B R F H H Shreveport L L C v. Willis-Knighton Medical Center

Filing 121

MEMORANDUM RULING denying #30 Motion to Dismiss for Failure to State a Claim. Signed by Judge Elizabeth E Foote on 3/31/2016. (crt,Keifer, K)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
SHREVEPORT DIVISION
BRFHH SHREVEPORT, LLC, ET AL

CIVIL ACTION NO. 15-2057

VERSUS

JUDGE ELIZABETH ERNY FOOTE

WILLIS KNIGHTON MEDICAL CENTER

MAGISTRATE JUDGE HORNSBY

MEMORANDUM RULING
Plaintiffs BRFHH Shreveport, LLC (“BRFHH”), and Vantage Health Plan, Inc.
(“Vantage”), a healthcare provider and a healthcare insurer respectively, allege that past
and present acquisitions by the Defendant, also a healthcare provider, in Shreveport and
Bossier City, Louisiana, violate federal antitrust laws. Before the Court is the Defendant’s
Motion To Dismiss, [Record Document 30], limited at this stage in the litigation to the
question of whether Federal Rule of Civil Procedure 12(b)(6) requires dismissal of Plaintiff
Vantage Health Plan Inc.’s federal monopolization claims, Record Document 83. The
parties have extensively briefed this question, together filing three memorandums on the
initial, broader dismissal arguments raised by the Defendant, Record Documents 30, 65,
75, and four memorandums on the narrower dismissal issue now before the Court, Record
Documents 89, 90, 93, 97. After consideration of the foregoing, the Court hereby DENIES
the Defendant’s motion.

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I.

Background
A. The Parties
Plaintiff BRFHH Shreveport, LLC, is the operator of University Health Hospital

("University Health") in Shreveport. Once a state-owned and -operated charity hospital,
University Health has been operated by BRFHH Shreveport since September of 2013, when
Louisiana State University (“LSU”), whose neighboring medical school has traditionally
supplied physicians for University Hospital, and the parent entities of BRFHH Shreveport
signed a Cooperative Endeavor Agreement transferring hospital management authority
from the state of Louisiana to BRFHH Shreveport’s parent entity. Record Documents 49,
p. 3, and 77-1, p. 89. The privatization effected by the 2013 agreement, however, is not
unbounded: under the terms of the 2013 agreement, University Hospital continues to
depend exclusively on admissions from LSU physicians and treat a substantial portion of
the Shreveport area’s indigent population. Record Document 1, p. 6, 8. According to
BRFHH Shreveport, sustaining these mandates while remaining financially viable requires
that a critical, if minority, mass of the patients treated at University Health have private,
commercial insurance; the higher reimbursement rates associated with commercial
insurance help offset the relatively low profitability of treating the indigent. Id. at 8.
Vantage Health Plan, Inc., is a health insurance provider specializing in lower-cost HMO
coverage. Id. at 6, 18. Vantage is headquartered in Monroe, Louisiana, where the large
majority of its 35,000 subscribers reside. Id. at p. 6, 18, 43. Defendant Willis-Knighton
Medical Center (“Willis-Knighton”) is a competing healthcare provider that operates four

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hospitals and at least six free-standing clinics in Shreveport and Bossier City. Record
Document 48, p. 39. University Health participates in Vantage’s Tier-1 network; WillisKnighton does not. Id. at 18.
B. Relevant Geographic Market
According to the Plaintiffs, Shreveport and Bossier City (the “Shreveport area”)
together form the relevant geographic market in which Defendant’s antitrust violations
occurred and will occur. Id. at 43. Within the Shreveport area there are three entities that
operate hospitals: Willis-Knighton, BRFHH Shreveport, and CHRISTUS Health Northern
Louisiana (“CHRISTUS”). Id. at 7. According to the Plaintiffs, Willis-Knighton’s share of
hospital admissions in the Shreveport area is approximately 60% overall and approximately
75% among commercially insured patients, while University Health and CHRISTUS each
approximately have a 12% share of commercially insured patients. Id.
C. Plaintiffs’ Claims
1. Past Conduct
BRFHH Shreveport and Vantage describe two sets of antitrust claims. The first set
is about prior conduct: Vantage–and Vantage alone–asserts that some of Willis-Knighton’s
prior acquisitions, physician referral practices, and non-compete employment contracts
violated section 2 of the Sherman Act, which prohibits monopolization and attempted
monopolization, and section 7 of the Clayton Act, which prohibits anticompetitive
acquisitions and mergers. Id. at 10, 15-21, 74-76. From Vantage’s perspective, this priorconduct theory of liability explains how Willis-Knighton has historically violated antitrust

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laws to exclude Vantage from participating in the Shreveport area healthcare insurance
market and why Vantage is therefore entitled to recover damages. It proceeds in four
parts.
First, at some point in the last fifteen years, Willis-Knighton allegedly gained
monopoly power in the Shreveport area in at least the markets for general acute-care
hospital services, adult primary care, and Obstetrics/Gynecology (“Ob/Gyn”). Id. at 10, 74.
As broad evidence of this ascent, the complaint states that since 2000, Willis-Knighton has
enjoyed a sevenfold increase in the number of physicians it employs and a fivefold increase
in revenues.1 Id. at 10. It cites assertions made by Willis-Knighton CEO James Elrod in
his autobiography that Willis-Knighton is the “dominant” provider in the area. Id. at 10.
It also alleges that based on Blue Cross reimbursement rates, Willis-Knighton now charges
up to three times more than University Health does for the same general category of
service, such as inpatient stays. Id. at 14. More specifically, Vantage alleges that as of
2014-2015, Willis-Knighton’s market share of commercially insured patients in the
Shreveport area was 78% for general acute-care hospital services, 80% for adult primary
care, and 60% for Obstetrics/Gynecology (“Ob/Gyn”). Id. at 10-11, 42-43, 74-75.
Second, over this same period, and while it had monopoly power, Willis-Knighton
is alleged to have engaged in various anticompetitive acts in the Shreveport area to gain
or maintain the monopolies described above. Some of these anticompetitive acts were

1

The complaint does not specify whether those gains occurred within the
Shreveport area or whether Willis-Knighton enjoyed those gains in all markets it serves.
Willis-Knighton also operates a hospital in Arkansas. Record Document, p. 9.
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acquisitions of rival healthcare providers. Specifically, the complaint alleges Willis-Knighton
acquired the following five providers: Bossier Medical Center, Doctor’s Hospital,
CHRISTUS’s acute-care services, the Northwest Louisiana Surgery Hospital, and “a
previously independent cardiology group.”

Id. at 5-6, 10, 17.

With respect to the

acquisitions of Bossier Medical Center, Doctor's Hospital, and CHRISTUS’s acute care
services, the complaint describes a type of multi-step acquisition in which first WillisKnighton acquired physicians from the competing provider, then the competing provider
failed, and finally, in two (unidentified) instances, Willis-Knighton purchased the remaining
physical assets of the shuttered entities. Id. at 5-6. According to the complaint, the
closure of CHRISTUS Schumpert’s acute care services occurred in 2013. The complaint
does not date the other acquisitions.2
In addition to acquisitions, Vantage also alleges that Willis-Knighton gained or
maintained its monopoly power through coercive offers to buy medical offices of competing
physicians, non-compete contracts with its physicians, and “ruthless” control of physician
referrals. Id. at 12-13. According to the Plaintiffs, Willis-Knighton has coerced competing
physicians by “offering to purchase their medical offices and move them to the WillisKnighton campus.” Id. at 12. If the physicians decline the offer, they likely suffer “huge
2

Filings subsequent to the complaint, however, have shed additional light on
some of these acquisitions. One of the exhibits filed in conjunction with the Plaintiffs’
Motion for Preliminary Injunction indicates that Willis-Knighton “purchased” Bossier
Medical Center for $3.7 million in 2012. Record Document 24-30. In its briefing
supporting its motion to dismiss Vantage, Willis-Knighton alleges that “Doctor’s Hospital
was forced into bankruptcy by in [sic] creditors in 2007, and eventually closed its doors
in February 2010 . . . .” Record Document 97, p. 7-8 n. 1 (citation omitted) (citing In re
Shreveport Doctors Hospital 2003 Ltd., Case No. 07-BK-10415 (W.D. La.)).
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declines in referrals from Willis-Knighton’s primary care physicians.” Id. Willis-Knighton
also allegedly requires anticompetitive non-compete agreements with its physicians. Id.
The agreements allegedly prohibit “the physician from practicing anywhere in Caddo or
Bossier Parishes for two years after termination of the agreement.” Id. Further, many of
the agreements provide a financial penalty for failing to treat a prescribed number of
patients annually but also defer collection of that penalty until the physician leaves WillisKnighton, the alleged result of which is that the debt accumulated by many Willis-Knighton
physicians deters them from leaving Willis-Knighton when they otherwise would do so. Id.
Finally, Willis-Knighton allegedly restricts virtually all of the referrals by its physicians to
other Willis-Knighton physicians. Id. at 13. According to the Plaintiffs, Willis-Knighton
accomplishes this by imposing sanctions on noncompliant physicians. Those sanctions
allegedly include “the termination or non-renewal of leases for physician office space, and
the direction of its network primary care physicians’ referrals away from those specialty
physicians who compete with Willis-Knighton or do not refer the bulk of their patients to
Willis-Knighton facilities.” Id.
Third, throughout this same period, Willis-Knighton never accepted Vantage’s
repeated offers to include Willis-Knighton in Vantage’s Tier-1 network. Id. at 15-16.
According to Vantage, it has unsuccessfully tried to contract with Willis-Knighton for fifteen
years. Id. Those attempts were apparently fruitless because Willis-Knighton either was
unwilling to engage with Vantage or was willing to engage but only under terms–90%
reimbursement of Willis-Knighton’s charges–that Vantage saw as “completely uneconomic

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for any health plan, and would not allow it to compete effectively in virtually any market.”3
Id. at 16. Vantage labels Willis-Knighton’s posture toward it as “effectively a refusal to
deal.”

