Legal Document

73 United States Supreme Court Reports Lawyer’s Edition 2d Series KF101.8 U54 149 102 Reporter 2540 457 U.S. 465 BLUE SHIELD OF VIRGINIA, et al., Petitionersv.Carol McCREADY. Number 81-225. Argued March 24, 1982. Decided June 21, Syllabus Respondent employee was provided coverage under a prepaid group health plan purchased by her employer from petitioner Blue Shield of Virginia (Blue Shield). The reimbursement for part the cost incurred subscribers outpatient treatment mental and nervous disorders, including psychotherapy. However, Shield's practice to reimburse services psychiatrists but not psychologists unless supervised billed through physician. treated clinical psychologist submitted claims costs treatment. After were routinely denied because they had been physician, respondent brought class action in Federal District Court, alleging that Neuropsychiatric Society Virginia, Inc., engaged an unlawful conspiracy violation § 1 Sherman Act exclude receiving compensation plans. She further alleged failure furtherance caused injury business or property which she entitled treble damages 4 Clayton Act, provides recovery such "[a]ny person" injured "by reason anything" prohibited antitrust laws. granted petitioners' motion dismiss, holding no standing maintain suit. Appeals reversed. Held : has Act. Pp. 472-485. (a) lack restrictive language reflects Congress' expansive remedial purpose creating private enforcement mechanism deter violators deprive them fruits their illegal actions, provide ample victims violations. In absence some articulable consideration statutory policy suggesting contrary conclusion particular factual setting, is be applied accordance with its plain broad deterrent objectives. Pp.472-473 (b) Permitting proceed does offer slightest possibility duplicative exaction petitioners, Hawaii versus Standard Oil Co., 405 251, 92 885, 31 184, Illinois Brick company Illinois, 431 720, 97 2061, 52 707, distinguished, since paid psychologist, who thus refusal respondent. And whatever adverse effect actions on respondent's employer, plan, it as purchaser, employees subscribers, are out pocket consequence plan's pay benefits. Pp.473-475. (c) determining whether too remote warrant standing, given (1) physical economic nexus between harm plaintiff, (2), more particularly, relationship those forms about Congress likely have concerned making defendant's conduct providing remedy 4. 476-478. (d) Respondent's rendered "remote" merely goal petitioners halt encroachment into market physicians sought preserve themselves. Here, cannot reasonably restricted competitors whom hoped eliminate market. Denying very means achieve ends, precisely type loss claimed violations would cause. Nor unavailable asserted ground should limited participants restrained care plans—that is, entities, purchasers did allege restraint plans, instead premised claim concerted permit psychologists' services. As consumer psychotherapy financial benefits within area economy endangered breakdown competitive conditions resulting selective reimburse. 478-481. (e) Section precluded reflect "anticompetitive" boycott. Her redress yield coercive pressure induce selecting over required, bore sanction form increase net psychologist's light here alleged, "flows makes defendants' acts unlawful," Brunswick Corporation Pueblo Bowl-O-Mat, 429 477, 489, 690, 697, 50 701 falls squarely congressional concern. 481-484. 649 Reporter, 2nd 228 (4th Cir.), affirmed. Griffin baron Bell, Atlanta, Ga., petitioners. Warwick R. Furr, II, Washington, D. C., Justice BRENNAN delivered opinion Court. complaint at issue this case alleges refusing performed psychologists, while comparable psychiatrists, restrain competition question presented subscriber employed based upon 2 * From September 1975 until January 1978, Carol McCready Prince William County, Va. compensation, county Shield).1 specifically portion respect Pursuant provision, reimbursed psychiatrists. But physician.2 While psychologist. treatment, physician.3 3 Eastern behalf all psychological 1973 reimbursed.4 26 Statutes-at-Large 209, amended, 15 Code KF62 1,5 "to boycott under" App. 55. conspiracy, attorney's fees 38 731, 15.6 suit.7 Court's view, McCready's turned suffered "within sector competitively laws." 17. Noting segment market, court concluded "sector endangered" charged extended "no than occupied psychologists." Id., 18 (emphasis original). Thus, clearly being reimbursement, indirect considered 'antitrust injury.' " Ibid. 5 A divided panel Fourth Circuit reversed, meaning Cir. 1981). recognized exclusion held available any person "whose directly proximately by" laws, "too covered Act." 231.8 remanded proceedings. We certiorari. 