Colucci v. Health First, Inc. is a purported antitrust class action filed in the United States District Court for the Middle District of Florida in 2021. On Tuesday, Judge Roy Dalton,Jr. issued an order denying in part and granting in part defendant Health First’s motion to dismiss two counts of the five count second amended complaint (SAC).
At the outset, Judge Dalton notes generally that SAC alleges that the the defendant healthcare provider engages in various anti-competitive practices in Brevard County, Florida, where the defendant owns four hospitals and “dominates the acute care market.”
More specifically, Judge Dalton says that “Plaintiffs further allege that Defendant conspired with [non-party] AdventistHealth (“Adventist”) to divide the sale of inpatient and emergency room acute care in the relevant market…” To support this claim, Judge Dalton notes that the SAC alleges “direct evidence” of the conspiracy consisting of, among other things: “a written agreement in 2019 [purportedly to engage in horizontal market division]; many inpatients being forced arbitrarily to travel to Adventist Hospitals outside Brevard; Defendant allowing surgeons to use only Adventist when they require higher levels of care…; Adventist declining to purchase a cancer center in Brevard; and Defendant executing a letter of intent to collaborate with Adventist in providing urgent care throughout Brevard.”
In addition to the allegations of direct evidence, Judge Dalton cites allegations of “circumstantial ‘plus factors’” that the plaintiffs claim “show unlawful horizontal market division: by owning thirty percent of Defendant, Adventist has a motive not too compete. Adventist has two seats on Defendant’s Board…which allows opportunities to discuss division…; Defendant’s market structure, created through intimidation tactics, makes avoiding competition by Adventist more likely; Adventist likely chose to partially own defendant because empirical evidence shows that approach to be more beneficial to increasing prices; and, despite quickly expanding throughout Florida, Adventist has not purchased hospitals in Florida.”
The SAC contains five causes of action: “ (1) monopolization of the Brevard acute care relevant market; (2) horizontal market division in restraint of trade [ Sherman Act Sec. 1]; (3) restraint of trade via sale of partial ownership (Clayton Act Section 7); (4) exclusive dealing in restraint of trade; and (5) violation of the Florida Antitrust Act…” The motion to dismiss is directed to the second and third causes of action.
As to the second cause of action, Judge Dalton points to many of the allegations of “direct evidence” and concludes that the allegations, taken as true, are sufficient to withstand a motion to dismiss, quoting specifically the seminal 2007 Supreme Court opinion in Bell Atlantic Corp. v. Twombly. Accordingly, he denies the defendant’s motion to dismiss this cause of action.
Judge Dalton’s order dismisses the third cause of action with prejudice, stating Section 7 of the Clayton Act “only applies to the acquirer, not the acquired entity,” and citing authority applying this principle to a partially acquired entity such as Health First, Inc.
