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Providers Say BCBS Can't Argue It's A Single Entity

Health care providers accusing Blue Cross Blue Shield organizations of thwarting competition by carving up the national market into service areas and refusing to compete against each other are asking an Alabama federal court to revisit the insurers' argument that it is a single entity.


In a motion for summary judgment filed Tuesday, health care providers argued BCBS is multiple entities working to manipulate the market. If granted, the judgment would wipe out one of BCBS' defenses and add leverage to their providers' arguments accusing it and the array of affiliated insurers of conspiring to divide the market among themselves and not compete with one another through a series of trademark licensing agreements and other arrangements.


"Potential competitors never act as a single entity when they agree to insulate themselves from competition by allocating territory or restricting output," the providers said. "The Blues, who resisted being called a single entity until this case was filed, are no exception."


The provider plaintiffs, who are still pursuing their track of the multidistrict litigation after Blue Cross Blue Shield subscribers settled their own claims last year for a $2.67 billion class payout, are trying to secure at least $15 billion after trebling for antitrust damages in the Alabama market alone.


BCBS has argued it is a single entity and therefore not subject to Section 1 of the Sherman Act. The court previously took up this issue in 2018, when it said there were still "genuine issues of material fact" on whether BCBS is a single entity, saying the providers need only prove that the insurance plans plotted to divvy up geographic markets to succeed on their claims.


The providers said that since that order, BCBS has submitted documents that prove it is not a single entity, such as a 2012 internal presentation and a 1993 meme about creating brand consistency across its system.


BCBS has previously said it "fits comfortably within" rulings relating to NFL licensing. The providers pointed to a Ninth Circuit decision stemming from the Raiders' decision to move from Oakland, California, to Los Angeles in 1982. In that case, the court found that the NFL was not acting as a "single entity" when it barred the Raiders from moving into another team's city.


The NFL appealed that case, but the U.S. Supreme Court refused to take it up. The high court would later take up the issue in its American Needle Inc. v. National Football League decision, which held the NFL teams are distinct economic actors.


That decision cited previous rulings, including the Raiders case, where courts determined the NFL isn't a single entity, the providers noted. "Because this case is pending in Alabama, where college football is king, the Blues might be forgiven for forgetting that the exact functions of the NFL that they claim to share — establishing exclusive territorial rights and restricting their ability to do business under different marks — have been held unlawful, and the NFL has been held not to be a single entity with respect to those functions," the providers said.


The providers are represented by Whatley Kallas LLP, Wood Law Firm LLC, Hayes Hunter PC, Podhurst Orseck PA, Wiggins Childs Pantazis Fisher Goldfarb LLP, U.W. Clemon LLC, Reich & Binstock LLP, White Arnold & Dowd PC, Eyster Key Tubb Roth Middleton & Adams LLP, Bonnett Fairbourn Friedman & Balint PC, The Law Offices of David A. Balto, Axelrod & Dean LLP, Bunch & James, Beasley Allen Crow Methvin Portis & Miles PC, The Frankowski Firm LLC, Glast Phillips & Murray PC, The Law Office of John C. Davis, Gray & White, Jinks Crow & Dickson PC, The Law Offices of Stephen M. Hansen, Penn & Seaborn LLC, Kozyak Tropin & Throckmorton PA, Strom Law Firm LLC, The Pittman Firm PA, Horn Aylward & Bandy LLC, Shelby Roden LLC, Cusimano Roberts & Mills LLC, Whitfield Bryson & Mason LLP, Wojtalewicz Law Firm Ltd., Bailey Glasser LLP, Archie Lamb & Associates LLC, Sears & Swanson PC, Lundberg Law PLC, Dillon & Findley PC, Simons & Associates Law PA and Heidman Law Firm.


The defendants are represented by Shearman & Sterling LLP, Bodman PLC, Campbell Partners LLC, Cravath Swaine & Moore LLP, Kirkland & Ellis LLP, Wallace Jordan Ratliff & Brandt LLC, Maynard Cooper & Gale PC, Hogan Lovells LLP, Hill Hill Carter Franco Cole & Black PC, Nelson Mullins Riley & Scarborough LLP, Balch & Bingham LLP, Kilpatrick Townsend & Stockton LLP, Redgrave LLP, Shamoun & Norman LLP, Axinn Veltrop & Harkrider LLP, Armbrecht Jackson LLP, Adams and Reese LLP, Brunini Grantham Grower & Hewes PLLC, Crowell & Moring LLP, Lightfoot Franklin & White LLC, Foley & Lardner LLP, Spotswood Sansom & Sansbury LLC, Wallace Jordan Ratliff & Brandt LLC, Phillips Lytle LLP, Weinberg Wheeler Hudgins Gunn & Dial, Riley & Jackson PC and in-house counsel.


The case is In re: Blue Cross Blue Shield Antitrust Litigation, case number 2:13-cv-20000, in the U.S. District Court for the Northern District of Alabama.