- Municipal Derivative Investment Antitrust Litigation
Along with co-counsel, CPM represents Los Angeles and numerous public entities who purchased Guaranteed Investment Contracts (“GICs”) and other derivative investments. GICs and derivative investments are purchased from sellers of municipal securities through a competitive bidding process overseen by municipal securities brokers. They are purchased when public entities issue tax-exempt municipal bonds to raise funds to finance public works projects and have funds that are not immediately needed for the project. CPM’s investigation has uncovered, and the complaints allege, that the competitive bidding process is a sham as securities sellers and brokers in the derivative investment market have engaged in a conspiracy to allocate the market and rig the bidding process in violation of antitrust law and common law.
Click here to view the complaint.
PDF, 1.5 MB
- Municipal Bond Insurance Antitrust Litigation
CPM represents Los Angeles and numerous public entities who issued tax-exempt municipal bonds to raise funds to finance public works projects and were compelled to purchase insurance for those bond issuances. When a public entity issues bonds, its credit rating determines the interest it will pay to bond holders. To reduce the interest rate, public entities have had to purchase bond insurance to improve their credit worthiness (despite an historical default rate of less than 0.1 percent). CPM’s investigation has uncovered and the complaints allege that the bond insurance companies violated antitrust law and common law by conspiring to maintain a dual credit rating system that discriminates against public entities (versus private corporations), causing public entities to pay unusually high premiums to purchase unnecessary bond insurance, and failure of the bond insurance companies to disclose they made risky investments in the subprime market that has led to the downgrading of the bond insurers’ own credit ratings.
- Class Action Suit Alleges Price-Fixing Conspiracy in the Ocean Shipping Industry
On April 17, 2008, the Department of Justice’s Antitrust Division raided the offices of a number of major ocean shipping companies, including Defendants Horizon and Crowley. Others received subpoenas for documents from the federal government. The subject of the federal investigation related to a pervasive conspiracy in the ocean shipping industry to artificially raise the price of shipping goods between the continental United States and its territories, primarily Puerto Rico, Guam and Hawaii. CP&M, on behalf of a class of individuals and entities, filed suit in the Southern District of Florida and the Northern District of California, accusing the major ocean shipping companies of violating federal antitrust laws and seeks the recovery of treble damages for the losses suffered by consumers. This conspiracy has enriched the Defendants while harming the American economy and American businesses. The suit accuses the Defendants of: (1) conspiring to fix fuel surcharges on domestic shipping rates, (2) conspiracy to decrease and stabilize shipping capacity, (3) conspiracy to fix domestic intermodal rates to shippers, and (4) a concerted and coordinated refusal to deal with freight forwarders. By conspiring to fix prices, the ocean shipping industry has deprived consumers of the right to free and fair competition.
- Credit Counseling Industry Suit names Chase, Money Management International and Others
CP&M is continuing its investigation into fraudulent “debt counseling” and debt collections in the subprime credit industry.
The suit, filed in U.S. District Court in Los Angeles by CP&M and co-counsel, named JP Morgan Chase & Co., Chase Manhattan Bank USA, Money Management International (MMI), also known as Consumer Credit Counseling Service (CCCS), and Money Management By Mail Inc.
The suit and investigation arise out of the relatively new sub-prime credit counseling industry. The industry was created by the nation’s leading creditors (including leading credit card companies) to use third party, allegedly non-profit “credit counseling” organizations, to secretly facilitate their collections from unsuspecting customers who were in financial distress and had turned to what they thought were non-profits for financial help.
The complaint alleges that Management International Inc. (MMI) and others advertised and promoted themselves as non-profit credit counseling organizations whose main purpose was to act on behalf of the consumer. These companies were in fact operating as agents of the consumers’ creditors, including Chase, according to the complaint. These agencies claimed in their advertisements that they would “negotiate” on behalf of consumers with Chase and other credit card companies to whom consumers owed money – however, as alleged in the Complaint, there was no real “negotiation” – instead there were back room deals between the creditors and the “counseling” agencies designed to collect as much money as possible from unsuspecting consumers. The complaint alleges:
MMI and others were nothing more than debt collectors that, even according to Chase’s own documents, “partnered” with Chase to collect its accounts under the guise of “rescuing” consumers drowning in debt.
