United States District Court, D. Colorado
KISSING CAMELS SURGERY CENTER, LLC, CHERRY CREEK SURGERY CENTER, LLC, ARAPAHOE SURGERY CENTER, LLC, and HAMPDEN SURGERY CENTER, LLC, Plaintiffs,
CENTURA HEALTH CORPORATION, COLORADO AMBULATORY SURGERY CENTER ASSOCIATION, INC., ROCKY MOUNTAIN HOSPITAL AND MEDICAL SERVICE, INC., d/b/a ANTHEM BLUE CROSS AND BLUE SHIELD OF COLORADO, UNITEDHEALTHCARE OF COLORADO, INC., AUDUBON AMBULATORY SURGERY CENTER, LLC, and AETNA, INC., Defendants.
ORDER ON DEFENDANTS' MOTIONS TO DISMISS
WILLIAM J. MARTÍNEZ, District Judge.
Plaintiffs Kissing Camels Surgery Center, LLC ("Kissing Camels"), Cherry Creek Surgery Center, LLC ("Cherry Creek"), Arapahoe Surgery Center, LLC ("Arapahoe"), and Hampden Surgery Center, LLC ("Hampden") (collectively "Plaintiffs") bring this antitrust action under the Sherman Act, 15 U.S.C. §§ 1 et seq., and the Colorado Antitrust Act, Colo. Rev. Stat. §§ 6-4-101 et seq. (First Am. Compl. ("FAC") (ECF No. 70) at 28-38.) Before the Court are eight Motions to Dismiss (collectively "Motions"). (ECF Nos. 88, 91, 93, 94, 112, 113, 114, 128.) For the reasons set forth below, the Motions filed by Kaiser Foundation Health Plan of Colorado, HCA, Inc., and HCA-HealthONE LLC are denied as moot, Centura Health Corporation's Motion is granted in part and denied in part, and the remaining Motions are granted.
I. LEGAL STANDARD
Under Federal Rule of Civil Procedure 12(b)(6), a defendant may move to dismiss a claim in a complaint for "failure to state a claim upon which relief can be granted." In evaluating such a motion, a court must "assume the truth of the plaintiff's well-pleaded factual allegations and view them in the light most favorable to the plaintiff." Ridge at Red Hawk, LLC v. Schneider, 493 F.3d 1174, 1177 (10th Cir. 2007). In ruling on such a motion, the dispositive inquiry is "whether the complaint contains enough facts to state a claim to relief that is plausible on its face.'" Id. (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Granting a motion to dismiss "is a harsh remedy which must be cautiously studied, not only to effectuate the spirit of the liberal rules of pleading but also to protect the interests of justice." Dias v. City & Cnty. of Denver, 567 F.3d 1169, 1178 (10th Cir. 2009) (quotation marks omitted). "Thus, a well-pleaded complaint may proceed even if it strikes a savvy judge that actual proof of those facts is improbable, and that a recovery is very remote and unlikely.'" Id. (quoting Twombly, 550 U.S. at 556).
The relevant facts, as pled in the FAC, are as follows.
Plaintiffs are four ambulatory surgery centers performing outpatient surgical procedures and treatments in a non-hospital environment. (FAC ¶ 17.) Plaintiff Kissing Camels provides services in the area of Colorado Springs, Colorado, and the other three Plaintiffs provide services in the Denver, Colorado metropolitan area ("Metro Denver"). ( Id. ¶¶ 27, 40.)
Defendant HCA, Inc. owns Defendant HCA-HealthONE LLC (together, "HCA"), which operates a system of hospitals and surgery centers in Metro Denver that compete with Plaintiffs Cherry Creek, Arapahoe, and Hampden to provide ambulatory surgery services. (FAC ¶¶ 6, 27.) Centura Health Corporation ("Centura") owns a system of hospitals and surgery centers in both Metro Denver and Colorado Springs, which compete with Plaintiff Kissing Camels to provide ambulatory surgery services. ( Id. ¶¶ 7, 40.) Defendant Audubon Ambulatory Surgery Center, LLC ("Audubon") is a joint venture between Centura and several local physicians, and is controlled by Centura. ( Id. ¶¶ 13, 44.) Defendant Colorado Ambulatory Surgery Center Association, Inc. ("CASCA") is a trade association representing the interests of ambulatory surgery centers. ( Id. ¶ 45.) At least two HCA employees sit on CASCA's Board of Directors, and Audubon's Executive Director serves as an officer of CASCA. ( Id. ¶¶ 65-66.) Defendants Rocky Mountain Hospital and Medical Service, Inc, d/b/a Anthem Blue Cross and Blue Shield of Colorado ("Anthem"), UnitedHealthCare of Colorado, Inc. ("United"), Aetna, Inc. ("Aetna"), and Kaiser Foundation Health Plan of Colorado ("Kaiser") (collectively "Insurers" or "Insurer Defendants") are health insurance companies doing business in Colorado. ( Id. ¶¶ 46-49.)
