To more fully inform the membership of details of the legal situation, attorney Joel Klein agreed to be interviewed by contributing editor Elise W. Snyder.
Dr. Elise W. Snyder: As you may know, we often have a presentation at our meetings called “Meet the Author”. I think this interview might be called “Meet Your Lawyer and Your Lawsuit”. Where are you from? What do you do?
Mr. Joel I. Klein: I grew up in New York City, and went to Columbia College. At Harvard Law School I was close to Alan Stone through whom I did some work at McLean Hospital. After law school I was a research assistant for Alan Dershowitz, a Fellow at the Center for Advanced Study of Behavioral Sciences at Stanford. I also taught a class at Stanford Law School in human relations problems in the law. Then I traveled for a year in Europe and Africa. I returned in 1973, and clerked for then Chief Judge David Bazelon, in Washington, D.C., probably most famous for his decision in the Durham insanity case. I then clerked for Justice Powell on the U.S. Supreme Court. The next year I worked at the Mental Health Law Project which was a spinoff of the Center for Law and Social Policy. My first involvement with the American was at that time. A book had been published by a psychiatrist about a former patient, which was sufficiently revealing that the patient could be identified. The case involved an interesting clash of very fundamental values: the right to publish and the right to individual privacy and confidentiality.
Dr. S: Which side was who on?
Mr. K: The American Psychiatric and the American Psychoanalytic supported the patient. While freedom of press is very important, lack of confidentiality can impair the whole psychotherapeutic endeavor. In their briefs, the analysts spoke about Freud and his case studies. It was a fascinating experience. I had one other experience with the American.
About 8 years ago, when Arnold Cooper was president, I did some work for the American. At that time Health, Education and Welfare was granting the status of accrediting organizations in various fields. The National Accreditation Association for Psychoanalysis (NAAP) sought the designation. I represented the American and a consortium of groups opposed to them. Ultimately the matter faded away as HEW got out of the accrediting business.
Dr. S: You were talking about the Mental Health Law Project.
Mr. K: The Project, at the time I worked with it, dealt with issues of the institutionalization of the mentally ill and the use of treatments such as electro-shock and medication. By the end of the
year, I realized that I was more comfortable representing clients than causes. When you are representing institutionalized mentally ill people, your clients often have very little sense of what's going on in the lawsuit and they don't really control it. The lawyers do. It's classic lawyers' litigation. I found myself uncomfortable with that.
I left and went into private practice with a small litigation firm. The American Psychiatric Association was looking for an attorney and, (probably because of my past involvement in psychiatric issues and with Alan Stone), I was retained as general counsel. Between 1976 and 1980, probably 50 percent of my work was related to law and psychiatry issues. The other half had to do with corporate and general litigation, labor work, some securities fraud work and some general antitrust work.
Dr. S: On which side were you usually in the antitrust work?
Mr. K: Usually on the side of the defendants. In 1980, I, together with a good friend, Joe Onek (who had been Chief of Health on the White House staff and Deputy Counsel to the President during the Carter administration, who had worked for the U.S. Solicitor General, and who was regarded as a distinguished appelate advocate), another lawyer, Bartow Farr and I decided to start a small policy oriented law firm. We had each clerked on the U.S. Supreme Court and had found that intellectual issues were what made the practice of law particularly exciting. We wanted to have a small firm without a particular ideological or political bent that could be selective about choosing the work it would do. We wanted to do work that was both demanding and interesting.
Dr. S: We now have an overview of who you are and of how you and the American first met. What about the lawsuit? I realize that the suit is in litigation and that there may be some questions that are not answerable at this time. I don't know which questions are inappropriate, so you will have to tell me. Can you give me an historical overview of the lawsuit?
Mr. K: As you know, I was retained in November 1986. Since then I have been familiarizing myself with the history. In March 1985, the American Psychoanalytic Association, the New York Psychoanalytic Institute, the Columbia University Center for Psychoanalytic Training and Research and the International Psychoanalytical Association were served with complaints naming them as defendants in an antitrust suit in Federal Court in New York.
Dr. S: Are you representing all of them?
Mr. K: No, each has its own counsel.
Dr. S: Is there some conflict of interest among the four groups?
Mr. K: No. The lawyers communicate with each other regularly and participate in what is called a common defense. Nevertheless, the interests and roles of the four organizations are different. For example, the International's role in training in the United States is very different from the American's.
Dr. S: Why are those two institutes being sued?
Mr. K: I assume that they were sued because the lawsuit was brought in New York, so New York based institutes were chosen. I think that the suit was brought in New York because the American is based there. Particular institutes were probably included in the lawsuit for tactical reasons.
