Superseded-Pleading Admissions May Establish LLC Citizenship for Diversity Jurisdiction; Conclusory Market Definitions and Competitor Harm Do Not State Sherman Act Claims

I. Introduction

In Rx Solutions v. Caremark (5th Cir. Jan. 14, 2026), Rx Solutions, Incorporated (“Rx Solutions”), a Mississippi retail pharmacy, sued Caremark, L.L.C. (“Caremark”), a pharmacy benefit manager (“PBM”), and CVS Pharmacy, Incorporated (“CVS”), alleging that Caremark’s denial of Rx Solutions’s application to join Caremark’s PBM pharmacy network was the product of anticompetitive conduct. Rx Solutions asserted two federal claims under the Sherman Act (15 U.S.C. §§ 1, 2) and three Mississippi claims: (1) an “any willing provider” claim under Miss. Code Ann. § 83-9-6, (2) a Mississippi antitrust claim under Miss. Code Ann. § 75-21-3, and (3) tortious interference with business relations.

The district court dismissed the federal antitrust claims under Rule 12(b)(6), then declined supplemental jurisdiction over the remaining state claims on the view that diversity jurisdiction was not adequately pleaded—principally because Rx Solutions did not allege the citizenship of Caremark’s LLC members. The Fifth Circuit largely agreed on the antitrust merits, but corrected the jurisdictional analysis: diversity existed based on Caremark and CVS’s earlier admissions regarding Caremark’s membership and citizenship.

The decision is notable for two reasons: (1) it reaffirms exacting pleading requirements for antitrust market definition and antitrust injury at the motion-to-dismiss stage, and (2) it clarifies that admissions in superseded pleadings may be considered as evidentiary admissions to establish LLC citizenship for diversity purposes, even where an amended complaint omits the necessary member-citizenship allegations.

II. Summary of the Opinion

Federal antitrust claims (Sherman Act §§ 1 and 2): affirmed dismissal because Rx Solutions failed to plead (a) a legally sufficient relevant market (product and geographic) and (b) antitrust injury (harm to competition/consumers rather than harm to a competitor).
Diversity jurisdiction: reversed the district court’s “no diversity” finding. Although Rx Solutions failed to plead Caremark’s member citizenship in its amended complaint, the record contained Caremark and CVS’s admission in their answer to the original complaint establishing Caremark’s membership chain and Rhode Island citizenship.
State claims: the Fifth Circuit affirmed dismissal of the Mississippi antitrust claim (Miss. Code Ann. § 75-21-3) because such claims are analyzed identically to federal antitrust claims. It remanded the “any willing provider” claim (Miss. Code Ann. § 83-9-6) and tortious interference claim for the district court to address in the first instance under diversity jurisdiction.

III. Analysis

A. Precedents Cited and How They Shaped the Decision

1. Pleading standards under Rule 12(b)(6)

The court framed its review through familiar plausibility pleading doctrine:

Ferguson v. Bank of New York Mellon Corp. (quoting Stokes v. Gann) supplied the de novo standard and the rule that well-pleaded facts are taken as true.
Lovelace v. Software Spectrum, Inc. reinforced that courts typically evaluate a motion to dismiss by reference to the complaint and attached/incorporated documents.
Ashcroft v. Iqbal and Bell Atl. Corp. v. Twombly provided the “plausible on its face” requirement that is especially salient in antitrust cases (where conclusory allegations are common).
Hodge v. Engleman was invoked for the proposition that courts do not accept conclusory allegations, unwarranted inferences, or legal conclusions as true.

These authorities collectively supported dismissing antitrust claims that merely label a market or assert harm without supplying factual content about substitutes, competitive conditions, or consumer harm.

2. Relevant market definition (product and geographic)

The court’s market-definition analysis hewed closely to Fifth Circuit precedent requiring plaintiffs to plead facts supporting both a product market and a geographic market:

Wampler v. Sw. Bell Telephone Co. (Sherman Act § 1) and Eastman Kodak Co. v. Image Tech. Servs., Inc. (Sherman Act § 2) anchored the proposition that both conspiracy-to-restrain-trade and monopoly-power allegations are assessed “in the relevant market,” making market definition essential.
Shah v. VHS San Antonio Partners, L.L.C. supplied the two-component framework (product and geographic market) and the requirement that plaintiffs “define the relevant market.”
Apani Sw., Inc. v. Coca-Cola Enters., Inc. drove the operative tests: (i) product market requires allegations regarding “interchangeable in use” and “cross-elasticity of demand” (quoting C.E. Servs., Inc. v. Control Data Corp.); and (ii) geographic market focuses on “effective competition” (quoting Jim Walter Corp. v. F.T.C.), must match “commercial realities,” and be “economically significant,” drawing on Brown Shoe Co. v. United States and the caution against mere “metes and bounds” (quoting Tampa Elec. Co. v. Nashville Coal Co.).
New Orleans Ass'n of Cemetery Tour Guides & Cos. v. New Orleans Archdiocesan Cemeteries was used twice: first, to confirm a district court may dismiss Sherman Act claims for failure to define the relevant market; and second, to emphasize that a cognizable product market must include all “reasonably interchangeable” substitutes and is insufficient if it “fails to identify reasonable substitutes” (quoting Shah).

