Dr. Mark G. Turner, DDS, PC et al v. Virginia Department of Medical Assistance Services ("DMAS") et al

Filing 27

MEMORANDUM OPINION (Granting Defendants' Motions to Dismiss; Denying Motion to Transfer as Moot). Signed by District Judge Henry E. Hudson on 03/19/2018. (tjoh, )

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF VIRGINIA
Richmond Division

DR. MARK G. TURNER, DDS, PC, and
DR. MARK G. TURNER, DDS in his

Individual capacity,
Plaintiffs,
Civil Action No. 3:17cv527-HEH

V.

VIRGINIA DEPARTMENT OF

MEDICAL ASSISTANCE SERVICES,
et al

Defendants.
MEMORANDUM OPINION

(Granting Defendants' Motions to Dismiss; Denying Motion to Transfer as Moot)
This matter is before the Court on three Motions to Dismiss pursuant to Federal
Rule of Civil Procedure 12(b)(6) and a Motion to Transfer Venue in accordance with 28

U.S.C. § 1404.' The Complaint contains one count alleging a violation of the Sherman
Act and several counts alleging violations of state law.

All parties have filed memoranda supporting their respective positions. The Court

will dispense with oral argument because the facts and legal contentions are adequately

presented in the materials before the Court, and oral argument would not aid in the
decisional process. E.D. Va. Local Civ. R, 7(J).
' Defendants Virginia Department of Medical Assistance Services ("DMAS") and Dr. Tonya ParrisWilkins, DDS ("Parris-Wilkins") filed a joint motion on August 25, 2017. (DMAS, Parris-Wilkins Mot.
to Dismiss, ECF No. 11.) Defendants Dr. David Black, DDS ("Black") and Dr. Terry Dickinson, DDS
("Dickinson") also filed a joint motion on August25,2017. (Black, Dickinson Mot. to Dismiss, ECF No.
9.) Defendant Dr. Greg Harvey, DDS ("Harvey") filed a Motion to Dismiss and a Motion to Transfer
Venue on September 6, 2017. (Harvey, Mot. to Dismiss, ECF No. 17; Harvey, Mot. to Transfer, ECF No.
19.)

For the reasons stated herein, the Court will grant the Motions to Dismiss. Count
One will be dismissed with prejudice. The remaining state law counts will be dismissed

without prejudice. The Motion to Transfer Venue will be denied as moot.
1.

Background

As required by Rule 12(b)(6) of the Federal Rules of Civil Procedure, the Court
assumes Plaintiffs well-pleaded allegations to be true and views all facts in the light
most favorable to him. T.G. Slater & Son v. Donald P. & Patricia A. Brennan LLC, 385

F,3d 836, 841 (4th Cir. 2004) (citing Mylan Labs, Inc. v. Matkari, 1 F.3d 1130, 1134 (4th
Cir. 1993)). Viewed through this lens, the facts are as follows.

Plaintiff Dr. Mark G. Turner, DDS^ ("Plaintiff) was a dentist in the Roanoke,
Virginia area during the period relevant to the Complaint. (Compl. ^ 1.) From 2008 to
2014, Plaintiff treated Medicaid patients in the Smiles for Children ("SFC") program

pursuant to an agreement with Defendant Dentaquest, LLC.^ {Id.

2-3.)

Defendant DMAS is the Virginia agency tasked with overseeing the SFC program

and contracted Defendant Dentaquest to administer and supervise the program. (Id. H6.)

DMAS is managed by the Secretary of Human Resources and a Director of Medical
Assistance Services, who is appointed by the Governor and subject to confirmation by the

General Assembly. Va. Code Ann. § 32.1-323. Additionally, DMAS has an elevenmember board ("DMAS Board"), which is comprised of five members who are health
^This action is brought by Plaintiff "both in his individual capacity and through his corporation thathe
did business" with. (Compl. ^ 20.)

^Defendant Dentaquest is the successor of Doral Dental USA, LLC, which is the party with whom
Plaintifforiginally entered into an agreement. Defendant Dentaquest is not a partyto the motions
presently before the Court.

care providers and six members who are not health care providers. Va. Code Ann. §

32.1-324(A). The DMAS Board formulates and submits a plan for the provision of
medical assistance services to the U.S. Secretary of Health and Human Services in

accordance with Title XIX of the Social Security Act. Va. Code Ann. § 32.1-325(A).
The Director of Medical Assistance Services is empowered to administer this plan and to

"enter into all contracts necessary or incidental to the performance of the Department's

duties and execution of its powers as provided by law." Va. Code Ann. § 32.1325(D)(1).