Thus, Willis-Knighton has never been a participant in Vantage’s primary Tier-1

network. Id. at 16-17. And while Willis-Knighton does participate in Vantage’s Tier-2
network, its Tier-2 status means that Vantage subscribers must pay a markedly higher outof-pocket rate to receive care at Willis-Knighton. Id.; see also id. at 32, 64.
Fourth, according to Vantage, the effect of these combined Willis-Knighton efforts
has been to foreclose business opportunities in the Shreveport area that otherwise would
have been available to Vantage. Id. at 66. But for Willis-Knighton monopolizing the
Shreveport area provider market through its acquisitions, referral practices, and noncompete agreements and then leveraging that monopoly power to box Vantage out of the
Shreveport area market, Vantage estimates that it “would have achieved a per capita level
of success in the Shreveport area of at least one-third of the level that it has achieved in
the Monroe area.” Id. at 17, 66. The loss Vantage describes is thus not a loss of
preexisting business, but the loss of opportunities to expand its business in the Shreveport
area. Id. at 17. Vantage monetizes this loss of business at a minimum of $5.7 million
annually, or at least $22.8 million in the last four years, the relevant limitation period. Id.
at 66; see 15 U.S.C. § 15b (2012). Pursuant to the Sherman Act’s treble-damages scheme,

3

Vantage argues that a more customary rate would be 50% of charges that are
set by Medicare’s Diagnostic Related Group system, not by the hospital. Record
Document 1, p. 16. Plaintiffs also assert that “Willis-Knighton’s reimbursement rates
are from 50% to several hundred percent higher than those at UH-Shreveport.” Id. at
14.
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15 U.S.C. § 15(a), Vantage seeks an award of “three times any damages suffered,” which
presumably means it seeks roughly $67 million in damages. Id. at 76.
2. Present and Future Conduct
The second set of antitrust claims revolve around present and future conduct.
Vantage and BRFHH Shreveport assert that a new joint venture to open clinics located at
Willis-Knighton facilities but staffed by LSU physicians–the same LSU physicians who staff
University Hospital–constitutes an illegal combination under section 1 of the Sherman Act,
both an illegal monopoly and an illegal attempted monopoly under section 2 of the
Sherman Act, and an illegal merger under section 7 of the Clayton Act.4 Id. at 70-76. The
Plaintiffs seek the Court to enjoin the opening of the new clinics. Id. at 76.
In March of 2015, Willis-Knighton and LSU’s medical school in Shreveport signed
a series of agreements governing the operation of several new clinics providing care in as
many as eleven specialty or subspecialty fields of medicine. Id. at 27; Record Documents
24-6 to 24-15, 30-6, and 42. According to the terms of these agreements, LSU would
supply the physicians for the clinics and Willis-Knighton would supply the facilities and
remaining staff. Record Documents 24-6 to 24-15, 30-6, 42.
The Plaintiffs’ description of control over the clinics goes further, placing WillsKnighton at the center of both business and medical decision making–to the point that LSU
physicians involved in the clinics “would effectively be working for Willis-Knighton.” Record

4

The complaint also initially alleged that Willis-Knighton was planning an
outright takeover of University Hospital. Record Document 1, p. 23-30. But Plaintiffs
later abandoned this theory. Record Document 83, p. 2.
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Document 1, pp. 23-24. According to the Plaintiffs, Willis-Knighton will supervise physician
performance–giving it more influence over physician referrals–and control billing–meaning
the clinics will not accept coverage by managed care providers like Vantage without
substantially increasing its charges. Id. at 23-24, 28, 46-47. Plaintiffs also assert that the
clinics will primarily treat commercially insured patients. Id. at 24.
Given this alleged level of control and the assumption that more time worked by
LSU physicians at the new joint clinics means less time worked at University Health,
Plaintiffs believe that by design these clinics will shift the treatment of all of University
Health’s commercially insured patients from University Health facilities to Willis-Knighton
facilities. Id. Plaintiffs thus allege that Willis-Knighton is in effect attempting to acquire
the commercially insured business of BRFHH Shreveport. Id. at 2. Willis-Knighton would
accomplish this coup not only by shifting initial treatment away from University Health, but
also by steering all subsequent referrals away from University Health. Id. at 46-47. To
substantiate this allegation, Plaintiffs indicate that the capacity of the new clinics to treat
new patients will meet the current volume of commercially insured patients currently
treated at University Health. Id. at 27. Further, Plaintiffs point to the alleged pattern of
Willis-Knighton’s previous acquisitions and offer statements by BRFHH, LSU, and WillisKnighton officials suggesting, in Plaintiffs’ eyes, a scheme to deprive University Health of
it commercially insured business.

Id. at 27.

BRFHH estimates that the loss of its

commercially insured business would cause it to lose $15 million annually in profits and
endanger its survival as the operator of University Health.

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Inversely, the migration of commercially insured patients from University Health to
Willis-Knighton would significantly increase Willis-Knighton’s market share in the
Shreveport area, according to the Plaintiffs. Id. at 47-51. Were the new clinics to siphon
away all of University Health’s commercially insured care, “Willis-Knighton’s 75% share in
the relevant hospital market will increase to even higher levels, near 90%.” Id. at 4.
Among some of the specialties identified in the clinic agreements, a total shift in care to
the clinics would result in Willis-Knighton’s share of the commercially insured market
increasing to 50% in Otorhinolaryngology (ENT), 58% in hematology/oncology, 80% in
neurology, 70% in Ob/Gyn, and 65% in general pediatrics. Id. at 55.
The new clinics would also allegedly injure Vantage.

Id. at 67-69.

Because

University Health is currently in Vantage subscribers’ Tier-1 network but Willis-Knighton is
not, Vantage contends that a migration of commercially insured patients from University
Health to Willis-Knighton will be followed by an equivalent loss of Vantage subscribers. Id.
at 5, 18, 58, 67-69. This is so allegedly because in the past, whenever a physician under
contract with Vantage joined the Willis-Knighton Physician Network, that contract was
immediately terminated. Id. at 58. Vantage also alleges that in the past whenever a LSU
physician in other regions of the state joined a clinic operated by a provider with whom
Vantage does not have a relationship, that physician stops accepting Vantage coverage.
Id. Thus, because LSU physicians allegedly represent more than half of the physicians in
Vantage’s Shreveport area network, the loss of those patients would “effectively shut
Vantage out of the market in the Shreveport Area.” Id. at 67. Vantage believes this loss

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would be irreparable. Id. at 69.
D. Procedural History
After limited initial discovery, Plaintiffs moved to preliminarily enjoin the WillisKnighton/LSU clinics, Record Document 24, and Willis-Knighton moved to dismiss all claims
against them soon thereafter, Record Document 30. The Court held a hearing to address
the parties’ motions. Record Document 83. Ruling from the bench, the Court denied the
Plaintiffs’ Motion for Preliminary Injunction and denied Willis-Knighton’s Motion To Dismiss
on all but one ground. Record Document 83, p. 2. With respect Vantage’s section 2
claims, the Court declined to rule on dismissal and instead ordered additional briefing from
both parties. Id. After thorough briefing from the parties, see Record Documents 89, 90,
93, and 97, the question now ripe before the Court is whether Vantage’s section 2 claims
should be dismissed pursuant to Federal Rule of Civil Procedure 12(b)(6).
Willis-Knighton argues that there are three principal reasons to dismiss Vantage’s
claims. First, Vantage has not, according to Willis-Knighton, alleged a cognizable theory
of anticompetitive conduct, an element of a section 2 claim. Record Document 90, p. 6-7.
Second, Willis-Knighton asserts that Vantage has not established antitrust injury, a
threshold requirement for a plaintiff in any antitrust claim. Id. at 7. Because antitrust
injury is a universal requirement for antitrust claims, Willis-Knighton further argues that
Vantage’s inability to establish it warrants dismissal of all of its antitrust claims, not just its
section 2 claims. Id. Third, Willis-Knighton argues that the conduct of which Vantage
complains is so vaguely or conclusorily described in its complaint that it cannot support a

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plausible, non-speculative claim under Bell Atlantic Corp. v. Twombly, 550 U.S. 554 (2007).
II.

Dismissal Pursuant to Rule 12(b)(6)
To survive a challenge under Rule 12(b)(6), “a complaint must contain sufficient

factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S.
544, 570 (2007)). Courts are required to accept the plaintiff’s “well-pleaded” facts as true
and construe the complaint in a light favorable to that plaintiff. In re Great Lakes Dredge
& Dock Co., 624 F.3d 201, 210 (5th Cir. 2010) (citations omitted). Nonetheless, courts are
not required to accept the veracity of legal conclusions framed as factual allegations.
Iqbal, 556 U.S. at 678 (reasoning that under Rule 8, it is not sufficient to merely recite a
cause of action’s elements with supporting conclusory statements). Overall, determining
when a complaint states a plausible claim is a context-specific task, requiring courts to rely
on judicial experience and common sense to assess when a complaint crosses the line from
conceivable to plausible. Id. at 678-80.
A claim is facially plausible when a plaintiff pleads factual content that permits the
court to reasonably infer a defendant is liable for the alleged misconduct. Iqbal, 556 U.S.
at 678-79. This plausibility standard is not 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. (quoting Twombly,
550 U.S. at 557).

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III.

Discussion
A. Failure To Plead Anticompetitive Conduct Under Section 2 of the Sherman Act
Willis-Knighton argues that Vantage fails to plead anticompetitive conduct, an

element of a monopolization claim asserted pursuant to section 2 of the Sherman Act.
Record Document 90, 4-8. A defendant is liable for monopolization under section 2 where
it (1) possesses monopoly power and (2) achieves or maintains its monopoly power
through anticompetitive conduct.5 See 15 U.S.C. § 2 (2012); Verizon Commc’ns, Inc. v.
Law Offices of Curtis V. Trinko, 540 U.S. 398, 407-08 (2004); United States v. Grinnell
Corp., 384 U.S. 563, 570-71 (1966). The necessity of proving more than monopoly power
reflects federal courts’ judgment that in the short term, the monopolist’s ability to charge
above-market prices invites more, rather than less, competition. Trinko, 540 U.S. at 407
(“The opportunity to charge monopoly prices . . . induces risk taking that produces
innovation and economic growth.”). Thus, while the definition of anticompetitive conduct6

5

Vantage has alleged attempted monopolization, another cause of action under
section 2 of the Sherman Act. See 15 U.S.C. § 2 (2012); Spectrum Sports, Inc. v.
McQuillan, 506 U.S. 447, 456 (1993); Record Document 1, pp. 73-75. Vantage’s
attempted monopolization claim is indistinguishable from Vantage’s monopolization
claim for the purposes of evaluating Willis-Knighton’s dismissal arguments. Because
anticompetitive conduct is still an element of an attempted monopolization claim,
Spectrum Sports, 506 U.S. at 456, the viability of both Vantage’s monopolization and
attempted monopolization claims turns in equal measure on whether Vantage can show
anticompetive conduct. Moreover, Willis-Knighton’s remaining two dismissal
arguments–lack of antitrust injury and lack of Twombly specificity–also equally affect
Vantage’s monopolization and attempted monopolization claims. The Court therefore
need not separately address Vantage’s attempted monopolization claim for a large part
of this ruling.
6

