In re Blue Cross Blue Shield Antitrust Litigation mdl 2406
Court Docket Sheet

Northern District of Alabama

2:2013-cv-20000 (alnd)

TRANSFER ORDER from the Judicial Panel on MDL 2406 transferring 9 actions listed on schedule A to the Northern Distirct of Alabama.

Case2:12-cv-01133-RDP Case 2:13-cv-20000-RDP Document Document194 1 Filed Filed01/08/13 12/26/12 Page Page1 1ofof4 4 FILED 2012 2013 Dec-26 Jan-08 PM AM 03:39 11:52 Case TNW/2:12-cv-02359 Document 28 Filed 12/12/12 Page 1 of 4 U.S. DISTRICT COURT N.D. OF ALABAMA UNITED STATES JUDICIAL PANEL on Zfill O':C 2b A \I: a I MULTIDISTRICT LITIGATION.) I, IN RE; BLUE CROSS--B'LUE SHIELD ANTITRUST LITIGATION MDLNo.2406 TRANSFER ORDER Before the Panel:· Pursuant to 28 U.S.c. § 1407, plaintiffs in the Northern District of Alabama GC Advertising action move to centralize this litigation in the Northern District ofAlabama. This antitrust litigation concerns the licensing agreements between and among the Blue Cross Blue Shield Association (BCBSA) and its 38 licensees (Blue Plans) and currently consists ofseven actions pending in the Northern District ofAlabama and an action each in the Western District ofTennessee and the Western District of North Carolina, as listed on Schedule A. 1 According to defendants, BCBSA is a coordinated effort by health insurers to create a national brand with separate companies in local areas. In total, 38 separate Blue Plans operate under Blue Cross Blue Shield trademarks and trade names, providing health insurance to approximately 100 million subscribers. Plaintiffs contend that the 38 Blue Plans are independent health insurance companies that, but for any agreement to the contrary, could and would compete with one another. Instead, working together with and through the BCBSA, they have allegedly divided and allocated among themselves health insurance markets throughout the nation to eliminate competition. Plaintiffs variously contend that this conduct violates Sections 1 and 2 of the Shennan Antitrust Act, as well as various related state laws. • All Panel members have interests that would nonnally disqualify them under 28 U.S.c. § 455 from participating in the decision of this matter; they have renounced any interest in the underlying litigation. Additionally, the Panel invoked the Rule of Necessity and all Panel members participated in the decision of this matter in order to provide the forum created by the governing statute, 28 U.S.C. § 1407. See In re Adelphia Commc 'ns Corp. Sec. & Derivative Litig., 273 F. Supp. 2d 1353 (l.P.M.L. 2003).. In re Wireless Tel. Radio Frequency Emissions Prods. Liab. Litig., 170 F. Supp. 2d 1356 (l.P.M.L. 2001). 1 The Panel has been notified oftwelve additional related actions pending in twelve districts. These actions and any other related actions are potential tag-along actions. See Panel Rules 1.1 (h), 7.1 and 7.2. Further, various parties to the Eastern District of Pennsylvania LifeWatch action presented argument as to whether that action should be included in the centralized proceedings, as did plaintiff in the Western District of Pennsylvania UPMC action, which opposed inclusion of its action. Because those actions are not on this motion, and thus not squarely before us, such arguments are best presented as opposition to a conditional transfer order covering the respective actions, if issued. Case2:12-cv-01133-RDP Case 2:13-cv-20000-RDP Document Document194 1 Filed Filed01/08/13 12/26/12 Page Page2 2ofof4 4 Case TNW/2:12-cv-02359 Document 28 Filed 12/12/12 Page 2 of 4-2­ Plaintiffs in the Northern District of Alabama Conway action, the Western District of Tennessee Morrissey action and three potential tag-along actions support the plaintiffs' motion in its entirety, as do responding defendants? Plaintiffs in three Northern District of Alabama actions­ Carter, Richards and American Electric Motor-oppose centralization. Plaintiffs in the Northern District ofAlabama Bajalieh and One Stop Environmental actions and the Western District ofNorth Carolina Cerven action also oppose centralization and, alternatively, suggest centralization in the Northern District of Alabama or the Western District of North Carolina. The primary arguments advanced against centralization are that there are too few pending actions, discovery will focus on each Blue Plan's activity in a specific market, and several potentially­ dispositive state-specific issues will be prominent in each action. We disagree that these considerations weigh against centralization here. Though only nine actions pending in three districts were included on the motion for centralization, this litigation has since grown to encompass potentially 21 actions involving allegations of complex anticompetitive behavior pending in fourteen districts. The Panel has, in the past, centralized antitrust cases involving allegations of concerted anticompetitive activity in the insurance market. See, e.g., MDL No. 767 In re: Commercial Gen. Liab. Ins. Antitrust Litig., Aug. 30, 1988, Transfer Order at 2 ("The complaints in all actions contain similar allegations 0 f conspiracies, invo lving essentially the same groups 0 f defendants, to manipUlate the availability of commercial general liability insurance, in violation of federal antitrust laws."). Transfer under Section 1407 does not require a complete identity of common factual issues as a prerequisite to transfer, and the presence ofadditional facts or differing legal theories is not significant when the actions still arise from a common factual core. Here, the actions involve substantial common questions of fact relating to the state BCBS entities' relationship with the national association, BCBSA, and the licensing agreements that limit the Blue Plans' activity to exclusive service areas, among other restrictions. All ofthe Blue Plans are alleged to be co-conspirators, even 2 Anthem Blue Cross and Blue Shield of Connecticut; Anthem Blue Cross and Blue Shield ofIndiana; Anthem Blue Cross and Blue Shield of New Hampshire; Anthem Blue Cross and Blue Shield ofVirginia Inc.; Anthem Blue Cross and Shield of Missouri; Anthem Health Plans ofMaine; Anthem Inc.; Arkansas Blue Cross and Blue Shield; Blue Cross and Blue Shield Association (BCBSA); Blue Cross and Blue Shield of Alabama; Blue Cross and Blue Shield of Florida; Blue Cross and Blue Shield ofGeorgia; Blue Cross and Blue Shield ofKansas; Blue Cross and Blue Shield of Kansas City; Blue Cross and Blue Shield of Louisiana; Blue Cross and Blue Shield of Massachusetts; Blue Cross and Blue Shield of Michigan; Blue Cross and Blue Shield of Minnesota; Blue Cross and Blue Shield of Mississippi; Blue Cross and Blue Shield ofNebraska; Blue Cross and Blue Shield of North Carolina; Blue Cross and Blue Shield of South Carolina; Blue Cross and Blue Shield ofTennessee; Blue Cross Blue Shield ofTennessee, Inc.; Blue Cross and Blue Shield ofNew Mexico; Blue Cross and Blue Shield of Oklahoma; Blue Cross and Blue Shield of Texas; CareFirst Blue Cross and Blue Shield of Maryland; Excellus BlueCross BlueShield of New York; Hawaii Medical Service Assoc.; Health Care Service Corp.; Horizon Blue Cross and Blue Shield of New Jersey; Independence Blue Cross; Premera Blue Cross ofAlaska; Triple S-Salud Inc.; Wellmark; Inc.; and Wellmark of South Dakota Inc. Case2:12-cv-01133-RDP Case 2:13-cv-20000-RDP Document Document194 1 Filed Filed01/08/13 12/26/12 Page Page3 3ofof4 4 Case TNW/2:12-cv-02359 Document 28 Filed 12/12/12 Page 3 of 4-3­ though some Blue Plans are named as defendants only in actions in their respective state. Centralizing these actions under Section 1407 will ensure streamlined resolution of this litigation to the overall benefit of the parties and the judiciary. For all these reasons, on the basis of the papers filed and hearing session held, we find that these actions involve common questions offact, and that centralization ofall actions in the Northern District ofAlabama will serve the convenience ofthe parties and witnesses and promote the just and efficient conduct of this litigation. Centralization will eliminate duplicative discovery; prevent inconsistent pretrial rulings, including with respect to class certification;3 and conserve the resources of the parties, their counsel, and the judiciary. Weighing all factors, we have selected the Northern District of Alabama as the transferee district for this litigation. Seven related actions are pending in this district, and these actions include claims on behalf of both Blue Plan subscribers and healthcare providers. Further, the Honorable R. David Proctor, to whom we assign this litigation, is an experienced transferee judge who is already familiar with the contours ofthe litigation and has taken preliminary steps to organize the litigation. IT IS THEREFORE ORDERED that pursuant to 28 U.S.C. § 1407, the actions listed on Schedule A and pending outside the Northern District of Alabama are transferred to the Northern District ofAlabama and, with the consent ofthat court, assigned to the Honorable R. David Proctor for coordinated or consolidated pretrial proceedings with the action pending there. PANEL ON MULTIDISTRICT LITIGATION Kathryn H. Vratil W. Royal Furgeson, Jr. Paul J. Barbadoro Marjorie O. Rendell Charles R. Breyer Lewis A. Kaplan 3 All actions are purported statewide and/or nationwide class actions brought against BCBSA and one or more Blue Plan defendants. Case2:12-cv-01133-RDP Case 2:13-cv-20000-RDP Document Document194 1 Filed Filed01/08/13 12/26/12 Page Page4 4ofof4 4 Case TNW/2:12-cv-02359 Document 28 Filed 12/12/12 Page 4 of 4 IN RE: BLUE CROSS BLUE SHIELD ANTITRUST LITIGATION MDLNo.2406 SCHEDULE A Northern District ofAlabama Fred R. Richards, et aI. v. Blue Cross and Blue Shield ofAlabama, et aI., C.A. No.2: 12-01133 One Stop Environmental, LLC, et ai. v. Blue Cross and Blue Shield ofAlabama, et aI., C.A. No. 2:12-01910 American Electric Motor Services, Inc. v. Blue Cross and Blue Shield of Alabama, et aI., C.A. No. 2:12-02169 Chris Bajalieh, et a1. v. Blue Cross and Blue Shield ofAlabama, et aI., C.A. No. 2:12-02185 GC Advertising, LLC, et at. v. Blue Cross and Blue Shield ofAlabama, et aI., C.A. No.2: 12-02525 Jerry L. Conway v. Blue Cross and Blue Shield of Alabama, et aI., C.A. No.2: 12-02532 Thomas A. Carder, et al. v. Blue Cross and Blue Shield ofAlabama, et a1., C.A. No. 2:12-02537 Western District ofNorth Carolina Thomas A. Cerven, Jr., et aI. v. Blue Crossand Blue Shield ofNorth Carolina. et aI., C.A. No. 5:12-00017 • Western District of Tennessee Mary Morrissey v. Blue Cross Blue Shield of Tennessee, Inc., C.A. No.2: 12-02359

Schedule with NDAL case numbers) [Deemed filed 12/26/2012 in case 2:12-cv-1133-RDP](AVC

Case 2:12-cv-01133-RDP Document 194-1 Filed 12/26/12 Page 1 of 1 FILED 2012 2013 Dec-26 Jan-08 PM AM 03:39 11:52 Case TNW/2:12-cv-02359 Document 28 Filed 12/12/12 Page 4 of 4 U.S. DISTRICT COURT N.D. OF ALABAMA IN RE: BLUE CROSS BLUE SHIELD ANTITRUST LITIGATION MDLNo.2406 SCHEDULE A Northern District of Alabama Fred R. Richards, et at. v. Blue Cross and Blue Shield of Alabama, et at., c.A. No. 2:12-01133 One Stop Environmental, LLC, et al. v. Blue Cross and Blue Shield of Alabama, et aI., C.A. No. 2:12-01910 American Electric Motor Services, Inc. v. Blue Cross and Blue Shield of Alabama, et at., C.A. No. 2:12-02169 Chris Bajalieh, et aL v. Blue Cross and Blue Shield of Alabama, et at., c.A. No. 2:12-02185 GC Advertising, LLC, et at. v. Blue Cross and Blue Shield of Alabama, et aI., C.A. No. 2:12-02525 Jerry L. Conway v. Blue Cross and Blue Shield of Alabama, et aI., C.A. No.2: 12-02532 Thomas A. Carder, et ai. v. Blue Cross and Blue Shield of Alabama, et aI., C.A. No. 2:12-02537 Western District of North Carolina Thomas A. Cerven, Jr., et al. v. Blue Cross and Blue Shield of North Carolina. et aI., c.A. No. 5:12-00017 ____. CV-12-P-4169-S Western District of Tennessee Mary Morrissey v. Blue Cross Blue Shield of Tennessee, Inc., C.A. No.2: 12-02359 ~ CV-12-P-4170-S

AMENDED COMPLAINT for Consolidated Subscriber Track Actions against All Defendants, filed by Plaintiffs' Counsel.

