“The standard for a motion to amend is governed by the general principle that ‘cases should be tried on their merits rather than the technicalities of pleadings.’”
How later courts described this case
- “The standard for a motion to amend is governed by the general principle that ‘cases should be tried on their merits rather than the technicalities of pleadings.’”
Written by the judges who cited it.
The opinion
RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit I.O.P. 32.1(b)
File Name: 19a0078p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
THE MEDICAL CENTER AT ELIZABETH PLACE, LLC, ┐
Plaintiff-Appellant, │
│
> No. 17-3863
v. │
│
│
ATRIUM HEALTH SYSTEM, et al., │
Defendants-Appellees. │
┘
Appeal from the United States District Court
for the Southern District of Ohio at Dayton.
No. 3:12-cv-00026—Walter H. Rice, District Judge.
Argued: April 25, 2018
Decided and Filed: April 25, 2019
Before: BATCHELDER, SUTTON, and WHITE, Circuit Judges.
_________________
COUNSEL
ARGUED: Richard A. Ripley, RUYAK CHERIAN LLP, Washington, D.C., for Appellant.
Shay Dvoretzky, JONES DAY, Washington, D.C., for Appellees. ON BRIEF: Richard A.
Ripley, Brittany V. Ruyak, RUYAK CHERIAN LLP, Washington, D.C., James A. Dyer, Patrick
O’Shaughnessy, SEBALY, SHILLITO + DYER, Dayton, Ohio, for Appellant. Shay Dvoretzky,
Robert Stander, JONES DAY, Washington, D.C., Melinda K. Burton, FARUKI IRELAND COX
RHINEHART & DUSING P.L.L., Dayton, Ohio, Thomas Demitrack, JONES DAY, Cleveland,
Ohio, for Appellees.
BATCHELDER, J., delivered the opinion of the court in which SUTTON, J., joined, and
WHITE J., joined in part. SUTTON, J. (pp. 24–26), delivered a separate concurring opinion.
WHITE, J. (pp. 27–30), delivered a separate opinion dissenting in part.
No. 17-3863 Med. Center at Elizabeth Pl. v. Atrium Health Sys., et al. Page 2
_________________
OPINION
_________________
ALICE M. BATCHELDER, Circuit Judge. This is a case about competition among
hospitals in Dayton, Ohio. When Medical Center at Elizabeth Place, LLC (“MCEP”) opened in
2006, it was an acute care, for-profit hospital owned by 60 physicians and one corporate
shareholder. By 2009, MCEP’s existence as a physician-owned enterprise came to an end when
it sold an ownership interest to Kettering Health Network, a competitor in the Dayton healthcare
market. MCEP alleges that it failed because of the anticompetitive actions of Premier Health
Partners (“Premier”), a dominant healthcare network in the Dayton area. MCEP alleges that
Premier contracted with area physicians and payers (insurers and managed-care plan providers)
on the condition that they did not do business with MCEP. Because payers provide patients and
physicians provide services, it is difficult to run a viable hospital when one, let alone both, is in
short supply.
So, whether by licit or illicit means, Premier won that competition. In this litigation, the
parties competed again. This time, MCEP pushed all its chips to the center of the table on one
hand of cards: a claim that Premier had engaged in conduct so devoid of benefit to the market as
to be per se illegal under the Sherman Act. Such claims apply only to a limited range of conduct.
To be per se illegal, a defendant’s conduct has to be so obviously anticompetitive that it has no
plausibly procompetitive features—a high hurdle for plaintiffs claiming restraint of trade. Once
they clear it, however, plaintiffs receive a corresponding reward: they need not undergo the often
arduous process of showing that the challenged conduct was anticompetitive. As one of our
sister circuits has described it, “[t]he per se rule is the trump card of antitrust law. When an
antitrust plaintiff successfully plays it, he need only tally his score.” United States v. Realty
Multi-List, Inc., 629 F.2d 1351, 1362-63 (5th Cir. 1980).1
1The other approach to determining whether a restraint of trade is “unreasonable” is the “rule of reason.”
In re Southeastern Milk Antitrust Litigation, 739 F.3d 262, 270 (6th Cir. 2014). “If the rule of reason is used,
plaintiffs must additionally show that the restraint produced anticompetitive effects within the relevant product and
geographic markets, while the per se rule is reserved for restraints that are so clearly unreasonable that their
anticompetitive effects within geographic and product markets are inferred.” Id.
No. 17-3863 Med. Center at Elizabeth Pl. v. Atrium Health Sys., et al. Page 3
The question before us is whether MCEP successfully played its hand. The district court
from which MCEP appeals found that MCEP’s per se claim failed because the record showed
that Premier’s contracts with payers and physicians had plausibly procompetitive features. That
holding says nothing about whether Premier’s conduct was on balance procompetitive or
anticompetitive. This opinion likewise reaches no decision on the ultimate economic merits of
Premier’s actions because to do so would go beyond our charge. We must address only the
question of per se illegality, and as to that, we agree with the district court that MCEP failed to
meet the high standard required for per se claims. We AFFIRM.
I.
MCEP alleges a conspiracy between the Premier hospitals that implicates, without
naming as defendants, payers and physicians in the Dayton area. During the course of this multi-
year litigation, various legal issues raised in this case have been ruled on by U.S. District Judge
Black, a Sixth Circuit appellate panel, and then, after the matter was remanded and Judge Black
recused himself, District Judge Rice, who granted the motion for summary judgment presently
before us.
Factual Background
MCEP is an acute-care hospital located in Dayton, Ohio, that opened in September 2006
with 60 physician owners and one corporate shareholder, Regent Surgical Health. Defendants in
this case comprise four hospitals—Miami Valley Hospital (owned by MedAmerica Health),
Good Samaritan Hospital (owned by Catholic Health Initiatives), Atrium Medical Center (owned
by Atrium Health Systems), and Upper Valley Medical Center—as well as a joint operating
company, Premier Health Partners (“Premier”), formed through a joint operating agreement
among those four hospitals.2 This joint operating agreement merged some of the hospitals’
healthcare functions but allowed them to retain control of others. Med. Ctr. at Elizabeth Place v.
Atrium Health Sys. (“MCEP I”), 817 F.3d 934, 936-37 (6th Cir. 2016). Hospital Defendants
2In this opinion, we refer to the four hospitals and the joint operating company collectively as “Hospital
Defendants” except where otherwise noted.
No. 17-3863 Med. Center at Elizabeth Pl. v. Atrium Health Sys., et al. Page 4
comprise a dominant healthcare network in the Dayton area, with more than a 55% share of
Dayton’s inpatient surgical services.
In spite of its dominant market position, the record leaves no doubt that Hospital
Defendants felt threatened by the possibility of MCEP’s presence in the Dayton medical market.
Five months before MCEP opened for business, Hospital Defendants held a board meeting at
which, “[b]y consensus, the Board supported management’s efforts” to oppose MCEP.
Executives from Premier told an MCEP shareholder that Hospital Defendants “would do
whatever they needed to do in order to stop [MCEP] from opening.”
Hospital Defendants’ underlying concern appears to have been that MCEP’s for-profit,
physician-owned model of healthcare would “bankrupt” their hospitals. A letter written by
primary care physicians (most of whom were affiliated with Hospital Defendants), addressed to
physicians in the Dayton healthcare market, expressed the dynamic they found worrisome:
There is currently widespread opposition among not-for-profit community
hospitals across the country toward physician owned inpatients [sic] hospitals
such as this. The physician investors are doing so for reasons of profitability.
MVH and GSH offer the range of services and the quality of care necessary to
enable surgeons to care for their patients. A physician owned specialty hospital
will take the better-insured and more profitable patients away from Premier
(along with ancillary services), leaving our local hospitals with only the more
complex and underinsured patients.
MCEP, for its part, wrote a “Dear Colleague” letter the next month, responding:
• While MCEP’s business model will “create a competitive environment to
deliver better and more efficient healthcare in Dayton,” it will not drive
hospitals out of business;
• MCEP “will not turn away patients on the basis of payor classification”;
• “Premier generates about $1 billion in revenues and currently has a cash
reserve of over $1 billion. As a non-profit, Premier pays no taxes. . . .
[MCEP] will have revenues that are a fraction of Premier’s, and our
physician-owned hospital will pay corporate, personal and property taxes”;
• “[C]omprehensive studies have confirmed that physician-run hospitals have
fewer medical errors, shorter turnover times, fewer infections and greater cost
efficiencies.”