Plaintiffs allege that, beginning in 2010, Centura and HCA conspired to reduce competition for ambulatory surgery services by not doing business with Plaintiffs, and by using their market power to pressure physicians and insurers with whom HCA and Centura have relationships not to do business with Plaintiffs. (FAC ¶¶ 33, 52-55, 82.) CASCA provided the site for the meetings at which the conspiracy was formed. ( Id. ¶ 45.)
A non-hospital ambulatory surgery center requires transfer agreements with hospitals to ensure that a patient requiring emergency hospitalization receives rapid and adequate care. ( Id. ¶ 56.) HCA and Centura have both refused to sign transfer agreements between their hospitals and Plaintiffs' facilities, despite the predicted benefit to the hospital of increased patient flow. ( Id. ¶¶ 56-57.) In April 2010, a Centura-owned hospital canceled a planned patient transfer agreement with Plaintiff Kissing Camels, and in February 2012, a HCA-HealthONE hospital refused to sign a transfer agreement with Cherry Creek. ( Id. )
At the request of Centura and HCA, CASCA's Executive Director sent a letter to the Colorado Department of Regulatory Agencies ("DORA"), asking it to take legal action against Plaintiffs for allegedly violating state law prohibiting them from waiving or discounting insurance copayments and deductibles. ( Id. ¶ 68.) DORA took no action against Plaintiffs based on this letter, and noted that no complaints had been received by the Colorado Medical Board for unlawful billing practices. ( Id. )
Plaintiffs also allege that on August 30, 2012, Centura, HCA, and CASCA held a meeting at which they requested that the Insurer Defendants and other insurers join them in a concerted boycott of Plaintiffs. ( Id. ¶¶ 65-69.) At the meeting, Centura and Audubon representatives asserted that Plaintiffs' billing practices violated state law because Plaintiffs were waiving copayments and deductibles, and requested that the Insurers not do business with Plaintiffs. ( Id. ¶¶ 54, 69.)
Starting in 2010, Plaintiffs allege that Centura asked United to penalize physicians referring business to Plaintiff Kissing Camels, and both Centura and HCA made similar requests of other Insurers. ( Id. ¶ 55.) The Insurers were compelled to comply because they needed Centura's and HCA's hospitals in their provider networks. ( Id. ¶ 34.) All of the Insurer Defendants have refused to negotiate network agreements directly with Plaintiffs. ( Id. ¶¶ 47-49.) Aetna threatened physicians with termination from its provider network, and also threatened to post information on its provider website that those physicians were referring patients to out-of-network providers, which would increase costs for patients. ( Id. ¶¶ 59, 63.) Aetna also sent certified letters terminating physicians for out-of-network referrals to Plaintiffs' facilities. ( Id. ¶ 76.) Anthem also contacted physicians who were using Plaintiffs' facilities, and sent letters threatening network termination for purportedly inappropriate referrals, including a letter to Colorado Orthopaedic Consultants that was sent on August 31, 2012, the day after the CASCA meeting. ( Id. ¶¶ 64, 73-75.)
Plaintiffs allege that in 2011, United threatened Dr. Steven Topper of Colorado Hand Center with termination for breach of his network contract based on his referral of patients to Kissing Camels, and terminated his contract by letter on December 16, 2011. ( Id. ¶¶ 49, 60.) On August 31, 2012, United terminated another facility, Metro Denver Pain Management, purportedly "for cause" due to its regular use of Arapahoe's facility. ( Id. ¶¶ 61-62.) United also threatened primary care physicians with termination from its network because they referred patients to specialists that used Plaintiffs' facilities. ( Id. ¶¶ 71-72.)
