FOR PUBLICATION
`
`UNITED STATES COURT OF APPEALS
`FOR THE NINTH CIRCUIT
`
`
`AYA HEALTHCARE SERVICES, INC.;
`AYA HEALTHCARE, INC.,
`Plaintiffs-Appellants,
`
` No. 20-55679
`
`D.C. No.
`3:17-cv-00205-
`MMA-MDD
`
`
`OPINION
`
`
`
`v.
`
`
`AMN HEALTHCARE, INC.; AMN
`HEALTHCARE SERVICES, INC.; AMN
`SERVICES, LLC; MEDEFIS, INC.;
`SHIFTWISE, INC.,
`Defendants-Appellees.
`
`Appeal from the United States District Court
`for the Southern District of California
`Michael M. Anello, District Judge, Presiding
`
`Argued and Submitted July 26, 2021
`Pasadena, California
`
`Filed August 19, 2021
`
`
`
`
`
`
`UNITED STATES COURT OF APPEALS
`FOR THE NINTH CIRCUIT
`
`
`AYA HEALTHCARE SERVICES, INC.;
`AYA HEALTHCARE, INC.,
`Plaintiffs-Appellants,
`
` No. 20-55679
`
`D.C. No.
`3:17-cv-00205-
`MMA-MDD
`
`
`OPINION
`
`
`
`v.
`
`
`AMN HEALTHCARE, INC.; AMN
`HEALTHCARE SERVICES, INC.; AMN
`SERVICES, LLC; MEDEFIS, INC.;
`SHIFTWISE, INC.,
`Defendants-Appellees.
`
`Appeal from the United States District Court
`for the Southern District of California
`Michael M. Anello, District Judge, Presiding
`
`Argued and Submitted July 26, 2021
`Pasadena, California
`
`Filed August 19, 2021
`
`
`
`
`
`
`2 AYA HEALTHCARE SERVICES V. AMN HEALTHCARE
`
`
`Before: MILAN D. SMITH, JR. and JOHN B. OWENS,
`Circuit Judges, and EDUARDO C. ROBRENO,*
`District Judge.
`
`Opinion by Judge Milan D. Smith, Jr.
`
`
`SUMMARY**
`
`Antitrust
`
`
`
`
`The panel affirmed the district court’s summary
`
`judgment in favor of AMN Healthcare, Inc., in Aya
`Healthcare Services, Inc.’s antitrust action involving the
`non-solicitation provision within AMN’s contract with Aya
`to provide travel nursing services to hospitals and other
`healthcare facilities.
`
` Both parties are healthcare staffing agencies that place
`travel nurses on temporary assignments. To receive
`spillover assignments, Aya contracted with AMN. The
`contract included a provision prohibiting Aya from soliciting
`AMN’s employees.
`
` Aya alleged that the non-solicitation provision is an
`unreasonable restraint prohibited by Section 1 of the
`Sherman Act. The panel held that the non-solicitation
`agreement is an ancillary—rather than a naked—restraint
`
`* The Honorable Eduardo C. Robreno, United States District Judge
`for the Eastern District of Pennsylvania, sitting by designation.
`
`** This summary constitutes no part of the opinion of the court. It
`has been prepared by court staff for the convenience of the reader.
`
`
`
` AYA HEALTHCARE SERVICES V. AMN HEALTHCARE 3
`
`because it is reasonably necessary to the parties’ pro-
`competitive collaboration. Accordingly, the restraint is not
`per se unlawful, but is subject to the rule-of-reason standard.
`
`The panel held that Aya failed to satisfy its initial burden
`
`under the rule-of-reason standard because it did not
`demonstrate through direct or indirect evidence that a triable
`issue of fact exists with respect to whether AMN’s non-
`solicitation agreement has a substantial anticompetitive
`effect that harms consumers in the relevant market.
`
`The panel held that Aya’s claim for retaliatory damages
`
`fails because it did not present any evidence of a cartel or a
`concerted action in the termination of its agreement with
`AMN.
`
`
`
`COUNSEL
`
`
`William A. Markham (argued), Dorn G. Bishop, and Jason
`Eliaser, Law Offices of William Markham P.C., San Diego,
`California, for Plaintiffs-Appellants.
`
`David H. Bamberger (argued), DLA Piper LLP (US),
`Washington, D.C.; Noah A. Katsell, DLA Piper LLP (US),
`San Diego, California; for Defendants-Appellees.