Dr. S: Of course. The institutes would have information the American wouldn't have: who applied; who was turned down; who applied for a waiver and was turned down; and who wasn't recommended for a waiver.
Mr. K: We are speculating about the plaintiffs' thinking. For what it is worth, let me add that in terms of some of the legal relief they want, only an institute could be ordered to admit someone.
Dr. S: Exactly what is the lawsuit about?
Mr. K: The plaintiffs, four Ph.D. clinical psychologists, alleged that various policies and activities of the defendants unreasonably restrained trade in violation of the Sherman Antitrust Act. They said that these policies and activities led to an unlawful monopoly in the training of psychoanalysts and the provision of psychoanalytic services, as well as a group boycott of psychologists.
Dr. S: I know how expensive it is to engage in a lawsuit. Here are four individuals who are suing? Where do they get their funds?
Mr. K: They've put together a group called GAPPP (Group for the Advancement of Psychotherapy and Psychoanalysis in Psychology), and they've gotten money by using that group for fundraising. They also have at least some affiliation of an informal sort with Division 39 of the American Psychological Association. Division 39 focuses on psychoanalysis. I think there has been some kind of assessment of its members. Some direct contribution may have come from the American Psychological Association.
Dr. S: I see. And the four psychologists, who are they?
Mr. K: The first, Bryant Welch, was a candidate who had been admitted to the North Carolina Duke Institute. I think he left before it became time to apply for CORST waivers. Dr. Welch is also an attorney and is now working for the American Psychological Association. As I understand it, another of the plaintiffs had been rejected by two institutes; a third was a candidate at Topeka and was evidently not granted a CORST waiver; and the fourth was admitted to a Los Angeles institute and was also not granted a CORST waiver.
Dr. S: I've never signed anything saying I can't offer training any place, nor has the American or anyone else either encouraged or discouraged me from referring patients to anyone.
Mr. K: There's a great difference between allegation and fact. When people put together a complaint, they say what they think, or perhaps, even hope, they will ultimately prove; but you should understand, of course, that we dispute those factual allegations.
Dr. S: Is there a specific amount for which we are being sued?
Mr. K: No. But let me tell you what I think is their theory. First, they claim that psychologists have impermissibly been denied training by the American and its affiliates. How many would have been trained? They say 2,000. Then they will try to prove that it was worth some extra amount more per hour if you were trained as a psychoanalyst. And that you'd have so many more patient hours. You multiply all that by the estimated years you might practice, and then by 2,000, and then you triple it because they are suing for triple damages.
Dr. S: Wow! It really is odd. Most people I know charge a lower fee for psychoanalysis than for psychotherapy. What happened next in the lawsuit?
Mr. K: The plaintiffs requested that the defendants permit them to review all relevant documents. In May 1985, the American sent them some documents and indicated that more would be forthcoming after the parties had agreed on procedures for protecting the confidentiality of those documents the defendants considered sensitive or personal in nature.
Dr. S: Like what?
Mr. K: Materials about individuals involved in the American or about people who have applied for training or waivers, or patient material that might have been submitted as part of an application. At the same time, the American filed an answer to the complaint in which they denied all the allegations. In addition, the American asserted as a defense (I'll quote it) “the matters of which plaintiffs complain are non-commercial in nature …, at most reflect[ing] a difference of opinion among educators, mental health professionals, and psychoanalysts concerning educational, training and treatment considerations.” Accordingly, the American contended that antitrust laws were inapplicable, and that the First Amendment's protection of academic freedom wholly precluded the plaintiffs' suit.
In late 1985, the defendants moved to dismiss the suit. A motion to dismiss contends that, even if the factual allegations were accepted as true, the suit could not prevail as a matter of law. For technical reasons, the motion to dismiss was treated as a motion for summary judgment. In resolving a summary judgment motion, a court is permitted to look at material other than the complaint and answer. A court will deny a motion for summary judgment if the party opposing the motion demonstrates that there is a dispute of fact. The defendants also argued that academic admission policies are beyond the purview of the federal antitrust laws. While reasonable persons have disagreed on the question of “lay analysis”, the defendants argued that this kind of dispute is wholly beyond the intended reach of the Sherman Antitrust Act, and that the First Amendment shields such disputes from governmental interference.
On April 4, 1986, Judge Keenan denied the defendants' motion. The judge said that admissions policies of professional associations are not always beyond the reach of the antitrust laws. He concluded that, at such an early stage, the facts were insufficiently developed to enable him to rule on whether the Antitrust Acts even applied in this particular context. In Judge Keenan's words: “On the facts now before it, the Court is unable to tell whether the [American] is driven by a ‘commercial motive,’ which might bring its accrediting and admissions policies within the ambit of the Sherman Act, or whether the commercial motive was incidental to a primary educational motive.”
