Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca6-14-04166/USCOURTS-ca6-14-04166-0/pdf.json

Nature of Suit Code: 410
Nature of Suit: Antitrust
Cause of Action: 

---

1 

RECOMMENDED FOR FULL-TEXT PUBLICATION 

Pursuant to Sixth Circuit I.O.P. 32.1(b) 

File Name: 16a0068p.06 

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT 

_________________ 

THE MEDICAL CENTER AT ELIZABETH PLACE, LLC, 

Plaintiff-Appellant, 

v. 

ATRIUM HEALTH SYSTEM, et al., 

Defendants-Appellees. 

┐

│

│

│

│

│

│

│

┘

No. 14-4166 

Appeal from the United States District Court 

for the Southern District of Ohio at Dayton. 

No. 3:12-cv-00026—Timothy S. Black, District Judge. 

Argued: October 8, 2015 

Decided and Filed: March 22, 2016 

Before: MERRITT, DAUGHTREY, and GRIFFIN, Circuit Judges. 

_________________ 

COUNSEL 

ARGUED: Richard A. Ripley, HAYNES AND BOONE, LLP, Washington, D.C., for 

Appellant. Charles J. Faruki, FARUKI IRELAND & COX P.L.L., Dayton, Ohio, for Appellees. 

ON BRIEF: Richard A. Ripley, HAYNES AND BOONE, LLP, Washington, D.C., James Alan 

Dyer, SEBALY, SHILLITO & DYER, Dayton, Ohio, Anne M. Johnson, Ryan Paulsen, Sally 

Dahlstrom, HAYNES AND BOONE, LLP, Dallas, Texas, for Appellant. Charles J. Faruki, 

Laura A. Sanom, FARUKI IRELAND & COX P.L.L., Dayton, Ohio, Thomas Demitrack, 

JONES DAY, Cleveland, Ohio, for Appellees. 

 MERRITT, J., delivered the opinion of the court in which DAUGHTREY, J., joined. 

GRIFFIN, J. (pp. 16–26),delivered a separate dissenting opinion. 

>

 Case: 14-4166 Document: 36-2 Filed: 03/22/2016 Page: 1
No. 14-4166 Med. Center at Elizabeth Place v. Atrium Health Sys., et al. Page 2 

_________________ 

OPINION 

_________________ 

MERRITT, Circuit Judge. Section 1 of the Sherman Act broadly prohibits “combinations 

in restraint of trade.”1 Plaintiff claims that defendants conspired to deny it access to managed 

care contracts that plaintiff needed to compete in the hospital market in Dayton, Ohio. The 

question in this case is whether defendants, four previously independent hospitals now operating 

as a hospital “network” under the name “Premier Health Partners,” is a “combination” subject to 

liability under § 1 of the Sherman Act, or whether it should be characterized as a single entity 

competing in the marketplace for hospital services in the Dayton area. The four hospitals entered 

into a joint operating agreement that merged2 some of their healthcare functions, but retained 

control of others, and they continued to compete with each other. The district court held that the 

Premier group was a single entity and dismissed this antitrust case on summary judgment 

without adjudicating the question of whether the behavior of the Premier group of hospitals 

constitutes impermissible anticompetitive conduct. We disagree and reverse and remand for 

further proceedings under the Sherman Act. 

I. Background 

Plaintiff, The Medical Center at Elizabeth Place, opened in 2006 and operates a 26-bed, 

for-profit, physician-owned hospital in Dayton, Ohio.3

 Plaintiff specializes in acute-care surgical 

services. Its competitors for surgical patients in the Dayton market include the defendant 

hospitals. Defendant Premier Health Partners was formed in 1995 when two Dayton-area 

hospitals entered into a joint operating agreement. Over the next 13 years, several additional 

 1

Section 1 of the Sherman Act prohibits any “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.” 15 U.S.C. § 1. 

2

A merger was not possible because one of the hospitals, Catholic Health Initiatives, Inc., was prohibited 

from joining a non-Catholic entity. 

3

In 2009, after struggling financially for three years, which plaintiff claims resulted from defendants’ 

illegal boycott, plaintiff sold a 49% ownership interest to Kettering Health Network, a major competitor of 

defendant Premier Health Partners in the Dayton market. The sale allowed plaintiff to gain access to Kettering’s 

managed-care contracts with local insurance companies and thereby increase its patient volume. 

 Case: 14-4166 Document: 36-2 Filed: 03/22/2016 Page: 2
No. 14-4166 Med. Center at Elizabeth Place v. Atrium Health Sys., et al. Page 3 

hospital corporations in the area entered into Premier’s joint operating agreement.4 Premier 

Health Partners, through the joint operating agreement, operates four hospitals: Good Samaritan 

Hospital, Miami Valley Hospital, Atrium Medical Center, and Upper Valley Medical Center. 

See Second Amended and Restated Joint Operating Agreement of Premier Health Partners 

(executed Feb. 2008). Premier is not a hospital, does not provide any health care itself, and has 

no assets of its own. Instead, Premier handles much of the financial business of the hospitals 

through the joint operating agreement, including negotiating managed-care contracts with 

insurance carriers. The defendant hospitals share revenues and losses through an agreed-upon 

formula set forth in the joint operating agreement, but each defendant maintains separate 

ownership of its assets. Defendant hospitals file separate tax returns and other corporate forms 

and documents filed with the government. 

Plaintiff claims that the hospital defendants are not a single entity, but instead a group of 

hospitals capable of concerted action to keep plaintiff from competing in the market. Plaintiff 

offers proof that the group engaged in concerted action in three principal ways: (1) to coerce 

commercial health insurers that collectively represent at least 70% of the insured consumers in 

Dayton to refuse to negotiate contracts for managed care with plaintiff and to otherwise deny it 

access to their networks, thereby depriving plaintiff of the ability to serve a large segment of the 

Dayton consumer market; (2) by threatening punitive financial consequences to physicians who 

affiliated with plaintiff, including terminating leases that physicians had with defendant hospitals 

for office space or terminating or evicting physicians already leasing from defendant facilities, 

and threatening to withhold referrals; and (3) by compelling physicians, either through threats of 

punitive measures or through financial incentives, to refuse to admit their patients to plaintiff 

hospital. 

The question cannot be answered in the abstract as to whether a joint venture like the one 

here constitutes a single entity incapable of conspiring with itself in an anticompetitive manner, 

or whether, instead, it becomes a vehicle to facilitate separate entities to conspire illegally to 

restrain trade. In American Needle, Inc. v. National Football League, 560 U.S. 183, 203 n.10 

 4

The corporate defendants, in addition to Premier Health Partners, are Atrium Health System, Catholic 

Health Initiatives, MedAmerica Health Systems Corporation, Samaritan Health Partners, and UVMC. 

