UNITED STATES DISTRICT COURT
`WESTERN DISTRICT OF NORTH CAROLINA
`
`BUNCOMBE COUNTY, NORTH CAROLINA
`and CITY OF ASHEVILLE, NORTH
`CAROLINA, on their own behalf and on behalf
`of all others similarly situated,
`
`No.: 1:22-cv-147
`
` Plaintiffs,
`
` v.
`
`HCA HEALTHCARE, INC., HCA
`MANAGEMENT SERVICES, LP, HCA, INC.,
`MH MASTER HOLDINGS, LLLP, MH
`HOSPITAL MANAGER, LLC, MH MISSION
`HOSPITAL, LLLP, ANC HEALTHCARE,
`INC. f/k/a MISSION HEALTH SYSTEM,
`INC., and MISSION HOSPITAL, INC.,
`
` Defendants.
`
`JURY TRIAL DEMANDED
`
`CLASS ACTION COMPLAINT
`
`Plaintiffs Buncombe County, North Carolina (“Buncombe”) and City of Asheville, North
`
`Carolina (“Asheville”) (“Asheville,” and “Buncombe” together, “Plaintiffs”), individually, and on
`
`behalf of all others similarly situated, bring this action against Defendants HCA Healthcare, Inc.,
`
`HCA Management Services, LP, and HCA, Inc. (collectively “HCA”), and MH Master Holdings,
`
`LLLP, MH Hospital Manager, LLC, MH Mission Hospital, LLLP, ANC Healthcare, Inc. f/k/a
`
`Mission Health System, Inc, and Mission Hospital, Inc. (collectively, “Mission”) (“Mission” and
`
`“HCA” together, “Defendants”). Plaintiffs allege as follows:
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`

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`
`I.
`
`NATURE OF THE ACTION
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`1.
`
`This case arises at a time when providing affordable health care insurance plans for
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`working families and governmental employees, such as firefighters, police, and teachers, and
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`controlling health care costs have been top priorities for Plaintiffs and members of the proposed
`
`Class, the business communities they serve, and state and local governments in Western North
`
`Carolina. As described in detail in this Complaint, Defendants’ conduct has restricted competition
`
`in the health care markets defined herein, thereby substantially and artificially inflating health care
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`prices paid by Plaintiffs and proposed Class member health plans. This proposed class action for
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`unlawful restraint of trade and monopolization seeks to redress these harms. Plaintiffs seek
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`damages and injunctive and equitable relief under Sections 1 and 2 of the Sherman Antitrust Act,
`
`15 U.S.C. §§ 1 and 2.
`
`2.
`
`Plaintiffs are a North Carolina county (Buncombe) and a North Carolina
`
`municipality (Asheville) which operate self-funded health insurance plans for their employees and
`
`their families. Plaintiffs directly pay one or more Defendant(s) for health care for their insureds
`
`and have been and continue to be injured thereby because Defendants’ prices are artificially
`
`inflated due to the ongoing anticompetitive conduct alleged herein.
`
`3.
`
`Plaintiffs seek to represent a class of similarly situated North Carolina health
`
`insurance plans, including self-funded and commercial insurers (“health plans” or the “Class,”
`
`which is more specifically defined in paragraph 190 below), each of which paid directly to one or
`
`more Defendant(s) on behalf of their insureds for health care services in the relevant markets
`
`alleged herein.
`
`4.
`
`Defendants have injured Plaintiffs and members of the Class through an
`
`anticompetitive scheme (the “Scheme”) involving the illegal maintenance and enhancement of
`
`
`
`2
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`monopoly power in two health care services markets (the “Relevant Services Markets”): (1) the
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`market for inpatient general acute care (“GAC”) in hospitals (“GAC Market”), consisting of a
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`broad group of medical and surgical diagnostic and treatment services that include overnight
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`hospital stays (“GAC Services”); and (2) the market for outpatient care (“Outpatient Market”),
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`encompassing all the medical services that are not GAC Services (“Outpatient Services”).
