IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 14-40854

SANGER INSURANCE AGENCY, 

 Plaintiff - Appellant

v.

HUB INTERNATIONAL, LIMITED; HUB INTERNATIONAL MIDWEST, 

LIMITED, 

 Defendants - Appellees

Appeal from the United States District Court 

for the Eastern District of Texas

Before JONES, SMITH, and COSTA, Circuit Judges.

GREGG COSTA, Circuit Judge:

The liability issues that arise in antitrust litigation often involve 

“complicated legal, factual, and technical (particularly economic) questions.” 

MANUAL FOR COMPLEX LITIGATION (Fourth) § 30 (2004). But even before 

reaching the merits of this antitrust case involving the insurance market for 

veterinarians, we are faced with two difficult threshold determinations. First, 

was the Plaintiff, an insurance broker that desired to sell professional liability 

insurance to veterinarians, sufficiently prepared to enter that market to 

establish antitrust standing? Second, does the McCarran-Ferguson Act 

exempt from federal antitrust scrutiny the challenged conduct involving 

United States Court of Appeals

Fifth Circuit

FILED

September 23, 2015

Lyle W. Cayce

Clerk

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exclusive dealing between an insurance broker and insurers? We conclude that 

Plaintiff has established antitrust standing, but that the alleged conduct does 

implicate allocation of risk in the insurance market and thus the McCarranFerguson exemption. The consequence is that the dismissal of the federal 

antitrust claims is affirmed, but the dismissal of the state antitrust and 

tortious interference claims is reversed.

I.

Plaintiff Sanger Insurance Agency claims that it was forced to abandon 

certain prospective business plans after coming up against the anticompetitive 

practices of HUB International, a major player in the nationwide market for 

veterinary insurance.1 Specifically, Sanger complains of activity related to an 

insurance program (the “Program”) issued through the American Veterinary 

Medical Association Professional Liability Insurance Trust for which HUB2

serves as the Broker of Record and Administrator. 

The Program offers professional liability, workers’ compensation, and 

other insurance products nationwide to members of the American Veterinary 

Medical Association, the Program’s sponsor. “The Program is organized as a 

risk purchasing group” that is “administered through one master insurance 

policy issued to the [Trust],” under which individual members of the 

association may obtain certificates of insurance. ROA 1886–87. HUB’s role 

includes marketing, servicing insureds, monitoring claims, developing policy 

forms, and negotiating rates. Policies offered through the Program are 

underwritten by various insurance companies. During the time relevant to 

this case, Zurich American Insurance Company offered professional liability 

 

1 Given the summary judgment posture of the case, this discussion of the facts resolves 

all disputed issues in favor of Sanger, the nonmovant.

2 “HUB” refers collectively to HUB International, Limited, and HUB International 

Midwest, Limited. 

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coverage to the Program under one master insurance policy; The Hartford

Financial Services Groups, Inc., and Travelers Indemnity Company provided

the Program’s property, general liability, and workers’ compensation 

insurance; and Continental Casualty Company underwrote an employer’s 

practice liability policy for Program members. The insurers contract with HUB 

for short terms to underwrite policies. 

Sanger claims that the Program accounts for a 90% share of the market 

for veterinary professional liability insurance and “constitutes a monopoly by 

which [HUB] control[s] the market for selling the insurance products in 

question to veterinarians throughout the United States.” It argues that “HUB 

has taken a number of aggressive steps to both maintain and strengthen its 

dominance in that market.” For example, HUB allegedly entered into a deal 

with the American Animal Hospital Association to keep it from sponsoring a 

competing program. HUB also purportedly developed a strategy aimed at 

preventing state veterinary associations from working with competitors to 

develop competing programs. Most relevant to this appeal, Sanger asserts that 

HUB entered into exclusive dealing arrangements with its insurers to prevent 

them from writing veterinary insurance through other brokers.

Sanger wanted to be one of those brokers. In 2007, Jeffrey Springer 

bought the company now known as Sanger, which had been doing business in 

North Texas for decades selling various types of insurance including livestock 

insurance. In 2011, Dr. Alan Donnell, an equine veterinarian, and Joe Bear, a 

former employee of The Hartford in its livestock and agriculture division,3 each 

purchased a 24.5% interest in the company for $196,500 with the goal of

entering the veterinary professional insurance business selling insurance to 

veterinarians nationwide. They planned to begin by offering insurance to 

 

3 Bear also served as the general manager of Donnell’s veterinary practice. 

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equine and large-animal veterinarians, and to eventually expand to smallanimal veterinarians. Prior to their investment in Sanger, Bear and Donnell 

had conducted little investigation into the viability of the market, but planned 

to take advantage of Donnell’s network and experience. After the purchase, 

Bear took the most active role in the firm, working 15–20 hours per week. 

Sanger began by approaching the Texas Equine Veterinary Association, 

which Sanger already represented for the Association’s own organizational 

insurance needs, about having the Association endorse Sanger to sell 

insurance to its members. Sanger developed its relationship with the 

Association as a sponsor of its 2011 and 2012 conventions, and claims that it 

was told by the Association’s president that it wanted Sanger to be the 

Association’s “official insurance agency.” At least one insurer, Continental, 

expressed interest in underwriting such a program at the 2012 convention. 

One of its “sales specialists . . . recommended a co-sponsorship between 

[Continental] and Sanger at the upcoming TEVA convention” and stated that 

the company “potentially would obtain approximately $250,000 in annual 

premium based on Sanger’s ‘becom[ing] [the state association’s] only insurance 

contract for the 300 members.’” 

Sanger also claims to have had extensive discussions with the small 

group of insurers willing to underwrite veterinary insurance, including 

Continental, The Hartford, Travelers, and Zurich. Sanger was able to obtain 

insurance coverage from Continental for some equine and small-animal 

veterinarians, apparently amounting to $59,000 in new business. It was also 

in discussions with other insurers. 

HUB learned that Sanger was soliciting business from its insurers. It 

reached out to the insurers to find out whether they were underwriting 

coverage for Sanger and expressed its concerns about their offering coverage 

outside of the Program. HUB also objected to its insurers’ increasing Program 

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premiums, apparently based on the threat Sanger posed as a competitor. 

Noting that the Texas Equine Veterinary Association “is involved with another 

agent in Texas looking to put an insurance program together,” HUB told an 

employee of The Hartford that “[h]itting [clients] with a huge increase would 

only drive them to [Sanger] and confirm the need for another insurance 

program in the state.” In contrast, there is no indication that HUB objected to 

rate increases for any insureds who were not members of the Texas association. 

Sanger further claims that it was told by Zurich, The Hartford, Travelers, and 

Continental that they had an exclusive arrangement with HUB. Claiming it 

had no other options, Sanger abandoned its efforts when it failed to make 

headway in the veterinary insurance industry. 

Sanger sued HUB and its parent company for violations of sections 1 and 

2 of the Sherman Act, sections 15.05(a)–(c) of the Texas Free Enterprise and 

Antitrust Act, sections 541.003 and 541.054 of the Texas Insurance Code which 

prohibit unfair competition and deceptive acts in the insurance business, and 

for tortious interference with prospective business relations.4 Sanger claims 

that HUB monopolized and restrained trade in the market for “the selling and 

servicing” of professional liability and other insurance for veterinarians 

throughout the United States, both as a monopoly and in combination with the 

insurers (who have never been parties in this suit). HUB moved for summary 

judgment.

The district court granted the motion, dismissing Sanger’s case. It held 

that the McCarran-Ferguson Act exempted HUB’s alleged anticompetitive 

activity from federal antitrust law on the grounds that (1) the alleged 

anticompetitive conduct constitutes the business of insurance, (2) Texas 

 

4 Sanger also brought claims under section 3 of the Clayton Act, but later abandoned 

them. 

