American Chiropractic Ass'n v. Trigon Healthcare

• Citation: 151 F.Supp.2d 723
• Decision Date: 19 July 2001
• Docket Number: No. 1:00CV00113.,1:00CV00113.
• Parties: AMERICAN CHIROPRACTIC ASSOCIATION, INC., et al., Plaintiffs, v. TRIGON HEALTHCARE, INC., et al., Defendants.
• Court: U.S. District Court — Western District of Virginia

151 F.Supp.2d 723

AMERICAN CHIROPRACTIC ASSOCIATION, INC., et al., Plaintiffs, v. TRIGON HEALTHCARE, INC., et al., Defendants.

No. 1:00CV00113.

United States District Court, W.D. Virginia. Abingdon Division.

July 19, 2001.

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George P. McAndrews, Steven J. Hampton and Sharon A. Hwang, McAndrews, Held & Malloy, Ltd., Chicago, IL, William G. Shields, William G. Shields & Assoc., Richmond, VA, for Plaintiffs.

Howard Feller, McGuireWoods LLP, Richmond, VA, for Defendants.

OPINION AND ORDER

JONES, District Judge.

American Chiropractic Association, Inc. ("ACA"), Virginia Chiropractic Association, Inc. ("VCA"), and individual doctors and patients of chiropractic medicine (collectively "the plaintiffs"),¹ filed suit in this court against Trigon Healthcare, Inc., Trigon Insurance Company, Trigon Administrators, Inc., Mid-South Insurance Company, and Trigon Health and Life Insurance Company (collectively "Trigon"), alleging numerous violations of federal and state law.² The defendants have filed a motion to dismiss each of those counts on various grounds. Subject matter jurisdiction is asserted pursuant to 15 U.S.C.A. §§ 15, 26 (West 1997), 18 U.S.C.A. § 1964(a) (West 2000), and 28 U.S.C.A. §§ 1331, 1367(a) (West 1993).

The parties have briefed the issues, oral argument was presented, and the motion to dismiss is now ripe for decision.

I

The plaintiffs claim that Trigon has failed to cover, through its health insurance policies, services provided by doctors of chiropractic due to anti chiropractic bias which is alleged to have existed for decades. (Compl.¶ 48.) In support of this argument, the plaintiffs emphasize a $500 coverage limitation placed by Trigon on "spinal manipulations and other manual medical interventions."³ (Compl.¶ 119.) According to the plaintiffs, this discriminatory practice has served to deny patients access to this form of medical treatment. (Compl.¶ 2.)

The plaintiffs allege in their complaint that Trigon conspired to restrain interstate trade in violation of 15 U.S.C.A. § 1 (West 1997) (count one), attempted to monopolize the market for treatment of neuromuskuloskeletal conditions in violation of 15 U.S.C.A. § 2 (West 1997) (count two), engaged in a pattern of racketeering activity in violation of 18 U.S.C.A. § 1962 (West 2000) (count three), tortiously interfered with the business enterprises of chiropractic doctors in violation of common law (count four), conspired to injure chiropractic doctors in their trade or practice in violation of Va.Code Ann. § 18.2-499 (Michie 1996) (count five), committed common law breach of a contract (count six), and conspiracy (count seven), and violated Va. Code Ann. §§ 38.2-2203, -3408, -4221, and -4312(E) (Michie 1999), referred to as the Virginia insurance equality laws (count eight).

Trigon seeks to dismiss the plaintiffs' claims for failure to state a claim upon which relief can be granted, see Fed. R.Civ.P. 12(b)(6), and for failure to plead fraud with particularity. See Fed.R.Civ.P. 9(b). I will consider each of the counts of the complaint in turn. In ruling upon a motion to dismiss, I must accept the "well-pled allegations of the complaint as true, and ... construe the facts and reasonable inferences derived therefrom in the light most favorable to the plaintiff[s]." Ibarra v. United States, 120 F.3d 472, 474 (4th Cir.1997). Additionally, under federal notice pleading, the question is whether relief is possible under any set of facts that are consistent with the allegations. See Fed. R.Civ.P. 8(a); Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957).

A. Standing.

As an initial matter, Trigon has drawn into question the standing of each plaintiff to raise the claims asserted and seek the remedies requested. The plaintiffs respond that because at least one class of plaintiffs have standing to seek relief on all eight counts, it is unnecessary for the court to address the standing of the remaining plaintiffs.

The plaintiffs find support for their argument in Village of Arlington Heights v. Metropolitan Housing Development Corp., 429 U.S. 252, 97 S.Ct. 555, 50 L.Ed.2d 450 (1977), a case in which the Court found that because one plaintiff had standing to seek injunctive relief, it was unnecessary to address the standing of other plaintiffs to seek such relief.

