Biondo v. Kootenai Hospital District
MEMORANDUM DECISION AND ORDER. IT IS HEREBY ORDERED: Defendant's Motion to Dismiss or for an Order for More Definite Statement 9 is GRANTED in part and DENIED in part. Biondo may file an amended complaint within 14 days of the date of this order. Signed by Judge B. Lynn Winmill. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (st)
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO
Case No. 1:17-cv-00039-BLW
KOOTENAI HOSPITAL DISTRICT,
MEMORANDUM DECISION AND
The Court has before it Defendant’s Motion to Dismiss or for an Order for More
Definite Statement (Dkt. 9). For the reasons explained below, the Court will grant the
motion in part and deny the motion in part.
Biondo is a Physician’s Assistant. He asserts that he applied for medical staff
privileges at the Kootenai Hospital District (“Kootenai Health”). He claims that the
credentialing committee unanimously recommended that his application be approved by
the board, but the board thereafter met and denied his request. Amended Compl. ¶ 7-8.
Biondo filed this lawsuit alleging due process and antitrust violations.
MEMORANDUM DECISION AND ORDER - 1
Federal Rule of Civil Procedure 8(a)(2) requires only “a short and plain statement
of the claim showing that the pleader is entitled to relief,” in order to “give the defendant
fair notice of what the . . . claim is and the grounds upon which it rests.” Bell Atlantic
Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 1964 (2007). While a complaint
attacked by a Rule 12(b)(6) motion to dismiss “does not need detailed factual
allegations,” it must set forth “more than labels and conclusions, and a formulaic
recitation of the elements of a cause of action will not do.” Id. at 555. To survive a
motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to
“state a claim to relief that is plausible on its face.” Id. at 570. A claim has facial
plausibility when the plaintiff pleads factual content that allows the court to draw the
reasonable inference that the defendant is liable for the misconduct alleged. Id. at 556.
The plausibility standard is not akin to a “probability requirement,” but it asks for more
than a sheer possibility that a defendant has acted unlawfully. Id. Where a complaint
pleads facts that are “merely consistent with” a defendant's liability, it “stops short of the
line between possibility and plausibility of ‘entitlement to relief.’ ” Id. at 557.
The Supreme Court identified two “working principles” that underlie Twombly in
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). First, the court need not accept as true, legal
conclusions that are couched as factual allegations. Id. Rule 8 does not “unlock the
doors of discovery for a plaintiff armed with nothing more than conclusions.” Id. at 67879. Second, to survive a motion to dismiss, a complaint must state a plausible claim for
relief. Id. at 679. “Determining whether a complaint states a plausible claim for relief
MEMORANDUM DECISION AND ORDER - 2
will . . . be a context-specific task that requires the reviewing court to draw on its judicial
experience and common sense.” Id.
A dismissal without leave to amend is improper unless it is beyond doubt that the
complaint “could not be saved by any amendment.” Harris v. Amgen, Inc., 573 F.3d 728,
737 (9th Cir. 2009) (issued 2 months after Iqbal).1 The Ninth Circuit has held that “in
dismissals for failure to state a claim, a district court should grant leave to amend even if
no request to amend the pleading was made, unless it determines that the pleading could
not possibly be cured by the allegation of other facts.” Cook, Perkiss and Liehe, Inc. v.
Northern California Collection Service, Inc., 911 F.2d 242, 247 (9th Cir. 1990). The
issue is not whether plaintiff will prevail but whether he “is entitled to offer evidence to
support the claims.” Diaz v. Int’l Longshore and Warehouse Union, Local 13, 474 F.3d
1202, 1205 (9th Cir. 2007)(citations omitted).
Under Rule 12(b)(6), the Court may consider matters that are subject to judicial
notice. Mullis v. United States Bank, 828 F.2d 1385, 1388 (9th Cir. 1987). The Court
may take judicial notice “of the records of state agencies and other undisputed matters of
public record” without transforming the motions to dismiss into motions for summary
judgment. Disabled Rights Action Comm. v. Las Vegas Events, Inc., 375 F.3d 861, 866,
n.1 (9th Cir. 2004). The Court may also examine documents referred to in the complaint,
although not attached thereto, without transforming the motion to dismiss into a motion
for summary judgment. See Knievel v. ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005).