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regulates the business of insurance, and (3) HUB’s activities do not fit within

the “boycott, coercion, or intimidation” exception to the McCarran-Ferguson 

Act exemption. It dismissed Sanger’s Texas antitrust claims, holding that the 

company lacked standing because it “was not prepared to enter the market.” 

The court then held that because Sanger’s antitrust claims failed, Sanger had 

not shown the independent tort necessary to establish its tortious interference 

claim. Finally, it held that, for the same reasons that HUB’s activity did not 

constitute a boycott under the McCarran-Ferguson Act, it did not constitute a 

boycott under the Texas Insurance Code. Sanger appeals each of these rulings.

II.

We begin with the claims that are at the center of Sanger’s complaint: 

that HUB violated federal and state antitrust law when, by entering into 

exclusive arrangements with the companies willing to underwrite these 

policies, it prevented competitors from brokering veterinary insurance policies.

The district court dismissed the case on two grounds—standing and the 

McCarran-Ferguson Act exemption—that do not require consideration of the 

merits. Although the district court applied its holding on standing only to 

Sanger’s state claims, it did so by relying on federal case law that applies 

equally to Sanger’s federal claims. See Tex. Bus. & Com. Code § 15.04 

(directing courts to interpret Texas antitrust law “in harmony with federal 

judicial interpretations” of federal antitrust law); Norris v. Hearst Trust, 500 

F.3d 454, 463 n.13 (5th Cir. 2007) (applying federal antitrust standing 

principles to Texas antitrust law); McPeters v. LexisNexis, 11 F. Supp. 3d 789, 

796–97 (S.D. Tex. 2014) (same). We therefore first address the standing issue,

as affirming on that basis would warrant dismissal of both the federal and 

state antitrust claims.

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A. Antitrust Standing

Because “Congress did not intend the antitrust laws to provide a remedy

in damages for all injuries that might conceivably be traced to an antitrust 

violation,” Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of 

Carpenters, 459 U.S. 519, 535 (1983) (quoting Hawaii v. Standard Oil Co. of 

Cal., 405 U.S. 251, 263 n.14 (1972)), an antitrust plaintiff must do more than 

meet the requirements of Article III to establish its standing to bring suit. See 

Sunbeam Television Corp. v. Nielsen Media Research, Inc., 711 F.3d 1264, 1270 

(11th Cir. 2013). “Standing to pursue an antitrust suit exists only if a plaintiff 

shows: 1) injury-in-fact, an injury to the plaintiff proximately caused by the 

defendants’ conduct; 2) antitrust injury; and 3) proper plaintiff status, which 

assures that other parties are not better situated to bring suit.” Jebaco, Inc. v. 

Harrah’s Operating Co., Inc., 587 F.3d 314, 318 (5th Cir. 2009) (quoting 

Doctor’s Hosp. of Jefferson, Inc. v. Se. Med. Alliance, 123 F.3d 301, 305 (5th 

Cir. 1997)). HUB’s arguments concern the first element of antitrust standing: 

it claims that because Sanger had not yet actually begun brokering veterinary 

insurance, it could not have been injured by HUB’s alleged efforts to maintain 

its stranglehold on the industry.5 See Jayco Sys., Inc. v. Savin Bus. Machs.

Corp., 777 F.2d 306, 313–14 (5th Cir. 1985) (noting that the rule denying 

standing to parties whose “entirely speculative” business plans were thwarted 

 

5 A plaintiff who has not suffered an injury in fact traceable to the defendant’s conduct 

also lacks Article III standing. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992). 

Although Article III standing’s traceability requirement is less strict than antitrust 

standing’s proximate cause requirement, see K.P. v. LeBlanc, 627 F.3d 115, 123 (5th Cir. 

2010) (“Tracing an injury is not the same as seeking its proximate cause”), a plaintiff’s 

preparedness to enter a market bears on both Article III and antitrust standing because it 

goes to whether the plaintiff suffered an injury in fact, cf. Joint Stock Soc’y v. UDV N. Am., 

Inc., 266 F.3d 164, 176 (3d Cir. 2001) (holding that plaintiffs who had not begun to market 

their product and were not prepared to do so lacked Article III standing for false advertising 

claims).

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“denies recovery to those persons who . . . could not have suffered injury in 

fact”).6

Nascent competitors excluded from the market by anticompetitive 

behavior pose a dilemma. On the one hand, a plaintiff who never entered a 

particular market but would have if not for an antitrust violation can 

undoubtedly challenge an antitrust violation in court. In fact, such firms may 

be prime targets for antitrust violations, because “early exclusion may be far 

cheaper than ruining or disciplining a recent entrant who has become 

established.” Areeda & Hovenkamp, ANTITRUST LAW, ¶ 349a, at 258 (4th ed. 

2014)). Too restrictive a view of standing would immunize incumbents from 

antitrust scrutiny when they only aim their efforts at new entrants (who may 

pose the primary threat to monopolists). On the other hand, an overly

permissive standing doctrine would allow mere bystanders who lack

particularized injury to benefit from another party’s antitrust violation.

To balance these concerns, we have held that “one need not have an 

actual going business to establish a private antitrust injury,” but that a 

plaintiff must have had “(1) an intention to enter the business, and (2) a 

showing of preparedness to enter the business.” Hayes v. Solomon, 597 F.2d 

958, 973 (5th Cir. 1979). There is no question regarding the sincerity of

Sanger’s ambitions to broker professional insurance for vets; HUB only 

disputes the second element, Sanger’s preparedness. 

In analyzing this standing issue, we assume that Sanger’s allegations of 

exclusive dealing amount to an antitrust violation. See Doctor’s Hosp., 123 

F.3d at 306 (“Standing analysis can be most helpful in the 

 

6 Some other courts have subsumed the injury-in-fact and proximate cause component 

under the “efficient enforcer” or “proper plaintiff” element of the standing test. See, e.g., 

Sunbeam Television, 711 F.3d at 1272 (analyzing preparedness as a question of the plaintiff’s 

status as an “efficient enforcer”).

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atypical antitrust case if the court assumes an antitrust violation has occurred 

and then determines whether the plaintiff has suffered injury-in-fact, is a 

proper plaintiff and has experienced ‘antitrust injury’ from the violation.”); 

Areeda & Hovenkamp, supra, ¶ 335f, at 91 (“[T]he court should assume the 

existence of a violation and then ask whether the . . . standing elements are 

shown.”). And like other issues, standing may present disputed issues of fact 

which must be resolved at the summary judgment stage in favor of the 

nonmoving party—in this case, Sanger. Gas Utilities Co. of Alabama, Inc. v. 

S. Natural Gas Co., 996 F.2d 282, 283 (11th Cir. 1993) (per curiam) (applying 

this standard in an antitrust standing case contesting preparedness); cf. Lujan, 

504 U.S. at 561 (explaining that Article III standing can be challenged at each

procedural stage of a case, including the pleading stage, summary judgment, 

and trial).

We note at the outset of our standing analysis that this case is unlike 

many of the cases in which a plaintiff’s preparedness is challenged. Sanger did 

not just attempt to broker veterinary insurance, but actually succeeded in 

doing so, albeit on a small scale. The company had begun selling Continental 

professional liability policies to approximately ten equine and large-animal 

veterinarians before HUB purportedly forced Continental to stop issuing the 

policies. Its failure to achieve its ultimate goal of competing with HUB on a 

larger scale does not necessarily deprive it of standing. After all, if it had fully 

succeeded, it would have no injury about which to complain. 

