MetLife 2002 Annual Report Download - page 78

METLIFE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Demutualization Actions
Several lawsuits were brought in 2000 challenging the fairness of Metropolitan Life’s plan of reorganization and the adequacy and accuracy of
Metropolitan Life’s disclosure to policyholders regarding the plan. These actions name as defendants some or all of Metropolitan Life, the Holding
Company, the individual directors, the Superintendent and the underwriters for MetLife, Inc.’s initial public offering, Goldman, Sachs & Company and
Credit Suisse First Boston. Five purported class actions pending in the New York state court in New York County were consolidated within the
commercial part. In addition, there remained a separate purported class action in New York state court in New York County. Another purported class
action in New York state court in Kings County has been voluntarily held in abeyance by plaintiffs. The plaintiffs in the state court class actions seek
injunctive, declaratory and compensatory relief, as well as an accounting and, in some instances, punitive damages. Some of the plaintiffs in the above
described actions also have brought a proceeding under Article 78 of New York’s Civil Practice Law and Rules challenging the Opinion and Decision of
the Superintendent who approved the plan. In this proceeding, petitioners seek to vacate the Superintendent’s Opinion and Decision and enjoin him from
granting final approval of the plan. This case also is being held in abeyance by plaintiffs. Another purported class action was filed in New York state court
in New York County on behalf of a purported class of beneficiaries of Metropolitan Life annuities purchased to fund structured settlements claiming that
the class members should have received common stock or cash in connection with the demutualization. Metropolitan Life’s motion to dismiss this case
was granted in a decision filed on October 31, 2002. Plaintiff has withdrawn her notice of appeal. Three purported class actions were filed in the United
States District Court for the Eastern District of New York claiming violation of the Securities Act of 1933. The plaintiffs in these actions, which have been
consolidated, claim that the Policyholder Information Booklets relating to the plan failed to disclose certain material facts and seek rescission and
compensatory damages. Metropolitan Life’s motion to dismiss these three cases was denied in 2001. On February 4, 2003, plaintiffs filed a consolidated
amended complaint adding a fraud claim under the Securities Exchange Act of 1934. A purported class action also was filed in the United States District
Court for the Southern District of New York seeking damages from Metropolitan Life and the Holding Company for alleged violations of various provisions
of the Constitution of the United States in connection with the plan of reorganization. In 2001, pursuant to a motion to dismiss filed by Metropolitan Life,
this case was dismissed by the District Court. In January 2003, the United States Court of Appeals for the Second Circuit affirmed the dismissal.
Metropolitan Life, the Holding Company and the individual defendants believe they have meritorious defenses to the plaintiffs’ claims and are contesting
vigorously all of the plaintiffs’ claims in these actions.
In 2001, a lawsuit was filed in the Superior Court of Justice, Ontario, Canada on behalf of a proposed class of certain former Canadian policyholders
against the Holding Company, Metropolitan Life, and Metropolitan Life Insurance Company of Canada. Plaintiffs’ allegations concern the way that their
policies were treated in connection with the demutualization of Metropolitan Life; they seek damages, declarations, and other non-pecuniary relief. The
defendants believe they have meritorious defenses to the plaintiffs’ claims and will contest vigorously all of plaintiffs’ claims in this matter.
In July 2002, a lawsuit was filed in the United States District Court for the Eastern District of Texas on behalf of a proposed class comprised of the
settlement class in the Metropolitan Life sales practices class action settlement approved in December 1999 by the United States District Court for the
Western District of Pennsylvania. The Holding Company, Metropolitan Life, the trustee of the policyholder trust, and certain present and former individual
directors and officers of Metropolitan Life are named as defendants. Plaintiffs’ allegations concern the treatment of the cost of the settlement in
connection with the demutualization of Metropolitan Life and the adequacy and accuracy of the disclosure, particularly with respect to those costs.
Plaintiffs seek compensatory, treble and punitive damages, as well as attorneys’ fees and costs. The defendants’ motion to transfer the lawsuit to the
Western District of Pennsylvania was granted on February 14, 2003. The defendants’ motion to dismiss is pending. Plaintiffs have filed a motion for class
certification which the Texas court has adjourned. The defendants believe they have meritorious defenses to the plaintiffs’ claims and will contest them
vigorously.
Race-Conscious Underwriting Claims
Insurance Departments in a number of states initiated inquiries in 2000 about possible race-conscious underwriting of life insurance. These inquiries
generally have been directed to all life insurers licensed in their respective states, including Metropolitan Life and certain of its affiliates. The New York
Insurance Department has concluded its examination of Metropolitan Life concerning possible past race-conscious underwriting practices. Metropolitan
Life has cooperated fully with that inquiry. Four purported class action lawsuits filed against Metropolitan Life in 2000 and 2001 alleging racial
discrimination in the marketing, sale, and administration of life insurance policies have been consolidated in the United States District Court for the
Southern District of New York. The plaintiffs seek unspecified monetary damages, punitive damages, reformation, imposition of a constructive trust, a
declaration that the alleged practices are discriminatory and illegal, injunctive relief requiring Metropolitan Life to discontinue the alleged discriminatory
practices and adjust policy values, and other relief. Metropolitan Life has entered into settlement agreements to resolve the regulatory examination and
the actions pending in the United States District Court for the Southern District of New York. The class action settlement, which has received preliminary
approval from the court, must receive final approval before it can be implemented. A fairness hearing was held on February 7, 2003. The regulatory
settlement agreement is conditioned upon final approval of the class action settlement. Metropolitan Life recorded a charge in the fourth quarter of 2001
in connection with the anticipated resolution of these matters and believes that charge is adequate to cover the costs associated with these settlements.
Sixteen lawsuits involving approximately 125 plaintiffs have been filed in federal and state court in Alabama, Mississippi and Tennessee alleging
federal and/or state law claims of racial discrimination in connection with the sale, formation, administration or servicing of life insurance policies.
Metropolitan Life is contesting vigorously plaintiffs’ claims in these actions.
Other
In 2001, a putative class action was filed against Metropolitan Life in the United States District Court for the Southern District of New York alleging
gender discrimination and retaliation in the MetLife Financial Services unit of the Individual segment. The plaintiffs seek unspecified compensatory
damages, punitive damages, a declaration that the alleged practices are discriminatory and illegal, injunctive relief requiring Metropolitan Life to
discontinue the alleged discriminatory practices, an order restoring class members to their rightful positions (or appropriate compensation in lieu thereof),
and other relief. Metropolitan Life is vigorously defending itself against these allegations.
A lawsuit has been filed against Metropolitan Life in Ontario, Canada by Clarica Life Insurance Company regarding the sale of the majority of
Metropolitan Life’s Canadian operation to Clarica in 1998. Clarica alleges that Metropolitan Life breached certain representations and warranties
contained in the sale agreement, that Metropolitan Life made misrepresentations upon which Clarica relied during the negotiations and that Metropolitan
MetLife, Inc.
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