 Case: 14-4166 Document: 36-2 Filed: 03/22/2016 Page: 3
No. 14-4166 Med. Center at Elizabeth Place v. Atrium Health Sys., et al. Page 4 

(2010), the Supreme Court relied on Justice Brandeis’s multi-factored test in Board of Trade of 

Chicago v. United States, 246 U.S. 231, 238 (1918), to determine whether a joint venture 

constitutes a “combination” under Section 1: 

The true test of legality is whether the restraint imposed is such as merely 

regulates and perhaps thereby promotes competition or whether it is such as may 

suppress or even destroy competition. To determine that question the court must 

ordinarily consider the facts peculiar to the business to which the restraint is 

applied; its condition before and after the restraint is imposed; the nature of the 

restraint and its effect, actual or probable. The history of the restraint, the evil 

believed to exist, the reason for adopting the particular remedy, the purpose or 

end sought to be attained, are all relevant facts. This is not because a good 

intention will save an otherwise objectionable regulation or the reverse; but 

because knowledge of intent may help the court to interpret facts and to predict 

consequences. 

(Emphasis added.)5

 The summary judgment record leaves little doubt on the question of the 

intent of the network to prevent plaintiff hospital from entering the Dayton healthcare market. 

The deposition of the eventual head of plaintiff hospital contains the following testimony about a 

phone conversation he had with Thomas Arquilla, Executive Vice President of the Premier group 

of hospitals, one afternoon before the plaintiff hospital opened: 

The conversation started with him asking me the question, John, I understand that 

you are an investor in this new Regent Hospital [plaintiff hospital]. And I said 

yes, Tom, that’s true. I also understand that you are the chairman of the board of 

the hospital. Is that true? I said yes, it’s true. He said I want you to know that 

you are the enemy and that this is war, and you are not going to open this hospital. 

I replied to him are you going to kick me off of staff at Miami Valley Hospital? 

And he said John, I’m not going to tell you what we are going to do to you, but 

 5

Our dissenting colleague does not agree that this statement from Justice Brandeis in American Needle is 

relevant because it discusses facts relating to defendants’ intent, history and coercive behavior. The objection is 

strange because Justice Brandeis’s admonition is quoted at length in a case where the issue was whether the 

defendant was a single entity. Surely if the Supreme Court had thought that Justice Brandeis’s factors concerning 

conduct and intent were irrelevant, it would not have said they were relevant and directed lower courts to consider 

them. We understand that, at least on paper, the joint venture agreement, written by defendants themselves, aims to 

legitimate the cartel. But further factual determination is required to resolve whether the neutral words of the 

agreement belie the true aim of defendants’ association. We are tasked with looking at the evidence before us, 

which includes evidence of defendants’ unveiled threats to plaintiff and the words of defendants’ employees and 

agents concerning their views on the nature of the relationship among defendants. See Freeman v. San Diego Ass’n 

of Realtors, 322 F.3d 1133, 1150 (9th Cir. 2003) (“Defendants sabotage their theory by their own admissions. . . . 

Rarely do antitrust defendants serve up their own heads on so shiny a silver platter.”). Our colleague’s refusal to 

consider anything other than the joint venture agreement is tantamount to repealing Section 1 of the Sherman Act by 

allowing the cartel members themselves to write up the only facts to be considered. 

 Case: 14-4166 Document: 36-2 Filed: 03/22/2016 Page: 4
No. 14-4166 Med. Center at Elizabeth Place v. Atrium Health Sys., et al. Page 5 

there are many things that we can do to you, and we are going to do them. I said 

Tom, are you going to blow the facility up? And he laughed, and he said I already 

told you, John, there’s lots of things that we can do to you, and we are going to do 

them. You are not going to open this hospital. He then went on to say that our 

facility would suck off good paying patients, that we were going to be cherry 

pickers, and that we would suck off good patients. 

Fleishman Dep. at 118:12-119:10 (Oct. 22, 2013). 

American Needle sets out the framework we are to follow in deciding the “single entity” 

versus “concerted activity” question at issue in this appeal. Based on defendants’ stated intent to 

keep plaintiff out of the Dayton market, the evidence of coercive conduct threatening both 

physicians and insurance companies with financial loss if they did business with plaintiff, 

evidence of continued actual and self-proclaimed competition among the defendant hospitals, 

and evidence that the defendant hospitals’ business operations are not entirely unitary, we 

conclude that there is a genuine issue of material fact as to whether the defendant hospitals’ 

network constitutes a single entity or concerted action among competitors for purposes of 

Section 1 of the Sherman Act. 

II. Analysis 

The Sherman Antitrust Act is based on an often-difficult distinction between concerted 

and independent, unilateral action. Concerted activity is scrutinized more closely than unilateral 

behavior because “ʻ[c]oncerted activity inherently is fraught with anticompetitive risk’ insofar as 

it ‘deprives the marketplace of independent centers of decisionmaking that competition assumes 

and demands.’” Am. Needle, 560 U.S. at 190 (quoting Copperweld Corp. v. Indep. Tube Corp., 

467 U.S. 752, 768-69 (1984)). Specifically, Section 1 regulates concerted activity between two 

or more entities, outlawing “[e]very contract, combination . . . or conspiracy, in restraint of 

trade,” 15 U.S.C. § 1, a provision that has subsequently been limited to target only 

“unreasonable” restraints of trade. To prevail on a claim under § 1, a plaintiff must prove: (1) a 

contract, combination, or conspiracy; (2) producing adverse, anticompetitive effects in the 

relevant market; and (3) resulting in injury. See Expert Masonry, Inc. v. Boone Cty., Ky., 

 Case: 14-4166 Document: 36-2 Filed: 03/22/2016 Page: 5
No. 14-4166 Med. Center at Elizabeth Place v. Atrium Health Sys., et al. Page 6 

440 F.3d 336, 342 (6th Cir. 2006). This appeal looks only at the element addressed by the 

district court, which is the first element: whether defendants’ conduct is the result of two or 

more entities acting in concert or whether defendants, based on their participation in the joint 

operating agreement, function as a single entity in the market place. Our analysis is guided by 

American Needle, which sets out the standard to apply in distinguishing concerted from 

unilateral action. 

In American Needle, the Court looked at the conduct of members of an incorporated joint 

venture that organized the 32 NFL teams for purposes of marketing the NFL trademark for 

apparel. American Needle explained that “concerted action under § 1 does not turn simply on 

whether the parties involved are legally distinct entities.” 560 U.S. at 191. Rather, “substance, 

not form, should determine whether a[n] . . . entity is capable of conspiring under § 1.” Id. at 

195 (quoting Copperweld, 467 U.S. at 773 n.21). It is not dispositive that defendants organize 

themselves “under a single umbrella or into a structured joint venture,” id. at 196, as defendant 

hospitals did here. The “key,” according to the Court, is whether the “contract, combination . . ., 

or conspiracy” joins together “independent centers of decisionmaking . . . . If it does, the entities 

are capable of conspiring under § 1, and the court must decide whether the restraint of trade is an 

unreasonable and therefore illegal one.” Id. (citation omitted). The Court went on to hold that 

the 32 teams “remain separately controlled, potential competitors with economic interests that 

are distinct from [National Football League Properties’] financial well-being.” Id. at 201 (citing 

Herbert Hovenkamp, Exclusive Joint Ventures and Antitrust Policy, 1995 Colum. Bus. L.R. 1, 

52-61 (1995)). Given this explanation, the Court in American Needle concluded that the joint 

venture formed by 32 NFL teams, “at least” with regard to their decision collectively to license 

the teams’ independently owned intellectual property, was engaged in concerted rather than 

single-entity action and thus potentially violated Section 1. The Court reasoned that apart from 

the teams’ agreement to cooperate in exploiting these assets, they would be competitors in the 

market to produce and sell team-logo apparel and headgear by licensing their intellectual 

property and dealing with suppliers. 