But even if Sanger’s successful first steps were too far removed from its 

ultimate ambitions for it to be deemed an actual market entrant, there is 

sufficient evidence to allow this lawsuit to proceed beyond the summary 

judgment stage. In assessing preparedness, “courts have drawn the line at the 

point where promotion transcends the level of hopes, desires, and expectations, 

and reaches a certain stage of maturity and concreteness, a stage where it is 

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accompanied by certain indicia of ultimate success.” Hecht v. Pro-Football, 

Inc., 570 F.2d 982, 994 (D.C. Cir. 1977). That description might sound good, 

but actually tells us little about how we determine when a business plan has 

crossed the line from a hope or desire into a state of maturity. Our court has 

framed the ultimate question as whether the plaintiff would have been able to 

take the steps it claimed it was precluded from taking, assuming no violation 

had occurred. See Jayco, 777 F.2d at 314 (“Because Savin’s refusal to supply 

machines is the gravamen of Jayco’s complaint, the fact that Jayco could 

nfoundot have acquired the machines from Savin even had it satisfied all of 

the above elements is not dispositive. Rather, the question is whether, 

assuming Savin had been willing to supply Jayco with the necessary machines, 

Jayco would have been prepared to bid them.”). Thus, the question we must 

answer is whether, assuming HUB had not kept Sanger out of the market 

through its illegal conduct, Sanger would have been prepared to broker 

veterinary insurance. We consider the following factors in making that

assessment:

the ability of plaintiff to finance the business and to purchase the 

necessary facilities and equipment; the [consummation] of 

contracts by the plaintiff; affirmative action by plaintiff to enter 

the business; and the background and experience of plaintiff in the 

prospective business.

Jayco, 777 F.2d at 314 (quoting Martin v. Phillips Petro. Co., 365 F.2d 629, 634

(5th Cir. 1966)).

Acknowledging that Sanger “had an idea and intent to execute,” the 

district court nonetheless denied standing on the ground that “no concrete 

actions other than some preliminary discussions and inquiries took place.”7 

 

7 The district court’s ruling on preparedness grounds likely came as a surprise to 

Sanger, as HUB’s motion for summary judgment addressed the issue in a single short 

paragraph. 

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ROA 837. It observed that Sanger made no agreements with the Texas Equine 

Veterinary Association to offer insurance coverage to the organization’s 

members, and that while two of Sanger’s owners had experience in the 

veterinary and insurance industries, none “had any experience in brokering a 

program for veterinary insurance.” ROA 837–38. 

Our cases that have declared a nascent competitor insufficiently 

prepared to enter the market did so with far less evidence of preparation than 

Sanger presents here. In Jayco, for example, we held that a firm whose owner 

admitted that it was not in a financial position to buy the copying machines 

needed to bid on a contract lacked standing, noting that the possibility of 

obtaining financing was not enough. 777 F.2d at 314–16. In Hayes, we held 

that plaintiffs who were thwarted in their attempt to develop a shopping center 

lacked standing when they “made no significant effort” toward their goal, and 

did not even draw up architectural plans until after bringing suit. 597 F.2d at 

974. And in Martin, we held that a plaintiff with no relevant experience, no 

financing, and who had made no investments could not sue the defendant for 

hindering his plan to acquire a gas plant. 365 F.2d at 634.

On a number of fronts, Sanger was more prepared to enter the market 

than the plaintiffs in Jayco, Hayes, and Martin. Sanger had an office and staff 

that it claims would only have needed to expand modestly to support its 

business plan, and HUB has not identified any facilities or equipment that 

Sanger would have needed to enter the market but was not prepared to obtain. 

Compare Jayco, 777 F.2d at 314 (“Jayco’s failure to show that it could have 

financed the purchase of the machines convince us that Jayco lacked the 

preparedness to bid.”). The company took affirmative steps, including 

marketing its services to members of the Texas Equine Veterinary Association, 

asking Continental to sponsor Sanger at the Association’s 2012 convention, 

and conducting discussions internally and with veterinarians, insurance 

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companies, brokers, and consultants about entering the market. Sanger did 

not identify financing for expansion into the veterinary insurance market, but 

brokering insurance is not a capital-intensive business like constructing a 

shopping mall or gas plant in which the financing obstacles are substantial. 

See Sunbeam Television, 711 F.3d at 1273 (“The preparedness requirement is 

particularly important for ‘capital intensive’ industries.”); Cable Holdings of 

Ga., Inc. v. Home Video, Inc., 825 F.2d 1559, 1563 (11th Cir. 1987) (holding 

that the plaintiff lacked preparedness to expand given the capital-intensive 

nature of the cable industry). And although Sanger did not have substantial 

experience in the niche business of veterinary insurance, its owners had 

relevant experience as an insurance specialist, an equine veterinarian, and a 

lawyer who had operated Sanger and sold insurance in a number of states. 

Finally, in contrast to plaintiffs in cases such as Hayes and Martin who were 

likely years away from their first sales, Sanger had some minor success selling 

Continental policies before HUB allegedly forced Continental to stop. That

history of sales suggests that Sanger was able to do the work necessary to 

expand further.

While we can easily conclude that Sanger was more prepared to enter 

the market than were the plaintiffs in cases in which we found no standing, 

that does not fully answer whether Sanger’s greater degree of preparedness is 

enough to clear the standing hurdle. HUB argues that Sanger lacks standing 

because it never presented a group of veterinarians to an insurer in order to 

get coverage for a group deal, an action that it claims would have been a 

prerequisite to successfully brokering insurance on a large scale, group basis.

But this would require too much. The degree to which a business must take 

affirmative steps is mitigated by the impact of the antitrust violation, which 

we assume to have occurred when analyzing standing. Thus nascent 

competitors need not “pay a courtroom entrance fee in the form of an

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expenditure of substantial resources in a clearly futile competitive gesture.” 

Fleer Corp. v. Topps Chewing Gum, Inc., 415 F. Supp. 176, 180 (E.D. Pa. 1976); 

see also United Indus., Inc. v. Eimco Process Equip. Co., 61 F.3d 445, 449 (5th 

Cir. 1995) (“In the refusal to deal context, proof of futility satisfies causation 

when a demand is lacking.”). Without access to insurers, and to the rates and 

coverage options offered by those insurers, it would have been futile to take 

these steps. Why would a vet agree to broker its insurance through Sanger if 

it did not know the terms of that insurance?

This is a critical distinction between this case and those in which we 

found no standing; the insufficient preparedness in those cases flowed from 

obstacles unrelated to the alleged anticompetitive conduct. The lack of 

financing deemed fatal in Jayco was not the fault of the manufacturer 

defendant that allegedly refused to sell copiers to the plaintiff. 777 F.2d at 

314–15. The lack of financing to acquire a gas plant in Martin also could not 

be attributed to the defendant. 365 F.2d at 633–34. And the Hayes plaintiff’s

failure to obtain financing of $14 million (in early 1970s dollars) or even draw 

up building plans for a shopping center was not the fault of the defendants who

a jury found prevented a movie theater from being included in that mall. 

Hayes, 597 F.2d at 974–75. The primary challenge in the middleman business 

of brokering is not capital but relationships. Sanger’s contention is that HUB’s 

exclusive dealing with major insurers in the veterinary insurance industries 

prevented Sanger from leveraging its relationships and offering policies. The 

allegation of anticompetitive conduct—which we must assume to be true for 

purposes of the standing inquiry—thus strikes directly at the obstacle that 

kept Sanger from entering the market. Absent the exclusive dealing 

arrangement that Sanger contends prevented it from brokering policies, a 

factfinder could conclude that Sanger was prepared to enter at least the Texas 

market. See Jayco, 777 F.2d at 314 (explaining that standing inquiry turns on 

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whether plaintiff would have been able to enter the market assuming 

elimination of the anticompetitive obstacle).

