DEBORAH HEART AND LUNG CENTER v. PRESBYTERIAN MEDICAL CENTER OF THE UNIVERSITY OF PENNSYLVANIA HEALTH SYSTEM et al
Filing
83
OPINION & ORDER denying the Penn Defendants' 61 Motion for Reconsideration. Signed by Judge Renee Marie Bumb on 4/19/2012. (TH, )
NOT FOR PUBLICATION
[Dkt. No. 61]
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
CAMDEN VICINAGE
DEBORAH HEART AND LUNG CENTER,
Civil No. 11-1290 (RMB)(KMW)
Plaintiff,
OPINION & ORDER
v.
PENN PRESBYTERIAN MEDICAL
CENTER, et al.,
Defendants.
Appearances:
Anthony Argiropoulos
Scott B. Murray
Thomas Kane
Sills Cummis & Gross, P.C.
650 College Road East
Princeton, New Jersey 08540
Attorneys for Plaintiff Deborah Heart and Lung Center
Robert A. White
Morgan, Lewis & Bockius LLP
502 Carnegie Center
Princeton, NJ 08540
Jay H. Calvert, Jr.
R. Brendan Fee
Morgan, Lewis & Bockius LLP
1701 Market Street
Philadelphia, PA 19103
Attorneys for Defendants Presbyterian Medical Center
of the University of Pennsylvania Health System,
University of Pennsylvania Health System, Penn Cardiac
Care at Cherry Hill, and Clinical Health Care
Associates of New Jersey, P.C.
1
BUMB, United States District Judge:
Defendants Presbyterian Medical Center of the University of
Pennsylvania Health System, University of Pennsylvania Health
System, Penn Cardiac Care at Cherry Hill, and Clinical Health
Care Associates of New Jersey, P.C. (the “Penn Defendants”) have
moved for reconsideration of the Court’s 12/30/2011 Opinion (the
“Opinion”).
Deborah Heart and Lung Center v. Penn Presbyterian
Medical Center, No. 11-1290, 2011 WL 6935276 (D.N.J. Dec. 30,
2011).
I.
For the reasons that follow, that motion is DENIED.
Background
The Penn Defendants previously moved for dismissal of
Plaintiff Deborah Heart and Lung Center’s Amended Complaint (the
“Complaint”). The Complaint made two claims: (1) violation of
Section 1 of the Sherman Act; and (2) violation of Section 2 of
the Sherman Act.
The Court concluded that Plaintiff had only
plausibly alleged the first claim – that Defendants were engaged
in a conspiracy to exclude Plaintiff from the market for certain
advanced cardiac intervention procedures by transferring
patients requiring those procedures exclusively to the Penn
Defendants.
The Court further concluded that the Penn
Defendants’ participation in that alleged conspiracy was
plausibly motivated by economic self-interest, as Penn was
alleged to be the primary beneficiary of the exclusionary
conduct.
The Court’s rejection of the second claim was largely
2
driven by the implausibility of the allegation that the Penn
Defendants intended that its co-defendants monopolize the market
for certain advanced cardiac intervention procedures.
The Court
therefore allowed the first claim to proceed and dismissed the
second claim.
II.
Standard
In this District, motions for reconsideration are governed
by Local Rule 7.1(i), which allows a court to reconsider a
decision upon a showing that dispositive factual matters or
controlling decisions of law were overlooked by the court in
reaching its prior decision.
Flores v. Predco Servs. Corp., No.
10-1320, 2011 WL 3273573, at *1 (D.N.J. July 29, 2011).
The
purpose of the motion is to correct manifest errors of law or
fact or to present newly discovered evidence.
Id. at *2
(quotation and citation omitted).
III. Analysis
The Penn Defendants now argue that reconsideration of the
Opinion is warranted on two grounds based on errors of law by
the Court.
First, the Penn Defendants argue that Plaintiff failed to
plausibly allege their participation in the alleged Section 1
conspiracy.
