Anthem Inc. and Cigna Corp. must disclose to federal antitrust enforcers letters from in-house lawyers in which the insurance companies accuse each other of breaking their $54 billion merger deal, a Washington judge ruled.
The judge, Amy Berman Jackson, agreed with the findings of the retired judge who’s overseeing discovery disputes in the government’s blockbuster antitrust suit, filed in July. Lawyers for Anthem, which is based in Indianapolis, and Cigna, which is based in Bloomfield, Connecticut, had resisted revealing those in-house letters to the U.S. Justice Department.
Government lawyers had argued that the in-house letters would “reveal the current state of hostility between defendants” and illuminate challenges the companies face as they defend their proposed merger. Attorneys for the insurance giants told Richard Levie, the retired judge, that “any disagreements between the in-house lawyers are irrelevant to the efficiencies that can be achieved from the proposed acquisition.”
Levie recommended on Oct. 6 that the government see the documents, most of which were written by Thomas Zielinski, in-house counsel to Anthem, and by Nicole Jones, in-house counsel to Cigna. Other documents, Levie said, were written by outside counsel to either Anthem or Cigna.
“Anthem’s arguments that this information is not relevant apparently are intended to suggest that the newly merged company will be able to overcome or, perhaps, overrule, any disagreements in order to obtain post-merger efficiencies,” Levie wrote. “That may be the case. But to the extent that this is true, Anthem’s arguments at best show that the court should afford less weight to any evidence of pre-merger disagreements between the merging parties.”
Anthem is represented by a team from White & Case and Cigna is represented by Paul, Weiss, Rifkind, Wharton & Garrison.
Levie rejected arguments that the “joint defense” privilege protected the information from disclosure.
The “applicable joint defense agreements in this case shows that those agreements are specific and limited in scope to the instant merger,” Levie wrote.
Levie said “the letters asserting breaches of the merger agreement concern wholly different legal concerns, namely, allegations by each party that the other has failed to satisfy the requirements of the merger contract.”
Envisioning a possible breach-of-contract claim, Levie said “there is no conceivable manner in which the parties might be engaged in a joint defense with respect to any such action.
“To the contrary,” he wrote, “in that instance, the parties would be direct adversaries rather than parties with a common interest.”
The trial is set to begin Nov. 21.
The merger-breach claims marked the latest evidence of tension between Anthem and Cigna. Since taking over the case from another trial judge, Jackson has raised questions about the companies’ struggle to get along.
Jackson said in August it was a “bizarre situation” to be accommodating the scheduling demands for a deal that Cigna appears to no longer desire. When Cigna recently asked for permission to object to Anthem’s questions at trial, Jackson responded that she found the request “completely extraordinary.”
“I’ve never seen it done even in a criminal trial with multiple co-defendants,” Jackson said.
“It’s nothing I’ve ever seen before. I have trouble even wrapping my mind around it. I’m not going to tell you that it’s prohibited but I find it highly extraordinary,” she added.