Court Opinion

ID: 9428839
Source: CourtListenerOpinion
Date Created: 2023-08-02 23:24:57.028019+00
Date Added: 2024-06-11T17:23:15.528567
License: Public Domain

Justice Rehnquist,
with whom The Chief Justice and Justice O’Connor join, dissenting.
Respondent’s alleged “antitrust injury” in this case arises from a health insurance coverage dispute with her insurer, petitioner Blue Shield of Virginia. Respondent’s complaint is that Blue Shield reimburses its subscribers for treatment by psychiatrists, but not by psychologists unless their services are supervised and billed by treating physicians. Respondent was treated by a clinical psychologist, but when she submitted claims to Blue Shield, she was denied reimbursement.
Respondent alleged in her complaint that Blue Shield’s refusal to reimburse her for the costs she incurred in obtaining the services of a psychologist furthered a conspiracy by petitioners “to exclude and boycott clinical psychologists from receiving compensation under” Blue Shield’s plan.. App. 55. Blue Shield’s refusal-to-reimburse policy is alleged to constitute a form of economic pressure on McCready and other Blue Shield subscribers to obtain the services of psychiatrists rather than psychologists. By employing this economic pressure on Blue Shield subscribers, petitioners are alleged to have placed clinical psychologists at a competitive disadvantage with regard to psychiatrists in the market for insurance-reimbursed psychological services.
The Court concludes that McCready’s inability to obtain reimbursement for the psychological services she actually obtained permits her to maintain an action to enforce the anti*486trust laws pursuant to § 4 of the Clayton Act. According to the Court, one who suffers economic loss as a necessary step in effecting the end of a conspiracy has “standing” to sue pursuant to §4. Ante, at 479, 483-484. I disagree.
Section 4 of the Clayton Act authorizes suits for treble damages by “[a]ny person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws.” 15 U. S. C. § 15. It is not enough, however, for a plaintiff merely to allege that the defendant violated the antitrust laws and that he was injured. Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U. S. 477, 486-489 (1977). See Hawaii v. Standard Oil Co., 405 U. S. 251, 263, n. 14 (1972). The injury suffered by the plaintiff must be of the type the antitrust laws were intended to forestall. Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., supra, at 487-488.
“Plaintiffs must prove antitrust injury, which is to say injury of the type the antitrust laws were intended to prevent and that flows from that which makes defendants’ acts unlawful. The injury should reflect the anti-competitive effect either of the violation or of anti-competitive acts made possible by the violation. It should, in short, be ‘the type of loss that the claimed violations ... would be likely to cause.’” 429 U. S., at 489 (citation omitted).
Although McCready alleges that she would have been reimbursed had it not been for the conspiracy, I do not think that she has made a sufficient allegation of “antitrust injury” within the meaning of Brunswick.
Standing alone, a refusal by an insurer to reimburse its insured does not constitute a violation of the Sherman Act. At most, such an action on the part of an insurer may amount to a breach of a contract or a violation of relevant state law regulating the insurance industry.1 According to the Court, *487however, what distinguishes this case from the typical insurance coverage dispute is either the purpose behind or the effect of Blue Shield’s refusal to reimburse. If Blue Shield violated the antitrust laws by its nonreimbursement policy, it was only because that policy was used as a means of putting psychologists at a competitive disadvantage in relation to psychiatrists.
Two conceivable grounds therefore may be divined from the Court’s opinion to support its conclusion that McCready has suffered “antitrust injury” when Blue Shield refused to reimburse her costs in obtaining the services of a psychologist. The first theory is that McCready may recover simply because petitioners’ nonreimbursement policy was intended to put clinical psychologists at a competitive disadvantage. According to the Court, this must be so even if Blue Shield’s refusal to reimburse her would be entirely legal under the antitrust laws in the absence of such a purpose to competitively injure third parties. Blue Shield’s intent or purpose renders the discriminatory reimbursement policy illegal. Under this theory, it would seem to be irrelevant for the Court’s purposes whether McCready obtained the services of a psychologist or a psychiatrist so long as the illegal intent is present and she suffered economic loss as a result.2
The second conceivable rationale is a flat rule that recovery is permitted by those persons who suffer economic loss as a necessary step in effecting a conspiracy to place third par*488ties at a competitive disadvantage.3 Under this theory, McCready may recover merely by demonstrating that she was a “tool” of petitioners’ effort to disable psychologists from competing with psychiatrists in the market for insurance-reimbursed psychological services. She may recover because she did not yield to the economic pressure imposed on her.4 The theory is that McCready may recover because her loss is linked to petitioners’ efforts to enforce a “boycott” of third parties.
I believe that such reasoning is foreclosed by the Court’s decision in Brunswick. In order to recover, a plaintiff must demonstrate that the nature of the injury he suffered is of the type that makes the challenged practice illegal. In Brunswick, the merger may well have violated § 7 of the Clayton Act in the abstract or even as to competitors not before the Court. Yet, we held that the plaintiffs in Brunswick could not recover because they did not suffer from the anticompet-itive effects of the merger. We rejected the contention that it was sufficient to show merely that the defendant’s merger violated § 7 and that there existed a causal link between that merger and an economic loss. 429 U. S., at 486-489. In*489stead, the required showing is that the type of harm suffered by the plaintiff is that which makes the challenged practice illegal. Id., at 489.