The SFC program is split into two parts: one component of the program is
dedicated to treating patients up to the age of twenty one and the other component

focuses on treating patients that are over the age of twenty one. {Id. H4.) Plaintiff
"worked exclusively with the Over 21 portion" of the SFC program. {Id.) During his
involvement with the SFC program, Plaintiff operated what was likely "the largest safety

net adult Medicaid practice in Virginia" and "was treating at least 75% of the eligible
Medicaid adults receiving treatment in the Roanoke Valley." {Id. 110.) The patients

Plaintiff treated under the SFC program formed the entirety of his practice. {Id.

3.)

The Roanoke-based Mission of Mercy Clinic ("MOM") was a project of the

Virginia Dental Association ("VDA") that provided "free, volunteer traveling dental"
services to the same segment of the population as Plaintiff. {Id.

13-14.) Defendant

Dickinson, the Executive Director of the VDA, and Defendant Black, a VDA board
member, are Founders of MOM, and Defendant Black serves as its Dental Director. {Id.

13, 27.) Plaintiff claims that competition with the MOM was detrimental to his

practice, but he also credits his dental practice as a "contributing factor [to] the Roanoke

Mission of Mercy going out of business." {Id. T| 42.) The MOM's financial model

proved unworkable, and, sometime after September 2012, the program was reorganized
into a Mini-MOM concept, which was "fully endorsed" by the VDA. (Id.

14, 42,44.)

In January 2014, Defendant Dentaquest ended Plaintiffs eligibility under the SFC

program by terminating Plaintiffs contract "without cause." {Id. fl 21,45.) Starting in
2014, Commonwealth Dental Clinic ("CDC"), which is owned by Defendant Harvey,

became the only "provider[] for Adult (Over 21) Medicaid dental services in Western
Virginia." {Id. H66.)

Plaintiff alleges that the "defendant dentists exercised their market power to push
the Plaintiff out of his dental market niche, and out of business" and that DMAS and

Dentaquest "knew there was antitrust activity" and took action that led to "further cover

up and concealment of Defendants' actions against [Plaintiff]." {Id. fl 18, 54-55.)
Specifically, Plaintiffclaims that, in downsizing from the financially inviable MOM,
Defendants agreed to provide treatment to non-Medicaid-eligible patients at the MiniMOMs and funnel all Medicaid-eligible patients to Defendant Harvey's CDC. {Id.

14,

18, 43.) Plaintiff further alleges that "Defendant Greg Harvey agreed to absorb the Over
21 Medicaid practice of Plaintiff on the condition that he would not have to compete

directly with Plaintiff" {Id. T| 48.) As such. Plaintiffalleges that Defendants Dickinson,
Black and Harvey "joined together ... to put [Plaintiff] out of business in the Medicaid
[SFC] program." {Id H 18.)

As mentioned above. Defendant Dentaquest terminated Plaintiffs contract, ending

his eligibility under the SFC program. {Id.

21,45.) Plaintiff does not contend that

Defendant Dentaquest lacked the contractual right to terminate his contract.'^ Instead,
Plaintiff alleges that Defendant Dentaquest "did not act independently," that "DMAS
sought the Plaintiffs termination based upon the advice of Defendants Terry Dickinson,
David Black and/or Greg Harvey," and that Defendant Dentaquest notified Plaintiffs

patients of his termination before the deadline for his appeal had passed. {Id. fl 45,46,
61.)

Plaintiff alleges that Defendant Dickinson communicated the progress of
Plaintiffs termination to Defendant Black; that Defendants Black and Harvey purchased

a building to house CDC prior to Plaintiffs termination ''with the knowledge and intent
... that one of their main competitors ([Plaintiff]) would be eliminated by Defendant

Dentaquest;" and that the VDA, led by Defendant Dickinson, supported the CDC despite
"not support[ing] the Over 21 Benefit in the past," {Id. fl 24, 35, 47.)

In January 2015, Plaintiff filed an ethics complaint ("2015 complaint") against
Defendants Harvey and Black with the VDA Ethics Committee regarding ethics
violations surrounding the naming and advertising of CDC. {Id. H27; Exhibit D, ECF

No. 1-4.) Plaintiffstates that the VDA "likely did not conduct a review of [Plaintiff]'s
Ethics Complaint, as, if they did, David Black would have been found blatantly guilty."

(Compl. f 27.) Further, Plaintiffalleges that Defendant Parris-Wilkins, a member of the
VDA and the VDA Ethics Committee, "presumably" ruled against this complaint. {Id. f
31.)
^ Plaintiff's asserted cause of action in the fifth count of the Complaint indicatesthat Plaintiffs contract
with Defendant Dentaquest was "terminable at will." (Compl. 31.)

