Antitrust

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The Antitrust Division of the Department of Justice has concluded that competition in the insurance market is likely to be enhanced, rather than harmed, by a proposed consortium of commercial insurers who will pool their resources to offer large commercial insurance policies worth a minimum of $250 million. 

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In a case that potentially raises substantial constitutional issues regarding rate-setting with respect to auto body repair labor rates, the Rhode Island Supreme Court granted petitions for a writ of certiorari filed by the Property Casualty Insurers’ Association of America (“PCI”) and the Department of Business Regulation (“DBR”) on October 9, 2008. …

In its August 2008 opinion, the Court of Appeals for the Eighth Circuit upheld a lower court decision granting the defendant insurers’ motion to dismiss on the grounds that plaintiffs’ price discrimination claims would “impair” the Missouri laws that regulate the “business of insurance” within the meaning of the McCarran-Ferguson Act. 

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On November 7, 2007, former Louisiana Attorney General Charles C. Foti, Jr. filed a lawsuit in the Civil District for the Parish of Orleans alleging that under Louisiana’s antitrust laws certain insurers and insurance industry participants fixed prices, manipulated damage estimates and low-balled claims payments after hurricanes Katrina and Rita. 

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A New York based radiology practice (the “Plaintiff”) filed an action in the United States District Court for the Eastern District of New York against a benefits administration firm, CareCore National, LLC, that provides services for insurers including Aetna, GHI, HIP, Healthnet, Healthfirst, and Oxford. 

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On November 16, 2006, Financial Security Assurance Holdings Ltd. (“FSAH”) received subpoenas from the Securities and Exchange Commission and the Antitrust Division of the U.S. Department of Justice issued in connection with ongoing civil and criminal investigations of brokers, financial institutions and bond insurers suspected of bid rigging awards of municipal guaranteed investment contracts (“GICs”). 

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Financial Security Assurance Holdings Ltd.’s (“FSA”) bond insurance unit reported in an 8-K filed February 4, 2008, that the U.S. Securities and Exchange Commission (the “SEC”) may bring a complaint against the company as part of an investigation into whether bids were rigged on investment contracts with local governments. 

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On June 1, 2005, after a jury trial lasting over three weeks, a jury found for Blue Cross Blue Shield of Massachusetts (“BCBS-MA”), Blue Cross Blue Shield of Minnesota (“BCBS-MN”), Federated Mutual Insurance Company (“Federated”), and Health Care Service Corporation (“HCSC”) (collectively “Plaintiffs”) against Mylan Laboratories Inc. and Mylan Pharmaceuticals Inc., Cambrex Corporation, and Gyma Laboratories (“Defendants”) on state law claims –  agreement in unreasonable restraint of trade; conspiracy in unreasonable restraint of trade; monopolization; and, attempted monopolization – in the Lorazepam active pharmaceutical ingredient (“API”) market, Lorazepam tablet market and in the Clorazepate API and tablet markets.  The jury awarded BCBS-MA $8,430,887, BCBS-MN $1,756,096, Federated $410,878.00, and HCSC $1,448,437.00 in damages. …