Musselman v. Blue Cross & Blue Shield Alabama

• Decision Date: 05 April 2017
• Docket Number: No. 13-14250,13-14250
• Parties: COREY MUSSELMAN, RICK LOVE, CHARLES SHANE, Plaintiffs - Appellants, v. BLUE CROSS AND BLUE SHIELD OF ALABAMA, PREMERA BLUE CROSS AND BLUE SHIELD OF ALASKA, ANTHEM BLUE CROSS AND BLUE SHIELD OF CONNECTICUT, BLUE CROSS AND BLUE SHIELD OF FLORIDA, BLUE CROSS AND BLUE SHIELD OF GEORGIA, et al., Defendants - Appellees.
• Court: U.S. Court of Appeals — Eleventh Circuit

COREY MUSSELMAN, RICK LOVE, CHARLES SHANE, Plaintiffs - Appellants, v. BLUE CROSS AND BLUE SHIELD OF ALABAMA,

PREMERA BLUE CROSS AND BLUE SHIELD OF ALASKA,

ANTHEM BLUE CROSS AND BLUE SHIELD OF CONNECTICUT,

BLUE CROSS AND BLUE SHIELD OF FLORIDA,

BLUE CROSS AND BLUE SHIELD OF GEORGIA, et al., Defendants - Appellees.

No. 13-14250

UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT

April 5, 2017

[DO NOT PUBLISH]

D.C. Docket No. 1:13-cv-20050-FAM

Appeal from the United States District Court for the Southern District of Florida Before TJOFLAT, JULIE CARNES and GILMAN,^* Circuit Judges.

PER CURIAM:

After review and oral argument, we affirm the District Court's dismissal of the plaintiff-appellants' complaint under Federal Rule of Civil Procedure 12(b)(6) on the basis of the District Court's thorough and well-reasoned order of August 20, 2013.

AFFIRMED.

TJOFLAT, Circuit Judge, concurring specially:

This case comes before us on appeal from an order of the United States District Court for the Southern District of Florida dismissing the plaintiffs' complaint for declaratory relief under Federal Rule of Civil Procedure 12(b)(6). The plaintiffs are three doctors who had previously been plaintiffs in class-action litigation (the "Shane and Love Litigation") and party to settlements with most of the defendants.¹ These settlements included broad releases of claims enforced by consent decree. Subsequently, the plaintiffs desired to join a different class action coalescing in the United States District Court for the Northern District of Alabama (the "Conway Litigation") asserting similar claims against many of the same defendants. The plaintiffs petitioned the Southern District of Florida for a declaratory judgment that the consent decrees from the Shane and Love Litigation did not bar them from joining the Conway Litigation. The District Court granted the defendants' motion to dismiss for failure to state a claim after determining that the consent decrees clearly enjoined them from joining the Conway Litigation.

I write separately because I would affirm the District Court on the grounds that a declaratory judgment action is not the appropriate vehicle for determining the scope of a permanent injunction. The Declaratory Judgment Act was not intended to provide a route for circumventing the enforcement of an already-granted injunction. Allowing a declaratory judgment to issue for these purposes would significantly defang the injunction as a remedy, which would work a serious harm on the rule of law and the integrity of the judiciary. As such, no complaint filed for these purposes can properly state a claim for which declaratory relief may be granted, and I would affirm the order of dismissal on this basis.

I.

The plaintiffs in this case—Doctors Musselman, Shane, and Love—were plaintiffs in class-action lawsuits filed in the early 2000s against the entities of the Blue Cross Blue Shield (BCBS) network of health insurers. Those previous lawsuits were In re: Managed Care Litigation, No. 00-md-01334 (S.D. Fla.) ("Shane") and Love v. Blue Cross and Blue Shield Association, No. 03-cv-21296 (S.D. Fla.) ("Love"). The District Court presided over both Shane and Love, which involved substantively identical claims under the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. §§ 1961-1968² against different groups of health insurers.³

Between 2005 and 2007, the BCBS defendants settled claims in Shane and Love in three separate settlement agreements—the WellPoint, Highmark, and Blue Cross Settlement Agreements. Of the thirty-six BCBS defendants in the present case, eight were parties to the WellPoint agreement,⁴ two were parties to the Highmark agreement, and twenty-five were parties to the Blue Cross agreement.⁵ The settlements all included broad releases of claims, which were nearly identical.⁶The District Court approved each settlement agreement, incorporated each into a court order,⁷ and issued injunctions barring the plaintiffs who failed to opt out from ever prosecuting released claims against settling defendants.⁸ The orders further provided that "this Court hereby retains jurisdiction as to all matters relating to (a) the interpretation, administration, and consummation of the Settlement Agreement and (b) the enforcement of injunctions in this Order." Noone disputes that Musselman, Love, and Shane failed to opt out of the agreements, and are therefore bound by the injunctions.