Courts also label anticompetitive conduct exclusionary conduct, predatory
conduct, and improper conduct. See Taylor Pub. Co. v. Jostens, Inc., 216 F.3d 465,
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has many accepted permutations,7 the essence of the conduct that it makes actionable is
the achievement or maintenance of monopoly power by means other than competition on
the merits. See Stearns Airport Equip. Co. v. FMC Corp., 170 F.3d 518, 522 (5th Cir. 1999)
(citing Aspen Skiing Co. v. Aspen Highlands, 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 [anticompetitive].”)); see also United States v. Microsoft Corp., 253 F.3d
34, 58-59 (D.C. Cir. 2001) (To be condemned as anticompetitive under section 2, the
conduct “must harm the competitive process and thereby harm consumers.”).8 In the Fifth

475 n.2 (5th Cir. 2000) (“We use the terms ‘predatory’ and ‘exclusionary’
interchangeably . . . .”); Berkey Photo, Inc. v. Eastman Kodak Co., 603 F.2d 263, 298
(2d Cir. 1979) (“improper” conduct). Some authorities, however, view the term
“exclusionary” as too narrow. See 3 Phillip E. Areeda & Herbert Hovenkamp, Antitrust
Law ¶ 701b (3d ed. 2008) (“Although we often say that § 2 requires an ‘exclusionary’
act, our real meaning is that § 2 requires one or more forbidden anticompetitive acts.
Not all anticompetitive acts are exclusionary.”).
7

See Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585, 605 n.32
(1985) (“[E]xclusionary comprehends at the most behavior that not only (1) tends to
impair the opportunities of rivals, but also (2) either does not further competition on
the merits or does so in an unnecessarily restrictive way.”) (quoting 3 Phillip E. Areeda
& Donald F. Turner, Antitrust Law 78 (1978)); United States v. Grinnell Corp., 384 U.S.
563, 570-71 (1966) (The monopolist must have “acquired or maintained that power
wilfully, as distinguished from the power having arisen and continued by growth
produced by the development of a superior product, business acumen, or historic
accident.”); 3 Areeda & Hovenkamp, Antitrust Law ¶ 651a (3d ed. 2008) (“We define
monopolistic conduct as acts that: (1) are reasonably capable of creating, enlarging or
prolonging monopoly power by impairing the opportunities of rivals; and (2) that either
(2a) do no benefit consumers at all, or (2b) are unnecessary for the particular
consumer benefits claimed for them, or (2c) produce harms disproportionate to any
resulting benefits.”)
8

See also United States v. Aluminum Co., 148 F.2d 416, 430 (2d. Cir. 1945)
(Hand, J.) (“The successful competitor, having been urged to compete, must not be
turned upon when he wins.”).
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Circuit, proving anticompetitive conduct also “[g]enerally” requires “some sign that the
monopolist engaged in behavior that—examined without reference to its effects on
competitors—is economically irrational.” Stearns, 170 F.3d at 523.
Vantage argues that by alleging that Willis-Knighton has acquired (and is attempting
to acquire) competing healthcare providers, has used punitive non-compete contracts with
its physicians, and has restricted patient referrals to other Willis-Knighton providers, the
complaint has plead anticompetitive conduct.9 The Court separately addresses whether
any of these three groups of allegations constitute a viable theory of anticompetitive
conduct.10

9

Notably, Vantage does not contend that Willis-Knighton’s “effective refusal to
deal” with it constituted anticompetitive conduct. A refusal to deal may qualify as
anticompetitive conduct, but only under limited circumstances. See Aspen Skiing, 472
U.S. 585; Trinko, 540 U.S. 398. Instead, Vantage alleges that Willis-Knighton’s refusal
to deal with it represents its injury. Record Document 89, p. 25.
10

The separate analysis of these three groups of conduct is not impermissible
“compartmentalizing” of allegedly anticompetitive conduct. See Continental Ore Co. v.
Union Carbide & Carbon Corp., 370 U.S. 690, 698 (1962). As Vantage has alleged
elsewhere Continental Ore and Associated Radio Services Co. v. Page Airways, Inc. hold
that courts should determine anticompetitive conduct by measuring the cumulative
effect of the defendant's allegedly anticompetitve conduct, rather than evaluating each
instance of allegedly illegal conduct in isolation. See Continental Ore, 370 U.S. at 698;
Assoc. Radio Serv. Co. v. Page Airways, Inc, 624 F.2d 1342, 1356 (5th Cir. 1980). This
instruction, however, is limited to the analysis of conduct that although in theory may
constitute anticompetitive conduct, in fact has such a de minimus effect on competition
that it should not be actionable. See Assoc. Radio, 624 F.2d at 353-56 (“We agree . . .
that a de minimus rule should be applied by our courts, but we believe that [there
were] enough instances of exclusionary behavior on the part of defendants to
constitute far more than de minimus violations of section 2.”). The Court may
therefore separately address whether Willis-Knighton’s acquisitions, non-competes, or
referrals theoretically could give rise to anticompetitive conduct before cumulatively
determining the effect of these actions.
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1. Acquisitions
In general, Willis-Knighton argues that none of the conduct that Vantage claims is
anticompetitive–the acquisitions, the non-competes, the referrals–can be anticompetitive
because in the Fifth Circuit, conduct is anticompetitive under section 2 only where it is
economically irrational for the defendant and here Willis-Knighton had a rational business
purpose for all of its challenged actions: growing its business. See id; Record Document
90, pp. 9-10.
In Stearns, a manufacturer of airport-to-airplane boarding bridges sued a rival
manufacturer for monopolization under section 2 of the Sherman Act. Id. at 520-21.
Stearns, the plaintiff manufacturer, alleged in relevant part that its competitor, FMC,
illegally gained and maintained its monopoly through exclusionary manipulation of
municipal bids. Specifically, Stearns alleged that FMC illegally manipulated the airport
competitive bid process through four strategies:
First, FMC was to attempt to convince municipalities that they should avoid
competitive bidding and strike a purchase agreement with FMC directly—so
called “sole-sourcing.” Second, if bidding appeared inevitable, FMC should
strive to drive the criteria for the award away from price alone by requesting
various product features be weighted against cost in the final calculation of
the best bid. Third, efforts were to be made to insure that the specifications
adopted by a municipality were tailored to fit FMC's product and exclude
Stearns. Lastly, FMC would “induce complexities in the bidding process” by
suggesting certain certifications and restrictions be added that worked to the
detriment of Stearns.
Id. at 522. The Fifth Circuit held that these strategies did not amount to anticompetitive
conduct for the purposes of a section 2 monopolization claim. Id. at 527. The court found
that the test for determining when conduct becomes anticompetitive is when the conduct
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does not involve competition on the merits. Id. at 522-23, 527. For three reasons,
Stearns failed to show that FMC’s four-part strategy did not constitute competition on the
merits. Id. at 523-27. One reason was that this type of competition generally is not an
antitrust violation under section 1 of the Sherman Act. Id. at 522-523, 527 (citing Security
Fire Door Co. v. County of Los Angeles, 484 F.2d 1028, 1030–31 (9th Cir. 1973)). The
second reason that FMC’s conduct was competition on the merits was that it was done for
a rational business purpose. Id. at 523-24. The court found that the lack of a rational
business purpose, i.e., engaging in conduct that may harm a competitor but also knowingly
causes itself real losses, is the key factor in determining when there is competition on the
merits: “If the conduct has no rational business purpose other than its adverse effects on
competitors, an inference that it is exclusionary is supported.” Id. at 522.11 The court
stated that there was an “obvious” rational business justification for FMC’s four-part
strategy: selling more of its product. Id. at 524. The third reason that FMC’s strategy was
competition on the merits was that it could not succeed without the active, voluntary
consent of the consumer, the airport. Id. at 524.12 Based on these reasons, the court
concluded that “Stearns does not and cannot claim that it has been excluded from
competing on the merits" and affirmed summary judgment dismissal of Stearn’s section

11

See also id. at 523 (“Generally, a finding of exclusionary conduct requires
some sign that the monopolist engaged in behavior that—examined without reference
to its effects on competitors—is economically irrational.”).
12

Although the court stated that this determination would be upset if there were
evidence that airports’ decision making had been coopted or coerced, id. at 526
(“Bribery and threats are not competition on the merits.”), the court found that Stearns
had failed to introduce any such evidence. Id.
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2 claims. Id. at 527.
Vantage argues that Stearns notwithstanding, the allegations of Willis-Knighton
acquiring competitors is a viable theory of anticompetitive conduct because
courts–including the Supreme Court–recognize horizontal acquisitions as anticompetitive
conduct. Record Document 89, pp. 13-14. The Supreme Court has established that
acquiring a viable competitor constitutes anticompetitive conduct under section 2. See
Grinnell, 384 U.S. at 576; see also 3 Phillip E. Areeda & Herbert Hovenkamp, Antitrust Law
¶ 701a (3d ed. 2008) (“Historically and today, merging viable competitors to create a
monopoly is a clear § 2 offense . . . .”). In Grinnell, the Court held that a home security
conglomerate had engaged in anticompetitive conduct under section 2 because it achieved
its monopolization through the acquisition of competing entities, among other acts. 384
U.S. at 576. The Court explained that because the acquired entities were previously the
defendant’s competitors, their acquisitions by the defendant lessened competition in the
given market and increased the defendant’s market power, allowing the Court to determine
that they qualified as the types of anticompetitive conduct that section 2 forbids. See id.
Courts continue to hold that acquisitions can give rise to anticompetitive conduct
for the purposes of a section 2 claim. See Behrend v. Comcast Corp., No. CIV.A. 03-6604,
2012 WL 1231794, at *20 (E.D. Pa. Apr. 12, 2012). In Behrend, consumers sued Comcast,
a cable provider, in part under section 2 of the Sherman Act for monopolizing cable
services in the greater Philadelphia market.

Id. at *1.

Comcast accomplished this

monopolization through a series of acquisitions, taking the various forms of outright

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acquisitions, swaps of assets in different geographic regions, and purchases of assets in
receivership through bankruptcy, over the span of a decade.

Id. at *3-5.

