Opinion
NNHCV166064679S
11-20-2017
Gordon MacCalla et al. v. American Medical Response of CT, Inc
UNPUBLISHED OPINION
MEMORANDUM OF DECISION ON DEFENDANT'S PARTIAL MOTION TO DISMISS (#129.00)
Hon. John J. Nazzaro, J.
By complaint dated August 8, 2016, the plaintiffs filed the present action against the defendant, American Medical Response of Connecticut, Inc., asserting that the defendant violated the Connecticut Antitrust Act (CATA) by restraining and monopolizing the plaintiffs' ability to conduct trade and commerce.
The complaint recites the exact same claims as to each of the following six plaintiffs: Gordon MacCalla, Alexis Scianna, Tyler Grailich, John Cronin, Timothy J. Yurksatis, and Cate Sadlier.
The defendant filed a motion to dismiss (#129.00) with the court on August 8, 2017, on the ground that the court lacks subject matter jurisdiction to hear the plaintiffs' CATA claims. The plaintiffs filed their objection together with a memorandum in support (#133.00) on September 5, 2017. The court heard argument at short calendar on October 16, 2017, and reserved decision at that time.
FACTS
The following facts are undisputed. Prior to September 2012, the plaintiffs were employed by the defendant as emergency medical services providers. When the plaintiffs were hired they were told that they could continue working concurrently with Valley Emergency Medical Service, Inc., (VEMS) and Danbury Ambulance Service, Inc. (DAS). In light of the defendant's statements, the plaintiffs worked concurrently for the defendant, VEMS and DAS. In September 2012, because VEMS and DAS were the defendant's competitors, the defendant withdrew its approval of the plaintiffs' concurrent employment with those businesses, stating that the plaintiffs would not be allowed to work both for the defendant and VEMS or DAS. The defendant offered to increase the plaintiffs' pay if they decided to remain as its employees. On or around September 16, 2012, the plaintiffs stopped working for the defendant but continued to work for VEMS and DAS. During oral argument, on October 16, 2017, the parties agreed that there are no material facts in dispute and no evidentiary hearing is required.
DISCUSSION
" [A] motion to dismiss . . . properly attacks the jurisdiction of the court, essentially asserting that the plaintiff cannot as a matter of law and fact state a cause of action that should be heard by the court." (Internal quotation marks omitted.) Santorso v. Bristol Hospital, 308 Conn. 338, 350, 63 A.3d 940 (2013). " A motion to dismiss tests, inter alia, whether, on the face of the record, the court is without jurisdiction." (Internal quotation marks omitted.) MacDermid, Inc. v. Leonetti, 310 Conn. 616, 626, 79 A.3d 60 (2013). " [L]ack of subject matter jurisdiction may be found in any one of three instances: (1) the complaint alone; (2) the complaint supplemented by undisputed facts evidenced in the record; or (3) the complaint supplemented by undisputed facts plus the court's resolution of disputed facts . . . When a trial court decides a jurisdictional question raised by a pretrial motion to dismiss on the basis of the complaint alone, it must consider the allegations of the complaint in their most favorable light . . . In this regard, a court must take the facts to be those alleged in the complaint, including those facts necessarily implied from the allegations, construing them in a manner most favorable to the pleader." (Citations omitted; internal quotation marks omitted.) Conboy v. State, 292 Conn. 642, 651, 974 A.2d 669 (2009). " [B]ecause the issue of standing implicates subject matter jurisdiction, it may be a proper basis for granting a motion to dismiss." Electrical Contractors, Inc. v. Dept. of Education, 303 Conn. 402, 413, 35 A.3d 188 (2012).