No. 17-3863 Med. Center at Elizabeth Pl. v. Atrium Health Sys., et al. Page 5
Citing Hospital Defendants’ board-meeting consensus and their letter to physicians, MCEP
alleges that Hospital Defendants blocked MCEP from gaining meaningful access to the Dayton
market through a series of anticompetitive acts that amounted to a group boycott of MCEP. In
its Amended Complaint, MCEP made only a per se claim; MCEP made no claim under the rule
of reason. MCEP’s Amended Complaint alleges that Hospital Defendants:
• financially coerced commercial health insurers or managed care plan
providers (such as Anthem, UnitedHealthcare, Private Healthcare Systems,
etc.) “to refuse to permit [MCEP] full access to their respective networks”;
• financially coerced commercial health insurers or managed care plans to
reimburse MCEP at suppressed rates far below what Hospital Defendants
demanded for the same services;
• threatened retributive financial consequences to physicians who affiliated with
MCEP, and followed through on threats, “including terminating leases that the
physicians had with the Defendants for office space”;
• offered payments to physicians “who agreed not to work with or at [MCEP];
and who agreed to divest ownership in the Medical Center”;
• financially coerced physicians affiliated with Hospital Defendants from
“admitting patients to [MCEP] or referring patients to physicians who treated
patients at [MCEP]”; and
• deliberately poached physicians from MCEP who made up a
“disproportionately high number of admissions and then prohibited them from
admitting patients to [MCEP].”
Beyond these allegations, MCEP claims that, in the course of litigation, it discovered two
additional agreements that comprised part of the actionable group boycott.3 First, MCEP alleges
an agreement among the payers, induced by Hospital Defendants, not to offer MCEP a managed
care contract. Second, MCEP alleges an agreement among primary care physicians not to do
business with physicians who invested in MCEP (Hospital Defendants refer to this as the
“physician conspiracy”). Hospital Defendants describe the relationship of these agreements to
the original allegation using the metaphor of a hub, spoke, and rim. For these claims, the
Hospital Defendants form the hub; the vertical agreements the Hospital Defendants made with
3While there is some dispute about exactly when these claims were first brought to Hospital Defendants’
attention, there does not appear to be any dispute that the claims were raised (though the Complaint was not
amended to reflect the new claims) in MCEP’s opposition to Hospital Defendants’ initial motion for summary
judgment before Judge Black.
No. 17-3863 Med. Center at Elizabeth Pl. v. Atrium Health Sys., et al. Page 6
payers and physicians to exclude MCEP are the spokes; and the discrete agreements to boycott
MCEP, among the payers and among the physicians, are at the rim.
MCEP alleged only the “hub” agreement in its Amended Complaint. Hospital
Defendants argue that the “rim conspiracy” claim is a new, and untimely, Sherman Act Section 1
claim. MCEP, for its part, maintains that the additional agreements are simply evidence of the
overarching Section 1 conspiracy alleged in their Amended Complaint. Regardless of the exact
scope of the alleged boycott, MCEP alleges that one existed, that it was orchestrated by Hospital
Defendants, and that it prevented MCEP from succeeding as a going concern. MCEP claims
that, but for Hospital Defendants’ conduct, it would have been able to contract with payers and
physicians, which would have, in turn, increased competition in the Dayton healthcare market for
consumers of general inpatient surgical services.
Procedural History
This case was before Judge Black in Cincinnati from January 30, 2012, to April 19, 2017.
During that time, Judge Black granted Hospital Defendants’ motion for summary judgment on
the ground that the MCEP’s antitrust claim lacked the necessary plurality of actors.
On appeal to this court, a divided panel reversed Judge Black and rejected Hospital
Defendants’ motion for summary judgment. The panel held that a reasonable juror could find
that Premier comprised multiple competing entities and, therefore, could engage in concerted
action. MCEP I, 817 F.3d at 945. The panel did not address other issues raised before it, such as
whether MCEP’s additional rim conspiracy claims were untimely. Id. at 939.
On remand, Hospital Defendants moved again for summary judgment arguing, among
other things, that MCEP’s allegation of a per se antitrust violation failed as a matter of law.
Hospital Defendants argued that their alleged restraints on trade were plausibly procompetitive
which, they argued, is sufficient to defeat a per se antitrust claim. Because MCEP pleaded only a
per se claim, if Hospital Defendants had succeeded in this argument, the case would have been
dismissed. Judge Black denied Hospital Defendants’ renewed motion for summary judgment,
rejecting Hospital Defendants’ argument on two alternative bases: first, the claimed
procompetitive effects of the challenged conduct are subject to genuine dispute and are therefore
No. 17-3863 Med. Center at Elizabeth Pl. v. Atrium Health Sys., et al. Page 7
an improper basis for summary judgment, and second, Hospital Defendants “failed to evidence
that their joint contracting has any efficiency-enhancing purpose to which such an agreement is
necessary.” Med. Ctr. at Elizabeth Place v. Premier Health Partners, 2016 WL 9460026, at *5
(S.D. Ohio Oct. 6, 2016).
The case was set for trial. But on April 19, 2017, Judge Black recused himself and the
case was re-assigned to Judge Rice.4 Before Judge Rice, Hospital Defendants moved to “Clarify
Issues for Trial,” which all parties now agree amounted to a motion for reconsideration of Judge
Black’s October 6, 2016, order denying Hospital Defendants’ motion for summary judgment.
Less than a week before trial was set to begin, Judge Rice granted Hospital Defendants’ motion
for summary judgment and dismissed the Amended Complaint with prejudice. Judge Rice
declined to apply the “law of the case” doctrine, holding that Judge Black had clearly erred. He
found that while Judge Black correctly articulated the standard for a per se claim—that the
challenged conduct must have no plausible procompetitive effect—Judge Black failed to
acknowledge that the record showed that the Hospital Defendants’ challenged restraints had such
plausible procompetitive effects. Judge Rice also rejected MCEP’s argument that the Amended
Complaint implicitly included claims of rim conspiracies among the payers and among the
physicians—claims that all agree, if proven, would constitute a per se violation—explaining that
those claims were not contained in the Amended Complaint, that MCEP’s attempt to “wedge this
new claim into the existing allegations” was improper, and that the Hospital “Defendants would
be severely prejudiced if MCEP were permitted to amend its Complaint [again] at this late date.”
MCEP asks us to reverse Judge Rice’s decision granting Hospital Defendants’ motion for
summary judgment and to remand the case for trial.
II.
Summary judgment is warranted if, viewing the facts in the light most favorable to the
nonmoving party, no material fact is subject to a genuine dispute. Matsushita Elec. Indus. Co. v.
4Judge Black explained that, as a “Cincinnati duty-stationed Judge,” he could not preside over a trial in
Dayton.
No. 17-3863 Med. Center at Elizabeth Pl. v. Atrium Health Sys., et al. Page 8
Zenith Radio Corp., 475 U.S. 574, 585-87 (1986).5 We review de novo grants of summary
judgment. Expert Masonry, Inc. v. Boone Cty., 440 F.3d 336, 341 (6th Cir. 2006).
The parties dispute what de novo review should entail in this case. MCEP claims that
Judge Rice’s decision to not apply the “law of the case” doctrine was critical to his decision to
grant Hospital Defendants’ motion for summary judgment, and therefore we must review Judge
Rice’s “law of the case” decision de novo. According to MCEP, Judge Rice could reconsider
Judge Black’s denial of summary judgment only by finding that Judge Black clearly erred. So,
MCEP says, if Judge Rice was wrong that Judge Black committed clear error, then we must
reverse his “law of the case” judgment. For their part, Hospital Defendants argue that we should
simply review de novo Judge Rice’s substantive legal conclusions, separate and apart from Judge
Rice’s “law of the case” conclusion.
Ultimately, the Hospital Defendants have the better of this argument. First, we review
for abuse of discretion Judge Rice’s decision to reconsider Judge Black’s pre-transfer order. See
United States v. Todd, 920 F.2d 399, 403 (6th Cir. 1990). MCEP argues that abuse of discretion
is not the proper standard of review in a case transferred from one district court to another, in
which a pre-transfer ruling of one judge is altered by a post-transfer decision of a different judge.