`
`Mary Helen Wimberly (argued) and Daniel E. Haar,
`Attorneys; Elyse Dorsey, Counsel to the Assistant Attorney
`General; Michael F. Murray, Deputy Assistant Attorney
`General; Makan Delrahim, Assistant Attorney General;
`Antitrust Division, United States Department of Justice,
`Washington, D.C.; for Amicus Curiae United States of
`America.
`
`
`
`
`4 AYA HEALTHCARE SERVICES V. AMN HEALTHCARE
`
`
`OPINION
`
`M. SMITH, Circuit Judge:
`
`In 2010, Appellee AMN Healthcare, Inc. (AMN)
`contracted with Appellant Aya Healthcare Services, Inc.
`(Aya) to provide travel nursing services to hospitals and
`other healthcare facilities. This case involves the non-
`solicitation provision within that contract. We conclude that
`this provision is both ancillary to the parties’ broader
`agreement to collaborate, and a reasonable, pro-competitive
`restraint. We therefore affirm the judgment of the district
`court granting summary judgment to AMN.
`
`FACTUAL AND PROCEDURAL BACKGROUND
`
`Both parties are healthcare staffing agencies that “place
`travel nurses on
`temporary assignments.”
` Aya
`the
`Healthcare Servs., Inc. v. AMN Healthcare, Inc., —F.
`Supp. 3d —, 2020 WL 2553181, at *1 (S.D. Cal. May 20,
`2020). “Travel nurses are nurses and nurse technicians who
`perform
`temporary, medium-term
`assignments
`in
`understaffed hospitals and other healthcare facilities [ ] that
`cannot have the assignments performed by their own
`nurses.” Id. “[A]gencies place the travel nurses at hospitals
`several ways: by directly placing the travel nurses at the
`agencies’ hospital accounts and by indirectly placing the
`travel nurses at hospitals through either an agency that
`manages the hospitals’ travel nurse needs (managed service
`provider or MSP) or electronic platforms that facilitate the
`placements.” Id.
`
`“AMN has been a leader in the healthcare staffing
`industry for over thirty years.” Id. at *2. In 2009, AMN
`became “the MSP of an increasing number of hospitals,” “in
`addition to providing travel nurses to hospitals on direct
`
`
`
` AYA HEALTHCARE SERVICES V. AMN HEALTHCARE 5
`
`placements.” Id. That same year, Alan Braynin founded
`Aya, which places “nurses directly in hospitals” and
`“indirectly through MSP programs, such as those of AMN.”
`Id.
`
`As AMN grew, it became unable to “fulfill the demand
`of its hospital customers for travel nurse assignments.” Id.
`AMN began referring “these ‘spillover assignments’ to its
`network of subcontractors, or ‘associate vendors’ (AVs),
`which were other healthcare staffing agencies,” including
`Aya. Id. To receive such spillover assignments, Aya
`contracted with AMN. Included in that contract was a
`provision prohibiting Aya
`from
`soliciting AMN’s
`employees.1 Aya signed its first AV agreement in 2010 and
`began “provid[ing] travel nurses to AMN’s customers.” Id.
`Aya eventually “became AMN’s largest AV.” Id.
`
`“Around May 2015, Aya began actively soliciting
`AMN’s travel nurse recruiters.” Id. This caused “the
`parties’ business relationship [to] sour[],” and in September
`2015, “AMN temporarily terminated Aya’s access to
`AMN’s platform.” Id. The parties ultimately ended their
`relationship, permanently
`terminating
`their prior AV
`agreements in December 2015.
`
`Aya filed its first amended complaint against AMN in
`February 2017, alleging four claims pursuant to Sections 1
`and 2 of the Sherman Antitrust Act, 15 U.S.C. §§ 1, 2, and
`three California state law claims. The district court granted
`AMN’s motion to dismiss without prejudice, holding that
`Aya did not sufficiently allege that it had suffered antitrust
`
`1 The provision remains under seal and, therefore, its text will not
`be included here. We will refer to this provision as the parties’ “non-
`solicitation agreement.”
