BRFHH Shreveport, LLC v. Willis-Knighton Med. Ctr.

Decision Date19 September 2022
Docket Number21-30622
Citation49 F.4th 520
Parties BRFHH SHREVEPORT, LLC, doing business as University Health Shreveport, Plaintiff—Appellant, v. WILLIS-KNIGHTON MEDICAL CENTER, doing business as Willis-Knighton Health System, Defendant—Appellee.
CourtU.S. Court of Appeals — Fifth Circuit

David A. Ettinger, Rian Dawson, Esq., Honigman, L.L.P., Detroit, MI, Reid Allen Jones, Wiener, Weiss & Madison, A.P.C., Shreveport, LA, for Plaintiff-Appellant.

Layne E. Kruse, Darryl Wade Anderson, Eliot Fielding Turner, Norton Rose Fulbright US, L.L.P., Houston, TX, Lamar Powell Pugh, Esq., Pugh, Pugh & Pugh, L.L.P., Shreveport, LA, Lesley Carol Reynolds, Reed Smith, L.L.P., Washington, DC, Defendant-Appellee.

Before Smith, Duncan, and Oldham, Circuit Judges.

Andrew S. Oldham, Circuit Judge:

BRFHH Shreveport sued Willis-Knighton Medical Center for antitrust violations.

The district court dismissed the complaint for failure to state a claim. We affirm.


We "accept all well-pleaded facts as true and view them in the light most favorable to the non-movant." Turner v. Lieutenant Driver , 848 F.3d 678, 684 (5th Cir. 2017). Here, that's BRFHH Shreveport ("BRF").

We begin by describing the three main players. First is Louisiana State University's medical school in Shreveport, known as "LSU Health Shreveport" or "LSU" for short. LSU long owned and, until 2013, operated a clinical teaching hospital in Shreveport. That hospital was one of six in the city.

Second is BRF. In 2013, LSU hired BRF to operate its Shreveport hospital (along with a separate hospital in Monroe). The hospital then became known as University Health Shreveport ("UHS").1 BRF ran UHS until 2018, at which point another medical company, Ochsner, took its place. Since 2018, an entity jointly owned by LSU and Ochsner has managed the hospital.

Third is Willis-Knighton Medical Center. Willis-Knighton was the largest provider of medical care in the Shreveport area, and it controlled four of the city's six hospitals. It enjoyed a concomitantly large portion of the market share for commercially insured patients. Willis-Knighton regularly made charitable donations to LSU, and LSU depended heavily on those donations.

Less than two years into the BRF/LSU collaboration, the relationship soured. That gave rise to a spate of litigation separate from, but relevant to, the current lawsuit. First, LSU issued a notice of breach to BRF in 2015. See Petition for Declaratory Judgment and Injunction at 96, BRFHH Shreveport, LLC v. Willis Knighton Med. Ctr. , No. 5:15-cv-2057 (W.D. La. Sept. 28, 2015), ECF No. 77-1 (copy of the July 10, 2015 breach notice, attached as part of a docket entry in the first antitrust suit); Lake Eugenie Land & Dev., Inc. v. Halliburton Energy Servs. (In re Deepwater Horizon) , 934 F.3d 434, 440 (5th Cir. 2019) ("We may take judicial notice of prior court proceedings as matters of public record."). Second, BRF sued Willis-Knighton (but not LSU) in July 2015 for antitrust violations. See Complaint, BRFHH Shreveport , No. 5:15-cv-2057 (W.D. La. July 16, 2015), ECF No. 1. It alleged that Willis-Knighton and LSU made an illegal agreement, wherein LSU would direct its physicians to steer commercially insured patients to Willis-Knighton. Third, LSU filed a state-court lawsuit against BRF. See Petition for Declaratory Judgment and Injunction, supra (LSU's initial state-court pleading, attached as a docket entry in the first antitrust suit). LSU alleged that BRF had breached its obligations in various ways and sought to end BRF's management of UHS.

The way BRF tells the story, its 2013 takeover of UHS was massively successful. The hospital had been poorly run and inefficient, but BRF turned things around completely. BRF cut expenses, decreased wait times, increased the quality of care, and so on. Willis-Knighton looked on with envy.

Willis-Knighton began to worry that BRF would threaten its power in the Shreveport healthcare market. Willis-Knighton enjoyed a market share of 75% of commercially insured patients and controlled 80% of primary care physicians during the relevant times. Willis-Knighton's internal documents said that the insurer "Blue Cross [Blue Shield] told another hospital system there is only one health care system they must have in Louisiana: Willis-Knighton." Willis-Knighton's then-CEO even boasted about the company's market power in a 2013 book. On his telling, a significant portion of Willis-Knighton's profits came from its dominant position in the Shreveport healthcare market.

In the spring of 2016, LSU found itself in a budget crisis. It had been running at a deficit of $40 million to $50 million each year since BRF's 2013 takeover of UHS. In 2016, that deficit combined with Louisiana's broader budgetary problems to create at least the perception (and presumably the reality) that LSU desperately needed more money. LSU asked BRF for a $100 million donation to help close the gap, but BRF couldn't muster the funds.