The opinion also noted that even if the plaintiffs eventually were able to prove that the antitrust laws were applicable in this context, the court would need more information before it would determine whether an antitrust violation actually occurred. That means that none of the alleged activities of the American, even if proven, were “per se” illegal, but rather would be assessed under the more tolerant “rule of reason” standard of review.
Dr. S: Have there been any antitrust suits akin to this one?
Mr. K: Like everything else about this litigation, the answer to that question is debatable. Until 1974 or so, the federal courts had taken the position that the professions were not subject to the antitrust laws. Then, in a famous case involving lawyers, the Supreme Court held that lawyers were subject to the antitrust laws. That led to a lot of litigation. While the first case involved lawyers, almost all the rest have involved doctors. In general, those cases involved what people could do once they had become members of a profession: advertising, admitting privileges, etc. The essence of this suit, by contrast, is really training, which I view as different from the issues involved in prior suits. I think the ultimate question here is whether an academic organization can define its criteria for entry.
Mr. K: No, not to my knowledge.
Mr. S: What is happening financially with the International?
Mr. K: Until recently, they covered their own legal fees. But, based on action taken by the Executive Council in December 1986, the American is now going to help the International with their legal fees.
Dr. S: Are there differences between the American and the International on the lawsuit?
Mr. K: Many institutes of the International have always trained non-physicians. Since 1938, the International, under its charter and bylaws, has had an arrangement whereby the American took responsibility for accrediting new institutes in the United States.
Dr. S: I see. Whereas in other places like …
Mr. K: England. The institutes have applied directly to, and have been accredited by, the International. The other historical difference is that analysts trained in America had to be members of the American Psychoanalytic in order to be members of the International. The American has now decided to propose that the International amend its byelaws to provide that other institutes in the United States can be directly affiliated with the International. This will be formally proposed at the business meeting of the International in Montreal in ′87.
Dr. S: I see. This doesn't require any change in the bylaws of the American. Wouldn't this be an appealing notion for the plaintiffs in the lawsuit?
Mr. K: I don't know. It might be appealing to people who are currently in non-American institutes and who would like to apply to the International.
Dr. S: And the International is happy about this?
Mr. K: Yes. The International is very excited by this change.
Dr. S: And for us, it seems to me, the change would preserve a kind of academic freedom and permit us to maintain those standards we think are important. I would think this proposal would remove all impediments to a settlement, but I gather from the Welch letter (I didn't get a copy myself) that they want us to set up training facilities for them.
Mr. K: I'm not sure that this is an issue I can discuss while the matter is in litigation.
Dr. S: O.K. You mentioned earlier that what you are working on right now is the class action suit. How does a suit get certified as class action?
Mr. K: It's a very technical, complicated issue. Usually a class action is brought on behalf of people who have reasonably small and identical, or very similar, claims. And where it is reasonably easy to define who is a member of the class—like all welfare recipients or all owners of a certain model car. In this case, the group is very amorphous. Are they people who want psychoanalytic training? Who once wanted it, but no longer do? Do they want training at the institutes of the American? At new institutes? Can they afford training? Would they be suitable for training? (As you know, many, many psychiatrists who apply are found simply not suitable for training by the American's institutes.)
Dr. S: On what do they base their complaint?
Mr. K: Their general allegations rest on four specific claims. First, they feel that the requirement that applicants have completed a psychiatric residency discriminates unfairly against non-M.D.s. Second, they maintain that the American prohibits its members from offering training in psychoanalysis outside its affiliated institutes. Third, they claim that the defendants discourage their members from referring patients to qualified psychoanalysts who are not medical doctors. And fourth, they say that the American has discouraged various international training institutes from accepting non-M.D.s for training. They claim that all of these actions were undertaken with an anti-competitive purpose, and had the effect of artificially elevating prices for psychoanalytic services.
Dr. S: That sounds so odd. What are they asking the court to do?
Mr. K: They want an injunction requiring the defendants to cease all discriminatory and anti-competitive activity. They also want monetary damages equal to three times the economic injury they allegedly suffered. Last, they want the court to certify the case as a class action. The plaintiffs claim that they represent the interests of approximately 2,000 others.
Dr. S: How did they arrive at 2,000? Is that the membership of Division 39?
