12.07.2009 Williams Mullen Secures Favorable Outcome for Blue Cross Blue Shield of North Carolina RICHMOND, VA. – Williams Mullen announces that it secured a favorable outcome for its client, Blue Cross Blue Shield of North Carolina (“BCBSNC”), last week in federal court in Charlotte, N.C. The case, John D. Powderly, II, et al. v. Blue Cross and Blue Shield of North Carolina, was resolved four days before a jury trial was to begin when the plaintiffs, Dr. John Powderly and Carolina BioOncology Institute, asked the United States District Court for the Western District of North Carolina to enter a consent judgment in favor of BCBSNC on all claims.

The case began in March 2008 with plaintiffs, Dr. John Powderly, a Charlotte-based medical oncologist, and his oncology practice, Carolina BioOncology Institute, claiming that BCBSNC’s denial of his request for admission to its network of preferred medical providers was unlawful. Specifically, Dr. Powderly contended that BCBSNC had sufficient “market power” as the buyer of health care services to constitute an unlawful “monopsonist” (the buyer equivalent of a monopolist) and that, as a result, BCBSNC’s decision to deny plaintiffs network admission violated Section 2 of the Sherman Antitrust Act. Plaintiffs also alleged that BCBSNC’s decision was contrary to public policy — in violation of the North Carolina Unfair and Deceptive Trade Practices Act — and that it constituted tortious interference with plaintiffs’ contractual relationships with his patients and clinical trial sponsors. BCBSNC maintained that all of plaintiffs’ claims lacked merit: BCBSNC denied that it had market power or had otherwise violated the antitrust laws, denied that its decision not to admit plaintiffs into its network constituted a violation of North Carolina public policy, and maintained that a health insurer’s decision not to admit a doctor into a preferred provider network does not, in any circumstances, give rise to a claim of tortious interference.  BCBSNC also maintained that its decision to deny Dr. Powderly admission to its network was based upon legitimate concerns that his practice focused on clinical research that BCBSNC did not cover under its insurance policies, and that no BCBSNC member had suffered any harm as a result of BCBSNC’s decision.

After almost a year of discovery, BCBSNC obtained summary judgment on plaintiffs’ antitrust and state unfair trade practices claims this summer, leaving only the tortious interference claim for trial. However, late last week, with trial only days away and a motion by BCBSNC for summary judgment on that claim pending, plaintiffs consented to judgment in favor of BCBSNC on all claims, ending the case.

Upon the Court’s entry of judgment for BCBSNC, James M. Burns, chair of the firm’s antitrust practice, stated “We are glad that the plaintiffs ultimately recognized that their claims lacked merit and were willing to spare both sides the expense of a costly trial. Hopefully the result provides BCBSNC with the complete vindication in this matter that they deserve.” 

Joining Mr. Burns in the defense of this matter for BCBSNC was senior associate Brian Vick. Other Williams Mullen attorneys assisting in the matter included M. Keith Kapp, Jonathan R. Bumgarner, Elizabeth C. Stone and Thomas J. McKee, Jr.

A copy of the Court’s Judgment for BCBSNC can be found by clicking the link above.