`
`5.
`
`Defendants dominate the Relevant Services Markets in at least two geographic
`
`areas (the “Relevant Geographic Markets”): (1) the “Asheville Region,” consisting of Buncombe
`
`and Madison Counties; and (2) the “Outlying Region,” consisting of Macon, McDowell, Mitchell,
`
`Transylvania, and Yancey Counties, or in the alternative with respect to Outlying Region, (3) each
`
`of the separate counties in the Outlying Region. Together, the Relevant Services Markets and the
`
`Relevant Geographic Markets are, collectively, the “Relevant Markets.”
`
`6.
`
`In 1995 Mission Health System merged with St. Joseph’s Hospital, Mission’s only
`
`significant competitor in the Relevant Geographic Markets. As a result, Mission’s flagship
`
`Asheville hospital (“Mission Hospital-Asheville”) became the dominant provider of GAC Services
`
`in the Asheville Region with substantial monopoly power in the GAC Market in that region.
`
`7.
`
`From 1995 until 2016, Mission was immunized from antitrust liability by a state
`
`statute under which it was issued a Certificate of Public Advantage (“COPA”). The COPA is a
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`form of regulation in which a hospital is permitted to operate with monopoly power in exchange
`
`for subjecting itself to state oversight.
`
`8.
`
`In 2016, after years of lobbying at the behest of Mission executives, the State
`
`repealed the COPA, leaving in place an unregulated organization with monopoly power. After
`
`
`
`3
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`repeal, Mission and HCA Healthcare, Inc. (the parent company of the subsequent purchaser of
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`Mission’s assets) lost any immunity from suit under the Sherman Act.1
`
`9.
`
`In January 2019, Mission sold its assets to MH Master Holdings, LLLP, an HCA
`
`subsidiary and part of one of the world’s largest for-profit hospital chains. HCA owns over 200
`
`hospitals across the United States. HCA has been the subject of approximately twenty Federal
`
`Trade Commission (“FTC”) antitrust proceedings over the past two decades. HCA purchased
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`Mission’s assets, in significant part, because Mission had monopoly power in the GAC Market in
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`the Asheville Region—monopoly power that HCA knew it could exploit to maintain and enhance
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`Mission’s monopoly power in the Relevant Markets.
`
`10.
`
`Today, HCA controls more than 85 percent of the GAC Market, based on patient
`
`volume,2 in the Asheville Region with an 89.1% share in Madison County and an 88.6% share in
`
`Buncombe County. The commercial insurers and self-funded payors (collectively, “health plans”)
`
`that comprise the proposed Class, at all times relevant to this Complaint, had no choice but to
`
`include Mission’s hospital system in the GAC Market in their insurance networks. There is no
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`practical alternative for these services in this region.
`
`11.
`
`Due to the conduct challenged in this Complaint, HCA also enjoys monopoly power
`
`in the GAC Market in the Outlying Region, with a 70-plus% market share in each county in the
`
`Outlying Region: Yancey (88.3% market share); Mitchell (85.4% market share); Transylvania
`
`(78.7% market share); McDowell (76.4% market share); and Macon (74.7% market share).
`
`
`
`1 Hereinafter, unless otherwise indicated, “HCA” refers to the parent company that bought Mission
`and that parent’s subsidiaries, while the term “Defendants” refers to HCA and the remnant
`companies of the former Mission.
`
`2 These market shares and all others reported in the Complaint are based on patient volume unless
`otherwise indicated.
`
`
`
`4
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`12.