In this case, the principal issue before the court is the plaintiffs' standing to bring their antitrust claims. Central to this issue is whether the plaintiffs have alleged an antitrust injury. " Connecticut's trial courts both state and federal consistently measure a plaintiff's standing to bring antitrust claims under the Antitrust Act by federal standards; that is, a plaintiff must demonstrate antitrust injury (i.e., injury that the antitrust laws were intended to forestall) in order to pursue its claim under the Antitrust Act." R. Langer et al., 12 Connecticut Practice Series: Unfair Trade Practices, Business Torts and Antitrust (2017-18) § 9.5, p. 1269; see also General Statutes § 35-44b (" it is the intent of the General Assembly that in construing sections 35-24 to 35-46, inclusive, the courts of this state shall be guided by interpretations given by the federal courts to federal antitrust statutes"); see also Elida, Inc. v. Harmor Realty Corp., 177 Conn. 218, 226, 413 A.2d 1226 (1979) (" the judicial interpretation of the federal act is particularly pertinent in our construction of the state statute"). Antitrust injury is, therefore, a necessary component of antitrust standing. Sharp v. United Airlines, Inc., 967 F.2d 404, 406 (10th Cir. 1992) (" [s]tanding cannot be established without an antitrust injury . . .")
The court notes that while antitrust standing and injury are linked, these principles are not synonymous. Sharp v. United Airlines, Inc., 967 F.2d 404, 406 (10th Cir. 1992) (" Standing and antitrust injury are essential elements in § 4 Clayton Act damage actions . . . While the two concepts are closely linked, they are nonetheless distinct. As we acknowledged in [ Chanute v. Williams Natural Gas Co., 955 F.2d 641, 652 n.14 (10th Cir. 1997), overruled on other grounds by Systemcare, Inc. v. Wang Laboratories Corp., 117 F.3d 1137 (10th Cir. 1997)] [s]tanding cannot be established without an antitrust injury, but the existence of an antitrust injury does not automatically confer standing." [Citations omitted; emphasis in original; internal quotation marks omitted]).
Employees face a considerable obstacle in demonstrating that they have incurred antitrust injuries. " To state a claim under section 1 of the Sherman Act, a plaintiff must allege 'antitrust injury, ' i.e. an injury of the type the antitrust laws were intended to prevent and that flows from that which makes the defendants' acts unlawful . . . Further, because antitrust laws are not intended to protect competitors, a plaintiff asserting antitrust violations must allege actual or potential injury to the competition . In other words, the conduct at issue must impact the market rather than the competitors therein." (Citations omitted; emphasis altered; internal quotation marks omitted.) Cobb Theatres III, LLC v. AMC Entertainment Holdings, Inc., 101 F.Sup.3d 1319, 1334-35 (N.D.Ga. 2015); see also Air Courier Conference of America v. American Postal Workers Union, AFL-CIO, 498 U.S. 517, 528, 111 S.Ct. 913, 112 L.Ed.2d 1125 (1991) (" [e]mployees have generally been denied standing to enforce competition laws because they lack competitive and direct injury"). " The antitrust injury requirement obligates a plaintiff to demonstrate, as a threshold matter, that the challenged action has had an actual adverse effect on competition as a whole in the relevant market; to prove it has been harmed as an individual competitor will not suffice . . . The antitrust laws . . . were enacted for the protection of competition, not competitors." (Citations omitted; emphasis altered; internal quotation marks omitted.) George Haug Co. v. Rolls Royce Motor Cars, Inc., 148 F.3d 136, 139 (2d Cir. 1998) (holding the plaintiff did not have standing to bring its Sherman Act claim because it failed to allege sufficient facts to show antitrust injury); Bridgeport Harbour Place I, LLC v. Ganim, 111 Conn.App. 197, 958 A.2d 210, 216 (2008), aff'd, 303 Conn. 205, 32 A.3d 296 (2011).
The defendant argues that the plaintiffs failed to establish that they have antitrust standing on two grounds. First the defendant asserts, as a matter of law, that " [e]mployees do not have standing to pursue antitrust claims under CATA against their former employers." Second, the defendant asserts that the plaintiffs failed to allege that the defendant's actions resulted in harm to the competition as a whole or to the relevant marketplace. The plaintiffs counter, first, that in determining whether employees have standing to pursue their antitrust claims under CATA against their employers, the court must look to the facts of a case, and second, that they have alleged sufficient facts to demonstrate that the defendant's anticompetitive actions harmed the relevant marketplace.
