The Medical Center at Elizabeth Place, LLC, Plaintiff-Appellant,
Atrium Health System, et al., Defendants-Appellees.
Argued: April 25, 2018
from the United States District Court for the Southern
District of Ohio at Dayton. No. 3:12-cv-00026-Walter H. Rice,
Richard A. Ripley, RUYAK CHERIAN LLP, Washington, D.C., for
Appellant. Shay Dvoretzky, JONES DAY, Washington, D.C., for
Appellees. ON BRIEF: Richard A. Ripley,
Brittany V. Ruyak, RUYAK CHERIAN LLP, Washington, D.C., James
A. Dyer, Patrick O'Shaughnessy, SEBALY, SHILLITO DYER,
Dayton, Ohio, for Appellant.
Dvoretzky, Robert Stander, JONES DAY, Washington, D.C.,
Melinda K. Burton, FARUKI IRELAND COX RHINEHART & DUSING
P.L.L., Dayton, Ohio, Thomas Demitrack, JONES DAY, Cleveland,
Ohio, for Appellees.
Before: BATCHELDER, SUTTON, and WHITE, Circuit Judges.
M. BATCHELDER, CIRCUIT JUDGE.
a case about competition among hospitals in Dayton, Ohio.
When Medical Center at Elizabeth Place, LLC
("MCEP") opened in 2006, it was an acute care,
for-profit hospital owned by 60 physicians and one corporate
shareholder. By 2009, MCEP's existence as a
physician-owned enterprise came to an end when it sold an
ownership interest to Kettering Health Network, a competitor
in the Dayton healthcare market. MCEP alleges that it failed
because of the anticompetitive actions of Premier Health
Partners ("Premier"), a dominant healthcare network
in the Dayton area. MCEP alleges that Premier contracted with
area physicians and payers (insurers and managed-care plan
providers) on the condition that they did not do business
with MCEP. Because payers provide patients and physicians
provide services, it is difficult to run a viable hospital
when one, let alone both, is in short supply.
whether by licit or illicit means, Premier won that
competition. In this litigation, the parties competed again.
This time, MCEP pushed all its chips to the center of the
table on one hand of cards: a claim that Premier had engaged
in conduct so devoid of benefit to the market as to be per se
illegal under the Sherman Act. Such claims apply only to a
limited range of conduct. To be per se illegal, a
defendant's conduct has to be so obviously
anticompetitive that it has no plausibly procompetitive
features-a high hurdle for plaintiffs claiming restraint of
trade. Once they clear it, however, plaintiffs receive a
corresponding reward: they need not undergo the often arduous
process of showing that the challenged conduct was
anticompetitive. As one of our sister circuits has described
it, "[t]he per se rule is the trump card of antitrust
law. When an antitrust plaintiff successfully plays it, he
need only tally his score." United States v. Realty
Multi-List, Inc., 629 F.2d 1351, 1362-63 (5th Cir.
question before us is whether MCEP successfully played its
hand. The district court from which MCEP appeals found that
MCEP's per se claim failed because the record showed that
Premier's contracts with payers and physicians had
plausibly procompetitive features. That holding says nothing
about whether Premier's conduct was on balance
procompetitive or anticompetitive. This opinion likewise
reaches no decision on the ultimate economic merits of
Premier's actions because to do so would go beyond our
charge. We must address only the question of per se
illegality, and as to that, we agree with the district court
that MCEP failed to meet the high standard required for per
se claims. We AFFIRM.
alleges a conspiracy between the Premier hospitals that
implicates, without naming as defendants, payers and
physicians in the Dayton area. During the course of this
multi-year litigation, various legal issues raised in this
case have been ruled on by U.S. District Judge Black, a Sixth
Circuit appellate panel, and then, after the matter was
remanded and Judge Black recused himself, District Judge
Rice, who granted the motion for summary judgment presently
an acute-care hospital located in Dayton, Ohio, that opened
in September 2006 with 60 physician owners and one corporate
shareholder, Regent Surgical Health. Defendants in this case
comprise four hospitals-Miami Valley Hospital (owned by
MedAmerica Health), Good Samaritan Hospital (owned by
Catholic Health Initiatives), Atrium Medical Center (owned by
Atrium Health Systems), and Upper Valley Medical Center-as
well as a joint operating company, Premier Health Partners
("Premier"), formed through a joint operating
agreement among those four hospitals. This joint operating
agreement merged some of the hospitals' healthcare
functions but allowed them to retain control of others.