Applying American Needle to examine the relationship among the defendant hospitals 

pursuant to the joint operating agreement, we come to the same conclusion. Like the joint 

 Case: 14-4166 Document: 36-2 Filed: 03/22/2016 Page: 6
No. 14-4166 Med. Center at Elizabeth Place v. Atrium Health Sys., et al. Page 7 

venture in American Needle, the joint operating agreement brings together “independent centers 

of decisionmaking” that “remain separately controlled, potential competitors with economic 

interests that are distinct” and thus are capable of concerted action. See Nathaniel Grow, 

American Needle and the Future of the Single Entity Defense under Section One of the Sherman 

Act, 48 Am. Bus. L.J. 449, 484 (Fall 2011) (“[W]henever the entity is controlled by, or itself 

controls, competing economic actors, it is engaged in concerted activity rendering single entity 

status improper.”); see also Areeda & Hovenkamp, Antitrust Law ¶ 1478a (2010) (The “most 

significant competitive threats arise when joint venture participants are actual or potential 

competitors.”). 

The Supreme Court looks beyond labels to recognize underlying collusion among 

competitors as violations of the Sherman Act. See Am. Needle, 560 U.S. at 191 (“[W]e have 

repeatedly found instances in which members of a legally single entity violated § 1 when the 

entity was controlled by a group of competitors and served, in essence, as a vehicle for ongoing 

concerted activity.”); accord Timken Roller Bearing Co. v. United States, 341 U.S. 593, 594-95 

(1951) (failing to “find any support in reason or authority for the proposition that agreements 

between legally separate persons and companies to suppress competition among themselves and 

others can be justified by labeling the project a ‘joint venture’”), overruled on other grounds by 

Copperweld, 467 U.S. at 764–65; United States v. Am. Tobacco Co., 221 U.S. 106, 187 (1911) 

(where the trust or holding company device brought together previously independent firms to 

lessen competition and achieve monopoly power, “the combination was in and of itself” is a 

restraint of trade); see also Federal Trade Comm’n & U.S. Dep’t of Justice, Antitrust Guidelines 

for Collaborations Among Competitors 9 (2000) (“[L]abeling an arrangement a ‘joint venture’ 

will not protect what is merely a device to raise price or restrict output . . . .”). 

American Needle directs us to look at a number of factors when determining whether 

multiple parties joined together in a joint venture are functioning as a single entity for purposes 

of Section 1 of the Sherman Act. We first look to the actual conduct of the parties to the joint 

venture: “We have long held that concerted activity does not turn simply on whether the parties 

involved are legally distinct entities. Instead, we have eschewed formalistic distinctions in favor 

of a functional consideration of how the parties involved in the alleged anticompetitive conduct 

 Case: 14-4166 Document: 36-2 Filed: 03/22/2016 Page: 7
No. 14-4166 Med. Center at Elizabeth Place v. Atrium Health Sys., et al. Page 8 

actually operate.” 560 U.S. at 191 (emphasis added). The Court went on to say that in looking 

at how the parties actually operate, “we have repeatedly found instances in which members of a 

legally single entity violated § 1 when the entity was controlled by a group of competitors and 

served, in essence, as a vehicle for ongoing concerted activity.” Id. (citing United States v. Sealy, 

Inc., 388 U.S. 350 (1967) (holding that Sealy was not a single entity, but instead an 

“instrumentality of the individual” parties)). 

The stated intent on the part of the defendants to engage in coercive behavior, as well as 

conduct providing evidence of that intent, is demonstrated by the conversation recited above 

between the CEO of plaintiff and the Executive Vice President of Premier, in which the Premier 

official stated his intention to keep plaintiff from entering the Dayton healthcare market. The 

record also contains evidence, through letters and emails, that physicians who collaborated with 

plaintiff in any way lost their leases for office space in properties owned by defendants and were 

threatened with loss of treating privileges at defendant hospitals. 

Boycott by Health Insurance Companies

Another example of alleged conduct indicating possible anticompetitive intent on the part 

of defendants arises from evidence that insurance companies were refusing to deal with plaintiff 

at the behest of defendant hospitals. Defendant hospitals each executed separate managed-care 

contracts with each insurance company. Plaintiff offered evidence that defendant hospitals each 

individually executed managed-care contracts with the insurance companies that contained 

language prohibiting the insurer from also contracting with plaintiff by including an explicit 

restriction on the insurer’s ability to add a new hospital to its network. See, e.g., Email dated 

Aug. 10, 2009, from Mark Shaw of Premier to Renee Johnson of Premier with subject line 

referencing “Medical Center at Elizabeth Place” and requesting that Ms. Johnson investigate 

whether certain insurance companies were violating their contracts with Premier by adding new 

hospitals to their networks. Access to managed-care contracts offered by insurers is crucial to a 

hospital’s financial success. The managed-care contracts with insurers provide the hospital with 

the volume (patients who are covered by the insurers) that is necessary to survive. If a hospital 

cannot contract with a number of insurers, or at least several insurers with large numbers of 

insureds, it is unlikely to admit enough patients, and it is only through patients that the hospital 

 Case: 14-4166 Document: 36-2 Filed: 03/22/2016 Page: 8
No. 14-4166 Med. Center at Elizabeth Place v. Atrium Health Sys., et al. Page 9 

generates revenue. Hospitals generally seek to become “in-network” or “preferred” providers for 

a number of insurers, often accepting lower rates from the insurance companies in exchange for a 

higher volume of patients. In this case, the forming of the joint venture, bringing the defendant 

hospitals under the umbrella of Premier Health Partners, facilitated negotiation with insurers for 

managed-care contracts. The Federal Trade Commission and the Antitrust Division of the 

Justice Department recognize that “collaboration that eliminates or reduces price competition or 

allows providers to gain increased bargaining leverage with [insurers] raises significant antitrust 

concerns.” Deborah L. Feinstein, Director, Bureau of Competition, Federal Trade Commission, 

Antitrust Enforcement in Health Care: Proscription, not Prescription, at 2, Address at the Fifth 

National Accountable Care Organization Summit (June 19, 2014). In this address, Director 

Feinstein also noted that “management contracts whereby one hospital manages another hospital 

with which it also competes may raise concerns similar to horizontal acquisitions.” Id. at 9. 

Negotiating contracts that explicitly exclude the insurers’ ability to contract with other 

parties is anticompetitive on its face and normally serves no proper business function, a fact 

recognized by the district court in its first order denying the motion to dismiss. The Med. Ctr. at 

Elizabeth Place v. Premier Health Partners, 2012 WL 3776444, at *5 (S.D. Ohio Aug. 30, 2012) 

(“Organizing a group boycott of [plaintiff] does not promote any legitimate objective of the 

[joint operating agreement] or achieve any procompetitive benefits.”). Plaintiff has submitted 

evidence that each insurer knew that the other insurers had included this limitation in their 

contracts, as demonstrated by the excerpt below from a Dayton industry publication: 

Premier has threatened to revoke privileges for physicians participating in 

[plaintiff hospital] and contracts with health plans such as Anthem and 

UnitedHealth are known to be contingent on excluding [plaintiff hospital] from 

the network. 

