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Pittsburgh's second-largest hospital system's antitrust suit against the state's largest hospital system and health insurer for conspiracy to protect one another from competition
W. Penn Allegheny Health Sys., Inc. v. UPMC, 09-4468, concerned a challenge to the district court's dismissal of plaintiff's Sherman Act claims, and consequent refusal to exercise supplemental jurisdiction over state-law claims, in an antitrust suit by Pittsburgh's second-largest hospital system against Pittsburgh's dominant hospital system and health insurer under the Sherman Act and state law, claiming that defendants violated sections 1 and 2 of the Sherman Act by forming a conspiracy to protect one another from competition.
The court reversed in part in concluding that the allegations in the complaint of direct evidence are sufficient to survive a motion to dismiss on the agreement element of the conspiracy claim, and that plaintiff's allegations are sufficient to suggest that the conspiracy produced anticompetitive effects in the relevant markets. The court also held that, because paying plaintiff artificially depressed reimbursement rates was an anticompetitive aspect of the alleged conspiracy, the underpayments constitute an antitrust injury. Further, under Zenith, plaintiff's conspiracy claims are not time-barred because the complaint adequately alleges that the defendants performed injurious acts in furtherance of the conspiracy within the limitations period. Lastly, the court held that the district court erred in dismissing the attempted monopolization claim on the ground that the complaint fails to allege anticompetitive conduct, and because the federal claims were improperly dismissed, the dismissal of the state-law claims for reconsideration by the district court is vacated.