Blue Cross & Blue Shield United v. Marshfield Clinic

980 F. Supp. 1298, 1997 U.S. Dist. LEXIS 13626, 1997 WL 687948
CourtDistrict Court, W.D. Wisconsin
DecidedJuly 28, 1997
DocketNo. 94-C-0137-C
StatusPublished
Cited by1 cases

This text of 980 F. Supp. 1298 (Blue Cross & Blue Shield United v. Marshfield Clinic) is published on Counsel Stack Legal Research, covering District Court, W.D. Wisconsin primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Blue Cross & Blue Shield United v. Marshfield Clinic, 980 F. Supp. 1298, 1997 U.S. Dist. LEXIS 13626, 1997 WL 687948 (W.D. Wis. 1997).

Opinion

OPINION AND ORDER

CRABB, District Judge.

In this civil antitrust case, both sides have filed motions pursuant to Fed.R.Civ.P. 59(e) to alter or amend the judgment entered in favor of defendants on April 8, 1997. The case has a fairly length history. It was tried once to a jury verdict in favor of plaintiff on all its antitrust claims, including a claim under § 2 of the Sherman Act that defendants had monopolized the health maintenance organization market in north central Wisconsin and two claims under § 1 of the Act of price-fixing and division of markets. On appeal, the Court of Appeals for the Seventh Circuit held that the monopolization and price-fixing claims' were without foundation but that plaintiff had adduced sufficient evidence to support its claim of illegal market division. The court of appeals remanded the case for a new trial limited to showing how much less Blue Cross would have paid The Marshfield Clinic had the Clinic refrained from dividing markets, Blue Cross & Blue Shield v. Marsh-field Clinic, 65 F.3d 1406, 1416 (7th Cir. 1995), and directed the district court to rewrite the injunction entered after the first trial, limiting it to division of markets.

On remand, after reviewing the evidentiary materials filed by plaintiff in opposition to defendants’ motion for summary judgment, I concluded that the evidence plaintiff could adduce at trial was not sufficient to enable a jury to decide how much less plaintiff would have paid had there been no market division. Without such proof, plaintiff could not show that defendants’ illegal agreement or agreements had caused plaintiff any injury and, if so, the amount of damages plaintiff had incurred.

Plaintiff wants the court either to vacate the judgment and set the matter for trial, alter the judgment to award plaintiff nominal damages, or alter the motion more extensively, in conformity with plaintiff’s motion. Defendants The Marshfield Clinic and Security Health Plan of Wisconsin, Inc. want the court to amend the judgment to clarify the status of the injunction order entered September 10, 1996. Defendants believe that no basis exists for continuance of the injunction now that the court has found that plaintiff is unable to prove two of the essential elements of antitrust liability, causation and damages. In addition, plaintiff has moved for an award of attorney fees and non-taxable costs and defendants have moved to strike the new affidavits, charts and exhibits plaintiff submitted in support of its motion to alter and amend.

Plaintiff bases its motion to amend or alter on four arguments: 1) the Court of Appeals for the Seventh Circuit must have concluded the evidence plaintiff adduced at the first [1300]*1300trial was sufficient to show that plaintiff had suffered an antitrust injury as a result of defendants’ division of markets; otherwise, the court of appeals would not have directed the district court to rewrite the original injunction to prohibit the defendant Clinic from dividing markets with competing plans or groups. Therefore, argues plaintiff, this court should order an award of nominal damages to plaintiff, even though it has found that plaintiff cannot prove any actual damages. 2) The court acted improperly in granting summary judgment to defendants without making findings of fact and setting out conclusions of law, as required by Fed. R.Civ.P. 56. 3) No motion for summary judgment was pending on April 7,1997, when the court entered its order granting summary judgment to defendants. 4) The court erred in deciding to grant summary judgment because the evidence demonstrated that the defendant Clinic’s division of markets was a substantial cause of actual damages to plaintiff and therefore a direct cause of injury.

Plaintiffs first ground for amending the judgment overlaps defendants’ motion to clarify the status of the injunction, making it appropriate to consider them together. Defendants’ motion follows from the conclusion I reached in granting summary judgment to defendants: that although plaintiff had adduced sufficient evidence in the first trial to support the jury’s finding that it had market power in four markets (HMO’s, certain specialty areas, pediatrics and primary care), it had not proven causation and injury related to an illegal division of markets at the first trial and had not submitted evidentiary materials in opposition to defendants’ motion for summary judgment that would show how it could make the necessary showing at the second trial. Both causation and injury were critical to plaintiffs success because it had to prove its entitlement to damages under § 4 of the Clayton Act, which authorizes an award of treble damages “to any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws,” but requires a plaintiff to prove causation and injury in addition to a violation of antitrust law. See Atlantic Richfield Co. v. USA Petroleum Co., 495 U.S. 328, 334, 335, 344,110 S.Ct. 1884, 1889, 1890, 1894, 109 L.Ed.2d 333 (1990) (competitor cannot show antitrust injury merely by showing a per se violation of § 1 of the Sherman Act; “ ‘proof of a per se violation and of antitrust injury are distinct matters that must be shown independently’ ”) (quoting P. Areeda & H. Hovenkamp, Antitrust Law ¶ 334.2c, p. 330 (1989 Supp.)).

In the first trial, the jury was asked only whether defendants had “contracted, combined, or conspired” to allocate customers, territories, or product or service markets. See verdict question 7, dkt. #476. The jury’s answer of “yes” to that question established the existence of an illegal agreement; it did not establish that plaintiff had suffered any injury. In the damages phase of that same trial, the jury found that plaintiff had been damaged as “a direct result of defendants’ conduct in violation of the antitrust laws,” but did not specify whether the damages were the result of illegal market divisions or were caused by other illegal conduct that the jury had found to be illegal but that the court of appeals held was not. The jury’s findings in the first trial were sufficient to show that defendants had market power and that they had engaged in an illegal agreement, enough to establish a per se violation, but not enough to carry the day for a private plaintiff proving its entitlement to damages under the Clayton Act. Therefore, I concluded that plaintiff would have to show how the illegal conduct (the division of the markets identified by the first jury) caused it damage. Unfortunately for plaintiff, it had no evidence showing that the market divisions caused it any injury or how much that injury might be if it did occur. Plaintiff’s experts did not separate the illegal behavior (division of markets) from defendants’ legal behavior or from other factors that might have contributed to the prices defendants charged.

Defendants are correct when they argue that it is inconsistent to conclude that plaintiff cannot prevail on its claim for damages but to continue the injunction in effect. Plaintiff’s entitlement to injunctive relief requires the same showing as its claim for damages: that plaintiff has suffered and is likely to continue to suffer antitrust injury [1301]

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Bluebook (online)
980 F. Supp. 1298, 1997 U.S. Dist. LEXIS 13626, 1997 WL 687948, Counsel Stack Legal Research, https://law.counselstack.com/opinion/blue-cross-blue-shield-united-v-marshfield-clinic-wiwd-1997.