in this case north they filed in nearly fifty page complaint that explained that salon county is the most concentrated health insurance market in california and that's due to kaiser health near complete monopoly in that market the complain explained how western health advantage in north bay its fifty percent owner and network hospital system threaten that monopoly and it detailed three specific ways that kaiser attacks north bay to maintain its monopoly yet despite these extensive allegations the district court dismissed the complaint and in doing that it made three key errors st the court ignored what was going on in the market and the threat that north and western posed to kaiser's insurance monopoly which is critical context when you're evaluating a monopoly maintenance claim nd the court was in appropriately skeptical of the specific allegations of exclusionary conduct that kaiser engaged in including steering of patients tearing up of a long term voluntary mutually beneficial reimbursement agreement and the an overnight fifty percent reduction in payments to north bay and rd the court misunderstood the nature of north days and he trust injury and the clear legal authorities in which arrests you know i'd like to address these points in turn but i'm happy to answer any questions the i mentioned at the beginning it st like to start kind of with with the market and what was going on in the market at the time both because we're on a motion to dismiss and we're entitled to have the allegations of our complaint looked at as a whole and also because differentiating between vigorous competition on the merits by a monopolist from exclusionary conduct depends a lot on the context and what we see in this case is that kaiser controlled nearly ninety percent of the salon a county commercial health insurance market  faced little competition there with some rivals exiting or shrinking in the market and western which was already westerns only serious competitor in the market at the time became a more compact more significant competitive threat increasing it market share by thirty percent from two thousand and twelve to two thousand and fifteen and it was able to do that because north bay again it's in network hospital system and fifty percent owner had engaged in a four hundred million dollars massive program headed of investment campaign to improve its programs  those were kaiser gained the ability in two thousand and sixteen after seeing its market share decline for three consecutive years to steer trauma patients and it began to do that now the thing to keep in mind there is kaiser had the opportunity as the salon of county trauma bay station to do that again that ability in two thousand and sixteen it had the incentive to do that both because north bay as a the most centrally located trauma facility in the county should receive an overwhelming portion of the trauma patients in the county and those trauma patients usually or the magistrate judge seemed to not take those allegations found them implausible not the claim was implausible but the allegations essentially as i understood it suggesting that why would doctors who have this ethical responsibility i think the gauge in such conduct i think the district to do that is just you know we can't this is just contrary to doctors error and it's briefing here right a motion to dismiss we're entitled to have our allegations as being is being treated as true and reasonable inferences there from their plausible well it's not the allegations that have to be possible even if it's a claim that you know the claim is after you look lame has to be pla exactly so what probably it all set up is that you still have to treat even even allegations that you don't think will be proven out of born out as being true and you have to give us reasonable inferences there from and then taking all of those things together then you determine whether you possibly stick stated a claim so they understand what you're saying is that these three kaiser entities the hospital insurance plan and the doctors group permanente whatever it's called that they centrally conspired together  various well our monopoly maintenance claim is dependent on an agency relationship between the i can see relate whatever they're all connected together they work together right kaiser is an integrated as we understand it's an integrated healthcare system kaiser health sells insurance and that gets you access to  kaiser doctors kaiser hospitals permanente doctors so what the thrust at least for as far as steering trauma patients goes is that you know kaiser hospitals is running the space station and is being effectively directed by kaiser health just your trauma patient away from north bay into itself because those patients are lucrative and we don't just to be clear we think we're entitled to the truth of those allegations but we also don't think that that's kind of a crazy idea that kaiser would direct its doctors to do that  it's we could probably point to examples a few minutes on google would probably point to examples of doctors doing that of doctors and gauging and sort of self interested behavior especially in circumstances in which you know they they might sort of over the grand scheme of things might think that on average it doesn't do harm to the patient where they can get care down the road and here is something that perhaps it's certainly possible that a doctor might think well in most cases it won't make that much of a difference but that's not what the trauma writing claim kaiser health as a monopolist is not allowed to engage in certain acts that even an ordinary in our business enterprise would do that's sort of a general principle of of a monopoly maintenance claim so x so the steering other than other than could be explained by steering and that is we have alleged that north from the time before or took over the base station after north face trauma volume drop by fifteen percent in conjunction with a specific example of th elements might explain the lowering rate of your hospitals if what you're saying you're entitled to discover what we're saying is that if they want