Antitrust Law Daily Wrap Up, ANTITRUST NEWS: American Medical Association urges High Court to consider class action release, (Dec 10, 2014)

By Jeffrey May, J.D.

The U.S. Supreme Court should review a decision by the U.S. Court of Appeals in Atlanta holding that releases in nearly decade-old class action settlement agreements precluded physicians from asserting federal antitrust claims against insurers based on conduct occurring years after the settlement agreements terminated, the American Medical Association (AMA) contended in a friend-of-the-court brief filed on December 8. The petition for certiorari at issue was filed by the health care providers on November 13. The providers suggested that the “federal statutory rights of most of the nation's physicians to protect themselves against anticompetitive conduct by some of the nation's largest health insurers hang[ed] in the balance of this petition” (In re Managed Care Litigation, Dkt. 14-554).

In 2009, the AMA, other medical associations, and individual physicians filed an action against health insurer WellPoint, Inc. and others for conspiring to reduce payments to physicians for the provision of medical services in violation of antitrust and other laws. In response, WellPoint argued that the claims were barred by a prior class action release. The district court eventually held the medical providers in contempt for violating the terms of the prior settlement agreement. It imposed sanctions for violating an injunction in light of the providers’ refusal to withdraw their similar antitrust claims in the subsequent action. A divided appellate court affirmed on the antitrust issue.

In their petition for certiorari, the medical providers asked: (1) whether a settlement agreement in a class action waives all class members’ rights to pursue statutory remedies for the defendant’s future violations of the federal antitrust laws, or whether such a waiver is void because it violates the antitrust laws or public policy; and (2) whether a federal antitrust cause of action can be asserted before the occurrence of the acts and injuries from which the cause of action arises, or does the cause of action accrue when the plaintiff is injured. Among other things, the providers argued that the appellate court’s interpretation of the settlement agreement as a prospective wavier of antitrust claims violated the antitrust laws and public policy.

Now, the AMA is calling on the High Court to take up the case. It contends that the issue of whether a release in a national class action can immunize future antitrust violations is exceptionally important. Moreover, the group suggests that the time for review is “now or never,” since the threat of contempt sanctions is likely to coerce submission to similar release-based immunity claims in the future so that the practice will proliferate beyond the reach of appellate court review.

The AMA noted that, but for the threat of contempt sanctions, it would have been a petitioner in the case. The AMA relinquished antitrust claims in the face of the same injunction that the petitioners had to violate in order to obtain appellate review.

Attorneys: David A. Reiser (Zuckerman Spaeder LLP) for American Medical Assn. Robert J. Axelrod (Axelrod & Dean LLP), Joe R. Whatley, Jr. (Whatley Kallas LLP), Aaron S. Podhurst (Podhurst Orseck, P.A.), William C. Wright, Raymond P. Boucher (Khorrami Boucher, LLP), and Kenneth Canfield (Doffermyre Shields Canfield & Knowles, LLC) for Petitioners. Catherine E. Stetson (Hogan Lovells US LLP) for WellPoint, Inc.

Companies: American Medical Assn.; WellPoint, Inc.; Medical Assn. of Georgia; California Medical Assn.; Connecticut State Medical Society

News: Antitrust