These

acquisitions increased Comcast’s market share in the greater Philadelphia area from 24%
in 1998 to 69.5% in 2007. Id. at *20. On summary judgment, the plaintiff consumers
argued that the acquisitions themselves represented the anticompetitive conduct required
to prevail on a section 2 claim. Id. The court agreed, holding that the acquisitions
constituted anticompetitive conduct. The court reasoned that because the consumers had
provided evidence that the acquisitions and the increased market power that followed the
acquisitions allowed Comcast to increase price, the consumers could rely on the
“transactions themselves . . . as proof of [anticompetitive] conduct.”13 Id.
For three reasons, Willis-Knighton argues that Grinnell and its progeny do not
support a finding that the acquisitions challenged in this lawsuit are anticompetitive under
section 2.
13

Vantage also asserts that Electronic Data Systems v. Computer Associates, 802
F. Supp. 1463 (N.D. Tex. 1992), and Brown Shoe Co. v. United States, 370 U.S. 294
(1962), support its contention that acquisitions alone constitute ancticompetive conduct
under section 2. Record Document 89, p. 20. No such holding is found in either case.
In Electronic Data Systems, the defendant moved to dismiss the plaintiff’s section 2
claim not because it did not allege anticompetive conduct, but because it did not allege
monopoly power. See id. at 1466-67. The question of whether the defendant’s
acquisitions gave rise to anticompetitive conduct was therefore not before the court. In
Brown Shoe, the Court, in evaluating whether a horizontal and vertical merger violated
section 7 of the Clayton Act, stated, “If the share of the market foreclosed is so large
that it approaches monopoly proportions, the Clayton Act will, of course, have been
violated; but the arrangement will also have run afoul of the Sherman Act.” 370 U.S. at
328. This statement does not support Vantage’s position because it was not the
holding of the Court and, even if it were, its import is substantially diminished by the
fact that it was made before Grinnell, which was the first Supreme Court case requiring
anticompetitive conduct as an element of a section 2 violation.
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First, as a threshold issue, Willis-Knighton argues that the label “acquisition”
mischaracterizes its past conduct. According to Willis-Knighton, the complaint only pleads
that it has hired talent from its rivals, not that it has acquired them. Record Document 90,
pp. 6-8. And whether hiring talent from a rival is anticompetitive under section 2 is
governed by a standard that is far more stringent than the one set forth in Grinnell.
Vantage for its part asserts that the complaint alleges more than the mere hiring of talent.
The complaint, according to Vantage, alleges that hiring talent from a target provider is
but one initial step Willis-Knighton takes in accomplishing its ultimate aim of acquiring the
target provider.
The question then becomes how courts distinguish an acquisition from hiring talent
for the purposes of assessing section 2 anticompetitive conduct. Unfortunately, neither
the parties nor the Court have been able to find any law that draws this distinction. But
the law in the Fifth Circuit is that the hiring of rival talent, even if it strengthens a
monopolist and weakens a competitor, is generally not anticompetitive. Taylor Pub. Co.
v. Jostens, Inc., 216 F.3d 465, 480-81 (5th Cir. 2000). Because of the “high social and
personal interest in maintaining a freely functioning market for talent,” “hiring talent
cannot generally be held exclusionary even if it does weaken actual or potential rivals and
strengthen a monopolist.” Id. at 479 (citing 3 Areeda & Hovenkamp, Antitrust Law ¶ 702,
at 204).

Consequently, in the Fifth Circuit, a monopolist hiring rival talent is

anticompetitive only where the monopolist (1) engages in predatory hiring, i.e., acquiring
talent from a rival firm not for its own use but only to deny it to the competitor, and (2)

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induces the targeted talent, while still employed by the competitor, to act disloyally toward
the competitor by steering its customers toward the monopolist. Id. at 480-81. In Taylor
Publishing, a monopolist in the school yearbook publishing industry instituted a multifaceted campaign “to take [the plaintiff competitor] out of business.” 216 F.3d at 471.
One prong of the defendant’s strategy was to hire away key sales personnel from the
plaintiff. Id. The court held that the defendant’s hiring of talent was anticompetitive
because the plaintiff was able to demonstrate at trial that (1) the defendant had hired
talent away from the plaintiff not for its own use but to deny it to the plaintiff and (2) the
defendant had induced the plaintiff’s employees, while still in the plaintiff’s employ, to
violate their non-compete agreements and convert their sales accounts to the defendant.
See id. at 480-81.
Taylor Publishing governs any acquisition alleged by the Plaintiffs in which the target
provider fails because Willis-Knighton hires away its physicians but otherwise does not
involve Willis-Knighton acquiring assets of the target provider before it fails. See id. at
471, 480-81. The acquisitions in the complaint that meet these criteria are the acquisitions
of Bossier Medical Center,14 Doctor's Hospital, CHRISTUS’s acute-care services, and
University Hospital’s commercially insured business. Like the hiring of talent in Taylor
Publishing, Willis-Knighton’s hiring of physicians from these four entities is alleged to have
weakened (or will weaken) those entities and was (or is) part of Willis-Knighton’s alleged
14

The Court notes that while a filing subsequent to the complaint indicates that
Willis-Knighton “purchased” Bossier Medical Center for $3.7 million in 2012, Record
Document 24-30, that filing was not an exhibit attached to the complaint and therefore
the Court may not consider it in a 12(b)(6) motion to dismiss.
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plan to put them out of business. See id. at 471; Record Document 1, pp. 2, 5-6.
And with respect to these four alleged acquisitions, Vantage has pleaded no facts
to support either element of anticompetitive hiring under Taylor Publishing. The complaint
has not alleged that Willis-Knighton hired physicians not for its own use but to deny them
to any of the target entities. See Taylor Publ’g, 216 F.3d at 480. The complaint has also
not alleged that Willis-Knighton induced any physicians to act disloyallly before their
employ with Willis-Knighton. See id. Consequently, these four acquisitions do not give rise
to section 2 liability.
However, the two remaining acquisitions identified in the complaint, the acquisitions
of Northwest Louisiana Surgery Hospital and “a previously independent cardiology group,”
were apparently outright takeovers and therefore are not governed by Taylor Publishing.
For these acquisitions, Willis-Knighton’s second argument against the application of
Grinnell is relevant. Willis-Knighton contends that Grinnell does not support a blanket rule
that acquisitions establish anticompetitive conduct under section 2. Record Document 97,
p. 4. Willis-Knighton emphasizes that in Grinnell, the defendant’s prior acquisitions were
not an independent ground for a finding of anticompetitive conduct. See 384 U.S. at 576;
Record Document 97, p. 4. In addition to the defendant’s prior acquisitions, the Court in
Grinnell also included defendant’s inclusion of restrictive agreements among the
defendant’s subsidiaries that prevented competition among them15 and the defendant’s

15

Courts no longer consider intrabrand restrictions on competition enforced by
the parent company to be anticompetitive. See Copperweld Corp. v. Indep. Tube Corp.,
467 U.S. 752, 752-53 (1984).
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pricing practices in its catalogue of acts that together “plainly and explicitly” established
anticompetitive conduct.

See Grinnell, 384 U.S. at 571, 576.

Willis-Knighton thus

distinguishes this matter from Grinnell, arguing that unlike the Grinnell defendant’s
multifaceted anticompetitive conduct, Willis-Knighton is only alleged to have acquired
competing entities. See 384 U.S. at 576; Record Document 97, p. 4. Willis-Knighton also
argues, perhaps implicitly, that Grinnell must be read in concert with Stearns, which means
that an acquisition is anticompetitive only where it is not done for a rational business
purpose. Record Document 90, pp. 4-5.
This line of argument is unpersuasive for several reasons. First, although not
explicit, the language in Grinnell suggests that acquisitions of viable competitors alone may
establish the anticompetitive conduct element of a section 2 claim. In its relatively brief
discussion of the defendant’s anticompetitive conduct, the Court in Grinnell stated that the
defendant’s “monopoly was achieved in large part by unlawful and exclusionary practices.
The restrictive agreements . . . were one device. Pricing practices . . . were another. The
acquisitions . . . were still another.” 384 U.S. at 576 (emphasis added). This language
implies that any of the three practices by the defendant could have satisfied the Court that
the defendant’s actions constituted anticompetitive conduct. See id. Second, courts
continue to hold that acquisitions alone establish anticompetitive conduct under section 2.
See, e.g., Behrend v. Comcast Corp., No. CIV.A. 03-6604, 2012 WL 1231794, at *20 (E.D.
Pa. Apr. 12, 2012) (citing Grinnell, 384 U.S. at 576) (finding that defendant’s acquisitions
were prima facie evidence of anticompetitive conduct). Third, Willis-Knighton offers no

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authority challenging or even questioning the relevant holding in Grinnell as good law.
Although it is true, as Willis-Knighton states, that the Second Circuit has held that a vertical
acquisition is not by itself anticompetitive conduct, see Record Document 97, pp. 3-4; Port
Dock & Stone Corp. v. Oldcastle Ne., Inc., 507 F.3d 117, 124-25 (2d Cir. 2007), that
holding has no bearing on Willis-Knighton’s alleged acquisitions because neither party
characterizes them as vertical. Fourth, Stearns does not require that acquisitions must lack
a rational business justification before they may be characterized as anticompetitive. In
Stearns, the court stated that it “generally” requires "some sign that the monopolist
engaged in behavior that . . . is economically irrational," Stearns, 170 F.3d at 523. Thus,
by its very own terms, the lack of a rational business purpose is not a universal
requirement for anticompetitive conduct. See id. Instead, under Stearns, the universal
test is whether the conduct is competition on the merits. Id. at 522-23, 527. Thus, while
a rational business purpose is the most important factor in determining whether there is
competition on the merits, it is still a component of the overarching test of competition on
the merits. See id. And even if Stearns does conflict with Grinnell, it must give way to
Supreme Court precedent. Finally, as shown below, the tension between the analyses of
Grinnell and Stearns is alleviated by the viability of a rational business justification as an
affirmative defense.
Willis-Knighton’s third argument against the application of Grinnell is that even if the
Court does not adopt economic irrationality as the test for establishing section 2
anticompetitive conduct, it provides Willis-Knighton with an affirmative defense. Record

