American Chiropractic v. Trigon Healthcare, 03-1675.

• Citation: 367 F.3d 212
• Decision Date: 06 May 2004
• Docket Number: No. 03-1675.,03-1675.
• Parties: AMERICAN CHIROPRACTIC ASSOCIATION, INCORPORATED, a nonprofit corporation; Virginia Chiropractic Association, Incorporated; George W. Chirikinian, D.C.; Douglas M. Cox, D.C.; William R. Theisier, D.C.; John C. Willis, D.C.; Jerry R. Willis, D.C.; Sarah Elizabeth Allen; Lana Kay Ball; Margaret Byrne; Roger Dalton; Mary Sue Dean; Harvie Lee French, Jr.; Patricia Herman; Cindy Linkenhoker; Sandra Phillippi; Darlene Requizo; David Russotto; Gloria Jean Smith; Lynn D. Wagner; Andrea Wallace; Patricia Whittington; Benis D. Wood; Richard D. Worley; Dale Duke Yontz; Douglas F. Ambrose; George C. Mcclelland; James M. Porter; Larry L. Stine; Wendy Holden Willis; Steven W. Yates; Kevin J. Westby; Gregory Walter; Jefferson K. Teass, Plaintiffs-Appellants, v. TRIGON HEALTHCARE, INCORPORATED; Trigon Insurance Company; Trigon Administrators; Mid-South Insurance Company; Trigon Health And Life Insurance Company, Defendants-Appellees, and Blue Cross and Blue Shield Association, Defendant.
• Court: United States Courts of Appeals. United States Court of Appeals (4th Circuit)

367 F.3d 212

AMERICAN CHIROPRACTIC ASSOCIATION, INCORPORATED, a nonprofit corporation; Virginia Chiropractic Association, Incorporated; George W. Chirikinian, D.C.; Douglas M. Cox, D.C.; William R. Theisier, D.C.; John C. Willis, D.C.; Jerry R. Willis, D.C.; Sarah Elizabeth Allen; Lana Kay Ball; Margaret Byrne; Roger Dalton; Mary Sue Dean; Harvie Lee French, Jr.; Patricia Herman; Cindy Linkenhoker; Sandra Phillippi; Darlene Requizo; David Russotto; Gloria Jean Smith; Lynn D. Wagner; Andrea Wallace; Patricia Whittington; Benis D. Wood; Richard D. Worley; Dale Duke Yontz; Douglas F. Ambrose; George C. Mcclelland; James M. Porter; Larry L. Stine; Wendy Holden Willis; Steven W. Yates; Kevin J. Westby; Gregory Walter; Jefferson K. Teass, Plaintiffs-Appellants, v. TRIGON HEALTHCARE, INCORPORATED; Trigon Insurance Company; Trigon Administrators; Mid-South Insurance Company; Trigon Health And Life Insurance Company, Defendants-Appellees, and Blue Cross and Blue Shield Association, Defendant.

No. 03-1675.

United States Court of Appeals, Fourth Circuit.

Argued: February 24, 2004.

Decided: May 6, 2004.

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ARGUED:

George P. McAndrews, McAndrews, Held & Malloy, Ltd., Chicago, IL, for Appellants. Howard Feller, Bryan Alan Fratkin, McGuirewoods, L.L.P., Richmond, VA, for Appellees.

ON BRIEF:

Steven J. Hampton, Patrick J. Arnold, Jr., Peter J. McAndrews, Ronald A. Dicerbo, McAndrews, Held & Malloy, Ltd., Chicago, IL; William G. Shields, Thorsen & Scher, Richmond, VA, for Appellants.

Before WILLIAMS and MICHAEL, Circuit Judges, and QUARLES, United States District Judge for the District of Maryland, sitting by designation.

Affirmed by published opinion. Judge WILLIAMS wrote the opinion, in which Judge MICHAEL and Judge QUARLES joined.

WILLIAMS, Circuit Judge:

In this appeal, we consider whether Trigon Healthcare, Virginia's largest for-profit health insurance company, and its affiliated companies (collectively, Trigon),¹ were engaged in an anticompetitive conspiracy with medical doctors and medical associations whose purpose was to harm chiropractors. American Chiropractic² filed this eight count complaint alleging violations of federal antitrust laws, the Racketeer Influenced and Corrupt Organizations Act (RICO), and various state laws, claiming that Trigon and the medical doctors and associations were engaged in a conspiracy that used Trigon's reimbursement policies and treatment guidelines to limit severely the flow of insurance dollars to chiropractors and steer those monies toward medical doctors. Trigon argues that no conspiracy exists, and that it implemented its coverage policies unilaterally based on market supply and demand. The district court agreed with Trigon, dismissing two counts of the complaint for failure to state a claim and disposing of the remaining counts by granting Trigon's motion for summary judgment. Although we apply different reasoning than the district court in some areas, we affirm its disposition of the case in favor of Trigon.

I.

Trigon is a for-profit, publicly-traded health insurance company located in Virginia. Trigon's business consists of selling individual and group healthcare benefit plans to its subscribers. Generally, these healthcare benefit plans list the benefits and services covered by Trigon under the plan and describe any services that are excluded from the plan or are the subject of coverage limitations. Trigon makes a network of healthcare providers, including medical doctors, hospitals, pharmacies, chiropractors, and therapists, available to plan members to provide the services covered under the plan. Trigon creates this network of healthcare providers by entering into contracts with providers who are willing to abide by Trigon's terms and conditions, as set forth in Trigon's provider agreements. Simply put, "Trigon is essentially purchasing services from the healthcare providers who agree to become participating providers in Trigon's [provider] networks." (J.A. at 1344.) Trigon strives to offer "the best coverage at the lowest possible cost," and it endeavors to pay "the lowest possible price" to healthcare providers to ensure low-cost access for plan enrollees. (J.A. at 1597, 4579.)