`
`
`
`6 AYA HEALTHCARE SERVICES V. AMN HEALTHCARE
`
`injuries, and deferred ruling on Aya’s state law claims. Aya
`then filed a second amended complaint, again alleging three
`California state law claims and realleging three federal
`antitrust claims: a ‘per se’ claim and a quick-look/rule-of-
`reason claim pursuant to Section 1 of the Sherman Act, and
`a claim for attempted monopolization pursuant to Section 2
`of the Sherman Act. The district court granted in part and
`denied in part AMN’s motion to dismiss the amended
`complaint, dismissing Aya’s tortious interference claim with
`leave to amend, and allowing Aya’s federal claims and other
`state law claims to proceed. Aya then amended its complaint
`for a third time, realleging its tortious interference claim and
`adding a Section 2 claim for monopolization. Aya claimed
`that “it suffered ‘exclusionary damages’ as a result of
`AMN’s non-solicitation covenant in the parties’ AV
`agreements and ‘retaliatory damages’ as a result of AMN’s
`decision to terminate its AV relationship with Aya.” Aya
`Healthcare, 2020 WL 2553181, at *3.
`
`Discovery commenced. Aya offered expert economics
`testimony from Dr. Dov Rothman. Dr. Rothman attributed
`Aya’s exclusionary damages
`to
`the non-solicitation
`provision in its AV agreement with AMN during a limited
`time period, between February 2013 and mid-2015.
`Dr. Rothman quantified Aya’s retaliatory damages as its lost
`profits resulting from the termination of the parties’ AV
`agreement in 2015.
`
`AMN then moved for summary judgment. In May 2020,
`the district court granted the motion as to Aya’s claims for
`retaliatory damages pursuant to Sections 1 and 2 of the
`Sherman Act. The court determined that there was “no
`evidence of a cartel of healthcare staffing agencies that all
`agreed to refrain from soliciting or hiring each other’s
`employees or to retaliate against Aya for reneging on such
`
`
`
` AYA HEALTHCARE SERVICES V. AMN HEALTHCARE 7
`
`an agreement.” Id. at *18. The court further held that “Aya
`[ ] failed to proffer evidence that AMN ha[d] sufficient
`market power in the various markets identified for Aya’s
`Section 2 claims, or that AMN’s conduct ha[d] harmed
`competition.” Id. The district court ordered the parties to
`submit supplemental briefing on whether it should grant
`AMN’s motion for summary judgment as to Aya’s claims
`for exclusionary damages.
`
`In June 2020, after considering the supplemental
`briefing, the district court granted AMN’s motion for
`summary judgment on Aya’s claims for exclusionary
`damages, and declined to exercise supplemental jurisdiction
`over Aya’s state law claims. The district court concluded
`that “Aya fail[ed] to raise a genuine issue of material fact
`regarding whether AMN has market power.” In both orders
`granting summary judgment, the district court found Dr.
`Rothman’s work deficient and his studies unreliable.
`
`On appeal, Aya first requests that we recognize a per se
`rule against naked no-poaching restraints pursuant to Section
`1 of the Sherman Act. Aya asserts that its evidence raises a
`triable dispute as to whether AMN’s non-solicitation
`provision constitutes a naked no-poaching restraint. Aya
`then argues that its evidence establishes a triable dispute as
`to whether AMN’s non-solicitation provision violates
`Section 1 under the quick-look standard and the rule-of-
`reason standard.2 Aya contends that it is entitled to
`retaliatory damages under the Hammes doctrine because
`AMN effectively ‘cartelized’ the labor market and retaliated
`against Aya. Finally, Aya argues that it should have been
`
`2 Aya’s Section 2 claims are not on appeal.
`
`
`
`
`
`8 AYA HEALTHCARE SERVICES V. AMN HEALTHCARE
`
`allowed to introduce further evidence on new issues that the
`district court examined sua sponte.
`
`In response, AMN argues that the district court correctly
`held that AMN was entitled to summary judgment on Aya’s
`claims for exclusionary damages. AMN asserts that the
`relevant non-solicitation provision is not of the type that has
`been found per se unlawful. As such, the district court
`properly applied the rule-of-reason standard, and determined
`that the restriction was ancillary to a pro-competitive
`collaboration. AMN further argues that Aya failed to show
`a triable issue of fact as to whether the relevant provision
`harmed competition.
`
`The United States has also weighed in on the matter,
`filing an amicus brief “to explain its views on the law
`applicable
`to non-solicitation
`agreements between
`competing employers.” It takes no position concerning the
`appropriate disposition of this case.
