Martello v. Blue Cross

⁴⁶⁸ CHARLES E. MOYLAN, Jr., Judge, retired, specially assigned. After more than seven years, two amended complaints, two trial court decisions on first a motion to dismiss and then a motion for summary judgment, one prior appeal to this Court, one request for and denial of certiorari to the Court of Appeals, and countless other pleadings, hearings, depositions, and proffers of evidence, all of which are packed into a Joint Record Extract of some 2,100 pages, this litigation, like Dickens’s Jamdyce v. Jamdyce, continues to plod relentlessly on. It is perhaps a forlorn hope to believe that we can achieve a final resolution herein, but we shall at least aspire to that end. The subject matter of the appeal is an alleged violation by the appellees of the Maryland Antitrust Act, more particularly, a violation of Maryland Code, Commercial Law Article, Sect. 11 — 204(a)(1) and (2).

The appellant, Herbert H. Martel-lo, is appealing a grant of summary judgment against him and in favor of the appellees, 1) Blue Cross and Blue Shield of Maryland, Inc. (“Blue Cross”) and 2) the Electronic Data Systems Corporation (“EDS”), by Judge John F. Fader, II in the Circuit Court for Baltimore County. Following an earlier dismissal of this case by Judge Fader on October 30, 1996, the appellant filed a notice of appeal on November 4, 1996. The appeal was argued before a panel of this Court on June 6, 1997. On September 23, 1997, we filed an unreported but definitive 73 page per curiam opinion, affirming in part and reversing in part with a limited remand.

Martello v. Blue Cross, 117 Md.App. 746 (No. 1837, September Term, 1996) (‘Martello 1 ”). Much of the ground that we are now being asked to retraverse has been already thoroughly plowed. Who Are The Parties And What Do They Do? As to who the three parties to this litigation are and as to the roles they play in the health care insurance field, we cannot improve on the incisive descriptions provided by Mar- ⁴⁶⁹ tello I. First as to the appellant Herbert Martello himself and his business: Martello, a sole proprietor, operates a clearinghouse in Maryland that furnishes electronic connectivity services to health care providers.

These services include processing and electronic transmission of health care providers’ bills for medical services rendered, for which payment is due from responsible health care insurers. Ordinarily, both physicians and insurers pay a fee to the clearinghouses for these services. Martello I, p. 3 of slip opinion. To try to make our opinion more intelligible, a word is in order about the term of art “electronic connectivity.” It is not part of even the average lawyer’s everyday vocabulary.

A brief time-out is, therefore, in order before rushing forward with further discussion. After health care providers (essentially doctors) provide medical sendees (essentially diagnosis and treatment) to patients, they in many, if not most, instances submit on behalf of the patients applications to health care insurers to reimburse the health care providers for all or part of the medical service that has been rendered. Involved is a massive and potentially chaotic communications problem. To facilitate that flood of communication between the health care insurers and the health care providers, clearing houses have evolved to collect the applications for payment at one end of the line, to organize them and see that they are in proper form, and then to transmit them for payment to the insurers at the other end of the line.

In the trade, that collection and transmission function is called “connectivity.” As the health care insurance business developed, claims for reimbursement by the providers (e.g., the doctors) were originally submitted entirely on paper. In the 1980’s, however, a transition occurred from the submission of claims on paper to the more efficient submission of such claims electronically. Hence, we have the term of art now in vogue of “electronic connectivity.” ⁴⁷⁰ Both the appellant, Martello, and one of the appellees, EDS, are in the electronic connectivity business. They are, indeed, commercial competitors, and it is that circumstance which has given rise to this litigation. 'Blue Cross, by contrast, is essentially a health care insurer.

Martello I also described it and its basic functions: BCBS [Blue Cross Blue Shield], a non-profit Maryland corporation, is engaged in the business of health care financing. According to Martello, BCBS is Maryland’s largest health care insurer, controlling approximately 35% of the State’s commercial health insurance market. BCBS is the State’s sole Medicare Part A (hospital claims) contractor and, until January 1, 1995, it was the State’s sole Medicare Part B (physician’s claims) contractor. In addition to providing health insurance, BCBS serves in Maryland as the third party administrator for many self-funded health insurance plans.

