PRIME HEALTHCARE SERVICES- MONROE, LLC v. INDIANA UNIVERSITY HEALTH BLOOMINGTON, INC.
ORDER granting IU Bloomington's 16 Motion to Dismiss. Count I is dismissed with prejudice. Monroe Hospital shall have through FRIDAY, OCTOBER 28, 2016, to show cause why Count II should not be dismissed for lack of subject matter jurisdicti on pursuant to Rule 12(b)(1). If Monroe Hospital does not show cause by that date, the court will dismiss Count II, close the case, and issue a Final Judgment in favor of IU Health Bloomington. Signed by Judge Richard L. Young on 9/30/2016. (TMD)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
PRIME HEALTHCARE SERVICESMONROE, LLC, doing business as
INDIANA UNIVERSITY HEALTH
BLOOMINGTON, INC., doing business as
IU HEALTH BLOOMINGTON
HOSPITAL EMERGENCY MEDICAL
TRANSPORT SERVICES, doing business
as IU HEALTH BLOOMINGTON
ENTRY ON DEFENDANT’S MOTION TO DISMISS
Plaintiff, Prime Healthcare Services—Monroe, LLC, d/b/a Monroe Hospital
(“Monroe Hospital”), filed this antitrust action, alleging violation of both federal and
state laws, against Defendant, Indiana University Health Bloomington, Inc., d/b/a IU
Health Bloomington Hospital Emergency Medical Transport Services, d/b/a IU Health
Bloomington Hospital (“IU Health Bloomington”). This matter now comes before the
court on Defendant’s Motion to Dismiss pursuant to Federal Rule of Civil Procedure
12(b)(6). For the reasons set forth below, the court GRANTS Defendant’s motion as to
Count I and orders the Plaintiff to show cause why Count II should not be dismissed for
lack of subject matter jurisdiction by Friday, October 28, 2016.
Historically, IU Health Bloomington’s predecessor, Bloomington Hospital, was
the only provider of emergency medical services and, through its ambulance service, the
only provider of emergency medical transportation services in Monroe County and
adjacent locations. (Docket No. 1, ¶ 2). In 2006, Monroe Hospital began operations at a
location in Bloomington only a few miles from Bloomington Hospital. (Id. ¶ 4). In 2011,
a series of acquisitions were completed resulting in Bloomington Hospital now being
known as IU Health Bloomington Hospital and its ambulance service as IU Health
Bloomington Hospital Emergency Medical Transport Services (“IU Ambulance”). (Id. ¶¶
3-4). Throughout this time, Monroe County and the City of Bloomington had entered into
exclusive agreements, pursuant to Ind. Code § 16-31-5-1, which permits municipalities to
contract for the provision of emergency medical services, designating IU Ambulance and
its predecessor as the providers of emergency medical transportation services in Monroe
County. (Id. ¶ 55).
Monroe Hospital accuses IU Health Bloomington of unlawfully abusing and
leveraging a municipally-granted monopoly, in the provision of emergency medical
transportation services in Monroe County. (Id. ¶ 1). The result, according to Monroe
Hospital, is that IU Health Bloomington has willfully maintained, protected, and
enhanced its monopoly power in the market for emergency medical services by engaging
in exclusionary, predatory, and unjustifiable conduct, a violation of federal and Indiana
antitrust law. (Id. ¶ 75). Monroe Hospital brings its action pursuant to 15 U.S.C. § 2
(Section 2 of the Sherman Act) (Count I) and Ind. Code § 24-1-2-2 (Count II).1
As an initial matter, IU Health Bloomington submits eight exhibits for the court to
consider, all of which refer to facts and evidence outside the pleadings. Documents that
are (1) referred to in a complaint, (2) are authentic, and (3) are central to a plaintiff’s
claim can be considered in a Rule 12(b)(6) motion to dismiss without converting it into a
motion for summary judgment. Hecker v. Deere & Co., 556 F.3d 575, 582 (7th Cir. 2009)
(citing Tierney v. Vahle, 304 F.3d 734, 738 (7th Cir. 2002)). If those requirements are not
satisfied, the district court may also take judicial notice of matters of public record
without converting a 12(b)(6) motion into a motion for summary judgment. U.S. v. Wood,
925 F.2d 1580, 1582 (7th Cir. 1991). Courts have considered the public record to include
information available on a government website and proceedings of another court or
agency. Henson v. CSC Credit Services, et al., 29 F.3d 280, 284 (7th Cir. 1994); see also
FED. R. EVID. 201; Denius v. Dunlap, 330 F.3d 919, 926-27 (7th Cir. 2003) (holding
judicial notice of information from government’s official website is proper); Opoka v.
