Case: 12-14013   Date Filed: 06/18/2014   Page: 1 of 51


                                                               [PUBLISH]



            IN THE UNITED STATES COURT OF APPEALS

                     FOR THE ELEVENTH CIRCUIT
                       ________________________

                             No. 12-14013
                       ________________________

                   D.C. Docket No. 1:00-md-01334-FAM



In Re: MANAGED CARE, et al.

_____________________________________

MEDICAL ASSOCIATION OF GEORGIA,
CALIFORNIA MEDICAL ASSOCIATION, et al.,

                     Plaintiffs - Appellants,

versus


WELLPOINT, INC.,

                     Defendant - Appellee.

                       ________________________

                Appeal from the United States District Court
                    for the Southern District of Florida
                      ________________________

                              (June 18, 2014)
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Before MARTIN and JORDAN, Circuit Judges, and BAYLSON, * District Judge.

BAYLSON, District Judge:

                                I.      INTRODUCTION
       The issue before us is whether the District Court abused its discretion in

finding Appellants in contempt for violating the terms of a prior Settlement

Agreement.

       Underlying this overarching issue is a complex, twelve-year-old,

multidistrict litigation; a related multidistrict litigation pending in another federal

district court; and whether the District Court reasonably interpreted the Settlement

Agreement in the first action.

       A. MDL 1334
       In 2000, a number of physicians and physician associations initiated a group

of class actions against various providers of health plans, which were consolidated

into a multidistrict litigation and assigned to the Southern District of Florida

(“District Court”). In re Managed Care Litig., No. 1:00-md-01334 (S.D. Fla. Apr.

17, 2000) (“MDL 1334”). The parties settled that lawsuit in 2005, resulting in a

Settlement Agreement and an Order issued by the Southern District of Florida

approving that Settlement Agreement.




       *
        Honorable Michael M. Baylson, United States District Judge for the Eastern District of
Pennsylvania, sitting by designation.
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      B. The UCR MDL
      In 2009, another group of physicians and physician associations – including

Appellants – filed multiple lawsuits against, Appellee, WellPoint, Inc.

(“WellPoint”), which were consolidated into a multidistrict litigation in the Central

District of California. In re WellPoint, Inc. Out-of-Network “UCR” Rates Litig.,

No. 2:09-ml-02074 (C.D. Cal. Aug. 20, 2009) (“UCR MDL”).

      C. The Present Dispute
      The present dispute involves the propriety of the District Court’s Order

holding Appellants in contempt and imposing sanctions for the violation of an

injunction. An earlier Order from the District Court barred Appellants from

pursuing their claims in the UCR MDL, because the District Court found that the

claims had been released by the Settlement Agreement reached by the parties in

MDL 1334. When Appellants refused to withdraw those claims as directed, the

District Court held Appellants in contempt and imposed sanctions.

      For the reasons stated below, we affirm the judgment of the District Court in

large part, but vacate the Injunction as to Appellants’ ERISA claims insofar as they

hinge on the denial or underpayment of benefits following the Settlement

Agreement’s Effective Date (as defined below), and remand to the District Court

for a determination of which ERISA claims can proceed in view of this opinion

and for reconsideration of the imposition of sanctions.


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                           II.    PROCEDURAL HISTORY

       A. MDL 1334
              1. MDL 1334 Allegations

       In 2000, physicians and physician associations initiated an action in the

Southern District of Florida against a group of healthcare insurance companies,

including WellPoint, on behalf of a nationwide class of physicians. This action

was later consolidated into a multidistrict litigation in April 2000. The class

representatives alleged that these insurance companies engaged in a conspiracy by

means of mail and wire fraud to inflate profits by systematically denying, delaying,

and diminishing payments due to them and that “the conspiracy was conducted

through and implemented by” several means, including “the development and

utilization of automated and integrated claims processing and other systems such

as those generated by” the company Ingenix. 1 MDL 1334 D.E. 1607 ¶ 120. 2

              2. Settlement Agreement

       In 2005, WellPoint settled the MDL 1334 claims on a national, class-wide

basis, agreeing to pay $198 million to the class and class counsel and promising to

       1
         Ingenix is a nationwide healthcare information company that sells pricing schedules to
medical providers, healthcare insurers, and others. UCR MDL D.E. 113 (Second Consol. Am.
Compl.) ¶ 116. Ingenix creates its pricing schedules by relying on its database, which compiles
provider charge data regarding various medical procedures throughout the country that it
receives from health insurance companies. 

The Second Consolidated Amended
Complaint alleges that the conspirators used and manipulated the Ingenix database to
systematically under-reimburse for services. 

       2
          We adopt the above citation method to differentiate between citations to the two
different MDL dockets. Throughout this opinion, where we cite to page numbers of docket entry
items, we refer to the ECF generated page number.
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make a wide range of changes to its business practices, including changes to the

method used to determine usual, customary, and reasonable (“UCR”) rates. MDL

1334 D.E. 4321 (“Settlement Agreement”) §§ 7, 8.1, 8.2, 9.1, 16. WellPoint

specifically “agree[d] that, to the extent it uses Physician charge data to determine

the usual, reasonable, and customary amount to be paid for services performed by

Non-Participating Physicians, it will not use any internal claims database” that

systematically underprices claims. Settlement Agreement § 7.14(d).

      In exchange, the class agreed to release all claims related to the allegations

underlying MDL 1334 once the Settlement Agreement took effect. Section 13.1(a)

of the settlement agreement defines a “released claim” and provides:

      [Released Parties shall be released] from any and all causes of action,
      judgments, liens, indebtedness, costs, damages, obligations, attorneys’
      fees, losses, claims, liabilities and demands of whatever kind or
      character (each a “Claim”), arising on or before the Effective Date,
      that are, were or could have been asserted against any of the Released
      Parties by reason of, arising out of, or in any way related to any of the
      facts, acts, events, transactions, occurrences, courses of conduct,
      representations, omissions, circumstances or other matters referenced
      in the Actions . . . .

The next subsection, applicable only to claims against the Blue

Cross Blue Shield Association (“BCBSA”), further provided that:

      The Releasing Parties further agree to forever abandon and discharge
      any and all Claims that exist nor or that might arise in the future
      against BCBSA . . ., which Claims arise from, or are based on,
      conduct by any of the Released Parties that occurred on or before the
      Effective Date and are, or could have been, alleged in the Complaints,


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      whether any such Claim was or could have been asserted by any
      Releasing Party on its own behalf or on behalf of other Persons.

      The Settlement Agreement further provides:

      Each Class Member who has not validly and timely requested to Opt-
      Out of this Agreement and each Signatory Medical Society may
      hereafter discover facts other than or different from those which he,
      she or it knows or believes to be true with respect to the claims which
      are the subject matter of the provisions of § 13, but each such Class
      Member and each Signatory Medical Society hereby expressly waives
      and fully, finally and forever settles and releases, upon the entry of
      Final Order and Judgment, any known or unknown, suspected or
      unsuspected, contingent or non contingent claim with respect to the
      subject matter of provisions of § 13, whether or not concealed or
      hidden, without regard to the discovery or existence of such different
      or additional facts.

             3. Notice to Class Members
      The District Court preliminarily approved the settlement, MDL 1334 D.E.

4336, and notice was mailed to potential class members in August 2005. The

notice stated:

      IF YOU ARE A PHYSICIAN WHO PROVIDED COVERED
      SERVICES TO ANY INDIVIDUAL ENROLLED IN OR
      COVERED BY CERTAIN HEALTH CARE PLANS AT ANY TIME
      BETWEEN AUGUST 4, 1990 AND JULY 15, 2005 . . . PLEASE
      READ THIS NOTICE CAREFULLY.
MDL 1334 D.E. 4608 at 62.

      In the section describing the claims released against WellPoint, the notice

stated that they consisted of claims “arising on or before the date that the Court’s
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order approving the settlement becomes final, that are, were or could have been

asserted.” 

The next sentence added that certain “claims that exist now or

that might arise in the future” are waived against the Blue Cross and Blue Shield

Association (“BCBSA”). 

also stated that the District Court would

hold a hearing in which it “will consider whether to enter orders that would prevent

members of the Class and certain other persons, including the Defendants in the

Actions other than WellPoint, from asserting certain claims against WellPoint in

the future.” 

The notice further described how to obtain additional

information about the proposed settlement.

             4. Approval of Settlement Agreement
      In November 2005, one month after the deadline for filing objections or

opting out of the class, the parties filed a joint motion for the court’s final approval

of the settlement. MDL 1334 D.E. 4608. Among other things, the joint motion:

(1) recited the obligation of the insurance companies to change their business

practices, 

(2) asked the District Court to overrule the limited

objections filed by class members, 

and (3) advised the District Court

that one objector was “simply wrong that the release [was] too broad,” 

      The District Court approved the Settlement Agreement in an Amended

Order issued on January 3, 2006. MDL 1334 D.E. 4684 (the “Injunction”). The

Order enjoined the class members – “Released Parties” under the Settlement


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Agreement – from participating in lawsuits “arising out of or relating in any way to

the Released Claims.” 

