Federal Judge Dismisses Antitrust Suit Against Insurers and Brokers

April 6, 2007 (PLANSPONSOR.com) - A federal judge threw out an antitrust lawsuit against dozens of insurance brokers and insurers at some of the largest U.S. firms by policyholders who claimed that the defendants conspired with each other to fix insurance prices, but gave the plaintiffs one last chance to amend their case.

U.S. District Judge Garrett Brown in Newark, New Jersey dismissed the racketeering and Sherman Act claims in two consolidated lawsuits by property/casualty and employee benefit policyholders, saying that the policyholders failed to prove a conspiracy to restrain market competition.

“While there was an exchange of information about these contingent commission agreements, which plaintiffs allege were a method by which the market or customers were allocated among the insurers, plaintiffs have not shown that the insurers colluded to allocate business,” Brown wrote, Business Insurance reported.

According to the news source, the court found last year that the policyholder complaints couldn’t hold up the antitrust allegations. The judge then ordered the plaintiffs to file supplementary case statements with additional facts, at which point the brokers and insurers filed for dismissal.

Brown allowed policyholders to amend their complaints or revise their case statements once more within the next 30 days to address the shortcomings the court identified.

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