Americare Medservices Inc v. City of Buena Park et al

NOTICE OF MOTION AND MOTION to Dismiss Plaintiff's Amended Complaint Under Federal Rules of Civil Procedure 12

C.D. Cal.December 30, 2016

z 0 z w z 0 0 z u PATRICK K. BOBKO (Bar No. 208756) CITY ATTORNEY CITY OF BUENA PARK RICHARDS, WATSON & GERSHON A Professional Co oration ROBERT C. CECC~N (Bar No. 115496) rceccon rwglaw.com ROMTI PA-RVARESH (Bar No. 301554) rp arvaresh rwglaw.com 355 South rand Avenue, 40th Floor Los Angeles, California 90071-3101 Telephone : 213.626.8484 Facsimile: 213.626.0078 Attorneys for Defendant City of Buena Park UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA, SOUTHERN DIVISION 2 3 4 5 6 7 8 9 10 11 12 13 14 15 ~' 16 I, 17 %~ 18 v, r 19 20 21 22 23 24 25 26 27 28 ~ AmeriCare MedServices, Inc., Plaintiff, [i~ City of Buena Park and CARE Ambulance Service, Inc., Defendants. Case No. 8:16-cv-01832 JLS (AFMx) DEFENDANT CITY OF BUENA PARK'S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF AMERICARE MEDSERVICES, INC.' S AMENDED COMPLAINT UNDER FEDERAL RULES OF CIVIL PROCEDURE 12(b)(1) AND 12(b)(6) AND TO DISMISS DEFENDANT CITY OF BUENA PARK; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF fFiled concurrently with Declaration of Romtin Parvaresh and [Proposed] Order] Date: March 3, 2017 Time: 2:30 p.m. Ctrm: l0A Jude: Hon. Josephine L. Staton DEFENDANT CITY OF BUENA PARK'S NOTICE OF MOTION AND MOTION TO DISMISS AMENDED COMPLAINT UNDER FRCP 12(bl(1) AND 12(bl(61 11224-0210~2022889v5. doc Case 8:16-cv-01832-JLS-AFM Document 24 Filed 12/30/16 Page 1 of 26 Page ID #:132 1 TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD: 2 PLEASE TAKE NOTICE that on March 3, 2017 at 2:30 p.m., or as soon 3 thereafter as the matter may be heard before the Honorable Josephine L. Staton in 4 Courtroom l0A of the above-entitled Court, located at 411 West Fourth Street in 5 Santa Ana, California, defendant City of Buena Park ("Buena Park") will and does 6 hereby move for an order dismissing with prejudice the Amended Complaint of 7 plaintiff AmeriCare MedServices, Inc. and for an order dismissing Buena Park as a 8 defendant on the following grounds: 9 1. The Amended Complaint fails to establish federal subject-matter 10 jurisdiction because it does not identify a substantial effect on interstate commerce Z o 11 generated by Buena Park's alleged actions. Federal Rules of Civil Procedure o~ 12 ("FRCP") 12(b)(1); `~ 13 2. The Amended Complaint fails to state a claim against Buena Park upon—Z z~ 0 14 which relief can be granted because Buena Park is immune from antitrust liability a ~ ~ 15 under the state-action doctrine. FRCP 12(b)(6); ~„ 4 ~ 4 16 3. Should the Court conclude there is federal jurisdiction, it should}Qw ~¢ 17 nonetheless abstain from hearing the action pursuant to Burford v. Sun Oil, 319 U.S. %~ 18 315 (1943) because federal review would interfere with important state issues andv, r 19 state efforts at regulation; and 20 4. Should the Court hear this action, it should nonetheless strike the 21 damages claim against Buena Park pursuant to the Local Government Antitrust Act. 22 15 U.S.C. §§ 34-36. 23 This motion is based upon this notice; the attached Memorandum of Points 24 and Authorities; all pleadings and papers on file in this action; all matters of which 25 the Court may take judicial notice; and such further argument as the Court may hear 26 at the hearing on this motion. 27 /// 28 /// -2- DEFENDANT CITY OF BUENA PARK'S NOTICE OF MOTION AND MOTION TO DISMISS AMENDED COMPLAINT UNDER FRCP 12(bl(1) AND 12(bl(6) 11224-021020228 89v 5. doc Case 8:16-cv-01832-JLS-AFM Document 24 Filed 12/30/16 Page 2 of 26 Page ID #:133 1 2 3 4 ~i 6 7 8' 9' 10 z o 11 o~ n ~ 12~~W~ ~ z 13 z~ ~ LL 14 ¢~a ~ ~ 15 ~J ~ 4 16~ ¢w__ ~ ~ 17 ~ 4 %`►-~' 18v, 19 20 21 22 23 24 25 26 27 28 This motion is made following the conference of counsel under Local Rule 7- 3, which took place on December 1, 13, and 22, 2016. DATED: December 30, 2016 ROBERT C. CECCON ROMTIN PARVARESH RICHARDS, WATSON & GERSHON A Professional Corporation By:/s/ Romtin Parvaresh ROMTIN PARVARESH Attorneys for Defendant City of Buena Park -~- DEFENDANT CITY OF BUENA PARK'S NOTICE OF MOTION AND MOTION TO DISMISS AMENDED COMPLAINT UNDER FRCP 12(bl(1) AND 12(bl(6) 11224-021020228 89v5. doc Case 8:16-cv-01832-JLS-AFM Document 24 Filed 12/30/16 Page 3 of 26 Page ID #:134 z O z W z 0 cn o ~ }¢w_~ ua ~~v, 1 2 3'. 4 11 5~ 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF CONTENTS Page I. INTRODUCTION ........................................................................................... 1 II. STATEMENT OF ALLEGATIONS ............................................................... 1 III. STANDARD OF REVIEW UNDER RULES 12(b)(1) AND 12(b)(6) ............................................................................................................ 2 A. Rule 12(b)(1) —Lack of Subj ect-Matter Jurisdiction ............................ 2 B. Rule 12(b)(6) —Failure to State a Viable Claim ................................... 3 IV. THE COURT LACKS SUBJECT-MATTER JURISDICTION IDENTF AN EFFbE~CT ON NTE STIATE COMMERCET~ .................... 4 V. THE STATE-ACTION DOCTRINE IMMUNIZES MUNICIPALITIES FROM ANTITRUST LIABILITY ................................. 6 VI. AMERICARE FAILS TO STATE A CAUSE OF ACTION UNDER RULE 12(b)(6) BECAUSE BUENA PARK IS IMMUNE UNDER THE STATE-ACTION DOCTRINE .............................. 7 A. The EMS Act Creates a Comprehensive System for EMS Provision................................................................................................ 8 B. Buena Park Is Immune Because the EMS Act Clearly Articulates and Affirmatively Expr~esses State Policy to Displace Competition in Local EMS Markets ...................................... 9 VII. THE STATE-ACTION DOCTRINE HAS NO ULTRA VIRES, MARKET PARTICIPANT, OR CONSPIRACY EXCEPTIONS ................ 13 VIII. THE COURT SHOULD NOT GRANT LEAVE TO AMEND ................... 14 IX. THE COURT SHOULD ABSTAIN BECAUSE FEDERAL REVIEW WOULD INTERFERE WITH STATE REGULATORY EFFORTS .......................................................................... 15 X. THE COURT SHOULD STRIKE THE DAMAGES CLAIM AGAINST BUENA PARK AS BARRED UNDER THE LGAA ............... 17 XI. CONCLUSION ..............................................................................................18 -i- DEFENDANT CITY OF BUENA PARK'S NOTICE OF MOTION AND MOTION TO DISMISS AMENDED COMPLAINT UNDER FRCP 12(bl(1) AND 12(bl(6) 11224-021020228 89v5. doc Case 8:16-cv-01832-JLS-AFM Document 24 Filed 12/30/16 Page 4 of 26 Page ID #:135 z 0 z W z 0 N D~y ¢w_~ V o ~ a V .Yj r 1 2 3 4 5 6 7 8 9 10 '. 11 ''~ 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF AUTHORITIES Pa e s Cases Ashcroft v. I~qbal 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) ..............................4, 5 Balist~e~i v. Paci aca Police Dep 't. 901 F.2d 96 (9th Cir. 1990) ............................................................................5 Bell Atl. Co_y~ p. v. Twombl, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ....:.............................4 Bu~^fo~d v. Sun Oil Co. 319 U.S. 315 (1943) ..............................................................................1, 18, 19 Capital City Cab Se~^vice, Inc. v. Susq uehanna Area Regional Ai~po~t Authority, 470 F. Supp. 2d 467 (M.D. Pa. 2006) ............................................22 City of Columbia v. Omni Outdoor Adve~., Inc., 499 U.S. 365, 111 S.Ct. 1344, 113 L.Ed.2d 382 (1991) ............................................................16, 17, 19 City of Tucson v. U.S. West Comms., Inc. 284 F.3d 1128 (9th Cir. 2002) ........................................................................18 Community Communications Co. v. Boulder, 455 U.S. 40, 102 S.Ct. 83 5, 70 L.Ed.2d 810 (1982) .................................................................. 