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noting that "the Court is unwilling to find that Plaintiffs may maintain a theory of unfair competition that is entirely novel in Arizona"
Summary of this case from ACT Grp. Inc. v. HamlinOpinion
No. CV 07-1292-PHX-SRB.
March 19, 2009
ORDER
The Court now considers Defendants Mayo Clinic Arizona and Phoenix Children's Hospital's ("Defendants") Motion to Dismiss Class Plaintiffs' Third Amended Complaint ("Defs.' Mot.") (Doc. 318). Scottsdale Health Corporation has joined Defendants' Motion. (Doc. 319.) The Court will also resolve Plaintiff Jane Doe's Motion to Withdraw as a Proposed Class Representative and for Other Relief ("Pl.'s Mot.") (Doc. 260).
Plaintiffs note that Scottsdale Health Corporation already filed an answer to a previous iteration of the Complaint. (Pls.' Mem. of Law in Opp'n to Defs.' Mot. ("Pls.' Opp'n") at 6 n. 1.) However, as Scottsdale Health Corporation has not answered Plaintiffs' Third Amended Complaint ("Compl."), they may join in the Moving Defendants' Motion to Dismiss.
I. Background
Plaintiffs are "Registered Nurses who work, or have worked, as temporary (per diem or travel) nurses." (Compl. ¶ 1.) They have brought this lawsuit against Defendants Arizona Hospital and Healthcare Association, its subsidiary the AzHHA Service Corporation (collectively, "AzHHA"), and certain participating hospitals, charging that AzHHA and the hospitals engaged in illegal price-fixing. (Compl. ¶¶ 1-2.) The Complaint alleges that AzHHA's nursing Registry Program, which contracts with various agencies representing temporary nurses, operated as "an illegal and anticompetitive buyers' cartel." (Compl. ¶¶ 3-5.) Plaintiffs claim that the AzHHA Registry and the Defendant hospitals conspired to keep temporary nursing wages below free market levels. (Compl. ¶ 4.) On May 22, 2007, the U.S. Department of Justice and the Arizona Attorney General filed a complaint against AzHHA, alleging violations of federal and state antitrust law, after a lengthy investigation. (Compl. ¶¶ 13-14.) A final judgment was entered in that case, against AzHHA, in September 2007. (Compl. ¶ 16.) The Complaint in the instant case contains claims under federal and state antitrust law, as well as pursuant to Arizona tort law for interference with business expectancy, unfair competition, and unjust enrichment. (Compl. ¶¶ 146-70.) Defendants Mayo Clinic Arizona, Phoenix Children's Hospital, and Scottsdale Healthcare Corporation have moved to dismiss the Third Amended Complaint. (Defs.' Mot. at 1.)
Initially, the instant matter involved two pseudonymous class representatives, Jane Doe and Rhonda Roe. (Pl.'s Mot. at 4.) Plaintiffs claimed that the class representatives required anonymity because they feared retaliation from Defendants, who represent almost all the hospitals in Arizona. ( Id.) On June 17, 2008, Rhonda Roe notified the Court that she wished to withdraw as a class representative "due to a family medical issue, and in light of the Court's Order of May 23, 2008, regarding disclosure of her identity to Defendants[.]" (Pl.'s Mot. at 5.) Her motion to withdraw was unopposed, and the Court granted it on June 18, 2008. (Pl.'s Mot. at 5; Doc. 209.) Plaintiff Jane Doe has subsequently also decided not to continue as a class representative, and she moved to withdraw on September 29, 2008. (Doc. 260.) Defendants oppose her Motion. (Doc. 284.)
II. Legal Standards and Analysis
A. Motion to Dismiss
The Federal Rules of Civil Procedure require "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2); Gilligan v. Jamco Dev. Corp., 108 F.3d 246, 248 (9th Cir. 1997). Thus, dismissal for insufficiency of a complaint is proper if the complaint fails to state a claim on its face. Lucas v. Bechtel Corp., 633 F.2d 757, 759 (9th Cir. 1980). A complaint should not be dismissed under Rule 12(b)(6) "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46 (1957). A Rule 12(b)(6) dismissal for failure to state a claim can be based on either: (1) the lack of a cognizable legal theory; or (2) insufficient facts to support a cognizable legal claim. Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990); Robertson v. Dean Witter Reynolds, Inc., 749 F.2d 530, 534 (9th Cir. 1984). In determining whether an asserted claim can be sustained, all allegations of material fact are taken as true and construed in the light most favorable to the non-moving party. Clegg v. Cult Awareness Network, 18 F.3d 752, 754 (9th Cir. 1994). The Supreme Court has explained that factual allegations need to be "plausible" and "must be enough to raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly, 127 S. Ct. 1955, 1965 (2007). In ruling on a motion to dismiss, the issue is not whether the plaintiff will ultimately prevail, but whether the claimant is entitled to offer evidence to support the claims. Gilligan, 108 F.3d at 249.
1. Per Se Versus Rule of Reason Analysis
Section 1 of the Sherman Act outlaws "[e]very 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. In construing § 1, however, the Supreme Court has interpreted the statute to only ban those contracts or combinations that are "unreasonably restrictive of competitive conditions," because many agreements that are beneficial to competition also restrain trade. Standard Oil Co. of N.J. v. United States, 221 U.S. 1, 58 (1911).
Treatment of an agreement as per se illegal is reserved for "agreements or practices which because of their pernicious effect on competition and lack of any redeeming virtue are conclusively presumed to be unreasonable and therefore illegal without elaborate inquiry as to the precise harm they have caused or the business excuse for their use." Nw. Wholesale Stationers, Inc. v. Pac. Stationary Printing Co., 472 U.S. 284, 289 (1985). The Supreme Court has held that the appropriate inquiry in these cases is "whether the practice facially appears to be one that would always or almost always tend to restrict competition and decrease output, and in what portion of the market, or instead one designed to increase economic efficiency and render markets more, rather than less, competitive." Broad. Music, Inc. v. Columbia Broad., 441 U.S. 1, 19-20 (1979) (internal quotation and citation omitted). "For the sake of business certainty and litigation efficiency, we have tolerated the invalidation of some agreements [using the per se method] that a fullblown inquiry might have proved to be reasonable." Arizona v. Maricopa County Med. Soc., 457 U.S. 332, 344 (1982).
