IN the matter of the Chubb Corporation, Mass. Super. Ct. (Sullfolk)
State reached settlement with The Chubb Corporation (“Chubb”) resolving allegations that Chubb’s compensation practices offered improper incentives and enabled Boston-based insurance brokerage firm William Gallagher Associates Insurance Brokers, Inc. (“WGA”) to direct business to Chubb. As part of the settlement, Chubb will pay $182,815 to WGA customers and $56,196 to the Commonwealth to be used in insurance mediation.
New York et al. v. Herman Miller, Inc. (
Three states alleged Herman Miller (HMH) sought to raise and maintain retail prices on its “AERON” chairs. According to the complaint, HMH responded to complaints and urging by HMH’s retailers, beginning in 2001, by establishing and announcing minimum prices, below which retailers were prohibited from advertising any HMH furniture. Under HMH’s Suggested Retail Price policy, HMH retailers had to agree with HMH not to advertise below HMH’s dictated prices for Aeron chairs in any medium where prices can be seen by consumers. HMH was enjoined from using the SRP program for two years,and from telling dealers how much to sell their chairs for. HMH paid $750,00 to the plaintiff states.
Massachusetts v.William Gallagher & Associates
State filed a complaint and a Consent Judgment against Boston-based insurance broker William Gallagher Associates Insurance Brokers, Inc. (“WGA”) for billing customers for unauthorized and undisclosed compensation and misleading customers about the brokerage firm’s contingent commission practices and involvement in reinsurance. Contingent commissions, also known as profit sharing commissions, are controversial incentive-based compensation programs offered to brokers by insurance companies. WGA agreed to return $3,017,003 to eleven clients, pay at least $925,000 in sanctions and attorneys fees to the State, and submit to a binding audit of its Energy and Environmental practice group. The Judgment also requires WGA to send statements to over seven hundred customers to correct prior allegedly false representations the company made regarding its employees’ knowledge of contingent commissions and WGA’s participation in reinsurance. Reinsurance is a form of insurance that insurance companies purchase to protect themselves against their policyholders’ claims. Going forward, WGA has agreed to provide enhanced compensation disclosures to customers by providing written notice of all fees and commissions.
Connecticut v. K&S Aktiongesellschaft (Ct.Super.Ct. Oct. 13, 2009)
In state action parallel to FTC action, Connecticut settled with parties to a merger of salt producers who had both had contracts with the state DOT for road deicing. Road deicing assets were divested to a regional company in order to preserve competition for Connecticut road de-icing contracts. The merging parties were required to provide up to 120,000 tons of de-icing salt for three years.
Richardson v. Akzo Nobel (In re Vitamins Antitrust Litigation), 1:09-cv-02112-TFH(D.D.C. 2009)
As part of a private class action lawsuit, states, as parens patriae for their citizens, reached a settlement with vitamin manufacturers accused of fixing prices on certain vitamins (The vitamins affected by this alleged price fixing conspiracy are: vitamin A,
astaxanthin, vitamin B1 (thiamin), vitamin B2 (riboflavin), vitamin B3 (niacin), vitamin B4 (choline chloride), vitamin B5 (calpan), vitamin B6, vitamin B9 (folic acid), vitamin B12 (cyanocobalamine pharma), betacarotene, vitamin C, canthaxanthin, vitamin E, and vitamin H (biotin), as well as all blends and forms of these vitamins) sold purchased between 1988 and 2000. This case is related to the case New York et al. v. Hoffmann-LaRoche, Inc.,et al. with different defendants.
New York by Cuomo v. Intel Corporation, No. 09-827(JJF) (D. Del. Nov. 4, 2009)
State of New York filed a federal antitrust suit against Intel Corporation charging that Intel engaged in a worldwide, systematic campaign of illegal conduct – revealed in e-mails – in order to maintain its monopoly power and prices in the market for microprocessors. The complaint alleged that over the last several years, Intel has extracted exclusive agreements from large computer makers in which they agreed to use Intel’s microprocessors in exchange for payments totaling billions of dollars. Intel also threatened to and did in fact punish computer makers that they perceived to be working too closely with Intel’s competitors. Retaliatory threats included cutting off payments the computer maker was receiving from Intel, directly funding a computer maker’s competitors, and ending joint development ventures. According to the complaint, to obtain exclusive agreements, Intel paid hundreds of millions of dollars annually in so-called “rebates†to individual computer makers. These rebates were actually just payoffs with no legitimate business purpose that Intel invented to disguise their anticompetitive nature. Sometimes, the payments from Intel exceeded a company’s reported quarterly net income. Intel’s pressure on computer makers to guarantee it specified market shares of their sales prevented computer makers from responding to consumer demand. The state sought to bar further anticompetitive acts by Intel, restore lost competition, recover monetary damages suffered by New York governmental entities and consumers, and collect penalties. Intel’s various motions to dismiss were granted, greatly reducing the scope of the state’s case. The parties settled in 2012. New York dismissed the action with prejudice and agreed to terminate its investigation. Intel did not admit wrongdoing and did not change its business practices, but agreed to pay $6.7 million in costs.