On July 24, 2012, a healthcare provider, Jerry Conway, filed a putative class-action suit against the BCBS defendants in the Northern District of Alabama. Conway v. Blue Cross & Blue Shield of Alabama, et al., No. 12-cv-02532 (N.D. Ala. July 24, 2012). Conway, on behalf of most of the nation's healthcare providers, alleges that the BCBS licensing and reimbursement arrangements violate the Sherman Act, 15 U.S.C. §§ 1-2.⁹

The plaintiff doctors in the present suit seek to join the Conway Litigation "as either putative class representatives or class members," but fear that the releases they gave to settle the Shane and Love Litigation may cover the claims asserted in Conway. Were they to join Conway, the doctors would risk being held in civil contempt for violating the District Court's orders.¹⁰ Rather than take that risk, they asked the District Court to determine in advance whether joining Conway would violate the injunctions by filing a declaratory judgment action on January 7, 2013.

The defendants moved to dismiss the plaintiff doctors' complaint under Federal Rule of Civil Procedure 12(b)(6). They argued that the Conway claims were within the subject matter and timeframe covered by the injunctions issued in the Shane and Love Litigation, and that the plaintiffs had thus not made out a claim for declaratory relief. The plaintiffs countered that the Conway claims covered different conduct occurring only after the Effective Date of the releases in the Shane and Love Litigation and thus fell outside the scope of the injunctions. The District Court agreed with the defendants and dismissed the complaint. The plaintiffs appealed from the District Court's order, and both sides presented arguments essentially identical to the ones made below.¹¹

II.

We are here faced with the question of whether the complaint seeking declaratory relief on the scope of the consent decrees issued in the Shane and Love settlements made out a claim for which declaratory relief could be granted under Rule 12(b)(6).

We review de novo orders granting a motion to dismiss for failure to state a claim upon which relief can be granted under Federal Rule of Civil Procedure 12(b)(6). Michel v. NYP Holdings, Inc., 816 F.3d 686, 694 (11th Cir. 2016).When ruling on a Rule 12(b)(6) motion, the allegations in the complaint are accepted as true and construed in the light most favorable to the plaintiff, id., yet the plaintiff must plead "enough facts to state a claim to relief that is plausible on its face." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S. Ct. 1955, 1974, 167 L. Ed. 2d 929 (2007). We may affirm a Rule 12(b)(6) dismissal on any basis supported by the record. Jaffke v. Dunham, 352 U.S. 280, 281, 77 S. Ct. 307, 308, 1 L. Ed. 2d 314 (1957); Michel, 816 F.3d at 694.

I would conclude that the Declaratory Judgment Act does not permit a court to grant declaratory relief regarding the scope of an injunction and that any complaint seeking such a remedy does not state a claim on which relief can be granted. In enacting the Declaratory Judgment Act, Congress intended to create a remedy that is coextensive with—not in derogation of—remedies traditionally available at law and equity. At least under these circumstances, I must conclude that this implies an intended distinction between remedies and enforcement mechanisms for an already-granted remedy. This distinction is implied because using a declaratory judgment to plumb the scope of an injunction rather than bearing the risk of being held in contempt would allow the declaratory judgment to undermine the injunction as a remedy. Injunctions definitionally and as a matter of sound jurisprudential policy rely on the maintenance of the traditional enforcement mechanism of the court's inherent civil contempt power. Injunctions are carefullycrafted with this enforcement mechanism in mind and thus ensure respect for the rule of law as resting upon the integrity of the judicial process. Therefore, a declaratory judgment cannot issue on the scope of an injunction such as this one.

This discussion will proceed in three parts. The first is a brief discussion of statutory interpretation principles. The second is an application of these principles to the Declaratory Judgment Act, which by necessity includes a discussion of the injunction as an independent remedy in relation to the Act. The third is an analysis of the complaint below under the Declaratory Judgment Act and Rule 12(b)(6).

A.

Statutes in the United States "must be construed in the light of Congress' intent." Federal Election Comm'n v. NRA Political Victory Fund, 513 U.S. 88, 102, 115 S. Ct. 537, 545, 130 L. Ed. 2d 439 (1994). This intent is divined primarily from the statute's language itself read according to the ordinary meaning of the words employed. Lawson v. FMR LLC, 134 S. Ct. 1158, 1165, 188 L. Ed. 2d 158 (2014). We also employ prudential cannons to ensure that we do not overrun congressional intent and threaten the stability of our legal system. One such cannon is that we assume that Congress is familiar with the background of common law, draws upon common law concepts, and only abrogates common law when and to the extent it clearly express intent to do so. See, e.g., Ibrandtsen Co. v. Johnson, 343 U.S. 779, 783, 72 S. Ct. 1011, 1014-15, 96 L. Ed. 1294 (1952)("Statutes which invade the common law . . . are to be read with a presumption favoring the retention of long-established and familiar principles, except when a statutory purpose to the contrary is evident"); Shaw v. ...