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City of New York v. Group Health Incorporated

August 18, 2011

CITY OF NEW YORK, PLAINTIFF-APPELLANT,
v.
GROUP HEALTH INCORPORATED, HIP FOUNDATION, INC., AND HEALTH INSURANCE PLAN OF GREATER NEW YORK, DEFENDANTS-APPELLEES.



Appeal from a judgment of the United States District Court for the Southern District of New York (Richard J. Sullivan, Judge) granting summary judgment to Defendants-Appellees and dismissing the complaint. The City of New York argues that the district court erred by concluding that the market pled in its antitrust complaint is legally insufficient and by denying the City's motion to amend its complaint. We conclude that summary judgment was appropriate and that it was within the district court's discretion to deny leave to amend. We therefore AFFIRM the judgment of the district court.

The opinion of the court was delivered by: John M. Walker, Jr., Circuit Judge:

10-2286-cv

City of New York v. Group Health Inc.

Argued: May 4, 2011

Before : MINER, WALKER, and WESLEY, Circuit Judges.

Plaintiff-Appellant City of New York appeals from a judgment 27 of the United States District Court for the Southern District of 28 New York (Richard J. Sullivan, Judge) granting summary judgment to 29 Defendants-Appellees Group Health Incorporated ("GHI"), HIP 30 Foundation, Inc., and Health Insurance Plan of Greater New York 31 (together, "HIP"), and dismissing the City's antitrust complaint 32 without leave to amend.

33 The City sued health insurance providers GHI and HIP under 34 federal and New York State antitrust laws, seeking to prevent the 35 companies from merging. The district court granted summary 36 judgment to GHI and HIP, holding that the market definition the 37 City alleged as the basis of its claims is legally deficient. It also denied the City's motion to amend its complaint to allege a 2 new market definition. The City challenges these conclusions on 3 appeal.

4 We agree with the district court that the alleged relevant 5 market is legally deficient, and conclude that its denial of leave 6 to amend was not an abuse of discretion. We therefore AFFIRM the 7 district court's judgment.

BACKGROUND

I. New York City's Health Benefits Program and the Proposed Merger

The City and several related entities obtain health insurance 12 for their employees and their employees' dependents through the 13 City's Health Benefits Program. Approximately 1.2 million 14 individuals are insured through the Program. The City's Office of 15 Labor Relations administers the Program jointly with the Municipal 16 Labor Committee, an association of about 50 unions that represent 17 the employees.

18 As a result of collective bargaining agreements and municipal 19 law requirements, the City offers its employees several types of 20 health insurance plans. Employees can select coverage through a 21 Health Maintenance Organization ("HMO") plan, a Participating 22 Provider Organization ("PPO") plan, or a Point of Service ("POS") 23 plan.

The City periodically issues Requests for Proposals ("RFPs") 2 inviting insurers to propose plan designs and associated premiums.

3 Insurance providers compete to be selected during each procurement 4 round.

Employees choose among the plans that the City selects.

Those who do not receive Medicare benefits can choose among thirteen plans, and Medicare ...

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