INS, 94 F.3d 392, 394 (7th Cir. 1996) (holding judicial notice of proceedings of another
court or agency is proper).
Indiana courts interpret Indiana’s monopoly law in harmony with § 2 of the Sherman Antitrust
Act. See Berghausen v. Microsoft Corp., 765 N.E.2d 592, 594 (Ind. Ct. App. 2002) (“The
Indiana Act was modeled after section two of the Sherman Antitrust Act, 15 U.S.C. 2, . . . and
has been interpreted consistent with the federal law interpreting the Federal Act.”). Thus, the
federal authority used throughout this opinion apply equally to the state antitrust count, unless
specified otherwise, and the resulting relief from this opinion will be applicable to both counts.
IU Health Bloomington asserts that these materials are appropriate for the court to
consider in a Rule 12(b)(6) motion because they are either referred to by Monroe
Hospital in the Complaint and are central to the claims, or they are public record. (Docket
No. 17 at ECF p. 7). Monroe Hospital disagrees, arguing: (1) they are central to IU
Health Bloomington’s state action doctrine immunity argument, not to Plaintiff’s
Complaint; (2) they do not include materials that are subject to judicial notice; and (3)
Exhibits 1 and 6 are not self-authenticating. (Docket No. 23 at ECF p. 18-20).
The eight exhibits attached to IU Health Bloomington’s Brief in Support of its
Motion to Dismiss can be divided into two groups, one group where judicial notice is
proper and one group where it is not. Exhibits 2 and 3 are administrative orders issued by
the Emergency Medical Services Commission of the Indiana Department of Homeland
Security. These agency proceedings are deemed public record. See Opoka, 94 F.3d at
394. Exhibits 4, 5, 7, and 8 include information that is available through either Monroe
County’s webpage or the State of Indiana’s webpage. This information from government
websites is also public record, properly submitted for judicial notice. See Denius, 330
F.3d at 926-27. For purposes of this motion, the court will consider these documents.
However, Exhibit 1, an ambulance agreement between Monroe County and
Bloomington Hospital, and Exhibit 6, Monroe County Ambulance Advisory Board
Meeting Minutes, cannot be deemed public records based on the information provided by
IU Health Bloomington. There was no information suggesting that the public has
unqualified access to the documents via a website or otherwise. See Travelers Cas. and
Sur. Co. of Am. V. Consol. City of Indianapolis, Indiana, No. 1:13-cv-01276-MJD-TWP,
2014 WL 5509312, at *2, n.2 (S.D. Ind. Oct. 21, 2014) (taking judicial notice of meeting
minutes of the Board of Public Works as they are available on a government website);
see also Pension Ben. Guar. Corp. v. White Consol. Industries, Inc., 998 F.2d 1192, 1197
(3d Cir. 1993) (holding document is not a public record if the public does not have
unqualified access to it). Here, IU Health Bloomington provides insufficient information
to qualify Exhibits 1 or 6 as public records that are appropriate for judicial notice.
Finally, neither Exhibit 1 or 6 meet the alternative set of requirements to be
considered by the court for purposes of the current motion (i.e., neither are referred to in
the Complaint, are authentic, and are central to a plaintiff’s claim). See Hecker, 556 F.3d
at 582. Exhibit 1, the ambulance agreement, is referenced in Monroe Hospital’s
Complaint and is, arguably, central to its claim that the “municipally-granted monopoly”
is the foundation to IU Health Bloomington’s exclusionary conduct. (See Compl. ¶¶ 1, 2,
7, 55). However, the agreement is not properly authenticated. The declaration submitted
by Attorney Hurley is insufficient to properly authenticate Exhibit 1 because the
declarant provides no support as to his personal knowledge of the document and the facts
do not provide otherwise. See Wright v. Associated Ins. Companies Inc., 29 F.3d 1244,
1248 (7th Cir. 1994) (finding it adequate personal knowledge for the purposes of
authentication when affiant, as vice president, stated that he was charged with
administering the agreement and subsequent amendments within his affidavit); see also
Romanelli v. Suliene, No. 07-C-19-C, 2007 WL 5490671, at *2 (W.D. Wis. May 16,
2007) (“[D]ocuments must be authenticated. . . [by an] affidavit of someone who testifies
on personal knowledge . . .”). Exhibit 6 is not referred to in the Complaint or properly
authenticated. Therefore, neither Exhibit 1 nor Exhibit 6 have been considered for
purposes of this motion.
