Case 2:13-cv-20000-RDP Document 2610-1 Filed 10/30/20 Page 1 of 73
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`FILED
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` 2020 Oct-30 PM 09:55
`U.S. DISTRICT COURT
`N.D. OF ALABAMA
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE NORTHERN DISTRICT OF ALABAMA
`SOUTHERN DIVISION
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`IN RE BLUE CROSS BLUE SHIELD
`ANTITRUST LITIGATION
`MDL 2406
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`: Master File 2:13-cv-20000-RDP
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`: This document relates to
`: Subscriber Track cases
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`SUBSCRIBER PLAINTIFFS’ MEMORANDUM OF LAW IN SUPPORT OF
`MOTION FOR PRELIMINARY APPROVAL OF PROPOSED CLASS SETTLEMENT
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`7498466.2
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`Case 2:13-cv-20000-RDP Document 2610-1 Filed 10/30/20 Page 2 of 73
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`TABLE OF CONTENTS
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`I.
`
`II.
`
`A.
`
`B.
`
`INTRODUCTION .........................................................................................................2
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`OVERVIEW OF THE LITIGATION AND SETTLEMENT .....................................5
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`Factual and Procedural Background ...........................................................................5
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`The Settlement ...........................................................................................................9
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`1.
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`The Settlement Class Members .......................................................................... 11
`
`a.
`
`b.
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`The Damages Class ...................................................................................... 11
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`The Injunctive Relief Class .......................................................................... 12
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`2.
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`Relief for the Benefit of the Settlement Class Members ...................................... 13
`
`a.
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`b.
`
`i.
`
`ii.
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`The Settlement Fund .................................................................................... 13
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`Injunctive Relief ........................................................................................... 14
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`The Elimination of the National Revenue Cap on Non-Blue Competition 15
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`Opening the Door to Expanded Blue Bids and Competition ..................... 15
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`iii.
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`Local “Best Efforts” ................................................................................. 16
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`iv. Acquisitions ............................................................................................. 16
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`v.
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`Non-Provider Contracting for Self-Funded Accounts ............................... 16
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`vi. Most Favored Nation Clauses .................................................................. 16
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`vii. Monitoring Committee ............................................................................. 17
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`c.
`
`d.
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`e.
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`f.
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`Settlement Class Release .............................................................................. 18
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`Notice Plan................................................................................................... 19
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`Settlement Rescission ................................................................................... 19
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`Attorneys’ Fees and Costs ............................................................................ 21
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`C.
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`Plan of Distribution .................................................................................................. 21
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`III.
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`IV.
`
`A.
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`B.
`
`C.
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`LEGAL STANDARD .................................................................................................. 26
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`THE PROPOSED SETTLEMENT SATISFIES RULE 23 AND WILL LIKELY
`EARN FINAL APPROVAL ........................................................................................ 29
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`Class Representatives and Lead Counsel Have More than Adequately Represented the
`Settlement Class. ..................................................................................................... 29
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`The Proposed Settlement Is the Result of Arm’s-Length Negotiations...................... 30
`
`The Relief Provided to the Settlement Classes Is Far More than Adequate, Taking
`into Account the Considerations Set Forth in Rule 23(e)(2)(C). ............................... 32
`
`1.
`
`The Costs, Risks, and Delay of Trial and Appeal ................................................ 32
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`i
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`Case 2:13-cv-20000-RDP Document 2610-1 Filed 10/30/20 Page 3 of 73
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`2.
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`The Effectiveness of Any Proposed Method of Distributing Relief to the Class,
`Including the Method of Processing Class Member Claims ................................ 36
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`D.
`
`E.
`
`F.
`
`1.
`
`2.
`
`The Terms of Any Proposed Award of Attorneys’ Fees and Expenses, Including
`Timing of Payment .................................................................................................. 37
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`The Proposed Settlement Treats Class Members Equitably Relative to One Another 38
`
`The Remaining Non-Duplicative Bennett Factors Are Satisfied. .............................. 40
`
`The Settlement Is Well Within the Range of Reasonableness Considering the
`Range of Possible Alternatives. .......................................................................... 40
`
`The Stage of Proceedings at which Settlement Was Achieved Strongly Supports
`Preliminary Approval. ........................................................................................ 42
`
`V.
`
`CERTIFICATION OF THE SETTLEMENT CLASSES IS LIKELY. .................... 42
`
`A.