10 FILED 2013 Jul-01 PM 05:48 U.S. DISTRICT COURT N.D. OF ALABAMA IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ALABAMA SOUTHERN DIVISION GALACTIC FUNK TOURING, INC.; AMERICAN ELECTRIC MOTOR CLASS ACTION COMPLAINT SERVICES, INC.; CB ROOFING, LLC; LINDA MILLS; FRANK CURTIS; JUDY MDL No. 2406 SHERIDAN; JENNIFER RAY DAVIDSON; LAWRENCE W. COHN, AAL, ALC; JURY TRIAL DEMANDED SACCOCCIO & LOPEZ; MONIKA BHUTA; MICHAEL E. STARK; FALCON PICTURE GROUP LLC; RENEE E. ALLIE; Case No. ________________ JOHN G. THOMPSON; HARRY M. MCCUMBER; GASTON CPA FIRM; JEFFREY S. GARNER; ERIK BARSTOW; GC/AAA FENCES, INC.; KEITH O. CERVEN; TERESA M. CERVEN; SHGI CORP.; KATHLEEN SCHELLER; IRON GATE TECHNOLOGY, INC.; NANCY THOMAS; SHRED 360, LLC; DANNY J. CURLIN; AMEDIUS, LLC; and BRETT WATTS, Plaintiffs, v. BLUE CROSS BLUE SHIELD OF ALABAMA; PREMARA, D/B/A/ PREMARA BLUE CROSS BLUE SHIELD OF ALASKA AND PREMERA BLUE CROSS OF WASHINGTON; BLUE CROSS BLUE SHIELD OF ARIZONA; USABLE MUTUAL INSURANCE COMPANY, D/B/A/ ARKANSAS BLUE CROSS BLUE SHIELD; WELLPOINT, INC., D/B/A/ ANTHEM BLUE CROSS LIFE AND HEALTH INSURANCE COMPANY, BLUE CROSS OF CALIFORNIA, BLUE CROSS OF SOUTHERN CALIFORNIA, BLUE CROSS OF NORTHERN CALIFORNIA, ROCKY MOUNTAIN HOSPITAL AND MEDICAL SERVICE INC. AS ANTHEM BLUE CROSS BLUE SHIELD OF COLORADO AND ANTHEM BLUE CROSS BLUE 10 SHIELD OF NEVADA, ANTHEM BLUE CROSS BLUE SHIELD OF CONNECTICUT, BLUE CROSS BLUE SHIELD OF GEORGIA, ANTHEM BLUE CROSS BLUE SHIELD OF INDIANA, ANTHEM BLUE CROSS BLUE SHIELD OF KENTUCKY, ANTHEM BLUE CROSS BLUE SHIELD OF MAINE, ANTHEM BLUE CROSS BLUE SHIELD OF MISSOURI, RIGHTCHOICE MANAGED CARE, INC., HMO MISSOURI INC., ANTHEM HEALTH PLANS OF NEW HAMPSHIRE AS ANTHEM BLUE CROSS BLUE SHIELD OF NEW HAMPSHIRE, EMPIRE HEALTHCHOICE ASSURANCE, INC. AS EMPIRE BLUE CROSS BLUE SHIELD, COMMUNITY INSURANCE COMPANY AS ANTHEM BLUE CROSS BLUE SHIELD OF OHIO, ANTHEM BLUE CROSS AND BLUE SHIELD OF VIRGINIA, AND ANTHEM BLUE CROSS BLUE SHIELD OF WISCONSIN; CALIFORNIA PHYSICIANS' SERVICE INC., D/B/A BLUE SHIELD OF CALIFORNIA; HIGHMARK HEALTH SERVICES, D/B/A/ HIGHMARK BLUE CROSS BLUE SHIELD OF DELAWARE, HIGHMARK BLUE CROSS BLUE SHIELD, HIGHMARK BLUE SHIELD, AND HIGHMARK BLUE CROSS BLUE SHIELD OF WEST VIRGINIA; CAREFIRST BLUECROSS BLUESHIELD, D/B/A/ GROUP HOSPITALIZATION AND MEDICAL SERVICES AND CAREFIRST BLUE CROSS BLUE SHIELD OF MARYLAND; BLUE CROSS BLUE SHIELD OF FLORIDA; HAWAI'I MEDICAL SERVICE ASSOCIATION D/B/A/ BLUE CROSS AND BLUE SHIELD OF HAWAI'I; BLUE CROSS OF IDAHO HEALTH SERVICE INC.; CAMBIA HEALTH SOLUTIONS, INC., D/B/A/ REGENCE BLUE SHIELD OF IDAHO, REGENCE BLUE CROSS BLUE SHIELD OF OREGON, REGENCE BLUE CROSS BLUE SHIELD OF UTAH, AND REGENCE 10 BLUE SHIELD OF WASHINGTON; HEALTH CARE SERVICE CORPORATION, D/B/A/ BLUE CROSS BLUE SHIELD OF ILLINOIS, BLUE CROSS BLUE SHIELD OF NEW MEXICO, BLUE CROSS BLUE SHIELD OF OKLAHOMA, AND BLUE CROSS BLUE SHIELD OF TEXAS; WELLMARK, INC., D/B/A/ WELLMARK BLUE CROSS BLUE SHIELD OF IOWA AND WELLMARK BLUE CROSS BLUE SHIELD OF SOUTH DAKOTA; BLUE CROSS BLUE SHIELD OF KANSAS; LOUISIANA HEALTH SERVICE AND INDEMNITY COMPANY D/B/A/ BLUE CROSS BLUE SHIELD OF LOUISIANA; BLUE CROSS BLUE SHIELD OF MASSACHUSETTS; BLUE CROSS BLUE SHIELD OF MICHIGAN; BLUE CROSS BLUE SHIELD OF MINNESOTA; BLUE CROSS BLUE SHIELD OF MISSISSIPPI; BLUE CROSS BLUE SHIELD OF KANSAS CITY; BLUE CROSS BLUE SHIELD OF MONTANA; BLUE CROSS BLUE SHIELD OF NEBRASKA; HORIZON BLUE CROSS BLUE SHIELD OF NEW JERSEY; HEALTHNOW NEW YORK INC., D/B/A/ BLUE CROSS BLUE SHIELD OF WESTERN NEW YORK AND BLUE SHIELD OF NORTHEASTERN NEW YORK; EXCELLUS BLUE CROSS BLUE SHIELD; BLUE CROSS BLUE SHIELD OF NORTH CAROLINA; NORIDIAN MUTUAL INSURANCE COMPANY D/B/A/ BLUE CROSS BLUE SHIELD OF NORTH DAKOTA; HOSPITAL SERVICE ASSOCIATION OF NORTHEASTERN PENNSYLVANIA D/B/A/ BLUE CROSS OF NORTHEASTERN PENNSYLVANIA; CAPITAL BLUE CROSS; INDEPENDENCE BLUE CROSS; TRIPLE- S SALUD; BLUE CROSS BLUE SHIELD OF RHODE ISLAND; BLUE CROSS BLUE SHIELD OF SOUTH CAROLINA; BLUE CROSS BLUE SHIELD OF TENNESSEE; BLUE CROSS BLUE SHIELD OF 10 VERMONT; BLUE CROSS BLUE SHIELD OF WYOMING; and BLUE CROSS AND BLUE SHIELD ASSOCIATION, Defendants. SUBSCRIBER TRACK CONSOLIDATED CLASS ACTION COMPLAINT 10 TABLE OF CONTENTS NATURE OF THE CASE 3 JURISDICTION AND VENUE 7 PARTIES 9 Plaintiffs 9 Defendants 13 TRADE AND COMMERCE 54 CLASS ACTION ALLEGATIONS 54 FACTUAL BACKGROUND 62 History of the Blue Cross and Blue Shield Plans and of BCBSA 62 Development of the Blue Cross Plans 62 Development of the Blue Shield Plans 64 Creation of the Blue Cross and Blue Shield Association 65 Allegations Demonstrating Control of BCBSA By Member Plans 68 License Agreements and Restraints on Competition 69 Horizontal Agreements 72 The Horizontal Agreements Not To Compete 74 The Anticompetitive Acquisition Restrictions 81 The BCBSA Licensing Agreements Have Reduced Competition In Regions Across The United States 83 Supra-Competitive Premiums Charged by BCBS Plans 86 The Widespread Use By BCBSA Licensees Of Anticompetitive Most Favored Nation Clauses 86 Individual Blue Plans' Market Power In Relevant Markets 92 Relevant Product Market 92 Relevant Geographic Markets 95 Alabama 95 Arkansas 98 California 100 Florida 104 Hawai'i 106 i 10 Illinois 108 Louisiana 111 Michigan 114 Mississippi 117 Missouri 119 New Hampshire 122 North Carolina 124 Western Pennsylvania 133 Rhode Island 138 South Carolina 140 Tennessee 142 Texas 145 State Insurance Laws Do Not Protect Subscribers from the Market Allocation Scheme 149 VIOLATIONS ALLEGED 152 RELIEF REQUESTED 293 ii 10 Plaintiffs, Galactic Funk Touring, Inc.; American Electric Motor Services, Inc.; CB Roofing, LLC; Linda Mills; Frank Curtis; Judy Sheridan; Jennifer Ray Davidson; Lawrence W. Cohn, AAL, ALC; Saccoccio & Lopez; Monika Bhuta; Michael E. Stark; Falcon Picture Group LLC; Renee E. Allie; John G. Thompson; Harry M. McCumber; Gaston CPA Firm; Jeffrey S. Garner; Erik Barstow; GC/AAA Fences, Inc.; Keith O. Cerven; Teresa M. Cerven; SHGI Corp.; Kathleen Scheller; Iron Gate Technology, Inc.; Nancy Thomas; Shred 360, LLC; Danny J. Curlin; Amedius, LLC; and Brett Watts, on behalf of themselves and all others similarly situated, for their Complaint against Defendants Blue Cross Blue Shield of Alabama ("BCBS-AL"); Premera, d/b/a/ Premera Blue Cross Blue Shield of Alaska ("BCBS-AK") and Premera Blue Cross of Washington ("BC-WA"); Blue Cross Blue Shield of Arizona ("BCBS-AZ"); USAble Mutual Insurance Company, d/b/a/ Arkansas Blue Cross Blue Shield ("BCBS-AR"); WellPoint, Inc., d/b/a/ Anthem Blue Cross Life and Health Insurance Company and Blue Cross of California as well as Blue Cross of Southern California and Blue Cross of Northern California (together, "BC-CA"), Rocky Mountain Hospital & Medical Service Inc. as Anthem Blue Cross Blue Shield of Colorado ("BCBS-CO") and Anthem Blue Cross Blue Shield of Nevada ("BCBS-NV"), Anthem Blue Cross Blue Shield of Connecticut ("BCBS-CT"), Blue Cross Blue Shield of Georgia ("BCBS-GA"), Anthem Blue Cross Blue Shield of Indiana ("BCBS-IN"), Anthem Blue Cross Blue Shield of Kentucky ("BCBS-KY"), Anthem Blue Cross Blue Shield of Maine ("BCBS-ME"), Anthem Blue Cross Blue Shield of Missouri as well as RightCHOICE Managed Care, Inc. and HMO Missouri Inc. ("BCBS-MO"), Anthem Health Plans of New Hampshire as Anthem Blue Cross Blue Shield of New Hampshire ("BCBS-NH"), Empire HealthChoice Assurance, Inc. as Empire Blue Cross Blue Shield ("Empire BCBS"), Community Insurance Company as Anthem Blue Cross Blue Shield of Ohio ("BCBS-OH"), Anthem Blue Cross and 1 10 Blue Shield of Virginia ("BCBS-VA"), and Anthem Blue Cross Blue Shield of Wisconsin ("BCBS-WI"); California Physicians' Service Inc., d/b/a Blue Shield of California ("BS-CA"); Highmark Health Services, d/b/a/ Highmark Blue Cross Blue Shield of Delaware ("BCBS-DE"), Highmark Blue Cross Blue Shield and Highmark Blue Shield ("Highmark BCBS"), and Highmark Blue Cross Blue Shield of West Virginia ("BCBS-WV"); CareFirst BlueCross BlueShield, d/b/a/ Group Hospitalization and Medical Services ("BCBS-DC") and Carefirst Blue Cross Blue Shield of Maryland ("BCBS-MD"); Blue Cross Blue Shield of Florida ("BCBS-FL"); Hawai'i Medical Service Association d/b/a/ Blue Cross and Blue Shield of Hawai'i ("BCBS- HI"); Blue Cross of Idaho Health Service Inc. ("BC-ID"); Cambia Health Solutions, Inc., d/b/a/ Regence Blue Shield of Idaho ("BS-ID"), Regence Blue Cross Blue Shield of Oregon ("BCBS- OR"), Regence Blue Cross Blue Shield of Utah ("BCBS-UT"), and Regence Blue Shield of Washington ("BS-WA"); Health Care Service Corporation, d/b/a/ Blue Cross Blue Shield of Illinois ("BCBS-IL"), Blue Cross Blue Shield of New Mexico ("BCBS-NM"), Blue Cross Blue Shield of Oklahoma as well as GHS Property and Casualty Insurance Company and GHS Health Maintenance Organization ("BCBS-OK"), Blue Cross Blue Shield of Texas ("BCBS-TX"); Wellmark, Inc. d/b/a/ Wellmark Blue Cross Blue Shield of Iowa ("BCBS-IA") and Wellmark Blue Cross Blue Shield of South Dakota ("BCBS-SD"); Blue Cross Blue Shield of Kansas ("BCBS-KS"); Louisiana Health Service & Indemnity Company d/b/a/ Blue Cross Blue Shield of Louisiana ("BCBS-LA"); Blue Cross Blue Shield of Massachusetts ("BCBS-MA"); Blue Cross Blue Shield of Michigan ("BCBS-MI"); Blue Cross Blue Shield of Minnesota ("BCBS- MN"); Blue Cross Blue Shield of Mississippi ("BCBS-MS"); Blue Cross Blue Shield of Kansas City ("BCBS-KC"); Blue Cross Blue Shield of Montana ("BCBS-MT"); Blue Cross Blue Shield of Nebraska ("BCBS-NE"); Horizon Blue Cross Blue Shield of New Jersey ("BCBS-NJ"); 2 10 HealthNow New York, Inc., d/b/a/ Blue Cross Blue Shield of Western New York ("BCBS- Western NY") and Blue Shield of Northeastern New York ("BS-Northeastern NY"); Excellus Blue Cross Blue Shield ("Excellus BCBS"); Blue Cross Blue Shield of North Carolina ("BCBS- NC"); Noridian Mutual Insurance Company d/b/a/ Blue Cross Blue Shield of North Dakota ("BCBS-ND"); Hospital Service Association of Northeastern Pennsylvania d/b/a/ Blue Cross of Northeastern Pennsylvania ("BC-Northeastern PA"); Capital Blue Cross ("Capital BC"); Independence Blue Cross ("Independence BC"); Triple S-Salud ("BCBS-Puerto Rico"); Blue Cross Blue Shield of Rhode Island ("BCBS-RI"); Blue Cross Blue Shield of South Carolina ("BCBS-SC"); Blue Cross Blue Shield of Tennessee ("BCBS-TN"); Blue Cross Blue Shield of Vermont ("BCBS-VT"); and Blue Cross Blue Shield of Wyoming ("BCBS-WY") (collectively, the "Individual Blue Plans"); and the Blue Cross and Blue Shield Association ("BCBSA"), allege as follows: NATURE OF THE CASE 1. The Supreme Court has repeatedly stated: "Collusion is the supreme evil of antitrust." F.T.C. v. Actavis, Inc., --- S. Ct. ----, 2013 WL 2922122, at *13 (June 17, 2013). The Supreme Court has also explained the types of collusion long condemned by the antitrust laws: "Certain agreements, such as horizontal price fixing and market allocation, are thought so inherently anticompetitive that each is illegal per se without inquiry into the harm it has actually caused." Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752, 768 (1984). These prohibitions on per se illegal conduct are at the core of antitrust law's protection of our free enterprise system. As Robert Bork has explained about "the doctrine of per se illegality. . . (e.g., price fixing and market division)": "Its contributions to consumer welfare over the decades have been enormous." Robert H. Bork, The Antitrust Paradox 263 (rev. ed. 1993). 3 10 2. This is a class action brought on behalf of subscribers of the Individual Blue Plans to enjoin an ongoing conspiracy between and among the Individual Blue Plans and BCBSA to allocate markets in violation of the prohibitions of the Sherman Act. In addition, this action seeks to recover damages for classes of subscribers in the form of supra-competitive premiums that the Individual Blue Plans have charged – and lower competitive premiums that non- competing Blue plans have not charged – as a result of this illegal conspiracy. This action also seeks these damages as a result of anticompetitive conduct the Individual Blue Plans have taken in their illegal efforts to establish and maintain monopoly power throughout the regions in which they operate. This action also asserts related claims under the laws of the following states: Arkansas, California, Florida, Hawai'i, Illinois, Louisiana, Michigan, Mississippi, Missouri, New Hampshire, North Carolina, Rhode Island, South Carolina, Tennessee, and Texas. 3. The Antitrust Division of the Department of Justice defines per se illegal market division as follows: "Market division or allocation schemes are agreements in which competitors divide markets among themselves. In such schemes, competing firms allocate specific customers or types of customers, products, or territories among themselves. For example, one competitor will be allowed to sell to, or bid on contracts let by, certain customers or types of customers. In return, he or she will not sell to, or bid on contracts let by, customers allocated to the other competitors. In other schemes, competitors agree to sell only to customers in certain geographic areas and refuse to sell to, or quote intentionally high prices to, customers in geographic areas allocated to conspirator companies." 4. Defendants are engaging in and have engaged in per se illegal market division. These market allocation agreements are reached and implemented in part through the Blue Cross and Blue Shield license agreements between each of the Individual Blue Plans and BCBSA, an 4 10 association owned and controlled by all of the Individual Blue Plans, as well as the BCBSA Membership Standards and Guidelines. In part through the artifice of the Plan owned and controlled BCBSA, an entity that the Individual Blue Plans created and wholly control, Defendants have engaged in prohibited market allocation by entering into per se illegal agreements under the federal antitrust laws that: a. Prohibit the Individual Blue Plans from competing against each other using the Blue name by allocating territories among the individual Blues; b. Limit the Individual Blue Plans from competing against each other, even when they are not using the Blue name, by mandating the percentage of their business that they must do under the Blue name, both inside and outside each Plan's territory; and/or c. Restrict the right of any Individual Blue Plan to be sold to a company that is not a member of BCBSA, thereby preventing new entrants into the individual Blues' markets. 5. An Individual Blue Plan that violates one or more of these restrictions faces license and membership termination from BCBSA, which would mean both the loss of the brand through which it derives the majority of its revenue and the required payment of a large fee to BCBSA that would help to fund the establishment of a competing health insurer. 6. These territorial limitations among actual or potential competitors (i.e. horizontal parties) severely limit the ability of the Individual Blue Plans to compete outside of their geographic areas, even under their non-Blue brands. 7. Many of the Individual Blue Plans have developed substantial non-Blue brands that could compete with other of the Individual Blue Plans. But for the illegal agreements not to 5 10 compete with one another, these entities could and would use their Blue brands and non-Blue brands to compete with each other throughout their Service Areas, which would result in greater competition and competitively priced premiums for subscribers. 8. The Individual Blue Plans enjoy remarkable market dominance in regions throughout the United States. The Blue Plans agreed to entrench and perpetuate the dominant market position that each of them has historically enjoyed in its specifically defined geographic market ("Service Area"), insulating the Individual Blue Plans from competition in each of their respective service areas. Their dominant market shares are the direct result of the illegal conspiracy to unlawfully divide and allocate the geographic markets for health insurance in the United States. This series of agreements has enabled many Individual Blue Plans, including Defendants in this case, to acquire and maintain grossly disproportionate market shares for health insurance products in their respective regions, where these Plans enjoy market and monopoly power. 9. The Individual Blue Plans' anticompetitive conduct has also resulted in higher premiums for their enrollees for over a decade. This anticompetitive behavior, and the lack of competition the Individual Blue Plans face because of their market allocation scheme and monopoly power and anticompetitive behavior, have prevented subscribers from being offered competitive prices and have caused supra-competitive premiums charged to Plan customers. 10. These inflated premiums would not be possible if the market for health insurance in these Individual Blue Plans' Service Areas were truly competitive. Competition is not possible so long as the Individual Blue Plans and BCBSA are permitted to enter into agreements that have the actual and intended effect of restricting the ability of thirty-seven of the nation's largest health insurance companies from competing with each other. 6 10 JURISDICTION AND VENUE 11. This Court, and the federal district courts in which the subscriber track cases were originally filed, have federal question jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1337(a) because Plaintiffs bring their claims under Sections 4 and 16 of the Clayton Act, 15 U.S.C. §§ 15 and 26, to recover treble damages and costs of suit, including reasonable attorneys' fees, against the Individual Blue Plans and BCBSA for the injuries sustained by Plaintiffs and the Classes by reason of the violations, as hereinafter alleged, of §§ 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1 and 2. 12. This Court, and the federal district courts in which the subscriber track cases were originally filed, also have pendant ancillary jurisdiction over the state claims asserted herein under California Business and Professions Code § 17200 and the Cartwright Act, California Business and Professions Code §§16720, et seq., and 16727; Fla. Stat. §§ 542.18, 542.19, and 542.22; 740 ILCS 10/3 et seq.; La.R.S. 51:122-23; Michigan Antitrust Reform Act §§ 445.772, 445.773; Mississippi Antitrust Act, Sec. 75-21-1; Missouri Antitrust Law §§ 416.031.1, 416.031.2; N.H. Rev. Stat. Ann. §§ 356:2, 356:3; North Carolina General Statute Sections 75-1, 75-1.1, and 58-63-10; Rhode Island General Laws §§ 6-36-4, 6-36-5; Tennessee Trade Practices Act, Sec. 47-25-101; and Tex. Bus. & Com. Code Ann. §§ 15.05(a), 15.05(b), and 15.21; pursuant to 28 U.S.C. § 1337(a). 13. This action is also instituted to secure injunctive relief against BCBSA and the Individual Blue Plans to prevent them from further violations of Sections 1 and 2 of the Sherman Act as hereinafter alleged. 7 10 14. Venue is proper in this district and the districts in which these subscriber track cases were originally filed, pursuant to Sections 4, 12, and 16 of the Clayton Act, 15 U.S.C. §§ 15, 22, and 26, and 28 U.S.C. § 1391. 15. All Plaintiffs note that they do not waive their rights under Lexecon, Inc. v. Milberg Weiss Bershad Hynes & Lerech, 523 U.S. 26 (1998). 8 10 PARTIES Plaintiffs 1. Plaintiff American Electric Motor Services, Inc. is an Alabama corporation with its principal office located at 2012 1st Avenue North, Irondale, AL 35210. Plaintiff American Electric Motor Services, Inc. has purchased BCBS-AL health insurance to cover its 4 employees during the relevant class period. 2. Plaintiff CB Roofing, LLC is an Alabama corporation with its principal office located in Chelsea, AL. Plaintiff CB Roofing, LLC has purchased BCBS-AL health insurance to cover its employees during the relevant class period. 3. Plaintiff Linda Mills is a resident citizen of Judsonia, White County, Arkansas. She has been enrolled in an individual BCBS-AR health insurance policy since approximately 1997. 4. Plaintiff Frank Curtis is a resident citizen of Arkansas. He has purchased BCBS-AR health insurance to cover himself and his family members during the relevant class period. 5. Plaintiff Judy Sheridan is a resident citizen of Los Angeles, California. She has purchased an individual health insurance policy from BC-CA during the relevant class period. The policy contract or agreement between Plaintiff Sheridan and BC-CA contains an arbitration provision. Plaintiff Sheridan does not believe that this arbitration provision can or would govern the claims brought in this lawsuit. Nevertheless, for the purposes of this Complaint, Plaintiff Sheridan expressly only brings suit against those Defendants that are not parties to the arbitration provision in her policy contract or agreement, i.e., BCBSA and all the Individual Blue Plans except for BC-CA. 9 10 6. Plaintiff Jennifer Ray Davidson is a resident citizen of Lynn Haven, Bay County, Florida. She has been enrolled in an individual BCBS-FL health insurance policy during the relevant class period. 7. Plaintiff Lawrence W. Cohn, AAL, ALC is a Hawai'i business that has purchased BCBS-HI health insurance to cover its employees during the relevant class period. 8. Plaintiff Saccoccio & Lopez is a Hawai'i business with its principal office located at 66-037 Kamehameha Highway, Suite 3, Haleiwa, HI 96712. Plaintiff Saccoccio & Lopez has purchased BCBS-HI health insurance to cover its 3 employees since around 2000. 9. Plaintiff Monika Bhuta is a resident citizen of Chicago, IL. She has been enrolled in an individual BCBS-IL health insurance policy during the relevant class period. 10. Plaintiff Michael E. Stark is a resident citizen of Illinois. He has been enrolled in an individual BCBS-IL health insurance policy since April 1, 2005. 11. Plaintiff Falcon Picture Group LLC is an Illinois corporation with its principle office located at 1051 E. Main Street, Suite 105, East Dundee, IL 60118. Plaintiff Falcon Picture Group LLC has purchased BCBS-IL health insurance to cover its 5 employees since 2001. 12. Plaintiff Renee E. Allie is a resident citizen of New Orleans, Louisiana. She has been enrolled in an individual BCBS-LA health insurance policy since October 15, 2008. 13. Plaintiff Galactic Funk Touring, Inc. is a Louisiana corporation with its principal office located at 1020 Franklin Avenue, New Orleans, LA 70117. Plaintiff Galactic Funk Touring, Inc. has purchased BCBS-LA health insurance to cover its employees since November 15, 2008. 10 10 14. Plaintiff John G. Thompson is a resident citizen of Clark Township, Mackinac County, Michigan. He was enrolled in an individual BCBS-MI health insurance policy for 35 years, including during the relevant class period. 15. Plaintiff Harry M. McCumber is a resident citizen of Hinds County, Mississippi. He has been enrolled in an individual BCBS-MS health insurance policy during the relevant class period. 16. Plaintiff Gaston CPA Firm is a Mississippi corporation with its principal office located in Coahoma County, MS. Plaintiff Gaston CPA Firm has purchased BCBS-MS health insurance to cover its employees during the relevant class period. 17. Plaintiff Jeffrey S. Garner is a resident citizen of St. Charles County, Missouri. He has been enrolled in BCBS-MO health plans almost continuously since 2001, including in an individual BCBS-MO health insurance policy since 2011. 18. Plaintiff Erik Barstow is a resident citizen of Portsmouth, Rockingham County, New Hampshire. He has been enrolled in an individual BCBS-NH health insurance policy since January 2012. 19. Plaintiff GC/AAA Fences, Inc. is a New Hampshire corporation with its principal office located at 292 Durham Road, Dover, NH 03820. Plaintiff GC/AAA Fences, Inc. has purchased BCBS-NH health insurance to cover its employees since 2009. 20. Plaintiff Keith O. Cerven is a resident citizen of Mooresville, NC. He has been enrolled in an individual BCBS-NC health insurance policy since 2007. 21. Plaintiff Teresa M. Cerven is a resident citizen of Mooresville, NC. She has purchased BCBS-NC health insurance to cover herself and her children since 2007. 11 10 22. Plaintiff SHGI Corp. is a North Carolina corporation with its principal office located at 122 Lyman Street, Building #1, Asheville, NC 28801. Plaintiff SHGI Corp. has purchased BCBS-NC health insurance to cover its employees since January 1, 2006. 23. Plaintiff Kathleen Scheller is a resident citizen of Valencia, Pennsylvania. She has been enrolled in an individual Highmark BCBS health insurance policy since 1996. 24. Plaintiff Iron Gate Technology, Inc. is a Western Pennsylvania corporation with its principal office located at The Cardello Building, 1501 Reedsdale Street, Suite 107, Pittsburgh, PA 15233. Plaintiff Iron Gate Technology, Inc. has purchased Highmark BCBS health insurance to cover its 3 employees since January 2012. 25. Plaintiff Nancy Thomas is a resident citizen of Cranston, Rhode Island. She has been enrolled in an individual BCBS-RI health insurance policy since October 2011. 26. Plaintiff Shred 360, LLC is a South Carolina corporation with its principal office located at 7001 St. Andrews Road, Columbia, South Carolina. Plaintiff Shred 360, LLC has purchased individual BCBS-SC health insurance to cover some of its employees, and has paid fifty percent of these monthly premium payments, through September 2011. 27. Plaintiff Danny J. Curlin is a resident citizen of Memphis, Shelby County, Tennessee. He has been enrolled in an individual BCBS-TN health insurance policy since approximately 2007. 28. Plaintiff Amedius, LLC is a Tennessee corporation with its principal office located at 890 Willow Tree Circle, Cordova, TN 38018. Plaintiff Amedius, LLC has purchased BCBS-TN health insurance to cover its employees since 2005. 29. Plaintiff Brett Watts is a resident citizen of Dallas County, Texas. He has been enrolled in an individual BCBS-TX health insurance policy during the relevant class period. 12 10 30. All Plaintiffs other than Plaintiff Judy Sheridan are unaware of any arbitration provision in their contracts or agreements with the Individual Blue Plans. Defendants 31. Defendant BCBSA is a corporation organized under the state of Illinois and headquartered in Chicago, Illinois. It is owned and controlled by thirty-eight (38) health insurance plans that operate under the Blue Cross and Blue Shield trademarks and trade names. BCBSA was created by these plans and operates as a licensor for these plans. Health insurance plans operating under the Blue Cross and Blue Shield trademarks and trade names provide health insurance coverage for approximately 100 million – or one in three – Americans. A BCBS licensee is the largest health insurer, as measured by number of subscribers, in forty-four (44) states. 32. The principal headquarters for BCBSA is located at 225 North Michigan Avenue, Chicago, IL 60601. 33. BCBSA has contacts with all 50 States, the District of Columbia, and Puerto Rico by virtue of its agreements and contacts with the Individual Blue Plans. In particular, BCBSA has entered into a series of license agreements with the Individual Blue Plans that control the geographic areas in which the Individual Blue Plans can operate. These agreements are a subject of this Complaint. 34. Defendant BCBS-AL is the health insurance plan operating under the Blue Cross and Blue Shield trademarks and trade names in the state of Alabama. Like many other Blue Cross and Blue Shield plans nationwide, BCBS-AL is the largest health insurer, as measured by number of subscribers, within its service area, which is defined as the state of Alabama. 13 10 35. The principal headquarters for BCBS-AL is located at 450 Riverchase Parkway East, Birmingham, AL 35244. BCBS-AL does business in each county in the state of Alabama. 36. BCBS-AL is by far the largest health insurance company operating in Alabama and currently exercises market power in the commercial health insurance market throughout Alabama. As of 2008, at least 93 percent of the Alabama residents who subscribe to full-service commercial health insurance (whether through group plans or through individual policies) are subscribers of BCBS-AL. As of 2011, BCBS-AL maintained 86 percent market share in the individual market, and 96 percent market share in the small group market. Two recent studies concluded that Alabama has the least competitive health insurance market in the country. Alabama's Department of Insurance Commissioner has recognized that "the state's heath insurance market has been in a non-competitive posture for many years." 37. As the dominant player in Alabama, BCBS-AL has led the way in causing premiums to be increased each year. From 2006 to 2010, BCBS-AL small group policy premiums rose 28 percent from 2006 to 2010 per member per month. In 2010, BCBS-AL raised some premiums by as much as 17 percent and others by as much as 21 percent. The National Association of Insurance Commissioners reports that BCBS-AL's premiums increased almost 42 percent over the past several years. As a result of these and other inflated premiums, between 2001 and 2009, BCBS-AL increased its surplus from $433.7 million to $649 million. In 2011, BCBS-AL reported net income of $256.92 million, 58 percent higher than the previous year, resulting in a profit of almost $94 million for FY 2011. From 2000 to 2009, the average employer-sponsored health insurance premium for families in Alabama increased by approximately 88.7 percent, whereas median earnings rose only 22.4 percent during that same period. 14 10 38. Defendant BCBS-AK is the health insurance plan operating under the Blue Cross and Blue Shield trademarks and tradenames in Alaska. Like many other Blue Cross and Blue Shield plans nationwide, BCBS-AK is the largest health insurer, as measured by number of subscribers, within its service area, which is defined as the state of Alaska. 39. The principal headquarters for BCBS-AK is located at 2550 Denali Street, Suite 1404, Anchorage, AK 99503. BCBS-AK does business in each county in Alaska. 40. BCBS-AK currently exercises market power in the commercial health insurance market throughout Alaska. As of 2010, approximately 60 percent of the Alaska residents who subscribe to full-service commercial health insurance (whether through group plans or through individual policies) are subscribers of BCBS-AK – vastly more than are subscribers of the next largest commercial insurer operating in Alaska, Aetna, which carries approximately 30 percent of such subscribers. As of 2011, BCBS-AK held at least a 58 percent share of the individual full-service commercial health insurance market and at least a 72 percent share of the small group full-service commercial health insurance market. 41. As the dominant insurer in Alaska, BCBS-AK has led the way in causing supra- competitive prices. From 2000 to 2007, median insurance premiums in Alaska increased nearly 74 percent while median income increased only 13 percent. Thus, health insurance premiums increased nearly six times faster than income in Alaska during that period. In 2011 alone, BCBS-AK reported reserves of more than $1 billion. 42. Defendant BCBS-AR is the health insurance plan operating under the Blue Cross and Blue Shield trademarks and trade names in Arkansas. Like many other Blue Cross and Blue Shield plans nationwide, BCBS-AR is the largest health insurer, as measured by number of subscribers, within its service area, which is defined as the state of Arkansas. 15 10 43. The principal headquarters for BCBS-AR is located at 601 S. Gaines Street, Little Rock, Arkansas, 72201. BCBS-AR does business in each county in Arkansas. 44. BCBS-AR currently exercises market power in the commercial health insurance market throughout Arkansas. As of 2010, at least 78 percent of the Arkansas residents who subscribe to full-service individual commercial health insurance and at least 55 percent of the Arkansas residents who subscribe to small group policies are subscribers of BCBS-AR – vastly more than are subscribers of the next largest commercial insurer operating in Arkansas, which carries only 7 percent of individual subscribers and 19 percent of small group subscribers. 45. As the dominant insurer in Arkansas, BCBS-AR has led the way in causing premiums to be increased each year. As a result, from 2007 to 2011, BCBS-AR's net income increased by 64 percent, while its membership remained relatively flat, growing by only 5 percent; as of 2011, it increased its surplus to a stunning $581.7 million. 46. Defendant BCBS-AZ is the health insurance plan operating under the Blue Cross and Blue Shield trademarks and trade names in Arizona. Like many other Blue Cross and Blue Shield plans nationwide, BCBS-AZ is the largest health insurer, as measured by number of subscribers, within its service area, which is defined as the state of Arizona. 47. The principal headquarters for BCBS-AZ is located at 2444 West Las Palmaritas Drive, Phoenix, AZ 85021. BCBS-AZ does business in each county in Arizona. 48. BCBS-AZ currently exercises market power in the commercial health insurance market throughout Arizona. As of 2011, at least 49 percent of the Arizona residents who subscribe to full-service individual commercial health insurance and at least 26 percent of the Arizona residents who subscribe to small group policies are subscribers of BCBS-AZ. 16 10 49. As the dominant insurer in Arizona, BCBS-AZ has led the way in causing supra- competitive prices. As a result, by 2010, BCBS-AZ held surpluses in excess of $570 million. 50. Defendant BC-CA is the health insurance plan operating under the Blue Cross trademark and tradename in California. Like many other Blue Cross and Blue Shield plans nationwide, BC-CA is the largest health insurer, as measured by number of subscribers, within its service area, which is defined as the state of California. 51. The principal headquarters for BC-CA is located at One Wellpoint Way, Thousand Oaks, CA 91362. BC-CA does business in each county in California. 52. Defendant BS-CA is the health insurance plan operating under the Blue Shield trademark and tradename in California. Like many other Blue Cross and Blue Shield plans nationwide, BS-CA is one of the largest health insurers, as measured by number of subscribers, within its service area, which is defined as the state of California. 53. The principal headquarters for BS-CA is located at 50 Beale Street, San Francisco, CA 94105-1808. BS-CA does business in each county in California. 54. BC-CA, together with BS-CA, currently exercises market power in the relevant commercial health insurance markets throughout California. As of 2010, at least 29 percent of the California residents who subscribe to full-service commercial health insurance are BC-CA subscribers alone; as of 2011, at least 37 percent of the California residents who subscribe to individual full-service commercial health insurance and at least 15 percent of the California residents who subscribe to small group full-service commercial health insurance are BC-CA subscribers alone. 17 10 55. As the dominant insurers in California, BC-CA and BS-CA have led the way in causing supra-competitive prices. As one result, by 2010, BS-CA alone held surpluses in excess of $2.2 billion. 56. Defendant BCBS-CO is the health insurance plan operating under the Blue Cross and Blue Shield trademarks and trade names in Colorado. Like other Blue Cross and Blue Shield plans nationwide, BCBS-CO is the largest health insurer, as measured by number of subscribers, within its service area, which is defined as the state of Colorado. 57. The principal headquarters for BCBS-CO is located at 120 Monument Circle, Indianapolis, IN 46204. BCBS-CO does business in each county in Colorado. 58. BCBS-CO currently exercises market power in the commercial health insurance market throughout Colorado. As of 2010, at least 22 percent of the Colorado residents who subscribe to full-service commercial health insurance are subscribers of BCBS-CO. 59. As the dominant insurer in Colorado, BCBS-CO has led the way in causing supra- competitive prices. 60. Defendant BCBS-CT is the health insurance plan operating under the Blue Cross and Blue Shield trademarks and trade names in Connecticut. Like other Blue Cross and Blue Shield plans nationwide, BCBS-CT is the largest health insurer, as measured by number of subscribers, within its service area, which is defined as the state of Connecticut. 61. The principal headquarters for BCBS-CT is located at 370 Bassett Road, North Haven, CT 06473. BCBS-CT does business in each county in Connecticut. 62. BCBS-CT currently exercises market power in the commercial health insurance market throughout Connecticut. As of 2011, at least 48 percent of the Connecticut residents who 18 10 subscribe to full-service individual commercial health insurance and at least 31 percent of the Connecticut residents who subscribe to small group policies are subscribers of BCBS-CT. 63. As the dominant insurer in Connecticut, BCBS-CT has led the way in causing supra-competitive prices. 64. Defendant BCBS-DE is the health insurance plan operating under the Blue Cross and Blue Shield trademarks and trade names in Delaware. Like other Blue Cross and Blue Shield plans nationwide, BCBS-DE is the largest health insurer, as measured by number of subscribers, within its service area, which is defined as the state of Delaware. 65. The principal headquarters for BCBS-DE is located at 800 Delaware Avenue, Wilmington, DE 19801. BCBS-DE does business in each county in Delaware. 66. BCBS-DE currently exercises market power in the commercial health insurance market throughout Delaware. As of 2011, at least 51 percent of the Delaware residents who subscribe to full-service individual commercial health insurance and at least 61 percent of the Delaware residents who subscribe to small group policies are subscribers of BCBS-DE. 67. As the dominant insurer in Delaware, BCBS-DE has led the way in causing supra- competitive prices. As a result, by mid-2011, it had built a surplus of over $180 million, an increase of 48 percent since the end of 2008. 68. Defendant BCBS-FL is the health insurance plan operating under the Blue Cross and Blue Shield trademarks and trade names in Florida. Like other Blue Cross and Blue Shield plans nationwide, BCBS-FL is the largest health insurer, as measured by number of subscribers, within its service area, which is defined as the state of Florida. 69. The principal headquarters for BCBS-FL is located at 4800 Deerwood Campus Parkway, Jacksonville, FL 32246. BCBS-FL does business in each county in Florida. 19 10 70. BCBS-FL currently exercises market power in the commercial health insurance market throughout Florida. As of 2010, at least 31 percent of the Florida residents who subscribe to full-service commercial health insurance (whether through group plans or through individual policies), and as much as 83 percent of those residents in certain regions of the state, are subscribers of BCBS-FL. As of 2011, at least 48 percent of the Florida residents who subscribe to individual full-service commercial health insurance and at least 28 percent of the Florida residents who subscribe to small group full-service commercial health insurance are BCBS-FL subscribers. 71. As the dominant insurer in Florida, BCBS-FL has led the way in causing supra- competitive prices. 72. Defendant BCBS-GA is the health insurance plan operating under the Blue Cross and Blue Shield trademarks and trade names in Georgia. Like other Blue Cross and Blue Shield plans nationwide, BCBS-GA is the largest health insurer, as measured by number of subscribers, within its service area, which is defined as the state of Georgia. 73. The principal headquarters for BCBS-GA is located at 3350 Peachtree Road NE, Atlanta, GA 30326. BCBS-GA does business in each county in Georgia. 74. BCBS-GA currently exercises market power in the commercial health insurance market throughout Arizona. As of 2011, at least 48 percent of the Georgia residents who subscribe to full-service individual commercial health insurance and at least 41 percent of the Georgia residents who subscribe to small group policies are subscribers of BCBS-GA. 75. As the dominant insurer in Georgia, BCBS-GA has led the way in causing supra- competitive prices. 20 10 76. Defendant BCBS-HI is the health insurance plan operating under the Blue Cross and Blue Shield trademarks and trade names in Hawai'i. Like other Blue Cross and Blue Shield plans nationwide, BCBS-HI is the largest health insurer, as measured by number of subscribers, within its service area, which is defined as the state of Hawai'i. 77. The principal headquarters for BCBS-HI is located at 818 Keeaumoku Street, Honolulu, HI 96814. BCBS-HI does business in each county in Hawai'i. 78. BCBS-HI currently exercises market power in the commercial health insurance market throughout Hawai'i. As of 2010, at least 69 percent of the Hawai'i residents who subscribe to full-service commercial health insurance (whether through group plans or through individual policies) are subscribers of BCBS-HI – vastly more than are subscribers of the next largest commercial insurer operating in Hawai'i, Kaiser Permanente, which carries only 20 percent of such subscribers. A 2012 study by the American Medical Association found that Hawai'i had the second-least competitive commercial health-insurance market in the country. 79. As the dominant insurer in Hawai'i, BCBS-HI has led the way in causing supra- competitive prices. In 2008, for example, BCBS-HI raised its premiums for its Preferred Provider and HPH Plus plans 9.9% and 11.5%, respectively; from 2003 to 2011 individual and family insurance premiums in Hawai'i increased, on average, 61% and 74%, respectively, while median household income in Hawai'i has failed to keep pace with those increases, rising only 16% for individuals and falling 1% for families during the same period. As a result of these and other inflated premiums, BCBS-Hawai'i has increased its profits to the point where it holds reserves in the amount of approximately $400 million. 80. Defendant BC-ID is the health insurance plan operating under the Blue Cross trademark and trade name in Idaho. Like other Blue Cross and Blue Shield plans nationwide, 21 10 BC-ID is the largest health insurer, as measured by number of subscribers, within its service area, which is defined as the state of Idaho. 81. The principal headquarters for BC-ID is located at 3000 East Pine Avenue, Meridian, ID 83642. BC-ID does business in each county in Idaho. 82. BC-ID, together with BS-ID, currently exercises market power in the commercial health insurance market throughout Idaho. As of 2010, at least 47 percent of the Idaho residents who subscribe to full-service commercial health insurance, including (as of 2011), 44 percent of those who subscribe to individual products and at least 48 percent of those who subscribe to small group products, are subscribers of BC-ID. 83. Defendant BS-ID is the health insurance plan operating under the Blue Shield trademark and trade name in Idaho. Like other Blue Cross and Blue Shield plans nationwide, BS-ID is one of the largest health insurers, as measured by number of subscribers, within its service area, which is defined as the state of Idaho. 84. The principal headquarters for BS-ID is located at 1602 21st Ave, Lewiston, ID 83501. BS-ID does business in each county in Idaho. 85. As the dominant insurers in Idaho, BC-ID and BS-ID have led the way in causing supra-competitive prices. As a result of these inflated premiums, as of 2010, BC-ID had more than $415.5 million in capital and surplus. 86. Defendant BCBS-IA is the health insurance plan operating under the Blue Cross and Blue Shield trademarks and trade names in Iowa. Like other Blue Cross and Blue Shield plans nationwide, BCBS-IA is the largest health insurer, as measured by number of subscribers, within its service area, which is defined as the state of Iowa. 22 10 87. The principal headquarters for BCBS-IA is located at 1331 Grand Avenue, Des Moines, IA 50306. BCBS-IA does business in each county in Iowa. 88. BCBS-IA currently exercises market power in the commercial health insurance market throughout Iowa. As of 2011, at least 83 percent of the Iowa residents who subscribe to full-service individual commercial health insurance and at least 61 percent of the Iowa residents who subscribe to small group policies are subscribers of BCBS-IA. 89. As the dominant insurer in Iowa, BCBS-IA has led the way in causing supra- competitive prices. Each year from 2002 to 2012, Iowans' premiums have increased an average rate of 10 percent annually, leaving BCBS-IA's parent company, Wellmark, with a surplus of over $1 billion. 90. Defendant BCBS-IL is the health insurance plan operating under the Blue Cross and Blue Shield trademarks and trade names in Illinois. Like other Blue Cross and Blue Shield plans nationwide, BCBS-IL is the largest health insurer, as measured by number of subscribers, within its service area, which is defined as the state of Illinois. 91. The principal headquarters for BCBS-IL is located at 300 E. Randolph Street, Chicago, IL 60601. BCBS-IL does business in each county in Illinois. 92. BCBS-IL currently exercises market power in the commercial health insurance market throughout Illinois. As of 2010, at least 55 percent of the Illinois residents who subscribe to full-service commercial health insurance for small groups and at least 65 percent of the Illinois residents who subscribe to full-service commercial health insurance for individuals are subscribers of BCBS-IL – vastly more than are subscribers of the next largest commercial insurer operating in Illinois, United Healthcare, which carries only 12 percent of Illinois residents who subscribe to full-service commercial health insurance. 23 10 93. As the dominant insurer in Illinois, BCBS-IL has led the way in causing supra- competitive prices. BCBS-IL raised premiums 10.2 percent in 2007, 18 percent in 2008, and 8.4 percent in 2009, for some customers. As a result of these and other inflated premiums, HCSC, which owns BCBS-IL, grew its surplus from $6.1 billion in 2007 to $6.7 billion in 2009, up from $4.3 billion just four years earlier in 2005. The company's surplus is five times the minimum required for solvency protection. 94. Defendant BCBS-IN is the health insurance plan operating under the Blue Cross and Blue Shield trademarks and trade names in Indiana. Like other Blue Cross and Blue Shield plans nationwide, BCBS-IN is the largest health insurer, as measured by number of subscribers, within its service area, which is defined as the state of Indiana. 95. The principal headquarters for BCBS-IN is located at 120 Monument Circle, Indianapolis, IN 46204. BCBS-IN does business in each county in Indiana. 96. BCBS-IN currently exercises market power in the commercial health insurance market throughout Indiana. As of 2010, at least 56 percent of the Indiana residents who subscribe to full-service commercial health insurance (whether through group plans or through individual policies) are subscribers of BCBS-IN – vastly more than are subscribers of the next largest commercial insurer operating in Indiana, United Healthcare, which carries only 15 percent of such subscribers. Its parent company, WellPoint, is the largest publicly traded commercial health benefits company in terms of membership in the United States. 97. As the dominant insurer in Indiana, BCBS-IN has led the way in causing supra- competitive prices. As a result of these and other inflated premiums, BCBS-IN's parent company, WellPoint, has a surplus in excess of $300 million. 24 10 98. Defendant BCBS-KS is the health insurance plan operating under the Blue Cross and Blue Shield trademarks and trade names in Kansas. Like other Blue Cross and Blue Shield plans nationwide, BCBS-KS is the largest health insurer, as measured by number of subscribers, within its service area, which is defined as the state of Kansas. 99. The principal headquarters for BCBS-KS is located at 1133 SW Topeka Boulevard, Topeka, KS 66629. BCBS-KS does business in each county in Kansas. 100. BCBS-KS currently exercises market power in the commercial health insurance market throughout Kansas. As of 2011, at least 47 percent of the Kansas residents who subscribe to full-service individual commercial health insurance and at least 58 percent of the Kansas residents who subscribe to small group policies are subscribers of BCBS-KS. 101. As the dominant insurer in Kansas, BCBS-KS has led the way in causing supra- competitive prices. 102. Defendant BCBS-KY is the health insurance plan operating under the Blue Cross and Blue Shield trademarks and trade names in Kentucky. Like other Blue Cross and Blue Shield plans nationwide, BCBS-KY is the largest health insurer, as measured by number of subscribers, within its service area, which is defined as the state of Kentucky. 103. The principal headquarters for BCBS-KY is located at 13550 Triton Park Blvd., Louisville, KY 40223. BCBS-KY does business in each county in Kentucky. 104. BCBS-KY currently exercises market power in the commercial health insurance market throughout Kentucky. BCBS-KY commands at least 85 percent of the market for individual health insurance plans, with nearly 127,000 customers. The next largest carrier in Kentucky, Humana, has less than 12 percent of the market, demonstrating the complete lack of meaningful competition within this market. A 2007 study published by the American Medical 25 10 Association shows BCBS-KY's statewide market share for PPO plans was 66 percent. However, in Owensboro it was at least 73 percent and in Bowling Green the market share was at least 79 percent. A 2012 report published by the University of Kentucky indicates that BCBS-KY has at least 53 percent market share in HMO enrollment in Kentucky. These figures represent a steep increase from earlier years. For example, data submitted to the U.S. Securities and Exchange Commission shows BCBS-KY's overall market share in Kentucky in 1993 was just 38 percent. 105. As the dominant insurer in Kentucky, BCBS-KY (another WellPoint Blue) has led the way in causing supra-competitive prices. As a result of its inflated premiums, BCBS-KY collects $326 million in premiums annually. The state's next largest insurer, Humana, collects just $27 million, or less than 10 percent as much as BCBS-KY. 106. Defendant BCBS-LA is the health insurance plan operating under the Blue Cross and Blue Shield trademarks and trade names in Louisiana. Like other Blue Cross and Blue Shield plans nationwide, BCBS-LA is the largest health insurer, as measured by number of subscribers, within its service area, which is defined as the state of Louisiana. 107. The principal headquarters for BCBS-LA is located at 5525 Reitz Avenue, Baton Rouge, LA 70809. BCBS-LA does business in each parish in Louisiana. 108. BCBS-LA currently exercises market power in the commercial health insurance market throughout Louisiana. As of 2010, at least 73 percent of the Louisiana residents who subscribe to full-service commercial health insurance in the individual market and at least 80 percent of the Louisiana residents who subscribe to full-service commercial health insurance in the small group market are subscribers of BCBS-LA – vastly more than are subscribers of the next largest commercial insurer operating in Louisiana, United Healthcare. 26 10 109. As the dominant insurer in Louisiana, BCBS-LA has led the way in causing supra-competitive prices. In fact, from 2000 to 2007, Louisiana health insurance premiums increased by 75.3 percent, 3.3 times faster than Louisiana wages, which only increased by 22.9 percent. Additionally, a 2009 forecast predicted that an average Louisiana worker would spend nearly 60 percent of her or his income on health insurance by 2016, one of the highest predicted nationwide ratios. As a result of its inflated premiums, BCBS-LA has amassed a massive surplus; between 2004 and 2008, its surplus rose from $352.7 million to $621.1 million. As of the end of 2010, BCBS-LA's surplus exceeded $706.6 million. 110. Defendant BCBS-ME is the health insurance plan operating under the Blue Cross and Blue Shield trademarks and trade names in Maine. Like other Blue Cross and Blue Shield plans nationwide, BCBS-ME is the largest health insurer, as measured by number of subscribers, within its service area, which is defined as the state of Maine. 111. The principal headquarters for BCBS-ME is located at 2 Gannett Drive, South Portland, ME 04016. BCBS-ME does business in each county in Maine. 112. BCBS-ME currently exercises market power in the commercial health insurance market throughout Maine. As of 2011, at least 45 percent of the Maine residents who subscribe to full-service individual commercial health insurance and at least 50 percent of the Maine residents who subscribe to small group policies are subscribers of BCBS-ME. 113. As the dominant insurer in Maine, BCBS-ME has led the way in causing supra- competitive prices. 114. Defendant BCBS-MD is the health insurance plan operating under the Blue Cross and Blue Shield trademarks and trade names in Maryland. Like other Blue Cross and Blue 27 10 Shield plans nationwide, BCBS-MD is the largest health insurer, as measured by number of subscribers, within its service area, which is defined as the state of Maryland. 115. The principal headquarters for BCBS-MD is located at 10455 and 10453 Mill Run Circle, Owings Mill, MD 21117. BCBS-MD does business in each county in Maryland. 116. BCBS-MD currently exercises market power in the commercial health insurance market throughout Maryland. As of 2011, at least 70 percent of the Maryland residents who subscribe to full-service individual commercial health insurance and at least 72 percent of the Maryland residents who subscribe to small group policies are subscribers of BCBS-MD. 117. As the dominant insurer in Maryland, BCBS-MD has led the way in causing supra-competitive prices. As a result, BCBS-MD's parent company, CareFirst, accumulated nearly $1 billion in surplus by the end of 2011. 118. Defendant BCBS-MA is the health insurance plan operating under the Blue Cross and Blue Shield trademarks and trade names in Massachusetts. Like other Blue Cross and Blue Shield plans nationwide, BCBS-MA is the largest health insurer, as measured by number of subscribers, within its service area, which is defined as the state of Massachusetts. 119. The principal headquarters for BCBS-MA is located at 401 Park Drive, Boston, MA 02215. BCBS-MA does business in each county in Massachusetts. 120. BCBS-MA currently exercises market power in the commercial health insurance market throughout Massachusetts. As of 2011, at least 63 percent of the Massachusetts residents who subscribe to full-service individual commercial health insurance and at least 40 percent of the Massachusetts residents who subscribe to small group policies are subscribers of BCBS-MA. 121. As the dominant insurer in Massachusetts, BCBS-MA has led the way in causing supra-competitive prices. As a result, by mid-2010, BCBS-MA had amassed a surplus of $1.4 28 10 billion. In 2011, BCBS-MA paid one of its departing executives a severance of over $11 million. 122. Defendant BCBS-MI is the health insurance plan operating under the Blue Cross and Blue Shield trademarks and trade names in Michigan. Like other Blue Cross and Blue Shield plans nationwide, BCBS-MI is the largest health insurer, as measured by number of subscribers, within its service area, which is defined as the state of Michigan. 123. The principal headquarters for BCBS-MI is located at 600 E. Lafayette Blvd., Detroit, MI 48226. BCBS-MI does business in each county in Michigan. 124. BCBS-MI currently exercises market power in the commercial health insurance market throughout Michigan. As of 2010, at least 69 percent of the Michigan residents who subscribe to full-service commercial health insurance (whether through group plans or through individual policies) are subscribers of BCBS-MI – vastly more than are subscribers of the next largest commercial insurer operating in Michigan, Priority Health, which carries only 9 percent of such subscribers. The American Medical Association ranks Michigan as the third least competitive state for commercial coverage, as of 2010. 125. As the dominant insurer in Michigan, BCBS-MI has led the way in causing supra- competitive prices. Premiums in the small group market grew by 9% and 13% in 2010 and 2011. BCBS-MI raised rates on individuals 22% in 2009 alone. As a result of these and other inflated premiums, BCBS-MI earned profits of $222 million and $40 million in 2010 and 2011, respectively, and currently maintains a reserve of approximately $3 billion. This "non-profit" pays its CEO compensation of $3.8 million annually. Additionally, facing increasing political pressure to reform its practices, BCBS-MI has used its "profits" to increase its political influence. In the 1990 election cycle, BCBS-MI spent about $155,000 through its political 29 10 action committee on campaign contributions. That number now has soared to $1.2 million in the 2011-2012 campaign cycle. 126. Defendant BCBS-MN is the health insurance plan operating under the Blue Cross and Blue Shield trademarks and trade names in Minnesota. Like other Blue Cross and Blue Shield plans nationwide, BCBS-MN is the largest health insurer, as measured by number of subscribers, within its service area, which is defined as the state of Minnesota. 127. The principal headquarters for BCBS-MN is located at 3535 Blue Cross Road, St. Paul, MN 55164. BCBS-MN does business in each county in Minnesota. 128. BCBS-MN currently exercises market power in the commercial health insurance market throughout Minnesota. As of 2011, at least 63 percent of the Minnesota residents who subscribe to full-service individual commercial health insurance and at least 37 percent of the Minnesota residents who subscribe to small group policies are subscribers of BCBS-MN. 129. As the dominant insurer in Minnesota, BCBS-MN has led the way in causing supra-competitive prices. As a result, by 2011, BCBS-MN had accumulated more than $250 million in surplus. In 2010, BCBS-MN paid its then-current CEO, Peter Geraghty, $1.5 million in compensation, the highest salary for any Minnesota non-profit leader. 130. Defendant BCBS-MS is the health insurance plan operating under the Blue Cross and Blue Shield trademarks and trade names in Mississippi. Like other Blue Cross and Blue Shield plans nationwide, BCBS-MS is the largest health insurer, as measured by number of subscribers, within its service area, which is defined as the state of Mississippi. 131. The principal headquarters for BCBS-MS is located at 3545 Lakeland Drive, Flowood, MS 39232. BCBS-MS does business in each county in Mississippi. 30 10 132. BCBS-MS currently exercises market power in the commercial health insurance market throughout Mississippi. As of 2011, at least 57 percent of the Mississippi residents who subscribe to full-service commercial health insurance through individual policies and at least 73 percent of the Mississippi residents who subscribe to full-service commercial health insurance through small group plans are subscribers of BCBS-MS – vastly more than are subscribers of the next largest commercial insurer operating in Mississippi, United Healthcare. 133. As the dominant insurer in Mississippi, BCBS-MS has led the way in causing supra-competitive prices. As a result of these and other inflated premiums, BCBS-MS now has a surplus of approximately $561 million. 134. Defendant BCBS-MO is the health insurance plan operating under the Blue Cross and Blue Shield trademarks and trade names in Missouri, except for 32 counties in greater Kansas City and NW Missouri. Like other Blue Cross and Blue Shield plans nationwide, BCBS- MO is the largest health insurer, as measured by number of subscribers, within its service area, which is defined as the state of Missouri, except the 32 counties in greater Kansas City and NW Missouri. 135. The principal headquarters for BCBS-MO is located at 1831 Chestnut Street, St. Louis, MO 63103. BCBS-MO does business in all but 32 counties in the state of Missouri. 136. Defendant BCBS-KC is the health insurance plan operating under the Blue Cross and Blue Shield trademarks and trade names in the 32 counties of greater Kansas City and NW Missouri, plus Johnson and Wyandotte counties in Kansas. Like other Blue Cross and Blue Shield plans nationwide, BCBS-Kansas City is one of the largest health insurers, as measured by number of subscribers, within its service area, which is defined as the 32 counties of greater Kansas City and NW Missouri, plus Johnson and Wyandotte counties in Kansas. 31 10 137. The principal headquarters for BCBS-Kansas City is located at 2301 Main Street, One Pershing Square, Kansas City, MO 64108. BCBS-Kansas City does business in each county in the 32 counties of greater Kansas City and NW Missouri, plus Johnson and Wyandotte counties in Kansas. 138. BCBS-MO, with BCBS-KC, currently exercises market power in the commercial health insurance market throughout Missouri (with the exception of certain counties which are not part of its service area). As of 2010, at least 26 percent of the Missouri residents who subscribe to full-service commercial health insurance (whether through group plans or through individual policies) are subscribers of BCBS-MO, including at least 32 percent of those with individual insurance products and at least 48 percent of those with small group insurance products. In parts of its service area in Missouri, BCBS-KC has as much as 62 percent market share, or more. 139. As the dominant insurers in Missouri, BCBS-MO and BCBS-KC have led the way in causing supra-competitive prices. In fact, health insurance premiums for Missouri working families increased 76 percent from 2000 to 2007. For family health coverage in Missouri from 2000 to 2007, the average employer's portion of annual premiums rose 72 percent, while the average worker's share grew by 91 percent. 140. Defendant BCBS-MT is the health insurance plan operating under the Blue Cross and Blue Shield trademarks and trade names in Montana. Like other Blue Cross and Blue Shield plans nationwide, BCBS-MT is one of the largest health insurers, as measured by number of subscribers, within its service area, which is defined as the state of Montana. 141. The principal headquarters for BCBS-MT is located at 560 N. Park Avenue, Helena, MT 59604-4309. BCBS-MT does business in each county in Montana. 32 10 142. BCBS-MT currently exercises market power in the commercial health insurance market throughout Montana. As of 2011, at least 56 percent of the Montana residents who subscribe to full-service individual commercial health insurance and at least 72 percent of the Montana residents who subscribe to small group policies are subscribers of BCBS-MT. 143. As the dominant insurer in Montana, BCBS-MT has led the way in causing supra- competitive prices. In 2010, for example, BCBS-MT raised some insurance premiums by as much as 40 percent. 144. Defendant BCBS-NE is the health insurance plan operating under the Blue Cross and Blue Shield trademarks and trade names in Nebraska. Like other Blue Cross and Blue Shield plans nationwide, BCBS-NE is the largest health insurer, as measured by number of subscribers, within its service area, which is defined as the state of Nebraska. 145. The principal headquarters for BCBS-NE is located at 1919 Aksarban Drive, Omaha, NE 68180. BCBS-NE does business in each county in Nebraska. 146. BCBS-NE currently exercises market power in the commercial health insurance market throughout Nebraska. As of 2011, at least 65 percent of the Nebraska residents who subscribe to full-service individual commercial health insurance and at least 42 percent of the Nebraska residents who subscribe to small group policies are subscribers of BCBS-NE. 147. As the dominant insurer in Nebraska, BCBS-NE has led the way in causing supra- competitive prices. In 2012, BCBS-NE raised premiums an average of 10 percent, some by as much as 17 percent. 148. Defendant BCBS-NV is the health insurance plan operating under the Blue Cross and Blue Shield trademarks and trade names in Nevada. Like other Blue Cross and Blue Shield 33 10 plans nationwide, BCBS-NV is one of the largest health insurers, as measured by number of subscribers, within its service area, which is defined as the state of Nevada. 149. The principal headquarters for BCBS-NV is located at 9133 West Russell Rd. Suite 200, Las Vegas, NV 89148. BCBS-NV does business in each county in Nevada. 150. BCBS-NV currently exercises market power in the commercial health insurance market throughout Nevada. As of 2010, BCBS-NV had as much as 31 percent market share of full-service commercial health insurance in regions of its service area. 151. As one of the dominant insurers in Nevada, BCBS-NV has led the way in causing supra-competitive prices. 152. Defendant BCBS-NH is the health insurance plan operating under the Blue Cross and Blue Shield trademarks and trade names in New Hampshire. Like other Blue Cross and Blue Shield plans nationwide, BCBS-NH is the largest health insurer, as measured by number of subscribers, within its service area, which is defined as the state of New Hampshire. 153. The principal headquarters for BCBS-NH is located at 3000 Goffs Falls Rd, Manchester, NH 03103. BCBS-NH does business in each county in New Hampshire. 154. BCBS-NH currently exercises market power in the commercial health insurance market throughout New Hampshire. As of 2010 and 2011, at least 51 percent of the New Hampshire residents who subscribe to full-service commercial health insurance—including at least 76 percent of those who subscribe to individual plans and at least 67 percent of those who subscribe to small group plans—are subscribers of BCBS-NH – vastly more than are subscribers of the next largest commercial insurer operating in New Hampshire, Harvard Pilgrim, which carries only 20 percent of such subscribers. 34 10 155. As the dominant insurer in New Hampshire, BCBS-NH has led the way in causing supra-competitive prices. For example, from 2009 to 2010 the cost of insurance coverage for small groups and individuals rose 15% and 39%, respectively. As a result of these and other inflated premiums, between 2006 and 2011, BCBS-NH reported annual income between $26 million and $112 million and a cumulative profit of approximately $360 million. 156. Defendant BCBS-NJ is the health insurance plan operating under the Blue Cross and Blue Shield trademarks and trade names in New Jersey. Like other Blue Cross and Blue Shield plans nationwide, BCBS-NJ is one of the largest health insurers, as measured by number of subscribers, within its service area, which is defined as the state of New Jersey. 157. The principal headquarters for BCBS-NJ is located at Three Penn Plaza East, Newark, NJ 07105. BCBS-NJ does business in each county in New Jersey. 158. BCBS-NJ currently exercises market power in the commercial health insurance market throughout New Jersey. As of 2011, at least 63 percent of the New Jersey residents who subscribe to full-service individual commercial health insurance and at least 59 percent of the New Jersey residents who subscribe to small group policies are subscribers of BCBS-NJ. 159. As the dominant insurer in New Jersey, BCBS-NJ has led the way in causing supra-competitive prices. In 2010, CEO and President William Marino received $8.7 million in compensation, three other executives made more than $2 million in total compensation, and six others made more than $1 million. 160. Defendant BCBS-NM is the health insurance plan operating under the Blue Cross and Blue Shield trademarks and trade names in New Mexico. Like other Blue Cross and Blue Shield plans nationwide, BCBS-NM is the largest health insurer, as measured by number of subscribers, within its service area, which is defined as the state of New Mexico. 35 10 161. The principal headquarters for BCBS-NM is located at 5701 Balloon Fiesta Parkway Northeast, Albuquerque, NM 87113. BCBS-NM does business in each county in New Mexico. 162. BCBS-NM currently exercises market power in the commercial health insurance market throughout New Mexico. As of 2011, at least 52 percent of the New Mexico residents who subscribe to full-service individual commercial health insurance and at least 31 percent of the New Mexico residents who subscribe to small group policies are subscribers of BCBS-NM. 163. As the dominant insurer in New Mexico, BCBS-NM has led the way in causing supra-competitive prices. As a result, BCBS-NM's parent company, Health Care Service Corp., was able to amass an estimated $6.1 billion in surplus by 2007. For at least three years following, some BCBS-NM subscribers faced annual rate hikes of up to 20 percent. 164. Defendant Empire BCBS is the health insurance plan operating under the Blue Cross and Blue Shield trademarks and trade names in Eastern and Southeastern New York. Like other Blue Cross and Blue Shield plans nationwide, Empire BCBS is the largest health insurer, as measured by number of subscribers, within its service area, which is defined as the 28 counties of Eastern and Southeastern New York state. 165. The principal headquarters for Empire BCBS is located at One Liberty Plaza, New York, NY 10006. Empire BCBS does business in each county in New York. 166. Defendant BCBS-Western New York is the health insurance plan operating under the Blue Cross and Blue Shield trademarks and trade names in Western New York. Like other Blue Cross and Blue Shield plans nationwide, BCBS-Western New York is one of the largest health insurers, as measured by number of subscribers, within its service area, which is defined as Western New York state. 36 10 167. The principal headquarters for BCBS-Western New York is located at 257 West Genesee Street, Buffalo, NY 14202. BCBS-Western New York does business in a number of counties in Western New York. 168. Defendant BS-Northeastern New York is the health insurance plan operating under the Blue Shield trademark and trade name in Northeastern New York. Like other Blue Cross and Blue Shield plans nationwide, BS-Northeastern New York is one of the largest health insurers, as measured by number of subscribers, within its service area, which is defined as 13 counties in Northeastern New York. 169. The principal headquarters for BS-Northeastern New York is located at 257 West Genesee Street, Buffalo, NY 14202. BS-Northeastern New York does business in 13 counties in Northeastern New York. 170. Defendant Excellus BCBS is the health insurance plan operating under the Blue Cross and Blue Shield trademarks and trade names in central New York. Like other Blue Cross and Blue Shield plans nationwide, Excellus BCBS is one of the largest health insurers, as measured by number of subscribers, within its service area, which is defined as 31 counties in central New York. 171. The principal headquarters for Excellus BCBS is located at 165 Court Street, Rochester, NY 14647. Excellus BCBS does business in each county in the 31 counties of central New York. 172. Empire BCBS, BCBS-Western New York, BS-Northeastern New York, and Excellus BCBS currently exercise market power in the commercial health insurance market throughout their respective service areas of New York. As of 2010, at least 67 percent of the 37 10 New York residents who subscribe to full-service commercial health insurance are subscribers of these New York Individual Blue Plans. 173. As the dominant insurers in New Mexico, Empire BCBS, BCBS-Western New York, BS-Northeastern New York, and Excellus BCBS have led the way in causing supra- competitive prices. 174. Defendant BCBS-NC is the health insurance plan operating under the Blue Cross and Blue Shield trademarks and trade names in North Carolina. Like other Blue Cross and Blue Shield plans nationwide, BCBS-NC is the largest health insurer, as measured by number of subscribers, within its service area, which is defined as the state of North Carolina. 175. The principal headquarters for BCBS-NC is located at 5901 Chapel Hill Road, Durham, NC 27707. BCBS-NC does business in each county in North Carolina. 176. BCBS-NC currently exercises market power in the commercial health insurance market throughout North Carolina. According to the North Carolina Department of Insurance ("NCDOI"), over 73 percent of the North Carolina residents who subscribe to full-service commercial health insurance (whether through group plans or through individual policies) are subscribers of BCBS-NC – vastly more than the next largest full-service commercial insurer, Coventry Health Care, which carries only 7 percent of all subscribers. BCBS-NC currently has a greater than 50 percent share of full-service commercial health insurance enrollees in all fifteen of the major metropolitan health insurance markets in the State, and a greater than 75 percent share in ten of those fifteen markets. As of 2011, BCBS-NC had at least an 83 percent share of the individual market and at least a 63 percent share of the small group market. 177. As the dominant insurer in North Carolina, BCBS-NC has led the way in causing supra-competitive prices. As a result of these inflated premiums, BCBS-NC now has a surplus 38 10 of over $1.4 billion and has paid its executives salaries and bonuses in the millions of dollars each year. 178. Defendant BCBS-ND is the health insurance plan operating under the Blue Cross and Blue Shield trademarks and trade names in North Dakota. Like other Blue Cross and Blue Shield plans nationwide, BCBS-ND is the largest health insurer, as measured by number of subscribers, within its service area, which is defined as the state of North Dakota. 179. The principal headquarters for BCBS-ND is located at 4510 13th Avenue South, Fargo, ND 58121. BCBS-ND does business in each county in North Dakota. 180. BCBS-ND currently exercises market power in the commercial health insurance market throughout North Dakota. As of 2011, at least 75 percent of the North Dakota residents who subscribe to full-service individual commercial health insurance and at least 85 percent of the North Dakota residents who subscribe to small group policies are subscribers of BCBS-ND. 181. As the dominant insurer in North Dakota, BCBS-ND has led the way in causing supra-competitive prices. In 2011, BCBS-ND raised premiums for some subscribers by as much as 17 percent; in 2009, an audit revealed that the insurer had spent nearly $35,000 for a farewell party for an unnamed executive the year before. 182. Defendant BCBS-OH is the health insurance plan operating under the Blue Cross and Blue Shield trademarks and trade names in Ohio. Like other Blue Cross and Blue Shield plans nationwide, BCBS-OH is the largest health insurer, as measured by number of subscribers, within its service area, which is defined as the state of Ohio. 183. The principal headquarters for BCBS-OH is located at 120 Monument Circle, Indianapolis, IN 46203. BCBS-OH does business in each county in Ohio. 39 10 184. BCBS-OH currently exercises market power in the commercial health insurance market throughout Ohio. As of 2011, at least 36 percent of the Ohio residents who subscribe to full-service individual commercial health insurance and at least 41 percent of the Ohio residents who subscribe to small group policies are subscribers of BCBS-OH. 185. As the dominant insurer in Ohio, BCBS-OH has led the way in causing supra- competitive prices. In 2013, the insurer raised rates for small group subscribers by an average of 12 percent. 186. Defendant BCBS-OK is the health insurance plan operating under the Blue Cross and Blue Shield trademarks and trade names in Oklahoma. Like other Blue Cross and Blue Shield plans nationwide, BCBS-OK is the largest health insurer, as measured by number of subscribers, within its service area, which is defined as the state of Oklahoma. 187. The principal headquarters for BCBS-OK is located at 1400 South Boston, Tulsa, OK 74119. BCBS-OK does business in each county in Oklahoma. 188. BCBS-OK currently exercises market power in the commercial health insurance market throughout Oklahoma. As of 2010, at least 45 percent of the Oklahoma residents who subscribe to full-service commercial health insurance (whether through group plans or through individual policies) are subscribers of BCBS-OK – vastly more than are subscribers of the next largest commercial insurer operating in Oklahoma, Aetna, which carries only 19 percent of such subscribers. As of 2011, BCBS-OK maintained at least 58 percent market share in the individual market, and at least 48 percent market share in the small group market. The 2012 Oklahoma Insurance Department Annual Report placed BCBS-OK's individual plan market share at 70 percent and group plan market share at 56 percent. 40 10 189. As the dominant insurer in Oklahoma, BCBS-OK has led the way in causing supra-competitive prices. From 2005 (when Health Care Service Corp. purchased BCBS-OK) to 2011, BCBS-OK nearly doubled its premium revenue, from $956 million to $1.8 billion. Health Care Service Corp. now has a surplus of over $620 million. 190. Defendant BCBS-OR is the health insurance plan operating under the Blue Cross and Blue Shield trademarks and trade names in Oregon. Like other Blue Cross and Blue Shield plans nationwide, BCBS-OR is the largest health insurer, as measured by number of subscribers, within its service area, which is defined as the state of Oregon. 191. The principal headquarters for BCBS-OR is located at 100 SW Market Street, Portland, OR 97207. BCBS-OR does business in each county in Oregon. 192. BCBS-OR currently exercises market power in the commercial health insurance market throughout Oregon. As of 2011, at least 35 percent of the Oregon residents who subscribe to full-service individual commercial health insurance and at least 21 percent of the Oregon residents who subscribe to small group policies are subscribers of BCBS-OR. 193. As the dominant insurer in Oregon, BCBS-OR has led the way in causing supra- competitive prices. From 2009 to 2010, while building a surplus of $565 million (3.6 times the regulatory minimum), BCBS-OR raised rates on some individual plans by an average of 25 percent. 194. Defendant Highmark BCBS is the health insurance plan operating under the Blue Cross and Blue Shield trademarks and trade names in Western Pennsylvania and the Blue Shield trademarks and trade names throughout the entire state of Pennsylvania. Like other Blue Cross and Blue Shield plans nationwide, Highmark BCBS is the largest health insurer, as measured by number of subscribers, within its Blue Cross and Blue Shield service area, which is 41 10 defined as the 29 counties of Western Pennsylvania: Allegheny, Armstrong, Beaver, Bedford, Blair, Butler, Cambria, Cameron, Centre (Western portion), Clarion, Clearfield, Crawford, Elk, Erie, Fayette, Forest, Green, Huntingdon, Indiana, Jefferson, Lawrence, McKean, Mercer, Potter, Somerset, Venango, Warren, Washington, and Westmoreland Counties. (As described below, Highmark BCBS has entered into illegal and anticompetitive agreements with at least two of the other Individual Blue Plans in Pennsylvania, which prevent Highmark BCBS from competing under its Blue Shield trademark in Northeastern and Southeastern Pennsylvania.) 195. The principal headquarters for Highmark BCBS is located at 120 Fifth Avenue Place, Pittsburgh, PA 15222. Highmark BCBS does business in each county in Western Pennsylvania. 196. Defendant BC-Northeastern PA is the health insurance plan operating under the Blue Cross trademark and trade name in Northeastern Pennsylvania. Like other Blue Cross and Blue Shield plans nationwide, BC-Northeastern PA is one of the largest health insurers, as measured by number of subscribers, within its service area, which is defined as the 13 counties that make up Northeastern Pennsylvania: Bradford, Carbon, Clinton, Lackawanna, Luzerne, Lycoming, Monroe, Pike, Sullivan, Susquehanna, Tioga, Wayne, and Wyoming Counties. 197. The principal headquarters for BC-Northeastern PA is located at 19 North Main Street, Wilkes-Barre, PA. 18711. BC-Northeastern PA does business in each county in Northeastern Pennsylvania. 198. Defendant Capital BC is the health insurance plan operating under the Blue Cross trademark and trade name in central Pennsylvania. Like other Blue Cross and Blue Shield plans nationwide, Capital BC is one of the largest health insurers, as measured by number of subscribers, within its service area, which is defined as the 21 counties that make up central 42 10 Pennsylvania: Adams, Berks, Centre (Eastern portion), Columbia, Cumberland, Dauphin, Franklin, Fulton, Juaniata, Lancaster, Lebanon, Lehigh, Mifflin, Montour, Northampton, Northumberland, Perry, Schuylkill, Snyder, Union, and York Counties. 199. The principal headquarters for Capital BC is located at 2500 Elmerton Avenue, Harrisburg, PA 17177. Capital BC does business in 21 counties in central Pennsylvania. 200. Defendant Independence BC is the health insurance plan operating under the Blue Cross trademark and trade name in Southeastern Pennsylvania. Like other Blue Cross and Blue Shield plans nationwide, Independence BC is the largest health insurer, as measured by number of subscribers, within its service area, which is defined as the 5 counties that make up Southeastern Pennsylvania: Bucks, Chester, Delaware, Montgomery, and Philadelphia Counties. 201. The principal headquarters for Independence BC is located at 1901 Market Street, Philadelphia, PA 19103. Independence BC does business in each county in Southeastern Pennsylvania. 202. Highmark BCBS, BC-Northeastern PA, Capital BC, and Independence BC currently exercise market power in the commercial health insurance market in their respective services areas of Pennsylvania, including Highmark BCBS throughout Western Pennsylvania. Since 2000, between 60% and 80% of the Western Pennsylvania residents who subscribe to full- service commercial health insurance (whether through group plans or through individual policies) are subscribers of Highmark. Highmark Executive Vice President John Paul has stated publicly that Highmark is "an insurer that clearly dominates the commercial market" and "it's pretty obvious [Highmark] control[s] finance of health care in western Pennsylvania." As of 2006, at least 60 percent of the Northeastern Pennsylvania residents who subscribe to full-service commercial health insurance (whether through group plans or through individual policies) are 43 10 subscribers of BC-Northeastern PA, at least and at least 62 percent of the Southeastern Pennsylvania residents who subscribe to full-service commercial health insurance (whether through group plans or through individual policies) are subscribers of Independence BC. 203. As the dominant insurers in Pennsylvania, Highmark BCBS, BC-Northeastern PA, Capital BC, and Independence BC have led the way in causing supra-competitive prices. From 2002-2006, health insurance premiums for single individuals in the Pittsburgh area rose approximately 55% and health insurance premiums for Pittsburgh families rose approximately 51%. In 2008, Highmark raised its rates for its CompleteCare program by 15%. In 2012, Highmark filed for premium rate increases of 9.8% for its small group plans. As a result of these and other inflated premiums, net income increased from less than $50 million in 2001 to approximately $444.7 million in 2011. By the end of 2005, Highmark's surplus (i.e., assets in excess of legally required reserves to pay claims) exceeded $2.8 billion; by 2011, it exceeded $4.1 billion. In 2012, Highmark paid its CEOs more than $6 million and paid its Board of Directors $1.9 million. 204. Defendant BCBS-Puerto Rico is the health insurance plan operating under the Blue Cross and Blue Shield trademarks and trade names in Puerto Rico. Like other Blue Cross and Blue Shield plans nationwide, BCBC-Puerto Rico is one of the largest health insurers, as measured by number of subscribers, within its service area, which is defined as the territory of Puerto Rico. 205. The principal headquarters for BCBS-Puerto Rico is located at 1441 F.D. Roosevelt Avenue, San Juan, Puerto Rico 00920. BCBS-Puerto Rico does business throughout Puerto Rico. 44 10 206. BCBS-Puerto Rico currently exercises market power in the commercial health insurance market throughout Puerto Rico. As a dominant insurer in Puerto Rico, BCBS-Puerto Rico has led the way in causing supra-competitive prices. 207. Defendant BCBS-RI is the health insurance plan operating under the Blue Cross and Blue Shield trademarks and trade names in Rhode Island. Like other Blue Cross and Blue Shield plans nationwide, BCBS-RI is the largest health insurer, as measured by number of subscribers, within its service area, which is defined as the state of Rhode Island. 208. The principal headquarters for BCBS-RI is located at 500 Exchange Street, Providence, RI 02903. BCBS-RI does business in each county in Rhode Island. 209. BCBS-RI currently exercises market power in the commercial health insurance market throughout Rhode Island. As of 2012, at least 71 percent of the Rhode Island residents who subscribe to full-service commercial health insurance (whether through group plans or through individual policies) are subscribers of BCBS-RI – vastly more than are subscribers of the next largest commercial insurer operating in Rhode Island, United Healthcare, which carries only 15 percent of such subscribers. As of 2011, BCBS-RI maintained a stunning 95 percent market share in the individual market, and at least 74 percent market share in the small group market. 210. As the dominant insurer in Rhode Island, BCBS-RI has led the way in causing supra-competitive prices. From 2003 to 2011, individual and family insurance premiums rose 59 percent and 61 percent, respectively. From 2000 to 2009, the average employer-sponsored health insurance premiums for families in Rhode Island increased by approximately 105.8 percent, whereas median earnings rose only 22.4 percent during that same period. In 2011, BCBS-RI raised premiums by about 10%. As a result of these and other inflated premiums, by 2011, BCBS-RI had amassed an approximately $320 million surplus. 45 10 211. Defendant BCBS-SC is the health insurance plan operating under the Blue Cross and Blue Shield trademarks and trade names in South Carolina. Like other Blue Cross and Blue Shield plans nationwide, BCBS-SC is the largest health insurer, as measured by number of subscribers, within its service area, which is defined as the state of South Carolina. 212. The principal headquarters for BCBS-SC is located at 2501 Faraway Drive, Columbia, SC 29212. BCBS-SC does business in each county in South Carolina. 213. BCBS-SC currently exercises market power in the commercial health insurance market throughout South Carolina. As of 2010, at least 60 percent of the South Carolina residents who subscribe to full-service commercial health insurance (whether through group plans or through individual policies) are subscribers of BCBS-SC – vastly more than are subscribers of the next largest commercial insurer operating in South Carolina, Cigna, which carries only 15 percent of such subscribers. As of 2011, BCBS-SC maintained 55 percent market share in the individual market, and 70 percent market share in the small group market. 214. As the dominant insurer in South Carolina, BCBS-SC has led the way in causing supra-competitive prices. As a result of these inflated premiums, BCBS-SC now has a surplus of reserves over $1.7 billion. 215. Defendant BCBS-SD is the health insurance plan operating under the Blue Cross and Blue Shield trademarks and trade names in South Dakota. Like other Blue Cross and Blue Shield plans nationwide, BCBS-SD is the largest health insurer, as measured by number of subscribers, within its service area, which is defined as the state of South Dakota. 216. The principal headquarters for BCBS-SD is located at 1601 W. Madison, Sioux Falls, SD 57104. BCBS-SD does business in each county in South Dakota. 46 10 217. BCBS-SD currently exercises market power in the commercial health insurance market throughout South Dakota. As of 2011, at least 74 percent of the South Dakota residents who subscribe to full-service individual commercial health insurance and at least 62 percent of the South Dakota residents who subscribe to small group policies are subscribers of BCBS-SD. 218. As the dominant insurer in South Dakota, BCBS-SD has led the way in causing supra-competitive prices. As a result, as of 2012, its parent company, Wellmark, held a surplus of over $1 billion. 219. Defendant BCBS-TN is the health insurance plan operating under the Blue Cross and Blue Shield trademarks and trade names in Tennessee. Like other Blue Cross and Blue Shield plans nationwide, BCBS-TN is the largest health insurer, as measured by number of subscribers, within its service area, which is defined as the state of Tennessee. 220. The principal headquarters for BCBS-TN is located at 1 Cameron Hill Circle, Chattanooga, TN 37402. BCBS-TN does business in each county in Tennessee. 221. BCBS-TN currently exercises market power in the commercial health insurance market throughout Tennessee. As of 2010, at least 46 percent of the Tennessee residents who subscribe to full-service commercial health insurance (whether through group plans or through individual policies) are subscribers of BCBS-TN – vastly more than are subscribers of the next largest commercial insurer operating in Tennessee, Cigna, which carries only 24 percent of such subscribers. As of 2011, BCBS-TN maintained at least 36 percent market share in the individual market and at least 70 percent market share in the small group market. 222. As the dominant insurer in Tennessee, BCBS-TN has led the way in causing supra-competitive prices. As a result of these inflated premiums, BCBS-TN now has a surplus of almost $1.6 billion. 47 10 223. Defendant BCBS-TX is the health insurance plan operating under the Blue Cross and Blue Shield trademarks and trade names in Texas. Like other Blue Cross and Blue Shield plans nationwide, BCBS-TX is the largest health insurer, as measured by number of subscribers, within its service area, which is defined as the state of Texas. 224. The principal headquarters for BCBS-TX is located at 1001 E. Lookout Drive, Richardson, TX 75082. BCBS-TX does business in each county in Texas. 225. BCBS-TX currently exercises market power in the commercial health insurance market throughout Texas. As of 2010, at least 35 percent of the Texas residents who subscribe to full-service commercial health insurance (whether through group plans or through individual policies) are subscribers of BCBS-TX – vastly more than are subscribers of the next largest commercial insurer operating in Texas, Aetna, which carries only 22 percent of such subscribers. As of 2011, BCBS-TX maintained 57 percent market share in the individual market and 46 percent market share in the small group market. 226. As the dominant insurer in Texas, BCBS-TX has led the way in causing supra- competitive prices. As a result of these inflated premiums, BCBS-TX's parent company, Health Care Service Corp., now has a surplus of more than $620 million. 227. Defendant BCBS-UT is the health insurance plan operating under the Blue Cross and Blue Shield trademarks and trade names in Utah. Like other Blue Cross and Blue Shield plans nationwide, BCBS-UT is one of the largest health insurers, as measured by number of subscribers, within its service area, which is defined as the state of Utah. 228. The principal headquarters for BCBS-UT is located at 2890 East Cottonwood Parkway, Salt Lake City, UT 84121. BCBS-UT does business in each county in Utah. 48 10 229. BCBS-UT currently exercises market power in the commercial health insurance market throughout Utah. As of 2011, at least 17 percent of the Utah residents who subscribe to full-service individual commercial health insurance and at least 23 percent of the Utah residents who subscribe to small group policies are subscribers of BCBS-UT. 230. As one of the dominant insurers in Utah, BCBS-UT has led the way in causing supra-competitive prices. 231. Defendant BCBS-VT is the health insurance plan operating under the Blue Cross and Blue Shield trademarks and trade names in Vermont. Like other Blue Cross and Blue Shield plans nationwide, BCBS-VT is the largest health insurer, as measured by number of subscribers, within its service area, which is defined as the state of Vermont. 232. The principal headquarters for BCBS-VT is located at 445 Industrial Lane, Berlin, VT 05602. BCBS-VT does business in each county in Vermont. 233. BCBS-VT currently exercises market power in the commercial health insurance market throughout Vermont. As of 2011, at least 77 percent of the Vermont residents who subscribe to full-service individual commercial health insurance and at least 43 percent of the Vermont residents who subscribe to small group policies are subscribers of BCBS-VT. 234. As the dominant insurer in Vermont, BCBS-VT has led the way in causing supra- competitive prices. In 2010, Vermont's Banking, Insurance, Securities, and Health Care Administration Department found that BCBS-VT had overpaid its former President and CEO William Milnes Jr. by roughly $3 million, having paid him $7.2 million in 2008 upon his retirement, in violation of state law. 235. Defendant BCBS-VA is the health insurance plan operating under the Blue Cross and Blue Shield trademarks and trade names in most of Virginia, with the exception of a small 49 10 portion of Northern Virginia in the Washington, DC suburbs. Like other Blue Cross and Blue Shield plans nationwide, BCBS-VA is the largest health insurer, as measured by number of subscribers, within its service area, which is defined as the state of Virginia, excepting a small portion of Northern Virginia in the Washington, DC suburbs. 236. The principal headquarters for BCBS-VA is located at 2235 Staples Mill Road, Suite 401, Richmond, VA 23230. BCBS-VA does business in each county in Virginia. 237. BCBS-VA currently exercises market power in the commercial health insurance market throughout Virginia. As of 2011, at least 74 percent of the Virginia residents who subscribe to full-service individual commercial health insurance and at least 50 percent of the Virginia residents who subscribe to small group policies are subscribers of BCBS-VA. 238. As the dominant insurer in Virginia, BCBS-VA has led the way in causing supra- competitive prices. In 2009, BCBS-VA's parent company, WellPoint, raised its CEO Angela Braly's total compensation by 51 percent, to $13 million. 239. Defendant BC-WA is the health insurance plan operating under the Blue Cross trademarks and trade names in Washington. Like other Blue Cross and Blue Shield plans nationwide, BC-WA is one of the largest health insurers, as measured by number of subscribers, within its service area, which is defined as the state of Washington. 240. The principal headquarters for BC-WA is located at 7001 220th Street SW, Mountlake Terrace, WA 98043-4000. BC-WA does business in each county in Washington. 241. Defendant BS-WA is the health insurance plan operating under the Blue Shield trademarks and trade names in Washington. Like other Blue Cross and Blue Shield plans nationwide, BS-WA is one of the largest health insurers, as measured by number of subscribers, within its service area, which is defined as the state of Washington. 50 10 242. The principal headquarters for BS-WA is located at 1800 Ninth Avenue, Seattle, WA 98111. BS-WA does business in each county in Washington. 243. BC-WA and BS-WA currently exercise market power in the commercial health insurance market throughout Washington. As of 2011, at least 36 percent of the Washington residents who subscribe to full-service individual commercial health insurance are subscribers of BC-WA, while at least 37 percent of those residents are subscribers of BS-WA (for a total of 73 percent). At least 32 percent of the Washington residents who subscribe to small group policies are subscribers of BC-WA, while at least 33 percent of those residents are subscribers of BS-WA (for a total of 65 percent). 244. As the dominant insurers in Washington, BC-WA and BS-WA have led the way in causing supra-competitive prices. In 2012, BC-WA's CEO threatened to increase premium rates for individual plans by as much as 50 to 70 percent. 245. Defendant BCBS-DC is the health insurance plan operating under the Blue Cross and Blue Shield trademarks and trade names in Washington, DC and its suburbs. Like other Blue Cross and Blue Shield plans nationwide, BCBS-DC is the largest health insurer, as measured by number of subscribers, within its service area, which is defined as Washington, DC and a small portion of Northern Virginia in the Washington, DC suburbs. 246. The principal headquarters for BCBS-DC is located at 10455 Mill Run Circle, Owings Mill, MD 21117. BCBS-DC does business throughout Washington, DC. 247. BCBS-DC currently exercises market power in the commercial health insurance market throughout the Washington, DC region. As of 2011, at least 69 percent of the Washington, DC region residents who subscribe to full-service individual commercial health 51 10 insurance and at least 76 percent of the Washington, DC region residents who subscribe to small group policies are subscribers of BCBS-DC. 248. As the dominant insurer in the Washington, DC region, BCBS-DC has led the way in causing supra-competitive prices. In 2010, BCBS-DC raised rated by as much as 35 percent, so high that the insurance regulator for the District of Columbia rescinded the rate. 249. Defendant BCBS-WV is the health insurance plan operating under the Blue Cross and Blue Shield trademarks and trade names in West Virginia. Like other Blue Cross and Blue Shield plans nationwide, BCBS-WV is the largest health insurer, as measured by number of subscribers, within its service area, which is defined as the state of West Virginia. 250. The principal headquarters for BCBS-WV is located at 700 Market Square, Parkersburg, West Virginia 26101. BCBS-WV does business in each county in West Virginia. 251. BCBS-WV currently exercises market power in the commercial health insurance market throughout West Virginia. As of 2011, at least 44 percent of the West Virginia residents who subscribe to full-service individual commercial health insurance and at least 57 percent of the West Virginia residents who subscribe to small group policies are subscribers of BCBS-WV. 252. As the dominant insurer in West Virginia, BCBS-WV has led the way in causing supra-competitive prices. In 2012, BCBS-WV's parent company, Highmark, paid eight current or former executives more than $1 million in compensation. 253. Defendant BCBS-WI is the health insurance plan operating under the Blue Cross and Blue Shield trademarks and trade names in Wisconsin. Like other Blue Cross and Blue Shield plans nationwide, BCBS-WI is one of the largest health insurers, as measured by number of subscribers, within its service area, which is defined as the state of Wisconsin. 52 10 254. The principal headquarters for BCBS-WI is located at 120 Monument Circle, Indianapolis, IN 46204. BCBS-WI does business in each county in Wisconsin. 255. BCBS-WI currently exercises market power in the commercial health insurance market throughout Wisconsin. As of 2011, at least 19 percent of the Wisconsin residents who subscribe to full-service individual commercial health insurance and at least 12 percent of the Wisconsin residents who subscribe to small group policies are subscribers of BCBS-WI. 256. As one of the dominant insurers in Wisconsin, BCBS-WI has led the way in causing supra-competitive prices. 257. Defendant BCBS-WY is the health insurance plan operating under the Blue Cross and Blue Shield trademarks and trade names in Wyoming. Like other Blue Cross and Blue Shield plans nationwide, BCBS-WY is one of the largest health insurers, as measured by number of subscribers, within its service area, which is defined as the state of Wyoming. 258. The principal headquarters for BCBS-WY is located at P.O. Box 2266, Cheyenne, WY 82003. BCBS-WY does business in each county in Wyoming. 259. BCBS-WY currently exercises market power in the commercial health insurance market throughout Wyoming. As of 2011, at least 38 percent of the Wyoming residents who subscribe to full-service individual commercial health insurance and at least 61 percent of the Wyoming residents who subscribe to small group policies are subscribers of BCBS-WY. 260. As the dominant insurer in Wyoming, BCBS-WY has led the way in causing supra-competitive prices. 53 10 TRADE AND COMMERCE 261. The Individual Blue Plans, which own and control BCBSA, are engaged in interstate commerce and in activities substantially affecting interstate commerce, and the conduct alleged herein substantially affects interstate commerce. BCBSA enters into agreements with health insurance companies throughout the country that specify the geographic areas in which those companies can compete. The Individual Blue Plans provide commercial health insurance that covers residents of their respective regions (which together include all 50 states) when they travel across state lines, purchase health care in interstate commerce when these residents require health care out of state, and receive payments from employers outside of their regions on behalf of their regions' residents. CLASS ACTION ALLEGATIONS 262. Plaintiffs bring this action on behalf of themselves individually and on behalf of 18 different classes of plaintiffs. First, all Plaintiffs bring this action seeking injunctive relief on behalf of a class of plaintiffs pursuant to the provisions of Rule 23(a) and Rule 23(b)(1) and (b)(2) of the Federal Rules of Civil Procedure, with such class (the "Nationwide Class") defined as: All persons or entities in the United States of America who are currently insured by any health insurance plan that is currently a party to a license agreement with BCBSA that restricts the ability of that health insurance plan to do business in any geographically defined area. 263. Second, Plaintiffs American Electric Motor Services, Inc. and CB Roofing, LLC bring this action seeking damages on behalf of themselves individually and on behalf of a class pursuant to the provisions of Rule 23(a) and Rule 23(b)(1) and (b)(3) of the Federal Rules of Civil Procedure, with such class (the "Alabama Class") defined as: 54 10 All persons or entities who, during the period from April 17, 2008 to the present (the "Class Period"), have paid health insurance premiums to BCBS-AL for individual or small group full-service commercial health insurance. 264. Third, Plaintiffs Linda Mills and Frank Curtis bring this action seeking damages on behalf of themselves individually and on behalf of a class pursuant to the provisions of Rule 23(a) and Rule 23(b)(1) and (b)(3) of the Federal Rules of Civil Procedure, with such class (the "Arkansas Class") defined as: All persons or entities who, during the period from October 1, 2008 to the present (the "Class Period"), have paid health insurance premiums to BCBS-AR for individual or small group full-service commercial health insurance. 265. Fourth, Plaintiff Judy Sheridan brings this action seeking damages on behalf of herself individually and on behalf of a class pursuant to the provisions of Rule 23(a) and Rule 23(b)(1) and (b)(3) of the Federal Rules of Civil Procedure, with such class (the "California Class") defined as: All persons or entities who, during the period from October 1, 2008 to the present (the "Class Period"), have paid health insurance premiums to BC-CA or BS-CA for individual or small group full-service commercial health insurance. 266. Fifth, Plaintiff Jennifer Ray Davidson brings this action seeking damages on behalf of herself individually and on behalf of a class pursuant to the provisions of Rule 23(a) and Rule 23(b)(1) and (b)(3) of the Federal Rules of Civil Procedure, with such class (the "Florida Class") defined as: All persons or entities who, during the period from October 1, 2008 to the present (the "Class Period"), have paid health insurance premiums to BCBS-FL for individual or small group full-service commercial health insurance. 267. Sixth, Plaintiffs Lawrence W. Cohn, AAL, ALC and Saccoccio & Lopez bring this action seeking damages on behalf of themselves individually and on behalf of a class 55 10 pursuant to the provisions of Rule 23(a) and Rule 23(b)(1) and (b)(3) of the Federal Rules of Civil Procedure, with such class (the "Hawai'i Class") defined as: All persons or entities who, during the period from October 1, 2008 to the present (the "Class Period"), have paid health insurance premiums to BCBS-HI for individual or small group full-service commercial health insurance. 268. Seventh, Plaintiffs Monika Bhuta, Michael E. Stark, and Falcon Picture Group LLC bring this action seeking damages on behalf of themselves individually and on behalf of a class pursuant to the provisions of Rule 23(a) and Rule 23(b)(1) and (b)(3) of the Federal Rules of Civil Procedure, with such class (the "Illinois Class") defined as: All persons or entities who, during the period from August 21, 2008 to the present (the "Class Period"), have paid health insurance premiums to BCBS-IL for individual or small group full-service commercial health insurance. 269. Eighth, Plaintiffs Renee E. Allie and Galactic Funk Touring, Inc. bring this action seeking damages on behalf of themselves individually and on behalf of a class pursuant to the provisions of Rule 23(a) and Rule 23(b)(1) and (b)(3) of the Federal Rules of Civil Procedure, with such class (the "Louisiana Class") defined as: All persons or entities who, during the period from June 6, 2008 to the present (the "Class Period"), have paid health insurance premiums to BCBS-LA for individual or small group full-service commercial health insurance. 270. Ninth, Plaintiff John G. Thompson brings this action seeking damages on behalf of himself individually and on behalf of a class pursuant to the provisions of Rule 23(a) and Rule 23(b)(1) and (b)(3) of the Federal Rules of Civil Procedure, with such class (the "Michigan Class") defined as: All persons or entities who, during the period from October 1, 2008 to the present (the "Class Period"), have paid health insurance premiums to BCBS-MI for individual or small group full-service commercial health insurance. 56 10 271. Tenth, Plaintiffs Harry M. McCumber and Gaston CPA Firm bring this action seeking damages on behalf of themselves individually and on behalf of a class pursuant to the provisions of Rule 23(a) and Rule 23(b)(1) and (b)(3) of the Federal Rules of Civil Procedure, with such class (the "Mississippi Class") defined as: All persons or entities who, during the period from October 1, 2008 to the present (the "Class Period"), have paid health insurance premiums to BCBS-MS for individual or small group full-service commercial health insurance. 272. Eleventh, Plaintiff Jeffrey S. Garner brings this action seeking damages on behalf of himself individually and on behalf of a class pursuant to the provisions of Rule 23(a) and Rule 23(b)(1) and (b)(3) of the Federal Rules of Civil Procedure, with such class (the "Missouri Class") defined as: All persons or entities who, during the period from October 1, 2008 to the present (the "Class Period"), have paid health insurance premiums to BCBS-MO or BCBS-KC for individual or small group full-service commercial health insurance. 273. Twelfth, Plaintiffs Erik Barstow and GC/AAA Fences, Inc. bring this action seeking damages on behalf of themselves individually and on behalf of a class pursuant to the provisions of Rule 23(a) and Rule 23(b)(1) and (b)(3) of the Federal Rules of Civil Procedure, with such class (the "New Hampshire Class") defined as: All persons or entities who, during the period from October 1, 2008 to the present (the "Class Period"), have paid health insurance premiums to BCBS-NH for individual or small group full-service commercial health insurance. 274. Thirteenth, Plaintiffs Keith O. Cerven, Teresa M. Cerven, and SHGI Corp. bring this action seeking damages on behalf of themselves individually and on behalf of a class pursuant to the provisions of Rule 23(a) and Rule 23(b)(1) and (b)(3) of the Federal Rules of Civil Procedure, with such class (the "North Carolina Class") defined as: 57 10 All persons or entities who, during the period from February 7, 2008 to the present (the "Class Period"), have paid health insurance premiums to BCBS-NC for individual or small group full-service commercial health insurance. 275. Fourteenth, Plaintiffs Kathleen Scheller and Iron Gate Technology, Inc. bring this action seeking damages on behalf of themselves individually and on behalf of a class pursuant to the provisions of Rule 23(a) and Rule 23(b)(1) and (b)(3) of the Federal Rules of Civil Procedure, with such class (the "Western Pennsylvania Class") defined as: All persons or entities who, during the period from October 1, 2008 to the present (the "Class Period"), have paid health insurance premiums to Highmark BCBS for individual or small group full-service commercial health insurance. 276. Fifteenth, Plaintiff Nancy Thomas brings this action seeking damages on behalf of herself individually and on behalf of a class pursuant to the provisions of Rule 23(a) and Rule 23(b)(1) and (b)(3) of the Federal Rules of Civil Procedure, with such class (the "Rhode Island Class") defined as: All persons or entities who, during the period from October 1, 2008 to the present (the "Class Period"), have paid health insurance premiums to BCBS-RI for individual or small group full-service commercial health insurance. 277. Sixteenth, Plaintiff Shred 360, LLC brings this action seeking damages on behalf of itself individually and on behalf of a class pursuant to the provisions of Rule 23(a) and Rule 23(b)(1) and (b)(3) of the Federal Rules of Civil Procedure, with such class (the "South Carolina Class") defined as: All persons or entities who, during the period from October 1, 2008 to the present (the "Class Period"), have paid health insurance premiums to BCBS-SC for individual or small group full-service commercial health insurance. 278. Seventeenth, Plaintiffs Danny J. Curlin and Amedius, LLC bring this action seeking damages on behalf of themselves individually and on behalf of a class pursuant to the 58 10 provisions of Rule 23(a) and Rule 23(b)(1) and (b)(3) of the Federal Rules of Civil Procedure, with such class (the "Tennessee Class") defined as: All persons or entities who, during the period from May 9, 2008 to the present (the "Class Period"), have paid health insurance premiums to BCBS-TN for individual or small group full-service commercial health insurance. 279. Eighteenth, Plaintiff Brett Watts brings this action seeking damages on behalf of himself individually and on behalf of a class pursuant to the provisions of Rule 23(a) and Rule 23(b)(1) and (b)(3) of the Federal Rules of Civil Procedure, with such class (the "Texas Class") defined as: All persons or entities who, during the period from October 1, 2008 to the present (the "Class Period"), have paid health insurance premiums to BCBS-TX for individual or small group full-service commercial health insurance. 280. The Classes are so numerous and geographically dispersed that joinder of all members is impracticable. While Plaintiffs do not know the number and identity of all members of the Classes, Plaintiffs believe that there are millions of Class members, the exact number and identities of which can be obtained from BCBSA and the Individual Blue Plans. 281. There are questions of law or fact common to the Classes, including but not limited to: a. Whether the restrictions set forth in the BCBSA license agreements are per se violations of Section 1 of the Sherman Act, or are otherwise prohibited under Section 1 of the Sherman Act; b. Whether, and the extent to which, premiums charged by the Individual Blue Plans to Class members have been artificially inflated as a result of the illegal restrictions in the BCBSA license agreements; 59 10 c. Whether the use of Most Favored Nation ("MFN") provisions in certain Individual Blue Plans' provider agreements is anti-competitive, by raising barriers of entry and by increasing the costs of care and insurance; and d. Whether, and the extent to which, premiums charged by the Individual Blue Plans have been artificially inflated as a result of the anticompetitive practices adopted by them. 282. The questions of law or fact common to the members of the Classes predominate over any questions affecting only individual members, including legal and factual issues relating to liability and damages. 283. All Plaintiffs are members of the Nationwide Class; their claims are typical of the claims of the members of that Class; and Plaintiffs will fairly and adequately protect the interests of the members of that Class. 284. Each set of Plaintiffs seeking to represent their respective damages Class are members of that Class, their claims are typical of the members of that Class, and Plaintiffs will fairly and adequately protect the interests of the members of that Class. 285. Plaintiffs and their respective classes are direct purchasers of individual or small group full-service commercial health insurance from the Individual Blue Plan that dominates their state or region, and their interests are coincident with and not antagonistic to other members of that Class. In addition, Plaintiffs have retained and are represented by counsel who are competent and experienced in the prosecution of antitrust and class action litigation. 286. The prosecution of separate actions by individual members of the Classes would create a risk of inconsistent and varying adjudications, establishing incompatible standards of conduct for BCBSA and the Individual Blue Plans. 60 10 287. BCBSA and the Individual Blue Plans have acted on grounds generally applicable to the Nationwide Class, thereby making appropriate final injunctive relief with respect to the Nationwide Class as a whole. 288. A class action is superior to other available methods for the fair and efficient adjudication of this controversy. The Classes are readily definable and are ones for which the Individual Blue Plans have records. Prosecution as a class action will eliminate the possibility of repetitious litigation. Treatment of this case as a class action will permit a large number of similarly situated persons to adjudicate their common claims in a single forum simultaneously, efficiently, and without the duplication of effort and expense that numerous individual actions would engender. Class treatment will also permit the adjudication of relatively small claims by many class members who otherwise could not afford to litigate an antitrust claim such as is asserted in this Complaint. This class action does not present any difficulties of management that would preclude its maintenance as a class action. 61 10 FACTUAL BACKGROUND History of the Blue Cross and Blue Shield Plans and of BCBSA 289. The history of the Blue Cross and Blue Shield plans demonstrates that the plans arose independently, that they jointly conceived of the Blue Cross and Blue Shield marks in a coordinated effort to create a national brand that each would operate within its local area, and that they quickly developed into local monopolies in the growing market for health care coverage. While originally structured as non-profit organizations, since the 1980s, these local Blue plans have increasingly operated as for-profit entities: either by formally converting to for- profit status, or by generating substantial surpluses that have been used to fund multi-million dollar salaries and bonuses for their administrators. 290. BCBSA was created by the local Blue plans and is entirely controlled by those plans. Moreover, the history of BCBSA demonstrates that the origin of the geographic restrictions in its trademark licenses was an effort to avoid competition between the various Blue plans, and to ensure that each Blue plan would retain a dominant position within its local service area. Development of the Blue Cross Plans 291. In 1934, an administrator named E.A. von Steenwyck helped develop a prepaid hospital plan in St. Paul, Minnesota. In his effort to help sell the plan, he commissioned a poster that showed a nurse wearing a uniform containing a blue Geneva cross, and used the symbol and the name "Blue Cross" to identify the plan. This is believed to be the first use of the Blue Cross symbol and name as a brand symbol for a health care plan. Within the year, other prepaid hospital plans began independently using the Blue Cross symbol. 62 10 292. In 1937, Blue Cross plan executives met in Chicago. At that meeting, American Hospital Association ("AHA") officials announced that prepaid hospital plans meeting certain standards of approval would receive institutional membership in the AHA. In 1938, the Committee on Hospital Service adopted a set of principles to guide its "approval" of prepaid hospital plans. One such principle was that the plans would not compete with each other. When the approval program went into effect, there were already 38 independently formed prepaid hospital plans with a total of 1,365,000 members. 293. In 1939, the Blue Cross mark was adopted as the official emblem of those prepaid hospital plans that received the approval of the AHA. 294. In 1941, the Committee on Hospital Service, which had changed its name to the Hospital Service Plan Committee, introduced a new standard: that approval would be denied to any plan operating in another plan's service area. Despite this, the independently formed prepaid hospital plans, now operating under the Blue Cross name, engaged in fierce competition with each other and often entered each others' territories. The authors of The Blues: A History of the Blue Cross and Blue Shield System, which BCBSA sponsored and its officers reviewed prior to publication, describe the heated competition at that time: The most bitter fights were between intrastate rivals. . . . Bickering over nonexistent boundaries was perpetual between Pittsburgh and Philadelphia, for example. . . . John Morgan, who directed a Plan in Youngstown, Ohio, for nearly twenty-five years before going on to lead the Blue Cross Plan in Cincinnati, recalled: "In Ohio, New York, and West Virginia, we were knee deep in Plans." At one time or another, there were Plans in Akron, Canton, Columbus, Cleveland, Cincinnati, Lima, Portsmouth, Toledo, and Youngstown. . . . By then there were also eight Plans in New York and four in West Virginia. . . . Various reciprocity agreements between the Plans were proposed, but they generally broke down because the Commission did not have the power to enforce them. 295. For many years, Cross-on-Cross competition continued, as described in Odin Anderson's Blue Cross Since 1929: Accountability and the Public Trust, which was funded by 63 10 the Blue Cross Association, one predecessor to BCBSA. Anderson points to Illinois and North Carolina, where "[t]he rivalry [between a Chapel Hill plan and a Durham plan] was fierce," as particular examples, and explains that though "Blue Cross plans were not supposed to overlap service territories," such competition was "tolerated by the national Blue Cross agency for lack of power to insist on change." 296. By 1975, the Blue Cross plans had a total enrollment of 84 million subscribers. Development of the Blue Shield Plans 297. The development of what became the Blue Shield plans followed, and largely imitated, the development of the Blue Cross plans. Blue Shield plans were designed to provide a mechanism for covering the cost of physician care, just as the Blue Cross plans had provided a mechanism for covering the cost of hospital care. Similarly, the Blue Cross hospital plans were developed in conjunction with the AHA (which represents hospitals), while the Blue Shield medical society plans were developed in conjunction with the American Medical Association ("AMA") (which represents physicians). 298. Like the Blue Cross symbol, the Blue Shield symbol was developed by a local medical society plan, and then proliferated as other plans adopted it. 299. In 1946, the AMA formed the Associated Medical Care Plans ("AMCP"), a national body intended to coordinate and "approve" the independent Blue Shield plans. When the AMCP proposed that the Blue Shield symbol be used to signify that a Blue Shield plan was "approved," the AMA responded, "It is inconceivable to us that any group of state medical society Plans should band together to exclude other state medical society programs by patenting a term, name, symbol, or product." In 1960, the AMCP changed its name to the National 64 10 Association of Blue Shield Plans, which in 1976 changed its name to the Blue Shield Association. 300. By 1975, the Blue Shield plans had a total enrollment of 73 million. Creation of the Blue Cross and Blue Shield Association 301. Historically, the Blue Cross plans and the Blue Shield plans were fierce competitors. During the early decades of their existence, there were no restrictions on the ability of a Blue Cross plan to compete with or offer coverage in an area already covered by a Blue Shield plan. Cross-on-Cross and Shield-on-Shield competition also flourished. 302. By the late 1940s, the Blue plans faced growing competition not just from each other, but also from commercial insurance companies that had recognized the success of the Blue plans and were now entering the market. Between 1940 and 1946, the number of hospitalization policies held by commercial insurance companies rose from 3.7 million to 14.3 million policies. While the Blues remained dominant in most markets, this growth of competition was a threat. 303. From 1947 to 1948, the Blue Cross Commission and the AMCP attempted to develop a national agency for all Blue plans, to be called the Blue Cross and Blue Shield Health Service, Inc., but the proposal failed. One reason given for its failure was the AMA's fear that a restraint of trade action might result from such cooperation. 304. During the 1950s, while competing with commercial insurers for the opportunity to provide insurance to federal government employees, the Plans were at war with one another. As the former marketing chief of the National Association of Blue Shield Plans admitted, "Blue Cross was separate; Blue Shield was separate. Two boards; two sets of managements. Rivalries, animosities, some days. . . pure, unadulterated hatred of each other." 65 10 305. To address the increasing competition, the Blues sought to ensure "national cooperation" among the different Blue entities. The Plans accordingly agreed to centralize the ownership of their trademarks and trade names. In prior litigation, BCBSA has stated that the local plans transferred their rights in the Blue Cross and Blue Shield names and marks to the precursors of BCBSA because the local plans, which were otherwise actual or potential competitors, "recognized the necessity of national cooperation." 306. In 1954, the Blue Cross plans transferred their rights in each of their respective Blue Cross trade names and trademarks to the AHA. In 1972, the AHA assigned its rights in these marks to the Blue Cross Association. 307. Likewise, in 1952, the Blue Shield plans agreed to transfer their ownership rights in their respective Blue Shield trade names and trademarks to the National Association of Blue Shield Plans, which in 1976 was renamed the Blue Shield Association. 308. During the 1970s, local Blue Cross and Blue Shield plans all over the U.S. began merging. By 1975, the executive committees of the Blue Cross Association and the National Association of Blue Shield Plans were meeting four times a year. In 1978, the Blue Cross Association and the National Association of Blue Shield Plans (now called the Blue Shield Association) consolidated their staffs, although they retained separate boards of directors. 309. In 1982, the Blue Cross Association and the Blue Shield Association merged to form BCBSA. At that time, BCBSA became the sole owner of the various Blue Cross and Blue Shield trademarks and trade names that had previously been owned by the local plans. 310. In November 1982, after heated debate, BCBSA's member plans agreed to two propositions: (1) by the end of 1984, all existing Blue Cross plans and Blue Shield plans would consolidate at a local level to form Blue Cross and Blue Shield plans; and (2) by the end of 1985, 66 10 all Blue plans within a state would further consolidate, ensuring that each state would have only one Blue plan. As a result of these goals, the number of member plans declined sharply from 110 in 1984, to 75 in 1989, to 38 today. 311. Even consolidation did not end competition between Blue plans. In the early 1980s, for example, Blue Cross of Northeastern New York and Blue Shield of Northeastern New York competed head-to-head. 312. During the 1980s and afterwards, the plans began to operate less like charitable entities and more like for-profit corporations, accumulating substantial surpluses. In 1986, Congress revoked the Blues' tax-exempt status, freeing them to form for-profit subsidiaries. 313. In 1992, BCBSA ceased requiring Blue Cross and Blue Shield licensees to be not- for-profit entities. As a result, many member plans converted to for-profit status. One such plan, now called WellPoint, has grown to become, by some measures, the largest health insurance company in the country. While nominally still characterized as not-for-profit, a number of the Individual Blue Plans generate substantial earnings and surpluses, and pay their senior administrators and officials substantial salaries and bonuses – often in the multi-million dollar range. 314. From 1981 to 1986, the Blue plans lost market share at a rate of approximately one percent per year. At the same time, the amount of competition among Blue plans, and from non-Blue subsidiaries of Blue plans, increased substantially. As a result of this increased competition, in April of 1987, the member plans of BCBSA held an "Assembly of Plans" -- a series of meetings held for the purpose of determining how they would and would not compete against each other. During these meetings, these independent health insurers and competitors agreed to maintain exclusive service areas when operating under the Blue brand, thereby 67 10 eliminating "Blue on Blue" competition. However, the Assembly of Plans did not restrain competition by non-Blue subsidiaries of Blue plans – an increasing "problem" that had caused complaints from many Blue plans. 315. After the 1986 revocation of the Blues' tax-exempt status and throughout the 1990s, the number of non-Blue subsidiaries of Blue plans increased. As quoted in The Blues: A History of the Blue Cross and Blue Shield System, former BCBSA counsel Marv Reiter explained in 1991, "Where you had a limited number of subsidiaries before, clearly they mushroomed like missiles. . . . We went from 50 or 60 nationally to where there's now 400 and some." These subsidiaries continued to compete with Blue plans. As a result, the member plans of BCBSA discussed ways to rein in such non-Blue branded competition. 316. At some later date, the Blue Cross and Blue Shield plans together agreed to restrict the territories in which they would operate under any brand, Blue or non-Blue, as well as the ability of non-members of BCBSA to control or acquire the member plans. These illegal restraints are discussed below. Allegations Demonstrating Control of BCBSA By Member Plans 317. BCBSA calls itself "a national federation of 38 independent, community-based and locally operated Blue Cross and Blue Shield companies" and "the trade association for the Blue Cross Blue Shield companies." 318. The Plans are the members of, and govern, BCBSA. BCBSA is entirely controlled by its member plans, all of whom are independent health insurance companies that license the Blue Cross and/or Blue Shield trademarks and trade names, and that, but for any agreements to the contrary, could and would compete with one another. On its website, BCBSA 68 10 admits that in its "unique structure," "the Blue Cross and Blue Shield companies are [its] customers, [its] Member Licensees and [its] governing Board." 319. As at least one federal court has recognized, BCBSA "is owned and controlled by the member plans" to such an extent that "by majority vote, the plans could dissolve the Association and return ownership of the Blue Cross and Blue Shield names and marks to the individual plans." Central Benefits Mut. Ins. Co. v. Blue Cross and Blue Shield Ass'n, 711 F. Supp. 1423, 1424-25 (S.D. Ohio 1989). 320. The Blue Cross and Blue Shield licensees control the Board of Directors of BCBSA. In a pleading it filed during litigation in the Northern District of Illinois, BCBSA admitted that its Board of Directors consists of "the chief executive officer from each of its Member Plans and BCBSA's own chief executive officer." The current chairman of the Board of Directors, Alphonso O'Neil-White, is also the current President and CEO of BlueCross BlueShield of Western New York. The CEO of each of the Individual Blue Plans serves on the Board of Directors of BCBSA. The Board of Directors of BCBSA meets at least annually. License Agreements and Restraints on Competition 321. The independent Blue Cross and Blue Shield licensees also control BCBSA's Plan Performance and Financial Standards Committee (the "PPFSC"). The PPFSC is a standing committee of the BCBSA Board of Directors that is composed of nine member Plan CEOs and three independent members. 322. The independent Blue Cross and Blue Shield licensees control the entry of new members into BCBSA. In a brief it filed during litigation in the Sixth Circuit Court of Appeals, BCBSA admitted that "[t]o be eligible for licensure, [an] applicant. . . must receive a majority 69 10 vote of [BCBSA's] Board" and that BCBSA "seeks to ensure that a license to use the Blue Marks will not fall into the hands of a stranger the Association has not approved." 323. The independent Blue Cross and Blue Shield licensees control the rules and regulations that all members of BCBSA must obey. According to the brief BCBSA filed during litigation in the Sixth Circuit Court of Appeals, these rules and regulations include the Blue Cross License Agreement and the Blue Shield License Agreement (collectively, the "License Agreements"), the Membership Standards Applicable to Regular Members (the "Membership Standards"), and the Guidelines to Administer Membership Standards (the "Guidelines"). 324. The License Agreements state that they "may be amended only by the affirmative vote of three-fourths of the Plans and three-fourths of the total then current weighted vote of all the Plans." Under the terms of the License Agreements, a plan "agrees. . . to comply with the Membership Standards." In its Sixth Circuit brief, BCBSA described the provisions of the License Agreements as something the member plans "deliberately chose," "agreed to," and "revised." The License Agreements explicitly state that the member plans most recently met to adopt amendments, if any, to the licenses on June 21, 2012. 325. The Guidelines state that the Membership Standards and the Guidelines "were developed by the [PPFSC] and adopted by the Member Plans in November 1994 and initially became effective as of December 31, 1994;" that the Membership Standards "remain in effect until otherwise amended by the Member Plans;" that revisions to the Membership Standards "may only be made if approved by a three-fourths or greater affirmative Plan and Plan weighted vote;" that "new or revised guidelines shall not become effective. . . unless and until the Board of Directors approves them;" and that the "PPFSC routinely reviews" the Membership Standards 70 10 and Guidelines "to ensure that. . . all requirements (standards and guidelines) are appropriate, adequate and enforceable." 326. The independent Blue Cross and Blue Shield licensees police the compliance of all members of BCBSA with the rules and regulations of BCBSA. The Guidelines state that the PPFSC "is responsible for making the initial determination about a Plan's compliance with the license agreements and membership standards. Based on that determination, PPFSC makes a recommendation to the BCBSA Board of Directors, which may accept, reject, or modify the recommendation." In addition, the Guidelines state that "BCBSA shall send a triennial membership compliance letter to each [member] Plan's CEO," which includes, among other things, "a copy of the Membership Standards and Guidelines, a report of the Plan's licensure and membership status by Standard, and PPFSC comments or concerns, if any, about the Plan's compliance with the License Agreements and Membership Standards." In response, "[t]he Plan CEO or Corporate Secretary must certify to the PPFSC that the triennial membership compliance letter has been distributed to all Plan Board Members." 327. The independent Blue Cross and Blue Shield licensees control and administer the disciplinary process for members of BCBSA that do not abide by BCBSA's rules and regulations. The Guidelines describe three responses to a member plan's failure to comply— "Immediate Termination," "Mediation and Arbitration," and "Sanctions"—each of which is administered by the PPFSC and could result in the termination of a member plan's license. 328. The independent Blue Cross and Blue Shield licensees likewise control the termination of existing members from BCBSA. The Guidelines state that based on the PPFSC's "initial determination about a Plan's compliance with the license agreements and membership standards. . . . PPFSC makes a recommendation to the BCBSA Board of Directors, which may 71 10 accept, reject, or modify the recommendation." However, according to the Guidelines, "a Plan's licenses and membership [in BCBSA] may only be terminated on a three-fourths or greater affirmative Plan and Plan weighted vote." In its Sixth Circuit brief, BCBSA admitted that the procedure for terminating a license agreement between BCBSA and a member plan includes a "double three-quarters vote" of the member plans of the BCBSA: "In a double three-quarters vote, each plan votes twice – first with each Plan's vote counting equally, and then with the votes weighted primarily according to the number of subscribers." Horizontal Agreements 329. The independent Blue Cross and Blue Shield licensees are potential competitors that use their control of BCBSA to coordinate their activities. As a result, the rules and regulations imposed "by" the BCBSA on the member plans are in truth imposed by the member plans on themselves. 330. Each BCBSA licensee is an independent legal organization. In a pleading BCBSA filed during litigation in the Southern District of Florida, BCBSA admitted that "[t]he formation of BCBSA did not change each plan's fundamental independence." The License Agreements state that "[n]othing herein contained shall be construed to constitute the parties hereto as partners or joint venturers, or either as the agent of the other." As BCBS-AL's group health insurance policy contract explains, "Blue Cross and Blue Shield of Alabama is an independent corporation operating under a license from the Blue Cross and Blue Shield Association, an association of independent Blue Cross and Blue Shield plans. The Blue Cross and Blue Shield Association permits us to use the Blue Cross and Blue Shield service marks in the state of Alabama. Blue Cross and Blue Shield is not acting as an agent of the Blue Cross and Blue Shield Association." 72 10 331. The independent Blue Cross and Blue Shield licensees include many of the largest health insurance companies in the United States. By some measures, WellPoint is the largest health insurance company in the nation. Similarly, fifteen of the twenty-five largest health insurance companies in the country are BCBSA licensees. On its website, BCBSA states that its members together provide "coverage for nearly 100 million people – one-third of all Americans" and that, nationwide, "more than 96% of hospitals and 91% of professional providers contract with Blue Cross and Blue Shield companies – more than any other insurers." Absent the restrictions that the independent Blue Cross and Blue Shield licensees have chosen to impose on themselves, discussed below, these companies would compete against each other in the market for commercial health insurance. 332. In its Sixth Circuit brief, BCBSA admitted that the Member Plans formed the precursor to BCBSA when they "recognized the necessity of national coordination." The authors of The Blues: A History of the Blue Cross and Blue Shield System describe the desperation of the Blue Cross and Blue Shield licensees before they agreed to impose restrictions on themselves: The subsidiaries kept running into each other—and each other's parent Blue Plans—in the marketplace. Inter-Plan competition had been a fact of life from the earliest days, but a new set of conditions faced the Plans in the 1980s, now in a mature and saturated market. New forms of competition were springing up at every turn, and market share was slipping year by year. Survival was at stake. The stronger business pressure became, the stronger the temptation was to breach the service area boundaries for which the Plans were licensed. . . . 333. On its website, BCBSA admits that "[w]hen the individual Blue companies' priorities, business objectives and corporate culture conflict, it is our job to help them develop a united vision and strategy" and that BCBSA "[e]stablishes a common direction and cooperation between [BCBSA] and the 39 [now 38] Blue companies." As BCBSA's general counsel, Roger G. Wilson, explained to the Insurance Commissioner of Pennsylvania, "BCBSA's 39 [now 38] 73 10 independent licensed companies compete as a cooperative federation against non-Blue insurance companies." One BCBSA member plan admitted in its February 17, 2011 Form 10-K that "[e]ach of the [38] BCBS companies. . . works cooperatively in a number of ways that create significant market advantages. . . ." 334. As the foregoing demonstrates, BCBSA is a vehicle used by independent health insurance companies to enter into agreements that restrain competition. Because BCBSA is owned and controlled by its member plans, any agreement between BCBSA and one of its member plans constitutes a horizontal agreement between and among the member plans themselves. The Horizontal Agreements Not To Compete 335. The rules and regulations of BCBSA, including, but not limited to, the License Agreements, the Membership Standards, and the Guidelines, constitute horizontal agreements between competitors, the independent Blue Cross and Blue Shield licensees, to divide the geographic market for health insurance. As such, they are a per se violation of Section 1 of the Sherman Act. 336. Defendants have divided U.S. health care markets for insurance among themselves by dividing the nation into exclusive service areas allocated to individual Blues. Through the License Agreements, Guidelines, and Membership Standards, which the independent Blue Cross and Blue Shield licensees created, control, and enforce, each independent Blue Cross and Blue Shield licensee agrees that neither it nor its subsidiaries will compete under the licensed Blue Cross and Blue Shield trademarks and trade names outside of a designated "Service Area." The License Agreement defines each licensee's Service Area as "the 74 10 geographical area(s) served by the Plan on June 10, 1972, and/or as to which the Plan has been granted a subsequent license." 337. Further, Defendants have allocated U.S. health care markets for insurance among themselves by agreeing to limit their competition against one another when not using the Blue names. The Guidelines and Membership Standards, which the independent Blue Cross and Blue Shield licensees created, control, and enforce, and with which each licensee must agree to comply as part of the License Agreements, establish two key restrictions on non-Blue competition. First, each independent Blue Cross and Blue Shield licensee agrees that at least 80 percent of the annual revenue that it or its subsidiaries generate from within its designated Service Area (excluding Medicare and Medicaid) shall be derived from services offered under the licensed Blue Cross and Blue Shield trademarks and trade names. This provision directly limits the ability of each Blue plan to generate revenue from non-Blue branded business. This provision also thereby limits the ability of each plan to develop non-Blue brands that could and would compete with Blue plans. It further discourages and disincentivizes each plan from developing any non-Blue branded businesses. 338. Second, each independent Blue Cross and Blue Shield licensee further agrees that at least two-thirds of the annual revenue generated by it or its subsidiaries from either inside or outside of its designated Service Area (excluding Medicare and Medicaid) shall be attributable to services offered under the Blue Cross and Blue Shield trademarks and trade names. The Guidelines provide that national enrollment can be substituted for annual revenue, making the alternative restriction that a plan will derive no less than 66-2/3 percent of its national enrollment from its Blue-brand business. This provision directly limits the ability of each Blue plan to generate revenue from non-Blue branded business, and thereby limits the ability of each plan to 75 10 develop non-Blue brands that could and would compete with Blue plans. It further discourages and disincentivizes each plan from developing any non-Blue branded businesses. 339. The one-third cap on non-Blue revenue provides a licensee with minimal, if any, incentive to compete outside its Service Area. To do so, the licensee would have to buy, rent, or build a provider network under a non-Blue brand, while ensuring that revenue derived from that brand did not exceed the one-third cap. Should the licensee offer services and products under the non-Blue brand within its Service Area (which is likely, since that is its base of operations), that would further reduce the amount of non-Blue revenue it is permitted to earn from outside its designated area. Thus, the potential upside of making an investment in developing business outside of a designated area is severely limited, which obviously creates a disincentive from ever making that investment. 340. In sum, each independent Blue Cross and Blue Shield licensee has agreed with its potential competitors that each will exercise the exclusive right to use the Blue brand within a designated geographic area, derive none of its revenue from services offered under the Blue brand outside of that area, and derive at most one-third of its revenue from outside of its exclusive area, using services offered under a non-Blue brand. The latter amount will be further reduced if the licensee derives any of its revenue within its designated geographic area from services offered under a non-Blue brand. 341. The foregoing restrictions on the ability of Blue plans to generate revenue outside of their service areas constitute agreements between competitors to divide and allocate geographic markets, and therefore are per se violations of Section 1 of the Sherman Act. 342. More than one Blue Cross and Blue Shield licensee has publicly admitted the existence of these territorial market divisions. For example, the former Blue Cross licensee in 76 10 Ohio alleged that BCBSA member plans agreed to include these restrictions in the Guidelines in 1996 in an effort to block the sale of one member plan to a non-member that might present increased competition to another member plan. 343. The largest Blue licensee, WellPoint, is a publicly-traded company, and therefore is required by the SEC rules to describe the restrictions on its ability to do business. Thus, in its Form 10-K filed February 22, 2013, WellPoint stated that it had "no right to market products and services using the Blue Cross and Blue Shield names and marks outside of the states in which we are licensed to sell Blue Cross and Blue Shield products." WellPoint has further stated that the "license agreements with the BCBSA contain certain requirements and restrictions regarding our operations and our use of the Blue Cross and Blue Shield names and marks, including. . . a requirement that at least 80% . . . of a licensee's annual combined local net revenue, as defined by the BCBSA, attributable to health benefit plans within its service area must be sold, marketed, administered or underwritten under the Blue Cross and Blue Shield names and marks" and "a requirement that at least 66 2/3% of a licensee's annual combined national net revenue, as defined by the BCBSA, attributable to health benefit plans must be sold, marketed, administered or underwritten under the Blue Cross and Blue Shield names and marks." 344. Likewise, in its Form 10-K filed March 14, 2013, Triple-S Salud, the Blue licensee for Puerto Rico, explained that "[p]ursuant to our license agreements with BCBSA, at least 80% of the revenue that we earn from health care plans and related services in [its Service Area] and at least 66.7% of the revenue that we earn from (or at least 66.7% of the enrollment for) health care plans and related services both in [and outside its Service Area], must be sold, marketed, administered, or underwritten through use of the Blue Cross Blue Shield" name and mark. Further, the Triple-S licensee stated that the territorial restrictions "may limit the extent to 77 10 which we will be able to expand our health care operations, whether through acquisitions of existing managed care providers or otherwise, in areas where a holder of an exclusive right to the Blue Cross Blue Shield Names and Marks is already present." 345. Despite these public admissions, both BCBSA and its member plans have attempted to keep the territorial restrictions as secret as possible. When asked by the Insurance Commissioner of Pennsylvania to "[p]lease describe any formal or informal limitations that BSBSA [sic] places on competition among holders of the [Blue] mark as to their use of subsidiaries that do not use the mark," BCBSA's general counsel responded that "BCBSA licensed companies may compete anywhere with non-Blue branded business. . . . The rules on what the plans do in this regard are contained in the license. However, the license terms themselves are proprietary to BCBSA, and. . . we would prefer not to share such trade secrets with BCBSA's competitors." 346. The member plans of BCBSA have agreed to impose harsh penalties on those that violate the territorial restrictions. According to the Guidelines, a licensee that violates one of the territorial restrictions could face "[l]icense and membership termination." If a member plan's license and membership are terminated, it loses the use of the Blue brands, which BCBSA admits on its website are "the most recognized in the health care industry." In addition, in the event of termination, a plan must pay a fee to BCBSA. According to WellPoint's February 22, 2013 Form 10-K filing, that "Re-establishment Fee," which was $98.33 per enrollee through December 31, 2012, "would allow the BCBSA to 're-establish' a Blue Cross and/or Blue Shield license in the vacated service area." 347. In sum, a terminated licensee would (1) lose the brand through which it derived the majority of its revenue; and (2) fund the establishment of a competing health insurer that 78 10 would replace it as the Blue licensee in its local area. These penalties essentially threaten to put out of existence any Blue member plan that breaches the territorial restrictions. 348. It is unsurprising, then, that most member plans do not operate outside of their Service Areas. Thus, while there are numerous Blue plans, and non-Blue businesses owned by such plans, that could and would compete effectively in each others' Service Areas but for the territorial restrictions, almost none compete outside their Service Areas under non-Blue names and brands, despite their ability to do so. 349. Even in the relatively rare instance in which Blue plans conduct operations outside of their Service Areas, they have been required to keep those operations tightly under control by preventing growth – exactly the opposite of how they would normally operate. The relationship between WellPoint and its non-Blue subsidiary, UniCare, is an illustrative example. WellPoint reported in its Form 10-K for the year ending December 31, 1999 that approximately 70 percent of its total medical membership was sold by its Blue-licensed subsidiary, Blue Cross of California. In its Form 10-K for the year ending December 31, 2000, this percentage decreased to approximately 67 percent. In its Form 10-K for the year ending December 31, 2001, after WellPoint had acquired the BCBSA member plans operating in Georgia and part of Missouri, it reported that approximately 78 percent of its total medical membership was in its Blue-licensed subsidiaries. 350. By the time WellPoint filed its 10-K for the year ending December 31, 2005, it had acquired the Blue licensees in fourteen states. For the first time, it admitted the existence of the territorial restrictions in the BCBSA licenses and stated that it was in compliance with them. As a result of these restrictions, from 1999 to 2002, while other Texas health insurers experienced average revenue growth of 17 percent, UniCare experienced growth of only 1.4 79 10 percent in Texas. During those same years, UniCare experienced virtually no growth in the state of Washington, while overall health insurance revenue in the state grew by 17 percent. Similarly, in New Jersey from 2000 to 2002, the number of out-of-Service-Area enrollees of WellChoice (now part of WellPoint and known as Empire BlueCross BlueShield) did not increase, despite an overall 25 percent growth rate for health insurers in the state during the same period. In Mississippi, between 2001 and 2002, premium revenue earned by most health insurance companies increased by more than 10 percent, but revenue for the non-Blue business of out-of-state Blue plans was either flat (in the case of UniCare) or negative (in the case of Anthem, now part of WellPoint). 351. In another example, as of 2010, one Pennsylvania Blue plan, Independence Blue Cross, had 2.4 million Blue-brand commercial health insurance enrollees in its service area of Southeastern Pennsylvania, and had close to 1 million non-Blue brand Medicare and Medicaid enrollees (to which the territorial restrictions do not apply) in Indiana, Kentucky, Pennsylvania, and South Carolina, but its non-Blue brand commercial health insurance subsidiary, AmeriHealth, which operates in New Jersey and Delaware, had an enrollment of only approximately 130,000, or 4 percent of Independence Blue Cross's total commercial health insurance enrollment. 352. The territorial restrictions agreed to by all BCBSA members operate to restrain competition by preventing member plans from competing with each other and with non-Blue plans. These prohibitions on competition apply no matter how favorable the efficiencies and economies of scale that might result from expansion of a Blue into a new area, and no matter how much premiums and other costs might be reduced if competition were permitted. 80 10 The Anticompetitive Acquisition Restrictions 353. In addition to the per se illegal territorial restrictions summarized above, the rules and regulations of BCBSA, which the independent Blue Cross and Blue Shield licensees created, control, and agree to obey, also include provisions that restrict the ability of non-members of BCBSA to acquire or obtain control over any member plan. 354. First, the rules and regulations prohibit acquisition of a Plan by a non-Blue entity without the approval of BCBSA. The Guidelines state that "[n]either a [Member] Plan nor any Larger Controlled Affiliate shall cause or permit an entity other than a [Member] Plan or a Licensed Controlled Affiliate thereof to obtain control of the [Member] Plan or Larger Controlled Affiliate or to acquire a substantial portion of its assets related to licensable services." Should a non-member wish to obtain such control or assets, it "is invited to apply to become a licensee." However, as alleged above, the member plans control the entry of new members into BCBSA. Should a non-member attempt to join BCBSA to obtain control of, or to acquire a substantial portion of, the assets of a member plan, the other member plans accordingly may block its membership by majority vote. 355. Second, the License Agreements contain a number of acquisition restrictions applicable to for-profit Blue Cross and Blue Shield licensees (i.e., to those licensees who would otherwise be capable of having their shares acquired). These include four situations in which a member plan's license will terminate automatically: (1) if any institutional investor become beneficially entitled to 10 percent or more of the voting power of the member plan; (2) if any non-institutional investor become beneficially entitled to 5 percent or more of the voting power of the member plan; (3) if any person become beneficially entitled to 20 percent or more of the member plan's then-outstanding common stock or equity securities; or (4) if the member plan 81 10 conveys, assigns, transfers, or sells substantially all of its assets to any person, or consolidates or merges with or into any person, other than a merger in which the member plan is the surviving entity and in which, immediately after the merger, no institutional investor is beneficially entitled to 10 percent or more of the voting power, no non-institutional investor is beneficially entitled to 5 percent or more of the voting power, and no person is beneficially entitled to 20 percent of more of the then-outstanding common stock or equity securities. These restrictions apply unless modified or waived in particular circumstances upon the affirmative vote both of a majority of the disinterested member plans and also of a majority weighted vote of the disinterested member plans. These restraints effectively preclude the sale of a BCBSA member to a non-member entity, absent special approval. 356. These acquisition restraints reduce competition in violation of the Sherman Act because they substantially reduce the ability of non-member insurance companies to expand their business and compete against the Individual Blue Plans. To expand into a new geographic area, a non-member insurance company faces the choice of whether to build its own network in that area, or to acquire a network by buying some or all of an existing plan doing business in that area. Through the acquisition restrictions, the Blue plans have conspired to force competitors to build their own networks, and have effectively prohibited those competitors from ever choosing what may often be the more efficient solution of acquiring new networks by purchasing some or all of an existing Blue plan. By preventing non-Blue entities from acquiring Blue entities and their networks, the acquisition restrictions in the BCBSA licenses effectively force competitors to adopt less efficient methods of expanding their networks, thereby reducing and in some instances eliminating competition. 82 10 357. Since the 1996 adoption of the acquisition restrictions, the only acquisitions of Blue Cross or Blue Shield licensees have been acquisitions by other member plans. During the period from 1996 to the present, there has been a wave of consolidation among the Blue plans: in 1996, there were 62 Blue licensees; at present, there are only 38. 358. By agreeing to restrict the pool of potential purchasers of a Blue licensee to other Blue licensees, the member plans of BCBSA raise the costs their rivals must incur to expand their networks and areas of practice, reduce efficiency, and protect themselves and each other from competition. The net effect is less competition and higher premium costs for consumers. The BCBSA Licensing Agreements Have Reduced Competition In Regions Across The United States 359. The Individual Blue Plans, as licensees, members, and parts of the governing body of BCBSA, have conspired with each other (the member plans of BCBSA) to create, approve, abide by, and enforce the rules and regulations of BCBSA, including the per se illegal territorial restrictions in the License Agreements and Guidelines. 360. But for the per se illegal territorial restrictions, many of the Individual Blue Plans would otherwise be significant competitors of each other in their respective Service Areas. As alleged above, fifteen of the twenty-five largest health insurance companies in the country are Blue plans: if all of these plans, together with all other BCBSA members, were able to compete with each other, the result would be lower costs and thus lower premiums paid by their enrollees. 361. For example, WellPoint is the largest health insurer in the country by total medical enrollment, with approximately 36 million enrollees. It is the Blue Cross and Blue Shield licensee for Georgia, Kentucky, and portions of Virginia, as well as for California (Blue Cross only), Colorado, Connecticut, Indiana, Maine, Missouri (excluding 30 counties in the Kansas City area), Nevada, New Hampshire, New York (as Blue Cross Blue Shield in 10 New 83 10 York City metropolitan and surrounding counties, and as Blue Cross or Blue Cross Blue Shield in selected upstate counties only), Ohio, and Wisconsin, and also serves customers throughout the country through its non-Blue brand subsidiary, UniCare. But for the illegal territorial restrictions summarized above, WellPoint would be likely to offer its health insurance services and products in many more regions across the United States in competition with the Individual Blue Plans in those regions. Such competition would result in lower health care costs and premiums paid by the other Individual Blue Plans' enrollees. 362. Similarly, with more than 13 million members, Health Care Service Corporation ("HCSC"), which operates BCBS-IL, BCBS-NM, BCBS-OK, and BCBS-TX, is the largest mutual health insurance company in the country and the fourth largest overall. But for the illegal territorial restrictions summarized above, HCSC would be likely to offer its health insurance services and products in many more regions across the United States in competition with the Individual Blue Plans in those regions. Such competition would result in lower health care costs and premiums paid by the other Individual Blue Plans' enrollees. 363. BCBS-MI is the ninth largest health insurer in the country by total medical enrollment, with approximately 4.5 million enrollees in its Service Area of Michigan. But for the illegal territorial restrictions summarized above, BCBS-MI would be likely to offer its health insurance services and products in more regions across the United States in competition with the Individual Blue Plans in those regions. Such competition would result in lower health care costs and premiums paid by the other Individual Blue Plans' enrollees. 364. Highmark, Inc. is the tenth largest health insurer in the country by total medical enrollment, with approximately 4.1 million enrollees. Its affiliated Blue plans include Highmark BCBS, BCBS-WV, and BCBS-DE. But for the illegal territorial restrictions summarized above, 84 10 Highmark would be likely to offer its health insurance services and products in more regions across the United States in competition with the Individual Blue Plans in those regions. Such competition would result in lower health care costs and premiums paid by the other Individual Blue Plans' enrollees. 365. BCBS-AL is the thirteenth largest health insurer in the country by total medical enrollment, by some measures, with approximately 3.5 million enrollees. But for the illegal territorial restrictions summarized above, BCBS-AL would be likely to offer its health insurance services and products in more regions across the United States in competition with the Individual Blue Plans in those regions. Such competition would result in lower health care costs and premiums paid by the other Individual Blue Plans' enrollees. 366. CareFirst Blue Cross and Blue Shield, which operates the Blue Plans Maryland, Washington, DC, and parts of Virginia, is the fourteenth largest health insurer in the U.S. and the largest health care insurer in the Mid-Atlantic region, with approximately 3.33 million subscribers. But for the illegal territorial restrictions summarized above, CareFirst would be likely to offer its health insurance services and products in more regions across the United States in competition with the Individual Blue Plans in those regions. Such competition would result in lower health care costs and premiums paid by the other Individual Blue Plans' enrollees. 367. BCBS-MA is the seventeenth largest health insurer in the country by total medical enrollment, with approximately 3 million enrollees in its service area of Massachusetts. But for the illegal territorial restrictions summarized above, BCBS-MA would be likely to offer its health insurance services and products in more regions across the United States in competition with the Individual Blue Plans in those regions. Such competition would result in lower health care costs and premiums paid by the other Individual Blue Plans' enrollees. 85 10 368. BCBS-FL is the eighteenth largest health insurer in the country by total medical enrollment, with approximately 2.9 million enrollees in its service area of Florida. But for the illegal territorial restrictions summarized above, BCBS-FL would be likely to offer its health insurance services and products in more regions across the United States in competition with the Individual Blue Plans in those regions. Such competition would result in lower health care costs and premiums paid by the other Individual Blue Plans' enrollees. Supra-Competitive Premiums Charged by BCBS Plans 369. From February 7, 2008 to the present, the Individual Blue Plans' illegal anticompetitive conduct, including its territorial market division agreements with the thirty-seven other members of BCBSA, has increased health care costs, leading to artificially inflated and/or supra-competitive premiums for individuals and small groups purchasing the Plans' full-service commercial health insurance in the relevant geographic markets. 370. Plaintiffs were damaged by paying supra-competitive premiums, which are to be calculated by estimating the premiums that would have been actually charged to consumers but for the Individual Blue Plans' antitrust violations, not the base rates or rate "schedules" filed with a state agency. 371. Plaintiffs have also suffered damages as a result of not being offered lower health insurance premium rates by competitors or potential competitors that have not entered the relevant market. The Widespread Use By BCBSA Licensees Of Anticompetitive Most Favored Nation Clauses 372. Over the past two decades (if not longer), numerous Blue plans have adopted what are described in the industry as "Most Favored Nation" ("MFN") clauses in their reimbursement agreements. 86 10 373. MFNs (also known as "most favored customer," "most favored pricing," "most favored discount," or "parity" clauses) require a service provider to charge a Blue entity's competitors either more than, or no less than, what the provider charges the Blue entity for the same services. MFNs that require the amount the provider charges the Blue entity's competitor to be higher than the amount the provider charges the Blue entity are often known as "MFN- plus" clauses, and typically require the amount to be higher by a specified percentage. 374. Use of MFNs by the Blues unreasonably reduces competition for a number of reasons. First, MFNs establish that the dominant market provider will be charged the lowest prices charge. The Blues have the ability to pass through costs, thus making them indifferent to the actual price charged in markets in which they are dominant, as long as they are not competitively disadvantaged. The MFNs thus reduce competition by eliminating an incentive for the Plans to reduce overhead prices. 375. Second, MFNs limit competition by preventing other health insurers in the region from achieving lower costs with providers and thereby becoming significant competitors to the MFN user. Because of the Blues' market power in their respective Service Areas, the MFN user can pass its own higher costs onto consumers through higher premiums without fearing that its competitors will be able to reduce premiums and draw consumers from it. 376. MFNs also effectively establish a price floor below which providers will not sell services to the MFN user's competitors. MFNs enable the MFN user to raise that price floor. The price floors deter competition among health insurers in the relevant region. By reducing the ability of the MFN user's competitors to compete against the MFN user, MFNs ensure that the Plans can substantially raise premiums while maintaining, or even increasing, its market share. 87 10 377. Moreover, if the MFN user is certain that no insurer will pay less to a provider than it will, it will be willing to pay more to that provider than it would otherwise. The more the MFN user agrees to pay that provider, the more its competitors must pay that provider. And by raising the price floor, the MFN user keeps other insurers' costs artificially high, forcing those insurers to offset the higher costs by raising premiums. 378. Third, MFNs raise barriers to entry in the market for commercial health insurance. If a provider can reduce the price it charges an insurer with little to no market share only by reducing the price it charges a market-dominant MFN user, the provider has a strong incentive not to lower prices. Without the ability to compete on price, a new competitor will be unable to price below the market-dominant MFN user, and thus will be unable to survive. 379. A number of the independent Blue Cross and Blue Shield licensees, including BCBS-MI, BCBS-NC, Highmark BCBS, and BCBS-SC, have used and/or continue to use MFNs to exploit the monopoly power they hold in their respective Service Areas. These independent Blue Cross and Blue Shield licensees, including BCBS-MI, BCBS-NC, Highmark BCBS, and BCBS-SC, have coordinated their use of MFNs with other Blue entities. 380. Use of MFNs and related techniques is widespread and pervasive among Blue plans. The member plans of BCBSA have discussed the legality and usefulness of MFNs at BCBSA gatherings, such as the BCBSA 41st Annual Lawyers Conference, held May 3, 2007 in Miami, Florida. There, a presenter informed representatives of the member plans that "DOJ and FTC have focused on potential anticompetitive character of MFN clauses, particularly on exclusionary impact" and that "[w]here [an] MFN has overall exclusionary effect on competition and entrenches market power, it could be actionable." 88 10 381. On October 18, 2010, the U.S. Department of Justice and the Attorney General of Michigan filed a joint complaint in the United States District Court for the Eastern District of Michigan, accusing BCBS-MI of engaging in a widespread anticompetitive use of MFNs. In the complaint, the Department of Justice alleges that BCBS-MI "currently has agreements containing MFNs or similar clauses with at least 70 of Michigan's 131 general acute care hospitals" and that these MFNs were sought and obtained "in exchange for increases in prices [the insurer] pays for the hospitals' services," "likely raising prices for health insurance in Michigan." On March 25, 2011, the Wall Street Journal reported that the U.S. Department of Justice expanded its probe into the use of MFNs by the member plans operating in the North Carolina, the District of Columbia, Kansas, Missouri, Ohio, South Carolina, and West Virginia. The Department of Justice voluntarily dismissed its suit against BCBS-MI after the state of Michigan passed legislation prohibiting BCBS-MI from continuing to exploit its market power through MFN use. 382. There is direct evidence that, like BCBS-MI and its fellow member plans of BCBSA, BCBS-NC uses MFNs in its contracts with providers. On July 13, 2006, BCBS-NC admitted that "BCBSNC's favorable pricing [MFN] clause has been in use for years." BCBS- NC's use of MFNs has raised the costs of its competitors, has protected it from competition (and thereby protected its ever-growing market share), and has contributed to the artificial inflation of its health insurance premiums in North Carolina. 383. From 2006 to 2009, BCBS-NC used at least four form provider agreements that included MFNs. These form provider agreements (May 15, 2006, December 19, 2007, May 21, 2008, and May 8, 2009) all included an MFN stating that: Provider acknowledges and warrants that, as of [date], Provider [has notified BCBSNC of] [does not have [and will not enter into]] any contract, agreement, or other 89 10 arrangement under which it provides services, treatments, or supplies at a rate of payment and/or through any payment mechanism, which results [or will result in] lower [or equal] aggregate payments to the Provider by any such similar payor than BCBSNC's payments would produce under this Agreement. 384. There is direct evidence that, like its fellow member plans of BCBSA, Highmark BCBS uses MFNs in its contracts with providers. Highmark BCBS's use of MFNs has raised the costs of its competitors, has protected it from competition (and thereby protected its ever- growing market share), and has contributed to the artificial inflation of its health insurance premiums in Western Pennsylvania. 385. Multiple Highmark BCBS provider contracts, publicly available on PID's website, evidence Highmark BCBS's recent and current use of MFNs. Highmark BCBS's MFNs in provider contracts come in at least two forms. In one type of provider contract, Highmark BCBS defines "Usual Charges" as "the amount that the Provider bills other payors and/or patients for the same services" and then states that "Highmark agrees to pay the Provider for Provider Services provided to eligible Members and determined to be Covered Services the lesser of: (A) the payment due in accordance with Highmark's payment rates as currently in effect at the time the Provider Services are rendered; or (b) one hundred percent (100%) of the Provider's Usual Charges" (emphasis added). This type of MFN appeared in a Highmark BCBS freestanding renal dialysis ancillary provider agreement filed June 3, 2008; a Highmark BCBS ground ambulance transport ancillary provider agreement filed June 3, 2008; a Highmark BCBS durable medical equipment and/or respiratory therapy equipment ancillary provider agreement filed June 3, 2008; a Highmark BCBS oncology ancillary provider agreement filed February 13, 2009; a Highmark BCBS home infusion therapy ancillary provider agreement filed August 25, 2009; a Highmark BCBS laboratory services ancillary provider agreement filed January 12, 2011; and potentially others. 90 10 386. In the second type of MFN, Highmark BCBS states that it will pay the contracting provider a rate established by agreement "or one hundred percent (100%) of the [contracting provider's] total covered charges for such services, whichever is less" (emphasis added). This type of MFN appeared in a Highmark BCBS acute care facility agreement filed September 2, 2008; a Highmark BCBS freestanding ambulatory surgery facility agreement filed September 10, 2008; a Highmark BCBS managed care products hospital facility agreement filed September 15, 2008; a Highmark BCBS traditional products only hospital facility agreement filed September 15, 2008; a Highmark BCBS home health agency provider agreement filed September 26, 2008; a Highmark BCBS long term acute care facility agreement filed October 9, 2008; a Highmark BCBS home health agency provider agreement filed October 24, 2008; a Highmark BCBS managed care products hospital facility agreement filed March 28, 2008; a Highmark BCBS traditional products only hospital facility agreement filed March 28, 2008; a Highmark BCBS traditional products only hospital facility agreement filed May 29, 2009; a Highmark BCBS managed care products hospital facility agreement filed June 5, 2009; a Highmark BCBS traditional products only hospital facility agreement filed June 5, 2009; a Highmark BCBS acute care facility agreement filed June 16, 2009; and potentially others. 387. There is direct evidence that, like its fellow member plans of BCBSA, BCBS-SC uses MFNs in its contracts with providers. In a recent Post and Courier article, a BCBS-SC spokesman admitted that BCBS-SC used MFNs, claiming that they are intended "to ensure that our customers get the best possible pricing for their health care services" and "reflect our intention to obtain the best value for our customers as we possibly can." Instead, BCBS-SC's use of MFNs has raised the costs of its competitors, protected it from competition (and thereby 91 10 protected its ever-growing market share), and contributed to the artificial inflation of its health insurance premiums in South Carolina. 388. In 2006, the South Carolina Legislature repealed a decades-old insurance code, stripping the State's authority to regulate provider contracts between insurers and health care providers. This deletion allows BCBS-SC to negotiate and execute provider contracts that include MFNs, with no review or approval required from the South Carolina Department of Insurance. Individual Blue Plans' Market Power In Relevant Markets Relevant Product Market: 389. The relevant product market is the sale of full-service commercial health insurance products to individuals and small groups (up to 199 people). 390. To properly define a health insurance product market, it is useful to consider the range of health insurance products for sale and the degree to which these products substitute for one another, i.e., whether, in a competitive market, an increase in the price of one product would increase demand for the second product. The characteristics of different products are important factors in determining their substitutability. For a health insurance product, important characteristics include: 391. Commercial versus government health insurance: Unlike commercial health insurance products, government health insurance programs such as Medicare and Medicaid and privately operated government health insurance programs such as Medicare Advantage are available only to individuals who are disabled, elderly, or indigent. Therefore, commercial health insurance and government health insurance programs are not substitutes. 92 10 392. Full-service versus single-service health insurance: Full-service health insurance provides coverage for a wide range of medical and surgical services provided by hospitals, physicians, and other health care providers. In contrast, single-service health insurance provides narrow coverage restricted to a specific type of health care, e.g., dental care. Single-service health insurance is sold as a compliment to full-service health insurance when the latter excludes from coverage a specific type of health care, e.g., dental care. Thus, full-service health insurance and single-service health insurance are not substitutes. 393. Full-service commercial health insurance includes HMO products and PPO products, among others. Traditionally, HMO health insurance plans pay benefits only when enrollees use in-network providers; PPO health insurance plans pay a higher percentage of costs when enrollees use in-network providers and a lower percentage of costs when enrollees use out- of-network providers. Both types of full-service commercial health insurers compete for consumers based on the price of the premiums they charge, the quality and breadth of their health care provider networks, the benefits they do or do not provide (including enrollees' out- of-pocket costs such as deductibles, co-payment, and coinsurance), customer service, and reputation, among other factors. Economic research suggests that HMO and PPO health insurance products are substitutes. 394. Fully-insured health insurance versus ASO products: When a consumer purchases a fully-insured health insurance product, the entity from which the consumer purchases that product provides a number of services: it pays its enrollees' medical costs, bears the risk that its enrollees' health care claims will exceed its anticipated losses, controls benefit structure and coverage decisions, and provides "administrative services" to its enrollees, e.g., processes medical bills and negotiates discounted prices with providers. In contrast, when a 93 10 consumer purchases an administrative services only ("ASO") product, sometimes known as "no risk," the entity from which the consumer purchases that product provides administrative services only. Therefore, fully-insured health insurance products and ASO products are only substitutes for those consumers able to self-insure, i.e., able to pay their own medical costs and bear the risk that claims will exceed their anticipated losses. 395. Individual, small group, and large group consumers: Consumers of health insurance products include both individuals and groups, such as employers who select a plan to offer to their employees and typically pay a portion of their employees' premiums. Group consumers are broken down into two categories, small group and large group, based on the number of persons in the group. The Kaiser Family Foundation, which publishes an influential yearly survey of employer health benefits offered across the United States, defines small groups as those with up to 199 employees and large firms as those with 200 or more employees. 396. For the purposes of market division, it is appropriate to consider the individual and small group health insurance product market as distinct from the large group health insurance product market. In the former, consumers are largely unable to self-insure and competition is therefore restricted to plans that offer fully-insured health insurance products; in the latter, consumers are able to self-insure and the bulk of competition occurs between firms offering ASO products. Across the United States, 84 percent of small group consumers do not self-insure, while 83 percent of large group consumers do self-insure. Even apart from the prevalence of ASO products in each market, individual, small group, and large group product markets are distinct because health insurers can set different prices for these different consumers. Thus, pricing in the large group market would not impact competition in the small group market, and vice versa. 94 10 Relevant Geographic Markets: 397. In defining a geographic market, it is important to focus on an essential part of a full-service commercial health insurer's product: its provider network. An insurer's provider network is composed of the health care providers with which it contracts. Enrollees in both HMO and PPO full-service commercial health insurance products pay less for an "in-network" provider's health care services than they would for the same services from an "out of network" provider. As a result, health insurance consumers pay special attention to an insurer's provider network when choosing a health insurance product, preferring insurers with networks that include local providers. This suggests that health insurers compete in distinct geographic markets. 398. There are a number of different ways to analyze the geographic markets for the sale of full-service commercial health insurance to individual and small group consumers of a particular Individual Blue Plan. The potentially relevant geographic markets could be defined alternatively as (a) that Blue Plan's service area; and (b) each of the regions, known as "Metropolitan Statistical Areas," "Micropolitan Statistical Areas," and counties, into which the U.S. Office of Management and Budget divides the counties that make up that service area. Alabama 399. However the geographic market is defined, BCBS-AL has the dominant market position, and exercises market power, in the sale of full-service commercial health insurance to individuals and small groups in relevant geographic markets throughout the state of Alabama. 400. BCBS-AL does business throughout the state of Alabama, is licensed to use the Blue Cross and Blue Shield trademarks and trade names throughout the state of Alabama, and has agreed with the other member plans of BCBSA that only BCBS-AL will do business in 95 10 Alabama under the Blue brand. Therefore, the state of Alabama can be analyzed as a relevant geographic market within which to assess the effects of BCBS-AL's anticompetitive conduct. As of 2008, BCBS-AL held at least a 93 percent share of the relevant product market in Alabama. As of 2011, BCBS-AL held at least a 90 percent market share in the relevant individual market and at least a 97 percent market share in the relevant small group market. 401. The U.S. Office of Management and Budget divides the 67 counties of Alabama into Metropolitan Statistical Areas and Micropolitan Statistical Areas according to published standards applied to U.S. Census Bureau data. It states that "[t]he general concept of a metropolitan or micropolitan statistical area is that of a core area containing a substantial population nucleus, together with adjacent communities having a high degree of economic and social integration with that core." Therefore, each of Alabama's 12 Metropolitan Statistical Areas,1 13 Micropolitan Statistical Areas,2 and 24 counties3 that are not part of Statistical Areas is a relevant geographic market within which to assess the effects of BCBS-AL's anticompetitive conduct. As of 2010, BCBS-AL held at least the following shares of the relevant product market 1 The Anniston-Oxford Metropolitan Statistical Area, the Auburn-Opelika Metropolitan Statistical Area, the Birmingham-Hoover Metropolitan Statistical Area, the Alabama portions of the Columbus Metropolitan Statistical Area, the Decatur Metropolitan Statistical Area, the Dothan Metropolitan Statistical Area, the Florence-Muscle Shoals Metropolitan Statistical Area, the Gadsden Metropolitan Statistical Area, the Huntsville Metropolitan Statistical Area, the Mobile Metropolitan Statistical Area, the Montgomery Metropolitan Statistical Area, and the Tuscaloosa Metropolitan Statistical Area. 2 The Albertville Micropolitan Statistical Area, the Alexander City Micropolitan Statistical Area, the Cullman Micropolitan Statistical Area, the Daphne-Fairhope-Foley Micropolitan Statistical Area, the Enterprise-Ozark Micropolitan Statistical Area, the Eufaula Micropolitan Statistical Area, the Fort Payne Micropolitan Statistical Area, the Scottsboro Micropolitan Statistical Area, the Selma Micropolitan Statistical Area, the Talladega-Sylacauga Micropolitan Statistical Area, the Troy Micropolitan Statistical Area, the Tuskegee Micropolitan Statistical Area, and the Valley Micropolitan Statistical Area. 3 Bullock, Butler, Cherokee, Choctaw, Clarke, Clay, Cleburne, Conecuh, Covington, Crenshaw, Escambia, Fayette, Franklin, Lamar, Marengo, Marion, Monroe, Perry, Pickens, Randolph, Sumter, Washington, Wilcox, and Winston Counties. 96 10 in these Metropolitan Statistical Areas: the Anniston-Oxford Metropolitan Statistical Area: 88 percent; the Auburn-Opelika Metropolitan Statistical Area: 90 percent; the Birmingham-Hoover Metropolitan Statistical Area: 85 percent; the Decatur Metropolitan Statistical Area: 92 percent; the Dothan Metropolitan Statistical Area: 91 percent; the Florence-Muscle Shoals Metropolitan Statistical Area: 91 percent; the Gadsden Metropolitan Statistical Area: 94 percent; the Huntsville Metropolitan Statistical Area: 88 percent; the Mobile Metropolitan Statistical Area: 84 percent; the Montgomery Metropolitan Statistical Area: 89 percent; and the Tuscaloosa Metropolitan Statistical Area: 91 percent. 402. BCBS-AL's powerful market share is far from the only evidence of its market power. As alleged below, BCBS-AL's market power has significantly raised costs, resulting in higher premiums for BCBS-AL enrollees. Supra-Competitive Premiums Charged By BCBS-AL 403. From March 1, 2007 to the present, BCBS-AL's illegal anticompetitive conduct, including its territorial market division agreements with the thirty-seven other members of BCBSA, has increased health care costs in Alabama, leading to inflated and/or supra-competitive premiums for individuals and small groups purchasing BCBS-AL's full-service commercial health insurance in the relevant geographic markets. BCBS-AL's market power and its use of anticompetitive practices in Alabama have reduced the amount of competition in the market and ensured that BCBS-AL's few competitors face higher costs than BCBS-AL does. Without competition, and with the ability to increase premiums without losing customers, BCBS-AL faces little pressure to keep prices low. 97 10 404. Over the past decade, BCBS-AL generally raised individual and small group premiums by amounts greater than the national average. In 2010, for example, BCBS-AL raised individual premiums more than 17 percent in some instances. 405. Plaintiffs were damaged by paying supra-competitive premiums, which are to be calculated by estimating the premiums that would have been actually charged to consumers but for the Individual Blue Plans' antitrust violations, not the base rates or rate "schedules" filed with a state agency. 406. These rising premiums have enabled BCBS-AL to lavishly compensate its executives and grow its surplus in excessive amounts, unusual practices for a self-described non- profit organization. From 2001 to 2009, BCBS-AL grew its surplus by 68 percent, from $433.7 million to $649 million. In 2011, BCBS-AL reported net income of $256.92 million, up 58 percent from 2010. Arkansas 407. However the geographic market is defined, BCBS-AR has the dominant market position, and exercises market power, in the sale of full-service commercial health insurance to individuals and small groups in relevant geographic markets throughout the state of Arkansas. 408. BCBS-AR does business throughout the state of Arkansas, is licensed to use the Blue Cross and Blue Shield trademarks and trade names throughout the state of Arkansas, and has agreed with the other member plans of BCBSA that only BCBS-AR will do business in Arkansas under the Blue brand. Therefore, the state of Arkansas can be analyzed as a relevant geographic market within which to assess the effects of BCBS-AR's anticompetitive conduct. As of 2011, BCBS-AR held at least a 79 percent share of the relevant individual product market and at least a 56 percent share of the relevant small group product market in Arkansas. 98 10 409. The U.S. Office of Management and Budget divides the 75 counties of Arkansas into Metropolitan Statistical Areas and Micropolitan Statistical Areas according to published standards applied to U.S. Census Bureau data. It states that "[t]he general concept of a metropolitan or micropolitan statistical area is that of a core area containing a substantial population nucleus, together with adjacent communities having a high degree of economic and social integration with that core." Therefore, each of Arkansas's 8 Metropolitan Statistical Areas,4 13 Micropolitan Statistical Areas,5 and 36 counties6 that are not part of Statistical Areas is a relevant geographic market within which to assess the effects of BCBS-AR's anticompetitive conduct. BCBS-AR has the following market shares in the following Metropolitan Statistical Areas: Fayetteville-Springdale-Rogers (at least 26 percent), Fort Smith (at least 25 percent), Hot Springs (at least 41 percent), Jonesboro (at least 55 percent), Little Rock-North Little Rock- Conway (at least 34 percent), and Pine Bluff (at least 49 percent). 4 The Fayetteville-Springdale-Rogers Metropolitan Statistical Area, the Fort Smith Metropolitan Statistical Area, the Hot Springs Metropolitan Statistical Area, the Jonesboro Metropolitan Statistical Area, the Little Rock-North Little Rock-Conway Metropolitan Statistical Area, the Memphis Metropolitan Statistical Area, the Pine Bluff Metropolitan Statistical Area, and the Texarkana Metropolitan Statistical Area 5 The Arkadelphia Micropolitan Statistical Area, the Batesville Micropolitan Statistical Area, the Blytheville Micropolitan Statistical Area, the Camden Micropolitan Statistical Area, the El Dorado Micropolitan Statistical Area, the Forrest City Micropolitan Statistical Area, the Harrison Micropolitan Statistical Area, the Helena-West Helena Micropolitan Statistical Area, the Magnolia Micropolitan Statistical Area, the Malvern Micropolitan Statistical Area, the Mountain Home Micropolitan Statistical Area, the Paragould Micropolitan Statistical Area, the Russellville Micropolitan Statistical Area, and the Searcy Micropolitan Statistical Area. 6 Arkansas County, Ashley County, Bradley County, Carroll County, Chicot County, Clay County, Cleburne County, Conway County, Cross County, Dallas County, Desha County, Drew County, Fulton County, Howard County, Izard County, Jackson County, Johnson County, Lafayette County, Lawrence County, Lee County, Little River County, Logan County, Marion County, Monroe County, Montgomery County, Pike County, Polk County, Prairie County, Randolph County, Scott County, Searcy County, Servier County, Sharp County, Stone County, Van Buren County, and Woodruff County. 99 10 410. BCBS-AR's powerful market share is far from the only evidence of its market power. As alleged below, BCBS-AR's market power has significantly raised costs, resulting in higher premiums for BCBS-AR enrollees. Supra-Competitive Premiums Charged By BCBS-AR 411. From October 1, 2008 to the present, BCBS-AR's illegal anticompetitive conduct, including its territorial market division agreements with the thirty-seven other members of BCBSA, has increased health care costs in Arkansas, leading to inflated and/or supra- competitive premiums for individuals and small groups purchasing BCBS-AR's full-service commercial health insurance in the relevant geographic markets. BCBS-AR's market power and its use of anticompetitive practices in Arkansas have reduced the amount of competition in the market and ensured that BCBS-AR's few competitors face higher costs than BCBS-AR does. Without competition, and with the ability to increase premiums without losing customers, BCBS-AR faces little pressure to keep prices low. 412. Over the past decade, BCBS-AR generally raised individual and small group premiums by amounts greater than the national average. 413. These rising premiums have enabled BCBS-AR to lavishly compensate its executives and grow its surplus in excessive amounts—close to $600 million as of 2011—unsual practices for a self-described non-profit organization. California 414. However the geographic market is defined, BC-CA has the dominant market position, and exercises market power, in the sale of full-service commercial health insurance to individuals and small groups in relevant geographic markets throughout the state of California. 100 10 BS-CA also has a dominant market position and exercises market power in those markets throughout the state of California. 415. BC-CA does business throughout the state of California, is licensed to use the Blue Cross trademark and trade name throughout the state of California, and has agreed with the other member plans of BCBSA that only BC-CA will do business in California under the Blue Cross brand. BS-CA does business throughout the state of California, is licensed to use the Blue Shield trademark and trade name throughout the state of California, and has agreed with the other member plans of BCBSA that only BS-CA will do business in California under the Blue Shield brand. Therefore, the state of California can be analyzed as a relevant geographic market within which to assess the effects of BC-CA's and BS-CA's anticompetitive conduct. As of 2010, BC-CA held at least a 29 percent share of the relevant product market in California; as of 2011, BC-CA held at least 37 percent of the relevant individual product market and at least 15 percent of the relevant small group product market. As of 2011, BS-CA held at least a 20 percent share of the relevant individual product market and at least 18 percent of the relevant small group product market. 416. The U.S. Office of Management and Budget divides the 58 counties of California into Metropolitan Statistical Areas and Micropolitan Statistical Areas according to published standards applied to U.S. Census Bureau data. It states that "[t]he general concept of a metropolitan or micropolitan statistical area is that of a core area containing a substantial population nucleus, together with adjacent communities having a high degree of economic and social integration with that core." Therefore, each of California's 26 Metropolitan Statistical Areas,7 8 Micropolitan Statistical Areas,8 and 13 counties9 that are not part of Statistical Areas is 7 The Bakersfield Metropolitan Statistical Area, the Chico Metropolitan Statistical Area, the El Centro Metropolitan Statistical Area, the Fresno Metropolitan Statistical Area, the Hanford-Corcoran 101 10 a relevant geographic market within which to assess the effects of BC-CA's and BS-CA's anticompetitive conduct. BC-CA has the following market shares in the following Metropolitan Statistical Areas: Bakersfield (at least 45 percent), Chico (at least 47 percent), El Centro (at least 60 percent), Fresno (at least 43 percent), Hanford-Corcoran (at least 61 percent), Los Angeles- Long Beach-Anaheim (at least 31 percent), Madera (at least 49 percent), Merced (at least 59 percent), Modesto (at least 29 percent), Napa (at least 42 percent), Oxnard-Thousand Oaks- Ventura (at least 41 percent), Redding (at least 60 percent), Riverside-San Bernadino-Ontario (at least 24 percent), the Sacramento-Roseville-Arden-Arcade (at least 19 percent), Salinas (at least 68 percent), San Diego-Carlsbad (at least 21 percent), San Francisco-Oakland-Hayward (at least 22 percent), San Jose-Sunnyvale-Santa Clara (at least 23 percent), San Luis Obispo-Paso Robles- Arroyo Grande (at least 62 percent), Santa Cruz-Watsonville (at least 47 percent), Santa Maria- Santa Barbara (at least 45 percent), Santa Rosa (at least 21 percent), Stockton-Lodi (at least 24 Metropolitan Statistical Area, the Los Angeles-Long Beach-Anaheim Metropolitan Statistical Area, the Madera Metropolitan Statistical Area, the Merced Metropolitan Statistical Area, the Modesto Metropolitan Statistical Area, the Napa Metropolitan Statistical Area, the Oxnard-Thousand Oaks- Ventura Metropolitan Statistical Area, the Redding Metropolitan Statistical Area, the Riverside-San Bernadino-Ontario Metropolitan Statistical Area, the Sacramento-Roseville-Arden-Arcade Metropolitan Statistical Area, the Salinas Metropolitan Statistical Area, the San Diego-Carlsbad Metropolitan Statistical Area, the San Francisco-Oakland-Hayward Metropolitan Statistical Area, the San Jose- Sunnyvale-Santa Clara Metropolitan Statistical Area, the San Luis Obispo-Paso Robles-Arroyo Grande Metropolitan Statistical Area, the Santa Cruz-Watsonville Metropolitan Statistical Area, the Santa Maria- Santa Barbara Metropolitan Statistical Area, the Santa Rosa Metropolitan Statistical Area, the Stockton- Lodi Metropolitan Statistical Area, the Vallejo-Fairfield Metropolitan Statistical Area, the Visalia- Porterville Metropolitan Statistical Area, and the Yuba City Metropolitan Statistical Area. 8 The Clearlake Micropolitan Statistical Area, the Crescent City Micropolitan Statistical Area, the Eureka-Arcata-Fortuna Micropolitan Statistical Area, the Red Bluff Micropolitan Statistical Area, the Sonora Micropolitan Statistical Area, the Susanville Micropolitan Statistical Area, the Truckee-Grass Valley Micropolitan Statistical Area, and the Ukiah Micropolitan Statistical Area. 9 Alpine, Amador, Calaveras, Colusa, Glenn, Inyo, Mariposa, Modoc, Mono, Plumas, Sierra, Siskiyou, and Trinity Counties. 102 10 percent), Vallejo-Fairfield (at least 24 percent), Visalia-Porterville (at least 58 percent), and Yuba City (at least 72 percent). BS-CA has the following market shares in the following Metropolitan Statistical Areas: Chico (at least 40 percent), El Centro (at least 29 percent), Fresno (at least 21 percent), Hanford-Corcoran (at least 26 percent), Madera (at least 22 percent), Merced (at least 20 percent), Redding (at least 29 percent), Salinas (at least 14 percent), San Luis Obispo-Paso Robles-Arroyo Grande (at least 26 percent), Santa Cruz-Watsonville (at least 19 percent), Santa Maria-Santa Barbara (at least 21 percent), Visalia-Porterville (at least 23 percent), and Yuba City (at least 10 percent). 417. BC-CA's and BS-CA's powerful market share is far from the only evidence of their market power. As alleged below, BC-CA's and BS-CA's market power has significantly raised costs, resulting in higher premiums for BC-CA and BS-CA enrollees. Supra-Competitive Premiums Charged By BC-CA and BS-CA 418. From October 1, 2008 to the present, BC-CA's and BS-CA's illegal anticompetitive conduct, including their territorial market division agreements with the thirty-six other members of BCBSA, has increased health care costs in California, leading to inflated and/or supra-competitive premiums for individuals and small groups purchasing BC-CA's and BS-CA's full-service commercial health insurance in the relevant geographic markets. BC-CA's and BS-CA's market power and their use of anticompetitive practices in California have reduced the amount of competition in the market and ensured that BC-CA and BS-CA's few competitors face higher costs than BC-CA and BS-CA do. Without competition, and with the ability to increase premiums without losing customers, BC-CA and BS-CA face little pressure to keep prices low. 103 10 419. Over the past decade, BC-CA and BS-CA each generally raised individual and small group premiums by amounts greater than the national average. 420. These rising premiums have enabled BC-CA and BS-CA to lavishly compensate their executives and grow their surpluses in excessive amounts. Florida 421. However the geographic market is defined, BCBS-FL has the dominant market position, and exercises market power, in the sale of full-service commercial health insurance to individuals and small groups in relevant geographic markets throughout the state of Florida. 422. BCBS-FL does business throughout the state of Florida, is licensed to use the Blue Cross and Blue Shield trademarks and trade names throughout the state of Florida, and has agreed with the other member plans of BCBSA that only BCBS-FL will do business in Florida under the Blue brand. Therefore, the state of Florida can be analyzed as a relevant geographic market within which to assess the effects of BCBS-FL's anticompetitive conduct. As of 2010 and 2011, BCBS-FL held at least a 31 percent share of the relevant product market in Florida, including at least a 48 percent share of individual products. 423. The U.S. Office of Management and Budget divides the 67 counties of Florida into Metropolitan Statistical Areas and Micropolitan Statistical Areas according to published standards applied to U.S. Census Bureau data. It states that "[t]he general concept of a metropolitan or micropolitan statistical area is that of a core area containing a substantial population nucleus, together with adjacent communities having a high degree of economic and social integration with that core." Therefore, each of Florida's 22 Metropolitan Statistical Areas,10 7 Micropolitan Statistical Areas,11 and 16 counties12 that are not part of Statistical Areas 10 The Cape Coral-Fort Myers Metropolitan Statistical Area, the Crestview-Fort Walton Beach-Destin Metropolitan Statistical Area, the Deltona-Daytona Beach-Ormond Beach Metropolitan Statistical Area, 104 10 is a relevant geographic market within which to assess the effects of BCBS-FL's anticompetitive conduct. BCBS-FL has the following share of the relevant product market in the following Metropolitan Statistical Areas: Cape Coral-Fort Myers (at least 35 percent), Crestview-Fort Walton Beach-Destin (at least 59 percent), Deltona-Daytona Beach-Ormond Beach (at least 42 percent), Gainesville (at least 63 percent), Jacksonville (at least 30 percent), Lakeland-Winter Haven (at least 22 percent), Naples-Immokalee-Marco Island (at least 46 percent), Ocala (at least 55 percent), Panama City (at least 69 percent), Pensacola-Ferry Pass-Brent (at least 49 percent), Port St. Lucie (at least 48 percent), Punta Gorda (at least 31 percent), Sebastian-Vero Beach (at least 60 percent), and Tallahassee (at least 83 percent). 424. BCBS-FL's powerful market share is far from the only evidence of its market power. As alleged below, BCBS-FL's market power has significantly raised costs, resulting in higher premiums for BCBS-FL enrollees. Supra-Competitive Premiums Charged By BCBS-FL the Gainesville Metropolitan Statistical Area, the Homosassa Springs Metropolitan Statistical Area, the Jacksonville Metropolitan Statistical Area, the Lakeland-Winter Haven Metropolitan Statistical Area, the Miami-Fort Lauderdale-West Palm Beach Metropolitan Statistical Area, the Naples-Immokalee-Marco Island Metropolitan Statistical Area, the North Port-Sarasota-Bradenton Metropolitan Statistical Area, the Ocala Metropolitan Statistical Area, the Orlando-Kissimmee-Sanford Metropolitan Statistical Area, the Palm Bay-Melbourne-Titusville Metropolitan Statistical Area, the Panama City Metropolitan Statistical Area, the Pensacola-Ferry Pass-Brent Metropolitan Statistical Area, the Port St. Lucie Metropolitan Statistical Area, the Punta Gorda Metropolitan Statistical Area, the Sebastian-Vero Beach Metropolitan Statistical Area, the Sebring Metropolitan Statistical Area, the Tallahassee Metropolitan Statistical Area, the Tampa-St. Petersburg-Clearwater Metropolitan Statistical Area, and the The Villages Metropolitan Statistical Area. 11 The Arcadia Micropolitan Statistical Area, the Clewiston Micropolitan Statistical Area, the Key West Micropolitan Statistical Area, the Lake City Micropolitan Statistical Area, the Okeechobee Micropolitan Statistical Area, the Palatka Micropolitan Statistical Area, and the Wauchula Micropolitan Statistical Area. 12 Bradford, Calhoun, Dixie, Franklin, Glades, Hamilton, Holmes, Jackson, Lafayette, Levy, Liberty, Madison, Suwannee, Taylor, Union, and Washington Counties. 105 10 425. From October 1, 2008 to the present, BCBS-FL's illegal anticompetitive conduct, including its territorial market division agreements with the thirty-seven other members of BCBSA, has increased health care costs in Florida, leading to inflated and/or supra-competitive premiums for individuals and/or small groups purchasing BCBS-FL's full-service commercial health insurance in the relevant geographic markets. BCBS-FL's market power and its use of anticompetitive practices in Florida have reduced the amount of competition in the market and ensured that BCBS-FL's few competitors face higher costs than BCBS-FL does. Without competition, and with the ability to increase premiums without losing customers, BCBS-FL faces little pressure to keep prices low. 426. Over the past decade, BCBS-FL generally raised individual and small group premiums by amounts greater than the national average. 427. These rising premiums have enabled BCBS-FL to lavishly compensate its executives and grow its surplus in excessive amounts. Hawai'i 428. However the geographic market is defined, BCBS-HI has the dominant market position, and exercises market power, in the sale of full-service commercial health insurance to individuals and small groups in relevant geographic markets throughout the state of Hawai'i. 429. BCBS-HI does business throughout the state of Hawai'i, is licensed to use the Blue Cross and Blue Shield trademarks and trade names throughout the state of Hawai'i, and has agreed with the other member plans of BCBSA that only BCBS-HI will do business in Hawai'i under the Blue brand. Therefore, the state of Hawai'i can be analyzed as a relevant geographic market within which to assess the effects of BCBS-HI's anticompetitive conduct. As of 2011, BCBS-HI held at least a 69 percent share of the relevant product market in Hawai'i, including at 106 10 least a 52 percent share in the relevant individual market and at least a 50 percent share in the relevant small group market. 430. The U.S. Office of Management and Budget divides the five counties of Hawai'i into Metropolitan Statistical Areas and Micropolitan Statistical Areas according to published standards applied to U.S. Census Bureau data. It states that "[t]he general concept of a metropolitan or micropolitan statistical area is that of a core area containing a substantial population nucleus, together with adjacent communities having a high degree of economic and social integration with that core." Therefore, each of Hawai'i's 2 Metropolitan Statistical Areas13 and 2 Micropolitan Statistical Areas14 is a relevant geographic market within which to assess the effects of BCBS-HI's anticompetitive conduct. BCBS-HI had at least a 71 percent market share of the Urban Honolulu Metropolitan Statistical Area as of 2010. 431. BCBS-HI's powerful market share is far from the only evidence of its market power. As alleged below, BCBS-HI's market power has significantly raised costs, resulting in higher premiums for BCBS-HI enrollees. Supra-Competitive Premiums Charged By BCBS-HI 432. From October 1, 2008 to the present, BCBS-HI's illegal anticompetitive conduct, including its territorial market division agreements with the thirty-seven other members of BCBSA, has increased health care costs in Hawai'i, leading to inflated and/or supra-competitive premiums for individuals and small groups purchasing BCBS-HI's full-service commercial health insurance in the relevant geographic markets. BCBS-HI's market power and its use of anticompetitive practices in Hawai'i have reduced the amount of competition in the market and 13 The Kahului-Wailuku-Lahaina Metropolitan Statistical Area and the Urban Honolulu Metropolitan Statistical Area. 14 The Hilo Metropolitan Statistical Area and the Kapaa Metropolitan Statistical Area. 107 10 ensured that BCBS-HI's few competitors face higher costs than BCBS-HI does. Without competition, and with the ability to increase premiums without losing customers, BCBS-HI faces little pressure to keep prices low. 433. Over the past decade, BCBS-HI generally raised individual and small group premiums by amounts greater than the national average. In 2008, for example, BCBS-Hawai'i raised its premiums for its Preferred Provider and HPH Plus plans 9.9 percent and 11.5 percent, respectively. 434. These rising premiums have enabled BCBS-HI to lavishly compensate its executives and grow its surplus in excessive amounts, unusual practices for a self-described non- profit organization. As a result of these and other inflated premiums, BCBS-Hawai'i has increased its profits to the point where it holds reserves in the amount of approximately $400 million. Illinois 435. However the geographic market is defined, BCBS-IL has the dominant market position, and exercises market power, in the sale of full-service commercial health insurance to individuals and small groups in relevant geographic markets throughout the state of Illinois. 436. BCBS-IL does business throughout the state of Illinois, is licensed to use the Blue Cross and Blue Shield trademarks and trade names throughout the state of Illinois, and has agreed with the other member plans of BCBSA that only BCBS-IL will do business in Illinois under the Blue brand. Therefore, the state of Illinois can be analyzed as a relevant geographic market within which to assess the effects of BCBS-IL's anticompetitive conduct. As of 2011, BCBS-IL held at least a 57 percent share of the relevant small group insurance product market in 108 10 Illinois, and at least a 66 percent share of the relevant individual insurance product market in Illinois. 437. The U.S. Office of Management and Budget divides the 102 counties of Illinois into Metropolitan Statistical Areas and Micropolitan Statistical Areas according to published standards applied to U.S. Census Bureau data. It states that "[t]he general concept of a metropolitan or micropolitan statistical area is that of a core area containing a substantial population nucleus, together with adjacent communities having a high degree of economic and social integration with that core." Therefore, each of Illinois's 12 Metropolitan Statistical Areas,15 23 Micropolitan Statistical Areas,16 and 37 counties17 that are not part of Statistical Areas is a relevant geographic market within which to assess the effects of BCBS-IL's 15 The Bloomington-Normal Metropolitan Statistical Area, the Champaign-Urbana Metropolitan Statistical Area, the Chicago-Naperville-Joliet Metropolitan Statistical Area, the Decatur Metropolitan Statistical Area, the Kankakee-Bradley Metropolitan Statistical Area, the Rockford Metropolitan Statistical Area, the Springfield Metropolitan Statistical Area, the Peoria Metropolitan Statistical Area, the Illinois portion of the St. Louis MO-IL Metropolitan Statistical Area, the Illinois portion of the Davenport-Moline-Rock Island IA-IL Metropolitan Statistical Area, the Danville Metropolitan Statistical Area, and the Illinois portion of the Cape Girardeau-Jackson MO-IL Metropolitan Statistical Area. 16 The Illinois portion of the Burlington IA-IL Micropolitan Statistical Area, the Canton Micropolitan Statistical Area, the Carbondale Micropolitan Statistical Area, the Centralia Micropolitan Statistical Area, the Charleston-Mattoon Micropolitan Statistical Area, the Dixon Micropolitan Statistical Area, the Effingham Micropolitan Statistical Area, the Freeport Micropolitan Statistical Area, the Galesburg Micropolitan Statistical Area, the Harrisburg Micropolitan Statistical Area, the Jacksonville Micropolitan Statistical Area, the Lincoln Micropolitan Statistical Area, the Macomb Micropolitan Statistical Area, the Marion-Herrin Micropolitan Statistical Area, the Mount Vernon Micropolitan Statistical Area, the Ottawa-Streator Micropolitan Statistical Area, the Illinois portion of the Paducah KY-IL Micropolitan Statistical Area, the Pontiac Micropolitan Statistical Area, the Illinois portion of the Quincy IL-MO Micropolitan Statistical Area, the Rochelle Micropolitan Statistical Area, the Sterling Micropolitan Statistical Area, and the Taylorville Micropolitan Statistical Area. 17 Franklin, Randolph, Montgomery, Iroquois, Jo Daviess, Perry, Shelby, Fayette, Crawford, Douglas, Hancock, Edgar, Union, Lawrence, Wayne, DeWitt, Pike, Richland, Clark, Carroll, Moultrie, White, Washington, Mason, Greene, Clay, Cass, Johnson, Wabash, Jasper, Schuyler, Brown, Edwards, Pulaski, Gallatin, Pope and Hardin counties. 109 10 anticompetitive conduct. As of 2010, BCBS-IL held at least the following shares of the relevant product market in these Metropolitan Statistical Areas: 55 percent in the Bloomington-Normal Metropolitan Statistical Area; 47 percent in the Champagne-Urbana Metropolitan Statistical Area; 63 percent in the Chicago-Naperville-Joliet Metropolitan Statistical Area; 57 percent in the Decatur Metropolitan Statistical Area; 48 percent in the Kankakee-Bradley Metropolitan Statistical Area; 46 percent in the Lake County-Kenosha County IL-WI Metropolitan Statistical Area; 58 percent in the Rockford Metropolitan Statistical Area; and 36 percent in the Springfield Metropolitan Statistical Area. 438. BCBS-IL's powerful market share is far from the only evidence of its market power. As alleged below, BCBS-IL's market power has significantly raised costs, resulting in higher premiums for BCBS-IL enrollees. Supra-Competitive Premiums Charged By BCBS-IL 439. From August 21, 2008 to the present, BCBS-IL's illegal anticompetitive conduct, including its territorial market division agreements with the thirty-seven other members of BCBSA, has increased health care costs in Illinois, leading to inflated and/or supra-competitive premiums for individuals and small groups purchasing BCBS-IL's full-service commercial health insurance in the relevant geographic markets. BCBS-IL's market power and its use of anticompetitive practices in Illinois have reduced the amount of competition in the market and ensured that BCBS-IL's few competitors face higher costs than BCBS-IL does. Without competition, and with the ability to increase premiums without losing customers, BCBS-IL faces little pressure to keep prices low. 110 10 440. Over the past decade, BCBS-IL generally raised individual and small group premiums by amounts greater than the national average. For example, on August 29, 2012, BCBS-IL hiked premiums up 8.60 percent for some policies. 441. These rising premiums have enabled BCBS-IL to lavishly compensate its executives and grow its surplus in excessive amounts, unusual practices for a self-described non- profit organization. In 2012, BCBS-IL's parent company, HCSC, had over $20 billion in revenues and a net income of over $1 billion, which lead to an overall surplus of $9.6 billion. In comparison, HCSC collected $1.7 billion in HMO revenues and earned $1.4 billion surplus in 2002. Louisiana 442. However the geographic market is defined, BCBS-LA has the dominant market position, and exercises market power, in the sale of full-service commercial health insurance to individuals and small groups in relevant geographic markets throughout the state of Louisiana. 443. BCBS-LA does business throughout the state of Louisiana, is licensed to use the Blue Cross and Blue Shield trademarks and trade names throughout the state of Louisiana, and has agreed with the other member plans of BCBSA that only BCBS-LA will do business in Louisiana under the Blue brand. Therefore, the state of Louisiana can be analyzed as a relevant geographic market within which to assess the effects of BCBS-LA's anticompetitive conduct. As of 2011, BCBS-LA held at least a 72 percent share of the relevant individual product market and at least an 81 percent share of the relevant small group product market in Louisiana. 444. The U.S. Office of Management and Budget divides the 64 parishes of the state of Louisiana into Metropolitan Statistical Areas and Micropolitan Statistical Areas according to published standards applied to U.S. Census Bureau data. It states that "[t]he general concept of a 111 10 metropolitan or micropolitan statistical area is that of a core area containing a substantial population nucleus, together with adjacent communities having a high degree of economic and social integration with that core." Therefore, each of Louisiana's 8 Metropolitan Statistical Areas,18 17 Micropolitan Statistical Areas,19 and 17 parishes20 that are not part of Statistical Areas is a relevant geographic market within which to assess the effects of BCBS-LA's anticompetitive conduct. 445. BCBS-LA's powerful market share is far from the only evidence of its market power. As alleged below, BCBS-LA's market power has significantly raised costs, resulting in higher premiums for BCBS-LA enrollees. Supra-Competitive Premiums Charged By BCBS-LA 446. From June 5, 2008 to the present, BCBS-LA's illegal anticompetitive conduct, including its territorial market division agreements with the thirty-seven other members of BCBSA, has increased health care costs in Louisiana, leading to inflated and/or supra- 18 The Alexandria Metropolitan Statistical Area, the Baton Rouge Metropolitan Statistical Area, the Houma-Bayou Cane-Thibodaux Metropolitan Statistical Area, the Lafayette Metropolitan Statistical Area, the Lake Charles Metropolitan Statistical Area, the Monroe Metropolitan Statistical Area, the New Orleans-Metairie-Kenner Metropolitan Statistical Area, and the Shreveport-Bossier City Metropolitan Statistical Area. 19 The Abbeville Micropolitan Statistical Area, the Bastrop Micropolitan Statistical Area, the Bogalusa Micropolitan Statistical Area, the Crowley Micropolitan Statistical Area, the DeRidder Micropolitan Statistical Area, the Fort Polk South Micropolitan Statistical Area, the Hammond Micropolitan Statistical Area, the Jennings Micropolitan Statistical Area, the Minden Micropolitan Statistical Area, the Morgan City Micropolitan Statistical Area, the Natchez Micropolitan Statistical Area, the Natchitoches Micropolitan Statistical Area, the New Iberia Micropolitan Statistical Area, the Opelousas-Eunice Micropolitan Statistical Area, the Pierre Part Micropolitan Statistical Area, the Ruston Micropolitan Statistical Area, and the Tallulah Micropolitan Statistical Area 20 Allen Parish, Avoyelles Parish, Bienville Parish, Caldwell Parish, Catahoula Parish, Claiborne Parish, East Carroll Parish, Evangeline Parish, Franklin Parish, La Salle Parish, Red River Parish, Richland Parish, Sabine Parish, St. James Parish, Tensas Parish, West Carroll Parish, and Winn Parish. 112 10 competitive premiums for individuals and small groups purchasing BCBS-LA's full-service commercial health insurance in the relevant geographic markets. BCBS-LA's market power and its use of anticompetitive practices in Louisiana have reduced the amount of competition in the market and ensured that BCBS-LA's few competitors face higher costs than BCBS-LA does. Without competition, and with the ability to increase premiums without losing customers, BCBS-LA faces little pressure to keep prices low. 447. Over the past decade, BCBS-LA generally raised individual and small group premiums by amounts greater than the national average. From 2000 to 2007, Louisiana health insurance premiums increased by 75.3 percent, 3.3 times faster than Louisiana wages, which only increased by 22.9 percent. Additionally, a 2009 forecast predicted that an average Louisiana worker would spend nearly 60 percent of her or his income on health insurance by 2016, one of the highest predicted nationwide ratios. 448. These rising premiums have enabled BCBS-LA to lavishly compensate its executives and grow its surplus in excessive amounts, unusual practices for a self-described non- profit organization. As a result of its inflated premiums, BCBS-LA has amassed a massive surplus; between 2004 and 2008, its surplus rose from $352.7 million to $621.1 million. As of the end of 2010, BCBS-LA's surplus exceeded $706.6 million. 449. BCBS-LA's market and monopoly power provide it with immense leverage over health care providers, whose failure to contract with BCBS-LA could result in the loss of a substantial amount of customers. BCBS-LA exercises this leverage by demanding that providers grant it below-market reimbursement rates. For instance, in 2008 contract negotiations reached a breaking point between BCBS-LA and one of Louisiana's largest providers, the Franciscan Missionaries of Our Lady ("FMOL"), which then provided care to 512,000 people. Announcing 113 10 the failed contract negotiations, FMOL stated "we have asked Blue Cross for an increase in rates to cover the services the Lake provides. The rates continue to take into consideration the volume of Blue Cross business and offer them the best pricing though closing the gap between them and their competitors." Similarly, in 2010, while in the process of addressing mounting operating losses, New Orleans area East Jefferson General Hospital ("EJGH") sought to negotiate new and increased rates with BCBS-LA. When the negotiation reached a breaking point, EJGH issued the following statement: "We wouldn't even need to ask for an increase if Blue Cross had paid East Jefferson fairly all these years." Both FMOL and EJGH eventually quickly re-joined the BCBS-LA's network. Michigan 450. However the geographic market is defined, BCBS-MI has the dominant market position, and exercises market power, in the sale of full-service commercial health insurance to individuals and small groups in relevant geographic markets throughout the state of Michigan. 451. BCBS-MI does business throughout the state of Michigan, is licensed to use the Blue Cross and Blue Shield trademarks and trade names throughout the state of Michigan, and has agreed with the other member plans of BCBSA that only BCBS-MI will do business in Michigan under the Blue brand. Therefore, the state of Michigan can be analyzed as a relevant geographic market within which to assess the effects of BCBS-MI's anticompetitive conduct. As of 2010, BCBS-MI held at least a 69 percent share of the full-service commercial health insurance product market in Michigan, at least a 59 percent market share of the relevant individual product market in Michigan and at least a 63 percent market share of the relevant small group product market. 114 10 452. The U.S. Office of Management and Budget divides the 83 counties of Michigan into Metropolitan Statistical Areas and Micropolitan Statistical Areas according to published standards applied to U.S. Census Bureau data. It states that "[t]he general concept of a metropolitan or micropolitan statistical area is that of a core area containing a substantial population nucleus, together with adjacent communities having a high degree of economic and social integration with that core." Therefore, each of Michigan's 15 Metropolitan Statistical Areas,21 18 Micropolitan Statistical Areas,22 and 34 counties23 that are not part of Statistical Areas is a relevant geographic market within which to assess the effects of BCBS-MI's anticompetitive conduct. As of 2010, BCBS-MI held at least the following market shares of the relevant product market in the following Michigan Metropolitan Statistical Areas: Ann Arbor (at least 73 percent); Battle Creek (at least 78 percent); Bay City (at least 77 percent); Detroit- 21 The Ann Arbor Metropolitan Statistical Area, the Battle Creek Metropolitan Statistical Area, the Bay City Metropolitan Statistical Area, the Detroit-Livonia-Dearborn Metropolitan Statistical Area, the Flint Metropolitan Statistical Area, the Grand Rapids-Wyoming Metropolitan Statistical Area, the Holland- Grand Haven Metropolitan Statistical Area, the Jackson Metropolitan Statistical Area, the Kalamazoo- Portage Metropolitan Statistical Area, the Lansing-East Lansing Metropolitan Statistical Area, the Monroe Metropolitan Statistical Area, the Muskegon-Norton Shores Metropolitan Statistical Area, the Niles-Benton Harbor Metropolitan Statistical Area, the Saginaw-Saginaw Township North Metropolitan Statistical Area, and the Warren-Farmington Hills-Troy Metropolitan Statistical Area. 22 The Houghton Micropolitan Statistical Area, the Marquette Micropolitan Statistical Area, the Sault Ste. Marie Micropolitan Statistical Area, the Iron Mountain Micropolitan Statistical Area, the Escanaba Micropolitan Statistical Area, the Marinette Micropolitan Statistical Area, the Traverse City Micropolitan Statistical Area, the Alpena Micropolitan Statistical Area, the Cadillac Micropolitan Statistical Area, the Big Rapids Micropolitan Statistical Area, the Mount Pleasant Micropolitan Statistical Area, the Midland Micropolitan Statistical Area, the Alma Micropolitan Statistical Area, the Owosso Micropolitan Statistical Area, the Allegan Micropolitan Statistical Area, the Sturgis Micropolitan Statistical Area, the Coldwater Micropolitan Statistical Area, and the Adrian Micropolitan Statistical Area. 23 Ontonagon, Baraga, Gogebic, Iron, Alger, Schoolcraft, Luce, Mackinac, Emmet, Cheboygan, Presque Isle, Charlevoix, Antrim, Otsego, Montmorency, Crawford, Oscoda, Alcona, Manistee, Roscommon, Ogemaw, Iosco, Mason, Lake, Osceola, Clare, Gladwin, Arenac, Oceana, Montcalm, Huron, Tuscola, Sanilac, and Hillsdale Counties. 115 10 Livonia-Dearborn (at least 56 percent); Flint (at least 71 percent); Grand Rapids-Wyoming (at least 44 percent); Holland-Grand Haven (at least 36 percent); Jackson (at least 72 percent); Kalamazoo-Portage (at least 68 percent); Lansing-East Lansing (at least 63 percent); Monroe (at least 69 percent); Muskegon-Norton Shores (at least 58 percent); Niles-Benton Harbor (at least 81 percent); Saginaw-Saginaw Township North (at least 75 percent); and Warren-Farmington Hills-Troy (at least 71 percent). 453. BCBS-MI's powerful market share is far from the only evidence of its market power. As alleged below, BCBS-MI's market power has significantly raised costs, resulting in higher premiums for BCBS-MI enrollees. Supra-Competitive Premiums Charged By BCBS-MI 454. From October 1, 2008 to the present, BCBS-MI's illegal anticompetitive conduct, including its territorial market division agreements with the thirty-seven other members of BCBSA, has increased health care costs in Michigan, leading to inflated and/or supra- competitive premiums for individuals and small groups purchasing BCBS-MI's full-service commercial health insurance in the relevant geographic markets. BCBS-MI's market power and its use of anticompetitive practices (including MFNs) in Michigan have reduced the amount of competition in the market and ensured that BCBS-MI's few competitors face higher costs than BCBS-MI does. Without competition, and with the ability to increase premiums without losing customers, BCBS-MI faces little pressure to keep prices low. 455. Over the past decade, BCBS-MI generally raised individual and small group premiums by amounts greater than the national average. In 2009, for example, BCBS-MI raised individual premiums 22 percent in some instances. 116 10 456. These rising premiums have enabled BCBS-MI to lavishly compensate its executives and grow its surplus in excessive amounts, unusual practices for a self-described non- profit organization. BCBS-MI's reserve amounts to approximately $3 billion and BCBS-MI pays its CEO $3.8 million annually. From 2011-2012, BCBS-MI's political action committee spent $1.2 million in campaign contributions. Mississippi 457. However the geographic market is defined, BCBS-MS has the dominant market position, and exercises market power, in the sale of full-service commercial health insurance to individuals and small groups in relevant geographic markets throughout the state of Mississippi. 458. BCBS-MS does business throughout the state of Mississippi, is licensed to use the Blue Cross and Blue Shield trademarks and trade names throughout the state of Mississippi, and has agreed with the other member plans of BCBSA that only BCBS-MS will do business in Mississippi under the Blue brand. Therefore, the state of Mississippi can be analyzed as a relevant geographic market within which to assess the effects of BCBS-MS's anticompetitive conduct. As of 2011, BCBS-MS held at least a 57 percent share of the relevant individual product market and at least a 73 percent share of the relevant small group product market in Mississippi. 459. The U.S. Office of Management and Budget divides the 82 counties of Mississippi into Metropolitan Statistical Areas and Micropolitan Statistical Areas according to published standards applied to U.S. Census Bureau data. It states that "[t]he general concept of a metropolitan or micropolitan statistical area is that of a core area containing a substantial population nucleus, together with adjacent communities having a high degree of economic and social integration with that core." Therefore, each of Mississippi's 4 Metropolitan Statistical 117 10 Areas,24 18 Micropolitan Statistical Areas,25 and 39 counties26 that are not part of Statistical Areas is a relevant geographic market within which to assess the effects of BCBS-MS's anticompetitive conduct. As of 2010, BCBS-MS held at least the following market shares of the relevant product market in the following Mississippi Metropolitan Statistical Areas: the Gulfport-Biloxi-Pascagoula (at least 50 percent); Hattiesburg (at least 44 percent); and Jackson (at least 49 percent). 460. BCBS-MS's powerful market share is far from the only evidence of its market power. As alleged below, BCBS-MS's market power has significantly raised costs, resulting in higher premiums for BCBS-MS enrollees. Supra-Competitive Premiums Charged By BCBS-MS 461. From October 1, 2008 to the present, BCBS-MS's illegal anticompetitive conduct, including its territorial market division agreements with the thirty-seven other members of BCBSA, has increased health care costs in Mississippi, leading to inflated and/or supra- 24 The Gulfport-Biloxi-Pascagoula Metropolitan Statistical Area, the Hattiesburg Metropolitan Statistical Area, the Jackson Metropolitan Statistical Area, and the Mississippi portion of the Memphis TN-MS-AR Metropolitan Statistical Area. 25 The Brookhaven Micropolitan Statistical Area, the Clarksdale Micropolitan Statistical Area, the Cleveland Micropolitan Statistical Area, the Columbus Micropolitan Statistical Area, the Corinth Micropolitan Statistical Area, the Greenville Micropolitan Statistical Area, the Greenwood Micropolitan Statistical Area, the Grenada Micropolitan Statistical Area, the Indianola Micropolitan Statistical Area, the Laurel Micropolitan Statistical Area, the McComb Micropolitan Statistical Area, the Meridian Micropolitan Statistical Area, the Mississippi portion of the Natchez MS-LA Micropolitan Statistical Area, the Oxford Micropolitan Statistical Area, the Picayune Micropolitan Statistical Area, the Starkville Micropolitan Statistical Area, the Tupelo Micropolitan Statistical Area, and the Vicksburg Micropolitan Statistical Area. 26 Attala, Calhoun, Chickasaw, Choctaw, Clay, Covington, Franklin, George, Greene, Holmes, Humphreys, Issaquena, Jefferson, Jefferson Davis, Lawrence, Leake, Marion, Monroe, Montgomery, Neshoba, Newton, Noxubee, Panola, Prentiss, Quitman, Scott, Sharkey, Smith, Stone, Tallahatchie, Tippah, Tishomingo, Union, Walthall, Wayne, Webster, Wilkinson, Winston, and Yalobusha Counties. 118 10 competitive premiums for individuals and small groups purchasing BCBS-MS's full-service commercial health insurance in the relevant geographic markets. BCBS-MS's market power and its use of anticompetitive practices in Mississippi have reduced the amount of competition in the market and ensured that BCBS-MS's few competitors face higher costs than BCBS-MS does. Without competition, and with the ability to increase premiums without losing customers, BCBS-MS faces little pressure to keep prices low. 462. Over the past decade, BCBS-MS generally raised individual and small group premiums by amounts greater than the national average. These rising premiums have enabled BCBS-MS to lavishly compensate its executives and grow its surplus in excessive amounts, unusual practices for a self-described non-profit organization. Missouri 463. However the geographic market is defined, BCBS-MO and BCBS-KC have dominant market positions, and exercise market power, in the sale of full-service commercial health insurance to individuals and small groups in relevant geographic markets in each of their service areas in the state of Missouri. 464. BCBS-MO does business throughout the state of Missouri, with the exception of the 32 counties of greater Kansas City and Northwest Missouri; is licensed to use the Blue Cross and Blue Shield trademarks and trade names throughout that Missouri service area; and has agreed with the other member plans of BCBSA that only BCBS-MO will do business that Missouri service area under the Blue brand. Therefore, BCBS-MO's Missouri service area can be analyzed as a relevant geographic market within which to assess the effects of BCBS-MO's anticompetitive conduct. As of 2011, BCBS-MO held at least a 32 percent share of individual 119 10 products and at least a 48 percent share of small group products in the entire state, making it likely that BCBS-MO's market share in its Missouri service area is even higher. 465. BCBS-KS does business in the 32 counties of greater Kansas City and Northwest Missouri (in addition to 2 counties in Kansas), is licensed to use the Blue Cross and Blue Shield trademarks and trade names throughout that Missouri service area; and has agreed with the other member plans of BCBSA that only BCBS-KC will do business that Missouri service area under the Blue brand. Therefore, BCBS-KC's Missouri service area can be analyzed as a relevant geographic market within which to assess the effects of BCBS-KC's anticompetitive conduct. As of 2010, BCBS-KC held between a 32 and 62 percent share of the relevant product market in regions in its service area of Missouri. 466. The U.S. Office of Management and Budget divides the 114 counties of Missouri into Metropolitan Statistical Areas and Micropolitan Statistical Areas according to published standards applied to U.S. Census Bureau data. It states that "[t]he general concept of a metropolitan or micropolitan statistical area is that of a core area containing a substantial population nucleus, together with adjacent communities having a high degree of economic and social integration with that core." Therefore, each of Missouri's 9 Metropolitan Statistical Areas,27 19 Micropolitan Statistical Areas,28 and 58 counties29 that are not part of Statistical 27 The Missouri portion of the Cape Girardeau MO-IL Metropolitan Statistical Area, the Columbia Metropolitan Statistical Area, the Missouri portion of the Fayetteville-Springdale-Rogers AR-MO Metropolitan Statistical Area, the Jefferson City Metropolitan Statistical Area, the Joplin Metropolitan Statistical Area, the Missouri portion of the Kansas City MS-KS Metropolitan Statistical Area, the Missouri portion of the St. Joseph MO-KA Metropolitan Statistical Area, the Missouri portion of the St. Louis MO-IL Metropolitan Statistical Area, and the Springfield Metropolitan Statistical Area. 28 The Branson Micropolitan Statistical Area, the Farmington Micropolitan Statistical Area, the Fort Leonard Wood Micropolitan Statistical Area, the Missouri portion of the Fort Madison-Keokuk IA-IL- MO Micropolitan Statistical Area, the Hannibal Micropolitan Statistical Area, the Kennett Micropolitan Statistical Area, the Kirksville Micropolitan Statistical Area, the Lebanon Micropolitan Statistical Area, 120 10 Areas is a relevant geographic market within which to assess the effects of BCBS-MO's and BCBS-KC's anticompetitive conduct. BCBS-MO holds at least the following shares of the relevant product market in each of the following Metropolitan Statistical Areas: Jefferson City (at least 35 percent), Joplin (at least 32 percent), St. Joseph (at least 14 percent), St. Louis (at least 29 percent). BCBS-KC holds at least the following shares of the relevant product market in each of the following Metropolitan Statistical Areas: Kansas City (32 percent), St. Joseph (62 percent). 467. BCBS-MO's and BCBS-KC's powerful market shares are far from the only evidence of their market power. As alleged below, BCBS-MO's and BCBS-KC's market power has significantly raised costs, resulting in higher premiums for BCBS-MO and BCBS-KC enrollees. Supra-Competitive Premiums Charged By BCBS-MO and BCBS-KC 468. From October 1, 2008 to the present, BCBS-MO's and BCBS-KC's illegal anticompetitive conduct, including their territorial market division agreements with the thirty-six other members of BCBSA, have increased health care costs in Missouri, leading to inflated and/or supra-competitive premiums for individuals and small groups purchasing BCBS-MO's and BCBS-KC's full-service commercial health insurance in the relevant geographic markets. the Marshall Micropolitan Statistical Area, the Maryville Micropolitan Statistical Area, the Mexico Micropolitan Statistical Area, the Moberly Micropolitan Statistical Area, the Poplar Bluff Micropolitan Statistical Area, the Missouri portion of the Quincy IL-MO Micropolitan Statistical Area, the Rolla Micropolitan Statistical Area, the Sedalia Micropolitan Statistical Area, the Sikeston Micropolitan Statistical Area, the Warrensburg Micropolitan Statistical Area, and the West Plains Micropolitan Statistical Area. 29 Atchison, Barry, Barton, Benton, Camden, Carroll, Carter, Cedar, Chariton, Cooper, Dade, Daviess, Dent, Douglas, Gasconade, Gentry, Grundy, Harrison, Henry, Hickory, Holt, Howard, Iron, Knox, Lawrence, Linn, Livingston, Macon, Madison, Maries, Mercer, Miller, Mississippi, Monroe, Montgomery, Morgan, New Madrid, Oregon, Ozark, Pemiscot, Perry, Pike, Putnam, Reynolds, Ripley, St. Clair, St. Genevieve, Scotland, Shannon, Shelby, Stoddard, Sullivan, Texas, Vernon, Washington, Wayne, Worth, and Wright counties. 121 10 BCBS-MO's and BCBS-KC's market power and their use of anticompetitive practices in Missouri have reduced the amount of competition in the market and ensured that BCBS-MO and BCBS-KC's few competitors face higher costs than BCBS-MO and BCBS-KC do. Without competition, and with the ability to increase premiums without losing customers, BCBS-MO and BCBS-KC face little pressure to keep prices low. 469. Over the past decade, BCBS-MO and BCBS-KC generally raised individual and small group premiums by amounts greater than the national average. 470. These rising premiums have enabled BCBS-MO and BCBS-KC to lavishly compensate their executives and grow their surpluses in excessive amounts. New Hampshire 471. However the geographic market is defined, BCBS-NH has the dominant market position, and exercises market power, in the sale of full-service commercial health insurance to individuals and small groups in relevant geographic markets throughout the state of New Hampshire. 472. BCBS-NH does business throughout the state of New Hampshire, is licensed to use the Blue Cross and Blue Shield trademarks and trade names throughout the state of New Hampshire, and has agreed with the other member plans of BCBSA that only BCBS-NH will do business in New Hampshire under the Blue brand. Therefore, the state of New Hampshire can be analyzed as a relevant geographic market within which to assess the effects of BCBS-NH's anticompetitive conduct. As of 2010, BCBS New Hampshire held at least a 51 percent share of the relevant product market, including (as of 2011), a 76 percent share of the relevant individual product market and a 67 percent share of the relevant small group market. 122 10 473. The U.S. Office of Management and Budget divides the 10 counties of New Hampshire into Metropolitan Statistical Areas and Micropolitan Statistical Areas according to published standards applied to U.S. Census Bureau data. It states that "[t]he general concept of a metropolitan or micropolitan statistical area is that of a core area containing a substantial population nucleus, together with adjacent communities having a high degree of economic and social integration with that core." Therefore, each of New Hampshire's 2 Metropolitan Statistical Areas,30 5 Micropolitan Statistical Areas,31 and 1 county32 that is not part of a Statistical Area is a relevant geographic market within which to assess the effects of BCBS-NH's anticompetitive conduct. BCBS-NH has the following shares of the relevant product market in the following Metropolitan Statistical Areas: Manchester (at least 45 percent); Nashua NH-MA (at least 42 percent); Portsmouth NH-ME (at least 51 percent); Rochester-Dover (at least 57 percent). 474. BCBS-NH's powerful market share is far from the only evidence of its market power. As alleged below, BCBS-NH's market power has significantly raised costs, resulting in higher premiums for BCBS-NH enrollees. Supra-Competitive Premiums Charged By BCBS-NH 475. From October 1, 2008 to the present, BCBS-NH's illegal anticompetitive conduct, including its territorial market division agreements with the thirty-seven other members of BCBSA, has increased health care costs in New Hampshire, leading to inflated and/or supra- 30 The New Hampshire portion of the Boston-Cambridge-Newton MA-NH Metropolitan Statistical Area and the Manchester-Nashua Metropolitan Statistical Area. 31 The New Hampshire portion of the Berlin NH-VT Micropolitan Statistical Area, the New Hampshire portion of the Claremont-Lebanon NH-VT Micropolitan Statistical Area, the Concord Micropolitan Statistical Area, the Keene Micropolitan Statistical Area, and the Laconia Micropolitan Statistical Area. 32 Carroll County. 123 10 competitive premiums for individuals and small groups purchasing BCBS-NH's full-service commercial health insurance in the relevant geographic markets. BCBS-NH's market power and its use of anticompetitive practices in New Hampshire have reduced the amount of competition in the market and ensured that BCBS-NH's few competitors face higher costs than BCBS-NH does. Without competition, and with the ability to increase premiums without losing customers, BCBS-NH faces little pressure to keep prices low. 476. Over the past decade, BCBS-NH generally raised individual and small group premiums by amounts greater than the national average. For example, from 2009 to 2010 the cost of insurance coverage for small groups and individuals rose 15% and 39%, respectively. 477. These rising premiums have enabled BCBS-NH to lavishly compensate its executives and grow its surplus in excessive amounts, unusual practices for a self-described non- profit organization. Between 2006 and 2011, BCBS-NH reported annual income between $26 million and $112 million and a cumulative profit of approximately $360 million. North Carolina 478. However the geographic market is defined, BCBS-NC has the dominant market position, and exercises market power, in the sale of full-service commercial health insurance to individuals and small groups in relevant geographic markets throughout the state of North Carolina. 479. There are a number of different ways to analyze the geographic markets for the sale of full-service commercial health insurance to individual and small group consumers in North Carolina. The potentially relevant geographic markets could be defined alternatively as (a) the entire state of North Carolina; (b) the six regions, known as "Offices," into which BCBS- NC divides North Carolina; and (c) the seventy regions, known as "Metropolitan Statistical 124 10 Areas," "Micropolitan Statistical Areas," and counties, into which the U.S. Office of Management and Budget divides North Carolina. However the geographic market is defined, the result is the same: BCBS-NC has the dominant market position, and exercises market power. 480. BCBS-NC does business throughout the state of North Carolina, is licensed to use the Blue Cross and Blue Shield trademarks and trade names throughout the state of North Carolina, and has agreed with the other member plans of BCBSA that only BCBS-NC will do business in North Carolina under the Blue brand. Therefore, the state of North Carolina can be analyzed as a relevant geographic market within which to assess the effects of BCBS-NC's anticompetitive conduct. As of December 31, 2009, BCBS-NC had a 73.81 percent share of the relevant product market in North Carolina, including a stunning 95.9 percent of the individual full-service commercial health insurance market as measured by premiums earned. 481. In analyzing its own business, BCBS-NC divides the state of North Carolina into six Offices, which compose three Regions: the Western Region, containing the Hickory Office and the Charlotte Office; the Triad Region, containing the Greensboro Office; and the Eastern Region, containing the Raleigh Office, the Wilmington Office, and the Greenville Office. BCBS-NC explains that these "field offices are located across the state and are assigned territories; each. . . supports its provider community by specific geographic region." Therefore, each BCBS-NC Office and Region can be analyzed as a relevant geographic market within which to assess the effects of BCBS-NC's anticompetitive conduct. Based on data from the North Carolina Department of Insurance, as of December 31, 2009, BCBS-NC had 66.07 percent of the relevant product market in the Western Region: a 65.32 percent share in the Hickory Office area and a 66.55 percent share in the Charlotte Office area; 71.50 percent of the relevant product market in the Triad Region: a 71.50 percent share in the Greensboro Office area; and 125 10 80.48 percent of the relevant product market in the Eastern Region: an 80.33 percent share in the Raleigh Office area, an 80.73 percent share in the Wilmington Office area, and an 84.18 percent share in the Greenville Office area. 482. The U.S. Office of Management and Budget divides the counties of the state of North Carolina into Metropolitan Statistical Areas and Micropolitan Statistical Areas according to published standards applied to U.S. Census Bureau data. It states that "[t]he general concept of a metropolitan or micropolitan statistical area is that of a core area containing a substantial population nucleus, together with adjacent communities having a high degree of economic and social integration with that core." Therefore, each of North Carolina's 15 Metropolitan Statistical Areas, 26 Micropolitan Statistical Areas, and 29 counties that are not part of Statistical Areas is a relevant geographic market within which to assess the effects of BCBS-NC's anticompetitive conduct. As of December 31, 2009, BCBS-NC had: a. 81.03 percent of the relevant product market in the Asheville Metropolitan Statistical Area; b. 65.69 percent of the relevant product market in the Burlington Metropolitan Statistical Area; c. 65.47 percent of the relevant product market in the North Carolina portion of the Charlotte-Gastonia-Rock Hill Metropolitan Statistical Area; d. 81.32 percent of the relevant product market in the Durham-Chapel Hill Metropolitan Statistical Area; e. 57.39 percent of the relevant product market in the Fayetteville Metropolitan Statistical Area; 126 10 f. 87.57 percent of the relevant product market in the Goldsboro Metropolitan Statistical Area; g. 70.21 percent of the relevant product market in the Greensboro-High Point Metropolitan Statistical Area; h. 73.66 percent of the relevant product market in the Greenville Metropolitan Statistical Area; i. 76.61 percent of the relevant product market in the Hickory-Lenoir- Morganton Metropolitan Statistical Area; j. 86.83 percent of the relevant product market in the Jacksonville Metropolitan Statistical Area; k. 80.36 percent of the relevant product market in the Raleigh-Cary Metropolitan Statistical Area; l. 86.20 percent of the relevant product market in the Rocky Mount Metropolitan Statistical Area; m. 85.75 percent of the relevant product market in the North Carolina portion of the Virginia Beach-Norfolk-Newport News Metropolitan Statistical Area; n. 87.05 percent of the relevant product market in the Wilmington Metropolitan Statistical Area; o. 75.14 percent of the relevant product market in the Winston-Salem Metropolitan Statistical Area; p. 74.13 percent of the relevant product market in the Albemarle Micropolitan Statistical Area; 127 10 q. 80.68 percent of the relevant product market in the Boone Micropolitan Statistical Area; r. 81.55 percent of the relevant product market in the Brevard Micropolitan Statistical Area; s. 77.70 percent of the relevant product market in the Dunn Micropolitan Statistical Area; t. 78.08 percent of the relevant product market in the Elizabeth City Micropolitan Statistical Area; u. 78.12 percent of the relevant product market in the Forest City Micropolitan Statistical Area; v. 66.26 percent of the relevant product market in the Henderson Micropolitan Statistical Area; w. 91.44 percent of the relevant product market in the Kill Devil Hills Micropolitan Statistical Area; x. 88.56 percent of the relevant product market in the Kinston Micropolitan Statistical Area; y. 42.62 percent of the relevant product market in the Laurinburg Micropolitan Statistical Area; z. 68.49 percent of the relevant product market in the Lincolnton Micropolitan Statistical Area; aa. 62.73 percent of the relevant product market in the Lumberton Micropolitan Statistical Area; 128 10 bb. 93.63 percent of the relevant product market in the Moorehead City Micropolitan Statistical Area; cc. 81.96 percent of the relevant product market in the Mount Airy Micropolitan Statistical Area; dd. 88.85 percent of the relevant product market in the New Bern Micropolitan Statistical Area; ee. 81.33 percent of the relevant product market in the North Wilkesboro Micropolitan Statistical Area; ff. 82.72 percent of the relevant product market in the Roanoke Rapids Micropolitan Statistical Area; gg. 56.31 percent of the relevant product market in the Rockingham Micropolitan Statistical Area; hh. 72.63 percent of the relevant product market in the Salisbury Micropolitan Statistical Area; ii. 81.06 percent of the relevant product market in the Sanford Micropolitan Statistical Area; jj. 67.99 percent of the relevant product market in the Shelby Micropolitan Statistical Area; kk. 63.19 percent of the relevant product market in the Southern Pines-Pinehurst Micropolitan Statistical Area; ll. 73.71 percent of the relevant product market in the Statesville-Mooresville Micropolitan Statistical Area; 129 10 mm. 71.33 percent of the relevant product market in the Thomasville-Lexington Micropolitan Statistical Area; nn. 88.13 percent of the relevant product market in the Washington Micropolitan Statistical Area; oo. 85.33 percent of the relevant product market in the Wilson Micropolitan Statistical Area; pp. 79.93 percent of the relevant product market in Alleghany County; qq. 85.57 percent of the relevant product market in Ashe County; rr. 86.34 percent of the relevant product market in Avery County; ss. 75.56 percent of the relevant product market in Bertie County; tt. 79.71 percent of the relevant product market in Bladen County; uu. 69.59 percent of the relevant product market in Caswell County; vv. 76.13 percent of the relevant product market in Cherokee County; ww. 86.34 percent of the relevant product market in Chowan County; xx. 83.86 percent of the relevant product market in Clay County; yy. 82.97 percent of the relevant product market in Columbus County; zz. 84.83 percent of the relevant product market in Duplin County; aaa. 81.42 percent of the relevant product market in Gates County; bbb. 58.67 percent of the relevant product market in Graham County; ccc. 81.40 percent of the relevant product market in Granville County; ddd. 71.11 percent of the relevant product market in Hertford County; eee. 63.09 percent of the relevant product market in Hyde County; fff. 67.81 percent of the relevant product market in Jackson County; 130 10 ggg. 89.40 percent of the relevant product market in Macon County; hhh. 87.96 percent of the relevant product market in Martin County; iii. 65.05 percent of the relevant product market in McDowell County; jjj. 89.50 percent of the relevant product market in Mitchell County; kkk. 74.72 percent of the relevant product market in Montgomery County; lll. 75.73 percent of the relevant product market in Polk County; mmm. 78.66 percent of the relevant product market in Sampson County; nnn. 80.99 percent of the relevant product market in Swain County; ooo. 68.53 percent of the relevant product market in Tyrrell County; ppp. 82.80 percent of the relevant product market in Warren County; qqq. 76.19 percent of the relevant product market in Washington County; and rrr. 88.20 percent of the relevant product market in Yancey County. 483. BCBS-NC's powerful market share is far from the only evidence of its market power. As alleged below, BCBS-NC's market power has significantly raised costs, resulting in higher premiums for BCBS-NC enrollees. 484. Moreover, BCBS-NC's statewide share of the relevant product market has increased each year despite its substantial premium increases. BCBS-NC's share of the full- service commercial health insurance market in North Carolina rose 48.1 percent from December 31, 2000 to December 31, 2009, including growth of more than 5 percent during the Class Period. BCBS-NC's ability to retain and increase enrollment while charging artificially inflated and/or supra-competitive prices is evidence of its market power. Supra-Competitive Premiums Charged By BCBS-NC 131 10 485. From February 2, 2008 to the present, BCBS-NC's illegal anticompetitive conduct, including its territorial market division agreements with the thirty-seven other members of BCBSA, has increased health care costs in North Carolina, leading to inflated and/or supra- competitive premiums for individuals and small groups purchasing BCBS-NC's full-service commercial health insurance in the relevant geographic markets. BCBS-NC's market power and its use of MFNs and other anticompetitive practices in North Carolina have reduced the amount of competition in the market and ensured that BCBS-NC's few competitors face higher costs than BCBS-NC does. Without competition, and with the ability to increase premiums without losing customers, BCBS-NC faces little pressure to keep prices low. As BCBS-NC President and CEO Brad Wilson admitted, "[w]hile many insurers lost customers, Blue Cross and Blue Shield of North Carolina is holding its own." 486. These rising premiums have enabled BCBS-NC to lavishly compensate its executives and grow its surplus in excessive amounts, unusual practices for a self-described non- profit organization. In 2010, at least three BCBS-NC executives took home $1 million or more in salary, bonuses, and other compensation—President and CEO Brad Wilson (approximately $1.9 million), Executive Vice President Maureen O'Connor (approximately $1.3 million), and Senior Vice President John Roos (approximately $1 million). In 2009, six BCBS-NC executives received $1 million or more and BCBS-NC grew its surplus to $1.4 billion, while spending substantial funds on a widely criticized "robo-call" marketing campaign against federal health care reform that resulted in a $95,000 fine for violating North Carolina law. From 2002 to 2004, salaries paid to BCBS-NC's top executives rose 70 percent. During that period, former CEO Robert Greczyn's compensation increased from $1.12 million in 2002 to $2.15 million in 2004. 132 10 Western Pennsylvania 487. However the geographic market is defined, Highmark BCBS has the dominant market position, and exercises market power, in the sale of full-service commercial health insurance to individuals and small groups in relevant geographic markets throughout Western Pennsylvania. 488. Highmark BCBS does business throughout Western Pennsylvania, is licensed to use the Blue Cross and Blue Shield trademarks and trade names throughout Western Pennsylvania (and is licensed to use the Blue Shield trademark and trade name throughout the entire state of Pennsylvania), and has agreed with the other member plans of BCBSA that only Highmark BCBS will do business in Western Pennsylvania under the Blue brand. Therefore, Western Pennsylvania can be analyzed as a relevant geographic market within which to assess the effects of Highmark BCBS's anticompetitive conduct. During the period from 2005 to 2011, Highmark BCBS's share of the relevant product market in Western Pennsylvania increased from 60% to 65%. 489. The U.S. Office of Management and Budget divides the 29 counties of Western Pennsylvania into Metropolitan Statistical Areas and Micropolitan Statistical Areas according to published standards applied to U.S. Census Bureau data. It states that "[t]he general concept of a metropolitan or micropolitan statistical area is that of a core area containing a substantial population nucleus, together with adjacent communities having a high degree of economic and social integration with that core." Therefore, each of Western Pennsylvania's 5 Metropolitan Statistical Areas,33 10 Micropolitan Statistical Areas,34 and 8 counties35 that are not part of 33 The Altoona Metropolitan Statistical Area, the Erie Metropolitan Statistical Area, the Johnstown Metropolitan Statistical Area, the Pittsburgh Metropolitan Statistical Area, and a portion of the State College Metropolitan Statistical Area. 133 10 Statistical Areas is a relevant geographic market within which to assess the effects of Highmark BCBS's anticompetitive conduct. 490. Highmark BCBS has also entered into illegal anticompetitive agreements with at least two other Individual Blue Plans operating in Pennsylvania, as described below. Highmark BCBS's Illegal Anticompetitive Agreement with BC-Northeastern PA 491. On April 29, 2005, Highmark BCBS and BC-Northeastern PA, the Blue Cross licensee for the thirteen counties of Northeastern Pennsylvania, entered into an agreement not to compete, pursuant to Highmark BCBS's acquisition of a 40 percent share in BC-Northeastern PA's subsidiaries First Priority Life Insurance Company and First Priority Health (d/b/a/ HMO of Northeastern Pennsylvania). The agreement is set forth in two Shareholders Agreements dated April 29, 2005. In the agreement, Highmark BCBS promises that as long as it is a shareholder of the relevant subsidiary, plus an additional two years, it will not "market, sell or service, . . . or have ownership interest in any Person, other than [First Priority Life Insurance Company] or First Priority Health, that directly or indirectly markets, sells or services, any Branded Health Insurance Products [full-service commercial health insurance products offered and/or sold using the Blue Cross and/or Blue Shield names and marks] in [Blue Cross of Northeastern Pennsylvania's thirteen county] Service Area." While there are limited exceptions, they only apply "provided that. . . the Core Health Insurance Products [full-service commercial health insurance products] in question are not offered, sold or serviced in the Service Area as 34 The Bradford Micropolitan Statistical Area, the DuBois Micropolitan Statistical Area, the Huntingdon Micropolitan Statistical Area, the Indiana Micropolitan Statistical Area, the Meadville Micropolitan Statistical Area, the New Castle Micropolitan Statistical Area, the Oil City Micropolitan Statistical Area, the St. Marys Micropolitan Statistical Area, the Somerset Micropolitan Statistical Area, and the Warren Micropolitan Statistical Area. 35 Bedford, Cameron, Clarion, Forest, Green, Jefferson, Mercer, and Potter Counties. 134 10 Branded Health Insurance Products." In sum, Highmark BCBS has agreed to restrict its use of the Blue Shield name and mark, which it is licensed to use in the entire state of Pennsylvania, so as not to compete against BC-Northeastern PA. Highmark BCBS remains a shareholder of the subsidiaries. Therefore, the two competitors' agreement not to compete currently restricts competition throughout the state of Pennsylvania, including in the Western Pennsylvania market. Highmark BCBS's Illegal Anticompetitive Agreement with Independence BC 492. Highmark BCBS was formed from the 1996 merger of two Pennsylvania BCBSA member plans: Blue Cross of Western Pennsylvania, which held the Blue Cross license for the twenty-nine counties of Western Pennsylvania, and Pennsylvania Blue Shield, which held the Blue Shield license for the entire state of Pennsylvania. 493. Prior to this merger, Pennsylvania Blue Shield and Independence BC, the Blue Cross licensee for the five counties of Southeastern Pennsylvania, had competed in Southeastern Pennsylvania through subsidiaries: Keystone Health Plan East, an HMO plan that Pennsylvania Blue Shield established in 1986 after Independence rejected its offer to form a joint venture HMO plan in Southeastern Pennsylvania; and Delaware Valley HMO and Vista Health Plan (also an HMO), which Independence BC acquired in response to Keystone Health Plan East's entry into the market. In 1991, Independence BC and Pennsylvania Blue Shield agreed to combine these HMOs into a single, jointly-owned venture under the Keystone Health Plan East name, and Pennsylvania Blue Shield acquired a 50 percent interest in an Independence PPO, Personal Choice. When Blue Cross of Pennsylvania and Pennsylvania Blue Shield merged to form Highmark BCBS, Pennsylvania Blue Shield sold its interests in Keystone Health Plan East and Personal Choice to Independence BC. As part of the purchase agreement, Pennsylvania Blue Shield (now Highmark BCBS) and Independence BC entered into a decade-long agreement 135 10 not to compete. Specifically, Pennsylvania Blue Shield agreed not to enter Southeastern Pennsylvania, despite being licensed to compete under the Blue Shield name and mark throughout Pennsylvania. 