(Photo: Diego M. Radzinschi/ALM)
When she adopted the antitrust case over Anthem Inc.’s proposed $54 billion acquisition of Cigna Corp., the first order of business for U.S. District Judge Amy Berman Jackson in Washington was setting a starting date for the trial.
For the government and the two health insurance giants, it was a significant step: The government wanted enough time to properly prepare, while Anthem worried a prolonged proceeding would make it impossible to obtain all regulatory approvals before its April 30 deadline to close the deal with Cigna. Jackson scheduled the trial in August to begin on Nov. 21 and commented that it was a “bizarre situation” to be accommodating a deal that Cigna appears to no longer desire.
During a hearing Friday, Jackson was struck again by the apparent discord between the two insurers when a lawyer for Cigna Corp., based in Philadelphia, asked if he would be allowed to object to questions from Anthem, headquartered in Indianapolis.
“Well, it’s completely extraordinary. I’ve never seen it done even in a criminal trial with multiple co-defendants,” Jackson said. “It’s nothing I’ve ever seen before. I have trouble even wrapping my mind around it.”I’m not going to tell you that it’s prohibited but I find it highly extraordinary,” she added.
Jackson asked Cigna’s lawyer, Paul, Weiss, Rifkind, Wharton & Garrison antitrust partner Charles Rule, about what potential objections he had in mind. Rule made a reference to the contentious relationship between Anthem and Cigna, which could walk away from the deal after the April 30 deadline and receive a $1.85 billion breakup fee.
“Frankly I’m not sure exactly what will come up,” Rule said.
Jackson envisioned Rule objecting to a question that might reveal confidential company information.
“That’s something I would obviously entertain,” she said.
Rule did not immediately respond to a reporter’s request to clarify his reasons for wanting permission to object to Anthem’s questions.
The Justice Department sued in July to block the Anthem acquisition and Aetna Inc.’s proposed $37 billion purchase of Humana Inc., alleging that the two mergers would amount to an unprecedented consolidation of the health insurance industry.
Jackson has said that she hopes to rule by the end of January on Anthem’s proposed $54 billion acquisition of Cigna. But on Friday, she suggested that she would split the trial into two parts, considering the merger’s effect on the national market before hearing arguments on its effect on local markets.
Jackson said she might give a preliminary decision after the first phase, but it would not be a final decision.
Anthem’s lawyer, White & Case partner Christopher Curran, said he would support that plan. “If we’re going to lose and we lose quickly, that’s better for everyone,” Curran said.