city of anaheim have continued force in this circuit there as the court is probably aware considerably controversy in the circuits in the district courts about what plausibility means under first the argument is that they have not allege that they him still they themselves have been harmed and you respond yes there is both concrete article three standing elso and i trust standing ok addressed the article three is what i'm interested in at the moment well we plausibly allege concrete injury because of direct purchases at monopoly prices of routine diagnostic testing  especially paid quest twenty eight dollars and thirty five cents as part of a deductible in two thousand and twelve i'm sorry she paid thirty seven fifty five in that and that time period as part of her deductible and then another testing she paid quest at monopoly prices as alleged fourteen dollars and thirty cents seventy five dollars in ten cents ok do you know their argument is but if she gets to the deductible by other means other expenses then of course this all washes out well this is clearly alleged but for these class right proposed class representatives she would not be exhausted her  other doctor visits or other to go if that's the question do you allege that she has not exhausted by other expenses yes by we are we are basically saying if she had exhausted her deductible she wouldn't be paying these dollars  her doctor dr bill obligation she had not if she had if she had exhausted her deductible by doctor visits or other billings before she got to the diagnostic testing they may have an argument that's not this case ok but when you don't specifically say it but you say it's reasonably infer from this well i think it's enough to say that she paid monopoly dollars as part of her deductible i mean we know i get the argument ok now let me just make sure the record is clear in this man and this two thousand and four august paid eighty two dollars and ten cents out of her deductible she also paid quest one thousand dollars and ninety cents at eight eight dollars and sixty four cents for test administered and i got and you don't don't as you know i believe that there is considerable controversy as what plausibility means in the short plain statement of an antitrust allegation six circuit courts in the last five years have issued opinions correcting the district courts and the seventh is the third circuit in the end or a lip a tour supplemental authority which is their last supplemental authority now at the risk of appearing to colloquial their it and having really looked at all these cases with care there seems to be out there in the district court and i'm not saying this is sara lee this characterizes this judge that if i'm skeptical plausibility means that i'm not skeptical elements of the cause of action but contains a sufficient allegations of underlying facts to give notice and then also also in your old bryant opinion brian puts as o'brien puts it and i believe this is this claim the complaint contain sufficient factual matter except it is true to state a claim to a relief that is plausible on its face so now that we can get past at least representing him what do you see as the antitrust violation that's that's this that's where i'm power of qwest in the relevant market as alleged the only issue here is whether the four exclusionary acts in combination under city of anaheim did they are they plausibly contributing to the sixty seven percent market share monopoly power that is that and that is is there unlawful maintenance of monopolization by for exclusionary conduct acquisition plan exclusive dealing provider exclusive now we do have a separate time count so the time one seems to me is not a very strong one i'm the one who seems to me the strongest is this leveraging by offering at least as you allege a really good price understand i'm talking about the leverage and claim i think what you call it the the claim where not time but the theory is i gather that quest offers to the doctor when they're paying really good price when the doctor himself or herself is paying out of the doctor's pocket yes and once they do that the doctor then bills through quickly assigns through quest the testing for the patients who in the paying themselves are paying through their plans and on circumstances downstream such that there's a substantial penalty if a provider does does not distribute quest diagnostic testing it so it's a defacto exclusive deal you do not need formal contracts and it's as a latch we don't say there are formal contracts there are formal contracts an exclusive deal in the capitated market that makes it different to break the tie or the provider exclusive dealing for the the rival but we never allege and the judge missed that are all due respect in the complaint the the relevant market exclusion is economic de facto exclusive dealing and it's very similar to the time claim so we let's look at this isn't the only viable economic option and there's coercion under time at the very least to drive significant portion of distribution away from the rivals by a firm with market power so they are related they're very closely related so if we don't meet the time test i think we do meet the den supply mcwane microsoft test as you know group rule eight eight ok to only requires that a short plain statement of an a trust claim there is no under twamley a law kendall and black and decker and the candles and the circuit black and decker in the fourth the court is not to act as it gaped keeper is not to high and to apply a heightened pleading standard and i trust cases