to raise a factual defense to they can certainly do that summary judgment or trial and we have this other allegation that kaiser terminated that reimbursement contract that they had and then began pain at a significantly lower rate than what they had been pain contract which resulted in lower i guess revenue to north bay that's correct but there's there's no claim that the termination of the contract was a breach of the contract apparently they had the right to do that correct the contract as i understand it was terminal oh well that's correct but what's where how does the fact that they charge a higher earlobe are they paid a lower rate was was reasonable to allow us to continue to invest and the point of the reduction in payments is that kaiser didn't just cut its payments from fifty percent of say our chargemaster rate of what we would normally charge and to anyone walking up the street they cut their rates by fifty percent of the negotiated rate that they had had contractually agreed to and under state law they're required to pay reasonable and customary charges and our contention is that cutting cutting the negotiated rate by fifty percent overnight with no change in service and no other circumstances to explain it and without even giving any reason for shows that that was unreasonable and shows that they were really intending what they were really trying to do is deprive north bay of funding while it recovered the funds through a state court recognizes is that a monopolist can engage in exclusionary conduct in myriad ways that's cases like united states versus microsoft and various cases various other cases because the types of ways that they could seek to exclude their competitors and some basis other than the merits is it's just too innumerable to really fathom and so what we're saying is that this is just one way that they were trying to starve north bay of our revenue to keep it from continuing its improvements and to keep and to keep western from becoming a more attractive insurance off the other thing understood about the district court order was that there was no antitrust injury here that is the other issue that the court pointed out and you know i think when thinking about antitrust that but the supreme court has been clear that we don't artificially engraft engraft artificial limitations on that and that there is no black letter rule that can govern in every case now are antitrust injury is come straight out of the supreme court's decision in mccready as well as this court's decisions and ostroff else and as well as a variety of out of circuit authority that we relied on and all that that line of cases really says is that when a person is the very means or the fulcrum or the conduit or a necessary step in carrying out an anti competitive scheme that person suffers antitrust injury and that makes sense because what antitrust injury is really concerned with is the directness of the injury and ensuring that it reflects the pro competitive purposes of the antitrust laws and so if you've got someone who's the direct forseeable victim of an anti competitive scheme it just makes sense that they would that they would suffer antitrust injury just as much as any anybody in the restraint market if you want to save time i would like to save out of my time for a thank you thank you good morning your honors may it please the court my name is jason murray i represent two of the a pelleas here today kaiser permanente health foundation and kaiser permanente hospitals with me and tom ryan who represents the permanente medical group with the court's indulgence we're splitting our argument time today i will keep track of it but i'd like to reserve four minutes of my time for mr ryan and his client your honour's as judge bill or found we were spectrally submit that this case presents little more than an everyday reimbursement dispute between a health insurer and a hospital in fact that underlying dispute continues in state court now even today which is again we respectfully submit exactly where it belonged in the st place at the case with state there was an application st in the state it was denied my understanding is set for trial in november that's outside the record but pellets have put into the record excuse me the complaint itself and they're welcome to contradict me but i believe that it continues now are critically your honor and i'm going to try to limit my remarks here today to i trust injury that seems to be where the court is going mr will primarily address conspiracy allegations and why they're not plausible if you have questions on that we respectfully urge this court that the and i trust injury requirement as this court has found many times exists to separate ordinary business disputes contract clause i contract torts from harm to competition from ed i trust claims that are viable after three attempts and lengthy medical complaints north bay was unable to do that and judge beeler  seeing as being seen as legitimate business behavior for example having less trauma patients if your competitor in this case kaiser hospitals becomes the trauma center level two trauma center for the county and the county's guidelines require unless the patient is somehow destabilizing that level two trauma patients go to your hospital that's a very plausible reason why trauma volume for north bay might drop in those circumstances this court's case law and following an interpretive distilling twamley and it ball require further factual enhanced ment's to show that it's not simply a result of something other than anti competitive conduct and that's all that judge people are required here she looked at the county protocol she looked at the allegations and by the way if i may take those a slightly deeper level the steering allegations in the nd minute nd amended complaint are really only you know if you parse them carefully one of that a sick patient wound up at north bay that's the steering to allegation that there's no allegation that patient wound up at a kaiser hospital and  an indigent patient wound up somewhere there's no allegation in that paragraph paragraph fifty five the nd a