[00:00:02] Speaker ?:
19-706 Samuel Pierce, Appellate versus Yale University at L. Mr. Pierce is an Appellate.

[00:00:09] Speaker ?:
Mrs. Stimple for the Appellate.

[00:00:33] Speaker 00:
Let's wait till the courtroom clears.

[00:00:55] Speaker 02:
All right, Mr. Pierce, good morning.

[00:00:56] Speaker 00:
Good morning, Your Honors.

[00:00:57] Speaker 00:
May it please the Court?

[00:00:59] Speaker 00:
I first wanted to note an important development that's occurred since the close of briefing in this case related to law in this area.

[00:01:09] Speaker 00:
On September 28, 2019, the Wall Street Journal reported that college admissions group votes to allow more aggressive student recruiting.

[00:01:19] Speaker 00:
Changes come amid threat of continual legal action by the Justice Department.

[00:01:24] Speaker 00:
One of the major changes in the undergraduate admissions policy covered by this vote eliminated a section that discouraged pursuing students after May 1.

[00:01:38] Speaker 00:
And this incident case concerns the medical school's policy.

[00:01:44] Speaker 00:
The medical school's May 1 policy is far more restrictive for students because it has an actual enforcement mechanism, among other reasons.

[00:01:53] Speaker 00:
an actual electronic cross-check that should make it even more vulnerable to antitrust liability than the undergraduate case.

[00:02:02] Speaker 01:
In the medical school.

[00:02:03] Speaker 01:
Can I ask you just the mechanics of your theory of conspiracy here?

[00:02:11] Speaker 01:
So you say the conspiracy is the schools are sharing information

[00:02:19] Speaker 01:
about where candidates, where else candidates are admitted.

[00:02:24] Speaker 01:
So Yale knows that a lot of their candidates are also admitted to Harvard and a lot of them may go to Harvard so they take that into account.

[00:02:38] Speaker 01:
Why would it be the case that if

[00:02:44] Speaker 01:
If Yale Medical School wants 80 students per year and they lack the information that they're getting pursuant to what you say is the antitrust conspiracy, why would they admit way more people?

[00:03:03] Speaker 01:
Why wouldn't they just proceed more cautiously and do rolling admissions if they're in a world

[00:03:13] Speaker 01:
of uncertainty and they want 80 people, they just adjust the timing of the admissions offers to end up with 80 people.

[00:03:29] Speaker 00:
By not having a market where it's competitive and you don't know what your competitors are doing, you have to be more cautious in the sense that you have to admit more people.

[00:03:40] Speaker 00:
Because it may be the case that everybody Yale has admitted has also gone to Harvard or gotten into Harvard and gotten into Penn.

[00:03:48] Speaker 00:
And that those schools, most of all of the students would prefer to attend another university.

[00:03:55] Speaker 01:
And in fact, it's hard to imagine that

[00:03:57] Speaker 01:
You know, medical school can't fill 80 slots.

[00:04:01] Speaker 00:
Well, exactly, but they can, but instead of extending 400 offers of admission, they might have to extend 800.

[00:04:10] Speaker 00:
And I think that's actually not unreasonable at all because

[00:04:13] Speaker 00:
the yield rate already for Yale School of Medicine is around 20%.

[00:04:17] Speaker 00:
So for every five offers that they send out, only one of those students chooses Yale already.

[00:04:25] Speaker 00:
So by having a relatively small expansion, by having the yield rate go down by a relatively small amount, you're still a significant number more students are going to be admitted every year to Yale.

[00:04:41] Speaker 00:
And so I think that it's also the fact that the universities have to plan more capacity based on the uncertainty.

[00:04:51] Speaker 00:
Because if they don't know how many students are going to choose their offer, then they might have to plan more of a buffer.

[00:04:58] Speaker 00:
So they're going to end up admitting 90.

[00:05:00] Speaker 00:
Or they may end up with a class of 90 instead of 80.

[00:05:03] Speaker 00:
And they're more likely to end up with that.

[00:05:07] Speaker 00:
So I think that's the reason that they end up

[00:05:10] Speaker 00:
they end up admitting significantly more.

