Antitrust Law Daily Wrap Up, ANTITRUST—C.D. Ill.: Stay of discovery denied in dispute central Illinois hospitals, (May 7, 2014)

By Jeffrey May, J.D.

A magistrate judge in the federal district court in Peoria, Illinois, has denied OSF Healthcare System's motion to stay discovery in an antitrust action brought by rival hospital system Methodist Health Services Corporation pending a ruling on the defending hospital's motion for judgment on the pleadings. It was suggested that the parties reach an agreement to conduct only the least burdensome or expensive discovery while the dispositive motion was pending (Methodist Health Services Corp. v. OSF Healthcare System, May 6, 2014, Hawley, J.).

In the suit, Methodist alleges that OSF, which operates St. Francis Medical Center in Peoria, leveraged its size and status to force commercial health insurers to enter into exclusionary contracts to preclude those insurers from contracting with other hospitals and healthcare facilities. Methodist contended that OSF engaged in predatory and exclusionary conduct that reduced competition and raised prices for hospital services.

OSF simultaneously filed its motion to stay discovery and its motion for judgment on the pleadings. The court noted that whether to enter a stay of discovery upon the filing of a motion for judgment on the pleadings was determined by the facts of a particular case. Under the particular circumstances of this case, a stay was not warranted, the court concluded.

The fact that OSF delayed so long in filing its motion for judgment on the pleadings and in the meantime engaged in extensive discovery did not indicate good cause on its part to seek a stay of discovery, the court's view. OSF had vigorously engaged in discovery for over nine months, the court pointed out. In fact, just one month before filing the stay motion, OSF pursued a motion to compel discovery directed toward Methodist.

Further, OSF's motion for judgment on the pleadings did not raise threshold issues of standing, jurisdiction, or qualified immunity that often support a discovery stay, the court found. The issues raised by OSF were not as straightforward as the “typical” threshold issues so as to be susceptible to an early motion to dismiss.

The case is No. 13-1054.

Attorneys: Andrew R. Woltman (McGuire Woods LLP) for Methodist Health Services Corp. Alexander George Bomstein (Pepper Hamilton LLP) for OSF Healthcare System.

Companies: Methodist Health Services Corp.; OSF Healthcare System

Cases: Antitrust IllinoisNews