Med. Ctr. at Elizabeth Place v. Atrium Health Sys.
("MCEP I"), 817 F.3d 934, 936-37 (6th Cir.
2016). Hospital Defendants comprise a dominant healthcare
network in the Dayton area, with more than a 55% share of
Dayton's inpatient surgical services.
spite of its dominant market position, the record leaves no
doubt that Hospital Defendants felt threatened by the
possibility of MCEP's presence in the Dayton medical
market. Five months before MCEP opened for business, Hospital
Defendants held a board meeting at which, "[b]y
consensus, the Board supported management's efforts"
to oppose MCEP. Executives from Premier told an MCEP
shareholder that Hospital Defendants "would do whatever
they needed to do in order to stop [MCEP] from opening."
Defendants' underlying concern appears to have been that
MCEP's for-profit, physician-owned model of healthcare
would "bankrupt" their hospitals. A letter written
by primary care physicians (most of whom were affiliated with
Hospital Defendants), addressed to physicians in the Dayton
healthcare market, expressed the dynamic they found
There is currently widespread opposition among not-for-profit
community hospitals across the country toward physician owned
inpatients [sic] hospitals such as this. The physician
investors are doing so for reasons of profitability. MVH and
GSH offer the range of services and the quality of care
necessary to enable surgeons to care for their patients. A
physician owned specialty hospital will take the
better-insured and more profitable patients away from Premier
(along with ancillary services), leaving our local hospitals
with only the more complex and underinsured patients.
for its part, wrote a "Dear Colleague" letter the
next month, responding:
• While MCEP's business model will "create a
competitive environment to deliver better and more efficient
healthcare in Dayton," it will not drive hospitals out
• MCEP "will not turn away patients on the basis of
• "Premier generates about $1 billion in revenues
and currently has a cash reserve of over $1 billion. As a
non-profit, Premier pays no taxes. . . . [MCEP] will have
revenues that are a fraction of Premier's, and our
physician-owned hospital will pay corporate, personal and
• "[C]omprehensive studies have confirmed that
physician-run hospitals have fewer medical errors, shorter
turnover times, fewer infections and greater cost
Hospital Defendants' board-meeting consensus and their
letter to physicians, MCEP alleges that Hospital Defendants
blocked MCEP from gaining meaningful access to the Dayton
market through a series of anticompetitive acts that amounted
to a group boycott of MCEP. In its Amended Complaint, MCEP
made only a per se claim; MCEP made no claim under the rule
of reason. MCEP's Amended Complaint alleges that Hospital
• financially coerced commercial health insurers or
managed care plan providers (such as Anthem,
UnitedHealthcare, Private Healthcare Systems, etc.) "to
refuse to permit [MCEP] full access to their respective
• financially coerced commercial health insurers or
managed care plans to reimburse MCEP at suppressed rates far
below what Hospital Defendants demanded for the same
• threatened retributive financial consequences to
physicians who affiliated with MCEP, and followed through on
threats, "including terminating leases that the
physicians had with the Defendants for office space";
• offered payments to physicians "who agreed not to
work with or at [MCEP]; and who agreed to divest ownership in
the Medical Center";
• financially coerced physicians affiliated with
Hospital Defendants from "admitting patients to [MCEP]
or referring patients to physicians who treated patients at
• deliberately poached physicians from MCEP who made up
a "disproportionately high number of admissions and then
prohibited them from admitting patients to [MCEP]."
these allegations, MCEP claims that, in the course of
litigation, it discovered two additional agreements that
comprised part of the actionable group boycott. First, MCEP
alleges an agreement among the payers, induced by Hospital
Defendants, not to offer MCEP a managed care contract.
