United States District Court, E.D. Michigan, Southern Division
ORDER REGARDING VARIOUS MOTIONS IN LIMINE
DENISE PAGE HOOD, District Judge.
This matter is before the Court on various Motions in Limine filed by the parties. Briefs have been filed and the Court now issues its order.
Aetna filed a two-count Complaint against Blue Cross alleging: Unlawful Agreement in Violation of Sherman Act § 1 (Count One); and, Violation of M.C.L. § 445.772, Michigan Antitrust Reform Act (Count Two). Aetna alleges that Blue Cross, the dominant provider of health insurance and administrative services to managed care plans in Michigan, has implemented a scheme to use ever-increasing premiums from the patients and employers it serves in order to protect its dominant position and thwart competition from Aetna and other competitors. (Comp., ¶ 1) Aetna claims that Blue Cross entered into exclusionary contracts with hospitals under which Blue Cross agreed to pay hospitals more money if the hospitals increased the rates they demanded to treat patients covered by its competitors' health plans. (Id. ) Aetna claims that Blue Cross' use of most favored nations clauses ("MFNs") reduced competition.
A. Motion in Limine Standard of Review
The Federal Rules of Evidence does not explicitly authorize in limine rulings, but the practice was developed pursuant to a district court's inherent authority to manage the course of trials. Luce v. United States, 469 U.S. 38, 31 (1984). It is within the district court's discretion to make an in limine ruling on evidentiary matters, but there is no right to an in limine ruling. Huddleston v. United States, 485 U.S. 681, 688-89 (1988). A motion in limine ruling is nothing more than a preliminary opinion which allows the parties to formulate trial strategy. United States v. Yannott, 42 F.3d 999, 1097 (6th Cir. 1994). The trial court is not bound by an in limine ruling and can change its determination during the trial where sufficient facts have developed to warrant the change or even if nothing unexpected happens at trial. Id.; Luce, 469 U.S. at 41-42). In analyzing a motion in limine, the trial court first considers issues of relevance, admissibility and prejudice.
Rule 401 of the Rules of Evidence defines relevant evidence as "evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable that it would be without the evidence." The standard set forth in Rule 401 is a liberal one. Churchwell v. Bluegrass Marine, Inc., 444 F.3d 898, 905 (6th Cir. 2006). Rule 402 states that "all relevant evidence is admissible, except as otherwise provided..." and that "evidence which is not relevant is not admissible." Rule 403 states that "although relevant, evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury, or by considerations of undue delay, waste of time, or needless presentation of cumulative evidence." Trial courts have broad discretion in determining whether to admit evidence based on considerations of relevance, materiality and prejudice. United States v. Jackson-Randolph, 282 F.3d 369, 376 (6th Cir. 2002).
B. Evidence Required in Antitrust Law
The Sherman Act, 15 U.S.C. § 1, provides that a contract, combination in the form of trust, or conspiracy, in restraint of trade or commerce is illegal. 15 U.S.C. § 1. Section 1 has been interpreted to prohibit "unreasonable agreements in restraint of trade. State Oil Co. v. Khan, 522 U.S. 3, 10 (1997). Section 1 provides that a contract, combination in the form of trust, or conspiracy, in restraint of trade or commerce is illegal. 15 U.S.C. § 1. A plaintiff must prove that defendant 1) contracted, combined or conspired among each other, that such 2) unreasonably restrained trade in the relevant market. Nat'l Hockey League Players' Assoc. v. Plymouth Whalers Hockey Club, 325 F.3d 712, 718 (6th Cir. 2003); Expert Masonry, Inc. v. Boone County, Ky, 440 F.3d 336, 342 (6th Cir. 2006). The antitrust plaintiff "must show (1) that the alleged violation tends to reduce competition in some market and (2) that the plaintiff's injury would result from a decrease in that competition rather than from some other consequence of the defendant's actions." Tennessean Truckstop v. NTS, Inc., 875 F.2d 86, 88 (6th Cir. 1989). A private antitrust plaintiff, in addition to having to show injury-in-fact and proximate cause, must eventually prove "antitrust injury." In re Cardizem CD Antitrust Litigation, 332 F.3d 896, 909 (6th Cir. 2003). "Antitrust injury" is (1) "injury of the type the antitrust laws were intended to prevent" and (2) injury "that flows from that which makes defendants' acts unlawful." Id. (quoting Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 489 (1977). The relevant antitrust laws "were enacted for the protection of competition not competitors. " Id. at 488 (1977); Indeck Energy Servs., Inc. v. Consumers Energy Co., 250 F.3d 972, 977 (6th Cir. 2000). A plaintiff's showing of harm only as to its capacity as a competitor in the marketplace, not as a defender of marketplace competition, is insufficient to establish an antitrust claim. Valley Products Co., Inc. v. Landmark, 128 F.3d 398, 403 (6th Cir. 1997).
