In Re: Blue Cross Blue Shield Antitrust Litigation ( 2023 )

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[PUBLISH]
In the
United States Court of Appeals
For the Eleventh Circuit
____________________
No. 22-13051
____________________
IN RE: BLUE CROSS BLUE SHIELD ANTITRUST LITIGATION
MDL 2406
_____________________________________________
2:13-cv-20000-RDP
GALACTIC FUNK TOURING, INC.,
AMERICAN ELECTRIC MOTOR SERVICES, INC.,
CB ROOFING, LLC,
PEARCE, BEVILL, LEESBURG, MOORE, P.C.,
PETTUS PLUMBING & PIPING, INC., et al.,
Plaintiffs-Appellees,
TOPOGRAPHIC, INC.,
EMPLOYEE SERVICES INC.,
HOME DEPOT U.S.A., INC.,
JENNIFER COCHRAN,
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2 Opinion of the Court 22-13051
AARON CRAKER,
DAVID G. BEHENNA,
Interested Parties-Appellants,
versus
ANTHEM, INC.,
EXCELLUS HEALTH PLAN, INC.,
d.b.a. Excellus BlueCrossBlueShield,
PREMERA BLUE CROSS,
BLUE CROSSBLUE SHIELD OF ARIZONA,
HEALTH CARE SERVICE CORPORATION, et al.,
Defendants-Appellees.
____________________
Appeals from the United States District Court
for the Northern District of Alabama
D.C. Docket No. 2:13-cv-20000-RDP
____________________
Before WILLIAM PRYOR, Chief Judge, ABUDU, Circuit Judge, and
BARBER,* District Judge.
* Honorable Thomas P. Barber, United States District Judge for the Middle
District of Florida, sitting by designation.
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22-13051 Opinion of the Court 3
WILLIAM PRYOR, Chief Judge:
This appeal requires us to determine whether the district
court abused its discretion in approving a settlement agreement for
a multi-district antitrust class action against the Blue Cross Blue
Shield Association and its member plans. One objector, Home De-
pot U.S.A., Inc., contends that the settlement violates public policy
by releasing prospective antitrust claims and violates due process
and class-action rules by allowing the same counsel and class rep-
resentatives to represent both an injunctive class and a damages
class. Another objector, Topographic, Inc., argues that the district
court misapplied the law and clearly erred in its factual findings in
allocating the settlement fund between different groups of claim-
ants. A third objector, David Behenna, contends that the district
court erred in determining that the class counsels’ fees were rea-
sonable. And the final objectors, Jennifer Cochran and Aaron
Craker, argue that the district court erred in allowing the settle-
ment to treat the unclaimed settlement funds of employers differ-
ently than the unclaimed funds of employees and in approving a
plan of distribution that fails to address the employers’ disburse-
ment obligations under the Employee Retirement Income Security
Act of 1974 (ERISA). Because the district court did not abuse its
discretion, we affirm.
I. BACKGROUND
The Blue Cross Blue Shield Association is a national health
insurance company that owns and licenses its federal trademarks
to local member plans and affiliated entities. The Association, its
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4 Opinion of the Court 22-13051
member plans, and the affiliated entities together make up what is
known colloquially as Blue Cross.
Over a decade ago, subscribers who bought health insurance
filed a class action against Blue Cross, alleging that it violated the
Sherman Antitrust Act, 15 U.S.C. §§ 1–3, by restricting the member
plans’ ability to compete. The initial complaint sought to certify a
class action and was the first of many filed across the country. See
Complaint, Cerven v. Blue Cross & Blue Shield of North Carolina, No.
5:12-cv-17 (W.D.N.C. Feb. 7, 2012). Healthcare providers also filed
antitrust claims against Blue Cross.
The actions against Blue Cross were consolidated in multi-
district litigation in the Northern District of Alabama and split into
two tracks: one for subscribers and another for providers. This ap-
peal concerns the subscriber-track litigation. In their consolidated
complaint, the subscribers alleged that Blue Cross allocated geo-
graphic territories, limited member plans’ competition by mandat-
ing a minimum percentage of business under the Blue Cross brand
for each member doing business inside and outside their territories,
restricted the right of member plans to be sold to companies out-
side the Association, and agreed to other ancillary restraints on
competition. The subscribers sought money damages, treble dam-
ages, restitution, and injunctive relief.
In 2018, the district court granted partial summary judgment
for the subscribers, ruling that, under section 1 of the Sherman Act,
a per se standard applied to Blue Cross’s alleged “aggregation of
competitive restraints.” In re Blue Cross Blue Shield Antitrust Litig.,
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308 F. Supp. 3d 1241, 1267 (N.D. Ala. 2018). This ruling treated the
challenged aggregated restraints as “necessarily illegal.” Id. at 1259(quoting Leegin Creative Leather Prods., Inc. v. PSKS, Inc., 551 U.S.
877, 886 (2007)). The district court did not rule on the standard that
would govern individual restraints if considered separately. Id. at
1258.
Amid the ongoing litigation, the subscriber-track plaintiffs
and Blue Cross began settlement discussions. Starting in 2017, a
court-appointed special master assisted with the negotiations and
held dozens of meetings and conference calls. The parties reached
a settlement agreement after years of negotiations.
The settlement agreement divided the subscriber-track
plaintiffs into two groups: a damages class under Federal Rule of
Civil Procedure 23(b)(3) and an injunctive relief class under Rule
23(b)(2). The damages class includes “All Individual Members (ex-
cluding dependents and beneficiaries), Insured Groups (including
employees, but excluding non-employee Members), and Self-
Funded Accounts (including employees, but excluding non-em-
ployee Members) that purchased, were covered by, or were en-
rolled in a Blue-Branded Commercial Health Benefit Product.” The
injunctive class includes “all Individual Members, Insured Groups,
Self-Funded Accounts, and Members that purchased, were covered
by, or were enrolled in a Blue-Branded Commercial Health Benefit
Product sold, underwritten, insured, administered, or issued by
any Settling Individual Blue Plan during the Settlement Class Pe-
riod.” The two classes almost completely overlap in membership.
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The main difference is that the injunctive class includes beneficiar-
ies and dependents of employees, and the damages class does not.
The damages class and the injunctive class include both
“fully insured accounts” and “self-funded accounts.” Fully insured
accounts buy health insurance from Blue Cross, which as the in-
surer pays enrollees’ medical costs, bears the risk that enrollees’
claims will exceed premiums, controls the benefits structure,
makes coverage decisions, and provides administrative services.
The settlement class period for the fully insured claimants is Feb-
ruary 7, 2008, through October 16, 2020.
Self-funded accounts do not buy health insurance. They in-
stead purchase administrative services and unbundled products like
vision, dental, and stop-loss insurance from Blue Cross. Self-funded
accounts self-insure for healthcare costs, so the employer, not Blue
Cross, pays for its employees’ healthcare costs at Blue Cross rates.
The self-funded account employees might contribute to their pre-
miums or to the cost of the products purchased by their employer.
The parties and the district court refer to the self-funded claimants
as “self-funded,” “self-insured,” and “ASOs” interchangeably. In
July 2019, self-funded counsel and a self-funded claimants’ class rep-
resentative were appointed to represent separately the self-funded
claimants during the settlement negotiations. The settlement class
period for the self-funded claimants is September 1, 2015, through
October 16, 2020.