8, 12, 13 County of Butte v. California Emergency Medical Systems Authority, Inc. 187 Cal.App.4th 1175 (2010) .............................................................10, 13, 20 County o~San Bernardino v. City of San Bernardino, 15 Ca1.4th 909 (1 97) .......................................................................................................passim Eastbu~n v. Re~Tonal Fire Protection Authority 31 Cal.4th 1175 (2003) ...................................................................................10 Electrical Inspectors, Inc. v. Village of East Hills, 320 F.3d 110 (2d Cir. 2002) .........................................................................................................16, 19 Emrich v. Touche Ross & Ca 846 F.Zd 1190 (9th Cir. 1988) ..........................................................................4 F.T.C. v. Phoebe Putney Health Sy stem, Inc., — U.S. — 133 S. Ct. 1003, 185 L.Ed.2d 43 (2013) ..................................................................8, 9, 17 Freeman v. San Diego Assn of Realtors 322 F.3d 1133 (9th Cir. 2003) ..........................................................................6 Gen. Atomic Co. v. United Nuclear Co~^p. 655 F.2d 968 (9th Cir. 1981) ...........................................................................3 -ii- DEFENDANT CITY OF BUENA PARK'S NOTICE OF MOTION AND MOTION TO DISMISS AMENDED COMPLAINT UNDER FRCP 12(bl(11 AND 12(bl(61 11224-0210~2022889v5.doc Case 8:16-cv-01832-JLS-AFM Document 24 Filed 12/30/16 Page 5 of 26 Page ID #:136 TABLE OF AUTHORITIES (cont.) 2 3 4 5 6 7 8 9~ l0 z o 11 o~Q v a 12~ oW~ ~ 4 13—z z~ ~ " 14o ¢~a ~ ~ 15 y ~ J ~ a 16~ Q r w ~¢ 17 %~ 18.yam r 19 20 21 22 23 24 25 26 27 28 Pa e s GF Gamin Coyp . v. Cily o~fBlack Hawk 405 ~.3d 876 (10th Cir. 2005) ........................................................................21 Hallie v. Eau Claire 471 U.S. 34, 105 S.Ct. 1713, 85 L.Ed.2d 24 (1985) .....................................8, 9 K2 America Copp. v. Roland Oil &Gas, LLC 653 F.3d 1024 (9th Cir. 2011) .........................................................................4 Kendall v. Visa U.S.A., Inc. 518 F.3d 1042 (9th Cir. 2008) ........................................................................18 Kohler v. CJP, Ltd. 818 F. Supp.2d 1169 (C.D. Cal. 2011) ..............................................................4 Kokkonen v. Guardian Life Ins. Co. of AmeNica 511 U.S. 375, 114 S. Ct. 1673, 128 L.Ed.2d 391 (1994) ..................................4 Lafayette v. Louisiana Power &Light Co., 435 U.S. 389, 98 S.Ct. 1123, 55 L.Ed.2d 364 (1978) ......................................................................................8 Ma v. City and County o San Francisco 95 Cal.App.4th 4 8 (2002) .............................................................................10 McLain v. Real Estate Bd. of New Orleans, Inc , 444 U.S. 232, 100 S.Ct. 5 02, 62 L.Ed.2d 441 (1980) .............................................................................. 6 Mercy-Peninsula Ambulance, Inc. v. San Mateo County, 592 F. Supp. 956 (N.D. Cal. 1984) .......................................................................................15 Mercy-Peninsula Ambulance, Inc. v. San Mateo County, 791 F.2d 755 (9th Cir. 1986) .................................................................................................14 Moss v. U.S. Secret Se~v. 572 F.3d 962 (9th Cir. 2009) ...........................................................................5 New Orleans Pub. Se~v., Inc. v. Council of City of New Orleans, 491 U.S. 350 (1989) ...............................................................................................19 Palm S pings Medical Clinic, Inc. v. Desert Hosp., 628 F. Supp. 454 C.D. Cal. 1986) ..............................................................................................21 Parkes v. Brown 317 U.S. 341, 63 S. Ct. 307, 87 L.Ed. 315 (1941) .......................................1, 7 Quackenbush v. Allstate Ins. Co, 517 U.S. 706, 116 S.Ct. 1712, 135 L.Ed. 2d 1 (1996) ......................................................................................18, 19 Rivera v. Pei &Sons Farms, Inc. 735 F.3d 892 (9th Cir. 2013) ...........................................................................5 -iii- DEFENDANT CITY' OF BUENA PARK'S NOTICE OF MOTION AND MOTION TO DISMISS AMENDED COMPLAINT UNDER FRCP 12(bl(11 AND 12(b)(6) 1 1224-021020228 89v5, doc Case 8:16-cv-01832-JLS-AFM Document 24 Filed 12/30/16 Page 6 of 26 Page ID #:137 z 0 z w z O ~JoQ~} ¢w_~ V o ~ a ~~ v, 1. 2'' 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF AUTHORITIES (cont.) Pa e s Safe Air o~ EveNyone v. Me~y, e~ 3 3 F.3d 1035 (9th Cir. 2004) ..........................................................................3 Schaefe~'s Ambulance Service v. County of San Be~na~dino 68 Cal.App.4th 581 (1998) ............................................................................14 Springs Ambulance Service, Inc. v. City of Rancho Mirage, 745 F.2d 1270 (9th Cir. 1984) ........................................................................................15 Thompson v. McCombe 99 F.3d 352 (9th Cir. 1996) .............................................................................3 Thornhill Pub. Co, Inc. v. General Tel. & Elec Copp., 594 F.2d 730 (9th Cir. 1979) ..........................................................................................................7 T~aweek v. City and County of San Francisco, 920 F.2d 589 (9th Cir. 1990) ...............................................................................................................17 T~igen Oklahoma City Ene~gy Corp . v. Oklahoma Gas & Elec. Co. 244 F.3d 1220 (10th Cir. 2001) ......................................................................17 United States v. Mo~~os 268 F.3d 695 (9th Cir. 2001) .........................................................................19 United States v. ORS, Inc. 997 F.2d 628 (9th Cir. 1993) ...........................................................................6 Valley Medical Tans~popt, Inc. v. Apple Valley Fire Protection Dist., 17 Cal.4th 747, 751 (1998) ............................................................................12, 14 Wa~~en v. Fox Family Worldwide, Inc. 328 F.3d 1136 (9th Cir. 2003) ..........................................................................3 World Wide Rush, LLC v. City of Los Angeles, 606 F.3d 676 (9th Cir. 2010) ...............................................................................................................18 California State Statutes Government Code, Section 38794 ........................................................................8, 12 Health &Safety Code Section 1797 ...........................................................................2 Health &Safety Code Section 1797.72 .................................................................................................2 Health &Safety Code, Section 1797.1 .................................................................8, 17 Health &Safety Code, Section 1797.6(a) .................................................................10 Health &Safety Code, Section 1797.6(b) .................................................................11 -iv- DEFENDANT CITY OF BUENA PARK'S NOTICE OF MOTION AND MOTION TO DISMISS AMENDED COMPLAINT UNDER FRCP 12(bl(11 AND 12(b)(61 11224-0210~2022889v5. doc Case 8:16-cv-01832-JLS-AFM Document 24 Filed 12/30/16 Page 7 of 26 Page ID #:138 z Z o~_~ N a Q~ ~W~ ~ Q—z z~ o " v, w ¢~a —~ ~J 4~~ ~-W S ~ V a ~a ~~ .Y~ 1' 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF AUTHORITIES (cont.) Pa e s Health and Safet~y Code Section 1797.224 ......................................................................................passim Health and Safety Code, Section 1797.201 ........................................................passim Federal Statutes United States Code, Title 15, Section 1 ..................................................................2, 4 United States Code, Title 15, Section 15 ..................................................................17 United States Code, Title 15, Section 15a ................................................................17 United States Code, Title 15, Section 15c ................................................................17 United States Code, Title 15, Section 2 ......................................................................2 United States Code, Title 15, Section 34 ..................................................................18 ~, United States Code, Title 15, Section 4 ....................................................................17 I United States Code, Title 35, Section 35(a) ..........................................................1, 17 Rules ',Federal Rules of Civil Procedure, Rule 12(b) ...........................................................17 Federal Rules of Civil Procedure, Rule 12(b)(1) ...............................................passim Federal Rules of Civil Procedure, Rule 12(b)(6) ...............................................passim Treatises P. Areeda & H. Hovenkamp, Antitrust Law, Paragraph 212.3b (Supp. 1989) ...........................................:...................................................................13 -~- DEFENDANT CITY OF BUENA PARK'S NOTICE OF MOTION AND MOTION TO DISMISS AMENDED COMPLAINT UNDER FRCP 12(bl(1) AND 12(bl(61 11224-0210~2022889v5. doc Case 8:16-cv-01832-JLS-AFM Document 24 Filed 12/30/16 Page 8 of 26 Page ID #:139 z = o~ s ~~W~ 4—Z z~ o~~o Q~a ~¢ y ~ J 04~~ ¢w_~ V ~ ~ a it s~~ r . 