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`One of the reasons HCA found Mission attractive as a business opportunity is that,
`
`beginning in or about 2017, Mission, under its immediate pre-buyout executive management team,
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`had embarked on a continuing, multifaceted coercive Scheme designed to foreclose competition
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`from rivals, to maintain or to enhance its monopoly power in the Relevant Markets, and ultimately
`
`to charge supracompetitive prices—prices above their competitive level—for GAC and Outpatient
`
`Services. The anticompetitive conduct challenged in this Complaint began before HCA’s
`
`acquisition of Mission, and HCA supercharged the Scheme after it acquired Mission. The Scheme
`
`includes, among other anticompetitive features: (1) “all-or-nothing” tying arrangements requiring
`
`health insurance plans to contract with all of Mission’s (and later HCA’s) GAC and Outpatient
`
`Services as a bundle, i.e., take everything together or nothing at all; (2) exclusionary requirements
`
`in the form of anti-steering and anti-tiering provisions, which prevent insurance companies from
`
`steering insureds to less expensive and/or higher quality options as a means to promote competition
`
`and reduce prices; (3) “gag” clauses that prevent insurers from communicating with employers
`
`and patients about the prices they pay for health care and thus determine how best to reduce costs;
`
`and (4) other anticompetitive conduct relating to the negotiation of pricing for GAC Services. HCA
`
`continued and reinforced each of the foregoing elements of the Scheme after it acquired Mission
`
`in January 2019.
`
`13. Mission, and then HCA after purchasing Mission, have abused their monopoly
`
`power in GAC Market in the Asheville Region (the “tying market”) to maintain or enhance their
`
`monopoly power in multiple “tied” markets, including the Outpatient Market in the Asheville
`
`Region, and the GAC Market and Outpatient Market in the Outlying Region (or, alternatively, in
`
`the five individual counties that make up that region). The Defendants have accomplished this, in
`
`part, by tying GAC and Outpatient Services together, in both the Asheville Region and Outlying
`
`
`
`5
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`Region, and giving all health plans no choice but to include all of Defendants’ services together as
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`“in network” services.
`
`14.
`
`As explained below, when health services are “out of network” for a health plan,
`
`they typically will be much more costly to patients than if included “in network.” By tying their
`
`services and regions together, Defendants coercively rob health plans of the ability to choose which
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`service and providers are in or out of network. At the heart of the Scheme is this immutable fact:
`
`because of Mission’s monopoly power, health plans require in-network access to HCA’s GAC
`
`Services in the Asheville Region in order to offer any minimally viable health plan in the Relevant
`
`Geographic Markets. But because HCA ties access to that (tying) product to the other (tied)
`
`products and regions, HCA can coerce and has coerced health plans to contract for HCA’s tied
`
`services. This tying prevents health plans from using the presence of actual or potential competing
`
`services in the tied markets as leverage to negotiate lower prices from HCA. Additionally, this
`
`coercive tying reinforces HCA’s monopoly power in the tying market because it substantially
`
`reduces the ability of actual or potential competitors in the tying market to compete against HCA’s
`
`all-or-nothing bundle. The tying thus enables HCA to discourage the sort of competition that
`
`lowers prices and improves quality. As a result, the Scheme has enabled HCA to continue to charge
`
`higher prices and to offer lower quality for its services in both the tying and tied markets as
`
`compared to a more competitive state of affairs in which HCA did not engage in the
`
`anticompetitive Scheme.
`
`15.
`
`In addition, and also as part of the Scheme, Mission and HCA have abused their
`
`monopoly power in GAC Market in the Asheville Region to impose exclusionary requirements in
`
`the form of coercively imposed anti-steering provisions in their contracts with health plans for
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`both GAC and Outpatient Services in all Relevant Geographic Markets. These anti-steering
`
`
`
`6
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`provisions prevent health plans from providing information or from encouraging patient use of
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`less expensive and higher quality non-Defendant providers of GAC and Outpatient Services in the
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`Relevant Geographic Markets. As a result, and together with the other conduct challenged in this
`
`Complaint, these anti-steering provisions prevent health plans from encouraging price competition
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`between Mission/HCA and actual and potential rivals, and also reduce the incentive for rivals and
`
`potential rivals to use lower prices as a means to gain patients in all of the Relevant Markets
`
`(including both product and geographic markets).