454 962, 500, 72 376 (1981). II 6 treble-damages shall his anything forbidden laws," added). we noted Reiter Sonotone Corp., 442 330, 337, 99 2326, 2330, 60 931 (1979), "[o]n face, contains little way language." "expansive purpose" enacting 4: create Pfizer Incorporated India, 434 308, 313-314, 98 584, 587-88, 54 563 (1978). See 485-486, n. 10, 695-96, (1977); Perma Mufflers, International Parts 392 134, 139, 88 1981, 1984, 20 982 (1968); American Mechanical Engineers Hydrolevel 456 556, 572-573, 1935, 1945-1946, 330 (1982). recognized, "[t]he statute confine protection consumers, purchasers, competitors, sellers. . comprehensive terms coverage, protecting made practices whomever may perpetrated." Mandeville Island Farms, Crystal Sugar 334 219, 236, 68 996, 1006, L.Ed. 1328 (1948). 7 Consistent purpose, refused engraft artificial limitations remedy.9 Two recent cases illustrate point. supra, afforded phrase "any "naturally inclusive meaning," id., 312, S.Ct., 587, extends even foreign sovereign. Similarly, rejected argument only commercial interests. term "property" seek reflecting purchase price goods attributable price-fixing conspiracy. U.S., 338, 2330. sum, drawing policy, our acknowledged two types limitation availability classes persons injury. treat these turn.10 8 184 (1972), authorize State sue parens patriae capacity "general economy." "large ultimately indeterminable 'general economy' reflection injuries 'business property' recover themselves 4," "[e]ven most lengthy expensive trial could cope problems double inherent allowing damages" State's quasi-sovereign 264, 892. 342, 2332. 9 707 (1977), similar concerns prevailed. Hanover Shoe, Shoe Machinery 481, 2224, 1231 (1968), defendant relieve itself obligation overcharges direct-purchaser plaintiff showing passed amount overcharge own customers. purchaser claiming violator measured it. Relying found unacceptable risk engendered both direct single defendant. Brick, 730-731, 2066-2067. splintered recoveries litigative burdens result rule requiring impact apportioned undermine active laws actions. 745-747, 2074-2075. rather parties press vigor intended promote. 735, 2069. 10 policies identified plainly support here. Both focused every along chain distribution arising transaction violated permitting circumstances offers bills; consists her. can link himself McCready; he fully service benefits.11 B 11 Analytically distinct restrictions there conceptually difficult "of sustained [from violation] give 4." 728, 7, 2065, added).12 An expected cause ripples flow Nation's economy; "despite wording point beyond wrongdoer liable." 760, 2082 (BRENNAN, J., dissenting). It reasonable assume intend allow tangentially affected threefold property. Of course, neither nor legislative history guidance purposes predicate suit 4; indeed, unrestrictive section, avowed breadth cautions us cabin ways will defeat objective. potency implies need application. Congress, faced courts forced resort analysis less elusive traditionally common law matter "proximate cause."13 Perkins 395 642, 649, 89 1871, 1875, 23 599 (1969); Karseal Richfield 221 358, 363 (CA9 1955). applying concept action, look 12 13 position "fortuitous" "incidental" basis action.14 At outset, argue directed protagonists might This quickly disposed of. 14 do think conspirators themselves, "remote." benefit specific intent conspirators. Here market.15 victim Shield, motivated desire patronage subscribers. ends. foreseeable; necessary step effecting ends Where so integral aspect 'the cause.' quoting Zenith Radio Hazeltine Research, 100, 125, 1562, 1577, 129 (1969). Petitioners next if other conspirators, actor restrained. proximate range anticompetitive effects. contend market—that beneficiary plan.16 16 misconstrue complaint. was, fact, retained benefit, contract construction state permitted without significant variation structure contractual Shield.17 2, supra. clear [that] conditions" re Multidistrict Vehicle Air Pollution M.D.L. 31, 481 122, 1973). 