1 2 3 4 5 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 MEMORANDUM OF POINTS AND AUTHORITIES I. INTRODUCTION In this antitrust action, plaintiff AmeriCare MedServices, Inc. ("AmeriCare") seeks to create new law by having this Court recognize "market-participant," ultra vies, and conspiracy exceptions to the state-action immunity doctrine articulated in PaNke~ v. Brown, 317 U.S. 341, 63 S. Ct. 307, 87 L.Ed. 315 (1941). Because the Supreme Court and Ninth Circuit have not recognized these exceptions, this Court should not do so, and it should dismiss AmeriCare's Amended Complaint without leave to amend. Defendant City of Buena Park ("Buena Park") brings this motion to dismiss on several grounds. First, there is no federal subject-matter jurisdiction because AmeriCare fails to identify an effect on interstate commerce. Fed. R. Civ. P. ("Rule")1 12(b)(1). Second, even assuming its factual allegations are .true, AmeriCare fails to state a cause of action against Buena Park because Buena Park is 'I immune from antitrust liability under the state-action doctrine. Rule 12(b)(6). Third, this Court should abstain from hearing this matter in any event because federal adjudication would interfere with state efforts at regulation. Bu~fo~d v. Sun Oil Co., 319 U.S. 315 (1943). Fourth and finally, if this action proceeds against Buena Park, the Court should nonetheless strike the damages claim against Buena Park pursuant to the Local Government Antitrust Act. 15 U.S.C. § 35(a). II. STATEMENT OF ALLEGATIONS AmeriCare seeks relief from Buena Park and co-defendant CARE Ambulance 1 "Rule" shall refer to the Federal Rules of Civil Procedure, unless otherwise indicated. -~- DEFENDANT CITY OF BUENA PARK'S NOTICE OF MOTION AND MOTION TO DISMISS AMENDED COMPLAINT UNDER FRCP 12(bl(1) AND 12(b)(61 11224-0210~2022889v5. doc Case 8:16-cv-01832-JLS-AFM Document 24 Filed 12/30/16 Page 9 of 26 Page ID #:140 z 0 z W z 0 a ~JoQ ~}¢w_~ uo ~r v, 1 2 3 4 5 6 7 8 9 10~ 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Service, Inc. ("CARE") under Sections 1 and 2 of the Sherman Act (15 U.S.C. §§ 1- 2) for monetary damages and declaratory and injunctive relief. Broadly speaking, AmeriCare alleges that California's Emergency Medical Services System and the Prehospital Emergency Medical Care Personnel Act ("EMS Act")2, Cal. Health &Safety Code § 1797 et seq., allows California cities to monopolize emergency medical services3 ("EMS") provision in their local markets. (Amended Complaint at ¶¶ 16, 19.) The EMS Act, as AmeriCare acknowledges, grants municipalities immunity from federal antitrust laws. (Amended Complaint at ¶ 25.) Here, AmeriCare alleges that Buena Park granted an exclusive contract to CARE for EMS provision in the Buena Park market. (Amended Complaint at ¶ 27.) In so doing, Buena Park and CARE purportedly created a monopoly to the effect of excluding AmeriCare —another EMS provider —from the Buena Park market. (Amended Complaint at ¶ 40.) Federal antitrust immunity, in AmeriCare's view, should not apply here because Buena Park did not follow the EMS Act's requirements. (Amended Complaint at ¶¶ 25, 28.) Based on this premise, AmeriCare contends that Buena Park is subject to antitrust liability. (See Amended Complaint at ¶¶ 56-57.) III. STANDARD OF REVIEW UNDER RULES 12(b)(1) AND 12(b)(6) This section sets forth the applicable legal standards for motions to dismiss under Rules 12(b)(1) and 12(b)(6). A. Rule 12(b)(1) — Lack of Subiect-Matter Jurisdiction Under Rule 12(b)(1), lack of federal subject-matter jurisdiction may be 2 The EMS Act is reviewed in detail in section VI, supra. 3 "Emergency medical services" means "the services utilized in responding to a medical emergency." Health & Saf. Code § 1797.72. -~- DEFENDANT CITY OF BUENA PARK'S NOTICE OF MOTION AND MOTION TO DISMISS AMENDED COMPLAINT UNDER FRCP 12(b)(1) AND 12(b)(61 11224-0210~2022889v5. doc Case 8:16-cv-01832-JLS-AFM Document 24 Filed 12/30/16 Page 10 of 26 Page ID #:141 z 0 z N ~' W z 0 q~y¢W _~ V o ~ a ::v v, r 1 2 3 4 5 6 7 8'~ 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 asserted as a defense to an action. See Rule 12(b)(1). When a defendant brings a Rule 12(b)(1) motion, the plaintiff bears the burden of proving the existence of federal subject-matter jurisdiction. Thompson v. McCombe, 99 F.3d 352, 353 (9th Cir. 1996) (per curiam). Hence, a federal court is presumed to lack jurisdiction unless the contrary affirmatively appears. Gen. Atomic Co. v. United Nuclear Copp., 655 F.2d 968, 968-69 (9th Cir. 1981). A facial challenge4 to jurisdiction may be brought under Rule 12(b)(1), in ~ which case the court assumes that the allegations in the complaint are true. Wa~~en v. Fox Family Worldwide, Inc., 328 F.3d 1136, 1139 (9th Cir. 2003); see also Kohler v. CJP, Ltd., 818 F.Supp.2d 1169, 1172 (C.D. Cal. 2011). Dismissal under Rule 12(b)(1) is proper when the plaintiff fails to carry its burden of establishing subject-matter jurisdiction. K2 America Copp. v. Roland Oil & Gas, LLC, 653 F.3d 1024, 1027 (9th Cir. 2011) (citing Kokkonen v. Guardian Life Ins. Co. ofAme~ica, 511 U.S. 375, 377, 114 S. Ct. 1673, 128 L.Ed.2d 391 (1994).) B. Rule 12(b)(6) —Failure to State a Viable Claim Under Rule 12(b)(6), courts may dismiss an action if the plaintiff fails to state a claim upon which relief can be granted. See Rule 12(b)(6). In deciding a Rule 12(b)(6) motion, the Court's inquiry is confined to the allegations of the complaint and matters that are proper subjects of judicial notice. Em~^ich v. Touche Ross & Co., 846 F.2d 1190, 1198 (9th Cir. 1988). "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ̀ state a claim to relief that is plausible on its face."'Ashcroft v. Igbal, 556 4 A factual challeng e, by contrast, disputes the truth of the allegations that would otherwise invoke federal jurisdiction, in which case the court mad review evidence beyond the confines of the complaint without converting the motion to dismiss into a motion for summary judgment. Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). -~- DEFENDANT CITY OF BUENA PARK'S NOTICE OF MOTION AND MOTION TO DISMISS AMENDED COMPLAINT UNDER FRCP 12(bl(11 AND 12(bl(61 11224-0210~2022889v5.doc Case 8:16-cv-01832-JLS-AFM Document 24 Filed 12/30/16 Page 11 of 26 Page ID #:142 1 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (Igbal) (quoting Bell Atl. 2 Copp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). 3 The Court is not required to accept as true allegations that are merely 4 conclusory, unwarranted deductions of fact, or unreasonable inferences. See Igbal, 5 556 U.S. at 678; see also Moss v. U.S. Secret Serv., 572 F.3d 962, 969 (9th Cir. ', 6 2009) ("[F]or a complaint to survive a motion to dismiss, the non-conclusory ̀ factual 7 content,' and reasonable inferences from that content, must be plausibly suggestive 8 of a claim entitling the plaintiff to relief."). 