Snodgrass-King Pediatric Dental Assocs., P.C. v. Dentaquest U.S. Ins. Co.
295 F. Supp. 3d 843
| M.D. Tenn. | 2018Background
- Snodgrass‑King, a multi‑office Tennessee dental practice, was excluded entirely from the TennCare dental network after DentaQuest became TennCare’s Dental Benefits Manager in 2013.
- Long history: Snodgrass had earlier disputes/litigation with prior managers (Doral/DentaQuest/Delta), including lawsuits settled in 2009 and 2011 that resulted in readmission of Snodgrass‑King providers; TennCare officials had previously expressed displeasure with provider network management.
- DentaQuest prepared its TennCare bid in 2012–2013, exchanged internal emails discussing a desire to “keep out” certain providers (including Snodgrass), developed a "large provider rule," and ultimately invited many providers but excluded all Snodgrass‑King locations in late 2013.
- Snodgrass‑King sued under 42 U.S.C. § 1983 alleging First Amendment retaliation; a jury awarded $7.4M compensatory and $14.8M punitive damages.
- District court granted DentaQuest’s Rule 50(b) motion: held DentaQuest’s exclusion was not state action (no coercion or sufficiently close nexus with TennCare), entered judgment as a matter of law for DentaQuest, and conditionally granted remittitur of punitive damages to a 1:1 ratio ($7.4M) and conditionally granted a new trial if remittitur rejected.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| State action (§ 1983) — whether DentaQuest acted "under color of state law" | DentaQuest followed TennCare preferences and internal emails show State wanted Snodgrass kept out; DentaQuest was incentivized to comply to win the contract | TennCare only expressed preferences; no coercion or close nexus; DentaQuest made final, independent network choices | Held for DentaQuest — no state action (no coercion/significant encouragement or close nexus) |
| First Amendment retaliation — whether protected speech motivated exclusion | Prior lawsuits and public criticism of TennCare/DentaQuest motivated exclusion | No evidence DentaQuest acted because of protected conduct; decisions were independent business judgments | Court granted JMOL for DentaQuest on liability because no state action; court noted that if state action existed, sufficient circumstantial evidence on motivation was presented to the jury |
| Punitive damages — propriety and amount | Plaintiff sought punitive damages for intentional/reckless retaliation | DentaQuest argued conduct not sufficiently reprehensible and award violates due process (excessive) | Court conditionally reduced punitive award to 1:1 remittitur ($7.4M); new trial conditionally granted if remittitur rejected |
| New trial — whether verdict against weight of evidence or tainted by trial error/misconduct | N/A (Plaintiff opposed new trial) | DentaQuest argued verdict against weight of evidence, erroneous jury instructions, speculative damages, counsel misconduct, evidentiary errors | Court granted JMOL; conditionally denied most new‑trial grounds but conditionally granted new trial if remittitur rejected; found damages evidence (expert) sufficient to support compensatory award |
Key Cases Cited
- Blum v. Yaretsky, 457 U.S. 991 (state action requires close nexus; regulation alone insufficient)
- Jackson v. Metro. Edison Co., 419 U.S. 345 (private conduct not state action absent coercion or significant encouragement)
- Brentwood Acad. v. Tenn. Secondary Sch. Athletic Ass'n, 531 U.S. 288 (state action principles; limits on attributing private conduct to state)
- Campbell v. PMI Food Equip. Grp., Inc., 509 F.3d 776 (6th Cir.) (state incentives do not automatically create state action)
- Wilcher v. City of Akron, 498 F.3d 516 (6th Cir.) (need proof of coercion/participation by officials to find state action)
- S.H.A.R.K. v. Metro Parks Serving Summit Cty., 499 F.3d 553 (6th Cir.) (encouragement by state actors insufficient to convert private choice into state action)
- Kolstad v. Am. Dental Ass'n, 527 U.S. 526 (punitive damages require at least subjective recklessness/evil motive)
- State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408 (due process guides review of punitive damages excessiveness)