`
`STANDARD OF REVIEW
`
`We review de novo a district court’s decision to grant
`summary judgment. Lopez v. Smith, 203 F.3d 1122, 1131
`(9th Cir. 2000) (en banc). We “must determine whether,
`viewing the evidence in the light most favorable to the
`nonmoving party, there are any genuine issues of material
`fact and whether the district court correctly applied the
`relevant substantive law.” Id.
`
`ANALYSIS
`
`A.
`
`Section 1 of the Sherman Act bars “[e]very contract,
`combination in the form of trust or otherwise, or conspiracy,
`
`
`
` AYA HEALTHCARE SERVICES V. AMN HEALTHCARE 9
`
`in restraint of trade or commerce among the several States.”
`15 U.S.C. § 1. The Supreme Court has interpreted this text
`“to outlaw only unreasonable restraints.” State Oil v. Khan,
`522 U.S. 3, 10 (1997); see also United States v. Joyce, 895
`F.3d 673, 676 (9th Cir. 2018).
`
`Restraints are generally categorized as horizontal or
`vertical. A horizontal restraint is “an agreement among
`competitors on the way in which they will compete with one
`another.” NCAA v. Bd. of Regents, 468 U.S. 85, 99 (1984).
`Vertical restraints are “restraints ‘imposed by agreement
`between firms at different levels of distribution.’” Ohio v.
`Am. Express Co., 138 S. Ct. 2274, 2284 (2018) (quoting Bus.
`Elecs. Corp. v. Sharp Elecs. Corp., 485 U.S. 717, 730
`(1988)).
`
`We employ two different standards to determine whether
`a particular restraint is unreasonable. Id. at 2283. The first
`standard “involves a factual inquiry commonly known as the
`‘rule of reason.’” Joyce, 895 F.3d at 676 (quoting Metro
`Indus., Inc. v. Sammi Corp., 82 F.3d 839, 843 (9th Cir.
`1996)). “The rule of reason weighs legitimate justifications
`for a restraint against any anticompetitive effects.” Paladin
`Assocs., Inc. v. Mont. Power Co., 328 F.3d 1145, 1156 (9th
`Cir. 2003). “[N]early every [ ] vertical restraint” is “assessed
`under the rule of reason.” Am. Express, 138 S. Ct. at 2284.
`We “conduct a
`fact-specific assessment,”
`id.,
`to
`“distinguish[] between restraints with anticompetitive effect
`that are harmful to the consumer and restraints stimulating
`competition that are in the consumer’s best interest,” Leegin
`Creative Leather Prods., Inc. v. PSKS, Inc., 551 U.S. 877,
`886 (2007).
`
`The second standard is the per se standard, which
`recognizes
`that “[a] small group of
`restraints are
`unreasonable per se because they always or almost always
`
`
`
`10 AYA HEALTHCARE SERVICES V. AMN HEALTHCARE
`
`tend to restrict competition and decrease output.” Am.
`Express, 138 S. Ct. at 2283 (citation and internal quotation
`marks omitted).
` “Such agreements or practices are
`‘conclusively presumed to be unreasonable’ because of their
`‘pernicious effect on competition and lack of any redeeming
`virtue.’” Joyce, 895 F.3d at 676 (quoting N. Pac. Ry. Co. v.
`United States, 356 U.S. 1, 5 (1958)). “Typically only
`‘horizontal’ restraints . . . qualify as unreasonable per se.”
`Am. Express, 138 S. Ct. at 2283–84.
`
`However, not all horizontal restraints are analyzed
`pursuant to the per se standard. Under the “ancillary
`restraints” doctrine, a horizontal agreement is “exempt from
`the per se rule,” and analyzed under the rule-of-reason, if it
`meets two requirements. Rothery Storage & Van Co. v.
`Atlas Van Lines, Inc., 792 F.2d 210, 224 (D.C. Cir. 1986);
`see also L.A. Mem’l Coliseum Comm’n v. Nat’l Football
`League, 726 F.2d 1381, 1395 (9th Cir. 1984) (noting that
`“[t]he common-law ancillary restraint doctrine was, in
`effect, incorporated into Sherman Act section 1”). These
`requirements are that the restraint must be (1) “subordinate
`and collateral to a separate, legitimate transaction,” Rothery
`Storage, 792 F.2d at 224, and (2) “reasonably necessary” to
`achieving that transaction’s pro-competitive purpose, United
`States v. Addyston Pipe & Steel Co., 85 F. 271, 281 (6th Cir.