The parties first negotiated injunctive relief that requires
Blue Cross to make structural reforms to increase competition
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between its members. The structural changes include eliminating
the “National Best Efforts Requirement,” which restricted the
member plans’ ability to market under other brands; allowing
member plans to submit competing bids that were previously pro-
hibited; restricting the application of the “Local Best Efforts Re-
quirement,” which required each member plan to generate a cer-
tain percentage of its revenue within its geographic service area us-
ing the Blue Cross brand; restricting the conditions that Blue Cross
may place on acquisitions of member plans; eliminating several re-
strictions that Blue Cross had placed on contracts between self-
funded accounts and healthcare providers; and restricting Blue
Cross’s ability to include “Most Favored Nation-Differential”
clauses in contracts with providers. Other features of Blue Cross’s
structure, like the Exclusive Service Area policy, are allowed to re-
main in place post-settlement. The settlement agreement also es-
tablishes a monitoring committee to oversee compliance with the
structural changes dictated by the agreement. The monitoring
committee is charged with mediating certain disputes and review-
ing certain rule changes that Blue Cross may make during the five-
year monitoring period following approval of the settlement.
The parties next negotiated relief for the damages class that
creates a common fund of $2.67 billion to pay damages, provide for
notice and administration, and pay attorneys’ fees and costs. The
subscribers engaged Kenneth Feinberg, a respected mediator in the
field of settlement allocations, to help determine an appropriate al-
location of the settlement fund between the fully insured claimants
and the self-funded claimants. The settlement provides a plan of
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distribution that allocates 93.5 percent of the net settlement fund
to the fully insured claimants and 6.5 percent to the self-funded
claimants. This allocation is based on several factors, including the
relative volume of payments by the fully insured claimants and the
self-funded claimants, the strength of their respective claims, the
shorter self-funded damages period, and the premiums paid for
fully insured coverage in contrast with the administrative fees
charged for self-funded accounts.
The plan of distribution provides a method for calculating
damages for each kind of claimant. For fully insured claimants, the
actual premiums paid by individual members and insured groups
will be used to determine the pro-rata share of the fully insured
claimants’ net settlement fund for each member and group. Indi-
viduals collect all their pro-rata share. The damages for fully in-
sured groups, which include employers and employees, require
further calculations. For fully insured groups in which the em-
ployer makes a claim and no employees do so, the employer will
receive that group’s entire pro-rata distribution. If any employee
makes a claim, the group’s pro-rata share must be allocated be-
tween the employer and any claiming employees. The settlement
agreement does not relieve employers of any ERISA obligations,
including any fiduciary obligation to distribute claims proceeds to
their employees.
Because both fully insured employers and employees can
bear a portion of the burden of the premiums paid, the plan of dis-
tribution includes a default option for apportioning premiums
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between fully insured employers and employees. Employees may
decline to consent to the default option if they paid a higher contri-
bution percentage than the default option and can provide proof
supporting that higher percentage to the settlement administrator
for approval. If an employee files a claim but his employer does not,
the employee will receive credit for only his portion of the pre-
mium. Any money not claimed by employees is reallocated back
to the employer. Any money not claimed by an employer is reallo-
cated back to the fully insured claimants’ net settlement fund.
For self-funded claimants, disbursements are allocated be-
tween employers and employees based on the estimated share of
the administrative fees paid by each. The plan of distribution also
creates a default option for self-funded accounts from which em-
ployees may opt out by presenting proof that they paid more
money than the default option provides. The settlement agree-
ment does not relieve self-funded employers from any ERISA obli-
gations they have when distributing settlement funds to employ-
ees.
In addition to paying damages, the settlement fund pays at-
torneys’ fees and costs. The parties agreed that the subscribers’
counsel could seek a combined fee and expense award up to 25 per-
cent of the $2.67 billion settlement fund. Counsel filed a petition
seeking that full amount, with the attorneys’ fees accounting for
23.47 percent and incurred expenses accounting for the remainder.
This request was supported by a declaration of counsel, a
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declaration by the special master, and two expert reports that at-
tested that the requested award was reasonable.
In exchange for the relief described above, the subscribers,
on the effective date, release all claims “based upon, arising from,
or relating in any way to” (i) the “factual predicates of the Sub-
scriber Actions” as described in the relevant subscriber-track com-
plaints from the beginning of time through the effective date; (ii)
“any issue raised in any of the Subscriber Actions by pleading or
motion;” or (iii) “mechanisms, rules, or regulations” adopted by
Blue Cross that are “within the scope” of the settlement’s structural
relief provisions and “approved through the Monitoring Commit-
tee Process during the Monitoring Period.”
Post-settlement, subscribers may still sue Blue Cross, de-
pending on the claim and whether the subscriber opted out of the
agreement. Subscribers retain their right to pursue claims relating
to coverage, benefits, and administration of claims that are not
“based in whole or in part on the factual predicates of the Sub-
scriber Actions or any other component” of the released claims.
Those opting out of the settlement may bring claims for individual
injunctive or declaratory relief, except that injunctive class opt-outs
may not seek indivisible injunctive relief. A self-funded claimant
who opts out retains the right to seek some individual injunctive
or declaratory relief as defined by the settlement agreement.
After the subscribers moved for final approval of the settle-
ment agreement, the district court conducted a two-day fairness
hearing and heard arguments in support of the agreement and
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from objectors. Home Depot, a self-funded claimant and an opt-
out from the damages class, objected to the scope of the release on
the ground that it permits illegal conduct and violates public policy.
Topographic, a self-funded claimant, objected to the allocation per-
centages between the fully insured claimants and the self-funded
claimants as well as the self-funded claimants’ shorter class period
of five years.
The district court held another hearing to consider the
Topographic objection to the allocation and allowed expert testi-
mony and cross-examination. Before that hearing, Topographic
sought to discover communications between the fully insured
claimants’ counsel and the self-funded claimants’ economic expert
witness, Dr. Joseph R. Mason. The district court denied the discov-
ery request based on the common-interest privilege.
Individual class members also raised objections. Behenna, an
individual class member, objected to the attorneys’ fees request
and argued that the settlement required the district court to use the
lodestar methodology to determine the reasonableness of the at-
torneys’ fees because the subscribers’ claims arose under a fee-shift-
ing statute and because the case was not a common fund case.
Cochran and Craker, employees of fully insured employers, ob-
jected to the plan of distribution allocating unclaimed employee
funds to their employer.
Finally, the Department of Labor, a nonparty, filed a state-
ment of interest in response to the proposed settlement agreement.
The Department did not object to the settlement, but it expressed
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concerns that the settlement agreement might affect employers’
and plan fiduciaries’ obligations under ERISA. Specifically, the De-
partment was concerned that the settlement did not account for
ERISA at all.
The district court overruled all objections, rejected the con-
cern raised by the Department of Labor, and approved the settle-
ment agreement. In a separate order, it approved the subscriber
counsel’s attorneys’ fees and expenses request. The district court
also determined that there was “no just reason for delay in the en-
try of [the] Final Order and Judgment” and severed the subscriber
action from unrelated, still-pending claims in the provider track lit-
igation. The district court certified its order for appeal under Fed-
eral Rule of Civil Procedure 54(b). See Jenkins v. Prime Ins., 32 F.4th
1343, 1345 (11th Cir. 2022) (permitting appealable judgment as to
fewer than all claims).
II. STANDARD OF REVIEW
We review the approval of a class action settlement agree-
ment for abuse of discretion. Day v. Persels & Assocs., 729 F.3d 1309,
1316 (11th Cir. 2013). Because “determining the fairness of the set-
tlement is left to the sound discretion of the trial court, we will not
overturn its decision absent a clear showing of abuse of that discre-
tion.” In re Equifax Inc. Customer Data Sec. Breach Litig., 999 F.3d
1247, 1273 (11th Cir. 2021) (alteration adopted) (citations and inter-
nal quotation marks omitted). “A district court abuses its discretion
if it applies an incorrect legal standard, follows improper proce-
dures in making the determination, or makes findings of fact that
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are clearly erroneous.” Chi. Trib. Co. v. Bridgestone/Firestone, Inc.,
263 F.3d 1304, 1309 (11th Cir. 2001).
III. DISCUSSION
We divide our discussion into four parts. First, we address
the issues raised by Home Depot. Second, we address the issues
raised by Topographic. Third, we address Behenna’s appeal. And
last, we address the issues raised by Cochran and Craker.
