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$627M in Attorney Fees in BCBS MDL

August 9, 2022 | Posted in : Fee Award, Historic / Landmark Case, Practice Area: Class Action / Mass Tort / MDL

A recent Law 360 story by Jack Karp, “Boies Schiller, Hausfeld Score $627M in Fees in BCBS MDL” reports that an Alabama federal judge awarded $626.6 million in attorney fees and another $40.9 million in costs on Tuesday to Boies Schiller Flexner LLP, Hausfeld LLP and other lawyers who scored a $2.67 billion class award for subscribers in multidistrict litigation against Blue Cross Blue Shield insurers.

The fees represent 23.47% of the $2.67 billion settlement fund, which U.S. District Judge R. David Proctor said falls within the lower half of the Eleventh Circuit's "benchmark range" of 20% to 30%. He also gave final approval to the settlement itself Tuesday.

The fees amount is "fair and reasonable" given the nature of the settlement, according to the judge, who noted that "the settlement also provides historic, transformative, pro-competitive injunctive and equitable relief that will greatly benefit the members of the subscribers class."

"The case presented a myriad of difficult factual issues, requiring substantial discovery to resolve, including the production of millions of pages of documents and the taking of scores of depositions," he added.

The $40.9 million in litigation costs and expenses is also "fair, adequately documented, reasonable," according to the judge.

"As the judge said, it's consistent with awards that have been approved in the Eleventh Circuit, and therefore we met all the factors that the court said needed to be considered," one of the subscribers' lead attorneys, Michael Hausfeld, told Law360 Tuesday.

Attorneys coordinating the defense for the Blue Cross and Blue Shield insurers did not respond to a request for comment.

Hausfeld and David Boies were appointed by Judge Proctor in 2013 to serve as lead counsel for a putative class of plan subscribers.

The nation's BCBS insurers agreed in 2020 to the $2.67 billion class settlement fund and sweeping anticompetitive practice reforms to settle the long-running multidistrict suit based in Alabama federal court that was filed by dozens of subscriber groups.

The multidistrict litigation, opened in January 2013, accused dozens of mostly nonprofit BCBS-affiliated insurers of using trademarking and other practices, including limits on non-Blue revenues to suppress competition. The MDL eventually grew to include more than 40 plaintiffs' groups nationwide.

In addition to the financial award, injunctions proposed under the agreement eliminate a national cap on revenues permitted for the organizations that requires two-thirds of each member plan's national health care-related revenue to come from "Blue-branded" services.

The agreement also eliminates some restraints on acquisitions by BCBS organizations, eliminates some direct-contracting restrictions and limits other practices giving preference to BCBS-related services.

Individuals who opted out of the settlement filed their own suit in Florida federal court in 2021, saying the deal doesn't compensate health plan subscribers enough for the Sherman Act violations they've claimed.

The case is In re: Blue Cross Blue Shield Antitrust Litigation, case number 2:13-cv-20000, in the U.S. District Court for the Northern District of Alabama.