### In the



# United States Court of Appeals

For the Seventh Circuit

____________________

No. 21

‐ 3109

R ICARDO V ASQUEZ

, Plaintiff

‐ Appellant

,

v.

I NDIANA U NIVERSITY H EALTH

, I NC

., et al.

, Defendants

‐ Appellees

.

____________________

Appeal from the United States District Court for the

Southern District of Indiana, Indianapolis Division.

No. 21

‐ cv

‐ 1693

— Jane Magnus

‐ Stinson

, Judge

.

____________________

A RGUED A PRIL 8, 2022

— D ECIDED J ULY 8, 2022

____________________

Before W OOD

, H AMILTON

, and J ACKSON

‐ A KIWUMI

, Circuit

Judges

.

W OOD

, Circuit Judge

. Dr. Ricardo Vasquez is a vascular sur

‐

geon; he has practiced in Bloomington, Indiana, since 2006.

Vasquez alleges that in the time since he opened up shop, In

‐

diana University Health (IU Health) has amassed considera

‐

ble market power in the region’s medical industry. Vasquez

sued IU Health, claiming antitrust violations under the Sher

‐

man Act, 15 U.S.C. §§ 1–7, and the Clayton Act, id. §§ 12–27.2 No. 21

‐ 3109

IU Health moved to dismiss, arguing that neither the Sher

‐

man Act nor the Clayton Act claims were premised on a plau

‐

sible geographic market, and that the Clayton Act claims also

were time

‐ barred. The district court agreed on both points

and dismissed the suit. But V asquez’s allegations passed mus

‐

ter for the pleading stage, and so we reverse.

I

We begin with a few more details about Bloomington and

the surrounding region, Vasquez’s practice, IU Health’s his

‐

tory in the market, and the complaint’s allegations. At this

stage, we accept all well

‐ pleaded facts as true and draw all

reasonable inferences in Vasquez’s favor. Mashallah, Inc. v.

West Bend Mut. Ins. Co.

, 20 F.4th 311, 317 (7th Cir. 2021).

Bloomington is a city in Monroe County, Indiana, with a

population of about 90,000. The surrounding metropolita n

statistical area has a population of about 200,000. Blooming

‐

ton is th e largest metro area in its corner of southwestern In

‐

diana. From Bloomington, one can drive an hour and ten

minutes northeast to Indianapolis (population 865,000); two

hours southwest to Evansville (population 120,000); two

hours southeast to Louisville, Kentucky (population 620,000);

or two and a half hours east to Cincinna ti, Ohio (population

300,000). Most of the region bounded by those larger cities is

rural, albeit spotted with small cities and large towns.

Vasquez arrived in Bloomington in 2006 and soon after

opened an independent vascular

‐ surgery practice. Many vas

‐

cular

‐ surgery patients require treatment with specialized

equipment in a hospital se tt ing, and so Va squez sought and

obtained admi tt ing privileges at three di ff erent area hospitals:

Bloomington Hospital, Monroe Hospital, and the IndianaNo. 21

‐ 3109 3

Specialty Surgery Center. Vasquez performed the lion’s share

of his inpatient procedures (over 95%) at Bloomington Hospi

‐

tal, which had the best equipment.

IU Health entered the Bloomington market in 2010 when

it acquired Bloomington Hospital. (At the time, IU Health was

known as Clarian Health Partners; it rebranded in 2011. Clar

‐

ian wa s formed by the merger of three Indianapolis

‐ area hos

‐ pitals in 1997.) In May 2017, IU Health expanded its footprint

in southwestern Indiana by acquiring Premier Healthcare, an

independent physician group based in Bloomington. At the

time of the acquisition, Premier employed many of th e re

‐ gion’s doctors, especially primary

‐ care providers (PCPs).

Vasquez alleges that, as a consequence of the Premier acqui

‐

sition, IU Health now employs 97% of PCPs in Bloomington

and over 80% of PCPs in the wider region.