The Penn Defendants contend that the Court’s
conclusion otherwise “irreconcilably conflicts” with the Third
Circuit’s decision in Howard Hess Dental Labs. Inc. v. Dentsply
3
Int’l, Inc., 602 F.3d 237 (3d Cir. 2010).
They claim that that
case stands for the proposition that “allegations that a party
acted pursuant to its independent economic interest with the
desire of ‘increasing profits,’ cannot give rise to a plausible
inference of conspiracy between non-vertical actors in the
aftermath of Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007).”
They argue that, applying this rule, a finding of concerted
action by the Penn Defendants’ is precluded by the Court’s
finding that their participation in the alleged conspiracy was
motivated by economic self-interest.
Their argument fails,
however, because it is premised on a faulty interpretation of
Dentsply.
Dentsply did not hold that, as a general matter, the fact
that a party was acting pursuant to its own economic selfinterest precludes the possibility that it was engaging in
concerted, as opposed to independent, action.
F.3d at 255-256.
Dentsply, 602
That holding would run contrary to well-
established law, discussed in the Court’s Opinion and again
below, that anti-competitive motive is not necessary to sustain
a Section 1 claim.1
Rather, Dentsply addressed a hub and spoke
conspiracy in which the Plaintiff had failed to plausibly allege
1
Dentsply itself is in accord on this point. Dentsply, 602 F.3d at 256
n. 8 (observing that the Third Circuit’s prior decision in Fineman v.
Armstrong World Industries, Inc., 980 F.2d 171 (3d Cir. 1992) held
that Section 1 claims do not require the defendants to share identical
motives, only for the defendants to be parties to an agreement).
4
connections between the spokes.
Dentsply, 602 F.3d at 255.
That finding was predicated on the Circuit’s conclusions that:
(1) each of the spokes would have been independently
economically motivated to engage in the alleged conduct; (2)
there were no allegations suggesting coordination between the
spokes; and (3) the allegations were not “placed in a context
that raises a suggestion of a preceding agreement among the”
spokes.
Id. at 255-56 (quotation omitted).
Thus, Dentsply only
stands for the more limitation proposition that allegations of
conduct, consistent with economic interest, but without
allegations suggesting coordination or a context “that raises a
suggestion of” preceding agreement between the parties, are
insufficient to plausibly establish concerted action. Where,
however, a plaintiff offers either direct evidence of
coordination or agreement, or places allegations of parallel
conduct in a context that raises a suggestion of a preceding
agreement, or offers a satisfactory combination of the two, such
allegations are sufficient to plausibly establish agreement.
In
re Ins. Brokerage Antitrust Litig., 618 F.3d 300, 323 (3d Cir.
2010)(holding that “[a]llegations of direct evidence of an
agreement, if sufficiently detailed, are independently adequate”
to support a conspiracy claim); Starr v. Sony BMG Music
Entertainment, 592 F.3d 314, 323 (2d Cir. 2010)(noting that
allegations of parallel conduct may be sufficient where they are
5
“placed in a context that raises a suggestion of a preceding
agreement”)(quotation and citation omitted); In re Ins.
Brokerage, 618 F.3d at 324 n. 24 (noting that a plaintiff need
not commit to a single method of proof).
As indicated in the Court’s prior Opinion, Plaintiff has
plausibly alleged the Penn Defendants’ participation in the
alleged conspiracy through direct and circumstantial evidence.
Plaintiff has submitted direct evidence that the Penn
Defendants’ conduct was coordinated with its alleged coconspirators, not independent.
Plaintiff directly alleged a
written agreement between the Penn Defendants and Defendant The
Cardiology Group, P.A.
It also offered proof of coordination in
the form of a written e-mail between all the parties to the
alleged conspiracy, which the Plaintiff claims reports on the
conspiracy’s ongoing effectiveness.
