Case 2:13-cv-20000-RDP Document 244 Filed 12/19/14 Page 1 of 319 FILED 2014 Dec-19 PM 12:10 U.S. DISTRICT COURT N.D. OF ALABAMA IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ALABAMA SOUTHERN DIVISION GALACTIC FUNK TOURING, INC.; AMERICAN ELECTRIC MOTOR CLASS ACTION COMPLAINT SERVICES, INC.; CB ROOFING, LLC; LINDA MILLS; FRANK CURTIS; JUDY MDL No. 2406 SHERIDAN; JENNIFER RAY DAVIDSON; LAWRENCE W. COHN, AAL, ALC; JURY TRIAL DEMANDED SACCOCCIO & LOPEZ; MONIKA BHUTA; MICHAEL E. STARK; FALCON PICTURE GROUP LLC; RENEE E. ALLIE; Master File No. 2:13-CV-20000-RDP JOHN G. THOMPSON; HARRY M. MCCUMBER; GASTON CPA FIRM; This document relates to: JEFFREY S. GARNER; ERIK BARSTOW; Subscriber Track cases GC/AAA FENCES, INC.; KEITH O. CERVEN; TERESA M. CERVEN; SHGI CORP.; KATHLEEN SCHELLER; IRON GATE TECHNOLOGY, INC.; NANCY THOMAS; SHRED 360, LLC; DANNY J. CURLIN; AMEDIUS, LLC; and BRETT WATTS, Plaintiffs, v. BLUE CROSS BLUE SHIELD OF ALABAMA; PREMARA, D/B/A/ PREMARA BLUE CROSS BLUE SHIELD OF ALASKA AND PREMERA BLUE CROSS OF WASHINGTON; BLUE CROSS BLUE SHIELD OF ARIZONA; USABLE MUTUAL INSURANCE COMPANY, D/B/A/ ARKANSAS BLUE CROSS BLUE SHIELD; WELLPOINT, INC., D/B/A/ ANTHEM BLUE CROSS LIFE AND HEALTH INSURANCE COMPANY, BLUE CROSS OF CALIFORNIA, BLUE CROSS OF SOUTHERN CALIFORNIA, BLUE CROSS OF NORTHERN CALIFORNIA, ROCKY MOUNTAIN HOSPITAL AND MEDICAL SERVICE INC. AS ANTHEM BLUE CROSS BLUE SHIELD OF COLORADO AND ANTHEM BLUE CROSS BLUE Case 2:13-cv-20000-RDP Document 244 Filed 12/19/14 Page 2 of 319 SHIELD OF NEVADA, ANTHEM BLUE CROSS BLUE SHIELD OF CONNECTICUT, BLUE CROSS BLUE SHIELD OF GEORGIA, ANTHEM BLUE CROSS BLUE SHIELD OF INDIANA, ANTHEM BLUE CROSS BLUE SHIELD OF KENTUCKY, ANTHEM BLUE CROSS BLUE SHIELD OF MAINE, ANTHEM BLUE CROSS BLUE SHIELD OF MISSOURI, RIGHTCHOICE MANAGED CARE, INC., HMO MISSOURI INC., ANTHEM HEALTH PLANS OF NEW HAMPSHIRE AS ANTHEM BLUE CROSS BLUE SHIELD OF NEW HAMPSHIRE, EMPIRE HEALTHCHOICE ASSURANCE, INC. AS EMPIRE BLUE CROSS BLUE SHIELD, COMMUNITY INSURANCE COMPANY AS ANTHEM BLUE CROSS BLUE SHIELD OF OHIO, ANTHEM BLUE CROSS AND BLUE SHIELD OF VIRGINIA, AND ANTHEM BLUE CROSS BLUE SHIELD OF WISCONSIN; CALIFORNIA PHYSICIANS’ SERVICE INC., D/B/A BLUE SHIELD OF CALIFORNIA; HIGHMARK HEALTH SERVICES, D/B/A/ HIGHMARK BLUE CROSS BLUE SHIELD OF DELAWARE, HIGHMARK BLUE CROSS BLUE SHIELD, HIGHMARK BLUE SHIELD, AND HIGHMARK BLUE CROSS BLUE SHIELD OF WEST VIRGINIA; CAREFIRST BLUECROSS BLUESHIELD, D/B/A/ GROUP HOSPITALIZATION AND MEDICAL SERVICES AND CAREFIRST BLUE CROSS BLUE SHIELD OF MARYLAND; BLUE CROSS BLUE SHIELD OF FLORIDA; HAWAI’I MEDICAL SERVICE ASSOCIATION D/B/A/ BLUE CROSS AND BLUE SHIELD OF HAWAI’I; BLUE CROSS OF IDAHO HEALTH SERVICE INC.; CAMBIA HEALTH SOLUTIONS, INC., D/B/A/ REGENCE BLUE SHIELD OF IDAHO, REGENCE BLUE CROSS BLUE SHIELD OF OREGON, REGENCE BLUE CROSS BLUE SHIELD OF UTAH, AND REGENCE Case 2:13-cv-20000-RDP Document 244 Filed 12/19/14 Page 3 of 319 BLUE SHIELD OF WASHINGTON; HEALTH CARE SERVICE CORPORATION, D/B/A/ BLUE CROSS BLUE SHIELD OF ILLINOIS, BLUE CROSS BLUE SHIELD OF NEW MEXICO, BLUE CROSS BLUE SHIELD OF OKLAHOMA, AND BLUE CROSS BLUE SHIELD OF TEXAS; WELLMARK, INC., D/B/A/ WELLMARK BLUE CROSS BLUE SHIELD OF IOWA AND WELLMARK BLUE CROSS BLUE SHIELD OF SOUTH DAKOTA; BLUE CROSS BLUE SHIELD OF KANSAS; LOUISIANA HEALTH SERVICE AND INDEMNITY COMPANY D/B/A/ BLUE CROSS BLUE SHIELD OF LOUISIANA; BLUE CROSS BLUE SHIELD OF MASSACHUSETTS; BLUE CROSS BLUE SHIELD OF MICHIGAN; BLUE CROSS BLUE SHIELD OF MINNESOTA; BLUE CROSS BLUE SHIELD OF MISSISSIPPI; BLUE CROSS BLUE SHIELD OF KANSAS CITY; BLUE CROSS BLUE SHIELD OF MONTANA; BLUE CROSS BLUE SHIELD OF NEBRASKA; HORIZON BLUE CROSS BLUE SHIELD OF NEW JERSEY; HEALTHNOW NEW YORK INC., D/B/A/ BLUE CROSS BLUE SHIELD OF WESTERN NEW YORK AND BLUE SHIELD OF NORTHEASTERN NEW YORK; EXCELLUS BLUE CROSS BLUE SHIELD; BLUE CROSS BLUE SHIELD OF NORTH CAROLINA; NORIDIAN MUTUAL INSURANCE COMPANY D/B/A/ BLUE CROSS BLUE SHIELD OF NORTH DAKOTA; HOSPITAL SERVICE ASSOCIATION OF NORTHEASTERN PENNSYLVANIA D/B/A/ BLUE CROSS OF NORTHEASTERN PENNSYLVANIA; CAPITAL BLUE CROSS; INDEPENDENCE BLUE CROSS; TRIPLE- S SALUD; BLUE CROSS BLUE SHIELD OF RHODE ISLAND; BLUE CROSS BLUE SHIELD OF SOUTH CAROLINA; BLUE CROSS BLUE SHIELD OF TENNESSEE; BLUE CROSS BLUE SHIELD OF Case 2:13-cv-20000-RDP Document 244 Filed 12/19/14 Page 4 of 319 VERMONT; BLUE CROSS BLUE SHIELD OF WYOMING; and BLUE CROSS AND BLUE SHIELD ASSOCIATION, Defendants. SUBSCRIBER TRACK AMENDED CONSOLIDATED CLASS ACTION COMPLAINT Case 2:13-cv-20000-RDP Document 244 Filed 12/19/14 Page 5 of 319 TABLE OF CONTENTS NATURE OF THE CASE .................................................................................................................................3 JURISDICTION AND VENUE ........................................................................................................................7 