because they're expensive and basically will him yes that will that's all true on the other hand twamley doesn't seem to sail on me we're stuck here the supreme court seems to have a de facto different standard for antitrust cases and look at w look very carefully at the complaint before we put the defendant to the expense of discovery and all that because the settlement value the court he's goes up astronomically as soon as you get past two of the six well you addressed that it didn't starve or cigar day went through and you were little and if you came to a kind of a resolution and i believe that we meet the star your best shot at figuring out what the court wants and of course there's been several circuit opinion since starr vs barca that addressed these issues conley beyond a reasonable doubt with plausibility and the court view that as a heightened pleading standard now now it's being morphed at the district courts into a probability standard well i'm a skeptical standard  and that's what this this district court did or it's it really is going as far as to be a predominant standard there at the fact we're entering summary judgment without discovery without a summary judgment motion and without a trial under kendall i we believe this is this complaint does address who what who did what to whom where and when the five w s we think we believe that  this this complaint is not characterized by general unadorned general allegation there's no hand waving here in my estimation there's no application of mere labels exclusion as not making a claim on its own you can find those it fifteen sixteen x pick circa record fourteen fifteen twelve  ten now if it had engaged in combine analysis it would first have to address after the first request acquisition the relevant market became highly concentrated raising significant competitive concerns the her from dol index was off the charts now that's an excerpt of record one ten paragraph ninety one second the degree of foreclosure as alleged very specifically we believe plausibly at least sixty five percent  foreclosure through acquisitions and the distribution crippling allegations three allegations that is far in excess of the less than thirty to forty percent closure microsoft says and i believe it's the prevailing law that you have to show for a monopolization action and here i want i refer to the court to excerpt of record one thirteen excerpt of record one twenty two for those sites  you're down to about a minute you're on reserve your time so let me just finish this line of argument thank you for your patience three the court would have to address and it never did and none of this  address that seven quest rivals had actually did the market as specifically alleged as a consequence of the distribution crippling and the acquisitions three were bought out that the total excerpt of record ten one ten one twelve and thirteen one twenty one one twenty one ninety five and one eight hundred my i have eight seconds and i thank you for your patients thank you different versions of the complaint and in each instance he properly applied the trombley standard he properly applied continental or and consider the allegations of exclusionary conduct both individually and collectively  the fact is the second demanded complaint does not tell a plausible story of any kind of competitive harm and viewed closely and viewed in  it in fact depicts a competitive market for clinical laboratory services in northern california let me call your attention if i may to a few of those specific allegations the complaint rates to h m o s the second amended complaint alleges that large insurance companies such as aetna and blue shield of california use their muscle to get big discounts from qwest complaint alleges that qwest faces substantial competition that's the phrase in paragraph eighteen substantial competition from its number one national competitor lab corps and that also competes with other on identified laboratories in northern california further the second amended complaint complaint alleges that qwest enjoys substantial economies of scale that's from paragraph eighty lower unit costs than its competitors also in paragraph eighty  and that it in addition it is unable to quote negotiate volume discounts that allow it to operate more efficiently and to offer steeper discounts for the benefit of consumers now these are not features of a market that is under the thumb of a monopolist they depict a competitive market that's functioning well and if i may let me jump ahead to the individual plaintiffs we have here antitrust laws about protecting competition and it's about protecting consumer welfare there are three consumers who are who are plaintiffs in this case and who make the following allegations and i'd like to address the standing point as well  that was raised by judge fletcher but let's look specifically at the prices that they paid ms eastman based list charges from quest for her tests for her daughter's tess of seven hundred forty seven dollars you know but that's all they had phony baloney numbers  just focus on the i mean we got those bills or so you were three million dollars but the actual price is twenty five cents let's talk about the twenty five cents i mean actually i hear your honor if i may take an intermediate step before getting to the amount paid the insurer then determines that allowed amount off of that list price which is as you say often quite a bit higher than i don't know who pays them but i've never seen anybody yes so the insurer in her case was price so where we're going with this