`
`16. Mission and HCA have further abused their monopoly power in the GAC Market
`
`in the Asheville region by imposing exclusionary requirements in the form of tiering prohibitions.
`
`Tiered networks, a form of steering, enable health plans to sort providers into tiers based on their
`
`cost and, often, quality relative to other similar providers who treat comparable patients. Health
`
`plans with tiering provisions give preferred rankings to providers with higher quality and lower
`
`cost, incentivizing members to use providers in the higher tiers. Tiering is an important means by
`
`which the plans help control their costs and reduce health care prices. Like its use of anti-steering
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`provisions, its imposition of anti-tiering provisions forecloses competition and otherwise impedes
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`beneficial competitive outcomes.
`
`17.
`
`Defendants also have abused their monopoly power in the GAC Market in the
`
`Asheville Region to impose “gag” clauses that inhibit the ability of employer self-funded health
`
`plans to know the prices they pay for their employees’ health care and use that information to help
`
`reduce health care costs.
`
`18.
`
`By preventing health plans that must offer access to HCA’s GAC Services in the
`
`Asheville Region from contracting with, or steering patients to, HCA’s actual or potential
`
`competitors in the Relevant Markets, Defendants’ Scheme substantially forecloses competition in
`
`
`
`7
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`all of the Relevant Markets. The abilities to (a) assemble different combinations of in-network
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`providers, including a mix of HCA and non-HCA providers, and/or (b) use incentives to steer
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`patients to less expensive or higher quality alternatives, are essential methods that health plans use
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`to promote competition among health care providers and thus control health care costs and
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`ultimately prices to health plans. By substantially foreclosing these avenues of promoting
`
`competition, HCA has maintained and bolstered its monopoly power in the Relevant Markets,
`
`causing anticompetitive effects including higher health care prices and lower quality health care.
`
`19.
`
`There are no legitimate procompetitive benefits for HCA’s Scheme let alone
`
`benefits that could offset the competitive harms caused by the Scheme.
`
`20.
`
`HCA itself has recognized the negative effects that unregulated hospital
`
`monopolies inflict on our nation’s health care system. Indeed, in 2018—while it was negotiating
`
`its takeover of Mission—HCA complained to the Florida Agency for Health Care Administration
`
`about a competitor’s “monopolistic dominance,” stating that “patients suffer from lack of access
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`to care in their community” and “have little to no health care provider choice,” and “[t]his type of
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`monopolistic environment within the health care market stifles innovation and breeds a culture
`
`that negatively impacts the cost and quality of care.”
`
`21.
`
`Defendants’ Scheme has had clear and continuing anticompetitive effects. It has
`
`enabled Defendants to raise prices substantially above competitive levels, to reduce health care
`
`choices, to reduce quality through dramatically worsened facility conditions and patient service,
`
`and to reduce patient access to GAC and Outpatient Services in the Relevant Markets. Relatedly,
`
`HCA has refused to comply with a federal rule implemented by the Department of Health and
`
`Human Services in January 2021 that was intended to increase transparency in health care pricing.3
`
`3 https://www.cms.gov/hospital-price-transparency/hospitals.
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`
`
`
`
`8
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`Were HCA to comply and reveal to consumers and regulators the true prices that it charges, the
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`public would know that HCA’s prices in the Relevant Markets are by far the highest in North
`
`Carolina.
`
`22.
`
`The Scheme has caused antitrust injury to Plaintiffs and the proposed Class of
`
`similarly situated health plans, each of whom has paid supracompetitive prices for lower quality
`
`services in the Relevant Markets.
`
`23. Without this Court’s intervention, the future of health care competition in Western
`
`North Carolina—traditionally a destination for many, including retirees from across the nation, in
`
`part because of its prior reputation for high-quality, low-cost health care—is at risk. Plaintiffs and
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`the proposed Class have been and continue to be injured by the artificially inflated
`
`supracompetitive prices due to Defendants’ Scheme and Plaintiffs bring this action for damages
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`and equitable relief to enjoin the continuation of HCA’s unlawful conduct.
