Late Opt-Outs Permitted in Antitrust Class Action Against Insurers, Brokers

This posting was written by Darius Sturmer, Editor of CCH Trade Regulation Reporter.

In an antitrust class action against insurance companies and brokers, a federal district court did not abuse its discretion when it extended the “opt-out” deadline and modified the settlement class so that late-filing opt-outs could elect to be excluded from the class settlement, the U.S. Court of Appeals in Philadelphia has ruled in a not-for-publication opinion.

Accordingly, settling defendants were not entitled to a permanent injunction blocking the late-filing opt-outs from pursuing state court antitrust litigation.
Several class action suits were filed in 2004 against insurance brokers and insurers for their participation in an alleged bid rigging conspiracy.

In February 2009, a final judgment and order, approving a class-wide settlement, was filed. Pursuant to the order, all members of the class released any and all claims against the settling defendants that could have been raised in the class action suit.

The settling defendants filed motions to enjoin two companies from pursuing state court actions because the companies failed to opt out in a timely fashion.

In response, the companies filed motions in the district court to extend the “opt-out” deadline and to modify the settlement class so that each could elect to be excluded from the class settlement.

The district court exercised reasonable discretion in granting the motion to extend the deadline after concluding that the late-filers' failure to meet the “opt-out” deadline was “excusable neglect,” the appellate court ruled.

In light of the deadline extension, and the subsequent removal of the late-filing opt-outs from the settlement class, the district court correctly denied the defendants' motion for a permanent injunction barring the late-filing opt-outs' state court litigation.

The March 9 decision, In re: Insurance Brokerage Antitrust Litigation, appears at 2010-1 Trade Cases ¶76,923.