Wesley Health Sys., LLC v. Forrest Cnty. Bd. of Supervisors
| Decision Date | 09 October 2012 |
| Docket Number | CIVIL ACTION NO. 2:12-CV-59-KS-MTP |
| Parties | WESLEY HEALTH SYSTEM, LLC d/b/a WESLEY MEDICAL CENTER PLAINTIFF v. FORREST COUNTY BOARD OF SUPERVISORS d/b/a FORREST GENERAL HOSPITAL, et al. DEFENDANTS |
| Court | U.S. District Court — Southern District of Mississippi |
For all the reasons stated below, the Court grants in part and denies in part the Motion to Dismiss [25] filed by the Forrest County Board of Supervisors,1 grants the Motion to Dismiss [27] filed by Wade Spruill, and denies the motion to dismiss [29] filed by AAA Ambulance Service. Finally, the Court stays consideration of Spruill's Motion for Sanctions [36].
Plaintiff Wesley Medical Center alleges that Defendants - Forrest General Hospital, Wade Spruill, and AAA Ambulance Service - conspired to divert patients from Wesley to Forrest General. Plaintiff alleges that the Defendants ignored patients' desire to receive medical services at Wesley, intentionally falsified medical records to justify transporting patients to Forrest General, fraudulently obtained a disproportionate share of trauma funds from the State of Mississippi, intentionallyinterfered with Wesley's business practices, defamed Wesley by making false statements about the quality and type of services it offered, and ignored Mississippi's Trauma System destination guidelines. Plaintiff asserted claims under the Racketeer Influenced and Corrupt Organizations ("RICO") Act,2 claims under the Sherman Act,3 civil conspiracy, intentional interference with business relations, and defamation.
"Motions to dismiss under Rule 12(b)(6) are viewed with disfavor and are rarely granted." Lormand v. US Unwired, Inc., 565 F.3d 228, 232 (5th Cir. 2009) (punctuation omitted). "To survive a Rule 12(b)(6) motion to dismiss, [a plaintiff's complaint] need only include a short and plain statement of the claim showing that the pleader is entitled to relief." Hershey v. Energy Transfer Partners., L.P., 610 F.3d 239, 245 (5th Cir. 2010) (punctuation omitted). However, the "complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Great Lakes Dredge & Dock Co. LLC v. La. State, 624 F.3d 201, 210 (5th Cir. 2010) (punctuation omitted).
"To be plausible, the complaint's factual allegations must be enough to raise a right to relief above the speculative level." Id. (punctuation omitted). "The complaint need not contain detailed factual allegations, but must state more than mere labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do."PSKS, Inc. v. Leegin Creative Leather Prods., Inc., 615 F.3d 412, 417 (5th Cir. 2010) (punctuation omitted). When determining whether a plaintiff has stated a valid claim for relief, the Court must "accept all well-pleaded facts as true and construe the complaint in the light most favorable to the plaintiff." Great Lakes Dredge & Dock Co. LLC, 624 F.3d at 210. However, the Court will not accept as true "conclusory allegations, unwarranted factual inferences, or legal conclusions." Id. Legal conclusions may provide "the complaint's framework, [but] they must be supported by factual allegations." Ashcroft v. Iqbal, 556 U.S. 662, 664, 129 S. Ct. 1937, 1940, 173 L. Ed. 2d 868 (2009). A plaintiff must provide more than "threadbare recitals of a cause of action's elements, supported by mere conclusory statements, which do not permit the court to infer more than the mere possibility of misconduct." Hershey, 610 F.3d at 246 (punctuation omitted).
Of course, a "party may state as many separate claims . . . as it has, regardless of consistency." FED. R. CIV. P. 8(d)(3). The goal of this rule is "to afford a flexible procedural basis to permit full presentation of all relevant facts and legal theories at trial and to facilitate the final settlement of the dispute on its merits at that trial." Am. Bridge Div., U.S. Steel Corp. v. Director, Office of Workers' Compensation Programs, 679 F.2d 81, 83 (5th Cir. 1982). Accordingly, plaintiffs may plead contradictory grounds for relief. See Tenn. Gas Pipeline Co. v. Miss. Cent. R.R. Co., 164 F. Supp. 2d 823, 828-29 (N.D. Miss. 2001). This principle has bearing on the present case insofar as Plaintiff pled both that Forrest General merely owns an interest in AAA, and that Forrest General controls AAA. Rule 8 permits such contradictory pleading.