5, 18. Generally tracking the language in the class

notice, the amended order approving the settlement noted that the agreement

released claims “that exist now or that might arise in the future against BCBSA,”

and released claims against WellPoint “that are, were or could have been

asserted against any of the Released Parties by reason of, arising out of, or in any

way related to” the facts at issue in MDL 1334. 

The District Court

retained jurisdiction on “all matters relating to (a) the interpretation,

administration, and consummation of the Settlement Agreement and (b) the

enforcement of the injunctions described.” 

      B. UCR MDL
      In 2009, Appellants – three medical associations and three physicians, who

had been members of the settlement class in MDL 1334 – joined with other

plaintiffs to file multiple lawsuits against WellPoint regarding alleged

underpayment for the provision of medical services. The Judicial Panel on

Multidistrict Litigation consolidated those lawsuits into the UCR MDL, a separate

multidistrict litigation in California. Plaintiffs filed the First Consolidated

Amended Complaint on November 2, 2009, in which the physicians brought

ERISA claims under § 1132(a)(1)(B), the medical associations brought various




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state law claims, and all plaintiffs brought RICO and antitrust claims. UCR MDL

D.E. 12.

       The UCR MDL plaintiffs then filed a Motion for Leave to File a Second

Consolidated Amended Complaint on June 28, 2010. UCR MDL D.E. 113. On

July 12, 2010, the district court granted the plaintiffs’ motion and deemed the

Second Consolidated Amended Complaint filed as of that day. UCR MDL D.E.

124. The Second Consolidated Amended Complaint reiterated the allegations of

the First Amended Consolidated Complaint, setting forth allegations that

WellPoint had engaged in a conspiracy with other managed care companies to

systematically set artificially reduced rates by using the Ingenix database to price

claims, thus under-reimbursing physicians for certain medical services, in violation

of the Sherman Act, ERISA, and various state laws. 3 UCR MDL D.E. 113-1.

Specifically, the Second Consolidated Amended Complaint alleged that:

           • Defendants and the Conspirators entered into secret and intentionally
             concealed agreements to depress reimbursements for [out-of-network
             services or “ONS”]. The conspiracy and illegal conduct result in
             invoicing of inflated and improper charges to and out-of-pocket
             payments made by and for healthcare providers. The conspiracy and

       3
           The allegations at issue in MDL 1334 covered a broader range of conduct than the UCR
MDL. Nevertheless, at least some of the allegations in MDL 1334 closely relate to the UCR
MDL allegations currently at issue. For example, in language very similar to the UCR MDL
allegations, the MDL 1334 plaintiffs alleged that WellPoint and others engaged in an “automated
scheme to deny and reduce payments to doctors” that was “conducted through and implemented
by . . . the development and utilization of automated and integrated claims processing and other
systems such as those generated by . . . Ingenix . . . and the configuration and use of such
systems to similarly deny, diminish and delay payments to physicians . . . .” MDL 1334 D.E.
4661 (Third Amended Consolidated Class Action Complaint) ¶¶ 82-83.
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   illegal conduct also results in underpayment of healthcare providers
   for services rendered … . 

• Plaintiffs’ claims in this case are directed at a secret, illegal agreement
  and deceptive scheme involving Defendants and most of the country’s
  largest health insurers to systematically under-reimburse for ONS.
  During the Relevant Time Period [defined as “1998 to the present,”
  

the Insurer Conspirators agreed to fix the UCRs used to
  reimburse for ONS at artificially low levels. Pursuant to this
  agreement, Defendants and their Conspirators knowingly created a
  flawed system that uses limited amounts of manipulated data to
  artificially depress reimbursement rates for ONS. 

• Unbeknownst to Plaintiffs, healthcare consumers and providers
  nationwide, Defendants and the Conspirators have conspired to ensure
  that the UCR pricing schedules generated by Ingenix are artificially
  low (“False UCRs”). When the Insurer Conspirators then use those
  schedules to calculate ONS reimbursements, the resulting payments to
  subscribers and providers are artificially low and substantially below
  the actual UCR for similar services in the relevant geographic area.
  

• Defendants engaged in price fixing when they agreed with their
  Conspirators to utilize precisely the same flawed database to
  determine the UCR amounts for out-of-network medical services,
  which lead to them paying substantially reduced amounts for services
  rendered to their subscribers. 

• The way in which the Ingenix Database has operated and continues to
  operate, and the manner in which the Insurer Conspirators utilize the
  Ingenix Database, demonstrate that the anticompetitive agreement to
  establish False UCRs persists to the present. 

• WellPoint breached its fiduciary duties by failing to disclose the
  actual and true reimbursement rules used to pay ONS benefits by
  knowingly using inaccurate, flawed and fabricated data from the
  Ingenix Database to calculate UCRs, by knowingly delegating their
  duty to collect accurate information regarding UCRs to Ingenix
  (whom WellPoint knew was collecting inadequate and inaccurate data
  regarding UCRs), and by failing to fulfill its obligations of good faith,
  due care and loyalty. Moreover WellPoint breached its duties by
  manipulating the data it used to pay ONS so as to artificially depress

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             the data Ingenix relied upon in creating UCR schedules for ONS
             reimbursements. 

          • In processing claims of ONS charges, WellPoint is obligated under
            ERISA to calculate accurate UCRs and reimburse subscribers
            accurately ICRs in a manner consistent with the definition of UCR
            used by WellPoint to describe its health plans to its plan subscribers.
            WellPoint does not fulfill this obligation because it fails to pay
            benefits based on accurate UCRs. 

          • The WellPoint-Ingenix Enterprise was formed in 1998, at the time of
            the sale of the PHCS database by HIAA to Ingenix,” and “[a]t all
            relevant times, the Enterprise was engaged in, and its activities
            affected, interstate commerce within the meaning of RICO, 18 U.S.C.
            § 1962(c). 

      C. Motion to Enjoin UCR MDL Plaintiffs
      WellPoint took the position that both the Settlement Agreement reached in

MDL 1334, and the District Court’s January 3, 2006 Order approving that

Settlement Agreement, barred the UCR MDL plaintiffs from pursuing their claims

in the UCR MDL. WellPoint thus filed a Motion to Enforce the Injunction Against

Physician Plaintiffs in the Southern District of Florida, seeking to enforce that

January 3, 2006 Order against the UCR Plaintiffs. MDL 1334 D.E. 6053.

             2. UCR Plaintiffs Ordered to Withdraw Claims
      On August 15, 2010, after consideration of WellPoint’s Motion to Enforce

the Injunction, MDL 1331 D.E. 6053, Magistrate Judge Torres issued a Report and

Recommendation (“R&R”), recommending that the District Court grant

WellPoint’s Motion and order the California MDL plaintiffs, including Appellants,



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to withdraw their claims. 4 MDL 1334 D.E. 6116. Judge Torres found that, “as

indicated by the broad release language of the Settlement Agreement, Plaintiffs

have released all of their claims based on WellPoint’s alleged improper UCR

calculations . . . .” 

Pursuant to this understanding, Judge Torres also

found that “the RICO and antitrust claims clearly fall within the scope of Released

Claims . . . because they all relate to WellPoint’s conspiracy to systematically

under-compensate the non-participating parties,” 

and that “Plaintiffs’

ERISA and contractual claims asserted in the UCR [MDL] all pertain to

WellPoint’s practices regarding the fee-for-service claims and the calculation of

UCRs,” or “the very same practices” that were “expressly addressed in the In re

Managed Care Complaints,” 

Judge Torres also noted that “[i]n no way

does the Release immunize WellPoint from liability against new RICO, antitrust or

contractual violations that arise from a brand new set of events and course of

conduct than the one settled in the MDL Litigation.” 

       4
          In 2009, Judge Torres issued two related R&Rs, concluding that broad releases in
similar In re Managed Care settlement agreements barred subsequent RICO and antitrust claims.
MDL 1334 D.E. 6022 (R&R on Settling Def. CIGNA’s Mots. to Enforce Injunction); MDL 1334
D.E. 6023 (R&R on Settling Def. CIGNA’s Mot. to Enforce Injunction). Judge Moreno adopted
both of those R&Rs. MDL 1334 D.E. 6032-33. Plaintiffs appealed both Orders but this Court
dismissed those appeals due to lack of appellate jurisdiction. Klay (AMA et al.) v. All
Defendants, No. 09-16261 (11th Cir. June 16, 2010) (per curiam); Klay (Higashi) v. All
Defendants, No. 09-16302-E (11th Cir. Apr. 21, 2010).
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      On March 8, 2011, the District Court adopted Judge Torres’ R&R and

ordered the plaintiffs in the UCR MDL to withdraw their claims against WellPoint

within 20 days or else be found in contempt. MDL 1334 D.E. 6190.