The third party administrator market involves management of health plans for self-insured entities. According to appellant, BCBS is Maryland’s largest third party administrator. Although neither Martello nor EDS competes in that market in Maryland, EDS allegedly provides third party administrator services in other states, and has the capability of entering the Maryland third party administrator market. Martello I, pp. 3-4 of slip opinion.

EDS, like Martello, is a clearinghouse in the electronic connectivity business. Martello I described it: EDS, a Texas corporation, competes in Maryland with Martello in the electronic connectivity market. According to appellant, EDS is the “largest and most dominant” provider of electronic connectivity services in this State. Martello I, p. 4 of slip opinion.

Martello’s Complaint In a nutshell, Martello wanted at least a respectable chunk of Blue Cross’s electronic connectivity business and was aggrieved when in 1993 it all went to EDS.. . The nub of his ⁴⁷¹ complaint is that EDS has managed to corner the market of applications for reimbursement flowing upward from multitudinous health care providers to Blue Cross as the health care insurer. Martello I explained how EDS came to occupy that position: Until 1998, BCBS provided electronic connectivity services to itself, other health insurers, and health care providers in Maryland through its wholly owned, for-profit subsidiary, LifeCard International Inc. (“LifeCard”). BCBS paid LifeCard 18<p per electronic claim, and LifeCard secured additional revenue from other health care providers using its services; the other providers usually paid between 30<t and 55<f per claim.

BCBS withdrew from the electronic connectivity market in 1993 when it sold LifeCard to EDS; at that time, EDS renamed the clearing house the Maryland Health Information Network (“MHIN”). According to Martello, LifeCard had controlled at least 90% of the electronic connectivity market and MHIN assumed that position in February 1993. Martello I, pp. 4-5 of slip opinion. Martello originally brought suit against both Blue Cross and EDS on September 29, 1994 in a three-count complaint, alleging 1) restraint of trade in violation of Sect. ll-204(a)(l) of the Maryland Antitrust Act, 2) both attempt and conspiracy to monopolize in violation of Sect. ll-204(a)(2) of the act, and 3) tortious interference with a business relationship, in violation of the Maryland common law.

It later amended its complaint to include a charge of 4) illegal horizontal market allocation. On October 28, 1996, Judge Fader granted the motion of Blue Cross and EDS to dismiss the complaint and Martello filed his first appeal to this Court. The Holdings of Martello I In Martello I, we affirmed Judge Fader’s dismissal of the count charging an illegal horizontal market allocation. With respect to Count Two, alleging an unreasonable restraint of trade, we reversed the dismissal of that count and remanded for further proceedings. ⁴⁷² We reiterate that, for purposes of a motion to dismiss, we must assume the truth of Martello’s allegations.

We are satisfied that appellant sufficiently pleaded a claim for restraint of trade, because he alleged, inter alia, that appel-lees acted in concert in forming an agreement to eliminate competition in the electronic claims market in which Martel-lo competes. Whether Martello will prove what he alleges is altogether another question, for another day. Martello I, p. 60 of slip opinion. With respect to the third count that had charged Blue Cross and EDS with 1) monopoly, 2) attempted monopoly, and 3) conspiracy to monopolize, Martello I affirmed the dismissal with respect to both 1) monopoly and 2) attempted monopoly but vacated the dismissal as to conspiracy to monopolize on the rationale that Martello might be able to prove something other than a “conspiracy to engage in a predatory pricing scheme.” Appellant also lodged a claim for conspiracy to monopolize against BCBS and EDS.

His contentions in this regard are not limited solely to a conspiracy to engage in a predatory pricing scheme. In reviewing the court’s decision to grant a motion to dismiss, we are not concerned with whether the conspiracy is likely to succeed in enabling EDS to achieve a monopoly in the electronic connectivity market. We focus on allegations of a “conscious commitment to a common scheme designed to achieve an unlawful objective.” Martello I, pp. 78-79 of slip opinion. We also vacated the dismissal of Count Four, alleging a Malicious Interference with Business Relations in Violation of the Common Law of Maryland, solely on the ground that its resolution was contingent on the resolution of other counts charging, in various ways, the unlawful restraint of trade. [T]he parties seem to agree that the viability of count four depends upon the resolution of the appeal with respect to counts one, two, and three. ⁴⁷³ ... [C]ompetition may constitute improper interference with a prospective contractual relationship, if the competitive action is undertaken, inter• alia, to further an unlawful restraint of trade. [Natural Design, Inc. v. ]Rouse, 302 Md. [47] at 73[, 485 A.2d 663 (1984)].