That conclusion is reinforced by evidence showing that HUB viewed 

Sanger as a threat. Though HUB now claims Sanger was unprepared to 

compete for business, HUB recognized that the Texas Equine Veterinary 

Association was “involved” with Sanger in trying “to put an insurance program 

together” and objected to its insurers increasing premiums out of a fear that 

this would “drive [clients] to [Sanger] and confirm the need for another 

insurance program in the state.” Although an incumbent may well misjudge 

the threat a new entrant poses, the views of those actually in the market

should be considered. The fact that HUB aimed its efforts at Sanger after 

expressing its concern about the competitive threat the company posed bolsters 

Sanger’s argument that it was prepared to enter the market. So do the 

comments of a Continental sales specialist, discussed above, that reflect her 

view that Sanger was capable of marketing group veterinary insurance.

We therefore conclude that by pursuing a deal with a professional 

association of veterinarians and even achieving some success in its initial 

efforts, Sanger went beyond “the most basic preparatory steps” that we require 

of nascent competitors. See Ashley Creek Phosphate Co. v. Chevron USA, Inc., 

315 F.3d 1245, 1258 (10th Cir. 2003). Sanger has produced sufficient evidence 

of preparedness to survive the standing inquiry at the summary judgment 

stage, and we reverse the district court’s ruling to the contrary.

B. McCarran-Ferguson Act Exemption

In light of our conclusion that Sanger has presented a fact issue on 

whether it was sufficiently prepared to enter the market to establish antitrust 

standing, we must address whether the challenged activities are immune from 

federal antitrust scrutiny under the McCarran-Ferguson Act. The Act was a 

response to United States v. South-Eastern Underwriters Ass’n, a criminal 

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price-fixing case involving premiums and commissions for fire insurance in 

which the Supreme Court departed from its earlier view that insurance was 

not commerce subject to federal regulation. 322 U.S. 533, 552–53 (1944). 

Enacted the year after that ruling, McCarran-Ferguson restored the primacy 

of the states in regulating insurance by providing that general federal laws not 

directed at insurance do not “invalidate, impair, or supersede any law enacted 

by any State for the purpose of regulating the business of insurance.” 15 U.S.C. 

§ 1012(b). This has been aptly labelled a “reverse preemption” clause because 

it has the effect of displacing federal law when a state maintains its traditional 

role of regulating insurance. See, e.g., Safety Nat. Cas. Corp. v. Certain 

Underwriters at Lloyd’s, 587 F.3d 714, 720 (5th Cir. 2009) (en banc).

Although the McCarran-Ferguson Act’s reverse preemption clause 

applies generally to “Act[s] of Congress” that do not “specifically relate[] to the 

business of insurance,” it also not surprisingly includes language directed at 

the antitrust laws that gave rise to its enactment. 15 U.S.C. § 1012(b). It 

provides that the Sherman Act is “applicable to the business of insurance [only] 

to the extent that such business is not regulated by State law.” Id. Antitrust 

law remains applicable, however, to any “act of boycott, coercion, or 

intimidation.” Id. § 1013(b). Thus, the McCarran-Ferguson Act exempts from 

antitrust law activities that (1) constitute the “business of insurance,” (2) are 

regulated by state law, and (3) do not amount to acts of “boycott, coercion or 

intimidation.” See Union Labor Life Ins. Co. v. Pireno, 458 U.S. 119, 124 

(1982); Arroyo-Melecio v. Puerto Rican Am. Ins. Co., 398 F.3d 56, 66 (1st Cir. 

2005).

Given this federalism role of the McCarran-Ferguson Act in precluding 

federal antitrust regulation that might undermine state regulation of 

insurance, it is not surprising that Texas antitrust law, despite mirroring 

federal law in most respects, does not incorporate a similar exemption. See 

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Tex. Bus. & Com. Code § 15.05(g) (“[T]he McCarran-Ferguson Act does not 

serve to exempt activities under this Act.” (citation omitted)). Whatever issues

might arise from applying Texas antitrust law to the insurance industry that 

the state separately regulates, doing so does not upset the federal-state 

balance. Whether HUB is entitled to the exemption thus has no effect on 

Sanger’s state antitrust claims.

With respect to the federal claims, the district court found in favor of 

HUB on each element of the exemption and thus granted summary judgment 

on the Sherman Act claims. We address each issue in turn.

1. The Business of Insurance

The scope of the exemption from federal antitrust scrutiny turns largely 

on the phrase “the business of insurance.” As with the notoriously terse 

language in the Sherman Act itself, see Kimble v. Marvel Entertainment, LLC, 

135 S. Ct. 2401, 2412 (2015) (“Congress, we have explained, intended that law’s 

reference to ‘restraint of trade’ to have ‘changing content,’ and authorized 

courts to oversee the term’s ‘dynamic potential.’”), the McCarran-Ferguson Act 

necessarily leaves many questions to be answered through the development of 

case law. The law’s “primary concern” is protecting “cooperative ratemaking 

efforts” like the fixing of premiums at issue in South-Eastern Underwriters,8

and the Supreme Court has emphasized that “[t]he exemption is for the 

‘business of insurance,’ not the ‘business of insurers.’” Grp. Life & Health Ins. 

Co. v. Royal Drug Co., 440 U.S. 205, 211, 221 (1979) (holding that an agreement 

between an insurer and pharmacies to set the prices of prescription drugs was 

not exempt). To hold otherwise would capture “almost every business decision 

 

8 This primary concern followed from a “widespread view that it is very difficult to 

underwrite risks in an informed and responsible way without intra-industry cooperation.” 

Grp. Life & Health Ins. Co. v. Royal Drug Co., 440 U.S. 205, 221 (1979).

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of an insurance company.” See In re Ins. Brokerage Antitrust Litig., 618 F.3d 

300, 352 (3d Cir. 2010) (citing Royal Drug, 440 U.S. at 213–17).

The Supreme Court has “identified three criteria relevant in determining 

whether a particular practice is part of the ‘business of insurance’ exempted 

from the antitrust laws” under the Act:

first, whether the practice has the effect of transferring or 

spreading a policyholder’s risk; second, whether the practice is an 

integral part of the policy relationship between the insurer and the 

insured; and third, whether the practice is limited to entities 

within the insurance industry.

Pireno, 458 U.S. at 129. The parties dispute only the first two criteria; the 

third plainly applies. Furthermore, although “[n]one of these criteria is 

necessarily determinative in itself,” id., the “underwriting or spreading of risk 

[is] an indispensable characteristic of insurance.” Royal Drug, 440 U.S. at 212. 

The absence of the first criterion—that “the practice has the effect of 

transferring or spreading a policyholder’s risk”—is thus “decisive.” See In re 

Ins. Brokerage, 618 F.3d at 352, 356.

Before applying these standards to this case, we address disagreement

about the nature of Sanger’s allegations. HUB appears to characterize 

Sanger’s suit mainly as a challenge to HUB’s role as the exclusive broker for 

members of the American Veterinary Medical Association. Sanger responds 

that it does not seek to broker insurance through the Association’s Program or 

otherwise challenge that HUB arrangement, but rather only challenges HUB’s 

use of its market power to prevent insurers from working with other brokers 

who seek to insure members of other veterinary associations. We rely on 

Sanger’s characterization of its claims, as it is supported by the allegations in 

the complaint and evidence in the summary judgment record, and because we 

must accept the plaintiff’s theory of the case in conducting the McCarranFerguson inquiry. See In re Ins. Brokerage, 618 F.3d at 356 (“[T]he precise 

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characterization of the defendants’ conduct can be dispositive.”); Am. Standard 

Life & Acc. Ins. Co. v. U.R.L., Inc., 701 F. Supp. 527, 532 (M.D. Pa. 1988) 

(“Determination of whether defendants’ alleged conduct is exempt ‘depends 

largely upon how one defines the “practice”’ which is being challenged. . . . [W]e 

must look to the gravamen of the complaint.”) (quoting FTC v. Mfrs. Hanover 

Consumer Servs., Inc., 567 F. Supp. 992, 994 (E.D. Pa. 1983)).

