Commonwealth of Pennsyvlania v. Chesapeake Energy Corp, No. 2015IR0069 (Ct. Comm. Pleas, Bradford Cty, 2015)

State filed action in state court alleging market allocation agreement affecting leases for hydraulic fracturing on land in central Pennsylvania. The state alleged that the failure to disclose the agreement violated state consumer protection laws, and that the agreement itself violated Pennsylvania antitrust common law. After defendants argued that Pennsylvania has no state antitrust statute, the state filed an amended complaint which included claims of violations of the federal antitrust laws. Defendants sought removal.

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State of Maryland v. Johnson & Johnson Vision Care (Cir. Ct. Baltimore Cty Feb. 29, 2016)

State alleged that defendant, responding to requests from eye care professionals to limit competition from discounters, implemented a resale price maintenance policy, which fixed minimum retail prices for all retail sellers of Johnson & Johnson contact lenses. After objections from Costco, a large discount retailer, defendant revised its policy. Under Maryland law, although not federal law, an agreement establishing a minimum retail price is an unreasonable restraint of trade and per se illegal. The parties entered into an Assurance of Discontinuance under which Johnson & Johnson permanently discontinued the RPM agreements alleged and agreed to pay $50,000 in civil penalties.

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Florida v, NSK Ltd.

State alleged price-fixing in the market for automotive ball bearings, including bearings used throughout the automobile, from 2000 to the present. The defendants control 75 percent of the market, and entry is not easy. Several of the defendants entered guilty pleas to criminal charges brought by USDOJ.

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Connecticut v. H.I. Stone & Son, Inc., Ct. Super. Ct., Hartford Dist. Oct. 22.2014

Plaintiff state alleged that the town of Southbury in October 2011 decided to put its snow removal contract out to bid, rather than offering it to the defendants without competition. According to the complaint, the defendants colluded and jointly refused to deal with the town and plow for the fast approaching nor’easter unless they were given a guaranteed minimum contract for a larger portion of that winter season. In the face of this threat, and with the impending storm posing a potential threat to public safety, the town agreed. The town later put out a bid for the remainder of its snow removal work for the 2011-to-2012 winter season. According to the complaint, the defendants again colluded and entered into a conspiracy with one another designed to eliminate competition among them and substantially raise the prices they received for snowplowing services from the town. Under the settlement agreement, the three corporate defendants will pay the state $30,000 each in civil penalties. The three companies will also provide the town of Southbury with snow removal services at the original rate prior to the conspiracy for a period of three years that will be applied retroactively beginning with the 2013-2014 winter season. In addition to paying civil penalties and providing reduced-rate services to the town of Southbury, each company will establish an antitrust and competition training program that will be provided to the Office of Attorney General for its review on an annual basis.

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South Carolina v. AU Optronics et al.,

Plaintiff state filed complaint in state court, alleging that the defendant manufacturers of liquid crystal display (“LCD”) panels had engaged in a price-fixing conspiracy from 1996 through 2006. The State sought civil forfeitures for violations of the state Antitrust Act; statutory penalties for violations of SCUTPA and restitution on behalf of South Carolina citizens for violations of SCUTPA, Defendants removed the case pursuant to CAFA, alleging it was a class action and mass action under CAFA because the real parties in interest are the state citizens who will receive restitution. The district court remanded the case to state court, on the grounds that the state had a quasi sovereign interest in the case and was the real party in interest. The Fourth Circuit affirmed the decision, in part because the relief available to the state was available to it alone. The case is stayed pending a decision by the Supreme Court in Mississippi ex rel. Hood v. AU Optronics.

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South Carolina v. LG Display Col, Ltd. et al.

Plaintiff state filed complaint in state court, alleging that the defendant manufacturers of liquid crystal display (“LCD”) panels had engaged in a price-fixing conspiracy from 1996 through 2006. The State sought civil forfeitures for violations of the state Antitrust Act; statutory penalties for violations of SCUTPA and restitution on behalf of South Carolina citizens for violations of SCUTPA, Defendants removed the case pursuant to CAFA, alleging it was a class action and mass action under CAFA because the real parties in interest are the state citizens who will receive restitution. The district court remanded the case to state court, on the grounds that the state had a quasi sovereign interest in the case and was the real party in interest. The Fourth Circuit affirmed the decision, in part because the relief available to the state was available to it alone. The case is stayed pending a decision by the Supreme Court in Mississippi ex rel. Hood v. AU Optronics.

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State of Florida et al. v. Hitachi-LG Data Storage Inc. et al., No.3:13-cv-01877

After Hitachi-LG Data Storage, Inc. was charged with a 15-count felony charge by the United States Department of Justice, pleaded guilty to bid-rigging and price-fixing of Optical Disc Drives (ODDs) and paid a $21.1 million criminal fine, Florida filed suit. The suit alleged that Hitachi-LG Data Storage, Inc. and its subsidiary, Hitachi-LG Data Storage Korea, Inc., participated in meetings, discussions, and communications to share competitively sensitive information, in order to rig bids for ODDs sold to Dell Inc., Hewlett-Packard Company, and Microsoft Corporation. The state is seeking equitable relief, damages, and civil penalties for Florida consumers, businesses, and governmental entities.

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People of the State of California v. EBay, Inc., No. CV12-5874 (N.D. Cal. Nov. 16, 2012)

State filed suit (simultaneous with USDOJ suit) alleging EBay and Intuit agreed from 2008 to 2009 not to hire one another’s employees. This agreement, allegedly enforced at the highest levels in the companies, prevented employees from seeking positions at the other companies. USDOJ filed a separate suit, but California’s seeks to enforce California laws which contain stronger protections against anti-competitive conduct than federal law. California reached a settlement with eBay for approximately $4 million in restitution to employees, damages for harm to the state’s economy, and civil penalties

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Texas et al. v. Penguin Group et al., No. 1:12-cv-03394-DLC (S.D.N.Y, Apr. 30, 2012)

TTexas and Connecticut led 33 state group that filed complaint charging three of the nation’s largest book publishers and Apple Inc. with colluding to fix the sales prices of electronic books. The States undertook a two-year investigation into allegations that the defendants conspired to raise e-book prices. Retailers had long sold e-books through a traditional wholesale distribution model, under which retailers, not publishers, set e-book sales prices. The states alleged that Penguin, Simon & Schuster and Macmillan conspired with other publishers and Apple to artificially raise prices by imposing a distribution model in which the publishers set the prices for bestsellers at $12.99 and $14.99. When Apple prepared to enter the e-book market, the publishers and Apple agreed to adopt an agency distribution model as a mechanism to allow them to fix prices. To enforce their price-fixing scheme, the publishers and Apple relied on contract terms that forced all e-book outlets to sell their products at the same price. Because the publishers agreed to use the same prices, retail price competition was eliminated. According to the States’ enforcement action, the coordinated agreement to fix prices resulted in e-book customers paying more than $100 million in overcharges. The States’ antitrust action seeks injunctive relief, damages for customers who paid artificially inflated prices for e-books and civil penalties. Case was filed in W.D. Tex., transferred to S.D.N.Y. as consolidated case. The States reached settlements with the five publishers, which granted E-book outlets greater freedom to reduce the prices of their E-book titles. Consumers nationwide received a total of $164 million in compensation. After entering into settlement agreement with all the Defendant publishers, DOJ and the states had a nearly 3 week trial against Apple in June 2013, during which numerous witnesses took the stand. On July 10, 2013, a decision was handed down in favor of the U.S. Department of Justice and the states against Apple. Trial of the damages phase is pending. United States et al. v. Apple, Inc., 12-CV-2826 (S.D.N.Y.).

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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.

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