Kissing Camels Surgery Center, LLC v. Centura Health Corp.

111 F. Supp. 3d 1180, 2015 U.S. Dist. LEXIS 77797, 2015 WL 3777365
CourtDistrict Court, D. Colorado
DecidedJune 16, 2015
DocketCivil Action No. 12-cv-3012-WJM-NYW
StatusPublished
Cited by1 cases

This text of 111 F. Supp. 3d 1180 (Kissing Camels Surgery Center, LLC v. Centura Health Corp.) is published on Counsel Stack Legal Research, covering District Court, D. Colorado primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Kissing Camels Surgery Center, LLC v. Centura Health Corp., 111 F. Supp. 3d 1180, 2015 U.S. Dist. LEXIS 77797, 2015 WL 3777365 (D. Colo. 2015).

Opinion

ORDER DENYING DEFENDANTS’ MOTIONS TO DISMISS

William J. Martinez, United States 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 alleging violations of the Sherman Act, 15 U.S.C. §§ 1 et seq., and the Colorado Antitrust Act, Colo. Rev.Stat. §§ 6-4-101 et seq. (Sec.Am.Compl. (“SAC”) (ECF No. 213) at 56-62.) Before the Court are four Motions to Dismiss (collectively “Motions”), filed by 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”) (collectively the “Insurer Defendants” or “Insurers”), and Colorado Ambulatory Surgery Center Association, Inc. (“CASCA”).1 (ECF Nos. 259, 260, 261, 264.) For the reasons set forth below, the Motions are denied.

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 plaintiffs well-pleaded factual allegations and view them in the light most favorable to the plaintiff.” Ridge at Red Hawk, L.L.C. 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, 127 S.Ct. 1955, 167 L.Ed.2d 929 (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 556,127 S.Ct. 1955).

II. BACKGROUND

Plaintiffs are four ambulatory surgery centers (“ASCs”) performing outpatient surgical procedures and treatments in a non-hospital environment. (SAC ¶¶ 1, 19.) 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. (Id. ¶¶ 6-9.)

Defendant Centura Health Corporation (“Centura”) owns a system of hospitals and surgery centers in both Denver and Colorado Springs, which compete with Plaintiffs to provide ambulatory surgery services in both geographic areas. (Id. ¶¶ 10, 36-39.) Former defendant Audubon is an ASC which is a joint venture between Centura and several local physicians, and Centura holds more than 40% ownership of [1183]*1183Audubon. (Id. ¶¶ 38,123.) Audubon competes with Plaintiff Kissing Camels to provide ambulatory surgery services in the Colorado Springs area. (Id. ¶ 40.) Former defendant HCA, Inc. owns former defendant HCA-HealthONE LLC (“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 sendees. (Id. ¶¶27-28.)

Defendant CASCA is a trade association purporting to represent the interests of ASCs, to which Centura and HCA both provide substantial financial support. (Id. ¶¶ 45, 83.) At least two HCA employees sit on CASCA’s Board of Directors, and six Board members are employed by companies with contractual relationships with Centura, including one, Brent Ashby, who is the Administrator of Audubon and another of Centura’s joint venture ASCs. (Id. 1T1Í 46, 53.) Plaintiffs allege that CAS-CA worked directly with the Colorado Association of Health Plans (“CAHP”), an association of insurers whose Board of Directors includes executives from United and Anthem, to assist in formulating the alleged conspiracy. (Id. ¶¶ 46, 53, 101.) Defendants Anthem, United, and Aetna are health insurance companies doing business in Colorado. (Id. ¶¶ 13-15.)

Plaintiffs Arapahoe and Kissing Camels began doing business in 2010. (Id. ¶ 28.) Plaintiffs allege that, beginning that year, 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. (Id. ¶¶ 47-50.) CASCA allegedly joined the conspiracy at the behest of HCA and Centura, holding strategy meetings at which the conspiracy was formed and meeting separately with CAHP and various Insurers to coordinate action against Plaintiffs. (Id. ¶¶ 59, 75, 90-93, 99-102, 125.) Despite the fact that Plaintiffs were CASCA members, CASCA acted in secret and excluded Plaintiffs from meetings at which the conspiratorial objectives were discussed. (Id. ¶¶ 95,133.)

A non-hospital ASC is required to have transfer agreements with hospitals to ensure that a patient requiring emergency hospitalization receives rapid and adequate care. (Id. ¶ 66.) 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. ¶¶ 66-67.) In December 2010, a Centuraowned hospital canceled a planned patient transfer agreement with Plaintiff Kissing Camels, and in February 2012, a HCA hospital refused to sign a transfer agreement with Cherry Creek. (Id.)

Plaintiffs’ allegations make reference to specific pieces of evidence, principally emails and meeting notes, in which Defendants discussed strategies to lessen the competitive threat posed by Plaintiffs. (See id. ¶¶ 42, 51-55, 59-62, 70, 77-78, 80, 91-95, 99-102,124.)

Spearheaded by CASCA and CAHP, a conference call meeting to discuss actions against Plaintiffs was held on May 18, 2012, which was attended by representatives from Aetna, Anthem, United, and other insurance companies, as well as CASCA Board members. (Id. ¶¶ 94-95.) A follow-up meeting, which was scheduled in order for the “right” Insurer personnel to attend, was held on August 29, 2012, and was attended by CASCA Board members, including Mr. Ashby of Audubon, and executives from Anthem, United, and Aetna (by phone), as well as other insurance companies. (Id. ¶¶ 95-97.) Based on notes taken by a CAHP representative, [1184]*1184Plaintiffs allege that the meeting participants agreed to follow a strategy of “stop[ping] the flow of dollars” from the Insurers to Plaintiffs. (Id.

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111 F. Supp. 3d 1180, 2015 U.S. Dist. LEXIS 77797, 2015 WL 3777365, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kissing-camels-surgery-center-llc-v-centura-health-corp-cod-2015.