`
`II.
`
`THE PARTIES
`
`A.
`
`Plaintiffs
`
`24.
`
`Plaintiff Buncombe County (“Buncombe”) is a county in Western North Carolina,
`
`with a population of 269,452 as of the 2020 Census. Out of 100 counties in North Carolina, it is
`
`the seventh largest county by population. Included within Buncombe are parts of the Blue Ridge
`
`Parkway, Pisgah National Forest, and Nantahala National Forest. Buncombe has had for over 30
`
`years, and continues to have, a self-funded health plan for its employees and their families. The
`
`plan covers 1,416 active Buncombe employees and over 3,700 people total, including employees’
`
`families and retirees. Buncombe has paid artificially inflated prices directly to one or more
`
`Defendants for GAC and Outpatient Services in the Asheville and Outlying Region markets due
`
`
`
`9
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`to Defendants’ unlawful conduct challenged herein. The Buncombe County Board of
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`Commissioners has duly authorized this lawsuit to be brought in Buncombe’s name.
`
`25.
`
`Plaintiff City of Asheville (“Asheville”) is a city in Buncombe County, North
`
`Carolina, with a population of 94,589 as of the 2020 Census. It is the county seat of Buncombe
`
`County. Asheville is the eleventh most populous city in North Carolina out of 532 incorporated
`
`municipalities. Asheville has had for over 10 years, and continues to have, a self-funded health
`
`plan for its employees and their families. The plan covers 1,122 active Asheville employees.
`
`Asheville has paid artificially inflated prices directly to one or more Defendants for GAC and
`
`Outpatient Services in the Asheville and Outlying Region markets due to Defendants’ unlawful
`
`conduct challenged herein. The Asheville City Council has duly authorized this lawsuit to be
`
`brought in Asheville’s name.
`
`B.
`
`Defendants
`
`26.
`
`Defendant HCA Healthcare, Inc. is a Delaware corporation with a principal place
`
`of business in Nashville, Tennessee. Its principal office address is One Park Plaza, Nashville TN
`
`37203, and its registered agent, The Corporation Trust Company, is located at Corporation Trust
`
`Center, 1209 Orange Street, Wilmington, Delaware 19801.
`
`27.
`
`Through its subsidiary, MH Master Holdings, LLLP, HCA Healthcare, Inc.
`
`purchased the assets of Mission in 2019.
`
`28.
`
`HCA Healthcare, Inc. is publicly held and listed with the Securities and Exchange
`
`Commission (“SEC”). HCA Healthcare, Inc. or its predecessors in interest have been named as
`
`respondents in prior antitrust proceedings brought by the FTC and/or the U.S. Department of
`
`Justice (“DOJ”), including with regard to hospital acquisitions and divestments of improper
`
`mergers.
`
`
`
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`29.
`
`HCA Healthcare, Inc. is a defendant in a class-action lawsuit filed in the Superior
`
`Court of North Carolina, Buncombe County, on August 10, 2021, brought by a proposed class of
`
`insured residents in Western North Carolina, alleging similar conduct to that alleged herein, and
`
`claiming artificially inflated out-of-pocket costs and health insurance premiums for GAC and
`
`outpatient services. See Davis, et al. v. HCA Healthcare, Inc., et al., No. 21-CV-03276 (N.C.
`
`Super. Ct.). The proposed Class of health plans here does not include class members from the
`
`Davis lawsuit.
`
`30.
`
`HCA Healthcare, Inc. is the world’s largest for-profit hospital chain. It owns and
`
`operates over 200 hospitals in 21 states. HCA’s revenues were over $51 billion for 2020.4 Its net
`
`income was over $3.7 billion in 2020.
`
`31.
