938 F.2d 919 (9th Cir. 1991), 89-16405, In re Insurance Antitrust Litigation

Docket Nº:89-16405, 89-16513 to 89-16531.
Citation:938 F.2d 919
Party Name:In re INSURANCE ANTITRUST LITIGATION. ACE CHECK CASHING, INC.; Acme Corrugated Box Company, Inc.; Anastasios Markos, t/a Municipal Exxon; Bay Harbor Park Homeowner's Association, Inc.; Bensalem Township Authority; Big D Building Supply Corporation, et al., Private Plaintiffs, Plaintiffs-Appellants, and State of Alabama, et al., Plaintiffs, v. AETNA
Case Date:June 18, 1991
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit
 
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938 F.2d 919 (9th Cir. 1991)

In re INSURANCE ANTITRUST LITIGATION.

ACE CHECK CASHING, INC.; Acme Corrugated Box Company, Inc.;

Anastasios Markos, t/a Municipal Exxon; Bay Harbor Park

Homeowner's Association, Inc.; Bensalem Township Authority;

Big D Building Supply Corporation, et al., Private

Plaintiffs, Plaintiffs-Appellants,

and

State of Alabama, et al., Plaintiffs,

v.

AETNA CASUALTY AND SURETY COMPANY; Allstate Insurance

Company; Cigna Corp.; Hartford Fire Insurance

Company, et al., Defendants-Appellees.

STATE OF CALIFORNIA; City of Lafayette; City and County of

San Francisco; County of San Benito, Plaintiffs-Appellants,

and

State of Alabama, et al., Plaintiffs,

v.

AETNA CASUALTY AND SURETY COMPANY; Allstate Insurance

Company; Cigna Corp.; Hartford Fire Insurance

Company, et al., Defendants-Appellees.

STATE OF CALIFORNIA; City of Lafayette; City and County of

San Francisco; County of San Benito, Plaintiffs-Appellants,

v.

INSURANCE SERVICES OFFICE, INC., CNA RE (U.K.) Ltd.;

Continental Reinsurance Corporation; Union-America

Insurance Co.; Edwards & Payne Ltd.; Excess Insurance Co.,

Ltd.; General Reinsurance Corp.; Thomas A. Greene &

Company, Inc.; Kemper Reinsurance London; Lloyd's

Underwriters & Brokers; Mercantile & General Reinsurance

Company of America; North American Reinsurance Corporation;

Oxford Syndicate Mgmt. Ltd.; (sued herein as K.F. Adler &

Others (U.A.)

Ltd.); Prudential Reinsurance; Reinsurance Association of

America; Terra Nova Insurance Co.; Aetna Casualty and

Surety Company; Allstate Insurance Company; Winterthur

Reinsurance Corporation of America; Cigna Corp.; Hartford

Fire Insurance Company, Defendants-Appellees.

STATE OF NEW YORK; Roosevelt Island Operating Authority;

Village of Groton; Village of Lake Success,

Plaintiffs-Appellants,

v.

HARTFORD FIRE INSURANCE COMPANY; Aetna Casualty and Surety

Company; Cigna Corp.; Allstate Insurance; et

al., Defendants-Appellees.

COMMONWEALTH OF MASSACHUSETTS; Town of Hanover; Town of

Milford, Plaintiffs-Appellants,

v.

HARTFORD FIRE INSURANCE COMPANY; Aetna Casualty and Surety

Company; Cigna Corp.; Allstate Insurance; et

al. Defendants-Appellees.

STATE OF MINNESOTA, Plaintiff-Appellant,

v.

HARTFORD FIRE INSURANCE COMPANY; Aetna Casualty and Surety

Company; Cigna Corp.; Allstate Insurance; et

al., Defendants-Appellees.

STATE OF WEST VIRGINIA; City of Clay; County of Hancock;

County of Mineral; County of Wirt, Plaintiffs-Appellants,

v.

