Total Benefits Plan. Agency v. Anthem Blue Cross

• Decision Date: 25 July 2007
• Docket Number: No. 1:05cv519.,1:05cv519.
• Citation: 630 F.Supp.2d 842
• Parties: TOTAL BENEFITS PLANNING AGENCY INC. et al., Plaintiffs, v. ANTHEM BLUE CROSS AND BLUE SHIELD, et al., Defendants.
• Court: U.S. District Court — Southern District of Ohio

630 F.Supp.2d 842

TOTAL BENEFITS PLANNING AGENCY INC. et al., Plaintiffs, v. ANTHEM BLUE CROSS AND BLUE SHIELD, et al., Defendants.

No. 1:05cv519.

United States District Court, S.D. Ohio, Western Division.

July 25, 2007.

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Richard B. Reiling, Richard Reiling, Esq., Loveland, OH, for Plaintiffs.

Glenn Virgil Whitaker, Kent Allen Britt, Vorys Sater Seymour & Pease, Mark Edward Elsener, Porter, Wright, Morris & Arthur, B. Scott Jones, Reminger & Reminger CO LPA, Thomas J. Gruber, McCaslin, Imbus & McCaslin, Brian Robert Redden, Peter Leroux Cassady, Beckman, Weil, Shepardson & Faller, LLC, James Frank McDaniel, John Michael Hands, Edward Ronald Goldman, Rendigs Fry Kiely & Dennis LLP, Cincinnati, OH, James M. Burns, Williams Mullen PC, Washington, DC, John Randolph Folkerth, Jr., Weprin Folkerth & Routh LLC, Christopher Freeman Johnson, Freund Freeze & Arnold, Dayton, OH, Maria Del Monaco, Ulmer & Berne LLP, Cleveland, OH, for Defendants.

OPINION AND ORDER

MICHAEL R. BARRETT, District Judge.

This matter is before the Court upon Anthem Blue Cross and Blue Shield, Anthem Life Insurance Company Inc., Anthem Health Plans of Kentucky Inc., Anthem Insurance Company Inc.'s ("Anthem Defendants") Motion for Reconsideration (Doc. 29) and Cornerstone Broker Insurance Services Agency Inc.'s ("Cornerstone") Motion for Reconsideration, or Motion to Certify Interlocutory Appeal (Doc. 30).

Subsequent to the filing of these motions, Plaintiffs filed an Amended Complaint as a matter of right. The Anthem Defendants and Cornerstone filed additional Motions to Dismiss (Docs. 43, 44), essentially repeating the same arguments made in the Motions for Reconsideration. The new Defendants named in the Amended Complaint also filed Motions to Dismiss Plaintiffs' Amended Complaint. (Docs. 73, 74, 77, 78, 79, 80, 84) For the most part, these Motions are identical and repeat the same arguments made by the Anthem Defendants and Cornerstone.

Also pending before the Court are the Anthem Defendants' Motion to Quash and to Stay Discovery (Doc. 23); the City of Dayton's Motion to Quash (Doc. 25); and Plaintiff Thomas Quigley's Motion to Disqualify Counsel (Doc. 89).

I. FACTUAL AND PROCEDURAL BACKGROUND

Plaintiffs allege violations of the Sherman Antitrust Act, 15 U.S.C. § 1 and the Clayton Act, 15 U.S.C. § 15.¹ Plaintiffs also allege violations of state law for defamation, tortuous interference, civil conspiracy, and breach of contract.

In their Amended Complaint, Plaintiffs allege that they are in the business of selling health and life insurance to individuals and businesses. (Doc. 40, ¶ 20) Total Benefits Planning Agency developed a strategy for controlling healthcare costs, which it calls the Total Benefits Strategy. (Id. ¶ 22) The Strategy uses "a 51-year old federal tax law to `refinance' healthcare costs by raising deductibles on existing group insurance policies and administering benefits through a medical expense reimbursement plan." (Id.)

The Anthem Defendants are insurance companies. (Id. ¶ 5) Until June 3, 2005, Plaintiffs maintained appointments with the Anthem Defendants to sell life and health insurance. (Id. ¶ 21)

Plaintiffs allege that during a meeting in September of 2004, a representative of the Anthem Defendants informed Plaintiffs that the Anthem Defendants had concerns that the Total Benefits Strategy was not in the best interests of the Anthem Defendants or insurance agencies such as Defendants Cornerstone, CAI Insurance Agency, Horan Associates, Inc., USI Midwest, McGohan-Brabender, Inc., Brower Insurance Agency, LLC, Lang Financial Group, Benefit Resources, Inc. and John/Jane Doe 1-100. (Id. ¶ 24) Plaintiffs allege that the Anthem Defendants and these agencies had "an agreement and common understanding in regards to the amount of commissions to be paid in connection with the [sale] of Health Insurance, including but not limited to Group Health Insurance, and the price to be charged to the consumer." (Id.) Plaintiffs allege that the Anthem Defendants and the agencies "believed that the Total Benefits Strategy threatened said fixed prices and commission as it provided a lower cost alternative to the consumer . . ." (Id.) Plaintiffs allege that the Anthem Defendants threatened to terminate Plaintiffs' appointments if Plaintiffs continued to use the Total Benefits Strategy. (Id.) However, Plaintiffs continued to promote the Total Benefits Strategy. (Id.)

