IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

IN RE ANTHEM-CIGNA

MERGER LITIGATION

)

)

Consolidated

C.A. No. 2017-0114-JTL

MEMORANDUM OPINION

Date Submitted: March 9, 2020

Date Decided: August 31, 2020

William M. Lafferty, Kevin M. Coen, D. McKinley Measley, Zi-Xiang Shen, Thomas P. 

Will, Daniel T. Menken, MORRIS, NICHOLS, ARSHT & TUNNELL LLP, Wilmington, 

Delaware; Glenn M. Kurtz, Claudine Columbres, Andrew W. Hammond, Gregory Starner, 

Camille M. Shepherd, Vatsala Sahay, WHITE & CASE LLP, New York, New York; 

Heather M. Burke, WHITE & CASE LLP, Palo Alto, California; Dana E. Foster, WHITE 

& CASE LLP, Washington, D.C.; Attorneys for Anthem, Inc.

David E. Ross, Garrett B. Moritz, S. Michael Sirkin, Adam D. Gold, Benjamin Z. 

Grossberg, Anne M. Steadman, ROSS ARONSTAM & MORITZ LLP, Wilmington, 

Delaware; Stephen R. DiPrima, William Savitt, Graham W. Meli, Adam M. Gogolak, 

Lauren M. Kofke, S. Christopher Szczerban, Steven P. Winter, Claire E. Addis, Bita Assad, 

Daniel H. Rosenblum, Jacob Miller, Jeohn Salone Favors, WACHTELL, LIPTON, 

ROSEN & KATZ, New York, NY; Attorneys for Cigna Corporation. 

LASTER, V.C. 
1

TABLE OF CONTENTS

I. INTRODUCTION...................................................................................................... 1

II. FACTUAL BACKGROUND .................................................................................... 8

A. The Parties.............................................................................................................. 14

B. Merger Talks In 2012 ............................................................................................. 17

C. Merger Talks In 2014 ............................................................................................. 19

D. The Path To The Merger Agreement ..................................................................... 24

1. The Non-Public Negotiations...................................................................... 27

2. Anthem’s Bear Hug Letter .......................................................................... 30

3. The Management Meetings......................................................................... 32

4. The Agreement In Principle ........................................................................ 36

5. The Struggle Over Cordani’s Role As COO............................................... 37

6. The Parties’ Understandings Regarding The Blues Rules.......................... 40

E. The Merger Agreement .......................................................................................... 41

F. The Need For Stockholder And Regulatory Approval........................................... 44

1. Stockholder Approval.................................................................................. 44

2. Regulatory Approval ................................................................................... 45

G. The Integration Planning Process And The L2/L3 Selection Dispute ................... 53

1. The First Months Of Integration Planning .................................................. 54

2. The L2/L3 Selection Dispute ...................................................................... 56

3. The Dispute Letters..................................................................................... 58

4. The Meeting On January 11, 2016 .............................................................. 61

5. The Cigna ELT’s Response......................................................................... 63

6. Preparations For The February 16 Meeting ................................................ 65

7. The February 16 Meeting............................................................................ 67

8. Cigna Escalates Further............................................................................... 68

9. The De-Scoping Of The Integration Planning Process............................... 74

10. The Status Of The Regulatory Approval Process ....................................... 75

H. The Impasses Of March And April ........................................................................ 77

1. Swedish Pushes Forward............................................................................. 77
2

2. The Continued Impasse Over Integration Planning .................................... 78

3. The Cigna Board’s March 31 Meeting........................................................ 81

4. The Anthem Board Unsuccessfully Pursues Détente.................................. 84

5. Cigna Changes Its Disclosure. .................................................................... 87

I. The Second Stage Of DOJ Review ........................................................................ 89

1. The DOJ Update.......................................................................................... 89

2. The White Papers ........................................................................................ 90

3. Internal Integration Planning At Anthem.................................................... 94

4. Teneo Leaks The Dispute Letters To The Wall Street Journal. ...............100

5. Cigna Attempts To Re-Engage On Integration Planning..........................105

6. “Bias-to-Blue” As A Go-To-Market Strategy...........................................107

J. The DOJ Opposes The Merger.............................................................................110

1. The June 10 Meeting With The Staff........................................................110

2. The Remediation Effort.............................................................................112

3. The June 21 Meeting With The Front Office............................................116

4. Cigna Continues To Analyze Its Standalone Options...............................122

K. The Antitrust Litigation........................................................................................124

1. The Parties’ Initial Responses To The Antitrust Litigation ......................124

2. Cigna’s Covert Communications Campaign.............................................126

3. The Initial Phase Of The Antitrust Litigation ...........................................132

4. Discovery In The Antitrust Litigation.......................................................135

5. Pre-Trial Preparations................................................................................138

6. Trial In The Antitrust Litigation................................................................143

L. Anthem Extends The Termination Date...............................................................154

M. The District Court Enjoins The Merger. ..............................................................155

N. Anthem Appeals. ..................................................................................................168

O. This Litigation ......................................................................................................169

P. The DC Circuit Court Decision............................................................................171

Q. Anthem Terminates The Merger Agreement. ......................................................186

R. This Litigation Proceeds To Trial. .......................................................................188
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III. LEGAL ANALYSIS...............................................................................................189

A. The Legal Framework ..........................................................................................189

B. The Plain Meaning Of The Efforts Covenants And The No Injunction Condition ...

.......................................................................................................................193

1. The Reasonable Best Efforts Covenant.....................................................193

2. The Regulatory Efforts Covenant .............................................................196

3. The Regulatory Cooperation Covenant.....................................................201

4. The No Injunction Condition ....................................................................204

C. Anthem’s Claims For Breach Of The Efforts Covenants ....................................204

1. Cigna’s Covert Communications Campaign Against The Merger ...........205

2. Cigna’s Withdrawal From Integration Planning .......................................212

3. Anthem’s Claim Against Cigna For Obstructing A Divestiture ...............234

4. Anthem’s Claim Against Cigna For Resisting Mediation ........................246

5. Cigna’s Undermining Of Anthem’s Defense In The Antitrust Litigation 251

D. Whether The No Injunction Condition Would Have Failed If Cigna Had Not 

Breached ...............................................................................................................263

1. The National Accounts Issue.....................................................................264

2. The Local Markets Issues..........................................................................270

3. Other Regulatory Approvals .....................................................................272

4. Judgment In Favor Of Cigna .....................................................................273

E. Cigna’s Claim Against Anthem For Breach Of The Regulatory Efforts Covenant...

.......................................................................................................................273

1. Cigna’s Claim Regarding The Blues Rules...............................................273

2. Cigna’s Claim Regarding The $704 Million In Efficiencies ....................288

3. The Effect-Of-Termination Provision.......................................................289

4. Judgment In Favor Of Anthem..................................................................293

F. Cigna’s Claim Against Anthem For Failing To Pay The Reverse Termination Fee .

.......................................................................................................................294

1. The Provisions Governing The Reverse Termination Fee ........................294

2. Cigna’s Attempt To Invoke The Temporal Termination Right ................300

3. Anthem’s Obligation To Pay The Fee Under The Termination Right For A 

Cigna Breach .............................................................................................304
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4. Judgment In Favor Of Anthem..................................................................305

IV. CONCLUSION.......................................................................................................305
I. INTRODUCTION

Anthem, Inc., and Cigna Corporation entered into an Agreement and Plan of Merger 

dated July 23, 2015 (the “Merger Agreement”). Anthem agreed to pay total consideration 

of over $54 billion, reflecting a premium of 38.4% over Cigna’s unaffected market 

capitalization. At the time, Anthem and Cigna were the second and third largest health 

insurers in the United States. If completed, the resulting transaction would have created the 

nation’s largest health insurer (respectively, the “Merger” and “NewCo”).

The Merger Agreement contained covenants that obligated the parties to try to close 

the Merger (the “Efforts Covenants”). One covenant obligated the parties to use their 

reasonable best efforts to satisfy all of the conditions to closing and consummate the 

Merger (the “Reasonable Best Efforts Covenant”). Another covenant required that the 

parties take any and all actions necessary to avoid any legal impediment to the Merger that 

a governmental entity might raise (the “Regulatory Efforts Covenant”). A third covenant 

obligated the parties to cooperate in various ways when seeking regulatory approval and 

allocated authority over the regulatory approval process to Anthem (the “Regulatory 

Cooperation Covenant”). 

The parties’ obligations to consummate the Merger were subject to several 

conditions. The condition most pertinent to this case was the absence of any injunction that 

would prevent consummation of the Merger (the “No Injunction Condition”). 

The Merger failed to close. The United States Department of Justice (the “DOJ”) 

concluded that the Merger would have anticompetitive effects and declined to approve it. 
2

In July 2016, the DOJ sued to block the Merger (the “Antitrust Litigation”). In February 

2017, the United States District Court for the District of Columbia (the “District Court”) 

issued a permanent injunction that prevented the Merger from closing. United States v. 

Anthem, Inc., 236 F. Supp. 3d 171 (D.D.C. 2017) (the “District Court Opinion”). In April 

2017, the United States Court of Appeals for the District of Columbia Circuit (the “DC 

Circuit Court”) affirmed the District Court Opinion. United States v. Anthem, Inc., 855 

F.3d 345 (D.C. Cir. 2017) (the “Circuit Court Opinion” and together with the District Court 

Opinion, the “Antitrust Decisions”). 

After the issuance of the District Court Opinion, but before the issuance of the 

Circuit Court Opinion, Cigna purported to terminate the Merger Agreement. Cigna 

simultaneously filed this litigation, in which it sought to establish its right to terminate the 

Merger Agreement. Anthem filed its own lawsuit in this court to keep the Merger 

Agreement in place so that it could appeal from the District Court’s decision, and this court 

entered a temporary restraining order enjoining Cigna from terminating the Merger 

Agreement. After the issuance of the Circuit Court Opinion, this court denied Anthem’s 

application to convert the temporary restraining order into a preliminary injunction, but 

stayed its ruling and kept the temporary restraining order in place to give Anthem an 

opportunity to appeal this court’s decision to the Delaware Supreme Court.

On May 12, 2017, Anthem decided not to appeal and contemporaneously issued a 

notice terminating the Merger Agreement. That same day, Cigna issued another 

termination notice. The parties disagree about the effects of the competing notices, but they 

agree that the Merger Agreement was terminated as of May 12.
3

The cases that Cigna and Anthem had filed were consolidated, and this litigation 

continued as a damages action. Anthem contended that Cigna breached its obligations 

under the Efforts Covenants and sought expectation damages of $21.1 billion. Cigna 

contended that Anthem breached its obligations under the Regulatory Efforts Covenant and 

sought expectation damages of $14.7 billion. Cigna separately sought to recover a reverse 

termination fee in the amount of $1.8 billion (the “Reverse Termination Fee”).

Anthem proved that Cigna breached its obligations under the Efforts Covenants. 

Rather than seeking to complete the Merger, Cigna sought to derail it.

David Cordani, Cigna’s CEO, and the other members of Cigna’s executive 

leadership team (the “Cigna ELT”) originally favored a deal with Anthem, but they 

envisioned a transaction in which they would lead NewCo and Cordani would become 

CEO. During the negotiations that led to the Merger Agreement, Cordani tried to secure 

the role of CEO, but Cigna also demanded a significant premium for its stockholders. 

Anthem agreed to pay a premium, but insisted that its CEO, Joseph Swedish, would serve 

as NewCo’s CEO. Anthem agreed that Cordani would serve as NewCo’s President and 

COO. Cordani understood that he would succeed Swedish as NewCo’s CEO.

After the parties signed the Merger Agreement, Anthem acted like an acquirer and 

sought to engage in detailed integration planning. In December 2015, as part of that 

process, Swedish tried to begin conducting interviews that would lead to the selection of 

the NewCo executive leadership team (the “NewCo ELT”). The Cigna ELT resisted 

Anthem’s approach to integration planning, and they reacted angrily to Swedish’s attempt 

to start the interviews. 
4

Anthem’s executive leadership team (the “Anthem ELT”) did not take well to 

Cigna’s resistance. After an exchange of accusatory emails, Swedish decided to reduce the 

scope of Cordani’s responsibilities in NewCo and make clear that he was not the only 

potential successor as CEO. Swedish communicated this message to Cordani during a 

meeting on January 11, 2016. 

The Cigna ELT perceived Swedish to be launching a hostile takeover of Cigna. 

They crafted a detailed and sophisticated response, codenamed “Project Alpha,” to restore 

the scope of Cordani’s responsibilities and his path to CEO. Cigna skillfully presented its 

narrative of events at the first gathering of the designees who would serve on the NewCo 

Board. Anthem’s designees sympathized with Cigna’s position and forced Swedish to defer 

selecting the NewCo ELT, but the meeting did not result in the specific commitments that 

Cigna wanted. 

The Cigna ELT decided to escalate. They had identified integration planning as a 

pressure point to use against Anthem. In late February 2016, Cigna withdrew from the 

integration planning process and limited its efforts to “Day 1 activities,” i.e., those activities 

necessary to facilitate NewCo’s ability to operate immediately after closing. Despite taking 

these steps, the Cigna ELT still had not turned definitively against the Merger. They would 

have supported the Merger if Anthem had stopped acting like an acquirer and started 

treating the transaction as a merger of equals, including by giving substantial deference to 

the Cigna ELT’s views. 

Rather than causing Anthem to stand down, Cigna’s escalation reinforced the 

Anthem ELT’s concerns about Cordani and his team. The parties’ positions became 
5

increasingly adversarial, and the Cigna ELT turned definitively against the Merger. There 

is no signpost marking exactly when this happened, but by late March and early April 2016, 

the Cigna ELT wanted the transaction to fail so they could continue managing Cigna as an 

independent company. 

In June 2016, the DOJ informed the parties that it had major concerns about the 

Merger. Anthem sought to line up divestitures to address the DOJ’s concern about 

excessive concentration and monopsony in thirty-five local markets. The divestitures 

would not have addressed the DOJ’s concern about excessive concentration in the market 

for national accounts. It therefore was unlikely that the divestitures would have resulted in 

an overall settlement, but they would have strengthened Anthem’s position with the DOJ 

and in the ensuing Antitrust Litigation. Cigna obstructed Anthem’s efforts to line up 

divestitures. Through its interactions with the DOJ, Cigna signaled that it opposed the 

Merger, which emboldened the DOJ. 

In July 2016, the DOJ filed suit. Throughout the Antitrust Litigation, Cigna 

undermined Anthem’s defense. Cigna opposed Anthem’s efforts to mediate and took 

litigation positions that supported the DOJ. During his deposition and at trial, Cordani gave 

vivid testimony that was a boon to the DOJ. Cordani is a skilled communicator who does 

not inadvertently concede points to the opposition, and yet he provided exaggerated and 

unsupported testimony that bolstered the DOJ’s case. Cordani’s performance in the 

Antitrust Litigation contrasted sharply with his resistance during hostile cross-examination 

in this litigation. It is clear that during the Antitrust Litigation, Cordani intentionally 

testified in a manner that would help the DOJ obtain a decision blocking the Merger.
6

Cigna’s opposition to the Merger was so obvious that the District Court described 

it as the “elephant in the courtroom.” Dist. Ct. Op., 236 F. Supp. 3d at 183. The District 

Court noted that Cigna had joined the DOJ in “warning against” the Merger and cited “the 

doubt sown into the record by Cigna itself.” Id.

Although Anthem proved that Cigna breached the Efforts Covenants, Anthem failed 

to prove that Cigna’s breaches led to causally related damages. The Antitrust Decisions 

caused the No Injunction Condition to fail, meaning that the parties never became obligated 

to close. To prevail on a claim for breach of the Efforts Covenants, Anthem therefore had 

to prove that Cigna’s breaches of the Efforts Covenants contributed materially to the failure 

of the No Injunction Condition. Anthem did not have to prove that the Merger would have 

been approved but for Cigna’s breaches, only that Cigna’s breaches made approval less 

likely. Once Anthem made this showing, Cigna had the burden of proving that even if it 

had fulfilled its obligations under the Efforts Covenants, the No Injunction Condition 

would have failed. 

Both steps in the causation analysis are difficult to conduct in such a complex and 

multi-faceted case. On balance, Anthem proved by a preponderance of the evidence that 

Cigna’s breaches of the Efforts Covenants contributed materially to the failure of the No 

Injunction Condition. Cigna’s withdrawal from integration planning, its opposition to 

divestitures, its resistance to mediation, and its undermining of Anthem’s defense in the 

Antitrust Litigation made it less likely that the condition would be satisfied. Cigna, 

however, proved by a preponderance of the evidence that even if it had fulfilled its 

obligations under the Efforts Covenants, the DOJ still would have sought to block the 
7

Merger based on its anticompetitive effects on the market for national accounts, the District 

Court still would have enjoined the Merger on that basis, and the DC Circuit Court still 

would have affirmed the District Court’s decision. Cigna thus proved that the No Injunction 

Condition would have failed in any event. Judgment will be entered in Cigna’s favor on 

Anthem’s claims for breach of the Efforts Covenants.

For its part, Cigna failed to prove that Anthem breached its obligations under the 

Regulatory Efforts Covenant. Anthem sought at all times to complete the Merger. Cigna 

disagreed with Anthem’s strategy in real time, and with the benefit of hindsight, it is easy 

to criticize Anthem’s approach to obtaining regulatory approval. Anthem nevertheless 

chose a sound strategy and took all of the actions necessary and appropriate to pursue it. 

Judgment therefore will be entered in Anthem’s favor on Cigna’s claims.

Assuming for the sake of argument that Cigna had proved that Anthem breached the 

Regulatory Efforts Covenant, Cigna still could not recover damages. Under the language 

of the Merger Agreement, termination extinguished any liability on the part of any party 

except for damages for “Willful Breach.” The Merger Agreement defined that term as 

conduct that both constituted a material breach and which the breaching party subjectively 

knew would constitute a material breach. Cigna’s breaches of the Efforts Covenants were 

so strikingly egregious that Anthem would have proven a Willful Breach if those breaches 

had resulted in damages. The same is not true of Anthem’s conduct. Assuming that 

Anthem’s regulatory efforts fell short, the evidence demonstrates that Anthem attempted 

in good faith to consummate the Merger. 
8

Finally, Cigna failed to prove that Anthem is liable for the Reverse Termination Fee. 

Anthem validly terminated the Merger Agreement under a termination right that did not 

trigger the fee. Anthem’s termination preceded Cigna’s termination, foreclosing Cigna’s 

ability to recover the fee. Cigna understandably complains that a race to termination should 

not determine its entitlement to a fee. In this case, the race only occurred because Anthem 

continued attempting to close the Merger even after Cigna’s breaches of the Efforts 

Covenants had caused Anthem’s termination right to ripen. Had Anthem not been so 

committed to completing the Merger, then Anthem could have terminated the Merger 

Agreement long before Cigna gained a right to terminate. Judgment will be entered in 

Anthem’s favor on Cigna’s claim for the Reverse Termination Fee.

This outcome leaves the parties where they stand. Neither side can recover from the 

other. Each must deal independently with the consequences of their costly and ill-fated 

attempt to merge.

II. FACTUAL BACKGROUND

The evidentiary record is vast. During a ten-day trial, seventeen fact witnesses and 

four experts testified live. The parties introduced 4,611 exhibits and lodged 111 deposition 

transcripts, 103 from fact witnesses and eight from experts.1

 

1 Citations in the form “PTO ¶ ––” refer to stipulated facts in the pre-trial order. See 

Dkt. 641. Citations in the form “[Name] Tr.” refer to witness testimony from the trial 

transcript. Citations in the form “[Name] Dep.” refer to witness testimony from a 

deposition transcript. Citations in the form “JX –– at ––” refer to a trial exhibit with the 

page designated by the last three digits of the control number or internal page number. If a 

trial exhibit used paragraph numbers or sections, then references are by paragraph or 

section. Many trial exhibits consist of an email with attachments, and many of those use 

inconsistent numbering systems, with control numbers appearing on the email but not on 
9

The evidentiary landscape is even more expansive than this already considerable 

volume of documents and testimony might suggest, because much of this litigation 

concerned the parties’ conduct during the DOJ’s investigation and the Antitrust Litigation. 

The DOJ investigation was massive, involving the production of terabytes of information 

and the taking of forty-one depositions, seven of which were introduced as exhibits in this 

case. Discovery in the Antitrust Litigation involved another 115 depositions and fourteen 

expert reports. The parties introduced seven of those depositions and three of the expert 

reports as exhibits in this case. The District Court conducted a lengthy bench trial that 

began on November 21, 2016, and ended on January 4, 2017. The District Court bifurcated 

the trial, first addressing the market for the sale of commercial healthcare insurance to 

national accounts, and then addressing the market for the sale of commercial healthcare 

insurance to large employers in thirty-five local markets. The District Court heard 

testimony from sixteen fact witnesses in the first phase and thirteen fact witnesses in the 

second phase. Five experts testified in one phase and four in the other. See Dist. Ct. Op., 

237 F. Supp. 3d at 187. The transcript from the trial in the District Court is part of the 

record in this case. The parties also introduced into evidence five depositions from a 

multidistrict antitrust litigation involving the Blue Cross Blue Shield Association (the 

 

the attachments. For those exhibits, this decision uses a compound citation format such as 

“JX  at  & [subdivision] ,” where the “[subdivision] ” refers to the attachment. 

To constrain the proliferation of footnotes, citations to single authorities appear in the text. 

In some instances, typically involving short paragraphs or background information, the 

supporting citations for a paragraph are collected in a single footnote.
10

“Blues Association”), which is pending in the United States District Court for the Northern 

District of Alabama (the “Blues MDL”).

The events at issue began in early 2014 and continued through mid-2017, yet the 

parties only agreed to 187 stipulated facts in the pre-trial order. Most appeared to be drawn 

from the joint proxy statement that the parties prepared to obtain stockholder approval for 

the Merger. The parties did not agree on any stipulations of fact for the crucial period from 

January 11, 2016, to June 10, 2016, when their relationship deteriorated profoundly. 

One complication of such a vast record (and the relative shortage of factual 

stipulations) is a multitude of evidentiary conflicts. On many issues, a substantial body of 

evidence flows in one direction, but there are invariably documents and testimony that 

resist the current. When it suited their purposes, both sides proved adept at emphasizing 

the contrarian evidence. It has been challenging to evaluate the record as a whole and 

determine what actually occurred. This decision has erred towards the fulsome (in both 

senses of the word) in an effort to present what the weight of the evidence shows.

Further complicating the fact-finding process, the key witnesses suffered from 

serious credibility problems. This decision addresses some of the major issues in the text 

and cites others in footnotes. A general overview is nevertheless helpful in framing the 

challenges that this case presented.

Cigna’s credibility problems stemmed initially from Cordani’s self-interested 

conduct during the negotiations that led to the Merger Agreement. Throughout this 

litigation, Cordani denied the positions he took. From a human standpoint, that was 

understandable, but it caused Cordani to give implausible testimony on a series of issues. 
11

Nicole Jones, Cigna’s General Counsel, testified in lockstep with Cordani on these and 

other issues, damaging her credibility as well.

Cordani and the Cigna ELT later turned against the Merger, giving rise to a different 

set of credibility issues. To resist Anthem’s attempts to complete the Merger, the Cigna 

ELT adopted stances that conflicted with the positions that they had taken when Cordani 

thought that he had a path to become CEO. In this litigation, Cigna’s witnesses often gave 

less than credible testimony when attempting to justify their changes of positon.

The Cigna ELT’s resistance to the Merger also gave rise to another credibility issue. 

The Cigna ELT could not openly undermine the Merger without advertising that Cigna was 

breaching its obligations under the Efforts Covenants, so the Cigna ELT worked to hide 

their efforts and manufacture an alternative narrative. In that substitute storyline, Cigna 

tried hard to complete the Merger but was thwarted by Anthem’s incompetence. 

For help in crafting the alternative narrative, the Cigna ELT retained a cadre of 

additional advisors, including Teneo Holdings, a strategic communications and consulting 

firm. Evidencing the covert nature of the anti-Merger effort, the Cigna ELT treated the 

hiring of the additional advisors a closely guarded secret and hid their work against the 

Merger from the Cigna Board. During this litigation, Cigna withheld evidence of Teneo’s 

anti-Merger activities under claims of privilege. Once revealed, that evidence eliminated 

any doubt about whether the Cigna ELT had attempted to prevent the Merger from closing. 

Cigna witnesses struggled when testifying about the anti-Merger work that their advisors 

performed, further damaging their credibility.
12

Anthem’s credibility problems matched Cigna’s, but had their roots in the opposite 

motivation. The Anthem ELT strived to complete the Merger. Unfortunately, the Anthem 

executives’ desire to consummate the transaction led them to make statements, advance 

arguments, and give testimony that were at times questionable, at other times unsupported, 

and on some occasions untrue. 

For example, when testifying in depositions taken by the DOJ, when speaking about 

the Merger in a media interview after the filing of the Antitrust Litigation, and when 

testifying at trial in the Antitrust Litigation, Swedish spoke positively about his relationship 

with Cordani, the level of cooperation between the parties, and the absence of any disputes 

between Anthem and Cigna. Those statements were inaccurate. At trial in this action, Cigna 

repeatedly impeached Swedish with his prior testimony from the DOJ investigation and 

the Antitrust Litigation and with internal Anthem documents.

Thomas Zielinski, Anthem’s then-General Counsel, likewise made positive 

comments to the public markets about the level of cooperation between the parties that are 

inconsistent with the record. He gave optimistic predictions to the DOJ about the prospect 

of settlement in the Blues MDL, but in this litigation, he was forced to concede that he had 

no factual basis for those statements. Cigna successfully impeached Zielinski’s testimony 

on other issues as well. 

During the Antitrust Litigation, Anthem witnesses gave testimony on a variety of 

subjects that the District Court found unpersuasive, and the District Court Opinion 

repeatedly noted that the testimony from Anthem’s witnesses conflicted with Anthem’s 

internal documents. See, e.g., Dist. Ct. Op., 236 F. Supp. 3d at 182, 19798, 210, 258 n.63.
13

Worse, in its zeal to defend the Antitrust Litigation, Anthem maintained that it was still 

considering exercising the so-called “affiliate clauses” in its provider agreements, id. at 

233, even though the Anthem ELT had decided not to do so. Anthem’s position was 

technically accurate because Anthem could have revisited the decision or exercised the 

clauses on a case-by-case basis, but Anthem was not fully candid with the District Court. 

Fortunately, the District Court recognized that Anthem was unlikely to exercise the clauses 

and did not credit Anthem’s litigation position. Id. at 18283, 239 & n.40, 244.

Like Cigna, Anthem took positions during discovery that undermined its credibility. 

Throughout the Antitrust Litigation and initially in this litigation, Anthem claimed that the 

Blues Association had created a special task force to address issues related to the Blues 

MDL, making the task force’s documents privileged. That was not true. The special task 

force was created to address the Merger.

Both sides anticipated this lawsuit, and they engaged in careful record-making to 

prepare for it. Cigna began this process in February 2016, when it retained its cadre of 

additional advisors. From that point on, it is difficult to accept at face value certain carefully 

crafted and heavily vetted documents, such as Cigna’s board minutes, formal presentations, 

and dispute letters with Anthem. That is not to suggest that the documents were fabricated 

or fraudulent, only that the language in these documents was chosen for the impression it 

would create and must be read in light of what the larger record shows. 

Anthem was slower on the draw with record-making and seems to have engaged in 

it to a lesser degree. By May 2016, however, Anthem had brought on a litigator who 

reviewed and commented on key documents, such as Anthem’s dispute letters with Cigna. 
14

Anthem’s record-making behavior was less serious than Cigna’s, both because it started 

later and because the Anthem ELT and its advisors were not as skilled at it. They identified 

and objected in real time to problems that Cigna was creating. Cigna manufactured a 

narrative to conceal and, if necessary, justify its opposition to the Merger. Anthem operated 

linearly; Cigna operated in three dimensions. 

The standard of proof on all issues was a preponderance of the evidence. Because 

both sides advanced claims for breach of contract, the allocation of the burden of proof was 

complex. Each side claimed that its counterparty breached the Efforts Covenants. For 

purposes of those claims, the party asserting breach bore the burden of (i) proving the facts 

necessary to establish breach and (ii) showing that that the breach contributed materially 

to the failure of the No Injunction Condition. Once a party carried that burden, then the 

breaching party bore the burden of proving that the No Injunction Condition would have 

failed even if the breaching party had fulfilled its obligations. Cigna bore the burden of 

proving the facts supporting its claim for the Reverse Termination Fee, including the valid 

exercise of a termination right that would trigger Anthem’s obligation to pay the fee. 

A. The Parties

During the period relevant to this case, Anthem and Cigna were two of the nation’s 

five largest providers of private health insurance. The other major players were Aetna, 

United Healthcare, and Humana.
15

As of December 31, 2015, Anthem managed health insurance plans covering 

approximately 38.6 million individuals, making it the nation’s second largest health 

insurer. Anthem was the largest member of the Blues Association.2

The Blues Association owns the Blue Cross and Blue Shield trademarks (the “Blues 

brands”), which it licenses to thirty-six member plans to use in exclusive service areas.

Each member has the exclusive right to use the Blues brands within its service area. Outside 

of its service area, each member can access its fellow members’ networks, which allows 

each member’s customers to receive nationwide coverage.3

The Blues Association has established rules that its members must follow to use the 

Blues brands and access their fellow members’ networks (the “Blues Rules”). Under the 

National Best Efforts Rule, each member must use its best efforts to generate at least 

66.67% of its total annual revenue using the Blues brands (the “NBER” or “2/3 Rule”). 

The CEOs of the member companies comprise the board of directors of the Blues 

Association (the “Blues Board”) and administer the Blues Rules.4

 

2 PTO ¶¶ 20–21, 63; see JX 846 at ’342. Until 2014, Anthem was known as 

Wellpoint, Inc. See JX 39 at ’207. For simplicity, this decision refers only to Anthem.

3 See JX 581 at ’719; JX 4147 at ’676.

4 See PTO ¶ 92; JX 4147 at ’629, ’631, ’651. There is also a Local Best Efforts Rule, 

which requires that each member use its best efforts to generate at least 80% of its annual 

revenue using the Blues brands in the territories where it holds an exclusive Blues license. 

Compliance with the Local Best Efforts Rule was not a significant issue for NewCo, and 

so it did not figure prominently in this case.
16

Anthem held exclusive licenses to use the Blues brands in all or part of fourteen 

states (the “Anthem Blue States”).5In other states, Anthem marketed its plans under nonBlues brands, such as Amerigroup, Simply, and CareMore. Anthem enjoyed comparatively 

little success marketing products under its non-Blues brands. Anthem derived the vast 

majority of its revenue by selling products under the Blues brands in the Anthem Blue 

States. Within those states, Anthem used its size to negotiate deep discounts from 

healthcare providers. Anthem’s business model relied on its discounts to attract and retain 

customers. To service national accounts, Anthem relied on its membership in the Blues 

Association.6

Cigna’s business model was different. As of December 31, 2015, Cigna covered 

approximately 13 million members, making it the third largest health insurer in the United 

States. Unlike Anthem, Cigna had a national network of providers covering all fifty states. 

Because Cigna was smaller and its members were more geographically dispersed, Cigna 

often could not obtain the lowest discounts from providers. Cigna instead specialized in

“value-based” care. Under that model, Cigna worked with providers to establish measures 

of overall patient health, then paid providers for improving those metrics. The value-based 

 

5 PTO ¶ 22. The fourteen Anthem Blue States are “California (Blue Cross license 

only), Colorado, Connecticut, Georgia, Indiana, Kentucky, Maine, Missouri (excluding 

thirty counties in western Missouri), Nevada, New Hampshire, New York (excluding 

certain areas), Ohio, Virginia (excluding certain counties near Washington, D.C.), and 

Wisconsin.” Dist. Ct. Op., 236 F. Supp. 3d at 185 n.1.

6 See PTO ¶¶ 21, 63, 90; Dist. Ct. Op., 236 F. Supp. 3d at 185–86; JX 36 at ’158; 

JX 581; JX 1948 at ’303.
17

model required more engagement from providers, but could lower the total cost of care 

through improved health outcomes.7

Using its value-based model, Cigna nearly doubled its revenue between 2010 and 

2015, growing at a rate of 14% annually. During the same period, Anthem’s growth 

hovered around 3% annually, the lowest growth rate in the industry.8

B. Merger Talks In 2012

In August 2012, Cordani contacted Swedish’s predecessor about a merger. Because 

Anthem derived the vast bulk of its revenue from Blue-branded plans, it was essential that 

Anthem’s licenses to use the Blues brands remain in place. The Blues Rules required 

consent from the Blues Association for any acquisition of a member plan. To avoid the 

consent requirement and preserve its licenses, Anthem needed to be the surviving legal 

entity in any transaction and continue as NewCo.9

Cordani envisioned a transaction in which Anthem would nominally be the acquirer, 

but he and the Cigna ELT would manage NewCo. On December 27, 2012, Cigna proposed 

a stock-for-stock merger that would result in Anthem’s stockholders owning 55% of 

NewCo’s equity. Seats on the NewCo Board would be split equally between Anthem and 

 

7 PTO ¶ 24; Dist. Ct. Op., 236 F. Supp. 3d at 178, 230–31.

8

JX 298 at ’495; JX 518 at ’792–93.

9 See PTO ¶ 90; JX 24; Zielinski Tr. 17879.
18

Cigna, and leadership would rest with Cigna. Cordani, would be the CEO, and Ike Harris, 

Cigna’s Chairman, would chair the NewCo Board.10

Anthem viewed Cigna’s proposal as opportunistic: Cigna stock was trading near alltime highs, while Anthem’s stock price was depressed. The Anthem Board decided not to 

pursue a transaction.11

During the discussions, the parties recognized that NewCo would have to comply 

with the 2/3 Rule. They understood that if NewCo was not initially in compliance with the 

2/3 Rule, then it would have 120 days to provide the Blues Association with an action plan 

for achieving compliance. A committee of the Blues Board would review the action plan 

and make a recommendation to the Blues Board. The action plan then would have to be 

approved by the Blues Board and the members of the Blues Association. Once the action 

plan was approved, then NewCo would have two years from the date of approval to achieve 

compliance.12

 

10 See PTO ¶ 94; JX 23.

11 See JX 24 at ’202; JX 26. Cordani testified that Anthem declined to proceed in 

2012 because of “some complications with the Blues Rules that [Anthem was] 

confronting.” Cordani Tr. 1751. That testimony was inaccurate. It was part of Cigna’s 

effort throughout this litigation to portray the Blues Rules as always having been an 

insurmountable obstacle to a transaction. Although the parties identified the Blues Rules 

as an issue for consideration in 2012, they did not view them as an impediment. Anthem 

declined to pursue discussions for reasons other than the Blues Rules. See JX 43; see also

JX 24; JX 25.

12 See PTO ¶ 93; JX 846 at ’357; JX 1103 at ’394 & slide 3; Serota Tr. 2826–27.
19

C. Merger Talks In 2014

In March 2013, Swedish became CEO of Anthem. In early 2014, Cordani reached 

out to Swedish to see whether he would be open to a deal.13

Strategically, both Anthem and Cigna recognized that the already-consolidated 

market for health insurance companies left a limited number of “pieces on the 

chessboard.”

14 Both Anthem and Cigna believed that the next major transaction could be 

the last one that antitrust regulators would approve.15

Anthem noted that any deal would “require navigating the Blue’s [sic] quagmire . . 

. .” JX 28 at ’411. As a standalone entity, Anthem easily satisfied the 2/3 Rule. But after a 

combination with Cigna, NewCo would only generate 53% of its revenue using the Blues 

brands, falling short of the two-thirds requirement.16 Cigna cited the Blues Rules as one of 

the “Integration Considerations” for a deal with Anthem and noted that to obtain antitrust 

approval, NewCo’s “[l]ocal market depth may require divestitures.”

17

 

13 See PTO ¶¶ 96–97; Cordani Tr. 1752.

14 JX 28 at ’411 (internal quotation marks omitted); accord JX 46 (Anthem 

analysis); JX 78 (Cigna analysis).

15 See JX 46 at 14; JX 78 at ’715.

16 JX 46 at ’994–95 & slide 16; JX 98 at ’964; JX 138 at ’646.

17 JX 78 at ’721; see Gray Dep. 294 (Apr. 2017) (agreeing that during 2014 and 

early 2015, Cigna contemplated divestitures as part of transaction with Anthem); id. at 322 

(agreeing that the divestitures “would include Cigna or Cigna-associated accounts and 

clients”).
20

Zielinski, Anthem’s General Counsel, was initially skeptical about NewCo’s ability 

to comply with the 2/3 Rule. In an internal email to other Anthem executives, he offered 

his “preliminary thoughts” on the risks of entering into a deal with Cigna on “an expedited 

timeline.” JX 62. He explained that Anthem should assume that the 2/3 Rule would remain 

in effect at closing, meaning that NewCo would have to divest business to achieve 

compliance. He also identified two outside-the-box alternatives. One was for NewCo to 

terminate its membership in the Blues Association, which would trigger a termination fee 

of $2.4 billion, deprive NewCo of access to the Blues network, and jeopardize all of 

Anthem’s Blues-based revenue. The other was for NewCo to tell the Blues Association 

that it would not comply with the 2/3 Rule on the grounds that it violated the antitrust laws, 

leading to a lawsuit either by the Blues Association to enforce the Blues Rules or by 

Anthem to invalidate them. Zielinski believed the possibility of litigation against the Blues 

Association would “cause irreparable damage and harm to [Anthem] within the 

Association and amongst [the] Plans,” which would “damage [or] negatively impact 

[Anthem’s] ability to do business.” Id.

Zielinski agreed that “[t]he economics of the transaction” with Cigna were “very 

compelling and [would] generate substantial shareholder value” and thus concluded that 

“this transaction needs to be pursued.” JX 66. But he also believed that the 2/3 Rule posed 

an “insurmountable barrier to doing the transaction” in the near term because “the 

economics of the transaction are NOT compelling if we need to divest assets to comply 

with the [2/3 Rule].” Id.
21

Zielinski instead identified a possible strategy for eliminating or modifying the 2/3 

Rule, which would clear the way for a transaction in the future. The plaintiffs in the Blues 

MDL (where Anthem was a defendant) had challenged the 2/3 Rule as an illegal restraint 

on competition, and their claims had survived a motion to dismiss. See In re Blue Cross 

Blue Shield Antitrust Litig., 26 F. Supp. 3d 1172, 1179 (N.D. Ala. 2014). Zielinski 

recommended pursuing a transaction “AFTER the resolution of the Blues [MDL] since it 

is highly likely that the resolution will substantially modify, if not eliminate, the [2/3 

Rule].” JX 66. 

Zielinski also recognized that the strategic situation might change and that 

“[e]xternal actions/factors may dictate that we would have to pursue the transaction 

BEFORE a resolution of the Blues [MDL] and thus, a modification or elimination of the 

[2/3 Rule] will not have occurred.” Id. He observed that it would likely take between nine 

and twelve months to get from a signed transaction agreement to closing, and that after 

closing, NewCo would have at least two years to comply with the 2/3 Rule. He concluded, 

“Thus, we have a window of 33 to 36 months to resolve the Blues [MDL] which [is] more 

than adequate time to get the litigation settled.” Id. He posited that

In the unlikely scenario that the settlement of the litigation does not modify 

or eliminate the [2/3 Rule], we need to be prepared to challenge the 

enforcement of the [2/3 Rule] with respect to the transaction. Obvious risks 

are (1) the hostility created w/n the Association towards [Anthem]; (2) our 

challenge to the [2/3 Rule] is unsuccessful which would require us to divest 

assets to become compliant with the [2/3 Rule]; or (3) the termination of our 

Blue licenses which has material financial/business consequences.

Id.
22

The Anthem ELT communicated to their Cigna counterparties that they had “looked 

at many different scenarios . . . which would avoid the application of the [2/3 Rule] and 

have concluded that there is no structure or design which accomplishes that goal.” JX 76 

at ’649. The question therefore was whether to pursue a transaction “even if the [2/3 Rule] 

applies.” Id. At that point, Anthem did not regard that path as a viable option.18

Cigna was more bullish. Cigna viewed the issues presented by the 2/3 Rule as 

manageable, with the primary solution being to rebrand Cigna revenue in the Anthem Blue 

States.19 In a presentation to the Cigna Board, the Cigna ELT reported that compliance 

 

18 See JX 74; JX 76; JX 94 at ’927. Swedish inexplicably testified at trial that he did 

not believe that the 2/3 Rule would affect a transaction with Cigna in any way, shape, or 

form. Swedish Tr. 1144. He also claimed that he did not know whether NewCo would be 

in compliance with the 2/3 Rule after closing. Id. at 1144–45. That testimony was not 

credible. 

19 JX 81; see, e.g., JX 79 (analyzing NewCo’s compliance with the 2/3 Rule for 

Cigna CFO; noting “[t]o avoid being in default, [NewCo] would need to rebrand revenue 

and members; practically this means moving [Cigna] members in [Anthem Blue States] to 

a product written on a blue license and using the BlueCard network instead of ours”; 

observing that “[r]egulatory divestitures would be best from Cigna and dollar for dollar 

reduce the exposure to the [Blues] Rules”; commenting that “[c]omplying will mean 

reduced volumes to our network outside of the license states”); JX 87 (Cigna CFO 

anticipating “a high degree of success in moving the C[igna] business in the [Anthem Blue

States] to a branded status”); JX 91 at ’16364 (Cigna analysis of the 2/3 Rule); JX 97 at 

’344 (talking points for update to Cigna Board; noting that there “did appear there was a 

path to comply with the [Blues] rules” and that “actions to comply with the rules” included 

“[r]ebranding of acquired C[igna] members,” “[a]djusting growth strategies,” and 

“[p]otential deal structure alternatives”); JX 98 (Cigna executive’s summary of the 2/3 

Rule for Cordani noting that NewCo would “fail the revenue test at ~57/43” and that “[t]o 

resolve this, we would need to rebrand between 23 and 27% of revenue nationally and 

between 64 and 73% of [Cigna] revenue in the [Anthem Blue States] (the most likely 

lever)”; “Initial view [of both parties] is enough C[igna] revenue can be rebranded to come 

into compliance with [2/3 Rule] in the short term”); see also JX 64 at ’182 (Cigna notes on 

Blues Rules, indicating that primary lever is to “rebrand local C[igna] business”); JX 94 at 

’928 (“Although more homework to be done, did appear there was a path to comply with 
23

could be achieved by having “[Cigna] business in Blue licensed territories . . . substantially 

migrate to Blue business, resulting in compliance with the [2/3 Rule] at or shortly after 

closing.” JX 105 at ’751. The Cigna ELT also reported that “[Cigna] business in non-Blue 

licensed territories may have to be divested.”

20 Cigna concluded that the termination of 

Anthem’s Blues licenses “would be significantly damaging to [NewCo] from a business 

perspective and require a substantial out-of-pocket payment.” Id. at ’752. 

Ultimately, Cigna agreed with Anthem that “the best path” was to wait until the 2/3 

Rule was altered or eliminated through a settlement in the Blues MDL. Like Anthem, 

however, Cigna “wanted to be ready . . . to move sooner” in response to industry 

consolidation.21

The parties therefore continued moving forward with due diligence and discussing 

how NewCo could comply with the 2/3 Rule.22 Cigna consistently identified the primary 

levers for achieving compliance as (i) divestitures of non-Blue-branded business, i.e., 

portions of Cigna’s operations or Anthem’s non-Blue-branded plans, and (ii) “rebranding”

 

the [Blues Rules]”); id. at ’929 (“Agreed we likely could get into compliance, and while 

growth limitations would erode some value, there was still significant value in a 

combination.”).

20 Id. After the Cigna ELT began opposing the Merger, Cigna expressed different 

views regarding these issues.

21 JX 81; accord JX 94 at ’928; Zielinski Tr. 1516.

22 PTO ¶ 101; see, e.g., JX 134; Zielinski Tr. 12–14, 139–41.
24

non-Blue-branded business as Blue-branded business, which generally meant moving 

Cigna members in the Anthem Blue States onto Anthem plans.23

In February 2015, Anthem put the discussion on hold.24 The Blues Rules played a 

role in Anthem’s decision, but not because NewCo could not achieve compliance. Both 

Anthem and Cigna believed that the Blues Rules and the Blues MDL created an excessive 

level of interloper risk.25 At that point, Anthem did not see a transaction happening 

“anytime soon.” JX 150. 

D. The Path To The Merger Agreement

After Anthem called off the talks, Cigna made a bid for Humana. Humana rejected 

Cigna’s bid, but said it was launching a limited sale process.26

Anthem believed that Humana’s sale process would be the catalyst for a final round 

of industry consolidation, and Anthem did not want to be left without a merger partner. 

Anthem decided “it was time to reengage in discussions with Cigna about a potential 

combination.” PTO ¶ 111. Although the risks that caused Anthem to call off discussions 

ten weeks earlier had not changed, Anthem believed that they were outweighed by “the 

risk of being left out of the remaining consolidation in the health benefits industry . . . .”

27

 

23 See, e.g., JX 98 at ’964; JX 119 at ’88485; JX 3121 at ’376; Zielinski Tr. 1416.

24 PTO ¶ 108; JX 150; Swedish Tr. 1154.

25 See JX 150 at ’762; JX 154; see also JX 81; Zielinski Tr. 16, 18; Gray Tr. 1638.

26 See PTO ¶ 110; JX 154.

27 Id. Cigna begins its account with Anthem’s outreach to Cigna and claims it was 

driven by Anthem’s need for growth. See Dkt. 700 at 7. That is a partial narrative. Cigna 
25

Swedish called Cordani to tell him that “Anthem wanted to aggressively reengage.”

PTO ¶ 112. Cordani was interested, but wanted to understand what had changed. PTO 

¶ 113. The main reason was the strategic imperative of consolidation, but Swedish felt that 

Anthem needed to address the 2/3 Rule. See JX 193. There was only one Blues-related 

development: The court in the Blues MDL had ordered the parties to mediate. See JX 172.

The mediation order did not play a meaningful role in Anthem’s decision to reengage.28 Swedish nevertheless told Cordani that “[t]here have been a number of recent 

developments which I was able to share with my Board last week that I would now like to 

share with you.” JX 172 at ’615. Those included:

 “We are moving forward on court ordered mediation [in the Blues MDL] and have 

the General Counsels of the various Blue Plans meeting in the next couple weeks to 

put forward a proposed ‘offer’ regarding modifications to the existing [Blues] rules 

that [the Blues Association] would be willing to offer as part of a settlement.” Id.

 “We are fully anticipating and intend to influence a modification to the current best 

effort rules as part of our settlement offer.” Id.

 “While we do not know the ultimate outcome of the mediation, we have shared this 

information with our Board along with the potential implications of us not being 

able to come to a satisfactory resolution in the near term.” Id.

 “We have also updated [our Board] regarding the changing landscape . . . and our 

belief that the timing of a proposed combination of our companies is at a uniquely 

beneficial stage.” Id.

 

had twice approached Anthem about a deal before Anthem’s outreach to Cigna, which was 

driven by strategic consolidation in the industry.

28 Zielinski Tr. 22728, 23233, 23738; Swedish Tr. 116163. Swedish and 

Zielinski also told the Anthem Board that the mediation affected their views on re-engaging 

with Cigna, which was, at best, an exaggeration. See JX 193; Zielinski Tr. 235–37; Swedish 

Tr. 1167–69.
26

 “Our Board is comfortable with the level of interloper risk that the [Blues MDL] 

had enhanced and believes that risk has diminished.” Id.

The Cigna ELT always had been more bullish than Anthem about the risks posed by the 

Blues Rules, so they willingly re-engaged. 

As with the talks in 2012, Cordani envisioned Anthem as “technically acquiring”

Cigna, but with Cigna management “tak[ing] control” of the combined entity.29 He 

anticipated a merger like JPMorgan’s acquisition of Bank One, JX 3001, where Bank One’s 

CEO, Jamie Dimon, was guaranteed the CEO role of the combined company two years 

after closing, JX 8. Cordani wanted to gain control “in a more accelerated way than 

BancOne [sic].”

30

Cigna developed talking points to convey to Anthem the type of offer that would be 

received favorably. Cigna’s number one objective was to “[c]learly articulate [its] position 

on [the] CEO role,” which was that Cordani needed to be CEO. JX 184 at ’188. A related 

goal was for “several of the other key management and integration positions to be identified 

and sourced from the talent pools at both organizations prior to announcement.”

31 Cigna’s 

number two objective was to “[s]ignal expectation for meaningful premium (i.e., greater 

 

29 JX 3001; see JX 183.

30 JX 3001; see JX 183.

31 Id. at ’189. After Cordani was unable to secure the CEO role, the Cigna ELT took 

a different position regarding the timing of the leadership selection process. See Part II.G, 

infra. The timing ultimately was a matter of judgment on which reasonable minds could 

disagree. Cigna’s changing positions were influenced by the personal interests of Cordani 

and the Cigna ELT.
27

than 10%).” Id. at ’188. Cigna’s third objective was to “creat[e] board / governance 

structure that is efficient, fair and balanced.” Id. 

1. The Non-Public Negotiations

On June 3, 2015, Anthem offered to pay $174 per Cigna share, reflecting a 28% 

premium over the market price. The consideration would consist of 40% cash and 60% 

stock, resulting in Cigna’s stockholders owning 40% of NewCo. Swedish would serve as 

the CEO and chairman of the NewCo Board. Cordani would be President and COO and 

serve as a director. Anthem envisioned a board of fourteen, with eight from Anthem and 

six from Cigna.32

On June 7, 2015, Cigna asked Anthem to raise its offer to the mid-$180s per share. 

Cigna countered that Cordani should be CEO. Cigna agreed that Swedish could chair the 

NewCo Board, but wanted an equal number of directors for Cigna. Cigna also wanted 

Cordani and Swedish to serve as co-chairs of the integration team, which would give 

Cordani influence over how NewCo was organized. PTO ¶ 118.

Over the following weeks, the parties went back and forth on price, the executive 

roles, and the board split. On June 10, 2015, Anthem raised its offer to $178 per share (a 

31% premium), consisting of 46% cash and 54% stock. Anthem agreed that Cordani and 

Swedish could co-chair the integration team, but did not change its other leadership and 

governance terms. On June 14, Cigna reiterated its demand for a price in the $180s and 

 

32 See PTO ¶ 116; JX 199. Anthem viewed these governance terms as “consistent 

with paying a premium” for Cigna. Zielinski Tr. 20.
28

proposed a board with eight Anthem designees and seven Cigna designees. PTO ¶¶ 120–

22. Cigna also asked for “additional clarity on leadership.” PTO ¶ 121. 

On June 16, 2015, Anthem stood on its prior offer. PTO ¶ 123. Internally, Swedish 

viewed Cigna’s pushback as a “charade” and wanted to “get aggressive.” JX 250. Anthem’s 

bankers were “surprised that [Cordani] hasn’t accepted such a shareholder friendly offer”

and encouraged Anthem to “assume he will be as aggressive as possible to either pursue 

H[umana] or use the blue rules” as a reason to reject a deal with Anthem. Id. Cordani’s 

insistence on the CEO role continued to be the major sticking point.33

On June 18, 2015, Cordani sent a letter to Swedish that reiterated Cigna’s demands. 

PTO ¶ 125; JX 261. Although Cordani stressed that he should “assume the role of Chief 

Executive Officer at closing,” Cordani referenced a proposal that Swedish had made for 

Cordani to start as President and COO and then transition to CEO. JX 261. Cordani wrote 

that Cigna was “open to working with [Swedish’s] proposal . . . if we can reach an 

acceptable position on our specific roles and responsibilities as well as the timing of the 

transition.”

34

 

33 See JX 251; JX 254; Zielinski Tr. 24.

34 Id.; see Cordani Tr. 1908.
29

By this point, the Anthem ELT was convinced that Cordani was blocking a deal to 

secure his path to CEO.35 Zielinski believed that Anthem needed to find a way “to get rid

of Cordani, for [Swedish’s] benefit, as well as the combined company’s future.”

36

Later on June 18, 2015, Anthem sent Cigna a best and final offer. Anthem met 

Cigna’s price demands by offering $184 per share (a 35.5% premium), payable 68.6% in 

cash and 31.4% in Anthem stock. The NewCo Board would include ten Anthem designees 

and three Cigna designees. The proposal did not contemplate any role for Cordani. Anthem 

asked Cigna to agree to two weeks of exclusivity, telling Cigna that it would break off 

discussions if Cigna did not agree by the next day.37

Confirming his focus on his own role, Cordani characterized Anthem’s proposal as 

going “backwards in many key areas,” notwithstanding the substantial increase in price.38

Thomas McCarthy, Cigna’s CFO, dismissed the proposal as “[n]ot constructive.” JX 273.

In a letter dated June 19, 2015, Cordani rejected Anthem’s request for exclusivity. 

He wrote that Cigna was willing to proceed at $184 per share, but only if Anthem agreed 

to a 50/50 mix of cash and stock and a NewCo Board with eight Anthem designees and six 

 

35 See JX 268; see also JX 231.

36 JX 268; see Zielinski Tr. 256–58.

37 PTO ¶¶ 126–27; JX 269; see Zielinski Tr. 3032; see also JX 299.

38 JX 271. Cordani testified implausibly that by referring to “key areas,” he meant 

regulatory issues. Cordani Dep. 722–23. The proposal did not address regulatory issues, 

and at trial, Cordani retreated from his deposition testimony. Cordani Tr. 1913–15. Cigna’s 

directors understood that the “backwards” moves referred to the changes to Cordani’s 

position and the number of Cigna designees. See Harris Dep. (Feb. 2019) 66–67; Partridge 

Dep. 173–74; Zollars Dep. 129–30.
30

Cigna designees. He accepted that Swedish would serve as CEO and chair, but asked for a 

succession plan under which Swedish would cede the CEO role after twelve months and 

the chair role after twenty-four months. PTO ¶¶ 128–129. 

After these exchanges, the parties discussed possible transition plans. Swedish was 

willing to step down as CEO after twenty-four months, but the Anthem Board would not 

commit to Cordani taking over as CEO. They were prepared to agree that if Cordani did 

not become the CEO, then he could terminate his employment and would be paid 

severance, but that was not acceptable to Cordani.39

2. Anthem’s Bear Hug Letter

On June 20, 2015, Anthem sent Cigna a public bear hug letter that reiterated its 

offer. Cigna’s directors and the Cigna ELT rallied around Cordani. They viewed Anthem 

as shortsighted for not having locked in Cordani as Swedish’s successor.40

 

39 See JX 281 at ’355. Despite the overwhelming evidence that Cigna focused 

primarily on securing the CEO role for Cordani, either immediately or through an agreedupon succession plan, Cordani testified that it was Anthem who wanted him to become 

CEO. See Cordani Tr. 1868–71 (impeaching Cordani with prior testimony). He also 

claimed that it was Swedish who wanted more Cigna directors on the NewCo Board. See 

Id. at 1871–74. At trial, Cordani claimed that Swedish never told him that the Anthem 

Board would not commit in advance to transition him to the CEO role. Id. at 1872. He also 

could not recall requesting supermajority voting requirements to protect his position and 

the Cigna designees, see id. at 1875–76, which Cigna had requested, see JX 261 at ’137; 

JX 274 at ’373; Zielinski Tr. 26. Cordani’s testimony on these points was contrary to the 

factual record. Jones was the only witness who backed Cordani’s assertions. See Jones 

Dep. 29–30; Jones Tr. 2708–10. Jones also claimed implausibly that she could not recall 

whether Cigna was interested in securing a position for Cordani. Jones Tr. 2709.

40 See JX 289; JX 291.
31

On June 21, 2015, Cigna responded with a public letter of its own. Cordani had 

instructed his team to shift the focus away from the struggle over the CEO position by 

attacking Anthem. See JX 300 at ’301. Cigna’s letter cited “Anthem’s lack of a growth 

strategy, complications relating to your membership in the [Blues Association] and the 

related antitrust actions, and other significant challenges, such as the massive data breach 

you experienced in February.” JX 298 at ’494. None of these issues had been points of 

discussion in the negotiations. See Zielinski Tr. 33–34.

Cigna’s letter also asserted that Cigna had “not been able to validate that a 

combination of Cigna and Anthem could be integrated successfully under the [Blues 

Rules], and the stakes are too high and the penalties too great to move forward without that 

validation.” JX 298 at ’496. That was inaccurate. The Blues Rules had not been a major 

negotiation point, and Cigna had been comfortable with NewCo’s ability to achieve 

compliance, both during the current round of negotiations and during the two prior rounds 

of discussions.41 The sticking points were Cordani’s role and the composition of the 

NewCo Board.42

The media played up the power struggle between Cordani and Swedish. Cigna 

investors complained that Cordani and the Cigna Board seemed to be impeding a deal 

based on how it affected them personally.43

 

41 See Part II.B & C, supra; Zielinski Tr. 33–34; Zollars Tr. 248485.

42 See Zollars Tr. 2483–84.

43 See JX 319; JX 321; JX 325; JX 333.
32

On June 23, 2015, Anthem made a further proposal, this time offering a mix of 60% 

cash and 40% stock and a NewCo Board consisting of nine Anthem designees and four 

Cigna designees. The proposal contemplated that Cordani would hold the roles of President

and COO.44

Cigna decided “not to engage” with Anthem’s offer. JX 327 at ’395. Instead, Cigna 

made an offer for Humana. PTO ¶ 136. But to hedge its bets, the Cigna Board instructed 

the Cigna ELT to “ask for a meeting” with Anthem to “better understand the risks of the 

[Blues] rules, the Blues [MDL], and [a recent Anthem] data breach, as well as to determine 

whether the companies had a common vision for the strategic direction of a combined 

company.” JX 327 at ’395–96.

On June 25, 2015, Bloomberg published an article reporting that Humana had 

received bids from Aetna and Cigna and that its board preferred the Aetna offer. See JX 

339 at ’324. On June 27, the Cigna Board decided not to pursue Humana further. JX 340. 

3. The Management Meetings

Meanwhile, on June 26, 2015, the members of the Cigna ELT (other than Cordani) 

met with their Anthem counterparts for a full-day meeting that included discussion of the 

Blues MDL and the 2/3 Rule. Anthem “[c]onfirmed there are potential paths forward,” but 

cautioned that the “dynamic is very complex, with uncertain outcomes and the potential 

for other Blues to disrupt the combined company through unforeseen changes they can 

implement outside our control.” JX 339 at ’325. The Anthem ELT expressed optimism 

 

44 PTO ¶¶ 134–35; see JX 322.
33

because they had received fourteen supportive responses from other Blues members to the 

announcement of their bid for Cigna, with only three unfavorable responses. Id. Zielinski 

viewed the Blues MDL as “manageable, maybe even favorable” to a merger, and he was 

“optimistic” on the timing of a settlement. Id.

On June 30, 2016, the parties held a second in-person meeting between the two 

CEOs (Swedish and Cordani), the two General Counsels (Zielinski and Jones), the two 

CFOs (Wayne DeVeydt from Anthem and McCarthy from Cigna), and the chairs of the 

two Boards (George Schaefer from Anthem and Harris from Cigna). They addressed “value 

drivers” and the “vision for the combined company.”

45

In a presentation for the Cigna Board, the Cigna ELT reported that “operating 

outside the Blues Rules [was] not a realistic option.”

46 They also reported that NewCo was 

likely to be “out of compliance at closing and will need to submit a mitigation plan,” with 

the first action to bring NewCo into compliance being to “[r]ebrand [Cigna] revenue as 

Blue” in the Anthem Blue States. JX 351 at ’076. And they told the Cigna Board that 

Anthem could not “change the rules without the support of other Blues.” Id. at ’072; see 

id. at ’075.

The Cigna ELT also provided the Cigna Board with an analysis of antitrust risk. 

 “Given current regulatory conditions, it is a virtual certainty that antitrust agencies 

will conduct a lengthy, in-depth review of any transaction in this space, even if there

 

45 JX 339 at ’326; see PTO ¶ 138; JX 344.

46 JX 351 at ’072; accord Zollars Tr. 2489.
34

is only one transaction. . . . If there are multiple transactions pending at the same 

time, the scrutiny will be heightened.” JX 4000 at ’240.

o “At a minimum, divestitures in local geographies likely would be required 

for antitrust clearance . . . , although litigation challenges . . . are a distinct 

possibility . . . .” Id.

 “[I]f [Aetna/Humana] is announced before or roughly at the same time as [a 

Cigna/Anthem transaction], the antitrust risk . . . . generally increases. The increased 

risk stems from not only the potential for additional local divestiture and national 

competition issues . . . , but also the optics and resulting pressure on regulators from 

a perceived reduction in nationally significant health insurers from 5 to 3.” Id.

 “Given current regulatory conditions . . . , we believe that there is a 20-30% chance 

that DOJ will seek to challenge a [Cigna/Anthem] transaction, despite an offer to 

make local divestitures in line with our prior estimates.” Id. at ’241.

 “This risk assessment would increase if the parties do not have compelling 

responses to questions we will likely face about the Blues Rules mediation [sic] plan 

and the potential impact of the Blues Rules on post-merger competition . . . .” Id.

 “On the one hand, the Blues Rules could slow down the regulatory review and 

increase the risk profile of a [Cigna/Anthem] transaction.” Id.

o “For example, DOJ is likely to inquire about the parties [sic] mediation plan 

as well as the impact of the Blues Rules on post-merger competition. 

Questions could focus on the Blues Rules [sic] effect on [NewCo’s] incentive 

and ability to grow post-merger relative to the pre-merger status quo, 

[NewCo’s] incentive and ability to provide access to [its] network to other 

Blues, the incentive and ability of the other Blues to compete against 

[NewCo], and on the final disposition of the parties’ pre-merger assets.” Id.

o “The fact that there is antitrust litigation involving the Blues Rules also will 

likely provide an educated set of complainants that may be motivated to 

stress to DOJ how the Blues Rules will limit competition post-merger.” Id.

 “On the other hand, the Blues Rules could provide some arguments in favor of the 

transaction—for example, there are arguments that the Blues Rules enable small 

Blues to compete more effectively and the [Cigna/Anthem] transaction would 

strengthen that competition.” Id. at ’242.
35

Cigna thus accepted that divestitures were likely and viewed the Blues Rules as a mixed 

bag, with both positive and negative implications for the transaction. Overall, Cigna’s 

outside counsel thought there was a 7080% chance of securing regulatory approval.47

These assessments echoed similar conclusions in another antitrust analysis prepared 

by the Cigna ELT. That analysis described “the most likely scenario (~65%-70%)” as one 

in which both the Anthem-Cigna deal and the Aetna-Humana deal were “cleared subject 

to local divestitures consistent with past DOJ precedent in the industry.” JX 209 at ’483. 

The assessment noted that the DOJ might focus on national accounts or argue that “one of 

the merger parties is a unique, procompetitive ‘maverick’ in the industry whose influence 

would be removed as a result of the transaction.” Id. at ’484. The analysis explained that

[Cigna] has several arguments in response, including:

 Local [managed care organizations (MCOs)] are a serious competitive 

force and cannot be discounted.

 Even assuming that nationwide “market” exists, these deals are not 

properly viewed as “5 to 3” but are better viewed as “4 to 4.” . . . 

 Neither [Cigna] nor [Anthem] is a uniquely disruptive maverick in the 

industry.

Id. (formatting in original). The analysis stressed that “[i]n order to maximize the odds of 

clearance, it should be clear to the DOJ that the parties would put up a fight in court.” Id.

 

47 Rule Tr. 3041; see Jones Tr. 2594. Anthem’s outside counsel shared this view, 

anticipating a 75% chance of approval with divestitures in the range of 3.5 million lives. 

Paul Tr. 592; see also Rosen Tr. 780 (“I thought [the Merger] was likely to get cleared.”).
36

The analysis also noted that “reasonable remedies can sometimes still be achieved after a 

suit has commenced, even when national theories are asserted . . . .”