my point your honor is twofold first of all i want to point out that there were substantial discounts available to each of these individuals and that substantial insurance coverage so the insurers negotiate to with qwest to get a price substantially below that list price and in turn the list price is a fantasy price we want to lose focus on the price actually paid and they're alleging that the price actually paid is a non competitive monopolistic price so i don't care about all those fantasy numbers i care about the number they actually pay ok and i understand my point is simply that the insurers  negotiating down the price with a guy that that point seems to me sensible and i get there and then the health plans have cost sharing features so that their members have some skin in the game and they pay some amount of the tests themselves and the two features that we usually see are deductibles and co pays but what's relevant in this case is the deductible because the allegation of the complaint i believe it's fifty four paragraph fifty four the allegation of the complaint is that in each instance the three plaintiffs had to make a payment out of their deductible because as was discussed earlier it wasn't yet exhausted so deductible is usually a fixed amount could be five hundred dollars it could be a thousand dollars nowadays it could be two thousand could be you know whatever that amount is it's a fixed capped amount and once you hit that amount and you've made that amount of out of pocket payment you don't pay anymore your full insurance coverage kicks in and the standing point is your honor pointed out earlier the standing point is we do not know from this complaint whether any of these individual plaintiffs would have jurisdictional discovery you i know you resisted on the other side you may want to do some jurisdictional discovery to see whether or not they have in fact exhausted but that sounds like a defense i mean they've alleged that they've been to money your honor they do allege that but the problem is this and each of these and each of the years in question two thousand and eleven two thousand and twelve two thousand and thirteen the year is closed out it's a knowable fact that could have been and should have been alleged whether they otherwise would have met their deductible so let's assume and you can ask them so as it should be in the complaint that plausibility demands the spindler versus johnson and johnson case stands for this proposition plausibility demands that they state whether or would doctor but would otherwise have been met because if it would not otherwise have a different title to some inference is reasonable inferences the reasonable inference is the problem you know i understand you know how antitrust context really despite what the court said what judge fletcher was saying i mean it does sort of impose them in extra obligation on the plaintiffs to plead but my goodness you want them to plead very very specific facts that's just in my mind is even contrary to to trombley not to mention ruling i mean it's just this is just what we have here a complaint in this case it's only it's forty seven fifty so much pages in this a small complaint compared to what we see in some other cases there are enormous complaints these days your honor i mean you're asking for a law on your i don't i don't believe so we're talking about whether there's article three standing and whether we get in the door now i mean i find it interesting that judge oric initially was concerned about about constitutional standing in his first order to get to the second order there's not even a mention of it in the third order  just kick the case i think i think in all candor the right way to approach this case is the way that he did which is to to go straight to the deficiencies in the end well no that's absolutely the wrong way steel company by the united states supreme court says you have to say they're some and there's a bit of wiggle in the complaint on this but with some wonder standing some commitment on the part of the physicians to also send their higher priced fee for service work which would be paid by the plans rather than the physicians themselves or by the individual who is not insured correct correct or by a government health plan whoever it might be whoever that third party payer or individual is who's paying the fee for service this is not a a an allegation that i think should concern you deeply here and certainly shouldn't provide a basis for a range and here's why there there is no allegation of any substantial foreclosure resulting from that practice first of all it's not true but i understand that we're here today we we need to treat those allegations as if they were first of all there is no such commitment and i would note there's no allegation that there's any written agreement in fact the only written agreement that exists and that is alleged is a capitation agreement which plaintiffs concede does not include any commitment of this type but again let's be generous let's assume the allegation to be true how many physicians are tied up with these capitation rates we don't know from this complaint how much foreclosure might there be we don't know from this complaint it simply says that there is this alleged practice of to some position groups unnamed completely on identified we don't know their size we don't know whether it's one group whether it's three physicians ten physicians onboard physicians so we have no basis from this alleged practice from determining that there's any substantial foreclosure what it is what