Group Life & Health Co v Royal Drug

" the original court ruling said that state regulation applied. The case was then decided on the basis of state regulation, noting that the federal Sherman Antitrust Act wouldn't apply. "

I thought that "Sherman Act applies (boycott, intimidation by insurer)" is one of the exception that federal government will regulate. So in the Group Life & Health Co v Royal Drug case, should Sherman Antitrust Act apply since it will be ruled by federal?

In both original and post appeals, Should Sherman Antitrust Act applies?

Thank you.

Comments

  • All these different rulings are difficult to untangle. Here is how I understand it:

    • Blue Shield entered into agreements with selected pharmacies
    • Respondents (those bringing action against Blue Shield) claimed this caused a boycott and therefore violated the Sherman Act

    The initial judgment, which was a summary judgment without trial, was:

    • Blue Shield's practice is the business of insurance (and therefore regulated by the state)
    • Blue Shield's practice is not boycott so the Sherman Act is not even relevant (the Sherman Act would still "apply", but it only applies to a boycott and the ruling was that this is not a boycott)
    • Blue Shield may continue their practice

    But the appeal reversed the original summary judgment:

    • Blue Shield's practice is not the business of insurance, so...
    • Blue Shield's practice is not regulated only by the state, so...
    • the full force of federal antitrust laws are applied, so...
    • Blue Shield may not continue their practice
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