Mr. K: It may well be related to the membership of Division 39 in some way; frankly, I'm not entirely sure. The issue of a class action is a hotly contested one,
but we have not gotten into much discovery on the issue so far.
Let me give you a simple analogy. In order to get into law school you need a baccalaureate degree. One could argue that courses in the arts and sciences are not necessarily relevant to legal training, but in truth, one of the best tests of the relevance of admissions criteria may well be the fact that the system works. That fact, I would suggest, may be much more important than conceptual arguments about which criteria are really necessary. One question in the present suit is how to establish quality training. In the view of the founders and developers of the American, a process occurs through medical and psychiatric training that is relevant to training in psychoanalysis. The proof of the pudding is that standards which are so desperately hard to maintain in this field have been maintained by the American. Others may speculate that standards could just as easily have been maintained with different admissions criteria, but this is simply speculation.
Dr. S: Have there been any meetings between the plaintiffs and the American?
Mr. K: There were some meetings before the suit was initiated, but I guess they were not satisfactory to the plaintiffs. Then, in March 1986, after the suit was filed, representatives of the American and the International met with the plaintiffs and their counsel to attempt a negotiated settlement. Meetings continued for several months, but by the end of October 1986, it became apparent that the parties were too far apart in their positions to justify further settlement discussions.
Dr. S: Is the American Psychiatric
Association taking any stand on the lawsuit?
Dr. S: The group is certainly not the whole membership of the American Psychological Association; it's not even all psychologists who are interested in psychoanalysis. We don't know who they are.
Mr. K: Because of that and other things, it's our view that this matter is inappropriate for a class action lawsuit.
Dr. S: What is the next step?
Mr. K: The way things work is like this. Periodically, every three to six months, there are status conferences with the court.
Dr. S: This time scale is really like the time scale of a psychoanalysis. It goes on forever.
Mr. K: Not exactly, I hope, but the analogy has been made before. More seriously, after perhaps six months, the judge might ask the defendants and the plaintiffs to get our documents to each other and, if there were issues the plaintiffs and the defendants couldn't resolve, the judge would resolve them. Then we might go on to the class action issue, with lots of testimony and depositions.
Dr. S: When might this happen?
Mr. K: Some time during the next year. Other parts of the action will be proceeding at the same time.
Mr. S: When patients enter analysis, they ask how long it will last and we tell them the average analysis lasts four to 10 years.
Mr. K: If you substitute “lawsuit” for “analysis”, that's probably the right answer. Discovery in a law suit is a lot like psychoanalysis. It's essential to try to find all the facts and to re-create history as accurately as possible. Sometimes you pick up a rock, a rock that you think there'd be nothing under, and find there's a city below it that nobody knew about. Sometimes it can go quickly. It simply depends on the specifics of the case.
Dr. S: Will a report about the negotiation meetings this fall be sent to the membership?
Mr. K: I would hope not because I think such reports make ongoing discussions difficult and are invariably perceived as unfair or incomplete by those who participated in the meetings. If a settlement agreement is actually reached, the document will then be available for all to read.
Dr. S: Doesn't the letter which the plaintiffs sent violate those principles?
Mr. K: That's for them to decide, I suppose. In my opinion, matters discussed at settlement meetings should be subject to confidentiality because the details could obviously affect the lawsuit if the case is not settled, or even if it is settled but in a different mode. I think tremendous misunderstandings can arise from premature and incomplete discussions. This sort of lawsuit is very difficult for an association like the American, where the membership has a keen and significant interest in understanding what's happening. In the jostling of litigation, things often said in bits and pieces are difficult to understand. Then, in the courtroom, they come back, sometimes out of context, and get used for other purposes. It troubles me because, obviously, I do think the members are entitled to know what is going on. They have a direct and immediate interest in it, but it is not always possible to keep a large membership fully informed.
Dr. S: I'm really struck by the further analogy between this legal process and a psychoanalysis. At a given moment something may be focused on not in any proportionate relation to the whole. Also, details can be used defensively both in your sense and in mine.
Mr. K: I think that's exactly right.
Dr. S: How do you communicate with the American?
Mr. K: There are a lot of meetings and conference calls (usually late at night) with the Executive Committee. And there are, as well, individual contacts with Dr. Simons, Mrs. Fischer and myself. The Executive Committee and I also report periodically to the Executive Council.
Dr. S: What have I neglected to ask you that might be of interest or significance?
Mr. K: So much is of interest and significance, but in the present context, I think it would be ill advised to expand on things. This has got to be one of the few times in my life that I'm tongue tied.
Dr. S: That's hardly true. Thank you very much for this interview. It's been fascinating and informative.
Mr. K: Thank you.