"RICO creates a civil cause of action for any person injured in his business or property by reason of a violation" of 18 U.S.C. § 1962. Davis-Lynch, Inc. v. Moreno, 667 F.3d 539, 550 (5th Cir. 2012). "Reduced to its three essentials, a civil RICO claim must involve: (1) a person who engages in (2) a pattern of racketeering activity (3) connected to the acquisition, establishment, conduct, or control of an enterprise." Huntington Nat'l Bank v. McCann, 268 F. App'x 359, 365 (5th Cir. 2008). To establish that Defendants engaged in a "pattern of racketeering activity," Plaintiff must show that Defendants committed at least two acts of racketeering activity, as defined by 18 U.S.C. § 1961(1). 18 U.S.C. § 1961(1), (5). Forrest General argues that it is immune from civil RICO liability because it is a government entity and, therefore, incapable of forming the specific intent necessary to commit any of the predicate acts alleged by Plaintiff.
Forrest General is a subdivision of Forrest County, Mississippi. See Enroth v. Memorial Hosp. at Gulfport, 566 So. 2d 202, 206 (Miss. 1990); Martin v. Memorial Hosp., 86 F.3d 1391, 1399 (5th Cir. 1996). Substantial authority exists for the proposition that government entities are incapable of forming malicious intent.4 However, Plaintiff alleged that Defendants committed at least ten acts of kidnapping. In Mississippi, "[k]idnapping is not a specific intent crime." Milano v. State, 790 So. 2d 179, 187 (Miss. 2001); see also Williams v. Puckett, 2000 U.S. Dist. LEXIS 22998, at *15 (S.D. Miss. July 20, 2000). "[I]t is sufficient that the surrounding circumstances resulted in a way to effectively become a kidnapping as opposed to the actual intent to kidnap." Id. Therefore, Forrest General's inability to form specific malicious intent is irrelevant to the kidnapping allegations.
Section 1 of the Sherman Act provides: "Every 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. To state a claim under Section 1 of the Sherman Act, "a plaintiff must show that the defendants (1) engaged in a conspiracy (2) that restrained trade (3) in a particular market." Tunica Web Adver. v. Tunica Casino Operators Ass'n, 496 F.3d 403, 409 (5th Cir. 2007) (punctuation omitted).
First, Forrest General argues that it is incapable of conspiring with the other Defendants because it owns and/or controls them. Copperweld Corp. v. Independence Tube Corp., 467 US. 752, 768, 104 S. Ct. 2731, 81 L. Ed. 2d 628 (1984) (punctuation omitted).
[A]n internal "agreement" to implement a single, unitary firm's policies does not raise the antitrust dangers that § 1 was designed to police. The officers of a single firm are not separate economic actors pursuing separate economic interests, so agreements among them do not suddenly bring together economic power that was previously pursuing divergent goals.
Id. at 769, 104 S. Ct. 2731. Therefore, "officers or employees of the same firm do not provide the plurality of actors imperative for a § 1 conspiracy." Id. Likewise, "§ 1 is not violated by the internally coordinated conduct of a corporation and one of its unincorporated divisions," Id. at 770, 104 S. Ct. 2731, and "the coordinated activity of a parent and its wholly owned subsidiary must be viewed as that of a single enterprise for purposes of § 1 of the Sherman Act." Id. at 771. Coordination among such parties "does not represent a sudden joining of two independent sources of economic power previously pursuing separate interests." Id.
"[S]ubstance, not form, should determine whether an entity is capable of conspiring under § 1." American Needle, Inc. v. NFL, 130 S. Ct. 2201, 176 L. Ed. 2d 947 (2010) (punctuation omitted).
[T]he question is not whether the defendant is a legally single entity or has a single name; nor is the question whether the parties involved seem like one firm or multiple firms in any metaphysical sense. The key is whether the alleged contract, combination or conspiracy is concerted action - that is, whether it joins together separate decisionmakers. The relevant inquiry, therefore, is whether there is a contract, combination or conspiracy amongst separate economic actors pursuing separate economic interests, such that the agreement deprives the marketplace of independent centers of decisionmaking, and therefore of diversity of entrepreneurial interests, and thus of actual or potential competition.
Id. at 2212 (punctuation and internal citations omitted). The "inquiry is one of competitive reality." Id.
Plaintiff alleged that AAA is "owned in part and/or controlled by" Forrest General. In Copperweld, the Supreme Court only addressed whether a parent corporation and its wholly-owned subsidiary could conspire in violation of Section 1 of the Sherman Act. Copperweld, 467 U.S. at 755, 104 S. Ct. 2731. In American Needle, the Court held that "competitive reality" - rather than corporate form - determined whether defendants were capable of conspiring. American Needle, 130 S. Ct. at 2212. The allegations of the Amended Complaint could be construed either way - AAA may be merely "owned in...
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