Anthem Accuses DOJ of Delays and Wasting Time, Facts Paint Different Picture

July 29, 2016

 

This week, Anthem filed a motion seeking an expedited status conference on logistics and expressing its wishes that the trial begin in October. In response the Department of Justice filed a response objecting to Anthem’s timing, stating that 1) the large scale of the merger the involvement of national and local markets requires a longer schedule, and 2) that a rush is unnecessary because the merging parties can postpone contractual break up dates and several state Insurance Commissioners have postponed their review until the case is resolved.

 

Now Anthem has fired back with a sharp reply accusing DOJ of having “enjoyed the benefit of a year-long, one-sided investigation” and of “already impeding Anthem’s efforts to prepare for trial.” In a short but strident filing, the company also claims that DOJ has refused to turn over its investigatory files despite repeated requests, that they have refused to hold a conference, and that because of these delaying tactics, an expedited status conference is needed more than ever. Additionally, several states (among them Colorado, Connecticut, and Georgia) have halted their merger reviews and Anthem can’t acquire Cigna with their approvals. Anthem states that it is concerned that it will not be able to get these approvals in time.

 

However, a much different story comes through despite Anthem’s sharp criticism of the DOJ.  Anthem appears to be admitting that its relationship with Cigna is not good, stating “In suggesting that Anthem and Cigna are ‘free to extend’ their termination date beyond April 30, 2017 (Response at 3), Plaintiffs ignore their own allegation that relations between Anthem and Cigna are ‘contentious.’” Anthem admits that it has no right—or—expectation to extend its binding contact to acquire Cigna beyond the due date of April 30, 2017.

 

The emails that Anthem attaches to bolster its claims actually paint the DOJ as reasonable. The DOJ has to organize all the states that have joined the claim. Anthem demanded a discovery planning conference first a few hours and then less than a day from the time of email. The DOJ also requested that Cigna file an answer before the discovery planning conference, but Anthem refused to wait. If time is so important to the defendants, why hasn’t Cigna filed an answer? And why can’t Anthem get Cigna to file its answer on the time table that Anthem wishes to move at? This may be a further sign that Cigna is unhappy to be acquired by Anthem; signaling a possible culture clash of the likes that led to the colossal failure of the AOL-Time Warner merger.

 

It is also interesting that while Anthem is urgently pushing for an expeditious trial and claims that DOJ is attempting to delay the process, Anthem is also denying almost every allegation in DOJ’s complaint. The emails provide a window into the DOJ’s exasperation with Anthem’s “kitchen sink” approach to litigation, with the lead DOJ attorney stating “we do not know at this point whether you are willing to narrow the issues to be litigated. You stated during our call that you will contest our product and geographic market definitions, which suggests you will contest all of the Complaint’s allegations. You also did not rule out that Anthem may propose a remedy to the merger between now and trial, which would mean that we would be litigating a remedy as well."

 

Anthem’s reply falls flat on its face. Anthem seeks to impose a strict time table based on a problem of its own creation. Cigna can, and probably will, walk away from the deal on April 30 of next year. Anthem even seems to be admitting that relationships between the two companies are sour. Anthem also appears to be refusing to narrow any issues, and is in fact bringing in more things to the case that need to be litigated despite its demands for expediency. The reply is nothing more than an attempt by Anthem to have its cake and eat it too.

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