Plaintiffs allege that Defendants have taken several actions which make up a continuing agreement, understanding, and concert of action. (Id. ¶ 26) Plaintiffs allege that Defendants and their co-conspirators defamed and libeled Plaintiffs to third parties, such as insurance agencies, agents, businesses and consumers. (Id.) Plaintiffs allege that Defendants and their co-conspirators stated that the Total Benefits Strategy is unethical and illegal even though Defendants and their co-conspirators knew this to be untrue. (Id.) Plaintiffs allege further that Defendants and their co-conspirators have "coerced and threatened certain insurance agents by threatening to `blacklist' them and cancel their contracts to insure that these agents do not do business with Plaintiffs." (Id.) Plaintiffs allege that they have also been coerced and threatened. (Id.) Plaintiffs state that Defendants have "`blacklisted' Plaintiffs within the insurance industry and otherwise organized a boycott of Plaintiffs." (Id.) Finally, Plaintiffs state that Defendants terminated their appointments and threatened to terminate the appointment of any agent who does business with Plaintiffs. (Id.) Plaintiffs allege that as a direct and proximate result of these actions, purchasers of insurance services from Plaintiffs have been deprived of the benefits of free and open competition; Plaintiffs have been restrained in their ability to make these services readily and fully available; and Plaintiffs have been defamed and libeled. (Id. ¶ 28)

This Court previously ruled that the per se rule was applicable to Plaintiffs' antitrust claim under the Sherman Act, and Plaintiffs had adequately plead an antitrust claim under that rule. (Doc. 27) The Court also found that Plaintiffs' antitrust claim was not exempted by the McCarran-Ferguson Act. The Anthem Defendants and Cornerstone seek reconsideration of the Court's ruling regarding the applicability of the per se rule. In their Motions to Dismiss, all of the Defendants argue that Plaintiffs' antitrust claim under the Sherman Act, 15 U.S.C. § 1, should be dismissed because Plaintiffs have not satisfied the pleading requirements for an antitrust claim.

II. ANALYSIS

A. Motion for Reconsideration

Although a motion for reconsideration is not mentioned in the Federal Rules of Civil Procedure, it is often treated as a motion to amend judgment under Rule 59(e). McDowell v. Dynamics Corp. of America, 931 F.2d 380 (6th Cir.1991); Shivers v. Grubbs, 747 F.Supp. 434 (S.D. Ohio 1990). The grant or denial of a Rule 59(e) motion is within the informed discretion of the district court, and is reversible only for abuse. Huff v. Metropolitan Life Insurance Co., 675 F.2d 119, 122 (6th Cir.1982).

There are three grounds for amending a judgment: (1) to accommodate an intervening change in controlling law; (2) to account for new evidence not available at trial; and (3) to correct a clear error of law or to prevent manifest injustice. GenCorp., Inc. v. Am. Int'l Underwriters, 178 F.3d 804, 834 (6th Cir.1999); Berridge v. Heiser, 993 F.Supp. 1136, 1146-47 (S.D.Ohio 1997).

B. Motion to Dismiss Standard

A motion to dismiss under Rule 12(b)(6) requires this Court to construe the complaint in the light most favorable to the plaintiff, accept all of the complaint's factual allegations as true, and determine whether the plaintiff undoubtedly can prove no set of facts in support of the claims that would entitle relief. Meador v. Cabinet for Human Resources, 902 F.2d 474, 475 (6th Cir.1990), cert. denied, 498 U.S. 867, 111 S.Ct. 182, 112 L.Ed.2d 145 (1990). "However, while liberal, this standard of review does require more than the bare assertion of legal conclusions." Columbia Natural Res., Inc. v. Tatum, 58 F.3d 1101, 1109 (6th Cir.1995).

C. Sherman Act

Section 1 of the Sherman Act was enacted to prohibit unreasonable restraints of trade. Board of Trade of City of Chicago v. United States, 246 U.S. 231, 238, 38 S.Ct. 242, 62 L.Ed. 683 (1918). This Court must determine whether Plaintiffs' claims should be analyzed under the per se rule or the rule of reason:

courts must distinguish between some types of unlawful anticompetitive restraints that "have such a clear lack of any redeeming virtue that any restraint of that type is conclusively presumed to be unreasonable," and are therefore per se illegal under the antitrust laws, and the far-larger type of restraints that should be analyzed under the "rule of reason approach that permits case-by-case evaluation of their effect on competition."

Expert Masonry, Inc. v. Boone County, Ky., 440 F.3d 336, 342 (6th Cir.2006), quoting Bailey's, Inc. v. Windsor America, Inc., 948 F.2d 1018, 1027 (6th Cir.1991).

1. Per se rule

If a practice is illegal per se, it is unnecessary to further examine the practice's impact on the market or the procompetitive justifications for the practice. Expert Masonry, 440 F.3d at 342. When a restraint is found to be proscribed per se, the plaintiff need only prove that (1) two or more entities engaged in a conspiracy, combination, or contract; (2) to effect a restraint or combination prohibited per se (wherein the anticompetitive effects within a relevant geographic and product market are implied); (3) that was the proximate cause of the plaintiff's antitrust injury. Id. (citations omitted)

Relying on the Sixth Circuit's decision in Com-Tel, Inc. v. DuKane, Corp., 669 F.2d 404, 407-408, 412 (6th Cir.1982) this Court previously found that per se rule was...