The opinion of the court was delivered by: SAMUEL CONTI
Plaintiff Weil Insurance Agency, Inc. ("Weil") was in the business of providing consulting services to tort plaintiffs on the costs of structured settlements. Defendants in this case are mainly brokers and life insurance companies who are involved in the structured settlement industry. Weil alleges that it was driven out of the industry by defendants' "defense only" policy of refusing to provide information on the costs of structured settlements to brokers who did business with tort plaintiffs.
Weil brought claims under section 4 of the Clayton Act, 15 U.S.C. § 15, for violations of section 1 and section 2 of the Sherman Antitrust Act, 15 U.S.C. §§ 1, 2. Weil also brought claims under the California antitrust statute, as well as an assortment of state law tort and breach of contract claims. Several of the defendants now join in moving for summary judgment on Weil's federal antitrust claims.
A. The Structured Settlement Industry
For the parties in tort suits, structured settlements offer several advantages over lump sum payments. First, the plaintiff is guaranteed a steady stream of income over a long period of time. Second, the money received by the plaintiff under a structured settlement is often tax-free. Third, the amount received by the plaintiff in a structured settlement is usually more than what the plaintiff would receive in a lump sum payment, and it can be provided at a lower cost to the defendant. Thus, the availability of structured settlements often encourages the settlement of tort suits.
Tort defendants finance structured settlements by purchasing annuities from life insurance companies, either directly or through the tort defendant's liability insurer. The sale is usually arranged by a structured settlement broker, who acts as a consultant to the tort defendant, defense counsel, and the defendant's liability insurer.
Weil alleges that certain life insurance providers have a practice of marketing their annuities through brokers that represent tort defendants exclusively. According to Weil, these brokers do not disclose the price of the annuity--that is, the cost of the structured settlement to the tort defendant--to the tort plaintiff or its representatives. Weil claims that the "defense only" policy is the result of an anticompetitive conspiracy between the life insurance companies, certain structured settlement brokers, and the National Structured Settlement Trade Association, all of whom are named as defendants in this action.
B. Weil's Entry Into, and Exit From, the Structured Settlement Industry
Weil began marketing structured settlements as a broker in 1985. In January 1986, Weil entered into an agency agreement (the "Richardson Contract") with A.J. Richardson & Associates ("Richardson"
), a specialized structured settlement broker. Under the Richardson Contract, Weil received quotes on annuities from the defendant life insurance companies, and placed structured settlements with tort defendants as an agent of Richardson. Weil did not deal directly with the defendant life insurance companies.
On August 4, 1989, Richardson terminated the Richardson Agreement, after complaints from certain defendant brokers and defendant life insurance companies. Shortly after its termination by Richardson, Weil was forced to discontinue its structured settlement business. Weil alleges that it was ...