Antitrust Law Daily Wrap Up, ANTITRUST—D. Colo.: Court awards Vail Health attorney fees in long-running Vail rehab dispute, (Jun 12, 2026)

By Christopher M. Longo, J.D.

The court found that counsel for Plaintiffs Sports Rehab Consulting LLC and Lindsay Winninger “engaged in vexatious behavior,” and were “the primary source of the acrimony throughout [the] action.”

A federal district court in Colorado has partially granted Vail Health’s motion for attorneys’ fees in its long-running antitrust dispute with Sports Rehab Consulting LLC and Lindsay Winninger over the physical therapy market in the Vail Valley. Vail Health, which moved for fees after earlier receiving summary judgment all claims, contended that it incurred attorney fees due to Sports Rehab’s counsel’s “bad conduct throughout this case,” which consisted of “repeated threats of criminal prosecution,” “belittling comments made to defense counsel,” and counsels’ sixth motion to compel and untimely discovery requests. The court concluded that the attorneys, Alan Kildow and Sonya Braunschweig, engaged in “vexatious and bad faith conduct,” and awarded Vail Health $386,474.88 in attorney fees, to be paid by Kildow and Braunschweig rather than by Sports Rehab or Winninger (Sports Rehab Consulting LLC v. Vail Clinic, Inc., No. 1:26-cr-00169-JRR (D. Colo. Jun. 11, 2026)).

Background. In this long-pending matter, Sports Rehab alleged that Vail Clinic, Inc. (Vail Health), a nonprofit community health system, violated Section 2 of the Sherman Act by monopolizing or attempting to monopolize the physical therapy (PT) market in the region of Vail Valley, Colorado between 2012 and 2020.

In September 2025, the district court granted summary judgment to Vail Health. After prevailing on the merits, Vail Health sought $2,267,218.35 in attorney fees and additional equitable relief, about one-fourth of the fees Vail Health had incurred.

Plaintiffs’ counsel’s conduct. Vail Health alleged that Sports Rehab and Winninger’s counsel repeatedly accused Vail Health of criminal conduct, and threatened criminal prosecution. Vail Health also alleged that Plaintiffs’ counsel made “belittling comments” to defense counsel, “accusing them of using ‘weasel-words,’ being ‘nasty,’ having a ‘weak psyche,’ being ‘shitty,’ and referring to female counsel as ‘my dear.’” The motion further alleged “improper communications with Vail Health’s employees and board members,” “refus[ed] to enter a scheduling order,” filed a sixth motion to compel, and failed to act in good faith during settlement proceedings.

Criminal accusations and crime-fraud threats. Vail Health argued that “[t]hroughout Arnold & Porter’s involvement in [the] case,” Sport’s Rehab and Winninger’s counsel consistently alleged that “Vail Health was engaging in ‘criminal activity’ which would serve as the basis for reports to state and federal authorities and additional lawsuits unless Vail Health agreed to Plaintiffs’ demands.” The court quoted an email by Braunschweig in which she alleged that Vail Health concealed evidence and that this conduct “demonstrate[d] criminal activity,” that there was “ample evidence that crimes and fraud have been committed by Vail Health,” and that in his own email, Kildow indicated that “Vail Health's concealment of evidence and abuse of the discovery process…w[ould] be the subject of a motion seeking sanctions.” Vail Health argued that this “chorus of accusations of alleged criminal or sanctionable conduct” caused it to spend “at least $70,761.54” to prepare to respond to a crime-fraud motion.

The court stated that it “d[id] not see a good faith basis for Plaintiffs’ counsel to have repeatedly threatened Vail Health that Plaintiffs intended to file a crime-fraud motion,” and that “Plaintiffs identified nothing in 2023—and identify nothing now—suggesting that Vail Health or its attorneys engaged in communications for the purpose of furthering a crime or fraud.” The court added that in his declaration, Kildow supported his crime-fraud theory with “speculation and innuendo—certainly nothing close to a ‘foundation in fact,’ as is required to assert a plausible crime-fraud motion.” The court found counsels’ conduct to be “vexatious and unreasonable.”