`
`The Proposed Classes Will Satisfy Rule 23(a). ......................................................... 43
`
`1.
`
`2.
`
`3.
`
`4.
`
`Numerosity—Rule 23(a)(1)................................................................................ 44
`
`Commonality—Rule 23(a)(2)............................................................................. 44
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`Typicality—Rule 23(a)(3) .................................................................................. 45
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`Adequacy—Rule 23(a)(4) .................................................................................. 47
`
`B.
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`The Proposed Classes Will Also Satisfy Rules 23(b)(2) and (b)(3). .......................... 48
`
`1.
`
`2.
`
`a.
`
`b.
`
`Because the Blues Have Acted on Grounds Generally Applicable to the Injunctive
`Relief Class, Certification Will Likely Be Appropriate under Rule 23(b)(2). ...... 48
`
`Certification of a Settlement Damages Class and a Self-Funded Sub-Class Is
`Likely Appropriate under Rule 23(b)(3). ............................................................ 50
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`Common Issues Predominate. ....................................................................... 50
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`A Class Action Is Superior to Other Methods of Adjudication. ..................... 51
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`VI.
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`THE PROPOSED PLAN OF DISTRIBUTION WARRANTS PRELIMINARY
`APPROVAL................................................................................................................. 53
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`VII. CONCLUSION ............................................................................................................ 58
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`CASES
`
`TABLE OF AUTHORITIES
`
`AA Suncoast Chiropractic Clinic, P.A. v. Progressive Am. Ins. Co.,
`938 F.3d 1170 (11th Cir. 2019) ............................................................................................. 48
`
`Amchem Prods. Inc. v. Windsor,
`521 U.S. 591 (1997) ........................................................................................................ 43, 47
`
`Amgen Inc. v. Conn. Ret. Plans & Trust Funds,
`568 U.S. 455 (2013) .............................................................................................................. 50
`
`Babineau v. Fed. Express Corp.,
`576 F.3d 1183 (11th Cir. 2009) ............................................................................................. 50
`
`Bellocco v. Curd,
`2006 WL 4693490 (M.D.Fla. Apr. 6, 2006)........................................................................... 53
`
`Bennett v. Behring Corp.,
`737 F.2d 982 (11th Cir. 1984) ............................................................................. 28, 40, 41, 42
`
`Bennett v. Boyd Biloxi, LLC,
`2016 WL 6668926 (S.D. Ala. Nov. 8, 2016) .......................................................................... 43
`
`Borcea v. Carnival Corp.,
`238 F.R.D. 664 (S.D. Fla. 2006) ............................................................................................ 43
`
`Burrows v. Purchasing Power, LLC,
`2013 WL 10167232 (S.D. Fla. Oct. 7, 2013) ......................................................................... 32
`
`Busby v. JRHBW Realty, Inc.,
`513 F.3d 1314 (11th Cir. 2008) ............................................................................................. 47
`
`iii
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`
`Camp v. City of Pelham,
`2014 WL 1764919 (N.D. Ala., May 1, 2014)......................................................................... 40
`
`Carnegie v. Mut. Sav. Life Ins. Co.,
`2004 WL 3715446 (N.D. Ala. Nov. 23, 2004) ....................................................................... 41
`
`Carriuolo v. Gen. Motors Co.,
`823 F.3d 977 (11th Cir. 2016) ............................................................................................... 44
`
`Carroll v. Macy’s, Inc.,
`2020 WL 3037067 (N.D. Ala. June 5, 2020).......................................................................... 28
`
`Cifuentes v. Regions Bank,
`2014 WL 1153772 (S.D. Fla. Mar. 20, 2014)......................................................................... 40
`
`City of Livonia Emp. Ret. Sys. v. Wyeth, No. 07 Civ. 10329(RJS),
`2013 WL 4399015 (S.D.N.Y. Aug. 7, 2013) .......................................................................... 58
`
`Cotton v. Hinton,
`559 F.2d 1326 (5th Cir. 1977) ............................................................................................... 26
`
`Danieli v. Int’l Bus. Mach. Corp.,
`2009 WL 6583144 (S.D.N.Y. Nov. 16, 2009) ........................................................................ 54