48

4. The Agreement In Principle

On July 4, 2015, Anthem and Cigna reached an agreement in principle. Anthem 

would pay $187 per share, consisting of 55% cash and 45% stock. The NewCo Board 

would have nine Anthem designees and five Cigna designees. Swedish would serve as 

CEO and Chair. Cordani would be President and COO and serve as a director.49

Although Cordani had agreed to this arrangement, he did not like it. The next 

morning, Harris wrote to Cordani: “David, Congratulations to you and the team. Much 

work ahead of you, but this is a major step, and the right step for our shareholders.” JX 370. 

Cordani responded, “Brain knows yes. Heart is heavy.” Id. In an email to a Cigna executive, 

Cordani wrote that the outcome was “correct,” but that he was “still struggling to accept it 

all.” JX 369 at ’945. Cordani told Jones that his “soul [was] still unsettled.”

50

 

48 Id. at ’485. Cigna took different positions on these issues after the Cigna ELT 

turned against the Merger.

49 PTO ¶ 143; see JX 365; JX 366; JX 367.

50 JX 400 at ’299. Even though the subject line of his email to Jones was “Call on 

Merger Agreement Tomorrow,” and despite the obvious context, Cordani testified in his 

deposition and at trial that his soul was unsettled because of “a really dense, intense work 

environment.” Cordani Tr. 1971–72 (reading from deposition transcript). Cordani also 

claimed that having a “heavy heart” is not an indication of sadness. Id. 1965–66. More 

generally, Cordani denied being unhappy about the Merger. See id.; Cordani Dep. 41–43, 

46. Jones claimed she did not know what they were writing about. Jones Tr. 2710. Their 

testimony on these points was not credible. 
37

Swedish remained uncomfortable with Cordani. Part of his concern stemmed from 

the hard-nosed negotiations over the CEO role, but it also is clear that the two leaders 

embodied different corporate cultures. Swedish was a traditional CEO who valued 

hierarchy. Cordani was a charismatic visionary who inspired deep personal loyalty. To 

Swedish, Cigna seemed like a “cult associated with [Cordani’s] ego drive.”

51

5. The Struggle Over Cordani’s Role As COO

After reaching an agreement in principle, Anthem and Cigna conducted due 

diligence and negotiated the terms of the transaction documents.52 From the Anthem team’s 

perspective, Cigna “continue[d] to act as if it [was] the acquiring entity” by making 

 

51 JX 375; cf. JX 925. Swedish’s assessment, although tending to the pejorative, 

rings true. Cordani is successful and ambitious, and he established remarkably close 

personal relationships with his directors and senior executives. Jones noted in an email that 

Cordani and Harris, the chair of the Cigna Board, “are very close and Ike is incredibly 

supportive of David . . . .” JX 93; see, e.g., JX 2274. Other Cigna directors displayed 

considerable loyalty to Cordani. See, e.g., JX 448; JX 1024; JX 2379. So did the members 

of the Cigna ELT. See, e.g., JX 369; JX 384; see also JX 1528. See generally JX 375 

(reporting that Cigna employees were “‘rallying behind David’ to avoid the acquisition 

[and] that ‘many employees feel that Anthem is the enemy’”); JX 1182 (“[Cordani] is the 

heart and soul of our organization.”). Jones in particular appears to have prioritized her role 

as Cordani’s principal supporter over the interests of her corporate client, or at least viewed 

the two as one in the same. See, e.g., JX 2916 at ’746 (Jones’s performance evaluation 

identifying as one of her “Watch Outs” that “Nicole supports our leader [Cordani] to feel 

he is invincible and able to fight the big battles and often travels with him—all good, just 

need her to also continue to be a truth teller to [Cordani] both 1:1 and in the [Cigna] ELT.”); 

Jones Tr. 2705 (Jones confirming that she “intended to leave NewCo if Mr. Cordani was 

not going to be given a position there”). 

52 PTO ¶ 144; see, e.g., JX 410; JX 411; JX 414; JX 417.
38

demands on issues like the headquarters location and NewCo’s name.53 The Cigna team 

took umbrage at Anthem acting like the acquirer. John Murabito, Cigna’s Chief Human 

Resources and Services Officer and a member of the Cigna ELT, criticized Swedish for 

making “zero commitments to [Cordani]” and not seeming “to get or care about the issues 

[Cordani] [was] raising,” JX 384. He viewed Swedish as “a cross between unprepared, 

insensitive, arrogant, and unaware.” Id. He also thought it was “ridiculous” and “[n]ot 

acceptable” that Anthem planned to “run the people side of [Cigna’s] business after 

signing.” JX 447.

The scope of Cordani’s responsibilities as COO became a major focal point in 

discussions. Anthem turned to Vivian Riefberg of McKinsey & Company, Inc., to help 

define Swedish and Cordani’s respective roles. See JX 405. Riefberg’s initial draft had the 

C-suite executives reporting to Swedish as CEO and gave Swedish principal responsibility 

for NewCo’s strategy, while giving Cordani principal responsibility for all of NewCo’s 

operations, including all of NewCo’s lines of business. See id. at ’19194. Cordani 

immediately responded that he “ha[d] a big problem with the positioning”—to the point 

where he did not even want to discuss it. JX 408. Cordani instructed Murabito to research 

COO roles at other Fortune 50 companies and to focus on those where the COO had 

transitioned to CEO. See JX 413.

 

53 JX 377; see JX 440 (debating which executives would call which public officials); 

see also JX 427 (Zielinski stressing that “[t]his is an acquisition; not a merger and therefore 

the messaging and talking points need to state that”).
39

Cordani’s main objection was that Riefberg gave the CEO primary responsibility 

for determining NewCo’s strategy. Summarizing Cigna’s objection, Jones wrote Cordani 

“must be involved and have influence over strategic [and] any other decisions that affect 

the current and future direction of the company.” JX 412 (describing it as one of “3 

foundational principles [to be] agreed” that the “President/COO role is viewed as a 

transition role for [Cordani] to CEO – not a destination role”). 

After working through several drafts, Swedish, Cordani, and Riefberg agreed to a 

structure broadly consistent with the initial draft. Cordani would be responsible for all four 

of NewCo’s lines of business and for product and segment marketing. Swedish and Cordani 

would have “[s]hared accountability for integration (its planning and execution).” JX 439 

at ’347. They agreed that “during the integration, there will be some tough calls that 

[Swedish] would have to make, even with joint responsibility for the integration planning 

and execution.” JX 431 at ’830.

During the final negotiations over the Merger Agreement, one of the Cigna 

directors, John Partridge, wrote to Cordani:

I think [Anthem] has possibly made a tactical mistake and it gives me a ray 

of hope. That mistake may be putting you on the board. During the early days 

of the transition, the board will have more frequent meetings than usual. I 

believe that [it] will expose the real differences between you and [Swedish] 

to the board through the dialog that should ensue. There will be no way to 

exclude you and no where [sic] for [Swedish] to hide. Possibly, we could 

have an event similar to the one we had when I joined the board. The board 

sees that a change will be needed in the CEO to extract the value and has the 

courage to take that decision early in the transition.

JX 448; see also JX 400. The “similar” event was Cordani’s displacement of his 

predecessor at Cigna, Ed Hanway. At the time, Cordani was serving as President and COO 
40

of Cigna, the same roles that he would have at NewCo. Some members of the Cigna Board 

had questioned Hanway’s leadership, and when Cordani did an excellent job presenting on 

Cigna’s standalone strategy, the Cigna Board replaced Hanway with Cordani.54 Cordani 

told Partridge that his note was “very well laid out” and “[h]ard to argue” with. JX 448 at 

’390. Cordani added, “as for the board room. Good points. And therefore I need the 4 best 

partners possible. Keep an open mind when I come knocking.” Id. Partridge later became 

one of the designees to the NewCo Board. Cordani Tr. 1964.

6. The Parties’ Understandings Regarding The Blues Rules

While the parties negotiated to finalize the transaction documents, they also 

continued to discuss the Blues Rules.55 Among other things, they discussed how to rebrand 

Cigna business as “Blue” to comply with the 2/3 Rule. McCarthy anticipated rebranding 

all of the Cigna clients with a headquarters in an Anthem Blues State. See JX 423 at ’348. 

During a Cigna Board meeting on July 15, 2016, the Cigna ELT reported that they 

had conducted significant due diligence into “key risk areas,” including the Blues Rules.56

Due diligence confirmed the Cigna ELT’s earlier assessments, including on the following 

points:

 

54See Harris Dep. (Dec. 2018) 2627; Partridge Dep. 307–08; 332. Cordani testified 

that Hanway chose to leave voluntarily, “thought it was the right time,” and was “great 

with the decision.” Cordani Tr. 1959. That was not accurate. The Cigna Board “determined 

that [Cordani] should be named the CEO of the company and that Ed should retire.” Id.

1960–61 (playing video of Partridge deposition).

55 See, e.g., JX 421; Zielinski Tr. 139–41.

56 JX 428 at ’304, ’312; see JX 434 at ’406.
41

 “Affiliation with Blues brings substantive benefits including access to the well 

regarded [sic] Blues brand and additional provider network choices for clients and 

customers.” JX 428 at ’312.

 “We would need to comply with ‘Blues Rules’ that regulate how the brand is used 

and overall mix of branded and unbranded business.” Id.

 “Changes in the overall structure of the rules (‘standards’) require a double 

supermajority vote. Unfavorable changes are unlikely while the current litigation is 

continuing.” Id. at ’313.

 “Changes in the practical application of the rules (‘guidelines’) require a simple 

majority of plans present. Unfavorable changes are similarly unlikely while the 

current litigation is continuing.” Id.

Cigna identified the two most likely outcomes as either (i) “[r]ules stay in place as is and 

we adapt our model to comply through a mixture of rebranding and other actions, in line 

with the current business case,” or (ii) “[g]uidelines are relaxed, which is favorable to the 

current business case.”

57

E. The Merger Agreement

On July 23, 2015, the parties signed the Merger Agreement. It memorialized the 

agreement in principle except on the issue of price, where Anthem had raised the cash 

component by $1. JX 468 (“MA”); see JX 454. The final consideration of $103.40 in cash, 

plus 0.5152 shares of Anthem common stock reflected total consideration of $188 per 

Cigna share based on Anthem’s closing price on May 28, 2015. The package represented 

a premium of 38.4% over Cigna’s unaffected closing price on the same day. On a pro forma

 

57 Id. at ’313. After the Cigna ELT turned against the Merger, Cigna took different 

positions on these issues.
42

basis, former Anthem stockholders would own approximately two-thirds of NewCo’s 

equity, and former Cigna stockholders would own approximately one-third. JX 480.

On July 24, 2015, Anthem and Cigna announced the Merger. PTO ¶ 148. During an 

investor call, Swedish explained that Cordani would serve as President and COO and 

“focus on operational performance, with responsibility for our domestic and international 

business units across our commercial and government segments, including our core 

medical and specialty solutions.” JX 490 at ’744. He also said that he and Cordani would 

“share accountability for the successful integration of this transaction, both its planning 

and execution.” Id. During the call, Cordani spoke positively about the Merger and 

described the antitrust risk as “wholly manageable.” Id. at ’752.

Analysts and investors expressed concern about how the parties would obtain 

antitrust approval and comply with the 2/3 Rule.58 In response, the parties issued a joint set 

of FAQs about the Merger. One question asked, “Why do you have confidence that you 

will be able to obtain regulatory approval?” JX 522 at ’806. The companies’ joint answer 

stressed three points:

 “We are confident in our ability to obtain regulatory approval, as our operations are 

highly complementary and will provide greater choice, increase access to care, and 

deliver better affordability to current and prospective customers and clients.”

JX 522 at ’806.

 “The marketplace is, and will remain, highly competitive, and customers will 

continue to have a wide range of competitors to choose from.” Id.

 

58 See JX 491; JX 492; JX 495; JX 505; JX 519.
43

 “Both companies have engaged antitrust counsel and economists to provide an 

assessment of competitive overlap. The results of those assessments support our 

confidence in the transaction obtaining DOJ approval.” Id. 

The FAQs predicted that the DOJ would use “a local framework” in assessing the 

combination, but explained that even if the DOJ used a national framework, “Our 

businesses and the industry would be shown to be highly competitive and we’re confident 

this transaction will receive clearance under either framework.” Id. at ’806–07.

The joint FAQs also addressed the Blues Rules:

 In response to a question about whether Anthem’s membership in the Blues 

Association would “impact the DOJ analysis,” the FAQs stated, “We have 

considered this item, and we do not think this will be an issue.” Id. at ’807–08. 

 In response to questions about NewCo’s ability to achieve compliance with the 

Blues Rules, the FAQs stated, “[W]e view the Blues Rules requirements as very 

manageable.” Id. at ’808. 

 In response to a question about how Cigna was able to “get comfort with the ability 

to be in compliance with the Blues Rules,” the talking points stated that “the parties 

determined after extensive analysis that the Blues Rules should not act as an 

impediment to the transaction” and that Cigna had “been able to confirm that there 

are adequate mechanisms to maintain compliance.”

59

The Anthem-Cigna deal was not the only major transaction in the health insurance industry. 

Three weeks before Anthem and Cigna announced the Merger, Aetna had announced an 

acquisition of Humana that would combine two other top-five industry players. If both 

deals were approved, then the five largest companies in the health insurance industry would 

become three. 

 

59 Id. at ’809; see also JX 498 at ’969; JX 505 at ’25657. After the Cigna ELT 

turned against the Merger, Cigna took different positions on these issues.
44

F. The Need For Stockholder And Regulatory Approval

The signing of the Merger Agreement marked the start of a lengthy period during 

which the parties sought to secure the approvals necessary for the Merger to close. Anthem 

and Cigna needed to obtain approval from their respective stockholders. They also needed 

to secure approvals from federal antitrust regulators and state insurance regulators. 

1. Stockholder Approval

Securing stockholder approval proved relatively straightforward. In September 

2016, Anthem and Cigna issued a joint proxy statement in support of the Merger. 

Consistent with the conclusions that Cigna had reached before entering into the Merger 

Agreement and the parties’ joint disclosures after signing, the proxy statement contained 

the following statements: 

 “Cigna senior management had the opportunity to resolve their diligence questions 

with respect to the [Blues] rules . . . , the [Blues MDL] and the data breach disclosed 

by Anthem in February 2015.” JX 793 at 124–25. 

 “Due to the size of Cigna’s business, Anthem may not be in compliance with the 

[2/3 Rule] immediately after completion of the merger.” Id. at 75. 

 If NewCo was not in compliance with the 2/3 Rule at closing, then NewCo would 

submit a plan achieve compliance to the Blues Association and would have twentyfour months to implement the plan, starting from the date on which the Blues 

Association approved it. Id.

 NewCo had multiple options to achieve compliance, including “rebranding Cigna 

health care plans and related services so they are sold, marketed, administered or 

underwritten under the [Blues brands], ceding national Cigna accounts from other 

[Blues Association] member plans to Anthem or divesting certain business.” Id.

On December 3, 2015, both Anthem and Cigna held special meetings of stockholders, at 

which their respective stockholders approved the Merger. Cigna announced that the 
45

transaction was “expected to close in the second half of 2016, pending the receipt of 

customary approvals.” JX 904.

2. Regulatory Approval

The far bigger task was securing regulatory approval. The process of obtaining 

approval for a major transaction under the federal antitrust laws involves three different 

decision-makers. The first is the DOJ, which reviews the merger and decides whether to 

allow it, to condition closing on the parties making divestitures or complying with other 

requirements, or to sue to block it.60 The second is a federal district court, which hears any 

litigation concerning the transaction. And the third is a federal court of appeals, which hears 

the appeal from the district court’s ruling. State attorneys general and state insurance 

regulators also conduct reviews of health insurance company mergers, but often follow the 

DOJ’s lead.

The first step in the review of a major merger is for the parties to file a notification 

under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, 15 U.S.C. § 18a. The 

notification provides various statutorily required categories of information about the 

industry and the parties’ businesses.61 If the agency takes no action within thirty days, then 

 

60 The DOJ and the Federal Trade Commission (“FTC”) have concurrent authority 

to investigate and challenge mergers, subject to certain exceptions to the FTC’s 

jurisdiction. See 15 U.S.C. § 45(a). In practice, the agencies cooperate with little 

duplication. Major health company mergers generally are handled by the DOJ. See JX 2971

¶ 18 & nn.2 & 3 (citing Am. Bar Ass’n Antitrust Section, Health Care Mergers And 

Acquisitions Handbook 118 (2d ed. 2018) (describing the DOJ as “the primary reviewer of 

health plan mergers at the federal level”)). 

61 See 15 U.S.C. § 18a; JX 2971 ¶ 22; Paul Tr. 608–09.
46

the parties can close their transaction. If the agency decides to take further action, then it 

issues a “second request” that seeks business documents, data, and other information.62

Once the parties certify that they have substantially complied with the second request, then 

the agency has another thirty days to determine whether to take action regarding the

merger. 

The agency also typically meets with the parties and receives or collects information 

from customers, suppliers, competitors, and other industry participants. The agency has 

authority to serve civil investigative demands—effectively administrative subpoenas—to 

obtain documents and testimony from the merging parties and from third parties. JX 2971 

¶ 23 & n.22.

If the DOJ is concerned about a merger, then it may negotiate a resolution that 

imposes conditions before the merger can close. For example, the parties may agree to 

divest certain assets in areas where their businesses overlap. Merging parties also may line 

up a divestiture remedy on their own. If the DOJ challenges the transaction, then the 

merging parties can argue that their divestiture remedy addresses or mitigates the DOJ’s 

concerns. This is generally called “litigating the fix.”

63

a. Initial Outreach To The DOJ

When the parties announced the Merger, their regulatory counsel placed courtesy 

calls to the DOJ. See JX 445. Anthem used White & Case LLP and Arnold & Porter Kaye 

 

62 See JX 2971 ¶ 23; Paul Tr. 609.

63 JX 2972 ¶ 84; Noether Tr. 3406; see Paul Tr. 657–58.
47

Scholer LLP as its regulatory counsel. George Paul led the White & Case team, and Richard 

Rosen led the Arnold & Porter team. Cigna used Cadwalader, Wickersham & Taft LLP. 

Rick Rule, then with Cadwalader, led its team. PTO ¶¶ 77, 79, 89.

On July 29, 2015, five days after the announcement, the DOJ opened an 

investigation into the Merger. PTO ¶ 149. That same day, the DOJ sent the parties a set of 

voluntary information requests, which included questions about the Blues Rules.64 The 

DOJ also sent an information request to the Blues Association. See JX 604. The parties 

expected DOJ’s early interest in the Blues Rules, and Anthem’s counsel did not anticipate 

that the Blues Rules would be a problem. See JX 445 at ’477.

On the same day that the DOJ opened its investigation, Anthem’s counsel circulated 

a “case themes” outline to frame the plan for obtaining regulatory approval.65 The parties 

knew that the Merger would have the anti-competitive effect of reducing the number of 

players in an already-concentrated industry, so the centerpiece theme of their case was the 

procompetitive efficiencies that the Merger would create. Anthem’s outline stressed the 

possibility of “$2 billion in efficiencies in two years,” attributable to operational 

efficiencies, medical network efficiencies and medical cost management, and other 

sources. JX 523 at ’926. The outline included a section on “Blues Issues,” including the 

2/3 Rule. Id. at ’933–934. 

 

64 See JX 521 at ’696–98; see also JX 588.

65 JX 523; see Paul Tr. 596–97.
48

Cigna’s counsel prepared a similar outline.66 It described the two companies as 

having complementary strengths and minimal areas of overlap. JX 567 at ’576–82. Cigna’s 

counsel posited that “[l]ocalized remedies are sufficient to address both potential customer 

and any provider monopsony concerns, consistent with past DOJ precedent.” Id. at ’584. 

Cigna’s counsel also noted that “[d]oing the deal despite divestitures indicates the deal is 

not about creating market power, but rather about creating pro-competitive efficiencies.”

67

The Cigna memorandum maintained that the “Blues Structure Does Not Change 

[The] Analysis.” Id. at ’589. It identified five Blues-related theories that the DOJ might 

advance and offered potential rebuttals, including the argument that the Merger would 

reduce competition by making Cigna “more of a collaborator and less of a full-throated 

competitor against the non-Anthem Blues.”

68

In addition to approval from the DOJ, the Merger also required approval from 

insurance regulators in twenty-nine states and a handful of foreign countries. See JX 625 

at ’984 & slide 5. The parties anticipated that the regulatory review process would take 

approximately twelve months. See JX 675 at ’161.

 

66 JX 567; see Paul Tr. 597–99.

67 Id. After the Cigna ELT turned against the Merger, Cigna took different positions 

on these issues.

68 Id. at ’590; see id. at ’58991; see also JX 550.
49

b. The First Meeting With The DOJ

At the end of August 2016, the parties filed their notifications under the Hart-ScottRodino Act. See Paul Tr. 608–09. On September 2, 2015, the parties held an initial meeting 

with the DOJ. PTO ¶ 151. Approximately twenty DOJ lawyers and economists attended. 

The purpose of the meeting was to provide an overview of the Merger and to 

introduce Anthem and Cigna to the DOJ. Zielinski and Jones were the primary presenters.69

They described the Merger as a combination of “highly complementary businesses with 

minimal overlaps.” JX 625 at 2. The presentation praised aspects of Cigna’s business, see 

id. at 4, 8, but also noted that Cigna was weak in areas where Anthem had strengths:

 Cigna had “a small individual business, largely outside Anthem territory and no 

small group (2-50) offering.” Id. at 9.

 Cigna had “a limited Medicaid presence,” id. at 9, where it was “a very minor 

player,” id. at 10, and a “fringe competitor,” id. at 11.

 Cigna had a “very small presence” in individual accounts, id. at 10, where it was “a 

minor competitor,” id. at 13.70

The presentation argued that by combining the companies’ respective strengths, the Merger 

would reduce the total cost of care while improving quality and choice and “accelerat[ing] 

[the] move toward [a] value-based model, building on progress each party has made.” Id.

at 7; see id. at 2. The presentation anticipated that NewCo would expand Cigna’s specialty 

 

69 See Paul Tr. 601–02; Rosen Tr. 810; Jones Tr. 2596–97.

70 After the Cigna ELT turned against the Merger, they actively resisted any and all 

negative statements about Cigna’s business.
50

insurance products, such as behavioral, pharmacy, vision, and dental, as well as Cigna’s 

more stop-loss and shared-return coverage solutions. See id. at 8. 

The parties projected “$2+ billion annual synergies at full run rate.” Id. at 5. They 

noted that for large employers who purchased administrative services from NewCo and 

self-insured for the underlying medical expenses (approximately 75% of NewCo’s 

customers), any savings from NewCo achieving greater discounts from medical providers 

would be passed through to the customers automatically. They argued that for employers 

who purchased for full coverage from NewCo, a large portion of the savings would be 

passed through to customers because of legal requirements on the amount of premiums that 

had to be spent on medical care. See id. 7, 18.

The parties stated that they hoped to close “in the second half of 2016.” Id. at 5. 

They also stressed that they were “committed to engagement and cooperation with the 

Division.” Id. at 19.

During the meeting, the DOJ staff identified their initial areas of interest, including 

“Anthem’s relationship/discussions with the [Blues Association]; and how the Blues Rules 

impact the transaction.” JX 630 at ’387. The regulators specifically asked whether NewCo 

would be in compliance with the 2/3 Rule if the Merger were to close the next day.71

 

71 JX 4010 at ’005; Zielinski Tr. 427–29; Rule Tr. 3060–61.
51

Coming out of the meeting, Cigna believed that one of the “key areas” for the DOJ 

would be the Blues Rules. JX 630 at ’387. Zielinski understood that the implications of the 

2/3 Rule would be “very critical to our discussion with the DOJ and getting approval.”

72

Later in September 2015, the DOJ sent second requests to Anthem and Cigna. Many

of the requests concerned the Blues Rules.73

c. The Second Meeting With The DOJ

On November 13, 2015, Anthem and Cigna met with the DOJ for a second time. 

The purpose of this meeting was to provide the DOJ with an overview of the Blues 

Association and the Blues Rules.74

The parties told the DOJ that after the Merger, NewCo “likely will not be in 

immediate compliance with the [2/3 Rule],” but that would not result in near-term 

consequences because NewCo would have 120 days to submit a compliance plan to the 

Blues Association. NewCo then would would have up to two years to implement the plan 

once the Blues Association approved it. JX 846 at ’352. The parties provided the following 

pro forma calculation of how NewCo could come close to complying with the 2/3 Rule:

 Immediately post-closing, $106.4 billion of NewCo’s total revenue of $201.1 

million would be branded Blue, reflecting 52.9% of total revenue.

 Ceding approximately $3.5 billion in Blue-branded revenue to other Blues would 

reduce the percentage to 51.2%.

 

72 JX 707 at ’002; see Zielinski Tr. 42829.

73 See, e.g., JX 708; JX 767; JX 1506; JX 4151.

74 See PTO ¶ 162; Rosen Tr. 817.
52

 Rebranding up to $27.1 billion of Cigna revenue in the Anthem Blue States would 

increase the percentage to 64.7%.

 To achieve compliance, Anthem would have to rebrand an additional $3.9 billion of 

revenue or reduce non-Blue-branded revenue by $5.8 billion.75

The parties confirmed that after the Merger, NewCo would continue to offer Cigna-branded 

products and that customers would have a choice between brands. See id. at ’335–36. After 

the meeting, Zielinski reported to other Anthem executives that “his biggest worry inside 

the DOJ [was] the [2/3 Rule].”

76

Confirming its interest in the Blues Rules, the DOJ asked for a deposition to 

memorialize the parties’ representations.77 On November 20, 2015, Stephen Schlegel, 

Anthem’s Vice President of Corporate Development, gave the deposition. PTO ¶ 163. He 

testified that it was “very likely” that the MDL would settle during 2016, which would 

result in a change to the 2/3 Rule.78

 

75 See id. at ’353. After the Cigna ELT turned against the Merger, they resisted the 

prospect of rebranding Cigna revenue in the Anthem Blue States.

76 JX 852; see Zielinski Tr. 439–40. Although the 2/3 Rule was Zielinski’s “biggest 

worry,” he remained optimistic about the prospects for obtaining regulatory approval. 

Jones, by contrast, was concerned, both about the level of the DOJ’s interest and the extent 

of Anthem’s preparation. She attempted to prod Zielinski and Anthem to be more 

proactive, but Zielinski and his team resisted. See, e.g., JX 768; Jones Tr. 2601–08. 

Zielinski viewed himself as in charge of the regulatory process, thought he had matters 

under control, and regarded Jones as being overly worried and excessively focused on 

process. See, e.g., JX 812; Zielinski Tr. 40003. With the benefit of hindsight, Jones’s 

assessment proved correct, and she championed what could have been a better approach. 

77 JX 772; JX 853.

78 JX 870 at 51. Zielinski admitted at trial that Schlegel had no factual basis for his 

opinion about the timing of a settlement. Zielinski Tr. 434. Schlegel testified that he had 

consulted with Zielinski on that point. See JX 870 at 16, 48. Zielinski insisted that he only 

thought that the Blues MDL would settle before class certification, and he admitted that he 
53

G. The Integration Planning Process And The L2/L3 Selection Dispute

After the signing, the parties faced the challenge of integration planning. This 

massive process would determine how two formerly separate companies would operate as 

a single entity, not only on the first day after closing, but over the long term. The magnitude 

of the Merger meant that the scope of the integration process was unprecedented. The 

combined company would generate over $115 billion in annual revenue and cover more 

than 53 million individuals. See JX 525 at ’473 & slide 4.

The integration planning process had major implications for the regulatory approval. 

To convince the DOJ to approve the Merger, or to prevail in any subsequent litigation, the 

parties needed to demonstrate that the Merger created efficiencies that substantially 

outweighed its anticompetitive effects. To prove those efficiencies, the parties needed to 

show that the efficiencies resulted from the combined strengths of the two companies. The 

parties also needed to demonstrate that the efficiencies were quantifiable and sufficiently 

likely to be achieved to be credited. To making this showing, the parties had to plan how 

NewCo would operate, both on “Day 1” after closing and over longer time horizons.

 

did not know when class certification would occur. See Zielinski Tr. at 435–36. The 

evidence indicates that Zielinski was overly confident about the Blues MDL settling before 

the end of 2016 and conveyed that to Schlegel, who then testified to that effect in the DOJ 

deposition. Although Zielinski testified that he did not recall telling Schlegel that the Blues 

MDL would settle before the end of 2016, Zielinski suggested a similar time frame for 

settlement when he spoke with the DOJ in June 2016. See id. at 443–48; JX 2830. The 

Blues MDL was scheduled for four days of mediation in June 2016, making the assumption 

reasonable. See JX 1849 at ’002. Zielinski and Schlegel therefore do not appear to have 

made misrepresentations to the DOJ, but they should have been more candid about the 

limitations of their knowledge. 
54

Integration planning also had significant implications for the Anthem and Cigna 

executives. The combined company would have a single executive team, so their jobs were 

on the line. Determining NewCo’s business strategy would influence how NewCo was 

organized, which would affect who would be selected for the NewCo ELT. Because of its 

implications, the integration planning process resurrected and reinvigorated the power 

struggle between the two executive teams.

1. The First Months Of Integration Planning

The early organizational meetings for the integration planning process went well. 

The discussions between Swedish and Cordani, brokered by Riefberg, were productive.79

The two executives in charge of implementing the effort—Dennis Matheis of Anthem and 

Chris Hocevar of Cigna—established a good working relationship. See JX 598 at ’70607. 

At the end of September 2016, Swedish told the Anthem Board that the parties had 

“[a]ligned on a set of key integration principles.” JX 716 at ’041 slides 1 & 2. Swedish also 

told investors that Anthem was “working collaboratively [and] closely with the Cigna 

team . . . .” JX 675 at ’161.

There were disagreements. One dispute involved Cordani’s role on the joint steering 

committee for the integration planning process (the “Steering Committee”). Swedish and 

Cordani had agreed that Swedish would chair the committee and that Cordani would serve 

as “Vice Chair,” meaning that he would chair meetings that Swedish did not attend.80 Other 

 

79 See JX 607; JX 632.

80 JX 645; Swedish Tr. 1081–82.
55

Cigna executives, led by Jones and McCarthy, convinced Cordani to back away from that 

commitment.81 When Jones told Zielinski that they needed a different model, Zielinski 

insisted on the agreed-upon structure.82

A similar dispute arose over the composition of the Steering Committee. Swedish 

proposed four Anthem representatives, four Cigna representatives, and himself as Chair. 

Cordani wanted six Cigna representatives.83 They agreed on five representatives each, 

including Swedish and Cordani.84

A variant of the same issue played out over the hiring of consultants. Anthem 

wanted to hire McKinsey as the sole consultant for the integration process. Cigna wanted 

each company to have its own consultant. Anthem insisted on having McKinsey as the sole 

consultant.85

None of these disagreements were fatal, but they were irritants and reflected the 

parties’ differing views of the transaction. Anthem saw itself as the acquirer; Cigna saw 

the parties as equals.86

 

81 See JX 648; JX 649; JX 656.

82 See JX 669; JX 672; JX 694.

83 See JX 726; Swedish Tr.1081–82.

84 See JX 778 at ’803; Swedish Tr. 1340–41.

85 See, e.g., JX 594; JX 596; JX 621; Swedish Tr. 1177. A similar dispute also played 

out over the hiring of an economic expert to assist with antitrust approval. Jones wanted 

the companies to retain the expert jointly. Zielinski insisted on Anthem retaining the expert. 

JX 698; Zielinski Tr. 395–96; see Jones Tr. 25992601. 

86 See, e.g., JX 525 at ’473 & slide 7 (“Initial transaction intent was friendly, but 

feel has transitioned towards feeling more hostile, potentially negatively impacting 
56

2. The L2/L3 Selection Dispute

The first meeting of the Steering Committee took place on October 21, 2015, 

followed by a kick-off meeting for the integration team leaders the next day.87 The Steering 

Committee materials affirmed that “[d]ecision-making will be carried out on a shared

basis,” but “[i]f a collaborative decision can’t be reached, the final decision-making 

responsibility falls to [Swedish].”

88

As part of the integration planning process, Swedish wanted to lay the groundwork 

for eventually selecting the NewCo ELT. Both sides used abbreviations to refer to the tiers 

of executives that would constitute the team. As CEO, Swedish was “L1.” The executives 

who would report to him were “L2.” The executives who would report to “L2” were “L3.”

And so on.

The Steering Committee materials for the October meeting projected that the L2/L3 

selection process would begin in November and be completed in early March. JX 778 at 

’830, ’846. Decisions on NewCo’s operating model and organizational design would be 

 

integration activity.”); JX 731 (Zielinski telling Swedish that he was “growing very tired 

of [Cordani’s] childish antics”); JX 754 (Anthem executive telling Swedish, “At some 

point during our discussion [with Cordani], we do need to drive home that it’s not a merger 

of equals, but an acquisition. . . . Cigna’s leadership is still under the misguided impression 

that this is a merger.”); Cordani Tr. 1793 (“Broadly speaking, Anthem’s approach to the 

integration process was to make it clear to Cigna that they were in charge . . . .”); id. at 

1796 (“[T]he friction between the two organizations continued to grow [through the end of 

2015], starting with the selection of the integration consultant, through the configuration 

of the steering committee.”).

87 See PTO ¶ 153; JX 775; JX 778; see also Swedish Tr. 1080.

88 JX 778 at ’805; see Swedish Tr. 1082.
57

made during the same period. Id. at ’830. The presentation described the selection of the 

NewCo ELT as “Joe / David’s critical decision.”

89

The series of events that put the two companies on a war footing began when 

Swedish tried to schedule the interviews that were an initial step in the L2/L3 selection 

process. When Anthem’s head of human resources reached out to the Cigna ELT, Cordani 

and his team reacted angrily. Murabito was “outraged on more than one plane.” JX 890. 

Cordani called it “[w]rong on a number of accounts.”

90 After Cordani objected, Swedish 

met with Cordani and Murabito and explained his timeline. JX 919. Cordani and Murabito 

“pushed back hard . . . .” JX 913 at ’272. 

Swedish and Zielinski saw Cordani’s opposition as a threat to the success of the 

integration planning process, the Merger, and themselves personally. They knew that 

 

89 Id.; see Swedish Tr. 1081–82. Cordani similarly had told the Cigna Board that he 

expected the leadership decisions to be “made in Q1” of 2016. JX 771 at ’906. Selecting 

these positions early comported with what Cigna wanted to do during the merger 

negotiations when Cigna had envisioned itself as acquiring Anthem. See JX 184 at 

’18889. It also was consistent with advice that Cigna had received when Cordani and his 

ELT thought that they would be in the driver’s seat. See id. at ’189 (Cigna’s banker telling 

Cordani and Jones that because the success of the deal would depend on executive 

leadership, it was “important for several of the other key management and integration 

positions [in addition to chair and CEO] to be identified and sourced from the talent pools 

at both organizations prior to announcement”); JX 678 at ’600 (advice to Cordani from 

Heidrick & Struggles in September 2015 about the need to begin “designing the new 

leadership structure/operating model” and then assessing and selecting “the best players 

who best fit the requirements”); see also JX 693 at 2–3 (advice from Bain & Co., with 

whom Cordani was secretly consulting, recommending that the parties “[r]esolve the power 

and people issues quickly” and begin this work “even before the deal is announced”); Singh 

Dep. 19–20.

90 Id.; see JX 907; JX 908.
58

Cordani had gained the CEO position at Cigna through a boardroom coup, and they 

suspected that he would try it again.91 They already had discussed reducing Cordani’s 

duties at NewCo because although the Merger Agreement required that Cordani be named 

President and COO, it did not specify what responsibilities those positions would have.92

Cordani’s offer letter also did not specify particular responsibilities.93 Swedish and 

Zielinski hoped that if they narrowed Cordani’s role, then he might leave voluntarily.94

3. The Dispute Letters

During the same period that Cigna was resisting Swedish’s efforts to schedule the 

interviews that would begin the L2/L3 selection process, McKinsey reported that Cigna 

 

91 Nor were their concerns unfounded. See Part II.D.5, supra. Cordani secretly was 

working with Ashish Singh, a consultant from Bain, on how to influence Swedish and 

shape NewCo’s leadership structure to his advantage. See JX 947; JX 959; JX 964; JX 974; 

JX 1007 at ’212; JX 1147 at ’397; Singh Dep. 47, 93–94, 113–14. To keep Singh’s 

involvement secret, Cordani routed all communications with Singh through Hocevar, 

Cordani’s “problem-solver” and right-hand man. See, e.g., JX 948; JX 974; Hocevar Tr. 

2301; see also JX 680; Singh Dep. 89. On December 22, 2015, Cordani secretly met with 

Singh in an airport hangar. See JX 993; JX 2746; Hocevar Tr. 2328; Hocevar Dep. 464; 

Singh Dep. 88–89.

92 See MA § 1.13(b)(ii); JX 826; Zielinski Tr. 262–63; Swedish Tr. 1226, 1228–29.

93 See JX 476; JX 793 at 167; Zielinski Tr. 545–46.

94 See JX 1262; Zielinski Tr. 268–72; see also JX 1610; cf. JX 934. The direct 

evidence about Anthem’s strategy of reducing Cordani’s role came later in the timeline. It 

nevertheless is inferable that this was a strategy that Swedish and Zielinski had developed 

earlier. At trial, Zielinski testified that there was no connection between a reduction in the 

scope of Cordani’s role and any discussions about inducing him to leave, claiming it was 

“just a coincidence.” Zielinski Tr. 273. That testimony was not credible.
59

was not providing access to information needed for integration planning.95 Zielinski sent a 

curt email to Jones, describing the situation as “not only disappointing but disturbing.”

JX 914. Cigna believed that the problem was with McKinsey and that the data had been 

provided. See JX 921. McCarthy, Cigna’s CFO, met with Riefberg to clear the air. They 

also talked about the interviews for the L2/L3 selection process, with McCarthy bluntly 

telling Riefberg that that Anthem needed “to find another model . . . .” JX 965.

During a call on December 22, 2015, Swedish told Cordani that he was dissatisfied 

with the pace of integration planning. See JX 985. They turned to the L2/L3 selection 

process, disagreeing over virtually every aspect. Swedish maintained that he had the right 

to select his direct reports; Cordani wanted a voice in the selection. Swedish wanted to 

announce the L2 leadership structure by March 2016, as the Steering Committee had 

planned; Cordani did not want any L2 selections announced until May or June 2016. 

Swedish wanted to announce the remainder of the executive team before closing; Cordani 

wanted those decisions made after closing. Cordani also told Swedish that he wanted four 

more areas added to his portfolio as COO.96

On December 29, 2015, Swedish sent Cordani a letter in which he took a hard line 

on the L2/L3 selection, describing it as “a foundational necessity” for integration work. 

JX 998 at ’390. Swedish also criticized Cigna’s involvement in “the implementation and 

 

95 See JX 914; see also JX 874 at ’011 slides 3 & 11 (citing issues with obtaining 

information and marking Value Capture in in red for “[r]equires action” because of delays 

in receiving data).

96 See JX 995 at ’351–52; see also JX 986; Swedish Tr. 1083–88.
60

execution of [the] integration plan” as “unacceptable.” Id. at ’389. Swedish asserted that 

Cigna’s “delays in producing data, inefficient processes for resolving data classification 

disputes, never ending discussions regarding access to data, repeated postponement of 

meetings, and other conflicts have collectively caused a very ineffective and slow paced 

integration process.”

97

On December 31, 2015, Cordani responded with a letter of his own. He maintained 

that the L2/L3 selections would be “highly disruptive.” JX 1002 at ’133. He told Swedish 

that he had discussed the issue with the Cigna Board and received “clear feedback” that 

“creating this type of disruption . . . without agreement on approach, more insight into the 

regulatory timeline and a broader supporting talent management strategy is 

inadvisable . . . .” Id. He also disagreed with Swedish’s claim that “execution of the 

[integration] plan has been unacceptable.” Id. at ’131. He countered with concerns about 

the “de minimis amount of time” that the Steering Committee had spent “gaining insight 

into the regulatory process and strategy.” Id. at ’132. To establish a path forward, Cordani 

suggested “[d]ecoupl[ing] integration planning from the leadership selection decisions.”

Id. at ’134. 

 

97 Id. Cigna points out that by the time Swedish wrote his letter, the disputed data 

had been provided or otherwise addressed. See Dkt. 700 at 22 (citing Swedish Tr. 1191–

92). Swedish’s letter acknowledged that fact. JX 998 at ’389. Swedish was concerned about 

the process going forward. Cigna also claims that McKinsey’s tracking documents showed 

integration planning proceeding apace. Id. The dashboard as of November 16, 2015, 

showed value capture and pharmacy benefits management in red for “requires action” and 

three other areas in yellow for “need to monitor.” JX 874 at ’011 slide 3. 
61

On January 3, 2016, Swedish responded with a more strongly worded letter, telling 

Cordani, “With all due respect, I am becoming deaf to the rhetoric.” JX 1011 at ’494. He 

continued: “You and your team ‘say’ all the right things, but the conduct and actions are 

inconsistent with the rhetoric. My focus is on tangible actions and results . . . .” Id. On 

leadership selection, Swedish maintained that “as the CEO of Anthem, it is most 

appropriate that I should determine the structure and choose the talent for the company that 

I will be responsible for running post-closing, a position made known to you and verbally 

supported by you during our discussions on December 4th when I presented the decision 

model.” Id. Swedish dismissed Cordani’s concerns about disruption as “not compelling,”

noting that he expected “the members of your senior leadership will be professional and 

dedicated to performing their duties and responsibilities if they are not selected,” and that 

“Cigna has very generous Change in Control and retention benefits, which will ensure that 

these individuals will remain through closing.” Id. at ’495. On the issue of integration 

planning, Swedish delivered Anthem’s bottom line position: “Anthem acquired Cigna and 

therefore it is Anthem’s Board that has the responsibility for overseeing Anthem’s 

integration of Cigna and to ensure that Anthem’s shareholders, post-closing, realize the 

value and benefit of the transaction.” Id.

4. The Meeting On January 11, 2016

Swedish met with Cordani in person on January 11, 2016.98 The purpose of the 

meeting was for Swedish to present his vision for NewCo’s organizational structure. See 

 

98 Swedish and Cordani met briefly on January 5, 2016, just before the January 

meeting of the Steering Committee. They did not discuss the letters. See JX 1025; Cordani 
62

JX 1042. During the meeting, Swedish gave Cordani a set of slides and explained that he 

envisioned that Cordani would be President and COO, but would serve only as the head of 

NewCo’s commercial business unit. See JX 1053. Swedish explained that the commercial 

business unit was twice the size of Cigna’s total business, was critical to Anthem’s success, 

and needed “a senior leader’s singular focus.”

99 Swedish explained that for the other lines 

of business, he chose executives who had experience and expertise that Cordani did not 

have. See Swedish Tr. 109194. Talking points that Swedish prepared for the meeting 

noted that because Cordani could leave within two years with full severance, Anthem 

needed to “diversity [its] business leaders and create multiple successor options for the 

Board’s eventual consideration.” JX 1033 at ’010. 

Regardless of the messaging, this was a significant reduction in Cordani’s 

responsibilities. Swedish and Cordani had agreed during their discussions with Riefberg 

that Cordani would have responsibility for all four business units.100 Cordani had attempted 

unsuccessfully to re-trade that agreement by expanding his role. Swedish was now reducing 

Cordani’s role and telling him that he was not the anointed successor as CEO. 

 

Tr. 1803–04. The January meeting of the Steering Committee was frustrating for Jones, 

who continued to seek more collaborative and proactive decision-making on the regulatory 

front. Zielinski and Anthem continued to believe that they had the regulatory process under 

control, and they resisted Jones’s involvement. See JX 1020; Jones Tr. 2608–14. 

99 JX 1033 at ’010; see Swedish Tr. 1093–94.

100 See JX 1062 at ’501 & slide 5; Zielinski Tr. 263–70; Swedish Tr. 1229.
63

Cordani did not react well to Swedish’s message. After hearing Swedish explain the 

proposed structure, Cordani said that they had “nothing else to talk about” and left the 

room.101 Cordani admitted that he was “disappointed” and “frustrated.” Cordani Tr. 1983.

5. The Cigna ELT’s Response

Cordani viewed Swedish’s attempt to cabin his role as a hostile act.102 Before the 

day was over, Jones and her colleagues were reviewing the provisions of the Merger 

Agreement that addressed NewCo’s officers and directors as well as the sections of 

Anthem’s bylaws that described the senior officer roles.103 That evening, Jones reached out 

to Wachtell Lipton Rosen & Katz LLP, which she described as “the preeminent firm on 

hostile deals.”

104 The Cigna executives also reached out to Moelis & Company.105 Cigna 

already had a suite of deal advisors, including Cadwalader, Cravath Swaine & Moore LLP, 

and Morgan Stanley. The Cigna ELT wanted additional advisors to focus specifically on 

defending against a perceived hostile takeover. See Cordani Tr. 1809–10.

Within three days after Swedish’s meeting with Cordani, the Cigna ELT had 

prepared an action plan.106 Titled “Integration Planning and Engagement Framework,” its 

 

101 Swedish Tr. 1096; see Cordani Dep. 543–44.

102 See Cordani Tr. 1808; Jones Tr. 2617–18.

103 See JX 1044; JX 1051; Cordani Tr. 1984.

104 JX 1051. At trial, Jones testified that she did not know that Wachtell Lipton had 

experience with hostile deals. Jones Tr. 272934. That testimony was not credible. 

105 See JX 1059; JX 1089.

106 See JX 1075; JX 1079; see also JX 1090; JX 1093.
64

goals were to (i) limit integration planning and (ii) restore Cordani’s role. JX 1075 at ’613, 

’617, ’620. The two were linked because decisions about how NewCo would be organized 

affected Cordani. The Cigna ELT did not want Swedish making “critical high-level 

decisions for NewCo (such as overall business strategy and leadership structure) . . . .” Id.

at ’617. To stop this from happening, they wanted to “[r]efocus integration planning on 

Day 1 priorities.” Id. at ’619.

To cabin Swedish’s authority, the Cigna ELT sought to “[e]nsure that critical highlevel planning decisions for NewCo are raised to and addressed by the NewCo Board.”

107

The NewCo Board designees were scheduled to have their first meeting on February 16, 

2016. The meeting was primarily an opportunity to socialize. Swedish Tr. 1104. Cigna 

ELT planned to use it to “[r]eset current expectations and processes with respect to 

integration planning.” JX 1075 at ’619. 

The Cigna ELT also planned to use the February 16 meeting to re-establish 

Cordani’s role. The goal again was to redirect “planning for the role of President and COO”

from Swedish “to the NewCo Board.” Id. at ’620. Cordani would send a positive letter to 

Swedish, but with the “NewCo Board as the audience.” Id. at ’621. Cigna would also 

identify “friendly investors to reach out to Anthem’s continuing directors to articulate 

D. Cordani’s value.” Id. And Cigna would “[c]ontinue D. Cordani’s high-visibility with 

investors and the media.” Id. 

 

107 Id. at ’617; cf. JX 412 at ’702 (email from Jones describing strategy to involve 

NewCo Board as a means of checking Swedish).
65

After speaking with their advisors, the Cigna ELT developed a more detailed “go 

forward path.” See JX 1095. The Cigna ELT had concluded that Swedish’s “actions don’t 

likely create a path to not complete the deal.” Id. at ’002. The goal therefore was to establish 

an “[a]lternative structure . . . for integration planning, Day 1 with [Cordani] in [an] 

acceptable role.” Id. at ’735. Rather than Swedish, the NewCo Board would “determine 

best ongoing structure post Day 1 for NewCo.”

108

If all went well at the February 16 meeting, then Swedish would be checked. If 

Anthem resisted, then Cigna could “escalate publically [sic],” with the expectation that 

Anthem would back down “to avoid public fight.” JX 1095 at ’002. 

6. Preparations For The February 16 Meeting

Over the ensuing weeks, the Cigna ELT, Moelis, and Cadwalader prepared 

extensively for the February 16 meeting.109 Moelis dubbed the plan “Project Alpha,” a code 

name that was “consistent with [the] objective.” JX 1104. The purpose of the plan was to

ensure that the integration plan with [Anthem] is developed and, ultimately 

implemented post-closing, in a manner that maximizes the long-term success 

of the combined company by ensuring [Cordani] is seated as [NewCo’s] 

President and COO, with the authority, powers, duties and responsibilities 

generally considered to be incident to those titles . . . and positioning 

[Cordani] as the natural successor to the CEO . . . .

 

108 Id.; see JX 1164 at ’208 (discussing goal of slowing down integration planning).

109 See JX 1104; JX 1106; JX 1107; JX 1109 JX 1140; JX 1164; JX 1182; JX 1206; 

JX 1207. Zollars, a Cigna director, testified that the Cigna Board was never told that Moelis 

was advising Cordani and the Cigna ELT on positioning Cordani to become the CEO of 

NewCo. Zollars Tr. 2502. He felt that paying Moelis to work toward that goal would have 

been an inappropriate use of Cigna’s resources. Id. at 2503.
66

JX 1106 at ’586. In its complete form, the plan consisted of a sixty-six page “playbook”

that included lists of critical issues, scenario planning, “Hardball Q&A,” “Proposed Board 

Pairings,” and a “Plan B” to deploy if the meeting did not go well.110

Throughout each phase of “[t]he overall ‘battle plan,’” the Cigna ELT and their 

advisors sought to act indirectly and covertly. Moelis advised “the C[igna] continuing 

directors should be the tip of [the] spear and [Cordani] should play a lead role in [the] 

shadows.”

111

The Cigna ELT separately mapped out the “Escalation Alternatives” to be deployed 

if the February 16 meeting did not go well.112 The possible “Hostile Alternatives” included 

an investor campaign, a public relations campaign, a customer/provider campaign, a 

government affairs strategy, and legal action.113 The public relations campaign envisioned 

that Cigna would (i) “[h]ire PR firm and identify friendly reporters,” (ii) “[o]rchestrate 

press report about [Cigna] discontent,” (iii) “arrange for positive profiles of [Cordani],”

and (iv) “highlight[] merits of [Cigna] position.” JX 1186 at ’002–03.

 

110 See JX 1522; see also JX 1178; JX 1194

111 JX 1226; see JX 1186; JX 1224; JX 1233; JX 1251; JX 1291; see also JX 1165 

at ’522–23 (Moelis recommending that Cordani “[c]onsider asking C[igna] directors to be 

‘scapegoat’ and [to] explain that [Cordani] wasn’t the bad guy”).

112 JX 1186 at ’310; see JX 1215; JX 1217; JX 1223; JX 1284.

113 JX 1186 at ’002; see JX 1215; JX 1217; JX 1223; see also JX 1165 (“To use one 

of David’s military analogies which he seems to like so much – with the Board, we will 

use ‘aggressive diplomacy’ that could involve threats if we don’t get the right response”); 

JX 1226 (“If February 16 meeting does not generate desired discussion . . . , then we should 

fight.”).
67

Meanwhile, Swedish continued to attempt to move forward with the interviews that 

would enable him to select the NewCo ELT by March 1, 2016.

114 Cordani steadfastly

resisted Swedish’s efforts.115 He argued that no decisions on leadership should be made 

until after the parties mutually agreed that the deal was four months away from closing.116

By this point, Swedish no longer wanted Cordani to be part of NewCo.

117 Swedish 

called a meeting of the Anthem Board in advance of the February 16 meeting, expecting 

“to get full support” for “proceeding with the process plus deleting [Cordani] from our 

consideration going forward.” JX 1293. Swedish believed that “[f]urther conversation 

about [Cigna’s] position [was] a total waste of time” and that Anthem needed to implement 

its plans “irrespective of [Cigna’s] opinions.”

118

7. The February 16 Meeting

During the February 16 meeting, the Cigna designees conveyed their concern about 

Cordani’s reduced role and the timing of the leadership selection process.119 The Anthem 

 

114 JX 1169; JX 1189; JX 1266; JX 1293; see generally JX 1287 (collecting 

communications).

115 See JX 1169; JX 1189; JX 1222; JX 1283; JX 1293.

116 See JX 1283; JX 1466 at ’368; JX 4050; Swedish Tr. 1204–06.

117 Swedish Tr. 1225, 1258–59; see JX 1293; JX 1303; Zielinski Tr. 258–59, 273–

74.

118 JX 1303. Swedish testified in the Antitrust Litigation and again at trial in this 

litigation that he respected Cordani’s position on the timing of the leadership selection 

process and regarded it as a constructive suggestion. See Swedish Tr. 1205–06, 1255–56. 

That testimony was not credible. 

119 See JX 1340 at ’001–02; Swedish Tr. 1104; Zollars Tr. 2472–73. During the 

meeting, Jones raised concerns about the regulatory process. Swedish responded that 
68

designees empathized with their future colleagues.120 The consensus was for Swedish to 

meet with Harris to present his model and explain the underlying rationale.121

After the dinner with the Cigna designees, the Anthem Board met formally on 

February 17 and 18, 2016. The Anthem directors decided that Anthem should not do 

“anything to upset David or the directors at CIGNA and that the primary objective was to 

keep everything on peaceful terms in order to get the deal closed.” JX 1323. To that end, 

they decided that “no announcements about the organization should be made without first 

discussing it with our board, and [Swedish] agreed with that.” Id. Swedish interpreted the 

Anthem Board’s direction as changing the timing but not the outcome. 

8. Cigna Escalates Further.

The February 16 meeting did not result in a commitment that Cordani would be 

President and COO with responsibility for all four of NewCo’s business units and a 

confirmed path to CEO. Nor did it reset expectations regarding the integration process. The 

Cigna ELT decided to escalate.

On February 23 and 24, 2016, the Cigna Board held a lengthy meeting. During an 

executive session, Cordani, Jones, and McCarthy reported on 

certain issues that have arisen which create “red flags” that the Anthem 

transaction may be trending away from the deal that the Board believed it 

 

Zielinski was in charge of the regulatory process and was going to get the Merger approved. 

Zielinski then claimed that he had not heard about Jones’s concerns before that point, which 

was not accurate. This experience caused Jones’s frustration with Anthem to increase. See 

Jones Tr. 2619–21.

120 See, e.g., JX 1300; JX 1487; JX 1501; JX 1568; Zollars Tr. 2472–73.

121 Swedish Tr. 1104–05; Jones Tr. 2623.
69

was entering into at the time of signing, including . . . (1) the pace and 

progress of the regulatory process; (2) the focus of the integration planning 

process; (3) Anthem’s proposed post-closing organization structure; and 

(4) the health of Anthem’s underlying fundamentals.

JX 1350 at ’835. Despite being listed third, the “post-closing organization structure” was 

the real issue. Re-focusing the integration process was a way to protect Cordani’s role and 

gain leverage against Anthem. Although Cigna was legitimately concerned about how 

Anthem was handling the regulatory process, Cigna used the state of the regulatory process 

as a justification for re-focusing the integration process.

At the conclusion of the two-day meeting, the Cigna Board “confirmed its desire”

on the following points regarding the Merger:

(1) a special meeting of the Board be held at the end of March devoted 

exclusively to the Anthem transaction and the “red flags” discussed, as well 

as any others that may emerge;

(2) the Chairman of the Board meet with the Chairman of Anthem to discuss 

the organizational structure of the combined company that Anthem had 

proposed;

(3) management re-assess and, as necessary, de-scope the Corporation’s 

integration planning efforts in light of the concerns raised on the pace and 

progress of regulatory efforts;

(4) management continue to keep the Board advised on an ongoing basis of 

the current market dynamics and refresh the Corporation’s stand-alone 

strategy and projections at the regularly scheduled meeting in July; and

(5) management retain additional legal and other advisors to assist the Board 

in reviewing and evaluating the Corporation’s rights and obligations under 

the merger agreement to ensure that shareholders are getting benefits for 

which they had bargained.

Id. at ’843–44 (formatting added). Again, the principal issue was “the organizational 

structure of the combined company.” To create leverage on that issue, the resolutions gave 
70

the Cigna ELT the authority to “re-assess and, as necessary, de-scope” Cigna’s 

involvement in integration planning, using “the pace and progress of regulatory efforts” as 

a justification. Notably, the Cigna Board also called for reassessing Cigna’s “stand-alone 

strategy.”

The resolutions provided authority for the Cigna ELT to formally hire Moelis and 

Wachtell Lipton as additional advisors. Cigna management already had decided to hire 

both firms.122

On Wachtell Lipton’s recommendation, Cordani hired Teneo, “an exceptional 

communications/strategy advisory firm.”

123 Skilled in the darker arts of influencing the 

media and public discourse, Teneo touted that “[a] well-run communications strategy can 

dramatically change the outcome of high-stakes litigation and/or enforcement action 

matters,” and that “a good communications plan will not only support the overall legal 

strategy, but will serve to protect a company’s reputation, as well as direct the conversation 

 

122 See JX 1151; JX 1289; JX 1360. In his deposition, Cordani testified that Cigna 

retained Wachtell Lipton to “advise the board on actions to help get the deal to the finish 

line.” Cordani Dep. 201. That testimony was misleading. Wachtell Lipton technically was 

hired to advise the Cigna Board, but Wachtell Lipton did not do anything to help complete 

the deal. See Cordani Tr. 1985–86; Jones Tr. 2731. Wachtell Lipton helped Cigna to escape 

from the deal. For example, Wachtell Lipton provided advice about terminating the Merger 

Agreement and recommended that Cigna not make statements about believing in the merits 

of the Merger. Jones Tr. 2731–32. Wachtell Lipton did not provide any advice about how 

to convince the DOJ to approve the Merger, how to construct a remediation proposal to 

clear the Merger, how to achieve a resolution with the DOJ, or how to prevail at trial. Id.

123 JX 1434; see JX 1389; JX 1430; JX 1436; JX 1437 at ’433.
71

outside of the courtroom.”

124 Wachtell Lipton previously worked with Teneo when 

representing another client that was seeking to avoid closing a merger.125

Only a handful of senior Cigna executives knew about Wachtell Lipton’s 

involvement.126 To conceal Wachtell Lipton’s role, the executives referred to the firm as 

the “Tea Company,” an allusion to Lipton-brand tea.127

 

124 JX 2976. After Anthem deposed a Teneo representative about this language, 

Teneo revised its website. See JX 3140 (“A well run communications strategy can 

dramatically change the public’s understanding of a company’s role in high-stakes 

litigation and/or enforcement matters; a good communications plan will not only support 

the overall legal strategy, but will serve to protect the company’s reputation outside the 

courtroom.”); Cohen Tr. 2371–72.

125 Cohen Dep. 22–23. In his deposition, Cordani testified that Cigna hired Teneo to 

“[s]upport and help us get the deal done.” Cordani Dep. 146. That testimony was 

inaccurate. Teneo worked against the deal. Cigna never asked Teneo to develop any 

arguments in favor of the Merger, and Teneo did not put together any messaging or 

communications to support the Merger as pro-competitive. See Cohen Tr. 2384, 2386. 

Teneo’s work ran so obviously against the Merger that Jones could not give a straight 

answer as to whether Teneo worked on the Merger. See Jones Dep. 1111 (“They did work 

on things that related to the merger, certainly. But -- or, well, I’m not sure if they worked 

on things related to the merger. They certainly -- there were things that obviously they 

were, that they were doing relating to the merger -- well, not doing relating to the merger. 

The answer is, I don’t think they were working on anything specifically relating to the 

merger.”). Jones testified inaccurately that Teneo was not “specifically retained to work on 

merger-related items.” Id. She likewise testified inaccurately that “there wasn’t a proactive 

nature to what Teneo was doing vis-à-vis the merger.” Id. at 1112. Lisa Baucus, a Cigna 

executive who worked closely with Teneo as it worked against the Merger, testified 

inaccurately that she was “not really clear what [Teneo] did beyond our breakfast 

meetings,” which Cigna conducted to raise awareness about the opioid crisis. Baucus Dep. 

318. She also testified inaccurately that Teneo did not do any work to promote Cigna’s 

standalone business. Id. at 317–19. She claimed not to know or be able to infer that “[C]” 

stood for Cigna and “[A]” stood for Anthem in a memorandum from Teneo. Id. at 701–09.

126 See JX 1738; Jones Tr. 2665, 2728.

127 See, e.g., JX 1530; JX 1861; JX 2333; JX 2684; JX 2717; Jones Tr. 2665–66; 

Harris Tr. 3258–59.
72

Cigna similarly restricted knowledge of Teneo’s activities. To manufacture a basis 

for claiming privilege over Teneo’s work, Cigna and Teneo engaged in the ruse of having 

Wachtell Lipton retain Teneo. Cigna and Teneo also used Wachtell Lipton attorneys as 

conduits to provide a basis for claiming privilege.128

Consistent with the Cigna Board’s directive to resume analyzing Cigna’s standalone strategy, the Cigna ELT, Wachtell Lipton, and Teneo began examining topics such 

as “landscape w/ transaction completion and without” and “[p]reparation in the event 

 

128 See JX 1437; JX 1583; JX 1642; JX 1752; Cohen Tr. 2429–30. At trial, Jones 

denied that Cigna and Teneo channeled documents through Wachtell Lipton to 

manufacture privilege. Jones Tr. 2780–84. The contemporaneous record contradicts her 

testimony. See JX 2489; JX 3143; JX 3144; JX 4160; Jones Tr. 2784. Jones also 

participated in efforts to manufacture privilege for other Cigna documents. See JX 1109 at 

’395 (Project Alpha document with notation, “SUGGEST THIS GO OUT FROM NSJ 

TO GET PRIVILEGE”). In this litigation, Cigna withheld numerous Teneo documents 

as privileged before producing them a year later in the face of a motion to compel. See, 

e.g., JX 1529; JX 1752; JX 1764; JX 2298; JX 2462; JX 2483; JX 2484; JX 2486; JX 2499; 

JX 2585; JX 3110.

Anthem also asserted privilege aggressively, most notably in the Antitrust Litigation 

for documents prepared by the Special Task Force. See Part II.K.4, infra. Anthem 

inaccurately claimed that the Special Task Force related to the Blues MDL, and Swedish 

testified to that effect. See JX 2594 at 13–17; Swedish Tr. 1303–08. The Special Task Force 

had nothing to do with the Blues MDL; it was formed to analyze how the Blues Association 

could respond to the Merger. Swedish Tr. 1293, 1305, 1365–66. 

Anthem points out that it did not hide the existence of the Special Task Force, either 

in the Antirust Litigation or in this case, and that is true. See, e.g., JX 1236; JX 3113; 

JX 3114; Zielinski Tr. 519–22, 525–26. The problem was Anthem’s unfounded assertion 

of privilege, which the DOJ did not challenge. In this litigation, Cigna successfully 

challenged the improper assertion of privilege, and Special Task Force materials came to 

light. See Dkts. 404, 551, 559. 

Neither side was forthright when asserting privilege. That is yet another factor 

undercutting both sides’ credibility.
73

transaction is not approved.”

129 Teneo developed the following three level “Post February 

16 Framework” for Cigna to follow:

See JX 1522 at ’065. 

Anthem maintains that by this point, the Cigna ELT had turned definitively against 

the Merger, but Cordani and his colleagues had not crossed that bridge. The Cigna ELT 

had soured on how Anthem was approaching the Merger, including how the Anthem ELT 

was managing the integration planning process. The Cigna ELT was drawing a line in the 

sand on those issues. If Cigna could force Anthem to change its approach, restore Cordani’s 

role, and treat Cigna as an equal partner, then the Cigna ELT could support the Merger. 

 

129 JX 1468 at ’805; see also JX 1486 at ’669.
74

9. The De-Scoping Of The Integration Planning Process

On the day after the Cigna Board meeting, Hocevar sent an email to all of the Cigna 

team leaders telling them to prioritize “Day 1” planning and not to engage in detailed 

planning for later periods.130 He stressed,

 “Day 1 activities are the key priority on integration planning now and if time 

permits, we can work on finalizing any of the high level [sic] post close planning 

assumptions. We are a long way off from locking down Day 1 requirements.”

JX 1367 at ’243.

 “We have enough information shared at this point and truly need insights at this 

point rather than more information.” Id.

 “We know at a high level that there is a line of sight to the $2B of shareholder 

synergies and while we need to validate high level thinking on the synergies, we do 

not need to lock down on the details of any lever at this point.” Id. at ’242.

 “The details of ‘how we make money’ or ‘our secret sauce’ should continue to be 

held closely to the vest at all times as it truly is the competitive advantage we have.”

