AIG 2008 Annual Report Download - page 293

former employees of AIG without prejudice for lack of personal jurisdiction. The shareholder plaintiffs have
appealed the dismissal of PwC. The motions to dismiss filed by the remaining parties are pending.
AIG is also named as a defendant in a derivative action in the Delaware Chancery Court brought by
shareholders of Marsh. On July 10, 2008, shareholder plaintiffs filed a second consolidated amended complaint,
which contains claims against AIG for aiding and abetting a breach of fiduciary duty and contribution and
indemnification in connection with alleged bid-rigging and steering practices in the commercial insurance market
that are the subject of the Policyholder Antitrust and Racketeering Influenced and Corrupt Organizations Act
(RICO) Actions described below. On November 10, 2008, AIG and certain defendants filed motions to dismiss the
shareholder plaintiffs’ portions of the complaint. The motions to dismiss are pending.
Derivative Action — Supreme Court of New York. On February 11, 2009, shareholder plaintiffs in the
Delaware 2004/2005 Derivative Litigation filed a derivative complaint in the Supreme Court of New York against
the individual defendants who moved to dismiss the complaint in the Delaware 2004/2005 Derivative Litigation on
personal jurisdiction grounds. The defendants include current and former officers and employees of AIG, Marsh,
and Gen Re; AIG is named as a nominal defendant. The complaint in this action contains similar allegations to those
made in the Delaware 2004/2005 Derivative Litigation described above.
Policyholder Antitrust and RICO Actions. Commencing in 2004, policyholders brought multiple federal
antitrust and RICO class actions in jurisdictions across the nation against insurers and brokers, including AIG and a
number of its subsidiaries, alleging that the insurers and brokers engaged in a broad conspiracy to allocate
customers, steer business, and rig bids. These actions, including 24 complaints filed in different federal courts
naming AIG or an AIG subsidiary as a defendant, were consolidated by the judicial panel on multi-district litigation
and transferred to the United States District Court for the District of New Jersey (District of New Jersey) for
coordinated pretrial proceedings. The consolidated actions have proceeded in that court in two parallel actions, In re
Insurance Brokerage Antitrust Litigation (the Commercial Complaint) and In re Employee Benefit Insurance
Brokerage Antitrust Litigation (the Employee Benefits Complaint, and, together with the Commercial Complaint,
the Multi-district Litigation).
The plaintiffs in the Commercial Complaint are a group of corporations, individuals and public entities that
contracted with the broker defendants for the provision of insurance brokerage services for a variety of insurance
needs. The broker defendants are alleged to have placed insurance coverage on the plaintiffs’ behalf with a number
of insurance companies named as defendants, including AIG subsidiaries. The Commercial Complaint also named
various brokers and other insurers as defendants (three of which have since settled). The Commercial Complaint
alleges, among other things, that defendants engaged in a widespread conspiracy to allocate customers through bid-
rigging and steering practices. Plaintiffs assert that the defendants violated the Sherman Antitrust Act, RICO, and
the antitrust laws of 48 states and the District of Columbia, and are liable under common law breach of fiduciary
duty and unjust enrichment theories. Plaintiffs seek treble damages plus interest and attorneys’ fees as a result of the
alleged RICO and Sherman Antitrust Act violations.
The plaintiffs in the Employee Benefits Complaint are a group of individual employees and corporate and
municipal employers alleging claims on behalf of two separate nationwide purported classes: an employee class and
an employer class that acquired insurance products from the defendants from August 26, 1994 to the date of any
class certification. The Employee Benefits Complaint names AIG, as well as various other brokers and insurers, as
defendants. The activities alleged in the Employee Benefits Complaint, with certain exceptions, track the
allegations made in the Commercial Complaint.
The Court in connection with the Commercial Complaint granted (without leave to amend) defendants’
motions to dismiss the federal antitrust and RICO claims on August 31, 2007 and September 28, 2007, respectively.
The court declined to exercise supplemental jurisdiction over the state law claims in the Commercial Complaint and
therefore dismissed it in its entirety. On January 14, 2008, the court granted defendants’ motion for summary
judgment on the ERISA claims in the Employee Benefits Complaint and subsequently dismissed the remaining
state law claims without prejudice, thereby dismissing the Employee Benefits Complaint in its entirety. On
February 12, 2008, plaintiffs filed a notice of appeal to the United States Court of Appeals for the Third Circuit with
AIG 2008 Form 10-K 287
American International Group, Inc., and Subsidiaries
Notes to Consolidated Financial Statements — (Continued)