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St. Mary's Reg'l Med. Ctr. v. Renown Health

United States District Court, D. Nevada

August 1, 2014

ST. MARY'S REGIONAL MEDICAL CENTER, a Nevada corporation; and ST. MARY'S MEDICAL GROUP INC., a Nevada professional corporation; RICHARD H. BRYAN, JR., M.D., F.A.C.C.; FRANK P. CARREA, M.D., F.A.C.C.; RAM M. CHALLAPALLI, M.D., F.A.C.C.; SRIDEVI CHALLAPALLI, M.D., F.A.C.C.; DEVANG M. DESAI, M.D., F.A.C.C.; ERIC M. DRUMMER, M.D., F.A.C.C.; JOSEPH STEVENSON, D.O., F.A.C.C.; and KOSTA M. ARGER, M.D., Plaintiffs,
v.
RENOWN HEALTH, a Nevada non-profit corporation; RENOWN REGIONAL MEDICAL CENTER, a Nevada non-profit corporation; NEVADA HEART INSTITUTE, a Nevada non-profit corporation; HOMETOWN HEALTH PLAN, a commercial health insurance company; DAVID LINE, an individual; JAMES I. MILLER, an individual; KELLY TESTOLIN, an individual; ANDREW PEARL, an individual; and DOES I through X, Defendants

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For St. Mary's Regional Medical Center, Kosta M. Arger, M.D., Joseph Stevenson, O.D., F.A.C.C., Eric M. Drummer, M.D., F.A.C.C., Devang M. Desai, M.D., F.A.C.C., Sridevi Challapalli, M.D., F.A.C.C., Ram M. Challapalli, M.D., F.A.C.C., Frank P. Carrea, M.D., F.A.C.C., Richard H. Bryan, Jr., M.D., F.A.C.C., St. Mary's Medical Group, Inc., Plaintiffs: Barry L. Breslow, Kent R. Robison, LEAD ATTORNEYS, Robison, Belaustegui, Sharp & Low, Reno, NV; Therese Shanks, LEAD ATTORNEY, Robison Belaustegui Sharp & Low, Reno, NV.

For Renown Health, Defendant: Edward Martin Rosenfeld, LEAD ATTORNEY, Bryan Cave LLP, Santa Monica, CA; Ryan M. Lower, LEAD ATTORNEY, Morris Law Group; Steve L. Morris, LEAD ATTORNEY, Morris Law Group, Las Vegas, NV.

For Renown Regional Medical Center, David Line, Hometown Health Plan, Nevada Heart Institute, Defendants: Edward Martin Rosenfeld, LEAD ATTORNEY, Bryan Cave LLP, Santa Monica, CA; Ryan M. Lower, LEAD ATTORNEY; Steve L. Morris, LEAD ATTORNEY, Morris Law Group, Las Vegas, NV.

For James I. Miller, Kelly Testolin, Defendants: Calvin R.X. Dunlap, LEAD ATTORNEY, Law Office of Calvin R.X. Dunlap, Reno, NV; Erin McAlpin Eiselein, John A Francis, Natalie West, LEAD ATTORNEYS, Davis Graham & Stubbs LLP, Denver, CO; Monique Laxalt, LEAD ATTORNEY, Law Office Calvin R.X. Dunlap, Reno, NV.

For Andrew Pearl, Defendant: Mark LeHocky, LEAD ATTORNEY, PRO HAC VICE, Kilpatrick Townsend & Stockton LLP, San Francisco, CA; Brad M. Johnston, Peri & Sons Farms, Inc., Yerington, NV.

For Calvin Dunlap, Consol Defendant: Calvin R.X. Dunlap, Law Office of Calvin R.X. Dunlap, Reno, NV.

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ORDER (Plaintiffs' Motion for Remand -- dkt. nos. 15, 16)

MIRANDA M. DU, UNITED STATES DISTRICT JUDGE.

I. SUMMARY

Before the Court is a Motion for Remand filed by Plaintiffs St. Mary's Regional Medical Center and St. Mary's Medical Group Inc. (together, " St. Mary's" ); and Richard R. Bryan, Jr., Frank P. Carrea, Ram M. Challapalli, Sridevi Challapalli, Devang M. Desai, Eric M. Drummer, Joseph Stevenson, and Kosta M. Arger (" the Cardiologists" ) (dkt. nos. 15, 16). The Court held a hearing on the Motion for Remand on July 10, 2014. As noted at the hearing, the Court has also reviewed Defendants'[1] opposition (dkt. no. 22) and Plaintiffs' reply (dkt. no. 29), and supplements filed by both parties (dkt. nos. 83, 84). For the following reasons, the Motion is granted.