Moreover, conduct that violates the Act may, at the same time, “constitute the Maryland common law tort of malicious interference with the plaintiffs’ business.” Id. at 74, 485 A.2d 663 . Martello I, pp. 63-64 of slip opinion. Proceedings on Remand Following the remand in the wake of Martello I, the appellant filed his Second Amended Complaint on June 25, 1998. Obstinately, Count One of that Second Amended Complaint recharged precisely the same Restraint of Trade by Horizontal Market Allocation in Violation of Maryland Antitrust Act, Commercial Law Article, Sect. ll-204(a)(l), that had earlier been dismissed by Judge Fader in 1996, and which dismissal had been expressly affirmed by us in Martello I. In any event, on March 28, 2001, Judge Fader granted summary judgment in favor of Blue Cross and EDS on all counts and this appeal by Martello has timely followed.

Approaching the Present Contentions It would normally be appropriate at this point in the opinion to lis t the appellant’s present five contentions. We deliberately refrain from doing so. Some of Martello’s arguments are so high octane in outrage and so free-wheeling as they careen from one doctrinal lane into another as to make it almost impossible to get a firm grip on them. They badly need taming.

We seem to have before us a largely undifferentiated sense of grievance searching for a supportive legal theory. To help clear our field of vision, we find it convenient to dispose of, preliminarily, several of Martello’s more peripheral contentions. This will at least eliminate some of the clutter ⁴⁷⁴ before we undertake to zero in on the core contentions that allege violations of the Maryland Antitrust Act. Horizontal Allocation of the Market And the Law of the Case The fifth and final of the appellant’s contentions is that “this Court erred in Martello I when it denied Martello standing in the per se product market allocation count.” We are being asked to revisit an issue we thought we had resolved in Martello I. Mercifully, it is not necessary for us to do so.

Quite aside from showing incredible hubris, this remarkable contention ignores the law of the case doctrine. As stated in Fidelity-Baltimore Nat’l Bank & Trust Co. v. John Hancock Mut. Life Ins. Co., 217 Md. 367, 372 , 142 A.2d 796 (1958): “Once this Court has ruled upon a question properly presented on an appeal, or, if the ruling be contrary to a question that could have been raised and argued in that appeal on the then state of the record, as aforesaid, such a ruling becomes the ‘law of the case,’ and is binding on the litigants and courts alike, unless changed or modified after reargmnent, and neither the questions decided nor the ones that could have been raised and decided are available to be raised in a subsequent appeal.” (Emphasis supplied).

That doctrine applies, of course, whether the law of the case has been announced by the Court of Appeals or by this Court. Kline v. Kline, 93 Md.App. 696, 700 , 614 A.2d 984 (1992); Roane v. Washington County Hospital, 137 Md.App. 582, 587-88 , 769 A.2d 263 (2001). Although the court that originally announces what then becomes the law of the case may no doubt, sua sponte, later rethink its earlier position, the appellant is not legally entitled to such a reconsideration. The correctness of what we said in Martello I, moreover, is not the issue before us.

The appeal, by its very nature, alleges that it was Judge Fader who was in error in not reconsidering the position taken on this issue by Martello I. That, of course, was not his ⁴⁷⁵ prerogative. Commendably, he followed the dictates of Mar-tello I and that cannot be error on the part of the trial judge. Quite aside from the preclusive effect of the law of the case doctrine, we reaffirm, even if redundantly, that what we earlier said in Martello I is still eminently correct. It is evident, however, that Martello does not complain about a horizontal allocation of territorial markets.

Rather, he asserts that the parties have allocated product markets, by which they agreed to give the electronic claims market to EDS and the third party administration market to BCBS. None of the cases cited by appellant concerns horizontal allocation of products. Assuming that a claim of horizontal market allocation may be based on the division of products, and not merely territories, we nonetheless agree with the trial court that Martello’s allocation claim falls short of the mark. Martello I, pp. 25-26 of slip opinion (emphasis supplied).

