On August 5, Blue Cross of Michigan (“BCM”) filed a notice seeking to have the Sixth Circuit Court of Appeals review the recent decision by Judge Denise Hood (U.S.D.C., Eastern District of Michigan) denying BCM’s motion to dismiss the antitrust case filed against it by the Department of Justice Antitrust Division. The Justice Department’s action, filed in October of 2010, challenges BCM’s use of “most favored nation” clauses in its provider contracts. In denying BCM’s motion, Judge Hood ruled that the DOJ’s claims satisfied the pleading requirements of Twombly, that the Burford Abstention Doctrine was not applicable to DOJ’s claim, and that BCM’s conduct was not immune from challenge under the State Action Doctrine.

While an appeal from the denial of a motion to dismiss a complaint is generally not allowed because it does not constitute a final order by the District Court, BCM contends that, because the District Court’s decision was based, at least in part, upon the Court’s denial of BCM’s state action argument, the appellate court has jurisdiction to hear its appeal under the “collateral order doctrine.” As the Supreme Court has explained, this doctrine permits “a small set of prejudgment orders that are ‘collateral to’ the merits of an action and ‘too important’ to be denied immediate review” to be heard prior to a final decision by the lower court. Mohawk Industries v. Carpenter, 130 S. Ct. 599 (2009). The prerequisites to the application of the doctrine are that the District Court order must (1) conclusively determine the disputed question; (2) resolve an important issue completely separate from the merits of the action; and (3) be effectively unreviewable on appeal from a final judgment.” Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541 (1949).

Significantly, BCM acknowledges in its Notice of Appeal that the Sixth Circuit has previously held that the denial of a motion to dismiss on state action immunity grounds is not immediately appealable, Huron Valley Hospital v. City of Pontiac, 972 F.2d 563 (6th Cir. 1986). BCM argues, however, that “the Huron Valley decision is distinguishable and, in light of subsequent case law in other circuits should be overruled.” Briefing on this issue has not yet begun, but will without question constitute a threshold issue for BCM’s appeal.

In the meantime, Judge Hood has issued a Scheduling Order in the case, directing that the parties move forward with discovery, which has reportedly included plans for well over 100 depositions. The Court has also set a trial date of February of 2013. Whether BCM’s appeal will affect this timetable is unclear at this time.