          United States Court of Appeals
                     For the First Circuit

No. 12-1199

         THE MAINE EDUCATION ASSOCIATION BENEFITS TRUST,
          and ROGER YOUNG, SUSAN GRONDIN, SALLY PLOURDE,
      MARY KAY DYER, CHRIS GALGAY, KELLY LITTLEFIELD, LOIS
     KILBY-CHESLEY, DARRELL KING, and DENNIS TOWLE, in their
    capacities as trustees of the Maine Education Association
                          Benefits Trust,

                     Plaintiffs, Appellants,

                               v.

     ERIC CIOPPA, in his official capacity as Superintendent
                of Insurance of the State of Maine,
                                and
         MAINE SCHOOL ADMINISTRATIVE DISTRICT 60; AUGUSTA
        SCHOOL DEPARTMENT; MAINE SCHOOL BOARD ASSOCIATION;
        BANGOR SCHOOL DEPARTMENT; REGIONAL SCHOOL UNIT 23,

                     Defendants, Appellees.


          APPEAL FROM THE UNITED STATES DISTRICT COURT

                    FOR THE DISTRICT OF MAINE

          [Hon. George Z. Singal, U.S. District Judge]


                             Before

                       Lynch, Chief Judge,
                Lipez and Howard, Circuit Judges.


     Christopher C. Taintor, with whom Norman, Hanson & DeTroy
LLC was on brief, for appellants.
      Jonathan R. Bolton, Assistant Attorney General, with whom
William J. Schneider, Attorney General, Andrew L. Black and
Thomas A. Knowlton were on brief, for appellees.
September 24, 2012
                  HOWARD, Circuit Judge.             In October 2011, the State of

Maine enacted L.D. 1326, "An Act To Allow School Administrative

Units       To    Seek     Less    Expensive    Health       Insurance   Alternatives,"

pursuant to which health insurers must disclose, upon written

request from a public school district, aggregate loss information

pertaining to any group policies held by the district's employees.1

L.D.       1326,      125th   Leg.,   1st   Reg.      Sess.    (Me.   2011).       Shortly

thereafter,            plaintiff-appellant           Maine     Education      Association

Benefits Trust (the "Trust") -- which manages a statewide health

insurance plan for a substantial segment of Maine's public school

work       force      --   filed   suit   in    the   district     court,     seeking   to

permanently enjoin the law prior to its enforcement.                             The Trust

alleged, inter alia, that because its loss information constitutes

a confidential trade secret, the Act's disclosure requirement

results          in   an   uncompensated       taking    proscribed      by    the   Fifth

Amendment.            The district court denied the Trust's motion for a

preliminary injunction, and the Trust now challenges that denial in

this timely appeal.               After careful consideration, we affirm.

                                               I.

                  A brief overview of the Trust, its health insurance plan,

and the statutory scheme at issue is necessary for an understanding

of the claims presented on appeal. The district court's thoughtful



       1
        The phrase "school administrative unit"                            is,    for   our
purposes, synonymous with "school district."

                                               -3-
and comprehensive order, see Maine Educ. Ass'n Benefits Trust v.

Cioppa, No. 1:11-cv-381-GZS, 2012 WL 363923 (D. Me. Feb. 3, 2012),

contains a detailed exposition of the undisputed facts, from which

we borrow.

A. The Trust and Its Health Insurance Plan

           Since 1993, the Trust has provided health insurance to

the bulk of Maine's public school employees and their dependents

through a plan underwritten by various insurers, most recently

Anthem Blue Cross Blue Shield of Maine ("Anthem").        The insurance

plan (the "Plan"), which currently covers nearly 67,000 members

from 99 percent of Maine's school districts, is community-rated;

that is, the price of coverage is negotiated on the basis of group-

wide   utilization   costs,   and   accounts   for   neither   geographic

variation nor an individual employer's demographic mix, prior

utilization, or loss experience.          This community-rated plan is

designed in part to subsidize, through members who are actuarially

favorable, the premiums paid by members who are actuarially less

attractive to insurers. The Plan as designed economically benefits

employees of educational institutions whose work forces are older

or less healthy than other members of the group, or who reside in

regions -- typically Northern and Eastern Maine -- with higher

health care costs and, on average, lower salaries than their

Southern Maine counterparts. The Plan is thus structured, in part,

to help mitigate this disparity.


                                    -4-
          Eligibility for enrollment in the Plan is determined by

the collective        bargaining      agreements       negotiated    between local

bargaining units and individual employers, predominantly school

districts.    The employees of a given school district are eligible

to participate in the Plan if the largest collective bargaining

unit in   that   district        is   represented       by   the   Maine     Education

Association ("MEA"), the statewide teachers' union that founded the

Trust. Once eligibility has been established, the school board and

the employees decide together, by a collaborative vote, whether the

employees will be offered the Plan.               Those who receive the offer

and elect to enroll do so directly with the Plan's insurer, Anthem.

