Conn. SC rules for state in Anthem stock dispute
HARTFORD, Conn. (Legal Newsline) - The Connecticut Supreme Court has ruled against a class of state workers over claims the stock issued to the state should have been distributed to them.
Anthem Insurance Co. issued 2.2 million shares of stock to the state, a policyholder, in late 2001. When the State sold the shares to fill a budget gap, it made a profit of $127 million.
The plaintiffs, state employees, claimed they were the real policyholders and those shares of stock should have been given to them.
"We have concluded that the trial court should have dismissed the plaintiff's claim of an unconstitutional taking under his group as a whole theory and that the court properly dismissed the plaintiff's constructive trust and resulting trust claims," says Wednesday's opinion, authored by senior Justice William Sullivan.
The state sold the stock after an opinion delivered by Attorney General Richard Blumenthal to the Treasurer's office. He wrote that the State owned the stock and that, "(u)nless and until a court or administrative tribunal directs otherwise, (the treasurer) ha(s) the authority to receive and manage the stock consistent with (her) statutory and fiduciary duties.'"
The class still has a claim against Anthem. It says the company wrongfully gave the stock to the State.
Also on the Anthem front, Blumenthal wrote Gov. Jodi Rell and the Department of Insurance Wednesday to ask for an audit of the company.
He says an audit in California showed errors in the company's request for a rate increase.
Ten months ago, the Department of Insurance approved an increase on individual policies of 13 percent-20 percent in Connecticut.
"Consumers deserve an immediate audit -- clear confirmation whether Anthem used bad math to manipulate our Insurance Department into approving outrageous rate increases," Blumenthal said.
"Wellpoint, Anthem's parent company, received a staggering profit increase its first quarter, raising additional serious questions about the necessity of devastating rate increases when profits are soaring."
From Legal Newsline: Reach John O'Brien by e-mail at firstname.lastname@example.org.