Case 1:05-cv SEB-TAB Document 226 Filed 01/25/10 Page 1 of 7 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF INDIANA INDIANAPOLIS DIVISION

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1 Case 1:05-cv SEB-TAB Document 226 Filed 01/25/10 Page 1 of 7 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF INDIANA INDIANAPOLIS DIVISION MARY ORMOND, DANIEL CESCATO and KEVIN HEEKIN, on Behalf of Themselves and All Other Persons Similarly Situated, vs. Plaintiffs, ANTHEM, INC. (n/k/a WELLPOINT, INC. and ANTHEM INSURANCE COMPANIES, INC., Defendants. CASE NO. 1:05-cv-1908-SEB-TAB NOTICE OF PENDENCY OF CLASS ACTION, CLASS ACTION DETERMINATION AND CERTIFICATION, AND ATTENDANT MATTERS TO: ALL FORMER MEMBERS OF ANTHEM INSURANCE COMPANIES, INC. ( ANTHEM INSURANCE RESIDING IN OHIO, INDIANA, KENTUCKY AND CONNECTICUT WHO RECEIVED CASH COMPENSATION IN CONNECTION WITH THE DEMUTUALIZATION OF ANTHEM INSURANCE ON NOVEMBER 2, 2001, AND THE COMMUNITIES COMPRISED OF THEM AND THEIR SPOUSES, IF ANY (WITH CERTAIN EXCLUSIONS DETAILED HEREIN. PLEASE READ THIS NOTICE CAREFULLY YOUR RIGHTS MAY BE AFFECTED BY THIS CLASS ACTION By order of the United States District Court for the Southern District of Indiana, Indianapolis Division (the District Court, Judge Sarah Evans Barker presiding, you are hereby notified of the pendency of this Class Action lawsuit, captioned Mary Ormond, et al. vs. Anthem, Inc. (n/k/a WellPoint, Inc., et al. ( Ormond vs. Anthem or the Class Action. If you are a member of the Class described in this Notice, your rights may be affected by this Class Action. Page 1 of 7

2 Case 1:05-cv SEB-TAB Document 226 Filed 01/25/10 Page 2 of 7 I. THE NATURE OF THE ORMOND vs. ANTHEM CASE The Complaint that initiated the Ormond vs. Anthem case was filed on August 16, Some of the determinations made and decisions rendered by the District Court to date in this Class Action are described in Section II below. The named Plaintiffs in this Class Action are Mary E. Ormond, Daniel J. Cescato and Kevin T. Heekin (collectively Plaintiffs. The Defendants are (i Anthem, Inc. (now known as WellPoint, Inc., and (ii Anthem Insurance Companies, Inc. ( Anthem Insurance (collectively Anthem. Ms. Ormond, Mr. Cescato and Mr. Heekin, on their own behalf and on behalf of the members of the Class described in this Notice who received cash compensation as a result of Anthem Insurance s demutualization in November 2001, claim that the amount of the cash compensation each person received should have been substantially greater. Plaintiffs allege Defendants breached their fiduciary and contractual obligations and were negligent in paying less cash compensation to the Class members than they were legally required to pay for two reasons: 1. Class members were undercompensated because they received less than their fair and adequate percentage of the equity of Anthem Insurance. Class members received cash payments based on the allocated percentage or shares of the equity of Anthem Insurance to which their respective health insurance policies entitled them. Plaintiffs allege that millions of shares of Anthem Insurance that should have remained in the pool to be allocated among the Class members were instead wrongfully diverted to certain employers in Ohio and Connecticut that sponsored group health insurance policies for their employees. Plaintiffs contend these employers were not entitled to receive any share allocations at all, and in fact were allocated more shares of the mutual company than their employees were Page 2 of 7