Motion to Dismiss Standard
When considering a motion to dismiss pursuant to Federal Rule of Civil Procedure
12(b)(6), the court takes all well-pleaded allegations in the complaint as true and draws
all inferences in favor of the plaintiff. Bielanski v. County of Kane, 550 F.3d 632, 633
(7th Cir. 2008) (citations omitted). The recitation of facts comes, therefore, from Monroe
Hospital’s Complaint. The “‘[f]actual allegations must be enough to raise a right to relief
above the speculative level.’” Pisciotta v. Old Nat. Bancorp, 499 F.3d 629, 633 (7th Cir.
2007) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007). See also Fed. R.
Civ. P. 8(a). Stated differently, a complaint must include sufficient facts that “a claim to
relief is plausible on its face.” Hecker v. Deere & Co, 556 F.3d 575, 580 (7th Cir. 2009)
(citations omitted). To be facially plausible, the complaint must allow “the court to draw
the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft
v. Iqbal, 556 U.S. 662 (2009) (citation omitted). Finally, the court must not apply a
heightened pleading standard in antitrust cases. Endsley v. City of Chicago, 230 F.3d 276,
282 (7th Cir. 2000).
A. Exclusionary Conduct
IU Health Bloomington contends that Monroe Hospital has not sufficiently stated
a claim for relief as it has not alleged conduct that is considered “exclusionary” under
Section 2 of the Sherman Antitrust Act. (Docket No. 17 at ECF p. 8). Section 2 of the
Sherman Act requires two elements to be met: “(1) the possession of monopoly power in
the relevant market and (2) the willful acquisition or maintenance of that power as
distinguished from growth or development as a consequence of a superior product,
business acumen, or historic accident.” U.S. v. Grinnell, 384 U.S. 563, 571 (1966). IU
Health Bloomington does not raise arguments under the first element; therefore, the court
will limit its discussion to the second element.
The second element is described by courts as “exclusionary,” “anticompetitive,” or
“predatory” conduct. See, e.g., Verizon Communications Inc. v. Law Offices of Curtis V.
Trinko, LLP, 540 U.S. 398, 407 (2004); Mercatus Group, LLC v. Lake Forest Hosp., 641
F.3d 834, 854 (7th Cir. 2011) (quoting State of Illinois ex rel. Burris v. Panhandle
Eastern Pipe Line Co., 935 F.2d 1469, 1481 (7th Cir. 1991) (“Section 2 forbids not the
intentional pursuit of monopoly power but the employment of unjustifiable means to gain
that power.”)). To determine whether conduct is exclusionary, a court cannot solely
consider the conduct’s effect on the competitor, but must also consider the conduct’s
impact on consumers and whether it has impaired competition in an unnecessarily
restrictive way. Aspen Skiing Co., 472 U.S. 585, 605 (1985). “If a firm has been
‘attempting to exclude rivals on some basis other than efficiency,’ it is fair to characterize
its behavior as predatory.” Id. (citing R. Bork, The Antitrust Paradox 160 (1978)).
In Monroe Hospital’s Complaint, within a section entitled “Defendant’s
Exclusionary Conduct,” Monroe Hospital alleges that IU Ambulance and its predecessor
have been the sole designated providers, pursuant to Ind. Code § 16-31-5-1, of
emergency medical transportation services in Monroe County since Monroe Hospital
began operations in 2006. (Compl. ¶ 54, 55). IU Health Bloomington has “continuously
and consistently delivered the vast majority [95%] of emergency medical transportation
patients” to IU Health Bloomington despite protocols for emergency medical
transportation, both as established by law and dictated by the applicable standard of care.
(Id. ¶ 56, 57). Monroe Hospital has received information that individuals transported by
IU Ambulance have been taken to IU Health Bloomington even though they have
requested to be transported to Monroe Hospital. (Id. ¶ 59). Finally, Monroe Hospital has
alleged that this exclusionary conduct constitutes unlawful abuse and leveraging of an
existing monopoly, predatory conduct and unjustifiable conduct by Defendant for the
purpose of acquiring, protecting and enhancing the monopoly power of IU Health
Bloomington in the market for emergency medical services in Monroe County and
adjacent locations. (Id. ¶ 62).
IU Health Bloomington asserts, overall, that it has no positive duty to assist its
competitors. (Docket No. 17 at ECF p. 11). Second, it contends that Monroe Hospital has
not alleged actionable exclusionary conduct because the “vague” evidence cited in the
Complaint does not meet the Seventh Circuit’s “strict view of the exclusionary conduct
requirement.” (Docket No. 17 at ECF pp. 9, 12-16). This view, IU Health Bloomington
contends, includes specific categories of exclusionary conduct that have been recognized
by the courts. (Docket No. 17 at ECF p. 11). Finally, it argues that Monroe Hospital’s
allegations that it engaged in “monopoly leveraging” are not sufficient to state a § 2
Sherman Antitrust Act claim because courts have recognized that monopoly leveraging,
absent separate exclusionary conduct, does not satisfy the second element. (Docket No.
