HARTFORD, Conn. - Connecticut's Supreme Court recently gave Attorney General Richard Blumenthal the ruling he needs to proceed with his suit against insurance broker Marsh & McLennan.
The Court decided Wednesday Blumenthal is allowed to request compensation for damage done to the state's economy in his suit against Marsh, which alleges bid-rigging and contract steering in the insurance industry.
"The Court preserved a powerful, potent weapon to fight violations of antitrust laws," Blumenthal said. "This law allows my office to strongly and severely punish illegal and anticompetitive business practices that ripple through the state economy, stealing hard-earned dollars from consumers and honest businesspeople."
A lower court had agreed with Marsh's argument. The company claimed the general economic damages claimed by the state, specifically a diminution of funds available to circulate throughout the state's economy, were the same as damages claimed by allegedly affected businesses. It also said a monetary figure would be nearly impossible to calculate.
The High Court unanimously disagreed with Marsh, ruling that a federal law that prevents such claims did not prevent Blumenthal from doing so. Only Connecticut, Virginia and Nevada have laws allowing them to seek damages for their states' economies in antitrust cases, Blumenthal said.
"In our view, the defendants' arguments with respect to the potentially duplicative nature of the damages and injuries pleaded in the State's complaint implicate potential problems of proof rather than pleading," Justice Flemming Norcott wrote.
"It is well settled that antitrust injury and damages may be determined by statistical models explained by expert testimony...
"Thus, although the defendants may be correct that the State's economic models are unable to separate its claimed general economy damages from those recoverable under (state antitrust law), it nevertheless would be premature for us to make that determination on the pleadings alone before any discovery has been conducted."
Former New York Attorney General and Gov. Eliot Spitzer, recently involved in a prostitution scandal, publicized his battle against Marsh & McLennan while Attorney General. His lawsuit led to an $850 million settlement.
The company was also sued by Ohio Attorney General Marc Dann. Blumenthal's suit was filed in 2005.