Appeal from the United States District Court for the Southern District of Florida. (No. 94-8343-CIV-KLR). Kenneth L. Ryskamp, Judge.
Before Hatchett and Black, Circuit Judges, and Clark, Senior Circuit Judge.
This appeal presents the issue of whether certain business practices in the insurance industry limit competition in the temporary help industry through monopolization or constitute an agreement in restraint of trade in violation of the Sherman Act. We affirm the district court's ruling that the business practices employed in this case do not violate the Sherman Act.
Uniforce Temporary Personnel, Inc. and Uniforce Services, Inc. (collectively Uniforce) engage in the business of providing temporary employees for other businesses. In order for Uniforce to place its employees with businesses, Uniforce must first obtain workers compensation insurance. Generally, businesses can obtain workers compensation insurance for their employees through one of three markets: (1) the voluntary market, (2) the self-insurance market, and (3) the "assigned risk" or residual market. Uniforce, however, only qualifies for workers compensation insurance from the residual market. The insurance industry calls such workers compensation policies "assigned risk" policies.
Policyholders of "assigned risk" policies pay higher insurance premiums than policyholders of policies obtained through the voluntary or self-insurance market. The premiums are higher because of the combined loss experience of the insurance carriers in the residual market and because these carriers oftentimes contract their duties under the "assigned risk" policies to other insurance carriers called "servicing carriers." These servicing carriers draft the "assigned risk" policies, collect the premiums, provide loss control services, and perform other services required of a worker's compensation carrier. In return for these services, the insurer pays substantial servicing fees.
On June 15, 1994, Uniforce filed this lawsuit against the National Council on Compensation Insurance, Inc. (NCCI), the National Workers Compensation Reinsurance Pool (the pool), and insurance companies Liberty Mutual Insurance Company, Travelers Insurance Company, and Insurance Company of North America (collectively insurance carriers), alleging that their business practices in the insurance industry limit competition in the temporary help industry through monopolization of the administration of workers compensation insurance and price fixing in violation of 15 U.S.C. § 2 of the Sherman Act.
In its complaint, Uniforce also alleges that NCCI, the pool, and the insurance carriers' conduct constitutes an agreement in restraint of trade including a conspiracy to restrain the temporary help industry in violation of 15 U.S.C. § 1 of the Sherman Act.*fn1 In addition, Uniforce sought a declaratory judgment on the issue of whether NCCI and the pool are insurance carriers and a judgment declaring the state that has overall responsibility for regulating and supervising the business of NCCI and the pool as it affects the temporary help industry.
Prior to discovery, NCCI, the pool, and insurance carriers (hereinafter appellees) moved for summary judgment on the grounds that: 1) the McCarran-Ferguson Act bars Uniforce's federal antitrust claims because the alleged activity involves the business of insurance; and 2) Uniforce fails to state a claim under the Sherman Act. The district court granted summary judgment on each of Uniforce's claims.*fn2
Uniforce contends that the McCarran-Ferguson Act's bar on antitrust claims involving the business of insurance does not apply in this case because the appellees' rate-making, classification and allocation of risk, and other activities involving the administration of workers compensation insurance concern the "business of insurers" and not the "business of insurance." In the alternative, Uniforce contends that its antitrust claims fall within the "boycott" exception to the McCarran-Ferguson Act's bar on antitrust claims. Uniforce also contends that the district court erred in concluding that it failed to state a claim under the Sherman Act merely because appellees do not compete in the temporary help industry.
Appellees contend that the activities Uniforce complains of fall squarely within the meaning of "the business of insurance." Appellees also contend that Uniforce fails to allege facts sufficient to constitute a boycott within the meaning of the McCarran-Ferguson Act and therefore assert that the McCarran-Ferguson Act bars Uniforce's antitrust claims. Finally, even assuming that the McCarran-Ferguson Act does not bar Uniforce's claims, the appellees contend that their practices in the ...