The agencies, in reality, operated as for-profit organizations, distributing monthly payments they collected from consumers to Chase, while keeping a share for themselves – effectively a payment by Chase that was kept hidden from the consumers.
The agencies also failed to provide comprehensive financial counseling that communicated all options open to indebted consumers. For example, the agencies as a matter of practice failed to discuss bankruptcy as an option since that would cut off the flow of money to the creditors.
The lawsuit seeks to recover monies wrongfully obtained from consumers (including Chase credit card holders) who were indebted to Chase and/or who contracted for credit repair and debt management plan services from MMI or credit counseling agencies that MMI has taken over.
If you feel you have been victimized by subprime credit “counseling,” please contact us at TAKE ACTION to explore your legal rights.
Click here to view the complaint. PDF, 4.4 MB
- Webkinz Litigation
Nuts for Candy v. Ganz Inc., et al.
CV 08 2873 (Northern District of California)
Date filed: June 09, 2008
Complaint for Violations of Section 1 of the Sherman Act and Section 3 of the Clayton Act
CPM has file a complaint on behalf of a proposed class of persons or entities in the United States who ordered Webkinz from Ganz Inc. on the condition that they also order products from Ganz’s "core line" of products. The complaint alleges that Ganz conditions the purchase of its popular Webkinz plush line toy with the a minimum $1,000 purchase of non-Webkinz "core" line products in violation of federal antitrust laws.
Recent Activity
Interim Lead Counsel Motion PDF, 550K
Documents
Class Complaint PDF, 730K
- SRAM (Static Random Access Memory) Antitrust Litigation
MDL No. 1819 (N.D. Cal.)
Date Filed October 17, 2006
CPM is the court-appointed Lead Counsel on behalf of the proposed class of direct purchasers in this multidistrict class action against the major manufacturers of SRAM (Static Random Access Memory), including Samsung, Toshiba, Renesas, Hynix, Cypress, and Micron. Plaintiffs allege that from November 1996 through December 2005 the Defendant companies conspired to fix, raise and maintain the prices of SRAM, a memory chip used in a wide variety of computer and consumer electronics products, ranging from cell phones to high-end network servers. In 2005 alone, the Defendants’ worldwide SRAM sales were in excess of $2 billion. The Direct Purchaser Plaintiffs’ claims are based on Defendants’ alleged violation of the U.S. federal antitrust laws (15 U.S.C. § 1). The cases are currently pending before Judge Claudia Wilken in the U.S. District Court for the Northern District of California.
Recent Activity
On February 14, 2008, the Direct Purchaser Plaintiffs defeated 11 of the 12 motions to dismiss that the Defendant SRAM manufacturers filed. In her order denying the Defendants’ motions, Judge Wilkin said: "the Court finds that the Plaintiffs have plead sufficient facts plausibly to suggest a § 1 price-fixing conspiracy."
On May 15, 2008, CPM filed a Motion to Certify the Proposed Class of Direct Purchasers of SRAM. The hearing on that motion is currently scheduled to be heard before Judge Wilken on September 18, 2008.
Documents:
Consolidated Complaint PDF, 1.4 MB
Order denying motions to dismiss PDF, 150K
Motion for class certification PDF, 150K
- NAND Flash Memory Antitrust Litigation
Case No. 07-0086 (N.D. Cal.)
Date Filed: January 5, 2007
CPM, together with Zelle Hofmann Voelbel Mason & Gette, is the court-appointed Lead Counsel on behalf of the proposed class of indirect purchasers in this class action against the major manufacturers of NAND Flash Memory, such as Samsung, Toshiba, Renesas, Hynix, and SanDisk. Plaintiffs allege that beginning in January 1999 the Defendant companies conspired to fix, raise and maintain the prices of NAND Flash Memory. In the past few years, this type of memory chip has become one of the most widely popularized memory chips, and it is used in a whole host of computer and consume electronics products, including Apple's iPhone and the removable memory cards for digital cameras and video game consoles. In 2006 alone, the Defendants' worldwide NAND Flash Memory sales were in excess of $10 billion. The Plaintiffs' claims are based on Defendants' alleged violation of the various state antitrust laws, such as California, Florida, New York, and Minnesota. The cases are currently pending before Judge Saundra Armstrong in the U.S. District Court for the Northern District of California.