Id.

 “Most importantly, neither Mckinsey [sic] nor Anthem should drive the pace of 

integration planning.” Id.

He specifically noted that Cigna should not be “‘[s]igning up’ for specific growth strategies 

post close” or “[a]ccelerating any requirements / development of initiatives beyond Day 1 

planning items.” Id. Hocevar later described Cigna’s position to Bain & Company as “a 

freeze on integration activities.” JX 1557. He also told Bain that the parties were in a

“[h]olding pattern in naming” NewCo’s leadership team that was “Cigna driven.” Id.

 

130 JX 1367. There is evidence that the Cigna ELT began restricting the flow of 

information to Anthem before receiving formal authorization from the Cigna Board, 

particularly as it related to data on medical management, utilization, and value-based care. 

See, e.g., JX 1211; JX 1212; JX 1214; Drozdowski Tr. 924–47.
75

Bain’s takeaway was that Cigna “will no longer participate in the process as it is currently 

be[ing] run by Anthem and McKinsey.” JX 1564. 

After Hocevar sent his email, the various Cigna teams began informing their 

Anthem counterparts of Cigna’s new stance.131 His Anthem counterpart, Matheis, 

immediately objected and asked Swedish to intervene.132

10. The Status Of The Regulatory Approval Process

The timing of Cigna’s decision to de-scope integration corresponded with a new 

phase of the regulatory approval process. Before then, the process largely involved 

collecting information in response to the second requests, and the relationship between the 

parties’ regulatory counsel had been constructive. During 2015, they had made “good 

progress” on the regulatory strategy and were “working well together.”

133 In December 

2015, they conducted a preliminary review of the divestitures that might be necessary to 

obtain regulatory approval.134 Both sides agreed that they were not far enough along with 

DOJ to work out a specific divestiture plan, but they nevertheless discussed what the shape 

of the divestitures should be, what assets might need to be included, how it could be 

structured, and potential buyers.135

 

131 See JX 1380; JX 1382; JX 1383; JX 1390; JX 1398; JX 1432; JX 1439.

132 See JX 1382; JX 1387; JX 1392; see also Zielinski Tr. 39–40 (describing Cigna’s 

limitation of integration planning to Day 1 activities).

133 Paul Tr. 613; see Zielinski Tr. 310; Rosen Tr. 780; Curran Tr. 1474.

134 See JX 901; Paul Tr. 632–633; Gray Tr. 1664–65.

135 See Paul Tr. 635–36; Rosen Tr. 784–85; Paul Dep. 70, 75–82, 86, 99.
76

On February 9, 2016, while the drama over the L2/L3 selection was playing out, 

Anthem certified that it had substantially complied with the DOJ’s second requests. See 

JX 1235. As is customary, the parties entered into a “timing agreement” with the DOJ in 

which they committed not to close the Merger before July 1, 2016, unless the DOJ had 

completed its investigation. The agreement called for the parties to meet with the DOJ in 

June to hear its views on the Merger.136 With the DOJ investigation cranking up, the 

parties’ lawyers reviewed their strategy and developed a work plan.137

On February 17, 2016, Anthem and Cigna had their third meeting with the DOJ, this 

time to find out what areas the DOJ might want the parties to address through white papers 

or other submissions. The parties also sought to obtain preliminary insight into the DOJ’s 

views on the deal.138 Anthem signaled that it was prepared to discuss divestitures, but asked 

the DOJ to provide guidance on what types of divestitures might be helpful. After the 

meeting, Anthem’s counsel sent a discussion document about divestiture strategies to 

Cigna’s counsel, and Anthem’s economist began running screens to identify local market 

areas where divestitures might be necessary.139

 

136 JX 1775 at ’511; see Rule Tr. 3068.

137 See JX 1246; JX 1305.

138 See JX 1292; JX 1326.

139 See JX 1304; Paul Tr. 633–634. Rosen, one of Anthem’s principal antitrust 

lawyers, testified that Anthem began having issues with Cigna’s cooperation “in the 

January, February time frame of 2016,” tying his recollection to “a dispute over the timing 

of the submission of the Hart-Scott-Rodino responses” and explaining that “it really started 

to decline after that, and accelerated after that.” Rosen Tr. 781. Cigna failed to deliver its 

response to the second requests in a form that was acceptable to the DOJ, which became 
77

H. The Impasses Of March And April

As the calendar turned to March 2016, the disputes between Anthem and Cigna 

intensified, with Cordani’s role front and center. By the end of March, the Cigna ELT had 

turned against the Merger. During April, Cigna’s opposition to the Merger became clear.

1. Swedish Pushes Forward.

During the February 16 meeting, the NewCo designees reached a consensus that 

Swedish should meet with Harris to discuss the organizational structure. The Cigna ELT 

prepared Harris for that meeting with pointed questions about Swedish’s plan and whether 

it reflected the parties’ earlier discussions.140 After the meeting, which took place on March 

7, Harris told Swedish that his proposal deviated from the parties’ agreement, that Harris 

would raise the issue with the Cigna Board, and that Cigna did not consent to any 

announcement on the leadership structure.141

Swedish responded to Harris on March 14, 2016. In his letter, Swedish doubled 

down on his structure and Cordani’s role.142 Consistent with the Anthem Board’s 

instructions, Swedish agreed to “defer the assessment and selection of Cigna’s leadership 

 

an issue in late February. The record as a whole suggests that the level of cooperation 

between the parties’ regulatory counsel began to decline after the de-scoping of the 

integration process, as Cigna’s resistance to the Merger deepened. Cigna eventually 

delivered its response in a form that was acceptable to the DOJ on March 4, 2016. See JX 

1641. 

140 See JX 1360; JX 1408; JX 1435; Swedish Tr. 1105.

141 JX 1463; Swedish Tr. 1106–07.

142 JX 1484; see Swedish Tr. 1107–10.
78

to fill L2-L4 roles in the new structure until obtaining an indication of clearance/approval 

from the DOJ for the transaction.” JX 1484.

The Anthem Board met later that day, and Swedish reported on his actions. Rather 

than backing Swedish, the Anthem directors felt that he had overstepped his authority. 

They pushed for Swedish to call Cordani and restore his responsibility for all of NewCo’s 

operating businesses.143 Swedish was not happy with that guidance and did not do anything 

to implement it. See JX 1568.

2. The Continued Impasse Over Integration Planning

The disputes over integration planning were also coming to a head. At the monthly 

meeting of the Steering Committee on March 11, 2016, Matheis tried to get the integration 

planning process back on track. See JX 1466. In response to Anthem’s requests to restart 

integration planning, Cigna generally stood by its limitation to Day 1 activities, but agreed 

to reconsider its position for some activities.144

To support Cigna’s position on integration planning, Jones gave a presentation 

about the regulatory process. She identified the many tasks that still needed to be 

accomplished and argued that obtaining regulatory approval would take significantly 

longer than expected, which would delay closing and obviate any immediate need to push 

forward with leadership selection or other detailed aspects of integration planning.145 Jones 

 

143 See JX 1480; JX 1487; JX 1501; Swedish Tr. 1111–12.

144 See JX 1492; JX 1493.

145 JX 1506 at ’119 (“The attached is the primary reason why we slowed the pace of 

the integration planning.”); JX 1469 at ’884; Jones Tr. 2625–27, 2632–33.
79

criticized Anthem as having an “unclear strategy” and an “unclear remedy,” and she argued 

that Anthem should begin working on a remediation strategy.146 The Anthem executives 

disagreed. They felt that until the DOJ had identified its concerns, it would be premature 

to begin developing a divestiture strategy,147 and they believed that it would be relatively 

easy to find a buyer and complete a transaction.148 After the meeting, Matheis emailed that 

“[t]here is a clear disagreement about the timing to close.” JX 1492. Anthem still believed 

that a closing could happen during the summer of 2016; Cigna thought it would take longer. 

Zielinski Tr. 405–06.

For the rest of the month, Anthem and Cigna went back and forth on additional areas 

of integration planning where Cigna would agree to engage. Generally speaking, Cigna 

insisted on limiting any detailed planning efforts to Day 1 activities; otherwise, Cigna only 

would engage on “high-level strategic direction, goals / metrics for NewCo, and major 

operating model decisions.”

149 Based on Cigna’s broad withdrawal from everything other 

 

146 JX 1506 at ’119 & slide 6; see Jones Tr. 2628–29; Zielinski Tr. 402–05.

147 See JX 2067; Zielinski Tr. 47, 405–07; Jones Tr. 2628–29.

148 See JX 2074; Jones Tr. 2628–29; Rule Tr. 3077–79.

149 JX 1518 at ’997; see JX 1519 (“G&A Value Capture work is being paused per 

3/11 Steer Co (along with quite a few other items).”); JX 1520 at ’112 & slide 8 (“Network 

– Cigna data is still incomplete to conduct full value capture analytics.”); JX 1545 at ’420 

(declining to provide “details on costs”); JX 1567 at ’427 & slide 4 (noting that Cigna had 

discontinued “Value capture activities”); see also JX 1502; JX 1513; JX 1577.
80

than Day 1 integration planning, Anthem decided not to engage with Cigna on some areas 

where Cigna had indicated a willingness to re-engage.150

Anthem viewed Cigna’s de-scoping of the integration work as so problematic that 

Anthem formed its own internal integration team. Called “Phase 2B,” the internal team 

focused on “core priorities” where “select Cigna data or engagement is limited.”

151 The 

main areas of focus included organizational structure, value capture, ways to reduce cost 

of care, NewCo’s growth strategy, and NewCo’s IT program and branding. JX 1558 at 

’777. The Phase 2B team was highly confidential, even within Anthem. Swedish informed 

Cordani that Anthem would continue to work on some items without Cigna’s involvement, 

but Anthem did not share the list of topics with Cigna.152

At the end of March 2016, Hocevar reported to Cordani that work on work streams 

that did not involve Day 1 activities remained “stopped” or was “still in replanning mode. 

. . .” JX 1560 at ’437. As late as April 18, Cigna and Anthem still had not agreed on the 

areas that Cigna would support.153 During this period, Cigna kept certain categories of 

information “close to the vest,” including the “details of important processes such as 

medical management [utilization].”

154

 

150 See JX 1549; JX 1558 at ’783; Drozdowski Tr. 1005–08.

151 JX 1558 at ’776; see JX 1493; Zielinski Tr. 41.

152 See JX 1491; JX 1495; JX 1613 at ’699; JX 1618.

153 See JX 1670; see also JX 1611 at ’212; JX 1657.

154 See JX 1617; see also JX 1548; JX 1626 at ’124.
81

3. The Cigna Board’s March 31 Meeting

On March 31, 2016, the Cigna Board held a meeting devoted primarily to the 

Merger. As during the February 2016 meeting, the minutes identified four “red flags”: 

“(1) the pace and progress of the regulatory process; (2) the focus of the integration 

planning process; (3) Anthem’s proposed post-closing organization structure; and (4) the 

health of Anthem’s underlying fundamentals.” JX 1570 at ’491. The real issue remained 

“the proposed structure and leadership of the combined company.” Id. at ’492. 

As part of the discussion, Cigna management presented a twenty-one page “Update 

on ‘Red Flags.’” JX 1572 at ’077; see id. at ’077–97. It began with a lengthy discussion of 

the regulatory approval process, reporting that “[c]ounsel puts chances of closing at 

~ 50/50,” that the “best case scenario is we get to close by 1Q17,” and that “[d]ivestitures, 

at a minimum, will be required.” Id. at ’079. The materials included an assessment by 

Cadwalader of twenty different regulatory items that needed to be addressed. For seventeen 

of those items, Cadwalader asserted that the work was well behind schedule or otherwise 

inadequate. See id. at ’095–97. 

The presentation reported that Cigna was insisting that all of the following tasks to 

be deferred until the third quarter 2016:

 post-close value capture targets for Year 1,

 post-close branding approach,

 post-close [go-to-market] approach developed,

 divestiture support if needed,

 post-close human capital approach, and
82

 post-close financial and reporting approach.155

Under that timeline, the work would not resume until after the DOJ already had made its 

decision on the Merger. The parties therefore would not be able to use the work product to 

convince the DOJ to approve the Merger, making it more likely that the DOJ would sue to 

enjoin the Merger.

The presentation critiqued Swedish’s proposed organizational structure extensively. 

See id. at ’084–85. It also criticized Anthem’s business performance and claimed that 

without Cigna, “Anthem does not appear to have a path to sustainable growth.” Id. at ’086.

Teneo gave a separate presentation that identified ten risks to the Merger: three from 

the regulatory process, four from the standpoint of value creation, and three based on 

corporate governance and Cordani’s role. JX 1561 at ’917 & slide 3. Teneo argued that 

Cigna was “Well Positioned For Standalone Success,” and that if the Merger was 

terminated at the end of 2016 because of regulatory issues, then Cigna would have 

“[s]ubstantial ‘dry powder’” of between $6 and $8 billion. Id. at slide 5. Teneo identified 

three categories of other “M&A possibilities” that would be available to Cigna if the 

Merger failed. Id. The presentation carefully stated that Cigna should continue “to prepare 

 

155 Id. at ’083 (formatting in original); accord JX 1570 at ’491 (Cordani reporting 

to Cigna Board that Cigna had stopped all integration planning that did not involve Day 1 

activities and would begin focusing on “(1) what will be needed for the combined company 

in the first 90 days post-closing; and (2) how, together, the companies will deliver 

sustainable value to all of its [sic] key stakeholders”); see JX 1560 at ’437 (Hocevar 

reporting to Cordani that Cigna was working only on Day 1 activities and remained “in 

replanning mode” on activities for the next ninety days).
83

for the transaction to carry on and gain all regulatory approvals,” but it stressed that Cigna 

also needed to “[p]rotect downside should the transaction fall apart.” Id. at slide 8. 

According to the minutes, the Cigna Board determined that “to preserve the value 

of the transaction and protect the interests of the Corporation’s stockholders,” Harris would 

send a letter to the Anthem Board notifying them of Cigna’s concerns. JX 1570 at ’492. 

The minutes also indicate that the Board directed management to

(1) continue to support and influence the regulatory process to try to increase 

the chance of a timely approval; (2) consider the Corporation’s disclosure 

obligations in light of management and the Board’s concerns regarding the 

pace and progress of the regulatory efforts; (3) continue to build out a robust 

communication plan that is both reactive and proactive; and (4) keep the 

Board informed on the “red flag” issues, as well as the market dynamics and 

the Corporation’s stand-alone strategy and projections . . . .

Id.

After the meeting, the Cigna ELT and Moelis began examining Cigna’s potential as 

a stand-alone company. The Cigna ELT charged Teneo with preparing a proactive 

communications strategy. Teneo’s “priority assignment remain[ed] preparation for a 

derailment.” JX 1691. 

The carefully drafted minutes attempt to paint a picture in which Cigna still 

supported the Merger. By this point, Cordani, Jones, Morabito, and other key members of

the Cigna ELT had turned against it. They saw an opportunity in the heightened risk that 

the Merger would not receive regulatory approval. Their priority became to appear to 

comply with the Merger Agreement, while covertly engaging in passive-aggressive 

resistance to increase the chances of regulatory failure. A key part of Cigna’s strategy 

involved documenting flaws in Anthem’s approach to the regulatory process so that Cigna 
84

later could argue that Anthem’s incompetence—rather than Cigna’s opposition—led to the 

deal’s demise.

4. The Anthem Board Unsuccessfully Pursues Détente.

On April 9, 2016, the Cigna Board sent a lengthy letter to the Anthem Board. See 

JX 1627. The letter was carefully crafted, heavily vetted, and went through many cycles of 

revisions by the Cigna ELT and its advisors.

The letter claimed that Cigna remained committed to the Merger. In substance, it 

raised objections that read like claims for breach of the Merger Agreement:

 The Cigna Board expressed concern that Anthem had filed a lawsuit against its 

pharmacy benefits manager, suggesting that the suit created issues for Anthem’s 

commitment under Section 4.2 of the Merger Agreement to conduct its business in 

the ordinary course and in a manner consistent with past practice.

 The Cigna Board accused Anthem of focusing on cost synergies and expensecutting instead of strategic planning and objected to Anthem’s position that it could 

make decisions on integration unilaterally, which Cigna claimed was inconsistent 

with Anthem’s commitment under Section 5.10 of the Merger Agreement to have a 

joint committee for integration planning.

 The Cigna Board charged Anthem with reneging on the agreement that Cordani 

would be President and COO of NewCo, citing Sections 1.13(b), 3.3, and 3.4 of the 

Merger Agreement.

See JX 1627. Swedish and Zielinski were incensed. They wanted to send a strongly worded, 

point-by-point response.156 The Anthem Board felt differently. They insisted that Swedish 

tell Cordani that he would have responsibility for all of NewCo’s operating businesses and 

send a conciliatory letter to the Cigna Board.157

 

156 See JX 1619; JX 1635; see also JX 1653; JX 1662.

157 See JX 1629; JX 1654.
85

Swedish and Zielinski prepared a draft response that restored Cordani’s role, but 

otherwise contained a pointed issue-by-issue rebuttal. See JX 1663. Before meeting with 

the Anthem Board, Swedish recorded some notes in which he summarized his thoughts on 

Cordani and the Merger:

The evidence is clear regarding [Cigna’s] intent to create a “reverse merger”

beginning with the transaction negotiations and continuing with 

behaviors/integration engagement. . . . 

The past is prologue - [Ed] Hanway, . . .

The complex challenge now before us - do we retain “ownership” of the 

company or cede control to the minority interest . . . 

We are truly at war to win or are we going to be pacifists.

Yes we will accommodate until close, but there can be no future for [Cordani] 

and by definition for his loyalists.158

Swedish sent these thoughts to Riefberg, who turned them into talking points.159

 

158 JX 1673 (formatting in original); see Swedish Tr. 1114–24.

159 See JX 1683. Swedish did not testify forthrightly about JX 1673 and JX 1683. In 

deposition, he denied knowing the source of Riefberg’s talking points or having anything 

to do with them, even though they plainly came from his notes. See Swedish Tr. 1243–44, 

1246–47. At trial, he was again evasive about providing his thoughts to Riefberg. Id. at 

1239–40, 1242. He also maintained that he did not share any of these thoughts with the 

Anthem Board. See id. at 1249–1251. Yet they clearly were intended for that purpose, and 

it would have been logical for Swedish to present his thoughts given the context. See JX 

1729; Swedish Tr. 1252–54.

Swedish also did not testify forthrightly about his feelings towards Cordani. He told 

the DOJ that although he and Cordani had differences of opinion, they worked through 

those issues constructively. See Swedish Tr. 1215. He testified that throughout 2015 and 

2016, he desired to work with Cordani in the combined company. Id. at 1215–16. And he 

claimed that he did not recall ever telling anyone at Anthem that he did not want to work 

with Cordani. Id. at 1217. That testimony was not credible. 
86

The Anthem Board met on April 20, 2016. They insisted that Swedish make the 

letter even more conciliatory. They also decided that Anthem would delay sending a pointby-point response for at least another week and that Zielinski, not Swedish, would send 

it.160

On April 25, 2016, Swedish sent the conciliatory letter. See JX 1724. The Anthem 

Board hoped that the letter would end the conflict that began six months earlier when 

Swedish tried to start conducting interviews to kick off the L2/L3 selection process. 

Cigna rejected the olive branch. The Cigna ELT had been on high alert since 

Swedish’s meeting with Cordani on January 11, 2016. During the intervening months, their 

distrust of Anthem had deepened. They saw the Anthem ELT as adversaries, and they 

viewed Anthem’s actions with jaundiced eyes. 

The Cigna Board held its next meeting on April 26 and 27, 2016. The main subject 

of the first day was to review Cigna’s performance and strategic alternatives as a standalone 

company. Both Moelis and management presented on this topic. See JX 1737 at ’050. 

During the second day, the Cigna Board focused on the Merger, and the Cigna ELT 

again discussed “red flags.” Id. at ’051. The Cigna Board discussed the provocative move 

of unilaterally making a public disclosure in Cigna’s Form 10-Q about the timeline for 

regulatory approval. Id.; see JX 1786.

The Cigna ELT also presented on Cigna’s communications plan, explaining that 

Cigna was planning “a steady drumbeat of actions and messaging that promotes sovereign 

 

160 See JX 1685; JX 1700; JX 1704; JX 1711; JX 1719.
87

Cigna, our business, value proposition and leadership, to protect our current book of 

business, and Cigna’s reputation in the event of a standalone future state.” See JX 1725.

After the meeting, Cordani responded to Swedish. In the conciliatory letter, Swedish 

suggested involving NewCo directors to help manage future disputes. Earlier, as part of 

Project Alpha, the Cigna ELT suggested something similar. Now, Cordani rejected the 

idea.161 Jones sent an aggressive rebuttal to Zielinski’s letter, which kicked off an ongoing 

series of accusatory letters and emails that continued through the filing of this litigation in 

February 2017.162

Cigna had turned definitively against the Merger. From this point on, Cigna’s 

primary goal was to prevent the Merger from closing. 

5. Cigna Changes Its Disclosure.

In a Form 10-Q issued on May 6, 2016, Cigna unilaterally changed its disclosure. 

Previously, the disclosure stated, “The transaction is expected to close in the second half 

of 2016.” JX 1794 at ’028. Now, it stated, 

While the Company continues to work toward achieving regulatory approval 

as quickly as possible and to target a closing date in the second half of 2016, 

the closing will ultimately be subject to the approval and timing of the 

regulators. In light of the complexity of the regulatory process and the 

 

161 JX 1763; Swedish Tr. 1126–27.

162 See JX 1771; JX 1790; JX 1801; JX 1815; JX 1894; JX 1960; JX 2021; JX 2140; 

JX 2216; JX 2220; JX 2229; JX 2262; JX 2269; JX 2278; JX 2306; JX 2308; JX 2350; 

JX 2368; JX 2393; JX 2395; JX 2400; JX 2407; JX 2408; JX 2411; JX 2412; JX 2429; 

JX 2467; JX 2473; JX 2476; JX 2480; JX 2481; JX 2504; JX 2512; JX 2513; JX 2527; 

JX 2528; JX 2581; JX 2624; JX 2635; JX 2648; JX 2659; JX 2677; JX 2699; JX 2724; 

JX 2729; JX 2768; JX 2870.
88

dynamic environment, it is possible that such approvals may not be obtained 

in 2016.

Id. 

Cigna’s antitrust lawyers notified Anthem’s antitrust lawyers of the change at 7:00 

a.m., Jones emailed Zielinski at 7:31 a.m., and Cigna filed the Form 10-Q at 8:30 a.m.163

Cigna thus gave Anthem less than two hours’ notice before making the new language 

public.

After seeing the disclosure, Zielinski accused Cigna of violating the Merger 

Agreement. See JX 1800. Section 5.8 required that

Cigna and Anthem shall consult with each other before issuing, and give each 

other the opportunity to review and comment upon, any press release or other 

public statements with respect to the transactions completed by this 

Agreement, including the Mergers, and shall not issue any such press release 

or make any such public statement prior to such consultation, except as such 

party may reasonably conclude may be required by applicable law or the 

rules of the NYSE (or any other securities market).

MA § 5.8. 

Sophisticated observers immediately noticed the change. They inferred that because 

Cigna said that it still was targeting a closing in the second half of 2016, the fact that the 

parties might be unable to secure regulatory approval in 2016 meant that the transaction 

might not close at all.164

 

163 See JX 1802; JX 1803; JX 1805.

164 See JX 1805; JX 1812; cf. JX 1819 (Moelis presentation noting that in precedent 

broken deals, the acquirer and target remained aligned in their public disclosures and 

expressed confidence in the deal closing until receiving feedback from the DOJ).
89

After seeing Cigna’s disclosure, Anthem supplemented its legal team with a litigator 

from White & Case, who began commenting on Anthem’s communications with Cigna 

and ensuring that Anthem documented its position as the burgeoning dispute unfolded.165

Cigna had taken that step months earlier, when it hired Wachtell Lipton. A fundamental 

difference remained: White & Case was trying to help Anthem complete the Merger, while 

Wachtell Lipton was trying to help Cigna escape from the Merger Agreement.

I. The Second Stage Of DOJ Review

Cigna’s rejection of Anthem’s conciliatory outreach closed out a phase of the 

transaction process in which the principal dispute was over Cordani’s role. To gain 

leverage in that dispute, Cigna had initiated Project Alpha, choreographed the February 16 

meeting, and limited the integration process to Day 1 activities. To justify its withdrawal 

from other integration activities, Cigna cited the pace of the regulatory process. Now, the 

transaction entered a new phase in which the regulatory process became the primary forum 

for the parties’ disputes. 

1. The DOJ Update

On March 25, 2016, while Anthem and Cigna remained at odds over Cordani’s role 

and Cigna’s withdrawal from integration planning, the regulatory lawyers received an 

update from a DOJ attorney. The DOJ attorney identified four substantive issues that the 

 

165 See, e.g., JX 4167; JX 4168; JX 4169; JX 4198; JX 4206; JX 4215; JX 4360; 

JX 4368. A White & Case litigator appears on two isolated emails before this, see JX 1269 

(Feb. 2016); JX 4172 (Mar. 2016), but Anthem’s White & Case litigators do not appear to 

have been meaningfully involved before May 2016.
90

DOJ was examining: (i) “whether national accounts are a distinct market.” (ii) “whether 

Cigna, post-merger, will compete less vigorously with the other Blues,” (iii) the “market 

shares” for various customers and markets, and (iv) what would happen if the 2/3 Rule 

remained unchanged by the time that the DOJ had to decide whether to approve the Merger. 

JX 1550. The DOJ attorney agreed that the DOJ would meet with the parties during the 

week of June 20, 2016, to provide its view on the Merger. Id.

During the Steering Committee meeting on April 7, 2016, the parties discussed the 

status of the DOJ’s investigation and agreed that a “[s]ignificant amount of work is needed 

in the area[] of [the] value creation story.” JX 1611 at ’211. Anthem remained optimistic; 

Cigna believed that “additional time will be needed to gain approval.” Id.

2. The White Papers 

By late April 2016, the hostility between the executive teams had infected the 

relationship among regulatory counsel. The incipient dysfunction manifested itself in the 

preparation of white papers. 

After the parties met with the DOJ on February 17, 2016, the agency identified ten 

topics “for white papers that would be useful for [its] investigation.” JX 1395. The topics 

included (i) “[n]ational accounts, including how to define the market and the role of private 

exchanges,” (ii) “[t]he sale of commercial group health insurance in local areas in [the 

Anthem Blue States],” (iii) “[t]he sale of commercial group health insurance in nonAnthem states where Cigna competes against other Blues plans,” and (iv) “[t]he effect of 

the [2/3 Rule] on post-merger competition.” Id. The parties had already committed to 
91

provide the DOJ with a white paper addressing efficiencies. The DOJ identified specific 

information it wanted about the efficiencies derived from lower provider rates, including

(1) how the efficiencies will be achieved; (2) what products (commercial, 

Medicare Advantage, etc.) will be affected by the lower rates; (3) which 

geographic markets will benefit from the lower rates; (4) why the merger is 

necessary to achieve the lower rates; and (5) how the lower rates will affect 

the quality, quantity, and availability of in-network services for your 

members.

Id. 

White & Case took the lead on preparing the white papers. White & Case sent the 

drafts to Cadwalader so that Cigna could provide comments and provide information about 

Cigna’s business.166 White & Case solicited detailed input from the Cigna team.167 What 

they received consisted of big picture comments, thematic suggestions, and questions that 

invited White & Case to substantially revise or rewrite the white papers.168

At the end of April 2016, the members of the Cigna ELT began reviewing and 

commenting on the white papers.169 That complicated matters because rather than 

providing detailed information, the Cigna executives raised high-level questions about the 

 

166 See JX 1641; JX 1724 at ’086; Paul Tr. 615, 621.

167 See JX 1697; JX 1750; JX 1889 at ’021–22.

168 Paul Tr. 615, 621–23; Rosen Tr. 782–83; see, e.g., JX 1631; JX 1675; JX 1692; 

JX 1717; JX 1743; JX 1760. See generally JX 1889 at ’022 (Anthem’s regulatory counsel 

asking Cigna’s regulatory counsel to engage more actively in drafting and editing the white 

papers).

169 See JX 1736; JX 1774; Jones Tr. 2646.
92

regulatory strategy.170 During meetings about the white papers, the Cigna team questioned 

the overall direction of the white papers and their contents.171

During the drafting process, Anthem’s counsel asked Cigna for help assembling 

information that had been delayed by Cigna’s withdrawal from the integration planning. 

For example, Paul told the Cadwalader team,

We understood from McKinsey that Cigna has not been providing PMPM 

numbers to move along IT G&A integration planning. We heard similar 

concerns from the G&A team about the information required from Cigna to 

help determine whether the additional $452 million is variable cost savings 

or revenue opportunity or a combination of both. As you have known since 

last February, our advocacy work at the agency is dependent upon 

McKinsey’s ability to review information from our clients to prepare the 

analysis upon which our economists can rely. Integration planning has been 

slowed or stopped as a result of Cigna’s refusal to provide information 

critical to integration planning and synergies analyses.172

Cadwalader did not provide the detailed information that White & Case sought. See Paul 

Tr. 622–23, 626–28.

Anthem and Cigna jointly submitted a white paper on medical cost savings that 

projected efficiencies of $2.35 billion, which NewCo would achieve by providing “best-

 

170 See JX 1761; JX 1768; JX 1781; JX 1797; JX 1838.

171 See JX 1780; JX 1789; JX 1850; see also Jones Tr. 2645 (“So essentially what 

was happening is you were trying to get alignment on key issues through white papers.”).

172 JX 1697 at ’193 (requesting information about IT G&A integration planning); 

see JX 1694 at ’162 (requesting information on value-based reimbursement for white 

papers); JX 1716 at ’226 (noting that “information still [is] needed from Cigna” for the 

medical and network synergies white paper); JX 1747 at ’932–33 (following up on request 

for information on $452 million in savings and on IT efficiencies and synergies; noting 

understanding that “additional work by the parties has not been done”); JX 1780 at ’782 

(noting that some information for white papers was hedged “due in part to a pause on value 

capture work”)
93

in-breed” discounts. JX 1953 at ’246, ’249–50. This approach meant that if Anthem had a 

better discount with a particular provider, then the efficiency calculation assumed that 

NewCo would benefit from Anthem’s discount. If Cigna had a better discount with a 

particular provider, then the efficiency calculation assumed that NewCo would benefit 

from Cigna’s discount. Anthem’s economist, Dr. Mark Israel, and his team from Compass 

Lexecon used claims data to calculate the value of the resulting efficiencies.173

Because of the structure of the healthcare industry, the vast bulk of these savings 

would be passed through automatically to NewCo’s customers. The white paper projected 

that after closing, approximately 75% of NewCo’s members would be covered by 

administrative-services-only (“ASO”) plans, a product in which a customer (i.e., an 

employer) pays for claims processing and access to the insurer’s provider network, but selfinsures for the medical bills of plan participants. JX 1953 at ’257. Because those clients 

self-insure for provider costs, they receive a dollar-for-dollar reduction from lower 

provider rates. Zielinski Tr. 80. The white paper projected that savings of $1.8 billion 

would go to ASO customers. JX 1953 at ’250. The remaining NewCo customers would be 

covered by fully-insured plans, a product in which the health insurer also pays the medical 

bills of plan participants. Those customers would receive some benefit at the time of recontracting as a result of the Affordable Care Act, under which insurers must spend at least 

80–85% of every premium dollar on medical care. JX 1953 at ’258–59. The white paper 

 

173 See JX 1573 at ’877; Zielinski Tr. 78–80.
94

projected that savings of $595 million would inure to the benefit of fully-insured 

customers.174

During the May 2016 meeting of the Steering Committee, Zielinski complained 

about Cigna’s contributions to the regulatory approval process. Cadwalader sent an email 

to White & Case that abandoned any pretense of collaboration. See JX 1889 at ’025–26. 

After White & Case responded with a detailed and comparatively measured response, 

Cadwalader became even more shrill and vituperative, writing, “There are numerous false, 

baseless, and misleading statements and insinuations in your e-mail. Your email has so 

many inconsistencies with the factual record that we may or may not spend the time to 

respond with a point-by-point rebuttal.” Id. at ’021.

3. Internal Integration Planning At Anthem

While the white papers were being prepared, Anthem worked internally on 

NewCo’s go-to-market strategies, how NewCo would generate efficiencies from the 

Merger, and what growth opportunities NewCo would have over the longer term. Those 

strategies also had to take into account how NewCo would achieve compliance with the 

2/3 Rule. See JX 1573 at ’850.

Anthem was committed to keeping the Cigna brand as an option for all customers 

in all situations. At the same time, NewCo needed to comply with the 2/3 Rule, which 

 

174 JX 1953 at ’250. Other estimates varied, but generally were in line with these 

figures. See JX 1684 at ’824 & slides 5, 10–13; JX 1703 at ’759 & slide 3.
95

could be accomplished most efficiently by rebranding Cigna revenue generated by 

employers with their headquarters in the Anthem Blue States. See JX 1573 at ’859.

The optimal rebranding strategy was for NewCo to offer Blue-branded products that 

incorporated desirable features from Cigna’s plans, but at better rates than Cigna could 

achieve on its own. See id. By February 2016, the commercial go-to-market team had 

identified two lines of hybrid products that NewCo could develop.175 The first category of 

offerings would target employers who provided employees with health insurance because 

they felt compelled to do so. NewCo would address the “compelled” segment with an 

offering called “Essentials,” which would combine a lower-priced offering closer to 

Anthem’s existing products with cost-management features drawn from Cigna’s products. 

The second category of offerings would target employers who were more engaged in the 

health insurance market. NewCo would address the “engaged” segment with an offering 

called “Signature,” which would combine a multi-feature offering closer to Cigna’s 

existing products but at a lower price than Cigna could achieve on its own.176

The difficulty lay in the timeline for implementing those products. One major 

impediment was the need for an IT system that could both support the new-product features 

and comply with the Blues Rules. Anthem and Cigna each had incumbent IT systems that 

 

175 See JX 1173 at ’158 (describing (i) “evolution of the Anthem group/national 

account model to NewCo ‘essentials’” and (ii) “evolution of the Cigna group/national 

account model to NewCo ‘signature/enhanced’”); JX 1241 at ’798 & slide 47; JX 1345 at 

’743 & slide 2; DeRosa Tr. 1697–98.

176 See JX 1577 at ’013; JX 1766 at ’069–72.
96

supported their businesses. Cigna’s system supported the additional features that a hybrid 

product might incorporate, but it did not comply with the Blues Rules. Modifying Cigna’s 

system to comply with the Blues Rules required a major overhaul that would take more 

than two years.177 Anthem’s platform complied with the Blues Rules, but it would need to 

be modified to support a blended offering.178 These upgrades could be rolled out over time, 

but the first features would not be in place until the second year after closing.179

Because of this timeline, the possibility of creating new products was not a source 

of near-term, quantifiable merger-related efficiencies. It rather was a means for NewCo to 

create additional value “in the medium/long term” by expanding into new geographies and 

new market segments.180 Anthem favored using its IT system, and therefore did not 

anticipate being able to begin offering blended products until the second year after closing. 

It was only then that NewCo would begin offering versions of the Essentials and Signature 

 

177 See JX 1573 at ’871–73; DeRosa Tr. 1707, 1709, 1713.

178 See DeRosa Tr. 1708; JX 1573 at ’872, ’901.

179 See JX 1573 at ’903–04; JX 1766 at ’079; DeRosa Tr. 1708–09, 1711–12; 

DeRosa Dep. 307; see also JX 1573 at ’872 (“Implementation of Cigna ‘secret sauce’ may 

take time (TBD).”). Exacerbating the timing problem, most of Cigna’s commercial 

accounts were committed to multi-year contracts, with a portion renewing in the first 

quarter of each calendar year. See JX 1573 at ’892–93, ’907; JX 4006. During the six to 

nine months (or longer) leading up to the renewal, the sales force would seek to negotiate 

a new contract with the customer. Anthem determined that NewCo would need to have the 

necessary capabilities in place “in time for Q1 2018 sales cycle at the latest” in order to 

sell a blended product that would comply with the 2/3 Rule by a 2019 deadline. JX 1573 

at ’892; see Manders Tr. 2538–39 (describing sales cycle). The difficulty posed by meeting 

that deadline meant that blended products would be a longer-term initiative.

180 See JX 1577 at ’007; JX 1792 at ’797.
97

products and generating incremental revenue.181 Anthem anticipated developing a go-tomarket strategy for the new products after closing. Zielinski Tr. 129.

Rather than relying on new products, Anthem planned to generate efficiencies 

through “best-of-breed” discounts, which meant that NewCo would take advantage of 

whichever company’s discounts were better. If Anthem received better discounts from a 

particular provider, then NewCo would plan to use Anthem’ discounts. If Cigna had 

obtained better discounts, NewCo would plan to use Cigna’s. 

Because Anthem generally had better discounts, the bulk of the efficiencies would 

be achieved by enabling Cigna’s customers to take advantage of Anthem’s discounts. There 

were three main ways to achieve that outcome. The first was for Anthem to exercise the 

“affiliate clauses” in its contracts with providers. As the name implied, these clauses 

empowered Anthem to extend its rates to its affiliates, and after the Merger, Anthem could 

designate Cigna as an affiliate for purposes of the clause.182 The second option was not to 

trigger the affiliate clauses and instead to re-contract with providers to secure lower rates 

based on NewCo’s increased volume, either when the providers’ existing contracts expired 

 

181 See JX 1577 at ’008, ’014–17; JX 1766 at ’073. Anthem anticipated that the new 

products would achieve incremental reductions in medical costs. Anthem expected to pass 

on 80% of those savings to its customers and to capture 20% by increasing its premiums. 

See JX 1577 at ’036.

182 See JX 1684 at ’824 & slides 2, 18; JX 1727 at ’646 & slide 3; Zielinski Tr. 130–

31; Drozdowski Tr. 952.
98

or by terminating the existing contracts and forcing a renegotiation.183 A third option was 

to mix and match the techniques by provider type, geography, or for specific providers.184

Triggering the affiliate clauses across the board would generate the most value for 

NewCo’s customers as quickly as possible. Anthem believed that it was what providers 

expected, and it would demonstrate the value of the combination to Cigna’s customers. The 

main downside was that it would “make it more difficult to convert Cigna customers to 

Blue.” JX 1727 at ’646 & slide 2. Once the affiliate clauses were exercised, then Anthem’s 

products would no longer have a cost advantage over Cigna’s products, making it less 

likely that customers would move to Blue-branded products absent other incentives.185

In late April 2016, the Anthem ELT unanimously decided not to trigger the affiliate 

clauses.186 Instead, the Anthem ELT decided to continue to sell Anthem’s products and 

Cigna’s products separately, with the expectation that Cigna’s customers in the Anthem 

Blue States would move to Anthem products. See JX 1788. 

 

183 JX 1727 at ’646 & slide 5; see JX 1684 at ’824 & slides 2, 5, 19; JX 1705; 

Drozdowski Tr. 952.

184 See JX 1684 at ’824 & slide 2; JX 1727 at ’646 & slide 7; JX 1766 at ’063;

Zielinski Tr. 130–31; Drozdowski Tr. 952.

185 See id.; JX 1684 at ’824 & slide 15; Zielinski Tr. 130–31; Drozdowski Tr. 973–

75, 1040.

186 See JX 1788; see also JX 1705; JX 1727; JX 1783; JX 1818; JX 1823 at ’304; 

JX 2096. Anthem kept open the possibility that the affiliate clauses might be exercised on 

a case-by-case basis, but needed input from Cigna to make those determinations. With 

Cigna having withdrawn from integration planning, no detailed work was done to 

determine when or where that might happen. See Drozdowski Tr. 976–77, 1046–47, 1051.
99

Despite having made this decision, Anthem stated in the white paper on medical 

cost synergies, submitted to the DOJ on May 25, 2016, that Anthem could achieve medical 

cost savings for Cigna’s customers after the merger by exercising the affiliate clauses. See 

JX 1948 at ’307–08. Anthem told its counsel that no final decision had been made on 

whether to invoke the affiliate clauses. Rosen Tr. 865.

Throughout the DOJ’s investigation and the Antitrust Litigation, Anthem did not 

reveal that it had made that decision. During a deposition that he gave to the DOJ on June 

13, 2016, Matheis de-emphasized triggering the affiliate clauses as a means of achieving 

the efficiencies, pointing instead to renegotiating provider contracts and shifting Cigna 

members to Anthem products, but he did not say that Anthem had already made a decision 

not to invoke the affiliate clauses. See JX 2029 at 277–79. Matheis testified at trial that 

Anthem could exercise the affiliate clauses. See Dist. Ct. Op., 236 F. Supp. 3d at 233. 

Another Anthem witness testified that Anthem’s “current intention [was] to proceed with 

a hybrid approach” that included triggering the affiliate clauses for some providers. Id. 

Anthem’s position in the Antitrust Litigation on the potential use of the affiliate 

clauses was technically correct because Anthem could have revisited the decision not to 

exercise the clauses broadly, but Anthem should have been more candid about its plans. 

The issue, however, did not affect the outcome of the Antitrust Litigation. Both the District 

Court and the DC Circuit Court correctly concluded that Anthem would not exercise the 
100

affiliate clauses, noting that doing so would undermine the incentive for Cigna’s customers 

to switch to Anthem products, which was important for complying with the 2/3 Rule.187

4. Teneo Leaks The Dispute Letters To The Wall Street Journal.

Beginning in late March 2016, Cigna worried that Anthem might leak information 

to the press about the dispute over Cordani’s role and Cigna’s withdrawal from integration 

planning. To be ready, Teneo developed a “leak strategy.”

188 By early May, the strategy 

called for Cigna to issue an anodyne public statement while Teneo would give reporters 

different messages, such as:

 “It remains unclear that Anthem is properly managing the processes necessary to 

bring the deal to completion.” JX 1860 at ’114.

 “Many of the core regulatory work streams have fallen behind schedule . . . .” Id.

 “The transaction leverages Cigna’s unique and robust capabilities.” Id.

 “In the event the merger does not obtain regulatory approval, we are well positioned 

for standalone success,” citing a “[w]ell-balanced diversified business model,”

“[s]ubstantial ‘dry powder’ of $6-8 billion,” and “M&A possibilities and market 

leading revenue, earnings, and capital efficiency.” Id.

Through these and other messages, Teneo would criticize the Merger and praise Cigna’s 

capabilities as a standalone company.

In early May 2016, a reporter from the Wall Street Journal was speaking with one 

of Cigna’s lawyers about another transaction, when the reporter mentioned that “she was 

talking to Anthem and they were complaining about Cigna dragging its feet.” JX 1778. The 

 

187 See id. at 240–41; Cir. Ct. Op., 855 F.3d at 359–60.

188 See JX 1652; JX 1860.
101

reporter also indicated that “she heard some chatter about the David/Joe relationship not 

being good and asked [the lawyer] to comment.” Id. Stephen Cohen of Teneo followed up 

with the Wall Street Journal. By May 12, the reporter was saying that she had heard about 

a letter Cigna sent “in early April with a list of complaints.” JX 1848. She seemed to know 

Anthem’s side of the story, including that one of Cigna’s issues was “nonsensical” and that 

Anthem was being “aggressive” because Cigna was “dragging [its] feet.” Id.

The Cigna team believed that Anthem had been speaking with the Wall Street 

Journal.

189 Cohen sent the dispute letters that the parties had exchanged to the reporter.190

Around May 20, 2016, the Wall Street Journal told Anthem and Cigna that it had 

the letters and would be running a story.191 After receiving this outreach, Anthem’s public 

relations advisor spoke with the Wall Street Journal in an effort to make the story more 

favorable to Anthem.192

 

189 See Cohen Tr. 2346, 2351; Jones Tr. 2677.

190 Cohen Tr. 2374. Jones was the source of the letters, but she and Cohen structured 

the leak so that they could plausibly deny the existence of any direct exchange. Jones 

testified that she did “not specifically” authorize Teneo to leak the letters. Jones Tr. 2677. 

She also denied knowing specifically that Teneo had leaked the letters until this litigation. 

Jones Tr. 2737. Based on the contemporaneous documents, it is difficult to credit Jones’s 

denials as anything other than the product of willful blindness. See JX 1529; JX 1620; 

JX 1763; JX 1771; JX 1810; JX 1840; JX 1897; Jones Tr. 2738–39 (agreeing that she knew 

that Cigna had sent the dispute letters to Teneo and that she participated in a call with 

Teneo about an upcoming story concerning the dispute letters, yet supposedly did not know 

that Teneo had leaked the dispute letters). She clearly provided the letters to one of Cohen’s 

colleagues, who passed them along to Cohen. See JX 1529; JX 1620; Cohen Tr. 2375–77, 

2379–80. Cohen understood what he was supposed to do.

191 See JX 1903; JX 1905; Zielinski Tr. 376.

192 See JX 1919; JX 4073; JX 4074; JX 4091; JX 4307; JX 4368; Zielinski Tr. 376.
102

In response to the Wall Street Journal inquiry, Zielinski asked Jones whether Cigna 

would issue a joint statement with Anthem. JX 1907. The draft statement read,

Anthem’s acquisition of Cigna remains on track to close in the second half 

of 2016 and all required steps to seek and obtain regulatory approval have 

been completed in a timely manner. The transaction has already achieved key 

milestones, including shareholder approvals and regulatory clearance in 11 

states. . . . The parties are fully committed to closing and integrating this 

transformative transaction . . . .

JX 1906. Cigna refused. Jones told Anthem that Cigna would simply say “no comment” in 

response to the story. JX 1909. She also told Anthem that “any representation that Cigna 

believes the transaction is on track for a closing this year or that the parties are working 

cooperatively together would be misleading at best and we would be compelled to issue a 

clarification.” Id. When Zielinski asked Jones to draft a joint statement that Cigna would 

support, she again refused. From that point on, Cigna declined to issue any joint statements 

with Anthem.193 Although Jones’s representation that Cigna itself would say “no 

comment” was technically accurate, she knew that Cohen was speaking on background 

with reporters to convey anti-Merger messages and the strength of “Sovereign Cigna.” See

JX 2877.

 

193 See JX 2032; JX 2054; JX 2159 at ’358; JX 2292; JX 2296; JX 2306; JX 2420; 

see also JX 2055 (editing draft press releases so that none were joint; removing all positive 

language in press releases anticipating DOJ approval of the Merger; striking all negative 

language from press releases anticipating negative DOJ action toward the Merger); 

JX 2095 (Cigna Vice President of Corporate Communications expressing disbelief that “if 

the deal is approved, and Anthem is our new boss, we won’t issue a joint statement saying 

we are pleased?”).
103

During his exchanges with Jones, Zielinski expressed Anthem’s belief that “either 

Cigna or a Cigna representative contacted the WSJ and provided the confidential letters.”

JX 1907. He asked Jones to “immediately investigate to determine who leaked these 

confidential and privileged communications.” Id. 

Jones had sent the dispute letters to Teneo herself,194 but she pretended to conduct 

an internal investigation into the leak.195 She tasked John Bogan, Cigna’s head of litigation, 

with conducting the investigation. Bogan collected and reviewed emails from Cigna 

executives who might have leaked the letters, but Bogan did not know that Teneo existed,

and Jones did not mention that she had sent the letters to Teneo. She also did not tell Bogan 

about Wachtell Lipton.196 As Jones admitted at trial, she had material information, central 

to Bogan’s investigation, and kept it to herself.197

 

194 See Cohen Tr. 2374–80; Jones Tr. 2740. In her response to Zielinski, she did not 

deny Cigna’s involvement. She instead took “issue with the implication that Cigna has 

done anything improper with respect to the correspondence or otherwise.” JX 1909 at ’224.

195 Jones Tr. 2677–78, 2740; Jones Dep. 485.

196 See Jones Tr. 2741–43; Jones Dep. 1658–67.

197 Jones Tr. 2743. During this litigation, Anthem served interrogatories asking 

whether Cigna or one of its advisors provided information to the Wall Street Journal or 

New York Post. See JX 3172 at 15. Despite knowing about Teneo’s communications with 

the Wall Street Journal and the New York Post, Jones verified the accuracy of a response 

that did not mention Teneo. See id. at 15–16; Jones Tr. 2883–84, 2889–90. Anthem then 

served follow up interrogatories asking specifically about the stories published on May 23, 

2016. Jones knew that Teneo had provided information to the Wall Street Journal, yet 

verified interrogatory responses which only stated generally that “Teneo and Brunswick 

had regular interactions with the press, including representatives of the Wall Street Journal, 

during the pendency of the Merger Agreement.” See JX 3026 at 31–32. Anthem followed 

up again, and Jones verified a third set of interrogatory responses in which Cigna claimed 

that “it [was] not aware of any Cigna Advisors providing or otherwise facilitating the 
104

On May 22, 2016, the Wall Street Journal ran a story titled, “Anthem, Cigna 

Privately Bicker as They Seek Merger Approval.” JX 1914. The next day, the Wall Street 

Journal ran a follow-up story titled “What Anthem and Cigna Are Fighting About” and 

released a podcast titled “Anthem and Cigna’s Disagreeable Merger Agreement.” JX 1935. 

Other media outlets picked up the story. They all projected that it would be difficult for the 

parties to secure regulatory approval.198

Investors contacted Cigna and questioned why the companies had not put out a joint 

statement.199 In a positioning document, Teneo recommended capitalizing on the leak to 

 

transfer of any information or documents to the Wall Street Journal . . . .” JX 3040 at 8–

11. After Anthem impeached Jones with the interrogatory responses that she verified, 

Cigna claimed that its responses were accurate because it had lodged a general objection 

to the definition of Cigna as “vague and overbroad” on the ground that it included “agents 

or representatives.” Dkt. 669 at 3 (internal quotation marks omitted). Cigna’s general 

objection was not sufficiently specific to put Anthem on notice that Cigna was relying on 

it to withhold material information. Cigna’s responses were materially misleading and 

incomplete.

198 See JX 1920 (“Anthem, Cigna merger squabbles could delay antitrust approval”); 

JX 1923 (“Anthem, Cigna Shares Fall After Reports of Infighting”); JX 1927 (“Health 

Insurer Deals Face Market Review That Felled Past Tie-Ups”); JX 1939 (“Anthem-Cigna 

May Not Get to the Altar”); JX 1951 (“Amid Doubts, Anthem-Cigna Deal Near Halfway 

Home”).

199 See JX 1928; JX 1929; JX 1933. After seeing the story, Cigna’s advisors at Bain 

and Deloitte inferred that Cigna had leaked the letters. See JX 1916 (Bain representative, 

“They must be leaking this sh*t. Yikes.”); JX 3002 (Deloitte representative, “From the start 

Cordani was working to secure his longer term role (only 50) and rather publicly lobbying 

for his parochial interests. There is now more bitterness than before and Cordani has no 

lock on succession and will be without board control. This is either real brinksmanship to 

secure his position (something I have seen before in other consolidation discussions he was 

engaged in) or an effort to derail and get the penalty cash so he can make another target 

run.”). 
105

reaffirm “the strength of our standalone position.”

200 Moelis prepared a set of “Escalation 

Strategies” for the Cigna ELT to consider, including “covert approaches” to analysts, 

investors, proxy firms, the media, and customers. JX 1991 at ’904, ’907–08. Internally, 

Cigna prepared a messaging document explaining why it would be entitled to the Reverse 

Termination Fee if the Merger did not close.201

Meanwhile, the DOJ had started taking depositions.202 During Cordani’s deposition, 

the DOJ asked whether there were dispute letters between the parties in addition to the ones 

that the Wall Street Journal had discussed. Cordani had to say that there were. JX 1842 at

217. Just before the Swedish deposition, Cigna provided the DOJ with the letters that Cigna 

sent to Anthem on April 9 and April 29. Cigna notified Anthem, but timed the notice so 

that Anthem could neither respond effectively nor prepare Swedish.203 The DOJ questioned 

Swedish about the letters during his deposition. See JX 1863 at 348–89. 

5. Cigna Attempts To Re-Engage On Integration Planning.

In mid-May 2016, Cordani told Swedish that Cigna wanted to work on NewCo’s 

go-to-market strategy. See JX 1856. Cordani indicated that Cigna had been working with 

 

200 JX 1942 at ’269. Teneo contemplated putting Cigna’s “CEO and CFO in front 

of investors and analysts” by having them attend “investor conferences” and conduct a 

“[r]oadshow . . . to meet with top shareholders and key sell-side analysts.” Id. Teneo sent 

the plan to Cordani by routing through Wachtell “for privilege purposes.” JX 1956; see 

JX 1958. Teneo subsequently prepared a “David Cordani Positioning Campaign.” 

JX 1984.

201 See JX 1992; JX 1994; JX 1997.

202 See JX 1749; JX 1784; JX 1842; JX 1863; JX 1973; JX 2029.

203 See JX 1855; JX 1862.
106

Bain on the issue. See JX 1858. Cordani was consulting simultaneously with Bain about 

Cigna’s strategic alternatives as a “sovereign” company, including deals in which Cigna 

would be the acquirer.204

The go-to-market strategy was one of the areas on which Cigna had stopped work 

in February 2016. Because the go-to-market strategy was critical for NewCo’s success and 

for achieving regulatory approval, Anthem’s Phase 2B team had continued to work on it. 

Now, four months after stopping go-to-market-strategy work and one month before the 

DOJ was slated to make a decision on the Merger, Cigna wanted to rejoin the discussions.

Later in May 2016, Cigna indicated that it wanted to resume work on value capture 

and to explore the implications of the affiliate clauses.205 Because Cigna had stopped all of 

its work on these subjects, Cigna’s integration team leaders scrambled to re-start the 

effort.206

 

204 See JX 1870; JX 1884; JX 1957; JX 1965.

205 See JX 1901; Zielinski Tr. 351.

206 See JX 1926; JX 1930; JX 1934; JX 1937.
107

6. “Bias-to-Blue” As A Go-To-Market Strategy

At a meeting of the Steering Committee on June 9, 2016, the commercial integration 

team presented a go-to-market strategy for the first 180 days after closing.207 The strategy 

was developed by a team comprised of Anthem and Cigna associates.208

Recognizing that Anthem and Cigna competed for commercial accounts, the plan 

contemplated an “Air Traffic Control Playbook” to determine which company would bid 

which accounts. JX 2006 at ’228. The go-to-market strategy for the first 180 days 

distinguished between (i) renewals of existing business and new business and (ii) clients 

headquartered in the fourteen Anthem Blue States and clients headquartered in the thirtysix other states where Cigna operated (the “Cigna Green States”). 

For an existing client in a Cigna Green State that sought to renew its business, 

NewCo only would quote a Cigna product. For an existing client in an Anthem Blue State, 

NewCo would determine whether the client wanted to renew its existing plan or whether it 

was putting the business out to bid. If the client wanted to renew its existing plan, then only 

the incumbent provider (Anthem or Cigna, as applicable) would quote the business. If the 

client was putting the business out to bid, then both Cigna and Anthem would submit 

quotes. See id. at ’239.

 

207 See JX 2006; JX 2016.

208 See JX 1219; Zielinski Tr. 101–02; DeRosa Tr. 1719–21, 1725, 1742–43; 

Manders Tr. 2537.
108

For new clients, different rules applied. In a Cigna Green State, only Cigna would 

quote the business, unless (i) the customer requested a quote from Anthem and (ii) there 

was a strategic advantage to ceding the business to Anthem. Under this framework, Cigna 

generally would provide the quote. See id.

For new clients in the Anthem Blue States, NewCo would pursue a strategy called 

“Bias to Blue.” Under this strategy, if the broker for the new client expressed a preference 

for Anthem, then only Anthem would provide a quote. If the broker for the new client 

expressed no preference as to brand, then both Anthem and Cigna would provide quotes. 

If the broker for the new client expressed a preference for Cigna, then both Cigna and 

Anthem would provide quotes. See id.

The “Bias to Blue” strategy thus (i) only applied during the first 180 days after 

closing, (ii) only applied in the Anthem Blue States, (iii) only applied to new clients, and 

(iv) only contemplated that new clients that expressed a preference for Cigna (or no 

preference) would receive quotes from both Cigna and Anthem, but then could choose 

between them.209 In other words, the “Bias to Blue” strategy offered “the Blue choice to 

the Cigna customers.” DeRosa Tr. 1743. It did not force customers to go Blue.

Cigna had known from the start that NewCo would need to move Cigna customers 

in the Anthem Blue States to Blues-branded plans to comply with the 2/3 Rule. In 2014, 

when Cigna approached Anthem about a transaction that would have resulted in the Cigna 

ELT managing the combined company, the Cigna ELT told the Cigna Board that NewCo 

 

209 See generally Zielinski Tr. 106–113; Hocevar Tr. 2337–39.
109

would need to comply with the Blues Rules, but that compliance could be achieved by 

having “[Cigna] business in Blue licensed territories . . . substantially migrate to Blue 

business, resulting in compliance with the [2/3 Rule] at or shortly after closing.” JX 105 at 

’751. The Cigna ELT also told the Cigna Board that “[i]f compliance would not be attained, 

[Cigna] business in non-Blue licensed territories may have to be divested.” Id. Before the 

relationship between Anthem and Cigna fractured, Cigna ELT did not see a problem with 

either option.

During the June 2016 meeting of the Steering Committee, however, Cordani and 

the Cigna ELT reacted vehemently to the Bias-to-Blue strategy and categorically opposed 

Cigna business in the Anthem Blue States moving to Anthem.210 Cordani claimed that “if 

the Department of Justice saw this strategy, they’d kill us . . . because it’s not prochoice.”

211 Matheis and Zielinski defended the Bias-to-Blue strategy as a reasonable first 

step to achieving compliance with the 2/3 Rule.212

 

210 See Zielinski Tr. 104; Cordani Tr. 1828–29; Manders Tr. 2538–39, 2548–49. 

After the June 2016 meeting, Cigna began portraying the Bias-to-Blue strategy as involving 

“forced migrations.” JX 2018; see JX 2010 at ’685; JX 2012 at ’357; Cordani Tr. 2082–84 

(asserting that “Bias to Blue” involved forced migrations). That was not accurate. 

211 Cordani Tr. 1828; accord id. at 2089.

212 See DeRosa Tr. 1727–28; Zielinski Tr. 104–05. Matthew Manders, Cigna’s 

business lead on the committee, also objected, but his concern was not with the Bias-toBlue strategy for the first 180 days. He was concerned with what NewCo would do after 

the first six months. Manders Tr. 2535–38. Manders’ testimony demonstrated that there 

was a considerable amount of planning that needed to be done over longer-term horizons 

and that by June 2016, very little headway had been made on those issues. See Manders 

Tr. 2538–39, 2551–52, 2558. That complaint was ironic, because it was Cigna’s decision 

to limit integration planning to Day 1 activities that prevented the integration teams from 

making progress on that work. See JX 2238 at ’859 (July 2016 Steering Committee 
110

After the discussion, Cordani asked Swedish to rework the strategy.213 Swedish 

agreed.214 During the same meeting, Anthem informed Cigna that Anthem would not 

exercise the affiliate clauses to give Cigna members access to Anthem’s rates.215

J. The DOJ Opposes The Merger.

In June 2016, the parties had a series of meetings with the antitrust division. The 

initial meetings were with the division staff (the “Staff”). The later meetings were with the 

“front office,” which consisted of the principal decision-makers for the antitrust division 

(the “Front Office”).

1. The June 10 Meeting With The Staff

On June 10, 2016, the parties met with the Staff to hear its views on the Merger. 

The Staff reported that “the Division has very serious concerns.” JX 2024 at ’958.

The Staff’s pervasive concern was the “maverick” theory that the parties had 

anticipated before entering into the Merger Agreement. The Staff described Cigna as 

an innovative company that is disrupting Anthem’s business model. . . . 

Anthem has the perception of being dominant in their states and getting by 

 

presentation noting that for post-180-day strategy, “[a]dditional data is required to move 

forward on our goal of combining the best capabilities of both companies to create more 

choice and value for the marketplace”).

213 JX 2100; Zielinski Tr. 116; Cordani Tr. 1830.

214 Zielinski Tr. 113–14; Manders Tr. 2545–46, 2568. Cordani and Jones testified 

that when discussing the Bias-to-Blue strategy during the June 2016 meeting, Matheis was 

red in the face, pounded the table, and yelled. Cordani Tr. 2080; Jones Tr. 2651, 2721. 

None of the other attendees, including two members of the Cigna ELT, agreed with their 

account. See Zielinski Tr. 105; Swedish Tr. 1127; Manders Tr. 2565; McCarthy Dep. 588–

589. The testimony that Cordani and Jones gave on this point was not credible. 

215 Cordani Tr. 1826; see JX 2022 at ’460–61.
111

largely on their provider discount advantage. . . . Anthem is perceived as 

being slow to innovate and has a reputation for being difficult in the industry 

in terms of provider relations and customer service. By contrast, . . . Cigna 

has found a way to differentiate itself based on new products, high-quality 

customer service, excellent wellness programs, and leading provider 

collaborative efforts.

Id. The Staff expressed concern that the Merger would “remove that pressure and the 

benefits and innovation that Cigna has brought to the marketplace.” Id.

The Staff next discussed for specific areas where they had concerns.

 National Accounts. The Staff “viewed the transaction as a ‘4 to 3’ in the National 

Accounts market and because of that, the merger was presumptively unlawful.” Id. 

The Staff “also suggested that the efficiencies touted by the parties are insufficient 

to outweigh their concerns.” Id.

 Local markets for commercial health insurance sold to large group employers.

The Staff “had concerns in at least 35 local areas” and indicated that “the transaction 

would be presumptively anticompetitive in these areas . . . .” Id. at ’958–59.

 Local markets for the purchase of healthcare services. The Staff was concerned 

that the Merger would “lower provider payments in a way that [would] reduce the 

quality and output of medical care” because NewCo would be “so large it [could] 

force providers to accept unprofitable [prices], which in turn [would] reduce the 

quality and output of medical care.” Id. at ’959. The Staff viewed this theory as 

“undercut[ting] the parties’ arguments that the medical cost savings that would 

result from the merger [would] benefit consumers.” Id.

 Local individual public exchange markets. The Staff cited “concerns in the 

individual public exchanges in St. Louis, Denver, and Boulder.” Id. Although 

recognizing that Cigna was generally not a significant player in the public 

exchanges, the Staff believed that Cigna could grow to become a competitor in the 

future. Id.

During the meeting, “not a lot of time at the meeting was spent on Blues issues,” although 

the Staff raised “Blues-related concerns . . . at various times.” Id. For example, the DOJ 

mentioned that the 2/3 Rule could “constrain Cigna’s growth post-closing” and might give 
112

Cigna “a reduced incentive or ability to compete as aggressively against (and an increased 

incentive to collaborate with) other blues.” Id.

The Staff expressed skepticism that the Merger could be fixed, but they also said 

they were open to a remedial proposal. As part of any proposal, the DOJ wanted to know

(1) what the parties propose[d] to divest; (2) who the potential buyers are; 

(3) whether the parties have discussed the divestitures with any buyers and 

the status of those discussions; and (4) why the remedy will not harm 

competition in the short or long term, (i.e., why the divestees [sic] would 

immediately restore the competitive status quo).

Id. One of Anthem’s economists from Compass Lexecon described the Staff’s reaction 

bluntly: “They hate the merger.”

216

2. The Remediation Effort

After the meeting with the Staff, Anthem and Cigna discussed a potential 

remediation plan. See JX 2030. In May 2016, Anthem had sent a proposed framework for 

a divestiture remedy to Cigna.217 McCarthy, Cigna’s CFO, had reviewed it and commented, 

“This looks like a reasonable approach to me.” JX 1963 at ’950. Jones was likewise “ok 

with the approach as a starting point.” Id. at ’949. When Cordani saw it, he rejected it out 

of hand as “uninformed and theoretical.” Id. Cordani and Jones then spoke with Wachtell 

Lipton. See JX 1963. Cigna did nothing with the framework.218

 

216 JX 2053; accord Rosen Tr. 884.

217 JX 1963; JX 4141; see JX 1793; JX 1904; Jones Tr. 2911–12.

218 See Jones Tr. 2930–32; Rule Tr. 3140–41. At trial, Cordani testified that he 

instructed his team to support Anthem’s divestiture efforts. Cordani Tr. 1832. The record 

evidence did not support that testimony. 
113

With the Staff having identified its areas of concern, Anthem began work on a 

divestiture plan that focused on the thirty-five regional markets that the Staff had identified. 

