## Facts

- Teladoc, Inc. and an affiliated physician entity provided telehealth services by connecting patients with Texas-licensed, board-certified physicians for remote consultations and, when medically appropriate, prescriptions.
- The Texas Medical Board (TMB) is the state agency responsible for regulating the practice of medicine in Texas.
- In 2003, TMB adopted Rule 190.8, which barred a physician from prescribing a controlled substance without first establishing a physician–patient relationship; the rule described establishing a diagnosis using acceptable medical practices (including, by example, a physical examination).
- In 2010, TMB adopted Rule 174, stating that, for telemedicine providers, establishing a physician–patient relationship required first conducting a physical examination.
- TMB later sent Teladoc a letter asserting that Rule 190.8 required a face-to-face examination before prescribing.
- Teladoc sought injunctive relief in state court to prevent TMB from enforcing the letter’s interpretation. The trial court ruled for Teladoc, reasoning that the letter effectively rewrote Rule 190.8 by converting an example (physical examination) into a requirement.
- After that ruling, TMB issued an emergency amendment to Rule 190.8 requiring a face-to-face examination and then finalized the amendment through the formal rulemaking process.
- Teladoc and physician plaintiffs filed this federal action against TMB members in their official capacities, alleging that Rules 190.8 and 174 unlawfully restrained competition in violation of federal antitrust law and imposed an unconstitutional burden on interstate commerce.
- Defendants moved to dismiss, arguing that the antitrust claims were barred by state-action (Parker) immunity and that the complaint failed to state a Commerce Clause claim.

## Issues

1. Whether a state medical board allegedly controlled by active market participants was entitled to state-action (Parker) immunity on a motion to dismiss where plaintiffs alleged the challenged rulemaking was not subject to active state supervision.
2. Whether the complaint stated a plausible federal antitrust claim challenging telemedicine prescribing restrictions adopted through board rulemaking.
3. Whether the complaint plausibly alleged a Dormant Commerce Clause violation based on alleged burdens on interstate telemedicine services.

## Decision

- The court denied defendants’ amended motion to dismiss in full.
- The court held that, at the pleading stage, defendants were not entitled to dismissal based on Parker immunity because plaintiffs plausibly alleged the board was controlled by active market participants and that the challenged restraints were not actively supervised by the state, as required under *N.C. State Bd. of Dental Exam’rs v. FTC*.
- The court held that plaintiffs’ allegations were sufficient at the motion-to-dismiss stage to proceed on their federal antitrust challenge to the telemedicine rules.
- The court held that plaintiffs plausibly alleged a Dormant Commerce Clause claim and that weighing asserted local benefits against alleged interstate burdens under *Pike* was not suitable for resolution on the pleadings.

## Legal Principles

- A state board controlled by active market participants is not treated as the sovereign for antitrust purposes; to receive state-action immunity, the restraint must reflect a clearly articulated state policy and be subject to active state supervision.
- “Active supervision” requires meaningful state review by a disinterested state actor with authority to approve, modify, or veto the restraint; whether that supervision exists may depend on facts not resolvable on a Rule 12(b)(6) record when plausibly disputed.
- On a motion to dismiss, the court accepts well-pleaded facts as true and asks whether the complaint plausibly states a claim for relief; antitrust claims need not prove market effects at the pleading stage if the alleged conduct plausibly restrains competition.
- Under the Dormant Commerce Clause, a facially neutral state regulation may be challenged if it places an undue burden on interstate commerce; *Pike v. Bruce Church* balancing generally requires a developed factual record when the burdens and benefits are contested.

## Conclusion

In *Teladoc, Inc. v. Texas Medical Board*, the Western District of Texas refused to dismiss Teladoc’s antitrust and Dormant Commerce Clause claims challenging Texas telemedicine prescribing rules, holding that state-action immunity could not be resolved on the pleadings given plausible allegations of a physician-controlled board and the absence of active state supervision, and that the alleged burdens on interstate telemedicine were sufficient to proceed past Rule 12(b)(6).


Teladoc, Inc. v. Texas Medical Board, 2015 WL 8773509 (2015)