      A number of the UCR MDL plaintiffs withdrew their claims, but Appellants

did not.

      D. Motion to Find Appellants in Contempt and Impose Sanctions
      On September 19, 2011, after Appellants and certain other plaintiffs still had

not withdrawn their claims in the UCR MDL, WellPoint moved the District Court

to find Appellants and the other noncompliant plaintiffs in contempt. D.E. 6264.

On October 17, 2011, the UCR MDL plaintiffs filed the Third Consolidated

Amended Complaint. UCR MDL D.E. 274. On January 10, 2012, the District

Court granted WellPoint’s motion, found the noncompliant plaintiffs in contempt,

and scheduled a sanctions hearing. MDL 1334 D.E. 6303. The parties submitted

extensive briefing on the question of sanctions and the propriety of the underlying

finding of contempt. MDL 1334 D.E. 6313, 6316, 6318, 6327, 6328, 6329, 6331,

6334, 6335, 6336. WellPoint sought (1) a coercive sanction against the plaintiffs

and (2) a compensatory sanction for attorney’s fees. The District Court held a

hearing to determine the appropriate sanctions on March 16, 2012. MDL 1334

D.E. 6322, 6324. On July 25, 2012, the District Court entered a final Order of

Contempt and Sanctions, in which it ordered the physician Appellants to pay $100


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and the association Appellants to pay $500 for every month they continued to

violate the order. MDL 1334 D.E. 6340. The court declined to rule on

compensatory sanctions, but noted that it was granting the motion in part and

denying it in part.

       E. Present Appeal and Jurisdiction
       On July 26, 2012, Appellants filed this appeal, seeking review of the July 25,

2012 Order issuing sanctions against Appellants. Appellants challenge the validity

of the District Court’s July 25, 2012 Order, arguing that the District Court, in its

March 8, 2011 Order, erred in finding that Appellants violated the Injunction.

Thus, we must presently consider both Orders. Appellant Br. at 14-15.

       After the filing of the Notice of Appeal, on November 5, 2012, the UCR

MDL plaintiffs filed their Fourth Consolidated Amended Complaint. 5 UCR MDL

D.E. 373. The UCR MDL docket is unclear on which is the operative complaint.

       This Court has jurisdiction pursuant to 28 U.S.C. § 1291, which grants us

“jurisdiction of appeals from all final decisions of the district courts.” The District

Court’s July 25, 2012 Order constitutes a final order because it disposed of all


       5
         On September 5, 2012, the UCR MDL court, the Central District of California, issued
an Order granting in part and denying in part WellPoint and Ingenix’s Motions to Dismiss, and
dismissed the RICO and antitrust claims with prejudice. UCR MDL D.E. 365. Appellants
nevertheless ask this Court to review the Southern District of Florida’s ruling that the Settlement
Agreement released those claims in order to preserve their Ninth Circuit appellate rights as to the
Central District of California’s dismissal. Appellant Br. at 28 n.9. In their Fourth Consolidated
Amended Complaint, Appellants reassert causes of action under federal antitrust and conspiracy
law. UCR MDL D.E. 373.
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issues before it. See MDL 1334 D.E. 6340; Thomas v. Blue Cross & Blue Shield

Ass'n, 

, 819 (11th Cir. 2010) (“In postjudgment proceedings, a

postjudgment order is final for purposes of section 1291 if it ‘finally settles the

matter in litigation’ by disposing of all issues raised in the motion.’” (quoting

Delaney’s, Inc. v. Ill. Union Ins. Co., 

, 1305 (11th Cir. 1990)).

                     III.   THE PARTIES’ CONTENTIONS

      A. Appellants’ Contentions

      Plaintiffs-Appellants argue that the District Court erred by finding them in

violation of the Injunction and requiring them to dismiss their claims in the UCR

MDL, and thus also erred by holding them in contempt and sanctioning them.

Appellants argue that the District Court Orders constituted legal error since the

claims asserted in the UCR MDL do not constitute Released Claims. Appellants

first contend that a Released Claim must not only arise from the facts at issue and

settled in MDL 1334, but must also have arisen prior to the Effective Date of the

Settlement Agreement. 

Appellants tacitly concede that the allegations in

the UCR MDL relate to those of MDL 1334, but they contend that the asserted

claims could not have been brought as part of MDL 1334 and, therefore, did not

arise prior to the Effective Date of the Settlement Agreement. 

      Appellants focus specifically on their ERISA claims, which they argue

accrue only once each of the following steps is complete: (1) a provider treats a


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WellPoint plan member, (2) WellPoint plan members or their provider submits an

application of benefits to WellPoint, (3) WellPoint fails to make appropriate

payment, and (4) the member or provider exhausts available administrative

remedies. 

The UCR MDL Second Consolidated Amended Complaint

alleges some instances where each of these elements took place after the Effective

Date. 

Appellants argue that they could not have asserted those ERISA

claims prior to the Effective Date and, thus, those claims do not constitute

Released Claims. 

contend that the District Court’s interpretation of the

Settlement Agreement would result in an agreement that releases future claims, in

contravention of public policy. 

Appellants argue that Judge Moreno’s

interpretation would bar, in perpetuity, any physician from putting forth any claim

regarding WellPoint’s use of Ingenix to make benefit determinations. 

      B. WellPoint’s Contentions

      WellPoint asks this Court to affirm the District Court’s Orders because the

Settlement Agreement barred the UCR MDL plaintiffs from pursuing their claims,

which arose out of similar allegations made in MDL 1334. Appellee Br. at 4.

Appellees argue that the Magistrate Judge correctly identified the claims at issue in

the UCR MDL as Released Claims under the terms of the Settlement Agreement,




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and that the District Court acted within its discretion by adopting the R&R. 

       WellPoint contends that Appellants do not dispute that their claims in the

UCR MDL “aris[e] out of, or in any way relate[ ] to” the matters at issue in MDL

1334, but rather that they merely argue that their claims did not arise prior to the

Effective Date. 

In response, WellPoint argues that the Magistrate Judge

correctly observed that Appellants’ arguments “are premised on a conspiracy and

course of conduct that allegedly began in 1998, years before the Effective Date.”

D.E. 6132 (Resp. to Objs. to R&R) at 9-10. WellPoint further argues that

Appellants’ attempt to read into the contract a requirement that a cause of action

must have accrued prior to the Effective Date must fail because the argument lacks

any basis in the contractual language. Rather, according to WellPoint the

Settlement Agreement includes very broad release language, including an

expansive definition of “claim” and language expressly releasing “unknown,”

“unsuspected,” and “contingent” claims – in fact, Appellants released all claims

“of whatever kind or character – “whether or not concealed or hidden.” Appellee

Br. at 34 (quoting Settlement Agreement § 13.5).6



       6
          WellPoint argues against the import of cases relied on by Appellants to show when
claims accrue because those cases discuss accrual in the statute of limitations context, not in an
effort to interpret contractual language. The Supreme Court recently made clear the distinction
between the accrual of an ERISA cause of action and the applicable statute of limitations.
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       Despite Appellants’ efforts to distance their ERISA claims from their

conspiracy allegations, WellPoint argues that those claims arise from the same

alleged course of conduct that underlies all other allegations in both MDLs: that

WellPoint improperly used the Ingenix database to price claims for out-of-network

service. 

                                     IV.     ANALYSIS

       A. Standard of Review
The propriety of the District Court’s contempt order turns on whether it properly

interpreted the Settlement Agreement. 7 The law is clear that “[p]rinciples

governing general contract law apply to interpret settlement agreements.” In re

Chira, 

, 1311 (11th Cir. 2009) (interpreting settlement agreement

under Florida law) (quoting Resnick v. Uccello Immobilien GMBH, Inc., 

, 1350 (11th Cir. 2000)). District Courts must construe contracts to give

effect to the parties’ intentions. Accord Solymar Investments, Ltd. v. Banco

Santander S.A., 

, 991 (11th Cir. 2012) (citing Commerce Nat’l Bank

v. Safeco Ins. Co., 

, 252 (Fla. 4th DCA 1971)). This court reviews




Heimeshoff v. Hartford Life & Accident Ins. Co., 

, 610 (2013) (“At the same time,
we have recognize that statutes of limitation do not inexorably commence upon accrual.”).
       7
        The parties agreed that the Settlement Agreement "and all agreements, exhibits, and
documents relating to [the] Agreement shall be construed under the laws of the State of Florida,
excluding its choice of law rules." Settlement Agreement § 25.
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a district court’s interpretation of contract provisions de novo. Ohio Cas. Ins. Co.

v. Holcim (US), Inc., 

, 1356 (11th Cir. 2008).

