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B & H MEDICAL, L.L.C., a Michigan limited liability company, Plaintiff-Appellant, STEPHEN M. RYAN, P.L.L.C. and STEPHEN M. RYAN, Attorneys-Appellants (06-1339), v. ABP ADMINISTRATION, INC.; WRIGHT & FILIPPIS, INC., Defendants-Appellees. |
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Appeal from the United States District Court
for the Eastern District of Michigan at Detroit.
No. 02-73615—Gerald E. Rosen, District Judge.
Argued: March 14, 2008
Decided and Filed: May 7, 2008
Before: MOORE, GILMAN, and SUTTON, Circuit Judges.
KAREN NELSON MOORE, Circuit Judge. In this antitrust case, we consider the legality of an agreement between non-party Blue Cross Blue Shield of Michigan (“BCBSM”) and the Defendants-Appellees, Wright & Filippis, Inc. and its subsidiary ABP Administration, Inc. (collectively “W&F”). This agreement began in 1992 and established an exclusive network of preferred providers to supply durable medical equipment and prosthetics and orthotics to enrollees in certain health-benefits plans offered to Chrysler Corporation (“Chrysler”) employees and retirees and later to certain employees and retirees of Ford Motor Company, as well as participants in the Michigan Public School Employees Retirement System (“MPSERS”). Following a competitive bidding process, BCBSM selected W&F to administer the network created by the contract, which has since been renewed multiple times. After its application to join this network was rejected in 2000, Plaintiff-Appellant B & H Medical, L.L.C. (“B&H”), filed this lawsuit in September 2002, attacking the network under the antitrust laws as an illegal exclusive-dealing arrangement that allegedly barred B&H from competing in the “sale, lease or rental of medical durable equipment and medical supplies to large insurance provider networks,” which B&H claimed was the relevant market. Joint Appendix (“J.A.”) at 32-34 (Am. Compl. at ¶¶ 6-13).
In a lengthy and well-reasoned opinion, the district court granted W&F’s motion for summary judgment, rejecting B&H’s definition of the relevant market and finding that B&H’s antitrust claims failed for several reasons, among them that B&H failed to demonstrate antitrust standing and that the alleged exclusive-dealing agreement foreclosed no more than thirteen percent of a properly defined relevant market. The district court later granted in part W&F’s motion for sanctions pursuant to Rule 11 of the Federal Rules of Civil Procedure, imposing over $84,000 dollars in sanctions against Attorneys-Appellants Stephen M. Ryan, P.L.L.C., and Stephen M. Ryan (collectively “Ryan”) for “failing to dismiss this case when a lengthy discovery period failed to disclose any support for the antitrust claims asserted in the complaint.” B & H Med., L.L.C. v. ABP Admin., Inc., 354 F. Supp. 2d 746, 748 (E.D. Mich. 2005). In addition to appealing the district court’s grant of summary judgment, B&H also appeals a discovery order issued by the district court that limited B&H’s efforts to obtain broad categories of information from nonparty BCBSM, and Ryan appeals the sanctions award. W&F filed a motion pursuant to Federal Rule of Appellate Procedure (“FRAP”) 38 seeking the imposition of appellate sanctions against B&H and Ryan for pursuing a frivolous appeal.
For the reasons discussed below, we AFFIRM the district court in all respects and we GRANT W&F’s motion for appellate sanctions.