We therefore ask: do HUB’s alleged exclusive dealing arrangements with 

insurers constitute “the business of insurance”?

In its argument for reversal, Sanger relies primarily on In re Insurance

Brokerage Antitrust Litigation, 618 F.3d 300 (3d Cir. 2010). In that decision, 

an insurance broker’s clients alleged that the broker’s “insurer-partners agreed 

with one another not to compete for incumbent business” (that is, for accounts 

up for renewal). Id. at 340, 356. The court noted that “plaintiffs do not allege 

that defendants’ agreement involved who could receive insurance coverage, or 

the type of coverage they could obtain.” Id. at 357. Instead, “the complaint 

asserts conduct affecting not whether or to what extent a prospective insurance 

purchaser would transfer its risk to an insurer, but merely to which insurer 

that risk would be transferred.” Id. The court also found it significant that 

“defendants’ alleged agreement not to compete for incumbent business . . .

appears to have been unrelated to [the] reliability” of insurers; that is, “it does 

not involve any restriction on the type of coverage offered or the risk profile of 

insurable entities.” Id.

That mention of risk profiles identifies what is different about this case. 

Assuming that HUB is engaged in exclusive dealing that prevents the insurers 

from writing insurance for other group plans, that conduct fortifies the 

Program HUB operates through the American Veterinary Medical Association. 

Keeping a large, geographically and professionally diverse pool of 

veterinarians in the Program—including significant numbers of small- animal, 

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large-animal, mixed, and equine veterinarians—spreads risk. For that reason, 

this case is closer to Feinstein v. Nettleship Co. of L.A., 714 F.2d 928 (9th Cir. 

1983), in which the plaintiffs contested “the agreement between the medical 

association and the insurers to offer the malpractice insurance only to 

members of [the L.A. County Medical Association].” Id. at 932. The Ninth 

Circuit held that this constituted the business of insurance because the 

practice was

demonstrably related to the allocation and spreading of risk, for, 

as the district court pointed out, it defines a pool of insureds over 

which risk is spread. The medical association sought to provide a 

single insurance broker for all of its members in order to assure 

coverage for certain high-risk specialties, thereby distributing risk 

across the membership. The effect is to spread risk across a wide 

area, and that is precisely what the Supreme Court described 

when it formulated the risk spreading criterion.

Id. at 932. Similarly, the scheme alleged by Sanger inevitably involves the 

transferring or spreading of risk because HUB’s role as the broker is to funnel 

a broad risk pool to particular insurers. To the extent Sanger would have been 

able to siphon off HUB’s vets by offering group plans through other veterinary 

associations, its actions would alter the composition of policyholders in the 

Program and thus would likely impact the Program’s ability to spread risk. 

Indeed, although Sanger did not sue the insurance companies, the alleged 

exclusive dealing with HUB serves their interests at least as much, and very 

likely more, than it does HUB’s.

Yet even if viewed more narrowly as just a “broker” case, most courts 

have held that routine dealings between insurers and brokers or agents9 do 

constitute the business of insurance even if that relationship may not be 

 

9 “Bluntly stated, an ‘insurance agent’ represents the insurance company, whereas an 

‘insurance broker’ represents the insured.” 7 Appleman on Insurance 2d: Law of Insurance 

Agents § 47.5, at 326 (1998) (footnotes omitted). 

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“distinctively different from ordinary relationships with dealers marketing a 

product or service.” Areeda & Hovenkamp, supra, ¶ 219b5, at 21–22. The 

Supreme Court has said the following on this issue:

It is clear from the legislative history that the fixing of rates is the 

“business of insurance.” The same conclusion does not so clearly 

emerge with respect to the fixing of agents’ commissions. . . . One 

inference that can be drawn from [the legislative history] is that 

Congress was aware of the existence of agreements regarding 

agents’ commissions, and chose not to include them within the 

exemption for the “business of insurance.” On the other hand, the 

fact that the indictment in South-Eastern Underwriters had 

included a charge that insurance companies did boycott agents 

who insisted on selling other lines of insurance, together with the 

fact that [the boycott exception] presumably removes an exemption 

that, but for its absence, would be conferred by [the Act], suggests 

that the “business of insurance” may have been intended to include 

dealings within the insurance industry between insurers and 

agents.

Royal Drug, 440 U.S. at 224 n.32; see also Areeda & Hovenkamp, supra,

¶ 219b5, at 22 (observing that the “apparent motivation [for the boycott 

exemption] was to protect agents from insurer ‘boycotts’—a protection that 

would be unnecessary if ‘the business of insurance’ did not embrace insureragent agreements in the first place”). In re Insurance Brokerage aside, a 

number of courts of appeals have generally followed the latter inference, and 

have characterized challenged dealings between insurers and agents as the 

business of insurance despite the fact that “an agreement not to compete to sell 

a particular product to a particular customer . . . would be expected . . . in any 

industry.” In re Ins. Brokerage, 618 F.3d at 359. See, e.g., Arroyo-Melecio, 398 

F.3d at 68 (holding that an agreement among insurers “not to use brokers to 

sell policies” is the business of insurance); Owens v. Aetna Life & Cas. Co., 654 

F.2d 218, 226 (3d Cir. 1981) (holding that “authorizing agents to solicit 

individual or group policies” and “accepting or rejecting coverages tendered by 

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brokers” are exempt activities); Black v. Nationwide Mut. Ins. Co., 429 F. Supp. 

458, 463 (W.D. Pa. 1977), aff’d, 571 F.2d 571 (3d Cir. 1978) (“The size of 

insurance commissions paid by companies to agents because they affect rate 

structures, is the ‘business of insurance’.”). So have we. Thompson v. New 

York Life Insurance Co. held that an insurance company’s contract with an 

agent prohibiting him from engaging in “any other business or occupation for 

remuneration or profit” and offering “various incentives . . . so that [he] would 

agree to focus all his entrepreneurial skills solely on selling insurance” was

“within the business of insurance.” 644 F.2d 439, 444 (5th Cir. Unit B May 

1981). The insurers’ alleged agreements with HUB not to insure other brokers’

competing group plans are more fundamental to the risk spreading 

characteristics of insurance than are the noncompete agreement at issue in 

Thompson.

HUB has therefore established the first criterion in assessing whether 

the challenged activity constitutes the business of insurance. For similar 

reasons, the second criterion, “whether the practice is an integral part of the 

policy relationship between the insurer and the insured,” is also met. HUB’s 

conduct as described by Sanger plainly “affect[s] the insurers from which a 

prospective purchaser could obtain coverage,” In re Ins. Brokerage, 618 F.3d at 

356, and thus impacted “the core relationship between insurer and insured.” 

Thompson, 644 F.2d at 444. And the third criterion is undisputedly met. We 

thus hold that HUB’s conduct constitutes the “business of insurance,” and is 

therefore potentially subject to exemption from federal antitrust law.

2. Regulated Pursuant to State Law

The second element of the exemption requires that the challenged 

activities “are regulated pursuant to state law.” This is not a high bar for 

antitrust defendants to clear given how courts have interpreted the statutory 

language that on its face seems to require a more concrete conflict between the 

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federal and state regulation. “[I]f the state’s insurance industry is 

‘regulated by state law,’ then the antitrust laws simply do not apply, 

notwithstanding that the application of antitrust law in the particular case in 

no way ‘invalidate[s], impair[s], or supersede[s]’ state law and may even be 

consistent with it.” Arroyo-Melecio, 398 F.3d at 66 n.7 (alterations in original)

(quoting Areeda & Hovenkamp, ANTITRUST LAW, ¶ 219c, at 339 (2d ed. 2000)); 

see also Fed. Trade Com’n v. Nat’l Cas. Co., 357 U.S. 560, 564–65 (1958); 

Crawford v. Am. Title Ins. Co., 518 F.2d 217, 219 (5th Cir. 1975) (prohibition 

on “all unfair methods of competition” sufficient). The district court found this 

element satisfied. 

