ORMOND et al v. ANTHEM, INC. et al

Filing 478

ENTRY ON PENDING MOTIONS - For the reasons set forth, Defendants' Motion to Decertify Class (Dkt. 363 ) is DENIED AS MOOT, (2) Plaintiffs' Motion for Partial Summary Judgment (Dkt. 416 ) is DENIED, and (3) Defendants' Appeal of the Magistrate Judges Decision (Dkt. 438 ) is DENIED AS MOOT. Signed by Judge Tanya Walton Pratt on 11/1/2011. (JD)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION
MARY E. ORMOND, et al., On Behalf of )
Themselves and All Others Similarly
)
Situated
)
)
Plaintiffs,
)
)
v.
) Case No. 1:05-cv-1908-TWP-TAB
)
ANTHEM, INC. and ANTHEM
)
INSURANCE COMPANIES, INC.
)
)
Defendants
)
ENTRY ON PENDING MOTIONS
In light of the Seventh Circuit’s recent decision denying Defendants’ petition for
permission to appeal pursuant to 28 U.S.C. § 1292(b), the stage has officially been set for a June
2012 trial. Before the parties can actually proceed to trial, however, the Court must address the
motions which remain pending in this matter: (1) Defendants’ Motion to Decertify Class (Dkt.
363); (2) Plaintiffs’ Motion for Partial Summary Judgment (Dkt. 416); and (3) Defendants’
Appeal of the Magistrate Judge’s Decision (Dkt. 438).
I. DISCUSSION
As the parties know, on July 1, 2011, the Court issued an order granting in part and
denying in part Defendants’ Motion for Summary Judgment (Dkt. 446). Specifically, the Court
ruled that “Plaintiffs’ tort claim for breach of duty in connection with the pricing and sizing of
the Anthem, Inc. IPO survives for trial,” but the Court granted summary judgment on all
remaining claims. (Id. at 53.) Through this ruling, the Court has effectively resolved most, if not
all, of the disputes contained in the three pending motions. Nonetheless, as a matter of thorough
housekeeping, the Court will address each motion separately.

A.

Defendants’ Motion to Decertify
Defendants argue that Plaintiffs’ attempt to inject cost-plus and third-party beneficiary

claims into this dispute destroys certain Fed. R. Civ. P. 23(a) and 23(b) requirements (i.e.
adequacy, typicality, and predominance), thereby warranting decertification of the class. As
Defendants note, however, if these theories fail, then the Motion to Decertify is “rendered moot.”
(Dkt. 364 at 6.) In its entry on summary judgment, the Court rejected Plaintiffs’ theories relating
to cost-plus contracts (Dkt. 446 at 29-30) and third-party beneficiary claims (Id. at 22-23).
Accordingly, Defendants’ Motion to Decertify is DENIED AS MOOT.
B.

Plaintiffs’ Motion for Partial Summary Judgment
Plaintiffs argue that they are entitled to summary judgment on four theories. First,

Plaintiffs argue that Defendants failed to pay the Ormond Class members “fair value” on the
conversion date as required by Indiana’s demutualization statute; second, Defendants wrongfully
allocated and distributed shares of Anthem Inc. Stock to the Grandfathered Groups (“GFGs”) in
Ohio; third, Defendants wrongfully distributed Anthem Inc. stock to GFGs in Connecticut; and
lastly, Defendants improperly allocated shares to artificially created Ohio and Kentucky GFGs.
Importantly, each of these theories has been rejected by the Court in its entry on summary
judgment. Specifically, the Court rejected the argument that Defendants failed to pay the class
members aggregate consideration equal to the “fair value” of Anthem Insurance on the
conversion date. (Id. at 35-38.) In a similar fashion, the Court rejected Plaintiffs’ argument
relating to the alleged misallocation of shares to Grandfathered Groups in Ohio and Connecticut
(Id. at 25-26).

