Horisons Unlimited v. Santa Cruz-Monterey-Merced Managed Medical Care Commission, et al

Filing 40

ORDER FOR SUPPLEMENTAL BRIEFING (Docs 20, 23) signed by District Judge Lawrence J. O'Neill on May 9, 2014. (Munoz, I)

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UNITED STATES DISTRICT COURT

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FOR THE EASTERN DISTRICT OF CALIFORNIA
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HORISONS UNLIMITED and HORIZONS
UNLIMIED HEATH CARE,

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Plaintiffs,

1:14-CV-00123-LJO-MJS
ORDER FOR SUPPLEMENTAL
BRIEFING (Docs. 20, 23)

v.

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11 SANTA CRUZ-MONTEREY-MERCED
MANAGED MEDICAL CARE COMMISSION
12 d/b/a CENTRAL CALIFORNIA ALLIANCE FOR
HEALTH, THE COUNTY OF MERCED, and
13 THE BOARD OF SUPERVISORS OF
14 THECOUNTY OF MERCED AND THE
INDIVIDUAL MEMBERS THEREOF,
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Defendants.
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Defendants Santa Cruz-Monterey-Merced Managed Medical Care Commission d/b/a Central

19 California Alliance for Health (“Alliance”) and the County of Merced (“the County”) in their
20 respective motions to dismiss Plaintiffs Horisons Unlimited and Horisons Unlimited Health Care’s
21 (collectively, “Horisons” or “Plaintiffs”) complaint argue that Horisons’ Sherman Act claim against
22 Defendants is deficient due to an antitrust exemption contained in 42 U.S.C. 1396u-2(a)(3)(C). (Doc.
23 21, pp. 16-18; Doc. 23, p. 4). Specifically, Defendants argue that a note, referred to in the statute as
24 “42 U.S.C. § 1396b note,” exempts Merced County from antitrust laws. The County further argues
25 that if Alliance’s position as the sole Medi-Cal managed care entity in Merced County is construed as
26 an unlawful monopoly, “then the Social Security Act provision would be repugnant to the Sherman
27 Antitrust Act.” (Doc. 21, p. 17). The County argues that the 42 U.S.C. § 1396b note “expressly
28 exempts Merced County” and that this confers implied antitrust immunity upon the County. Id. at 161

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18 (citing Phonetele, Inc. v. AT&T Co., 634 F. 2d 716, 731-732 for its discussion of when a regulatory

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mandate is sufficient to confer implied antitrust immunity).

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The Court ORDERS Defendants to submit supplemental briefing not to exceed 10 pages in

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length as to this defense raised by Defendants by no later than May 16, 2014. Specifically, the parties

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should address how the 42 U.S.C. § 1396b note modifies 42 U.S.C. 1396u-2 with supporting

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attachments1 of excerpts of the public law(s) containing the 42 U.S.C. § 1396b note and of any and all

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other relevant public laws or statutes modified by the 42 U.S.C. § 1396b note. Defendants should also

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clarify their argument as to whether 42 U.S.C. 1396u-2(a)(3)(C) confers express or implied antitrust

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exemption upon Merced.

In addition, Defendants should address the claimed statutory conflict

10 between the Sherman Act and 42 U.S.C. 1396u-2 including what, if any, relevance Phonetele’s
11 implied antitrust immunity analysis has to the instant case where no regulatory agency is involved and
12 the claimed repugnancy is between two federal statutes.
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Plaintiffs may file a response of equal length by May 23, 2014.

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If Defendants fail to submit the supplemental briefing in accordance with this Court’s

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17 IT IS SO ORDERED.
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Dated:

/s/ Lawrence J. O’Neill

May 9, 2014

UNITED STATES DISTRICT JUDGE

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The limit on page length does not include such attachments.

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