Applying these precedents, the court treated Rx Solutions’s market labels (“the prescription medication market” and “the State of Mississippi, including but not limited to Greene County… and Stone County”) as conclusory because the complaint alleged no facts about substitutes, switching behavior, PBM/network alternatives, consumer choice, supply channels, or competitive constraints.

3. Antitrust injury and antitrust standing

The court affirmed dismissal on an additional, independent ground: failure to plead antitrust injury.

Sanger Ins. Agency v. HUB Int'l, Ltd. and Pulse Network, L.L.C. v. Visa, Inc. were cited for the principle that antitrust standing imposes “threshold requirements” beyond Article III standing.
Doctor's Hosp. of Jefferson, Inc. v. Se. Med. All., Inc. and Bell v. Dow Chem. Co. established that antitrust injury is a component of antitrust standing.
Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc. supplied the canonical definition: injury must be “of the type the antitrust laws were intended to prevent” and must “flow[] from that which makes defendants’ acts unlawful,” paired with its reminder (quoting Brown Shoe Co. v. United States) that antitrust law protects competition, not competitors.
Anago, Inc. v. Technol Med. Prods., Inc. was used to illustrate “typical” antitrust injuries (increased prices, decreased output) and the Fifth Circuit’s narrow approach excluding mere “threat of decreased competition.”
Pulse Network, L.L.C. v. Visa, Inc. was again used to underscore that losing customers to a rival (or being disadvantaged as a competitor) is not, without more, antitrust injury.

The opinion also clarified the procedural status of antitrust standing, citing McCormack v. Nat'l Collegiate Athletic Ass'n (and, as comparative support, Biocad JSC v. F. Hoffmann-La Roche, Ethypharm S.A. France v. Abbott Lab'ys, and In re Lorazepam & Clorazepate Antitrust Litig.) to explain that antitrust standing is not jurisdictional in the Article III sense—yet it remains a merits requirement that can support dismissal and affirmance.

4. Affirmance on alternative grounds

The panel relied on Lauren C. ex rel. Tracey K. v. Lewisville Indep. Sch. Dist. to affirm on an independent basis supported by the record—here, antitrust injury—despite the district court’s not reaching that issue.

5. Diversity jurisdiction, LLC citizenship, and the evidentiary use of superseded pleadings

Harvey v. Grey Wolf Drilling Co. supplied the controlling rule that an LLC’s citizenship is that of “all of its members,” not its state of organization or principal place of business.
Howery v. Allstate Ins. Co. reinforced that the party invoking diversity must “distinctly and affirmatively allege” citizenship.
The panel nevertheless found diversity established by Caremark and CVS’s prior pleading admission about Caremark’s sole member and citizenship chain, treating it as an evidentiary admission consistent with White v. ARCO/Polymers, Inc. (superseded pleadings lose binding force but may retain evidentiary value).
The defendants’ “superseding complaint” argument was addressed with the general principle from Wright & Miller, Federal Practice and Procedure § 1476, but the panel held that supersession does not make prior admissions invisible for evidentiary purposes.

This jurisdictional portion is the opinion’s most practically “new” takeaway: even when a plaintiff’s amended complaint fails to plead LLC member citizenship, the district court should consider record admissions—especially those made by the defendant LLC itself—before concluding diversity is absent.

6. Mississippi antitrust claim treated as coextensive with federal law

For the Miss. Code Ann. § 75-21-3 claim, the court applied Fifth Circuit authority holding Mississippi antitrust claims “analytically identical” to federal antitrust claims: Walker v. U-Haul Co. of Miss. and Tunica Web Advert. v. Tunica Casino Operators Ass'n, Inc.. That equivalence allowed the panel to affirm dismissal of the state antitrust count for the same defects (no relevant market; no antitrust injury).

B. Legal Reasoning

1. Market definition is not a label; it is a fact-supported economic boundary

The court treated the “relevant market” requirement as a gatekeeping function that prevents antitrust litigation from proceeding on abstract accusations of “monopoly” or “collusion.” Rx Solutions’s product market—“the prescription medication market”—was deemed legally insufficient because the complaint did not allege how that market is economically distinct, what products are excluded and why, or whether consumers and payors view alternatives as substitutes. Likewise, “Mississippi (including but not limited to Greene and Stone Counties)” was deemed an unsupported geographic market because the complaint did not allege why competition is meaningfully bounded there (e.g., patient travel patterns, PBM contracting realities, pharmacy access constraints, regulatory barriers, or transportation costs).

The reasoning reflects a consistent Fifth Circuit approach: plausibility requires facts that connect the asserted boundary to “commercial realities,” not merely the plaintiff’s location or the defendants’ footprint.