These allegations alone
would be sufficient to plausibly support the Penn Defendants’
participation in the alleged conspiracy. Id. at 323 (“It bears
noting that, consistent with summary judgment analysis,
[contextual allegations] need be pled only when a plaintiff's
claims of conspiracy rest on parallel conduct.”).
Those allegations are buttressed by Plaintiff’s
circumstantial evidence allegations.
These allegations provide
contextual support for the existence of a preceding agreement
and would independently plausibly support the Penn Defendants’
6
participation in the alleged conspiracy.
In this Circuit,
courts relying on contextual allegations look to certain “plus
factors.”
Wallach v. Eaton Corp., 814 F. Supp. 2d 428, 440
(D.Del. 2011).
They include: (1) motive to enter the
conspiracy; (2) evidence that the defendant acted contrary to
its interests; and (3) evidence implying a traditional
conspiracy.
321-22.
In re Ins. Brokerage Antitrust Litig., 618 F.3d at
These factors, however, are not exhaustive and a
plaintiff must only establish one “plus factor.”
Id. at 322-23
(holding that there is “no finite set” of plus factors and that
“plaintiffs relying on parallel conduct must allege facts that,
if true, would establish at least one plus factor”)(quotation
omitted).
Here, Plaintiff has alleged economic motivation on the part
of the Penn Defendants – profit.
It has also alleged
traditional evidence of conspiracy.
Traditional evidence of
conspiracy can include “overt acts more consistent with some
pre-arrangement for common action than with independently
arrived-at decisions.” Id. at 322 (citing to Areeda & Hovenkamp
for this proposition).
Plaintiff alleged: (1) a large shift in
patient transfers, inuring to the Penn Defendants’ benefit,
consistent with the alleged agreement; (2) that that shift was
made in spite of increased medical risks and costs; and (3)
coercive conduct by the Penn Defendants’ alleged co-
7
conspirators, in the face of contrary legal obligations, in
enforcement of the alleged agreement.
at *5.
Deborah, 2011 WL 6935276,
This is not a hub and spoke conscious parallelism case
like Dentsply and it is highly unlikely that these alleged
actions would have resulted from “chance, coincidence,
independent responses to common stimuli, or mere interdependence
unaided by an advanced understanding between the parties.” Starr
v. Sony BMG Music Entertainment, 592 F.3d 314, 323 (2d Cir.
2010)(listing applicable inquiry in assessing contextual
allegations).
While the parties dispute whether there are
allegations that the Penn Defendants have acted against selfinterest, this Court need not resolve that dispute at this time.
Plaintiff has alleged two of the three “plus factors” and, even
absent the direct evidence of conspiracy described above, has
placed the allegations of parallel conduct “in a context that
raises a suggestion of a preceding agreement, not merely
parallel conduct.”
Starr, 592 F.3d at 322 (quotation omitted).
In any event, even if Plaintiff’s direct and contextual
allegations were insufficient standing alone, together they
leave no doubt that Plaintiff has plausibly alleged the Penn
Defendants’ participation in the alleged conspiracy.2
2
The Court
Burtch v. Milberg Factors, Inc., 662 F.3d 212 (3d Cir. 2011), In re
Ins. Brokerage Antitrust Litig., 618 F.3d 300 (3d Cir. 2010), and
TruePosition, Inc. v. LM Ericsson Telephone Co., No. 11-4574, 2012 WL
33075 (E.D.Pa. Jan. 6, 2012), also cited by the Penn Defendants in
support of their argument, are consistent with this Court’s analysis.
8
therefore rejects reconsideration of its Opinion on this basis.
Second, the Penn Defendants argue that the Court's finding,
in the context of Plaintiff's Section 2 claim, that Plaintiff
had failed to plausibly allege that the Defendants shared an
anti-competitive motive to “bestow a monopoly” on one of Penn’s
alleged co-conspirators, is fatal to Plaintiff's ability to
establish the unity of purpose/common scheme necessary to
sustain a Section 1 claim.
That conclusion does not follow
factually or legally.