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Document 97, pp. 4-5. To assess anticompetitive conduct under section 2 of the Sherman
Act, many courts have adopted the burden-shifting framework articulated by the D.C.
Circuit in United States v. Microsoft Corp., 253 F.3d 34, 59 (D.C. Cir. 2001). See, e.g., New
York ex rel. Schneiderman v. Actavis PLC, 787 F.3d 638, 652 (2d Cir.), cert. dismissed sub
nom., Allergan PLC v. New York ex. rel. Schneiderman, 136 S. Ct. 581 (2015). Under
Microsoft, once a plaintiff has met his burden of demonstrating a prima facie case of
section 2 anticompetitive conduct, the burden shifts to the defendant to offer a
procompetitive justification, i.e., “a nonpretextual claim that its conduct is indeed a form
of competition on the merits because it involves, for example, greater efficiency or
enhanced consumer appeal.” Microsoft, 253 F.3d at 59. Then, “if the monopolist's
procompetitive justification stands unrebutted . . . the plaintiff must demonstrate that the
anticompetitive harm of the conduct outweighs the procompetitive benefit.” Id. Though
the Fifth Circuit has not explicitly accepted or rejected the Microsoft framework, it
previously has suggested that some type of burden-shifting framework is appropriate for
analyzing section 2 claims. See Mid-Texas Commc'ns Sys., Inc. v. Am. Tel. & Tel. Co., 615
F.2d 1372, 1389 n.13 (5th Cir. 1980) (finding that analysis of a section 2 claim is similar
to the rule of reason analysis for a section 1 claim, which weighs the anticompetitive
effects of the plaintiff’s conduct against its procompetitive benefits).
For Willis-Knighton to prevail on this affirmative defense at the 12(b)(6) stage in the
litigation, the complaint alone must prove its requisite elements, i.e., the complaint must
demonstrate as a matter of law (1) nonpretextual, procompetitive justifications for Willis-

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Knighton’s allegedly anticompetitive actions, which would include its acquisitions, the noncompete agreements, and the restrictive referrals, and (2) that the procompetitive benefit
of these actions outweigh their anticompetitive harm. See Microsoft, 253 F.3d at 59;
Kaiser Aluminum & Chem. Sales, Inc. v. Avondale Shipyards, Inc., 677 F.2d 1045, 1050
(5th Cir. 1982). Vantage argues that Willis-Knighton cannot prevail on a procompetitive
justification affirmative defense at the 12(b)(6) stage because the defense requires proof
of facts that lie beyond the complaint. Record Document 93, p. 3. Willis-Knighton
responds by asserting that courts regularly entertain antitrust affirmative defenses and
procompetitive/efficiency arguments in 12(b)(6) motions. Record Document 97, pp. 4-5.
Willis-Knighton therefore asserts that the complaint itself supports dismissal under this
defense because it alleges a legitimate business purpose for all of Willis-Knighton’s
challenged actions: treating more patients. See id. at 4; Record Document 90, pp. 10-11.
The Fifth Circuit has long held that “a claim may [] be dismissed if a successful
affirmative defense appears clearly on the face of the pleadings.” Clark v. Amoco Prod.
Co., 794 F.2d 967, 970 (5th Cir. 1986) (citing Kaiser, 677 F.2d at 1050); see also Airline
Car Rental, Inc. v. Shreveport Airport Auth., 667 F. Supp. 293, 297 (W.D. La. 1986) (“[A]
cause of action cannot be dismissed on a 12(b)(6) motion on the basis of an affirmative
defense unless the defense clearly appears on the face of the pleading.”). In Kaiser
Aluminum, the defendant filed an antitrust counterclaim that the plaintiff sought to dismiss
under Rule 12(b)(6) based on the affirmative defense that the claim was filed after the
relevant limitation period. 677 F.3d at 1049. The counterclaim, filed in 1979, alleged that

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a contract executed between the defendant and the plaintiff in 1973 constituted an illegal
tying arrangement under antitrust law.

Id. at 1048.

The court affirmed dismissal,

reasoning that the face of the counterclaim revealed that it was barred by antitrust’s fouryear statute of limitations and the facts pleaded in the counterclaim, even if taken as true,
could not support any judicially recognized exception to the limitation period. Id. at 105057. In Airline Car Rental, the defendant sought dismissal under Rule 12(b)(6) based on
the affirmative defense that the claim was barred by the state action doctrine. 667 F.
Supp. at 297 (citing Parker v. Brown, 317 U.S. 341 (1943)). In its complaint, the plaintiff
alleged that the defendant, Shreveport Airport Authority, was “a body politic and corporate
organized and existing pursuant to the laws of the State of Louisiana.” Id. at 297-98. But
the court denied dismissal, holding that the complaint had not stated facts sufficient to
meet the requirements of the state action doctrine because that defense requires that the
state entity party acted pursuant to a state policy to displace competition and the
complaint had made no such claim. Id. at 298.16
16

The other cases on which Willis-Knighton relies to support its affirmative
defense argument, Port Dock, 507 F.3d at 124-25, and Morris Commc'ns Corp. v. PGA
Tour, Inc., 364 F.3d 1288 (11th Cir. 2004), are misplaced. See Record Document 97,
pp. 3-4.
In Port Dock, the Second Circuit held that a section 2 monopolization claim
alleging a vertical acquisition accompanied by a refusal to deal should be dismissed
under Rule 12(b)(6) because it failed to allege anticompetitive conduct. 507 F.3d at
124-26. The court noted that a vertical acquisition standing alone does not qualify as
anticompetitive conduct, id. at 124 (citing Belfiore v. N.Y. Times Co., 826 F.2d 177, 181
(2d Cir. 1987)), and that a refusal to deal generally does not qualify as anticompetitive
conduct unless there is an absence of a valid business purposes, id. (citing Aspen Skiing
Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585, 608 (1985)). The court further
noted that in the Second Circuit, “when a monopolist has acquired its monopoly at one
level of a product market, its vertical expansion into another level of the same product
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Because the Plaintiffs’ complaint does not demonstrate as a matter of law either that
that there were nonpretextual, procompetitive justifications for Willis-Knighton’s allegedly
illegal conduct or that the procompetitive benefits of the acquisitions outweighed their
anticompetitive harm, Willis-Knighton is not entitled to prevail on a Microsoft
procompetitive affirmative defense at this stage in the litigation. Unlike the statute of
limitation defense in Kaiser Aluminum, but like the state action doctrine defense in Airline
Car Rental, the procompetitive defense that Willis-Knighton raises cannot be resolved
based solely on the Plaintiffs’ complaint because, at the very least, the complaint does not
reveal whether the procompetitive benefits of the acquisitions, non-competes, and control
of referrals outweigh their anticompetitive harm. See Microsoft, 253 F.3d at 59. This
affirmative defense is thus better suited for a summary judgment motion. See Behrend,
2012 WL 1231794, at *22-24 (holding that although consumer plaintiff’s allegations of

market will ordinarily be for . . . a prototypical valid business purpose.” Id. (citing
G.K.A. Beverage Corp. v. Honickman, 55 F.3d 762 (2d Cir. 1995). Vantage’s
monopolization claims and the monopolization claim dismissed in Port Dock are easily
distinguishable. Unlike the relevant challenged acquisition in Port Dock, the acquisitions
that Vanta challenges were horizontal, not vertical. See id. at 119; Record Document
5-6, 10, 17. Thus, the relevant holdings from Port Dock, that vertical acquisitions are
not anticompetitive under section 2 and are usually done for a rational business
purpose, have no bearing on Willis-Knighton’s acquisitions.
In Morris Communications, a publisher sued the Professional Golf Association for
monopolizing the publication of real-time golf scores. Id. at 1290-93. The Eleventh
Circuit affirmed summary judgment dismissal of the publisher’s claim, holding that the
defendant had demonstrated, as a defense, that its conduct had a nonpretextual, valid
business justification. Id. at 1297-98. Because the court in Morris Commc’ns affirmed
dismissal of the publisher’s monopolization claim on summary judgment, rather than
under Rule 12(b)(6), Morris Commc’ns does not support Willis-Knighton’s argument that
it is entitled to prevail on its affirmative defense of a nonpretextual, procompetitive
justification for its allegedly illegal acquisitions. See id. at 1292.
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Comcast’s acquisitions constituted a viable theory of anticompetitive conduct under section
2, Comcast was entitled to summary judgment on that claim because Comcast had shown
that it had legitimate business justifications for its acquisitions and the consumers could
not demonstrate that there was a genuine dispute of material fact that Comcast’s business
justifications were pretextual).
Therefore, Willis-Knighton’s alleged acquisitions of Northwest Louisiana Surgery
Hospital and "a previously independent cardiology group" constitute anticompetitive
conduct under section 2 of the Sherman Act. See Grinnell, 384 U.S. at 576; Record
Document 1, pp. 10, 17.

These acquisitions could plausibly constitute the type of

competitor acquisitions described in Grinnell. See 384 U.S. at 576; Record Document 1,
pp. 5-6, 10, 17. Like the entities acquired in Grinnell, Northwest Louisiana Surgery
Hospital and the cardiology group were competitors of the defendant in the relevant
market so their acquisition lessened competition and increased the defendant’s market
share17 in the relevant market. See 384 U.S. at 576; Record Document 1, pp. 10, 17.
Thus, based on its allegation that Willis-Knighton acquired Northwest Louisiana Surgery
Hospital and an unknown cardiology group, Vantage has plead anticompetitive conduct.

2. Non-Compete Agreements and Control of Referrals
Vantage also asserts that its allegations of Willis-Knighton’s non-compete
17

While not dispositive of market power, market share often serves as an
imperfect proxy for market power. See Domed Stadium Hotel, Inc. v. Holiday Inns,
Inc., 732 F.2d 480, 489-90 (5th Cir. 1984) (citing United States v. Aluminum Co. of
Am., 148 F.2d 416, 424 (2d Cir. 1945) (Hand, J.)).
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agreements with its physicians and its control of physician referrals are anticompetitive
under section 2 of the Sherman Act.

Vantage, however, has offered no authority

specifically holding or suggesting that non-compete agreements or control of physician
referrals are anticompetitive under section 2. Absent any conflicting authority, the noncompetes and the control of referrals are anticompetitive if they lacked competition on the
merits.

See Stearns, 170 F.3d at 522-23, 527.

