Gonzalez-Maldonado v. MMM Health Care, Inc., 693 F.3d 244

González-Maldonado and Acevedo-Hernández, licensed physicians in southeast Puerto Rico, contracted with MMM and PMC to provide fee-for-service care to their enrollees, deriving most of their income from MMM/PMC invoices.
MMM, PMC, and MSO are sister corporations, wholly owned subsidiaries of MMM Holdings, Inc.; a secretary’s unsworn statement notes this, and appellants contest no proffered counter-proof.
In 2008, appellees proposed capitation contracts and MSO invited González to join MSO’s group; the physicians refused, continuing fee-for-service billing.
April 2008: MSO conditioned hospital privileges on joining MSO; MMM/PMC stopped honoring fee-for-service invoices after April 1, 2008; patients were informed of treatment restrictions.
September 30, 2008: MMM and PMC notified cancellation of the doctors’ provider contracts effective December 31, 2009 due to non-acceptance of capitation or MSO membership.
March 2, 2010: Plaintiffs filed suit alleging Sherman Act §1, SSA provisions, and Puerto Rico law; later added due process, equal protection, First Amendment free assembly, and monopolization claims; district court dismissed federal claims on the merits and declining supplemental jurisdiction.
On appeal, plaintiffs limit challenges to equal protection and free assembly claims and Sherman Act §1 claim.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Does the conduct amount to governmental action?	González-Maldonado asserts state action via government funding/regulation.	Appellees contend no governmental action; private HMOs not state actors.	No governmental action; constitutional claims fail.
Did exclusion from hospitals infringe free assembly?	Accused of abridging right to assemble by limiting practice locations.	No link between assembly rights and hospital access; not protected.	No violation; free assembly rights not implicated.
Did group boycott violate Sherman Act §1?	MMM/PMC/MSO formed a concerted boycott against plaintiffs, a group of private actors.	Subsidiaries are not independent entities; no single market; no conspiracy among independent actors.	No §1 violation; entities are wholly owned subsidiaries with unity of interest; Copperweld controls.
Was the §1 analysis flawed by pleading or district court procedures?	District court relied on an affidavit; plaintiffs argued misapplication of Rule 12(d).	Record supports dismissal; no viable factual grounds to plead §1 claim.	Issue waived; district court’s handling deemed harmless; no reversible error.

Jackson v. Metro. Edison Co., 419 U.S. 345 (1974) (private action requires government action for constitutional claims)
Marsh v. Alabama, 326 U.S. 501 (1946) (private actor can be state actor in company town contexts)
Blum v. Yaretsky, 457 U.S. 991 (1982) (government coercion or significant encouragement required for state action)
Rendell-Baker v. Kohn, 457 U.S. 830 (1982) (government funding alone does not convert private entity into state actor)
Brentwood Academy v. Tenn. Secondary Sch. Athletic Ass'n, 531 U.S. 288 (2001) (public entwinement requires government actors manage or control the private entity)
Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752 (1984) (unified corporate entities cannot conspire under §1)
American Needle, Inc. v. National Football League, 130 S. Ct. 2201 (2010) (not all joint ventures are immune; sports leagues analyzed as hybrid arrangements)
Fraser v. Major League Soccer, L.L.C., 284 F.3d 47 (2002) (hybrid league structure; independent centers of decisionmaking relevant to §1 analysis)
Logiodice v. Trustees of Me. Cent. Inst., 296 F.3d 22 (2002) (no entwinement when private trustees control private school)