3 Case 1:05-cv SEB-TAB Document 226 Filed 01/25/10 Page 3 of 7 collectively entitled to receive if Anthem Insurance had considered the employees as eligible to be allocated shares and receive compensation; and 2. Each Class member received cash compensation of $39.60 for every share of Anthem Insurance he or she was allocated. The $39.60 price was based on the price at which stock of the new corporation, Anthem, Inc., was offered to the public in its initial public offering (IPO. Plaintiffs allege the IPO price was kept artificially lower than it should have been priced, thus undercompensating the Class members by paying them too little cash in exchange for their mutual membership interests in Anthem Insurance. Anthem denies these allegations, denies that it breached any of its duties or contractual obligations, and denies all liability. Further, Anthem asserts that the challenged cash payments to Class members were determined according to its Plan of Conversion and applicable law and are not subject to challenge because they were approved by the Indiana Department of Insurance, the regulator with exclusive jurisdiction over Anthem Insurance's demutualization. Moreover, Anthem asserts that all common law claims asserted by or on behalf of individuals who were participants in certain employee benefit plans are preempted by federal law. II. THE CLASS ACTION DETERMINATION AND CERTIFICATION On September 29, 2009, the District Court certified the Ormond vs. Anthem case as a Class Action, with named Plaintiffs Mary E. Ormond, Daniel J. Cescato and Kevin T. Heekin serving as the Class representatives on behalf of the members of a Class defined as follows: All former members of Anthem Insurance residing in Ohio, Indiana, Kentucky and Connecticut who received cash compensation in connection with the demutualization of Anthem Insurance on November 2, 2001, and the communities comprised of them and their spouses, if any, excluding: (i all employers located in Ohio and Connecticut that maintained Anthem group health insurance policies on their respective employees and retirees and that received Page 3 of 7

4 Case 1:05-cv SEB-TAB Document 226 Filed 01/25/10 Page 4 of 7 (ii (iii (iv (v demutualization compensation (the Grandfathered Groups ; Defendants, their predecessors and successors in interest; the officers and directors of Defendants, their predecessors and successors; counsel of record in this action and their respective parents, spouses and children; and judicial officers who enter an order in this action, and their respective parents, spouses and children. If you come within this definition and wish to participate in this Class Action, you do not need to do anything. You are automatically a Class Member. If you come within the definition and you do not wish to participate in this Class Action, you must submit a written request to be excluded from the Class by following the instructions set forth below. III. RULINGS AND ISSUES IN THE ORMOND VS. ANTHEM CASE On March 31, 2008, the District Court granted in part and denied in part Anthem s motion to dismiss Plaintiffs third amended complaint. Ormond v. Anthem, Inc., 2008 WL (S.D. Ind. March 31, 2008 (Entry, Doc. 79. On January 12, 2009, the District Court granted in part and denied in part Plaintiffs' motion for leave to file their fourth amended complaint in this case. Ormond v. Anthem, Inc., 2009 WL (S.D. Ind. January 12, 2009 (Entry, Doc Plaintiffs filed their Fourth Amended Class Action Complaint in this case on January 26, 2009 (Doc Anthem filed its Amended Answer to the Complaint on April 6, 2009 (Doc On September 29, 2009, the District Court granted in part and denied in part Plaintiffs' motion for class certification. The District Court certified the Plaintiff Class defined in Part II above, specified that the Class claims against Defendants are breach of fiduciary duty, breach of contract and negligence, and designated Plaintiffs Mary E. Ormond, Daniel J. Cescato and Kevin T. Heekin as Class representatives. The District Court also certified a subclass consisting of those Class members who received cash compensation from the demutualization because they were participants in employee benefit plans covered by the federal Employee Retirement Income Page 4 of 7