We have foreclosed this argument by holding—in precisely the scenario identified by MCEP—
that abuse of discretion remains the proper standard of review. See Gillig v. Advanced
Cardiovascular Sys. Inc., 67 F.3d 586, 590 (6th Cir. 1995).6
5If a presumption against summary judgment in antitrust cases is ever appropriate, it is not here. This
circuit has applied a presumption against summary judgment in antitrust actions only when the case demanded a
fact-intensive inquiry under the rule of reason into issues of intent and motive. In re Southeastern Milk Antitrust
Litig., 739 F.3d 262, 270 (6th Cir. 2014) (quoting Expert Masonry, Inc. v. Boone Cty., 440 F.3d 336, 341 (6th Cir.
2006)); but see In re ATM Antitrust Litigation, 554 F. Supp. 2d 1003, 1010 (N. D. Cal. 2008) (opining that “any
presumption against the granting of summary judgment in complex antitrust cases has now disappeared”) (citation
omitted). Unlike in a rule of reason claim, in a per se claim intent and motive are not critical determinations. See
Phillip E. Areeda & Herbert Hovenkamp, Antitrust Law, ¶ 1910a (3rd ed. 2011).
6MCEP cites Jimkoski v. State Farm Mut. Auto. Ins. Co., 247 F. App’x 654 (6th Cir. 2007), for the
proposition that Judge Rice’s “law of the case” decision—specifically his finding that Judge Black committed clear
error—should be reviewed de novo. This misapplies Jimkoski. Read in context, Jimkoski simply acknowledged that
where a motion for reconsideration concerns summary judgment, we do not review the district court’s decision to
grant summary judgment for abuse of discretion. Id. at 659. To do so would insulate the district court’s merits
decision from the proper standard of review—de novo—simply because the motion that the district court ruled on
was a motion for reconsideration. That concern is not present in this case because we review for abuse of discretion
No. 17-3863 Med. Center at Elizabeth Pl. v. Atrium Health Sys., et al. Page 9
Second, we can find that Judge Rice abused his discretion in disturbing Judge Black’s
denial of summary judgment only if we have a “definite and firm conviction that [Judge Rice]
committed a clear error in judgment” such as “rel[ying] upon clearly erroneous factual findings,
appl[ying] the law improperly, or us[ing] an erroneous legal standard.” See Garner v. Cuyahoga
Cty. Juvenile Ct., 554 F.3d 624, 634 (6th Cir. 2009) (citation and quotation marks omitted). Of
these potential bases for abuse of discretion, MCEP argues only that Judge Rice improperly
applied the law, a question that we review de novo.
III.
MCEP’s raises two substantive claims on appeal. First, MCEP argues that the district
court erred by declining to apply the per se rule to Hospital Defendants’ allegedly
anticompetitive conduct. Second, MCEP argues that the district court erred in rejecting MCEP’s
“horizontal rim claims” due to untimeliness. Neither argument has merit.
A.
Per se claim
Section 1 of the Sherman Act states that “[e]very contract, combination in the form of
trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or
with foreign nations, is declared to be illegal.” 15 U.S.C. § 1. Because virtually every
agreement between parties has the potential to be considered a restraint of trade, antitrust
jurisprudence limits the range of restraints within the reach of antitrust law to agreements that
unreasonably restrain trade. In re Southeastern Milk Antitrust Litig., 739 F.3d 262, 270 (6th Cir.
2014). A restraint on trade may be found to be unreasonable per se or under the “rule of reason.”
Id. As MCEP makes only a per se claim, the question before us is whether Judge Rice erred in
granting Hospital Defendants’ motion for summary judgment on the grounds that Hospital
Defendants’ conduct falls outside per se illegality. Judges Black and Rice did not agree in their
answer to the underlying question and the prior Sixth Circuit panel declined to address it. MCEP
the decision to grant a motion for reconsideration (here that means we review the “law of the case” decision for
abuse of discretion). But we still review de novo the merits of the district court’s grant of summary judgment.
No. 17-3863 Med. Center at Elizabeth Pl. v. Atrium Health Sys., et al. Page 10
I, 817 F.3d at 939 (explaining that “[t]his appeal looks only at . . . whether defendants’ conduct is
the result of two or more entities acting in concert”).
Although a motion for summary judgment against a per se claim involves underlying
facts, the propriety of per se treatment “is normally a question of legal characterization that can
often be resolved by the judge on a motion . . . for summary judgment.” Stop & Shop
Supermarket Co. v. Blue Cross & Blue Shield, 373 F.3d 57, 61 (1st Cir. 2004). There is a
presumption against applying the per se rule “[u]nless the restraint falls squarely into a per se
category.” Southeastern Milk, 739 F.3d at 271. As explained in Expert Masonry, “a plaintiff
must satisfy each element of the per se . . . test[] . . . in its allegations in order to survive pre-trial
termination.” 440 F.3d at 344 (emphasis added). In Southeastern Milk, the court held that, even
where a factual dispute exists between the parties over whether a challenged restraint is
obviously anticompetitive—and therefore deserving of per se treatment—the defendants
producing “evidence that the agreement at issue may have had procompetitive
aspects . . . indicate[s] that this situation would not fall into the categories of per se unreasonable
restraints on trade.” 739 F.3d at 274. The court concluded that “[t]herefore, especially at the
summary judgment stage, this is not a ‘clear cut’ case of an obviously anticompetitive trade
restraint, and thus the district court was correct to apply the default standard of the rule of
reason.” Id. Hence, at the summary judgment phase, the right question to ask regarding per se
claims is whether the plaintiff has shown that the challenged restraint is so obviously
anticompetitive that it should be condemned as per se illegal. If, in spite of the plaintiff’s efforts,
the record indicates that the challenged restraint is plausibly procompetitive, then summary
judgment for the defendants is appropriate.
Per se claims against joint ventures
The question before us is further delineated by the fact that the challenged restraints exist
within a joint venture, which the Supreme Court has noted “hold the promise of increasing a
firm’s efficiency and enabling it to compete more effectively.” Copperweld Corp v. Indep. Tube
Corp., 467 U.S. 752, 768 (1984). At the same time, joint ventures often superficially resemble
horizontal concerted action because they involve horizontal competitors joining together to
restrain trade in some way, such as by coordinating prices. See Texaco Inc. v. Dagher, 547 U.S.
No. 17-3863 Med. Center at Elizabeth Pl. v. Atrium Health Sys., et al. Page 11
1, 4 (2006) (denying a per se horizontal price fixing claim brought by a plaintiff against a joint
venture created by Texaco and Shell Oil that unified their respective gasoline refining and
marketing operations in the western United States under two brands).
Because joint ventures often have procompetitive efficiencies, when a joint venture is
itself challenged as anticompetitive, that claim is reviewed under the rule of reason. Copperweld
Corp., 467 U.S. at 768. But when the conduct of the joint venture is challenged, the relationship
of the challenged conduct to the joint venture is analyzed to see if the conduct is reasonably
related to the joint venture’s procompetitive features (and therefore should be judged under the
rule of reason), or is a naked restraint lurking beneath the veneer of a legitimate joint venture
(and therefore deserves per se condemnation). See Nat. Collegiate Athletic Assn. v. Bd. of
Regents of Univ. of Okla., 468 U.S. 85, 113-15 (1984) (observing that a “naked” restraint, subject
to the per se rule, can exist even though it is contained in a joint venture agreement that is,
overall, quite competitive). The Supreme Court has distinguished three categories of restraints:
(1) restraints that are core to the joint venture’s efficiency enhancing purpose; (2) restraints that
are ancillary to the joint venture’s efficiency enhancing purpose; and (3) restraints that are
nakedly unrelated to the purpose of the joint venture. See Dagher, 547 U.S. at 7-8. Only the last
of these three justifies per se treatment. Id.
Core activity
Core activity is activity that is “integral to the running” of the venture. Id. at 7-8. In
Dagher, the Supreme Court rejected a per se claim against horizontal price-setting by two
competitors on the ground that the price-setting “involve[d] the core activity of the joint venture
itself.” Id. at 7.
Hospital Defendants claim that the challenged panel limitation—but not the other
challenged restraints—qualifies as core activity. They argue that because Dagher described
price setting as a core activity for the joint venture in that case, and because panel limitations are
a “pricing term” in Hospital Defendants’ contracts with payers, the panel limitations are “core
activity.”
