United States v. Delta Dental

943 F. Supp. 172 (1996)

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United States v. Delta Dental

United States District Court for the District of Rhode Island
943 F. Supp. 172 (1996)

Facts

The United States (plaintiff) brought a lawsuit against Delta Dental (defendant), alleging antitrust violations under the Sherman Act. According to the United States, Delta Dental—which provided dental insurance—used most-favored-nation (MFN) clauses in multiple agreements with multiple healthcare providers in such a way that it prevented other competing insurance providers from charging lower prices. The United States alleged that Delta Dental used MFN clauses to exclude alternative, lower-fee plans from the dental-insurance market, and that this had resulted in sustained or increased premiums. Furthermore, the United States alleged that no competitive benefits resulted from using these MFN clauses. The United States did not, however, allege that the MFN clauses resulted in predatory pricing or pricing below incremental cost. Delta Dental moved to dismiss the lawsuit for failure to state a claim, arguing that in the absence of any predatory pricing or pricing below incremental cost, MFN clauses were automatically valid.

Rule of Law

Issue

Holding and Reasoning (Pettine, J.)

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