November 20, 2014
November 19, 2014
November 18, 2014
In Re Insurance Brokerage Antitrust Litigation Finally Concludes
After almost nine years of litigation, on August 1, New Jersey District Court Judge Claire Cecchi finally brought to a close one of the highest profile antitrust cases of the new millennium – In re Insurance Brokerage Litigation – with her approval of the final settlement in the action.
The case, a consolidated multi-district litigation commenced in 2005 against insurance broker Marsh & McLennan and approximately two dozen of the nation’s largest insurers and brokers, was the outgrowth of an action brought by then-New York Attorney General Eliot Spitzer against Marsh for allegedly soliciting payments from the insurers to steer business from their clients to those insurers. Shortly after Marsh announced a settlement of the matter with the State (which included the elimination of undisclosed “contingent commissions”), numerous private actions were filed, all ultimately consolidated in the District of New Jersey before District Judge Faith Hochberg. As Judge Cecchi, who was the third district court judge to handle the matter, observed in approving the settlement, during the case class counsel had reviewed over 60 million pages of documents and taken over 300 depositions, and the matter had generated over 2400 docket entries. The case had also gone up to the Third Circuit Court of Appeals (on plaintiff’s appeal of an earlier dismissal of the case granted by Judge Garrett Brown), where it had been reversed by the appellate court and returned for further proceedings.
While the final settling defendants, which included Ace, Chubb and Munich Re, agreed to pay $10.5 million to resolve the case (with over $3 million going to plaintiff’s counsel), prior settlements in the case with Marsh, Zurich Insurance, AIG and several other insurers had netted plaintiffs over $250 million, with plaintiffs’ counsel receiving over $50 million in attorneys’ fees in those settlements. In approving both the settlement and the award of counsel fees, Judge Cecchi noted that she had not received any objections to the proposed settlement from any class members, and that had the case continued to trial, plaintiffs faced a significant hurdle in establishing damages that would likely result in the case becoming a “battle of the experts.”