9 As a result, Rule 12(b)(6) dismissal "can be based on the lack of a cognizable 10 legal theory or the absence of sufficient facts alleged under a cognizable legal Z o 11 theory." Balistre~i v. Pacifica Police Dep't., 901 F.2d 696, 699 (9th Cir. 1990) o~ _ ~ 12 (citation omitted). Dismissal is therefore appropriate when, for example, an~ o `~ 4 13 affirmative defense is evident from the face of the complaint. Rivera v. Pei &Sons— z z~ 0 14 Farms, Inc., 735 F.3d 892, 902 (9th Cir. 2013) (citation omitted). Q a ~ 3 15 ~n a ¢w 16 IV. THE COURT LACKS SUBJECT-MATTER JURISDICTION UNDER ~¢ 17 RULE 12(b)(1) BECAUSE AMERICARE FAILS TO IDENTIFY AN %~ 18 EFFECT ON INTERSTATE COMMERCEv, 19 The Amended Complaint is subject to dismissal under Rule 12(b)(1) because it 20 fails to identify an effect on interstate commerce, which is necessary to establish 21 federal jurisdiction under the Sherman Act. 22 A violation of the Sherman Act can occur only when the defendant's activities 23 are "in restraint of trade or commerce among the several States[.]" 15 U.S.C. § 1. 24 "This requisite relationship to interstate trade or commerce is not only an element of 25 the alleged antitrust offense, but also a necessary jurisdictional requirement." United 26 States v. ORS, Inc., 997 F.2d 628, 629 (9th Cir. 1993) (citation omitted). 27 A federal court will therefore lack subject-matter jurisdiction under the 28 Sherman Act "unless the relevant aspect of interstate commerce is identified; it is not -4- DEFENDANT CITY OF BUENA PARK'S NOTICE OF MOTION AND MOTION TO DISMISS AMENDED COMPLAINT UNDER FRCP 12(b)(1) AND 12(bl(6) 11224-0210~2022889v5. doc Case 8:16-cv-01832-JLS-AFM Document 24 Filed 12/30/16 Page 12 of 26 Page ID #:143 1 sufficient merely to rely on identification of a relevant local activity and to presume 2 an interrelationship with some unspecified aspect of interstate commerce." McLain v. 3 Real Estate Bd. of New Orleans, Inc., 444 U.S. 232, 242, 100 S.Ct. 502, 62 L.Ed.2d 4 441 (1980) (McLain). 5 To meet the required showing of interstate commerce in Sherman Act cases, 6 "a plaintiff must show that the activities in question, although conducted within a 7 state, have a ̀substantial effect on interstate commerce. "' Freeman v. San Diego 8 Assn ofRealto~s, 322 F.3d 1133, 1143 (9th Cir. 2003) (quoting McLain, 444 U.S. at 9 242). The plaintiff need not demonstrate that the illegal conduct itself affected 10 interstate commerce. Id. Instead, the plaintiff need only plead "a substantial effect z o 11 on interstate commerce generated by respondents'[`infected'] activity." Id. (quoting o~ 12 McLain, 444 U.S. at 242-43). ~ 13 Here, this Court lacks subject-matter jurisdiction because AmeriCare fails to z~ 14 identify what aspect of Buena Park's alleged activities generated a "substantial effect Q a ~ 3 15 on interstate commerce." ~ J0 4 16 Instead, the Amended Complaint contains only one conclusory reference to~}¢w Q 17 interstate commerce. It alleges that Buena Park "has attempted and succeeded at %~ 18 maintaining an illegal monopoly in restraint of interstate commerce that is notv, V 19 immune from liability under the state action doctrine." (Amended Complaint at 20 ¶ 101.) That statement does not suffice as identification of the aspect of interstate 21 commerce affected, both because of its vagueness and because the local activity from 22 which AmeriCare is allegedly being excluded —EMS provision in Buena Park —has 23 no apparent connection to interstate commerce. See also Thornhill Pub. Co, Inc. v. 24 General Tel. & Elec Copp., 594 F.2d 730, 738-39 (9th Cir. 1979) (rejecting 25 conclusory claim that conduct affected interstate commerce). 26 Here, AmeriCare self-identifies as an "Orange County-based California 27 corporation" that "has been serving Orange County since its formation in 1996." 28 (Amended Complaint at ¶ 5.) The gravamen of AmeriCare's allegations is that it has -5- DEFENDANT CITY OF BUENA PARK'S NOTICE OF MOTION AND MOTION TO DISMISS AMENDED COMPLAINT UNDER FRCP 12(blf 1) AND 12(bl(6) 11224-0210~2022889v5.doc ', Case 8:16-cv-01832-JLS-AFM Document 24 Filed 12/30/16 Page 13 of 26 Page ID #:144 1 been excluded from Buena Park's EMS rotation, to the detriment of Buena Park's 2 residents and AmeriCare. (See Amended Complaint at ¶ 40.) AmeriCare has 3 nowhere indicated how this alleged exclusion from Buena Park's EMS market 4 affects interstate commerce. 5 As a result, AmeriCare has failed to establish subject-matter jurisdiction under 6 the Sherman Act, and this Court should dismiss the Amended Complaint under Rule 7 12(b)(1). 8 9 V. THE STATE-ACTION DOCTRINE IMMUNIZES MUNICIPALITIES 10 FROM ANTITRUST LIABILITY Z Z 11 Of equal importance in this action, municipalities may be immune from o~ v a 12 antitrust liability under the state-action doctrine. In Pa~ke~ v. Brown, 317 U.S. 341,~~ `~? 13 351-52, 63 S. Ct. 307, 87 L.Ed. 315 (1941), the Supreme Court held that z 14 notwithstanding the general ban on anticompetitive conduct, the Sherman Act should a ~ ~ 15 not be read to bar states from imposing market restraints "as an act of government." ~~ ~ 4 16 But "[b]ecause municipalities ...are not themselves sovereign, state-action}¢w ~ a 17 immunity under Pa~ke~ does not apply to them directly." F. T. C. v. Phoebe Putney %~ 18 Health System, Inc., — U.S. —, 133 S. Ct. 1003, 1010, 185 L.Ed.2d 43 (2013)v, 19 (Phoebe Putney) (citations omitted). Instead, municipalities are entitled to antitrust 20 immunity "when they act ̀ pursuant to state policy to displace competition with 21 regulation or monopoly public service."' Phoebe Putney, 133 S. Ct. at 1010 (citing 22 Lafayette v. Louisiana Power &Light Co., 435 U.S. 389, 413, 98 S.Ct. 1123, 55 23 L.Ed.2d 364 (1978) (Lafayette).) Such a rule "preserves to the States their freedom 24 ... to use their municipalities to administer state regulatory policies free of the 25 inhibitions of the federal antitrust laws without at the same time permitting purely 26 parochial interests to disrupt the Nation's free-market goals." Phoebe Putney, 133 S. 27 Ct. at 1011 (citing Lafayette, 435 U.S. at 415-16). 28 The test for state-action immunity is whether the municipality's actions "are -6- DEFENDANT CITY OF BUENA PARK'S NOTICE OF MOTION AND MOTION TO DISMISS AMENDED COMPLAINT UNDER FRCP 12(bl(11 AND 12(bl(6) 11224-0210~2022889v5. doc Case 8:16-cv-01832-JLS-AFM Document 24 Filed 12/30/16 Page 14 of 26 Page ID #:145 z 0 z W z O ~JoQ~ Y Qw_~ u~ V s+ir . 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 undertaken pursuant to a ̀clearly articulated and affirmatively expressed' state policy to displace competition."5 Phoebe Putney, 133 S. Ct. at 1011 (citing Community Communications Co. v. BouldeN, 455 U.S. 40, 52, 102 S.Ct. 835, 70 L.Ed.2d 810 (1982)). To satisfy this test, "a state legislature need not ̀expressly state in a statute or its legislative history that the legislature intends for the delegated action to have anticompetitive effects." Phoebe Putney, 133 S. Ct. at 1011 (quoting Hallie v. Eau Claire, 471 U.S. 34, 43, 105 S.Ct. 1713, 85 L.Ed.2d 24 (1985) (Hallie)). Instead, state-action immunity applies so long as the anticompetitive effect was the "foreseeable result" of what the state authorized. Phoebe Putney, 133 S. Ct. at 1011 (citing Hallie, 471 U.S. at 42). State-action immunity therefore applies when "the displacement of competition was the inherent, logical, or ordinary result of the exercise of [municipal] authority delegated by the state legislature." Phoebe Putney, 133 S. Ct. at 1013 (collecting cases). VI. AMERICARE FAILS TO STATE A CAUSE OF ACTION UNDER RULE 12(b)(6) BECAUSE BUENA PARK IS IMMUNE UNDER THE STATE-ACTION DOCTRINE Alternatively, this Court should dismiss the Amended Complaint on Rule 12(b)(6) grounds. Buena Park is entitled to state-action immunity because the EMS Act clearly articulates and affirmatively expresses a state policy to displace competition in local EMS markets. As a result of such immunity, AmeriCare fails to state a cause of action against Buena Park. As explained below, the EMS Act creates a comprehensive system for EMS 5 Private parties seeking state-action immunity are subject to an additional requ~irement of "active state supenvision." Hallie v. Eau Clare, 471 U.S. 34, 40, 105 S.Ct. 1713,.85 L.Ed.2d 24 (1985) (Hallie). This requirement does not apply to municipalities because "they have less of an incentive to pursue their own self- interest under the guise of implementing state policies." Phoebe Putney, 133 S. Ct. at 1011 (citing Hallie, 471 U.S. at 46-47). DEFENDANT CITY OF BUENA PARK'S NOTICE OF MOTION AND MOTION TO DISMISS AMENDED COMPLAINT UNDER FRCP 12(bl(11 AND 12(bl(61 11224-0210~2022889v5, doc Case 8:16-cv-01832-JLS-AFM Document 24 Filed 12/30/16 Page 15 of 26 Page ID #:146 z 0 z W z 0 Q ~J04~}¢W _~ V ~ ~ a ~V v,.. . 