Martello I held further that the appellant, as a non-consumer, had no standing to raise the claim. We are equally convinced that MaHello has not stated a claim based on horizontal market allocation, because he has failed to set forth a factual basis to support a claim of antitrust injury. To be sure, the division of product markets between BCBS and EDS necessarily reduced the number of Martello’s competitors in the electronic connectivity market; absent the Agreement, Martello would have faced competition from both EDS and BCBS. But it is unlikely that Martello suffered an antitrust injury based on conduct that may have reduced the number of his ^competitors.

Moreover, because he is not a, consumer in the electronic connectivity market, he also is not injured by any increase in prices stemming from the elimination of BCBS as a competitor. On the contrary, he would benefit from an increase in prices flowing from a reduction in competition. Nor does he compete in the third party administrator market allegedly allocated to BCBS. ⁴⁷⁶ Martello I, pp. 36-37 of slip opinion (emphasis supplied). See also Quality Discount Tires v. Firestone Tire & Rubber Co., 282 Md. 7, 23, 382 A.2d 867 (1978); Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 582-83 , 106 S.Ct. 1348 , 89 L.Ed.2d 538 (1986).

We hereby reaffirm our bottom line conclusion on this issue at page 40 of the slip opinion. Because Martello was not harmed by the horizontal market division, the trial court properly dismissed the restraint of trade claim in count one. (Emphasis supplied). A Contingent Claim: Tortious Interference With a Business Relationship Martello’s fourth and penultimate contention can also be readily disposed of.' Both in his pre-Martello I original complaint and his post-Martello I Second Amended Complaint, Martello claimed that Blue Cross and EDS had maliciously interfered with his business relations in violation of the common law of Maryland.

In dismissing the entire complaint in 1996, Judge Fader necessarily dismissed this count. The propriety of that dismissal was one of the issues before us in Martello I. We there cited Natural Design, Inc. v. Rouse, 302 Md. 47, 69 , 485 A.2d 663 (1984), for the proposition that where the tort of interference with a business relationship does not consist of inducing the breach of an existing contract by one of the contracting parties to the detriment of the other contracting party, it requires that the tortfeasor “maliciously or wrongfully interfere with economic relationships in the absence of a breach of contract.” When the tort is of that latter type, Rouse , quoting from Willner v. Silverman, 109 Md. 341, 355 , 71 A. 962 (1909), explained that it consists of the following elements: “ ‘(1) intentional and wilful acts; (2) calculated to cause damage to the plaintiffs in their lawful business; (3) done with the unlawful purpose to cause such damage and loss, ⁴⁷⁷ without right or justifiable cause on the part of the defendants (which constitutes malice); and (4) actual damage and loss resulting.’ ” 302 Md. at 71 , 485 A.2d 663 . The key element for our purposes in Martello I was the third, “which constitutes malice.” In Rouse , Judge Eldridge pointed out that “legal malice means ‘a wrongful act done intentionally without just cause or excuse’ ” and that “an act has been deemed malicious if it is unlawful.” 302 Md. at 71 , 485 A.2d 663 . The mere fact that Martello might have suffered from EDS’s aggressive business tactics would not be enough to constitute the tort.

As Judge Eldridge in Rouse further pointed out: One recognized ground of “just cause” for damaging another in his business is competition. As this Court noted in Goldman v. [Harford Road] Building Assn., supra, 150 Md. [677] at 684, 133 A. 843 [1926]: “ ‘Iron sharpeneth iron’ is ancient wisdom, and the law is in accord in favoring free competition, since ordinarily it is essential to the general welfare of society, notwithstanding competition is not altruistic but is fundamentally the play of interest against interest, and so involves the interference of the successful competitor with the interest of his unsuccessful competitor in the matter of their common rivalry. Competition is the state in which men live and is not a tort, unless the nature of the method employed is not justified by public policy, and so supplies the condition to constitute a legal wrong.” 302 Md. at 72-73 , 485 A.2d 663 . The only unlawful act alleged by Martello to satisfy the malice requirement was his claim that Blue Cross and EDS had engaged in an unlawful combination to restrain trade.

