Ohio v. Cargill, Tuscarawas Cty Ct. of Common Pleas (Mar. 21, 2012)
State alleged that two rock salt producers had agreed to divide up the Ohio market for rock salt, assigning different contracts to the two different producers. State alleged that the defendants actively submitted sham losing bids, which also excluded other bidders because Ohio’s “Buy Ohio” provisions give a preference to Ohio companies if at least two Ohio producers submit bids.The parties settled in June 2015 with a payments totaling $11.5 million.
Maine v. MaineHealth, No. BCD-CV-11-08 (Super. Ct. Cumberland Cty. Maine Jan. 13, 2012)
Health system sought to purchase two cardiology practice groups in the Portland Maine area and employ them at its Portland hospital. On two previous occasions, the practice groups had sought to merge and the Attorney General had disapproved the transaction. The parties agreed to a settlement with a number of injunctive provisions for a term of five years.
Pennsylvania v. Geisinger Medical Center, No. 344 MD 2011 (Pa. Comm. Ct. July 26, 2011)
State challenged merger on the grounds that it could lessen competition for primary or secondary acute care hospital services sold to Medicare plans and primary and non-tertiary physician services in Northumberland County, PA.
U.S. and Montana v. Blue Cross and Blue Shield of Montana, No.
USDOJ and Montana sued to prevent agreement between BCBS of Montana and New West, two of three competitors in the Montana health insurance market. Five of the six hospital owners of New West had agreed to purchase health insurance from Blue Cross exclusively for six years. once the five hospital owners stopped purchasing health insurance from New West, they likely would have significantly reduced their support for New West and its efforts to win commercial health-insurance customers. These anticompetitive effects would have been exacerbated by a provision in the parties’ agreement that requires Blue Cross to give the hospital owners two seats on Blue Cross’ board of directors if the hospitals do not compete with Blue Cross in the sale of commercial health insurance. DOJ and Montana required that New West promptly divest its remaining commercial health-insurance business to an acquirer with the intent and capability to be an effective competitor. The hospital owners must enter three-year contracts with the acquirer to provide health-care services on terms that are substantially similar to their existing contractual terms with New West. At the acquirer’s option, New West and the five hospital owners must also use their best efforts to assign the health-care provider contracts that are not under their control to the acquirer or to lease New West’s provider network to the acquirer for up to three years. Under the proposed settlement, Blue Cross must notify the department and the state of Montana before it uses exclusive contracts with health-insurance brokers, or exclusive or most-favored-nation provisions in its agreements with health-care providers.
In re GE Funding Capital Market Services, Inc. (Municipal Bond Derivatives)
Starting in 2008, the states investigated the municipal bond derivatives market, where tax exempt entities like governments and nonprofit organizations issue bonds and reinvest the proceeds until the funds are needed or enter into contracts to hedge interest rate risk on bonds. GE Funding is the fifth financial institution to settle with the multistate working group in the ongoing municipal bond derivatives investigation following Bank of America, UBS AG, JP Morgan and Wachovia.
The investigation revealed conspiratorial and fraudulent conduct involving individuals at financial institutions and certain brokers with whom they had working relationships. The states’ investigation developed evidence that certain traders at GE Funding, in concert with certain brokers, engaged in conduct that allowed the broker to determine in advance that GE Funding would win a bid for a guaranteed investment contract. The conduct allowed GE Funding to submit a “last look’’ bid, while the broker arranged for other financial institutions to submit purposely non-winning courtesy bids. Because of the “last look,” on many occasions GE Funding was able to lower its bid to the issuer and still win the transaction.The misconduct led state and local entities, such as municipalities, counties, school districts and other government agencies, as well as nonprofits, to enter into municipal derivatives contracts on less advantageous terms than they would have otherwise.
In the Matter of McSam Management (July 5, 2011)
State reached a settlement with two hotel
owners and a hotel management company to end their practice of “call-arounds.” According to the state, call-arounds allowed competing
hotels in close proximity to exchange sensitive competitor information at least once a day about occupancy and current room rates that may be used to fix rates for hotel rooms. Owners of Holiday Inn Express and Homewood Suites in two Connecticut cities agreed to stop sharing information and to pay $50,000 civil fine.
In re J.P. Morgan Chase (Municipal Bond Derivatives)
Starting in 2008, the states investigated the municipal bond derivatives market, where tax exempt entities like governments and nonprofit organizations issue bonds and reinvest the proceeds until the funds are needed or enter into contracts to hedge interest rate risk on bonds.
The investigation revealed conspiratorial and fraudulent conduct involving individuals at JPMC, other financial institutions, and certain brokers with whom they had working relationships. The states alleged that certain JPMC employees and their counterparts at other institutions rigged bids, submitted noncompetitive courtesy bids and fraudulent certificates of arms-length bidding to government agencies. The misconduct led state and local entities, such as municipalities, counties, school districts and other government agencies, as well as nonprofits, to enter into municipal derivatives contracts on less advantageous terms than they would have otherwise. The $66.5 million multistate settlement is one component of a coordinated settlements (totaling $92 million) between JPMC and the U.S. Department of Justice’s Antitrust Division, the Securities and Exchange Commission (SEC), the Internal Revenue Service, the Office of the Comptroller of the Currency (OCC), as well as the states.
Connecticut v. Galante, No. X04-HHD-CV-09-5033841-S (Ct. Super. Ct. Hartford, April 11, 2011)
In 2009, Connecticut sued James E. Galante, former owner of waste disposal companies operating in the Dan bury area, for alleged violations of the Connecticut Unfair Trade Practices Act and the Connecticut Antitrust Act. The lawsuit alleged that in 2002 and 2004, Galante ordered his employees at AWD and Thomas to raise prices by 10 percent for certain commercial customers under the false representation that they were mandatory increases for disposal-site costs. The lawsuit also alleged two incidents of bid-rigging by American Disposal Services of Connecticut, another Galante-owned company, in attempts to secure waste-hauling contracts. Under terms of the settlement, the state received $600,000 to be distributed to an estimated 500 commercial customers of Galante’s former companies: Automated Waste Disposal, Inc. and Thomas Refuse Services Inc.The settlement was timed to the federal government’s sale of these and other companies forfeited by Galante as part of his 2008 guilty plea to federal racketeering conspiracy, conspiracy to defraud the Internal Revenue Service and wire-fraud conspiracy for his role in orchestrating a scheme to drive up trash-removal prices.
Hawaii v. ACE Holdings, Inc., No. 07-1-2015-10 (Cir. Ct. 1st Cir. Hawaii, Oct. 25, 2007)
Consent decrees filed by states in state court required $4.5 million payment and conduct relief to remedy alleged bid-rigging and false insurance quotes, as well as payment of secret “contingent commissions” to brokers.
U.S. and Texas v. United Regional Healthcare System, No. 7:11-cv-00030 (N.D.Tex. Feb. 25, 2011)
USDOJ and Texas reached a settlement with United Regional Health Care System of Wichita Falls, Texas, that prohibits it from entering into contracts that improperly inhibit commercial health insurers from contracting with United Regional’s competitors. Plaintiffs alleged that United Regional unlawfully used these contracts to maintain its monopoly for hospital services in violation of Section 2 of the Sherman Act.