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Pursuant to Fed.R.Civ.P. 12(e), a “party may move for a more definite statement
of a pleading to which a responsive pleading is allowed but which is so vague or
ambiguous that the party cannot reasonably prepare a response.” A motion for more
definite statement must “point out the defects complained of and the details desired.” Id.
Biondo asserts four claims in his Amended Complaint: (1) Due process violation
of both State and Federal law; (2) Violation of the Clayton Antitrust Act; (3) Violation of
the Sherman Antitrust Act; and (4) Violation of the Idaho Competition Act. Only the due
process claim survives the motion to dismiss.
1. Due Process Claim
The Fourteenth Amendment to the United States Constitution provides that no
state shall “deprive any person of life, liberty, or property, without due process of law.”
U.S. Const. amend. XIV, § 1. “A threshold requirement to a substantive or procedural
due process claim is the plaintiff’s showing of a liberty or property interest protected by
the Constitution.” Engquist v. Oregon Dept. of Agriculture, 478 F.3d 985 (9th Cir.
2007)(internal citations omitted). Biondo asserts that he has a property interest in “his
Physician’s Assistant license and medical staff privileges at Kootenai Health.” Amended
Complaint, ¶ 13. He asserts that he was denied due process because Kootenai Health did
not give him a hearing before denying him medical privileges at the hospital.
“Idaho Code § 39–1395 mandates that hospitals have a process for considering
applications for medical staff membership and privileges that affords each applicant due
process.” Miller v. St. Alphonsus Regional Medical Center, Inc., 87 P.3d 934, 944 (Idaho
MEMORANDUM DECISION AND ORDER - 4
2004). The Idaho legislature has not specified the type of process due under these
circumstances, but the “common definition of procedural due process is the opportunity
upon reasonable notice for a fair hearing before an impartial tribunal.” Id.
Biondo asserts that the credentialing committee unanimously recommended that
his request for medical staff privileges be approved by the Kootenai Hospital District
Board. Amended Compl. ¶ 7. He then asserts that the board met and denied his request for
medical staff privileges. Id. ¶ 8. Although the Amended Complaint does not directly state
that he was not given a hearing, it is easily implied that there was no hearing, and
Kootenai Health does not suggest otherwise in its brief. Biondo has thus asserted a valid
procedural due process claim.
In procedural due process claims, “the deprivation by state action of a
constitutionally protected interest in ‘life, liberty, or property’ is not in itself
unconstitutional; what is unconstitutional is the deprivation of such an interest without
due process of law.” Zinermon v. Burch, 494 U.S. 113, 125 (1990). Here, it is alleged
there was no hearing at all, despite the statutory requirement for one. Accordingly, the
Court will deny the motion to dismiss or for more definite statement as it relates to
Biondo’s due process claim.
2. Sherman Act Claim
Biondo alleges that Kootenai Health violated § 1 of the Sherman Act, which
prohibits “any contract, combination in the form of trust or otherwise, or conspiracy, in
restraint of trade or commerce.” 15 U.S.C. § 1. To state a claim under § 1, Biondo must
plead facts that plausibly suggest “(1) an agreement or conspiracy among two or more
MEMORANDUM DECISION AND ORDER - 5
persons or distinct business entities, (2) by which the persons or entities intend to harm or
restrain competition, and (3) which actually injures competition.” Les Shockley Racing,
Inc. v. Nat’l Hot Rod Ass’n, 884 F.2d 504, 507 (9th Cir. 1989). Additionally, he must
allege that Kootenai Health had “‘a conscious commitment to a common scheme
designed to achieve an unlawful object.’” Monsanto Co. v. Spray-Rite Corp., 465 U.S.
752, 764 (1984) (citation omitted).
Biondo has wholly failed to allege a violation of the Sherman Act. He simply
asserts that Kootenai Health engages in interstate commerce, and that it violated the
Sherman Act. But he does not indicate who the “two or more” persons or business are
who engaged in an agreement or conspiracy, he does not indicate how they intended to
harm or restrain competition, and he does not suggest any specific, actual injury to
competition. Accordingly, the Court will dismiss the Sherman Act claim, with leave to
amend as explained below.