No. 17-3863 Med. Center at Elizabeth Pl. v. Atrium Health Sys., et al. Page 12
This argument is not persuasive. Dagher does not stand for the general proposition that
restraints in contracts that are price related are always core activity for joint ventures. Dagher’s
holding was tailored to the specific joint venture before it. Id. at 5-6. This argument may be
dismissed simply by noting that the definition of “core activity” provided by Dagher, “integral to
the running” of the joint venture, id. at 7-8, cannot seriously be argued of Hospital Defendants’
panel limitations. Hospital Defendants continue to operate as a joint venture today even though
the panel limitation clauses have been removed from their contracts with payers.
Joint venture’s ancillary restraints
Restraints that are “ancillary to the legitimate and competitive purposes of the business
association” fall between “core” activity and “naked” restraints. Id. at 7. These are restraints by
a joint venture that are not “integral to the running” of the joint venture, id. at 8, “but may
contribute to the success of a cooperative venture.” Polk Bros., Inc. v. Forest City Enters., Inc.,
776 F.2d 185, 189 (7th Cir. 1985). A restraint is ancillary if it bears a reasonable relationship to
the joint venture’s success. See Major League Baseball Props., Inc. v. Salvino, 542 F.3d 290,
339-40 (2d Cir. 2008) (Sotomayor, J., concurring).
Predictably, the parties spill considerable ink contesting what counts as “reasonable.”
MCEP urges the panel to accept Judge Black’s version of the ancillary-restraints doctrine. We
decline to do so because Judge Black framed the ancillary-restraints inquiry incorrectly in two
ways: by applying too high a standard to determine what qualifies as “reasonable” and by
placing an evidentiary burden on Hospital Defendants to meet that standard. Judge Black
rejected Hospital Defendants’ argument that their restraints bore a reasonable relationship to the
joint venture’s success, holding that they “failed to evidence that their joint contracting has any
efficiency-enhancing purpose to which such an agreement is necessary.” Under this standard,
only restraints that are necessary to a joint venture’s efficiency-enhancing purposes qualify as
ancillary. Further, Judge Black held that Hospital Defendants must provide “undisputed proof”
that the restraint is necessary to prevent a per se claim from proceeding to trial.
Judge Black’s sole source of authority for this version of the ancillary-restraints doctrine
is a guidance document put out by the Federal Trade Commission and the United States
No. 17-3863 Med. Center at Elizabeth Pl. v. Atrium Health Sys., et al. Page 13
Department of Justice on collaboration among competitors. See Dep’t of Justice & FTC,
Antitrust Guidelines for Collaborations Among Competitors § 3.3, at 10-25 (Apr. 2000). But the
citation is of dubious relevance to the ancillary-restraints doctrine because the cited section deals
with joint ventures only under the rule of reason, not the per se rule.
To bolster Judge Black’s approach, MCEP cites NaBanco v. Visa U.S.A., Inc., 779 F.2d
592, 601 (11th Cir. 1986), and In re Sulfuric Acid Antitrust Litig., 743 F. Supp. 2d 827, 872
(N.D. Ill. 2010), for the proposition that an ancillary restraint must be necessary to achieve the
joint venture’s efficiency-enhancing purpose. NaBanco supports MCEP’s preferred formulation,
but In re Sulfuric Acid does not. In re Sulfuric Acid echoes the ancillary-restraints inquiry
articulated by the Seventh Circuit in Polk Brothers: “A court must ask whether an agreement
promoted enterprise and productivity at the time it was adopted. If it arguably did, then the court
must apply the Rule of Reason to make a more discriminating assessment.” 743 F. Supp. 2d at
872 (quoting Polk Bros., 776 F.2d at 189) (emphasis added).
Hospital Defendants, on the other hand, describe the standard as whether there exists a
plausible procompetitive rationale for the restraint.7 The Second, Seventh, Eighth, and Ninth
Circuits adopt this approach.8
Perhaps most destructive to MCEP’s argument is then-Judge Sotomayor’s concurrence in
MLB Properties, 542 F.3d at 338. Although MCEP cites that concurrence five times in its
briefing, Judge Sotomayor categorically rejected the position MCEP asks this court to adopt.
She described ancillary restraints as requiring “a reasonable procompetitive justification, related
to the efficiency-enhancing purposes of the joint venture.” Id. at 339 (emphasis added). Then, in
7Hospital Defendants, at one point, argue that the correct legal standard for determining whether a restraint
is ancillary or naked is whether the challenged restraint is “completely unrelated to the purpose of a lawful joint
venture.” But this mischaracterizes the ancillary-restraints doctrine. “The per se rule would collapse if every claim
of economies from restricting competition, however implausible, could be used to move a horizontal agreement not
to compete from the per se rule to the Rule of Reason category.” Gen. Leaseways, Inc. v. Nat'l Truck Leasing Ass'n,
744 F.2d 588, 595 (7th Cir. 1984).
8See MLB Properties, 542 F.3d at 338-39 (Sotomayor, J., concurring); Craftsmen Limo,, Inc. v. Ford Motor
Co., 363 F.3d 761, 776 (8th Cir. 2004) (“When determining whether to apply the rule of reason analysis to non-price
advertising restrictions related to product safety, the issue is not whether the restrictions were procompetitive, but
whether they could be.”); Paladin Assoc., Inc. v. Mont. Power Co., 328 F.3d 1145, 1154-55 (9th Cir. 2003) (“When
a defendant advances plausible arguments that a practice enhances overall efficiency and makes markets more
competitive, per se treatment is inappropriate, and the rule of reason applies.”); Polk Bros., 776 F.2d at 189.
No. 17-3863 Med. Center at Elizabeth Pl. v. Atrium Health Sys., et al. Page 14
defining what qualifies as “reasonable,” she expressly rejected the formulation that MCEP
argues here: “Under the ancillary restraints doctrine, a challenged restraint need not be essential,
but rather only reasonably ancillary to the legitimate cooperative aspects of the venture.” Id. at
340 n.11 (citations and internal quotation marks omitted); see also Polk Bros., 776 F.2d at 189
(explaining that a restraint is ancillary if it may promote the success of a joint venture).
The question of what relationship a challenged restraint must have to a joint venture in
order to qualify as ancillary splits the Circuits—the Eleventh Circuit on the one hand, and the
Second, Seventh, Eighth, and Ninth Circuits on the other. We follow the majority of Circuits
and hold that a joint venture’s restraint is ancillary and therefore inappropriate for per se
categorization when, viewed at the time it was adopted, the restraint “may contribute to the
success of a cooperative venture.” Polk Bros., 776 F.2d at 189. That approach better accords
with Supreme Court guidance. As the Ninth Circuit in Paladin Associates explained:
The Supreme Court generally has treated as per se illegal joint efforts by firms to
disadvantage a competitor by persuading customers to deny that competitor
relationships the competitor needs in the competitive struggle. But in these cases,
the practices generally were not justified by plausible arguments that the practices
enhanced overall efficiency and made markets more competitive.
328 F.3d at 1154-55. In a footnote that follows the court elaborated:
This is so because plausible arguments that a practice is procompetitive make us
unable to conclude “the likelihood of anticompetitive effects is clear and the
possibility of countervailing procompetitive effects is remote.”
Id. at 1155 n.8 (quoting Stationers, 472 U.S. at 294).
Paladin faithfully applies the Supreme Court’s holding in Stationers. Condemning as per
se illegal restraints that, while not necessary to achieving a joint venture’s efficiency-enhancing
purpose nevertheless plausibly relate to that purpose, would run counter to the Supreme Court’s
instruction to avoid applying the per se rule to situations where efficiencies are being served.
See Leegin Creative Leather Prods., Inc. v. PSKS, Inc., 551 U.S. 877, 894 (2007) (holding that
per se treatment is inappropriate where “it cannot be stated with any degree of confidence that
[the challenged restraint] ‘always or almost always tends to restrict competition and decrease
No. 17-3863 Med. Center at Elizabeth Pl. v. Atrium Health Sys., et al. Page 15
output’”) (quoting Business Electronics Corp. v. Sharp Electronics Corp., 485 U.S. 717, 723
(1988)).
