Aya Healthcare Servs., Inc. v. Amn Healthcare, Inc.
| Citation | 613 F.Supp.3d 1308 |
| Docket Number | Case No.: 17cv205-MMA (MDD) |
| Decision Date | 12 May 2020 |
| Parties | AYA HEALTHCARE SERVICES, INC., and Aya Healthcare, Inc., Plaintiffs, v. AMN HEALTHCARE, INC., et al., Defendants. |
| Court | U.S. District Court — Southern District of California |
William A. Markham, Law Offices of William Markham, P.C., Kenneth M. Fitzgerald, Fitzgerald Knaier LLP, San Diego, CA, for Plaintiffs.
Amanda Catherine Fitzsimmons, Noah A. Katsell, DLA Piper LLP, San Diego, CA, David Henry Bamberger, Pro Hac Vice, DLA Piper LLP, Washington, DC, for Defendant AMN Healthcare, Inc.
Noah A. Katsell, Amanda Catherine Fitzsimmons, DLA Piper LLP, San Diego, CA, for Defendants AMN Healthcare Service, Inc., AMN Services, LLC., MEDEFIS, Inc., Shiftwise, Inc.
REDACTED 1
ORDER GRANTING DEFENDANTS' DAUBERT MOTION; AND
GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION FOR SUMMARY JUDGMENT
Defendants AMN Healthcare, Inc., AMN Healthcare Services, Inc., AMN Healthcare Services LLC, Medefis, Inc. ("Medefis"), and Shiftwise Inc. ("Shiftwise"), (collectively, "Defendants" or "AMN") move to exclude certain opinions proffered by Plaintiffs Aya Healthcare Services, Inc. and Aya Healthcare, Inc.'s (collectively, "Plaintiffs" or "Aya") expert Patricia G. Donohoe. See Doc. No. 99 (hereinafter " Daubert motion"). Defendants also move for summary judgment on each of the claims asserted by Plaintiffs. See Doc. No. 98. For the reasons set forth below, the Court GRANTS AMN's Daubert motion and GRANTS IN PART and DENIES IN PART AMN's motion for summary judgment. The Court also ORDERS the parties to show cause as to whether summary judgment should be granted in AMN's favor with respect to Aya's Sherman Act Sections 1 and 2 claims for exclusionary damages in light of the Court's findings with respect to market power and harm to competition.
Aya brings this action against AMN asserting claims pursuant to Sections 1 and 2 of the Sherman Antitrust Act of 1890 ("Sherman Act"), 15 U.S.C. §§ 1 - 7, as amended by the Clayton Act of 1914 ("Clayton Act"), 15 U.S.C. §§ 12 - 27, California's Cartwright Act, Cal. Bus. & Prof. Code § 16750(a) and Unfair Competition Law, Cal. Bus. & Prof. Code § 17200, et seq. , as well as a common law claim of tortious interference with prospective economic relations. See Doc. No. 37 ("TAC").
The case involves non-solicitation provisions in AMN's agreements with other healthcare staffing agencies, including Aya, as well as AMN's termination of the parties' collaborating relationship. The parties are companies that operate agencies for different types of temporary healthcare employees, the most relevant type here being travel nurses. Travel nurses are nurses and nurse technicians who perform temporary, medium-term assignments in understaffed hospitals and other healthcare facilities ("hospitals") that cannot have the assignments performed by their own nurses. See Doc. No. 150-2 ("Braynin Decl.") at 1.3 The only other kind of temporary nurses are per diem nurses, who are generally unavailable to perform medium-term assignments. Hospitals will use the services of travel nurses only when they lack any alternative. Id.
Healthcare staffing agencies employ travel nurse recruiters to find, screen, and recruit travel nurses, and maintain relationships with the travel nurses and work with other company personnel, particularly account managers, to place the travel nurses on temporary assignments. Id. at 8. The agencies place the travel nurses at hospitals several ways: by directly placing the travel nurses at the agencies' hospital accounts and by indirectly placing the travel nurses at hospitals through either an agency that manages the hospitals' travel nurse needs ("managed service provider" or "MSP") or electronic platforms that facilitate the placements. See id. at 2. In 2017, agencies placed approximately 31 percent of travel nurse services directly and approximately 15 and 54 percent indirectly via platforms and MSPs, respectively. See Doc. 150-22 ("Markham Decl."), Ex. 81 at 12-16.
AMN has been a leader in the healthcare staffing industry for over thirty years. See id. at 3. In 2009, in addition to providing travel nurses to hospitals on direct placements, AMN started to become the MSP of an increasing number of hospitals. Later in 2013 and 2015, AMN acquired two electronic platforms, Shiftwise and Medefis, respectively, and began to place temporary travel nurses through the platforms. See id. at 3.