Sanger does not challenge this ruling as to Texas law, but contends, for 

the first time, that the district court erred by granting summary judgment 

without finding that numerous states outside of Texas in which HUB operates 

also regulate insurance. There are a number of problems with this argument. 

First, because the evidence of Sanger’s preparedness to enter the market that 

we found sufficient to confer standing primarily involved activity in Texas 

(such as its dealings with the Texas Equine Veterinary Association), we doubt 

that the allegations are sufficient to allege injury in other states’ markets. 

Second, although it is HUB’s burden to demonstrate its entitlement to the 

McCarran-Ferguson Act exemption, see Seasongood v. K & K Ins. Agency, 548 

F.2d 729, 732 (8th Cir. 1977), Sanger did not identify this issue below as one 

on which a dispute existed. HUB’s motion for summary judgment discussed 

only Texas law on this issue, but clearly sought dismissal of Sanger’s claims in 

full. Finally, even assuming HUB’s conduct in other states is relevant to 

Sanger’s federal antitrust claims and that this issue was preserved, we have 

previously recognized and can do so again via judicial notice that other states 

also regulate insurance. See Shurley v. Tex. Commerce Bank—Austin, N.A. (In 

re Shurley), 115 F.3d 333, 345 n.43 (5th Cir. 1997) (“Texas, like all states, 

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comprehensively regulates insurers and insurance policies.”); Jeffrey E. 

Thomas, Insurance Law Between Business Law and Consumer Law, 58 AM. J.

COMP. L. 353, 353 (2010) (“[E]ach of the fifty states has a comprehensive and 

robust system of insurance regulation through statutes, administrative 

regulations, and common law rules.”). Indeed, Sanger does not identify any 

particular states that it contends do not regulate insurance. This requirement 

of the exemption is satisfied.

3. Boycott, coercion, or intimidation

Even when conduct involves the business of insurance that is regulated 

by state law, the McCarran-Ferguson Act does not exempt it from antitrust 

scrutiny when it amounts to a “boycott, coercion, or intimidation.” At first 

glance, the allegations in this case may seem close to the “paradigm situation 

[involving] the collective refusal by insurance companies to deal with agents

doing business with other insurers.” Areeda & Hovenkamp, supra, ¶ 220, at 

35. But the allegations in this case focus on a single broker, HUB, which turns 

out to make a big difference.

Sanger’s primary argument on appeal is that HUB’s activities alone 

constituted a boycott—the company’s briefing repeatedly argues that “HUB 

engaged in a boycott” by using its alleged monopoly power to pressure insurers 

into not doing business with Sanger. But “conduct by individual actors falling 

short of concerted activity is simply not a ‘boycott’ within § 3(b).” St. Paul Fire 

& Marine Ins. Co. v. Barry, 438 U.S. 531, 555 (1978); see also Areeda & 

Hovenkamp, supra, ¶ 220a, at 36 (“[T]he term ‘boycott’ clearly requires an 

agreement of at least two firms to exclude or discriminate against another.”). 

HUB’s independent conduct seeking to leverage its supposed monopoly 

position as sole broker for the Program with insurers thus cannot constitute a 

boycott within the meaning of the exemption.

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Though less emphasized on appeal than its allegations that HUB is 

engaging in monopolization, Sanger also intimates that the unlawful 

arrangement is a horizontal agreement between HUB and the insurers.10 If 

that is the case, there is a different problem for Sanger: the refusal to deal at 

issue in a boycott must expand “beyond the targeted transaction” to “unrelated 

transactions [that] are used as leverage to achieve the terms desired.” 

Hartford Fire Ins. Co. v. California, 509 U.S. 764, 802–03 (1993). In other 

words, a boycott is “the refusal to deal in a collateral transaction as a means to 

coerce terms respecting a primary transaction.” Gilchrist v. State Farm Mut. 

Auto. Ins. Co., 390 F.3d 1327, 1335 (11th Cir. 2004) (citing Hartford Fire, 509 

U.S. at 801–05). For example, the Supreme Court long ago held that an 

agreement by lumber retailers not to purchase from lumber wholesalers that 

sell directly to customers is a boycott because it seeks an objective—“the 

wholesale dealers’ forbearance from retail trade”—that is collateral to the 

retailers’ transactions with the wholesalers.11 See Hartford Fire, 509 U.S. at 

803 (citing E. States Retail Lumber Dealers’ Ass’n v. United States, 234 U.S. 

600 (1914)). The only “collateral transaction” plausibly claimed in this case is

 

10 Sanger also claims that HUB’s agreements with the American Veterinary Medical 

Association constitute contracts, combinations, or conspiracies in restraint of trade, but it 

does not appear to claim that the Association had a role in any alleged boycott.

11 Sanger contends that HUB and the insurers’ refusal to deal is a boycott under the 

definition used in Klor’s, Inc. v. Broadway-Hale Stores, Inc., 359 U.S. 207 (1959). In that 

case, a retail chain used its “‘monopolistic’ buying power to bring about” a conspiracy with 

manufacturers and distributers of appliances to exclude Klor’s, an independent retailer, from 

selling their brands. Id. at 209. The Court characterized the conspiracy as a group boycott 

forbidden by the Sherman Act, though the opinion does not disclose any “collateral 

transaction” involved. Id. at 209–11. To the extent Klor’s conflicts with Hartford Fire, we 

follow the latter case, which is the only one that involves the McCarran-Ferguson Act’s 

boycott exception. See Hartford Fire, 509 U.S. at 803 (“The proper definition of ‘boycott’ is 

evident from the Court’s opinion in Eastern States Retail Lumber . . . . [T]he associations’

activities were a boycott because they sought an objective—the wholesale dealers’

forbearance from retail trade—that was collateral to their transactions with the 

wholesalers.”); but see NYNEX Corp. v. Discon, Inc., 525 U.S. 128, 134–37 (1998) (citing and 

relying upon Klor’s in a non-insurance case).

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HUB’s refusal to work with insurers who would insure Sanger’s clients, but as 

discussed above that transaction does not involve concerted action. The actions 

of the insurers as a group—refusing to work with Sanger—do not involve any 

“collateral transactions” (they directly implicate potential transactions 

between the insurers and Sanger) and therefore do not constitute a boycott. 

Sanger has thus not alleged a boycott that avoids the McCarran-Ferguson 

exemption.12

* * *

We therefore hold that HUB’s alleged activities are exempt from federal 

antitrust law by the McCarran-Ferguson Act. 

C. Alternative Arguments for Affirming

HUB offers two alternative grounds to affirm the dismissal of the state 

antitrust claims that remain given our ruling on standing: first, that Sanger 

failed to provide legally adequate expert testimony to define the market; and 

second, that the exclusive dealing arrangement Sanger alleges is legal. 

With regard to the former, HUB filed a motion to strike Sanger’s expert, 

Donald House, but the district court denied it as moot when it granted HUB’s 

motion for summary judgment. That motion asserts that House improperly 

“assumes the only professional liability policy available is the Zurich policy 

offered through the [Program].” HUB’s brief on appeal, however, contains 

minimal argument on this point. HUB points to the motion to strike it filed in 

the district court as further support, but arguments made in the district court 

cannot be incorporated by reference on appeal. See Turner v. Quarterman, 481 

 

12 It is not necessary to decide whether coercion and intimidation likewise require 

concerted action, because Sanger disavows any argument that HUB engaged in coercion or 

intimidation. We note that the few courts to have addressed this issue are divided, although 

the leading treatise concludes that concerted activity is likely required to establish coercion 

or intimidation. Areeda & Hovenkamp, supra, ¶ 220a, at 36 (citing cases).

