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Louisiana Jury Awards $117 Million In Health Plan Failure Case

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Health Net Inc. says a state court jury in Baton Rouge, La., has awarded $117 million in damages to the receivers managing a failed Texas health plan once owned by Health Net.[@@]

Health Net, Los Angeles, sold the Texas plan and 2 plans in Louisiana and Oklahoma to AmCareco Inc., Houston, in 1999. AmCareco filed for bankruptcy court protection in 2002.

When receivers took over the bankrupt plans, they sued AmCareco, Health Net and other parties, charging the defendants with fraud, negligence, conspiracy and breach of fiduciary duty, Health Net says.

The Louisiana award, which applies to all of the defendants in the case, consists of $52.4 million in compensatory damages and $65 million in punitive damages, Health Net says.

Health Net says it intends to appeal the verdict, and it says it hopes to see the jury assign responsibility for some of the verdict amount to defendants other than Health Net.

The jury said other parties will be responsible for about 15% of the compensatory damages, Health Net says.

Court cases involving the Louisiana and Oklahoma plans that Health Net sold to AmCareco are still in progress, and the plaintiffs in those cases are seeking punitive damages and about $30 million in compensatory damages, Health Net says.