Case 6:21-cv-00681-RBD-GJK Document 82 Filed 01/25/22 Page 1 of 7 PageID 815
`
`UNITED STATES DISTRICT COURT
`MIDDLE DISTRICT OF FLORIDA
`ORLANDO DIVISION
`
`
`
`ANTHONY COLUCCI; and
`VANESSA LORRAINE SKIPPER,
`
`Plaintiffs,
`
`
`
`
`
`
`v.
`
`
`HEALTH FIRST, INC.,
`
`Defendant.
`
`____________________________________
`
`
`
`ORDER
`
` Case No. 6:21-cv-681-RBD-GJK
`
`
`
`Before the Court are:
`
`1.
`
`Defendant’s Motion to Dismiss Counts II and III of the Second
`
`Amended Class Action Complaint (Doc. 56 (“Motion”)); and
`
`2.
`
`Plaintiffs’ Response in Opposition to Defendant’s Motion to Dismiss
`
`(Doc. 62).
`
`The Motion is due to be granted in part and denied in part.
`
`BACKGROUND1
`
`In this antitrust case, Plaintiffs allege that Defendant engages in
`
`anticompetitive practices in the acute health care market in Brevard County,
`
`
`1 These factual allegations are presented in the light most favorable to Plaintiffs and taken
`as true for the purpose of this Motion. See Hill v. White, 321 F.3d 1334, 1335 (11th Cir. 2003).
`
`
`
`UNITED STATES DISTRICT COURT
`MIDDLE DISTRICT OF FLORIDA
`ORLANDO DIVISION
`
`
`
`ANTHONY COLUCCI; and
`VANESSA LORRAINE SKIPPER,
`
`Plaintiffs,
`
`
`
`
`
`
`v.
`
`
`HEALTH FIRST, INC.,
`
`Defendant.
`
`____________________________________
`
`
`
`ORDER
`
` Case No. 6:21-cv-681-RBD-GJK
`
`
`
`Before the Court are:
`
`1.
`
`Defendant’s Motion to Dismiss Counts II and III of the Second
`
`Amended Class Action Complaint (Doc. 56 (“Motion”)); and
`
`2.
`
`Plaintiffs’ Response in Opposition to Defendant’s Motion to Dismiss
`
`(Doc. 62).
`
`The Motion is due to be granted in part and denied in part.
`
`BACKGROUND1
`
`In this antitrust case, Plaintiffs allege that Defendant engages in
`
`anticompetitive practices in the acute health care market in Brevard County,
`
`
`1 These factual allegations are presented in the light most favorable to Plaintiffs and taken
`as true for the purpose of this Motion. See Hill v. White, 321 F.3d 1334, 1335 (11th Cir. 2003).
`
`
`
`Case 6:21-cv-00681-RBD-GJK Document 82 Filed 01/25/22 Page 2 of 7 PageID 816
`
`Florida (“Brevard”). (Doc. 53, ¶ 2.) Defendant owns four hospitals in Brevard and
`
`dominates the acute care market, partially through purported intimidation tactics
`
`that induce exclusive referrals. (Id. ¶¶ 7, 42.)
`
`Plaintiffs further allege that Defendant conspired with AdventistHealth
`
`(“Adventist”) to divide the sale of inpatient and emergency room acute care in the
`
`relevant market and allege direct evidence of this: a written agreement in 2019;
`
`many inpatients arbitrarily forced to travel to Adventist hospitals outside Brevard;
`
`Defendant allowing surgeons to use only Adventist when they request higher
`
`levels of care, despite different requests or inadequacy of Adventist; Adventist
`
`declining to purchase a cancer center in Brevard and despite not receiving an offer,
`
`Defendant expressing interest in the center; and Defendant executing a letter of
`
`intent to collaborate with Adventist in providing urgent care throughout Brevard.
`
`(Id. ¶¶ 2–3, 79–93.)
`
`Plaintiffs also allege these circumstantial “plus factors” they claim show
`
`unlawful horizontal market division: by owning thirty percent of Defendant,
`
`Adventist has a motive not to compete; Adventist has two seats on Defendant’s
`
`Board of Directors (“Board”), which also allow opportunities to discuss division;
`
`Defendant’s market structure, created through intimidation tactics, makes
`
`avoiding competition by Adventist more likely; Adventist likely chose to partially
`
`own Defendant because empirical analysis shows that approach to be more
`
`
`
`2
`
`
`
`Case 6:21-cv-00681-RBD-GJK Document 82 Filed 01/25/22 Page 3 of 7 PageID 817
`
`beneficial to increasing prices; and, despite quickly expanding throughout Florida,
`
`Adventist has not purchased hospitals in Brevard. (Id. ¶¶ 94–110.)
