The Connecticut Supreme Court recently held that the Connecticut Attorney General may pursue “damages to its general economy caused by violations of the Connecticut Antitrust Act.” State of Connecticut v. Marsh and Mclennan Companies, Inc., SC 17861 (Ct. Apr. 15, 2008). In Marsh, the Connecticut Attorney General claimed that the bid rigging scheme orchestrated by Marsh — in which Marsh decided which insurance companies should win individual contracts and which should submit high bids — caused far reaching harm to the entire Connecticut general economy. Insurance companies that did not comply with Marsh’s demands would be cut-off from all of Marsh’s customers. The Connecticut Attorney General argued that Connecticut was particularly vulnerable to Marsh’s scheme as Connecticut is home to many insurance companies. While the Court recognized that its decision conflicted with Hawaii v. Standard Oil Co. of California, 405 U.S. 251 (1972) (holding that Clayton Act does not confer standing for general economic harm), the Court observed that the relevant language of the Connecticut Antitrust Act differed from the Clayton Act. The Court noted that unlike the Clayton Act, the Connecticut Antitrust Act provides specifically that the attorney general may bring an action as parens patriae “with respect to damages to the general economy of the state or any political subdivision thereof.” The Court recognized that although the state may have difficulty proving those damages, it would be improper to grant a motion to dismiss the Complaint on that basis. A copy of the opinion is attached.
Apr
14
Posted by : | On : April 14, 2008
Apr
03
Posted by : | On : April 3, 2008
On March 28, 2008, the United States Court of Appeals for the First Circuit reversed the grant of class certification in In re New Motor Vehicles Canadian Export Antitrust Litigation, Nos. 07-2257, 07-2258, 07-2259, 2008 WL (1st Cir. Mar. 28, 2008). In that case, plaintiffs alleged a conspiracy among car manufacturers — a violation of Section 1 of the Sherman Act — to discourage U.S. customers from purchasing cars in Canada — which were cheaper at the time due to favorable exchange rates — for their use in the U.S. The manufacturers allegedly used a variety of mechanisms to discourage this customer practice such as refusing to honor warranties on Canadian cars. The United States District Court for the District of Maine certified two classes — (1) injunctive relief class under Section 16 of the Clayton Act and (2) damages class under various state antitrust and consumer protection laws. Defendants argued that plaintiffs’ claim for injunctive relief was moot because there is no longer a “realistic threat” of future harm. As a result of the weak dollar, there is no longer a realistic threat that manufacturers will conspire to keep consumers from importing cars from Canada. The Third Circuit agreed and reversed class certification on the injunctive relief claim with instructions to dismiss that claim. The Third Circuit also agreed with the District Court’s treatment of the damages class — that plaintiffs should have more time to develop their theories to support class certification. The Third Circuit, nevertheless, vacated the preliminary grant of class certification because it was concerned that subject matter jurisdiction no longer existed. With the federal claim now dismissed, there would have to be an independent basis for federal subject matter jurisdiction over the damages claims under state law. The District Court was instructed to determine if jurisdiction existed.
Feb
22
Posted by : | On : February 22, 2008
February 22, 2008. Two former Marsh executives (William Gilman and Edward McNenney) were convicted after a 10-month bench trial of bid rigging in violation of New York’s Donnolly Act. They were acquitted of grand larceny and engaging in schemes to defraud. These charges stem from Marsh’s scheme of steering business to insurers who paid Marsh the highest contingent commissions. The case was brought by the New York State Attorney General in New York State Supreme Court, New York County. In addition to agreeing to refrain from such conduct in the future, Marsh had paid $850 million to settle with the New York Attorney General. Another executive pleaded guilty to engaging in a scheme to defraud in 2005.