C. Blue Cross' Motion in Limine to Exclude At Trial Aetna's Written Expert Reports (Doc. No. 317)
Blue Cross seeks to exclude two written expert reports submitted by Aetna authored by Dr. Christopher Vellturo and Dr. Gustavo Bamberger asserting these reports are hearsay. No written opposition was filed to this motion by Aetna.
Generally, the written report of expert witnesses prepared in anticipation of trial are inadmissible because they are considered hearsay. Fed.R.Evid. 702, 703, 1006; Engebretsen v. Fairchild Aircraft Corp., 21 F.3d 721, 729 (6th Cir. 1994). The expert reports will be excluded at trial and Blue Cross' Motion in Limine to Exclude at Trial Aetna's Written Expert Reports is granted.
D. Blue Cross' Motion in Limine to Exclude Evidence of Supposed Antitrust or Other Legal Concerns (No. 318)
Blue Cross seeks to exclude evidence of and all references to any "antitrust concerns" or other legal concerns relating to the use of MFNs that Michigan hospital executives or Blue Cross witnesses expressed or considered, including but not limited to: 1) internal Blue Cross communications; 2) internal hospital communications; and 3) communications between Blue Cross witnesses and hospital executives. Blue Cross claims that such evidence lacks probative value since these opinions do not answer the question of whether the conduct was illegal. Even if these documents or witnesses' testimony had probative value, prejudice to Blue Cross far outweighs any probative value of this evidence. Blue Cross claims that the mere expression of "antitrust concerns" would confuse and mislead the jury that there would be a legal basis for that concern.
Aetna responds that the statements Blue Cross seeks to exclude are central to explain to the jury that even though numerous parties raised concerns that these contracts violated federal antitrust laws, that Blue Cross continued to pursue these contracts in the face of these concerns. Aetna claims these concerns speak volumes about Blue Cross' intentions and the importance of these contracts in Blue Cross' eyes. Aetna asserts that this evidence is relevant to show that Blue Cross had to pay millions of dollars to hospitals to accept the MFNs because these hospitals resisted the contracts based on antitrust concerns. The evidence is also relevant according to Aetna because it casts doubt on the credibility of testimony that Blue Cross will likely present at trial, that the MFNs were adopted with the support of hospitals or to further Blue Cross' "social mission." Aetna argues that this evidence shows that the witnesses were well aware of the risk. Aetna claims that this evidence also goes to the issue of Blue Cross' market power in that despite the risks, Blue Cross had the ability to control the behavior of the hospitals. Aetna asserts that the evidence also shows Blue Cross' coercive behavior which undermines Blue Cross' argument that the MFNs were procompetitive. Aetna claims that the jury is entitled to know the setting of the case and how the MFNs came into effect.