Aya is a younger healthcare staffing company that was founded in 2009 by Alan Braynin. See id. at 1. Braynin merged Aya with another healthcare staffing company that he founded in 2001, Access Nurses, Inc., by having Aya purchase its assets and operations. Id. Since its founding, Aya has been placing nurses directly in hospitals, and it has also been Aya's "mainstay" to take advantage of subcontracting opportunities, placing nurses in hospitals indirectly through MSP programs, such as those of AMN. See id. at 3-4.
As AMN grew its MSP programs, it was not always able to fulfill the demand of its hospital customers for travel nurse assignments. In these circumstances, AMN referred these "spillover assignments" to its network of subcontractors, or "associate vendors" ("AVs"), which were other healthcare staffing agencies, such as Aya. See id. at 4. These spillover assignments offered Aya and other healthcare staffing agencies a valuable source of income, which was also attractive to travel nurses because AMN's customer network was known generally to offer better opportunities in terms of pay and healthcare experience. See id. Aya later introduced its own MSP program, see Doc. 150-1 at 12, as have other healthcare staffing agencies. See Markham Decl., Ex. 81 at 20-21.
To obtain the spillover assignments from AMN, Aya first had to satisfy AMN that Aya was competent to provide travel nurses to AMN's customer network. In 2010, Aya provided information about its company to AMN at its request and met its criteria to become a subcontractor and receive spillover assignments. See id. Thereafter, AMN explained to Aya that to complete the process, Aya had to agree to AMN's [Redacted] that AMN allowed Aya to serve for spillover assignments. Id. at 4-5; Braynin Decl., Exs. 1, 2. The AV agreements include certain non-solicitation provisions. See Braynin Decl., Exs. 1, 2. Aya signed its first AV agreement in 2010, becoming AMN's AV for subcontracting opportunities to provide travel nurses to AMN's customers upon its request. See Braynin Decl. at 5. AMN and Aya experienced a mutually beneficial relationship going forward as Aya became AMN's largest AV and AMN continued to provide Aya with opportunities to grow its young company. See id. at 5-6.
In 2013, when AMN acquired Shiftwise, AMN utilized the electronic platform like its MSP programs and fulfilled the demand of its customers for travel nurses through placements on Shiftwise. See id. at 5. AMN made spillover assignments available to its AVs via Shiftwise, and later via Medefis when AMN acquired that platform in 2015. Aya has made temporary placements of its travel nurses through both platforms since AMN acquired them and continues to do so. See id. at 17.
Around May 2015, Aya began actively soliciting AMN's travel nurse recruiters. See Braynin Decl. at 9-12. Aya had not previously solicited AMN's travel nurse recruiters. See id. at 10-11. Since then, the parties' business relationship has soured. Around late September 2015, AMN temporarily terminated Aya's access to AMN's platform. See Braynin Decl. at 14. This took place while Aya still had travel nurses on assignments through the platform at some of AMN's hospital accounts. Aya experienced difficulty with monitoring the travel nurses that remained on assignments until it successfully negotiated with AMN to restore limited access for Aya to the platform. See id. AMN no longer provided Aya with spillover assignments through its MSP programs, and the parties later memorialized the termination of their prior AV agreements in December 2015. See id. at 15; Doc. No. 98-2 ("Fitzsimmons Decl."), Ex. 1.
During its AV relationship with AMN, Aya grew its business. According to Staffing Industry Analysts ("SIA"), the leading research and trade organization for the U.S. staffing industry, Aya ranked [Redacted] between 2013 and 2017. See Doc. No. 150-1 at 1 (). SIA also reported that between 2014 and 2017, Aya's travel nurse revenues [Redacted]; its travel nurse market share [Redacted];4 and it rose from [Redacted]. See id. at 2 (referring to Fitzsimmons Decl., Ex. 5).
[Redacted]5 [Redacted]. See id. at 4 (referring to Fitzsimmons Decl., Ex. 9). Aya grew at a compound annual growth rate of 85% between 2012 and 2017 and by an average of 90% between 2013 and 2018. See id. at 5 (referring to Fitzsimmons Decl., Ex. 4 at 83:17-22, 116:12-117:4, 117:22-118:13). Aya has also reported truthfully to its customers that in 2016 to 2017, "it added more travel nurses than its top two competitors combined (one of them being AMN);" "it has a consistent ‘fill rate’ for all of its MSP programs of 99% and can fill those travel nurse positions within one to five days;" and "it has tens of thousands of travel nurse candidates for recruitment each year." Id. at 7-9 (referring to Fitzsimmons Decl., Ex. 4 at 83:17-22, 88:23-89:15, 90:1-13, 115:2-10).
Aya commenced this action on February 2, 2017. See Doc. No. 1. Aya claims that it suffered "exclusionary damages" as a result of AMN's non-solicitation covenant in the parties' AV agreements and "retaliatory damages" as a result of AMN's decision to terminate its AV relationship with Aya. See Opp. at 19, 22-24. Aya claims that these business practices unreasonably restrain trade and interfere with Aya's prospective business opportunities in violation of federal, state, and common law. See Doc. No. 1. The...
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