Recent Activity:
On April 22, 2008, CPM and Zelle Hofmann filed an Opposition to the Motions to Dismiss filed by each of the Defendant NAND Flash Memory manufacturers. Judge Armstrong has taken the matter under submission.
Documents:
Consolidated Complaint PDF, 1.2MB
- Transpacific Passenger Air Transportation Antitrust Litigation
MDL No. 1913 (N.D. Cal.)
Date Filed: November 6, 2007
CPM, together Cohen, Milstein, Hausfeld & Toll, is the court-appointed lead counsel for a proposed class of direct purchasers of long-haul passenger air transportation. Plaintiffs allege that the major airlines providing transpacific flights to and from the United States conspired to fix the price of such flights, including associated fuel surcharges. Defendants in the case include Air New Zealand, All Nippon Airways, Cathay Pacific Airways, China Airlines, Eva Airways, Japan Airlines International, Malaysia Airlines, Northwest Airlines, Qantas Airways, Singapore Airlines, Thai Airways, and United Airlines. Plaintiffs allege that the price-fixing conspiracy by Defendants violated U.S. federal antitrust law (1 U.S.C. § 1) [and are investigating whether the conduct also violated the antitrust laws of other nations].
Recent Activity
On March 28, 2008, the Court appointed CPM and Cohen, Milstein, Hausfeld & Toll interim class counsel.
Documents
Wortman Complaint PDF, 1MB
- International Air Transportation Surcharge Antitrust Litigation
MDL No. 1793 (N.D. Cal.)
Date Filed: October 27, 2006
CPM, together Cohen, Milstein, Hausfeld & Toll, is the court-appointed lead counsel for classes of direct purchasers in the U.S. and the United Kingdom of long-haul passenger air transportation to and from the United Kingdom. Plaintiffs allege that the major airlines which dominate that market conspired to fix the price of such flights, including associated fuel surcharges. On April 25, 2008, Judge Charles R. Breyer granted preliminary approval of a proposed settlements with Defendants Virgin Atlantic Airways, LTD and British Airways Plc worth approximately $204 million. If given final approval, the settlement will resolve the claims of purchasers in both the United States and the United Kingdom based on U.S. federal antitrust laws (1 U.S.C. § 1) and the antitrust laws of the United Kingdom and European Union. The proposed settlements provide for the refund of 33.3 % of fuel surcharges paid by purchasers of qualifying flights from Virgin Atlantic of British Airways. For information regarding the proposed settlements, please visit https://www.airpassengerrefund.com or https://www.airpassengerrefund.co.uk.
Recent Activity
On April 25, 2008, the Court granted preliminary approval of the proposed settlements and associated notice programs. In the associated hearings, the Court strongly praised both the terms of the proposed settlements and associated notice program. The hearing on final approval of the proposed settlements will take place on September 26, 2008. For more information, please see the websites above.
Documents
Consolidated Complaint PDF, 916K
Order Granting Preliminary Approval of the Proposed Settlements
PDF, 92K
- Pacific Noncontiguous Ocean Shipping Antitrust Litigation
MDL No. 1972 (district assignment pending)
Date Filed: May 9, 2008
CPM, with co-counsel, have filed two complaints on behalf of proposed classes of direct purchasers of domestic ocean shipping services between the U.S. mainland and Hawaii (“the Hawaii Trade”) and between the U.S. mainland and Guam (“the Guam Trade”). These complaints-which CPM is seeking to have consolidated along with related complaints brought by other plaintiffs-allege that the two carriers that dominate the Hawaii and Guam Trades, Matson Navigation and Horizon Lines, have conspired to fix the price of domestic ocean shipping in the two trades in violation of U.S. federal antitrust law (15 U.S.C. § 1).
