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Kaiser Foundation Health Plan, Inc. v. Hawaii Life Flight Corp.

United States District Court, D. Hawaii

April 27, 2017

KAISER FOUNDATION HEALTH PLAN, INC., a foreign non-profit corporation, Plaintiff,
v.
HAWAII LIFE FLIGHT CORPORATION, a Hawaii corporation, and AIR MEDICAL RESOURCE GROUP, INC., a Utah Corporation, Defendants. HAWAII LIFE FLIGHT CORPORATION, a Hawaii corporation, Counterclaim Plaintiff,
v.
KAISER FOUNDATION HEALTH PLAN, INC., a foreign non-profit corporation, Counterclaim Defendant.

          ORDER GRANTING IN PART AND DENYING IN PART COUNTERCLAIM DEFENDANT KAISER FOUNDATION HEALTH PLAN, INC.'S MOTION TO DISMISS COUNTERCLAIM PLAINTIFF HAWAII LIFE FLIGHT CORPORATION'S FIRST AMENDED COUNTERCLAIM

          ALAN C. KAY, SR. UNITED STATES DISTRICT JUDGE

         TABLE OF CONTENTS

         PROCEDURAL BACKGROUND ........................................... 3

         FACTUAL BACKGROUND .............................................. 7

         STANDARD ....................................................... 14

         DISCUSSION ..................................................... 16

         I. Count I: Unfair Competition Claim ....................... 16

         A. Whether a Violation of EMTALA Constitutes Unfair Conduct ............................................... 17

         B. Whether HLF Has Failed to Allege Injury to Competition ........................................... 26

         II. Count II: Intentional Interference with Contract Claim ..40

         A. Whether KFHP Intentionally Induced Hospitals to Breach Their FCAs ............................................ 41

         B. Whether KFHP's Actions Were Not Justified ............. 47

         III. Count III: ERISA Claim .................................. 50

         IV. Count IV: Breach of Contract Claim ...................... 56

         A. Judicial Notice of Documents .......................... 56

         B. Whether HLF Has Asserted a Ripe Claim Regarding KFHP's Indemnity Promises .................................... 60

         1. Interpretation of the Indemnity Offer .............. 60

         2. Ripeness ........................................... 63

         C. Whether HLF Validly Received an Assignment of the Indemnity Rights and Has Standing ..................... 68

         D. Whether ERISA Preempts Count IV ....................... 71

         CONCLUSION ..................................................... 82

         For the reasons set forth below, the Court GRANTS IN PART and DENIES IN PART Plaintiff-Counter Defendant Kaiser Foundation Health Plan Inc.'s Motion to Dismiss Hawaii Life Flight Corporation's First Amended Counterclaim.

         PROCDURAL BACKGROUND

         This matter involves Defendant-Counter Plaintiff Hawaii Life Flight Corporation's (“HLF”) efforts to recover its billed charges for the provision of air ambulance services in Hawaii. First Am. Counterclaim, ECF No. 92 (“FACC”), ¶ 1. As evidenced by the parties' briefing, this case has an extensive procedural background and presents intricate claims which require resolution of complex factual and legal questions in order to determine responsibility for the cost of providing air ambulance transport services among the Hawaiian islands. Both the parties and the Court are familiar with the history of this case, and the Court will not repeat it here in full.[1]

         This case is related to a lawsuit in which Toby Sidlo filed a class action complaint on July 15, 2015 against Kaiser Permanent Insurance Company (“KPIC”) and Kaiser Foundation Health Plan, Inc. (“KFHP”) alleging claims under the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq. seeking to recover health care benefits and to enforce plan benefits. ECF No. 56 at 2-3; Sidlo v. Kaiser Permanent Insurance Company, CV No. 15-00269 ACK-KSC (“Sidlo”). Sidlo and HLF also entered into a Joint Litigation Agreement (“JLA”) on July 15, 2015. ECF No. 56 at 22-23.