A. Home Depot
Home Depot makes three arguments on appeal. It first ar-
gues that release of prospective claims violates public policy, per-
petuates clearly illegal conduct, and exceeds the identical-factual-
predicate doctrine. It next argues that allowing the injunctive class
and the damages class to be represented by the same counsel and
class representatives violates Federal Rule of Civil Procedure 23(a)
and the Due Process Clause of the Fifth Amendment. And it finally
contends that intraclass conflicts within the injunctive class violate
Rule 23(a). None of these arguments persuade us that the district
court abused its discretion.
1. The District Court Did Not Err by Approving the
Release of the Injunctive Class Members’ Claims.
We reject Home Depot’s arguments that the district court
abused its discretion when it approved the release provision of the
settlement agreement. First, no public policy prohibits prospective
releases in antitrust cases. Second, the release does not perpetuate
clearly illegal conduct. Third, the release provision permissibly
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14 Opinion of the Court 22-13051
releases only claims based on an identical factual predicate to the
underlying litigation.
a. The Release Does Not Violate Public Policy.
Home Depot argues that the release provision violates pub-
lic policy because the antitrust laws depend on private enforce-
ment, and prospective releases undermine that regime. But re-
leases of future claims are an important part of many settlement
agreements. See, e.g., Adams v. S. Farm Bureau Life Ins., 493 F.3d
1276, 1286 (11th. Cir. 2007); In re Literary Works in Elec. Databases
Copyright Litig., 654 F.3d 242, 247–48 (2d Cir. 2011); Oswald v.
McGarr, 620 F.2d 1190, 1198 (7th Cir. 1980). And releases are com-
monly approved and enforced in class actions. See Fager v. Centu-
ryLink Commc’ns., LLC, 854 F.3d 1167, 1176 (10th Cir. 2016)
(“[I]nherent in the nature of a class-action settlement is the release
of the claims of every class member (except those who opt out).”).
The antitrust context is no different.
We have approved prospective releases of antitrust claims.
For example, in In re Managed Care, 756 F.3d 1222, 1235–37 (11th
Cir. 2014), we affirmed the approval of a settlement agreement that
included a release of future antitrust claims arising from the same
conduct. We have also reversed a refusal to enforce a “broad” re-
lease that extended to “any and all causes of action . . . of whatever
kind, source, or character that are related to matters addressed in
the class action, including antitrust and other statutory and com-
mon law claims.” Thomas v. Blue Cross and Blue Shield Ass’n, 594 F.3d
814, 822 (11th Cir. 2010) (internal quotation marks omitted). And
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our predecessor court upheld the approval of an antitrust settle-
ment that included a release of future claims. In re Chicken Antitrust
Litig. Am. Poultry, 669 F.2d 228, 234 (5th Cir. Unit B 1982). It men-
tioned the importance of “total peace” for defendants in any settle-
ment and stated that the release of future claims was important for
the antitrust settlement at issue specifically. Id. at 238.
Our sister circuits have approved and enforced prospective
releases in antitrust cases too. The Second Circuit has approved
broad releases in antitrust settlement agreements and explained
that “[b]road class action settlements are common, since defend-
ants and their cohorts would otherwise face nearly limitless liability
from related lawsuits in jurisdictions throughout the country.”
Wal-mart Stores, Inc. v. Visa U.S.A., Inc., 396 F.3d 96, 106 (2d Cir.
2005). The Seventh Circuit has also approved releases in antitrust
settlements when the release involved claims based on conduct
central to the underlying litigation, even if they were ongoing after
the effective date of the settlement agreement. See, e.g., MCM Part-
ners, Inc. v. Andrews-Bartlett & Assocs., 161 F.3d 443, 448–49 (7th Cir.
1998). Public policy does not categorically prohibit releases of fu-
ture antitrust claims.
Home Depot cites authorities that rejected releases for over-
breadth, but those authorities are inapposite. For example, in one
decision, the Supreme Court rejected a release in an international
commercial arbitration agreement that completely barred the ap-
plication of the Sherman Act. Mitsubishi Motors Corp. v. Soler Chrys-
ler-Plymouth, Inc., 473 U.S. 614, 616 (1985). The Court said that if
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16 Opinion of the Court 22-13051
the choice-of-law clause in the arbitration agreement worked in
tandem with the choice-of-forum clause to require all antitrust
claims to be decided under Swiss law instead of the Sherman Act,
it would constitute “a prospective waiver of a party’s right to pur-
sue statutory remedies for antitrust violations” that would be
“against public policy.” Id. at 637 n.19. The Court was concerned
about the complete absence of a statutory remedy for any antitrust
violation: it was possible that, under the arbitration agreement, the
Sherman Act would never apply, no matter what the antitrust
claims were or when they accrued. The Court did not hold that
every prospective release of antitrust claims would violate public
policy; it stated only that categorically barring parties from seeking
relief under the Sherman Act regardless of the underlying claim
would violate public policy. Similarly, in Redel’s Inc. v. General Elec.
Co., our predecessor court held that a general release in a franchise
agreement could not bar antitrust claims arising after the effective
date of the agreement because of public policy concerns. 498 F.2d
95, 99–100 (5th Cir. 1974). The release in Redel’s was broad—it re-
leased “all claims, demands, contracts, and liabilities.” Id. at 98 (in-
ternal quotation marks omitted). And the court held that if it were
to bar claims arising from later antitrust violations without any fac-
tual or temporal limitation, the release would violate public policy.
Id. at 99.
The release in this appeal is limited and affects the rights of
only some private individuals to sue Blue Cross, and it does not
affect public enforcement of the antitrust laws. Private enforce-
ment is only one mechanism by which federal antitrust laws may
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be vindicated. The government may also enforce the antitrust laws
against companies like Blue Cross. 15 U.S.C. §§ 15a, 15c, 15f. And
the settlement agreement does not bar the Department of Justice
or state attorneys general from pursuing civil claims or criminal
charges against Blue Cross. Home Depot’s concern that the release
will undermine the enforcement of the antitrust laws is overstated.
b. The Release Does Not Perpetuate Clearly Illegal
Conduct.
Home Depot argues that the settlement should not have
been approved because it perpetuates “clearly illegal conduct” by
allowing the continuation of the Exclusive Service Area policy. In
the antitrust context, a settlement agreement may perpetuate con-
duct when its illegality is uncertain. Bennett v. Behring Corp., 737
F.2d 982, 987 (11th Cir. 1984). The classification of the conduct is
crucial.
Under section 1 of the Sherman Act, two standards govern
the review of challenged conduct: the per se rule and the rule of
reason. Fed. Trade Comm’n v. Ind. Fed’n of Dentists, 476 U.S. 447, 457–
58 (1986). Conduct governed by the per se rule “unequivocally” vi-
olates the Sherman Act. Consultants & Designers, Inc. v. Butler Serv.
Grp., Inc., 720 F.2d 1553, 1562 (11th Cir. 1983). Per se violations
clearly restrain competition. Id. at 1561. The “rule of reason,” in
contrast, governs conduct that does not per se violate the Act. Ind.
Fed’n of Dentists, 476 U.S. at 457–58. “Under the rule of reason, the
test of legality is whether the restraint imposed is such as merely
regulates and perhaps thereby promotes competition or whether it
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18 Opinion of the Court 22-13051
is such as may suppress or even destroy competition.” Levine v.
