UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF TENNESSEE

AT GREENEVILLE

CHRISTINE BEARDEN, et al.,

Plaintiffs, Case No. 2:19-cv-00055

Hon. Curtis L. Collier
v.

BALLAD HEALTH, et al.,

Defendants.

EXPEDITED MOTION BY DEFENDANTS BALLAD HEALTH AND THE

INDIVIDUAL BALLAD HEALTH DIRECTORS TO STRIKE PORTIONS OF
PLAINTIFFS’ RESPONSE TO DEFENDANTS’ MOTION TO DISMISS AND FOR
ADDITIONAL TIME TO FILE A REPLY BRIEF

Defendant Ballad Health and the individual Ballad Health Directors (“defendants”)

respectfully move (1) to strike all of the exhibits to plaintiffs’ response to defendants’ motion to

dismiss (the “Opposition”) and all references to the exhibits and other material not properly part

of the pleadings in this case (see Docs. 37-1 to 37-20; Doc. 38, Page ID 830-35, 838-41, 847-50,

854-58), and (2) for a seven-day extension of time to file a reply in support of their motion to

dismiss.

I. Introduction

On April 12, 2019, plaintiffs filed a complaint against defendants alleging an antitrust

law violation under Section 8 of the Clayton Act, 15 U.S.C. § 19. The complaint lacked basic

pleading requirements of that statute, some of which defendants thought might be cured if

plaintiffs amended the complaint. Consistent with this Court’s Order Governing Motions to

Dismiss (Doc. 4), on May 14, 2019, counsel for the parties met telephonically and conferred

regarding the deficiencies in plaintiffs’ complaint. See Doc. 29 (Defs.’ Notice of Cert. of

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 Compliance). During the meet-and-confer, plaintiffs’ counsel indicated that plaintiffs intended

to amend their complaint, but plaintiffs did not do so before defendants’ deadline to file a motion

to dismiss. Id. Defendants thus timely moved to dismiss the complaint on June 10, 2019. See

Doc. 27 (Mot. to Dismiss).

In their motion to dismiss (defendants’ “Motion”), defendants identify plaintiffs’

numerous pleading deficiencies, including that plaintiffs have not pleaded any actual or

imminently threatened injury to satisfy Article III standing or antitrust standing requirements,

and have not pleaded requisite elements of the Clayton Act Section 8 statute under which they

bring their claim. As detailed in defendants’ Motion, plaintiffs’ complaint is starkly devoid—not

just deficient—of the allegations needed to satisfy the pleading requirements of this case. In

notifying plaintiffs of these omissions during the meet-and-confer, defendants looked to avoid

the expenditure of resources on successive motions to dismiss against complaints that might be

amended so as to contain at least the baseline elements of the claims plaintiffs purport to bring.

Plaintiffs did not amend the complaint yet apparently agree that the complaint is

deficient. They attempt to defeat defendants’ Motion by filing the Opposition, which they

confess contains numerous “factual enhancements” (Doc. 38, Page ID 838), none of which

appear in the complaint or are central to its claim. The “factual enhancements” include 17

unauthenticated exhibits—totaling over 200 pages of material—none of which are referred to in,

let alone attached to, the complaint. The vast majority of plaintiffs’ Opposition is devoted to

reciting and relying on these exhibits and other new materials not referenced in the complaint,

which is why plaintiffs needed 34 pages (which far exceeds the 25-page limit set by Local Rule

7.1(b)) to respond to defendants’ 23-page Motion. Plaintiffs’ use of unauthorized extra pages

and new exhibits and need to rely on those exhibits underscores that their Opposition is wholly

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 improper and that the portions of its Opposition outside the pleadings (the majority) should be

stricken.