`
`Deas v. Russell Stover Candies, Inc.,
`2005 WL 8158201 (N.D. Ala. Dec. 22, 2005) ....................................................................... 40
`
`DeBoer v. Mellon Mortg. Co.,
`64 F.3d 1171 (8th Cir. 1995) ................................................................................................. 46
`
`Dubin v. Miller,
`132 F.R.D. 269 (D. Colo. 1990) ............................................................................................ 46
`
`Dujanovic v. MortgageAmerica, Inc.,
`185 F.R.D. 660 (N.D. Ala. 1999) ........................................................................................... 44
`
`Fabricant v. Sears Roebuck,
`202 F.R.D. 310 (S.D. Fla. 2001) ............................................................................................ 48
`
`Faught v. Am. Home Shield Corp.,
`668 F.3d 1233 (11th Cir. 2011) ............................................................................................. 37
`
`Fitzgerald v. P.L. Mktg., Inc.,
`2020 WL 3621250 (W.D. Tenn. July 2, 2020) ................................................................. 36, 39
`
`Georgine v. Amchem Products, Inc.,
`83 F.3d 610 (3rd Cir. 1996) ................................................................................................... 44
`
`iv
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`Granger v. Sears Roebuck & Co.,
`2008 WL 11424140 (N.D. Ala., Aug. 4, 2008) ...................................................................... 48
`
`Hill v. State Street Corp.,
`2015 WL 127728 (D. Mass. 2015) ........................................................................................ 57
`
`Holmes v. Cont’l Can Co.,
`706 F.2d 1144 (11th Cir. 1983) ............................................................................................. 53
`
`In re Advanced Battery Technologies, Inc., Sec. Litig.,
`298 F.R.D. 171 (S.D.N.Y. 2014) ........................................................................................... 57
`
`In re Blue Cross Blue Shield Antitrust Litig.,
`26 F. Supp. 3d 1172 (N.D. Ala. 2014) .....................................................................................6
`
`In re Blue Cross Blue Shield Antitrust Litig.,
`2018 WL 7152887 (11th Cir. Dec. 12, 2018) ...........................................................................3
`
`In re Blue Cross Blue Shield Antitrust Litig.,
`238 F. Supp. 3d 1313 (N.D. Ala. 2017) ............................................................................. 8, 35
`
`In re Blue Cross Blue Shield Antitrust Litig.,
`308 F. Supp. 3d 1241 (N.D. Ala. 2018) ........................................................................... 3, 6, 9
`
`In re Blue Cross Blue Shield Antitrust Litig.,
`908 F. Supp. 2d 1373 (J.P.M.L. 2012) ................................................................................... 53
`
`In re Checking Account Overdraft Litig.,
`830 F. Supp. 2d 1330 (S.D. Fla. 2011)....................................................................... 41, 50, 51
`
`In re Checking Account Overdraft Litig.,
`275 F.R.D. 654 (S.D. Fla. 2011) ............................................................................................ 30
`
`In re Chicken Antitrust Litig. Am. Poultry,
`669 F.2d 228 (5th Cir. 1982) ........................................................................................... 53, 55
`
`In re Credit Default Swaps Antitrust Litig.,
`2016 WL 2731524 (S.D.N.Y. Apr. 26, 2016) ........................................................................ 54
`
`In re Delta/AirTran Baggage Fee Antitrust Litig.,
`317 F.R.D. 675 (N.D. Ga. 2016) ............................................................................................ 44
`
`In re Domestic Air Transp. Antitrust Litig.,
`137 F.R.D. 677 (N.D. Ga. 1991) ............................................................................................ 51
`
`In re Equifax Inc. Customer Data Sec. Breach Litig.,
`2020 WL 256132 (N.D. Ga. Mar. 17, 2020) .................................................................... 29, 36
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`v
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`In re Ford Motor Co. Spark Plug & Three Valve Engine Prods. Liab. Litig.,
`2016 WL 6909078 (N.D.Ohio Jan. 26, 2016) ........................................................................ 57
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`In re Gilat Satellite Networks, Ltd.,
`2007 WL 1191048 (E.D.N.Y. Apr. 19, 2007) ........................................................................ 57
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`In re GSE Bonds Antitrust Litig.,
`414 F. Supp. 3d 686 (S.D.N.Y. 2019) .............................................................................. 39, 55
`
`In re Ins. Brokerage Antitrust Litig.,
`297 F.R.D.136 (D.N.J. 2013)................................................................................................. 52
`
`In re Liberty Nat’l Ins. Cases, No.