HealthLeaders InterStudy, Dayton Market Overview at 7-8 (Apr. 2008). In addition to this 

published account, plaintiff also offered evidence from insurance company emails and defendant 

hospitals’ Board of Directors meetings that, in addition to demonstrating knowledge among the 

insurers of the restriction on adding new hospitals to their networks in their managed-care 

contracts with defendant hospitals, the insurance companies regularly monitored each other to 

 Case: 14-4166 Document: 36-2 Filed: 03/22/2016 Page: 9
No. 14-4166 Med. Center at Elizabeth Place v. Atrium Health Sys., et al. Page 10 

ensure that the other insurance companies were complying with the contract restriction on 

dealing with a new hospital. 

The Joint Operating Agreement

American Needle also looked to other factors in addition to actual conduct, examining the 

nature of the business relationship among defendants, focusing on whether that relationship 

remains that of separate, competing entities or whether there is a single center of 

decisionmaking. As noted above, Premier owns no assets and it does not provide any healthcare 

services. Like the joint venture under scrutiny in American Needle, Premier is a separate 

corporate entity with its own management structure, including a CEO and a Board of Directors, 

some of whom are employees of the individual defendant hospitals. The joint operating 

agreement provides for certain management functions to be carried out by Premier on behalf of 

the defendant hospitals. Premier’s duties under the joint operating agreement are an attempt to 

achieve efficiencies in billing and collecting payments, managing physicians and physician 

groups, property management and other similar duties. American Needle emphasized that it is 

not dispositive that the parties to the joint venture have organized and created a legally separate 

entity that centralizes certain management functions. The Court stated that an “ongoing § 1 

violation cannot evade § 1 scrutiny simply by giving the ongoing violation a name and label. 

‘Perhaps every agreement and combination in restraint of trade could be so labeled.’” Am. 

Needle, 560 U.S. at 197 (quoting Timken Roller Bearing, 341 U.S. at 598). The joint operating 

agreement provides for some degree of unitary management, but questions remain as to whether 

“their general corporate actions are guided or determined by separate corporate 

consciousnesses.” Id. at 196 (quotation marks and citations omitted). 

The Premier joint operating agreement also provides for sharing revenue pursuant to an 

agreed upon formula. But, if the fact that potential competitors shared in profits or losses from a 

venture meant that the venture was immune from § 1, then any cartel “could evade the antitrust 

laws simply by creating a ‘joint venture’ to serve as the exclusive seller of their competing 

products.” Major League Baseball Props., Inc. v. Salvino, Inc., 542 F.3d 290, 335 (2d Cir. 2008) 

(Sotomayor, J., concurring in judgment). Indeed, a joint venture with a single management 

structure is generally a better way to operate a cartel because it decreases the risk that a party to 

 Case: 14-4166 Document: 36-2 Filed: 03/22/2016 Page: 10
No. 14-4166 Med. Center at Elizabeth Place v. Atrium Health Sys., et al. Page 11 

an illegal agreement will defect from that agreement. But, competitors “cannot simply get 

around” antitrust liability by acting “through a third-party intermediary or joint venture.” Am 

Needle, 560 U.S. at 201 (internal quotations omitted). 

Although joining together to carry out certain functions, defendant hospitals remain 

separate legal entities, each with their own assets, filing their own tax returns and maintaining a 

separate corporate identity with its own CEO and Board of Directors. The record also 

demonstrates that defendant hospitals compete with each other for physicians and patients, with 

each defendant hospital continuing to market certain hospital services to the public. Each of the 

defendant hospitals makes material independent decisions concerning their respective medical 

operations that are not managed by Premier, including staffing decisions and medical strategies 

concerning patient care.

Like the NFL teams in American Needle, each defendant hospital holds its own assets. 

Thus, the defendant hospitals only “partially” unite their economic interests, and they continue to 

have distinct, potentially competing interests. See Am. Needle, 560 U.S. at 198. Any joint 

venture involves multiple sources of economic power cooperating to produce a product or 

provide a service. The benefits of cooperation do not transform concerted action into unilateral 

action that puts the joint venture beyond the reach of § 1. As the Court noted, “Apart from their 

agreement to cooperate in exploiting those assets, . . . there would be nothing to prevent each of 

those teams from making its own market decisions . . . .” Id. at 200. Here, the defendant 

hospitals clearly did not completely align their interests, economic or otherwise. The defendant 

hospitals continue to function more or less as independent and competing hospitals that entered 

into the joint operating agreement largely to derive the benefit of conforming certain business 

practices to a uniform standard. The evidence shows that the joint venture under Premier’s 

management is composed of individual hospitals that are separately incorporated, hold their 

assets separately, and compete with each other for patients. Like the NFL teams, each defendant 

hospital “is a substantial, independently owned” business that is “guided [by a] ‘separate 

corporate consciousness[ ].’” Id. at 196 (quoting Copperweld, 467 U.S. at 771). 

 Case: 14-4166 Document: 36-2 Filed: 03/22/2016 Page: 11
No. 14-4166 Med. Center at Elizabeth Place v. Atrium Health Sys., et al. Page 12 

Defendant Hospitals Continue to Compete

The record also provides evidence that defendant hospitals continue to view themselves 

not as a single entity, but as competitors in the market. Defendants made statements to the 

public, among themselves and to a consultant hired by Premier, that demonstrate that they view 

themselves as separate entities. In 2010, Premier retained H*Works Consulting to help it devise 

a strategic five-year plan (2010-2015). One aspect of the study was to analyze the role of 

Premier and its relationship to its constituent elements, the defendant hospitals. As part of the 

process, 44 of defendants’ “executives and key stakeholders” were interviewed by H*Works on a 

number of topics, including the integration of defendant hospitals. Pearce Fleming of H*Works 

conducted all of the interviews of defendants’ executives, including Premier’s Board of Trustees, 

the top level executives at Premier, and senior management from all the defendant hospitals. 

Fleming took contemporaneous notes of each interview, generating 11 sets of handwritten notes. 

Based on these statements by defendants’ top administrators, H*Works made a number 

of findings, including the following: “[Premier] partners do not collaborate or act as a system 

today, more often [Premier] partners find themselves competing with each other;” “[Premier] 

does not have an identity as a collaborative group, rather act as a confederacy that collaborates in 

a few areas (i.e., supplies, financing/access to capital, electronic medical records);” “[Premier] 

does not think of itself as integrated organization;” and “[Premier] Partners compete with each 

other for market share.” H*Works Consulting, Key Interview Findings, at 8 (Apr. 2010). 

Specific statements from the interviews include: Premier is a “confederation of autonomous 

organizations” that cooperate in certain areas; “[t]he brand is the hospital, not [Premier];” 

defendant hospitals “do their own thing and act in their own self interest above that of 

[Premier];” and the joint venture structure was “designed to keep everyone separate.” H*Works 

Consulting Interview Statements at 2-5 (Apr. 2010). The H*Works findings and interview 

statements set forth in its reports to Premier provide evidence that defendant hospitals uniformly 

agree that the they are driven to pursue individual hospital goals even after entering into the joint 

venture. 