5 Case 1:05-cv SEB-TAB Document 226 Filed 01/25/10 Page 5 of 7 Security Act ( ERISA, 29 U.S.C et seq., and designated Plaintiff Daniel J. Cescato as its representative. The District Court also designated Eric H. Zagrans, Kathleen A. DeLaney, Edward O. DeLaney, Dennis P. Barron and Michael F. Becker as Class Counsel for both the Class and the subclass. Ormond v. Anthem, Inc., 2009 WL (S.D. Ind. September 29, 2009 (Entry, Doc The District Court has not yet scheduled a trial date for this case. At the conclusion of the proceedings in the District Court, either party will have the right to appeal from any final disposition, decision or judgment with which they disagree. IV. ELECTIONS BY CLASS MEMBERS If you wish to participate as a Class Member, no action on your part is necessary at this time. If you participate as a Class Member, you will not be required to advance attorneys fees or expenses during the course of this Class Action. However, the District Court may award legal fees or expenses to Class Counsel to be paid out of your recovery, if any. In addition, if you participate as a Class Member, you will be bound by the final judgment in this class action, whether that final judgment is in favor of the named Plaintiffs and the Class or in favor of Defendants. If you do not wish to participate as a Class Member, you must timely submit a written request to be excluded from the Class. A written request to be excluded from the Class must include all of the following: (i the Class Member s name; (ii the Class Member s current mailing address; and (iii the statement I want to be excluded from the Ormond vs. Anthem case. To be timely, a written request to be excluded from the Class must be postmarked on or before April 8, 2010, and must be mailed, with sufficient postage prepaid and affixed, to both: (i Office of the Clerk, United States District Court for the Southern District of Indiana, Room Page 5 of 7

6 Case 1:05-cv SEB-TAB Document 226 Filed 01/25/10 Page 6 of 7 105, United States Courthouse, 46 East Ohio Street, Indianapolis, Indiana 46204, and (ii Class Notice Agent, P.O. Box 56798, Jacksonville, Florida If you submit a written request to be excluded from the Class within the time period and in the manner described in the preceding two paragraphs, then you will not share in any money recovered by or on behalf of the Class, but you will not be bound by the judgment in this Class Action. V. IMPORTANT ADDITIONAL INFORMATION More information about this Class Action is available on the internet at You may also obtain information about this Class Action by calling, toll-free, If you are unable to obtain necessary information through the internet website or the toll-free telephone number, the attorneys designated by the Court to serve as Class Counsel, and to whom inquiries regarding the matters addressed in this Notice may be directed, are: Eric H. Zagrans Dennis P. Barron ZAGRANS LAW FIRM LLC 582 Torrence Lane 474 Overbrook Road Cincinnati, Ohio Elyria, Ohio Kathleen A. DeLaney Michael F. Becker Edward O. DeLaney BECKER & MISHKIND CO., L.P.A. DELANEY & DELANEY LLC 124 MiddleAvenue 3646 N. Washington Boulevard Elyria, Ohio Indianapolis, IN You do not need to retain your own attorney in order to participate as a Class Member. A Class Member who does not request exclusion from the Class, however, may elect to enter an appearance in this Class Action through her/his own attorney, at her/his own expense, by having that attorney enter an appearance in this Class Action on or before the date, and in the manner, set forth in Part IV above for the submission of written requests to be excluded from the Class. Page 6 of 7

7 Case 1:05-cv SEB-TAB Document 226 Filed 01/25/10 Page 7 of 7 The pleadings and other related records in this Class Action may be examined and photocopied during regular office hours at the Office of the Clerk at the address set forth in Part IV above, or through the District Court s website at Please do not telephone or write to the District Court, the Chambers of the Judge, or the Office of the Clerk. You may direct your inquiries to any of the Class Counsel representing the named Plaintiffs and the Class in this Class Action identified above. IMPORTANT: You should promptly notify Class counsel via or , or U.S. Mail letter addressed to Class Counsel Kathleen A. DeLaney at her address listed above: If you received this Notice at an address different from the address to which it was mailed, or If your address changes in the future, or If you did not receive a Notice by mail but nevertheless believe you are a Class Member. Dated: 01/25/2010 United States District Court SARAH EVANS BARKER, JUDGE Southern District of Indiana United States District Court Southern District of Indiana Sarah Evans BarkerUnited States District Judge Page 7 of 7