The Court should strike plaintiffs’ Opposition for three primary reasons. First, none of

plaintiffs’ attachments or references to those attachments or to other material outside the

pleadings should be considered by this Court under the Federal Rules of Evidence, Federal Rules

of Civil Procedure or prevailing case law. Second, because the Court should not consider the

majority of the material contained within the Opposition, defendants should not be required to

expend time, money and resources responding to completely extraneous documentation that aims

solely to distract from plaintiffs’ deficient complaint. Third, if plaintiffs desire to have this Court

consider 200 additional pages of materials and discussion of those materials, then plaintiffs’

proper course of action was to amend its complaint, just as this Court’s Order Governing

Motions to Dismiss (Doc. 4) contemplates. Because they did not, the motion to dismiss should

be granted.

II. Plaintiffs’ Opposition Materials Are Not Properly Considered on a Motion To

Dismiss

The majority of plaintiffs’ Opposition contains arguments, facts and exhibits that are

outside the currently operative pleadings in this case and should therefore be stricken. Federal

Rule of Civil Procedure 8 requires that in order to state a claim for relief, a complaint must

contain “a short and plain statement of the grounds for the court’s jurisdiction” and “a short and

plain statement of the claim showing that the pleader is entitled to relief.” Defendants filed a

motion under Rule 12, which addresses defenses made to any pleading by motion, because

plaintiffs’ complaint does not satisfy those requirements. In making a determination under Rule

12, this Court “may consider only matters properly part of the complaint or pleadings.” Riggs

Drug Co. v. Amerisourcebergen Drug Corp., No. 3:09-cv-538, 2010 WL 3630123, at *1-2 (E.D.

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 Tenn. Sept. 13, 2010) (quoting Armengau v. Cline, 7 F. App’x 336, 344 (6th Cir. 2001)).

Documents properly part of the complaint or the pleadings are those “referred to in a complaint

and central to the claim.” Id. (internal quotation marks omitted). Therefore, “[a] party may not

amend its complaint by submitting additional allegations in response to a Rule 12(b)(6) motion

to dismiss.” Knowles v. Chase Home Finance, LLC, No. 1:11-cv-01051, 2012 WL 13018539, at

*9 (W.D. Tenn. Aug. 2, 2012). The Sixth Circuit is clear on this issue: “we should not assume

facts that were not pled” and “will instead consider only those facts alleged in [the plaintiffs’]

complaint and the reasonable inferences that can be drawn from those facts.” Strayhorn v. Wyeth

Pharms., Inc., 737 F.3d 378, 399 (6th Cir. 2013) (alteration in original) (internal quotation marks

omitted).

In the Opposition, plaintiffs attempt an end-around to amend the complaint; the added

materials are neither referred to in the complaint nor central to the claims in the complaint.

Indeed, plaintiffs make little to no attempt to argue that their complaint as currently pleaded

states a claim for relief. They do not even reference their own complaint until page 8 of their

Opposition. Instead, they devote the majority of their Opposition to discussing what essentially

amounts to an argument that they could have stated a claim had they amended their complaint to

add a litany of new allegations and exhibits, which, of course, they did not do.

For instance, nowhere does the complaint state that East Tennessee State University

(“ETSU”) is a corporation. In fact, besides the allegation that its board includes two members

who are also Ballad Health board members, the complaint does not discuss ETSU, other than to

allege a relationship between ETSU and ETSU Physicians/MEAC. The complaint does not

allege that ETSU is a corporation or has any other legal status. Yet, in the Opposition, plaintiffs

devote four pages and five exhibits to whether ETSU is a corporation. See Doc. 38, Page ID

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 830-34; Docs. 37-1 to 37-7 (Exhs. 1-5B). The complaint’s lack of any allegations on this issue is

ample grounds for the Court to find that documents and arguments about ETSU’s formation and

legal status are not central to any of the complaint’s claims and order them stricken.

Similarly, the complaint contains no reference to a properly defined relevant product

market or relevant geographic market for antitrust law purposes. Or, to the extent that the

complaint’s reference to “the provision of medical and allied health services” is a reference to a

relevant market (see Doc. 1 (Compl.), Page ID 4 (¶ 9)), plaintiffs spend 9 pages of their

Opposition attempting to establish an entirely different relevant product and service area market

based on exhibits and argument regarding those exhibits. See Doc. 38, Page ID 834-43; Docs.