      This Court reviews a district court’s civil contempt order for abuse of

discretion. Riccard v. Prudential Ins. Co., 

, 1296 (11th Cir. 2002).

“[W]hen employing an abuse-of-discretion standard, we must affirm unless we

find that the district court has made a clear error of judgment, or has applied the

wrong legal standard.” United States v. Frazier, 

, 1259 (11th Cir.

2004; see also Klay v. United Healthgroup, Inc., 

, 1096 (11th Cir.

2004) (“A district court abuses its discretion if it applies an incorrect legal

standard, follows improper procedures in making the determination, or makes

findings of fact that are clearly erroneous.” (quoting Martin v. Automobili

Lamborghini Exclusive, Inc., 

, 1336 (11th Cir. 2002)).

      A district court’s contempt determination must be “supported by clear and

convincing evidence.” 

. If the evidence is such that a

reasonable person could find a clear and convincing violation of the Injunction,

this Court must affirm the contempt ruling of a district court. Howard Johnson Co.

v. Khimani, 

, 1516 (11th Cir. 1990).

      B. The All Writs Act
      Federal courts have long recognized a court’s power to effectuate its orders.

The All Writs Act, 28 U.S.C. § 1651(a), provides that “[t]he Supreme Court and all


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courts established by Act of Congress may issue all writs necessary or appropriate

in aid of their respective jurisdictions and agreeable to the usages and principles of

law.” A federal court thus retains the power “to effectuate and prevent the

frustration of orders it has previously issued in its exercise of jurisdiction otherwise

obtained.” United States v. New York Tel. Co., 

, 172, 

,

372, 

(1977); see also Henson v. Ciba–Geigy Corp., 

,

1068 (11th Cir. 2001) (“[A] district court has the authority . . . to enjoin a party to

litigation before it from prosecuting an action in contravention of a settlement

agreement over which the district court has retained jurisdiction.”); Wesch v.

Folsom, 

, 1470 (11th Cir. 1993) (noting that the All Writs Act, 28

U.S.C. § 1651, “empowers federal courts to issue injunctions to protect or

effectuate their judgments”).

      Federal courts may invoke the authority conferred by the All Writs Act to

enjoin parties from prosecuting separate litigation to protect the integrity of a

judgment entered in a class action and to avoid relitigation of issues resolved by a

class action. See, e.g., United States v. New York Tel. 

(“This

Court has repeatedly recognized the power of a federal court to issue such

commands under the All Writs Act as may be necessary or appropriate to

effectuate and prevent the frustration of orders it has previously issued in its

exercise of jurisdiction otherwise obtained.”); 

(“We have


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ruled, for example, that a district court may issue an injunction under the All Writs

Act to prevent prosecution of a state court action that had already been settled

under the terms of a federal settlement agreement.”); 

(“The

district court here based its injunction on the long recognized power of courts of

equity to effectuate their decrees by injunctions or writs of assistance and thereby

avoid relitigation of questions once settled between the same parties.”); VMS Ltd.

P’ship Sec. Litig. v. Prudential Sec. Inc., 

, 1324 (7th Cir. 1996),

overruled on other grounds by Envision Healthcare, Inc. v. PreferredOne Ins. Co.,

(7th Cir. 2010) (“Other circuits have similarly approved a district

court’s use of the All Writs Act to prevent litigants from frustrating or

circumventing its orders.”); White v. Nat’l Football League, 

, 409 (8th

Cir. 1994) (“While the All Writs Act is not an independent grant of jurisdiction,

the ability to facilitate the present settlement by enjoining related suits of absent

class members in ancillary to jurisdiction over the class action itself.”); In re Y &

A Grp. Sec. Litig., 

, 382-83 (8th Cir. 1994) (“The All Writs Act makes

plain that each federal court is the sole arbiter of how to protect its own judgments

. . . It is this concept that underlies the related rule that the court which issues an

injunction is the only one with authority to enforce it.”); see also 

(“[A] district court has the authority under the Act to enjoin a party to




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litigation from prosecuting an action in contravention of a settlement agreement

over which the district court has retained jurisdiction.”).

       C. Civil Contempt Jurisprudence
       We review “a district court’s interpretation of its own orders only for an

abuse of discretion,” a standard that “carries over to the interpretation of

injunctions.” Alley v. U.S. Dep’t of Health and Human Servs., 

,

1201 (11th Cir. 2009).

       “Great deference is due the interpretation placed on the terms of an

injunctive order by the court who issued and must enforce it.” Ala. Nursing Home

Ass’n v. Harris, 

, 388 (5th Cir. 1980);8 Alley v. U.S. Dep’t of Health

and Human Servs., 

, 1202 (11th Cir. 2009) (“The district court is in

the best position to interpret its own orders.” (internal quotation marks omitted));

Cave v. Singletary, 

, 1354 (11th Cir. 1996) (“The district court's

interpretation of its own order is properly accorded deference on appeal when its

interpretation is reasonable.”).

       Notwithstanding the deference afforded to the District Court’s interpretation

of its own orders, the law is clear that “[i]nvalidity of the underlying order is . . . a

defense to a civil contempt citation.” In re Novak, 

, 1401 n.6 (11th


       8
          In Bonner v. City of Prichard, 

(11th Cir. 1981) (en banc), we adopted as
binding precedent all decisions of the former Fifth Circuit handed down before October 1, 1981.

                                               22
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Cir. 1991); see also United States v. United Mine Workers of Am., 

,

295, 

, 696, 

(1947) (“The right to remedial relief falls

with an injunction which events prove was erroneously issued.”). Thus, the

application of an incorrect legal standard taints the District Court’s findings in

support of a contempt order. See Holton v. City of Thomasville Sch. Dist., 

, 1355 (11th Cir. 2005).

       D. Interpretation of the Settlement Agreement
       For many reasons, the district court’s interpretation of its own injunction and

decision to hold parties in contempt for violating that injunction should be upheld

unless a district court a makes a clear error of law in contract interpretation.

       The District Court is best equipped to assess the parties’ intentions in

entering a settlement agreement and, therefore, to construe its terms, particularly in

a complicated litigation such as MDL 1334. See Weyher/Livsey Constructors, Inc.

v. Int'l Chem. Co., 

, 131 n.1 (11th Cir. 1989) (noting that “matter[s] of

interpretation” are “best left to the district court”).

       MDL 1334 is a highly complex multidistrict litigation, first assigned to the

Southern District of Florida in April 2000. The allegations involve a wide-ranging

conspiracy by many participants, affecting a large number of plaintiffs. The

parties took more than five years to reach the Settlement Agreement and moved for

its preliminary approval on July 11, 2005. MDL 1334 D.E. 4321. The District


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Court issued its Amended Order approving that Settlement Agreement on January

3, 2006, MDL 1334 D.E. 4684, after months of hearings and briefing. Judge

Moreno issued his Order imposing sanctions on Appellants in July 2012, over

twelve years after the case first came before the Southern District of Florida. That

Order appears on the docket as entry number 6,340.

      In Thomas v. Blue Cross & Blue Shield Ass'n, 

, 817 (11th Cir.

2010), this Court considered release language similar to that of the present

Settlement Agreement. There, we set forth the framework for determining whether

the release language in a settlement agreement bars claims:

      Under the settlement agreement entered in the class action, the
      relevant inquiry for determining whether a claim is released is not
      whether the acts giving rise to the complaint occurred after the class
      action was filed or the settlement agreement was entered, but whether
      they occurred after the effective date of the settlement agreement.

Thus, if “the acts giving rise to the complaint occurred . . . after the

effective date of the settlement agreement,” the agreement would not release them;

whereas, if they arose prior to the effective date of the agreement, they would be

barred.

      In his R&R, the Magistrate Judge applied this framework and concluded that

“all of the Physician Plaintiffs’ claims arose ‘from acts that occurred before the

effective date’ of the WellPoint Settlement” and were therefore barred by the




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“broad and sweeping” release language. MDL 1334 D.E. 6116 (R&R) at 16, 20-

21.

       Appellants do not contend that the Magistrate Judge applied an incorrect

legal standard. Nor do they cite any legal authority to suggest that the Magistrate

Judge adopted the incorrect legal framework when interpreting the Settlement

Agreement. In fact, the cases that they cite in their opening brief endorse the same

relevant inquiry set forth by the Magistrate Judge – that is, that the “relevant

inquiry for determining whether a claim is released is . . . whether the acts giving

rise to the [new] complaint . . . occurred after the effective date of the settlement

agreement.” Appellant Br. at 30 (quoting Thomas v. Blue Cross & Blue Shield

(alterations in original). 9

       Appellants have failed to show that the District Court abused its discretion in

barring the Appellants from pursuing their RICO and antitrust claims in the UCR

MDL and holding them in contempt when they refused to withdraw those claims.