Therefore, McCready may not recover merely by showing that she has suffered an economic loss resulting from a practice the legality of which depends upon its effect on a third party. McCready must show that the challenged practice is illegal with regard to its effect upon her. But petitioners’ policy is alleged to be illegal not by virtue of its effect upon Blue Shield’s subscribers but because of its effect upon psychologists. McCready alleges no anticompetitive effect upon herself. She does not allege that the conspiracy has affected the availability of the psychological services she sought and actually obtained. Nor does she allege that the conspiracy affected the price of the treatment she received.5 She does not allege that her injury was caused by any reduction in competition between psychologists and psychiatrists, nor that it was the result of any success6 Blue Shield achieved in its “boycott” of psychologists. She seeks recovery solely on the basis that Blue Shield’s reimbursement policy failed to alter her conduct in a fashion necessary to foreclose psychologists from obtaining the patronage of Blue Shield’s subscribers.
If the important consideration is whether the challenged practice is illegal with regard to its effect on the plaintiff, then it would be irrelevant for the plaintiff’s purposes that the conspiracy might also adversely affect competition on another level of the market. For example, a group of retailers *490may threaten to refuse to do business with those distributors that continue to do business with a disfavored retailer. If the distributors agreed to cooperate with the conspiring retailers, then the disfavored retailer would have an action against the agreeing distributors and the conspiring retailers. See, e. g., United States v. General Motors Corp., 384 U. S. 127 (1966); Klor’s, Inc. v. Broadway-Hale Stores, Inc., 359 U. S. 207 (1959). I would think that a distributor who refused to go along with the retailers’ conspiracy and thereby lost the conspiring retailers’ business would also have an action against those retailers. Such an action would be based upon the conspirators’ concerted refusal to deal with the distributor which itself would be unlawful under the antitrust laws. Such an action, unlike the instant case, would not depend upon the anticompetitive effect of the challenged practice upon a third party. The distributor would have an action not on the ground that he was caught in the middle of an attempted boycott of participants on another level of the market, but because he was boycotted. The boycott of the distributor puts him at a competitive disadvantage to those distributors who are unaffected by the retailers’ conspiracy and to those distributors who agree to participate.7
McCready, however, does not allege that petitioners engaged in a concerted refusal to deal with her. As the Court is aware, ante, at 468-470, McCready has alleged that petitioners *491violated the antitrust laws by conspiring to exclude clinical psychologists from the coverage of Blue Shield plans, and that this conspiracy foreseeably injured her. The Court apparently concludes, however, that McCready has also sufficiently alleged that petitioners have engaged in a concerted refusal to deal with her, and that this is the gravamen of her antitrust complaint: “McCready alleges that she has been the victim of a concerted refusal by psychiatrists to reimburse through the Blue Shield plan.” Ante, at 484, n. 21. It may be that the Court today is merely holding that a boycottee has “standing” to sue under §4. Were this the issue presented by this case, I have little doubt that the Court merely would have denied certiorari.
But McCready simply does not, and could not, claim standing as the target of a concerted refusal to deal. Neither Blue Shield nor the psychiatrists threatened to cease doing business with McCready if she obtained the services of a psychologist rather than a psychiatrist. McCready alleges only that under the Blue Shield policy she could not obtain reimbursement for services rendered by psychologists. If such a claim is sufficient to make out a concerted refusal to deal, then any consumer who could not obtain a product or service on the precise terms he desires could claim to be the victim of a “boycott.” Most importantly, McCready alleges that Blue Shield’s policy violates the antitrust laws only by virtue of its anticompetitive effect on psychologists. She does not allege that Blue Shield’s policy is illegal in any way because of its effect on subscribers.
The Court, however, dismisses such concerns by stating in conclusory terms that “the injury [McCready] suffered was inextricably intertwined with the injury the conspirators sought to inflict on psychologists and the psychotherapy market.” Ante, at 484. I trust that the Court is not holding that a plaintiff may escape dismissal of the complaint merely by alleging that he suffered an economic loss “inextricably *492intertwined” with an injury the defendants intended, but failed, to inflict upon a third party.8 Although the Court may view itself as successfully deciding this case on its peculiar facts, it has wholly failed to provide any sort of reasoned basis for its decision. Especially in the area of antitrust law, labels do not suffice when analysis is necessary.
I would reverse the judgment of the Court of Appeals because McCready has not alleged that she has suffered antitrust injury, but at best injury attributable to a breach of contract on the part of Blue Shield.