`1898), aff’d, 175 U.S. 211 (1899); see also L.A. Mem’l,
`726 F.2d at 1395 (“[T]he doctrine teaches that some
`agreements which restrain competition may be valid if they
`are ‘subordinate and collateral to another legitimate
`transaction and necessary
`to make
`that
`transaction
`effective.’” (citation omitted)).
`
`“Naked restraints” are categorically not “ancillary
`restraints.” Rothery Storage, 792 F.2d at 224 n.10. Thus,
`naked horizontal restraints are always analyzed under the per
`
`
`
` AYA HEALTHCARE SERVICES V. AMN HEALTHCARE 11
`
`se standard. A restraint is naked if it has “no purpose except
`stifling of competition.” White Motor Co. v. United States,
`372 U.S. 253, 263 (1963). Some examples of these restraints
`include agreements among actual or potential competitors to
`fix prices, e.g., Catalano, Inc. v. Target Sales, Inc., 446 U.S.
`643, 647 (1980) (per curiam); rig bids, e.g., Joyce, 895 F.3d
`at 677; or divide markets, e.g., Palmer v. BRG of Ga., Inc.,
`498 U.S. 46, 49–50 (1990) (per curiam).
`
`B.
`
`It is undisputed that the parties’ non-solicitation
`agreement constitutes a horizontal restraint. As the United
`States notes, although the parties were “in a subcontractor-
`subcontractee relationship,” the agreement “restricts AMN’s
`actual or potential employer-rival, Aya, from competing
`with AMN for its employees by soliciting them to work for
`Aya.”
`
`Accordingly, the threshold question on appeal is whether
`the restraint in this case is naked or ancillary, and in turn,
`whether it is per se unlawful or subject to the rule-of-reason,
`respectively. The district court concluded that the non-
`solicitation agreement was an ancillary restraint because
`Aya admitted in its declarations that the agreement was “part
`of a collaboration agreement to fulfill the demand of
`hospitals for travel nurses,” which constitutes a pro-
`competitive purpose.3 Aya Healthcare, 2020 WL 2553181,
`
`
`3 The district court questioned whether the restraint was a no-
`poaching agreement or a non-solicitation agreement and concluded that
`it was a non-solicitation agreement. The United States argues that this
`distinction is not determinative, and we agree. The relevant distinction
`is whether the restraint is an ancillary restraint or a naked restraint, not
`whether it is classified as a no-poaching agreement or non-solicitation
`agreement. See Texaco Inc. v. Dagher, 547 U.S. 1, 7 (2006).
`
`
`
`12 AYA HEALTHCARE SERVICES V. AMN HEALTHCARE
`
`at *12. On appeal, Aya contends that its evidence
`established a triable dispute as to whether the non-
`solicitation agreement is a naked horizontal restraint because
`the provision is not necessary to the parties’ broader
`agreement and is permanent, meaning it outlives the parties’
`collaboration. Aya does not challenge the district court’s
`conclusion that the non-solicitation agreement is subordinate
`and collateral to its legitimate business collaboration with
`AMN.
`
`We agree with the district court that the challenged
`restraint is reasonably necessary to the parties’ pro-
`competitive collaboration. The purpose of the parties’
`contract was to supply hospitals with traveling nurses. The
`non-solicitation agreement is necessary to achieving that end
`because it ensures that AMN will not lose its personnel
`during the collaboration. As the district court noted, AMN
`may want to “guard[] its investments and establish[] AV
`relationships with only those agencies that agree, inter alia,
`not to abuse the relationship by proactively raiding AMN’s
`employees, AVs, and customers.” Id. at *14. Without the
`restraint, AMN “would likely be less willing or unwilling to
`deal with other agencies to supply travel nurses to hospitals
`which, as Aya also recognize[d], already experience a
`‘chronic shortage of nurses.’” Id. And with the restraint,
`AMN may collaborate with its competitor for the benefit of
`its client without “cutting [its] own throat.” Polk Bros., Inc.
`v. Forest City Enters., Inc., 776 F.2d 185, 189 (7th Cir.