Appellants, however, have demonstrated that the District Court erred in enjoining


       9
          Appellants also rely on Klay v. All Defs., 309 F. App’x 294 (11th Cir. 2009) and
Madison Square Garden, L.P. v. National Hockey League, No. 07 CV 8455(LAP), 

(S.D.N.Y. Oct. 10, 2008). These cases, along with Thomas, agree upon the appropriate
analysis when determining whether a release provision in a settlement agreement releases claims
in a subsequent action. The District Court must determine whether the legal basis of the claim
relies on events that predated the effective date of the agreement. See Klay, 309 F. App’x at 295
(noting magistrate judge’s conclusion that plaintiffs were “forced to concede that their claims
predate[d] the Effective Date of the settlement”); Madison Square Garden, L.P., 

, at *6 (finding antitrust claim barred by release because it existed “at the time of the
release” and “contain[ed] no allegations of post-2005 conduct”).
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the ERISA claims to the extent that they stem from the denial or underpayment of

benefits post-dating the Effective Date, and therefore the Injunction should be

vacated to the extent that it bars these claims.

       A. RICO and Antitrust Allegations
       With respect to the RICO and antitrust claims, Appellants’ argument falls far

short. In reasoning adopted by the District Court, the Magistrate Judge observed

that the Appellants “d[id] not dispute that they were aware well before entering

into the Settlement Agreement about WellPoint’s utilization of the Ingenix

Database in order to allegedly engage in their industry-wide conspiracy to

underpay providers.” R&R at 11. The Magistrate Judge continued: “[T]aken as a

whole, the allegations listed in the Complaint clearly relate to the alleged

conspiracy of WellPoint and other managed care institutions to underpay providers

for their services.” 

10 Magistrate Judge Torres noted, and the District

Court agreed, that Plaintiffs had the option of seeking to enforce the Settlement

Agreement if WellPoint had not complied with it, but stated that Appellants could

not “get another bite at a very devoured apple if they are not happy with

consideration they received in exchange for their broad release.” 

       10
          In comparison, consider our opinion in Doctors Health, Inc. v. Aetna, 

(11th Cir. 2010). There, Appellants appealed the district court’s determination that their breach
of contract claim had been released in a settlement agreement from an earlier class action. We
vacated that determination, holding that the release did not bar Appellants’ breach of contract
claim where that claim “share[d] no factual basis” with the complaint in the earlier class action.

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      In adopting the R&R, the District Court properly determined that the

Settlement Agreement released the Appellants’ RICO and antitrust claims in the

UCR MDL. First, the record fully supports the District Court’s finding that

Appellants’ RICO and antitrust claims arose out of the claims at issue in MDL

1334. The RICO and antitrust claims in the UCR MDL echo the earlier allegations

in MDL 1334 – that WellPoint engaged in a scheme to underpay healthcare

providers for claims through the use of the Ingenix database. The Second

Consolidated Amended Complaint makes clear that the conspiracy enterprise “was

formed in 1998” and that the antitrust conduct also began “at least as early as

January 1, 1998.” UCR MDL D.E. 113-1 (Second Consol. Am. Compl.) ¶¶ 288,

369. Second, the factual record clearly demonstrates that these claims could have

been asserted at the time of the Effective Date, since all facts necessary to state a

cause of action had occurred long before the Settlement Agreement took effect.

The fact that Appellants seek to base the new claims on certain conduct post-dating

the Effective Date does not change this conclusion. Because they merely

constitute a continuation of the conspiracy alleged in MDL 1334, WellPoint's

purported bad acts are best seen as new, overt acts within an ongoing conspiracy,

rather than new claims in and of themselves.

      Moreover, Appellants' decision to release claims stemming from the

conspiracy alleged in MDL 1334 in no way interfered with their ability to obtain


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relief from ongoing violations of the Settlement Agreement. Through its Approval

Order, the district court retained jurisdiction over “all matters relating to (a) the

interpretation, administration, and consummation of the Settlement Agreement and

(b) the enforcement of the injunctions described[.]” Approval Order ¶ 27.

Although Appellants were barred from asserting new claims premised on

violations of the Settlement Agreement, they could have sought relief from such

violations through the procedure to which they consented: namely, through a

motion in the district court to enforce the Settlement Agreement and Approval

Order.

       These claims thus arose “on or before the effective date,” “could have been

asserted” against WellPoint, and “ar[o]s[e] out of, or [were] in any way related to

any of the . . . facts, acts, events, transactions, occurrences, courses of conduct,

representations, omissions, circumstances, or other matters referenced” in MDL

1334. 11 Settlement Agreement § 13.1(a). The RICO and antitrust claims therefore

constitute Released Claims under § 13.1 of the Agreement. Because the

Settlement Agreement released these claims, the District Court did not abuse its

discretion by ordering Appellants to withdraw them and holding Appellants in

contempt when they refused to comply with that order.


       11
           Appellants argue that plaintiffs can assert continuing violations of RICO, however, the
claims clearly arose before the Effective Date and could have been asserted against WellPoint at
that time.
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      B. ERISA Allegations
      The district court did, however, incorrectly interpret the Settlement

Agreement and thereby abused its discretion with respect to certain of the ERISA

claims. ERISA claims “could [not] have been asserted” on or before the Effective

Date to the extent that they were based on denials or underpayments following the

Effective Date.

      WellPoint contends that the ERISA claims “arise from the exact same

alleged course of conduct that underlies the entire UCR MDL Complaint” in that

the claims are based entirely on an alleged scheme that WellPoint improperly used

the Ingenix database to price claims for out-of-network services. Appellee Br. at

45.

The Magistrate Judge agreed with WellPoint. The R&R states:

      Plaintiffs enjoy the broad and sweeping nature of the Settlement
      Agreement’s release. Plaintiffs’ ERISA and contractual claims
      asserted in the UCR [MDL] all pertain to WellPoint’s practices
      regarding the fee-for-service claims and the calculation of the UCRs.
      The very same practice and WellPoint’s alleged improper use of the
      Ingenix database were expressly addressed in the [MDL 1334]
      Complaints.

MDL D.E. (R&R) 6116 at 16. There is no dispute that a claim could have arisen

before the Effective Date if facts forming the basis of the claim existed prior to the

Effective Date. We assume, without deciding, that the District Court correctly

concluded that the ERISA claims arise out of the “facts, acts, events, transactions,


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occurrences, courses of conduct, representations, omissions, circumstances or other

matters” at issue in MDL 1334.

       However, the District Court’s conclusion – that “all of Physician Plaintiffs’

claims arose ‘from acts that occurred before the effective date’ of the WellPoint

Settlement and are, similarly, barred” – does not follow. 

That

conclusion does not complete the analysis because Appellants contend, in part, that

even if the necessary factual basis upon which Appellants could assert their ERISA

claims did exist at the time of the Effective Date, the claims nevertheless could not

have been asserted at that time. Put another way, if the ability to “assert” an

ERISA cause of action for denial of these benefits only occurred after the Effective

Date of the Settlement Agreement, then § 13.1(a) would not bar such a claim.

       Our resolution of this issue hinges in large part on at what point an ERISA

claim can be asserted. 12 A similar issue arose in Paris v. Profit Sharing Plan for

Emp. of Howard B. Wolf, 

, 361 (5th Cir. Feb. 17, 1981). In Paris, we

considered whether we had jurisdiction – there, whether the claim arose under

federal jurisdiction – to review a district court’s determination that appellants were

not entitled to certain benefits under ERISA. The jurisdictional question turned on



       12
           Dictionaries offer a broad definition of the word “assert” and provide no guidance as to
whether “assert” in the Settlement Agreement requires the filing of a lawsuit. See, e.g., Black’s
Law Dictionary 124 (8th ed. 2004) (“1. To state positively. 2. To invoke or enforce a legal
right.”); Oxford English Dictionary Online, http://english.oxforddictionaries.com (last visited
Mar. 18, 2014) (defining assert as to “state a fact or belief confidently and forcefully”).
                                                30
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whether the claim arose before the date on which ERISA took effect: January 1,

1975. 

If the claim arose on the date of the claimant’s termination, it

would predate the Effective Date of ERISA. If it arose upon the denial of benefits,

it would post-date the Effective Date, and thus arise under federal law. We held

that we did have jurisdiction, observing that “for purposes of ERISA a cause of

action does not accrue until an application [for benefits] is denied.” 

This holding was followed by this Court in Gulf Life Ins. Co. v. Arnold, 

, 1525 (11th Cir. 1987). Accordingly, an ERISA lawsuit cannot be filed in

federal court until a claim is denied.