In April 2016, Plaintiff was the subject of an inquiry by the Virginia Board of
Dentistry ("BOD") and was ultimately sanctioned for violations stemming from the

closure of his dental practice in 2014. {Id. T| 31; Exhibit N, ECF No. 1-17.) Defendant

Parris-Wilkins was on the BOD panel that ruled against Plaintiff. (Compl. H31.)
Plaintiff contends that Defendant Parris-Wilkins' service on this panel was a clear

conflict of interest, due to her "close relationship" with Defendant Dickinson and her role

in ruling against the 2015 complaint. {Id. H33.) In sum, Plaintiff claims that "Defendant
Parris-Wilkins was involved in the Defendants' attempts to cover up their actions against
Plaintiff." {Id.)
Plaintiff asserts a cause of action under Section One of the Sherman Act and

alleges that the relevant service market is:
(1) adult (over 21) dental services recognized under the Medicaid approved
Smiles For Children program; (2) tooth extractions and related services, as
identified under Medicaid approved Over 21 Smiles For Children program;
and (3) Medicaid approved services for the Over 21 members of the Smiles
For Children program in Western Virginia, and within a two hour drive of
Roanoke, Virginia.

{Id. H56.) Plaintiff claims that, as a result of Defendants' anticompetitive actions,
dentists have been deterred from entering the market and there has been a significant

reduction in the availability of dental services. {Id.

64.) Further, CDC will continue to

exercise its "influence" to maintain a "monopoly" over the market. {Id.) Plaintiff also
claims that he has been "directly harmed" by Defendants' anticompetitive conduct and

continues to suffer "significant economic and financial loss." {Id. H67.)
Plaintiff previously brought a nearly identical action against a nearly identical cast

of defendants in the United States District Court for the Western District of Virginia. See

Turner v. Va. Dep 't ofMed. Assistance Servs., 230 F. Supp.3d. 498 (W.D. Va. 2017)

(hereinafter "Western District Case"). After considering Plaintiffs arguments, the

Honorable Judge Jackson L. Kiser granted the defendants motions to dismiss and
dismissed the action without prejudice.
11.

Standard of Review

Generally, a court considering a motion to dismiss is both informed and

constrained by the four comers of a complaint. The court, however, may properly
consider documents that are attached to the complaint. Fed. R. Civ. P. 10(c), and take

judicial notice of matters of public record, Sec 'yofStatefor Defence v. Trimble

Navigation Ltd., 484 F.3d 700, 705 (4th Cir. 2007). The task at hand is to determine the

sufficiency of the Complaint, "not resolve contests surrounding the facts, the merits of a
claim, or the applicability of defenses." Republican Party ofN.C. v. Martin, 980 F.2d

943, 952 (4th Cir. 1992). In considering a motion to dismiss, plaintiffs well-pleaded

allegations are taken as true and the complaint must be viewed in the light most favorable
to the plaintiff. T.G. Slater & Son, Inc., 385 F.3d at 841.
Nevertheless, "in the event of conflict betweenthe bare allegations of the

complaint and any exhibit attached ... the exhibit prevails." Fayetteville Inv'rs v.
Commercial Builders, Inc., 936 F.2d 1462, 1465 (4th Cir. 1991). The so-called exhibit-

prevails rule is only applicable when a plaintiff relies on an exhibit to form part of its
claim, such that a court can presume plaintiff"has adopted as true the contents of the
document." Goines v. Valley Cmty. Servs. Bd., 822 F.3d 159, 166—67 (4th Cir. 2016).

A court "need not accept the legal conclusions drawn from the facts," nor must the

court "accept as true unwarranted inferences, unreasonable conclusions or arguments."
Eastern Shore Mkts., Inc. v. J.D. Assocs. Ltd. P'ship, 213 F.3d 175, 180 (4th Cir. 2000).
To survive Rule 12(b)(6) scrutiny, a plaintiff must provide more than merely "labels and
conclusions" or a "formulaic recitation of the elements of a cause of action." Bell Atl.

Corp. V. Twombly, 550 U.S. 544, 555 (2007) (citations omitted). Instead, a plaintiff must
allege facts sufficient "to raise a right to relief above the speculative level," stating a
claim that is "plausible on its face," rather than merely "conceivable." Id. at 555, 570

(citations omitted). "A claim has facial plausibility when the plaintiff pleads factual
content that allows the court to draw the reasonable inference that the defendant is liable

for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing
Twombly, 550 U.S. at 556).
III.