Blue Cross replies that Aetna wants the jury to conclude that because some hospitals and their lawyers questioned whether MFNs raised issues under the antitrust laws, the MFNs must have been illegal and had anticompetitive effects. Blue Cross claims this is improper and Aetna's various arguments as to why such evidence might be relevant should fail. Blue Cross argues that it is the Court's role to instruct the jury as to the law, and the jury's role to determine the relevant facts. Blue Cross argues that Aetna should not be allowed to obscure or usurp either or both of those functions through non-party lawyer and/or hospital remarks expressing "antitrust concerns" about MFNs before the MFNs went into effect. Blue Cross asserts that evidence of antitrust concerns does not demonstrate anticompetitive effect and whether the MFNs actually had such anticompetitive effect. Blue Cross claims that Aetna's conspiracy arguments and rule of reason arguments are not relevant in this case because there are no allegations of conspiracy and the rule of reason arguments apply to monopoly and RICO cases. Aetna's argument in seeking to allow the evidence is premised on the theory that hospital lawyers and executives knowingly entered into illegal contracts because they were coerced by Blue Cross. The hospital executives' concerns demonstrate that they were doing their jobs during the negotiations of the contracts.
The Court finds that the proposed evidence sought by Aetna to be admitted-documents as to a hospital's concern about antitrust violations-is not relevant to the issues to be tried by the jury. These concerns were raised during the various negotiations between Blue Cross and the hospitals. The issue is whether the contracts entered into by Blue Cross and the hospitals, with the MFN provisions, reduced the competition in some markets and whether Aetna's injury, if any, resulted from a decrease in that competition rather than from some other consequence of Blue Cross' actions, including any alleged coercive actions by Blue Cross to make the hospitals sign the contracts. See, Tennessean Truckstop, 875 F.2d at 88. The illegality at issue is not whether the contracts themselves were illegal, but whether the contracts, specifically the MFN provisions, illegally affected competition. This means that the relevant evidence to be focused on is what occurred after the MFNs went into effect, not whether there were concerns that the contracts were illegal before entering into the contracts. As noted by Blue Cross, there is no conspiracy claim before this Court, which means the hospitals' concerns before entering into the contracts with Blue Cross are not relevant. Even though Aetna claims that the hospitals were "coerced" into entering into the contracts, the fact is that they did so. The issue before the jury is not whether such contracts exist. Here, there is no dispute that the hospitals entered into the MFN contracts with Blue Cross, therefore any concerns raised either by the hospital or Blue Cross officials during the negotiations of the contracts are not relevant to how the MFN contracts affected competition after the contracts went into effect. Blue Cross' Motion In Limine to Exclude Evidence of Supposed Antitrust or Other Legal Concerns prior to the applicable parties entering into the MFN contracts is granted.
E. Blue Cross' Motion in Limine to Exclude Evidence of and all References to MFN Hearsay and Speculation (No. 319)
Blue Cross seeks to exclude evidence, mostly from Aetna employees, that Blue Cross' MFNs had effects on Aetna's business as hearsay and based on lack of personal knowledge. Blue Cross cited three examples of this type of testimony. The first was the testimony of Aetna employees, Ms. Lantzy-Talpos who testified that Blue Cross' MFN caused Aetna's rate at Beaumont to increase, but she also admitted that no one at Beaumont told her that and that her conclusion was based on newspaper accounts. Kelly Wright, a Cofinity employee, testified that the MFN contracts caused harm to Cofinity's business, but admitted that she did not know exactly how the MFN contracts affected the business. Mr. Winters, an Aetna employee, testified that he thought it was possible that a hospital with an MFN contract with Blue Cross could affect Aetna's rate at that hospital, but that he did not know how. Daniel Fishbein, an Aetna employee, testified that it was a reasonable theory that if Humana was seeing some decrease it was because of the Blue Cross MFNs. He claims that this affected all discounts including the Cofinity discounts. Mr. Fishbein conceded this information came from communications with Humana about discount degradation, but not specifically about MFN contracts.
Blue Cross argues that the only person who would have first-hand knowledge whether the MFNs affected the rate a hospital gave Aetna would be that hospital. This non-expert testimony as to why Aetna received a certain rate from a certain hospital is not based on personal knowledge and because these witnesses are not expert witnesses, Blue Cross argues they cannot speculate as to the reason why Aetna received such a rate.
