Connecticut Supreme Court Affirms Confirmation of Punitive Damages Awarded by Arbitration Panel; Vertrue Seeks U.S. Supreme Cour
12 Mai 2005 - 3:20PM
Business Wire
Vertrue Incorporated (Nasdaq: VTRU), a leading consumer services
marketing company, will request the U.S. Supreme Court to review a
decision against it announced yesterday by the Connecticut Supreme
Court (the "Court"). The Court refused to set aside, as grossly
excessive and inconsistent with due process and public policy, an
arbitration panel's award of $5.5 million in punitive damages and
costs even though the arbitrators found that the Company was not
liable for any compensatory damages. As previously described in
Vertrue's public filings, the arbitration filed by MedVal USA
Health Programs, Inc. in September 2000, involved claims of breach
of contract, breach of the duty of good faith and fair dealing and
violation of the Connecticut Unfair Trade Practices Act ("CUTPA").
The Company believes that this arbitration award is unjustified and
not based on any existing legal precedent. Specifically, the
Company challenged the award on a number of grounds, including that
it violates a well defined public policy against excessive punitive
damage awards, raises constitutional issues and disregards certain
legal requirements for a valid award under CUTPA. As a result of
the Connecticut Supreme Court's decision, the Company will record a
one-time $5.5 million charge ($3.5 million net of tax) or $0.27 per
share in the fiscal fourth quarter ending June 30, 2005. Any
statements herein regarding the business of the Company that are
not historical are "forward looking statements" that are intended
to qualify for the safe harbor provisions from liability provided
by the Private Securities Litigation Reform Act of 1995. Forward
looking statements include, but are not limited to, any projections
of earnings, revenues or other financial items; any statements of
the Company's plans, strategies or objectives for future
operations; statements regarding future economic conditions or
performance; and any statements of belief or expectation. All
forward looking statements rely on assumptions and are subject to
various risks and uncertainties that could cause actual results to
differ materially from expectations. Risks and uncertainties that
could affect the Company's future results include general economic
and business conditions, the level of demand for the Company's
products and services, increased competition and regulatory and
legal matters and uncertainties. Additional discussion of these and
other factors that could cause actual results to differ from those
intended is contained in the Company's most recent Quarterly
Reports on Form 10-Q and Annual report on Form 10-K as filed with
the SEC.
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