MCEP’s second but related argument, which was adopted by Judge Black, is that
Hospital Defendants bear the burden of proving that a challenged restraint is procompetitive, and
therefore ancillary, because the question of the procompetitiveness of a restraint is
“quintessentially one of fact.” Judge Black’s inclination to defer to the fact finder has an
intuitive appeal in the summary judgment context. And it would be correct had MCEP brought a
claim under the rule of reason. See Perceptron, Inc. v. Sensor Adaptive Mach., Inc., 221 F.3d
913, 919 (6th Cir. 2000) (“[T]he rule of reason requires the factfinder to decide whether under all
the circumstances of the case the restrictive practice imposes an unreasonable restraint on
competition.”) (citation omitted). For a per se claim, however, Judge Black’s conclusion is
erroneous. Whether challenged conduct belongs in the per se category is a question of law. See
Ariz. v. Maricopa Cty. Med. Socy., 457 U.S. 332, 337 n.3, 354 (1982) (characterizing the per se
rule as a “rule of law”); MM Steel, L.P. v. JSW Steel (USA) Inc., 806 F.3d 835, 847 (5th Cir.
2015) (“The decision to analyze the conspiracy under a per se theory of liability is a question of
law that we review de novo.”). In Craftsmen Limousine, Inc. v. Ford Motor Co., the Eighth
Circuit likewise found that whether a given restraint falls within the per se category is a question
of law, citing a well-respected treatise on antitrust law for the proposition that “although a
court’s determination that the per se rule applies ‘might involve many fact questions, the
selection of a mode of analysis is entirely a question of law.’” 363 F.3d 761, 772 (8th Cir. 2004)
(citing Phillip E. Areeda & Herbert Hovenkamp, Antitrust Law, ¶ 1909b (1998)). And it is a
question of law where certain presumptions apply. As we explained in Expert Masonry, the
“plaintiff must satisfy each element of the per se . . . test[] . . . in its allegations in order to
survive pre-trial termination.” 440 F.3d at 344 (emphasis added). The Supreme Court has
likewise held that because a plaintiff failed to make a threshold showing that the challenged
conduct had the characteristics necessary to justify per se condemnation, rule of reason analysis
should apply instead. Stationers, 472 U.S. at 298 (“A plaintiff seeking application of the per se
rule must present a threshold case that the challenged activity falls into a category likely to have
predominantly anticompetitive effects.”).
No. 17-3863 Med. Center at Elizabeth Pl. v. Atrium Health Sys., et al. Page 16
If the record in this case reveals a plausible way in which the challenged restraints
contribute to the procompetitive efficiencies of the joint venture, then “the possibility of
countervailing procompetitive effects” is not remote and per se treatment is improper. Id. at 294.
What are Premier’s procompetitive efficiencies? The joint operating agreement of Hospital
Defendants’ joint venture, Premier, states the following goals:
(1) To provide a broad scope and a continuum of health care services with a focus
upon community health benefit.
(2) To improve cost effectiveness and efficiencies in the delivery of health care
services.
(3) To increase the quality of health care services in the greater Miami Valley
Region.
(4) To integrate physicians and other health care providers with the JOC Network.
(5) To have the capacity to assume and manage financial risk.
(6) To improve the health status of the greater Miami Valley Region.
We analyze Hospital Defendants’ challenged restraints in light of these goals.9
MCEP challenges two kinds of conduct on the part of Hospital Defendants. First, MCEP
argues that Hospital Defendants restrained trade through “panel limitations,” wherein Hospital
Defendants stipulated to payers that if they added MCEP to their networks, Hospital Defendants
would be able to renegotiate prices. Second, MCEP alleges that Hospital Defendants took direct
concerted action against MCEP by cutting off patient referrals to MCEP-affiliated physicians,
evicting MCEP-affiliated physicians from office space owned by Hospital Defendants, and
agreeing with third parties to refuse to deal with MCEP-affiliated physicians.
Panel limitations. Courts have found such restraints of trade supported by
procompetitive justifications. Stop & Shop Supermarket Co v. Blue Cross & Blue Shield, 373
F.3d 57, 62 (1st Cir. 2004) (finding that closed networks can allow payers to reduce customer
premiums because providers will exchange better rates for guaranteed volume). Likewise in
9The challenged conduct evaluated in this section is limited to MCEP’s claim of illegal concerted action
among the Hospital Defendants, not the additional “rim conspiracy” claims. The reason for this is that we conclude
in the next section that Judge Rice did not abuse his discretion by ruling that MCEP’s effort to plead those claims
was untimely.
No. 17-3863 Med. Center at Elizabeth Pl. v. Atrium Health Sys., et al. Page 17
Methodist Health Servs. Corp. v. OSF Healthcare Sys., where the Seventh Circuit addressed
panel limitations as a mere variant on the accepted restraint of exclusive dealing arrangements:
But what is more common than exclusive dealing? It is illustrated by
requirements contracts, which are common, and legal, and obligate a buyer to
purchase all, or a substantial portion of, its requirements of specific goods or
services from one supplier. [The Hospital Defendants’] deals with the health
insurance companies are a form of requirements contract, for the deals require the
companies to limit the network of providers from which they obtain the health
care that their insurance contracts obligate them to obtain for their insureds. And
an insurance company may get better rates from a hospital in exchange for
agreeing to an exclusive contract, as exclusivity will drive a higher volume of
business to the hospital.
859 F.3d 408, 410 (7th Cir. 2017).
MCEP claims that Hospital Defendants’ argument that panel limitations help ensure
volume is a pretext. In support of this claim, MCEP points to evidence showing that Premier’s
contract with insurer Aetna had a volume-based discount that automatically lowered Premier’s
rates when billing volume increased past certain benchmarks. Thus, even without panel
limitations, Hospital Defendants had financially incentivized insurers to maintain a high volume
of patients getting services from Hospital Defendants. To MCEP, this evidence reveals that the
only possible purpose of the panel limitation in Hospital Defendants’ contract with Aetna was
“purely punitive.”
We are not persuaded. A panel limitation and a price schedule are two distinct methods
directed toward the common goal of keeping patients (customers) coming through the doors. A
pricing schedule is a discount that incentivizes payers to keep volume up. A panel limitation,
meanwhile, forces payers to confront the risk of renegotiating their contract with Hospital
Defendants if they choose to send their insureds (customers) to a competing provider. Moreover,
it is plausible that Hospital Defendants would deploy a “belt and suspenders” approach to a
matter as crucial for a hospital system as maintaining patient (customer) volume. It is plausible
that panel limitations, by lowering the cost of Hospital Defendants’ services, contribute to the
efficiency-enhancing purposes of the joint venture, specifically improving “cost effectiveness
and efficiencies in the delivery of health care services.”
No. 17-3863 Med. Center at Elizabeth Pl. v. Atrium Health Sys., et al. Page 18
Concerted action regarding physicians. MCEP’s claims concerning Hospital
Defendants’ direct concerted action toward physicians can be divided into two categories:
(1) threatened loss of patient referrals; and (2) non-compete agreements.
1. Threatened loss of patient referrals10
This alleged restraint centers around evidence found in a letter sent by Hospital
Defendants to Dayton-area doctors informing them of Hospital Defendants’ opposition to
MCEP. The letter, signed by 94 primary care physicians, discusses the consequences that
MCEP’s presence could have on the Dayton healthcare market. The primary concern expressed
in the letter was that the profit-driven MCEP “will take the better insured and more profitable
patients away from Premier” and leave “local hospitals with only the more complex and
underinsured patients.” At the conclusion of the letter, the physicians wrote:
We, the primary care network of physicians for Premier, strongly oppose
[MCEP]. We believe it will have only negative impacts on our community, our
hospitals and our network. We do not support the physicians who invest in these
inpatient hospitals. We do look forward, however, to our continued efforts to
work with the specialists of our hospital medical staffs and do our part within
Premier to continue to improve the delivery of cost-effective, highest quality
healthcare to the people of our community.
MCEP claims that doctors who signed the letter “understood [it] to mean that signatories would
stop referring patients to anyone who invested in MCEP.”
Hospital Defendants argue that the letter, in expressing the opinion of Premier and its
affiliated physicians, does not constitute a restraint, and therefore cannot qualify as illegal
conduct under antitrust laws. They are right. In Am. Council of Podiatrists v. Am. Bd. of
10MCEP also argues that Hospital Defendants waived the right to move for summary judgment on this
theory of liability because they failed to argue before Judge Black that their direct concerted action should be
viewed under the rule of reason. Likely, MCEP intends to say that Hospital Defendants’ forfeited the argument.
