Home Jurisdiction Panel rejects Blue Cross and Blue Shield bet to drag California hospitals’ antitrust claims into multidistrict litigation

Panel rejects Blue Cross and Blue Shield bet to drag California hospitals’ antitrust claims into multidistrict litigation



SAN FRANCISCO, December 13, 2021 / PRNewswire / – Enabled December 8, 2021, the Judicial Panel on Multidistrict Litigation (“JPML”) granted the VHS Liquidating Trust (“VHS”) motion to quash the panel’s conditional transfer order to the District Court of the North District of Alabama, who hears intercommunal litigation entitled In Re: Blue Cross Blue Shield Antitrust Litigation, MDL No. 2406 (“MDL”). This order follows the decision of the Bankruptcy Court of the North District of California 22 November 2021 order granting VHS ‘motion to dismiss and dismissing Blue Cross Blue Shield Association (“BCBSA”) stay motion. After the referral, the case continues again in the California Superior Court in from Alameda County complex department.

VHS and other plaintiffs filed a lawsuit in Alameda Superior Court under California antitrust laws and the laws of other states. Shortly after being served, however, BCBSA and the other defendant Blues filed a Notice of Withdrawal, automatically sending the entire lawsuit back to bankruptcy court as adversarial proceedings. Concurrently, BCBSA has filed a notice of potential joint action with JPML, with the aim of transferring the underlying stock to MDL. This simultaneous procedural wager made it clear that the removal of bankruptcy was uniquely and cynically designed to result in state legal action in the MDL, even though there was no diversity or federal jurisdictional basis for that to happen. the case either in federal court. JPML issued a routine conditional transfer order, which VHS opposed, and filed a motion to quash. VHS has filed a motion to remand the underlying case to Alameda County Superior Court, and BCBS has filed a motion for a stay of adjudication until the JPML decides on the matter. motion for annulment.

The referral motion and the stay motion were heard simultaneously on November 12, 2021. Sean McTigue by Bartko Zankel Bunzel & Miller, PC (“Barkto”) argued on behalf of VHS and the other complainants, and Zachary Holmstead of Kirkland & Ellis (“Kirkland”) advocated on behalf of the BCBSA. Chief Justice Novack of the Northern District of California Bankruptcy Court took the petitions in question. At 22 November 2021 Judge Novack ruled on the stay motion that “[s]imply that a court must resolve the question of jurisdiction ratione materiae, and that court is as well placed to decide the referral motion as it is United States District Court of the North District of Alabama. … Notwithstanding the results of a preliminary examination of the matter of jurisdiction, there is no evidence that the MDL Court has addressed or will address an identical or similar jurisdictional scenario. Consequently, relying on the MDL process will not avoid potentially inconsistent or contradictory competency analyzes in this area. “

The Court continued with respect to the motion for remand: “In the absence of a compelling analysis of how these other asset classes create a good faith dispute that requires this court to ‘interpret’ the plan, Blue Shield / Blue Cross argument leaves this court wanting. The court should not find “tied jurisdiction” on a speculative assessment of how state law litigation may proceed. Accordingly, the applicants’ referral request is granted. “

*VHS Liquidating Trust et al vs. Blue Cross Blue Shield Association et al,
Alameda County Superior Court Case Number RG21106600

The plaintiffs VHS Liquidating Trust, Prime Healthcare Services, Inc., Prime Healthcare Foundation, Inc. and Prime Healthcare Management, Inc. are represented by the law firm Bartko Zankel Bunzel & Miller, PC and the team led by Patrick M. Ryan, Sean R. McTigue, John “Jack” McLean, Chad E. DeVeaux, Marisa C. Livesay, and Brittany N. DeJong. The defendant Blue Cross Blue Shield Association was represented by the law firm Kirkland & Ellis, LLP. As a result of the order granting the request for pre-trial detention, however, Cravath, Swaine & Moore LLP and Mayer Brown LLP now represent the defendant Blue Cross Blue Shield Association. The other Blue defendants were represented by, in no particular order, Axinn Veltrop & Harkrider, LLP, Phillips Lytle LLP, Keller Benvenutti Kim LLP, Crowell & Moring LLP, Shearman & Sterling LLP, Hogan Lovells US LLP, Cravath Swaine & Moore LLP, Kilpatrick Townsend & Stockton LLP, Mayer Brown LLP, McNutt Law Group LLP and Chan Punzalan, LLP.

Contact: Patrick M. Ryan
(414) 291-4540


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SOURCE Bartko, Zankel, Bunzel & Miller