The district court refused to consider most of this compelling evidence, labeling it 

inadmissible hearsay. In refusing to consider the findings from H*Works, the district court 

 Case: 14-4166 Document: 36-2 Filed: 03/22/2016 Page: 12
No. 14-4166 Med. Center at Elizabeth Place v. Atrium Health Sys., et al. Page 13 

found the statements “incomplete, anonymous personal opinions . . . . lack[ing] any context,” 

ruling them “inadmissible, anonymous hearsay and speculation . . . .” The Med. Ctr. at Elizabeth 

Place v. Premier Health Partners, 2014 WL 7739356, at *4 (S.D. Ohio Oct. 20, 2014). To the 

contrary, many of the statements were attributable to a particular person. But, whether a specific 

identity is given or not, it was error to exclude these statements as they are admissions of a partyopponent, admissible under the hearsay exception in Federal Rule of Evidence 801(d)(2).6

 An 

anonymous statement may be admissible under Rule 801(d)(2) in certain circumstances that 

demonstrate sufficient indicia of reliability as to the authenticity of the statement. Davis v. Mobil 

Oil Expl. & Prod. Se., Inc., 864 F.2d 1171, 1174 (5th Cir. 1989) (holding that anonymous 

statement was admissible as a statement by a party’s agent under Rule 801(d)(2)(D), and noting 

that “a district court should be presented with sufficient evidence to conclude that the person 

who is alleged to have made the damaging statement is in fact a party or an agent of that party 

. . . .”). 

The statements fall within the hearsay exception for admissions of party opponents under 

Rule 801(d)(2)(D) because the district court was presented with “sufficient evidence” to 

conclude that the person who made the statement is in fact “a party or an agent” of defendants. It 

is undisputed that the speakers, though some are unidentified by name or specific title, were all 

executives or “key” stakeholders of defendant hospitals. The statements were made in the scope 

of their employment relationship and during the existence of the joint venture. They acted within 

the scope of their employment in stating their views on the state of their operations and 

integration of those operations at the request of Premier’s CEO. Thus, the sources of the 

 

6

The Rule states in relevant part: 

(d) Statements That Are Not Hearsay. A statement that meets the following conditions is 

not hearsay: 

. . . 

 (2) An Opposing Party’s Statement. The statement is offered against an opposing party 

and: 

(A) was made by the party in an individual or representative capacity; 

(B) is one the party manifested that it adopted or believed to be true; 

(C) was made by a person whom the party authorized to make a 

statement on the subject; 

(D) was made by the party’s agent or employee on a matter within the 

scope of that relationship and while it existed; or 

(E) was made by the party’s coconspirator during and in furtherance of 

the conspiracy

 Case: 14-4166 Document: 36-2 Filed: 03/22/2016 Page: 13
No. 14-4166 Med. Center at Elizabeth Place v. Atrium Health Sys., et al. Page 14 

statements are identified sufficiently to establish that they were made by agents of defendants 

acting within the scope of and during the existence of their employment relationship. See Ryder 

v. Westinghouse Elec. Corp., 128 F.3d 128, 134 (3d Cir. 1997) (holding in a similar situation that 

statements from unidentified executives were admissible because evidence established that 

though their precise identity was unknown, they were all “Westinghouse executives who had 

authority to make personnel decisions [and thus were] act[ing] within the scope of their 

employment in stating their views on the state of their workforce . . . .”). The crucial question is 

whether there is evidence that the unidentified declarants were speaking on a matter within the 

scope of their employment, not their identity. Back v. Nestle USA, Inc., 694 F.3d 571, 578 (6th 

Cir. 2012). 

III. Conclusion

The gravamen of plaintiff’s complaint is that in creating a joint venture, defendants 

colluded to keep plaintiff from competing in the Dayton hospital market through a number of 

avenues. The evidence of emails, letters, and the statements elicited by the consultant, together 

with the lack of shared assets by the defendants, raises a genuine issue of material fact as to 

whether defendant hospitals have “separate” corporate consciences or whether they should be 

considered a single entity for purposes of the antitrust laws. All of these facts suggest that 

defendant hospitals are actually competitors attempting to eliminate another competitor through 

concerted action. When viewing the record in the light most favorable to plaintiff, a reasonable 

juror might conclude that, aside from a business relationship pursuant to the joint operating 

agreement, defendant hospitals maintained separate identities and acted more like competitors 

than one unit. Expert Masonry, Inc. v. Boone Cty., Ky., 440 F.3d 336, 341 (6th Cir. 2006) (“In 

this circuit, courts are generally reluctant to use summary judgment dispositions in antitrust 

actions due to the critical ‘role that intent and motive have in antitrust claims and the difficulty of 

proving conspiracy by means other than factual inference.’”)(quoting Smith v. N. Mich. Hosp., 

Inc., 703 F.2d 942, 947 (6th Cir. 1983)). 

Because plaintiff presented evidence of conduct and business operations that raise the 

possibility of concerted action among defendant hospitals, the question remains upon remand 

 Case: 14-4166 Document: 36-2 Filed: 03/22/2016 Page: 14
No. 14-4166 Med. Center at Elizabeth Place v. Atrium Health Sys., et al. Page 15 

whether hospitals that had previously pursued their own interests separately, and that continue to 

seem to compete, combined unlawfully to restrain competition. 

For the foregoing reasons, the judgment of the district court is reversed, and the case is 

remanded for further proceedings consistent with this opinion. 

 

 Case: 14-4166 Document: 36-2 Filed: 03/22/2016 Page: 15
No. 14-4166 Med. Center at Elizabeth Place v. Atrium Health Sys., et al. Page 16 

_________________ 

DISSENT 

_________________ 

GRIFFIN, Circuit Judge, dissenting. To succeed on a § 1 claim under the Sherman 

Antitrust Act, a plaintiff must establish that the defendants: “(1) participated in an agreement 

that (2) unreasonably restrained trade in the relevant market.” Worldwide Basketball and Sport 

Tours, Inc. v. NCAA, 388 F.3d 955, 959 (6th Cir. 2004). Because § 1 “does not reach conduct 

that is wholly unilateral,” Copperweld Corp. v. Indep. Tube Corp., 467 U.S. 752, 768 (1984) 

(internal quotation marks omitted), proving the first element involves a threshold showing that 

the defendants are separate entities capable of concerted action. That is the only question before 

us: “whether defendants . . . should be characterized as a single entity.” (Majority opinion.) 

The test we apply to determine single-entity status is from American Needle and 

Copperweld: whether the defendants are “separate economic actors pursuing separate economic 

interests,” such that their agreement “‘deprives the marketplace of independent centers of 

decisionmaking,’ . . . and thus of actual or potential competition.” Am. Needle, Inc. v. Nat’l 

Football League, 560 U.S. 183, 195 (2010) (quoting Copperweld, 467 U.S. at 769). 

My colleagues begin not with American Needle and Copperweld, but with the “rule of 

reason” as articulated in Board of Trade of Chicago v. United States, 246 U.S. 231 (1918)—a 

test that may come into play only for the second part of the inquiry—i.e., in determining whether 

the agreement itself constitutes an “unreasonable restraint” on trade. See Am. Needle, 560 U.S.

at 203 (“[T]he restraint must be judged according to the flexible Rule of Reason.”) (footnote 

omitted); see also Worldwide Basketball, 388 F.3d at 959 (“Whether an agreement unreasonably

restrains trade is determined under one of two approaches: the per se rule and the rule of 

reason.”).1

 Reaching this issue is premature. Because of its ruling that defendants are a single 

entity for § 1 purposes, the district court never considered whether defendants “participated in 

[any] agreement,” much less an agreement to restrain trade unreasonably. 

