The 11th U.S. Circuit Court of Appeals has ruled that the antitrust multidistrict litigation (MDL) against Blue Cross Blue Shield insurers can proceed. The court upheld a federal judge’s ruling from April, which rejected the defendants’ argument that pro-competitive effects of their scheme would outweigh any harm. The Eleventh Circuit held that the defendants’ behavior will be analyzed based on the per se legal standard, which, if proven, means the defendants’ actions alone were illegal and violated the Sherman Antitrust Act.
“Judge Proctor’s ruling on the per se standard applying in this case was absolutely correct when he issued his opinion last spring and the Eleventh Circuit just affirmed his ruling,” said W. Daniel “Dee” Miles, III, who is head of Beasley Allen’s Consumer Fraud Section. “We now proceed to the class certification stage of the case.”
The case involves 36 Blue Cross plans and at the heart of the case is whether an agreement among the different plans not to compete in various markets based on trademark licensing and other business activities is legal. Some of the plans have large overlapping coverage areas, including California, Idaho, New York, Pennsylvania, Washington and Oregon. Both the lower federal court and the appellate court determined that the combination of the agreement not to compete and the size of the territories, alone will be enough to determine if the insurers broke the law.
The case was divided into two tracts, one for providers and one for subscribers. In addition to Miles, Beasley Allen lawyers Archie Grubb, Leslie Pescia and Chris Baldwin were chosen to develop the provider side of the case for trial.
Medical providers claim that Blue Cross is using its size and market power to drive out the competition and keep doctor and other medical organizations reimbursements low. Subscribers claim the arrangement could drive up premiums.
It is the largest antitrust case in U.S. history and could go to trial next summer if the U.S. District Judge David Proctor certifies the class.