494. On information and belief, this agreement remains in place, though it putatively expired in 2007. Instead of entering the Southeastern Pennsylvania market at that time, Highmark BCBS announced that it and Independence BC intended to merge. After an exhaustive review by the Pennsylvania Insurance Department ("PID"), Highmark BCBS and Independence BC withdrew their merger application. In commenting on this withdrawal, then- Pennsylvania Insurance Commissioner Joel Ario stated that he was "prepared to disapprove this transaction because it would have lessened competition. . . to the detriment of the insurance buying public." Currently, despite its past history of successful competition in Southeastern Pennsylvania, despite holding the Blue Shield license for the entire state of Pennsylvania, despite entering Central Pennsylvania and the Lehigh Valley as Highmark Blue Shield and thriving, despite entering West Virginia through an affiliation with Mountain State Blue Cross Blue Shield (now Highmark Blue Cross Blue Shield of West Virginia), despite entering Delaware through an affiliation with Blue Cross and Blue Shield of Delaware (now Highmark Blue Cross Blue Shield of Delaware), and despite the supposed "expiration" of the non-compete agreement with Independence BC, Highmark BCBS has still not attempted to enter Southeastern Pennsylvania. This illegal, anticompetitive agreement not to compete has reduced competition throughout the state of Pennsylvania, including in the Western Pennsylvania market. 495. Highmark BCBS's powerful market share and illegal anticompetitive agreements are far from the only evidence of its market power. As alleged below, Highmark BCBS's market power has significantly raised costs, resulting in higher premiums for Highmark BCBS enrollees. 136 10 Supra-Competitive Premiums Charged By Highmark BCBS 496. From October 1, 2008 to the present, Highmark BCBS's illegal anticompetitive conduct, including its territorial market division agreements with the 37 other members of BCBSA, has increased health care costs in Western Pennsylvania, leading to inflated and/or supra-competitive premiums for individuals and small groups purchasing Highmark BCBS's full-service commercial health insurance in the relevant geographic markets. Highmark BCBS's market power and its use of MFNs and other anticompetitive practices in Western Pennsylvania have reduced the amount of competition in the market and ensured that Highmark BCBS's few competitors face higher costs than Highmark BCBS does. Without competition, and with the ability to increase premiums without losing customers, Highmark BCBS faces little pressure to keep prices low. 497. Over the past decade, Highmark BCBS generally raised individual and small group premiums by amounts greater than the national average. From 2000 to 2009 in Western Pennsylvania, the average annual employer-based health insurance premium in Pennsylvania rose 95.2 percent for families and 93.9 percent for individuals, while median earnings increased only 17.5 percent. From 2002-2006, health insurance premiums for single individuals in the Pittsburgh area rose approximately 55% and health insurance premiums for Pittsburgh families rose approximately 51%. In 2008, Highmark BCBS raised its rates for its CompleteCare program by 15%. In 2010, Pennsylvania Insurance Commissioner Joe Ario testified that Highmark shifted all of its small group customers from its wholly-owned non-profit Blue-brand subsidiaries, the premiums of which the PID regulates, to its wholly-owned for profit subsidiary, Highmark Health Insurance Company (also a BCBSA licensee), the premiums of which PID has no power to regulate, and then raised small group premiums up to 79 percent, triggering what 137 10 Ario said was the largest number of complaints ever received by PID against a carrier involving renewal quotes. In 2012, Highmark BCBS filed for premium rate increases of 9.8% for its "small-group" accounts. 498. These rising premiums have enabled Highmark BCBS to lavishly compensate its executives and grow its surplus in excessive amounts, unusual practices for a self-described non- profit organization. Highmark BCBS's reserves swelled to $4.7 billion on profits of nearly half a billion in 2011. In 2012, Highmark BCBS paid its CEOs more than $6 million and paid its Board of Directors $1.9 million. Rhode Island 499. However the geographic market is defined, BCBS-RI has the dominant market position, and exercises market power, in the sale of full-service commercial health insurance to individuals and small groups in relevant geographic markets throughout the state of Rhode Island. 500. BCBS-RI does business throughout the state of Rhode Island, is licensed to use the Blue Cross and Blue Shield trademarks and trade names throughout the state of Rhode Island, and has agreed with the other member plans of BCBSA that only BCBS-RI will do business in Rhode Island under the Blue brand. Therefore, the state of Rhode Island can be analyzed as a relevant geographic market within which to assess the effects of BCBS-RI's anticompetitive conduct. As of 2010, BCBS-RI held at least a 63 percent share of the relevant product market in Rhode Island, including at least 95 percent of the individual market and at least 74 percent in the small group market. 501. The U.S. Office of Management and Budget divides the 5 counties of Rhode Island into Metropolitan Statistical Areas and Micropolitan Statistical Areas according to 138 10 published standards applied to U.S. Census Bureau data. It states that "[t]he general concept of a metropolitan or micropolitan statistical area is that of a core area containing a substantial population nucleus, together with adjacent communities having a high degree of economic and social integration with that core." Therefore, Rhode Island's 1 Metropolitan Statistical Area,36 0 Micropolitan Statistical Areas, and 4 counties37 that are not part of Statistical Areas are a relevant geographic market within which to assess the effects of BCBS-RI's anticompetitive conduct. 502. BCBS-RI's powerful market share is far from the only evidence of its market power. As alleged below, BCBS-RI's market power has significantly raised costs, resulting in higher premiums for BCBS-RI enrollees. Supra-Competitive Premiums Charged By BCBS-RI 503. From October 1, 2008 to the present, BCBS-RI's illegal anticompetitive conduct, including its territorial market division agreements with the thirty-seven other members of BCBSA, has increased health care costs in Rhode Island, leading to inflated and/or supra- competitive premiums for individuals and small groups purchasing BCBS-RI's full-service commercial health insurance in the relevant geographic markets. BCBS-RI's market power and its use of anticompetitive practices in Rhode Island have reduced the amount of competition in the market and ensured that BCBS-RI's few competitors face higher costs than BCBS-RI does. Without competition, and with the ability to increase premiums without losing customers, BCBS-RI faces little pressure to keep prices low. 504. Over the past decade, BCBS-RI generally raised individual and small group premiums by amounts greater than the national average. For example, in 2011, BCBS-RI 36 The Rhode Island portion of the Providence-Warwick RI-MA Metropolitan Statistical Area. 37 Bristol, Kent, Newport, and Washington Counties. 139 10 increased premiums by approximately 10% and, just recently, announced its intention to increase premiums by 15% for small groups and 18% for individual insurance purchasers. 505. These rising premiums have enabled BCBS-RI to lavishly compensate its executives and grow its surplus in excessive amounts, unusual practices for a self-described non- profit organization. As a result of these and other inflated premiums, by 2011, BCBS-RI had amassed an approximately $320 million surplus. South Carolina 506. However the geographic market is defined, BCBS-SC has the dominant market position, and exercises market power, in the sale of full-service commercial health insurance to individuals and small groups in relevant geographic markets throughout the state of South Carolina. 507. BCBS-SC does business throughout the state of South Carolina, is licensed to use the Blue Cross and Blue Shield trademarks and trade names throughout the state of South Carolina, and has agreed with the other member plans of BCBSA that only BCBS-SC will do business in South Carolina under the Blue brand. Therefore, the state of South Carolina can be analyzed as a relevant geographic market within which to assess the effects of BCBS-SC's anticompetitive conduct. As of 2010, BCBS-SC held at least a 60 percent share of the relevant product market in South Carolina, including a 55 percent share in the individual market and a 70 percent in the small group market. 508. The U.S. Office of Management and Budget divides the 46 counties of South Carolina into Metropolitan Statistical Areas and Micropolitan Statistical Areas according to published standards applied to U.S. Census Bureau data. It states that "[t]he general concept of a metropolitan or micropolitan statistical area is that of a core area containing a substantial 140 10 population nucleus, together with adjacent communities having a high degree of economic and social integration with that core." Therefore, each of South Carolina's 10 Metropolitan Statistical Areas,38 7 Micropolitan Statistical Areas,39 and 14 counties40 that are not part of Statistical Areas is a relevant geographic market within which to assess the effects of BCBS- SC's anticompetitive conduct. BCBS-SC has the following shares of the relevant product market in the following Metropolitan Statistical Areas: Anderson (at least 61 percent); Charleston-North Charleston (at least 62 percent); Columbia (at least 61 percent), Florence (at least 63 percent), and Greenville (at least 53 percent). 509. BCBS-SC's powerful market share is far from the only evidence of its market power. As alleged below, BCBS-SC's market power has significantly raised costs, resulting in higher premiums for BCBS-SC enrollees. Supra-Competitive Premiums Charged By BCBS-SC 510. From October 1, 2008 to the present, BCBS-SC's illegal anticompetitive conduct, including its territorial market division agreements with the thirty-seven other members of BCBSA, has increased health care costs in South Carolina, leading to inflated and/or supra- 38 The South Carolina portion of the August-Richmond County GA-SC Metropolitan Statistical Area, the Charleston-North Charleston Metropolitan Statistical Area, the Charlotte-Concord-Gastonia Metropolitan Statistical Area, the Columbia Metropolitan Statistical Area, the Florence Metropolitan Statistical Area, the Greenville-Anderson-Mauldin Metropolitan Statistical Area, the Hilton Head Island-Bluffton- Beaufort Metropolitan Statistical Area, the South Carolina portion of the Myrtle Beach-Conway-North Myrtle Beach Metropolitan Statistical Area, the Spartanburg Metropolitan Statistical Area, and the Sumter Metropolitan Statistical Area. 39 The Bennettsville Micropolitan Statistical Area, the Gaffney Micropolitan Statistical Area, the Georgetown Micropolitan Statistical Area, the Greenwood Micropolitan Statistical Area, the Newberry Micropolitan Statistical Area, the Orangeburg Micropolitan Statistical Area, the Seneca Micropolitan Statistical Area. 40 Allendale, Bamberg, Barnwell, Chester, Chesterfield, Clarendon, Colleton, Dillon, Hampton, Lee, McCormick, Marion, Richland, and Williamsburg, counties. 141 10 competitive premiums for individuals and small groups purchasing BCBS-SC's full-service commercial health insurance in the relevant geographic markets. BCBS-SC's market power and its use of anticompetitive practices (including MFNs) in South Carolina have reduced the amount of competition in the market and ensured that BCBS-SC's few competitors face higher costs than BCBS-SC does. Without competition, and with the ability to increase premiums without losing customers, BCBS-SC faces little pressure to keep prices low. 511. Over the past decade, BCBS-SC generally raised individual and small group premiums by amounts greater than the national average. 512. These rising premiums have enabled BCBS-SC to lavishly compensate its executives and grow its surplus in excessive amounts, unusual practices for a self-described non- profit organization. In 2010, at least three BCBS-SC executives took home $1 million or more in salary, bonuses, and other compensation—then President and CEO M. Edward Sellers (approximately $2.26 million), Senior Vice President Stephen Wiggins (approximately $1.0 million), and Chief Financial Officer Robert Leichtle (approximately $1.3 million). Furthermore, each of the nine members of the BCBS-SC board of directors doubled their reported pay since 2009, according to compensation reports filed with the SCDOI. Some members increased their pay by as much as 163 percent in one year. All of the members of the board earned between $100,000 and $160,000 in 2010 for their limited board duties. Tennessee 513. However the geographic market is defined, BCBS-TN has the dominant market position, and exercises market power, in the sale of full-service commercial health insurance to individuals and small groups in relevant geographic markets throughout the state of Tennessee. 142 10 514. BCBS-TN does business throughout the state of Tennessee, is licensed to use the Blue Cross and Blue Shield trademarks and trade names throughout the state of Tennessee, and has agreed with the other member plans of BCBSA that only BCBS-TN will do business in Tennessee under the Blue brand. Therefore, the state of Tennessee can be analyzed as a relevant geographic market within which to assess the effects of BCBS-TN's anticompetitive conduct. As of 2010, BCBS-TN held at least a 46 percent share of the relevant product market in Tennessee, including (by 2011), including at least 70 percent of the small group market. The next largest insurer, Cigna, held only a 23 percent share of the relevant product market in Tennessee. 515. In analyzing its own business, BCBS-TN divides the state of Tennessee into three Offices, which compose three Regions: the West Tennessee Regional Office, containing counties in Western Tennessee; the Central Tennessee Regional Office, containing counties in central Tennessee, and the East Tennessee Regional Office, containing counties in Eastern Tennessee. Therefore, each BCBS-TN Regional Office region can be analyzed as a relevant geographic market within which to assess the effects of BCBS-TN's anticompetitive conduct. 516. The U.S. Office of Management and Budget divides the 95 counties of Tennessee into Metropolitan Statistical Areas and Micropolitan Statistical Areas according to published standards applied to U.S. Census Bureau data. It states that "[t]he general concept of a metropolitan or micropolitan statistical area is that of a core area containing a substantial population nucleus, together with adjacent communities having a high degree of economic and social integration with that core." Therefore, each of Tennessee's 10 Metropolitan Statistical Areas,41 15 Micropolitan Statistical Areas,42 and 34 counties43 that are not part of Statistical 41 The Tennessee portion of the Chattanooga TN-GA Metropolitan Statistical Area, the Tennessee portion of the Clarksville TN-KY Metropolitan Statistical Area, the Cleveland Metropolitan Statistical 143 10 Areas is a relevant geographic market within which to assess the effects of BCBS-TN's anticompetitive conduct. BCBS-TN has the following shares of the relevant product market in the following Metropolitan Statistical Areas: Chattanooga TN-GA (at least 46 percent), Clarksville TN-KY (at least 31 percent), Cleveland (at least 50 percent), Jackson (at least 53 percent), Johnson City (at least 41 percent), Kingsport-Bristol-Bristol TN-VA (at least 27 percent), Knoxville (at least 39 percent), Memphis TN-MS-AR (at least 21 percent), Morristown (at least 50 percent), and Nashville- Davidson-Murfreesboro-Franklin (at least 51 percent). 517. BCBS-TN's powerful market share is far from the only evidence of its market power. As alleged below, BCBS-TN's market power has significantly raised costs, resulting in higher premiums for BCBS-TN enrollees. Supra-Competitive Premiums Charged By BCBS-TN 518. From October 1, 2008 to the present, BCBS-TN's illegal anticompetitive conduct, including its territorial market division agreements with the thirty-seven other members of BCBSA, has increased health care costs in Tennessee, leading to inflated and/or supra- Area, the Jackson Metropolitan Statistical Area, the Johnson City Metropolitan Statistical Area, the Tennessee portion of the Kingsport-Bristol-Bristol TN-VA Metropolitan Statistical Area, the Knoxville Metropolitan Statistical Area, the Tennessee portion of the Memphis TN-MS-AR Metropolitan Statistical Area, the Morristown Metropolitan Statistical Area, and the Nashville-Davidson-Murfreesboro-Franklin Metropolitan Statistical Area. 42 The Athens Micropolitan Statistical Area, the Cookeville Micropolitan Statistical Area, the Crossville Micropolitan Statistical Area, the Dayton Micropolitan Statistical Area, the Dyersburg Micropolitan Statistical Area, the Lawrenceburg Micropolitan Statistical Area, the Lewisburg Micropolitan Statistical Area, the Martin Micropolitan Statistical Area, McMinnville Micropolitan Statistical Area, the Newport Micropolitan Statistical Area, the Paris Micropolitan Statistical Area, the Sevierville Micropolitan Statistical Area, the Shelbyville Micropolitan Statistical Area, the Tullahoma-Manchester Micropolitan Statistical Area, and the Tennessee portion of the Union City TN-KY Micropolitan Statistical Area. 43 Benton, Bledsoe, Carroll, Claiborne, Clay, Decatur, DeKalb, Fentress, Gibson, Giles, Greene, Grundy, Hancock, Hardeman, Hardin, Haywood, Henderson, Houston, Humphreys, Johnson, Lake, Lauderdale, Lewis, Lincoln, McNairy, Meigs, Monroe, Perry, Pickett, Scott, Stewart, Van Buren, Wayne, and White Counties. 144 10 competitive premiums for individuals and small groups purchasing BCBS-TN's full-service commercial health insurance in the relevant geographic markets. BCBS-TN's market power and its use of anticompetitive practices in Tennessee have reduced the amount of competition in the market and ensured that BCBS-TN's few competitors face higher costs than BCBS-TN does. Without competition, and with the ability to increase premiums without losing customers, BCBS-TN faces little pressure to keep prices low. 519. Over the past decade, BCBS-TN generally raised individual and small group premiums by amounts greater than the national average. 520. These rising premiums have enabled BCBS-TN to lavishly compensate its executives and grow its surplus in excessive amounts, unusual practices for a self-described non- profit organization. From 2006 to 2011, BCBS-TN doubled the salary its pays its directors and chief executive officer, raising part-time Chairman Lamar Partridge's salary to $100,000 and increasing CEO Vicky Gregg's compensation package to more than $4.4 million. Most BCBS- TN directors received from $75,000 to $90,000 each to attend quarterly board meetings and other committee and company sessions in 2010. Texas 521. However the geographic market is defined, BCBS-TX has the dominant market position, and exercises market power, in the sale of full-service commercial health insurance to individuals and small groups in relevant geographic markets throughout the state of Texas. 522. BCBS-TX does business throughout the state of Texas, is licensed to use the Blue Cross and Blue Shield trademarks and trade names throughout the state of Texas, and has agreed with the other member plans of BCBSA that only BCBS-TX will do business in Texas under the Blue brand. Therefore, the state of Texas can be analyzed as a relevant geographic market 145 10 within which to assess the effects of BCBS-TX's anticompetitive conduct. As of 2011, BCBS- TX held at least 57 percent of the relevant individual market and at least 46 percent of the relevant small group market in Texas. 523. The U.S. Office of Management and Budget divides the 254 counties of Texas into Metropolitan Statistical Areas and Micropolitan Statistical Areas according to published standards applied to U.S. Census Bureau data. It states that "[t]he general concept of a metropolitan or micropolitan statistical area is that of a core area containing a substantial population nucleus, together with adjacent communities having a high degree of economic and social integration with that core." Therefore, each of Texas's 25 Metropolitan Statistical Areas,44 43 Micropolitan Statistical Areas,45 and 126 counties46 that are not part of Statistical Areas is a 44 The Abilene Metropolitan Statistical Area, the Amarillo Metropolitan Statistical Area, the Austin- Round Rock Metropolitan Statistical Area, the Beaumont-Port Arthur Metropolitan Statistical Area, the Brownsville-Harlington Metropolitan Statistical Area, the College Station-Bryan Metropolitan Statistical Area, the Corpus Christi Metropolitan Statistical Area, the Dallas-Fort Worth-Arlington Metropolitan Statistical Area, the El Paso Metropolitan Statistical Area, the Houston-The Woodslands-Sugar Land Metropolitan Statistical Area, the Killeen-Temple Metropolitan Statistical Area, the Laredo Metropolitan Statistical Area, the Longview Metropolitan Statistical Area, the Lubbock Metropolitan Statistical Area, the McAllen-Edinburg-Mission Metropolitan Statistical Area, the Midland Metropolitan Statistical Area, the Odessa Metropolitan Statistical Area, the San Angelo Metropolitan Statistical Area, the San Antonio- New Braunfels Metropolitan Statistical Area, the Sherman-Denison Metropolitan Statistical Area, the Texas portion of the Texarkana TX-AR Metropolitan Statistical Area, the Tyler Metropolitan Statistical Area, the Victoria Metropolitan Statistical Area, Waco Metropolitan Statistical Area, and the Wichita Falls Metropolitan Statistical Area. 45 The Alice Micropolitan Statistical Area, the Andrews Micropolitan Statistical Area, the Athens Micropolitan Statistical Area, the Bay City Micropolitan Statistical Area, the Beeville Micropolitan Statistical Area, the Big Spring Micropolitan Statistical Area, the Borger Micropolitan Statistical Area, the Brenham Micropolitan Statistical Area, the Brownwood Micropolitan Statistical Area, the Corsicana Micropolitan Statistical Area, the Del Rio Micropolitan Statistical Area, the Dumas Micropolitan Statistical Area, the Eagle Pass Micropolitan Statistical Area, the El Campo Micropolitan Statistical Area, the Fredericksburg Micropolitan Statistical Area, the Gainesville Micropolitan Statistical Area, the Hereford Micropolitan Statistical Area, the Huntsville Micropolitan Statistical Area, the Jacksonville Micropolitan Statistical Area, the Kerrville Micropolitan Statistical Area, the Kingsville Micropolitan Statistical Area, the Lamesa Micropolitan Statistical Area, the Levelland Micropolitan Statistical Area, the Lufkin Micropolitan Statistical Area, the Marshall Micropolitan Statistical Area, the Mineral Wells 146 10 relevant geographic market within which to assess the effects of BCBS-TX's anticompetitive conduct. BCBS-TX has the following shares of the relevant product market in the following Metropolitan Statistical Areas: Abilene (at least 54 percent), Amarillo (at least 32 percent), Austin- Round Rock (at least 42 percent), Beaumont-Port Arthur (at least 49 percent), Brownsville-Harlington (at least 53 percent), College Station-Bryan (at least 56 percent), Corpus Christi (at least 45 percent), Dallas- Fort Worth-Arlington (at least 29 percent), El Paso (at least 27 percent), Killeen-Temple (at least 25 percent), Laredo (at least 68 percent), Longview (at least 54 percent), Lubbock (at least 57 percent), McAllen-Edinburg-Mission (at least 57 percent), Midland (at least 60 percent), Odessa (at least 65 percent), San Angelo (at least 72 percent), San Antonio-New Braunfels (at least 33 percent), Sherman- Denison (at least 46 percent), Texarkana TX-AR (at least 43 percent), Tyler (at least 62 percent), Victoria (at least 53 percent), Waco (at least 40 percent), and Wichita Falls (at least 74 percent). BCBS-TX is able to provide the information needed to calculate the remaining geographical markets. Micropolitan Statistical Area, the Mount Pleasant Micropolitan Statistical Area, the Nacogdoches Micropolitan Statistical Area, the Palestine Micropolitan Statistical Area, the Pampa Micropolitan Statistical Area, the Paris Micropolitan Statistical Area, the Pecos Micropolitan Statistical Area, the Plainview Micropolitan Statistical Area, the Port Lavaca Micropolitan Statistical Area, the Raymondville Micropolitan Statistical Area, the Rio Grande City Micropolitan Statistical Area, the Snyder Micropolitan Statistical Area, the Stephenville Micropolitan Statistical Area, the Sulpher Springs Micropolitan Statistical Area, the Sweetwater Micropolitan Statistical Area, the Uvalde Micropolitan Statistical Area, the Vernon Micropolitan Statistical Area, and the Zapata Micropolitan Statistical Area. 46 Bailey, Baylor, Blanco, Borden, Bosque, Brewster, Briscoe, Brooks, Burnet, Camp, Cass, Castro, Childress, Cochran, Coke, Coleman, Collingsworth, Colorado, Comanche, Concho, Cottle, Crane, Crockett, Culberson, Dallam, Delta, DeWitt, Dickens, Dimmit, Donley, Duval, Eastland, Edwards, Fannin, Fayette, Fisher, Floyd, Foard, Franklin, Freestone, Frio, Gaines, Garza, Gonzales, Grimes, Hall, Hamilton, Hansford, Hardeman, Hartley, Haskell, Hemphill, Hill, Houston, Jack, Jackson, Jasper, Jeff Davis, Jim Hogg, Karnes, Kent, Kimble, King, Kinney, Knox, La Salle, Lamb, Lavaca, Lee, Leon, Limestone, Lipscomb, Live Oak, Llano, Loving, Madison, Marion, Mason, McCulloch, McMullen, Menard, Milam, Mills, Mitchell, Montague, Morris, Motley, Ochiltree, Panola, Parmer, Pecos, Polk, Presidio, Rains, Reagan, Real, Red River, Refugio, Roberts, Runnels, Sabine, San Augustine, San Jacinto, San Saba, Schleicher, Shackelford, Shelby, Sherman, Stephens, Sterling, Stonewall, Sutton, Swisher, Terrell, Terry, Throckmorton, Tyler, Upton, Van Zandt, Ward, Wheeler, Winkler, Wood, Yoakum, Young, and Zavala counties. 147 10 524. BCBS-TX's powerful market share is far from the only evidence of its market power. As alleged below, BCBS-TX's market power has significantly raised costs, resulting in higher premiums for BCBS-TX enrollees. Supra-Competitive Premiums Charged By BCBS-TX 525. From October 1, 2008 to the present, BCBS-TX's illegal anticompetitive conduct, including its territorial market division agreements with the thirty-seven other members of BCBSA, has increased health care costs in Texas, leading to inflated and/or supra-competitive premiums for individuals and small groups purchasing BCBS-TX's full-service commercial health insurance in the relevant geographic markets. BCBS-TX's market power and its use of anticompetitive practices in Texas have reduced the amount of competition in the market and ensured that BCBS-TX's few competitors face higher costs than BCBS-TX does. Without competition, and with the ability to increase premiums without losing customers, BCBS-TX faces little pressure to keep prices low. 526. Over the past decade, BCBS-TX generally raised individual and small group premiums by amounts greater than the national average, including by as much as 25 percent on some policyholders. 527. These rising premiums have enabled BCBS-TX to lavishly compensate its executives and grow its surplus in excessive amounts, unusual practices for a self-described non- profit organization. As a result of these premiums, BCBS-TX's parent company, Health Care Service Corp., has a surplus of more than $620 million. 148 10 State Insurance Laws Do Not Protect Subscribers from the Market Allocation Scheme 528. At least some, and perhaps all, of the Defendant Individual Blue Plans charge their subscribers actual health insurance premiums rates that are not filed with or approved by state insurance authorities. 529. At least some, and perhaps all, of the Defendant Individual Blue Plans charge their subscribers more than the health insurance premium rates that are filed with or approved by state insurance authorities, to the extent any are. 530. The Individual Blue Plans that charge their subscribers actual health insurance premium rates that are never filed include, but are likely not limited to: a. BCBS-AL: BCBS-AL's actual charged premium rates vary from the base rates it files with the state based on certain characteristics of the subscriber and other reasons. b. BCBS-IL: BCBS-IL's actual charged premium rates vary from the base rates it files with the state based on certain characteristics of the subscriber and other reasons. c. BCBS-LA: BCBS-LA does not file any actual premium rates it charges its subscribers, even sample or "base" premium rates. d. BCBS-MI: BCBS-MI's actual charged premium rates vary from the base rates it files with the state, for certain policies. e. BCBS-MO: BCBS-MO does not file any actual premium rates it charges its subscribers, even sample or "base" premium rates. f. BCBS-NC: BCBS-NC's actual charged premium rates vary by as much as 25 percent from the base rates it files with the state. 149 10 g. Highmark BCBS: Highmark BCBS does not file any actual premium rates it charges its subscribers, even sample or "base" premium rates, for certain policies, and for other policies, permits insurers to deviate from the rates they do file by as much as 10 percent annually, so long as the rates charged are not 15 percent higher than the "base rate." h. BCBS-RI: BCBS-RI's actual charged premium rates vary from the base rates it files with the state based on certain characteristics of the subscriber, for certain policies. i. BCBS-SC: BCBS-SC does not file any actual premium rates it charges its subscribers, even sample or "base" premium rates, for certain policies. j. BCBS-TN: BCBS-TN does not file any actual premium rates it charges its subscribers, even sample or "base" premium rates, for certain policies. k. BCBS-TX: BCBS-TX does not file any actual premium rates it charges its subscribers, even sample or "base" premium rates. 531. Defendants that have conspired to allocate markets and thereby not enter a market of another Blue Plan do not file rates in the markets that they have not entered. Those Defendants are also not subject to state insurance regulatory authorities for the markets they have not entered. 532. Further, BCBSA is not regulated by state insurance regulatory authorities. 533. The state insurance authorities in any of the Defendant Individual Blue Plans' states do not regulate the division of markets and allocation of customers that is the subject of this Complaint. 150 10 534. No state insurance authority in any of the Defendant Individual Blue Plans' states clearly articulates and affirmatively expresses as state policy the challenged restraints on trade that are the subject of this Complaint, i.e., division of markets and allocation of customers. Nor does any state insurance authority in any of the Individual Blue Plans' states actively supervise the challenged restraints on trade that are the subject of this Complaint. 535. No Defendant Individual Blue Plan filed its insurance rate(s) with a federal regulatory agency. 536. No Defendant Individual Blue Plan disclosed the challenged restraints on trade that are the subject of this Complaint to any insurance authority. 537. The conspiracy alleged in this Complaint hindered the development of the health care markets defined herein, because the Defendant Individual Blue Plans acted to inhibit lower cost competitors from entering such markets. 538. The Defendant Individual Blue Plans breached their duties of good faith and fair dealing with subscribers. 151 10 VIOLATIONS ALLEGED NATIONWIDE CLASS (All Plaintiffs and the Nationwide Class Against All Defendants) Count One (Contract, Combination, or Conspiracy in Restraint of Trade in Violation of Sherman Act, Section 1) 539. The License Agreements, Membership Standards, and Guidelines agreed to by the Individual Blue Plans and BCBSA represent horizontal agreements entered into between the Individual Blue Plans, all of whom are competitors or potential competitors in the market for commercial health insurance. 540. Each of the License Agreements, Membership Standards, and Guidelines entered into between BCBSA and the Individual Blue Plans represents a contract, combination and/or conspiracy within the meaning of Section 1 of the Sherman Act. 541. Through the License Agreements, Membership Standards, and Guidelines, BCBSA and the Individual Blue Plans have agreed to divide and allocate the geographic markets for the sale of commercial health insurance into a series of exclusive areas for each of the thirty- eight BCBSA members. By so doing, the BCBSA members (the Individual Blue Plans) have conspired to restrain trade in violation of Section 1 of the Sherman Act. These market allocation agreements are per se illegal under Section 1 of the Sherman Act. 542. As a direct and proximate result of the Individual Blue Plans' continuing violations of Section 1 of the Sherman Act described in this Complaint, Plaintiffs and other members of the Nationwide Class have suffered injury. 152 10 543. Plaintiffs and the Nationwide Class seek an injunction prohibiting the Individual Blue Plans and BCBSA from entering into, or from honoring or enforcing, any agreements that restrict the territories or geographic areas in which any BCBSA member may compete. Count Two (Conspiracy to Monopolize in Violation of Sherman Act, Section 2) 544. Each of the Service Areas in which the Individual Blue Plans compete constitutes a market or markets in which competition may be harmed. 545. The License Agreements, Membership Standards, and Guidelines agreed to by the Individual Blue Plans and BCBSA represent horizontal agreements entered into between the Individual Blue Plans, all of whom are competitors or potential competitors in the market for commercial health insurance. 546. Each of the Individual Blue Plans and BCBSA possessed the specific intent to monopolize when conceiving of and implementing the policies challenged in this Complaint. 547. The License Agreements, Membership Standards, and Guidelines agreed to by each of the Individual Blue Plans and BCBSA, as well as meetings between the Individual Blue Plans and attempts by the Individual Blue Plans to enforce the policies challenged in this Complaint, represent overt acts in furtherance of the Individual Blue Plans' conspiracy to monopolize. 548. As a direct and proximate result of the Individual Blue Plans' continuing violations of Section 2 of the Sherman Act described in this Complaint, Plaintiffs and other members of the Nationwide Class have suffered injury. 549. Plaintiffs and the Nationwide Class seek money damages from BCBSA and the Individual Blue Plans for their violations of Section 2 of the Sherman Act. 153 10 ALABAMA (Plaintiffs American Electric Motor Services, Inc. and CB Roofing, LLC and the Alabama Class Against Defendants BCBS-AL and BCBSA) Count Three (Contract, Combination, or Conspiracy in Restraint of Trade in Violation of Sherman Act, Section 1) 550. Plaintiffs repeat and reallege the allegations in all Paragraphs above. 551. The License Agreements, Membership Standards, and Guidelines agreed to by BCBS-AL and BCBSA represent horizontal agreements entered into between BCBS-AL and the 37 other member plans of BCBSA, all of whom are competitors or potential competitors in the market for commercial health insurance. 552. Each of the License Agreements, Membership Standards, and Guidelines entered into between BCBSA and BCBS-AL represents a contract, combination and/or conspiracy within the meaning of Section 1 of the Sherman Act. 553. Through the License Agreements, Membership Standards, and Guidelines, BCBSA and BCBS-AL have agreed to divide and allocate the geographic markets for the sale of commercial health insurance into a series of exclusive areas for each of the thirty-eight BCBSA members. By so doing, the BCBSA members (including BCBS-AL) have conspired to restrain trade in violation of Section 1 of the Sherman Act. These market allocation agreements are per se illegal under Section 1 of the Sherman Act. 554. The market allocation agreements entered into between BCBS-AL and the thirty- seven other BCBSA member plans (executed through the BCBSA License Agreements and related Membership Standards and Guidelines) are anticompetitive. 154 10 555. BCBS-AL has market power in the sale of full-service commercial health insurance to individuals and small groups in each relevant geographic and product market alleged herein. 556. Each of the challenged agreements has had substantial and unreasonable anticompetitive effects in the relevant markets, including but not limited to: a. Reducing the number of health insurance companies competing with BCBS- AL throughout Alabama; b. Unreasonably limiting the entry of competitor health insurance companies into Alabama; c. Allowing BCBS-AL to maintain and enlarge its market power throughout Alabama; d. Allowing BCBS-AL to supra-competitively raise the premiums charged to consumers by artificially inflated, unreasonable, and/or supra-competitive amounts; e. Depriving consumers of health insurance of the benefits of free and open competition. 557. The procompetitive benefits, if any, of the market allocation agreements alleged above do not outweigh the anticompetitive effects of those agreements. 558. The market allocation agreements in the License Agreements, Membership Standards, and Guidelines unreasonably restrain trade in violation of Section 1 of the Sherman Act. 559. As a direct and proximate result of the Individual Blue Plans' continuing violations of Section 1 of the Sherman Act described in this Complaint, Plaintiffs and other 155 10 members of the Alabama Class have suffered injury and damages in an amount to be proven at trial. These damages consist of having paid artificially inflated, unreasonable, and/or supra- competitive and higher health insurance premiums to BCBS-AL than they would have paid with increased competition and but for the Sherman Act violations. 560. Plaintiffs and the Alabama Class seek money damages from BCBS-AL and BCBSA for their violations of Section 1 of the Sherman Act. Count Four (Willful Acquisition and Maintenance of a Monopoly in the Relevant Market for Private Health Insurance in Violation of Sherman Act, Section 2) 561. Plaintiffs repeat and reallege the allegations in all Paragraphs above. 562. BCBS-AL has monopoly power in the individual and small group full-service commercial health insurance market in Alabama. This monopoly power is evidenced by, among other things, BCBS-AL's high market share of the commercial health insurance market, including its increasing market share even as it has raised premiums. 563. BCBS-AL has abused and continues to abuse its monopoly power to maintain and enhance its market dominance by unreasonably restraining trade, thus artificially inflating the premiums it charges to consumers. 564. BCBS-AL's conduct constitutes unlawful monopolization and unlawful anti- competitive conduct in the relevant markets in violation of Section 2 of the Sherman Act, and such violation and the effects thereof are continuing and will continue unless injunctive relief is granted. 565. As a direct and proximate result of the Individual Blue Plans' continuing violations of Section 2 of the Sherman Act described in this Complaint, Plaintiffs and other members of the Alabama Class have suffered injury and damages in an amount to be proven at 156 10 trial. These damages consist of having paid artificially inflated, unreasonable, and/or supra- competitive and higher health insurance premiums to BCBS-AL than they would have paid but for the Sherman Act violations. 566. Plaintiffs and the Alabama Class seek money damages from BCBS-AL for its violations of Section 2 of the Sherman Act. Count Five (Willful Attempted Monopolization in the Relevant Market for Private Health Insurance in Violation of Sherman Act, Section 2) 567. Plaintiffs repeat and reallege the allegations in all Paragraphs above. 568. BCBS-AL has acted with the specific intent to monopolize the relevant markets. 569. There was and is a dangerous possibility that BCBS-AL will succeed in its attempt to monopolize the relevant markets because BCBS-AL controls a large percentage of those markets already, and further success by BCBS-AL in excluding competitors from those markets will confer a monopoly on BCBS-AL in violation of Section 2 of the Sherman Act. 570. BCBS-AL's attempted monopolization of the relevant markets has harmed competition in those markets and has caused injury to Plaintiffs and the Alabama Class. Premiums charged by BCBS-AL have been higher than they would have been in a competitive market. 571. Plaintiffs and the Alabama Class have been damaged as the result of BCBS-AL's attempted monopolization of the relevant markets. 157 10 ARKANSAS (Plaintiffs Linda Mills and Frank Curtis and the Arkansas Class Against Defendants BCBS-AR and BCBSA) Count Six (Contract, Combination, or Conspiracy in Restraint of Trade in Violation of Sherman Act, Section 1) 572. Plaintiffs repeat and reallege the allegations in all Paragraphs above. 573. The License Agreements, Membership Standards, and Guidelines agreed to by BCBS-AR and BCBSA represent horizontal agreements entered into between BCBS-AR and the 37 other member plans of BCBSA, all of whom are competitors or potential competitors in the market for commercial health insurance. 574. Each of the License Agreements, Membership Standards, and Guidelines entered into between BCBSA and BCBS-AR represents a contract, combination and/or conspiracy within the meaning of Section 1 of the Sherman Act. 575. Through the License Agreements, Membership Standards, and Guidelines, BCBSA and BCBS-AR have agreed to divide and allocate the geographic markets for the sale of commercial health insurance into a series of exclusive areas for each of the thirty-eight BCBSA members. By so doing, the BCBSA members (including BCBS-AR) have conspired to restrain trade in violation of Section 1 of the Sherman Act. These market allocation agreements are per se illegal under Section 1 of the Sherman Act. 576. The market allocation agreements entered into between BCBS-AR and the thirty- seven other BCBSA member plans (executed through the BCBSA License Agreements and related Membership Standards and Guidelines) are anticompetitive. 158 10 577. BCBS-AR has market power in the sale of full-service commercial health insurance to individuals and small groups in each relevant geographic and product market alleged herein. 578. Each of the challenged agreements has had substantial and unreasonable anticompetitive effects in the relevant markets, including but not limited to: a. Reducing the number of health insurance companies competing with BCBS- AR throughout Arkansas; b. Unreasonably limiting the entry of competitor health insurance companies into Arkansas; c. Allowing BCBS-AR to maintain and enlarge its market power throughout Arkansas; d. Allowing BCBS-AR to supra-competitively raise the premiums charged to consumers by artificially inflated, unreasonable, and/or supra-competitive amounts; e. Depriving consumers of health insurance of the benefits of free and open competition. 579. The procompetitive benefits, if any, of the market allocation agreements alleged above do not outweigh the anticompetitive effects of those agreements. 580. The market allocation agreements in the License Agreements, Membership Standards, and Guidelines unreasonably restrain trade in violation of Section 1 of the Sherman Act. 581. As a direct and proximate result of the Individual Blue Plans' continuing violations of Section 1 of the Sherman Act described in this Complaint, Plaintiffs and other 159 10 members of the Arkansas Class have suffered injury and damages in an amount to be proven at trial. These damages consist of having paid artificially inflated, unreasonable, and/or supra- competitive and higher health insurance premiums to BCBS-AR than they would have paid with increased competition and but for the Sherman Act violations. 582. Plaintiffs and the Arkansas Class seek money damages from BCBS-AR and BCBSA for their violations of Section 1 of the Sherman Act. Count Seven (Willful Acquisition and Maintenance of a Monopoly in the Relevant Market for Private Health Insurance in Violation of Sherman Act, Section 2) 583. Plaintiffs repeat and reallege the allegations in all Paragraphs above. 584. BCBS-AR has monopoly power in the individual and small group full-service commercial health insurance market in Arkansas. This monopoly power is evidenced by, among other things, BCBS-AR's high market share of the commercial health insurance market, including its increasing market share even as it has raised premiums. 585. BCBS-AR has abused and continues to abuse its monopoly power to maintain and enhance its market dominance by unreasonably restraining trade, thus artificially inflating the premiums it charges to consumers. 586. BCBS-AR's conduct constitutes unlawful monopolization and unlawful anti- competitive conduct in the relevant markets in violation of Section 2 of the Sherman Act, and such violation and the effects thereof are continuing and will continue unless injunctive relief is granted. 587. As a direct and proximate result of the Individual Blue Plans' continuing violations of Section 2 of the Sherman Act described in this Complaint, Plaintiffs and other members of the Arkansas Class have suffered injury and damages in an amount to be proven at 160 10 trial. These damages consist of having paid artificially inflated, unreasonable, and/or supra- competitive and higher health insurance premiums to BCBS-AR than they would have paid but for the Sherman Act violations. 588. Plaintiffs and the Arkansas Class seek money damages from BCBS-AR for its violations of Section 2 of the Sherman Act. Count Eight (Willful Attempted Monopolization in the Relevant Market for Private Health Insurance in Violation of Sherman Act, Section 2) 589. Plaintiffs repeat and reallege the allegations in all Paragraphs above. 590. BCBS-AR has acted with the specific intent to monopolize the relevant markets. 591. There was and is a dangerous possibility that BCBS-AR will succeed in its attempt to monopolize the relevant markets because BCBS-AR controls a large percentage of those markets already, and further success by BCBS-AR in excluding competitors from those markets will confer a monopoly on BCBS-AR in violation of Section 2 of the Sherman Act. 592. BCBS-AR's attempted monopolization of the relevant markets has harmed competition in those markets and has caused injury to Plaintiffs and the Arkansas Class. Premiums charged by BCBS-AR have been higher than they would have been in a competitive market. 593. Plaintiffs and the Arkansas Class have been damaged as the result of BCBS-AR's attempted monopolization of the relevant markets. Count Nine (Unjust Enrichment) 594. Plaintiffs repeat and reallege the allegations in all Paragraphs above. 161 10 595. BCBS-AR has benefitted from its unlawful acts through Plaintiffs' and the Arkansas Class's overpayments for health insurance premiums to BCBS-AR. BCBS-AR has unjustly enriched itself at the expense of the Plaintiffs and the Arkansas Class. 596. It would be inequitable for BCBS-AR to be permitted to retain the benefit of these supra-competitive premiums that were conferred by Plaintiffs and the Arkansas Class and retained by BCBS-AR. 597. By reason of its unlawful conduct, BCBS-AR must make restitution to Plaintiffs and the Arkansas Class. 162 10 CALIFORNIA (Plaintiff Judy Sheridan and the California Class Against Defendants BS-CA and BCBSA) Count Ten (Contract, Combination, or Conspiracy in Restraint of Trade in Violation of Sherman Act, Section 1) 598. Plaintiff repeats and realleges the allegations in all Paragraphs above. 599. The License Agreements, Membership Standards, and Guidelines agreed to by BC-CA and BCBSA and BS-CA and BCBSA represent horizontal agreements entered into between BC-CA, BS-CA, and the 36 other member plans of BCBSA, all of whom are competitors or potential competitors in the market for commercial health insurance. 600. Each of the License Agreements, Membership Standards, and Guidelines entered into between BCBSA and BC-CA and BCBSA and BS-CA represents a contract, combination and/or conspiracy within the meaning of Section 1 of the Sherman Act. 601. Through the License Agreements, Membership Standards, and Guidelines, BCBSA, BC-CA, and BS-CA have agreed to divide and allocate the geographic markets for the sale of commercial health insurance into a series of exclusive areas for each of the thirty-eight BCBSA members. By so doing, the BCBSA members (including BC-CA and BS-CA) have conspired to restrain trade in violation of Section 1 of the Sherman Act. These market allocation agreements are per se illegal under Section 1 of the Sherman Act. 602. The market allocation agreements entered into between BC-CA and the thirty- seven other BCBSA member plans and BS-CA and the thirty-seven other BCBSA member plans (executed through the BCBSA License Agreements and related Membership Standards and Guidelines) are anticompetitive. 163 10 603. BC-CA and BS-CA have market power in the sale of full-service commercial health insurance to individuals and small groups in each relevant geographic and product market alleged herein. 604. Each of the challenged agreements has had substantial and unreasonable anticompetitive effects in the relevant markets, including but not limited to: a. Reducing the number of health insurance companies competing with BC-CA and BS-CA throughout California; b. Unreasonably limiting the entry of competitor health insurance companies into California; c. Allowing BC-CA and BS-CA to maintain and enlarge their market power throughout California; d. Allowing BC-CA and BS-CA to supra-competitively raise the premiums charged to consumers by artificially inflated, unreasonable, and/or supra- competitive amounts; e. Depriving consumers of health insurance of the benefits of free and open competition. 605. The procompetitive benefits, if any, of the market allocation agreements alleged above do not outweigh the anticompetitive effects of those agreements. 606. The market allocation agreements in the License Agreements, Membership Standards, and Guidelines unreasonably restrain trade in violation of Section 1 of the Sherman Act. 607. As a direct and proximate result of the Individual Blue Plans' continuing violations of Section 1 of the Sherman Act described in this Complaint, Plaintiff and other 164 10 members of the California Class have suffered injury and damages in an amount to be proven at trial. These damages consist of having paid artificially inflated, unreasonable, and/or supra- competitive and higher health insurance premiums to BC-CA and BS-CA than they would have paid with increased competition and but for the Sherman Act violations. 608. Plaintiff and the California Class seek money damages from BS-CA and BCBSA for their violations of Section 1 of the Sherman Act. Count Eleven (Willful Acquisition and Maintenance of a Monopoly in the Relevant Market for Private Health Insurance in Violation of Sherman Act, Section 2) 609. Plaintiff repeats and realleges the allegations in all Paragraphs above. 610. BC-CA and BS-CA have monopoly power in the individual and small group full- service commercial health insurance market in California. This monopoly power is evidenced by, among other things, BC-CA's and BS-CA's high market shares of the commercial health insurance market, including their increasing market share even as they have raised premiums. 611. BC-CA and BS-CA have abused and continue to abuse their monopoly power to maintain and enhance their market dominance by unreasonably restraining trade, thus artificially inflating the premiums they charge to consumers. 612. BC-CA's and BS-CA's conduct constitutes unlawful monopolization and unlawful anti-competitive conduct in the relevant markets in violation of Section 2 of the Sherman Act, and such violation and the effects thereof are continuing and will continue unless injunctive relief is granted. 613. As a direct and proximate result of the Individual Blue Plans' continuing violations of Section 2 of the Sherman Act described in this Complaint, Plaintiff and other members of the California Class have suffered injury and damages in an amount to be proven at 165 10 trial. These damages consist of having paid artificially inflated, unreasonable, and/or supra- competitive and higher health insurance premiums to BC-CA and BS-CA than they would have paid but for the Sherman Act violations. 614. Plaintiff and the California Class seek money damages from BS-CA for BC-CA's and BS-CA's violations of Section 2 of the Sherman Act. Count Twelve (Willful Attempted Monopolization in the Relevant Market for Private Health Insurance in Violation of Sherman Act, Section 2) 615. Plaintiff repeats and realleges the allegations in all Paragraphs above. 616. BC-CA and BS-CA have acted with the specific intent to monopolize the relevant markets. 617. There was and is a dangerous possibility that BC-CA and BS-CA will succeed in their attempts to monopolize the relevant markets because BC-CA and BS-CA each control a large percentage of those markets already, and further success by BC-CA and BS-CA in excluding competitors from those markets will confer monopolies on BC-CA and BS-CA in violation of Section 2 of the Sherman Act. 618. BC-CA's and BS-CA's attempted monopolizations of the relevant markets has harmed competition in those markets and have caused injury to Plaintiff and the California Class. Premiums charged by BC-CA and BS-CA have been higher than they would have been in a competitive market. 619. Plaintiff and the California Class have been damaged as the result of BC-CA's and BS-CA's attempted monopolizations of the relevant markets. 166 10 Count Thirteen (Contract, Combination, or Conspiracy in Restraint of Trade in Violation of the Cartwright Act, California Business and Professions Code §§16720, et seq.) 620. Plaintiff repeats and realleges the allegations in all Paragraphs above. 621. The License Agreements, Membership Standards, and Guidelines agreed to by BC-CA and BCBSA and BS-CA and BCBSA represent horizontal agreements entered into between BC-CA, BS-CA, and the 36 other member plans of BCBSA, all of whom are competitors or potential competitors in the market for commercial health insurance. 622. Each of the License Agreements, Membership Standards, and Guidelines entered into between BCBSA and BC-CA and BS-CA and BCBSA represents a contract, combination and/or conspiracy within the meaning of the Cartwright Act. 623. Through the License Agreements, Membership Standards, and Guidelines, BCBSA and BC-CA have agreed to divide and allocate the geographic markets for the sale of commercial health insurance into a series of exclusive areas for each of the thirty-eight BCBSA members. By so doing, the BCBSA members (including BC-CA and BS-CA) have conspired to restrain trade in violation of the Cartwright Act. These market allocation agreements are per se illegal under the Cartwright Act. 624. The market allocation agreements entered into between BC-CA, BS-CA, and the thirty-six other BCBSA member plans (executed through the BCBSA License Agreements and related Membership Standards and Guidelines) are anticompetitive. 625. BC-CA and BS-CA have market power in the sale of full-service commercial health insurance to individuals and small groups in each relevant geographic and product market alleged herein. 167 10 626. Each of the challenged agreements has had substantial and unreasonable anticompetitive effects in the relevant markets, including but not limited to: a. Reducing the number of health insurance companies competing with BC-CA and BS-CA throughout California; b. Unreasonably limiting the entry of competitor health insurance companies into California; c. Allowing BC-CA and BS-CA to maintain and enlarge their market power throughout California; d. Allowing BC-CA and BS-CA to supra-competitively raise the premiums charged to consumers by artificially inflated, unreasonable, and/or supra- competitive amounts; e. Depriving consumers of health insurance of the benefits of free and open competition. 627. The procompetitive benefits, if any, of the market allocation agreements alleged above do not outweigh the anticompetitive effects of those agreements. 628. The market allocation agreements in the License Agreements, Membership Standards, and Guidelines unreasonably restrain trade in violation of the Cartwright Act. 629. As a direct and proximate result of the Individual Blue Plans' continuing violations of the Cartwright Act described in this Complaint, Plaintiff and other members of the California Class have suffered injury and damages in an amount to be proven at trial. These damages consist of having paid artificially inflated, unreasonable, and/or supra-competitive and higher health insurance premiums to BC-CA and BS-CA than they would have paid with increased competition and but for the Cartwright Act violations. 168 10 630. Plaintiff and the California Class seek money damages from BS-CA and BCBSA for their violations of the Cartwright Act. Count Fourteen (Willful Acquisition and Maintenance of a Monopoly in the Relevant Market for Private Health Insurance in Violation of the Cartwright Act, California Business and Professions Code §16727) 631. Plaintiff repeats and realleges the allegations in all Paragraphs above. 632. BC-CA and BS-CA have monopoly power in the individual and small group full- service commercial health insurance market in California. This monopoly power is evidenced by, among other things, BC-CA's and BS-CA's high market shares of the commercial health insurance market, including their increasing market shares even as they have raised premiums. 633. BC-CA and BS-CA have abused and continue to abuse their monopoly power to maintain and enhance their market dominance by unreasonably restraining trade, thus artificially inflating the premiums they charge to consumers. 634. BC-CA's and BS-CA's conduct constitutes unlawful monopolization and unlawful anti-competitive conduct in the relevant markets in violation of §16727 of the Cartwright Act, and such violation and the effects thereof are continuing and will continue unless injunctive relief is granted. 635. As a direct and proximate result of the Individual Blue Plans' continuing violations of §16727 of the Cartwright Act described in this Complaint, Plaintiff and other members of the California Class have suffered injury and damages in an amount to be proven at trial. These damages consist of having paid artificially inflated, unreasonable, and/or supra- competitive and higher health insurance premiums to BC-CA and BS-CA than they would have paid but for the Cartwright Act violations. 169 10 636. Under California Business and Professions Code §16750(a), Plaintiff and the California Class seek money damages and attorneys' fees from BS-CA. Count Fifteen (Willful Attempted Monopolization in the Relevant Market for Private Health Insurance in Violation of the Cartwright Act, California Business and Professions Code §16727) 637. Plaintiff repeats and realleges the allegations in all Paragraphs above. 638. BC-CA and BS-CA have acted with the specific intent to monopolize the relevant markets. 639. There was and is a dangerous possibility that BC-CA and BS-CA will succeed in their attempts to monopolize the relevant markets because BC-CA and BS-CA control a large percentage of those markets already. Further success by BC-CA and BS-CA in excluding competitors from those markets is an attempt to monopolize, or an attempt to combine or conspire to monopolize, and will confer a monopoly on BC-CA and BS-CA in violation of §16727 of the Cartwright Act. 640. BC-CA's and BS-CA's attempted monopolization of the relevant markets has harmed competition in those markets and has caused injury to Plaintiff and the California Class. Premiums charged by BC-CA and BS-CA have been higher than they would have been in a competitive market. 641. Plaintiff and the California Class have been damaged as the result of BC-CA's and BS-CA's attempted monopolization of the relevant markets and seek treble damages from BS-CA. Count Sixteen (Violation of California Business and Professions Code §17200, et seq.) 642. Plaintiff repeats and realleges the allegations in all Paragraphs above. 170 10 643. Through the License Agreements, Membership Standards, and Guidelines, BCBSA and BC-CA and BCBSA and BS-CA have agreed to divide and allocate the geographic markets for the sale of commercial health insurance into a series of exclusive areas for each of the thirty-eight BCBSA members. By so doing, the BCBSA members (including BC-CA and BS-CA) have engaged in unfair competition, including unlawful and unfair business practices and conduct. 644. The License Agreements, Membership Standards, and Guidelines entered into between BC-CA, BS-CA, and the thirty-six other BCBSA member plans are anticompetitive and in violation of the Sherman Act Sections 1 and 2 and the Cartwright Act, California Business and Professions Code §16720 et seq. 645. As a result of BC-CA's and BS-CA's conduct challenged in this Complaint, the California Class has suffered substantial injury that the Class could not reasonably have avoided and that is not outweighed by any countervailing benefits to consumers or to competition. 646. BC-CA's and BS-CA's conduct challenged in this Complaint offends established laws, including the Sherman and Cartwright Acts, and is immoral, unethical, oppressive, unscrupulous, and substantially injurious to consumers. 647. Plaintiff and the California Class seek an injunction prohibiting BS-CA from entering into, or from honoring or enforcing, any agreements that restrict the territories or geographic areas in which any BCBSA member may compete. Count Seventeen (Unjust Enrichment) 648. Plaintiff repeats and realleges the allegations in all Paragraphs above. 649. BC-CA and BS-CA have benefitted from their unlawful acts through the overpayments for health insurance premiums of Plaintiff and the California Class. 171 10 650. It would be inequitable for BC-CA and BS-CA to retain the benefit of these overpayments that were conferred by Plaintiff and the California Class and retained by BC-CA and BS-CA. 651. By reason of its unlawful conduct, BS-CA must make restitution to Plaintiff and the California Class. 652. Further, any action that might have been taken by Plaintiffs and the California Class to pursue administrative remedies would have been futile. In equity, BC-CA and BS-CA cannot retain the economic benefits derived from their improper conduct and BS-CA should be ordered to pay restitution and prejudgment interest to Plaintiff and the California Class. 172 10 FLORIDA (Plaintiff Jennifer Ray Davidson and the Florida Class Against Defendants BCBS-FL and BCBSA) Count Eighteen (Contract, Combination, or Conspiracy in Restraint of Trade in Violation of Sherman Act, Section 1) 653. Plaintiff repeats and realleges the allegations in all Paragraphs above. 654. The License Agreements, Membership Standards, and Guidelines agreed to by BCBS-FL and BCBSA represent horizontal agreements entered into between BCBS-FL and the 37 other member plans of BCBSA, all of whom are competitors or potential competitors in the market for commercial health insurance. 655. Each of the License Agreements, Membership Standards, and Guidelines entered into between BCBSA and BCBS-FL represents a contract, combination and/or conspiracy within the meaning of Section 1 of the Sherman Act. 656. Through the License Agreements, Membership Standards, and Guidelines, BCBSA and BCBS-FL have agreed to divide and allocate the geographic markets for the sale of commercial health insurance into a series of exclusive areas for each of the thirty-eight BCBSA members. By so doing, the BCBSA members (including BCBS-FL) have conspired to restrain trade in violation of Section 1 of the Sherman Act. These market allocation agreements are per se illegal under Section 1 of the Sherman Act. 657. The market allocation agreements entered into between BCBS-FL and the thirty- seven other BCBSA member plans (executed through the BCBSA License Agreements and related Membership Standards and Guidelines) are anticompetitive. 173 10 658. BCBS-FL has market power in the sale of full-service commercial health insurance to individuals and small groups in each relevant geographic and product market alleged herein. 659. Each of the challenged agreements has had substantial and unreasonable anticompetitive effects in the relevant markets, including but not limited to: a. Reducing the number of health insurance companies competing with BCBS- FL throughout Florida; b. Unreasonably limiting the entry of competitor health insurance companies into Florida; c. Allowing BCBS-FL to maintain and enlarge its market power throughout Florida; d. Allowing BCBS-FL to supra-competitively raise the premiums charged to consumers by artificially inflated, unreasonable, and/or supra-competitive amounts; e. Depriving consumers of health insurance of the benefits of free and open competition. 660. The procompetitive benefits, if any, of the market allocation agreements alleged above do not outweigh the anticompetitive effects of those agreements. 661. The market allocation agreements in the License Agreements, Membership Standards, and Guidelines unreasonably restrain trade in violation of Section 1 of the Sherman Act. 662. As a direct and proximate result of the Individual Blue Plans' continuing violations of Section 1 of the Sherman Act described in this Complaint, Plaintiff and other 174 10 members of the Florida Class have suffered injury and damages in an amount to be proven at trial. These damages consist of having paid artificially inflated, unreasonable, and/or supra- competitive and higher health insurance premiums to BCBS-FL than they would have paid with increased competition and but for the Sherman Act violations. 663. Plaintiff and the Florida Class seek money damages from BCBS-FL and BCBSA for their violations of Section 1 of the Sherman Act. Count Nineteen (Willful Acquisition and Maintenance of a Monopoly in the Relevant Market for Private Health Insurance in Violation of Sherman Act, Section 2) 664. Plaintiff repeats and realleges the allegations in all Paragraphs above. 665. BCBS-FL has monopoly power in the individual and small group full-service commercial health insurance market in Florida. This monopoly power is evidenced by, among other things, BCBS-FL's high market share of the commercial health insurance market, including its increasing market share even as it has raised premiums. 666. BCBS-FL has abused and continues to abuse its monopoly power to maintain and enhance its market dominance by unreasonably restraining trade, thus artificially inflating the premiums it charges to consumers. 667. BCBS-FL's conduct constitutes unlawful monopolization and unlawful anti- competitive conduct in the relevant markets in violation of Section 2 of the Sherman Act, and such violation and the effects thereof are continuing and will continue unless injunctive relief is granted. 668. As a direct and proximate result of the Individual Blue Plans' continuing violations of Section 2 of the Sherman Act described in this Complaint, Plaintiff and other members of the Florida Class have suffered injury and damages in an amount to be proven at 175 10 trial. These damages consist of having paid artificially inflated, unreasonable, and/or supra- competitive and higher health insurance premiums to BCBS-FL than they would have paid but for the Sherman Act violations. 669. Plaintiffs and the Florida Class seek money damages from BCBS-FL for its violations of Section 2 of the Sherman Act. Count Twenty (Willful Attempted Monopolization in the Relevant Market for Private Health Insurance in Violation of Sherman Act, Section 2) 670. Plaintiff repeats and realleges the allegations in all Paragraphs above. 671. BCBS-FL has acted with the specific intent to monopolize the relevant markets. 672. There was and is a dangerous possibility that BCBS-FL will succeed in its attempt to monopolize the relevant markets because BCBS-FL controls a large percentage of those markets already, and further success by BCBS-FL in excluding competitors from those markets will confer a monopoly on BCBS-FL in violation of Section 2 of the Sherman Act. 673. BCBS-FL's attempted monopolization of the relevant markets has harmed competition in those markets and has caused injury to Plaintiff and the Florida Class. Premiums charged by BCBS-FL have been higher than they would have been in a competitive market. 674. Plaintiff and the Florida Class have been damaged as the result of BCBS-FL's attempted monopolization of the relevant markets. Count Twenty-One (Contract, Combination, or Conspiracy in Restraint of Trade in Violation of Fla. Stat. § 542.18) 675. Plaintiff repeats and realleges the allegations in all Paragraphs above. 676. The License Agreements, Membership Standards, and Guidelines agreed to by BCBS-FL and BCBSA represent horizontal agreements entered into between BCBS-FL and the 176 10 37 other member plans of BCBSA, all of whom are competitors or potential competitors in the market for commercial health insurance. 677. Each of the License Agreements, Membership Standards, and Guidelines entered into between BCBSA and BCBS-FL represents a contract, combination and/or conspiracy within the meaning of Fla. Stat. § 542.18. 678. Through the License Agreements, Membership Standards, and Guidelines, BCBSA and BCBS-FL have agreed to divide and allocate the geographic markets for the sale of commercial health insurance into a series of exclusive areas for each of the thirty-eight BCBSA members. By so doing, the BCBSA members (including BCBS-FL) have conspired to restrain trade in violation of Fla. Stat. § 542.18. These market allocation agreements are per se illegal under Fla. Stat. § 542.18. 679. The market allocation agreements entered into between BCBS-FL and the thirty- seven other BCBSA member plans (executed through the BCBSA License Agreements and related Membership Standards and Guidelines) are anticompetitive. 680. BCBS-FL has market power in the sale of full-service commercial health insurance to individuals and small groups in each relevant geographic and product market alleged herein. 681. Each of the challenged agreements has had substantial and unreasonable anticompetitive effects in the relevant markets, including but not limited to: a. Reducing the number of health insurance companies competing with BCBS- FL throughout Florida; b. Unreasonably limiting the entry of competitor health insurance companies into Florida; 177 10 c. Allowing BCBS-FL to maintain and enlarge its market power throughout Florida; d. Allowing BCBS-FL to supra-competitively raise the premiums charged to consumers by artificially inflated, unreasonable, and/or supra-competitive amounts; e. Depriving consumers of health insurance of the benefits of free and open competition. 682. The procompetitive benefits, if any, of the market allocation agreements alleged above do not outweigh the anticompetitive effects of those agreements. 683. The market allocation agreements in the License Agreements, Membership Standards, and Guidelines unreasonably restrain trade in violation of Fla. Stat. § 542.18. 684. As a direct and proximate result of the Individual Blue Plans' continuing violations of Fla. Stat. § 542.18 described in this Complaint, Plaintiff and other members of the Florida Class have suffered injury and damages in an amount to be proven at trial. These damages consist of having paid artificially inflated, unreasonable, and/or supra-competitive and higher health insurance premiums to BCBS-FL than they would have paid with increased competition and but for the violations of Fla. Stat. § 542.18. 685. Under Fla. Stat. § 542.22, Plaintiff and the Florida Class seek money damages from BCBS-FL and BCBSA for their violations of Fla. Stat. § 542.18. Count Twenty-Two (Willful Acquisition and Maintenance of a Monopoly in the Relevant Market for Private Health Insurance in Violation of Fla. Stat. § 542.19) 686. Plaintiff repeats and realleges the allegations in all Paragraphs above. 178 10 687. BCBS-FL has monopoly power in the individual and small group full-service commercial health insurance market in Florida. This monopoly power is evidenced by, among other things, BCBS-FL's high market share of the commercial health insurance market, including its increasing market share even as it has raised premiums. 688. BCBS-FL has abused and continues to abuse its monopoly power to maintain and enhance its market dominance by unreasonably restraining trade, thus artificially inflating the premiums it charges to consumers. 689. BCBS-FL's conduct constitutes unlawful monopolization and unlawful anti- competitive conduct in the relevant markets in violation of Fla. Stat. § 542.19, and such violation and the effects thereof are continuing and will continue unless injunctive relief is granted. 690. As a direct and proximate result of the Individual Blue Plans' continuing violations of Fla. Stat. § 542.19 described in this Complaint, Plaintiff and other members of the Florida Class have suffered injury and damages in an amount to be proven at trial. These damages consist of having paid artificially inflated, unreasonable, and/or supra-competitive and higher health insurance premiums to BCBS-FL than they would have paid but for the violations of Fla. Stat. § 542.19. 691. Under Fla. Stat. § 542.22, Plaintiff and the Florida Class seek money damages from BCBS-FL for its violations of Fla. Stat. § 542.19. Count Twenty-Three (Willful Attempted Monopolization in the Relevant Market for Private Health Insurance in Violation of Fla. Stat. § 542.19) 692. Plaintiff repeats and realleges the allegations in all Paragraphs above. 693. BCBS-FL has acted with the specific intent to monopolize the relevant markets. 179 10 694. There was and is a dangerous possibility that BCBS-FL will succeed in its attempt to monopolize the relevant markets because BCBS-FL controls a large percentage of those markets already, and further success by BCBS-FL in excluding competitors from those markets will confer a monopoly on BCBS-FL in violation of Fla. Stat. § 542.19. 695. BCBS-FL's attempted monopolization of the relevant markets has harmed competition in those markets and has caused injury to Plaintiff and the Florida Class. Premiums charged by BCBS-FL have been higher than they would have been in a competitive market. Plaintiff and the Florida Class have been damaged as the result of BCBS-FL's attempted monopolization of the relevant markets. 180 10 HAWAI'I (Plaintiffs Lawrence W. Cohn, AAL, ALC and Saccoccio & Lopez and the Hawai'i Class Against Defendants BCBS-HI and BCBSA) Count Twenty-Four (Contract, Combination, or Conspiracy in Restraint of Trade in Violation of Sherman Act, Section 1) 696. Plaintiffs repeat and reallege the allegations in all Paragraphs above. 697. The License Agreements, Membership Standards, and Guidelines agreed to by BCBS-HI and BCBSA represent horizontal agreements entered into between BCBS-HI and the thirty-seven other member plans of BCBSA, all of whom are competitors or potential competitors in the market for commercial health insurance. 698. Each of the License Agreements, Membership Standards, and Guidelines entered into between BCBSA and BCBS-HI represents a contract, combination and/or conspiracy within the meaning of Section 1 of the Sherman Act. 699. Through the License Agreements, Membership Standards, and Guidelines, BCBSA and BCBS-HI have agreed to divide and allocate the geographic markets for the sale of commercial health insurance into a series of exclusive areas for each of the thirty-eight BCBSA members. By so doing, the BCBSA members (including BCBS-HI) have conspired to restrain trade in violation of Section 1 of the Sherman Act. These market allocation agreements are per se illegal under Section 1 of the Sherman Act. 700. The market allocation agreements entered into between BCBS-HI and the thirty- seven other BCBSA member plans (executed through the BCBSA License Agreements and related Membership Standards and Guidelines) are anticompetitive. 181 10 701. BCBS-HI has market power in the sale of full-service commercial health insurance to individuals and small groups in each relevant geographic and product market alleged herein. 702. Each of the challenged agreements has had substantial and unreasonable anticompetitive effects in the relevant markets, including but not limited to: a. Reducing the number of health insurance companies competing with BCBS-HI throughout Hawai'i; b. Unreasonably limiting the entry of competitor health insurance companies into Hawai'i; c. Allowing BCBS-HI to maintain and enlarge its market power throughout Hawai'i; d. Allowing BCBS-HI to supra-competitively raise the premiums charged to consumers by artificially inflated, unreasonable, and/or supra-competitive amounts; e. Depriving consumers of health insurance of the benefits of free and open competition. 703. The procompetitive benefits, if any, of the market allocation agreements alleged above do not outweigh the anticompetitive effects of those agreements. 704. The market allocation agreements in the License Agreements, Membership Standards, and Guidelines unreasonably restrain trade in violation of Section 1 of the Sherman Act. 705. As a direct and proximate result of the Individual Blue Plans' continuing violations of Section 1 of the Sherman Act described in this Complaint, Plaintiffs and other members of the Hawai'i Class have suffered injury and damages in an amount to be proven at 182 10 trial. These damages consist of having paid artificially inflated, unreasonable, and/or supra- competitive and higher health insurance premiums to BCBS-HI than they would have paid with increased competition and but for the Sherman Act violations. 706. Plaintiffs and the Hawai'i Class seek money damages from BCBS-HI and BCBSA for their violations of Section 1 of the Sherman Act. Count Twenty-Five (Willful Acquisition and Maintenance of a Monopoly in the Relevant Market for Private Health Insurance in Violation of Sherman Act, Section 2) 707. Plaintiffs repeat and reallege the allegations in all Paragraphs above. 708. BCBS-HI has monopoly power in the individual and small group full-service commercial health insurance market in Hawai'i. This monopoly power is evidenced by, among other things, BCBS-HI's high market share of the commercial health insurance market, including its increasing market share even as it has raised premiums. 709. BCBS-HI has abused and continues to abuse its monopoly power to maintain and enhance its market dominance by unreasonably restraining trade, thus artificially inflating the premiums it charges to consumers. 710. BCBS-HI's conduct constitutes unlawful monopolization and unlawful anti- competitive conduct in the relevant markets in violation of Section 2 of the Sherman Act, and such violation and the effects thereof are continuing and will continue unless injunctive relief is granted. 711. As a direct and proximate result of the Individual Blue Plans' continuing violations of Section 2 of the Sherman Act described in this Complaint, Plaintiffs and other members of the Hawai'i Class have suffered injury and damages in an amount to be proven at trial. These damages consist of having paid artificially inflated, unreasonable, and/or supra- 183 10 competitive and higher health insurance premiums to BCBS-HI than they would have paid but for the Sherman Act violations. 712. Plaintiffs and the Hawai'i Class seek money damages from BCBS-HI for its violations of Section 2 of the Sherman Act. Count Twenty-Six (Willful Attempted Monopolization in the Relevant Market for Private Health Insurance in Violation of Sherman Act, Section 2) 713. Plaintiffs repeat and reallege the allegations in all Paragraphs above. 714. BCBS-HI has acted with the specific intent to monopolize the relevant markets. 715. There was and is a dangerous possibility that BCBS-HI will succeed in its attempt to monopolize the relevant markets because BCBS-HI controls a large percentage of those markets already, and further success by BCBS-HI in excluding competitors from those markets will confer a monopoly on BCBS-HI in violation of Section 2 of the Sherman Act. 716. BCBS-HI's attempted monopolization of the relevant markets has harmed competition in those markets and has caused injury to Plaintiffs and the Hawai'i Class. Premiums charged by BCBS-HI have been higher than they would have been in a competitive market. 717. Plaintiffs and the HI Class have been damaged as the result of BCBS-HI's attempted monopolization of the relevant markets. Count Twenty-Seven (Contract, Combination, or Conspiracy in Restraint of Trade in Violation of H.R.S. §§ 480-4 and 480-2) 718. Plaintiffs repeat and reallege the allegations in all Paragraphs above. 719. The License Agreements, Membership Standards, and Guidelines agreed to by BCBS-HI and BCBSA represent horizontal agreements entered into between BCBS-HI and the 184 10 thirty-seven other member plans of BCBSA, all of whom are competitors or potential competitors in the market for commercial health insurance. 720. Each of the License Agreements, Membership Standards, and Guidelines entered into between BCBSA and BCBS-HI represents a contract, combination and/or conspiracy within the meaning of H.R.S. § 480-4 and an unfair method of competition within the meaning of H.R.S. § 480-2. 721. Through the License Agreements, Membership Standards, and Guidelines, BCBSA and BCBS-HI have agreed to divide and allocate the geographic markets for the sale of commercial health insurance into a series of exclusive areas for each of the thirty-eight BCBSA members. By so doing, the BCBSA members (including BCBS-HI) have conspired to restrain trade in violation of H.R.S. § 480-4, and employed an unfair method of competition in violation of H.R.S. § 480-2. These market allocation agreements are per se illegal under H.R.S. §§ 480-2 and 480-4. 722. The market allocation agreements entered into between BCBS-HI and the thirty- seven other BCBSA member plans (executed through the BCBSA License Agreements and related Membership Standards and Guidelines) are anticompetitive. 723. BCBS-HI has market power in the sale of full-service commercial health insurance to individuals and small groups in each relevant geographic and product market alleged herein. 724. Each of the challenged agreements has had substantial and unreasonable anticompetitive effects in the relevant markets, including but not limited to: a. Reducing the number of health insurance companies competing with BCBS-HI throughout Hawai'i; 185 10 b. Unreasonably limiting the entry of competitor health insurance companies into Hawai'i; c. Allowing BCBS-HI to maintain and enlarge its market power throughout Hawai'i; d. Allowing BCBS-HI to supra-competitively raise the premiums charged to consumers by artificially inflated, unreasonable, and/or supra-competitive amounts; e. Depriving consumers of health insurance of the benefits of free and open competition. 725. The procompetitive benefits, if any, of the market allocation agreements alleged above do not outweigh the anticompetitive effects of those agreements. 726. The market allocation agreements in the License Agreements, Membership Standards, and Guidelines unreasonably restrain trade in violation of H.R.S. §§ 480-2 and 480-4. 727. As a direct and proximate result of the Individual Blue Plans' continuing violations of H.R.S. §§ 480-2 and 480-4 described in this Complaint, Plaintiffs and other members of the Hawai'i Class have suffered injury and damages in an amount to be proven at trial. These damages consist of having paid artificially inflated, unreasonable, and/or supra- competitive and higher health insurance premiums to BCBS-HI than they would have paid with increased competition and but for the violations of H.R.S. §§ 480-2 and 480-4. 728. Plaintiffs and the Hawai'i Class seek money damages under H.R.S. 480-13 from BCBS-HI and BCBSA for their violations of H.R.S. §§ 480-4 and 480-2. Count Twenty-Eight (Willful Acquisition and Maintenance of a Monopoly in the Relevant Market for Private Health Insurance in Violation of H.R.S. § 480-9) 729. Plaintiffs repeat and reallege the allegations in all Paragraphs above. 186 10 730. BCBS-HI has monopoly power in the individual and small group full-service commercial health insurance market in Hawai'i. This monopoly power is evidenced by, among other things, BCBS-HI's high market share of the commercial health insurance market, including its increasing market share even as it has raised premiums. 731. BCBS-HI has abused and continues to abuse its monopoly power to maintain and enhance its market dominance by unreasonably restraining trade, thus artificially inflating the premiums it charges to consumers. 732. BCBS-HI's conduct constitutes unlawful monopolization and unlawful anti- competitive conduct in the relevant markets in violation of H.R.S. § 480-9, and such violation and the effects thereof are continuing and will continue unless injunctive relief is granted. 733. As a direct and proximate result of the Individual Blue Plans' continuing violations of H.R.S. § 480-9 described in this Complaint, Plaintiffs and other members of the Hawai'i Class have suffered injury and damages in an amount to be proven at trial. These damages consist of having paid artificially inflated, unreasonable, and/or supra-competitive and higher health insurance premiums to BCBS-HI than they would have paid but for the violations of H.R.S. § 480-9. 734. Plaintiffs and the Hawai'i Class seek money damages under H.R.S. 480-13 from BCBS-HI for its violations of H.R.S. § 480-9. Count Twenty-Nine (Willful Attempted Monopolization in the Relevant Market for Private Health Insurance in Violation of H.R.S. § 480-9) 735. Plaintiffs repeat and reallege the allegations in all Paragraphs above. 736. BCBS-HI has acted with the specific intent to monopolize the relevant markets. 187 10 737. There was and is a dangerous possibility that BCBS-HI will succeed in its attempt to monopolize the relevant markets because BCBS-HI controls a large percentage of those markets already, and further success by BCBS-HI in excluding competitors from those markets will confer a monopoly on BCBS-HI in violation of H.R.S. § 480-9. 738. BCBS-HI's attempted monopolization of the relevant markets has harmed competition in those markets and has caused injury to Plaintiffs and the Hawai'i Class. Premiums charged by BCBS-HI have been higher than they would have been in a competitive market. 739. Plaintiffs and the Hawai'i Class have been damaged as the result of BCBS-HI's attempted monopolization of the relevant markets. Count Thirty (Unjust Enrichment) 740. Plaintiffs repeat and reallege the allegations in all Paragraphs above. 741. BCBS-HI has benefitted from its unlawful acts through Plaintiffs' and the Hawai'i Class's overpayments for health insurance premiums. 742. It would be inequitable for BCBS-HI to be permitted to retain the benefit of these supra-competitive premiums that were conferred by Plaintiffs and the Hawai'i Class and retained by BCBS-HI. 743. In equity, BCBS-HI should not be allowed to retain the economic benefit derived from said improper conduct and should be ordered to pay restitution and pre-judgment interest to Plaintiffs and the Hawai'i Class. 188 10 ILLINOIS (Plaintiffs Monika Bhuta, Michael E. Stark, and Falcon Picture Group LLC and the Illinois Class Against Defendants BCBS-IL and BCBSA) Count Thirty-One (Contract, Combination, or Conspiracy in Restraint of Trade in Violation of Sherman Act, Section 1) 744. Plaintiffs repeat and reallege the allegations in all Paragraphs above. 745. The License Agreements, Membership Standards, and Guidelines agreed to by BCBS-IL and BCBSA represent horizontal agreements entered into between BCBS-IL and the thirty-seven other members of BCBSA, all of whom are competitors or potential competitors in the market for commercial health insurance. 746. Each of the License Agreements, Membership Standards, and Guidelines entered into between BCBSA and BCBS-IL represents a contract, combination and/or conspiracy within the meaning of Section 1 of the Sherman Act. 747. Through the License Agreements, Membership Standards, and Guidelines, BCBSA and BCBS-IL have agreed to divide and allocate the geographic markets for the sale of commercial health insurance into a series of exclusive areas for each of the thirty-eight BCBSA members. By so doing, the BCBSA members (including BCBS-IL) have conspired to restrain trade in violation of Section 1 of the Sherman Act. These market allocation agreements are per se illegal under Section 1 of the Sherman Act. 748. The market allocation agreements entered into among BCBS-IL and the thirty- seven other BCBSA members (executed through the BCBSA License Agreements and related Membership Standards and Guidelines) are anticompetitive. 189 10 749. BCBS-IL has market power in the sale of full-service commercial health insurance to individuals and small groups in each relevant geographic and product market alleged herein. 750. Each of the challenged agreements has had substantial and unreasonable anticompetitive effects in the relevant markets, including but not limited to: a. Reducing the number of health insurance companies competing with BCBS- IL throughout Illinois; b. Unreasonably limiting the entry of competitor health insurance companies into Illinois; c. Allowing BCBS-IL to maintain and enlarge its market power throughout Illinois; d. Allowing BCBS-IL to supra-competitively raise the premiums charged to consumers by artificially inflated, unreasonable, and/or supra-competitive amounts; and e. Depriving Class members and other consumers of health insurance of the benefits of free and open competition. 751. The procompetitive benefits, if any, of the market allocation agreements alleged above do not outweigh the anticompetitive effects of those agreements. 752. The market allocation agreements in the License Agreements, Membership Standards, and Guidelines unreasonably restrain trade in violation of Section 1 of the Sherman Act. 753. As a direct and proximate result of the Individual Blue Plans' continuing violations of Section 1 of the Sherman Act described in this Complaint, Plaintiffs and other 190 10 members of the Illinois Class have suffered injury and damages in an amount to be proven at trial and are entitled to injunctive relief. These damages consist of having paid artificially inflated, unreasonable, and/or supra-competitive and higher health insurance premiums to BCBS-IL than they would have paid with increased competition and but for the Sherman Act violations. 754. Plaintiffs and the Illinois Class seek money damages from BCBS-IL and BCBSA for their violations of Section 1 of the Sherman Act. Count Thirty-Two (Willful Acquisition and Maintenance of a Monopoly in the Relevant Market for Private Health Insurance in Violation of Sherman Act, Section 2) 755. Plaintiffs repeat and reallege the allegations in all Paragraphs above. 756. BCBS-IL has monopoly power in the individual and small group full-service commercial health insurance market in Illinois. This monopoly power is evidenced by, among other things, BCBS-IL's high market share of the commercial health insurance market, including its increasing market share even as it has raised premiums. 757. BCBS-IL has abused and continues to abuse its monopoly power to maintain and enhance its market dominance by unreasonably restraining trade, thus artificially inflating the premiums it charges to consumers. 758. BCBS-IL's conduct constitutes unlawful monopolization and unlawful anti- competitive conduct in the relevant markets in violation of Section 2 of the Sherman Act, and such violation and the effects thereof are continuing and will continue unless injunctive relief is granted. 759. As a direct and proximate result of the Individual Blue Plans' continuing violations of Section 2 of the Sherman Act described in this Complaint, Plaintiffs and other members of the Illinois Class have suffered injury and damages in an amount to be proven at 191 10 trial. These damages consist of having paid artificially inflated, unreasonable, and/or supra- competitive and higher health insurance premiums to BCBS-IL than they would have paid but for the Sherman Act violations. 760. Plaintiffs and the Illinois Class seek money damages from BCBS-IL for its violations of Section 2 of the Sherman Act. Count Thirty-Three (Willful Attempted Monopolization in the Relevant Market for Private Health Insurance in Violation of Sherman Act, Section 2) 761. Plaintiffs repeat and reallege the allegations in all Paragraphs above. 762. BCBS-IL has acted with the specific intent to monopolize the relevant markets. 763. There was and is a dangerous possibility that BCBS-IL will succeed in its attempt to monopolize the relevant markets because BCBS-IL controls a large percentage of those markets already, and further success by BCBS-IL in excluding competitors from those markets will confer a monopoly on BCBS-IL in violation of Section 2 of the Sherman Act. 764. BCBS-IL's attempted monopolization of the relevant markets has harmed competition in those markets and has caused injury to Plaintiffs and the Illinois Class. Premiums charged by BCBS-IL have been higher than they would have been in a competitive market. 765. Plaintiffs and the Illinois Class have been damaged as the result of BCBS-IL's attempted monopolization of the relevant markets. Count Thirty-Four (Contract, Combination, or Conspiracy in Restraint of Trade in Violation of Illinois Antitrust Law 740 ILCS 10/3 et seq.) 766. Plaintiffs repeat and reallege the allegations in all Paragraphs above. 767. The License Agreements, Membership Standards, and Guidelines agreed to by BCBS-IL and BCBSA represent horizontal agreements entered into between BCBS-IL and the 192 10 thirty-seven other members of BCBSA, all of whom are competitors or potential competitors in the market for commercial health insurance. 768. Each of the License Agreements, Membership Standards, and Guidelines entered into between BCBSA and BCBS-IL represents a contract, combination and/or conspiracy within the meaning of 740 ILCS 10/3(1). 769. Through the License Agreements, Membership Standards, and Guidelines, BCBSA and BCBS-IL have agreed to divide and allocate the geographic markets for the sale of commercial health insurance into a series of exclusive areas for each of the thirty-eight BCBSA members. By so doing, the BCBSA members (including BCBS-IL) have conspired to restrain trade in violation of 740 ILCS 10/3(1)a, 740 ILCS 10/3(1)c, and 740 ILCS 10/3(2). These market allocation agreements are per se illegal under the aforesaid provisions. 770. The market allocation agreements entered into among BCBS-IL and the thirty- seven other BCBSA members (executed through the BCBSA License Agreements and related Membership Standards and Guidelines) are anticompetitive. 771. BCBS-IL has market power in the sale of full-service commercial health insurance to individuals and small groups in each relevant geographic and product market alleged herein. 772. Each of the challenged agreements has had substantial and unreasonable anticompetitive effects in the relevant markets, including but not limited to: a. Reducing the number of health insurance companies competing with BCBS- IL throughout Illinois; b. Unreasonably limiting the entry of competitor health insurance companies into Illinois; 193 10 c. Allowing BCBS-IL to maintain and enlarge its market power throughout Illinois; d. Allowing BCBS-IL to supra-competitively raise the premiums charged to consumers by artificially inflated, unreasonable, and/or supra-competitive amounts; and e. Depriving Class members and other consumers of health insurance of the benefits of free and open competition. 773. The procompetitive benefits, if any, of the market allocation agreements alleged above do not outweigh the anticompetitive effects of those agreements. 774. The market allocation agreements in the License Agreements, Membership Standards, and Guidelines unreasonably restrain trade in violation of 740 ILCS 10/3(1)a, 740 ILCS 10/3(1)c, and 740 ILCS 10/3(2). 775. As a direct and proximate result of the Individual Blue Plans' continuing violations of 740 ILCS 10/3(1)a, 740 ILCS 10/3(1)c, and 740 ILCS 10/3(2) described in this Complaint, Plaintiffs and other members of the Illinois Class have suffered injury and damages in an amount to be proven at trial and are entitled to injunctive relief. These damages consist of having paid artificially inflated, unreasonable, and/or supra-competitive and higher health insurance premiums to BCBS-IL than they would have paid with increased competition and but for the violations of 740 ILCS 10/3(1)a, 740 ILCS 10/3(1)c, and 740 ILCS 10/3(2). 776. Plaintiffs and the Illinois Class seek money damages from BCBS-IL and BCBSA for their violations of 740 ILCS 10/3 et seq. Count Thirty-Five (Willful Acquisition and Maintenance of a Monopoly in the Relevant Market for Private Health Insurance in Violation of 740 ILS 10/3(3)) 777. Plaintiffs repeat and reallege the allegations in all Paragraphs above. 194 10 778. BCBS-IL has monopoly power in the individual and small group full-service commercial health insurance market in Illinois. This monopoly power is evidenced by, among other things, BCBS-IL's high market share of the commercial health insurance market, including its increasing market share even as it has raised premiums. 779. BCBS-IL has abused and continues to abuse its monopoly power to maintain and enhance its market dominance by unreasonably restraining trade, thus artificially inflating the premiums it charges to consumers. 780. BCBS-IL's conduct constitutes unlawful monopolization and unlawful anti- competitive conduct in the relevant markets in violation of 740 ILS 10/3(3). 781. As a direct and proximate result of the Individual Blue Plans' continuing violations of 740 ILS 10/3(3) described in this Complaint, Plaintiffs and other members of the Illinois Class have suffered injury and damages in an amount to be proven at trial. These damages consist of having paid artificially inflated, unreasonable, and/or supra-competitive and higher health insurance premiums to BCBS-IL than they would have paid but for these violations. 782. Plaintiffs and the Illinois Class seek money damages from BCBS-IL for its violations of 740 ILS 10/3 et seq. Count Thirty-Six (Willful Attempted Monopolization in the Relevant Market for Private Health Insurance in Violation of 740 ILS 10/3(3)) 783. Plaintiffs repeat and reallege the allegations in all Paragraphs above. 784. BCBS-IL has acted with the specific intent to monopolize the relevant markets. 785. There was and is a dangerous possibility that BCBS-IL will succeed in its attempt to monopolize the relevant markets because BCBS-IL controls a large percentage of those 195 10 markets already, and further success by BCBS-IL in excluding competitors from those markets will confer a monopoly on BCBS-IL in violation of 740 ILS 10/3(3). 786. BCBS-IL's attempted monopolization of the relevant markets has harmed competition in those markets and has caused injury to Plaintiffs and the Illinois Class. Premiums charged by BCBS-IL have been higher than they would have been in a competitive market. 787. Plaintiffs and the Illinois Class have been damaged as the result of BCBS-IL's attempted monopolization of the relevant markets and seek treble damages. Count Thirty-Seven (Unjust Enrichment) 788. Plaintiffs repeat and reallege the allegations in all Paragraphs above. 789. BCBS-IL has benefitted from its unlawful acts through Plaintiffs' and the Illinois Class's overpayments for health insurance premiums to BCBS-IL. BCBS-IL has unjustly enriched itself at the expense of the Plaintiffs and the Illinois Class. 790. It would be inequitable and in violation of principles of justice and good conscience for BCBS-IL to be permitted to retain the benefit of these supra-competitive premiums that were conferred by Plaintiffs and the Illinois Class and unjustly retained by BCBS- IL. 791. By reason of its unlawful conduct, BCBS-IL must make restitution to Plaintiffs and the Illinois Class. Further, any actions which might have been taken by Plaintiffs to pursue administrative remedies would have been futile. 792. In equity, BCBS-IL should not be allowed to retain the economic benefit derived from said improper conduct and should be ordered to pay restitution and pre-judgment interest to Plaintiffs and the Illinois Class. 196 10 LOUISIANA (Plaintiffs Renee E. Allie and Galactic Funk Touring, Inc. and the Louisiana Class Against Defendants BCBS-LA and BCBSA) Count Thirty-Eight (Contract, Combination, or Conspiracy in Restraint of Trade in Violation of Sherman Act, Section 1) 793. Plaintiffs repeat and reallege the allegations in all Paragraphs above. 794. The License Agreements, Membership Standards, and Guidelines agreed to by BCBS-LA represent horizontal agreements entered into between BCBS-LA and the thirty-seven other member plans of BCBSA, all of whom are competitors or potential competitors in the market for commercial health insurance. 795. Each of the License Agreements, Membership Standards, and Guidelines entered into between BCBSA and BCBS-LA represents a contract, combination, and/or conspiracy within the meaning of Section 1 of the Sherman Act. 796. Through the License Agreements, Membership Standards, and Guidelines, BCBSA and BCBS-LA have agreed to divide and allocate the geographic markets for the sale of commercial health insurance into a series of exclusive areas for each of the thirty-eight BCBSA members. By so doing, the BCBSA members (including BCBS-LA) have conspired to restrain trade in violation of Section 1 of the Sherman Act. These market allocation agreements are per se illegal under Section 1 of the Sherman Act. 797. The market allocation agreements entered into between BCBS-LA and the thirty- seven other BCBSA member plans (executed through the BCBSA License Agreements and related Membership Standards and Guidelines) are anticompetitive. 197 10 798. BCBS-LA has market power in the sale of full-service commercial health insurance to individuals and small groups in each relevant geographic and product market alleged herein. 799. Each of the challenged agreements has had substantial and unreasonable anticompetitive effects in the relevant markets, including but not limited to: a. Reducing the number of health insurance companies competing with BCBS- LA throughout Louisiana; b. Unreasonably limiting the entry of competitor health insurance companies into Louisiana; c. Allowing BCBS-LA to maintain and enlarge its market power throughout Louisiana; d. Allowing BCBS-LA to supra-competitively raise the premiums charged to consumers by artificially inflated, unreasonable, and/or supra-competitive amounts; e. Depriving consumers of health insurance of the benefits of free and open competition. 800. The procompetitive benefits, if any, of the market allocation agreements alleged above do not outweigh the anticompetitive effects of those agreements. 801. The market allocation agreements in the License Agreements, Membership Standards, and Guidelines unreasonably restrain trade in violation of Section 1 of the Sherman Act. 802. As a direct and proximate result of the Individual Blue Plans' continuing violations of Section 1 of the Sherman Act described in this Complaint, Plaintiffs and other 198 10 members of the Louisiana Class have suffered injury and damages in an amount to be proven at trial. These damages consist of having paid artificially inflated, unreasonable, and/or supra- competitive and higher health insurance premiums to BCBS-LA than they would have paid with increased competition and but for the Sherman Act violations. 803. Plaintiffs and the Louisiana Class seek money damages from BCBS-LA for its violation of Section 1 of the Sherman Act. Count Thirty-Nine (Willful Acquisition and Maintenance of a Monopoly in the Relevant Market for Private Health Care Insurance in Violation of Sherman Act, Section 2) 804. Plaintiffs repeat and reallege the allegations in all Paragraphs above. 805. BCBS-LA has monopoly power in the individual and small group full-service commercial health insurance market in Louisiana. This monopoly power is evidenced by, among other things: a. BCBS-LA's ability to enter into agreements with providers at below-market reimbursement rates, which evidences BCBS-LA's ability to control prices and exclude competitors; b. BCBS-LA's high market share of the commercial health insurance market, including its increasing market share even as it has raised premiums. 806. BCBS-LA has abused and continues to abuse its monopoly power to maintain and enhance its market dominance by unreasonably restraining trade, thus artificially inflating the premiums it charges to consumers. 807. BCBS-LA's conduct constitutes unlawful monopolization and unlawful anti- competitive conduct in the relevant markets in violation of Section 2 of the Sherman Act, and 199 10 such violation and the effects thereof are continuing and will continue unless injunctive relief is granted. 808. As a direct and proximate result of the Individual Blue Plans' continuing violations of Section 2 of the Sherman Act described in this Complaint, Plaintiffs and other members of the Louisiana Class have suffered injury and damages in an amount to be proven at trial. These damages consist of having paid artificially inflated, unreasonable, and/or supra- competitive and higher health insurance premiums to BCBS-LA than they would have paid but for the Sherman Act violations. 809. Plaintiffs and the Louisiana Class seek money damages from BCBS-LA for its violations of Section 2 of the Sherman Act. Count Forty (Willful Attempted Monopolization in the Relevant Market for Private Health Insurance in Violation of Sherman Act, Section 2) 810. Plaintiffs repeat and reallege the allegations in all Paragraphs above. 811. BCBS-LA has acted with the specific intent to monopolize the relevant markets. 812. There was and is a dangerous possibility that BCBS-LA will succeed in its attempt to monopolize the relevant markets because BCBS-LA already controls a large percentage of those markets. Further success by BCBS-LA in excluding competitors from those markets will confer a monopoly on BCBS-LA in violation of Section 2 of the Sherman Act. 813. BCBS-LA's attempted monopolization of the relevant markets has harmed competition in those markets and has caused injury to Plaintiffs and the Louisiana Class. Premiums charged by BCBS-LA have been higher than they would have been in a competitive market. 200 10 814. Plaintiffs and the Louisiana Class have been damaged as the result of BCBS-LA's attempted monopolization of the relevant markets. Count Forty-One (Contract, Combination, or Conspiracy in Restraint of Trade in violation of La.R.S. 51:122) 815. Plaintiffs repeat and reallege the allegations in all Paragraphs above. 816. The License Agreements, Membership Standards, and Guidelines agreed to by BCBS-LA represent horizontal agreements entered into between BCBS-LA and the thirty-seven other member plans of BCBSA, all of whom are competitors or potential competitors in the market for commercial health insurance. 817. Each of the License Agreements, Membership Standards, and Guidelines entered into between BCBSA and BCBS-LA represents a contract, combination and/or conspiracy within the meaning of La.R.S. 51:122. 818. Through the License Agreements, Membership Standards, and Guidelines, BCBSA and BCBS-LA have agreed to divide and allocate the geographic markets for the sale of commercial health insurance into a series of exclusive areas for each of the thirty-eight BCBSA members. By so doing, the BCBSA members (including BCBS-LA) have conspired to restrain trade in violation of La.R.S. 51:122. These market allocation agreements are per se illegal under La.R.S. 51:122. 819. The market allocation agreements entered into between BCBS-LA and the thirty- seven other BCBSA member plans (executed through the BCBSA License Agreements and related Membership Standards and Guidelines) are anticompetitive. 820. BCBS-LA has market power in the sale of full-service commercial health insurance to individuals and small groups in each relevant geographic and product market alleged herein. 201 10 821. Each of the challenged agreements has had substantial and unreasonable anticompetitive effects in the relevant markets, including but not limited to: a. Reducing the number of health insurance companies competing with BCBS- LA throughout Louisiana; b. Unreasonably limiting the entry of competitor health insurance companies into Louisiana; c. Allowing BCBS-LA to maintain and enlarge its market power throughout Louisiana; d. Allowing BCBS-LA to supra-competitively raise the premiums charged to consumers by artificially inflated, unreasonable, and/or supra-competitive amounts; e. Depriving consumers of health insurance of the benefits of free and open competition. 822. The procompetitive benefits, if any, of the market allocation agreements alleged above do not outweigh the anticompetitive effects of those agreements. 823. The market allocation agreements in the License Agreements, Membership Standards, and Guidelines unreasonably restrain trade in violation of La.R.S. 51:122. 824. As a direct and proximate result of the Individual Blue Plans' continuing violations of La.R.S. 51:122 described in this Complaint, plaintiffs and other members of the Louisiana Class have suffered injury and damages in an amount to be proven at trial. These damages consist of having paid artificially inflated, unreasonable, and/or supra-competitive and higher health insurance premiums to BCBS-LA than they would have paid with increased competition and but for the Louisiana Antitrust violations. 202 10 825. Plaintiffs and the Louisiana Class seek money damages from BCBS-LA for its violation of La.R.S. 51:122. Count Forty-Two (Willful Acquisition and Maintenance of a Monopoly in the Relevant Market for Private Health Care Insurance in Violation of La.R.S. 51:123) 826. Plaintiffs repeat and reallege the allegations in all Paragraphs above. 827. BCBS-LA has monopoly power in the commercial health insurance market in Louisiana. This monopoly power is evidenced by, among other things: a. BCBS-LA's ability to enter into agreements with providers at below-market reimbursement rates, which evidences BCBS-LA's ability to control prices and exclude competitors; b. BCBS-LA's high market share of the commercial health insurance market, including its increasing market share even as it has raised premiums. 828. BCBS-LA has abused and continues to abuse its monopoly power to maintain and enhance its market dominance by unreasonably restraining trade, thus artificially inflating premium prices charged to consumers. 829. BCBS-LA's conduct constitutes unlawful monopolization and unlawful anti- competitive conduct in the relevant markets in violation of La.R.S. 51:123. 830. As a direct and proximate result of the Individual Blue Plans' continuing violations of La.R.S. 51:123 described in this Complaint, plaintiffs and other members of the Louisiana Class have suffered injury and damages in an amount to be proven at trial. These damages consist of having paid artificially inflated, unreasonable, and/or supra-competitive and higher health insurance premiums to BCBS-LA than they would have paid but for the La.R.S. 51:123 violations. 203 10 831. Plaintiffs and the Louisiana Class seek money damages from BCBS-LA for its violations of La.R.S. 51:123. 204 10 MICHIGAN (Plaintiff John G. Thompson and the Michigan Class Against Defendants BCBS-MI and BCBSA) Count Forty-Three (Contract, Combination, or Conspiracy in Restraint of Trade in Violation of Sherman Act, Section 1) 832. Plaintiff repeats and realleges the allegations in all Paragraphs above. 833. The License Agreements, Membership Standards, and Guidelines agreed to by BCBS-MI and BCBSA represent horizontal agreements entered into between BCBS-MI and the thirty-seven other member plans of BCBSA, all of whom are competitors or potential competitors in the market for commercial health insurance. 834. Each of the License Agreements, Membership Standards, and Guidelines entered into between BCBSA and BCBS-MI represents a contract, combination and/or conspiracy within the meaning of Section 1 of the Sherman Act. 835. Through the License Agreements, Membership Standards, and Guidelines, BCBSA and BCBS-MI have agreed to divide and allocate the geographic markets for the sale of commercial health insurance into a series of exclusive areas for each of the thirty-eight BCBSA members. By so doing, the BCBSA members (including BCBS-MI) have conspired to restrain trade in violation of Section 1 of the Sherman Act. These market allocation agreements are per se illegal under Section 1 of the Sherman Act. 836. The market allocation agreements entered into between BCBS-MI and the thirty- seven other BCBSA member plans (executed through the BCBSA License Agreements and related Membership Standards and Guidelines) are anticompetitive. 205 10 837. BCBS-MI has market power in the sale of full-service commercial health insurance to individuals and small groups in each relevant geographic and product market alleged herein. 838. Each of the challenged agreements has had substantial and unreasonable anticompetitive effects in the relevant markets, including but not limited to: a. Reducing the number of health insurance companies competing with BCBS- MI throughout Michigan; b. Unreasonably limiting the entry of competitor health insurance companies into Michigan; c. Allowing BCBS-MI to maintain and enlarge its market power throughout Michigan; d. Allowing BCBS-MI to supra-competitively raise the premiums charged to consumers by artificially inflated, unreasonable, and/or supra-competitive amounts; and e. Depriving consumers of health insurance of the benefits of free and open competition. 839. The procompetitive benefits, if any, of the market allocation agreements alleged above do not outweigh the anticompetitive effects of those agreements. 840. The market allocation agreements in the License Agreements, Membership Standards, and Guidelines unreasonably restrain trade in violation of Section 1 of the Sherman Act. 841. As a direct and proximate result of the Individual Blue Plans' continuing violations of Section 1 of the Sherman Act described in this Complaint, Plaintiff and other 206 10 members of the Michigan Class have suffered injury and damages in an amount to be proven at trial. These damages consist of having paid artificially inflated, unreasonable, and/or supra- competitive and higher health insurance premiums to BCBS-MI than they would have paid with increased competition and but for the Sherman Act violations. 842. Plaintiff and the Michigan Class seek money damages from BCBS-MI and BCBSA for their violations of Section 1 of the Sherman Act. Count Forty-Four (Willful Acquisition and Maintenance of a Monopoly in the Relevant Market for Private Health Insurance in Violation of Sherman Act, Section 2) 843. Plaintiff repeats and realleges the allegations in all Paragraphs above. 844. BCBS-MI has monopoly power in the individual and small group full-service commercial health insurance market in Michigan. This monopoly power is evidenced by, among other things, BCBS-MI's high market share of the commercial health insurance market, including its increasing market share even as it has raised premiums. 845. BCBS-MI has abused and continues to abuse its monopoly power to maintain and enhance its market dominance by unreasonably restraining trade, thus artificially inflating the premiums it charges to consumers. 846. BCBS-MI's conduct constitutes unlawful monopolization and unlawful anti- competitive conduct in the relevant markets in violation of Section 2 of the Sherman Act, and such violation and the effects thereof are continuing and will continue unless injunctive relief is granted. 847. As a direct and proximate result of the Individual Blue Plans' continuing violations of Section 2 of the Sherman Act described in this Complaint, Plaintiff and other members of the Michigan Class have suffered injury and damages in an amount to be proven at 207 10 trial. These damages consist of having paid artificially inflated, unreasonable, and/or supra- competitive and higher health insurance premiums to BCBS-MI than they would have paid but for the Sherman Act violations. 848. Plaintiff and the Michigan Class seek money damages from BCBS-MI for its violations of Section 2 of the Sherman Act. Count Forty-Five (Willful Attempted Monopolization in the Relevant Market for Private Health Insurance in Violation of Sherman Act, Section 2) 849. Plaintiff repeats and realleges the allegations in all Paragraphs above. 850. BCBS-MI has acted with the specific intent to monopolize the relevant markets. 851. There was and is a dangerous possibility that BCBS-MI will succeed in its attempt to monopolize the relevant markets because BCBS-MI controls a large percentage of those markets already, and further success by BCBS-MI in excluding competitors from those markets will confer a monopoly on BCBS-MI in violation of Section 2 of the Sherman Act. 852. BCBS-MI's attempted monopolization of the relevant markets has harmed competition in those markets and has caused injury to Plaintiff and the Michigan Class. Premiums charged by BCBS-MI have been higher than they would have been in a competitive market. 853. Plaintiff and the Michigan Class have been damaged as the result of BCBS-MI's attempted monopolization of the relevant markets. 208 10 Count Forty-Six (Contract, Combination, or Conspiracy in Restraint of Trade in Violation of § 445.772 of the Michigan Antitrust Reform Act) 854. Plaintiff repeats and realleges the allegations in all Paragraphs above. 855. The License Agreements, Membership Standards, and Guidelines agreed to by BCBS-MI and BCBSA represent horizontal agreements entered into between BCBS-MI and the thirty-seven other member plans of BCBSA, all of whom are competitors or potential competitors in the market for commercial health insurance. 856. Each of the License Agreements, Membership Standards, and Guidelines entered into between BCBSA and BCBS-MI represents a contract, combination and/or conspiracy within the meaning of § 445.772 of the Michigan Antitrust Reform Act. 857. Through the License Agreements, Membership Standards, and Guidelines, BCBSA and BCBS-MI have agreed to divide and allocate the geographic markets for the sale of commercial health insurance into a series of exclusive areas for each of the thirty-eight BCBSA members. By so doing, the BCBSA members (including BCBS-MI) have conspired to restrain trade in violation of § 445.772 of the Michigan Antitrust Reform Act. These market allocation agreements are per se illegal under § 445.772 of the Michigan Antitrust Reform Act. 858. The market allocation agreements entered into between BCBS-MI and the thirty- seven other BCBSA member plans (executed through the BCBSA License Agreements and related Membership Standards and Guidelines) are anticompetitive. 859. BCBS-MI has market power in the sale of full-service commercial health insurance to individuals and small groups in each relevant geographic and product market alleged herein. 209 10 860. Each of the challenged agreements has had substantial and unreasonable anticompetitive effects in the relevant markets, including but not limited to: a. Reducing the number of health insurance companies competing with BCBS- MI throughout Michigan; b. Unreasonably limiting the entry of competitor health insurance companies into Michigan; c. Allowing BCBS-MI to maintain and enlarge its market power throughout Michigan; d. Allowing BCBS-MI to supra-competitively raise the premiums charged to consumers by artificially inflated, unreasonable, and/or supra-competitive amounts; and e. Depriving consumers of health insurance of the benefits of free and open competition. 861. The procompetitive benefits, if any, of the market allocation agreements alleged above do not outweigh the anticompetitive effects of those agreements. 862. The market allocation agreements in the License Agreements, Membership Standards, and Guidelines unreasonably restrain trade in violation of § 445.772 of the Michigan Antitrust Reform Act. 863. The market allocation agreements were not designed to, and did not, lower the cost of healthcare in Michigan. 864. The market allocation agreements were not approved by Michigan's Insurance Commissioner. 210 10 865. As a direct and proximate result of the Individual Blue Plans' continuing violations of § 445.772 of the Michigan Antitrust Reform Act described in this Complaint, Plaintiff and other members of the Michigan Class have suffered injury and damages in an amount to be proven at trial. These damages consist of having paid artificially inflated, unreasonable, and/or supra-competitive and higher health insurance premiums to BCBS-MI than they would have paid with increased competition and but for the violations § 445.772 of the Michigan Antitrust Reform Act. 866. Plaintiff and the Michigan Class seek money damages from BCBS-MI and BCBSA for their violations of § 445.772 of the Michigan Antitrust Reform Act. Count Forty-Seven (Willful Acquisition and Maintenance of a Monopoly in the Relevant Market for Private Health Insurance in Violation of § 445.773 of the Michigan Antitrust Reform Act) 867. Plaintiff repeats and realleges the allegations in all Paragraphs above. 868. BCBS-MI has monopoly power in the individual and small group full-service commercial health insurance market in Michigan. This monopoly power is evidenced by, among other things, BCBS-MI's high market share of the commercial health insurance market, including its increasing market share even as it has raised premiums. 869. BCBS-MI has abused and continues to abuse its monopoly power to maintain and enhance its market dominance by unreasonably restraining trade, thus artificially inflating the premiums it charges to consumers. 870. BCBS-MI's conduct constitutes unlawful monopolization and unlawful anti- competitive conduct in the relevant markets in violation of § 445.773 of the Michigan Antitrust Reform Act, and such violation and the effects thereof are continuing and will continue unless injunctive relief is granted. 211 10 871. The market allocation agreements were not designed to, and did not, lower the cost of healthcare in Michigan. 872. The market allocation agreements were not approved by Michigan's Insurance Commissioner. 873. As a direct and proximate result of the Individual Blue Plans' continuing violations of § 445.773 of the Michigan Antitrust Reform Act described in this Complaint, Plaintiff and other members of the Michigan Class have suffered injury and damages in an amount to be proven at trial. These damages consist of having paid artificially inflated, unreasonable, and/or supra-competitive and higher health insurance premiums to BCBS-MI than they would have paid but for the violations of § 445.773 of the Michigan Antitrust Reform Act. 874. Plaintiff and the Michigan Class seek money damages from BCBS-MI for its violations of § 445.773 of the Michigan Antitrust Reform Act. Count Forty-Eight (Willful Attempted Monopolization in the Relevant Market for Private Health Insurance in Violation of § 445.773 of the Michigan Antitrust Reform Act) 875. Plaintiff repeats and realleges the allegations in all Paragraphs above. 876. BCBS-MI has acted with the specific intent to monopolize the relevant markets. 877. There was and is a dangerous possibility that BCBS-MI will succeed in its attempt to monopolize the relevant markets because BCBS-MI controls a large percentage of those markets already, and further success by BCBS-MI in excluding competitors from those markets will confer a monopoly on BCBS-MI in violation of § 445.773 of the Michigan Antitrust Reform Act. 878. The market allocation agreements were not designed to, and did not, lower the cost of healthcare in Michigan. 212 10 879. The market allocation agreements were not approved by Michigan's Insurance Commissioner. 880. BCBS-MI's attempted monopolization of the relevant markets has harmed competition in those markets and has caused injury to Plaintiff and the Michigan Class. Premiums charged by BCBS-MI have been higher than they would have been in a competitive market. 881. Plaintiff and the Michigan Class have been damaged as the result of BCBS-MI's attempted monopolization of the relevant markets. Count Forty-Nine (Unjust Enrichment) 882. Plaintiff repeats and realleges the allegations in all Paragraphs above. 883. BCBS-MI has benefitted from its unlawful acts through the overpayments for health insurance premiums by Plaintiff and the Michigan Class. 884. It would be inequitable for BCBS-MI to be permitted to retain the benefit of these supra-competitive premiums that were conferred by Plaintiff and the Michigan Class and retained by BCBS-MI. 885. By reason of its unlawful conduct, BCBS-MI should make restitution to Plaintiff and the Michigan Class. 886. In equity, BCBS-MI should not be allowed to retain the economic benefit derived from said improper conduct and should be ordered to pay restitution and pre-judgment interest to Plaintiff and the Michigan Class. 213 10 MISSISSIPPI (Plaintiffs Harry M. McCumber and Gaston CPA Firm and the Mississippi Class Against Defendants BCBS-MS and BCBSA) Count Fifty (Contract, Combination, or Conspiracy in Restraint of Trade in Violation of Sherman Act, Section 1) 887. Plaintiffs repeat and reallege the allegations in all Paragraphs above. 888. The License Agreements, Membership Standards, and Guidelines agreed to by BCBS-MS and BCBSA represent horizontal agreements entered into between BCBS-MS and the 37 other member plans of BCBSA, all of whom are competitors or potential competitors in the market for commercial health insurance. 889. Each of the License Agreements, Membership Standards, and Guidelines entered into between BCBSA and BCBS-MS represents a contract, combination and/or conspiracy within the meaning of Section 1 of the Sherman Act. 890. Through the License Agreements, Membership Standards, and Guidelines, BCBSA and BCBS-MS have agreed to divide and allocate the geographic markets for the sale of commercial health insurance into a series of exclusive areas for each of the thirty-eight BCBSA members. By so doing, the BCBSA members (including BCBS-MS) have conspired to restrain trade in violation of Section 1 of the Sherman Act. These market allocation agreements are per se illegal under Section 1 of the Sherman Act. 891. The market allocation agreements entered into between BCBS-MS and the thirty- seven other BCBSA member plans (executed through the BCBSA License Agreements and related Membership Standards and Guidelines) are anticompetitive. 214 10 892. BCBS-MS has market power in the sale of full-service commercial health insurance to individuals and small groups in each relevant geographic and product market alleged herein. 893. Each of the challenged agreements has had substantial and unreasonable anticompetitive effects in the relevant markets, including but not limited to: a. Reducing the number of health insurance companies competing with BCBS- MS throughout Mississippi; b. Unreasonably limiting the entry of competitor health insurance companies into Mississippi; c. Allowing BCBS-MS to maintain and enlarge its market power throughout Mississippi; d. Allowing BCBS-MS to supra-competitively raise the premiums charged to consumers by artificially inflated, unreasonable, and/or supra-competitive amounts; e. Depriving consumers of health insurance of the benefits of free and open competition. 894. The procompetitive benefits, if any, of the market allocation agreements alleged above do not outweigh the anticompetitive effects of those agreements. 895. The market allocation agreements in the License Agreements, Membership Standards, and Guidelines unreasonably restrain trade in violation of Section 1 of the Sherman Act. 896. As a direct and proximate result of the Individual Blue Plans' continuing violations of Section 1 of the Sherman Act described in this Complaint, Plaintiffs and other 215 10 members of the Mississippi Class have suffered injury and damages in an amount to be proven at trial. These damages consist of having paid artificially inflated, unreasonable, and/or supra- competitive and higher health insurance premiums to BCBS-MS than they would have paid with increased competition and but for the Sherman Act violations. 897. Plaintiffs and the Mississippi Class seek money damages from BCBS-MS and BCBSA for their violations of Section 1 of the Sherman Act. Count Fifty-One (Willful Acquisition and Maintenance of a Monopoly in the Relevant Market for Private Health Insurance in Violation of Sherman Act, Section 2) 898. Plaintiffs repeat and reallege the allegations in all Paragraphs above. 899. BCBS-MS has monopoly power in the individual and small group full-service commercial health insurance market in Mississippi. This monopoly power is evidenced by, among other things, BCBS-MS's high market share of the commercial health insurance market, including its increasing market share even as it has raised premiums. 900. BCBS-MS has abused and continues to abuse its monopoly power to maintain and enhance its market dominance by unreasonably restraining trade, thus artificially inflating the premiums it charges to consumers. 901. BCBS-MS's conduct constitutes unlawful monopolization and unlawful anti- competitive conduct in the relevant markets in violation of Section 2 of the Sherman Act, and such violation and the effects thereof are continuing and will continue unless injunctive relief is granted. 902. As a direct and proximate result of the Individual Blue Plans' continuing violations of Section 2 of the Sherman Act described in this Complaint, Plaintiffs and other members of the Mississippi Class have suffered injury and damages in an amount to be proven at 216 10 trial. These damages consist of having paid artificially inflated, unreasonable, and/or supra- competitive and higher health insurance premiums to BCBS-MS than they would have paid but for the Sherman Act violations. 903. Plaintiffs and the Mississippi Class seek money damages from BCBS-MS for its violations of Section 2 of the Sherman Act. Count Fifty-Two (Willful Attempted Monopolization in the Relevant Market for Private Health Insurance in Violation of Sherman Act, Section 2) 904. Plaintiffs repeat and reallege the allegations in all Paragraphs above. 905. BCBS-MS has acted with the specific intent to monopolize the relevant markets. 906. There was and is a dangerous possibility that BCBS-MS will succeed in its attempt to monopolize the relevant markets because BCBS-MS controls a large percentage of those markets already, and further success by BCBS-MS in excluding competitors from those markets will confer a monopoly on BCBS-MS in violation of Section 2 of the Sherman Act. 907. BCBS-MS's attempted monopolization of the relevant markets has harmed competition in those markets and has caused injury to Plaintiffs and the Mississippi Class. Premiums charged by BCBS-MS have been higher than they would have been in a competitive market. 908. Plaintiffs and the Mississippi Class have been damaged as the result of BCBS- MS's attempted monopolization of the relevant markets. Count Fifty-Three (Contract, Combination, or Conspiracy in Restraint of Trade in Violation of the Mississippi Antitrust Act, Sec. 75-21-1, et seq.) 909. Plaintiffs repeat and reallege the allegations in all Paragraphs above. 217 10 910. The License Agreements, Membership Standards, and Guidelines agreed to by BCBS-MS and BCBSA represent horizontal agreements entered into between BCBS-MS and the 37 other member plans of BCBSA, all of whom are competitors or potential competitors in the market for commercial health insurance. 911. Each of the License Agreements, Membership Standards, and Guidelines entered into between BCBSA and BCBS-MS represents a contract, combination and/or conspiracy within the meaning of the Mississippi Antitrust Act, Sec. 75-21-1, et seq.. 912. Through the License Agreements, Membership Standards, and Guidelines, BCBSA and BCBS-MS have agreed to divide and allocate the geographic markets for the sale of commercial health insurance into a series of exclusive areas for each of the thirty-eight BCBSA members. By so doing, the BCBSA members (including BCBS-MS) have conspired to restrain trade in violation of the Mississippi Antitrust Act, Sec. 75-21-1, et seq. 913. The market allocation agreements entered into between BCBS-MS and the thirty- seven other BCBSA member plans (executed through the BCBSA License Agreements and related Membership Standards and Guidelines) are anticompetitive. 914. BCBS-MS has market power in the sale of full-service commercial health insurance to individuals and small groups in each relevant geographic and product market alleged herein. 915. Each of the challenged agreements has had substantial and unreasonable anticompetitive effects in the relevant markets, including but not limited to: a. Reducing the number of health insurance companies competing with BCBS- MS throughout Mississippi; 218 10 b. Unreasonably limiting the entry of competitor health insurance companies into Mississippi; c. Allowing BCBS-MS to maintain and enlarge its market power throughout Mississippi; d. Allowing BCBS-MS to supra-competitively raise the premiums charged to consumers by artificially inflated, unreasonable, and/or supra-competitive amounts; e. Depriving consumers of health insurance of the benefits of free and open competition. 916. The procompetitive benefits, if any, of the market allocation agreements alleged above do not outweigh the anticompetitive effects of those agreements. 917. The market allocation agreements in the License Agreements, Membership Standards, and Guidelines unreasonably restrain trade in violation of the Mississippi Antitrust Act, Sec. 75-21-1, et seq. 918. As a direct and proximate result of the Individual Blue Plans' continuing violations of the Mississippi Antitrust Act, Sec. 75-21-1, et seq. described in this Complaint, Plaintiffs and other members of the Mississippi Class have suffered injury and damages in an amount to be proven at trial. These damages consist of having paid artificially inflated, unreasonable, and/or supra-competitive and higher health insurance premiums to BCBS-MS than they would have paid with increased competition and but for the violations of the Mississippi Antitrust Act, Sec. 75-21-1, et seq. 919. Plaintiffs and the Mississippi Class seek money damages from BCBS-MS and BCBSA for their violations of the Mississippi Antitrust Act, Sec. 75-21-1, et seq. 219 10 920. BCBS-MS's illegal conduct has substantially affected Mississippi commerce and caused injury to consumers in Mississippi. Specifically, BCBS-MS's understandings, contracts, agreements, trusts, combinations, or conspiracies substantially affected Mississippi commerce as follows: a. Substantial Effects on Mississippi Trade or Commerce: BCBS-MS's conduct has been far-reaching and has substantially affected Mississippi commerce. BCBS-MS health insurance products were purchased by many thousands of enrollees in Mississippi, in all segments of society. b. Substantial Monetary Effects on Mississippi Trade or Commerce: BCBS- MS's conduct is ongoing, and over the Class Period, BCBS-MS collected millions of dollars in health insurance premiums in Mississippi c. Substantially Harmful Effect on the Integrity of the Mississippi Market: The Mississippi market is vulnerable and can be manipulated by conspirators either from outside Mississippi, inside Mississippi, or both. Without enforcing Mississippi's antitrust law to its fullest extent, companies that break the law will remain unpunished, and they will remain able to prey upon Mississippi without consequence. The purpose of Mississippi's antitrust laws is to protect the state's trade and commerce affected by anticompetitive conduct. BCBS-MS had shattered this very purpose by its illegal victimization of the market. d. Length of Substantial Effect on Mississippi Commerce: Some arrangements, contracts, agreements, combinations, or conspiracies are short-lived. The conspiracy in this case has lasted for several years and is ongoing, providing 220 10 BCBS-MS with illegal profits and permitting BCBS-MS to continue victimizing consumers and substantially affect Mississippi commerce. Count Fifty-Four (Unjust Enrichment) 921. Plaintiffs repeat and reallege the allegations in all Paragraphs above. 922. BCBS-MS has benefitted from its unlawful acts through the overpayments for health insurance premiums by Plaintiffs and the Mississippi Class. 923. It would be inequitable for BCBS-MS to be permitted to retain the benefit of these supra-competitive premiums that were conferred by Plaintiffs and the Mississippi Class and retained by BCBS-MS. 924. By reason of its unlawful conduct, BCBS-MS should make restitution to Plaintiffs and the Mississippi Class. To the extent Plaintiffs are required to have exhausted administrative remedies before bringing an unjust enrichment claim, exhaustion of any such remedies is not required in this instance because: (a) the issues are of the type that would be appropriate for judicial determination, and (b) applying the doctrine here would result in substantial financial hardship, inequality, and economic inefficiency and would violate public policy. Further, any action that might have been taken by Plaintiffs to pursue administrative remedies would have been futile. 925. In equity, BCBS-MS should not be allowed to retain the economic benefit derived from said improper conduct and should be ordered to pay restitution and pre-judgment interest to Plaintiffs and the Mississippi Class. 221 10 MISSOURI (Plaintiff Jeffrey S. Garner and the Missouri Class Against Defendants BCBS-MO, BCBS-KC, and BCBSA) Count Fifty-Five (Contract, Combination, or Conspiracy in Restraint of Trade in Violation of Sherman Act, Section 1) 926. Plaintiff repeats and realleges the allegations in all Paragraphs above. 927. The License Agreements, Membership Standards, and Guidelines agreed to by BCBS-MO and BCBSA and BCBSA and BCBS-KC represent horizontal agreements entered into between BCBS-MO, BCBS-KC, and the 36 other member plans of BCBSA, all of whom are competitors or potential competitors in the market for commercial health insurance. 928. Each of the License Agreements, Membership Standards, and Guidelines entered into between BCBSA and BCBS-MO and BCBSA and BCBS-KC represents a contract, combination and/or conspiracy within the meaning of Section 1 of the Sherman Act. 929. Through the License Agreements, Membership Standards, and Guidelines, BCBSA and BCBS-MO and BCBSA and BCBS-KC have agreed to divide and allocate the geographic markets for the sale of commercial health insurance into a series of exclusive areas for each of the thirty-eight BCBSA members. By so doing, the BCBSA members (including BCBS-MO and BCBS-KC) have conspired to restrain trade in violation of Section 1 of the Sherman Act. These market allocation agreements are per se illegal under Section 1 of the Sherman Act. 930. The market allocation agreements entered into between BCBS-MO, BCBS-KC, and the thirty-six other BCBSA member plans (executed through the BCBSA License Agreements and related Membership Standards and Guidelines) are anticompetitive. 222 10 931. BCBS-MO and BCBS-KC have market power in the sale of full-service commercial health insurance to individuals and small groups in each relevant geographic and product market alleged herein. 932. Each of the challenged agreements has had substantial and unreasonable anticompetitive effects in the relevant markets, including but not limited to: a. Reducing the number of health insurance companies competing with BCBS- MO and BCBS-KC throughout Missouri; b. Unreasonably limiting the entry of competitor health insurance companies into Missouri; c. Allowing BCBS-MO and BCBS-KC to maintain and enlarge their market power throughout Missouri; d. Allowing BCBS-MO and BCBS-KC to supra-competitively raise the premiums charged to consumers by artificially inflated, unreasonable, and/or supra-competitive amounts; e. Depriving consumers of health insurance of the benefits of free and open competition. 933. The procompetitive benefits, if any, of the market allocation agreements alleged above do not outweigh the anticompetitive effects of those agreements. 934. The market allocation agreements in the License Agreements, Membership Standards, and Guidelines unreasonably restrain trade in violation of Section 1 of the Sherman Act. 935. As a direct and proximate result of the Individual Blue Plans' continuing violations of Section 1 of the Sherman Act described in this Complaint, Plaintiff and other 223 10 members of the Missouri Class have suffered injury and damages in an amount to be proven at trial. These damages consist of having paid artificially inflated, unreasonable, and/or supra- competitive and higher health insurance premiums to BCBS-MO and BCBS-KC than they would have paid with increased competition and but for the Sherman Act violations. 936. Plaintiff and the Missouri Class seek money damages from BCBS-MO, BCBS- KC, and BCBSA for their violations of Section 1 of the Sherman Act. Count Fifty-Six (Willful Acquisition and Maintenance of a Monopoly in the Relevant Market for Private Health Insurance in Violation of Sherman Act, Section 2) 937. Plaintiff repeats and realleges the allegations in all Paragraphs above. 938. BCBS-MO and BCBS-KC have monopoly power in the individual and small group full-service commercial health insurance market in Missouri. This monopoly power is evidenced by, among other things, BCBS-MO's and BCBS-KC's high market shares of the commercial health insurance market, including their increasing market share even as they have raised premiums. 939. BCBS-MO and BCBS-KC have abused and continue to abuse their monopoly power to maintain and enhance their market dominance by unreasonably restraining trade, thus artificially inflating the premiums they charge to consumers. 940. BCBS-MO's and BCBS-KC's conduct constitutes unlawful monopolization and unlawful anti-competitive conduct in the relevant markets in violation of Section 2 of the Sherman Act, and such violation and the effects thereof are continuing and will continue unless injunctive relief is granted. 941. As a direct and proximate result of the Individual Blue Plans' continuing violations of Section 2 of the Sherman Act described in this Complaint, Plaintiff and other 224 10 members of the Missouri Class have suffered injury and damages in an amount to be proven at trial. These damages consist of having paid artificially inflated, unreasonable, and/or supra- competitive and higher health insurance premiums to BCBS-MO and BCBS-KC than they would have paid but for the Sherman Act violations. 942. Plaintiff and the Missouri Class seek money damages from BCBS-MO and BCBS-KC for their violations of Section 2 of the Sherman Act. Count Fifty-Seven (Willful Attempted Monopolization in the Relevant Market for Private Health Insurance in Violation of Sherman Act, Section 2) 943. Plaintiff repeats and realleges the allegations in all Paragraphs above. 944. BCBS-MO and BCBS-KC have acted with the specific intent to monopolize the relevant markets. 945. There was and is a dangerous possibility that BCBS-MO and BCBS-KC will succeed in their attempts to monopolize the relevant markets because BCBS-MO and BCBS-KC control a large percentage of those markets already, and further success by BCBS-MO and BCBS-KC in excluding competitors from those markets will confer a monopoly on BCBS-MO and BCBS-KC in violation of Section 2 of the Sherman Act. 946. BCBS-MO's and BCBS-KC's attempted monopolizations of the relevant markets have harmed competition in those markets and have caused injury to Plaintiff and the Missouri Class. Premiums charged by BCBS-MO and BCBS-KC have been higher than they would have been in a competitive market. 947. Plaintiff and the Missouri Class have been damaged as the result of BCBS-MO's and BCBS-KC's attempted monopolizations of the relevant markets. 225 10 Count Fifty-Eight (Contract, Combination, or Conspiracy in Restraint of Trade in Violation of § 416.031.1 of the Missouri Antitrust Law) 948. Plaintiff repeats and realleges the allegations in all Paragraphs above. 949. The License Agreements, Membership Standards, and Guidelines agreed to by BCBS-MO and BCBSA and BCBS-KC and BCBSA represent horizontal agreements entered into between BCBS-MO, BCBS-KC, and the 36 other member plans of BCBSA, all of whom are competitors or potential competitors in the market for commercial health insurance. 950. Each of the License Agreements, Membership Standards, and Guidelines entered into between BCBSA and BCBS-MO and BCBSA and BCBS-KC represents a contract, combination and/or conspiracy within the meaning of § 416.031.1 of the Missouri Antitrust Law. 951. Through the License Agreements, Membership Standards, and Guidelines, BCBSA and BCBS-MO and BCBSA and BCBS-KC have agreed to divide and allocate the geographic markets for the sale of commercial health insurance into a series of exclusive areas for each of the thirty-eight BCBSA members. By so doing, the BCBSA members (including BCBS-MO and BCBS-KC) have conspired to restrain trade in violation of § 416.031.1 of the Missouri Antitrust Law. These market allocation agreements are per se illegal under § 416.031.1 of the Missouri Antitrust Law. 952. The market allocation agreements entered into between BCBS-MO, BCBS-KC, and the thirty-six other BCBSA member plans (executed through the BCBSA License Agreements and related Membership Standards and Guidelines) are anticompetitive. 953. BCBS-MO and BCBS-KC have market power in the sale of full-service commercial health insurance to individuals and small groups in each relevant geographic and product market alleged herein. 226 10 954. Each of the challenged agreements has had substantial and unreasonable anticompetitive effects in the relevant markets, including but not limited to: a. Reducing the number of health insurance companies competing with BCBS- MO and BCBS-KC throughout Missouri; b. Unreasonably limiting the entry of competitor health insurance companies into Missouri; c. Allowing BCBS-MO and BCBS-KC to maintain and enlarge their market power throughout Missouri; d. Allowing BCBS-MO and BCBS-KC to supra-competitively raise the premiums charged to consumers by artificially inflated, unreasonable, and/or supra-competitive amounts; e. Depriving consumers of health insurance of the benefits of free and open competition. 955. The procompetitive benefits, if any, of the market allocation agreements alleged above do not outweigh the anticompetitive effects of those agreements. 956. The market allocation agreements in the License Agreements, Membership Standards, and Guidelines unreasonably restrain trade in violation of § 416.031.1 of the Missouri Antitrust Law. 957. As a direct and proximate result of the Individual Blue Plans' continuing violations of § 416.031.1 of the Missouri Antitrust Law described in this Complaint, Plaintiff and other members of the Missouri Class have suffered injury and damages in an amount to be proven at trial. These damages consist of having paid artificially inflated, unreasonable, and/or supra-competitive and higher health insurance premiums to BCBS-MO and BCBS-KC than they 227 10 would have paid with increased competition and but for the violations of § 416.031.1 of the Missouri Antitrust Law. 958. Pursuant to § 416.121.1 of the Missouri Antitrust Law, Plaintiff and the Missouri Class seek money damages from BCBS-MO, BCBS-KC, and BCBSA for their violations of § 416.031.1 of the Missouri Antitrust Law. Count Fifty-Nine (Willful Acquisition and Maintenance of a Monopoly in the Relevant Market for Private Health Insurance in Violation of § 416.031.2 of the Missouri Antitrust Law) 959. Plaintiff repeat and reallege the allegations in all Paragraphs above. 960. BCBS-MO and BCBS-KC have monopoly power in the individual and small group full-service commercial health insurance market in Missouri. This monopoly power is evidenced by, among other things, BCBS-MO's and BCBS-KC's high market shares of the commercial health insurance market, including their increasing market shares even as they have raised premiums. 961. BCBS-MO and BCBS-KC have abused and continue to abuse their monopoly power to maintain and enhance their market dominance by unreasonably restraining trade, thus artificially inflating the premiums they charge to consumers. 962. BCBS-MO's and BCBS-KC's conduct constitutes unlawful monopolization and unlawful anti-competitive conduct in the relevant markets in violation of § 416.031.2 of the Missouri Antitrust Law, and such violation and the effects thereof are continuing and will continue unless injunctive relief is granted. 963. As a direct and proximate result of the Individual Blue Plans' continuing violations of § 416.031.2 of the Missouri Antitrust Law described in this Complaint, Plaintiff and other members of the Missouri Class have suffered injury and damages in an amount to be 228 10 proven at trial. These damages consist of having paid artificially inflated, unreasonable, and/or supra-competitive and higher health insurance premiums to BCBS-MO and BCBS-KC than they would have paid but for the violations of § 416.031.2 of the Missouri Antitrust Law. 964. Pursuant to § 416.121.1 of the Missouri Antitrust Law, Plaintiff and the Missouri Class seek money damages from BCBS-MO and BCBS-KC for their violations of § 416.031.2 of the Missouri Antitrust Law. Count Sixty (Willful Attempted Monopolization in the Relevant Market for Private Health Insurance in Violation of § 416.031.2 of the Missouri Antitrust Law) 965. Plaintiff repeats and realleges the allegations in all Paragraphs above. 966. BCBS-MO and BCBS-KC have acted with the specific intent to monopolize the relevant markets. 967. There was and is a dangerous possibility that BCBS-MO and BCBS-KC will succeed in their attempts to monopolize the relevant markets because BCBS-MO and BCBS-KC control a large percentage of those markets already, and further success by BCBS-MO and BCBS-KC in excluding competitors from those markets will confer monopolies on BCBS-MO and BCBS-KC in violation of § 416.031.2 of the Missouri Antitrust Law. 968. BCBS-MO's and BCBS-KC's attempted monopolizations of the relevant markets have harmed competition in those markets and have caused injury to Plaintiff and the Missouri Class. Premiums charged by BCBS-MO and BCBS-KC have been higher than they would have been in a competitive market. 969. Plaintiff and the Missouri Class have been damaged as the result of BCBS-MO's and BCBS-KC's attempted monopolizations of the relevant markets. 229 10 Count Sixty-One (Unjust Enrichment) 970. Plaintiff repeats and realleges the allegations in all Paragraphs above. 971. BCBS-MO and BCBS-KC have benefitted from their unlawful acts through Plaintiff and the Missouri Class's overpayments for health insurance premiums to BCBS-MO and BCBS-KC. BCBS-MO and BCBS-KC have unjustly enriched themselves at the expense of Plaintiff and the Missouri Class. 972. It would be inequitable for BCBS-MO and BCBS-KC to be permitted to retain the benefit of these supra-competitive premiums that were conferred by Plaintiff and the Missouri Class and retained by BCBS-MO and BCBS-KC. 973. By reason of their unlawful conduct, BCBS-MO and BCBS-KC must make restitution to Plaintiff and the Missouri Class. 230 10 NEW HAMPSHIRE (Plaintiffs Erik Barstow and GC/AAA Fences, Inc. and the New Hampshire Class Against Defendants BCBS-NH and BCBSA) Count Sixty-Two (Contract, Combination, or Conspiracy in Restraint of Trade in Violation of Sherman Act, Section 1) 974. Plaintiffs repeat and reallege the allegations in all Paragraphs above. 975. The License Agreements, Membership Standards, and Guidelines agreed to by BCBS-NH and BCBSA represent horizontal agreements entered into between BCBS-NH and the thirty-seven other member plans of BCBSA, all of whom are competitors or potential competitors in the market for commercial health insurance. 976. Each of the License Agreements, Membership Standards, and Guidelines entered into between BCBSA and BCBS-NH represents a contract, combination and/or conspiracy within the meaning of Section 1 of the Sherman Act. 977. Through the License Agreements, Membership Standards, and Guidelines, BCBSA and BCBS-NH have agreed to divide and allocate the geographic markets for the sale of commercial health insurance into a series of exclusive areas for each of the thirty-eight BCBSA members. By so doing, the BCBSA members (including BCBS-NH) have conspired to restrain trade in violation of Section 1 of the Sherman Act. These market allocation agreements are per se illegal under Section 1 of the Sherman Act. 978. The market allocation agreements entered into between BCBS-NH and the thirty- seven other BCBSA member plans (executed through the BCBSA License Agreements and related Membership Standards and Guidelines) are anticompetitive. 231 10 979. BCBS-NH has market power in the sale of full-service commercial health insurance to individuals and small groups in each relevant geographic and product market alleged herein. 980. Each of the challenged agreements has had substantial and unreasonable anticompetitive effects in the relevant markets, including but not limited to: a. Reducing the number of health insurance companies competing with BCBS- NH throughout New Hampshire; b. Unreasonably limiting the entry of competitor health insurance companies into New Hampshire; c. Allowing BCBS-NH to maintain and enlarge its market power throughout New Hampshire; d. Allowing BCBS-NH to supra-competitively raise the premiums charged to consumers by artificially inflated, unreasonable, and/or supra-competitive amounts; e. Depriving consumers of health insurance of the benefits of free and open competition. 981. The procompetitive benefits, if any, of the market allocation agreements alleged above do not outweigh the anticompetitive effects of those agreements. 982. The market allocation agreements in the License Agreements, Membership Standards, and Guidelines unreasonably restrain trade in violation of Section 1 of the Sherman Act. 983. As a direct and proximate result of the Individual Blue Plans' continuing violations of Section 1 of the Sherman Act described in this Complaint, Plaintiffs and other 232 10 members of the New Hampshire Class have suffered injury and damages in an amount to be proven at trial. These damages consist of having paid artificially inflated, unreasonable, and/or supra-competitive and higher health insurance premiums to BCBS-NH than they would have paid with increased competition and but for the Sherman Act violations. 984. Plaintiffs and the New Hampshire Class seek money damages from BCBS-NH and BCBSA for their violations of Section 1 of the Sherman Act. Count Sixty-Three (Willful Acquisition and Maintenance of a Monopoly in the Relevant Market for Private Health Insurance in Violation of Sherman Act, Section 2) 985. Plaintiffs repeat and reallege the allegations in all Paragraphs above. 986. BCBS-NH has monopoly power in the individual and small group full-service commercial health insurance market in New Hampshire. This monopoly power is evidenced by, among other things, BCBS-NH's high market share of the commercial health insurance market, including its increasing market share even as it has raised premiums. 987. BCBS-NH has abused and continues to abuse its monopoly power to maintain and enhance its market dominance by unreasonably restraining trade, thus artificially inflating the premiums it charges to consumers. 988. BCBS-NH's conduct constitutes unlawful monopolization and unlawful anti- competitive conduct in the relevant markets in violation of Section 2 of the Sherman Act, and such violation and the effects thereof are continuing and will continue unless injunctive relief is granted. 989. As a direct and proximate result of the Individual Blue Plans' continuing violations of Section 2 of the Sherman Act described in this Complaint, Plaintiffs and other members of the New Hampshire Class have suffered injury and damages in an amount to be 233 10 proven at trial. These damages consist of having paid artificially inflated, unreasonable, and/or supra-competitive and higher health insurance premiums to BCBS-NH than they would have paid but for the Sherman Act violations. 990. Plaintiffs and the New Hampshire Class seek money damages from BCBS-NH for its violations of Section 2 of the Sherman Act. Count Sixty-Four (Willful Attempted Monopolization in the Relevant Market for Private Health Insurance in Violation of Sherman Act, Section 2) 991. Plaintiffs repeat and reallege the allegations in all Paragraphs above. 992. BCBS-NH has acted with the specific intent to monopolize the relevant markets. 993. There was and is a dangerous possibility that BCBS-NH will succeed in its attempt to monopolize the relevant markets because BCBS-NH controls a large percentage of those markets already, and further success by BCBS-NH in excluding competitors from those markets will confer a monopoly on BCBS-NH in violation of Section 2 of the Sherman Act. 994. BCBS-NH's attempted monopolization of the relevant markets has harmed competition in those markets and has caused injury to Plaintiffs and the New Hampshire Class. Premiums charged by BCBS-NH have been higher than they would have been in a competitive market. 995. Plaintiffs and the New Hampshire Class have been damaged as the result of BCBS-NH's attempted monopolization of the relevant markets. Count Sixty-Five (Contract, Combination, or Conspiracy in Restraint of Trade in Violation of N.H. Rev. Stat. Ann. § 356:2) 996. Plaintiffs repeat and reallege the allegations in all Paragraphs above. 234 10 997. The License Agreements, Membership Standards, and Guidelines agreed to by BCBS-NH and BCBSA represent horizontal agreements entered into between BCBS-NH and the thirty-seven other member plans of BCBSA, all of whom are competitors or potential competitors in the market for commercial health insurance. 998. Each of the License Agreements, Membership Standards, and Guidelines entered into between BCBSA and BCBS-NH represents a contract, combination and/or conspiracy within the meaning of N.H. Rev. Stat. Ann. § 356:2. 999. Through the License Agreements, Membership Standards, and Guidelines, BCBSA and BCBS-NH have agreed to divide and allocate the geographic markets for the sale of commercial health insurance into a series of exclusive areas for each of the thirty-eight BCBSA members. By so doing, the BCBSA members (including BCBS-NH) have conspired to restrain trade in violation of N.H. Rev. Stat. Ann. § 356:2. These market allocation agreements are per se illegal under N.H. Rev. Stat. Ann. § 356:2. 1000. The market allocation agreements entered into between BCBS-NH and the thirty- seven other BCBSA member plans (executed through the BCBSA License Agreements and related Membership Standards and Guidelines) are anticompetitive. 1001. BCBS-NH has market power in the sale of full-service commercial health insurance to individuals and small groups in each relevant geographic and product market alleged herein. 1002. Each of the challenged agreements has had substantial and unreasonable anticompetitive effects in the relevant markets, including but not limited to: a. Reducing the number of health insurance companies competing with BCBS- NH throughout New Hampshire; 235 10 b. Unreasonably limiting the entry of competitor health insurance companies into New Hampshire; c. Allowing BCBS-NH to maintain and enlarge its market power throughout New Hampshire; d. Allowing BCBS-NH to supra-competitively raise the premiums charged to consumers by artificially inflated, unreasonable, and/or supra-competitive amounts; e. Depriving consumers of health insurance of the benefits of free and open competition. 1003. The procompetitive benefits, if any, of the market allocation agreements alleged above do not outweigh the anticompetitive effects of those agreements. 1004. The market allocation agreements in the License Agreements, Membership Standards, and Guidelines unreasonably restrain trade in violation of N.H. Rev. Stat. Ann. § 356:2. 1005. As a direct and proximate result of the Individual Blue Plans' continuing violations of N.H. Rev. Stat. Ann. § 356:2 described in this Complaint, Plaintiffs and other members of the New Hampshire Class have suffered injury and damages in an amount to be proven at trial. These damages consist of having paid artificially inflated, unreasonable, and/or supra-competitive and higher health insurance premiums to BCBS-NH than they would have paid with increased competition and but for the violations of N.H. Rev. Stat. Ann. § 356:2. 1006. Plaintiffs and the New Hampshire Class seek money damages from BCBS-NH and BCBSA for their violations of N.H. Rev. Stat. Ann. § 356:2. 236 10 Count Sixty-Six (Willful Acquisition and Maintenance of a Monopoly in the Relevant Market for Private Health Insurance in Violation of N.H. Rev. Stat. Ann. § 356:3) 1007. Plaintiffs repeat and reallege the allegations in all Paragraphs above. 1008. BCBS-NH has monopoly power in the individual and small group full-service commercial health insurance market in New Hampshire. This monopoly power is evidenced by, among other things, BCBS-NH's high market share of the commercial health insurance market, including its increasing market share even as it has raised premiums. 1009. BCBS-NH has abused and continues to abuse its monopoly power to maintain and enhance its market dominance by unreasonably restraining trade, thus artificially inflating the premiums it charges to consumers. 1010. BCBS-NH's conduct constitutes unlawful monopolization and unlawful anti- competitive conduct in the relevant markets in violation of N.H. Rev. Stat. Ann. § 356:3, and such violation and the effects thereof are continuing and will continue unless injunctive relief is granted. 1011. As a direct and proximate result of the Individual Blue Plans' continuing violations of N.H. Rev. Stat. Ann. § 356:3 described in this Complaint, Plaintiffs and other members of the New Hampshire Class have suffered injury and damages in an amount to be proven at trial. These damages consist of having paid artificially inflated, unreasonable, and/or supra-competitive and higher health insurance premiums to BCBS-NH than they would have paid but for the violations of N.H. Rev. Stat. Ann. § 356:3. 1012. Plaintiffs and the New Hampshire Class seek money damages from BCBS-NH for its violations of N.H. Rev. Stat. Ann. § 356:3. 237 10 Count Sixty-Seven (Willful Attempted Monopolization in the Relevant Market for Private Health Insurance in Violation of N.H. Rev. Stat. Ann. § 356:3) 1013. Plaintiffs repeat and reallege the allegations in all Paragraphs above. 1014. BCBS-NH has acted with the specific intent to monopolize the relevant markets. 1015. There was and is a dangerous possibility that BCBS-NH will succeed in its attempt to monopolize the relevant markets because BCBS-NH controls a large percentage of those markets already, and further success by BCBS-NH in excluding competitors from those markets will confer a monopoly on BCBS-NH in violation of N.H. Rev. Stat. Ann. § 356:3. 1016. BCBS-NH's attempted monopolization of the relevant markets has harmed competition in those markets and has caused injury to Plaintiffs and the New Hampshire Class. Premiums charged by BCBS-NH have been higher than they would have been in a competitive market. 1017. Plaintiffs and the New Hampshire Class have been damaged as the result of BCBS-NH's attempted monopolization of the relevant markets. Count Sixty-Eight (Unjust Enrichment) 1018. Plaintiffs repeat and reallege the allegations in all Paragraphs above. 1019. BCBS-NH has benefitted from its unlawful acts through Plaintiffs' and the New Hampshire Class's overpayments for health insurance premiums to BCBS-NH. BCBS-NH has unjustly enriched itself at the expense of the Plaintiffs and the New Hampshire Class. 1020. It would be inequitable for BCBS-NH to be permitted to retain the benefit of these supra-competitive premiums that were conferred by Plaintiffs and the New Hampshire Class and retained by BCBS-NH. 238 10 1021. By reason of its unlawful conduct, BCBS-NH must make restitution to Plaintiffs and the New Hampshire Class. 239 10 NORTH CAROLINA (Plaintiffs Keith O. Cerven, Teresa M. Cerven, and SHGI Corp. and the North Carolina Class Against Defendants BCBS-NC and BCBSA) Count Sixty-Nine (Contract, Combination, or Conspiracy in Restraint of Trade in Violation of Sherman Act, Section 1) 1022. Plaintiffs repeat and reallege the allegations in all Paragraphs above. 1023. The License Agreements, Membership Standards, and Guidelines agreed to by BCBS-NC and BCBSA represent horizontal agreements entered into between BCBS-NC and the 37 other member plans of BCBSA, all of whom are competitors or potential competitors in the market for commercial health insurance. 1024. Each of the License Agreements, Membership Standards, and Guidelines entered into between BCBSA and BCBS-NC represents a contract, combination and/or conspiracy within the meaning of Section 1 of the Sherman Act. 1025. Through the License Agreements, Membership Standards, and Guidelines, BCBSA and BCBS-NC have agreed to divide and allocate the geographic markets for the sale of commercial health insurance into a series of exclusive areas for each of the thirty-eight BCBSA members. By so doing, the BCBSA members (including BCBS-NC) have conspired to restrain trade in violation of Section 1 of the Sherman Act. These market allocation agreements are per se illegal under Section 1 of the Sherman Act. 1026. The market allocation agreements entered into between BCBS-NC and the thirty- seven other BCBSA member plans (executed through the BCBSA License Agreements and related Membership Standards and Guidelines) are anticompetitive. 240 10 1027. BCBS-NC has market power in the sale of full-service commercial health insurance to individuals and small groups in each relevant geographic and product market alleged herein. 1028. Each of the challenged agreements has had substantial and unreasonable anticompetitive effects in the relevant markets, including but not limited to: a. Reducing the number of health insurance companies competing with BCBS- NC throughout North Carolina; b. Unreasonably limiting the entry of competitor health insurance companies into North Carolina; c. Allowing BCBS-NC to maintain and enlarge its market power throughout North Carolina; d. Allowing BCBS-NC to supra-competitively raise the premiums charged to consumers by artificially inflated, unreasonable, and/or supra-competitive amounts; e. Depriving consumers of health insurance of the benefits of free and open competition. 1029. The procompetitive benefits, if any, of the market allocation agreements alleged above do not outweigh the anticompetitive effects of those agreements. 1030. The market allocation agreements in the License Agreements, Membership Standards, and Guidelines unreasonably restrain trade in violation of Section 1 of the Sherman Act. 1031. As a direct and proximate result of the Individual Blue Plans' continuing violations of Section 1 of the Sherman Act described in this Complaint, Plaintiffs and other 241 10 members of the North Carolina Class have suffered injury and damages in an amount to be proven at trial. These damages consist of having paid artificially inflated, unreasonable, and/or supra-competitive and higher health insurance premiums to BCBS-NC than they would have paid with increased competition and but for the Sherman Act violations. 1032. Plaintiffs and the North Carolina Class seek money damages from BCBS-NC and BCBSA for their violations of Section 1 of the Sherman Act. Count Seventy (MFNs; Sherman Act Section 1 Violation) 1033. Plaintiffs repeat and reallege the allegations above. 1034. BCBS-NC has market power in the sale of commercial health insurance to individuals and small groups in each relevant geographic market alleged herein. 1035. The provider agreements BCBS-NC entered into between BCBS-NC and health care providers in North Carolina that contain MFN provisions constitute contracts, combinations, and conspiracies within the meaning of Section 1 of the Sherman Act. 1036. Each of the BCBS-NC provider agreements containing an MFN has had substantial and unreasonable anticompetitive effects in the relevant markets, including but not limited to: a. Raising the prices of health care services to commercial health insurers in competition with BCBS-NC; b. Unreasonably restricting price and cost competition among commercial health insurers by limiting or preventing commercial health insurance in competition with BCBS-NC from obtaining competitive pricing from health care providers; 242 10 c. Unreasonably restricting the ability of health care providers to offer to BCBS- NC's competitors or potential competitors reduced prices for services that the health care providers and insurers consider to be in their mutual interest; d. Depriving consumers of health care services and health insurance of the benefits of free and open competition. 1037. The procompetitive benefits, if any, of the BCBS-NC provider agreements containing MFN provisions do not outweigh the anticompetitive effects of the agreements. 1038. Each agreement between BCBS-NC and a health care provider that contains an MFN unreasonably restrains trade in violation of Section 1 of the Sherman Act. 1039. As a direct and proximate result of the Individual Blue Plans' continuing violations of Section 1 of the Sherman Act described in this Complaint, Plaintiffs and other members of the North Carolina Class have suffered injury and damages in an amount to be proven at trial. These damages consist of having paid artificially inflated, unreasonable, and/or supra-competitive and higher health insurance premiums to BCBS-NC than they would have paid but for the Sherman Act violations. 1040. Plaintiffs and the NC Class seek money damages from BCBS-NC for its violations of Section 1 of the Sherman Act. Count Seventy-One (Willful Acquisition and Maintenance of a Monopoly in the Relevant Market for Private Health Insurance in Violation of Sherman Act, Section 2) 1041. Plaintiffs repeat and reallege the allegations in all Paragraphs above. 1042. BCBS-NC has monopoly power in the individual and small group full-service commercial health insurance market in North Carolina. This monopoly power is evidenced by, among other things, BCBS-NC's ability to enter into MFN agreements with providers, which 243 10 evidences BCBS-NC's ability to control prices and exclude competitors, and BCBS-NC's high market share of the commercial health insurance market, including its increasing market share even as it has raised premiums. 1043. BCBS-NC has abused and continues to abuse its monopoly power to maintain and enhance its market dominance by unreasonably restraining trade, thus artificially inflating the premiums it charges to consumers. 1044. BCBS-NC's conduct constitutes unlawful monopolization and unlawful anti- competitive conduct in the relevant markets in violation of Section 2 of the Sherman Act, and such violation and the effects thereof are continuing and will continue unless injunctive relief is granted. 1045. As a direct and proximate result of the Individual Blue Plans' continuing violations of Section 2 of the Sherman Act described in this Complaint, Plaintiffs and other members of the North Carolina Class have suffered injury and damages in an amount to be proven at trial. These damages consist of having paid artificially inflated, unreasonable, and/or supra-competitive and higher health insurance premiums to BCBS-NC than they would have paid but for the Sherman Act violations. 1046. Plaintiffs and the North Carolina Class seek money damages from BCBS-NC for its violations of Section 2 of the Sherman Act. Count Seventy-Two (Willful Attempted Monopolization in the Relevant Market for Private Health Insurance in Violation of Sherman Act, Section 2) 1047. Plaintiffs repeat and reallege the allegations in all Paragraphs above. 1048. BCBS-NC has acted with the specific intent to monopolize the relevant markets. 244 10 1049. There was and is a dangerous possibility that BCBS-NC will succeed in its attempt to monopolize the relevant markets because BCBS-NC controls a large percentage of those markets already, and further success by BCBS-NC in excluding competitors from those markets will confer a monopoly on BCBS-NC in violation of Section 2 of the Sherman Act. 1050. BCBS-NC's attempted monopolization of the relevant markets has harmed competition in those markets and has caused injury to Plaintiffs and the North Carolina Class. Premiums charged by BCBS-NC have been higher than they would have been in a competitive market. 1051. Plaintiffs and the North Carolina Class have been damaged as the result of BCBS- NC's attempted monopolization of the relevant markets. Count Seventy-Three (Contract, Combination, or Conspiracy in Restraint of Trade in Violation of North Carolina General Statute Sections 58-63-15, 75-1, and 75-1.1) 1052. Plaintiffs repeat and reallege the allegations in Paragraphs 1 through 174. 1053. The License Agreements, Membership Standards, and Guidelines agreed to by BCBS-NC and BCBSA represent horizontal agreements entered into between BCBS-NC and the thirty-seven other member plans of BCBSA, all of whom are competitors or potential competitors in the market for commercial health insurance. 1054. Each of the License Agreements, Membership Standards, and Guidelines entered into between BCBSA and BCBS-NC represents a contract, combination, and/or conspiracy within the meaning of North Carolina General Statute Section 75-1 and constitutes an unfair method of competition in or affecting commerce and unfair or deceptive practice affecting commerce within the meaning of North Carolina General Statute Section 75-1.1, and an unfair 245 10 method of competition and unfair or deceptive act or practice in the business of insurance within the meaning of North Carolina General Statute Section 58-63-10. 1055. Through the License Agreements, Membership Standards, and Guidelines, BCBSA and BCBS-NC have agreed to divide and allocate the geographic markets for the sale of commercial health insurance into a series of exclusive areas for each of the thirty-eight BCBSA members. By so doing, the BCBSA members (including BCBS-NC) have conspired to restrain trade in violation of North Carolina General Statute Sections 75-1, 75-1.1, and 58-63-10. These market allocation agreements are per se illegal under North Carolina General Statute Sections 75-1, 75-1.1, and 58-63-10. 1056. The market allocation agreements entered into between BCBS-NC and the thirty- seven other BCBSA member plans (executed through the BCBSA License Agreements and related Membership Standards and Guidelines) are anticompetitive. 1057. BCBS-NC has market power in the sale of full-service commercial health insurance to individuals and small groups in each relevant geographic and product market alleged herein. 1058. Each of the challenged agreements has had substantial and unreasonable anticompetitive effects in the relevant markets, including but not limited to: a. Reducing the number of health insurance companies competing with BCBS- NC throughout North Carolina; b. Unreasonably limiting the entry of competitor health insurance companies into North Carolina; c. Allowing BCBS-NC to maintain and enlarge its market power throughout North Carolina; 246 10 d. Allowing BCBS-NC to supra-competitively raise the premiums charged to consumers by artificially inflated, unreasonable, and/or supra-competitive amounts; e. Depriving consumers of health insurance of the benefits of free and open competition. 1059. The procompetitive benefits, if any, of the market allocation agreements alleged above do not outweigh the anticompetitive effects of those agreements. 1060. The market allocation agreements in the License Agreements, Membership Standards, and Guidelines unreasonably restrain trade in violation of North Carolina General Statute Sections 75-1, 75-1.1, and 58-63-10. 1061. As a direct and proximate result of the Individual Blue Plans' continuing violations of North Carolina General Statute Sections 75-1, 75-1.1, and 58-63-10 described in this Complaint, Plaintiffs and other members of the North Carolina Class have suffered injury and damages in an amount to be proven at trial. These damages consist of having paid artificially inflated, unreasonable, and/or supra-competitive and higher health insurance premiums to BCBS-NC than they would have paid with increased competition and but for the North Carolina General Statute violations. 1062. Plaintiffs and the North Carolina Class seek money damages from BCBS-NC and BCBSA for their violations of North Carolina General Statute Sections 75-1, 75-1.1, and 58-63- 10. Count Seventy-Four (MFNs; Violation of North Carolina General Statute Section 75-1, 75-1.1, and 58-63-10) 1063. Plaintiffs repeat and reallege the allegations in Paragraphs 1 through 185. 247 10 1064. BCBS-NC has market power in the sale of commercial health insurance to individuals and small groups in each relevant geographic market alleged herein. 1065. The provider agreements BCBS-NC entered into between BCBS-NC and health care providers in North Carolina that contain MFN provisions constitute contracts, combinations, and conspiracies within the meaning of North Carolina General Statute Section 75-1, and constitute an unfair method of competition in or affecting commerce and unfair or deceptive practice affecting commerce within the meaning of North Carolina General Statute Section 75- 1.1, and an unfair method of competition and unfair or deceptive act or practice in the business of insurance within the meaning of North Carolina General Statute Section 58-63-10. 1066. Each of the BCBS-NC provider agreements containing an MFN has had substantial and unreasonable anticompetitive effects in the relevant markets, including but not limited to: a. Raising the prices of health care services to commercial health insurers in competition with BCBS-NC; b. Unreasonably restricting price and cost competition among commercial health insurers by limiting or preventing commercial health insurance in competition with BCBS-NC from obtaining competitive pricing from health care providers; c. Unreasonably restricting the ability of health care providers to offer to BCBS- NC's competitors or potential competitors reduced prices for services that the health care providers and insurers consider to be in their mutual interest; d. Depriving consumers of health care services and health insurance of the benefits of free and open competition. 248 10 1067. The procompetitive benefits, if any, of the BCBS-NC provider agreements containing MFN provisions do not outweigh the anticompetitive effects of the agreements. 1068. Each agreement between BCBS-NC and a health care provider that contains an MFN unreasonably restrains trade in violation of North Carolina General Statute Sections 75-1, 75-1.1, and 58-63-10. 1069. As a direct and proximate result of the Individual Blue Plans' continuing violations of North Carolina General Statute Sections 75-1, 75-1.1, and 58-63-10 described in this Complaint, Plaintiffs and other members of the North Carolina Class have suffered injury and damages in an amount to be proven at trial. These damages consist of having paid artificially inflated, unreasonable, and/or supra-competitive and higher health insurance premiums to BCBS-NC than they would have paid but for the North Carolina General Statute violations. 1070. Plaintiffs and the North Carolina Class seek money damages from BCBS-NC for its violations of North Carolina General Statute Section 75-1, 75-1.1, and 58-63-10. Count Seventy-Five (Unjust Enrichment) 1071. Plaintiffs repeat and reallege the allegations in all Paragraphs above. 1072. BCBS-NC has benefitted from its unlawful acts through Plaintiffs' and the North Carolina Class's overpayments for health insurance premiums to BCBS-NC. BCBS-NC has unjustly enriched itself at the expense of the Plaintiffs and the North Carolina Class. 1073. It would be inequitable for BCBS-NC to be permitted to retain the benefit of these supra-competitive premiums that were conferred by Plaintiffs and the North Carolina Class, retained by BCBS-NC, and were not gratuitous. 249 10 1074. By reason of its unlawful conduct, BCBS-NC must make restitution to Plaintiffs and the North Carolina Class. 250 10 WESTERN PENNSYLVANIA Count Seventy-Six (Plaintiffs Kathleen Scheller and Iron Gate Technology, Inc. and the Western Pennsylvania Class Against Defendants Highmark BCBS, BC-Northeastern PA, Independence BC, and BCBSA) (Contract, Combination, or Conspiracy in Restraint of Trade in Violation of Sherman Act, Section 1) 1075. Plaintiffs repeat and reallege the allegations in all Paragraphs above. 1076. The License Agreements, Membership Standards, and Guidelines agreed to by Highmark BCBS and BCBSA, BC-Northeastern PA and BCBSA, and Independence BC and BCBSA represent horizontal agreements entered into between Highmark BCBS, BC- Northeastern PA, Independence BC and the 35 other member plans of BCBSA, all of whom are competitors or potential competitors in the market for commercial health insurance. 1077. Each of the License Agreements, Membership Standards, and Guidelines entered into between BCBSA and Highmark BCBS, BC-Northeastern PA and BCBSA, and Independence BC and BCBSA represents a contract, combination and/or conspiracy within the meaning of Section 1 of the Sherman Act. 1078. Through the License Agreements, Membership Standards, and Guidelines, BCBSA and Highmark BCBS, BC-Northeastern PA and BCBSA, and Independence BC and BCBSA have agreed to divide and allocate the geographic markets for the sale of commercial health insurance into a series of exclusive areas for each of the thirty-eight BCBSA members. By so doing, the BCBSA members (including Highmark BCBS, BC-Northeastern PA, and Independence BC) have conspired to restrain trade in violation of Section 1 of the Sherman Act. These market allocation agreements are per se illegal under Section 1 of the Sherman Act. 1079. The market allocation agreements entered into between Highmark BCBS, BC- Northeastern PA, and Independence BC and the thirty-five other BCBSA member plans 251 10 (executed through the BCBSA License Agreements and related Membership Standards and Guidelines) are anticompetitive. 1080. Highmark BCBS has market power in the sale of full-service commercial health insurance to individuals and small groups in each relevant geographic and product market alleged herein. 1081. Each of the challenged agreements has had substantial and unreasonable anticompetitive effects in the relevant markets, including but not limited to: a. Reducing the number of health insurance companies competing with Highmark BCBS throughout Western Pennsylvania; b. Unreasonably limiting the entry of competitor health insurance companies into Western Pennsylvania; c. Allowing Highmark BCBS to maintain and enlarge its market power throughout Western Pennsylvania; d. Allowing Highmark BCBS to supra-competitively raise the premiums charged to consumers by artificially inflated, unreasonable, and/or supra-competitive amounts; e. Depriving consumers of health insurance of the benefits of free and open competition. 1082. The procompetitive benefits, if any, of the market allocation agreements alleged above do not outweigh the anticompetitive effects of those agreements. 1083. The market allocation agreements in the License Agreements, Membership Standards, and Guidelines unreasonably restrain trade in violation of Section 1 of the Sherman Act. 252 10 1084. As a direct and proximate result of the Individual Blue Plans' continuing violations of Section 1 of the Sherman Act described in this Complaint, Plaintiffs and other members of the Western Pennsylvania Class have suffered injury and damages in an amount to be proven at trial. These damages consist of having paid artificially inflated, unreasonable, and/or supra-competitive and higher health insurance premiums to Highmark BCBS than they would have paid with increased competition and but for the Sherman Act violations. 1085. Plaintiffs and the Western Pennsylvania Class seek money damages from Highmark BCBS, BC-Northeastern PA, Independence BC, and BCBSA for their violations of Section 1 of the Sherman Act. Count Seventy-Seven (Plaintiffs Kathleen Scheller and Iron Gate Technology, Inc. and the Western Pennsylvania Class Against Defendants Highmark BCBS and BC-Northeastern PA) (Illegal Anticompetitive Agreement with BC-Northeastern PA; Section 1 Violation) 1086. Plaintiffs repeat and reallege the allegations above. 1087. Highmark BCBS has market power in the sale of full-service commercial health insurance to individuals and small groups in each relevant geographic market alleged herein. 1088. The agreement Highmark BCBS entered into with BC-Northeastern PA in which the two competitors agreed to refrain from competing constitutes a contract, combination, and/or conspiracy within the meaning of Section 1 of the Sherman Act. 1089. The non-compete agreement between Highmark BCBS and BC-Northeastern PA has had substantial and unreasonable anticompetitive effects in the relevant markets, including but not limited to: a. Reducing the number of health insurance companies competing with Highmark BCBS throughout Western Pennsylvania; 253 10 b. Unreasonably limiting the entry of competitor health insurance companies into Western Pennsylvania; c. Allowing Highmark BCBS to maintain and enlarge its market power throughout Western Pennsylvania; d. Allowing Highmark BCBS to supra-competitively raise the premiums charged to consumers by artificially inflated, unreasonable, and/or supra-competitive amounts; e. Depriving consumers of health insurance of the benefits of free and open competition. 1090. The procompetitive benefits, if any, of the non-compete agreement between Highmark BCBS and BC-Northeastern PA do not outweigh the anticompetitive effects of the agreement. 1091. The non-compete agreement between Highmark BCBS and BC-Northeastern PA unreasonably restrains trade in violation of Section 1 of the Sherman Act. 1092. As a direct and proximate result of Highmark BCBS and BC-Northeastern PA's continuing violations of Section 1 of the Sherman Act, Plaintiffs and other members of the Western Pennsylvania Class have suffered injury and damages in an amount to be proven at trial. These damages consist of having paid artificially inflated, unreasonable, and/or supra- competitive and higher health insurance premiums to Highmark BCBS than they would have paid but for the Sherman Act violations. 1093. Plaintiffs and the Western Pennsylvania Class seek money damages from Highmark BCBS and BC-Northeastern PA for their violations of Section 1 of the Sherman Act. 254 10 Count Seventy-Eight (Plaintiffs Kathleen Scheller and Iron Gate Technology, Inc. and the Western Pennsylvania Class Against Defendants Highmark BCBS and Independence BC) (Illegal Anticompetitive Agreement with Independence BC; Section 1 Violation) 1094. Plaintiffs repeat and reallege the allegations above. 1095. Highmark BCBS has market power in the sale of full-service commercial health insurance to individual and small group consumers in each relevant geographic market alleged herein. 1096. The agreement Highmark BCBS entered into with Independence BC in which the two competitors agreed to refrain from competing constitutes a contract, combination, and/or conspiracy within the meaning of Section 1 of the Sherman Act. 1097. The non-compete agreement between Highmark BCBS and Independence BC has had substantial and unreasonable anticompetitive effects in the relevant markets, including but not limited to: a. Reducing the number of health insurance companies competing with Highmark BCBS throughout Western Pennsylvania; b. Unreasonably limiting the entry of competitor health insurance companies into Western Pennsylvania; c. Allowing Highmark BCBS to maintain and enlarge its market power throughout Western Pennsylvania; d. Allowing Highmark BCBS to supra-competitively raise the premiums charged to consumers by artificially inflated, unreasonable, and/or supra-competitive amounts; 255 10 e. Depriving consumers of health insurance of the benefits of free and open competition. 1098. The procompetitive benefits, if any, of the non-compete agreement between Highmark BCBS and Independence BC do not outweigh the anticompetitive effects of the agreement. 1099. The non-compete agreement between Highmark BCBS and Independence BC unreasonably restrains trade in violation of Section 1 of the Sherman Act. 1100. As a direct and proximate result of Highmark BCBS and Independence BC's continuing violations of Section 1 of the Sherman Act, plaintiffs and other members of the Western Pennsylvania Class have suffered injury and damages in an amount to be proven at trial. These damages consist of having paid artificially inflated, unreasonable, and/or supra- competitive and higher health insurance premiums to Highmark BCBS than they would have paid but for the Sherman Act violations. 1101. Plaintiffs and the Western Pennsylvania Class seek money damages from Highmark BCBS and Independence BC for their violations of Section 1 of the Sherman Act. Count Seventy-Nine (Plaintiffs Kathleen Scheller and Iron Gate Technology, Inc. and the Western Pennsylvania Class Against Defendant Highmark BCBS) (MFNs; Sherman Act Section 1 Violation) 1102. Plaintiffs repeat and reallege the allegations above. 1103. Highmark BCBS has market power in the sale of commercial health insurance to individuals and small groups in each relevant geographic market alleged herein. 256 10 1104. The provider agreements Highmark BCBS entered into between Highmark BCBS and health care providers in Western Pennsylvania that contain MFN provisions constitute contracts, combinations, and conspiracies within the meaning of Section 1 of the Sherman Act. 1105. Each of the Highmark BCBS provider agreements containing an MFN has had substantial and unreasonable anticompetitive effects in the relevant markets, including but not limited to: a. Raising the prices of health care services to commercial health insurers in competition with Highmark BCBS; b. Unreasonably restricting price and cost competition among commercial health insurers by limiting or preventing commercial health insurance in competition with Highmark BCBS from obtaining competitive pricing from health care providers; c. Unreasonably restricting the ability of health care providers to offer to Highmark BCBS competitors or potential competitors reduced prices for services that the health care providers and insurers consider to be in their mutual interest; d. Depriving consumers of health care services and health insurance of the benefits of free and open competition. 1106. The procompetitive benefits, if any, of the Highmark BCBS provider agreements containing MFN provisions do not outweigh the anticompetitive effects of the agreements. 1107. Each agreement between Highmark BCBS and a health care provider that contains an MFN unreasonably restrains trade in violation of Section 1 of the Sherman Act. 257 10 1108. As a direct and proximate result of the Individual Blue Plans' continuing violations of Section 1 of the Sherman Act described in this Complaint, Plaintiffs and other members of the Western Pennsylvania Class have suffered injury and damages in an amount to be proven at trial. These damages consist of having paid artificially inflated, unreasonable, and/or supra-competitive and higher health insurance premiums to Highmark BCBS than they would have paid but for the Sherman Act violations. 1109. Plaintiffs and the Western Pennsylvania Class seek money damages from Highmark BCBS for its violations of Section 1 of the Sherman Act. Count Eighty (Plaintiffs Kathleen Scheller and Iron Gate Technology, Inc. and the Western Pennsylvania Class Against Defendant Highmark BCBS) (Willful Acquisition and Maintenance of a Monopoly in the Relevant Market for Private Health Insurance in Violation of Sherman Act, Section 2) 1110. Plaintiffs repeat and reallege the allegations in all Paragraphs above. 1111. Highmark BCBS has monopoly power in the individual and small group full- service commercial health insurance market in Western Pennsylvania. This monopoly power is evidenced by, among other things, Highmark BCBS's ability to enter into MFN agreements with providers, which evidences Highmark BCBS's ability to control prices and exclude competitors, and Highmark BCBS's high market share of the commercial health insurance market, including its increasing market share even as it has raised premiums. 1112. Highmark BCBS has abused and continues to abuse its monopoly power to maintain and enhance its market dominance by unreasonably restraining trade, thus artificially inflating the premiums it charges to consumers. 1113. Highmark BCBS's conduct constitutes unlawful monopolization and unlawful anti-competitive conduct in the relevant markets in violation of Section 2 of the Sherman Act, 258 10 and such violation and the effects thereof are continuing and will continue unless injunctive relief is granted. 1114. As a direct and proximate result of the Individual Blue Plans' continuing violations of Section 2 of the Sherman Act described in this Complaint, Plaintiffs and other members of the Western Pennsylvania Class have suffered injury and damages in an amount to be proven at trial. These damages consist of having paid artificially inflated, unreasonable, and/or supra-competitive and higher health insurance premiums to Highmark BCBS than they would have paid but for the Sherman Act violations. 1115. Plaintiffs and the Western Pennsylvania Class seek money damages from Highmark BCBS for its violations of Section 2 of the Sherman Act. Count Eighty-One (Plaintiffs Kathleen Scheller and Iron Gate Technology, Inc. and the Western Pennsylvania Class Against Defendant Highmark BCBS) (Willful Attempted Monopolization in the Relevant Market for Private Health Insurance in Violation of Sherman Act, Section 2) 1116. Plaintiffs repeat and reallege the allegations in all Paragraphs above. 1117. Highmark BCBS has acted with the specific intent to monopolize the relevant markets. 1118. There was and is a dangerous possibility that Highmark BCBS will succeed in its attempt to monopolize the relevant markets because Highmark BCBS controls a large percentage of those markets already, and further success by Highmark BCBS in excluding competitors from those markets will confer a monopoly on Highmark BCBS in violation of Section 2 of the Sherman Act. 1119. Highmark BCBS's attempted monopolization of the relevant markets has harmed competition in those markets and has caused injury to Plaintiffs and the Western Pennsylvania 259 10 Class. Premiums charged by Highmark BCBS have been higher than they would have been in a competitive market. 1120. Plaintiffs and the Western Pennsylvania Class have been damaged as the result of Highmark BCBS's attempted monopolization of the relevant markets. 260 10 RHODE ISLAND (Plaintiff Nancy Thomas and the Rhode Island Class Against Defendants BCBS-RI and BCBSA) Count Eighty-Two (Contract, Combination, or Conspiracy in Restraint of Trade in Violation of Sherman Act, Section 1) 1121. Plaintiff repeats and realleges the allegations in all Paragraphs above. 1122. The License Agreements, Membership Standards, and Guidelines agreed to by BCBS-RI and BCBSA represent horizontal agreements entered into between BCBS-RI and the 37 other member plans of BCBSA, all of whom are competitors or potential competitors in the market for commercial health insurance. 1123. Each of the License Agreements, Membership Standards, and Guidelines entered into between BCBSA and BCBS-RI represents a contract, combination and/or conspiracy within the meaning of Section 1 of the Sherman Act. 1124. Through the License Agreements, Membership Standards, and Guidelines, BCBSA and BCBS-RI have agreed to divide and allocate the geographic markets for the sale of commercial health insurance into a series of exclusive areas for each of the thirty-eight BCBSA members. By so doing, the BCBSA members (including BCBS-RI) have conspired to restrain trade in violation of Section 1 of the Sherman Act. These market allocation agreements are per se illegal under Section 1 of the Sherman Act. 1125. The market allocation agreements entered into between BCBS-RI and the thirty- seven other BCBSA member plans (executed through the BCBSA License Agreements and related Membership Standards and Guidelines) are anticompetitive. 261 10 1126. BCBS-RI has market power in the sale of full-service commercial health insurance to individuals and small groups in each relevant geographic and product market alleged herein. 1127. Each of the challenged agreements has had substantial and unreasonable anticompetitive effects in the relevant markets, including but not limited to: a. Reducing the number of health insurance companies competing with BCBS- RI throughout Rhode Island; b. Unreasonably limiting the entry of competitor health insurance companies into Rhode Island; c. Allowing BCBS-RI to maintain and enlarge its market power throughout Rhode Island; d. Allowing BCBS-RI to supra-competitively raise the premiums charged to consumers by artificially inflated, unreasonable, and/or supra-competitive amounts; e. Depriving consumers of health insurance of the benefits of free and open competition. 1128. The procompetitive benefits, if any, of the market allocation agreements alleged above do not outweigh the anticompetitive effects of those agreements. 1129. The market allocation agreements in the License Agreements, Membership Standards, and Guidelines unreasonably restrain trade in violation of Section 1 of the Sherman Act. 1130. As a direct and proximate result of the Individual Blue Plans' continuing violations of Section 1 of the Sherman Act described in this Complaint, Plaintiff and other 262 10 members of the Rhode Island Class have suffered injury and damages in an amount to be proven at trial. These damages consist of having paid artificially inflated, unreasonable, and/or supra- competitive and higher health insurance premiums to BCBS-RI than they would have paid with increased competition and but for the Sherman Act violations. 1131. Plaintiff and the Rhode Island Class seek money damages from BCBS-RI and BCBSA for their violations of Section 1 of the Sherman Act. Count Eighty-Three (Willful Acquisition and Maintenance of a Monopoly in the Relevant Market for Private Health Insurance in Violation of Sherman Act, Section 2) 1132. Plaintiff repeats and realleges the allegations in all Paragraphs above. 1133. BCBS-RI has monopoly power in the individual and small group full-service commercial health insurance market in Rhode Island. This monopoly power is evidenced by, among other things, BCBS-RI's high market share of the commercial health insurance market, including its increasing market share even as it has raised premiums. 1134. BCBS-RI has abused and continues to abuse its monopoly power to maintain and enhance its market dominance by unreasonably restraining trade, thus artificially inflating the premiums it charges to consumers. 1135. BCBS-RI's conduct constitutes unlawful monopolization and unlawful anti- competitive conduct in the relevant markets in violation of Section 2 of the Sherman Act, and such violation and the effects thereof are continuing and will continue unless injunctive relief is granted. 1136. As a direct and proximate result of the Individual Blue Plans' continuing violations of Section 2 of the Sherman Act described in this Complaint, Plaintiff and other members of the Rhode Island Class have suffered injury and damages in an amount to be proven 263 10 at trial. These damages consist of having paid artificially inflated, unreasonable, and/or supra- competitive and higher health insurance premiums to BCBS-RI than they would have paid but for the Sherman Act violations. 1137. Plaintiff and the Rhode Island Class seek money damages from BCBS-RI for its violations of Section 2 of the Sherman Act. Count Eighty-Four (Willful Attempted Monopolization in the Relevant Market for Private Health Insurance in Violation of Sherman Act, Section 2) 1138. Plaintiff repeats and realleges the allegations in all Paragraphs above. 1139. BCBS-RI has acted with the specific intent to monopolize the relevant markets. 1140. There was and is a dangerous possibility that BCBS-RI will succeed in its attempt to monopolize the relevant markets because BCBS-RI controls a large percentage of those markets already, and further success by BCBS-RI in excluding competitors from those markets will confer a monopoly on BCBS-RI in violation of Section 2 of the Sherman Act. 1141. BCBS-RI's attempted monopolization of the relevant markets has harmed competition in those markets and has caused injury to Plaintiff and the Rhode Island Class. Premiums charged by BCBS-RI have been higher than they would have been in a competitive market. 1142. Plaintiff and the Rhode Island Class have been damaged as the result of BCBS- RI's attempted monopolization of the relevant markets. Count Eighty-Five (Contract, Combination, or Conspiracy in Restraint of Trade in Violation of Rhode Island General Laws § 6-36-4) 1143. Plaintiff repeats and realleges the allegations in all Paragraphs above. 264 10 1144. The License Agreements, Membership Standards, and Guidelines agreed to by BCBS-RI and BCBSA represent horizontal agreements entered into between BCBS-RI and the 37 other member plans of BCBSA, all of whom are competitors or potential competitors in the market for commercial health insurance. 1145. Each of the License Agreements, Membership Standards, and Guidelines entered into between BCBSA and BCBS-RI represents a contract, combination and/or conspiracy within the meaning of Rhode Island General Laws § 6-36-4. 1146. Through the License Agreements, Membership Standards, and Guidelines, BCBSA and BCBS-RI have agreed to divide and allocate the geographic markets for the sale of commercial health insurance into a series of exclusive areas for each of the thirty-eight BCBSA members. By so doing, the BCBSA members (including BCBS-RI) have conspired to restrain trade in violation of Rhode Island General Laws § 6-36-4. These market allocation agreements are per se illegal under Rhode Island General Laws § 6-36-4. 1147. The market allocation agreements entered into between BCBS-RI and the thirty- seven other BCBSA member plans (executed through the BCBSA License Agreements and related Membership Standards and Guidelines) are anticompetitive. 1148. BCBS-RI has market power in the sale of full-service commercial health insurance to individuals and small groups in each relevant geographic and product market alleged herein. 1149. Each of the challenged agreements has had substantial and unreasonable anticompetitive effects in the relevant markets, including but not limited to: a. Reducing the number of health insurance companies competing with BCBS- RI throughout Rhode Island; 265 10 b. Unreasonably limiting the entry of competitor health insurance companies into Rhode Island; c. Allowing BCBS-RI to maintain and enlarge its market power throughout Rhode Island; d. Allowing BCBS-RI to supra-competitively raise the premiums charged to consumers by artificially inflated, unreasonable, and/or supra-competitive amounts; e. Depriving consumers of health insurance of the benefits of free and open competition. 1150. The procompetitive benefits, if any, of the market allocation agreements alleged above do not outweigh the anticompetitive effects of those agreements. 1151. The market allocation agreements in the License Agreements, Membership Standards, and Guidelines unreasonably restrain trade in violation of Rhode Island General Laws § 6-36-4. 1152. As a direct and proximate result of the Individual Blue Plans' continuing violations of Rhode Island General Laws § 6-36-4 described in this Complaint, Plaintiff and other members of the Rhode Island Class have suffered injury and damages in an amount to be proven at trial. These damages consist of having paid artificially inflated, unreasonable, and/or supra-competitive and higher health insurance premiums to BCBS-RI than they would have paid with increased competition and but for the violations of Rhode Island General Laws § 6-36-4. 1153. Plaintiff and the Rhode Island Class seek money damages from BCBS-RI and BCBSA for their violations of Rhode Island General Laws § 6-36-4. Count Eighty-Six 266 10 (Willful Acquisition and Maintenance of a Monopoly in the Relevant Market for Private Health Insurance in Violation of Rhode Island General Laws § 6-36-5) 1154. Plaintiff repeats and realleges the allegations in all Paragraphs above. 1155. BCBS-RI has monopoly power in the individual and small group full-service commercial health insurance market in Rhode Island. This monopoly power is evidenced by, among other things, BCBS-RI's high market share of the commercial health insurance market, including its increasing market share even as it has raised premiums. 1156. BCBS-RI has abused and continues to abuse its monopoly power to maintain and enhance its market dominance by unreasonably restraining trade, thus artificially inflating the premiums it charges to consumers. 1157. BCBS-RI's conduct constitutes unlawful monopolization and unlawful anti- competitive conduct in the relevant markets in violation of Rhode Island General Laws § 6-36-5, and such violation and the effects thereof are continuing and will continue unless injunctive relief is granted. 1158. As a direct and proximate result of the Individual Blue Plans' continuing violations of Rhode Island General Laws § 6-36-5 described in this Complaint, Plaintiff and other members of the Rhode Island Class have suffered injury and damages in an amount to be proven at trial. These damages consist of having paid artificially inflated, unreasonable, and/or supra-competitive and higher health insurance premiums to BCBS-RI than they would have paid but for the violations of Rhode Island General Laws § 6-36-5. 1159. Plaintiff and the Rhode Island Class seek money damages from BCBS-RI for its violations of Rhode Island General Laws § 6-36-5. Count Eighty-Seven (Willful Attempted Monopolization in the Relevant Market for Private Health Insurance in Violation of Rhode Island General Laws § 6-36-5) 267 10 1160. Plaintiff repeats and realleges the allegations in all Paragraphs above. 1161. BCBS-RI has acted with the specific intent to monopolize the relevant markets. 1162. There was and is a dangerous possibility that BCBS-RI will succeed in its attempt to monopolize the relevant markets because BCBS-RI controls a large percentage of those markets already, and further success by BCBS-RI in excluding competitors from those markets will confer a monopoly on BCBS-RI in violation of Rhode Island General Laws § 6-36-5. 1163. BCBS-RI's attempted monopolization of the relevant markets has harmed competition in those markets and has caused injury to Plaintiff and the Rhode Island Class. Premiums charged by BCBS-RI have been higher than they would have been in a competitive market. 1164. Plaintiff and the Rhode Island Class have been damaged as the result of BCBS- RI's attempted monopolization of the relevant markets. Count Eighty-Eight (Unjust Enrichment) 1165. Plaintiff repeats and realleges the allegations in all Paragraphs above. 1166. BCBS-RI has benefitted from its unlawful acts through Plaintiff and the Rhode Island Class's overpayments for health insurance premiums. 1167. It would be inequitable for BCBS-RI to be permitted to retain the benefit of these supra-competitive premiums that were conferred by Plaintiff and the Rhode Island Class and retained by BCBS-RI. 1168. In equity, BCBS-RI should not be allowed to retain the economic benefit derived from said improper conduct and should be ordered to pay restitution and pre-judgment interest to Plaintiff and the Rhode Island Class. 268 10 SOUTH CAROLINA (Plaintiff Shred 360, LLC and the South Carolina Class Against Defendants BCBS-SC and BCBSA) Count Eighty-Nine (Contract, Combination, or Conspiracy in Restraint of Trade in Violation of Sherman Act, Section 1) 1169. Plaintiff repeats and realleges the allegations in all Paragraphs above. 1170. The License Agreements, Membership Standards, and Guidelines agreed to by BCBS-SC and BCBSA represent horizontal agreements entered into between BCBS-SC and the 37 other member plans of BCBSA, all of whom are competitors or potential competitors in the market for commercial health insurance. 1171. Each of the License Agreements, Membership Standards, and Guidelines entered into between BCBSA and BCBS-SC represents a contract, combination and/or conspiracy within the meaning of Section 1 of the Sherman Act. 1172. Through the License Agreements, Membership Standards, and Guidelines, BCBSA and BCBS-SC have agreed to divide and allocate the geographic markets for the sale of commercial health insurance into a series of exclusive areas for each of the thirty-eight BCBSA members. By so doing, the BCBSA members (including BCBS-SC) have conspired to restrain trade in violation of Section 1 of the Sherman Act. These market allocation agreements are per se illegal under Section 1 of the Sherman Act. 1173. The market allocation agreements entered into between BCBS-SC and the thirty- seven other BCBSA member plans (executed through the BCBSA License Agreements and related Membership Standards and Guidelines) are anticompetitive. 269 10 1174. BCBS-SC has market power in the sale of full-service commercial health insurance to individuals and small groups in each relevant geographic and product market alleged herein. 1175. Each of the challenged agreements has had substantial and unreasonable anticompetitive effects in the relevant markets, including but not limited to: a. Reducing the number of health insurance companies competing with BCBS- SC throughout South Carolina; b. Unreasonably limiting the entry of competitor health insurance companies into South Carolina; c. Allowing BCBS-SC to maintain and enlarge its market power throughout South Carolina; d. Allowing BCBS-SC to supra-competitively raise the premiums charged to consumers by artificially inflated, unreasonable, and/or supra-competitive amounts; e. Depriving consumers of health insurance of the benefits of free and open competition. 1176. The procompetitive benefits, if any, of the market allocation agreements alleged above do not outweigh the anticompetitive effects of those agreements. 1177. The market allocation agreements in the License Agreements, Membership Standards, and Guidelines unreasonably restrain trade in violation of Section 1 of the Sherman Act. 1178. As a direct and proximate result of the Individual Blue Plans' continuing violations of Section 1 of the Sherman Act described in this Complaint, Plaintiff and other 270 10 members of the South Carolina Class have suffered injury and damages in an amount to be proven at trial. These damages consist of having paid artificially inflated, unreasonable, and/or supra-competitive and higher health insurance premiums to BCBS-SC than they would have paid with increased competition and but for the Sherman Act violations. 1179. Plaintiff and the South Carolina Class seek money damages from BCBS-SC and BCBSA for their violations of Section 1 of the Sherman Act. Count Ninety (MFNs; Sherman Act Section 1 Violation) 1180. Plaintiff repeats and realleges the allegations above. 1181. BCBS-SC has market power in the sale of commercial health insurance to individuals and small groups in each relevant geographic market alleged herein. 1182. The provider agreements BCBS-SC entered into between BCBS-SC and health care providers in South Carolina that contain MFN provisions constitute contracts, combinations, and conspiracies within the meaning of Section 1 of the Sherman Act. 1183. Each of the BCBS-SC provider agreements containing an MFN has had substantial and unreasonable anticompetitive effects in the relevant markets, including but not limited to: e. Raising the prices of health care services to commercial health insurers in competition with BCBS-SC; f. Unreasonably restricting price and cost competition among commercial health insurers by limiting or preventing commercial health insurance in competition with BCBS-SC from obtaining competitive pricing from health care providers; 271 10 g. Unreasonably restricting the ability of health care providers to offer to BCBS- SC's competitors or potential competitors reduced prices for services that the health care providers and insurers consider to be in their mutual interest; h. Depriving consumers of health care services and health insurance of the benefits of free and open competition. 1184. The procompetitive benefits, if any, of the BCBS-SC provider agreements containing MFN provisions do not outweigh the anticompetitive effects of the agreements. 1185. Each agreement between BCBS-SC and a health care provider that contains an MFN unreasonably restrains trade in violation of Section 1 of the Sherman Act. 1186. As a direct and proximate result of the Individual Blue Plans' continuing violations of Section 1 of the Sherman Act described in this Complaint, Plaintiff and other members of the South Carolina Class have suffered injury and damages in an amount to be proven at trial. These damages consist of having paid artificially inflated, unreasonable, and/or supra-competitive and higher health insurance premiums to BCBS-SC than they would have paid but for the Sherman Act violations. 1187. Plaintiff and the South Carolina Class seek money damages from BCBS-SC for its violations of Section 1 of the Sherman Act. Count Ninety-One (Willful Acquisition and Maintenance of a Monopoly in the Relevant Market for Private Health Insurance in Violation of Sherman Act, Section 2) 1188. Plaintiff repeats and realleges the allegations in all Paragraphs above. 1189. BCBS-SC has monopoly power in the individual and small group full-service commercial health insurance market in South Carolina. This monopoly power is evidenced by, among other things, BCBS-SC's ability to enter into MFN agreements with providers, which 272 10 evidences BCBS-SC's ability to control prices and exclude competitors, and BCBS-SC's high market share of the commercial health insurance market, including its increasing market share even as it has raised premiums. 1190. BCBS-SC has abused and continues to abuse its monopoly power to maintain and enhance its market dominance by unreasonably restraining trade, thus artificially inflating the premiums it charges to consumers. 1191. BCBS-SC's conduct constitutes unlawful monopolization and unlawful anti- competitive conduct in the relevant markets in violation of Section 2 of the Sherman Act, and such violation and the effects thereof are continuing and will continue unless injunctive relief is granted. 1192. As a direct and proximate result of the Individual Blue Plans' continuing violations of Section 2 of the Sherman Act described in this Complaint, Plaintiff and other members of the South Carolina Class have suffered injury and damages in an amount to be proven at trial. These damages consist of having paid artificially inflated, unreasonable, and/or supra-competitive and higher health insurance premiums to BCBS-SC than they would have paid but for the Sherman Act violations. 1193. Plaintiff and the South Carolina Class seek money damages from BCBS-SC for its violations of Section 2 of the Sherman Act. Count Ninety-Two (Willful Attempted Monopolization in the Relevant Market for Private Health Insurance in Violation of Sherman Act, Section 2) 1194. Plaintiff repeats and realleges the allegations in all Paragraphs above. 1195. BCBS-SC has acted with the specific intent to monopolize the relevant markets. 273 10 1196. There was and is a dangerous possibility that BCBS-SC will succeed in its attempt to monopolize the relevant markets because BCBS-SC controls a large percentage of those markets already, and further success by BCBS-SC in excluding competitors from those markets will confer a monopoly on BCBS-SC in violation of Section 2 of the Sherman Act. 1197. BCBS-SC's attempted monopolization of the relevant markets has harmed competition in those markets and has caused injury to Plaintiff and the South Carolina Class. Premiums charged by BCBS-SC have been higher than they would have been in a competitive market. 1198. Plaintiff and the South Carolina Class have been damaged as the result of BCBS- SC's attempted monopolization of the relevant markets. Count Ninety-Three (Unjust Enrichment) 1199. Plaintiff repeats and realleges the allegations in all Paragraphs above. 1200. BCBS-SC has benefitted from its unlawful acts through Plaintiff and the South Carolina Class's overpayments for health insurance premiums. 1201. It would be inequitable for BCBS-SC to be permitted to retain the benefit of these supra-competitive premiums that were conferred by Plaintiff and the South Carolina Class and retained by BCBS-SC. 1202. In equity, BCBS-SC should not be allowed to retain the economic benefit derived from said improper conduct and should be ordered to pay restitution and pre-judgment interest to Plaintiff and the South Carolina Class. 274 10 TENNESSEE (Plaintiffs Danny J. Curlin and Amedius, LLC and the Tennessee Class Against Defendants BCBS-TN and BCBSA) Count Ninety-Four (Contract, Combination, or Conspiracy in Restraint of Trade in Violation of Sherman Act, Section 1) 1203. Plaintiffs repeat and reallege the allegations in all Paragraphs above. 1204. The License Agreements, Membership Standards, and Guidelines agreed to by BCBS-TN and BCBSA represent horizontal agreements entered into between BCBS-TN and the 37 other member plans of BCBSA, all of whom are competitors or potential competitors in the market for commercial health insurance. 1205. Each of the License Agreements, Membership Standards, and Guidelines entered into between BCBSA and BCBS-TN represents a contract, combination and/or conspiracy within the meaning of Section 1 of the Sherman Act. 1206. Through the License Agreements, Membership Standards, and Guidelines, BCBSA and BCBS-TN have agreed to divide and allocate the geographic markets for the sale of commercial health insurance into a series of exclusive areas for each of the thirty-eight BCBSA members. By so doing, the BCBSA members (including BCBS-TN) have conspired to restrain trade in violation of Section 1 of the Sherman Act. These market allocation agreements are per se illegal under Section 1 of the Sherman Act. 1207. The market allocation agreements entered into between BCBS-TN and the thirty- seven other BCBSA member plans (executed through the BCBSA License Agreements and related Membership Standards and Guidelines) are anticompetitive. 275 10 1208. BCBS-TN has market power in the sale of full-service commercial health insurance to individuals and small groups in each relevant geographic and product market alleged herein. 1209. Each of the challenged agreements has had substantial and unreasonable anticompetitive effects in the relevant markets, including but not limited to: a. Reducing the number of health insurance companies competing with BCBS- TN throughout Tennessee; b. Unreasonably limiting the entry of competitor health insurance companies into Tennessee; c. Allowing BCBS-TN to maintain and enlarge its market power throughout Tennessee; d. Allowing BCBS-TN to supra-competitively raise the premiums charged to consumers by artificially inflated, unreasonable, and/or supra-competitive amounts; e. Depriving consumers of health insurance of the benefits of free and open competition. 1210. The procompetitive benefits, if any, of the market allocation agreements alleged above do not outweigh the anticompetitive effects of those agreements. 1211. The market allocation agreements in the License Agreements, Membership Standards, and Guidelines unreasonably restrain trade in violation of Section 1 of the Sherman Act. 1212. As a direct and proximate result of the Individual Blue Plans' continuing violations of Section 1 of the Sherman Act described in this Complaint, Plaintiffs and other 276 10 members of the Tennessee Class have suffered injury and damages in an amount to be proven at trial. These damages consist of having paid artificially inflated, unreasonable, and/or supra- competitive and higher health insurance premiums to BCBS-TN than they would have paid with increased competition and but for the Sherman Act violations. 1213. Plaintiffs and the Tennessee Class seek money damages from BCBS-TN and BCBSA for their violations of Section 1 of the Sherman Act. Count Ninety-Five (Willful Acquisition and Maintenance of a Monopoly in the Relevant Market for Private Health Insurance in Violation of Sherman Act, Section 2) 1214. Plaintiffs repeat and reallege the allegations in all Paragraphs above. 1215. BCBS-TN has monopoly power in the individual and small group full-service commercial health insurance market in Tennessee. This monopoly power is evidenced by, among other things, BCBS-TN's high market share of the commercial health insurance market, including its increasing market share even as it has raised premiums. 1216. BCBS-TN has abused and continues to abuse its monopoly power to maintain and enhance its market dominance by unreasonably restraining trade, thus artificially inflating the premiums it charges to consumers. 1217. BCBS-TN's conduct constitutes unlawful monopolization and unlawful anti- competitive conduct in the relevant markets in violation of Section 2 of the Sherman Act, and such violation and the effects thereof are continuing and will continue unless injunctive relief is granted. 1218. As a direct and proximate result of the Individual Blue Plans' continuing violations of Section 2 of the Sherman Act described in this Complaint, Plaintiffs and other members of the Tennessee Class have suffered injury and damages in an amount to be proven at 277 10 trial. These damages consist of having paid artificially inflated, unreasonable, and/or supra- competitive and higher health insurance premiums to BCBS-TN than they would have paid but for the Sherman Act violations. 1219. Plaintiffs and the Tennessee Class seek money damages from BCBS-TN for its violations of Section 2 of the Sherman Act. Count Ninety-Six (Willful Attempted Monopolization in the Relevant Market for Private Health Insurance in Violation of Sherman Act, Section 2) 1220. Plaintiffs repeat and reallege the allegations in all Paragraphs above. 1221. BCBS-TN has acted with the specific intent to monopolize the relevant markets. 1222. There was and is a dangerous possibility that BCBS-TN will succeed in its attempt to monopolize the relevant markets because BCBS-TN controls a large percentage of those markets already, and further success by BCBS-TN in excluding competitors from those markets will confer a monopoly on BCBS-TN in violation of Section 2 of the Sherman Act. 1223. BCBS-TN's attempted monopolization of the relevant markets has harmed competition in those markets and has caused injury to Plaintiffs and the Tennessee Class. Premiums charged by BCBS-TN have been higher than they would have been in a competitive market. 1224. Plaintiffs and the Tennessee Class have been damaged as the result of BCBS- TN's attempted monopolization of the relevant markets and seek money damages from BCBS- TN and BCBSA for their violations of Section 2 of the Sherman Act. Count Ninety-Seven (Arrangement, Contract, Agreement, or Conspiracy to Lessen Competition in Violation of the Tennessee Trade Practices Act, Sec. 47-25-101 et seq.) 1225. Plaintiffs repeat and reallege the allegations in the foregoing paragraphs. 278 10 1226. The License Agreements, Membership Standards, and Guidelines agreed to by BCBS-TN and BCBSA represent horizontal agreements entered into between BCBS-TN and the 37 other member plans of BCBSA, all of whom are competitors or potential competitors in the market for commercial health insurance. 1227. Each of the License Agreements, Membership Standards, and Guidelines entered into between BCBSA and BCBS-TN represents a contract, combination and/or conspiracy within the meaning of the Tennessee Trade Practices Act, Sec. 47-25-101. 1228. Through the License Agreements, Membership Standards, and Guidelines, BCBSA and BCBS-TN have agreed to divide and allocate the geographic markets for the sale of commercial health insurance into a series of exclusive areas for each of the thirty-eight BCBSA members. By so doing, the BCBSA members (including BCBS-TN) have conspired to restrain trade in violation of the Tennessee Trade Practices Act, Sec. 47-25-101. These market allocation agreements are per se illegal under the Tennessee Trade Practices Act, Sec. 47-25-101. 1229. The market allocation agreements entered into between BCBS-TN and the thirty- seven other BCBSA member plans (executed through the BCBSA License Agreements and related Membership Standards and Guidelines) are anticompetitive. 1230. BCBS-TN has market power in the sale of full-service commercial health insurance to individuals and small groups in each relevant geographic and product market alleged herein. 1231. Each of the challenged agreements has had substantial and unreasonable anticompetitive effects in the relevant markets, including but not limited to: a. Reducing the number of health insurance companies competing with BCBS- TN throughout Tennessee; 279 10 b. Unreasonably limiting the entry of competitor health insurance companies into Tennessee; c. Allowing BCBS-TN to maintain and enlarge its market power throughout Tennessee; d. Allowing BCBS-TN to supra-competitively raise the premiums charged to consumers by artificially inflated, unreasonable, and/or supra-competitive amounts; e. Depriving consumers of health insurance of the benefits of free and open competition. 1232. The procompetitive benefits, if any, of the market allocation agreements alleged above do not outweigh the anticompetitive effects of those agreements. 1233. The market allocation agreements in the License Agreements, Membership Standards, and Guidelines unreasonably restrain trade in violation of the Tennessee Trade Practices Act, Sec. 47-25-101. 1234. As a direct and proximate result of the Individual Blue Plans' continuing violations of the Tennessee Trade Practices Act, Sec. 47-25-101 described in this Complaint, open and fair competition has been unreasonably restrained, leading to diminished consumer choices, reduced innovation, and artificially-elevated premiums, and Plaintiffs and other members of the Tennessee Class have suffered and will continue to suffer injury to their business and property. 1235. As a direct and proximate result of the Individual Blue Plans' continuing violations of the Tennessee Trade Practices Act, Sec. 47-25-101, Plaintiffs and other members of the Tennessee Class have suffered injury and damages in an amount to be proven at trial. These 280 10 damages consist of having paid artificially inflated, unreasonable, and/or supra-competitive and higher health insurance premiums to BCBS-TN than they would have paid with increased competition and but for the violations of Tennessee Trade Practices Act, Sec. 47-25-101. 1236. Plaintiffs and the Tennessee Class seek money damages from BCBS-TN and BCBSA for their violations of the Tennessee Trade Practices Act. 1237. BCBS-TN's illegal conduct has substantially affected Tennessee commerce and caused injury to consumers in Tennessee. Specifically, BCBS-TN's understandings, contracts, agreements, trusts, combinations, or conspiracies substantially affected Tennessee commerce as follows: a. Substantial Effects on Tennessee Trade or Commerce: BCBS-TN's conduct has been far-reaching and has substantially affected Tennessee commerce. BCBS-TN health insurance products were purchased by many thousands of enrollees in Tennessee, in all segments of society. b. Substantial Monetary Effects on Tennessee Trade or Commerce: BCBS-TN's conduct is ongoing, and over the Class Period, BCBS-TN collected millions of dollars in health insurance premiums in Tennessee c. Substantially Harmful Effect on the Integrity of the Tennessee Market: The Tennessee market is vulnerable and can be manipulated by conspirators either from outside Tennessee, inside Tennessee, or both. Without enforcing Tennessee's antitrust law to its fullest extent, companies that break the law will remain unpunished, and they will remain able to prey upon Tennessee without consequence. The 281 10 purpose of Tennessee's antitrust laws is to protect the state's trade and commerce affected by anticompetitive conduct. BCBS-TN had shattered this very purpose by its illegal victimization of the market. d. Length of Substantial Effect on Tennessee Commerce: Some arrangements, contracts, agreements, combinations, or conspiracies are short-lived. The conspiracy in this case has lasted for several years and is ongoing, providing BCBS-TN with illegal profits and permitting BCBS-TN to continue victimizing consumers and substantially affect Tennessee commerce. Count Ninety-Eight (Unjust Enrichment) 1238. Plaintiffs repeat and reallege the allegations in all Paragraphs above. 1239. BCBS-TN has benefitted from its unlawful acts through the overpayments for health insurance premiums by Plaintiffs and the Tennessee Class. 1240. It would be inequitable for BCBS-TN to be permitted to retain the benefit of these supra-competitive premiums that were conferred by Plaintiffs and the Tennessee Class and retained by BCBS-TN. 1241. By reason of its unlawful conduct, BCBS-TN should make restitution to Plaintiffs and the Tennessee Class. To the extent Plaintiffs are required to have exhausted administrative remedies before bringing an unjust enrichment claim, exhaustion of any such remedies is not required in this instance because: (a) the issues are of the type that would be appropriate for judicial determination, and (b) applying the doctrine here would result in substantial financial hardship, inequality, and economic inefficiency and would violate public policy. Further, any 282 10 action that might have been taken by Plaintiffs to pursue administrative remedies would have been futile. 1242. In equity, BCBS-TN should not be allowed to retain the economic benefit derived from said improper conduct and should be ordered to pay restitution and pre-judgment interest to Plaintiffs and the Tennessee Class. 283 10 TEXAS (Plaintiff Brett Watts and the Texas Class Against Defendants BCBS-TX and BCBSA) Count Ninety-Nine (Contract, Combination, or Conspiracy in Restraint of Trade in Violation of Sherman Act, Section 1) 1243. Plaintiff repeats and realleges the allegations in all Paragraphs above. 1244. The License Agreements, Membership Standards, and Guidelines agreed to by BCBS-TX and BCBSA represent horizontal agreements entered into between BCBS-TX and the 37 other member plans of BCBSA, all of whom are competitors or potential competitors in the market for commercial health insurance. 1245. Each of the License Agreements, Membership Standards, and Guidelines entered into between BCBSA and BCBS-TX represents a contract, combination and/or conspiracy within the meaning of Section 1 of the Sherman Act. 1246. Through the License Agreements, Membership Standards, and Guidelines, BCBSA and BCBS-TX have agreed to divide and allocate the geographic markets for the sale of commercial health insurance into a series of exclusive areas for each of the thirty-eight BCBSA members. By so doing, the BCBSA members (including BCBS-TX) have conspired to restrain trade in violation of Section 1 of the Sherman Act. These market allocation agreements are per se illegal under Section 1 of the Sherman Act. 1247. The market allocation agreements entered into between BCBS-TX and the thirty- seven other BCBSA member plans (executed through the BCBSA License Agreements and related Membership Standards and Guidelines) are anticompetitive. 284 10 1248. BCBS-TX has market power in the sale of full-service commercial health insurance to individuals and small groups in each relevant geographic and product market alleged herein. 1249. Each of the challenged agreements has had substantial and unreasonable anticompetitive effects in the relevant markets, including but not limited to: a. Reducing the number of health insurance companies competing with BCBS- TX throughout Texas; b. Unreasonably limiting the entry of competitor health insurance companies into Texas; c. Allowing BCBS-TX to maintain and enlarge its market power throughout Texas; d. Allowing BCBS-TX to supra-competitively raise the premiums charged to consumers by artificially inflated, unreasonable, and/or supra-competitive amounts; e. Depriving consumers of health insurance of the benefits of free and open competition. 1250. The procompetitive benefits, if any, of the market allocation agreements alleged above do not outweigh the anticompetitive effects of those agreements. 1251. The market allocation agreements in the License Agreements, Membership Standards, and Guidelines unreasonably restrain trade in violation of Section 1 of the Sherman Act. 1252. As a direct and proximate result of the Individual Blue Plans' continuing violations of Section 1 of the Sherman Act described in this Complaint, Plaintiff and other 285 10 members of the Texas Class have suffered injury and damages in an amount to be proven at trial. These damages consist of having paid artificially inflated, unreasonable, and/or supra- competitive and higher health insurance premiums to BCBS-TX than they would have paid with increased competition and but for the Sherman Act violations. 1253. Plaintiff and the Texas Class seek money damages from BCBS-TX and BCBSA for their violations of Section 1 of the Sherman Act. Count One Hundred (Willful Acquisition and Maintenance of a Monopoly in the Relevant Market for Private Health Insurance in Violation of Sherman Act, Section 2) 1254. Plaintiff repeats and realleges the allegations in all Paragraphs above. 1255. BCBS-TX has monopoly power in the individual and small group full-service commercial health insurance market in Texas. This monopoly power is evidenced by, among other things, BCBS-TX's high market share of the commercial health insurance market, including its increasing market share even as it has raised premiums. 1256. BCBS-TX has abused and continues to abuse its monopoly power to maintain and enhance its market dominance by unreasonably restraining trade, thus artificially inflating the premiums it charges to consumers. 1257. BCBS-TX's conduct constitutes unlawful monopolization and unlawful anti- competitive conduct in the relevant markets in violation of Section 2 of the Sherman Act, and such violation and the effects thereof are continuing and will continue unless injunctive relief is granted. 1258. As a direct and proximate result of the Individual Blue Plans' continuing violations of Section 2 of the Sherman Act described in this Complaint, Plaintiff and other members of the Texas Class have suffered injury and damages in an amount to be proven at trial. 286 10 These damages consist of having paid artificially inflated, unreasonable, and/or supra- competitive and higher health insurance premiums to BCBS-TX than they would have paid but for the Sherman Act violations. 1259. Plaintiff and the Texas Class seek money damages from BCBS-TX for its violations of Section 2 of the Sherman Act. Count One Hundred and One (Willful Attempted Monopolization in the Relevant Market for Private Health Insurance in Violation of Sherman Act, Section 2) 1260. Plaintiff repeats and realleges the allegations in all Paragraphs above. 1261. BCBS-TX has acted with the specific intent to monopolize the relevant markets. 1262. There was and is a dangerous possibility that BCBS-TX will succeed in its attempt to monopolize the relevant markets because BCBS-TX controls a large percentage of those markets already, and further success by BCBS-TX in excluding competitors from those markets will confer a monopoly on BCBS-TX in violation of Section 2 of the Sherman Act. 1263. BCBS-TX's attempted monopolization of the relevant markets has harmed competition in those markets and has caused injury to Plaintiff and the Texas Class. Premiums charged by BCBS-TX have been higher than they would have been in a competitive market. 1264. Plaintiff and the Texas Class have been damaged as the result of BCBS-TX's attempted monopolization of the relevant markets. Count One Hundred and Two (Contract, Combination, or Conspiracy in Restraint of Trade in Violation of Tex. Bus. & Com. Code Ann. § 15.05(a)) 1265. Plaintiff repeats and realleges the allegations in all Paragraphs above. 1266. The License Agreements, Membership Standards, and Guidelines agreed to by BCBS-TX and BCBSA represent horizontal agreements entered into between BCBS-TX and the 287 10 37 other member plans of BCBSA, all of whom are competitors or potential competitors in the market for commercial health insurance. 1267. Each of the License Agreements, Membership Standards, and Guidelines entered into between BCBSA and BCBS-TX represents a contract, combination and/or conspiracy within the meaning of Tex. Bus. & Com. Code Ann. § 15.05(a). 1268. Through the License Agreements, Membership Standards, and Guidelines, BCBSA and BCBS-TX have agreed to divide and allocate the geographic markets for the sale of commercial health insurance into a series of exclusive areas for each of the thirty-eight BCBSA members. By so doing, the BCBSA members (including BCBS-TX) have conspired to restrain trade in violation of Tex. Bus. & Com. Code Ann. § 15.05(a). These market allocation agreements are per se illegal under Tex. Bus. & Com. Code Ann. § 15.05(a). 1269. The market allocation agreements entered into between BCBS-TX and the thirty- seven other BCBSA member plans (executed through the BCBSA License Agreements and related Membership Standards and Guidelines) are anticompetitive. 1270. BCBS-TX has market power in the sale of full-service commercial health insurance to individuals and small groups in each relevant geographic and product market alleged herein. 1271. Each of the challenged agreements has had substantial and unreasonable anticompetitive effects in the relevant markets, including but not limited to: a. Reducing the number of health insurance companies competing with BCBS- TX throughout Texas; b. Unreasonably limiting the entry of competitor health insurance companies into Texas; 288 10 c. Allowing BCBS-TX to maintain and enlarge its market power throughout Texas; d. Allowing BCBS-TX to supra-competitively raise the premiums charged to consumers by artificially inflated, unreasonable, and/or supra-competitive amounts; e. Depriving consumers of health insurance of the benefits of free and open competition. 1272. The procompetitive benefits, if any, of the market allocation agreements alleged above do not outweigh the anticompetitive effects of those agreements. 1273. The market allocation agreements in the License Agreements, Membership Standards, and Guidelines unreasonably restrain trade in violation of Tex. Bus. & Com. Code Ann. § 15.05(a). 1274. As a direct and proximate result of the Individual Blue Plans' continuing violations of Tex. Bus. & Com. Code Ann. § 15.05(a) described in this Complaint, Plaintiff and other members of the Texas Class have suffered injury and damages in an amount to be proven at trial. These damages consist of having paid artificially inflated, unreasonable, and/or supra- competitive and higher health insurance premiums to BCBS-TX than they would have paid with increased competition and but for the violations of Tex. Bus. & Com. Code Ann. § 15.05(a). 1275. Pursuant to Tex. Bus. & Com. Code Ann. § 15.21, Plaintiff and the Texas Class seek money damages from BCBS-TX and BCBSA for their violations of Tex. Bus. & Com. Code Ann. § 15.05(a). 289 10 Count One Hundred and Three (Willful Acquisition and Maintenance of a Monopoly in the Relevant Market for Private Health Insurance in Violation of Tex. Bus. & Com. Code Ann. § 15.05(b)) 1276. Plaintiff repeat and reallege the allegations in all Paragraphs above. 1277. BCBS-TX has monopoly power in the individual and small group full-service commercial health insurance market in Texas. This monopoly power is evidenced by, among other things, BCBS-TX's high market share of the commercial health insurance market, including its increasing market share even as it has raised premiums. 1278. BCBS-TX has abused and continues to abuse its monopoly power to maintain and enhance its market dominance by unreasonably restraining trade, thus artificially inflating the premiums it charges to consumers. 1279. BCBS-TX's conduct constitutes unlawful monopolization and unlawful anti- competitive conduct in the relevant markets in violation of Tex. Bus. & Com. Code Ann. § 15.05(b), and such violation and the effects thereof are continuing and will continue unless injunctive relief is granted. 1280. As a direct and proximate result of the Individual Blue Plans' continuing violations of Tex. Bus. & Com. Code Ann. § 15.05(b) described in this Complaint, Plaintiff and other members of the Texas Class have suffered injury and damages in an amount to be proven at trial. These damages consist of having paid artificially inflated, unreasonable, and/or supra- competitive and higher health insurance premiums to BCBS-TX than they would have paid but for the violations of Tex. Bus. & Com. Code Ann. § 15.05(b). 1281. Pursuant to Tex. Bus. & Com. Code Ann. § 15.21, Plaintiff and the Texas Class seek money damages from BCBS-TX for its violations of Tex. Bus. & Com. Code Ann. § 15.05(b). 290 10 Count One Hundred and Four (Willful Attempted Monopolization in the Relevant Market for Private Health Insurance in Violation of Tex. Bus. & Com. Code Ann. § 15.05(b)) 1282. Plaintiff repeat and reallege the allegations in all Paragraphs above. 1283. BCBS-TX has acted with the specific intent to monopolize the relevant markets. 1284. There was and is a dangerous possibility that BCBS-TX will succeed in its attempt to monopolize the relevant markets because BCBS-TX controls a large percentage of those markets already, and further success by BCBS-TX in excluding competitors from those markets will confer a monopoly on BCBS-TX in violation of Tex. Bus. & Com. Code Ann. § 15.05(b). 1285. BCBS-TX's attempted monopolization of the relevant markets has harmed competition in those markets and has caused injury to Plaintiff and the Texas Class. Premiums charged by BCBS-TX have been higher than they would have been in a competitive market. 1286. Plaintiff and the Texas Class have been damaged as the result of BCBS-TX's attempted monopolization of the relevant markets. Count One Hundred and Five (Unjust Enrichment) 1287. Plaintiff repeats and realleges the allegations in all Paragraphs above. 1288. BCBS-TX has benefitted from its unlawful acts through the overpayments for health insurance premiums by Plaintiff and the Texas Class. 1289. It would be inequitable for BCBS-TX to be permitted to retain the benefit of these supra-competitive premiums that were conferred by Plaintiff and the Texas Class and retained by BCBS-TX. 291 10 1290. By reason of its unlawful conduct, BCBS-TX should make restitution to Plaintiff and the Texas Class. Any action that might have been taken by Plaintiff to pursue administrative remedies would have been futile. 1291. In equity, BCBS-TX should not be allowed to retain the economic benefit derived from said improper conduct and should be ordered to pay restitution and pre-judgment interest to Plaintiff and the Texas Class. 292 10 RELIEF REQUESTED WHEREFORE, Plaintiffs request that this Court: a. Determine that this action may be maintained as a class action under Fed. R. Civ. P. 23; b. Enjoin BCBSA and each of the Individual Blue Plans from entering into, or from honoring or enforcing, any agreements that restrict the territories or geographic areas in which any BCBSA member plan may compete; c. Adjudge and decree that BCBSA and each of the Individual Blue Plans have conspired to monopolize in violation of Section 2 of the Sherman Act and award the Nationwide Class damages in the form of three times the amount by which premiums charged by the Individual Blue Plans have been artificially inflated above their competitive levels during the Class Period; d. Adjudge and decree that BCBSA, BCBS-AL, BCBS-AR, BC-CA, BS-CA, BCBS-FL, BCBS-HI, BCBS-IL, BCBS-LA, BCBS-MI, BCBS-MS, BCBS-MO, BCBS-KC, BCBS-NH, BCBS-NC, Highmark BCBS, BC-Northeastern PA, Independence BC, BCBS-RI, BCBS-SC, BCBS-TN, and BCBS-TX have violated both Section 1 and Section 2 of the Sherman Act; e. Award Plaintiffs American Electric Motor Services, Inc. and CB Roofing, LLC and the Alabama Class damages in the form of three times the amount by which premiums charged by BCBS-AL have been artificially inflated above their competitive levels during the Class Period; f. Award Plaintiffs Linda Mills and Frank Curtis and the Arkansas Class damages in the form of three times the amount by which premiums charged by BCBS-AR 293 10 have been artificially inflated above their competitive levels during the Class Period; g. Award Plaintiff Judy Sheridan and the California Class damages in the form of three times the amount by which premiums charged by BC-CA and BS-CA have been artificially inflated above their competitive levels during the Class Period; h. Adjudge and decree that BCBSA, BC-CA, and BS-CA have violated the Cartwright Act, California Business and Professions Code §§16720, et seq. and 16727 and the California Business and Professions Code §17200 and award Plaintiff Judy Sheridan and the California Class appropriate damages and relief; i. Enjoin BS-CA from entering into, or from honoring or enforcing, any agreements that restrict the territories or geographic areas in which any BCBSA member plan may compete; j. Award Plaintiff Jennifer Ray Davidson and the Florida Class damages in the form of three times the amount by which premiums charged by BCBS-FL have been artificially inflated above their competitive levels during the Class Period; k. Adjudge and decree that BCBSA and BCBS-FL have violated Fla. Stat. §§ 542.18, 542.19, and 542.22 and award Plaintiff Jennifer Ray Davidson and the Florida Class appropriate damages and relief; l. Award Plaintiffs Lawrence W. Cohn, AAL, ALC and Saccoccio & Lopez and the Hawai'i Class damages in the form of three times the amount by which premiums charged by BCBS-HI have been artificially inflated above their competitive levels during the Class Period; 294 10 m. Adjudge and decree that BCBSA and BCBS-HI have violated H.R.S. §§ 480-4, 480-2, and 480-9 and award Plaintiffs Lawrence W. Cohn, AAL, ALC and Saccoccio & Lopez and the Hawai'i Class appropriate damages and relief; n. Award Plaintiffs Monika Bhuta, Michael E. Stark, Falcon Picture Group LLC and the Illinois Class damages in the form of three times the amount by which premiums charged by BCBS-IL have been artificially inflated above their competitive levels during the Class Period; o. Adjudge and decree that BCBSA and BCBS-IL have violated 740 ILCS 10/3 et seq. and award Plaintiffs Monika Bhuta, Michael E. Stark, Falcon Picture Group LLC and the Illinois Class appropriate damages and relief; p. Award Plaintiffs Renee E. Allie and Galactic Funk Touring, Inc. and the Louisiana Class damages in the form of three times the amount by which premiums charged by BCBS-LA have been artificially inflated above their competitive levels during the Class Period; q. Adjudge and decree that BCBSA and BCBS-LA have violated La.R.S. 51:122-23 and award Plaintiffs Renee E. Allie and Galactic Funk Touring, Inc. and the Louisiana Class appropriate damages and relief; r. Award Plaintiff John G. Thompson and the Michigan Class damages in the form of three times the amount by which premiums charged by BCBS-MI have been artificially inflated above their competitive levels during the Class Period; s. Adjudge and decree that BCBSA and BCBS-MI have violated the Michigan Antitrust Reform Act §§ 445.772, 445.773 and award Plaintiff John G. Thompson and the Michigan Class appropriate damages and relief; 295 10 t. Award Plaintiffs Harry M. McCumber and Gaston CPA Firm and the Mississippi Class damages in the form of three times the amount by which premiums charged by BCBS-MS have been artificially inflated above their competitive levels during the Class Period; u. Adjudge and decree that BCBSA and BCBS-MS have violated Mississippi Antitrust Act, Sec. 75-21-1 and award Plaintiffs Harry M. McCumber and Gaston CPA Firm and the Mississippi Class appropriate damages and relief; v. Award Plaintiff Jeffrey S. Garner and the Missouri Class damages in the form of three times the amount by which premiums charged by BCBS-MO and BCBS-KC have been artificially inflated above their competitive levels during the Class Period; w. Adjudge and decree that BCBSA, BCBS-MO, and BCBS-KC have violated Missouri Antitrust Law §§ 416.031.1, 416.031.2 and award Plaintiff Jeffrey S. Garner and the Missouri Class appropriate damages and relief; x. Award Plaintiffs Erik Barstow and GC/AAA Fences, Inc. and the New Hampshire Class damages in the form of three times the amount by which premiums charged by BCBS-NH have been artificially inflated above their competitive levels during the Class Period; y. Adjudge and decree that BCBSA and BCBS-NH have violated N.H. Rev. Stat. Ann. §§ 356:2, 356:3 and award Plaintiffs Erik Barstow and GC/AAA Fences, Inc. and the New Hampshire Class appropriate damages and relief; z. Award Plaintiffs Keith O. Cerven, Teresa M. Cerven, and SGHI Corp. and the North Carolina Class damages in the form of three times the amount by which 296 10 premiums charged by BCBS-NC have been artificially inflated above their competitive levels during the Class Period; aa. Adjudge and decree that BCBSA and BCBS-NC have violated North Carolina General Statute Sections 75-1, 75-1.1, and 58-63-10 and award Plaintiffs Keith O. Cerven, Teresa M. Cerven, and SGHI Corp. and the North Carolina Class appropriate damages and relief; bb. Award Plaintiffs Kathleen Scheller and Iron Gate Technology, Inc. and the Western Pennsylvania Class damages in the form of three times the amount by which premiums charged by Highmark BCBS have been artificially inflated above their competitive levels during the Class Period; cc. Award Plaintiff Nancy Thomas and the Rhode Island Class damages in the form of three times the amount by which premiums charged by BCBS-RI have been artificially inflated above their competitive levels during the Class Period; dd. Adjudge and decree that BCBSA and BCBS-RI have violated Rhode Island General Laws §§ 6-36-4, 6-36-5 and award Plaintiff Nancy Thomas and the Rhode Island Class appropriate damages and relief; ee. Award Plaintiff Shred 360, LLC and the South Carolina Class damages in the form of three times the amount by which premiums charged by BCBS-SC have been artificially inflated above their competitive levels during the Class Period; ff. Award Plaintiffs Danny J. Curlin and Amedius, LLC and the Tennessee Class damages in the form of three times the amount by which premiums charged by BCBS-TN have been artificially inflated above their competitive levels during the Class Period; 297 10 gg. Adjudge and decree that BCBSA and BCBS-TN have violated Tennessee Trade Practices Act, Sec. 47-25-101 and award Plaintiffs Danny J. Curlin and Amedius, LLC and the Tennessee Class appropriate damages and relief; hh. Award Plaintiff Brett Watts and the Texas Class damages in the form of three times the amount by which premiums charged by BCBS-TX have been artificially inflated above their competitive levels during the Class Period; ii. Adjudge and decree that BCBSA and BCBS-TX have violated Tex. Bus. & Com. Code Ann. §§ 15.05(a), 15.05(b), and 15.21 and award Plaintiff Brett Watts and the Texas Class appropriate damages and relief; jj. Adjudge and decree that BCBS-AR, BS-CA, BCBS-HI, BCBS-IL, BCBS-NC, BCBS-MS, BCBS-MO, BCBS-KC, BCBS-NH, BCBS-RI, BCBS-SC, BCBS-TN, and BCBS-TX have been unjustly enriched by their wrongful conduct, and award restitution to the related Plaintiffs and Classes; kk. Reform any agreements between BCBS-NC and health care providers, Highmark BCBS and health care providers, and BCBS-SC and health care providers, so as to strike any MFN clauses as void and unenforceable; ll. Award costs and attorneys' fees to Plaintiffs; mm. For a trial by jury; and nn. Award any such other and further relief as may be just and proper. This the 1st of July, 2013. 298 10 Respectfully submitted, /s/ David Boies David Boies William A. Isaacson BOIES, SCHILLER & FLEXNER LLP BOIES, SCHILLER & FLEXNER LLP 333 Main Street 5301 Wisconsin Avenue NW Armonk, NY 10504 Washington, DC 20015 Tel: (914) 749-8200 Tel: (202) 237-2727 Fax: (914) 749-8200 Fax: (202) 237-6131 dboies@bsfllp.com wisaacson@bsfllp.com Michael Hausfeld Gregory Davis HAUSFELD LLP DAVIS & TALIAFERRO, LLC 1700 K Street NW, Suite 650 7031 Halcyon Park Drive Washington, DC 20006 Montgomery, AL 36117 Tel: (202) 540-7200 Tel: (334) 832-9080 Fax: (202) 540-7201 Fax: (334) 409-7001 mhausfeld@hausfeldllp.com gldavis@knology.net Subscriber Plaintiffs' Co-Lead Counsel Megan Jones HAUSFELD LLP 44 Montgomery Street, Suite 3400 San Francisco, CA 94104 Tel: (415) 744-1970 Fax: (415) 358-4980 Chris T. Hellums mjones@hausfeldllp.com PITTMAN, DUTTON & HELLUMS, P.C. 2001 Park Place N, 1100 Park Place Tower Kathleen Chavez Birmingham, AL 35203 FOOTE, MIELKE, CHAVEZ & O'NEIL, LLC Tel: (205) 322-8880 10 West State Street, Suite 200 Fax: (205) 328-2711 Geneva, IL 60134 chrish@pittmandutton.com Tel: (630) 797-3339 Fax: (630) 232-7452 Subscriber Plaintiffs' Local Facilitating kcc@fmcolaw.com Counsel Cyril V. Smith ZUCKERMAN SPAEDER, LLP 100 East Pratt Street, Suite 2440 Baltimore, MD 21202-1031 Tel: (410) 949-1145 Fax: (410) 659-0436 csmith@zuckerman.com Subscriber Plaintiffs' Steering Committee 299 10 Eric L. Cramer Douglas Dellaccio BERGER & MONTAGUE, P.C. CORY WATSON CROWDER & DEGARIS, P.C. 1622 Locust Street 2131 Magnolia Avenue, Suite 200 Philadelphia, PA 19103 Birmingham, AL 32505 Tel: 1-800-424-6690 Tel: (205) 328-2200 Fax: (215) 875-4604 Fax: (205) 324-7896 ecramer@bm.net ddellaccio@cwcd.com Tanya Chutkan Chris Cowan Karen Dyer THE COWAN LAW FIRM Hamish P.M. Hume 209 Henry Street Kathleen Kiernan Dallas, TX 74226-1819 BOIES, SCHILLER & FLEXNER LLP Tel: (214) 826-1900 5301 Wisconsin Avenue NW Fax: (214) 826-8900 Washington, DC 20015 chris@cowanlaw.net Tel: (202) 237-2727 Fax: (202) 237-6131 Edwin J. Kilpela, Jr. tchutkan@bsfllp.com Benjamin Sweet kdyer@bsfllp.com DEL SOLE CAVANAUGH STROYD LLC hhume@bsfllp.com 200 First Avenue, Suite 300 kkiernan@bsfllp.com Pittsburgh, PA 15222 Tel: (412) 261-2393 Patrick Cafferty Fax: (412) 261-2110 CAFFERTY CLOBES MERIWETHER & ekilpela@dsclaw.com SPRENGEL LLP bsweet@dsclaw.com 101 North Main Street, Suite 565 Ann Arbor, MI 48104 Robert M. Foote Tel: (734) 769-2144 FOOTE, MIELKE, CHAVEZ & O'NEIL, LLC Fax: (734) 769-1207 10 West State Street, Suite 200 pcafferty@caffertyclobes.com Geneva, IL 60134 Tel: (630) 797-3339 Bryan Clobes Fax: (630) 232-7452 Ellen Meriwether rmf@fmcolaw.com CAFFERTY CLOBES MERIWETHER & SPRENGEL LLP Charles T. Caliendo 1101 Market Street, Suite 2650 GRANT & EISENHOFER Philadelphia, PA 19107 485 Lexington Avenue Tel: (215) 864-2800 New York, NY 10017 Fax: (215) 864-2810 Tel: (646) 722-8500 bclobes@caffertyclobes.com Fax: (646) 722-8501 emeriwether@caffertyclobes.com ccaliendo@gelaw.com 300 10 Robert Eisler Brent Hazzard GRANT & EISENHOFER HAZZARD LAW, LLC 123 Justison Street 447 Northpark Drive Wilmington, DE 19801 Ridgeland, MS 39157 Tel: (302) 622-7000 Tel: (601) 977-5253 Fax: (302) 622-7100 Fax: (601) 977-5236 reisler@gelaw.com brenthazzard@yahoo.com David Guin John Saxon Tammy Stokes JOHN D. SAXON, P.C. GUIN, STOKES & EVANS, LLC 2119 3rd Avenue North The Financial Center Birmingham, AL 35203-3314 505 20th Street North, Suite 1000 Tel: (205) 324-0223 Birmingham, AL 35203 Fax: (205) 323-1583 Tel: (205) 226-2282 jsaxon@saxonattorneys.com Fax: (205) 226-2357 davidg@gseattorneys.com Lawrence Jones tammys@gseattorneys.com JONES WARD PLC 312 South Fourth Street, Sixth Floor Daniel Gustafson Louisville, Kentucky 40202 Daniel C. Hedlund Tel: (502) 882-6000 GUSTAFSON GLUEK PLLC larry@jonesward.com 120 South Sixth Street, Suite 2600 Minneapolis, MN 55402 Andrew Lemmon Tel: (612) 333-8844 LEMMON LAW FIRM Fax: (612) 339-6622 650 Poydras Street, Suite 2335 dgustafson@gustafsongluek.com New Orleans, LA 70130 dhedlund@gustafsongluek.com Tel: (504) 581-5644 Fax: (504) 581-2156 William Butterfield andrew@lemmonlawfirm.com HAUSFELD LLP 1700 K Street NW, Suite 650 Virginia Buchanan Washington, DC 20006 LEVIN PAPANTONIO THOMAS MITCHELL Tel: (202) 540-7200 RAFFERTY & PROCTOR, P.A. Fax: (202) 540-7201 316 South Baylen Street, Suite 600 wbutterfield@hausfeldllp.com Pensacola, FL 32502 Tel: (850) 435-7000 Arthur Bailey Fax: (850) 435-7020 HAUSFELD LLP vbuchanan@levinlaw.com 44 Montgomery Street, Suite 3400 San Francisco, CA 94104 Tel: (415) 744-1970 Fax: (415) 358-4980 abailey@hausfeldllp.com 301 10 Robert Methvin Patrick W. Pendley James M. Terrell Christopher Coffin MCCALLUM, METHVIN & TERRELL, P.C. PENDLEY, BAUDIN & COFFIN, LLP The Highland Building Post Office Drawer 71 2201 Arlington Avenue South Plaquemine, LA 70765 Birmingham, AL 35205 Tel: (225) 687-6369 Tel: (205) 939-0199 pwpendley@pbclawfirm.com Fax: (205) 939-0399 ccoffin@pbclawfirm.com rgm@mmlaw.net jterrell@mmlaw.net Edgar D. Gankendorff Eric R.G. Belin Michael McGartland PROVOSTY & GANKENDORFF, LLC MCGARTLAND & BORCHARDT LLP 650 Poydras Street, Suite 2700 1300 South University Drive, Suite 500 New Orleans, LA 70130 Fort Worth, TX 76107 Tel: (504) 410-2795 Tel: (817) 332-9300 Fax: (504) 410-2796 Fax: (817) 332-9301 egankendorff@provostylaw.com mike@attorneysmb.com ebelin@provostylaw.com H. Lewis Gillis Richard Rouco MEANS GILLIS LAW, LLC QUINN, CONNOR, WEAVER, DAVIES & 3121 Zelda Court ROUCO LLP Montgomery, AL 36106 2700 Highway 280 East, Suite 380 Tel: 1-800-626-9684 Birmingham, AL 35223 hlgillis@tmgslaw.com Tel: (205) 870-9989 Fax: (205) 870-9989 David J. Hodge rrouco@qcwdr.com MORRIS, KING & HODGE 200 Pratt Avenue NE Garrett Blanchfield Huntsville, AL 35801 REINHARDT, WENDORF & BLANCHFIELD Tel: (256) 536-0588 E-1250 First National Bank Building Fax: (256) 533-1504 332 Minnesota Street lstewart@alinjurylaw.com St. Paul, MN 55101 Tel: (651) 287-2100 Dianne M. Nast Fax: (651) 287-2103 NASTLAW LLC g.blanchfield@rwblawfirm.com 1101 Market Street, Suite 2801 Philadelphia, PA 19107 Jason Thompson Tel: (215) 923-9300 SOMMERS SCHWARTZ Fax: (215) 923-9302 One Towne Square, 17th Floor dnast@nastlaw.com Southfield, MI 48076 Tel: (248) 355-0300 jthompson@sommerspc.com 302 10 Larry McDevitt David Wilkerson VAN WINKLE LAW FIRM 11 North Market Street Asheville, NC 28801 Tel: (828) 258-2991 lmcdevitt@vwlawfirm.com dwilkerson@vwlawfirm.com Carl S. Kravitz ZUCKERMAN SPAEDER LLP 1800 M Street NW, Suite 1000 Washington, DC 20036-5807 Tel: (202) 778-1800 Fax: (202) 822-8106 ckravitz@zuckerman.com Subscriber Plaintiffs' Committee Chairs and Members 303 10