17 (2) turn finally manner core prohibiting course conduct. concedes participation rests notion They stress visit psychiatrist whose artificially inflated advantage gained psychologists; additional sums physician supervise bill psychologist; "claim bills higher existed."18 promoting argument, rely heavily 19 Brunswick, respondents three bowling centers complained petitioner's acquisition several financially troubled lessening tending monopoly. seeking damages, "respondents attempted show allowed [acquired] close, respondents' profits increased." 693-94. endorsed legal theory based, 483, 'causally linked' mere presence market' compensable 4, 487, 696-97. forestall.' 487-488, 696-697, Wyandotte Transportation States, 389 191, 202, 379, 386, 407 (1967). Indeed, "the realized reduced." 488, 697 agree view embracing general principle linked procompetition take one farther. passage place much reliance, stated: 21 "[F]or plaintiffs account violations, must prove causally Plaintiffs injury, say prevent flows unlawful. either possible violation. should, short, 125 [89 1577]." 697-98 original; footnote omitted). 22 language, "did effect" limiting. relied-upon passage, "prove actual order recover. [C]ompetitors able before actually driven thereby lessened." 14, 698 14. Thus dampening forces assuredly potentially redress, see remediable 24 charges purposefully scheme. seeks lost attempt pursue scheme.19 psychotherapeutic required,20 heart scheme Hobson's choice Those compelled choose visiting forfeiting forgoing practitioner choice. latter case, borne first instance inevitably—though indirectly—by customers suppressed market; former happened, competitors. pressure, Although competitor inextricably intertwined inflict unlawful" concern.21 III 25 of" asked infer suggested having reviewed precedents and, importantly, unable identify persuasive rationale claims. judgment Affirmed. 27 REHNQUIST, THE CHIEF JUSTICE O'CONNOR join, dissenting. 28 "antitrust injury" arises insurance dispute insurer, Virginia. reimburses treating physicians. when reimbursement. 29 obtaining furthered plan. refusal-to-reimburse constitute obtain psychologists. By employing placed disadvantage regard insurance-reimbursed 30 concludes inability obtained permits enforce pursuant According suffers end "standing" Ante, 479, 483-484. & N Dec. Immigration Nationality Decisions disagree. authorizes suits 15. enough, however, injured. 486-489, 696-98, (1977). 263, 891, (1972). forestall. 32 "Plaintiffs (citation 33 sufficient allegation Brunswick. 34 Standing alone, insurer insured most, breach relevant regulating industry.1 what distinguishes typical behind If nonreimbursement used putting relation 35 conceivable grounds therefore divined simply put disadvantage. entirely injure third parties. renders discriminatory illegal. Under theory, seem irrelevant long present result.2 36 second flat suffer disadvantage.3 demonstrating "tool" effort disable competing imposed her.4 efforts "boycott" 37 believe reasoning foreclosed decision recover, demonstrate nature challenged merger well abstract Yet, effects merger. contention existed causal loss. 696-98. Instead, required 697-98. Therefore, legality depends party. virtue herself. obtained. received.5 reduction success6 achieved solely failed alter fashion foreclose 39 important then plaintiff's also adversely affect another level For example, retailers threaten refuse distributors continue disfavored retailer. agreed cooperate conspiring retailers, retailer against agreeing retailers. See, e.g., General Motors 384 127, 86 1321, 415 (1966); Klor's, Broadway-Hale Stores, 359 207, 79 705, 741 (1959). distributor go retailers' Such conspirators' deal unlike instant depend caught middle boycotted. puts him unaffected participate.7 40 McCready, aware, ante, 468-470, foreseeably apparently concludes, sufficiently her, gravamen complaint: "McCready plan." 484, n.21. today boycottee Were doubt 41 not, target deal. Neither threatened cease doing psychiatrist. make deal, product precise desires "boycott." Most violates 42 dismisses stating conclusory [McCready] market." 484. trust escape dismissal "inextricably intertwined" defendants intended, failed, party.8 successfully deciding peculiar facts, wholly sort reasoned decision. Especially law, labels suffice necessary. 