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 provision and, specifically, expresses a robust state policy to displace competition in local EMS markets. A. The EMS Act Creates a Comprehensive System for EMS Provision In 1980, the California Legislature enacted the EMS Act to "create[] a comprehensive system governing virtually every aspect of prehospital emergency medical services" in the state. County of San Be~na~dino v. City of San Be~na~dino, 15 Ca1.4th 909, 915 (1997) (San Bernardino). Previously, California law governing EMS delivery was "haphazard" as "nothing required [counties, cities, and public districts] to coordinate or integrate their operations in any fashion." Id. at 914. The EMS Act is a "prodigious" legislative effort that reflects a determination that emergency medical services are "at the core of vital civic functions." Ma v. City and County of San Francisco, 95 Ca1.App.4th 488, 508 (2002), glisapproved on other grounds in Eastbu~n v. Regional Fire Protection Authority, 31 Ca1.4th 1175, 1184 (2003); see also Gov't Code6 § 38794 (authorizing cities to contract for ambulance services). The stated purpose of the EMS Act is "to provide the state with a statewide system for emergency medical services[.]" Health & Saf. Code § 1797.1. The EMS Act creates essentially atwo-tiered regulatory system. County of Butte v. California Emergency Medical Systems Authority, Inc., 187 Ca1.App.4th 1175, 1181-82 (2010) (Butte). The first tier is a statewide agency named the Emergency Medical Services Authority, which is responsible for the coordination and integration of all state activities concerning emergency medical services. Health & Saf. Code § 1797.1. The second tier are local EMS agencies, organized by a county or group of counties, which operate emergency medical services on a countywide or multicounty basis, and are responsible for the medical control and 6 All statutory references are to California codes unless otherwise noted. -~- DEFENDANT CITY OF BUENA PARK'S NOTICE OF MOTION AND MOTION TO DISMISS AMENDED COMPLAINT UNDER FRCP 12(bl(1) AND 12(b)(6) 1 1 224-02 1 0~2022889v5. doc Case 8:16-cv-01832-JLS-AFM Document 24 Filed 12/30/16 Page 16 of 26 Page ID #:147 management of each emergency medical services system in their jurisdiction. San 2 3 4 5 6 7 8 9 10 z o 11 o~ u a 12~~W~ ~ 4 13—Z z~ o "~, '~ 14 Q~a 3 IS y ~ J ~ 16~ ¢w _ ~ 17V ~ ~ a %~ 18v, r . 19 20 21 22 23 24 25 26 27 28 (Bernardino, 15 Cal.4th at 915-16, 927. Notwithstanding the state-county dichotomy, the EMS Act promotes the displacement of competition in local EMS markets by granting municipalities the power to control their EMS provision, as discussed below. B. Buena Park Is Immune Because the EMS Act Clearly Articulates and Affirmatively Expresses State Policy to Displace Competition in Local EMS Markets Even assuming AmeriCare's allegations are true, Buena Park is nonetheless immune under the state-action doctrine because in enacting the EMS Act, the California Legislature clearly articulates and affirmatively expresses state policy to displace competition in local EMS markets. Here, two separate provisions of the EMS Act —Health and Safety Code sections 1797.201 ("section 201 ") and 1797.224 ("section 224") —demonstrate that '~ California lawmakers anticipated and expressly authorized the kinds of actions ~~ alleged here to be anticompetitive. Namely, that Buena Park and CARE entered into an exclusive agreement for EMS provision, which had the effect of excluding other companies from Buena Park's market. The first provision —section 201 —establishes "grandfathered" rights for cities that historically provided or contracted for EMS. Section 201 provides in whole: Upon the request of a city or fire district that contracted for or provided, as of June 1, 1980, prehospital emergency medical services, a county shall enter into a written a reement with the city or fire district regarding the provision o~prehospital emergency medical services for that city or fire district. Until such time that an a reement is reached rehos ital emer enc me ica services s a e continue at not ess t ant e exis ing eve , an t e a ministration o pre ospita districts resent rovidin such services ose cities an ire istricts, except t e eve of pre os~ita may ere uce w ere t e city council, or the governing body of a fire district, pursuant to a public hearing, determines that the reduction is necessary. I¶] Notwithstanding,any provision of this section the provisions of Chapter 5 (commencing with Section 1798) shall apply. DEFENDANT CITY OF BUENA PARK'S NOTICE OF MOTION AND MOTION TO DISMISS AMENDED COMPLAINT UNDER FRCP 12(b)(1) AND 12(bl(6) 11224-0210~2022889v5. doc Case 8:16-cv-01832-JLS-AFM Document 24 Filed 12/30/16 Page 17 of 26 Page ID #:148 z Z o~ _~a ~~W~ ~a—Z z~ o " cn LL ° à 4 —3 ~~oQ~ Y ¢w_~ V ~ ~ a it .Y~ 1 ~a 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Health & Saf. Code § 1797.201 (emphasis added). Under section 201, a city that provided or contracted for EMS as of June 1, 1980 "retains its rights to administer prehospital EMS within its borders" until an agreement is reached with a local EMS agency (if ever)'. San Be~na~dino, 15 Ca1.4th at 925. Cities with "201 rights" may continue providing or contracting for EMS so long as they do not abandon those services or voluntarily permit them to be replaced by a local EMS agency$. Valley Medical Ti^anspo~t, Inc. v. Apple Valley Fire Protection Dist., 17 Ca1.4th 747, 751 (1998) (Valley Medical. As a result, section 201 authorizes cities to contract with private EMS providers —the specific type of behavior AmeriCare alleges to be unlawful. In 1982 —two years after section 201's enactment —the Supreme Court decided Community Communications Co., Inc. v. Boulder, 455 U.S. 40, 102 S.Ct. 835, 70 L.Ed.2d 810 (1982) (Boulder). Boulder held that an ordinance regulating cable television services, enacted under a city's "home rule" powers, did not enjoy state-action immunity because the state's position was one of "mere neutrality." Boulder, 455 U.S. at 55 (emphasis in original). In response to Boulder's curtailment of state-action immunity, the California Legislature enacted section 224 in 1984. Health & Saf. Code § 1797.6(a) (calling Boulder a source of "confusion and concern" for local governments' antitrust liability): Section 224 is the second provision evincing a clearly articulated and affirmatively expressed state policy to displace local EMS competition. Section 224 reads in whole: A local EMS agency may create one or more exclusive operating areas Cities are not required to enter agreements with a local EMS agency and therefore may retain their 201 rights indefinitely. San Bernardino, 15 Ca1.4th at 922. g Nonetheless, cities that retain their 201 ri hts are subject to the "medical control" of the local.agency. San Bernardino, 15 Cal.~th at 925. `Medical control" does not necessarily involve a city's internal administrative decisions, but instead applies to matters directly related to regulating the quality of emergency medical services including policies and procedures governing dispatch and patient care. Id. at 9~L5-27. -~~- DEFENDANT CITY OF BUENA PARK'S NOTICE OF MOTION AND MOTION TO DISMISS AMENDED COMPLAINT UNDER FRCP 12(b)(11 AND 12(bl(61 11224-0210~2022889v5. doc Case 8:16-cv-01832-JLS-AFM Document 24 Filed 12/30/16 Page 18 of 26 Page ID #:149 2 3 4 5 6 7 8 9 10 z 0 z N w z O 11 12 13 14 15 ~J ~ 16} ~w= Z ~ ~ 17a~¢ %~ 18v, r . 