Appeals court vacates $30M BCBS antitrust settlement

The U.S. 6th Circuit Court of Appeals has vacated a $30 million settlement in a suit against Blue Cross Blue Shield of Michigan, holding that the fairness of the settlement cannot be determined due to court orders sealing most of the filings in the antitrust suit, according to Bloomberg BNA.

Plaintiffs brought suit under the Sherman Act in 2014, alleging BCBS of Michigan agreed to reimburse hospitals at higher rates if they would agree to charge other commercial insurers even higher rates. Most of the court filings in the suit were placed under seal, as they contained sensitive financial information or trade secrets, according to the report.

The class members reached a $30 million settlement with BCBS of Michigan in June 2014. After attorneys' fees, costs, incentive awards and administrative fees were deducted, $14.7 million was left to be shared by the 3 million to 7 million class members.

Some class members objected to the deal, arguing they couldn't assess the fairness of the settlement without access to the court record. However, the settlement won preliminary and final approval over the objectors' challenges, according to the report.

The 6th Circuit Court of Appeals vacated the settlement last week, saying it was "unmistakable" that every document sealed at the district court level was done so improperly. Instead of sealing entire filings, the parties should have argued "on a document-by-document, line-by-line basis" that specific information in the documents met the requirements for seal, according to the appellate court.

The court of appeals ordered the district court to unseal the documents and restart the settlement approval process, according to the report.

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