The Supreme Court has also held, "[O]ur decisions establish that price-fixing agreements are unlawful on their face." Id. at 342. "'The aim and result of every price-fixing agreement, if effective, is the elimination of one form of competition.'" Id. at 346 (quoting United States v. Trenton Potteries Co., 273 U.S. 392, 398 (1927)); see also N. Pac. Ry. Co. v. United States, 356 U.S. 1, 5 (1958) ("Among the practices which the courts have heretofore deemed to be unlawful in and of themselves are price fixing, division of markets, group boycotts, and tying arrangements."); United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 222-23 (1940) (finding that price-fixing agreements are per se illegal regardless of whether the price is fixed with some reference to the market price; "[P]rices are fixed because they are agreed upon."); Freeman v. San Diego Ass'n of Realtors, 322 F.3d 1133, 1144 n. 10 (9th Cir. 2003) ("One manual captures the principle nicely in question and answer format: '[Q.] May competitors agree to fix prices? [A.] Duh. What do you think?'" (quoting ELIOT G. DISNER, ANTITRUST LAW FOR BUSINESS LAWYERS § 4.06, at 82 (2001))); Knevelbaard Dairies v. Kraft Food, Inc., 232 F.3d 979, 988 (9th Cir. 2000) (holding that "[h]orizontal price fixing is a per se violation regardless of whether the prices set are minimum or maximum").
Price-fixing agreements among buyers, like those among sellers, are prohibited by the Sherman Act, even where the damage caused by the agreement is to sellers and not consumers. Mandeville Island Farms v. Am. Crystal Sugar Co., 334 U.S. 219, 235 (1948); Socony-Vacuum, 310 U.S. at 223-24. "'Most courts understand that a buying cartel's low buying prices are illegal. . . . Clearly mistaken is the occasional court that considers low buying prices pro-competitive or that thinks sellers receiving illegally low prices do not suffer antitrust injury.'" Knevelbaard, 232 F.3d at 988-89 (quoting 2 PHILLIP E. AREEDA HERBERT HOVENKAMP, ANTITRUST LAW ¶ 375b at 297 (rev. ed. 1995)); see also AREEDA HOVENKAMP, supra, ¶ 2012 at 133-41 (observing that "once a naked agreement is found among rivals in the buying market limiting the price they will pay or the amount they will purchase, they are condemned categorically without inquiry into power or effects" and distinguishing these agreements from legal joint purchasing arrangements, which produce market efficiencies and increase output, rather than reducing output by forcing sellers to accept less than a competitive price).
To survive Defendants' Motion to Dismiss, Plaintiffs must allege sufficient facts to establish a plausible case of per se illegality. Twombly, 127 S. Ct. at 1965. Defendants argue that "Plaintiffs' mere allegation of price fixing does not mean that the per se illegal rule applies." (Defs.' Mot. at 8.) Plaintiffs, however, have done more than merely allege price fixing by the Defendants. The Complaint contains a number of allegations that raise the level of the claim above a generalized assertion. ( See, e.g., Compl. ¶¶ 5-6, 8-9, 11, 100-04.) The Complaint alleges not only that "Defendants have jointly set — and wrongfully suppressed — the wages and compensation" of temporary nursing staff, but also that those rates were set "below competitive levels" and that "[a]gencies have not obtained significant transactional efficiencies or scale economies as a result of the imposition of uniform bill rates." (Compl. ¶¶ 5, 9, 11.) Plaintiffs allege that Defendants also fraudulently "affirmatively misled Plaintiffs into believing that their wages were true market wages . . . rather than . . . artificially depressed wages[.]" (Compl. ¶ 74.) The Complaint also contains specific allegations about the means by which Defendants allegedly engaged in price-fixing, including requiring that the agencies adopt a uniform pay rate scale for per diem and travel nurses and agreeing to "expel [from AzHHA] any hospital using participating agencies for less than 50 percent of its total per diem needs." (Compl. ¶¶ 101-02.)
Defendants have argued that their arrangement was not illegal price-fixing, but rather an efficient joint purchasing agreement. (Defs.' Mot. at 9-10; Defs.' Reply at 12-13.) Plaintiffs argue that "while AzHHA may have begun in 1988 to serve some legitimate ends, such as quality assurance, the program changed significantly in 1997 — with the support and active participation of the hospitals — and began to blatantly fix rates for temporary nursing personnel." (Pls.' Opp'n at 5; Compl. ¶¶ 3, 8, 101.) Plaintiffs claim that "there was no need for [Defendants] to begin price-fixing to permit AzHHA to continue providing other benefits to the hospitals." (Pls.' Opp'n at 5.) Defendants also contend that Plaintiffs are attempting to "cherry pick" one aspect of AzHHA's role, without considering the other, pro-competitive activities of the organization. (Defs.' Reply at 12-13.) In support of this argument, Defendants cite Meijer, Inc. v. Barr Pharm., Inc., 572 F. Supp. 2d 38, 49 (D.D.C. 2008). In that case, however, the agreement at issue was a contract that contained an exclusive supply arrangement whereby a supplier and a potential competitor agreed not to compete with a buyer for the duration of the agreement. The court in Meijer held, "Considering that arrangement as a whole, it is apparent that the Agreement's resulting economic effects largely depend on the definition of the relevant market." Id. This scenario is entirely unlike the instant case, in which Plaintiffs challenge a different practice (price-fixing), one that is clearly established to be per se illegal. The present case does not involve a situation in which the economic effects necessarily or largely depend on the definition of the relevant market. "With few exceptions, price-fixing agreements are unlawful per se under the Sherman Act[.] . . . The dispositive question generally is not whether any price fixing was justified, but simply whether it occurred." Freeman, 322 F.3d at 1144.
For the purposes of this Motion, Plaintiffs have alleged facts sufficient to support a claim of per se illegality.
As such, the Court will not address the parties' arguments about market definition in this Order.