MOTION to Dismiss for Lack of Jurisdiction by Triple S Salud, Inc.

Case 2:13-cv-20000-RDP Document 107 Filed 09/30/13 Page 1 of 24 FILED 2013 Sep-30 PM 02:57 U.S. DISTRICT COURT N.D. OF ALABAMA IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ALABAMA SOUTHERN DIVISION) IN RE: BLUE CROSS BLUE SHIELD) Master File No. 2:13-CV-20000-RDP ANTITRUST LITIGATION) (MDL No. 2406)) This document relates to all cases.)) TRIPLE-S SALUD’S MOTION TO DISMISS CONSOLIDATED AMENDED PROVIDER AND SUBSCRIBER COMPLAINTS AND MEMORANDUM OF LAW IN SUPPORT THEREOF COMES NOW Triple S Salud, Inc., through the undersigned counsel, and respectfully states and prays as follows: I. SUMMARY OF ARGUMENT In addition to the arguments in support of dismissal stated in the Motions to Dismiss filed today by all defendants, Triple S Salud, Inc. ("TSS") hereby requests dismissal of the Consolidated Amended Provider and Subscriber Complaints for lack of personal jurisdiction under Fed. R. Cv. P. 12(b)(2) and for improper venue under Fed. R. Cv. P. 12(b)(3). The allegations, if any, against TSS do not describe a conduct that is subject to the long-arm statutes of any of the transferor forums where it has been sued as part of this antitrust litigation. Furthermore, TSS does not have the minimum contacts that are required by due process for in personam jurisdiction to be exercised on it. TSS does not conduct or solicit and has not conducted or solicited business in any of the transferor forums; TSS is not licensed to do business in any of the transferor forums; TSS does not insure any residents of the transferor forums; TSS does not conduct marketing activities in any of the transferor forums; TSS does not have offices or agents in any of the transferor forums; and it does not own any property in any of Case 2:13-cv-20000-RDP Document 107 Filed 09/30/13 Page 2 of 24 the transferor forums. In fact, plaintiffs do not allege any acts by which TSS could be considered to have availed itself for any purpose of any of the forums where the company was sued in this litigation. Moreover, litigating the case in the transferor forums would impose constitutionally significant burdens on TSS that outweigh any possible federal interest in litigating the dispute in those forums. Finally, under the applicable statues, none of the transferor forums is a proper venue to bring an action against TSS. II. APPLICABLE LEGAL STANDARDS A. PLAINTIFF BEARS THE BURDEN OF ESTABLISHING THE EXISTENCE OF PERSONAL JURISDICTION OVER AN OUT-OF-STATE DEFENDANT The plaintiff has the burden of establishing a prima facie case of personal jurisdiction. Stubbs v. Wyndham Nassau Resorts, 447 F. 3d 1357, 1360 (11th Cir. 2006). If such showing is made by plaintiffs and, as in this case, defendant submits affidavits stating a lack of personal jurisdiction with non-conclusory statements, the burden shifts back to plaintiff to produce evidence supporting personal jurisdiction over defendant. Id. Where defendant’s affidavits conflict with plaintiff’s allegations and supporting documents, all reasonable inferences are construed in plaintiff’s favor. Id.; Ex parte Excelsior Financial, Inc., 42 So. 3d 96, 103 (Ala. 2010). As explained below, plaintiffs in this case do not allege or provide any basis whatsoever for personal jurisdiction over TSS in any of the chosen forums. Therefore, not even a prima facie case of personal jurisdiction is established by plaintiffs. Furthermore, TSS’s declaration under penalty of perjury (Exh. 1) clearly shows that the requirements for personal jurisdiction are not met. B. TRANSFEREE COURT EXERCISES PERSONAL JURISDICTION ONLY TO SAME EXTENT AS TRANSFEROR COURT. 2 Case 2:13-cv-20000-RDP Document 107 Filed 09/30/13 Page 3 of 24 It is well settled that the fact that a case is transferred to another judicial district pursuant to the multidistrict rules does not alter the requirement of personal jurisdiction in the transferor court where the action was originally brought. In re Norplant Contraceptive Products Liability Litigation, 915 F. Supp. 845, 852 (E.D. Texas 1996); In re Showa Denko, 953 F.2d 162, 165 (5th Cir. 1992). In MDL proceedings, the forum state is the district court where the action was originally filed. In re Ski Train Fire, 343 F. Supp. 2d 208, 213 (S.D.N.Y. 2004). Accordingly, personal jurisdiction is determined by the law of the transferor forum. Parker v. Analytic Biosurgical Solutions, ___ F. Supp. 2d ___, 2013 WL 3894992 at *2 (S.D.W.V. 2013); In re Sterling & Foster Co., 222 F. Supp. 2d 289, 300 (E.D.N.Y. 2002). The existence of personal jurisdiction must be determined on a case-by-case basis, since an MDL Court may only exercise personal jurisdiction over defendants in individual cases where the transferor court or courts could exercise such jurisdiction. In re Telectronics Pacing Systems, Inc., 953 F. Supp. 909, 914 (S.D. Ohio 1997). C. PERSONAL JURISDITION UNDER LAW OF TRANSFEROR COURTS TSS was sued on the Northern District of Alabama, the Eastern District of Louisiana, the District of Minnesota, the District of South Carolina, and the Southern District of Texas.1 Therefore, the question of whether these courts may exercise personal jurisdiction as to TSS is guided by the law of these states for each particular case in which TSS has been brought as a defendant. This is also relevant in the analysis of federal question issues discussed further below. 1. Alabama 1 Conway v. BCBS-AL et al, 2:12-cv-02532 (N.D. Alabama); Surgical Center for Excellence v. BCB-ALS et al, 5:12-cv-00388 (N.D. Florida); Plessy v. BCBS-AL et al, 2:12-cv-02410 (E.D. Louisiana); Sult v. BCBS-AL et al, 13-cv-00033 (D. Minnesota); Heritage Medical Partners, LLC v. BCBS-AL et al, 9:13-cv-00081 (D. South Carolina); Chiropractic Plus, P.C. v. BCBS-TX et al, 13-cv-00234 (S.D. Texas). TSS requests dismissal of any additional cases on which it is been brought as defendant in an out-of-state forum. As discussed below, TSS does not perform any activities outside the Commonwealth of Puerto Rico that could be held to constitute minimum contacts with any court outside said jurisdiction, and the federal interests involved do not outweigh the burden that would be imposed on TSS by forcing it to litigate in plaintiffs’ chosen forums. 3 Case 2:13-cv-20000-RDP Document 107 Filed 09/30/13 Page 4 of 24 Alabama’s long-arm statute is found in Rule 4.2(b) of the Alabama Rules of Civil Procedure which states an appropriate basis for service of process of a person or entity outside of Alabama "when the person or entity has such contacts with [Alabama] that the prosecution against the person or entity in [Alabama] is not inconsistent with the constitution of [Alabama] or the Constitution of the United States." Since Alabama’s long-arm statute extends personal jurisdiction of Alabama courts to the limits of due process under the federal laws and constitution, "the traditional two-step personal jurisdiction inquiry of assessing the propriety of jurisdiction under the forum state’s long-arm statute, and then determining whether the exercise of jurisdiction would violate the Due Process Clause of the Fourteenth Amendment, collapses into a single step in Alabama." First Metro Bank v. Central Bank, 904 F. Supp. 2d 1215, 1223 (N.D. Alabama 2012). Therefore, the question before the court ruling on the personal jurisdiction issue is whether the exercise of jurisdiction over the particular defendant comports federal with constitutional due process. Brewer v. Transunion, L.L.C., 453 F. Supp. 2d 1346, 1349 (S.D. Alabama 2006). The due process analysis of the exercise of personal jurisdiction "involves a two-step process: first, the court must determine whether the defendant has sufficient minimum contacts with the forum state; second, the court must consider whether exercising personal jurisdiction would offend traditional notions of fair play and substantial justice." Simmons v. Big No. 1 Motor Sports, Inc., 908 F. Supp. 2d 1224, 1227 (N.D. Alabama 2012) (internal quotations omitted). After all, a defendant must have fair warning that a particular activity may subject it to the jurisdiction of the courts of a particular state. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985). 4 Case 2:13-cv-20000-RDP Document 107 Filed 09/30/13 Page 5 of 24 In terms of the minimum contacts analysis, personal jurisdiction may be general, in which case defendant’s contacts with the forum state are unrelated to the particular claim, or specific, in which case such contacts are related to the relevant claim. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 (1984). But there is an analytical difference between the two. "The due process requirements for general personal jurisdiction are more stringent than for specific personal jurisdiction, and require a showing of continuous and systematic general business contacts between the defendant and the forum state." Brewer v. Transunion, L.L.C., supra, at p. 48, citing Consolidated Dev. Corp. v. Sheritt, Inc., 216 F. 3d 1286, 1286, 1292 (11th Cir. 2000). On the other hand, to constitute minimum contacts for purposes of specific jurisdiction, 1) the contacts must be related to the plaintiff’s cause of action or have given rise to it; 2) the contacts must involve an act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum; and 3) the contacts must be such that the defendant should reasonably anticipate being haled into court in the forum state. Thomas v. Mitsubishi Motor North America, 436 F. Supp. 2d 1250, 1253 (M.D. Alabama 2006), citing Vermeulen v. Renault, 985 F. 2d 1534, 1546 (11th Cir. 1993). In performing this analysis, it must be remembered that the conduct at issue is that of the defendant and that "[n]o plaintiff can establish jurisdiction over a defendant through his own actions." Ruiz de Molina v. Merritt & Furman Ins. Agency, 207 F. 3d 1351, 1356 (11th Cir. 2000). In evaluating the second inquiry of the due process analysis (if the exercise of personal jurisdiction comports with fair play and substantial justice), a court must take into account the following factors: 1) the burden on the defendant in defending the lawsuit; 2) the forum state’s interest in adjudicating the dispute; 3) the plaintiff’s interest in obtaining convenient and effective relief; 4) the interstate judicial system’s interest in obtaining the most efficient 5 Case 2:13-cv-20000-RDP Document 107 Filed 09/30/13 Page 6 of 24 resolution of controversies; and 5) the shared interest of the states in furthering fundamental substantive social policies. Madara v. Hall, 916 F. 2d 1510, 1517 (11th Cir. 1990). 2. Louisiana Louisiana’s long-arm statute, LA Revised Statutes T. 13 § 3201, extends personal jurisdiction of its courts to the limits permitted under the due process clause of the Fourteenth Amendment of the U.S. Constitution. Therefore "the sole inquiry into the jurisdiction over a nonresident is a one-step analysis of the constitutional due process requirements." In re Chinese Manufactured Dywall, 894 F. Supp. 2d 819, 896 (E.D. La. 2012) (internal quotations omitted). As stated before, said analysis requires establishing that defendant has minimum contacts with the forum and that the exercise of personal jurisdiction does not offend notions of fair play and substantial justice. Ruppert v. George Kellet & Sons, Inc., 996 So. 2d 501, 506 (App. La. 2008). 3. Minnesota Minnesota courts also exercise jurisdiction under the state’s long-arm statute to the limits of the federal due process requirements. Therefore, "a court in Minnesota need only evaluate whether the requirements of due process are satisfied." Westley v. Mann, 896 F. Supp. 2d 775, 789 (D. Minn. 2012). When analyzing the fairness of exercising personal jurisdiction over a nonresident defendant, Minnesota courts use a five factor test: 1) quantity of contacts with the forum state; 2) quality and nature of contacts; 3) connection between the cause of action and the contacts; 4) the state’s interest in providing a forum; and 5) convenience to the parties. St. Paul Fire & Marine Ins. Co. v. Courtney Enterprises, 108 F. Supp. 2d 1057, 1060 (D. Minn 2000); KSTP-FM, LLC v. Specialized Communications, Inc., 602 N.W. 2d 919, 923 (App. Minn. 1999). 4. South Carolina 6 Case 2:13-cv-20000-RDP Document 107 Filed 09/30/13 Page 7 of 24 South Carolina’s long arm statute, S.C. Code Ann. § 36-2-803, has also been interpreted "to reach the outer bounds permitted by the Due Process Clause", causing the statutory inquiry to merge with the constitutional inquiry that requires that the nonresident defendant has minimum contacts with South Carolina and that the exercise of jurisdiction does not offend the traditional notions of fair play and substantial justice. ESAB Group, Inc. v. Centricut, Inc., 126 F. 3d 617, 623 (4th Cir. 1997). 5. Texas Texas’ long arm statute, Tx Civ Prac & Rem § 17402, provides a non-exhaustive list of "doing business" activities of non-residents, to wit: 1) contracting by mail or otherwise with a Texas resident and either party is to perform the contract in whole or in part in this state; 2) committing a tort in whole or in part in this state; or 3) recruiting Texas residents, directly or through an intermediary located in this state, for employment inside or outside this state. Keenan v. Aguilar, 391 S.W. 3d 620, 624 (App. Texas 2012). However, Texas’ long-arm statute reaches as far as the federal constitutional requirements of due process allow. Dominion Gas Ventures, Inc. v. N.L.S., Inc., 889 F. Supp. 265, 267 (N.D. Texas 1995). Therefore, the jurisdictional inquiry under the long-arm statute collapses into a single due process inquiry. Freudensprung v. Offshore Technical Services, Inc., 186 F. Supp. 2d 716, 720 (S.D. Texas 2002). In sum, any attempt to exercise personal jurisdiction over a non-resident defendant (TSS) in any of the forums chosen by plaintiffs must comport with the due process requirements of the U.S. Constitution. D. FEDERAL QUESTION CONSIDERATIONS The Eleventh Circuit has stated that when a federal statute provides the basis for jurisdiction, "the constitutional limits of due process derive from the Fifth, rather than the 7 Case 2:13-cv-20000-RDP Document 107 Filed 09/30/13 Page 8 of 24 Fourteenth, Amendment." See Republic of Panama v. BCCI Holdings, 119 F. 3d 935, 942 (11th Cir. 1997). The Republic of Panama case spells out the applicable standard as follows: When a defendant makes a showing of constitutionally significant inconvenience, jurisdiction will comport with due process only if the federal interest in litigating the dispute in the chosen forum outweighs the burden imposed on the defendant. In evaluating the federal interest, courts should examine the federal policies advanced by the statute, the relationship between nationwide service of process and the advancement of these policies, the connection between the exercise of jurisdiction in the chosen forum and the plaintiff’s vindication of his federal right, and concerns of judicial efficiency and economy. Id., at p. 948. However, in determining compliance with due process in the exercise of personal jurisdiction pursuant to a federal statute action, courts should consider the factors used in determining fairness under the Fourteenth Amendment, although the same must not be applied mechanically. Id. at p. 946. Therefore, the minimum contacts analysis along with the fairness and justice analysis under the Fourteenth Amendment apply, even though "the due process concerns of the fifth and fourteenth amendments are not precisely parallel." Id., at 946, citing In re Chase & Sanborn Corp., 835 F. 2d 1341, 1345 n. 9 (11th Cir. 1988). It must be noticed, however, that before the Republic of Panama case, the Eleventh Circuit had already considered the question of exercise of personal jurisdiction in an antitrust case and had applied the due process analysis under the Fourteenth, and not the Fifth, Amendment. See Delong Equipment Co. v. Washington Mills Abrasive Co., 840 F. 2d 843, 853-854 (11th Cir. 1988). In Delong, the Court applied the U.S. Supreme Court standard of "constitutionally sufficient relationship" of nonresident defendant with the forum under which minimum contacts and traditional notions of fair play and substantial justice are analyzed. The Court stated that "[t]he crucial issue is whether [nonresident defendant’s] contacts with the forum state are substantial enough that they reasonably could expect to be haled before a [forum] court.". Id., at p. 853 (internal quotations omitted). 8 Case 2:13-cv-20000-RDP Document 107 Filed 09/30/13 Page 9 of 24 Since this is an antitrust case, the jurisdictional analysis made in Delong must be applied. Furthermore, if the ruling in Republic of Panama, supra, regarding the applicable due process analysis conflicts with Delong, this last case controls on the issue. See National Ass’n of Boards of Pharmacy v. Board of Regents, 633 F. 3d 1297, 1306 n. 19 (11th Cir. 2011); Robinson v. Tanner, 798 F. 2d 1378, 1383 (11th Cir. 1986). E. VENUE CONSIDERATIONS In Delong Equipment Co. v. Washington Mills Abrasive Co., supra, the Eleventh Circuit stated that "[i]n a federal antitrust case, venue may be established under § 4 of the Act, 15 U.S.C. § 15, § 12 of the Clayton Act, 15 U.S.C. § 22, or the general federal venue statute, 28 U.S.C. § 1391(b)." Id. at p. 855 (footnote omitted). Section 4 of the Clayton Act, supra, allows plaintiff to sue "in any district court of the United States in the district in which the defendant resides or is found or has an agent." In the context of a corporation, the term "resides" has been deemed to mean the place where it is registered to do business, while the term "is found" means the place "where it is continuously doing business or carrying on any substantial part of its activities." Pocahontas Supreme Coal Co. v. National Mines Corp., 90 F.R.D. 67, 69 (S.D.N.Y. 1981). On the other hand, Section 12 of the Clayton Act, supra, allows for suits against corporate defendants to be brought "not only in the judicial district whereof it is an inhabitant, but also in any district wherein it may be found or transacts business." The scope of this venue clause of Section 12, and its relationship with its service clause, 2 has been discussed in several 2 Section 12 of the Clayton Acts reads in its entirety as follows: Any suit, action, or proceeding under the antitrust laws against a corporation may be brought not only in the judicial district whereof it is an inhabitant, but also in any district wherein it may be found or transacts business; and all process in such cases may be served in the district of which it is an inhabitant, or wherever it may be found. 9 Case 2:13-cv-20000-RDP Document 107 Filed 09/30/13 Page 10 of 24 Circuits and has lead to different interpretations. What has turned into a majority approach adopted by the Second Circuit, the D.C. and, most recently, the Seventh Circuit is what is deemed as an "integrated" approach wherein the venue and service-of-process provisions of Section 12 must be read together. See KM Enterprises v. Global Traffic Technologies, __ F. 3d __, 2013 WL 3958385 at *6-*8 (7th Cir. 2013). The effect of reading said clauses together is that the service-of-process clause would apply only to the circumstances contemplated in the venue clause, which means that personal jurisdiction could be exercised only in the district where the defendant corporation is an inhabitant, is found or transacts business. Therefore, the prevailing interpretation of Section 12 imposes "some limits on where a corporate antitrust defendant may be sued." KM Enterprises, at *4. While the Eleventh Circuit has not ruled directly on the issue as to how Section 12 clauses must be read, it has made clear that, even in antitrust cases, "[b]efore a federal court may exercise personal jurisdiction over a defendant, there must exist both a constitutionally sufficient relationship between the defendant and the forum, i.e. minimum contacts, and a basis for the defendant’s amenability to service of summons." See Delong, supra, at p. 847. (Emphasis added). This means that even if the service-of-process clause Section 12 of the Clayton Act is interpreted as independent from its venue clause, it would not mean that the chosen forums would be appropriate venues unless plaintiffs demonstrate first that the defendant in question has a "constitutionally sufficient" relationship with the forum state. As to the general federal venue statute, which is also deemed to apply to antitrust cases, the same provides, in its relevant part, as follows: The first clause of this section is known as the venue clause, while the second one (separated from the first by a semicolon) is known as the service-of-process clause. As herein explained, there are competing views regarding the relationship between these two clauses. 10 Case 2:13-cv-20000-RDP Document 107 Filed 09/30/13 Page 11 of 24 (b) Venue in General.— A civil action may be brought in— (1) a judicial district in which any defendant resides, if all defendants are residents of the State in which the district is located; (2) a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated; or (3) if there is no district in which an action may otherwise be brought as provided in this section, any judicial district in which any defendant is subject to the court’s personal jurisdiction with respect to such action. For purposes of this general venue provision, a corporate defendant shall be deemed to reside "in any judicial district in which such defendant is subject to the court’s personal jurisdiction with respect to the civil action in question." 28 U.S.C. § 1391(c)(2); Butler v. Ford Motor Co., 724 F. Supp. 2d 575, 586 (D. South Carolina, 2010). As discussed above, under Eleventh Circuit precedent a court may exercise personal jurisdiction over a defendant with a "constitutionally sufficient relationship with the forum". Delong, supra. Finally, it must be noted that plaintiffs also make reference to Section 16 of the Clayton Act, 15 U.S.C. § 26, as a basis for venue. Section 16 states that "[a]ny person, firm, corporation, or association shall be entitled to sue for and have injunctive relief, in any court of the United States having jurisdiction over the parties, against threatened loss or damage by a violation of the antitrust laws […]." As explained below with regards to TSS, there is no basis for personal jurisdiction and venue is not proper in the plaintiffs’ chosen forums under the applicable provisions. III. ARGUMENT A. TSS DOES NOT HAVE MINIMUM CONTACTS WITH THE STATE FORUMS ON WHICH THE COMPANY HAS BEEN SUED AND, THEREFORE, DOES NOT HAVE A CONSTITUONALLY SUFFICIENT RELATIONSHIP WITH THEM THAT ALLOWS FOR THE EXERCISE OF PERSONAL JURISDICTION. 11 Case 2:13-cv-20000-RDP Document 107 Filed 09/30/13 Page 12 of 24 As explained above, the due process analysis for the exercise of personal jurisdiction over a non-resident defendant such as TSS requires that the Court determines whether the defendant has sufficient minimum contacts with the forum state, and whether exercising personal jurisdiction would offend traditional notions of fair play and substantial justice. As to minimum contacts, plaintiffs do not claim that TSS has engaged in any activities whatsoever in the chosen forums. It is uncontested that TSS is duly licensed and authorized to do business in the Commonwealth of Puerto Rico, does not solicit business in any of the fifty states of the United States and does not conduct marketing or advertising activities in any of those fifty states. See Unsworn Declaration Under Penalty of Perjury (Exh. 1). It is also uncontested that TSS does not have any offices, agents or employees in any of the fifty states of the United States, and does not own any properties in any of those states. Id. Furthermore, TSS does not insure residents of any of the fifty states of the United States.3 Id. And even though TSS maintains a website, the services offered by the same are directed only to actual and potential customers residing in the Commonwealth of Puerto Rico. It is evident that TSS cannot possibly have any contacts with plaintiffs’ chosen forums that may be considered constitutionally sufficient to exercise personal jurisdiction over the company. There is, therefore, no basis for either general or specific personal jurisdiction over TSS in the chosen forums. This on itself is enough to dismiss the complaints under Fed. R. Cv. P. 12(b)(2). 3 It must be noted that insurance payments by an insurer or communications regarding coverage have not been considered business transactions for purposes of establishing minimum contacts, even if they are done in the forum state where a plaintiff has filed its claim. See Choice Healthcare v. Kaiser Foundation Plan, 615 F. 3d 364, 369-370 (5th Cir. 2010); St. Lukes Episcopal Hosp. v. Louisiana Health Service, 2009 WL 47125 at *5-*6 (S.D. Texas 2009); Bayada Nurses, Inc. v. BCBS of Michigan, 2008 WL 2945388 at *6 (E.D. Pa. 2008); Memorial Hosp. v. BCBS of Arkansas, 830 F. Supp. 968, 973-974 (S.D. Texas 1993). 12 Case 2:13-cv-20000-RDP Document 107 Filed 09/30/13 Page 13 of 24 B. THE EXERCISE OF PERSONAL JURISDICTION OVER TSS WOULD OFFEND TRADITIONAL NOTIONS OF FAIR PLAY AND SUBSTANTIAL JUSTICE. In addition to the fact that TSS does not have any constitutionally sufficient contacts with any of plaintiffs’ chosen forums, the exercise of personal jurisdiction over TSS would impose an undue and substantial burden on TSS by forcing it to litigate in distant forums where it does not conduct any activities whatsoever and where it has not availed itself of the benefits of those particular jurisdictions. Furthermore, since TSS does not have contacts with the chosen forums, there is no particular interest of the forum states in adjudicating the dispute. Moreover, as discussed further below, the exercise of personal jurisdiction over TSS in plaintiffs’ chosen forums would not promote judicial efficiency and economy, which is already being served by the institution of this MDL for pre-trial proceedings. C. THE SUBSTANTIAL BURDEN THAT WOULD BE IMPOSED ON TSS BY FORCING THE COMPANY TO LITIGATE IN DISTANT FORUMS, WITH WHICH THE COMPANY DOES NOT HAVE A CONSTITUTIONALLY SUFFICIENT RELATIONSHIP, CLEARLY OUTWEIGHS ANY FEDERAL INTEREST IN LITIGATING THE CASE IN THE CHOSEN FORUMS. Even if the Court evaluates the existence of personal jurisdiction under the stricter due process standard of the Fifth Amendment suggested in Republic of Panama v. BCCI Holdings, supra,4 the burden that would be imposed on TSS by forcing it to litigate this case in plaintiffs’ chosen forums outweighs any federal interest in litigating the case in the chosen forums. For the analysis of the federal interest involved, the Republic of Panama case provided the following criteria: 1) the federal policies advanced by the statute; 2) the relationship between nationwide service of process and the advancement of these policies; 3) the connection between 4 As explained above, before the Republic of Panama case, the Eleventh Circuit had already considered the question of exercise of personal jurisdiction in an antitrust case and had applied the due process analysis under the Fourteenth, and not the Fifth, Amendment. See Delong, supra, at pp. 853-854. If said due process analysis conflicts with the one stated in Republic of Panama, the Delong standard controls. 13 Case 2:13-cv-20000-RDP Document 107 Filed 09/30/13 Page 14 of 24 the exercise of jurisdiction in the chosen forum and the plaintiff’s vindication of his federal right; and 4) concerns of judicial efficiency and economy. When applied to this case, those factors do not justify the exercise of personal jurisdiction over TSS. 1. Federal policies advanced by the statute The antitrust statute on which plaintiffs base their allegations in this case is meant to protect and promote a competitive environment by prohibiting contracts or conspiracies in restraint of trade or attempted monopolization and conspiracies to monopolize. Spanish Broadcasting System v. Clear Channel Communications, 376 F. 3d 1065, 1069 (11th Cir. 2004). While it may seem convenient for a plaintiff to have defendants in an antitrust claim appear in the same court by alleging a conspiracy between them in violation of antitrust laws, courts have consistently rejected the proposal that a non-resident defendant is amenable to suit in any district where an alleged conspiracy is said to have occurred or have an impact. See Bertha Bldg. Corp. v. National Theaters Corp., 248 F. 2d 833, 836 (2nd Cir. 1957) ("We cannot bring ourselves to accept the suggestion […] that because of the presence within the jurisdiction of one co-conspirator all foreign corporations which are alleged to be co-conspirators are amenable to process."); Ohio-Midland Light & Power Co. v. Ohio Brass Co., 221 F. Supp. 405, 408 (S.D. Ohio 1962) (rejecting argument that non-resident defendant transacted business in district through co-conspirators that made sales to plaintiffs pursuant to the conspiracy); State of W. Va. v. Morton Intern., Inc., 264 F. Supp. 689, 694-695 (D. Minn. 1967) (power of plaintiffs to force suit in distant forums by alleging a corporate defendant participated in conspiracy not contemplated by Congress); Anrig v. Ringsby United, 603 F. 2d 1319, 1322-1323 (9th Cir. 1978) (co-conspirator venue approach "has been largely discredited in favor of the interpretation that Congress established detailed venue as to each defendant in civil antitrust cases."). 14 Case 2:13-cv-20000-RDP Document 107 Filed 09/30/13 Page 15 of 24 The authority to bring non-resident co-conspirators into any district where the conspiracy is formed or effectuated has been reserved to the Government and may not be extended to private civil actions. As clearly stated in Independent Productions Corp. v. Loew’s, 148 F. Supp. 460 (1957): Although, by enacting Sec. 12 of the Clayton Act, Congress substantially enlarged the former venue provisions of the Anti-trust laws as to corporations, it did not thereby‘give plaintiffs free rein to haul defendants hither and you at their caprice. Congress has authorized prosecution by the Government of a criminal conspiracy in violation of the Anti-trust laws in any district where it was formed or effectuated or in which any overt act was performed. In civil actions, however, Congress has not given the Government similar latitude. The Government can bring parties residing outside the district into a civil action only if the Court shall determine that the ends of justice so require. And it seems significant that Congress has made this procedure available only to the Government. […] [T]he failure of Congress to make similar provisions for civil suits by private litigants implies an intent to withhold the privilege. Id., at 463 (internal quotations and footnotes omitted). Since it is clear that Congress did not contemplate that a non-resident defendant be haled into a distant court in a private antitrust civil action just on the basis of an alleged conspiracy with other entities, then the federal policy advanced by the antitrust statute does not outweigh the burden imposed on such defendant who has no relationship whatsoever with plaintiff’s chosen forum. As discussed above, such is the case of TSS, which is not alleged to have and does not have any contacts whatsoever with the forums where it has been sued in this antitrust action. 2. Relationship between nationwide service of process and the advancement of those policies As discussed above, the prevailing view is that service-of-process provisions of antitrust statutes are limited by venue provisions that limit the forums at which an antitrust action may be brought. Furthermore, plaintiffs cannot expand personal jurisdiction over defendants through conspiracy theories. Therefore, plaintiffs may not force suits in distant forums either by alleging the availability of nationwide service of process or by relying in a conspiracy theory related to 15 Case 2:13-cv-20000-RDP Document 107 Filed 09/30/13 Page 16 of 24 defendants’ alleged conduct. Since under the prevailing view Congress has clearly limited the scope of service of process and venue in private antitrust actions, there cannot be a direct relationship between nationwide service of process and the advancement of the policies behind the antitrust statutes.5 3. The connection between the exercise of jurisdiction in the chosen forum and the plaintiffs’ vindication of his federal right Plaintiffs have willingly chosen the forums on which they are to pursue their claims in this case. Their decision to bring all Blue Cross Blue Shield participants into those cases does not provide in and on itself a justification for having the case decided as to non-resident defendants in the chosen forums. Plaintiffs are not precluded in any way from vindicating their federal rights in relation to defendants as to which the courts of the chosen forums can exercise personal jurisdiction. However, since TSS is not alleged to have and does not have any contacts whatsoever with those forums, the company cannot be forced to litigate there and plaintiffs’ presumptive vindication of their federal rights as to TSS have to occur in the District of Puerto Rico. 4. Concerns of judicial efficiency and economy Since plaintiffs’ claims are currently under MDL proceedings, the judicial efficiency and economy is already been served. That was precisely the reason why these cases were transferred to the Northern District of Alabama. While having all defendants in their chosen forums may be convenient for plaintiffs, the lack of allegations of constitutionally sufficient relationship of TSS with those forums, and the burden that would be imposed on TSS by forcing it to litigate in those forums, outweigh any efficiency that may be claimed by plaintiffs. Also, because TSS has no 5 It must be remembered that the case in which this second factor was stated (Republic of Panama v. BCCI Holdings, supra) was not an antitrust case. Therefore the reference to nationwide service of process may prove inapplicable here. 16 Case 2:13-cv-20000-RDP Document 107 Filed 09/30/13 Page 17 of 24 assets or operations in plaintiffs’ chosen forums, if plaintiffs were to prevail in this case they would have to institute legal proceedings in Puerto Rico to collect any amount awarded. Taking this into consideration, judicial economy would be served by refusing the exercise of personal jurisdiction over TSS in the chosen forums. See Willingway Hosp. v. BCBS of Ohio, 870 F. Supp. 1102, 1111 (S.D. Georgia 1994). In sum, while important, the federal interest pursued by the antitrust statute does not outweigh the burden that would be imposed on TSS by forcing it to litigate in the distant forums chosen by plaintiffs. Therefore, the consolidated amended provider and subscriber complaints must be dismissed for lack of personal jurisdiction as to TSS, even if analyzed under the stricter standard of the Fifth Amendment. As explained below, said complaints must also be dismissed on the basis of improper venue. D. VENUE IS NOT APPROPRIATE IN THE FORUMS CHOSEN BY PLAINTIFFS. As discussed above, plaintiffs’ allegations are devoid of any facts to support a claim of existence of minimum contacts between TSS and their chosen forums. Furthermore, TSS has stated through affidavit that it is not registered to do business in any of those forums; that it does not have any offices, agents or employees in any of the fifty states of the United States; and that it does not own property in any of those states. Since TSS does does not reside in any of said forums and may not be found there, venue is not proper in those forums under Sections 4 and 12 of the Clayton Act. Furthermore, since, as discussed in detail above, the courts in those chosen forums do not have personal jurisdiction over TSS, venue is also improper under the general federal venue statute, and also under Section 16 of the Clayton Act. Therefore, dismissal of the complaints in this case under Fed. R. Cv. P. 12(b)(3) is warranted. 17 Case 2:13-cv-20000-RDP Document 107 Filed 09/30/13 Page 18 of 24 IV. CONCLUSION Defendant TSS does not have a constitutionally sufficient relationship with any of the forums on which it has been sued in this case. Therefore, there is no basis for personal jurisdiction over the company in plaintiffs’ chosen forums. Even if subjected to the stricter due process standard of the Fifth Amendment, and even if the federal policies behind antitrust statutes are considered, the burden imposed on TSS clearly outweighs the federal interest in having the action litigated in plaintiffs’ chosen forums. Furthermore, said forums are improper venues under the venue provisions to which plaintiffs make reference in their complaints. WHEREFORE, it is respectfully requested that, in addition to the dismissal arguments included in the motions to dismiss already filed with this Court by all defendants, that this Honorable Court dismisses the consolidated amended provider and subscriber complaints as to Triple-S Salud, Inc. for lack of personal jurisdiction under Fed. R. Cv. P. 12(b)(2) and for improper venue and Fed. R. Cv. P. 12(b)(3). RESPECTFULLY SUBMITTED. In San Juan, Puerto Rico, this 30th day of September, 2013. COUNSEL FOR TRIPLE-S SALUD, INC. REICHARD & ESCALERA P.O. Box 364148 San Juan, Puerto Rico 00936-4148 Tel. (787) 777-8812 Fax (787) 765-4225 counsellors@reichardescalera.com/s/Rafael Escalera Rodríguez/s/Pedro Santiago Rivera RAFAEL ESCALERA RODRÍGUEZ PEDRO SANTIAGO RIVERA escalera@reichardescalera.com santiagopedro@reichardescalera.com CERTIFICATE OF SERVICE 18 Case 2:13-cv-20000-RDP Document 107 Filed 09/30/13 Page 19 of 24 We hereby certify that, on this same date, we electronically filed the foregoing with the Clerk of the Court using the CM/ECF system which will send notification of such filing to all the attorneys of record. Notice has been delivered by other means to: A. Layne Stackhouse Jones Ward PLC 312 S. Fourth Street, 6th Floor Louisville, KY 40202 Adam H Charnes Kilpatrick Townsend & Stockton LLP 1001 W. Fourth Street Winston-Salem, NC 27101 Allison Nunley Pham 5525 Reitz Avenue Baton Rouge, LA 70809 Amy Pepke BUTLER SNOW O'MARA STEVENS & CANNADA PLLC 6075 Poplar Ave, Ste 500 Memphis, TN 38119 Ashley M Lowe Baker, Donelson, Bearman, Caldwell & Berkowitz, PC (Knox) 265 Brookview Centre Way Suite 600 Knoxville, TN 37919 Carl S Kravitz Zuckerman Spaeder LLP 1800 M Street, NW Suote 1000 Washington, DC 20036 Chad Dwight Hansen Kilpatrick Townsend & Stockton LLP 1001 W Fourth Street Winston-Salem, NC 27101 19 Case 2:13-cv-20000-RDP Document 107 Filed 09/30/13 Page 20 of 24 Charles A. O'Brien, III P.O. Box 98029 5525 Reitz Avenue Baton Rouge, LA 70898-9029 Christopher G Scanlon FAEGRE BAKER DANIELS LLP-Indianapolis 300 North Meridian Street Suite 2700 Indianapolis, IN 46204 D Kent Meyers Crowe & Dunlevy-OKC 20 N Broadway Ave Suite 1800 Oklahoma City, OK 73102 DAVID NEWMANN HOGAN LOVELLS US LLP 1835 MARKET ST 29TH FL PHILADELPHIA, PA 19103 Daniel Patrick Moylan Zuckerman Spaeder LLP 100 East Pratt Street Suite 2440 Baltimore, MD 21202 Daniel R. Taylor, Jr Kilpatrick Townsend & Stockton LLP 1001 West Fourth Street Winston-Salem, NC 27101 Dennis C Reich REICH & BINSTOCK 4265 San Felipe, Suite 1000 Houston, TX 77027 Elizabeth Barnett LaBauve Crowe & Dunlevy-OKC 20 N Broadway Ave 20 Case 2:13-cv-20000-RDP Document 107 Filed 09/30/13 Page 21 of 24 Suite 1800 Oklahoma City, OK 73102 Ellen M Ahrens GUSTAFSON GLUEK PLLC 650 Northstar East 608 Second Avenue South Minneapolis, MN 55402 Gary C Shockley Baker, Donelson, Bearman & Caldwell-Nashville 511 Union Street Suite 1700 Nashville, TN 37219 Gerald F. Easter GERALD F. EASTER, ATTORNEY AT LAW 369 N. Main Street Memphis, TN 38103 Gregory Haynes Wyatt, Tarrant & Combs LLP-Louisville 500 West Jefferson Street, Suite 2800 Louisville, KY 40202-2898 JEREMY D. FEINSTEIN REED SMITH LLP REED SMITH CENTRE 225 FIFTH AVE PITTSBURGH, PA 15222-2716 James Thomas Williams, Jr Brooks, Pierce, McLendon, Humphrey & Leonard, LLP 230 North Elm Street, Suite 2000 [27401] P. O. Box 26000 Greensboro, NC 27420-6000 Janet Brooks Holmes McKay Cauthen Settana and Stubley 1303 Blanding Street Columbia, SC 29201 21 Case 2:13-cv-20000-RDP Document 107 Filed 09/30/13 Page 22 of 24 John Stone Campbell, III Taylor, Porter, Brooks & Phillips P. O. Box 2471 Baton Rouge, LA 70821 Jonathan Charles Little SAEED & LITTLE, LLP 1433 N. Meridian Street Suite 202 Indianapolis, IN 46202 L. Adam Thames Taylor, Porter, Brooks & Phillips P. O. Box 2471 Baton Rouge, LA 70821 MICHAEL J. MCCARRIE ARTZ HEALTH LAW 1500 MARKET STREET SUITE 4100 PHILADELPHIA, PA 19102 Mark Edward McKane Kirkland and Ellis 555 California Street, Suite 2700 San Francisco, CA 94104 Mark J Murphy Mooney Green Saindon Murphy and Welch PC 1920 L St NW Ste 400 Washington, DC 20036 Matthew G White BAKER DONELSON BEARMAN CALDWELL & BERKOWITZ-Memphis First Tennessee Bank Building 165 Madison Ave. Ste. 2000 Memphis, TN 38103 Patrick James Quinlan Law Offices of Patrick J. Quinlan 243 North Main St. 22 Case 2:13-cv-20000-RDP Document 107 Filed 09/30/13 Page 23 of 24 Providence, RI 02903 R Mark Glover BAKER DONELSON BEARMAN CALDWELL & BERKOWITZ-Memphis First Tennessee Bank Building 165 Madison Ave. Ste. 2000 Memphis, TN 38103 Randall D Noel ARMSTRONG ALLEN PREWITT GENTRY JOHNSTON & HOLMES Brinkley Plaza 80 Monroe Avenue, Suite 700 Memphis, TN 38103-2467 Robert F Leibenluft Hogan Lovells US LLP Columbia Square 555 Thirteenth Street, NW Washington, DC 20004 SHANNON ELISE MCCLURE REED SMITH LLP 2500 ONE LIBERTY PLACE 1650 MARKET ST. PHILADELPHIA, PA 19103 STEPHEN A. LONEY, JR HOGAN & HARTSON 1835 MARKET ST. PHILADELPHIA, PA 19103 Samuel Andrew Diddle EBERLE BERLIN KADING TURNBOW & MCKLVEEN POB 1368 Boise, ID 83701 Temus C Miles, Jr McKay Cauthen Settana and Stubley 1303 Blanding Street Columbia, SC 29201 23 Case 2:13-cv-20000-RDP Document 107 Filed 09/30/13 Page 24 of 24 Thomas S Scott, Jr Ball & Scott Law Offices Bank of America Center Suite 601 550 Main Street Knoxville, TN 37902 In San Juan, Puerto Rico, this 30th day of September, 2013./s/Pedro Santiago Rivera PEDRO SANTIAGO RIVERA santiagopedro@reichardescalera.com 24