“Whereas forfeiture is the failure to make the timely assertion of a right, waiver is the intentional relinquishment or
abandonment of a known right.” United States v. Olano, 507 U.S. 725, 733 (1993). Under forfeiture doctrine,
“parties are not limited to the precise arguments they made below.” Yee v. Escondido, 503 U.S. 519, 534 (1992). At
worst, MCEP is claiming that Hospital Defendants are making a “new argument to support what has been [their]
consistent claim.” Lebron v. Natl’l R.R. Passenger Corp., 513 U.S. 374, 379 (1995). Hospital Defendants did not
forfeit the right to move for summary judgment on MCEP’s claim that Hospital Defendants’ direct concerted action
is per se illegal because Hospital Defendants have consistently argued that MCEP’s per se claim does not apply to
the challenged conduct.
No. 17-3863 Med. Center at Elizabeth Pl. v. Atrium Health Sys., et al. Page 19
Podiatric Surgery, Inc., we held that, in the absence of a showing by the plaintiff that allegedly
anticompetitive communication was (1) “false” and (2) “difficult or costly for the plaintiff to
counter,” we would apply a presumption that speech has “de minimis effect on competition.”
323 F.3d 366, 370-72 (6th Cir. 2003). MCEP’s claim fails under both of these prongs. MCEP
has not shown that Hospital Defendants’ “Dear Physician” letter was untrue, and MCEP
countered the “Dear Physician” letter, without any apparent difficulty, with a “Dear Colleague”
letter of its own.
2. Non-compete agreements
MCEP claims that Hospital Defendants terminated the leases of multiple MCEP-affiliated
doctors who rented space in Hospital Defendants’ hospitals. Judge Rice rejected this argument
on the grounds that Hospital Defendants have a legitimate interest as a joint venture in
preventing free riding by physicians who will reap the benefits of training and convenient office
space at their hospitals and “then refer their patients elsewhere or invest in other hospitals.”
Hospital Defendants had a plausible concern that, without these contracts, physicians who
invested in MCEP could rent office space at a Premier-associated hospital, free ride on the
reputation and facilities of that hospital, and then refer patients out to MCEP. Preventing such a
misalignment of incentives is plausibly related to Hospital Defendants’ goal of “integrat[ing]
physicians and other health care providers with the JOC Network.”
MCEP also alleges that Hospital Defendants’ non-compete agreements with physicians in
the Dayton area qualify as concerted conduct subject to per se condemnation. Hospital
Defendant Good Samaritan purchased the Dayton Heart Hospital in 2008. As characterized by
MCEP, a condition of the purchase by Good Samaritan Hospital was that individual owners of
Dayton Heart Hospital were paid in full only if they agreed “(i) not to invest in MCEP, and (ii) if
they already owned shares, they would divest if MCEP began to offer cardiac services” over the
next five years. MCEP cites no case law holding that vertical non-compete contracts entered into
by joint ventures qualify as conduct that is anticompetitive per se.11 And this circuit, as well as
11Instead MCEP cites to E. States Retail Lumber Dealers’ Assoc. v. United States, 234 U.S. 600 (1914),
and United States v. Coop. Theatres of Ohio, Inc., 845 F.2d 1367, 1373 (6th Cir. 1988) (per curiam). Neither case
No. 17-3863 Med. Center at Elizabeth Pl. v. Atrium Health Sys., et al. Page 20
the common law,12 have long recognized that “[l]egitimate reasons exist to uphold
noncompetition covenants even though by nature they necessarily restrain trade to some degree.”
Perceptron, Inc., 221 F.3d at 919 (quoting Lektro-Vend Corp. v. Vendo Co., 660 F.2d 255, 265
(7th Cir. 1981)). It is MCEP’s burden to show that per se treatment of allegedly anticompetitive
conduct is justified. Stationers, 472 U.S. at 298. In this context, MCEP’s failure to produce any
on-point precedent is damning, as we refuse to apply the per se rule in the absence of judicial
experience with the challenged restraint. See Broad. Music, Inc., v. Columbia Broad. Sys. Inc.,
441 U.S. 1, 9 (1979) (concluding that “it is only after considerable experience with certain
business relationships that courts classify them as per se violations”) (quoting United States v.
Topco Assocs., Inc., 405 U.S. 596, 607-08 (1972)).
MCEP’s other arguments in support of its per se claim. First, MCEP argues that we are
bound by precedent to find that Hospital Defendants’ restraints qualify for per se treatment. To
that end, MCEP cites to Klor's, Inc. v. Broadway-Hale Stores, Inc., 359 U.S. 207 (1959). Klor’s,
however, did not concern a legitimate joint venture, so its approach to alleged horizontal
restraints does not bear on the legal framework established above. Id. at 208-09. MCEP also
argues that Com-Tel, Inc. v. DuKane Corp., 669 F.2d 404 (6th Cir. 1982), which followed Klor’s
approach, controls. But Com-Tel, like Klor’s, does not contain ancillary-restraints analysis
because it does not concern a joint venture.
Second, MCEP argues that we are bound by “law of the case” to find in its favor because,
in MCEP I, we implicitly rejected a number of the arguments that Hospital Defendants make
here. We need not guess at the contours of MCEP I’s holding—we said expressly that it
concerned “only . . . whether defendants’ conduct is the result of two or more entities acting in
concerns joint ventures or the ancillary-restraints doctrine. Coop. Theatres of Ohio is inapposite, as it concerns
market allocation rather than a group boycott. 845 F.2d at 1368.
12“It must have been obvious from the beginning that the flat ban against such restraints of trade covered
more than the rationale of the rule required. The rule might prevent desirable transfers of property. The most
valuable asset of a business might be the good will of the public toward its owner. Should he wish to sell the
business the owner could not get a price reflecting the asset of good will or the true going concern value of his
business unless he could promise the purchaser not to return to compete with the business sold.” Robert Bork,
Ancillary Restraints & the Sherman Act, 15 ABA Section of Antitrust Law Proceedings 211, 213 (1959) (footnote
omitted).
No. 17-3863 Med. Center at Elizabeth Pl. v. Atrium Health Sys., et al. Page 21
concert or whether defendants, based on their participation in the joint operating agreement,
function as a single entity in the market place.” MCEP I, 817 F.3d at 939.
B.
Rim Conspiracy claims
MCEP argues that Judge Rice erred in dismissing its Section 1 claims of concerted action
based on “rim” conspiracies—that is, agreements (induced by Hospital Defendants) to boycott
MCEP made among the payers as well as independent physicians. The rim conspiracies are
distinct from the alleged conspiracy among the Hospital Defendants. MCEP argues that Hospital
Defendants orchestrated two additional conspiracies—one among payers to collectively “hold
the line” against MCEP by excluding it from their market, the other a “physician conspiracy” in
which Hospital Defendants induced Dayton-area physicians to collectively refuse to refer
patients to MCEP. As Judge Rice noted, this issue is significant. Hospital Defendants
“conceded that, if MCEP could prove that the payers agreed among themselves not to offer
MCEP a managed care contract and that Premier orchestrated that agreement, the per se rule
would apply to that claim.” If the district court erred by precluding these rim conspiracy claims,
then even if Judge Rice was correct that MCEP has no triable per se claim of concerted action
among Hospital Defendants (the “hub” claim), the case would need to be remanded and set for
trial on MCEP’s rim conspiracy claim.
MCEP argues that the rim conspiracy claims are not new. Instead, MCEP characterizes
the rim agreements as additional evidence found through discovery that supports the overarching
group boycott claim advanced in the Amended Complaint. MCEP undermines that position,
however, by claiming simultaneously that “[t]he payer agreement and physician agreement . . .
represent additional horizontal concerted action that independently requires imposition of the per
se rule whether the jury finds the Defendants to be a single entity or multiple actors.”