Vasquez’s alleged problems with IU Health began shortly

after the Premier acquisition. At th is early stage, li tt le turns on

the details, so we can be brief. Vasquez contends that in

“[a]pproximately 2017,” around the time of the acquisition, IU

Health launched “a systematic and targeted scheme” to ruin

his reputation and practice. The scheme was motivated by

Vasquez’s commitment to independent practice. IU Health

preferred to employ the region’s doctors directly, an agenda

which Va squez resisted. In June 2018, IU Health threatened to

revoke Vasquez’s privileges at Bloomington Hospital, and its

employees began to cast aspersions on his reputation—alleg

‐ ing, for example, that he had been sued with unusual fre

‐

quency. Needless to say, Va squez disputes the factual accu

‐

racy of these claims. In April 2019, IU Health followed

through on its threat, revoking Vasquez’s Bloomington ad

‐

mi tt ing privileges.4 No. 21

‐ 3109

In June 2021, Vasquez fi led this lawsuit. IU Health moved,

successfully, to dismiss, and Vasquez now appeals.

II

Vasquez’s appeal raises three issues: (1) the dismissal of

his claims under Sherman Act section 2, 15 U.S.C. § 2, and

Clayton Act section 7, id. § 18, fo r failure to allege a proper

geographic market; (2) the dismissal of the Clayton Act claims

on timeliness grounds; and (3) the decision not to give him

one opportunity to amend his complaint before dismissing

with prejudice. We review the first two issues de novo

, Warciak

v. Subway Restaurants, Inc.

, 949 F.3d 354, 356 (7th Cir. 2020),

and the th ird for abuse of discretion.

A

We begin with the geographic

‐ market analysis. Vasquez’s

complaint needed to allege only one plausible geographic

market to survive a motion to dismiss. See Bell Atlantic Corp.

v. Twombly

, 550 U.S. 544, 555 (2007). A rational jury could find

that Blo omington is such a market, as we now explain.

In FTC v. Advocate Health Care Network

, 841 F.3d 460 (7th

Cir. 2016) (“ Advocate ”), a case concerning a hospital merger,

we endorsed the use of the “hypothetical monopolist test” to

analyze geographic healthcare markets. As a general matter,

that test asks “what would happen if a single firm beca me the

only seller in a candidate geographic region.” Id. at 468. “If

that hypothetical monopolist could profitably raise prices

above competitive levels, the region is a relevant geographic

market.” Id. But if, instead, “customers would defeat the at

‐ tempted price increase by buying from outsi de the region, it

is not a relevant market; the test should be rerun using a larger

candidate region.” Id. In this sense, the inquiry “is iterative,No. 21

‐ 3109 5

meaning it should be repeated with ever

‐ larger candidates

until it identifies a relevant geographic market.” Id. Im

‐ portantly, the determination of the area of effective competi

‐

tion poses a question of fact, not one of law. See Fishman v.

Estate of Wirtz

, 807 F.2d 520, 531 (7th Cir. 1986).

We see no reason to break with Advocate here. The hypo

‐

thetical

‐ monopolist te st remains the best approach to geo

‐ graphic

‐ market analysis in the healthcare context. It focuses

courts’ attention on the crucial question whether it is possible,

within a given defined geographic area, for a hyp othetical sin

‐ gle firm to engage in anticompetitive practices ( i.e.

, raising

price or reducing output, or otherwise harming consumer

welfare). With that in mind, we turn to Vasquez’s arguments.

Vasquez first posits that the vascular

‐ surgery market in

Bloomington is inherently local. This is because “vascular sur

‐

gery patients need ongoing care, oft entimes lifetime care.” So,

Vasquez reasons, if a Bloomington patient “is sent to Indian

‐ apolis, that patient must continue to travel for a lifetime if he

or she wants continuity of care.” And because most patients

would consider that a bad deal—as Advocate recognized, see

841 F.3d at 470—insurers (the most directly affected bu yers

here) face pressure to provide vascular surgery in or near

Bloomington. 1 An insurer that does not provide such care

1 We note in this connection that the antitrust laws confer a right of

action on “any person

... injured in his business or property,” see 15 U.S.C.