Second, MCEP alleges an agreement among primary care
physicians not to do business with physicians who invested in
MCEP (Hospital Defendants refer to this as the
"physician conspiracy"). Hospital Defendants
describe the relationship of these agreements to the original
allegation using the metaphor of a hub, spoke, and rim. For
these claims, the Hospital Defendants form the hub; the
vertical agreements the Hospital Defendants made with payers
and physicians to exclude MCEP are the spokes; and the
discrete agreements to boycott MCEP, among the payers and
among the physicians, are at the rim.
alleged only the "hub" agreement in its Amended
Complaint. Hospital Defendants argue that the "rim
conspiracy" claim is a new, and untimely,
Sherman Act Section 1 claim. MCEP, for its part, maintains
that the additional agreements are simply evidence of the
overarching Section 1 conspiracy alleged in their Amended
Complaint. Regardless of the exact scope of the alleged
boycott, MCEP alleges that one existed, that it was
orchestrated by Hospital Defendants, and that it prevented
MCEP from succeeding as a going concern. MCEP claims that,
but for Hospital Defendants' conduct, it would have been
able to contract with payers and physicians, which would
have, in turn, increased competition in the Dayton healthcare
market for consumers of general inpatient surgical services.
case was before Judge Black in Cincinnati from January 30,
2012, to April 19, 2017. During that time, Judge Black
granted Hospital Defendants' motion for summary judgment
on the ground that the MCEP's antitrust claim lacked the
necessary plurality of actors.
appeal to this court, a divided panel reversed Judge Black
and rejected Hospital Defendants' motion for summary
judgment. The panel held that a reasonable juror could find
that Premier comprised multiple competing entities and,
therefore, could engage in concerted action. MCEP I,
817 F.3d at 945. The panel did not address other issues
raised before it, such as whether MCEP's additional rim
conspiracy claims were untimely. Id. at 939.
remand, Hospital Defendants moved again for summary judgment
arguing, among other things, that MCEP's allegation of a
per se antitrust violation failed as a matter of law.
Hospital Defendants argued that their alleged restraints on
trade were plausibly procompetitive which, they argued, is
sufficient to defeat a per se antitrust claim. Because MCEP
pleaded only a per se claim, if Hospital Defendants had
succeeded in this argument, the case would have been
dismissed. Judge Black denied Hospital Defendants'
renewed motion for summary judgment, rejecting Hospital
Defendants' argument on two alternative bases:
first, the claimed procompetitive effects of the
challenged conduct are subject to genuine dispute and are
therefore an improper basis for summary judgment, and
second, Hospital Defendants "failed to evidence
that their joint contracting has any efficiency-enhancing
purpose to which such an agreement is necessary."
Med. Ctr. at Elizabeth Place v. Premier Health
Partners, 2016 WL 9460026, at *5 (S.D. Ohio Oct. 6,
case was set for trial. But on April 19, 2017, Judge Black
recused himself and the case was re-assigned to Judge
Rice. Before Judge Rice, Hospital Defendants
moved to "Clarify Issues for Trial," which all
parties now agree amounted to a motion for reconsideration of
Judge Black's October 6, 2016, order denying Hospital
Defendants' motion for summary judgment. Less than a week
before trial was set to begin, Judge Rice granted Hospital
Defendants' motion for summary judgment and dismissed the
Amended Complaint with prejudice. Judge Rice declined to
apply the "law of the case" doctrine, holding that
Judge Black had clearly erred. He found that while Judge
Black correctly articulated the standard for a per se
claim-that the challenged conduct must have no plausible
procompetitive effect-Judge Black failed to acknowledge that
the record showed that the Hospital Defendants'
challenged restraints had such plausible procompetitive
effects. Judge Rice also rejected MCEP's argument that
the Amended Complaint implicitly included claims of rim
conspiracies among the payers and among the physicians-claims
that all agree, if proven, would constitute a per se
violation-explaining that those claims were not contained in
the Amended Complaint, that MCEP's attempt to "wedge
this new claim into the existing allegations" was
improper, and that the Hospital "Defendants would be
severely prejudiced if MCEP were permitted to amend its
Complaint [again] at this late date." MCEP asks us to
reverse Judge Rice's decision granting Hospital
Defendants' motion for summary judgment and to remand the
case for trial.