`
`So Plaintiffs brought a Second Amended Complaint (“SAC”) asserting:
`
`(1) monopolization of the Brevard acute care relevant market; (2) horizontal
`
`market division in restraint of trade; (3) restraining competition via sale of partial
`
`ownership; (4) exclusive dealing in restraint of trade; and (5) violation of the
`
`Florida Antitrust Act. (Id. ¶¶ 132–66.) Defendant successfully moved to dismiss
`
`what was Count III (now Count II) in the First Amended Complaint (“FAC”). (See
`
`Docs. 26, 48.) The Court found that Plaintiffs did not adequately plead a claim for
`
`horizontal market division. (Doc. 48, pp. 8–10.) Now Defendant again moves to
`
`dismiss Count II and the newly asserted Count III, arguing they fail to state a
`
`claim. (Doc. 56.) Plaintiffs oppose. (Doc. 62.) The matter is ripe.
`
`STANDARDS
`
`A plaintiff must plead “a short and plain statement of the claim.” Fed. R.
`
`Civ. P. 8(a)(2). On a motion to dismiss under Rule 12(b)(6), the Court limits its
`
`consideration to “the well-pleaded factual allegations.” La Grasta v. First Union
`
`Sec., Inc., 358 F.3d 840, 845 (11th Cir. 2004). The factual allegations must “state a
`
`claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544,
`
`570 (2007). The Court must accept the factual allegations as true and construe them
`
`“in the light most favorable” to the plaintiff. See United Techs. Corp. v. Mazer,
`
`
`
`3
`
`
`
`Case 6:21-cv-00681-RBD-GJK Document 82 Filed 01/25/22 Page 4 of 7 PageID 818
`
`556 F.3d 1260, 1269 (11th Cir. 2009). But this “tenet . . . is inapplicable to legal
`
`conclusions.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
`
`ANALYSIS
`
`I.
`
`Count II: Horizontal Market Division
`
`First, Plaintiffs allege that Defendant violated § 1 of the Sherman Act
`
`through horizontal market division. (Doc. 53, ¶¶ 140–46.) Defendant argues these
`
`allegations do not satisfy Twombly because they neither establish an illegal
`
`conspiracy nor allow for an inference of one. (Doc. 56, p. 9.) Plaintiffs respond that
`
`their allegations and “plus factors” are sufficient. (Doc. 62, pp. 3–5.) The Court
`
`agrees with Plaintiffs.
`
`Under the Sherman Act, “horizontal price fixing” is per se illegal. Jacobs v.
`
`Tempur-Pedic Int’l, Inc., 626 F.3d 1327, 1334 (11th Cir. 2010). Plaintiffs who plead an
`
`agreement to create horizontal price restraints must allege facts “suggestive
`
`enough to render a § 1 conspiracy plausible.” Id. at 1343 (cleaned up). Conscious
`
`parallelism is insufficient, so a plaintiff must plead the existence of “plus factors”
`
`that render the “evidence more probative of conspiracy.” Quality Auto Painting Ctr.
`
`of Roselle, Inc. v. State Farm Indem. Co., 917 F.3d 1249, 1262 (11th Cir. 2019) (cleaned
`
`up). “[T]he character and effect of a conspiracy are not to be judged by
`
`dismembering it and viewing its separate parts, but only by looking at it as a
`
`whole.” United States v. Patten, 226 U.S. 525, 544 (1913); see Quality Auto, 917 F.3d
`
`
`
`4
`
`
`
`Case 6:21-cv-00681-RBD-GJK Document 82 Filed 01/25/22 Page 5 of 7 PageID 819
`
`at 1263 n.15.
`
`The SAC includes new allegations not included in the FAC: (1) Defendant
`
`and Adventist signed a written agreement in 2019 purportedly to engage in
`
`horizontal market division; and (2) Defendant executed a letter of intent with
`
`Adventist to provide urgent care throughout Brevard. (Doc. 53, ¶¶ 80, 93.)
`
`Plaintiffs also allege other facts for the first time, including that Defendant restricts
`
`patients needing “higher care” to receiving treatment in Adventist hospitals and
`
`that despite aggressive expansion in the recent years, Adventist has declined to
`
`enter Brevard. (Id. ¶¶ 82–93.) Taking these allegations as true, Plaintiffs have
`
`alleged “enough fact[s] to raise a reasonable expectation that discovery will reveal
`
`evidence of illegal agreement.” Twombly, 550 U.S at 556; see Mayor & City Council
`
`of Baltimore v. Citigroup, Inc., 709 F.3d 129, 136 (2d Cir. 2013). So this portion of
`
`Defendant’s Motion is due to be denied.
`
`II.