2. Standing for Federal Antitrust Claims
Defendants advance that Plaintiffs do not have standing in this case because they "allege only an indirect injury that results from a negotiation between the agencies and the Defendants." (Defs.' Mot. at 10.) "[C]ourts have constructed the concept of antitrust standing, under which they 'evaluate the plaintiff's harm, the alleged wrongdoing by the defendants, and the relationship between them' to determine whether a plaintiff is a proper party to bring an antitrust claim." Am. Ad Mgmt., Inc. v. Gen. Tel. Co. of Cal., 190 F.3d 1051, 1054 (9th Cir. 1999) (quoting Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, Inc., 459 U.S. 519, 535 (1983)). Because of the difficulty in creating a bright line rule to designate which plaintiffs have standing in antitrust matters, the Ninth Circuit Court of Appeals distilled the Supreme Court's decision in Associated General to five factors "for determining whether a plaintiff who has borne an injury has antitrust standing." Id. They are:
(1) the nature of the plaintiff's alleged injury; that is, whether it was the type the antitrust laws were intended to forestall;
(2) the directness of the injury;
(3) the speculative measure of the harm;
(4) the risk of duplicative recovery; and
(5) the complexity in apportioning damages.Id. "To conclude that there is antitrust standing, a court need not find in favor of the plaintiff on each factor. Generally, no single factor is decisive." Id. at 1055 (quotation and citations omitted). Courts are advised to balance the factors instead, giving great weight to the nature of the plaintiff's alleged injury. Id. "In fact, the Supreme Court has noted that [a] showing of antitrust injury is necessary, but not always sufficient to establish standing [in an antitrust case]." Id. (quotation and citation omitted).
After examining all five factors, the Court concludes that Plaintiffs have standing in this matter. Plaintiffs allege that they were injured when Defendants fixed the price of their wages below a competitive rate. ( See, e.g., Compl. ¶¶ 5, 7, 9, 19, 113, 138, 145.) As discussed in greater detail above, this is an example of the type of injury the antitrust laws are meant to protect against, thus satisfying the first factor. Mandeville Island Farms, 334 U.S. at 235; Socony-Vacuum, 310 U.S. at 223-24; Knevelbaard, 232 F.3d at 988-89. To establish the second factor, the Plaintiffs' injury must be the direct result of Defendants' allegedly anticompetitive behavior. Am. Ad Mgmt., 190 F.3d at 1058; see also Yellow Pages Cost Consultants, Inc. v. GTE Directories Corp., 951 F.2d 1158, 1162 (9th Cir. 1991) ("Directness in the antitrust context means close in the chain of causation." (internal quotation and citation omitted)). Plaintiffs have alleged that there is a direct correlation between bill rates set by AzHHA and nursing wages at the Defendant hospitals. (Compl. ¶ 7.) This causal link, as alleged, between reduced bill rates and lower wages, is sufficiently direct for the purposes of antitrust standing. The Complaint states, "Most of the monies received by nursing agencies in the form of their bill rates are passed directly to nurses as wages and benefits. . . . Participating Hospitals, including the Hospital Defendants, also pay and compensate, and have paid and compensated, Class members directly." (Compl. ¶ 7.) Compare R.C. Dick Geothermal Corp. v. Thermogenics, Inc., 890 F.2d 139, 147 (9th Cir. 1989) (finding that lost royalties were a direct injury, but that damages from lessened ability to compete due to overall lack of revenue, though traceable to lost royalties, were an indirect injury).
Turning to the third factor, the damages Plaintiffs allege are not speculative. Plaintiffs have alleged that a direct correlation exists between bill rates set by AzHHA and wages for temporary nurses at the Defendant hospitals and also that multiple calculations have been made of the "savings" to the hospitals due to the reduced rates for temporary nursing wages. (Compl. ¶¶ 7, 133-34.) Defendants argue that because "the price is always negotiated with the nurse agency, any measure of harm is speculative at best and apportioning damages between the agencies — one of which has already sued the same defendants for the same alleged antitrust violations — risks duplicative recovery and complex apportionment of any damages." (Defs.' Mot. at 11.) Defendants clarify in their Reply that this argument is not meant to suggest that the amount of any individual Plaintiff's damages might be speculative, but rather that "Plaintiffs' purported injury was too remote from the alleged antitrust harm to amount to an antitrust injury under Associated General Contractors." (Defs.' Reply at 14.) In any event, the Court finds that the damages are both direct (for the purposes of standing) and not speculative. Regardless of the reliability of the estimates that have already been made, should damages need to be assessed, presumably the amount Plaintiffs' wages were depressed could be calculated.
The fourth and fifth factors have to do with other potential plaintiffs for the same injury. In this case, Defendants state that they have been sued by a nursing agency for the same antitrust violations. (Defs.' Mot. at 11.) Plaintiffs dispute that claim, saying that the only suit by an agency thus far instead sought lost profits arising from an illegal boycott and was settled in the summer of 2007. (Pl.'s Opp'n at 14.) For the purposes of this Order, the Court will assume that Plaintiffs' allegations are true. Usher v. City of L.A., 828 F.2d 556, 561 (9th Cir. 1987) (In ruling on a motion to dismiss, "the court must presume all factual allegations of the complaint to be true and draw all reasonable inferences in favor of the nonmoving party."). Even assuming that none of the nursing agencies are presently suing these defendants for antitrust violations, however, the possibility presumably still exists of parallel suits. The crux of the issue is the problem of apportioning damages between the nursing agencies and the individual nurses, which could depend on how much of the rate cut is passed on to nurses by their agencies. As Plaintiffs note, this is an issue to be decided using expert testimony and other evidence. (Pls.' Opp'n at 13.) For the purposes of a Rule 12(b)(6) motion, the Court confines itself to the allegations in the Complaint, on the basis of which the Court does not find a risk of duplicative recovery, provided that the damages were apportioned properly. While apportionment undoubtedly would need to be addressed in any damages calculation, the Court does not see any reason for that process to be prohibitively complex. For these reasons, the Court concludes that Plaintiffs have antitrust standing in this case.
3. Indirect Purchaser Rule
Defendants also argue that the indirect purchaser rule, outlined by the Supreme Court in Illinois Brick v. Illinois, 431 U.S. 720 (1977), bars Plaintiffs' claims in this case. (Defs.' Mot. at 11; Defs.' Reply at 14-16.) Defendants' argument essentially is that because the hospitals purchased Plaintiffs' labor through an agency, the agency was the direct seller, so any antitrust action could only properly be brought by the agency itself. (Defs.' Mot. at 11.) Analysis under the indirect purchaser rule is distinct from a determination of standing, although it raises many of the same issues. Ill. Brick, 431 U.S. at 728 n. 7. Illinois Brick involved claims brought by the State of Illinois and a number of local governmental entities against certain manufacturers of concrete blocks. The plaintiffs had hired general contractors, who had hired subcontractors, who had purchased blocks from the defendant manufacturers. The plaintiffs in Illinois Brick alleged that the block manufacturers had illegally fixed prices and that they were injured, although they did not purchase the blocks directly from the manufacturers. Under the rule of Illinois Brick, indirect purchasers are prohibited from recovering damages except in certain limited circumstances. Id. at 730-33. Indirect purchasers retain standing for injunctive relief. Lucas Auto. Eng'g, Inc. v. Bridgestone/Firestone, Inc., 140 F.3d 1228, 1235 (9th Cir. 1998).