§ 15, and that the Supreme Court has confirmed that both consumers, such

as the insurers here, and competitors, such as Vasquez, fall within the

scope of the la w. See Assoc. Gen. Contractors of Cal., Inc. v. Cal. State Council

of Carpenters

, 459 U.S. 519, 538 (1983) (“[T]he Sherman Act was enacted to

assure customers the benefits of price competition, and [the Court’s] prior6 No. 21

‐ 3109

risks being outcompeted by other insurers within Blooming

‐

ton. It follows that a hypothetical monopolist over vascular

surgery in Bloomington would be able to abuse its market

power considerably by jacking up payor prices and freezing

out potential competitors. In particular, because much vascu

‐

lar surgery is performed in a hospital setting with special

equipment, a hypot hetical vertically integrated monopolist

that controlled the hospital, the equipment, and most of the

surgeons would be well

‐ positioned to engage in anticompet

‐

itive practices.

Vasquez also alleges that vascular surgeons’ reliance on

referrals makes Bloomington an appropriate geographic mar

‐

ket in a second sense. The idea is that while Bloomington res

‐

idents may be willing to travel to India napolis for some cate

‐ gories of specialist care, they will not be willing to drive an

hour or more for routine primary care. Bloomington, after all,

has two hospitals, a medical

‐ school campus, and a metr o pop

‐

ulation that ought to be more than adequate to support a

healthy, competitive primary

‐ care practice market. All agree

that vascular surgeons, who are specialists, get most patients

by referral from primary

‐ care providers. Thus, a hypothetical

monopolist over primary

‐ care services in Bloomington would

control not only tha t market but also the flow of patients to

vascular surgeons. By cutting off the flow of new patients to

its vascular

‐ surgery competitors, the monopolist could cap

‐

ture the entire market, thereby positioning itself to raise payor

prices without repercussion.

cases have emphasized the central interest in protecting the economic free

‐

dom of participants in the relevant market”).No. 21

‐ 3109 7

Both stories are plausible accounts of how a hypothetical

monopolist could wield anticompetitive power in Blooming

‐

ton’s vascular

‐ surgery market. We could stop there; at the

pleading stage, a plausible scenario is all we require to estab

‐

lish the geographic market. But as it happens, Vasquez goes

considerably further. He alleges not on ly that a hypothetical

monopolist could dominate the Bloomington market in the

two ways he suggests but also that IU Health already does so.

With regard to vascular surgery itself, Vasquez contends that

IU Health controls the hospital with the most advanced

equipment and, other than him, all the vascular surg eons.

And regarding upstream referrals, he alleges without contra

‐

diction that IU Health employs 97% of the primary

‐ care phy

‐

sicians in Bloomington, meaning that virtually every patient

sees an IU Health PCP. (That is one reason why the existence

of other hospitals in the Bloomington area does not neces

‐ sarily defeat Vasquez’s claim.) To repeat: these contentions

are by no means nece ssary in order adequately to plead a ge

‐ ographic market. But they are sufficient. The hypothetical

‐ monopolist test concerns hypotheticals, as it says on the label,

not realities. But the detailed allegations about the on

‐ the

‐ ground realities in Bloomington drive home the key point:

Vasquez’s allegations easily clear the plausibility bar.

