Dr. Mark G. Turner, DDS, PC v. Virginia Department of Medical Assistance Services ("DMAS"), 3:17-cv-00527

Background

Dr. Mark G. Turner (plaintiff) was an Over-21 Medicaid (Smiles for Children "SFC") dental provider in Roanoke who treated a large share of local adult Medicaid patients until his DentaQuest contract was terminated in January 2014.
Virginia Department of Medical Assistance Services (DMAS) contracts with DentaQuest to administer SFC; DMAS has statutory authority to enter and terminate contracts.
Local dentists (Harvey, Dickinson, Black) are alleged to have organized Mission of Mercy (MOM)/Mini-MOM clinics and to have coordinated with DMAS/DentaQuest so that Harvey’s Commonwealth Dental Clinic (CDC) would provide Over-21 Medicaid services after Turner’s termination.
Turner sued in federal court alleging a Section 1 Sherman Act violation (conspiracy to exclude him from the Medicaid market) and several state-law claims; a prior, similar suit in the Western District of Virginia had been dismissed.
Defendants moved to dismiss; the district court considered issue preclusion, state-action (Parker) immunity, and the Twombly/Iqbal pleading standards.
Court granted dismissal: Sherman Act claim dismissed with prejudice (failure to plead agreement and antitrust injury; DMAS also immunized), state-law claims dismissed without prejudice, motion to transfer denied as moot.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether DMAS is precluded from relitigating Parker-immunity by prior Western District decision	Turner argued DMAS may not invoke state-action immunity	DMAS invoked issue preclusion (collateral estoppel) based on earlier dismissal	Issue preclusion did not apply because prior dismissal rested on two independent bases so immunity was not essential to that judgment
Whether DMAS is immune under Parker/state-action doctrine	Turner contended DMAS actions were not clearly state policy and relied on market participants so immunity inapplicable	DMAS asserted it acted pursuant to clearly articulated state policy and is a prototypical state agency not subject to active-supervision requirement	DMAS entitled to Parker immunity: policy clearly articulated and active supervision is inapplicable here
Whether complaint pleads a Section 1 agreement/combination (Twombly/Iqbal)	Turner alleged conspiratorial communications and parallel conduct among dentists, DMAS and DentaQuest that eliminated him from the market	Defendants argued allegations are conclusory, show at most advice/consultation or parallel conduct, and fail to plead the required ‘‘meeting of the minds’’	Court found plaintiff failed to plausibly allege a contract/combination/conspiracy and dismissed the §1 claim
Whether plaintiff alleged antitrust injury and standing	Turner claimed economic harm and deterrence to entry as antitrust injury	Defendants argued Turner’s injury flowed from an at-will contract termination and substitution of another contractor — not harm to competition	Court held Turner failed to allege antitrust injury (harm to competition) and lacks antitrust standing

Key Cases Cited

T.G. Slater & Son v. Brennan LLC, 385 F.3d 836 (4th Cir. 2004) (pleading standard: assume well-pleaded allegations true on Rule 12(b)(6))
Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plaintiff must plead facts showing a plausible agreement under §1)
Ashcroft v. Iqbal, 556 U.S. 662 (2009) (legal conclusions not accepted as true; plausibility requirement)
Parker v. Brown, 317 U.S. 341 (1943) (states/agents immune from Sherman Act when acting in sovereign capacity)
Cal. Retail Liquor Dealers Ass'n v. Midcal Aluminum, 445 U.S. 97 (1980) (two-part Parker test: clearly articulated policy and active state supervision)
N.C. State Bd. of Dental Exam'rs v. FTC, 135 S. Ct. 1101 (2015) (active-supervision requirement applies where controlling decisionmakers are active market participants)
Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477 (1977) (antitrust injury required: laws protect competition, not individual competitors)
SD3, LLC v. Black & Decker (U.S.) Inc., 801 F.3d 412 (4th Cir. 2015) (antitrust complaints must plead who/what/when/where to survive dismissal)