DaVita loses bid to dismiss class 'no-poach' claims

The outdoor sign seen at the DaVita Dialysis clinic in Denver February 16, 2017. REUTERS/Rick Wilking
  • Plaintiffs allege recruitment, compensation restraints
  • DaVita beat related DOJ criminal charges at trial

(Reuters) - A Chicago federal judge on Monday said a private civil antitrust case could move forward against DaVita Inc and other large employers in the outpatient medical-care market that are accused of conspiring to restrict employee compensation and mobility.

U.S. District Judge Andrea Wood in a 30-page ruling denied a bid from dialysis provider DaVita and co-defendants including Surgical Care Affiliates LLC to dismiss the plaintiffs' claims.

Wood dismissed allegations against defendant UnitedHealth Group Inc but gave the plaintiffs a chance to refile amended claims.

DaVita prevailed at trial in Colorado federal court in April on criminal antitrust claims tied to employment-related recruitment and retention practices. The case was seen as a test of the DOJ's push to apply criminal antitrust statutes to labor and employment markets.

A related trial in the DOJ's criminal antitrust case against Surgical Care Affiliates is set for January 2023 in Dallas federal court. The company has pleaded not guilty.

The plaintiffs in the private civil case are two former senior employees of Surgical Care Affiliates, which was acquired by a UnitedHealth subsidiary in 2017, who alleged an antitrust conspiracy over hiring and recruitment practices for senior employees at ambulatory surgery centers and outpatient medical facilities.

Wood said the plaintiffs at this early stage "are not required to quantify precisely the impact that defendants' conduct had on their compensation, nor is it necessary for them to allege a specific lost job opportunity."

The defendants have denied claims of a conspiracy.

A representative from Denver-based DaVita on Tuesday said in a statement that "this lawsuit is unwarranted and unsupported under the law." The complaint, DaVita said, "was brought by two people who have no connection to us and is a mirror image of a recent case resulting in unanimous acquittal."

A lawyer for DaVita at Morgan, Lewis & Bockius did not immediately respond to a similar request.

Lawyers for UnitedHealth and Surgical Care Affiliates at Kirkland & Ellis did not immediately respond to a message seeking comment.

A UnitedHealth spokesperson declined to comment about the court's order.

Plaintiffs' lawyers Dean Harvey at Lieff Cabraser Heimann & Bernstein and Joseph Saveri of the Saveri Law Firm declined to comment.

Wood's ruling allows the litigation to advance to discovery, the evidence-gathering process. She said DaVita and the other defendants can still try to prove "with a more complete record" that the plaintiffs "do not face an imminent threat of future injury."

Wood scheduled a status hearing in the private civil case for Oct. 6.

The case is In re Outpatient Medical Center Employee Antitrust Litigation, U.S. District Court for the Northern District of Illinois, No. 1:21-cv-00305.

For plaintiffs: Joseph Saveri of Joseph Saveri Law Firm; Dean Harvey of Lieff Cabraser Heimann & Bernstein; Linda Nussbaum of Nussbaum Law Group; and Michael Roberts of Roberts Law Firm

For Surgical Care Affiliates LLC and UnitedHealth Group Inc: Daniel Laytin of Kirkland & Ellis

For DaVita Inc: Romeo Quinto Jr of Morgan, Lewis & Bockius

(NOTE: This story was updated with comment from DaVita.)

Read more:

Criminal antitrust labor case survives health managers' bid to dismiss

After DOJ antitrust losses in employment trials, defense lawyers urge 'rethink'

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