Tuesday, November 12, 2013

Kartell v. Blue Shield of Massachusetts, Inc. case brief

Kartell v. Blue Shield of Massachusetts, Inc. case brief summary
749 F.2d 922 (1984)

Defendants appealed from a decision of the United States District Court for the District of Massachusetts that found them in violation of the Sherman Act, 15 U.S.C.S. §§ 1 and 2 and issued an injunction due to defendants' alleged "ban on balance billing."


Defendants were major health insurance providers in the state, and the major characteristic of their coverage was the payment of a fixed fee, determined by defendants, to the doctors and hospitals providing the services. Plaintiffs brought suit alleging that this practice violated the Sherman Act's, 15 U.S.C.S. §§ 1 and 2, prohibitions against restraint of trade and monopolization. The trial court agreed and defendants appealed.


  • The court reversed on the grounds that antitrust law did not stop a buyer of services from determining the price or characteristics of the product to be sold, and under the facts here, defendants were merely buyers of medical services on behalf of its insureds. 
  • The court further held that defendants were not engaged in unlawful monopoly pricing because more than monopoly power was necessary to be shown to make the charging of a noncompetitive price unlawful.

The judgment that the ban on balance billing was unlawful was reversed on the grounds that defendants were not engaged in unlawful restraint of trade and monopolization because they were merely buyers of services on behalf of their insureds. The injunction was thus vacated. In all other respects the judgment of the district court was affirmed.

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