According to Plaintiffs, at an Audubon shareholder meeting on October 4, 2012, Audubon administrator Brent Ashby stated that it was his goal to put Kissing Camels out of business. ( Id. ¶ 81.)
On November 15, 2012, Plaintiffs filed a Complaint against Defendants HCA, Centura, CASCA, and Kaiser, bringing claims under the Sherman Act and the Colorado Antitrust Act. (ECF No. 1.) Plaintiffs filed their FAC on April 3, 2013, adding claims against Defendants Arapahoe, Anthem, United, and Aetna. (ECF No. 70.) The FAC alleges that Defendants conspired to restrain trade in the Metro Denver and Colorado Springs markets for ambulatory surgery services, under both § 1 of the Sherman Act (Count 1) and the parallel provision of the Colorado Antitrust Act (Count 6). (FAC ¶¶ 87-91, 114-118.) The remaining claims (Claims 2-5 and 7-10) are brought under § 2 of the Sherman Act and the parallel Colorado law against Defendants HCA, Centura, and Audubon. ( Id. ¶¶ 92-103, 119-40.)
On April 22, 2013, Defendants CASCA, HCA, Kaiser, and Centura filed Motions to Dismiss the respective claims against them. (ECF Nos. 88, 91, 93, 94.) Plaintiffs filed an Omnibus Response (ECF No. 111), and CASCA, HCA, Kaiser, and Centura filed Replies (ECF Nos. 120, 122, 123, 124). On May 23, 2013, Defendants Aetna, Anthem, and Audubon filed Motions to Dismiss (ECF Nos. 112, 113, 114), Plaintiffs filed Responses (ECF Nos. 124, 125), and Aetna, Anthem, and Audubon filed Replies (ECF Nos. 129, 130, 131). Defendant United filed its Motion to Dismiss (ECF No. 128) on June 28, 2013, to which Plaintiffs filed a Response (ECF No. 132), and United a Reply (ECF No. 136).
Plaintiffs subsequently stipulated to dismiss Defendants Kaiser and HCA from this action. (ECF Nos. 140 & 175.) Accordingly, Kaiser's and HCA's Motions to Dismiss (ECF Nos. 91 & 93) are moot. The remainder of the Motions are fully briefed and ripe for disposition.
Each Defendant's respective Motion moves for the dismissal of all claims asserted against it. The Insurer Defendants and CASCA each move for dismissal of Plaintiffs' claim under § 1 of the Sherman Act (Count 1), and the analogous state claim pursuant to Colorado Revised Statutes § 6-4-104 (Count 6), the only claims asserted against them. (ECF Nos. 88, 112, 113, 128; see FAC ¶¶ 87-91, 114-18.) Defendant Audubon moves to dismiss Plaintiffs' § 1 claim, as well as Plaintiff Kissing Camels' § 2 claims for Attempted Monopolization and Conspiracy to Monopolize the Colorado Springs market (Claims 4 and 5), and the analogous state law claims (Claims 9 and 10). (ECF No. 114; see FAC pp. 31-33, 36-38.) Defendant Centura moves for the dismissal of Plaintiffs' § 1 claims, Plaintiffs' § 2 claims with respect to the Colorado Springs market, and Plaintiffs' § 2 claims for Attempted Monopolization and Conspiracy to Monopolize the Metro Denver market (Claims 2 and 3) and the analogous state claims (Claims 7 and 8). (ECF No. 94; see FAC pp. 29-31, 34-36.)
The Sherman Act is a federal statute prohibiting monopolies and combinations in restraint of trade. Section 1 of the Sherman Act prohibits "[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". 15 U.S.C. § 1. Section 2 of the Sherman Act prohibits monopolization, attempted monopolization, or conspiracy to monopolize any part of interstate trade or commerce. Id. § 2.
The parties agree that federal antitrust law principles control both the federal and state antitrust claims. See Four Corners Nephrology Assocs., P.C. v. Mercy Med. Ctr. of Durango, 582 F.3d 1216, 1220 n.1 (10th Cir. 2009); (ECF Nos. 88 at 2 n.1; 94 at 6 n.3; 111 at 3 n.2; 112 at 4 n.2; 113 at 4 n.2; 114 at 2 n.2). The Court will ...