Discussion

Each of the Defendants that are parties to the Motions presently before the Court

have challenged the sufficiency of the factual allegations made in Plaintiffs Complaint
under the Twombly andIqbal standard. In addition. Defendant DMAS argues that the
doctrine of issue preclusion bars re-litigating Judge Kiser's determination that it is

immune from liability for violations of the Sherman Act. Alternatively, Defendant

DMAS argues that it is immune from liability under the Sherman Act for the same
reasons enunciated in the Western District Case. Because the immunity determination

would preclude liability regardless of the sufficiency of the factual allegations to state a
claim under the Sherman Act, the Court will address the issue preclusion and state action

immunity arguments first.
1. Issue Preclusion

First and foremost, the Court may properly consider whether the doctrine of issue

preclusion bars re-litigation of the immunity issue at this stage of litigation. The doctrine
of issue preclusion, also known as collateral estoppel, is an affirmative defense. It is
well-settled in the Fourth Circuit that a court ruling on a motion to dismiss may properly

consider affirmative defenses when such defenses "clearly appear on the face of the

complaint." Richmond, Fredericks burg & Potomac R.R. Co. v. Forst, 4 F.3d 244, 250
(4th Cir. 1993). Further, "a district court may properly 'take judicial notice of facts from

a prior judicial proceeding when the [collateral estoppel] defense raises no disputed issue
of fact.'" Ashe v. PNC Fin. Servs. Grp., 652 F. App'x 155, 157 (4th Cir. 2016) (quoting
Andrews v. Daw, 201 F.3d 521, 524 n.l (4th Cir. 2000)).

Plaintiff contends that "DMAS ... may not invoke state-action immunity."

(Compl. H70.) As discussed below, in making this claim. Plaintiffis attempting to re-

litigate the determination in the Western District Case thatDMAS is immune from this
action. Because the question of issue preclusion clearly appears on the face of the

Complaint, the Court can appropriately consider the preclusive effects of Judge Kiser's
opinion in the present case.

The burden is on the party seeking the preclusive effect of a determination to show

that issue preclusion is applicable. Issuepreclusion is only appropriate when the
proponent demonstrates:

(1) the issue or fact is identical to the one previously litigated; (2) the issue or fact

was actually resolved in the prior proceeding; (3) the issue or fact was critical and
necessary to the judgment in the prior proceeding; (4) the judgment in the prior
proceeding is final and valid; and (5) the party to be foreclosed by the prior
resolution of the issue or fact had a full and fair opportunity to litigate the issue or
fact in the prior proceeding.
Kloth V. Microsoft Corp., 355 F.3d 322, 326 (4th Cir. 2004). Plaintiff does not address

the issue preclusion argument in his memorandum opposing DMAS's Motion. For the
reasons below, the Court finds that issue preclusion does not apply.
The first, second, fourth and fifth elements are satisfied in the present case. The

state action immunity issue presently before the Court is identical to the one decided by

Judge Kiser in the Western District Case. Turner, 230 F. Supp.3d. at 505-07. Judge
Kiser resolved the immunity issue, and his dismissal of Plaintiffs action against DMAS

was based in part on that immunity determination. Id. at 507. Moreover, Plaintiff clearly
had a fiill and fair opportunity to be heard, as the dismissal came after the court heard

arguments from both parties. Id. at 505-07. Lastly, the dismissal operates as a final and
valid order.

With regard to the third element, the Court must consider whether the
determination that state action immunity applied to DMAS was critical and necessary to

the dismissal of the complaint against DMAS. In Ritter v. Mount St. Mary's College, the
Fourth Circuit found that "where the court in the prior suit has determined two issues,
either of which could independently support the result, then neither determination is
considered essential to the judgment. Thus, collateral estoppel will not obtain as to either
determination." 814 F.2d 986, 993 (4th Cir. 1987); see also Kloth, 355 F.3d at 328. In

pertinent part, Judge Kiser's opinion states: "Because DMAS has immunity against
10

claims under the Sherman Act, Plaintiff has failed to state a claim against DMAS."

Turner, 230 F. Supp. 3d at 507. While clearly relying on DMAS's immunity as one basis
for his dismissal of Plaintiff s action against it, Judge Kiser went on to determine that
dismissal was also warranted because Plaintiff failed to meet the plausibility standard

under Twombly and IqbaL Turner, 230 F. Supp. 3d at 508-09.
Because two independent reasons for dismissal of the claim against DMAS exist,

collateral estoppel will not attach to the immunity determination from the Western
District Case.

2. State Action Immunity

Defendant DMAS contends that the doctrine of state action immunity bars

Plaintiffs claim against it for alleged violations of Section One of the Sherman Act.

State action immunity, or Parker Immunity, makes clear that states are not bound by the
strictures of the Sherman Act regime when operating in their sovereign capacity. See
Parker v.

317 U.S. 341, 350-51 (1943). As described below, the state action

immunity doctrine is applicable to DMAS, and therefore DMAS is exempt from liability
under the Sherman Act.