The rule announced in Illinois Brick stems from the Supreme Court's previous ruling in Hanover Shoe, Inc. v. United Shoe Machinery Corp., 392 U.S. 481, 494 (1968), which held that an antitrust defendant was not permitted to introduce evidence that injury was passed on to indirect purchasers, thereby requiring the defendant to pay all recovery to the direct purchaser. The Supreme Court gave two reasons for its decision. First, the Supreme Court was concerned about the possibility of multiple liability because Hanover Shoe forbids defendants from introducing evidence of passing on an alleged antitrust injury to indirect buyers. Ill. Brick, 431 U.S. at 730-31. Second, analysis of indirect antitrust injury would protract and complicate already cumbersome proceedings. Id. at 731-33. As in other areas of antitrust law, this logic applies equally to alleged buyers' cartels like the one at issue in this case. See, e.g., Zinser v. Cont'l Grain Co., 660 F.2d 754, 760 (10th Cir. 1981), cert. denied, 455 U.S. 942 (1982); In re Beef Indus. Antitrust Litig., 600 F.3d 1148, 1164-65 (5th Cir. 1979), cert. denied, 449 U.S. 905 (1980).
In Illinois Brick, the Supreme Court suggested two exceptions to the prohibition against indirect purchaser antitrust suits: (1) if an indirect purchaser received goods from the direct purchaser according to a preexisting "cost-plus contract;" or (2) if the direct purchaser is controlled or owned by another party, either by the seller or the indirect purchaser. Ill. Brick, 431 U.S. at 726 n. 2, 736 n. 16; see also Alaska v. Chevron Chem. Co., 669 F.2d 1299, 1301 n. 3 (9th Cir. 1982) (discussing a conditionally certified class consisting of direct purchasers and "indirect purchasers who acquired fertilizer under the economic equivalent of a preexisting cost-plus contract"); Royal Printing Co. v. Kimberly-Clark Corp., 621 F.2d 323, 326 (9th Cir. 1980) (applying ownership or control exception to allow indirect purchaser's suit). The Supreme Court later clarified that these exceptions should be read narrowly and not expanded. Kansas v. Utilicorp United, Inc., 497 U.S. 199, 216-17 (1990); see also Burkhalter Travel Agency v. MacFarms Int'l, Inc., 141 F.R.D. 144, 148 (N.D. Cal. 1991) ("The Supreme Court has made it clear that these are very limited exceptions."). The Supreme Court reasoned that cost-plus contracts present a different situation than the typical indirect purchaser scenario because the direct purchaser is insulated from any overcharge since its customer has agreed to buy a fixed quantity regardless of price. Ill. Brick, 431 U.S. at 736. The rationale of the second exception is that, in those situations, the direct purchaser would have little or no incentive to sue on their own behalf, thus leaving the indirect purchaser without recourse for any antitrust injuries. Freeman, 322 F.3d at 1145-46. Plaintiffs allege that none of the agencies have sued or are suing Defendants, but they do not claim that the agencies have no incentive to sue. (Pls.' Opp'n at 14.)
Plaintiffs argue that their "relationship with Defendants cannot be described as 'indirect'" because the members of the class worked at the hospitals and were compensated directly by the hospitals. (Pls.' Opp'n at 14-15; Compl. ¶¶ 4, 7, 92.) Plaintiffs analogize their situation to that presented in In re Mercedes-Benz Antitrust Litigation, 364 F. Supp. 2d 468 (D.N.J. 2005). The individual plaintiffs in that case held leases on Mercedes-Benz vehicles, and the defendant car dealerships. Mercedes-Benz USA moved to dismiss their claims, citing the indirect purchaser rule, because the lease was financed by a separate company, Mercedes-Benz Credit Corporation, which typically pays the dealer for the car before leasing it to the customer, in effect purchasing it from the dealer. Mercedes-Benz, 364 F. Supp. 2d at 469, 472. The plaintiffs generally had negotiated the terms of the lease with the dealer, not the financing company. Id. at 472. The court held that the plaintiffs' claims could proceed because, under those facts, "both the leasing companies and the lessees could be considered the immediate buyers." Id. at 478. The court in Mercedes-Benz also noted the "direct interaction" between the customers and the alleged antitrust violators, which is "unlike the paradigm in which there is usually no direct interaction between the antitrust violator and the indirect purchaser." Id. at 480. The instant case is somewhere between Illinois Brick and Mercedes-Benz, as the Plaintiffs here did have some direct interaction with the Defendants, since they worked in the hospitals and were sometimes paid directly by the Defendants, but Plaintiffs do not allege that they had contact with Defendants at the negotiation stage of the transaction. (Defs.' Reply at 14.)
Plaintiffs also argue that Defendants' allegedly anticompetitive behavior caused a separate harm to individual nurses, distinct from the harm to the nursing agencies. (Pls.' Opp'n at 15-16.) In support of this contention, Plaintiffs cite Blue Shield of Virginia v. McCready, 457 U.S. 465 (1982) and Loeb Industries, Inc. v. Sumitomo Corp., 306 F.3d 469 (7th Cir. 2002). In McCready, the plaintiff sued her insurance company for allegedly conspiring with psychiatrists and increasing her costs for treatment by a psychologist. 457 U.S. at 468-70. The defendant argued that Illinois Brick prohibited the plaintiff from pursuing her claim because the employer was the direct purchaser of the insurance plan, but the court disagreed, holding that the injury Ms. McCready had suffered was distinct from the injury to the employer. Id. at 475. The court found that because the plaintiff had paid out of pocket to visit the psychologist, the employer had not experienced an injury due to the alleged overcharge. Id. The plaintiffs in Loeb Industries were purchasers of copper cathode, copper rod, and scrap copper who claimed that they had overpaid due to the defendants' alleged conspiracy to fix the price of copper futures at artificially high levels on international exchange markets. The court in that case relied on McCready when it observed that
different injuries in distinct markets may be inflicted by a single antitrust conspiracy, and thus . . . differently situated plaintiffs might be able to raise claims. The injuries [in that case] suffered by the copper traders who purchased inflated futures contracts from the defendants are distinct from any harm inflicted on Viacom when it paid inflated cash prices for cathode or on Ocean View to the extent that it purchased copper rod from integrated producers.Loeb Indus., 306 F.3d at 481-82.