The   Trust     has     no    contracts         with     individual        educational

institutions, and those institutions are not considered to be

sponsors of the Plan.        Rather, based on the amount agreed to in its

own collective bargaining agreement, each school district pays to

the Plan a percentage of its employees' health insurance premiums,

and the employees are responsible for the remainder.

          For    the     most    recent    plan    year      for   which    there   was

evidence at the preliminary injunction hearing, the Plan's annual

premium was nearly $370,000,000, resulting in an average monthly

cost of approximately $460 per member.                 The Trust itself maintains

a reserve fund that, according to its last available audit, held in

excess of $87,000,000.          The Trust uses the reserve fund to buy down




                                          -5-
rate increases, thereby avoiding inflation in the monthly cost

charged to Plan participants.

B. The Statutory Scheme

              Similar to the other states, Maine heavily regulates the

insurance industry.          "Title 24-A, the 'Maine Insurance Code,' has

85 separate chapters and fills almost two complete volumes of the

Maine Revised Statutes Annotated.                 There is [also] an entire

department of State Government, the Insurance Bureau, devoted to

regulating the business of insurance."              Lessard v. Allstate Ins.

Co., No. Civ. A. cv-98-162, 2001 WL 1712653, at *4 (Me. Super. Ct.

March 12, 2001).

              Under    Maine's    regime,     the   state    has    historically

compelled the disclosure of basic "loss information," generally

defined as the aggregate claims experience of a given policy, or

more specifically, the ratio of premiums charged to claims paid --

in   short,    a   simple     equation,     and   the   applicable     data,   for

deciphering the purchaser's own healthcare costs.                   For example,

Maine law has entitled holders of property and casualty insurance

policies to obtain such loss information from their carriers since

1989,   see     1989   Me.    Laws,   Ch.    696,   "An     Act    Requiring   the

Availability of Insurance Loss Information" (codified at Me. Rev.

Stat. Ann. tit. 24-A, §§ 2910, 3042).               In 1995, this access was

expanded to cover current and former policyholders of group and

blanket health insurance, see 1995 Me. Laws, Ch. 71, "An Act to


                                       -6-
Require Insurance Companies to Provide Loss Information to Insured

Groups" (codified at Me. Rev. Stat. Ann. tit. 24-A, § 2803-A)

("Disclosure of Loss information.          Upon written request, every

insurer shall provide loss information concerning a group policy or

contract to its policyholder . . . ." (emphasis added)).           L.D. 1326

is incidentally more expansive,      extending the right of access not

just to "policyholders," but also to the small subgroup of public

school districts whose employees are enrolled in a shared health

insurance policy.

          In   seeking    preliminary     injunctive    relief,    the   Trust

mounted challenges to the two provisions of the Act that deal with

loss information, codified at 20-A M.R.S.A. § 1001(14)(E) and 24-A

M.R.S.A. § 2803-A(2).       As amended, 20-A M.R.S.A. § 1001(14)(E)

states, in pertinent part:

          Insurance      purchase   by    competitive    bidding
          . . . .

          E. In order to facilitate the competitive
          bidding process in procuring health insurance
          for a school administrative unit's employees
          under this subsection, a school administrative
          unit may request from the insurer providing
          health insurance coverage to its employees and
          retirees loss information concerning all of
          that school administrative unit's employees
          and retirees and their dependents covered
          under the school administrative unit's policy
          or contract pursuant to Title 24-A, section
          2803-A.

24-A M.R.S.A. § 2803-A(2) reads, in turn:




                                    -7-
            2. Disclosure of basic loss information. Upon
            written request, every insurer shall provide
            loss information concerning a group policy or
            contract to its policyholder, to a former
            policyholder or to a school administrative
            unit pursuant to Title 20-A, section 1001,
            subsection 14, paragraph E within 21 business
            days of the date of the request.          This
            subsection does not apply to a former
            policyholder whose coverage terminated more
            than 18 months prior to the date of a request.

The "loss    information"       at   the   center   of   this    controversy    is

statutorily defined as "the aggregate claims experience of the

group insurance policy or contract," including "the amount of

premium received, the amount of claims paid[,] and the loss ratio,"

but not including "any information or data pertaining to the

medical diagnosis, treatment[,] or health status that identifies an

individual covered under the group contract or policy."                  Me. Rev.

Stat. Ann. tit. 24-A, § 2803-A(1)(B).