Anthem reached out initially to other Blues members as potential buyers, hoping “to keep 

the business ‘Blue.’”

219 Anthem also contacted Centene Corporation. JX 2031. Although 

Cigna has denigrated Centene as a possible buyer in this litigation, Cigna’s antitrust 

counsel had identified Centene as a candidate, describing Centene as “[a] large company 

that, in addition to its substantial government [healthcare] presence, is a notable regional 

commercial player (especially in certain western states) with the resources to grow.”

220

Anthem asked Cigna to help by identifying other potential buyers. JX 2062. Rather 

than cooperating, Jones sent a lengthy email to Zielinski in which she attacked how Anthem 

had handled the regulatory process. JX 2074. Beginning a narrative that Cigna would repeat 

many times, she claimed that Anthem had not done anything to prepare for a divestiture, 

and she accused Anthem of “either misrepresenting the situation or significantly 

underestimating the task at hand while being unwilling to take any suggestions from 

[Cigna].” Id. She then asserted that “Cigna does not have the responsibility or the 

 

219 JX 2070 at ’602; see JX 2046; JX 2070; JX 2104. Having a fellow Blues buyer 

could have set the stage for the buyer to cede part of its Blues business to Anthem after 

closing to help comply with the 2/3 Rule. JX 2104.

220 JX 567 at ’571; see Zielinski Tr. 494 (describing Centene as a primarily regional 

carrier with a few national accounts).
114

information required to set up the strategy on divestitures” and therefore would not attempt 

to identify qualified buyers.221

Anthem entered into a nondisclosure agreement (“NDA”) with three potential 

buyers: Centene, HCSC, and Independence. PTO ¶ 169. Cigna entered into an NDA with 

Centene, but then provided only a one-page spreadsheet that listed the number of lives in 

the thirty-five areas and high-level revenue figures.222 Before providing any additional data 

to Centene, Cigna insisted on a second, non-market NDA, which included broad standstill 

provisions.223 Cigna refused to enter into an NDA with or provide due diligence to the two 

Blues buyers unless the DOJ indicated that a Blues buyer was a viable option.224

Without due diligence from Cigna, the three potential buyers could not evaluate the 

assets, make an offer, or advocate to the DOJ. Zielinski, Jones, and their outside counsel 

exchanged contentious emails over Cigna’s refusal to sign NDAs and provide due 

diligence.225 Zollars, a Cigna director, testified that Cigna refused to sign the NDAs 

because “things had broken down to the point” that Cigna was “concerned that the deal 

 

221 Id. Cigna did not take any steps to identify potential buyers. See Zielinski Tr. 63.

222 See JX 2068; Zielinski Tr. 56; Paul Tr. 640, 652–54, 750; Jones Tr. 2930.

223 Zielinski Tr. 56–57; Paul Tr. 653–54, 655.

224 See JX 2076; JX 2101; Zielinski Tr. 51; Jones Tr. 2659–60; Rule Tr. 3094–95.

225 See JX 2076; JX 2079; JX 2080; JX 2083; JX 2084; JX 2090; JX 2091.
115

may not go through and, if it didn’t go through, that we were putting ourselves at risk” by 

providing due diligence to potential buyers.226

In anticipation of the June 20 meeting, Anthem sent a letter to the DOJ that identified 

its proposed buyers and offered to divest all of Cigna’s assets in the thirty-five regional 

markets.227 Just before the meeting, Cigna’s counsel told Anthem’s lead regulatory 

counsel, George Paul, that “the viability of Blues as divestiture candidates must be raised”

with the DOJ and threatened, “If you don’t plan to raise it, we will.” JX 2101 at ’171. Paul 

was “stunned, angered, and a little unsure how to proceed.” Paul Tr. 643. As he saw it,

I am going in on the first time I had the chance to talk to the Department of 

Justice about, “Here is my solution to the problems you’ve raised and, by the 

way, I have the best three buyers on the planet all lined up. All are going to 

be great. And this is the best proposal you’ve ever seen. You need to sign on 

it today. And oh, by the way, are you comfortable with the Blues as a buyer, 

because there’s some question as to whether or not they would be viable or 

not.” That’s just not a good way to start off a negotiation for settlement.

Id. at 644. He viewed Cigna’s insistence on raising the issue as a failure to cooperate with 

Anthem and an effort to highlight Anthem’s membership in the Blues Association. See id.

at 642, 644, 647.

 

226 Zollars Tr. 2516. The record supports Zollars’ assertion that the Cigna ELT made 

a decision not to support the divestiture process because the relationship with Anthem had 

broken down. After the meeting with the DOJ Staff, Cigna’s regulatory counsel initially 

appeared willing to negotiate NDAs and work on a divestiture strategy. That changed after 

Cordani and Jones spoke with Wachtell Lipton about how to proceed. The meeting with 

Wachtell Lipton resulted in a decision not to support Anthem’s divestiture efforts. See 

JX 2030; JX 2079; Jones Tr. 2913–20, 2930–32.

227 PTO ¶ 167; JX 2087; Zielinski Tr. 49–50.
116

During the meeting with the Staff, Anthem presented its proposal and flagged that 

two of the buyers were Blues licensees. Anthem had asked Cigna to help argue that a Blues 

buyer was suitable, but Cigna refused. See Paul Tr. 641–42, 647–48.

The Staff did not express any view on Anthem’s proposal. See JX 2123 at ’405. Paul 

did not expect anything different. In his experience, the DOJ usually resists an initial 

divestiture proposal and raises questions, expecting that the “buyer is going to come in with 

a business plan, with financials that show that it can profitably run that business on day one 

and step into the shoes of where the [seller] was going to be.” Paul Tr. 645. Because of 

Cigna’s position on NDAs and due diligence, the proposed buyers could not do that.

3. The June 21 Meeting With The Front Office

On June 21, 2016, the parties held their first meeting with the Front Office. The top 

DOJ representative was Deputy Assistant Attorney General Sonia Pfaffenroth, who was 

the number two person in the antitrust division. Paul. Tr. 706, 728.

Like the Staff, the Front Office expressed “‘significant concerns’ with the 

transaction both at a national and local level.” JX 2123 at ’406. Like the Staff, the Front 

Office cited “the loss of 1 of 4 national competitors” and Cigna’s status as an innovator 

who was “unique in some ways,” such as value-based care. Id. at ’408. 

To a greater degree than the Staff, the Front Office expressed concern about Cigna 

“joining a Blue” and whether that would result in coordination between Cigna and the 

Blues Association. Id. at ’407. The Front Office also expressed concern that “the very 

nature of the Blues network” would curtail Cigna’s growth. Id. At this point, Zielinski 

represented that “he believed the [Blues] MDL in Alabama would settle and change the 
117

[2/3] rule.” Id. At trial, Zielinski acknowledged that the mediation had been unsuccessful 

and that he lacked any factual basis for that representation. Zielinski Tr. 44345

Anthem then presented its remediation proposal. Like the Staff, the Front Office 

was skeptical that a buyer could step into Cigna’s place. The Front Office also expressed 

skepticism that another Blues member could be a viable buyer.228

On June 24, 2016, the parties had a second meeting with the Front Office. This time, 

the top representative from the DOJ was Associate Attorney General William Baer, the 

head of the division. See Paul Tr. 728.

Anthem gave a presentation, which argued that the Merger was not anticompetitive 

and provided detail about its proposed remedy. Only Anthem representatives made the 

presentation. Cigna’s counsel did not even sit at the table with Anthem.229 When Baer asked 

about the 2/3 Rule, Zielinski again represented that it would be eliminated or modified 

through a settlement in the Blues MDL. Zielinski predicted, again without factual support, 

that a settlement could happen before the end of 2016.230 Baer pushed Zielinski to agree 

that absent a modification, NewCo would be “growth constrained.” JX 2193 at ’773. 

During the meeting, Anthem argued that the Merger would enable Anthem to build 

on Cigna’s model of integrated specialty care and wellness products. Baer asked why 

Anthem had not already created similar products, and Anthem’s counsel stated that it was 

 

228 JX 2123 at ’409; see JX 2112; Zielinski Tr. 49091.

229 See Paul Tr. 729, 762; JX 2132; JX 2193.

230 See JX 2830; JX 2193 at ’773, ’782, ’794; Zielinski Tr. 443–44.
118

not Anthem’s focus and hard to build from scratch. Zielinski also suggested that many 

industry professionals questioned whether Cigna’s wellness programs actually reduced 

costs, with many regarding the programs as a “waste of time.” Id. at ’774. 

Baer also asked about Anthem’s ability to achieve medical cost savings, suggesting 

that Cigna’s providers might not be willing to provide the more intensive services that 

Cigna’s programs contemplated at the lower rates that Anthem paid to providers. Zielinski 

told the DOJ that Anthem could trigger the affiliate clauses in its provider agreements, 

under which the providers would be obligated to offer the same rates to Cigna customers. 

That theoretically was true, but by then the Anthem ELT had decided not to exercise the 

clauses broadly. See Part II.I.3, supra. Baer maintained there was the “tension” between 

Anthem paying lower rates to Cigna’s providers and Anthem’s claim that it would improve 

collaborative relationships with those same providers. JX 2913 at ’774.

Baer expressed skepticism about a potential remedy, noting that the DOJ had never 

approved a divestiture of the scale that Anthem was proposing. Id. at ’775–76. Because of 

how the DOJ viewed the Blues, the DOJ saw a divestiture to a Blues buyer as Anthem 

selling to itself. Zielinski Tr. 477, 490–91.

At the end of the meeting, Baer asked to have a separate session with Cigna. That 

meeting took place one week later, on June 27, 2016.231

 

231 See JX 2913 at ’776; JX 2149; JX 2196.
119

Coming out of the meetings with the DOJ, Anthem and Cigna suspected that that 

the DOJ would not approve the Merger.232 Anthem also received the bad news that Centene 

was not interested in a potential purchase of Cigna’s assets.233 Centene had not received 

any due diligence from Cigna. Paul Tr. 654, 656–67. After Centene walked away, only 

Blues buyers remained as potential divestiture buyers. Anthem began to explore whether 

selling assets to a combination of buyers might be a solution. See JX 2165; JX 2177.

Over the following weeks, the parties continued to meet and correspond with the 

DOJ. Faced with the DOJ’s argument that Cigna was uniquely innovative, Anthem sought 

to convince the DOJ that although Cigna was innovative, it was not uniquely innovative. 

Anthem prepared and submitted a letter to the DOJ designed to address “the Division’s 

apparent misconception that Cigna is the only insurer providing [collaborative] services”

and explaining that “many other health insurance carriers” offer similar services.234

Anthem also submitted a letter arguing that a Blues buyer would be a good candidate for a 

 

232 Zielinski Tr. 44849; Rule Tr. 3098.

233 See JX 2163; JX 2177.

234 JX 2250 at ’671. Anthem researched Cigna’s collaborative care relationships and 

began developing an argument that Anthem’s comparable programs were similarly 

effective or even superior to Cigna’s. See JX 2138; JX 2139; JX 2148; JX 2153. As part of 

that process, Anthem located a study that characterized Cigna’s collaborative programs as 

relatively small and ineffective. See JX 2129; JX 2134. Anthem also spoke with and 

obtained a declaration from Stuart Piltch, a regional consultant for large healthcare clients 

who was skeptical of the value of Cigna’s collaborative programs. See JX 2127; Zielinski 

Tr. 453–58. Anthem’s counsel worked with Piltch to prepare a declaration explaining that 

Cigna’s collaborative care options were neither unique nor significant. See JX 2131. The 

Piltch declaration did not figure prominently in the Antitrust Litigation. It was “a tree that 

fell but wasn’t heard in the forest.” Curran Tr. 1511.
120

remediation proposal.235 And Anthem submitted a letter arguing that the Merger would 

expand individual access to health insurance. See JX 2190. Cigna objected to Anthem’s 

submissions and refused to join them.

After extensive effort, Anthem succeeded in bringing Centene back to the table.236

Anthem again asked Cigna to populate a data room so that Centene and the two Blues 

buyers could conduct due diligence. Cigna objected that Anthem was “unilaterally driving 

Cigna asset divestitures” and complained that Cigna’s assets were the “only ones on the 

block.”

237 Cigna continued to refuse to enter into customary NDAs with the two Blues 

buyers on the theory that the DOJ would never approve a sale to a Blues buyer. See 

 

235 See JX 2181; Zielinski Tr. 51–56.

236 See JX 2251; JX 2327; Paul Tr. 717.

237 JX 2219; see Zielinski Tr. 63–64 (describing Cigna’s opposition to the divestiture 

of its assets). This was obstructive. The divestiture transaction would have been 

conditioned on the Merger closing, at which point the divested assets would be NewCo’s 

assets, not Cigna’s assets. Cigna’s opposition was also inconsistent with its analysis during 

the merger discussions with Anthem, when the Cigna ELT expected to be managing 

NewCo. During that phase, the Cigna ELT clearly understood that divestitures would be 

necessary and that they would most likely involve Cigna assets. See JX 78 at ’721 (Cigna 

analysis of transaction with Anthem; “Local market depth may require divestitures”); JX 

79 (McCarthy and Gray discussing that “[r]egulatory divestitures would be best from 

Cigna”); JX 99 at ’545 (Cigna ELT memorandum on deal with Anthem noting that 

“Regulatory divestitures, if required, will tend to be [Cigna] revenue/membership in the 

[Anthem Blue States]”); see also Zielinski Tr. 63 (explaining that “even before we signed 

the Merger Agreement, we talked about that given this transaction, it was very likely that 

the government would request us to do divestitures as part of the remediation plan, [and] 

in order to address that, we would divest Cigna assets in our 14 Blue states”); Gray Tr. 

1682–83 (anticipating in September 2015, shortly after signing of Merger Agreement, that 

divestitures were manageable and likely would come from Cigna).
121

JX 2220. The DOJ had said that it had “serious concerns” about a divestiture to a Blues 

buyer, but the DOJ also was willing to speak with both buyers. JX 2222. 

On July 10, 2016, Anthem formally presented its divestiture proposal to the DOJ 

and argued that it would address any concerns about the Merger being anticompetitive. 

JX 2225. Cigna did not join the letter, which was a “red flag to the Department of Justice.”

Paul Tr. 762. Instead, Cigna’s counsel sent a detailed letter to Anthem attacking the 

proposal. JX 2227. Among other things, Cigna took the position that its provider contracts 

did not authorize it to rent its network to a buyer. Id. at ’659. Anthem had analyzed Cigna’s 

form agreements and had not identified any restrictions on renting its network.238

With Cigna continuing to refuse to enter into an NDA with either of the Blues 

buyers, Anthem charged Cigna with failing to use its reasonable best efforts to support the 

Merger. Cigna’s lead counsel then contacted the Staff to find out if the DOJ would consider 

a sale to a Blues buyer, explaining that Cigna did not want to provide its confidential 

information to a non-viable acquirer. The Staff confirmed that “a divestiture to a Blue 

plan is not a path forward.”

239 The Staff added that its position would not change even if 

Cigna entered into NDAs and shared information with the two Blues buyers.240

 

238 JX 3119 at ’779; Paul Tr. 755–57.

239 JX 2254 at ’481; accord JX 2258.

240 See JX 2254 at ’482; JX 2258.
122

Shortly thereafter, talks broke down with Centene, which was the only potential 

non-Blues buyer. Cigna never gave Centene access to the data room.241 Centene also had 

asked to buy a combination of Cigna and Anthem assets, rather than just Cigna assets. 

Anthem was unwilling to sell the assets that Centene wanted and believed that it could find 

other buyers for the Cigna assets.242

4. Cigna Continues To Analyze Its Standalone Options.

While the meetings with the DOJ were taking place, the Cigna ELT continued to 

work with Bain on the strategies available to “Sovereign Cigna.”

243 Cordani and the Cigna 

ELT also consulted with Moelis about its strategic options for if the DOJ blocked the 

Merger, including “lessons learned on broken deals.”

244 The Cigna Board spent much of 

its July 2016 meeting reviewing Cigna’s standalone strategy and alternatives.245

Cigna simultaneously began preparing to shape the narrative if the DOJ challenged 

the Merger. Cigna crafted a story in which the parties’ interests diverged because of 

Anthem’s regulatory strategy, rather than Cigna’s opposition to the L2/L3 selection process 

 

241 See JX 2163; JX 2177; Paul Tr. 654, 656–67; Gray Tr. 1667.

242 See JX 2330; JX 2339; Zielinski Tr. 500–01; Paul Tr. 717–19.

243 See JX 2040; JX 2125; JX 2198; JX 2213; JX 2214; JX 2224; JX 2233.

244 JX 2260; see JX 2282.

245 JX 2357; JX 2358; JX 2293.
123

and other aspects of integration planning.246 Teneo developed a communications plan that 

involved “proactive outreach to key media on background.” JX 2298 at ’547. Teneo would

 attack Anthem’s regulatory strategy,

 claim that the Blues Rules would have limited NewCo’s ability to grow,

 criticize Anthem’s remediation proposal,

 argue that the Merger would have favored shareholders over customers,

 portray Anthem as financially constrained and “not a well-run company,”

 attack Swedish, including by suggesting that he made misleading statements about 

the status of the transaction and the degree of cooperation between the parties, and

 praise Cigna’s potential for standalone success.

Id. at ’547–49. 

Meanwhile, on July 12, 2016, the Steering Committee met for what would be the 

last time. During the meeting, the commercial integration team presented a modified goto-market strategy for the first 180 days that replaced “Bias to Blue” with a brand-agnostic 

strategy, which the Steering Committee adopted. See JX 2238 at ’861. Under the brandagnostic strategy, if a new client in an Anthem Blue State expressed a preference for a 

Cigna product, then only Cigna would provide a quote. The full “Air Traffic Control 

Playbook” confirmed that NewCo would deploy the brand-agnostic strategy, retain both

 

246 See, e.g., JX 2295. As part of that work, Cigna’s attorneys collected and analyzed 

Delaware cases addressing “reasonable best efforts” provisions. See JX 2197; JX 2248. 

Cigna also prepared for “the ‘walk away’ scenario,” in which the parties agreed to 

terminate the Merger Agreement. JX 2284 at ’930.
124

the Anthem and Cigna brands, and seek to preserve NewCo’s full book of business. See JX 

2303. 

K. The Antitrust Litigation

On July 21, 2016, the DOJ sued to enjoin the merger. On the same day, the DOJ 

sued to enjoin the pending merger between Aetna and Humana.247 The DOJ contended that 

the mergers would “eliminat[e] two innovative competitors—Cigna and Humana—at a 

time when the industry is experimenting with new ways to lower healthcare costs,”

reducing the number of large national health insurers from five to three.248

The DOJ’s public comments included criticisms of Anthem’s divestiture proposal. 

JX 2323 at 8–9. During the press conference, a reporter asked, “[I]s there something that 

[the] companies could do? Put something -- could they fix it in a way to get a settlement?”

Id. at 12. The DOJ responded, “We have seen nothing that suggests that. Absolutely 

nothing.” Id. 

1. The Parties’ Initial Responses To The Antitrust Litigation

Anthem responded to the filing of the Antitrust Litigation by issuing a press release

criticizing the DOJ’s decision and by running advertisements touting the Merger in major 

newspapers.249 Swedish appeared on CNBC and spoke in support of the deal.250 Swedish 

 

247 PTO ¶ 178; JX 2304.

248 JX 2314 ¶ 4 (the “Antitrust Complaint”); accord JX 2319 ¶ 4.

249 See JX 2302; JX 2313; JX 2324; JX 2343; JX 2344; JX 2353; Zielinski Tr. 83–

84.

250 See JX 2355. During that interview, Swedish stated that Cigna had done “nothing 

that has led us to believe they want[ed] to leave this deal.” Id. at ’147. At trial, Swedish 
125

and Zielinski also met with the Wall Street Journal and gave them an exclusive “sources 

close to Anthem” interview about the state of the deal and the disagreements with Cigna.251

Cigna declined to join Anthem’s press release.252 Cigna issued its own press release 

stating that it was “evaluating its options” in light of “the concerns raised by the DOJ and 

the overall status of the regulatory process,” which Cigna pointed out “was led by 

Anthem.” JX 2312. Cigna said that it did “not believe the transaction [would] close in 

2016” and that “the earliest it could close [was] 2017, if at all.”

253 Cigna also said that it 

 

strangely described that statement as “truthful and accurate.” Swedish Tr. 1213. He also 

testified that in the fall of 2016, he thought that Anthem and Cigna were “working together” 

to defend the Antitrust Litigation and that “Cigna was committed to the trial and hoping 

that the deal would get approved.” Id. at 1216. Swedish’s statements to CNBC about 

Cigna’s level enthusiasm were not accurate, nor was his testimony regarding his views of 

Cigna in the fall of 2016. 

251 Zielinski Tr. 382–83. In response to an interrogatory asking about Cigna’s 

communications with the Wall Street Journal about the disputes between the parties, 

Anthem failed to identify this meeting. See JX 4065 at 8. The meeting should have been 

identified. During the same period, Swedish asked Zielinski and Anthem’s public relations 

advisors to look into developing stories that attacked Cigna’s prospects as a standalone 

entity, but Zielinski convinced Swedish not to go forward with that strategy. See Zielinski 

Tr. 390–95; see also JX 2273; JX 2618.

252 See PTO ¶ 180; JX 2312; JX 2313.

253 Id.; see JX 2285; JX 2347. McCarthy, Cigna’s CFO, felt that Cigna should have 

said that it was disappointed in the DOJ’s decision to sue, attributing the failure to Teneo’s 

advice. McCarthy Dep. 603–04. Cigna’s head of investor relations questioned the language 

of the release, writing, “Don’t know what tone we are looking for, but to me, this sounded 

like we really don’t care whether or not [the Merger] gets rejected.” JX 2228. He noted that 

“the conventional wisdom on the Street” was that Cigna was “not interested in this deal,” 

and he explained that “[a] disclosure like this would further that thesis.” Id. One of Cigna’s 

investors suspected “[b]ased on the tone of [the] release” that Cigna was “looking for a 

way out.” JX 2331 at ’791. Other investors expressed similar sentiments. See JX 2334; JX 

2335; JX 2354.
126

had developed “an [a]ttractive Plan B” that it would deploy if the deal did not go through.254

Cordani began meeting with Cigna’s investors to tout Cigna’s prospects as an independent 

company. See JX 2402. Cigna also formally engaged to Bain to further develop its 

“Sovereign strategy.”

255

After the DOJ filed suit, all joint work on integration planning stopped.256 Anthem 

and its consultants continued to work on integration, but without input from Cigna.257

2. Cigna’s Covert Communications Campaign

Officially, Cigna declined to comment on the Antitrust Litigation. Unofficially, 

Teneo waged a covert communications campaign against the Merger.258

Because the DOJ complaint mentioned Anthem’s status as a Blues licensee, Cigna 

charged Teneo with developing stories about the Blues Rules being an impediment to the 

 

254 JX 2392 at ’391; see JX 2409.

255 See JX 2405; JX 2457; JX 2705.

256 Dist. Ct. Op., 236 F. Supp. 3d at 186, 235; Cordani Tr. 1834. The parties dispute 

who stopped the joint effort first. The record shows that after the DOJ’s announcement, 

Anthem instructed its integration teams to “cease all conversations with Cigna” and to 

cancel all joint meetings. JX 2326; see JX 2332. Cigna followed suit. JX 2339; JX 2403. 

Anthem then reconsidered and proposed continuing to work on a “90 day action plan for 

Day 1 readiness that would be implemented upon receiving a positive outcome in the DOJ 

litigation.” JX 2404; see JX 2403. Cordani declined, claiming that Cigna would “continue 

to focus on regulatory and litigation priorities and support.” JX 2404 at ’243; see JX 2406. 

Contrary to that claim, Cigna did not provide any ongoing support.

257 See, e.g., JX 2341; JX 2370; JX 2394; JX 2443. 

258 Anthem also engaged in efforts to “shape pre-trial coverage” by “creating a new 

narrative in the DC media market where this trial will take place.” JX 2386. The 

fundamental difference was that Anthem was trying to promote a narrative that supported 

the Merger and would make it more likely for the DOJ to settle. Id.; see JX 2388.
127

Merger. To that end, Teneo and Wachtell Lipton began gathering litigation filings from the 

Blues MDL and using them to develop arguments against the Merger. 259

Jones used information gleaned from the Blues MDL to write a letter to Zielinski 

that questioned NewCo’s ability to comply with the 2/3 Rule and “Anthem’s good faith in 

its dealings with Cigna over the last year plus.” JX 2467 at ’305. She accused Anthem of 

“misrepresenting the scope and nature of its relationship with the [Blues Association], 

failing to provide access to Cigna to important documents regarding that relationship and 

failing to brief Cigna on the extent of its ‘conflict of interest.’” Id. at ’307.

Teneo used information gleaned from the Blues MDL to prepare its “Blues [P]itch,”

a sixteen-page document, which used the Blues Rules to advance arguments against the 

Merger.260 The Blues Pitch included the following messages:

 “If Cigna merges with Anthem, its freedom to compete with Blues across the 

country could be constrained.” JX 2484 at ’001. 

 “As a [Blues] organization, Anthem’s obligations mandate certain actions that limit 

the size and resources of its non-Blues business.” Id.

 “[Blues] rules oblige Anthem to prioritize its Blues business, implying that the 

legacy Cigna business will be neglected within the merged organization.” Id.

 “A merged Anthem-Cigna will empower Anthem, exacerbate the market 

segmentation employed by the Blues, and cause the erosion of the innovation and 

value Cigna brings, harming consumers and the healthcare market more 

broadly.” Id. 

 “To [comply with the Blues Rules], the company will have to decrease the 

percentage of Cigna customers in the merged company. Practical implementation 

 

259 See JX 2462; See Cohen Tr. 2405, 2407–08.

260 JX 2484; see Cohen Tr. 2408–09.
128

implies that Anthem will get bigger and do away with Cigna plans. By shifting plans 

and resources from Cigna to Blues, the merged company will limit Cigna’s 

innovation.” Id. at ’002.

 “[A] merger would create a clear conflict of interest between [Anthem’s] Blues and 

non-Blues plans.” Id.

 “Anthem and its Blues partners are already being accused of negatively impacting 

the healthcare market and its consumers.” Id.

 “Anthem has failed to address the grave concerns outlined in this document.” Id.

 “Anthem is well aware of its obligations to the Blues. To retain its Blues license, 

which is core to the company’s value, Anthem will have to either compete with 

other Blues or weaken Cigna’s position.” Id.

 “To ensure a successful merger without anti-trust violations, Anthem should have 

developed a solution to address these concerns. However, Anthem and its leadership 

continue their refusal to tackle these pivotal issues.” Id. 

Cohen developed the Blues Pitch knowing that it would support the DOJ’s position against 

the Merger. He had no factual basis for the arguments in the Blues Pitch, other than what 

he saw in the Blues MDL filings. See Cohen Tr. 2413–14, 2416.

Shortly after preparing the Blues Pitch, Cohen met with Jones. She told Cohen “to 

play this as all roads go to the blues.” JX 2486 at ’490. She admitted that Cigna was “going 

through the motions of moving this deal forward.” Id. at ’491. Cohen understood that by 

“all roads go to the Blues,” Jones meant that she wanted to pursue “a strategy to blame the 

Blues rules no matter what.” Cohen Tr. 2427–28. 
129

One day after receiving his marching orders, Cohen sent Jones a memorandum titled 

“Strategic Positioning Initiatives,” which identified three key themes.261 The first was 

“[t]he leadership style and focus of [the] Anthem CEO and its effect on the merger 

process.” JX 2488 at ’888. The messages for this theme included the following:

 “The leadership style and focus of the Anthem CEO has proven a detriment to the 

success of this transaction.” Id.

 “While suggesting . . . that the successful completion of the merger was his top 

priority, his actions have been anything but . . . .” Id.

 “The CEO’s repeated public statements about the parties being aligned and 

advancing the process together are entirely inconsistent both with realit[y] as well 

as statements made by Anthem’s counsel in court . . . .” Id.

The attacks recalled earlier efforts by Teneo to undermine Swedish, including an attempt 

to locate a picture of Swedish smoking a cigar on the cover of Cigar Aficionado magazine, 

which Teneo believed would hurt his credibility as a healthcare CEO.262

The second theme was “[t]he emerging complexity related to the Blues and related 

litigation and this complexity’s impact on the merger process as well as Anthem’s 

handling/lack of handing of this complexity.” JX 2488 at ’888. The talking points for this 

theme came straight from the Blues Pitch.263

 

261 JX 2488 at ’888; see Cohen Tr. 243032. Cohen sent the document to Jones by 

routing it through Wachtell Lipton in an effort to manufacture a claim of privilege. See 

JX 2489; see Cohen Tr. 242930.

262 JX 1922; see Cohen Tr. 2381–83; see also JX 2781 (Teneo developing “Story 

Points” for article attacking Swedish).

263 See id. at ’889; JX 2484.
130

The third theme was “a lack of credibility and consistency in the statements 

advanced by Anthem with regard to the completion of the transaction and its approach to 

so doing, particularly with regard to the lack of a remediation plan . . . .” JX 2488 at ’888. 

Talking points for this theme included the following:

 “It is a widely held view in the financial community and the media that the 

likelihood of completing the Anthem-Cigna merger is de minimus [sic].” Id. at ’890.

 “Anthem is not advancing a mitigating approach nor does it have time to construct 

such an alternative scenario at this point if it wanted to.” Id.

 “Anthem CEO has recently left investors and other audiences wanting as to how the 

company could secure a victory in completing the transaction.” Id.

Cohen reported that he was “actively pursuing and developing storylines with [the] media”

involving these themes, including with the Wall Street Journal, the New York Post, and the

Financial Times.

264 Cohen spoke with reporters, attorneys, and law professors who might 

help spread Cigna’s anti-Merger narrative.265 Cohen provided reporters with draft 

language, quotations, and other material that reflected poorly on Anthem for the reporters 

 

264 JX 2488 at ’888, ’890–91; see also JX 2578. Wachtell Lipton assisted Cohen by 

assembling information that he could provide to reporters. See JX 2499; JX 2500; JX 2598; 

JX 2600. Wachtell Lipton also connected Cohen with reporters See JX 2515.

265 See JX 2526; JX 2533; JX 2537; JX 2553; JX 2555; JX 2564; JX 2565; JX 2607.
131

to drop into their stories.266 Teneo separately worked on messaging that attacked the health 

of Anthem’s business.267

Cohen’s efforts produced stories that advanced the anti-Anthem, anti-Merger 

themes that he and Jones had developed.268 When Cohen forwarded one of the articles to 

Teneo’s CEO, he congratulated Cohen on a job “[w]ell done.”

269

 

266 See JX 2556; JX 2561; JX 2566; JX 2567; JX 2569. Cordani testified at trial that 

the communications initiative was never “activated.” Cordani Tr. 2042–43. That testimony 

was inaccurate. The record makes clear that Teneo carried it out at Cigna’s request. See

Cohen Tr. 2433, 2437; JX 2488 at ’888. Cordani also claimed inaccurately that he had not 

received the Strategic Positioning Initiatives. Cordani Tr. 2039. The metadata showed that 

the document was produced from his files. JX 3137; Cordani Tr. 203940. Cordani even 

testified that he “had very little involvement with Teneo.” Cordani Tr. 2021. The record 

shows that Cordani directly engaged with Teneo on numerous occasions, including with 

its CEO, Declan Kelly. See, e.g., JX 2611; JX 2638. Cohen testified that he “worked 

regularly” and “closely” with a “core team” consisting of Cordani, Jones, Baucus, and 

Wachtell Lipton, and that he had “a substantial amount of contact” with Cordani and Jones. 

Cohen Tr. 2373–74. 

267 JX 2509 at ’101; see JX 2516. Cordani testified that Teneo did not run a campaign 

criticizing the Merger. See Cordani Tr. 2020, 2027–28. Jones similarly testified that Cigna 

did not hire Teneo to criticize the Merger, that there was no strategy to criticize the Merger, 

and that Teneo did not perform any work to promote or generate stories about the Merger. 

Jones Tr. 2760–62. That testimony was obviously inaccurate. See, e.g., JX 2565; JX 2567; 

JX 2798; JX 2803; JX 2890; JX 3110; Cohen Tr. 2433. Jones went so far as to claim that 

Teneo’s job was to correct any misperception that Cigna was not committed to the Merger. 

Jones Tr. 274446. She was forced to admit that there is not a single Teneo document that 

includes a message indicating that Cigna was interested in the Merger. Id. at 2773–74.

268 See JX 2570; JX 2571; JX 2574; JX 2576. Ironically, Cohen’s efforts resulted in 

reporters asking Cigna to comment on stories Cohen had planted. See, e.g., JX 2571.

269 JX 2576. Cigna accuses Anthem of engaging in comparable conduct. There is 

evidence that in July 2016, after Teneo’s initial leaks led to articles in the Wall Street 

Journal and the New York Post, Swedish and Zielinski met with the Wall Street Journal 

and provided information as “sources close to Anthem.” JX 2572. There also is evidence 

that after the DOJ sued and as trial approached, Anthem’s public relations advisor worked 

on talking points and prepared a media plan. See JX 4288; JX 4295. Just before trial, 
132

3. The Initial Phase Of The Antitrust Litigation

As it had the right to do under the Merger Agreement, Anthem took the lead in 

defending the Antitrust Litigation. Cigna purported to defer to Anthem, while working to 

undermine the defense.

Cigna initially undermined Anthem’s efforts to obtain a prompt schedule in the 

Antitrust Litigation. Either party could terminate the Merger Agreement after April 30, 

2017, so Anthem sought an expedited trial before the end of 2016 to provide the District 

Court with time to rule, an opportunity for appeal, and a window to obtain other necessary 

approvals. See JX 2382. To show that it was serious about moving quickly, Anthem filed 

its answer on July 26, 2016. Cigna proceeded leisurely. Cigna did not file its answer until 

September 19, 2016. Cigna did not make any arguments in support of an expedited trial 

date, but instead submitted a one-page submission stating, “Cigna defers to Anthem’s 

scheduling request . . . .”

270

 

Anthem hired an additional public relations firm to help promote coverage that supported 

the Merger. See JX 2604; JX 2618; JX 2665. And when Anthem considered sending Cigna 

a formal notice of breach and making a public announcement in July 2016, Anthem also 

considered having its public relations firm speak on background with reporters about the 

notice. See JX 2273. Anthem, however, did not send the notice of breach and did not 

proceed with the story. See Zielinski Tr. 390–95. Anthem also had its public relations firm 

monitor and summarize stories in the press. See JX 4077.

There are at least two critical distinctions between Anthem’s and Cigna’s conduct. 

First, Anthem’s level of activity was less extensive than Cigna’s. Second, Anthem sought 

to promote the Merger and facilitate closing, while Cigna sought to undermine the Merger 

and prevent closing.

270 JX 2381. Because the divergence between Anthem and Cigna’s positions on 

scheduling was self-evident, Anthem’s counsel addressed it during the initial case 

conference on August 4, 2016. In support of its request for an expedited schedule, 
133

Cigna also resisted mediation. During a case management conference on August 12, 

2016, the District Court encouraged the parties to explore mediation, suggesting that 

“potential settlement discussions” could proceed “on a parallel track” with the litigation 

and potentially result in “a negotiated solution.” JX 2414 at 34. The DOJ responded that 

“[there was] absolutely a willingness” to consider settlement, and clarified, “We’re always 

willing to hear any [settlement] proposals that the defendants have.” Id. Anthem also 

endorsed the prospects of settlement.271

Based on the District Court’s comments, Anthem proposed that the parties 

mediate.272 The DOJ asked for “Cigna’s position” and expressed skepticism that mediation 

would be productive. JX 2451. Anthem later asked Cigna to support a motion to appoint a 

mediator and to assist with a local market divestiture. Cigna refused, asking Anthem “how 

 

Anthem’s counsel explained, “[W]e have a situation here where Anthem, the acquiror [sic], 

wants to do the deal, [and] Cigna, at least its top management, is . . . no longer interested . 

. . .” JX 2424 at 32. Cigna’s counsel did not argue in favor of an expedited trial, saying 

only, “[W]e would defer to Anthem.” Id. at 40.

271 Id. at 36. During the conference, the District Court recognized the adversity 

between Anthem and Cigna and asked, “Does it makes sense to force the government and 

the Court and the special master and the third parties and the state regulators to abide by 

an extremely ambitious schedule in order to review a merger between two parties that don’t 

seem to want to merge?” Id. at 24; see id. at 40; see also JX 2418. Anthem’s counsel 

indicated that Anthem wanted to complete the deal. See JX 2414 at 37. The District Court 

then turned to Cigna’s counsel and asked whether there was flexibility as to the 

Termination Date, commenting that it was “a bizarre situation that we are doing all of this 

for the benefit of a merger that may not be desired.” Id. at 52. Cigna’s counsel claimed that 

Cigna was committed to the Merger, but noted, “On April 30th either party can withdraw.” 

Id. at 54.

272 See JX 2451; Curran Tr. 1606–07; Rule Tr. 3186–88.
134

a local market divestiture plan that addresses the DOJ’s concern [could] reasonably be 

executed within the current Anthem requested court schedule.” JX 2476.

During a case management conference on September 30, 2016, the District Court 

again endorsed mediation, describing it as an “excellent idea.”

273 Cigna’s counsel 

disagreed, arguing that mediation would distract from trial preparation. Cigna’s counsel 

also posited that it would be difficult to support a mediation effort “without understanding 

sort of the path that the mediator is going to take.” Id. at 58. The District Court pushed 

back, expressing skepticism that the parties lacked the resources to proceed on two tracks 

and observing that “it’s difficult to anticipate what the proposals would be or how the 

mediation would proceed without actually initiating mediation.” Id. at 59. In a subsequent 

call, the DOJ made clear that it regarded mediation “as a waste of time.” JX 2540. 

During the early phases of the case, Anthem tried to speak with potential NewCo 

customers to identify witnesses who might give trial testimony in favor of the Merger.274

Under Anthem’s confidentiality agreement with Cigna, Anthem could not contact Cigna’s 

clients without Cigna’s consent.275 Cigna opposed any effort by Anthem to contact nineteen 

entities that Cigna identified as its customers. JX 2438. 

 

273 JX 2523 at 59; see id. at 57.

274 See JX 2423; JX 2435.

275 JX 2416 at ’532; see JX 2428; JX 2436.
135

4. Discovery In The Antitrust Litigation

During discovery, Anthem did all the work. Anthem prepared all the discovery 

requests, took or defended 109 out of 115 depositions, and identified, retained and worked 

with all of the experts. The only depositions that Cigna defended were those of its six 

witnesses. Cigna did not take any depositions, and it asked limited questions of only three 

witnesses—Cordani and two Anthem witnesses—in each case eliciting testimony that 

supported the DOJ’s case and harmed the defense.276

Instead of helping, Cigna continued to undermine Anthem’s efforts. During a 

teleconference on August 16, 2016, Cigna volunteered that the parties’ in-house counsel 

had exchanged additional dispute letters.277 The DOJ moved to compel production of the 

letters, and Anthem asserted privilege. Cigna submitted a response in which it argued that 

only parts of the documents were privileged and asked the Special Master to review the 

documents in camera. Anthem believed that only eleven documents were at issue, but 

Cigna had submitted fifty documents to the Special Master and argued in favor of the 

broader submission.278 Cigna then disputed Anthem’s proposed redactions, and when 

Anthem stated its position to the Special Master in neutral terms, Cigna responded with an 

over-the-top email about the “inaccurate insinuations of Anthem’s counsel.” JX 2514. The 

 

276 See Curran Tr. 1416–25, 1434–35; ADX 9; see also Rule Tr. 3168–69.

277 See JX 2494 at 2; see also JX 3065; Curran Tr. 1410–14, 1434–35.

278 See JX 2501 at ’03435; JX 2534; Curran Tr. 1425.
136

Special Master recommended that many of the documents be produced, and the court 

adopted the recommendation.279

One of the more significant developments during discovery was Cordani’s 

deposition. Cordani was shown an advertisement that Anthem had run in support of the 

Merger after the DOJ filed suit, JX 2353, then asked about an email in which Jones wrote, 

“Not only are these ads misguided as a tactical matter, they contain statements which we 

do not believe to be true,” JX 2596 at 147. When asked about what was untrue, Cordani 

launched into talking points from the Blues Pitch, including the theme that the Merger 

would damage Cigna outside the Anthem Blue States:

An example, to answer your question, is our prior dialogue—a prior topic of 

the proposed forced migration of Cigna customers that we talked about 

earlier, which took place either a month or two prior to this event transpiring, 

raised significant concern in our corporation that choice would be 

constrained and the ability to harness our clinical programs and our 

collaboratives would not only be constrained but essentially disrupted and 

further concern that our network outside of the 14 states would ultimately

systematically be dismantled as the volume in the 14 states in [sic] the Cigna 

platform decreased. 

By definition you would be taking volume outside of the 14 states, so choice. 

And then, secondly, we continued to register concerns just in terms of how 

the $2 billion was being estimated on medical cost savings because the 

combination of network optimization but clinical program optimization 

assumptions continued to change on a regular basis there. 

JX 2596 at 148–49. Later in his deposition, Cordani claimed that the “migration strategy”

was called “Bias [to] Blue.”

280

 

279 See JX 2541; JX 2580.

280 Id. at 164, 195. During the June 2016 Steering Committee meeting, Cordani had 

claimed that “if the Department of Justice saw this strategy, they’d kill us . . . because it’s 
137

The contemporaneous documents contradict Cordani’s testimony that Bias to Blue 

was a forced migration strategy. The Bias-to-Blue strategy contemplated that new 

customers within the Anthem Blue States who expressed a preference for a Cigna product 

would receive quotes for both an Anthem product and a Cigna product. After Cordani 

objected to this approach, Anthem shifted to a brand-agnostic strategy in which the 

customer in that scenario only would receive a quote for a Cigna product. See Part II.I.6 & 

II.J.4, supra.

The DOJ lawyers were sufficiently pleased with Cordani’s testimony that they were 

ready to wrap up the deposition by lunchtime. Anthem’s counsel asked to resume the 

deposition after lunch, thinking that he might “try to offset the tremendous damage that 

Mr. Cordani was doing.” Curran Tr. 1433–34. After lunch, Curran asked a limited line of 

questions about Cordani’s role as CEO of Cigna and his potential responsibilities as 

NewCo’s COO. See JX 2596 at 175–79. Cigna’s counsel then cross-examined Cordani and 

elicited additional testimony that was favorable to the DOJ’s case. Despite knowing that 

the DOJ was pursuing a theory that Cigna was a uniquely innovative competitor, Cigna’s 

counsel asked a series of leading questions about Cigna’s innovation:

Q: So earlier today in response to some questions by Mr. Severt, you 

talked about -- you mentioned an example of innovation at Cigna 

called, I think, Health Esystem?

A: Health Eview.

 

not pro-choice.” Cordani Tr. 1828. During his deposition, Cordani voluntarily brought up 

the issue. See Curran Tr. 1431. Cordani was the only witness to bring up the Bias-to-Blue 

strategy. See Rule Tr. 3174–76.
138

. . . 

Q: Would someone be able to re-create the innovativeness or the 

innovations of Cigna by simply taking a license to Health Eview?

A: I don’t believe so.

Q: Is there any other single innovation that you could license that 

essentially would create a -- basically the innovations of Cigna?

A: No. I don’t believe so.

Q: Is there any way to realize or appropriate the innovativeness of Cigna 

other than taking its management team or its employee team, the 

people, in other words, that you talked about, who basically achieved 

that innovativeness in those innovations?

A: I guess the way I’d answer that is the intellectual property is the 

important part of what makes the engine run and, again, the cadre of 

people are the field to make the intellectual property run. . . . [Y]ou 

need the people to take technology and turn it into actionable 

information and then engage an employer, an individual, a health care 

professional and drive an action or outcome. 

That’s what we are -- we are all about. We are about driving the action 

of the outcome, not perpetuating technology.

JX 2596 at 186–88. Anthem’s lead counsel concluded after Cordani’s deposition that 

“Cigna . . . and their legal team were dedicated to killing the merger.” Curran Tr. 1439.

5. Pre-Trial Preparations

During the pre-trial phase, Cigna became more aggressive and obstructionist. Cigna 

also shifted its anti-Merger communications campaign into overdrive.

As trial approached, Cigna continued to oppose mediation. On November 11, 2016, 

during an impromptu office conference, the District Court asked the parties to consider 

mediation. Rule Tr. 3190. Two days later, Richard Levie, a retired federal judge who had 

been serving as the Special Master for the case, offered to mediate. Anthem asked Cigna 
139

to agree, but Cigna declined.281 On November 23, Judge Levie reached out again, but Cigna 

still would not agree to mediation.282 Cigna insisted that Anthem first had to propose “a 

credible path (i.e., proposal) to a settlement” and the DOJ had to “indicate[] a willingness 

to mediate.” JX 2672. Because the DOJ opposed mediation, Cigna would not even express 

support for the idea. Rule Tr. 3193. Cigna’s refusal meant that the DOJ never faced any 

pressure to mediate. See Curran Tr. 1605, 1607–08.

During the trial preparation, Cigna proposed trial exhibits that (i) undermined 

Anthem’s case on efficiencies and (ii) supported the DOJ’s position that there was a distinct 

market for national accounts with only four major participants. See JX 2602. Cigna did not 

provide any comments on Anthem’s pre-trial brief and did not sign the pre-trial brief.283

One week before trial, Cigna reversed course on the handling of its witnesses. Four 

weeks earlier, on October 13, 2016, Cigna had told Anthem that Cigna’s counsel would 

“take the lead in defending Cigna employees who are called as trial witnesses, including 

putting those witnesses on for direct (to the extent they are called by the defense) and 

crossing them to the extent they are called by plaintiffs.”

284 At the same time, Cigna 

asserted that Anthem was 

pursuing an unsupportable and fundamentally flawed argument that could 

undermine the parties’ defense of the transaction. Namely, Anthem appears 

to be pursuing the specious argument that Cigna’s total medical cost 

 

281 Id. at 3191; Zielinski Tr. 67.

282 Zielinski Tr. 7174; Rule Tr. at 3191–93.

283 See JX 2627; Curran Tr. 1441, 1520; Rule Tr. 3180–83.

284 JX 2579; see Curran Tr. 1441.
140

containment efforts (e.g., customer and provider collaboration, wellness 

programs specialty integrations, etc.) are basically a marketing sham (or 

worse), that Cigna is not really a competitive force in the market, and that 

Anthem will be doing Cigna’s customers a favor by moving them to the 

Anthem model.

Such an argument would be both contrary to fact and a violation of the 

merger agreement.

JX 2579. That assertion mischaracterized Anthem’s argument. Anthem was attempting to 

show that Cigna was not a maverick with uniquely innovative products, as asserted by the 

DOJ.285

Cigna understood Anthem’s argument, and the Cigna ELT previously had 

anticipated making that exact argument. Before the Merger Agreement was signed, when 

Cigna was analyzing the Merger’s prospects for antitrust clearance, Cigna recognized that 

the DOJ might argue that Cigna was a “unique, procompetitive ‘maverick.’” JX 209 at 

’484. Cigna also identified the obvious response: arguing that Cigna was not “a uniquely 

disruptive maverick.” Id. Now, Cigna’s interests were different, and by creating a 

strawman version of Anthem’s argument, Cigna manufactured grounds for introducing 

evidence adverse to Anthem’s theory of the case. Cigna told Anthem that it was “planning 

on putting into evidence the fact that Cigna is an effective and innovative competitor that 

goes to market differently from Anthem.” JX 2579. Cigna also told Anthem that if

Anthem attempt[ed] to disparage Cigna and dispute[] our competitive 

prowess, we will have to respond by pointing out how Cigna’s strengths . . . 

compare to Anthem’s competitive weaknesses. That is, we will highlight for 

the court the anachronistic features and weaknesses of Anthem’s (and the 

 

285 See JX 2601; Zielinski Tr. 453, 458, 46163, 468; Paul Tr. 661–62; Rosen Tr. 

836–37, 907–08; see also JX 1836; JX 2148; Curran Tr. 139395.
141

Blues as a group) model and the “holes” in Anthem’s model that Cigna’s 

strengths will fill.

Id. Based on a contrived interpretation of Anthem’s argument, Cigna’s counsel threatened 

to litigate openly against Anthem during the trial.286

Four weeks later, on November 17, 2016, Cigna told Anthem to prepare and present 

the three Cigna witnesses whom the DOJ intended to call at trial.287 Cigna gave Anthem 

only one hour to prepare each witness.288 When Anthem asked for additional time, Cigna 

refused, characterizing Anthem’s request as an “abuse of a courtesy.”

289

Cigna foisted responsibility for preparing its witnesses onto Anthem just one day 

before Cordani was scheduled for preparation. Despite the fast turnaround, Anthem quickly 

prepared witness outlines.290 For Cordani, Anthem’s counsel noted that the DOJ appeared 

interested in the “Bias to Blue” strategy and asked Cigna’s counsel to remind Cordani that 

the concept had “evolved into a brand agnostic strategy.” JX 2649.

 

286 Cigna’s threat expanded on a position that Cigna took during a case management 

conference on September 30, 2016, when Cigna asked the District Court to confirm that 

Cigna could object to questions that Anthem asked at trial. JX 2523 at 40. Judge Jackson 

regarded the request as “completely extraordinary” and said that it was something that she 

had “never seen.” Id. at 41; accord id. at 42. Judge Jackson declined to rule it out, but held 

that Cigna would need to “clearly present . . . the justification and legal authority” for any 

objection. Id. at 42; see also Curran Tr. 1414–16 (describing exchange).

287 JX 2647; Curran Tr. 1441–43.

288 See JX 2647 at ’792; Curran Tr. 1444–46.

289 JX 3084 at ’794; see Rule Tr. 3228–29; see also JX 3126; Curran Tr. 1446–50.

290 See JX 2646; JX 3082; Curran Tr. 1442–43.
142

Anthem’s lead trial counsel personally handled Cordani’s preparation, which Cigna 

limited to approximately forty-five minutes. During the session, Anthem’s counsel gave 

Cordani a copy of Anthem’s pre-trial brief, which Cordani had never reviewed. Anthem’s 

counsel then went over the Bias-to-Blue strategy in an effort to remind Cordani that it did 

not involve forced conversions. Cordani resisted, maintaining that the Bias-to-Blue 

strategy was much more extensive and harmful to Cigna. After the session, Anthem’s 

counsel emailed the relevant presentations to Cigna’s counsel and with an explanation of 

what they showed.291

In contrast to the limited preparation time that it provided to Anthem, Cigna spent 

twenty-one hours preparing Cordani. JX 2908 at 14. As discussed below, Cordani gave 

testimony that was damaging to Anthem’s defense. Cigna’s lawyers agreed that he testified 

consistently with how he was prepared.292

Meanwhile, Teneo intensified its anti-Merger campaign.293 Teneo engaged in 

“Proactive Pre-Trial Activity” and “[w]ork[ed] with reporters” to write “curtain raisers”

for the trial, which would “[h]ighlight [Cigna] as innovative and positively impacting 

health outcomes.”

294 Consistent with the DOJ’s theory, Teneo sought to portray Cigna as 

 

291 See JX 2652; Curran Tr. 1444–46, 1450–52, 1558–60.

292 See Jones Dep. 448–50; Rule Dep. 614–16; Jones Tr. 2803.

293 See JX 2611; JX 2613; JX 2629; JX 2636; JX 2715. Cigna’s public position was 

“to refrain from litigating in [the] media.” JX 2585 at ’521.

294 JX 2613 at ’581; see JX 2617.
143

uniquely innovative, describing this messaging as a “Trojan horse” because Cigna was 

attacking the Merger from inside the defense.295

6. Trial In The Antitrust Litigation

As late as November 15, 2016, the Cigna ELT believed that “[i]t is possible that 

Anthem gets a favorable ruling on the national markets issue,” a possibility that the Cigna 

ELT described as “very unsettling for our team.” JX 2639. To mitigate this risk, Cigna 

provided additional assistance to the DOJ during trial.

Anthem sought to defeat the DOJ’s argument that Cigna was an innovative 

maverick by showing that Cigna was not uniquely innovative in the area of value-based 

care. Colin Drozdowski, an Anthem executive and the network integration team lead, 

testified that Anthem had “a unit price advantage and a medical management advantage”

over Cigna. JX 2660 at 1650. He also testified that Anthem had “a better discount than 

Cigna,” “more ACO [(i.e., collaborative care)] relationships than Cigna,” and “more 

enhanced personal healthcare, [i.e.,] patients who have medical home relationships, than 

Cigna.” Id. at 1667. Shubham Singhal, a McKinsey representative who had worked on 

integration, testified that “Anthem’s medical management results in a medical utilization 

that is 4 to 6 percent better than Cigna’s.” Id. at 1820. 

Anthem’s economist, Dr. Mark Israel, testified about the magnitude of the 

efficiencies that NewCo could achieve. Cigna’s counsel cross-examined Israel, questioning 

his credentials and undercutting the projections on which the efficiencies were based. See 

 

295 See JX 2614; Cohen Tr. 2443–44.
144

id. at 2067–94. Anthem’s counsel specifically asked Cigna’s counsel not to cross-examine 

Israel, but Cigna’s counsel did so anyway.296 At trial in this action, Cigna’s counsel claimed 

that he had to make a quick decision about whether to cross-examine Israel, but Israel’s 

direct examination had finished at the end of the trial day. Contrary to counsel’s testimony, 

he could have conferred with Anthem, pointed out issues for clarification, and coordinated 

on strategy. Instead, Cigna’s counsel developed his own cross-examination, consulted with 

Jones, and carried out the cross-examination the next day. See Rule Tr. 3197–3207. Cigna’s 

counsel sought to “blow Dr. Israel’s testimony out of the water” on the question of whether 

Cigna had better utilization. Id. at 3202. Cigna’s counsel did not elicit from Israel the fact 

that if Cigna had better utilization, and if NewCo used Cigna’s medical management 

programs, then the efficiencies actually would be greater than what Israel had estimated. 

See id. at 3203.

Cigna’s counsel also cross-examined Swedish, highlighting the dispute over 

Cordani’s responsibilities at NewCo and bolstering the DOJ’s argument that the 

efficiencies could not be achieved because of disputes between the parties. See JX 2660 at 

378–86. As he had before Cigna’s counsel cross-examined Israel, Anthem’s counsel 

specifically asked Cigna’s counsel not to cross-examine Swedish.297 During trial, Cigna’s 

counsel did not question any witnesses other than Israel and Swedish. Curran Tr. 1460.

 

296 JX 2732; Curran Tr. 1454–55.

297 JX 2732; Curran Tr. 1454–56.
145

Through his testimony at trial, Cordani became the DOJ’s “star witness.” Curran 

Tr. 1442. Expanding on the testimony that he gave in his deposition, Cordani claimed that 

the Bias-to-Blue strategy was the “framework in terms of how we would go to market, the

so-called go-to-market with existing clients and new clients in the overlap 14 states and 

then outside those 14 states.” JX 2660 at 429. That was not accurate. It was an option that 

the go-to-market team presented, and it was promptly changed to a brand-agnostic strategy 

after Cordani objected to it. The Bias-to-Blue strategy did not apply to existing clients, nor 

did it apply outside of the Anthem Blue States. See Part II.I.6 & II.J.4, supra.

Cordani testified that the Bias-to-Blue strategy would be “extraordinarily disruptive 

in the marketplace” and “make the existing [Cigna] offering less competitive in both 

Anthem and non-Anthem states.” JX 2660 at 432, 440. Elaborating on these points, 

Cordani agreed with a series of leading questions from the DOJ:

Q. And, as I think you said, the Bias Blue strategy will destroy the value 

of Cigna?

A. It will erode it pretty rapidly.

Q. Including the network?

A. Correct.

Q. Provider relationships?

A. Correct.

Q. Customer choice will be reduced? 

A. Correct. 

Q. Innovation will be at risk?

A. I think it would be at risk.
146

Q. And one plus one will not equal three?

A. To be determined, but harder to achieve.

Id. at 441. 

Cordani also helped the DOJ’s case with a colorful metaphor, describing the 

rebranding of Cigna members in the Anthem Blue States as pulling a string that would 

unravel the entire network.

Q. Okay. And the way Bias Blue works is those lives will also be 

rebranded from Cigna to Blue, right?

A. That was a concern that we raised as we were working through that 

strategy as it was presented because it would be the risk of unwinding or 

pulling a string and unwinding it. . . .

So, yes, you’d pull a thread, and it would have an unwinding effect on 

the network, not just in the overlap states, but in the stand-alone states.

Q. So it’s fair to say that the Cigna network would be harmed, not just in 

the Anthem states, but also the non-Anthem states?

A. That was the concern we registered, correct.

Q. And it would also harm provider collaborations in the non-Anthem 

states?

A. That was the concern we registered, correct.

Q. And as the Cigna network becomes weaker, fewer clients will find 

that network attractive?

A. That’s correct.

Q. Which will, in turn, cause the network to become even weaker?

A. Correct.

Q. In other words, the effects will snowball?

A. Correct. That was a concern, again, we registered.

Q. And all of this will make Cigna less competitive in the Anthem states?
147

A. Well, it would make the existing offering less competitive in both 

Anthem and non-Anthem states.

Q. The Cigna branded products would be less competitive?

A. For medical.

Q. And then for medical, the Cigna branded product would also be less 

competitive in the non-Anthem states?

A. That’s correct.

Id. at 430–32. The District Court understood Cordani to have testified “quite adamantly, 

that branding Blue will drain members from his provider networks and, therefore, do harm 

to the value-added proposition that is Cigna’s contribution to the marketplace . . . .” Id. at 

1540. 

Cordani’s vibrant testimony ran contrary to the conclusions that Cigna had reached 

when Cordani still expected the Cigna ELT to manage NewCo. Then, Cigna did not view 

moving its members in the Anthem Blue States to Blues-branded products as a problem, 

regarding it instead as a logical and manageable solution to address the 2/3 Rule.298

Cordani’s testimony also ran counter to the statements that Cigna and Anthem jointly made 

in a white paper submitted to the DOJ, in which the parties represented that if a national 

account was headquartered in an Anthem Blue State, then plan members located inside the 

Anthem Blue States could use the Blues Association network, and plan members located 

 

298 See, e.g., JX 79; JX 91 at ’163–64; JX 98 at ’964; JX 100 at ’451; JX 119 at

’884–86; JX 351 at ’076; JX 565 at ’215; JX 590 at ’835; JX 732 at ’552; JX 3121 at ’376.
148

outside the Anthem Blue States could continue to use the Cigna network.299 Cordani 

admitted at trial in this action that Cigna had not done any analysis to support his claims 

about the effects of moving Cigna members to Blue products in the Anthem Blue States. 

See Cordani Tr. 2108–10.

Cordani also testified against the opportunity to achieve $2.4 billion in efficiencies 

through medical cost savings:

It’s not our number, so it’s hard to agree with it. . . . [The calculation] ignores 

both utilization in terms of the number of services, but the mix of the services, 

as well as the venues in which the services are consumed. . . . So the point is, 

it’s an incomplete -- it’s an important -- the discount’s important, but an 

incomplete part of the equation. . . . So all that being said, we view that it is, 

at best, incomplete and, therefore, inaccurate.

JX 2660 at 442–43. The efficiencies figure came from a white paper that Cigna and Anthem 

submitted jointly. JX 1948 at ’299–300. Cordani had not done any work to assess the 

number and was not familiar with the analysis that Anthem’s expert had conducted. See 

Cordani Tr. 2130–35. Cordani had not read the expert report, and during the antitrust trial, 

testified, “I was told [Dr. Israel’s] name, but I do not know the analysis nor the 

gentleman.”

300

Reporters observing the trial immediately perceived how damaging Cordani’s trial 

testimony was. The Wall Street Journal wrote,

Some of Mr. Cordani’s testimony appeared to cut against Anthem’s defense 

of the deal. He said the integration strategy favored by Anthem, not 

 

299 See JX 2075 at ’906, ’912, ’919; Cordani Tr. 2107–08 (impeaching with 

deposition testimony).

300 JX 2660 at 505; Cordani Tr. at 2135
149

supported by Cigna, could hurt competition by eroding Cigna’s offerings—

an argument being posed by the Justice Department. 

In fact, he said, Cigna disagreed with an ad run by Anthem that touted the 

merger’s competitive benefits, because Cigna believed “choice would 

potentially be constricted” for insurance clients under Anthem’s preferred 

setup.

JX 2682. After Cordani’s testimony was unsealed, a Cigna investor wrote that “Cordani’s 

testimony to [the] DOJ seems designed to give the agency ammunition to block this value 

creating merger.” JX 2687 at ’910. Commenting on the email to his team, Cordani wrote, 

“[H]aving read the testimony, this is a concern I had.” Id. at ’906. Cordani’s solution was 

to rev up the Cigna narrative machine to pump out talking points about Cigna’s supposed 

commitment to integration and Anthem’s purported lack of commitment. See id. The Cigna 

team jumped into action, responding that they would get “talking points . . . coupled with 

some previously approved language” out quickly. Id. 

During trial in the Antitrust Litigation, Anthem renewed its effort to mediate. 

JX 2674 at ’005. Cigna refused, asserting that it would not mediate unless Anthem put a 

specific settlement structure on the table for the DOJ to consider. JX 2673 at ’674–75. 

During trial, Anthem prepared 159 pages of proposed findings of fact, which it sent 

to Cigna on December 1, 2016. Anthem prepared thirty-six pages of proposed conclusions 

of law, which it gave to Cigna on December 2. The submissions were not due until 

December 13. Cigna never commented on the drafts. Just two days after receiving 

Anthem’s first draft, and ten days before the filing was due, Cigna told Anthem that it 

would not sign them and instructed Anthem to remove Cigna’s name from the signature 
150

block.301 Cigna’s counsel asserted that “[t]he case Anthem has put on at trial with its own 

personnel and its own retained consultants (and without consulting Cigna) has raised 

serious questions about whether Anthem is more focused on harming Cigna rather than 

actually securing clearance for the transaction.” JX 2712. The evidence in this case does 

not support that assertion.302

Cigna’s litigation counsel did not do any of the things that a party supporting a 

Merger typically would do. Cigna did not make an opening statement in support of the 

Merger. Cigna did not make a closing argument in support of the Merger. Cigna’s counsel, 

however, did make a point of rebutting an argument that Anthem’s counsel made during a 

question-and-answer session with the court that took place between the two phases of the 

trial. In response to the court’s questions about the dispute letters, Anthem’s counsel

represented that the letters reflected disagreements between the CEOs and would not 

 

301 JX 2712; JX 2717 at ’786; JX 2737; Curran Tr. 1462–66. Cigna had been 

working on proposed findings of fact and conclusions of law for months, but neither shared 

them with Anthem nor submitted them to the District Court. Rule Dep. 413–15. Jones 

denied that Cigna had prepared any findings of fact at any point in time. Jones Dep. 369–

70. That testimony was inaccurate.

302 To justify its refusal, Cigna claimed that Anthem’s proposed findings and 

conclusions contained statements that Cigna believed were inaccurate, citing a quotation 

from an Anthem witness who said that Anthem “lead[s] the competition” in value-based 

care, JX 2796 ¶ 295 (alteration in original) (internal quotation marks omitted), and a section 

heading stating “There Is Nothing Uniquely Innovative About Cigna,” id. at 150. Cigna 

exaggerated the problematic nature of Anthem’s proposed language. Anthem was not 

asserting that Cigna was not innovative, only that Cigna was not uniquely innovative. Paul 

Tr. 661–62. Rather than coordinating and cooperating with Anthem to develop an 

acceptable set of proposed findings of fact and conclusions of law, Cigna refused to engage.
151

impair Anthem’s ability to integrate the two companies if the Merger closed.303 Cigna’s 

counsel disagreed:

[W]hile deferring to my colleague, Mr. Curran, I would take issue with the 

notion that the dispute that’s in the record simply reflects a disagreement 

between CEOs. 