For the purposes of a motion to dismiss, it is too early for the Court to conclude definitively that the indirect purchaser rule bars Plaintiffs from recovering damages for their federal antitrust claims. Without examining the contracts between the Defendant hospitals and the nursing agencies, there is no way for the Court to ascertain whether they were not, in fact, cost-plus arrangements that would fall within an exception to the indirect purchaser rule, and such a searching review would be inappropriate on a Rule 12(b)(6) motion. See, e.g., Lucas Auto. Eng'g, 140 F.3d at 1234 (applying the rule from Illinois Brick to bar Plaintiffs from recovering damages on a motion for summary judgment, after studying the contracts between the parties). The Complaint alleges a direct correlation between the illegally suppressed wage rates and lower take-home pay for individual nurses and also that the Defendant hospitals sometimes paid temporary nursing staff directly. (Compl. ¶¶ 7, 91-92.) The facts of this case do not map neatly onto any of the examples the parties have cited, including McCready or Loeb: the individual nurses are undoubtedly indirect sellers, but the mechanics of the relationship between the nurses and the agencies, between the agencies and the hospitals, and between the nurses and the hospitals are not analogous to a wholesaler who sells to a retailer who sells to a consumer. The Court, therefore, will not apply the indirect purchaser rule at this point to hold that Plaintiffs cannot recover damages for their alleged injury. Furthermore, even if the rule from Illinois Brick did operate to bar Plaintiffs' recovery, they could still pursue injunctive relief for their federal claims.
The instant case is also very different from a situation wherein a subcontractor purchases materials from a seller, then charges a general contractor, who charges his customer, as in Illinois Brick.
4. Arizona Uniform State Antitrust Act Statutory Labor Exemption
Under the version of the Uniform State Antitrust Act adopted in Arizona, "Labor of a human being is not a commodity or an article of commerce." Ariz. Rev. Stat. ("A.R.S.") § 44-1404(A). Defendants argue that this provision bars Plaintiffs' state antitrust claims. (Defs.' Mot. at 12.) Plaintiffs respond that the statutory language, which is nearly identical to § 6 of the Clayton Act, "simply constitutes the 'statutory labor exclusion,' necessary to keep collective bargaining and union activity from being antitrust violations." (Pls.' Opp'n at 18.) Plaintiffs argue that to allow this language, intended to protect union activity from antitrust liability, to prohibit lawsuits such as the present case would be inimical to the purposes of the antitrust laws. ( Id.) Indeed, the statute also states, "This article shall not be construed to forbid the existence and operation of any labor, agricultural or horticultural organization instituted for the purpose of mutual help, while lawfully carrying out its legitimate objects." A.R.S. § 44-1404(B). "An exemption to the antitrust laws for activities related to collective bargaining traces its origin to sections 6 and 20 of the Clayton Act and to the Norris-LaGuardia Act." Brown v. Pro Football, Inc., 50 F.3d 1041, 1048 (D.C. Cir. 1995) (citations omitted).
The Arizona Uniform State Antitrust Act "is interpreted in conformity with the federal [antitrust laws]." Arizona v. Maricopa County Med. Soc'y, 643 F.2d 553, 554 n. 1 (9th Cir. 1980), rev'd on other grounds, 457 U.S. 332 (1982); see also Wedgewood Inv. Corp. v. Int'l Harvester Co., 613 P.2d 620, 623 (Ariz. 1979) ("The Arizona legislature clearly intended to strive for uniformity between federal and state antitrust laws."). Moreover, A.R.S. § 44-1412 explicitly states, "It is the intent of the legislature that in construing [the Arizona antitrust laws], the courts may use as a guide interpretations given by the federal courts to comparable federal antitrust statutes." But cf. Bunker's Glass Co. v. Pilkington, PLC, 75 P.3d 99, 102, 106 (Ariz. 2003) (acknowledging the federal antitrust laws' general "importance" to the interpretation of the Uniform State Antitrust Act, while also noting that Arizona courts need not "rigidly follow federal precedent on every issue of antitrust law regardless of whether differing concerns and interests exist in the state and federal systems").
No Arizona court has yet applied A.R.S. § 44-1404 to a set of facts like the instant case. Nevertheless, in light of the Arizona legislature's avowed desire to achieve uniformity between the Uniform State Antitrust Act and the federal antitrust laws, the Arizona Supreme Court would most likely follow federal precedent and hold that the labor exemption is intended to apply only to lawful union activities. See Assurance Co. of Am. v. Wall Assocs. LLC of Olympia, 379 F.3d 557, 560 (9th Cir. 2004) ("[W]hen interpreting state law, federal courts are bound by decisions of the state's highest court. In the absence of such a decision, a federal court must predict how the highest state court would decide the issue. . . ." (internal quotation marks and citation omitted)). "While none of [the corresponding federal] statutory provisions is phrased in terms of an exemption from the Sherman Act, the Supreme Court has interpreted them generally to waive antitrust liability for unilateral union conduct such as boycotts and picketing." Brown, 50 F.3d at 1048 (citing H.A. Artists Assoc., Inc. v. Actors' Equity Ass'n, 451 U.S. 704, 714-15 (1981); United States v. Hutcheson, 312 U.S. 219, 232 (1941)).