`1985). The non-solicitation agreement, therefore, promotes
`“competitiveness in the healthcare staffing industry”—more
`hospitals receive more traveling nurses because the non-
`solicitation agreement allows AMN to give spillover
`assignments to Aya without endangering its “establish[ed]
`network[] [of] recruiters, travel nurses, AVs, and of course,
`hospital customers.” Aya Healthcare, 2020 WL 2553181,
`
`
`
` AYA HEALTHCARE SERVICES V. AMN HEALTHCARE 13
`
`at *14. Accordingly, the restraint qualifies as an ancillary
`restraint, which triggers a rule-of-reason analysis.4 See Polk,
`776 F.2d at 189 (“A restraint is ancillary when it may
`contribute to the success of a cooperative venture that
`promises greater productivity and output.”); see also
`Addyston Pipe, 85 F. at 289.
`
`Aya’s best argument to the contrary is that the unlimited
`duration of AMN’s non-solicitation agreement renders it a
`naked restraint. Aya cites Blackburn v. Sweeney, 53 F.3d
`825 (7th Cir. 1995), in support of this theory. In that case,
`the Seventh Circuit held that an agreement between
`competitors to not advertise in each other’s territory was per
`se unlawful. Blackburn, 53 F.3d at 828–29. The court
`rejected the defendant’s argument that the advertising
`agreement was ancillary to the parties’ broader agreement to
`dissolve its partnership because “it was not necessary for the
`dissolution of the partnership” and—most importantly for
`Aya’s argument—the agreement was “infinite
`[in]
`duration.” Id. at 828. In holding that the duration of the
`agreement was a fatal flaw, the court relied primarily on
`Polk. Id. “Polk teaches that courts must look to the time an
`agreement was adopted in assessing its potential for
`promoting enterprise and productivity.” Id. Because the
`agreement in Blackburn was made after the parties’ joint
`venture concluded—and thus had no pro-competitive
`
`
`4 A large portion of Aya’s opening brief argues that the district court
`erred in declining to recognize a per se prohibition of naked “no-
`poaching restraints.” The United States agrees that the per se rule applies
`to naked non-solicitation agreements because it is “a form of labor-
`market allocation that, when not an ancillary restraint, [ ] is per se
`illegal.” Although the Government’s arguments have considerable
`merit, we decline to decide this issue given our conclusion that the
`challenged restraint is ancillary, and thus subject to the rule-of-reason.
`
`
`
`14 AYA HEALTHCARE SERVICES V. AMN HEALTHCARE
`
`effects—the agreement was a naked restraint and per se
`unlawful. See id. at 829.
`
`AMN’s non-solicitation agreement more closely
`resembles the restraint in Polk than the restraint in
`Blackburn. Like Polk, this case involves a restraint that was
`entered into at the same time the parties agreed to collaborate
`on a joint venture. 776 F.2d at 189. And, because the
`restraint “promoted enterprise and productivity at the time it
`was adopted,” the restraint is properly characterized as
`ancillary, not naked. Id. Whether “there is nothing left but
`[the] restraint” after the joint venture ends “is the wrong
`focus.” Id. Aya’s argument concerning the duration of the
`non-solicitation agreement is therefore not compelling.
`
`Furthermore, and contrary to the United States’ amicus
`brief, AMN need not satisfy a less-restrictive-means test to
`demonstrate that the non-solicitation agreement is an
`ancillary restraint. Our opinion in Los Angeles Memorial
`Coliseum Commission makes clear that the less restrictive
`alternative analysis falls within the rule-of-reason analysis,
`not the ancillary restraint consideration. See 726 F.2d
`at 1395. Interestingly, the United States does not dispute this
`interpretation. Instead, the United States requests that we
`“clarify” that a district court “must engage in a distinct
`reasonable-necessity analysis” that includes a less restrictive
`means consideration.5 The United States does not cite any
`
`5 At oral argument, the United States presented a different theory:
`Appellees must demonstrate that the restraint is “a reasonably tailored
`means of achieving the goal.” Freeman v. San Diego Ass’n of Realtors,
`322 F.3d 1133, 1151 (9th Cir. 2003). We are not convinced that
`“reasonably tailored” carries a materially different meaning than
`“reasonably necessary.” In any event, the parties’ non-solicitation
`agreement is both reasonably necessary to, and a reasonably tailored
`means of achieving, pro-competitive collaboration.