MOTION to Dismiss by Defendants' Counsel.

FILED 2013 Sep-30 PM 02:56 U.S. DISTRICT COURT N.D. OF ALABAMA IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ALABAMA SOUTHERN DIVISION IN RE: BLUE CROSS BLUE SHIELD) Master File No. 2:13-CV-20000-RDP ANTITRUST LITIGATION) (MDL No. 2406)) This document relates to all cases. DEFENDANTS’ MOTION TO DISMISS Defendants hereby move, pursuant to Federal Rule of Civil Procedure 12(b)(6), to dismiss this action for the reasons set forth in the following two briefs: (1) Brief in Support of Defendants’ Motion to Dismiss Plaintiffs’ Antitrust Conspiracy Claims (the "Antitrust Conspiracy Claims Brief"), and (2) the Supplemental Brief in Support of Defendants’ Motion to Dismiss (the "Plan Brief"). The Antitrust Conspiracy Claims Brief addresses plaintiffs’ antitrust conspiracy claims that are based on Blue Plans’ use of service areas and the BlueCard program (Subscriber Complaint Counts 1 & 2 and other counts alleging violations of Sherman Act Section 1 and state law analog claims1; Provider Complaint Counts I and II). The Plan Brief addresses additional, dispositive bases for the dismissal of the subscriber plaintiffs’ Sherman Act and state-specific claims. In addition to these two main briefs, two Plans—Blue Cross Blue Shield of Michigan and Blue Cross Blue Shield of South Carolina—are filing briefs raising arguments specific to the claims against them. CareFirst of Maryland, Inc. is filing a motion to dismiss in Advanced Surgery v. CareFirst of Maryland, Inc. Finally, certain Plans are filing motions challenging personal jurisdiction and venue. 1 Counts 3–8, 10–15, 18–29, 31–36, 38–48, 50–53, 55–60, 62–67, 69, 71–73, 76, 80–87, 89, 91–92, 94– 97, and 99–104. Defendants drafted the two briefs to be complimentary to each other, with the intention that the Antitrust Conspiracy Claims Brief would be read prior to the Plan Brief. The Antitrust Conspiracy Claims Brief contains background regarding plaintiffs’ claims that is relevant to arguments made in both briefs. It explains that plaintiffs’ complaints should be dismissed for the following reasons: • Plaintiffs cannot state a claim because the license agreements they challenge are not an unlawful agreement to restrain trade; Blue Plans’ decades-old lawful trademark exclusivity in their local geographies created the service areas, not the license agreements that form the basis of plaintiffs’ claims; • Plaintiffs fail to state a per se claim because the license agreements are not horizontal agreements and, in any event, plaintiffs’ allegations concede that service areas have plausible procompetitive benefits, precluding per se treatment; • The provider plaintiffs fail to state a per se claim with respect to their BlueCard allegations because plaintiffs do not and cannot allege any price fixing; rather, their allegations describe a procompetitive system to which the per se rule cannot apply; • The subscriber plaintiffs’ fallback rule of reason attack on service areas fails because plaintiffs do not adequately plead the necessary elements of such a claim, including anticompetitive impact on competition, plausible geographic and product markets, and market power; • Plaintiffs’ challenges to the license agreements are barred by the McCarran-Ferguson Act, which preempts claims related to the "business of insurance;" –2– • Finally, certain subscriber plaintiffs’ claims are barred by the filed rate doctrine. The Plan Brief addresses this argument in detail. The Plan Brief explains that plaintiffs’ complaints should be dismissed for the following additional, independent reasons: • The subscriber plaintiffs fail to allege that defendants possess adequate market power as required to state claims under Section 1 and 2 of the Sherman Act and similar state laws; • Certain subscriber plaintiffs paid only "filed rates" and thus are barred by the filed rate doctrine from asserting a cause of action based on payment of those rates; • Subscriber plaintiffs’ unjust enrichment claims fail because, among other reasons, they cannot bring a quasi-contractual cause of action based on conduct that is controlled by the express terms of their valid health insurance contracts; • The subscriber plaintiffs likewise cannot state a claim for unfair competition because they do not adequately allege that defendants engaged in unlawful anticompetitive conduct and because defendants’ receipt of agreed-upon premium payments does not constitute unfair competition; • The subscriber plaintiffs’ Sherman Act claims for alleged use of "Most Favored Nation" provisions fail because they do not allege actual agreements containing MFNs; they do not allege facts supporting that such agreements could have caused a price increase in the provider market; and they do not allege the necessary elements to bring what is, in essence, a claim for predatory pricing; –3– • The subscriber plaintiffs fail to state a claim based on an alleged agreement not to compete among Pennsylvania plans because they fail to allege facts showing the existence of any such agreement or any injury in fact, and because they lack antitrust standing to challenge any purported agreement; • Both sets of plaintiffs improperly added new parties not named in any underlying complaint, and abandoned other parties that were named in those actions when they filed their consolidated complaints; • The subscriber plaintiffs’ complaint is a shotgun pleading in contravention of governing Eleventh Circuit law and this Court’s prior admonition. For these reasons, and the additional reasons set forth in the Antitrust Conspiracy Claims Brief and Plan Brief, defendants respectfully request that the Court dismiss the Subscriber Track Class Action Complaint and the Provider Track Class Action Complaint in their entirety, with prejudice. Dated: September 30, 2013 Respectfully submitted,/s/David J. Zott, P.C. David J. Zott, P.C. Daniel E. Laytin, P.C. Sarah J. Donnell KIRKLAND & ELLIS LLP 300 North LaSalle Chicago, IL 60654 312-862-2000 (fax) 312-862-2200 david.zott@kirkland.com daniel.laytin@kirkland.com sarah.donnell@kirkland.com –4– Ian R. Conner KIRKLAND & ELLIS LLP 655 Fifteenth Street, NW Washington, DC 20005 202-879-5000 (fax) 202-879-5200 ian.conner@kirkland.com Defendants’ Co-Coordinating Counsel and Counsel for Blue Cross and Blue Shield Association Craig A. Hoover J. Robert Robertson E. Desmond Hogan HOGAN LOVELLS US LLP Columbia Square 555 Thirteenth Street, NW Washington, DC 20004 202-637-5600 (fax) 202-637-5910 craig.hoover@hoganlovells.com robby.robertson@hoganlovells.com desmond.hogan@hoganlovells.com Emily M. Yinger N. Thomas Connally, III HOGAN LOVELLS US LLP Park Place II 7930 Jones Branch Drive, Ninth Floor McLean, VA 22102 703-610-6100 (fax) 703-610-6200 emily.yinger@hoganlovells.com tom.connally@hoganlovells.com Cavender C. Kimble BALCH & BINGHAM LLP 1901 6th Avenue N, Suite 1500 Birmingham, AL 35203-4642 205-226-3437 (fax) 205-488-5860 ckimble@balch.com Defendants’ Co-Coordinating Counsel and Counsel for Anthem, Inc.; Anthem Health Plans, Inc. (Anthem Blue Cross and Blue Shield of Connecticut); Blue Cross and –5– Blue Shield of Georgia, Inc.; Anthem Insurance Companies, Inc.(Anthem Blue Cross and Blue Shield of Indiana); Anthem Health Plans of Maine, Inc.; HMO Missouri, Inc. (Anthem Blue Cross and Blue Shield of Missouri); Anthem Health Plans of New Hampshire, Inc. (Anthem Blue Cross and Blue Shield of New Hampshire); Anthem Health Plans of Virginia, Inc. (Anthem Blue Cross and Blue Shield of Virginia Inc.); Blue Cross and Blue Shield of North Carolina, Inc.; Blue Cross and Blue Shield of Florida, Inc.; Louisiana Health Service & Indemnity Company (Blue Cross and Blue Shield of Louisiana); Blue Cross and Blue Shield of Massachusetts; BCBSM, Inc. (Blue Cross and Blue Shield of Minnesota); Blue Cross and Blue Shield of South Carolina; Blue Cross and Blue Shield of Tennessee, Inc.; Hawaii Medical Service Association (Blue Cross and Blue Shield of Hawaii); Horizon Healthcare Services, Inc. (Horizon Blue Cross and Blue Shield of New Jersey); Wellmark of South Dakota, Inc. (Wellmark Blue Cross and Blue Shield of South Dakota); Wellmark, Inc. (Wellmark Blue Cross and Blue Shield of Iowa); WellPoint, Inc.; Blue Cross & Blue Shield of Rhode Island; Blue Cross and Blue Shield of Vermont; Anthem Holdings Corp. (Anthem Blue Cross and Blue Shield); Anthem Blue Cross Life and Health Insurance Company; Anthem Health Plans of Kentucky, Inc.; Anthem Holdings Corp.; Anthem Life Insurance Company; RightChoice Managed Care, Inc.; Healthy Alliance Life Insurance Company; Blue Cross of California; Blue Cross of California Partnership Plan, Inc.; Blue Cross of Southern California; Blue Cross of Northern California; Rocky Mountain Hospital & Medical Service Inc. d/b/a Anthem Blue Cross Blue Shield of Colorado; Rocky Mountain Hospital & Medical Service Inc. d/b/a Anthem Blue Cross Blue Shield of Nevada; Empire BlueCross BlueShield (Empire HealthChoice Assurance, Inc.); Blue Cross Blue Shield of Wisconsin (Anthem Blue Cross Blue Shield of Wisconsin); Community Insurance Company as Anthem Blue Cross Blue Shield of Ohio; Cambia Health Solutions, Inc.; Regence Blue Shield of Idaho; Regence Blue Cross Blue Shield of Utah; Regence Blue Shield (in Washington); Regence Blue Cross Blue Shield of Oregon –6– Kimberly R. West Mark M. Hogewood WALLACE JORDAN RATLIFF & BRANDT, LLC First Commercial Bank Building 800 Shades Creek Parkway, Suite 400 PO Box 530910 Birmingham, AL 35253 205-870-0555 (fax) 205-871-7534 kwest@wallacejordan.com mhogewood@wallacejordan.com Defendants’ Liaison Counsel and Counsel for Blue Cross and Blue Shield Association; Health Care Service Corporation, an Illinois Mutual Legal Reserve Company, including its divisions Blue Cross and Blue Shield of Illinois, Blue Cross and Blue Shield of Texas, Blue Cross and Blue Shield of New Mexico and Blue Cross and Blue Shield of Oklahoma; HCSC Insurance Services Company; GHS Health Maintenance Organization (BlueLincs HMO); GHS Property and Casualty Insurance Company; Highmark, Inc., Highmark Blue Cross Blue Shield West Virginia; Highmark Blue Cross and Blue Shield of Delaware; California Physicians’ Service d/b/a Blue Shield of California Carl S. Burkhalter James L. Priester MAYNARD COOPER & GALE PC 1901 Sixth Avenue North, 2400 Regions Harbert Plaza Birmingham, AL 35203 205-254-1000 (fax) 205-254-1999 cburkhalter@maynardcooper.com jpriester@maynardcooper.com Pamela B. Slate HILL HILL CARTER FRANCO COLE & BLACK, PC 425 S. Perry Street Montgomery, AL 36104 334-834-7600 (fax) 334-386-4381 pslate@hillhillcarter.com Counsel for Blue Cross Blue Shield of Alabama –7– Gwendolyn C. Payton Erin M. Wilson LANE POWELL PC 1420 Fifth Avenue, Suite 4200 Seattle, WA 98101-2338 206-223-7000 (fax) 206-223-7107 paytong@lanepowell.com wilsonem@lanepowell.com J. Bentley Owens, III STARNES DAVIS FLORIE LLP 100 Brookwood Place, 7th Floor Birmingham, AL 35209 205-868-6000 (fax) 205-868-6099 bowens@starneslaw.com Counsel for Premera Blue Cross Blue Shield of Alaska and Premera Blue Cross of Washington Helen E. Witt, P.C. Jeffrey J. Zeiger Erica B. Zolner KIRKLAND & ELLIS LLP 300 North LaSalle Street Chicago, IL 60654 312-862-2000 (fax) 312-862-2200 helen.witt@kirkland.com jeffrey.zeiger@kirkland.com erica.zolner@kirkland.com Counsel for Health Care Service Corporation, including its divisions Blue Cross and Blue Shield of Illinois, Blue Cross and Blue Shield of New Mexico, Blue Cross and Blue Shield of Oklahoma and Blue Cross and Blue Shield of Texas; Caring for Montanans, Inc., f/k/a Blue Cross and Blue Shield of Montana, Inc.; Highmark Health Services, d/b/a Highmark Blue Cross Blue Shield and d/b/a Highmark Blue Shield; Highmark BCBSD Inc. d/b/a Highmark Blue Cross Blue Shield Delaware; Highmark West Virginia Inc. d/b/a Highmark Blue Cross Blue Shield West Virginia –8– H. James Koch ARMBRECHT JACKSON LLP 63 South Royal Street, 13th Floor, Riverview Plaza Mobile, AL 36602 251-405-1300 (fax) 251-432-6843 hjk@ajlaw.com Brian K. Norman SHAMOUN & NORMAN LLP 1755 Wittington Place, Suite 200 Dallas, TX 75234 214-987-1745 (fax) 214-521-9033 bkn@snlegal.com Counsel for CareFirst of Maryland, Inc. and CareFirst BlueCross BlueShield d/b/a/Group Hospitalization and Medical Services D. Bruce Hoffman Todd M. Stenerson HUNTON & WILLIAMS LLP 2200 Pennsylvania Ave., NW Washington, DC 20037 202-955-1500 (fax) 202-778-2201 bhoffman@hunton.com tstenerson@hunton.com Counsel for Blue Cross and Blue Shield of Michigan Christopher Shapley R. David Kaufman Cheri D. Green M. Patrick McDowell BRUNINI GRANTHAM GROWER & HEWES PLLC The Pinnacle Building, Suite 100 190 East Capitol Street Jackson, MS 39201 601-948-3101 (fax) 601-960-6902 cshapley@brunini.com dkaufman@brunini.com cgreen@brunini.com pmdowell@brunini.com –9– Scott F. Singley BRUNINI GRANTHAM GROWER & HEWES PLLC 410 Main Street Columbus, MS 39701 662-240-9744 (fax) 662-240-4127 ssingley@brunini.com Counsel for Blue Cross Blue Shield of Mississippi, A Mutual Insurance Company John W. Reis COZEN O’CONNOR 301 S. College Street, Suite 2100 Charlotte, NC 28202 704-376-3400 (fax) 704-334-3351 jreis@cozen.com Paul K. Leary COZEN O’CONNOR 1900 Market Street Philadelphia, PA 19103 215-665-2000 (fax) 215-665-2013 pleary@cozen.com Counsel for Blue Cross of Northeastern Pennsylvania John D. Briggs Rachel J. Adcox Kenina J. Lee AXINN VELTROP & HARKRIDER LLP 950 F Street, NW 7th Floor Washington, DC 20004 202-912-4700 (fax) 202-912-4701 jdb@avhlaw.com rja@avhlaw.com kjl@avhlaw.com – 10 – Stephen A. Rowe Aaron G. McLeod ADAMS AND REESE LLP 1901 6th Avenue North, Suite 3000 Birmingham, AL 35203 205-250-5000 (fax) 205-250-5034 steve.rowe@arlaw.com aaron.mcleod@arlaw.com Counsel for Independence Blue Cross Pedro Santiago-Rivera Rafael Escalera-Rodriguez REICHARD & ESCALERA 255 Ponce De Leon Ave. MCS Plaza, Tenth Floor San Juan, Puerto Rico 00917-1913 787-777-8888 (fax) 787-765-4225 santiagopedro@reichardescalera.com escalera@reichardescalera.com Counsel for Triple S-Salud, Inc. Edward S. Bloomberg PHILLIPS LYTLE LLP 3400 HSBC Center Buffalo, NY 14203-2887 716-847-7096 (fax) 716-852-6100 ebloomberg@phillipslytle.com D. Keith Andress BAKER, DONELSON, BEARMAN, CALDWELL & BERKOWITZ, P.C. 420 North 20th Street 1600 Wells Fargo Tower Birmingham, AL 35203 205-250-8367 (fax) 205-488-3767 kandress@bakerdonelson.com Counsel for Excellus BlueCross BlueShield of New York – 11 – Michael A. Naranjo FOLEY & LARDNER LLP 555 California Street, Suite 1700 San Francisco, CA 94104-1520 415-984-9847 (fax) 415-434-4507 mnaranjo@foley.com Alan D. Rutenberg FOLEY & LARDNER LLP 3000 K Street, N.W., Suite 600 Washington, D.C. 20007-5109 202-672-5491 (fax) 202-672-5399 arutenberg@foley.com Counsel for USAble Mutual Insurance Company, d/b/a Arkansas Blue Cross and Blue Shield Kathleen Taylor Sooy Tracy A. Roman Andrew D. Kaplan April N. Ross CROWELL & MORING LLP 1001 Pennsylvania Avenue, NW Washington, DC 20004 202-624-2500 (fax) 202-628-5116 ksooy@crowell.com troman@crowell.com akaplan@crowell.com aross@crowell.com John M. Johnson Brian P. Kappel LIGHTFOOT FRANKLIN & WHITE LLC 400 20th Street North Birmingham, AL 35203 205-581-0700 (fax) 205-581-0799 jjohnson@lightfootlaw.com bkappel@lightfootlaw.com Counsel for Blue Cross Blue Shield of Arizona, Blue Cross and Blue Shield of Kansas City, Blue Cross and Blue Shield of Kansas, Inc.; Blue Cross and Blue Shield of Nebraska, – 12 – Blue Cross of Idaho Health Services, Inc., Blue Cross Blue Shield of North Dakota, Blue Cross Blue Shield of Wyoming and HealthNow New York Inc. Mary C. St. John Charles L. Sweeris Law Department BLUE SHIELD OF CALIFORNIA 50 Beale St. San Francisco, CA 94105 415-229-5107 (fax) 415-229-5343 charles.sweeris@blueshieldca.com marcy.stjohn@blueshieldca.com Counsel for California Physicians’ Service d/b/a Blue Shield of California Robert K. Spotswood Michael T. Sansbury Joshua K. Payne SPOTSWOOD SANSOM & SANSBURY LLC One Federal Place 1819 Fifth Avenue North, Suite 1050 Birmingham, Alabama 35203 205-986-3620 (fax) 205-986-3639 rks@spotswoodllc.com msansbury@spotswoodllc.com jpayne@spotswoodllc.com Counsel for Capital Blue Cross – 13 – CERTIFICATE OF SERVICE I hereby certify that on September 30, 2013, the foregoing was electronically filed with the Clerk of Court using the CM/ECF system which will send notification of such filing to all counsel of record./s/David J. Zott, P.C. David J. Zott, P.C.

MOTION to Dismiss Plaintiffs' Complaint by CareFirst of Maryland, Inc. by Defendants' Counsel.

FILED 2013 Sep-30 PM 03:53 U.S. DISTRICT COURT N.D. OF ALABAMA IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ALABAMA SOUTHERN DIVISION IN RE: BLUE CROSS BLUE SHIELD) Master File No. 2:13-CV-20000-RDP ANTITRUST LITIGATION) MDL No. 2406) This document relates to Advanced) Surgery Center, et al. v. CareFirst of) Maryland, Inc. CAREFIRST OF MARYLAND’S MOTION TO DISMISS PLAINTIFFS’ COMPLAINT _________________________________________________________________ COMES NOW CareFirst of Maryland, Inc. (hereinafter referred to as "CFMI") and files this Motion to Dismiss Plaintiffs’ Complaint in the case styled Advanced Surgery Center, et al. v. CareFirst of Maryland, Inc. pursuant to Federal Rule of Civil Procedure 12(b)(6). As set forth in the accompanying brief in support, Plaintiff’s Complaint fails to state a claim for relief against CFMI on which relief can be granted. As such, Plaintiff’s claims against CFMI should be dismissed with prejudice and in its entirety. WHEREFORE, Defendant CareFirst of Maryland, Inc. respectfully requests this Court to dismiss the allegations asserted against it in Plaintiff’s Complaint with prejudice and in its entirety. DATE: September 30, 2013 Respectfully submitted,/s/Brian K. Norman Brian K. Norman Shamoun & Norman, LLP 1775 Wittington Place, Suite 200, LB 25 Dallas, Texas 75234 DEFENDANT’S MOTION TO DISMISS Page 1 of 2 Tel: 214.987.1745 bkn@snlegal.com ATTORNEY FOR CAREFIRST OF MARYLAND, INC. H. James Koch ARMBRECHT JACKSON LLP 63 S. Royal Street, Suite 1300 Mobile, AL 36602 Tel: 251.405.1300 hjk@ajlaw.com ATTORNEY FOR CAREFIRST OF MARYLAND, INC. Kimberly R. West WALLACE, JORDAN, RATLIFF & BRANDT, L.L.C. 800 Shades Creek Parkway, Suite 400 Birmingham, AL 35209 Tel: 205.870.0555 kwest@wallacejordan.com LIAISON COUNSEL CERTIFICATE OF SERVICE I do hereby certify that I have on this 30th day of September, 2013, electronically filed the foregoing with the Clerk of the Court using the CM/ECF system which will send notification of such filing to all counsel of record./s/Brian K. Norman BRIAN K. NORMAN DEFENDANT’S MOTION TO DISMISS Page 2 of 2

Brief in Support of Motion to Dismiss {{110}} by CareFirst of Maryland, Inc. Modified on 10/4/2013

FILED 2013 Sep-30 PM 03:57 U.S. DISTRICT COURT N.D. OF ALABAMA IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ALABAMA SOUTHERN DIVISION IN RE: BLUE CROSS BLUE SHIELD) Master File No. 2:13-CV-20000-RDP ANTITRUST LITIGATION) (MDL No. 2406)) This document relates to Advanced) Surgery Center, et al. v. CareFirst of) Maryland, Inc. BRIEF IN SUPPORT OF CAREFIRST OF MARYLAND, INC.’S MOTION TO DISMISS PURSUANT TO RULE 12(b)(6) _________________________________________________________________ INTRODUCTION 1. Plaintiffs in the suit styled Advanced Surgery Center of Bethesda, LLC, et al. v. CareFirst of Maryland, Inc., ("Advanced Surgery"), originally filed in the federal court for the District of Maryland, have alleged that certain conduct by CareFirst of Maryland, Inc. ("CareFirst") violates Sections 1 and 2 of the Sherman Act and provisions of the Maryland Antitrust Act. 1 For the reasons discussed below, each of Plaintiffs’ allegations fails to state a claim on which relief can be granted and CareFirst therefore urges this Court to grant its Motion to Dismiss Plaintiffs’ Complaint (the "Motion"), with prejudice, and in its entirety. 2 I. INTERPRETATION OF MARYLAND ANTITRUST ACT CLAIMS 2. Plaintiffs essentially allege five antitrust claims, and, separately, that the conduct described with respect to each of said claims violates both the Sherman Act 3 and the 1 15 U.S.C. §§ 1 and 2; MD. CODE ANN.COM. LAW §§ 11-204(a)(1) and (2). 2 In an effort to comply with the length restrictions imposed upon this brief, CareFirst does not repeat Plaintiffs’ allegations in its introduction, but will address the relevant allegations in each section of the argument below. 3 15 U.S.C. §§1 and 2; Complaint, Dkt. #1 in Advanced Surgery (hereinafter, "Compl.") at ¶¶ 174-179, 186-194, 204-209, 216-220, and 226-230. Page 1 of 20 corresponding provisions of the Maryland Antitrust Act. 4 Both the Maryland Antitrust Act itself and subsequent Maryland cases provide that Maryland courts interpret the provisions of the Maryland Antitrust Act by utilizing federal case law interpreting federal antitrust statutes. 5 Further, Maryland courts almost exclusively cite federal case law when interpreting the Maryland Antitrust Act. 6 3. As Plaintiffs’ claims under the Maryland Antitrust Act mirror each of the allegations brought under the Sherman Act, 7 CareFirst has elected not to separately address the Maryland Antitrust Act claims herein. Rather, because Maryland courts interpret the Maryland Antitrust Act in accordance with federal case law, the arguments CareFirst presents below supporting the dismissal of Plaintiffs’ federal antitrust claims are also dispositive with respect to Plaintiffs’ state law claims. II. DUPLICATIVE MATTERS INCORPORATED 4. On September 3, 2013, the Court ordered that, if individual Plan defendants wished to file independent motions to dismiss, said defendants must file only "non-duplicative briefs on any issues particular to them." 8 Plaintiffs’ allegations under Counts I, II, V, and VI9 mirror the claims the provider-track plaintiffs allege in their Consolidated Amended Complaint, 10 and the Motions to Dismiss, and Briefs in Support thereof, filed on behalf of all Defendants in this matter relative to the provider-track complaint address the grounds 4 MD. CODE ANN.COM. LAW §§ 11-204(a)(1) and (2); Compl. ¶¶ 180-185, 195-203, 210-215, 221-225, and 231-235. 5 MD. CODE ANN.COM. LAW §§ 11-202(a)(1) and (2); Cavalier Mobile Homes Inc. v. Liberty Homes Inc., 454 A.2d 367, 371 (Md. 1983). 6 See, e.g., Cavalier Mobile Homes, 454 A.2d at 372-373 (Md. 1983); Martello v. Blue Cross and Blue Shield of Md., Inc., 795 A.2d 185, 194-207 (Md. Ct. Spec. App. 2002). 7 See Compl. ¶¶ 174-235. 8 Order Setting Briefing Schedule, Dkt. 98. 9 Compl. ¶¶ 174-185, 204-215. 10 Consolidated Amended Complaint related to the Provider-Track, Dkt. #86 in this MDL No. 2406, ¶¶ 224-235. Page 2 of 20 necessitating dismissal of those claims at length. Accordingly, CareFirst shall not reiterate those arguments here, but does adopt and incorporate herein all arguments raised in those Briefs. Rather, CareFirst addresses plaintiffs’ claims regarding the alleged "In-Network Conspiracy,"11 Monopolization,12 and Attempted Monopolization.13 ARGUMENTS AND AUTHORITIES I. LEGAL STANDARD FOR MOTIONS TO DISMISS 5. To survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), Plaintiffs’ Complaint "must contain sufficient factual matter, accepted as true, to'state a claim for relief that is plausible on its face.’" 14 A complaint that provides only labels or conclusions or a formulaic recitation of the elements of a cause of action is insufficient to show grounds for entitlement to relief. 15 Conclusory statements in the complaint are not entitled to an assumption of truth and should be disregarded. 16 II. PLAINTIFFS FAIL TO STATE SUFFICIENT MARKET ALLEGATIONS TO SUPPORT THEIR ANTITRUST CLAIMS. 6. In order to state a claim on which relief can be granted under Section 2 of the Sherman Act, or under Section 1 if the plaintiff alleges the offending conduct violates the Sherman Act under the "rule of reason," a plaintiff must, as a "threshold requirement," define both relevant product and geographic markets within which the plaintiff alleges the defendant possesses market power. 17 Further, to survive a motion to dismiss, a plaintiff must allege that 11 Compl. ¶¶ 186-203. 12 Id. at ¶¶ 216-225. 13 Id. at ¶¶ 226-235. 14 Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). 15 Iqbal, 556 U.S. at 678; Twombly, 550 U.S. at 555 and n. 3. 16 Iqbal, 556 U.S. at 679. 17 Campfield v. State Farm Mut. Auto. Ins. Co., 532 F.3d 1111, 1117-18 (10th Cir. 2008) (citing Spectrofuge Corp. v. Beckman Instruments, Inc., 575 F.2d 256, 276 (5th Cir. 1978)) (Section 2 monopolization context); Queen City Pizza, Inc. v. Domino’s Pizza, Inc., 124 F.3d 430, 442 (3d Page 3 of 20 the defendant actually possesses market power in the relevant markets. 18 When a plaintiff fails to define both its proposed relevant product and geographic markets, with reference to the rules governing market definition, even when a court grants all factual inferences in the plaintiff’s favor, the market is legally insufficient, and a motion to dismiss must be granted. 19 7. As set forth herein, Plaintiffs fail to adequately define the relevant product market. Plaintiffs state that healthcare services, rather than the sale of insurance, constitutes the relevant product market, 20 but all of Plaintiffs’ factual allegations focus on product interchangeability between various types of insurance products to consumers, not on interchangeability of healthcare purchasers for healthcare providers. Plaintiffs also fail to adequately define the relevant geographic markets based on the well-settled requirement that a geographic market cannot be drawn simply to coincide with the market area of a specific company. 21 Rather, Plaintiffs choose to define the market around increasing CareFirst’s market share. 22 Finally, Plaintiffs fail to allege CareFirst’s market share in the relevant product market, i.e., the purchase of healthcare services, instead focusing incorrectly again on CareFirst’s share of the market for the sale of a specific type of insurance product to consumers. Accordingly, Plaintiffs’ market allegations fail to state a claim as a matter of law, barring all of Plaintiffs’ Cir. 1997) (citing Spectrum Sports, Inc. v. McQuillan, 506 U.S. 447, 456 (1993)) (Section 2 attempted monopolization context); Apani Sw., Inc. v. Coca-Cola Enter., Inc., 300 F.3d 620, 627 (5th Cir. 2002) (Section 1 rule-of-reason context). 18 Queen City Pizza, 124 F.3d at 437 (citing Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585, 596 n. 19 (1985)) and 442 (citing McQuillan, 506 U.S. at 459); Apani, 300 F.3d at 627-628. 19 Queen City Pizza, 124 F.3d at 436-437; Apani, 300 F.3d at 627 (applying Queen City Pizza to a motion to dismiss for failure to define relevant geographical markets with reference to the proper requirements). 20 However, Plaintiffs do not even attempt to explain whether or how their specific types of healthcare services may differ from those of other healthcare providers. Thus, while somewhat correctly focusing on provider inputs rather than insurance outputs in their bare market allegations, Plaintiffs define the market far too broadly. 21 Bailey v. Allgas, Inc., 284 F.3d 1237, 1249 (11th Cir. 2002). 22 Compl. ¶¶ 49-50. Page 4 of 20 claims, save those alleged to constitute per se Section 1 violations, which will be discussed separately below. A. Plaintiffs Fail to Plausibly Define a Relevant Product Market. 8. It is well settled that "the outer boundaries of a product market are defined by the reasonable interchangeability of use or the cross-elasticity of demand between the product itself and substitutes for it." 23 Further, "where the plaintiff fails to define its proposed relevant market with reference to the rule of reasonable interchangeability and cross-elasticity of demand, or alleges a proposed relevant market that clearly does not encompass all interchangeable substitute products, even when all factual inferences are granted in plaintiff’s favor, the relevant market is legally insufficient and a motion to dismiss may be granted." 24 9. In an alleged monopsony, as opposed to a monopoly, buyers possess market power to decrease demand for a product, thereby lowering prices. 25 When evaluating market power in an alleged monopsony situation, "the market is not the market of competing sellers but of competing buyers. This market is comprised of buyers who are seen by sellers as being reasonably good substitutes." 26 10. Plaintiffs identify themselves as "ambulatory care facilities," 27 and state that "[h]ealthcare providers’ services… constitute the relevant product market." 28 Nowhere in their Complaint do Plaintiffs address exactly what services an ambulatory care facility provides, or whether these services are sufficiently interchangeable with other healthcare providers’ services 23 Queen City Pizza, 124 F.3d at 436 (quoting Brown Shoe Co. v. U.S., 370 U.S. 294, 325 (1962) (internal quotation marks omitted)). 24 Id. (citing TV Commc’ns Network, Inc. v. Turner Network Television, Inc., 964 F.2d 1022, 1025 (10th Cir. 1992); See also Campfield, 532 F.3d at 1119. 25 Campfield, 532 F. 3d at 1118 (citing Herbert Hovenkamp, Antitrust 3 (3d ed. 1999)). 26 Todd v. Exxon Corp., 275 F.3d 191, 202 (2d Cir. 2001 (quoting Roger D. Blair & Jeffrey L. Harrison, Antitrust Policy and Monopsony, 76 Cornell L. Rev. 297, 324 (1991)). 27 Compl. ¶ 1. 28 Id. ¶ 51. Page 5 of 20 to constitute the relevant band of products from which to determine what purchasers form a relevant product market. From these scant product definitions, one could just as easily circumscribe the ultimate product market to contain all purchasers of products traditionally purchased by insurance companies, health or otherwise. 11. More importantly, however, Plaintiffs’ factual allegations addressing interchangeability focus on whether insurance subscribers view various insurance products as substitutes, rather than whether sellers of healthcare services view various purchasers of healthcare services as reasonably good substitutes. After focusing on CareFirst’s market share of the "PPO market," 29 Plaintiffs allege that "employers," "employees," and "enrollees" do not view HMO products, HMO-POS products, and PPO products as reasonable substitutes. 30 In these allegations, however, Plaintiffs have addressed interchangeability of the wrong products. Alleged monopsony cases require examination of interchangeability of purchasers from the viewpoint of sellers, and Plaintiffs acknowledge in paragraphs 52 and 53 of their Complaint that the present case involves an alleged monopsony over the purchase of healthcare providers’ services. Plaintiffs, however, omit any factual allegations addressing whether healthcare providers view various types of purchasers of healthcare services, the relevant product market in this alleged monopsony case, as interchangeable. 12. Plaintiffs acknowledge that "individual patients" and "commercial and government health insurers" actually "purchase healthcare providers’ services." 31 However, Plaintiffs make no effort to address whether healthcare service providers view PPOs, HMOs, individual patients, those holding health savings accounts, or even government purchasers like 29 Id. at ¶¶ 46-49. 30 Id. at ¶ 50. 31 Id. at ¶ 51. Page 6 of 20 Medicare and Medicaid as reasonably interchangeable purchasers of healthcare services. 32 Because Plaintiffs’ market allegations fail to encompass all potentially interchangeable purchasers of healthcare services and fail even to address whether providers would view such purchasers as interchangeable, this Court should grant CareFirst’s Motion, dismissing all of Plaintiffs’ claims alleging Section 2 violations and Section 1 violations governed by the rule of reason for failing to state a claim on which relief can be granted, as well as on the grounds stated in the motions to dismiss amended complaints filed by all Defendants. 33 B. Plaintiffs Fail to Sufficiently Define a Relevant Geographic Market. 13. In determining a relevant geographic market, a plaintiff must address the area of effective competition in the specific line of relevant commerce by careful selection of the market area in which a seller, or buyer in an alleged monopsony, operates and to which buyers, or sellers in an alleged monopsony, can practicably turn. 34 The geographic market must "correspond to the commercial realities of the industry and be economically significant." 35 "The law is clear…that a geographic market cannot be drawn simply to coincide with the market area of a specific company." 36 Further, "[t]he economic significance of a geographic area does not depend upon singular elements such as population, income, political boundaries, or geographic extent, but rather upon the relationship between these elements and the characteristics of 32 In fact, one court has already found HMOs and PPOs, as purchasers of healthcare services, to constitute a single market. Blue Cross & Blue Shield United of Wis. v. Marshfield Clinic, 65 F.3d 1406 (7th Cir. 1995); see also Doctor’s Hospital of Jefferson, Inc. v. Southeast Medical Alliance, Inc., 123 F.3d 301 (5th Cir. 1997); cf. Marion Healthcare, LLC v. S. Illinois Healthcare, 12-CV-00871-DRH-PMF, 2013 WL 4510168, *9-11 (S.D. Ill. Aug. 26, 2013) (dismissing complaint because government and commercial payors are interchangeable from provider perspective). 33 See Queen City Pizza, 124 F.3d at 436 (citing TV Commc’ns Network, 964 F.2d at 1025); Campfield, 532 F.3d at 1119. 34 See Apani, 300 F.3d at 626 (citing Tampa Elec. Co. v. Nashville Coal Co., 365 U.S. 320, 327 (1961)). 35 Id. (citing Brown Shoe Co., 370 U.S. at 336-337 (internal quotation marks omitted)). 36 Bailey v. Allgas, Inc., 284 F.3d 1237, 1249 (11th Cir. 2002). Page 7 of 20 competition in the relevant product market within a particular area." 37 The failure to allege a relevant geographic market in accordance with the governing standards presents grounds for granting a motion to dismiss. 38 14. Plaintiffs proffer two potential geographic markets: the state of Maryland, and the Baltimore-Towson and Salisbury Metropolitan Statistical Areas ("MSAs"). 39 As reasons for utilizing these specific geographic markets, Plaintiffs cite only statistical data for CareFirst’s share of the PPO market in these two geographic markets. 40 First, this market definition ignores the prohibition against drawing markets simply to coincide with a given company’s specific market area. Plaintiffs have done just that, going as far as to state that "CareFirst views the relevant geographic market as Maryland." 41 15. Second, this market definition fails to account for "the characteristics of competition in the relevant product market within a particular area," 42 focusing entirely on the wrong product market. Plaintiffs’ allegations focus on the "PPO market" (i.e. insurance subscribers’ purchase of PPO-type insurance) when, as discussed above, the relevant product market in this case consists of potential purchasers of Plaintiffs’ services, not potential subscribers to one type of plan offered by CareFirst. Plaintiffs ignore competition from other purchasers of healthcare services, such as HMOs, HSAs, Medicare, and Medicaid, and, by using geographic lines, even national commercial insurance suppliers, such as Aetna or United Healthcare. 43 State lines and metropolitan statistical areas were not drawn based upon the 37 Apani, 300 F.3d at 626-627 (internal quotation marks omitted). 38 Apani, 300 F.3d at 628 (citing Queen City Pizza, 124 F.3d at 430). 39 Compl. ¶¶ 46-49. 40 Id. 41 Id. at ¶ 47. 42 Apani, 300 F.3d at 626-627. 43 E.g., Marion Healthcare, LLC v. S. Illinois Healthcare, 12-CV-00871-DRH-PMF, 2013 WL 4510168, *9-11 (S.D. Ill. Aug. 26, 2013) (dismissing complaint because government and commercial payors are interchangeable from provider perspective). Page 8 of 20 location of potentially competitive purchasers of health insurance, and to treat them as such without sufficient factual allegations to suggest those areas comply with the applicable standards for drawing geographic markets presents just the type of conclusory allegations that FRCP 8(a)(2), as interpreted by Iqbal, prohibits. 44 Because Plaintiffs’ geographic market allegations fail to present any factual matter that, if taken as true, would satisfy the criteria for determining geographic markets, this Court should grant CareFirst’s Motion, dismissing all of Plaintiffs’ claims alleging Section 2 violations and Section 1 violations governed by the rule of reason for failing to state a claim on which relief can be granted, as well as on the grounds stated in the motions to dismiss amended complaints filed by all Defendants. 45 C. Plaintiffs Fail to Allege Market Power Within the Correct Market. 16. Even assuming Plaintiffs adequately pled product and geographic markets, Plaintiffs’ allegations of market power allege that CareFirst possesses a large market share, and therefore market power, in the incorrect market. When the market share statistics offered to demonstrate market power do not confine themselves to a defendant’s share of the correct relevant market, a plaintiff has not demonstrated market power. 46 17. Even accepting that Plaintiffs’ extremely broad product market (i.e., purchasers of healthcare providers’ services) correctly identifies the relevant product market, Plaintiffs offer factual allegations as to market share only for the market for the purchase of a specific type of insurance product by subscribers to insurance. 47 Plaintiffs offer no factual allegations directed at the share held by CareFirst of the market Plaintiffs identify as relevant, the purchase of healthcare providers’ services. Instead, Plaintiffs offer one conclusory statement: "CareFirst’s 44 See Iqbal, 556 U.S. at 679. 45 See Apani, 300 F.3d at 628 (citing Queen City Pizza, 124 F.3d at 430). 46 Bailey, 284 F.3d at 1249-1250 (holding that expert testimony identifying market share of a geographic market different from that claimed to be the relevant geographic market failed to establish market power). 47 Compl. ¶¶ 46-49. Page 9 of 20 market power in the market for PPO plans acts to give CareFirst monopsony power in the input market for healthcare providers and other healthcare services, as it is the primary purchaser of these services in the relevant geographic market." 48 18. Plaintiffs’ factual allegations that CareFirst sells sixty-four, sixty-nine, or even seventy percent of PPO insurance in the alleged geographic market 49 ignores the product market for the purchase of healthcare services, disregarding other purchasers of healthcare providers’ services in the alleged product market such as HMOs, HSAs, individual patients, self-insured corporations, Medicare, and Medicaid. Such a conclusory statement is not entitled to an assumption of truth and should be disregarded. 50 Without that single conclusory statement, Plaintiffs’ Complaint contains no allegations of market power in the relevant markets. Thus, this Court should grant CareFirst’s Motion, dismissing all of Plaintiffs’ claims alleging Section 2 violations and Section 1 violations governed by the rule of reason for failing to state a claim on which relief can be granted, as well as on the grounds stated in the motions to dismiss amended complaints filed by all Defendants. III. PLAINTIFFS’ "IN-NETWORK CONSPIRACY" ALLEGATIONS FAIL TO STATE A PER SE CLAIM. 19. In order to state a claim that Plaintiffs’ so-called "In-Network Conspiracy" is per se illegal under Section 1, Plaintiffs must allege an agreement that (1) is purely horizontal, (2) has no possible procompetitive benefit, and (3) has had its anticompetitive character confirmed by judicial experience. 51 Plaintiffs have failed to allege any of these elements. At most, Plaintiffs’ largely conclusory allegations, even when cloaked with an assumption of truth to 48 Id. at ¶ 52. 49 Id. at ¶¶ 46, 48. 50 Iqbal, 556 U.S. at 679. 51 See, e.g., Leegin Creative Leather Prods., Inc. v. PSKS, Inc., 551 U.S. 877, 881, 885–87 (2007); Am. Needle v. Nat’l Football League, 130 S. Ct. 2201, 2216–17 (2010); In re Sulfuric Acid Antitrust Litig., 703 F.3d 1004, 1010–13 (7th Cir. 2012) (Posner, J.). Page 10 of 20 which they are not entitled, describe a series of unilateral decisions, with something other than price-fixing as its principle objective. Such unilateral decisions, even if ultimately proven, would not entitle Plaintiffs to any relief under the per se rule. A. Plaintiffs Fail to Allege Any Agreement, Much Less Any Horizontal Agreement. 20. Plaintiffs allege CareFirst has refused to negotiate and "has utilized its market power to threaten, intimidate, and even terminate in-network healthcare providers who utilize Plaintiffs’ facilities." 52 Plaintiffs further allege various communications and correspondence between CareFirst and various providers in support of its allegations. 53 However, Plaintiffs fail to allege the existence of any actual agreement between CareFirst and the alleged in-network "unwilling co-conspirator" providers. 54 Rather, Plaintiffs’ allegations point to lawful unilateral business decisions of CareFirst rather than any unlawful conspiracy. 21. Unilateral refusals to deal are lawful absent narrow circumstances, and "as a general rule, businesses are free to choose the parties with whom they will deal, as well as the prices, terms, and conditions of that dealing." 55 Further, "[A] health insurer’s unilateral decisions about the prices it will pay providers do not violate the Sherman Act – unless the prices are'predatory’ or below incremental cost – even if the insurer is assumed to have monopoly power in the relevant market…the insurer – like any buyer of goods or services – is lawfully entitled to bargain with its providers for the best price it can get…[E]ven if the buyer has monopoly power, an antitrust court…will not interfere with a buyer’s (nonpredatory) determination of price." 56 Plaintiffs fail to demonstrate that the alleged activities of CareFirst 52 Compl. ¶¶ 3, 6. 53 Id. at ¶¶ 63-92. 54 Id. at ¶ 77. 55 Pacific Bell Telephone Co. v. Linkline Communications, Inc., 555 U.S. 438, 448 (2009). 56 Ocean State Physicians Health Plan, Inc. v. Blue Cross & Blue Shield of Rhode Island, 883 F.2d 1101, 1111 (1st Cir. 1989). Page 11 of 20 were anything other than the unilateral business decisions of CareFirst, or that its prices were predatory. 22. Further, in order to state a claim that the "In-Network Conspiracy" is per se illegal, Plaintiffs must adequately allege a horizontal agreement, as all vertical agreements are judged under the rule of reason. 57 "Restraints imposed by agreement between competitors have traditionally been denominated as horizontal restraints, and those imposed by agreement between firms at different levels of distribution as vertical restraints." 58 Therefore, even assuming Plaintiffs have sufficiently pled something more than unilateral business decision-making activity, and sufficiently pled that an agreement exists, such an agreement, between a payor and providers, is clearly not horizontal. Thus, this Court should grant CareFirst’s Motion, dismissing all of Plaintiffs’ claims alleging per se violations under Section 1 for failing to state a claim on which relief can be granted, as well as on the grounds stated in the motions to dismiss amended complaints filed by all Defendants. B. At Most, Plaintiffs Allege Selective Contracting, a Procompetitive Practice Governed by the Rule of Reason. 23. At most, Plaintiffs allege CareFirst is engaged in selective contracting, or a vertical arrangement for the payment of predetermined fees or reimbursement levels for covered services by the payor to certain preferred or "in network" providers. Selective contracting with providers for inclusion in insurer networks benefits consumers because it permits health insurers to "control the quality and cost of health-care delivery." 59 As a result, selective contracting is 57 Leegin Creative Leather Prods., Inc. v. PSKS, Inc., 551 U.S. 877 (2007) (price restraints); Cont’l TV, Inc. v. GTE Sylvania Inc., 433 U.S. 36 (1977) (non-price restraints). 58 Bus. Elecs. Corp. v. Sharp Elecs. Corp., 485 U.S. 717, 730 (1988) (quoting Nw. Wholesale Stationers, Inc. v. Pac. Stationary & Printing Co., 472 U.S. 284, 289-290 (1985)). 59 Kentucky Ass'n of Health Plans, Inc. v. Miller, 538 U.S. 329, 332 (2003); see also Kennedy v. Conn. General Life Ins. Co., 924 F.2d 698, 699 (7th Cir. 1991) (Easterbrook, J.). Page 12 of 20 governed by the rule of reason. 60 Under the rule of reason, the "test of legality is whether the restraint imposed is such as merely regulates and perhaps thereby promotes competition or whether it is such as may suppress or even destroy competition." 61 The rule of reason requires a plaintiff to prove that the conduct of defendants has no procompetitive benefit or justification. 62 Additionally, a plaintiff must establish that the defendants’ conduct results in an anticompetitive effect on the relevant market by either a showing that defendant’s behavior had an actual detrimental effect on competition (as opposed to competitors), or that the behavior had the potential for genuine adverse effects on competition. 63 In order to do the latter, the plaintiff must provide a definition of the relevant market and establish that the defendants possessed power in that market, which, as set forth above, Plaintiffs have failed to do. 24. Setting aside that shortcoming, however, strong evidence exists in case law supporting the contention that selective contracting results in procompetitive benefits to the relevant market. 64 Moreover, the Department of Justice and the Federal Trade Commission have published Statements of Antitrust Enforcement Policy in Health Care that explain how the antitrust laws should be applied to the healthcare sector, recognizing the procompetitive benefits of provider networks that exclude particular providers, stating specifically that "such selective 60 Levine v. Cent. Fla. Med. Affiliates, 72 F.3d 1538, 1549-50 (11th Cir. 1996) 61 Chicago Bd. of Trade v. United States, 246 U.S. 231, 238, 38 S. Ct. 242, 244, 62 L. Ed. 683 (1918). 62 Levine, 72 F.3d at 1551; Consultants & Designers, Inc. v. Butler Serv. Group, Inc., 720 F.2d 1553, 1562 (11th Cir. 1983). 63 Id. 64 Stop & Shop Supermarket Co. v. Blue Cross & Blue Shield of R.I., 373 F.3d 57, 62-63 (1st Cir. 2004) (noting that a closed network should lower costs to the health plan); Abraham v. Intermountain Health Care, 461 F.3d 1249, 1261 (10th Cir. 2006) (observing that paneling optometrists in addition to ophthalmologists may not be more cost-efficient on the whole given the multi-dimensional nature of managed care); Hassan v. Indep. Practice Assocs., P.C., 698 F. Supp. 679, 694 (E.D. Mich. 1988) (upholding plaintiff physician’s exclusion from an IPA, in part because he refused to comply with the IPA’s allergy testing utilization practice); Doctor’s Hosp. v. Se. Med. Alliance, 123 F.3d 301, 308-09 (5th Cir. 1997) (applying the rule of reason to uphold the exclusion of a competing hospital by a provider-controlled PPO). Page 13 of 20 contracting may be a method through which networks limit their provider panels in an effort to achieve quality and cost-containment goals, and thus enhance their ability to compete against other networks," and "one reason often advanced for selective contracting is to ensure that the network can direct a sufficient patient volume to its providers to justify price concessions or adherence to strict quality controls by the providers." 65 Therefore, as courts, the Department of Justice, and the Federal Trade Commission recognize the procompetitive benefits of selective contracting, any of Plaintiffs’ allegations that such vertical agreements violate Section 1 fail to pass scrutiny under the rule of reason. For the reasons stated above, as well as on the grounds stated in the motions to dismiss amended complaints filed by all Defendants, this Court should grant CareFirst’s Motion, dismissing all of Plaintiffs’ claims based on any vertical agreement of CareFirst. C. Plaintiffs’ "In-Network Conspiracy" Does Not Allege a Price-Fixing Conspiracy. 25. As discussed in Section III.A. above, Plaintiffs have not alleged any agreement related to the "In-Network Conspiracy." However, even if Plaintiffs had plausibly alleged such an agreement, it would, at most, constitute a series of vertical agreements. Even assuming Plaintiffs had alleged a purely horizontal agreement, in order to state a claim that the "In-Network Conspiracy" is per se illegal price fixing, Plaintiffs must also adequately allege that the "In-Network Conspiracy" constitutes "naked" price-fixing—that is, an agreement that fixes 65 See Health Care Statements, Statement 9.B.2.c ("Exclusion of Particular Providers"), available at http://www.ftc.gov/bc/healthcare/industryguide/policy/statement9.htm (noting additionally that "most multiprovider networks will contract with some, but not all, providers in an area," "[selective contracting] may also help the network create a favorable market reputation based on careful selection of high quality, cost-effective providers," and "selective contracting may be procompetitive by giving non-participant providers an incentive to form competing networks"). Page 14 of 20 prices but produces no possible procompetitive benefit and is not connected to a larger, procompetitive endeavor. 66 26. In order to be classified as a price-fixing conspiracy, an agreement must, at a minimum, contain some setting of price or price levels to be charged. 67 The fact that the agreement may ultimately have the effect of raising or lowering prices does not bring that agreement under the per se rule, even if the authors of the agreement intended the agreement to have exactly that effect. 68 27. Plaintiffs allege that the purported agreements at issue in the "In-Network Conspiracy" require that providers in CareFirst’s networks treating patients insured by CareFirst not refer those patients to out-of-network facilities, and that these agreements "seek to artificially lower, fix, or maintain the price at which CareFirst will reimburse Plaintiffs for the medical services rendered to insureds." 69 Notwithstanding the lack of factual support, an agreement that does not actually set prices or price levels, but merely has some effect on prices as its goal, is not a price-fixing agreement and cannot be illegal per se. Because Plaintiffs have alleged neither a horizontal agreement nor a price-fixing agreement in their "In-Network Conspiracy" claim, Plaintiffs have failed to state a claim for the "In-Network Conspiracy" under the per se rule, and this Court should grant CareFirst’s Motion, dismissing all of Plaintiffs’ claims alleging per se violations for failing to state a claim on which relief can be granted, as well as on the grounds stated in the motions to dismiss amended complaints filed by all Defendants. IV. ALL BUT THREE PLAINTIFFS LACK STANDING UNDER THE SECTION 2 MONOPOLY AND ATTEMPTED MONOPOLY CLAIMS AND THE "IN-NETWORK CONSPIRACY" CLAIM. 66 Broadcast Music, Inc. v. CBS, Inc., 441 U.S. 1, 19–20 (1979). 67 Sharp, 485 U.S. at 726-727, 735-736. 68 Id. at 728. 69 Compl. ¶¶ 187-188. Page 15 of 20 28. In order for a private plaintiff to recover for a violation of Section 1 or 2 of the Sherman Act, the plaintiff must show that it has actually suffered an injury. 70 Facts alleged on information and belief that some harm will occur in the future do not sufficiently allege injury in fact, and therefore present grounds on which a motion to dismiss should be granted. 71 29. In their factual allegations related to the "In-Network Conspiracy" claim and the Monopolization and Attempted Monopolization claims, Plaintiffs allege that CareFirst has enforced its purported agreements not to utilize out-of-network facilities against providers utilizing the facilities of three Plaintiffs: Westminster Surgery Center, LLC, Maple Lawn Surgery Center, LLC, and Surgcenter of Glen Burnie, LLC. 72 According to Plaintiffs, enforcement of these alleged agreements has caused Plaintiffs’ injuries under the "In-Network Conspiracy" claim and the Monopolization and Attempted Monopolization claims. 73 Plaintiffs further allege that, "on information and belief, CareFirst is gearing up for another round of attempted and threatened terminations of healthcare providers who provide services at out-of-network facilities in Maryland, including the Plaintiffs." 74 Thus, the only allegation of injury to any Plaintiffs other than Westminster Surgery Center, LLC, Maple Lawn Surgery Center, LLC, and Surgcenter of Glen Burnie, LLC, are contained in a conclusory allegation that, on information and belief, some harm may occur in the future. Such conclusory allegations alleging harm that has not yet, and may never, occur, does not sufficiently describe injury necessary to state a claim. Accordingly, the Court should dismiss the "In-Network Conspiracy" claim and the 70 Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 489 (1977). 71 Cont’l Orthopedic Appliances, Inc. v. Health Ins. Plan of Greater N.Y., 965 F. Supp. 367, 372 (E.D.N.Y. 1997). 72 Compl. ¶¶ 61-100. It bears noting that Plaintiffs’ Complaint ignores the fact that Westminster Surgery Center, LLC and Maple Lawn Surgery Center, LLC’s terminations were reversed in arbitration, and Defendant has paid all sums due and owing to each. 73 Compl. ¶¶ 193, 202, 218, 220, 223, 225, 228, 230, 233, 235. 74 Id. at ¶ 100. Page 16 of 20 Monopolization and Attempted Monopolization claims as to all Plaintiffs except those three listed by name above for failure to adequately allege injury in fact. V. PLAINTIFFS’ "IN-NETWORK CONSPIRACY," MONOPOLY, AND ATTEMPTED MONOPOLY CLAIMS FAIL TO ALLEGE ANTICOMPETITIVE CONDUCT. 30. In order to state a claim under either Section 1 or Section 2 of the Sherman Act, a plaintiff must sufficiently allege that the purported agreement or conduct at issue is anticompetitive. 75 More than monopoly power is necessary to make setting anticompetitive prices unlawful, 76 and a monopsony buyer is free to use its market power to bargain for the lowest possible price for its customers. 77 Further, "the Sherman Act'does not restrict the long recognized right of [a] trader or manufacturer engaged in an entirely private business, freely to exercise his own independent discretion as to parties with whom he will deal.’" 78 Based on these principles, agreements between healthcare providers and health insurers setting reimbursement rates have been found by several courts not to constitute sufficiently anticompetitive conduct to permit recovery. 79 These agreements setting prices do not violate antitrust laws unless the prices are predatory, and even when coupled with refusals to deal with providers who do not agree to participate in the insurer’s network. 80 When a plaintiff’s allegations describe an agreement that is not anticompetitive, the court should dismiss the complaint for failure to state a claim. 81 75 Austin v. Blue Cross & Blue Shield of Al., 903 F.2d 1385, 1390 (11th Cir. 1990). 76 Kartell v. Blue Shield of Mass., Inc., 749 F.2d 922, 923, 931 (1st Cir. 1984), cert. denied, 471 U.S. 1029 (1985). 77 Austin, 903 F.2d at 1391. 78 Verizon Commc’ns Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 US 398, 408 (2004) (quoting United States v. Colgate & Co., 250 U. S. 300, 307 (1919)); Kartell, 749 F.2d at 923, 932. 79 See, e.g., Austin, 903 F.2d at 1390-91; Travelers Ins. Co. v. Blue Cross of W. Pa., 481 F.2d 80, 84 (3d Cir. 1973), cert. denied, 414 U.S. 1093 (1973); Kartell, 749 F.2d at 923, 931. 80 Ocean State, 883 F.2d at 1111 (1st Cir. 1989); see also Kartell, 749 F.2d at 928, 932 (holding that agreements setting prices do not violate antitrust laws even when the prices are "uncompetitively" or "unreasonably" low). 81 Austin, 903 F.2d at 1390-92. Page 17 of 20 31. In Kartell, the plaintiffs alleged that Blue Shield of Massachusetts violated Sections 1 and 2 of the Sherman Act by setting uncompetitively low fixed reimbursement prices in agreements with its in-network doctors and by refusing to deal with any non-participating doctors. 82 Based on the premise that firms, even those possessing monopoly or monopsony power, may deal with whomever they please and may use their power to insist on the best price for services, then-Judge Breyer, writing for the Court, determined that such conduct, as a matter of law, did not violate either Section 1 or 2 of the Sherman Act. 83 32. Plaintiffs have alleged facts almost identical to those in Kartell in support of their "In-Network Conspiracy" claim and their Monopoly and Attempted Monopolization claims. Plaintiffs allege that CareFirst’s agreements with its providers violate Section 1 because they prohibit referrals to out-of-network provider facilities (i.e. that CareFirst will not reimburse out-of-network providers for their services, just as in Kartell). 84 Plaintiffs further allege that such agreements allow CareFirst to insist on "lower reimbursement rates for services, [sic] rendered." 85 Plaintiffs then allege that CareFirst’s enforcement of these lawful agreements constitutes monopolization and attempted monopolization in violation of Section 2. 86 Just as in Kartell, CareFirst is free to determine with whom and on what terms it will deal, and its agreements with providers setting reimbursement rates and prohibiting providers from forcing CareFirst to deal with out-of-network providers by utilizing out-of-network facilities are, as a matter of law, not anticompetitive. Accordingly, Plaintiffs have failed to state a claim on which relief can be granted under their "In-Network Conspiracy," Monopolization, and Attempted Monopolization claims, and this Court should grant CareFirst’s Motion, dismissing said claims. 82 Kartell, 749 F.2d at 923-924. 83 Id. at 927-932. 84 Compl. ¶¶ 187-189. 85 Id. at ¶ 189. 86 Id. at ¶¶ 216-235. Page 18 of 20 CONCLUSION 33. For the foregoing reasons, and on the grounds stated in the motions to dismiss amended complaints filed by all Defendants, CareFirst respectfully requests that the Court grant CareFirst’s Motion and dismiss Plaintiffs’ Complaint, with prejudice, and in its entirety. Page 19 of 20 Respectfully submitted,/s/Brian K. Norman Brian K. Norman Shamoun & Norman, LLP 1775 Wittington Place, Suite 200, LB 25 Dallas, Texas 75234 Tel: 214.987.1745 bkn@snlegal.com ATTORNEY FOR CAREFIRST OF MARYLAND, INC. H. James Koch ARMBRECHT JACKSON LLP 63 S. Royal Street, Suite 1300 Mobile, AL 36602 Tel: 251.405.1300 hjk@ajlaw.com ATTORNEY FOR CAREFIRST OF MARYLAND, INC. Kimberly R. West WALLACE, JORDAN, RATLIFF & BRANDT, L.L.C. 800 Shades Creek Parkway, Suite 400 Birmingham, AL 35209 Tel: 205.870.0555 kwest@wallacejordan.com LIAISON COUNSEL Page 20 of 20

MOTION to Dismiss for Lack of Personal Jurisdiction and, Alternatively, Improper Venue by Capital Blue Cross.

Case 2:13-cv-20000-RDP Document 112 Filed 09/30/13 Page 1 of 11 FILED 2013 Sep-30 PM 04:13 U.S. DISTRICT COURT N.D. OF ALABAMA IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ALABAMA SOUTHERN DIVISION) IN RE: BLUE CROSS BLUE SHIELD) Master File No. 2:13-CV-20000-RDP ANTITRUST LITIGATION) (MDL NO. 2406)) This document relates to:) American Electric Motor Services, Inc., et al. v. Blue Cross Blue Shield of Alabama, et al., Case No. 2:12-cv-02169-RDP Jerry L. Conway, D.C., et al. v. Blue Cross and Blue Shield of Alabama, et al., Case No. 2:12-cv-02532-RDP MOTION TO DISMISS CAPITAL BLUE CROSS FOR LACK OF PERSONAL JURISDICTION AND, ALTERNATIVELY, IMPROPER VENUE Capital Blue Cross ("CBC")1 hereby moves to dismiss the complaints against it for lack of personal jurisdiction and, alternatively, improper venue.2 See Fed. R. Civ. P. 12(b)(2) & (3). INTRODUCTION CBC is named as a defendant in only two complaints: the provider-plaintiffs’ Consolidated Amended Complaint filed on September 3, 2013, as Document 189 in Jerry L. Conway, D.C., et al. v. Blue Cross and Blue Shield of Alabama, et al., Case No. 2:12-cv-02532-1 CBC has arbitration agreements in place with a number of putative class members. Because those putative class members are not currently parties to this matter, the arbitration issue is not ripe for this Court’s consideration. Nevertheless, CBC expressly reserves all and does not waive any of its rights under those agreements, including but not limited to its rights to arbitrate the merits of the complaints in this action. 2 CBC adopts and incorporates herein by reference the legal framework and analysis set forth in the jurisdictional motion filed by certain defendants represented by Crowell & Moring LLP (hereinafter "C&M Brief"). CBC likewise requests that the Court stay briefing and consideration of this Motion until it has disposed of the defendants’ Rule 12(b)(6) motions. Case 2:13-cv-20000-RDP Document 112 Filed 09/30/13 Page 2 of 11 RDP (N.D. Ala.), and the complaint in American Electric Motor Services, Inc., et al. v. Blue Cross Blue Shield of Alabama, et al., Case No. 2:12-cv-02169-RDP (N.D. Ala.), as amended in the notice filed on September 6, 2013, as Document 172 attaching the subscriber-plaintiffs’ Consolidated Class Action Complaint as Document 172-1. CBC waived service of the summons with respect to Conway on September 11, 2013. CBC asked plaintiffs’ counsel in American Electric Motor Services, on multiple occasions, to provide it with a form for waiver of service of the summons. No such form has been provided to CBC as of the date of this filing. Nevertheless, this Motion is directed toward both complaints. This Court lacks jurisdiction over CBC. CBC is a Pennsylvania nonprofit corporation that confines its activities to a 21-county service area in Pennsylvania. CBC has not purposefully availed itself of the privilege of conducting any activities in Alabama, and it certainly has not done so with regard to any of the alleged events related to plaintiffs’ causes of action. CBC’s only connection with Alabama are that a small number of its members have unilaterally sought health care services in Alabama, and CBC does business in Pennsylvania with a few vendors who maintain an Alabama address for payment. The unreasonableness and burdensomeness of subjecting CBC to suit in this distant forum, toward which it has directed none of its activities, renders suit here against CBC constitutionally impermissible. Alternatively, venue is improper for the same and similar reasons. FACTUAL BACKGROUND CBC is a Pennsylvania nonprofit corporation whose activities are confined to a 21-county area in central Pennsylvania. (Exhibit 1, Declaration of Kimberly Meals, ¶ 3.)3 CBC accepts 3 CBC has several wholly-owned subsidiaries, but those subsidiaries’ activities are not relevant to this Court’s jurisdiction or venue analysis. See, e.g., Consolidated Development Corp. v. Sherritt, Inc., 216 F.3d 1286, 1293 (11th Cir. 2000). 2 Case 2:13-cv-20000-RDP Document 112 Filed 09/30/13 Page 3 of 11 enrollment for individual policies only from persons residing in that area. (Id.) CBC provides group health insurance coverage and administrative services only to self-insured groups, such as employers, that have their headquarters or other corporate presence within that area. (Id. ¶ 4.) CBC’s insurance policies and contracts are issued in Pennsylvania pursuant to Pennsylvania law, are governed by Pennsylvania law (except where federal law applies), and include provisions stating that disputes regarding those policies/contracts are to be brought within the state or federal courts of Dauphin County, Pennsylvania. (Id. ¶ 5.) Because CBC’s activities are confined to central Pennsylvania, it has virtually no contact with Alabama. CBC does not contract with Alabama hospitals or other Alabama medical facilities or health care providers. (Id. ¶ 6.) CBC does not own property in Alabama and does not maintain any bank accounts in Alabama. (Id. ¶ 7.) CBC does not maintain an office in Alabama. (Id. ¶ 8.) CBC does not employ anyone in Alabama. (Id. ¶ 9.) CBC has no registered agent in Alabama. (Id. ¶ 10.) CBC does not pay taxes in Alabama. (Id. ¶ 11.) CBC is not licensed to do business in Alabama, does not conduct any business in Alabama, and does not solicit business in Alabama. (Id. ¶ 12.) The contacts that CBC has with Alabama are incidental and not the result of CBC directing any activities toward Alabama. For example, approximately of CBC’s approximately members have an Alabama address on file with CBC. (Id. ¶ 13.) This represents approximately of CBC’s members. (Id.) CBC contracted with each of those subscribers, as it does in all cases, in CBC’s 21-county service area either with the subscriber directly as an individual or through the subscriber’s employer as a member of a group. (Id.) CBC thus did not direct any of its activities toward Alabama. (Id.) Instead, each of these members unilaterally chose to reside in Alabama. (Id.) 3 Case 2:13-cv-20000-RDP Document 112 Filed 09/30/13 Page 4 of 11 Because CBC does not contract with Alabama hospitals or other Alabama medical facilities or health care providers, CBC’s payments for subscribers’ receipt of services in Alabama are generally made through the BlueCard Program. (Id. ¶ 14.) In calendar year 2012, CBC’s payments for services to members residing in Alabama, including payments to BlueCross BlueShield of Alabama, including through the BlueCard Program, and direct payments to members and providers, were in the approximate amount of for health care services and for prescription drugs, for a total of. (Id.) As CBC’s total calendar year 2012 payments for members were in the approximate amount of for health care services and for prescription drugs, for a total of, CBC’s calendar year 2012 payments for members residing in Alabama represented of CBC’s total calendar year 2012 payments. (Id.) For calendar year 2013, out of CBC’s approximately 48,000 vendors, four have an Alabama address to which CBC sends/wires payment. (Id. ¶ 15.) Those four vendors, and CBC’s approximate payments to them for calendar year 2013, are: EBSCO Information Services,, Extreme Group Holdings LLC,, Mainline Information Systems,, and Personal Best,. (Id.) In all cases, CBC does business with those vendors only in CBC’s 21-county service area, not in Alabama. (Id. ¶¶ 15-18.) For example, Maineline Information Systems, an IT services company headquartered in Florida, provides services to CBC in Pennsylvania through offices and personnel in Pennsylvania. (Id. ¶ 16.) LEGAL STANDARDS CBC joins this part of the C&M Brief. 4 Case 2:13-cv-20000-RDP Document 112 Filed 09/30/13 Page 5 of 11 ARGUMENT I. THERE IS NO PERSONAL JURISDICTION OVER CBC UNDER SECTION 12 OF THE CLAYTON ACT. CBC joins this part of the C&M Brief. Plaintiffs cannot rely on Section 12 of the Clayton Act as a basis for personal jurisdiction over CBC if CBC is not amenable to service in the Northern District of Alabama under Section 12. A. Plaintiffs must meet the venue requirement under Section 12 to take advantage of its nationwide service clause. CBC joins this part of the C&M Brief. This Court should follow the majority approach and require the plaintiffs to show that venue in the Northern District of Alabama is proper under Section 12 before they may rely on Section 12’s nationwide service clause. B. Plaintiffs cannot establish that venue is proper under Section 12. CBC joins this part of the C&M Brief. Plaintiffs have not alleged facts to show that venue is proper for claims against CBC under Section 12 in the Northern District of Alabama. CBC is not incorporated in the Northern District of Alabama and is thus not an inhabitant of this district. In addition, CBC cannot be found in this district and does not transact business of any substantial character in this district. CBC’s contacts with Alabama are isolated, sporadic, and peripheral, and are the result of the unilateral decisions of others to avail themselves of health care services in Alabama. With regard to its vendors with an Alabama address, CBC does business with them solely in Pennsylvania. Accordingly, venue of the claims against CBC is improper under Section 12. C. Even if Section 12’s nationwide service provision were available here, jurisdiction over CBC would not comport with due process. CBC joins this part of the C&M Brief. This Court’s exercise of personal jurisdiction over CBC pursuant to Section 12 would not satisfy the Due Process Clause of the Fifth Amendment. 5 Case 2:13-cv-20000-RDP Document 112 Filed 09/30/13 Page 6 of 11 1. Litigating in Alabama would impose an unreasonable burden on CBC. CBC joins this part of the C&M Brief. CBC does not solicit or conduct substantial business in Alabama. CBC instead operates only within a 21-county service area in Pennsylvania, to which it confines all of its activities. CBC’s contacts outside of that area are due solely to the unilateral decisions of a small portion of its members to obtain health care services outside of that area and the fortuity of where vendor payments are remitted from time to time for services performed solely in Pennsylvania. CBC would therefore be burdened by having to mount a defense in Alabama, a remote jurisdiction to which it has no real ties. Alabama also has no interest in adjudicating a dispute regarding a health insurer that operates only in Pennsylvania. Finally, there is a federal forum available in Pennsylvania.4 2. Federal interests do not outweigh the burden on CBC. CBC joins this part of the C&M Brief. An analysis of the federal interest in litigating this case in Alabama shows that it does not outweigh the burden imposed on CBC of doing so. II. PLAINTIFFS CANNOT ESTABLISH PERSONAL JURISDICTION UNDER THE ALABAMA LONG ARM STATUTE. CBC joins this part of the C&M Brief. A. CBC does not have sufficient minimum contacts with Alabama. CBC joins this part of the C&M Brief. This Court may exercise personal jurisdiction over CBC pursuant to the Alabama long-arm statute only if doing so would comport with the Due Process Clause of the Fourteenth Amendment. 4 Indeed, a case filed in Pennsylvania is currently a part of this MDL. See Scheller, et al. v. Highmark, Inc., et al., 2:13-cv-00711-CB (W.D. Pa.). 6 Case 2:13-cv-20000-RDP Document 112 Filed 09/30/13 Page 7 of 11 1. CBC has no meaningful contact with Alabama. CBC joins this part of the C&M Brief. There is no personal jurisdiction in Alabama over CBC under either a general or specific theory of jurisdiction. The plaintiffs do not allege facts establishing any wrongful acts specific to CBC. (Cf. Conway DE 189 ¶ 170 (alleging that CBC "compete[s] in Pennsylvania" with Highmark); American Electric DE 172-1 ¶¶ 217-18 (alleging that CBC and the other Pennsylvania Blues "exercise market power" "in their respective service areas in Pennsylvania" and concluding that they allegedly "have led the way in causing supra-competitive prices.").) The acts CBC is alleged to have taken occurred entirely within Pennsylvania, not Alabama. (Id.) Thus, none of the events or omissions is alleged to have occurred in Alabama. To the extent that plaintiffs allege that effects of CBC’s alleged wrongful conduct were felt in Alabama, jurisdiction is still lacking because the plaintiffs have not alleged that CBC directed any actions, much less allegedly tortious ones, toward Alabama. See Calder v. Jones, 465 U.S. 783, 789-90 (1984) (Effects-test is met only when defendant "expressly aim[s]" intentional, allegedly tortious actions at the forum state with knowledge that the injury would be felt there such that defendant could "‘reasonably anticipate being haled into court there’" to answer for them.) (citations omitted). Moreover, in the context of an alleged nationwide conspiracy in which effects were felt in Alabama no more than in any other state, the Calder effects-test does not establish jurisdiction over CBC in Alabama. See Brown v. Kerkhoff, 504 F.Supp.2d 464, 499 (S.D. Iowa 2007); see also Nat’l Athletic Trainers’ Ass’n, Inc. v. Am. Physical Therapy Ass’n, No. 3:08-CV-0158-G, 2008 WL 4146022, **9-10 (N.D. Tex. Sept. 9, 2008) (finding no jurisdiction in response to defendant’s argument that "any allegedly anti-competitive agreements with [co-defendant] would have been entered into outside of Texas, and 7 Case 2:13-cv-20000-RDP Document 112 Filed 09/30/13 Page 8 of 11 additionally that any wrongful conduct by the [co-defendant] directed at Texas cannot be imputed to the [defendant]"). The evidence provided by CBC further confirms its lack of meaningful contacts with Alabama. The facts establish that CBC’s contacts are strictly limited to a very small portion of CBC’s payments for services to members, as a result of a small number of members’ unilateral decision to obtain health care services in Alabama. The very limited contacts that CBC has with Alabama are not sufficient to establish general jurisdiction. Likewise, CBC has no contacts with Alabama that would give rise to specific jurisdiction in this case. CBC has not purposefully availed itself of Alabama; rather, CBC has honored contracts with subscribers it entered into in Pennsylvania who have since unilaterally sought health care services in Alabama. Moreover, CBC’s payments for services obtained in Alabama did not give rise to and are not related to plaintiffs’ antitrust claims for the purposes of establishing specific jurisdiction. Plaintiffs do not challenge in this litigation any of CBC’s payments for health care services provided in Alabama. 2. The BlueCard Program does not establish personal jurisdiction. CBC joins this part of the C&M Brief. As numerous courts have found, participation in the BlueCard Program does not support an exercise of personal jurisdiction over a Blue Cross or Blue Shield entity from another state. 3. Vague conspiracy allegations do not establish personal jurisdiction. CBC joins this part of the C&M Brief. Plaintiffs have not alleged any actionable conspiracy to violate any antitrust laws or that CBC participated in any purported conspiracy. Plaintiffs do not allege that CBC directed any actions toward Alabama. Plaintiffs do not allege 8 Case 2:13-cv-20000-RDP Document 112 Filed 09/30/13 Page 9 of 11 contacts between CBC and Alabama or how any such contacts relate to any purported conspiracy. Plaintiffs do not allege that CBC performed any overt act—in Alabama or elsewhere—in furtherance of any purported conspiracy. B. Exercising personal jurisdiction over CBC would not comport with "fair play and substantial justice." CBC joins this part of the C&M Brief. Subjecting CBC to jurisdiction here would not comport with "fair play and substantial justice" because (1) the burden on CBC in defending itself here would be severe; (2) Alabama’s interest in adjudicating CBC’s non-forum conduct is less than Pennsylvania’s and no greater than any other state’s; (3) the plaintiffs’ interest in obtaining convenient and effective relief is equally satisfied by seeking relief in a forum in which CBC is subject to jurisdiction; (4) the interstate judicial system’s interest in obtaining the most efficient resolution of controversies is served by the MDL proceedings, not by subjecting CBC to suit in a distant and inconvenient forum; and (5) the shared interest of the states in furthering fundamental substantive social policies is served by subjecting CBC to suit in the state in which it is subject to regulatory oversight. See Robinson v. Giarmarco & Bill, P.C., 74 F.3d 253, 259 (11th Cir. 1996). III. VENUE IS IMPROPER UNDER SECTIONS 4 AND 16 OF THE CLAYTON ACT AND 28 U.S.C. § 1391. CBC joins this part of the C&M Brief. A. There is no venue under Sections 4 and 16 of the Clayton Act. CBC joins this part of the C&M Brief. With respect to Section 4, CBC does not reside, cannot be found, and does not have an agent in this district. With respect to Section 16, this Court does not have personal jurisdiction over CBC. 9 Case 2:13-cv-20000-RDP Document 112 Filed 09/30/13 Page 10 of 11 B. There is no venue under 28 U.S.C. § 1391. CBC joins this part of the C&M Brief. With respect to § 1391(b)(1), CBC is not subject to personal jurisdiction in this district. With respect to § 1391(b)(2), a substantial part of the events or omissions alleged did not take place in this district. With respect to § 1391(b)(3), CBC is not subject to personal jurisdiction in this district, and the plaintiffs have not shown that there is no other district in which venue would be proper.5 CONCLUSION For the foregoing reasons and the reasons set forth in the C&M Brief, CBC respectfully requests that the Court dismiss the two complaints brought against it. DATED: September 30, 2013 Respectfully submitted, s/Robert K. Spotswood Robert K. Spotswood (SPO 001) Michael T. Sansbury (SAN 054) Joshua K. Payne (PAY 024) SPOTSWOOD SANSOM & SANSBURY LLC One Federal Place 1819 Fifth Avenue North, Suite 1050 Birmingham, Alabama 35203 TEL: (205) 986-3620 FAX: (205) 986-3639 E-mail: rks@spotswoodllc.com msansbury@spotswoodllc.com jpayne@spotswoodllc.com Attorneys for Defendant Capital Blue Cross 5 CBC notes that it preserves, and does not waive, its right to request severance and transfer for trial pursuant to 28 U.S.C. § 1404(a) should such a request become necessary. 10 Case 2:13-cv-20000-RDP Document 112 Filed 09/30/13 Page 11 of 11 CERTIFICATE OF SERVICE I hereby certify that, on September 30, 2013, I filed the foregoing with the Clerk of the Court using the CM/ECF system, which will provide electronic notice to counsel of record. s/Michael T. Sansbury OF COUNSEL 11

MOTION to Dismiss for Lack of Jurisdiction and Improper Venue by Excellus Health Plan, Inc. by Defendants' Counsel.