However, the court reduced the amount Vail Health sought for this category. Vail Health asked for $70,761.54, much of it for researching and preparing to oppose a crime-fraud motion that was never filed. The court said it understood why Vail Health took the threats of the impending motion seriously, but it found that prudent counsel it did not believe that “prudent counsel would have spent $70,761.54 largely researching caselaw and formulating strategy before the motion was actually before them.”

Discourteous comments. Vail Health argued that it was entitled to the “unprofessional and belittling comments Kildow made towards defense counsel and Vail Health employees and board members,” and also noted that Kildow had made “disparaging comments” about Judge Gallagher, the magistrate who presided over discovery matters from July 2019 through April 2023. The court stated that Kildow’s remarks about Judge Gallagher were reprehensible—“which included statements that Judge Gallagher didn’t understand antitrust law and was biased in Vail Health’s favor”—and said his use of “my dear” toward female opposing counsel was “sexist and wholly unacceptable.” But because Vail Health did not tie a specific fee amount to those comments, the court did not impose a separate monetary sanction for them and instead considered them as part of the overall pattern of conduct.

Scheduling Order Dispute. Vail Health argued that Sport’s Rehab and Winninger’s counsel “fail[ed] to engage in good faith negotiations regarding the entering of a new scheduling order,” and that they would only agree to a scheduling order if Vail Health “acquiesce[d] to unreasonable demands and conditions as a quid pro quo,” including agreeing not to file summary judgment motions, “forego[ing] conducting expert depositions, and forego[ing] filing Daubert motions.” The court said those demands were unreasonable, and noted that requiting a party to “sacrifice its right to file a summary judgment motion … in exchange for an agreement by the adverse party to set a deadline to file such a motion, cannot in any way be justified as a legitimate, good faith litigation tactic.” The court held that counsels’ “bad faith and vexatious conduct” warranted sanctions “under the Court’s inherent authority and section 1927.”

Sixth Motion to Compel. Another sanctions category involved Sports Rehab and Winninger’s sixth motion to compel, filed in July 2023, seeking text messages from three nonparties. The court said that motion came long after the December 2021 close of fact discovery, and sought material that Vail Health did not possess or control. Vail Health argued that it “lacked the authority to produce the text messages of nonparties its counsel did not represent,” and sought $278,902.64 in fees. The Special Master had previously concluded that the motion was untimely and legally deficient, and Judge Prose later declined to reopen discovery to pursue the text messages.

The court noted that Vail Health had even indicated it would not oppose subpoenas to the nonparties, and had, in fact, “encouraged Plaintiffs to reach out to the counsel of those nonparties, John McHugh, to obtain the texts of his clients.” Instead, the court found, Sport’s Rehab and Winninger’s counsel “evidently had no interest in resolving the issue amicably.” The court held that “sanctions under the Court’s inherent authority and section 1927 [were] appropriate.”

Settlement proceedings/“untimely discovery” requests. The court declined to award fees tied to the failed settlement conference and mediation because it found the record insufficient to show that Sports Rehab and Winninger or their counsel, “acted in bad faith during the mediation and settlement conference.” It also rejected Vail Health’s broad request for nearly $1.4 million tied to what Vail Health described as “untimely discovery” demands, finding that the motion did not adequately convince the court that Sports Rehab and Winninger’s counsels’ conduct resulted in the fees.

Fee Award and Allocation. After rejecting the settlement and untimely discovery-related fees, the court was left with $515,299.84 in fees tied to three categories: the criminal accusations and crime-fraud dispute, the scheduling-order dispute, and the sixth motion to compel. The court then reduced that amount by 25 percent, noting Arnold & Porter’s overstaffing, high hourly rates, and the need to do “rough justice” rather than engage in auditing. The final sanction award was $386,474.88. The court ordered Alan Kildow to pay 80 percent, or $309,179.90, and Sonya Braunschweig to pay 20 percent, or $77,294.98, by July 31, 2026.

The Case is No. 1:26-cr-00169-JRR.

Judge: Martínez, W.

Attorneys: Alan L. Kildow (Kildow & Braunschweig LLC) for Sports Rehab Consulting LLC. Colin Michael O'Brien (Arnold & Porter Kaye Scholer LLP) for Vail Clinic, Inc.

Companies: Sports Rehab Consulting LLC; Vail Clinic, Inc.

Cases: Antitrust ColoradoNews