`
`
`
` AYA HEALTHCARE SERVICES V. AMN HEALTHCARE 15
`
`case law in support of this argument. Furthermore, its
`proposition conflicts with the Supreme Court’s “reluctance
`to adopt per se rules” in cases “where the economic impact”
`of the restraints “is not immediately obvious.” Leegin,
`551 U.S. at 887 (emphasis added) (citation omitted); see also
`Cont’l T.V., Inc. v. GTE Sylvania Inc., 433 U.S. 36, 58–59
`(1977) (“[D]eparture from the rule-of-reason standard must
`be based upon demonstrable economic effect rather than . . .
`upon formalistic line drawing.”). We thus decline the United
`States’ request to create new law within the ancillary
`restraint doctrine.
`
`C.
`
`Given that the restraint is ancillary to the parties’ broader
`agreement, the district court correctly subjected it to the rule-
`of-reason standard. To determine whether a restraint
`violates the rule-of-reason, we apply a three-step, burden-
`shifting framework. Am. Express, 138 S. Ct. at 2284. First,
`
`the plaintiff has the initial burden to prove
`that the challenged restraint has a substantial
`anticompetitive effect that harms consumers
`in the relevant market. If the plaintiff carries
`its burden, then the burden shifts to the
`defendant to show a procompetitive rationale
`for the restraint. If the defendant makes this
`showing, then the burden shifts back to the
`plaintiff
`to
`demonstrate
`that
`the
`procompetitive
`efficiencies
`could
`be
`reasonably
`achieved
`through
`less
`anticompetitive means.
`
`Id. (internal citations committed). Here, the district court
`concluded that Aya failed to satisfy its initial burden: it did
`not demonstrate that “a triable issue of fact exists with
`
`
`
`16 AYA HEALTHCARE SERVICES V. AMN HEALTHCARE
`
`respect to harm to competition.” We agree with the district
`court’s conclusion that Aya has not carried its burden at step
`one.
`
`There are two ways a plaintiff may prove that the
`relevant restraint has a substantial anticompetitive effect that
`harms consumers. First, the plaintiff may provide the court
`with “[d]irect evidence of anticompetitive effects,” which
`would include “proof of actual detrimental effects [on
`competition], such as reduced output, increased prices, or
`decreased quality in the relevant market.” Id. (alteration in
`original) (internal quotation marks and citations omitted).
`Second, the plaintiff may provide “[i]ndirect evidence,”
`which “would be proof of market power plus some evidence
`that the challenged restraint harms competition.” Id.
`
`Aya’s direct evidence of harm to competition was a
`claim of supracompetitive pricing in certain regional
`markets. Relying on a study performed by its expert
`economist, Dr. Dov Rothman, Aya argued that there were
`increased prices for travel nurse services in markets in which
`AMN makes at least 30% of overall sales, compared to
`prices in markets in which AMN’s overall share of sales was
`less than 15%. The district court rejected this argument for
`two reasons. First, “Aya fail[ed] to proffer any evidence to
`support its assertion that higher prices in certain markets
`[were] attributable to the challenged provisions.” Aya’s
`reliance on Dr. Rothman’s report did nothing to help its
`argument because he also failed to support this assertion
`with any economic analysis. Second, Aya’s direct evidence
`was “deficient because Dr. Rothman’s study allegedly
`showing supracompetitive prices [was] seriously flawed.”
`The court found that “Dr. Rothman’s market share
`calculations capture[d] AMN’s direct placements even
`though
`[those placements] do not
`involve AMN
`
`
`
` AYA HEALTHCARE SERVICES V. AMN HEALTHCARE 17
`
`collaborating with and imposing non-solicitation covenants
`on AVs,” like Aya. The study, therefore, was “unreliable
`and of marginal relevance.” Aya presented no evidence
`“from which a reasonable juror could conclude that prices in
`certain markets are supracompetitive or that rival agencies
`are otherwise prevented from undercutting AMN on price.”
`
`Aya does not directly challenge this holding on appeal.
`Aya’s brief merely reiterates that “prevailing prices for
`travel-nurse services have been supracompetitive in the
`markets . . . where AMN controls a substantial part of the
`overall workflow” and “the likely or only possible
`explanation for supracompetitive prices
`. . . [is]
`the
`persistent effect of AMN’s Trade Restraints.” This
`conclusory argument does not address the district court’s
`findings. Like it did in the district court, Aya fails to connect
`the prevailing prices to the challenged non-solicitation
`agreement and ignores the flaws in Dr. Rothman’s study.