I think Your Honor can tell from the letters that have gone back and forth, 

those were written and provided on behalf of Cigna [C]orporation and 

reflects the views, not just [of] senior management, but the board and the 

company as a whole.304

Cigna’s counsel also highlighted the fact that Cigna would not be signing Anthem’s 

proposed findings of fact. JX 2660 at 2706. The District Court was incredulous, asking,

What am I supposed to make of that? I wasn’t going to ask you that question 

in open court because they’re just drafts to this point, but since you brought 

it up, your name isn’t on them; Cigna’s name isn’t on them. 

What am I supposed to think that tells me? What does that mean?

Id. at 2705–06. Cigna’s counsel stated that Cigna was not signing them because they 

“reflect Anthem’s perspective” and “certain of those findings of fact . . . are inconsistent 

with the testimony of Cigna witnesses.”

305 By taking this position, Cigna instantiated its 

opposition to the Merger. Curran Tr. 1463.

Cigna’s actions inside the courtroom made it fairly easy for observers to perceive 

what Cigna was doing. Law360 published a story titled, “Anthem, Cigna Discord Could 

Give DOJ Edge In Merger Trial.” JX 2749. The story noted,

 

303 JX 2660 at 2701; see Curran Tr. 1468–69.

304 JX 2660 at 2706; see Curran Tr. 1472–73.

305 Id. at 2706; see JX 2734; JX 2735; JX 2761.
152

One of Anthem’s critical defenses in the case has been that the merger will 

generate billions of dollars in savings from reduced medical costs and 

administrative efficiencies. However, the DOJ has homed in on the welldocumented contentiousness between Anthem and Cigna to argue otherwise.

Now a matter of public record, the discord is potentially fatal to Anthem’s 

efficiencies defense, various competition and health care lawyers tell 

Law360.

“If efficiencies is your major defense, and one of the parties is not willing to 

work on integrating the two companies, how in the hell can you work on 

achieving the efficiencies?” said Jeff Miles, an antitrust lawyer in the 

Washington office of Ober Kaler Grimes & Shriver PC.

Andrea Murino, an antitrust lawyer for Goodwin Procter LLP, said merging 

partners are normally expected to be “cheerleaders for each other.” . . .

The tension between Anthem and Cigna, however, doesn’t appear to be 

limited to the back office. During a “question and answer” session on Dec. 

13, Cigna attorney Charles F. Rule of Paul Weiss Rifkind Wharton Garrison 

LLP openly disavowed an assertion from Anthem’s attorney that the “rift”

the government had made so much of was in reality nothing more than a 

dispute between the two companies’ CEOs.

Remarkably, Rule said Cigna’s misgivings stretch all the way down the 

board of directors and represent the views of the company itself. 

Hearing about Rule’s statements, Ober Kaler’s Jeff Miles was incredulous. 

“To put it in certain vernacular, if I were Anthem, I would be pissed off out 

of my mind,” Miles said.

JX 2749. The story predicted that “Cigna’s antics might . . . be the merger’s undoing.” Id. 

The Wall Street Journal similarly observed that “during trial proceedings that began in 

November, Anthem mounted a legal defense of the merger singlehandedly. Cigna lawyers 

said very little during the proceedings, and when they did, it usually didn’t help Anthem’s 

position.” JX 2845.

Meanwhile, outside the courtroom, Cigna and Teneo continued their efforts to 

control the narrative. Cohen had numerous exchanges with reporters, in which he provided 
153

them with talking points and quotations that criticized Anthem and the Merger.306 In one 

example, Cohen asked a Teneo colleague to help place a story “W. No fingerprints” about 

“how poorly [A]nthem and its CEO have run process.”

307 A set of Teneo talking points 

included the overall message that “[a]s [J]udge Jackson prepares to rule, by all accounts, 

the Government has proven its case and is likely to prevail.”

308 Jones admitted that parties 

generally do not tell the press that their adversary proved its case. Jones Tr. 2794. 

Teneo also prepared a communications strategy to be deployed if the District Court 

enjoined the Merger.309 It contemplated limited on-the-record statements while in the 

background Teneo would explain “how the situation played out and all of Anthem’s 

shortcomings that led to this point.” JX 2760 at ’697. Teneo’s themes were as follows:

 “The merger agreement makes clear that Anthem had responsibility for completing 

the regulatory process. . . . Anthem did not fulfill this obligation and is therefore in 

breach of the agreement.” Id.

 “Anthem’s approach to the regulatory process was disorganized and insufficient. 

They made numerous missteps during the litigation, did not adequately prepare for 

priority topics such as the Blues obligations, and would not even consider potential 

actions such as divestitures . . . .” Id.

 “Anthem’s approach to the integration process was inadequate and poorly-led. It 

focused predominantly on cost synergies, with little coordination and minimal 

 

306 See, e.g., JX 2694; JX 2727; JX 2769; JX 2773; JX 2781; JX 2783; JX 2784; 

JX 2785; JX 2793; JX 2794; JX 2798; JX 2803; JX 2805; JX 2806; JX 2807; JX 2810; see 

also JX 2812.

307 JX 2782. Wachtell Lipton, Cordani, Jones, and the Cigna ELT remained deeply 

involved in the process. See JX 2766; JX 2780; JX 2786; JX 2788; JX 2789; JX 2788.

308 JX 2780 at ’451; see JX 2793 (Cohen providing talking points to reporter).

309 See JX 2760; JX 2778.
154

planning for other key value-drivers that were promised to the financial markets and 

the public.” Id.

Teneo also began developing a communication plan for “potential break fee litigation.” Id.

at ’697–980

L. Anthem Extends The Termination Date.

On January 18, 2017, Anthem notified Cigna that it was extending the Termination 

Date from January 31 to April 30. JX 2800; see MA § 7.1(b). Zielinski informed Jones that 

if the District Court ruled in favor of the Merger and if the DOJ appealed, then “Anthem 

intends to resist the appeal vigorously.” JX 2801. He also informed Jones that if the District 

Court ruled against the Merger, then Anthem “intends promptly to seek an expedited appeal 

of the decision.” Id. He added that Anthem intended to pursue settlement with the newly 

elected Trump administration. See id.

Cigna issued a Form 8-K announcing its receipt of Anthem’s notice. Cigna did not 

express any commitment to the Merger. Instead, Cigna stated, “Following the issuance of 

the Court’s opinion, Cigna intends to evaluate its options in accordance with the Merger 

Agreement.” JX 2799. 

During a meeting on January 30, 2017, the Cigna Board resolved to terminate the 

Merger Agreement following “any issuance of a decision . . . to enjoin the Merger.”

JX 2824 at ’471. The Cigna Board also authorized a lawsuit against Anthem “to assert 

[Cigna’s] rights under the Merger Agreement.” Id. On January 31, Cigna issued another 

Form 8-K in which it stated:

As Cigna previously disclosed, Cigna still intends to evaluate its options in 

accordance with the Merger Agreement once the Court issues its opinion in 
155

the pending civil antitrust lawsuit. Cigna has made no determination with 

respect to Anthem’s notice seeking to extend the termination date, including 

whether Cigna will seek to terminate the Merger Agreement, and has 

informed Anthem that it is reserving all of its rights in this regard.

JX 2826. Cigna’s disclosures about “evaluat[ing] its options” and having “made no 

determination” were inaccurate. The Cigna Board had decided on Cigna’s course of action 

the day before.

M. The District Court Enjoins The Merger.

On February 8, 2017, Judge Amy Berman Jackson issued an order that permanently 

enjoined the Merger and summarized her reasoning for doing so. See United States v. 

Anthem, Inc., 2017 WL 527923 (D.D.C. Feb. 8, 2017). Judge Jackson also entered a 

lengthy and detailed opinion that incorporated the order as its introduction. A redacted copy 

of the memorandum opinion was released publicly on February 21. See Dist. Ct. Op., 236 

F. Supp. 3d 171.

The District Court permanently enjoined the Merger because the transaction would 

have a substantial anticompetitive effect in two product markets: (i) the market for national 

accounts in the fourteen Anthem Blue States and (ii) the local market for large employers 

in Richmond, Virginia. See id. at 178–79. In light of these findings, the District Court did 

not reach the questions of whether the Merger would have substantial anticompetitive 

effects on the markets for (i) national accounts in the United States as a whole, (ii) large 

group employers in thirty-four other local regions within the Anthem Blue States, or

(iii) the purchase of healthcare services from hospitals and physicians in those locations. 
156

The District Court Opinion began by explaining the general legal principles that 

governed the case. 

Section 7 of the Clayton Act prohibits mergers or acquisitions “where in any 

line of commerce or in any activity affecting commerce in any section of the 

country, the effect of such acquisition may be substantially to lessen 

competition.” 15 U.S.C. § 18. “Congress used the words ‘may be 

substantially to lessen competition’ . . . to indicate that its concern was with 

probabilities, not certainties.” Brown Shoe Co. v. United States, 37 U.S. 294, 

232 . . . (1962).

Id. at 191 (emphasis and alteration in original). The opinion used a burden-shifting 

framework, under which “Plaintiffs bear the initial burden to prove that the merger would 

result in ‘undue concentration in the market for a particular product in a particular 

geographic area.’” Id. (quoting United States v. Baker Hughes, Inc., 908 F.2d 981, 982 

(D.C. Cir. 1990)). “If plaintiffs establish the prima facie case, defendants must present 

evidence to rebut the presumption by ‘affirmatively showing why a given transaction is 

unlikely to substantially lessen competition, or by discrediting the data underlying the 

initial presumption . . . .’” Id. at 192 (citations omitted). At that point, the burden shifts 

back to the plaintiffs to “prove the alleged Clayton Act violation by a preponderance of the 

evidence.” Id.

The District Court Opinion first defined the relevant market. The court held that 

“the market for the sale of health insurance to national accounts is a properly drawn product 

market for purposes of the antitrust laws . . . .” Id. at 179; see id. at 195–202. The Court 

also held that Anthem Blue States constituted “a relevant geographic market for that 

product.” Id. at 179; see id. at 202–06. In reaching the latter conclusion, the District Court 
157

cited the effects of the Blues Rules, which it concluded “have a significant impact on the 

commercial conditions governing the sale of medical coverage to national accounts.”

310

For purposes of the market for national accounts headquartered in the Anthem Blue 

States, the District Court found that the DOJ had established a prima facie case by showing 

that the Merger would create a “high level of concentration” that was “presumptively 

unlawful.” Id. at 179; see id. at 206–12. The District Court also found that the defendants 

rebutted the DOJ’s prima facie case by introducing evidence that showed that the Merger 

would promote competition, including evidence showing the existence of competition 

between health insurers, customer sophistication and bargaining, new market entrants and 

competitors, and innovation. Id. at 213–15. The District Court therefore had to determine 

based on the totality of the circumstances whether the Merger was likely to substantially 

lessen competition. Id. at 215.

The District Court found that the Merger would have the anticompetitive effect of 

“eliminating direct competition” for national accounts between Anthem and Cigna in the 

 

310 Id. at 179. Anthem disputed whether those were the proper markets, but the 

District Court explained that its findings were supported by “how Anthem conducts its 

business on a day to day basis.” Id. at 203. The Blues Rules gave Anthem an exclusive 

territory, barred other Blues from pursing national account customers within Anthem’s 

territory, and prohibited Anthem from competing for customers headquartered outside its 

fourteen states without obtaining a “cede” (meaning permission) from the Blues licensee 

in that state. Id. at 189, 203; see id. at 210 (describing “the Blue network” as “an integral 

part of Anthem’s ability to win and woo national accounts and the source of Anthem’s 

greatest competitive strength: its discounts”); id. (“The evidence shows that Anthem and 

the other Blues work together to win national business.”); id. (“It is the combination of 

Blue networks that enables Anthem’s customers to obtain a single national network for 

their employees.”).
158

Anthem Blue States by “reducing the number of national carriers from four to three . . . .”

Id. at 216. As part of its defense, Anthem attempted to show that Cigna was not its closest 

competitor among the other national carriers, but the District Court rejected that 

characterization as “beside the point,” explaining that “the acquired firm need not be the 

other’s closest competitor to have an anticompetitive effect.” Id. The District Court found 

that “[t]he evidence in this case, including Anthem records and testimony from Anthem 

witnesses, firmly establishes that United, Cigna, Aetna, and the Blues compete against each 

other for national accounts, and that together, they dominate the market.” Id. Anthem also 

tried to show through its expert that Anthem and Cigna did not compete to a significant 

degree, but the District Court found that “Anthem’s ordinary course documents tell a 

consistent story that contravenes the firm’s litigation position” and which showed that 

“Anthem unquestionably competes directly and aggressively against Cigna for national 

accounts.” Id. at 219. The District Court found that the Merger would eliminate Cigna as a 

competitor and that “reducing the number of national carriers from four to three is 

significant.”

311 The District Court also found that the sophistication and bargaining power 

 

311 Id. at 220; accord id. at 203 (“[R]ight now, Anthem competes directly against 

Cigna for national accounts in the fourteen states at the very least, and . . . the merger would 

eliminate Cigna as a direct competitor there.”).

In passing, the District Court observed that although it was not determining whether 

the Merger would affect competition for national accounts outside the fourteen Anthem 

Blue States, there were reasons to think that competition in those areas also might be 

diminished:

It was also established that there are important aspects of Blue Cross Blue 

Shield Association membership—in particular, the mutuality and 

cooperation involved in the cedes, the potential for Blue card revenue, and 
159

of national account customers would not offset the anticompetitive effects; that new 

entrants would not compete effectively in the relevant market with NewCo; and that other 

means of servicing national account customers, such as by slicing business, were not a 

viable solution. See id. at 221–29.

The District Court separately found that the Merger would reduce innovation in the 

Anthem Blue States. Id. at 180, 229–31. Citing Cordani’s testimony, the District Court 

found that “because its provider discounts were not as strong as other carriers’ discounts, 

particularly those offered by Anthem and the Blues, Cigna has relied upon innovation to 

compete, directing its focus on ways to improve member health and employer cost 

outcomes.” Id. at 230. “Cigna’s innovation in the market, in turn, spurred even those 

carriers with strong provider discounts to improve their products.” Id. at 231–32. By 

eliminating Cigna as a separate competitor in the Anthem Blue States, the Merger also 

would eliminate this source of innovation. 

In response, Anthem contended that “any anticompetitive effects will be outweighed 

by the efficiencies [that the Merger] will generate.” Id. at 181. As “the centerpiece of its 

defense,” Anthem cited the medical cost savings that NewCo’s national account customers 

 

the best efforts rules—that redound to the benefit of the Association as a 

whole, and that these give rise to an inherent conflict of interest that could 

affect Cigna’s competitive conduct in the 36 states.

Id. at 220 n.22. By contrast, the District Court rejected the argument that there would be 

coordination between Cigna and the non-Anthem Blues after the Merger, finding that the 

plaintiffs had not met their burden to prove that the Merger would result “in a greater risk 

of collusion or coordination.” Id. at 231 n.28.
160

would receive. Anthem contended that the Merger would achieve a total of $2.4 billion in 

savings: Cigna’s customers would save approximately $1.5 billion by accessing the more 

favorable rates that Anthem has negotiated with its provider network, see id. at 212–13, 

and Anthem’s customers would save approximately $874 million by accessing services for 

which Cigna had obtained lower rates, see id. at 233–34. Anthem also cited “substantial 

general and administrative (‘G & A’) cost savings” that the Merger would achieve. Id. at 

181.

The District Court noted in passing that the Supreme Court of the United States has 

yet to recognize an efficiencies defense and has stated that “[p]ossible economies cannot 

be used as a defense to illegality” under the Clayton Act. Id. at 235 n.33 (quoting FTC v. 

Procter & Gamble Co., 386 U.S. 568, 579 (1967)). But several circuit courts and district 

courts, including the DC Circuit Court and its trial courts, had considered evidence of 

efficiencies, and the District Court therefore credited Anthem’s argument that they should 

be considered. Id. at 235–36. The District Court, however, noted, “The law is clear that a 

defendant must both substantiate any claimed efficiencies and demonstrate that they are 

‘merger-specific,’ which means that it must show that the savings cannot be accomplished 

by either company alone in the absence of the proposed merger.” Id. at 181; see id. at 236–

37. 

The District Court found that the claimed medical cost savings were not mergerspecific. Id. at 237. In the only ruling that would be reversed on appeal, the District Court 

noted that “Anthem and Cigna have already obtained the provider discounts alone.” Id. at 

181; see id. at 238. Therefore, the Merger was not necessary to achieve them. 
161

The District Court also found it plain that “the companies do not have to merge for 

customers to be able to access Anthem’s lower provider rates,” which provided the bulk of 

the efficiencies. Id. at 181. This was because “any customers that value the discounts above 

other aspects of the contractual arrangement can choose Anthem as their carrier today.”

Id.; see id. at 238. The District Court separately found that Anthem’s principal method for 

achieving the savings—convincing Cigna customers in the Anthem Blue States to move 

from Cigna products to Anthem products—did not result in merger-specific efficiencies 

because it was “no different from Anthem’s ongoing marketing of its products on a daily 

basis.” Id. at 181; see id. at 239. 

In evaluating whether to credit the claimed efficiencies that Cigna’ customers would 

receive, the District Court found that because of NewCo’s need to comply with the 2/3 

Rule, rebranding would be NewCo’s principal strategy. Id. at 239–40. Anthem witnesses 

had testified that the opportunity to purchase an Anthem product was a pro-choice 

opportunity that could be accomplished “by offering such an attractive Anthem product 

that Cigna customers would choose to switch, or by simply declining to renew existing 

Cigna contracts.” Id. at 241. The District Court noted that if Anthem chose not to renew 

existing Cigna contracts, then those customers would not have a choice. Id. The District 

Court also cited testimony from Cordani, which “cast doubt on whether there would be 

much value to the choice if it were offered” because “the only way a client of Cigna, current 

client of Cigna, would get access to the improved medical costs of NewCo is to migrate 

the business to a Blue Cross offering.” Id. The District Court concluded that “[t]hus, a large 

portion of the projected $1.5 million of Cigna customer medical cost savings is attributable 
162

to the planned transfer of existing Cigna customers to the Anthem brand to comply with 

the best efforts rules, and since rebranding cannot be considered to be merger-specific, 

those dollars should not have been included” in the claimed efficiencies. Id. at 241. 

Having concluded that the medical cost savings were not merger-specific, the 

District Court next analyzed whether they were achievable. Anthem argued to the District 

Court that it could deliver the savings by triggering the affiliate clauses in its contracts with 

providers. The District Court correctly inferred that Anthem was unlikely to trigger the 

affiliate clauses because doing so would not help Anthem comply with the 2/3 Rule. 312

Assuming that Anthem exercised the affiliate clauses, the District Court questioned 

whether the efficiencies were achievable because Anthem’s providers might terminate their 

agreements rather than extend their lower fee schedules to Cigna’s customers. On this 

point, the District Court again cited Cordani’s testimony, this time for the proposition that 

“Anthem’s predicted cost savings are unreliable in part because they are based on an 

unproven assumption that providers will not react and renegotiate their fee schedules 

upwards.” Id. at 243. The same problem would exist if Anthem attempted to negotiate with 

its providers to establish lower rates. Renegotiation also would take time, meaning that the 

efficiencies might take years to be realized. Id. at 243–44.

 

312 Id. at 182–83; see id. at 233, 244–45. As noted previously, Anthem’s witnesses 

in the Antitrust Litigation implied that Anthem had not yet determined whether NewCo 

would exercise the affiliate clauses. At the end of April 2016, the Anthem ELT 

unanimously determined not to trigger the affiliate clauses. See Part II.I.3, supra. That 

decision was not set in stone, and Anthem could have revisited it, but Anthem was not fully 

candid with the DOJ or the courts in pressing its argument about the affiliate clauses. 
163

The District Court also noted that Cordani had described Anthem’s cost savings 

estimates as “‘narrow-minded’ and ‘incomplete’” because they did “not factor in 

utilization.” Id. at 244. The District Court observed that Cigna’s counsel had crossexamined Anthem’s expert on the same issue:

Despite the fact that he was testifying as the defense expert, Dr. Israel was 

subjected to a not particularly friendly cross examination conducted by 

counsel for Cigna. . . . . This unusual exercise underscored that the expert’s 

analysis of Anthem’s cost advantage was based strictly on Anthem’s fee 

schedules and that it did not take into account any savings generated by the 

reductions in utilization that result from Cigna’s collaborative approach.

Id. at 244 n.46 (quoting from cross-examination). 

Having cited difficulties verifying that Cigna’s customers could access Anthem’s 

rates, the District Court noted that “the record is devoid of plans specifying what method 

could be employed to enable existing Anthem members . . . to enjoy any existing superior 

Cigna discounts.” Id. at 244. Cigna’s provider agreements did not contain affiliate clauses, 

and if they did, the Blues Rules would prevent Anthem from invoking them. Id. at 244–45.

The District Court noted that some of Cigna’s discounts were obtained as a means of 

supporting collaborative, making it unlikely that the same providers would extend their 

rates to NewCo. Id.

The District Court then turned to the hostility between the two parties, which it 

concluded undermined the likelihood that the efficiencies could be achieved. In the 

introduction to its opinion, the District Court had referred to this issue as “the elephant in 

the courtroom” and cited “the doubt sown into the record by Cigna itself.” Id. at 183.

In this case, the Department of Justice is not the only party raising questions 

about Anthem’s characterization of the outcome of the merger: one of the
164

two merging parties is also actively warning against it. Cigna officials 

provided compelling testimony undermining the projections of future 

savings, and the disagreement runs so deep that Cigna cross-examined the 

defendants’ own expert and refused to sign Anthem’s Findings of Fact and 

Conclusions of Law on the grounds that they “reflect Anthem’s perspective”

and that some of the findings “are inconsistent with the testimony of Cigna 

witnesses.” Anthem urges the Court to look away, and it attempts to 

minimize the merging parties’ differences as a “side issue,” a mere “rift 

between the CEOs.” But the court cannot properly ignore the remarkable 

circumstances that have unfolded both before and during the trial.

Id. The District Court summarized the state of the parties’ integration efforts and its effect 

on the verifiability of merger-related efficiencies as follows:

The documentary record and the testimony reflect that the pre-merger 

integration planning that is necessary to capture any hoped-for synergies is 

stalled and incomplete. Much of the work has not proceeded past the initial 

stage of identifying goals and targets to actually specifying the steps to be 

taken jointly to implement them. Moreover, the relationship between the 

companies is marked by a fundamental difference of opinion over the effect 

the Anthem strategy to impose lower rates on providers and move members 

away from Cigna’s network will have on the collaborative model of care that 

is central to the Cigna brand. Both Cigna witnesses and providers have 

testified that effective collaboration requires more of the physicians and 

hospitals, and they expect to be paid for it, and the engage with members to 

improve behaviors that can affect wellness requires an investment of 

resources on the part of the insurer. All of this raises serious questions about 

when, how, and whether the medical savings can be achieved whether the 

G&A savings can be verified, and whether there is any basis in the record to 

believe in the rosy vision being put forward by Anthem of a new national 

carrier that delivers the Cigna product at the Anthem price.

Id.

Returning to this issue later in the opinion, the District Court observed that 

“Anthem’s internal documents make it clear that the [integration] effort has not yet 

proceeded from general ‘high level’ planning to the essential progress of detailing actual 

strategies and ‘budget level’ initiatives,” that “Cigna’s input is required before the real 
165

work can be done,” and that “the two parties have not been working together for some 

time.” Id. The District Court then summarized the problems that began in December 2015, 

when Cordani and Cigna responded to Swedish’s effort to begin interviewing candidates 

for the L2 and L3 roles by withdrawing from integration planning. 

The record contains compelling evidence of the deterioration of the merging 

parties’ relationship. On December 29, 2015, five months after the two firms 

publicly announced their plans to combine, Joe Swedish voiced a series of 

complaints to David Cordani and Cigna. In an email in early March, he 

reiterated his concerns that the companies were not yet aligned. Cigna 

responded with its objections to Anthem’s proposals for the new company’s 

organization and management structure, and by April 2016, Cigna’s 

disengagement was so complete that Anthem established an independent 

team to proceed with integration planning on its own. Meanwhile the two 

companies through counsel, began to exchange increasingly heated letters 

accusing the other of being the first to breach the terms of the merger 

agreement.

All of these circumstances impair the Court’s ability to credit the total 

estimated network cost savings and G&A efficiencies. Anthem’s former 

CFO . . . testified that having the leadership in place is fundamental to 

undertaking an integration, but the two firm here have not yet agreed on the 

identity of a single member of the new company’s management structure 

beyond naming the “NewCo” President . . . and CEO . . . . And even that 

basic allocation of authority has not been fully negotiated; the parties have 

been at odds since March 2016 over Swedish’s proposed diminution of 

Cordani’s span of control. 

What’s more, Anthem’s own leadership has predicted that given these 

circumstances, it may be extremely difficult to get back on track. . . . So 

Anthem is hard pressed to argue that a green light from the Court will be 

sufficient to cure the problems caused by the disruption in the integration 

effort.

Id. at 246. The District Court cited “the highly unfinished nature of the planning to capture 

the G&A efficiencies in particular” and noted that “the final quantification of the synergies, 

the development of detailed implementation plans, and the establishing of an 
166

organizational structure remain in abeyance.” Id. The District Court also cited the absence 

of a detailed plan for achieving the medical cost savings for Cigna customers and the lack 

of anything more than a general plan for coming into compliance with the 2/3 Rule. Id. at 

247. 

The District Court then returned to the problem of convincing providers to engage 

in the collaborative efforts required by Cigna’s programs if they were forced to accept 

Anthem’s lower rates. Id. Here again, the District Court cited Cordani’s testimony:

The testimony of the CEO of Cigna, David Cordani, inflicted significant 

damage on the synergies defense when he advanced his opinion that both 

rebranding Cigna customers and imposing lower fee structures would 

unravel the collaborative relationship with providers that are essential to 

accountable care and better clinical outcomes. Cordani Tr. 492–93.

Cordani explained that given the rate and the amount that healthcare costs 

have been rising, the healthcare industry recognized that it had to change. In 

his view, the approach could not be limited to lowering the cost of care when 

a patient got sick—the effort had to be refocused on encouraging and 

sustaining health. . . . Cigna has endeavored to differentiate itself and become 

more competitive with a two-sided model that engages both the customer and 

the provider . . . , and Cordani maintained that replacing an old structure of 

remuneration based on volume with a new structure of value based care 

requires working closely with providers to be sure that the risk is shared and 

both parties’ incentives are aligned.

Id. 

Again citing Cordani’s testimony, the District Court discussed how rebranding 

Cigna’s lives would hurt Cigna’s collaborative model. 

Cordani voiced concerns that a post-merger Blue Bias strategy to rebrand 

Cigna lives—especially if it included lives outside the fourteen states as part 

and parcel of the rebranding of their employers headquartered within the 

fourteen states, would reduce the volume Cigna could bring to its providers. 

This would, according to Cordani, “dramatically unwind” Cigna’s 

collaborate relationships, and rapidly destroy the Cigna value proposition, 
167

diminishing Cigna’s prospects for growth in the non-Anthem states and 

weakening its offerings to existing customers. It would also diminish Cigna’s 

ability to innovate.

Id. at 248 (citing Cordani Tr. 492–93). The District Court found that “[e]ven if one 

discounts the Cordani testimony in recognition of the fact that a certain amount of 

marketing, along with some posturing for potential breach litigation, was on display on the 

part of both companies in the courtroom, it becomes clear when one considers the entire 

record . . . that people ‘like something Cigna offers.’” Id. at 249. Returning to Cordani’s 

testimony for support, the District Court rejected the idea that Anthem could make the 

Cigna product available to customers at an Anthem price as “an oversimplification that is 

not supported by the evidence.” Id. (citing Cordani Tr. 437). 

Finally, the District Court questioned “whether Anthem’s ability to drive a hard 

bargain with providers by virtue of its size” even could be “characterized as an 

‘efficiency.’” Id. at 181. The opinion noted that NewCo would sell ASO plans to most of 

its customers. The District Court saw “no evidence that the claimed network savings 

[would] rise because of the cost of what the merged firm produces, and what it sells in the 

relevant market, will go down.” Id. Instead, NewCo would have the market power to force 

providers to accept lower fees for their services. See id. at 182. The District Court expressed 

concern that the claimed efficiencies resulted from market concentration, rather than

competition. Id. The court also noted that “Anthem’s own documents reveal that the firm 

has considered a number of ways to capture the network savings for itself and not pass 

them through to its customers as it insisted to the court that it would.” Id.
168

The District Court reached similar conclusions regarding the market for large 

employers in Richmond, Virginia. Id. at 254. The DOJ presented substantial evidence of 

market concentration, and “Anthem witnesses did little to refute these undeniable 

statistics.” Id. at 258. The District Court did not rely on any testimony from Cordani in this 

section of its opinion. The District Court cited evidence from only two Cigna witnesses, 

and only did so when defining the relevant market. Id. at 255.

N. Anthem Appeals.

On February 9, 2017, Zielinski told Jones that Anthem was filing an appeal and 

would seek an expedited schedule. He asked Jones whether Cigna would join in the appeal. 

Jones responded that “until we have had an opportunity to receive and review with counsel 

the full decision, we believe that it is premature and imprudent to take any action.”

JX 2851.

Later that day, Anthem filed its notice of appeal. PTO ¶ 200. Anthem 

simultaneously issued a press release announcing the appeal and stating that it would 

“request an expedited hearing of its appeal to reverse the Court’s decision so that Anthem 

may move forward with the merger . . . .” JX 2841.

Cigna did not join in the appeal. Cigna issued its own press release, which stated, 

“Cigna intends to carefully review the opinion and evaluate its options in accordance with 

the merger agreement.” PTO ¶ 200. On February 11, 2017, the Cigna Board reaffirmed its 

earlier decision to terminate the Merger Agreement and authorized the Cigna ELT to 

“send[] notice of termination to Anthem and fil[e] litigation to assert the Corporation’s 

rights under the Merger Agreement.” JX 2860.
169

On February 13, 2017, Anthem asked the DC Circuit Court to consider its appeal 

on an expedited basis and filed its opening brief on the same day. PTO ¶¶ 201, 205. Cigna 

did not join Anthem’s papers. Jones Tr. 2898, 2900.

O. This Litigation

On February 14, 2017, Cigna delivered notice that it was terminating the Merger 

Agreement under Section 7.1(b) because the Merger had not been consummated on or 

before the original Termination Date of January 31, 2017. Cigna claimed that Anthem’s 

notice extending the Termination Date until April 30, 2017, was invalid because Anthem 

had not complied with its contractual obligations. JX 2872. Cigna simultaneously filed suit 

in this court, seeking a declaratory judgment that it could terminate the Merger Agreement, 

recover the Reverse Termination Fee, and obtain damages for breach of contract. 

Later that day, Anthem filed suit in this court seeking a temporary restraining order 

that would block Cigna from terminating the Merger Agreement. Anthem contended that 

Cigna did not have a right to terminate because Anthem validly extended the Termination 

Date. Anthem also argued that Cigna could not terminate because Cigna breached its 

contractual obligations under the Merger Agreement. Dkt. 226 at 67. Anthem contended 

that it would suffer irreparable harm if Cigna were permitted to terminate the Merger 

Agreement and thereby to jeopardize Anthem’s prospects for appeal. The DOJ already was 
170

arguing that the DC Circuit Court should not expedite Anthem’s appeal because Cigna had 

terminated the Merger Agreement and rendered the appeal moot.313

On February 15, 2017, this court entered a temporary restraining order that blocked 

Cigna from terminating the Merger Agreement. The court directed the parties to engage in 

expedited litigation in anticipation of a hearing to determine whether the temporary 

restraining order would be converted into a preliminary injunction that would keep the 

Merger Agreement in place pending a final decision on the merits.314

With the Merger Agreement still in place, the DC Circuit Court expedited Anthem’s 

appeal. JX 2886. On February 17, 2017, Cigna finally filed its own appeal from the District 

Court’s decision, which was consolidated with Anthem’s. JX 3096. In support of its appeal, 

Cigna filed a five-page brief. It repeatedly asserted a single substantive statement: “In 

accordance with the merger agreement, Cigna has appealed, and defers to Anthem.”

315

Anthem’s antitrust counsel described Cigna’s filing as “probably worse than nothing 

because it signal[ed] a lack of interest in getting relief.” Curran Tr. 1481.

While these efforts were underway, Donald Trump took office. Anthem reached out 

to members of the new administration, including Jeff Sessions, the new Attorney General. 

 

313 JX 2877 at ’504. Jones sent the DOJ’s opposition to Teneo, writing, “In case you 

did not see—this is very good.” Id. 

314 See PTO ¶ 203; Dkt. 74 at 45, 48–49.

315 JX 2894 at 6. Jones testified that Cigna “tried as best we [] could to support 

Anthem in . . . whatever arguments they were making on appeal.” Jones Tr. 1602–03. Given 

that Cigna did not make any arguments in support of the appeal, that testimony was not 

persuasive. 
171

Anthem also contacted the DOJ to re-open settlement discussions. The DOJ declined to 

engage. Anthem then opened up a line of communication with Vice President Mike 

Pence.316

Cigna and Teneo continued to try to sabotage Anthem’s efforts. After seeing a news 

report about Anthem’s efforts to engage with the Trump administration to salvage the deal, 

Teneo’s CEO instructed Cohen to work with contacts at a lobbying firm to “kill this 

immediately.”

317

P. The DC Circuit Court Decision

The DC Circuit Court issued its decision on April 28, 2017. The DC Circuit Court 

affirmed the District Court’s decision in a majority opinion authored by Circuit Judge 

Judith W. Rogers and joined by Circuit Judge Patricia Ann Millett (the “Majority”). ThenCircuit Judge Brett Kavanaugh wrote a lengthy dissent (the “Dissent”). Judge Millett wrote 

a concurring opinion that amplified her reasoning on some of the issues raised by the 

Dissent.

Anthem’s appeal focused only on a subset of the issues addressed in the District 

Court Opinion. The Majority noted that, based on Anthem’s arguments, 

It is undisputed that the government met its burden to demonstrate a highly 

concentrated post-merger market, which would be reduced from four to just 

three competing companies. Anthem also does not dispute the definition of 

the national accounts market, nor that such a market will be even more highly 

 

316 See JX 2862; JX 2903; JX 2912; JX 2914.

317 See JX 2914; Cohen Tr. 2463–65; see also JX 2890 (Teneo trying plant stories 

with reporters who would write that the Blues Association was “monopolistic.”).
172

concentrated post-merger. Anthem’s appeal instead hinges on the district 

court’s treatment of its efficiencies defense.

855 F.3d at 353 (emphasis added). 

Like the District Court, the Majority questioned whether efficiencies could be used 

to justify the Merger, observing that notwithstanding “widespread acceptance the potential 

benefit of efficiencies as an economic matter, it is not at all clear that they offer a viable 

legal defense to illegality under Section 7.” Id. at 353 (citation omitted). Like the District 

Court, the Majority observed that in Procter & Gamble, the Supreme Court of the United 

States held that “[p]ossible economies cannot be used as a defense to illegality.” Id. 

(citations omitted). The Majority explained that no matter what may be the more-accepted 

view of efficiencies today, “the Supreme Court held otherwise, and no party points to any 

subsequent step back by the Court.” Id. (citation omitted). Responding to the Dissent’s 

argument that Procter & Gamble was old law and no longer controlling, the Majority 

explained that none of the Dissent’s authorities explicitly or implicitly suggested that the 

Supreme Court had overruled Procter & Gamble. Id. at 354.

The Majority then acknowledged that “[d]espite the clear holding of [Procter & 

Gamble], two circuit courts, and our own, have subsequently recognized the use of 

efficiencies evidence in rebutting a prima facie case.” Id. The Majority noted that none of 

the decisions had relied on efficiencies to permit an otherwise anticompetitive merger to 

proceed. Id. The Majority interpreted these decisions as recognizing only that “evidence of 

efficiencies could rebut a prima facie showing, which is not invariably the same as an 

ultimate defense to Section 7 illegality.” Id. The Majority thus read the precedents as 
173

consistent with the rule that “once it is determined that a merger would substantially lessen 

competition, expected economies, however great, will not insulate the merger from a 

[S]ection 7 challenge.” Id. (citation and internal quotation marks omitted). 

Although the Majority’s reasoning suggested that efficiencies could not be used to 

justify the Merger as a matter of law, the Majority did not reach that holding. Instead, the 

Majority held that “this court, like our sister courts, can simply assume the availability of 

an efficiencies defense to Section 7 illegality because Anthem fails to show that the district 

court clearly erred in rejecting Anthem’s efficiencies defense.”

318 The Majority also found 

it unnecessary to decide whether the type of “redistributional savings” that Anthem claimed 

were cognizable as efficiencies, but noted that “those other issues pose potentially 

substantial additional obstacles to this merger.” Id. at 356.

The Majority instead held that the District Court had not clearly erred “in rejecting 

Anthem’s purported medical cost savings as an offsetting efficiency.” Id. at 355. The 

Majority also held that “the efficiencies defense failed” because once non-cognizable 

efficiencies were eliminated, “the amount of cost saving that is both merger-specific and 

verifiable would be insufficient to offset the likely harm to competition.” Id. at 355–56.

Like the District Court, the Majority started from the premise that efficiencies must 

be “merger-specific, meaning that they cannot be achieved by either company alone.” Id. 

 

318 Id.; see id. (“[P]rudence counsels that the court should leave for another day 

whether efficiencies can be an ultimate defense to Section 7 illegality. We will proceed on 

the assumption that efficiencies as presented by Anthem could be such a defense under a 

totality of the circumstances approach.”).
174

(citation and internal quotation marks omitted). The Majority described “[t]he crux of 

Anthem’s argument” as “the theory that the combined company will allow Anthem to 

create a ‘new product’ that is ‘unavailable on the market today’” and which “features both 

‘Cigna’s customer-facing programs’ and Anthem’s ‘generally lower . . . rates.” Id. Anthem 

argued that it could achieve this result through rebranding, but the Majority cited evidence 

in the record that supported the District Court’s finding that in the short term, rebranding

simply would mean offering Anthem products to Cigna customers. Id. at 357. It was only 

“over the long haul” that rebranding “might result in a former Cigna customer obtaining 

some semblance of the former Cigna product at the new Anthem rate.” Id. Any short-term 

switching of Cigna customers to Anthem products was therefore “just more successful 

marketing of the existing Anthem product” and not a merger-specific efficiency. Id.

On the question of whether the Merger would permit Anthem to roll out an 

improved, Cigna-like product over the long haul, the Majority agreed with the District 

Court that “the evidence offered by Anthem is woefully insufficient to show that it cannot 

develop better customer-facing programs” on it its own. Id. Two Anthem witnesses 

testified that Anthem had encountered difficulty replicating Cigna’s products “for reasons 

unknown.” Id. The witnesses “did not indicate how intensive the effort has been, how many 

hours were devoted to it, or how much money Anthem has allocated toward it.” Id. The 

Majority concluded that “rebranding does not create a merger-specific benefit in either the 

short- or long-term.” Id. at 358; accord id. at 365 (“Those who rebrand with Anthem will 

see no merger-specific savings.”).
175

The Majority suggested that Anthem potentially could have created “some brief, 

interim benefit in the mid-term by integrating Cigna’s product faster than it could develop 

a comparable product of its own,” but the Majority found that Anthem failed to make the 

necessary factual showing. Anthem “offered no evidence to show how long it would take, 

once the necessary resources were allocated, to develop an improved product. Nor has it 

shown how long it would take to roll out a hybrid Anthem-Cigna product.” Id. at 358. The 

Majority cited Matheis’s trial testimony indicating that Anthem “might not be able to do 

so within two-and-a-half years.” Id.

Out of the $2.4 billion in medical cost savings that Anthem claimed the Merger 

would achieve, the Majority noted that $1.517 billion resulted from Cigna members 

accessing Anthem’s rates. Without a viable mechanism for delivering those efficiencies, 

the posited savings were not achievable. The Majority regarded rebranding as “the linchpin 

of Anthem’s post-merger strategy, because it is the only option that helps Anthem comply 

with its ‘Best Efforts’ obligations” under the Blues Rules. Id. But rebranding did not 

generate merger-specific savings, and as a result, “the inability to credit rebranding savings 

seriously undermine[d] Anthem’s efficiency defense.” Id.

The Majority, however, disagreed with the District Court’s conclusion that “none 

of the medical cost savings are merger-specific because they are based on an application 

of rates that each of the Company has already achieved on its own.” Id. The record showed 

that Cigna had been unable to match Anthem’s rates, so “a true Cigna product at Anthem 

rates would not be achievable absent the merger.” Id. Thus, although the District Court was 

correct to find that customers shifting to an Anthem product did not give rise to merger-
176

specific efficiencies, the Majority found that the District Court “clearly erred in finding 

that the application of Anthem rates to customers that choose to remain with Cigna is not 

merger-specific.” Id. at 359. In other words, if Anthem had triggered the affiliate clauses 

to extend its rates to Cigna products, then those medical cost savings would have been 

merger-specific, and if NewCo had renegotiated any of Cigna’s rates to achieve greater 

discounts for Cigna’s products, then those medical cost savings would have been mergerspecific.

The District Court’s error, however, was “immaterial” because the medical savings 

as a whole were “not sufficiently verifiable.” Id. Anthem claimed that it could achieve the 

savings using three mechanisms: (i) exercising the affiliate clauses to require Anthem’s 

providers to extend their rates to Cigna customers, (ii) renegotiating provider contracts, and 

(iii) moving Cigna customers to Anthem products. Id. The Majority agreed with the District 

Court’s finding that exercising the affiliate clauses was not a viable option for Anthem 

because of “the potential for provider discontent if the lower Anthem rates are forced on 

providers that must expend extra effort and resources to deliver the Cigna product.” Id. The 

Majority agreed with the District Court that some providers who were forced to accept 

lower Anthem rates would terminate their contracts or decline to renew them when they 

expired. Id. In support of this threat, the Majority cited Cordani’s testimony that “some 

providers will eventually ‘react [by] renegotiating . . . and putting upward pressure on rates, 

which has been a market force to date.’” Id.

The Majority also found that the District Court properly had rejected the affiliate 

clauses as a viable option because it would not help Anthem comply with the Blues Rules,
177

citing Matheis’s testimony that Anthem intended to rebrand the “lion’s share” of Cigna’s 

customers in the Anthem Blue States, and “widespread exercise of the affiliate clause[s]

would remove any incentive for Cigna customers to convert to Anthem because those 

customers would then be receiving the Cigna product at Anthem prices.” Id. The Majority 

observed that Anthem’s expert had assumed that the affiliate clauses could be used to

deliver 80% of the anticipated efficiencies—an assumption that was contrary to the facts.

The Majority similarly found that the District Court properly had rejected 

renegotiation as a viable option, explaining that if Anthem could not cause providers to 

extend their lower rates to Cigna under the affiliate clauses—when the providers would be 

contractually required to do so—“then it is speculative that Anthem could get them to agree 

to do the same thing through negotiations absent compulsion.” Id. at 360. Anthem and its 

expert had assumed that renegotiation would result in providers accepting Anthem’s lower 

rates, but the Majority regarded that assumption “as questionable in the case of a provider 

that has just terminated a contract because Anthem mandated, through an affiliate clause, 

the acceptance of those very rates.” Id. Here again, the Majority relied on Cordani’s 

testimony, noting that he had predicted that “renegotiation would put upward pressure on 

the Anthem rate, and to the extent Anthem were to adopt a take-it-or-leave-it approach, the 

provider could simply choose to walk away.” Id.

The Majority further found that the District Court properly had questioned “how 

long” any savings from renegotiation “would take to be realized.” Id. The Majority 

observed that “[t]he longer it takes for an efficiency to materialize, the more speculative it 
178

can be, so the district court was on solid ground to give less weight to the claimed 

renegotiation savings.” Id.

The Majority concluded that although renegotiation could lead to a decrease in 

Cigna’s rates, it was “farfetched” for Anthem and its expert to argue that “it will in every 

instance lead to the Anthem rate.” Id. On this point, the Majority quoted the District Court’s 

observation that “‘the Department of Justice is not the only party raising questions about 

Anthem’s characterization of the outcome of the merger’ because Cigna itself had 

‘provided compelling testimony undermining the projections of future savings.’” Id.

(quoting Dist. Ct. Op., 236 F. Supp. 3d at 182).

The Majority next explained that whatever mechanism Anthem planned to use to 

achieve the medical cost savings, the District Court had not erred by finding that the quality 

of the Cigna offering “‘will in fact degrade’ as a result of the merger,” quoting a snippet of 

Cordani’s testimony on which the District Court had relied. Id. (quoting Dist. Ct. Op., 236 

F. Supp. 3d at 251 (quoting Cordani’s testimony)). For customers who stayed with Cigna 

and accessed lower rates through contract renegotiation or affiliate clauses, the abrasion 

problem would arise “because providers would be asked to continue offering the hightouch collaborative Cigna service . . . for less money.” Id. at 361. The Majority cited 

Cordani’s testimony for the related point that “the value of the Cigna offering will be 

diminished because Anthem’s rebranding strategy will siphon business away from Cigna, 

leaving behind an atrophied Cigna customer base that is less attractive to providers,” which 

would “in turn diminish Cigna’s capacity for further renovation with its collaborative 

model.” Id. The Majority also saw a problem of provider abrasion for Cigna customers that
179

migrated to Anthem products because Anthem’s providers would be asked to offer “better, 

and more resource-intensive, collaborative service for the same rates they have historically 

received.” Id. The Majority therefore concluded that the District Court had not erred by 

finding it “‘dubious’ that Anthem would be able to offer a true Cigna-like product, or that 

legacy Cigna would be able to maintain the quality of its own product.” Id. (citing Dist. Ct. 

Op., 236 F. Supp. 3d at 247). The Majority considered the resulting “threat to innovation”

to be “anticompetitive in its own right” and “neither answered by Anthem’s evidence nor 

offset by its purported efficiency of offering a degraded Cigna product at a lower rate.” Id.

The Majority next turned to the projected $874.6 million in savings that would be 

realized if Anthem’s customers could access superior rates that Cigna had negotiated. Id.

The Majority saw no evidence that Anthem’s customers could access these rates through 

rebranding or under an affiliate clause. The Blues Rules “would prohibit Anthem” from 

using the Cigna rates under an affiliate clause, and rebranding Anthem customers to Cigna 

“would only exacerbate Anthem’s ‘Best Efforts’ problem.” Id. Renegotiation would be the 

only way to achieve the projected savings for Anthem’s customers, but the Majority 

questioned how Anthem could achieve any incremental savings, noting that “Anthem, 

unlike Cigna, has already achieved whatever economies of scale are available.” Id. If Cigna 

had a better discount, it was due to factors other than patient volume, and the District Court 

“reasonably questioned whether those atypical discounts would remain available postmerger.” Id. at 362. The Majority therefore concluded that the District Court correctly had 

rejected as unverifiable the $874.6 million in efficiencies that ostensibly would come from 

delivering Cigna discounts to Anthem customers. Id.; see id. at 365 (“[T]he few [Cigna 
180

customers] that Anthem fails to rebrand will see far fewer savings than Anthem claims, 

due in large part to provider abrasion and big hospital systems that will stand their ground 

in renegotiation.”). 

Continuing, the Majority held that the District Court “rightly cast doubt” on the 

assumption made by Anthem’s expert that 98% of the medical cost savings would be 

passed through to Anthem’s customers. The Majority agreed that “[b]ecause ASO 

customers pay their employees’ medical costs directly, any reduction in medical rates 

would result in savings that automatically pass through,” at least “absent some 

corresponding price increase by Anthem.” Id. But the Majority noted that the District Court 

had cited evidence that Anthem was exploring ways to keep the savings for itself, and the 

Majority agreed that this evidence “corroborates rather than remediates anticompetitive 

concerns.” Id.

For the $619.8 million in projected medical cost savings from fully insured 

customers, the Majority found that “the estimated pass-through is even less likely given 

that the savings would automatically inure to Anthem’s benefit absent some corresponding 

price decrease to consumers.” Id. at 363. The Majority saw no evidence of any mechanism 

by which customers could learn about the savings, and thus could not seek to extract a 

share of them through a lower negotiated price. The Majority also saw no evidence as to 

when the renegotiation would occur, given that existing contracts would not pass through 

any savings. Id.

The Majority finally found that the District Court had not clearly erred in criticizing 

Anthem for failing “to account in its projected savings for utilization which is a signature 
181

aspect of the Cigna product.” Id. For the importance of utilization, the Majority relied on 

the following testimony by Cordani: “‘[I]f you’re looking [only at] a discount calculation, 

if [Anthem has a 2 percent lower discount for the emergency room savings, you would 

assume that’s a savings,’ unless Cigna’s wellness program helps the patient avoid the 

emergency room visit altogether.” Id. The Majority held that “the failure to account for 

utilization “undermined the district court’s confidence in the reliability and factual 

credibility of those savings calculations.” Id. The Majority also criticized Anthem’s 

projections as having used a different market definition than the District Court, meaning 

they were “unmoored from the actual market at issue.” Id. at 364. 

Although Anthem’s claimed efficiency figures “were without a doubt enormous,”

the Majority concluded that “those projections fall to pieces in a stiff breeze.” Id. Having 

considered “the totality of the circumstances,” the Majority held that the District Court 

“reasonably determined that Anthem failed to show the kind of extraordinary efficiencies 

that would be needed to constrain likely price increases in this highly concentrated market, 

and to mitigate the threatened loss of innovation.” Id. The Majority rejected the argument 

that the District Court was supposed to make a “dollar-for-dollar comparison” of 

efficiencies with anticompetitive effects, noting that such a rule would have required the 

District Court “to calculate, for instance, a more realistic pass-through rate than the rejected 

98% figure, or to estimate what percentage of the claimed $2.4 billion was attributable to 

customers with fewer than 5,000 employees.” Id. More generally, the Majority observed 

that “because the state of the science does not permit such refined showings, commentators 

have recommended simply giving the government the benefit of the doubt in a close case.”
182

Id. (citation and internal quotation marks omitted). For the Majority, the evidence on 

efficiencies meant that “this [was] not a close case.” Id.

The Majority also observed that Anthem had not meaningfully challenged the 

District Court’s “independent and alternative determination” that the Merger should be 

enjoined “on the basis of it anticompetitive effect in the Richmond, Virginia market for the 

sale of health insurance to ‘large group’ employers with more than fifty employees.” Id. at 

367. “There, the government’s prima facie case was even stronger than in the market for 

national accounts in the fourteen Anthem states.” Id. In response, Anthem challenged the 

District Court’s reliance on aspects of testimony by the DOJ’s expert, and the Majority 

held that the District Court had not clearly erred in relying on that testimony. See id. at 

367–68. The District Court also properly concluded that the Merger would have 

anticompetitive effects by giving NewCo’s control over 64% to 78% of an already 

concentrated market, with “two or three other companies fighting to maintain relevance.”

Id. at 368.

In its opinion, the Majority included an extensive section that responded to 

arguments advanced by the Dissent See id. at 364–66. Among other things, the Dissent 

criticized the Majority for ostensibly relying “on friction between the Anthem and Cigna 

CEOs” as undermining the efficiencies. Id. at 365. Retorting that it “did not so rely,” the 

Majority cited the opening footnote to its opinion, which stated,

Cigna has become a reluctant supporter of the merger, stating in its appellate 

brief that “[i]n accordance with the merger agreement Cigna has appealed 

and defers to Anthem.” Indeed, the district court noted the “elephant in the 

courtroom,” for at trial Cigna executives dismissed various of Anthem’s 

claims of savings, cross-examined the merging parties’ expert witness, and 
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refused to sign Anthem’s proposed findings of fact and conclusions of law. 

Anthem suggested this is a “‘side issue,’ a mere ‘rift between CEOs.’” That 

their relationship may have deteriorated has little to do with the 

anticompetitive effects of the proposed merger.

Id. at 348 n.1. 

Judge Millett filed a concurring opinion that largely responded to points raised by 

the Dissent. She stressed that the District Court properly had found that “even accepting 

all of Anthem’s claimed cost savings,” the Merger “would still have substantial 

anticompetitive effects.” Id. at 369. She observed that “to have any legal relevance, a 

proffered efficiency cannot arise from anticompetitive effects.” Id. As a result, the generic 

possibility that prices might go down as a result of the merger “proves nothing by itself,”

and she noted that NewCo’s medical cost savings could result from extracting price 

concession through anticompetitive behavior. Id. She also observed that whether any 

medical cost savings would be passed through to customers was “very much denied.” Id.

And she agreed with the District Court’s finding that decreased provider rates “would lead 

to an inferior health care product,” noting that “[p]aying less to get less is not an efficiency; 

it is evidence of the anticompetitive consequences of reducing competition and eliminating 

an innovative competitor in a highly concentrated market.” Id. at 370. She observed that to 

the extent the Dissent claimed there was overwhelming evidence that NewCo would 

deliver health care for less, “one half of this merger disagrees,” citing the District Court’s 

finding that Cigna was “actively warning against” the Merger. Id.

The Dissent diverged from the Majority (as well as from the District Court) by 

arguing at length that the federal courts were obligated to consider the value of efficiencies 
184

and balance them against any anticompetitive effects. See id. at 373, 375–77, 379. The 

Majority (like the District Court) had questioned whether Procter & Gamble permitted 

reliance on efficiencies to validate an otherwise anticompetitive merger. The Dissent 

asserted strongly that later decisions called for a balancing of procompetitive efficiencies 

against anticompetitive effects. Id.

Using this analytical framework, the Dissent concluded that the District Court had 

“clearly erred” by concluding that the Merger “would substantially lessen competition in 

the markets in which insurance services are sold to large employers.” Id. at 375. According 

to the Dissent, “the record convincingly demonstrates” that the Merger “would 

significantly reduce healthcare costs for the large employers that purchase insurance 

services from Anthem and Cigna” across all of the fourteen Anthem Blue States, including 

in the Richmond market. Id. at 375. From the Dissent’s perspective, those efficiencies 

outweighed the increased costs that customers might pay to the combined firm. Id.

Unlike the Majority (and the District Court), the Dissent expressed confidence that 

NewCo could generate efficiencies of $1.7 to $3.3 billion annually by obtaining reduced 

rates from healthcare providers. Id. at 374. The Dissent maintained that because Anthem 

and Cigna largely sold ASO policies to large employers who self-insured for the underlying 

costs, any savings from lower provide rates necessarily would be passed through to their 

employer-customers, resulting in customers capturing nearly all of these efficiencies. Id. at 

374, 380. The Dissent recognized that some portion of the provider savings would inure to 

fully insured plans and not necessarily be passed through, but the Dissent maintained that 

the savings passed through to self-insured employers “would still be at least $1.7 billion 
185

annually.” Id. The Dissent accepted that NewCo would charge its customers more as the 

price of delivering those savings, but it viewed the record as indicating that large employers 

would pay increased fees of $48 million to $980 million annually, far less than the $1.7 

billion in anticipated savings. Id. at 373.

Unlike the Majority, the Dissent did not credit arguments that the DOJ had advanced 

to question whether the efficiencies were verifiable. See id. at 380. The Dissent did not 

differentiate between the lower provider rates that would be generated by moving Cigna 

members to Anthem plans versus those resulting from moving Anthem members to Cigna 

plans; the Dissent viewed both types of synergies as resulting from “enhanced bargaining 

power [that] would come from the merger.” Id. at 373. The Dissent dismissed the idea that 

Anthem or Cigna could achieve the savings on their own as a “made-up notion.” Id. at 375. 

The Dissent rejected the DOJ’s argument that lower prices would degrade the quality of 

healthcare as “speculation and guesswork.” Id. at 374 n.1; accord id. at 380. The Dissent 

similarly rejected the argument that utilization could increase, undermining the savings 

projections, as “highly speculative” and a fear that “does not square with the record, which 

shows that current Anthem employer-customers have lower utilization rates than the 

current Cigna employer-customers.” Id.; accord id. at 380–91. Summarizing its view of 

the evidence, the Dissent wrote,

The majority opinion offers up a smorgasbord of reasons to think that 

provider rates would not be lower or would not really be passed through, 

ranging from provider “abrasion,” to secret Anthem plans to dramatically 

raise the fees it charges employers, to Anthem’s supposed inability to fore or 

negotiate with providers to obtain Anthem rates for Cigna customers, to 

friction between the Anthem and Cigna CEOs. All of that seems at best, 

highly speculative. The plural of anecdote is not data. Of course, lots of bad 
186

things could happen after the merger. But the courts have to assess what is 

likely.

Id. at 380. According to the Dissent, the Majority was “accepting the worst-case 

possibility.” Id. As the Dissent saw matters, “the overwhelming evidence of what is likely 

is that provider rates would go down, that the saving would be passed through to employers, 

and that the savings to employers would greatly exceed any increase in fees paid by 

employers.” Id.

The Dissent nevertheless agreed that if the increased provider savings resulted from 

NewCo exercising monopsony power in the provider market, then the medical cost savings 

could not be considered. Id. at 377. The Dissent proposed remanding the case to the District 

Court to rule on whether the medical cost savings would result from ordinary bargaining 

power or unlawful monopsony power. Id. at 378, 381.

Q. Anthem Terminates The Merger Agreement.

While the appeal was pending, the parties engaged in expedited litigation in this 

court in anticipation of a hearing on Anthem’s application for a preliminary injunction to

bar Cigna from terminating the Merger Agreement pending a final decision on the merits

in this action. The hearing took place on May 11, 2017, after the DC Circuit Court issued 

its opinion. In light of the DC Circuit Court’s ruling, this court denied Anthem’s 

application, holding that Anthem had not demonstrated a reasonable likelihood that the 

Supreme Court of the United States would issue a writ of certiorari and reverse the DC 

Circuit Court, which in turn made it futile to enjoin Cigna from terminating the Merger 

Agreement when the parties could not close with the District Court’s injunction in place. 
187

Dkt. 226 at 1314. This court stayed its decision to deny the application for a preliminary 

injunction and lift the TRO so that Anthem could pursue an expedited appeal to the 

Delaware Supreme Court. 

While this court was in the midst of issuing its ruling, Cigna hurriedly delivered a 

second notice of termination, again relying on Section 7.1(b) of the Merger Agreement. 

JX 2927. After the court stayed its ruling to permit Anthem to appeal, Cigna claimed that 

the notice had been inadvertent. JX 2930. Discovery proved that statement to be inaccurate. 

See Jones Dep. 1589–90. Consistent with Cigna’s behavior during other stages of the 

process, Cigna sought to get the jump on Anthem by issuing its termination notice while 

the court was in the midst of its ruling, then had to walk back its actions after the court 

stayed its decision. Because the TRO remained in effect when the notice was issued, Cigna 

violated the TRO by sending it.

On the morning of May 12, 2017, while the TRO remained in place, Cigna 

delivered a third notice of termination, again relying on Section 7.1(b) of the Merger

Agreement. JX 2928. Because the TRO remained in effect when the third notice was 

issued, Cigna violated the TRO by sending it. 

Several hours later, on May 12, 2017, Anthem notified this court that it would not 

appeal the denial of the preliminary injunction, causing the TRO to lift. Dkt. 206. Anthem 

simultaneously delivered a notice of termination to Cigna that relied on Section 7.1(i) of 

the Merger Agreement. JX 2929. 

With the Merger Agreement terminated, the Anthem Board began searching for a 

new CEO to replace Swedish. He resigned effective November 5, 2017. JX 2953.
188

In March 2018, Cigna announced that it was acquiring Express Scripts in a 

transaction valued at approximately $67 billion. JX 2958. Cordani became CEO of the 

combined company, and Cigna appointed a majority of the board. Cigna hired Teneo for 

the public relations work on the merger. Teneo did not solicit a single negative story about 

the deal. See Cohen Tr. 2461.319

R. This Litigation Proceeds To Trial.

Over the course of two years, the parties conducted discovery and prepared for trial. 

During discovery, Bain produced emails that showed Hocevar acting as a conduit for 

backchannel advice to Cordani about becoming CEO of NewCo. Cordani viewed the 

emails as having “created difficulties for us in the litigation.” JX 3099 at ’121. Hocevar 

had worked at Cigna for over sixteen years, was promoted at least five times, and ended up 

on the Cigna ELT as President, of Strategy, Segments, and Solutions. He was identified as 

one of a handful of possible successors to Cordani as CEO.320 Cordani waited until Hocevar 

had been deposed, then fired him.321

Trial took place from February 25 through March 4, 2019. After extensive post-trial 

briefing, post-trial argument took place on November 26, 2019. The court requested 

supplemental submissions on causation, which were filed on March 6, 2020. Shortly after 

those submissions were received, the novel coronavirus and the resulting COVID-19 

 

319 Cordani denied that Teneo worked on the Express Scripts deal. Cordani Tr. 2049. 

That testimony was not accurate. Cohen Tr. 2461.

320 See JX 715 at ’221; JX 3077 at ’663; Hocevar Tr. 2299–300, 2303–07.

321 See JX 2963; Hocevar Tr. 2304–06.
189

pandemic affected the court’s operations and delayed this decision. The preparation of this 

decision also required additional time given the magnitude of the record. As a result of 

these factors, this overly lengthy opinion was sadly too long delayed.

III. LEGAL ANALYSIS

Despite high-profile protagonists, a sprawling record, and billions of dollars in 

damages claims, this is a breach of contract case. Each side claims that the other breached 

its obligations under the Merger Agreement. All but one of the claims involve the Efforts 

Covenants. In the remaining breach of contract claim, Cigna contends that Anthem 

breached its contractual obligation to pay the Reverse Termination Fee. 

This decision begins by setting out the legal framework that governs a claim for 

breach of contract. It next describes the plain meaning of the Efforts Covenants and the No 

Injunction Condition. The decision then analyzes the parties’ claims for breach of the 

Efforts Covenants. It finally turns to Cigna’s claim for the Reverse Termination Fee.

A. The Legal Framework 

The Merger Agreement is a contract governed by Delaware law. See MA § 8.6(a). 

Delaware law accordingly governs the parties’ breach of contract claims.

“Under Delaware law, the elements of a breach of contract claim are: 1) a 

contractual obligation; 2) a breach of that obligation by the defendant; and 3) a resulting 

damage to the plaintiffs.” WaveDivision Hldgs. v. Millennium Digital Media, 2010 WL 

3706624, *13 (Del. Ch. Sept. 17, 2010). When determining the scope of a contractual 

obligation and measuring the parties’ conduct against that obligation to determine breach, 

“the role of a court is to effectuate the parties’ intent.” Lorillard Tobacco Co. v. Am. Legacy 
190

Found., 903 A.2d 728, 739 (Del. 2006). Absent ambiguity, the court “will give priority to 

the parties’ intentions as reflected in the four corners of the agreement, construing the 

agreement as a whole and giving effect to all its provisions.” In re Viking Pump, Inc., 148 

A.3d 633, 648 (Del. 2016) (internal quotation marks omitted). “Unless there is ambiguity, 

Delaware courts interpret contract terms according to their plain, ordinary meaning.” Alta 

Berkeley VI C.V. v. Omneon, Inc., 41 A.3d 381, 385 (Del. 2012). 

For the claims based on the Efforts Covenants, the complexity surrounds the issue 

of “a resulting damage.” See WaveDivision, 2010 WL 3706624, at *13. Put more plainly, 

the complexity involves the element of causation. Both sides seek damages measured by 

the benefits that they expected to receive from the completion of the Merger. Each side 

thus seeks damages resulting from the other side’s failure to perform at closing. The 

parties’ obligations to perform at closing were subject to the No Injunction Condition. The 

District Court enjoined the Merger from closing, and the DC Circuit Court affirmed that 

ruling, which caused the No Injunction Condition to fail. As a result, neither side become 

obligated to perform. 

To guide the analysis of causation in this setting, Delaware has adopted the 

framework set forth in the Restatement (Second) of Contracts. See Williams Cos. v. Energy 

Transfer Equity, L.P., 159 A.3d 264l 273 (Del. 2017); WaveDivision, 2010 WL 3706624, 

at *14-15. That framework recognizes that “[p]erformance of a duty subject to a condition 

cannot become due unless the condition occurs or its non-occurrence is excused.”