 In addition to the antitrust claim, McCready’s complaint asserts a claim for breach of contract under the principles of pendent jurisdiction. *487App. 57-58. She also alleges that Blue Shield’s policy contravened state law. Id., at 55-56.

 The Court explains that those subscribers, such as McCready, who did not yield to Blue Shield’s coercive pressures suffer from Blue Shield’s sanctions by way of increased costs in obtaining the services of a psychologist. Those subscribers who did yield to Blue Shield’s pressure suffer antitrust injury indirectly because of suppressed competition in the psychotherapy market. Ante, at 483-484. I do not understand the Court to conclude that Illinois Brick Co. v. Illinois, 431 U. S. 720 (1977), would not bar recovery by a subscriber, as opposed to a psychologist, in the latter situation.

 The Court suggests a third theory — that McCready has standing herself as a target of a concerted refusal to deal. See ante, at 484, n. 21; infra, at 490-491.

 In order to recover under this theory, it would seem that respondent must prove at trial that she actually refused to yield to the economic pressure created by Blue Shield’s reimbursement policy. If she decided to obtain the services of a psychologist rather than a psychiatrist without knowing of Blue Shield’s policy, it cannot be said that her “injury” was proximately related to petitioners’ alleged anticompetitive conduct. If she discovered the policy only after she sought reimbursement, then it cannot be said that Blue Shield’s policy had any effect on McCready’s conduct as a consumer in the market for psychotherapeutic services. This, of course, is not to say that a person in all circumstances must have knowledge of a defendant’s anticompetitive activities before one may challenge that activity. One may not be a victim of economic pressure,’however, if one acted obliviously to that pressure.

 By excluding psychologists from the market, psychiatrists may well be able to increase their charges for psychotherapeutic services, which in turn, may raise the insurance rates charged by Blue Shield. McCready, however, alleges no such injury to herself on this theory.

 Because McCready obtained the services of a psychologist, it cannot be said that the psychologists were injured by the economic pressure Blue Shield placed on McCready and the class of subscribers she represents. See ante, at 475.

 As pointed out by the Court, a concerted refusal to deal may take many forms. Ante, at 484, n. 21. I would agree that the bank could sue in the Court’s hypothetical because, as conceded by the Court, the bank’s ability to compete with other banks would be adversely affected. By contrast, my disagreement with the Court is that it permits McCready to sue solely because of an injury to a level of the market in which she does not participate. Moreover, McCready does not allege that petitioners’ conspiracy adversely affected competition between psychologists and psychiatrists in such a manner as to adversely affect the price or supply of psychothera-peutic services available to her as a consumer. Thus, McCready’s case is clearly distinguishable from that of the bank’s in the Court’s hypothetical.

 If McCready’s injury were truly “inextricably intertwined” with any injury actually suffered by the psychologists, the risk of duplicative recovery and the practical problems inherent in distinguishing the loss suffered by her from the loss suffered by the psychologists may mean that either subscribers or psychologists, but not both, may recover. See Illinois Brick Co. v. Illinois, 431 U. S. 720 (1977).