`
`Defendant HCA Management Services, LP is a Delaware limited partnership with
`
`its principal place of business in Nashville, Tennessee. Its principal office address is One Park
`
`Plaza, Nashville TN 37203, and its North Carolina registered agent, CT Corporation System, is
`
`located at 160 Mine Lake Court, Suite 200, Raleigh, NC 27601.
`
`32.
`
`HCA Management Services, LP was formed in 1999. It applied for a certificate of
`
`authority to do business in North Carolina on December 28, 2005 and is currently registered to do
`
`business in North Carolina. It is listed on the HCA Healthcare website as the entity responsible for
`
`that website.5
`
`33.
`
`HCA Management Services, LP entered into a confidentiality and nondisclosure
`
`agreement with ANC Healthcare, Inc. f/k/a Mission Health System, Inc. on or about July 11, 2017.
`
`
`
`4 By comparison, according to the National Association of State Budget Officers, North Carolina’s
`total expenditures in fiscal year (FY) 2020 were $60.2 billion, including general funds, other state
`funds, bonds, and federal funds. HCA Healthcare is number 62 on the Fortune 500.
`
`5 https://hcahealthcare.com.
`
`
`
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`At that time, MH Master Holdings, LLLP which was only first organized on August 23, 2018, did
`
`not yet exist. Pursuant to negotiations conducted under that nondisclosure agreement, various
`
`Mission and HCA entities entered into an Asset Purchase Agreement (“APA”), dated August 2018,
`
`and an amended Asset Purchase Agreement (“Amended APA”), dated January 2019, facilitating
`
`the sale of relevant Mission system assets to HCA.
`
`34.
`
`Defendant HCA, Inc. is a Delaware corporation with its principal place of business
`
`in Nashville, Tennessee. Its principal office address is One Park Plaza, Nashville TN 37203.
`
`35.
`
`HCA, Inc. is the plan sponsor of a defined contribution plan established January 1,
`
`1983, which provides retirement benefits for all eligible employees of HCA, Inc. or its affiliates
`
`(and their families). It is the sponsor of the HCA 401(k) Plan, with employer identification number
`
`75-2497104, and a total number of participants of 387,421 as of 2019. On information and belief,
`
`HCA, Inc. is the plan sponsor of a retirement benefit plan for numerous employees associated with
`
`the North Carolina Division of HCA Healthcare, Inc. HCA, Inc. has been a respondent or
`
`defendant in prior proceedings challenging various aspects of HCA’s business practices.6
`
`36.
`
`Defendant MH Master Holdings, LLLP applied for a certificate of authority to do
`
`business in North Carolina on August 23, 2018. It filed its most recent annual report with the North
`
`Carolina Secretary of State, Department of Corporations, on or about April 6, 2021, describing
`
`itself as being engaged in the “healthcare related business.”
`
`37. MH Master Holdings, LLLP’s general partner is MH Hospital Manager LLC. MH
`
`Master Holdings, LLLP is a 99% limited partner in MH Mission Hospital, LLLP. Under the
`
`
`
`6
`e.g.,
`See,
`dated
`release,
`press
`DOJ
`U.S.
`(https://www.justice.gov/archive/opa/pr/2003/June/03_civ_386.htm).
`
`June
`
`26,
`
`2003.
`
`
`
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`Amended APA, MH Master Holdings, LLLP is authorized to do business under brand names
`
`including “Mission Health,” “Mission Health System,” and the “HCA” brand.
`
`38.
`
`The “corporate bio” used at the end of many HCA NC press releases, opens, under
`
`the header “ABOUT MISSION HEALTH,” by stating that “Mission Health [is] an operating
`
`division of HCA Healthcare [and] is based in Asheville, North Carolina….”
`
`39.
`
`Defendant MH Master Holdings, LLLP identifies itself as and holds itself out as
`
`being a part of the North Carolina Division of HCA Healthcare, Inc. See, e.g., job postings on
`
`websites like “Health Careers,” listing open positions at “HCA Healthcare—North Carolina
`
`Division.”
