A federal judge in Newark, N.J., has dismissed a policyholder class-action suit accusing brokers, insurers and reinsurers of antitrust and racketeering activity, but he has given the plaintiffs 30 days to come back with a revised version of their allegations.
The plaintiff class, which includes dozens of large commercial customers, municipalities and individuals that did business with the brokers and insurers between 1994 and 2005, has accused the defendants of conspiring to rig bids and fix prices in the employee benefits market and other insurance markets.
To proceed with litigation of conspiracy allegations, the plaintiffs must show reason to believe that the insurers themselves were joining in some way to allocate business illegally, not simply steering business to preferred parties, U.S. District Court Judge Garrett Brown Jr. writes in a ruling released Thursday.
The complaint must provide evidence of a horizontal conspiracy between competitors, not efforts to restrain trade by parties at different levels of the distribution system, the judge writes.