      In keeping with this conclusion, Appellants' ERISA claims based on the

denial or underpayment of benefits following the Effective Date cannot meet the

"could have been asserted" prong of § 13.1 of the Settlement Agreement because,

absent a denial or underpayment on or before the Effective Date, such claims

would not have accrued. Appellants set forth a number of allegations that meet

these criteria. For instance, the Second Consolidated Amended Complaint alleges

that, following the Effective Date, Dr. Schwendig provided emergency medical

services to patients participating in a plan that WellPoint administered. UCR MDL

D.E. 113-1 (Second Consol. Am. Compl.) ¶¶ 224. Dr. Schwendig was allegedly

underpaid, appealed the purported underpayments, and was unable to recoup the

amount owed to him. 

228. Likewise, in November and December of 2007,


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Dr. Kavali purportedly provided medical services, was underpaid for those

services, and was given no apparent mechanism for appealing the underpayment.

¶ 254-56, 259. Because ERISA claims stemming from the denial or

underpayment of benefits following the Effective Date “could [not] have been

asserted” on the Effective Date, the District Court erred in enjoining the Appellants

from pursuing such claims.

      WellPoint argues that another section of the Settlement Agreement, titled

Covenant Not to Sue, supports its interpretation and the District Court’s Contempt

Order. We disagree. Section 13.2(a) states that the releasing parties will not

participate in litigation “based upon or related to any Released Claim.” In effect,

WellPoint argues that any underpayment must be related to this settlement simply

by virtue of being an underpayment. But the inclusion of an Effective Date into

the Settlement Agreement clearly contrasts the idea of barring all claims against

WellPoint in perpetuity. The Covenant Not to Sue section does not apply to claims

that could not have been asserted prior to the Effective Date and, therefore, does

not bar such claims.

      We note briefly that, even though § 13.5 broadens the scope of the release, it

does not go so far as to release claims where the full factual basis required to

legally state a cause of action, such that the cause of action “could have been

asserted,” did not exist as of the Effective Date. In § 13.5, Appellants agreed to


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“fully, finally and forever” release “any known or unknown, suspected or

unsuspected, contingent or non contingent claim with respect to the subject matter

of the provisions of § 13, whether or not concealed or hidden, without regard to the

discovery or existence of such different or additional facts.” Settlement

Agreement § 13.5. This section broadly releases any claim that could have been

brought, at the time of the Effective Date, based on the existence of facts – whether

they be known or unknown – as of the Effective Date. The language of this section

does not, however, go so far as to release claims based on facts occurring after the

Effective Date.13

       Furthermore, the Settlement Agreement does release post-Effective Date

claims in certain narrow instances. In §13.1(b), which addresses claims against

BCBSA, the release language makes clear that the parties agreed to “forever

abandon and discharge any and all Claims that exist now or that might arise in the

future” where such claims “are based on conduct by any of the Released Parties

that occurred on or before the Effective Date and are, or could have been asserted

by any Releasing Party . . . .” Settlement Agreement § 13.1(b). If the parties had


       13
          Undoubtedly, certain facts existed that could have given rise to some ERISA claims,
even if not the ones presently at issue, and Appellants had knowledge of those facts. For
example, the Second Consolidated Amended Complaint alleges that WellPoint underpaid for
benefits for many years prior to the Effective Date of the Settlement Agreement. Denial of
proper payment for those benefits may have constituted an ERISA claim that could have been
asserted prior to the Effective Date. Appellants should have explicitly excluded such ERISA
claims in the release, but did not do so. This, however, has no bearing on ERISA claims based
on underpayment for procedures performed after the Effective Date.
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intended the scope of § 13.1(a) to mirror that of 13.1(b), which expressly releases

claims that could arise after the Effective Date – although based on conduct that

existed prior to the effective date – the parties would have used such language in §

13.1(a). Accordingly, at least some of Appellants’ ERISA claims “could [not]

have been asserted” on the Effective Date. The Settlement Agreement does not

release them, and the Injunction must be vacated as to such claims.

      We note that Judge Martin dissents from our opinion, in part, based on her

conclusion that the Settlement Agreement does not bar the RICO and antitrust

claims. We agree with Judge Martin that the Settlement Agreement “did not

protect WellPoint for any misconduct for all time.” The crux of our disagreement,

however, is that Judge Martin believes that the allegations in the UCR MDL

indicate “new, wrongful conduct” whereas we view the conduct as being a

continuation of the same conduct raised in MDL 1334.

      The cases cited by Judge Martin do not persuade us otherwise. For example,

Judge Martin distinguishes Madison Square Garden, L.P. v. National Hockey

League, 

. There, the court observed that the plaintiff’s

allegations were not based on conduct that post-dated the release, but were instead

based on a continuation of pre-existing policies. 

The court thus had

“little trouble” concluding that the antitrust claims existed at the time of the release

and that the parties intended the release to bar those claims. 

the UCR

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MDL allegations similarly, and conclude that the claims based on those allegations

“could have been asserted,” and were in fact asserted, prior to the Effective Date.

        We once again note that Appellants were not without recourse if WellPoint

acted in violation of the Settlement Agreement after the Effective Date. Rather,

they could have filed a motion in the district court to enforce the Settlement

Agreement and the corresponding Approval Order. Their failure to do so does not

warrant a departure from the parties’ intentions to bar claims that arose out of the

conduct at issue in MDL 1334 and that could have been asserted as of the Effective

Date.

        In sum, because Appellants’ ERISA claims that are premised on the denial

or underpayment of benefits subsequent to the Effective Date do not fall within the

“could have been asserted” prong of the Settlement Agreement, the Settlement

Agreement does not release such claims. Thus, we vacate the District Court’s

judgment barring Appellants’ ERISA claims to the extent that they arise out of

post-Effective Date underpayments or denials of benefits.

                                 V.    SANCTIONS
        A district court has “broad discretion in fashioning civil contempt

sanctions,” Howard Johnson Co. v. Khimani, 

, 1519 (11th Cir.

1990), and this court “review[s] the district court’s assessment of contempt

sanctions for an abuse of discretion,” McGregor v. Chierico, 

, 1388

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(11th Cir. 2000). Appellants do not challenge the method by which the District

Court assessed sanctions, but rather limit their challenge to the validity of the

underlying Order barring Appellants from proceeding with their claims. On

remand, the District Court will be tasked with determining which of Appellants’

ERISA claims are based on the denial or underpayment of benefits following the

Settlement Agreement’s Effective Date. The District Court will also need to

reconsider its assessment of sanctions in light of this opinion. Thus, we will vacate

the sanctions and remand to the District Court.

                               VI.    CONCLUSION
      For the foregoing reasons, the judgment of the District Court is affirmed in

part, vacated in part, and remanded. We affirm the Injunction as to Appellants’

RICO and antitrust claims and as to ERISA claims based on the denial or

underpayment of benefits on or before the Settlement Agreement’s Effective Date,

but vacate the Injunction as to ERISA claims based on the denial or underpayment

of benefits following the Settlement Agreement’s Effective Date. On remand, the

District Court will need to determine which of Appellants’ ERISA claims fall on

the permissible side of the line, and reconsider the assessment of sanctions.

AFFIRMED IN PART; VACATED IN PART; REMANDED.




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               Case: 12-14013        Date Filed: 06/18/2014        Page: 37 of 51


MARTIN, Circuit Judge, concurring in part and dissenting in part:

       I agree with my colleagues that, based on WellPoint’s actions after the

Effective Date of the Settlement Agreement in the earlier class action regarding

WellPoint’s reimbursement of claims, the District Court abused its discretion in

concluding that certain ERISA claims in the later-filed cases were Released

Claims. 1 But based on the language of that Settlement Agreement, I would reach

this same result for the RICO and antitrust claims the Physicians seek to bring here

as well. Like the ERISA claims, the RICO and antitrust claims also depend on

WellPoint’s actions taken after the Effective Date. Therefore, the ruling I seek—

that the ERISA, RICO, and antitrust claims based on WellPoint’s actions taken

after the Effective Date of the Settlement Agreement were not released by that

Agreement—would treat all of these claims the same. In contrast, the Majority’s

Opinion reaches different results for various claims made based on identical post-

Effective Date actions taken by WellPoint and vacates the injunction only as to

certain ERISA claims. I would lift the Injunction as to the RICO and antitrust

claims as well, so I dissent from the Majority Opinion in that respect.