Neither party has cited a case in which any court applied the Arizona labor exemption or a similar provision in any context other than one involving organized labor. Defendants point to Montgomery v. Emerging Technologies Corp., No. 03-70947, 2006 WL 680860 (E.D. Mich. Mar. 16, 2006) as "applying the identical language under the Michigan Antitrust Reform Act" and dismissing an employee's claim against his employer. (Defs.' Mot. at 12.) However, while the same statutory language is cited by the court in Montgomery, the case was not decided on the grounds of the labor exemption. The court in that case notes that, under the plain language of the labor exemption, "any alleged conspiracy to restrict employment opportunities would not run afoul of the [Michigan antitrust laws'] 'restraint of trade' provision," but it goes on to determine that the plaintiff's complaint did not identify the parties with whom those defendants allegedly conspired, thus failing to include the essential elements of the claim and mandating dismissal. Montgomery, 2006 WL 680860, at *1. The disposition of this case, even if it addressed the Arizona statute, would not countenance against the guidance of the Arizona legislature and the Arizona Supreme Court that courts interpreting Arizona antitrust law should look to comparable federal precedent. Here, federal courts and the U.S. Supreme Court have uniformly interpreted the analogous labor exemption in federal antitrust law as applying to unions engaged in lawful activities. See, e.g., H.A. Artists, 451 U.S. at 713-17; Hutcheson, 312 U.S. at 232; Burlington N. Santa Fe Ry Co. v. Int'l Bhd. of Teamsters Local 174, 203 F.3d 703, 708 (9th Cir. 2000); Quinonez v. Nat'l Ass'n of Sec. Dealers, Inc., 540 F.2d 824, 829 n. 9 (5th Cir. 1976); Cordova v. Bache Co., 321 F. Supp. 600, 605 (S.D.N.Y. 1970) (concluding that given the legislative history and purpose of § 6 of the Clayton Act and the consequences of its enforcement, "the sole purpose and effect of the section is to exempt activities and agreements on the part of labor, agricultural or horticultural organizations with respect to their furnishing labor in the marketplace"); accord People v. N. Ave. Furniture Appliance, Inc., 645 P.2d 1291, 1299 (Colo. 1982) (en banc) (analyzing virtually identical statutory labor exemption in Colorado state antitrust laws and concluding that it applied only to concerted employee activities directed to the improvement of conditions of employment).
Even examining only the plain language of the statute, to find the meaning Defendants' advance, the Court would have to just read section (A), without considering section (B), which includes language also found in the Clayton Act and refers specifically to "labor, agricultural or horticultural organization[s] instituted for the purpose of mutual help." A.R.S. § 44-1404(B). "To construe the labor exemption as suggested [by Defendants] would result in its extension to practically any form of human labor involving work for pay, independently of any employer-employee relationship. Such a construction inevitably would lead to the abrogation of the antitrust proscription itself." N. Ave. Furniture, 645 P.2d at 1299. The Court concludes that the labor exemption in Arizona's version of the Uniform State Antitrust Act does not bar Plaintiffs' claims in this case.
5. Common Law Claims
a. Interference with Business Expectancy
Under Arizona law, to make out a claim for tortious interference with business expectancy, a plaintiff must establish "the existence of a valid contractual relationship or business expectancy; the interferer's knowledge of the relationship or expectancy; intentional interference inducing or causing a breach or termination of the relationship or expectancy; and resultant damage to the party whose relationship or expectancy has been disrupted." Wallace v. Casa Grande Union High Sch. Dist. No. 82 Bd. of Governors, 909 P.2d 486, 494 (Ariz.Ct.App. 1995). Defendants have made several arguments with respect to Plaintiffs' claim for interference with business expectancy. First, Defendants argue that "[t]he only 'improper motive or means' alleged by [P]laintiffs are the antitrust claims." (Defs.' Mot. at 12.) Consequently, as Defendants believe that Plaintiffs' antitrust claims fail as a matter of law, Defendants contend that they could not be liable for interference with business expectancy. ( Id.) As the Court concluded above, however, Plaintiffs' claims survive Defendants' Motion, at least as to injunctive relief, so this argument is unavailing.
Defendants also argue that "the cornerstone of a claim for interference with business expectancy is the existence of a valid business expectancy." (Defs.' Mot. at 13.) "A claim for tortious interference with a business expectancy is insufficient unless the plaintiff alleges facts showing the expectancy constitutes more than a mere 'hope.'" Dube v. Likins, 167 P.3d 93, 99-100 (Ariz.Ct.App. 2007) (citing Marmis v. Solot Co., 573 P.2d 899, 902 (Ariz.Ct.App. 1977)); see also Pre-Fit Door, Inc. v. Dor-Ways, Inc., 477 P.2d 557, 560 (Ariz.Ct.App. 1970) ("In order for the plaintiff to prove a prima facie case it is fundamental that it must establish the existence of a valid contractual relationship or business expectancy."). Under Arizona law, "to prevail on a claim of tortious interference with a business relationship, when the relationship is prospective, there must be a reasonable assurance that the contract or relationship would have been entered into but for the interference." S. Union Co. v. Sw. Gas Corp., 180 F. Supp. 2d 1021, 1048 (D. Ariz. 2002) (internal quotation and citation omitted). Defendants note that the "Complaint provides no allegation of a reasonable assurance that, absent the alleged interference, any business expectancy would have been realized by the [P]laintiffs." (Defs.' Mot. at 13.)
Plaintiffs rejoin that, rather than the traditional conception of this tort, involving a prospective contractual or business relationship, they "allege that Defendants interfered with the reasonable expectancy that their wages and compensation would be set by a free market, not one corrupted by illegal price-fixing." (Pls.' Opp'n at 19; Compl. ¶¶ 74-76, 159-61.) Defendants respond that Plaintiffs have cited no authority for this novel claim and that "Arizona courts would never permit such a tort that, in practical terms, covers all worldly actions and transactions." (Defs.' Reply at 17.) Plaintiffs conceded in oral argument that if the Court recognized this claim as a version of the tort of interference with business expectancy, it would be ruling on an issue not yet spoken on by the Arizona Supreme Court or an Arizona Court of Appeals. (Mot. Hr'g Tr. ("Hr'g Tr.") 50:21-24, Feb. 13, 2009.) The Court declines to plow that new ground. As no Arizona court has recognized interference with the free market with respect to wage determination as a type of tortious interference with business expectancy, Plaintiffs cannot advance that argument in lieu of establishing the existence of a valid contractual relationship or business expectancy. The Complaint does not allege, and Plaintiffs do not argue in their briefs, that Plaintiffs have a reasonable assurance that the expectancy would have been realized absent the alleged interference. Accordingly, Count III of the Complaint, for interference with business expectancy, is dismissed.