The Court of Appeals in Rouse had held that such an unlawful restraint of trade, if established, would satisfy the malice requirement of the common law tort. ⁴⁷⁸ We agree that the defendants’ acts, if proven to be part of a price-fixing combination in violation of the Maryland Antitrust Act, would also constitute the Maryland common law tort of malicious interference with the plaintiffs’ business. Under these circumstances, the acts would be unlawful and thus improper. 302 Md. at 74 , 485 A.2d 663 . Because we also held in Martello I that two counts charging a restraint of trade were still viable, the common law tort which could be predicated upon them was ipso facto also still viable. Because count four is based on the same conduct of which Martello complains in counts two and three, Martello has alleged all the elements as articulated in Willner [v. Silverman, 109 Md. at 355 , 71 A. 962 ].

As we have determined that Martello may go forward on count two, and that dismissal without prejudice is appropriate with respect to certain claims in count three, we shall also reverse the dismissal of count four. Martello I, p. 64 of slip opinion. It was clear that the viability of this fourth count was contingent on the viability of the other counts claiming the unlawful restraint of trade. It had no other predicate on which to stand. [T]he parties seem to agree that the viability of count four depends upon the resolution of the appeal with respect to counts one, two, and three.

Martello I, p. 63 of slip opinion. Because we have already held that the count charging a horizontal allocation of the market was properly dismissed and because we are further holding, for reasons yet to be discussed, that all other counts charging an unlawful restraint of trade were inadequate to withstand summary judgment against them, it follows that the count charging the common law tort of interference with a business relationship similarly cannot withstand an adverse summary judgment. ⁴⁷⁹ The viability of that count was dependent on a contingency and the contingency never came to pass. The count, therefore, was in the last analysis supported by nothing. The Remaining Contentions The remaining three contentions engage the gears of the Maryland Antitrust Act.

Those contentions are: 1. that the circuit court erred when it rejected as a matter of law Martello’s alternative and non-traditional recoupment theory; 2. that the circuit court erred when it rejected as a matter of law Martello’s claim of a conspiracy between Blue Cross and EDS to restrain trade because of his failure to prove traditional recoupment; and 3. that the circuit court erred when it disregarded this Court’s holding in Martello I that Martello need not prove recoupment in his conspiracy claim against BCBS and EDS. The Maryland Antitrust Act In seeking to pinpoint some unlawful act on the part of Blue Cross and EDS, Martello has invoked two provisions of the Maryland Antitrust Act. The Maryland Act is a product of ch. 357 of the Acts of 1972. As its statement of purpose makes clear, it is modeled on the federal Sherman Antitrust Act of July 2, 1890 (26 U.S. Stat. 209, 15 U.S.C. Sects. 1 through 7) and subsequent amendments to that act.

Maryland Code Annotated, Commercial Law Article, Sect. ll-202(a)(l) and (2) makes it very clear that for our intrastate purposes we look to the federal interstate analogue for guidance. (a) Pmpose, interpretation, and construction. — (1) The General Assembly of Maryland declares that the purpose of this subtitle is to complement the body of federal law governing restraints of trade, unfair competition, and unfair, deceptive and fraudulent acts or practices in order to protect the public and foster fair and honest intrastate competition. ⁴⁸⁰ (2) It is the intent of the General Assembly that, in construing this subtitle, the courts be guided by the interpretation given by the federal courts to the various federal statutes dealing with the same or similar matters, including [the Sherman Antitrust Act of 1890 and subsequent amendments to that act.] Martello relies on two provisions of the Maryland Antitrust Act. The first is Sect. ll-204(a)(l), which provides: (a) Prohibited conduct. — A person may not: (1) By contract, combination, or conspiracy with one or more other persons, unreasonably restrain trade or commerce. That provision is essentially the same as Sect. 1 of the Sherman Act.

