Several Blue Cross Blue Shield units, Arizona, Kansas, North Dakota, Wyoming and New York, have asked to be dismissed from four class actions in multidistrict litigation (MDL) accusing the insurer of anti-competitive behavior, saying that they have no significant ties to Alabama, where the litigation is centered. According to Defendants, the “Plaintiffs cannot allege such facts because moving Defendants meet none of the indicia of substantially transacting business in the Northern District of Alabama.” This most recent motion stated.
They do not solicit or advertise in the district. They have no employees or representatives who are located in the district. They do not have offices or own real property in the district. They do not exercise control over any subsidiary or affiliate who transacts business there. They do not offer insurance or other products in the district.
Even if all of this is true, the MDL court has already denied a motion to dismiss filed by these very same Defendants. In fact, the Defendants made these very same arguments.
The MDL was created in 2012, when nine antitrust actions in Alabama, North Carolina, and Tennessee were consolidated in the Northern District of Alabama. At the time of the 2012 order creating the MDL, the Blue Cross Blue Shield Association’s business model created 38 separate Blue plans operating in local areas nationwide under the company’s brand, providing health insurance to approximately 100 million subscribers. The lawsuits generally contend that under normal market conditions the companies would compete against one another, but have instead allocated among themselves regional health insurance markets in violation of the Sherman Antitrust Act.
This recently filed motion to dismiss is not the first time these same Defendants have sought to be dismissed from the case on personal jurisdiction grounds. In fact, Judge Proctor, who is overseeing the MDL, denied an earlier motion to dismiss on Oct. 30, 2015. The court’s earlier ruling commented that Plaintiffs were willing to stipulate that the defense was not waived and could be decided after the cases were remanded to their home courts, but that the Defendants declined to agree, instead choosing to push for dismissal.
In the October 2015 order, Judge Proctor also noted that because of the peculiar nature of the MDL proceeding, even should he determine that personal jurisdiction was lacking in some of the class actions as to the moving Defendants, each moving Defendant had filed an answer (instead of a motion to dismiss) in at least one of the cases. Specifically, Judge Proctor noted:
[e]ach of the Moving Defendants, by filing an Answer (rather than a Motion to Dismiss) in at least one of the cases conditionally transferred to this MDL, has conceded that they are properly participating in the MDL through at least one case.
Therefore, if the court granted the motions to dismiss, the Defendants would remain in the case and before the MDL court. In light of the desire to preserve judicial time and resources, rather than continue to brief and address an issue that would have no effect on the MDL proceeding, Judge Proctor denied the earlier motions to dismiss without prejudice and entered an order stating that the Defendants’ personal jurisdiction and venue defenses are “DEEMED PRESEREVED to be addressed by [the MDL] court immediately prior to remand, or by the respective transferor courts after remand.”
In light of the MDL court’s clear ruling in October of last year, we expect the MDL Court to deny the motions to dismiss. If you need more information, contact Rebecca Gilliland at 800-898-2034 or by email at Rebecca.Gilliland@beasleyallen.com.
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