C. The Trust's Past Treatment of Loss Information

            The   Trust   has     structured    itself,     as    well   as    its

relationships with insurers, to keep the Plan's loss information

confidential.     Since the Trust's formation in 1993, its Trust

Agreement has provided, in relevant part:

            Fiduciary Authority. The Trustees shall have
            absolute discretion and authority to make all
            fiduciary     decisions,    plan    provision
            interpretations and constructions, and other
            determinations under this Trust and any plans
            maintained   under   the  Trust,  except   as
            specifically    delegated    to   the    Plan
            Administrator in writing; including, without
            limitation, decisions relating to the use and
            dissemination (if any) of the participant

                                       -8-
           claims   experience  data   under              any    plan
           maintained under the Trust.

Additionally, since 2005, the Trust's Group Agreements with Anthem

have included the following confidentiality clause:

           All experience data relative to the [Trust]
           and its subgroups is owned by the Trust, and
           that data will not be released, either
           directly or indirectly, by Anthem without
           prior written consent of the Trust, and the
           Trust can withhold its permission for any
           reason it deems appropriate.    Additionally,
           Anthem agrees not to utilize data relating to
           specific active subgroups for standalone
           rating purposes.

In   accordance   with   these     provisions,      the    Trust     has     always

considered the experience ratings and claims history of individual

school districts to be a proprietary, confidential trade secret.

The information    is    not    conveyed    to   anyone    outside      of   Anthem

(including to members of the Trust itself), and the Trust has

undertaken   reasonable        efforts     to    ensure    the     information's

confidentiality by neither collecting it nor allowing Anthem to use

or release it.2

           A driving force behind these efforts at maintaining

confidentiality is to prevent actuarially desirable districts from

acquiring the information and leaving the community-rated plan for

less expensive individual coverage, thereby increasing the monthly



     2
       The loss information is collected and maintained not by the
Trust, but by the insurer. The Trust's only role with respect to
the loss information is in preserving its confidentiality by
precluding third-party access.

                                     -9-
costs for the Plan's remaining members (or, alternatively, forcing

the Trust to expend additional resources from its reserve fund to

pay down the resulting rate increases).        Prior to the passage of

L.D. 1326, the Trust was able to do exactly that, denying multiple

school district requests for loss information over the years by

virtue of the fact that the Trust, and not the individual school

districts, was always the primary "policyholder."            See 1995 Me.

Laws, Ch. 71 (requiring disclosure of loss information concerning

a   group   health   insurance   policy   or   contract    only   to   "its

policyholder").

            Generally, group insurers in Maine require at least two

years of aggregate loss information from an employer in order to

provide a quote.     Thus, without access to loss information, school

districts cannot meaningfully explore insurance options outside

those offered by the Trust.      Following the enactment of L.D. 1326,

at least one district has already submitted a renewed request to

Anthem.     In the absence of an injunction, it is apparent that

school districts will continue to request access in order to obtain

competing quotes based on that loss information.          Depending on the

quotes and the terms of each district's collective bargaining

agreement, this process may or may not result in some districts

withdrawing their employees from the Plan.       In most cases, if not

all of them, negotiating changes to the respective collective




                                   -10-
bargaining agreements is a lengthy process that may take months, if

not years, to complete.

D. The Proceedings Below

          The Trust filed suit in the district court shortly after

L.D. 1326 was enacted.    Its amended complaint claimed that the Act

was preempted by federal law, and that it ran afoul of several

constitutional impediments, including the Contracts Clause, the

Takings Clause, and the Due Process Clause.      The district court

resolved the preemption question, as well as the impairment of

contract and due process claims, in favor of the defendants-

appellees, and it denied the Trust's subsequent request for a

preliminary injunction, finding primarily that the Trust was not

likely to succeed on the merits of its only remaining claim -- that

the Act works as an unconstitutional taking.     This interlocutory

appeal ensued, in which the Trust challenges only the denial of its

request for a preliminary injunction on takings grounds.3   We have

jurisdiction under 28 U.S.C. § 1292(a)(1), and on March 30, 2012,




     3
       We note that, ordinarily, injunctive relief is not available
under the Takings Clause. See Ruckelshaus v. Monsanto Co., 467
U.S. 986, 1016 (1984) ("Equitable relief is not available to enjoin
an alleged taking of private property for public use, duly
authorized by law, when a suit for compensation can be brought
against the sovereign subsequent to the taking."); Fideicomiso De
La Tierra Del Caño Martin Peña v. Fortuño, 604 F.3d 7, 19 n.10 (1st
Cir. 2010).     Because the appellees failed to object to the
appropriateness of this remedy on appeal, however, they have waived
the argument. See Philip Morris, Inc. v. Reilly, 312 F.3d 24, 47
n.22 (1st Cir. 2002) (en banc) ("Philip Morris II").