 1

Citing the rule of reason seems all the more misplaced here, where plaintiff alleges that defendants’ 

conduct constitutes a per se violation of § 1, not a violation under the “flexible Rule of Reason.” Am. Needle, 

560 U.S. at 203. 

 Case: 14-4166 Document: 36-2 Filed: 03/22/2016 Page: 16
No. 14-4166 Med. Center at Elizabeth Place v. Atrium Health Sys., et al. Page 17 

The majority’s misapplication of American Needle is problematic. Invoking the rule of 

reason steers focus to defendants’ intent to avoid competition with plaintiff and away from the 

relevant question: whether, under the terms of their Joint Operating Agreement (JOA), 

defendant hospitals and their joint operating company, Premier Health Partners (Premier), share 

“a complete unity of interest,” Copperweld, 467 U.S. at 771, and represent a single center of 

decisionmaking. I conclude they do. Thus, I would affirm summary judgment in favor of 

defendants and respectfully dissent. 

I. 

“The Sherman Act contains a ‘basic distinction between concerted and independent 

action.’” Id. at 767 (quoting Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752, 761 (1984)). 

Section 2 of the Act governs conduct by a single firm that “threatens actual monopolization,” 

while § 1 reaches “unreasonable restraints of trade effected by a ‘contract, combination or . . . 

conspiracy’ between separate entities.” Id. at 767–68 (quoting 15 U.S.C. § 1). Concerted 

activity between two parties is “inherently . . . fraught with anticompetitive risk.” Id. at 768–69. 

“In any conspiracy, two or more entities that previously pursued their own interests separately 

are combining to act as one for their common benefit.” Id. at 769. As a result, the conspirators 

profit from increased economic power, while depriving the market “of the independent centers of 

decisionmaking that competition assumes and demands.” Id. 

That concern does not apply, however, when the actors share “a complete unity of 

interest,” such as when the coordinated conduct occurs between officers and employees of the 

same company, or a corporation and one of its unincorporated divisions. Id. at 769–71. 

“[O]fficers 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. Following this reasoning in Copperweld, the 

Supreme Court held that the coordinated activity of a parent corporation 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. 

 Case: 14-4166 Document: 36-2 Filed: 03/22/2016 Page: 17
No. 14-4166 Med. Center at Elizabeth Place v. Atrium Health Sys., et al. Page 18 

Although Copperweld limited its inquiry to the context of parent and wholly owned 

subsidiary corporations, see id. at 767, the Court emphasized “the broader principle that 

substance, not form, should determine whether a separately incorporated entity is capable of 

conspiring under § 1.” Id. at 773 n.21. Whether two legally separate entities constitute a single 

actor depends upon commonality of interest, not corporate formality. Thus, “although a parent 

corporation and its wholly owned subsidiary are ‘separate’ for the purposes of incorporation or 

formal title, they are controlled by a single center of decisionmaking and they control a single 

aggregation of economic power. Joint conduct by two such entities does not ‘depriv[e] the 

marketplace of independent centers of decisionmaking.’” Am. Needle, 560 U.S. at 194 (quoting 

Copperweld, 467 U.S. at 769). 

The Supreme Court reiterated the substance-over-form analysis in American Needle, 

which involved an antitrust claim against National Football League Properties (NFLP), an 

organization formed by the 32 teams in the National Football League (NFL), “to develop, 

license, and market [each team’s] intellectual property.” 560 U.S. at 187. Traditionally, NFLP 

granted nonexclusive licenses to vendors, including American Needle, to manufacture and sell 

clothing bearing NFL team insignias. Id. In 2000, however, NFLP granted Reebok an exclusive 

license to sell trademarked headwear for all 32 teams. Id. American Needle sued, claiming the 

NFL, its teams, the NFLP, and Reebok violated §§ 1 and 2 of the Sherman Act. Id. at 187–88. 

Defendants NFL and NFLP asserted they were incapable of conspiring with each other “because 

they are a single economic enterprise, at least with respect to the conduct challenged.” Id. at 

188. The district court agreed and granted defendants’ motion for summary judgment. The 

Seventh Circuit affirmed, noting the teams “can function only as one source of economic power 

when collectively producing NFL football.” Id. 

The Supreme Court reversed. Explaining the single-entity inquiry, the Court stated: 

[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 

 Case: 14-4166 Document: 36-2 Filed: 03/22/2016 Page: 18
No. 14-4166 Med. Center at Elizabeth Place v. Atrium Health Sys., et al. Page 19 

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 195 (citations omitted). 

Applying this test, the Court ruled the independently owned NFL teams were capable of 

conspiring with one another. Though “partially unite[d]” by the fact that they all benefit from 

the success of the NFL brand, each team “still ha[d] distinct, potentially competing interests.” 

Id. at 198. Teams compete with one another on the field for fans, for contracts with managerial 

and player personnel, and “in the market for intellectual property.” Id. at 196–97. A team 

licensing its intellectual property “is not pursuing the common interests of the whole league but 

is instead pursuing interests of [the] ‘corporation itself,’. . . teams are acting as ‘separate 

economic actors pursuing separate economic interests,’ and each team therefore is a potential 

‘independent cente[r] of decisionmaking.’” Id. at 197 (quoting Copperweld, 467 U.S. at 770) 

(citation omitted). The fact that the teams had formed the NFLP to market their brands through a 

single outlet was not dispositive. “An ongoing § 1 violation cannot evade § 1 simply by giving 

the ongoing violation a name and a label.” Id. 

Whether the NFLP’s decisions constituted concerted action was a closer question. “This 

is so both because NFLP is a separate corporation with its own management and because the 

record indicates that most of the revenues generated by NFLP are shared by the teams on an 

equal basis.” Id. at 200. Nevertheless, because each team acted for its own separate interest in 

making NFLP decisions, the Court held that those decisions fell within the reach of § 1. Id. 

“Thirty-two teams operating independently through the vehicle of the NFLP are not like the 

components of a single firm that act to maximize the firm’s profits.” Id. at 201. Instead, each 

team garnered economic benefits “separate and apart from NFLP profits as a result of the 

decisions they make for the NFLP.” Id. Accordingly, because each team was acting for its own 

interest, and not simply the interest of the NFLP as a whole, “decisions by the NFLP regarding 

the teams’ separately owned intellectual property constitute[d] concerted action.” Id. 

 Case: 14-4166 Document: 36-2 Filed: 03/22/2016 Page: 19
No. 14-4166 Med. Center at Elizabeth Place v. Atrium Health Sys., et al. Page 20 

II. 

As the majority states, American Needle “eschewed formalistic distinctions in favor of a 

functional consideration of how the parties involved in the alleged anticompetitive conduct 

actually operate.” Am. Needle, 560 U.S. at 191. Guided by the rule of reason, my colleagues 

interpret this directive to mean that we should ask how defendants “actually operate” with regard 

to plaintiff—specifically, their intent to keep plaintiff out of the market as expressed through 

apparent threats by Premier’s executives and the boycott defendants allegedly arranged among 

the insurance companies. This view is flawed. Defendants’ intent to exclude others from the 

market is irrelevant to determining whether defendants themselves constitute a single entity. To 

resolve that question, we should consider how defendants “actually operate” amongst each other. 