In Parker, the Supreme Court found "nothing in the language of the Sherman Act
or in its history which suggests that its purpose was to restrain a state or its officers or

agents from activities directed by the legislature." Id. at 351. Subsequently, the Court
adopted a two-part test to better establish the boundaries of this immunity. See Cal
Retail Liquor Dealers Ass'n v. Midcal Aluminum, 445 U.S. 97 (1980). The Court
clarified in Midcal that "a challenged restraint" is only immune from suit if it is "clearly
11

articulated and affirmatively expressed as state policy ... [and that] policy must be

actively supervised by the State itself." Midcal, 445 U.S. at 105. Importantly, however,
the Court has carved out an exception to the active supervision component of the Midcal
test. See Hallie v. Eau Claire, 471 U.S. 34 (1985). In Hallie, the Court held that

municipalities are exempt from the active supervision requirement and suggested in dicta
that state agencies are as well. 471 U.S. at 47. The Court explained that the motivation

for this exemption is the limited concern that a municipality will engage in

anticompetitive conduct based upon purely private interests. Id.
Most recently, the Court addressed the applicability of the active supervision

requirement to state agencies in North Carolina State Board ofDental Examiners v. FTC.
135 S. Ct. 1101 (2015). The State of North Carolina entrusted the regulation of the

practice of dentistry to the North Carolina State Board of Dental Examiners (the
"Board"), and a majority of the Board's members were actively engaged in the practice
of dentistry. Id. at 1107-08. The Board was sued after it sought to prevent non-dentists

from providing teeth-whitening services. Id. The Court downplayed the significance of
the names or labels supplied by the State and instead focused on the composition of the

entity that allegedly engaged in anticompetitive conduct. Id. at 1114. Specifically, the
Court held that an entity is subject to the active supervision requirement when "a

controlling number of decisionmakers are active market participants in the occupation the
board regulates." Id.

In order for DMAS to be protected by Parker Immunity, its actions must have

been based upon a clearly articulated state policy and either actively supervised by the
12

state or exempted from the active supervision requirement.
DMAS was acting pursuant to a clearly articulated state policy when it directed

Dentaquest to terminate its contract with Plaintiff. The clearly articulated policy standard
is satisfied when "the displacement of competition is the inherent, logical, or ordinary

result of the exercise of authority delegated by the state legislature." N,C. State Bd. of
Dental Exam 'rs, 135 S. Ct. at 1112 (internal citations omitted). The Code of Virginia

authorizes DMAS to develop a plan for administering medical assistance services and
further entrusts the Director of DMAS with the authority to enter into contracts that are

"necessary or incidental" to DMAS performing the duties and executing the power it is
invested with by law. Va. Code. Ann. § 32.1-325(A), (D)(1). Implicit in the authority to
enter into contracts is the power to terminate them. Further, the displacement of some

competition is the natural consequence of DMAS exercising its administrative authority.
Plaintiff does not appear to contest that the Commonwealth of Virginia has

conferred this specific authority to DMAS or that the exercise of this authority would

necessarily have an impact on the competitive market. Instead, he contends that Virginia
has not articulated a clear policy allowing DMAS to engage in anticompetitive conduct.

{See Compl.

52-54, 70.) As detailed above, however, there is no requirement that a

state explicitly endorse the anticompetitive effects of a clearly articulated policy. Rather,
those effects need only be the inherent, logical, or ordinary result of exercising the

delegated authority. In this case, the exclusion or inclusion of various service providers
is the obvious and foreseeable result of the exercise of the administrative authority that

the Virginia General Assembly delegated to DMAS.
13

For these reasons, DMAS has satisfied the clearly articulated policy prong of the
Parker Immunity analysis.

DMAS is not subject to the active supervision requirement. The primary mission

of DMAS is the provision of medical assistance services and not the regulation or
licensure of members of the dental profession. See Va. Code Ann. §§ 32.1-323, etseq.

Moreover, DMAS is politically accountable. It is overseen by the Secretary of Human
Resources and the Director of DMAS, who is appointed by the Governor and subject to

confirmation by the General Assembly. To the extent the DMAS Board is relevant to the

actions underlying this case, only a minority of its members are health care providers. Cf.
N.C. State Bd ofDental Exam 'rs, 135 S. Ct. at 1114. Plainly put, the concern animating
the Court's active supervision line of cases—that private actors cloaked in the authority
of the state will subvert public priorities to private self-interest—is not present with
DMAS, which functions as a prototypical state agency.

Plaintiffs arguments that DMAS requires active supervision are unavailing.

Plaintiff essentially contends that in making its decision to terminate him DMAS relied

on the opinions and suggestions of active market participants and therefore "ceased to
maintain an objective approach to Plaintiff." (Compl. f 55.) Conspicuously absent from

the Complaint is any allegation that DMAS—the entity which ultimately made the
decision to terminate Plaintiff—is controlled by market participants. Plaintiff instead

alleges that DMAS "conspired" or "agreed" with the otherDefendants to exclude him
from the Medicaid market. {See Compl.