`
`40.
`
`HCA states in public website content that its “North Carolina Division,” also known
`
`as, “Mission Health,” is “based in Asheville, North Carolina.”
`
`41.
`
`Per HCA press releases, since February 2019, Greg Lowe has been “president of
`
`the newly created Asheville-based North Carolina Division, which comprises the recently
`
`purchased Mission Health system of six hospitals in western North Carolina.” Upon information
`
`and belief, Mr. Lowe resides in North Carolina.
`
`42.
`
`Defendant MH Hospital Manager, LLC is a Delaware limited liability company
`
`with a principal place of business in Tennessee or North Carolina. Its registered agent, c/o CT
`
`Corporation System, is located at 160 Mine Lake Court, Suite 200, Raleigh NC 27615, or, at its
`
`office at 509 Biltmore Avenue, Asheville, NC 28801, or c/o HCA Healthcare, One Park Plaza,
`
`Nashville, TN 37203.
`
`43.
`
`Defendant MH Hospital Manager, LLC applied for a certificate of authority to do
`
`business in North Carolina on August 22, 2018. Its annual report dated April 6, 2021, describes
`
`the nature of its business as “healthcare related business.”
`
`
`
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`44.
`
`Defendant MH Hospital Manager uses the assumed business name, “North
`
`Carolina Division,” pursuant to an assumed name certificate dated April 22, 2019, filed with the
`
`Buncombe County Register of Deeds. It described the counties where the assumed business name
`
`will be used to engage in business as “All 100 North Carolina counties.”
`
`45.
`
`Defendant MH Mission Hospital, LLLP is a Delaware limited liability limited
`
`partnership, with a principal place of business in North Carolina. Its registered agent’s office
`
`address, c/o CT Corporation System, is 160 Mine Lake Court, Suite 200, Raleigh, NC 27615, and
`
`its principal office is located at 509 Biltmore Avenue, Asheville, NC 28801.
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`46.
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`Effective July 2019, Chad Patrick became the Chief Executive Officer of what
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`HCA describes as “HCA Healthcare’s North Carolina Division’s flagship 763-bed Mission
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`Hospital” and has resided in Asheville since Summer 2019. On information and belief, the HCA
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`corporate entity employing Mr. Patrick is MH Mission Hospital, LLLP.
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`47.
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`Defendant ANC Healthcare, Inc. f/k/a Mission Health System, Inc. is a North
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`Carolina nonprofit corporation which had its principal place of business in Asheville, North
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`Carolina through 2019. It remains an active corporation incorporated under North Carolina law.
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`In or about February 2019, its principal office was moved to Florida. Its registered agent,
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`Corporation Service Company, is located at 2626 Glenwood Avenue, Suite 550, Raleigh, NC
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`27608. Its current office address is 425 West New England Avenue, Suite 300, Winter Park, FL
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`32789.
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`48.
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`ANC Healthcare, Inc. f/k/a Mission Health System, Inc. was incorporated in 1981
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`as a North Carolina nonprofit corporation. As of the date of the filing of this lawsuit, it remains a
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`nonprofit corporation incorporated under North Carolina law. See Articles of Restatement for
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`
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`Nonprofit Corporation filed February 1, 2019. The corporation is not defunct, nor has it been
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`dissolved and in its most recent Articles of Restatement it describes its duration as “unlimited.”
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`49.
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`As of 2015, ANC Healthcare, Inc. described itself as an “integrated healthcare
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`system,” which provided “medical care, hospital care” and “the delivery of health care services to
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`persons resident in Western North Carolina and surrounding areas.”
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`50.
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`During the period commencing in or about 2010 and continuing through and
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`including January 2019, Ronald Paulus (“Paulus”) was the President and Chief Executive Officer
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`of ANC Healthcare, Inc. f/k/a Mission Health System, Inc.
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`51.