Cavalier Mobile Homes Inc. v. Liberty Homes Inc., 53 Md.App. 379, 384-85 , 454 A.2d 367 (1983); Greenbelt Homes Inc. v. Nyman Realty Inc., 48 Md.App. 42, 48 , 426 A.2d 394 (1981). The second provision relied on is Sect. ll-204(a)(2), which provides: (a) Prohibited conduct. — A person may not: (2) Monopolize, attempt to monopolize, or combine or conspire with one or more other persons to monopolize any part of the trade or commerce within the State, for the purpose of excluding competition or of controlling, fixing, or maintaining prices in trade or commerce. That provision is essentially the same as Sect. 2 of the Sherman Act. Natural Design Inc. v. Rouse, 302 Md. 47, 53-60 , 485 A.2d 663 (1984).

The Acts Complained Of Martello’s fundamental problem is that of making any of the acts he complains of fit into the mold of anything forbidden by the Maryland Antitrust Act. In Martello I, slip opinion at p. 1, we summarized the factual substance of the complaint. In his suit, Martello asserted that BCBS agreed to pay EDS an inflated amount for each electronic claim processed by EDS. Martello further alleged that BCBS’s payments ⁴⁸¹ constituted the quid pro quo for EDS’s agreement not to compete with BCBS.

Moreover, he contended that BCBS’s excessive payments were used by EDS to finance a predatory pricing scheme by which EDS offered electronic connectivity services to health care providers, without charge, for claims transmitted to BCBS. In this so called “zero-price campaign”, EDS electronically sent to BCBS for payment the bills generated by the health care providers for services they rendered to BCBS’s insureds. As we flesh out the complaint in a bit more detail, it behooves us to remember that the only market we are concerned with for antitrust purposes is the electronic connectivity market. Blue Cross is a health care insurer, a business for which Martello does not compete.

Since 1993, Blue Cross has not been in the electronic connectivity business. It is hard to see how any action of Blue Cross, as a customer of the electronic connectivity providers, has any pertinence to an alleged antitrust law violation. Our focus must be on EDS and on the likely impact that its actions will have 1) first on EDS’s competitors in the electronic connectivity market and 2) then on the customers for electronic connectivity services. Prior to 1993, Blue Cross handled its own connectivity activities through its wholly owned subsidiary LifeCard International, Inc., which received an average payment of 16<í per claim from Blue Cross plus an unspecified sum per claim from the various health care providers.

In 1993 LifeCard was sold to EDS. As part of a ten year agreement between Blue Cross and EDS, EDS became the electronic connectivity provider for Blue Cross and would be paid for that, and related services, at a rate of 65c per claim. EDS also agreed not to compete with Blue Cross in Maryland in the third party administrative market. Martello’s incendiary allegation that Blue Cross’s “inflated” payments of 65o: per claim to EDS were actually a “bribe” for EDS not to compete in that field is the charge of a circumstance that is extraneous to our analysis.

If EDS’s action does not, in and of itself, constitute an antitrust law violation, it matters not ⁴⁸² that Blue Cross, for whatever reason, aided and abetted in an unoffending action. EDS also agreed not to require any payments from the health care providers themselves. According to the evidence presented to Judge Fader, this arrangement was part of a trend going on throughout Maryland and nationwide whereby the health care insurers began picking up all of the costs for electronic connectivity services. This transfer of costs was in part to encourage smaller health care providers, hesitant to incur an additional expense themselves, to switch from submitting claims on paper to submitting them electronically.

The new cost arrangement is now essentially universal in the electronic connectivity business. The gist of Martello’s complaint, as a factual matter, is that Blue Cross, an electronic connectivity customer, was paying EDS far more per claim than the service was worth and that EDS, in turn, no longer charged the health care providers anything for the electronic connectivity service. Martello’s problem is how to make an antitrust case out of that. Whom Do Antitrust Laws Seek to Protect?

Because the subject matter of this case is not daily grist for the Maryland appellate mill, it behooves us 1) carefully to get our own bearings and 2) then to identify, as best we can, those bearings for the benefit of the reader. Martello is alleging and is attempting to prove that Blue Cross and EDS violated Maryland antitrust law. He relies on Sect. ll-204(a)(l) and (2) of the Commercial Law Article, enacted by Sect. 3 of ch. 49 of the Acts of 1975. Those two closely related subsections, but for substituting intrastate commerce for interstate commerce, track almost precisely Sects. 1 and 2 of the federal Sherman Antitrust Act of July 2, 1890 (ch. 647), as amended by the Clayton Act of October 15, 1914 (ch. 323) and the Robinson-Patman Act of August 17, 1937 (ch. 690).