3. Clayton Act Claim
The Clayton Act was created after the Sherman Act to specify certain prohibited
antitrust conduct. It addresses areas such as mergers and acquisitions, monopolies,
exclusive dealings, and price fixing. Biondo makes only a broad allegation that his denial
of medical staff privileges was motivated by Kootenai Health’s plan to limit privileges to
individuals or entities controlled by Kootenai Health. He references no particular section
of the Clayton Act, and he gives no explanation of how Kootenai Health’s actions violate
the Clayton Act. Under these circumstances, neither the defendant nor the Court can
MEMORANDUM DECISION AND ORDER - 6
understand his claims or respond to them. Accordingly, the Court will grant the motion to
dismiss with leave to amend as explained below.
4. Idaho Competition Act Claim
The Idaho Competition Act was created to “maintain and promote economic
competition in Idaho commerce. . . .” I.C. § 48-102(2). It is meant to be “construed in
harmony with federal judicial interpretations of comparable federal antitrust statutes. . . .”
I.C. § 102(3). Like the Sherman Act, the Idaho Competition Act delineates types of
prohibited antitrust behavior, such as conspiracies between two or more persons in
unreasonable restraint, monopolies, acquisitions to substantially lessen competition, etc.
I.C. § 48-104-106.
Biondo asserts that “[t]he actions of Kootenai Health have or will unreasonably
restrain trade in violation of Idaho Code § 48-104.” Amended Complaint, ¶ 31. Idaho
Code § 48-104 states that “[a] contract, combination, or conspiracy between two (2) or
more persons in unreasonable restraint of Idaho commerce is unlawful.” I.C. § 104. But
Biondo fails to reference any contract, he fails to identify the two or more persons
involved, and he fails to explain how any of this unreasonably restrains Idaho commerce.
Under these circumstances, the Court will grant the motion to dismiss the Idaho
Competition Act claim with leave to amend.
5. Leave to Amend
As explained above, a dismissal without leave to amend is improper unless it is
beyond doubt that the complaint “could not be saved by any amendment.” Harris v.
Amgen, Inc., 573 F.3d 728, 737 (9th Cir. 2009). Here, the Court has serious reservations
MEMORANDUM DECISION AND ORDER - 7
that Biondo can amend his complaint to assert the three antitrust claims addressed above.
But it is not beyond doubt – only because the Amended Complaint is completely lacking
in detail. Accordingly, the Court will grant Biondo leave to amend his antitrust claims,
but the Court cautions Biondo that he should not assert another set of antitrust claims
which he has no chance of proving. Biondo should only amend his complaint if he can
assert very detailed claims of how Kootenai Health has violated the antitrust laws.
For example, if he is asserting a Sherman Act claim, he must name the
conspirators and explain how they are conspiring to restrain commerce. If there is some
sort of anti-competitive contract, he must reference it. If Biondo is asserting a monopoly
on medical staff privileges, he must explain how Kootenai Health has a monopoly. He
must generally define the market which he claims is restrained. He must also allege how
the conduct of the conspiracy unreasonably restrains competition.
If he continues to assert a Clayton Act claim he must identify the specific
provisions of the Act which he alleges was violated by Kootenai Health. Then, he must
allege specific facts which cover each of the elements of that claim.
Likewise, if he believes he can make a viable claim under the Idaho Competition
Act, he must identify the specific antitrust behavior of Kootenai Health prohibited by the
Act, and then set forth factual allegations which satisfy each element of that claim.
In sum, the amended complaint must detail his allegations. Restating the antitrust
statutes, and simply suggesting that Kootenai Health’s actions are a violation of those
laws is not enough.
MEMORANDUM DECISION AND ORDER - 8
Finally, as counsel are aware, during the TSC counsel and the Court’s staff agreed
to postpone finalizing a discovery plan and CMO until after the Court issued a decision
on this motion to dismiss because the breadth of discovery is significantly affected by
whether the antitrust claims survive. Therefore, if Biondo decides not to amend his
complaint, counsel for Biondo should contact the Court immediately to schedule another
TSC. If Biondo chooses to amend his complaint, the Court will wait to see how Kootenai
Health responds before setting another TSC. If Kootenai Health files another motion to
dismiss, the Court will address that motion before setting the TSC. If Kootenai Health
files an answer, counsel for Kootenai Health should contact the Court to schedule the
TSC right away.
IT IS HEREBY ORDERED:
1. Defendant’s Motion to Dismiss or for an Order for More Definite Statement
(Dkt. 9) is GRANTED in part and DENIED in part as explained above.
Biondo may file an amended complaint within 14 days of the date of this order.
DATED: May 18, 2017
B. Lynn Winmill
United States District Court
MEMORANDUM DECISION AND ORDER - 9
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