         Separately, on February 18, 2016, KFHP filed a complaint in the instant case against HLF and its parent company Air Medical Resource Group, Inc. (“AMRG”) alleging that HLF and AMRG had violated the anti-assignment provision in KFHP's ERISA plans in Hawaii by attempting to procure assignment of members' rights and benefits. Id. at 4-5. Specifically, KFHP alleged that the Sidlo litigation was brought by HLF and/or AMRG in Sidlo's name. Id. at 5. On April 6, 2016, this Court consolidated the Sidlo and KFHP actions as both cases “involve[d] a determination as to whether [Sidlo's] purported assignment of rights to [HLF} was valid.” ECF No. 29; Sidlo, ECF No. 85.[2] HLF then filed a counterclaim against KFHP on April 14, 2016 alleging four claims: (1) unfair competition in violation of Hawaii Revised Statutes (“HRS”) § 480-2; (2) tortious interference with contract; (3) defamation; and (4) trade libel/disparagement. Id. at 5-6.

         In its October 31, 2016 Order, this Court addressed cross-motions for summary judgment filed by Sidlo and by KFHP and KPIC in the Sidlo action. ECF No. 56 at 8-9. HLF and AMRG also filed a joinder to Sidlo's motion. Id. at 9. The Court denied Sidlo's motion and granted KFHP and KPIC's motion in part and denied it in part. Id. at 77-78. In so holding, the Court concluded that Sidlo had standing, that the Inter-Facility Transport Policy applied to Sidlo's claim, and thus that Sidlo did not suffer an adverse benefit determination and could not seek review of a claim denial. See generally id. Additionally, the Court denied Sidlo's claims regarding notice of material modifications to the benefits plan arising from KFHP's offer of indemnification regarding HLF's claims, KFHP's alleged breach of fiduciary duty, and equitable estoppel for misrepresentations of rights under the contracts. See generally id. Finally, the Court dismissed Sidlo's claims regarding equitable indemnification as not ripe because HLF had not yet sued Sidlo, nor had Sidlo made any payment or discharged any legal obligation to HLF, so KFHP's alleged offer of indemnification was not yet applicable. See id. at 77. Sidlo filed a notice of appeal regarding this Order on November 29, 2016. Sidlo, ECF No. 516.

         The Court issued two orders in the instant case on November 17, 2016. In the first, it determined that the anti- assignment provision in KFHP's plans did not apply to health care providers, and thus the plan members could assign their rights to HLF. See ECF No. 76. In the second, the Court addressed KFHP's motion to dismiss HLF's counterclaim. The Court held that to the extent HLF's counterclaim was based on communications with plan members, the claims were preempted, ECF No. 77 at 22; but to the extent they were based on communications with hospitals, the Court could not definitively determine whether they pertained to KFHP's ERISA plans for purposes of preemption. Id. at 23-24. The Court also dismissed without prejudice HLF's unfair competition counterclaim as it was unclear what false or misleading statements were made or what the nature of the competition injured was. Id. at 29. In sum, the Court dismissed HLF's counterclaim with prejudice to the extent it was based on communications with members but otherwise granted leave to amend the other claims. Id. at 32.[3]

         The Court deconsolidated the cases on November 30, 2016. ECF No. 89. HLF filed its FACC in the instant case on January 4, 2017, again alleging four claims. ECF No. 92. KFHP filed the instant Motion to Dismiss on February 10, 2017. ECF No. 99 (“Motion”). HLF filed its Opposition on March 2, 2017. ECF No. 103 (“Opp.”). KFHP filed its Reply on March 9, 2017. ECF No. 104 (“Reply”).

         This Court held a hearing on KFHP's Motion on March 23, 2017.