[00:05:12] Speaker 00:
And as I've suggested in the briefing, even if it's one more, which certainly wouldn't seem to be a stretch, just as an extra buffer in an environment where you don't know what your competitors are doing, that should be still enough to state a cause of action.

[00:05:32] Speaker 00:
So that's why I think that there's a definite predictable effect on the overall number of acceptances, that it's gonna be way up.

[00:05:41] Speaker 01:
One more question, a legal question, which is if we accept the distinction in the case law between educational judgments and economic judgments, why is the decision

[00:06:01] Speaker 01:
of Yale Medical School regarding how large a class size to have.

[00:06:07] Speaker 01:
Why is that economic rather than educational?

[00:06:12] Speaker 01:
I can imagine a lot of schools

[00:06:16] Speaker 01:
just wanting and deciding to be small schools because they think there are educational benefits.

[00:06:23] Speaker 00:
Well, I think there's a lot of things that go into what size of a class you ultimately have.

[00:06:28] Speaker 00:
One of the major ones is what your resources are at your school.

[00:06:32] Speaker 00:
So yeah, in the long term,

[00:06:35] Speaker 00:
You know, you're going to direct your resources based on, in part, your educational judgments.

[00:06:42] Speaker 00:
But I don't think that that means that you can assume that students aren't going to have more options, too.

[00:06:51] Speaker 00:
It's not just, it's not purely the number of students in the class.

[00:06:55] Speaker 00:
It's also the choice of students.

[00:06:57] Speaker 00:
And that's what I think the Justice Department is concerned about in part two.

[00:07:01] Speaker 00:
where you have a scheme like this, it's not necessarily that you have more students admitted because, again, I think they're subject to capital constraints and other budgetary constraints in addition to perhaps... I can imagine obviously economic justifications for the decision to set the class size at 80.

[00:07:25] Speaker 01:
Right.

[00:07:26] Speaker 01:
But I can imagine educational ones as well.

[00:07:29] Speaker 00:
Right.

[00:07:30] Speaker 01:
So I mean in that in that circumstance you would think that if we're applying if we're applying Brown and Hamilton and Marjorie Webster.

[00:07:41] Speaker 01:
Right.

[00:07:41] Speaker 00:
Right.

[00:07:42] Speaker 00:
Well I mean I think that.

[00:07:44] Speaker 00:
I think that you should overrule.

[00:07:46] Speaker 00:
I mean, Marjorie Register should probably be overruled.

[00:07:48] Speaker 00:
It's probably not, you know, the current state of the law with antitrust.

[00:07:52] Speaker 00:
It's been expanded a lot in terms of what, you know, you think about FTC versus Federation of Dentists and all that.

[00:08:00] Speaker 00:
But even assuming it applies, I think that this is not a

[00:08:05] Speaker 00:
This is not a context where you're talking about a policy where you should really be deferring to medical schools.

[00:08:10] Speaker 00:
In that case, if it was something about the number of credits that you have to obtain to get the degree or mandating a certain standard for whatever it is, hours of surgical experience or whatever it is, then I think that's an example of a pure academic policy where

[00:08:31] Speaker 00:
maybe you should give more discretion, maybe not as much as the universities would want.

[00:08:36] Speaker 00:
But in this case, I think it's really a much more, it's not really a policy.

[00:08:41] Speaker 00:
It's kind of the end result of a complex market process where providers of higher education market interested students.

[00:08:59] Speaker 00:
So yeah, I mean, I think

[00:09:01] Speaker 00:
that it's absolutely an area that's important enough to be considered under the antitrust laws, under free market principles.

[00:09:13] Speaker 00:
Because there are very significant effects, I think, from a restraint between two schools or more schools.

[00:09:25] Speaker 00:
And I think that you should seriously consider the fact that the

[00:09:31] Speaker 00:
students' choice of school is also very important.

[00:09:34] Speaker 00:
It is, I think, with this type of policy, you are going to always see more higher prices, fewer overall number of admittances, but it's also the students' choice in being able to attend the university of their choice.

[00:09:53] Speaker 00:
All right.

[00:09:54] Speaker 00:
Thank you.

[00:09:56] Speaker 00:
Are you finished?

[00:09:57] Speaker 00:
Yeah, I'll reserve the remainder of my time for rebuttal.