17 at ECF pp. 11-14). On the other hand, Monroe Hospital asserts that exclusionary
conduct is not categorically limited and its Complaint sets forth sufficient allegations to
establish IU Health Bloomington’s conduct has impaired competition in an unnecessarily
restrictive way. (Docket No. 23 at ECF p. 13-15). Monroe Hospital contends that even if
“monopoly leveraging” is not a standalone theory of exclusionary conduct, it has
sufficiently alleged other exclusionary conduct to satisfy the second element. (Docket
No. 23 at ECF p. 16).
The Seventh Circuit has not explicitly held that “exclusionary conduct” must fit
into an established category of anticompetitive conduct. Instead, the appellate court has
consistently held that the second element can be met by showing that the monopolist
engaged in predatory or anticompetitive conduct of some kind. See Mercatus Group,
LLC, 641 F.3d at 854; State of Illinois ex rel. Burris v. Panhandle Eastern Pipe Line Co.,
935 F.2d 1469, 1481 (7th Cir. 2011); and Chillicothe Sand & Gravel Co. v. Martin
Marietta Corp., 615 F.2d 427, 430 (7th Cir. 1980). Therefore, although Monroe Hospital
did not specifically classify the alleged conduct in a previously recognized category, this
will not foreclose it if this court finds it has otherwise sufficiently pled exclusionary
While IU Health Bloomington is correct that a monopoly power has no general
duty to provide a “fair share” of the market to its competitors, the right to deny access to
other entities is not unqualified. Olympia Equipment Leasing Co. v. Western Union
Telegraph Co., 797 F.2d 370, 379 (7th Cir. 1986). (“[A] monopolist may be guilty of
monopolization if it refuses to cooperate with a competitor in circumstances where some
cooperation is indispensable to effective competition.”). As cited above, Monroe Hospital
has alleged “[d]espite and contrary to protocols for emergency medical transportation . . .
IU Ambulance and its predecessor have continuously and consistently delivered the vast
majority of emergency medical transportation patients to whom they have provided
services to IU Hospital.” (Compl. ¶ 55). The effect is that Monroe Hospital has
information that patients were taken to IU Health Bloomington for treatment instead of
Monroe Hospital in violation of the protocols and against consumer choice. (Id. ¶¶ 55,
59). This conduct, particularly given IU Ambulance’s exclusive agreement with Monroe
County, is sufficient to state a claim that is plausible on its face. See Hecker, 556 F.3d at
580. Monroe Hospital’s assertions outline that the IU Ambulance’s patient delivery
procedures, which violated protocols, foreclosed competition by Monroe Hospital’s
emergency department and displaced consumer choice. These are the necessary
assertions to meet the requirements of element two of a § 2 Sherman Antitrust Act claim.
See Aspen Skiing Co., 472 U.S. at 605 (holding exclusionary conduct must be assessed by
considering the effect of the conduct on the competitor and consumers to determine
whether the conduct has impaired competition in an unnecessarily restrictive way).
Finally, although IU Health Bloomington is correct that the Court in Verizon
Communications Inc. v. Law Offices of Curtis V. Trinko, LLP, stated that monopoly
leveraging “presupposes anticompetitive conduct,” it ignores the fact that Monroe
Hospital has set forth additional conduct it purports was anticompetitive. 540 U.S. at 415
n.14. As outlined above, not only has Monroe Hospital made additional assertions of
exclusionary conduct, but these assertions meet the requirements of Federal Rule of Civil
Procedure Rule 8(a).
B. State Action Doctrine (Count I)
Next, IU Health Bloomington contends that even if Monroe Hospital properly
alleged exclusionary conduct, IU Health Bloomington is immune from federal antitrust
liability under the state action doctrine. (Docket No. 17 at ECF p. 17). The “state action
doctrine provides an exemption from the federal antitrust laws and, if applicable, allows
for dismissal of the complaint.” Marrese v. Interqual, Inc., 748 F.2d 373, 384 (7th Cir.
1984) (emphasis in original), abrogated on other grounds by Hammes v. AAMCO
Transmissions, Inc., 33 F.3d 774, 779 (7th Cir. 1994). The state action doctrine seeks to
preserve the principles of state sovereignty and federalism without disregarding the
procompetitive, free enterprise principles that compose the federal antitrust laws.