Case 2:13-cv-20000-RDP Document 113 Filed 09/30/13 Page 1 of 8 FILED 2013 Sep-30 PM 04:18 U.S. DISTRICT COURT N.D. OF ALABAMA IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ALABAMA SOUTHERN DIVISION IN RE: BLUE CROSS BLUE SHIELD) Master File No. ANTITRUST LITIGATION) 2:13-CV-20000-RDP (MDL No. 2406)) This document relates to all cases. MOTION TO DISMISS BY EXCELLUS HEALTH PLAN, INC., D/B/A EXCELLUS BLUECROSS BLUESHIELD FOR LACK OF PERSONAL JURISDICTION AND IMPROPER VENUE Dated: September 30, 2013 Case 2:13-cv-20000-RDP Document 113 Filed 09/30/13 Page 2 of 8 TABLE OF CONTENTS Page PRELIMINARY STATEMENT...............................................................................1 FACTS RELATING TO EXCELLUS’S CONTACTS WITH THE STATES OF ALABAMA, FLORIDA, AND NORTH CAROLINA.............................................2 ARGUMENT.............................................................................................................3 I. THERE IS NO PERSONAL JURISDICTION OVER EXCELLUS UNDER SECTION 12 OF THE CLAYTON ACT..............................3 II. THERE IS NO PERSONAL JURISDICTION OVER EXCELLUS UNDER ALABAMA, FLORIDA, OR NORTH CAROLINA LONG-ARM STATUTES....................................................................4 CONCLUSION..........................................................................................................4-i-Case 2:13-cv-20000-RDP Document 113 Filed 09/30/13 Page 3 of 8 PRELIMINARY STATEMENT Excellus Health Plan, Inc., d/b/a Excellus BlueCross BlueShield ("Excellus") by this motion seeks dismissal of the cases filed against it in Alabama, Florida, and North Carolina for lack of personal jurisdiction pursuant to Fed. R. Civ P. 12(b)(2) and for improper venue under Fed. R. Civ. P. 12(b)(3)(2). These cases are now before the Court as part of the captioned multidistrict litigation. Plaintiffs do not allege in any of these cases that Excellus resides in Alabama, Florida, or North Carolina, and it does not. Plaintiffs do not allege in any of these cases any act by Excellus in Alabama, Florida or North Carolina in furtherance of any alleged conspiracy. Further, as noted below, Excellus has no contacts at all with Alabama, Florida, or North Carolina, let alone constitutionally sufficient minimum contacts. The relevant legal analysis is set forth in the Memorandum of Certain Defendants in Support of Motion to Dismiss for Lack of Personal Jurisdiction and Improper Venue (the "Memorandum")1, and Excellus hereby adopts that legal analysis. 1 Those Certain Defendants are Blue Cross Blue Shield of Arizona, Blue Cross of Idaho Health Service, Inc., Blue Cross and Blue Shield of Kansas, Inc., Blue Cross and Blue Shield of Kansas City, Blue Cross Blue Shield of North Dakota, Blue Cross Blue Shield of Wyoming and HealthNow New York Inc. Case 2:13-cv-20000-RDP Document 113 Filed 09/30/13 Page 4 of 8 FACTS RELATING TO EXCELLUS’S CONTACTS WITH THE STATES OF ALABAMA, FLORIDA, AND NORTH CAROLINA Excellus submits herewith, in support of its motion to dismiss, the Affidavits of Jeanne Borrelli (Exhibit A), Margaret M. Cassady (Exhibit B), Susan Eliaszewskyj (Exhibit C), Richard Nangreave (Exhibit D), James G. Haefner (Exhibit E), Daniel W. Kane (Exhibit F), and Christina Zdanowski (Exhibit G). These Affidavits establish that: 1. Excellus was formed under New York law and its principal place of business is in New York. Cassady Affidavit, Exhibit B, ¶¶3, 4. 2. Excellus is not licensed to sell insurance, and does not sell insurance, in Alabama, Florida, or North Carolina. Cassady Affidavit, Exhibit B, ¶7. 3. Excellus does not have an office, mailing address, or telephone listing in Alabama, Florida, or North Carolina. Cassady Affidavit, Exhibit B, ¶5; Nangreave Affidavit, Exhibit D, ¶3. 4. Excellus does not own or lease property in Alabama, Florida, or North Carolina. Eliaszewskyj Affidavit, Exhibit C, ¶3. 5. Excellus does not have any employees in Alabama, Florida, or North Carolina. Nangreave Affidavit, Exhibit D, ¶4.-2-Case 2:13-cv-20000-RDP Document 113 Filed 09/30/13 Page 5 of 8 6. Excellus is not registered, authorized, or qualified to do business in Alabama, Florida, or North Carolina, nor does it have an agent for service of process in Alabama, Florida, or North Carolina. Cassady Affidavit, Exhibit B, ¶6. 7. Excellus does not pay taxes in Alabama, Florida, or North Carolina. Borrelli Affidavit, Exhibit A, ¶3. 8. Excellus does not maintain any bank accounts in Alabama, Florida, or North Carolina. Haefner Affidavit, Exhibit E, ¶3. 9. Excellus does not solicit business or advertise in Alabama, Florida, or North Carolina. Zdanowski Affidavit, Exhibit G, ¶3. 10. Excellus does not have any contracts with any providers for the provision of services in Alabama, Florida, or North Carolina. Kane Affidavit, Exhibit F, ¶3. ARGUMENT I. THERE IS NO PERSONAL JURISDICTION OVER EXCELLUS UNDER SECTION 12 OF THE CLAYTON ACT As shown by the attached Affidavits, Excellus has no contacts with Alabama, Florida, or North Carolina. It is not an inhabitant of any district in Alabama, Florida, or North Carolina; it is not found in any district in those States; and it does not transact business in any district in those States. Accordingly, venue is not proper in this Court or any other district court in Alabama, Florida, or North-3-Case 2:13-cv-20000-RDP Document 113 Filed 09/30/13 Page 6 of 8 Carolina. Because venue is not proper, Section 12 of the Clayton Act does not provide a statutory basis for personal jurisdiction over Excellus in Alabama, Florida, or North Carolina. Additionally, for the reasons set forth in the Memorandum, the exercise of jurisdiction by a district court in Alabama, Florida or North Carolina would not meet the Fifth Amendment’s due process requirements of fairness and reasonableness. II. THERE IS NO PERSONAL JURISDICTION OVER EXCELLUS UNDER ALABAMA, FLORIDA, OR NORTH CAROLINA LONG-ARM STATUTES As noted above, Excellus has no contacts with either Alabama, Florida, or North Carolina, and plaintiffs in the cases filed against Excellus and now before this Court do not allege any acts by Excellus in Alabama, Florida, or North Carolina. Accordingly, under the long-arm statutes of Alabama, Florida, and North Carolina, there is no personal jurisdiction over Excellus in Alabama, Florida, or North Carolina, under either a general or specific theory of jurisdiction. CONCLUSION For the reasons set forth in the Memorandum, adopting the legal analysis contained therein, and based on the absolute lack of any contacts (let alone constitutionally sufficient minimum contacts) in Alabama, Florida, or North-4-Case 2:13-cv-20000-RDP Document 113 Filed 09/30/13 Page 7 of 8 Carolina, Excellus hereby requests that the Court dismiss the following actions against them: Conway v. Blue Cross and Blue Shield of Alabama, 2:12-cv-02532; The Surgical Center for Excellence, LLP v. Blue Cross and Blue Shield of Alabama, 2:13-cv-00001; American Electric Motor Services Inc. v. Blue Cross and Blue Shield of Alabama, 2:12-cv-02169; Cerven v. Blue Cross and Blue Shield of North Carolina, 2:12-cv-04169; and any other actions not specifically listed which were commenced against Excellus in Alabama, Florida, and North Carolina and which are now before this Court. Dated: September 30, 2012 Respectfully submitted,/s/Edward S. Bloomberg Edward S. Bloomberg, Esq. (1396720) Admitted Pro Hac Vice Phillips Lytle LLP 3400 HSBC Center Buffalo, New York 14203 (716) 847-7096 (fax) 716-852-6100 ebloomberg@phillipslytle.com/s/D. Keith Andress D. Keith Andress, Esq. (ASB-8396-R56D) Baker, Donelson, Bearman, Caldwell & Berkowitz, P.C. 420 North 20th Street 1400 Wells Fargo Tower (205) 250-8367 (fax) 205-488-3767 kandress@bakerdonelson.com-5-Case 2:13-cv-20000-RDP Document 113 Filed 09/30/13 Page 8 of 8 Attorneys for Excellus Health Plan, Inc., d/b/a Excellus BlueCross BlueShield, incorrectly sued as Excellus BlueCross BlueShield of New York CERTIFICATE OF SERVICE I certify that on September 30, 2013, the foregoing was electronically filed with the Clerk of the Court using the CM/ECF system which will send notification to such filing to all counsel of record./s/D. Keith Andress-6-

MOTION to Dismiss by Blue Cross Blue Shield of Michigan.

Case 2:13-cv-20000-RDP Document 114 Filed 09/30/13 Page 1 of 27 FILED 2013 Sep-30 PM 04:22 U.S. DISTRICT COURT N.D. OF ALABAMA IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ALABAMA SOUTHERN DIVISION) IN RE: BLUE CROSS BLUE SHIELD) Master File No. 2:13-CV-20000-RDP ANTITRUST LITIGATION) (MDL No. 2406)) This document relates to all cases.)) DEFENDANT BLUE CROSS BLUE SHIELD OF MICHIGAN’S MOTION TO DISMISS COMES NOW Defendant Blue Cross Blue Shield of Michigan (hereinafter "BCBSM"), pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, and respectfully moves this Court to dismiss with prejudice Provider and Subscriber Plaintiffs’ claims based on any rates charged to subscribers by BCBSM or reimbursements paid to providers by BCBSM for failure to state a claim upon which relief can be granted. In support thereof, BCBSM relies on the Memorandum of Law filed simultaneously herewith and the Memorandum of Law filed in support of Defendants’ Joint Motion to Dismiss. Respectfully submitted,/s/Andrew P. Campbell_____________________ Andrew P. Campbell (CAM006) LEITMAN, SIEGAL, PAYNE & CAMPBELL PC 420 20th Street North, Suite 200 Birmingham, Alabama 35203 Telephone: (205) 986-5040 Fax: (205) 986-5080 acampbell@lspclaw.com September 30, 2013 Counsel for Defendant Blue Cross Blue Shield of Michigan Case 2:13-cv-20000-RDP Document 114 Filed 09/30/13 Page 2 of 27 CERTIFICATE OF SERVICE I hereby certify that on September 30, 2013 the foregoing was electronically filed with the Clerk of the Court using the CM/ECF system, which will send notification of such filing to all counsel of record in the above listed matter./s/Andrew P. Campbell_____________________ Andrew P. Campbell September 30, 2013 Case 2:13-cv-20000-RDP Document 114 Filed 09/30/13 Page 3 of 27 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ALABAMA SOUTHERN DIVISION) IN RE: BLUE CROSS BLUE SHIELD) Master File No. 2:13-CV-20000-RDP ANTITRUST LITIGATION) (MDL No. 2406)) This document relates to all cases.)) MEMORANDOM OF DEFENDANT BLUE CROSS BLUE SHIELD OF MICHIGAN IN SUPPORT OF MOTION TO DISMISS Case 2:13-cv-20000-RDP Document 114 Filed 09/30/13 Page 4 of 27 TABLE OF CONTENTS I. TABLE OF AUTHORITIES……………………………………………………………...ii II. INTRODUCTION………………………………………………………………………...1 III. STATEMENT OF FACTS………………………………………………………………..2 A. The Nonprofit Health Care Corporation Reform Act mandated extensive review and approval of BCBSM’s rates by the Michigan Insurance Commissioner……………...2 B. The Nonprofit Health Care Corporation Reform Act establishes rights and remedies for subscribers and providers who wish to challenge BCBSM’s rates……………….4 C. Subscriber and Provider Plaintiffs’ claims for damages are based on filed rates…….6 IV. ARGUMENT……………………………………………………………………………..7 A. Plaintiffs’ claims are barred because the Nonprofit Health Care Corporation Reform Act establishes the exclusive remedy by which Plaintiffs may challenge BCBSM’s rates…………………………………………………………………………………...8 B. Subscriber and Provider Plaintiffs’ damages relating to BCBSM premiums or reimbursements are barred by the filed rate doctrine as a matter of law…………….10 i. BCBSM is extensively regulated by Michigan law, which requires approval of all rates relating to BCBSM’s underwritten products by the Commissioner of Insurance and review of BCBSM’s provider reimbursement arrangements...12 ii. Subscriber and Provider Plaintiffs’ claims implicate the filed rate doctrine by demanding damages for payments made under rates approved by a regulatory agency………………………………………………………………………..18 V. CONCLUSION………………………………………………………………………….20 Detroit_3000130_10 Case 2:13-cv-20000-RDP Document 114 Filed 09/30/13 Page 5 of 27 TABLE OF AUTHORITIES CASES Allen v. State Farm Fire & Cas. Co., 59 F. Supp. 2d 1217 (S.D. Ala. 1999)......................... 13, 21 Blakewoods Surgery Ctr., L.L.C. v. Mich. Ins. Comm’r, No. 221494, 2001 WL 776565 (Mich. Ct. App. Jan. 19, 2001)............................................................................................................. 10 Blue Cross & Blue Shield of Mich. v. Governor, 367 N.W.2d 1 (Mich. 1985).............................. 4 Blue Cross & Blue Shield of Mich. v. Ins. Comm’r, 270 N.W.2d 845 (Mich. 1978), reh’g denied, 405 Mich. 1001........................................................................................................................... 4 BPS Clinical Labs. v. Blue Cross & Blue Shield of Mich., 552 N.W.2d 919 (Mich. Ct. App. 1996)......................................................................................................................................... 10 Bryant v. Avado Brands, Inc., 187 F.3d 1271 (11th Cir. 1999)...................................................... 7 Calico Trailer Mfg. Co., Inc. v. Ins. Co. of N. Am., No. LR-C-93-717, 1994 WL 823554 (E.D. Ark. Oct. 12, 1994)................................................................................................................... 22 ChevronTexaco Exploration & Prod. Co., a Div. of Chevron U.S.A. Inc. v. F.E.R.C., 387 F.3d 892 (D.C. Cir. 2004)................................................................................................................. 11 Genesis Ctr., PLC v. Blue Cross & Blue Shield of Mich., 625 N.W.2d 37 (Mich. Ct. App. 2000)................................................................................................................................................... 10 Genord v. Blue Cross & Blue Shield of Mich., 440 F.3d 802 (6th Cir. 2006)........................ 14, 21 Hill v. BellSouth Telecomm., Inc., 364 F.3d 1308 (11th Cir. 2004)............................................. 13 In re Title Insurance Antitrust Cases, 702 F. Supp. 2d 840 (N.D. Ohio 2010)............................ 21 Kirksey v. Am. Bankers Ins. Co., 114 F. Supp. 2d 526 (S.D. Miss. 2000).................................... 22 Korte v. Allstate Ins. Co., 48 F. Supp. 2d 647 (E.D. Tex. 1999).................................................. 22 McClements v. Ford Motor Co., 702 N.W.2d 166 (Mich. 2005)........................................... 11, 12 McLiechey v. Bristol West Ins. Co., 474 F.3d 897 (6th Cir. 2007)............................................... 12 McLiechey v. Bristol West Insurance Co., 408 F. Supp. 2d 516 (W.D. Mich. 2006)................... 12 Monroe Beverage Co., Inc. v. Stroh Brewery Co., 559 N.W.2d 297 (Mich. 1997)...................... 11 Morales v. Attorney's Title Ins. Fund, Inc., 983 F. Supp. 1418 (S.D. Fla. 1997)......................... 22 Mullinax v. Radian Guar. Inc., 311 F. Supp. 2d 474 (M.D.N.C. 2004)....................................... 22 Rios v. State Farm Fire & Cas. Co., 469 F. Supp. 2d 727 (S.D. Iowa 2007)............................... 22 Stevens v. Union Planters Corp., No. 00-CV-1695, 2000 WL 33128256 (E.D. Pa. Aug. 22, 2000)................................................................................................................................................... 22 Taffet v. Southern Co., 967 F.2d 1483 (11th Cir. 1992)............................................................... 12 Texas Commercial Energy v. TXU Energy, Inc., 413 F.3d 503 (5th Cir. 2005)............... 11, 17, 21 Uniforce Temp. Pers., Inc. v. Nat’l Council on Comp. Ins., Inc., 892 F. Supp. 1503 (S.D. Fla. 1995), aff’d, 87 F.3d 1296 (11th Cir. 1996).............................................................................. 13 Universal Express, Inc. v. U.S. S.E.C., 177 F. App’x 52 (11th Cir. 2006)..................................... 7 Wegoland Ltd. v. NYNEX Corp., 27 F.3d 17 (2d Cir. 1994).................................................. 13, 22 STATUTES MICH. COMP. LAWS § 500.2242.............................................................................................. 14 MICH. COMP. LAWS § 500.3529.......................................................................................... 3, 20 MICH. COMP. LAWS § 500.3855.............................................................................................. 14 MICH. COMP. LAWS § 550.1102.......................................................................................... 5, 20 ii Detroit_3000130_10 Case 2:13-cv-20000-RDP Document 114 Filed 09/30/13 Page 6 of 27 MICH. COMP. LAWS § 550.1107.......................................................................................... 8, 18 MICH. COMP. LAWS § 550.1201................................................................................................ 5 MICH. COMP. LAWS § 550.1202................................................................................................ 5 MICH. COMP. LAWS § 550.1308.............................................................................................. 15 MICH. COMP. LAWS § 550.1401................................................................................................ 5 MICH. COMP. LAWS § 550.1402.............................................................................................. 15 MICH. COMP. LAWS § 550.1504....................................................................................... passim MICH. COMP. LAWS § 550.1504 – 550.1509................................................................... 6, 7, 18 MICH. COMP. LAWS § 550.1506.......................................................................................... 8, 18 MICH. COMP. LAWS § 550.1509........................................................................................ 10, 18 MICH. COMP. LAWS § 550.1515.......................................................................................... 8, 11 MICH. COMP. LAWS § 550.1518.......................................................................................... 8, 12 MICH. COMP. LAWS § 550.1601................................................................................................ 5 MICH. COMP. LAWS § 550.1602.............................................................................................. 17 MICH. COMP. LAWS § 550.1603.............................................................................................. 17 MICH. COMP. LAWS § 550.1604.............................................................................................. 16 MICH. COMP. LAWS § 550.1607............................................................................ 10, 14, 15, 17 MICH. COMP. LAWS § 550.1607 – 550.1608........................................................................... 14 MICH. COMP. LAWS § 550.1608.................................................................................. 15, 16, 17 MICH. COMP. LAWS § 550.1609.................................................................................... 5, 15, 16 MICH. COMP. LAWS § 550.1610.............................................................................................. 16 MICH. COMP. LAWS § 550.1612................................................................................................ 6 MICH. COMP. LAWS § 550.1613.............................................................................. 7, 11, 16, 17 MICH. COMP. LAWS § 550.1615................................................................................................ 7 MICH. COMP. LAWS § 550.1619.............................................................................................. 10 MICH. COMP. LAWS § 550.1620.............................................................................................. 14 MICH. COMP. LAWS § 550.53.............................................................................................. 3, 20 MICH. COMP. LAWS §§ 500.3501 – 500.3580......................................................................... 19 MICH. COMP. LAWS §§ 550.1101 – 550.1704......................................................................... 14 MICH. COMP. LAWS §§ 550.1607 – 550.1614..................................................................... 6, 14 MICH. COMP. LAWS §§ 550.51 – 550.63................................................................................. 20 iii Detroit_3000130_10 Case 2:13-cv-20000-RDP Document 114 Filed 09/30/13 Page 7 of 27 INTRODUCTION BCBSM brings this separate motion because it is subject to a unique regulatory scheme under the Michigan Nonprofit Health Care Corporation Reform Act (the "Act" or "PA 350"). Michigan’s regulatory scheme and rate approval process warrants separate consideration by this Court and independently requires dismissal of all claims based on any rates charged to subscribers by BCBSM, or reimbursements paid to providers by BCBSM. Plaintiffs’ claims fail as a matter of law for two reasons: 1. Subscriber and Provider Plaintiffs’ exclusive remedy in this case is to challenge BCBSM’s rates under the extensive review process mandated by PA 350 and conducted by the Michigan Commissioner of Insurance; 2. Subscriber and Provider Plaintiffs’ damages claims are barred by the filed rate doctrine. The Subscriber Plaintiffs’ claims for damages arise from the assertion that BCBSM’s premium rates were too high as a result of allegedly anticompetitive conduct. Likewise, the Provider Plaintiffs seek similar damages as a result of reimbursement rates allegedly being set too low. Plaintiffs’ damages claims fail because under Michigan law, each and every BCBSM premium rate is filed with the Commissioner of Michigan’s Office of Financial and Insurance Regulation ("OFIR," or "the Commissioner"), and what’s more, the Commissioner has repeatedly reviewed those rates and expressly found them to be "equitable, adequate, and not excessive." MICH. COMP. LAWS § 550.1607(4)(a). BCBSM’s reimbursement rates are also filed with the Commissioner as part of a statutory review process governing BCBSM’s provider contracting. §§ 550.1504(1), 500.3529(6), 550.53(3). Therefore, all Plaintiffs seek damages for rates that were filed, which is all that’s required for the filed rate doctrine. Indeed, the Michigan regulatory regime exceeds the doctrine’s requirements because the rates are actually reviewed Detroit_3000130_10 Case 2:13-cv-20000-RDP Document 114 Filed 09/30/13 Page 8 of 27 and approved by the Commissioner after thorough examination. 1 For each of these reasons, BCBSM respectfully requests that this Court dismiss any of Plaintiffs’ claims that are based on any BCBSM premiums charged to subscribers or BCBSM reimbursements paid to providers. STATEMENT OF FACTS A. The Nonprofit Health Care Corporation Reform Act mandated extensive review and approval of BCBSM’s rates by the Michigan Insurance Commissioner. Through the entire period covered by both groups of Plaintiffs’ claims for damages, BCBSM was subject to uniquely robust regulation by the Commissioner, including review and approval of BCBSM’s premium rates and reimbursement rates. 2 BCBSM, itself, is a creature of statute. 3 BCBSM is the only "health care corporation" regulated by the Commissioner under the Nonprofit Health Care Corporation Reform Act, MICH. COMP. LAWS §§ 550.1101 – 550.1704. 1 BCBSM incorporates the legal discussion of the filed rate doctrine in Defendants’ Joint Motion to Dismiss. BCBSM submits this supplemental brief not to duplicate that discussion, but to explain how Michigan’s complex statutory scheme regulating BCBSM’s rate-setting process warrants application of the filed rate doctrine. 2 Recently, in March of 2013, Michigan substantially amended its insurance laws in general and PA 350 specifically, as a result of which the going-forward regulatory system in Michigan (and the structure of BCBSM) will be different from that described here. However, this change is irrelevant to the damages claims. 3 See, e.g., Blue Cross & Blue Shield of Mich. v. Governor, 367 N.W.2d 1, 14 (Mich. 1985) (internal quotation marks omitted) ("BCBSM is a unique statutory creation, distinct from a private insurance company...."); Blue Cross & Blue Shield of Mich. v. Ins. Comm’r, 270 N.W.2d 845, 839-50 (Mich. 1978), reh’g denied, 405 Mich. 1001 (citations omitted): BCBSM is not an insurance company in the usual sense of the term. It is a statutory, non-profit corporation which is regulated within the limits of special enabling legislation by the Commissioner "in order to protect the interests of subscribers.’ Although it does operate according to principles similar to those of insurance companies,'it is not carried on as an insurance business for profit..., but rather it provides a method for promoting the public health and welfare in assisting... persons to budget" health care costs. 2 Detroit_3000130_10 Case 2:13-cv-20000-RDP Document 114 Filed 09/30/13 Page 9 of 27 Known as Public Act 350, this statute was enacted to:... promote an appropriate distribution of health care services for all residents of this state, to promote the progress of the science and art of health care in this state, and to assure for nongroup and group subscribers, reasonable access to, and reasonable cost and quality of, health care services, in recognition that the health care financing system is an essential part of the general health, safety, and welfare of the people of this state. § 550.1102(1). BCBSM, as a nonprofit, "charitable and benevolent institution" under the Act, is charged with various duties to further the Act’s purpose. §§ 550.1102(1), 550.1201(5). BCBSM is required to provide access to coverage to every Michigan citizen who applies and pays the applicable premium, serving the role as Michigan’s health care benefit provider of last resort. §§ 550.1202(1)(d), 550.1401(1). 4 BCBSM must also effectuate a cost transfer to subsidize the premiums paid by its senior citizen individual Medigap subscribers. § 550.1609(5). Another purpose of the Act is "to provide for the regulation and supervision of nonprofit health care corporations by the commissioner of insurance so as to secure for all of the people of this state who apply for a certificate, the opportunity for access to health care services at a fair and reasonable price." MICH. COMP. LAWS § 550.1102(2). To carry out this objective, the Michigan Legislature has vested the Commissioner with exclusive oversight of BCBSM. § 550.1601(1). The Commissioner’s oversight extends to almost every aspect of BCBSM’s business affairs, including its: (1) finances; 5 (2) relationship with subscribers; 6 (3) contracts with 4 Thus, BCBSM’s so-called dominant market share includes a substantial number of high cost individuals that other insurers have declined to cover. 5 See §§ 550.1204a (requiring BCBSM to maintain an "unimpaired surplus in an amount determined adequate by the commissioner"), 550.1602 (requiring BCBSM to file annual financial statements with the Commissioner and giving the Commissioner the discretion to order monthly or quarterly statements). 3 Detroit_3000130_10 Case 2:13-cv-20000-RDP Document 114 Filed 09/30/13 Page 10 of 27 hospitals and professional providers; 7 and (4) rates and rating methodology. 8 To ensure access to health care services at a "fair and reasonable price," the Commissioner regulates both BCBSM’s rate-setting process for all underwritten business 9 and BCBSM’s reimbursement arrangements with providers. See §§ 550.1607 – 550.1614, 550.1504 – 550.1509. The regulation of BCBSM’s rates are discussed in further detail in Section II of this brief. B. The Nonprofit Health Care Corporation Reform Act establishes rights and remedies for subscribers and providers who wish to challenge BCBSM’s rates. Subscribers such as Subscriber Plaintiffs have the right to challenge BCBSM’s rates under PA 350. When BCBSM submits a proposed rate filing to the Commissioner, BCBSM is required to place advertisements giving notice of the filing in at least one newspaper which serves each geographic area in which significant numbers of subscribers reside. MICH. COMP. LAWS § 550.1612(1). Under the Act, the Commissioner, the Attorney General, and subscribers "aggrieved by the proposed rate" or who have reasonable grounds to believe that they will be "aggrieved by the proposed rate" may request a hearing challenging BCBSM’s proposed rates. § 6 See §§ 550.1401 – 550.1439 (regulating BCBSM’s relationship with subscribers, including issues like access to health care, benefits, and claims). 7 See §§ 550.1501 – 550.1518 (regulating BCBSM’s relationship with hospitals and professional providers, including BCBSM’s networks and reimbursement arrangements). 8 See §§ 550.1601 – 550.1619 (regulating BCBSM’s rates and rating methodology). 9 Subscriber Plaintiffs only seek damages for underwritten business, specifically small group and individual products. See Sub. Compl. ¶ 270 ("Ninth, Plaintiff John G. Thompson brings this action seeking damages on behalf of himself individually and on behalf of a class pursuant to the provisions of Rule 23(a) and Rule 23(b)(1) and (b)(3) of the Federal Rules of Civil Procedure, with such class (the "Michigan Class") defined as: All persons or entities who, during the period from October 1, 2008 to the present (the "Class Period"), have paid health insurance premiums to BCBS-MI for individual or small group full-service commercial health insurance.") (emphasis added). 4 Detroit_3000130_10 Case 2:13-cv-20000-RDP Document 114 Filed 09/30/13 Page 11 of 27 550.1613(1). 10 Subscribers who request a rate hearing are entitled to a copy of BCBSM’s entire rate filing and the opportunity for reasonable discovery. § 550.1613(1) and (2). Discovery in past rate challenges has been extensive, including as many as eight sets of discovery requests issued by the Attorney General himself. The Commissioner’s final decisions are subject to review by the Ingham County Circuit Court as provided under the Administrative Procedures Act. § 550.1615. In the past ten years, two hearings have been conducted challenging BCBSM’s proposed rates, including one challenge by Michigan’s then-acting Attorney General. 11 Both hearings resulted in BCBSM being ordered to modify its rates to meet its statutory requirements. 12 Similarly, providers such as Provider Plaintiffs have the right to challenge BCBSM’s reimbursement rates under PA 350. BCBSM must develop and maintain a provider class plan for each type of health care provider providing services to BCBSM Traditional subscribers. MICH. COMP. LAWS § 550.1505 – 550.1509. These provider class plans must include a detailed description of the reimbursement arrangement between BCBSM and the provider class, and the 10 Persons acting on behalf of those "aggrieved by the proposed rate" may also request a hearing challenging BCBSM’s proposed rates. § 550.1613(1). 11 See In the Matter of Blue Cross Blue Shield of Michigan’s Application for Rate Increases for Nongroup Coverage, 07-018-BC (July 11, 2008) (Commissioner of Financial and Insurance Regulation Decision), available at http://www.michigan.gov/documents/dleg/Final_Decision_2_242042_7.pdf (Exhibit A); Attorney General Mike Cox and Office of Financial and Insurance Regulation Staff v. Blue Cross Blue Shield of Michigan, 09-746-BC (Dec. 7, 2009) (Commissioner of Financial and Insurance Regulation Decision), available at http://www.michigan.gov/documents/dleg/December_7_2009_09-746-BC_303570_7.pdf (Exhibit B). A court may take judicial notice of public records in a 12(b)(6) proceeding without converting the motion to dismiss into a motion for summary judgment. See Universal Express, Inc. v. U.S. S.E.C., 177 F. App’x 52, 53-54 (11th Cir. 2006); Bryant v. Avado Brands, Inc., 187 F.3d 1271, 1278 (11th Cir. 1999). 12 See Exhibit A at 9; Exhibit B at 11. 5 Detroit_3000130_10 Case 2:13-cv-20000-RDP Document 114 Filed 09/30/13 Page 12 of 27 Commissioner must review provider class plans to ensure that they comply with PA 350’s goal of reflecting the "reasonable cost" of health care services. §§ 550.1107(7), 550.1506(2), 550.1504(1). Under the Act, an organization or association representing the affected provider class may appeal the Commissioner’s determination concerning a provider class plan. § 550.1515(1). An independent hearing officer presiding over the appeal may: (1) affirm or reverse a determination of the Commissioner concerning the provider class plan; or (2) determine whether the provider class plan complies with PA 350. § 550.1515(3). The independent hearing officer may also order BCBSM to revise its provider class plan if it does not comply with PA 350. § 550.1515(3)(b)(iii). Finally, PA 350 specifies that the appeal process set forth in the Act is the exclusive remedy available to providers who wish to challenge provider class plans. § 550.1518. C. Subscriber and Provider Plaintiffs’ claims for damages are based on filed rates. Subscriber and Provider Plaintiffs have not availed themselves of these remedy schemes available under PA 350. Instead, they have waited years after the approval of BCBSM’s premium rates and provider reimbursement arrangements to initiate an improper action in a federal court. Both sets of Plaintiffs allege that BCBSM engaged in anticompetitive conduct by agreeing to suppress competition through the use of territorial market division agreements with the thirty-seven other members of BCBSA. See Sub. Compl. ¶ 454; Provider Compl. ¶ 226. Provider Plaintiffs further allege that BCBSM and the member plans engaged in anticompetitive conduct by "accept[ing] the'host plan’ reimbursement rate through the Blue Card Program to increase their profits by decreasing the rates paid to healthcare providers." Provider Compl. ¶ 232. Michigan Subscriber Plaintiff John G. Thompson is alleged to have been a BCBSM 6 Detroit_3000130_10 Case 2:13-cv-20000-RDP Document 114 Filed 09/30/13 Page 13 of 27 individual policy holder during the relevant class period. Sub. Compl. ¶ 14. Plaintiff Thompson seeks to recover damages on behalf of himself and the Michigan Class for "inflated and/or supracompetitive premiums for individuals and small groups purchasing BCBS-MI’s full-service commercial health insurance in the relevant geographic markets." Sub. Compl. ¶ 454, p. 295. The rates for individual and small group products that Plaintiff Thompson complains of were all filed with and approved by the Commissioner. Provider Plaintiffs, on the other hand, seek to recover, on behalf of themselves and the relevant Class, 13 damages in the form of "having been paid lower rates, having been forced to accept far less favorable terms, and/or having access to far fewer patients than they would have with increased competition and but for Defendants’ anticompetitive agreement." Provider Compl. ¶¶ 227, 233. The reimbursement methodologies Provider Plaintiffs complain of were filed with the Commissioner. ARGUMENT The robust regime under which BCBSM is regulated requires dismissal of all claims that are based on rates charged to subscribers by BCBSM, or reimbursements paid to providers by BCBSM. First, the Nonprofit Health Care Corporation Reform Act establishes the exclusive remedy by which Subscriber and Provider Plaintiffs may challenge the reasonableness of BCBSM’s rates. Plaintiffs are confined to those remedies available under the Act, and cannot challenge BCBSM’s rates in a private cause of action. Second, the filed rate doctrine bars both sets of Plaintiffs’ claims because the process by which BCBSM sets its premium rates and 13 The Class is defined as: "All healthcare providers, not owned or employed by any of the Defendants, in the United States of America provided covered services, equipment or supplies to any patient who was insured by, or who was a member or beneficiary of any plan administered by, a Defendant within four years prior to the date of the filing of this action." Provider Compl. ¶ 215. 7 Detroit_3000130_10 Case 2:13-cv-20000-RDP Document 114 Filed 09/30/13 Page 14 of 27 reimbursement rates is extensively regulated by both Michigan law and the Commissioner. As such, Subscriber and Provider Plaintiffs cannot seek retroactively reduced insurance premiums and increased reimbursement rates from this Court instead of following statutory remedy requirements. Nor can Subscriber and Provider Plaintiffs ask this Court to second-guess the Commissioner’s determination that BCBSM’s premium rates were "equitable, adequate, and not excessive," and its reimbursement rates reflective of "reasonable cost". §§ 550.1607(4)(a), 550.1504(1). I. PLAINTIFFS’ CLAIMS ARE BARRED BECAUSE THE NONPROFIT HEALTH CARE CORPORATION REFORM ACT ESTABLISHES THE EXCLUSIVE REMEDY BY WHICH PLAINTIFFS MAY CHALLENGE BCBSM’S RATES. Both Plaintiffs’ private causes of action are barred because PA 350 establishes the exclusive remedy by which subscribers and providers can challenge the reasonableness of BCBSM’s rates. Michigan courts have recognized various provisions of PA 350 as providing the exclusive remedy available to plaintiffs challenging BCBSM’s conduct. 14 It is well established under Michigan law that "[w]here a statute gives new rights and prescribes new 14 See, e.g., BPS Clinical Labs. v. Blue Cross & Blue Shield of Mich., 552 N.W.2d 919, 924 (Mich. Ct. App. 1996) (affirming the trial court’s grant of summary disposition to BCBSM because the Act "does not grant a health care provider the right to sue a health care corporation directly" and "[t]he relief sought by plaintiffs regarding the enforcement of Act 350 is available through the procedure set forth in M.C.L. § 550.1619(3)... Plaintiffs may commence an action in the Ingham Circuit Court to compel the Insurance Commissioner to enforce the act."); Genesis Ctr., PLC v. Blue Cross & Blue Shield of Mich., 625 N.W.2d 37, 39 (Mich. Ct. App. 2000) (holding that the plaintiff surgical center lacked standing to bring an action again BCBSM for alleged violation of PA 350 because the Act did not create a private right of action, the Insurance Commissioner and Attorney General were designated to and could enforce the Act, and the center was not precluded from communicating its concerns to the Attorney General); Blakewoods Surgery Ctr., L.L.C. v. Mich. Ins. Comm’r, No. 221494, 2001 WL 776565, at *2 (Mich. Ct. App. Jan. 19, 2001) (granting the Commissioner’s motion for summary disposition because the statutory review proceedings under MICH. COMP. LAWS § 550.1509 presented an alternate and adequate remedy to plaintiffs’ claims that BCBSM 8 Detroit_3000130_10 Case 2:13-cv-20000-RDP Document 114 Filed 09/30/13 Page 15 of 27 remedies, such remedies must be strictly pursued; and a party seeking a remedy under the act is confined to the remedy conferred thereby and to that only." McClements v. Ford Motor Co., 702 N.W.2d 166, 171 (Mich. 2005) (quoting Monroe Beverage Co., Inc. v. Stroh Brewery Co., 559 N.W.2d 297, 298-99 (Mich. 1997)). Subscribers are limited to PA 350’s statutory remedy because the Act provides an opportunity for subscribers to challenge BCBSM’s rates and participate in a hearing to determine whether BCBSM’s rates meet the statutory obligations. MICH. COMP. LAWS § 550.1613. Subscribers have an opportunity to: (1) access the information provided in BCBSM’s rate filing; (2) investigate BCBSM’s assertions through discovery; (3) have proposed rates reviewed by an expert in the field; and (4) force BCBSM to prove that its rates comply with the Act. Similarly, providers have the right to challenge BCBSM’s reimbursement rates under PA 350 by appealing the Commissioner’s decision regarding BCBSM’s provider class plans, which set out the methodology by which BCBSM calculates its reimbursement rates. 15 MICH. COMP. LAWS § 550.1515(1). The independent hearing officer presiding over the appeal is required to evaluate whether BCBSM’s reimbursement methodology complies with PA 350’s "reasonable cost" formula. § 550.1504(1). More importantly, PA 350 specifies that the appeal process set forth in the Act is the exclusive remedy available to providers who wish to challenge provider practices relating to its freestanding ambulatory surgical facility provider class plan were discriminatory and violative of PA 350). 15 It has long been established law that the filed rate doctrine bars challenges to rates set in accordance with a filed methodology, whether or not the precise rate is filed. See Texas Commercial Energy v. TXU Energy, Inc., 413 F.3d 503, 509-10 (5th Cir. 2005) (applying the doctrine to bar federal antitrust claims where only a market-based methodology was filed with the state agency); ChevronTexaco Exploration & Prod. Co., a Div. of Chevron U.S.A. Inc. v. F.E.R.C., 387 F.3d 892, 894 (D.C. Cir. 2004) ("A method or formula for calculating a rate, also called a'rate rule,’ when enshrined in an approved tariff, is itself a'filed rate.’"). 9 Detroit_3000130_10 Case 2:13-cv-20000-RDP Document 114 Filed 09/30/13 Page 16 of 27 class plans. § 550.1518. Because PA 350 gives subscribers and providers the right to challenge BCBSM’s rates and establishes a process by which to carry out those rights, the Act’s scheme "must be strictly pursued" and Subscriber and Provider Plaintiffs are "confined to the remedy conferred thereby and to that [remedy] only." McClements, 702 N.W.2d at 171. 16 If Subscriber and Provider Plaintiffs wished to challenge the reasonableness of BCBSM’s rates, they were required to do so when BCBSM submitted its proposed rates to the Commissioner. They should not be permitted to "sit out the state’s rate-making process and then repair to court to play litigation lottery." Taffet v. Southern Co., 967 F.2d 1483, 1492 (11th Cir. 1992). Because Subscriber and Provider Plaintiffs failed to avail themselves of the exclusive remedy afforded by PA 350, their claims for damages relating to BCBSM premiums or reimbursements should be dismissed. II. SUBSCRIBER AND PROVIDER PLAINTIFFS’ DAMAGES CLAIMS RELATING TO BCBSM PREMIUMS OR REIMBURSEMENTS ARE BARRED BY THE FILED RATE DOCTRINE AS A MATTER OF LAW. Plaintiffs’ damages claims for rates charged to subscribers by BCBSM or reimbursements paid to providers by BCBSM are barred by the filed rate doctrine. "Simply 16 Federal courts in Michigan have recognized the application of the exclusive remedy principle in a very similar context. In McLiechey v. Bristol West Insurance Co., 408 F. Supp. 2d 516, 518 (W.D. Mich. 2006), insureds filed a class action suit alleging the defendant insurance company had violated Chapter 21 of Michigan’s Insurance Code by using its insureds’ economic circumstances in setting automobile insurance rates. Like PA 350, the statute at issue in McLiechey involved insurance "[r]ates... subject to comprehensive rate-making standards" under which an insurer was "required to file its rates with the Commissioner" and those rates were "subject to the Commissioner’s review and approval." Id. at 518. The district court granted the insurance company’s motion to dismiss, holding that Chapter 21 provided subscribers with a remedy by which they could challenge the insurer’s rates, and thus barred plaintiffs from bringing a private cause of action. Id. at 522. The Sixth Circuit affirmed the district court’s dismissal, noting that "[a] remedial scheme is not'plainly inadequate’ merely because it does not provide a plaintiff with the ideal result." McLiechey v. Bristol West Ins. Co., 474 F.3d 897, 901 (6th Cir. 2007). 10 Detroit_3000130_10 Case 2:13-cv-20000-RDP Document 114 Filed 09/30/13 Page 17 of 27 stated, the doctrine holds that'any filed rate’ – that is, one approved by the governing regulatory agency – is per se reasonable and unassailable in judicial proceedings...." Allen v. State Farm Fire & Cas. Co., 59 F. Supp. 2d 1217, 1227 (S.D. Ala. 1999) (quoting Wegoland Ltd. v. NYNEX Corp., 27 F.3d 17, 18 (2d Cir. 1994)) (emphasis added). As set forth more fully in Defendants’ Joint Motion to Dismiss, the doctrine applies "whenever either the nondiscrimination strand or the nonjusticiability strand underlying the doctrine is implicated by the cause of action the plaintiff seeks to pursue." Hill v. BellSouth Telecomm., Inc., 364 F.3d 1308, 1316 (11th Cir. 2004) (internal citations omitted). Claims are thus barred by the doctrine whenever the fact finder would have to "measure the difference between the properly approved [rates] paid by plaintiffs and those mythical rates which would have been applicable but for the defendants’ concerted activity." Uniforce Temp. Pers., Inc. v. Nat’l Council on Comp. Ins., Inc., 892 F. Supp. 1503, 1512 (S.D. Fla. 1995), aff’d, 87 F.3d 1296 (11th Cir. 1996); see also Wegoland, 27 F.3d at 21 (claims precluded if they "would require determining what rate would have been deemed reasonable absent the [unlawful] acts, and then finding the difference between the two"). Plaintiffs’ damages claims are barred by the filed rate doctrine since, according to Plaintiffs, BCBSM’s allegedly anticompetitive conduct resulted in higher health insurance premiums and lower reimbursement rates, and the damages Plaintiffs seek are the difference between those actual rates and the rates Plaintiffs imagine would have existed in a market in which there was Blue-on-Blue competition in Michigan. Because the rates at issue are filed with the Commissioner, these claims are barred. And, while not necessary to dismissal, far more than mere filing occurs in Michigan; the entire process by which BCBSM sets its premiums is extensively supervised by the Commissioner, who is charged with ensuring that BCBSM’s 11 Detroit_3000130_10 Case 2:13-cv-20000-RDP Document 114 Filed 09/30/13 Page 18 of 27 premiums are "equitable, adequate, and not excessive" and its reimbursements reflective of "reasonable cost". MICH. COMP. LAWS §§ 550.1607(4)(a), 550.1504(1). As such, the filed rate doctrine requires dismissal of Subscriber and Provider Plaintiffs’ damages claims relating to BCBSM premiums and reimbursements. A. BCBSM is extensively regulated by Michigan law, which requires approval of all rates relating to BCBSM’s underwritten products by the Commissioner of Insurance and review of BCBSM’s provider reimbursement arrangements. BCBSM is regulated extensively by the Michigan Commissioner of Insurance. See MICH. COMP. LAWS §§ 550.1101 – 550.1704. See also Genord v. Blue Cross & Blue Shield of Mich., 440 F.3d 802, 803 (6th Cir. 2006). Under PA 350, the Commissioner regulates BCBSM’s rate-setting process for all underwritten business. See §§ 550.1607 – 550.1614. 17 The Commissioner must approve the monthly premium BCBSM charges on individual products as well as the methodology used by BCBSM to develop rates for group products. 18 See §§ 550.1607 – 550.1608. Commissioner approval is required for initial rates, revisions to existing rates, and 17 As noted above, the regulation of BCBSM’s rates, as described in this section, will change effective January 1, 2014, as a result of recently enacted legislation designed to both put Michigan in compliance with the Patient Protection and Affordable Care Act and to transition BCBSM from a nonprofit health care corporation to a nonprofit mutual insurance company. Under this new legislation, BCBSM’s rates will be regulated under Michigan’s Insurance Code, allowing BCBSM to be regulated by the same standards as insurers in Michigan. See MICH. COMP. LAWS § 550.1620(1) ("Notwithstanding any provision of this act to the contrary, a certificate delivered, issued for delivery, or renewed in this state on or after January 1, 2014 by a health care corporation is subject to the policy and certificate issuance and rate filing requirements of the insurance code...."). Under the Insurance Code, BCBSM will still be required to file the rates relating to individual, Medigap, group conversion, and small group products with the Commissioner. See § 500.2242 (individual and small group products); § 500.3855(1) (Medigap products). 18 Individual products include: nongroup products, for individuals who purchase coverage directly from BCBSM; group conversion products, for individuals who were covered under a BCBSM underwritten group plan and lost that coverage; and individual Medigap products, for 12 Detroit_3000130_10 Case 2:13-cv-20000-RDP Document 114 Filed 09/30/13 Page 19 of 27 renewals of existing rates. § 550.1607(1). New rates are deemed "approved if not disapproved by the Commissioner within 30 days." § 550.1607(1). 19 Revisions to rates or rate methodologies for existing products, however, must be expressly approved by the Commissioner. § 550.1608(1), (2). 20 Thus, every allegedly inflated BCBSM premium complained of by Subscriber Plaintiffs was approved by the Commissioner, either in the exact amount or the method by which it was calculated. The Commissioner’s approval is the product of an intense investigation into BCBSM’s finances and underwriting practices. The Act orders the Commissioner to ensure that BCBSM’s rates are "equitable, adequate, and not excessive," as defined under Michigan law. MICH. COMP. LAWS § 550.1608. 21 The Commissioner must make these determinations based on an extensive individuals who purchase coverage directly from BCBSM to pay Medicare copayments and/or deductibles. 19 BCBSM does not rely on the "deemer provision" to set its rates. Instead, BCBSM historically has waited until receiving formal approval from the Commissioner, given that the Commissioner also has the power to withdraw any deemed approval. See § 550.1607(1). 20 Subscriber Plaintiffs’ claim that "BCBS-MI’s actual charged premium rates vary from the base rates it files with the state, for certain policies" is both erroneous and irrelevant. Sub. Compl. ¶ 530(d). It is irrelevant because, as discussed in footnote 15, it has long been established law that the filed rate doctrine bars challenges to rates set in accordance with a filed methodology, whether or not the precise rate is filed. A cursory review of Michigan law shows that Plaintiffs’ claim is erroneous. For individual products, there are no discretionary bands by which rates can vary. § 550.1608(1); § 550.1402(2)(c) (stating that "a health care corporation shall not... [o]ffer to give or pay, or give or pay, directly or indirectly, a rebate or part of the premium,... except as reflected in the rate and expressly provided in the certificate."); § 550.1308(1)(d) (stating that a committee on the health care corporation’s board of directors shall not "[a]pprove, adopt, or amend provider contracts, provider class plans, rates charged to subscribers, or a certificate."). For small group products, BCBSM has discretion only to the extent specifically provided for in the approved rating methodologies or through approval by the Commissioner. 21 A rate is adequate "if the rate is not unreasonably low" relative to: (1) the provision for anticipated benefit costs; (2) the provision for administrative expense; (3) the provision for cost transfers; (4) the provision for contribution to or from surplus that is consistent with the attainment or maintenance of adequate and unimpaired surplus as provided in section 204a; 13 Detroit_3000130_10 Case 2:13-cv-20000-RDP Document 114 Filed 09/30/13 Page 20 of 27 review of data, including: (1) reasonable evaluations of recent claim experience; (2) projected trends in claim costs; (3) the allocation of administrative expense budgets; and (4) the present and anticipated unimpaired surplus of the health care corporation. § 550.1609(1) and (4). Thus, BCBSM is required to disclose large amounts of information regarding its business affairs to the Commissioner when submitting a rate filing. 22 For rates relating to individual products, for example, BCBSM is required to supply the Commissioner with: (1) recent claim experience on the benefits; (2) actual trend experience; (3) prior administrative expenses; (4) projected trend factors; (5) projected administrative expenses; (6) contributions for risk and contingency reserve factors; (7) actual health care corporation contingency reserve position; and (8) projected health care corporation contingency reserve position. § 550.1610(6). Moreover, all rate filings must be made publicly available, allowing not only the Commissioner, but subscribers such as Subscriber Plaintiffs, to verify BCBSM’s rates. § 550.1610(7). 23 Nor is the Commissioner’s review of BCBSM’s business affairs and rate-setting process (5) the provision for adjustments due to prior experience of groups. § 550.1609(4). A rate is not excessive if it "is not unreasonably high" relative to those same factors. § 550.1609(1). A rate is equitable if it "can be compared to any other rate offered by the health care corporation to its subscribers, and the observed rate differences can be supported by differences in anticipated benefit costs, administrative expense cost, differences in risk, or any identified cost transfer provisions." § 550.1608(3). 22 See e.g., BCBSM’s Proposed Experience Rating Formula Changes and New Experience Rating Formulas (Sept. 1, 2009), available at http://www7.dleg.state.mi.us/SerffPortal/PDF/2118820303.pdf (Exhibit C). 23 A copy of the proposed rate filing is available to public as of the date of filing, except for: (1) "personal data which may be associated with an identifiable individual"; (2) "data which discloses reimbursement levels for specific procedures or services of specific providers and data which, if disclosed, can be used to calculate those reimbursement levels" if the disclosure would be harmful to ensuring subscribers reasonable access to, and reasonable cost and quality of, providers and unless the data is generally known to providers; and (3) trade secrets. §§ 550.1610(7), 550.1604. A person with a hearing before the Commissioner may examine 14 Detroit_3000130_10 Case 2:13-cv-20000-RDP Document 114 Filed 09/30/13 Page 21 of 27 limited to instances where BCBSM submits rate filings. 24 PA 350 provides for annual review of proposed or existing rates for BCBSM individual subscribers and review of BCBSM’s rating methodologies for group products every three years. MICH. COMP. LAWS § 550.1608(1) and (2). BCBSM is required to file an annual statement with the Commissioner showing the financial condition of the corporation as of the preceding December 31. § 550.1602(1). BCBSM must also file quarterly and monthly financial statements with the Commissioner. § 550.1602(2). The Commissioner has the statutory authority to "visit and examine the affairs" of BCBSM at his or her discretion. § 550.1603. The Commissioner may also audit BCBSM’s group subscriber records to "determine proper application of a rating system... with respect to any group." § 550.1608(2). Finally, the Commissioner has the authority to disapprove any rate previously approved. §§ 550.1607(1), 550.1613(5). In short, the Commissioner’s involvement and control over BCBSM’s rates is far from a formality. It is a statutorily mandated check and balance that requires a near-constant exchange of information between BCBSM and the Commissioner. The Commissioner’s oversight also extends to the provider reimbursement arrangements for all of BCBSM’s lines of business, whether through the statutory mechanisms of PA 350, the Insurance Code, and the Prudent Purchaser Act, or through BCBSM’s internal procedures established to ensure that BCBSM’s statutory goals are met. See Texas Commercial Energy v. TXU Energy, Inc., 413 F.3d 503, 509-10 (5th Cir. 2005) (holding that, although the state utility the reimbursement level data and be subject to the same confidentiality requirements as the Commissioner. § 550.1613(1). 24 It is worth noting that a search of the Michigan Department of Licensing and Regulatory Affairs’ filing database shows that since May 2009 BCBSM has submitted 66 filings to the Commissioner regarding the rates on its products. See Search Results for Rate Filings by Blue Cross Blue Shield of Michigan, SERFF Filing Search Portal, LARA Department of Licensing and Regulatory Affairs, available at http://www7.dleg.state.mi.us/SerffPortal/(Exhibit D). 15 Detroit_3000130_10 Case 2:13-cv-20000-RDP Document 114 Filed 09/30/13 Page 22 of 27 commission did not set or approve the electricity rates at issue, the commission’s "oversight over the market is sufficient to conclude that the BES energy rates are'filed’ within the meaning of the filed rate doctrine."). Under PA 350, the Commissioner is charged with ensuring that BCBSM’s provider reimbursement arrangements for Traditional business comply with PA 350’s "reasonable cost" formula. See MICH. COMP. LAWS § 550.1504(1). PA 350 requires BCBSM to develop and maintain a provider class plan for each type of health care provider providing services to BCBSM Traditional business subscribers. See §§ 550.1505 – 550.1509. The Commissioner must review these provider class plans to determine if BCBSM "has substantially achieved" PA 350’s goal of establishing "reimbursement arrangements that will assure a rate of change in the total corporation payment per member to each provider class that is not higher than the compound rate of inflation and real economic growth." 25 §§ 550.1509(1), 550.1504(1)(c). To that end, each provider class plan must include a detailed description of the reimbursement arrangement between BCBSM and the provider class and a copy of the provider contract. §§ 550.1107(7), 550.1506(2). The plans’ language directs the Commissioner to BCBSM’s reimbursement methodology, as evidenced by the following excerpts: • Hospital Provider Class Plan: "Reimbursement methods are based on hospitals’ Peer Group designation. Specifics of the reimbursement structure can be found in Exhibit B of the attached Participating Hospital Agreement." 26 • Medical Doctors Provider Class Plan: "Based on the lower of the MD’s billed charge or the BCBSM maximum payment for covered services. Most maximum payment levels are based on the Resource Based Relative Value Scale developed by the Centers for Medicare and Medicaid Services in which services are ranked according to the resource costs needed to provide them. Other 25 These terms are further defined in MICH. COMP. LAWS § 550.1504(2). 26 Blue Cross Blue Shield of Michigan Hospital Provider Class Plan, at 8 (April 2013), available at http://www.michigan.gov/documents/difs/BCBSM_PCP_2013_421382_7.pdf?201308070219 24 (Exhibit E). 16 Detroit_3000130_10 Case 2:13-cv-20000-RDP Document 114 Filed 09/30/13 Page 23 of 27 factors that may be used in setting maximum payment levels include comparison to similar services, corporate medical policy decisions, analysis of historical charge data and geographic anomalies." 27 • Pharmacy Provider Class Plan: "BCBSM reimburses participating chain and independent pharmacies... [t]he sum of drug product cost plus dispensing fee, minus member liability, plus any applicable incentives." 28 • Home Health Care Provider Class Plan: For "Freestanding Home Health Care Providers... BCBSM pays the provider the lesser of allowable costs or billed charges, less member deductibles or copayments." For "Hospital-Based Home Health Care Providers... Reimbursement is determined by the parent hospital's peer group assignment as defined in Exhibit B of the Participating Hospital Agreement (PHA), and as supplemented by the PHA Payment Manual." 29 • Ambulatory Surgical Facility Provider Class Plan: "Reimbursement is limited to the lesser of the facility’s charge or BCBSM’s maximum payment level. Maximum payment level for ambulatory procedures is based on BCBSM’s established fees... Fees for outpatient surgery procedures, which BCBSM determines are not commonly performed in physicians’ offices, are aligned with hospital fees for the same procedures...." 30 Thus, the allegedly low reimbursement rates Provider Plaintiffs complain of relating to BCBSM’s Traditional business are calculated with reimbursement methodology previously reviewed and approved by the Commissioner as reflecting the "reasonable cost" of health care. In addition, BCBSM’s PPO and HMO lines of business are subject to extensive supervision by the Commissioner. See generally MICH. COMP. LAWS §§ 500.3501 – 500.3580 27 Blue Cross Blue Shield of Michigan Medical Doctor Provider Class Plan, at 1 (Oct. 2012) (Exhibit F). 28 Blue Cross Blue Shield of Michigan Pharmacy Provider Class Plan Detailed Report 2010-2011, at 5 (July 2012), available at http://www.michigan.gov/documents/lara/RX_Website_Pt_1_394319_7.pdf (Exhibit G). 29 Blue Cross Blue Shield of Michigan Home Health Care Provider Class Plan, at 8-9 (Dec. 2000), available at https://www.michigan.gov/documents/cis/hhc12_00_203770_7.pdf (Exhibit H). 30 Blue Cross Blue Shield of Michigan Ambulatory Surgical Facilities Provider Class Plan Detailed Report 2006-2007, at 4 (Jan. 2009), available at http://michigan.michigan.gov/documents/dleg/ASF_Provider_Class_Plan_Detailed_Report_2 006-2007_264449_7.pdf (Exhibit I). 17 Detroit_3000130_10 Case 2:13-cv-20000-RDP Document 114 Filed 09/30/13 Page 24 of 27 (regulating HMOs), 550.51 – 550.63 (regulating PPOs). The Insurance Code requires that BCBSM submit its HMO provider contracts, as well as any substantive changes to the contracts, to the Commissioner for approval. § 500.3529(6). "Substantive changes" includes changes to the method of payment or the risk assumed by each party under the contract. § 500.3529(6). Similarly, the Prudent Purchaser Act requires that BCBSM’s PPO provider contracts be filed with the Commissioner. § 550.53(3). In practice, the Commissioner’s regulation of BCBSM’s Traditional provider reimbursement rates impacts BCBSM’s PPO reimbursement rates. BCBSM’s PPO provider contracts contain the same contractual language and reimbursement methodology found in BCBSM’s Traditional provider contracts. 31 In fact, BCBSM cannot always separate its lines of business, thus providing the Commissioner with more information about its provider contracts than required under the Act’s provider plan review. 32 If the Commissioner orders changes to BCBSM’s Traditional provider contracts, BCBSM applies the changes to its PPO contracts in order to effectuate its goals of cost, quality and access. See § 550.1102(1). Thus, BCBSM’s HMO and PPO provider reimbursement arrangements fall under the Commissioner’s oversight. B. Subscriber and Provider Plaintiffs’ claims implicate the filed rate doctrine by demanding damages for payments made under rates approved by a regulatory agency. Subscriber Plaintiffs’ damages claims relating to BCBSM rates fail under the filed rate doctrine because they all arise from allegations that premiums filed with and previously 31 As a general practice, BCBSM’s PPO provider contracts reimburse at a rate ten percent lower than the provider contracts for Traditional business. 32 See Exhibit G at 5 n. 1 ("Although PA 350 requires BCBSM to only report on its Traditional providers, we have included Preferred Rx providers because we cannot separate traditional membership from PPO membership for this provider class."). 18 Detroit_3000130_10 Case 2:13-cv-20000-RDP Document 114 Filed 09/30/13 Page 25 of 27 approved by the Commissioner are too high. 33 These rates were previously approved as equitable, adequate and not excessive by the Commissioner, who has extensive regulatory authority over BCBSM’s rate-setting process. Provider Plaintiffs’ damages claims relating to BCBSM reimbursements for Traditional business similarly fail under the filed rate doctrine because they arise from allegations that the reimbursement methodology previously approved by the Commissioner resulted in reimbursement rates that were too low. 34 These reimbursement methodologies were submitted to the Commissioner for review to ensure that they comply with the "reasonable cost" formula set out in PA 350. Moreover, because BCBSM’s HMO and PPO provider contracts are subject to extensive supervision by the Commissioner, and because the Commissioner’s decisions impact the HMO and PPO reimbursement rates, these rates should also be considered "filed" within the meaning of the doctrine. See Texas Commercial Energy v. TXU Energy, Inc., 413 F.3d 503, 509-10 (5th Cir. 2005). To allow Subscriber and Provider Plaintiffs’ claims to go forward would undermine an agency whose extensive authority has been recognized by the Sixth Circuit, see Genord, 440 F.3d at 803, in an industry where federal courts have regularly applied the filed rate doctrine. In re Title Insurance Antitrust Cases, 702 F. Supp. 2d 840, 849 (N.D. Ohio 2010) ("[F]ederal courts have long applied the filed rate doctrine to a wide spectrum of insurance actions."). 35 Thus, Subscriber and Provider Plaintiffs’ claims for damages based on BCBSM 33 See Sub. Compl. ¶¶ 454, 455. 34 See Provider Compl. ¶¶ 227, 233. 35 See, e.g., Allen v. State Farm Fire & Cas. Co., 59 F. Supp. 2d 1217, 1228-29 (S.D. Ala. 1999) (applying the doctrine because "state agencies, such as the Alabama department of insurance, are'deeply familiar with the workings of the regulated industry and utilize this special expertise in evaluating the reasonableness of rates’" and "[a]llowing the plaintiffs to circumvent the established statutory process... would undermine Alabama’s current 19 Detroit_3000130_10 Case 2:13-cv-20000-RDP Document 114 Filed 09/30/13 Page 26 of 27 rates charged to subscribers or BCBSM reimbursements paid to providers are precisely the type of actions the filed rate doctrine is meant to prevent and should accordingly be dismissed. CONCLUSION For the reasons stated above, and in Defendants’ Motion to Dismiss/BCBSA’s Motion to Dismiss, BCBSM respectfully requests that this Court dismissing Plaintiffs’ claims pursuant to Fed. R. Civ. P. 12(b)(6). Respectfully submitted,/s/Andrew P. Campbell _____________________ Andrew P. Campbell (CAM006) LEITMAN, SIEGAL, PAYNE & CAMPBELL PC 420 20th Street North, Suite 200 Birmingham, Alabama 35203 Telephone: (205) 986-5040 Fax: (205) 986-5080 acampbell@lspclaw.com September 30, 2013 Counsel for Defendant Blue Cross Blue Shield of Michigan regulatory regime, which,... is designed to be self-policing." (quoting Wegoland, 27 F.3d at 21)); Morales v. Attorney's Title Ins. Fund, Inc., 983 F. Supp. 1418, 1429 (S.D. Fla. 1997) (dismissing plaintiffs' kickback claim against title insurer pursuant to filed rate doctrine because claim was nothing more than challenge to title insurance rates set by state regulators); Rios v. State Farm Fire & Cas. Co., 469 F. Supp. 2d 727, 737 (S.D. Iowa 2007) (applying the filed rate doctrine to common law claim seeking return of insurance premiums); Mullinax v. Radian Guar. Inc., 311 F. Supp. 2d 474, 484 n. 6 (M.D.N.C. 2004) (noting that the filing of rates by defendant mortgage insurer with the North Carolina Department of Insurance would bar plaintiffs from challenging the reasonableness of those rates); Kirksey v. Am. Bankers Ins. Co., 114 F. Supp. 2d 526, 529 (S.D. Miss. 2000) (applying filed rate doctrine to common law claim seeking return of insurance premiums); Korte v. Allstate Ins. Co., 48 F. Supp. 2d 647, 651-52 (E.D. Tex. 1999) (applying the filed rate doctrine to claim that insurer’s rates contained an illegal subsidy factor because state agency determined reasonable rates pursuant to statutory scheme); Stevens v. Union Planters Corp., No. 00-CV-1695, 2000 WL 33128256, at *3 (E.D. Pa. Aug. 22, 2000) (holding that an allegation of kickbacks in forced hazard insurance scheme was barred by filed rate doctrine); Calico Trailer Mfg. Co., Inc. v. Ins. Co. of N. Am., No. LR-C-93-717, 1994 WL 823554, at *6 (E.D. Ark. Oct. 12, 1994) (holding that the filed rate doctrine barred plaintiffs' challenge to insurance rates allegedly inflated as result of conspiracy among defendant insurance companies). 20 Detroit_3000130_10 Case 2:13-cv-20000-RDP Document 114 Filed 09/30/13 Page 27 of 27 CERTIFICATE OF SERVICE I hereby certify that on September 30, 2013 the foregoing was electronically filed with the Clerk of the Court using the CM/ECF system, which will send notification of such filing to all counsel of record in the above listed matter./s/Andrew P. Campbell_____________________ Andrew P. Campbell September 30, 2013 21 Detroit_3000130_10

Brief re {{108}} MOTION to Dismiss Defendants' Supplemental Brief in Support of Motion to Dismiss filed by Defendants' Counsel.

