Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Medical providers seek Supreme Court’s view on decade-old waiver, (Nov 17, 2014)

By Greg Hammond, J.D.

A number of health care providers are seeking Supreme Court review of a decision by the U.S. Court of Appeals in Atlanta, which found that releases in nearly decade-old class action settlement agreements, precluded them from asserting federal antitrust claims based on conduct occurring years after the settlement agreements terminated (In re Managed Care Litigation, Dkt. 14-554).

In 2000, several physicians and medical associations filed a class action against a group of health care insurance companies, including WellPoint, Inc., alleging that the companies engaged in a conspiracy to underpay medical providers in violation of—in part—federal antitrust laws. WellPoint settled the claims in 2005, agreeing to pay $198 million to the class and to make changes to its business practices. In exchange, the class agreed to release all claims related to the allegations.

However, in 2009, three physicians and three medical associations, including the Medical Association of Georgia, the California Medical Association, and the Connecticut State Medical Society—who were members of the settlement class—joined a new class action against WellPoint, alleging underpayment for the provision of medical services. The district court eventually held the medical providers in contempt and imposed sanctions for their refusal to withdraw their similar antitrust claims in the subsequent action. The appellate court affirmed.

In their petition for certiorari, the medical providers ask: (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.

In support of their petition, the providers argue that the appellate court’s interpretation of the settlement agreement as a prospective wavier of antitrust claims violates the antitrust laws and public policy; the majority’s holding that the providers’ claims “could have been asserted” before the plaintiffs were injured conflicts with other Circuit Court decisions; and the case involves important federal issues for which nationwide uniformity is crucial.

A response to the petition is due December 15, 2014.

Attorneys: 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.

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

News: Antitrust