Blawgletter wishes you a happy new year.  Now back to work!

The Eighth Circuit ended its 2009 with a ruling in an antitrust case.  The decision turned on market definition — a key battle in cases that don't involve per se unlawful things like cartels that fix prices, restrict output, or allocate customers or territories.  (Market definition lets us figure out if "market power" or "monopoly power" exists and who has it.  A narrow one may inflate the share of the biggest firm.)  We regret to say the court did a less than stellar job.

Cardiologists who had built their own surgical hospital in Little Rock, Arkansas, brought the action under sections 1 and 2 of the Sherman Act.  They sued the largest health management organization, Blue Cross & Blue Shield, and the biggest hospital company, Baptist Health, for locking them out of the market for Little Rock-area patients whose private insurance foots their medical bills.  Blue Cross and Baptist Health achieved the lock out by refusing to pay for services that patients got from "competing" hospitals such as the plaintiff-cardiologists'. 

The cardiologists' complaint excluded from the "product market" patients who paid with Medicare or Medicaid benefits.  It noted that private insurance, on the one hand, and Medicare/Medicaid, on the other, each covered about half of paying patients.

The Eighth Circuit panel upheld dismissal of the complaint.  It ruled that the cardiologists couldn't just leave out half of the potential patients simply because the government — instead of private insurers — paid their medical bills.  It said:

LRCC's claims boil down to the allegation that, due to Baptist Health's allegedly unlawful actions, LRCC has access to fewer patients.  The relevant question, then, is to whom might the cardiologists at LRCC potentially provide medical service?  LRCC's complaint provides the answer:  LRCC can provide service to "patients . . . from either a government program such as Medicare or Medicaid, or from a private insurer."  (emphasis added).  Patients able to pay their medical bill, regardless of the method of payment, are reasonably interchangeable from the cardiologist's perspective — the correct perspective from which to analyze the issue in this case.

Little Rock Cardiology Clinic PC v. Baptist Health, N0. 08-3158, slip op. at 8 (8th Cir. Dec. 29, 2009).

Why does the ruling leave us cold?  Because the panel leaps from the fact that many patients pay with government money to the notion that they "are reasonably interchangeable" with private insurance patients.  How does the court support its reasonable interchangeability conclusion?  It doesn't, except by ipse dixit ("he himself said it").

But let us pause on the question.  Do docs in fact view the folks that Medicare or Medicaid covers as pretty much the same as patients with private insurance?  Doesn't Medicare/Medicaid reimburse at low, low rates?  And, even if docs do regard (stingier) government payments as similar enough to (higher) private insurance remittances, why on earth did Blue Cross and Baptist Health bother to shut the LRCC cardiologists out of the private insurance piece of the patient pie?

The opinion disappoints also in that it doesn't mention the complaint does allege that the lock-up of private insurance patients hurt LRCC by forcing its cardiologists to do more government business.  The scheme, it alleged, changed "the plaintiffs' payor mix to a higher percentage of Medicare and Medicaid patients than would have obtained in a competitive market, which resulted in substantial lost revenues to plaintiffs."  Third Am. Complaint ¶ 193.

But perhaps the plaintiffs didn't say anything about reasonable interchangeability, leaving the court to draw its own inferences?  No.  Sorry.  The panel inferred reasonable interchangeability despite the plaintiffs' express allegations that it didn't exist.  Their Honors did so because, they said, plaintiffs looked at the product market from the perspective of patients (what payment options they had) rather than from that of the cardiologists (what patients they could treat). 

Cardiologists could also choose, you know, to limit their practices to people who couldn't pay at all.  How would their non-paying patients fit in the product market definition?  Wouldn't including them in the definition ignore the fact that doing surgery for free isn't the same as doing it profitably?

Maybe Medicare and Medicaid do pay enough to make their beneficiaries reasonably interchangeable with private insurance patients.  The court simply assumed they do.  We doubt that would do in the pre-Twombly and –Iqbal world, which didn't allow judges to make subjective "plausibility" assessments of allegations.  We respectfully would like a bit more than a pro-dismissal assumption.