31-8 to 31-13 (Exhs. 6-10)). Tellingly, Exhibit 10 was not generated until June 23, 2019, more

than two months after the complaint was filed on April 12, 2019, so it certainly was not, and

could not, have been referenced or even envisaged by the complaint. These documents and

arguments are not discussed in the complaint nor are they central to any of the allegations of the

complaint and should be stricken.

As another example, the complaint alleges only that the eight board members who do not

sit on two boards are included as defendants because “based on information and belief . . . more

such prohibited interlocking directorates [could] exist.” Compl. ¶ 13. Yet, the Opposition

makes an entirely new allegation, i.e., that those directors are properly in this suit because they

purportedly “allowed” the alleged interlock. Doc. 38, Page ID 847. Yet another example is that

the complaint does not contain a single allegation regarding what kind of imminent injury

threatens plaintiffs from the alleged interlocks at issue in this case, but the Opposition spends

pages discussing news articles not attached as exhibits and one exhibit that is attached as alleged

“evidence” of their first iteration of an alleged theory of harm. Id. at Page ID 847-50; Doc. 37-

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 14 (Exh. 11). New arguments and documents that are not even contemplated by the current

complaint are not properly considered as part of a motion to dismiss and should be stricken.

The same pattern applies to the complaint’s allegation that state action immunity does not

apply to this case. Plaintiffs attach to the Opposition and add arguments regarding entirely new

Exhibits 12-17—which range in subject matter concerning alleged training requirements, board

and committee meeting minutes regarding media branding and billing code discussions,

legislative history and email communications—none of which are referred to in the complaint.

Indeed, both Exhibits 12 and 17 are dated after April 12, 2019, when the complaint was filed, so

they could not have been referenced in the complaint or central to its claim. None of these new

arguments and exhibits should be considered part of the pleadings in this case and should be

stricken. See Doc. 38, Page ID 854-58; Docs. 37-15 to 37-20 (Exhs. 12-17); see also Knowles,

2012 WL 13018539, at *9 (declining to consider emails, documents, and an affidavit attached to

plaintiffs’ opposition to motion to dismiss because a party may not “submit matters outside the

pleadings . . . to defeat a motion to dismiss,” and granting defendant’s motion to dismiss); Riggs

Drug Co., 2010 WL 3630123, at *1-2 (striking seven exhibits attached to plaintiff’s opposition

to motion to dismiss where the exhibits were “not referred to in the complaint and central to

[plaintiff’s] claims,” and striking all references to the exhibits in plaintiff’s opposition brief).

The only other documents courts may consider at the motion to dismiss stage are those

that are “public records, matters of which a court may take judicial notice, and letter decisions of

other governmental agencies.” Riggs Drug Co., 2010 WL 3630123, at *1 (internal quotation

marks omitted). However, none of the exhibits from plaintiffs’ Opposition qualify as public

records or documents for which judicial notice may be taken as none “can be accurately and

readily determined from sources whose accuracy cannot be reasonably questioned.” Fed. R.

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 Evid. 201. For instance, plaintiffs provide no evidence of authenticity as to any of the

documents attached, which span from website printouts to emails, and, in many cases, plaintiffs

attach only portions or drafts of documents, where accuracy would certainly be in question as a

matter of completeness, if not on other grounds. E.g., Passa v. City of Columbus, 123 F. App’x

694, 697-98 (6th Cir. 2005) (concluding district court erred in taking judicial notice of content of

a government website because the website contained information “whose accuracy can

reasonably be questioned”). And, even if judicial notice were proper for some of the documents,

the argument in the Opposition regarding those documents should still be stricken as outside the

pleadings. See Knowles, 2012 WL 13018539, at *9; Riggs Drug. Co., 2010 WL 3630123, at *1.