`2006 WL 8436814 (N.D. Ala. Mar. 31, 2006) ....................................................................... 26
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`In re LIBOR-Based Fin. Instruments Antitrust Litig.,
`327 F.R.D. 483 (S.D.N.Y. 2018) ........................................................................................... 57
`
`In re Merrill Lynch & Co., Inc. Research Reports Sec. Litig.,
`2007 WL 4526593 (S.D.N.Y. Dec. 20, 2007) ........................................................................ 57
`
`In re Motorsports Merch. Antitrust Litig.,
`112 F. Supp. 2d 1329 (N.D. Ga. 2000) .................................................................................. 26
`
`In re Mut. Funds Inv. Litig.,
`2011 WL 1102999 (D.Md. 2011) .......................................................................................... 57
`
`In re Packaged Ice Antitrust Litig.,
`322 F.R.D. 276 (E.D. Mich. 2017) ........................................................................................ 50
`
`In re PaineWebber Ltd. P'ships Litig.,
`171 F.R.D. 104 (S.D.N.Y. 1997) ........................................................................................... 54
`
`In re Payment Card Interchange Fee & Merch. Disc. Antitrust Litig.,
`330 F.R.D. 11 (E.D.N.Y. 2019) ................................................................................. 27, 38, 39
`
`In re Pool Prod. Distrib. Mkt. Antitrust Litig.,
`2015 WL 4528880 (E.D. La. July 27, 2015) .......................................................................... 41
`
`In re Spring Corp. ERISA Litig.,
`443 F. Supp. 2d 1249 (D. Kan. 2006) .................................................................................... 58
`
`In re Sunbeam Sec. Litig.,
`176 F. Supp. 2d 1323 (S.D. Fla. 2001)................................................................................... 53
`
`In re Tremont Sec. Law, State Law and Ins. Litig.,
`2015 WL 5333494 (S.D.N.Y. Sept. 14, 2015) ....................................................................... 55
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`In re U.S. Oil & Gas Litig.,
`967 F.2d 489 (11th Cir. 1992) ............................................................................................... 26
`
`J. Truett Payne Co., Inc. v. Chrysler Motors Corp.,
`451 U.S. 557 (1981) .............................................................................................................. 54
`
`Johnson v. NPAS Solutions, LLC,
`975 F.3d 1244 (11th Cir. 2020) ............................................................................................. 21
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`Johnson v. Rausch, Sturm, Israel, Enerson & Hornik, LLP
` 333 F.R.D. 314 (S.D.N.Y. 2019) .......................................................................................... 28
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`Kennedy v. Tallant,
`710 F.2d 711 (11th Cir. 1983) ............................................................................................... 47
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`Kerr v. City of W. Palm Beach,
`875 F.2d 1546 (11th Cir. 1989) ............................................................................................. 50
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`Kornberg v. Carnival Cruise Lines, Inc.,
`741 F.2d 1332 (11th Cir. 1984) ............................................................................................. 46
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`Kreuzfeld A.G. v. Carnehammar,
`138 F.R.D. 594 (S.D. Fla. 1991) ............................................................................................ 44
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`Laydon v. Bank of Tokyo-Mitsubishi UFJ, Ltd.,
`2016 WL 4401148 (S.D.N.Y. June 22, 2016) ........................................................................ 54
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`Lazy Oil Co. v. Wotco Corp.,
`95 F. Supp. 2d 290 (W.D. Pa. 1997) ...................................................................................... 41
`
`Leverso v. SouthTrust Bank of AL., Nat. Assoc.,
`18 F.3d 1527 (11th Cir. 1994) ............................................................................................... 53
`
`McAnaney v. Astoria Fin. Corp.,
`2006 WL 2689621 (E.D.N.Y. Sept. 19, 2006) ....................................................................... 46
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`McWhorter v. Ocwen Loan Servicing, LLC,
`2019 WL 9171207 (N.D. Ala. Aug. 1, 2019) ......................................................................... 26
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`Miller v. Republic Nat’l Life Ins. Co.,
`559 F.2d 426 (5th Cir. 1977) ................................................................................................. 26
`
`Nichols v. SmithKline Beecham Corp.,
`2005 WL 950616 (E.D. Pa. Apr. 22, 2005) ............................................................................ 41
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`O’Toole v. Pitney Bowes, Inc.,
`2009 WL 10672311 (N.D. Ga. Aug. 3, 2009) ........................................................................ 43
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`Parsons v. Brighthouse Networks, LLC,
`2015 WL 13629647 (N.D. Ala. Feb. 5, 2015) .................................................................. 33, 34
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`Rodriguez v. W. Publ'g Corp.,
`563 F.3d 948 (9th Cir. 2009) ................................................................................................. 41
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`Saccoccio v. JP Morgan Chase Bank, N.A.,
`297 F.R.D. 683 (S.D. Fla. 2014) ............................................................................................ 31
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`Schorr v. Countrywide Home Loans, Inc.,