we do know is that there's discount and discounting is usually thought to be a good thing from the perspective of consumers and from the perspective of antitrust law now  discounting be predatory it can be a there's a very difficult standard under brooke group and plaintiffs do not allege that that standard is met here can it otherwise be exclusionary perhaps  circuit's piece health decision perhaps leaves that door open but it would be a difficult showing to make but discounting is good and discounting in another itself confers no ability to raise your prices on the fee for service side so the mere fact if the theory is that we're leveraging by we're giving great prices over here and thereby and neighboring ourselves to raise the prices how is that so we have the insurance companies over there we have medicare setting prices there's no ability so to increase beyond the amounts stablished by medicare itself and with respect to payers we know from this complaint that they're they're negotiating hard that they are in power but it's a price in which they're making some money and they like that price and what they want to do is increase the number of orders that go to that payment so what they do is they go to the doctors offering them a really capitation because that then is going to give them the business that is quite profitable that's the argument and your honor the argument further i believe is that the doctors prefer that the second amended complaint says they've a preference for one stop shopping well of course they wanted to take the complaint in it in a sympathetic way the doctor preferred on two reasons number one they get a really good price on capitation and the doctors care about that because that they pay that themselves and then they get the convenience of i just have this i just have the quest for my office i don't have to have lab corp or anybody else now that's that's part of their obligation and and meeting the preferences of your customers your honor is something that a company that is acting in a competitive way a pro competitive way to want to do that is that is for the welfare of consumers and it's not the behavior of a monopoly and what if the private capitation price church of the antitrust laws but to get to your specific question of the low cost the complaint is unclear on this point there's an allegation that it's below cost but it's not clear below whose cost in other words the com is going to be well it could be other laboratories that are not as efficient that don't have the lower unit costs and substantial economies of scale that qwest is alleged to enjoy ok so it but but let's assume that it's below quest cost now that's a very very generous assumption because there's absolutely no specificity about what ques costs are or what possible basis these plaintiffs have for alleging that it's below ques costs and that it would lose money servicing those accounts but assuming it to be true that would raise a potential brook group predatory pricing issue which hasn't been alleged in this  complaint and i don't know what else to say about it if it worse you know in a sense a kickback i think that would raise other issues but it's not a section two of the sherman act issue and we're dealing with section two of the sherman act today thank you coun minutes very quickly the timing only viable economic option and the defacto exclusive dealing with providers are very similar use the same back patter and we say that if it doesn't meet the t giving a differential if you take the second product that all the cases we cite as a matter of law in our brief for economic coercion are only viable economic options are wrong as a matter of law th if that doesn't get them home this is not a case where if you what are our peanuts you got at it you got to take our popcorn and we'll give you a special price this is a case where we're giving you a very law low some time sometimes we don't say all the time below cost and brook group has nothing to do with these cases that we cite in on this doctored if you want that that if you want a good price on the peanuts  you gotta take our popcorn but you don't have to take all the popcorn you ever use you're not coerced to take the entire popcorn all the popcorn and also in the complaint we have very specific allegation that this is not just we have i sail xmen mr denzil an excerpt of record one fourteen one zero nine saying look the deal is if you want this is a declaration sponsored by the attorney general the state of california and another another litigation you gotta take you've got to give us all or pull through and invent and he says in very rare circumstances did they not do it and one of the reasons is one stop shop to it's very difficult for the rivals in the capitated market to attack that very low pricing because that's all under scoops of formal contract so they can't even get in there to make a quote to try to get the pull through business that makes it even more effective so there's more in this circuit nine hundred seventy seven if is sufficiently appreciable numbers of buyers of except decide it's enough to make out  sure as to paragraph eighteen i don't know why my learned colleague referred that paragraph this is what it's i think he referred to it as basically saying that there is very vigorous competition here and there is no market power it reads today largely because of qwest exclusionary practices it has only one substantial competitor in the plan outpatient market laboratory corporation of america the market is very concentrated and quest has by far the dominant