Blue cross blue shield antitrust class action lawsuit

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(Reuters) - Boies Schiller Flexner, Hausfeld and other law firms may have to wait a while longer to collect a $667 million fee award for their work leading to a $2.67 billion antitrust settlement with Blue Cross Blue Shield.

A handful of class members and companies on Friday filed appeals challenging an Alabama federal judge's August approval of the settlement and fees. Until those appeals are resolved, neither class members nor their attorneys will see any money flow from the settlement, a Boies Schiller spokesperson acknowledged Tuesday.

Michael Hausfeld of the Hausfeld firm did not respond to a request for comment.

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The filings from Topographic Inc and Employee Services Inc, New Hampshire resident David Behenna, and Kentucky residents Jennifer Cochran and Aaron Craker did not say why they opposed either the settlement or the attorney payout.

The Home Depot Inc has also filed an appeal to the BCBS settlement, but because the company opted out of the damages class, it is not challenging the $2.7 billion amount or the $667 million fee and costs award for attorneys.

Home Depot has objected that the settlement could bar the company from bringing future antitrust claims against Blue Cross Blue Shield. The deal resolves allegations that the Blue Cross Blue Shield Association and its licensed members violated federal antitrust laws by dividing up health insurance markets to avoid competing with each other.

Behenna, who is representing himself, declined to comment further. During a series of hearings on the BCBS settlement in October 2021, he said he disagreed with how the attorney fees were calculated.

Cochran and Craker did not respond to requests for comment on reasons for their appeals, nor did the attorneys representing Topographic and Employee Services.

It is unclear how the $667 million will be split among the law firms if the fee award survives the appeal. Even a quarter of that amount would be a major windfall for Boies Schiller, which has suffered significant partner departures since 2020 and saw its revenue fall below $250 million last year for the first time since 2006, according to data from The American Lawyer.

The litigation firm has been pressing the antitrust case against BCBS for a decade.

According to federal judiciary data, the median time it takes for the federal circuits to resolve appeals following a filing notice is 10.4 months.

But challenges to attorney fees can take longer. It has been 11 months since a group of U.S. health insurers asked the U.S. Court of Appeals for the Federal Circuit to scrap a $185 million legal fee award to Quinn Emanuel Urquhart & Sullivan for its work in securing $3.7 billion for class members in Obamacare litigation. The case is still pending.

Since 2018, plaintiffs' firm Hagens Berman Sobol Shapiro has seen its fee awards stemming from an antitrust fight over optical disk drives voided twice by the 9th Circuit U.S. Court of Appeals. Last month, a California federal judge awarded the firm $26.6 million in legal fees.

Attorneys and other representatives for Blue Cross Blue Shield did not immediately respond to a request for comment.

Read more:

Boies, Hausfeld among law firms reaping $667 mln windfall in Blue Cross antitrust case

Disk-drive antitrust saga over fees ends with $27 mln award

Health insurers balk at Quinn Emanuel's 'astronomical' $185 million fee award

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David Thomas

Thomson Reuters

David Thomas reports on the business of law, including law firm strategy, hiring, mergers and litigation. He is based out of Chicago. He can be reached at and on Twitter @DaveThomas5150.

A federal judge has signed off on a $667 million fee for the lawyers who spent nine years crafting a $2.67 billion antitrust settlement with health insurance plans offered by Blue Cross Blue Shield.

The final settlement was approved Tuesday by federal judge R. David Procter, who said the legal fee was reasonable and represented 25% of the award for health insurance purchasers. The health insurance company also agreed to stop business practices the litigation argued were designed to limit competition between various Blue Cross Blue Shield health plans.

The case was mainly shepherded by lawyers at Boies Schiller Flexner and Hausfeld LLP, who are poised to receive the largest share of the nine-figure award.

David Boies, the co-founder of Boies Schiller who served as co-lead counsel with Michael Hausfeld, said the settlement will increase competition in the health insurance market.

“The dollar recovery and the historic competition-enhancing injunctive relief is unprecedented in a private antitrust case unrelated to government action,” Boies said in a statement. “This case illustrates the power and importance of private enforcement of the antitrust laws.”

Hausfeld did not immediately respond to a request for comment.

Procter said class counsel had worked on the case for more than 430,000 hours through mid-2020 and heralded the work for bringing “historic, transformative, procompetitive injunctive and equitable relief.”

In an earlier request for the lawyer fee, Boies and Hausfeld compared the scope of the litigation to some of the most well-known antitrust cases, including those brought against Standard Oil, American Tobacco Co., and AT&T. Those cases were investigated and brought by the U.S. government. Boies and Hausfeld noted there was no government investigation in the Blue Cross case.

The parties briefed over 150 discovery motions that led to 91 discovery orders, Judge Procter noted in an earlier filing. He wrote that lawyers conducted over 120 depositions and defended over 20 depositions of class representatives and experts.

The lawyers also wrote in their earlier fee application that the defendants produced more than 75 million pages that were reviewed by a team of 178 attorneys for the plaintiffs. The settlement negotiations began in 2015 and included 158 in-person and virtual meetings with mediators and 282 telephone conferences, they wrote.

The suit accused dozens of independent insurers affiliated with BCBS of illegally carving up the US health insurance market into regional “service areas” to avoid having to compete with one another.

The settlement received preliminary approval in late 2020.

The case is In re Blue Cross Blue Shield Antitrust Litig., N.D. Ala., No. 13-cv-20000.

(Updates with comment from Boies, detail on scope of litigation throughout. )

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