in policy or position: “The regulation of medicine is a right reserved for the states, and the board stands behind and will seek future vindication of its state-action immunity for performing the duties assigned it by the Texas Legislature. The board’s commitment to the defense of its telemedicine rule and its immunity from federal regulation remains firmly intact.”



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