19 20 21 22 23 24 25 26 27 28 in the development of a local plan, if a competitive process is utilized to select the provider or providers of the services pursuant to the plan. No com~p etitive process is required if the local EMS agency develops or implements a local plan that continues the use of existing providers operating within a local EMS area in the manner and scope in which the services have been provided without interruption since January 1, 1981. A local EMS agency which elects to create one or more exclusive o erating areas in the develo ment of a local lan shall develop and s pbmit for approval to the au hority, as part o~the local EMS ptan, its competitive process for selecting providers and determining the scope of their operations. This plan shall include provisions for a competitive process held at periodic intervals. Nothing in this section supersedes Section 1797.201. Health & Saf. Code § 1797.224 (emphasis added). Relevant here, section 224 intends to "prescribe and exercise the degree of state direction and supervision over emergency medical services as will provide for state action immuni , under federal antitrust laws for activities undertaken by local governmental entities in carrying out their prescribed functions." Health & Saf. Code § 1797.6(b) (emphasis added). In practice, section 224 allows local EMS agencies to create one or more "exclusive operating areas" —monopoly zones — in the development of county plans. Butte, 187 Cal.App.4th at 1197. Section 224 is especially telling because it not only reiterates but expands state I, policy to displace competition in local EMS markets. Specifically, by authorizing 'the creation of exclusive operating areas, section 224 "permits local EMS agencies to 'offer private emergency service providers protection from competition in profitable, I~, populous areas in exchange for the obligation to serve unprofitable, more sparsely 'populated areas." Valley Medical, 17 Ca1.4th at 759. Simply stated, "[t]he purpose of creating exclusive operating areas is to eliminate competition." Schaefe~'s 'Ambulance Service v. County of San Bernardino, 68 Cal.App.4th 581, 589 (1998). To be sure, a local EMS agency's ability to create an exclusive operating area under section 224 is made expressly subject to section 201. See Health & Saf. Code § 1797.224 ("Nothing in this section supersedes Section 1797.201."). Therefore, a county or local EMS agency may not "unilaterally displace a city or fire district continuing to operate emergency medical services." Valley Medical, 17 Ca1.4th at -11- DEFENDANT CITY OF BUENA PARK'S NOTICE OF MOTION AND MOTION TO DISMISS AMENDED COMPLAINT UNDER FRCP 12(bl(1) AND 12(bl(61 1 1224-0210\2022889v5. doc Case 8:16-cv-01832-JLS-AFM Document 24 Filed 12/30/16 Page 19 of 26 Page ID #:150 z~ o~_~~~~~W~ ~ Q—Z z~ O~~, wLL Q a - 3N a D ~}¢w_~ uo ~ a ~V v, r 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Ig 19 20 21 22 23 24 25 26 27 28 759. That section 224 —which was enacted specifically to immunize cities from antitrust liability —was made subject to section 201 evinces legislative intent that ~ section 201 produce similar protection. In short, sections 201 and 224 clearly articulate and affirmatively express a state policy to displace competition in local EMS markets. Exclusive contracts for EMS provision are not only a foreseeable result of such legislation but the intended goal. As the Ninth Circuit concluded, "[v]irtually any anti-competitive effect ... would appear to be well within the [EMS Act's] contemplation." Mercy-Peninsula Ambulance, Inc. v. San Mateo County, 791 F.2d 755, 786 (9th Cir. 1986); see also Mercy-Peninsula Ambulance, Inc. v. San Mateo County, 592 F. Supp. 956, 963 (N.D. Cal. 1984) ("There is no doubt that the ...EMS Act establishes] a policy to displace competition in the field of emergency medical care and paramedic services[.]") As a result, Buena Park is entitled to immunity under the state-action doctrine in accordance with the EMS Act. Indeed, the Ninth Circuit already held that California expresses a state policy to displace competition in ambulance provision.9 In Springs Ambulance Service, Inc. v. City of Rancho Mi~^age, 745 F.2d 1270, 1271 (9th Cir. 1984), private ambulance '' providers filed a federal antitrust suit against three California cities for excluding them from local ambulance markets. The district court held that the cities were entitled to state-action immunity, and the Ninth Circuit affirmed. Id. at 1272, 1274. The Court concluded that California expresses state policy to displace competition in the ambulance market through Government Code section 38794, which affirmatively authorizes cities to "contract for ambulance services to serve [] residents." Id. at 1273. 9 No available case law recognizes a difference between "ambulance" and "EMS" provision. Regardless any such difference would be immaterial here since AmeriCare "provide[s~ emergency ambulance service[.]" (Amended Complaint at ¶ 5•) -~~- DEFENDANT CITY OF BUENA PARK'S NOTICE OF MOTION AND MOTION TO DISMISS AMENDED COMPLAINT UNDER FRCP 12(bl(11 AND 12(b)(61 11224-0210~2022889v5. doc Case 8:16-cv-01832-JLS-AFM Document 24 Filed 12/30/16 Page 20 of 26 Page ID #:151 1 Hence, Springs Ambulance serves as an additional source of state-action 2 immunity for Buena Park since state law expressly authorizes cities to contract for 3 ambulance provision. 4 In short, Buena Park satisfies the clear-articulation test for state-action 5 immunity as a result of California's manifest and widespread intent to displace 6 competition in local EMS markets. 7 8 VII. THE STATE-ACTION DOCTRINE HAS NO ULTRA VIRES, MARKET 9 PARTICIPANT, OR CONSPIRACY EXCEPTIONS 10 The Amended Complaint proposes several exceptions to the state-action z o 11 doctrine in an attempt to pierce Buena Park's immunity. None of them hold water. o~ 12 First, AmeriCare incorrectly suggests that the law confers state-action W~ ~ 13 immunity upon Buena Park only if it complies with sections 201 or 224. (Amended.Z z~ o 14 Complaint at page 1, line 27 to page 2, line 2.) The Supreme Court rejected this ¢~ ~ 3 15 "expansive interpretation" of state-action immunity because it would lead to the y ~ J ~ a 16 "unacceptable consequence[]" of forcing federal courts to become the "standard;¢W u ~ 17 reviewer" of state and local activity. City of Columbia v. Omni Outdoor Adver., Inc.,~Q %~ 18 499 U.S. 365, 371-72, 111 S.Ct. 1344, 113 L.Ed.2d 382 (1991) (Omni) (quoting in _-~'! 19 part P. Areeda & H. Hovenkamp, Antitrust Law ¶ 212.3b, p. 145 (Supp. 1989).) 20 Having a federal court determine whether a municipality's actions were ultra vices 21 would "undermine[] the very interests of federalism [Parker] is designed to 22 protect[.]" Omni, 499 U.S. at 372; see also Electrical Inspectors, Inc. v. Village of 23 East Hills, 320 F.3d 110, 121 n.6 (2d Cir. 2002) (East Hills) ("[U]nder the principles 24 announced Omni Outdoor, it is not for us as a federal court of appeals to decide on 25 this appeal whether the Village's acts are ultra viNes[.]"). 26 Ultimately, it is irrelevant whether Buena Park actually complied with sections 27 201 or 224. Instead, the only relevant question for state-action immunity is whether 28 California "clearly articulated and affirmatively expressed" a state policy to displace -13- DEFENDANT CITY OF BUENA PARK'S NOTICE OF MOTION AND MOTION TO DISMISS AMENDED COMPLAINT UNDER FRCP 12(bl(1) AND 12(b)(6) 11224-0210~2022889v5. doc Case 8:16-cv-01832-JLS-AFM Document 24 Filed 12/30/16 Page 21 of 26 Page ID #:152 1 competition in local EMS markets such as Buena Park. T~aweek v. City and County 2 of San Francisco, 920 F.2d 589, 593 (9th Cir. 1990) ("The relevant question is 3 whether the state intended the authorizing statute to have anticompetitive effects. 4 Thus, what the city does to implement that statute, rightly or wrongly, reveals 5 nothing about the state's intent.") (emphasis in original). The answer, as explained 6 above, is clear: yes. Exclusion of EMS providers such as AmeriCare was not just a 7 foreseeable result of sections 201 and 224; it was the intended result. 