         FACTUAL BACKGROUND

         HLF provides air ambulance services throughout the State of Hawaii, transporting patients by helicopter or fixed wing aircraft to hospitals and medical centers which are equipped to handle a patient's emergency medical condition, which may include transport from neighboring islands. Compl. ¶ 12. HLF is not a self-dispatching service; its “emergency flights are only dispatched by attending physicians and hospitals” when there is a qualified emergency. Id. ¶ 14. Many hospitals have entered into contracts with HLF to provide air ambulance services. Id. ¶ 25. These contracts contain First Call Agreements (“FCAs”) with HLF in exchange for HLF placing an aircraft at or near the hospital. Id. The FCAs provide that when air ambulance services are necessary, the hospital will call HLF first, provided that using HLF meets the requirements of the Emergency Medical Treatment & Active Labor Act (“EMTALA”).[4] Id.

         KFHP is an insurer and administrator for various insured employee welfare benefit plans providing health insurance coverage. Id. ¶ 28. KFHP is also a fiduciary under ERISA and is responsible for determining coverage and eligibility of participants and beneficiaries for benefits under the plans. Id. ¶ 29. Until August or September 2013, KFHP and HLF had a contract governing reimbursement rates, pursuant to which “HLF accepted as payment in full an average rate from KFHP that was less than the total billed rate HLF charged for a transport.” ECF No. 56 at 12; see also Sidlo, ECF No. 324-1 at 6 (KFHP asserted that HLF accepted on average $10, 638 from KFHP in payment where full billed charges averaged $32, 279 per transport). However, KFHP grew concerned with HLF's increasing rates and entered into a contract with American Medical Response (“AMR”), HLF's only competitor for air medical services in Hawaii.[5] Id. at 12. HLF then appears to have terminated its contract with KFHP. Id. at 12-13.

         HLF has alleged in its FACC that in connection with its health insurance services, KFHP has improperly made written and oral demands that hospitals arrange for “emergency transportation of patients through or as designated by KFHP” and has implemented procedures requiring hospitals to use air ambulance services provided by AMR.[6] FACC ¶ 5. In the Sidlo litigation, HLF submitted to the Court with KFHP's consent correspondence that KFHP sent to Hawaii Health Systems Corporation (“HHSC”) concerning the use of HLF's air ambulance services by Kona Community Hospital (“KCH”), an HHSC facility. ECF No. 77 at 9. HLF has an FCA with KCH which is set to expire on October 31, 2017. Id. On March 19, 2015, KFHP sent HHSC a cease-and-desist letter asserting that KCH's Dr. Richard McDowell had been preventing hospital staff from using AMR and had been directing the use of HLF instead. Id.; see also ECF No. 74-2 (letter). At the hearing held on April 4, 2017, this Court allowed HLF's request to refer to the contents of this letter in discussing the oral and written demands HLF has alleged KFHP made to hospitals. ECF No. 106 at 28-29 (Tr. of H'ring); see also id. at 10 (KFHP also referencing the contents of this letter).[7]

         In the letter, KFHP asserted that Dr. McDowell's actions constituted a breach of contract between KFHP and HHSC, which contract required HHSC to, among other things: “(i) notify Kaiser within 48 hours of a Kaiser member presenting to one of the HHSC facilities”; “(ii) cooperate with Kaiser in transferring Kaiser members to the Moanaluna Medical Center”; and “(iii) provide services in the most cost effective manner.” ECF No. 74-2; ECF No. 77 at 10. In addition, the letter noted that Dr. McDowell's conduct constituted intentional interference with KFHP's agreements with AMR and HHSC. ECF No. 74-2. KFHP also responded to Dr. McDowell's professed EMTALA concerns on the basis that the patients transported were in stable condition so EMTALA did not apply; as such, KFHP disagreed that KCH or HHSC should “dictate the mode of transportation, especially when Kaiser has medical and financial responsibility for the patient's post stabilization care.” ECF No. 74-2.

