Oscar Insurance Co. of Florida v. Blue Cross and Blue Shield of Florida

Cravath represented Blue Cross and Blue Shield of Florida, Inc., Health Options Inc., and Florida Health Care Plan, Inc. (together, “Florida Blue”) in the lawsuit.

On February 19, 2021, Oscar Insurance Company voluntarily dismissed with prejudice the appeal of its lawsuit against Blue Cross and Blue Shield of Florida, Inc., Health Options Inc., and Florida Health Care Plan, Inc. (together, “Florida Blue”), which was pending before the U.S. Court of Appeals for the Eleventh Circuit after Florida Blue won its motion to dismiss the case before the U.S. District Court for the Middle District of Florida on September 20, 2019.

Oscar initiated this lawsuit in November 2018, alleging that Florida Blue’s use of exclusive agents in the sale of individual health insurance violated federal and state antitrust laws by foreclosing Oscar from individual health insurance markets in Florida. Shortly after filing suit, Oscar moved for a preliminary injunction to enjoin Florida Blue from enforcing its exclusivity arrangements. After a hearing on the preliminary injunction, which included oral argument and expert testimony, the district court denied Oscar’s motion.

Oscar then filed an amended complaint in February 2019, which Florida Blue moved to dismiss. The U.S. Department of Justice filed a Statement of Interest in the case, in which the government argued that the McCarran-Ferguson Act, which shields state-regulated “business of insurance” from federal antitrust scrutiny unless the conduct constitutes “boycott, coercion, or intimidation,” does not bar Oscar’s claims. After oral argument on the motion, the district court granted Florida Blue’s motion to dismiss, holding that the McCarran-Ferguson Act barred Oscar’s federal claims and the Florida Antitrust Act, which mirrors federal immunity, barred Oscar’s state claims.

Oscar appealed the district court’s dismissal to the Eleventh Circuit in October 2019, arguing the district court had erred in concluding that the McCarran-Ferguson Act immunizes Florida Blue’s conduct from antitrust scrutiny. The case attracted several amicus briefs, with the government and a group of antitrust scholars submitting briefs in support of Oscar, and another group of antitrust scholars and an expert on the regulation and economics of insurance markets submitting amicus briefs in support of Florida Blue. After oral argument, while the appeal was pending, the Competitive Health Insurance Reform Act was signed into law, eliminating McCarran-Ferguson immunity for health insurers except in limited circumstances not implicated by this case. Nonetheless, Oscar decided to voluntarily drop its lawsuit against Florida Blue with prejudice while its appeal remained pending.

The Cravath team for Florida Blue was led by partners Evan R. Chesler (Picture), Karin A. DeMasi, Lauren Roberta Kennedy and David H. Korn and included associates Rebecca J. Schindel and Joseph H. Margolies.

Involved fees earner: Evan R. Chesler – Cravath Swaine & Moore; Karin DeMasi – Cravath Swaine & Moore; Lauren Roberta Kennedy – Cravath Swaine & Moore; David Korn – Cravath Swaine & Moore; Joseph Margolies – Cravath Swaine & Moore; Rebecca Schindel – Cravath Swaine & Moore;

Law Firms: Cravath Swaine & Moore;

Clients: Blue Cross and Blue Shield of Florida, Inc.; Florida Health Care Plans; Health Options;

Author: Martina Bellini