In support of its assertion that employees may not establish antitrust standing to sue their former employers under CATA, the defendant cites to Sharp v. United Airlines, Inc., supra, 967 F.2d 408, for the proposition that " employees simply cannot establish an antitrust injury when they lose their employment as a result of some allegedly anticompetitive activity directed at or involving their employer." This pointed statement does not, however, stand for the black letter rule that an employee always lacks standing to sue a former employer under CATA. Rather, it constitutes, essentially, a reiteration of the threshold succinctly set forth by the District Court in Herrin v. L.M. & Associates, Inc., 483 F.Supp. 288 (W.D.Pa. 1980), that " a termination of employment, without more, does not give rise to an antitrust cause of action." (Emphasis added.) Indeed, the court in Sharp set forth, in a supporting footnote, circumstances in which employees may have standing to sue their employers. Sharp v. United Airlines, Inc., supra, 967 F.2d 408 n.4. Further, the District Court, in Bravman v. Bassett Furniture Industries, Inc., 552 F.2d 90, 99-100 (3d Cir. 1977), determined that, whether an employee may be found to have standing to sue for injuries incurred as the result of an employer's antitrust violations depends on the facts connected to the employee-employer relationship. Accordingly, the court does not agree that the plaintiffs' status as former employees of the defendant squarely precludes them from obtaining standing.
The plaintiffs distinguish Sharp from the present case, asserting that the court's decision in Sharp was essentially premised on the finding that the plaintiffs in Sharp did not allege direct injury, whereas in this case they have. The court does not agree. In Sharp, the court held that the plaintiffs failed to allege an antitrust injury but that, " even were we to assume plaintiffs have alleged an antitrust injury sufficient to survive a 12(b)(6) motion to dismiss, we would hold, as did the court in [ Adams v. Pan American World Airways, Inc., 828 F.2d 24, 264 U.S.App.D.C. 174 (D.C.Cir. 1987), cert. denied, 485 U.S. 961, 108 S.Ct. 1225, 99 L.Ed.2d 425 (1988)], that the other factors relevant to standing doom the plaintiffs' claims." Sharp v. United Airlines, Inc., supra, 967 F.2d 409. Accordingly, because in both cases the issue of antitrust injury is central, the points of law in Sharp referenced by the defendant are relevant. The plaintiffs similarly seek to distinguish Herrin v. L.M. Collins & Associates, 483 F.Supp. 288 (W.D.Pa. 1980), from the present case, but as the legal principles in Herrin cited to by the defendant are relevant to antitrust standing in this case, the court does not find the plaintiffs' argument persuasive.
The Court of Appeals' statement in Sharp that " employees simply cannot establish an antitrust injury when they lose their employment as a result of some allegedly anticompetitive activity directed at or involving their employer, " is premised on the holdings in Reibert v. Atlantic Richfield Co., 471 F.2d 727 (10th Cir.), cert. denied, 411 U.S. 938, 93 S.Ct. 1900, 36 L.Ed.2d 399 (1973), and Jones v. Ford Motor Co., 599 F.2d 394 (10th Cir. 1979) that " [i]t is settled law that shareholders and employees do not have standing to sue for antitrust violations that injure a corporation." Sharp v. United Airlines, Inc., supra, 967 F.2d 408. Thus, to show standing to sue an employer for his or her harm incurred as a result of an employer's antitrust violation, the employee must demonstrate something more than the loss of a job or any other injury that would be considered " tangential to any alleged harm in [the relevant] markets." Id.
Where " plaintiff-employees are in essence quasi-businessmen operating in a market carved out by their own aggressiveness and salesmanship qualities, " employers engaged in anticompetitive practices that harm their employees may be liable for antitrust violations. Similarly, employees may have standing if an employer directed its antitrust violations " against [a] blackballed party, such as when a football or baseball player [is] prevented from obtaining employment." Sharp v. United Airlines, Inc., supra, 967 F.2d 408 n.4.