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F.3d 292, 295 n.1 (5th Cir. 2007); Perillo v. Johnson, 79 F.3d 441, 443 n.1 (5th 

Cir. 1996). Furthermore, the admissibility of expert evidence under Daubert

is reviewed for abuse of discretion. See Knight v. Kirby Inland Marine Inc., 

482 F.3d 347, 351 (5th Cir. 2007). It is also a determination that often benefits 

from a hearing and resulting factfinding, especially in complex areas like 

defining a market for antitrust purposes. See City of Tuscaloosa v. Harcros 

Chemicals, Inc., 158 F.3d 548, 564 n.21 (11th Cir. 1998) (acknowledging that 

Daubert hearings “are almost always fruitful uses of the court’s time and 

resources in complicated cases involving multiple expert witnesses”). Given 

our reversal on standing grounds, we will give the district court an opportunity 

to address HUB’s motion to strike in the first instance on remand.

HUB further argues on appeal that no antitrust violation occurred, 

because the procompetitive benefits of any alleged exclusivity agreements 

outweigh the costs. It also vigorously challenges the factual predicate of the 

exclusive dealing claim, contending that no such agreements existed. Sanger 

declines to respond to the substance of these arguments and asserts that 

HUB’s briefing is inadequate. Indeed, evaluating the merits of a restraint of 

trade under the rule of reason requires consideration of a variety of “facts 

peculiar to the business to which the restraint is applied; its condition before 

and after the restraint is imposed; the nature of the restraint and its effect, 

actual or probable. The history of the restraint, the evil believed to exist, the 

reason for adopting the particular remedy, the purpose or end sought to be 

attained, are all relevant facts.” Am. Needle, Inc. v. Nat’l Football League, 560 

U.S. 183, 203 n.10 (2010) (quoting Bd. of Trade of Chi. v. United States, 246 

U.S. 231, 238 (1918)). We decline to engage in the rule of reason’s “elaborate 

inquiry” based on HUB’s thin appellate arguments. See Arizona v. Maricopa 

Cnty. Med. Soc., 457 U.S. 332, 343 (1982); see also Liberty Glass Co., Inc. v. 

Allstate Ins. Co., 607 F.2d 135, 138 (5th Cir. 1979) (declining to address 

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Sherman Act claims after reversing the district court’s dismissal on McCarranFerguson Act immunity grounds). On remand, the district court may 

consider—after additional briefing, if it chooses to allow it, see Zastrow v. Hous.

Auto Imports Greenway Ltd., 789 F.3d 553 (5th Cir. 2015)—these defenses to 

liability.

III.

Our resolution of these antitrust issues largely dictates our treatment of 

the following two state claims that are based on the same allegations: (1) 

tortious interference with prospective business relations and (2) unfair trade 

practices under the Texas Insurance Code.

To prevail on the tortious interference claim, Sanger “must establish 

that (1) there was a reasonable probability that [it] would have entered into a 

business relationship with a third party; (2) the defendant either acted with a 

conscious desire to prevent the relationship from occurring or knew the 

interference was certain or substantially certain to occur as a result of the 

conduct; (3) the defendant’s conduct was independently tortious or unlawful; 

(4) the interference proximately caused the plaintiff injury; and (5) the plaintiff 

suffered actual damage or loss as a result.” Coinmach Corp. v. Aspenwood 

Apartment Corp., 417 S.W.3d 909, 923 (Tex. 2013). The district court 

dismissed the tortious interference claim as a result of its holding that there 

was no antitrust standing. That, it thought, prevented Sanger from 

establishing the necessary “independently tortious or unlawful act.” Even 

were we to agree with this reasoning,13 as discussed above we reverse the 

 

13 Texas law actually permits plaintiffs to recover for tortious interference even when 

they would not have standing to assert the underlying tort. See Wal-Mart Stores, Inc. v. 

Sturges, 52 S.W.3d 711, 726 (Tex. 2001) (“[A] plaintiff may recover for tortious interference 

from a defendant who threatens a person with physical harm if he does business with the 

plaintiff. The plaintiff need prove only that the defendant’s conduct toward the prospective 

customer would constitute assault.”). But whether Sanger suffered injury—the same inquiry 

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district court’s holding that Sanger lacks antitrust standing. We accordingly

reverse the district court’s dismissal of Sanger’s tortious interference claim. 

We note, however, that the merits of Sanger’s antitrust claim—the sole 

“tortious or unlawful act” alleged—will ultimately determine whether it also 

has an actionable tortious interference claim. See Stewart Glass & Mirror, Inc. 

v. U.S. Auto Glass Disc. Centers, Inc., 200 F.3d 307, 316 (5th Cir. 2000)

(“[A]ppellants’ claims rise and fall together, and as the antitrust claims are 

unsubstantiated, so must be the tortious interference claims.”).

Finally, Sanger argues that the dismissal of its unfair trade practices 

claim under section 541.054 of the Texas Insurance Code was error. The Texas 

Insurance Code bars any trade practice that it defines as unfair, Tex. Ins. Code 

§ 541.003, and defines one such practice as a concerted or agreed-upon “act of 

boycott, coercion, or intimidation that results in or tends to result in the 

unreasonable restraint of or a monopoly in the business of insurance.” Id. 

§ 541.054.

This provision tracks the language of the “boycott, coercion, or 

intimidation” exception to the McCarran-Ferguson Act exemption. Compare 

15 U.S.C § 1013(b) (“Nothing contained in this chapter shall render the said 

Sherman Act inapplicable to any agreement to boycott, coerce, or intimidate, 

or act of boycott, coercion, or intimidation”). We have suggested that these 

laws should be interpreted in harmony. See Hood v. Tenneco Tex. Life Ins. Co., 

739 F.2d 1012, 1017 n.10 (5th Cir. 1984) (discussing a prior codification of 

section 541.054). For the same reasons that HUB did not engage in a boycott 

under the McCarran-Ferguson Act, HUB did not violate this provision of the 

Texas Insurance Code. As for Sanger’s assertion that “the court overlooked the 

 

involved in the preparedness determination under the antitrust laws—likely bears on 

“reasonable probability” and “injury” elements of a tortious interference claim.

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statutory language proscribing anticompetitive conduct other than just a 

boycott,” it waived any claim that HUB’s conduct was “coercion or 

intimidation” by explicitly disavowing that argument in the context of its 

McCarran-Ferguson Act arguments.

* * *

To sum up: We AFFIRM the district court’s dismissal of Sanger’s federal 

antitrust claims and its claim of unfair trade practices under the Texas 

Insurance Code. However, because Sanger was not unprepared, as a matter of 

law, to enter the market for veterinary insurance, we REVERSE its summary 

judgment on Sanger’s state law antitrust and tortious interference claims and 

REMAND for further proceedings in the district court.

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JONES, Circuit Judge, dissenting. 

My colleagues' view of this case is well articulated, and I am pleased to

concur in most of the opinion. I respectfully disagree, however, with their 

resolution of Sanger’s antitrust standing, an issue predicate to its assertion of 

Texas antitrust claims. The record, and indeed my colleagues’ own analysis, 

demonstrates without factual dispute that Sanger was not actually prepared 

to enter the market for handling group insurance coverage of veterinary 

physicians’ practices. Such lack of preparedness indicates, as our previous 

cases have held, that Sanger suffered no injury if it was barred from entering 

that market. Jayco Sys., Inc. v. Savin Bus. Machs. Corp., 777 F.2d 306, 313 

(5th Cir. 1985). This dissent is not about the applicable law, but about the 

application of law to the facts. Courts cannot allow the powerful medicine of 

antitrust law, powerful not only because a plaintiff can receive treble damages 

and attorneys’ fees for proving a violation but also because the extraordinary 

costs of preparation and trial can force settlements in meritless cases, to 

benefit wannabes who file suit before they have made a credible investment in 

competing. The purpose of antitrust law is to benefit competition, not 

competitors. A lax approach to antitrust standing works at cross-purposes 

with the substantive law.

