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Total Benefits Planning Agency Inc. v. Anthem Blue Cross and Blue Shield

September 8, 2006


The opinion of the court was delivered by: Judge Michael R. Barrett


This matter is before the Court upon Defendants Anthem Blue Cross and Blue Shield, Anthem Life Insurance Company, Inc., Anthem Health Plans of Kentucky, Inc. and Anthem Insurance Company, Inc.'s ("Anthem Defendants") Motion to Dismiss (Doc. 3) and Defendant Cornerstone Broker Insurance Services Agency Inc.'s ("Cornerstone") Motion to Dismiss (Doc. 15). Plaintiffs have filed Memoranda in Opposition to the Motions (Docs. 13, 16) and the Anthem Defendants and Cornerstone has filed Replies (Docs. 14, 17)


Plaintiffs allege violations of the Sherman Antitrust Act, 15 U.S.C. § 1 and the Clayton Act, 15 U.S.C. § 15.*fn1 Plaintiffs also allege violations of state law for defamation, tortuous interference, civil conspiracy, and breach of contract. Plaintiffs bring these claims against the named Defendants--the Anthem Defendants and Cornerstone--and unnamed Defendants--Jane and John Does--who have participated as co-conspirators.

The following recitation of facts is based on Plaintiffs' Complaint: Plaintiffs are in the business of selling health and life insurance to individuals and businesses. (Doc. 1, ¶ 11) Total Benefits Planning Agency developed a strategy for controlling healthcare costs, which it calls the Total Benefits Strategy. (Id., ¶ 13) The Strategy uses "a 51-year old federal tax law to 'refinance' healthcare costs by raising deductibles on existing group insurance policies and administering benefits through a medical expense reimbursement plan." (Id.)

The Anthem Defendants are insurance companies. (Id. ¶ 4) Cornerstone is an insurance agency. (Id. ¶ 5) Up until June 3, 2005, Plaintiffs maintained appointments with the Anthem Defendants to sell life and health insurance. (Id. ¶ 12) In September of 2004, Plaintiffs were informed that Anthem had concerns that the Total Benefits Strategy was not in the best interests of Anthem or insurance agencies such as Cornerstone. (Id. ¶ 15) Anthem threatened to terminate Plaintiffs' appointments if Plaintiffs continued to use the Total Benefits Strategy. (Id.) However, Plaintiffs continued to promote the Total Benefits Strategy. (Id.)

Plaintiff allege that Defendants have taken several actions which make up a continuing agreement, understanding, and concert of action. (Id. ¶ 17) Plaintiffs allege that Defendants and their co-conspirators defamed and libeled Plaintiffs to third parties, such as insurance agencies, agents, businesses and consumers. (Id.) Plaintiffs allege that Defendants and their co-conspirators stated that the Total Benefits Strategy is unethical and illegal even though Defendants and their co-conspirators knew this to be untrue. (Id.) Plaintiffs allege further that Defendants and their co-conspirators have "coerced and threatened certain insurance agents by threatening to 'blacklist' them and cancel their contracts to insure that these agents do not do business with Plaintiffs." (Id.) Plaintiffs allege that they have also been coerced and threatened. (Id.) Plaintiffs state that Defendants have "'blacklisted' Plaintiffs within the insurance industry and otherwise organized a boycott of Plaintiffs." (Id.) Finally, Plaintiffs state that Defendants terminated their appointments and threatened to terminate the appointment of any agent who does business with Plaintiffs. (Id.) Plaintiffs allege that as a direct and proximate result of these actions, purchasers of insurance services from Plaintiffs have been deprived of these benefits of free and open competition; Plaintiffs have been restrained in their ability to make these services readily and fully available; and Plaintiffs have been defamed and libeled. (Id. ¶ 19) Plaintiffs state that they have suffered a substantial loss of business reputation, opportunity, and income.

The Anthem Defendants and Cornerstone argue that Plaintiffs' antitrust claim under the Sherman Act, 15 U.S.C. § 1, should be dismissed because Plaintiffs have not satisfied the pleading requirements for an antitrust claim. In the alternative, the Anthem Defendants and Cornerstone argue that even if Plaintiffs have adequately pled an antitrust claim, Plaintiffs' antitrust claim is exempt under the McCarran-Ferguson Act, 15 U.S.C. §§ 1012(b), 1013(b). The Anthem Defendants and Cornerstone argue further that upon dismissal of Plaintiffs' federal claim, this Court should decline to exercise supplemental jurisdiction over Plaintiffs' state law claims.


A. Motion to Dismiss Standard

A motion to dismiss under Rule 12(b)(6) requires this Court to construe the complaint in the light most favorable to the plaintiff, accept all of the complaint's factual allegations as true, and determine whether the plaintiff undoubtedly can prove no set of facts in support of the claims that would entitle relief. Meador v. Cabinet for Human Resources, 902 F.2d 474, 475 (6th Cir. 1990), cert. denied, 498 U.S. 867 (1990). "However, while liberal, this standard of review does require more than the bare assertion of legal conclusions." Columbia Natural Res., Inc. v. Tatum, 58 F.3d 1101, 1109 (6th Cir. 1995).

B. Sherman Act

Section 1 of the Sherman Act was enacted to prohibit unreasonable restraints of trade. Board of Trade of City of Chicago v. United States, 246 U.S. 231, 238 (1918). The essential elements of a private antitrust claim under the Act must be alleged in more than vague and conclusory terms to prevent dismissal of the complaint on a defendant's 12(b)(6) motion. Crane & Shovel Sales Corporation v. Bucyrus-Erie Co., 854 F.2d 802, 805 (6th Cir. 1988).

However, this Court must first determine whether Plaintiffs' claims should be analyzed under the per se rule or the rule of reason: courts must distinguish between some types of unlawful anticompetitive restraints that "have such a clear lack of any redeeming virtue that any restraint of that type is conclusively presumed to be unreasonable," and are therefore per se illegal under the antitrust laws, and the far-larger type of restraints that should ...

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