II. BACKGROUND

The following facts are taken from the Complaint and its exhibits. St. Mary's and Renown are health care entities and competitors providing adult cardiology services in the Reno-Sparks area of Nevada. (Dkt. no. 1-1 ¶ ¶ 29, 117.) The Cardiologists are St. Mary's employees who were formerly employed by Sierra Nevada Cardiology Associates (" SNCA" ), a cardiology practice in Reno. ( Id. ¶ ¶ 11-18, 32.) On January 1, 2011, a merger between SNCA and Renown became effective. (Dkt. no. 1-1, Ex. 4 ¶ 8.) As a result, 15 cardiologists associated with SNCA became Renown employees. ( Id. ¶ 9.) Shortly thereafter, in March 2011, Renown acquired Reno Heart Physicians (" RHP" ), Reno's other large provider of adult cardiology services. ( Id. ¶ ¶ 2, 11.) Similar to the SNCA merger, 17 cardiologists associated with RHP became Renown employees on March 29, 2011. ( Id. ¶ 12.) Before these mergers, St. Mary's had " enjoyed an excellent working relationship with the cardiologists" in each practice. (Dkt. no. 1-1 ¶ ¶ 31-32.) However, St.

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Mary's alleges tat after the mergers, its cardiology practice suffered because Renown had " procure[d] and purchase[d] the practices of virtually all cardiologists in the Reno/Sparks area." ( Id. ¶ 43, 115-30.)

Renown's plans to acquire SNCA and RHP prompted an investigation by the Federal Trade Commission (" FTC" ). ( Id. ¶ ¶ 56, 66-67.) As a result of the investigation, the FTC alleged that Renown violated section 7 of the Clayton Act. ( Id. ¶ 73.) Renown settled with the FTC in or around August 2012. ( Id. ¶ ¶ 72, 75.) After the settlement and a lawsuit brought by former SNCA cardiologists employed by Renown, eight cardiologists left Renown and began working for St. Mary's.[2] ( Id. ¶ ¶ 11-19, 92-93.) These physicians are plaintiffs in this case. ( Id. ¶ ¶ 11-18.)

Before bringing this action, the Cardiologists, along with other physicians formerly associated with SNCA, filed two lawsuits in Nevada state court. ( See id. ¶ ¶ 11-19.) The first lawsuit resulted in a settlement agreement; the second involved alleged breaches of that agreement. ( Id. ¶ ¶ 11-18, 82-100, 141-47; see dkt. no. 1-1, Ex. 3.)

The Complaint alleges that Renown engaged in unlawful business practices that harmed Plaintiffs' cardiology business in Washoe County, Nevada. ( See Dkt. no. 1-1 ¶ ¶ 1-8.) Specifically, Plaintiffs allege that Renown violated the Nevada Unfair Trade Practices Act by engaging in, and conspiring to engage in, monopolistic behavior; breached a contract and its express and implied covenants of good faith and fair dealing; interfered with existing and prospective relationships; and conspired to harm St. Mary's.[3] ( Id. ¶ ¶ 131-93.) Although Plaintiffs confine their claims for relief to state-law issues (dkt. no. 1-1 ¶ ¶ 131-93), their Complaint refers to federal law, and notes particularly the FTC investigation. ( See id. ¶ ¶ 1, 3, 6, 8, 66-67, 69-80, 89, 91, 93, 104-05, 108.) Plaintiffs also attach three documents related to the FTC investigation to their Complaint (" FTC Exhibits" ). (Dkt. no. 1-1, Exhs. 4-5.) The FTC Exhibits include a complaint the FTC drafted for -- but never filed against -- Renown (" FTC Draft Complaint" ), an order requiring Renown to stop enforcing a non-compete clause, and an order that followed Renown's settlement with the FTC. ( Id. ) Plaintiffs note that federal laws regulating antitrust and monopolistic behavior, including those that appear in the FTC Exhibits, are not " claimed bas[es] for relief." (Dkt. no. 1-1 ¶ 1 (citing the Sherman Act, 15 U.S.C. § § 1-7,

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and the Clayton Act, 15 U.S.C. § § ...


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