Marrese, 748 F.2d at 386. This doctrine recognizes that in circumstances where sufficient
state action is present, there is a reduced “concern that federal policy is being
unnecessarily and inappropriately subordinated to state policy.” Id. at 387 (citing Bates v.
State Bar of Arizona, 433 U.S. 350, 362 (1977)). The doctrine exempts private entities
like IU Health Bloomington from antitrust laws if the alleged anticompetitive activity
was (1) “clearly articulated and affirmatively expressed as state policy,” and their actions
were (2) “actively supervised by the State itself.” Id. at 386 (quoting California Retail
Liquor Dealers Ass’n v. Midcal Aluminum Inc., 445 U.S. 97, 105 (1980)).
The first prong, the clear articulation prong, does not require a state to specifically
authorize conduct with anticompetitive effects, so long as those anticompetitive effects
are a foreseeable consequence of engaging in the authorized activity. LaSalle Nat’l Bank
of Chicago v. DuPage Cnty., 777 F.2d 377, 381 (7th Cir. 1985); see also N. Carolina
State Bd. Of Dental Exam’rs v. FTC, ___ U.S. ___, 135 S. Ct. 1101, 1112 (2015)
(citation omitted) (“‘[T]he State must have foreseen and implicitly endorsed the
anticompetitive effects as consistent with its policy goals.’”). The second prong, the
active supervision requirement, requires that state officials have the right “‘to review
particular anticompetitive acts of private parties and disapprove those that fail to accord
with the state policy.’” N. Carolina State Bd. Of Dental Exam’rs, 135 S. Ct. at 1112. The
active supervision requirement stems from the recognition that when “a private party is
engaging in the anticompetitive activity, there is a real danger that he is acting to further
his own interests, rather than the governmental interests of the State.” Hallie v. Eau
Claire, 471 U.S. 34, 47 (1985). The requirement is intended to ensure that the state action
doctrine will shelter only the particular anticompetitive acts of private parties that, in the
eyes of the state, actually further state regulatory policies. Id. at 46-47. To accomplish
this purpose, the active supervision element requires that the State exercise ultimate
control over the challenged anticompetitive conduct. Patrick v. Burget, 486 U.S. 94, 101
(1988). The mere presence of state involvement or monitoring does not suffice. Id.
IU Health Bloomington asserts that these requirements have been met in this case.
(Docket No. 17 at ECF pp. 17-27). In regard to the first element, IU Health Bloomington
argues Indiana clearly articulated the alleged exclusionary conduct as state policy when it
allowed counties to contract for emergency transportation services, and gave ambulance
providers the flexibility to set their own emergency transportation protocols. (Docket No.
17 at ECF p. 17). IU Health Bloomington also contends that the second element is met as
Indiana supervises ambulance providers to ensure they comply with regulations,
including the regulation addressing transportation protocols. (Docket No. 17 at ECF p.
17). On the other hand, Monroe Hospital asserts that IU Health Bloomington improperly
conflates the market for emergency medical transportation services and the market for
emergency medical services into a single market allegedly subject to regulation and
supervision. (Docket No. 23 at ECF p. 22). Further, Monroe Hospital argues that Indiana
did not explicitly grant authority for anticompetitive conduct in the emergency medical
services market, nor was the anticompetitive conduct foreseeable and implicitly endorsed
by the state. (Docket No. 23 at ECF p. 23). Finally, Monroe Hospital argues that the
anticompetitive impact of IU Health Bloomington’s conduct is in the emergency medical
services market, which is not covered by the transportation regulations and therefore not
subject to the supervision that IU Health Bloomington asserts provides it immunity.
(Docket No. 23 at ECF p. 25-26).
As an initial matter, the court must address Monroe Hospital’s contention that IU
Health Bloomington conflates the markets for emergency medical transportation services
and emergency medical services to argue that the state action doctrine applies. In support
of this argument, Monroe Hospital points out that the anticompetitive impact is in the
emergency medical services market and, therefore, this is the market the court should be
analyzing for the state action issue. (Docket No. 23 at ECF pp. 25-26). However, the
conduct that Monroe Hospital contends is exclusionary is IU Ambulance’s delivery of
patients, which Monroe Hospital argues is in violation of appropriate protocol. (Compl.
