Anthem, Inc. (n/k/a WellPoint, Inc.) Summary: The class action lawsuit was filed on behalf of former members of Anthem Insurance Companies, Inc. ("Anthem Insurance") who received cash compensation in or about December 2001 when Anthem Insurance converted from a mutual to a stock insurance company. The conversion took place on November 2, 2001. The class action lawsuit alleges violations of the Securities Exchange Act of 1934 and Indiana statutes, breach of fiduciary duty and contract, unjust enrichment and negligence.
Specifically, the suit alleges Defendants made material misrepresentations and omitted material facts in documents sent to members who approved the conversion. To raise the cash needed to compensate former members for their interests, Anthem stock was sold in an initial public offering ("IPO") on October 30, 2001. Defendants reduced the price at which the IPO shares would be offered in order to sell almost twice as many shares as had been represented would be sold, thus raising almost twice as much cash. Defendants then allegedly took advantage of the cash compensation default mechanism in the Plan of Conversion and prevented hundreds of thousands of members from becoming Anthem shareholders. Defendants allegedly devised the scheme to save costs and avoid complexities associated with a large shareholder population. Since the cash compensation paid to former members was tied to the allegedly depressed IPO share price, all former members who were paid cash are alleged to have received inadequate compensation. In addition, Anthem and Anthem Insurance allegedly misinformed former members that the entire cash compensation was taxable capital gain income.
In December 2005, the case was transferred from the U.S. District Court for the Northern District of Ohio to the Southern District of Indiana. On January 31, 2006, a Second Amended Class Action Complaint was filed. On June 16, 2006, the Court entered the Order granting the motion to appoint lead plaintiff and approving lead plaintiff’s selection of lead counsel. On August 16, 2006, a Third Amended Complaint was filed, and on October 16, 2006, the defendants filed motions to dismiss the Third Amended Complaint.
On March 31, 2008, Judge David Frank Hamilton issued an Entry on Pending Motions stating that the court dismisses all the claims for violations of federal and state securities laws, for violations of the Indiana Demutualization Law, and for unjust enrichment under Rule 12(b)(6) for failure to state claims upon which relief can be granted. The court also dismisses the claims against Goldman Sachs for negligence and breach of contract, and the claims for negligent misrepresentation by Indiana plaintiffs. The claims that survive the motion to dismiss are the following: breach of fiduciary duty by Anthem Insurance, Anthem Holding, and Glasscock; negligence by Anthem Insurance, Anthem Holding, and Glasscock; breach of contract by Anthem Insurance and Anthem Holding; negligent tax advice by Anthem Insurance and Anthem Holding; and negligent misrepresentation by Anthem and Anthem Holding asserted by plaintiffs who are citizens of Ohio, Kentucky, and Connecticut. The court will not enter a partial final judgment at this time.
On July 28, 2008, the plaintiffs filed a motion for leave to file a Fourth Amended Class Action Complaint. On January 12, 2009, the Court issued the Order granting in part and denying in part the plaintiffs’ motion for leave to file a fourth amended class action complaint (Dkt. No. 96). Defendant Glasscock’s motion for judgment on the pleadings (Dkt. No. 91) is granted. Plaintiffs shall file no later than January 26, 2009 a clean copy of the fourth amended complaint.
On January 26, 2009, the plaintiffs filed a Fourth Amended Class Action Complaint. On February 23, 2009, the plaintiffs filed a motion to certify the class, and on September 29, 2009, the Court granted in part the plaintiffs’ motion.
On May 8, 2010, the defendants filed a motion for summary judgment. On March 29, 2011, the defendants filed a motion to decertify the class. On May 6, 2011, the plaintiffs filed a motion for partial summary judgment. The motion was granted in part and denied in part in July 1, 2011.
SIC Code: 6324
Industry: Insurance (Accident & Health)
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