Louisiana’s Attorney General filed suit against several property insurers, alleging that they conspired and colluded among themselves, and with co-defendants Xactware, Inc., Insurance Services Office, Inc., and McKinsey & Company Inc., to artificially reduce the value of property claims by manipulating a claim database used as an industry reference (see Expect Focus, Vol. I, Winter 2008). Following the defendants’ removal of the case to federal court, which was based on the jurisdictional provisions of CAFA, the plaintiff sought to have the case remanded to Louisiana state court, arguing that CAFA did not apply to the action because it was a “parens patriae” suit brought by the state on behalf of its citizens, rather than a true class action. The court denied the motion to remand, and the plaintiff appealed (see Expect Focus, Vol. II, Spring 2008). On July 18, 2008, the Fifth Circuit Court of Appeals affirmed the court’s decision, holding that a “parens patriae” action brought by a state attorney general constitutes a “class action” or “mass action” as those terms were intended to be construed under CAFA, and that the more flexible jurisdictional requirements under CAFA thus precluded a remand to state court.
The defendants have collectively filed a motion to dismiss the claims, asserting that the plaintiff’s antitrust claims under the Louisiana Monopolies Act are not legally sufficient because they fail to properly allege a conspiracy between the defendants, and they fail to allege any injury to competition, both of which, they argue, are required elements of such a claim. Plaintiff’s brief in opposition argues that the claims are sufficiently pled, that defendants improperly rely on federal pleading standards, and that under appropriate state pleading standards, the claims set forth the necessary facts to demonstrate a violation of the Louisiana Monopolies Act. No oral argument date has been set. Expect Focus will continue to monitor the case and report developments.