¶¶ 54-62). In fact, Monroe Hospital does not assert any exclusionary conduct in the
emergency medical services market, itself, in the Complaint. Instead, only the effect of
that conduct occurs in the emergency medical services market. Therefore, the state action
doctrine’s applicability does depend upon whether the two-prong test outlined above can
be met with regard to the emergency medical transportation services, for this is the
market where the anticompetitive conduct set forth in Monroe Hospital’s Complaint
A review of applicable state law is necessary in order to assess the applicability of
the state action doctrine to this matter. Title 16, Article 31 of the Indiana Code governs
emergency medical services,2 providing that “the provision of emergency medical
services is a matter of vital concern affecting the public health, safety, and welfare of the
people of Indiana,” I.C. § 16-31-1-1(a), and “an essential purpose of the political
subdivisions of the state.” I.C. § 16-31-1-2. Pursuant to Ind. Code § 16-31-5-1, the
governing body of a city, town, township or county may contract for the provision of
emergency medical services. I.C. § 16-31-5-1. This is the very provision used by Monroe
County and the City of Bloomington in creating the exclusive contract with IU
Ambulance for its emergency medical transportation services. (Compl. ¶ 55). Moreover,
the Indiana legislature created “the Indiana emergency medical services commission”
(“EMS Commission”) to, among other things, “[d]evelop and promote, in cooperation
with state, regional, and local public and private organizations, agencies, and persons, a
The Indiana Code’s use of this phrase includes ambulatory services.
statewide program for the provision of [EMS] that must include . . . [p]reparation of state,
regional, and local emergency ambulance service plans.” I.C. § 16-31-2-7(a)(1)(A). This
commission, composed of thirteen members appointed by the governor for four year
terms, also provides “consultative services to state, regional, and local organizations and
agencies in developing and implementing emergency ambulance service programs.” I.C.
§ 16-31-2-7(a)(1)(B). Finally, it “[a]dopt[s] rules required to implement an approved
system of emergency medical services” and “concerning triage and transportation
protocols for the transportation of trauma patients consistent with the field triage decision
scheme of the American College of Surgeons Committee on Trauma.” I.C. § 16-31-27(a)(3), (4).
The EMS Commission also established “a regulatory plan to ensure that injured
patients in the pre-hospital setting are transported to the most appropriate hospital facility
within the Indiana state trauma system.” 836 Ind. Admin. Code 1-2.1-1. The EMS
Commission’s transport destination protocol incorporates by reference “Figure 2, Field
triage of injured patients-United States 2011,” published by the Centers for Disease
Control (“CDC”), which is a detailed flow-chart recommending where ambulance
providers should take emergency patients in certain situations and includes some
instruction on when consumer preference should be considered. (Compl. ¶ 20). See also
836 Ind. Admin. Code 1-2.1-6. The EMS Commission regulations further elaborate upon
the CDC triage report by requiring the delivery of emergency patients, depending upon
the severity of the injuries, to either (1) a trauma center or (2) “the nearest appropriate
hospital as determined by the provider’s protocols.” 836 Ind. Admin. Code 1-2.1-4(b).
These provider protocols are defined as “a written guidance, prepared by the provider’s
medical director, detailing trauma field triage and transport destination procedures that
shall be based on the field triage decision scheme.” 836 Ind. Admin. Code 1-2.1-3(5).
The medical director is an emergency physician that each ambulance provider must
appoint to supervise the emergency transportation system. See 836 Ind. Admin. Code 11-1(35), -2-1(e). In this case, the emergency physician appointed as the IU Ambulance
medical director is an IU Health Bloomington physician. (Compl. ¶ 24).
In considering the alleged anticompetitive conduct, the court must first determine
whether the aforementioned state legislative acts authorize the challenged conduct and
then determine whether anticompetitive effects are a foreseeable result of the
authorization. Thereafter, the court will consider whether the State of Indiana “actively
supervises” IU Ambulance’s delivery of patients to determine if it is in accordance with
protocols, both as established by law and as dictated by the applicable standard of care.
An affirmative determination to both questions will lead to the conclusion that the state
intended the private actor conduct to be exempt from federal antitrust laws.
