Turner v. Virginia Department of Medical Assistance Services

230 F. Supp. 3d 498, 2017 WL 598506, 2017 U.S. Dist. LEXIS 20402
CourtDistrict Court, W.D. Virginia
DecidedFebruary 14, 2017
DocketCase No.: 4:16-cv-00043
StatusPublished
Cited by2 cases

This text of 230 F. Supp. 3d 498 (Turner v. Virginia Department of Medical Assistance Services) is published on Counsel Stack Legal Research, covering District Court, W.D. Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Turner v. Virginia Department of Medical Assistance Services, 230 F. Supp. 3d 498, 2017 WL 598506, 2017 U.S. Dist. LEXIS 20402 (W.D. Va. 2017).

Opinion

MEMORANDUM OPINION

Jackson L. Kiser, SENIOR UNITED STATES DISTRICT JUDGE

Dr. Mark G. Turner (“Plaintiff’) filed the present action on September 9, 2016. (See Compl., Sept. 9, 2016 [ECF No. 1]; First Am. Compl., Nov. 15, 2016 [ECF No. 26] (hereinafter “Am. Compl.” or “the Complaint”).) Count 1 alleges that each Defendant violated Section 1 of the Sherman Act, 15 U.S.C. § 1 (“Section 1”), and also seeks treble damages under Section 4 of the Clayton Act. (Am. Compl. ¶ 67-78); 15 U.S.C. § 15. Counts 2 through 5 allege various state claims of tortious interference with existing and prospective contracts and economic advantage against the individual defendants.1 Defendants have filed a total of four motions to dismiss for failure to state a claim under Fed. R. Civ. P. 12(b)(6).2 [ECF Nos. 27, 29, 31, 89]. In addition, DentaQuest and the Virginia Department of Medical Assistance Services (“DMAS”) argue that state-action immunity shields them from any antitrust liability. For the reasons stated below, I will grant all four motions with regard to Count 1. Because the Counts 2-5 are alleged under Virginia law, I will decline to exercise supplemental jurisdiction under 28 U.S.C. § 1867(c).

1. STATEMENT OF FACTS AND PROCEDURAL HISTORY

Plaintiff is a dentist who, at the time of the alleged events, was working in the Roanoke area “treating adult Medicaid patients exclusively for exams, x-rays, and [tooth] extractions.” (Am. Compl. ¶ 3.) Plaintiff provided these services through the Smiles for Children (“SFC”) program. Contrary to what its name suggests, SFC provides limited dental care to Medicaid patients over the age of 21. Plaintiff “worked exclusively with the Over 21 portion of the Medicaid Smiles For Children program” from January 2008 until early 2014. (Id. at ¶ 8.) While Medicaid provides funding, DMAS is in charge of overseeing the program in Virginia. (Id. at ¶¶ 5-6.) DMAS contracts with DentaQuest to provide day-to-day administration of SFC. ( Id. at ¶ 21.) DentaQuest, through its predecessor company, Doral Dental USA, entered into a contract with Plaintiff (the “DentaQuest Agreement”) whereby Plaintiff agreed “to provide Medicaid approved dental services to individuals in the [SFC] program in the Over 21 division.” (Id. at ¶ 7). From 2008 to 2014, Plaintiff “was likely the largest safety net adult Medicaid [502]*502practice in Virginia,” and “was treating at least 75% of the eligible Medicaid adults receiving treatment in the Roanoke Valley.” (Id. at ¶ 10.)