III. Defendants Should Not Be Required To Respond to Material in the Opposition

Outside of the Pleadings

Responding to the material in plaintiffs’ Opposition that is outside the pleadings

essentially requires defendants to write a renewed motion to dismiss based on new and different

facts and assertions. It is the equivalent to allowing plaintiffs to amend their complaint via a

response brief, which has been expressly prohibited by the Sixth Circuit under circumstances

similar to those present here. See Strayhorn, 737 F.3d at 399 (rejecting plaintiffs’ attempts to

“add[] new factual allegations to a complaint . . . via an appellate brief” when they should have

filed an amended complaint). Plaintiffs’ antics in refusing to properly engage in the meet-and-

confer process or to amend the complaint are now forcing defendants and this Court into

repetitive motion practice with no justification. And the addition of materials which postdate the

complaint insinuates that proper research may not have been conducted prior to the original

filing of the complaint. Now that the deficiencies in the complaint have been identified twice by

defendant and once by plaintiffs, who tacitly admit deficiencies by filing all of the material

outside the pleadings with their Opposition, defendants should not be required to reply to the

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 materials plaintiffs submitted for the first time in their Opposition unless they have properly been

incorporated into an amended complaint. No amended complaint exists, and therefore this Court

should grant defendants’ Motion.

IV. Plaintiffs Should Have Filed an Amended Complaint; Their Currently Operative
Complaint Should Be Dismissed

At this early stage of the litigation, plaintiffs should have amended their complaint to

attempt to sufficiently plead their claim. But instead, they filed an overlength brief with 200

pages of exhibits that they argue serve to correct the errors defendants identified with their

currently operative complaint. Under these circumstances, the “appropriate method for adding

new factual allegations to a complaint is not via [a] brief, but by filing an amended complaint.”

Bah v. Attorney Gen. of Tenn., No. 13-2789-STA-DKV, 2014 WL 2589424, at *12 (W.D. Tenn.

June 10, 2014), aff’d, 610 F. App’x 547 (6th Cir. 2015); accord Strayhorn, 737 F.3d at 399.

Given that defendants notified plaintiffs that they should amend their complaint both before

defendants filed their motion to dismiss and by the fact of filing the motion to dismiss, a court

order dismissing the complaint is proper.

V. Defendants Request Additional Time To Respond to Plaintiffs’ Overlength

Opposition and Seventeen New Exhibits

In conjunction with this Motion to Strike, defendants respectfully request that the Court

grant defendants a seven-day extension of time until July 12, 2019 to file a reply to plaintiffs’

overlength opposition brief and to over 200 pages of “factual enhancements.” Plaintiffs’

Opposition contains voluminous new materials and allegations that are not in their pleadings.

Defendants request this additional seven days to have adequate time to respond to the new

materials and new allegations.

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 VI. Conclusion

For the foregoing reasons, defendants respectfully request that the Court grant

defendants’ motion to strike portions of plaintiffs’ opposition to defendants’ motion to dismiss

(Docs. 37-1 to 37-20 and Doc. 38, Page ID 830-35, 838-41, 847-50, 854-58), and grant

defendants a seven-day extension until July 12, 2019 to file a reply brief.

Dated: July 1, 2019 Respectfully Submitted,

HUNTER, SMITH & DAVIS, LLP

/s/ Jimmie C. Miller

Jimmie C. Miller
BPR No. 009756
P. O. Box 3740
Kingsport, TN 37664
(423) 378-8852
jmiller@hsdlaw.com

McDERMOTT WILL & EMERY LLP

Jeffrey W. Brennan (admitted pro hac vice)

Michelle Lowery (admitted pro hac vice)
500 North Capitol Street, N.W.
Washington, DC 20001
(202) 756-8127
jbrennan@mwe.com
mslowery@mwe.com

Attorneys for Defendants Ballad Health and all the

individual Defendants in their capacities as
members of the Board of Directors of Ballad Health

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 CERTIFICATE OF SERVICE

I hereby certify that on the 1st day of July, 2019, a copy of the foregoing Expedited

Motion to Strike was filed electronically using the Court’s ECF system. Notice of this filing

will be sent by operation of the Court’s electronic filing system to all parties indicated on the

electronic filing receipt. All other parties will be served by regular U.S. Mail. Parties may

access this filing through the Court’s electronic filing system.

/s/ Jimmie C. Miller

Jimmie C. Miller

DM_US 160737106-8.066774.0015

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