In regard to the first prong, the “clear articulation prong,” this court concludes that
the conduct alleged by Monroe Hospital was a foreseeable consequence of engaging in
the authorized activity. As outlined above, the State of Indiana authorized contracts such
as the one between IU Health Bloomington and Monroe County and the City of
Bloomington to exist. See I.C. § 16-31-5-1. The Indiana legislature created the EMS
Commission, which in turn established “a regulatory plan to ensure that injured patients
in the pre-hospital setting are transported to the most appropriate facility within the
Indiana trauma system.” 836 Ind. Admin. Code 1-2.1-1. The State of Indiana included in
this plan that the provider, here IU Ambulance, had authority to develop its own
protocols to determine the nearest appropriate hospital. See 836 Ind. Admin Code 1-2.14(b). Furthermore, the State of Indiana defined these provider protocols as guidance
prepared by the provider’s medical director, here an IU Health Bloomington physician,
which detail the trauma field triage and transport destination procedures to be used by the
provider. See 836 Ind. Admin. Code 1-2.1-3(5). Combined, these provisions show that
the State of Indiana authorized providers to develop their own protocols, so long as they
were in accordance with state law and the field triage decision scheme. Moreover, as
discussed in more detail in prong two, below, the EMS Commission has authority to
review not only the provider developed procedures, but also the provider’s execution of
its duties to ensure it is in accordance with those procedures. See I.C. § 16-31-2-11(a);
836 Ind. Admin. Code 1-2.1-4. Given that the legislature authorized providers to develop
their own procedures and created a state supervisory process to review both the
providers’ procedures and the providers’ conduct to carry out that procedure, it is
foreseeable that a provider, such as IU Ambulance, could develop procedures or violate
procedures it had developed, which resulted in an anticompetitive effect. If such
anticompetitive impact was not foreseeable, it is unlikely that the General Assembly
would have developed such a comprehensive regulatory plan for State oversight.
Turning to the second prong, the court must consider whether the State of Indiana
“actively supervises” IU Ambulance’s delivery of patients to determine if it is in
accordance with protocols, both as established by law and as dictated by the applicable
standard of care. The Indiana statutory scheme provides that the EMS Commission “shall
develop procedures for ongoing review of all emergency ambulance services.” I.C. § 1631-2-11(a). The EMS Commission provides supervision over emergency ambulance
services and “may review any pre-hospital ambulance rescue report record regarding an
emergency patient.” I.C. § 16-31-2-11(b). Ambulance providers must “hold a valid
certificate issued by the commission.” I.C. § 16-31-3-1(b)(3). A “person holding a
certificate or license” issued by the EMS Commission “must comply with the applicable
standards and rules,” and is subject to “disciplinary sanctions . . . if the department of
homeland security determines that the certificate or license holder . . . fails to comply and
maintain compliance with or violates any applicable provision, standard or other
requirement.” I.C. § 16-31-3-14(a)(7). The EMS Commission exercises this authority by
reviewing practices and adherence to all applicable regulations. For example, all
ambulance providers must include the “[d]estination/transferred to, name . . . [and]
[r]eason for choosing destination” in monthly reports that it submits to the Commission.
836 Ind. Admin. Code 1-1-5(b)(92), (98).
Most relevant here, the EMS Commission’s oversight includes review of the
providers’ compliance with transportation destination procedures. See 836 Ind. Admin.
Code 1-2.1-4. The EMS Commission may effectuate disciplinary action, which includes
revocation or suspension of the certificate or license, censure, letters of reprimand,
probation, and “[a]ssessment of a civil penalty against the certificate holder or license
holder.” I.C. § 16-31-3-14(b). Finally, any member of the public may file a complaint
with the EMS Commission on its website. Indiana Department of Homeland Security,
EMS Complaint Reporting, http://www.in.gov/dhs/3782.htm (last visited Sept. 27, 2016).
This system allows “concerned members of the public and the emergency medical
services community to report EMS issues and complaints directly to the agency.” Id.
In sum, the State of Indiana’s statutory scheme created the EMS Commission to
develop procedures for ongoing review of emergency ambulance services, I.C. § 16-31-211(a) and, using that authority, the EMS Commission developed administrative codes and
rules regulating Indiana’s emergency medical services, including oversight of provider
compliance with transportation destination procedures. See 836 Ind. Admin. Code 1-2.14. The EMS Commission effectuates this oversight via administrative proceedings
pursuant to the authority of Ind. Code § 4-21.5-3-6 and Ind. Code § 16-31-3-14. Pursuant
to Ind. Code § 4-21.5-3-7 of the Administrative Orders and Procedures Act, the Findings
and Order of the EMS Commission is appealable. In light of this, it is clear that there is
an adequate forum for Monroe Hospital to challenge IU Health Bloomington’s alleged
violations of “protocols for emergency medical transportation, both as established by law
and as dictated by the applicable standard of care.” (Compl. ¶ 56). Monroe Hospital’s
antitrust lawsuit, attacking IU Ambulance’s motivations in determining the “appropriate”
hospital—a determination that is governed by state and local laws—circumvents the State
of Indiana’s statutory scheme. Moreover, it is notable that the purpose of the Sherman
Act is to be used as a “consumer welfare prescription.” NCAA v. Board of Regents of
Univ. of Okla., 468 U.S. 85 (1984) (quoting Reiter v. Sonotone Corp., 442 U.S. 330, 343
(1979)). The State of Indiana, by its statutory scheme and through the enactment of the
EMS Commission, has developed comprehensive oversight of emergency medical
services to protect consumer welfare. Therefore, permitting this lawsuit to go forward
circumvents the process in favor of a federal forum. This is the very scenario the stateaction doctrine was intended to prevent.