Cent. Fla. Med. Affiliates, Inc., 72 F.3d 1538, 1551 (11th Cir. 1996)
(quoting Chi. Bd. of Trade v. United States, 246 U.S. 231, 238 (1918)
(internal quotation marks omitted)). Conduct subject to the rule of
reason does not necessarily violate the Sherman Act: a plaintiff
must prove its anticompetitive effect. Id. So long as the conduct
perpetuated under a settlement agreement does not per se violate
antitrust law, the settlement may be approved, even if the perpet-
uated conduct might not withstand scrutiny under the rule of rea-
son. Bennett, 737 F.2d at 987.
The district court did not abuse its discretion. Home Depot
offers no evidence that the Exclusive Service Area policy is a per se
violation of the Sherman Act. It instead argues that the district
court already ruled that the Exclusive Service Area policy is subject
to the per se rule. But the district court never made that ruling. It
ruled only that the aggregation of all the challenged restraints con-
stituted a per se violation of antitrust law; it did not rule that any
individual restraint constituted a per se violation. Because Blue
Cross materially changed its system by adding procompetitive fea-
tures and eliminating some anticompetitive features, the district
court concluded that the post-settlement system, which included
the Exclusive Service Area policy, would not be clearly illegal. Its
perpetuation was “no bar to approval.” Id.USCA11 Case: 22-13051 Document: 228-1 Date Filed: 10/25/2023 Page: 19 of 45
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c. The Release Covers Only Claims Based on an
Identical Factual Predicate.
Home Depot argues that the settlement exceeds the limits
of the identical-factual-predicate doctrine because it releases claims
arising from “any issue raised in any of the Subscriber Actions by
pleading or motion” and from “mechanisms, rules, or regulations”
by the individual plans and the Association, within the scope of the
settlement agreement as approved by the monitoring committee.
Home Depot argues that this language exceeds the identical factual
predicate because it requires only some overlap with a fact or issue
raised in the litigation.
In its review of a settlement, “a court may permit the release
of a claim based on the identical factual predicate as that underlying
the claims in the settled class action.” Matsushita Elec. Indus. Co. v.
Epstein, 516 U.S. 367, 377 (1996) (citation and internal quotation
marks omitted). Under the identical-factual-predicate doctrine, a
settlement agreement may release claims that share a common nu-
cleus of operative fact with the claims in the underlying litigation.
See Adams, 493 F.3d at 1289. In practice, the doctrine mirrors res
judicata: a release may lawfully bar later actions arising from the
same cause as the settled litigation. TVPX ARS, Inc. v. Genworth Life
and Annuity Ins., 959 F.3d 1318, 1325 (11th Cir. 2020). We have rec-
ognized that res judicata applies not only to the precise legal theory
presented in the previous litigation but to all legal theories and
claims arising out of a common nucleus of fact. Trustmark Ins. v.
ESLU, Inc., 299 F.3d 1265, 1270 n.3 (11th Cir. 2002).
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The district court did not abuse its discretion. The release it
approved is no broader than other releases we have approved. We
have approved settlement agreements releasing claims “in any way
related” to the factual predicate of the underlying litigation.
Thomas, 594 F.3d at 817 (requiring the district court to enforce a
release provision that “released and forever discharged” “all causes
of action,” including antitrust claims, “that are, were or could have
been asserted against any of the Released Parties by reason of, aris-
ing out of, or in any way related to any of the facts, acts, events,
transactions, occurrences, courses of conduct, business practices,
representations, omissions, circumstances or other matters refer-
enced in the Action”); see also In re Managed Care, 756 F.3d at 1226
(holding that the district court did not abuse its discretion in en-
forcing a release that discharged all claims “based on” the releasing
party’s prior conduct). So too here.
The settlement agreement limits the release to claims aris-
ing from the factual predicates of the subscriber action. It defines
released claims as those “based upon, arising from, or relating in
any way to: (i) the factual predicates of the Subscriber Actions . . .
(ii) any issue raised in any of the Subscriber Actions by pleading or
motion; or (iii) mechanisms, rules, or regulations by the Settling
Individual Blue Plans and [the Association] within the scope of” the
relief awarded to the injunctive class. This language cabins the
scope of the release. The release does not extend beyond claims
arising from the common nucleus of operative fact: all the released
claims either were raised or could have been raised during the liti-
gation that preceded the settlement. The release does not bar any
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22-13051 Opinion of the Court 21
claims that could not have been litigated before settlement or any
claims related to conduct that was not challenged in the underlying
lawsuit.
2. The District Court Did Not Err by Approving a
Settlement in Which the Same Named Plaintiffs and Counsel
Represented Both the Injunctive Class and the Damages Class.
Home Depot next argues that the settlement violates Rule
23 and the Due Process Clause because the same named plaintiffs
and counsel represented the injunctive class and the damages class
when the classes had competing settlement priorities. See FED. R.
CIV. P. 23(a)(4); U.S. CONST. amend. V. Rule 23(a)(4) and the Due
Process Clause require adequate representation of settlement class
members by the named representatives and counsel. Home Depot
argues that the representation of the injunctive class was inherently
inadequate because of the shared representation. We disagree.
Our precedents do not categorically prohibit the same plain-
tiffs and counsel from representing an injunctive relief class and a
damages class. Minor conflicts are not enough to render represen-
tation inadequate: the conflict must be “substantial” and “funda-
mental” to the specific issues in controversy. Valley Drug Co. v. Ge-
neva Pharms., Inc., 350 F.3d 1181, 1189 (11th Cir. 2003) (citation and
internal quotation marks omitted). “A fundamental conflict exists
where some party members claim to have been harmed by the
same conduct that benefitted other members of the class.” Id.Home Depot fails to identify any substantial conflict be-
tween the settlement classes. It points out that the Rule 23(b)(2)
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22 Opinion of the Court 22-13051
class would receive injunctive relief and the Rule 23(b)(3) class
would receive distributions from the settlement fund. But it never
explains why this difference is “fundamental.” Id. Unlike the two
subclasses in In re Payment Card Interchange Fee and Merch. Disc. An-
titrust Litig., 827 F.3d 223, 233–34 (2d Cir. 2016), on which Home
Depot relies, the classes’ memberships here are virtually identical.
Considering that most of the class members were eligible for both
injunctive and monetary relief, it does not follow that the class rep-
resentatives and counsel had any incentive to trade away injunctive
relief in favor of damages. Compare In re Checking Acct. Overdraft
Litig., No. 20-13367, 2022 WL 472057, at *4–5 (11th Cir. Feb. 16,
2022) (holding that common representation was adequate when
different classes of plaintiffs were injured in the same way by the
same conduct), with In re Payment Card, 827 F.3d at 235 (holding
that representation was inadequate when there was little overlap
between the Rule 23(b)(2) class and the Rule 23(b)(3) class). Given
the near-complete overlap in class membership, Home Depot also
does not offer any evidence that one class was harmed by conduct
that benefitted the other. Because there was no fundamental con-
flict of interest between the representatives and the classes, the dis-
trict court did not abuse its discretion.
3. Home Depot Forfeited Arguments about Intraclass Conflict.
Home Depot also argues that intraclass conflicts within the
injunctive class violated Rule 23. The subscriber-proponents
moved to strike those arguments because they were not made in
the opening brief. We will not consider issues that a party fails to
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22-13051 Opinion of the Court 23
brief adequately. “A party fails to adequately brief a claim when he
does not plainly and prominently raise it, for instance by devoting
a discrete section of his argument to those claims.” Sapuppo v. All-
state Floridian Ins., 739 F.3d 678, 681 (11th Cir. 2014) (citation and
internal quotation marks omitted). If a party makes only passing
references to an issue in its statement of the case or its summary of
the argument in the opening brief, the issue is considered aban-
doned. Id. at 681–82. We will not consider arguments advanced by
appellants for the first time in a reply brief. Id. at 683.