This is not the time to evaluate the merits of Vasquez’s al

‐ legations, an d that in any event is a task that requires expert

testimony. The motion

‐ to

‐ dismiss stage does not lend its elf to

rigorous hypothetical

‐ monopolist analysis. Normally, the

way that analysis is conducted is by survey. Experts canvass

a representative sample of local market participants, asking

about both their actual behavior in the market as it is and how

it would change if certain hypothetical conditions came to

pass. Here, for instance, an expert might try to determine at8 No. 21

‐ 3109

what price point an insurer would stop paying for vascular

‐

surgery services in Bloomington, opting instead to cover only

patients who went to specialists in Indianapolis. It may turn

out that Indianapolis providers are close enough to act as a

market check on any and all price increases. If so, Blooming

‐

ton would not be a geographic market. But for present pur

‐

poses, we cannot substitute our ow n speculations for the req

‐

uisite analysis. 2

It is worth recalling at this juncture what is required in a

pleading. As the Supreme Court put it in Twombly

, “a com

‐ plaint attacked by a Rule 12(b)(6) motion to dismiss does not

need detailed factual allegations

... .” 550 U.S. at 555. Indeed,

the allegations do not even need to establish the prob ability

of the plaintiff’s recovery. Id. at 556. They need only present

“enough fact to raise a reasonable expectation that discovery

will reveal evidence” of illegal acts. Id. So too in this case, we

need not decide whether Vasquez’s story is probable; we are

assessing only its plau sibility.

The district court found Vasquez’s complaint wanting for

two reasons. First, it thought that Vasquez’s geographic

‐ mar

‐

ket allegations were contradictory. The purported contradic

‐

tion was between two factual claims in the complaint: (1) that

2 We note, in this connection, that Vasquez alleges an alternative mar

‐

ket, “Southern Indiana,” which he defines to include Morgan, Owen,

Monroe, Brown, Greene, Daviess, Martin, Lawrence, Orange, and Wash

‐ ington counties. For present purposes, we focus on Bloomington, both be

‐

cause it is the smallest plausible market alleged and because the al terna

‐

tive market includes it. That said, the Southern Indiana market may turn

out to be the best object of analysis as this litigation progresses and further

facts emerge. Our present attention to the Bloomington market should in

no way be taken to limit the parties to arguments about th at market.No. 21

‐ 3109 9

patients “prefer to stay within Bloomington to receive care,”

and (2) that “many of the patients who arrive at Bloomington

Hospital for care travel from rural areas, some of them up to

two hours away.” The district court saw an inconsistency be

‐

tween the two claims, and it thou ght that clash undermined

the Bloomington market’s plausibility.

We see several problems with this reasoning. First, Federal

Rule of Civil Procedure 8(d)(3) specifically permits contradic

‐

tory pleadings, and so this criticism was misplaced. And in

any event, our own examination of the allegations persuades

us that they are not contradictory at all. They concern tw o dif

‐

ferent groups of people—urban and rural patients—with dif

‐

ferent expectations, motivations, and market behaviors.

Bloomington is a regional hub, home to a major university

and substantial medical infrastructure. Patients who reside

there no doubt expect to get most medical care close to home.

Patients in surrounding rural co mmunities, in contrast, real

‐ istically expect to travel to hospitals in large cities when the

alternative is getting sick or dying, though they may other

‐

wise prefer to purchase services at home in Loogootee (popu

‐

lation 2,751) or French Lick (population 1,841). Both allega

‐

tions could be true; in deed, both are true in many places. On

top of that, the allegation about two

‐ hour travel is hardly the

linchpin of Vasquez’s theory of the geographic market. It

comprises two clauses buried thirty pages into the complaint,

in the context of a tangential discussion of the impacts IU

Health’s alleged monopoly has on patients. And even assum

‐ ing some le vel of tension between Vasquez’s allegations, a fi

‐

nal problem is that the district court did not attempt to situate

that tension in any antitrust market

‐ analysis doctrine. A con

‐

tradiction could undermine a market’s plausibility if it10 No. 21

‐ 3109

showed that the alleged market failed the hypothetical

‐ mo

‐ nopolist test. But we do not see how that could be true here.

The district court also reasoned that Bloomington could

not be “the appropriate geographic market” if “a significant

portion of [IU Health’s] patients regularly travel substantial

distances to get to Bloomington. ” But this confuses two dif

‐

ferent sorts of market. The geographic market for an antitrust

claim need not—and very often will not—correspond to the

comprehensive market that the alleged monopolist serves.

See United States v. E. I. du Pont de Nemours & Co.