2. Antitrust injury requires consumer-centered harm, not competitor-centered harm

Even if the market had been adequately pleaded, the court held the complaint still failed because it did not describe harm to competition—such as higher prices, reduced output, or diminished quality/innovation. Rx Solutions alleged essentially that exclusion from the network made it “harder to compete” and could “force competitors… out of business,” but it did not plead facts showing consumers paid more, had fewer viable options in practice (as opposed to a conclusory statement), or suffered reduced access/quality as a result of the alleged conduct.

The panel’s emphasis on this distinction underscores a recurring antitrust theme: exclusionary conduct can be actionable, but the pleading must connect exclusion to marketwide consumer harm, not solely to the plaintiff’s lost sales.

3. Diversity jurisdiction can be established from the record despite a pleading omission

The court agreed that Rx Solutions’s amended complaint failed to allege Caremark LLC’s member citizenship as required by Harvey v. Grey Wolf Drilling Co.. But rather than treat that omission as dispositive, the panel looked to the record and found a clear admission by Caremark and CVS that Caremark’s sole member is Caremark Rx, LLC, whose sole member is CVS—making Caremark a Rhode Island citizen for diversity purposes because CVS is incorporated and has its principal place of business in Rhode Island.

The key reasoning move is evidentiary: an admission in an answer to a superseded complaint is not binding, but it is usable evidence. The district court therefore erred by stopping at the amended complaint and not accounting for the record admission establishing complete diversity (Mississippi plaintiff vs. Rhode Island/California-related defendants, with Caremark’s citizenship ultimately Rhode Island).

C. Impact

1. Antitrust pleading: heightened practical demands at the motion-to-dismiss stage

The opinion reinforces that, in the Fifth Circuit, plaintiffs challenging PBM/network conduct must plead: (i) a coherent market definition grounded in interchangeability and substitutes (product market) and commercial realities (geographic market), and (ii) antitrust injury—facts plausibly showing consumer harm, not merely exclusion of a competitor.

Practically, this encourages antitrust plaintiffs to plead specific market facts early: how PBM networks function as contracting platforms, what alternative networks exist, what portion of insured lives or prescriptions are affected, how pharmacies or consumers can switch, and whether denial of network participation changes prices or access.

2. Jurisdictional practice: record admissions can rescue diversity (and prevent unnecessary remands/dismissals)

The diversity holding is a procedural corrective with real consequences for litigants: when LLC citizenship is imperfectly pleaded, courts should examine the record for admissions or other evidence establishing member citizenship. Defendants’ own admissions about their membership structure can be especially probative. This reduces the risk that cases are dismissed (or shunted to state court) solely because of curable technical pleading defects, where the record already demonstrates complete diversity.

3. State-law claims: channeling non-antitrust theories back to the district court

By affirming dismissal of the Mississippi antitrust claim as coextensive with federal standards, the opinion narrows Rx Solutions’s path to relief to non-antitrust theories: Mississippi’s “any willing provider” statute and tortious interference. The remand signals that PBM-pharmacy disputes may more often turn on state regulatory and tort doctrines when federal antitrust elements (market and injury) cannot be plausibly alleged.

IV. Complex Concepts Simplified

PBM network: A PBM manages prescription drug benefits for insurers/employers and creates networks of pharmacies that can dispense drugs at negotiated reimbursement rates. If a pharmacy is “out of network,” patients may lose favorable coverage terms.
Relevant product market: The group of products/services that customers view as realistic substitutes. Courts ask whether products are “reasonably interchangeable” and whether demand shifts when relative prices change (“cross-elasticity of demand”).
Relevant geographic market: The area where buyers can “practicably turn” for alternatives and where competition actually occurs, reflecting real-world constraints (regulation, travel, distribution, contracting practices).
Antitrust injury: Harm to the competitive process (often reflected in higher prices, reduced output, lower quality, or reduced innovation). Harm only to a single competitor (lost sales because it cannot access a network) is not enough without a plausible link to consumer harm.
Diversity jurisdiction: Federal jurisdiction when parties are citizens of different states and the amount in controversy is met. For an LLC, citizenship is determined by each member’s citizenship (not the LLC’s principal place of business).
Supplemental jurisdiction: A federal court’s discretion to hear related state claims when it has an independent basis for federal jurisdiction. Here, once the federal antitrust claims were dismissed, diversity supplied an independent basis to keep state claims in federal court.
“Any willing provider” law (Miss. Code Ann. § 83-9-6): Generally aims to prevent certain health benefit arrangements from excluding providers willing to meet plan terms; the remand indicates uncertainty about whether and how it applies to PBMs and their networks.

V. Conclusion

Rx Solutions v. Caremark delivers two core lessons. First, Sherman Act claims require more than accusations of collusion or exclusion: plaintiffs must plead a fact-grounded relevant market (product and geography) and must plausibly allege antitrust injury—consumer harm, not simply competitor disadvantage. Second, the court clarified that diversity jurisdiction may be established from record admissions about LLC membership and citizenship, even when an amended complaint fails to plead those details. The result both tightens substantive antitrust pleading discipline and promotes a pragmatic jurisdictional inquiry that prevents technical pleading omissions from obscuring an otherwise clear basis for federal diversity jurisdiction.