We agree that Home Depot abandoned these arguments by
only briefly referencing potential intraclass conflicts in the sum-
mary of the argument in its opening brief. Home Depot did not
devote a discrete section of its opening brief to developing the ar-
guments. Each section Home Depot devoted to the adequacy of
representation in its opening brief addresses only conflicts between
the two classes, not conflicts within the classes. Yet Home Depot’s
reply brief devotes nine pages to potential intraclass conflicts. Be-
cause those arguments were not developed in its opening brief, we
will not consider them. We grant the subscriber-proponents’ mo-
tion to strike.
B. Topographic
Topographic challenges the allocation of the settlement
funds. It argues that the district court misapplied Rule 23(e)(2)(D)
and made erroneous findings in approving the allocation, and it
contends that the district court abused its discretion when it ap-
proved a shorter damages period for the self-funded claimants. It
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24 Opinion of the Court 22-13051
challenges the approval of the fund percentage allocated to the self-
funded claimants. And it argues that the settlement fund should
have been allocated to all claimants on the same basis. None of
these arguments persuade us that the district court abused its dis-
cretion.
1. The District Court Applied the Correct Scrutiny to the
Settlement Allocation.
Topographic contends that the district court failed to apply
the correct scrutiny to the settlement allocation. It argues that the
district court misapplied Rule 23(e)(2)(D) as amended because it
approved a facially unequal allocation. It also contends that the dis-
trict court based its approval of the allocation on inadequate evi-
dence and erred in relying on Dr. Mason’s expert report. Topo-
graphic contends that, in approving the allocation, the district court
also erroneously found that self-funded claimants purchased only
administrative services from Blue Cross. And Topographic argues
that the district court erred when it denied discovery of emails be-
tween Dr. Mason and the fully insured claimants’ counsel. We ad-
dress each argument in turn.
a. The District Court Adhered to Rule 23(e)(2).
Topographic argues that the facially unequal allocation be-
tween the fully insured claimants and the self-funded claimants es-
tablishes that the district court misapplied Rule 23(e)(2)(D), which
requires class members to be treated equitably. See FED. R. CIV.
P. 23(e)(2)(D) (“If the proposal would bind class members, the
court may approve it only after a hearing and only on finding that
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22-13051 Opinion of the Court 25
it is fair, reasonable, and adequate after considering whether . . . the
proposal treats class members equitably relative to each other.”).
But the text of the amended rule requires equity, not equality, and
treating class members equitably does not necessarily mean treat-
ing them all equally.
Topographic highlights that some of our sister circuits have
explained that since Rule 23(e)(2) was amended, a settlement
should not be given a presumption of reasonableness whenever it
is the product of an arm’s-length negotiation. See, e.g., Moses v. N.Y.
Times Co., 79 F.4th 235, 243 (2d Cir. 2023); Roes, 1-2 v. SFBSC Mgmt.,
LLC, 944 F.3d 1035, 1049 n.12 (9th Cir. 2019). Although we have
not interpreted the 2018 amendment, we have recognized that “the
district court should consider the impact of Congress’ 2018 amend-
ments” to Rule 23(e) when applying it. Williams v. Reckitt Benckiser
LLC, 65 F.4th 1243, 1261 (11th Cir. 2023). But the district court did
not presume that the allocation was reasonable because it was ne-
gotiated at arm’s length.
The district court instead reviewed the allocation under
each subpart of Rule 23(e)(2). It found that the class members were
adequately represented in the light of counsel’s experience, vigor-
ous advocacy over the course of the litigation, and diligent efforts
to obtain discovery and engage expert witnesses. See FED. R. CIV.
P. 23(e)(2)(A). It determined that the settlement was negotiated at
arm’s length because there was no evidence of collusion and coun-
sel worked diligently through multiple impasses with the special
master and mediators to achieve resolution. See id. at 23(e)(2)(B).
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26 Opinion of the Court 22-13051
The district court then analyzed the adequacy of relief, considering
the costs, risks, and potential delay of trial and appeal, the effective-
ness of distributing relief to the class, and the reasonableness of the
requested attorneys’ fees. See id. at 23(e)(2)(C). It considered the
length and expense of continued litigation, the efficacy of the plan
of distribution, the opportunity for claimants to participate, and the
retention of an outside firm to process claims. And the district court
found that no collateral agreements needed to be identified for
Rule 23(e)(2)(C)(iv). Finally, the district court ruled that the pro-
posal treats class members equitably relative to each other, as re-
quired by Rule 23(e)(2)(D). It considered the differences between
the self-funded claimants and the fully insured claimants like differ-
ing litigation risks, incurred costs, and claim strengths before con-
cluding that the two were treated equitably. The district court did
not presume that the settlement was reasonable because it was ne-
gotiated at arm’s length.
Topographic argues that the district court abused its discre-
tion because our precedent requires settlement proponents to
meet a heightened evidentiary burden under Holmes v. Cont’l Can
Co., 706 F.2d 1144 (11th Cir. 1983). But Topographic misunder-
stands that precedent. Although we have stated that “a disparate
distribution favoring the named plaintiffs requires careful judicial
scrutiny into whether the settlement allocation is fair to the absent
members of the class,” id. at 1148, we have not extended this rule
to all unequal distributions of settlement allocations. We impose a
heightened burden only when named plaintiffs receive a benefit at
the expense of the absent class members. Id. at 1147–48.
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22-13051 Opinion of the Court 27
There is no Holmes issue here: the self-funded claimants
were represented by their own counsel and class representatives in
the settlement negotiations and received some compensation from
the settlement. Although the settlement agreement’s allocation is
facially unequal, it is not facially unfair. The district court did not
abuse its discretion.
b. The District Court Had Evidentiary Support for
the Settlement Allocation.
Topographic next argues that the district court approved the
settlement allocation based on inadequate evidence and erroneous
factual findings. It contends that the allocation could not be ap-
proved without a separate analysis of damages for the self-funded
claimants. But “when there are subclasses, each independently rep-
resented, an allocation formula may be negotiated without each
subclass undertaking extensive analysis of its relative damages if the
available evidence is, at the time of the negotiations, insufficient to
indicate a need for it.” In re Corrugated Container Antitrust Litig., 643
F.2d 195, 219 (5th Cir. 1981). The self-funded claimants were rep-
resented by separate counsel during the settlement negotiations,
and Topographic offers no evidence of a need for a separate analy-
sis. Topographic also points to no caselaw suggesting that a sepa-
rate analysis for the self-funded claimants was necessary.
Topographic argues that the district court abused its discre-
tion in approving the settlement allocation without evidentiary
support. In approving a settlement agreement, the district court
must undertake an analysis of the facts and the law relevant to the
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28 Opinion of the Court 22-13051
proposed compromise and support its conclusions “by memoran-
dum opinion or otherwise in the record.” Cotton v. Hinton, 559 F.2d
1326, 1330 (5th Cir. 1977). The district court must provide us a basis
for reviewing the exercise of its discretion. Holmes, 706 F.2d at 1147.
Topographic accuses the district court of adopting the rep-
resentations of class counsel and the mediator without evidentiary
support. But the district court cited extensive evidence to support
its finding that the allocation was reasonable because of the com-
parative strengths of each class’s antitrust claims and relative com-
petitiveness of the fully insured market. For example, the district
court cited several exhibits establishing that fully insured accounts
are four to ten times more profitable than self-funded accounts. It
also pointed to evidence that self-funded accounts were often loss-
leaders for Blue Cross. It relied on expert testimony that the self-
funded market was significantly more competitive, more price sen-
sitive, and less capable of sustaining overcharges than the fully in-
sured market. These facts supported the comparative strength of
the fully insured claimants’ underlying antitrust claims. The district
court based its decision on more than the assurances of counsel and
the mediator.
c. The District Court Did Not Abuse its Discretion in
Relying on Dr. Mason’s Expert Report.