Because the Court determines that the Complaint does not allege a valid business expectancy, it will not reach the parties' arguments about whether the harm must involve a third party.
b. Unfair Competition
Count IV of the Complaint alleges that Defendants engaged in unfair competition, under Arizona law. (Compl. ¶¶ 164-67.) Defendants argue that the claim must be dismissed because "Plaintiffs do not allege that Defendants made any false representation to induce another to purchase Defendants' product . . ." (Defs.' Mot. at 14.) Plaintiffs respond that the tort is not limited to such circumstances of "palming off" and note that in other jurisdictions, antitrust activity has been found to qualify as unfair competition. (Pls.' Opp'n at 20.) The Arizona Court of Appeals has held that the common law doctrine of unfair competition "encompasses several tort theories, such as trademark infringement, false advertising, 'palming off,' and misappropriation." Fairway Constructors, Inc. v. Ahern, 970 P.2d 954, 956 (Ariz.Ct.App. 1998) (citing W. PAGE KEETON ET AL., PROSSER AND KEETON ON THE LAW OF TORTS § 130 (5th ed. 1984)). "[T]he central tort in unfair competition at common law is known as 'palming off,' or 'passing off.' It consists in a false representation tending to induce buyers to believe that the defendant's product is that of the plaintiff . . ." Id. Moreover, while collecting opinions and noting that "no inflexible rule can be stated as to what conduct will constitute unfair competition," the Arizona Supreme Court held, "The universal test is whether the public is likely to be confused." Boice v. Stevenson, 187 P.2d 648, 653 (Ariz. 1947); see also Sutter Home Winery, Inc. v. Vintage Selections, Ltd., 971 F.2d 401, 407 (9th Cir. 1992) (explaining that, under Arizona law, an action for unfair competition requires the plaintiff to show either "that it was engaged in competitive business" with the defendant or that the defendant's actions "were likely to produce public confusion" (citations omitted)).
Neither party has cited a case where a court applied Arizona law and found that the tort of unfair competition existed in the absence of allegations of public confusion, and the Court is not aware of such a case. The Complaint does not allege that the public could be or has been misled by Defendants' conduct, merely that Plaintiffs and the other members of the class were injured by the alleged antitrust activity. (Compl. ¶¶ 165-67.) Nor does Plaintiffs' Complaint allege trademark infringement, false advertising, palming off, misappropriation, or any of the other actions that have been found to constitute unfair competition. Here, again, the Court is unwilling to find that Plaintiffs may maintain a theory of unfair competition that is entirely novel in Arizona. Count IV is also dismissed.
c. Unjust Enrichment
Defendants have also moved to dismiss Plaintiffs' claim for unjust enrichment. (Defs.' Mot. at 15-16.) Defendants argue that Plaintiffs cannot make out such a claim because they received the benefit of their bargain when they worked for the Defendant hospitals pursuant to a contract with the nursing agency. (Defs.' Mot. at 15-16.) Plaintiffs respond that unjust enrichment is a "flexible, equitable remedy" available when a defendant "is obliged by the ties of natural justice and equity" to compensate a plaintiff. (Pls.' Opp'n at 21 (internal quotations and citations omitted).) Plaintiffs cite Adelman v. Christy, 90 F. Supp. 2d 1034, 1045 (D. Ariz. 2000). While the court in Adelman remarked that the existence of a contract does not automatically invalidate an unjust enrichment claim, it also held that "[a] theory of unjust enrichment is unavailable only to a plaintiff if that plaintiff has already received the benefit of her contractual bargain." Id. In that case, the plaintiff had claimed unjust enrichment as an alternative to breach of contract, when she allegedly had not been compensated under the contract. Id. The instant case presents a different situation: Plaintiffs are not arguing that Defendants did not pay the agencies what they owed under the contract; rather, they argue that the contractual amount was improperly reduced due to Defendants' allegedly anticompetitive behavior.
"Unjust enrichment occurs whenever a person has and retains money or benefits that in justice and equity belong to another." City of Sierra Vista v. Cochise Enter., Inc., 697 P.2d 1125, 1131 (Ariz.Ct.App. 1984). To recover on a theory of unjust enrichment, "a party must show: (1) an enrichment; (2) an impoverishment; (3) a connection between the enrichment and the impoverishment; (4) the absence of justification for the enrichment and the impoverishment; and (5) the absence of a legal remedy." Trustmark Ins. Co. v. Bank One, Ariz., NA, 48 P.3d 485, 491 (Ariz.Ct.App. 2002) (citing City of Sierra Vista, 697 P.3d at 1131). Defendants also argue that Plaintiffs have not alleged sufficient facts to establish a "nexus between Defendants' supposed enrichment and the [P]laintiffs' supposed impoverishment." (Defs.' Mot. at 16.) Defendants advance that because the individual nurses were paid by agencies, the connection between their allegedly reduced compensation and bad acts of the Defendants is too tenuous. ( Id.) Defendants cite A M Leasing, Ltd. v. Baker, 786 P.2d 1045, 1049 (Ariz.Ct.App. 1989) as standing for the proposition that a plaintiff in an unjust enrichment action cannot recover where "the defendant paid in full, but paid someone to whom he was contractually liable for payment rather than the plaintiff." (Defs.' Mot. at 16.) In A M Leasing, the court was examining cases in which subcontractors performed work and expected to be paid directly by the defendants, who instead paid a general contractor for the service. 786 P.2d at 1049. Here, the situation is slightly different. Plaintiffs argue that Defendants were unjustly enriched because they were able to retain the money saved by paying depressed wages to temporary nurses. (Pls.' Opp'n at 23.)
The only case the parties cite addressing analogous claims was in the Eastern District of Pennsylvania, where the court applied Arizona law to uphold the plaintiffs' claims for unjust enrichment based on alleged price-fixing. D.R. Ward Constr. Co. v. Rohm Haas Co., 470 F. Supp. 2d 485, 507-08 (E.D. Pa. 2006). The court in D.R. Ward determined that "Arizona law does not require either a direct causal connection between the enrichment and the impoverishment, or the transference of a direct enrichment from the plaintiff to the defendant." Id. at 507. The court in that case held that the plaintiffs had stated a claim under Arizona law sufficient to survive a motion to dismiss because they had alleged facts to suggest (1) that those defendants were enriched due to their unlawful price-fixing; (2) that the plaintiffs in that case were impoverished because they had paid the inflated prices; (3) that the plaintiffs' overpayment had flowed up the distribution chain and enriched the defendants; and (4) that the principles of equity demanded that the defendants disgorge this benefit. Id. at 507-08. Likewise, in the instant case, Plaintiffs have alleged that the Defendants were enriched because of the wrongfully suppressed wages of temporary nurses; that Plaintiffs were injured because their wages were set lower than market value; that Plaintiffs' injury stemmed from Defendants' allegedly anticompetitive behavior; and that Defendants therefore ought to be compelled to disgorge their ill-gotten savings. (Compl. ¶¶ 162, 169-70.) Defendants' Motion is denied as to Count V of the Complaint, for unjust enrichment.
