Antitrust Law Daily Wrap Up, ANTITRUST—W.D. Pa.: Health care provider’s documents properly sealed in antitrust action, (Jan 8, 2014)

By Linda O’Brien, J.D., LL.M.

In an antitrust class action by purchasers of health insurance against a health care provider and health care insurer over an alleged conspiracy to reduce competition and increase health care costs in the Pittsburgh area, the health care provider was permitted to file under seal certain documents requested in discovery, the federal district court in Pittsburgh has decided. Third party intervener PG Publishing Co. (“The Post-Gazette”) unsuccessfully argued that the magistrate judge had applied the wrong standard for withholding the documents from public view (Royal Mile Co. v. UPMC, January 6, 2014, Conti, J.).

Royal Mile Company, Inc. and Cole’s Wexford Hotel, Inc., purchasers of health insurance, filed a state antitrust class action against a Pittsburgh-area health care provider and a health care insurance company over their alleged conspiracy to exclude competition and inflate health care costs for purchasers. The University of Pittsburgh Medical Center (UPMC) is the largest health care provider in the Pittsburgh metropolitan area, while Highmark, Inc., is the largest health care insurer in the region. The defendants’ motion to dismiss the complaint was granted on the basis that the antitrust claims were barred by the “filed rate” doctrine. The plaintiffs were granted leave to file amended pleadings. Subsequently, the plaintiffs moved to compel discovery by UPMC of certain documents, which was referred to a special master for recommendation.

UPMC argued that the requested documents contained highly confidential information, including sensitive business and strategic communications that, if disclosed, would cause serious injury to UPMC. UPMC also contended that the documents be filed under seal and that the need for sealing outweighed the public’s presumptive right to access.

Federal Rule of Civil Procedure 26(c) sets forth the “good cause” standard to determine whether discovery materials should be filed under seal. An assessment of good cause considers certain factors, including the balancing of a party’s private interest in sealing the documents against the public’s interest in accessing the material at issue.

The court, in adopting the special master’s report as its opinion, found that the special master did not err in applying the good cause standard to the documents in issue. In rejecting the argument that “the special master failed to balance the public’s right of access to a Sherman Act antitrust proceeding regarding healthcare in the region against UPMC’s alleged need for secrecy,” the court noted that UPMC demonstrated good cause to overcome the public’s right of access. The special master determined that UPMC presented sufficient evidence to show disclosure of the information could injure its business interests and competitive standing, and that the requested documents referred to business strategies that were presently in use. The special master also correctly noted that UPMC’s participation in the health care industry did not mean that the information itself was of such importance to public health or safety that any UPMC interest in privacy was irrelevant. Accordingly, UPMC was permitted to seal material that concerned business strategies and competitive tactics that remained relevant and would injure UPMC by their release.

The case is No. 10-1609.

Attorneys: Andrew M. Stone (Stone Law Firm, LLC) and Kathleen S. Kiernan (Boies, Schiller & Flexner LLP) for Royal Mile Company, Inc. and Coles Wexford Hotel, Inc. Keith E. Whitson (Schnader, Harrison, Segal & Lewis) for University of Pittsburgh Medical Center. Alexander W. Saksen (Gordon & Rees) for Highmark, Inc.

Companies: Royal Mile Company, Inc.; Coles Wexford Hotel, Inc.; University of Pittsburgh Medical Center; Highmark, Inc.

Cases: Antitrust PennsylvaniaNews