                                 -11-
we entered a temporary injunction prohibiting the enforcement of

L.D. 1326 pending appeal.

                                 II.

            In considering a request for a preliminary injunction, a

trial court must weigh several factors:       (1) the likelihood of

success on the merits; (2) the potential for irreparable harm to

the movant in the absence of an injunction; (3) the balance of the

movant's hardship if relief is denied versus the nonmovant's

hardship if the relief is granted; and (4) the effect, if any, of

the decision on the public interest.    Ross-Simons of Warwick, Inc.

v. Baccarat, Inc., 102 F.3d 12, 15 (1st Cir. 1996).    Of these four

factors, the movant's likelihood of success "is the touchstone of

the preliminary injunction inquiry."         Philip Morris, Inc. v.

Harshbarger, 159 F.3d 670, 674 (1st Cir. 1998) ("Philip Morris I").

"[I]f the moving party cannot demonstrate that he is likely to

succeed in his quest, the remaining factors become matters of idle

curiosity." New Comm Wireless Servs., Inc. v. SprintCom, Inc., 287

F.3d 1, 9 (1st Cir. 2002).

            We will set aside a district court's ruling on a request

for a preliminary injunction only if the court clearly erred in

assessing    the   facts,   misapprehended   the   applicable   legal

principles, or otherwise is shown to have manifestly abused its

discretion. Cohen v. Brown University, 991 F.2d 888, 902 (1st Cir.

1993).   This standard requires "a party who appeals from the


                                 -12-
issuance [or denial] of a preliminary injunction [to] bear[] the

considerable      burden   of   demonstrating      that    the    trial    court

mishandled the fourpart framework."            Philip Morris I, 159 F.3d at

674 (second and third alterations in original) (quoting Ross-

Simmons, 102 F.3d at 16) (internal quotation marks omitted).                  In

this case, our analysis begins and ends with the evaluation of the

often dispositive factor:           whether the Trust has a reasonable

likelihood of success on the merits of its takings claim.

A. Likelihood of Success on the Merits

            The Takings Clause of the Fifth Amendment, which applies

to the states through the Fourteenth Amendment, prohibits the

taking     of   private    property    for     public     use    without    just

compensation.      Lingle v. Chevron U.S.A. Inc., 544 U.S. 528, 536

(2005).     This prohibition extends not only to the paradigmatic

physical    taking    --   i.e.,    where    the   government     condemns    or

physically      appropriates    a   person's    property    --   but   also   to

regulatory interferences, which transpire "when some significant

restriction is placed upon an owner's use of his property for which

'justice and fairness' require that compensation be given." Philip

Morris, Inc. v. Reilly, 312 F.3d 24, 33 (1st Cir. 2002) (en banc)

("Philip Morris II").4


     4
       "Property," as contemplated by the Fifth Amendment, may be
real, tangible, or intangible like the purported trade secret at
issue here. See Monsanto, 467 U.S. at 1000-04. Although it is far
from clear that the loss information would qualify as a trade
secret under Maine law, see Me. Rev. Stat. Ann. tit. 10, § 1542(4),

                                      -13-
               The dichotomy between physical and regulatory takings is

critical, for it often determines the level of scrutiny that a

challenged government action will receive.                    In contrast to the law

of    physical    takings,     which   involves,        for    the   most    part,   the

"straightforward application of per se rules," the Supreme Court's

regulatory       takings    jurisprudence     has    eschewed        any    bright-line

formulations.         Tahoe-Sierra Pres. Council, Inc. v. Tahoe Reg'l

Planning Agency, 535 U.S. 302, 322 (2002). To assess the propriety

of a regulatory takings claim, the Court has instead enumerated a

more nuanced, three-pronged inquiry into (1) the extent to which

the    regulation       interferes     with       the     claimant's        reasonable

investment-backed          expectations;    (2)     the   regulation's        economic

impact    on    the   property    owner;    and     (3)   the     character     of   the

government action.         Penn Cent. Transp. Co. v. City of New York, 438

U.S. 104, 124 (1978). Designed to facilitate a careful examination

and weighing of all the relevant circumstances, the context-

sensitive "Penn Central" factors operate not as a "checklist of

items that can be ticked off as fulfilled or unfulfilled," but

rather as "lenses through which a court can view and process the

facts of a given case."          Philip Morris I, 159 F.3d at 674.

               The Supreme Court has recognized two circumstances under

which a regulatory action may justify bypassing the Penn Central



we assume, arguendo, that it comprises a sufficient property
interest on which to ground a Fifth Amendment takings claim.