29, 59.) However, even if the Court were to

accept these conclusory allegations as true, "[t]here is no such conspiracy exception" to
14

Parker Immunity. City ofColumbia v. Omni Outdoor Advert., 499 U.S. 365, 374-79
(1991); see also N.C. State Bd, ofDental Exam 'rs, 135 S. Ct. at 1114.

DMAS operates as a prototypical state agency and is not controlled by active

market participants, and therefore the active supervision component of the Midcal test is
inapplicable. For these reasons, DMAS is immune from suit under the Sherman Act.
Therefore, Plaintiffs claim against DMAS for violating Section 1 of the Sherman Act
will be dismissed.

3.

Failure to State a Claim for Violation of the Sherman Act

Section 1 of the Sherman Act provides that "[e]very contract, combination in the

form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the

several States, or with foreign nations, is hereby declared to be illegal." 15 U.S.C. § 1.

"To establish a § 1 antitrust violation, a plaintiff must prove '(1) a contract, combination,

or conspiracy; (2) that imposed an unreasonable restraint on trade.'" N.C. State Bd. of
Dental Exam 'rs v. FTC, 717 F.3d 359, 371 (4th Cir. 2013) (quoting Dickson v. Microsoft

Corp., 309 F.3d 193, 202 (4th Cir. 2002)). Additionally, once a plaintiffdemonstrates a
violation of § 1, he must prove that he suffered an antitrust injury: the type of injury that
"the anti-trust laws were intended to prevent and that flows from that which makes
defendants' acts unlawful." Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477,
489 (1977).

At the outset, the Court notes that it is unclear how any of the individuals named
as Defendants could have possibly excluded Plaintiff from the Over 21 SFC program.

Plaintiff essentially contends that DMAS ordered Dentaquest to terminate its contract
15

with Plaintiff only after agreeing with Defendants Dickinson, Parris-Wilkins, Black and

Harvey that Defendant Harvey would fill the gap created by Plaintiffs termination. It is

undisputed, however, that Plaintiffs contract allowed for termination without cause. It is
also undisputed that DMAS and Dentaquest were the only entity with the authority to
terminate Plaintiffs contract. That the individual Defendants may have lobbied for

Plaintiffs termination or even agreed with DMAS that Plaintiff should be removed from

the Smiles for Children program does not change the fact that the power to exclude

Plaintiff from the program rested with DMAS and Dentaquest. As the Court stated in
Omni, "it is both inevitable and desirable that public officials [will] agree to do what one

or another group of private citizens urges upon them." 499 U.S. at 374.

Also noticeably absent from the Complaint is any explanation as to how the
individual Defendants could have conceivably excluded Plaintiff from the SFC program

market wielding powers that they did not have. Plaintiff broadly claims that "[DMAS],

Dentaquest... and the [i]ndividual Defendants have exercised the power to exclude
dentists from competing in the relevant service markets. These Defendants have the

power and perceived powerto provide contracts, issue finds, and order dentists to take or
refrain from certain conduct." (Compl. ^ 58.) Plaintiff, however, provides no indication
as to how or when the private individual Defendants exercised this authority. Further, the

only allegation of misconduct against Defendant Parris-Wilkins occurred in April of
2016, more than two years after Plaintiffs contract with Dentaquest was terminated.
A.

Plaintiff Fails to Plausibly Allege a Contract, Combination or Conspiracy

Because § 1 of the Sherman Act only restricts contracts, combinations and
16

conspiracies that restrain trade, the relevant inquiry "is whether the challenged
anticompetitive conduct "stem[s] from independent decisions or from an agreement, tacit

or express." Twombly, 550 U.S. at 553 (quoting Theatre Enters., Inc. v. Paramount Film
Distrib. Corp., 346 U.S. 537, 540 (1954)). In Twombly, the Court clarified that mere

conclusory claims of an agreement, even when paired with allegations of parallel
conduct, are insufficient to satisfy the contract, combination or conspiracy aspect of a § 1
antitrust claim. 550 U.S. at 553-55. "Without more, parallel conduct does not suggest

conspiracy, and a conclusory allegation of agreement at some unidentified point does not

supply facts adequate to show illegality." Id. at 556-57 (emphasis added).
The Fourth Circuit has found that "[a]ntitrust complaints ... 'that include detailed

factual allegations as to the who, what, when and where of the claimed antitrust
misconduct not surprisingly survive dismissal.'" SD3, LLC v. Black & Decker (U.S.)
Inc., 801 F.3d 412, 430 (4th Cir. 2015) (quoting William Holmes & Melissa