judgment is warranted if, viewing the facts in the light most
favorable to the nonmoving party, no material fact is subject
to a genuine dispute. Matsushita Elec. Indus. Co. v.
Zenith Radio Corp., 475 U.S. 574, 585-87
(1986). We review de novo grants of summary
judgment. Expert Masonry, Inc. v. Boone Cty., 440
F.3d 336, 341 (6th Cir. 2006).
parties dispute what de novo review should entail in this
case. MCEP claims that Judge Rice's decision to not apply
the "law of the case" doctrine was critical to his
decision to grant Hospital Defendants' motion for summary
judgment, and therefore we must review Judge Rice's
"law of the case" decision de novo. According to
MCEP, Judge Rice could reconsider Judge Black's denial of
summary judgment only by finding that Judge Black clearly
erred. So, MCEP says, if Judge Rice was wrong that Judge
Black committed clear error, then we must reverse his
"law of the case" judgment. For their part,
Hospital Defendants argue that we should simply review de
novo Judge Rice's substantive legal conclusions, separate
and apart from Judge Rice's "law of the case"
the Hospital Defendants have the better of this argument.
First, we review for abuse of discretion Judge
Rice's decision to reconsider Judge Black's
pre-transfer order. See United States v. Todd, 920
F.2d 399, 403 (6th Cir. 1990). MCEP argues that abuse of
discretion is not the proper standard of review in a case
transferred from one district court to another, in which a
pre-transfer ruling of one judge is altered by a
post-transfer decision of a different judge. We have
foreclosed this argument by holding-in precisely the scenario
identified by MCEP- that abuse of discretion remains the
proper standard of review. See Gillig v. Advanced
Cardiovascular Sys. Inc., 67 F.3d 586, 590 (6th Cir.
we can find that Judge Rice abused his discretion in
disturbing Judge Black's denial of summary judgment only
if we have a "definite and firm conviction that [Judge
Rice] committed a clear error in judgment" such as
"rel[ying] upon clearly erroneous factual findings,
appl[ying] the law improperly, or us[ing] an erroneous legal
standard." See Garner v. Cuyahoga Cty. Juvenile
Ct., 554 F.3d 624, 634 (6th Cir. 2009) (citation and
quotation marks omitted). Of these potential bases for abuse
of discretion, MCEP argues only that Judge Rice improperly
applied the law, a question that we review de novo.
raises two substantive claims on appeal. First, MCEP
argues that the district court erred by declining to apply
the per se rule to Hospital Defendants' allegedly
anticompetitive conduct. Second, MCEP argues that
the district court erred in rejecting MCEP's
"horizontal rim claims" due to untimeliness.
Neither argument has merit.
1 of the Sherman Act states that "[e]very contract,
combination in the form of trust or otherwise, or conspiracy,
in restraint of trade or commerce among the several States,
or with foreign nations, is declared to be illegal." 15
U.S.C. § 1. Because virtually every agreement between
parties has the potential to be considered a restraint of
trade, antitrust jurisprudence limits the range of restraints
within the reach of antitrust law to agreements that
unreasonably restrain trade. In re Southeastern
Milk Antitrust Litig., 739 F.3d 262, 270 (6th Cir.
2014). A restraint on trade may be found to be unreasonable
per se or under the "rule of reason." Id.
As MCEP makes only a per se claim, the question before us is
whether Judge Rice erred in granting Hospital Defendants'
motion for summary judgment on the grounds that Hospital
Defendants' conduct falls outside per se illegality.
Judges Black and Rice did not agree in their answer to the