contract with three hospitals was terminated when they entered
into an exclusive services contract with a group of physicians of
which he was not a member for lack of antitrust injury).
Nothing in the complaint suggests that patients were turned
away or denied emergency psychiatric services. In fact, the
complaint leads to the opposite conclusion, since it states that
in the one case Good Shepherd acceded to Magellan's demands that
Dr. Wagner be avoided, the patient was simply seen by another
hospital physician. I am not required to ignore facts set forth
in a complaint and exhibits that undermine the plaintiff's claim.
Hamilton v. O'Leary, 976 F.2d 341, 343 (7th Cir. 1992). Dr.
Wagner is not precluded but has continued to practice at Good
Shepherd in the emergency psychiatric services market. The only
restraint alleged is that he may not treat patients who arrive at
the emergency room and have Magellan health coverage. Since that
time, Good Shepherd has refused Magellan's request to remove Dr.
Wagner from the on-call rotation or deflect patients from him.
Absent allegations raising an inference of any injury to
competition and given allegations in the complaint raising the
opposite inference of injury only to Dr. Wagner, I must dismiss
the antitrust claims.
IV. State Claims
Having decided Dr. Wagner's antitrust claims fail for lack of a
cognizable antitrust injury, I lack subject matter jurisdiction
over the remaining claims under state law. Because no discovery
has taken place to date in this case, I dismiss the state law
claims without prejudice so that Dr. Wagner can pursue them in
the more appropriate state forum. The relationships between
physicians, hospitals, and health management organizations
implicated in this case are important areas of state interest and
better dealt with in Illinois state court.
V. Attempt to Add RICO Claims
In his response to the defendants' motion for judgment on the
pleadings, Dr. Wagner claims that the facts alleged in his
complaint support a claim under the Federal Racketeering
Influence and Corrupt Organizations Act ("RICO"),
18 U.S.C. § 1961 et seq., and asks that I add this count to his complaint.
Defendants object to this late request and maintain that such
action would be futile in any event.
"Having specified the wrong done to him, a plaintiff may
substitute one legal theory for another without altering the
complaint." Albiero v. City of Kankakee, 122 F.3d 417, 419 (7th
Cir. 1997). However, Dr. Wagner seeks to use mail and wire fraud
as predicate acts to constitute racketeering activity, and
Federal Rule of Civil Procedure 9(b)'s mandate that a plaintiff
plead "all averments of fraud [with] particularity" applies
equally to allegations of fraud in a civil RICO complaint. See
Graue Mill Dev. Corp. v. Colonial Bank & Trust Co.,
927 F.2d 988, 992 (7th Cir. 1991). Although Rule 9(b) requires that a RICO
plaintiff provide only a general outline of the alleged fraud
scheme, the complaint must, at minimum, describe the predicate
acts with some specificity and "state the time, place, and
content of the alleged communications perpetrating the fraud."
Id. A RICO complaint must also include a "person", an
"enterprise" and a "pattern of racketeering activity", and such
elements must be pled separately in the complaint. R.E. Davis
Chemical Corporation v. Nalco Chemical Co., 757 F. Supp. 1499,
1507 (N.D.Ill. 1990). Dr. Wagner outlines the basics of the RICO
scheme and players in his response, but even reading this in
conjunction with his complaint, he has failed to (1) plead the
mail and wire fraud claims with the requisite specificity, or (2)
identify a distinct enterprise or "racketeering activity."*fn6
Bachman v. Bear Stearns & Co.,
178 F.3d 930, 932 (7th Cir. 1999) ("A firm and its employees, or
a parent and its subsidiaries, are not an enterprise separate
from the firm itself.") Therefore, what Dr. Wagner is really
seeking is to amend his complaint.
The defendants protest Dr. Wagner's inopportune timing, see
Car Carriers, Inc. v. Ford Motor Co., 745 F.2d 1101 (7th Cir.
1984) ("it is axiomatic that the complaint may not be amended by
the briefs in opposition to a motion to dismiss"), but do not
show that they would be prejudiced by such amendment. See
Doherty v. Davy Songer, Inc., 195 F.3d 919, 922, 927 (7th Cir.
1999) (leave may be denied due to delay, but the delay must
unduly prejudice the opposing party). Leave to amend "shall be
freely given when justice so requires," Fed.R.Civ.P. 15(a). Dr.
Wagner may amend his pleadings and attempt to reallege the mail
and wire fraud or other RICO predicate offenses.
Because Dr. Wagner has not alleged an antitrust injury, I grant
the defendants judgment on the pleadings on the antitrust claims
in Counts I — III. I dismiss without prejudice Mr. Wagner's
remaining state law claims for lack of subject matter
jurisdiction. Dr. Wagner's motion to amend his complaint is
granted. Any amended complaint shall be filed within twenty-one
days from the date of this order.