Mangiaracina, Antitrust Law Handbook § 9:14 (2014 supp.). Communications between
alleged conspirators can help raise an inference of agreement, as they afford the "means
and opportunity to conspire." Id. at 432. In essence, additional details that indicate a
meeting of the minds are required to "allay[] suspicion that the plaintiff is merely

speculating a conspiracy into existence from coincidentally similar action." Id. at 430.
Plaintiff falls well short of alleging the requisite meeting of the minds. The

Complaint contains nothing more than conclusory allegations of an agreement between
the Defendants. Moreover, those allegations are directly controverted by several other

statements in the Complaint that allege DMAS sought the advice of the Defendants.
17

(Compare Compl. H29 ("Defendant Dr. Greg Harvey, DDS formed and funded CDC
after agreeing with Defendants DMAS, Dickinson and Black that Plaintiff would be
terminated from the Virginia Medicaid program.")}

Compl. %55 ("DMAS sought the

opinion of Defendant Dickinson in regard to the decision to terminate Plaintiff, and
discussed this decision with Defendants Dickinson, Black and Harvey ... [t]hus, DMAS

ceased to maintain an objective approach to Plaintiff").)^ One party seeking the advice,
opinion or consultation of another party as to a decision does not imply that the two

entered into an agreement. This is no less true when the party seeking advice ultimately
follows that advice.

Even if the Court were willing to disregard this glaring inconsistency in Plaintiffs
Complaint, the remaining allegations do not provide the "more" necessary to

satisfactorily allege a § 1 antitrust violation. The fact that Defendant Dickinson
communicated with Defendant Black on the progress of Plaintiffs termination does not

suggest that the two were working together to bring the termination about. The fact that
Defendant Harvey had advanced knowledge of Plaintiffs termination and took steps to

fill the gap created by his termination does not suggest that he was active in causing the
termination. These examples at best represent parallel conduct which alone is not
^As evidence of the communication amongst the Defendants with regard to Plaintiffs termination,
Plaintiff attaches Exhibit T. ("Ex. T," EOF No. 1-23.) This exhibit shows that Defendant Dickinson was
in an email thread in which he was informed of Plaintiffs impending termination; however, the thread
does not show him advising, encouraging, agreeing or otherwise ordering that the termination occur.
Additionally, another email in the thread from a DMAS official reveals that Plaintiff was terminated due
to concern that Plaintiff presented a "liability given his staffing situation, [and] 17 complaints in 5 years."
(Ex. T at 5.) In accordance with the exhibit-prevails rule, it is likely that this statement can be relied on
for its truth to the detriment of any contrary allegations in the Complaint. See Goines, 822 F.3d at
166-67. That said, given the clear deficiencies of Plaintiffs Sherman Act claims, the Court need not rely
on this statement in its analysis.
18

actionable.

In its best light, the Complaint contains conclusory allegations of an agreement
and a few instances of parallel conduct. Under Twombly, additional factual allegations

are necessary in order to plausibly claim that an agreement was reached. Therefore,
Plaintiff has failed to sufficiently allege a meeting of the minds.

B.

Plaintiff Fails to Allege that He Suffered an Antitrust Injury

The requirement of demonstrating an antitrust injury stems from the enduring

principle that antitrust laws were enacted for "the protection of competition, not

competitorsy Brown Shoe Co. v. United States, 370 U.S. 294, 320 (1962). As such, a

plaintiffs injuries must be "of the type that the antitrust statute was intended to forestall."
Assoc. Gen. Contractors v. Cal. State Council ofCarpenters, 459 U.S. 519, 540 (1983).
Not all harms that flow from an antitrust violation are compensable under the antitrust
laws.

Though an injury may be "causally related to an antitrust violation, [it]
nevertheless will not qualify as antitrust injury unless it is attributable to an

anticompetitive aspect of the practice under scrutiny." Atl. Richfield Co. v. USA
Petroleum Co., 495 U.S. 328, 334 (1990) (internal quotations omitted). In essence, "a

plaintiffmust show that the net effect of a challenged restraint is harmful to competition."
Cont'I Airlines, Inc. v. United Airlines, Inc., Ill F.3d 499, 508 (4th Cir. 2002).