`Accordingly, we affirm the district court’s conclusion that
`Aya did not proffer direct evidence of harm to competition.
`
`Regarding indirect evidence, the district court found that
`Aya failed to make the requisite showing of “market power
`plus . . . harm[] [to] competition.” Am. Express, 138 S. Ct.
`at 2284. “Market power is the ability to raise prices above
`those that would be charged in a competitive market.”
`NCAA, 468 U.S. at 109 n.38. In determining whether a
`company has market power, we must first define the relevant
`market. See Rebel Oil Co. v. Atl. Richfield Co., 51 F.3d
`1421, 1434 (9th Cir. 1995). As the district court noted, Aya
`“define[d] the relevant markets” as the “[r]egional service
`markets for the sale of travel nurses to hospitals,” the
`“[r]egional labor markets for the labor of travel nurses,” and
`the “national labor market for the labor of travel-nurse
`recruiters.” Aya then argued that AMN has market power in
`
`
`
`18 AYA HEALTHCARE SERVICES V. AMN HEALTHCARE
`
`those markets because AMN “wields extraordinary control
`over the available workflow and plum assignments.” The
`district court found this argument unconvincing, and we
`agree. This conclusory contention “is a far cry from the
`evidence of consumer preference, supracompetitive prices,
`and lower quality services” that constitutes indirect evidence
`of harm
`to competition.
` Next, Aya claimed
`that
`Dr. Rothman’s proffered chart demonstrated “that AMN
`ha[d] a 30% share or higher for a least one year between
`2013 and 2015,” the time period in which Aya claims
`exclusionary damages. The district court rejected this
`argument as well, holding that “market share calculations
`alone are insufficient to demonstrate a defendant’s market
`power.” Because Aya did not provide “sufficient evidence
`of significant barriers to entry or expansion” to accompany
`its market share calculations, Aya failed to demonstrate
`AMN could actually carry out a predatory scheme. Finally,
`the district court found that Aya also failed to proffer
`evidence of the non-solicitation agreement’s anticompetitive
`effects, “which is required, in addition to a showing of
`market power.”
`
`Again, Aya does not directly challenge the district
`court’s findings on appeal. Instead, Aya contends that the
`district court’s rule-of-reason analysis was incorrect because
`it “conflated proofs required for a Section 1 claim with those
`required for a Section 2 claim.” According to Aya, the
`district court required it to prove that AMN held “a
`monopoly position in the relevant market, and it . . . used its
`Trade Restraints to facilitate its exercise of monopoly
`power.” Aya’s argument is not persuasive—the district
`court properly conducted a rule-of-reason analysis pursuant
`to the Supreme Court’s reasoning in American Express and
`other circuits’ case law. See Am. Express, 138 S. Ct. at 2284;
`Tops Markets, Inc. v. Quality Markets, Inc., 142 F.3d 90, 97
`
`
`
` AYA HEALTHCARE SERVICES V. AMN HEALTHCARE 19
`
`(2d Cir. 1998) (holding that market power alone does not
`suffice as indirect evidence for a rule-of-reason analysis).
`Aya presents no other argument challenging the district
`court’s conclusion that it failed to proffer sufficient indirect
`evidence
`that
`the non-solicitation agreement has a
`substantial anticompetitive effect that harms consumers.
`
`the district court’s
`In summary, we agree with
`conclusion that Aya did not carry its initial burden to prove
`that AMN’s non-solicitation agreement has a substantial
`anticompetitive effect that harms consumers in the relevant
`market. Aya therefore cannot demonstrate that the restraint
`violates the rule-of-reason standard.6
`
`D.
`
`Aya contends that it can recover retaliatory damages
`pursuant to the Hammes doctrine. Aya supports its argument
`with two factual allegations: “(1) AMN ‘cartelized’ the
`relevant labor markets by entering into bilateral no-poaching
`agreements with nearly all other rival employers; and
`(2) AMN took severe retaliatory action against the few
`defectors, including Aya.” The district court properly
`rejected this argument.
`
`The Seventh Circuit’s decision in Hammes v. AAMCO
`Tr
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