Topographic argues that the district court abused its discre-
tion in relying on the expert report of Dr. Joseph Mason, an econ-
omist, in its approval of the settlement allocation. Topographic
contends that Dr. Mason’s report lacks evidentiary support and
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22-13051 Opinion of the Court 29
that the district court needed to justify its reliance on Dr. Mason’s
report over the other experts. We disagree.
Dr. Mason’s report has an evidentiary basis. The record, in-
cluding evidence from Blue Cross about the differences between
the fully insured market and the self-funded market, supports Dr.
Mason’s conclusions. For example, the record contains documents
from Blue Cross that establish differences in profitability between
fully insured accounts and self-funded accounts, as well as docu-
ments that establish differences between the fully insured market
and the self-funded market. And contrary to Topographic’s argu-
ment, Dr. Mason’s report was not based on the assumption that
self-funded accounts purchase only administrative services from
Blue Cross. In his report, Dr. Mason used four proxy methods to
analyze the relative costs borne by the two classes of claimants. In
addition to directly comparing fully insured accounts’ premiums
with self-funded accounts’ administrative fees, the analysis com-
pared the relative net revenue, overcharge differentials, operating
gain differentials, and revenue-per-member growth differences be-
tween fully insured and self-funded accounts. The record belies any
assertion that Dr. Mason’s report depended solely on comparing
administrative fees with fully insured premiums. The district court
also explained why it credited Dr. Mason’s testimony. It recounted
Dr. Mason’s credentials and experience and cited evidence support-
ing his expert opinions.
Topographic argues that the district court failed to discuss
the Topographic expert’s report, and that the failure to do so led to
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30 Opinion of the Court 22-13051
a series of errors. But choosing to credit one expert opinion over
another is within the sound discretion of the district court. Battle v.
United States, 419 F.3d 1292, 1299 (11th Cir. 2005) (“[A] district court
does not clearly err simply by crediting one opinion over another
where other record evidence exists to support the conclusion.” (ci-
tation omitted)). The district court cited evidence that supported
its decision to credit Dr. Mason’s report, which is all our precedent
required it to do. See In re Corrugated Container, 643 F.2d at 215.
d. The District Court Did Not Erroneously Find that
Self-Funded Claimants Pay Only Administrative
Fees.
Topographic argues next that the district court erroneously
found that self-funded claimants pay only administrative fees.
Topographic asserts that some self-funded claimants also purchase
other unbundled services like dental, vision, or stop-loss insurance
from Blue Cross. It contends that this factual error was central to
the approval of the settlement agreement. Several state insurance
departments as amici curiae echo this concern. They worry that the
district court’s opinion could be misconstrued as ruling that stop-
loss insurance is not insurance, which could cast doubt on the
states’ authority to regulate stop-loss insurance products.
The district court made no error when it described the dif-
ferences between the two groups of claimants. It did not rule that
self-funded claimants pay only claims processing fees or that stop-
loss insurance is not insurance. Instead, it described the distinction
between the fully insured claimants and the self-funded claimants:
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22-13051 Opinion of the Court 31
one buys full-service health insurance, and the other does not. Self-
funded accounts are often called “administrative services only” or
“ASOs”—in fact, the self-funded claimants are sometimes referred
to as “the ASOs” in the briefing.
Even if the district court’s statement were a factual finding,
it is not clear how the “finding that [the] Self-Funded [Claimants]
‘purchased administrative services only,’ not ‘insurance’ or other
ancillary services,” was central to the approval of the settlement.
Nothing in the record suggests that the district court’s analysis
would have changed even if it had defined self-funded accounts as
those that purchased administrative services, stop-loss insurance,
dental insurance, vision insurance, and other unbundled products.
What matters is whether there is a difference between the markets
in which the fully insured claimants and self-funded claimants par-
ticipated. Because the fully insured claimants purchased full-service
health insurance from Blue Cross, they paid premiums and other
charges that the self-funded claimants did not. That some self-
funded claimants purchased additional unbundled products does
not change that reality. So even if the statement that the self-funded
claimants “purchased administrative services only” were a finding,
it was not central to the approval of the settlement and was not
reversible error.
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32 Opinion of the Court 22-13051
e. The District Court Correctly Denied the Self-
Funded Objectors’ Discovery Request under the
Common-Interest Privilege.
The district court also did not abuse its discretion when it
denied the self-funded objectors’ request to discover communica-
tions between the fully insured claimants’ counsel and Dr. Mason
under the common-interest privilege, which applies when “multi-
ple clients share a common interest about a legal matter.” United
States v. Almeida, 341 F.3d 1318, 1324 (11th Cir. 2003) (citations and
internal quotation marks omitted). The privilege “serves to protect
the confidentiality of communications passing from one party to
the attorney for another party where a joint defense effort or strat-
egy has been decided upon and undertaken by the parties and their
respective counsel.” United States v. Schwimmer, 892 F.2d 237, 243
(2d Cir. 1989). “The need to protect the free flow of information
from client to attorney logically exists whenever multiple clients
share a common interest about a legal matter.” Almeida, 341 F.3d
at 1324 (citations and internal quotations omitted). The common-
interest privilege requires only “a substantially similar legal inter-
est,” In re Teleglobe Commc’ns Corp., 493 F.3d 345, 365 (3d Cir. 2007),
not a “complete unity of interests among the participants,” United
States v. Bergonzi, 216 F.R.D. 487, 495 (N.D. Cal. 2003). And “it may
apply where the parties’ interests are adverse in substantial re-
spects.” Id.The district court did not abuse its discretion when it denied
the self-funded objectors’ discovery request based on the common-
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22-13051 Opinion of the Court 33
interest privilege. The self-funded objectors sought to discover
communications between their expert, Dr. Mason, and the fully in-
sured claimants’ counsel to determine “Fully Insured [Claimants’]
counsel’s input into the Mason Report.” The self-funded claimants
and the fully insured claimants had a substantially similar interest
in the litigation against Blue Cross and in the settlement negotia-
tions. That the details of the settlement put them in adverse posi-
tions does not undermine their broader mutual interest.
Even if the district court misapplied the common-interest
privilege, we would not overturn its decision without any proof
that the application harmed the self-funded objectors. “[W]e will
not overturn discovery rulings unless . . . [the] ruling resulted in
substantial harm to the appellant’s case.” Harrison v. Culliver, 746
F.3d 1288, 1297 (11th Cir. 2014) (citation and internal quotation
marks omitted). On appeal, Topographic makes no showing of
harm. It instead suggests that there could have been collusion be-
tween Dr. Mason and the fully insured claimants’ counsel and that
discovery could have unearthed it. But Topographic admitted to
the district court that there was no evidence of collusion and that
it did not believe collusion tainted the settlement. The district court
did not abuse its discretion when it denied the objectors’ discovery
request.
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34 Opinion of the Court 22-13051
2. The District Court Did Not Abuse its Discretion when It
Approved the Self-Funded Claimants’ Shorter
Damages Period.
Topographic argues that the district court abused its discre-
tion in approving the self-funded claimants’ five-year damages pe-
riod while also approving the fully insured claimants’ 12.5-year
damages period. The shorter damages period, Topographic con-
tends, is based on the erroneous determination that the self-funded
claimants did not join the litigation until September 1, 2015. Topo-
graphic argues that the original subscriber complaint notified Blue
Cross of the self-funded claimants’ damages claims, and so the self-
funded claimants are entitled to a damages period dating to 2008—
the same starting date as the fully insured claimants. And even if
self-funded accounts were not included in the Cerven damages class,
Topographic argues that because the Cerven complaint included
claims for injunctive relief brought on behalf of the self-funded ac-
counts, the ruling that the self-funded claimants’ later request for
damages did not relate back under Federal Rule of Civil Procedure
15(c) was erroneous.