Factually, the Court’s finding that Plaintiff had failed to
plausibly allege the Section 2 scheme does nothing to foreclose
the plausibility of the Section 1 scheme.
And, as discussed
above and in the Opinion, the Court found that Plaintiff had, in
Those cases all dealt with Section 1 claims that lacked the type of
direct allegations of coordinated behavior present here. Burtch, 662
F.3d at 226 (noting that the plaintiff had failed to allege direct
evidence of an agreement); Brokerage, 618 F.3d at 362 (elaborating on
law when Section 1 claim was based on “parallel conduct”);
TruePosition, 2012 WL 33075, at *21 (finding no direct evidence of
agreement). Those cases made clear, however, that plaintiffs lacking
direct allegations of coordinated behavior could still plausibly allege
a conspiracy if they placed their allegations of parallel behavior in
the appropriate context. Burtch, 662 F.3d at 228 (“Twombly further
required allegations be placed in a context that raises a suggestion of
a preceding agreement, not merely parallel conduct that could just as
well be independent action.”)(quotation and citation omitted)(emphasis
in original); Brokerage, 618 F.3d at 362 (finding that allegations of
parallel conduct “must be placed in some setting suggesting the
agreement necessary to make out a” Section 1 claim sufficient to
survive a motion to dismiss)(citing to Twombly); TruePosition, 2012 WL
33075, at *25 (finding that the complaint came “close to stating a
claim . . . but that it does not allege sufficient factual matter to
indicate that the alleged conduct of [the defendants] was more likely
the result of an unlawful agreement than independent action” and
allowing plaintiff “the opportunity to cure this defect and to submit
an amended pleading that more fully describes conduct placing the
Defendants’ conduct within the context of a preceding agreement”).
9
fact, plausibly alleged a common scheme to exclude it from the
market for certain advanced cardiac intervention procedures.
Legally, Section 1 claims do not require the anti-competitive
motive that Section 2 claims impose and that was the basis for
the Court’s rejection of Plaintiff’s Section 2 claim.
U.S. v.
Brown University in Providence in the State of Rhode Island, 5
F.3d 658, 672 (3d Cir. 1993)(recognizing that “good motives”
will not “validate an otherwise anticompetitive practice”)
(quotation and citation omitted); Geneva Pharm. Tech. Corp. v.
Barr Labs. Inc., 386 F.3d 485, 507 (2d Cir. 2004)(“The evidence
must prove defendants had an intent to adhere to an agreement
that was designed to achieve an unlawful objective; specific
intent to restrain trade is not required.”); Carpet Group Int’l
v. Oriental rug Importers Ass’n, 256 F. Supp. 2d 249, 256
(D.N.J. 2003)(recognizing that “a section 2 conspiracy claim is
harder to prove than a section 1 claim, particularly
because the former requires a showing of specific
intent.”); Murray v. Nat’l Football League, No. Civ. A. 94-5971,
1996 WL 363911, at *18 (E.D. Pa. June 28, 1996)(“Plaintiff need
not allege an intent on the part of the co-conspirators to
restrain trade, so long as the purported conspiracy
has an anti-competitive effect, plaintiff has made
out its case.”).
Rather, Section 1 only requires the plaintiff
to plausibly allege a motive for participation in the
10
conspiracy.
Deborah, 2011 WL 6935276, at *6, n. 7 (citing to
cases for proposition that each co-conspirator must only have
“motive to conspire”).
The Court found, and the Penn Defendants
do not dispute, that the Penn Defendants had an economic
incentive to participate in the alleged conspiracy.
sufficient.
That was
Accordingly, the Court rejects the Penn Defendants’
second argument in support of its motion for reconsideration.
IV.
Conclusion
For all these reasons, this Court concludes that it made no
error of law in its prior Opinion.
The Penn Defendants’ motion
for reconsideration is therefore DENIED.
s/Renée Marie Bumb
RENÉE MARIE BUMB
United States District Judge
Dated: April 19, 2012
11
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?