Thus, the court holds that the Defendant’s actions are exempt from federal
antitrust laws under the doctrine of state action. Count I shall be dismissed with
C. Indiana Antitrust Law Immunity (Count II)
Finally, IU Health Bloomington contends that it is immune from state antitrust
liability, which is the second count in Monroe Hospital’s Complaint, because it is a
municipal contractor acting under a comprehensive regulatory scheme and supervised by
the state. (Docket No. 17 at ECF p. 28). To support this assertion, IU Health Bloomington
cites Brownsburg Cnty. Sch. Corp. v. Natare Corp., where the Indiana Supreme Court
held—as a matter of first impression—that the state Antitrust Act does not create a civil
treble damage remedy against an arm of the government. 824 N.E.2d 336, 339 (Ind.
2005). In Brownsburg Cnty. Sch. Corp., the court concluded that the Indiana legislature
did not intend to subject municipalities to antitrust liability because, among other reasons,
government entities are not profit-seeking entities that can be deterred by prohibitions on
anticompetitive activity. Id. at 346, 348-49. In coming to this conclusion, the court
explicitly rejected the applicability of the state action principles outlined in Parker to the
Indiana Antitrust Act. Id. at 348. The court does not agree with IU Health Bloomington’s
contention that this logic as applied to municipalities naturally extends to private entities
when those entities have a contract with a municipality. The holding in Brownsburg
Community School Corp., was intended for municipal actors, as is apparent from the
court’s detailed review of the factors that differentiated a municipality from a private
entity, including the lack of profit-seeking objectives. See id.
Regardless, given the dismissal of Count I, as outlined above, this court lacks
subject matter jurisdiction over Count II, a state law claim. A federal court has a
responsibility to “police subject matter jurisdiction sua sponte.” Hay v. Ind. State Bd. Of
Tax Com’rs, 312 F.3d 876, 879 (7th Cir. 2002). Federal courts are courts of limited
jurisdiction. Teamsters Nat. Automotive Transporters Industry Negotiating Committee v.
Troha, 328 F.3d 325, 327 (7th Cir. 2003). The federal courts may only exercise
jurisdiction over cases when that jurisdiction is “specifically authorized by federal
statute.” Id. Jurisdiction exists when a complaint contains a claim that arises under
federal law (28 U.S.C. § 1331) or satisfies the requirements of the diversity jurisdiction
(28 U.S.C. § 1332). Bovee v. Broom, 732 F.3d 743, 744 (7th Cir. 2013).
Once jurisdiction over a case is determined to be absent, the only course is to note
the absence of jurisdiction and dismiss the case pursuant to that ground. See Steel Co. v.
Citizens for a Better Environment, 523 U.S. 83, 94 (1998). However, the Seventh Circuit
“generally discourage[s] district courts from sua sponte dismissing a complaint for lack
of subject matter jurisdiction without first providing the plaintiff notice and a hearing or
an opportunity to amend. Such a dismissal is improper unless the jurisdictional defect is
incurable.” George v. Islamic Republic of Iran, 63 F. App’x 917, 918 (7th Cir. 2003)
(citing Frey v. EPA, 270 F.2d 1129, 1132 (7th Cir. 2001)). Previously, the court had
supplemental jurisdiction (28 U.S.C. § 1367) over Count II because, as alleged by
Monroe Hospital, it was directly related to the Plaintiff’s federal antitrust claims and
formed part of the same case or controversy. (Compl. ¶ 16). Based on the aforementioned
standards, Monroe Hospital is notified of the absence of jurisdiction in this court and
directed to show cause why the Complaint should not be dismissed.
Therefore, IU Health Bloomington’s Motion to Dismiss (Docket No. 16) is
GRANTED. Count I is DISMISSED WITH PREJUDICE pursuant to Rule 12(b)(6).
Monroe Hospital shall have through FRIDAY, OCTOBER 28, 2016, to show cause why
Count II should not be dismissed for lack of subject matter jurisdiction pursuant to Rule
12(b)(1). If Monroe Hospital does not show cause by that date, the court will dismiss
Count II, close the case, and issue a Final Judgment in favor of IU Health Bloomington.
SO ORDERED this 30th day of September 2016.
RICHARD L. YOUNG, L. YOUNG, CHIEF JUDGE
RICHARD CHIEF JUDGE
United States District CourtDistrict Court
Southern District of Indiana of Indiana
Distributed Electronically to Registered Counsel of Record.
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