Print:
Email this postShare this post on LinkedIn
Photo of Barry Barnett Barry Barnett

Clients and colleagues call Barry Barnett an “incredibly gifted lawyer” (Chambers and Partners) who is “magic in the courtroom” (Who’s Who Legal), “the top antitrust lawyer in Texas” (Chambers and Partners), and “a person of unquestioned integrity” (David J. Beck, founder of Beck…

Clients and colleagues call Barry Barnett an “incredibly gifted lawyer” (Chambers and Partners) who is “magic in the courtroom” (Who’s Who Legal), “the top antitrust lawyer in Texas” (Chambers and Partners), and “a person of unquestioned integrity” (David J. Beck, founder of Beck Redden).

Barnett is a Fellow in the American College of Trial Lawyers, and Lawdragon has named him one of the top 500 lawyers in the United States three years in a row. Best Lawyers in America has honored him as “Lawyer of the Year” for Bet-the-Company Litigation (2019 and 2017) and Patent Litigation (2020) in Houston. Based in Texas and New York, Barnett has tried complex business disputes across the United States.

TRIAL COUNSEL
Barnett’s background, training, and experience make him indispensable to his clients. The small-town son of a Texas roughneck and grandson of a Texas sharecropper, Barnett “developed an unusual common sense about people, their motivations, and their dilemmas,” according to former client Michael Lewis.

Barnett has been historically recognized for his effectiveness and judgment. His peers chose him, for example, to the American College of Trial Lawyers and American Law Institute. His decades of trial and appellate work representing both plaintiffs and defendants have made him a master strategist and nimble tactician in complex disputes.

Barnett focuses on enforcement of antitrust laws, the “Magna Carta of free enterprise,” in Supreme Court Justice Thurgood Marshall’s memorable phrase. “Barry is one of the nation’s outstanding antitrust lawyers,” according to Joseph Goldberg, a member of the Private Antitrust Enforcement Hall of Fame. Named among Texas’s top ten antitrust lawyers of 2023, Business Today calls Barnett a “trailblazer” among the “distinguished legal minds” who “dedicate their skill and expertise to the maintenance of healthy competition in various sectors” of the Lone Star State’s booming economy. Barnett is also adept in energy and intellectual property matters and has battled for clients against a Who’s Who list of corporate behemoths, including Abbott Labs, Alcoa, Apple, AT&T, BlackBerry, Broadcom, Comcast, Dow, JPMorgan Chase, Samsung, and Visa.

Barnett commands a courtroom with calm and credibility and “is the perfect lawyer for bet the company litigation,” said Scott Regan, General Counsel of former client Whiting Petroleum. His performance before the Supreme Court in Comcast Corp. v. Behrend prompted the Court to withdraw the question on which it had granted review. The judge in a trial involving mobile phone technology called Barnett “one of the best” and that his opening statement the finest he had ever seen. Another trial judge told Barnett minutes after a jury returned a favorable verdict against the county’s biggest employer that he was one of the two best trial lawyers he’d ever come across—adding that the other one was dead.

COMPLETE PACKAGE
A versatile trial lawyer, Barnett knows how to handle a case all the way from strategic pre-suit planning to affirmance on appeal. He’s tried cases to verdict and then briefed and argued them when they went before appellate courts, including the Second, Third, Fifth, and Tenth Circuits, the Supreme Court of Louisiana, and (in the case of Comcast Corp. v. Behrend) the Supreme Court of the United States.

Barnett is a sought-after public speaker, often serving on panels and talking about topics like the trials of antitrust class actions and techniques for streamlining complex litigation. He also comments on trends in commercial litigation and the implications of major rulings for outlets such as NPR, Reuters, Law360, Corporate Counsel, and The Dallas Morning News. He’s even appeared in a Frontline program about underfunding of state pensions, authored chapters on “Fee Arrangements” and “Techniques for Expediting and Streamlining Litigation” (the latter with Steve Susman) in the ABA’s definitive treatise on Business and Commercial Litigation in Federal Courts, 5th, and commented on How Antitrust Enforcers Might Think Like Plaintiffs’ Lawyers.

