Insurance and Finance Update - Written by Beasley Allen on Thursday, December 17, 2009 11:56 - 13 Comments
MetLife has agreed to pay $50 million to settle a class action claim that it defrauded 8.6 million policy holders when it converted from a mutual company in 2000 to one that is publicly traded. The settlement was reached after a jury had been selected in a case, and after Judge Jack B. Weinstein, the trial judge, ruled that MetLife could introduce a 103-page decision of the New York State Superintendent of Insurance approving both the conversion itself and the disclosure documents that MetLife had mailed to its policyholders. Judge Weinstein expressed skepticism about the strength of the Plaintiffs’ case and that led to the settlement.
The settlement also resolves a state-court class action pending in Manhattan. The two class actions in New York are the last of nine lawsuits filed against MetLife charging that the conversion was tainted with fraud. The other seven lawsuits were dismissed. Judge Weinstein set a hearing on the fairness of the settlement for the 30th of this month.
If approved, class members will not receive direct payments as a result of the settlement. Instead, the amount set aside at the time of the conversion to continue generating dividends for policyholders whose policies entitled them to receive dividends will be augmented by what remains of the $50 million after payment of expenses and attorney’s fees. The settlement also invokes the cy pres doctrine to provide for a $2.5 million payment to a nonprofit health research organization in lieu of compensation to those policyholders who did not have a right to receive dividends.
The class in the federal lawsuit claimed that MetLife violated federal securities laws by making significant omissions and misleading statements in materials sent to policyholders to win their support for the conversion. A majority of 93% approved the conversion in April 2000. Before ordering a fairness hearing, Judge Weinstein issued an opinion on the proposed settlement, finding it “probable” that the settlement will be found “fair, reasonable and adequate.”
According to the formula used in the notice to the class, the lawyers for federal Plaintiffs estimated the class would recover $8 billion if it prevailed on all claims. MetLife’s lawyers reported that the federal class would receive nothing even if it prevailed on all its claims. So there was a large range both between the two estimates and also between the amount claimed by the Plaintiffs and the settlement amount.
The lawyers for the state class estimated that its claims were worth between $400 million and $1.6 billion. Judge Weinstein wrote in his opinion that the settlement appears to have reached “an appropriate balance of the risks and benefits for all of those involved in this complex litigation.” A special master was appointed by the court to explore settlement possibilities with the parties.
Leave a Reply
- Favorite Bible Verses
- Favorite Bible Verses
- An Update on the State of Alabama's Case Against BP
- Regions Fined $7.5 Million For Breaking Overdraft Rules And Will Refund $49 Million To Customers
- Fiat Chrysler Hit With Record $105 Million Fine by NHTSA
- Alabama’s BP Agreement in Principle Moves Forward
- Asbestos in Schools Poses a Mesothelioma Risk
- Judge Denies Trinity’s Request for a New Trial
- Human Trafficking of Foreign Employees is Shameful
- Judge Awards $99 Million to Victims’ Families in Crane Collapse Lawsuit
- NTSB Cites Truck Driver Fatigue as Cause of Tracy Morgan Crash
- Favorite Bible Verses
- First State Court Talcum Powder Trial Plaintiff Selected
- Parting Words
- Our Monthly Reminders
- Bryan Stevenson Discusses The National Failure To Address History Of Racial Injustice
- When can we expect payment...
- I'm not sure of the website question above but; My question is, how do I determi...
Are you looking for xarelto leads?...
- 2008 F150 super cab, passenger side window will not roll down. Stopped working a...
- I TIRED STATER, SLATER & ROSENBERG 8-9 YEARS AGO. IT WAS WHEN THE NEWS CAME ...
- 2004 F-150 Supercrew FX4 with 83,000 miles, I will be contacting the attorney li...
- I just had the first failure on my 2005 F-150 (76,000 miles) this morning on my ...
- I am on a medicare advantage plan and a widow involved in a law suit with person...
Recent Settlements - Feb 9, 2012 7:09 - 0 Comments
More In Recent Settlements
- A Further Update On The AWP Litigation
- Firm Reaches Settlement In Fort McClellan Radio Tower Collapse Case
- Firm Reaches Settlement In Sikorsky Helicopter Crash
- The Philadelphia Story
- St. Croix, Virgin Islands Settlement
Personal Injury, Product Liability - Sep 1, 2015 10:43 - 0 Comments
More In Product Liability
- Texas Town Files Suit After Wind Turbines Send Blades Flying
- The Hazards Created By Ethanol Fireplaces
- Wrongful Death Lawsuits Filed Against Continental Involving Tire Defect
- Jury Returns $59 Million Verdict Against Sunbeam Space Heater In Fire Death
- 9th Circuit Upholds $2.7 Million Sanctions Against Goodyear And Its Lawyers
Recalls Update - Aug 24, 2015 10:08 - 0 Comments
More In Recalls Update
- Jake’s Fireworks Recalls YoYo Sparklers
- Epoca International Recalls Glass Whistling Kettle
- Teavana Recalls Glass Pitchers
- Cost Plus World Market Recalls Ronan Bistro Chairs
- Technosport Recalls Omersub Scuba Mask Due To Injury Hazard