[00:10:00] Speaker 00:
Thank you.

[00:10:02] Speaker 00:
Mr. Stempel.

[00:10:07] Speaker 02:
Good morning, Your Honors.

[00:10:09] Speaker 02:
And may it please the Court, my name is Scott Stempel.

[00:10:12] Speaker 02:
On behalf of Appellees, Yale University, the trustees of the University of Pennsylvania, and the Association of American Medical Colleges.

[00:10:22] Speaker 02:
At the council table is my colleague Noah Kaufman.

[00:10:26] Speaker 02:
This Court should affirm the decision below.

[00:10:29] Speaker 02:
dismissing Mr. Pierce's complaint and rejecting his request for mandatory injunction compelling the Yale School of Medicine to admit him instead of other qualified candidates because the admissions committee considered those candidates more qualified.

[00:10:45] Speaker 02:
It should do so for at least three reasons.

[00:10:48] Speaker 02:
But before we get to those reasons, to fully appreciate them, it's important to understand what this case is not about.

[00:10:54] Speaker 02:
This case is solely about the plaintiff, Mr. Pierce, and his rejection from medical school.

[00:11:01] Speaker 02:
The crucial question, and really the only question is, has he suffered an injury of the type the antitrust laws are designed to prevent?

[00:11:08] Speaker 01:
It's also about the district court's opinion.

[00:11:15] Speaker 01:
And you won below.

[00:11:19] Speaker 01:
on a very broad ground that there is no antitrust scrutiny of a school's decision, not only a school's decision of which students to admit, but a school's decision of how many students to admit.

[00:11:38] Speaker 02:
So, Your Honor, I'm not quite sure that the decision is that broad.

[00:11:43] Speaker 02:
It was pretty narrow.

[00:11:45] Speaker 01:
That is what the judge said.

[00:11:48] Speaker 02:
What he found is that admissions decisions, who and how many, are not- Which and how many students to admit.

[00:11:58] Speaker 02:
Are non-commercial aspects.

[00:11:59] Speaker 01:
But you- You know, the how many is pretty hard to reconcile with modern antitrust.

[00:12:06] Speaker 02:
You can get to the same destination along several paths, and we actually identified three.

[00:12:11] Speaker 01:
Okay, but let's talk about this one.

[00:12:13] Speaker 01:
So I assume you would agree if all the Ivy League

[00:12:17] Speaker 01:
medical schools agreed to charge $100,000 tuition.

[00:12:24] Speaker 01:
That naked horizontal price fix would be subject to antitrust scrutiny.

[00:12:29] Speaker 02:
Clearly commercial.

[00:12:30] Speaker 02:
Yes, your honor.

[00:12:31] Speaker 01:
So suppose instead all the Ivy League medical schools agreed to limit output.

[00:12:39] Speaker 01:
And Yale says we'll only do 80 and Harvard, whatever.

[00:12:44] Speaker 01:
That's a naked restriction on output.

[00:12:46] Speaker 02:
Antitrust scrutiny?

[00:12:48] Speaker 02:
And I concede that an express agreement to restrict output in that way would be subject to the antitrust laws.

[00:12:55] Speaker 02:
That's not the case.

[00:12:57] Speaker 01:
So why isn't this complaint or the district court's reasoning a variant saying just the opposite?

[00:13:08] Speaker 01:
He says the decision regarding how many to admit gets no antitrust scrutiny.

[00:13:15] Speaker 02:
Yes, he says that, but I don't think you need to rest on that conclusion in order to arrive at the same result.

[00:13:23] Speaker 01:
Let's talk about his ground before you get to alternative grounds.

[00:13:27] Speaker 02:
Are you defending that?

[00:13:29] Speaker 02:
So we are defending a portion of that in this respect.

[00:13:33] Speaker 02:
I do believe that the decision in a zero-sum game, where at the time of applications the number of seats in a medical school are fixed,

[00:13:45] Speaker 02:
So even if there's an output restriction, at some point in time, it's a game of musical chairs and the number of chairs are fixed.

[00:13:54] Speaker 02:
And then the question, and the only relief this plaintiff seeks,

[00:13:59] Speaker 02:
of the decision of the admissions committee that someone else is not a proper subject for antitrust scrutiny.