U.S., Missouri and Nebraska v. Stericycle, Inc. Case. No. 1:09-cv-02268 (D.D.C. 2009)
U.S. DOJ, Missouri and Nebraska filed complaint alleging that acquisition of Medserve by Stericycle would substantially lessen competition in infectious waste collection and treatment services to hospitals and other critical healthcare facilities in Kansas, Missouri, Nebraska and Oklahoma, resulting in higher prices and reduced service. The parties reached a settlement under which Stericycle and MedServe must divest all of MedServe’s assets primarily used in the provision of infectious waste collection and treatment services to large customers in Kansas, Missouri, Nebraska and Oklahoma to a viable purchaser approved by DOJ after consultation with the states. These assets include MedServe’s Newton, Kan., treatment facility, and its transfer stations in Kansas City, Kan., Oklahoma City, Omaha, Neb., and Booneville, Mo. Notice of future acquisitions must be provided to the plaintiffs.
Hood ex rel. Mississippi v. Microsoft, No. G2004-1542 (Chan. Ct. Hinds County Miss., July 16, 2008)
The state sued Microsoft in 2004 on behalf of governmental purchasers and as parens patriae for its citizens claiming the company monopolized the market for software and caused customers to pay more for software than they would have if there had been competition. Microsoft agreed to pay Mississippi $40 million. Up to $60 million in hardware/software vouchers will be provided to consumers, businesses, all county/local/municipal government entities, public schools and public school districts. Depending on how many vouchers go unclaimed, Mississippi could get an addition $8 million. All Mississippi residents, businesses, county/local governments or schools that purchased Microsoft products or computers containing Microsoft products between January 1, 1996 and June 2009 were eligible to receive a voucher of $12 or $5 (depending on which products were purchased). The vouchers could be used towards the purchase of any software or hardware product (not just Microsoft).
Nevada by Masto, v. Service Corporation International, No. 2:09-cv-02248. (D.Nev. 2009)
SCI sought to acquire the assets of Palm Mortuary, a cemetery company in Las Vegas, Nevada. After state and FTC investigation, determined that the acquisition would have created a combined company controlling 76% of the cemetery market in the Las Vegas area, the state and FTC filed a complaint and settlement. SCI agreed to divest most of its assets in the Las Vegas area in order to proceed with the acquisition. The complaint alleged that the acquisition, as planned, would eliminate direct competition between SCI and Palm Mortuary for cemetery services in the Las Vegas area. This would leave area cemetery consumers with fewer choices, along with the prospect of higher prices or reduced levels of service. The complaint also alleged that entry into this market from new cemetery providers would not be timely, likely or sufficient to prevent these anticompetitive effects. The settlement provides that SCI must sell its Davis Funeral Home and Memorial Park property as well as the pre-paid business derived from this property and another SCI-owned Davis funeral home to a buyer approved by the Attorney General within 90 days of SCI acquiring Palm Mortuary. Prior to SCI selling these Davis assets, SCI must ensure the economic and competitive viability of these Davis assets in accordance with past practices. A series of firewall protections help accomplish this. The Attorney General’s staff will monitor SCI’s compliance and can name an independent third party to monitor the company’s compliance. For the next three years, SCI will provide notice to the Attorney General of future acquisitions that involve cemetery service or funeral service markets where the company already has a presence in Nevada. Additionally, SCI reimbursed the Office of the Attorney General for its attorneys’ fees and costs resulting from the investigation, as well as any potential future investigations. SCI is subject to fines and injunctive relief for non-compliance.
California v. Education Media and Publishing Group Ltd, No. 09-2134-JCS (N.D. Cal. 2009, May 15, 2009)
As part of the review of the acquisition by textbook publisher Houghton Mifflin of textbook publisher Harcourt Education, the state filed a consent decree under which price increases on California-adopted textbooks and workbooks would be capped at 4.25 percent per annum for six years. The merging parties agreed to pay the state $300,00 in attorneys’ fees and costs.