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Finally, Plaintiffs argue that they are entitled to summary judgment because “Defendants
wrongly created or maintained the ‘grandfathered’ status of certain Ohio and Kentucky GFGs,
and then improperly allocated shares to them, when...more than 3,700 GFGs in Ohio and
Kentucky had only one insured employee during the relevant actuarial and eligibility time
periods.” (Dkt. 417 at 3.) In other words, Plaintiffs argue that they are entitled to judgment in
their favor because Ohio and Kentucky GFGs that only had a single enrollee improperly received
demutualization proceeds. Plaintiffs assure the Court that this claim is “nothing new” because,
for years, Plaintiffs have alleged that Defendants misallocated shares to certain GFGs (Id.).
The Court respectfully disagrees. This claim is conspicuously absent from Plaintiffs’
complaint. On this point, it is well-settled that new issues, like these, cannot be raised for the
first time on summary judgment. See ExxonMobil Oil Corp. v. Amex Constr. Co., 702 F. Supp.
2d 942, 966 (N.D. Ill. 2010) (plaintiff cannot amend its complaint by adding claims through a
summary judgment brief). Notably, in its entry on summary judgment, the Court observed that
“[a]lthough the Fourth Amended Complaint refers to [GFGs] from the Kentucky merger,
Plaintiffs have made no effort to argue any impropriety with regard to how those groups were
treated by Anthem.” (Dkt. 446 at 26 n.9). Moreover, the Court has already ruled that Defendants
are entitled to summary judgment “with respect to any claim asserting a misallocation or overallocation of shares to the [GFGs].” (Dkt. 446 at 33). Accordingly, Plaintiffs’ Motion for Partial
Summary Judgment is DENIED.

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C.

Defendants’ Appeal of the Magistrate Judge’s Ruling
Defendants have appealed the Magistrate Judge’s prior ruling on expert reports to the

extent that it establishes that Plaintiffs’ “new” theories are, in fact, in the case. This motion, too,
has been rendered moot in light of the Court’s entry on summary judgment, which rejected
Plaintiffs’ claims relating to cost-plus contracts, IPO pricing dates, altered business records, and
(at least implicitly) single-enrollee group claims. Accordingly, Defendants’ motion to appeal the
Magistrates Judge’s ruling is DENIED AS MOOT.
II.

CONCLUSION

For the reasons set forth above, Defendants’ Motion to Decertify Class (Dkt. 363) is
DENIED AS MOOT, (2) Plaintiffs’ Motion for Partial Summary Judgment (Dkt. 416) is
DENIED, and (3) Defendants’ Appeal of the Magistrate Judge’s Decision (Dkt. 438) is
DENIED AS MOOT.

SO ORDERED.
11/01/2011
Date: ______________________

_____________________________

________________________
Hon. Tanya Walton Pratt, Judge
Hon.United States District Court
Tanya Walton Pratt, Judge
United States District Court
Southern District of Indiana

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DISTRIBUTION:
Matthew Thomas Albaugh
BAKER & DANIELS - Indianapolis
[e-mail], [e-mail]
Dennis Paul Barron
[e-mail]
Michael F. Becker
THE BECKER LAW FIRM CO., L.P.A.
[e-mail], [e-mail]
Peter R. Bisio
HOGAN LOVELLS US LLP
[e-mail], [e-mail]
Todd S Collins
BERGER & MONTAGUE, P.C.
[e-mail]
T. David Copley
KELLER ROHRBACK, L.L.P.
[e-mail], [e-mail]
Edward O'Donnell DeLaney
DELANEY & DELANEY LLC
[e-mail], [e-mail], [e-mail], [e-mail],
[e-mail]
Kathleen Ann DeLaney
DELANEY & DELANEY LLC
[e-mail], [e-mail], [e-mail],
[e-mail], [e-mail]
Thomas M. Fisher
INDIANA OFFICE OF THE ATTORNEY GENERAL
[e-mail], [e-mail]
Craig A. Hoover
HOGAN LOVELLS US LLP
[e-mail], [e-mail]
Peter R. Kahana
BERGER & MONTAGUE, P.C.
[e-mail]

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Kevin M. Kimmerling
BAKER & DANIELS - Indianapolis
[e-mail]
Cari C. Laufenberg
KELLER ROHRBACK L.L.P.
[e-mail],[e-mail]
Adam K. Levin
HOGAN LOVELLS US LLP
[e-mail], [e-mail]
Neil F Mara
BERGER & MONTAGUE, P.C.
[e-mail]
H. Laddie Montague , Jr
BERGER & MONTAGUE P.C.
[e-mail]
Anne Kramer Ricchiuto
BAKER & DANIELS - Indianapolis
[e-mail], [e-mail]
Lynn L. Sarko
KELLER ROHRBACK, L.L.P.
[e-mail], [e-mail]
Christopher G. Scanlon
BAKER & DANIELS - Indianapolis
[e-mail],[e-mail]
Paul A. Wolfla
BAKER & DANIELS - Indianapolis
[e-mail], [e-mail]
Eric Hyman Zagrans
[e-mail]

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