3 FILED 2013 Sep - 30 PM 04: 28U.S. DISTRICT COURT N. D. OF ALABAMA IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ALABAMA SOUTHERN DIVISION U Master File No. 2: 13 - CV - 20000 - RDP IN RE: BLUE CROSS BLUE SHIELD ANTITRUST LITIGATION (MDL No. 2406) U U This document relates to all cases. U - DEFENDANTS ' SUPPLEMENTAL BRIEF IN SUPPORT OF MOTION TO DISMISS 3 TABLE OF CONTENTS Page 4 •••••••••• . . . . . . . . . . 6. . . . . . . . . 10 m 7 INTRODUCTION BACKGROUND. . . ARGUMENT. . SUBSCRIBERS FAIL TO ALLEGE SUFFICIENT MARKET POWER TO STATE ANTITRUST CLAIMS. . A. Market Share Is An Essential Pleading Element. . . . B. Subscribers Do Not Allege Market Power Sufficient to Support Their Nationwide Conspiracy to Monopolize Claim. . . . . . . . . C. Subscribers Fail to Allege Any Market Share for Certain Defendants. . . . . . . Subscribers Allege Defendants ' Shares in Markets Other than What They Claim Are the Relevant Markets. . . Subscribers Allege Many Market Shares that Are Too Small to Support Their Claims. . . . . . . . . . . . . 11 Subscribers Improperly Combine Market Shares of Different Defendants. . . . . . . . . 12 G. Subscribers Ignore the Affordable Care Act and State Laws Affecting Market Share. . . . . . . . . . . . Subscribers Ignore the Low Barriers to Entry in the Health Insurance Market. . THE FILED - RATE DOCTRINE BARS CLAIMS BY SUBSCRIBERS PAYING PREMIUM RATES FILED WITH STATE AGENCIES. . A. Subscribers Cannot Recover for Alleged Injury Arising from Payment of Filed Rates. . . . . . B. Subscribers ' Conclusory Allegations Regarding Rate Filings Do Not Prevent Application of the Doctrine. . . . 18 Premiums Paid by Named Subscriber Plaintiffs Are Filed Rates. . . . . . . 22 Alabama Subscriber Plaintiffs Paid Filed Rates. 2. Arkansas Subscriber Plaintiffs Paid Filed Rates. . . . 23 Florida Subscriber Plaintiff Paid Filed Rates. . H. . . 15. . . . . 16. . 16 C. - . . . 22 m 24. 25 Hawaii Subscriber Plaintiffs Paid Filed Rates. . Mississippi Subscriber Plaintiffs Paid Filed Rates. 5. . . 26 3. . . 28. . . 30 30. . . 31 III. PUIIlI ACLS. . . . . . . . . . . . . . . . . . . . . . . . . . 35. . 38 IV. 39 New Hampshire Subscriber Plaintiffs Paid Filed Rates. . 27 7. North Carolina Subscriber Plaintiffs Paid Filed Rates. . . 8. Pennsylvania Subscriber Plaintiffs Paid Filed Rates. . . . 28 9. Rhode Island Subscriber Plaintiff Paid Filed Rates. . South Carolina Subscriber Plaintiff Paid Filed Rates. 11. Tennessee Subscriber Plaintiffs Paid Filed Rates. D. Premiums Paid by Absent Class Members to Many Defendants Are Filed Rates. . 32 SUBSCRIBERS FAIL TO STATE CLAIMS FOR UNJUST ENRICHMENT. . . . . . . . . . . . . . 33 A. Subscribers ' Unjust Enrichment Claims Are Barred By the Existence of Express Insurance Contracts. . . . . . 34 Subscribers Admit They Received the Benefit of Their Bargain with Defendants. . . Subscribers ' Unjust Enrichment Claims Are Duplicative of Their Antitrust Claims. . SUBSCRIBERS FAIL TO STATE CLAIMS FOR UNFAIR COMPETITION. . . . . . . Subscribers Fail to State a Claim Under the California UCL. B. Subscribers Fail to State a Claim for Unfair Competition in Hawaii. . . C. Subscribers Fail to State a Claim for Unfair Competition Under North Carolina Law. . SUBSCRIBERS FAIL TO STATE ANTITRUST CLAIMS CHALLENGING MFNS. . A. Subscribers Fail to Allege the Elements of Their MFN Antitrust Claims. . . . . . . . . . . . 43 1. Subscribers Allege No Specific Provider Contracts Containing MFNs. . . . . . Subscribers Fail to Allege that MFNs Are Anticompetitive. . . . . 47 3. Subscribers Fail to Allege Below - Cost Pricing and Recoupment. . . . . . . . . 4. Subscribers ' MFN Allegations are Premised on the Wrong Relevant Market. . . 51 B. Subscribers Lack Antitrust Standing to Challenge MFNs. . . . . . . . 53 SUBSCRIBERS ' ALLEGATIONS OF AN " AGREEMENT " BETWEEN SUBSCRIBE HIGHMARK, IBC, AND BC - NEPA SHOULD BE DISMISSED. . . . 39. . . 40. . . . . . . . . 41. . . . . . . . . 42. . 44 i. . . 49 VI. 54 ii 3 Subscribers Fail to Allege Facts Supporting Any Agreement Not to Compete Between Highmark and IBC. . . . . . . 54 B. Subscribers Have Pled No Facts Plausibly Suggesting Injury in Fact or Antitrust Standing with Respect to Alleged Pennsylvania Agreements. . . . . . . . . . . . . . 55 VII. ABANDONED PARTIES FROM UNDERLYING ACTIONS SHOULD BE DISMISSED AND ANY IMPROPERLY ADDED PARTY SHOULD BE STRICKEN. . . . . 57 VIII. THE SUBSCRIBER COMPLAINT IS IMPROPER SHOTGUN PLEADING. . 59 CONCLUSION. . . 62 3 LO TABLE OF AUTHORITIES Page (s) CASES Ala. Ambulance Serv ., Inc. v. City of Phenix City, Alabama, 71 F. Supp. 2d 1188 (M. D. Ala. 1999) . . . . . . Alabama v. Blue Bird Body Co ., 573 F. 2d 309 (5th Cir. 1978) . UN Allstate Interiors & Exteriors, Inc. v. Stonestreet Constr ., LLC, 907 F. Supp. 2d 216 (D. R. I. 2012) . . . . . . . . 39 Am. Bankers Ins. Co. v. Wells, 819 So. 2d 1196 (Miss. 2001) . . . . 20 Am. Standard Ins. Co. of Wisc. v. Bracht, 103 S. W. 3d 281 (Mo. Ct. App. 2003) . . Artemis Seafood, Inc. v. Butcher's Choice, Inc ., No. CIV. A. 3: 98 - CV - 0282, 1999 WL 608853 (N. D. Tex. Aug. 11, 1999) . . . . . . 37 Atl. Richfield Co. v. USA Petroleum, Co ., 495U.S. 328 (1990) . . . . . . 48, 53 Augustson v. Bank of Am ., N. A ., 864 F. Supp. 2d 422 (E. D. N. C. 2012) . . . . . . 35, 37 Austin v. Blue Cross & Blue Shield of Ala ., 903 F. 2d 1385 (11th Cir. 1990) . . . . 47, 48 Axenics, Inc. v. Turner Constr. Co ., 62 A. 3d 754 (N. H. 2013) . . . . . . . 34, 37 ••••••••••• Bailey V. Allgas, Inc ., 284 F. 3d 1237 (11th Cir. 2002) . . . . . . 5, 9, 50, 53 Ball Mem ' ] Hosp. Inc. v. Mut. Hosp. Ins ., Inc ., 784 F. 2d 1325 (7th Cir. 1986) . . . 15 Beane v. Beane, 856 F. Supp. 2d 280 (D. N. H. 2012) . . . . 3 Beaudreau v. Larry Hill Pontiac / Oldsmobile / GMC, Inc ., 160 S. W. 3d 874 (Tenn. Ct. App. 2004) . Beckwith v. Bellsouth Telecommcn ' s, Inc ., 146 Fed. Appx. 368 (11th Cir. 2005) . Bell Atl. Corp. v. Twombly, 550U.S. 544 (2007) . . . . . . 44, 54, 55 Berry v. Indianapolis Life Ins. Co ., No. 3: 08 – CV - 0248, 2011 WL 3555869 (N. D. Tex. Aug. 11, 2011) . . . . . . . . 39 Berryman v. Merit Prop. Mgmt ., Inc ., 62 Cal. Rptr. 3d 177 (Cal. Ct. App. 2007) . . . . 36 Blackburn & McCune, PLLC v. Pre - Paid Legal Servs ., Inc ., 398 S. W. 3d 630 (Tenn. Ct. App. 2010) . . . . . . . . . . . . 20 Blue Cross & Blue Shield United of Wis. v. Marshfield Clinic, 65 F. 3d 1406 (7th Cir. 1995) . . . . 42, 47 Boldt Co. v. Thomason Elec. & Am. Contractors Indem. Co ., 820 F. Supp. 2d 703 (D. S. C. 2007) . . Brokerage Concepts, Inc. v .U.S. Healthcare Inc ., 140 F. 3d 494 (3d Cir. 1998) . . . . . Brooke Grp. Ltd. v. Brown & Williamson Tobacco Corp ., 509U.S. 209 (1993) . . . . . . 49, 51 Brunswick Corp. V. Pueblo Bowl - O - Mat, Inc ., 429U.S. 477 (1977) . . . . . 53, 54, 56 Burlington N. R. R. Co. v. Sw. Elec. Power Co ., 925 S. W. 2d 92 (Tex. App. Ct. 1996), aff ' d, 966 S. W. 2d 467 (Tex. 1998) . . . . . 37 Calderone Enters. Corp. v. United Artists Theatre Cir ., Inc ., 454 F. 2d 1292 (2d Cir. 1971) . . . . Caraang v. PNC Mortg. . 795 F. Supp. 2d 1098 (D. Haw. 2011) . . . Cathey Assoc ., Inc. v. Beougher, 95 F. Supp. 2d 643 (N. D. Tex. 2000) . . 36 Chavez v. Whirlpool Corp ., 113 Cal. Rptr. 2d 175 (Cal. Ct. App. 2001) . . . . 3 ChevronTexaco Exploration & Prod. Co ., a Div. of ChevronU.S. A. Inc. v. F. E. R. C ., 387 F. 3d 892 (D. C. Cir. 2004) . City of Phila. v. Pa. Ins. Dep ' t, 889 A. 2d 664 (Pa. Commw. Ct. 2005) . . ••••••••••• City of Pontiac v. Blue Cross Blue Shield of Mich ., No. 11 - 10276, 2012 WL 1079895 (E. D. Mich. Mar. 30, 2012) . . . . . 34, 52 Cloverdale Equip. Co. v. Simon Aerials, Inc ., 869 F. 2d 934 (6th Cir. 1989) . . . . . 37 CNA Int ' l, Inc. v. Baer, 981 N. E. 2d 441 (III. App. Ct. 2012) . . . . 34 Cole v. Chevron USA, Inc ., 554 F. Supp. 2d 655 (S. D. Miss. 2007) . . . . . . . . . . 36 Cullum v. Seagull Mid - S ., Inc ., 907 S. W. 2d 741 (Ark. 1995) . . . . . . . 20 Davis v. Coca - Cola Bottling Co ., 516 F. 3d 955 (11th Cir. 2008) . 59, 60 DePriest v. AstraZeneca Pharm ., L. P ., 351 S. W. 3d 168 (Ark. 2009) . . . Deutsche Bank Nat. Trust Co. v. Austin, 385 S. W. 3d 381 (Ark. App. Ct. 2011) . . . Dolan v. Fidelity Nat ' l Title Ins. Co ., 365 Fed. Appx. 271 (2d Cir. 2010) cert. denied, 131 S. Ct. 261 (2010) . . 17, 19 E. I. Du Pont de Nemours & Co. v. FTC, 729 F. 2d 128 (2d Cir. 1984) . . . . . . . . 48 Edge v. State Farm Mut. Auto Ins. Co ., 623 S. E. 2d 387 (S. C. 2005) . . . . . . . . . . . 20 Farmers New World Life Ins. Co. v. Jolley, 747 S. W. 2d 704 (Mo. Ct. App. 1988) . . . . . 35 Fitzgerald v. Am. Sav. Bank, F. S. B ., No. CV. 11 - 00199 DAE - RLP, 2011 WL 4899939 (D. Haw. Oct. 13, 2011) . . Fla. Seed Co. v. Monsanto Co ., 105 F. 3d 1372 (11th Cir. 1997) 3 Fondedile, S. A. v. C. E. Maguire, Inc ., 610 A. 2d 87 (R. I. 1992) . . Fortune Prod. Co. v. Conoco, Inc ., 52 S. W. 3d 671 (Tex. 2000) . . Frantz v. Walled, 513 Fed. Appx. 815 (11th Cir. 2013) . . . 59, 60 Funeral Consumers Alliance, Inc. v. Serv. Corp. Int ' l, 695 F. 3d 330 (5th Cir. 2012) . . . . Garrett v. Cassity, No. 4: 09CVO1252, 2011 WL 1103637 (E. D. Mo. Mar. 23, 2011) . . . . Gaynoe v. First Union Corp ., 571 S. E. 2d 24 (N. C. Ct. App. 2002), review denied, 577 S. E. 2d 118 (N. C. 2003) . . . . . . . . . . . . . . . . . 41 Grant v. Trinity Health - Mich ., 390 F. Supp. 2d 643 (E. D. Mich. 2005) . . . . . Griffiths v. Blue Cross & Blue Shield of Ala ., 147 F. Supp. 2d 1203 (N. D. Ala. 2001) . . Guaranty Nat. Ins. Co. v. Denver Roller, Inc ., 854 S. W. 2d 312 (Ark. 1993) . . Gulf States Reorganization Grp ., Inc. v. Nucor Corp ., 822 F. Supp. 2d 1201 (N. D. Ala, 2011) (Proctor, J .) aff ' d, 11 - 14983, 2013 WL 3490824 (11th Cir. July 15, 2013) . . . . . . . . . . 6, 8 H. J. Inc. v. Nw. Bell Tel. Co ., 954 F. 2d 485 (8th Cir. 1992) . . . . . . . 19, 20 Hanover Shoe, Inc. v. United Shoe Mach. Corp ., 392U.S. 481 (1968) . . . Hazewood v. Found. Fin. Group, LLC, 551 F. 3d 1223 (11th Cir. 2008) . . . 44 Hester v. Martindale - Hubbell, Inc ., 493 F. Supp. 335 (E. D. N. C. 1980), aff ' d, 659 F. 2d 433 (4th Cir. 1981) . . . . . . 41, 43 Hicks v. City of Alabaster, Ala ., No. 2: 11 - cv - 4107, 2013 WL 988874 (N. D. Ala. Mar. 12, 2013) (Proctor, J .) . . . . . 46 3 Hill Holliday Connors Cosmopulos, Inc. v. Greenfield, 433 Fed. Appx. 207 (4th Cir. 2011) . . Hill v. BellSo. Telecomm ., Inc. . 364 F. 3d 1308 (11th Cir. 2004) . . . 17, 18 Homecomings Fin. Network, Inc. v. Brown, 343 S. W. 3d 681 (Mo. Ct. App. 2011) . . . . . 38 Hood v. Tenneco Tex. Life Ins. Co ., 739 F. 2d 1012 (5th Cir. 1984) . . Hope v. Pelzer, 240 F. 3d 975 (11th Cir. 2001), overruled on other grounds 536U.S. 730 (2002) . . . . . 46 Howard Perry & Walston Realty, Inc. v. Meredith Corp ., 77 Fed. Appx. 128 (4th Cir. July 25, 2003) . . . . . . . . . In re Apple & AT & T iPad Unlimited Data Plan Litig ., 802 F. Supp. 2d 1070 (N. D. Cal. 2011) . . . In re Ford Motor Co. Speed Control Deactivation Switch Prods. Liab. Litig ., 664 F. Supp. 2d 752 (E. D. Mich. 2009) . . In re Hawaiian & Guamanian Cabotage Antitrust Litig ., 754 F. Supp. 2d 1239 (W. D. Wash. 2010) . + + + + + + + + In re N. J. Title Ins. Litig ., . 683 F. 3d 451 (3d Cir. 2012) . . . . . . 17, 19 In re Olympia Holding Corp ., 88 F. 3d 952 (11th Cir. 1996) . . . . 18 In re Public Util. Com ' n, 257 P. 3d 223 (Haw. Ct. App. 2011) . . . . 20 In re Webkinz Antitrust Litig ., No. M 08 - 01987 JSW, 2009 WL 6346585 (N. D. Cal. Aug. 4, 2009) . . . . . . . . . . . 58 Jacobs v. Tempur - Pedic Intern ., Inc ., 626 F. 3d 1327 (11th Cir. 2010) . . . . . . . 5, 6, 55, 56 Jaffe v. Bolton, 817 S. W. 2d 19 (Tenn. Ct. App. 1991) . . Jefferson Parish Hosp. Dist. No. 2 v. Hyde, 466U.S. 2 (1984) . 3 Johnson Enters. of Jacksonville, Inc. v. FPL Grp ., Inc ., 162 F. 3d 1290 (11th Cir. 1998) Kendall v. VisaU.S. A ., Inc ., 518 F. 3d 1042 (9th Cir. 2008) . . . Keogh v. Chicago & N. W. Ry. Co ., 260U.S. 156 (1922) . . Kitsap Physicians v. Wash. Dental Serv ., 671 F. Supp. 1267 (W. D. Wash. 1987) . . . 48 Klein v. ChevronU.S. A ., Inc ., 137 Cal. Rptr. 3d 293 (Cal. Ct. App. 2012), as modified on denial of reh ' g (Feb. 24, 2012), and review denied (May 9, 2012) . . . . . . . 34 Klohs v. Wells Fargo Bank, N. A ., 901 F. Supp. 2d 1253 (D. Haw. 2012) . . . . 36 Korte v. Allstate Ins. Co ., 48 F. Supp. 2d 647 (E. D. Tex. 1999) . . . Kovilic v. City of Chicago, 813 N. E. 2d 1046 (Ill. App. Ct. 2004) . . . . . 37 L. A. Draper & Son v. Wheelabrator - Frye, Inc ., 735 F. 2d 414 (11th Cir. 1984) . . L. C. Williams Oil Co. v. Exxon Corp ., 625 F. Supp. 477 (M. D. N. C. 1985) . Ledford v. Peeples, 657 F. 3d 1222 (11th Cir. 2011) . . . . Leegin Creative Leather Products, Inc. v. PSKS, Inc ., 551U.S. 877 (2007) . . . 42 Levine v. Cent. Fla. Med. Affiliates, Inc ., 72 F. 3d 1538 (11th Cir. 1996) . . . . Little Rock Cardiology Clinic PA v. Baptist Health, 591 F. 3d 591 (8th Cir. 2009) . . . . Mack v. City of High Springs, 486 Fed. Appx. 3 (11th Cir. 2012) . . 3 Magluta v. Samples, 256 F. 3d 1282 (11th Cir. 2001) . . . . . . 60 Maris Distrib. Co. v. Anheuser - Busch, Inc ., 302 F. 3d 1207 (11th Cir. 2002) . . . 7, 51, 52 Matsushita Elec. Indus. Co ., Ltd. v. Zenith Radio Corp ., 475U.S. 574 (1986) . . . . . . . 16, 49 McCray v. Fidelity Nat. Title Ins. Co ., 682 F. 3d 229 (3d Cir. 2012) . . . . . . . . 17 McGee v. JP Morgan Chase Bank, NA, No. 12 – 10472, 2013 WL 2321782 (11th Cir. May 29, 2013) . . . . Mehan v. Gershkoff, 230 A. 2d 867 (R. I. 1967) . . . . Microsoft Corp. v. Computer Support Serv's. of Carolina, Inc ., 123 F. Supp. 2d 945 (W. D. N. C. 2000) . A Moecker v. Honeywell Int ' l Inc ., 144 F. Supp. 2d 1291 (M. D. Fla. 2001) . . . G Moore v. Weinstein Co ., LLC, No. 3: 09 - CV - 00166, 2012 WL 1884758 (M. D. Tenn. May 23, 2012) . . . . . 38 Murrow Furniture Galleries, Inc. v. Thomasville Furniture Indust ., Inc ., 889 F. 2d 524 (4th Cir. 1989) . . 43 N. C. Steel, Inc. v. Nat ' l Credit Council on Comp. Ins ., 496 S. E. 2d 369 (N. C. 1998) . . . . . Nantahala Vill ., Inc. v. NCNB Nat ' l Bank (In re Nantahala Village, Inc .), 976 F. 2d 876 (4th Cir. 1992) . . . Nat ' l Bancard Corp. v. VISAU.S. A ., Inc ., 596 F. Supp. 1231 (S. D. Fla. 1984) aff ' d, 779 F. 2d 592 (11th Cir. 1986) . . . Ocean State Physicians Health Plan, Inc. v. Blue Cross & Blue Shield of R. I ., 883 F. 2d 1101 (1st Cir. 1989) . . Oceans One Eleven, LLC v. Beach Mart, Inc ., No. 2: 07 - CV - 8 - BO, 2008 WL 4610232 (E. D. N. C. Oct. 16, 2008) . . . . Omnicare, Inc. v. UnitedHealth Grp ., Inc ., 594 F. Supp. 2d 945 (N. D. III. 2009) . . . . . . 36 vii 3 Oxbow Carbon & Minerals LLC v. Union Pac. R. Co ., No. 11 - 1049 (PLF), 2013 WL 673778 (D. D. C. Feb. 26, 2013) . Pacific Bell Tel. Co. v. Linkline Commc ' ns ., Inc ., 555U.S. 438 (2 Pan - Am. Prod. & Holdings, LLC v. R. T. G. Furniture Corp ., 825 F. Supp. 2d 664 (M. D. N. C. 2011) . . . Peacock v. Cincinnati Ins. Co. (Ex parte Cincinnati Ins. Co .), 51 So. 3d 298 (Ala. 2010) . . . . . Peterson v. Cellco P ' ship, 80 Cal. Rptr. 3d 316 (Cal. Ct. App. 2008) . . . PHG Tech ., LLC v. St. John Cos ., Inc ., 459 F. Supp. 2d 640 (M. D. Tenn. 2006) . . . . Philbrick v. eNom, Inc ., 593 F. Supp. 2d 352 (D. N. H. 2009) . . . Pitts v. Jackson Nat ' l Life Ins. Co ., 574 S. E. 2d 502 (S. C. App. 2002) . . Precision CPAP, Inc. v. Jackson Hosp ., No. 2: 05cv1096 - MHT, 2010 WL 797170 (M. D. Ala. Mar. 8, 2010) . . . 7, 13 Reading Int ' l, Inc. v. Oaktree Capital Mgmt. LLC, 317 F. Supp. 2d 301 (S. D. N. Y. 2003) . . . Republic Tobacco Co. v. N. Atl. Trading Co ., 381 F. 3d 717 (7th Cir. 2004) . . . . Retina Assocs. v. S. Baptist Hosp. of Fla ., Inc ., 105 F. 3d 1376 (11th Cir. 1997) . . . Rogers v. CIT Grp. / Equip. Fin ., Inc. (In re B. C. Rogers Poultry, Inc .), 455 B. R. 524 (Bankr. S. D. Miss. 2011) . . . . . . 37 Rongotes v. Pridemore, 363 S. E. 2d 221 (N. C. App. 1988) . . . . Royal Mile Co. v. UPMC and Highmark, Inc ., No. 2: 10 - cv - 01609 (W. D. Pa. Sept. 27, 2013) . . . 29 Ruffin - Steinback v. de Passe, 267 F. 3d 457 (6th Cir. 2001) . viii 3. . . 19 Simon V. Keyspan Corp ., No. 10 - 5437 (SAS), 2011 WL 2135075 (S. D. N. Y. May 27, 2011), aff ' d, 694 F. 3d 196 (2d Cir. 2012) . . . Spectrum Sports, Inc. v. McQuillan, 506U.S. 447 (1993) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Square D Co. v. Niagara Frontier Tariff Bureau, Inc ., 476U.S. 409 (1986) . . . 5 Stop & Shop Supermarket Co. v. Blue Cross & Blue Shield of R. I ., 373 F. 3d 57 (1st Cir. 2004) . . . S Story Parchment Co. v. Paterson Parchment Paper Co ., 282U.S. 555 (1931) . . 55 Sunbeam Television Corp. v. Nielsen Media Research, Inc ., 711 F. 3d 1264 (11th Cir. 2013) . . . Taffet v. S. Co ., 967 F. 2d 1483 (11th Cir. 1992) . . . . 20 Thompson v. RelationServe Media, Inc ., 610 F. 3d 628 (11th Cir. 2010) . . 60 Todorov v. DCH Healthcare Auth ., 921 F. 2d 1438 (11th Cir. 1991) . . 55, 57 Total Benefits Planning Agency, Inc. v. Anthem Blue Cross & Blue Shield, 552 F. 3d 430 (6th Cir. 2008) . . . . 44 Town of Norwood v. New Eng. Power Co ., 202 F. 3d 408 (1st Cir. 2000) . . . .U.S. Anchor Mfg ., Inc. v. Rule Indus ., Inc ., 7 F. 3d 986 (11th Cir. 1993) . . . . . . 5, 6, 8 Uniforce Temp. Personnel, Inc. v. Nat ' l Council on Compensation Ins ., Inc ., 892 F. Supp. 1503 (S. D. Fla. 1995), aff ' d, 87 F. 3d 1296 (11th Cir. 1996) . . . . 17, 18 United States v. Apple, Nos. 12 Civ. 2826 (DLC), 12 Civ. 3394 (DLC), 2013 WL 3454986 (S. D. N. Y. July 10, 2013) . . . . . . 48 W. Parcel Express v. UPS of Am ., Inc ., 65 F. Supp. 2d 1052 (N. D. Cal. 1998), aff ' d, 190 F. 3d 974 (9th Cir. 1999) . . . . . . . . . . . . . . . . . . . 10, 52 ix 3 Wagner v. First Horizon Pharm. Corp ., 464 F. 3d 1273 (11th Cir. 2006) . . . . . . . 59, 61 Wah Chang v. Duke Energy Trading & Mktg ., LLC, 507 F. 3d 1222 (9th Cir. 2007) . . . Wegoland Ltd v. NYNEX Corp ., 27 F. 3d 17 (2d Cir. 1994) . . . . . . . 16, 17, 20 Weyerhaeuser Co. v. Ross - Simmons Hardwood Lumber Co ., 549U.S. 312 (2007) . . . . . . . . . . . . . . . . . . . . . . . . . 43, 49, 50, 51 Whitehaven Cmty. Baptist Church v. Holloway, 973 S. W. 2d 592 (Tenn. 1998) . . . . . . . 34 Wilcox Indus. Corp. v. Hansen, 870 F. Supp. 2d 296 (D. N. H. 2012) . . . . Willis v. Rehab Solutions, PLLC, 82 So. 3d 583 (Miss. 2012) . . . STATUTES. . . 14 40 Pa. Stat. 88 981 - 3, 981 - 4, 981 - 5. . . . 40 Pa. Stat. S 3801. 303 (c) - (e) . . . . . . . 28 40 Pa. Stat. S 3803 (C) . . . 28. . . . . 28 40 Pa. Stat. 88 3803 (c) - e), 6101, 6302 (2010) . . . 40 Pa. Stat. 8 3803 (e) (1), (4), (5) . . . . . 40 Pa. Stat. 88 3804, 3808 (2010) . . . 40 Pa. Stat. 8 3804 (a) (2010) . . . . . . . . . . . 29. . . . . . . . . . . . . . . 28 15U.S. C. & 15b. . . . . . . 44 42U.S. C. & 1396r - 8. . 47. . . 13 42U.S. C. & 18031. . . . . 8 V. S. A. 8 4062 (a) (1) & (a) (3) . . . 8 V. S. A. $ 4080c. . . . 33 3 Ala. Code 8 10A - 20 - 6. 10. . . 22, 23 Ariz. Rev. Stat. 88 20 - 826 (L), 1057 and 2311. . . . . . . . . . . . . 32. . . . . . . . 23 Ark. Code. Ann. & 23 - 79 - 109 (a) (1) (A) . . . . Ark. Code Ann. & 23 - 79 - 109 (b) (1) & (3) . . . . 24. . . . . . . . . . . 39 Cal Bus. & Prof. Code 17200. . . . Colo. Rev. Stat. 8 10 - 16 - 107. . . . Conn. Gen. Stat. 8 38a - 481. . . D. C. Code SS 31 - 3501 (7A), 31 - 3514. . . . . . . . . . . . . . . . 14 Fla. St. Ann. 8 627. 410 (6) (a) . . . . . . 24 Fla. St. Ann. & 627. 411 (1) (f (1) . . . . . Ga. Code Ann. $ 33 - 21 - 13 (e) . . . . . 32 Haw. Rev. Stat. & 103 (a) . . . . . . Haw. Rev. Stat. g 105. . Haw. Rev. Stat. & 107. . . . . 25 Haw. Rev. Stat. & 431: 14G - 105 (a) . . . Haw. Rev. Stat. & 431: 14G - 106. . . . . 25 Haw. Rev. Stat. $ 480 - 2 (a) . . . . 40 32 Idaho Code Ann. & 41 - 4706. . . Ind. Code Ann. 88 IC 27 - 8 - 5 - 1, 1. 5. . . 32 Iowa Code Ann. & 514A. 13. . . 32 32 K. S. A. 88 40 - 2215 (a) - (b), (d) (1) & (f) (2) . Ky. Rev. Stat. Ann. 88 304. 17 - 380, 383. . Mass. Gen. Laws ch. Md. Code Ann ., Ins. SS 11 - 206, 11 - 205. . . . 3 Me. Rev. Stat. Ann. tit. 24A, 88 2736 (1), 2808 - B. . . 32 Minn. Stat. & 62A. 65 subd. 3 (h) . . . . . . . Minn. Stat. 8 62L. 08 subd. 8. . . . . 32 Miss. Code Ann. 88 83 - 9 - 3 (6), 83 - 9 - 5 (7) . . 26 Miss. Code. Ann. 8 83 - 63 - 7 (1) (h) . . . . . . 26. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28. . + N. C. Gen. Stat. & 58 - 50 - 130 (b) . . . . . N. C. Gen. Stat. & 58 - 65 - 40. . . . . . 28 N. C. Gen. Stat. S 75 - 1. . . . 43 N. C. Gen. Stat. 75 - 16. 2. . . . 44 N. D. Cent. Code 88 26. 1 - 30 - 19, 20. . . 11. . 32 N. H. Rev. Stat. Ann. & 415: 1. . . N. Y. Ins. Law 88 3201 (b) (1), (c) (3), 3231 (A) (1), 4235 (h), 4308 (a) - (C) . Neb. Rev. Stat. & 44 - 710 (1) . . . Nev. Rev. Stat. 88 686B. 070, 110. . . . Ohio Rev. Code Ann. 88 3923. 02, 021 (B), 3924. 06 (C), 1751. 12 (A) (1) Or. Rev. Stat. & 743. 018. . . R. I. Gen. Laws & 27 - 19. 2 - 10 (1), (2) . . . . . . 32. . 33. . . 33. . . . 14. 30. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 23 R. I. Gen. Laws 88 27 - 19 - 6 (a), (b); 27 - 19 - 7. 2; 27 - 20 - 6 (a), (b); 27 - 20 - 6. 2 S. C. Code Ann. 8 38 - 71 - 310 (B) . . . . S. D. Codified Laws 88 58 - 17 - 4. 1, 58 - 18B - 3. 1. . . Tenn. Code Ann. & 56 - 26 - 102 (a) (2010) . . . . Va. Code Ann. S 38. 2 - 316. . Va. Code Ann. 8 38. 2 - 4216. 1. . . . 33 14 Wash, Rev. Code Ann. SS 48. 19. 040, 48. 18. 110. . . . xii 3 Wis. Stat. 88 625. 13, 625. 21. . . REGULATIONS 45 C. F. R. & 154. 301. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 48 C. F. R. S 552. 238 - 75. . . 47 45 CFR S 154. 102. . 45 CFR 8 154. 200. . . 45 CFR g 154. 205. . 45 CFR g 154. 215. . . . . . . 22 45 CFR 8 154. 230. . . . 22 45 CFR $ 210. . . . 3 Colo. Code Regs. 702 - 4: 4 - 2 - 11. 32. . 32. 28. . . . . . . . . . . . . . + 211 CMR 66. 09 (5) (a) . . . 11 N. C. A. C. 12. 0329. . A. A. C. & R - 20 - 6 - 607. . . Fla. Admin. Code Ann. 690 - 149. 002. . . . 32 Fla. Admin. Code Ann. 690 - 149. 003 (2) (b) (3) - (4) . . . . 24 Fla. Admin. Code Ann. 690 - 191. 051. Ga. Comp. R. & Regs. 88 120 - 2 - 33 - . 08, 120 - 2 - 44 - . 06 (2) . . . . 32 IDAPA 18. 01. 69 - 036. 01, 18. 01. 72 - 036. 01, 18. 01. 69 - 036. 02 - 03, 18. 01. 72 - 036. 02 - 03, 18. 01. 69 - 036. 02, 18. 01. 72 - 036. 02. . . . . 32 Miss. Admin. Code 19 - 1: 38. 01 - . 09. . . 26 •••••• Miss. Admin. Code 19 - 3: 4. 01. . . . . . . . 26 N. H. Code Admin. R. Ins. 4102. 07, 4103. 07. . 27 Utah Admin. Code r. 590 - 167, 220. . . . . 33 xiii 3 OTHER AUTHORITIES 47 Fed. Reg. 50, 242, 50, 244 (Nov. 5, 1982) . . . Restatement Third of Restitution and Unjust Enrichment g 1, comment b & 8 62. . . . . . . . . . . . . . . . . χιν 3 INTRODUCTION The general failure of the subscriber plaintiffs ("Subscribers") and provider plaintiffs ("Providers") (collectively, " Plaintiffs") to state plausible antitrust claims challenging the Defendants ' trademark license agreements and supposed " price - fixing " under the BlueCard program is addressed in the Brief in Support of Defendants ' Motion to Dismiss Plaintiffs Antitrust Conspiracy Claims (the " Antitrust Conspiracy Claims Brief") . For the following additional, independent reasons, the Subscribers ' Complaint should be dismissed: Failure to Allege Market Power – The Subscribers fail to allege that Defendants possess adequate market power as required to state valid rule of reason claims for violation of Section 1 of the Sherman Act and claims for violation of Section 2 of the Sherman Act. This failure dooms all of Subscribers ' Sherman Act claims, as well as their concurrent state law claims. Filed - Rate Doctrine – Under the well - established filed - rate doctrine, premium rates filed with state regulators are deemed to be the legal rates, and Subscribers cannot assert any cause of action or claim any legally cognizable injury arising from payment of " filed rates. " Thus, all of the claims by Subscribers who have paid filed rates should be dismissed. Failure to State Claims for Unjust Enrichment – Each named subscriber plaintiff alleges a valid health insurance contract with a Defendant, and those contracts set forth the premium rates the subscriber agreed to pay. As a quasi - contractual claim, unjust enrichment does not apply because Subscribers are parties to express contracts covering the subject matter of their claims. ' The Court also lacks personal jurisdiction over, and venue is improper, as to certain of the defendants who have not been sued in their home states and who lack sufficient minimum contacts with the jurisdictions in which they have been sued. These defendants are simultaneously filing motions to dismiss for lack of personal jurisdiction and improper venue and join this motion without waiving these defenses. 3 Likewise, Subscribers cannot establish that Defendants obtained any benefit from them that is being unjustly retained because Subscribers received the benefit of their bargain; they paid agreed premiums and received health insurance. Failure to State Claims for Unfair Competition – The claims Subscribers bring under the unfair competition laws of California, Hawaii, and North Carolina fail because Subscribers do not allege that Defendants engaged in any unlawful anticompetitive conduct, and because Defendants ' receipt of agreed - to premium payments under valid insurance contracts is not, as a matter of law, unfair competition. Failure to State Claims Based on Alleged Use of MFNs – Subscribers bring inadequately pled Sherman Act claims against BCBSNC, Highmark, and BCBSSC (the " MFN Defendants ""), for alleged use of " Most Favored Nation " provisions ("MFNs") in their provider contracts. Because MFNs are tools buyers use to obtain lower prices, courts generally rule that MFNs are procompetitive and reject claims that they unreasonably restrain trade. Here, contrary to common sense, and in direct contradiction of the Providers ' assertions, the Subscribers claim that the MFN Defendants use MFNs to raise – not lower – provider reimbursement rates, and thereby somehow wrongfully restrict competition from other health insurers. But Subscribers do not allege any actual agreements with any specific providers containing MFNs. Nor do they allege facts showing how such agreements could have effected a price increase across a whole provider SOI V Wr services market. The assertion that the MFN Defendants have used MFNs to raise input costs for themselves and their health insurance competitors is, in essence, a claim for predatory pricing, and Subscribers do not allege any of the elements required to state such a claim under binding Supreme Court precedent. 3 Failure to State Claims Based on Pennsylvania Agreements - Subscribers purport to challenge an alleged agreement not to compete among several plans operating in Pennsylvania, but allege no facts to support their conclusion that an agreement not to compete even exists. In addition, because they also have failed to allege facts showing that they suffered any injury from this purported agreement not to compete, or that Subscribers are even participants in the alleged relevant market, they lack antitrust standing. Failure to Dismiss Abandoned Parties and Improper Addition of New Parties – Plaintiffs consolidated amended complaints improperly add new parties and drop parties previously named in the underlying cases comprising the MDL. Only those parties and claims included in the consolidated amended complaints can ultimately proceed in underlying actions upon transfer back to their home courts. Accordingly, only those parties properly included in both the underlying complaints and the master complaints should be allowed to proceed as parties in the MDL. Improper Shotgun Pleading - Despite the Court's admonition and the well - established law of this Circuit, Subscribers filed a 309 - page, 1, 306 - paragraph shotgun complaint. Each of the 105 counts expressly incorporates by reference every antecedent allegation – the hallmark of shotgun pleading. While Defendants are nonetheless able to identify substantive grounds for dismissal of the Subscribers ' poorly pleaded claims, neither Defendants nor the Court should be required to sift through hundreds of pages to determine which alleged facts are material to each of the Subscribers ' specific counts. 3 3 BACKGROUND The long history of the Blue Cross Blue Shield Defendants and other relevant background facts alleged in the Subscriber and Provider Complaints are set forth in the Antitrust Conspiracy Claims Brief, and incorporated herein. ARGUMENT SUBSCRIBERS FAIL TO ALLEGE SUFFICIENT MARKET POWER TO STATE ANTITRUST CLAIMS. A. Market Share Is An Essential Pleading Element. Plaintiffs ' Section 1 Sherman Act claims (Count 1 of Subscriber Complaint and Counts 1 and 2 of the Provider Complaint) only allege per se claims and thus do not allege relevant markets. Those claims should be dismissed for the reasons set forth in the Antitrust Conspiracy Claims Brief. ? Subscribers also assert a claim under Section 2 of the Sherman Act for conspiracy to monopolize against all of the Defendants (Count 2), as well as separate Sherman Act Section 1 and Section 2 claims against particular Defendants. To plead these claims, Subscribers must allege that Defendants possess market power in relevant product and geographic markets. As set forth in Section III. B of the Antitrust Conspiracy Claims Brief, the Court should dismiss Subscribers ' Section 1 and Section 2 claims because they do not allege plausible product and geographic markets. But even if Subscribers had pleaded plausible markets, their Section 1 and Section 2 claims fail for the independent reason that Subscribers have not alleged that the Defendants have sufficient market power in those markets. 2 The legal standard on a motion to dismiss is set forth in the Antitrust Conspiracy Claims Brief, and incorporated herein by reference. 3 Market power is an essential element of both Section 1 and Section 2 claims. Levine v. Cent. Fla. Med. Affiliates, Inc ., 72 F. 3d 1538, 1553 (11th Cir. 1996) (Section 1);U.S. Anchor Mfg ., Inc. v. Rule Indus ., Inc ., 7 F. 3d 986, 994 (11th Cir. 1993) (Section 2) . A defendant's market share in a properly - defined relevant market is the " principal measure " of market power. 3 Anchor Mfg ., 7 F. 3d at 999. For purposes of a Section 1 rule of reason claim, a 30 percent market share is insufficient to support a finding of market power as a matter of law. Jefferson Parish Hosp. Dist. No. 2 v. Hyde, 466U.S. 2, 26 - 29 (1984) abrogated on other grounds by IlI. Tool Works, Inc. v. Indep. Ink, Inc ., 547U.S. 28 (2006); see also Retina Assocs. v. S. Baptist Hosp. of Fla ., Inc ., 105 F. 3d 1376, 1384 (11th Cir. 1997) (15 percent market share " is insufficient, as a matter of law, to establish market power. '") . Similarly, to establish market power for purposes of a Section 2 monopolization claim, a plaintiff must show that " defendant's share of a well - defined market protected by sufficient entry barriers has exceeded 70 or 75 percent for the five years preceding the complaint. " Bailey v. Allgas, Inc ., 284 F. 3d 1237, 1250 (11th Cir. 2002) (emphasis added) (quoting IIIA Phillip E. Areeda & Herbert Hovenkamp, Antitrust Law | 801a (2d ed. 2002)); Anchor Mfg ., 7 F. 3d at 1000 ("We have discovered no cases in which a court found the existence of actual monopoly established by a bare majority share of the market .") . Moreover, where a defendant's market share is less than 50 percent, there is no " dangerous probability of successfully monopolizing a 3 The Complaints contain various allegations regarding Defendants ' allegedly high premiums and large surpluses. However, these conclusory allegations are not a substitute for alleging facts sufficient to support each element of a rule of reason claim, including Defendants ' market power in a properly - defined relevant market. See Jacobs v. Tempur - Pedic Intern ., Inc ., 626 F. 3d 1327, 1336 - 39 (11th Cir. 2010) (finding that a mere " bald statement ? " of alleged price increases is insufficient to state a claim) . In two - thirds of the states for which the Subscribers allege " supracompetitive " price increases, they fail to plead any facts showing that the local Blue Plan raised prices by more than the national average. Compare, e. g ., Subscriber Compl. 1 427, 434, 441 with id. (1 448, 462. And the Subscribers ' allegation that " above average " prices are " supracompetitive " is inherently flawed because, by definition, some rates must fall both below and above an average in order for the " average " to exist at all. 3 market. . . as a matter of law " for purposes of an attempted monopolization claim or conspiracy to monopolize claim, Anchor Mfg ., 7 F. 3d at 994; Gulf States Reorganization Grp ., Inc. v. Nucor Corp ., 822 F. Supp. 2d 1201, 1237 (N. D. Ala. 2011) (Proctor, J .) aff ' d, 11 - 14983, 2013 WL 3490824 (11th Cir. July 15, 2013) ("There can be no dangerous probability of success if the defendant was never able to maintain a majority position in the market .") (quotation omitted) . For both a rule of reason Section 1 claim and a Section 2 claim, failure to allege the required market power is grounds for dismissal. See Jacobs, 626 F. 3d at 1336 - 39 (holding that mere " bald statement " of alleged supracompetitive prices is insufficient to state a claim); Nucor, 822 F. Supp. 2d at 1231 (holding that market power in a relevant market is an " indispensable element " of Sherman Act claims) (citing Anchor Mfg ., 7 F. 3d at 994); see also Republic Tobacco Co. v. N. Atl. Trading Co ., 381 F. 3d 717, 737 (7th Cir. 2004) (holding that allegations of price increases do not obviate need to show defendant's " substantial share " of a relevant market) . Here, Subscribers do not allege that Defendants have sufficient market power in most of Subscribers ' alleged geographic markets. A chart showing the defects in the market share allegations as to specific Defendants, described below, is attached hereto as Appendix I. B. Subscribers Do Not Allege Market Power Sufficient to Support Their Nationwide Conspiracy to Monopolize Claim. In order to bring their nationwide conspiracy to monopolize claim against all Defendants on behalf of the purported national class (Count 2), Subscribers must allege sufficient market power in a nationwide geographic market. See Funeral Consumers Alliance, Inc. v. Serv. Corp. Int ' l, 695 F. 3d 330, 348 (5th Cir. 2012) ("Because Appellants brought this case as a nationwide class action, the recovery they seek under 8 4 of the Clayton Act requires that they show the relevant geographic market is national (i. e ., that it corresponds with the geographic scope of the 3 proposed class) . " (citation omitted)) . However, as discussed in the Antitrust Conspiracy Claims Brief, Subscribers do not even attempt to allege a nationwide geographic market, instead relying upon Defendants ' service areas and a mix of metro - and micropolitan statistical areas within each state as the relevant markets. See Consol. Am. Subscriber Compl. ("Sub. Compl .") 1 559. 4 Subscribers would also have to allege that Defendants ' national market share exceeds 50 percent in order for Count 2 to survive dismissal, but the Subscriber Complaint contains no allegations of Defendants ' market power nationwide. Sub. Compl. II 559 - 64. Furthermore, even if a national market were alleged, Subscribers could not bring a claim against all Defendants based on a conspiracy to jointly monopolize that market because such " joint monopoly " claims are improper as a matter of law. See, e. g ., Maris Distrib. Co. v. Anheuser - Busch, Inc ., 302 F. 3d 1207, 1218 - 19 (11th Cir. 2002) . " [ T ] he offense of monopolization under Section 2 refers to market dominance by a single firm, " and Congress did not intend for Section 2 to reach " shared monopolies or oligopolies at all, but rather the complete domination of a market by a single economic entity. " Precision CPAP, Inc. v. Jackson Hosp ., No. 2: 05cv1096 - MHT, 2010 WL 797170, at * 14 (M. D. Ala. Mar. 8, 2010) (citation and internal quotation marks omitted) . Conspiracy to monopolize claims premised on a " shared " monopoly " must therefore be dismissed " because " market power continues to be shared among [ ] otherwise unrelated entities. " Id. at * 15 (citation and internal quotation marks omitted); Ala. Ambulance 4 References herein to paragraph numbers in the Subscriber Complaint reflect the paragraph numbering set forth in the " Errata to Subscriber Track Consolidated Class Action Complaint. " See Sept. 6, 2013 Notice by Pls. ' Counsel [ ECF No. 99 ] . 5 Although Subscribers allege the percentage of Americans insured by Blue Plans, the number of Blue Plans that are the largest insurer in their states, and the number of providers who contract with Blue Plans (Sub. Compl. (T 46, 346), none of these allegations corresponds to measures of market power or market share in a properly defined market. 3 Serv ., Inc. v. City of Phenix City, Alabama, 71 F. Supp. 2d 1188, 1197 (M. D. Ala. 1999) ("[ B ] ecause a shared monopoly does not violate 8 2, neither does conspiracy to create shared monopoly. " (citation omitted)); see also Oxbow Carbon & Minerals LLC v. Union Pac. R. Co ., No. 11 - 1049 (PLF), 2013 WL 673778, at * 6 - 7 (D. D. C. Feb. 26, 2013) ("A Conspiracy Between Two Firms to Share Market Power is Not a Conspiracy to Monopolize") (collecting cases) . Any contention by Subscribers that all Defendants agreed to " share market power " nationwide rather than " creat [ e ] a single monopoly " cannot support a cognizable Section 2 claim. Oxbow, 2013 WL 673778, at * 6 - 7. Therefore, Count 2 of the Subscriber Complaint should be dismissed against all Defendants. Moreover, Subscribers could not plead a " dangerous probability " that the Defendants could " successfully monopoliz [ e ] " any national market for purposes of Count 2. Anchor M8, 7 F. 3d at 994; see also Spectrum Sports, Inc. v. McQuillan, 506U.S. 447, 459 (1993) (Establishing dangerous probability of success " requires inquiry into the relevant product and geographic market and the defendant's economic power in that market ."); Nucor, 822 F. Supp. 2d at 1237. It is simply implausible for Subscribers to claim that Defendants somehow have a " dangerous probability of successfully monopolizing " a national market when Subscribers concede that the alleged decades - old " conspiracy " began as early as the 1930s and yet no monopoly has resulted in over 75 years. Sub. Compl. II 316 - 22. Count 2 of the Complaint fares no better even if premised on the alleged statewide geographic markets instead of a nationwide geographic market. See Sub. Compl. 1 559. Setting aside the fact that it is improper for a nationwide class to bring such a claim, Subscribers would need to allege that each Defendant has at least 50 percent market share in its own Service Area in order to bring a conspiracy to monopolize claim against that particular Defendant. For the 3 reasons explained below, Subscribers have plainly failed to do so. They have not alleged any market shares for certain Defendants, and the alleged market shares of other Defendants are far too low to state a claim. Nor have Subscribers alleged a " dangerous probability " that each of these Defendants could successfully monopolize their respective Service Area or the alleged metropolitan and micropolitan statistical areas given that (a) they have not done so in the eight or so decades since the alleged conspiracy was formed, and (b) extensive new regulations under the Patient Protection and Affordable Care Act ("ACA") will significantly impact competition for individual and small group health insurance. C. Subscribers Fail to Allege Any Market Share for Certain Defendants. The Subscriber Complaint contains no allegations about individual Defendants ' market power in over two - thirds of the approximately 1, 000 alleged geographic markets. As a threshold matter, Subscribers allege no shares in any geographic market for BSID (Sub. Compl. 1 98); Capital (id. (217); and BCBSPR (id. (219), and therefore Subscribers ' claims (Count 2) against BSID, Capital, and BCBSPR should be dismissed. In addition, Subscribers allege no service area market shares for BCBSKC. ° Id. (153, 479 - 81. Subscribers also allege no Defendant market shares in the vast majority of the alleged metropolitan service areas, micropolitan service areas, and counties that supposedly make up their relevant geographic markets. Indeed, for most 6 Subscribers allege that as of 2010, " BCBS - KC held between 32 and 62 percent share of the relevant market in regions in its service area of Missouri. " Sub. Compl. [ 480 (emphasis added); see also id. (153 ("in parts of its service area in Missouri, BCBS - KC has as much as 62 percent market share, or more") (emphasis added) . These allegations of specific market share only in " regions " or " parts " of BCBS - KC's " Missouri " service area actually say nothing about BCBS - KC's market share, because they ignore the remainder of the plan's service area in Missouri, as well as the portions of its service area that are located in the state of Kansas. And in one of the two " parts " of the partial service area, Subscribers allege only 32 percent market share (id. (465), which is insufficient as a matter of law to show market power. See, e. g. Allgas, 284 F. 3d at 1250. 3 Defendants, no local market shares are alleged in any local geographic market. " Subscribers instead cherry - pick a handful of the hundreds of alleged local markets in order to give a distorted picture of Defendants ' market shares. The claims against all Defendants should be dismissed in all claimed state and local markets where Subscribers do not even allege Defendants ' state and local market shares. The Court should strictly construe each count of the complaint as surviving dismissal only to the extent market shares are actually alleged for particular state and local geographic markets. See App. I. Subscribers Allege Defendants ' Shares in Markets Other than What They Claim Are the Relevant Markets. For certain Defendants, Subscribers allege their market share in the overall market for commercial health insurance – not their share of the alleged individual and small group product market that Subscribers allege is the relevant market for their claims. See Sub. Compl. 1 404. " Market share data must reflect the actual circumstances in a relevant market and must not be extrapolated from separate or parallel markets. " W. Parcel Express v. UPS of Am ., Inc ., 65 F. Supp. 2d 1052, 1061 (N. D. Cal. 1998), aff ' d, 190 F. 3d 974 (9th Cir. 1999) (citations omitted) . The Defendants for whom Subscribers have improperly alleged only their share of the overall commercial health insurance market include: BCBSCO (Sub. Compl. 1 73); BCBSIN (id. (111); Comm BCBSNV (id. (165); Empire (id. 1 187); BCBS - Western NY (id. (187); BS - Northeastern NY 7 BCBSAK (Sub. Compl. (55), BCBSAZ (id. 163), BCBSCO (id. J 73), BCBSCT (id. J 77), BCBSDE (id. (81), BCBSGA (id. 1 89), BCID (id. (97), BCBSIA (id. T 103), BCBSIN (id. (111), BCBSKS (id. 1 115), BCBSKY (id. 1 119), BCBSLA (id. TT 123, 458 - 59), BCBSME (id. (1 127), BCBSMD (id. 1 131), BCBSMA (id. (135), BCBSMN (id. 1 143), BCBSMT (id. (157), BCBSNE (id. | 161), BCBSNV (id. [ 165), BCBSNJ (id. | 173), BCBSNM (id. 1 177), Empire (id. (187), BCBS - Western NY (id. (187), BS - Northeastern NY (id. 187), Excellus (id. 1 187), BCBSND (id. (195), BCBSOH (id. 1 199), BCBSOK (id. 1 203), BCBSOR (id. 1 207), Highmark (id. II 217, 503 - 04), BC - Northeastern PA (id. (1 217), Independence (id. I [ 217), BCBSRI (id. IT 224, 515 - 16), BCBSSD (id. 1 232), BCBSUT (id. (244), BCBSVT (id. (248), BCBSVA (id. (252), BCWA (id. 1 258), BSWA (id. 1 258), BCBSDC (id. | 262), BCBSWV (id. 1 266), BCBSWI (id. (270), BCBSWY (id. [ 274) . 10 3 (id. (187); Excellus (id. 1 187); Highmark (id. I 217, 503 - 04); BC - Northeastern PA (id. (1 217); and Independence (id. (1 217) . Subscribers cannot distinguish between the alleged markets for small group and large group insurance and then allege market shares based on both alleged markets combined. Subscribers ' claims against each of these Defendants (Counts 2, 76, 77, 78, 79, 80, and 81) should thus be dismissed. See App. I. E. Subscribers Allege Many Market Shares that Are Too Small to Support Their Claims. Even where Subscribers allege a Defendant's market share in the claimed individual and small group insurance market, the size of the Defendant's alleged market share is frequently insufficient to state Section 1 and Section 2 claims in many alleged geographic markets. mo Subscribers ' Section 2 conspiracy to monopolize claims (Count 2) against each of the following Defendants should be dismissed as a matter of law because their alleged state and local market shares are below 50 percent and therefore too small: BCBSAZ (id. | 63); BSCA (id. 1 69, 429 31); BCBSCT (id. (77); BCBSGA (id. 89); BCID (id. 197); BCBSMO (id. 153, 479 - 81); BCBSOH (id. 199); BCBSOR (id. 1 207); BCBSUT (id. | 244); BCWA (id. 1 258); BSWA (id. 1 258); and BCBSWI (id. 1 270) . Similarly, Subscribers ' state - specific monopolization and / or attempted monopolization claims (Counts 11, 12, 14, 15, 32, 35, 56, 57, 59, and 60) against the following Defendants should be dismissed because the alleged state and local market shares are insufficient as a matter of law (below 70 percent for monopolization, and below 50 percent for attempted monopolization): BSCA (id. I 69, 429 - 31); BCBSIL (id. II 107, 451 - 52); and BCBSMO (id. 19 153, 479 - 81) . 8 Furthermore, the claims against all Defendants should be 8 Many of Subscribers ' claims also will fail as a matter of law to the extent the Court rejects any of Subscribers " proposed geographic markets. For example, if the Court rejects Subscribers ' proposed statewide geographic 11 3 dismissed in all local markets where Defendants ' local market shares are insufficient to state a claim, and the Court should strictly construe each count of the complaint as surviving dismissal only to the extent the alleged market shares are sufficient to state a claim in particular statewide or local geographic markets. See App. I. F. Subscribers Improperly Combine Market Shares of Different Defendants. Subscribers also improperly aggregate the market shares of separate Defendants in many of their other claims. As addressed above, such " joint monopoly " claims are improper as a matter of law. Subscribers allege " shared " monopoly claims in California against BCCA and BSCA (Counts 11, 12, 14, 15); 9 in Missouri against BCBSMO and BCBSKC (Counts 56, 57, 59, 60); 1° in Idaho against BCID and BSID (Count 2); 11 in New York against BCBS - Western NY, markets, then Counts 2, 7, 51, 52, 63, 66, 91, and 95 should be dismissed against the following Defendants because the local market shares alleged are insufficient to state a claim: BCBSAR (Sub. Compl. IT 59, 423 - 24); BCBSMS (id. II 147, 473 - 74); BCBSNH (id. I 168, 487 - 88); BCBSSC (id. II 228, 522 - 23); and BCBSTN (id. 1 236, 529. 32) . Similarly, if the Court rejects Subscribers ' proposed local geographic markets, then Counts 2, 11, 12, 14, 15, 19, 20, 22, 23, 25, 28, 44, 47, 100, and 103 should be dismissed against the following Defendants because the alleged statewide market shares are insufficient to state a claim: BCCA (id. II 69, 429 - 31); BCBSFL (id. IL 85, 437 - 38); BCBSHI (id. (T 93, 444 - 45); BCBSMI (id. TT 139, 466 - 67); and BCBSTX (id. (1 240, 537 - 38) . In addition, Subscribers allege market shares separately for individual and small group insurance for certain defendants in situations where the alleged market share for either individual or small group insurance is insufficient to state a claim. Subscribers ' Section 2 claim (Count 2) against the following defendants should be dismissed for this reason: BCBSKS (id. (115); BCBSKY (id. (119); BCBSME (id. 1 127); BCBSMA (id. T 135); BCBSMN (id. 1 143); BCBSNE (id. 161); BCBSNM (id. (177); BCBSOK (id. 1 203); BCBSTN (id. Iq 236, 529 - 31); BCBSVT (id. 1 248); BCBSWV (id. 1 266); and BCBSWY (id. (274) . Similarly, Subscribers ' monopolization and / or attempted monopolization claims (Counts 7, 51, 63, 66, 91, 95, and 96) should be dismissed against the following Defendants: BCBSAR (id. TT 59, 423 - 24); BCBSMS (id. (147, 473 - 74); BCBSNH (id. II 169, 187 - 88); BCBSSC (id. II 228, 522 - 23); and BCBSTN (id. I 236, 529 - 31) . 9 " BC - CA and BS - CA have monopoly power in the individual and small group full - service commercial health insurance market in California. " Sub. Compl. [ 625. 10 " BCBS - MO and BCBS - KC have monopoly power in the individual and small group full - service commercial health insurance market in Missouri. " Id. 1953. 11 " BC - ID, together with BS - ID, currently exercises market power in the commercial health insurance market throughout Idaho. " Id. 197. 3 BS - Northeastern NY, Empire, and Excellus (Count 2); 12 and in Washington against BCWA and BSWA (Count 2) . 13 These " joint monopoly " claims fail as a matter of law, and therefore Counts 2, 11 - 15, and 56 - 60 also should be dismissed against these Defendants. See Precision CPAP, 2010 WL 797170, at * 14. Subscribers Ignore the Affordable Care Act and State Laws Affecting Market Share. The Subscriber's market power allegations do not take into account the impact of federal health care reform generally, and specifically the ACA, on Defendants ' alleged market power. The ACA creates a new comprehensive statutory scheme that governs the sale of individual and small group insurance in the United States. No later than January 1, 2014, each state must establish an American Health Benefit Exchange ("Exchange") for individuals to purchase health insurance, as well as a Small Business Health Options Program ("SHOP Exchange") for small groups to purchase health insurance for their employees. 42U.S. C. & 18031 (b) . The Exchanges will operate through " internet portals " accessible to individuals and small groups, and will include a system that rates participating health plans based on " relative quality and price. " Id. $ 18031 (c) (3); see also id. & 18031 (5) . The Exchanges will have a significant effect on competition among health insurers for individuals and small groups, and therefore Defendants CO market share in these alleged markets is not an accurate reflection of Defendants ' actual market power once these provisions of the ACA go into effect. Failure to take the ACA into account 12 " Empire BCBS, BCBS - Western New York, BS - Northeastern New York, and Excellus BCBS currently exercise market power in the commercial health insurance market throughout their respective service areas of New York. " Id. I 187. S " BC - WA and BS - WA currently exercise market power in the commercial health insurance market throughout Washington. " Id. 1 258. 13 3 renders Subscribers ' market share allegations insufficient as a measure of Defendants ' future market power. The Subscribers also fail to account for state " insurer of last resort ? " laws and other statutes that required certain Defendants to provide coverage to those who are rejected or dropped by other health insurers. See, e. g ., 40 Pa. Stat. 88 981 - 3, 981 - 4, 981 - 5; City of Phila. v. Pa. Ins. Dep ' t, 889 A. 2d 664, 668 (Pa. Commw. Ct. 2005) (noting that the Pennsylvania Blues have " status as the insurer of last resort"); 8 V. S. A. & 4080c ("[ h ] ealth insurance safety net ? " requires BCBSVT to insure those persons whose coverage is dropped or not renewed by other insurers); R. I. Gen. Laws 8 27 - 19. 2 - 10 (1), (2) (requiring BCBSRİ to (1) offer small group insurance, (2) offer individual insurance with a 30 - day period of open enrollment once a year, and (3) " [ e ] mploy pricing strategies that enhance the affordability of health care coverage"); Va. Code Ann. S 38. 2 - 4216. 1 (requiring Blue Plans in Virginia to participate in an open enrollment program for individuals); D. C. Code SS 31 - 3501 (7A), 31 - 3514 (requiring Blue Plan in D. C. to operate an open enrollment program open to at least 2, 500 individuals) . Competing health insurers frequently refused to insure persons in the individual and small group categories because of the high risk and often negative profitability associated with insuring these persons. Therefore, such laws artificially skew these Blue Plans ' market shares in the individual and small group categories so that they overstate the Plans ' actual market power. Failure to take these laws into account renders Subscribers ' alleged market share allegations irrelevant as a measure of Defendants ' current market power. 14 3 H. Subscribers Ignore the Low Barriers to Entry in the Health Insurance Market. Even if Subscribers could allege a large market share, this allegation alone does not suggest market power in industries where the barriers to entry are low – that is, where new firms could readily enter or existing firms could readily expand capacity. Nat ' l Bancard Corp. v. VISAU.S. A ., Inc ., 596 F. Supp. 1231, 1259 (S. D. Fla. 1984) aff * d, 779 F. 2d 592 (11th Cir. 1986) (defendant lacked market power, even if it had large market share, where there were no significant barriers to entry); Moecker v. Honeywell Int ' l Inc ., 144 F. Supp. 2d 1291, 1308 (M. D. Fla. 2001) ("[ W ] here entry barriers are low, market share does not accurately reflect the party's market power. " (citations omitted)); see also Ball Mem ' I Hosp. Inc. v. Mut. Hosp. Ins ., Inc ., 784 F. 2d 1325, 1335 (7th Cir. 1986) ("[ T ] he lower the barriers to entry. . . the less power existing firms have .") . In the insurance market, barriers to entry are generally low. For example, the Seventh Circuit has made clear that the " Blues do not own any assets that block or delay entry. " Id. at 1335 (Easterbrook, J .) . Unlike the " steel industry, in which a firm must take years to build a costly plant before having anything to sell, " in the insurance industry, the " productive asset ' of the insurance business is money, which may be supplied on a moment's notice, plus the ability to spread risk, which many firms possess and which has no geographic boundary. " Id. (citations omitted); see also Hood v. Tenneco Tex. Life Ins. Co ., 739 F. 2d 1012, 1019 (5th Cir. 1984) (observing that the insurance industry is marked by ease of entry) . Because barriers to entry in the insurance industry are low, large market shares are not indicative of market power, and even existing firms with large market shares lack market power by definition because increasing price 3 above competitive levels will induce entry into the market, and in turn, bring prices back to competitive levels. See Matsushita Elec. Indus. Co ., Ltd. v. Zenith Radio Corp ., 475U.S. 574, 591 n. 15 (1986) ([ W ] ithout barriers to entry it would presumably be impossible to maintain supracompetitive prices for an extended time .") . * * * * In sum, despite the extraordinary length of their Complaint, Subscribers fail to allege plausible relevant markets or Defendants ' market power in those relevant markets. As a result, they fail to state viable federal or state antitrust claims. II. THE FILED - RATE DOCTRINE BARS CLAIMS BY SUBSCRIBERS PAYING PREMIUM RATES FILED WITH STATE AGENCIES. " Simply stated, the [ filed - rate ] doctrine holds that any filed rate ' – that is, one approved by the governing regulatory agency – is per se reasonable and unassailable in judicial proceedings brought by ratepayers. " Wegoland Ltd v. NYNEX Corp ., 27 F. 3d 17, 18 (2d Cir. 1994); see also Square D Co. v. Niagara Frontier Tariff Bureau, Inc ., 476U.S. 409, 423 - 24 (1986); Keogh v. Chicago & N. W. Ry. Co ., 260U.S. 156 (1922) . The gravamen of the Subscribers ' complaint is that, as a result of the Defendants ' alleged actions, subscribers have paid supra - competitive premiums for their health insurance. Sub. Compl. 1 2. But many OSI Defendants charge premium rates that were filed with state insurance regulators. These rates are, as a matter of law, deemed to be legal rates. Because Subscribers cannot suffer any legally cognizable injury from paying them, their claims should be dismissed with prejudice. A. Subscribers Cannot Recover for Alleged Injury Arising from Payment of Filed Rates. The filed - rate doctrine serves two primary purposes: (1) it protects against discrimination in rates as between different ratepayers, and (2) it prevents courts from having to determine the 16 3 reasonableness of rates, a task better suited to regulatory agencies. See Wegoland, 27 F. 3d. at 19; McCray v. Fidelity Nat. Title Ins. Co ., 682 F. 3d 229, 241 (3d Cir. 2012); In re N. J. Title Ins. Litig ., 683 F. 3d 451, 455 (3d Cir. 2012) . The doctrine applies " whenever either the nondiscrimination strand or the nonjusticiability strand underlying the doctrine is implicated by the cause of action the plaintiff seeks to pursue. ' " Hill v. Bellso. Telecomm ., Inc ., 364 F. 3d 1308, 1316 (11th Cir. 2004) (citing Marcus v. AT & T Corp ., 138 F. 3d 46, 59 (2d. Cir. 1998)) . The doctrine applies regardless of the level of scrutiny applied by the agency in reviewing the rates: " [ i ] t is the filing of the tariffs, and not any affirmative approval or scrutiny by the agency, that triggers the filed rate doctrine. " Town of Norwood v. New Eng. Power Co ., 202 F. 3d 408, 419 (1st Cir. 2000) (citations omitted); see also Dolan v. Fidelity Nat ' l Title Ins. Co ., 365 Fed. Appx. 271, 274 (2d Cir. 2010) ("[ i ] t is well - established that the doctrine applies to all filed rates, not merely those rates investigated"), cert. denied, 131 S. Ct. 261 (2010) (citations omitted); N. J. Title Ins. Litig ., 683 F. 3d at 458 - 59 (rejecting requirement that agency must " meaningfully review " rates for doctrine to apply) . Claims are thus barred by the filed - rate doctrine whenever the fact finder would have to " measure the difference between the properly approved. . . rates paid by plaintiffs and those mythical rates which would have been applicable but for the defendants ' concerted activity. " Uniforce Temp. Personnel, Inc. v. Nat ' l Council on Compensation Ins ., Inc ., 892 F. Supp. 1503, 1512 (S. D. Fla. 1995), aff " d, 87 F. 3d 1296 (11th Cir. 1996); see also Wegoland, 27 F. 3d at 21 (claims precluded if they " would require determining what rate would have been deemed reasonable absent the [ unlawful ] acts, and then finding the difference between the two ? " (citations omitted)) . The filed - rate doctrine is applied " strictly, often with harsh results. " In re 17 3 Olympia Holding Corp ., 88 F. 3d 952, 956 (11th Cir. 1996) (citing Louisville & N. R. R. v. Maxwell, 237U.S. 94, 100 (1915)) . On behalf of each of the statewide classes, the Subscriber Complaint seeks to recover damages equal to " three times the amount by which premiums charged by [ the Blue Plan ] have been artificially inflated above their competitive levels during the Class Period. " Sub. Compl ., Relief Requested 11e (BCBSAL); f (BCBSAR); g (BCCA and BSCA); j (BCBSFL); 1 (BCBSHI); n (BCBSIL); p (BCBSLA); r (BCBSMI); t (BCBSMS); v (BCBSMO and BCBSKC); x (BCBSNH); z (BCBSNC); bb (Highmark); cc (BCBSRI); ee (BCBSSC); ff (BCBSTN); and hh (BCBSTX) . In other words, Subscribers seek to recover the difference between (a) the premiums they were charged by the Defendants, and (b) the premiums they purportedly would have been charged in a competitive market but for the alleged misconduct. 14 To the extent the Subscribers challenge filed rates, their damages claims are barred by the filed rate doctrine. Uniforce, 892 F. Supp. at 1512. B. Subscribers ' Conclusory Allegations Regarding Rate Filings Do Not Prevent Application of the Doctrine. In an effort to evade the bar presented by the filed - rate doctrine, Subscribers make generic and conclusory allegations that many of the Defendants charge subscribers health 14 The damages prayer makes clear that the distinction Subscribers attempt to draw between being " damaged by paying supra - competitive premiums, " Sub. Compl. 1 385, and suffering " damages as a result of not being offered lower health insurance premiums by competitors or potential competitors, " id. 1 386, is a specious distinction without a difference. The claimed injury (the lack of competitive prices) and the measure of damage (the difference between the alleged anticompetitive prices and the prices in a competitive market but for the alleged wrongdoing) are the same in both articulations. See Hanover Shoe, Inc. v. United Shoe Mach. Corp ., 392U.S. 481, 489 (1968) (holding that the measure of damages in an antitrust case is the " amount of the overcharge, " or the difference between the price paid by the plaintiff and the price that the plaintiff would have paid absent the violation); see also Hill, 364 F. 3d at 1317 (recognizing that " even if a claim does not directly attack the filed rate, an award of damages to the customer that would, in effect, result in a judicial determination of the reasonableness of that rate is prohibited under the filed rate doctrine") . 18 3 insurance premium rates that are never filed, or that differ from the rates that are filed and approved by state regulators. See, e. g ., Sub. Compl. II 543 - 45. As an initial matter, the filed rate doctrine is routinely applied at the motion to dismiss stage, 15 and Subscribers ' conclusory allegations relating to legal issues are incorrect, and not entitled to any presumption of truth. See, e. g ., McGee v. JP Morgan Chase Bank, NA, No. 12 – 10472, 2013 WL 2321782, at * 1 (11th Cir. May 29, 2013) . Furthermore, " filed rates " are not limited to single, uniform rates. For example, rates set by or under an approved rate schedule or rating formula are " filed rates. " See ChevronTexaco or Exploration & Prod. Co ., a Div. of ChevronU.S. A. Inc. v. F. E. R. C ., 387 F. 3d 892, 894 (D. C. Cir. 2004) ("A method or formula for calculating a rate, also called a ʻrate rule, " when enshrined in an approved tariff, is itself a ' filed rate. ""); see also Dolan, 365 Fed. Appx. at 273 (applying doctrine to rate schedules filed under state insurance regime); Wah Chang v. Duke Energy Trading & Mktg ., LLC, 507 F. 3d 1222, 1224 - 26 (9th Cir. 2007) (applying doctrine to rates set under agency - approved market - based pricing formula) . Similarly, rates that fall within an agency - approved rate range are " filed rates " that may not be challenged. See, e. g ., Korte v. Allstate Ins. Co ., 48 F. Supp. 2d 647, 652 (E. D. Tex. 1999) (applying filed - rate doctrine to bar claims challenging rates within statutorily prescribed 30 percent range of agency - approved benchmark); In re Hawaiian & Guamanian Cabotage Antitrust Litig ., 754 F. Supp. 2d 1239, 1247 - 48 (W. D. Wash. 2010) (rates falling within a statutorily prescribed proximity to the previous year's rates – the " zone of reasonableness " – could not be challenged under the federal antitrust laws); Simon v. Keyspan Corp ., No. 10 - 5437 (SAS), 2011 WL 2135075, at * 2 (S. D. N. Y. 15 See, e. g ., N. J. Title Ins. Litig ., 683 F. 3d 451 (3d Cir. 2012) (affirming Rule 12 (b) (6) dismissal under filed - rate doctrine); Dolan, 365 Fed. Appx. 271 (same); H. J. Inc. v. Nw. Bell Tel. Co ., 954 F. 2d 485 (8th Cir. 1992) (same) . 19 3 May 27, 2011) (applying filed rate doctrine to " market - based " rate scheme, under which defendant could " set its rates for installed capacity at any price within the range permitted under the. . . [ tariff ] " without regulator review (citation omitted)), aff ' d, 694 F. 3d 196 (2d Cir. 2012) . Subscribers ' allegation that " [ n ] o Defendant Individual Blue Plan filed its insurance rate (s) with a federal regulatory agency, " Sub. Compl. 1 550, is likewise without merit. Courts have consistently recognized that " the rationale underlying the filed rate doctrine applies whether the rate in question is approved by a federal or state agency. " H. J. Inc ., 954 F. 2d at 494; see also Taffet v. S. Co ., 967 F. 2d 1483, 1494 (11th Cir. 1992) (adopting same); Wegoland, 27 F. 3d at 20 ("[ C ] ourts have uniformly held, and we agree, that the rationales underlying the filed rate doctrine apply equally strong to regulation by state agencies. " (citation omitted)) . Accordingly, the doctrine is broadly applied to rates that are approved under either federal or state regulatory schemes. And where, as here, rates are approved under a state regulatory scheme, the bar operates to preclude both federal claims and state claims in those states that have also adopted the doctrine. See, e. g ., Peacock v. Cincinnati Ins. Co. (Ex parte Cincinnati Ins. Co .), 51 So. 3d 298, 305 - 06 (Ala. 2010) (applying filed - rate doctrine in the insurance context); Cullum v. Seagull Mid - S ., Inc ., 907 S. W. 2d 741, 745 (Ark. 1995) (applying filed rate doctrine to state law claims); In re Public Util. Com ' n, 257 P. 3d 223, 229 (Haw. Ct. App. 2011) (recognizing applicability of doctrine under state law); Am. Bankers Ins. Co. v. Wells, 819 So. 2d 1196, 1203 - 04 (Miss. 2001) (recognizing state adoption of doctrine); N. C. Steel, Inc. v. Nat ' l Credit Council on Comp. Ins ., 496 S. E. 2d 369, 372 (N. C. 1998) (adopting doctrine from Keogh and applying it to bar North Carolina state law claims); Edge v. State Farm Mut. Auto Ins. Co ., 623 S. E. 2d 387, 392 (S. C. 2005) (adopting doctrine); Blackburn & McCune, PLLC v. Pre - Paid Legal Servs ., Inc ., 398 20 3 S. W. 3d 630, 664 (Tenn. Ct. App. 2010) (assuming that filed - rate doctrine would bar claims by policyholders challenging insurance premium rates under state law) . 16 Subscribers ' allegation regarding the lack of federal regulatory review also ignores the fact that federal regulators will have sweeping new authority under the ACA to review Defendants ' rates beginning on January 1, 2014, which will likely preclude the recovery of any damages based on purportedly inflated premium rates paid after this date. The ACA imposes a comprehensive new regulatory regime that, among other important provisions, augments the robust scrutiny of rates already performed by states. The ACA and its implementing regulations require theU.S. Department of Health and Human Services ("HHS") to review rate increases for reasonableness. 45 CFR 8 154. 102, et seq. Proposed rate increases that exceed 10 percent (or any state statutory threshold) are subject to review. Id. g 154. 200. The agency will find such rate increases " unreasonable " if they are " excessive, " " unjustified, " or " unfairly discriminatory. " Id. & 154. 205. For example, to determine whether a rate increase is " excessive, " HHS will consider the insurers ' " projected medical loss ratio " and the underlying " assumption on which the rate increase is based. " 45 CFR g 154. 205 (3) . Insurers proposing such a rate increase must 16 Given the regularity with which states have adopted the federally - developed doctrine, it is likely that each state in which the federal filed - rate doctrine applies would also adopt the doctrine to bar state law claims if presented with the issue. In any event, given the potential for infringement on state regulatory regimes if this Court were to find otherwise and adjudicate the state claims, the Court should at a minimum exercise its discretion to decline the exercise of supplemental jurisdiction over any pendant state law claims asserted on behalf of state classes whose federal claims are barred by the filed - rate doctrine. See L. A. Draper & Son v. Wheelabrator - Frye, Inc ., 735 F. 2d 414, 429 (11th Cir. 1984) (recognizing comity considerations as one of four relevant factors to consider when exercising jurisdiction over pendant claims and stating that " [ i ] t is most improper for a federal court, without suitable law to guide it, to plow new ground in a state law field " (citation omitted)); see also Calderone Enters. Corp. v. United Artists Theatre Cir ., Inc ., 454 F. 2d 1292, 1297 (2d Cir. 1971) ("Since the federally - based claims were properly dismissed prior to trial, however, the pendent state claims must also be dismissed and the plaintiff relegated to the state courts for relief. " (citations omitted)) . 21 3 submit a detailed, multi - part " Rate Filing Justification " to HHS that includes numerous categories of data, such as claims and utilization history. Id. & 154. 215. HHS will adopt the state's determination regarding reasonableness if the state has an " Effective Rate Review Program, " but will otherwise scrutinize insurers ' rates itself. ld. g 210. HHS applies rigorous standards to determine if a state's rate review program is effective; the im 1 ne state program must meet numerous criteria under 45 C. F. R. & 154. 301. Certain states have the authority to prohibit unreasonable rate increases outright. Even where states lack this authority, the ACA empowers HHS to compel detailed justifications for proposed rate increases from insurers, and to require insurers that adopt unreasonable rate increases to publish HHS ' or the states ' final determination prominently on their website for three years. Id. & 154. 230. In short, the comprehensive federal regulatory overlay created by the ACA will ensure robust reasonableness review even in the states that currently lack a rate review program. Yet despite the implications of the ACA on Subscribers ' claims for relief, the Complaint ignores the ACA entirely. Premiums Paid by Named Subscriber Plaintiffs Are Filed Rates. 1. Alabama Subscriber Plaintiffs Paid Filed Rates. Alabama plaintiffs American Electric Motor Services, Inc. and CB Roofing, LLC allege they are BCBSAL policyholders. Sub. Compl. IT 16 - 17. In Alabama, the rates allegedly paid by both plaintiffs were filed with the Alabama Department of Insurance as required by law: A health care service corporation shall file with the Commissioner of Insurance any change in its rates, charges, fees, and dues, and, as soon as reasonably possible after the filing has been made the commissioner shall, in writing, approve or disapprove the same, provided that, unless disapproved within 30 days after filing, the changed rates, charges, fees, or dues shall be deemed to be approved. Ala. Code G 10A - 20 - 6. 10. Alabama law provides that: 22 3 The rates, charges, fees, and dues to be paid by the public for benefits under a health service plan and for contracts or certificates covering same shall not be unreasonably high or excessive, shall be adequate to meet the liability assumed under the contracts and all expenses in connection therewith, shall be adequate for the safeness and soundness of the corporation, and shall take into account past and prospective loss experience. Arkansas Subscriber Plaintiffs Paid Filed Rates. Arkansas subscriber plaintiffs Linda Mills and Frank Curtis allege they are individual policy holders with BCBSAR. Sub. Compl. I 18 - 19. As a matter of law, policies and premium rates for BCBSAR's individual policies must be filed with and approved by the Arkansas Insurance Commissioner: No basic insurance policy. . . shall be issued, delivered, or used as to a subject of insurance resident, located, or to be performed in this state unless the form has been filed with and approved by the Insurance Commissioner and, in the case of individual accident and health contracts, the rates have been filed with and approved by the commissioner. Ark. Code. Ann. & 23 - 79 - 109 (a) (1) (A); Ark. Ins. Dep ' t Bulletin No. 6A - 2011 at 1 (Sept. 1, 2011), available at http: / / www. insurance. arkansas. gov / Legal / Bulletins / 6A - 2011. pdf ("[ A ] 11 premium rates for individual accident and health insurance policies or contracts must be approved by the Commissioner prior to those rates being implemented ."); see also id. at No. 7 2011 (Sept. 1, 2011), available at http: / / www. insurance. arkansas. gov / Legal % 20Dataservices / Bulletins / 7 - 2011. pdf (asserting same rate - filing requirements for group health insurance policies) . 17 17 All Arkansas Insurance Department Bulletins cited herein are available at: http: / / www. insurance. arkansas. gov / Legal % 20Dataservices / PCBulletinYR. htm. 23 3 BCBSAR is required to submit proposed rate approval filings at least 30 days in advance of the rate's effective date, and if more time is needed to complete the review, the Insurance Commissioner is permitted to extend the review period for up to another 30 days. Ark. Code ner Ann. g 23 - 79 - 109 (b) (1) & (3) . The Commissioner may affirmatively approve or reject a proposed rate filing. Id. & 109 (b) (1) & (4) . 18 3. Florida Subscriber Plaintiff Paid Filed Rates. Florida subscriber plaintiff Jennifer Ray Davidson alleges she is an individual policy holder with BCBSFL. Sub. Compl. 121. Under Florida law, rate schedules for BCBSFL's individual policies, or the applicable premium rate if rate schedules are not used, must be filed for approval with the Florida Office of Insurance Regulation ("OIR "") prior to use: An insurer may not deliver, issue for delivery, or renew in this state any health insurance policy form until it has filed with the office a copy of every applicable rating manual, rating schedule, change in rating manual, and change in rating schedule; if rating manuals and rating schedules are not applicable, the insurer must file with the office applicable premium rates and any change in applicable premium rates. Fla. St. Ann. 8 627. 410 (6) (a); see also Fla. Admin. Code Ann. 690 - 191. 051 and 690 - 191. 054 (addressing filing requirements for HMOs) . The required filing must include an actuarial memorandum justifying the proposed rates, as well as " [ r ] ate pages that define all proposed rates, rating factors, and methodologies for determining rates applicable in the state. " Fla. Admin. 18 Prior to September 2011, rate approval filings were required to include a " statement as to how the proposed rate applies to anticipated experience " for newly issued policies or, for rate increases for existing policies, a " statement of the history of the rates, " " a description of the percentage rate increase, " and " a description of the latest three calendar years [ ' ] experience, " among other things. Ark. Ins. Dep ' t Bulletin No. 4 - 79 at 1 - 2. Since September 2011 onwards, rate approval filings are required instead to include " a rate summary worksheet, " whereby a detailed spreadsheet discloses BCBSAR's actuarial computations underlying the proposed rate, as well as " a written description justifying the rate increase. " Ark. Ins. Dep ' t Bulletin No. 6A - 2011 at 1 and Ex. 1. Additionally, rate approval filings must disclose the " Medical Loss Ratio as calculated under federal guidelines, " whereby the BCBSAR's operational margin is limited to a set percentage. Id. 24 3 Code Ann. 690 - 149. 003 (2) (b) (3) - (4) . " OIR must disapprove a proposed rate if the policy provides benefits that are unreasonable in relation to those premiums. Fla. St. Ann. 8 627. 411 (1) (1) (1) . 4. Hawaii Subscriber Plaintiffs Paid Filed Rates. Hawaii plaintiffs Lawrence W. Cohn, AAL, ALC and Saccoccio & Lopez allege they purchased small group insurance plans to cover their employees during the class period. Sub. Compl. II 22 - 23. Under Hawaii law, BCBSHI's health insurance premium rates, including small group rates, must be filed with and approved by the state commissioner of insurance prior to use: Every managed care plan shall file with the commissioner every rate, charge, classification, schedule, practice, or rule and every modification of any of the foregoing that it proposes to use. Haw. Rev. Stat. 8 431: 14G - 105 (a) . 20 Hawaii law mandates that " [ r ] ates shall not be excessive, inadequate, or unfairly discriminatory and shall be reasonable in relation to the costs of the benefits provided, " (id. 8 103 (a)) and requires that rate filings include sufficient background information to enable the commissioner to adequately evaluate proposed rates based on these criteria. Id. 105. 21 The commissioner has the express authority to disapprove rates that do not comply with these requirements. Id. & 107. 19 In addition, any time these previously - approved premium rates change, new rates must be filed and approved prior to their use: " any subsequent addition to or change in rates. . . shall also be filed, " Fla. Admin. Code Ann. 690 149. 002 (1) (a) (2), and " [ a ] ll prospective rate changes or methodologies for rate changes must be approved before implementation. . . " ld. at 690 - 149. 002 (1) (c) (3) . 20 See, e. g ., May 1, 2013 Insurance Commissioner Press Release, " Insurance Commissioner Reduces HMSA's Rate Hike Request, " available at: http: / / hawaii. gov / dcca / ins / news releases / News % 20Release % 20HMSA % 202013 % 20CRG % 20Rate. pdf (last visited Sept. 27, 2013) . 21 Whenever there are revisions to a policy that alter coverage, plans must notify the commissioner of insurance of the change and may be required to submit a supplemental rate filing based on the commissioner's review of those changes. Haw. Rev. Stat. & 431: 14G - 106. 25 3 5. Mississippi Subscriber Plaintiffs Paid Filed Rates. Harry M. McCumber alleges he is an individual policy holder with BCBSMS. Sub. Compl. 130. Gaston CPA Firm alleges it is a small group policy holder. Id. 131. Pursuant to its statutory rulemaking authority, 22 the Mississippi Insurance Department ("MID "") has promulgated detailed regulations regarding " the process of filing and implementing health insurance rates and modifications of existing rates and what data and documentation must be submitted when issuing a rate increase " for " individual and small group accident and health insurance policies. " MID Bulletin 2011 - 7 ("Submission Requirements for Health Insurance Rate Increases"), available at 2011 WL 2639318 (2011); see MID Regulation LA & H 73 - 4 ("Accident and Sickness Insurance Policies, Rates and Other Endorsement Filings") (codified at Miss. Admin. Code 19 - 3; 4. 01) (2002); MID Regulation 2008 - 2 ("Filing Option to Expedite Form and Rate Review for All Life, Credit Life, Annuity, and Accident and Health Contracts") (codified at Miss. Admin. Code 19 - 1: 38. 01 – . 09) (2008) . Mississippi law also requires that " all premiums for all plans of insurance, group or individual, [ must ] be filed for purposes of review and approval or disapproval prior to use. " MID Bulletin 2011 - 7, 2011 WL 2639318, at * 1. " MID may disapprove a new rate or rate modification request if based on criteria established by state and / or federal law, it determines that said rate or rate modification is excessive, unjustified or unfairly discriminatory. " Id. at * 2. 23 22 Included in MID's authority is the power to " make such reasonable rules and regulations concerning the procedure for the filing or submission of [ such ] policies. . . as are necessary, proper or advisable to the administration of said sections, " including procedures for " reviewing and approving accident and health form and rate filings. " Miss. Code Ann, SS 83 - 9 - 3 (6), 83 - 9 - 5 (7); Miss. Code. Ann. & 83 - 63 - 7 (1) (h) ("The ſinsurance ] commissioner may establish regulations to implement the provisions of this section and to assure that [ premium ] rating practices used by small employer carriers are consistent with the purposes of this chapter .") . 23 See also Miss. Ins. Dep ' t Health Ins. Rate Review (describing steps in process), available at http: / / www. mid. ms. gov / midratereviewphase2 / RateProcess. aspx (last visited Sept. 27, 2013) . 26 3 6. New Hampshire Subscriber Plaintiffs Paid Filed Rates. Erik Barstow alleges he is an individual policy holder with BCBSNH. Sub. Compl. [ 33. GC / AAA Fences, Inc. alleges it is a small group policy holder. Id. (34. Under New Hampshire law, premium rates for BCBSNH's health insurance policies, including both individual and small group policies, must be filed with and approved by the state commissioner of insurance prior to use: No policy of insurance against loss or expense from. . . sickness. . . shall be issued or delivered to any person in this state. . . until. . . the classification of risks and the premium rates. . . have been filed with the insurance commissioner nor until the expiration of 30 days thereafter unless the commissioner shall sooner give his written approval thereof. N. H. Rev. Stat. Ann. & 415: 1. Individual and small group policies in particular are subject to increased scrutiny by the commissioner. For example, rate filings for these business segments must include extensive actuarial and other related information to obtain the commissioner's approval of rates. See, e. g ., N. H. Code Admin. R. Ins. 4102. 07 (individual); 4103. 07 (small group) . 24 7. North Carolina Subscriber Plaintiffs Paid Filed Rates. North Carolina plaintiffs Keith 0. Cerven and Teresa M. Cerven allege they are individual policy holders. Sub. Compl. 35 - 36. SHGI Corp. alleges it is a small group policy holder. Id. [ 37. As a medical service corporation subject to a unique set of requirements, BCBSNC must file the premium rates for all group and individual health insurance policies it 24 Carriers in these segments also must submit annual supplemental rate filings to justify rates, even if no changes are planned, so the commissioner can verify that the previously approved rates remain reasonable in relation to the benefits provided. See N. H. Code Admin. R. Ins. 4102. 07 (1) ("Carriers shall submit a complete filing, at least annually, that includes all of the documentation required for rate revisions even if no changes in rates are being proposed. The purpose of the rate filing shall be to demonstrate that the continued use of the previously approved rates is appropriate .") (individual); 4103. 07 (1) (small group) . 27 3 issues with the commissioner of insurance, and may not issue these policies to subscribers until the state's department of insurance ("DOI") has approved the premium rates. N. C. Gen. Stat. & 58 - 65 - 40. To obtain DOI approval of premium rates, BCBSNC must submit extensive actuarial information (including information on BCBSNC's costs) that allows DOI to calculate rates it determines to be reasonable. See N. C. Gen. Stat. 8 58 - 65 - 40; 11 N. C. A. C. 12. 0329 (setting forth the detailed information that must be filed along with proposed rates to obtain DOI approval) . 25 8. Pennsylvania Subscriber Plaintiffs Paid Filed Rates. Pennsylvania plaintiff Kathleen Scheller alleges she is a Highmark BCBS individual policy holder. Sub. Compl. 1 38. Iron Gate Technology, Inc. alleges it is a Highmark BCBS small group policy holder. Id. | 39. Pennsylvania law historically required all insurers to file their rates for individual policies with the Pennsylvania Insurance Department ("PID") for approval, 26 and all non - profit Blue Plans, including Highmark BCBS, were also required to file group rates for approval. 27 40 Pa. Stat. 88 3803 (C) - (e), 6101, 6302 (2010) . 28 New laws became effective in 2012 that require all insurers to file their rates for both individual and small - group policies with the PID for approval. 40 Pa. Stat. S 3801. 303 (C) - (e) . The filings " shall be reviewed as appropriate and necessary to carry out the provisions of this act. " 40 Pa. Stat. 8 3804 (a) (2010) . And PID has the express authority to disapprove rates that are " excessive, 25 For small group policies, DOI approves rate schedules, and the methodologies for deriving subscriber rates from those schedules. See, e. g ., N. C. Gen. Stat. 8 58 - 50 - 130 (b) . Publicly available rate filings confirm that the actual rating formulas – which " show precisely how a premium rate is created for a particular group " and which receive trade secret protection – are what DOI approves. See Blue Options Small Group 4Q2011 Filing at 16, http: / / pserff. ncdoi. net / filing. html; jsessionid = F97530E52E52315AAE4432FF561640A6 ? serffFiling = BSNC 127166296 (last visited Sept. 27, 2013) . 26 For individual rates, the actual rates are approved. 40 Pa. Stat. S 3803 (c) . 27 For group rates, base rating formulas, including factors, were approved, and rates falling within a certain percentage of the approved rating formula were authorized. 40 Pa. Stat. S 3803 (e) (1), (4), (5) . 28 Rate filings are all publicly available at http: / / www. insurance. state. pa. us / dsf / rf _ filings. html. 28 3 inadequate or unfairly discriminatory, " including rates that have already taken effect. 40 Pa. Stat. 86 3804, 3808 (2010) . A Pennsylvania federal court recently dismissed antitrust damages claims brought against Highmark because those claims were barred by the filed rate doctrine. See Royal Mile Co. v. UPMC and Highmark, Inc ., No. 2: 10 - cv - 01609, slip op. at 44 - 45, 50 (W. D. Pa. Sept. 27, 2013), attached as Ex. A hereto. The court held that the filed - rate doctrine applied to all rates that Highmark filed with the PID. Id. at 31 ("To determine what Highmark's rates would have been absent the conspiracy requires a fact - finder hypothetically to consider what rates the PID would have approved for Highmark as reasonable and nondiscriminatory .") . 29 And it held that Highmark's small - group rates were subject to the filed - rate doctrine, because when the PID " approves the base rate for a group it approves a range of rates the insurer is permitted to charge that group. " Id. at 36; see also id. at 37 - 44 (discussing with approval Korte and Simon) . As in Royal Mile, this court should " defer to the institutional competence of the PID, which determined the rates charged by Highmark were not excessive, inadequate or unfairly discriminatory, and cannot engage in the ratemaking process to determine what rates Highmark should have charged " to plaintiffs. Id. at 44. 9. Rhode Island Subscriber Plaintiff Paid Filed Rates. Nancy Thomas alleges she is an individual policy subscriber. Sub. Compl. 1 40. As a non - profit service corporation under Rhode Island law, BCBSRI must file its premium rates for all individual health insurance policies with state regulators, who must approve them prior to use. 29 As in this case, plaintiffs in Royal Mile alleged that " they would have paid less for Highmark insurance but for the [ relevant ] conspiracy. " No. 2: 10 - cv - 01609, slip op. at 50. That measure of damages is " barred by the filed rate doctrine. " Id. 29 3 Indeed, rates for individual policy holders must be filed with both the office of the health insurance commissioner and the state attorney general, and the rate filings must be accompanied by an actuarial certification stating that (i) the rates comply with state law; and (ii) the benefits provided are reasonable in relation to the premiums charged. See R. I. Gen. Laws 88 27 - 19 6 (a), (b); 27 - 19 - 7. 2; 27 - 20 - 6 (a), (b); 27 - 20 - 6. 2. Rate approval is then contingent upon BCBSRI establishing at a public hearing " that the rates proposed to be charged or the rating formula to be used are consistent with the proper conduct of its business and with the interest of the public. " Id. & 27 - 19 - 6 (c); 27 - 20 - 6 (c) . 10. South Carolina Subscriber Plaintiff Paid Filed Rates. Shred 360, LLC alleges it " purchased individual BCBS - SC health insurance to cover some of its employees, and has paid fifty percent of these monthly premiums. " Sub. Compl. 141. Under South Carolina law, premium rates for individual policies are filed and approved before use: " [ n ] o premium rates applicable to accident policies, health policies, or combined accident and health policies or certificates for individual or family protection may be used unless they have been filed with the department and approved by the director or his designee. " S. C. Code Ann. 8 38 - 71 - 310 (B) . Premium rates may be disapproved if the department determines that " the benefits provided in the policies or certificates are unreasonable in relation to the premiums charged. " Id. 11. Tennessee Subscriber Plaintiffs Paid Filed Rates. Danny J. Curlin alleges he is an individual policy holder with BCBSTN. Sub. Compl. 142. Amedius, LLC alleges it is a small group policy holder. Id. | 43. BCBSTN's premium rates for both individual and small group policy holders must be submitted to and approved by 30 3 the Tennessee Department of Commerce and Insurance ("TDCI") before its policies can be issued to subscribers: No policy of accident and sickness insurance for individual or small employer coverage shall be delivered or issued for delivery in this state, nor shall any endorsement, rider, certificate or application nor any initial or new premium rates on any previously approved policy, endorsement, rider, certificate or application that becomes a part of any such policy be used in connection with the policy until a copy of the form, of the premium rates, and of the classifications of risk pertaining to the policy has been filed with and approved by the commissioner. Approval of such forms, rates, and classifications may be granted in whole or in part at the discretion of the commissioner. Tenn. Code Ann. & 56 - 26 - 102 (a) (1) . 30 And while the approval of rates ultimately rests in the discretion of the commissioner, the commissioner may only approve those rates if the benefits in the policy are reasonable in relation to the premium charged. Tenn. Code Ann. & 56 - 26 102 (a) (2) . In sum, the named plaintiffs from Alabama, Arkansas, Florida, Hawaii, Mississippi, New Hampshire, North Carolina, Pennsylvania, Rhode Island, South Carolina and Tennessee are barred by the filed - rate doctrine from asserting claims in this action, and should be dismissed from the case along with each of the claims they purport to assert against Defendants on behalf of putative state classes. N. J. Title Ins. Litig ., 683 F. 3d at 462 (affirming 12 (b) (6) dismissal under filed - rate doctrine) . 3° Before July 2011, when recent amendments (passed in response to the ACA) took effect, the law was substantially the same: policy forms and premium rates had to be filed with TDCI and no individual or small group policy could be delivered or issued in Tennessee " unless the commissioner finds that the benefits provided in the policy are reasonable in relation to the premium charged, based upon such reasonable regulations as the commissioner may promulgate. . . " Tenn. Code Ann. & 56 - 26 - 102 (a) (2010) . 3 D. Premiums Paid by Absent Class Members to Many Defendants Are Filed Rates. For the same reasons that the claims of the named plaintiffs fail, absent class members paying premiums subject to the rate filing requirements described above in Sections II. C (1) - (11) have no cognizable injury, and the putative statewide classes asserted against the Defendants identified above fail as a matter of law. Similarly, subscribers paying individual or small group premiums to Defendants in any other state where rates are filed cannot, as a matter of law, be included in any putative damages class. Sub. Compl. 1 277. For example and without limitation, a putative national class includes subscribers paying " filed rates " in Arizona ", Colorado, 32 Connecticut, 33 Georgia, 34 Idaho, " Iowa, " Indiana, " Kansas, 3 * Kentucky, 39 Maine, 10 Massachusetts, " Maryland, * 2 Minnesota, 43 Nebraska, 4 Nevada, * * New York, 46 North Dakota, " 31 See, e. g ., Ariz. Rev. Stat. 88 20 - 826 (L), 1057 and 2311; see generally A. A. C. & R - 20 - 6 - 607. 32 See, e. g ., Colo. Rev. Stat. 10 - 16 - 107; 3 Colo. Code Regs. 702 - 4: 4 - 2 - 11. 33 See, e. g ., Conn. Gen. Stat. S 38a - 481. 34 See, e. g ., Ga. Code Ann. S 33 - 21 - 13 (e); Ga. Comp. R. & Regs. 88 120 - 2 - 33 - . 08, 120 - 2 - 44 - . 06 (2) . 35 See, e. g ., IDAPA 18. 01. 69 - 036. 01 (eff. 1 - 25 - 95); 18. 01. 72 - 036. 01 (eff. 7 - 1 - 98); Idaho Code Ann. & 41 - 4706; IDAPA 18. 01. 69 - 036. 02 - 03 (eff. 1 - 25 - 95); 18. 01. 72 - 036. 02 - 03 (eff. 7 - 1 - 98); IDAPA 18. 01. 69 - 036. 02 (eff. 1 - 25 95); 18. 01. 72 - 036. 02 (eff. 7 - 1 - 98) . 36 See, e. g ., Iowa Code Ann. & 514A. 13. See, e. g ., Ind. Code Ann. 88 IC 27 - 8 - 5 - 1, 1. 5. 38 See, e. g ., K. S. A. SS 40 - 2215 (a) - (6), (d) (1) & (f) (2) . 39 See, e. g ., Ky. Rev. Stat. Ann. 88 304. 17 - 380, 383. ° See, e. g ., Me. Rev. Stat. Ann. tit. 24A, 88 2736 (1), 2808 - B (2 - A) & (2 - B) . 41 See, e. g ., Mass. Gen. Laws ch. 176J (6) (c); 211 CMR 66. 09 (5) (a) . See, e. g ., Md. Code Ann ., Ins. 88 11 - 206, 11 - 205. See, e. g ., Minn. Stat. & 62A. 65 subd. 3 (h); id. 8 62L. 08 subd. 8. 44 See, e. g ., Neb. Rev. Stat. 844 - 710 (1) . 45 See, e. g ., Nev. Rev. Stat. 88 686B. 070, 110. 46 See, e. g ., N. Y. Ins. Law SS 3201 (b) (1), (c) (3), 3231 (d) (1), 4235 (h), 4308 (a) - (C) . 32 3 Ohio, 48 Oregon, 19 South Dakota, " Utah, " Vermont, " Virginia, 3 Washington, 4 and Wisconsin, 55 among other states. III. SUBSCRIBERS FAIL TO STATE CLAIMS FOR UNJUST ENRICHMENT. The Subscribers ' unjust enrichment claims should be dismissed for three main reasons. First, as a quasi - contractual claim, unjust enrichment cannot apply because Subscribers have alleged a contractual relationship between the parties (insurance policies) covering the subject matter of their claims (insurance premiums) . Second, Subscribers cannot claim that Defendants obtained any benefit from the Subscribers that the Defendants are unjustly retaining when Subscribers received the benefit of their bargain – namely, health insurance. Third, Subscribers unjust enrichment claims are duplicative of their statutory claims for antitrust violations. 57 See, e. g ., N. D. Cent. Code 88 26. 1 - 30 - 19, 20. * See, e. g ., Ohio Rev. Code Ann. 88 3923. 02, 021 (B), 3924. 06 (C), 1751. 12 (A) (1) . 49 See, e. g ., Or. Rev. Stat. S 743. 018. 50 See, e. g ., S. D. Codified Laws 88 58 - 17 - 4. 1, 58 - 18B - 3. 1. 1 See, e. g ., Utah Admin. Code r. 590 - 167, 220. 2 See, e. g ., 8 V. S. A. & 4062 (a) (1) & (a) (3) . 53 See, e. g ., Va. Code Ann. 8 38. 2 - 316. S4 See, e. g ., Wash. Rev. Code Ann. 88 48. 19. 040, 48. 18. 110. 55 See, e. g ., Wis. Stat. 88 625. 13, 625. 21. 56 Sub. Compl. Counts 9 (Arkansas), 17 (California), 30 (Hawaii), 37 (Illinois), 49 (Michigan), 54 (Mississippi), 61 (Missouri), 68 (New Hampshire), 75 (North Carolina), 88 (Rhode Island), 93 (South Carolina), 98 (Tennessee), and 105 (Texas) . 57 In addition, as addressed in Section II, supra, the filed - rate doctrine prevents subscriber plaintiffs paying filed rates from bringing any claims, including their unjust enrichment claims, based on the payment of allegedly inflated premiums. 3 Subscribers ' Unjust Enrichment Claims Are Barred By the Existence of Express Insurance Contracts. All but one of the named subscriber plaintiffs * allege that they purchased a health insurance policy from a Defendant and thus have " contracts or agreements with the Individual Blue Plans. " Sub. Compl. 1 45; see also id. (1 16 - 44. Their health insurance policies set forth and govern the amount of the premiums they pay, which is the same subject matter of their unjust enrichment counts for premium " overpayments. " Id. (1 610, 664, 756, 804, 898, 937, 986, 1034, 1087, 1181, 1215, 1254, 1303. " Unjust enrichment is a quasi - contractual theory or is a contract implied - in - law in which a court may impose a contractual obligation where one does not exist. " Whitehaven Cmty. Baptist Church v. Holloway, 973 S. W. 2d 592, 596 (Tenn. 1998) (citation omitted) . Quasi contractual claims, like the unjust enrichment claims Subscribers allege here, fail where an enforceable contract exists between the parties covering the subject matter of their claims. See, e. g ., Axenics, Inc. v. Turner Constr. Co ., 62 A. 3d 754, 764 (N. H. 2013) ("One general limitation is that unjust enrichment may not supplant the terms of an agreement. It is a well - established principle that the court cannot allow recovery under a theory of unjust enrichment when there is a valid, express contract covering the subject matter at hand .") (citations omitted) . 59 58 The lone exception is Shred 360, LLC, which merely alleges that it pays a portion of the premium rates for the individual policies held by some of its employees. See Sub. Compl. [ 41. 59 See also Deutsche Bank Nat. Trust Co. v. Austin, 385 S. W. 3d 381, 387 - 88 (Ark. App. Ct. 2011) (defendant cannot be unjustly enriched by valid contract); Klein v. ChevronU.S. A ., Inc ., 137 Cal. Rptr. 3d 293, 331 - 32 (Cal. Ct. App. 2012), as modified on denial of reh ' g, (Feb. 24, 2012), and review denied (May 9, 2012) (upholding dismissal of unjust enrichment claim because of alleged enforceable contract); Caraang v. PNC Mortg ., 795 F. Supp. 2d 1098, 1118 (D. Haw. 2011) (dismissing claim with prejudice where plaintiffs alleged " express contracts that preclude an unjust enrichment claim ?"); CNA Int ' l, Inc. v. Baer, 981 N. E. 2d 441, 452 (Ill. App. Ct. 2012) (affirming dismissal of unjust enrichment claim for failure to state a claim that " incorporated the same allegations. . . which alleged the existence of the assignment"); City of Pontiac v. Blue Cross Blue Shield of Mich ., No. 11 – 10276, 2012 WL 1079895, at * 9 (E. D. Mich. Mar. 30, 2012) ("The City of Pontiac fails to allege an unjust enrichment claim against 34 3 The Subscriber Complaint contains no allegations that the Subscribers ' health insurance policies with Defendants are somehow unenforceable or void, as might permit the Court to sidestep the express contracts and imply an obligation in equity. Given the existence of valid contracts covering the Subscribers ' payment of premiums to the Defendants, their unjust enrichment claims for payment of allegedly inflated premiums should be dismissed. B. Subscribers Admit They received the Benefit of Their Bargain with Defendants. The basic elements of unjust enrichment are the same in every state: unjust enrichment is an equitable theory permitting recovery in the absence of an express contract where the defendant has obtained and enjoyed a benefit from the plaintiff, and allowing the defendant to retain that benefit without compensation to the plaintiff would be unjust or inequitable. See, e. g ., Augustson, 864 F. Supp. 2d at 438; see also Restatement Third of Restitution and Unjust Enrichment g 1, comment b, and $ 62. But here, Subscribers do not claim that they conferred a benefit on Defendants in the absence of a contract, under circumstances where it would be unjust to permit Defendants to retain that benefit without compensating the Subscribers. Instead, the Subscribers complain that they paid Defendants purportedly inflated premium rates, even though Blue Cross since it admits that it had a contract with Blue Cross for third - party claims administration ."); Willis v. Rehab Solutions, PLLC, 82 So. 3d 583, 588 (Miss. 2012) (unjust enrichment " applies only where no legal contract exists " (citations omitted)); Farmers New World Life Ins. Co. v. Jolley, 747 S. W. 2d 704, 708 (Mo. Ct. App. 1988) (no unjust enrichment claim where plaintiff's rights governed by contract); Augustson v. Bank of Am ., N. A ., 864 F. Supp. 2d 422, 438 (E. D. N. C. 2012) (no unjust enrichment claim against bank for alleged payment of inflated interest rates because " each plaintiff had an express contract with Bank of America. " (citations omitted)); Mehan v. Gershkoff, 230 A. 2d 867, 870 (R. I. 1967) ("[ i ] t is well settled that where there is an express contract between the parties referring to a subject matter, there can be no implied contract arising by implication of law governing that same subject matter " (citations omitted)); Boldt Co. v. Thomason Elec. & Am. Contractors Indem. Co ., 820 F. Supp. 2d 703, 707 (D. S. C. 2007) (unjust enrichment claim failed because a valid, enforceable contract existed between the parties); Jaffe v. Bolton, 817 S. W. 2d 19, 26 (Tenn. Ct. App. 1991) ("quasi - contractual principle of unjust enrichment does not apply to an agreement deliberately entered into by the parties "") (citation and internal quotations omitted); Fortune Prod. Co. v. Conoco, Inc ., 52 S. W. 3d 671, 684 (Tex. 2000) ("there can be no recovery for unjust enrichment if the same subject is covered by [ the ] express contract") (citation and internal quotations omitted) . 35 3 they expressly agreed to pay those premiums in exchange for health insurance under their valid and enforceable health insurance policies. As a threshold matter, and as addressed herein and in the Antitrust Conspiracy Claims Brief, Subscribers have not alleged any plausible antitrust claims, and thus cannot assert that the Defendants benefitted from any " unlawful acts " by receipt of " overpayments " for health insurance. 00 Furthermore, as set forth above in Section II, the premium rates charged by many of the Defendants were filed with and approved by state regulators, and thus cannot be challenged as a matter of law. More fundamentally, it is well settled that no inequity results where both parties receive the expected benefit of their bargain. " Here, in return for agreed premium payments, Defendants 60 See, e. g ., Berryman v. Merit Prop. Mgmt ., Inc ., 62 Cal. Rptr. 3d 177, 188 (Cal. Ct. App. 2007) (dismissing unjust enrichment claim based on the same conduct underlying unfair competition claims, where unfair competition claims fail to state a cause of action); Klohs v. Wells Fargo Bank, N. A ., 901 F. Supp. 2d 1253, 1264 (D. Haw. 2012) (plaintiffs fail to state a claim for unjust enrichment where underlying theory of wrongdoing was dismissed for failure to state a claim); DePriest v. AstraZeneca Pharm ., L. P ., 351 S. W. 3d 168, 170 (Ark. 2009) (affirming dismissal of unjust enrichment claim " for the same reasons underlying dismissal of the ADTPA and fraud claims " because plaintiffs failed to state a claim for misrepresentations in advertisement); Grant v. Trinity Health - Mich ., 390 F. Supp. 2d 643 (E. D. Mich. 2005) (dismissing with prejudice unjust enrichment claim premised on failed tax arguments); Cole v. Chevron USA, Inc ., 554 F. Supp. 2d 655, 673 (S. D. Miss. 2007) (dismissing unjust enrichment claim which " fails to allege a legally cognizable predicate claim by which the defendants were unjustly enriched"); Omnicare, Inc. v. UnitedHealth Grp ., Inc ., 594 F. Supp. 2d 945, 981 (N. D. Ill. 2009) ("Omnicare has failed to demonstrate the existence of a genuine issue of material fact regarding any of the factual predicates which would allow recovery under a theory of unjust enrichment " because " none of the [ ] alleged misdeeds took place " including " no illegal conspiracy between UnitedHealth and PacifiCare ."); Philbrick v. eNom, Inc ., 593 F. Supp. 2d 352, 375 (D. N. H. 2009) (plaintiff cannot recover for unjust enrichment where underlying trademark claims fail); Hill Holliday Connors Cosmopulos, Inc. v. Greenfield, 433 Fed. Appx. 207, 218 (4th Cir. 2011) (South Carolina unjust enrichment claim failed where underlying trade secret claim failed); PHG Tech ., LLC v. St. John Cos ., Inc ., 459 F. Supp. 2d 640, 646 - 47 (M. D. Tenn. 2006) (dismissing unjust enrichment claims with prejudice where defendant did not engage in " wrongful conduct as a matter of law"); Cathey Assoc ., Inc. v. Beougher, 95 F. Supp. 2d 643, 656 (N. D. Tex. 2000) (dismissing unjust enrichment claim where underlying trademark infringement claim failed) . 61 See, e. g ., Peterson v. Cellco P ' ship, 80 Cal. Rptr. 3d 316, 323 (Cal. Ct. App. 2008) (unjust enrichment claim properly dismissed where defendant did not retain benefits unjustly because " plaintiffs received the benefit of the bargain"); Am. Standard Ins. Co. of Wisc. v. Bracht, 103 S. W. 3d 281, 292 - 93 (Mo. Ct. App. 2003) (holding that insurer is not unjustly enriched by application of certain policy provisions because " [ t ] here can be no unjust enrichment if the parties receive what they intended to obtain " (citations omitted)); Pitts v. Jackson Nat ' l Life Ins. Co ., 574 S. E. 2d 502, 512 (S. C. App. 2002) (denying unjust enrichment claim premised upon purchase of unnecessarily expensive insurance policy because " Pitts paid for his policy as part of a commercial transaction ."); 36 3 provided bargained - for services including health insurance coverage, claims processing, and claims payments. The Subscriber Complaint does not assert that Defendants failed to uphold the bargain by failing to provide the promised services. Instead, Subscribers claim that they should have had the opportunity to make a different bargain with lower premiums. But unjust enrichment " does not operate to alter the terms of an enforceable contract. " Rongotes v. Pridemore, 363 S. E. 2d 221, 224 (N. C. App. 1988); see also, e. g ., Axenics, Inc ., 62 A. 3d at 764 ("One general limitation is that unjust enrichment may not supplant the terms of an agreement. " (citation omitted)); Burlington N. R. R. Co. v. Sw. Elec. Power Co ., 925 S. W. 2d 92, 97 (Tex. App. Ct. 1996), aff ' d, 966 S. W. 2d 467 (Tex. 1998) ("The [ unjust enrichment ] doctrine does not operate to rescue a party from the consequences of a bad bargain. " (citations omitted)) . Thus, as a matter Augustson, 864 F. Supp. 2d at 438 - 39 (plaintiffs ' claims for unjust enrichment fail because plaintiffs cannot " explain why it is ' unjust ' for each contracting party to receive the benefit of the bargain in the contract ."); Fondedile, S. A. v. C. E. Maguire, Inc ., 610 A. 2d 87, 97 (R. I. 1992) (unjust enrichment claim failed where defendant " fulfilled its contractual obligation by paying the agreed compensation, and consequently did not appreciate a benefit for which it had not bargained"); Kovilic v. City of Chicago, 813 N. E. 2d 1046, 1054 (Ill. App. Ct. 2004) (upholding dismissal of unjust enrichment claim where plaintiffs " remained contractually bound to the written agreement that they brokered for themselves"); Cloverdale Equip. Co. v. Simon Aerials, Inc ., 869 F. 2d 934, 939 (6th Cir. 1989) (upholding grant of summary judgment to defendant on Michigan unjust enrichment claim because plaintiff " received the equipment for which it bargained"); Beaudreau v. Larry Hill Pontiacl Oldsmobile / GMC, Inc ., 160 S. W. 3d 874, 882 (Tenn. Ct. App. 2004) (upholding dismissal of unjust enrichment claims because it was not inequitable for dealer to retain commission in exchange for assisting consumer in obtaining financing); Beane v. Beane, 856 F. Supp. 2d 280, 301 (D. N. H. 2012) (noting that unjust enrichment claim fails where plaintiff received the benefit of his bargain); Guaranty Nat. Ins. Co. v. Denver Roller, Inc ., 854 S. W. 2d 312, 317 (Ark. 1993) (upholding dismissal of plaintiffs unjust enrichment claim in declaratory judgment action where plaintiffs sought to repudiate their bargain; the " only reason presented as to why appellees continue to retain the accrued benefits is because the appellants would not accept such benefits ."); Rogers v. CIT Grp. / Equip. Fin ., Inc. (In re B. C. Rogers Poultry, Inc .), 455 B. R. 524, 571 (Bankr. S. D. Miss, 2011) (unjust enrichment claim failed because defendant's retention of funds was not unjust but rather " justified because it was consistent with the terms of the CIT Lease"); Artemis Seafood, Inc. v. Butcher's Choice, Inc ., No. CIV. A. 3: 98 - CV - 0282, 1999 WL 608853, at * 3 (N. D. Tex. Aug. 11, 1999) (summary judgment on unjust enrichment counterclaim where party " knew they were being charged, and they continued to place orders, receive goods, and use the trucks .") . 37 3 of law, no benefit has been unjustly conferred from Subscribers to Defendants, and Subscribers unjust enrichment claims may not proceed. 2 C. Subscribers ' Unjust Enrichment Claims Are Duplicative of Their Antitrust Claims. Subscribers ' unjust enrichment claims also fail because they are duplicative of their statutory antitrust claims. Improperly incorporating all prior allegations into their unjust enrichment counts, Subscribers contend in boilerplate fashion that Defendants " have benefitted from their unlawful acts through [ the ] overpayments for health insurance premiums " they supposedly have received. See Sub. Compl. (610; see also id. I 664, 756, 804, 898, 937, 986, 1034, 1087, 1181, 1215, 1254, 1303. Subscribers allege no facts or circumstances supporting their unjust enrichment claims that do not simply repeat their antitrust claims. " [ P ] laintiffs can not [ sic ] assert unjust enrichment claims that are merely duplicative of statutory or tort claims. " In re Apple & AT & T iPad Unlimited Data Plan Litig ., 802 F. Supp. 2d 1070, 1077 (N. D. Cal. 2011) (citations omitted) (dismissing unjust enrichment claims with prejudice) . 63 62 Plaintiff Garner's unjust enrichment claim against BCBS - KC on behalf of the Missouri statewide class cannot proceed for the additional reason that Garner is not a subscriber of BCBS - KC and thus has not paid any premium, unjustly or otherwise, to BCBS - KC. A plaintiff cannot state an unjust enrichment claim unless the defendant has been unjustly enriched " at the expense of the plaintiff. " See Homecomings Fin. Network, Inc. v. Brown, 343 S. W. 3d 681, 685 (Mo. Ct. App. 2011) (enrichment " at the expense of the plaintiff " is a necessary element of a claim for unjust enrichment) . Garner admits that he is a subscriber of BCBS - MO, and has never been a subscriber of BCBS KC. See Sub. Compl. [ 32. Because plaintiff Garner has never paid any premiums or given any benefit to BCBS KC, BCBS - KC cannot have been unjustly enriched at plaintiff Garner's expense. 63 See also, e. g ., Garrett v. Cassity, No. 4: 09CV01252, 2011 WL 1103637, at * 5 (E. D. Mo. Mar. 23, 2011) (dismissing unjust enrichment claim " because based on the facts alleged these claims are indistinct from Plaintiffs ? claims for breach of fiduciary duty and negligence ?"); Wilcox Indus. Corp. v. Hansen, 870 F. Supp. 2d 296, 308 & n. 3 (D. N. H. 2012) ("even if the [ unjust enrichment ] claim is not preempted, I would grant the motion to dismiss because the claim merely restates Wilcox's breach of contract claim " (citation omitted)); Pan - Am. Prod. & Holdings, LLC v. R. T. G. Furniture Corp ., 825 F. Supp. 2d 664, 695 (M. D. N. C. 2011) (granting motion to dismiss unjust enrichment claim because " there is no qualitative difference between its unjust enrichment claim and a copyright infringement claim " but rather it is " a copyright claim in state law clothing " (citation omitted)); Ruffin Steinback v. dePasse, 267 F. 3d 457, 463 (6th Cir. 2001) (affirming dismissal of Michigan unjust enrichment claim where " [ a ] review of the complaints in this case indicates that the allegations under the right of publicity claims and the unjust enrichment claims are duplicative ."); Moore v. Weinstein Co ., LLC, No. 3: 09 - CV - 00166, 2012 WL 38 3 IV. SUBSCRIBERS FAIL TO STATE CLAIMS FOR UNFAIR COMPETITION. Subscribers likewise fail to state claims under the unfair competition statutes of California, Hawaii, and North Carolina. As a threshold matter, Subscribers have not alleged that the Defendants engaged in any unlawful anticompetitive conduct. See Antitrust Conspiracy Claims Brief. For that reason, and the additional reasons set forth below, the Court should dismiss these ancillary state law claims. A. Subscribers Fail to State a Claim Under the California UCL. In Count 16 of their Complaint, Subscribers fail to state a claim under California's Unfair Competition Law ("UCL"), Cal Bus. & Prof. Code & 17200, et seq ., because they do not plead facts establishing any unlawful or unfair business conduct. The California UCL prohibits any " unlawful, unfair or fraudulent business act or practice. " Cal Bus. & Prof. Code G 17200. Here, the Subscribers claim, through improper shotgun pleading, that the same conduct they point to in support of their antitrust claims also supports their California UCL claim. Specifically, the Subscriber Complaint alleges that the License Agreements, Membership Standards, and Guidelines constitute " unlawful and unfair business practice and conduct ? " by " divid [ ing ] and allocat [ ing ] the geographic markets " via Service Areas. Sub. Compl. 1 658. When a plaintiff alleges an " unlawful " practice, the complaint must allege facts establishing the underlying violation of the law. Chavez v. Whirlpool Corp ., 113 Cal. Rptr. 2d 1884758, at * 49 (M. D. Tenn. May 23, 2012) (claim fails where " even if Sam Moore could otherwise establish the elements of an unjust enrichment claim, the claim essentially overlaps with the publicity and trademark claims"); Allstate Interiors & Exteriors, Inc. v. Stonestreet Constr ., LLC, 907 F. Supp. 2d 216, 245 - 46 (D. R. I. 2012) (finding unjust enrichment claim " duplicative and superfluous"); Berry v. Indianapolis Life Ins. Co ., No. 3: 08 - CV - 0248, 2011 WL 3555869, at * 9 (N, D. Tex. Aug. 11, 2011) (dismissing unjust enrichment claims as duplicative of fraud claims) . 39 3 175, 183 (Cal. Ct. App. 2001) (upholding dismissal of consumer UCL claim where " [ t ] he complaint does not allege a valid Cartwright Act violation to establish an unlawful ' act or practice " under the UCL) . Similarly: If the same conduct is alleged to be both an antitrust violation and an " unfair " business act or practice for the same reason – because it unreasonably restrains competition and harms consumers - - the determination that the conduct is not an unreasonable restraint of trade necessarily implies that the conduct is not " unfair " toward consumers. To permit a separate inquiry into essentially the same question under the unfair competition law would only invite conflict and uncertainty and could lead to the enjoining of procompetitive conduct. Id. at 184 (citation omitted) . Subscribers attempt this same improper double - dipping here, alleging that Defendants ' conduct is both an antitrust violation and " unfair. " Sub. Compl. II 658 - 59. 64 Their California UCL claim should thus be dismissed. B. Subscribers Fail to State a Claim for Unfair Competition in Hawaii. For similar reasons, Count 27 of the Subscriber Complaint fails to state a claim under Hawaii's unfair competition law, which prohibits " [ u ] nfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce. " Haw. Rev. Stat. $ 480 2 (a) . Specifically, the Subscriber Complaint alleges that the License Agreements, Membership Standards, and Guidelines constitute an " unfair method of competition " because they violate Hawaii's antitrust law. Sub. Compl. (1 735 - 36. Because Subscribers ' state antitrust claims fail, for all the reasons addressed in the Antitrust Conspiracy Claims Brief and above, their derivative unfair competition claim likewise should be dismissed for failure to state a claim. See, e. g ., 64 Moreover, any claim that Defendants have acted unlawfully or unfairly in creating Service Areas is especially unwarranted in California, where, as Subscribers concede on the face of the Complaint, BCCA and BSCA compete head to head. See, e. g ., Sub. Compl. TT 66, 68, 69, 70. The Blue - on - Blue competition that Subscribers claim is lacking already exists in the California market. 40 3 N Fitzgerald v. Am. Sav. Bank, F. S. B ., No. CV. 11 - 00199 DAE - RLP, 2011 WL 4899939, at * 9 (D. Haw. Oct. 13, 2011) (dismissing 8 480 - 2 claim for failure to state a claim) . Subscribers Fail to State a Claim for Unfair Competition Under North Carolina Law. As in California and Hawaii, if the underlying antitrust claims fail, claims alleging the same conduct under the North Carolina unfair competition statute also fail. See Oceans One Eleven, LLC v. Beach Mart, Inc ., No. 2: 07 - CV - 8 - BO, 2008 WL 4610232, at * 2 (E. D. N. C. Oct. 16, 2008) (because " the Sherman Act claims and the N. C. Gen. Stat. . . . 8 75 - 1. 1 claims are based entirely on the same allegations, " summary judgment granted to defendant on the g 75 - 1. 1 claim for the same reason as the Sherman Act claims); Hester v. Martindale - Hubbell, Inc ., 493 F. Supp. 335, 341 (E. D. N. C. 1980), aff " d, 659 F. 2d 433 (4th Cir. 1981) (on summary judgment motion, dismissing 75 - 1. 1 claim in light of previous holding that no violation of antitrust laws occurred); L. C. Williams Oil Co. v. Exxon Corp ., 625 F. Supp. 477, 482 (M. D. N. C. 1985) ("the court concludes that no commercial unfairness or deception exists in this case to warrant Col expansion of G 75 - 1. 1 beyond what is contained in the Clayton and Sherman Acts") . Additionally, North Carolina courts have ruled that a party's actions that conform to the terms of a contract do not constitute an unfair trade practice. See Gaynoe v. First Union Corp ., 571 S. E. 2d 24, 27 (N. C. Ct. App. 2002), review denied, 577 S. E. 2d 118 (N. C. 2003) (upholding dismissal of 75 - 1. 1 claim where defendant acted " in accordance with the cardholder agreement"); Howard Perry & Walston Realty, Inc. v. Meredith Corp ., 77 Fed. Appx. 128, 131 (4th Cir. July 25, 2003) (upholding dismissal of North Carolina unfair competition claim for failure to make any claim of conduct by the defendants that was " inconsistent with that allowed by the express terms of the. . . contract " at issue); Nantahala Vill ., Inc. v. NCNB Nat ' l Bank (In 41 3 re Nantahala Village, Inc .), 976 F. 2d 876, 882 (4th Cir. 1992) ("the exercise of contractual rights is not an unfair trade practice under the North Carolina statute " (citation omitted)) . Here, the " supra - competitive " premiums alleged in the Complaint, Sub. Compl. 1073 (1), 1084, were n1 charged pursuant to valid and enforceable health insurance contracts between the North Carolina named subscriber plaintiffs and BCBSBNC. Id. If 35 - 37. As a result, there is no unfair trade practice and no 8 75 – 1. 1 claim. V. SUBSCRIBERS FAIL TO STATE ANTITRUST CLAIMS CHALLENGING MFNS. In a Complaint totaling 1, 306 paragraphs and containing 105 total counts, Subscribers devote a mere 17 paragraphs to MFN allegations, and bring only seven MFN counts63 against three Defendants. Subscribers ' sparse allegations against BCBSNC, Highmark, and BCBSSC (the " MFN Defendants") are woefully inadequate. Indeed, Subscribers do not allege a single fact about any actual MFN in any provider contract. Furthermore, no court has ever found MFNs to be inherently unlawful. 66 Instead, courts have found that MFNs generally do not violate the antitrust laws because they reduce costs and therefore lower prices. See, e. g ., Blue Cross & Blue Shield United of Wis. v. Marshfield Clinic, 65 F. 3d 1406, 1415 (7th Cir. 1995) . Nevertheless, Subscribers speculate that the MFN Defendants use MFNs to raise – rather than lower – provider costs both for themselves and their health insurance competitors. Sub. Compl. If 389 - 93. However, in order to state such a claim Subscribers must allege both below - cost pricing and 65 The only counts that mention MFNs are 70, 71, 74, 79, 80, 90, and 91. To the extent counts 72, 82, and 92 – which allege attempted monopolization in violation of Sherman Act Section 2 - also challenge MFNs, those claims should be dismissed for the same reasons stated herein. 6° All vertical agreements between buyers and sellers are subject to the rule of reason precisely because the procompetitive benefits of lower prices may very well exceed any claimed harm to competition. Leegin Creative Leather Products, Inc. v. PSKS, Inc ., 551U.S. 877, 889 (2007) . 42 3 rec recoupment, which they have failed to do. Weyerhaeuser Co. v. Ross - Simmons Hardwood Lumber Co ., 549U.S. 312, 325 (2007) . Subscribers ' MFN claims also fail because they have alleged the wrong product market to challenge MFNs and because they have not alleged any antitrust injury. A. Subscribers Fail to Allege the Elements of Their MFN Antitrust Claims. The MFN claims against BCBSNC, Highmark, and BCBSSC arise under Sections 1 and 2 of the Sherman Act, and, for BCBSNC, a North Carolina statute. 67 Each of these claims requires plausible allegations showing that: (1) the MFN Defendants ' provider contracts contain MFNs; (2) those MFNs are anticompetitive, and (3) the MFN Defendants have market power in the relevant market in which MFNs are allegedly used. Because the Subscribers have failed to plausibly allege any of these essential elements, the MFN claims should be dismissed. Mack v. City of High Springs, 486 Fed. Appx. 3, 6 (11th Cir. 2012) (To survive a motion to dismiss under Rule 12 (b) (6), the plaintiff must plead " either direct or inferential allegations respecting all the material elements necessary to sustain a recovery under some viable legal theory. " (citation omitted)) . 1. Subscribers Allege No Specific Provider Contracts Containing MFNs. The Subscriber Complaint does not even cross the initial hurdle of identifying any actual provider contracts containing MFN provisions. Subscribers ' unsupported assertions that the use of MFNs is " widespread and pervasive, " Sub. Compl. 1 395, and that the MFN Defendants have " coordinated their use of MFNs, " id. 1 394, are mere " legal conclusions masquerading as facts " 67 Subscribers ' MFN claims arising under N. C. Gen. Stat. S 75 - 1 should be dismissed for the same reasons as Subscribers ' Sherman Act claims. Murrow Furniture Galleries, Inc. v. Thomasville Furniture Indust ., Inc. 889 F. 2d 524, 530 (4th Cir. 1989); Microsoft Corp. v. Computer Support Serv's. of Carolina, Inc ., 123 F. Supp. 2d 945, 955 (W. D. N. C. 2000); Hester, 493 F. Supp. at 341. 43 3 not entitled to a presumption of truth. Hazewood v. Found. Fin. Group, LLC, 551 F. 3d 1223, 1226 (11th Cir. 2008) (citation omitted) . A complaint must allege the " time, place, or person ? " SON involved in an alleged agreement to restrain trade. Bell Atl. Corp. v. Twombly, 550U.S. 544, 565 n. 10 (2007); see also Total Benefits Planning Agency, Inc. v. Anthem Blue Cross & Blue Shield, 552 F. 3d 430, 434 (6th Cir. 2008); McCullough v. Zimmer, Inc ., 382 Fed. Appx. 225, 230 n. 6 (3d Cir. 2010); Kendall v. VisaU.S. A ., Inc ., 518 F. 3d 1042, 1047 (9th Cir. 2008) . Without these essential facts, a defendant trying to respond to antitrust allegations " would have little idea of where to begin. " Twombly, 550U.S. at 565 n. 10. Subscribers have failed to allege any facts about any actual MFNs in BCBSNC, Highmark, or BCBSSC provider contracts. 68 BCBSNC - With respect to BCBSNC, the Complaint alleges only two facts, neither of which suggests any specific BCBSNC provider contract that actually contains an MFN. First, Subscribers allege that in 2006 BCBSNC told the North Carolina Department of Insurance ("NCDOI '") that its " favorable pricing clause has been in use for years. " This alleged statement was made long before the start of the alleged class period on February 7, 2008, and is well outside the applicable four - year statute of limitations. 69 Sub. Compl. 1 397. Second, Subscribers allege that, between 2006 and 2009, BCBSNC " used four form provider agreements that included MFNs. " Id. 1 398. Again, alleged " use " of form agreements with MFNs before February 7, 2008 is outside both the alleged class period and the four - year statute of limitations. 68 Many of Subscribers ' allegations are entirely unrelated to the MFN Defendants and are therefore irrelevant to their MFN claims. For example, the fact that an MFN presentation was given to Blue Plans at a BCBSA meeting does not establish that BCBSNC, Highmark, or BCBSSC use MFNs. Sub. Compl. 395. Similarly, Subscribers allegations related to BCBSMI are irrelevant because they bring no MFN claims against BCBSMI. Id. | 396. Subscribers ' discussion of United States v. Blue Cross Blue Shield of Michigan only reveals the stark contrast between DOJ's factual allegations in that case (identifying MFN contracts with " 70 of Michigan's 131 general acute care hospitals") and the Subscribers ' inadequate allegations here. Id. 69 The statute of limitations for Subscribers ' federal law and North Carolina state law MFN claims is four years. 15U.S. C. & 15b (federal); N. C. Gen. Stat. & 75 - 16. 2 (state) . 44 3 But more importantly, Subscribers allege no facts showing any actual BCBSNC provider contracts containing MFNs, much less how such contracts could have had any effect on overall provider reimbursement rates in any relevant provider services market in North Carolina. For these reasons, Counts 70 and 74 should be dismissed. Highmark70 – Based on template contracts filed with the PID, Subscribers allege that Highmark " uses MFNs in its contracts " with providers. Sub. Compl. | 399. But Subscribers do not allege a single actual contract that contains such a clause. Subscribers ' reliance on templates they cannot allege were even used is not an adequate or plausible basis for their conclusory claims that Highmark's use of MFNs has raised the costs of its competitors, protected it from competition, or otherwise caused antitrust injury. In addition, the language they quote from the template contracts does not even support Subscribers ' contention that these contracts contain MFNs. The first type of contract Subscribers reference limits Highmark's payment obligation to the lesser of the provider's " usual charges " or Highmark's current payment rates. Id. 1 400. Nothing about this limitation on payment has anything to do with the provider's terms of reimbursement with other insurers. This clause is not an " MFN " clause at all. Providers with this clause in their contracts are not precluded from selling their services to other payors at a price less than Highmark's rate. The " second type of MFN " Subscribers reference is also not an MFN. Id. [ 401. It is virtually the same as the first type, but limits Highmark's obligation to the lesser of the provider's " total covered charges " or 7° Subscribers have alleged that Highmark Health Services does business in Delaware, Pennsylvania, and West Virginia. This is incorrect. For clarity, the non - profit corporation Highmark Health Services does business as Highmark Blue Cross Blue Shield ("Highmark") in Western Pennsylvania, and does business as Highmark Blue Shield ("Highmark BS") in the rest of Pennsylvania. The non - profit corporation Highmark BCBSD Inc. ("Highmark DE") does business as Highmark Blue Cross Blue Shield Delaware. The non - profit corporation Highmark West Virginia Inc. ("Highmark WV") does business as Highmark Blue Cross Blue Shield West Virginia. Both Highmark DE and Highmark WV are affiliates of Highmark Health Services. 45 3 the rate established by the provider's agreement with Highmark. Id. Again, nothing in this language prohibits providers from charging another insurer whatever it wants. This is not an MFN clause; it simply ensures Highmark will not pay a provider more than the charges that the provider otherwise assesses to uninsured patients for its services. In sum, Subscribers ' MFN allegations against Highmark are not consistent with its contention that Highmark " uses MFNs, " let alone that it has violated antitrust laws by doing so. Finally, Subscribers ' review of PID filings apparently stopped before it reviewed Highmark's certification that it " does not use and does not anticipate using MFNs in any of its contracts. " Resp. to PID Info. Req. 5. 1. 3, Pa. Ins. Depºt, Highmark / West Penn Cumulative Log, ECF. No. 146 (2012); see also Resp. to PID Info. Req. 66, Pa. Ins. Depºt, Highmark / IBC Cumulative Log, ECF No. 344 (Nov. 21, 2007) ("Highmark and its subsidiaries do not have most favored nation clauses in their provider contracts .") . 71 Moreover, as a condition of the PID's approval of Highmark's recent affiliation with a hospital system, Highmark agreed not to enter into any provider contracts in Pennsylvania which contain MFNs. See Approving Determination & Order, Pa. Ins. Dep ' t, Highmark / West Penn Cumulative Log, ECF. No. 1418, at [ 5 (May 31, 2012) . Thus, Subscribers " MFN claim against Highmark (Count 79) should be dismissed. BCBSSC - With respect to BCBSSC, Subscribers do not even allege form or template agreements containing MFNs, much less any actual MFN agreement. Instead, Subscribers " Records, reports, and other documents on file with government agencies are judicially noticeable. See, e. g ., Hope v. Pelzer, 240 F. 3d 975, 979 n. 8 (11th Cir. 2001) (taking judicial notice of the Department of Justice's examination of a correctional institution and its advice that the institution's use of a hitching post was improper punishment), overruled on other grounds 536U.S. 730, 744 - 45 (2002) (observing with approval that the appellate court relied on the DOJ report); see also Hicks v. City of Alabaster, Ala ., No. 2: 11 - cv - 4107, 2013 WL 988874, at * 7 n. 5 (N. D. Ala. Mar. 12, 2013) (Proctor, J .) (taking judicial notice " of the contents of relevant public records") . 46 3 speculate that BCBSSC uses MFNs based only on a vague, unattributed statement in a single newspaper article. But even that article does not actually identify any BCBSSC provider contracts containing MFNs. Instead, the article only states that an unidentified BCBSSC " spokesman " said that certain unspecified provider contracts " ensure that our customers get the best possible pricing for their health care services. " Sub. Compl. 1 402. A quote from an unidentified individual in a newspaper article – stating only that unspecified provider contracts benefit consumers – is clearly an inadequate basis to infer the existence of an actual agreement that restrains trade. Subscribers ' failure to allege the existence of actual MFNs is grounds for dismissal of their MFN claim against BCBSSC (Count 90) . 2. Subscribers Fail to Allege that MFNs Are Anticompetitive. MFNs are common contract provisions routinely used by companies in many industries, as well as by the government, " " to decrease costs and obtain a supplier's lowest price. Accordingly, courts have repeatedly ruled that MFNs benefit consumers and do not violate the antitrust laws: Most favored nations ' clauses are standard devices by which buyers try to bargain for low prices, by getting the seller to agree to treat them as favorably as any of their other customers. The Clinic did this to minimize the cost of these physicians to it, and that is the sort of conduct that the antitrust laws seek to encourage. Marshfield Clinic, 65 F. 3d at 1415 (emphasis added); see also Austin v. Blue Cross & Blue Shield of Ala ., 903 F. 2d 1385, 1390 (11th Cir. 1990) (finding that provider contracts allow BCBS to " get the best deal possible " and to " pass [ ] along the savings thus realized to consumers"); 72 For example, the Government Services Administration requires MFNs in federal supply schedule contracts, guaranteeing that the government gets the contractor's lowest price. See Multiple Award Schedule Procurement, 47 Fed. Reg. 50, 242, 50, 244 (Nov. 5, 1982); 48 C. F. R. 8 552. 238 - 75. Similarly, the Medicaid Rebate Act imposes a MFN on drug companies seeking reimbursement from Medicaid. 42U.S. C. & 1396r - 8. the Meard Schedule con 47 3 Ocean State Physicians Health Plan, Inc. v. Blue Cross & Blue Shield of R. I ., 883 F. 2d 1101, 1110 (1st Cir. 1989) (finding that BCBS MFN " tends to further competition on the merits and, as a matter of law, is not exclusionary " (emphasis added)); E. I. Du Pont de Nemours & Co. v. FTC, 729 F. 2d 128 (2d Cir. 1984) (rejecting FTC's theory that MFNs substantially lessened competition); Kitsap Physicians v. Wash. Dental Serv ., 671 F. Supp. 1267, 1269 (W. D. Wash. COI 1987) . 73 Subscribers admit that the MFN Defendants use MFNs to obtain providers ' " lowest prices. " Sub. Compl. [ 389. It is black - letter law that " [ 1 ] ow prices benefit consumers regardless of how those prices are set, and so long as they are above predatory levels, they do not threaten competition. " Atl. Richfield Co. v. USA Petroleum, Co ., 495U.S. 328, 340 (1990) . As discussed below, Subscribers do not allege that the MFN Defendants used MFNs to set prices at predatory levels, and therefore a claim that the MFN Defendants bargained for the " lowest possible price for services provided to its customers " cannot state an antitrust claim as a matter of law. See Austin, 903 F. 2d at 1391 (affirming dismissal of complaint alleging that low provider rates negotiated by BCBSAL resulted in higher provider rates for its competitors) . 3. Subscribers Fail to Allege Below - Cost Pricing and Recoupment. Subscribers speculate that MFNs establish a " price floor " below which providers will not sell services to either MFN Defendants or their competitors, and that the MFN Defendants then 73 This case is easily distinguishable from United States v. Apple, in which DOJ alleged that MFNs were part of a price - fixing conspiracy. Nos. 12 Civ. 2826 (DLC), 12 Civ. 3394 (DLC), 2013 WL 3454986 (S. D. N. Y. July 10, 2013) . The Subscriber Complaint contains no allegations of a price - fixing conspiracy or that the alleged MFNs had any effect other than potentially excluding competitors. Indeed, the Apple court explicitly stated that MFNs are not " inherently illegal, " and that the MFNs at issue were only " improper " in the unique context of the alleged price fixing scheme. Id. at * 48 - 49. 48 3 " raise that price floor " by overpaying those providers. 74 Sub. Compl. 1 391. Competition is allegedly harmed because the competitors are " unable to survive " as a result of the higher provider costs. Id. | 393. However, the Supreme Court has recognized a fundamental problem with this theory: as long as the premiums charged to MFN Defendants ' subscribers cover MFN Defendants ' provider costs, any exclusion of competitors merely " reflects the lower cost structure of [ MFN Defendants), and so represents competition on the merits, or is beyond the practical ability of a judicial tribunal to control. " Brooke Grp. Ltd. v. Brown & Williamson Tobacco Corp ., 509U.S. 209, 223 (1993) . The Supreme Court considered similar allegations to those made by Subscribers in Weyerhaeuser. 549U.S. 312. There, the plaintiff alleged that the defendant saw mill was " bidding up input costs " by overpaying for logs in order to drive competing saw mills " out of business. " Id. at 316. The Court held that such a scheme does not " make economic sense " unless the plaintiff alleges " two prerequisites to recovery ": (1) " that the alleged predatory bidding led to below - cost pricing of the predator's outputs; " and (2) " that the defendant has a dangerous probability of recouping the losses incurred in bidding up input prices through the exercise of monopsony power " after competitors are excluded from the market. Id. at 318, 325 (citing Brooke Grp ., 509U.S. 209) . This type of predatory pricing scheme is " rarely tried, and even more rarely successful " because the defendant must incur " definite " short - term losses in exchange for " inherently uncertain " long - term gain that depends upon not only " neutralizing the competition, " but excluding competitors long enough to " recoup " defendant's losses. Matsushita Elec. Indus ., 475U.S. at 588 - 89. 74 This speculation directly contradicts the gravamen of the Providers ' Complaint that Defendants have conspired to drive provider rates down, not up. 49 3 In this case, Subscribers must allege two essential elements in order for their MFN claim to survive: (1) that MFN Defendants ' output prices (health insurance premiums) are below " an appropriate measure " of MFN Defendants ' input costs (provider reimbursement rates); and (2) there is at least a " dangerous probability " that MFN Defendants can subsequently " recoup " " their losses from below - cost pricing by increasing output prices in the future after competitors are excluded from the market. Weyerhaeuser, 549U.S. at 318 - 19 (quoting Brooke Group Ltd. v. Brown & Williamson Tobacco Corp ., 509U.S. 209, 222, 224 (1993)); see also Bailey v. Allgas, Inc ., 284 F. 3d 1237, 1244 - 45 (11th Cir. 2002) . Where, as here, an alleged scheme to raise input costs " does not result in below - cost output pricing [, it ] is beyond the practical ability of a judicial tribunal to control without courting intolerable risks of chilling legitimate procompetitive conduct. " Weyerhaeuser, 549U.S. at 325 (citation omitted) . The Subscriber Complaint does not allege these essential elements of their MFN claims. First, as a threshold matter, the Subscriber Complaint does not allege that Defendants ' MFNs excluded any competitors from any relevant market. Subscribers ' MFN claims cannot survive dismissal without plausible allegations that MFNs actually excluded competing health insurers. Second, Subscribers do not allege that the MFN Defendants engaged in below - cost pricing. There are no allegations that the MFN Defendants set health insurance premiums at levels that did not cover their own costs. Indeed, Subscribers affirmatively plead that the MFN Defendants have positive profit margins, thereby contradicting any predatory pricing theory. See, e. g ., Sub. Compl. IT 501, 513, 527. Third, Subscribers do not allege that MFN Defendants could " recoup ? " 50 3 their losses from below - cost pricing by increasing health insurance premiums in the future once other health insurers are driven out of the market. 75 Because Subscribers have failed to allege the essential elements of a predatory pricing claim, their MFN claims are implausible and fail as a matter of law. Pacific Bell Tel. Co. v. Linkline Commc ' ns ., Inc ., 555U.S. 438, 451 - 52 (2009) (reversing denial of defendant's motion for judgment on the pleadings where plaintiff failed to allege elements of predatory pricing claim); see also Weyerhaeuser, 549U.S. 312 (vacating denial of judgment as a matter of law); Brooke Grp ., 509U.S. 209 (affirming judgment as a matter of law) . Subscribers ' MFN Allegations are Premised on the Wrong Relevant Market. To state an antitrust claim, Subscribers must plausibly allege that the MFN Defendants have market power in the market that is relevant to their MFN claims – not some other market. " [ M ] arket power is the ability to raise price significantly above the competitive level without losing all of one's business. " Maris Distrib. Co. v. Anheuser - Busch, Inc ., 302 F. 3d 1207, 1216 (11th Cir. 2002) (citation omitted) . Subscribers allege MFNs in provider contracts, which they claim operate to raise prices in the provider services market. Therefore, the relevant product market for evaluating the MFN Defendants ' market power, and their resulting ability to increase the price for provider services as claimed, is the market in which the MFN Defendants buy provider services, not the alleged market in which MFN Defendants sell health insurance. See, e. g ., Griffiths v. Blue Cross & Blue Shield of Ala ., 147 F. Supp. 2d 1203, 1212 (N. D. Ala. 2001) (relevant market for evaluating BCBS chiropractor contracts is the " market for chiropractor 75 Given the extensive state and federal regulatory review of the Defendants ' premium rates, see Section II above, it is implausible to infer either the MFN Defendants ' ability to engage in predatory below - cost pricing or the subsequent ability to recoup through overcharges. 3 services " (citation omitted)) . 76 But the Subscriber Complaint contains no allegations whatsoever about any market for provider services. Nor can Subscribers survive a motion to dismiss by assuming that MFN Defendants have market power (and therefore the ability to increase prices to supra - competitive levels) in the provider services market because they allegedly have market power in a narrow slice of the commercial health insurance market. Attempting to extrapolate market power in the relevant market based on market share data from a different market is improper as a matter of law. See, e. g ., W. Parcel Express v. UPS of Am ., Inc ., 65 F. Supp. 2d 1052, 1061 (N. D. Cal. 1998), aff ' d, 190 F. 3d 974 (9th Cir. 1999); see also Maris Distributing, 302 F. 3d at 1215. Evaluating the correct product market is critically important in this case because all potential buyers of provider services must be included in provider market shares. See, e. g ., Little Rock Cardiology Clinic PA v. Baptist Health, 591 F. 3d 591, 596 - 98 (8th Cir. 2009) (finding that the relevant product market consisted of all patients " regardless of the method of payment [ because such patients are ] reasonably interchangeable from the cardiologist's perspective"); see also Stop & Shop Supermarket Co. v. Blue Cross & Blue Shield of R. I ., 373 F. 3d 57, 67 (1st Cir. 2004); Brokerage Concepts, Inc. v .U.S. Healthcare Inc ., 140 F. 3d 494, 514 (3d Cir. 1998) . Therefore, any analysis of the MFN Defendants ' market share as a buyer of provider services must include all potential buyers of provider services, including Medicare, Medicaid, and large group and self - insured commercial plans. Subscribers instead allege only the MFN Defendants ? market share as sellers in a small slice of the commercial health insurance market, which 16 See also Mem. Op. & Order Regarding Blue Cross Blue Shield of Mich. Mot. to Dismiss at 15, City of Pontiac v. Blue Cross Blue Shield of Mich ., No. 11 - 10276, 2012 WL 1079895 (E. D. Mich. Mar. 30, 2012) (evaluating MFNs in the " market for hospital services") . 3 establishes nothing with respect to the MFN Defendants ' market share as buyers of provider services and their supposed ability to increase provider rates. For these reasons, the MFN claims should be dismissed. B. Subscribers Lack Antitrust Standing to Challenge MFNs. As private parties seeking to enforce the antitrust laws, Subscribers also must allege facts establishing their " antitrust standing " under Section 4 of the Clayton Act, which is narrower than Constitutional standing. See, e. g ., Sunbeam Television Corp. v. Nielsen Media Research, Inc ., 711 F. 3d 1264, 1271 - 72 (11th Cir. 2013) . To establish antitrust standing, " [ f ] irst, the plaintiff must establish that it has suffered an antitrust injury. " Id. at 1271 (citation omitted) . Here, Subscribers cannot show they have suffered any " antitrust injury " with respect to their MFN claims, and therefore those claims should be dismissed. Antitrust injury is " injury of the type the antitrust laws were intended to prevent and that flows from that which makes defendants ' acts unlawful. " Brunswick Corp. v. Pueblo Bowl - O - Mat, Inc ., 429U.S. 477, 489 (1977) . Where an antirust claim is based on the exclusion of competitors, " pricing practices " (like MFNs) cannot cause antitrust injury " unless [ they ] result [ ] in predatory pricing. " Atl. Richfield, 495U.S. at 339 - 40 (finding that " in the context of pricing practices, only predatory pricing has the requisite anticompetitive effect " (citation omitted)); see also Allgas, 284 F. 3d at 1245 (in order to show antitrust injury, plaintiff must allege below - cost pricing and recoupment) . Indeed, " [ 1 ] ow prices benefit consumers regardless of how those prices are set, and so long as they are above predatory levels, they do not threaten competition. Hence, they cannot give rise to antitrust injury. " Atl. Richfield, 495U.S. at 340. As described above, Subscribers have not alleged - and cannot allege – the essential elements of predatory pricing, S3 3 and therefore their claimed injury is not " of the type the antitrust laws were intended to prevent. " Brunswick, 429U.S. at 489. Subscribers therefore lack standing to bring their MFN claims. VI. SUBSCRIBERS ' ALLEGATIONS OF AN " AGREEMENT " BETWEEN HIGHMARK, IBC, AND BC - NEPA SHOULD BE DISMISSED. A. Subscribers Fail to Allege Facts Supporting Any Agreement Not to Compete Between Highmark and IBC. Subscribers allege that Highmark, as part of the 1996 sale of an HMO business in LIO Southeastern Pennsylvania, entered into a non - compete agreement with IBC under which Highmark agreed not to enter Southeastern Pennsylvania. Sub. Compl. 1 508. Although Subscribers allege that this agreement expired in accordance with its terms in 2007 – before the beginning of the class period - - they also allege that " [ 0 ] n information and belief, this agreement remains in place. " Id. | 509. The only purported " fact " that Subscribers allege in support of Ter their allegation that the agreement is ongoing is that " Highmark has still not attempted to enter Southeastern Pennsylvania. " Id. This lone " fact " does not even come close to supporting the existence of an actionable agreement between the parties. eme The Supreme Court considered a similarly deficient allegation in Twombly and held that the complaint failed to allege facts that would allow it to advance past the pleading stage. In Twombly, the defendant telephone carriers had previously operated in a market in which they were given local monopolies. Plaintiffs alleged that even after defendants were allowed to compete in each other's service areas, the carriers still " fail [ ed ] ' meaningfully [ to ] pursu [ e ] ' ' attractive business opportunitſies ] ' in contiguous markets where they possessed ' substantial competitive advantages. " Twombly, 550U.S. at 551 (citation omitted) . As in Twombly, Subscribers infer that because Highmark has not pursued business opportunities in Southeastern Pennsylvania, it must follow that Highmark has an " agreement " not to compete with IBC. The 54 3 Complaint does not allege any facts that support the existence of any such agreement. Moreover, the Complaint " does not allege that competition. . . was potentially any more lucrative than other opportunities being pursued by the. . . [ Blue Plans ] during the same period. " Id. at 568. Subscribers ask this Court to make a logical leap of the very sort that Twombly prohibits. The Twombly Court specifically noted that " [ f ] irms do not expand without limit and none of them enters every market that an outside observer might regard as profitable, or even a small ryer ] portion of such markets. " Twombly, 550U.S. at 569 (quoting Areeda & Hovenkamp | 307d, at 155 (Supp. 2006)) . While Subscribers might wish there were Blue - on - Blue competition in Southeastern Pennsylvania, their " disappointment does not make conspiracy plausible. " Id. Pleading one fact that is " merely consistent with " an agreement is not enough. Subscribers have the burden of pleading factual matter " plausibly suggesting " such an agreement, and have not met that burden. Id. at 557; see also Jacobs, 626 F. 3d at 1342 (plaintiff's claims dismissed where " independent economic activity would yield the same benefits with none of the costs") . B. Subscribers Have Pled No Facts Plausibly Suggesting Injury in Fact or Antitrust Standing with Respect to Alleged Pennsylvania Agreements. In order to bring suit under the Sherman Act, a plaintiff must establish the existence of " injury " to itself, also referred to as " impact " or " fact of damage. " Story Parchment Co. v. Paterson Parchment Paper Co. 282U.S. 555, 563 (1931); Alabama v. Blue Bird Body Co ., 573 F. 2d 309, 317 (5th Cir. 1978) . In addition to alleging an injury to business or property causally linked to an antitrust violation, an antitrust plaintiff must also show that it is an " efficient enforcer of the antitrust laws. " Todorov v. DCH Healthcare Auth ., 921 F. 2d 1438, 1449 (11th Cir. 1991) . Subscribers ' allegations against the Pennsylvania Plans (Sub. Compl. II 506 - 10) are 55 3 deficient in both respects – they have not pled any facts sufficient to establish either antitrust impact or their status as efficient enforcers of the antitrust laws. First, Subscribers allege that Highmark has agreed not to sell Blue - branded products in Northeastern and Southeastern Pennsylvania. Id. | 506, 508 - 09. But Subscribers then allege that these purported agreements have somehow harmed only subscribers in Western Pennsylvania (not Northeastern and / or Southeastern PA), including by limiting the entry of competitors into Western Pennsylvania and inflating rates charged in Western Pennsylvania. Id. IT 1112, 1120. Subscribers have completely failed to allege the requisite " factual connection between the alleged harmful conduct and its impact on competition in the market " that is necessary to plead either " injury in fact " or " antitrust injury. " See Jacobs, 626 F. 3d at 1339. 7 " Moreover, the allegations are implausible and insufficient on their face; they simply make no logical sense. Even if Highmark had in fact agreed not to sell Blue products in Scranton (in the Northeast) and Philadelphia (in the Southeast), there is absolutely no explanation of how this could affect Subscribers in Pittsburgh (in Western Pennsylvania) . The Subscribers in these paragraphs might as well have alleged that Highmark agreed with the Alaska Plan not to compete in the Anchorage area, and hence that Western Pennsylvania subscribers were injured. Cor Subscribers ' conclusory allegations do not plausibly suggest any damages or injury in fact to subscribers in Western Pennsylvania, much less the harm to competition that is required to establish a viable antitrust injury. " Because Subscribers have not pled facts which plausibly suggest any injury, they necessarily have failed to plead facts sufficient to suggest " antitrust injury " — i. e ., injury which is " of the type the antitrust laws were intended to prevent " and " flows from that which makes defendants ' acts unlawful. " Brunswick Corp ., 429U.S. at 489. 56 3 Second, even if Subscribers had sufficiently pled that they suffered injury in fact, the plaintiffs in the alleged Western Pennsylvania Class (Sub. Compl. 1 290) lack antitrust standing because they are not " efficient enforcer [ s ] of the antitrust laws, which requires some analysis of the directness or remoteness of the plaintiff s injury. " Todorov, 921 F. 2d at 1449. While the actual test of whether a plaintiff is an efficient enforcer is more stringent, at a bare minimum, " a plaintiff must show that it is a customer or competitor in the relevant antitrust market. " Fla. UTC Seed Co. v. Monsanto Co ., 105 F. 3d 1372, 1374 (11th Cir. 1997) (citing Associated Gen. Contractors of Cal ., Inc. v. Cal. Council of Carpenters, 459U.S. 519, 539 (1983)) . Despite pleading almost 1, 000 " relevant " markets, Subscribers have not pled a statewide market for health insurance in Pennsylvania. Subscribers have thus alleged that the Western Pennsylvania plaintiffs purchase health insurance in a different geographic market than the Northeastern and Southeast areas in which Highmark purportedly agreed not to sell Blue products. As a result, they are not customers of the relevant antitrust market and thus are not efficient enforcers of the antitrust laws. See Reading Int ' l, Inc. v. Oaktree Capital Mgmt. LLC, 317 F. Supp. 2d 301, 313 (S. D. N. Y. 2003) (dismissing claims because plaintiff did not participate in the relevant geographic markets) . VII. ABANDONED PARTIES FROM UNDERLYING ACTIONS SHOULD BE DISMISSED AND ANY IMPROPERLY ADDED PARTY SHOULD BE STRICKEN. Plaintiffs ' consolidated amended complaints add new parties and drop parties previously nar named in underlying complaints. The Court's May 30, 2013 Order directing Plaintiffs to file consolidated amended complaints did not grant Plaintiffs leave to add or delete parties. Only those parties and claims included in the consolidated amended complaints can ultimately proceed in underlying actions upon transfer back to the home courts. And only those parties properly 57 3 included in the underlying complaints should be allowed to proceed now in the MDL. The Court should therefore (i) dismiss parties to underlying actions who are not named in the consolidated amended complaints and (ii) strike any party named in a consolidated amended complaint who is not part of an underlying action. Plaintiffs should not be permitted to maintain underlying actions when they have refused to participate in the MDL by pleading their claims in one of the consolidated amended complaints as ordered by this Court. To allow these plaintiffs to maintain their claims would " obfuscate [ ] " the goal of an MDL to resolve claims efficiently and " pose [ ] substantial uncertainty in the [ ] proceedings " because Plaintiffs could " silently pursue claims and parties not included in the [ consolidated complaints ] . " In re Ford Motor Co. Speed Control Deactivation Switch Prods. Liab. Litig ., 664 F. Supp. 2d 752, 770 (E. D. Mich. 2009) . Also, an MDL court does not have authority over parties who are not part of a pending action centralized in the MDL. In re Webkinz Antitrust Litig ., No. M 08 - 01987 JSW, 2009 WL 6346585, at * 1 (N. D. Cal. Aug. 4, 2009) . Thus, any party who is no longer part of an underlying action should be stricken from the consolidated amended complaints. Despite Defendants ' efforts to resolve this issue without the Court's intervention, 78 numerous underlying actions involving parties not named in the consolidated amended complaints remain active and a plaintiff who is no longer a party in an underlying action remains in the Providers ' consolidated amended complaint. Defendants therefore ask that the Court 78 Defendants raised this issue at the Court's August 21, 2013 hearing, in which the Court ordered Plaintiffs to amend their underlying complaints to correct procedural deficiencies. Hr ' g Tr. 70 - 72, Aug. 21. 2013. Since the hearing, Defendants have had numerous exchanges with Plaintiffs ' counsel, during at least two of which, Plaintiffs ? counsel stated an intention to voluntarily dismiss any plaintiffs and defendants not named in the consolidated complaints. Plaintiffs subsequently dismissed some, but not all, of the relevant parties and underlying actions. Defendants sent one final letter on September 25, 2013 again asking that Plaintiffs dismiss the remaining parties. 58 3 dismiss all plaintiffs and defendants who are not named in the consolidated amended complaints but are still named in underlying actions and strike any plaintiff who is named in a consolidated amended complaint but is not a party to an underlying action. A list of the parties and actions that should be dismissed as of September 27, 2013 is attached hereto as Appendix II. VIII. THE SUBSCRIBER COMPLAINT IS IMPROPER SHOTGUN PLEADING. Despite the Court's admonition that " Plaintiffs shall avoid shotgun pleading, " May 30, 2013 Order (ECF No. 79 ] 2 n. 1, the Subscriber Complaint is precisely the unfocused, scattered shotgun pleading that the Eleventh Circuit has " repeatedly condemned " as improper. Frantz v. Walled, 513 Fed. Appx. 815, 820 (11th Cir. 2013) (citation omitted); see also, e. g ., Davis v. Coca - Cola Bottling Co ., 516 F. 3d 955, 979 n. 54 (11th Cir. 2008) ("[ S ] ince 1985 we have explicitly condemned shotgun pleadings upward of fifty times .") . Shotgun pleadings are typified by the " incorporaſtion of ] every antecedent allegation by reference into each subsequent claim for relief or affirmative defense. " Wagner v. First Horizon Pharm. Corp ., 464 F. 3d 1273, 1279 (11th Cir. 2006) (citation omitted) . By " support [ ing ] a specific, discrete claim with allegations that are immaterial to that claim, " shotgun pleadings place an impermissible burden on defendants and the court to " cull through the allegations, identify the claims, and, as to each claim identified, select the allegations that appear to be germane to the claim. " Ledford v. Peeples, 657 F. 3d 1222, 1240 (11th Cir. 2011) . Because such pleadings are " time consuming " and resource draining for the court and litigants and because the district court has " the power and the duty to define the issues at the earliest stages of litigation, " if the Court does not dismiss the Subscriber Complaint in its entirety, it should require the Subscribers to replead their claims pursuant to Federal Rule of Civil Procedure 12 (e) . See Johnson Enters. of Jacksonville, Inc. v. FPL Grp ., Inc ., 162 F. 3d 1290, 1333 (11th Cir. 1998); see also, e. g ., Davis, 516 F. 3d at 983 59 3 (defendants should " move [ ] the court for a more definite statement " when faced with a shotgun pleading) . 79 The Subscriber Complaint is a classic shotgun pleading. It runs 309 pages long, and contains 1, 306 paragraphs of allegations that ostensibly support 105 counts against 59 defendants. All but the first two of those 105 counts begin with the statement that " Plaintiffs repeat and reallege the allegations in all Paragraphs above. " 80 Thus, each count here " successively incorporate [ s ] the allegations of all preceding paragraphs and counts, such that each succeeding count. . . [ is ] loaded down with allegations having no bearing on the claim (s) the count purported to assert. " See Thompson v. RelationServe Media, Inc ., 610 F. 3d 628, 650 n. 22 (11th Cir. 2010) (condemning a pleading where each count progressively incorporated all preceding allegations) . By the time the Subscriber plaintiffs plead their last count (Count 105), they attempt to incorporate all 1, 301 prior allegations, even though that final count brings only an unjust enrichment claim against BCBSA and BCBSTX. Sub. Compl. J 1302. Count 105 thus references " the allegations of. . . [ the substantive ] counts that precede it. . . [ and ] factual allegations that could not possibly be material to that count, " such as facts regarding the other defendants and their alleged practices. See Magluta v. Samples, 256 F. 3d 1282, 1284 (11th Cir. 2001) (ordering district court to strike 58 - page complaint, in which each count incorporated the same 146 factual allegations and the allegations of each preceding count) . And following the paragraph that incorporates the 1, 301 prior allegations in support of Count 105, the Subscribers 19 The Court may address this argument under either Rule 12 (e) or Rule 12 (b) (6) . See, e. g ., Frantz, 513 Fed. Appx. At 820 (affirming Rule 12 (b) (6) dismissal of shotgun pleading); Davis, 516 F. 3d at 983 (discussing Rule 12 (e) dismissal) . ° See, e. g ., Sub. Compl. II 565, 576, 582, 587, 598, 604, 609, 613, 624, 630. 60 3 conclusorily allege the elements of unjust enrichment without any elucidation as to which specific factual allegations support this count. See Sub. Compl. (1303 - 06. Counts 3 through 104 follow the same pattern as Count 105 and are equally defective. In short, the Subscriber Complaint's " lack of connection between the substantive count and the factual predicates " and failure to connect the paragraphs preceding the counts with the " otherwise generally pled claim " is impermissible. Wagner, 464 F. 3d at 1279. This improper pleading is not a mere technicality. The shotgun Subscriber Complaint leaves Defendants incapable of discerning the precise nature of the claims against them. Each Defendant is entitled to know what the Subscribers claim that it did that is supposedly wrongful. For most Defendants, it appears that the only alleged wrongdoing that the Subscribers claim is entering into the License Agreement, Membership Standards and Guidelines with the BCBSA. But given the Subscribers ' shotgun pleading, it is not clear. For example, the Subscriber Complaint contains allegations regarding the use of MFNs in provider agreements by " numerous, " but not all, Blue Plans. Sub. Compl. 1 387. It then specifically alleges that at least four defendants – BCBSMI, BCBSNC, Highmark, and BCBSSC - have used MFNs to " exploit the monopoly power they hold in their respective Service Areas " and " have coordinated their use of MFNs with other Blue entities. " Id. 1 394. Although the Subscribers incorporate these allegations into each and every substantive count against the Defendants, they only bring counts specifically based on MFNs against BCBSNC, Highmark, and BCBSSC. Id. (1048 - 55, 1078 85 (Counts 70 & 74 against BCBSNC); id. I 1117 - 24 (Count 79 against Highmark); id. TT 1195 - 1202 (Count 90 against BCBSSC) . Defendants are left to wonder whether Subscribers are bringing a claim only against these three Defendants based on MFNs or whether they are all charged with MFN - related violations. 61 3 Neither Defendants nor the Court are required to guess at the nature and bases of the Subscribers ' claims. See Beckwith v. Bellsouth Telecommcn ' s, Inc ., 146 Fed. Appx. 368, 372 (11th Cir. 2005) (court does not require defendant to face the " unfair burden " of shotgun pleadings and " sift through the facts presented and decide for [ itself ] which were material to the particular cause of action asserted") (citation omitted) . 81 For all the reasons set forth in the Antitrust Conspiracy Claims Brief and above, the Subscribers have failed to state any viable claims, and any amendment would be futile. But should the Court allow any amendment, Subscribers should be prohibited from filing another shotgun complaint. CONCLUSION For each of the reasons stated above, and for the reasons stated in the Antitrust Conspiracy Claims Brief, which arguments are adopted and incorporated herein in their entirety, Defendants respectfully move this Court to dismiss in their entirety with prejudice the amended consolidated complaints filed by the Providers and Subscribers. 8 " When a complaint constitutes a shotgun pleading, defendants do not necessarily need to file a responsive pleading, Defendants nonetheless have done so here, not because the Subscriber Complaint is properly pled under Eleventh Circuit law, but for purposes of efficiency and because it is clear that there are dispositive grounds for dismissal of the Subscribers ' claims. 62 3 Dated: September 30, 2013 Respectfully submitted, / s / Craig A. Hoover Craig A. Hoover J. Robert Robertson E. Desmond Hogan HOGAN LOVELLS US LLP Columbia Square 555 Thirteenth Street, NW Washington, DC 20004 202 - 637 - 5600 (fax) 202 - 637 - 5910 craig. hoover @ hoganlovells. com robby. robertson @ hoganlovells. com desmond. hogan @ hoganlovells. com Emily M. Yinger N. Thomas Connally, III HOGAN LOVELLS US LLP Park Place II 7930 Jones Branch Drive, Ninth Floor McLean, VA 22102 703 - 610 - 6100 (fax) 703 - 610 - 6200 emily. yinger @ hoganlovells. com tom. connally @ hoganlovells. com Co - Coordinating Counsel for the Defendants S 3 David J. Zott, P. C. Daniel E. Laytin, P. C. KIRKLAND & ELLIS LLP 300 North LaSalle Chicago, IL 60654 312 - 862 - 2000 (fax) 312 - 862 - 2200 daniel. laytin @ kirkland. com david. zott @ kirkland. com Ian R. Conner KIRKLAND & ELLIS LLP 655 Fifteenth Street, NW Washington, DC 20005 202 - 879 - 5000 (fax) 202 - 879 - 5200 ian. conner @ kirkland. com Co - Coordinating Counsel for the Defendants 64 3 Defense Counsel Cavender C. Kimble BALCH & BINGHAM LLP 1901 6th Avenue N, Suite 1500 Birmingham, AL 35203 - 4642 205 - 226 - 3437 (fax) 205 - 488 - 5860 ckimble @ balch. com Counsel for Defendants, Anthem, Inc .; Anthem Health Plans, Inc. (Anthem Blue Cross and Blue Shield of Connecticut); Blue Cross and Blue Shield of Georgia, Inc .; Anthem Insurance Companies, Inc. (Anthem Blue Cross and Blue Shield of Indiana); Anthem Health Plans of Maine, Inc .; HMO Missouri, Inc. (Anthem Blue Cross and Blue Shield of Missouri); Anthem Health Plans of New Hampshire, Inc. (Anthem Blue Cross and Blue Shield of New Hampshire); Anthem Health Plans of Virginia, Inc. (Anthem Blue Cross and Blue Shield of Virginia Inc .); Blue Cross and Blue Shield of North Carolina, Inc .; Blue Cross and Blue Shield of Florida, Inc .; Louisiana Health Service & Indemnity Company (Blue Cross and Blue Shield of Louisiana); Blue Cross and Blue Shield of Massachusetts, BCBSM, Inc. (Blue Cross and Blue Shield of Minnesota); Blue Cross and Blue Shield of South Carolina; Blue Cross and Blue Shield of Tennessee, Inc .; Hawaii Medical Service Association (Blue Cross and Blue Shield of Hawaii); Horizon Healthcare Services, Inc. (Horizon Blue Cross and Blue Shield of New Jersey); Wellmark of South Dakota, Inc. (Wellmark Blue Cross and Blue Shield of South Dakota); Wellmark, Inc. (Wellmark Blue Cross and Blue Shield of Iowa); WellPoint, Inc .; Blue Cross & Blue Shield of Rhode Island; Blue Cross and Blue Shield of Vermont; Anthem Holdings Corp. (Anthem Blue Cross and Blue Shield); Anthem Blue Cross Life and Health Insurance Company; Anthem Health 65 3 Plans of Kentucky, Inc .; Anthem Holdings Corp .; Anthem Life Insurance Company; RightChoice Managed Care, Inc .; Healthy Alliance Life Insurance Company; Blue Cross of California; Blue Cross of California Partnership Plan, Inc .; Blue Cross of Southern California; Blue Cross of Northern California; Rocky Mountain Hospital & Medical Service Inc. d / b / a Anthem Blue Cross Blue Shield of Colorado; Rocky Mountain Hospital & Medical Service Inc. d / b / a Anthem Blue Cross Blue Shield of Nevada; Empire BlueCross BlueShield (Empire HealthChoice Assurance, Inc .); Blue Cross Blue Shield of Wisconsin (Anthem Blue Cross Blue Shield of Wisconsin); Community Insurance Company as Anthem Blue Cross Blue Shield of Ohio; Cambia Health Solutions, Inc .; Regence Blue Shield of Idaho; Regence Blue Cross Blue Shield of Utah; Regence Blue Shield (in Washington); Regence Blue Cross Blue Shield of Oregon Kimberly R. West Mark M. Hogewood WALLACE JORDAN RATLIFF & BRANDT, LLC First Commercial Bank Building 800 Shades Creek Parkway, Suite 400 PO Box 530910 Birmingham, AL 35253 205 - 870 - 0555 (fax) 205 - 871 - 7534 kwest @ wallacejordan. com mhogewood @ wallacejordan. com Defendants ' Liaison Counsel Counsel for Defendants, Blue Cross and Blue Shield Association; Health Care Service Corporation, an Illinois Mutual Legal Reserve Company, including its divisions Blue Cross and Blue Shield of Illinois, Blue Cross and Blue Shield of Texas, Blue Cross and Blue Shield of New Mexico and Blue Cross and 66 3 Blue Shield of Oklahoma; HCSC Insurance Services Company; GHS Health Maintenance Organization (Bluelincs HMO); GHS Property and Casualty Insurance Company; Highmark, Inc ., Highmark Blue Cross Blue Shield West Virginia; Highmark Blue Cross and Blue Shield of Delaware; Blue Shield of California; California Physicians ' Service d / b / a Blue Shield of California Carl S. Burkhalter James L. Priester MAYNARD COOPER & GALE PC 1901 Sixth Avenue North 2400 Regions Harbert Plaza Birmingham, AL 35203 205 - 254 - 1000 (fax) 205 - 254 - 1999 cburkhalter @ maynardcooper. com jpriester @ maynardcooper. com Pamela B. Slate Hill Hill Carter Franco Cole & Black, PC 425 S. Perry Street Montgomery, AL 36104 334 - 834 - 7600 (fax) 334 - 386 - 4381 pslate @ hillhillcarter. com Counsel for Defendant, Blue Cross Blue Shield of Alabama 3 Gwendolyn C. Payton Erin M. Wilson LANE POWELL PC 1420 Fifth Avenue, Suite 4200 Seattle, WA 98101 - 2338 206 - 223 - 7000 (fax) 206 - 223 - 7107 paytong @ lanepowell. com wilsonem @ lanepowell. com J. Bentley Owens, III STARNES DAVIS FLORIE LLP 100 Brookwood Place, 7th Floor Birmingham, AL 35259 205 - 868 - 6000 (fax) 205 - 868 - 6099 jbo @ starneslaw. com Counsel for Defendants, Premera Blue Cross Blue Shield of Alaska and Premera Blue Cross of Washington Helen E. Witt Erica B. Zolner Jeffrey J. Zeiger KIRKLAND & ELLIS LLP 300 North LaSalle Street Chicago, IL 60654 312 - 862 - 2000 (fax) 312 - 862 - 2200 hwitt @ kirkland. com erica. zolner @ kirkland. com jzeiger @ kirkland. com Counsel for Defendants, Health Care Service Corporation, including its divisions Blue Cross and Blue Shield of Illinois, Blue Cross and Blue Shield of New Mexico, Blue Cross and Blue Shield of Oklahoma and Blue Cross and Blue Shield of Texas; Caring for Montanans, Inc ., f / k / a Blue Cross and Blue Shield of Montana, Inc .; Highmark Health 68 3 Services, d / b / a Highmark Blue Cross Blue Shield and d / b / a Highmark Blue Shield; Highmark BCBSD Inc. d / b / a Highmark Blue Cross Blue Shield Delaware; Highmark West Virginia Inc. d / b / a Highmark Blue Cross Blue Shield West Virginia H. James Koch ARMBRECHT JACKSON LLP 63 South Royal Street 13th Floor, Riverview Plaza Mobile, AL 36602 251 - 405 - 1300 (fax) 251 - 432 - 6843 hjk @ ajlaw. com Brian K. Norman SHAMOUN & NORMAN LLP 1755 Wittington Place, Suite 200 Dallas, TX 75234 214 - 987 - 1745 (fax) 214 - 521 - 9033 bkn @ snlegal. com Counsel for Defendants, CareFirst of Maryland, Inc. and CareFirst BlueCross BlueShield d / b / a / Group Hospitalization and Medical Services D. Bruce Hoffman Todd M. Stenerson HUNTON & WILLIAMS LLP 2200 Pennsylvania Ave ., NW Washington, DC 20037 202 - 955 - 1500 (fax) 202 - 778 - 2201 bhoffman @ hunton. com tstenerson @ hunton. com Counsel for Defendant, Blue Cross and Blue Shield of Michigan 69 3 R. David Kaufman Cheri D. Green M. Patrick McDowell BRUNINI GRANTHAM GROWER & HEWES PLLC The Pinnacle Building, Suite 100 190 East Capitol Street Jackson, MS 39201 601 - 948 - 3101 (fax) 601 - 960 - 6902 dkaufman @ brunini. com cgreen @ brunini. com pmdowell @ brunini. com Counsel for Defendant, Blue Cross Blue Shield of Mississippi, A Mutual Insurance Company John W. Reis COZEN O ' CONNOR 301 S. College Street, Suite 2100 Charlotte, NC 28202 704 - 376 - 3400 (fax) 704 - 334 - 3351 jreis @ cozen. com Paul K. Leary COZEN O ' CONNOR 1900 Market Street Philadelphia, PA 19103 215 - 665 - 6911 (fax) 215 - 665 - 2013 pleary @ cozen. com Counsel for Defendant, Blue Cross of Northeastern Pennsylvania 3 John D. Briggs Rachel J. Adcox Kenina J. Lee AXINN VELTROP & HARKRIDER LLP 950 F Street, NW 7th Floor Washington, DC 20004 202 - 912 - 4700 (fax) 202 - 912 - 4701 jdb @ avhlaw. com rja @ avhlaw. com kjl @ avhlaw. com Stephen A. Rowe Aaron G. McLeod ADAMS AND REESE LLP 1901 6th Avenue North, Suite 3000 Birmingham, AL 35203 205 - 250 - 5000 (fax) 205 - 250 - 5034 steve. rowe @ arlaw. com aaron. mcleod @ arlaw. com Counsel for Defendant, Independence Blue Cross Pedro Santiago - Rivera Rafael Escalera - Rodriguez REICHARD & ESCALERA 255 Ponce De Leon Ave. MCS Plaza, Tenth Floor San Juan, Puerto Rico 00917 - 1913 787 - 777 - 8888 (fax) 787 - 765 - 4225 santiagopedro @ reichardescalera. com escaleraſ @ reichardescalera. com Counsel for Defendant, Triple S - Salud, Inc. 3 Edward S. Bloomberg PHILLIPS LYTLE LLP 3400 HSBC Center Buffalo, NY 14203 - 2887 716 - 847 - 7096 (fax) 716 - 852 - 6100 ebloomberg @ phillipslytle. com D. Keith Andress BAKER, DONELSON, BEARMAN, CALDWELL & BERKOWITZ, P. C. 420 North 20th Street 1600 Wells Fargo Tower Birmingham, AL 35203 205 - 250 - 8367 (fax) 205 - 488 - 3767 kandress @ bakerdonelson. com Counsel for Defendant, Excellus BlueCross BlueShield of New York Michael A. Naranjo FOLEY & LARDNER LLP 555 California Street, Suite 1700 San Francisco, CA 94104 - 1520 415 - 984 - 9847 (fax) 415 - 434 - 4507 mnaranjo @ foley. com Alan D. Rutenberg FOLEY & LARDNER LLP 3000 K Street, N. W ., Suite 600 Washington, D. C. 20007 - 5109 arutenberg @ foley. com Counsel for Defendant, USAble Mutual Insurance Company, d / b / a Arkansas Blue Cross and Blue Shield 3 John M. Johnson Brian P. Kappel LIGHTFOOT FRANKLIN & WHITE LLC 400 20th Street North Birmingham, AL 35203 205 - 581 - 0716 (fax) 205 - 380 - 9116 jjohnson @ lightfootlaw. com bkappel @ lightfootlaw. com Kathleen Taylor Sooy Tracy A. Roman Andrew D. Kaplan April N. Ross CROWELL AND MORING LLP 1001 Pennsylvania Avenue, NW Washington, DC 20004 202 - 624 - 2500 (fax) 202 - 628 - 5116 ksooy @ crowell. com troman @ crowell. com akaplan @ crowell. com aross @ crowell. com Counsel for Defendants, Blue Cross Blue Shield of Arizona, Blue Cross and Blue Shield of Kansas City, Blue Cross and Blue Shield of Kansas, Inc ., Blue Cross and Blue Shield of Nebraska, Blue Cross of Idaho Health Services, Inc ., Blue Cross Blue Shield of North Dakota, Blue Cross Blue Shield of Wyoming, and HealthNow New York Inc. 3 Mary C. St. John Charles L. Sweeris Law Department BLUE SHIELD OF CALIFORNIA 50 Beale St. San Francisco, CA 94105 Telephone: (415) 229 - 5107 Fax: (415) 229 - 5343 charles. sweeris (@ blueshieldca. com marcy. stjohn @ blueshieldca. com Counsel for Defendant, California Physicians ' Service d / b / a Blue Shield of California Robert K. Spotswood Michael T. Sansbury Joshua K. Payne SPOTSWOOD SANSOM & SANSBURY LLC One Federal Place 1819 Fifth Avenue North, Suite 1050 Birmingham, Alabama 35203 Telephone: (205) 986 - 3620 FAX: (205) 986 - 3639 rks @ spotswoodllc. com msansbury @ spotswoodllc. com jpayne @ spotswoodllc. com Counsel for Defendant, Capital Blue Cross 3 CERTIFICATE OF SERVICE I hereby certify that on September 30, 2013, the foregoing was electronically filed with the Clerk of Court using the CM / ECF system which will send notification of such filing to all counsel of record. / s / Craig A. Hoover Craig A. Hoover

MOTION to Dismiss BlueCross BlueShield of South Carolina and Blue Cross and Blue Shield Association to Dismiss the Claims of Plaintiff Shred 360,LLC by Defendants' Counsel. Modified on 10/3/2013

FILED 2013 Sep-30 PM 04: 36 U. S. DISTRICT COURT N. D. OF ALABAMA IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ALABAMA SOUTHERN DIVISION Master File No. 2: 13-CV-20000-RDP IN RE: BLUE CROSS BLUE SHIELD) ANTITRUST LITIGATION MDL No. 2406)) This document relates to all cases. MOTION OF BLUECROSS BLUESHIELD OF SOUTH CAROLINA AND BLUE CROSS AND BLUE SHIELD ASSOCIATION TO DISMISS THE CLAIMS OF PLAINTIFF SHRED 360, LLC For the reasons set forth in the attached memorandum, plaintiff Shred 360, LLC (" Shred 360®) is, at most, an indirect purchaser and lacks standing to seek damages for the premiums charged to actual subscribers of BlueCross BlueShield of South Carolina (BCBSSC "). Therefore, Defendants BCBSSC and Blue Cross and Blue Shield Association (BCBSA ") respectfully request that the Court dismiss plaintiff Shred 360's claims (Counts 89, 90, 91, and 92) in the Consolidated Amended Subscriber Complaint (Complaint) with prejudice pursuant to Federal Rule of Civil Procedure 12 (b) (6). Furthermore, Defendants respectfully request that the Court strike the allegations pertaining to the South Carolina damages class from the Complaint pursuant to Rules 12 (t) and 23 (d) 1) (D) of the Federal Rules of Civil Procedure (paragraphs 41 and 292). Dated: September 30, 2013 Respectfully submitted, Is/Craig A. Hoover Craig A. Hoover J. Robert Robertson E. Desmond Hogan HOGAN LOVELLS US LLP Columbia Square 555 Thirteenth Street, NW Washington, DC 20004 202-637-5600 (fax) 202-637-5910 craig. hoover@hoganlovells.com robby robertson@hoganlovells.com desmond. hogan@hoganlovells.com Emily M. Yinger N. Thomas Connally, III HOGAN LOVELLS US LLP Park Place II 7930 Jones Branch Drive, Ninth Floor McLean, VA 22102 703-610-6100 (fax) 703-610-6200 emily. уinger@hoganlovells.com tom. connally@hoganlovells.com Counsel for Defendant BlueCross BlueShield of South Carolina Is/David J. Zott, P. C. David J. Zott, P. C. Daniel E. Laytin, P. C. KIRKLAND & ELLIS LLP 300 North LaSalle Chicago, IL 60654 312-862-2000 (fax) 312-862-2200 daniel. laytin@kirkland.com david. zott@kirkland.com Ian R. Conner KIRKLAND & ELLIS LLP 655 Fifteenth Street, NW Washington, DC 20005 202-879-5000 (fax) 202-879-5200 ian. conner@kirkland.com Counsel for Defendant Blue Cross and Blue Shield Association CERTIFICATE OF SERVICE I hereby certify that on September 30, 2013, the foregoing was electronically filed with the Clerk of Court using the CM/ECF system which will send notification of such filing to all counsel of record. Is/Craig A. Hoover Craig A. Hoover

MOTION to Dismiss by Plaintiffs' Counsel.