Aetna responds that Blue Cross merely cited snippets of the witnesses' testimony. Aetna claims that these witnesses have the experience and personal knowledge of whether the MFNs affected Aetna. Some of these witnesses are contract negotiators who have ample foundation, experience and personal knowledge to testify about the impact of the MFNs on Aetna's business. Aetna claims that Blue Cross' request for a broad, categorical and blanket exclusion of its witnesses without any inquiry into the purpose for each testimony offered or whether the testimony is relevant hearsay should be denied at this time.
The Court at this time declines to exclude Aetna's non-expert witnesses from testifying at trial given that they may have the experience and personal knowledge of Aetna contracts with the hospitals and the impact of the MFNs. Although the testimonies cited by Blue Cross, without more, may indicate that the witnesses' testimonies are based on hearsay or lack of personal knowledge, the Court will not order a blanket exclusion of these witnesses' testimony at trial. However, if at trial a hearsay statement or testimony based on lack of personal knowledge will be offered, Blue Cross may certainly object to such at trial. The Court will then rule on the admissibility of such testimony to be offered at trial. Blue Cross' Motion in Limine to Exclude Evidence of and all References to Alleged Effects of MFNs by Aetna nonexpert witnesses is denied without prejudice.
F. Blue Cross' Motion in Limine to Exclude Evidence of Changes to Michigan Law (No. 321)
Blue Cross moves to exclude any reference at trial regarding the enactment of M.C.L. §§ 550.1400 and 550.3405a and OFIR Order No. 12-035-M, all of which address the legality of MFNs, including any statement that MFNs are illegal or prohibited. Blue Cross claims the changes to the law are not relevant to the issues in this case and do not add to any fact Aetna is required to prove at trial. Blue Cross argues that the primary law at issue is 15 U.S.C. § 1. The changes in Michigan law are irrelevant since they were enacted after Aetna filed its complaint and were not in effect during the relevant period. Blue Cross claims the changes in the law are irrelevant and inadmissible under Rules 401 and 402 and unduly prejudicial to Blue Cross.
Aetna claims that Blue Cross' motion to exclude references to related litigation, investigations and legislation regarding MFNs is a key part of its effort to conceal critical facts from the jury and tilt the case in its favor. Aetna asserts that Blue Cross' defense is that the MFNs did not prevent Aetna from securing better rates from hospitals. Aetna claims that the evidence at issue will show that Blue Cross' MFN contracts accomplished their intended goal to keep competitors from eroding Blue Cross' hospital discount advantage. Aetna will show that before the MFNs took effect, Aetna had improved its hospital rates and when the MFNs took effect, Aetna was unable to make further progress. Aetna claims that Blue Cross' MFN grip loosened in October 2010 when the government and private plaintiffs filed lawsuits challenging the MFNs. Aetna states that Blue Cross' "chokehold" was finally broken when the MFNs were banned in Michigan in early 2013. Aetna asserts that Aetna began experiencing success in achieving hospital rate improvements as a direct result of this litigation and legislation. Aetna claims that the related lawsuits and legislative ban on MFNs are highly relevant to the antitrust impact and causation to show the "before-during-after" scenario.
Blue Cross replies that Aetna does not discuss the change in Michigan law in 2013 without "burying" that issue in a list of other evidence Blue Cross has moved to exclude in other motions. Blue Cross claims Aetna has not connected the post-Complaint changes in Michigan law and its asserted injury because of the MFNs. Blue Cross asserts that Aetna cannot really expect the Court to believe that changes in Michigan law in 2013 allowed Aetna to achieve contracting successes after October 2010. Blue Cross claims that Aetna in fact has told the Court that evidence of changes in Michigan law that allowed Blue Cross to reorganize as a non-profit mutual company should be excluded because they are irrelevant. (Doc. No. 324) Blue Cross asserts that Aetna wants to tell the jury that the law was changed in 2013 prohibiting MFNs so that the jury will ...