Federal Judge Takes Scalpel To $200 Million Wound Closure Antitrust Suit

Kansas Federal Judge Richard D. Rogers has taken a scalpel to claims of monopolization, predatory pricing and unjust enrichment in the sale of wound closure products – but given a clean bill of health to claims of tying, exclusive dealing and state-law restraint of trade – in Suture Express Inc. v. Cardinal Health Inc. et al., a $200 million antitrust suit.

Suture Express, a suture and endomechanical product distributor is suing in the U.S. District Court for the District of Kansas on claims that Cardinal Health Inc. and Owens & Minor Inc. engaged in anticompetitive conduct in the wound closure product market.  The case will go forward as a result of the court’s split ruling granting defendants’ motions to dismiss only in part.

The court found that Suture Express failed to allege sufficient facts to support its federal Sherman Act claims of per se antitrust violations, monopolization and conspiratorial agreement, and its Kansas state law claims of unjust enrichment.

Judge Rogers held that Suture Express’s allegations did not indicate that there was any real possibility the defendants had monopoly power in the wound closure product market, or even a dangerous probability of attaining it.  In finding that Suture Express failed to allege sufficient facts to show an anti-competitive conspiracy, the court stated that “the fact that a defendant could have chosen a different strategy does not produce an inference that the choice of a strategy similar to that of a fellow competitor is a sign of a conspiracy.”

By contrast, Judge Rogers found that Suture Express had adequately alleged its federal tying and exclusive dealing claims, as well as state-law tying, bundling and restraint of trade claims.  These claims allege that defendants required providers to buy at least 90% of their wound closure products from defendants or face higher prices across the board.