American Needle asks if “the [anticompetitive] agreement joins together independent 

centers of decisionmaking” between the defendant entities. 560 U.S. at 196 (internal quotation 

marks omitted). Defendant hospitals were independent centers of decisionmaking before 

forming Premier as their joint operating company, but the question here is whether that 

independence survived the creation of the joint venture; whether, when acting through Premier, 

defendants are “pursuing the common interests of the whole,” or whether each defendant has a 

remaining, independent economic interest, such that it could be “pursuing the interests of [the] 

corporation itself,” even in the course of taking joint action. Id. at 197 (internal quotation marks 

omitted). What matters then is whether defendants remain in competition with each other, not 

whether they intend to ward off competition with a third party. The Supreme Court’s reasoning 

makes this point plain: 

Agreements made within a firm can constitute concerted action covered by § 1 

when the parties to the agreement act on interests separate from those of the firm 

itself . . . . 

For that reason, decisions by the NFLP regarding the teams’ separately owned 

intellectual property constitute concerted action. Thirty-two teams operating 

independently through the vehicle of the NFLP are not like components of a 

single firm that act to maximize the firm’s profits. The teams remain separately 

controlled, potential competitors with economic interests that are distinct from 

NFLP’s financial well-being. Unlike typical decisions by corporate shareholders, 

NFLP licensing decisions effectively require the assent of more than a mere 

 Case: 14-4166 Document: 36-2 Filed: 03/22/2016 Page: 20
No. 14-4166 Med. Center at Elizabeth Place v. Atrium Health Sys., et al. Page 21 

majority of shareholders. And each team’s decision reflects not only an interest in 

NFLP’s profits but also an interest in the team’s individual profits. 

Id. at 200–01 (citations and footnotes omitted). Defendants’ wish to avoid competing with 

plaintiff tells us nothing about whether defendant hospitals are themselves “potential competitors 

with economic interests that are distinct from [Premier’s] financial well-being” as a whole. 

III. 

 The best evidence of how Premier and the defendant hospitals “actually operate” is the 

parties’ JOA. The majority concedes that the JOA vests Premier with control over the hospitals’ 

“management functions,” but insists—without discussion of the agreement’s terms—that 

“questions remain” as to whether defendants are guided by a single corporate consciousness. 

Review of the JOA should resolve those questions. From the outset, the JOA identifies corporate 

unification as an overarching goal: “The vision of the Parties is to create and operate the JOC 

[joint operating company] Network as a multi-entity, integrated health care delivery system for 

the Miami Valley Region that is positioned for the future and not simply a continuation of the 

large JOC Hospitals.” 

Executing on that vision, the agreement creates a “unity of interest” among defendant 

hospitals by establishing a system of shared income: 

 The JOA provides that its financial arrangements are intended to promote the 

functioning of Premier and defendant hospitals as an “integrated health 

system.” 

 Defendants’ net incomes are totaled each year into a single “network net 

income,” to be allocated to the parties based on predetermined percentages in 

the JOA. 

 Defendants also share losses according to the same predetermined 

percentages. 

Most importantly, the allocation of network net income is not linked to any individual hospital’s 

revenue or profitability. For example, defendant MedAmerica Health Systems is entitled to 

55.35% of the network net income under the JOA. Because defendants’ revenues are combined 

in totaling the network net income, MedAmerica receives 55.35% of the profit earned from a 

patient regardless of whether that patient is treated at Atrium Health System, Samaritan Health 

 Case: 14-4166 Document: 36-2 Filed: 03/22/2016 Page: 21
No. 14-4166 Med. Center at Elizabeth Place v. Atrium Health Sys., et al. Page 22 

Partners, Catholic Health Initiatives, UVMC, or MedAmerica’s own facility. Unlike the NFL 

teams in American Needle, who maintained “economic interests . . . distinct from NFLP’s 

financial well-being,” 560 U.S. at 201, no single hospital has any incentive to become more 

profitable by attracting more patients than the other.2 The majority is therefore incorrect to say 

“defendant hospitals compete with each other for . . . patients.” They do not. 

To be sure, revenue sharing is not dispositive of single-entity status. Competitors cannot 

side-step antitrust liability merely by sharing revenue through a joint venture. “If the fact that 

potential competitors shared in profits or losses from a venture meant that the venture was 

immune from § 1, then any cartel ‘could evade the antitrust law simply by creating a “joint 

venture” to serve as the exclusive seller of their competing products.’” Am. Needle, 560 U.S. at 

201 (quoting Major League Baseball Props., Inc. v. Salvino, Inc., 542 F.3d 290, 335 (2d Cir. 

2008) (Sotomayor, J., concurring in judgment)). 

But defendants’ integration is not limited to profits and losses on a balance sheet. The 

JOA grants Premier significant operational authority over each defendant hospital. In particular: 

 It designates Premier as the “operator” for all health system activities and 

requires Premier to coordinate and have authority over all of those activities. 

Premier has general authority to operate and manage the operations of the 

health system activities of all defendants. 

 Defendant hospitals’ CEOs report to Premier’s COO. 

 Each defendant’s management reports to Premier’s executives, and Premier’s 

system vice presidents and senior vice presidents serve at the top of each 

department throughout the system. 

 Premier has integrated a number of system management functions among 

defendant hospitals, such as managed care and legal functions, into single 

departments for the entire system. 

 The JOA grants Premier authority and control over defendants’ strategic 

plans, budgets, and business plans. 

 The JOA requires Premier to develop and oversee the implementation of a 

strategic plan for all system activities, and each defendant must comply with 

and implement the strategic plan. 

 2

Additionally, defendants’ counsel represented at oral argument that Premier sets prices for all hospital 

services performed by physician-employees, ensuring that each hospital charges the same price for the same service. 

 Case: 14-4166 Document: 36-2 Filed: 03/22/2016 Page: 22
No. 14-4166 Med. Center at Elizabeth Place v. Atrium Health Sys., et al. Page 23 

 It also requires Premier to develop annual capital expenditure and operating 

budgets for the system, and each defendant must adopt and implement the 

budget approved for it by Premier. 

 Premier’s CEO has the power to remove each defendant hospital’s CEO. 

 Premier controls defendant hospitals’ material debt incurrence and negotiates 

and manages their relationships with insurance companies. 

Although each defendant hospital retains its separate corporate existence, along with the right to 

amend or repeal their corporate governing documents, the JOA requires them to “take all 

corporate action . . . as required to implement” Premier’s authority. Defendants are also 

prohibited from modifying corporate documents in a manner inconsistent with the JOA without 

prior approval. To the extent defendant hospitals’ corporate documents conflict with the JOA, 

the JOA controls. 

The majority’s reply that “defendant hospitals remain separate legal entities . . . [each] 

filing their own tax returns and maintaining a separate corporate identity with its own CEO and 

Board of Directors” is beside the point. Finding an issue of fact on these grounds elevates form 

over substance. “[T]he question is not whether the defendant is a legally single entity or has a 

single name”; rather, the question is one of functional reality. Am. Needle, 560 U.S. at 195. And 

the functional reality is that the JOA unifies defendant hospitals under Premier’s flagship. 