But MCEP’s Amended Complaint includes neither an allegation of an agreement among
the payers nor an agreement among the physicians.13 Instead, the Amended Complaint alleges
13MCEP’s counsel acknowledged this fact in the course of a deposition, asserting: “I’ll represent to you [to
the deponent] that there was not an allegation of an outer rim in the complaint, but that MCEP contends that the
No. 17-3863 Med. Center at Elizabeth Pl. v. Atrium Health Sys., et al. Page 22
an agreement among the Hospital Defendants to financially induce payers and physicians to
boycott MCEP. There is no “rim” conspiracy without alleged agreement among the parties at
the rim (among the payers and physicians, respectively). See Total Benefits Planning Agency,
Inc. v. Anthem Blue Cross & Blue Shield, 552 F.3d 430, 436 (6th Cir. 2008). Because the
Amended Complaint lacks an essential element for MCEP’s “rim” conspiracy claims, the
Amended Complaint does not include those claims.
Faced with that omission, MCEP claims that Judge Rice erred by not permitting MCEP
to submit a Second Amended Complaint to add the rim conspiracy claims. We review for abuse
of discretion the district court’s decision to deny such a motion. Super Sulky, Inc. v. U.S.
Trotting Ass’n, 174 F.3d 733, 740 (6th Cir. 1999). We will overturn the district court’s decision
only if we have a “definite and firm conviction that the court below committed a clear error in
judgment in the conclusion it reached upon a weighing of the relevant factors.” Taylor v. United
States Parole Comm’n, 734 F.2d 1152, 1155 (6th Cir. 1984) (citation omitted); see also John B.
v. Goetz, 531 F.3d 448, 459 (6th Cir. 2008). The standard for a motion to amend is governed by
the general principle that “cases should be tried on their merits rather than the technicalities of
pleadings,” which is in turn moderated by the exception that judges should allow amendment
only when doing so does not “cause prejudice to the defendants” or undue delay. Tefft v.
Seward, 689 F.2d 637, 639 (6th Cir. 1982).
The district court found that Hospital Defendants “would be severely prejudiced if MCEP
were permitted to amend its Complaint at this late date” primarily for the reason that a proper
adjudication of the rim conspiracy claims would require a new round of discovery that could last
well over a year. The district court was unmoved by MCEP’s arguments that amending its
complaint would not cause prejudice because Hospital Defendants had been “on notice” of the
rim conspiracy claims since MCEP filed its Omnibus Opposition to Defendants’ Motions for
Summary Judgment.
The district court did not abuse its discretion by concluding that its allowing MCEP to
amend its complaint for a second time would require a new round of discovery that would cause
evidence developed through discovery establishes the existence of an outer rim, meaning an understanding among
two or more payers that each had agreed with the defendants not to expand their hospital panel.”
No. 17-3863 Med. Center at Elizabeth Pl. v. Atrium Health Sys., et al. Page 23
undue delay and prejudice Hospital Defendants by significantly extending litigation that began in
2012. Tefft does not save MCEP on this point. In that case, it was “obvious that the facts as set
forth in Tefft’s original complaint would support [the new] cause of action . . . as well as [the
original cause of action].” Id. at 639. That is not the case here, where the facts as set forth in
MCEP’s Amended Complaint do not support MCEP’s different rim conspiracy claims. This
case is more like Super Sulky, where a plaintiff moved to amend his complaint to add an
additional Section 1 theory that was absent from the original complaint, but had been raised in
response to a motion for summary judgment—in short, the circumstance here. The district court
denied that plaintiff’s motion to amend and we affirmed. Super Sulky, 174 F.3d at 740-41.
Judge Rice did not abuse his discretion when he denied MCEP’s motion to amend its
complaint.14
IV.
Because Judge Rice was correct to find that the challenged restraints do not fall within
the circumscribed categories of per se condemnation, we AFFIRM the district court’s grant of
summary judgment.
14MCEP raised two additional claims on appeal—that the district court erred in dismissing Catholic Heath
Initiatives and that the case should be remanded to Judge Black rather than Judge Rice. Both arguments are mooted
because we affirm the district court’s summary judgment in favor of Hospital Defendants.
No. 17-3863 Med. Center at Elizabeth Pl. v. Atrium Health Sys., et al. Page 24
_________________
CONCURRENCE
_________________
SUTTON, Circuit Judge, concurring. I join Judge Batchelder’s thoughtful opinion in
full. I write separately to discuss the law-of-the-case doctrine and to explain why it does not
apply to the prior panel’s decision.
What we call law of the case has two parts. The first part, known as the “mandate rule,”
is vertical. A lower court “is bound by the decree [of a higher court] as the law of the case, and
must carry it into execution according to the mandate.” In re Sanford Fork & Tool Co., 160 U.S.
247, 255 (1895). The rule springs from the hierarchical structure of our judicial system and
leaves no room for discretion. If the U.S. Supreme Court resolves an issue in a case and remands
the matter to us, we are duty bound to follow the mandate of the superior court. So too at the
trial level. If we decide an issue and remand the case, the trial court must carry out its duties in
accordance with that mandate. See Bryan A. Garner et al., The Law of Judicial Precedent 459–
60 (2016).
The second part, the part implicated by this case, is horizontal. It “expresses the practice
of courts generally to refuse to reopen what has been decided” by an earlier panel of the same
court in the same case. Messenger v. Anderson, 225 U.S. 436, 444 (1912) (Holmes, J.). Unlike
its upward counterpart, the sideways version of the law of the case is “not a limit to [a court’s]
power.” Id. A later panel of an appellate court, like a district court, “has the power to revisit
prior decisions of its own or of a coordinate court in any circumstance.” Christianson v. Colt
Indus. Operating Corp., 486 U.S. 800, 817 (1988). That is what happened when Judge Rice took
over this case, reconsidered Judge Black’s opinion, came to a different conclusion, and granted
summary judgment to Premier. See supra at 7; Garner, supra, at 474, 487–88.
Today, we sit in essentially the same position as Judge Rice. A prior panel of our court
decided that Premier was not a single entity under the Sherman Act. See Med. Ctr. at Elizabeth
Place, LLC v. Atrium Health Sys., 817 F.3d 934, 936 (6th Cir. 2016). One judge dissented. Id.
at 945 (Griffin, J., dissenting). Now the case has returned.
No. 17-3863 Med. Center at Elizabeth Pl. v. Atrium Health Sys., et al. Page 25
As I see it, the dissent got it right. Section 1 of the Sherman Act “does not reach conduct
that is wholly unilateral.” Copperweld Corp. v. Indep. Tube Corp., 467 U.S. 752, 768 (1984)
(quotation omitted). Officers and divisions within a single entity cannot collude in a way that
violates § 1. Single-entity status depends on economic realities rather than labels. Whether or
not they keep their separate corporate identities, participants in a joint venture merge into a
single entity if (1) their agreement creates a “complete unity of interest,” id. at 771, and (2) they
receive orders from a single decisionmaking center, Am. Needle, Inc. v. Nat’l Football League,
560 U.S. 183, 194 (2010).
Premier qualified as a single entity.
Complete unity of interest? Check. The hospitals shared profits and losses according to
a distribution schedule that did not change based on any one hospital’s performance. That means
that each hospital in the joint venture benefited when another hospital succeeded even if that
other hospital drew patients and profits away.
Single decisionmaking center? Check again. Premier served as the “operator” for all the
joint venture’s health system activities and had the power to negotiate managed care contracts,
fire hospital executives, dictate their budgets, and plot the strategic course each hospital took.
Med. Ctr., 817 F.3d at 950 (Griffin, J., dissenting).
The law-of-the-case doctrine does not prohibit us from reviewing that ruling. And I
would suggest we do so in this case save for one reality: It makes no difference to the outcome.
Either way, Premier rightfully prevails.
No doubt, it’s often said that courts at all levels should be “loathe” to overturn their
earlier opinions unless they are “clearly erroneous” and cause a “manifest injustice.”
Christianson, 486 U.S. at 817 (quotations omitted). But what does that mean? Surely, a legal
ruling does not become more insulated from reversal by a senior court every time the junior court
refuses to reconsider a prior ruling. The “clear error” and “manifest injustice” phrases must refer
to something else. They instead are a reminder that courts should not lightly reconsider prior
rulings in the same case—lest we scramble the expectations of the parties and encourage serial
efforts to revisit prior rulings. These are, in other words, self-enforced standards, not the
No. 17-3863 Med. Center at Elizabeth Pl. v. Atrium Health Sys., et al. Page 26
standard a senior court uses to review a reconsidered ruling. There is no such thing as upholding
an erroneous, but not clearly erroneous, legal ruling in this setting. Accordingly, if a court
revisits a prior legal ruling, that does not transform the standard of review from de novo to clear
error. See Garner, supra, at 447.