                                     I. BACKGROUND

       1
          I will use the terms the Majority did, including UCR MDL (referring to the lawsuit filed
in 2009 challenging the post-Settlement Agreement’s usual, customary, and reasonable rates of
reimbursement, which is the subject of this appeal), MDL 1334 (referring to the case number of
the earlier litigation originally filed in 2000, assigned as a Multi-District Litigation case to the
District Court in the Southern District of Florida, and settled in 2005), and BCBSA (Blue Cross
Blue Shield of America). Also, when I use the term Physicians, I refer collectively to the doctors
and their professional associations that are the Appellants in this case.
                                                37
             Case: 12-14013    Date Filed: 06/18/2014    Page: 38 of 51


      In 2005, WellPoint agreed to change a number of its business practices in

order to settle MDL 1334. Among the changes WellPoint agreed to was to change

the way it had determined usual, customary, and reasonable rates. Specifically, the

Settlement Agreement stated that WellPoint “agrees that, to the extent it uses

Physician charge data to determine the usual, reasonable and customary amount to

be paid for services performed by Non-Participating Physicians, it will not use any

internal claims database that” systematically underprices the claims.

      For their part, the Physicians agreed that as of the Effective Date of the

agreement they were giving up certain claims. The Settlement Agreement defined

the Released Claims as:

             any and all causes of action, judgments, liens,
             indebtedness, costs, damages, obligations, attorneys’
             fees, losses, claims, liabilities and demands of whatever
             kind or character (each a “Claim”), arising on or before
             the Effective Date, that are, were or could have been
             asserted against any of the Released Parties by reason of,
             arising out of, or in any way related to any of the facts,
             acts, events, transactions, occurrences, courses of
             conduct, representations, omissions, circumstances or
             other matters referenced in the Actions, whether any such
             Claim was or could have been asserted by any Releasing
             Party on its own behalf or on behalf of other Persons, or
             to the business practices that are the subject of § 7.
Settlement Agreement § 13.1(a). As the Majority recognizes, “the inclusion of an

Effective Date into the Settlement Agreement clearly contrasts the idea of barring

all claims against WellPoint in perpetuity.” Maj. Op. at 31.


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      After preliminary approval of the settlement by the District Court, a notice

of the settlement was mailed to potential class members. The notice began: “IF

YOU ARE A PHYSICIAN WHO PROVIDED COVERED SERVICES TO ANY

INDIVIDUAL ENROLLED IN OR COVERED BY CERTAIN HEALTH CARE

PLANS AT ANY TIME BETWEEN AUGUST 4, 1990 AND JULY 15, 2005 . . .

PLEASE READ THIS NOTICE CAREFULLY.” The part of the notice that told

the class members about the claims which would be released against WellPoint

described them as those “arising on or before the date that the Court’s order

approving the settlement becomes final, that are, were or could have been

asserted.” The next sentence added that “claims that exist now or that might arise

in the future” are waived against BCBSA. The notice highlighted that at an

upcoming hearing, the District Court “will consider whether to enter orders that

would prevent members of the Class and certain other persons, including the

Defendants in the Actions other than WellPoint, from asserting certain claims

against WellPoint in the future.”

      The District Court approved the Settlement Agreement for MDL 1344 in an

Amended Order filed in January 2006. That Order permanently enjoined the

Physicians who had not opted out of the Settlement Agreement from participating

in lawsuits “arising out of or relating in any way to the Released Claims.”

Generally tracking the language in the class notice, the amended order approving


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the settlement noted that claims “that exist now or that might arise in the future

against BCBSA” were released, while against WellPoint claims were released “that

are, were or could have been asserted against any of the Released Parties by reason

of, arising out of, or in any way related to” the facts at issue. The District Court

retained jurisdiction on “all matters relating to (a) the interpretation,

administration, and consummation of the Settlement Agreement and (b) the

enforcement of the injunctions described.”

      Then in 2009 came the UCR MDL lawsuit alleging antitrust, RICO, ERISA,

and state law violations by WellPoint and others in connection with a conspiracy of

failing to pay the UCR rates for out-of-network services. The Second

Consolidated Amended Complaint in the UCR MDL alleged that “Ingenix serves

as a conduit for the conspiracy and is a hidden profit engine of the health insurance

business.” That Complaint includes allegations, for example, that after the

Effective Date of the Settlement Agreement for the MDL 1344 case, WellPoint

provided false and misleading certifications to Ingenix, and that Ingenix, knowing

that certain answers from WellPoint were false, “continued to accept the data and

overlook the falsehoods, nevertheless.” Fundamentally, the question presented by

this appeal is whether the claims raised by these plaintiffs in the UCR MDL are

barred because they are Released Claims under the MDL 1334 Settlement

Agreement.


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                                     II. DISCUSSION
       There are two related ways to analyze whether the claims advanced in this

lawsuit were released in the earlier one. The first is to examine the language used

in the Settlement Agreement and class notice. The second is to apply this Court’s

precedent to the facts of this case. Both analyses lead to the conclusion that the

UCR MDL claims were not released.

    A. TEXT OF THE SETTLEMENT AGREEMENT AND CLASS NOTICE

       I begin with the language of the Settlement Agreement, particularly the

definition of Released Claims. It is not in dispute that if parties to a settlement

clearly and unambiguously agree to do so, “[f]uture damages may be released if

such is the intent of the parties.” W.J. Perryman & Co. v. Penn Mut. Fire Ins. Co.,

, 793 (5th Cir. 1963). 2 However, the language of a settlement

agreement determines whether that is so. “Litigation or settlement will not

automatically bar a later suit for a second, identical breach.” Klein v. John

Hancock Mut. Life Ins. Co., 

, 360 (11th Cir. 1982). There are two

ways in which the definition of Released Claims here indicates the intent to limit

the release and not include future damages. They are the definition’s time limit of




       2
          In Bonner v. City of Prichard, 

(11th Cir. 1981) (en banc), we adopted as
binding precedent all decisions of the former Fifth Circuit handed down before October 1, 1981.

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“arising on or before the Effective Date,” and the statement that the claims released

“are, were or could have been asserted.”

       Because the term “arising” is not defined in the Settlement Agreement, it is

necessary to look to the common understanding of the term. For a long time,

courts have understood that an action does not arise until a plaintiff has a legal

right to sue on it. See, e.g., St. Louis & S.F.R. Co. v. Spiller, 

, 313,

, 638 (1927) (finding “that the term ‘arise’ was used in the decree as

the equivalent of ‘accrue’”); Fed. Reserve Bank v. Atlanta Trust Co., 

,

287 (5th Cir. 1937) (“This cause of action did not, it could not, arise until plaintiff

had paid the moneys out, and was in a position to demand reimbursement.”); see

also Levy v. Ohl, 

, 992 (8th Cir. 2007) (stating that “plaintiff’s right

to sue arises . . . when the plaintiff could first maintain his cause of action

successfully” (quotation omitted)).

      Based on this understanding of the word arising, and because the Settlement

Agreement defined Released Claims as those “arising on or before the Effective

Date,” the Physicians released only those claims they could have sued for as of the

Effective Date. In contrast, the only claims asserted in the UCR MDL were those

that required additional acts to take place after the Effective Date. Critically, the

Physicians allege that WellPoint committed new acts after the Effective Date,

which caused them to be underpaid for certain services.


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      The import of the definition of Released Claims in the Settlement

Agreement is buttressed by its use of the phrase “are, were or could have been

asserted.” “Are” asserted claims were those asserted at the time of the Settlement

Agreement—clearly the claims in the UCR MDL are not among those. “Were”

asserted claims would be those that had already been asserted. Again, the UCR

MDL claims had not. The question remaining, then, is whether the UCR MDL

claims “could have been” brought at the time the parties entered into the

Settlement Agreement. Following this analysis, the Majority acknowledges and

recognizes that certain claims in the UCR MDL could not have been brought but

for the new actions WellPoint took after the Effective Date. Maj. Op. 30–31. I

agree. However, the Majority does not extend the logic behind its recognition that

the ERISA claims could not have been brought prior to the Effective Date of the

Settlement of the MDL 1344 case to the remainder of claims brought by the

Physicians in the UCR MDL. To the contrary, the Majority finds that the

remaining claims were released by the Settlement Agreement.

      WellPoint argues that the Physicians “do not suggest . . . WellPoint began

doing something different or new that it had not been doing before.” But this

argument ignores that WellPoint agreed to quit doing what it had done before. The

Physicians entered into the Settlement Agreement, which called for payments by

WellPoint and WellPoint’s agreement to change the way it made reimbursements


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so as to avoid future problems. Nothing in the Settlement Agreement suggests that

the Physicians gave up their right to take action in the future if WellPoint engaged

in new, wrongful conduct that resulted in underpayment for services not yet

rendered. So while the Physicians never dispute that WellPoint had underpaid

them in the past, they do allege new acts resulting in fresh underpayments. Cf.

Manning v. City of Auburn, 

, 1360 (11th Cir. 1992) (“[W]e do not

believe that the res judicata preclusion of claims that ‘could have been brought’ in

earlier litigation includes claims which arise after the original pleading is filed in

the earlier litigation.”).