43 reverse best Shield. 44 STEVENS, 45 "business laws."1 agreement payments objective patronize 46 decision, analyzing sufficiency damage claim, helpful consider situation maximum Given objective, effective perfectly consulted information, subscriber's cover aware exclusion. 47 On assumption, potential least options. He may: forgo entirely; psychiatrist; (3) psychologist.2 exercises option, illness worsen cognizable laws.3 diminished payment extent unreimbursed received exchange presumably worth payment.4 fact voluntarily elected spend money greater significance voluntary subscriber.5 seems me option informed exercises, restriction 48 reinforced going retaining rights policy. complaint, Even preference protected case.6 described fit case. 49 fourth indicate respondent, scope policy's coverage. understanding fraud deception, common-law action. misunderstanding fault, circumstance informed. deficiency cured assumption credible excluded count properly construed applicable principles nevertheless excludes anomalous conclude breach-of-contract enhance standing. right federal derived law. 51 Because discloses concluding violation, respectfully dissent. With Southwestern read bar nonphysicians. counters 1962 1972 revised addition, notes Legislature "freedom choice" statute, Va.Code 38.1-824 (1981), licensed Academy Clinical Psychologists 624 476, 478 (CA4 1980). argues obligations consistently invalid Cross Commonwealth, 349, 269 South 827 (1980). dismiss. assume, deny payment, Apparently inadvertently error discovered, refund paid. 228, 230, filed (VACP) president same defendants. addressed motions dismiss each opinion. dismissed case—thus giving rise appellate Court—but VACP trial. Following trial, entered defendants, 469 F.Supp. 552 reversed 476 states "should connection with" F.2d, 230. brief recitation claim. VACP, entity shown. 479. Plans combinations physicians, operating direction control members." "Blue companies, though are, degree, insurers. Rather, generally characterized quantity [I]n real sense, agents member physicians." 480 (citations combination "in trade," applicable, erred finding liability. observed compete decisions "necessarily dictate, extent," chosen 485. Finding denying cost-containment device "good medical practice," That section provides, pertinent part, "[e]very contract, otherwise, trade commerce among nations, declared illegal." part: "Any therefor district three-fold sustained, suit, fee." argued McCarran-Ferguson 1012, exempt insurance." ruling adequately pleaded 1013(b). points full record resolved address reach Addressing "target area" Courts Appeals, infra, underlying implicated 231-232. dissenting judge took rule. emphasized "as design violation," "rather thereof." 232. viewed determinative factor proper application test facts case: "In sue, act aimed injure. bystander, nonetheless, His remote." 233. dissent "competitively "she operated unrestrained far concerned." 234. Finally, reasoned: "The increased nothing services, ". There existed." 235-236. related context commented "[i]n face [the antitrust] add requirements burden litigant set forth ." Radovich National Football League, 352 445, 454, 77 390, 395, (1957). Radiant Burners, Peoples Gas 364 656, 659-660, 81 365, 367-68, 358 (1961) (per curiam ) (To "allegations adequate damaged requires"). lawsuit will, certain basic objectives embodied Only disgorge "fruits illegality" served. 494, 2232, (1968). 314, 588, (1978); 746, 2075, addition retain palpable profit represents denial subordinate theme opinions feasibility consequences implementing theories may, circumstances, prosecute consistent broader avoid burdening issues "massive evidence complicated theories," where discourage vigorous suits. 493, 2231. task disentangling overlapping lightly litigants, judicial system. 892, (1972); 741-742, 2072-2073. "[d]ifficulty ascertainment [should be] confused recovery," Bigelow RKO Pictures, 327 265, 66 574, 580, 90 652 (1946), focuses tangible appropriate bottom conception speculative measure harm. 262-263, 891-892, like recoveries, cautious approach speculative, abstract, impractical easily boycott, fixed observed, "ascertained penny." 