         In its FACC, HLF additionally alleged that approximately 129 of KFHP's members were transported by HLF for “medically necessary air medical transport services.” Id. ¶ 30. These individuals have assigned to HLF all rights, title, and interest in the plan related to the services HLF provided. See id. ¶¶ 6, 31-159 (hereinafter, “Assignors” or “members”). HLF has asserted that for many of the transports it provided to KFHP's members, KFHP has refused to pay HLF's charges. Id. ¶ 6. Instead, KFHP apparently unilaterally decided to pay 200% of the allowable Medicare payment per transport, which is less than HLF's claimed charge. Id. ¶ 172.

         Section G of KFHP's plans governs reimbursement of “Ambulance Services.” Id. ¶ 161. It provides that KFHP will pay 80% of “Applicable Charges” for ambulance services deemed necessary by a physician. Id. What constitutes the applicable charge depends on who provides the service. See id. ¶ 162. Member rates are used when a “Medical Group” or “Health Plan Hospital” provides the service. Id. For contracted Medical Groups or Health Plan facilities, the applicable charge is the negotiated rate. Id. For non-contracted facilities and providers, the applicable charge is the actual billed charge. Id. As HLF and KFHP do not currently have a negotiated rate, HLF asserts that KFHP is obligated to pay no less than 80% of HLF's actual billed charges. Id. ¶ 163.

         KFHP has asserted that Section G does not apply to transports between facilities; rather, it covers 100% of the costs of such transports pursuant to its Inter-Facility Transport Policy regardless of whether the provider has contracted with KFHP. Id. ¶¶ 165-166. This Court previously held in the Sidlo litigation that the Inter-Facility Transport Policy, not Section G, applied to Sidlo's claims. ECF No. 56 at 41-52.

         HLF has alleged that it believes KFHP has informed the Assignors that they “have no obligation to pay any amount to HLF” and should not do so, that KFHP would protect Assignors from any claim for payment by HLF, and that KFHP would reimburse Assignors for any amounts paid to HLF. Id. ¶ 168. In addition, KFHP has agreed to indemnify the Assignors for “any amount that might be deemed due and owing to HLF.” Id. ¶ 169. HLF has contacted each of the Assignors, except Toby Sidlo, advising them of the amount KFHP failed to pay and requesting that payment be made to HLF for the unpaid amounts. Id. ¶ 175.

         Based on the foregoing, HLF brought four counterclaims in its FACC, two direct claims and two derivative claims based on the assignment of rights to HLF. Count I is a direct claim for unfair competition pursuant to HRS § 480-2, based on KFHP's requirement that hospitals obtain authorization from KFHP before arranging emergency transport, in violation of EMTALA and the Affordable Care Act (“ACA”). Id. ¶¶ 177-198. KFHP allegedly used its economic power to cause hospitals to breach the FCAs with HLF and utilize the inferior air transport services offered by HLF's competitor. Id. ¶¶ 186-89, 191. Count II asserts a direct claim for tortious interference with contract, grounded in the fact that KFHP allegedly knew about the FCAs between HLF and the hospitals and caused the hospitals to breach the FCA agreements and utilize AMR instead. Id. ¶¶ 199-205.

         Count III asserts a derivative claim to recover health care benefits under ERISA, 29 U.S.C. § 1132(a)(1)(B), because KFHP has allegedly underpaid the Assignors' claims for the air medical transportation services HLF provided. Id. ¶¶ 206-217. In addition, HLF seeks to “clarify and enforce Assignor's rights to payment of those amounts still due and owing” through an injunction. Id. ¶ 219. Finally, Count IV asserts a derivative claim for breach of KFHP's indemnification promises to the Assignors, under which HLF asserts KFHP is obligated to pay 100% of the amounts HLF claims it is still owed. Id. ¶¶ 222-228.

         STANDARD

         Rule 12(b)(6) authorizes the Court to dismiss a complaint that fails “to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). Rule 12(b)(6) is read in conjunction with Rule 8(a), which requires only “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). The Court may dismiss a complaint either because it lacks a cognizable legal theory or because it lacks sufficient factual allegations to support a cognizable legal theory. Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1988).