Recent Activity
CPM has filed a motion for transfer to the Northern District of California for consolidation of all related cases. The motion will be heard July 31, 2008.
Documents
Guam Trade Complaint PDF, 1.4 MB
Hawaii Trade Complaint PDF, 1.1 MB
Motion for Transfer PDF, 80K
- Puerto Rico Ocean Shipping Antitrust Litigation
MDL No. 1960 (district assignment pending)
Date filed: April 23, 2008
CPM, with co-counsel, have filed a complaint of behalf of proposed class of direct purchasers of domestic ocean shipping services between the U.S. mainland and Puerto Rico (“the Puerto Rico Trade”). The complaint-which CPM is seeking to have consolidated with related complaints brought by other plaintiffs-alleges that the carriers that dominate the Puerto Rico Trade, Horizon Lines, Sea Star Lines, Crowley Liner Services, and Trailer Bridge, have conspired to fix the price of domestic ocean shipping in the Puerto Rico Trade in violation of U.S. federal antitrust law (15 U.S.C. § 1).
Recent Activity
CPM has filed a motion for transfer to the Southern District of Florida for consolidation of all related cases. The motion will be heard July 31, 2008.
Documents
Isaac Industries Complaint PDF, 964K
Motion for Transfer PDF, 88K
- Air Cargo Shipping Services Antitrust Litigation
MDL No. 1775 (E.D.N.Y,)
Date Filed: June 27, 2006
CPM, with co-counsel, is the court-appointed lead counsel for a proposed class of U.S. indirect purchasers of international air freight services. The case alleges that the providers of international air freight services conspired to fix the prices of such services, including fuel surcharges. The case names almost forty international air freight carriers as defendants. The claims of the United States indirect purchasers is brought under the antitrust laws and consumer protection laws of various U.S. states. On April 4, 2008, the Court preliminarily approved a proposed settlement worth over $85 million with defendants Deutsche Lufthansa AG, Lufthansa Cargo AG, and Swiss International Air Lines, Ltd. For information regarding the proposed settlement, please visit http://www.aircargosettlement.com.
Recent Activity
On April 4, 2008, the Court granted preliminary approval of the proposed settlement and associated notice program. The hearing on final approval of the proposed settlements will take place on December 12, 2008. For more information, please see the website above.
Documents
Consolidated Complaint PDF, 328K
Order Granting Preliminary Approval of the Proposed Settlement
PDF, 36K
- Freight Forwarders Antitrust Litigation
No. CV 08-0042 (E.D.N.Y.)
Date Filed: January 3, 2008
CPM, with co-counsel, have filed a complaint on behalf of a proposed class of direct purchasers of freight forwarding services in the United States. “Freight forwarding services” includes services relating to the organization of transportation of items via air, ship, rail, and truck, both nationally and internationally. The complaint alleges that the major providers of freight forwarding services conspired to fix the prices of such services in violation of U.S. federal antitrust law (15 U.S.C. § 1).
Documents
Precision Associates Complaint PDF, 950K
- LTL Shipping Service Antitrust Litigation
MDL No. 1895 (N.D. Ga.)
Date filed: October 18, 2007
CPM, with co-counsel, represent a proposed class of direct purchasers of less-than-truckload (“LTL”) freight shipping services. The case alleges that all the national and regional trucking freight carrier conglomerates conspired to fix fuel surcharges in violation of U.S. federal antitrust law (15 U.S.C. § 1).
Documents
Consolidated Complaint PDF, 404K
- Municipal Derivative Market Manipulation Litigation MOVE TO TOP
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CPM, with co-counsel, is preparing to file complaints on behalf of various public entities that participated in the municipal derivatives market. Municipal derivatives are investment vehicles that provide public entity issuers of municipal bonds a means to reinvest the proceeds of municipal bond issuances or hedge the interest rate obligations of underlying municipal bonds. CPM’s investigation has revealed a massive bid-rigging, market allocation, and kick-back conspiracy among the major providers of municipal derivatives-principally investment banks and insurance companies-and the brokers who arranged auctions for these products. The cases will allege that this conspiracy and other conduct by brokers and providers violated antitrust laws and various other provisions of statutory and common law.