[00:14:09] Speaker 02:
That's half of what Judge Cooper concluded.

[00:14:12] Speaker 02:
And I will concede that his conclusion was stated in broader terms.

[00:14:18] Speaker 02:
But if you separate the choice of who gets in from how many,

[00:14:25] Speaker 02:
which I think you can do.

[00:14:27] Speaker 01:
You understand why I'm pressing on it.

[00:14:28] Speaker 02:
Yes, absolutely, absolutely.

[00:14:31] Speaker 01:
And I have some trouble understanding the precise mechanics of how the conspiracy alleged here actually leads to an output restriction.

[00:14:48] Speaker 01:
But that's a Twombly Iqbal issue, and you didn't win on that ground.

[00:14:53] Speaker 02:
We didn't win on that ground.

[00:14:54] Speaker 02:
We raised it.

[00:14:56] Speaker 02:
And with all due respect to the court, when confronted with an eight-page brief raising one issue on appeal, we didn't address it.

[00:15:06] Speaker 02:
Frankly, I do think, though, the court can affirm for any reason.

[00:15:11] Speaker 02:
And the district court was troubled, I believe,

[00:15:19] Speaker 02:
He referred to the theory of harm that you've identified as highly conjectural, counterintuitive, and unlikely.

[00:15:28] Speaker 02:
But good enough for Twombly and Ickball.

[00:15:31] Speaker 02:
Well, that leap, but good enough for Twombly and Ickball, is what we take issue with.

[00:15:39] Speaker 02:
And I think you heard Mr. Pierce say it just now.

[00:15:43] Speaker 02:
If one more, his position is, if Yale had increased its class size by more.

[00:15:49] Speaker 01:
I understand.

[00:15:50] Speaker 01:
I don't agree with everything he says, but he's not just

[00:15:55] Speaker 01:
This is not the problem of picking A over, there's nothing more than picking A over B and that's an injury to a competitor, not competition.

[00:16:03] Speaker 01:
He has alleged something more than that.

[00:16:07] Speaker 01:
Something that he says is an output restriction.

[00:16:10] Speaker 02:
Something that he says is an output restriction, yes.

[00:16:16] Speaker 02:
to your point, a naked agreement to restrict output would be reachable under the Sherman Act.

[00:16:25] Speaker 02:
We don't dispute that.

[00:16:31] Speaker 01:
Okay, so I've kept you on his ground if you want to get to alternatives.

[00:16:37] Speaker 02:
So just back to what this case really is about.

[00:16:41] Speaker 02:
In paragraph 71 of his amended complaint,

[00:16:45] Speaker 02:
Mr. Pierce says what he wants from the courts.

[00:16:49] Speaker 02:
And I quote, there is no amount of money which can compensate the named plaintiff for the inability to achieve his dreams and career goals.

[00:16:57] Speaker 02:
The loss to the named plaintiff and to society from the underutilization of the plaintiff's extraordinary talents can only be mitigated and avoided by injunctive relief allowing the named plaintiff to obtain medical

[00:17:13] Speaker 02:
That's what he wants.

[00:17:16] Speaker 02:
And we think this is completely disconnected from the theory of harm, the antitrust injury.

[00:17:23] Speaker 02:
But, Your Honor, context does matter.

[00:17:26] Speaker 02:
And the context here is that the admissions committees for America's 154 medical schools perform an exceedingly important task.

[00:17:36] Speaker 02:
In this most recent application cycle,

[00:17:39] Speaker 02:
There were nearly 900,000 applications to US medical schools, and only about 22,000 applicants actually enrolled.

[00:17:47] Speaker 02:
So that's over 40 applications per seat.

[00:17:50] Speaker 02:
I think we all recognize it's very difficult to get into medical school, especially a medical school like Yale.

[00:17:57] Speaker 02:
So the admissions committees have to decide who from among this large pool of applicants they will admit.

[00:18:04] Speaker 02:
to their respective medical schools to be future physicians who will treat you, me, our children, our grandchildren.

[00:18:12] Speaker 02:
This is a very important task.

[00:18:14] Speaker 02:
Doctors are not on islands.

