As health insurers push for expedited trials, a federal judge designates the Anthem-Cigna suit for random reassignment and calls for a "special master" to accommodate the discovery process with both cases.
Two U.S. Department of Justice lawsuits to stop the mega-mergers of Anthem with Cigna, and Aetna with Humana will be expedited to accommodate the health insurance companies' contractual deadlines, but they will be heard by two different judges, a federal judge has ruled.
Because the two lawsuits were deemed "related cases," U.S. District Judge John D. Bates with the U.S. District Court in Washington, D.C., was assigned both cases last month.
The health insurance companies in both suits had asked for expedited trials at a hearing last week, however, and Bates sent the Anthem-Cigna suit back for reassignment, where it was handed to Judge Amy Berman Jackson, court documents show.
Moody's Weighs In on DOJ Mega-merger Suits
The DOJ suit alleges that Anthem's proposed $54 billion acquisition of Cigna and Aetna's proposed $37 billion merger with Humana would consolidate four of the nation's five largest health insurance companies, and harm consumers and healthcare providers by limiting price competition, reducing benefits, and decreasing incentives to provide wellness programs and lowering care quality.
The four insurers had sought trials this fall.
Aetna and Humana told the court that their case is time-sensitive because their contractual deadline to complete the deal falls on Dec. 31. Anthem and Cigna told the judge that their merger can be terminated by either party on April 30, 2017, if the deal has not yet been finalized.
The Department of Justice said it needed more time to prepare for the trials, which it suggested should be tried successively starting in mid-February 2017. DOJ argued that the insurers' self-imposed deadlines should not drive the timing of the trials.
How the Judge Ruled
"While the Court declines to embrace the specifics of defendants' scheduling proposals, it acknowledges their need for expedition and is inclined to accommodate their contractual deadlines to the extent reasonable," Bates wrote.
"But doing so would require a decision on the merits in Aetna's case before the year's end and another in Anthem's case not long thereafter. Given the complexity and importance of these cases, the Court cannot feasibly try and decide both in that timeframe. Ultimately, it will be fairer to the parties and better for the public if one of the cases is randomly reassigned to another judge in this district, who can give it prompt and full attention while this judge does the same with the other."
Anthem and Cigna had sought to retain Bates as the trial judge, believing it would facilitate an earlier trial, arguing that the government had first filed suit against their merger. However, Bates said that was "pure happenstance."
Aetna-Humana Merger Will Be a Hard Call for DOJ
He called the Anthem-Cigna case "the better candidate for reassignment" because the Aetna-Humana case has a shorter deadline. "That counsels in favor of this judge retaining the Aetna matter—both in order to avoid further delay and out of consideration for the transferee judge," Bates wrote. "And just as the initial assignment of Anthem's case was random, its re-assignment will be as well."
Bates said the two suits involve common issues of fact, but are also "quite different."
"They involve different parties, different products and geographic markets, and raise very different factual issues," he wrote.
"That is not to say there is no overlap between the cases. For example, the parties in both cases may seek discovery from some of the same third parties. Such limited commonalities, however, do not make these cases "related… because any common issues are dwarfed by divergent ones."
To reduce "any risk of duplicative discovery," Bates called for the appointment of a "special master" judge to facilitate discovery in both cases.