And the most important factor in

determining competition on the merits is whether Willis-Knighton had a rational business
purpose for its actions. See id. Other relevant factors under Stearns are whether courts
find these acts violate section 1 of the Sherman Act and whether Willis-Knighton could
have accomplished these acts without the consent and participation of consumers. See
id. at 522-24.
Willis-Knighton has a rational business purpose for both the non-compete
agreements and its control of referrals. See id. at 524. As previously stated, WillisKnighton argues that its rational business purpose for both of these actions was the same:
to treat more patients. The complaint alleges nothing to contradict Willis-Knighton’s
argument that the purpose and the effect of the non-compete agreements and the
restriction of referrals was to treat more patients. There is no allegation, for instance, that
Willis-Knighton does not need the physicians subject to the non-compete agreements and
keeps them at a loss just for the sake of ensuring that other hospitals do not have access
to them. Nor is there any allegation that Willis-Knighton has steered patients back to
Willis-Knighton not because their treatment would be profitable, but because it would

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ensure that they are not treated by other providers. These acts therefore had a rational
business purpose.
The other two, less important, factors under Stearns point in different directions.
Neither party has argued that these acts may violate Section 1 of the Sherman Act. See
id. at 522-23. On the other hand, these acts were done without the participation of
consumers, i.e., patients. See id. at 523. On the whole, then, the strict application of
Stearns to the allegations of Willis-Knighton’s non-compete agreements and control of
physicians referrals shows that they are not anticompetitive under section 2 of the
Sherman Act and therefore do not give rise to a claim of monopolization or attempted
monopolization under the Sherman Act.
For the reasons stated above, the Court finds that Vantage has plead
anticompetitive conduct with respect to the acquisitions of Northwest Louisiana Surgery
Hospital and the cardiology group listed in the complaint. The Court therefore DENIES
Willis-Knighton’s motion to dismiss for failure to plead anticompetitive conduct.
B.

Antitrust Injury
Willis-Knighton argues that Vantage has not suffered antitrust injury. Antitrust

injury is a component of antitrust standing.

Antitrust standing, in turn, is a

judicially-created set of threshold requirements that a private plaintiff must show before
a court can entertain its antitrust claims. See Associated Gen. Contractors of Cal., Inc. v.
Cal. State Council of Carpenters (“AGC”), 459 U.S. 519, 535 & n. 31 (1983). The three
antitrust standing requirements are “1) injury-in-fact, [i.e.,] an injury to the plaintiff

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proximately caused by the defendants' conduct; 2) antitrust injury; and 3) proper plaintiff
status, which assures that other parties are not better situated to bring suit.” Sanger Ins.
Agency v. HUB Int'l, Ltd., 802 F.3d 732, 737 (5th Cir. 2015) (citing Jebaco, Inc. v. Harrah's
Operating Co., 587 F.3d 314, 318 (5th Cir. 2009)). These requirements, which supplement
Article III standing requirements, ensure that successful antitrust claims only redress the
types of harm that antitrust law was designed to prevent, rather than create a fortuitous
windfall for all parties proximate to the defendant, regardless of whether they were injured
by anticompetitive conduct. See AGC, 459 U.S. at 535.
The second component of antitrust standing, anitrust injury, requires that a
plaintiff's injury is "of the type the antitrust laws were intended to prevent and . . . flows
from that which makes the defendant's acts unlawful."

Brunswick Corp. v. Pueblo

Bowl-O-Mat, Inc., 429 U.S. 477, 489 (1977). This means that in an antitrust suit, but-for
causation is insufficient.

Instead, a plaintiff must be able to trace its injury to the

anticompetitive effects of the defendant’s antitrust violation. See id. An inquiry into
antitrust injury thus always asks whether there is a causal connection between the alleged
injury of the plaintiff and the anticipated anticompetitive effect of the specific practice that
allegedly violates antitrust law. See Port Dock, 507 F.3d at 122 (“We can ascertain
antitrust injury only by identifying the anticipated anticompetitive effect of the specific
practice at issue and comparing it to the actual injury the plaintiff alleges.”).
Vantage asserts that it has suffered antitrust injury because Willis-Knighton’s refusal
to contract with it (its alleged injury) was made possible by the monopoly power Willis-

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Knighton achieved through its anticompetitive acquisitions (the anticompetitive effect of
the specific practice that allegedly violates antitrust law). See Record Document 89, p. 25.
For monopolization claims, refusals to contract with the plaintiff do not constitute
antitrust injury because the injury suffered by the plaintiff is one that could have just as
easily occurred in the absence of monopoly power. See Jebaco, 587 F.3d at319-20; Port
Dock, 507 F.3d at 123; Fischer v. NWA, Inc., 883 F.2d 594, 596 (8th Cir. 1989); Serpa
Corp. v. McWane, Inc., 199 F.3d 6 (1st Cir. 1999). In Jebaco, the Fifth Circuit held that
a lessor assignee did not suffer antitrust injury from lessee casinos where the complaint
alleged that the casinos had violated antitrust law through an illegal market division and
the lessor was injured because the casinos terminated the lease and moved elsewhere.
587 F.3d at 316-17, 319-20. The lessor plaintiff, Jebaco, was an assignee to a lease with
Harrah’s casino for two riverboat casinos and as such was entitled to a per-patron fee. Id.
at 16. After Hurricane Rita, Harrah’s decided to sell the casinos and all related licensing
rights. Id. Though Jebaco bid for the casinos and licensing rights, Harrah’s sold them to
another defendant, Pinnacle, and coordinated with Pinnacle to secure the license transfer
with the Louisiana Gaming Control Board. Id. at 316-17. As part of the licensing process,
Pinnacle represented that it would move the operations of the two casinos to different
locations. Id. at 317. Jebaco alleged that these acts injured it in antitrust by depriving it
of all revenue under the lease assignment.18 Id. at 319. The Fifth Circuit disagreed, ruling
18

Jebaco also alleged it was injured because the defendants deprived it of an
opportunity to compete for the casino bid. Id. The court dismissed this claim as failing
to allege antitrust injury, albeit for reasons not relevant to Vantage’s claims. See id. at
321.
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that Jebaco had not suffered antitrust injury in part because Jebaco could have been
deprived of its per-patron fees just as easily if Harrah’s had not engaged in the illegal
market-division scheme.19 Id. at 320. The court reasoned: “[I]f a different firm had
purchased Harrah's assets, it too might have chosen not to operate at Jebaco's preferred
berths. No antitrust violation would have occurred, but Jebaco would have suffered the
same injury.” Id. The court therefore held that Jebaco had not suffered antitrust injury
by the casinos terminating the leases. Id.
Similarly, in Port Dock, the Second Circuit held that a distributer did not suffer
antitrust injury from a manufacturer where the complaint alleged that the manufacturer
illegally monopolized the manufacturing level through acquisitions and the retailer was
injured because the manufacturer, post-monopolization, refused to sell to it. 507 F.3d at
122-24. The plaintiff distributer, Port Dock, alleged that prior to their alleged antitrust
violations, the defendant entities (collectively “Tilcon”) possessed an 85% market share
in the manufacture of crushed stone in the relevant geographic market, with only one

19

The court also reasoned that there was no antitrust injury because the
termination of the lease was the product of “downstream” allegedly anticompetitive
conduct. Id. at 320. The court found that courts generally do not recognize antitrust
injury for the termination of a contract or lease that is caused by “downstream”
anticompetitive conduct, i.e., conduct by entities that are closer to the consumer in the
stream of commerce than the plaintiff. See id. (citing 2 P. Areeda & H. Hovenkamp,
Antitrust Law, 350(f-g), at 422-23 (2d ed. 2000) ("When a downstream firm merely
substitutes one supplier for another, there is certainly injury-in-fact to the terminated
supplier, but there is rarely antitrust injury.")). Applying this rule to Jebaco’s claims,
the court reasoned that Jebaco had not suffered antitrust injury because it alleged that
its lease (assignment) was terminated as a result of anticompetitive acts by casinos
operators, which are farther “downstream” in the market for gambling than Jebaco as
lessor. Id.
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viable competitor, Trap Rock. Id. at 119. As a distributor of the crushed stone, Port Dock
was Tilcon’s biggest customer. Id. In that same time period, Tilcon tried to raise prices
unilaterally, but when Trap Rock did not follow suit, Tilcon was forced to lower prices to
their former levels. Id. Tilcon then decided to sell its crushed stone directly to Port Dock’s
customers, thereby integrating vertically into the distributer level of the market and
competing with Port Dock. Id. at 120. After its vertical integration, Tilcon acquired Trap
Rock, perfecting a complete monopoly in the manufacture of crushed stone in the relevant
market. Id. With its newfound monopoly, Tilcon refused to sell stone to Port Dock, and,
because Port Dock lacked any alternate supply of stone, proposed buying Port Dock’s
assets at a sacrifice to Port Dock. Id. Port Dock sold its assets and eventually filed for
bankruptcy; Tilcon, after acquiring Port Dock’s assets, raised the price for crushed stone.
Id. The Second Circuit held that Port Dock had not suffered antitrust injury. Id. at 124.
The anticompetitive effect of Tilcon’s acquisition of Trap Rock, according to the court, was
the specter of Tilcon rasing prices and restricting output due to its enhanced monopoly
power. Id. at 123. The court identified the injury to Port Rock as Tilcon’s complete refusal
to deal with Port Rock, an injury that the court distinguished from a claim that Tilcon had
raised prices, which Port Rock conceded had never occurred. Id. Based on these findings,
the court reasoned that Port Dock’s injury of being cut off by Tilcon was unconnected to
the anticompetitive danger of monopolization, i.e., increased prices, because it was
something Tilcon “could have just as well done without having monopoly power.” Id. The
court stated that antitrust injury was suffered not by Port Dock, but instead by “the dealers

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or consumers who were forced to buy at higher prices (or inferior quality) because the
defendant had acquired the market power to charge monopoly prices.” Id. at 124.
In Fischer, the Eighth Circuit held that a regional airline did not suffer antitrust
injury from a national airline where the complaint alleged that the national airline
monopolized the market for air service to a particular destination and the regional airline
was injured because the national airline, post-monopolization, terminated its service
contract with the regional airline at that destination. Id. at 600. The regional airline
plaintiff, Fischer, was the exclusive carrier for all of Northwest Airlines’s regional flights
originating in Detroit under a contract that either party could terminate with or without
cause. Id. at 595-96. Northwest then acquired Republic Airlines, another national carrier
at the time, which had its own regional airline partner, Simmons Airlines, exclusively
servicing its regional flights through Detroit. Id. at 596. That contract was not terminable
at will. Id. After considerable effort to mediate the inevitable conflicting demands of
Fischer and Simmons, Northwest terminated Fischer, its Detroit carrier. Id. at 597. Fischer
sued Northwest under Section 2 for monopolizing the Detroit market, of which Northwest
had gained a 75% share though its acquisition of Republic. Id. The court reasoned that
Fischer had not plead antitrust injury because its injury, the termination of its Detroit
service agreement, had not been caused by the anticompetitive effects of the Republic
acquisition, such as increased prices; instead it was caused by Northwest’s need to
eliminate redundant services out of Detroit, a need that Northwest would have had
irrespective of its market power. Id. at 600.

