Sheridan Manasen, (Cross-Appellee) v. California Dental Services, (Cross-Appellant)

Eleven California dentists, six of whom are participating dentists and five of whom are non-participating dentists under California Dental Services (CDS), a non-profit prepaid dental care plan, brought a class action against CDS. They allege both primary and secondary boycott by CDS and its subscribers against non-participating dentists, as well as coercion, price-fixing and intimidation. We reverse and remand.

Under § 2(b) of the McCarran Act, 15 U.S.C. § 1012 (b), the Federal antitrust laws (Sherman Act, Clayton Act, Federal Trade Commission Act) are “applicable to the business of insurance to the extent that such business is not regulated by State Law.” But if state law regulates the business of insurance no act of Congress is to supersede the state law (unless such act specifically relates to the business of insurance). However, § 3(b) of the McCarran Act, 15 U.S.C. § 1013 (b), removes the § 2(b) exemption from the Sherman Act as to “any agreement to boycott, coerce, or intimidate, or act of boycott, coercion, or intimidation.”

The district court granted summary judgment in favor of CDS, construing the § 3(b) exception narrowly to only insurance companies blacklisting…