On a number of occasions the Supreme Court of the United States has stated precisely what actions and consequences Sects. 1 and 2 of the Sherman Act ⁴⁸³ were designed to prevent and has laid out emphatically the required elements that must be proved to establish a violation of those antitrust law provisions. As we look to the Supreme Court cases for guidance, our problem in attempting to get a firm handle on Martello’s remaining contentions is that they do not even seem to be in the right church, let alone in the right pew. At the most basic level, Martello is aggrieved that he was unable to compete more effectively with EDS for Blue Cross’s electronic connectivity business. He does not even mention competing with EDS lor electronic connectivity business with numerous customers other than Blue Cross.

Martello complains that EDS, allegedly aided and abetted by Blue Cross, enjoyed unfair competitive advantages over him. Martello’s problem is that he cannot confect out of his general sense of grievance anything that resembles an antitrust violation. It is clear that antitrust laws are designed not to protect an individual competitor, such as Martello, but only to protect competition itself, so that a non-competitive monopoly may not with impunity raise prices to the ultimate detriment of the consuming market. The general statement of purpose of antitrust legislation was succinctly articulated by Brooke Group v. Brown and Williamson, 509 U.S. 209, 224 , 113 S.Ct. 2578 , 125 L.Ed.2d 168 (1993).

That below-cost pricing may impose painful losses on its target is of no moment to the antitrust laws if competition is not injured: It is axiomatic that the antitrust laws were passed for “the protection of competition, not competitors.” Brown Shoe Co. v. United States, 370 U.S. 294, 320 , 82 S.Ct. 1502 , 8 L.Ed.2d 510 (1962). (Emphasis supplied). Cargill, Inc. v. Monfort of Colorado, 479 U.S. 104, 116 , 107 S.Ct. 484 , 93 L.Ed.2d 427 (1986), emphasized that antitrust laws are not intended to protect individual competitors. To hold that the antitrust laws protect competitors from the loss of profits due to such price competition would, in effect, render illegal any decision by a firm to cut prices in order to ⁴⁸⁴ increase market share.

The antitrust laws require no such perverse result, for “[i]t is in the interest of competition to permit dominant firms to engage in vigorous competition, including price competition.” Brooke Group v. Brown and Williamson, 509 U.S. at 225 , 113 S.Ct. 2578 , made it clear that it is only the “dangerous probability” of monopoly that the antitrust laws guard against. [I]t [is] not enough to inquire “whether the defendant has engaged in ‘unfair’ or ‘predatory’ tactics”; rather, we insisted that the plaintiff prove “a dangerous probability that [the defendant] would monopolize a particular market.” (Emphasis supplied). The Supreme Court went on, 509 U.S. at 225 , 113 S.Ct. 2578 , to stress that antitrust law is not a shield against unfair competition. “Even an act of pure malice by one business competitor against another does not, without more, state a claim under the federal antitrust laws; those laivs do not create a federal law of unfair competition or ‘purport to afford remedies for all torts committed by or against persons engaged in interstate commerce.’ ” (Emphasis supplied). Predatory Pricing, Monopolization, And Recoupment The evil that the antitrust laws guard against is one that emerges in three successive stages. The first stage occurs in a theretofore competitive market when an avaricious competitor, with deep financial resources, engages in predatory pricing, to wit, it sustains for some extended period of time a calculated loss by charging inordinately low prices below the cost of doing business so as to drive less well financed competitors totally out of the field.

The second stage is realized when the predatory pricer, having driven the competition from the field, enjoys monopoly or near-monopoly status and is thereby in a position to dominate the field and its pricing structure. ⁴⁸⁵ The third stage follows immediately from the second. The predatory pricer, now enjoying monopoly status, sets out to recoup its earlier investment, to wit, the calculated losses it sustained, by charging supra-competitive high prices to a market helpless to find alternative sources for the desired and needed product. Although the three stages are closely related, the focus in given cases may sometimes be on one and sometimes on another. The burden is on a plaintiff alleging an antitrust violation to establish each of these three elements: 1) predatory, below cost, pricing in the first instance; 2) as a consequence, a dangerous probability that the predatory pricer will achieve monopoly status; and 3) the probability that that monopoly status will be maintained long enough for the predatory pricer to achieve a financial recoupment of its earlier investment.

