United States District Court, S.D. Indiana, Terre Haute Division
ENTRY GRANTING DEFENDANTS’ MOTION TO
R. SWEENEY II, JUDGE
Internal Medicine Nephrology, Inc. alleges that Defendant
Fresenius Medical Care Holdings Inc. and various related
entities (collectively, “Fresenius”) attempted to
monopolize and monopolized the dialysis services market in
the Terre Haute area in violation of section 2 of the Sherman
Act, 15 U.S.C. § 2. Plaintiff also alleges various
related state-law antitrust, tort, contract, and
move to dismiss Plaintiff’s Sherman Act claim for lack
of antitrust injury and lack of antitrust standing. For the
reasons below, Defendants’ motion to dismiss (ECF No.
44) is granted, and Plaintiff’s
Sherman Act claim is dismissed without
prejudice to amending its complaint. Because courts should
generally relinquish supplemental jurisdiction over pendant
state-law claims when all federal claims are dismissed,
see Kennedy v. Schoenberg, Fisher & Newman,
Ltd., 140 F.3d 716, 727 (7th Cir. 1998),
Plaintiff’s state-law claims are also dismissed without
is a nephrology practice group based in Terre Haute, Indiana.
“When a nephrologist’s patient requires dialysis
services, the nephrologist refers the patient to a dialysis
provider.” (Compl. ¶ 14.) Medicare requires that
every dialysis facility have a medical director-“one or
more nephrologists who oversee the delivery and quality of
care provided at the dialysis facility.” (Compl. ¶
15.) Due to the time-consuming and repetitive nature of
dialysis, patients typically will not drive more than 30 to
45 minutes for dialysis services. (Compl. ¶ 23.)
Plaintiff identifies the relevant market as “dialysis
services within a 30–45 minute travel distance of Terre
Haute.” (Compl. ¶ 34.)
provides dialysis services at its dialysis clinics in Terre
Haute and the surrounding area. “Fresenius has had
significant market power in the provision of kidney dialysis
services in that it could control prices by controlling
supply, and/or excluding competition with the effect of not
keeping historical costs in check which negatively impact
reimbursement rates paid by payors, including
Medicare.” (Compl. ¶ 32.) From 2006 until 2017,
Fresenius was the only dialysis service provider in the
relevant market, and Plaintiff served as medical director at
all six facilities-four outpatient and two inpatient.
Plaintiff was also involved in Fresenius’s efforts to
open a facility in Paris, Illinois, and Defendants promised
that Plaintiff would serve as medical director of that
facility. (Compl. ¶¶ 45–53.) Plaintiff
alleges that under federal law and regulations relating to
Medicare reimbursements, “neither a dialysis provider
nor a nephrologist can dictate which dialysis facility a
patient must use[, ] and a dialysis provider cannot
financially reward a patient or a physician for a specific
referral.” (Compl. ¶ 17.)
October 2017, DaVita entered the relevant market, opening
three dialysis facilities in the Terre Haute area. The only
other nephrology practice group in Terre Haute served as
medical director of the DaVita facilities. (Compl. ¶
58.) After DaVita’s entry, Fresenius (1) insisted that
Plaintiff interfere with patient choice by barring its
employee-physicians’ nephrology patients from
transferring to DaVita facilities; (2) threatened Plaintiff
and its employee-physicians that “IMN needs Frese-nius
more than Fresenius needs IMN”; (3) ordered Fresenius
employees to tell patients that Plaintiff’s physicians
were “liars”; and (4) “[c]oerced Fresenius
employees and staff to engage in consistent and targeted acts
intended to coerce patients” to remain at Fresenius
facilities or transfer back to Fresenius facilities. (Compl.
and its employee-physicians refused to comply with
Fresenius’s demands, so Fresenius terminated its
medical director agreements with Plaintiff for four
facilities and selected a different medical director for the
Paris facility, replacing Plaintiff with an
Indianapolis-based medical director that acquiesced in
Fresenius’s demands. (Compl. ¶¶ 61, 63.)
After replacing Plaintiff as medical director, Fresenius
began to solicit Plaintiff’s nephrology patients to
leave Plaintiff for Fresenius’s new medical director.
(Compl. ¶ 61.) Fresenius falsely told others that
Plaintiff was replaced as medical director due to concerns
about quality. (Compl. ¶¶ 73, 76.)
medical director agreements with Fresenius for each facility
included noncompete provisions prohibiting Plaintiff from
serving as medical director for a competing dialysis facility
within 25 miles of the respective Fresenius facility. (Compl.
survive a motion to dismiss for failure to state a claim, a
plaintiff must allege “enough facts to state a claim to
relief that is plausible on its face.” Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 570 (2007). In
considering a Rule 12(b)(6) motion to dismiss, the court
takes the complaint’s factual allegations as true and
draws all reasonable inferences in the plaintiff’s
favor. Orgone Capital III, LLC v. Daubenspeck, 912
F.3d 1039, 1044 (7th Cir. 2019). The court need not
“accept as true a legal conclusion couched as a factual
allegation.” Papasan v. Allain, 478 U.S. 265,
286 (1986). “[I]f a plaintiff pleads facts
that show its suit [is] barred . . ., it may plead itself out
of court under a Rule 12(b)(6) analysis.” Orgone
Capital, 912 F.3d at 1044 (quoting Whirlpool Fin.
Corp. v. GN Holdings, Inc., 67 F.3d 605, 608 (7th Cir.
1995)); Bogie v. Rosenberg, 705 F.3d 603, 609 (7th
Cir. 2013) (on a motion to dismiss “district courts are
free to consider ‘any facts set forth in the complaint
that undermine the plaintiff’s claim’”)
(quoting Hamilton v. O’Leary, 976 F.2d 341,
343 (7th Cir. 1992)).
argue that Plaintiff has not suffered “antitrust
injury” and that Plaintiff lacks “antitrust
standing.” Section 4 of the Clayton Act, 15 U.S.C.
§ 15, provides a private right of action for violation
of the antitrust laws: “any person who shall be injured
in his business or property by reason of anything forbidden
in the antitrust laws may sue therefor in any district court
of the United States . . ., and shall recover threefold
damages by him sustained, and the cost of suit, including a
reasonable attorney’s fee.” Despite the Clayton
Act’s apparent breadth, the Supreme Court-drawing on
congressional intent and common-law principles-has developed
two related doctrines that limit the scope of the private
right of action: antitrust injury and antitrust standing.
Neither antitrust injury nor antitrust standing implicates
the limits of the “judicial Power” under Article
III. See U.S. Gypsum Co. v. Ind. Gas Co., 350 F.3d
623, 627 (7th Cir. 2003) (noting the “potential for
confusion with Article III standing”).
injury limits private antitrust actions to those
alleging “injury of the type the antitrust laws were
intended to prevent and that flows from that which makes the
defendants’ acts unlawful.” Brunswick Corp.
v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 489 (1977).
Antitrust standing, on the other hand, limits
private antitrust actions to those plaintiffs positioned to
enforce the antitrust laws most efficiently. See Serfecz
v. Jewel Food Stores, Inc., 67 F.3d 591, 598 (7th Cir.
1995) (“From the class of injured persons suffering an
‘antitrust injury’ only those parties who can
most efficiently vindicate the purposes of the antitrust laws
have antitrust standing to maintain a private action under
§ 4.”) (quoting In re Indus. Gas Antitrust
Litig., 681 F.2d 514, 516 (7th Cir. 1982)). Antitrust
injury is a necessary, but not necessarily sufficient,
condition for antitrust standing. See Cargill, Inc. v.
Monfort of Colorado, Inc., 479 U.S. 104, ...