     Case: 19-20264      Document: 00515355595         Page: 1    Date Filed: 03/23/2020




           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT    United States Court of Appeals
                                                      Fifth Circuit

                                                                                 FILED
                                                                             March 23, 2020
                                      No. 19-20264
                                                                             Lyle W. Cayce
                                                                                  Clerk
CEDRA PHARMACY HOUSTON, L.L.C.; JAMMZ CHEMISTS, L.L.C.;
CEDRA PHARMACY LOS ANGELES, L.L.C.,

               Plaintiffs - Appellants

v.

UNITEDHEALTH GROUP, INCORPORATED; OPTUMRX,
INCORPORATED; UNITED HEALTHCARE SERVICES, INCORPORATED;
CATAMARAN CORPORATION; CATAMARAN PBM OF ILLINOIS,
INCORPORATED; CATAMARAN, L.L.C.; BRIOVARX OF MAINE,
INCORPORATED; BRIOVARX, L.L.C.; SALVEO SPECIALTY PHARMACY,
INCORPORATED,

               Defendants - Appellees




                   Appeal from the United States District Court
                        for the Southern District of Texas
                             USDC No. 4:17-CV-3800


Before HIGGINBOTHAM, STEWART, and ENGELHARDT, Circuit Judges.
PER CURIAM:*
       Three pharmacies—Cedra Pharmacy Houston, Jammz Chemists, and
Cedra Pharmacy Los Angeles (“Cedra LA”)—sued UnitedHealth, OptumRx


       * Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
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                                     No. 19-20264
and several related entities for alleged violations of the RICO Act, the Sherman
Act, and California and Texas common law. Their claims arise from (1) the
merger of UnitedHealth with OptumRx and Catamaran, two companies
owning and operating large pharmacy networks; (2) OptumRx and Catamaran
allegedly subjecting Plaintiffs to abusive audits; and (3) OptumRx excluding
Plaintiffs from its pharmacy network. Defendants moved to dismiss the
complaint under Federal Rule of Civil Procedure 12(b)(6). The magistrate
judge recommended granting the Defendants’ motion to dismiss, and the
district court adopted that recommendation over Plaintiffs’ objections.
       Plaintiffs appeal the dismissal of several claims: (1) RICO claims against
UnitedHealth and OptumRx under 18 U.S.C. § 1962(c)–(d); (2) antitrust claims
against all Defendants under § 1 and § 2 of the Sherman Act; (3) an unfair
competition claim against all Defendants under Texas common law; (4) a claim
for tortious interference with prospective business relationships brought by
Cedra Houston against all Defendants under Texas common law; and (5) Cedra
LA’s claim against all Defendants for violation of the right to fair procedure
recognized by California common law. We review de novo the district court’s
dismissal for failure to state a claim. 1
       After a review of the briefs and the record and for essentially the reasons
stated by the magistrate judge and accepted by the district court judge, we
affirm the district court’s dismissal of Plaintiffs’ RICO claims, antitrust claims,
and Texas common-law claim for unfair competition. We also affirm the
dismissal of Plaintiffs’ remaining two claims, albeit on different grounds from




       1True v. Robles, 571 F.3d 412, 417 (5th Cir. 2009) (quoting Stokes v. Gann, 498 F.3d
483, 484 (5th Cir. 2007)) (internal quotation marks omitted).
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                                       No. 19-20264
the district court. Accordingly, we express no opinion on the merits of the
district court’s analysis of these two claims. 2
       To state a claim for tortious interference with prospective business
relations under Texas law, a plaintiff must allege, among other things, that
“the defendant’s conduct was independently tortious or unlawful.” In Wal-Mart
Stores, Inc. v. Sturges, the Texas Supreme Court clarified that a plaintiff need
not allege an independent tort, but only conduct that “would be actionable
under a recognized tort.” 3 Here, Cedra Houston has not alleged a viable
independent tort or actionable conduct. At most, it has alleged “[c]onduct that
is merely ‘sharp’ or unfair” and therefore “cannot be the basis for an action for
tortious interference with prospective relations.” 4 The claim fails. 5
       Cedra LA asserts a claim against OptumRx for violating the pharmacy’s
right to fair procedure under California common law. Cedra LA alleges that
OptumRx delayed action on, and effectively denied, its application for
admission to OptumRx’s network. Where California’s common law right to fair
procedure applies, it requires private organizations to make decisions that are
“substantively rational” and “procedurally fair.” 6 This right primarily “protects
an individual from arbitrary exclusion or expulsion from membership in [1] a
‘private entity affecting the public interest’ [2] where the exclusion or expulsion
has substantial adverse economic ramifications” for that individual. 7 The



       2 See Terra Res., Inc. v. Lake Charles Dredging & Towing Inc., 695 F.2d 828, 832 n.9
(5th Cir. 1983).
       3 52 S.W.3d 711, 726 (Tex. 2001).
       4 Id.
       5 Plaintiffs also assert that Defendants violated Texas’s Any-Willing-Provider-Law

and thus engaged in tortious conduct. See TEX. INS. CODE ANN. art. 21.52B. We do not reach
this argument because Plaintiffs raised it for the first time in their reply brief. Tradewinds
Envtl. Restoration, Inc. v. St. Tammany Park, LLC, 578 F.3d 255, 260 (5th Cir. 2009).
       6 Potvin v. Metro. Life Ins. Co., 997 P.2d 1153, 1156–57 (Cal. 2000).
       7 Kim v. S. Sierra Council Boy Scouts of Am., 11 Cal. Rptr. 3d 911, 913 (Cal. Ct. App.

2004) (quoting Potvin, 997 P.2d at 1159).
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ramifications are “substantial” only if the private organization is a gatekeeper,
wielding so much power that it can “‘significantly impair[] the ability of an
ordinary, competent’ worker to practice the trade ‘in a particular geographic
area . . . .’” 8 Cedra LA alleges that OptumRx has a 22% market share
nationwide, but makes no factual allegations about OptumRx’s power in a
“particular geographic area,” such as Los Angeles. 9 As a result, Cedra LA fails
to allege a plausible fair process claim.
      For these reasons, we affirm the judgment of the district court.




      8  Capitol W. Appraisals LLC v. Countrywide Fin. Corp., 467 F. App’x 738, 739–40 (9th
Cir. 2012) (per curiam) (unpublished) (quoting Potvin, 997 P.2d at 1160).
       9 Potvin, 997 P.2d at 1160.

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