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`Defendant Mission Hospital, Inc. is a North Carolina nonprofit corporation, which
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`had its principal place of business in Asheville, North Carolina for many years through 2019. It
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`remains an active nonprofit corporation incorporated under North Carolina law. In or about
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`February 2019, its principal office was moved to Florida. Its registered agent, Corporation Service
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`Company, is located at 2626 Glenwood Avenue, Suite 550, Raleigh, NC 27608. Its current office
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`address is 425 West New England Avenue, Suite 300, Winter Park, FL 32789.
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`52.
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`Defendant Mission Hospital, Inc. was incorporated in 1951 as a North Carolina
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`nonprofit corporation. As of the date of the filing of this lawsuit, it remains a nonprofit corporation
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`incorporated under North Carolina law. See Articles of Restatement for Nonprofit Corporation
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`filed February 1, 2019. The corporation is not defunct, nor has it been dissolved and in its most
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`recent Articles of Restatement it describes its duration as “unlimited.”
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`53.
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`Defendants ANC Healthcare, Inc. f/k/a Mission Health System, Inc. and Mission
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`Hospital, Inc. are each identified as sellers under the Amended APA. See Amended APA, p. 1.
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`Under the Amended APA’s terms, ANC Healthcare, Inc. f/k/a Mission Health System, Inc. and
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`Mission Hospital, Inc. remain liable for pre-asset sale ownership or operations of the hospital
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`
`
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`business. See Amended APA, § 2.4 (in which the HCA entities who function as the buyers under
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`the Amended APA purported to exclude from their liability “any Liabilities related to the
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`ownership or operation of the Business or the Purchased Assets prior to the Effective Time”).
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`54.
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`Under the Amended APA, the sellers represented and warranted that they “have
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`operated, and are operating, the Business… and their properties in compliance in all material
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`respects with all applicable Laws,” up through the sale date. Amended APA, § 4.11(a)(i).
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`However, they did not comply with numerous such laws, as alleged herein.
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`III.
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`JURISDICTION AND VENUE
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`55.
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`This Court has jurisdiction over this action under Sections 1 and 2 of the Sherman
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`Act, 15 U.S.C. §§ 1 & 2; Sections 4 and 16 of the Clayton Act, 15 U.S.C. §§ 15c & 26; and under
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`28 U.S.C. §§ 1331 and 1337.
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`56.
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`This Court has personal jurisdiction over Defendants because they are domiciled
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`and/or registered to transact business in North Carolina, and they have transacted business in North
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`Carolina relevant to this antitrust action.
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`57.
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`Venue is proper in this District under Section 12 of the Clayton Act, 15 U.S.C. §
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`22, and 28 U.S.C. § 1391. Defendants conduct substantial business in this district and their conduct
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`both gives rise to Plaintiffs’ claims occurring in this district and also affected interstate commerce.
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`IV.
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`RELEVANT HISTORICAL BACKGROUND
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`A. Mission Acquired Monopoly Power Under the COPA
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`58. Mission Hospital was originally formed over a century ago as a local Asheville
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`charitable institution. When founded in the 1880s, the Dogwood Mission, also known as the
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`Flower Mission, provided charity care to Asheville’s sick and poor.
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`
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`59.
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`After World War II, Mission Hospital joined with other Buncombe County
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`hospitals to become a major medical center in Western North Carolina. In 1951, Mission Hospital
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`was incorporated as a nonprofit. Although it was a nonprofit, it was not under the patronage or the
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`control of the State of North Carolina, nor was it a local health authority.
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`60.
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`As of the early 1990s, the only two private acute care hospitals in Asheville were
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`Mission Hospital-Asheville and St. Joseph’s Hospital. Mission had 381 beds. St. Joseph’s Hospital
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`had 285 beds. The two hospitals sought to partner and lobbied the General Assembly to enact an
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`initial version of the COPA law to facilitate a partnership in 1993.7
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`61.
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`The two hospitals claimed that their plans did not call for a merger and that each
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`hospital would maintain its distinct co