The applicable law of antitrust standing has long been settled in this 

court. “Factors which indicate that a plaintiff is prepared to compete include 

the ability of the plaintiff to finance the business and to purchase the necessary 

facilities and equipment; the consummation of contracts by the plaintiff; 

affirmative action by plaintiff to enter the business; and the background and 

experience of plaintiff to enter the prospective business.” Jayco, 777 F.2d at

306. Even if all these factors are satisfied, however, the ultimate question is 

whether a plaintiff would have been prepared to sell the policies to a group of 

veterinarians through a state association even if Zurich, Hartford, CNA, and 

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Travelers were willing to supply them. Jayco, 777 F.2d at 314. This analysis 

begins with the scope of Sanger’s competitive intentions, adds dimension to the 

majority’s description of what Sanger had to do to realize its intentions, and 

demonstrates why Sanger had not positioned itself actually to compete in the 

group coverage market.

Sanger describes its intentions confusingly, but the majority’s generous 

synthesis is that the plaintiff does not seek to supplant HUB in the AVMA 

Program; instead, Sanger wants to be unimpeded in working with insurers to 

offer group insurance to members of other veterinary associations. Sanger also 

claims that it was prevented from entering this market nationwide, but there 

is no evidence to support that proposition. Even the majority notes that, 

“because the evidence of Sanger’s preparedness to enter the market that we 

found sufficient to confer standing primarily involved activity in Texas . . ., we 

doubt that the allegations are sufficient to allege injury in other states’ 

markets.” lines 568-69. Based on the record, Sanger’s preparedness for group 

coverage manifested nearly exclusively in Texas through its attempts to secure 

“endorsement” from the Texas Equine Veterinary Association.1

The majority’s standing discussion hinges on its conclusion that unlike 

in this court’s previous cases, the obstacles to Sanger’s becoming a competitor 

were related to HUB’s alleged anticompetitive conduct rather than to Sanger’s 

deficiencies. In other words, but for HUB’s having allegedly locked up the 

market for several different types of group veterinary practice coverage, 

Sanger could have sold its “product” to TEVA and other groups. 

To know what Sanger had to do to compete, we must know what HUB 

did. According to the majority, HUB’s role in both managing the Professional 

 

1 The majority’s hedging on Sanger’s preparedness to enter other markets affords the 

possibility that, on remand, standing can be summarily denied vis a vis markets outside 

Texas.

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Liability Insurance Trust for AVMA and serving as the insurance broker 

included promotion, marketing, servicing insureds, monitoring claims, 

developing policy forms, and negotiating rates. Further, to assist PLIT in 

negotiating terms of coverage on AVMA’s behalf, HUB gathered and analyzed 

claims data, and HUB assisted in developing rate structures for submission to 

various state insurance regulatory agencies. During the period in question, 

the AVMA PLIT offered policies for professional liability, employer’s practice 

liability, property and general liability, and workers’ comp. As the majority 

explains in its McCarran-Ferguson Act discussion, the “business of insurance”

fundamentally relies for affordability on scale and the spreading of risk among 

insureds. HUB was negotiating the spreading of risk for presumably 

thousands of AVMA members who opted for the group insurance, thus 

maximizing the potential economies of scale. Concomitantly, it had to be 

performing the related tasks for thousands of members.

What had Sanger done to compete in the procuring and servicing of 

group insurance coverage? It “had an idea and an intent to execute,” as the 

district court found. It had engaged in discussions with over twenty insurers 

and with veterinarians and TEVA about prospects for its venture. It became 

a sponsor for a few thousand dollars at two TEVA conferences. It had sold 

coverages to about twelve veterinary practices, generating about $59,000 in 

new business. Its “owners had relevant experience as an insurance specialist, 

an equine veterinarian, and a lawyer who had operated Sanger and sold 

insurance in a number of states.” The majority reviews this evidence in the 

light most favorable to the non-movant for summary judgment, but these 

tidbits pale in comparison to the nature and requirements of the business it 

sought to enter.

First, none of the “relevant experience” had to do with the negotiating 

and servicing of group coverage of multiple types of insurance. Dr. Donnell 

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may be a renowned equine vet, but this alone does not qualify him as an 

insurance broker for veterinary practices. Jim Bear had been involved in the 

insurance of farm and ranch businesses, but the terms of insurance coverage 

for those risks are markedly different from those for medical professionals. 

Further, Bear worked only 15-20 hours weekly as the insurance “expert” in 

Sanger’s insurance business, while he continued to manage Dr. Donnell’s 

medical practice. Attorney Springer and his wife purchased Sanger in 2007 

and had operated it for only four years with a small staff. No evidence is offered 

that Sanger had ever engaged in handling group coverages, in negotiating 

prices based on the group risk characteristics, or servicing the volume of 

insureds that alone could provide sufficient risk-spreading to generate 

competitively attractive costs of coverage. 

Second, the majority note that insurance brokerage is not capital 

intensive as are other businesses in which this court has found plaintiffs 

unprepared to enter (and sue for antitrust violations). I agree, but there is no 

affirmative evidence of any significant investment beyond the $196,500 apiece 

paid by Dr. Donnell and Mr. Bear to buy into the Sanger agency, plus the cost 

of appearing at the TEVA conferences. Let us assume, optimistically, that 

Sanger’s transformation into a HUB-like provider of group insurance and 

related services to an organization like TEVA (300 members) required no more 

than adding personnel--rather than heavy capital investment. Nevertheless, 

hiring and retaining a staff of qualified personnel to handle volume marketing, 

premium payments for hundreds of new policyholders, underwriting,

renegotiating coverages periodically, and to monitor claims handling entail

fiscal as well as managerial challenges. Yet Bear spent half his working hours 

away from the agency, Dr. Donnell maintained his full-time veterinary 

practice, and the plaintiffs acknowledge they never made a business plan.

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Third, I disagree with the majority’s breezy assertion that “[t]he primary 

challenge in the middleman business of brokering is not capital but 

relationships,” such that Sanger was prevented by HUB’s alleged exclusive 

contracts with insurers from “leveraging its relationships” to offer policies. The 

primary challenge, in my view, was Sanger’s demonstrating the competence to

sell and service a competitively priced specialty insurance package to groups 

of medical professionals. “Relationships” go only so far in assuring either the 

insurers or its customers, whether the entire group or individual members, 

that Sanger would offer quality service on all levels. The significance of this 

challenge is reflected in the fact that neither HUB nor the insurers HUB dealt 

with enjoyed long-term contractual “relationships.” HUB worked for AVMA 

PLIT under non-exclusive two-year contracts, while the alleged “exclusive”

agreements between HUB and the insurers lasted only a couple of years on 

average. The flexibility inherent in these arrangements suggests that price 

and service, far more than “relationships,” govern success in HUB’s business. 

Sanger had little more than “relationships,” even discounting the availability 

of coverage, to reassure a group like TEVA that its ongoing level of service 

would be competitive. 

Finally, that HUB viewed Sanger as a “threat” should be irrelevant to 

the question of Sanger’s preparedness to enter the market for group veterinary 

practice insurance policies. The majority spends only one paragraph on this 

point, citing no case law in support, and rightly so. A competitor’s outside 

perception of another entity’s appearance in the marketplace has nothing to do 

with the issue at hand, which is whether this plaintiff has demonstrated its 

actual preparation and ability to enter the market such that but-for the 

defendant’s conduct, it would have succeeded. Allowing a defendant’s 

perception to support a finding of a plaintiff’s standing to sue for antitrust 

violations is a circular argument. 

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For all these record-based reasons I would have denied Sanger standing 

to sue under the Texas antitrust laws. I respectfully dissent. 

 Case: 14-40854 Document: 00513204331 Page: 35 Date Filed: 09/23/2015