FILED 2013 Sep-30 PM 04:56 U.S. DISTRICT COURT N.D. OF ALABAMA UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ALABAMA SOUTHERN DIVISION}}} IN RE: BLUE CROSS BLUE SHIELD} ANTITRUST LITIGATION} Master File No.: 2:13-CV-20000-RDP (MDL No.: 2406)}} This document relates to all cases.}} MOTION TO DISMISS COMES NOW, Arthur L. Joiner, Plaintiff in the above-referenced case, by and through the undersigned attorney and hereby moves for the dismissal of his claims without prejudice from the above-referenced matter. This Motion to Dismiss is effective only as to Arthur L. Joiner’s individual claims against the named Defendants. WHEREFORE, PREMISES CONSIDERED, the undersigned requests this Court enter an Order dismissing Arthur L. Joiner’s claims without prejudice. Respectfully submitted this the 30th day of September, 2013./s/Rebekah Keith McKinney Rebekah Keith McKinney (ASB-3137-T-64-J) Watson McKinney, LLP 203 Greene Street Huntsville, AL 35801 (256) 536-7423 Phone (256) 536-2689 Fax CERTIFICATE OF SERVICE I, hereby certify that on this, the 30th day of September, 2013, I filed the foregoing with the Clerk of Court using the Case Management/Electronic Case Filing (CM/ECF) system, which will send notification of such filing to all those parties of record who are registered for electronic filing, and further certify that those parties of record, or their attorneys, who are not registered for electronic filing have been served by sending this date, a copy of same by first class U. S. Mail, postage pre-paid and properly addressed to them./s/Rebekah Keith McKinney Rebekah Keith McKinney 2

Brief re {{108}} MOTION to Dismiss.

Case 2:13-cv-20000-RDP Document 120 Filed 09/30/13 Page 1 of 81 FILED 2013 Sep-30 PM 05:12 U.S. DISTRICT COURT N.D. OF ALABAMA IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ALABAMA SOUTHERN DIVISION IN RE: BLUE CROSS BLUE SHIELD) Master File No. 2:13-CV-20000-RDP ANTITRUST LITIGATION) (MDL No. 2406)) This document relates to all cases. BRIEF IN SUPPORT OF DEFENDANTS’ MOTION TO DISMISS PLAINTIFFS’ ANTITRUST CONSPIRACY CLAIMS Dated: September 30, 2013 Case 2:13-cv-20000-RDP Document 120 Filed 09/30/13 Page 2 of 81 TABLE OF CONTENTS Page TABLE OF AUTHORITIES...................................................................................................... iii Introduction....................................................................................................................................1 Background....................................................................................................................................5 I. The Parties..........................................................................................................................5 II. From Their Inception, Blue Plans Developed to Serve Local Communities................5 III. The American Hospital Association and the American Medical Association Confer Approval on Blue Plans........................................................................................7 IV. Blue Plans Become a Nationwide Product.....................................................................11 V. License Agreements Recognize Existing Trademark Rights and Service Areas..................................................................................................................................12 VI. All Three Branches of Government Have Reviewed the Blue System........................16 Legal Standard.............................................................................................................................18 Argument......................................................................................................................................18 I. Plaintiffs Fail to Allege an Agreement to Do an Unlawful Act....................................20 A. Blue Plans’ Service Areas Arise from Common-Law Trademark Rights....................................................................................................................21 B. The License Agreements Cannot Constitute an Illegal Agreement Because They Merely Confirmed Defendants’ Pre-Existing Trademark Rights................................................................................................22 C. Service Areas Would Continue to Exist Even Without the License Agreements...........................................................................................................24 II. Plaintiffs Cannot State a Per Se Claim..........................................................................24 A. Plaintiffs’ Alleged "Market Allocation Conspiracy" Does Not State a Per Se Claim.........................................................................................................25 B. The BlueCard Conspiracy Allegations Do Not State a Per Se Claim.............41 i Case 2:13-cv-20000-RDP Document 120 Filed 09/30/13 Page 3 of 81 TABLE OF CONTENTS (Con’t.) Page III. Subscriber Plaintiffs Fail to State a Rule of Reason Claim.........................................44 A. Subscriber Plaintiffs Have Not Adequately Alleged an Anticompetitive Effect.........................................................................................44 B. Subscriber Plaintiffs Do Not Sufficiently Allege Relevant Markets...............46 C. Subscriber Plaintiffs Have Not Adequately Alleged Market Power...............52 IV. The McCarran-Ferguson Act Bars Plaintiffs’ Claims.................................................54 A. Blue Plans’ Service Areas Constitute the "Business of Insurance."...............55 B. The Blues Are Subject to Extensive State Regulation......................................58 V. The Filed Rate Doctrine Bars Certain Subscriber Plaintiffs’ Claims.........................59 CONCLUSION............................................................................................................................59 ii Case 2:13-cv-20000-RDP Document 120 Filed 09/30/13 Page 4 of 81 TABLE OF AUTHORITIES Page(s) Cases 49er Chevrolet, Inc. v. Gen. Motors Corp., 803 F.2d 1463 (9th Cir. 1986)................................................................................................... 22 All Care Nursing Serv., Inc. v. High Tech Staffing Servs., Inc., 135 F.3d 740 (11th Cir. 1998)................................................................................................... 43 Allard Enters. v. Advanced Programming Res., 249 F.3d 564 (6th Cir. 2001)..................................................................................................... 21 Am. Key Corp. v. Cole Nat’l Corp., 762 F.2d 1569 (11th Cir. 1985)................................................................................................. 50 Am. Needle v. Nat’l Football League, 130 S. Ct. 2201 (2010)....................................................................................................... passim Am. Tobacco Co. v. United States, 328 U.S. 781 (1946).................................................................................................................. 20 Apani Sw., Inc. v. Coca-Cola Enters., Inc., 300 F.3d 620 (5th Cir. 2002)..................................................................................................... 50 Ashcroft v. Iqbal, 556 U.S. 662 (2009)............................................................................................................ 27, 42 Augusta News Co. v. Hudson News Co., 269 F.3d 41 (1st Cir. 2001)..................................................................................... 29, 31, 37, 40 B.H. Bunn Co. v. AAA Replacement Parts Co., 451 F.2d 1254 (5th Cir. 1971)................................................................................................... 34 Bailey v. Allgas, Inc., 284 F.3d 1237 (11th Cir. 2002)................................................................................................. 50 Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007)............................................................................................... 10, 18, 45, 49 Blue Cross & Blue Shield Ass’n v. Grp. Hosp. & Med. Servs., 744 F. Supp. 700 (E.D. Va. 1990)................................................................................. 17, 18, 39 Blue Cross & Blue Shield of Wisconsin v. Marshfield Clinic, 65 F.3d 1406 (7th Cir. 1995)..................................................................................................... 54 iii Case 2:13-cv-20000-RDP Document 120 Filed 09/30/13 Page 5 of 81 TABLE OF AUTHORITIES (Con’t.) Page(s) Broadcast Music, Inc. v. CBS, 441 U.S. 1 (1979)............................................................................................................... passim Brooks v. Blue Cross & Blue Shield of Fla., Inc., 116 F.3d 1364 (11th Cir. 1997)................................................................................................. 13 Bus. Elec. Corp. v. Sharp Elec. Corp., 485 U.S. 717 (1988)............................................................................................................ 27, 38 Cal. Dental Ass’n v. FTC, 526 U.S. 756 (1999).................................................................................................................. 28 Cent. Benefits Mut. Ins. Co. v. Blue Cross & Blue Shield Ass’n, 711 F. Supp. 1423 (S.D. Ohio 1989)................................................................................... 18, 39 Cha-Car, Inc. v. Calder Race Course, Inc., 752 F.2d 609 (11th Cir. 1985)................................................................................................... 28 Continental T.V., Inc. v. GTE Sylvania Inc., 433 U.S. 36 (1977).............................................................................................................. 35, 36 Crystal Entm’t & Filmworks, Inc. v. Jurado, 643 F.3d 1313 (11th Cir. 2011)........................................................................................... 21, 35 DeLong Equip. Co. v. Wash. Mills Abrasive Co., 887 F.2d 1499 (11th Cir. 1989)................................................................................................. 26 Drew Estate Holding Co. v. Fantasia Distrib., Inc., No. 11-21900, 2012 WL 234105 (S.D. Fla. Jan. 24, 2012)...................................................... 12 E&L Consulting Ltd. v. Doman Indus. Ltd., 472 F.3d 23 (2d Cir. 2006)........................................................................................................ 38 Emergency One, Inc. v. Am. Fire Eagle Engine Co., Inc., 332 F.3d 264 (4th Cir. 2003)..................................................................................................... 22 Feinstein v. Nettleship Co. of Los Angeles, 714 F.2d 928 (9th Cir. 1983)..................................................................................................... 57 FTC v. Actavis, Inc., 133 S. Ct. 2223 (2013).................................................................................................. 33, 37, 40 Fuddruckers, Inc. v. Fudpucker’s, Inc., 436 F. Supp. 2d 1260 (N.D. Fla. 2006)..................................................................................... 23 iv Case 2:13-cv-20000-RDP Document 120 Filed 09/30/13 Page 6 of 81 TABLE OF AUTHORITIES (Con’t.) Page(s) Funeral Consumers Alliance, Inc. v. Serv. Corp. Int’l, 695 F.3d 330 (5th Cir. 2012)..................................................................................................... 51 Generac Corp. v. Caterpillar Inc., 172 F.3d 971 (7th Cir. 1999)............................................................................................... 33, 40 Gilchrist v. State Farm Mut. Auto. Ins. Co., 390 F.3d 1327 (11th Cir. 2004)..................................................................................... 55, 56, 58 Grp. Hosp. & Med. Servs., Inc. v. Blue Cross & Blue Shield Ass’n, 1 U.S.P.Q.2d 1893 (D.C. Super. Sept. 26, 1986)...................................................................... 18 Grp. Hosp. & Med. Servs., Inc. v. Blue Cross & Blue Shield of Nat’l Capital Area, Inc., 819 F.2d 1138, 1987 WL 36076 (4th Cir. 1987)....................................................................... 17 Grp. Hosp. & Med. Servs., Inc. v. Blue Cross & Blue Shield of Va., No. 85-1123-A (E.D. Va. Apr. 8, 1986).............................................................................. 18, 39 Grp. Life & Health Ins. Co. v. Royal Drug Co., 440 U.S. 205 (1979).................................................................................................................. 56 Gulf States Reorganization Grp., Inc. v. Nucor Corp., 822 F. Supp. 2d 1201 (N.D. Ala. 2011).............................................................................. 20, 22 Hicks v. City of Alabaster, Ala., No. 2:11-cv-4107, 2013 WL 988874 (N.D. Ala. Mar. 12, 2013)............................................... 6 Home Box Office, Inc. v. FCC, 587 F.2d 1248 (D.C. Cir. 1978)................................................................................................ 38 Hood v. Tenneco Tex. Life Ins. Co., 739 F.2d 1012 (5th Cir. 1984)............................................................................................. 53, 54 Hope v. Pelzer, 240 F.3d 975 (11th Cir. 2001)..................................................................................................... 6 Huber Baking Co. v. Stroehmann Bros. Co., 252 F.2d 945 (2d Cir. 1958)...................................................................................................... 22 Imaging Ctr., Inc. v. W. Md. Health Sys., Inc., 158 Fed. Appx. 413 (4th Cir. 2005).......................................................................................... 19 In re Sulfuric Acid Antitrust Litig., 703 F.3d 1004 (7th Cir. 2012)........................................................................... 25, 27, 28, 29, 40 v Case 2:13-cv-20000-RDP Document 120 Filed 09/30/13 Page 7 of 81 TABLE OF AUTHORITIES (Con’t.) Page(s) Int’l Cosmetics Exch., Inc. v. Gapardis Health & Beauty, Inc., 303 F.3d 1242 (11th Cir. 2002)................................................................................................. 24 Jacobs v. Tempur-Pedic Int’l, Inc., 626 F.3d 1327 (11th Cir. 2010).......................................................................................... passim Jefferson Parish Hosp. Dist. No. 2 v. Hyde, 466 U.S. 2 (1984)...................................................................................................................... 52 Kartell v. Blue Shield of Mass., 749 F.2d 922 (1st Cir. 1984)..................................................................................................... 43 Keller v. Greater Augusta Ass’n of Realtors, Inc., 760 F. Supp. 2d 1373 (S.D. Ga. 2011).......................................................................... 44, 45, 46 L.A. Draper & Son v. Wheelabrator-Frye, Inc., 735 F.2d 414 (11th Cir. 1984)................................................................................................... 38 Leegin Creative Leather Prods., Inc. v. PSKS, Inc., 551 U.S. 877 (2007)........................................................................................................... passim Levine v. Cent. Fla. Med. Affiliates, Inc., 72 F.3d 1538 (11th Cir. 1996)................................................................................. 19, 38, 44, 52 Little Rock Cardiology Clinic, P.A. v. Baptist Health, 573 F. Supp. 2d 1125 (E.D. Ark. 2008).............................................................................. 50, 51 Lone Star Steakhouse & Saloon, Inc. v. Longhorn Steaks, Inc., 106 F.3d 355 (11th Cir. 1997)................................................................................................... 23 Major League Baseball Props., Inc. v. Salvino, Inc., 542 F.3d 290 (2d Cir. 2008)...................................................................................................... 34 Maryland v. Blue Cross & Blue Shield Association, 620 F. Supp. 907 (D. Md. 1985)............................................................................................... 58 Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574 (1986).................................................................................................................. 54 Midwestern Mach. Co., Inc. v. Nw. Airlines, 392 F.3d 265 (8th Cir. 2004)..................................................................................................... 21 Midwestern Waffles, Inc. v. Waffle House, Inc., 734 F.2d 705 (11th Cir. 1984)................................................................................................... 35 vi Case 2:13-cv-20000-RDP Document 120 Filed 09/30/13 Page 8 of 81 TABLE OF AUTHORITIES (Con’t.) Page(s) Moecker v. Honeywell Int’l Inc., 144 F. Supp. 2d 1291 (M.D. Fla. 2001).................................................................................... 53 Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752 (1984).................................................................................................................. 20 Nat’l Bancard Corp. v. VISA U.S.A. Inc., 596 F. Supp. 1231 (S.D. Fla. 1984)........................................................................................... 53 Nat’l Bancard Corp. v. VISA U.S.A. Inc., 779 F.2d 592 (11th Cir. 1986)............................................................................................. 31, 40 Nat’l Colleg. Athletic Ass’n v. Bd. of Regents of Univ. of Okla., 468 U.S. 85 (1984)........................................................................................................ 30, 36, 43 Newcal Indus., Inc. v. Ikon Office Solution, 513 F.3d 1038 (9th Cir. 2008)................................................................................................... 47 Nw. Wholesale Stationers, Inc. v. Pac. Stationery & Printing Co., 472 U.S. 284 (1985)................................................................................................ 32, 36, 40, 43 Ocean State Physicians Health Plan v. Blue Cross, 883 F.2d 1101 (1st Cir. 1999)............................................................................................. 57, 58 Owens v. Aetna Life & Cas. Co., 654 F.2d 218 (3d Cir. 1981)...................................................................................................... 58 Polk Bros., Inc. v. Forest City Enterprs., Inc., 776 F.2d 185 (7th Cir. 1985).............................................................................................. passim Poster Exch., Inc. v. Nat’l Screen Serv. Corp., 517 F.2d 117 (5th Cir. 1975)..................................................................................................... 21 Powderly v. Blue Cross & Blue Shield of N.C., No. 3:08-cv-109 (W.D.N.C. Aug. 21, 2008)................................................................. 17, 43, 44 PSKS, Inc. v. Leegin Creative Leather Prods., Inc., 615 F.3d 412 (5th Cir. 2010)..................................................................................................... 46 Qualitex Co. v. Jacobson Prods. Co., Inc., 514 U.S. 159 (1995).................................................................................................................. 33 Re/Max Int’l, Inc. v. Realty One, Inc., 173 F.3d 995 (6th Cir. 1999)..................................................................................................... 51 vii Case 2:13-cv-20000-RDP Document 120 Filed 09/30/13 Page 9 of 81 TABLE OF AUTHORITIES (Con’t.) Page(s) Retina Assocs., P.A. v. S. Baptist Hosp., 105 F.3d 1376 (11th Cir. 1997)..................................................................................... 19, 20, 52 Robertson v. Sea Pines Real Estate Co., 679 F.3d 278 (4th Cir. 2012)..................................................................................................... 25 Rothery Storage & Van Co. v. Atlas Van Lines, Inc., 792 F.2d 210 (D.C. Cir. 1986)...................................................................................... 32, 38, 40 Seacoast Motors of Salisbury, Inc. v. DaimlerChrysler Motors Corp., 271 F.3d 6 (1st Cir. 2001)......................................................................................................... 38 SEC v. Nat’l Sec., Inc., 393 U.S. 453 (1969).................................................................................................................. 55 Slagle v. ITT Hartford Ins. Group, 904 F. Supp. 1346 (N.D. Fla. 1995).............................................................................. 55, 56, 59 Smith v. Jefferson Pilot Life Ins. Co., 14 F.3d 562 (11th Cir. 1994)..................................................................................................... 56 State Oil Co. v. Khan, 522 U.S. 3 (1997)................................................................................................................ 25, 36 Tally-Ho, Inc. v. Coast Cmty. Coll. Dist., 889 F.2d 1018 (11th Cir. 1989)................................................................................................. 22 Tampa Elec. Co. v. Nashville Coal Co., 365 U.S. 320 (1961).................................................................................................................. 49 Tana v. Dantanna’s, 611 F.3d 767 (11th Cir. 2010)................................................................................................... 22 Texaco, Inc. v. Dagher, 547 U.S. 1 (2006).......................................................................................................... 25, 26, 27 Total Benefits Planning Agency, Inc. v. Anthem Blue Cross & Blue Shield, 552 F.3d 430 (6th Cir. 2008)............................................................................................... 25, 47 U.S. Anchor Mfg., Inc. v. Rule Indus., Inc., 7 F.3d 986 (11th Cir. 1993)..................................................................................... 46, 47, 48, 49 U.S. Healthcare, Inc. v. Healthsource, Inc., 986 F.2d 589 (1st Cir. 1993)..................................................................................................... 52 viii Case 2:13-cv-20000-RDP Document 120 Filed 09/30/13 Page 10 of 81 TABLE OF AUTHORITIES (Con’t.) Page(s) Uniforce Temp. Pers., Inc. v. Nat’l Council on Comp. Ins. Inc., 87 F.3d 1296 (11th Cir. 1996)................................................................................................... 55 Union Labor Life Ins. Co. v. Pireno, 458 U.S. 119 (1982).................................................................................................................. 55 United States v. Conn. Nat’l Bank, 418 U.S. 656 (1974).................................................................................................................. 51 United States v. E.I. du Pont de Nemours & Co., 351 U.S. 377 (1956).................................................................................................................. 46 United States v. Grinnell Corp., 384 U.S. 563 (1966).................................................................................................................. 19 United States v. Sealy, 388 U.S. 350 (1967)............................................................................................................ 35, 36 United States v. Topco Associates, Inc., 405 U.S. 596 (1972)............................................................................................................ 35, 36 UNR Indus., Inc. v. Cont’l Ins., Co., 607 F. Supp. 855 (N.D. Ill. 1984)............................................................................................. 56 VMG Enters., Inc. v. F. Quesada & Franco, Inc., 788 F. Supp. 648 (D.P.R. 1992)................................................................................................ 23 Washington v. Nat’l Football League, 880 F. Supp. 2d 1004 (D. Minn. 2012)..................................................................................... 20 White Motor Co. v. United States, 372 U.S. 253 (1963).................................................................................................................. 38 Williams v. Columbus Bar Ass’n, No. 1:12-cv-04382, 2013 WL 1963822 (N.D. Ga. May 8, 2013)............................................. 12 Wis. Interscholastic Athletic Ass’n v. Gannett Co., 658 F.3d 614 (7th Cir. 2011)..................................................................................................... 38 ZF Meritor, LLC v. Eaton Corp., 696 F.3d 254 (3d Cir. 2012)...................................................................................................... 29 Statutes 15 U.S.C. § 1012(b).......................................................................................................... 54, 55, 58 ix Case 2:13-cv-20000-RDP Document 120 Filed 09/30/13 Page 11 of 81 TABLE OF AUTHORITIES (Con’t.) Page(s) 15 U.S.C. § 1013(a)–(b)................................................................................................................ 54 15 U.S.C. § 1052(d)...................................................................................................................... 12 15 U.S.C. § 1053........................................................................................................................... 12 15 U.S.C. § 1065........................................................................................................................... 12 15 U.S.C. § 1127........................................................................................................................... 12 15 U.S.C. § 15(b).......................................................................................................................... 21 42 U.S.C. § 18024(b)(2)............................................................................................................... 49 5 U.S.C. § 8901............................................................................................................................. 30 ALA. CODE § 10A-20-6.10............................................................................................................ 59 ALA. CODE § 27-52-21.................................................................................................................. 49 ALA. CODE §10A-20-6.11............................................................................................................. 59 CAL. BUS. & PROF. CODE § 511.3................................................................................................. 43 CAL. BUS. & PROF. CODE § 511.4................................................................................................. 43 Other Authorities Benjamin Klein, Single Entity Analysis of Joint Ventures after American Needle: An Economic Perspective, 78 Antitrust L.J. 669 (2013)................................................................................. 37 H.R. REP. NO. 105-374 (1997)...................................................................................................... 31 Herbert Hovenkamp & Christopher R. Leslie, The Firm As Cartel Manager, 64 Vand. L. Rev. 813 (2011)................................................................................................................................. 37 U.S. Dept. of Justice and FTC, Antitrust Guidelines for the Licensing of Intellectual Property (Apr. 6, 1995)............................................................................................................................ 32 Rules Fed. R. Civ. P. 8(a)(2)................................................................................................................... 18 Federal Rule of Evidence 201....................................................................................................... 10 x Case 2:13-cv-20000-RDP Document 120 Filed 09/30/13 Page 12 of 81 TABLE OF AUTHORITIES (Con’t.) Page(s) Treatises 58 C.J.S. Monopolies § 70 (2013)................................................................................................. 19 xi Case 2:13-cv-20000-RDP Document 120 Filed 09/30/13 Page 13 of 81 INTRODUCTION Blue Plan service areas are the bedrock of the Blue System. They have existed for more than half a century. They create a unique product by allowing Blue Plans to compete like a nationally integrated health insurer, while still preserving each Plan’s historic focus on meeting the health financing needs of its local community. They have been scrutinized by Congress, the courts, the Federal Trade Commission, and the Department of Justice. Despite this lengthy history, plaintiffs now claim that service areas are not only illegal, but per se unlawful. Specifically, they claim that the license agreements between BCBSA and each Blue Plan, by creating service areas, amount to illegal agreements that this Court should summarily condemn—without any analysis of their storied history, purpose, or competitive effect. Plaintiffs’ complaints fail at the threshold because the license agreements did not create service areas. As plaintiffs’ complaints concede, Blue Plans originated with hospitals and doctors—the very providers now crying foul—when local hospital and medical associations formed Blue Plans during the Depression to meet the health financing needs of their local communities. Long before the BCBSA license agreements came into existence, most Blue Plans had acquired Blue Cross or Blue Shield trademarks that conferred on each Plan the right to local geographic exclusivity. Later, Blue Plans pooled their resources to compete with nationally integrated insurers—exactly the kind of procompetitive activity that the antitrust laws promote. The success of the Blue System today is a testament to the benefits of its community-focused structure and national network. The 37 Blue Plans collectively provide health insurance coverage to 100 million (or nearly one in three) Americans in all 50 states, the District of Columbia, and Puerto Rico. Plaintiffs’ attempt to turn the antitrust laws on their head fails for multiple reasons. First, plaintiffs cannot state a claim because the license agreements they challenge cannot constitute an Case 2:13-cv-20000-RDP Document 120 Filed 09/30/13 Page 14 of 81 unlawful agreement to restrict Blue-on-Blue competition. Put simply, the license agreements do not restrain trade. Instead, the license agreements adopt Plans’ pre-existing rights to local geographic exclusivity acquired either independently by operation of trademark law, or vertically through lawful licenses from the American Hospital Association (AHA) or the American Medical Association (AMA). Striking down the license agreements would not create any more Blue-on-Blue competition than exists today. Second, plaintiffs cannot shoehorn their claims into the ever-narrowing per se rule. That rule is reserved for a shrinking slice of restraints that (i) result from an agreement among direct (i.e., "horizontal") competitors; (ii) have no plausible procompetitive justifications; and (iii) can be condemned without analysis by virtue of long judicial experience. Plaintiffs’ allegations do not meet any of these requirements. Their own recital of the Blues’ history confirms that the license agreements did not arise horizontally. That alone precludes application of the per se rule. In any event, under modern Supreme Court precedent, even a horizontal agreement with plausible procompetitive justifications must be evaluated under the rule of reason. The procompetitive benefits of service areas are evident here. As even plaintiffs concede, service areas enabled Blue Plans to form a national competitor that could go head-to-head against other insurers. Service areas also strengthen the Blue brand, prevent free-riding, and avoid consumer confusion, and any restraint is ancillary to these procompetitive benefits. Finally, judicial experience has favored, not condemned, the service areas at issue. The provider plaintiffs’ challenge to the BlueCard program as a per se illegal price-fixing agreement—which the subscriber plaintiffs do not join—fares no better. BlueCard allows subscribers of one Plan to receive treatment across the country through other Blue Plans’ provider networks. Plaintiffs’ allegations do not describe price fixing. They merely reflect a –2– Case 2:13-cv-20000-RDP Document 120 Filed 09/30/13 Page 15 of 81 subscriber of one Blue Plan getting the benefit of rates negotiated by another Blue Plan with providers in its service area. The most that plaintiffs can allege is that BlueCard is a lawful joint-purchasing agreement, which benefits consumers. That is lawful, not per se illegal. Third, the subscriber plaintiffs’ fallback rule of reason claim also fails. In purely conclusory fashion, they allege that without the license agreements’ territorial restraints, there would be robust Blue-on-Blue competition, and subscriber premiums would drop. But they allege no facts to support their vision of this "but for" world, and they ignore facts that directly undercut it. Most notably, as a matter of well-settled trademark law, each Blue Plan’s individual trademark rights in its area would continue to prevent Blue-on-Blue competition even without the licenses. The subscriber plaintiffs also do not allege, as required, why competition from existing insurers is not sufficient to ensure competitive markets. The subscriber plaintiffs try to camouflage these inadequacies by invoking antitrust labels about purported market power in alleged markets. Plaintiffs’ market definitions, however, are arbitrary and contrary to law. Plaintiffs make a basic legal error by defining their product market in terms of consumers—"individuals and small groups (up to 199 people)" that purchased full-service commercial health insurance—rather than in terms of reasonably interchangeable products. The subscriber plaintiffs’ geographic markets also have no legal basis. Plaintiffs posit a dizzying menu of more than 900 "possible" geographic markets, including states, service areas, metropolitan statistical areas, micropolitan statistical areas, and counties. This conflicting array of political, statutory, and statistical boundaries bears no relationship to health insurance usage— the relevant legal inquiry in defining a proper market here. And, with respect to market power, the subscriber plaintiffs do not allege for many areas either any market share or a market share that meets the legal threshold for inferring market power. In any event, because entry into health –3– Case 2:13-cv-20000-RDP Document 120 Filed 09/30/13 Page 16 of 81 financing is relatively easy, any attempt to charge supra-competitive prices quickly would be defeated by other competitors, even in areas where plaintiffs allege a high market share. Finally, plaintiffs’ challenges to the license agreements are barred by the McCarran-Ferguson Act and the filed rate doctrine. McCarran exempts the "business of insurance" from the reach of federal antitrust laws. Plaintiffs’ claims challenge the business of insurance and are subject to state regulation, warranting dismissal under McCarran. And as explained in the concurrently-filed Supplemental Brief in Support of Defendants’ Motion to Dismiss (the "Plan Brief"), which addresses other, independent grounds for dismissal of the subscribers’ complaint, the filed rate doctrine precludes certain subscriber plaintiffs’ claims where they paid only rates that were filed with state regulators, meaning that they cannot establish any legally cognizable injury. For these reasons, plaintiffs’ antitrust conspiracy challenges to the Blue System’s license agreements and service areas in the subscriber plaintiffs’ complaint (Counts 1 and 2, brought under the Sherman Act, and other Sherman Act and state-law analog claims1) and both counts of the provider plaintiffs’ complaint fail to state a claim. Because plaintiffs’ remaining claims fail as well, including for the reasons set forth in the Plan Brief, the Court should dismiss the provider and subscriber complaints in their entirety, with prejudice.2 1 Counts 3–8, 10–15, 18–29, 31–36, 38–48, 50–53, 55–60, 62–67, 69, 71–73, 76, 80–87, 89, 91–92, 94–97, and 99–104. 2 The Court also lacks personal jurisdiction over, and venue is improper as to, certain defendants who have not been sued in their home states and who lack sufficient minimum contacts with the jurisdictions where they have been sued. These defendants are simultaneously filing motions to dismiss for lack of personal jurisdiction and improper venue and join this motion without waiving these defenses. –4– Case 2:13-cv-20000-RDP Document 120 Filed 09/30/13 Page 17 of 81 BACKGROUND3 I. The Parties BCBSA is a not-for-profit corporation that owns the rights to the familiar Blue Cross and Blue Shield trademarks (collectively, the "Blue Marks"). (Sub. Compl. ¶¶ 46, 321–24.)4 BCBSA does not underwrite health insurance itself. Rather, BCBSA licenses the Blue Marks to Blue Plans, which are individual "health insurance plans that operate under the Blue Cross and Blue Shield trademarks and trade names." (Id. ¶ 46.) Subscriber plaintiffs are 29 individuals and entities from 17 states. They each claim to have bought insurance from a Blue Plan in their home state. (Id. ¶¶ 16–44.) Provider plaintiffs are 16 individuals and entities from 10 states that claim to have provided healthcare services, equipment, supplies, or facilities to patients insured by a Blue Plan. (Prov. Compl. ¶¶ 15–30.) II. From Their Inception, Blue Plans Developed to Serve Local Communities. The current Blue Plans and BCBSA (collectively, the "Blue System") began almost 80 years ago. In the 1930s, hospitals created the Blue Cross Plans, and local medical societies started the Blue Shield Plans shortly thereafter. (Sub. Compl. ¶¶ 306, 312–13.) Hospitals developed prepaid health insurance plans because of their financial predicament during the Depression—decreasing income from paying patients and increasing demands for free care. (Ex. 1, Louis S. Reed, "Blue Cross and Medical Service Plans," U.S. 3 Although defendants dispute various allegations in plaintiffs’ complaints and vigorously deny any legal violations, for purposes of the motion to dismiss, plaintiffs’ well-pled factual allegations are taken as true. 4 References to the Subscriber Complaint reflect the paragraph numbering set forth in the "Errata to Subscriber Track Consolidated Class Action Complaint." See Sept. 6, 2013 Notice by Plaintiffs’ Counsel. (Dkt. No. 99.) –5– Case 2:13-cv-20000-RDP Document 120 Filed 09/30/13 Page 18 of 81 Public Health Service 13 (Oct. 1947) ("1947 USPHS Report").)5 This led hospitals across the country to look for innovative ways to keep their businesses afloat. (Id.) Baylor Hospital developed the first program of prepaid hospital care. (Id. 9–10.) Soon other Dallas hospitals formed their own prepaid plans. The drawbacks of having multiple plans in a single area became apparent almost immediately. By definition, each plan provided benefits only for services provided at its own hospital. As the U.S. Surgeon General’s report explained, it was "better for all the hospitals of a community to get together and jointly offer a plan. In this way … subscribers would retain freedom of choice as to the hospital they desired." (Id. 10.) Emerging plans built upon this experience. Rather than confine services to a single facility, the hospitals—one set of the provider plaintiffs here—formed plans that sought to include all hospitals in the area to allow patients and doctors to freely choose the most appropriate facility. (Id. 10–11.) The net effect was that hospitals in a community joined to offer a single plan to cover that community. (Id.) In 1934, the Blue Cross symbol was first developed by a hospital plan in St. Paul, Minnesota. The symbol proliferated across the country as other Plans began using it. (Sub. Compl. ¶ 306.) Often, state enabling acts were required to create a Blue Cross Plan. (Ex. 1, 1947 USPHS Report 11–12, 72–80.) Most enabling acts required the state’s insurance department to approve 5 In 1943, the Surgeon General sent an investigator to survey the Blue System, resulting in a government report that "covered all aspects necessary for a proper understanding of the plan and its operation." (Ex. 1, 1947 USPHS Report 6–8.) Such records and reports are judicially noticeable and are properly considered on a motion to dismiss. See, e.g., Hope v. Pelzer, 240 F.3d 975, 979 n.8 (11th Cir. 2001) (taking judicial notice of Department of Justice report), overruled on other grounds by 536 U.S. 730, 744–45 (2002) (observing with approval that appellate court relied on DOJ report); see also Hicks v. City of Alabaster, Ala., No. 2:11-cv-4107, 2013 WL 988874, at *7 n.5 (N.D. Ala. Mar. 12, 2013) (Proctor, J.) (taking judicial notice "of the contents of relevant public records"). Defendants have attached excerpts of this report as an exhibit, and can provide the Court with a full copy of this exhibit (or any other excerpted exhibit) upon request. –6– Case 2:13-cv-20000-RDP Document 120 Filed 09/30/13 Page 19 of 81 the plan’s rates. (Id. 77–78.) Some enabling acts restricted a plan’s operations to a local geography. (See, e.g., Ex. 2, Georgia: Laws 1937, No. 379 at 692.) The development of the Blue Shield Plans "largely imitated[] the development of the Blue Cross plans." (Sub. Compl. ¶ 312.) Doctors—another set of the provider plaintiffs here— formed medical care plans that became Blue Shield Plans through their medical societies. (See id. ¶ 313; see also Ex. 3, "Medical Participation in Control of Blue Shield and Certain Other Open-Panel Medical Prepayment Plans," Staff Report to the Federal Trade Commission & Proposed Trade Regulation Rule 55 (Apr. 1979) ("1979 FTC Report").) Because each area had only one medical society, there was typically only one medical care plan for that area. (Sub. Compl. ¶¶ 312–13.) State medical societies also effectively lobbied for enabling acts to establish medical care plans. These enabling acts formed medical care plans with control vested firmly in the local medical society and subject to rate approval by the state insurance department. (Ex. 3, 1979 FTC Report 68–72; Ex. 1, 1947 USPHS Report 145–46.) Medical care plans adopted the Blue Shield symbol. (Sub. Compl. ¶ 313.) In sum, Blue Plans began "independently" using the Cross and Shield trademarks in the early 1930s. (Id. ¶¶ 306, 313.) By the early 1950s, Blue Plans had acquired "ownership rights" in the trademarks. (Id. ¶¶ 321–22; Prov. Compl. ¶ 151.) By operation of trademark law, Blue Plans acquired the right to exclude others from using their marks in the area they served. (See infra at 21–22.) Thus, through use of Blue Marks in their territory, these early Blue Plans possessed the exclusive right to use those marks in that territory. III. The American Hospital Association and the American Medical Association Confer Approval on Blue Plans. The "Blue Cross plans developed in conjunction with the American Hospital Association (‘AHA’) and were designed to provide a mechanism for covering the cost of hospital care." –7– Case 2:13-cv-20000-RDP Document 120 Filed 09/30/13 Page 20 of 81 (Prov. Compl. ¶ 145.) In 1933—just four years after the Baylor plan was created—the AHA approved the concept of prepaid hospitalization and adopted seven essential features of a model prepaid-hospital plan. One essential feature was free choice of physician and hospital in a given community, which necessarily resulted in only one plan for that area. (Ex. 1, 1947 USPHS Report 14–15.) In 1938, the AHA turned these essential features into a formal approval program for prepaid hospitalization plans. (Id. 123–25.) Its approval standards were developed and administered by the AHA’s Committee on Hospital Services. (See Sub. Compl. ¶ 307; Ex. 1, 1947 USPHS Report 15.) One AHA approval standard was that "[p]lans should be established only where needs of a [community] are not adequately served" by existing non-profit hospital care insurance plans. (Ex. 1, 1947 USPHS Report 125; see also Sub. Compl. ¶ 307.) AHA approved those hospital plans that met its standards to use the AHA Seal of Approval. (Id. ¶ 308.) The AHA seal consisted of an AHA seal superimposed on the blue cross originally used by the hospital plan in St. Paul, Minnesota. (Ex. 1, 1947 USPHS Report 15, 123.) The AHA’s Board of Trustees later assumed direct control of the approval program. (Id. 123.) The Blue Shield System developed in a similar manner. (Sub. Compl. ¶ 312; Prov. Compl. ¶ 145.) From the beginning, the AMA required a medical care plan to be sponsored by a constituent state or county medical society, effectively resulting in a single plan per service area. (Ex. 1, 1947 USPHS Report 201–02; Ex. 3, 1979 FTC Report 59–60.) In 1946, the AMA facilitated the establishment of the Association of Medical Care Plans (AMCP). (Sub. Compl. ¶ 314.) The AMA and AMCP decided that the AMA would set standards for plans to receive the AMA’s Seal of Acceptance and the AMCP would create standards, including approval by the local medical society, to govern its members. (Ex. 1, 1947 USPHS Report 147; Ex. 3, 1979 FTC –8– Case 2:13-cv-20000-RDP Document 120 Filed 09/30/13 Page 21 of 81 Report 60.) The AMA’s Seal of Acceptance was a Blue Shield emblazoned with a caduceus and the letters "A.M.A." surrounded by a circle. (Ex. 1, 1947 USPHS Report 147.) The AMCP eventually changed its name to Blue Shield Medical Care Plans (BSMCP), which later became the Blue Shield Association (BSA). (Ex. 3, 1979 FTC Report 62.) Given Blue Plans’ inherent local focus, state-law trademark rights, and the AHA’s and AMCP’s approval standards, Blue-on-Blue competition was rare. The USPHS Report recognized that "[t]he standards for original approval make it clear that Blue Cross plans are intended to serve exclusive areas, that no area should be served by more than one plan. Prior to 1946 the standards which indicated this intent were a requirement for all plans." (Ex. 1, 1947 USPHS Report 130.) The study included nationwide maps of service areas. (Id. 17, 151.) As depicted in these maps, Plans overlapped only in the few areas with cross-hatched shading. –9– Case 2:13-cv-20000-RDP Document 120 Filed 09/30/13 Page 22 of 81 Selectively quoting two books detailing the history of the Blue System, plaintiffs claim that historically there was "fierce" competition between Blue Plans. (Sub. Compl. ¶ 316; Prov. Compl. ¶ 147.) But as plaintiffs concede, having multiple Blue Plans per service area was contrary to the Blue System—"though'Blue Cross Plans were not supposed to overlap service territories,’ such competition was'tolerated by the national Blue Cross agency for lack of power to insist on change.’" (Sub. Compl. ¶ 310.) And the books on which plaintiffs rely explain that competition actually was quite limited.6 One summarizes that instances of overlapping service areas were "exceptions." (Ex. 4, Odin W. Anderson, Blue Cross Since 1929: Accountability and the Public Trust 78–79 (1975).) The other explains that the limited competition between Blue Cross and Blue Shield Plans typically involved controversy over just a subset of medical services provided in a hospital setting, such as radiology, pathology, or anesthesiology. (Ex. 5, Robert Cunningham III & Robert M. Cunningham Jr., The Blues: A History of the Blue Cross and Blue Shield System 21 (1997).) In fact, these books explain that the circumstances of the two instances 6 Where an antitrust plaintiff quotes a portion of a reported account, a district court is entitled, when considering a motion to dismiss, to take notice of the other portions of that account. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 568 n.13 (2007) (citing Federal Rule of Evidence 201). – 10 – Case 2:13-cv-20000-RDP Document 120 Filed 09/30/13 Page 23 of 81 of Blue-on-Blue competition alleged by plaintiffs, in North Carolina and Illinois (Sub. Compl. ¶ 310), were isolated exceptions to the Blue System. (Ex. 4, Anderson 78.)7 IV. Blue Plans Become a Nationwide Product. In the 1940s and 1950s, Blue Plans faced growing competition "from commercial insurance companies that had recognized the success of the Blue plans and were now entering the market." (Sub. Compl. ¶ 317; Prov. Compl. ¶¶ 148, 150.) During this time, each Blue Plan held two key assets: a local provider network and trademark rights. (Sub. Compl. ¶¶ 321–22; Prov. Compl. ¶ 151.) These assets made each Blue Plan a strong competitor in its local area and permitted each Blue Plan to exclude other insurers—including other Blue Plans—from using the Blue Marks in its service area. But the nature of the Blue System was a significant disadvantage vis-à-vis competitors. National employers could sign one contract with a nationally integrated insurer to provide uniform coverage to their employees. (Ex. 1, 1947 USPHS Report 65.) By contrast, to contract with the Blue System, multi-state employers had to cobble together many Blue Plans’ offerings to cover all their employees. Blue Plans responded to the emerging competition and their structural competitive disadvantage in several ways. First, they established inter-Plan reciprocity, the precursor to today’s BlueCard program, allowing one Plan’s subscribers to receive benefits for treatment received at another Plan’s hospital. (Id. 41–42.) The Plans jointly funded a "bank" to handle inter-Plan transactions. (Id.) The Plans also jointly funded Health Services Inc. and Medical 7 The USPHS report describes North Carolina as the "primary exception" to the rule that "plans serve mutually exclusive areas." (Ex. 1, 1947 USPHS Report 16, 21.) The issue there was that one of the North Carolina plans was struggling and could not garner necessary support from member hospitals. (Ex. 5, Cunningham 24–25.) Illinois involved a border dispute where the boundaries between plans had not been clearly defined; one plan asserted it should be allowed to develop the disputed area because the other plan was "not making strenuous or successful efforts to enroll the population of their areas." (Ex. 1, 1947 USPHS Report 21, 130.) – 11 – Case 2:13-cv-20000-RDP Document 120 Filed 09/30/13 Page 24 of 81 Indemnity of America, which served as a nationwide enrollment agency and also underwrote any gaps in the various Blue Plans’ offerings. These steps were the beginning of a Blue System that could offer nationwide products and compete head-to-head with other insurers. (See Ex. 4, Anderson 60–61; Ex. 5, Cunningham 82–83, 86.) But unlike national insurers, the Blue System retained each Plan’s local focus and relationships. (See, e.g., Prov. Compl. ¶ 121 (alleging that Blue Plans work together to create "significant market advantages"); Ex. 4, Anderson 77 (stating that without "viable local bases joined to a viable national agency, Blue Cross plans would be unable to play a strong role in the national health economy, and, in fact, the local plans themselves would be weaker").) Second, the Lanham Act, which became effective in 1947, further helped Blue Plans face national competition. Among other things, it authorized the national registration of trademarks not attached to a physical product. See 15 U.S.C. §§ 1053, 1127. This registration did not supersede existing state-law trademark rights; it merely recognized each Plan’s existing area of use and any additional areas covered by state regulation. See id. §§ 1052(d), 1065. V. License Agreements Recognize Existing Trademark Rights and Service Areas. After passage of the Lanham Act, the AHA immediately applied for registration of "Blue Cross," "Blue Cross Plan," the AHA’s Cross/Seal emblem, and the simple Blue Cross. It received registrations for all four in 1952.8 In 1954, the AHA entered into licensing agreements with previously approved Plans regarding the use of the Blue Cross mark, and many Plans 8 Registration Nos. 0554818 (Feb. 12, 1952), 0554817 (Feb. 12, 1952), 0554492 (Feb. 5, 1952), and 0554488 (Feb. 5, 1952). Plaintiffs do not challenge the validity of the Blue trademarks, and a court can take notice of trademark applications and the like on a motion to dismiss. See, e.g., Williams v. Columbus Bar Ass’n, No. 1:12-cv-04382, 2013 WL 1963822, at *2 n.2 (N.D. Ga. May 8, 2013); Drew Estate Holding Co. v. Fantasia Distrib., Inc., No. 11-21900, 2012 WL 234105, at *4 (S.D. Fla. Jan. 24, 2012). – 12 – Case 2:13-cv-20000-RDP Document 120 Filed 09/30/13 Page 25 of 81 transferred certain rights in their respective trademarks to the AHA.9 (See Ex. 6, 1954 AHA License Agmt.; see also Sub. Compl. ¶ 321; Prov. Compl. ¶ 151 ("[I]n 1954, the Blue Cross plans transferred their rights in each of their respective Blue Cross trade names and trademarks to the AHA.").) The 1954 license agreement recognized that local plans had developed territorial rights with respect to the Blue Cross mark, stating that Blue Plans: developed certain territorial rights with respect to the words BLUE CROSS and the design of a blue cross in the particular areas served by such PLANS, and in certain cases have registered the words BLUE CROSS and/or the design of a blue cross under the laws of various states. (Ex. 6, 1954 AHA License Agmt. 1–2; Sub. Compl. ¶ 321; Prov. Compl. ¶ 151.) Accordingly, each Plan received the right to use the AHA version of the mark within the area served by the Plan as of the date of the 1954 license agreement. (Ex. 6, 1954 AHA License Agmt. ¶ 1(b).) In addition, new Plans would be licensed to use the marks only in areas not then served by any other existing Plan. (Id. ¶ 8.) The AMCP also applied for registration of the Blue Shield, and after changing its name to BSMCP, obtained approval for the use of its marks in 1952.10 (Ex. 7, 1952 BSMCP License Agmt. 1.) That same year, it entered into licensing agreements with previously approved medical plans regarding the use of the Blue Shield mark. (Sub. Compl. ¶ 322; Prov. Compl. ¶ 156.) Like the 1954 Blue Cross license agreement, the Blue Shield license agreement recognized Blue 9 The license agreements, which are competitively sensitive, have been filed under seal and should be treated as subject to the protective order the parties are in the process of negotiating. The court may consider these license agreements, which are referenced in the complaints and central to plaintiffs’ claims, in ruling on a motion to dismiss. See, e.g., Brooks v. Blue Cross & Blue Shield of Fla., Inc., 116 F.3d 1364, 1369 (11th Cir. 1997). 10 Registration Nos. 0557037 (Apr. 1, 1952), 0557040 (Apr. 1, 1952) see also Registration Nos. 0562430 (July 16, 1951), 0591778 (June 22, 1954), and 0617304 (Dec. 6, 1955). – 13 – Case 2:13-cv-20000-RDP Document 120 Filed 09/30/13 Page 26 of 81 Plans’ pre-existing rights conferred by their use of the Blue Shield marks. Thus, the 1952 BSMCP license agreement confirmed that Blue Plans had "adopted and used" the Blue Shield trademark "[p]rior to the incorporation of the National Organization." (Ex. 7, 1952 BSMCP License Agmt. ¶ B; see also Sub. Compl. ¶ 322; Prov. Compl. ¶ 151.) It further stated that members do not "waive, forfeit, or relinquish any legal right to the use of the words'Blue Shield’ … that may have been heretofore acquired by such member under the laws of the state or province in which it is incorporated." (Ex. 7, 1952 BSMCP License Agmt. ¶ 7.) As the AHA and BSMCP approved new Plans, they directly licensed trademarks to the Plan in a specified area. (See Ex. 1, 1947 USPHS Report 124–25 (AHA would not license the seal to a Plan located in an area already served by an existing Plan that had rights to that area); id. 201 (AMA would grant its seal only to Plans approved by the local medical society).) And as the Blue System evolved, the license agreements continued to recognize that early Plans had service areas consistent with their common-law trademark rights and that later plans had their service areas set by the AHA and AMA. In 1972, the AHA transferred trademark ownership to the Blue Cross Association (BCA). (Sub. Compl. ¶ 321; Prov. Compl. ¶ 151.) The license agreement recognized each Blue Plan’s exclusive rights to use the Blue Cross trademarks within the area served by the Plan on the effective date of the agreement "except to the extent that said area may overlap the area or areas served by [another Blue Plan] … as to which overlapping areas the rights hereby granted are non-exclusive as to such other Plan or Plans only." (Ex. 8, 1972 License Agmt. ¶ 1.) In 1982, after BCA and BSA merged to form BCBSA, BCBSA and Blue Plans entered into new license agreements to reflect the change in organization, the current version of which plaintiffs quote in their complaints. (Sub. Compl. ¶¶ 324, 350–55; Prov. Compl. ¶ 160.) The – 14 – Case 2:13-cv-20000-RDP Document 120 Filed 09/30/13 Page 27 of 81 current license agreement reiterates that each Blue Plan previously had "the right to use" the trademarks "in its service area, which was essentially local in nature." (Ex. 9, BCBSA–Blue Cross License Agmt. 1; Ex. 10, BCBSA–Blue Shield License Agmt. 1; see also Sub. Compl. ¶ 351.) The language describing the service areas is almost identical to that in the 1954 and 1972 license agreements: The rights hereby granted are exclusive to the Plan within the geographical area(s) served by the Plan on June 30, 1972, and/or as to which the Plan has been granted a subsequent license, which is hereby defined as the "Service Area," … except to the extent that said Service Area may overlap areas served by one or more other licensed Blue [] Plans … as to which overlapping areas the rights hereby granted are nonexclusive as to such other Plan or Plans only. (Ex. 9, BCBSA–Blue Cross License Agmt. ¶ 5; Ex. 10, BCBSA–Blue Shield License Agmt. ¶ 5.) The license agreements thus acknowledge Blue Plans’ pre-existing trademark rights in the areas they had always served. And, if the license agreements are "simultaneously terminated by force of law," then the trademarks necessarily revert to Blue Plans. (Ex. 9, BCBSA–Blue Cross License Agmt. ¶ 11; Ex. 10, BCBSA–Blue Shield License Agmt. ¶ 11.) In the license agreements, BCBSA sets out "the rules and regulations that all members of BCBSA must obey," including certain "Membership Standards" and "Guidelines." (Sub. Compl. ¶¶ 338–55; Prov. Compl. ¶ 129.) These standards build the value of the Blue brand by, among other things, encouraging Blue Plans to invest in their local areas and maximizing the value of the national product. (See Prov. Compl. ¶ 174 (discussing BlueCard).) And, this commitment to protecting the Blue brand is what makes the Blue Marks, in plaintiffs’ words, "the most recognized in the health care industry." (Sub. Compl. ¶ 361.) Plaintiffs acknowledge that the license agreements do not preclude Blue Plans from offering health insurance products that do not use the Blue Marks outside of their service areas. (Id. ¶¶ 352–55; Prov. Compl. ¶ 161.) Plaintiffs allege that BCBSA prevents licensees from – 15 – Case 2:13-cv-20000-RDP Document 120 Filed 09/30/13 Page 28 of 81 exceeding certain thresholds for non-Blue business, but they do not assert that any licensee has ever approached those thresholds. VI. All Three Branches of Government Have Reviewed the Blue System. The Blue System and its structure are not, and have never been, a secret. Indeed, the Blue System has been the subject of governmental scrutiny, much of it focusing on Blue Plans’ rights to use the Blue Marks exclusively in their service areas. As far back as 1947, the U.S. Public Health Service praised "one plan per area" as preserving patient choice and reducing administrative costs. (Ex. 1, 1947 USPHS Report 231.) Acknowledging the broad benefits of a unified Blue System, the study called for the few Blue Plans with overlapping areas to merge and for a "[c]omplete unification of hospital and medical plans." (Id. 224, 238.) Blue representatives have testified before Congress regarding the Blue System. In 1946, Rufus Rorem, Director of the Blue Cross Commission, appeared before the Senate Committee on Education and Labor. Rorem explained that "[t]here is co-ordination in service to the enrollment areas of Blue Cross. As a general principle, only one Blue Cross Plan is established in each enrollment area." (Ex. 11, Prepared Stmt. by C. Rufus Rorem, Sen. Hr’g Apr. 22, 1946, 7.) In 1971, Blue Cross’s President testified regarding Blue Plans’ "exclusive territorial arrangements." He too explained that service areas did not preclude interbrand competition, because the Blue System was "in competition with 1,700 companies across the United States." (Ex. 12, "High Cost of Hospitalization," Hearings Before the S. Subcomm. on Antitrust & Monopoly, 91st Cong. 210–11 (1971) (Stmt. of Walter J. McNerney).) Blue-on-Blue competition, however, "would be self-defeating because we build and key around a service contract as responsibly keyed to the total community as possible." (Id. at 211.) He agreed that "because there is interplan competition [between Blue and non-Blue insurers], there does not need to be intraplan competition." (Id.) – 16 – Case 2:13-cv-20000-RDP Document 120 Filed 09/30/13 Page 29 of 81 Moreover, the Federal Trade Commission and Department of Justice have studied the Blue System’s structure. For instance, in 1979, an FTC report recognized that "Blue Shield plans generally do not compete with each other." (Ex. 3, 1979 FTC Report 68.) The FTC further explained that each Blue Shield Plan "confines its underwriting activities to the population of its own area, which is usually a state but sometimes includes parts of two or more states, and sometimes is only a portion of one state." (Id.) As another example, in 2004, when Anthem and WellPoint merged, the DOJ noted: "Anthem and WellPoint do not compete against each other under the Blues trademarks. Blue Cross assigns specific geographic territories to each licensee, prohibiting a licensee’s use of the Blues Marks outside its territories." (DOJ Antitrust Div. Issues Stmt. on the Closing of Its Investigation of Anthem, Inc.’s Acquisition of WellPoint Health Networks, Inc. (Mar. 9, 2004), http://www.usdoj.gov/atr/public/press_releases/2004/202738.htm (last visited Sept. 30, 2013).). Courts also have reviewed the Blue System. At least one court has held that the license agreements do not violate the antitrust laws. Blue Cross Blue Shield Ass’n v. Grp. Hosp. & Med. Servs., 744 F. Supp. 700, 719–20, n.7 (E.D. Va. 1990), aff’d, 911 F.2d 720 (4th Cir. 1990). In addition, the Fourth Circuit noted the "exclusive territorial boundaries of these Plans," which "w[ere] assigned, according to their respective license agreements." Grp. Hosp. & Med. Servs., Inc. v. Blue Cross & Blue Shield of Nat’l Capital Area, Inc., 819 F.2d 1138, 1987 WL 36076, at *1, *3 (4th Cir. 1987) (unpublished table decision). In 2008, the Western District of North Carolina rejected an antitrust challenge to the BlueCard program, concluding that Blue Plan programs "undoubtedly promote[] rather than restrain[] trade competition on a market-wide level." (Ex. 13, Tr. of Mot. Hr’g 70−71, Powderly v. Blue Cross & Blue Shield of N.C., No. 3:08-cv-109 (W.D.N.C. Aug. 21, 2008).). – 17 – Case 2:13-cv-20000-RDP Document 120 Filed 09/30/13 Page 30 of 81 Courts also have enforced service areas in disputes between Plans over boundaries. See Grp. Hosp. & Med. Servs., Inc. v. Blue Cross & Blue Shield of Va., No. 85-1123-A (E.D. Va. Apr. 8, 1986), aff’d, 819 F.2d 1138 (4th Cir. 1987) (enforcing D.C. and Virginia Plans’ service areas); Cent. Benefits Mut. Ins. Co. v. Blue Cross & Blue Shield Ass’n, 711 F. Supp. 1423, 1425 (S.D. Ohio 1989) (enjoining Blue Plan from operating outside its service area, and stating, "[t]raditionally each [Blue] plan had its own exclusive service area"). And several cases have noted that Blue Plans operate in service areas. See Grp. Hospitalization & Med. Servs., Inc., 744 F. Supp. at 704 (BCBSA’s license agreement "granted exclusive rights to each Member Plan to operate within its own defined geographical area"); Grp. Hosp. & Med. Servs., Inc. v. Blue Cross & Blue Shield Ass’n, 1 U.S.P.Q.2d 1893, 1895 (D.C. Super. Sept. 26, 1986) ("BCBSA entered into substantially identical licensing agreements" that "granted both plans the right to use BCBSA’s service marks in designated geographical areas."). LEGAL STANDARD To survive a motion to dismiss, plaintiffs’ complaints must allege grounds demonstrating plaintiffs are entitled to relief. Fed. R. Civ. P. 8(a)(2). This requires "more than labels and conclusions [or] a formulaic recitation of the elements of a cause of action." Twombly, 550 U.S. at 555. Plaintiffs must set forth "factual allegations" that are "plausible" and "raise a right to relief above the speculative level." Id. ARGUMENT Plaintiffs ground their Sherman Act conspiracy claims in their assertion that the Blue license agreements created unlawful territorial restrictions. Other than the provider plaintiffs’ BlueCard-based challenge, plaintiffs allege no other antitrust conspiracy and no other improper agreement. In other words, this is not the typical antitrust conspiracy case where the question is whether one can infer some agreement from parallel conduct or attendance at various meetings; – 18 – Case 2:13-cv-20000-RDP Document 120 Filed 09/30/13 Page 31 of 81 instead, it is one where the legality of a set of particular written agreements—the license agreements—is at issue.11 In particular, the question is whether the license agreements violate Section 1 of the Sherman Act. (Sub. Compl. Count 1; Prov. Compl. Counts I and II.)12 To state a claim under Section 1, a plaintiff must allege: (1) an agreement between two or more parties (2) that unreasonably restrains trade. See Levine v. Cent. Fla. Med. Affiliates, Inc., 72 F.3d 1538, 1545 (11th Cir. 1996). Plaintiffs do not allege an unlawful agreement, much less one that is per se unlawful. The subscriber plaintiffs—but not the provider plaintiffs—also repackage their conspiracy claim as a Section 2 violation, namely a conspiracy to monopolize.13 Practically, this claim is no different than the Section 1 claim: "[c]ourts generally consider conduct not deemed anticompetitive under § 1 similarly unactionable under § 2." Imaging Ctr., Inc. v. W. Md. Health Sys., Inc., 158 Fed. Appx. 413, 421 n.6 (4th Cir. 2005) (citing, among other cases, Retina 11 In the event plaintiffs argue that the conspiracy is different or broader than the license agreements, defendants reserve the right, either individually or collectively, to address these arguments on reply, including but not limited to their inadequacy under federal pleading standards and plaintiffs’ standing under both constitutional and antitrust standing doctrine. 12 Counts 13, 21, 27, 34, 41, 46, 53, 58, 65, 73, 85, 97, and 102 in the subscriber complaint are brought under various state antitrust laws that are similar to Sherman Act Section 1. Each is interpreted consistently with the Sherman Act and should be dismissed for the same reasons. 58 C.J.S. Monopolies § 70 (2013) (collecting cases and stating that a "state antitrust statute generally should be construed consistently with federal antitrust law and with federal case law interpreting the federal antitrust statutes"). 13 To state a claim for monopolization under Section 2, a plaintiff must allege: "(1) the possession of monopoly power in the relevant market and (2) the willful acquisition or maintenance of that power as distinguished from growth or development as a consequence of a superior product, business acumen, or historic accident." Levine, 72 F.3d at 1555 (citing United States v. Grinnell Corp., 384 U.S. 563, 570–71 (1966)). Counts 14, 15, 22, 23, 28, 29, 35, 36, 42, 47, 48, 59, 60, 66, 67, 86, 87, 103, and 104 in the subscriber complaint assert state law claims that are similar to Sherman Act Section 2. – 19 – Case 2:13-cv-20000-RDP Document 120 Filed 09/30/13 Page 32 of 81 Assocs., P.A. v. S. Baptist Hosp., 105 F.3d 1376 (11th Cir. 1997)). As discussed below, plaintiffs’ claims do not pass muster under either legal theory. I. Plaintiffs Fail to Allege an Agreement to Do an Unlawful Act. The Sherman Act requires plaintiffs to plead more than the existence of an agreement— they must plead that the agreement seeks to accomplish an unlawful objective. See, e.g., Gulf States Reorganization Grp., Inc. v. Nucor Corp., 822 F. Supp. 2d 1201, 1224 (N.D. Ala. 2011) (Proctor, J.) (requiring that plaintiffs allege a "conscious commitment to an unlawful objective") (quoting Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752, 764 (1984)), aff’d, No. 11-14983, 2013 WL 3490824 (11th Cir. July 15, 2013); see also Am. Tobacco Co. v. United States, 328 U.S. 781, 810 (1946) (plaintiffs must show "a unity of purpose or a common design and understanding, or a meeting of minds in an unlawful arrangement"). Although plaintiffs plead the existence of Blue Plans’ license agreements, their own allegations demonstrate that these license agreements did not create the service areas that they claim are unlawful. Because the license agreements are the basis of plaintiffs’ challenges under both Section 1 and Section 2 of the Sherman Act, plaintiffs’ failure to allege an agreement with an unlawful objective is fatal to their Sherman Act and state law analog claims.14 14 In addition, entities that act as a "single economic enterprise" with respect to the challenged conduct are immune from antitrust challenges. See Am. Needle, Inc. v. Nat’l Football League, 130 S. Ct. 2201, 2207 (2010). The NFL teams did not act as a single entity with respect to the function at issue in American Needle—the licensing of individual team intellectual property. Id. at 2212–13 ("Directly relevant to this case, the teams compete in the market for intellectual property. To a firm making hats, the Saints and the Colts are two potentially competing suppliers of valuable trademarks."). Here, by contrast, Blue Plans have never competed with respect to the function at issue in this case: the nationwide licensing and governance of the Blue Marks. Ultimately, this is another reason that plaintiffs’ challenge to service areas fails. See Washington v. Nat’l Football League, 880 F. Supp. 2d 1004, 1006–07 (D. Minn. 2012) (dismissing antitrust claims after concluding that restrictions placed on intellectual property owned by the National Football League, not the individual teams, were necessary to create the product). – 20 – Case 2:13-cv-20000-RDP Document 120 Filed 09/30/13 Page 33 of 81 A. Blue Plans’ Service Areas Arise from Common-Law Trademark Rights. Plaintiffs allege that Blue Plans "independently" began using the Blue Marks in the early 1930s and acquired separate "ownership rights" in their respective Blue Marks by the early 1950s.15 (Sub. Compl. ¶¶ 306, 313, 321–24; Prov. Compl. ¶¶ 151, 156.) They likewise assert that although BCBSA ultimately became, through various transfers, the "sole owner of the various Blue Cross and Blue Shield trademarks and trade names," (Sub. Compl. ¶¶ 323–24), those rights "had previously been owned by the local plans." (Id. ¶ 324; Prov. Compl. ¶ 156.) Plaintiffs’ allegations thus describe a situation in which service areas arose independently from Blue Plans’ historic use of the Blue Marks in their service areas—long before BCBSA or the license agreements existed.16 Under trademark law, once Blue Plans acquired the Blue Marks, they: (1) held these rights senior to all others, see Allard Enters. v. Advanced Programming Res., 249 F.3d 564, 572 (6th Cir. 2001) ("The first to use a mark in the sale of goods or services is the'senior user’ of the mark and gains common law rights to the mark in the geographic area in which the mark is used."); (2) had the exclusive right to use the Blue Marks, see Crystal Entm’t & Filmworks, Inc. v. Jurado, 643 F.3d 1313, 1320 (11th Cir. 2011) (recognizing "bedrock principle of trademark 15 To the extent plaintiffs are alleging that any Blue Plans acquired trademark licenses from BCBSA or any predecessor after the initial creation of the licenses, this would be nothing more than a vertical agreement, which—along with horizontal agreements with procompetitive benefits—are not subject to a per se analysis. 16 Plaintiffs’ claims are also barred because they have waited to file their complaints long after the four-year statute of limitations for a private antitrust action expired. 15 U.S.C. § 15(b). The creation of service areas dates back to as early as 1938, and the Blue System’s operations have been public since the 1940s, as referenced in books and federal reports. Plaintiffs’ claims should have been discovered long before four years ago. See, e.g., Poster Exch., Inc. v. Nat’l Screen Serv. Corp., 517 F.2d 117, 128 (5th Cir. 1975) (requiring that "injurious act actually occur[] during the limitations period, not merely the abatable but unabated inertial consequences of some pre-limitations action"); Midwestern Mach. Co., Inc. v. Nw. Airlines, 392 F.3d 265, 271 (8th Cir. 2004) ("Once a merger is completed, there is no continuing violation possible under § 7 that would justify extending the statute of limitations beyond four years."). – 21 – Case 2:13-cv-20000-RDP Document 120 Filed 09/30/13 Page 34 of 81 law that a mark can identify and distinguish only a single commercial source"); and (3) could use the Blue Marks throughout their service areas. See, e.g., Huber Baking Co. v. Stroehmann Bros. Co., 252 F.2d 945, 955 (2d Cir. 1958) (citation omitted) ("Thus, the rights to a trademark extend through the entire territory actually served by the owner, or covered by his advertising."); see also Tana v. Dantanna’s, 611 F.3d 767, 780 (11th Cir. 2010) (a trademark right is "coextensive only with the territory throughout which it is known and from which it has drawn its trade"). Thus, each Blue Plan’s service area was inherently exclusive by operation of law because it could exclude others from using the Blue Marks in that geographic area. See Tally-Ho, Inc. v. Coast Cmty. Coll. Dist., 889 F.2d 1018, 1023 (11th Cir. 1989); see also Emergency One, Inc. v. Am. Fire Eagle Engine Co., Inc., 332 F.3d 264, 267 (4th Cir. 2003) ("The owner of a mark acquires both the right to use a particular mark and the right to prevent others from using the same or a confusingly similar mark.") (citations omitted). B. The License Agreements Cannot Constitute an Illegal Agreement Because They Merely Confirmed Defendants’ Pre-Existing Trademark Rights. The license agreements central to plaintiffs’ claims merely recognized the geographic scope of Blue Plans’ pre-existing trademark rights. (See supra at 12–15.) The defect in plaintiffs’ claims is that the license agreements do not constitute an agreement to do anything unlawful. As this Court emphasized in Nucor, "the joint meeting of the minds must incorporate the illegal restraint and, thus, those elements are inextricably intertwined." 822 F. Supp. 2d at 1224 (emphasis added). Thus, the "assertion that any'concerted activity’ can be deemed a Section 1 violation without evidence of a conscious commitment to an unlawful objective is, quite simply, not just off the mark[, it’s] not the law." Id.17 Simply put, there can be no liability under the 17 See also 49er Chevrolet, Inc. v. Gen. Motors Corp., 803 F.2d 1463, 1467 (9th Cir. 1986) ("The antitrust laws are not offended by agreements as such, but only those with anticompetitive conduct."). – 22 – Case 2:13-cv-20000-RDP Document 120 Filed 09/30/13 Page 35 of 81 Sherman Act unless the agreement alleged to violate Section 1 reflects a common purpose to accomplish an unlawful end. Here, the license agreements cannot meet that standard because they merely acknowledged Blue Plans’ pre-existing trademark rights in pre-existing service areas. This case is therefore like VMG Enters., Inc. v. F. Quesada & Franco, Inc., where the court rejected antitrust claims challenging the parties’ agreement not to use trademarks outside of agreed-upon territories. 788 F. Supp. 648 (D.P.R. 1992). The court reasoned that the written agreement was not actionable under the antitrust laws because it "did not'create’ a trademark territorial division … it merely recognized it." Id. at 657. The court explained: By 1986, [the parties] were already engaged in the use of the [] mark in different territories, thereby de facto and by independent (not concerted) action developing the trademark territorial division. … Thus, in essence, the parties’ agreement for a territorial trademark division results not from some illegal, mutually pre-arranged scheme, but from the recognition … that the division was already a reality as a matter of trademark law. Id. (emphasis added). As in VMG, the license agreements here merely recognize territorial divisions that arose decades earlier "as a matter of trademark law," and therefore do not violate the Sherman Act. Id. VMG is no aberration; courts routinely uphold and enforce agreements that allow "concurrent use" of the same (or confusingly similar) trademarks in the distinct territories where the parties had pre-existing trademark rights. See, e.g., Lone Star Steakhouse & Saloon, Inc. v. Longhorn Steaks, Inc., 106 F.3d 355, 365–66 (11th Cir. 1997) (allowing defendant to use mark in Georgia, while allowing plaintiff to use mark outside of Georgia); Fuddruckers, Inc. v. Fudpucker’s, Inc., 436 F. Supp. 2d 1260, 1269 (N.D. Fla. 2006) (allowing defendant to use mark in one area, and plaintiff to use mark outside of defendant’s area). – 23 – Case 2:13-cv-20000-RDP Document 120 Filed 09/30/13 Page 36 of 81 C. Service Areas Would Continue to Exist Even Without the License Agreements. Service areas existed prior to the license agreements and would continue to exist without them. The complaints effectively concede that Blue Plans had the right to prevent Blue-on-Blue competition in their service areas long before the license agreements at issue. (Sub. Compl. ¶¶ 306, 313, 321–24; Prov. Compl. ¶¶ 151, 156.) And, the license agreements explicitly retain any "nonexclusive" service areas where such Blue-on-Blue competition may have previously existed. (Ex. 9, BCBSA-Blue Cross License Agmt. ¶¶ 1, 5; Ex. 10, BCBSA-Blue Shield License Agmt. ¶¶ 1, 5.) Service areas also would continue to exist even if the Court were to grant plaintiffs’ requested relief to enjoin the license agreements. Under the current license agreements, Blue Plans’ original rights to the Blue Marks revert to Blue Plans if the agreements are "simultaneously terminated by force of law." (Ex. 9, BCBSA-Blue Cross License Agmt. ¶ 11; Ex. 10, BCBSA-Blue Shield License Agmt. ¶ 11.) Defendants could continue to prevent other insurers—Blue or non-Blue—from using them in their respective service areas. See Int’l Cosmetics Exch., Inc. v. Gapardis Health & Beauty, Inc., 303 F.3d 1242, 1248 (11th Cir. 2002) (holding that a manufacturer that assigned its trademark to a distributor still owned that trademark after the agreement ended). This alone shows that the license agreements do not constitute an unlawful restraint. II. Plaintiffs Cannot State a Per Se Claim. Both sets of plaintiffs allege that the license agreements between Blue Plans and BCBSA create service areas that are per se illegal under the antitrust laws. Provider plaintiffs also challenge the BlueCard system as per se illegal, while subscriber plaintiffs do not. None of these allegations states a claim under established antitrust law. – 24 – Case 2:13-cv-20000-RDP Document 120 Filed 09/30/13 Page 37 of 81 As a threshold matter, the per se rule is an increasingly narrow exception to the general presumption that antitrust claims are judged under the rule of reason. See Texaco, Inc. v. Dagher, 547 U.S. 1, 5–6 (2006). Courts apply it only when faced with a naked restraint, the anticompetitive effect of which is "immediately obvious." State Oil Co. v. Khan, 522 U.S. 3, 10 (1997); see also, e.g., Broadcast Music, Inc. v. CBS, 441 U.S. 1, 19–20 (1979) (limiting the per se rule to a practice that "facially appears to be one that would always or almost always tend to restrict competition and decrease output"). Plaintiffs’ allegations are inconsistent with this type of "manifestly anticompetitive" conduct. See Leegin Creative Leather Prods., Inc. v. PSKS, Inc., 551 U.S. 877, 886 (2007) (internal quotation marks and citations omitted). To state a per se claim, plaintiffs must allege an agreement that (1) is purely horizontal, (2) has no possible procompetitive benefit, and (3) has had its anticompetitive character confirmed by lengthy judicial experience. See, e.g., id. at 881, 885–87; Am. Needle v. Nat’l Football League, 130 S. Ct. at 2216–17; In re Sulfuric Acid Antitrust Litig., 703 F.3d 1004, 1010–13 (7th Cir. 2012) (Posner, J.). As detailed below, plaintiffs’ allegations do not satisfy any—much less all—of these factors. Because provider plaintiffs allege only a per se claim, their entire complaint should be dismissed. The Court also should dismiss the subscriber plaintiffs’ per se claims. See, e.g., Robertson v. Sea Pines Real Estate Co., 679 F.3d 278, 288−92 (4th Cir. 2012); Total Benefits Planning Agency, Inc. v. Anthem Blue Cross & Blue Shield, 552 F.3d 430, 436 (6th Cir. 2008). A. Plaintiffs’ Alleged "Market Allocation Conspiracy" Does Not State a Per Se Claim. Plaintiffs claim in conclusory fashion that the license agreements are horizontal geographic allocation agreements among competitors, and therefore must be evaluated under the per se rule. But plaintiffs’ attempt to state a per se claim cannot be squared with the Supreme – 25 – Case 2:13-cv-20000-RDP Document 120 Filed 09/30/13 Page 38 of 81 Court’s most recent pronouncement on per se versus rule of reason claims involving horizontal competitors. In American Needle, the Court considered agreements among NFL teams to jointly license their separate intellectual property. 130 S. Ct. at 2207. It concluded that the teams were direct competitors "in the market for intellectual property" and, as such, had entered into a horizontal restraint. Nonetheless, even when faced with a horizontal agreement, the Court determined that the rule of reason analysis applied because of the agreement’s possible procompetitive benefits. Id. at 2212–14, 2216–17. Here there are additional reasons why the per se rule does not apply. Unlike in American Needle, plaintiffs do not allege facts sufficient to plead a horizontal agreement among competitors. Instead, their allegations, along with other facts that may properly be considered on a motion to dismiss, establish that service areas did not arise from agreements among Blue Plans, but developed long before the license agreements at issue in this case were signed, either independently through Plans’ sustained use of and investment in their trademark rights or through vertical agreements with the AHA or AMA. Plaintiffs’ allegations also recognize the procompetitive benefits of service areas, which the case law confirms. Finally, judicial experience has not demonstrated that service areas are manifestly anticompetitive. Quite the opposite. Accordingly, the per se rule cannot apply for these reasons as well. 1. Service Areas Are Not the Result of Any Horizontal Agreement. A necessary—but not sufficient—element of a per se claim is that the challenged restraint results from a horizontal agreement. See Leegin, 551 U.S. at 881, 885–87. Horizontal agreements are "restraints between competitors at the same level of distribution." DeLong Equip. Co. v. Wash. Mills Abrasive Co., 887 F.2d 1499, 1505 (11th Cir. 1989); see also Texaco, 547 U.S. at 5– 6 (holding that there was no horizontal agreement because "Texaco and Shell Oil did not – 26 – Case 2:13-cv-20000-RDP Document 120 Filed 09/30/13 Page 39 of 81 compete with one another in the relevant market"); Bus. Elec. Corp. v. Sharp Elec. Corp., 485 U.S. 717, 730 (1988). While plaintiffs claim that service areas resulted from a horizontal relationship, (see, e.g., Sub. Compl. ¶ 349; Prov. Compl. ¶ 5), this conclusory allegation is "not entitled to the assumption of truth." Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009). Indeed, plaintiffs’ own factual allegations refute that service areas arose from a horizontal agreement. Their allegations concede that service areas initially developed as Blue Plans independently acquired trademark rights to use the Blue Marks in their local areas. (Sub. Compl. ¶¶ 306, 313, 320–24; Prov. Compl. ¶¶ 151, 156.) Plaintiffs’ allegations also recognize that in the 1950s, Blue Plans entered into vertical licensing arrangements with the AHA and AMA. (Sub. Compl. ¶¶ 307–08, 314, 321–22.) Plaintiffs do not and cannot allege that these provider organizations are anything other than independent associations that served as standard-setting and licensing entities to the early Plans. Nor can plaintiffs allege that either the AHA or AMA provided health insurance or competed with Blue Plans in any way. Service areas, then, resulted from Blue Plans obtaining rights to the Blue Marks in their local areas, either independently or through vertical licenses from the AHA and AMA—not from any horizontal agreement among Blue Plans. Plaintiffs’ allegations that Blue Plans purportedly control BCBSA today are irrelevant and immaterial. Whether the per se rule applies depends on the circumstances at the time the alleged restraint was adopted. As Judge Posner recently explained, "we know from [BMI], that even price fixing by agreement between competitors—and from Polk Bros., Inc. v. Forest City Enterprs., Inc., 776 F.2d 185, 189 (7th Cir. 1985), that other agreements that restrict competition—are governed by the rule of reason, rather than being per se illegal, if the challenged practice when adopted could reasonably have been believed to promote enterprise – 27 – Case 2:13-cv-20000-RDP Document 120 Filed 09/30/13 Page 40 of 81 and productivity." In re Sulfuric Acid, 703 F.3d at 1010–11 (emphasis added and internal quotation omitted); accord Polk Bros., 776 F.2d at 189. When service areas were established, the Plans obviously did not control the AHA or the AMA, and plaintiffs have not alleged to the contrary. Even today, the service areas are not the result of a horizontal agreement among Blue Plans. They derive from decades-old trademark rights, and neither the license agreements nor BCBSA have altered them. 2. Service Areas Cannot Be Per Se Unlawful Because They Have Potential Procompetitive Benefits. Even if, as in American Needle, service areas were the product of a purely horizontal agreement, they nonetheless would have to be evaluated under the rule of reason because they admittedly produce potential procompetitive benefits. See Am. Needle, 130 S. Ct. at 2207, 2216– 17 (when horizontal agreement is procompetitive, it should be evaluated under rule of reason); see also Cha-Car, Inc. v. Calder Race Course, Inc., 752 F.2d 609, 613 (11th Cir. 1985) ("The per se doctrine should not be extended to restraints of trade that are of ambiguous effect; any departure from the rule of reason standard must be based upon demonstrable anticompetitive economic effect, rather than formalistic line drawing."). At this stage, the Court does not have to determine that service areas have procompetitive benefits; rather, in order to conclude that plaintiffs have not stated a per se claim, it need only decide that service areas "might plausibly" have potential procompetitive benefits. Cal. Dental Ass’n v. FTC, 526 U.S. 756, 771 (1999); see also In re Sulfuric Acid, 703 F.3d at 1010–11 (holding that if the challenged practice when adopted "could reasonably have been believed to promote enterprise and productivity," that alone takes it out of the per se rule). Given plaintiffs’ own allegations, that conclusion is inevitable. – 28 – Case 2:13-cv-20000-RDP Document 120 Filed 09/30/13 Page 41 of 81 A court must consider whether the agreement has plausible procompetitive benefits even when plaintiff alleges a division of territories. See Augusta News Co. v. Hudson News Co., 269 F.3d 41, 48 (1st Cir. 2001) ("[I]t is commonly understood today that per se condemnation is limited to'naked’ market division agreements, that is, to those that are not part of a larger procompetitive venture."). For example, in Sulfuric Acid, direct competitor Canadian and American chemical companies agreed that the American companies would stop manufacturing sulfuric acid, the Canadian companies would enter the American market, and the American companies would become the Canadian companies’ distributors. 703 F.3d at 1009. The court refused to apply the per se rule because the territorial division had possible procompetitive benefits, including facilitating the Canadian companies’ entry into the United States and a possible increase in competition at the producer level. Id. at 1010–13; see also ZF Meritor, LLC v. Eaton Corp., 696 F.3d 254, 270–71 (3d Cir. 2012) (refusing to apply per se rule because "[e]xclusive dealing agreements are often entered into for entirely procompetitive reasons"). Here, as plaintiffs’ own allegations establish, service areas easily exceed the minimal plausibility test. First, service areas facilitated the creation of a new product—a Blue System that competes with nationally integrated insurers. Second, service areas are ancillary to the procompetitive Blue System as a whole. And third, service areas prevent free-riding, ensure consistent quality, and minimize consumer confusion. For each of these reasons, the per se rule cannot apply here. a. Service areas facilitate the creation of new products. Plaintiffs agree that service areas facilitated the creation of a new product—a Blue System offering businesses and consumers a national network of healthcare services. (Sub. Compl. ¶ 320; Prov. Compl. ¶¶ 174–77; see also Ex. 1, 1947 USPHS Report 41–42, 68.) Agreements that create new products are procompetitive. In BMI, the Supreme Court considered – 29 – Case 2:13-cv-20000-RDP Document 120 Filed 09/30/13 Page 42 of 81 an agreement among authors, composers, and publishing companies—all of which competed head-to-head in the broadcasting industry—to offer a "blanket license" that enabled a buyer to perform all of their compositions. 441 U.S. at 4–5. The Court rejected plaintiffs’ per se claim. Id. at 5–6, 9–10. It concluded that the arrangement, taken as a whole, was "not a naked restraint of trade with no purpose except stifling of competition," but rather created "a different product." Id. at 20–22. This joint product eliminated the need for a purchaser to negotiate with every composer and facilitated "the integration of sales, monitoring, and enforcement against unauthorized copyright use." Id.; see also Nat’l Colleg. Athletic Ass’n v. Bd. of Regents of Univ. of Okla. (NCAA), 468 U.S. 85, 102 (1984) (applying the rule of reason because restrictions on competition were necessary to create the product of college football). As in BMI, cooperation among Blue Plans has allowed them to create a new product that otherwise would not exist. Most Blue Plans arose locally and held local trademark rights. (Sub. Compl. ¶¶ 306–07, 312–13, 321–22; 324; Prov. Compl. ¶¶ 151, 156; Ex. 1, 1947 USPHS Report 9–11.) Other Blue Plans arose from a vertical agreement with the AHA or AMA; those Plans could not be granted rights to the Blue brand in areas in which other Plans already had exclusive rights. The only way for Blue Plans to create nationwide coverage for subscribers was to stitch together these local offerings into a joint product. The BlueCard program allows subscribers of each local Blue Plan to use sister Plans’ networks and negotiated rates, and provides a single network for efficient processing of claims. (Prov. Compl. ¶¶ 174–77.) BlueCard also allows multi-state employers to gain access to multiple Plans’ networks in a single transaction rather than cobble together the needed coverage. Absent cooperation, Blue Plans could not effectively service (and thus, would not compete effectively for) national employers or federal employees under the Federal Employees Health Benefits Act of 1959, 5 U.S.C. § 8901, which requires that – 30 – Case 2:13-cv-20000-RDP Document 120 Filed 09/30/13 Page 43 of 81 enrollees receive uniform benefits and rates regardless where they live. H.R. REP. NO. 105-374, at 9 (1997). Nor would subscribers of a single Blue Plan be able to effectively access health care outside a geographically limited area. With this cooperation, Blue Plans are able to collectively provide health insurance coverage to 100 million Americans, who have access to more providers than they would with any other insurer in the country. (Prov. Compl. ¶ 109; Sub. Compl. ¶ 346.) Because the Blue System, through service areas, creates a new product for its customers that would otherwise not exist, it is not subject to the per se rule. See Augusta News, 269 F.3d at 48 ("It is not a per se violation for local competitors to join in providing region-wide service that none alone provided before."). b. Service areas are ancillary to appropriate, cooperative activities that increase efficiency and competition. Under the Blue System, the license agreements contribute to productivity and enhance efficiency by allowing Blue Plans to remain focused on their local areas, while also affording subscribers the benefit of a broader network. Any restraints associated with the licensing agreements are ancillary to these overarching procompetitive benefits. For this reason as well, the per se rule does not apply. See Nat’l Bancard Corp. v. VISA U.S.A. Inc., 779 F.2d 592 (11th Cir. 1986) (per se rule does not apply when agreement "potentially could create an efficiency enhancing integration to which the restraint is ancillary"); Polk Bros., Inc., 776 F.2d at 188 ("When cooperation contributes to productivity through integration of efforts, the Rule of Reason is the norm."). Indeed, the DOJ and FTC’s 1995 Antitrust Guidelines for the Licensing of Intellectual Property explain that the rule of reason applies so long as "the licensing arrangement could be expected to contribute to an efficiency-enhancing integration of economic activity." U.S. Dept. of Justice and FTC, Antitrust Guidelines for the Licensing of Intellectual – 31 – Case 2:13-cv-20000-RDP Document 120 Filed 09/30/13 Page 44 of 81 Property 18 (Apr. 6, 1995), http://www.usdoj.gov/atr/public/guidelines/0558.pdf (last visited Sept. 30, 2013)). Rothery is instructive.18 Rothery Storage & Van Co. v. Atlas Van Lines, Inc., 792 F.2d 210 (D.C. Cir. 1986). In that case, Atlas, a moving company, contracted with local carriers and provided them with equipment so they could provide services under the Atlas name. Id. at 212. Some carriers began using Atlas equipment to conduct non-Atlas business. Id. at 212, 221–23. Atlas responded by prohibiting the use of its equipment or marks to service non-Atlas accounts. Id. at 213. The court characterized this arrangement as horizontal, but proceeded to apply the rule of reason instead of the per se rule. Id. at 214–30. It recognized that without the restrictions in the Atlas agreements, the carriers could and did free-ride on Atlas’s services and image. Id. at 221–22. Because the restraint "enhance[d] the efficiency of the van line," the rule of reason governed. Id. at 224, 228–29; see also Nw. Wholesale Stationers, Inc. v. Pac. Stationery & Printing Co., 472 U.S. 284, 295 (1985) (applying the rule of reason to an agreement among competitors because the arrangement "would seem to be designed to increase economic efficiency and render markets more, rather than less, competitive" by allowing the parties to achieve economies of scale, reduce prices, and maintain retail stock to compete more effectively with larger retailers) (internal quotation omitted); Polk Bros., Inc., 776 F.2d at 188–91 (rejecting application of the per se rule to reciprocal agreements not to compete, which eliminated free-riding and thus induced rivals to engage in "productive cooperation" in the first place). Service areas likewise enhance efficiency. Without them, a Blue Plan could enter into another Plan’s service areas and free-ride on the other Plan’s goodwill, advertising, and services. This would cause underinvestment in the Blue brand and services (both by the free-riding Plan 18 Judge Bork, whom plaintiffs acknowledge was a leading antitrust scholar, authored Rothery. (Sub. Compl. ¶ 1.) – 32 – Case 2:13-cv-20000-RDP Document 120 Filed 09/30/13 Page 45 of 81 and the free-ridden Plan). Moreover, without service areas, there may not be incentives to operate a Plan in some areas or to cover certain groups or individuals, resulting in fewer or no choices for consumers seeking coverage. The current system, in contrast, encourages Blue Plans to maximize their investments in their local areas and provide coverage for larger groups of subscribers. Such potential efficiencies also dictate application of the rule of reason here. c. Service areas, like other intellectual-property rights, have procompetitive benefits. It is black-letter law that trademarks have procompetitive benefits. They reduce consumers’ search costs and assure a producer that it (and not a free-riding competitor) will reap the benefits of building a desirable product. See Qualitex Co. v. Jacobson Prods. Co., Inc., 514 U.S. 159, 162–64 (1995). As a result, the per se rule does not apply to trademark and similar intellectual-property restraints. See, e.g., Leegin, 551 U.S. at 890–91. In FTC v. Actavis, Inc., 133 S. Ct. 2223 (2013), the Supreme Court this year considered whether a brand-name prescription drug manufacturer and a competing generic company could enter into a settlement agreement, under which the brand-name manufacturer allegedly paid the generic company not to challenge its patent. The Court held that the rule of reason applied; despite the non-compete agreement, it was not a case where "an observer with even a rudimentary understanding of economics could conclude that the arrangements in question would have an anticompetitive effect on customers and markets." Id. at 2237. The Court reasoned that the complexities of potential anticompetitive effects required further analysis, and stated that "offsetting or redeeming virtues are sometimes present" in such agreements. Id; see also Generac Corp. v. Caterpillar Inc., 172 F.3d 971, 977 (7th Cir. 1999) (holding that a licensee’s agreement to restrict its territory in exchange for the right to use a trademark was governed by the rule of reason). – 33 – Case 2:13-cv-20000-RDP Document 120 Filed 09/30/13 Page 46 of 81 The license agreements challenged by plaintiffs here have manifest procompetitive virtues that likewise remove them from the scope of the per se rule: First, the Blue Marks associated with the service areas curb free-riding. See B.H. Bunn Co. v. AAA Replacement Parts Co., 451 F.2d 1254, 1261 (5th Cir. 1971) ("One is not allowed to take a free ride on another’s registered trademark. The holder of a registered mark is thereby encouraged … to educate the public that his mark is synonymous with his product’s reputation and quality."). Without defined service areas, a Plan could enter another’s service area and use the Blue Marks to capitalize on the established Plan’s reputation. This would undermine the established Blue Plan’s incentives to invest in its service area and the brand. The prevention of free-riding is unquestionably the type of procompetitive justification that precludes application of the per se rule. See Major League Baseball Props., Inc. v. Salvino, Inc., 542 F.3d 290, 340 (2d Cir. 2008) (Sotomayor, J., concurring) (concluding that the rule of reason applied to an exclusive license for intellectual property as the arrangement was "reasonably necessary to achieve MLBP’s efficiency-enhancing purposes because they eliminate several potential externalities. … Most notable of these is the so-called free-rider problem."). Second, service areas allow the Blue System to assure consistent quality. Consumers know the services associated with the Blue Marks are of consistent quality due to BCBSA’s continued efforts to monitor and enforce compliance with its rules and regulations. (Sub. Compl. ¶¶ 340, 353–55 (alleging that BCBSA enforces membership standards and limits investment in non-Blue insurance, which promotes investment in the Blue brand); Prov. Compl. ¶¶ 129, 161.) Service areas facilitate this effort by preserving incentives for each Plan to invest locally. Third, service areas prevent consumer confusion. Competition in service areas using the Blue Marks could confuse consumers, resulting in dilution of the brand, loss of consumer – 34 – Case 2:13-cv-20000-RDP Document 120 Filed 09/30/13 Page 47 of 81 benefits, and extra administrative costs for consumers and providers alike. This is precisely what trademarks are designed to avoid. See Crystal Entm’t & Filmworks, Inc., 643 F.3d at 1323 (affirming that the public interest is best served by awarding a mark exclusively, because "[t]o do otherwise would … cause unnecessary consumer confusion" (internal quotation omitted)). Fourth, service areas promote interbrand competition, a primary objective of the antitrust laws. Service areas allow Blue Plans to achieve efficiencies. As part of the Blue System, they create nationwide coverage for subscribers, allowing consumers to access providers outside their home areas and ensuring Blue Plans can compete effectively against multi-state insurers. See, e.g., Midwestern Waffles, Inc. v. Waffle House, Inc., 734 F.2d 705, 720 (11th Cir. 1984) (territorial restrictions can "promote interbrand competition by allowing the franchisor or manufacturer to achieve certain efficiencies in the distribution of his goods and services") (citing Continental T.V., Inc. v. GTE Sylvania Inc., 433 U.S. 36 (1977)). d. Neither Topco nor Sealy require application of the per se rule. Plaintiffs apparently intend to rely on United States v. Topco Associates, Inc., 405 U.S. 596 (1972), and United States v. Sealy, 388 U.S. 350 (1967) for their per se argument. This reliance is misplaced. Those cases are distinguishable and, in any event, no longer represent the Supreme Court’s mode of analysis for the per se rule. First, Topco and Sealy involved exclusive territories created by parties that did not already possess exclusive trademark rights in their own territories. Sealy, 388 U.S. at 352; Topco, 405 U.S. at 601–02. Here, however, the license agreements reflect long-standing service areas defined either by trademark law or vertical licenses from the AHA and AMA. See supra at 12– 15. As a result, Topco and Sealy cannot apply to this case. Second, as discussed, service areas are not naked restraints. Rather, they accomplish something new and procompetitive: a Blue insurance product offering nationwide service to – 35 – Case 2:13-cv-20000-RDP Document 120 Filed 09/30/13 Page 48 of 81 subscribers. That was not the case in Sealy or Topco. In Sealy, a licensor and its manufacturer-licensees engaged in "flagrant and pervasive price-fixing"; "[t]he territorial restraints were a part of the unlawful price-fixing and policing." 388 U.S. at 351, 355–56. The agreement did not create a new product. Before and after, the defendants sold exactly the same product: mattresses. Id. at 352. Likewise in Topco, small-to medium-sized supermarket chains created a cooperative that established exclusive territories for its members for Topco-branded grocery products. Topco, 405 U.S. at 599–602. Before and after, the member-supermarket chains sold the same product (albeit with a different label): groceries. Id. Here, on the other hand, the cooperative arrangement among Blue Plans created a new and essential product: nationwide, but locally-focused, Blue System healthcare financing that would not be available for subscribers absent agreement. See supra at 30–31; cf. BMI, 441 U.S. at 20–22; NCAA, 468 U.S. at 101. Finally, these cases no longer represent the Supreme Court’s analytical approach to the per se rule. Since Topco and Sealy, the Supreme Court has reformed the law on the per se rule, drastically narrowing the situations where it applies: • In 1977, the Court overruled precedent that applied the per se rule to non-price vertical restraints. See GTE Sylvania, 433 U.S. at 57–59. • In 1979, the Court refused to apply the per se rule to conduct that was horizontal price fixing: an agreement among copyright owners to sell compositions for a single price under a blanket license. See BMI, 441 U.S. at 24. • In 1984, the Court applied the rule of reason to conduct that was a horizontal agreement to limit output: an agreement among NCAA members not to televise more than a set number of football games. See NCAA, 468 U.S. at 101 (per se rule inapplicable when restraints "are essential if the product is to be available at all"). • In 1985, the Court rejected application of the per se rule to an alleged horizontal boycott: an agreement by cooperative members to expel a competitor for failing to obey the cooperative’s regulations. See Nw. Stationers, 472 U.S. at 295. • In 1997, the Court overruled precedent that applied the per se rule to maximum-resale-price-maintenance agreements. See State Oil Co., 522 U.S. at 22. – 36 – Case 2:13-cv-20000-RDP Document 120 Filed 09/30/13 Page 49 of 81 • In 2007, the Court overruled precedent that held that minimum-resale-price-maintenance agreements are per se unlawful. See Leegin, 551 U.S. at 889–90. • In 2010, the Court held that a horizontal agreement among direct competitors to jointly license intellectual property is judged under the rule of reason.19 See Am. Needle, 130 S. Ct. at 2216–17. • In 2013, the Court applied the rule of reason to a horizontal agreement not to enter a market where entry allegedly would have infringed an existing competitor’s patent. See Actavis, 133 S. Ct. at 2236–38. These cases reflect the Supreme Court’s progressive limitation of the circumstances under which the per se rule applies. Commentators and appellate courts alike have recognized the Supreme Court’s refined analysis with respect to the per se rule. Leading commentators have explained: • "The territorial market allocation between Sealy licensees, which the Supreme Court found was per se unlawful in 1967, certainly would not be considered a per se offense today." Benjamin Klein, Single Entity Analysis of Joint Ventures after American Needle: An Economic Perspective, 78 Antitrust L.J. 669, 684 (2013). • "Both the Topco and Sealy decisions have been rightfully criticized for applying an overly aggressive per se rule to restraints that were ancillary to legitimate, efficiency-enhancing joint ventures by firms that lacked significant market power." Herbert Hovenkamp & Christopher R. Leslie, The Firm As Cartel Manager, 64 Vand. L. Rev. 813, 864–65 (2011). Similarly, appellate courts have stated: • "Despite unguardedly broad language in [Topco], it is commonly understood today that per se condemnation is limited to'naked’ market division agreements, that is, to those that are not part of a larger pro-competitive venture." Augusta News Co., 269 F.3d at 48. 19 While the Supreme Court cited Topco in American Needle, it did so only for the proposition that the defendants were not categorically immune from antitrust scrutiny—NFL teams were not acting as a single economic entity. The Court never suggested that Topco (or Sealy) justified application of the per se rule and, significantly, did not cite those cases in its decision to apply the rule of reason to the horizontal agreement. Instead, it relied on modern cases such as BMI and NCAA to discuss application of the rule of reason. 130 S. Ct. at 2216–17. – 37 – Case 2:13-cv-20000-RDP Document 120 Filed 09/30/13 Page 50 of 81 • "[T]o the extent that Topco and Sealy stand for the proposition that all horizontal restraints are illegal per se, they must be regarded as effectively overruled." Rothery, 792 F.2d at 226. As these comments and the progression of Supreme Court cases show, the Supreme Court no longer broadly applies the per se rule and would not apply it here. 3. Judicial Experience Has Not Demonstrated that Service Areas Are Manifestly Anticompetitive. The per se rule applies only when judicial experience demonstrates that a practice has "no purpose except stifling of competition." White Motor Co. v. United States, 372 U.S. 253, 263 (1963); see also Levine, 72 F.3d at 1549 (per se rule applies "only when history and analysis have shown that in sufficiently similar circumstances the rule of reason unequivocally results in a finding of liability") (citation omitted). Plaintiffs have alleged no such experience here. On the contrary, courts regularly enforce exclusive licenses, including the service areas at issue in this case, because they have procompetitive benefits. See Bus. Elecs. Corp., 485 U.S. at 723. This prior scrutiny is "a unique indicator that the challenged practice may have redeeming competitive virtues." BMI, 441 U.S. at 13. For more than 25 years, federal courts have acknowledged that exclusive licenses have "possible procompetitive influences on a given market." L.A. Draper & Son v. Wheelabrator-Frye, Inc., 735 F.2d 414, 420 (11th Cir. 1984); see also E&L Consulting Ltd. v. Doman Indus. Ltd., 472 F.3d 23, 29–31 (2d Cir. 2006); Seacoast Motors of Salisbury, Inc. v. DaimlerChrysler Motors Corp., 271 F.3d 6, 9–10 (1st Cir. 2001). Indeed, "it is well known" that the widespread use of exclusive contracts has procompetitive benefits because they "reasonably serve to maintain or enhance the value of an artistic or intellectual product." Wis. Interscholastic Athletic Ass’n v. Gannett Co., 658 F.3d 614, 627 (7th Cir. 2011) (quoting Home Box Office, Inc. v. FCC, 587 F.2d 1248, 1253 (D.C. Cir. 1978)). Service areas, as discussed above, enhance the value of – 38 – Case 2:13-cv-20000-RDP Document 120 Filed 09/30/13 Page 51 of 81 Blue Plans’ product by providing customers with a locally-focused, national system of health insurance and preventing free-riding. Courts and regulators have specifically reviewed the Blue System’s service areas. Courts have done so in the context of border disputes between adjoining service areas, even in the face of antitrust challenge. Grp. Hosp. & Med. Servs., 744 F. Supp. at 719–20 & n.7; see also Grp. Hosp. & Med. Servs., Inc., No. 85-1123-A (E.D. Va. Apr. 8, 1986), aff’d, 819 F.2d 1138 (4th Cir. 1987) (enforcing D.C. and Virginia Plans’ service areas); Cent. Benefits Mut. Ins. Co., 711 F. Supp. at 1435 (enjoining Plan from operating outside its service area). Federal antitrust agencies, including the DOJ and the FTC, also have reviewed service areas. (See Ex. 3, 1979 FTC Report 68.) And BCBSA officials have addressed service areas in congressional testimony. (See Ex. 11, 1946 Rorem Stmt. 7; Ex. 12, 1971 McNerney Stmt. 210–11.) Finally, the U.S. Public Health Service concluded more than sixty years ago that service areas benefit patients and providers alike: The basic formula of the hospital plans—non-profit status, one plan per area, free choice of hospital and the right of all qualified hospitals to participate, the provision of benefits on a service basis—is sound and mutually beneficial for patients and hospitals. The prevailing pattern of the medical plans—non-profit status, one plan per area, free choice of physician, and the right of all qualified physicians in the area to participate—is also good. (Ex. 1, 1947 USPHS Report 231 (emphasis added); see also id. 238 (noting that overlapping service areas caused high administrative costs and reduced support of patients and providers, and calling for the few Plans with overlapping areas to merge).) Plaintiffs also have not alleged that judicial experience unambiguously condemns service areas as having no purpose except to stifle competition. Nor could plaintiffs do so, given the history of governmental and judicial review—and enforcement—of exclusive license agreements – 39 – Case 2:13-cv-20000-RDP Document 120 Filed 09/30/13 Page 52 of 81 in general and the Blue Plan service areas in particular. This is yet another reason plaintiffs’ per se claim fails. 4. Plaintiffs Do Not State a Per Se Claim with Respect to Other Restrictions. Plaintiffs’ challenges to other restrictions on a licensee’s non-Blue business and on the acquisition of Blue licensees (Sub. Compl. ¶¶ 352–53, 369–70) also do not amount to a per se claim. First, none of these restrictions are among the remaining categories of restraints that can potentially be subject to per se illegality (e.g., naked horizontal price fixing). Second, the antitrust laws allow BCBSA to preserve the value of the Blue Marks by placing restrictions on its licensees, such as limiting investment in non-Blue business or acquisition by non-Blue entities, without violating antitrust laws. See Leegin, 551 U.S. at 890– 91; Generac, 172 F.3d at 977; cf. Actavis, 133 S. Ct. at 2236–37. These restrictions promote investment in the Blue brand and prevent free-riding. See Rothery, 792 F.2d at 224, 228– 29; see also Nat’l Bancard, 779 F.2d at 599–600; Polk Bros., 776 F.2d at 188–91. As such, they are ancillary to BCBSA’s legitimate business purposes and are procompetitive. See Am. Needle, 130 S. Ct. at 2216–17; Nw. Wholesale Stationers, 472 U.S. at 295; In re Sulfuric Acid, 703 F.3d at 1013; Augusta News, 269 F.3d at 48. Whether these restrictions are viewed individually or in combination with the service areas—plaintiffs’ core allegation in this case—the analysis is the same, and requires evaluation under the rule of reason. Third, plaintiffs do not allege any facts demonstrating that these restrictions have harmed competition. With respect to the alleged acquisition restrictions, for example, plaintiffs allege only that "acquisition restraints reduce competition... because they substantially reduce the ability of non-member insurance companies to expand their business and compete against the – 40 – Case 2:13-cv-20000-RDP Document 120 Filed 09/30/13 Page 53 of 81 Individual Blue Plans." (Sub. Compl. ¶ 371.) But they make no plausible allegations about how acquiring a Blue Mark would increase competition "against the Individual Blue Plans." (Id.) Plaintiffs’ allegations, if anything, demonstrate that competition among Blue Plans would not change at all if an outside insurance company purchased a Blue Mark. The purchaser of an existing Blue Mark would be subject to the same license agreement as the seller, including, of course, the long-established service areas. Similarly, with respect to the alleged restrictions on non-Blue business, plaintiffs do not allege that any Blue Plan is approaching the asserted revenue "caps." Plaintiffs’ allegations only show the high value subscribers place on the Blue brand relative to defendants’ non-Blue business. (Id. ¶¶ 361–65.) There are no allegations that defendants would increase their non-Blue business if the restrictions did not exist. B. The BlueCard Conspiracy Allegations Do Not State a Per Se Claim. The Court also should dismiss provider plaintiffs’ BlueCard conspiracy allegations with prejudice because they do not state a per se claim.20 First, although naked horizontal price-fixing claims remain subject to the per se rule, plaintiffs do not plausibly allege a price-fixing agreement. There are no allegations of joint rate setting or of uniform or "fixed" rates under the BlueCard program. Nor are there any facts suggesting that Blue Plans collectively agreed to any rates, or that any Blue Plan influenced the rates of any other Blue Plan. Indeed, provider plaintiffs make only two allegations: (1) "In furtherance of the Price Fixing Conspiracy, each 20 Provider plaintiffs also make spurious allegations against defendants that are entirely unrelated to their claims. For example, providers allege that defendants have prohibited them from using "price terms" in contracts with other health insurers (Prov. Compl. ¶ 181); have required them to disclose the rates other health insurers pay while preventing providers from disclosing defendants’ rates to other health insurers (id. ¶¶ 182–83); and have threatened to "enter … the market as providers" if providers did not agree to low prices (id. ¶ 184). None of provider plaintiffs’ claims are based on these allegations, nor do such allegations come close to the type of conduct that ever has been considered under the per se rule. – 41 – Case 2:13-cv-20000-RDP Document 120 Filed 09/30/13 Page 54 of 81 Defendant has agreed to participate in the Blue Card program" (Prov. Compl. ¶ 7); and (2) defendants "reached agreement and implemented a Price Fixing Conspiracy through the Blue Card program in order to leverage the low provider pricing they had achieved in each Service Area to benefit all Blues" (id. ¶ 173). These bare-bones, conclusory accusations cannot sustain a price-fixing claim. See Jacobs v. Tempur-Pedic Int’l, Inc., 626 F.3d 1327, 1340 (11th Cir. 2010) (allegation that price-fixing agreements "have unreasonably restrained, do unreasonably restrain, and will continue to unreasonably restrain trade and commerce... by eliminating price competition" is nothing more than a "bare legal conclusion" insufficient to plausibly allege illegal conduct); Iqbal, 556 U.S. at 678 ("Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice."). And, plaintiffs’ allegations concede that each Blue Plan separately sets its own rates and establishes its own "medical policies, claims adjudication edits and coverage rules." (Prov. Compl. ¶ 178.) This admission recognizes that BlueCard is a tool through which subscribers can obtain national coverage, and Blue Plans can service national accounts and compete with other insurers using rates separately negotiated by each Plan. Se