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In Serpa, the First Circuit held that a distributer did not suffer antitrust injury from
a manufacturer where the complaint alleged that the manufacturer illegally monopolized
the manufacturing level through acquisitions and the retailer was injured because the
manufacturer, post-monopolization, terminated their distribution arrangement. See 199
F.3d at 8, 12. Prior to it filing suit, Serpa had been the exclusive distributor for certain
plumbing parts manufactured by Anaco, one of several manufacturers for these parts. Id.
at 9. One of those competing manufacturers, McWane, acquired Anaco, giving it an 85%
share of the relevant manufacturing market, and thereafter terminated Serpa as a
distributor of Anaco products. Id. Serpa sued McWane for attempting to monopolize the
relevant manufacturing market. Id. Relying heavily on Fischer, the court reasoned that
Serpa had not suffered antitrust injury because its alleged injury, McWane’s termination
of the distribution contract, was “neither connected with, nor resulted from, defendant’s
market power in the [relevant plumbing part manufacturing] industry.” Id. at 11-12.
Vantage argues that almost all of these cases are distinguishable from its claims.
Record Document 89, pp. 25-59. Vantage distinguished the position and nature of the
plaintiff in Jebaco, a lessor standing above the defendants in the stream of commerce,
from itself, a customer standing below Willis-Knighton in the healthcare stream of
commerce. Id. at 28 (emphasizing that the consumer is the intended beneficiary under
antitrust law). This distinction, while in itself true, does not disturb Jebaco’s reasoning of
the defendant’s termination of the lease contract could have been done just as easily
regardless of its antitrust violations. See 587 F.3d at 320. Next, Vantage attempts to

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distinguish Willis-Knighton’s refusal to contract from the contract termination in Fischer and
Serpa, arguing in effect that while those courts found that those specific acquisitions had
not in fact increased the monopolist’s power to terminate the contracts at issue there,
those findings do not compel a conclusion that monopoly power can never under any
circumstance enhance the ability of a monopolist to terminate or create a contract.
Regarding Fischer, Vantage argues that unlike Northwest’s power to terminate its contract
with Fischer, which the court found “was in no way enhanced by the acquisition,” 883 F.2d
at 600, Willis-Knighton’s power to refuse to contract with Vantage was enhanced by its
acquisitions of competing healthcare providers because the acquisitions “resulted in fewer
and fewer physicians who were available to Vantage in its network,” Record Document 89,
pp. 23-27. Vantage makes essentially the same argument with respect to Serpa.
Vantage’s reasoning here is faulty for two reasons.

First, it misses the logic

underlying the holdings in Fischer and its cousin cases, which is that in all instances, a firm
can terminate a contractual relationship (or refuse to start a contractual relationship) just
as easily without market power as it can with market power.

Second, it seems to

recharacterize Vantage’s injury not as Willis-Knighton’s refusal to deal, but the shrinking
pool of providers available to contract with Vantage. This is the consequence of Vantage’s
injury, not its injury in itself. If Willis-Knighton had agreed to contract with Vantage,
Vantage would be unaffected by the shrinking pool of non-Willis-Knighton providers in the
Shreveport area.
Vantage also argues that Christian Schmidt Brewing v. G. Heileman Brewing

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supports the conclusion that acquisitions coupled with refusals to deal can give rise to
antitrust injury. See 753 F.2d 1354 (6th Cir. 1985). There, the Sixth Circuit held that small
brewers in the Midwest suffered antitrust injury from two large Midwest brewers where the
complaint alleged that large brewers illegally merged (under Section 7 of the Clayton Act)
and the small brewers would be injured because the brewers combined together would be
so big that they would be able to predatorily induce all wholesalers and distributors not to
do business with the small brewers.20 Id. at 1355-57. This holding is distinguished from
Port Dock and the like for two reasons. First, the plaintiff competed with the defendant
at the market level that the defendant is alleged to have monopolized, rather than
participated with the defendant sitting upstream, see Jebaco, 587 F.3d at 319-20, or
downstream, see, e.g., Serpa, 199 F.3d at 8-9, of the market level that the defendant is
alleged to have monopolized. Second, and more important, the plaintiff’s injury, the
deprivation of wholesalers and distributors, resulted from the anticompetitive effects of the
merger because it could only could have occurred with the heightened monopoly power
that flowed from the merger, unlike the injuries in Port Dock and its kin, which did not
result from anticompetitive effects of the acquisitions because they just as easily could
have occurred without the increased monopoly power that flowed from the acquisitions,
see, e.g., Port Dock 507 F.3d at 124.
Thus, to the extent that Vantage has alleged that it was injured by Willis-Knighton
refusing to contract with it, Vantage has not alleged anticompetitive conduct. See, e.g.,
20

The court also found “tentative evidence” that these adverse effects would
actually occur. Id. at 1357.
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Jebaco, 587 F.3d at 319-20. Like the defendants’ refusals to contract with the plaintiffs
in Jebaco and its kin, Willis-Knighton’s refusal to contract with Vantage was unrelated to
its ability to exploit its monopoly power because Willis-Knighton could have decided not
to contract with Vantage even if it had no market power whatsoever. See, e.g., id.
However, to the extent that Vantage has alleged that it was injured because WillisKnighton demanded exorbitant reimbursement rates, it has plead antitrust injury. Unlike
the injuries alleged by the plaintiff in Port Dock and the like, Willis-Knighton requiring high
reimbursement rates is the type of injury that flows from Willis-Knighton’s market power
because Willis-Knighton could not have demanded what were effectively higher prices
without market power. See Port Dock, 507 F.3d at 123 (finding that the plaintiff never
alleged that the defendant was injured by increased prices.) Although it survives 12(b)(6)
dismissal, this theory of antitrust standing may not constitute antitrust injury if later
Vantage cannot demonstrate that Willis-Knighton increased prices as result of its
anticompetitive acts. That is, if Willis-Knighton had always demanded high prices from
Vantage–both before and after its attainment of market power–then Vantage suffered no
antitrust injury because the high prices demanded of it did not flow from Willis-Knighton’s
increased market power. In its complaint, Vantage indicates that for fifteen years, it has
tried to contract with Willis-Knighton, but without success. The complaint is silent on when
these efforts were unsuccessful because Willis-Knighton demanded high prices and when
they were unsuccessful because Willis-Knighton refused to deal. The complaint is also
silent on whether the prices demanded by Willis-Knighton ever increased. Nonetheless,

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Vantage’s allegation of Willis-Knighton demanding high reimbursement rates for its services
states a plausible theory of antitrust injury and is thus sufficient to survive 12(b)(6)
dismissal.
Based on the above discussion, the Court therefore DENIES Willis-Knighton’s
motion to dismiss based on Vantage’s lack of antitrust injury.
C. Insufficient Detail Under Iqbal and Twombly
Finally, Willis-Knighton argues that all of Vantage’s claims must be dismissed
because they lack the specificity required under Twombly and Iqbal. Record Document
90, pp. 21-27. Under Twombly, a complaint must allege facts sufficient “to raise a right
to relief above the speculative level” so that a right to relief “is plausible on its face.” 550
U.S. at 555, 570. Also, “[a] complaint must contain either direct or inferential allegations
respecting all the material elements necessary to sustain a recovery under some viable
legal theory.” In re Plywood Antitrust Litig., 655 F.2d 627, 641 (5th Cir. Unit A Sept.
1981). So long as it raises a plausible right of recovery and puts the defendant on notice
of the plaintiff’s claim and grounds upon which it rests, however, the complaint does not
need to specify detailed factual allegations. See Twombly, 550 U.S. at 555. Generally,
then, Vantage’s complaint must allege facts that, either directly or inferentially, plausibly
show that Vantage has met all the elements of all of its causes of action in this suit. See
Twombly, 550 U.S. at 555; In re Plywood, 655 F.2d at 641. Willis-Knighton, however, has
not challenged all aspects of Vantage’s allegations under Twombly and instead attacks two
categories of Vantage’s allegations.

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1. Whether Vantage Plausibly Alleged that LSU Physicians Working at the Joint

Clinics Will Drop Vantage
Willis-Knighton argues that Vantage’s allegations about Willis-Knighton’s
involvement with LSU fail to state a claim under Twombly because they are conclusory with
respect to how Vantage would be injured by LSU physicians treating patients at WillisKnighton clinics. Record Document 90, pp. 21-24.
Vantage's complaint must allege facts that, either directly or inferentially, plausibly
show that Vantage has been injured. See Twombly, 550 U.S. at 555; In re Plywood, 655
F.2d at 641; Torch Liquidating Trust ex rel. Bridge Assocs. L.L.C. v. Stockstill, 561 F.3d
377, 384 (5th Cir. 2009). Although injury is not strictly an element of an antitrust cause
of action, it is necessary for recovery and thus courts may dismiss a claim under Twombly
for failing to provide sufficient detail explaining how the defendant’s conduct would injure
the plaintiff. See Torch Liquidating, 561 F.3d at 384 (“A complaint must contain direct
allegations or permit properly drawn inferences to support ‘every material point necessary
to sustain a recovery.’” (quoting Campbell v. City of San Antonio, 43 F.3d 973, 975 (5th
Cir. 1995))).
Willis-Knighton cites two cases to support its argument. Corr Wireless Commc'ns,
L.L.C. v. AT&T, Inc., is illustrative of the level of specificity required to plead injury. See
893 F. Supp. 2d 789 (N.D. Miss. 2012). There, a regional wireless carrier, Corr, sued AT&T
in antitrust in part because it alleged that AT&T was going to abuse its monopoly power

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over certain wireless frequencies to deny Corr access to roaming service. Id. at 799. The
extent of the pleaded basis for this allegation was Corr’s “prior knowledge and experience.”
Id. At oral argument Corr was likewise unable to produce any allegations of present
conduct by AT&T that served as the basis for its assertion that AT&T would deny it
roaming service. Id. The court dismissed Corr’s roaming antitrust claim under Rule
12(b)(6) in part because its allegation of future conduct was too conclusory and
speculative to state a claim for relief under Twombly. Id. at 807. The court reasoned that
similar to the plaintiff’s assertion in Twombly that an agreement to conspire, a section 1
element, existed because there was parallel conduct among the defendants, “conclusory
speculation [by Corr] regarding what could happen at some unknown date in the future
also fails to plausibly state a violation of federal antitrust laws.” Id.
The second case cited by Willis-Knighton, In re Elevator Antitrust Litigation, shows
the limits to which an antitrust plaintiff can rely on conduct by the defendant in one
context to plausibly plead that the defendant has engaged in the same conduct in another
context. See 502 F.3d 47, 52 (2d Cir. 2007). There, the Second Circuit held that the
plaintiff’s claim was not entitled to relief under Twombly where its allegation of an
agreement to violate antitrust law was supported in part by allegations that the defendants
were under investigation in Europe for similar agreements to violate antitrust law. Id. 5052. The plaintiffs, elevator maintenance companies, sued the defendants, manufacturers
and sellers of elevators, for conspiring to fix prices and to monopolize the elevator
maintenance market, causes of action under sections 1 and 2 of the Sherman Act that

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require proof of an agreement among the defendant manufacturers to so conspire. Id. at
49. The complaint supported its allegation of such an agreement in part with an allegation
that the defendants were under investigation by European antitrust officials for colluding
to similarly fix prices for their elevators in the European market. Id. at 51 & n.6. The
court held that the allegations about European antitrust collusion by itself did not provide
a plausible ground to support the inference of an unlawful agreement to conspire in the
United States and dismissed the plaintiffs’ claims. Id. at 49, 52. The court reasoned,
“Allegations of anticompetitive wrongdoing in Europe–absent any evidence of linkage

between such foreign conduct and conduct here–is merely to suggest (in defendants'
words) that ‘if it happened there, it could have happened here.’” Id. at 52 (emphasis
added).