HARD GRADERS
Clients and other hard graders have praised Barnett for his courtroom skills and legal acumen.

A client in a $100 million oil and gas case, which Barnett’s team won at trial and held on appeal, said Barnett and his team “presented a rare combination of strong legal intellect, common sense about right and wrong, and credibility in the courtroom.” David McCombs at Haynes and Boone said Barnett “has a natural presence that goes over well with juries and judges.”

Even former adversaries give Barnett high marks. Lead opposing counsel in a decade-long antitrust slugfest said “Barry is a highly skilled advocate. He understands what really matters in telling a narrative and does so in a very compelling manner.”

CIVIC ENGAGEMENT
Barnett relishes opportunities to collaborate with all kinds of people. At the Center for American and International Law (CAIL), founded by a former prosecutor at Nuremberg in 1947 and headquartered in the Dallas area, he has served on the Executive Committee, co-chaired the committee that produced CAIL’s first-ever strategic plan, supported CAIL’s Institute for Law Enforcement Administration and other development efforts, and proposed formation of a new Institute for Social Justice Law. CAIL’s former President David Beck said “Barry is extremely bright” and is “very well prepared in every lawsuit or professional task he undertakes.”

Barnett is also a Trustee of the New-York Historical Society, a Sterling Fellow at Yale, a member of the Yale University Art Gallery’s Governing Board, a winner of the Class Award for his work on behalf of his college class, and a proud contributor to the Yellow Ribbon Program at Harvard Law. Barnett’s pro bono work includes leading the trial team representing people who are at greatest risk of severe illness and death as a result of being exposed to the novel coronavirus SARS-CoV-2 while being detained in the Dallas County jail—work for which he received the NGAN Legal Advocacy Fund RBG Award.

At Susman Godfrey, Barnett has served on the firm’s Executive Committee, Employment Committee, and ad hoc committees on partner compensation, succession of leadership, and revision of the firm’s partnership agreement. He also twice chaired the Practice Development Committee.

KEEPING PERSPECTIVE
Barnett understands that clients face many pressures. Managing the stress is important, especially in matters that take years to resolve. He encourages clients to call him whenever they have a question or concern and to keep the inevitable ups and downs in perspective. He wants them to know that he will do his level best to help them achieve their goals. He also strives to foster trust and to make working with him a pleasure.

Cyrus “Skip” Marter, the General Counsel of Bonanza Creek in Denver and a former Susman Godfrey partner and client, said Barnett is “excellent about communicating with clients in a full and honest manner” and can “negotiate for his clients from a position of strength, because he is not afraid to take a case through a full trial on the merits.” Stacey Doré, the President of Hunt Utility Services and a former client, said that Barnett is “an excellent trial lawyer and the person you want to hire for your bet-the-company cases. He is client focused, responsive, and uniquely savvy about trial and settlement strategy.” A New York colleague said, “Barry is a joy to work with as co-counsel. He tackles complex procedural and factual hurdles capably, efficiently, and without drama.”

PERSONAL
Barnett’s wide-ranging experience and calm, down-to-earth approach enable him to connect with clients, judges, jurors, witnesses, and even opposing counsel. He grew up in Nacogdoches, Texas. He co-captained his high school varsity football team as an All-East Texas middle linebacker while also serving as the Editor of Key Club’s Texas-Oklahoma District, won the Best Typist award, took the History Team to glory, and sang in the East Texas All Region Choir. As Dan Kelly of client Vistra Corp. put it, Barnett is “a great person to be around.”

Barnett is steady and loyal. He has practiced at Susman Godfrey his entire career. He and his wife Nancy live in Dallas and enjoy spending time in Houston and New York. Their daughter works for H-E-B in Houston, and their son is a Haynes and Boone transactions lawyer in Dallas.

As a member of Ivy League championship football teams in his junior and senior years at Yale and a parent of two Yalies, Barnett has no trouble choosing sides for “The Game” in November. And he knows how important fighting all the way to the end is. On his last play from scrimmage, in the waning minutes of The Game on Nov. 22, 1980, he recovered a Crimson fumble.

Yale won, 14-0.