Virginia Academy of Clinical Psychologists v. Blue Shield

543 F. Supp. 126, 1982 U.S. Dist. LEXIS 13110
CourtDistrict Court, E.D. Virginia
DecidedMay 7, 1982
DocketCiv. A. 81-1069-A-R
StatusPublished
Cited by20 cases

This text of 543 F. Supp. 126 (Virginia Academy of Clinical Psychologists v. Blue Shield) is published on Counsel Stack Legal Research, covering District Court, E.D. Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Virginia Academy of Clinical Psychologists v. Blue Shield, 543 F. Supp. 126, 1982 U.S. Dist. LEXIS 13110 (E.D. Va. 1982).

Opinion

MEMORANDUM OPINION

WARRINER, District Judge.

This matter is before the Court on plaintiff’s motion for attorney’s fees pursuant to Section 16 of the Clayton Antitrust Act as amended by Section 302(3) of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, 15 U.S.C. § 26 (hereinafter the “Antitrust Fee Act”). The facts giving rise to the action on the merits are set out in prior opinions of this Court and that of the Court of Appeals for the Fourth Circuit. See Virginia Academy of Clinical Psychologists v. Blue Shield of Va., 469 F.Supp. 552 (E.D.Va.1979), aff’d in part and vacated in part, 624 F.2d 476 (4th Cir. 1980), cert. denied, 450 U.S. 916, 101 S.Ct. 1360, 67 L.Ed.2d 342 (1981). A procedural review, however, is helpful to an understanding of the Court’s fee award.

I

The underlying suit grew out of an effort by the Virginia Academy of Clinical Psychologists (VACP) to overturn the reim *129 bursement policy of the Blue Shield plans that required clinical psychologists to bill through a licensed physician. VACP initially contacted Warwick R. Furr, Esq., to determine the feasibility of an antitrust action. Furr agreed to conduct a preliminary study at the rate of $50.00 per hour. 1 In May 1978, Furr joined the firm of Lewis, Mitchell & Moore which agreed to undertake the VACP suit along with the firm of Dunnells, Duvall, Bennett & Porter.

VACP was concerned from the outset about the costs of the prospective litigation. Furr and Timothy J. Bloomfield, Esq., who was the senior counsel from the Dunnells, Duvall firm involved in the VACP case, agreed to a $10,000.00 ceiling on costs for the first year of litigation with a reassessment thereafter. 2 They informed VACP that they expected to receive full compensation pursuant to the fee provisions of the Antitrust Fee Act. Their one caveat was that if the case were resolved during the first year, VACP would pay them the difference between $10,000 and any lesser amount that was actually expended on costs incurred pursuing the litigation. As a practical matter the $10,000 mark was reached long before the expiration of one year.

VACP and several of its members filed suit on 14 July 1978, in Alexandria, Virginia, against Blue Shield of Virginia (BSV),

Blue Shield of Southwest Virginia (BSSW), the Neuropsychiatric Society of Virginia (NSV), and the Medical Society of the District of Columbia (MSDC). The suit was hotly contested and defendants fusilladed plaintiffs with every conceivable motion that could be asserted under the Federal Rules of Civil Procedure. Intense discovery was conducted in a period of five and one-half months. On 10 October 1978, the Court dismissed a companion suit to the instant matter proceeding under the style of McCready v. Blue Shield of Virginia, C.A. No. 78-0497-A (E.D.Va. 10 Oct. 1978). MSDC was dismissed as a defendant by joint motion on 31 October 1978.

The trial, which was held in Richmond, Virginia, for the Court’s convenience, lasted four days and was followed by submission of post trial briefs. Judgment was entered for all defendants in April 1979. Plaintiffs successfully appealed to the Court of Appeals for the Fourth Circuit which affirmed this Court’s decision as to NSV but reversed as to BSV and BSSW. Plaintiffs successfully resisted defendants’ efforts to obtain a rehearing in the Fourth Circuit and a petition for writ of certiorari to the United States Supreme Court.

The mandate from the Fourth Circuit was returned to this Court in July 1980. *130 Since then, defendants have endeavored by all available means to minimize the effect of that Court’s mandate. Though defendants’ efforts have painfully protracted the matter, such that the post-remand proceedings seem to dwarf all that has gone before, they have been generally unsuccessful.

The battle over attorney’s fees is certainly the most intensely contested aspect of the entire suit, reflected in the morass of nine briefs and several volumes of exhibits. Defendants have based their challenge to plaintiffs’ claim for fees on whether plaintiffs “substantially prevailed” on the merits, whether concurrent events mooted plaintiffs’ claim for relief, and whether plaintiffs fees should be reduced to reflect aspects of the case where plaintiffs did not prevail.

Following the denial of certiorari by the Supreme Court in February of 1981, this Court entered judgment in favor of plaintiffs and directed defendants to take certain actions. That order was subsequently modified when it became apparent that the need for prospective injunctive relief was no longer necessary. 3 In the end, this Court only had to require defendants to notify practicing Virginia clinical psychologists of the Fourth Circuit’s decision and to direct them to retain certain records.

On 9 March 1982, VACP and BSSW advised the Court that all matters between them had been compromised and settled, leaving only BSV as a party defendant to the litigation. In response to BSV’s motion for an order to disclose the terms of the settlement, plaintiffs filed a description of the terms of the settlement under seal. As updated by a subsequent filing under seal, these papers purportedly set forth the terms of settlement between VACP and BSSW, including the allocation for attorneys’ fees.

At a hearing held on 20 April 1982, the Court determined the effect that the BSSW settlement would have on BSV’s liability for attorneys’ fees. 4 The Court also determined that it would open the sealed documents only after determining the proper fee award for the case as a whole.

II

The Court has previously determined that plaintiffs “substantially prevailed” within the meaning of § 16 of the Clayton Act. 15 U.S.C. § 26. Virginia Academy of Clinical Psychologists v. Blue Shield of Va., C.A. No. 78-496-A (now C.A. No. 81-1069-A-R) (E.D.Va. 30 Mar. 1981) (vacated in part and modified by orders of 5 August and 6 October 1981). The Court emphasized then that plaintiffs had gained relief to which they were not otherwise entitled under the State proceedings, and that the existence of alternative State administrative remedies did not warrant this Court disregarding the gains made in federal court. Id.

The Court reaffirms that plaintiffs “substantially prevailed” in this action. Defendants’ argument to the contrary is without merit. This Court denied plaintiffs prospective relief only because of the chronology of circumstances. Plaintiffs were clearly entitled to the relief they sought and this Court would have granted such relief if it had been necessary at the time plaintiffs appeared before the Court.

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Bluebook (online)
543 F. Supp. 126, 1982 U.S. Dist. LEXIS 13110, Counsel Stack Legal Research, https://law.counselstack.com/opinion/virginia-academy-of-clinical-psychologists-v-blue-shield-vaed-1982.