For Immediate Release: August 14, 1996
BOSTON--- Massachusetts Superior Court Judge Regina L. Quinlan ruled late yesterday that policyholders and a consumer group had not shown sufficient harm to warrant permanently blocking the Massachusetts insurance commissioner from approving the largest life insurance company merger in the nation's history. The Court also found that in their lawsuit, "plaintiffs present a compelling argument that they will be successful on the merits of their claim under the Public Records Act" to obtain documents submitted in secret by the companies to the Commissioner to win her approval of the merger.
The Court's decision lifts a temporary restraining order that had been in effect since July 30, 1996 when plaintiffs filed their lawsuit against Commissioner Linda Ruthardt. The plaintiffs --two policyholders of The New England and the Center for Insurance Research, a consumer organization based in Cambridge, MA-- allege that the Commissioner has committed procedural violations and illegally withheld documents submitted by the companies which plaintiffs assert will show the merger proposal was misrepresented and is fundamentally unfair to policyholders and the public.
Following this ruling, the multi-billion dollar merger between Boston-based New England Mutual and the Metropolitan Life Insurance Company of New York may now be consummated pending final approval of the Massachusetts and New York insurance commissioners. The merged companies would have over $250 billion in managed assets.
In seeking a preliminary injunction, plaintiffs asked the Court on Friday to order the Commissioner to produce a descriptive index of documents being withheld and for opportunity to depose several of the commissioner's staff before being allowed to present further evidence to the Court that important documents were improperly withheld. Plaintiffs argued that the records would justify the court providing an additional public hearing to enable policyholders to meaningfully participate in the public process, and to obtain important information prior to casting an informed vote.
Plaintiffs had also asked the Court to enforce a formal Order by the State Supervisor of Public Records, in the Secretary of State's office, compelling the Commissioner to produce such an index of documents by August 18, 1996. The August 8, 1996 Order noted that the Commissioner has already refused to produce such an index when requested earlier by the Supervisor.
"Unfortunately, the Court was unwilling to temporarily halt approval of the New England-MetLife multi-billion dollar merger pending further evidence of the Commissioner's wrongdoing," said Jason Adkins, executive director of the Center and attorney for the plaintiffs. We were put in a Catch 22 because the Court did not provide us the opportunity to collect sufficient evidence to meet its threshold test, evidence the Commissioner continues to deliberately and illegally withhold to thwart our efforts, he said. We firmly believe the merger is unfair and was misrepresented to win policyholder approval.
"In a major victory for policyholders and the public, the Court found compelling our arguments that the Commissioner has withheld important public documents," said Adkins. "Unfortunately, the Court did not give adequate weight to evidence that shows the Commissioner knowingly and intentionally violates the "open government" public records law and is engaged in a deliberate practice of consorting in total secrecy with companies she regulates to evade public comment,"Adkins said. "Now we will just have to prove our claims through the litigation of our lawsuit."