                                       -14-
factors in favor of per se rules.                     First, where a regulation

inflicts a permanent physical invasion of private property --

however minor -- the government must provide just compensation.

Lingle, 544       U.S.   at 538;     see,     e.g.,    Loretto       v.    Teleprompter

Manhattan CATV Corp., 458 U.S. 419 (1982) (finding a taking where

a state law required landlords to permit cable companies to install

cable facilities in apartment buildings).                  A second categorical

rule applies to "regulations that completely deprive an owner of

all economically beneficial use of her property." Lingle, 544 U.S.

at 538 (internal quotation marks and alterations omitted); see,

e.g., Lucas v. S.C. Coastal Council, 505 U.S. 1003, 1019 (1992)

(holding    that    a    regulation      prohibiting      the       erection     of    any

permanent    habitable       structures       constituted       a    taking).          The

allegation here -- that L.D. 1326's disclosure requirement impinges

upon the Trust's purported trade secret -- encompasses neither of

these    scenarios.          Accordingly,       and    because       the    challenged

government    action      does     not   directly      appropriate         the   Trust's

property,    we    proceed    to    analyze     L.D.    1326    under      the   law   of

regulatory takings.5


     5
       The Trust contends that a taking of intellectual property,
such as a trade secret, is more properly analyzed under the per se
rules of the physical takings rubric. Because the Trust did not
adequately develop this argument in the trial court -- merely
inviting the district court to "truncate its [Penn Central]
analysis if it finds that [L.D. 1326] . . . is more analogous to a
'physical' than a 'regulatory' taking" -- it cannot unveil the
argument's essence for the first time in the court of appeals. See
Back Bay Spas, Inc. v. 441 Stuart Marketing, LLC, 688 F.3d 61, 67

                                         -15-
                 i. Reasonable Investment-Backed Expectations

                 Although generally recognized as the figurative ballast

of   the    Penn       Central      framework,          "reasonable      investment-backed

expectations" is a concept that can be difficult to define more

concretely.         See generally J. David Breemer & R.S. Radford, The

(Less?) Murky Doctrine of Investment-Backed Expectations After

Palazzolo, and the Lower Courts' Disturbing Insistence on Wallowing

in   the    Pre-Palazzolo           Muck,       34   S.W.U.      L.    Rev.   351    (2005).

Nevertheless, one very general contour is clear: "Courts [will]

only protect [a claimant's] reasonable expectations."                                   Philip

Morris II, 312 F.3d at 36.                    Thus, in considering whether the Trust

possesses the requisite expectations to support a takings claim,

the inquiry must acknowledge that "not every investment deserves

protection         and    .    .     .    some       investors        inevitably     will     be

disappointed."           Id.       The question reduces to whether the Trust,

given      all    of     the   attendant          facts    and    circumstances,        has    a

probability        of    success         of    showing    that    it    had   a     reasonable




(1st Cir. 2012) ("[H]aving chosen its theory of the case below, and
failed, [the appellant] cannot start over."); McCoy v. Mass. Inst.
of Tech., 950 F.2d 13, 22 (1st Cir. 1991) ("If claims are merely
insinuated rather than actually articulated in the trial court, we
will ordinarily refuse to deem them preserved for appellate
review.").    In any event, we are confident that under the
circumstances presented, our precedent supports the application of
the Penn Central factors. See Philip Morris II, 312 F.3d at 33-34
(applying a regulatory takings analysis to an alleged taking of a
trade secret); see also Monsanto, 467 U.S. at 1005 (same); Pharm.
Care Mgmt. Ass'n v. Rowe, 429 F.3d 294, 315 (1st Cir. 2005) (same).

                                                 -16-
expectation     that     the    Plan's      loss   information     will     be    kept

confidential.    We think not.

          As a baseline proposition, the Trust's expectations are

substantially diminished by the highly regulated nature of the

industry in which it operates. See Franklin Mem'l Hosp. v. Harvey,

575 F.3d 121, 128 (1st Cir. 2009) (holding that a claimant's

investment-backed expectations were "tempered by the fact that it

operate[d] in the highly regulated hospital industry"); see also

Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1007 (1984) (noting that

expectations are necessarily adjusted in areas that "ha[ve] long

been the source of public concern and the subject of government

regulation").          Given    the   historically        heavy   and     continuous

regulation of insurance in Maine, see Lessard, 2001 WL 17126553, at

*4, the Trust, in choosing how and where to allocate its resources,

ought to at least be aware of the heightened possibility that new

insurance regulations might hinder the use or value of its loss

information, see Lucas, 505 U.S. at 1027-28.

