Court Opinion

ID: 8916903
Source: CourtListenerOpinion
Date Created: 2022-11-27 05:27:25.771507+00
Date Added: 2024-06-11T17:09:04.535160
License: Public Domain

NEWMAN, Circuit Judge,
concurring:
I concur in Judge Oakes’ comprehensive opinion and add a few words only to fill out the context in which the settlement was reached and to emphasize that our concern for more detailed analysis by the District Judge is not an intimation either way as to whether or not the settlement should be approved. The Associations had entered into an exclusive arrangement with the Colonial Penn Group at a time when no other insurer appeared willing to write group health insurance policies for the elderly. The risk that CPG took turned out to be advantageous for it, and it made substantial profits. Once the profitability of this type of insurance was demonstrated, the continued existence of an exclusive arrangement between the Associations and CPG was no longer in the best interests of the Associations’ members. Whether the arrangement ever was, or at some point might have become, unlawful is, of course, quite a different matter. In any event, the Associations and CPG, no doubt prodded by the initiation of state and federal lawsuits, agreed in September 1980 to sever the exclusive relationship. Their agreement includes a provision requiring CPG to pay the Associations $6.8 million and to spend for the benefit of the Associations another $4.5 million.
In this context the lawsuits were settled on terms that provide the plaintiffs with virtually all of the relief they sought in their complaints. The settlement proposes to secure in an enforceable consent judgment not only the contractual rights inuring to the Associations by virtue of their 1980 agreement with CPG, but also the very important additional requirement that the Associations will invite competitive bidding for the opportunity to provide health insurance for their members.
Judge Griesa, agreeing with the State Court referee who considered the proposal at the request of the State Court, concluded that the achievement of far-reaching in-junctive relief and the forgoing of damages that plaintiffs had never sought was a fair and reasonable settlement of the litigation. Judge Oakes’ opinion for the Court properly calls upon Judge Griesa to analyze the matter in more detail so that we will have a sound basis for exercising our somewhat narrow scope of appellate review in such matters. I understand our call for further analysis to be just that, without any attempt to circumscribe the permissible conclusions that the District Judge may reach upon completing his further consideration of the matter.