medic complaint that the patient the indigent patient was steered to north bay so under those circumstances your honor we submit the judge well that's correct and that's an equally plausible at least if not more plausible reason why north face trauma volume might have gone down by the way that was awarded in a competitive bidding situation north bay can penalize or i don't think the complaint about that the fact is that they were kaiser is the trauma center that's correct which isn't again your honor that's why something more is required factual and have met before the inference can be drawn that you know as you pointed out one of the one of your honor's pointed out why judges paramedics apparently even the vacaville fire department might have reasons to send trauma patients other than a conspiracy to monopolize the health insurance market there's the county trauma guidelines if i may address a couple of other points about anna trust injury your honor i think you've nailed i think you've honed in on the most important one which is that there's no unlawful conduct here sufficient to require or to allow a claim of monopoly maintenance the nd act of unlawful conduct it's alleged is nothing more than the terminations of an at will contract in order for kaiser to lower its costs that's pro competitive not anti competitive and even the outlier cases that point of site in there excuse me that  appellant cites in its opening brief following aspen skiing do not go that far aspen skiing is a refusal to deal case there's no refusal to deal here or simply refusal to pay north bay as richly as it would like to be paid as this court pointed out an aero tack that is not the stuff of which monopoly maintenance claims are made sense it is a concern against a north bay that there was a recording just anywhere in the recording where kaiser says is this a kaiser patient is that does that cause concern well your honor i would respectfully submit that judge bueller did not rely or takes you dish will notice of that recording and it's not necessary for this court to affirm it but no it should be of no cause no concern whatsoever in fact integrated health plans like kaiser and let me just pause to say if that were enough to state a conspiracy claim then every integrated health plan in america is somehow an unlawful conspiracy  alleged to have done so and if i can just turn back to to judge jack's question no it's not it's not an antitrust violation for his or doctor to send a kaiser patient to a kaiser hospital that's that's why we have integrated health plans to lower costs for consumers create more competition and improve the health care system but to have it as a tree house question i just wondered if it might raise concern well again i don't want to delve too deeply into that transcript yes it is part of the record but it is on appeal but it is not something that judge bueller relied upon in reaching her decision the transcript makes plain if you look at it i think it's supplemental excerpts of record makes plain that the doctor said hey assuming she's fine is she a kaiser patient if she's not do what you've got to do in the field center where you need to send her that's what the transcript says but it's not important because in order to make out a claim for any competitive conduct they have to show a pattern of steering not the just one doctor got one thing wrong and by the way going to judge bay is question how i think it's our having to get that information without discovery your honor to get to discover that would be to put the course that the cart before the horse the very reason we have stringent and i trust injury requirements in cases like this is to prevent unless there are plausible allegations officially yet that's that's why the trust injury requirement is there your honor set up st by the the supreme court and  reiterated many times in adm american admonishment the one thousand year since kendall musical instruments is to prevent the massive cost of discovery the interim effect on settlement that a few allegations could otherwise set off and i submit to you she very very carefully in a lengthy and thorough opinion did exactly that she walked through each step of the and i trust injury element of the claim and determined that the factual allegations as to that element were not plausible and you for the clarification that she found any facts whatsoever she again parsed the elements of the claim and because the conduct that was alleged is frankly so minimal and so off base with the typical monopolization claims right exclusive dealing predatory pricing tying she looked at each of them and said even these factual allegations are insufficient because i see other equally plausible reasons why this conduct could have taken the county guidelines on the fact that this is a trauma hospital require factual and had spent before i believe doctors are off alone for the doctors are off you know breaking their hippocratic oath and nd by the way there again no one who what when where of just hold on one second the students are out there want to come in and watch they can come up and sit in the front row up here put four minutes back on the clock that's very kind of you know the morning your honor may please the court my name's tom wright i have the privilege of representing the permanente medical  group i would like to split my time i'm going to give you some context and what i think are crucial for you to think about them going to use last two minutes to address some of the questions that i believe you've already raised about plausibility about claims versus facts and what facts are really here and aren't these troubling inch and there be discovery to begin with we're only a defendant in one course of action the conspiracy course of action it was dismissed it was dismissed properly und twamley basically hold you have to plead plausible claims before you get discovery here the context of plausibility when this case started we were being sued for trying to monopolize doctors  on the california that left after the st motion dismiss that it became well this isn't really about trying to hurt them