PARTIES .........................................................................................................................................................10 Plaintiffs ........................................................................................................................................................10 Defendants ....................................................................................................................................................14 TRADE AND COMMERCE ...........................................................................................................................55 CLASS ACTION ALLEGATIONS ................................................................................................................55 FACTUAL BACKGROUND ..........................................................................................................................63 History of the Blue Cross and Blue Shield Plans and of BCBSA ................................................................63 Development of the Blue Cross Plans ................................................................................................63 Development of the Blue Shield Plans ...............................................................................................65 Creation of the Blue Cross and Blue Shield Association ...................................................................66 Allegations Demonstrating Control of BCBSA By Member Plans ..............................................................69 License Agreements and Restraints on Competition ....................................................................................70 Horizontal Agreements .................................................................................................................................73 The Horizontal Agreements Not To Compete ..............................................................................................75 The Anticompetitive Acquisition Restrictions..............................................................................................82 The BCBSA Licensing Agreements Have Reduced Competition In Regions Across The United States ...84 Supra-Competitive Premiums Charged by BCBS Plans ..............................................................................87 The Widespread Use By BCBSA Licensees Of Anticompetitive Most Favored Nation Clauses ................88 Individual Blue Plans’ Market Power In Relevant Markets .........................................................................93 Relevant Product Market: ...................................................................................................................93 Relevant Geographic Markets: ...........................................................................................................96 Alabama ..............................................................................................................................................96 Arkansas .............................................................................................................................................99 California ..........................................................................................................................................101 Florida...............................................................................................................................................104 Hawai’i .............................................................................................................................................106 i Case 2:13-cv-20000-RDP Document 244 Filed 12/19/14 Page 6 of 319 Illinois ...............................................................................................................................................108 Louisiana ..........................................................................................................................................110 Michigan ...........................................................................................................................................113 Mississippi ........................................................................................................................................115 Missouri ............................................................................................................................................117 New Hampshire ................................................................................................................................120 North Carolina ..................................................................................................................................122