Whether the self-funded claimants’ damages period dates to
2008 depends on whether the self-funded claimants were included
in the Cerven complaint. Under Rule 15(c), the original complaint
must put the defendants on notice of the claims being asserted.
Makro Cap. of Am., Inc. v. UBS AG, 543 F.3d 1254, 1260 (11th Cir.
2008); FED. R. CIV. P. 15(c). Topographic cites record evidence that
could be read to suggest that Blue Cross had notice of the self-
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22-13051 Opinion of the Court 35
funded claimants’ damages claims, and the proponents of the set-
tlement agreement offer contrary evidence. But what matters is
whether any pleading gave Blue Cross notice of the self-funded
claimants’ request for damages.
The Cerven complaint does not include self-funded accounts
in its definition of the damages class. It defines the damages class as
“[a]ll persons or entities who . . . have paid health insurance premi-
ums to [Blue Cross North Carolina] for individual or small group
full-service commercial health insurance.” See Complaint, Cerven,
No. 5:12-cv-17. Self-funded accounts do not buy “full-service com-
mercial health insurance” from Blue Cross and do not pay health
insurance premiums. The damages class, as defined in the com-
plaint, did not include self-funded claimants, and it did not give
Blue Cross notice of the self-funded claimants’ potential claims for
damages.
Topographic argues that even if self-funded accounts were
not included in the damages class of the Cerven complaint, self-
funded accounts were included in the injunctive class, which
should have put Blue Cross on notice that self-funded accounts
could later seek damages. But the injunctive class definition also
does not clearly include self-funded accounts. The complaint de-
fines the injunctive class as “[a]ll persons or entities . . . who are
currently insured by any health insurance plan that is currently a
party to a license agreement with [Blue Cross] that restricts the abil-
ity of that health insurance plan to do business outside of any geo-
graphically defined area.” Although some self-funded accounts
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36 Opinion of the Court 22-13051
purchase insurance products like stop-loss insurance from Blue
Cross, they are not “insured” for healthcare. Self-funded accounts
pay their own costs for employee healthcare. In other words, in-
stead of having Blue Cross pay for healthcare costs, self-funded ac-
counts pay for administrative services and to obtain insurer rates
with healthcare providers. The self-funded employers pay their
employees’ healthcare costs. It is not clear from the Cerven com-
plaint’s definition of the injunctive class that self-funded accounts
are included because they are not necessarily “insured by [a] health
insurance plan.”
Other parts of the Cerven complaint confirm that self-funded
accounts were not included in the damages or injunctive classes.
The complaint defines self-funded accounts as those that purchase
only administrative services, highlighting the difference between
self-funded and fully insured accounts. In its description of the an-
ticompetitive structure that it attacks, the complaint never men-
tions stop-loss insurance or other unbundled products. That the
Cerven complaint attacks “the Blue structure” is not enough for the
self-funded claimants’ damages claims to relate back. The com-
plaint did not put Blue Cross on notice that the self-funded claim-
ants would seek damages, and the complaint did not challenge an-
ticompetitive conduct in the self-funded market. See Caron v. NCL
(Bahamas), Ltd., 910 F.3d 1359, 1368 (11th Cir. 2018) (finding that
the plaintiffs’ new claim did not relate back because the original
complaint “did not put [the defendant] on notice” that the new
claim “could be relevant to the case”). The district court did not
abuse its discretion in ruling that the self-funded claimants’ request
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22-13051 Opinion of the Court 37
for damages did not relate back to the Cerven complaint and in ap-
proving a settlement allocation with a shorter damages period for
them.
3. The District Court Did Not Abuse its Discretion in
Approving the 6.5 Percent Allocation for the Self-Funded
Claimants.
Topographic also argues that the 6.5 percent settlement al-
location for the self-funded claimants was based on “an arbitrary,
retrospective 50% discount on top of the truncated class period.”
Approving the 6.5 percent allocation on top of a shorter damages
period, according to Topographic, “halv[ed] the Self-Funded
[Claimants’] damages allocation a second time.” Topographic ar-
gues that the district court made three errors in approving the allo-
cation: (1) its approval was based on the clearly erroneous finding
that self-funded plans arrived late to the litigation, (2) it approved
the application of the 50 percent discount factor without legal or
factual support, and (3) it failed to scrutinize the unequal treatment
of the self-funded claimants compared with the fully insured claim-
ants.
Topographic is wrong on all three points. First, as we have
explained, the district court did not err when it ruled that the self-
funded claimants “arrived late to the litigation” because they were
not included in either class in the Cerven complaint. Second, the ar-
gument that there is no “legal or factual support” for the discount
is a gross misstatement. The discount, which Dr. Mason applied in
his expert report, reflects that the self-funded claimants, had they
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38 Opinion of the Court 22-13051
been forced to litigate independently without the benefit of the
work done by the fully insured claimants, would have faced many
years of uncertain and expensive litigation. And the self-funded
claimants had comparatively weaker antitrust claims because of
the relative competitiveness of the self-funded market. These facts
support the approval of the allocation. See, e.g., In re Corrugated Con-
tainer, 643 F.2d at 220; In re Holocaust Victim Assets Litig., 413 F.3d
183, 186 (2d Cir. 2005); In re Agent Orange Prod. Liab. Litig. MDL No.
381, 818 F.2d 179, 183 (2d Cir. 1987). The district court did not
abuse its discretion.
4. The District Court Did Not Abuse Its Discretion when It
Allocated the Settlement Fund Between the Claimants.
Finally, Topographic argues that instead of dividing the
claimants into classes and allocating the settlement fund between
them, the settlement should have been distributed to all subscrib-
ers on the same basis. Topographic contends that the district court
created a “fundamental intra-class conflict” by creating two sub-
classes. See Dewey v. Volkswagen Aktiengesellschaft, 681 F.3d 170, 188–
89 (3d Cir. 2012).
But the inverse is true. There might have been a fundamen-
tal intraclass conflict had the district court not created a subclass for
self-funded accounts. The self-funded claimants and the fully in-
sured claimants incurred different costs during the litigation, and
their respective antitrust claims involved different markets. Had
the district court not divided them into two subclasses, the poten-
tially adverse interests of the self-funded accounts and the fully
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22-13051 Opinion of the Court 39
insured accounts could have led to a conflict of interest. See id. at
189–90.
In any event, dividing a class with potentially adverse inter-
ests into subclasses is within the sound discretion of the trial court.
See Califano v. Yamasaki, 442 U.S. 682, 703 (1979); Clark Equip. Co. v.
Int’l Union, Allied Indus. Workers of Am., AFL-CIO, 803 F.2d 878, 880
(6th Cir. 1986). And the record supports the conclusion that the
self-funded claimants and the fully insured claimants had at least
potentially adverse interests. The district court did not abuse its dis-
cretion in dividing them into subclasses.
C. Behenna
Behenna, a pro se class member, argues that the district court
erred in not applying a bifurcated analysis when determining the
reasonableness of the attorneys’ fees award. Because Behenna
failed to raise this issue before the district court, it is forfeited. And
even if the issue were not forfeited, the district court did not abuse
its discretion.
1. Behenna Forfeited the Bifurcated Analysis Issue.
Behenna contends that the district court erred in failing to
analyze separately attorneys’ fees for billings related to injunctive
relief and billings related to damages when approving the attor-
neys’ fees in the settlement agreement. He argues that the district
court should have used the lodestar methodology to assess appro-
priate fees for work related to the injunctive relief and then used
the common fund doctrine to assess appropriate fees for work
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40 Opinion of the Court 22-13051
related to the monetary relief. But Behenna forfeited that issue by
failing to raise it in the district court.