Identifying an antitrust injury is a necessary component of demonstrating standing to
bring an antitrust action. Kloth v. Microsoft Corp., 444 F.3d 312, 323 (4th Cir. 2006).
Plaintiffs antitrust claim founders at the starting gate because he fails to allege an
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antitrust injury. Plaintiffs loss of his "niche" practice due to the decision by DMAS to
terminate his contact and to contract with a replacement service provider is not the type

of injury that the antitrust laws were designed to prevent. The Complaint contains no

plausible allegations that this decision by DMAS will produce anticompetitive results in
the relevant market. Plaintiffs contention that his termination will serve as a deterrent to

others seeking to enter the market is a conclusion that is not tethered to any specific
factual allegations. Moreover, while DMAS's decision to remove Plaintiff as a service

provider may have had the effect of shutting him out of the Medicaid market, that is the
natural consequence of substituting one contractor for another. Drs. Steuer & Latham,
P.A. V. Nat'lMed Enters., 672 F. Supp. 1489, 1502 (D.S.C. 1987). "Merely changing
exclusive contractors, however, cannot constitute a violation of the antitrust laws." Id.

The core of Plaintiffs alleged injury is that he was previously able to provide service to

the vast majority of Medicaid eligible patients through his contract with Dentaquest; "he

may not now complain that someone else enjoys a similar position." Shafi v. St. Francis
Hosp.^ms. 90-3107, 90-3117, 1991 U.S. App. LEXIS 15232, *10 (4th Cir. July 16,
1991).

Additionally, in Brunswick the Court made clear that a plaintiff cannot claim an

antitrust injury if his alleged loss would have resulted even without an antitrust violation.
429 U.S. 477,488-89. In this case. Plaintiffs contract was terminable by either party

without cause. Plaintiffs alleged injury stems from the termination of his contract and

Defendant Harvey's practice filling the coverage gap created by his termination.
According to Plaintiff, this has had the effect of shutting him out of the relevant market.
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But, because Plaintiff narrowly defines the relevant market as participation in the Over 21
SFC program, any termination by Dentaquest would have resulted in Plaintiffs exclusion
from the relevant market. In essence, he is attempting to use the Sherman Act to make an
end-run around his at-will contract. The antitrust laws were not created to protect against

this type of injury.

Plaintiff failed to allege the requisite agreement to restrain trade and failed to

demonstrate that he suffered an antitrust injury. As such, the Sherman Act claim will be
dismissed with prejudice
4.

State Law Claims

In addition to his claim under the Sherman Act, Plaintiff alleges five counts under

various state laws. The Court's original jurisdiction over this action stems from the

presence of a federal question based upon the Sherman Act count. 28 U.S.C. § 1331.
Now that the sole federal question presented in this case has been dismissed, the Court
will decline to exercise its supplementaljurisdiction pursuant to 28 U.S.C. § 1367(c). As

such, the remaining state law counts will be dismissed without prejudice.
IV.

Conclusion

For the foregoing reasons, the Complaint will be dismissed. Consequently,
Defendant Harvey's Motion to Transfer Venue will be denied as moot.
The Court additionally notes that it gave serious consideration to imposing

sanctions in this case. The protracted history of this litigation reveals that Plaintiff has

had ample opportunity to have his Sherman Act claims heard. Rather than address the
deficiencies identified with particularity by Judge Kiser, Plaintiff re-filed a nearly
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identical Complaint in this District. The most substantive change by Plaintiff was the
addition of Defendant Parris-Wilkins, whom he alleges engaged in a conspiracy that

occurred more than two years before he alleges any conduct on her part.
Plaintiffs filings in Opposition to the Motions to Dismiss are similarly, if not

more egregiously, inadequate. Plaintiff quite apparently copied wholesale from filings he
made in the Western District Case, often with limited applicability. For instance, the

second page of his Opposition to Defendants DMAS and Parris-Wilkins's Motion
contains a paragraph that references a "First Amended Complaint" and the "Blue Ridge
Defendants." Plaintiff has not defined any group of Defendants by that term in this case

and the Complaint in this case has not been amended. Instead, this paragraph appears

verbatim in a Response in Opposition to a Motion to Dismiss filed by Plaintiff in the
Western District Case. (See Civil Case No. 4:16-cv-43 (W.D. Va. 2017), ECF No. 52.)

Additionally, Defendants DMAS and Parris-Wilkins point out that several of the

arguments advanced by Plaintiffs Opposition appear to stem from an entirely different
case. (See Defendants DMAS and Parris-Wilkins Reply 3, n. 1, ECF No. 22.) And

Plaintiff generally failed to address several of the points raised by all the Defendants.
In spite of these questionable tactics, the Court does not feel that imposing
sanctions is appropriate at this time. However, subsequent filings by Plaintiff attempting
to rehash this same claim against these same Defendants will be viewed by this Court as

an attempt to harass and will not engender a favorable response. Plainly put, if Plaintiff
again charts the same course he has in this case, his path will likely include penalties
under Rule 11 of the Federal Rules of Civil Procedure.
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An appropriate Order will accompany this Memorandum Opinion.

/s/

Henry E. Hudson
United States District Judge

Date:.%Arci. 11^20 IS
Richmond, VA

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