          This is particularly true where, as here, the extensive

regulatory    framework        in   place    prior   to    the    passage    of    the

challenged legislation has consistently regulated the type of

property interest for which the claimant seeks constitutional

protection.    See, e.g., Connolly v. Pension Ben. Guar. Corp., 475

U.S. 211, 226 (1986) (finding no reasonable investment-backed

expectations where the property interest at issue had been the


                                         -17-
"object[] of legislative concern long before the passage of [the

challenged legislation]").         Since 1989, holders of property and

casualty    insurance    in   Maine   have    been   able     to   obtain   their

policies' loss information.        See 1989 Me. Laws, Ch. 696.          In 1995

-- not long after the Trust was formed, and well before it began to

insist on the inclusion of confidentiality provisions in its Group

Agreements -- this right of access to loss information was expanded

to policyholders of group and blanket health insurance like the

Plan at issue here.      See 1995 Me. Laws, Ch. 71.            Thus, for years

the Trust was spared the obligation of disclosure solely because of

the Plan's unique structure, whereby the Trust, and not the school

district, was the technical policyholder. Throughout this extended

period, several of the state's school districts were clamoring for

loss information, and ultimately, for the legislature to close this

perceived loophole.      See Apollo Fuels, Inc. v. United States, 381

F.3d 1338, 1349 (Fed. Cir. 2004) (suggesting that a key aspect of

the   investment-backed       expectations    inquiry    is    the   claimant's

awareness    of   "the    problem      that    spawned      the    [challenged]

regulation").     Under these circumstances, the prospect of the

legislature's continued expansion of this right of access was

reasonably foreseeable.6


      6
       Maine health insurers must additionally submit group-policy
loss information to the Maine Bureau of Insurance through rate
filings, see Me. Rev. Stat. Ann. tit. 24-A, §§ 2736, 2808-B(2-A) &
2839, annual reports, see Me. Rev. Stat. Ann. tit. 24-A, §§ 423 &
423-D, and beginning in 2012, in medical loss ratio reports, see 42

                                      -18-
          The    Trust,     in     challenging    this     conclusion,   relies

principally on the distinction between "policyholders" and "non-

policyholders."    It contends that because L.D. 1326 grants non-

policyholders    (the     school     districts)      access   to   confidential

policyholder    information,       it   represents    an   "extraordinary and

unprecedented" regulatory shift.           We disagree.

          As a preliminary matter, requiring the disclosure of

otherwise private information to non-policyholders is not a novel

concept in Maine insurance law.            See, e.g., Me. Rev. Stat. Ann.

tit. 24-A, § 2210 (requiring insurers to provide personal data to

claimants and insureds over a policyholder's objection); Me. Code.

R. 90 590 243 §§ 2, 5 (2003) (requiring insurers to provide claims

data to the government over a policyholder's objection).

          Moreover, the significant role that school districts play

in the Plan's overall scheme is important to the analysis.               While

it is true that the districts do not formally sign the insurance

agreements on behalf of their employees, and therefore are not the

formal sponsors of the Plan, they are otherwise integrally involved


U.S.C. § 300gg-18(a). Although insurers may request that any such
data submitted in large-group rate filings be treated as
confidential, any loss information included in annual reports or
medical loss ratio reports is subject to full public disclosure.
While the loss information shared in these instruments is typically
aggregated across entire policies (or perhaps even entire blocks of
business), and therefore does not necessitate disclosure of the
district-by-district breakdown that constitutes the Trust's
purported trade secret, these additional disclosure requirements
serve to further highlight the State's extensive regulation of loss
information.

                                        -19-
in just about every step of the process, from negotiating the

collective bargaining agreements to organizing and participating in

collaborative votes to determine whether their employees may enroll

in the Plan in the first instance.              In the event that loss

information   is   to   be   disclosed   for   the   purpose   of   exploring

alternative district-specific coverage, the district itself is the

obvious choice to assume "policyholder" status.            Indeed, the Act

forecloses the type of "unprecedented" access argued by the Trust,

by restricting disclosure to loss information that concerns the

inquiring district's own employees, retirees, and their dependents;

it does not grant access to the Trust's policy-wide loss ratios.

See Me. Rev. Stat. Ann. tit. 20-A, § 1001(14)(E).                   Thus, the

districts are not, as the Trust suggests, mere "strangers to the

insurance contract" in the ordinary sense, and L.D. 1326 is not at

odds with Maine's existing body of insurance law.7


     7
       The Trust's attempt to analogize the facts of this case to
those we considered in Philip Morris II is also unpersuasive. See
312 F.3d 24. Although Philip Morris II addressed, as here, the
potential regulatory taking of a trade secret, its factual context
was dramatically different. There, tobacco companies challenged a
Massachusetts law which compelled them to disclose their cigarette
recipes -- traditionally protected trade secrets in which they
invested substantial amounts to maintain an advantage in a highly
competitive private industry.      Here, by contrast, the Trust
challenges a Maine law that compels the disclosure of loss
information -- a purported trade secret in which the Trust has made
no significant developmental investment, and a type of property
interest which has consistently been targeted by state regulation
given the need for transparency in the public-oriented insurance
industry.   Fundamentally distinguishable on its facts, Philip
Morris II does not suggest a finding of reasonable investment-
backed expectations in this case.