“Without an adequate allegation of facts linking transactions in Europe to

transactions and effects” in the United States, the court concluded that “plaintiffs'
conclusory allegations do not ‘nudge[ their] claims across the line from conceivable to
plausible.’” Id. (quoting Twombly, 550 U.S. at 505).
Vantage’s allegation of how physicians migrating from University Health to LSU
clinics would harm Vantage is distinguishable from the allegation of harm in Corr Wireless.
Unlike the plaintiff in Corr Wireless, who was unable to produce any allegations of present
conduct by the defendant that served as the basis for its assertion that the defendant
would injure it in the future, Vantage has described with some detail how Willis-Knighton
is presently engaged in a joint clinic with LSU physicians working at University Health. And
Vantage’s reliance on prior conduct by Willis-Knighton and LSU to establish that LSU

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physicians working at the joint clinics will drop Vantage is distinguishable from the
plaintiff’s reliance in Elevator Antitrust on the defendant’s antitrust violations in Europe to
establish that the defendant violated antitrust laws in the United States. Unlike the plaintiff
in Elevator Antitrust, who was unable to provide any link explaining why the antitrust
violations by the defendants in one market would make it plausible that the defendants
committed the same violations in a different market, Vantage has provided a link to explain
how the LSU/Willis-Knighton clinics are like other Willis-Knighton clinics in which LSU
physicians practice and do not accept Vantage Tier-1 coverage. Specifically, Vantage has
alleged that LSU physicians, currently in their Tier-1 network, will effectively become
employees of Willis-Knighton when they participate in the joint LSU-Willis-Knighton clinics
because of Willis-Knighton’s control over billing and referrals. Id. at 23-24, 28, 46-47.
Vantage has also alleged that in the past, whenever a physician under contract with
Vantage joined the Willis-Knighton Physician’s Network, that physician immediately cancels
his contract with Vantage. Id. at 58. These facts provide the causal link that was missing
in Elevator Antitrust. Vantage’s claims of future harm by Willis-Knighton’s actions thus
should not be dismissed under Twombly.
Amid this discussion, Willis-Knighton also inserts an Article III standing rationale for
its arguments that Vantage's claims of injury are too speculative. See Record Document
90, p. 23, and 97, p. 8. Vantage does not directly address this argument. Article III
standing requires in part that the plaintiff demonstrate it has suffered injury in fact, which
is “an invasion of a legally protected interest that is (a) concrete and particularized and (b)

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actual or imminent, not conjectural or hypothetical.” Lujan v. Defenders of Wildlife, 504
U.S. 555, 560 (1992) (citations omitted). Allegations of future injury “must be certainly
impending to constitute injury in fact.” Whitmore v. Arkansas, 495 U.S. 149, 158 (1990).
To establish standing for future injury, a plaintiff needs to credibly explain how
present facts create a realistic threat of future injury. See Lyons, 461 U.S. at 98; United
Transp. Union v. Interstate Commerce Comm’n, 891 F.2d 908, 913 (D.C. Cir. 913). In
Lyons, the Supreme Court reviewed the claim of an individual who alleged that he had
been injured by an unjustified chokehold administered to him by a Los Angeles police
officer and that he “justifiably fears that any contact he has with Los Angeles Police officers
may result in his being choked and strangled to death.” 461 U.S. at 98. The Court
dismissed on Article III grounds the complainant's prayer for an injunction forbidding the
use of such chokeholds by police officers, finding it unduly speculative that the complainant
“was likely to suffer future injury from the use of the chokeholds by police officers.” Id.
at 105. The Court asserted that, “to have a case or controversy with the City that could
sustain [his claim for an injunction, the complainant] would have to credibly allege that he
faced a realistic threat from the future application of the City's policy.” Id. at 106-07 n.7.
Similarly, in United Transportation Union, the D.C. Circuit held that a union plaintiff
failed to plead Article III injury where it alleged that the ICC’s approval of interlocking
directorates of railroad companies would injure the workers of the affected railroad
companies. 891 F.2d at 913. The union had alleged that its members “stand to be hurt”
by the “financial wrecking” that would result from the ICC approving the interlocking

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directorate and sought to enjoin the ICC’s approval of the interlocking directorate. Id. The
court held that the union had failed to allege Article III injury because it offered no
explanation for how or why the interlocking directorate would hurt either the companies
or the union workers. Id. at 913-14. Without any causal explanation for how the approval
of the interlocking directorate would hurt the union workers, the court reasoned that the
allegation of injury in the case was “unadorned speculation” and dismissed the union’s
claims for want of Article III standing. Id.
Vantage has credibly explained how present facts create a realistic threat of future
injury. Unlike the plaintiff’s claims in Lyons and United Transportation Union, which
provided no information to link present facts with future injury, Vantage has, as discussed
above, provided facts explaining why LSU physicians practicing at the LSU/Willis-Knighton
clinics would result in those physicians leaving Vantage’s Tier-1 network. See Lyons, 461
U.S. at 98; United Transp. Union 891 F.2d, at 913-14; Record Document 1, p. 58. These
facts provide the causal link that creates a realistic threat of future injury to Vantage from
the joint clinics. Vantage has therefore satisfied the injury-in-fact requirement of Article
III standing.
2. Whether Vantage Plausibly Stated a Claim for Past Antitrust Violations by Willis-

Knighton
Next, Willis-Knighton argues that Vantage’s allegations about Willis-Knighton’s past
conduct fail to state a claim under Twombly because they allege insufficient details about
either the prior alleged acquisitions or the relevant markets that Willis-Knighton

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monopolized/attempted to monopolize.

The complaint must plead facts that, either

directly or inferentially, plausibly show Willis-Knighton had market power/a dangerous
probability of market power and committed acts that, when viewed as a whole, constitute
anticompetitive conduct.21 See Twombly, 550 U.S. at 555; In re Plywood, 655 F.2d at 641;
Assoc. Radio Serv. Co. v. Page Airways, Inc., 624 F.2d 1342, 1356 (5th Cir. 1980).
Specifically, Willis-Knighton argues that the complaint does not plausibly plead
market power for Willis-Knighton’s past conduct because it does not provide any past
market shares for Willis-Knighton. To demonstrate monopoly power, a complaint must
specify the specific product and geographic market which defendant is alleged to have
monopolized. Rockbit Indus. U.S.A., Inc. v. Baker Hughes, Inc., 802 F. Supp. 1544,
1550-51 (S.D. Tex. 1991). The complaint satisfies this requirement because it alleges
Shreveport-Bossier as the relevant geographic market at all times and the product markets
as general acute-care services, primary care, and OB/GYN. Willis-Knighton also insists that

21

The elements of Vantage’s monopolization claim based on Willis-Knighton’s
past conduct are (1) Willis-Knighton possessed market power in the relevant market
and (2) Willis-Knighton engaged in anticompetitive conduct. See Stearns, 170 F.3d at
522. The elements of Vantage’s attempted monopolization claim based on WillisKnighton’s past conduct are (1) Willis-Knighton engaged in anticompetitive conduct, (2)
with a specific intent to monopolize, while (3) there was a dangerous probability of
Willis-Knighton achieving monopoly power in a relevant market. See Spectrum Sports
v. McQuillan, 506 U.S. 447, 456 (1993). With respect to the anticompetitive conduct
element, where the defendant is alleged to have engaged in a pattern of illegal
conduct, courts assess whether a section 2 claim demonstrates anticompetitive conduct
by measuring the cumulative effect of the defendant’s allegedly illegal conduct, rather
than evaluating each instance of allegedly illegal conduct in isolation. See Assoc. Radio,
624 F.2d at 1356 (“[N]o one of the instances of improper conduct, standing alone,
would lead to section 2 liability. Taken together, however, they show a pattern of
exclusionary behavior sufficient to support the jury’s verdict.”).
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the complaint needs to state Willis-Knighton’s shares in these markets at the times at
which it is alleged to have committed illegal acts, but cites no case so requiring. The Court
finds this standard too high; instead, all the complaint must do is plead facts that
inferentially make a high market share in the past plausible. By providing the high shares
in these markets that Willis-Knighton currently enjoys, the complaint has provided
sufficient information to make past monopoly power plausible.
Willis-Knighton also specifically argues that the complaint provides insufficient detail
about the past acquisitions, such as their dates, to plausibly plead anticompetitive conduct.
The Court finds that requiring the complaint to identify the details of every prior acquisition
would ask more than Twombly demands. Instead, the complaint must plead facts that,
when viewed together, make anticompetitive conduct plausible. See Twombly, 550 U.S.
at 555; Assoc. Radio, 624 F.2d at 1356. The complaint accomplishes this by providing the
names of all entities that Willis-Knighton has acquired, the way in which Willis-Knighton
controls referrals, and the type of non-compete agreements it employs. The complaint has
therefore stated a plausible claim for Willis-Knighton’s prior antitrust violations.
Accordingly, the Court DENIES Willis-Knighton’s motion to dismiss based on Twombly and
Article III.
IV.

Conclusion
For all of the foregoing reasons, the Defendant’s motion to dismiss [Record

Document 30] is DENIED.
THUS DONE AND SIGNED on this 31st day of March, 2016.

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