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UnitedHealth loses bid to block state probe


MINNEAPOLIS—Minnesota Attorney General Mike Hatch has the right to investigate UnitedHealth Group Inc.'s executive compensation practices, a court ruling affirmed.

The ruling by Judge David C. Higgs—filed earlier this week in a Ramsey County, Minn., District Court—follows a motion in June by Minnetonka, Minn.-based UnitedHealth, which sought a protective order to block Mr. Hatch's requests for documents relating to his probe.

Mr. Hatch previously withdrew the state's participation in a shareholder lawsuit against UnitedHealth in order to conduct a separate probe into the company's stock-option granting practices.

Among other things, the health insurer argued in court that Mr. Hatch did not have the authority to investigate UnitedHealth's practices and that it would suffer "undue burden or expense" if required to comply with the document requests, court papers show.

UnitedHealth further argued that a separate investigation launched by the Minnesota Attorney General's office would interfere with an ongoing federal regulatory review of the company, along with investigations by an independent committee appointed by UnitedHealth's board of directors.

The court ruled that Mr. Hatch "clearly" has the authority under Minnesota law to investigate UnitedHealth's allegedly improper executive compensation practices, and denied the protective order to UnitedHealth, saying it would "act to suppress relevant and essential evidence" to Mr. Hatch's investigation.

UnitedHealth said it plans to appeal the ruling.

"While we respect the court's decision, we continue to believe that the attorney general is overstepping the limits of his investigative authority in this matter," a spokesman for the company said in a statement. "UnitedHealth has been and is cooperating fully with the ongoing reviews by federal regulators, who have jurisdiction and expertise concerning the issues in question, and by the independent committee of the board of directors supported by outside counsel."

UnitedHealth is one of the largest of several companies that are being investigated by the Securities and Exchange Commission and other authorities over their timing and accounting for stock options granted to executives.