`2015 WL 13402606 (M.D. Ga. Apr. 1, 2015) ........................................................................ 43
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`Schwartz v. TXU Corp.,
`2005 WL 3148350 (N.D. Tex. Nov. 8, 2005)......................................................................... 53
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`Singer v. AT&T Corp.,
`185 F.R.D. 681 (S.D. Fla. 1998) ............................................................................................ 44
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`Smith v. Floor and Decor Outlets of Am., Inc.,
`2017 WL 11495273 (N.D. Ga. Jan. 10, 2017) ........................................................................ 53
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`Strube v. Am. Equity Inv. Life Ins. Co.,
`226 F.R.D. 688 (M.D. Fla. 2005) ........................................................................................... 32
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`Sullivan v. DB Invs., Inc.,
`667 F.3d 273 (3d Cir.2011) ................................................................................................... 57
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`Swaney v. Regions Bank,
`2020 WL 3064945 (N.D. Ala. June 9, 2020).............................................................. 33, 37, 42
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`Swinton v. SquareTrade, Inc.,
`2019 WL 617791 (S.D. Iowa, Feb. 14, 2019) ........................................................................ 28
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`Trauth v. Spearmint Rhino Cos. Worldwide, Inc.,
`2011 WL 13134046 (C.D. Cal. Apr. 4, 2011) ........................................................................ 55
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`Wade v. Kroger Co.,
`2008 WL 4999171 (W.D. Ky. Nov. 20, 2008) ....................................................................... 57
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`Wal-Mart Stores, Inc. v. Dukes,
`564 U.S. 338 (2011) .............................................................................................................. 44
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`Williams v. Mohawk Indus., Inc.,
`568 F.3d 1350 (11th Cir. 2009) ....................................................................................... 45, 46
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`Winston v. Jefferson Cty.,
`2006 WL 6916381 (N.D. Ala., June 26, 2006) ....................................................................... 49
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`Wolin v. Jaguar Land Rover N. Am., LLC,
`617 F.3d 1168 (9th Cir. 2010) ............................................................................................... 52
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`RULES
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`Fed. R. Civ. P. 23 .......................................................................................................... 27, 31, 38
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`Fed. R. Civ. P. 23(a)(1) ............................................................................................................. 44
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`Fed. R. Civ. P. 23(a)(2) ............................................................................................................. 44
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`Fed. R. Civ. P. 23(b)(2) ............................................................................................................. 48
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`Fed. R. Civ. P. 23(b)(3) ............................................................................................................. 52
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`Fed. R. Civ. P. 23(e) .............................................................................................................. 4, 27
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`Fed. R. Civ. P. 23(e)(2) ............................................................................................................. 28
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`Fed. R. Civ. P. 23(e)(2)(C) ........................................................................................................ 34
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`Fed. R. Civ. P. 23(e)(2)(C)(i) .................................................................................................... 32
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`Fed. R. Civ. P. 23(e)(2) ...............................................................................................................1
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`REGULATIONS
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`15 U.S.C. §§ 1-3 .........................................................................................................................2
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`OTHER AUTHORITIES
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`MCLAUGHLIN ON CLASS ACTIONS,
`§ 6.23 (17th ed. 2020) ........................................................................................................... 53
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`NEWBERG ON CLASS ACTIONS
`§ 12:15 (5th ed.) .................................................................................................................... 54
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`Case 2:13-cv-20000-RDP Document 2610-1 Filed 10/30/20 Page 11 of 73
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`Subscriber Class Representatives1 (“Subscriber Plaintiffs”) submit this memorandum
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`in support of Subscriber Plaintiffs’ Motion for Preliminary Approval of Proposed Class
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`Settlement. The Settlement Agreement is attached as Exhibit A.2 Consistent with Fed. R. Civ. P.
