Blue Shield of Va. v. McCready
457 U.S. 465, 1982 U.S. LEXIS 132, 73 L. Ed. 2d 149 (1982)
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Rule of Law:
A plaintiff has standing to sue for treble damages under § 4 of the Clayton Act if their injury is inextricably intertwined with the injury the conspirators sought to inflict on a market and was a necessary and foreseeable step in accomplishing the anticompetitive scheme, even if the plaintiff is not a competitor in that market.
Facts:
- Carol McCready was an employee of Prince William County and was covered by a group health plan provided by Blue Shield of Virginia.
- The health plan provided reimbursement for outpatient psychotherapy services.
- Blue Shield's policy was to reimburse subscribers for psychotherapy performed by psychiatrists.
- The policy denied reimbursement for psychotherapy performed by clinical psychologists unless the treatment was supervised by and billed through a physician.
- While covered by the plan, McCready received treatment from a clinical psychologist.
- McCready submitted claims to Blue Shield for the costs of her psychologist's treatment.
- Blue Shield routinely denied McCready's claims because they had not been billed through a physician, causing her financial loss.
- The denial of reimbursement was alleged to be part of a conspiracy between Blue Shield and the Neuropsychiatric Society of Virginia to exclude clinical psychologists from the psychotherapy market.
Procedural Posture:
- Carol McCready filed a class-action lawsuit against Blue Shield of Virginia and Neuropsychiatric Society of Virginia, Inc. in the United States District Court for the Eastern District of Virginia.
- The District Court granted the defendants' motion to dismiss for lack of standing under § 4 of the Clayton Act.
- McCready, as appellant, appealed the dismissal to the United States Court of Appeals for the Fourth Circuit.
- A divided panel of the Court of Appeals reversed the District Court's ruling, holding that McCready had standing to sue.
- Blue Shield, as petitioner, sought and was granted a writ of certiorari by the Supreme Court of the United States.
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Issue:
Does a health insurance subscriber, who is denied reimbursement for treatment by a psychologist as part of an alleged conspiracy between the insurer and psychiatrists to harm psychologists, have standing to sue for treble damages under § 4 of the Clayton Act?
Opinions:
Majority - Justice Brennan
Yes. A health insurance subscriber has standing to sue under § 4 of the Clayton Act when they suffer financial injury that was a foreseeable and necessary consequence of an anticompetitive conspiracy. The Court reasoned that § 4's broad language ('any person') reflects an expansive remedial purpose. The primary judicial limitations on standing—preventing duplicative recovery (as in Illinois Brick) and avoiding speculative damages—do not apply here, as McCready's damages are distinct and calculable. The Court then addressed remoteness, applying a two-part analysis. First, there was a clear nexus between the violation and the harm; denying reimbursement to subscribers like McCready was the 'very means' by which the conspiracy was implemented, making her injury foreseeable and integral to the scheme. Second, her injury constituted 'antitrust injury' under Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., because it flowed directly from that which made the defendants' acts unlawful. Although not a competitor, McCready's injury was 'inextricably intertwined' with the injury the conspirators sought to inflict on psychologists, placing her squarely within the area of congressional concern.
Dissenting - Justice Rehnquist
No. A subscriber denied reimbursement has not suffered an 'antitrust injury' and therefore lacks standing. The dissent argued that McCready's claim is essentially a breach of contract dispute with her insurer, not an injury to competition. Following Brunswick, an antitrust plaintiff must suffer from the anticompetitive effects of the violation. The alleged illegality of Blue Shield's policy stemmed from its anticompetitive effect on psychologists, not on subscribers. McCready did not allege that the conspiracy affected the price or availability of psychological services for her; she was only harmed because her insurer refused to pay. Her injury is not the type the antitrust laws were designed to prevent.
Dissenting - Justice Stevens
No. McCready did not suffer an injury to her 'business or property by reason of anything forbidden in the antitrust laws.' The dissent reasoned that a fully informed subscriber who chooses to pay for a service not covered by their insurance policy has not suffered a cognizable antitrust injury; they have simply made a voluntary economic decision. Furthermore, the complaint alleged that reimbursement was possible if the psychologist's services were billed through a physician, meaning McCready was not entirely foreclosed from her preferred treatment. Her harm arises from the terms of her insurance contract or a potential breach of it, which is a matter for state contract law, not federal antitrust law.
Analysis:
This decision significantly broadened the concept of antitrust standing under § 4 of the Clayton Act. By establishing the 'inextricably intertwined' principle, the Court allowed plaintiffs who are not direct competitors or consumers in the restrained market to sue if they are used as instruments to effectuate an anticompetitive scheme. This ruling lowered the standing barrier for parties indirectly harmed by boycotts and other concerted refusals to deal. The case created a precedent for consumers and other market participants to bring antitrust claims when their financial injury is a direct and intended consequence of a conspiracy, even if the conspiracy's ultimate target was a different market actor.