a competitor this was about trying to hurt you ha a plan and most recently become we're an agent we're all mixed in together we know that you're all really one people those rays really issues of let's see what the actual facts are and then apply it to law in this circuit the actual facts are yes we have contracts to provide medical services to kaiser patien we get paid to see kaiser patients at these hospitals the concept that in order to somehow gild the lily we have engaged in steering to take patien ambulances to get the last penny i understand on a motion dismissed we can't contest that but we find it offensive to be honest with you and the concept of we've got court with our hands in the cookie jar makes us go down one level to what actually was alleged against us didn't just a great thing to agree with it i think everybody agrees that steering if you can really show steering that's an element of antitrust violation no that she found it implausible that doctors would do such a thing because i don't think that judge reminded me of the doctor said the critic of i understand the we all hope doctors do the right thing i think if there was actually a plausible allegation or any factual allegation i'll leave plausible to the claim if there was actual factual allegations that we were doing that she has to ignore the fact that she hopes that's not true why don't we look at why was actually alleged against us they need an agreement to conspire ok they don't ledge anywhere in this complaint that we conspired that we agreed with kaiser foundation plan to cuzco the hospital hey let's take out w h y we don't like this plan it's a lot of county we're going to help you take them out that's not in their was a contract that was terminated a contract we're not a party to a contract that they apparently had the right to terminate and their only allegation against us is in paragraph seventy one of the a complaint sometime before may we were told not that they were going to try to take out w h a as a competitor but that they were going to terminate this plan and that quote some unnamed person  medical group a seated under twamley kendall music that doesn't get you there that's not questioning the plausibility of the facts that's looking at the facts and say that doesn't pay higher rates and just as we were trying to keep our own patients quote unquote own patients to us we were sending poor patients to them a double whammy what do they actually allege there's not one patient that they've allege where cherry patient that they said ended up with them from an ambulance because we did something improper there's nothing in that complaint where they actually say that and that's not concern on trauma if you're really really destabilized you go to the closest place you can get to if you're not destabilizing there's a reason their hospital was picked as a level two trauma center in the county they were supposed to the best they competed for they failed to get it in the earlier complaint they complained about it until one of our motions dismiss we mention the words nor pennington and then suddenly that went away we're playing a constantly mole theory here and i think you have to put it into cont my associates if i said this out loud keep kill me or he's actually my partner now god bless him i said let my people go if you have questions i'll be more than happy to try to respond honestly and s thing is we've talked a little bit about the trauma call and i think at this point kaiser is really trying to disavow the contents of the trauma call even though they cited extensively in their briefing and if you look just briefly at the at the trauma call what it really gets you to is you see the doctor at every stage violating the writing protocol himself and trying to keep the patient away from north and at the very beginning the paramedic was coming from via a home at the southern tip of the county and that the right response for the doctor to give on the call was to send the patient to john your which was the designated trauma to syllabi at that time the paramedics smartly wanted to take the patient to north bay because she was a seventy seven year old woman with an open head wound who had just been hit thirty to fifty miles an hour  and that was the closest trauma trauma center that was capable of treating her and instead the doctor took full the patient told the paramedic take it to kaiser voc a bill instead which was just not the right call and then at in the nd call later and also asked about insurance which he was not allowed to do under the under the writing protocol and then the nd call when at that point the patient was really to compensating the right answer was to send the patient to north bay and instead at that point the doctor was trying to route the patient to john muir where he'd been racing this case will actually fairly limited we've alleged three very specific types of exclusionary conduct concerning a single a single health system plaintiff and a single health system defendant in a small county in california it wouldn't take that much time to review a few one hundred or a few one thousand trauma patient calls to see whether there's more evidence of this kind of steering it wouldn't take that much effort to sort of look and see whether there was something else to their decision to determinate  conduct of monopolists through its agent we don't know exactly what discovery is going to reveal and we think that conspiracy claim is is potentially viable depending on what the economic relationship shakes out to be but the other reality is all of the cases that they cite kendall in ri musical instruments etc those cases all concerned parallel conduct by completely independent parties and we don't have that here i mean we have alleged extensively i think at paragraph seventy one and one hundred and four of our complaint all of the contractual interconnectedness between them and the fact they share they share profits they share finances and so they all have a common incentive to to make sure that kaiser health is the dominant force and remains the dominant force and so on the county for obvious