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`23(e)(2), the Settlement is fair, reasonable, adequate, and likely to warrant final approval.3 In
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`addition, the proposed Settlement Classes are certifiable under Rule 23. Thus, Subscriber
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`Plaintiffs request that the Court: (1) grant preliminary approval of the settlement; (2) find that the
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`Settlement Classes are likely to be certified at final approval; (3) preliminarily approve the Plan
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`of Distribution; and (4) set a Final Approval Hearing.
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`Proposed orders granting preliminary and final approval are attached to this memorandum
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`as Exhibits B and C, respectively. The proposed Plan of Distribution is attached as Exhibit D. This
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`memorandum is also supported by the Joint Declaration of Settlement Class Counsel as Exhibit E;
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`the Declaration of Self-Funded Sub-Class Settlement Class Counsel, Exhibit F; the Declaration of
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`Kenneth Feinberg, Exhibit G; the Declaration of Darrell Chodorow, Exhibit H; the Declaration of
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`1 Galactic Funk Touring, Inc.; American Electric Motor Services, Inc.; CB Roofing, LLC; Pearce, Bevill, Leesburg,
`Moore, P.C.; Pettus Plumbing & Piping, Inc.; Consumer Financial Education Foundation of America, Inc.; Fort
`McClellan Credit Union; Rolison Trucking Co., LLC; Conrad Watson Air Conditioning, Inc.; Linda Mills; Frank
`Curtis; Jennifer Ray Davidson; Pete Moore Chevrolet, Inc.; Jewelers Trade Shop; Saccoccio & Lopez; Angel Foster
`(fka Angel Vardas); Monika Bhuta; Michael E. Stark; G&S Trailer Repair Incorporated; Chelsea L. Horner; Montis,
`Inc.; Renee E. Allie; John G. Thompson; Avantgarde Aviation, Inc.; Hess, Hess & Daniel, P.C.; Betsy Jane Belzer;
`Bartlett, Inc., d/b/a Energy Savers; Matthew Allan Boyd; Gaston CPA Firm; Rochelle and Brian McGill; Sadler
`Electric; Jeffrey S. Garner; Amy MacRae; Vaughan Pools, Inc.; Casa Blanca, LLC; Jennifer D. Childress; Clint
`Johnston; Janeen Goodin and Marla S. Sharp; Erik Barstow; GC/AAA Fences, Inc.; Keith O. Cerven; Teresa M.
`Cerven; Sirocco, Inc.; Kathryn Scheller; Iron Gate Technology, Inc.; Nancy Thomas; Pioneer Farm Equipment, Inc.;
`Scott A. Morris; Tony Forsythe; Joel Jameson; Ross Hill; Angie Hill; Kevin Bradberry; Christy Bradberry; Tom
`Aschenbrenner; Juanita Aschenbrenner; Free State Growers, Inc.; Tom A. Goodman; Jason Goodman; Comet Capital,
`LLC; Barr, Sternberg, Moss, Lawrence, Silver & Munson, P.C.; Mark Krieger; Deborah Piercy; and Lisa Tomazzoli.
`This memorandum is also supported by the Self-Funded Sub-Class Representative Hibbett Sports, Inc.
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`2 Capitalized terms not otherwise defined herein shall have the meaning given them in the attached Settlement
`Agreement.
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`3 Along with this Motion for Preliminary Approval, Settlement Class Counsel and Self-Funded Sub-Class Settlement
`Counsel are submitting to the Court a separate Notice Motion, including a proposed form of, method for, and date of
`dissemination of Class Notice.
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`1
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`Case 2:13-cv-20000-RDP Document 2610-1 Filed 10/30/20 Page 12 of 73
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`Daniel Rubinfeld, Exhibit I; the Declaration of Ariel Pakes, Exhibit J; and the Declaration of
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`Special Master Edgar C. Gentle, Exhibit K.
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`I.
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`INTRODUCTION
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` This litigation began more than eight years ago and involves the consolidation of more
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`than 40 actions by Subscriber Plaintiffs against the Blue Cross and Blue Shield Association
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`(“BCBSA”) and its member plans (the “Member Plans” or the “Blues”) (collectively,
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`“Defendants”). Subscriber Plaintiffs have achieved a historic settlement with far-reaching
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`competitive benefits. The proposed settlement secures substantial injunctive relief that will reshape
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`competition in the health insurance industry and offer increased choice to millions of Americans,
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`coupled with one of the largest monetary recoveries ever achieved in an antitrust class action
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`settlement.
