United States District Court, W.D. Washington, Tacoma
ORDER DENYING DEFENDANTS’ MOTION TO DISMISS,
GRANTING DEFENDANTS’ MOTION TO POSTPONE BRIEFING, AND
RENOTING PLAINTIFF’S MOTION
BENJAMIN H. SETTLE United States District Judge.
matter comes before the Court on Defendants The Doctors
Clinic, A Professional Corporation (“TDC”),
Franciscan Health System d/b/a CHI Franciscan Health
(“FHS”), and Franciscan Medical Group’s
(“FMG”) (collectively “Defendants”)
motion to dismiss, Dkt. 39, Plaintiff the State of
Washington’s (“State”) motion for partial
summary judgment, Dkt. 48, and Defendant’s motion to
postpone briefing on the State’s motion, Dkt. 61. The
Court has considered the pleadings filed in support of and in
opposition to the motions and the remainder of the file and
hereby rules as follows:
August 31, 2017, the State filed a complaint against
Defendants FHS, FMG (together with FHS, “CHI
Franciscan”), TDC, and WestSound Orthopaedics, P.S.,
asserting a per se violation of Section 1 of the
Sherman Act, 15 U.S.C. § 1, and the Washington Consumer
Protection Act (“CPA”), RCW Chapter 19.86; an
unreasonable restraint of trade in violation of 15 U.S.C.
§ 1 and the CPA; and violation of Section 7 of the
Clayton Act, as amended, 15 U.S.C. § 18, and
the CPA. Dkt. 1 (“Compl.”).
October 30, 2017, Defendants moved to dismiss the
State’s per se claim and attached four
contracts to their motion. Dkts. 39–39-4. On November
29, 2017, the State responded. Dkt. 45. The State also
submitted an agreement and multiple documents from its
investigation into the alleged anti-competitive practices.
Dkt. 46. On December 8, 2017, Defendants replied and moved to
strike the State’s evidence. Dkt. 58.
November 29, 2017, the State moved for partial summary
judgment on its first claim to establish that CHI Franciscan
and TDC are separate entities capable of conspiring under 15
U.S.C. § 1 and RCW 19.86.030. Dkt. 49 at 6.
December 15, 2017, Defendants moved to postpone briefing on
the State’s motion for partial summary judgment. Dkt.
61. On December 29, 2017, the State responded. Dkt. 67. On
January 5, 2018, the State replied. Dkt. 70.
early September 2016, Defendants entered into a series of
agreements. In general, the State alleges that TDC and CHI
Franciscan are separate economic entities that entered into
an agreement to jointly negotiate the prices for the services
they provide to the public. Taken as true, the State asserts
that these agreements establish a horizontal price fixing
agreement that is per se illegal. Defendants counter
that the State mischaracterizes their agreement and that it
is an “output” agreement that is not subject to a
per se analysis. The Court need not recite any
additional allegations because Defendants are dressing a
summary judgment motion in Rule 12(b)(6) attire.
to dismiss brought under Rule 12(b)(6) of the Federal Rules
of Civil Procedure may be based on either the lack of a
cognizable legal theory or the absence of sufficient facts
alleged under such a theory. Balistreri v. Pacifica
Police Department, 901 F.2d 696, 699 (9th Cir. 1990).
Material allegations are taken as admitted and the complaint
is construed in the plaintiff’s favor. Keniston v.
Roberts, 717 F.2d 1295, 1301 (9th Cir. 1983). To survive
a motion to dismiss, the complaint does not require detailed
factual allegations but must provide the grounds for
entitlement to relief and not merely a “formulaic
recitation” of the elements of a cause of action.
Bell Atlantic Corp. v. Twombly, 127 S. Ct. 1955,
1965 (2007). Plaintiffs must allege “enough facts to
state a claim to relief that is plausible on its face.”
Id. at 1974.
Per se Agreements
1 of the Sherman Act, 15 U.S.C. § 1, prohibits
“[e]very contract, combination . . . or conspiracy, in
restraint of trade or commerce among the several
States.” Allied Orthopedic Appliances Inc. v. Tyco
Health Care Grp. LP, 592 F.3d 991, 996 (9th Cir. 2010).
In order to state a claim, plaintiff must allege that the
defendant (1) engaged in a conspiracy (2) that unreasonably
restrained trade under either a per se or rule of