       This plain reading of the Settlement Agreement is in keeping with the notice

to potential class members. Certainly it is the language of the Settlement

Agreement that controls, but the notice underscores that the UCR MDL claims

were not released in the MDL 1334. First, the notice, in all capital letters, tells

physicians who provided services “between August 4, 1990 and July 15, 2005” to

read the notice carefully. As a result, physicians providing services after July 15,

2005 are not given any notice that they are impacted by the settlement. It is only

those doctors who provided services between the delineated dates that were clearly

informed of the release. Physicians who had not yet provided the relevant services,

but might do so in the future, would understandably believe this notice had no

relevance to them.


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      Second, the notice states that class members are giving up “all claims that

exist now or that might arise in the future” against BCBSA. But the language the

parties chose to describe the claims that were released against WellPoint is

strikingly different. For WellPoint, the notice says that class members are giving

up claims arising on or before the Effective Date. It is true that the details of the

settlement, including the treatment of possible future claims, was to be the subject

of a hearing before the District Court. Again however, the notice gave no

indication that the Settlement Agreement was intended to release future claims

against WellPoint by class members for services not yet rendered.

      WellPoint argues that if the Settlement Agreement is interpreted to allow for

future claims, “companies would not be able to settle class action lawsuits because

they could never be assured of ‘buying peace’ no matter how much they paid.”

Quite to the contrary, the Settlement Agreement did buy peace for WellPoint for

all of its conduct prior to the Effective Date. It just did not protect WellPoint for

any misconduct for all time. WellPoint remains “on the hook” for any new bad

acts it commits after the Effective Date. And it is only new actions, taking place

after the Settlement Agreement, which are at issue in the UCR MDL. See Lawlor

v. Nat’l Screen Serv. Corp., 

, 329, 

, 869 (1955)

(“Acceptance of the respondents’ novel contention would in effect confer on them

a partial immunity from civil liability for future violations.”).


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      WellPoint argues that another section of the Settlement Agreement, titled

“Covenant Not to Sue,” supports their interpretation. Section 13.2(a) states that the

releasing parties will not participate in litigation “based upon or related to any

Released Claim.” While the use of “related to” in § 13.2(a) suggests a broader

covenant not to sue than what is in the definition of Released Claims, when read

alongside the other Settlement Agreement provisions it is clear the parties intended

a cutoff point. WellPoint argues, in effect, that any underpayment must be related

to this settlement, simply by virtue of being an underpayment. But the setting of

an Effective Date within the Settlement Agreement conflicts with the idea of

barring all claims against WellPoint in perpetuity. New actions taken by WellPoint

after the Effective Date of the Settlement Agreement, and resulting in

underpayments, are not covered by the Covenant Not To Sue. Those claims—

ERISA or otherwise—are therefore not released.

      Counsel for WellPoint seemed to acknowledge this point at oral argument.

He said that if WellPoint began doing something new after the Effective Date, it

would be actionable under the Settlement Agreement:

               So let’s say we stopped using Ingenix in 2008 and we
               began using a brand new database that we hadn’t used
               before. Then I think the Plaintiffs could come along and
               say, “Well, look, we’re complaining about something
               new that you weren’t doing before.” 3


      3
          Oral Argument at 27:52–28:11, Oct. 9, 2013.
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But this is a distinction without a meaningful difference. The Settlement

Agreement does not mention Ingenix. The gravamen of the Physicians’ concern

was with being underpaid—by whatever mechanism. The Settlement Agreement

was intended to compensate the Physicians for underpayments in the past and

change WellPoint’s business practices to avoid underpayments in the future. And

the Majority acknowledges that WellPoint engaged in “new, overt acts.” Maj. Op.

at 26. However, the Majority characterizes those acts as being a part of “an

ongoing conspiracy.” The plain language of the Settlement Agreement provides

that claims predicated upon future acts taken by WellPoint to underpay physicians

are not released.

                    B. APPLICATION OF CASE LAW TO FACTS

      A familiar canon of construction helps clarify that the claims here were not

released. The word “future” does not appear in the definition of Released Claims

in § 13.1(a) of the Settlement Agreement. And the parties were certainly aware of

their ability to negotiate away future claims. That is evidenced by the fact that the

parties referred to future claims in § 13.1(b), where the Settlement Agreement

discusses claims against BCBSA. To my mind, this distinction demonstrates the

parties’ choice not to address future claims as to WellPoint. See In re Celotex

Corp., 

, 1334 (11th Cir. 2007) (“[W]hen certain matters are

mentioned in a contract, other similar matters not mentioned were intended to be


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excluded.” (quotation omitted)); see also Maj. Op. at 32–33 (“If the parties had

intended the scope of § 13.1(a) to mirror that of 13.1(b), which expressly releases

claims that could arise after the Effective Date—although based on conduct that

existed prior to the effective date—the parties would have used such language in §

13.1(a).”)

      WellPoint argues that “federal class action settlements routinely include

releases waiving future claims.” This is certainly true. However, the cases

WellPoint points to in support of this proposition are readily distinguishable, at

least because the Settlement Agreement it relies upon does not refer to future

claims against WellPoint. For example, WellPoint cites to McClendon v. Georgia

Department of Community Health, 

(11th Cir. 2001). The

McClendon litigation arose out of a tobacco settlement agreement negotiated by 46

states and a number of tobacco companies. The McClendon plaintiffs were

Medicaid recipients who wanted proceeds of the settlement beyond what Georgia

paid on medical assistance, but they had not participated in the negotiations of that

settlement agreement. The defendants moved to dismiss. In addition to being

factually inapposite and arising in a very different procedural posture, then, the

language of the release in McClendon refers explicitly to “future conduct” and

“future Claims.” 

Considering that language, this Court observed that

“[a]s the quoted provisions indicate, by entering into the settlement agreement


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Georgia released its past and future claims.” 

The McClendon release

clearly reflected the intent of the parties as to future claims, while the agreement

before us does not. For many reasons, McClendon’s guidance for this case is

limited.

      WellPoint also points to cases addressing antitrust violations based on

conduct that originated at a prior time, arguing that courts “have found that

releases do bar antitrust claims when they are based on a continuation of the

released conduct.” Again—this is certainly true. However, the utility of the cases

relied upon by WellPoint to help it here is belied by the facts of those decisions.

For example, WellPoint claims the case Madison Square Garden, L.P. v. National

Hockey League, 

(S.D.N.Y. Oct. 10, 2008), is similar to this

case. Instead it is quite different. Madison Square Garden had signed an

agreement that “forever releases and discharges” the National Hockey League from

any claims related to policies in effect at the time the agreement was executed in

2005. 

Notwithstanding this language, Madison Square Garden sued

based on “no allegations of post-2005 conduct apart from (1) the enforcement of

pre-existing policies and (2) the 2006 extension of the licensing agreement that had

been in place since 1994, which reaffirmed each Member Club’s assignment of the

right to ‘use or license its team’s trademarks’ to the League.” 

Given the

gap between what claims Madison Square Garden released and what claims they


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subsequently brought, the District Court “ha[d] little trouble” dismissing certain

claims. 

Quite distinctive from Madison Square Garden, this case

involves new post-release conduct. Thus, the holding in Madison Square Garden

is of little assistance here.

       WellPoint also relies on Klay v. All Defendants, 309 F. App’x 294 (11th Cir.

2009). In Klay, the plaintiffs were “forced to concede that their claims predate the

Effective Date of the settlement.” 

(quoting MDL 1334 Dkt. 5838 (MDL

1334 R&R) at 18). Indeed, a review of the Report & Recommendation in that case

makes the distinction between Klay and this case even more clear. In Klay,

“Plaintiffs suggest that it is irrelevant whether their claims existed prior to the

settlement, so long as they were subjectively unaware of the existence of their

claims.” (MDL 1334 R&R at 18 (emphasis added)). There is no such concession

or suggestion here. Thus, Klay is of little relevance to this case. The same is true

of Thomas v. Blue Cross & Blue Shield Ass’n, 

(11th Cir. 2010),

another case relied upon by WellPoint and cited by the Majority. See 

(“Kolbusz’s claims of tortious interference and defamation arise from acts that

occurred before the effective date, which is the only date the district court should

have considered.”).

       WellPoint is correct that this Court and others have encouraged the pretrial

settlement of class action lawsuits. See, e.g., In re U.S. Oil & Gas Litig., 

             Case: 12-14013    Date Filed: 06/18/2014   Page: 51 of 51


489, 493 (11th Cir. 1992). But I am not aware that this Court has ever encouraged

protection for future wrongdoing, particularly where parties have not expressly

addressed it in their settlement agreement. The Settlement Agreement here did not

immunize WellPoint for future underpayments to doctors. For these reasons, I

would vacate the Injunction not just for the ERISA claims, but for the RICO and

antitrust claims as well.




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