Chiropractic medicine is "a non-pharmaceutical, nonsurgical system of health care based on the self-healing capacity of the body" with the aim of "removing irritants to the nervous system and restoring proper function" to the nervous system. Dorland's Medical Illustrated Dictionary 347 (30th ed.2003). Chiropractic treatment most commonly involves spinal manipulations³ to relieve musculoskeletal complaints. Id. Trigon has provided coverage for chiropractic services since the 1980's, and Trigon "acknowledge[s] that chiropractic care has a health effect, a positive health effect when rendered appropriately."⁴ (J.A. at 4186.)

Despite Trigon's coverage of chiropractic services, and the fact that chiropractic medicine is, as the district court noted, a "recognized branch of the healing arts," see American Chiropractic Association v. Trigon Healthcare, Inc., 258 F.Supp.2d 461, 463 (W.D.Va.2003), there is a history of animus from medical doctors and insurers aimed at chiropractors. Beginning in 1962, the American Medical Association (AMA), aided by the National Association of Blue Shield Plans,⁵ began a "lengthy, systematic, successful, and unlawful" national group boycott aimed at destroying chiropractic medicine. Wilk v. Am. Medical Ass'n., 895 F.2d 352, 371 (7th Cir.1990). As the Seventh Circuit explained:

In 1963 the AMA formed its Committee on Quackery ("Committee"). The Committee worked diligently to eliminate chiropractic. A primary method to achieve this goal was to make it unethical for medical physicians to professionally associate with chiropractors. Under former Principle 3, it was unethical for medical physicians to associate with "unscientific practitioners." In 1966, the AMA's House of Delegates passed a resolution labeling chiropractic an unscientific cult.

Id. at 356.

Beginning in 1977, the AMA slowly began to phase out its boycott of chiropractors, and the Seventh Circuit adopted the Wilk district court's finding that the boycott became dormant in 1980 when Principle 3 was revised.⁶ Id. at 356, 374. Although Trigon is a licensee of Blue Cross & Blue Shield Association of America, there is no record evidence connecting Trigon to this boycott.

American Chiropractic, however, asserts that medical doctors continue to harbor animosity toward chiropractors and have entered into an anticompetitive conspiracy with Trigon to harm chiropractors. American Chiropractic contends that medical doctors and their medical associations have conspired with Trigon to limit the usage of chiropractors by Trigon's plan enrollees and to restrain severely the reimbursement paid to chiropractors for services rendered to plan enrollees. The ultimate goal of this conspiracy, American Chiropractic argues, is to shift insurance dollars away from chiropractors toward medical doctors and harm the business of chiropractors.

In response to this perceived anticompetitive conspiracy, American Chiropractic brought this action in the United States District Court for the Western District of Virginia on August 18, 2000. American Chiropractic's eight-count complaint alleged that Trigon⁷ conspired with medical doctors and medical associations to restrain interstate trade in violation of § 1 of the Sherman Antitrust Act, 15 U.S.C.A. § 1 (West 1997) (count one); attempted to monopolize the market for treatment of neuromusculoskeletal conditions in violation of § 2 of the Sherman Act, 15 U.S.C.A. § 2 (West 1997) (count two); engaged in a pattern of racketeering activity in violation of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C.A. § 1962 (West 2000) (count three); tortiously interfered with the business enterprise of chiropractors in violations of state common law (count four); conspired to injure chiropractors in their trade or practice in violation of Va.Code Ann. § 18.2-499 (Michie 1996) (count five); committed state common law breach of contract (count six) and conspiracy (count seven); and violated Va.Code Ann. §§ 38.2-2203, 38.2-3408, 38.2-4221, and 38.2-4312(E) (Michie 2002), referred to as the Virginia insurance equality laws (count eight). The district court exercised supplemental jurisdiction over the state law claims pursuant to 28 U.S.C.A. § 1367 (West 1993).

Trigon moved to dismiss the complaint in its entirety on October 13, 2000. The district court, on July 19, 2001, granted that motion in part and dismissed American Chiropractic's RICO (count three) and Virginia insurance equality (count eight) claims for failure to state claims. The district court held that the RICO claim was preempted by the McCarran-Ferguson Act and that the Virginia insurance equality laws relied upon by American Chiropractic did not create private causes of action.

Following discovery, on August 13, 2002, Trigon filed a motion for summary judgment on the remaining counts in the complaint. American Chiropractic did not file a Rule 56(f) motion requesting further discovery, but it did contest Trigon's motion for summary judgment. After the benefit of oral argument, the district court, on April 25, 2003, granted Trigon's motion for summary judgment on the remaining counts. As to counts one, five, and seven, the district court found that the intracorporate immunity doctrine precluded any conspiracy between Trigon and the medical doctors that served on one of its committees, the Managed Care Advisory Panel, and that American Chiropractic had produced no other evidence of a conspiracy between Trigon and the medical doctors or medical associations. As to American Chiropractic's claim for monopolization (count two), the district court granted summary judgment because Trigon did not possess monopoly power...