Antitrust Law Daily Wrap Up, ANTITRUST—D. Colo.: Counterclaim defendant added in ambulatory surgery centers monopolization case, (Dec 29, 2015)

By Edward L. Puzzo, J.D.

In ongoing antitrust litigation between non-hospital ambulatory surgery centers and hospital systems and health insurers, the federal district court in Denver has permitted the joinder of an additional party as a counterclaim defendant, and denied plaintiffs/counterclaim defendants' motion to stay discovery (Kissing Camels Surgery Center, LLC v. Centura Health Corporation, December 22, 2015, Wang, N.).

In this ongoing antitrust action initiated four years ago, certain non-hospital ambulatory surgery centers (ASCs) in Colorado—Kissing Camels Surgery Center, Cherry Creek Surgery Center, Arapahoe Surgery Center and Hampden Surgery Center, LLC—had charged certain hospital systems and healthcare networks—HCA-HealthOne and Centura Health Corporation—their ambulatory surgery centers trade association—Colorado Ambulatory Surgery Center Association (CASCA)— and certain health insurers—Kaiser Foundation Health Plan, Anthem Blue Cross of Colorado, UnitedHealthcare of Colorado, Aetna—with anti-competitive conduct and attempted monopolization under the Sherman Act. The plaintiffs contended that hospital operators, in an effort to prevent competition from the ASCs, refused to sign transfer agreements with the plaintiffs, and participated in a conspiracy with health insurers to prevent physicians in their provider networks from referring patients to the plaintiffs’ facilities.

On February 13, 2014, the motions to dismiss of defendants CASCA, Aetna, Anthem, Audubon, and UnitedHealthcare were granted. Subsequently, plaintiffs were given leave to file a second amended complaint, and the previously dismissed defendants moved to dismiss plaintiffs' second amended complaint. On June 16, 2015, those motions were denied, but they were given extensions of time to respond to the second amended complaint. When UnitedHealthcare filed its answer, it included counterclaims against the plaintiffs as well as against SurgCenter of Bel Air.

Joinder. At this juncture in the ongoing litigation, defendant UnitedHealthcare of Colorado moved for an order joining SurgCenter as a counterclaim defendant.

Plaintiffs did not dispute that SurgCenter met the requirements to be joined under Fed. R. Civ. P. 20, but argued that they would be unduly prejudiced by joinder. The court opined that, due to the unique procedural history of the case, joinder would not cause undue prejudice, as all parties contemplated further discovery as a consequence of allowing the second amended complaint. This was UnitedHealthcare's first opportunity to assert counterclaims, the court stated, and to prohibit their assertion would be inequitable.

As to plaintiffs' further argument against joinder-that the proposed counterclaims would be futile—the court ruled that those arguments were best raised in their already-filed motion to dismiss the counterclaims rather than in this argument over joinder.

Stay of Discovery. Plaintiffs/counterclaim defendants moved to stay discovery pending the court's disposition of its motion to dismiss the counterclaims. But the court noted that the litigation had been pending for over four years, and it was unclear whether all of the counterclaims would be dismissed. Even if they were, the court opined, the previously dismissed defendants were likely to seek some supplemental discovery based upon their lack of prior discovery. It would be speculative as to what efficiencies, if any, could be gained from staying discovery.

Thus the court granted UnitedHealthcare's motion to join SurgCenter as a counterclaim defendant, and denied the plaintiffs/counterclaim defendants' motion to stay discovery.

The case is Civil Action No. 1:12-cv-03012-WJM-NYW.

Attorneys: Joe Ramon Whatley, Jr. (Whatley Kallas, LLP) for Kissing Camels Surgery Center LLC, Arapahoe Surgery Center LLC, Hampden Surgery Center LLC and Cherry Creek Surgery Center LLC. Melvin B. Sabey (Hall Render Killian Heath & Lyman, PC) for Centura Health Corp. Kathryn A. Reilly (Wheeler Trigg O'Donnell, LLP) for Colorado Ambulatory Surgery Center Association, Inc. Laura M. Sturges (Gibson Dunn & Crutcher, LLP) for Aetna, Inc.

Companies: Kissing Camels Surgery Center LLC; Arapahoe Surgery Center LLC; Hampden Surgery Center LLC; Cherry Creek Surgery Center LLC; Centura Health Corp.; Colorado Ambulatory Surgery Center Association, Inc.; Aetna, Inc.

Cases: Antitrust ColoradoNews