U.S. Healthcare, Inc. v. Blue Cross of Greater Philadelphia

As HMOs grew popular, Blue Cross of Greater Philadelphia (defendant) launched a competing "Personal Choice" program and ran ads claiming HMO doctors were financially motivated to avoid referring patients to specialists, including one showing a distraught woman blaming her HMO for inadequate hospital care; U.S. Healthcare (plaintiff), an HMO, responded with its own ads claiming Blue Cross's program offered only a limited set of hospitals, including one depicting a grieving family around an empty hospital bed. U.S. Healthcare sued, and the district court held the First Amendment required both parties to prove actual malice to prevail; both sides cross-appealed.