Martello’s case was fatally inadequate in all three regards. Although the discussion both before Judge Fader and before this Court in Martello I and in the present appeal has been phrased largely in the language of “recoupment,” that recoupment discussion has been broad enough to engage the gears of all three stages of an alleged antitrust law violation. Predatory Pricing Matsushita Elec. Ind.

Co. v. Zenith Radio, 475 U.S. 574 , 584 n. 8, 106 S.Ct. 1348 , 89 L.Ed.2d 538 (1986), described predatory pricing. Throughout this opinion, we refer to the asserted conspiracy as one to price “predatorily.” This term has been used chiefly in cases in which a single firm, having a dominant share of the relevant market, cuts its prices in order to force competitors out of the market, or perhaps to deter potential entrants from coming in.... In such cases, “predatory pricing” means pricing below some appropriate measure of cost. ⁴⁸⁶ In Cargill, Inc. v. Monfort of Colorado, Inc., 479 U.S. 104, 117-18 , 107 S.Ct. 484 , 93 L.Ed.2d 427 (1986), Justice Brennan addressed the same phenomenon. Predatory pricing may be defined as pricing below an appropriate measure of cost for the purpose of eliminating competitors in the short run and reducing competition in the long run.

It is a practice that harms both competitors and competition. In contrast to price cutting aimed simply at increasing market share, predatory pricing has as its aim the elimination of competition. Predatory pricing is thus a practice “inimical to the purposes of [the antitrust] laws.” (Emphasis supplied). The alleged predator, in the case before us, EDS, must be charging a price that is below his cost of doing business, to wit, he must be sustaining a deliberate and calculated financial loss by charging a low price that his competitors cannot afford to match.

Brooke Group Ltd. v. Brown and Williamson, 509 U.S. 209, 222-23 , 113 S.Ct. 2578 , 125 L.Ed.2d 168 (1993), spoke to this requirement. [A] plaintiff seeking to establish competitive injury resulting from a rival’s low prices must prove that the prices complained of are below an appropriate measure of its rival’s costs. ... [T]he reasoning in both [Cargill Inc. v. Monfort of Colorado and Matsushita Elec. Ind. Co. v. Zenith Radio ] suggests that only below-cost prices should suffice, and we have rejected elsewhere the notion that above-cost prices that are below general market levels or the costs of a firm’s competitors inflict injury to competition cognizable under the antitrust laws. “Low prices benefit consumers regardless of how those prices are set, and so long as they are above predatory levels, they do not threaten competition.... ” As a general rule, the exclusionary effect of prices above a relevant measure of cost either reflects the lower cost structure of the alleged predator, and so represents competition on the merits. (Emphasis supplied).

The immediately apparent and fatal flaw in Martello’s allegation of an antitrust violation is that there was no preda ⁴⁸⁷ tory pricing in this case. As we assess the competitive nature of Maryland’s electronic connectivity market, the price that concerns us is the unit price for each “connection,” that is, the price per transmittal of a claim for reimbursement from a health care provider to a health care insurer.1 It is the price charged by an electronic connectivity provider, such as EDS, to the customers who are then placed in communication with each other. It is a price that may be charged to 1) the customers at the receiving end of the transmission, health care insurers such as Blue Cross; 2) the customers at the sending end of the transmission, the health care providers; or 3) the customers at both ends of the transmission in some cost-sharing combination. As we look at the ability of electronic connectivity providers to compete with each other, it does not matter who pays their price.

It only matters what price they are charging. Our concern is with the price charged by EDS, to somebody, for each such transmittal or connection so that we may compare EDS’s price with EDS’s cost. At the time pertinent to this review, the price charged by EDS was 65tc per electronic claim. The price was paid exclusively by Blue Cross, so that the health care providers were not required to pay anything for transmitting their claims.

The evidence proffered before Judge Fader indicated that this was part of a statewide and, indeed, nationwide trend for health care insurers,