, 353 U.S. 586,

593 (1957) (explaini ng that “the bounds of a relevant market

for the purposes of [a] case” need not be “coextensive with the

total market”). At the fringes, even a monopolist is likely to

face competition. Under Advocate

, 841 F.3d at 476, the appro

‐ priate object of the geographic

‐ market analys is is the smallest

market a hypothetical monopolist could dominate. Patient

flows may help to define the borders of that market, but such

flows are just one piece of data in the broader picture—they

are not likely to be dispositive. To hold otherwise would be to

carve a large loophole into an titrust law; realistically, some

fuzziness about market boundaries will occur in most cases.

To sum up: Either of Vasquez’s accounts of how a hypo

‐

thetical monopolist could dominate Bloomington’s vascular

‐

surgery market suffice for the pleading stage. Dismissal was

thus not warranted.

B

The district court also gave a second reason for dismissing

Vasquez’s Clayton Ac t claims (but not his Sherman Act

claims): timeliness. The Clayton Act’s statute of limitations

requires a damages action to be “commenced within fourNo. 21

‐ 3109 11

years after the cause of action accrued.” 15 U.S.C. § 15b. The

district court understood that requirement to bar Vasquez’s

Clayton Act damages claim, and by analogy applied the equi

‐

table doctrine of laches to bar his injunctive claims. (Like the

district court, we treat the laches defense at issue here as ris

‐ ing or falling with the statute of limitations defense, though it

need not in every case. )

Timeliness is an affirmative defense. “An antitrust cause

of action accrues and the statute begins to run when a defend

‐

ant commits an act that injures a plaintiff ʹ s business. ” In re

Copper Antitrust Litig

., 436 F.3d 782, 789 (7th Cir. 2006)

(cleaned up). That rule “is qualified by the discovery rule,

which postpones the beginning of the limitations period from

the date when the plaintiff is wronged to the date when he

discovers he has been injured.” Id. (cleaned up). We have ap

‐ plied a demanding standard to dismissal s on timeliness

grounds at the pleading stage of antitrust cases, asking

whether “the plaintiff pleads itself out of court.” Xechem, Inc.

v. Bristol

‐ Myers Squibb Co.

, 372 F.3d 899, 902 (7th Cir. 2004).

Vasquez did not. To be sure, he filed suit four years and

one month after IU Health acquired Premier. So, if that acq ui

‐

sition started the clock, Vasquez missed his window by a

month. But to affirm the dismissal, we would need to be sure

that the undisputed facts show that the operative injury both

occurred and was dis covered at the moment of acquisition (or

at the latest, during the following month). But the complaint

does not paint such a one

‐ sided picture.

The earliest potential injury the complaint identifies is its

allegation of a “systematic and targeted scheme to ruin Dr.

Vasquez’s reputation and practice” in “approximately 2017,

around the time that IU Healt h acquired Premier.” But12 No. 21

‐ 3109

“[a]round the time” plausibly could mean “six weeks after,”

which would be enough to save the Clayton Act claims for

now. Nor do we have enough information, at this stage, to

ascertain exactly when Vasquez learned of the purported

scheme, which is what really matters. Another plausible

measuring stick occur red a year later, in June 2018, when IU

Health’s anti

‐ Vasquez vendetta is alleged to have started in

earnest. That is when, for instance, IU Health employees be

‐

gan to suggest that Vasquez had often been sued and to

threaten termination of privileges. A third plausible measur

‐ ing stick is the actual revocation of Vasquez’s privileges in

April 2019—the event that on e assumes would have had the

most concrete impact on Vasquez’s income. Until IU Health

took that step, Vasquez reasonably may have thought that an

accommodation was possible.

Without discovery, choosing among these alternatives is

difficult, if not imposs ible. What matters is that the complaint

presents a plausible account under which his suit is timely.

We note as well that timeliness is an affirmative defense and

thus normally (and here) is not properly resolved at the Rule

12(b)(6) stage.

III

Given our disposition of Vasquez’s principal arguments,

we have no need to discuss his request to file an amended

complaint. The district court’s grant of IU Health’s motion to

dismiss is REVERSED and the case is REMANDED for further pro

‐ ceedings consistent with this opinion.