                                   -20-
           While this conclusion is largely dictated by precedent,

it is also rational from a policy standpoint.               The motivation

behind the State's previous attempts to regulate loss information

was clear:       to prevent sellers of group health insurance from

acquiring disproportionate leverage over buyers by ensuring that

both parties have access to the relevant cost information.               The

construct created and advocated by the Trust, under which such

information cannot be released to "non-policyholders," effectively

precludes any member school district from opting out of the Plan,

and thus is contrary to the regulation's intent by denying school

districts the benefit of equal access.

           We recognize that the Trust's purpose is to spread health

risk among a larger population, thereby bringing insurance costs

down for districts in which enrollees, on average, are less healthy

and where health care costs are relatively high.           Nonetheless, the

fact   remains    that   the   legislation   is   highly   consistent   with

legitimate policy objectives.       L.D. 1326 simply continues what the

1989 and 1995 regulations started by addressing a unique scenario

which, in all likelihood, was not contemplated by the original

legislation. Cf. Connolly, 475 U.S. at 227 ("Those who do business

in the regulated field cannot object if the legislative scheme is

buttressed by subsequent amendments to achieve the legislative

end." (quoting FHA v. The Darlington, Inc., 358 U.S. 84, 91

(1958)).


                                    -21-
          The Trust's remaining arguments on this issue require

little discussion.    It attempts to treat the aforementioned facts

in isolation, asserting that none, standing alone, was sufficient

to provide the Trust with constructive notice of L.D. 1326.   It may

be that neither the fact that the insurance industry is highly

regulated nor the fact that school districts routinely sought

access to the seemingly confidential loss information, standing

alone, sufficiently undermines the reasonableness of the Trust's

expectations.   But taken together, and in light of the State's

history of aggressively regulating the use and disclosure of loss

information, L.D. 1326 is a relatively minor expansion which the

Trust could, and should, have anticipated.

          We do not discount the fact that, since its inception,

the Trust has gone to lengths to preserve the confidentiality of

its purported trade secret.   Its Trust Agreements, as well as its

post-2004 Group Agreements with Anthem, unequivocally reserve to

the Trust all rights respecting the Plan's loss information, and

the Trust has enforced those rights in the face of repeated school

district inquiries.     The Trust therefore has demonstrated an

expectation of confidentiality.    But unilateral expectations, no

matter how adamantly pursued, are not enough.    See Monsanto, 467

U.S. at 1005-06.   The expectation must be a reasonable one, and on




                                -22-
the record before us, we cannot conclude that the plaintiffs have

shown a probability of success on this issue.8

            ii. Economic Impact

            Evaluating   the   magnitude   of   the   economic   impact   of

regulatory action ordinarily requires an assessment of the extent

to which the action "impairs the value or [typical] use" of the

property.     PruneYard Shopping Ctr. v. Robins, 447 U.S. 74, 83

(1980).     In this regard, a result of the law's requirement that

loss information be disclosed to districts upon request is that the

Trust may be less able to prevent districts with favorable claims

experience from shopping for alternative coverage.         Upon acquiring

their respective    loss   information, some      actuarially    favorable

school districts may leave the Plan for less expensive district-

specific coverage, resulting in relatively higher premiums for the

Plan's remaining members (or greater expenditures by the Trust to

pay those rate increases down).      We do not minimize this possible

impact, and we acknowledge the Trust's defensible goal of making

insurance more affordable for those in areas where health care

costs are higher and teacher salaries are lower.




     8
        The parties and the district court bifurcate the
expectations analysis, addressing pre- and post-L.D. 1326 loss
information separately. Because the Trust has not demonstrated a
probability of success in establishing a reasonable expectation
regarding the confidentiality of loss information accumulated prior
to L.D. 1326, however, it follows that no such expectation would
exist subsequent to the legislation's enactment.

                                   -23-
           The likelihood and severity of the exodus of members,

however, are completely unknown. The only concrete evidence on the

issue includes the affidavits of the parties' dueling actuaries who

debate, at a high level of generality, the extent to which L.D.

