On April 5, 2018, U.S. District Court Judge R. David Proctor of the Northern District of Alabama held in a decision that the Blue Shield/Blue Cross plans’ alleged practice of creating exclusive territories is a “per se” violation of the Sherman Antitrust Act and would be evaluated using the highest legal standard (Read more on the Source blog). Providers and individual and small-employer customers sued Blue Cross/Blue Shield in 2013, alleging horizontal market allocation, in two suits that have been consolidated (put into Multi-District Litigation) in federal court in the Northern District of Alabama. The plaintiffs in the putative class actions allege that Blue Cross/Blue Shield entities conspired to divvy up insurance markets all over the country in violation of Section 1 of the Sherman Antitrust Act. The court denied the defendants’ motion to dismiss in June 2014. Read the provider complaint and the subscriber complaint. On June 12, 2018, Judge Proctor entered into an order, approving of an interlocutory appeal to the 11th Circuit regarding his April 5 judgment.

On interlocutory appeal, the 11^th Circuit Court of Appeals ruled against BCBS and upheld the lower court’s use of the highest legal standard in a one-sentence opinion. This ruling makes it easier for plaintiffs to prove BCBS’ liability, without having to produce evidence of economic harm in a long and expensive trial, and the parties then settled shortly after the ruling. The final settlement agreement provided both monetary and injunctive relief that is intended to boost competition in the insurance market.