`
`Count III: Restraining Competition
`
`Next, Plaintiffs allege that Defendant violated § 7 of the Clayton Act by
`
`selling at least thirty percent of its shares to Adventist and ceding two seats on its
`
`Board, substantially lessening the competition. (Doc. 53, ¶ 149.) Defendant first
`
`argues this claim is improperly asserted against Defendant because § 7 targets the
`
`acquirer—Adventist. (Doc. 56, p. 21.) Plaintiffs respond that Defendant “acquired
`
`control over Adventist’s business and anti-competitive posture,” which is
`
`
`
`5
`
`
`
`Case 6:21-cv-00681-RBD-GJK Document 82 Filed 01/25/22 Page 6 of 7 PageID 820
`
`actionable under § 7. (Doc. 62, pp. 17, 19.) But Plaintiffs provide no support for this
`
`proposition.
`
`Section 7 of the Clayton Act applies only to the acquirer, not the acquired
`
`entity. See Dailey v. Quality Sch. Plan, Inc., 380 F.2d 484, 488 (5th Cir. 1967)
`
`(“[Section] 7 by its terms proscribes only the acquiring corporation”);2 see also Tim
`
`W. Koerner & Assocs., Inc. v. Aspen Labs, Inc., 492 F. Supp. 294, 300 (S.D. Tex.
`
`1980), aff’d, 683 F.2d 416 (5th Cir. 1982); Arbitron Co. v. Tropicana Prod. Sales, Inc.,
`
`No. 91-cv-3697, 1993 WL 138965, at *4 (S.D.N.Y. Apr. 28, 1993).3 In similar
`
`circumstances to this case, a court found that a partially acquired company still
`
`could not have a § 7 claim asserted against it even though it controlled part of the
`
`acquirer’s business. See Gerlinger v. Amazon.com, Inc., 311 F. Supp. 2d 838, 852 (N.D.
`
`Cal. 2004).
`
`Here, Plaintiffs have provided no authority in which a court has permitted
`
`a § 7 claim against the acquired company. Nor do the facts support Plaintiffs’
`
`argument that the acquired company controls the acquiring one, as Adventist
`
`occupies two seats on Defendant’s Board, not the other way around. (See Doc. 53,
`
`
`2 Decisions of the former U.S. Court of Appeals for the Fifth Circuit rendered before
`October 1, 1981, are binding on courts within the Eleventh Circuit. Bonner v. City of Prichard, 661
`F.2d 1206, 1207 (11th Cir. 1981) (en banc).
`3 Even Plaintiffs’ cited case, United States v. Dairy Farmers of America, Inc., 426 F.3d 850, 858
`(6th Cir. 2005), dealt with a suit against the acquiring party. (Doc. 62, p. 17.)
`6
`
`
`
`
`
`Case 6:21-cv-00681-RBD-GJK Document 82 Filed 01/25/22 Page 7 of 7 PageID 821
`
`¶ 149.) As Plaintiffs’ claim lacks factual and legal support, this portion of
`
`Defendant’s Motion is due to be granted.4
`
`CONCLUSION
`
`Accordingly, it is ORDERED AND ADJUDGED that Defendant’s Motion
`
`(Doc. 56) is GRANTED IN PART AND DENIED IN PART:
`
`1.
`
`The Motion is GRANTED as to Count III (Doc. 53, ¶¶ 147–53), which
`
`is DISMISSED WITH PREJUDICE.
`
`2.
`
`The Motion is DENIED as to Count II (id. ¶¶ 140–46) and in all other
`
`respects.
`
`DONE AND ORDERED in Chambers in Orlando, Florida, on January 24,
`
`2022.
`
`
`
`
`
`
`
`
`4 Based on these undisputed facts, amendment would be futile. See Hilderbrandt v. Butts,
`550 F. App’x 697, 699 (11th Cir. 2013).
`
`
`
`7
`
`
Accessing this document will incur an additional charge of $.
After purchase, you can access this document again without charge.
Accept $ Charge
Still Working On It
This document is taking longer than usual to download. This can happen if we need to contact the court directly to obtain the document and their servers are running slowly.
Give it another minute or two to complete, and then try the refresh button.
A few More Minutes ... Still Working
It can take up to 5 minutes for us to download a document if the court servers are running slowly.
Thank you for your continued patience.
This document could not be displayed.
We could not find this document within its docket. Please go back to the docket page and check the link. If that does not work, go back to the docket and refresh it to pull the newest information.
Your account does not support viewing this document.
You need a Paid Account to view this document. Click here to change your account type.
Your account does not support viewing this document.
Set your membership
status to view this document.
With a Docket Alarm membership, you'll
get a whole lot more, including:
- Up-to-date information for this case.
- Email alerts whenever there is an update.
- Full text search for other cases.
- Get email alerts whenever a new case matches your search.
One Moment Please
The filing “” is large (MB) and is being downloaded.
Please refresh this page in a few minutes to see if the filing has been downloaded. The filing will also be emailed to you when the download completes.
Your document is on its way!
If you do not receive the document in five minutes, contact support at support@docketalarm.com.
Sealed Document
We are unable to display this document, it may be under a court ordered seal.
If you have proper credentials to access the file, you may proceed directly to the court's system using your government issued username and password.
Access Government Site