         In resolving a Rule 12(b)(6) motion, the Court must construe the complaint in the light most favorable to the plaintiff and accept all well-pleaded factual allegations as true. Sateriale v. R.J. Reynolds Tobacco Co., 697 F.3d 777, 783 (9th Cir. 2012). “[O]nly pleaded facts, as opposed to legal conclusions, are entitled to assumption of truth.” United States v. Corinthian Colls., 655 F.3d 984, 991 (9th Cir. 2011). A “formulaic recitation of the elements of a cause of action” will not defeat a motion to dismiss. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). The complaint “must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570).

         “The plausibility standard . . . asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. “Where a complaint pleads facts that are ‘merely consistent with' a defendant's liability, it ‘stops short of the line between possibility and plausibility of entitlement to relief.'” Id. (quoting Twombly, 550 U.S. at 557). “In considering a motion to dismiss, the court is not deciding whether a claimant will ultimately prevail but rather whether the claimant is entitled to offer evidence to support the claims asserted.” Tedder v. Deutsche Bank Nat. Trust Co., 863 F.Supp.2d 1020, 1030 (D. Haw. 2012) (citing Twombly, 550 U.S. at 563 n.8).

         Under Rule 12(b)(6), review is generally limited to the contents of the complaint. Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001); Campanelli v. Bockrath, 100 F.3d 1476, 1479 (9th Cir. 1996). However, courts may “consider certain materials - documents attached to the complaint, documents incorporated by reference in the complaint, or matters of judicial notice - without converting the motion to dismiss into a motion for summary judgment.” United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003). The Court may also consider documents whose contents are alleged in a complaint and whose authenticity is not questioned by any party. Davis v. HSBC Bank Nev., N.A., 691 F.3d 1152, 1160 (9th Cir. 2012).

         If the Court dismisses the complaint, it should grant leave to amend regardless of whether a request has been made, unless it determines that the pleading cannot be cured by new factual allegations. OSU Student All. v. Ray, 699 F.3d 1053, 1079 (9th Cir. 2012). Leave to amend “is properly denied, however, if amendment would be futile.” Carrico v. City & Cty. of S.F., 656 F.3d 1002, 1008 (9th Cir. 2011).

         DISCUSSION

         I. Count I: Unfair Competition Claim

         Hawaii Revised Statutes § 480-2(a) prohibits “[u]nfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade of commerce.” The statute provides that it should be construed with “due consideration to the rules, regulations, and decisions of the Federal Trade Commission and the federal courts interpreting section 5(a)(1) of the Federal Trade Commission Act.” HRS § 480-2(b); Davis v. Four Seasons Hotel Ltd., 122 Haw. 423, 446, 228 P.3d 303, 326 (2010) (“This court has similarly recognized that Hawaii's consumer protection laws are also intended to preserve competition.”).

         In order to bring a claim for unfair methods of competition pursuant to HRS § 480-2, the Hawaii Supreme Court has clarified that plaintiffs must “qualify as persons who may bring a claim under HRS § 480-2(e)” and that they “have standing to bring a private claim for unfair competition under HRS §§ 481B-14 and 480-2 only if they satisfy the requirements of § 480-13.” Soule v. Hilton Worldwide, Inc., 1 F.Supp.3d 1084, 1094-95 (D. Haw. 2014) (Kay, J.) (citing Davis, 122 Haw. at 446 (2010)). “The essential elements of a claim for unfair competition [under § 480-13] are: (1) a violation of Chapter 480; (2) that causes an injury to plaintiffs' business or property; and (3) damages.” Id. at 1095. “To satisfy the second element, plaintiffs must allege an injury in fact and the nature of the competition” and “must ultimately show that their injury necessarily stems from the negative effect on competition caused by the violation as opposed to some pro-competitive or neutral effect of the defendant's antitrust violation.” Id.