No. 17-3863 Med. Center at Elizabeth Pl. v. Atrium Health Sys., et al. Page 27
_________________
DISSENT
_________________
HELENE N. WHITE, Circuit Judge, dissenting in part. I agree with the majority’s
conclusion that the rule of reason applies to the alleged conspiracy involving concerted action by
the Hospital Defendants. However, I disagree with the majority’s determination regarding the
rim conspiracy involving the payers.
The majority acknowledges that there is evidence of horizontal concerted action among
the payers, orchestrated by Defendants, not to provide MCEP a managed-care contract (i.e., the
“rim conspiracy”), and that the per se rule would apply to that conspiracy. The majority
nevertheless concludes that MCEP cannot present that evidence to a jury because (1) it
constitutes a separate, unpled claim from the conspiracy claim that MCEP pled; and (2) Judge
Rice did not abuse his discretion in determining that allowing MCEP to amend its complaint to
include this claim would prejudice Defendants. Because the allegations in MCEP’s Amended
Complaint encompass this rim conspiracy; the evidence was known by Defendants early in the
proceedings; this court discussed the evidence of a rim conspiracy in the first appeal; Judge
Black relied on the evidence of a rim conspiracy in denying Defendants’ summary judgment
motions after remand; and Defendants failed to seek the purported necessary additional
discovery in a timely fashion, I would reverse the grant of summary judgment and remand for
trial. Accordingly, I respectfully dissent.
The majority’s recitation of the procedural history of this case omits important details
that bear on whether the rim conspiracy should proceed to trial. After Defendants moved for
summary judgment on the basis that they were a single entity and thus incapable of conspiring,
MCEP affirmatively raised the rim conspiracy, arguing in opposition to Defendants’ motion that
evidence of concerted action by the payers—what MCEP called “an additional facet to th[e]
conspiracy” it pled (R. 139, PID 10136)—meant that the plurality requirement was met and that
the alleged conspiracy would still be subject to per se treatment even if Defendants were a single
entity. In reply, Defendants did not argue that the rim conspiracy constituted a separate and
untimely alleged conspiracy; and they did not argue that they needed additional discovery
No. 17-3863 Med. Center at Elizabeth Pl. v. Atrium Health Sys., et al. Page 28
regarding this concerted action. Rather, they argued only that there was insufficient evidence of
the rim conspiracy, forfeiting any timeliness argument.
It was not until the first appeal that Defendants challenged the rim-conspiracy claim as
not encompassed within MCEP’s Amended Complaint, and therefore untimely. Defendants also
argued that they would be prejudiced by adding this new theory to the case, and stressed at oral
argument in the first appeal that they would need additional discovery to defend against the
allegation of horizontal concerted action by the payers. Despite Defendants’ argument, the prior
panel expressly considered evidence of the rim conspiracy in its majority opinion:
Plaintiff has submitted evidence that each insurer knew that the other insurers had
included this [panel] limitation in their contracts, as demonstrated by the excerpt
below from a Dayton industry publication:
Premier has threatened to revoke privileges for physicians
participating in [plaintiff hospital] and contracts with health plans
such as Anthem and UnitedHealth are known to be contingent on
excluding [plaintiff hospital] from the network.
In addition to this published account, plaintiff also offered evidence from
insurance company emails and defendant hospitals’ Board of Directors meetings
that, in addition to demonstrating knowledge among the insurers of the restriction
on adding new hospitals to their networks in their managed-care contracts with
defendant hospitals, the insurance companies regularly monitored each other to
ensure that the other insurance companies were complying with the contract
restriction on dealing with a new hospital.
Med. Ctr. at Elizabeth Place, LLC v. Atrium Health Sys., 817 F.3d 934, 941–42 (6th Cir. 2016)
(hereafter MCEP I) (second and third alterations in original) (internal citation omitted).
After remand, Judge Black issued an order requesting briefing regarding the effects of the
opinion in MCEP I on Defendants’ previously filed summary judgment motions. In their reply
brief, Defendants summarily argued, for the first time before the district court, that the horizontal
concerted action by the payers was not pled and that adding that theory to the case would
prejudice them. Defendants did not request additional discovery on that issue, however.
In denying Defendants’ remaining summary judgment motions, to support his conclusion
that the per se rule applies to MCEP’s antitrust claim, Judge Black discussed and relied on
No. 17-3863 Med. Center at Elizabeth Pl. v. Atrium Health Sys., et al. Page 29
evidence that at the behest of Defendants, the payers joined in an agreement not to deal with
MCEP.1
After Judge Black denied Defendants’ remaining summary judgment motions, and
despite this court’s and Judge Black’s opinions indicating that the rim conspiracy was part of the
case and Defendants’ representation to this court that they would need additional discovery to
defend against that theory, Defendants still did not request additional discovery. Instead, more
than seven months later, after Judge Black recused himself and only a couple of months before
trial was scheduled to begin, Defendants made the same untimeliness argument to Judge Rice,
arguing that they would be prejudiced if the rim conspiracy was included at trial and that they
would need 12–18 months of additional discovery. As the majority explains, Judge Rice
accepted those arguments, finding that the rim conspiracy was not alleged in the Amended
Complaint and that MCEP could not file a Second Amended Complaint because Defendants
would be prejudiced by the delay.
Given this chronology, I would reverse the district court’s grant of summary judgment
and allow the rim conspiracy, which all agree is subject to the per se rule, to proceed to trial.
This conclusion is not dependent on whether the law of the case applies, but rather on whether
the issue was fairly included in the case. First, MCEP’s Amended Complaint expressly alleges a
group boycott subject to per se condemnation involving Defendants and the payers. The
horizontal concerted action by the payers, orchestrated and monitored by Defendants, can
reasonably be construed as part of this single, overarching conspiracy. This conclusion is
reinforced by Defendants’ failure to argue in their summary judgment briefs before the first
appeal that the rim conspiracy was not encompassed within the Amended Complaint; and this
1Because Judge Black construed MCEP’s claim as encompassing the rim conspiracy, his conclusion that
the per se rule applied to MCEP’s claim is reasonable. Further, despite the majority’s conclusion “that then-Judge
Sotomayor’s concurrence in MLB Properties” is “[p]erhaps most destructive to” Judge Black’s framing of the
ancillary-restraints doctrine (Maj. Op. at 13), then-Judge Sotomayor’s concurrence in MLB Properties stated at
several points that the restraint must be “reasonably necessary” to the efficiency-enhancing benefits of the joint
venture. See, e.g., 542 F.3d at 338 (explaining that a per se approach may apply to joint ventures where “a particular
challenged restraint is not reasonably necessary to achieve any of the efficiency-enhancing benefits of a joint
venture and serves only as naked restraint against competition”). Thus, the majority’s critique of Judge Black’s
formulation of the ancillary-restraints doctrine—requiring the restraint to be necessary to an efficiency-enhancing
purpose of the joint venture—is not entirely fair given the broader context of his ruling.
No. 17-3863 Med. Center at Elizabeth Pl. v. Atrium Health Sys., et al. Page 30
court’s and Judge Black’s express reliance on evidence of the rim conspiracy when discussing
the merits of this case.
Second, Defendants’ prejudice argument is unavailing in light of their failure to (1) argue
prejudice in their initial summary judgment briefing, and (2) seek the discovery they told this
court they would need in October 2015, despite the opportunity to do so for months. Rather than
seek the discovery they claimed to need, Defendants moved forward with trial preparations
before deciding to try their untimeliness argument a third time on a different judge after it failed
to persuade either this court or Judge Black.
More fundamentally, the majority’s affirmance of the dismissal of the rim conspiracy
deprives MCEP of any remedy based on a pleading technicality even though all agree that there
is sufficient evidence that Defendants and the payers conspired to exclude MCEP from the
market in a way that is per se illegal—i.e., in a way that is “so inherently anticompetitive that
[the agreement] is illegal per se without inquiry into the harm it has actually caused.”
Copperweld Corp. v. Indep. Tube Corp., 467 U.S. 752, 768 (1984) (citation omitted). Because
“cases should be tried on their merits rather than the technicalities of pleadings,” Tefft v. Seward,
689 F.2d 637, 639 (6th Cir. 1982), I would remand the rim conspiracy for trial.