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`At the heart of this litigation, Subscriber Plaintiffs allege, inter alia, that BCBSA and the
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`Member Plans violated Sections 1, 2, and 3 of the Sherman Antitrust Act, 15 U.S.C. §§ 1-3, by
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`entering into an unlawful agreement that restrained competition among and between them in the
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`markets for health insurance and for the administration of Commercial Health Benefit Products in
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`the United States and its territories by: (1) allocating geographic territories; (2) limiting the
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`Member Plans from competing against each other, even when they are not using a Blue name, by
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`mandating a minimum percentage of business that each Member Plan must do under that name,
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`both inside and outside each Member Plan’s territory; (3) restricting the right of any Member Plan
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`to be sold to a company that is not a member of BCBSA; and (4) agreeing to other ancillary
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`restraints on competition. ECF No. 1082. Subscriber Plaintiffs sought actual damages, treble
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`damages, and injunctive relief to prevent future loss or damage resulting from BCBSA and the
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`Member Plans’ conduct.
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`2
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`Case 2:13-cv-20000-RDP Document 2610-1 Filed 10/30/20 Page 13 of 73
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`This litigation has been extraordinarily hard-fought over the past eight years, as reflected
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`by the over 2,000 docket entries. Defendants filed, and Subscriber Plaintiffs overcame, over a
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`dozen motions to dismiss. The parties spent months negotiating production of terabytes of
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`structured health insurance data from 37 separate defendants, many with different data
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`management systems. Ex. E, Settlement Class Counsel Decl. ¶ 14. With the assistance of
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`Magistrate Judge Michael T. Putnam, the parties briefed over 150 discovery motions, leading to
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`91 discovery orders. Subscriber Plaintiffs obtained and analyzed over 15 million pages of
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`documents, conducted over 120 depositions of Defendants and third-party witnesses, and defended
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`over 20 depositions of class representatives and experts. Id. ¶¶ 14-15. Subscriber Plaintiffs
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`reviewed and challenged hundreds of thousands of privilege log entries, resulting in 45 Reports &
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`Recommendations by Special Master R. Bernard Harwood, Jr. and the full or partial de-
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`designation of over 450,000 documents. Id. ¶ 16.
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`The parties briefed several rounds of summary judgment motions, including Defendants’
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`motion seeking application of the filed rate doctrine to Alabama subscribers and Subscriber
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`Plaintiffs’ successful motion seeking application of a per se standard to the alleged “aggregation
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`of competitive restraints” including the restrictions on non-Blue business (subject to defeating
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`Defendants’ argument that it operated as a single entity for purposes of trademarks), a landmark
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`decision that the Eleventh Circuit declined to review on an interlocutory basis. In re Blue Cross
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`Blue Shield Antitrust Litig., 308 F. Supp. 3d 1241, 1267 (N.D. Ala. 2018); In re Blue Cross Blue
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`Shield Antitrust Litig., No. 18-90020-E, 2018 WL 7152887 (11th Cir. Dec. 12, 2018) (“BCBS
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`Litig.”). And most recently, the parties briefed potential certification of a nationwide injunctive
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`relief class and an Alabama damages class, each side supporting its claims with expert reports
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`totaling hundreds of pages.
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`3
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`Case 2:13-cv-20000-RDP Document 2610-1 Filed 10/30/20 Page 14 of 73
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`Now, after nearly five years of good faith, arm’s-length negotiations conducted by
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`experienced class counsel with the assistance of Special Master Edgar C. Gentle and other
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`mediators, the parties have agreed to the proposed Settlement with a monetary value of $2.67
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`billion and historic injunctive relief with significant, tangible value to the class. The features of
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`the Settlement include:
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`• Monetary Relief. Defendants will pay $2.67 billion to the Settlement Fund, which
`will include distributions to the Damages Class and the Self-Funded Sub-Class,
`Notice and Administration costs, and any Fee and Expense Award.
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`• Injunctive Relief. The Settlement provides historic injunctive relief to enhance
`competition in the market for health insurance, to the benefit of all Settlement Class
`Members. This hard-won non-monetary relief includes:
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`o elimination of the Blues’ national revenue cap on competition when they
`are not using the Blue names