1326 will undermine the Trust's prospective viability. To wit, the

Trust's   actuarial    expert,     having    been    denied    access   to    the

district-specific loss ratios,9 was able to conclude only that "if

individual school districts purchase insurance on their own, some

groups with lower average age, more favorable utilization history,

or a lower cost of geographic area might be able to take advantage

of that more favorable profile and obtain insurance from Anthem or

another   carrier     at   lower   cost     than    they   currently    pay    to

participate in the . . . [P]lan."           This evidence merely serves to

highlight the conjectural nature of the Act's economic impact, and

is "not sufficiently concrete to establish a taking."              In re Jones

Truck Lines, Inc., 57 F.3d 642, 651 (8th Cir. 1995) (finding that

economic impact was too speculative to support a takings claim);

see also Tenn. Scrap Recyclers Ass'n v. Bredesen, 556 F.3d 442, 456

(6th Cir. 2009) (finding that the economic impact of the challenged

regulation did not support the movant's takings claim, in part

because   "the      [economic]     impact     of    [the      regulation     was]

speculative").


     9
       The expert stated in his affidavit that "I do not have
access to the experience of the individual districts whose
employees and retirees are covered by the . . . [P]lan."

                                    -24-
            Whether or not at trial, and with a more developed

evidentiary   foundation,   the    Trust   may   be   able   to   prove   the

requisite economic impact, it has not yet done so sufficiently to

show a probability of success on the merits.

            iii. Character of the Government Action

            The third and final consideration in the regulatory

takings analysis -- the character of the government action -- also

weighs against the Trust's takings claim. Under Penn Central, "[a]

'taking' may more readily be found when the interference with

property can be characterized as a physical invasion by government

than when [the] interference arises from some public program

adjusting the benefits and burdens of economic life to promote the

common good."    Id. (citation omitted).      L.D. 1326 clearly falls on

the latter end of the spectrum, reflecting the legislature's

judgment that allowing school districts to access their employees'

loss information will promote the common good by creating a wider

array of competitively priced group health insurance options.             See

Me. Rev. Stat. Ann. tit. 20-A, § 1001(14)(E) (enabling school

districts   to   request   their   loss    information   "[i]n    order   to

facilitate the competitive bidding process in procuring [group]

health insurance").

            The Trust argues that even if the Act is intended to

promote the common good, it does so improperly by reallocating to

the Trust alone what is essentially a public burden. Claiming that


                                   -25-
it has been effectively "singl[ed] out" by the Maine legislature,

the Trust directs us to five comments in the Act's legislative

record which, more or less, appear to cast the Trust in a negative

light.

           The argument, however, is unavailing. L.D. 1326 does not

apply solely to the Trust; it applies to every existing or future

multi-employer group health insurance plan in which the State's

public school districts choose to enroll. That the Trust attracted

the attention of a handful of legislators, and currently bears the

brunt of the Act's burden, is merely a byproduct of its holding the

predominant share of the targeted market -- a virtual monopoly,

perpetuated by the very policy of non-disclosure which it seeks to

protect.   At the preliminary injunction stage, the Trust has not

shown that the Act attempts to impose on the Trust an excessive

burden that should in fairness be borne by other entities or by

society as a whole.    Cf. E. Enter. v. Apfel, 524 U.S. 498, 537

(1998) (holding that the character of a state regulation supported

the movant's takings claim only where it "single[d] out certain

employers to bear a burden that is substantial in amount, based on

the employers' conduct far in the past, and unrelated to any

commitment that the employers made or to any injury that they

caused"). Thus, the third Penn Central factor, like the two before

it, counsels against finding that a taking has occurred.




                               -26-
            We emphasize that because we hear this matter on appeal

from the denial of a preliminary injunction, our likelihood-of-

success determinations are to be understood only as probable

outcomes.   See Cohen, 991 F.2d at 902.   At the upcoming trial, the

Trust will have the opportunity to demonstrate more concretely and

comprehensively the economic impact that it fears, namely, the

withdrawal of school districts with better claims experience and

the resulting increased cost of health insurance coverage for the

Trust's remaining members.     Based on the present state of the

record, however, we cannot conclude that the Trust is likely to

succeed on the merits.

                                III.

            Because the plaintiffs have not established a likelihood

of success, and such a showing is essential to the issuance of a

preliminary injunction, see Philip Morris I, 159 F.3d at 674, it

would serve no useful purpose to explore the remaining three facets

of the preliminary injunction framework.     We conclude that there

was no abuse of discretion in the denial of the Trust's motion for

a preliminary injunction, and leave to the trial court to determine

whether it should stay enforcement of the Act pending hearing

evidence and decision on the merits.   The decision of the district

court is affirmed.     Each side shall bear its own costs of this

appeal.




                                -27-