Unlike the facts in Village of Arlington Heights, however, the plaintiffs here each seek injunctive relief as well as actual and punitive damages. As Trigon correctly asserts, the injunctive relief sought by one plaintiff in Village of Arlington Heights effectively supplied the remedy sought by the others, that is the discontinuance of certain actions. The same cannot be said for money damages. Thus, the standing of the plaintiffs in this case is at issue.

The burden is upon the party who invokes this court's authority "to show that he personally has suffered some actual or threatened injury as a result of the putatively illegal conduct of the defendant, and that the injury fairly can be traced to the challenged action and is likely to be redressed by a favorable decision." Valley Forge Christian College v. Americans United for Separation of Church & State, Inc., 454 U.S. 464, 472, 102 S.Ct. 752, 70 L.Ed.2d 700 (1982) (internal quotations omitted).

With respect to associations such as VCA and ACA, it is only their members, and not the individual patients, for whom those organizations might seek redress. See Warth v. Seldin, 422 U.S. 490, 511, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975). Those entities, suing only in their representative capacities in this case, must establish that: (1) its own members would have standing to sue in their own rights; (2) the interests the organization seeks to protect are germane to the organization's purpose; and (3) neither the claim asserted nor the relief sought requires the participation of individual members in the lawsuit. See Natural Res. Def. Council, Inc. v. Watkins, 954 F.2d 974, 978 (4th Cir. 1992). Addressing the third prong under Watkins, it has been held that money damages ordinarily require individual participation, see Telecomm. Research & Action Ctr. v. Allnet Communication Servs., Inc., 806 F.2d 1093, 1095 (D.C.Cir.1986), so that VCA and ACA may not proceed on claims for money damages on behalf of their members and may only seek injunctive relief in this case.

Focusing particular attention on counts one and two of the complaint, there is also the issue of "antitrust standing." As the Supreme Court has stated:

[T]he focus of the doctrine of "antitrust standing" is somewhat different from that of standing as a constitutional doctrine. Harm to the antitrust plaintiff is sufficient to satisfy the constitutional standing requirement of injury in fact, but the court must make a further determination whether the plaintiff is a proper party to bring a private antitrust action. Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 534 n. 31, 103 S.Ct. 897, 74 L.Ed.2d 723 (1983).

The determination of whether VCA and ACA have standing to bring an antitrust action requires analysis of numerous factors such as: the risk of duplicative recovery by multiple antitrust claimants; the extent to which the claim is based upon speculative, abstract, or impractical measures of damages; the causal connection between the alleged violation and the harm suffered; and the relationship of the injury alleged to the forms of injury about which Congress was concerned when it created a private remedy. See Supermarket of Marlinton, Inc. v. Meadow Gold Dairies, Inc., 71 F.3d 119, 129 (4th Cir.1995). In light of this standard and based upon the pleadings, it is obvious that whatever injuries might have been visited upon both VCA and ACA were only an indirect consequence of whatever harm might have been suffered by its members. Accordingly, they have no standing whatsoever as to counts one and two. See Associated Gen. Contractors of Cal., 459 U.S. at 541, 103 S.Ct. 897.

Regarding the plaintiff doctors of chiropractic, the complaint avers that they seek damages both for themselves and their patients. However, the well-established rule of third party standing is that, in the ordinary course, a litigant must assert his or her own claim and cannot raise a claim for relief on the rights and interests of another person. See 15 James Wm. Moore et al., Moore's Federal Practice § 101.51[3][a] (3d ed.2000).

The exception to this rule requires that, in addition to having suffered a redressable injury and sharing a close relationship with their patients, the doctors of chiropractic must also demonstrate that their patients are unable to protect their own interests. See id. § 101.51[3][c]. Assuming the first two requirements to have been satisfied, the plaintiff doctors here are precluded from raising the claims of their patients because the doctors have not established that the plaintiff patients are unable to maintain the present suit on their own behalf.

In accordance with these standards, the plaintiffs have standing as follows: VCA and ACA may seek only injunctive relief and only for counts three through eight. To the extent they seek injunctive and financial relief, each doctor of chiropractic medicine may sue only on his or her behalf. Similarly, each patient of chiropractic medicine may sue only on his or her behalf.

Having decided the issues of standing, I now turn to the substantive issues raised by Trigon's motion to dismiss.

B. The Conspiracy Counts.

The conspiracies charged in counts one,⁴ five,⁵ and seven⁶ make allegations that Trigon and its Provider Policy Committee ("PPC") conspired to exclude doctors of chiropractic from coverage under Trigon policies. The PPC, which is partially composed of physicians, was created by Trigon's board of directors for the purpose of approving Trigon policies relating to health care providers and...