The court next considers whether the plaintiffs alleged an antitrust injury, a required element to establish standing to bring a CATA claim. The defendant, analogizing the present case with Deshpande v. TJH Medical Services, P.C., United States District Court, Docket No. 05-CV-2894 (NGG), (E.D.N.Y., September 18, 2006), asserts that the plaintiffs have failed to allege harm to the relevant industry or marketplace sufficient to demonstrate antitrust injury. In Deshpande, the court held that the plaintiff, a faculty supervisor at a hospital, did not have standing to prosecute a private antitrust claim because he failed to allege that the defendant's prohibition impacted the relevant market. Id. (" [p]laintiff has not alleged that Defendants' prohibition on moonlighting has resulted in lower quality medical services in the area or has prevented other medical staff from competing for these medical services"). The defendant contends that the sole harm alleged by the plaintiffs was to themselves. In response, the plaintiffs attempt to distinguish Deshpande from this case, asserting first that Deshpande concerns a market restraint on one employee, whereas this case involves a restraint on several employees, and second, that the plaintiff in Deshpande failed to allege an intended or purposeful effect on commerce, whereas the plaintiffs in this case have alleged that the defendant intended to restrain commerce in violation of CATA by monopolizing the plaintiffs' services. The court agrees with the defendant. Whether one plaintiff or several are involved is plainly immaterial to whether the complaint sets forth allegations that the defendant has harmed the relevant market. Also, the court in Deshpande focused on whether the plaintiff alleged that the defendant's actions harmed commerce, such as causing a reduction in the quality of medical services. In this case, the plaintiffs' sole allegation concerning how the defendant's actions affected the market is as follows: " [t]he mandate that plaintiff[s] cease the previously approved simultaneous employment was imposed on the plaintiff[s] in the course of a wrongful plan and/or conspiracy to and/or attempt to and/or action with the intent and purpose of restraining or monopolizing trade and commerce by keeping or restraining skilled and experienced emergency medical technicians such as the plaintiff[s] from being accessible for employment purposes to those emergency medical services providers such as VEMS or DAS in geographic areas where the latter providers were bidding against the defendant for contracts and/or otherwise deemed by the defendant to be in competition with the defendant." Pl.'s Comp. ¶ 8. At oral argument on October 16, 2017, the plaintiffs clarified their allegation as the defendant's " attempt to . . . take away the ability of DAS and VEMS to compete in the district, because they wouldn't have the necessary horses to perform the contracts." (Emphasis added.) The plaintiffs have made no additional allegations sounding to the defendant's impact on the emergency medical services marketplace. " [I]t is not enough to assert simply that [a plaintiff] has been harmed as an individual competitor; rather, [a plaintiff] must suggest how [defendants'] activities have had [some] adverse impact on price, quality, or output of . . . services offered to consumers in the relevant market." (Emphasis added.) General Electric Co. v. Latin American Imports, S.A., 227 F.Supp.2d 685, 688 (W.D.Ky. 2002); Deshpande v. TJH Medical Services, P.C., supra, United States District Court, Docket No. 05-CV-2894 (" [p]laintiff has not alleged that Defendants' prohibition on moonlighting has resulted in lower quality medical services in the area or has prevented other medical staff from competing for these medical services" [emphasis added]). For purposes of demonstrating antitrust injury, adverse impact may be shown by allegations indicating actual or potential harm to the market. Cobb Theatres III, LLC v. AMC Entertainment Holdings, Inc., supra, 101 F.Sup.3d 1334-35. In the present case, the plaintiffs' allegation focuses on the defendant's attempt to monopolize the services of its employees, but does not allege any specific adverse effect on the emergency medical services industry. Even in construing the allegation in its most favorable light, the court cannot reasonably infer that, by requiring the plaintiffs to work solely for the defendant, the defendant adversely impacted the emergency medical services marketplace. Additionally, during oral argument, the plaintiffs undermined their proposition that the marketplace was harmed due to a reduction of available providers of emergency medical services by stating: " [h]ere we had actually an attempt to monopolize which failed and it failed because the five people left AMR instead of staying with AMR and they knew before they left why this was all happening . . ." (Emphasis added.) The admission that the defendant's alleged attempt at engaging in anticompetitive activity failed strongly supports the implication that the defendant's activities did not have the requisite adverse effect on the relevant marketplace to show antitrust injury. Thus, the plaintiffs have failed to allege that the defendant caused any actual or potential harm to the emergency medical services marketplace. Accordingly, this case is similar to Deshpande on the controlling issue of whether the plaintiffs have alleged that the defendant caused harm to the relevant industry. Because the plaintiffs have failed to demonstrate that the emergency medical services industry was harmed, they did not satisfy a necessary element of showing antitrust injury.