HARTFORD FIRE INSURANCE COMPANY; Aetna Casualty and Surety

Company; Cigna Corp.; Allstate Insurance; et

al., Defendants-Appellees.

STATE OF WISCONSIN, Plaintiff-Appellant,

v.

HARTFORD FIRE INSURANCE COMPANY; Aetna Casualty and Surety

Company; Cigna Corp.; Allstate Insurance; et

al., Defendants-Appellees.

CITY OF MOBILE; State of Alabama; City of Birmingham,

Plaintiffs-Appellants,

v.

AETNA CASUALTY AND SURETY COMPANY; Winterthur Reinsurance

Corporation of America; Cigna Corp.; Hartford

Fire Insurance Company; Allstate

Insurance, Defendants-Appellees.

STATE OF ARIZONA, Plaintiff-Appellant,

v.

HARTFORD FIRE INSURANCE COMPANY; Allstate Insurance; Aetna

Casualty and Surety Company; Cigna Corp.; et

al., Defendants-Appellees.

STATE OF MARYLAND, Plaintiff-Appellant,

v.

HARTFORD FIRE INSURANCE COMPANY; Allstate Insurance; Aetna

Casualty and Surety Company; Cigna Corp.; et

al., Defendants-Appellees.

STATE OF WASHINGTON; County of Cowlitz, Plaintiffs-Appellants,

v.

HARTFORD FIRE INSURANCE COMPANY; Allstate Insurance; Aetna

Casualty and Surety Company; Cigna Corp.; et

al., Defendants-Appellees.

STATE OF NEW JERSEY, Plaintiff-Appellant,

v.

HARTFORD FIRE INSURANCE COMPANY; Allstate Insurance; Aetna

Casualty and Surety Company; Cigna Corp.; et

al., Defendants-Appellees.

STATE OF COLORADO, Plaintiff-Appellant,

v.

WINTERTHUR REINSURANCE CORPORATION OF AMERICA; Aetna

Casualty and Surety Company; Cigna Corp.;

Hartford Fire Insurance Company;

Allstate Insurance,

Defendants-Appellees.

STATE OF OHIO; Township of Jackson; County of Hardin,

Plaintiffs-Appellants,

v.

HARTFORD FIRE INSURANCE COMPANY; Allstate Insurance; Aetna

Casualty and Surety Company; Cigna Corp.; et

al., Defendants-Appellees.

STATE OF CONNECTICUT, Plaintiff-Appellant,

v.

HARTFORD FIRE INSURANCE COMPANY; Allstate Insurance; Aetna

Casualty and Surety Company; Cigna Corp.; et

al., Defendants-Appellees.

COMMONWEALTH OF PENNSYLVANIA; County of Schuylkill; City

of Altoona; City of York; Borough of

Chambersburg, Plaintiffs-Appellants,

v.

HARTFORD FIRE INSURANCE COMPANY; Allstate Insurance; Aetna

Casualty and Surety Company; Cigna Corp.; et

al., Defendants-Appellees.

STATE OF ALASKA, Plaintiff-Appellant,

v.

HARTFORD FIRE INSURANCE COMPANY; Allstate Insurance; Aetna

Casualty and Surety Company; Cigna Corp.; et

al., Defendants-Appellees.

STATE OF MONTANA; County of Teton, Plaintiffs-Appellants,

v.

HARTFORD FIRE INSURANCE COMPANY; Allstate Insurance; Aetna

Casualty and Surety Company; Cigna Corp.; et

al., Defendants-Appellees.

STATE OF MICHIGAN, Plaintiff-Appellant,

v.

HARTFORD FIRE INSURANCE COMPANY; Allstate Insurance; Aetna

Casualty and Surety Company; Cigna Corp.; et

al., Defendants-Appellees.

STATE OF LOUISIANA, Cities of Baton Rouge, New Orleans,

Slidell, Nachitoches and Eunice, Plaintiffs-Appellants,

v.

