McCready v. Blue Shield

649 F.2d 228
CourtCourt of Appeals for the Fourth Circuit
DecidedMay 12, 1981
DocketNo. 78-1883
StatusPublished
Cited by5 cases

This text of 649 F.2d 228 (McCready v. Blue Shield) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fourth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
McCready v. Blue Shield, 649 F.2d 228 (4th Cir. 1981).

Opinions

THOMSEN, Senior District Judge:

Carol McCready brought this action in the United States District Court for the Eastern District of Virginia, claiming that defendants Blue Shield of Virginia, Blue Shield of Southwestern Virginia, Medical Services of the District of Columbia (collectively, Blue Shield) and the Neuropsychiatric Society of Virginia participated in an unlawful combination and conspiracy to exclude clinical psychologists from receiving compensation under Blue Shield’s prepaid health care plans in violation of Section 1 of the Sherman Act, 15 U.S.C. § 11 and Section 4 of the Clayton Act, 15 U.S.C. § 15.2 McCready brought the case as a class action on behalf of all Blue Shield subscribers in Virginia who incurred costs for psychological services since 1973 but who were not reimbursed for those costs under the applicable health care plans of Blue Shield. She sought treble damages and attorney’s fees as provided by the antitrust laws. The district court dismissed her complaint on the grounds that McCready had no standing to bring such an action and had suffered no antitrust injury because her injury was not suffered within the sector of the economy endangered by defendants’ alleged violations of the antitrust laws.3

* * * * * *

From September 1975 until January 1978, McCready, an employee of Prince William County, Virginia, was a subscriber to one of [230]*230the health care plans administered by Blue Shield. The county provided its employees group coverage purchased from Blue Shield of Virginia. That group plan provided for reimbursement to subscribers for treatment by psychiatrists, or by psychologists whose services were supervised and billed by a treating physician. No reimbursement was allowed for treatment by psychologists unless billed through a treating physician.

During the period of her health care coverage through Blue Shield, McCready received treatment from a clinical psychologist. She unsuccessfully sought reimbursement of those bills from Blue Shield.4 In 1978, she brought this action, claiming a conspiracy by defendants to boycott psychologists, which she alleged was effectuated by Blue Shield’s refusal to reimburse its subscribers for costs of psychological services because those services were rendered and billed by a psychologist and not by a physician.

The alleged conspirators are the Blue Shield defendants, listed above (all of which are separate non-stock corporations engaged in the business of health care plans), Neuropsychiatric Society of Virginia, a not-for-profit nonstock corporation whose members are psychiatrists practicing in Virginia, and other unnamed co-conspirators. By agreement among themselves, it was alleged, those parties sought to exclude psychologists from reimbursement coverage under Blue Shield’s contracts in the State of Virginia.

A related action was filed in the same district court by the Virginia Academy of Clinical Psychologists (VACP), and the two cases were consolidated for pretrial discovery purposes. Motions to dismiss were filed by the defendants in each case and were heard together.

The district court granted the motion to dismiss the case now before us on appeal, but denied the motion to dismiss the VACP case.

In its opinion granting defendants’ motion to dismiss the instant case, the district court concluded that “the section of the economy competitively endangered by a violation by the defendants goes no further than that area occupied by the psychologists.” (Emphasis in original) Therefore, it reasoned, McCready was “operating in a market” which was “unrestrained insofar as she is concernedand her injury was “too indirect and remote” to be an antitrust injury. The district court also stated that “[wjhile standing and antitrust injury may or may not be treated as the same issue, in this case Jane Doe [McCready]5 does not have the former because she has not sustained the latter.” As a result, the district court dismissed McCready’s complaint because of lack of standing to sue.

The VACP case went to trial on the merits and resulted in a judgment for defendants. Virginia Academy, etc. v. Blue Shield of Virginia, 469 F.Supp. 552 (E.D.Va.1979). That judgment was affirmed in part, vacated and remanded in part, by another panel of this court, 4 Cir., 624 F.2d 476 (1980), which should be read in connection with this opinion, although it did not deal with all the issues presented by this appeal.

McCready contends that she not only has suffered a property injury within the meaning of the antitrust laws but that her injuries were suffered by reason of the antitrust violations alleged. Since McCready appeals the granting of defendants’ motion to dismiss, we take as true all facts well pleaded in her complaint.

* * * sic * *

The Clayton Act provides that an antitrust plaintiff must have been injured in his “business or property,” and further, that such injury must result by reason of something “forbidden in the antitrust laws.”

McCready’s contention, that consumers who have suffered non-commercial mone[231]*231tary injury as a result of an antitrust violation have been injured in their property within the meaning of the Clayton Act, was decided favorably to her position by the Supreme Court in Reiter v. Sonotone Corp., 442 U.S. 330, 99 S.Ct. 2326, 60 L.Ed.2d 931 (1979), after the district court had entered its order. The district court, however, did not rely on the fact that her claimed injury was non-commercial in dismissing the complaint.

The plaintiff in Sonotone was a consumer who alleged that as a result of antitrust violations, including horizontal and vertical price-fixing, she was forced to pay an artificially high price for a hearing aid. She brought a class action against the hearing aid manufacturers. The district court certified for interlocutory review the issue of consumer standing. In reversing the decision of the Court of Appeals denying such standing, the Supreme Court held that “[a] consumer whose money has been diminished by reason of an antitrust violation has been injured ‘in his ... property’ within the meaning of § 4 [of the Clayton Act]”. Id. at 339, 99 S.Ct. at 2331. Therefore, Reiter’s allegation of financial loss because she paid a higher price as a result of Sonotone’s anti-competitive conduct was sufficient to make out an injury to her “property” within the meaning of § 4 of the Clayton Act.

McCready can no longer be denied standing simply because she is a consumer with a non-commercial monetary loss. Sonotone, however, is not dispositive of all of the issues here. The consumer still must prove that her injury resulted from an antitrust violation.

Although the ultimate goal of the conspiracy alleged by plaintiff was the exclusion of clinical psychologists from a large segment of the market, the direct victims of the conspirators include McCready and the class of similarly situated patients whom she seeks to represent, as well as the clinical psychologists; both were in the target area.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Dunlap v. Colorado Springs Cablevision, Inc.
829 P.2d 1286 (Supreme Court of Colorado, 1992)
Carol Mccready v. Blue Shield Of Virginia
649 F.2d 228 (Fourth Circuit, 1981)

Cite This Page — Counsel Stack

Bluebook (online)
649 F.2d 228, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mccready-v-blue-shield-ca4-1981.