Five Blue Cross and Blue Shield plans asked an Alabama federal court to certify an interlocutory appeal to the United States Eleventh Circuit Court of Appeals to present three questions to the Court. First, the five Defendants want the Eleventh Circuit to determine whether a court should look into the amount of business a company transacts in a district to see whether there is jurisdiction under section 12 of the Clayton Act. Second, the five Defendants would like for the Eleventh Circuit to determine whether the Plaintiffs must satisfy due process, which includes “minimum contacts requirements of purposeful availment and a substantial causal relationship between the alleged contacts and Plaintiffs’ cause of action” in order to establish personal jurisdiction for a conspiracy theory. Finally, the five Defendant plans are asking whether minimum contacts have been established in this case.
This move follows a Dec. 31, 2016, ruling by Alabama U.S. District Judge R. David Proctor rejecting motions to dismiss filed by nine of the 38 Blues accused of a decades-old conspiracy to avoid competing in certain areas and to fix prices paid to doctors and hospitals. In their motion to dismiss, the nine Blues argued that they have limited operations in Alabama. Specifically, the Defendants argued that their sales in northern Alabama represented a small percentage of their total sales and, thus, were insufficient to establish minimum contacts with the jurisdiction. Judge Proctor, however, disagreed. He concluded that the insurers had in fact been conducting “substantial business in this district” and that any conclusion to the contrary “favors large corporations over small corporations because, in marginal cases, a large corporation could make an identical amount of sales as a small business in a particular district but avoid jurisdiction under Section 12 [of the Clayton Act] based on its larger pool of total sales.”
This 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 multidistrict litigation (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, the judge 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.”
The MDL was created in 2012, when nine antitrust actions in Alabama, North Carolina and Tennessee were consolidated in Alabama federal court. Subscribers of Blue Cross of Oklahoma then sued the company in their own putative class action in February, making similar antitrust claims over the insurer’s alleged efforts to “establish and maintain monopoly power” in health insurance throughout the state. 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.
The Court heard arguments on their request to certify an interlocutory appeal to the United States Eleventh Circuit Court of Appeals on January 9. If you need more information, contact Rebecca Gilliland, Jessi Meeks, or Claire Burns, lawyers in our Consumer Fraud & Commercial Litigation Section, at 800-898-2034 or by email at Rebecca.Gilliland@beasleyallen.com, Jessi.Meeks@beasleyallen.com, or Claire.Burns@beasleyallen.com.
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