B. Plaintiff Jane Doe's Motion to Withdraw as a Proposed Class Representative
Plaintiff Jane Doe has moved to withdraw as a class representative, to dismiss her claim without prejudice pursuant to Rule 41(a) of the Federal Rules of Civil Procedure, to be relieved of her discovery obligations (including appearing for a deposition), and to have Defendants return or destroy all documents she has produced in this litigation. (Pl.'s Mot. at 1.) Defendant Carondelet Health Network has responded, and that Response is joined by all the other Defendants in this case. Defendants argue that Jane Doe should not be allowed to withdraw as a class representative without the imposition of conditions, namely that she be required by the Court to comply with all outstanding discovery requests and to sit for a deposition. (Def.'s Resp. at 3.)
Defendant Carondelet also argues that Jane Doe's request to withdraw is nothing more than a ploy to avoid complying with discovery requests, including sitting for a deposition. (Def. Carondolet Health Network's Resp. to Pl.'s Mot. ("Def.'s Resp.") at 2.) Defendant contends that the information provided about Doe "offered tantalizing glimpses of the truly individual and unique work patterns that characterize the nurses who make up the proposed class." ( Id. at 8.) This argument goes to issues of class certification, which are not at issue in this Motion and will not be addressed at this time.
"In federal practice, voluntary dismissals sought in good faith are generally granted 'unless the defendant would suffer prejudice other than the prospect of a second lawsuit or some tactical advantage.'" In re Vitamins Antitrust Litig., 198 F.R.D. 296, 304 (D.D.C. 2000) (quoting Conafay v. Wyeth Labs., 793 F.2d 350, 353 (D.C. Cir. 1986)). Allowing Jane Doe to withdraw as class representative "is the appropriate and just approach if [she] does not wish to represent the class." In re Neopharm, Inc. Sec. Litig., No. 02 C 2976, 2004 WL 742084, at *1 (N.D. Ill. Apr. 7, 2004) (citing Org. of Minority Vendors, Inc. v. Ill. Cent. Gulf R.R., No. 79 C 1512, 1987 WL 8997, at *1 (N.D. Ill. Apr. 2, 1987) ("Absent a good reason . . . a plaintiff should not be compelled to litigate if it doesn't wish to.")). In this case, there is no reason to believe that Jane Doe seeks to withdraw for anything other than good faith reasons, and there will be no serious prejudice to the Defendants, especially given that the litigation is in its relatively early stages. The Court is not in a position to question Ms. Doe's family or personal situation, which is her stated reason for wishing to withdraw; certainly, the pressures and obligations of extended litigation would present challenges to many people. Also, because there are several other identified class representatives, and the class has not yet been certified, Defendants in this case will not suffer the sort of prejudice that might stem from a later-stage withdrawal of a class representative. See, e.g., In re Vitamins, 198 F.R.D. at 304 ("In determining whether a defendant would suffer legal prejudice by a voluntary dismissal of certain plaintiffs, the Court must consider: (1) the defendants' effort and expense for preparation of trial; (2) excessive delay or lack of diligence on the plaintiffs' part in prosecuting the action; (3) the adequacy of plaintiffs' explanation of the need for dismissal; and (4) the stage of the litigation at the time the motion to dismiss is made, specifically whether a motion for summary judgment is pending."). The Court concludes that Jane Doe's request to withdraw as class representative is made in good faith and that Defendants will not suffer undue prejudice as a result of her withdrawal.
Ordinarily, the burden to obtain discovery of any kind from absent class members is very high. See, e.g., Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 810 n. 2 (noting that burdens, including discovery, "are rarely imposed upon plaintiff class members"); Pierce v. County of Orange, 526 F.3d 1190, 1202 n. 9 (9th Cir. 2008) (Rule 23 of the Federal Rules of Civil Procedure imposes inherent limitations on absent class member discovery); Brennan v. Midwestern United Life Ins. Co., 450 F.2d 999, 1005 (7th Cir. 1971) (observing that while courts have the power to compel absent class members to comply with discovery requests, they "should not be required to submit to discovery as a matter of course"); In re Currency Conversion Fee Antitrust Litig., No. 1409, M-21-95, 2004 WL 2453927 (S.D.N.Y. Nov. 3, 2004) (denying request to depose withdrawing class representatives); Redmond v. Moody's Investor Serv., No. 92 Civ. 9161 (WK), 1995 WL 276150, at *1 (S.D.N.Y. May 10, 1995) (holding that "discovery of absent class members regarding individual issues, as opposed to common questions, is inappropriate[, and]. . . . the burden on the defendant to justify discovery of absent class members by means of deposition is particularly heavy."). Here, Defendants have not met the substantial burden required to compel an absent plaintiff to submit to discovery, particularly a deposition.
The Court sees no convincing reason for the imposition of conditions on Jane Doe's withdrawal like those suggested by Carondelet. Such conditions seem particularly unnecessary in light of the fact that there are currently three identified class representatives who could be — and, in at least one case, already have been-deposed in her stead. (Pl.'s Reply Mem. in Supp. of Pl.'s Mot. ("Pl.'s Reply") at 4 n. 1.) Accordingly, Plaintiff Jane Doe's Motion to Withdraw is granted and her claim is dismissed without prejudice. Jane Doe is relieved of her discovery obligations with respect to this case, including any deposition. Defendants are directed to return or destroy (and certify to Plaintiffs' counsel the destruction of) all documents produced by Jane Doe in the course of this litigation.
III. Conclusions
For the purposes of this Motion, under Rule 12(b)(6) of the Federal Rules of Civil Procedure, the Court finds that Plaintiffs have alleged sufficient facts to state a claim for a per se violation of the federal antitrust laws. The Court concludes that Plaintiffs have standing to pursue federal antitrust claims, and, at this stage, the indirect purchaser rule from Illinois Brick does not bar them from recovering damages, as well as injunctive relief, for those claims. Plaintiffs' claims under Arizona state law for interference with business expectancy and unfair competition are dismissed for failure to state a claim. Remaining are Plaintiffs' claims for injunctive relief under federal antitrust law, Plaintiffs' claims under Arizona state antitrust law, and Plaintiffs' claim for unjust enrichment under Arizona tort law. Plaintiff Jane Doe is permitted to withdraw as a class representative, and her claims are dismissed without prejudice as explained above.
IT IS ORDERED granting in part and denying in part Defendants Mayo Clinic Arizona and Phoenix Children's Hospital's Motion to Dismiss Class Plaintiffs' Third Amended Complaint (Doc. 318). IT IS FURTHER ORDERED granting Plaintiff Jane Doe's Motion to Withdraw as a Proposed Class Representative and for Other Relief (Doc. 260).