A federal jury in Denver on Friday acquitted one of the nation’s largest kidney-dialysis providers of criminal charges that it plotted with other healthcare companies to suppress competition for senior-level employees through non-poaching agreements.
DaVita Inc. of Denver and a former chief executive, Kent Thiry, were found not guilty on all three counts of a 2021 indictment alleging conspiracy in restraint of trade, as defined under the 132-year-old Sherman Antitrust Act. Each count carried a potential fine of $100 million for the company and 10 years in prison for Thiry.
The verdict was the second time in as many days that a federal jury rejected novel efforts by the government to use criminal statutes to punish what it claimed were anticompetitive business practices. A day earlier, in Sherman, Texas, jurors acquitted the former owner of a Dallas-area home health-staffing company of colluding with competitors to hold down the wages paid to physical therapists and their assistants. The Sherman case was believed to be the first in which the Justice Department sought a criminal conviction, and not just administrative remedies, for alleged wage-fixing.
Thiry, widely credited with building DaVita into a giant in the dialysis business, was represented in the two-week Denver trial by Thomas M. Melsheimer, managing partner of Winston & Strawn’s Dallas office.
Although evidence showed that Thiry engineered non-poaching deals with three other companies, all run by former DaVita executives, Melsheimer said in an interview, the government failed to convince jurors of a key allegation: that the agreements ended “meaningful competition” in the marketplace.
“We did not dispute that non-poaching agreements, under certain conditions, had been made,” he said. “Nor did we argue that what Kent did was a good idea. It was not a good idea.
“But behaving in a way that was obnoxious or overly aggressive was not a crime. The jury got that.”
Thiry stepped down as CEO in 2019.
In its two days’ deliberations, the jury sent only one question to U.S. District Senior Judge R. Brooke Jackson, who presided over the two-week trial: “Can we have a definition of ‘meaningful competition’?”
The judge, after conferring with both sides, responded: “‘Meaningful competition’ essentially is another way of saying ‘significant competition’ or ‘competition of consequence.'”
The Denver Post reported that after dismissing the jury, the judge said: “Congratulations to the defendants, condolences to the government.”
In addition to Melsheimer, Thiry was represented by Scott C. Thomas and Alex C. Wolens from Winston’s Dallas office, as well as attorneys from the Denver office of King & Spalding, the San Diego office of Fish & Richardson, and the Chicago and Washington, D.C., offices of McDermott Will & Emery.
DaVita was represented by, among others, John F. Walsh III from WilmerHale in Denver; Seth P. Waxman from WilmerHale in Washington; John C. Dodds from Morgan Lewis in Philadelphia; and J. Clayton Everett Jr. from Morgan Lewis in Washington.
The case was prosecuted by the Justice Department’s Antitrust Division in Washington.
A Justice Department statement, quoted in Bloomberg Law, said: “While we are disappointed in the outcome, we respect the jury’s decision and remain committed to enforcing the antitrust laws in the labor markets.”
DaVita, No. 271 on the Fortune 500 list, provides outpatient kidney dialysis to more than 200,000 patients in the United States and, on a lesser scale, in 10 other countries. At the time the list was published, Warren Buffett’s Berkshire Hathaway was DaVita’s largest shareholder, with a 33 percent stake.
Most of the company’s revenue comes from Medicare and other government health-insurance programs.