8 Second, this Court should deny AmeriCare's request fora "market participant" 9 exception to state-action immunity for one simple reason: the Supreme Court does 10 not recognize it. Phoebe Putney, 133 S. Ct. at 1010, n.4. Likewise, no Ninth Circuit z o 11 authority acknowledges that such an exception exists. o~ v ~ 12 Third, contrary to AmeriCare's assertion, there is no "conspiracy" exception to W~ `~ 13 state-action immunity. T~igen Oklahoma City Energy Copp. v. Oklahoma Gas &—z z~ o 14 Elec. Co., 244 F.3d 1220, 1227 (10th Cir. 2001) (citing Omni, 499 U.S. at 378-79). ¢~ ~ ~ 15 In short, because the Supreme Court and Ninth Circuit do not recognize y ~ J ~ 16 AmeriCare's alleged "exceptions," Buena Park remains entitled to state-action}¢W 17 immunity. %~ 18v, r . 19 VIII. THE COURT SHOULD NOT GRANT LEAVE TO AMEND 20 The Court should not grant AmeriCare leave to amend its complaint because 21 no additional factual allegations can pierce the state-action immunity enjoyed by 22 Buena Park, and AmeriCare has already amended its complaint. See Kendall v. Visa 23 U.S.A., Inc., 518 F.3d 1042, 1051 (9th Cir. 2008) ("Dismissal without leave to amend 24 is proper if it is clear that the complaint could not be saved by amendment."); World 25 Wide Rush, LLC v. City of Los Angeles, 606 F.3d 676, 690 (9th Cir. 2010) ("The 26 district court's discretion to deny leave to amend is particularly broad where a 27 plaintiff previously has amended the complaint.") 28 -14- DEFENDANT CITY OF BUENA PARK'S NOTICE OF MOTION AND MOTION TO DISMISS AMENDED COMPLAINT UNDER FRCP 12(b)(11 AND 12(b)(61 11224-0210~2022889v5.doc Case 8:16-cv-01832-JLS-AFM Document 24 Filed 12/30/16 Page 22 of 26 Page ID #:153 1 IX. THE COURT SHOULD ABSTAIN BECAUSE FEDERAL REVIEW 2 WOULD INTERFERE WITH STATE REGULATORY EFFORTS 3 Additionally, even if the Court does not conclude the Amended Complaint is 4 fatally defective, the Court should abstain from hearing this action under Bu~fo~d v. 5 Sun Oil Co., 319 U.S. 315, 63 S. Ct. 1098, 87 L.Ed. 1424 (1943) (BuNfo~ci~ because 6 federal adjudication would interfere with state efforts to regulate EMS provision. 7 "Bu~fo~d abstention allows a federal district court to abstain from exercising 8 jurisdiction if the case presents ̀ difficult questions of state law bearing on policy 9 problems of substantial public import whose importance transcends the result in the 10 case then at bar,' or if decisions in a federal forum ̀ would be disruptive of state z o 11 efforts to establish a coherent policy with respect to a matter of substantial public o~ 12 concern."' City of Tucson v. U.S. West Comms., Inc., 284 F.3d 1128, 1132 (9th Cir. W~ `~ z 13 2002) (citations omitted). Although there is no "formulaic test for determining when z~ 0 14 dismissal under Buford is appropriate," Quackenbush v. Allstate Ins. Co., 517 U.S. Q a ~ ~ 15 706, 727, 116 S.Ct. 1712, 135 L.Ed. 2d 1 (1996) (Quackenbush), the Ninth Circuit y ~ J a 16 generally considers three factors:~; Q W v ~ 1 ~ first, that the state has chosen to concentrate suits challenging the ~ actions of the agency involved in a particular court; second, that federal %~ 18 issues could not be separated easily from complex state law issues with =''! respect to which state courts might have special com~p etence; and third, 19 that federal review might. disrupt state efforts to establish a coherent policy. 20 United States v. Mo~~os, 268 F.3d 695, 705 (9th Cir. 2001) (Mo~ros) (citation 21 omitted). 22 Hence, the ultimate "question under Bu~fo~d is whether adjudication in federal 23 court would ̀ unduly intrude into the processes of state government or undermine the 24 State's ability to maintain desired uniformity."' Quackenbush, 517 U.S. at 728 25 26 (quoting New Orleans Pub. Se~v., Inc. v. Council of City of New Orleans, 491 U.S. 350, 363 (1989)). 27 This case warrants abstention under Buford. Although the first Mo~~os factor 28 -15- DEFENDANT CITY OF BUENA PARK'S NOTICE OF MOTION AND MOTION TO DISMISS AMENDED COMPLAINT UNDER FRCP 12(bl(1) AND 12(bl(6) 11224-0210~2022889v5. doc Case 8:16-cv-01832-JLS-AFM Document 24 Filed 12/30/16 Page 23 of 26 Page ID #:154 1 is apparently absent (there seems to be no special tribunal for claims relating to EMS 2 exclusion), the second and third factors are present. Namely, federal antitrust issues 3 cannot be separated easily from the EMS Act, specifically sections 201 and 224. In 4 AmeriCare's words, the EMS Act is a "comprehensive statutory scheme" and "[a]ny 5 local public agency that fulfills its duties under the EMS Act is immune from the 6 reach of federal antitrust law under the doctrine of state-action immunity." 7 (Amended Complaint at page 1, lines 23 to 28.) But according to AmeriCare, this 8 Court must determine whether Buena Park complied with the EMS Act (a state law 9 issue) as a threshold issue before it can determine whether state-action immunity (the 10 federal issue) applies. Such review would entail ultra vies analysis, which the ~ 0 11 Supreme Court has rejected. Omni, 499 U.S. at 372; see also East Hills, 320 F.3d at o~ 12 121 n.6. W~ `~ z 13 In similar vein, federal review would require this Court to determine state law z~ o 14 issues of first impression —particularly, the meaning of "contracted for or provided" e2 a ~ ~ 15 in section 201. For, AmeriCare alleges that Buena Park lacks section 201 rights N ~ ~ ~ 16 because, as of June 1, 1980, it did not have a "written agreement" with its EMS ¢w Q 17 provider. (Amended Complaint at ¶ 26.) By omission, AmeriCare implies that ', %~ 18 Buena Park had an unwritten agreement as of that date. Hence, this Court wouldv, 19 have to determine whether section 201's "contracted for or provided" language I, 20 requires written agreements or instead permits unwritten agreements. Making such a 'I 21 determination, however, is not within the federal judiciary's province and to allow 22 otherwise would severely interfere with state law issues and state efforts at 23 uniformity. 24 Moreover, California courts have shown special competence in interpreting 25 complex issues relating to the EMS Act. See, e.g., San Be~na~dino, 15 Cal.4th at 914 26 (holding that cities may retain their 201 rights until they agree otherwise with 27 counties); Butte, 187 Ca1.App.4th at 1193 (holding that counties may designate only 28 one local EMS agency). -16- DEFENDANT CITY OF BUENA PARK'S NOTICE OF MOTION AND MOTION TO DISMISS AMENDED COMPLAINT UNDER FRCP 12(b)(1) AND 12(bl(6) 11224-0210~2022889v5.doc Case 8:16-cv-01832-JLS-AFM Document 24 Filed 12/30/16 Page 24 of 26 Page ID #:155 1 Finally, federal review might disrupt California's efforts to establish a 2 coherent policy. Notably, the stated purpose of the EMS Act is "to provide the state 3 with a statewide system for emergency medical services[.]" Health & Saf. Code 4 § 1797.1. Having a federal court —rather than a state court —determine the scope 5 and breadth of the EMS Act and sections 201 and 224, in particular, would disrupt 6 California's efforts to create a uniform scheme by causing confusion and ambiguity 7 for local governments and EMS providers. 8 On balance, this Court should abstain from hearing this action in the event it 9 decides that the Amended Complaint is not subject to dismissal under Rules 12(b)(1) 10 or 12(b)(6). z a 11 o~ v p 12 X. THE COURT SHOULD STRIKE THE DAMAGES CLAIM AGAINST~~W~ ~ z 13 BUENA PARK AS BARRED UNDER THE LGAA z~ 0 14 In addition, even if this action proceeds in federal court notwithstanding Rule ¢~ ~ 3 15 12(b) and abstention issues, the Court should nonetheless strike AmeriCare's claim v, ~~ 16 for damages against Buena Park as barred under the Local Government Antitrust Act¢W ~< 17 ("LGAA"). %~ 18 "Congress passed the LGAA in response to an increasing number of antitrust _'s'*. 19 suits, and threatened suits, that could undermine a local government's ability to 20 govern in the public interest." GF Gaming Copp. v. City of Black Hawk, 405 F.3 d 21 876, 885 (1Qth Cir. 2005) (GF Gaming) (internal quotation marks and citation 22 omitted). The LGAA provides that "[n]o damages, interest on damages, costs, or 23 attorney's fees may be recovered under section 4, 4A, or 4C of the Clayton Act (15 24 U.S.C. 15, 15a, or 15c) from any local government, or official or employee thereof 25 acting in an official capacity." 