HARTFORD FIRE INSURANCE COMPANY; Allstate Insurance; Aetna

Casualty and Surety Company; Cigna Corp.; et

al., Defendants-Appellees.

Nos. 89-16405, 89-16513 to 89-16531.

United States Court of Appeals, Ninth Circuit

June 18, 1991

Argued and Submitted March 15, 1991.

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Thomas Greene, Deputy Atty. Gen., San Francisco, Cal., H. Ladie Montague, Philadelphia, Pa., for plaintiffs-appellants.

Laurel Price, Deputy Atty. Gen., Trenton, N.J., for State plaintiffs-appellants.

Bartlett H. McGuire, Davis, Polk & Wardwell, Washington, D.C., John Harkins, Philadelphia, Pa., Martin Evans, New York City, for defendants-appellees.

Edwin A. Heafey, Jr., Raoul D. Kennedy and Richard de Saint Phalle of Crosby, Heafey, Roach & May, Oakland, Cal., defendants-appellees' liaison counsel.

Appeal from the United States District Court for the Northern District of California.

Before BEEZER and NOONAN, Circuit Judges, and SINGLETON, [*] District Judge.

NOONAN, Circuit Judge:

Nineteen states and numerous private parties brought antitrust suits against the defendants named above. These suits were consolidated in the district court and were ultimately dismissed. The plaintiffs appeal. We reverse the district court and remand.

FACTUAL BACKGROUND

The undisputed facts are set out by the district court in In re Insurance Antitrust Litigation, 723 F.Supp. 464, 468-70 (N.D.Cal.1989). We summarize:

Commercial general liability insurance (CGL) protects the insured against the risk of liability to third parties for bodily injury or property damage. It is purchased by businesses, nonprofit entities, and governmental units. Defendants Hartford Fire Insurance Company (Hartford), Allstate Insurance Company (Allstate), Aetna Casualty and Surety Company (Aetna), and CIGNA Corporation (CIGNA) are sellers of CGL.

In distinction from these primary insurers, there are reinsurers to whom the primary insurers turn to share their risk. The terms and availability of reinsurance directly affect the terms and availability of primary insurance. In turn, retrocessional insurance--insurance for reinsurers--has an impact on the terms of reinsurance and primary insurance. The defendant reinsurers in this case are domestic--e.g., General Reinsurance Corporation (General Re)--and also foreign. The foreign defendant companies include one Swiss corporation, Winterthur Swiss Insurance Company (Winterthur); and six "London Company Market" corporations, all of them subsidiaries

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of American corporations: Terra Nova Insurance Co., Ltd. (Terra Nova); Unionamerica Insurance Co., Ltd. (Unionamerica); Continental Reinsurance Co., (U.K.) Ltd. (Continental Re); Excess Insurance Group, Ltd. (Excess); Kemper Reinsurance London, Ltd. (Kemper Re); and CNA Re (U.K.) Ltd.

Reinsurance is arranged by specialized brokers and underwriters. Much reinsurance is done by syndicates doing business through Lloyd's of London. A variety of defendants here are underwriters for these reinsurance syndicates-- e.g., Merrett Underwriting Agencies Management, Ltd. (Merrett) and Three Quays Underwriting Management Ltd. (Three Quays). Thomas A. Greene and Co., Inc. (Greene) is an American reinsurance broker, a defendant here. Ballantyne, McKean and Sullivan, Ltd. (Ballantyne) and R.K. Carvill & Co., Ltd., (Carvill) are London reinsurance brokers, defendants here. There are also individual defendants associated with reinsurance--e.g., Peter North Miller, the chairman of the Council of Lloyd's, its governing body; and Robin A.G. Jackson, chief underwriter for Merrett.

Two insurance associations are also defendants. One is Reinsurance Association of America (RAA), which principally engages in lobbying. The other is the Insurance Service Office (ISO). ISO has a key role in the regulation of insurance by the several states. Formed in 1971 by the...

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