MetLife 2006 Annual Report Download - page 135

15. Contingencies, Commitments and Guarantees
Contingencies
Litigation
The Company is a defendant in a large number of litigation matters. In some of the matters, very large and/or indeterminate amounts,
including punitive and treble damages, are sought. Modern pleading practice in the United States permits considerable variation in the
assertion of monetary damages or other relief. Jurisdictions may permit claimants not to specify the monetary damages sought or may
permit claimants to state only that the amount sought is sufficient to invoke the jurisdiction of the trial court. In addition, jurisdictions may
permit plaintiffs to allege monetary damages in amounts well exceeding reasonably possible verdicts in the jurisdiction for similar matters.
This variability in pleadings, together with the actual experience of the Company in litigating or resolving through settlement numerous
claims over an extended period of time, demonstrate to management that the monetary relief which may be specified in a lawsuit or claim
bears little relevance to its merits or disposition value. Thus, unless stated below, the specific monetary relief sought is not noted.
Due to the vagaries of litigation, the outcome of a litigation matter and the amount or range of potential loss at particular points in time
may normally be inherently impossible to ascertain with any degree of certainty. Inherent uncertainties can include how fact finders will view
individually and in their totality documentary evidence, the credibility and effectiveness of witnesses’ testimony, and how trial and appellate
courts will apply the law in the context of the pleadings or evidence presented, whether by motion practice, or at trial or on appeal.
Disposition valuations are also subject to the uncertainty of how opposing parties and their counsel will themselves view the relevant
evidence and applicable law.
On a quarterly and yearly basis, the Company reviews relevant information with respect to liabilities for litigation and contingencies to be
reflected in the Company’s consolidated financial statements. The review includes senior legal and financial personnel. Unless stated
below, estimates of possible additional losses or ranges of loss for particular matters cannot in the ordinary course be made with a
reasonable degree of certainty. Liabilities are established when it is probable that a loss has been incurred and the amount of the loss can
be reasonably estimated. Liabilities have been established for a number of the matters noted below. It is possible that some of the matters
could require the Company to pay damages or make other expenditures or establish accruals in amounts that could not be estimated as of
December 31, 2006.
Demutualization Actions
Several lawsuits were brought in 2000 challenging the fairness of Metropolitan Life’s plan of reorganization, as amended and the
adequacy and accuracy of Metropolitan Life’s disclosure to policyholders regarding the Plan. These actions discussed below named 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. Metropolitan Life, the Holding Company,
and the individual directors believe they have meritorious defenses to the plaintiffs’ claims and are contesting vigorously all of the plaintiffs’
claims in these actions.
Fiala, et al. v. Metropolitan Life Ins. Co., et al. (Sup. Ct., N.Y. County, filed March 17, 2000). Another putative class action filed in New
York State court in Kings County has been consolidated with this action. The plaintiffs in the consolidated state court class actions seek
compensatory relief and punitive damages. In 2003, the trial court granted the defendants’ motions to dismiss these two putative class
actions. In 2004, the appellate court modified the trial court’s order by reinstating certain claims against Metropolitan Life, the Holding
Company and the individual directors. Plaintiffs in these actions have filed a consolidated amended complaint. On January 30, 2007, the
trial court signed an order certifying a litigation class for plaintiffs’ claim that defendants violated section 7312 of the New York Insurance
Law, but denying plaintiffs’ motion to certify a litigation class with respect to a common law fraud claim. The January 30, 2007 order
implemented the trial court’s May 2, 2006 memorandum deciding plaintiffs’ class certification motion. Defendants have filed a notice of
appeal from this decision. .
Meloy, et al. v. Superintendent of Ins., et al. (Sup. Ct., N.Y. County, filed April 14, 2000). Five persons 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 sought to vacate the Superintendent’s Opinion and Decision and enjoin him from granting final approval of the
Plan. On November 10, 2005, the trial court granted respondents’ motions to dismiss this proceeding. Petitioners have filed a notice of
appeal.
In re MetLife Demutualization Litig. (E.D.N.Y., filed April 18, 2000). In this class action against Metropolitan Life and the Holding
Company, plaintiffs served a second consolidated amended complaint in 2004. Plaintiffs assert violations of the Securities Act of 1933 and
the Securities Exchange Act of 1934 in connection with the Plan, claiming that the Policyholder Information Booklets failed to disclose
certain material facts and contained certain material misstatements. They seek rescission and compensatory damages. On June 22, 2004,
the court denied the defendants’ motion to dismiss the claim of violation of the Securities Exchange Act of 1934. The court had previously
denied defendants’ motion to dismiss the claim for violation of the Securities Act of 1933. In 2004, the court reaffirmed its earlier decision
denying defendants’ motion for summary judgment as premature. On July 19, 2005, this federal trial court certified this lawsuit as a class
action against Metropolitan Life and the Holding Company.
Fotia, et al. v. MetLife, Inc., et al. (Ont. Super. Ct., filed April 3, 2001). This lawsuit was filed in Ontario, Canada on behalf of a
proposed class of certain former Canadian policyholders against the Holding Company, Metropolitan Life, and Metropolitan Life Insurance
F-52 MetLife, Inc.
METLIFE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)