" Similarly here, Plaintiffs cannot allege--much less prove--harm to the industry or marketplace. To the contrary, the entire premise of their lawsuit is that they chose to work for one of AMR's competitors when AMR offered them the choice to work for that competitor or AMR, but not both at the same time." Def.'s Mot. Dismiss.
At oral argument the plaintiffs sought to distinguish this case from Deshpande on the additional ground that the primary reason the plaintiff in Deshpande was let go was for being a " pain in the neck." The court in Deshpande, however, specifically discussed whether the plaintiff alleged an antitrust injury without reference to his being a difficult employee. Indeed, the Deshpande decision contemplates principles of law and facts that are directly relevant to this case, thus the court is not persuaded that these cases are distinguishable.
Each count of the plaintiffs' complaint recites this allegation. Thus, for purposes of our analysis, the court refers to the six identical allegations as a single allegation.
The court will now consider the plaintiffs' analogy of this case with Bravman v. Furniture Industries, Inc., supra, 552 F.2d 90, in support of their contention that the they have shown antitrust injury. The plaintiffs contend that these cases are similar because the " (a) defendant's imposition of an exclusive product representation policy on plaintiff was unreasonable in light of defendant's existing market power; (b) when plaintiff was terminated from defendant's employment he became a competitor of defendant's sales representatives within the intended target area of the unlawful conduct; (c) the restraints imposed by defendant were directly aimed at plaintiff and he was operating within the area of economy which was endangered by a breakdown of competitive conditions." Pl.'s Mem. Supp. Opp'n. Mot. Dismiss, p. 7. The court does not agree that the cases are similar enough on these points to conclude that the plaintiffs in this case have standing. First, the defendants in Bravman withdrew all of their table and minor products and drastically reduced their case goods from the plaintiff's representation. Bravman v. Furniture Industries, Inc., supra, 552 F.2d 100. It is from these facts the court gleaned that the defendant likely held substantial market power, and wielded that power unreasonably with respect to the plaintiff. Id. In this case, there are no allegations suggesting that the defendant held substantial market power and that it wielded such power unreasonably through its restraints. Second, the plaintiffs in this case did not become competitors simply by switching jobs from one employer to another; they remained as employees, albeit for different businesses, and they did not maintain or acquire positions comparable to that of a sales representative. As to the plaintiffs' third point, the court has already determined that the plaintiffs failed to allege that the defendant's conduct caused an adverse effect on the relevant marketplace. Therefore, whether the defendant imposed restraints that affected the plaintiffs is immaterial to their CATA claim.
In Bravman, the Court of Appeals determined that the defendants held substantial market power by looking to the plaintiff's allegations that the defendants withdrew many of their products from the plaintiff's representation. These allegations were separate from the allegations specific to the restraint, i.e., the restriction on the plaintiff's ability to sell the defendant's products. In contrast to this case, there are no similar allegations sounding to the defendant's market power.
The plaintiffs have not shown that they have incurred antitrust injuries. Because antitrust injury is required to demonstrate standing to bring an antitrust claim, the court agrees with the defendant that the plaintiffs lack standing.
CONCLUSION
For the foregoing reasons, the court concludes on the basis of the plaintiffs' lack of standing that it does not have subject matter jurisdiction to hear the plaintiffs' CATA claims. Therefore, the court grants the defendant's partial motion to dismiss for lack of subject matter jurisdiction.
It is so ordered.