UnitedHealth Group Inc. v. Columbia Casualty Co.
47 F. Supp. 3d 863
D. Minnesota2014Background
- UnitedHealth sought indemnification from ten insurers for a $350 million AMA/Malchow settlement, allocating which portion pertained to AMA (potentially covered) versus Malchow (uncovered).
- AMA and Malchow were separate lawsuits; AMA involved ERISA, antitrust, and related claims about UCR rates and Ingenix data; Malchow involved Oxford entities and similar UCR-related issues in a separate court.
- Judge McKenna oversaw AMA; Judge Hochberg oversaw Malchow; the Settlement was approved in 2010 after long procedural history and class-certification processes.
- The Court earlier held Malchow’s portion was not covered; United now seeks indemnity for the AMA portion, requiring allocation between AMA and Malchow at the time of settlement.
- Insurers moved for summary judgment arguing insufficient evidence to allocate the $350 million between AMA and Malchow; United bore the allocation burden and relied on expert and non-expert evidence.
- Halverson, United’s antitrust expert, was excluded from testifying about AMA/Malchow allocation; United blocked contemporaneous settlement evaluations via privilege/work-product, limiting admissible evidence.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Settlement should be allocated between AMA and Malchow. | United argues most of the delta is AMA; Malchow undercuts AMA value and allocation must reflect information available at settlement. | Insurers contend there is insufficient admissible evidence to allocate between AMA and Malchow; Halverson excluded; no reliable basis for jury allocation. | Yes, allocation is unsupported; summary judgment granted for insurers on AMA vs Malchow allocation. |
| Who bears the burden of proving allocation between AMA and Malchow. | United bears burden to allocate AMA portion to covered claims within AMA. | Insurers argue allocation burden lies with United and that United lacks sufficient evidence to allocate. | United bears burden for AMA allocation; evidence insufficient to sustain allocation. |
| What types of evidence may support allocation between multiple settled claims. | Various evidence types (settlement-era evaluations, information available at settlement, expert testimony) could support allocation. | Evidence is either privileged, inadmissible, or insufficient; Halverson excluded; post-settlement materials improper for allocation. | Evidence available is insufficient; expert testimony on Malchow not admissible; allocation cannot be proven. |
| Whether United could use Halverson’s delta or post-settlement materials to prove allocation. | Halverson’s delta supported AMA value and could support allocation. | Halverson cannot testify about Malchow or allocate; post-settlement materials are hearsay or inadmissible for allocation. | Halverson excluded; post-settlement materials insufficient; allocation not proven. |
Key Cases Cited
- Nodaway Valley Bank v. Cont'l Cas. Co., 916 F.2d 1362 (8th Cir. 1990) (allocation involves evaluating relative liability among settled claims)
- Convent of the Visitation Sch. v. Cont’l Cas. Co., 707 F. Supp. 412 (D. Minn. 1989) (examines evidence of contractual relationships and damages to determine allocation)
- Zurich Reins. (UK) Ltd. v. Can. Pac. Ltd., 613 N.W.2d 760 (Minn. Ct. App. 2000) (settlement allocations informed by contemporaneous negotiations and information)
- Gopher Oil Co. v. Am. Hardware Mut. Ins. Co., 588 N.W.2d 756 (Minn. Ct. App. 1999) (allocation evidence includes insurer’s internal assessments)
- Wachtel v. Guardian Life Co.,, 223 F.R.D. 196 (D.N.J. 2004) (class-action ERISA settlements and allocation context)
- McCoy v. Health Net, Inc., 569 F. Supp. 2d 448 (D.N.J. 2008) (health-net settlement approvals and class considerations in similar context)