Restatement (Second) of Contracts § 225(1) (1981); accord id. § 235 cmt. b. But the 

framework also recognizes that “[w]here a party’s breach by non-performance contributes 
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materially to the non-occurrence of a condition of one of his duties, the nonoccurrence is 

excused.” Id. § 245. 

To establish that a party’s breach contributed materially to the non-occurrence of a 

condition, “it is not necessary to show that [the condition] would have occurred but for the 

lack of cooperation. It is only required that the breach have contributed materially to the 

non-occurrence.” Id. § 245 cmt. b. A breach “contributed materially” to the non-occurrence 

of a condition if the conduct made satisfaction of the condition “less likely.” WaveDivison, 

2010 WL 3706624, at *18. But “if it can be shown that the condition would not have 

occurred regardless of the lack of cooperation, the failure of performance did not contribute 

materially to its non-occurrence and the rule does not apply. The burden of showing this is 

properly thrown on the party in breach.” Restatement (Second) of Contracts § 245 cmt. b.

Under this framework, if the non-breaching party proves by a preponderance of the 

evidence that the breach contributed materially to the failure of the condition by making 

its satisfaction less likely, then the non-occurrence is excused, and the breaching parties’

obligations were due even if the condition was not satisfied. Id. §§ 225(1), 245. In those 

circumstances, the breaching party is liable for the failure to perform its obligations. Id.

§§ 235, 346. “When the non-occurrence of a condition of a duty is excused . . . the obligor 

is liable for the same damages for which he would have been liable had the duty originally 

been unconditional.” Id. § 225 cmt. c. But if the breaching party proves by a preponderance 

of the evidence that its breach could not have contributed materially to the non-occurrence 

of the condition because the condition would have failed regardless, then the breaching 

party is not liable in damages. Id.
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The Restatement includes helpful illustrations of these principles. One illustration 

shows how the failure of a condition can be excused, resulting in liability for the party 

whose conduct made the satisfaction of the condition less likely:

A contracts to sell and B to buy A’s rights as one of three lessees under a 

mining lease in Indian lands. The contract states that it is “subject only to 

approval by the Secretary of the Interior,” which is required by statute. B 

files a request for approval but A fails to support B’s request by giving 

necessary cooperation. Approval is denied and A cannot convey his rights. 

B has a claim against A for total breach of contract. A’s breach of his duty 

of good faith and fair dealing contributed materially to the non-occurrence 

of the condition, approval by the Secretary of the Interior, excusing it.

Id. § 245 cmt. a, illus. 4. A later illustration shows how a party can avoid liability, despite 

having made the satisfaction of the condition less likely:

The facts being otherwise as stated in Illustration 4, A shows that even if he 

had given his cooperation, the Secretary of the Interior would have withheld 

approval on other grounds. B has no claim against A for breach of contract. 

A’s breach of his duty of good faith and fair dealing did not contribute 

materially to the non-occurrence of the condition, and its non-occurrence is 

not excused.

Id. § 245 cmt. b, illus. 7. Avoiding liability thus requires a showing that even if the 

breaching party “had given his cooperation,” i.e., fulfilled its contractual obligations, the 

condition nevertheless would have failed “on other grounds.”

These rules only apply where the breaching party’s lack of cooperation in satisfying 

the condition “constitutes a breach, either of a duty imposed by the terms of the agreement 

itself or of a duty imposed by a term supplied by the court. There is no breach if the risk of 

such a lack of cooperation was assumed by the other party or if the lack of cooperation is 

justifiable.” Id. cmt. a. In the Restatement’s illustrations, the obligation to cooperate flowed

from the implied covenant of good faith and fair dealing, which is “a duty imposed by a 
193

term supplied by the court.” Id. In this case, the obligation to cooperate flows from the 

Efforts Covenants, which are duties “imposed by the terms of the agreement itself.” Id.; 

see id. cmt. b.

B. The Plain Meaning Of The Efforts Covenants And The No Injunction 

Condition

All but one of the claims in the case concern the Efforts Covenants and the No 

Injunction Condition. The language of these provisions is plain and unambiguous. 

1. The Reasonable Best Efforts Covenant

The Reasonable Best Efforts Covenant generally required that both parties use their 

reasonable best efforts to complete the Merger. In pertinent part, the provision stated,

Upon the terms and subject to the conditions hereof (including Section 

5.3(c)), each party will use its reasonable best efforts to take, or cause to be 

taken, all actions, to do, or cause to be done, all things reasonably necessary 

to satisfy the conditions to Closing set forth herein and to consummate the 

Mergers and the other transactions contemplated by this Agreement.

MA § 5.3(a). 

Under this provision, each side was obligated to “use its reasonable efforts” to 

accomplish two goals: (i) “satisfy the conditions to Closing set forth herein” and (ii) 

“consummate the Merger[].” Id. The first goal focused on the specific conditions to closing 

set forth in Sections 6.1, 6.2, and 6.3. The second goal addressed the Merger generally and 

committed the parties to work together to achieve its consummation. 

The mandatory requirement that “each party will use its reasonable best efforts” was 

“subject to the conditions hereof (including Section 5.3(c)).” MA § 5.3(a). That section 

stated,
194

Nothing contained in this Section 5.3 or in any other provision of this 

agreement shall be construed as requiring Anthem to agree to any terms or 

conditions that would 

(i) impose any limitation on Anthem’s ownership or operation of all 

or any portion of its or Cigna’s . . . business or assets or compel [Anthem] to 

dispose of or hold separate all or any portion of its or [Cigna’s] businesses or 

assets,

(ii) impose any limitations on the ability of Anthem to acquire or hold 

or to exercise full rights of ownership of Cigna Common Stock, 

(ii) impose any obligations on [Anthem] or [Cigna] in respect of or 

relating to [their] facilities, operations, places of business, employment 

levels, products or businesses, 

(iv) require [Anthem] or [Cigna] to make any payments or 

(v) impose any other obligation, restriction, requirement, limitation, 

qualification, condition, remedy or other action 

which, in the case of any such term or condition described in clauses (i) 

through (v) above, would have, or would reasonably be expected to have, 

individually or in the aggregate with all other such terms and conditions, a 

material adverse effect on Anthem, Cigna and their respective subsidiaries, 

taken as a whole, after giving effect to the Mergers, including the synergies 

expected to be realized from the Mergers. 

MA § 5.3(c) (the “Burdensome Condition Exception”). Under its plain terms, the 

Burdensome Condition Exception only protected Anthem. Cigna did not enjoy similar 

protection.

A “reasonable best efforts” obligation requires a party “to take all reasonable steps 

to solve problems and consummate the transaction.” Williams, 159 A.3d at 273. It does not 

require a party “to sacrifice its own contractual rights for the benefit of its counterparty.”

Akorn v. Fresenius, 2018 WL 4719347, at *91 (Del. Ch. Oct. 1, 2018), aff’d, 198 A.3d 724 

(Del. 2018) (ORDER). Recently, this court found that the defendant breached a best efforts 
195

obligation during the period leading up to a purported termination. Channel Medsystems, 

Inc. v. Boston Sci. Corp., 2019 WL 6896462, at *38 (Del. Ch. Dec. 18, 2019). The 

defendant contended that it had received material information that made termination 

necessary, but the court found that the defendant “made no reasonable efforts to engage 

with [its counterparty] or to take other appropriate actions to keep the deal on track.” Id.

Among other things, the defendant did not seek additional information from its 

counterparty, did not engage in forthright discussions with its counterparty, and did not 

conduct a meaningful analysis of the grounds it raised for termination. Id. The court found 

that the defendant’s actions showed both a failure to use reasonable best efforts and a lack 

of good faith. The court further observed that “[t]he lack of good faith here is corroborated 

by contemporaneous evidence that [the defendant] was looking for a way out of its deal.”

Id. The evidence of the defendant’s motives added “credence to and corroborat[ed] other 

robust facts demonstrating that [the defendant] did not fulfill its obligations to engage with 

[its counterparty] in a commercially reasonable manner to vet any concerns . . . and to keep 

the transaction on track.” Id. at *39.

Applying these principles to this case, the Reasonable Best Efforts Covenant 

obligated Cigna “to take all reasonable steps to solve problems and consummate the 

transaction.” Williams, 159 A.3d at 273. Cigna would breach the Reasonable Best Efforts 

Covenant by failing to take reasonable steps to consummate the transaction or by not 

attempting to solve problems. Cigna certainly would breach the Reasonable Best Efforts 

Covenant by working actively against the Merger and trying to prevent it from closing. 

Anthem faced the same obligations, albeit subject to the Burdensome Condition Exception.
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2. The Regulatory Efforts Covenant

The Regulatory Efforts Covenant imposed a stronger contractual duty than 

“reasonable best efforts,” but that duty was limited to the narrower task of addressing legal 

impediments to the Merger. In pertinent part, the provision stated,

Without limiting the foregoing, but subject to Section 5.3(c), the reasonable 

best efforts of Anthem and Cigna shall include Anthem and its Affiliates and 

Cigna and its Affiliates taking any and all actions necessary to avoid each 

and every impediment under the HSR Act, any Healthcare Law, antitrust law, 

insurance law or other applicable law that may be asserted by or on behalf of 

any Governmental Entity with respect to this Agreement, the Mergers and 

the other transactions contemplated hereby or . . . so as to enable the Closing 

to occur as promptly as practicable . . . .

MA § 5.3(b). 

The Regulatory Efforts Covenant was thus stronger than the Reasonable Best 

Efforts Covenant in that it required the parties to “tak[e] any and all actions necessary to 

avoid each and every impediment.” Id. The concept of “reasonable best efforts” recognizes 

that some extreme actions may be beyond a party’s best efforts. The obligation to “tak[e] 

any and all actions” does not admit exclusions. Id. 

At the same time, the Regulatory Efforts Covenant was narrower than the 

Reasonable Best Efforts Covenant in that it did not obligate the parties to use this level of 

effort to close the Merger by satisfying all of the conditions to closing. The Regulatory 

Efforts Covenant applied only with respect to the “discrete regulatory subject” covered by 

the provision.322 It thus only obligated the parties to use this level of effort to address 

 

322 See All. Data Sys. Corp. v. Blackstone Capital P’rs V L.P., 963 A.2d 746, 763 

(Del. Ch. 2009), aff’d, 976 A.2d 170 (Del. 2009); see also ABA Model Merger Agreement 
197

“impediments” that a Governmental Entity could assert “under the HSR Act, any 

Healthcare Law, antitrust law, insurance law or other applicable law that may be asserted 

by or on behalf of any Governmental Entity.” In framing the obligation in this fashion, the 

Regulatory Efforts Covenant did not use the concept of “impediment” in the general sense 

of any hurdle or obstacle to be overcome.323 The provision used the concept of 

“impediment” to refer specifically to a legal objection that a Governmental Entity could 

raise.

Unlike the more general Reasonable Best Efforts Covenant, the Regulatory Efforts 

Covenant also identified categories of actions that the parties were required to take to the 

extent they were either “requested by or on behalf of any Governmental Entity” or 

“necessary and appropriate” to achieving three enumerated goals:

(I) obtain[ing] all Necessary Consents; 

(II) resolv[ing] any objections that may be asserted by or on behalf of any 

Governmental Entity with respect to the mergers and the other 

transactions contemplated hereby; and 

(III) prevent[ing] the entry of, and have vacated, lifted, reversed or 

overturned, any order that would prevent, prohibit, restrict or delay 

 

for the Acquisition of a Public Company 197 (2011) (explaining that provision applies if 

“the antitrust agency demands divestiture or other action to avoid an antitrust challenge”).

323 Impediment, Oxford English Dictionary, (3d ed. 2020) (“The fact of impeding or

condition of being impeded; hindrance, obstruction; concrete something that impedes, 

hinders, or obstructs; a hindrance, an obstruction”); Impediment, Merriam-Webster Online 

Dictionary, (accessed August 21, 2020) (“something that impedes”); Impediment, 

Cambridge Dictionary, (2020 update) (“[S]omething that makes progress, movement, or 

achieving something difficult or impossible”). 
198

the consummation of the Mergers and the other transactions 

contemplated hereby.

MA § 5.3(b) (formatting added). In the current case, a Governmental Entity never made 

any requests, so the operative test is whether any of the three specified categories of actions 

were “necessary and appropriate” to achieve any of the three enumerated goals. 

Under the first category of actions, if necessary and appropriate to achieving an 

enumerated goal, the parties were required to

comply with all restrictions and conditions, if any, imposed, compelled, 

required, or requested by any Governmental Entity in connection with 

granting any Necessary Consent of any such Governmental Entity or in 

connection with the expiration or termination of any applicable waiting 

period under the HSR Act or any other antitrust laws or any clearance under 

any Healthcare Laws, insurance laws, or other applicable laws . . . .

MA § 5.3(b)(i) (the “Compliance Requirement”). The Merger Agreement defined 

“Necessary Consents” to encompass eight categories of legally required consents, 

including any those required under “the Hart-Scott-Rodino Antitrust Improvements Act of 

1976.” MA § 3.1(c)(iii). The Compliance Requirement never came into play because 

neither the DOJ nor any other Governmental Entity ever “imposed, compelled, required or 

requested” that Anthem or Cigna take any action.324

 

324 If the DOJ or any Governmental Entity had imposed, compelled, required, or 

requested any action, then the range of action that the parties were required to take was 

quite broad, including

(I) proposing, negotiating, committing to and effecting, by consent decree, 

hold separate order or otherwise, the sale, divestiture, disposition, license or 

other disposition of any Subsidiaries, operations, divisions, businesses, 

product lines, contracts, customers or assets of Anthem or any of its Affiliates 

(including Cigna or any of its Subsidiaries), 
199

Under the second category of actions, if necessary and appropriate to achieving an 

enumerated goal, the parties were required to 

agree to . . . enter into, suspend, amend or terminate any contract or other 

business relationship of Anthem or any of its Subsidiaries or Affiliates or 

Cigna or any of its Subsidiaries or Affiliates (including any contract with any 

Governmental Entity) . . . .

MA § 5.3(b)(ii) (the “Contracting Requirement”).325

Under the third category, if necessary and appropriate to achieving an enumerated 

goal, the parties were required to oppose fully and vigorously 

 

(II) taking or committing to take such other actions that may limit or impact 

Anthem’s or any of its Subsidiaries’ or Affiliates’ (including Cigna’s or any 

of its Subsidiaries’) freedom of action with respect to, or its ability to retain, 

any of Anthem’s or any of its Subsidiaries’ or Affiliates’ (including Cigna’s 

or any of its Subsidiaries’) operations, divisions, businesses, product lines, 

contracts, customers or assets and 

(III) entering into any orders, settlements, undertakings contracts, consent 

decrees, stipulations or other agreements to effectuate any of the foregoing 

or in order to vacate, lift, reverse, overturn, settle or otherwise resolve any 

order that prevents, prohibits, restricts or delays the consummation of the 

Mergers and the other transactions contemplated hereby, in any case, that 

may be issued by any court or other Governmental Entity.

MA § 3.1(c)(iii) (formatting added).

325 The Contracting Requirement also obligated the parties to “agree to . . . any 

additional obligations relating to any contract imposed by any Governmental Entity, in 

each case in connection with granting any Necessary Consent of any such Governmental 

Entity or in connection with the expiration or termination of any applicable waiting period 

under the HSR Act or any other antitrust laws or any clearance under any Healthcare Laws, 

insurance laws or other applicable laws.” Id. This aspect of the Contracting Requirement 

never came into play because a Government Entity never imposed any additional 

obligations in connection with granting any Necessary Consent. 
200

(I) any administrative or judicial action or proceeding that is initiated 

(or threatened to be initiated) challenging this [Merger] Agreement, the 

Mergers or the other transactions contemplated hereby and 

(II) any request for, or the entry of, and seek to have vacated or

terminated, any order that could restrain, prevent or delay the consummation 

of the Mergers and the other transactions contemplated hereby, 

including, in the case of either clause (I) or clause (II), by defending through 

litigation, any action asserted by any Person in any court or before any 

Governmental Entity, and vigorously pursuing all available avenues of 

administrative and judicial appeal.

MA § 5.3(b)(iii) (the “Litigation Requirement”) (formatting added). 

As with the Reasonable Best Efforts Covenant, the Regulatory Efforts Covenant 

was subject to the Burdensome Condition Exception. The condition again protected 

Anthem and not Cigna, making the parties’ obligations asymmetrical. Cigna was 

contractually obligated to “tak[e] any and all actions necessary to avoid each and every 

impediment under . . . antitrust law . . . that may be asserted by or on behalf of any 

Governmental Entity with respect to this Agreement, the Mergers and the other transactions 

contemplated hereby.” MA § 5.3(c). Anthem was not obligated to agree to take any action 

or agree to any terms or conditions that would have a material adverse effect on NewCo.

The parties dispute whether the overarching obligation in the Regulatory Efforts 

Covenant qualifies as a “hell or high water” provision. Cigna contrasts the Regulatory 

Efforts Covenant with the provision at issue in Akorn, which expressly stated that the 

parties’ regulatory efforts “shall be unconditional.” 2018 WL 471937, at *46. Anthem cites 

decisions in which the court described provisions containing language substantially 

identical to the Regulatory Efforts Covenant as a “hell or high water” provision. See 
201

Vintage Rodeo Parent, LLC v. Rent-A-Center, Inc., 2019 WL 1223026, at *6 (Del. Ch. 

Mar. 14, 2019) (describing an obligation to use “commercially reasonable efforts” to take 

“any and all action necessary or advisable” to obtain regulatory approvals” as a “hell or 

high water” provision); Hexion Specialty Chems., Inc. v. Huntsman Corp., 965 A.2d 716, 

756 (Del. Ch. 2008) (describing an obligation to “take any and all action necessary” to 

obtain antitrust approval as a “come hell or high water” obligation). 

The label does not matter. What counts is the plain language of the provision. Under 

the Regulatory Efforts Covenant, the parties were obligated to “tak[e] any and all actions 

necessary to avoid each and every” legal impediment that a Governmental Entity could 

raise. MA § 5.3(a). To the extent that an action fell within the scope of the provision, the 

parties were required to take it.

3. The Regulatory Cooperation Covenant

The Regulatory Cooperation Covenant was an important adjunct to the other Efforts 

Covenants. That provision generally gave Anthem the authority to take the lead in 

communicating with regulators and developing a regulatory strategy, including for 

purposes of any litigation. It did so by stating that “Anthem, in consultation with Cigna, 

shall take the lead in coordinating communications with any Governmental Entity and 

developing strategy for responding to any investigation or inquiry by any Governmental 

Entity related to any of the Necessary Consents.” MA § 5.3(e). A necessary corollary of 

this grant of authority to Anthem was that Cigna was obligated to follow Anthem’s lead 

and adhere to Anthem’s strategy.
202

Like the Regulatory Efforts Covenant, the Regulatory Cooperation Covenant 

contained more specific requirements. First, the parties agreed that “each party shall as 

promptly as practicable make such filings with Governmental Entities as are required in 

connection with this Agreement and the transactions contemplated hereby on its respective 

behalf.” Id.

Second, the parties agreed that

[p]rior to submitting any filing, substantive written communication, 

correspondence or other information or response by such party or any of its 

representatives, on the one hand, to any Governmental Entity, or members of 

the staff of any Governmental Entity, on the other hand, subject to Section 

5.2, the submitting party shall permit the other party and its counsel a 

reasonable opportunity to review in advance, and consider in good faith the 

comments of the other party provided in a timely manner, in connection with 

any such filing, communication, correspondence, information, or 

response. . . .

To the extent practicable under the circumstances, none of the parties hereto 

shall agree to participate in any substantive meeting or conference with any 

Governmental Entity, or any member of the staff of any Governmental 

Entity, in respect of any filing, proceeding, investigation (including any 

settlement of the investigation), litigation, or other inquiry related to the 

mergers unless it consults with the other party in advance and, where 

permitted, allows the other party to participate.

Id.

Third, the parties agreed to exchange information and provide assistance to each 

other:

Subject to Section 5.2 and the terms and conditions of the Confidentiality 

Agreement, Anthem and Cigna shall coordinate and cooperate fully with 

each other in exchanging such information and providing such assistance as 

the other party may reasonably request in connection with the foregoing. 
203

Id.326

 

326 Titled “Access to Information,” Section 5.2 provided as follows:

Upon reasonable notice, each of Anthem and Cigna shall . . . 

[1] afford to the other party hereto and its officers, employees, accountants, 

counsel, financial advisors, and other representatives of the other party 

reasonable access during normal business hours, during the period prior to 

the Effective Time, to such of its properties, books contracts commitments, 

records, officers, employees and consultants as the other party may 

reasonably request and, 

[2] during such period, each of Anthem and Cigna shall . . . furnish promptly 

to the other party, subject in the case of competitively sensitive information, 

to any “clean room” arrangement between the parties 

(a) to the extent not publicly available, a copy of each report, schedule, 

registration statement, and other document filed, published, announced or 

received by it during such period pursuant to the requirements of federal or 

state securities laws as applicable . . . , and 

(b) consistent with its legal obligations, all other information 

concerning it and its business, properties and personnel as such other party 

may reasonably request; 

provided, however, that either may restrict the foregoing access to the extent 

that, in such party’s reasonable judgment, (i) providing such access would 

violate such party’s . . . obligations under the terms of a confidentiality 

agreement with a third party . . . , (ii) providing such access would result in 

the waiver of any attorney-client privilege . . . or (iii) any law, treaty, rule or 

regulation of any Government Entity . . . requires such party . . . to restrict 

access to such properties or information.

MA § 5.2. Section 5.2 thus provided a separate avenue for the parties to obtain information 

from each other. By making aspects of Section 5.3(e) “subject to Section 5.2,” the Merger 

Agreement made clear that these requirements did not displace Section 5.2. Although the 

record suggests that Anthem might have been able to assert a claim for breach of Section 

5.2 based on Cigna’s withdrawal from integration planning and failure to provide 

assistance during the Antitrust Litigation, those claims largely would parallel Anthem’s 

existing claims for breach of the Efforts Covenants. Neither side has asserted a breach of 

Section 5.2.
204

4. The No Injunction Condition

The parties’ obligations to perform at closing and consummate the Merger were 

subject to conditions that appeared in Sections 6.1, 6.2, and 6.3 of the Merger Agreement. 

For purposes of the claims for breach of the Efforts Covenants, the key condition was the 

No Injunction Condition, which states,

No Injunctions or Restraints, Illegality. (i) No Governmental Entity or 

federal or state court of competent jurisdiction shall have enacted, issued, 

promulgated, enforced or entered any statute, rule, regulation, executive 

order, decree, judgment, injunction or other order (whether temporary, 

preliminary or permanent), in any case that is in effect and that prevents or 

prohibits consummation of the Mergers (collectively, the “Legal 

Restraints”) . . . . 

JX 468 § 6.1(a).

The permanent injunction against the Merger constituted a Legal Restraint within 

the plain language of the No Injunction Condition. The District Court was a “federal . . . 

court of competent jurisdiction.” By entering the permanent injunction, it “issued [an] . . . 

order . . . that prohibit[ed] consummation of the Merger[].” PTO ¶ 199. The DC Circuit 

Court affirmed its decision. PTO ¶ 206. The No Injunction Condition therefore was not 

satisfied, bringing into play the Restatement framework for analyzing causation.

C. Anthem’s Claims For Breach Of The Efforts Covenants

For its claims against Cigna, Anthem sought to prove that Cigna breached the 

Efforts Covenants by engaging in conduct that fell into five broad categories: 

(i) conducting a covert communications campaign against the Merger, (ii) withdrawing 

from integration planning, (iii) opposing a divestiture, (iv) resisting mediation, and 

(v) undermining Anthem’s defense in the Antitrust Litigation. The first two categories 
205

implicate Cigna’s obligations under the Reasonable Best Efforts Covenant. The next three 

categories implicate Cigna’s obligations under the Regulatory Efforts Covenant and the 

Regulatory Cooperation Covenant.327

1. Cigna’s Covert Communications Campaign Against The Merger

Anthem proved that Cigna breached the Efforts Covenants by conducting a covert 

communications campaign against the Merger. But Anthem failed to prove that Cigna’s 

covert communications campaign contributed materially to the failure of the No Injunction 

Condition. Anthem therefore failed to establish a basis to recover damages under this 

theory.

a. Cigna’s Contractual Obligations Regarding A Covert 

Communication Campaign

To state the obvious, Cigna had a contractual obligation not to run a covert 

communication campaign against the Merger. The two Cigna directors who testified at trial 

understood this fact.328

As a technical matter, the underlying obligation arose under the Reasonable Best 

Efforts Covenant, not the Regulatory Efforts Covenant. The Reasonable Best Efforts 

covenant obligated Cigna to support the Merger and seek to consummate it. Taking action 

with the goal of undermining the Merger breached the Reasonable Best Efforts Covenant. 

 

327 Anthem’s presented its arguments in a different order and combined Cigna’s 

opposition to a divestiture and its resistance to mediation into a single category. When 

addressing these claims, the parties did not clearly distinguish among Cigna’s obligations 

under the different Efforts Covenants. This decision strives to be more precise.

328 Zollars Tr. 2510–12; Harris Tr. 3268–69.
206

Because Cigna sought to influence the regulatory approval process, it is possible to 

conceive of the obligation as implicating the Regulatory Efforts Covenant. That covenant, 

however, committed Cigna to take action to avoid any legal impediment that could be 

asserted by or on behalf of any Governmental Entity. MA §5.3(b). The covert 

communication campaign was not specifically part of the regulatory approval process, nor 

did it respond to a legal impediment. It therefore falls under the Reasonable Best Efforts 

Covenant. 

b. Cigna Breached The Reasonable Best Efforts Covenant By 

Conducting A Covert Communications Campaign.

Anthem proved that Cigna conducted a covert communications campaign against 

the Merger. Through Teneo, Cigna carried out a campaign that depicted the Merger as anticompetitive, anti-consumer, and anti-innovation, which were the very grounds on which 

DOJ was seeking to block it. See Cohen Tr. 2386.

The idea to conduct a covert communications campaign originated in January 2016 

as part of Project Alpha. The playbook for Project Alpha included escalation strategies if 

Anthem did not make the commitments Cigna wanted. One escalation strategy was a covert 

communications campaign. See Part II.G.34, supra.

Teneo’s campaign against the Merger began in May 2016, after Cohen leaked the 

dispute letters to the Wall Street Journal. See Part II.I.3, supra. Teneo began speaking with 

reporters on background to spread the following anti-Merger messages:

 “It remains unclear that Anthem is properly managing the processes necessary to 

bring the deal to completion.” JX 1860 at ’114.

 “Many of the core regulatory work streams have fallen behind schedule.” Id.
207

 “The transaction leverages Cigna’s unique and robust capabilities.” Id.

 “In the event the merger does not obtain regulatory approval, we are well positioned 

for standalone success,” citing a “[w]ell-balanced diversified business model,”

“substantial ‘dry powder’ of $6-8 billion,” and “M&A possibilities and market 

leading revenue, earnings, and capital efficiency.” Id.

See generally JX 2298 (circulating and discussing a “Communications Campaign and 

Execution Plan”). 

After the DOJ filed suit, Cigna instructed Teneo to develop stories that the Blues 

Rules would prevent the Merger from being cleared. See Part II.K.2, supra. Jones told 

Cohen “to play this as all roads go to the blues.” JX 2486 at ’490. Cohen understood that 

Jones wanted “a strategy to blame the Blues rules no matter what.”

329

Teneo and Cigna knew that the DOJ was challenging the Merger as anticompetitive.330 Teneo sought to spread the message that “the combined company will not 

compete as vigorously against the Blues . . . and that this will inhibit the growth of the 

combined company.”

331

 

329 Cohen Tr. 2427–28; see JX 2488; Cohen Tr. 2432.

330 See Cordani Tr. 2190–91; Cohen Tr. 2392.

331 JX 2298 at ’547; see JX 2484 at ’835.001 (“If Cigna merges with Anthem, its 

freedom to compete with Blues across the country could be constrained.”).
208

Teneo and Cigna knew that it would hurt the prospects for antitrust clearance if the 

Merger harmed consumers.332 Teneo sought to spread the message that the Merger was 

“anti-consumer” and “does not take the best internet of customers in mind.”

333

Teneo and Cigna knew that the DOJ was attacking the Merger because it would 

reduce Cigna’s capacity for innovation.334 Teneo sought to spread the message that “the 

transaction is being largely viewed by customers as . . . non-innovative.”

335

Cohen spoke with reporters, attorneys, and law professors to spread the anti-Merger 

narrative. 

 As trial approached, Teneo engaged in “Proactive Pre-Trial Activity” and “worked 

with reporters” to write “curtain raisers” that would “[h]ighlight [Cigna] as 

innovative and positively impacting client health outcomes.”

336

 During and after trial, Cohen spoke with reporters and provided them with talking 

points and quotations that criticized Anthem and the Merger.337

 

332 See Cohen 2394–96; Jones Tr. 2766–67.

333 JX 2298 at ’548; see JX 2484 at ’002 (“Anthem and its Blues partners are already 

being accused of negatively impacting the healthcare market and its consumers.”).

334 Cohen Tr. 2394–96; Jones Tr. 2767.

335 JX 2298 at ’548; see JX 2484 at ’002 (“The merged company will limit Cigna’s 

innovation”).

336 JX 2613 at ’581; see JX 2617; see also JX 2611; JX 2613; JX 2629; JX 2636; 

JX 2715.

337 See, e.g., JX 2694; JX 2727; JX 2769; JX 2773; JX 2781; JX 2782; JX 2783; JX 

2784; JX 2785; JX 2793; JX 2794; JX 2798; JX 2803; JX 2805; JX 2806; JX 2807; JX 

2810; see also JX 2812.
209

 Teneo continued its communication campaign after the District Court enjoined the 

Merger.338

Cohen’s efforts produced stories that advanced anti-Anthem, anti-Merger themes. See 

Part II.K.5, supra.

Teneo developed and implemented the covert communications campaign with the 

understanding that Cigna was not interested in obtaining antitrust approval for the Merger. 

Cohen Tr. 2391, 2403. Cigna never asked Teneo to develop any messaging or 

communications to support the Merger. Id. at 2384.

Cigna has argued that its conduct could not have breached the Merger Agreement 

because Cigna did not subjectively believe that Teneo’s work would or could influence 

DOJ or the courts. Dkt. 700 at 68. Intent is not a requirement for a breach of the Reasonable 

Best Efforts Covenant. MA § 5.3(b). Regardless, Cigna sought to do precisely that. Before 

Teneo’s activities became a focus in this litigation, its website advertised its “strategy and 

communications advisory” capabilities relating to “litigation and enforcement actions” and 

argued that “[a] well-run communications strategy can dramatically change the outcome

of high-stakes litigation and/or enforcement action matters.” JX 2976 (emphasis added).

Jones argued to Anthem that an “effective advocacy strategy” required “public relations 

support.” JX 1763 at ’909. Cigna’s head of public relations recognized that Cigna was 

trying to “influence what the judge thinks.” Sandberg Tr. 343.

 

338 See JX 2760; JX 2778; JX 2760.
210

Cigna also invokes a form of preemptive self-defense, claiming that it unleashed 

Teneo “to counter any investor perception that Cigna was the cause of the Merger being 

blocked.” Dkt. 700 at 78. If Cigna wanted to be perceived as supporting the Merger, then

Cigna could have actively supported it. If Cigna wanted to criticize Anthem, Cigna could 

have waited until it was no longer bound by the Merger Agreement. Cigna instead chose 

to attack its merger partner and the Merger in secret. 

In any event, Cigna did not in fact seek to “counter . . . investor perception.” Cigna 

sought to shape investor perception and, if possible, influence the DOJ and the courts by 

attacking Anthem and the Merger.339

Cigna’s covert communications campaign breached the Reasonable Best Efforts 

Covenant. Attacking the Merger was the exact opposite of “us[ing] its reasonable best 

efforts to take, or cause to be taken, all actions, to do, or cause to be done, all things 

reasonably necessary to satisfy the conditions to Closing set forth herein and to 

consummate the Merger[].” MA § 5.3(a). 

c. Cigna’s Covert Communications Campaign Did Not Contribute 

Materially To The Failure Of The No Injunction Condition.

Although Anthem proved that Cigna’s covert communications campaign breached 

the Reasonable Best Efforts Covenant, Anthem did not prove that the breach contributed 

materially to the failure of the No Injunction Condition. There is no evidence that the covert 

 

339 See, e.g., JX 1522 at ’065; Cohen Tr. 2384–86, 2402.
211

communications campaign actually affected the DOJ, the District Court, or the DC Circuit

Court.

The strongest evidence in the record indicates that the District Court was not 

influenced by Cigna’s communication strategy. During a status conference on August 12, 

2016, the District Court engaged with counsel about whether Anthem and Cigna would

extend the termination date of April 30, 2017. Cigna’s counsel claimed that Cigna was 

committed to the Merger, but that the termination date was nevertheless “a real deadline.”

JX 2414 at 55. Anthem’s counsel started to explain the implications of the termination date 

and referenced press accounts about the parties’ disputes, but Judge Jackson interrupted 

him, stating, “I have enough materials on the docket, I’m not going to make any decisions 

based on what I read in the press. I think that would be completely inappropriate.” Id. at 

56–57. At trial in this litigation, Anthem’s antitrust counsel would not say that the court 

was influenced by the press. Curran Tr. 1496 (“Q: But you believe that Judge Jackson was 

influenced by the press; is that right? A. I think that’s—it’s hard for me to know that.”). 

One of Anthem’s antitrust experts similarly testified that the DOJ would be not influenced 

by press accounts. Baker Dep. 57–58.

Ultimately, there is no reliable way to assess how much of an impact Cigna’s covert

communication campaign had. Anthem bore the burden of proving that Cigna’s breach 

materially contributed to the failure of the No Injunction Condition. Anthem failed to meet 

that burden. Anthem thus failed to prove that Cigna’s covert communications campaign 

had a significant effect on the DOJ or the courts. Instead, Cigna’s covert communications 
212

campaign provides powerful evidence of Cigna’s intent to oppose the Merger and 

undercuts the credibility of Cigna’s positions.

2. Cigna’s Withdrawal From Integration Planning

Anthem proved that Cigna breached the Reasonable Best Efforts Covenant by 

withdrawing from integration planning. Anthem also proved that Cigna’s withdrawal from 

integration planning contributed materially to certain rulings in the Antitrust Decisions. 

But Anthem failed to prove its two key theories: first, that Cigna’s withdrawal prevented 

Anthem from advancing an efficiencies defense based on NewCo offering hybrid products,

and second, that Cigna’s withdrawal prevented Anthem from relying on additional medical 

cost savings driven by Cigna’s medical utilization programs.

a. Cigna’s Contractual Obligations Regarding Integration 

Planning

Under the Reasonable Best Efforts Covenant, Cigna was contractually obligated to 

support the Merger by engaging in integration planning. The Reasonable Best Efforts 

Covenant required that Cigna “use its reasonable best efforts” to satisfy the conditions to 

closing and consummate the Merger. MA § 5.3(a). One condition to closing was the receipt 

of government approvals, including antitrust approvals. See MA § 6.1(b) (the 

“Governmental Approval Condition”). 

Integration planning was necessary to make the case for the Merger to government 

regulators, and Cigna understood that regulatory approval and integration planning were 
213

deeply intertwined and interdependent.340 From the outset, Anthem and Cigna planned to 

argue to the DOJ and, if necessary, litigate based on the theory that the Merger would 

generate substantial efficiencies.341

Because of the connection between integration planning and regulatory approval, it 

is possible to argue that the Regulatory Efforts Covenant obligated Cigna to engage in 

integration planning. That provision, however, focused narrowly on actions necessary “to 

avoid” any legal impediments that a Governmental Entity could raise. MA § 5.3(a). 

Reinforcing this narrow purpose, the provision listed categories of actions that the parties 

were obligated to take, but only if they were “requested by or on behalf of any 

Governmental Entity” or “necessary and appropriate” for achieving three objectives:

(I) obtain[ing] all Necessary Consents; 

(II) resolv[ing] any objections that may be asserted by or on behalf of any 

Governmental Entity with respect to the mergers and the other 

transactions contemplated hereby; and 

(III) prevent[ing] the entry of, and hav[ing] vacated, lifted, reversed or 

overturned, any order that would prevent, prohibit, restrict or delay 

the consummation of the Mergers and the other transactions 

contemplated hereby.

MA § 5.3(b) (formatting added). 

Participation in integration planning was at least one step removed from the subjects 

addressed by the Regulatory Efforts Covenant. The integration planning process provided 

the informational foundation necessary for the parties to evaluate what actions needed to

 

340 See, e.g., Harris Tr. 3252; JX 1522 at 3, 7. See generally Part II.G, supra.

341 See, e.g., JX 522 at ’806–07. See generally Part II.G, supra.
214

be taken in response to the legal impediments that a Governmental Entity could raise. It 

was essential preparatory work, but it was not itself a response to an actual or potential 

legal impediment. The obligation to participate in integration planning therefore did not 

arise under the Regulatory Efforts Covenant, but rather under the Reasonable Best Efforts 

Covenant.

b. Cigna Breached The Reasonable Best Efforts Covenant By 

Withdrawing From Integration Planning.

Anthem proved that Cigna withdrew from integration planning. By withdrawing, 

Cigna did not “take all reasonable steps to solve problems and consummate the 

transaction.” See Williams, 159 A.3d at 272. Cigna sought to create problems that would 

give it leverage against Anthem.

In February 2016, Cigna “de-scoped” its integration planning efforts. See Part 

II.G.9, supra. The dominos that led to that decision started falling in December 2015, when 

Swedish tried to schedule the interviews of Cigna executives that would kick off the L2/L3 

selection process. Cordani and the Cigna ELT reacted angrily and defensively. Anthem 

viewed leadership selection as necessary for a successful integration (as would the District 

Court), and Anthem believed that the integration process already was running 30–40% 

behind schedule. Swedish’s attempts to get the process back on track produced the initial 

dispute letters between Swedish and Cordani. See Part II.G.13, supra. Those exchanges 

in turn led to the fateful meeting on January 11, 2016, when Swedish reduced Cordani’s 

responsibilities as President and COO and informed him that Anthem would develop 
215

alternative CEO candidates. See Part II.G.4, supra. Cordani and the Cigna ELT viewed this 

as a hostile act, and they embarked on Project Alpha in response. See Part II.G.56, supra. 

The initial goals of Project Alpha were to (i) limit Swedish’s authority over 

integration planning and (ii) restore Cordani’s role and path to CEO. See id. The Cigna 

ELT viewed the two as linked because the scope of integration planning included selecting 

NewCo’s ELT and determining NewCo’s organizational structure. The Cigna ELT did not 

want Swedish making “critical high-level decisions for NewCo (such as overall business 

strategy and leadership structure).” JX 1075 at ’617. To stop this from happening, they 

wanted to “[r]efocus integration planning on Day 1 priorities.” Id. at ’619. 

Project Alpha initially targeted the February 2016 meeting of the designees to the 

NewCo Board. See Part II.G.67, supra. When that meeting failed to produce the 

commitments that the Cigna ELT wanted, they decided to escalate. See Part II.G.8, supra. 

During a meeting on February 23 and 24, 2016, the Cigna Board authorized the Cigna ELT 

to “de-scope the Corporation’s integration planning efforts.” JX 1350 at ’843–844. 

Ostensibly that de-scoping was a response to “the pace and progress of regulatory efforts.”

Id. at 844. The real reason was to create near-term leverage against Anthem. 

On the day after the Cigna Board meeting, Hocevar sent an email to all of the Cigna 

integration team leaders telling them to prioritize Day 1 planning and not engage in detailed 

planning for later periods. JX 1367. He stressed,

 “Day 1 activities are the key priority on integration planning now . . . . We are a 

long way off from locking down Day 1 requirements.” Id. at ’253.

 “We have enough information shared at this point and truly need insights at this 

point rather than more information.” Id.
216

 “We know at a high level that there is a line of sight to the $2B of shareholder 

synergies and while we need to validate high level thinking on the synergies, we do 

not need to lock down the details of any lever at this point.” Id. at ’252.

 “The details of ‘how we make money’ or ‘our secret sauce’ should continue to be 

held closely to the vest at all times as it is truly the competitive advantage we have.”

Id.

The Cigna integration team followed these instructions.342

At the monthly meeting of the Steering Committee on March 11, 2016, Anthem 

tried to get the integration plaining process back on track, but Cigna stood firm. Anthem 

and Cigna spent the next six weeks debating what areas Cigna would support beyond Day 1 

activities. The District Court found that “Cigna’s disengagement was so complete that 

Anthem established an independent team to proceed with integration planning on its 

 

342 See, e.g., JX 1338 at ’028 (“The primary focus of our activities right now should 

be on Day 1 and Day 2-180[.]”); JX 1344 at ’452 (emphasizing work on “Day 1 activities” 

was “where we should plan to focus more of our time as a project team”); JX 1348 at ’049 

(Hocevar reporting that he told Matheis that Cigna’s priorities were “to lock the book and 

growth agenda down, day 1 planning and put the stakes in high level assumptions”); 

JX 1382 at ’278 (“We had a Cigna integration team call this morning and we were 

instructed that our efforts are to be focused on Day One objectives . . . . This current focus 

on value levers and corresponding information requests goes well beyond Day One 

objectives.”); JX 1387 (Cigna team lead reporting that “our plan for the immediate future

should be focusing on Day 1 activities”); see also JX 1398 (Anthem noting Cigna’s 

reorientation to Day 1 activities); JX 1432 (same). See generally Part II.G.9, supra.
217

own.”

343 That was a reference to Anthem’s “Phase 2B” team, an internal group that 

continued planning in areas where Cigna refused to help.344

As Cordani testified, Anthem “wanted to expend more energy on detailed expense 

synergy analysis, planning, and detailed operational planning.” JX 1842 at 205. That was 

the detailed planning that was necessary to support the regulatory approval process. Cigna 

only was willing to take that “body of work . . . to a certain threshold level, but then, stop.”

Id. As a result of Cigna’s withdrawal, by May 2016, integration planning was running 

approximately a quarter behind schedule. JX 1830 at ’076.

The integration planning that Anthem wanted to conduct was necessary to support 

the regulatory approval process and consummate the Merger. By withdrawing from 

integration planning, Cigna breached the Reasonable Best Efforts Covenant.

c. The Effect Of Cigna’s Withdrawal From Integration Planning 

On The Efficiencies Defense

To prove that Cigna’s withdrawal from integration planning contributed materially 

to the failure of the No Injunction Condition, Anthem sought to prove that Cigna’s 

withdrawal impaired the efficiencies defense by (i) depriving Anthem of its ability to 

 

343 Dist. Ct. Op., 236 F. Supp. 3d at 246. The District Court, like this decision, found 

that Cigna withdrew from the integration planning process. Based on the record in the 

Antitrust Litigation, the District Court found that “Cigna began to disengage from the 

process in April of 2016, and Cigna ceased participation completely in July when the [DOJ]

sued to stop the merger.” Id. at 235 (internal citation omitted). The extensive record 

developed in this case shows that Cigna’s withdrawal began even earlier, in February 2016. 

344 See Zielinski Tr. 41; Drozdowski Tr. 947–48; Matheis Dep. 315. See generally 

Part II.H.2, supra.
218

defend the Merger based on NewCo’s ability to introduce hybrid products and 

(ii) preventing Anthem from obtaining the information necessary to show that NewCo 

would generate efficiencies by improving medical utilization. The evidence on both issues 

is mixed. Ultimately, the evidence indicates that Anthem made tactical decisions on both

issues that were independent of Cigna’s withdrawal from the integration planning process.

i. New Products

The Antitrust Decisions primarily analyzed the medical cost savings that the Merger 

would generate based on the assumption that NewCo would offer Cigna’s existing products 

at Anthem’s discounted rates. Both the District Court and the Majority found it implausible 

that Cigna’s providers would keep doing the same work for less money, or that Anthem’s 

providers would do more work for the same money. An obvious solution would have been 

for Anthem to show that NewCo would offer new products that blended aspects of Cigna’s 

existing offerings (i.e., some value-based care, but less than the full Cigna product) at a 

cheaper price than Cigna could achieve on its own (i.e., better discounts than Cigna 

standing alone, even if not as low as what Anthem could obtain for its traditional offerings). 

Cigna correctly points out that Anthem did not attempt to defend the Merger based on 

blended products. Dkt. 700 at 66. The question is, “Why?” If Cigna’s withdrawal from 

integration planning interfered with Anthem’s ability to defend the Merger based on 

blended products, then Cigna’s breach caused Anthem to advance the efficiencies defense 

in the form it did. 

Viewed at a high level, the evidence could support a finding that Cigna’s withdrawal 

from integration planning prevented Anthem from relying on new products to defend the 
219

Merger. At trial in this action, Anthem witnesses testified that the parties planned to present 

an efficiencies defense based on blended products, but that Cigna never provided the 

information necessary to advance that defense.345 The commercial integration team 

developed two lines of blended products—Essentials and Signature—each of which 

provided a different mix of features from Anthem and Cigna’s offerings.346 But NewCo’s 

Day 1 go-to-market plan did not contemplate any new products; only go-to-market plans 

over longer time horizons would incorporate new products.347 When Cigna limited 

integration planning to Day 1 activities, Cigna shut down the planning for new products. 

Although this account is plausible, the record demonstrates that Anthem never 

viewed the blended products as sources of efficiencies that could be used to defend the 

Merger. Developing and introducing those products would take time. Before NewCo could 

sell them, it needed an IT system that could both support the new product features and 

comply with the Blues Rules. Cigna’s system supported the features, but did not comply 

with the Blues Rules. Anthem’s platform complied with the Blues Rules, but did not 

support the features. Anthem determined that using its system was the best option, but the 

upgrades would be rolled out over time, with the first features not in place until the second 

 

345 See Zielinski Tr. 37, 128; see also Rosen Tr. 836 (“I was clearly in agreement 

that we should emphasize the way in which Cigna’s strength complemented Anthem’s and 

would lead to a better combined product. That was always our argument. We never got the 

ammunition to make that argument effectively.”).

346 See DeRosa Tr. 1697–98; JX 1173 at ’158; JX 1241 at 47; JX 1345 at 2. See 

generally Part II.I.3, supra.

347 See Hocevar Tr. 2335–36; Manders Tr. 2573–74; DeRosa Dep. 123–36.
220

year after closing. Because of this timeline, Anthem viewed the new products as a source 

of additional value that NewCo could create over a medium to long-term horizon, not as a 

source of efficiencies. See generally Part II.I.3, supra.

The record also demonstrates that Anthem’s lawyers made the decision to ground 

the efficiencies defense on “best-of-breed” discounts when preparing the white papers in 

April and May 2016. After consulting with McKinsey and Anthem’s economics expert, 

Anthem’s lawyers believed that this was the strongest and most straightforward way to 

present the efficiencies defense. The record does not contain evidence of Anthem’s lawyers 

meaningfully exploring a way to ground the efficiencies defense on new and blended 

products. See Part II.I.2, supra.

Anthem’s approach was logical. The underlying economic theory was easy to 

comprehend: NewCo would get the best discounts that each company could obtain on its 

own. The basis for calculating the medical cost savings was straightforward. The resulting 

medical cost savings was large. And the approach did not emphasize Cigna’s status as an 

innovative company, meaning that it did not play into the DOJ’s theory that Cigna was a 

uniquely innovative maverick.

Anthem’s actions during trial in the Antitrust Litigation demonstrated that it did not 

give meaningful consideration to a defense based on new products. As the District Court 

noted, it was not until the last days of trial that Anthem made noises about a hybrid product. 

See JX 2660 at 4911–12.
221

Anthem failed to prove that Cigna’s withdrawal from integration planning affected 

Anthem’s ability to present an efficiencies defense based on new products. Anthem made 

a tactical choice to present an efficiencies defense based on best-of-breed discounts. 

ii. Utilization 

The Antitrust Decisions found that Cigna had developed innovative programs that 

reduced the total cost of care by improving the utilization of medical services. Both the 

District Court and the Majority criticized Anthem’s efficiencies defense for failing to 

account for utilization. In this action, Anthem sought to prove that Cigna’s withdrawal 

from integration planning deprived Anthem of data on utilization, which prevented Anthem 

from defending the Merger based on efficiencies that accounted for utilization.

Whether Cigna’s withdrawal from integration planning impaired Anthem’s 

efficiencies defense presents a close question. Cigna provided Anthem with some 

information, but Cigna also withheld information. Ultimately, as with new products, 

Anthem’s lawyers made a tactical decision to argue that Anthem had a better total cost of 

care, including better utilization, in an effort to defeat the DOJ’s argument that Cigna was 

uniquely innovative.

The record supports a finding that Cigna did not provide Anthem with meaningful 

information on how utilization affected its cost of care. At trial in this action, Anthem 

witnesses testified that Cigna failed to provide sufficient information about its utilization 

programs.348 Colin Drozdowski was the Anthem executive who led an integration team 

 

348 See Zielinski Tr. 90–91; Paul Tr. 626–28, 736–39; Drozdowski Tr. 924–47.
222

responsible for evaluating the parties’ provider networks, including their medical 

management programs and value-based care offerings. Drozdowski testified that Cigna 

refused to provide detailed information about value-based care.349 Cigna resisted providing 

the information when integration began in October 2015, and by January and February 

2016, the flow of information had stopped. Drozdowski Tr. 936, 938, 947. Drozdowski 

correctly inferred that Cigna was attempting to defer sharing information until after closing 

“and trust/hope that David Cordani as President and Chief Operating Officer will have 

more direct control and influence and thus will prevent the ‘Cigna disruption’ that they 

anticipate.” JX 3105 at ’899. The integration teams were able to make calculations based 

on high-level assumptions, but they could not conduct more detailed analyses.350 Cigna 

formalized its withdrawal from integration planning in February 2016, when the Cigna 

 

349 See Drozdowski Tr. 924–47; JX 3105; JX 1211; JX 1212; JX 1214; JX 1256 at 

’499.

350 See Drozdowski Tr. 937–38. At trial, Drozdowski was shown internal analyses 

that Cigna and Bain prepared to evaluate how Cigna’s value-based care programs would 

operate using Anthem rates. He explained that Anthem had wanted that type of analysis, 

but that it was never provided. See id. at 940–46; JX 879. 

There was tension between Drozdowski’s testimony in this action and his testimony 

at trial in the Antitrust Litigation, where he described the working relationship between his 

team and their counterparts at Cigna as follows: “It was good. We worked very well. They 

were engaged. As I mentioned, we had 100 meetings.” JX 2660 at 1644. During the 

Antitrust Litigation, Anthem sought convince the District Court that the integration 

planning process provided credible support for its medical cost savings calculations, giving 

Anthem an incentive to gloss over problems. Having failed to convince the District Court, 

Anthem sought in this action to explain how Cigna contributed materially to that failure. 

The two positions are not fatally inconsistent, but they suggest a willingness to shade the 

truth depending on the goal.
223

ELT stopped work on everything other than Day 1 activities. As a result of this instruction, 

work on value-capture and medical costs savings was delayed, and Cigna continued to 

withhold information about the cost implications of its value-based programs.351

In response to this significant evidence, Cigna assembled what appears at first blush 

to be a powerful response.352 Upon close review, much of that evidence was either not on 

point or unpersuasive, and a critical aspect of it supports Anthem’s position.353

Cigna’s strongest evidence came from Shubham Singhal, a McKinsey executive 

who led the integration team’s analysis of medical cost savings. After his direct 

examination during trial in the Antitrust Litigation, the District Court asked, “Was there 

information you sought from either side that you weren’t able to obtain?” JX 2660 at 1793. 

Singhal responded, “No, Your Honor. I think we—we had all of the detailed information 

that we needed.” Id. at 1793. He later testified during cross-examination that his team used 

 

351 See JX 1548; JX 1617; JX 1626 at ’124; JX 1937; JX 3109; Drozdowski Tr. 

1036–39, 1052–56, 1060–61, 1063–68. See generally Part II.G.9 & II.H.23, supra.

352 See Dkt. 700 at 67; Dkt. 711 at 7; see also CDX 4 (collecting testimony).

353 In one example, Cigna cites an email between an Anthem representation and his 

Cigna counterpart from May 2016 in which they “confirmed that we are agreed to proceed 

with the Med cost value creation across network, Med mgmt., claims editing, and Med 

policy including the refinement of analysis.” JX 1937. Cigna claims that this email shows 

that Cigna continued to work on the implications of utilization. Dkt. 700 at 67. What 

actually happened is that Cigna withdrew from the integration planning process, and 

Anthem and its consultant, McKinsey, continued the work. Cigna then sought to resume 

participating in integration planning on certain subjects. See Part II.I.5, supra. The email 

refers to Cigna’s efforts to resume participation. See JX 1937 at ’510; JX 4063; JX 2096.
224

the data that it received to calculate the savings achieved by both companies’ utilization 

programs.354

A closer review of the record reveals that Singhal was testifying about the claims 

data that Anthem and Cigna submitted to the clean room for McKinsey to analyze. In a 

declaration in the Antitrust Litigation, Singhal explained that

[t]o determine the amount of annual medical cost savings available to the 

Combined Company, McKinsey’s Clean Team collected detailed claims, 

enrollment, and provider data from both Anthem and Cigna for claims with 

service dates of January 1, 2014 through September 30, 2015, and paid by 

September 30, 2015. This data consisted of 2.4 billion claim line items which 

captured all the claims payments between Anthem, Cigna, and their 

contracted and out-of-network providers; 250 million enrollment records 

defining product, segment, enrollment period, and other membership 

information; and 2 million provider records, including all Anthem and Cigna 

participating and nonparticipating providers for the period. 

JX 2547 ¶ 1. McKinsey thus received twenty-one months’ worth of claims data. For its 

analyses, McKinsey primarily used data for the eight months from January through August 

2015. Id. ¶ 5. 

 

354 JX 2660 at 1820–21; see JX 2546, ¶¶ 51–52, 78–87. On appeal, Anthem’s lead 

counsel represented to the DC Circuit Court that McKinsey’s analysis of medical cost 

savings took utilization into account. Relying on Singhal’s testimony, Anthem’s counsel 

stated, “All the data was in there, and McKinsey analyzed the data and confirmed the two 

point whatever billion dollar medical cost savings that were achievable.” JX 2904 at 81. 

During post-trial argument in this case, Cigna claimed that Anthem’s counsel had invented 

a missing data story for trial, because the same lawyer testified that Israel, Anthem’s 

economist in the Antitrust Litigation, did not have data on utilization. See Curran Tr. 1619.

Cigna’s argument was misleading. The Anthem lawyer was talking about two different 

analyses. Consistent with the Anthem lawyer’s testimony, Israel testified in the Antirust 

Litigation that he did not have or use any data on utilization. See JX 2660 at 2087–89; 

Curran Tr. 1581–82.
225

The admittedly massive amount of claims data that McKinsey received was 

basically a data dump: 

The total database exceeded 7 terabytes of data for claims only. The Clean 

Team members wrote hundreds of queries and scripts to summarize the 

information. These queries and scripts were written in SQL and were 

programs that summarized the data so that it could be further organized and 

analyzed. These scripts queried the different databases containing claims, 

enrollment, and provider information, and merged information together, 

summarizing the billions of rows of information until the Clean Team 

members got to a small enough output, usually a few hundred thousand 

output lines. These outputs were put into Microsoft Excel Worksheets, from 

which the team performed additional analysis to get to the efficiency 

amounts. . . . Many of these queries took several days to process. In addition, 

prior to and in writing these queries and scripts, the Clean Team spent 

countless hours with Anthem and Cigna SMEs understanding each 

company’s precise data definitions, and the criteria needed to get an “applesto-apples” comparison of Anthem and Cigna data.

JX 2547 ¶ 5. At trial, Paul explained the difference between a data dump and what Anthem 

wanted:

It’s the equivalent of saying -- if somebody wanted a book on how to repair 

a bike and they went to the library, the librarian saying it’s in here 

somewhere, go find it. And what we wanted them to do was to pull up the 

book and take us to the page and show us how to repair a bike. So it was 

inadequate.

Paul Tr. 630. 

McKinsey did not receive any Cigna analyses of how its utilization programs 

reduced the cost of care. McKinsey also did not receive longitudinal data showing how 

Cigna’s value-based programs improved patient health and reduced cost over time, which 

was Cigna’s core value proposition. See DeRosa Tr. 1694–96. Cordani testified at trial in 

this action that Cigna typically used the rate of growth in medical expenses as its principal 

benchmark for cost trends. Cordani Tr. 1749. During trial in the Antitrust Litigation, 
226

Cordani explained that a brief snapshot of claims data fails to take into account the longterm benefits of improved utilization, “both utilization in terms of the number of services 

[and] in the mix of the services, as well as the venues in which the services are consumed.”

JX 2660 at 442. Cigna’s counsel emphasized the same points when cross-examining Israel

in an effort to undermine his efficiency estimates. See JX 2660 at 2077–90. Cigna therefore 

cannot persuasively rely on Singhal’s testimony to claim that it provided Anthem with 

information about utilization. Analyzing claims data could provide a basic level of insight, 

but not the more nuanced and detailed analysis that Cigna could have conducted.

Cigna also cites the testimony of Israel, Anthem’s economics expert, who performed 

his own analysis of medical cost savings.355 Israel testified that his team calculated potential 

medical cost savings using the claims data that was produced to the DOJ. JX 2660 at 1844. 

The District Court asked about any differences between the claims data that Israel used and 

what McKinsey possessed. Id. Israel responded that the claims data was “fairly complete”

and that he had no need to rely on McKinsey’s data. Id. When Cigna’s counsel crossexamined Israel and sought to impeach his analysis by establishing that he did not have 

access to data on utilization, Israel responded that the purpose of his analysis was “to 

calculate the effect of reduced discounts.” JX 2660 at 2088. He testified that he did not 

conduct “an analysis to compare the success of [the companies’] programs or to claim any 

additional benefit from applying those the merged firm.” Id. at 2087. When Israel testified 

that he had sufficient data for his analysis, he was speaking about the analysis he conducted, 

 

355 See CDX 4; Dkt. 700 at 67; Dkt. 711 at 7.
227

not the analysis that Cigna now tries to imply that he conducted.356 Cigna therefore cannot 

persuasively rely on Israel’s testimony to claim that it provided Anthem with information 

about utilization. Israel only had claims data.

In this litigation, Cigna has argued that claims data is sufficient to calculate the 

effect of utilization. See Dkt. 711 at 8. Cigna executive Matthew Manders testified that the 

standard measure of utilization is expenditures per member, per month (“PMPM”), and 

that claims data is sufficient to perform that calculation.357 Manders made the same point 

that Singhal made in the Antitrust Litigation, namely that claims data is sufficient to 

compare two different programs (or plans or service categories) based on total spending 

PMPM. If the populations are comparable and the analysis was normalized for different 

discounts, then any remaining variation in spending should be due to utilization. See 

JX 2546 ¶ 82. The resulting comparison reveals which program saved more healthcare 

expense during the relevant period. The resulting comparison does not show whether 

additional benefits could be achieved by combining aspects of the two programs, nor does 

it show how spending would change over a longer time horizon.358

 

356 See JX 2660 at 2087; Curran Tr. 1619.

357 Manders Tr. 2560–62. Manders also testified that Cigna used a different measure 

of risk-adjusted expenses, which requires information about health risks in the underlying 

population. Id. at 2561. He did not testify that Anthem received that data. Id. at 2652.

358 Cigna also cites Hocevar’s trial testimony about providing detailed data to 

Anthem, but the cited testimony does not support this assertion. See Dkt. 711 at 8 (citing 

Hocevar Tr. 2285–87). Hocevar only testified that Cigna provided “utilization claim data,”

then testified could not recall what was included in the data. See Hocevar Tr. 2286–87.
228

Cigna thus provided claims data that was sufficient to enable Anthem to compare 

spending on a PMPM basis over a short time horizon. Cigna did not provide Anthem with 

its own analyses of utilization or with longer-term data. That finding is supported by direct 

testimony by Anthem witnesses.359

Cigna separately argues that even if it did not otherwise provide Anthem with 

information on utilization, Cadwalader provided the necessary information in May 2016 

when commenting on the medical cost synergies white paper. See Dkt. 700 at 33–34. On 

May 4, 2016, Cadwalader sent a lengthy email to White & Case that was highly critical of 

the draft white paper and argued that Anthem should use data on Cigna’s risk-adjusted cost 

of care (PMPM) to show that the Merger could achieve additional efficiencies by applying 

Cigna’s strategies. See JX 1789. Anthem asked for the data to make this argument. In 

response, Cadwalader emailed to White & Case and Anthem’s economist approximately a 

dozen PowerPoint presentations from 2012, 2013, and 2014. See JX 4070. The

presentations were high-level materials that Cigna used when pitching potential customers 

to argue that Cigna could lower their cost of care despite not having the best network 

discounts.360 In a subset of those presentations, Cigna compared its claims data from with 

third-party claims data to show how its total cost of care (PMPM) compared with thirdparty claims data in the New York, Atlanta, Houston, and Southern California markets. See 

JX 4070.

 

359 See Paul Tr. 625–27; Rosen Tr. 909–10; Curran Tr. 1618–20.

360 See Paul Tr. 628–29, 674, 737–39; see also Rosen Tr. 913–14.
229

Using these materials, Anthem’s economists suggested the following language for 

the white paper:

[I]n 2015 the allowed charges for Cigna members were $252 PMPM, while 

Anthem’s were $295 PMPM, or l7 percent more. Cigna estimates that its 

medical cost trend is between 2 percent and 6.75 percent less than some of 

its competitors on a cumulative basis. Cigna’s estimates indicate that 

between 2008 and 2015 Anthem’s medical costs increased by 7.1 percent, 

while Cigna’s grew by 5.8 percent, or 1.3 percentage points less. If this 

reduction in medical cost growth could be applied to Anthem’s in footprint 

medical costs, total medical costs could be reduced by $704 million.

JX 4096 at ’984 (footnotes omitted). 

Anthem’s lawyers, however, could not verify the calculation, which conflicted with 

the analyses that Anthem’s experts had developed based on claims data.361 Anthem’s 

lawyers viewed the information that Cigna had provided as too generalized to be persuasive 

to the DOJ.362 Cadwalader failed to provide additional detail in response to Anthem’s 

requests.

363 Anthem’s lawyers therefore dropped the language from the white paper.364

Cigna argues that this incident shows that it fulfilled its obligation to provide 

information on utilization to Anthem, but the back-and-forth suggests the opposite. If 

Cigna already had provided sufficient information about its utilization programs, then 

 

361 See JX 4098; JX 4184; Paul Tr. 674, 737–38; Rosen Tr. 840–50, 858–59, 909–

10, 915–16.

362 See Paul Tr. 737–38; Rosen Tr. 859, 913–15. Rosen explained that some of the 

cost-trend information in the decks relied on numbers from Cigna analyst calls, which was 

not sufficient for a submission to the DOJ. Rosen Tr. 913–14.

363 JX 3118; Paul Tr. 39–40.

364 JX 4098; see JX 1953; Rosen Tr. 855.
230

Cadwalader would not have needed to email a handful of PowerPoint presentations to 

White & Case and suggest that Anthem use them to revise a white paper. The exchange 

also illuminates a particular type of information that Cigna failed to provide: how its 

programs reduced health care spending over time by limiting the rate of growth. That was 

information that McKinsey could not derive from a snapshot of claims data.365

Although the record shows that Cigna did not provide Anthem with important data 

on utilization, Cigna proved that Anthem made a tactical choice not to pursue an 

efficiencies defense based on NewCo’s ability to use Cigna’s programs to limit the total 

cost of care. As the DOJ’s investigation unfolded, it became clear that the DOJ sought to 

portray Cigna as a uniquely innovative maverick. To respond to this argument, Anthem 

sought to prove that Anthem, not Cigna, was the more innovative company and had 

developed better programs to control the total cost of care. When drafting the white papers, 

Anthem prioritized its own medical management programs and utilization rates. Anthem 

 

365 Cigna also relies on an email that Zielinski sent to Jones in early May 2016 in 

which he stated that Anthem was not seeking additional information for the efficiencies 

white papers but only seeking to share data which already existed in the data room. See 

Dkt. 700 at 67 (citing JX 1815). This email addressed the actual analyses in the white paper, 

which were based on claims data, not other analyses that Anthem might have conducted 

with additional data. See Paul Tr. 694–95, 736. To similar effect, Matheis testified during 

a deposition taken by the DOJ in July 2016 that he believed Anthem had all the data that it 

needed from Cigna to analyze efficiencies. See JX 2593 at 178–79. The District Court cited 

this testimony, writing that “[a]ccording to Matheis, the fact that Cigna disengaged from 

the integration planning effort in the spring of 2016 should not undermine confidence in 

the projected medical cost savings since they were based on actual claims data.” Dist. Ct. 

