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Boies, Lawyers Suing Blue Cross to Receive $667 Million Fee (1)

Aug. 9, 2022, 6:27 PMUpdated: Aug. 9, 2022, 10:07 PM

A federal judge has signed off on a $667 million fee for the lawyers who spent nine years crafting a $2.67 billion antitrust settlement with health insurance plans offered by Blue Cross Blue Shield.

The final settlement was approved Tuesday by federal judge R. David Procter, who said the legal fee was reasonable and represented 25% of the award for health insurance purchasers. The health insurance company also agreed to stop business practices the litigation argued were designed to limit competition between various Blue Cross Blue Shield health plans.

The case was mainly shepherded by lawyers at Boies Schiller Flexner and Hausfeld LLP, who are poised to receive the largest share of the nine-figure award.

David Boies, the co-founder of Boies Schiller who served as co-lead counsel with Michael Hausfeld, said the settlement will increase competition in the health insurance market.

“The dollar recovery and the historic competition-enhancing injunctive relief is unprecedented in a private antitrust case unrelated to government action,” Boies said in a statement. “This case illustrates the power and importance of private enforcement of the antitrust laws.”

Hausfeld did not immediately respond to a request for comment.

Procter said class counsel had worked on the case for more than 430,000 hours through mid-2020 and heralded the work for bringing “historic, transformative, procompetitive injunctive and equitable relief.”

In an earlier request for the lawyer fee, Boies and Hausfeld compared the scope of the litigation to some of the most well-known antitrust cases, including those brought against Standard Oil, American Tobacco Co., and AT&T. Those cases were investigated and brought by the U.S. government. Boies and Hausfeld noted there was no government investigation in the Blue Cross case.

The parties briefed over 150 discovery motions that led to 91 discovery orders, Judge Procter noted in an earlier filing. He wrote that lawyers conducted over 120 depositions and defended over 20 depositions of class representatives and experts.

The lawyers also wrote in their earlier fee application that the defendants produced more than 75 million pages that were reviewed by a team of 178 attorneys for the plaintiffs. The settlement negotiations began in 2015 and included 158 in-person and virtual meetings with mediators and 282 telephone conferences, they wrote.

The suit accused dozens of independent insurers affiliated with BCBS of illegally carving up the US health insurance market into regional “service areas” to avoid having to compete with one another.

The settlement received preliminary approval in late 2020.

The case is In re Blue Cross Blue Shield Antitrust Litig., N.D. Ala., No. 13-cv-20000.

(Updates with comment from Boies, detail on scope of litigation throughout. )

To contact the reporter on this story: Roy Strom in Chicago at rstrom@bloomberglaw.com

To contact the editors responsible for this story: Chris Opfer at copfer@bloomberglaw.com; John Hughes at jhughes@bloombergindustry.com