United States District Court, E.D. Tennessee, Greeneville
CHRISTINE BEARDEN, DAVID BEARDEN, TERRI COOK, CAROLYN GIBBONS, ELMER DARRELL GREER, LADONNA F. GREER, MARK HUTCHINS, KEVIN MITCHELL, JAMIE STRANGE PIERSON, and CRYSTAL GAIL REGAN, Plaintiffs,
BALLAD HEALTH, MEDICAL EDUCATION ASSISTANCE CORPORATION, BARBARA ALLEN, JULIE BENNETT, DAVID GOLDEN, DAVID LESTER, ALAN LEVINE, DAVID MAY, SCOTT M. NISWONGER, BRIAN NOLAND, GARY PEACOCK, DOUG SPRINGER, and KEITH WILSON Defendants.
L. COLLIER UNITED STATES DISTRICT JUDGE.
the Court are four motions: a motion to dismiss by Defendants
Ballad Health and the individually named Defendants (the
“Ballad Health Directors”) (Doc. 27); a motion to
dimsiss by Defendant Medical Education Assistance Corporation
(“MEAC”) (Doc. 44); a motion to strike by
Defendants Ballad Health and the Ballad Health Directors
(Doc. 51); and a motion to amend their complaint by
Plaintiffs (Doc. 48). For the reasons outlined below, the
Court will GRANT both motions to dismiss,
will DENY Defendants Ballad Health and
Ballad Health Directors' motion to strike, and will
DENY Plaintiffs' motion to amend their
about January 31, 2018, the Tennessee Department of Health
permitted a merger of Mountain States Health Alliance and
Wellmont Health Systems under the terms of a Certificate of
Public Advantage (“COPA”). (Doc. 1 at 3.) The
resulting entity, Ballad Health, became the dominant economic
entity in the relevant geographic market for health-related
services. (Id. at 4.)
April 12, 2019, Plaintiffs filed suit against Ballad Health,
the Ballad Health Directors, and MEAC. (Id.)
Plaintiffs allege that Defendants Brian Noland, Scott
Niswonger, and David Golden have conflicts that prohibit them
from serving on the Ballad Health Board of Directors.
(Id. at 5.) Specifically, Defendants Niswonger and
Golden are members of the Board of Trustees of East Tennessee
State University (“ETSU”) and Defendant Noland is
a member of the Board of Directors of ETSU Physicians and is
ETSU's president. (Id.) Plaintiffs allege this
creates an unlawful interlocking directorate under 15 U.S.C.
§ 19. (Id.)
Ballad Health and Ballad Health Directors filed a motion to
dismiss, contending (1) Plaintiffs have failed to allege
Article III standing to bring this suit; (2) Plaintiffs have
failed to state a claim for which relief can be granted; and
(3) Ballad Health has state-action immunity from liability.
(See Doc. 28.) Defendant MEAC also filed a motion to
dismiss, raising identical issues with Plaintiffs'
complaint. (See Doc. 45.) Plaintiffs responded to
both motions, asserting (1) they have sufficiently alleged
Article III standing and a claim for relief; and (2)
state-action immunity does not apply in this case. (Docs. 49,
59.) Defendants have replied. (Docs. 52, 61.) Defendants
Ballad Health and Ballad Health Directors then filed a motion
to strike portions of Plaintiffs' response to their
motion to dismiss because Plaintiffs attached exhibits and
referenced news articles not included in their pleadings.
(Doc. 51.) Plaintiffs have not filed a response to the motion
to strike and the time to do so has expired.
Plaintiffs filed a motion to amend their complaint to
“more particularly set forth the grounds for relief and
the cause of relief.” (Doc. 48 at 2.) Defendants Ballad
Health and Ballad Health Directors filed a response in
opposition, arguing the proposed complaint could not survive
a motion to dismiss and it fails to comply with Rule 8(a).
(Doc. 54.) Defendants also contend that Plaintiffs have
engaged in bad faith conduct by delaying their motion to
amend, filing briefs “containing objectionable and
distasteful language[, ]” and noted that “their
lawyer took to social media to start a smear campaign against
a director[.]” (Id.) Defendants Golden,
Niswonger, and Noland filed a separate response in opposition
to Plaintiffs' motion to amend, providing additional
background information. (Doc. 55.) Plaintiffs have replied.
(Docs. 56, 58.)
STANDARDS OF REVIEW
Motion to Dismiss Under 12(b)(1)
Federal Rule of Civil Procedure 12(b)(1), a party may move to
dismiss a claim for lack of subject-matter jurisdiction. A
motion to dismiss under 12(b)(1) may raise a facial attack or
a factual attack. Golden v. Gorno. Bros., Inc., 410
F.3d 879, 881 (6th Cir. 2005). A facial attack
“questions merely the sufficiency of the
pleading” in alleging subject-matter jurisdiction and
thus the court takes the allegations raised in the complaint
as true. Gentek Bldg. Prods., Inc. v. Sherwin-
Williams Co., 491 F.3d 320, 330 (6th Cir. 2007). In
contrast, a factual attack challenges the factual existence
of subject-matter jurisdiction, requiring the court to
“weigh the conflicting evidence to arrive at the
factual predicate that subject-matter does or does not
exist.” Id. The plaintiff bears the burden of
proving jurisdiction is proper. Cob Clearinghouse Corp.
v. Aetna U.S. Healthcare, Inc., 362 F.3d 877, 881 (6th
Cir. 2004) (citing Lujan v. Defs. of Wildlife, 504
U.S. 555, 561 (1992)).
Motion to Dismiss Under 12(b)(6)
may move to dismiss a claim for failure to state a claim upon
which relief can be granted. Fed.R.Civ.P. 12(b)(6). In
deciding a 12(b)(6) motion to dismiss, a court must first
accept all of the complaint's factual allegations as true
and construe the complaint in the light most favorable to the
plaintiff. See Grindstaff v. Green, 133 F.3d 416,
421 (6th Cir. 1998). All ambiguities must be resolved in the
plaintiff's favor. Carter by Carter v. Cornwell,
983 F.2d 52, 54 (6th Cir. 1993) (citing Jackson v.
Richards Med. Co., 961 F.2d 575, 577 (6th Cir. 1992)).
Bare legal conclusions, however, need not be accepted as
true. See Papasan v. Allain, 478 U.S. 265, 286
assuming the veracity of factual allegations and construing
ambiguities in the plaintiff's favor, the Court must then
determine whether those allegations “state a claim to
relief that is plausible on its face.” Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 570 (2007). Sufficient
factual allegations are pleaded when a court is able
“to draw the reasonable inference that the defendant is
liable for the misconduct alleged” and there is
“more than a sheer possibility that a defendant has
acted unlawfully.” See Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009). To determine whether the complaint
satisfies facial probability, the court must “draw on
its judicial experience and common sense.” See
Id. at 679.
party presents matters outside the pleadings in connection
with a pending motion to dismiss, the court must either
exclude those matters from consideration or treat the motion
as one for summary judgment. Fed.R.Civ.P. 12(d). Documents
attached to the pleadings are considered part of the
pleadings, Fed.R.Civ.P. 10(c), and a court's
consideration of documents referenced in a complaint that are
integral to the claims does not convert a motion to dismiss