LSU's crisis and BRF's inability to help gave Willis-Knighton an opportunity. Willis-Knighton decided to take advantage of LSU's situation by conditioning cash donations on LSU's behavior. The alleged approach was carrot-and-stick. The carrot: Willis-Knighton tentatively agreed to give LSU a $50 million donation if LSU backed off on its cooperation with BRF. The stick: Willis-Knighton hinted on several occasions that, if LSU didn't comply, Willis-Knighton would cut off donations.

BRF suggests Willis-Knighton experienced competitive pressure in the Shreveport market as early as 2014. But the complaint plainly alleges that it was not until 2016 that Willis-Knighton made the relevant anticompetitive threats. That's because, even though Willis-Knighton presumably wanted to destroy BRF before then, Willis-Knighton wasn't able to effectively pressure LSU with money until the 2016 budget crisis hit.

LSU subsequently did what Willis-Knighton wanted. The complaint isn't clear as to whether LSU decreased its existing cooperative activities with BRF or merely refused BRF's offers to increase cooperation. In any event, the complaint does allege specific refusals to cooperate.

BRF then alleges that LSU's non-cooperation harmed it in various ways. The basic idea is that cooperation from LSU would have allowed BRF to decrease costs, provide better care to patients, charge patients and insurers less, gain market share, and generally outcompete Willis-Knighton. See infra , Part II.B.2 (discussing these allegations in more depth).

BRF and LSU parted ways in 2018 when Ochsner took over management of LSU's Shreveport hospital (and the Monroe hospital, for that matter). The Ochsner relationship improved LSU's financial position, and BRF notes that LSU now cooperates with Ochsner in ways it refused to do with BRF. BRF says this shows that, once LSU was no longer strapped for cash, Willis-Knighton's coercive influence faded away.


BRF brought this antitrust suit in federal court. As in its first suit, BRF named Willis-Knighton but not LSU as a defendant. The complaint alleges that Willis-Knighton entered a conspiracy in restraint of trade, in violation of Section 1 of the Sherman Antitrust Act. See 15 U.S.C. § 1. It also alleges that Willis-Knighton committed both actual and attempted monopolization, in violation of Section 2 of the Act. See 15 U.S.C. § 2.

Willis-Knighton raised four arguments in a motion to dismiss. First, BRF hadn't alleged antitrust injury, which is a component of antitrust standing. See Atl. Richfield Co. v. USA Petroleum Co. , 495 U.S. 328, 334, 110 S.Ct. 1884, 109 L.Ed.2d 333 (1990). Second, BRF failed to state a plausible Section 1 claim. Third, likewise for Section 2. And fourth, the Noerr - Pennington doctrine barred BRF's claims. See E. R.R. Presidents Conf. v. Noerr Motor Freight, Inc. , 365 U.S. 127, 81 S.Ct. 523, 5 L.Ed.2d 464 (1961) ; United Mine Workers v. Pennington , 381 U.S. 657, 85 S.Ct. 1585, 14 L.Ed.2d 626 (1965).

The district court dismissed BRF's claims. The court held BRF plausibly alleged an antitrust injury. But for the Section 1 claim, BRF failed to allege an agreement—a fatal defect. As for the Section 2 claim, BRF failed to allege anticompetitive conduct. Thus, even though Willis-Knighton didn't contest its status as a monopolist, the Section 2 claim failed as well. With both claims gone, the court saw no need to rule on the Noerr - Pennington issue and declined to do so. BRF timely appealed.


We review a district court's grant of a 12(b)(6) motion de novo. Heinze v. Tesco Corp. , 971 F.3d 475, 479 (5th Cir. 2020). A complaint cannot survive a motion to dismiss by stating facts "merely consistent with" liability. Bell Atl. Corp. v. Twombly , 550 U.S. 544, 557, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). The complaint must instead state "a plausible claim for relief." Ashcroft v. Iqbal , 556 U.S. 662, 679, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). We accept all well-pleaded facts as true and construe the facts in the light most favorable to the non-movant. Turner , 848 F.3d at 684. But we don't accept as true "conclusory allegations, unwarranted factual inferences, or legal conclusions." In re Great Lakes Dredge & Dock Co. , 624 F.3d 201, 210 (5th Cir. 2010) (quotation omitted).

We hold (A) BRF's Section 1 claim fails because BRF hasn't plausibly alleged an agreement between Willis-Knighton and LSU. Then we hold (B) BRF's Section 2 claim fails because BRF hasn't plausibly alleged market foreclosure. That's enough for affirmance, so we don't reach antitrust injury or Noerr - Pennington . See McCormack v. NCAA , 845 F.2d 1338, 1343 (5th Cir. 1988) ("Whether a plaintiff has antitrust standing does not raise a question of jurisdiction on which we are required without exception to satisfy ourselves."); Pulse Network, LLC v. Visa, Inc. , 30 F.4th 480, 488 (5th Cir. 2022) (differentiating antitrust standing from Article III standing).


Section 1 of the Sherman Antitrust Act makes unlawful "[e]very contract, combination in the form...

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