If a party tries to raise an issue for the first time on appeal,
we ordinarily will not consider it. Access Now, Inc. v. Sw. Airlines Co.,
385 F.3d 1324, 1331 (11th Cir. 2004). Behenna made two objections
in the district court: first, that the lodestar methodology should be
used to determine the subscriber counsel’s fee, and second, that the
case is not a common fund action. Neither objection hinted at the
bifurcated analysis that Behenna now requests. Indeed, his objec-
tion that the settlement is not a common fund case directly contra-
dicts his argument on appeal that the district court should have ap-
plied a common fund analysis to the damages-related attorneys’
fees.
2. Alternatively, the District Court Did Not Abuse its Discretion.
Even if the bifurcated analysis issue were not forfeited, the
district court did not abuse its discretion. Behenna contends that a
bifurcated analysis was necessary because fee-shifting statutory
awards are subject to the lodestar methodology, and Section 16 of
the Clayton Act, which governs the injunctive class’s claims, is a fee-
shifting statute. But whether the claim arose under a fee-shifting
statute “is of no consequence.” In re Equifax, 999 F.3d at 1279 n.24.
What matters is the kind of fund that the settlement agreement
creates. See In re Home Depot Inc., 931 F.3d 1065, 1082 (11th Cir. 2019)
(“Where there has been a settlement, the basis for the statutory fee
has been discharged, and it is only the fund that remains.” (citation
and internal quotation marks omitted)). The settlement agreement
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22-13051 Opinion of the Court 41
created a common fund. And, in this context, our precedents make
clear that the percentage-of-the-fund methodology should be used
to determine the reasonableness of attorneys’ fees. See In re Equifax,
999 F.3d at 1280; see also Camden I Condo. Ass’n v. Dunkle, 946 F.2d
768, 774 (11th Cir. 1991). The district court did not abuse its discre-
tion in using the percentage-of-the-fund analysis, not the lodestar
methodology or some combination of the two.
The district court also correctly applied the percentage-of-
the-fund doctrine. In a common fund settlement, attorneys’ fees
“shall be based upon a reasonable percentage of the fund estab-
lished for the benefit of the class.” Camden I, 946 F.2d at 774. Courts
typically award fees of 20 to 30 percent of the common fund, see In
re Home Depot, 931 F.3d at 1076, and view the mean of that range—
25 percent—as a rough benchmark, Camden I, 946 F.2d at 775. If a
fee award falls between 20 and 25 percent, it is presumptively rea-
sonable. See Faught v. Am. Home Shield Corp., 668 F.3d 1233, 1242
(11th Cir. 2011). If the fee exceeds 25 percent, the district court
must assess the reasonableness of the percentage using the 12 John-
son factors. See Johnson v. Ga. Highway Express, Inc., 488 F.2d 714,
717–19 (5th Cir. 1974), abrogated on other grounds by Blanchard v. Ber-
geron, 489 U.S. 87 (1989). The actual fee sought by the subscribers’
counsel was 23.47 percent of the common fund. Even though this
fee fell within the range of reasonableness, Faught, 668 F.3d at 1242,
the district court reviewed the percentage under the Johnson fac-
tors. As a cross-check, the district court then used the lodestar to
confirm the reasonableness of the percentage. The Johnson factors
and the lodestar cross-check confirmed that a fee award of 23.47
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42 Opinion of the Court 22-13051
percent was reasonable. That thorough analysis followed our prec-
edents and was not an abuse of discretion.
D. Cochran and Craker
Cochran and Craker make two arguments on appeal. First,
they argue that the plan of distribution violates Rule 23(e)(2)(D)
because the unequal distribution of unclaimed funds suggests inad-
equacy of representation for the employees of fully insured em-
ployers. Second, they argue that the district court abused its discre-
tion in failing to address ERISA concerns raised by the settlement
agreement. We address these arguments in turn.
1. The Plan of Distribution Does Not Violate Rule 23(e)(2)(D).
The district court did not abuse its discretion in approving a
distribution of unclaimed funds that differently allocates the un-
claimed funds of the fully insured employers and the unclaimed
funds of those employers’ employees. Cochran and Craker argue
that the settlement agreement’s plan of distribution is fundamen-
tally unfair because it reallocates the unclaimed funds of fully in-
sured employers back into the settlement fund to be distributed on
a pro-rata basis to other fully insured claimants but reallocates the
unclaimed funds of the employees to the employers. This distribu-
tion scheme, Cochran and Craker argue, suggests an adequacy of
representation issue under Rule 23(e).
The premise of Cochran and Craker’s critique of the plan of
distribution—that it is fundamentally unfair—is false. Cochran and
Craker argue that the district court abused its discretion in approv-
ing the plan of distribution despite Rule 23(e)(2)(D)’s requirement
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22-13051 Opinion of the Court 43
that all class members be treated equitably relative to each other.
That some class members’ unclaimed funds are treated differently
than others, they argue, is inherently inequitable and shows that
the employees of fully insured employers were not adequately rep-
resented. But like Topographic, Cochran and Craker conflate the
terms “equitably” and “equally.” The plan of distribution undoubt-
edly treats funds unclaimed by employers differently than the funds
unclaimed by their employees, but the record shows that the plan
of distribution was fair and reasonable.
The fully insured employers bore a heavier monetary bur-
den than their employees because most employers paid a portion
of their employees’ premiums. And some employees of fully in-
sured employers did not pay any portion of the premiums for their
health insurance coverage. The plan of distribution might be une-
qual, but it is not inequitable.
Cochran and Craker also fail to show that the employees of
the fully insured employers were not adequately represented or
that the district court abused its discretion in not creating a separate
subclass for the employees. A conflict of interest must be based on
differences in the economic interests of class representatives and
unnamed class members, and the conflict must be so clear and sub-
stantial that it is “fundamental” to the issues in controversy. Valley
Drug Co., 350 F.3d at 1189 (citation and internal quotation marks
omitted). Neither requirement is satisfied here.
The alleged inequity is not between class representatives
and absent class members. It is between fully insured employers—
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44 Opinion of the Court 22-13051
only some of whom are class representatives—and their employ-
ees. There is no fundamental conflict between these two groups.
Dividing them into subclasses would be necessary only if they had
divergent interests. See In re Ins. Brokerage Antitrust Litig., 579 F.3d
241, 272 (3d Cir. 2009). But the district court made clear that the
subscriber class representatives share the same interests as absent
class members, assert the same or substantially similar claims stem-
ming from a common event, and share the same kinds of injuries.
Because fully insured employers made more payments to Blue
Cross on behalf of their employees and both employers and em-
ployees were subject to the same Blue Cross health insurance
plans, it is hard to see how these two groups would have divergent
interests requiring separate representation.
2. ERISA Is No Impediment to Approving the
Settlement Agreement.
Cochran and Craker also echo the concern of the Depart-
ment of Labor that the settlement agreement may affect the duties
that employers and plan fiduciaries have under ERISA. They argue
that because the plan of distribution does not expressly instruct em-
ployers to comply with ERISA, its silence could lead to violations
when the settlement proceeds are disbursed. But as the district
court explained, nothing in the settlement agreement changes
ERISA rights: the order approving the settlement states that “all
ERISA duties still apply” and that “all ERISA fiduciaries must com-
ply with those duties.” Plans and employees retain their rights to
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22-13051 Opinion of the Court 45
sue under ERISA. The fear of a speculative violation is no reason
to reject the settlement.
IV. CONCLUSION
We AFFIRM the judgment approving the settlement agree-
ment.