         A. Whether a Violation of EMTALA Constitutes Unfair Conduct

         KFHP first asserts that HLF may not bring an unfair competition claim predicated on a violation of EMTALA, as HLF has no actionable claim against KFHP under that statute. Motion at 8-11. HLF responds that its claim is that “Kaiser's use of its economic power to force hospitals to seek insurance preauthorization for emergency services, in a manner that is contrary to the ACA and EMTALA, is unfair and contrary to public policy.” Opp. at 9 (footnote omitted).[8]

         The Court first turns to the issue of whether HRS § 480-2 requires an independently actionable predicate claim. The Hawaii Supreme Court does not appear to have spoken directly on this issue, but it has recognized that “unfair” means “conduct that (1) threatens an incipient violation of an antitrust law, or (2) violates the policy or spirit of one of those laws because its effects are comparable to or the same as a violation of the law, [9] or (3) otherwise significantly threatens or harms competition.” Robert's Haw. Sch. Bus, Inc. v. Laupahoehoe Transp. Co., 91 Haw. 224, 255 n.34, 982 P.2d 853, 884 n.34 (1999) (citing Cel-Tech Commc'ns, Inc. v. Los Angeles Cellular Tel. Co., 20 Cal.4th 163, 186, 973 P.2d 527, 544 (1999)). In addition, “competitive conduct is unfair when it offends established public policy and when the practice is immoral unethical, oppressive, unscrupulous or substantially injurious to customers.” Id. (internal citation and quotation omitted); see also FTC v. Sperry & Hutchinson Co., 405 U.S. 233, 244 n.5 (1972) (describing the factors the FTC uses in determining whether a practice is unfair as “offend[ing] public policy, ” “immoral, unethical, oppressive, or unscrupulous, ” or “caus[ing] substantial injury to consumers (or competitors or other businessmen)”).

         The Hawaii Supreme Court has also noted that HRS § 480-2 “was constructed in broad language in order to constitute a flexible tool to stop and prevent unfair competition and fraudulent, unfair or deceptive business practices for the protection of both consumers and honest businessmen and businesswomen.” Robert's Haw. Sch. Bus, 91 Haw. at 255 n.34, 982 P.2d at 884. “Whether competition is unfair or not generally depends on the surrounding circumstances of the particular case. What is harmful under certain circumstances may be beneficial under different circumstances.” Haw. Med. Ass'n v. Haw. Med. Serv. Ass'n, Inc., 113 Haw. 77, 108, 148 P.3d 1179, 1210 (2006) (“HMA”) (internal quotation marks and citation omitted).

         Hawaii's unfair competition law appears to be narrower than, for example, California's similar law, in terms of what conduct is rendered actionable as unfair competition. Hawaii's law appears to target conduct that is either anticompetitive or that offends public policy. By contrast, California defines unfair competition to “include any unlawful, unfair, or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising”. Cal. Bus. & Prof. Code § 17200. “By proscribing ‘any unlawful' business practice, section 17200 borrows violations of other laws and treats them as unlawful practices that the unfair competition law makes independently actionable.” Cel-Tech Commc'ns, 20 Cal.4th at 180, 973 P.2d at 539-40 (1999) (internal citation and quotation omitted). California thus explicitly appears to make actionable via its unfair competition law a broad swath of illegal acts that a plaintiff would otherwise be unable to bring.[10] Hawaii's law, in comparison, does not, on its face, render otherwise illegal acts independently actionable in an unfair competition suit except to the extent those illegal acts harm competition or offend the public policy of competition-related laws.