[00:18:16] Speaker 02:
They have to work in teams.

[00:18:18] Speaker 02:
If, God forbid, I walk out of here today, and I get hit by one of those many news vans staking out the Roger Stone trial, and I get whisked away in an ambulance to a hospital, I don't have the luxury of interviewing

[00:18:33] Speaker 02:
the doctor in the emergency room when she starts treating me, or the trauma specialist, or the surgeon when they wheel me up to the operating room, or the intensive care specialist when they move me into intensive care.

[00:18:48] Speaker 02:
And all of them have to work together.

[00:18:50] Speaker 02:
So for this reason, in contrast to law schools and most other postgraduate programs, every medical student would be a medical student who a school identifies as a potential entrant

[00:19:03] Speaker 02:
will be interviewed.

[00:19:05] Speaker 02:
Everybody gets interviewed.

[00:19:07] Speaker 02:
Mr. Pierce was interviewed.

[00:19:08] Speaker 02:
He was interviewed at UCLA.

[00:19:10] Speaker 02:
He was interviewed at Hofstra.

[00:19:11] Speaker 02:
He was interviewed at Yale.

[00:19:14] Speaker 02:
And his contention is that as a result of the interview, that's why he didn't get in.

[00:19:21] Speaker 02:
That's when what?

[00:19:22] Speaker 02:
That's why he did not get in.

[00:19:25] Speaker 02:
What?

[00:19:27] Speaker 02:
As a result of the interview, he did not.

[00:19:29] Speaker 02:
Oh, I see.

[00:19:30] Speaker 02:
He was rejected.

[00:19:31] Speaker 02:
Sorry, Your Honor.

[00:19:33] Speaker 02:
So in our briefs, we mention three reasons, and I won't belabor them here, but for affirming below.

[00:19:43] Speaker 02:
And I think that Judge Katzis has identified a compelling fourth reason, which is the promulgation and the implausibility of the claim.

[00:19:53] Speaker 02:
But we believe that the decision of who, not how many, but who gets in is

[00:20:03] Speaker 02:
quintessential non-commercial aspect of higher education.

[00:20:08] Speaker 02:
Second, in a zero-sum game, when the complaint of the plaintiff is, it should have been me instead of you.

[00:20:18] Speaker 01:
Both of those grounds go to the who question, not to any question.

[00:20:22] Speaker 02:
Exactly.

[00:20:24] Speaker 02:
In that case, he has not suffered an antitrust injury.

[00:20:28] Speaker 02:
And third, you do mention the academic deference argument.

[00:20:32] Speaker 02:
I think that we propose it more as a prudential consideration, an important prudential consideration, especially when it comes to admission to medical school, rather than a hard and fast roll.

[00:20:45] Speaker 00:
Thank you.

[00:20:46] Speaker 00:
All right.

[00:20:46] Speaker 00:
Thank you.

[00:20:47] Speaker 00:
Does Mr. Pierce have any time?

[00:20:51] Speaker 00:
All right.

[00:20:57] Speaker 00:
So I think it's really important to keep the merits of the antitrust claim separate from this appeal because

[00:21:05] Speaker 00:
As Apple versus Pepper, which was the direct purchaser rule in the Supreme Court said, when you're considering a threshold antitrust issue like this, there's really no occasion to visit the merits.

[00:21:15] Speaker 00:
I haven't had the chance to put expert testimony before you and explain.

[00:21:20] Speaker 00:
It's a fairly complex market.

[00:21:21] Speaker 00:
Like they said, I think the statistic is not quite right.

[00:21:24] Speaker 00:
It's more like 90,000 maybe applicants for 22,000 spaces.

[00:21:28] Speaker 00:
But the point is that

[00:21:31] Speaker 00:
It's definitely something that falls within the grounds of the antitrust.

[00:21:35] Speaker 00:
And as far as the specifics of my particular admission, that's actually not the only relief requested in the complaint.

[00:21:41] Speaker 00:
I suggest that there could be money damages, various other forms of damages, and it's definitely not limited to injunctive relief.

[00:21:50] Speaker 00:
That's just a statement that legal damages are inadequate to justify one of many reliefs being injunctive relief.