Nearly three years after a New Jersey district court dismissed all claims in In re Insurance Brokerage Antitrust Litigation, the Third Circuit Court of Appeals revived a portion of the class action antitrust conspiracy claims. This litigation arose following the 2004 investigation and enforcement action filed by then-New York Attorney General, Elliot Spitzer. Spitzer’s complaint, alleging that insurance broker Marsh and McLennan “had solicited rigged bids for insurance contracts, and had received improper contingent commission payments in exchange for steering its clients to a select group of insurers,” spawned a number of private lawsuits that were ultimately consolidated into this multidistrict litigation.
The Third Circuit’s August 16, 2010 ruling agreed with the district court’s decision to dismiss most of plaintiffs’ claims, finding that, under antitrust law’s heightened pleading requirements, the complaint’s allegations did not “provide plausible grounds to infer a horizontal agreement” between the insurers to protect each other’s business. However, the court reversed on the issue of whether plaintiffs adequately pled conspiracy between Marsh and the insurers with whom it had entered into contingent commission agreements.
The Court of Appeals also supported the district court’s holding that the defendants’ conduct was not exempt under the McCarran-Ferguson Act, concluding that plaintiffs’ allegations did not concern whether or to what extent a prospective insurance purchaser would transfer risk to an insurer, but merely to which insurer that risk would be transferred. As such, the conduct did not constitute “the business of insurance,” a necessary requirement for McCarran protection.
The parties now return to the district court to resume discovery and further litigation on plaintiffs’ surviving claims.