         The Hawaii Supreme Court's discussion in Whitey's Boat Cruises, Inc. v. Napali-Kaui Boat Charters, Inc. is instructive on this point. 110 Haw. 302, 132 P.3d 1213 (2006). In that case, the court addressed whether the plaintiff could bring a common law unfair competition claim based on its competitors' failure to obtain the proper permits for operating boat charters.[11] Id. at 312, 132 P.3d at 1223. The court affirmed summary judgment for the defendants, finding that there was no private right of action for damages for the failure to obtain the permits, as the “regulations were not promulgated with the objective of protecting business interests or competition but rather with the objective of protecting and preserving the environment for the general public.” Id. at 313, 318, 132 P.3d at 1224, 1229.

         The reasoning in Whitey's Boat Cruises accords with the Hawaii Supreme Court's discussion in Robert's Hawaii School Bus noted above that the meaning of the word “unfair” relates to harm to competition. See 91 Haw. at 255 n.34, 982 P.2d at 884. Although neither Whitey's Boat Cruises nor Robert's Hawaii School Bus go so far as to say that wrongful conduct sufficient to constitute unfair competition must be independently actionable by the plaintiff, both suggest that where an unfair competition claim is based on illegality, the reason why the conduct is illegal must relate to competition.

         To the extent that HLF's unfair competition claim is based on illegality, the Court concludes that EMTALA was not promulgated “with the objective of protecting business interests or competition, ” Whitey's Boat Cruises, 110 Haw. at 312, 132 P.3d at 1223, but rather because “Congress was concerned that hospitals were ‘dumping' patients who were unable to pay, by either refusing to provide emergency medical treatment or transferring patients before their conditions were stabilized.” Eberhardt v. City of Los Angeles, 62 F.3d 1253, 1255 (9th Cir. 1995) (citing H.R. Rep. No. 241, 99th Cong., 1st Sess. (1985)). “Congress enacted EMTALA to create a new cause of action, generally unavailable under state tort law, for what amounts to ‘failure to treat'....” Bryant v. Adventist Health Sys./W., 289 F.3d 1162, 1168 (9th Cir. 2002). HLF has not asserted, nor has the Court found any authority to suggest, that in enacting EMTALA Congress was at all concerned with business interests or competition.[12] To allow HLF to bring an unfair competition claim based on the purported illegality of KFHP's conduct would expand Hawaii's unfair competition law beyond what the Hawaii Supreme Court has indicated it would allow.[13]

         HLF also appears to argue instead, or in addition, that KFHP's conduct is unfair because it is contrary to the public policy established in EMTALA “of putting the patients' medical needs before the insurance companies' financial goals.” Opp. at 11. However, it is not apparent from the FACC that there is a plausible basis to believe that the medical needs of any patients have been affected by KFHP's conduct. Although HLF alleges that it has lost revenue and profit from the transport of patients who would have been placed on HLF aircraft but for KFHP's conduct, FACC ¶¶ 192-96, nowhere in the FACC does HLF allege that the use of a different transportation service harmed the medical needs of those patients, or even that in making this choice, the physicians disregarded the medical needs of patients or differential transport risk from choosing HLF's competitor.[14]

         Indeed, HLF has specifically alleged that “KFHP does not know whether, for example, any patient has suffered adverse medical consequences as a result of delay engendered by [KFHP's Hospital Operation's Center]'s preauthorization process.” Id. ¶ 184. KFHP's alleged ignorance, however, does not excuse HLF from its pleading burden. At most, HLF has alleged as a general matter that patient health can quickly deteriorate in emergency situations and that by maintaining more aircraft closer to hospitals, HLF “best serve[s] patients' medical interests by minimizing the risk to the patient being transferred.” Id. ¶¶ 183, 186, 187. These allegations do not provide the Court with a plausible basis to conclude that any violation of EMTALA that actually occurred here posed a risk to patient health.[15] And while reading the FACC to allege a technical violation of EMTALA where AMR was chosen over HLF, the Court nevertheless still has difficulty finding that such a violation is contrary to public policy in the absence of allegations regarding harm to patient health. Cf. Riopta v. ...


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