Antitrust Law Daily Wrap Up, ANTITRUST—D. S.D.: Sioux Falls, ambulance company stipulate dismissal of conspiracy, monopoly claims, (May 14, 2015)

By Greg Hammond, J.D.

Med-Star Paramedic Ambulance, Inc. has agreed to dismiss its claims that the City of Sioux Falls and the Sioux Falls Regional Emergency Medical Services Authority violated the Sherman Act and South Dakota’s antitrust laws by entering into exclusive contracts with other ambulance companies, refusing to approve mutual aid agreements, and prohibiting Med-Star from performing ambulance services. The parties filed a stipulation to dismiss on May 7, 2015, and the federal district court in Pierre, South Dakota, dismissed the suit on May 11 (Med-Star Paramedic Ambulance, Inc. v. City of Sioux Falls, May 11, 2015, Lange, R.).

Med-Star filed suit against Sioux Falls in February 2015, alleging that the city refused to provide Med-Star with a license to provide any ambulance services within city limits.Sioux Falls allegedly entered into an exclusive contract with Rural/Metro Corp. for the provision of emergency and non-emergency ambulance services and transfers in 2007, without providing an opportunity for any other ambulance services. The city additionally did not approve two of Med-Star’s mutual aid agreements with Rural/Metro, under which Med-Star could have assisted Rural-Metro for the provision of overflow or back-up ambulance services. Lastly, the complaint alleged that Sioux Falls intended to award an exclusive contract in May 2015 with Paramedics Plus.

Med-Star alleged that the defendants’ participation in the enforcement or anticipated enforcement of exclusive contracts; defendants’ refusal to approve two mutual aid agreements; and/or defendants’ prohibition against Med-Star performing ambulance services are unlawful restraints of trade and/or commerce under the Sherman Act and South Dakota’s antitrust laws. In addition, Med-Star alleges that the defendants’ actions constitute an unlawful monopolization and/or attempt to monopolize. Med-Star also brought claims for violation of substantive due process, violation of the equal protection clause, conspiracy to deprive Med-Star of its constitutional rights, and tortious interference with a business relationship, business expectancy, and contractual relations.

Sioux Falls moved to dismiss the complaint in March 2015, arguing that Med-Star lacked standing to assert antitrust claims because it did not suffer an antitrust injury, and that the claims were barred by the state action immunity doctrine. The city also argued that there were no facts that gave rise to a “speculative right to relief” on the substantive due process, equal protection, and civil conspiracy claims, and the tortious interference claims failed because Med-Star failed to allege any improper act of interference. Finally, Sioux Falls argued that Med-Star’s claims were time-barred by the applicable statute of limitations.

“The courts have now confirmed the legality of the City’s highly competitive and objective selection process to choose the next ambulance service provider within our community,” stated Public Health Director Jill Franken. “That selection process led to a recommendation from the medical community and the ultimate selection of Paramedics Plus as the City’s ambulance provider. We are looking forward to the high quality services they will bring to our community.”

The case number is 4:15-CV-04045-RAL.

Attorneys: Daniel R. Fritz, II (Lindquist & Vennum LLP) for Med-Star Paramedic Ambulance, Inc. Melissa R. Jelen (Cadwell, Sanford, Deibert & Garry, LLP) for City of Sioux Falls and Sioux Falls Regional Emergency Medical Services Authority.

Companies: Med-Star Paramedic Ambulance, Inc.; City of Sioux Falls; Sioux Falls Regional Emergency Medical Services Authority

Cases: Antitrust SouthDakotaNews