- Bond Insurance Market Manipulation Litigation
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CPM, with co-counsel, is preparing to file complaints on behalf of various public entities that purchased municipal bond insurance. CPM’s investigation has revealed that municipal bond insurance providers conspired to maintain a dual credit rating system that unfairly assigned public entities a lower credit rating than equivalent private companies. This unfairly low credit rating compelled public entities to purchase bond insurance in order to raise their credit rating and thus reduce the interest rate obligations on underlying bonds. The cases will further allege that the bond insurers improperly failed to disclose to their public entity customers that they were making risky bets in the subprime mortgage market; these bets ultimately failed, making the bond insurance sold to public entities worthless. The cases will state claims based on antitrust laws and various other provisions statutory and common law.
- Hip And Knee Implant Marketing Litigation
MDL No. 1973 (district assignment pending)
Date filed: March 24, 2008
CPM, with co-counsel, has filed two complaints on behalf of proposed classes of persons who underwent hip or knee implant surgery. The complaints allege that the major manufacturers of hip and knee implants have engaged in a pervasive kickback scheme, using phony consulting agreements with orthopaedic surgeons, to improperly funnel money to doctors and hospitals in return for choosing the manufacturer’s device during surgeries. This scheme artificially raised the costs of hip or knee implants paid for by members of the proposed class in violation of state antitrust and consumer protection laws.
Recent Activity
CPM has made a motion to transfer all related cases to the Northern District of California for consolidation. The motion will be heard on July 31, 2008.
Documents
Stryker Complaint PDF, 1MB
Zimmer Complaint PDF, 1MB
Motion for Transfer PDF, 1MB
- Tarantino et al. v. Hanjin Shipping Co., Ltd., et al.
No. CGC-07-469379 (San Francisco Cnty. Sup. Crt.)
Date filed: November 20, 2007
CPM has filed a complaint on behalf of a proposed class of commercial fishermen injured by the San Francisco Bay oil spill of November 7, 2007, caused when the Cosco Busan allided with the Bay Bridge. The complaint alleges violations of the California state Lempert-Keene-Seastrand Oil Prevention and Response Act (Gov’t Code §§ 8670, et seq.) and various other provisions of statutory and common law against the Hong Kong-based owner of the ship Regal Stone, Ltd., the Hong Kong-based operator of the ship Fleet Management, Ltd., the South Korea-based charterer of the ship Hanjin Shipping Co., Ltd., and the ship’s pilot John Cota. The suit seeks compensatory damages reflecting past and future losses of affected fishermen, punitive damages, and the establishment of an environmental monitoring fund to ensure the public as to the long-term health and safety of fish caught in the San Francisco Bay Area.
Documents
First Amended Complaint PDF, 1MB
- Merrill Lynch Accused of Hiding Subprime Losses
Acting on behalf of former First Republic Bank shareholders, CP&M filed suit against Merrill Lynch & Co., accusing the Wall Street investment bank of hiding billions of dollars of losses related to subprime mortgages while the companies' merger was pending. The class-action complaint was filed in January 2008 in U.S. District Court in New York. It accuses Merrill and several executives and directors, including former Chief Executive Stanley O'Neal, of misleading First Republic shareholders about its finances as they considered Merrill's $1.8 billion takeover of the company. "Merrill Lynch effectively hid its subprime exposure right up until the close of the merger," said Mark Molumphy of CP&M. Molumphy said former First Republic shareholders lost about $250 million because Merrill's share price declined in the weeks following the merger on September 21, 2007. Merrill disclosed a $5.5 billion write-down on October 5 and then on October 24, increased the write-down to $8.4 billion. Merrill had agreed in January 2006 to buy San Francisco-based First Republic, which specialized in serving wealthier customers. First Republic shareholders approved the transaction in July.