Op., 236 F. Supp. 3d. at 233. Like Israel, Matheis was describing the analyses that Anthem 

prepared using claims data, not other analyses that Anthem might have conducted with 

additional data. Drozdowski testified to the same effect in this litigation. See Drozdowski 

Tr. 991–94.
231

did not want to emphasize Cigna’s programs on the provider side because it risked playing 

into the DOJ’s argument that Cigna was uniquely innovative.366 During trial in the Antitrust 

Litigation, Anthem continued this strategy.367

Anthem failed to prove that Cigna’s withdrawal from integration planning affected 

Anthem’s ability to present an efficiencies defense that relied on NewCo’s ability to use 

Cigna’s programs to control the total cost of care. Anthem made a tactical choice to deemphasize Cigna’s programs on utilization in response to the DOJ’s claim that Cigna was 

uniquely innovative. 

d. Cigna’s Disengagement From Integration Planning Contributed 

Materially To The Failure Of The No Injunction Condition.

Anthem proved that Cigna’s withdrawal from integration planning contributed 

materially to the failure of the No Injunction Condition by leading to at least two findings 

in the Antitrust Decisions. But as discussed below, Cigna’s withdrawal did not contribute 

materially to the principal bases for the Antitrust Decisions, which were that the medical 

cost savings were not merger-specific and that Anthem had not shown a viable means of 

achieving them. See Part III.D, infra.

Anthem’s principal defense in the Antitrust Litigation was that “any anticompetitive 

effects will be outweighed by the efficiencies [that the transaction] will generate.” Dist. Ct. 

 

366 See JX 1886; Curran Tr. 1389; Rule Tr. 3076. See generally Part II.I.2 & II.J.3, 

supra.

367 See, e.g., JX 2660 at 1650, 1820, 1978; see also Rule Tr. 3111–12 (describing 

testimony of Ken Goulet). See generally Part II.K.6, supra.
232

Op., 236 F. Supp. 3d. at 181. As “the centerpiece of its defense,” Anthem asserted that 

NewCo’s national account customers “will save a combined total of owner $2 billion in 

medical expenditures because Cigna members will be able to access the more favorable 

discounts that Anthem has negotiated with its provider network” and vice versa. Id.; see 

id. at 231.

For this defense to prevail, Anthem needed to prove that the medical cost savings 

were both merger-specific and verifiable. Dist. Ct. Op., 236 F. Supp. 3d. at 181; see id. at 

236–37. The District Court identified multiple reasons why the medical cost savings were 

neither merger-specific nor verifiable. 

Anthem proved that Cigna’s withdrawal from integration planning led to one of the 

District Court’s reasons for finding that the medical cost savings were not verifiable. After 

discussing the hostility between the two companies, the District Court described the 

integration planning process as “stalled and incomplete” and noted that “[m]uch of the 

work has not proceeded past the initial stage of identifying goals and targets to actually 

specifying the steps to be taken jointly to implement them.” Id. at 183. The District Court 

also observed that “the [integration] effort has not yet proceeded from general ‘high level’

planning to the essential progress of detailing actual strategies and ‘budget level’

initiatives,” that “Cigna’s input is required before the real work can be done,” and that “the 

two parties have not been working together for some time.” Id. The District Court later 

mentioned “the highly unfinished nature of the planning to capture the G&A efficiencies 

in particular” and noted that “the final quantification of the synergies [and] the 

development of detailed implementation plans, and the establishing of an organizational 
233

structure remain in abeyance.” Id. at 246. Cigna’s withdrawal from the integration planning 

process led directly to these findings.

When discussing why the parties were not likely to be able to generate the claimed 

efficiencies, the District Court also cited the disputes over the leadership selection process, 

which was an aspect of integration planning. See id. at 243. The District Court found that 

“having the leadership in place is fundamental to undertaking an integration, but the two 

firms here have not yet agreed on the identity of a single member of the new company’s 

management structure” beyond Swedish and Cordani. Id. Cigna had refused to cooperate 

with the leadership selection process and had restricted the integration planning process as 

a means of blocking leadership selection. See Part II.G, supra. Cigna’s actions led directly 

to these findings.

In affirming the District Court’s finding that the savings that Anthem claimed were 

not sufficiently verifiable, the Majority quoted the District Court’s observation that “‘the 

Department of Justice is not the only party raising questions about Anthem’s 

characterization of the outcome of the merger’ because Cigna itself had ‘provided 

compelling testimony undermining the projections of future savings.’” Cir. Ct. Op., 855 

F.3d at 360 (quoting Dist. Ct. Op., 236 F. Supp. 3d. at 182). Cigna’s actions led directly to 

the findings that the Majority adopted. 

Cigna points out that in the first footnote in its decision, the Majority de-emphasized 

the personal disputes between Anthem and Cigna executives, writing “[t]hat their 

relationship may have deteriorated has little to do with the anticompetitive effects of the 

proposed merger.” Id. at 348 n.1. As to the DOJ’s prima facie case, that was true. The 
234

disputes did not affect the market concentration calculations or the fact that the Merger 

would combine two of the four largest health care insurers. But the disputes had 

implications for Anthem’s ability to support its efficiencies defense, and it led to Cordani 

and other Cigna witnesses giving the “compelling testimony undermining the projections 

of future savings” on which the District Court and the DC Circuit Court relied. Id. at 360 

(quoting Dist. Ct. Op., 236 F. Supp. 3d at 182). 

In light of these aspects of the Antitrust Decisions, Cigna’s withdrawal from 

integration planning contributed materially to the issuance of the Antitrust Decisions and 

led directly to certain findings in those decisions. Cigna’s withdrawal from integration 

planning did not, however, cause Anthem to decide to ground its efficiencies defense on 

best-of-breed discounts, nor did it cause Anthem to de-emphasize NewCo’s ability to use 

Cigna’s medical management programs to reduce the total cost of care. As discussed 

below, Anthem’s tactical decisions on those points have critical implications for the 

Cigna’s ability to prove that the No Injunction Condition would have failed even if Cigna 

had fulfilled its contractual obligations under the Efforts Covenants. See Part III.D, infra.

3. Anthem’s Claim Against Cigna For Obstructing A Divestiture

Anthem proved that Cigna breached the Regulatory Efforts Covenant and the 

Regulatory Cooperation Covenant by opposing a divestiture. Anthem also proved that 

Cigna’s opposition contributed materially to the failure of the No Injunction Condition by 

making it less likely that the DOJ would approve the Merger and more likely that the DOJ 

would file the Antitrust Litigation. Cigna’s opposition to divestitures also prevented 

Anthem from pursuing a divestiture on its own and “litigating the fix.” The absence of a 
235

divestiture addressing the DOJ’s claims regarding competition in local markets made it less 

likely that the District Court would approve the Merger and that the DC Circuit Court 

would take a different view on appeal. 

a. Cigna’s Contractual Obligations To Support A Divestiture

Cigna was contractually obligated under the Efforts Covenants to support a 

divestiture. Although both the Reasonable Best Efforts Covenant and the Regulatory 

Efforts Covenant could provide the source of that obligation, the Regulatory Efforts 

Covenant speaks to it directly. 

Under the Reasonable Best Efforts Covenant, Cigna was obligated to “use its 

reasonable best efforts to take, or cause to be taken, all actions, to do, or cause to be done, 

all things reasonably necessary to satisfy the conditions to Closing set forth herein and to 

consummate the Merger[].” MA § 5.3(a). One of the conditions to closing was the 

Governmental Approval Condition, which required that the parties obtain regulatory 

approval. If a divestiture was reasonably necessary step to obtain regulatory approval, then 

Cigna was obligated to use its reasonable best efforts to achieve a regulatory divestiture.

For purposes of seeking regulatory approval, the Regulatory Efforts Covenant 

defined reasonable best efforts to include “taking any and all actions necessary to avoid 

each and every impediment under the HSR Act . . . so as to enable the Closing to occur as 

promptly as practicable . . . .” MA § 5.3(b). Cigna further was obligated to take any action 

“necessary and appropriate” (i) to “obtain all Necessary Consents,” including antitrust 

approval, (ii) to “resolve any objections that may be asserted by or on behalf of any 

Governmental Entity with respect to the mergers and the other transactions contemplated 
236

hereby,” and (iii) to “prevent the entry of . . . , any order that would prevent, prohibit, 

restrict or delay the consummation of the Merger[].” Id. If the DOJ raised an objection to 

the Merger and a divestiture was “necessary and appropriate” to resolve the objection, then 

Cigna was obligated to pursue the divestiture. MA § 5.3. 

The Regulatory Cooperation Covenant allocated responsibility for the regulatory 

strategy to Anthem. See MA § 5.3(e). To comply with the Regulatory Cooperation 

Covenant, Cigna was obligated to follow Anthem’s strategy. If Anthem believed that 

making a divestiture was necessary and appropriate, then Cigna was obligated to pursue 

that strategy. Cigna could not refuse simply because it disagreed with Anthem’s strategy 

or thought the strategy was unlikely to succeed.

Cigna’s obligation to support a divestiture thus could arise under either the 

Reasonable Best Efforts Covenant or the Regulatory Efforts Covenant, but the latter is the 

better fit. Anthem’s efforts to pursue a divestiture responded to specific areas of concern 

that the Staff identified on June 10, 2016. See Part II.J.12, supra. One of the Staff’s 

concerns was the local market for commercial health insurance sold to large group 

employers in thirty-five areas in the Anthem Blue States. Another concern was the local 

market for purchasing provider services in the same thirty-five areas. Anthem sought to 

address those concerns through a divestiture. Cigna’s opposition to a divestiture therefore 

is best analyzed under the Regulatory Efforts Covenant.
237

b. Cigna Breached The Regulatory Efforts Covenant And The 

Regulatory Cooperation Covenant By Opposing A Divestiture.

Anthem proved that Cigna opposed Anthem’s efforts to complete a divestiture.

Cigna’s opposition to a divestiture both breached the Regulatory Efforts Covenant and 

constituted a reversal of Cigna’s position on whether divestitures were warranted.

From the outset of their discussions, Anthem and Cigna expected the DOJ to clear 

the Merger, conditioned on NewCo divesting overlapping business in local markets within 

the Anthem Blue States. When Cigna was evaluating a transaction with Anthem, the Cigna 

ELT identified divestitures as one of the primary means of both complying with the Blues 

Rules and obtaining antitrust approval.368 Before approving the Merger, the Cigna Board 

understood that divestitures likely would be required:

 In June 2015, the Cigna ELT told the Cigna Board that if the DOJ had to confront 

both an Anthem-Cigna deal and an Aetna-Humana deal, then “the most likely 

scenario (~65%~75%) is that both are cleared subject to local divestitures consistent 

with past DOJ precedent in the industry.” JX 209 (emphasis added). The analysis 

stressed that “[i]n order to maximize the odds of clearance, it should be clear to the 

DOJ that the parties would put up a fight in court,” noting that “DOJ has a mixed 

record in litigation and the Front Office may be dissuaded from suing based on 

 

368 See JX 78 at ’721 (Cigna analysis noting that “[l]ocal market depth may require 

divestitures”); JX 79 (McCarthy and Gray discussing that “[r]egulatory divestitures would 

be best from Cigna”); JX 78 at ’721 (Cigna evaluation of transaction with Anthem; “Local 

market depth may require divestitures”); JX 99 at ’545 (Cigna ELT memorandum on deal 

with Anthem noting that “Regulatory divestitures, if required, will tend to be [Cigna] 

revenue/membership in the license states”); JX 531 (Cigna executive writing “any 

divestitures more likely from our side”); Zielinski Tr. 63 (explaining that “even before we 

signed the merger agreement, we talked about that given this transaction, it was very likely 

that the government would request as to do divestitures as part of the remediation plan 

[and] in order to address that, we would divest Cigna assets in our 14 Blue states”); Gray 

Dep. 294 (agreeing that during 2014 and early 2015, Cigna contemplated divestitures as 

part of transaction with Anthem); id. at 322 (agreeing that the divestitures “would include 

Cigna or Cigna-associated accounts and clients”). See generally Part II.C & D, supra.
238

concerns about arguments that are more likely to resonate in a court than with Staff.”

Id. ’484. The analysis also noted that “reasonable remedies can sometimes still be 

achieved after a suit has commenced, even when national theories are asserted.” Id.

at ’485. 

 Later in June 2015, the Cigna ELT told the Cigna Board that “[a]t a minimum, 

divestitures in local geographies likely would be required for antitrust clearance . . 

. , although litigation challenges . . . are a distinct possibility . . . .” JX 4000 at ’240. 

 In August 2015, approximately one month after the Merger Agreement was signed, 

Cigna’s regulatory counsel expressed similar views. Cigna’s counsel posited that 

“[l]ocalized remedies are sufficient to address both potential customer and any 

provider monopsony concerns, consistent with past DOJ precedent.” JX 567 at ’584. 

Cigna’s counsel anticipated the possibility of agreeing to divestitures and litigating 

the fix, noting that “[d]oing the deal despite divestitures indicates the deal is not 

about creating market power, but rather about creating pro-competitive 

efficiencies.” Id.; see also JX 1020 (Cigna timeline for regulatory approval from 

January 2016, noting that “[r]emedies could include divestitures”). 

After the Staff identified its areas of concern, Anthem moved quickly to develop a 

divestiture proposal that focused on the thirty-five local markets that the DOJ had 

identified. A divestiture could have addressed the DOJ’s concern about excessive 

concentration in the sale of commercial health insurance in those markets and the concern 

about monopsony in the purchase of healthcare services in those markets. A divestiture 

also would have shown the DOJ that the parties were committed to the Merger. No one 

regarded the DOJ’s concern about public exchanges as terribly serious, and the DOJ later 

dropped that claim voluntarily. See Dist. Ct. Op., 236 F. Supp. 3d at 187 n.2. A divestiture 

thus could have substantially narrowed the Antitrust Litigation to a dispute over national 

market issues.
239

By June 2016, however, the Cigna ELT had turned solidly against the Merger, and 

they saw the failure to obtain regulatory approval as their ticket out. Rather than helping 

with the divestiture plan, Cigna raised roadblocks: 

 Anthem asked Cigna to help identify buyers. Cigna refused. 

 After Cordani put a stop to divestiture planning in May 2016, Cigna made no effort 

to develop a remediation plan. 

 Cigna entered into a standard NDA agreement with Centene, but only provided 

Centene with a one-page spreadsheet of information.

 Before Cigna provided additional data to Centene, Cigna insisted on a second and 

non-market NDA that included broad standstill provisions. 

 Even after entering into a second NDA with Centene, Cigna refused to provide 

meaningful due diligence. 

 Cigna refused to enter into an NDA with the two Blues buyers unless the DOJ 

indicated that a Blues buyer was a viable option.

 Cigna forced Anthem to raise the viability of a Blues buyer with the DOJ. 

 Cigna contacted the Staff unilaterally to find out if the DOJ would consider a sale 

to a Blues buyer.

 Cigna objected that Anthem’s divestiture proposal only involved Cigna’s assets, 

which had been the plan all along.

 Cigna refused to advocate in favor of a Blues buyer. 

 Once Anthem made a specific divestiture proposal, Cigna refused to advocate in 

favor of it. 

See Part II.J.2–3, supra. Taken as a whole, Cigna’s actions breached the Regulatory Efforts 

Covenant.

Cigna also took actions that independently breached the Regulatory Efforts 

Covenant. Under the Contracting Requirement, Cigna was obligated to “agree to . . . enter 
240

into . . . any contract” if “necessary and appropriate” to obtain regulatory approval. MA § 

5.3(b)(iii). Entering into NDAs with the potential buyers met this standard. Under the 

Regulatory Cooperation Covenant, deciding whether or not buyers were viable was not 

Cigna’s decision to make. 

In addition, under the Regulatory Efforts Covenant, Cigna was obligated to advocate 

in favor of a Blues buyer. As a company that competed daily for business against the nonAnthem Blues, Cigna could have explained that it had lost business to non-Anthem Blues 

and made compelling arguments in favor of them as divestiture buyers. See Paul Tr. 647–

48; Zielinski Tr. 55. Cigna breached its obligations under the Regulatory Efforts Covenant 

by refusing to support a Blues buyer. Cigna also breached the Regulatory Cooperation 

Covenant by forcing Anthem to raise the viability of the Blues buyers when introducing its 

divesture proposal to the DOJ, then by contacting the DOJ unilaterally to ask whether a 

Blues buyer was viable. 

In its post-trial briefing, Cigna never goes so far as to maintain that its opposition to 

a divestiture did not breach the Regulatory Efforts Covenant and the Regulatory 

Cooperation Covenant. Cigna instead argues that its actions could not have been 

problematic because the DOJ was not interested in a divestiture remedy and Anthem’s 

proposal would not have addressed all of the DOJ’s concerns. Those are causation 

arguments and addressed in the next section. 

Cigna also attacks Anthem for not engaging earlier and to a greater degree with the 

DOJ. Based on what the parties knew at the time, Anthem pursued a viable regulatory 

strategy. The parties’ regulatory counsel had discussed divestitures in August 2015, then 
241

again in December 2015. The lawyers decided that the process was not far enough along 

to plot out specific divestitures and agreed to wait to make a proposal until the DOJ had 

evaluated the Merger and identified its concerns.369

Cigna stresses a discussion during a meeting of the Steering Committee in March 

2016, when Cigna argued for submitting a remediation proposal to the DOJ. Using one of 

the escalation strategies set out in Project Alpha, Cigna had withdrawn from the integration 

planning process two weeks earlier, citing the premise that resources needed to be allocated 

to regulatory approval. During the meeting, Jones thoroughly criticized Anthem’s strategy 

for obtaining regulatory approval, including Anthem’s plan to wait for the DOJ to identify 

its concerns before making a divestiture proposal. Anthem continued to believe that it was 

better to wait for the DOJ to identify its concerns before making a proposal.370

 

369 See Part II.G.10, supra. Consistent with this strategy, Swedish stated in an 

interview with the press in October 2015 that Anthem had not made a divestiture proposal 

and that Anthem was “not expecting divestitures.” JX 4186; see JX 1863 at 258. Cigna 

regards this statement as a blunder, but that assessment seems overblown. Swedish only 

said that Anthem was not expecting divestitures, not that Anthem would not agree to or 

consider divestitures. Anthem and Cigna’s joint proxy statement had identified as a risk 

factor that divestitures could be required, and in their September 2015 presentation to the 

DOJ, the parties stressed their commitment to engagement and cooperation with the DOJ. 

See Part II.F.1 & II.F.2.b, supra. That said, reasonable minds could differ about the effect 

of Swedish’s comment, and by February 2016, some within Anthem viewed the statement 

as a mistake. JX 1352; see Zielinski Tr. 480–81. Later that month, in a meeting with the 

DOJ on February 17, 2016, Anthem made a point of signaling that it was prepared to 

discuss divestitures, but asked the DOJ to provide guidance on what types of divestitures 

would be helpful. See JX 1292; JX 1326. After the meeting with the DOJ, Anthem’s 

counsel prepared and sent Cigna’s counsel a discussion document about potential 

divestiture strategies that built on concepts that counsel had discussed in December 2015.

See JX 901; JX 1304. 

370 See Part II.H.2, supra. Even before Cigna started criticizing Anthem’s regulatory 

strategy as part of its effort to escape from the Merger Agreement, the contemporaneous 
242

Given how badly the regulatory process turned out, it is easy to question Anthem’s 

strategy, but Anthem adopted a reasonable approach.371 Under the Regulatory Efforts 

Covenant, Anthem had the right to determine the regulatory strategy. Cigna was obligated 

to accept Anthem’s judgment and follow Anthem’s lead. Once the DOJ identified the 

thirty-five local markets as an area of concern, and once Anthem opted to pursue a 

divestiture involving those markets, Cigna was required to support Anthem’s divestiture 

efforts by identifying potential buyers, assisting with the development of a divestiture plan, 

entering into NDAs, providing due diligence, and advocating for the buyers and the 

divestiture proposal to the DOJ. Cigna breached its obligations by doing none of those 

things.

c. Cigna’s Opposition To A Divestiture Contributed Materially To 

The Failure Of The No Injunction Condition.

Anthem proved that Cigna’s opposition to a divestiture contributed materially to the 

failure of the No Injunction Condition. First, Cigna’s opposition made it less likely that the 

DOJ would settle in exchange for a divestiture remedy. Second, Cigna’s opposition 

prevented Anthem from lining up a divestiture and litigating the fix. Among other things, 

a divestiture would have eliminated one of the bases on which the District Court enjoined 

 

documents support a finding that Cigna wanted greater and more proactive engagement 

with the DOJ. See, e.g., JX 768 at ’844; JX 991 at ’002; JX 1020 at ’130; JX 1359; JX 

1368; Zielinski Tr. 478–79. Zielinski does appear guilty of giving short shrift to Jones’

input. See, e.g., JX 769 at ’954; JX 814 at ’506; JX 2067 at ’505.

371 See JX 2972 ¶¶ 55–56; JX 2973 ¶¶ 32, 84.
243

the Merger—the degree of concentration in the commercial healthcare market for large 

employers in Richmond, Virginia. 

Anthem’s antitrust experts explained persuasively that divestitures play a critical 

role in obtaining regulatory approval and are the principal means by which challenges to 

mergers are resolved.372 The DOJ favors settlements to conserve resources and minimize 

litigation risk. See JX 2972 ¶¶ 48–49. Although most settlements take place at the precomplaint stage, cases are often resolved consensually even after the DOJ files suit.373

Parties also can improve their negotiating leverage by lining up a divestiture and litigating 

the fix. See id. ¶¶ 84–87. For serious settlement negotiations to take place, the parties to a 

merger need to identify committed, qualified buyers who can provide a structural solution 

by acquiring overlapping assets. See JX 2972 ¶¶ 48–49. The parties’ regulatory counsel 

 

372 See JX 2972 ¶¶ 20, 47, 60 (estimating that the DOJ resolves over 96% of the 

merger investigations in which it has identified competitive concerns, typically without 

filing litigation, by approving a voluntary modification of the transaction or by entering 

into a consent decree); JX 2973 ¶¶ 6, 25, 66–68 (calculating that federal antitrust regulators 

only challenge 2.6% of HSR-notified mergers, with about 58% of those challenges being 

resolved).

373 See JX 2972 ¶¶ 20, 48. 50. Between 2002 and 2017, the DOJ challenged 

approximately 246 mergers. Only nine cases, or less than 4%, were litigated to judgment. 

Id. ¶¶ 51–52. Of the 246 challenges, fifty-nine were resolved without the filing of a formal 

complaint. The DOJ filed suit in 140 cases, but in 106 of those cases, filed a proposed 

consent decree along with the complaint. In other words, those were cases in which a 

settlement already had been reached. The DOJ settled eleven other cases after the 

complaint was filed. See id. ¶ 54. Most notably, in the US Airways-American Airlines 

merger case in 2013, the DOJ settled two weeks before trial and three months after the 

DOJ, six states, and the District of Columbia had filed suit. Id. ¶ 79. The DOJ also sued to 

block Anheuser-Busch’s acquisition of Grupo Modelo, but agreed to a settlement three 

months later. Id.
244

expressed similar views when evaluating the Merger before the Cigna ELT turned against 

it. See Part II.D.3, supra.

Most clearly, Cigna’s opposition to a divestiture contributed materially to the failure 

of the No Injunction Condition by preventing Anthem from mooting the District Court’s 

alternative basis for issuing the permanent injunction: the degree of market concentration 

in the commercial healthcare market for large employers in Richmond, Virginia. See Dist. 

Ct. Op., 236 F. Supp. 3d at 258; see also Cir. Ct. Op., 855 F.3d at 367. A divestiture could 

have removed Richmond and other local markets from the case, making it less likely that 

the District Court would enjoin the Merger.

More broadly, by refusing to help identify buyers, by putting up roadblocks through 

a non-market NDA, and by resisting due diligence, Cigna eliminated any chance that a 

divestiture could be used to achieve regulatory clearance.

374 Instead, Cigna questioned the 

viability of the Blues buyers, thereby signaling to the DOJ that Cigna opposed the 

Merger.375

To contend that its opposition to a divestiture could not have had any effect, Cigna 

has asserted that by the time the Staff identified its concerns about the Merger on June 10, 

2016, it already was too late to craft a divestiture remedy. See Dkt. 700 at 74–75. That is 

not accurate. Despite Cigna’s opposition, Anthem formally presented the DOJ with a 

 

374 See JX 2972 ¶ 77; JX 2973 ¶¶ 76, 92–93.

375 See JX 2972 ¶¶ 69–70; Paul Tr. 644–47, 649, 658; Rosen Tr. 791–92.
245

divestiture proposal on July 10, 2016. See JX 2225. With Cigna’s cooperation, there was 

adequate time to complete a deal. See Paul Tr. 637-38.

Cigna also argues that the DOJ was skeptical about Anthem’s proposed remedy. See 

Dkt. 700 at 84. Anthem’s lead regulatory counsel testified credibly that this was the DOJ’s 

customary approach. In his experience, whenever regulatory counsel presented a 

divestiture proposal to the DOJ, they would resist and raise questions, and “what they are 

anticipating and fully expecting is that that buyer is going to come in with a business plan, 

with financials that show that it can profitably run that business on day one.” Paul Tr. 645.

Cigna’s opposition to a divestiture prevented any potential buyers from advocating in favor 

of a deal. Anthem’s antitrust expert opined persuasively that Anthem’s proposal “offered 

a promising resolution of the investigation” and “was very much in line with what the DOJ 

had accepted in other horizontal merger cases.”

376

Cigna ultimately hangs its hat on the fact that the DOJ eventually said that a Blues 

buyer was not suitable. See Dkt. 700 at 84. Whether the DOJ believed a Blues buyer was

unsuitable was not dispositive because Anthem could have entered into a divestiture 

agreement with a Blues buyer and litigated the fix. Cigna’s opposition to a divestiture 

prevented Anthem from pursuing this strategy and contributed materially to the failure of 

the No Injunction Condition.

 

376 JX 2972 ¶¶ 62–63; see id. ¶ 64 (“Anthem’s strategy was exactly what I would 

expect experienced antitrust counsel to pursue as appropriate.”); id. ¶¶ 64–65 (opining that 

the proposal “should have opened the door to the type of ongoing dialogue between the 

merging parties’ counsel and DOJ . . . over possible settlement proposals to resolve the 

investigation”).
246

4. Anthem’s Claim Against Cigna For Resisting Mediation

Anthem proved that Cigna breached the Efforts Covenants by resisting mediation 

during the Antitrust Litigation. Anthem also proved that Cigna’s refusal to mediate during 

the Antitrust Litigation contributed materially to the failure of the No Injunction Condition 

by making it less likely that the DOJ would settle. Particularly when considered in 

conjunction with Cigna’s opposition to a divestiture, Cigna’s opposition to mediation made 

it significantly more likely that the No Injunction Condition would fail. 

a. Cigna’s Contractual Obligations To Engage In Mediation

Cigna was contractually obligated under the Efforts Covenants to support 

mediation. As with Cigna’s obligation to support a divestiture, this obligation can be 

derived from either the Reasonable Best Efforts Covenant or the Regulatory Efforts 

Covenant. The Regulatory Efforts Covenant is more specific and therefore is the more 

appropriate clause to analyze. 

The Regulatory Efforts Covenant obligated Cigna to “tak[e] any and all actions 

necessary to avoid each and every [legal impediment] so as to enable the Closing to occur 

as promptly as practicable . . . .” MA § 5.3(b). Cigna further was obligated to take any 

action “necessary and appropriate” to “resolve any objections that may be asserted by or 

on behalf of any Governmental Entity” and to “prevent the entry of . . . , any order that 

would prevent, prohibit, restrict or delay the consummation of the Merger[].” Id. Cigna 

was obligated to engage in mediation as a step that was “necessary and appropriate” to 

resolve the objection raised by the Governmental Entity and to “prevent the entry of . . . , 

any order that would prevent, prohibit, restrict or delay the consummation of the Merger.”
247

MA § 5.3. Under the Regulatory Cooperation Covenant, once Anthem determined that 

engaging in mediation was necessary and appropriate, then Cigna was obligated to support 

that strategy. Cigna could not refuse simply because Cigna disagreed with Anthem’s 

strategy or thought it was unlikely to succeed.

b. Cigna’s Breached The Regulatory Efforts Covenant And The 

Regulatory Cooperation Covenant By Resisting Mediation.

Anthem proved that Cigna resisted mediation. On multiple occasions, both the 

District Court and a special master appointed by the Court encouraged the parties to 

mediate. Anthem repeatedly asked Cigna to mediate. Cigna never agreed. 

The District Court encouraged mediation on at least three occasions: (i) during early 

case management conference on August 12, 2016, (ii) during a case management 

conference on September 30, and (iii) during an office conference on November 11. The 

special master in the case contacted the parties about mediation on November 13, and again 

on November 23. Each time, Anthem supported mediation. Each time, Cigna obstructed 

Anthem’s efforts to mediate. Anthem also tried to initiate mediation on its own, but Cigna 

refused to support Anthem’s efforts. See Part II.K.3 & 5, supra. 

In this litigation, Cigna claimed that it was willing to mediate. Dkt. 700 at 76 (citing 

JX 2523 at 60). But Cigna always conditioned mediation on Anthem first providing a viable 

divestiture proposal that the DOJ would consider. By doing so, Cigna effectively insisted 

that the parties reach agreement on a framework for settling the case before engaging in 

mediation to develop a possible framework for settling the case. Because of the conditions 

that Cigna imposed, its claims that it supported mediation were illusory.
248

Cigna also argues in this litigation that a letter sent by Anthem on November 16, 

2016, demonstrates that Anthem was not serious about mediation, but only trying to create 

a record for purposes of this litigation. See Dkt. 700 at 58 (citing JX 2648). Cigna points 

out that on November 14, after the DOJ refused to mediate in response to the District 

Court’s third invitation, Zielinski wrote to Swedish in an email, “Mediation is dead. DOJ 

has no interest.” JX 2637. After Zielinski expressed that view, Anthem’s litigation counsel 

sent Zielinski a privileged email, and Anthem then sent the November 16 letter, which 

Zielinski described as “[b]ased on [litigation counsel’s] suggestion.” JX 4176. Anthem 

responds that Judge Levie had just proposed mediation, which prompted the letter. See 

Dkt. 707 at 14–15. It is possible to view Anthem’s letter as having a tactical component 

without discharging Cigna from its obligations to support mediation at earlier points in the 

process.

There was no conceivable harm to Cigna from supporting mediation. See Curran Tr. 

1601–02. Cigna’s persistent refusal to mediate demonstrates that Cigna was actively 

opposing the Merger.

c. Cigna’s Opposition To Mediation Contributed Materially To 

The Failure Of The No Injunction Condition.

Cigna’s failure to support mediation contributed materially to the failure of the No 

Injunction Condition. Cigna’s resistance to mediation made settlement less likely. If the 

case had settled, then the No Injunction Condition would have been satisfied. 

The District Court strongly encouraged the parties to mediate. There was no 

guarantee that mediation would produce a settlement, but Cigna’s opposition to mediation 
249

foreclosed that possibility. Cigna’s resistance reduced the chances of settlement from 

something to zero.

To justify its opposition to mediation, Cigna argues that the DOJ never was willing 

to settle. See CDX 2. For starters, Cigna contributed to the environment in which the DOJ 

took that position by signaling that it was not aligned with Anthem and resisting a 

divestiture remedy. And Cigna’s description of the DOJ’s position is not fully accurate. 

When the District Court first suggested mediation in August 2016, the DOJ responded that 

“[there was] absolutely a willingness” to consider settlement, and clarified, “We’re always 

willing to hear any [settlement] proposals that the defendants have.” JX 2414 at 34. Anthem 

and Cigna could have capitalized on this response. The DOJ’s willingness to settle other 

major cases after filing suit, including on the eve of trial, shows that settlement was not out 

of the question.377

Cigna’s consistent opposition to mediation took the pressure off the DOJ and made 

it less likely that the No Injunction Condition would be satisfied through a mediated 

resolution. Because Cigna opposed mediation, the DOJ did not face any risk that Anthem 

and Cigna would go to the District Court jointly, complain about the DOJ’s refusal to 

 

377 See JX 2972 ¶ 80; see id. ¶¶ 81–82 (describing DOJ’s public opposition to the 

US Airways and Grupo Modelo acquisitions); see also id. ¶ 81 (noting that the settlement 

in the US Airways litigation did not directly address “[m]ost of the competitive harms 

trumpeted in the complaint and in public statements); id. ¶ 82 (making same observation 

regarding Grupo Modelo acquisitions).
250

mediate, and make the DOJ look unreasonable. Cigna’s refusal to mediate meant the DOJ 

never faced any pressure to reconsider its stance.378

Cigna’s resistance to mediation was particularly significant in light of Cigna’s 

earlier opposition to a divestiture. If Cigna had supported a divestiture that addressed the 

problems with the thirty-five local markets, then Anthem could have argued that its 

proposed remedy mooted the DOJ’s claims about excessive market concentration and 

monopsony in those areas. The DOJ dropped its claim about the public exchange markets 

after the District Court questioned the strength of the DOJ’s position. See Dist. Ct. Op., 

236 F. Supp. 3d at 187 n.2. After a local market divestiture, the DOJ would have been left 

with only its challenge to the market for national accounts. Under those circumstances, if 

Cigna had supported mediation when the District Court repeatedly encouraged it, then the 

DOJ would have been more likely to mediate, and the case would have been more likely 

to settle. By both opposing divestitures and resisting mediation, Cigna made it less likely 

that the DOJ would settle.

The strongest evidence that Cigna’s conduct did not affect the DOJ’s position on 

settlement comes from the DOJ’s approach to the Aetna/Humana deal. When advising the 

Cigna Board before entering into the Merger Agreement, the Cigna ELT believed that the 

Merger was “likely to appear to regulators as relatively more complex.” JX 209 at ’483. 

The Aetna/Humana deal was somewhat smaller, weighing in at $37 billion compared to 

the Merger’s $54 billion, and Aetna and Humana were the fourth and fifth largest insurers 

 

378 See JX 2972 ¶ 78; Curran Tr. 1605, 1607–08.
251

of national accounts rather than the second and third. See JX 2314 ¶ 4. There also is 

evidence that Aetna and Humana took a more proactive approach to settlement. See 

Zielinski Tr. 480. Yet the DOJ also sued to enjoin Aetna’s acquisition of Humana. JX 2319. 

These high-level similarities are not enough to defeat Anthem’s showing that 

Cigna’s opposition to mediation contributed materially to the failure of the No Injunction 

Condition. The Aetna/Humana deal doubtless had many twists and turns of its own. At 

most, the example of the Aetna/Humana deal suggests that Cigna’s breaches of the Efforts 

Covenants were not a but-for cause of the DOJ’s failure to settle, but Anthem did not have 

to show causation in fact. Anthem only had to show that Cigna’s breaches made it less 

likely that the No Injunction Condition would be satisfied. Anthem proved that Cigna’s 

conduct had that effect by making settlement less likely.

5. Cigna’s Undermining Of Anthem’s Defense In The Antitrust Litigation

Finally, Anthem proved that Cigna breached its obligations under the Efforts 

Covenants by undermining its defense in the Antirust Litigation. Anthem also proved 

Cigna’s conduct contributed materially to the failure of the No Injunction Condition by 

making it less likely that the District Court would deny the DOJ’s application for a 

permanent injunction or that the DC Circuit Court would take a different view on appeal.

a. Cigna’s Contractual Obligations Regarding The Antitrust 

Litigation

Under the Efforts Covenants, Cigna was obligated to defend against the Antitrust 

Litigation. Here again, Cigna’s obligation could be derived from the Reasonable Best 

Efforts Covenant, but the Regulatory Efforts Covenant addresses the matter explicitly. The 
252

Litigation Requirement obligated Cigna to “oppose [the Antitrust Litigation] fully and 

vigorously,” including “by defending through litigation . . . and vigorously pursuing all 

available avenues of administrative and judicial appeal.” MA § 5.3(e). 

Within this framework, the Regulatory Cooperation Covenant allocated 

responsibility for litigation strategy to Anthem. See MA § 5.3(e). Cigna was therefore 

obligated to follow Anthem’s chosen litigation strategy. The Regulatory Cooperation 

Covenant also required that Cigna to make its legal filings “as promptly as practicable”

and “provide such assistance as [Anthem] may reasonably request.” Id.

b. Cigna Breached The Regulatory Efforts Covenant And The 

Regulatory Cooperation Covenant By Undermining Anthem’s 

Defense.

Anthem proved that Cigna undermined Anthem’s defense in the Antitrust 

Litigation. Although certain aspects of Cigna’s conduct would not have breached its 

obligations if considered in isolation, the totality of Cigna’s conduct breached its 

contractual commitments by a wide margin.

During the Antitrust Litigation, Cigna undermined Anthem’s defense in numerous 

ways:

 Cigna failed to file its answer to the DOJ’s complaint in the Antitrust Litigation as 

promptly as practicable. 

 Cigna failed to make any arguments in support of an expedited trial date.

 Cigna blocked Anthem from contacting seventeen Cigna customers to determine 

whether they would testify as witnesses in support of the Merger.

 Cigna failed to take or defend any depositions other than defending the depositions 

of the six Cigna witnesses.
253

 Cigna elicited deposition testimony from Cordani and two Anthem witnesses that 

was favorable to the DOJ’s case and harmed the defense.

 Cigna proposed trial exhibits that undermined Anthem’s case on efficiencies and 

supported the DOJ’s position that there was a distinct market for the sale of 

insurance for national accounts.. 

 Cigna reversed position one week before trial on who would present Cigna’s 

witnesses.

 Cigna gave Anthem only one hour to prepare each of the three Cigna witnesses and 

discourteously rejected Anthem’s request for more time to prepare the three Cigna 

witnesses.

 Cigna cross-examined Swedish, highlighting the disagreement over Cordani’s 

responsibilities at NewCo and bolstering the DOJ’s argument that the claimed 

efficiencies could not be achieved because of the parties’ disputes. 

 Cigna counsel cross-examined Israel, Anthem’s key expert on medical cost savings, 

questioning his credentials and undercutting the projections on which the 

efficiencies were based. 

 Cigna did not help Anthem with its proposed findings of fact or conclusions of law.

 Cigna claimed during oral argument that the dispute letters between the parties 

reflected the views of the boards of directors and the companies as a whole, rather 

than disagreements between the CEOs, as Anthem had argued.

 Cigna did not make an opening statement in support of the Merger. 

 Cigna did not make a closing argument in support of the Merger. 

Viewed collectively, these actions permit only one conclusion: Cigna undermined 

Anthem’s defense by litigating against its merger partner.

Cigna inflicted the most damage on Anthem’s defense through Cordani’s testimony.

Cigna’s witnesses were legally obligated to testify truthfully. See 18 U.S.C. §§ 1621, 1623. 

It therefore could not have been a breach of the Merger Agreement for Cigna’s witnesses 

to testify truthfully in the Antitrust Litigation, even if it lessened the likelihood of 
254

regulatory approval.379 But under the Merger Agreement, Cigna’s witnesses could not 

testify untruthfully, nor could they provide exaggerated and embellished testimony against 

the Merger or offer unsupported opinions that harmed it.

Cordani provided exaggerated and embellished testimony and expressed 

unsupported opinions that helped the DOJ’s case and harmed Anthem’s defense. During 

his deposition in October 2016, Cordani worked in themes from the Blues Pitch. One of 

the goals of the Blues Pitch was to expand the DOJ’s focus beyond the Anthem Blue States

to encompass “other markets where Cigna competes with non-Anthem [Blues]

members.”

380 During his deposition, Cordani claimed that if the Merger closed, Cigna’s 

“network outside the 14 states would ultimately be systematically be dismantled,” “choice 

would be constrained” and Cigna’s clinical programs would be “essentially disrupted.” JX 

 

379 See Restatement (Second) of Contracts § 178 (“A promise or other term of an 

agreement is unenforceable on grounds of public policy if legislation provides that it is 

unenforceable . . . .”); 17A Am. Jur. 2d Contracts § 290 (2019) (“No court will lend its 

assistance in any way toward carrying out or enforcing the terms of a contract . . . that is 

illegal . . . .”).

380 JX 2484 at ’001. Cigna points out that the DOJ had identified markets beyond 

the Anthem Blue States in its complaint. See Dkt. 700 at 73 (citing JX 2314 ¶ 23 (DOJ 

complaint alleging that “[t]he proposed merger would harm national accounts . . . in the 

United States generally.”)). Cigna then argues that the DOJ did not need Cigna or Teneo’s 

help to identify that argument. Id. That is misleading. In the Blues Pitch, Teneo expressed 

concern that “[o]n September 1st, the DOJ dropped its claim concerning competition in 

public exchanges” and “is now largely focused on competition in the 14 states where 

Anthem operates its Blues license.” JX 2484 at ’001. Teneo thought that although the DOJ 

might originally have identified the issue, by that point the DOJ was “neglecting to consider 

the severe impact this merger could have on other markets.” Id. By stressing the themes 

that appeared in the Blues Pitch, Teneo and Cigna hoped to reinvigorate this aspect of the 

DOJ’s case.
255

2496 at 148–49. Cordani also testified that the NewCo’s go-to-market strategy was a 

forced-migration strategy called “Bias to Blue.” Cordani Tr. 164. After the DOJ lawyer 

completed his examination, Cigna’s counsel walked Cordani through a series of leading 

questions that supported the DOJ’s theory that Cigna was uniquely innovative. See JX 2484 

at 186–88. Cordani’s testimony was so favorable to the DOJ’s case that the DOJ’s expert 

relied on it in his rebuttal report. See JX 4219 ¶ 78.

During trial, Cordani expanded on the harmful testimony he gave in deposition. He 

claimed that the Bias-to-Blue strategy was the “framework in terms of how we would go 

to market, the so-called-go-to-market with existing clients and new clients in the overlap 

14 states and then outside of those 14 states.” JX 2660 at 428–29. He claimed that the 

strategy would be “extraordinarily disruptive in the marketplace” and make “the existing 

[Cigna] offering less competitive in both Anthem and non-Anthem states.” Id. at 439–40. 

Elaborating on these points, Cordani agreed with a series of leading questions from the 

DOJ in which he asserted that the Bias-to-Blue strategy would “erode the value of Cigna,”

reduce customer choice, and put Cigna’s innovation at risk. Id. at 441. He compared the 

rebranding of Cigna’s members in the Anthem Blue States to pulling a string that would 

unravel Cigna’s entire network. Using the theme from the Blues Pitch, he claimed that 

Cigna’s network would be harmed not only in the Anthem Blue States, but also in the nonAnthem states. See id. at 430–42. He also questioned the Merger’s ability to deliver $2.4 

billion in medical cost savings. See id. at 442–43. 

Cordani’s testimony about Bias to Blue conflicted with the weight of the evidence. 
256

 The Bias-to-Blue strategy was not NewCo’s actual go-to-market strategy. It was an 

option that the go-to-market team presented. It was never adopted as NewCo’s 

strategy. After Cordani objected, it was changed to a brand-agnostic strategy.

 The Bias-to-Blue strategy only addressed (i) new customers who were (ii) within 

the Anthem Blue States and (iii) expressed a preference for a Cigna product. 

 The only consequence of the Bias-to-Blue strategy was to provide that subset of 

customers with a quote for a Cigna product and a quote for an Anthem product. 

 The Bias-to-Blue strategy was not a forced migration strategy.

See Part II.I.6 & II.J.4, supra. 

Cordani knew the truth about the Bias-to-Blue strategy. He participated in the 

Steering Committee meetings when it was proposed and changed. And during the fortyfive minutes during which Cigna permitted Anthem to prepare Cordani, Anthem’s counsel 

specifically covered the Bias-to-Blue strategy. After the session, Anthem’s counsel 

supplied the relevant presentations and walked through how they demonstrated that the 

Bias-to-Blue strategy did not involve forced conversions, only applied to new business in 

the Anthem Blue States, and was replaced with a brand-agnostic strategy. See Part II.I.6 & 

II.J.4, supra. 

At trial in this action, Cordani claimed that he subjectively believed that Anthem 

was pursuing a forced migration strategy with all of the connotations he had described. 

Cordani’s credibility problems in other areas make it difficult to accept that assertion, 

particularly given the clarity of the contemporaneous record. But accepting that Cordani 

did not consciously lie under oath, he nevertheless gave testimony that was embellished 

and exaggerated in an effort to harm the Merger. 
257

The same is true for other aspects of Cordani’s testimony, such as his metaphor 

about the string that would unravel Cigna’s network. That vivid testimony was a boon for

the DOJ’s case, yet Cordani admitted that he did not know of any analysis that Cigna had 

performed on that subject. Cordani Tr. 2109–10. His opinion conflicted with the 

conclusions that Cigna had reached about rebranding its members in the Anthem Blue 

States when Cordani thought that he had a path to become the CEO of NewCo. At that 

juncture, Cigna did not view the move as a problem, regarding it instead as a logical and 

manageable solution to address the 2/3 Rule.381 It also conflicted with a white paper about 

the Blues Rules, in which Cigna and Anthem jointly represented that the Merger would not 

weaken Cigna outside of the Anthem Blue States. JX 2075 at ’914 (“Nor will the merger 

weaken Cigna as a competitor outside of Anthem’s 14 Blue States.”). The fact that 

 

381 See, e.g., JX 79 (email from Gray to McCarthy dated October 22, 2014 (“To 

avoid being in default [under the 2/3 Rule], we would need to rebrand revenue and 

members; practically this means moving members in license states to a product written on 

a blue license”; “Complying will mean reduced volumes to our network outside of the 

license states”); JX 91 at ’163 (November 2014 presentation suggesting need to rebrand 

approximately all of Cigna revenue in Blues States); JX 98 at ’964 (Cigna analysis of 

Merger in November 2014, “[W]e would need to rebrand between 23 and 27% of revenue 

nationally and between 64 and 73% of [Cigna] revenue in the [Anthem] license areas (the 

most likely lever”); JX 119 at ’884 (Cadwalader analysis of Merger for Cigna in December 

2014, “Cigna membership associated with a client contract in [Blue] state rebranded to 

Blue”); id. at ’885 (“Rebranding will divert volumes from [Cigna’s] network”); JX 351 at 

’076 (Cigna Board presentation dated July 1, 2015, “Rebrand [Cigna] revenue as Blue in 

[Anthem] license markets”); JX 565 at ’215 (Cigna Board presentation dated July 1, 2015, 

predicting that “Rules stay in place as is and we adopt our model to comply through a

mixture of rebranding and other actions, in line with the current business case”); JX 590 at 

’835 (Hocevar notes of meeting with Cordani, “Will CIGNA have any legacy [networks] 

in 14 states? No”); JX 732 at ’552 (Cordani notes, “Bias in 14 State  Rebrand Anthem”); 

JX 3121 at ’376 (Cigna presentation for meeting with Anthem in December 2014, “[Cigna] 

membership associated with a client contract in a license state rebranded to Blue”).
258

Cordani’s testimony tracked a theme from the Blues Pitch further undermines its 

credibility. JX 2484 at ’001. 

Similar problems undercut Cordani’s testimony about the $2.4 billion in efficiencies 

posited by Anthem’s expert. Cigna and Anthem jointly submitted that figure to the DOJ. 

See JX 1948. Cordani did not do any work to assess the number and was not familiar with 

the analysis. See Cordani Tr. 2130–3529. Cordani had not even read Israel’s report. Id. at 

2135. Logically, if Cigna had superior utilization rates and a better mix of services than 

Anthem, then incorporating those variables would have made the medical cost savings 

figure higher, not lower, but Cordani portrayed the omissions as a problem. 

So too with Cordani’s testimony about Cigna being uniquely innovative. Before the 

Merger Agreement was signed, Cigna anticipated that the DOJ might argue that Cigna was 

a “unique, procompetitive ‘maverick’” and identified the obvious response—arguing that 

Cigna was not “a uniquely disruptive maverick.” JX 209 at ’484. Cordani did not have to 

agree that Cigna was not innovative. Cordani only had to concede that Cigna was not 

uniquely disruptive. 

After listening to Cordani testify in this case and reviewing his depositions, it is 

clear that he is a skilled communicator who can resist hostile questioning by becoming 

evasive, obfuscating with complex jargon, or simply sticking to his guns on a not-credible 

point that helps his side. When the DOJ questioned Cordani, he testified eagerly, as if he 

were a friendly witness offering supportive testimony during direct examination. Cordani 

could have been a powerful defender of the Merger. Instead, he attacked it.
259

After the issuance of the District Court Opinion, Cigna continued to undermine 

Anthem’s defense. The Litigation Requirement obligated Cigna to “vigorously pursu[e] all 

available avenues of administrative and judicial appeal.” MA § 5.3(b)(iii). Instead of 

pursuing an appeal, Cigna took the following actions:

 Cigna declined to support Anthem’s appeal. 

 Cigna filed a misleading press release saying that it was reviewing the District Court 

Opinion and evaluating its options.

 Cigna issued a termination notice.

 Cigna filed a lawsuit in this court.

 After this court issued a TRO blocking Cigna from terminating the Merger 

Agreement, Cigna filed a five-page brief that stated only that Cigna deferred to 

Anthem.

 Cigna sought to interfere with Anthem’s efforts to reach a deal with the new Trump

administration.

See Part II.L, N & O, supra.

Cigna’s actions, taken as a whole, establish a clear pattern. Cigna engaged in a 

knowing and intentional effort to undermine Anthem’s position in the Antitrust Litigation. 

c. Cigna’s Actions During The Antitrust Litigation Contributed 

Materially To The Failure Of The No Injunction Condition. 

Anthem proved that Cigna’s litigation conduct contributed materially to the results 

in the Antitrust Decisions and hence the non-occurrence of the No Injunction Condition. 

Both of the Antitrust Decisions evidence the effects of Cigna’s actions.

The District Court Opinion highlighted Cigna’s opposition to the Merger, calling it 

“the elephant in the courtroom” and citing “the doubt sown into the record by Cigna itself.”
260

Dist. Ct. Op., 236 F. Supp. 3d 171 at 183. The District Court explained that “[i]n this case, 

the Department of Justice is not the only party raising questions about Anthem’s 

characterization of the outcome of the merger: one of the two merging parties is also 

actively warning against it.” Id. This characterization was accurate: Cigna actively litigated 

against Anthem and in support of the DOJ.

The District Court noted the significance of the testimony given by Cordani and 

other Cigna witnesses, as well as the message sent by Cigna’s conduct during the litigation:

Cigna officials provided compelling testimony undermining the projections 

of future savings, and the disagreement runs so deep that Cigna crossexamined the defendants’ own expert and refused to sign Anthem’s Findings 

of Fact and Conclusions of Law on the grounds that they “reflect Anthem’s 

perspective” and that some of the findings “are inconsistent with the 

testimony of Cigna witnesses.” Anthem urges the Court to look away, and it 

attempts to minimize the merging parties’ difference as a “side issue,”

a mere “rift between the CEOS.” But the court cannot properly ignore the 

remarkable circumstances that have unfolded both before and during the trial.

Id. 

The District Court explained that Cigna’s opposition to the Merger affected its 

ability to credit Anthem’s claimed efficiencies. Id. at 183. Later in the opinion, the District 

Court addressed these issues in detail, frequently relying on Cordani’s testimony. 

 The District Court relied on Cordani’s testimony when finding that the Merger 

would have the anticompetitive effect of reducing innovation in the Anthem Blue 

States. Id. at 230. 

 The District Court relied on Cordani’s testimony when finding that NewCo would 

not give Cigna customers in the Anthem Blue States a meaningful choice to remain 

with a Cigna product. Id. at 241.

 The District Court relied on Cordani’s testimony when questioning whether 

Anthem’s providers might be unwilling to extend their lower fee schedules to 

Cigna’s customers. Id. at 243. 
261

 The District Court relied on Cordani’s testimony when questioning Anthem’s 

estimates of medical cost savings because they did “not factor in utilization.” Id. at 

244. 

 The District Court cited the cross-examination of Anthem’s expert by Cigna’s 

counsel. Id. at 244 n.46.

 The District Court relied on Cordani’s description of the Bias-to-Blue strategy when 

holding that the Merger would harm Cigna’s network and its products. Id. at

24748.

The District Court Opinion would have looked quite different without the discussion of 

Cigna’s litigation conduct and without the references to Cordani’s testimony. 

The DC Circuit Opinion also was influenced significantly by Cigna’s litigation 

conduct. The Majority affirmed the District Court’s factual findings as supported by the 

record and not clearly erroneous. Because Cigna’s litigation conduct contributed materially 

to those factual findings by the District Court, Cigna’s litigation conduct likewise 

contributed materially to the outcome before the DC Circuit Court. 

 The Majority cited Cordani’s testimony when affirming the District Court’s finding 

that Anthem faced a substantial risk of provider abrasion if Anthem attempted to 

use the affiliate clauses to force its providers to offer services under Cigna’s existing 

products at Anthem rates. Cir. Ct. Op., 855 F.3d at 365. 

 The Majority cited Cordani’s testimony when holding that the District Court had 

not erred by finding that Anthem would not be able to induce its providers to extend 

their rates to Cigna products by renegotiation. Id. at 360. 

 The Majority quoted the District Court’s observation that “‘the Department of 

Justice is not the only party raising questions about Anthem’s characterization of 

the outcome of the merger’ because Cigna itself had ‘provided compelling 

testimony undermining the projections of future savings.’” Id. (quoting Dist. Ct. 

Op., 236 F. Supp. 3d at 182). 

 The Majority relied on Cordani’s testimony when holding that the District Court 

had not erred by finding that the quality of the Cigna offering would degrade as a 

result of the Merger. Id.
262

 The Majority relied on Cordani’s testimony when holding that the District Court 

had not erred by finding that the value of Cigna’s offerings would be diminished by 

Anthem’s rebranding strategy. Id. at 361.

 The Majority relied on Cordani’s testimony when holding that the District Court 

had not erred by finding that Cigna’s capacity for innovation would be diminished 

by Anthem’s rebranding strategy. Id.

 The Majority relied on Cordani’s testimony when holding that the District Court 

had not clearly erred in criticizing Anthem for failing to account in its projected 

savings for the effects of utilization. Id. 

Like the District Court Opinion, the Majority’s opinion would have looked quite different 

without the references to Cordani’s testimony.

Cigna relies heavily on a footnote in the Majority’s opinion to argue that it 

opposition to the Merger could not have contributed materially to the outcome. The 

Majority included an extensive section in its opinion that responded to arguments advanced 

by the Dissent See id. at 364–66. Among other things, the Dissent criticized the Majority 

for ostensibly relying “on friction between the Anthem and Cigna CEOs” as a factor that 

undermined the claimed efficiencies. Id. at 365. Retorting that it “did not so rely,” the 

Majority cited a footnote in its opinion, which stated that

Cigna has become a reluctant supporter of the merger, stating in its appellate 

brief that “[i]n accordance with the merger agreement Cigna has appealed 

and defers to Anthem.” Indeed, the district court noted the “elephant in the 

courtroom,” for at trial Cigna executives dismissed various of Anthem’s 

claims of savings, cross-examined the merging parties’ expert witness, and 

refused to sign Anthem’s proposed findings of fact and conclusions of law. 

Anthem suggested this is a “‘side issue,’ a mere ‘rift between CEOs.’” That 

their relationship may have deteriorated has little to do with the 

anticompetitive effects of the proposed merger.

Id. at 348 n.1. 
263

Although this passage indicates that the DC Circuit Court placed less weight on 

Cigna’s opposition to the Merger than the District Court, it does not change the fact that 

the Majority (i) affirmed the District Court’s factual findings, which were influenced by 

Cigna’s litigation conduct and (ii) repeatedly cited Cordani’s testimony against the Merger. 

Judge Millett’s concurring opinion further demonstrates this reality. Her opinion largely 

responded to points raised by the Dissent, and she noted that to the extent that the Dissent 

claimed that there was overwhelming evidence that NewCo would deliver health care for 

less, “one half of this merger disagrees,” citing the District Court’s finding that Cigna was 

“actively warning against” the Merger. Id. at 370. She also wrote, “Importantly, ‘Cigna 

officials provided compelling testimony undermining the projections of future savings’ that 

Anthem proffered and the dissenting opinion embraces.” Id. The footnote in the Majority’s 

opinion thus does not prevent Cigna’s litigation conduct from having contributed 

materially to the DC Circuit Court’s affirmance. 

Anthem proved that Cigna’s litigation conduct contributed materially to the 

issuance of the Antitrust Decisions. Cigna’s litigation conduct made the issuance of those 

decisions more likely and the satisfaction of the No Injunction Condition less likely.

D. Whether The No Injunction Condition Would Have Failed If Cigna Had Not 

Breached

Once Anthem proved that Cigna’s breaches of the Efforts Covenants contributed 

materially to the DOJ’s failure to approve the Merger, the District Court’s issuance of a 

permanent injunction, and the DC Circuit Court’s affirmance of the District Court Opinion, 

the burden then shifted to Cigna to prove that even if Cigna had fulfilled its obligations 
264

under the Efforts Covenants, the No Injunction Condition still would have failed. 

Restatement (Second) of Contracts § 245 cmt. a, illus. 4 & cmt. b, illus. 7. Cigna met its 

burden by proving that even if Cigna had fulfilled its obligations under the Efforts 

Covenants, the DOJ would not have approved the Merger because of its effect on the 

market for the sale of commercial insurance to national accounts, the District Court would 

have enjoined the Merger on that basis, and the DC Circuit Court would have affirmed. 

1. The National Accounts Issue

The principal basis on which the DOJ challenged the Merger was its effect on the 

market for the sale of commercial insurance to national accounts, where the Merger would 

reduce the number of carriers from four to three and create presumptively unlawful levels 

of market concentration. See JX 2314 ¶ 8. The DOJ reached its conclusion regarding the 

market for national accounts after conducting a year-long investigation. As Zielinski 

recognized, Cigna’s conduct did not play any role in causing the DOJ to view the market 

for national accounts as a distinct market. Zielinski Tr. 411. 

Anthem sought to convince the DOJ that the Merger would generate sufficient 

efficiencies to overcome its anticompetitive effects. As this decision has found, Cigna’s 

conduct did not lead Anthem to ground its defense of the Merger on efficiencies created 

on medical cost savings derived by applying best-of-breed discounts. See Part III.C.2.c, 

supra. The DOJ rejected that defense because it doubted that providers would agree to 

deliver the same services for less pay. Anthem’s plan, the DOJ alleged, would lead to “less 

access to medical care, reduced quality, and fewer value-based provider collaborations.”

JX 2314 ¶¶ 64, 75, 77.
265

The District Court viewed the national accounts issue the same way. The District 

Court concluded that the market for the sale of commercial insurance to national accounts 

in the Anthem Blue States was a distinct market. See Dist. Ct. Op., 236 F. Supp. 3d at 179.

Cigna’s breaches of the Efforts Covenants did not have any effect on the District Court’s 

finding that the market for national accounts was a distinct market.

Once the District Court made that finding, it was essentially undisputed that the 

Merger would have the anticompetitive effect of reducing the number of competitors from 

four to three.382 The District Court also found that the sophistication and bargaining power 

of national account customers was not enough to offset the anticompetitive effects; that 

new entrants would not be able to compete in the relevant market with NewCo; and that 

other means of serving customers, such as by slicing business, were not a viable solution. 

See Dist. Ct. Op., 236 F. Supp. 3d at 221–29. Cigna’s breaches of the Efforts Covenants 

did not contribute to these findings.383

In the face of this evidence of anticompetitive effects, it was incumbent upon 

Anthem to provide evidence of “extraordinary” efficiencies that were merger-specific and 

 

382 Id. at 216; see JX 2660 at 2014, 2018.

383 The District Court separately found that the Merger would reduce innovation in 

the Anthem Blue States. Id. at 180, 229–31. The District Court cited Cordani’s testimony 

when reaching this conclusion, and so this decision does not rely on the District Court’s 

findings regarding harm to innovation when analyzing whether Cigna met its burden to 

show that the No Injunction Condition would have failed in any event.
266

verifiable.384 The question thus became whether the $2.4 billion in efficiencies that Anthem 

claimed could overcome the anticompetitive effect.

As presented, Anthem’s claimed efficiencies had two components: (i) $1.5 billion 

from applying Anthem’s discounts to Cigna’s customers, and (ii) $900 million from 

applying Cigna’s discounts to Anthem’s customers. In the only aspect of the District Court 

Opinion that would be reversed on appeal, the District Court held that the projected 

efficiencies attributable to Cigna customers benefitting from Anthem rates were not 

merger-specific because they resulted from rates that each of the companies already had 

 

384 Dist. Ct. Op., 236 F. Supp. 3d at 236. Both the District Court and the DC Circuit 

Court were skeptical of the efficiencies defense as a matter of law. Both courts noted that 

in FTC v. Procter & Gamble Co., 386 U.S. 568, 579 (1967), the Supreme Court of the 

United States had stated that “[p]ossible economies cannot be used as a defense to 

illegality” under the Clayton Act. See Cir. Ct. Op., 855 F.3d at 353; accord Dist. Ct. Op.,

236 F. Supp. 3d at 235 n.33. Ultimately, neither court relied on this precedent. The District 

Court cited it in passing, in the course of observing that several circuit courts and district 

courts, including the DC Circuit Court and its trial courts, had balanced procompetitive 

efficiencies against anticompetitive effects. Dist. Ct. Op., 236 F. Supp. 3d at 235–36. On 

appeal, the Majority placed more emphasis on Procter & Gamble and interpreted the 

decisions that had relied on efficiencies as recognizing only that “evidence of efficiencies 

could rebut a prima facie showing, which is not invariably the same as an ultimate defense 

to Section 7 illegality.” 855 F.3d at 353–54. But the Majority did not rule on this ground, 

explaining that “prudence counsels that the court should leave for another day whether 

efficiencies can be an ultimate defense to Section 7 illegality.” Id. The Dissent responded 

at length to the Majority’s potential reliance on Procter & Gamble, explaining why it would 

be dubious to use that precedent to reject the efficiencies defense as a matter of law. See 

id. at 373, 375–77, 379. The DOJ did not argue that an efficiencies defense was not 

cognizable as a matter of law, and the guidelines that the DOJ and the FTC use to review 

mergers contemplate considering efficiencies to offset anticompetitive effects. It thus 

seems unlikely that the District Court or the DC Circuit Court would have rejected the 

efficiencies defense as a matter of law. Nevertheless, it caused them to approach the 

efficiencies defense with skepticism. Cigna’s conduct had no effect on the outcome of this 

legal issue.
267

achieved on its own. See Dist. Ct. Op., 236 F. Supp. 3d at 181, 238. The DC Circuit Court 

explained that Cigna had been unable to match Anthem’s volume-based discounts, so 

medical cost savings generated by extending Anthem’s discounts to Cigna’s customers that

were receiving a Cigna product would be merger-specific. Cir. Ct. Op., 855 F.3d at 358. 

Importantly, the DC Circuit Court’s disagreement on this one issue did not extend 

to the principal reason why the District Court held that the projected efficiencies 

attributable to applying Anthem’s discounts to Cigna’s customers were not mergerspecific, which was the means by which Anthem planned to achieve those efficiencies. 

Anthem planned to convince Cigna customers in the Anthem Blue States to move from 

Cigna products to Anthem products. Dist. Ct. Op., 236 F. Supp. 3d at 181; see id. at 239. 

The companies did not have to merge for Cigna customers to switch to Anthem products, 

which they could do just as easily without the Merger. Id. at 181. The District Court found 

that Anthem’s principal method for achieving the savings was “no different from Anthem’s 

ongoing marketing of its products on a daily basis.” Id. at 181. Cigna’s conduct did not 

contribute to the finding that these medical cost savings were not merger-specific. It 

resulted from Anthem’s decision to continue offering separate Cigna and Anthem products 

and to encourage Cigna customers to move to Anthem products. See Part II.I.3, supra.

