Third Circuit Revives Conspiracy Claims against Hospital and Insurer

The proper role of antitrust enforcement in health care reform is currently a hot topic in Washington and elsewhere. The courts, of course, do not engage in such debates, but only resolve cases brought before them. In a closely watched case, on November 29, 2010, the U.S. Court of Appeals for the Third Circuit reinstated a Pittsburgh hospital’s antitrust lawsuit against a competing hospital and the area’s largest health insurer. WestPenn Allegheny Health System, Inc. v. UPMC; Highmark, Inc., 3d Cir., No. 09-4468 (Nov. 29, 2010). Reversing the lower court’s dismissal under Twombly, the Third Circuit found that the plaintiff had sufficiently alleged a mutual protection conspiracy and an attempt to monopolize. Importantly, the court’s decision hinged in part on a finding of a plausible antitrust injury suffered by the plaintiff, a competing hospital, and rejected the idea that Twombly requires a heightened probability standard for an antitrust claim to survive a motion to dismiss. Also of note, the Supreme Court’s decision earlier this year in American Needle — the first antitrust Supreme Court ruling for a plaintiff in approximately 15 years — was an important tool in the Third Circuit’s analysis.