- Suit Alleges Nursing Home Put Profits Above Care
CP&M, acting on behalf of San Mateo County, filed suit against a Redwood City, California nursing home alleging it put profits above care in the near scalding death of a 51-year-old disabled woman. The victim, Theresa Rodriguez, a conservatee of the San Mateo County Public Guardian, currently is in an acute care unit at a hospital. She cannot communicate nor eat and is being kept alive on a feeding tube. The suit was filed by CP&M and the San Mateo County Counsel's Office for the San Mateo Public Guardian. It seeks to recover damages for Ms. Rodriguez' near fatal injuries allegedly caused by ResCare, a corporation that operates homes for developmentally disabled persons and others in 34 states. The suit also seeks punitive damages and funding for future care. According to the lawsuit, Ms. Rodriguez suffered second and third degree burns on her genitals, thighs, stomach and lower back when she was put in a shower for 20 minutes with scalding, 130 to 135-degree temperature water on May 5, 2004 at the ResCare California Inc. facility on McGarvey Avenue in Redwood City. The injuries were compounded by staff who put her in a bed and left her alone for three and one-half hours before calling 911, the suit said. Following the 911 call, she was airlifted to a hospital burn unit where she was on a life support system for two months. The suit, filed in San Mateo County Superior Court in January 2006, also alleges a new water heater had been installed at the facility only days before the incident, that employees knew it was malfunctioning – producing 130 to 135-degree hot water -- and did nothing to remedy the problem. The suit said the staffer who put Ms. Rodriguez into the shower "was untrained and unqualified to work" with the victim. "This is a heartbreaking situation that would never have happened if proper staffing and training had been maintained," said Niall P. McCarthy of CP&M. "Unfortunately, this case is only the tip of the iceberg of abuse in nursing and care homes." In addition to damages, the suit seeks an injunction prohibiting ResCare from assigning untrained and unqualified staff to care for vulnerable clients.
- Merck & Co. Sued by Several Plaintiffs
Several lawsuits have been filed by CP&M and the Law Office of Donald L. Galine on behalf of the users of VIOXX. The suits accuse the maker of VIOXX, the pharmaceutical company Merck & Co., of keeping the arthritis and acute pain medication on the market when it knew it was dangerous. Merck & Co. has since announced a worldwide withdrawal of the anti-inflammatory drug following government reports that people taking VIOXX are three times more likely to have heart attacks and strokes than people who take similar drugs.
- Class Action Suit Filed Over Hidden Wireless Telephone Fees
AT&T Wireless, Sprint and Cingular Wireless have illegally charged subscribers for services, including "local number portability" fees, even though the services are not available, according to a class action lawsuit. The suit was filed in San Mateo County Superior Court in Redwood City, California, by CP&M. The suit also accuses the carriers of including the fees "in obscurely worded line items on customers' bills such as Regulatory Program Fees or Regulatory Cost Recovery Fees which deceives customers." The suit said "local number portability" or LNP fees were being charged by the carriers despite the fact that the service did not go into effect until late 2003. At the same time, the suit said, the wireless carriers "have banded together to prevent implementation of the LNP program, and in effect, are charging customers to support their fight to keep in place barriers which make it more difficult for these customers to change companies." The federally-ordered LPN program allows wireless subscribers to change from one carrier to another and keep the same number. The case went to the Court of Appeal and is now back in the Superior Court.
- Lawsuit Filed to Protect Northern California Salmon
A group of Klamath River tribal leaders, commercial fishermen and recreational business owners filed suit against Pacific Corp., contending two of its dams in Northern California are the cause of toxic algae that is decimating the salmon fishery and is a potential health hazard to humans. The suit was filed in U.S. District Court in May 2007 by Joseph W. Cotchett of CP&M and Robert F. Kennedy Jr., of Kennedy & Madonna of Hurley, New York. One of the main claims of the suit is that the "ceremonies and substance fishing for Yurok and Karuk tribes are under siege because of the deadly toxins created by PacifiCorpÕs dams," said Cotchett. The suit contends the reservoirs behind the Iron Gate and Copco dams near the Oregon border are a toxic nuisance and that Portland-based PacifiCorp should be enjoined from operating them in a way that causes an annual toxic bloom of algae because of improper intake and release of water. The suit said that for at least the last six years, PacifiCorp., whose hydroelectric operations provide power to customers in Oregon and California, has been aware of the toxic algae blooms but has failed to correct the situation.
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