If Anthem had attempted to show that NewCo would achieve medical cost savings 

by designing and selling new products, then the resulting savings would have been mergerspecific. There still would have been an issue about whether the resulting savings were 

verifiable, but Anthem would have at least cleared the initial hurdle. This decision has 

found that Anthem made a tactical decision not to defend the Merger based on NewCo’s 
268

ability to create and sell new products, and that Cigna’s actions did not cause Anthem to 

make that decision. See Part III.C.2.c.i, supra. 

The District Court also rejected the medical cost savings as not verifiable. The 

District Court found that requiring Anthem providers to extend their discounts to Cigna 

customers would result in some level of provider abrasion, meaning that providers would

not accept the new lower rates. See Dist. Ct. Op. 236 F. Supp. 3d at 243, 247, 249. The 

District Court reached this finding independent of any breach by Cigna, noting that

“Anthem’s own witnesses” doubted that providers would continue to provide Cigna-style 

services at lower rates.385 Anthem could have avoided this problem by attempting to show 

that NewCo would achieve medical cost savings through new products that provided some 

Cigna features (but less than the full product) with better discounts than Cigna could 

achieve alone (albeit not as low as Anthem’s full discounts), but Anthem chose not to 

pursue that strategy for reasons unrelated to Cigna’s conduct. See Part III.C.2.c.i, supra.

 

385 Id. at 247. The District Court also found that the $1.5 billion from applying 

Anthem’s discounts to Cigna’s customers was not verifiable because it did not take into 

account Cigna’s utilization. See Dist. Ct. Op., 236 F. Supp. 3d at 244. The record supports 

a finding that Cigna withheld utilization information from Anthem during the integration 

process. See Part III.C.2.b, supra. Nevertheless, as this decision has found, Anthem made 

a tactical decision not to emphasize Cigna’s medical management programs and their effect 

on utilization because it would play into the DOJ’s argument that the Merger would 

eliminate Cigna as a unique competitor. See id. Anthem made its tactical decision 

independently, and Cigna thus proved that this aspect of the Antitrust Decisions was not 

caused by its conduct. But because the effect of the utilization information is a close call, 

this decision does not consider the District Court’s reasoning on this point when analyzing 

whether the District Court would have ruled the same way if Cigna had fulfilled its 

contractual obligations.
269

The District Court rejected wholesale the $900 million in projected savings that 

Anthem customers could achieve by moving to Cigna products. The District Court found 

that Anthem had not identified any means of delivering those savings to its customers. See 

Dist. Ct. Op. 236 F. Supp. 3d at 244–45. Cigna’s breaches of the Efforts Covenants did not 

contribute to that finding.

Finally, the District Court questioned whether the full $2.4 billion in medical cost 

savings was verifiable because Anthem’s internal documents showed that Anthem had 

considered ways to keep a portion of those savings for itself. See Dist. Ct. Op., 236 F. Supp. 

at 182, 237 n.36, 251. Cigna’s breaches of the Efforts Covenants did not contribute to that 

finding.

On appeal, Anthem only challenged the District Court’s treatment of the medical 

cost savings. Cir. Ct. Op., 855 F.3d at 353. The DC Circuit Court agreed that the projected 

efficiencies attributable to moving Cigna customers to Anthem plans were not mergerspecific because they simply reflected the continued marketing of Anthem’s product to 

existing Cigna customers. See id. at 357. The DC Circuit Court also agreed that the savings 

that Anthem customers could achieve by moving to Cigna products were not verifiable 

because Anthem had not identified any means of delivering these savings to its customers. 

See id. at 361. And the Majority held that the District Court “rightly cast doubt” on the 

assumption made by Anthem’s expert that 98% of the medical cost savings would be 

passed through to Anthem’s customers. Id. Cigna’s breaches of the Efforts Covenants did 

not contribute to these holdings.
270

The Antitrust Decisions thus concluded that the Merger was likely to reduce 

competition in the market for national accounts and rejected Anthem’s efficiencies defense 

for reasons unrelated to Cigna’s breaches of the Efforts Covenants. It follows that the 

Antitrust Decisions would have reached the same result even if Cigna had complied with 

its obligations under the Efforts Covenants.

Anthem’s strongest argument against this outcome rests on the pervasiveness of 

Cigna’s breaches and the reasoning in the Dissent. Cigna’s breaches were so extensive that 

it seems possible that if Cigna and its advisors had truly expended their best efforts to 

achieve regulatory approval, then the process might have come out differently. The 

Dissent’s reasoning shows how the analysis of the national accounts issue could have come 

out differently.

It is possible that the Antitrust Decisions could have come out differently. It is more 

likely than not, however, that District Court and DC Circuit Court would have reached the 

same conclusion on the national accounts issue, even if Cigna had fulfilled its obligations 

under the Efforts Covenants. Two of Cigna’s experts submitted persuasive reports on that 

topic.386 Cigna therefore met its burden of proof to show that the No Injunction Condition 

would have failed even if Cigna had fulfilled its obligations under the Efforts Covenants.

2. The Local Markets Issues

Cigna separately argues that the District Court would have enjoined the Merger 

based on harm to competition in the market for large-group commercial insurance in 

 

386 See JX 2969; JX 2971; JX 2978; JX 2979.
271

Richmond even if Cigna had complied with its obligations under the Efforts Covenants. 

Dkt. 700 at 88. Cigna did not carry its burden of proof on that issue. The problems in the 

Richmond market could have been addressed by a local-market divestiture, which is what 

Anthem sought to achieve. See Part III.B.3, supra. Cigna’s opposition to a divestiture 

prevented Anthem from making headway in that direction. In a world in which Cigna 

fulfilled its obligations under the Efforts Covenants, the problem with concentration in the 

Richmond market could have been rendered moot or at least substantially mitigated. Cigna 

therefore failed to carry its burden of proving that the harm to the large-group market in 

Richmond would have doomed the Merger even if Cigna had not breached its obligations 

under the Efforts Covenants. 

The same is true for Cigna’s observation that the District Court did not reach two 

other grounds on which the DOJ challenged the Merger: (i) anticompetitive effects in 

thirty-four local markets other than Richmond and (ii) anticompetitive effects on the 

market for the purchase of medical services (monopsony) in all thirty-five local markets. 

In a world in which Cigna fulfilled its obligations under the Efforts Covenants and 

supported a divestiture of the overlapping business in those thirty-five markets, those issues 

would have been rendered moot or at least substantially mitigated. In addition, one of 

Anthem’s antitrust experts opined persuasively that monopsony claims “are almost never 

litigated to judgment.” JX 2972 ¶ 91. Cigna failed to carry its burden of proving that the 

DOJ would have prevailed on either of the challenges that the District Court did not reach

even if Cigna had not breached its obligations under the Efforts Covenants. 
272

3. Other Regulatory Approvals

Finally, Cigna argues that the Merger needed additional approvals from state 

regulators, contending that “[e]ven if the District Court had not enjoined the merger, it still 

could not have closed by the Termination Date [because] 13 state approvals remained 

outstanding.” Dkt. 700 at 90. In August 2016, when seeking an expedited trial from the 

District Court, Anthem representatives testified that state approvals could take 120 days 

after a favorable judgment, while also representing that Anthem would keep working on 

the state-approval front to reduce that timeframe.387 If a 120-day period started from 

February 8, 2017, the date of the District Court decision, then it would not end until June 

8, 2017, after the Termination Date. See CDX1. 

Cigna did not carry its burden of proof on this issue because the timeline on which 

Cigna relied is an artificial construct. In a world in which Cigna complied with the Efforts 

Covenants, antitrust approval could have been achieved earlier, potentially without the 

DOJ filing suit, through a settlement, or through an earlier victory in court. If Cigna had 

supported a divestiture that addressed the DOJ’s challenges based on local markets, then 

there would not have been a need for a second phase of trial before the District Court, and 

the entire timeline would have shifted forward. Both Cigna’s and Anthem’s regulatory 

counsel believed that even after the District Court’s decision on February 8, 2017, it was 

 

387 See JX 2382 at 3; JX 2383 ¶ 5; Curran Tr. 1491–95.
273

possible to obtain the necessary state regulatory approvals by April 30.388 Cigna failed to 

carry its burden of proving that the need for other approvals would have been an 

impediment even if Cigna had not breached its obligations under the Efforts Covenants.

4. Judgment In Favor Of Cigna

Because Cigna proved that the DOJ would have sued to enjoin and the Antitrust 

Decisions would have ruled against the Merger on the national markets issue even if Cigna 

had complied with its obligations under the Efforts Covenants, the No Injunction Condition 

would have failed in any event, and Cigna never would have become obligated for the 

performance that was due at closing. Anthem therefore is not entitled to a damages award 

to remedy Cigna’s breaches of the Efforts Covenants. Judgment will be entered in favor of 

Cigna on Anthem’s claims for breach of the Efforts Covenants. 

E. Cigna’s Claim Against Anthem For Breach Of The Regulatory Efforts 

Covenant

Cigna claims that Anthem breached the Regulatory Efforts Covenant by (i) failing 

to pursue every option to change the Blues Rules and (ii) omitting $704 million of potential 

merger-specific synergies from its white paper on medical cost savings. Cigna failed to 

prove its claims. 

1. Cigna’s Claim Regarding The Blues Rules

Cigna contends that Anthem failed to pursue all available avenues to change the 

Blues Rules. Cigna maintains that by not taking all possible steps to change the Blues 

 

388 See Danilson Dep. 52–53, 248–49; Holland Tr. 3288–89, 3291; JX 2792; see 

also Curran Tr. 1406–07 (expressing view that the states who were parties to the lawsuit 

would approve the Merger if Anthem prevailed in the lawsuit).
274

Rules, Anthem breached its obligation under the Regulatory Efforts Covenant to take “any 

and all actions necessary to avoid each and every impediment” to regulatory approval. 

Cigna failed to prove this claim. Cigna’s argument instead is a manifestation of its own 

tactic of “play[ing] this as all roads go to the blues.” JX 2486 at ’490.

a. Anthem’s Interactions With The Blues Association

The length of the Factual Background makes it hard to fathom that there could be a 

dimension of the story that this decision has not yet described, but that is the case for 

Anthem’s interactions with the Blues Association. Because those interactions were 

ultimately collateral to the Antitrust Litigation, the Factual Background did not address 

them. But evaluating Cigna’s claim that Anthem breached its obligations under the 

Regulatory Efforts Covenant implicates them.

As discussed in the Factual Background, the parties entered into the Merger 

Agreement knowing that Anthem derived the vast majority of its revenue from its exclusive 

licenses to sell products using the Blues Brands in the Anthem Blue States. It therefore was 

essential that Anthem be the surviving entity and that NewCo comply with the Blues

Rules.389

 

389 See PTO ¶ 90; JX 105 at ’752 (Cigna analysis of the consequences for NewCo 

of losing access to the Blues licenses, concluding that “[t]ermination of license would be 

significantly damaging to [Anthem] from a business perspective and require a substantial 

out-of-pocket payment”); JX 428 at ’303, ’312 (talking points for Cigna Board meeting on 

July 15, 2015, “Affiliation with Blues brings substantive benefits including access to the 

well regarded Blues brand and additional provider network choices for clients and 

customers.”); id. at ’312 (talking points for Cigna Board meeting on July 15, 2015, “We

would need to comply with the ‘Blues Rules’ that regulate how the brand is used and 

overall mix of branded and unbranded business.”); JX 4034 at ’138 (Cigna Board 

presentation dated July 1, 2015, advising that “[o]perating outside the Blues Rules is not a 
275

Throughout their discussions and when entering into the Merger Agreement, the 

parties anticipated that immediately after closing, NewCo would be out of compliance with 

the 2/3 Rule and would need to take steps to re-establish compliance.390 The Cigna ELT 

viewed the issues presented by the 2/3 Rule as manageable, primarily by rebranding Cigna 

business in the Anthem Blue States.

391

 

realistic option” and would result in “[f]inancial penalties . . . and loss of brand and out of 

area networks”); Gray Tr. 1677; Zollars Tr. 2489. See generally Part II.B, supra.

390 See JX 351 at ’076 (Cigna Board presentation observing that it was “[l]ikely that 

New[C]o will be out of compliance and closing and will need to submit a mitigation plan”); 

Zielinski Tr. 149 (explaining that Anthem and Cigna both understood that NewCo would 

be out of compliance with the 2/3 Rule and would need to come back into compliance); 

Cordani Tr. 2235–36 (same). See generally Part II.D.3 & 6, supra. 

391 See Part II.C, II.D.3 & II.D.6, supra; JX 64 at ’182 (Cigna notes on Blues Rules, 

identifying primary lever as “rebrand local C business”); JX 79 (analyzing NewCo’s 

compliance with Blues Rules for Cigna CFO; noting that “[t]o avoid being in default, 

[NewCo] would need to rebrand revenue and members; practically this means moving 

[Cigna] members in license states to a product written on a blue license and using the 

BlueCard network instead of ours”; observing that “[r]egulatory divestitures would be best 

from Cigna and dollar for dollar reduce the exposure to the Rules”; commenting that 

“[c]omplying will mean reduced volumes to our network outside of the license states”); 

JX 87 (McCarthy anticipating “a high degree of success in moving the C business [in the 

Anthem Blue States] to a branded status); JX 91 at ’16364 (same); JX 94 at ’928 

(“Although more homework to be done, did appear there was a path to comply with the 

[Blues Rules].”); id. at ’929 (“Agreed we likely could get into compliance, and while 

growth limitations would erode some value, there was still significant value in a 

combination”); JX 97 at ’344 (talking points for update to Cigna Board; noting that there 

“did appear there was a path to comply with the [Blues] rules” and that “actions to comply 

with the rules” included “[r]ebranding of acquired CI members,” “[a]djusting growth 

strategies,” and “[p]otential deal structure alternatives”); JX 98 (Cigna executive’s 

summary of 2/3 Rule for Cordani, noting that NewCo would “fail the revenue test at 

~57/43” and that “[t]o resolve this, we would need to rebrand between 23 and 27% of 

revenue nationally and between 64 and 73% of [Cigna] revenue in the [Anthem] license 

areas (the most likely lever)”; “Initial view [of both sides] is enough C[igna] revenue can 

be rebranded to come into compliance with [2/3 Rule] in the short term”); JX 105 at ’751 

(Cigna ELT presentation to Cigna Board advising that compliance with Blues Rules could 
276

The parties entered into the Merger Agreement expecting that the Blues Rules were 

unlikely to change.392 The Cigna Board knew that Anthem could not “change the rules 

without the support of other Blues.”

393 Cigna’s primary concern when entering into the 

Merger Agreement was that the Blues Association would change the Blues Rules to make 

it more difficult for NewCo to deliver value. From that standpoint, the pending Blues MDL 

was an advantage because it made it less likely that the Blues Association would make 

unfavorable changes to the Blues Rules.

394

 

be achieved by having “[Cigna] business in Blue licensed territories . . . substantially 

migrate to Blue business, resulting in compliance with the [2/3 Rule] at or shortly after 

closing” and that “[i]f compliance would not be attained, [Cigna] business in non-Blue 

licensed territories may have to be divested”); JX 351 at ’076 (presentation to Cigna Board

identifying the most likely action to bring NewCo into compliance with the 2/3 Rule as 

“[r]ebrand [Cigna] revenue as Blue” in the Anthem Blue States). 

392 See JX 134; JX 793 at 75; Gray Tr. 1674; Cordani Tr. 1864, 2108–09, 2236; 

Zollars Tr. 2490; Jones Dep. 269.

393 JX 351 at ’072; see id. at ’072, ’075 (explaining that changes required both 

(i) 75% of unweighted vote, a metric in which each of the 36 licensees had one vote, and 

(ii) 75% of the revenue-weighted vote, where Anthem held 16% of the voting power, to 

make changes in the rules); JX 428 at ’313 (talking points for Cigna Board meeting on July 

15, 2015, “Changes in the overall structure of the rules (‘standards’) require a double 

supermajority vote”; “Changes in the practical application of the rules (‘guidelines’) 

require a simple majority of plans present”). See generally Part II.D.3 & 6, supra.

394 See JX 99 at ’546 (Cigna analysis noting that the Blues Association “has the 

ability to change the rules retroactively and interpret them in a way contradictory to the 

clear reading; they will likely be constrained by the current legal action, i.e. not giving the 

appearance of reducing competition; but could seek to negatively impact the deal through 

other amendments or guidelines”); JX 428 at ’303, ’313 (talking points for Cigna Board 

meeting on July 15, 2015, noting that “[u]nfavorable changes are unlikely while the current 

litigation is continuing”); id. at ’313 (identifying the two most likely outcomes as either 

(i) “[r]ules stay in place as is and we adapt our model to comply through a mixture of 

rebranding and other actions, in line with the current business case,” or (ii) “[g]uidelines 

are relaxed, which is favorable to the current business case”); JX 4034 at ’130, ’138 
277

The parties understood and agreed that the best solution for changing the 2/3 Rule 

was through a settlement in the Blues MDL.395 Anthem had told Cigna that the “[t]iming 

of resolution [in the Blues MDL] is unclear,” but that Anthem “anticipate[d] a settlement 

within three years.” JX 4034 at ’146. No one thought that the Blues Association would act 

gratuitously to make it easier for NewCo to maintain its licenses.

The Blues Association responded to the Merger as the parties expected. When Scott 

Serota, the CEO of the Blues Association, saw media accounts suggesting that Anthem and 

Cigna were talking about a deal, he told Anthem that the Blues Board would discuss the 

potential merger as its first agenda item on June 19, 2015, one month before the Merger 

Agreement was signed. JX 263. He intimated that the Merger was an issue and that some 

members were “worried about competition in their own markets from a fellow [Blues] 

member.” Id. He told Anthem that the Blues Association’s staff had “done the math” and 

that NewCo would fail the 2/3 Rule, which “would result in Anthem losing its Blue 

license.” Id. During the meeting, the Blues Board received a presentation about the 

 

(presentation to Cigna Board on July 1, 2015, advising that “[i]t is possible but very 

difficult to make unfavorable changes to the Blues Rules”); Zielinski Tr. 148 (describing 

discussions with Cigna about risk of adverse change in Blues Rules); id. at 167 (discussing 

benefits of Blues MDL as curb on adverse rule changes); Gray Tr. 1645 (same). See 

generally Part II.C, II.D.3 & II.D.6, supra.

395 See JX 81 (referring to settlement in Blues MDL as best path for changing 2/3 

Rule); JX 94 at ’928 (same); JX 4034 at ’145 (noting that as part of settlement in Blues 

MDL, Anthem was “[p]ushing for elimination or an increase in the cap”); Zielinski Tr. 153 

(explaining that the parties expected the 2/3 Rule “would change as part of settlement of 

the MDL action”); see also JX 172 at ’615 (Anthem talking points informing Cordani that 

Anthem was planning to attempt to change the 2/3 Rule through a mediated settlement of 

the Blues MDL). 
278

licensure implications of the Merger, which identified both positive and negative 

implications of the Merger for the Blues Association. See JX 267.

After the Merger was announced, some Blues Association members expressed 

support, but others opposed the Merger vigorously.396 Internally, the Blues Association 

examined the deal closely.397 The Blues Association sent an early warning shot across 

Anthem’s bow by asserting that aspects of a website that Anthem had created to support 

the Merger violated branding restrictions in the Blues Rules. See JX 557.

In February 2016, the Blues Board formed a Special Task Force to respond to the 

competitive threat that NewCo could pose.398 The Special Task Force considered a number 

of changes to the Blues Rules that could affect NewCo’s ability to operate as a member of 

the Blues Association, including,

 Reducing the amount of time that NewCo would have to achieve compliance with 

the Blues Rules. See JX 1197.

 Changing the definition of a “National Competitor” and “Major Competitor” to limit 

NewCo’s ability to use the Cigna brand. Id.

 Increasing the termination fee that NewCo would have to pay to relinquish its Blues 

license. Id.

 

396 See JX 264; JX 508; Zielinski Tr. 301–302, 307–08; Swedish Tr. 1267–68; see 

also Serota Tr. 2831.

397 See JX 534; JX 535; JX 536; JX 573.

398 PTO ¶ 164; JX 1197.
279

Anthem opposed the formation of the Special Task Force and objected to its work.399

Anthem did not tell Cigna about the Special Task Force. PTO ¶ 164. 

In March 2016, the Special Task Force made recommendations that would have 

impaired NewCo’s ability to operate as a member of the Blues Association. The Special 

Task Force proposals included a rule that would prevent Anthem from providing its 

discounts to Cigna customers.400

Swedish was a member of the Special Task Force. Anthem personnel provided 

Swedish with analyses and talking points to argue against each of the proposals, and 

Swedish consistently declined to vote in favor of them.401 Zielinski worked against them 

as well. He had a series of meetings with representatives of the Blues Association in an 

effort to convince them to change or eliminate the 2/3 Rule as part of the settlement of the 

Blues MDL. See JX 1581 at ’070. He even lined up White & Case to be ready for litigation, 

explaining, “We will push back internally . . . . However, if we are unsuccessful, I will not 

rule out the possibility of suing the [the Blues Association] over the changes to the Rules 

which will have adverse consequences to Anthem.”

402

The Special Task Force backed off from its initial recommendations. Rather than 

reducing the timeline for compliance, the Special Task Force proposed giving a member 

 

399 See JX 1197; Serota Tr. 2866–70, 2879.

400 See JX 1197; JX 1718; Zielinski Tr. 312–16.

401 See JX 1483; JX 1498; JX 1596; JX 1636; see also JX 674; Zielinski Tr. 16364, 

52223.

402 JX 1507; see JX 1547.
280

an additional sixty days to propose a compliance plan. The Special Task Force, however,

did recommend increasing the fee that a member plan would have to pay to voluntarily 

relinquish its Blues license. See JX 1690. By June 2016, in response to Anthem’s 

opposition, the Special Task Force halted its work.403

Four days of mediation in the Blues MDL were scheduled for June 2016. JX 1849 

at ’002. After the mediation, Zielinski reported that the Blues Association members had 

“finally come to the realization that the settlement of the Blues antitrust litigation will result 

in a significant reduction, if not total elimination of the [2/3 Rule] rule.”

404 Shortly 

thereafter, the Brands Committee of the Blues Association began working on rules that 

could be adopted to replace the 2/3 Rule.405 The Blues Board subsequently formed a new 

special committee to evaluate possible alternatives. See JX 2508. As late as September 

2016, the Blues Association was considering changes to the Blues Rules that could 

adversely affect the Merger. See Zielinski Tr. 323–24.

 

403 See JX 1849 at ’002; JX 2014.

404 JX 2464 at ’781. As noted previously, Anthem invoked the mediation privilege 

to block discovery into the mediation sessions that took place in the Blues MDL. 

Consequently, the court precluded Anthem “from submitting evidence of its efforts in 

connection with the joint defense or mediation of the Antitrust MDL, if any, to change the 

Association’s National Best Efforts Rule.” Dkt. 544 ¶ 5. The court permitted Anthem to 

introduce a document that it had produced, but precluded Anthem from going beyond the 

text of the document. See id. ¶ 4; Trial Tr. 159–61, 166. The admissible evidence 

nevertheless demonstrates that Anthem pursued a settlement of the Blues MDL as the 

optimal strategy for changing the 2/3 Rule.

405 See JX 2464; JX 2479.
281

Ultimately, the Blues Association did not make any changes to the Blues Rules 

during the life of the Merger. They did not make the Blues Rules more onerous. Nor did 

they modify or eliminate the 2/3 Rule.

b. The Applicable Efforts Covenant

As with Anthem’s claims against Cigna, a threshold question exists as to whether 

Anthem’s interactions with the Blues Association should be evaluated under the 

Reasonable Best Efforts Covenant or the Regulatory Efforts Covenant. The proper 

framework is the Reasonable Best Efforts Covenant, under which Anthem had a general 

obligation to expend efforts to satisfy the conditions to closing and consummate the 

Merger. The Regulatory Efforts Covenant, by contrast, obligated the parties to take action 

to address legal impediments that a Governmental Entity like the DOJ might raise. The 

Blues Rules were an impediment in the general sense that they constrained how NewCo 

would operate, and the DOJ or a court therefore would take the Blues Rules into account 

when assessing whether the Merger would have procompetitive or anticompetitive effects, 

but the Blues Rules themselves were not a legal impediment in the sense contemplated by 

the Regulatory Efforts Covenant.406

 

406 See MA § 5.3(b). The Blues Rules could have implicated the Regulatory Efforts 

Covenant if the DOJ had conditioned its approval on changes to them or if the DOJ had 

identified them as a concern for the parties to address. See id. Neither the DOJ nor any 

other Governmental Entity ever made a request of that sort. Nor did the DOJ assert that the 

2/3 Rule was itself anticompetitive. See Zielinski Tr. 167–68; Paul Tr. 667–68; Rosen Tr. 

801, 816–17, 870–71, 892–93; Jones Tr. 2967–68. Zielinski testified at trial that he 

personally did not view the 2/3 Rule as anticompetitive. Zielinski Tr. 285. Cigna 

successfully impeached this testimony. See id. at 285–99; JX 611; JX 674.
282

In light of this distinction, the proper contractual framework for analyzing Anthem’s 

actions regarding the Blues Rules is the Reasonable Best Efforts Covenant. Cigna’s claim 

that Anthem breached the Regulatory Efforts Covenant by failing take additional actions 

to address the Blues Rules therefore fails because that is not the operative provision of the 

contract that governs Anthem’s conduct. The balance of the analysis assumes that the 

Regulatory Efforts Covenant applies.

c. Whether Anthem’s Conduct Breached The Regulatory Efforts 

Covenant

Cigna failed to prove that Anthem breached the Regulatory Efforts Covenant by not 

taking more vigorous action to change the 2/3 Rule. Anthem selected a viable strategy 

seeking to change the 2/3 Rule as part of a settlement in the Blues MDL. Anthem pursued 

this strategy in a logical way. Anthem resisted efforts by the Blues Association to adopt 

rules that would harm the Merger, and Anthem appropriately chose not to take more 

aggressive actions that could have antagonized the Blues Association. Anthem thus 

fulfilled its obligations under the Regulatory Efforts Covenant. 

As discussed in the preceding section, both sides entered into the Merger Agreement 

expecting that the Blues Rules would not be changed and that NewCo would have to 

comply with the 2/3 Rule. As the DOJ’s investigation unfolded, Anthem came to 

understand that the DOJ’s views about the implications of the 2/3 Rule would be critical to 

the parties’ discussion with the DOJ and getting approval. After Schlegel’s deposition in 

November 2015, Zielinski described the 2/3 Rule as his biggest worry inside the DOJ. 
283

Anthem understood that if the 2/3 Rule were eliminated or modified, then it would 

eliminate one of the DOJ’s areas of concern. See Part II.F.2, supra. 

The question was how best to accomplish that goal. Under the Regulatory 

Cooperation Covenant, Anthem had the right to determine the parties’ strategy for 

obtaining regulatory approval. Once it picked a strategy, Anthem was obligated to take any 

and all actions that were necessary and appropriate to carry out that strategy. Anthem was 

not contractually obligated to achieve regulatory approval. 

The record establishes that Anthem sought to change the 2/3 Rule through a 

settlement of the Blues MDL.407 Anthem explained to Cigna that it would pursue this and 

discussed the likely timeline for achieving a settlement.408 Cigna understood this strategy 

and agreed with it. Zielinski Tr. 163. 

Cigna’s contemporaneous conduct demonstrates that it agreed with Anthem’s 

strategy. As part of its opposition to the Merger, Cigna sent Anthem more than twenty-five 

letters alleging breaches of the Merger Agreement.409 Cigna never asserted that Anthem 

had an obligation to change the 2/3 Rule or was breaching the Regulatory Efforts Covenant 

by following its selected course of action.410

 

407 See JX 2464; Zielinski Tr. 157–60.

408 See JX 94 at ’927; JX 339 at ’325; JX 4034 at ’146; Zielinski Tr. 141, 162–63; 

Jones Tr. 2582, 2587–88. 

409 See Part II.H.4, supra; Jones Tr. 2963.

410 See Zielinski Tr. 171–72; Cordani Tr. 2146; Jones Tr. 2965–67; Rule Tr. 3155–

56.
284

Anthem had every reason to pursue the optimal strategy for addressing the 2/3 Rule. 

Anthem opposed the existence of the rule, which limited its ability to grow its non-Blues 

business. Eliminating or changing the 2/3 Rule also would make the Merger more accretive 

to NewCo because Anthem would not need to divest Cigna business to achieve compliance. 

See Zielinski Tr. 531.

Anthem’s strategy was sound. The members of the Blues Association were not 

going to “voluntarily agree to change the [2/3 Rule] and get nothing in return for it.”

Zielinski Tr. 158. As demonstrated by their response to the Merger, the Blues Association 

was not interested in helping NewCo create value by competing with its members. If 

anything, the Blues Association wanted to impose greater restrictions on NewCo.411 Unless 

linked to a settlement of the Blues MDL, any effort by Anthem to convince its fellow 

members to change the 2/3 Rule would have been “dead on arrival.” Zielinski Tr. 553.

The same is true for other possible proposals that Anthem could have made. As 

Cigna points out, Anthem could have lobbied the Blues Board to exempt the Merger from 

the 2/3 Rule or to give NewCo a longer timeline for complying with the 2/3 Rule. No one 

asked the Blues Board to eliminate or modify the 2/3 Rule or exempt the Merger from its 

coverage.412 It nevertheless seems likely that such an effort could have backfired and 

caused the Blues Association to become more suspicious of Anthem and more focused on 

 

411 See JX 2704; Zielinski Tr. 308–11; Serota Dep. 334–36.

412 See JX 2911 at 8; Serota Tr. 2852–54; Zielinski Tr. 332–38.
285

imposing additional restrictions on NewCo.413 As demonstrated by the work of the Special 

Task Force, the Blues Association actively opposed the Merger.414 As late as September 

2016, the Blues were considering “rules which [were] designed to restrict and eliminate 

[Anthem’s] ability to compete against the Blues Plans with [its] non-Blue brands.”

415

During post-trial argument, Cigna’s counsel acknowledged that “the Blues were going to 

fight [the Merger] every step of the way. So there was no reason to think that the 

adjustments that the Blues would have had to make to make [the Merger] work were ever 

going to happen.” Dkt. 728 at 217. Although it is true that the members of the Blues Board 

would have had to consider those proposals “in good faith,” Serota Tr. 2850–51, they 

would have done so as fiduciaries of the Blues Association based on what was in the best 

interests of the Association, not what was helpful to the Merger. 

Cigna also maintains that Anthem could have exploited its commercial leverage as 

the largest member of the Blues Association and threatened to leave if the Association did 

not change the 2/3 Rule. Anthem’s territory consisted of the fourteen Anthem Blue States; 

the next largest member had a territory consisting of only five states. See JX 846 at ’342. 

It would have created a large hole in the Blues network if Anthem left. Serota Tr. 2832. 

Anthem therefore had some commercial leverage, but the argument that Anthem should 

 

413 See JX 793 at 75; Zielinski Tr. 146–47.

414 See JX 1197; JX 1456; JX 1476; JX 1624; JX 1718; Zielinski Tr. 147–48, 312–

16.

415 JX 2464; see Zielinski Tr. 322–24.
286

have used it against the Association is unpersuasive. Despite Anthem’s leverage, the 

members of the Blues Association adopted the 2/3 Rule over Anthem’s opposition as a 

condition to approving an acquisition by Anthem in 2005.416 Anthem also could not leave 

the organization without losing its licenses, which would have breached its obligation 

under the Merger Agreement to continue to operate in the ordinary course of business.417

In addition to preventing Anthem from using its Blues licenses to conduct business, leaving 

the Blues Association would have obligated Anthem to pay an exit fee of approximately 

$2.8 billion.418 Anthem’s threat might well have rung hollow.

Anthem theoretically could have refused to comply with the 2/3 Rule and either 

sued the Blues Association or forced them to sue.419 Anthem and Cigna discussed that 

potential path, which they appropriately dubbed the “nuclear option.”

420 Doing so would 

have jeopardized Anthem’s licenses, and the loss of its licenses would have had disastrous 

effects on Anthem’s business.421 Under the Burdensome Condition Exception, Anthem was 

 

416 See JX 9 at ’097–98; Zielinski Tr. 156.

417 MA § 4.2; Zielinski Tr. 274.

418 JX 793 at 75; see JX 1197 at ’002.

419 See JX 62; JX 94 at ’928; Zielinski Tr. 195–202.

420 Cordani Tr. 2143–44; Zielinski Tr. 173, 178. Cigna successfully impeached 

Zielinski’s testimony on this point, demonstrating that during his deposition, he 

implausibly denied using the term “nuclear option.” See id. 200–01.

421 Zielinski Tr. 178; see JX 105 at ’752.
287

not obligated to pursue that course of action. Cigna understandably never suggested that 

Anthem pursue it.422 It was an avenue to consider, if at all, only after the Merger closed. 

Anthem also could have tried a grassroots strategy to eliminate the 2/3 Rule or 

reduce the threshold. Shortly before the Merger was announced, Anthem told Cigna that it 

had reached out to approximately seventeen members of the Blues Association and 

received fourteen responses that were supportive of a transaction. See JX 339 at ’325. 

During the same period, Anthem told Cigna that they believed there was a “coalition of 20 

plans that are in agreement” on “[r]emoval of [the 2/3 Rule].” JX 351 at ’079. The Merger 

would have conferred some benefits on the Blues Association, such as “the potential of 

adding millions of lives to the Blue system.” Serota Tr. 2830–31. Anthem could have 

engaged in a vigorous lobbying effort to generate support for the Merger and either 

eliminate the 2/3 Rule or lower the threshold. Although eliminating the rule required a 

double-supermajority vote, amending the rule to reduce the percentage could have been 

accomplished by a simple majority of the plans.423

 

422 See Zielinski Tr. 178; Cordani Dep. 245.

423 See Serota Tr. 2830; Zielinski Tr. 191–92. Swedish also could have been more 

involved. During the relevant period, he chose not to attend a number of meetings of the

Blues Board where he potentially could have advocated for a change in the Blues Rules. 

See CDX 5 (collecting evidence and testimony about Swedish’s absences from Association 

meetings). At trial, Swedish’s testimony about his involvement with the Blues Board and 

the Special Task Force did not suggest a meaningful effort to advocate in favor of the 

Merger. See Swedish Tr. 1287–90.
288

All of these ideas are ways to criticize Anthem’s strategy with the benefit of 

hindsight. In real time, Anthem adopted a reasonable strategy and pursued it, consistent 

with its obligations under the Regulatory Efforts Covenant.

2. Cigna’s Claim Regarding The $704 Million In Efficiencies

Cigna also argues that Anthem breached the Merger Agreement “by abandoning 

$704 million of potential merger-specific efficiencies.” Dkt. 700 at 98. The record does not 

support Cigna’s claim.

As discussed previously, in early May 2016, Cadwalader sent a lengthy email to 

White & Case that was highly critical of Anthem’s draft white paper on medical cost 

synergies and argued that Anthem should use data on Cigna’s risk-adjusted cost of care 

(PMPM) to show that the Merger could achieve efficiencies by applying Cigna’s strategies 

more broadly. Because Cigna had withdrawn from integration planning in February, 

Anthem did not have the necessary data. White & Case asked for information to make the 

argument that Cadwalader was suggesting, and Cadwalader responded with PowerPoint 

presentations and marketing materials from 2012, 2013, and 2014. Using the high-level 

materials, Anthem’s economists initially calculated an incremental $704 million in 

efficiencies. Anthem’s lawyers, however, could not verify the total cost of care calculation, 

which conflicted with the results of analyses based on claims data. In an effort to 

understand the issue better, Anthem’s lawyers asked for more detailed support from Cigna, 

but Cigna did not provide it. Anthem’s lawyers therefore dropped the language from the

white paper. See Part III.B.2, supra.
289

Anthem did not breach its contractual obligations by failing to include this 

information, which its lawyers could not verify. The incident instead shows the dire 

consequences of Cigna’s withdrawal from the integration planning process for the 

efficiencies defense.

Cigna more generally argues that Anthem chose the wrong regulatory strategy, 

claiming that Anthem attacked Cigna and presented an efficiencies defense grounded on 

discounted prices rather than innovation. See Dkt. 700 at 98. That choice was reasonable. 

Anthem sought to blunt the DOJ’s contention that Cigna was uniquely innovative, just as 

the parties had anticipated when Cordani thought he had a path to become CEO of NewCo. 

See Part III.B.2, supra.

Anthem sought at all times to complete the Merger. Anthem pursued the best 

regulatory strategy that it believed was available, given Cigna’s withdrawal from 

integration planning and its ever-increasing opposition to the Merger. As this decision has 

noted, the Merger Agreement gave Anthem the right to “take the lead in . . . developing 

strategy for responding to any investigation or other inquiry by any Governmental Entity 

related to any of the Necessary Consents.” MA § 5.3(e). Although the regulatory strategy 

that Anthem pursued ultimately did not succeed, Anthem did not breach its obligations 

under the Regulatory Efforts Covenant by acting as it did. 

3. The Effect-Of-Termination Provision

Assuming for the sake of argument that Anthem had breached its obligations under 

the Merger Agreement, Anthem would not face any liability. The parties to a contract “can 

by agreement vary the rules” established by the common law, “as long as the agreement is 
290

not invalid for unconscionability or on other grounds.” Restatement (Second) of Contracts 

§ 346 cmt. a (citation omitted). In the Merger Agreement, Cigna and Anthem agreed to 

modify the circumstances under which they potentially could recover damages. Titled 

“Effect of Termination,” Section 7.2 states,

In the event of the termination of this Agreement pursuant to Section 7.1, the 

obligations of the parties under this Agreement shall terminate, except for 

the obligations in the confidentiality provisions of Section 5.2, and all of the 

provisions of this Section 7.2 and Section 7.3, and there shall be no liability 

on the part of any party hereto; provided, however, that no party hereto shall 

be relieved or released from any liabilities or damages arising out of (i) any 

fraud by any party, (ii) the Willful Breach by any party of any representation 

or warranty on the part of such party set forth in this Agreement or (iii) the 

Willful Breach of any covenant or agreement set forth in this Agreement.

MA § 7.2 (the “Effect-Of-Termination Provision”). The Merger Agreement defines 

“Willful Breach” as “a material breach of this Agreement that is the consequence of an act 

or omission by a party with the actual knowledge that the taking of such act or failure to 

take such action would be a material breach of this Agreement.”

424

Under the Effect-Of-Termination Provision, it is not enough for Cigna to prove the 

elements of a claim for breach of contract that satisfies the common law framework. The 

parties agreed that once the Merger Agreement had been terminated, “there shall be no 

liability on the part of any party hereto” except in three defined situations. Only one is 

pertinent here: “the Willful Breach of any covenant or agreement set forth in this 

 

424 MA § 8.13. Although not relevant to this case, a second part of the definition of 

“Willful Breach” encompassed any failure by Anthem to pay the cash consideration on the 

date of closing (or to have the funds available to do so). See id. (defining Willful Breach 

as either a failure to act with actual knowledge that such action would be a material breach 

“or as otherwise contemplated by the last sentence of Section 5.14(h)”).
291

Agreement.” MA § 7.2(iii). Cigna thus had to demonstrate that Anthem’s breach of the 

Efforts Covenants was (i) a material breach and (ii) committed “with the actual knowledge 

that the taking of such act or failure to take such action would be a material breach.” Id.

§ 8.13.

The operative element for present purposes is whether Anthem acted “with the 

actual knowledge that the taking of such act or failure to take such action would be a 

material breach.” At common law, a knowing and intentional breach occurs when a party 

knowingly takes an action that results in a breach. Hexion Spec. Chems., Inc. v. Huntsman 

Corp., 965 A.2d 715, 746 (Del. Ch. 2008). The knowledge requirement only modifies the 

action; the party does not also have to know that its conduct constitutes a breach. Id. In the 

definition of “Willful Breach,” the parties to the Merger Agreement contracted around this 

common law rule by providing that liability would exist only if the breaching party acted 

“with the actual knowledge that the taking of such act or failure to take such action would

be a material breach of this Agreement.” MA § 8.13. Actual knowledge is “direct and clear 

knowledge, as distinguished from constructive knowledge.”

425

Determining actual knowledge requires a contextual judgment based on the record 

in a given case. An all-too-human trial judge lacks the ability to read a witness’s mind and 

retrospectively determine the state of the witness’s knowledge. See Allen v. Encore Energy 

P’rs, L.P., 72 A.3d 93, 106 (Del. 2013) (“[T]he members of the Court of Chancery cannot 

 

425 Actual Knowledge, Black’s Law Dictionary (11th ed. 2019); accord Deutsche 

Bank Nat’l Trust Co. v. Goldfeder, 86 A.3d 1118, at *2 (Del. 2014) (ORDER) (“Actual 

knowledge is defined as ‘direct and clear knowledge.’”) (quoting Black’s Law Dictionary).
292

peer into the hearts and souls of directors.” (internal quotation marks omitted)). A judge 

must draw on a combination of direct evidence, indirect evidence, and circumstantial 

evidence. See Voigt v. Metcalf, 2020 WL 614999, at *25 (Del. Ch. Feb. 10, 2020); cf. State

v. Anderson, 74 A. 1097, 1099 (Del. 1910) (recognizing that intent “may be found by direct 

evidence, such as the admissions or declarations of the accused, or by indirect evidence; 

that is by the rational inferences to be drawn from what the accused is proven to have done 

or said, and from all the facts and circumstances involved in the transaction”).

Under the common law, a material breach is a breach of contract that is significant 

enough to excuse the other party from performance. BioLife Sols., Inc. v. Endocare, Inc., 

838 A.2d 268, 278 (Del. Ch. 2003) (“A party is excused from performance under a contract 

if the other party is in material breach thereof.”). At common law, “[a] breach is material 

if it goes to the root or essence of the agreement between the parties, or touches the 

fundamental purpose of the contract and defeats the object of the parties in entering into 

the contract.” Mrs. Fields Brand, Inc. v. Interbake Foods LLC, 2017 WL 2729860, at *28 

(Del. Ch. June 26, 2017) (internal quotation marks omitted), clarified on denial of rearg.

2017 WL 3863893 (Del. Ch. July 27, 2017). Whether a breach is material “is determined 

by weighing the consequences in the light of the actual custom of men in the performance 

of contracts similar to the one that is involved in the specific case.”

426

 

426 BioLife Sols., 838 A.2d at 278 (internal quotation marks omitted); accord 23 

Williston on Contracts § 63:3, Westlaw (database updated May 2020); see Restatement 

(Second) of Contracts § 241 (identifying five guiding factors to consider when determining 

whether “a failure to render . . . performance is material”). By using the common law term 

“material breach,” the Willful Breach definition establishes a different standard than a 
293

Cigna failed to prove that Anthem knowingly committed a material breach of the 

Efforts Covenants. The record indicates that Anthem acted at all times with the belief that 

it was complying with the Merger Agreement and using its utmost efforts to complete the 

Merger. Anthem expended approximately $800 million attempting to consummate the 

Merger. See Zielinski Tr. 180–81. So zealously did Anthem try to complete the Merger 

that it took aggressive positions on privilege in the Antitrust Litigation (and which it 

renewed into this litigation) that this court is unable to endorse. Anthem also argued that 

NewCo could exercise the affiliate clauses in its provider agreements when the Anthem 

ELT had already made a decision not to invoke those clauses broadly. Throughout the 

process, Anthem made judgments about what strategy to pursue. Although those judgments 

quite obviously failed to achieve Anthem’s goal, Anthem did not willfully breach its 

obligations under the Efforts Covenants. 

4. Judgment In Favor Of Anthem

Because Cigna failed to prove that Anthem breached its obligations under the 

Regulatory Efforts Covenant and further failed to prove that Anthem committed a Willful 

Breach, Cigna is not entitled to a damages remedy. Judgment will be entered in favor of 

Anthem on Cigna’s claims for breach of the Efforts Covenants. 

 

provision that requires compliance “in all material respects.” For a discussion of the latter 

concept, see Akorn, 2018 WL 4719347, at *84–86. 
294

F. Cigna’s Claim Against Anthem For Failing To Pay The Reverse Termination 

Fee

In a separate claim for breach of contract, Cigna contends that Anthem breached its 

obligation to pay the Reverse Termination Fee. Anthem maintains that it never became 

obligated to pay the Reverse Termination Fee. 

1. The Provisions Governing The Reverse Termination Fee

Section 7.3(e) of the Merger Agreement governs Anthem’s obligation to pay the 

Reverse Termination Fee (the “RTF Provision”). It states,

In the event that this Agreement is terminated by either Anthem or Cigna

(i) pursuant to Section 7.1(g), but only if the applicable Legal 

Restraint constitutes a Regulatory Restraint, or 

(ii) pursuant to Section 7.1(b) and, in the case of this clause (ii), at the 

time of such termination, all of the conditions set forth in Section 6.1 and 

Section 6.2 have been satisfied (other than (x) Section 6.1(a) (but only if the 

applicable Legal Restraint constitutes a Regulatory Restraint) or Section 

6.1(b) and (y) conditions that by their nature are to be satisfied at the Closing, 

but that are capable of being satisfied if the Closing were to occur on the date 

of such termination),

then Anthem shall pay to Cigna a fee . . . in the amount of $1,850,000,000 

(the “Reverse Termination Fee”);

provided, however, that no Reverse Termination Fee shall be payable 

pursuant to this Section 7.3(e) in the event that 

(A) the failure of the condition set forth in Section 6.1(a) (but only if 

the applicable Legal Restraint constitutes a Regulatory Restraint) or 

Section 6.1(b) to be satisfied is caused by Cigna’s Willful Breach of 

Section 5.3 or

(B) Anthem has waived the condition set forth in Section 6.1(b) and 

Cigna refuses to effect the Merger on the basis that the condition set 

forth in clause (iii) or (iv) of Section 6.1(b) has not been satisfied.

MA § 7.3(e) (formatting added). 
295

References to the conditions in Section 6.1(a) and 6.1(b) permeate the RTF 

Provision. Section 6.1(a) is the No Injunction Condition. Section 6.1(b) is the 

Governmental Approval Condition. 

As discussed previously, the No Injunction Condition makes it a condition to the 

obligation to close that 

[n]o Governmental Entity or federal or state court of competition jurisdiction 

shall have enacted, issued, promulgated, enforced or entered any statute, rule, 

regulation, executive order, decree, judgment, injunction or other order 

(whether temporary, preliminary or permanent), in any case that is in effect 

and that prevents or prohibits consummation of the Mergers (collectively, the 

“Legal Restraints”).

MA § 6.1(a)(i). A subtype of Legal Restraint is a “Regulatory Restraint,” which is defined 

as “any Legal Restraint relating to (i) the HSR Act or any other antitrust laws, (ii) any 

Healthcare Laws or insurance laws or (iii) any [Blues] Licenses or [Blues] Rules.” MA 

§ 8.13. In this case, it is undisputed that the permanent injunction issued by the District 

Court was both a Legal Restraint and a Regulatory Restraint.

Generally speaking, the RTF Provision obligates Anthem to pay the Reverse 

Termination Fee if either side terminates the Merger Agreement under one of two possible 

sections. The first is Section 7.1(g), which states that the Merger Agreement may be 

terminated

[b]y either Anthem or Cigna, if the condition set forth in Section 6.1(a) [the 

No Injunction Condition] is not satisfied and the Legal Restraint giving rise 

to such non-satisfaction has become final and non-appealable; 

provided, however, that the right to terminate this Agreement pursuant to this 

Section 7.1(g) shall not be available to any party that has failed to perform 

fully its obligations under this Agreement in a manner that shall have 
296

proximately caused or resulted in the imposition of such Legal Restraint or 

the failure of such Legal Restraint to be resisted, resolved, or lifted.

MA § 7.1(g) (formatting added). Section 7.1(g) thus grants both sides the right to terminate 

the Merger Agreement if there is a Legal Restraint (such as a permanent injunction) that 

blocks the Merger from closing and which becomes final and not subject to any further 

appeal (the “Legal Restraint Termination Right”). Under the proviso, a party could not 

exercise the Legal Restraint Termination Right if its own failure to perform its obligation 

under the Merger Agreement “proximately caused or resulted in the imposition of” the 

Legal Restraint that caused the No Injunction Condition to fail. 

The second section that could trigger payment of the Reverse Termination Fee is 

even more complex. Section 7.1(b) states that the Merger Agreement may be terminated

[b]y either Anthem or Cigna, if the Merger shall not have been consummated 

on or before January 31, 2017 (the “Termination Date”); 

provided, however, that the right to terminate this Agreement pursuant to this 

Section 7.1(b) shall not be available to any party that has failed to perform 

fully its obligations under this Agreement in a manner that shall have 

proximately caused or resulted in the failure of the Merger to have been 

consummated by the Termination Date; 

provided, further, that if all of the conditions to Closing shall have been 

satisfied or shall be then capable of being satisfied, other than the conditions 

set forth in Section 6.1(a) [the No Injunction Condition] (but only if the 

applicable Legal Restraint constitutes a Regulatory Restraint) and Section 

6.1(b) [the Governmental Approval Condition], the Termination Date may 

be extended by Anthem or Cigna, by written notice to the other party, to a 

date not later than April 30, 2017.

MA § 7.1(b) (formatting added). Section 7.1(b) thus grants each side a right to terminate 

the Merger Agreement if the Termination Date for the Merger Agreement has passed and 
297

that side’s own conduct did not proximately cause the failure of the Merger to be 

consummated before the Termination Date (the “Temporal Termination Right”). 

Under the RTF Provision, however, for Anthem to become obligated to pay the 

Reverse Termination Fee in the event that a party exercised the Temporal Termination 

Right, it had to be true at the time of termination that 

all of the conditions set forth in Section 6.1 and Section 6.2 have been 

satisfied (other than 

(x) Section 6.1(a) [the No Injunction Condition] (but only if 

the applicable Legal Restraint constitutes a Regulatory Restraint) or 

Section 6.1(b) [the Governmental Approval Condition] and

(y) conditions that by their nature are to be satisfied at the 

Closing, but that are capable of being satisfied if the Closing were to 

occur on the date of such termination).

To reiterate, Section 6.1 identifies conditions to both parties’ obligations to close. Section 

6.2 identifies additional conditions to Anthem’s obligation to close. The latter set of 

conditions includes Section 6.2(b), titled “Performance of Obligations of Cigna,” which 

states,

Cigna shall have performed or complied in all material respects with all 

agreements and covenants required to be performed by it under this 

Agreement at or prior to the Closing Date. Anthem shall have received a 

certificate of the chief executive officer and the chief financial officer of 

Cigna to such effect.

MA § 6.2(b) (the “Cigna Compliance Condition”). Cigna’s obligations under the Cigna 

Compliance Condition include its obligations under the Efforts Covenants.

Based on this portion of the RTF Provision standing alone, Anthem is obligated to 

pay the Reverse Termination Fee in the event a party exercises the Temporal Termination 

Right only if all of the conditions to closing in both Sections 6.1 and 6.2 have been satisfied 
298

at the time of termination, including the Cigna Compliance Condition and except for (i) the 

No Injunction Condition, (ii) the Governmental Approval Condition, and (iii) “conditions 

that by their nature are to be satisfied at the Closing, but that are capable of being satisfied 

if the Closing were to occur on the date of such termination).” Put differently, Anthem is 

obligated to pay the Reverse Termination Fee regardless of whether or not the No 

Injunction Condition or the Governmental Approval Condition are met, but Anthem is not 

obligated to pay the Reverse Termination Fee if other conditions remain unsatisfied, 

including the Cigna Compliance Condition. 

Matters become even more complicated because the RTF Provision contains a

proviso, which states, 

provided, however, that no Reverse Termination Fee shall be payable 

pursuant to this Section 7.3(e) in the event that . . . the failure of the condition 

set forth in Section 6.1(a) [the No Injunction Condition] (but only if the 

applicable Legal Restraint constitutes a Regulatory Restraint) or Section 

6.1(b) [the Governmental Approval Condition] to be satisfied is caused by 

Cigna’s Willful Breach of Section 5.3.

MA § 7.3(e) (the “Willful Breach Exception”). Section 5.3 of the Merger Agreement 

contained the Efforts Covenants. 

The parties disagree about how to interpret the Willful Breach Exception. Anthem 

maintains that the Willful Breach Exception applies only if Anthem is otherwise obligated 

to pay the Reverse Termination Fee. If so, then under the Willful Breach Exception, 

Anthem no longer is obligated to pay if either (i) the Governmental Approval Condition 

failed or (ii) the No Injunction Condition failed because of a Regulatory Restraint and the 

failure of either condition was “caused by Cigna’s Willful Breach of Section 5.3.”
299

As Anthem sees it, if Anthem is not otherwise obligated to pay the Reverse 

Termination Fee, then the Willful Breach Exception has no application. For purposes of a 

termination under the Temporal Termination Right, Anthem maintains that it is obligated 

to pay the Reverse Termination Fee only if Cigna has satisfied the Cigna Compliance 

Condition, including compliance with the Efforts Covenants in Section 5.3. If that 

condition is not met, then the analysis never reaches the Willful Breach Exception.

Anthem accepts that under its reading, the Willful Breach Exception never will 

apply for purposes of the Temporal Termination Right because before Anthem can become 

obligated to pay the Reverse Termination Fee, Cigna must have complied with the Efforts 

Covenants such that the Cigna Compliance Condition is satisfied. Anthem argues that this 

interpretation does not turn the Willful Breach Exception into surplusage because the 

Willful Breach Exception continues to apply to the Legal Restraint Termination Right. 

Cigna responds that when the RTF Provision is read as a whole, the Willful Breach 

Exception is a more specific provision that displaces the more general obligation to satisfy 

the conditions set forth in Sections 6.1 and 6.2, including the Cigna Compliance Condition. 

Cigna maintains that the evident purpose of the RTF Provision is to entitle Cigna to the 

Reverse Termination Fee unless Cigna’s breach of the Efforts Covenants “caused” the 

failure of the Government Approval Condition or the failure of the No Injunction Condition 

due to a Legal Restraint. 

This decision need not resolve this dispute because Cigna failed to prove that it 

properly exercised the Temporal Termination Right.
300

2. Cigna’s Attempt To Invoke The Temporal Termination Right

Cigna contends that Anthem was obligated to pay the Reverse Termination Fee 

because Cigna validly exercised the Temporal Termination Right. Cigna relies on two

notices of termination: one delivered on February 14, 2017, and another on May 12, 2017. 

JX 2872; JX 2928. Neither was effective. 

The notice that Cigna delivered on February 14, 2017, was ineffective when sent 

because Cigna could not exercise the Temporal Termination Right before the Termination 

Date had passed. Under Section 7.1(b), either party had the right to extend the Termination 

Date if all of the conditions to closing had been satisfied other than the absence of any 

Regulatory Restraint. When Cigna delivered its notice on February 14, Anthem had 

extended the Termination Date until April 30, 2017. 

Cigna contends that Anthem could not have extended the Termination Date because 

that right was not available “to any party that has failed to perform fully its obligations 

under this Agreement in any manner that shall have proximately caused or resulted in the 

failure of the Merger to have been consummated by the Termination Date.” MA § 7.1(b). 

The plain language of this provision states that the right to terminate under Section 7.1(b) 

is not available to such a party. The right to extend the Termination Date is not subject to 

this condition. Regardless, Cigna failed to prove in this action that Anthem failed to 

perform its obligations under the Merger Agreement, much less than any failure 

“proximately caused” the failure of the Merger to be consummated. 

Anthem validly extended the Termination Date. Accordingly, Cigna could not 

exercise the Temporal Termination Right until after April 30, 2017. 
301

In response, Cigna argues that its February 14 notice may have been temporarily 

ineffective, but that it became effective as of the first valid termination date, ostensibly the 

instant that the TRO lifted. Cigna’s cases do not support this proposition; they address 

contracts where a party had the power to terminate, but only after giving a certain amount 

of notice.427 When Cigna issued the February 14 notice, Cigna did not have the power to 

terminate the Merger Agreement. The February 14 notice therefore was ineffective.

The notice that Cigna delivered on May 12, 2017, also was ineffective. Between 

February 14 and May 12, Anthem had obtained a TRO from this court preventing Cigna 

from terminating the Merger Agreement. This court granted the TRO to preserve Anthem’s 

ability to pursue an appeal from the District Court Opinion. Dkt. 8; see Dkt. 226 at 7. This 

court also granted the TRO to preserve the court’s ability to issue a decree of specific 

enforcement requiring Cigna to close. See Dkt. 74 at 38–40. 

The TRO enjoined Cigna “from terminating” the Merger Agreement and it remained 

in place “pending further order of this court.” Dkt. 8. While that TRO was in place, Cigna 

could not terminate the Merger Agreement. 

 

427 See Lyon v. Pollard, 87 U.S. 403, 406–07 (1874) (interpreting employment 

contract which required thirty-days’ notice for termination, finding it “probable” that a 

notice issued on July 11 was ineffective and that a second notice issued on September 19 

became effective on October 19); All States Serv. Station v. Standard Oil Co. of N.J., 120 

F.2d 714, 715 (D.C. Cir. 1941) (holding that notice sent under contract which required a 

designated period for notice of termination, but which recited a shorter effective period, 

became effective after the designated period ran); Shain v. Wash. Nat’l Ins. Co., 308 F.2d 

611, 613–14 (8th Cir. 1962) (same); G.B. Kent & Sons, Ltd. v. Helena Rubinstein, Inc., 47 

N.Y.2d 561, 563, 565–66 (N.Y. 1979) (same).
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After the entry of the TRO, Anthem moved for a preliminary injunction to prevent 

Cigna from terminating the Merger Agreement pending a final ruling on the merits. By the 

time of the hearing on Anthem’s motion, the DC Circuit Court had affirmed the District 

Court’s decision. Anthem still wanted to keep the Merger Agreement in place so that it 

could petition the Supreme Court of the United States to issue a writ of certiorari. Anthem 

also was in discussions with the Trump administration. 

On May 11, 2017, this court denied Anthem’s motion for a preliminary injunction. 

But this court did not immediately vacate the TRO. Instead, this court stayed its ruling to 

allow Anthem to decide whether to appeal. Dkt. 226 at 24–25. 

The next day, Anthem notified Cigna that it was terminating the Merger Agreement 

under Section 7.1(i) of the Merger Agreement. JX 2929. That section granted Anthem a 

right to terminate

if prior to the Closing Date there shall have been a breach of any . . . covenant 

or agreement on the part of Cigna contained in this Agreement . . . which 

breach . . . (A) would, individually or in the aggregate with all other such 

breaches . . . , give rise to the failure of a condition set forth in Section 6.2(a) 

or Section 6.2(b) [the Cigna Compliance Condition] and (B) is incapable of 

being cured prior to the Closing Date by Cigna or is not cured within 30 days 

of notice of such breach.

MA § 7.1(i) (the “Termination Right For A Cigna Breach”). Anthem proved in this 

litigation that Cigna failed to comply with its obligations under the Efforts Covenants, and 

the nature of those breaches meant that they could not be cured, so Anthem validly 

exercised the Termination Right For A Cigna Breach.
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Anthem sent its notice of termination to Cigna so that it was received at 11:32 AM. 

JX 2929. Anthem’s termination notice did not violate the TRO, because the TRO only 

restrained Cigna, not Anthem.

Anthem informed the court that it would not appeal by letter dated 11:33 AM. 

Dkt. 206. With the filing of that letter, the TRO lifted, and Cigna became entitled to 

terminate the Merger Agreement. Shortly thereafter, Cigna sent its notice of termination 

under the Temporal Termination Right. JX 2928. 

Given the sequence of events, the termination notice that Cigna sent on May 12, 

2017, was ineffective. By that point, Anthem already had terminated the Merger 

Agreement by exercising the Termination Right For A Cigna Breach. There no longer was 

a Merger Agreement in effect for Cigna to terminate.

In response, Cigna argues that under the Merger Agreement, notices in writing are 

deemed given “on the date of delivery.” MA § 8.2. Cigna posits that this means that notices 

which are delivered on the same day must be treated as having been delivered 

simultaneously. The plain language of the provision does not say that. It rather appears 

designed to establish a set of timing rules for the effectiveness of notices that would 

eliminate uncertainty by displacing comparable common law doctrines such as the mailbox 

rule. Cf. 29 Am. Jur. 2d Evidence § 266, Westlaw (database updated May 2020). Cigna has 

not offered any authority to support interpreting a provision like Section 8.2 as creating a 

rule that notices received on the same day are deemed to be delivered simultaneously. By 

the time that Cigna’s notice arrived, Anthem already had terminated the Merger 

Agreement.
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Because neither of Cigna’s termination notices were effective, Cigna did not validly 

exercise the Temporal Termination Right. Cigna thus cannot base a claim to recover the 

Reverse Termination Fee on a termination under the Temporal Termination Right.

3. Anthem’s Obligation To Pay The Fee Under The Termination Right 

For A Cigna Breach

Anthem validly terminated the Merger Agreement under the Termination Right For 

A Cigna Breach. By its plain terms, that termination right does not obligate Anthem to pay 

the Reverse Termination Fee. 

Cigna claims that this result is inequitable because Anthem exploited the TRO to 

gain a timing advantage over Cigna. Cigna points out that because the decision to pursue 

an appeal was Anthem’s to make, Anthem (rather than Cigna) had control over when the 

TRO would end. Anthem could therefore deliver its notice of termination first. 

Although Cigna perceives injustice in this result, the TRO was put in place because 

Cigna previously breached its contractual obligations by attempting to terminate the 

Merger Agreement on February 12 and moot Anthem’s appeal. That attempt at preemptive 

termination failed to satisfy the Temporal Termination Right. It also violated the 

Regulatory Efforts Covenant, which required Cigna to “vigorously pursu[e] all available 

avenues of administrative and judicial appeal.” MA § 5.3(b)(iii). Having previously sought 

to gain a timing advantage of its own in violation of the Merger Agreement, Cigna cannot 

now complain about the effects of a TRO that its own conduct made necessary.

More broadly, Cigna contends that its right to the Reverse Termination Fee should 

not be determined by a race to exercise a termination right. Parties can address this issue 
305

by providing contractually that a Reverse Termination Fee would remain due even if the 

Merger Agreement is terminated on other grounds. The Merger Agreement did not contain 

such a provision. Moreover, the possibility of a race only arose because Anthem continued 

to fulfill its obligation to seek to close the Merger, even after Cigna’s breaches of the 

Efforts Covenants became obvious and gave rise to a termination right. Had Anthem not 

been committed to the Merger, Anthem could have exercised the Termination Right For A 

Cigna Breach long before Cigna’s ability to exercise the Temporal Termination Right 

ripened. Under those circumstances, Cigna would not have been entitled to the Reverse 

Termination Fee. There is no injustice to Cigna in recognizing Anthem’s prior exercise of 

a termination right that it could have exercised months before. 

4. Judgment In Favor Of Anthem

Cigna therefore is not entitled to the Reverse Termination Fee. By the time that 

Cigna purported to terminate under the Temporal Termination Right, Anthem already had 

terminated the Merger Agreement. When Cigna exercised its termination right, there was 

no longer a Merger Agreement in place to provide for the payment of the Reverse 

Termination Fee. Judgment will be entered in favor of Anthem on Cigna’s claim for 

payment of the Reverse Termination Fee.

IV. CONCLUSION

In this corporate soap opera, the members of executive teams at Anthem and Cigna 

played themselves. Their battle for power spanned multiple acts. Once the Cigna ELT 

concluded that Anthem had the upper hand and would not make the concessions that Cigna 

wanted, the Cigna ELT turned against the Merger. Anthem proved that Cigna breached its 
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obligations under the Efforts Covenants, but Cigna proved that it was more likely than not 

that the Merger would have been enjoined anyway. Cigna failed to prove that Anthem 

breached its obligations under the Efforts Covenants, and Cigna failed to prove that it is 

entitled to the Reverse Termination Fee. Each party must bear the losses it suffered as a 

result of their star-crossed venture.