15 U.S.C. § 35(a). "The provisions of the Clayton 26 Act cited by the LGAA provide the private damages remedy for violation of the 27 Sherman Act." GF Gaming, 405 F.3d at 885; see also Palm Springs Medical Clinic, 28 Inc. v. Desert Hosp., 628 F. Supp. 454, 458 (C.D. Cal. 1986) ("Section 4 of the -17- DEFENDANT CITY OF BUENA PARK'S NOTICE OF MOTION AND MOTION TO DISMISS AMENDED COMPLAINT UNDER FRCP 12(bl(11 AND 12(bl(61 11224-0210~2022889v5. doc Case 8:16-cv-01832-JLS-AFM Document 24 Filed 12/30/16 Page 25 of 26 Page ID #:156 Clayton Act is the damages remedy for violations of the Sherman Act.") (emphasis in original). As a result, the LGAA bars plaintiffs from seeking damages against local governments for antitrust violations. Capital City Cab Service, Inc. v. Susquehanna Area Regional Airport Authority, 470 F. Supp. 2d 467, 476 (M.D. Pa. 2006). Under these principles, the LGAA bars any claim for antitrust damages against 101 Z o 11 o~a v a 12~~w~ ~ 13—Z z~ ~ ~' 14LL Q~a ~ ~ 15 ~~ ~ N 16 QW= Z ~ ~ 17~¢ !.~u 18 Y~.. 19 20 21 22 23 24 25 26 27 28 Buena Park.10 See also id. ("While the LGAA bars claims for monetary damages for violations of the antitrust laws, it does not limit the availability of injunctive relief."). XI. CONCLUSION The Court should dismiss this action because AmeriCare fails to establish federal subject-matter jurisdiction and state a viable cause of action against Buena Park. Alternatively, the Court should abstain from hearing this action altogether to allow complex issues of state law to be determined by state courts. Finally, even if this action is to proceed in federal court, the Court should strike the damages claim against Buena Park. DATED: December 30, 2016 ROBERT C. CECCON ROMTIN PARVARESH RICHARDS, WATSON & GERSHON A Professional Corporation By:/s/ Romtin Parvaresh ROMTIN PARVARESH Attorneys for Defendant City of Buena Park to Buena Park, as a city, is a "local government" subJ'ect to the LGAA. 15 U.S.C. ~34 (classifying cities as "local government[s]" for LGAA purpose). (Amendedomplaint at ~ 6.) —iv— DEFENDANT CITY OF BUENA PARK'S NOTICE OF MOTION AND MOTION TO DISMISS AMENDED COMPLAINT UNDER FRCP 12(bl(1) AND 12(bl(6) 11224-0210~2022889v 5. doc Case 8:16-cv-01832-JLS-AFM Document 24 Filed 12/30/16 Page 26 of 26 Page ID #:157 z Z O~ z~ ~ p ~ ~ W ~ —Z z~ o~ ~n LL ¢~a —~ cn J Q 4 ~ } Q W Z ~ V o C~ a a~ v, PATRICK K. BOBKO (Bar No. 208756) CITY ATTORNEY CITY OF BUENA PARK RICHARDS, WATSON & GERSHON A Professional Co oration ROBERT G CECC~N (Bar No. 115496) rceccon rwglaw.com ROMTI PARVARESH (Bar No. 301554) rparvaresh rwglaw.com 355 South rand Avenue, 40th Floor I Los Angeles, California 90071-3101 Te 1 ephone : 213.62 6.8 4 8 4 Facsimile: 213.626.0078 Attorneys for Defendant City of Buena Park UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA, SOUTHERN DIVISION 1 2 3 4 5 6 7' 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 AmeriCare MedServices, Inc., Plaintiff, v. City of Buena Park and CARE Ambulance Service, Inc., Defendants. Case No. 8:16-cv-01832 JLS (AFMx) DECLARATION OF ROMTIN PARVARESH IN SUPPORT OF DEFENDANT CITY OF BUENA PARK'S MOTION TO DISMISS PLAINTIFF AMERICARE MEDSERVICES, INC.'S AMENDED COMPLAINT Filed concurrently with Motion to ismiss and [Proposed] Order] Date: March 3, 2017 Time: 2:30 p.m. Ctrm: 1 OA Jude: Hon. Josephine L. Staton -~- DECLARATION OF ROMTIN PARVARESH IN SUPPORT OF DEFENDANT CITY OF BUENA PARK'S MOTION TO DISMISS 11224-0210~2027772v 1. doc Case 8:16-cv-01832-JLS-AFM Document 24-1 Filed 12/30/16 Page 1 of 2 Page ID #:158 z = o~_~~, Q~~w~ ~a a—Z z~ o~ v, LL ¢~ —~ ~Jo¢~ Y aw_~ uo ~V v,.. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DECLARATION OF ROMTIN PARVARESH I, Romtin Parvaresh, declare as follows: 1. I am an attorney at law duly licensed to practice before this Court. I am associated with the law firm of Richards, Watson & Gershon, A Professional Corporation, counsel of record for City of Buena Park ("Buena Park") in this action. I have personal knowledge of the facts set forth in this Declaration and, if called as a witness, could and would testify competently to such facts under oath. 2. I conducted the meet and confer process for Buena Park's motion to dismiss by speaking with counsel for plaintiff AmeriCare MedServices, Inc. via telephone on December 1, 13, and 22, 2016. After discussing the substance of the motion, we were unable to reach a resolution. Hence, the motion became necessary. I declare under penalty of perjury under the laws of the United States of America that the foregoing is true and correct. Executed on this 30 h̀ day of December 2016 at Los Angeles, California. /s/ Romtin Parvaresh Romtin Parvaresh -L- DECLARATION OF ROMTIN PARVARESH IN SUPPORT OF DEFENDANT CITY OF BUENA PARK'S MOTION TO DISMISS 11224-0210~2027772v i .doc Case 8:16-cv-01832-JLS-AFM Document 24-1 Filed 12/30/16 Page 2 of 2 Page ID #:159 z 0 z W z 0 oQ~~¢W _~ uo ::v v, .. PATRICK K. BOBKO (Bar No. 208756) CITY ATTORNEY CITY OF BUENA PARK RICHARDS, WATSON & GERSHON A Professional Co oration ROBERT C. CECC~N (Bar No. 115496) I rceccon rwglaw.com ROMTI PARVARESH (Bar No. 301554) rp arvaresh rwglaw.com 355 South rand Avenue, 40th Floor Los Angeles, California 90071-3101 Telephone: 213.626.8484 Facsimile: 213.626.0078 Attorneys for Defendant City of Buena Park UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA, SOUTHERN DIVISION 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ~ AmeriCare MedServices, Inc., Plaintiff, r~! City of Buena Park and CARE Ambulance Service, Inc., Defendants. Case No. 8:16-cv-01832 JLS (AFMx) [PROPOSED] ORDER RE: DEFENDANT CITY OF BUENA PARK'S MOTION TO DISMISS PLAINTIFF AMERICARE MEDSERVICES, INC.'S AMENDED COMPLAINT [Filed concurrently with Motion to Dismiss and Declaration of Romtin Parvaresh] Date: March 3, 2017 Time: 2:30 p.m. Ctrm: l0A Jude: Hon. Josephine L. Staton -1- [PROPOSED] ORDER RE: DEFENDANT CITY OF BUENA PARK'S MOTION TO DISMISS PLAINTIFF AMERICARE MEDSERVICES, INC.'S AMENDED COMPLAINT 11224-0210~2027774v 1. doc Case 8:16-cv-01832-JLS-AFM Document 24-2 Filed 12/30/16 Page 1 of 2 Page ID #:160 1 2 3 4 5 6 7 8i 9 10 z o 11 o~ n a 12~~w~ ~ 13—Z z~N ~ ~ 14 ¢~ [a ~ IJ y ~ J ~ 16}¢w__ ~ ~ 170 %~ 18v, 19 20 21 22 23 24 25 26 27 28 ~PROPOSED~ ORDER The Court, having considered City of Buena Park's ("Buena Park") Motion to ~ Dismiss Plaintiff AmeriCare MedService, Inc.'s ("AmeriCare") Amended Complaint, as well as all supporting and opposing papers, hereby rules as follows: 1. The Court lacks subject-matter jurisdiction because AmeriCare fails to plead a substantial effect on interstate commerce generated by Buena Park's alleged actions. Freeman v. San Diego Assn of Realtors, 322 F.3d 1133, 1143 (9th Cir. 2003 ); Fed. R. Civ. P. 12(b)(1). 2. AmeriCare fails to state a claim against Buena Park upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). Buena Park is immune from antitrust liability under the state-action doctrine articulated in Parkes v. Brown, 317 U.S. 341, 63 S.Ct. 307, 87 L.Ed. 315 (1941) because California's Emergency Medical Services System and the Prehospital Emergency Medical Care Personnel Act clearly articulates and affirmatively expresses state policy to displace competition in the provision of emergency medical services in local markets. See Cal. Health &Safety Code § 1797 et seq. 3. In any event, AmeriCare's claim for damages against Buena Park is barred under the Local Government Antitrust Act. See 15 U.S.C. § 35(a). For the foregoing reasons, the Court GRANTS Buena Park's motion to dismiss, in its entirety, and orders that AmeriCare's Amended Complaint, and each and every claim alleged therein, is hereby DISMISSED WITH PREJUDICE and WITHOUT LEAVE TO AMEND. IT IS SO ORDERED. Dated: Hon. Josephine L. Staton Judge, United States District Court -~,- [PROPOSED] ORDER RE: DEFENDANT CITY OF BUENA PARK'S MOTION TO DISMISS PLAINTIFF AMERICARE MEDSERVICES. INC.'S AMENDED COMPLAINT 11224-0210~2027774v i .doc Case 8:16-cv-01832-JLS-AFM Document 24-2 Filed 12/30/16 Page 2 of 2 Page ID #:161