St. Paul Fire & Marine Insurance v. Barry

Background

A group of licensed doctors and some patients sued the four companies that sold medical malpractice insurance in Rhode Island. They alleged that after the largest insurer changed its policy terms, the other insurers collectively refused to sell any coverage to that insurer’s customers to force the customers to accept the new terms. A federal trial court dismissed the antitrust claim based on a law that generally leaves insurance regulation to the states; an appeals court reversed, and the issue reached the high court.

Reasoning

The central question was whether the McCarran-Ferguson Act’s exception for “boycott, coercion, or intimidation” keeps federal antitrust law alive when insurers act together against policyholders. The Court read the statute’s wording, its history, and its structure and concluded that a “boycott” can include a concerted refusal to deal with customers. Because the insurers allegedly agreed to deny their competitors’ customers any alternative coverage and did so outside state authorization, the Court held the complaint states a claim under the boycott exception.

Real world impact

The decision means doctors and other insureds may bring federal antitrust claims when insurers coordinate to cut off access to needed coverage. The ruling preserves the primary role of state insurance regulation but makes room for federal review of private, coercive schemes by insurers. The Court left other questions—like damages claims and conduct authorized by state law—for lower courts to resolve.

Dissents or concurrances

A dissent argued the boycott clause was meant more narrowly to reach only those acts aimed at disciplining other insurers or agents, and would have reversed the appeals court.