At the same time that Plaintiff was providing these services, the Mission of Mercy (“MOM”), a “free volunteer traveling dental clinic,” was operating in the Roanoke area. (Id. at ¶ 13.) Defendant Terry Dickinson was the clinic’s Executive Director and founder of MOM. MOM was also supported by the Virginia Dental Association (“VDA”). (Id.) The VDA is “a non-profit organization of dentists committed to enhancing the professional lives of its member dentists.” (Id. at ¶ 24.) Dr. Terry Dickinson was the executive director of the VDA at the time of these events. (Id. at ¶ 13.) Plaintiff was the sole “private provider accepting Over 21 Medicaid patients in his Western Virginia service area.” (Id. at ¶ 11.) Although Plaintiff contends competition from MOM hurt his practice, he also credits his own practice as instrumental in forcing MOM to close:

The MOM organizers publicly admitted that their model no longer made any financial sense. [Plaintiffs] 6 years of treating 6,100 patients, performing [sic] 26,250 extractions certainly reduced he backlog demand for these services. Dr. Turner’s efforts were certainly a contributing factor with the Roanoke Mission of Mercy going out of business.

(Id. at ¶ 40.)

Plaintiff alleges that the MOM organizers used their “market power” to restructure their clinic’s model “to push the Plaintiff out of his dental market niche, and out of business.” (Am. Compl. ¶ 18.) The MOM clinic was reorganized into what Plaintiff refers to as “Mini-MOMs.” He does not elaborate on this model beyond stating that the Mini-MOMS would provide free dental care to eligible patients, including Medicaid patients under the age of 21. Those over 21 were referred to the Commonwealth Dental Clinic (“CDC”). (Id. at ¶¶ 41-42.) CDC was founded by Greg Harvey to treat Medicaid patients over the age of 21 after the MOM clinic ended its operations. Because the new Mini-MOMs did not take Medicaid patients over the age of 21, it would refer those patients to CDC. (Id.) CDC took referrals from Mini-MOM but also from other clinics that did not accept Medicaid, such as Blue Ridge Dental Group (“BRDG”), a practice formerly owned by David Black but purchased by Harvey. (Id. at ¶¶ 31, 42.) The Mini-MOMs were “fully endorsed” by the VDA (Id. at ¶ 42.)

As stated above, Plaintiffs patients came as a result of the service agreement with DentaQuest, which was acting as the third-party administrator for the SFC program overseen by DMAS. In January 2014, DentaQuest terminated its agreement with Plaintiff without cause. According to Plaintiff, “[t]he termination order came from outside of [DentaQuest headquarters], and had been requested by representatives of DMAS at least as early as January 2013.” (Id. at ¶ 43.) According to the agreement, either party could terminate the agreement without cause provided that the terminating party give 30 days’ notice.3 (Dental Provider Serv. Agmt. [503]*503¶ 15(c), July 16, 2007 [ECF No. 30-1].) Plaintiff states that, although it may be unclear why the agreement was terminated, “it is clear that Defendant Terry Dickinson was involved in the termination decision and that he was regularly advised on the progress of that decision by representatives of DMAS.” (Am. Compl. ¶ 44.)

Plaintiffs antitrust claim can be boiled down to this: Dickinson was somehow in contact with DMAS while it was in the process of directing DentaQuest to terminate the agreement with Plaintiff.4 At some unknown time, Plaintiff contends Dickinson told Black that Plaintiffs contract was about to be terminated. Black, along with Harvey, launched CDC in order to accept Medicaid patients over the age of 21, the patient base that had formed the entirety of Plaintiffs practice since at least 2008. (Id. .at 33.) Black and Harvey purchased a building for $250,000 to house the new clinic. (Id.) The VDA, led by Dickinson, endorsed CDC even though it had “not supported the Over 21 Benefit in the past.” (Id. at ¶ 25.) At an unspecified time, Plaintiff made a complaint to the VDA Ethics Committee regarding perceived ethical violations by Black. According to Plaintiff, “[t]he VDA Ethics Committee likely did not conduct a review of [Plaintiffs complaint], as, if they did, David Black would have been found blatantly guilty based on the facts.” (Id. ¶ 27.) It is unclear whether there is a factual overlap between the ethics complaint and these allegations.

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Bluebook (online)
230 F. Supp. 3d 498, 2017 WL 598506, 2017 U.S. Dist. LEXIS 20402, Counsel Stack Legal Research, https://law.counselstack.com/opinion/turner-v-virginia-department-of-medical-assistance-services-vawd-2017.