231. "remoteness" involved amended Robinson-Patman 13. Focusing substantive "language "artificial" below termed "fourth level" 648, 1874. 1875. developed substantial jurisprudence subject "remoteness," formulating various "tests" aids analysis. Among tests lower focus "directness" Loeb Eastman Kodak 183 KF105 F3 704, 709 (CA3 1910); Productive Inventions, Trico Products 224 678 (CA2 1955); Volasco Lloyd Atlantic Fry Roofing 308 383 (CA6 1962); foreseeability, Western Liquid Asphalt Cases, 487 199 1973); Twentieth Century Fox Film Goldwyn, 328 190, 220 1964); "arguably zone interests [antitrust laws]," Malamud Sinclair 521 1142, 1152 1975). infra ("target test). Third "§ essentially balancing comprised many constant variable factors talismanic capable resolving problems." Bravman Basset Furniture Industries, 90, definitional approach, opting "factual matrix" occasion evaluate relative utility possibly conflicting approaches toward problem traditional suggests use words "remote," "tenuous," "fortuitous," "incidental," "consequential" describe find Carolina Council Milk Producers, Newton, 360 414, 419 1966). emphasizes hardly rigorous analytic tool. Palsgraf Long 248 N.Y. 339, 162 Northeastern KF135 N59 (1928); 351-352, N.E., 103 (Andrews, dissenting) ("What still cause, considerations. What mean word 'proximate' convenience, public rough sense justice, arbitrarily declines trace series events point"). bears affirming identifying limits explicit remedy, controlling consideration. Cf. Merrill Lynch, Pierce, Fenner Smith, Curran, 353, 377-378, 1825, 1838-1839, 182 (1982); Middlesex County Sewerage Authority Sea Clammers Assn., 453 1, 13, 101 2615, 2622-23, 69 435 (1981); Transamerica Mortgage Advisors, Lewis, 444 11, 15-16, 100 242, 245, 62 146 (1979). arguing, advert prevails First, Second, Fifth Circuits. Pan-Islamic Trade Exxon 632 539, 546 (CA5 1980); Engine Specialties, Bombardier Ltd., 605 18-19 (CA1 1979); Calderone Enterprises Artists Theatre Circuit, 1292 1971). special reliance following frequently cited formulation principle: "[I]n 'standing' 'target area' i.e., aimed, sued. Accordingly drawn line excluding relationships 'targets' themselves." 1295. 'imply individual damages.' Schwimmer Sony America, 637 41, 47-48 1980), 220. borrow selectively arguing "unrelated boycott," "is competition." Brief 16. Extracting identical 'loss'—but 'injury'—as acted independently continued 16-17 (footnote employer's despite psychologist—or unexercised terminate relationship—is intervening contributed stage litigation, accepted given, evaluating entitlement raise change psychotherapists another. 236 (Widener, preservation enhancement "inimical 697. obviously, quite label Nevertheless, conduct, analyzed redressability Or least, compel employ dissenting, correct asserting "injury forestall," post, 486. REHNQUIST's takes unrealistically narrow concerned, hint—beyond sheer ipse dixit —to help kinds amenable redress. acknowledges "a [to retailer] retailers," 490. characterizes "concerted deal," willing acknowledge existence dissent's pattern refusals conspired bank ceased loans psychiatrists' plainly, reasonableness banking, secondary directed. banker respects similarly situated. consumer, participant, finds unwilling significance. asserts pendent jurisdiction. 57-58. contravened 55-56. explains pressures sanctions indirectly understand subscriber, opposed situation. theory—that herself 21; 490-491 created decided knowing said "injury" discovered after This, knowledge activities challenge activity. One obliviously pressure. turn, rates theory. represents. 475 pointed forms. 21. hypothetical because, conceded bank's ability banks affected. contrast, my disagreement participate. Moreover, supply consumer. distinguishable hypothetical. truly practical distinguishing both, resides agent, controversy, 701, 697-698 (quoting 129). expect knowledgeable members consumers exercise option. fair situation—the herself—would "unlikely" result. undergo extensive later forgoes now worsens. Any consequential decides high level. fungible, exercised effectively paying twice service, once premiums unreimbursable payment. indicates valuable true, policyholder insurance. surgical operation, manifest boycottee. respondent—they subscriber. Presumably, charge (if any) referring reimbursable event, charge.

Classification Label: 7