That reality is not changed by the fact that the hospitals maintain individually-owned 

assets. Neither American Needle, nor Copperweld, discusses the role of asset ownership as part 

of the single-entity inquiry. Yet the majority makes a point of quoting the single mention of 

“assets” in American Needle: “NFLP’s licensing decisions are made by the 32 potential 

competitors, and each of them actually owns its share of the jointly managed assets. Apart from 

their agreement to cooperate in exploiting those assets, including their decisions as the NFLP, 

there would be nothing to prevent each of the teams from making its own market decisions 

relating to purchases of apparel and headwear, to the sale of such items, and to the granting of 

licenses to use its trademarks.” Id. at 200 (citation omitted). 

This language does not establish that asset ownership is important to the single-entity 

inquiry. Viewed in context, the Court’s mention of assets is merely a reiteration of its primary 

 Case: 14-4166 Document: 36-2 Filed: 03/22/2016 Page: 23
No. 14-4166 Med. Center at Elizabeth Place v. Atrium Health Sys., et al. Page 24 

holding; “there would be nothing to prevent each of the [NFL] teams from making its own 

market decisions” because they remained independent centers of decisionmaking capable of 

acting on separate economic interests—even while making joint decisions through the NFLP: 

The 32 teams capture individual economic benefits separate and apart from NFLP 

profits as a result of the decisions they make for the NFLP. NFLP’s decisions 

thus affect each team’s profits from licensing its own intellectual property. 

“Although the business interests of” the teams “will often coincide with those of 

the” NFLP “as an entity in itself, that commonality of interest exists in every 

cartel.” In making the relevant licensing decisions, NFLP is therefore “an 

instrumentality” of the teams. 

Am. Needle, 560 U.S. at 201 (citations omitted). Here, by contrast, defendant hospitals are not 

capable of acting on separate economic interests. All of their profits are shared as part of the 

network net income. They do not “capture individual economic benefits separate and apart 

from” that income. Id. Individual ownership of assets carries little weight when all the 

economic benefit of those assets is mutually shared. Defendant hospitals are also distinguishable 

from the teams in American Needle by virtue of their decision to cede substantial operational 

control over to Premier. Consequently, there is something to prevent them from making “[their] 

own market decisions” wholly “[a]part from their agreement to cooperate in exploiting [their 

individually-owned] assets.” Id. at 200. 

To the extent that asset ownership matters, it must be evaluated as part of American 

Needle’s “functional analysis,” id. at 192, which in this case directs us back to the JOA. The 

JOA grants Premier substantial control over the defendant hospitals’ individually-owned 

assets—a fact the majority does not address. Defendant hospitals are prohibited from “sell[ing], 

convey[ing], transfer[ring], or otherwise dispos[ing] of any material asset used in JOC 

Activities” to any entity other than a fellow defendant hospital without Premier’s prior approval. 

Further: 

 It gives Premier authority to use any of defendant hospitals’ resources, 

facilities, or supplies for the system’s activities. 

 Plaintiff cited no evidence to dispute defendants’ claim that Premier has, in 

fact, consolidated programs, moved equipment between facilities, and limited 

procedures occurring in certain facilities. 

 Case: 14-4166 Document: 36-2 Filed: 03/22/2016 Page: 24
No. 14-4166 Med. Center at Elizabeth Place v. Atrium Health Sys., et al. Page 25 

 The JOA also authorizes Premier to assess costs to the hospitals for 

implementation of new technologies and programs—including building, 

equipment acquisition, and training costs—and Premier exercises that 

authority. 

Functionally, defendant hospitals own their assets in name only, without deriving any individual 

benefit from those assets. Defendants’ inability to manage their own assets should therefore 

serve as another marker of Premier’s centralized control—not a fact that brings their corporate 

unification into question. 

IV. 

In addition to defendants’ anticompetitive intent, and individually-owned assets, the 

majority finds that the anonymous H*Works statements are evidence “that defendant hospitals 

continue to view themselves . . . as competitors in the market.” I disagree. 

Setting aside the question of admissibility, this evidence does not create a genuine issue 

of material fact. “When the moving party has carried its burden . . . , its opponent must do more 

than simply show there is some metaphysical doubt as to the material facts.” Matsushita Elec. 

Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986) (footnote and citation omitted). 

While we may reasonably infer that the issue of economic integration was within the scope of 

employment for some of the 44 “executives and key stakeholders” involved in the H*Works 

project, the circumstances surrounding the statements do not prove that the statements are related 

to that issue. 

The purpose of the H*Works project was to help Premier “devise a strategic five-year 

plan,” and “analyze the role of Premier and its relationship to . . . defendant hospitals.” 

(Majority opinion.) According to plaintiff, defendants “hoped to . . . improve strategic 

integration, coordination, systems thinking and market leverage”—goals that involve more than 

just economic integration. The variety of topics addressed in the H*Works statements confirms 

as much; they include thoughts on creating a more “patient centered approach,” Premier’s need 

to “expand to other communities,” and complaints from doctors that Premier “must answer the 

‘what’s in it for me’ question for physicians and prove it to them.” 

 Case: 14-4166 Document: 36-2 Filed: 03/22/2016 Page: 25
No. 14-4166 Med. Center at Elizabeth Place v. Atrium Health Sys., et al. Page 26 

The JOA establishes “control[] by a single center of decisionmaking [i.e., Premier],” as 

well as “a single aggregation of economic power.” Am. Needle, 560 U.S. at 194. Defendants 

have therefore carried their burden to establish an overall unity of interest. Plaintiff has not 

rebutted the factual basis for defendants’ motion. Considered in context, the H*Works 

statements cast no more than a “metaphysical doubt” upon that unity. Thus, “the record taken as 

a whole could not lead a rational trier of fact to find for the non-moving party,” and “there is no 

genuine issue for trial.” Matsushita, 475 U.S. at 587 (internal quotation marks omitted). 

V. 

Defendants’ alleged conduct in this case, if proven at trial, is indeed anticompetitive. But 

the Sherman Act does not proscribe unreasonable restraints on trade by a single entity; “it leaves 

untouched a single firm’s anticompetitive conduct (short of threatened monopolization) that may 

be indistinguishable in economic effect from the conduct of two firms subject to § 1 liability.” 

Copperweld, 467 U.S. at 775. “Congress left this ‘gap’” purposefully, “for eminently sound 

reasons.” Id. A prohibition against independent action “that merely restrains trade . . . could 

deter perfectly competitive conduct by firms that are fearful of litigation costs and judicial error.” 

Am. Needle, 560 U.S. at 190 n.2. Regardless of their intent to keep plaintiff out of the market, 

defendants have demonstrated a complete unity of interest and a single center of decisionmaking. 

“Unless we second-guess the judgment of Congress to limit § 1 to concerted conduct,” 

Copperweld, 467 U.S. at 776, we are without authority to check them. 

For these reasons, I respectfully dissent. I would affirm the judgment of the district court. 

 Case: 14-4166 Document: 36-2 Filed: 03/22/2016 Page: 26