On October 25, 2023, the Eleventh Circuit overruled several objections to a $2.67 billion antitrust class action settlement agreement that was the product of years of negotiations between Blue Cross and classes of its past and present health plan subscribers.  Two objections, raised by Home Depot, focused on (i) the settlement’s release of antitrust claims arising from Blue Cross’s conduct, and, relatedly, (ii) the adequacy of representation for an injunctive class of plaintiffs who might have future claims based on that conduct.

Home Depot first argued that the settlement, which released all claims “based upon, arising from, or relating in any way to [] the factual predicates of” the underlying litigation, should be rejected because it (a) exceeded the scope of the identical factual predicate doctrine; (b) curtailed private enforcement of the antitrust laws; and (c) perpetuated certain conduct Home Depot argued the district court had deemed unlawful.  The Eleventh Circuit rejected all of these arguments.  It held that the settlement’s scope was no broader than other releases approved in the Eleventh Circuit as it only released claims that “either were raised or could have been raised during the litigation that preceded the settlement,” consistent with the identical factual predicate doctrine.  Furthermore, the Court determined that Home Depot’s antitrust enforcement policy concerns were “overstated” because the release “affects the rights of only some private individuals to sue Blue Cross,” and left “public enforcement of the antitrust laws” undisturbed.  Finally, the Court disagreed that the settlement perpetuates “clearly illegal conduct” by allowing Blue Cross to preserve one of its challenged policies, pointing out that the district court had never ruled that the policy in question was per se illegal and instead had determined that, as a result of the settlement, “Blue Cross materially changed its system by adding procompetitive features and eliminating some anticompetitive features.”

The Court also rejected Home Depot’s second argument that injunctive subclass members were inherently inadequately represented in violation of Rule 23(a)(4) by named plaintiffs and class counsel that also represented the damages subclass.  Distinguishing Home Depot’s cases, the Eleventh Circuit found no “substantial” and “fundamental” conflict between the subclasses because they had “near-complete overlap in class membership,” and therefore their representatives lacked “any incentive to trade away injunctive relief in favor of damages.”

The Eleventh Circuit’s decision may help parties to class actions negotiate class-wide settlements that broadly release prospective claims related to the conduct at issue in the litigation.  This decision shows that the Eleventh Circuit, like many of its sister circuits upon whose precedent the Court relied, is willing to give district courts latitude to approve proposed settlements absent evidence of clear violations of law or public policy.  The decision thus recognizes that prospective releases are not only commonly approved and enforced in antitrust cases, but also that they are an important part of many settlement agreements.