Unum 2006 Annual Report Download - page 168

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
Unum Group and Subsidiaries
150
Note 15 - Commitments and Contingent Liabilities - Continued
on behalf of a putative class of individuals that were denied or terminated from benefits under group long-term
disability plans, seeking injunctive and declaratory relief and payment of benefits. On April 30, 2003, the court
granted in part and denied in part the defendants’ motion to dismiss the complaint. On May 14, 2003, the plaintiff
filed a Second Amended Complaint seeking similar relief.
Between November 2002 and November 2003, six additional similar putative class actions were filed in (or later
removed to) federal district courts in Illinois, Massachusetts, New York, Pennsylvania, and Tennessee. The
complaints alleged that the putative class members’ claims were evaluated improperly and allege that the Company
and its insurance subsidiaries breached certain fiduciary duties owed to the class members under the Employee
Retirement Income Security Act (ERISA), Racketeer Influenced Corrupt Organizations Act (RICO), and/or various
state laws. The complaints sought various forms of equitable relief and money damages, including punitive
damages.
These actions all were transferred to the Eastern District of Tennessee multidistrict litigation. On December 22,
2003, the Tennessee Federal District Court entered an order consolidating all of the above actions for all pretrial
purposes under the caption In re UnumProvident Corp. ERISA Benefit Denial Actions and appointed a lead
plaintiff. A consolidated amended complaint was filed on February 20, 2004. Several motions remain pending
before the court in this matter.
On April 30, 2003, a separate putative class action, Taylor v. UnumProvident Corporation, et al., was filed in the
Tennessee Circuit Court and subsequently removed to federal court. The complaint alleges claims against
UnumProvident and certain subsidiaries on behalf of a putative class of long-term disability insurance policyholders
who did not obtain their coverage through employer sponsored plans and who had a claim denied, terminated, or
suspended by a UnumProvident subsidiary after January 1, 1995, seeking equitable and monetary relief. Plaintiff
alleges that the defendants violated various state laws by engaging in unfair claim practices and improperly denying
claims.
The court subsequently granted in part our motion for summary judgment in Taylor, dismissing plaintiff’s request
for equitable relief on her breach of contract claim and dismissing any claim plaintiff may make for punitive
damages under the Tennessee Consumer Protection Act. The former claim is the principal claim upon which class
certification is sought. The court reserved ruling on the remainder of the pending motion for summary judgment
pending further mediation of the Taylor and ERISA Benefit actions.
Court ordered mediation has concluded with the settlement of all individual claims brought by six of the fifteen
named plaintiffs in the ERISA Benefit Denial Actions. A seventh plaintiff has subsequently resolved her claims
through the process established under the regulatory settlement agreements.
Plan Beneficiary Class Actions
On April 29, 2003, the first of two identical putative class actions, Gee v. UnumProvident Corporation, et al., was
filed in the Eastern District of Tennessee on behalf of participants and beneficiaries of UnumProvident’s 401(k)
Retirement Plan (Plan), and the actions were later consolidated.
On January 9, 2004, plaintiffs filed a consolidated amended complaint against us, several of our officers and
directors, and several alleged Plan fiduciaries on behalf of a putative class of individuals that held our Company’s
stock in their 401(k) retirement accounts subsequent to November 17, 1999. Plaintiffs allege that the defendants
violated ERISA by making misrepresentations and omissions regarding investment in our Company’s stock and by
acting imprudently in failing to take action to protect participants from losses sustained from investments in the
Plan’s UnumProvident Stock Fund.